Document:

Exhibit
10.45

 

 

 

LOAN AGREEMENT

 

dated as of

 

August 25, 2005

 

among

 

DOUGLAS EMMETT 1997, LLC,

A DELAWARE LIMITED LIABILITY COMPANY

 

and

 

WESTWOOD PLACE INVESTORS, LLC,

A DELAWARE LIMITED LIABILITY COMPANY

 

the LENDERS Party Hereto,

 

and

 

EUROHYPO AG, NEW
YORK BRANCH,

as Administrative Agent

 

 

$425,000,000

 

 

EUROHYPO AG, NEW YORK BRANCH,

as Lead Arranger and Joint Bookrunner

 

and

 

BARCLAYS CAPITAL
REAL ESTATE INC.

as Co-Lead Arranger and Joint Bookrunner

 

 

 

 

	
  ARTICLE I

  	
  DEFINITIONS
  AND ACCOUNTING MATTERS

  	
  2

  
	
  1.01

  	
  Certain Defined Terms

  	
  2

  
	
  1.02

  	
  Accounting Terms and
  Determinations

  	
  35

  
	
  1.03

  	
  Types of Loans

  	
  35

  
	
  1.04

  	
  Terms Generally

  	
  36

  
	
  ARTICLE II

  	
  COMMITMENTS,
  LOANS, NOTES AND PREPAYMENTS

  	
  37

  
	
  2.01

  	
  Loans

  	
  37

  
	
  2.02

  	
  Funding of Loans

  	
  37

  
	
  2.03

  	
  Several Obligations

  	
  37

  
	
  2.04

  	
  Notes

  	
  37

  
	
  2.05

  	
  Conversions or Continuations
  of Loans

  	
  38

  
	
  2.06

  	
  Prepayment

  	
  38

  
	
  2.07

  	
  Mandatory Prepayments

  	
  40

  
	
  2.08

  	
  Interest and Other Charges on
  Prepayment

  	
  40

  
	
  2.09

  	
  Release of Projects

  	
  41

  
	
  2.10

  	
  Call Date

  	
  43

  
	
  ARTICLE III

  	
  PAYMENTS
  OF PRINCIPAL AND INTEREST

  	
  44

  
	
  3.01

  	
  Repayment of Loans

  	
  44

  
	
  3.02

  	
  Interest

  	
  45

  
	
  3.03

  	
  Project-Level Account

  	
  46

  
	
  ARTICLE IV

  	
  PAYMENTS;
  PRO RATA TREATMENT; COMPUTATIONS; ETC.

  	
  47

  
	
  4.01

  	
  Payments

  	
  47

  
	
  4.02

  	
  Pro Rata Treatment

  	
  48

  
	
  4.03

  	
  Computations

  	
  49

  
	
  4.04

  	
  Minimum Amounts

  	
  49

  
	
  4.05

  	
  Certain Notices

  	
  49

  
	
  4.06

  	
  Non-Receipt of Funds by the
  Administrative Agent

  	
  50

  
	
  4.07

  	
  Sharing of Payments, Etc.

  	
  51

  
	
  ARTICLE V

  	
  YIELD
  PROTECTION, ETC.

  	
  52

  
	
  5.01

  	
  Additional Costs

  	
  52

  
	
  5.02

  	
  Limitation on Eurodollar Loans

  	
  54

  
	
  5.03

  	
  Illegality

  	
  55

  
	
  5.04

  	
  Treatment of Affected Loans

  	
  55

  

 

i

 

	
  5.05

  	
  Compensation

  	
  56

  
	
  5.06

  	
  Taxes

  	
  57

  
	
  5.07

  	
  Replacement of Lenders

  	
  58

  
	
  ARTICLE VI

  	
  CONDITIONS
  PRECEDENT

  	
  59

  
	
  6.01

  	
  Conditions Precedent to
  Effectiveness of Loan Commitments

  	
  59

  
	
  ARTICLE VII

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  64

  
	
  7.01

  	
  Organization; Powers

  	
  64

  
	
  7.02

  	
  Authorization; Enforceability

  	
  64

  
	
  7.03

  	
  Government Approvals; No
  Conflicts

  	
  64

  
	
  7.04

  	
  Financial Condition

  	
  65

  
	
  7.05

  	
  Litigation

  	
  65

  
	
  7.06

  	
  ERISA

  	
  65

  
	
  7.07

  	
  Taxes

  	
  65

  
	
  7.08

  	
  Investment and Holding Company
  Status

  	
  66

  
	
  7.09

  	
  Environmental Matters

  	
  66

  
	
  7.10

  	
  Organizational Structure

  	
  67

  
	
  7.11

  	
  Subsidiaries

  	
  67

  
	
  7.12

  	
  Title

  	
  67

  
	
  7.13

  	
  No Bankruptcy Filing

  	
  67

  
	
  7.14

  	
  Executive Offices; Places of
  Organization

  	
  67

  
	
  7.15

  	
  Compliance; Government
  Approvals

  	
  67

  
	
  7.16

  	
  Condemnation; Casualty

  	
  68

  
	
  7.17

  	
  Utilities and Public Access;
  No Shared Facilities

  	
  68

  
	
  7.18

  	
  Solvency

  	
  68

  
	
  7.19

  	
  Foreign Person

  	
  68

  
	
  7.20

  	
  No Joint Assessment; Separate
  Lots

  	
  68

  
	
  7.21

  	
  Security Interests and Liens

  	
  68

  
	
  7.22

  	
  Leases

  	
  69

  
	
  7.23

  	
  Insurance

  	
  70

  
	
  7.24

  	
  Physical Condition

  	
  70

  
	
  7.25

  	
  Flood Zone

  	
  70

  
	
  7.26

  	
  Management Agreement

  	
  70

  
	
  7.27

  	
  Boundaries

  	
  70

  

 

ii

 

	
  7.28

  	
  Illegal Activity

  	
  71

  
	
  7.29

  	
  Permitted Liens

  	
  71

  
	
  7.30

  	
  Foreign Assets Control
  Regulations, Etc.

  	
  71

  
	
  7.31

  	
  Defaults

  	
  71

  
	
  7.32

  	
  Other Representations

  	
  71

  
	
  7.33

  	
  True and Complete Disclosure

  	
  71

  
	
  7.34

  	
  Reserved

  	
  72

  
	
  7.35

  	
  Limited Partners

  	
  72

  
	
  7.36

  	
  Non-Foreign Status

  	
  72

  
	
  7.37

  	
  Borrower’s Member

  	
  72

  
	
  ARTICLE VIII

  	
  AFFIRMATIVE
  COVENANTS OF THE BORROWER

  	
  81

  
	
  8.01

  	
  Information

  	
  81

  
	
  8.02

  	
  Notices of Material Events

  	
  84

  
	
  8.03

  	
  Existence, Etc.

  	
  85

  
	
  8.04

  	
  Compliance with Laws; Adverse
  Regulatory Changes

  	
  85

  
	
  8.05

  	
  Insurance

  	
  86

  
	
  8.06

  	
  Real Estate Taxes and Other
  Charges

  	
  91

  
	
  8.07

  	
  Maintenance of the Projects;
  Alterations

  	
  92

  
	
  8.08

  	
  Further Assurances

  	
  93

  
	
  8.09

  	
  Performance of the Loan
  Documents

  	
  93

  
	
  8.10

  	
  Books and Records; Inspection
  Rights

  	
  93

  
	
  8.11

  	
  Environmental Compliance

  	
  93

  
	
  8.12

  	
  Management of the Projects

  	
  95

  
	
  8.13

  	
  Leases

  	
  95

  
	
  8.14

  	
  Tenant Estoppels

  	
  96

  
	
  8.15

  	
  Subordination, Non-Disturbance
  and Attornment Agreements

  	
  96

  
	
  8.16

  	
  Operating Plan and Budget

  	
  96

  
	
  8.17

  	
  Operating Expenses

  	
  97

  
	
  8.18

  	
  Margin Regulations

  	
  97

  
	
  8.19

  	
  Hedge Agreements

  	
  97

  
	
  8.20

  	
  Reserved

  	
  101

  
	
  8.21

  	
  Required Work

  	
  101

  

 

iii

 

	
  ARTICLE IX

  	
  NEGATIVE
  COVENANTS OF THE BORROWER

  	
  102

  
	
  9.01

  	
  Fundamental Change

  	
  102

  
	
  9.02

  	
  Limitation on Liens

  	
  103

  
	
  9.03

  	
  Due on Sale; Transfer; Pledge

  	
  105

  
	
  9.04

  	
  Indebtedness

  	
  110

  
	
  9.05

  	
  Investments

  	
  113

  
	
  9.06

  	
  Restricted Payments

  	
  114

  
	
  9.07

  	
  Change of Organization
  Structure; Location of Principal Office

  	
  114

  
	
  9.08

  	
  Transactions with Affiliates

  	
  114

  
	
  9.09

  	
  Leases

  	
  114

  
	
  9.10

  	
  Reserved

  	
  116

  
	
  9.11

  	
  No Joint Assessment; Separate
  Lots

  	
  116

  
	
  9.12

  	
  Zoning

  	
  116

  
	
  9.13

  	
  ERISA

  	
  117

  
	
  9.14

  	
  Reserved

  	
  117

  
	
  9.15

  	
  Property Management

  	
  117

  
	
  9.16

  	
  Foreign Assets Control
  Regulations

  	
  117

  
	
  ARTICLE X

  	
  INSURANCE
  AND CONDEMNATION PROCEEDS

  	
  122

  
	
  10.01

  	
  Casualty Events

  	
  122

  
	
  10.02

  	
  Condemnation Awards

  	
  123

  
	
  10.03

  	
  Restoration

  	
  124

  
	
  ARTICLE XI

  	
  CASH
  TRAP ACCOUNT

  	
  130

  
	
  11.01

  	
  Low DSCR Trigger Event

  	
  130

  
	
  ARTICLE XII

  	
  EVENTS
  OF DEFAULT

  	
  133

  
	
  12.01

  	
  Events of Default

  	
  133

  
	
  12.02

  	
  Remedies

  	
  136

  
	
  ARTICLE XIII

  	
  THE
  ADMINISTRATIVE AGENT

  	
  138

  
	
  13.01

  	
  Appointment, Powers and
  Immunities

  	
  138

  
	
  13.02

  	
  Reliance by Administrative
  Agent

  	
  140

  
	
  13.03

  	
  Defaults

  	
  140

  
	
  13.04

  	
  Rights as a Lender

  	
  142

  
	
  13.05

  	
  Indemnification

  	
  143

  
	
  13.06

  	
  Non-Reliance on Administrative
  Agent and Other Lenders

  	
  143

  

 

iv

 

	
  13.07

  	
  Failure to Act

  	
  143

  
	
  13.08

  	
  Resignation of Administrative
  Agent

  	
  143

  
	
  13.09

  	
  Consents under Loan Documents

  	
  145

  
	
  13.10

  	
  Authorization

  	
  145

  
	
  13.11

  	
  Amendments Concerning Agency
  Function

  	
  146

  
	
  13.12

  	
  Liability of the
  Administrative Agent

  	
  146

  
	
  13.13

  	
  Transfer of Agency Function

  	
  146

  
	
  13.14

  	
  Co-Lead Arranger and Joint
  Bookrunner

  	
  146

  
	
  ARTICLE XIV      MISCELLANEOUS

  	
  147

  
	
  14.01

  	
  Non-Waiver; Remedies
  Cumulative

  	
  147

  
	
  14.02

  	
  Notices

  	
  147

  
	
  14.03

  	
  Expenses, Etc.

  	
  148

  
	
  14.04

  	
  Indemnification

  	
  149

  
	
  14.05

  	
  Amendments, Etc.

  	
  151

  
	
  14.06

  	
  Successors and Assigns

  	
  151

  
	
  14.07

  	
  Assignments and Participations

  	
  152

  
	
  14.08

  	
  Survival

  	
  155

  
	
  14.09

  	
  Reserved

  	
  155

  
	
  14.10

  	
  Right of Set-off

  	
  155

  
	
  14.11

  	
  Remedies of Borrower

  	
  156

  
	
  14.12

  	
  Brokers

  	
  157

  
	
  14.13

  	
  Estoppel Certificates

  	
  157

  
	
  14.14

  	
  Preferences

  	
  157

  
	
  14.15

  	
  Certain Waivers

  	
  158

  
	
  14.16

  	
  Entire Agreement

  	
  158

  
	
  14.17

  	
  Severability

  	
  158

  
	
  14.18

  	
  Captions

  	
  158

  
	
  14.19

  	
  Counterparts

  	
  158

  
	
  14.20

  	
  GOVERNING LAW

  	
  158

  
	
  14.21

  	
  SUBMISSION TO JURISDICTION

  	
  159

  
	
  14.22

  	
  WAIVER OF JURY TRIAL;
  COUNTERCLAIM

  	
  159

  
	
  14.23

  	
  Limitation of Liability

  	
  160

  
	
  14.24

  	
  Confidentiality

  	
  162

  

 

v

 

	
  14.25

  	
  Usury Savings Clause

  	
  163

  
	
  14.26

  	
  Cooperation with Syndication

  	
  163

  
	
  14.27

  	
  Reserved

  	
  164

  
	
  14.29

  	
  Financing Statements

  	
  168

  
	
  14.30

  	
  Severance of Loan

  	
  168

  
	
  14.31
  

  	
  Additional Permitted Public
  REIT Provisions

  	
  169

  

 

 

SCHEDULES:

 

	
  Schedule 1A

  	
  -

  	
  List of Projects

  
	
  Schedule 1B

  	
  -

  	
  Legal
  Descriptions of Projects

  
	
  Schedule 1C-1

  	
  -

  	
  Westwood Place
  Project

  
	
  Schedule 1C-2

  	
  -

  	
  Westwood Place
  Legal Description

  
	
  Schedule 1.01(1)

  	
  -

  	
  Allocated Loan
  Amounts

  
	
  Schedule 1.01(2)

  	
  -

  	
  List of
  Applicable Lending Offices

  
	
  Schedule 1.01(3)

  	
  -

  	
  Appraised Values

  
	
  Schedule 1.01(4)

  	
  -

  	
  List of
  Commitments and Proportionate Shares

  
	
  Schedule 1.01(5)

  	
  -

  	
  Certain Eligible
  Assignees

  
	
  Schedule 1.01(6)

  	
  -

  	
  List of
  Environmental Reports

  
	
  Schedule 1.01(7)

  	
  -

  	
  List of Property
  Condition Reports

  
	
  Schedule 1.01(8)

  	
  -

  	
  List of Property
  Management Agreements

  
	
  Schedule 1.01(9)

  	
  -

  	
  Title Companies

  
	
  Schedule 7.04

  	
  -

  	
  Financial
  Condition Events—Borrower

  
	
  Schedule 7.04A

  	
  -

  	
  Financial
  Condition Events—Westwood Place

  
	
  Schedule 7.05

  	
  -

  	
  Pending
  Litigation—Borrower

  
	
  Schedule 7.05A

  	
  -

  	
  Pending
  Litigation—Westwood Place

  
	
  Schedule 7.09

  	
  -

  	
  Environmental
  Matters—Borrower

  
	
  Schedule 7.09A

  	
  -

  	
  Environmental
  Matters—Westwood Place

  
	
  Schedule 7.22

  	
  -

  	
  Rent
  Roll—Borrower

  
	
  Schedule 7.22A

  	
  -

  	
  Rent
  Roll—Westwood Place

  
	
  Schedule 8.11

  	
  -

  	
  List of
  Underground Storage Tanks

  
	
  Schedule 8.21

  	
  -

  	
  Required Work

  
	
  Schedule 9.12

  	
  -

  	
  Existing
  Non-conforming Uses

  

 

vi

 

EXHIBITS:

 

	
  Exhibit A

  	
  -

  	
  Form of
  Assignment and Assumption

  
	
  Exhibit B-1

  	
  -

  	
  Borrower’s
  Manager’s Limited Indemnity and Guarantee

  
	
  Exhibit C

  	
  -

  	
  Form of Cash
  Trap Account Security Agreement

  
	
  Exhibit D

  	
  -

  	
  Form of Deed of
  Trust

  
	
  Exhibit E -1

  	
  -

  	
  Form of
  Environmental Indemnity (Borrower)

  
	
  Exhibit E-2

  	
  -

  	
  Form of
  Environmental Indemnity (Westwood Place Borrower)

  
	
  Exhibit F

  	
  -

  	
  Form of General
  Assignment

  
	
  Exhibit G-1

  	
  -

  	
  Form of Hedge
  Agreement Pledge (Required)

  
	
  Exhibit G-2

  	
  -

  	
  Form of Hedge
  Agreement Pledge (Optional)

  
	
  Exhibit H

  	
  -

  	
  Form of Notes

  
	
  Exhibit I

  	
  -

  	
  Form of
  Project-Level Account Security Agreement

  
	
  Exhibit J

  	
  -

  	
  Form of Property
  Manager’s Consent

  
	
  Exhibit K

  	
  -

  	
  Form of
  Subordination, Non-Disturbance and Attornment Agreement

  
	
  Exhibit L

  	
  -

  	
  Notice of Conversion
  or Continuation

  
	
  Exhibit M

  	
  -

  	
  Form of Survey
  Certification

  
	
  Exhibit N

  	
  -

  	
  Form of Lease
  Information Summary

  
	
  Exhibit O

  	
  -

  	
  Form of
  Controlled Account Agreement

  
	
  Exhibit P

  	
  -

  	
  Form of Pledge
  Agreement

  

 

vii

 

LOAN AGREEMENT

 

LOAN AGREEMENT dated as
of August 25, 2005 by Douglas Emmett 1997, LLC, a limited liability company
organized under the laws of the State of Delaware (the “Borrower”); WESTWOOD
PLACE INVESTORS, LLC, a limited liability company organized under the laws of
the State of Delaware (the “Westwood Place Borrower”); each of the
lenders (including Eurohypo (as hereinafter defined) in its capacity as a
lender) that is a signatory hereto identified under the caption “LENDERS” on
the signature pages hereto and each lender that becomes a “Lender” after the
date hereof pursuant to Section 14.07(b) (individually, a “Lender”
and, collectively, the “Lenders”); and EUROHYPO AG, NEW YORK BRANCH, as
agent for the Lenders (in such capacity, together with its successors in such
capacity, the “Administrative Agent”).

 

RECITALS:

 

A.            The Borrower is the fee owner of those certain office
buildings listed in Schedule 1A attached hereto located in the County of
Los Angeles, State of California on certain land more fully described in Schedule
1B attached hereto (each such office building and the rights of the
Borrower with respect to the land on which such office building is located,
together with any air rights and other rights, privileges, easements,
hereditaments and appurtenances thereunto relating or appertaining thereto, all
Improvements thereon, together with all fixtures and equipment required for the
operation thereof, all personal property related to the foregoing and the
rights of the Borrower with respect to all other items described in the
granting clause of the Deed of Trust relating to such office building and
interest in land is referred to as a “Project” and, collectively, the “Projects”).

 

B.            The Westwood Place Borrower is the fee owner of that
certain office building listed in Schedule 1C-1 attached hereto located
in the County of Los Angeles, State of California, together with the land on
which such building is located, more fully described in Schedule 1C-2
attached hereto, together with any air rights and other rights, privileges,
easements, hereditaments and appurtenances thereunto relating or appertaining
thereto, all Improvements thereon, together with all fixtures and equipment
required for the operation thereof, all personal property related to the foregoing
and the rights of the Westwood Place Borrower with respect to all other items
described in the granting clause of the Deed of Trust relating to such building
and interest in land (collectively, the “Westwood Place Project”).

 

C.            The Projects and the Westwood Place Project are improved
office buildings (or office building projects) containing, in the aggregate,
approximately 2,456,098 rentable square feet (each such building and all other
improvements constructed on each Project and the Westwood Place Project being,
individually and collectively, the “Improvements”).

 

D.            The Borrower has requested and applied to the Lenders for
a loan in the aggregate principal amount of $382,225,575.52 in connection with
the Projects for the purposes provided herein. The Westwood Place Borrower has
requested and applied to the Lenders for a

 

 

loan in the aggregate principal amount of $42,774,424.48 in connection
with the Westwood Place Project for the purposes provided herein.

 

E.             The Lenders are willing to make such loans on and
subject to the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING MATTERS

 

1.01         Certain Defined Terms. As used
herein, the following terms shall have the following meanings:

 

“Additional Costs”
shall have the meaning assigned to such term in Section 5.01.

 

“Adjusted LIBO Rate”
shall mean, for any Eurodollar Loan for any Interest Period therefor, a rate
per annum (expressed as a percentage and rounded upwards, if necessary, to the
nearest 1/10000 of 1%) determined by the Administrative Agent to be equal to a
fraction, the numerator of which is equal to the LIBO Rate for such Eurodollar
Loan for such Interest Period and the denominator of which is equal to (x) 1 minus (y) the Reserve Requirement (if any) for such
Eurodollar Loan for such Interest Period.

 

“Adjusted Net
Operating Income” shall mean Net Operating Income, exclusive of any income
from tenants subject to any proceeding or case under the Bankruptcy Code
(except to the extent such income has been actually received).

 

“Administrative Agent”
shall have the meaning assigned to such term in the preamble.

 

“Administrative Agent’s
Account” shall mean the account maintained by the Administrative Agent and
of which the Borrower shall have been notified, with such bank as may from time
to time be specified by the Administrative Agent.

 

“Administrative
Questionnaire” shall mean an administrative questionnaire in a form
supplied by the Administrative Agent.

 

“Advance Date”
shall have the meaning assigned to such term in Section 4.06.

 

“Affiliate” shall
mean, with respect to any Person, another Person that directly or indirectly
controls, or is under common control with, or is controlled by, such Person
and, if such Person is an individual, any member of the immediate family
(including parents, spouse, children and siblings) of such individual and any
trust whose principal beneficiary is such individual or one or more members of
such immediate family and any Person who is controlled by any such member or
trust. As used in this definition, “control” (including, with its
correlative meanings,

 

2

 

“controlled by” and “under common control with”) shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided
that, in any event, any Person that owns directly or indirectly securities
having 10% or more of the voting power for the election of directors or other
governing body of a publicly traded corporation or 10% or more of the
partnership, membership or other ownership interests of any other publicly
traded Person (other than as a limited partner of such other Person) shall be
deemed to control such corporation or other Person.

 

“Aggregate Notional
Amount” shall have the meaning assigned to such term in Section 8.19(a).

 

“Agreement” shall
mean this Loan Agreement, as the same may from time to time hereafter be
Modified and in effect from time to time.

 

“All-in-Rate”
shall mean, for any period, an annual interest rate equal to the weighted
average of the following rates: (i) as to any portions of the Outstanding
Principal Amount which are covered by one or more Hedge Agreements (including
any Excess Hedge Agreement for which a Hedge Agreement Pledge has been executed
and delivered to the Administrative Agent and remains in effect) which are in
effect during such period (collectively, the “Hedged Principal Amount”),
an imputed rate equal to the sum of all interest payments due with respect to
such period on the Hedged Principal Amount, plus all payments due by the
Borrower or Other Swap Pledgor with respect to such period under all Hedge
Agreements maintained pursuant to Section 8.19 (including any Excess
Hedge Agreement for which a Hedge Agreement Pledge has been executed and
delivered to the Administrative Agent and remains in effect), minus all
payments due to the Borrower or Other Swap Pledgor with respect to such
period under all Hedge Agreements maintained pursuant to Section 8.19
(including any Excess Hedge Agreement for which a Hedge Agreement Pledge has
been executed and delivered to the Administrative Agent and remains in effect)
(with all such interest and other payments to be annualized), divided by the
Hedged Principal Amount and (ii) as to any portion of the Outstanding Principal
Amount which is not covered by any Hedge Agreement (or Excess Hedge Agreement
for which a Hedge Agreement Pledge has been executed and delivered to the
Administrative Agent and remains in effect) during such period, the weighted average
annual interest rate actually payable hereunder on such Loans during such
period.  For purposes of this calculation, the notional amount provided
for in any Hedge Agreement (or Excess Hedge Agreement) in effect during any
period shall be deemed to “cover” a portion of the Outstanding Principal Amount
outstanding during such period in proportion to the amount which the notional
amount provided for in such Hedge Agreement (or Excess Hedge Agreement) bears
to the entire Outstanding Principal Amount outstanding during such
period.  If this Agreement requires the calculation of the “All-in-Rate”
based upon any monthly or quarterly periods, and the period during which any
Hedge Agreement (or Excess Hedge Agreement) covering any portion of the
Outstanding Principal Amount is in effect is less than the entirety of the
relevant month or quarter, the calculation required under this definition shall
be made separately with respect to the different periods during such month or
quarter during which such portion of the Outstanding Principal Amount is
covered by such Hedge Agreement (or Excess Hedge Agreement), and such
calculations shall be aggregated, on a weighted average basis, for the relevant
period of one month or quarter.

 

3

 

“Allocated Loan Amount”
shall mean, solely for the purposes of performing certain calculations
hereunder: for any Project, the portion of the Loans allocated to such Project
in Schedule 1.01(1) attached hereto, and, for the Westwood Place Project,
the Westwood Place Commitment. The Allocated Loan Amount of a Project suffering
a Casualty Event or a Taking shall be reduced by the amount of any Net Proceeds
attributable to such Project applied by the Administrative Agent in prepayment
of the Outstanding Principal Amount pursuant to Section 2.07.

 

“Annual Budget”
shall have the meaning assigned to such term in Section 8.16(a).

 

“Anti-Terrorism Order”
shall mean Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by
the President of the United States of America (Executive Order Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism).

 

“Applicable Law”
shall mean any statute, law (including Environmental Laws), regulation,
ordinance, rule, judgment, rule of common law, order, decree, Government
Approval, approval, concession, grant, franchise, license, agreement,
directive, guideline, policy, requirement, or other governmental restriction or
any similar form of decision of, or determination by, or any interpretation or
administration of any of the foregoing by, any Governmental Authority, whether
now or hereinafter in effect and, in each case, as amended (including any
thereof pertaining to land use, zoning and building ordinances and codes).

 

“Applicable Lending
Office” shall mean, for each Lender and for each Type of Loan, the “Lending
Office” of such Lender (or of an Affiliate of such Lender) designated for such
Type of Loan on Schedule 1.01(2) or such other office of such Lender (or
of an Affiliate of such Lender) as such Lender may from time to time specify to
the Administrative Agent and the Borrower as the office by which its Loans of
such Type are to be made and maintained.

 

“Applicable Margin”
shall mean (a) with respect to that portion of the Loan evidenced by
Note A, the Note A Applicable Margin, (b) with respect to that
portion of the Loan evidenced by Note B, the Note B Applicable Margin
and (c) with respect to that portion of the Loan evidenced by Note C, the
Note C Applicable Margin.

 

“Appraisal” shall
mean an appraisal of each Project and the Westwood Place Project prepared by an
Appraiser, each such Appraisal must comply in all respects with the standards
for real estate appraisal established pursuant to Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, as amended, and
otherwise in form and substance satisfactory to the Administrative Agent.

 

“Appraised Value”
shall mean, for any Project, the appraised value indicated as such for that
Project in Schedule 1.01(3) attached hereto and shall mean, for the
Westwood Place Project, that certain appraised value indicated as such for the
Westwood Place Project in Schedule 1.01(3), as determined by the
Appraisal.

 

“Appraiser” shall
mean CB Richard Ellis and/or KTR Newmark, or any other “state certified general
appraiser” as such term is defined and construed under applicable regulations
and guidelines issued pursuant to Title XI of the Financial Institutions
Reform,

 

4

 

Recovery, and Enforcement Act of 1989, as amended, which appraiser must
have been licensed and certified by the applicable Governmental Authority
having jurisdiction in the State of California, and which appraiser shall have
been selected by the Administrative Agent.

 

“Approved Annual
Budget” shall have the meaning assigned to such term in Section 8.16(a).

 

“Approved Capital
Expenditures” shall have the meaning assigned to such term in Section
11.01(b).

 

“Approved Fund”
shall mean any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business (and which is not engaged in the
business of acquiring direct or indirect ownership interests in commercial real
estate projects) and that is administered or managed by (a) a Lender, or
(b) a Person that meets the requirements in clauses (i), (ii),
(iii) or (iv) of the definition of “Eligible Assignee.”

 

“Approved Lease”
shall mean (a) each existing Lease as of the Closing Date as set forth in
the Leasing Affidavit and (b) each Lease entered into after the Closing
Date in accordance with the terms and conditions contained in Section 9.09
as such leases and related documents shall be Modified as permitted pursuant to
the terms of this Agreement.

 

“Approved Leasing
Expenditures” shall have the meaning assigned to such term in Section
11.01(b).

 

“Arranger” shall
mean EUROHYPO AG, NEW YORK BRANCH as lead arranger and joint bookrunner of the
lending syndicate.

 

“Assignment and
Assumption” shall mean an Assignment and Assumption, duly executed by the
parties thereto, in substantially the form of Exhibit A attached hereto
and, if required pursuant to Section 14.07(b) consented to by the Borrower
and the Administrative Agent.

 

“Authorized Officer”
shall mean (a) with respect to the Borrower or the Borrower’s Member, any of
the individual officers serving as the President, Vice President, Chief
Financial Officer, Secretary, Treasurer or Assistant Treasurer of Borrower’s
Manager, in its respective capacity as the manager of Borrower or the sole
general partner of Borrower’s Member, and whose name appears on a certificate
of incumbency executed by the Secretary of Borrower’s Manager, in its respective
capacity as the manager of Borrower and/or the sole general partner of Borrower’s
Member, and delivered concurrently with the execution of this Agreement, as
such certificate of incumbency may be amended from time to time to identify the
names of the individuals then holding such offices and certified by the
Secretary of Borrower’s Manager, in its respective capacity as the manager of
Borrower or the sole general partner of Borrower’s Member and (b) with respect
to the Westwood Place Borrower, the President, Vice President, Chief Financial
Officer, Secretary, Treasurer or Assistant Treasurer of Borrower’s Manager, in
its respective

 

5

 

capacity as the general partner of the Borrower’s Member, in its
capacity as the managing member of Westwood Place Borrower, whose name appears
on a certificate of incumbency executed by the Secretary of Borrower’s Manager,
in its respective capacity as the general partner of the Borrower’s Member, in
its capacity as the managing member of Westwood Place Borrower, and delivered
concurrently with the execution of this Agreement, as such certificate of
incumbency may be amended from time to time to identify the names of the
individuals then holding such offices and certified by the Secretary of
Borrower’s Manager.

 

“Bankruptcy Code”
shall mean the Federal Bankruptcy Code of 1978, as amended from time to time.

 

“Bankruptcy Party”
shall mean any of the Borrower Parties (including, in the case of a Borrower
Party which is a Qualified Successor Entity consisting of a Permitted Private
REIT Subsidiary of a Permitted Private REIT, such Permitted Private REIT, its
Operating Partnership and any Permitted Private REIT Subsidiary that holds
direct or indirect interests in the Borrower or the Westwood Place Borrower). Following
a Permitted Public REIT Transfer, “Bankruptcy Party” shall mean any of the
Borrower Parties while such Person qualifies as a “Borrower Party” under the
definition of such term, the Permitted Public REIT, its Operating Partnership,
and any Permitted Public REIT Subsidiary that holds direct or indirect
interests in and controls Borrower and the Westwood Place Borrower. “Bankruptcy
Party” shall also mean any Subsidiary of the Borrower or the Westwood Place
Borrower while such Person remains a Subsidiary of the Borrower or the Westwood
Place Borrower, other than an Immaterial Subsidiary.

 

“Base Rate” shall
mean, for any day, a rate per annum equal to the Federal Funds Rate for such
day. Each change in any interest rate provided for herein based upon the Base
Rate resulting from a change in the Base Rate shall take effect at the time of
such change in the Base Rate.

 

“Base Rate Loans”
shall mean the portions of the Outstanding Principal Amount that bear interest
at rates based upon the Base Rate.

 

“Basel Accord”
shall mean the proposals for risk-based capital framework described by the
Basel Committee on Banking Regulations and Supervisory Practices in its paper
entitled “International Convergence of Capital Measurement and Capital
Standards” dated July 1988, as Modified and in effect from time to time.

 

“Borrower” shall
mean the Borrower named in the preamble to this Agreement until such time (if
any) as a Qualified Successor Entity shall acquire all of the Projects and
assume the obligations of Borrower under the Loan Documents and the originally
named Borrower shall be released from its obligations under the Loan Documents,
in accordance with Section 9.03(a)(iii), at which time the “Borrower”
shall be such Qualified Successor Entity.

 

“Borrower Party”
shall mean each of the Borrower, the Westwood Place Borrower, the Borrower’s
Member and the Borrower’s Manager (and in any event shall not include any such Person
that is not the general partner or manager of the Qualified Successor Entity). Upon
the acquisition of the Projects or the Westwood Place Project, but not of
direct or indirect Equity Interests in the Borrower or the Westwood Place
Borrower, by a Qualified Successor Entity, “Borrower Party” shall also mean and
include such Qualified Successor Entity

 

6

 

and the general partner or manager thereof (except as expressly
provided in this definition) and, unless the Borrower, the Westwood Place
Borrower, the Borrower’s Member or the Borrower’s Manager constitutes the
general partner or manager of the Qualified Successor Entity, shall no longer
include the original Borrower, the Westwood Place Borrower, the original
Borrower’s Member or the original Borrower’s Manager (and in any event shall
not include any such Person that is not the general partner or manager of the
Qualified Successor Entity). Upon the acquisition of the Projects or the
Westwood Place Project, but not of direct or indirect Equity Interests in the
Borrower or the Westwood Place Borrower, by a Qualified Successor Entity that
is a Permitted Public REIT Subsidiary in connection with a Permitted Public
REIT Transfer, “Borrower Party” shall include such Permitted REIT Subsidiary
and its general partner or manager; provided, however, if the general partner
or manager of such Permitted Public REIT Subsidiary is the Permitted Public
REIT or such REIT’s Operating Partnership, “Borrower Party” shall not include
the Permitted Public REIT or such Operating Partnership. Upon the acquisition
of direct or indirect Equity Interests in the Borrower or the Westwood Place
Borrower by a Permitted Public REIT Subsidiary, or by the Operating Partnership
of the Permitted Public REIT, or by the Permitted Public REIT, “Borrower Party”
shall include the Borrower and its general partner or manager, (or the Westwood
Place Borrower and its general partner or manager (as applicable)), but shall
not include such Permitted Public REIT Subsidiary (unless it is the general
partner or manager of the Borrower or the Westwood Place Borrower) or such
Operating Partnership or the Permitted Public REIT (regardless of whether such
Operating Partnership or the Permitted Public REIT is the general partner or
manager of the Borrower or the Westwood Place Borrower).

 

“Borrower’s Account”
shall mean an account maintained by the Borrower and/or the Westwood Place
Borrower with such bank as may from time to time be specified by or approved by
the Administrative Agent to accept the deposit of funds in accordance with this
Agreement.

 

“Borrower’s Manager”
shall mean DERA, in the capacity of (a) the manager of the Borrower or in
the capacity of the sole general partner of Borrower’s Member, under their
respective Organizational Documents, and its successors thereunder in one or
more of such capacities as permitted under the Loan Documents and (b) with
respect to the Westwood Place Borrower, shall mean DERA, in its capacity as the
general partner of the Borrower’s Member, in its capacity as the managing
member of Westwood Place Borrower, under the Organizational Documents of the
Westwood Place Borrower, and its successors thereunder in one or more of such
capacities as permitted under the Loan Documents. Except as may otherwise be
expressly provided herein or as the context may require, each reference herein
to Borrower’s Manager shall mean Borrower’s Manager in such respective capacity
as applicable. It is understood that, notwithstanding anything to the contrary
contained in this Agreement, any covenants, representations or warranties that
are required to be observed under this Agreement by the “Borrower’s Manager”
shall not be required to be observed by any manager of the Borrower consisting
of the Permitted Public REIT or its Operating Partnership.

 

“Borrower’s Manager’s
Limited Indemnity and Guarantee” shall mean that certain Limited Indemnity
and Guarantee in the form of Exhibit B-1 attached hereto, to be
executed, dated and delivered by Borrower’s Manager to the Administrative Agent
(on behalf of the Lenders) on the Closing Date as the same may be Modified and
in effect from time to time.

 

7

 

“Borrower’s Member”
shall mean Douglas Emmett Realty Fund 1997, a California Limited Partnership, (a) as
sole member under the Organizational Documents of Borrower, and its successors
thereunder as sole member of the Borrower as permitted under the Loan Documents
and (b) a member of the Westwood Place Borrower, under the applicable
Organizational Documents, and its successors thereunder in one or more of such
capacities as permitted under the Loan Documents. Except as may otherwise be
expressly provided herein or as the context may require, each reference herein
to Borrower’s Member shall mean Borrower’s Member in both such capacities. It is
understood that, notwithstanding anything to the contrary contained in this
Agreement, any covenants, representations or warranties that are required to be
observed under this Agreement by the “Borrower’s Member” shall not be required
to be observed by any member of the Borrower or the Westwood Place Borrower consisting
of the Permitted Public REIT, its Operating Partnership or any Permitted Public
REIT Subsidiary that is not the general partner or manager of the Borrower
including, without limitation Douglas Emmett Realty Fund 1997, the Borrower’s
Member as of the date hereof, if it is not the general partner or manager of
the Borrower.

 

“Business Day”
shall mean any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City (or, with respect only to payments to be made
by the Borrower or Westwood Place Borrower, in California) are authorized or
required by law to remain closed; provided that, when used in connection
with a borrowing, or Continuation of, a Conversion into, a payment or
prepayment of principal of or interest on, or an Interest Period for, a
Eurodollar Loan, or a notice by the Borrower with respect to any such
borrowing, Continuation, Conversion, payment, prepayment or Interest Period,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

“Business Interruption
Insurance” shall mean rental and/or business income insurance required
pursuant to Section 8.05(a)(iii) or otherwise maintained in accordance
with this Agreement.

 

“Capital Lease
Obligations” shall mean, for any Person, all obligations of such Person to
pay rent or other amounts under a lease of (or other agreement conveying the
right to use) property to the extent such obligations would generally be
classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

 

“Cash Trap Account
Security Agreement” shall mean each Cash Trap Account Security Agreement
substantially in the form of Exhibit C attached hereto, and which
is established and maintained in accordance with Section 11.01. One such
agreement shall be entered into among the Borrower, the Administrative Agent
(on behalf of the Lenders) and a depository bank or financial institution that
is acceptable to the Administrative Agent, and the other such agreement shall
be entered into among the Westwood Place Borrower, the Administrative Agent (on
behalf of the Lenders) and a depository bank or financial institution that is
acceptable to the Administrative Agent.

 

8

 

“Cash Trap Account”
shall have the meaning assigned to such term in the Cash Trap Account Security
Agreement.

 

“Casualty Event”
shall mean any loss of or damage to, any portion of any Project or the Westwood
Place Project by fire or other casualty.

 

“Change of Control”
shall mean, with respect to any Permitted Public REIT, any event or series of
events by which any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding (i) any
person or group consisting of Named Principals or Related Parties, (ii) any “person”
or “group” which is controlled by one or more Named Principals or Related
Parties, (iii) the Depository Trust Company or its nominees, (iv) any “dealer”
(as defined in the Securities Act of 1933) who acquires securities of the
Permitted Public REIT with a view to, or in connection with (A) the
distribution of such securities, (B) the resale of such securities in
accordance with the provisions of Rule 144A(d) promulgated under the Securities
Act of 1933, or (C) the resale of such securities in accordance with the
provisions of Rule 904 (promulgated under the Securities Act) applicable to “Distributors”
as defined in Rule 902 (promulgated under the Securities Act), (v) any employee
benefit plan of such person or its subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934, except that a person or group
shall be deemed to have “beneficial ownership “ of all securities that such
person or group has the right to acquire (such right, an “option right”),
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of forty percent (40%) or more of the equity
securities of the Permitted Public REIT entitled to vote for members of the
board of directors or equivalent governing body of the Permitted Public REIT on
a fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right).

 

“Closing Date”
shall mean the date of this Agreement, which date shall be the initial funding
date of the Loans pursuant to Section 2.02.

 

“Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time.

 

“Commitment” shall
mean, as to each Lender, the obligation of such Lender to make a Loan in a
principal amount up to but not exceeding the amount set opposite the name of
such Lender on Schedule 1.01(4) attached hereto under the caption “Commitment”
or, in the case of a Person that becomes a Lender pursuant to an assignment
permitted under Section 14.07(b), as specified in the respective
Assignment and Assumption pursuant to which such assignment is effected, as
such percentage may be modified by any Assignment and Assumption. As more fully
indicated in Schedule 1.01(4), or as specified in the respective
Assignment and Assumption, the Commitment of each Lender shall be allocated in part
to a commitment to make Loans to the Borrower and in part to a commitment to
make Loans to the Westwood Place Borrower.

 

9

 

“Condemnation Awards”
shall mean all compensation, awards, damages, rights of action and proceeds
awarded to the Borrower and the Westwood Place Borrower by reason of a Taking.

 

“Consumer Price Index”
shall mean the “Consumer Price Index — For all Items” for the Los
Angeles-Riverside-Orange County Consolidated Metropolitan Statistical Area,
published monthly in the “Monthly Labor Review” of the Bureau of Labor
Statistics of the United States Department of Labor. If at any time the
Consumer Price Index is no longer available, then the term “Consumer Price
Index” shall be an index selected by the Administrative Agent which, in the
opinion of the Administrative Agent, is comparable to the Consumer Price Index.

 

“Continue”, “Continuation”
and “Continued” shall refer to the continuation pursuant to Section 2.05
of (a) a Eurodollar Loan from one Interest Period to the next Interest
Period or (b) Base Rate Loan at the Base Rate.

 

“Controlled Account”
shall mean one or more deposit accounts established by the Administrative Agent
(for the benefit of the Lenders) at a depository bank or financial institution
that is acceptable to the Administrative Agent, and which is established and
maintained in accordance with Section 14.28 hereof.

 

“Controlled Account
Agreement” shall have the meaning assigned to such term in Section
14.28(a)(i).

 

“Controlled Account
Collateral” shall have the meaning assigned to such term in Section
14.28(c)(i).

 

“Convert”, “Conversion”
and “Converted” shall refer to a conversion pursuant to Section 2.05
of one Type of Loan into another Type of Loan, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one Applicable
Lending Office to another.

 

“Debt Service Coverage
Ratio” shall mean, with respect to any period being measured, the ratio of
(a) Adjusted Net Operating Income for such period to (b) DSCR Debt Service for
such period. For purposes of calculating Debt Service Coverage Ratio pursuant
to Section 2.09(a), Adjusted Net Operating Income and DSCR Debt Service
shall be calculated on an annualized basis, and the Debt Service Coverage Ratio
for such purposes shall be as determined by the Administrative Agent, based
upon the quarterly results reflected in the most recent reports submitted by
Borrower and the Westwood Place Borrower pursuant to Section 8.01
and Article VIIIA (or, if the most recent report has not been submitted
pursuant to such section, based on such other information as the Administrative
Agent shall determine in its reasonable discretion), which determination shall
be conclusive in the absence of manifest error. For purposes of calculating
Debt Service Coverage Ratio pursuant to Section 10.03(c), Adjusted Net
Operating Income and DSCR Debt Service shall be projected for a period of one
year in accordance with Section 10.03(c)(iv).

 

“Deed of Trust”
shall mean each Deed of Trust, Assignment of Leases and Rents and Security
Agreement and substantially in the form of Exhibit D attached
hereto, to be

 

10

 

executed, dated and delivered by the Borrower or the Westwood Place
Borrower to the Administrative Agent (on behalf of the Lenders) on the Closing
Date, securing the obligations identified therein, as each such deed of trust
may be Modified and in effect from time to time.

 

“Default” shall
mean an Event of Default or a Westwood Place Event of Default or an event that
with notice or lapse of time or both would become an Event of Default or a
Westwood Place Event of Default.

 

“Depository Bank”
shall mean, at any time, the depository bank which is party to the Cash Trap
Account Security Agreement, the Project-Level Account Security Agreement or a
Controlled Account Agreement.

 

“DERA” shall mean
Douglas Emmett Realty Advisors, a California corporation.

 

“Disbursement Request”
shall have the meaning assigned to such term in Section 11.01(c)(iii).

 

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

 

“Douglas Emmett Realty
Funds” shall mean Douglas Emmett Joint Venture, Douglas Emmett Realty Fund
1995, Douglas Emmett Realty Fund 1996, Douglas Emmett Realty Fund 1997, Douglas
Emmett Realty Fund 1998, Douglas Emmett Realty Fund 2000, Douglas Emmett Realty
Fund 2002 and Douglas Emmett Realty Fund 2005 and their respective
Subsidiaries.

 

“DSCR Debt Service”
shall mean, for any period, an amount equal to the payment of interest which
would be required under the Notes delivered by the Borrower and the Westwood
Place Borrower based on the Outstanding Principal Amounts of such Notes as of
the end of such period and the All-in-Rate at such time. All such calculations
shall be subject to the approval of the Administrative Agent. For purposes of Section
10.03, the calculation of DSCR Debt Service shall be projected for a one
year period in accordance with Section 10.03(c)(iv).

 

“Eligible Assignee”
means any of (i) a commercial bank organized under the Laws of the United
States, or any state thereof, and having (x) total assets in excess of
$25,000,000,000 and (y) a combined capital and surplus of at least
$1,000,000,000; (ii) a commercial bank organized under the laws of any
other country which is a member of the Organization of Economic Cooperation and
Development (“OECD”), or a political subdivision of any such country,
and having (x) total assets in excess of $25,000,000,000 and (y) a
combined capital and surplus of at least $1,000,000,000, provided that
such bank is acting through a branch or agency located in the United States or
in the country in which it is organized or another country which is also a
member of OECD; (iii) a life insurance company organized under the Laws of
any state of the United States, or organized under the Laws of any country
which is a member of OECD and licensed as a life insurer by any state within
the United States and having (x) admitted assets of at least
$25,000,000,000 and (y) a combined capital and surplus of at least
$1,000,000,000; (iv) any Person described in Schedule 1.01(5);
or (v) an Approved Fund having (1) total assets of at least
$25,000,000,000 and (2) a net worth of at least $1,000,000,000; provided
that any such Person meeting the requirements of (i) through (v) (or its
holding company) shall also have a long-term senior unsecured indebtedness
rating of BBB- or better by

 

11

 

S&P (if rated by S&P) and Baa3 or better by Moody’s (if rated
by Moody’s) at the time an interest in the Loans is assigned to it.

 

“Environmental Claim”
shall mean, with respect to any Person, any written request for information by
a Governmental Authority, or any written notice, notification, claim,
administrative, regulatory or judicial action, suit, judgment, demand or other
written communication by any Person or Governmental Authority alleging or
asserting liability with respect to the Borrower or the Projects, whether for
damages, contribution, indemnification, cost recovery, compensation, injunctive
relief, investigatory, response, Remediation, damages to natural resources,
personal injuries, fines or penalties arising out of, based on or resulting
from (i) the presence, Use or Release into the environment of any Hazardous
Substance originating at or from, or otherwise affecting, the Projects, (ii)
any fact, circumstance, condition or occurrence forming the basis of any
violation, or alleged violation, of any Environmental Law by the Borrower or
otherwise affecting the health, safety or environmental condition of the
Projects or (iii) any alleged injury or threat of injury to the environment by
the Borrower or otherwise affecting the Projects.

 

“Environmental
Indemnity” means those certain Environmental Indemnity Agreements by the
Borrower or the Westwood Place Borrower in favor of the Administrative Agent
and each of the Lenders substantially in the form of Exhibit E-1 or Exhibit
E-2 attached hereto, to be executed, dated and delivered to the
Administrative Agent (on behalf of the Lenders) on the Closing Date, as the
same may be Modified and in effect from time to time.

 

“Environmental Laws”
shall mean any and all Applicable Laws relating to the regulation or protection
of the environment or the Release or threatened Release of Hazardous Substances
into the indoor or outdoor environment, including ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata, or otherwise relating
to the Use of Hazardous Substances; provided, however, that
solely for purposes of the Environmental Indemnity, “Environmental Laws” shall
not include the California Environmental Quality Act or statutes, laws,
regulations or orders which relate to zoning or otherwise regulating the
permissible uses of land or permissible structures to be developed thereon.

 

“Environmental Liens”
shall have the meaning assigned thereto in Section 8.11(a).

 

“Environmental Losses”
shall mean any losses, damages, costs, fees, expenses, claims, suits,
judgments, awards, liabilities (including, but not limited to, strict
liabilities), obligations, debts, diminutions in value, fines, penalties,
charges, costs of Remediation (whether or not performed voluntarily), amounts
paid in settlement, foreseeable and unforeseeable consequential damages, litigation
costs, reasonable attorneys’ fees and expenses, engineers’ fees, environmental
consultants’ fees, and investigation costs (including, but not limited to,
costs for sampling, testing and analysis of soil, water, air, building
materials, and other materials and substances whether solid, liquid or gas), of
whatever kind or nature, and whether or not incurred in connection with any
judicial or administrative proceedings, actions, claims, suits, judgments or
awards relating to Hazardous Substances, Environmental Claims, Environmental
Liens and violation of Environmental Laws. Notwithstanding the foregoing, “Environmental
Losses” shall not include any loss resulting from diminution in value of any
Project or the Westwood Place

 

12

 

Project suffered by any Lender if (x) in the case of Environmental
Losses pertaining to the Projects, the Lenders shall have been paid in full all
amounts payable by the Borrower under this Agreement and the other Loan
Documents to which the Borrower is a party or shall have otherwise realized all
such amounts upon or prior to foreclosure of the collateral for the Loans and
(y) in the case of Environmental Losses pertaining to the Westwood Place
Project, the Lenders shall have been paid in full all amounts payable by the
Westwood Place Borrower under this Agreement and the other Loan Documents to
which the Westwood Place Borrower is a party or shall have otherwise realized
all such amounts upon or prior to foreclosure of the collateral for the Loans
to the Westwood Place Borrower; provided, that, subject to the
provisions of Section 8 of the Environmental Indemnity, nothing contained in
this sentence shall limit any claim for a loss (otherwise included within the
term “Environmental Losses” as defined herein) suffered by the Administrative
Agent, any Lender or any Affiliate as a result of a claim for the diminution in
value of the interest of any Person (other than the interest of the
Administrative Agent, any Lender or any Affiliate of the Administrative Agent
or any Lender) in any Project or the Westwood Place Project (including the
interest of any ground lessor, tenant, easement holder or other third party,
but excluding any Person who has purchased or acquired the Borrower’s interest
in such Project or the Westwood Place Borrower’s interest in the Westwood Place
Project, as applicable, by foreclosure or deed-in-lieu of foreclosure or any
time thereafter) or the diminution in value of any other property made against
the Administrative Agent, any such Lender or any Affiliate by any other Person
as a result of the Administrative Agent, any Lender or any Affiliate succeeding
to the ownership of any Project or the Westwood Place Project through
foreclosure or other exercise of remedies (but not as a result of any
contractual obligation incurred by the Administrative Agent, any Lender or any
Affiliate subsequent to or in connection with its acquisition of the ownership
of a Project or the Westwood Place Project).

 

“Environmental Reports”
shall mean, collectively, each environmental survey and assessment report
prepared for the Administrative Agent relating to each Project and the Westwood
Place Project listed on Schedule 1.01(6) attached hereto; each such
environmental report shall include a certification by the engineer
(i) that such engineer has obtained and examined the list of prior owners,
(ii) has made an on-site physical examination of the applicable Project
and (iii) has made a visual observation of the surrounding areas and has
found no evidence of the presence of toxic or Hazardous Substances, or of past
or present Hazardous Substances activities that have not been remediated or are
not subject to an operation and maintenance program. The Administrative Agent
acknowledges receipt of copies of the Environmental Reports.

 

“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity interest.

 

“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended from time to
time.

 

“ERISA Affiliate”
shall mean any trade or business (whether or not incorporated) that, together
with any Borrower Party, is treated as a single employer under Section 414(b)
or

 

13

 

(c) of the Code, or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, is treated as a single employer under Section 414 (b), (c),
(m) or (o) of the Code.

 

“ERISA Event”
means (a) any “reportable event”, as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan which is subject to Title
IV of ERISA (other than an event for which the thirty (30) day notice period is
waived); (b) the existence with respect to any Plan subject to Section 412 of
the Code or Section 302 of ERISA of an “accumulated funding deficiency” (as defined
in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c)
the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan subject to Section 412 of the Code or Section 302 of ERISA; (d) the
incurrence by a Borrower Party or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Plan which is
subject to Title IV of ERISA; (e) the receipt by any Borrower Party or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Plan or Plans which are subject to Title IV of
ERISA or to appoint a trustee to administer any such Plan; (f) the incurrence
by a Borrower Party or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan which is subject
to Title IV of ERISA or Multiemployer Plan; or (g) the receipt by a Borrower
Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer
Plan from a Borrower Party or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.

 

“Eurodollar Loans”
shall mean the portions of the Outstanding Principal Amount that bear interest
based on a “LIBO Rate”.

 

“Eurohypo” shall
mean Eurohypo AG, New York Branch.

 

“Event of Default”
shall have the meaning assigned to such term in Article XII.

 

“Excess Cash”
shall mean with respect to any calendar month, the amount by which the sum of
Operating Income actually received during such calendar month plus amounts
actually paid during such month to or for the account of the Borrower or Other
Swap Pledgor by the counterparty under and pursuant to the Hedge Agreement (but
only on account of any “regular” payments due thereunder (and not on account of
any default or termination thereunder or any obligation to deliver collateral
pursuant thereto)) exceeds the sum of (i) Operating Expenses actually paid
during such month plus (ii) the sum of interest payments on the Loans and other
amounts due and payable under the Loan Documents plus amounts actually paid
during such month by the Borrower or Other Swap Pledgor to the counterparty
under and pursuant to the Hedge Agreement (but only on account of any “regular”
payments due thereunder (and not on account of any default or termination thereunder
or any obligation to deliver collateral pursuant thereto)) in each case, to the
extent actually paid during such month; provided, however, that
for purposes of determining Excess Cash, Operating Expenses shall exclude any
amounts due or accrued for Insurance Premiums, Real Estate Taxes, Approved Capital
Expenditures or Approved Leasing Expenditures, except for amounts actually paid
in cash during the relevant month for Insurance Premiums, Real Estate Taxes
and, if approved in accordance with the provisions of Article XI,
Approved Capital Expenditures or Approved

 

14

 

Leasing Expenditures (and the Borrower and the Westwood Place Borrower,
respectively, may utilize its Operating Income in such month to pay for
Insurance Premiums, Real Estate Taxes and, if approved in accordance with the
provisions of Article XI, Approved Capital Expenditures or Approved
Leasing Expenditures). For the avoidance of doubt, it is understood that the
calculation of Excess Cash for any month shall be based upon the cash method of
accounting notwithstanding references to GAAP or the imputation of any income
or expense item that is not actually received or paid in such month in the
definitions of “Operating Income” and “Operating Expenses.”  Notwithstanding the provisions set forth in
the definition of “Operating Expenses” relating to the treatment of reserves
specifically required under this Agreement and amounts paid from such reserves
for purposes of that definition, for purposes of the calculation of Excess
Cash, the deposit of sums into any such specifically-required reserve (but not
the expenditure and release of sums from any such reserve) shall be treated as
an expense.

 

“Excess Hedge
Agreement” shall have the meaning assigned to such term in Section
8.19(a).

 

“Excluded Project”
shall mean (a) any of the Residential Properties, (b) any of the Properties
owned by the Borrower or the Westwood Place Borrower on the Closing Date other
than the Projects which are identified on Schedule 1A, or the Westwood
Place Project (c) any Qualified Real Estate Interest that is acquired after the
Closing Date by the Borrower or by a wholly-owned Subsidiary or Qualified
Sub-Tier Entity, and (d) any Project which has been released from the Liens of
the Loan Documents in accordance with Section 2.09.

 

“Excluded Taxes”
shall mean, with respect to the Administrative Agent and any Lender, or any
other recipient of any payment to be made by or on account of any obligation of
the Borrower or the Westwood Place Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its Applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower or the Westwood Place
Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower or the Westwood Place Borrower
under Section 5.07or Article VA), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office)
or is attributable to such Foreign Lender’s failure to comply with Section 5.06(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation, to receive additional amounts from the
Borrower or the Westwood Place Borrower with respect to such withholding tax
pursuant to Section 5.06(a) or Article VA.

 

“Extraordinary Capital
or Leasing Expenditures” shall have the meaning assigned to such term in Section
11.01(b).

 

“Federal Funds Rate”
shall mean, for any day, the weighted average (rounded upwards, if necessary,
to the next 1/1000 of 1%) of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or if such day is not a Business Day, for the immediately
preceding

 

15

 

Business Day) on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next
1/1000 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.

 

“Fee Letter” means
that certain letter agreement, dated as of the date of this Agreement, between
the Borrower, the Westwood Place Borrower and the Administrative Agent with
respect to certain fees payable by the Borrower and the Westwood Place Borrower
in connection with the Commitments, as the same may be Modified from time to
time.

 

“Foreign Lender”
shall mean any Lender that is organized under the laws of a jurisdiction other
than that in which the Borrower or the Westwood Place Borrower is located. For
purposes of this definition, the United States of America, each state thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.

 

“GAAP” shall mean
generally accepted accounting principles applied on a basis consistent with
those that, in accordance with Section 1.02(a) and, except as
otherwise provided in this Agreement, are to be used in making the calculations
for purposes of determining compliance with this Agreement, it being understood
that the annual and quarterly financial statements to be delivered by the
Borrower or the Westwood Place Borrower shall be deemed prepared in accordance
with “GAAP” for purposes of this Agreement notwithstanding that such financial
statements contain adjustments for the market value of the Properties of the
Borrower or the Westwood Place Borrower (as reflected in the auditor’s
statement that is contained in the most recent such annual financial statement
provided to the Administrative Agent on or before the Closing Date) and that
the treatment of depreciation charges in such quarterly financial statements is
consistent with the treatment of depreciation charges in the most recent such
quarterly financial statements provided to the Administrative Agent on or
before the Closing Date.

 

“General Assignment”
shall mean that certain Assignment of Contracts and Government Approvals
substantially in the form of Exhibit F attached hereto, to be executed,
dated and delivered by the Borrower or the Westwood Place Borrower to the
Administrative Agent (on behalf of the Lenders) on the Closing Date, as the
same may be Modified and in effect from time to time.

 

“Government Approval”
shall mean any action, authorization, consent, approval, license, ruling,
permit, tariff, rate, certification, exemption, filing or registration by or
with any Governmental Authority, including all licenses, permits, allocations,
authorizations, approvals and certificates obtained by or in the name of, or
assigned to, the Borrower or the Westwood Place Borrower and used in connection
with the ownership, construction, operation, use or occupancy of the Projects
and the Westwood Place Project, including building permits, certificates of occupancy,
zoning and planning approvals, business licenses, licenses to conduct business,
and all such other permits, licenses and rights.

 

“Governmental
Authority” shall mean any governmental department, commission, board,
bureau, agency, regulatory authority, instrumentality, judicial or

 

16

 

administrative body, federal, state or local, foreign or domestic,
having jurisdiction over the matter or matters in question.

 

“Guarantee” shall
mean a guarantee, an endorsement, a contingent agreement to purchase or to
furnish funds for the payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness, other
obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor’s
obligations or an agreement to assure a creditor against loss, and including
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
terms “Guarantee” and “Guaranteed” used as a verb shall have a
correlative meaning.

 

“Guaranteed Line of Credit” shall have the meaning set forth in Section
9.04(h).

 

“Guarantor” shall
mean, the Borrower’s Manager, in its capacity as the guarantor under the
Borrower’s Manager’s Limited Indemnity and Guarantee.

 

“Guarantor Documents”
shall mean, the Borrower’s Manager’s Limited Indemnity and Guarantee.

 

“Hazardous Substance”
shall mean, collectively, (a) any petroleum or petroleum products, flammable
materials, explosives, radioactive materials, asbestos, urea formaldehyde foam
insulation, Mold, and transformers or other equipment that contain
polychlorinated biphenyls (“PCB’s”), (b) any chemicals or other
materials or substances that are now or hereafter become defined as or included
in the definition of “hazardous substances”, “hazardous wastes”, “hazardous
materials”, “extremely hazardous wastes”, “restricted hazardous wastes”, “toxic
substances”, “toxic pollutants”, “contaminants”, “pollutants” or words of
similar import under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which is now or hereafter prohibited,
limited or regulated under any Environmental Law.

 

“Hedge Agreement”
shall mean any Swap Agreement or Swap Agreements between the Borrower or Other
Swap Pledgor and one or more financial institutions providing for the transfer
or mitigation of interest risks with respect to the Loans to the Borrower or
the Loans to the Westwood Place Borrower, either generally or under specific
contingencies, as the same may be Modified and in effect from time to time in
accordance with Section 8.19.

 

“Hedge Agreement
Pledge” shall mean that certain Assignment, Pledge and Security Agreement
substantially in the form of Exhibit G-1 or G-2, as
applicable, attached hereto, to be executed, dated and delivered by the
Borrower or Other Swap Pledgor to the Administrative Agent (on behalf of the
Lenders) in accordance with Section 8.19 and at any other time the
Borrower elects or is required to enter into, or cause to be delivered, a Hedge
Agreement, covering the Borrower’s or Other Swap Pledgor’s right, title and
interest in and to any such Hedge Agreement, as the same may be Modified and in
effect from time to time.

 

17

 

“Hedging Termination Date” shall mean the date
which is three (3) months prior to August 1, 2010.

 

“Immaterial Subsidiary” shall mean any
Subsidiary of the Borrower which has incurred no Indebtedness other than (i)
Indebtedness which is non-recourse to such Subsidiary, the Bankruptcy Parties
and the Named Principals (except for “carve-outs” (or Guarantees guarantying
the debtor’s liability with respect to “carve-outs”) for fraud,
misrepresentation, misappropriation and other exceptions-from-non-recourse
customary in the real estate finance industry and not materially more favorable
to such lender than the exceptions-from-non-recourse set forth in the second
sentence of Sections 14.23(a), as applicable, (and which shall in
no event include any recourse obligation of the Borrower on account of the
occurrence with respect to such Subsidiary or any other Person of any event of
the type described in Sections 12.01(d), (e) or (f)
hereof)) and (ii) Indebtedness which, in the aggregate for all such Immaterial
Subsidiaries, does not exceed ten percent (10%) of the aggregate Indebtedness
of the Borrower, the Westwood Place Borrower and their respective Subsidiaries.

 

“Improvements”
shall have the meaning assigned to such term in the Recitals.

 

“Indebtedness” of
any Person means, without duplication, (a) all obligations of such Person
for borrowed money or with respect to deposits or advances of any kind,
(b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others or performance of obligations, (h) all Capital
Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (j) all obligations under or in respect of Swap
Agreements and (k) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Parties”
shall mean the Administrative Agent, the Arranger, the Affiliates of the
Administrative Agent, the Arranger, and each Lender and each of the foregoing
parties’ respective directors, officers, employees, attorneys, agents,
successors and assigns.

 

“Indemnified Taxes”
shall mean Taxes other than Excluded Taxes.

 

“Information” has
the meaning assigned to such term in Section 14.24.

 

18

 

“Insurance Premiums”
shall have the meaning assigned to such term in Section 8.05(b) and as
incorporated by reference in Article VIIIA.

 

“Insurance Proceeds”
shall mean all insurance proceeds, damages, claims and rights of action and the
right thereto under any insurance policies relating to the Projects.

 

“Insurance Threshold
Amount” shall have the meaning assigned to such term in Section 10.01(b).

 

“Interest Period”
shall mean, at all times following the
Stub Interest Period, with respect to any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or Converted from a Base
Rate Loan or (in the event of a Continuation) the last day of the immediately
preceding Interest Period for such Loan and ending on the numerically
corresponding day in the first, second, third, sixth or (but only if available
from all Lenders) twelfth calendar
month thereafter, as the Borrower or the Westwood Place Borrower may select as
provided in Section 4.05 and Article IVA; provided that, (i) except for the Stub Interest Period, each Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month; (ii) each Interest Period that
would otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the immediately preceding Business Day);
(iii) except for the Stub Interest
Period, no Interest Period shall have a duration of less than one month
and, if the Interest Period for any Eurodollar Loan would otherwise be a
shorter period (other than for the Stub
Interest Period), such Loan shall bear interest at the Base Rate plus
the Applicable Margin for Base Rate Loans; (iv) in no event shall any Interest
Period extend beyond the Maturity Date; and (v) collectively with respect to
the Loans made to the Borrower and the Loans made to the Westwood Place
Borrower there may be no more than seven (7) separate Interest Periods in
respect of Eurodollar Loans outstanding from each Lender at any one time. The first Interest Period shall be the Stub
Interest Period.

 

“Interest Rate Hedge
Period” shall have the meaning assigned to such term in Section 8.19(a).

 

“Investment” shall
mean, for any Person:  (a) the
acquisition (whether for cash, Property, services or securities or otherwise)
of capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of any other Person or any agreement to make any
such acquisition (including any “short sale” or any sale of any securities at a
time when such securities are not owned by the Person entering into such sale);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person), but excluding any such advance, loan or
extension of credit having a term not exceeding ninety (90) days arising in
connection with the sale of inventory or supplies by such Person in the
ordinary course of business; (c) the entering into of any Guarantee of, or
other contingent obligation with respect to, Indebtedness or other liability of
any other Person and (without duplication) any amount committed to be advanced,

 

19

 

lent or extended to such Person; or (d) the entering into of any
Swap Agreement (other than the Hedge Agreement or any Excess Hedge Agreement).

 

“Lease Approval
Package” shall have the meaning assigned to such term in Section
9.09(b)(iii).

 

“Lease Information
Summary” shall have the meaning assigned to such term in Section
9.09(b)(iii).

 

“Leases” shall
mean all leases and other agreements or arrangements with or assumed by the
Borrower or the Westwood Place Borrower as landlord for the use or occupancy of
all or any portion of the Projects or the Westwood Place Project, including any
signage thereat, now in effect or hereafter entered into (including lettings,
subleases, licenses, concessions, tenancies and other occupancy agreements with
or assumed by the Borrower or the Westwood Place Borrower as landlord covering
or encumbering all or any portion of the Projects or the Westwood Place
Project), together with any Guarantees, Modifications of the same, and all
additional remainders, reversions and other rights and estates appurtenant
thereto.

 

“Leasing Affidavit”
shall have the meaning assigned to such term in Section 6.01(p).

 

“Lender” shall
have the meaning assigned to such term in the preamble.

 

“LIBO Rate” shall
mean, for any Interest Period for any Eurodollar Loan, the rate per annum
appearing on Page 3750 of the Dow Jones Markets Service (Telerate) (or on
any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank market) at
approximately 11:00 a.m. London time on the date two (2) Business Days
prior to the first day of such Interest Period as the rate for Dollar deposits
having a term comparable to such Interest Period and in an amount comparable to
the amount of the applicable Eurodollar Loan, provided that if such rate
does not appear on such page as of the date of determination, or if such page
shall cease to be publicly available at such time, or if the information
contained on such page, in the sole judgment of the Administrative Agent shall
cease accurately to reflect the rate offered by leading banks in the London
interbank market, the LIBO Rate shall be based on the rate that appears as of
11:00 a.m. London time on such date of determination on the LIBO Page of
Reuters Screen for Dollar deposits having a term comparable to such Interest
Period and in an amount comparable to the amount of the applicable Eurodollar
Loan. If both of such pages shall cease to be publicly available as of the time
of determination, or if the information contained on such page, in the sole but
reasonable judgment of the Administrative Agent shall cease accurately to
reflect the rate offered by leading banks in the London interbank market, the
LIBO Rate shall be based on the rate reported by any publicly available source
of similar market data selected by the Administrative Agent that, in its sole
but reasonable judgment, accurately reflects such rate offered by leading banks
in the London interbank market. The LIBO
Rate for the Stub Interest Period shall be 4.4120% per annum.

 

20

 

“Lien” shall mean,
with respect to any Property (including the Projects and the Westwood Place
Project), any mortgage, deed of trust, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such Property. For purposes of this
Agreement and the other Loan Documents, a Person shall be deemed to own subject
to a Lien any Property that it has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement (other than an operating lease) relating to such
Property.

 

“Limiting Regulation” shall mean
any law or regulation of any Governmental Authority, or any interpretation,
directive or request under any such law or regulation (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) by any court or Governmental Authority or monetary authority charged
with the interpretation or administration thereof, or any internal bank policy
resulting therefrom (applicable to loans made in the United States of America)
which would or could in any way require a Lender to have the approval right
contained in the last paragraph of Section 9.03 (or the provisions
thereof incorporated into Article IXA).

 

“Loan” and “Loans”
shall have the respective meanings assigned to such terms in Section 2.01
and as incorporated by reference in Article IIA with reference to the
extensions of credit provided to the Borrower and the Westwood Place Borrower
hereunder.

 

“Loan Documents”
shall mean, collectively, this Agreement, the Notes, the Security Documents,
the Environmental Indemnity, the Guarantor Documents and each other agreement,
instrument or document (excluding any Hedge Agreement or Excess Hedge Agreement)
required to be executed and delivered in connection with the Loans, together
with any Modifications thereof.

 

“Loan Transactions”
shall have the meaning assigned to such term in Section 4.04.

 

“Losses” shall
have the meaning assigned to such term in Section 14.04.

 

“Low DSCR Release
Event” shall mean, at any time after the occurrence of a Low DSCR Trigger
Event, that the Debt Service Coverage Ratio shall be at or above 1:20:1.00 for
a period of at least two (2) consecutive calendar quarters.

 

“Low DSCR Trigger
Event” shall mean, at any time prior to the Maturity Date,
that the Debt Service Coverage Ratio measured as of the end of any calendar
quarter is less than 1:15:1.00.

 

“Low DSCR Trigger
Period” shall mean the period of time after a Low DSCR Trigger Event until
the occurrence of a Low DSCR Release Event.

 

“LP Claim” shall have
the meaning set forth in Section 7.35.

 

“Major Default”
shall mean (i) any Event of Default; (ii) any Westwood Place Event of Default;
(iii) any Default or Westwood Place Default arising from the failure to make
any payment on account of interest to any Lender required under the Loan
Documents or any

 

21

 

fees payable to the Administrative Agent under the Fee Letter, in each
case on or before the due date therefor; and (iv) any other Default or Westwood
Place Default written notice of which has been delivered by the Administrative
Agent to the Borrower or the Westwood Place Borrower unless, in the case of
this clause (iv), the Borrower or the Westwood Place Borrower has provided written notice to the Administrative
Agent, within seven (7) days after notice of such Default or Westwood
Place Default has been delivered to the Borrower or the Westwood Place
Borrower, respectively, stating that the Borrower or the Westwood Place
Borrower, as applicable, shall
undertake to cure such Default or Westwood Place Default on or prior to the
expiration of the applicable cure period therefor, if any, set forth in the
definition of the term “Event of Default” and “Westwood Place Event of Default,”
respectively (and setting forth the steps that the Borrower or the Westwood
Place Borrower intends to take in order to effectuate such cure), and the
Administrative Agent shall not have provided notice to the Borrower or the
Westwood Place Borrower within five (5) Business Days after receipt of such
notice from the Borrower or the Westwood Place Borrower, setting forth the
Administrative Agent’s determination, in its reasonable discretion, that the
steps set forth in the notice from the Borrower or the Westwood Place Borrower
are not likely to result in the timely cure of such default. Notwithstanding
the foregoing, for purposes of Sections 13.08 and 14.07(b)(i)(A),
a Major Default of the type described in clause (iii) above shall not be deemed
to “exist” unless the Borrower has received notice of such Major Default and
has failed to cure such Major Default within five (5) Business Days.

 

“Major Lease”
shall mean one or more Leases to the same tenant or its Affiliates covering an
aggregate of either (i) 20% of the rentable square footage of any Project or
the Westwood Place Project or (ii) 30,000 rentable square feet or more.

 

“Material Adverse
Effect” shall mean a material adverse effect, as determined by the
Administrative Agent, in its reasonable judgment and discretion, on
(a) any Project or the Westwood Place Project or the business, operations,
financial condition, liabilities or capitalization of the Borrower or the
Westwood Place Borrower, (b) the ability of the Borrower, the Westwood
Place Borrower or any other Borrower Party to pay or perform (or cause to be
performed) its respective material obligations under any of the Loan Documents
to which it is a party, including the timely payment of the principal of
or interest on the Loans or other amounts payable in connection therewith,
(c) the Administrative Agent’s Liens in any of the collateral securing the
Loans or the priority of any such Liens, (d) the validity or
enforceability of any of the Loan Documents or (e) the rights and remedies
of the Lenders and the Administrative Agent under any of the Loan Documents.

 

“Maturity Date”
shall mean the earliest of (a) the Stated Maturity Date or (b) the date as to
any Loans on which the Outstanding Principal Amounts under the Notes evidencing
such Loans are accelerated or automatically become due and payable pursuant to
the terms of the Notes or any other Loan Document.

 

“Maximum Rate”
shall have the meaning assigned to such term in Section 14.25.

 

“Modifications”
shall mean any amendments, supplements, modifications, renewals, replacements,
consolidations, severances, substitutions and extensions thereof from time to
time; “Modify”, “Modified”, or related words shall have meanings correlative
thereto.

 

22

 

“Mold” shall mean
any microbial or fungus contamination or infestation in any Project of a type
which could reasonably be anticipated (after due inquiry and investigation) to
pose a risk to human health or the environment or could reasonably be
anticipated (after due inquiry and investigation) to negatively impact the
value of such Project in any material respect.

 

“Moody’s” shall mean
Moody’s Investors Service, Inc., or any successor thereto.

 

“Multiemployer Plan”
shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Named Principals”
shall mean Dan A. Emmett, Christopher H. Anderson, Kenneth M.
Panzer and Jordan L. Kaplan.

 

“Net Operating Income”
shall mean, for any period, the excess, if any, of Operating Income for such
period over Operating Expenses for such period.

 

“Net Proceeds”
shall have the meaning assigned to such term in Section 10.03(b).

 

“Net Proceeds
Deficiency” shall have the meaning assigned to such term in Section
10.03(h).

 

“Note A”
shall mean, collectively, (a) those certain notes or note denominated “Note A”
dated concurrently with the Loan Agreement, executed by Borrower to the order
of the Lender named therein, in the aggregate original principal amount of $217,775,232.52,
as the same may be Modified from time to time and (b) those certain notes or
note denominated “Note A” dated concurrently with the Loan Agreement,
executed by the Westwood Place Borrower to the order of the Lender named
therein, in the aggregate original principal amount of $24,390,009.65, as the
same may be Modified from time to time. Each Note A shall constitute a “Note”
for all purposes under this Agreement and the other Loan Documents.

 

“Note A
Applicable Margin” shall mean (a) for Base Rate Loans, 80 basis points
per annum; and (b) for Eurodollar Loans, 65 basis points per annum.

 

“Note B”
shall mean, collectively, (a) those certain notes or note denominated “Note B”
dated concurrently with the Loan Agreement, executed by Borrower to the order
of the Lender named therein, in the aggregate original principal amount of $142,642,777.30,
as the same may be Modified from time to time and (b) those certain notes or
note denominated “Note B” dated concurrently with the Loan Agreement,
executed by the Westwood Place Borrower to the order of the Lender named
therein, in the aggregate original principal amount of $15,975,456.31, as the
same may be Modified from time to time. Each Note B shall constitute a “Note”
for all purposes under this Agreement and the other Loan Documents.

 

“Note B
Applicable Margin” shall mean (a) for Base Rate Loans, 110 basis
points per annum; and (b) for Eurodollar Loans, 85 basis points per annum.

 

“Note C”
shall mean, collectively, (a) those certain notes or note denominated “Note C”
dated concurrently with the Loan Agreement, executed by Borrower to the order
of the Lender named therein, in the aggregate original principal amount of $21,777,523.26,
as the same

 

23

 

may be Modified from time to time and (b) those certain notes or note
denominated “Note C” dated concurrently with the Loan Agreement, executed
by the Westwood Place Borrower to the order of the Lender named therein, in the
aggregate original principal amount of $2,439,000.96, as the same may be
Modified from time to time. Each Note C shall constitute a “Note” for all
purposes under this Agreement and the other Loan Documents.

 

“Note C
Applicable Margin” shall mean (a) for Base Rate Loans, 410 basis
points per annum; and (b) for Eurodollar Loans, 285 basis points per
annum.

 

“Notes” shall
mean, collectively, each Note A, Note B, Note C and each other
promissory note hereafter executed by the Borrower or the Westwood Place
Borrower, respectively, to the order of any of the Lenders evidencing such
Lender’s respective Commitment and Loans to the Borrower or such Lender’s
respective Westwood Place Commitment and Loans to the Westwood Place Borrower,
as such notes may be Modified or substituted and in effect from time to time. Subject
to such modifications thereto as may be deemed necessary by the Administrative
Agent to reflect the Applicable Margin applicable to such Notes or to
denominate any such Note as a Note A, Note B, Note C or similar
reference, and subject to the provisions of Section 14.30, each of
the Notes shall be substantially in the form of Exhibit H attached
hereto.

 

“Obligations”
means all obligations, liabilities and indebtedness of every nature of the
Borrower or the Westwood Place Borrower, respectively, from time to time owing
to the Administrative Agent or any Lender under or in connection with this
Agreement, the Notes or any other Loan Document to which it is a party,
including principal, interest, fees (including fees of counsel), and expenses
whether now or hereafter existing under the Loan Documents to which it is a
party.

 

“OECD” has the
meaning assigned to such term in the definition of “Eligible Assignee”.

 

“OP Merger Sub”
shall have the meaning set forth in Section 14.31.

 

“Operating Expenses”
shall mean, for any period, all expenditures, computed in accordance with GAAP,
of whatever kind or nature relating to the ownership, operation, maintenance,
repair or leasing of the Projects and the Westwood Place Project that are
incurred on a regular monthly or other periodic basis, including
(a) allocated amounts on account of Insurance Premiums and Real Estate
Taxes, prorated on an annual basis, (b) management fees in an amount which
is the greater of (i) management fees actually paid and
(ii) management fees at an imputed rate of 2.0% of Operating Income for
such period and (c) imputed capital expenditure in an amount equal to a
prorated portion of an annual amount equal to $0.20 per square foot; provided,
however, that Operating Expenses shall not include
(i) depreciation, amortization and other non-cash charges or capital
expenditures (except as provided above), (ii) leasing commissions, tenant
improvement allowances or other expenditures incurred for tenant improvements,
(iii) any deposits to cash reserves (if any) required to be maintained under
the Loan Documents (except if and to the extent any sums are withdrawn
therefrom to pay (and are actually used to pay) expenses which otherwise
constitute Operating Expenses without duplication), (iv) any payment or expense
for which the Borrower was or is to be reimbursed by

 

24

 

any third party if the receipt of the related reimbursement payment is
required to be excluded in the calculation of Operating Income, (v) any payment
payable by the Borrower or any Other Swap Pledgor under the Hedge Agreement,
(vi) any changes in value of derivative contracts or of the Projects or the
Westwood Place Project, and (vii) any principal, interest or other debt
service payable with respect to the Loans. Operating Expenses shall be
determined on an annualized basis based on the relevant quarterly results for
purposes of Section 2.09(a), and on a projected annual basis for
purposes of Section 10.03(c)(iv).

 

“Operating Income”
shall mean, for any period, all regular ongoing income, computed in accordance
with GAAP (but without taking into account any treatment of Rent on a
straight-line amortization basis over the term of a lease that would otherwise
be required by GAAP), during such period from the ownership or operation, or
otherwise arising in respect, of the Projects and the Westwood Place Project,
including (a) all amounts payable to the Borrower or the Westwood Place
Borrower by any Person as Rents under Approved Leases, (b) business
interruption proceeds and rent loss insurance proceeds (except with respect to
any Leases that have been terminated as of the date of computation as a result
of any Casualty Event or Taking) and (c) all other amounts which are
included in the Borrower’s or the Westwood Place Borrower’s financial
statements as operating income of the Projects and the Westwood Place Project,
including, receipts from leases and parking agreements, concession fees and
charges, other miscellaneous operating revenues, but excluding any
extraordinary income, including (i) any Condemnation Awards or Insurance
Proceeds (other than business interruption and rent loss proceeds as
aforementioned), (ii) any item of income otherwise includable in Operating
Income but paid directly to a Person other than the Borrower, its
representative or its Affiliate, or the Westwood Place Borrower, its
representative or its Affiliate (except, in each case, to the extent the Borrower
or the Westwood Place Borrower receives monetary credit for such payment from
the recipient thereof or such item is treated as an income item to the Borrower
or the Westwood Place Borrower, in accordance with GAAP), (iii) security
deposits and earnest money deposits received from tenants until forfeited or
applied in accordance with their Leases, (iv) lease buyout payments made
by tenants in connection with any surrender, cancellation or termination of
their Leases, (v) any disbursements to the Borrower or the Westwood Place
Borrower from the Cash Trap Account (it being understood that nothing set forth
in this clause (v) shall prevent the receipt of funds that have been deposited
into the Cash Trap Account from being treated as Operating Income when received
to the extent such receipt otherwise constitutes Operating Income as provided
in the definition thereof), (vi) any changes in value of derivative contracts
or of the Projects or the Westwood Place Project, and (vii) any payment payable
to the Borrower or any Other Swap Pledgor under the Hedge Agreement. Operating
Income shall be determined on an annualized basis based on the relevant
quarterly results for purposes of Section 2.09(a), and on a projected
annual basis for purposes of Section 10.03(c).

 

“Operating Partnership”
shall mean, with respect to a Permitted REIT, its affiliated operating
partnership majority-owned and controlled, directly or indirectly, by such
Permitted REIT through which such REIT holds substantially all of its assets.

 

“Organizational
Documents” shall mean (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and any amendments thereto,
(b) for any limited liability company, the articles of organization and
any

 

25

 

certificate relating thereto and the limited liability company (or
operating) agreement of such limited liability company, and any amendments
thereto, and (c) for any partnership (general or limited), the certificate
of limited partnership or other certificate pertaining to such partnership and
the partnership agreement of such partnership (which must be a written
agreement), and any amendments thereto.

 

“Other Charges”
shall mean all ground rents, maintenance charges, impositions other than Real
Estate Taxes, and any other charges, including vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Projects and the
Westwood Place Project, now or hereafter levied or assessed or imposed against
the Projects, the Westwood Place Project or any part thereof, other than
Excluded Taxes.

 

“Other Swap Pledgor”
shall mean (i) Borrower’s Member, (ii) the Westwood Place Borrower, (iii) any
Qualified Successor Entity to whom the Projects are transferred pursuant to
Section 9.03(a)(iii), (iv) any entity that qualifies under
clause (I) of the definition of Qualified Successor Entity, (v) a
Permitted Public REIT, its Operating Partnership or any Permitted Public REIT
Subsidiary and/or (vi) a Permitted Private REIT or any Permitted Private
REIT Subsidiary.

 

“Other Taxes”
means any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under any Loan Document or from the execution, delivery, ownership or
enforcement of, or otherwise with respect to, any Loan Document.

 

“Outstanding Principal
Amount” shall mean the outstanding principal amount of the Loans at any
point in time after giving effect to any repayment thereof pursuant to Sections
2.06, 2.07, 2.09 and 3.01 or other applicable
provisions of this Agreement.

 

“Participant”
shall have the meaning assigned to such term in Section 14.07(c)(i).

 

“Payment Date”
shall mean the first Business Day of each calendar month. The first Payment
Date shall be October 1, 2005.

 

“Payor” shall have
the meaning assigned to such term in Section 4.06.

 

“PBGC” shall mean
the Pension Benefit Guaranty Corporation referred to and defined in ERISA and
any successor entity performing similar functions.

 

“Permitted Investments”
shall mean:  (a) direct obligations
of the United States of America, or of any agency thereof, or obligations
guaranteed as to principal and interest by the United States of America, or by
any agency thereof, in either case maturing not more than ninety (90) days from
the date of acquisition thereof; (b) certificates of deposit issued by any
bank or trust company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided profits of at
least $500,000,000, maturing not more than ninety (90) days from the date of
acquisition thereof; and (c) commercial paper rated A-1 or P-1 or better
by S&P or Moody’s, respectively, maturing not more than ninety (90) days
from the date of acquisition thereof; in each case so long as the same (i)
provide for the payment of

 

26

 

principal and interest (and not principal alone or interest alone) and
(ii) are not subject to any contingency regarding the payment of principal or
interest.

 

“Permitted Liens”
shall mean for each Project and the Westwood Place Project: (a) any Lien
created by the Loan Documents, (b) Liens for Real Estate Taxes not yet
delinquent and Liens for Other Charges imposed by any Governmental Authority
not yet due or delinquent, (c) rights of existing and future tenants under
Approved Leases as tenants only, (d) Permitted Title Exceptions that
constitute Liens, (e) utility and other easements entered into by the Borrower or
the Westwood Place Borrower in the ordinary course of business having no
adverse impact on the occupation, use, enjoyment, operation, value or
marketability of any Project or the Westwood Place Project and approved in
advance in writing by the Administrative Agent in its reasonable discretion,
(f) any Lien for the performance of work or the supply of materials affecting
any Project or the Westwood Place Project unless the Borrower or the Westwood
Place Borrower fails to discharge such Lien by payment or bonding (in
accordance with statutory bonding requirements the effect of which is to
release such Lien from the affected Project or the Westwood Place Project and
to limit the Lien claimant’s rights to a recovery on the bond) on or prior to
the date that is the earlier of (i) thirty (30) days after the date of
filing of such Lien and (ii) the date on which the Project or the Borrower’s
interest therein is subject to risk of sale, forfeiture, termination,
cancellation or loss, (g) any Lien consisting of the rights of a lessor
under equipment leases which are entered into in compliance with Sections
9.02(h) and 9.04(d) and (h) any other title and survey
exceptions (not referred to in clauses (a) through (g) above) affecting the
Projects or the Westwood Place Project as the Administrative Agent may approve
in advance in writing and in its sole discretion.

 

“Permitted Private REIT”
shall have the meaning set forth in Section 9.03(a)(iii).

 

“Permitted Private
REIT Subsidiary” shall mean any wholly-owned Subsidiary of a Permitted
Private REIT or its Operating Partnership.

 

“Permitted Public REIT”
shall mean a REIT, in which, at the time of the initial public offering of
shares therein, at least two (2) of the Named Principals are senior officers of
such REIT.

 

“Permitted Public REIT
Subsidiary” shall mean any wholly-owned Subsidiary of the Permitted Public
REIT or its Operating Partnership.

 

“Permitted Public REIT
Transfer” shall mean (a) a transfer, through one or a series of related
transactions, of one hundred percent (100%) of the direct or indirect Equity
Interests in the Borrower (and the Westwood Place Borrower, if applicable) or
any Qualified Successor Entity to the Permitted Public REIT, its Operating
Partnership or a Permitted Public REIT Subsidiary in accordance with this
Agreement; provided that the Projects and the Westwood Place Project
continue to be directly owned by the Borrower (or, in the case of the Westwood
Place Project, by the Westwood Place Borrower if not transferred to the
Borrower or a Qualified Successor Entity) or such Qualified Successor Entity,
as the case may be, or (b) a transfer, in compliance with Section
9.03(a)(iii), of all but not less than all of the Projects (and the
Westwood Place Project, if not transferred pursuant to clause (a) above) to a
Qualified

 

27

 

Successor Entity that is a Permitted Public REIT Subsidiary of the
Permitted Public REIT (other than its Operating Partnership).

 

“Permitted REIT”
shall mean a Permitted Private REIT or the Permitted Public REIT.

 

“Permitted REIT
Subsidiary” shall mean a Permitted Public REIT Subsidiary or a Permitted
Private REIT Subsidiary.

 

“Permitted
Reorganization” shall have the meaning set forth in Section 14.31.

 

“Permitted Title
Exceptions” shall mean as to any Project and the Westwood Place Project,
the outstanding liens, easements, restrictions, security interests and other
exceptions to title set forth in the policy of title insurance insuring the
lien of the Deed of Trust encumbering such Project or the Westwood Place
Project approved by the Administrative Agent.

 

“Person” shall
mean any individual, corporation, company, voluntary association, partnership,
limited liability company, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).

 

“Plan” shall mean
any employee pension benefit plan (other than a Multiemployer Plan) as defined
in Section 3(2) of ERISA, and in respect of which any Borrower Party or its
ERISA Affiliates is (or, if such plan were terminated, would, if the Plan were
subject to Title IV of ERISA, under Section 4069 of ERISA be deemed to be) an “employer”
as defined in Section 3(5) of ERISA.

 

“Pledge Agreement”
shall mean that certain Pledge and Security Agreement in the form of Exhibit
P attached hereto, to be executed, dated and delivered by the Borrower’s
Member, in its capacity as the member of the Westwood Place Borrower to the
Administrative Agent (on behalf of the Lenders) on the Closing Date as the same
may be Modified and in effect from time to time, encumbering Borrower’s Member’s
interest in the Westwood Place Borrower.

 

“Policy” and “Policies”
shall have the respective meanings assigned to such terms in Section 8.05(b).

 

“Post-Default Rate”
shall mean a rate per annum equal to 5% plus the Base Rate as in effect
from time to time plus the Applicable Margin for Base Rate Loans, provided
that, with respect to principal of a Eurodollar Loan, the “Post-Default Rate”
shall be the greater of (a) 5% plus the interest rate for such Loan as
provided in Section 3.02(a)(ii) and (b) the rate provided for above
in this definition; provided, however, that in no event shall the
Post-Default Rate exceed the Maximum Rate.

 

“Primary Credit Facility” means, with respect
to any Permitted REIT, the primary credit facility under which such Permitted
REIT obtains financing for its general purposes.

 

“Principal Office”
shall mean the office of Eurohypo, located on the date hereof at
1114 Avenue of the Americas, 29th Floor, New York, New York, or
such other office as the

 

28

 

Administrative Agent shall designate upon ten (10) days’ prior notice
to the Borrower, the Westwood Place Borrower and the Lenders.

 

“Principals” shall
mean the Named Principals and any other Person holding ten percent (10%) or
more of the shares, partnership interests, membership interests, or other
voting or beneficial interests in Borrower’s Manager. As of the date hereof,
the Named Principals own all of the shares in Borrower’s Manager.

 

“Project” shall
have the meaning assigned to such term in the Recitals.

 

“Project-Level Account”
shall have the meaning assigned to such term in each of the Project-Level
Account Security Agreements.

 

“Project-Level Account
Security Agreement” shall mean each Project-Level Account Security
Agreement substantially in the form of Exhibit I attached hereto,
delivered on the Closing Date, as the same may be Modified and in effect from
time to time. One such agreement shall be entered into among the Borrower, the
Administrative Agent (on behalf of the Lenders) and the Depository Bank, and
the other such agreement shall be entered into among the Westwood Place
Borrower, the Administrative Agent (on behalf of the Lenders) and the
Depository Bank.

 

“Property” shall
mean any right or interest in or to property of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible.

 

“Property Condition
Report” shall mean, collectively, those certain property condition reports
for each Project and the Westwood Place Project prepared for the Administrative
Agent and listed on Schedule 1.01(7) attached hereto. The
Administrative Agent acknowledges receipt of copies of the foregoing Property
Condition Reports.

 

“Property Management
Agreement” shall mean, collectively, (a) each Property Management Agreement
between the Borrower or the Westwood Place Borrower and the Property Manager
listed on Schedule 1.01(8) attached hereto and (b) any other property
management and/or leasing agreement entered into with a Property Manager
appointed in accordance with the definition of Property Manager contained in
this Section 1.01, as the same shall be Modified in accordance with the
provisions of this Agreement.

 

“Property Manager”
shall mean Douglas, Emmett and Company or such successor manager and/or leasing
agent as shall be reasonably approved by the Administrative Agent or otherwise
permitted without such approval pursuant to Section 9.15 or Section 14.31.

 

“Property Manager’s
Consent” shall mean each Property Manager’s Consent and Subordination of
Property Management Agreement substantially in the form of Exhibit J
attached hereto, to be executed, dated and delivered by (a) the Property
Manager and the Borrower or the Westwood Place Borrower to the Administrative
Agent (on behalf of the Lenders) on the Closing Date and (b) any other Property
Manager to the Administrative Agent (on behalf of the Lenders) prior to its
appointment as Property Manager, as such agreements may be Modified and in
effect from time to time.

 

29

 

“Proportionate Share”
shall mean, with respect to each Lender, the percentage set forth opposite such
Lender’s name on Schedule 1.01(4) attached hereto under the caption “Proportionate
Share” or in the Assignment and Assumption (in accordance with the terms of
this Agreement) pursuant to which such Lender became a party hereto, in any
case, as such percentage may be Modified in the most recent Assignment and
Assumption (in accordance with the terms of this Agreement) to which such
Lender is a party. The aggregate Proportionate Shares of all Lenders shall
equal one hundred percent (100%).

 

“Proposed Lender”
shall have the meaning assigned to such term in Section 5.07.

 

“Qualified Real Estate
Interest” shall mean any real estate asset of a type and quality, located
in markets, consistent with the Projects or any Residential Property as of the
date this Agreement is entered into or which is otherwise consistent with the
investment practices prior to the date hereof of the Douglas Emmett Realty
Funds taken as a whole and which is acquired after the Closing Date directly by
the Borrower or by a Qualified Sub-Tier Entity.

 

“Qualified Successor
Entity” shall have the meaning set forth in Section 9.03(a)(iii).

 

“Qualified Sub-Tier
Entity” means an entity wholly- or majority-owned and controlled by the
Borrower.

 

“Real Estate Taxes”
shall mean all real estate taxes and all general and special assessments,
levies, permits, inspection and license fees, all water and sewer rents and
charges, all charges for utilities and all other public charges whether of a
like kind or different nature, imposed upon or assessed against the Borrower,
the Westwood Place Borrower, the Projects or the Westwood Place Project or any
part thereof or upon the revenues, rents, issues, income and profits of the
Projects or the Westwood Place Project or arising in respect of the occupancy,
use or possession thereof.

 

“Register” shall
have the meaning assigned to such term in Section 14.07(b)(iv).

 

“Regulations A, D, T,
U and X” shall mean, respectively, Regulations A, D, T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the
same may be Modified and in effect from time to time.

 

“Regulatory Change”
shall mean, with respect to any Lender, any change after the Closing Date in
federal, state or foreign law or regulations (including Regulation D) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks including such Lender of or under any federal,
state or foreign law or regulations (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.

 

“REIT” shall mean
a real estate investment trust as defined in Sections 856-860 of the Code.

 

“REIT Merger Sub 1”
shall have the meaning set forth in Section 14.31.

 

30

 

“REIT Merger Sub 2”
shall have the meaning set forth in Section 14.31.

 

“Rejecting Lender”
shall have the meaning set forth in Section 9.03(c).

 

“Related Entity”
shall mean, as to any Person, (a) any other Person which directly or
indirectly owns 51% or more of the partnership, membership or other ownership
interests of such Person and directly or indirectly controls such Person;
(b) any other Person into which, or with which, such Person is merged,
consolidated or reorganized, or which is otherwise a successor to such Person
by operation of law, or which acquires all or substantially all of the assets
of such Person; (c) any other Person which is a successor to the business
operations of such Person and engages in substantially the same activities; or
(d) any other Person in which a Person described in clauses (b) and (c)
of this definition directly or indirectly owns 51% or more of the partnership,
membership or other ownership interests of such Person and directly or
indirectly controls such Person. As used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under
common control with”) shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise).

 

“Related Party”
shall mean:

 

(i)            any family member of any Named
Principal; or

 

(ii)           any trust, corporation, partnership,
limited liability company or other entity, in which any Named Principal and/or
such other persons referred to in the immediately preceding clause (i) have a
controlling interest.

 

“Release” shall
mean any release, spill, emission, leaking, pumping, injection, pouring,
dumping, deposit, disposal, discharge, dispersal, leaching, seeping or
migration 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.

 

“Remediation”
shall mean, without limitation, any investigation, site monitoring, response,
remedial, removal, or corrective action, any activity to cleanup, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance,
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or evaluation
relating to any Hazardous Substances. “Remediate” shall have a correlative
meaning.

 

“Rents” means all
rents (whether denoted as base rent, advance rent, minimum rent, percentage
rent, additional rent or otherwise), issues, income, royalties, profits,
revenues, proceeds, bonuses, deposits (whether denoted as security deposits or
otherwise), termination fees, rejection damages, buy-out fees and any other
fees made or to be made in lieu of rent to the Borrower or the Westwood Place
Borrower, any award made hereafter to the Borrower or the Westwood Place
Borrower in any court proceeding involving any tenant, lessee, licensee or
concessionaire under any of the Leases in any bankruptcy, insolvency or
reorganization proceedings in any state or federal court, and all other
payments, rights and benefits of whatever

 

31

 

nature from time to time due to the Borrower or the Westwood Place
Borrower under the Leases (including any Leases with respect to signage),
including (i) rights to payment earned under the Leases, (ii) any
payments or rights to payment with respect to parking facilities or other
facilities in any way contained within or associated with the Projects or the
Westwood Place Project, and (iii) all other income, consideration, issues,
accounts, profits or benefits of any nature arising from the possession, use
and operation of the Projects or the Westwood Place Project.

 

“Requesting Lender”
shall have the meaning assigned to such term in Section 5.07.

 

“Required Lenders”
shall mean Lenders holding at least 66.67% of the Outstanding Principal Amount.

 

“Required Payment”
shall have the meaning assigned to such term in Section 4.06.

 

“Reserve Requirement”
shall mean, for any Interest Period for any Eurodollar Loan, the average
maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained during such Interest Period
under Regulation D by member banks of the Federal Reserve System in New York
City with deposits exceeding one billion Dollars against “Eurocurrency liabilities”
(as such term is used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall include any other reserves required to
be maintained by such member banks by reason of any Regulatory Change with
respect to (i) any category of liabilities that includes deposits by
reference to which the LIBO Rate is to be determined as provided in the
definition of “LIBO Rate” in this Section 1.01 or (ii) any
category of extensions of credit or other assets that includes Eurodollar Loans.

 

“Residential
Properties” shall have no meaning for purposes of this Agreement.

 

“Restoration”
shall have the meaning assigned to such term in Section 10.01(a).

 

“Restoration
Consultant” shall have the meaning assigned to such term in Section
10.03(e).

 

“Restoration Retainage”
shall have the meaning assigned to such term in Section 10.03(f).

 

“Restricted Payment”
shall mean all distributions of the Borrower, the Westwood Place Borrower or
the Borrower’s Member (in cash, Property or other obligations) on, or other
payments or distributions on account of (or the setting apart of money for a
sinking or other analogous fund for) the purchase, redemption, retirement or
other acquisition of, any portion of any Equity Interest in the Borrower, the
Westwood Place Borrower or the Borrower’s Member or of any warrants, options or
other rights to acquire any such Equity Interest.

 

“Rollover Breakage
Costs” shall have the meaning assigned to such term in Section 2.08.

 

32

 

“Security Accounts”
shall mean, collectively, the Cash Trap Account, the Project-Level Account and
any Controlled Account.

 

“Security Documents”
shall mean, collectively, the Deed of Trust, the Hedge Agreement Pledge, the
Cash Trap Account Security Agreement, the Project-Level Account Security
Agreement, the Controlled Account Agreement, the General Assignment, the Pledge
Agreement and such other security documents as the Administrative Agent may
reasonably request and all Uniform Commercial Code financing statements
required by this Agreement, the Deed of Trust, the Hedge Agreement Pledge, the
Cash Trap Account Security Agreement, the Project-Level Account Security
Agreement, the Controlled Account Agreement, the General Assignment, the Pledge
Agreement or any other security document the Administrative Agent may
reasonably request to be filed with respect to the applicable security
interests.

 

“Significant Casualty
Event” shall have the meaning assigned to such term in Section 10.01(b).

 

“SNDA Agreement”
shall mean (i) the form of Subordination, Non-Disturbance, and Attornment
Agreement attached hereto as Exhibit K, (ii) any form attached to a
Major Lease currently in effect or which has been approved by the
Administrative Agent pursuant to the terms of this Agreement or (iii) such
other form as is reasonably satisfactory to the Administrative Agent.

 

“Solvent” shall
mean, when used with respect to any Person, that at the time of determination:
(i) the fair saleable value of its assets is in excess of the total amount of
its liabilities (including contingent liabilities); (ii) the present fair
saleable value of its assets is greater than its probable liability on its
existing debts as such debts become absolute and matured; (iii) it is then able
and expects to be able to pay its debts (including contingent debts and other
commitments) as they mature; and (iv) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.

 

“S&P” shall
mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor thereto.

 

“Stated Maturity Date”
shall mean the date that is seven (7) years from the expiration of the Stub
Interest Period, subject to Section 2.10, and Section 2.10 as
incorporated by reference into Article IIA.

 

“Stub
Interest Period” shall mean the period commencing on the Closing Date and
ending on (but not including) the
first calendar day of the first month following the Closing Date (or if such
day is not a Business Day, the next Business Day thereafter).

 

“Subsidiary” shall
mean, with respect to any Person, any corporation, limited liability company,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, limited liability company, partnership or other
entity (irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, limited liability
company, partnership or other entity shall have or might have voting power by
reason of

 

33

 

the happening of any contingency) is at the time directly or indirectly
owned or controlled by such Person or one or more Subsidiaries of such Person
or by such Person and one or more Subsidiaries of such Person.

 

“Swap Agreement”
means any agreement (whether one or more) with respect to any swap, forward,
future or derivative transaction or option or similar agreement (including,
without limitation, any cap or collar) involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any
combination of these transactions. For purposes hereof, the credit exposure at
any time of any Person under a Swap Agreement to which such Person is a party
shall be determined at such time in accordance with the standard methods of
calculating credit exposure under similar arrangements as reasonably prescribed
from time to time by the Administrative Agent, taking into account (a)
potential interest rate movements, (b) the respective termination provisions,
(c) the notional principal amount and term of such Swap Agreement and (d) any
provisions providing for the netting of amounts payable by and to a Person
thereunder (or simultaneous payments of amounts by and to such Person).

 

“Syndication”
shall have the meaning assigned to such term in Section 14.26.

 

“Taking” means a
taking or voluntary conveyance during the term hereof of all or part of any
Project or the Westwood Place Project or any interest therein or right accruing
thereto or use thereof, as the result of, or in settlement of, any condemnation
or other eminent domain proceeding by any Governmental Authority affecting such
project or any portion thereof whether or not the same shall have actually been
commenced.

 

“Taxes” shall mean
any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.

 

“Third Party
Counterparty” shall have the meaning assigned to such term in Section
8.19(a).

 

“Third Party Hedge
Agreement” shall have the meaning assigned to such term in Section
8.19(c).

 

“Title Company”
shall mean Chicago Title Insurance Company and any one or more reinsurers
identified on Schedule 1.01(9) attached hereto; provided, however,
that (i) in no event shall the amount insured by any such title insurer exceed
the limits shown on Schedule 1.01(9) and (ii) any reinsurance shall be
subject to direct access agreements from such reinsurers.

 

“Title Policy”
shall have the meaning assigned to such term in Section 6.01(k).

 

“Trading with the
Enemy Act” shall mean 50 U.S.C. App. 1 et seq.

 

“Transactions”
shall mean, collectively, (a) the execution, delivery and performance by
the Borrower and the Westwood Place Borrower of this Agreement and the other
Loan Documents to which they are a party, the borrowing of their respective
Loans and the use of the proceeds thereof and (b) the execution, delivery
and performance by the other Borrower

 

34

 

Parties of the other Loan Documents to which they are a party and the
performance of their obligations thereunder.

 

“Transfer” shall
mean any transfer, sale, assignment, mortgage, encumbrance, pledge or
conveyance, whether voluntary or involuntary.

 

“Type” shall have
the meaning assigned to such term in Section 1.03.

 

“Uniform Commercial
Code” shall mean the Uniform Commercial Code of the State of California,
except with respect to those circumstances in which the Uniform Commercial Code
of the State of California shall require the application of the Uniform
Commercial Code of another state, in which case, for purposes of such
circumstances, the “Uniform Commercial Code” shall mean the Uniform Commercial
Code of such other state.

 

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

 

“Westwood Place
Commitment” shall mean that portion of the Commitment which is allocated to
the commitment to make Loans to the Westwood Place Borrower, as more fully
indicated on Schedule 1.01(4).

 

“Westwood Place
Default” shall mean Westwood Place Event of Default or an event that with
notice or lapse of time or both would become a Westwood Place Event of Default.

 

“Westwood Place Event
of Default” shall have the meaning set forth in Section 12.01A.

 

“Westwood Place
Project” shall have the meaning assigned to such term in the Recitals.

 

“Withdrawal Liability”
means liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan.

 

1.02         Accounting Terms and Determinations.

 

(a)           Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time.

 

(b)           Without first obtaining the
Administrative Agent’s consent, the Borrower will not change the last day of
its fiscal year from December 31, or the last days of the first three fiscal
quarters in each of its fiscal years.

 

1.03         Types of Loans. Loans hereunder
are distinguished by “Type”. The “Type” of a Loan refers to whether such Loan
is a Base Rate Loan or a Eurodollar Loan, each of which constitutes a Type.

 

35

 

1.04         Terms Generally. The definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time Modified (subject to any restrictions on such
Modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns,
(c) the words “herein”, “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights and (f) whenever this
Agreement provides that any consent or approval will not be “unreasonably
withheld” or words of like import, the same shall be deemed to include within
its meaning that such consent or approval will not be unreasonably delayed or
conditioned.

 

1.05         Certain Definitions and
Cross-References as Applicable to Westwood Place. For purposes of the
provisions of Articles IIA, IIIA, IVA, VA, VIA,
VIIA, VIIIA, IXA, XA, XIA, XIIA and XIIIA
and Sections 14.23(b) and 14.28, which contain certain covenants,
representations, warranties, terms and conditions which relate to the Loans
made or to be made to the Westwood Place Borrower and the Westwood Place
Commitment, and which incorporate by reference certain provisions set forth in
other Articles and Sections of this Agreement, as if certain references therein
to the “Borrower” or any “Borrower Party” or “Borrower Parties” shall mean the
Westwood Place Borrower, certain references therein to the “Loans” shall mean
the Loans made to the Westwood Place Borrower, certain references therein to
the “Commitment” shall mean the Westwood Place Commitment, certain references
therein to any “Project” shall mean the Westwood Place Project, certain
references therein to the “Loan Documents” shall mean, and be limited to, the
Loan Documents to which the Westwood Place Borrower is a party, and certain
references therein to “Default” or “Event of Default” shall mean Westwood Place
Default and Westwood Place Event of Default, it is understood and agreed that
(a) any references in the definitions of the defined terms which are used in
such incorporated Articles and Sections to the “Borrower” or any “Borrower
Party” shall mean the Westwood Place Borrower, and which refer to the “Loans”
or “Commitment” shall mean the Loans made or to be made to the Westwood Place
Borrower, and which refer to the “Commitment” shall mean the Westwood Place
Commitment, and which refer to any “Project” shall mean the Westwood Place
Project, and which refer to any “Loan Document” shall mean, and shall be
limited to, the Loan Documents to which the Westwood Place Borrower is a party,
and which refer to a “Default” or “Event of Default” shall mean a Westwood
Place Default or a Westwood Place Event of Default, respectively, and (b) each
cross reference in such incorporated Articles and Sections to any other Article
or Section of this Agreement (or obligations thereunder) shall be deemed to
mean that Article or Section (or the obligations thereunder) as incorporated by
reference in the provisions of this Agreement setting forth the terms and
covenants applicable to the Westwood Place Borrower, the Loans made to it and
the Westwood Place Project.

 

36

 

ARTICLE
II

COMMITMENTS, LOANS, NOTES AND PREPAYMENTS

 

2.01         Loans.
Each Lender severally agrees, on the terms and conditions of this Agreement, to
make a loan (each such loan being a “Loan” and collectively, the “Loans”)
on a non-revolving basis to the Borrower in Dollars on the Closing Date in a
principal amount up to but not exceeding the amount of the Commitment of such
Lender. Thereafter the Borrower may Convert all or a portion of the Outstanding
Principal Amount of one Type of Loan into another Type of Loan (as provided in Section 2.05)
or Continue one Type of Loan as the same Type of Loan (as provided in Section 2.05),
subject in all cases to the limit on the number of Interest Periods that may be
outstanding at any one time as set forth in the definition of “Interest Period”.

 

2.02         Funding
of Loans. On the Closing Date, each Lender shall make available from its
Applicable Lending Office the amount of the Loan to be made by it on such date
to the Administrative Agent as specified by the Administrative Agent, in
immediately available funds, for account of the Borrower. The amount so
received by the Administrative Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Borrower in immediately available
funds, for the uses and purposes identified on a sources and uses statement
approved by the Administrative Agent and the Borrower.

 

2.03         Several
Obligations. The failure of any Lender to make any Loan to be made by it on
the date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither any Lender nor the
Administrative Agent shall be responsible for the failure of any other Lender
to make a Loan to be made by such other Lender. The amounts payable by the
Borrower at any time hereunder and under the Note to each Lender shall be a
separate and independent debt. It is understood and agreed that the Closing
hereunder shall not occur unless each of the Lenders shall have funded the
amount of the Loan to be made by it.

 

2.04         Notes.

 

(a)           Notes.
The Loan made by each Lender shall be evidenced by its Note.

 

(b)           Substitution,
Exchange and Subdivision of Notes. No Lender shall be entitled to have its
Note substituted or exchanged for any reason, or subdivided for promissory
notes of lesser denominations, except (i) in connection with a permitted
assignment of all or any portion of such Lender’s Commitment, Loan and Note
pursuant, and subject to the terms and conditions of, Section 14.07(b)
(and, if requested by any Lender in connection with such permitted assignment,
the Borrower agrees to so exchange any such Note provided the original Note
subject to such exchange has been delivered to the Borrower) or (ii) as
provided in Section 14.30 with respect to severance of Notes if elected
by Eurohypo, provided the original Note severed, split, divided or otherwise
replaced pursuant to Section 14.30 has been delivered to the Borrower.

 

(c)           Loss,
Theft, Destruction or Mutilation of Notes. In the event of the loss, theft
or destruction of any Note, upon the Borrower’s receipt of a reasonably
satisfactory

 

37

 

indemnification agreement
executed in favor of the Borrower by the holder of such Note, or in the event
of the mutilation of any Note, upon the surrender of such mutilated Note by the
holder thereof to the Borrower, the Borrower shall execute and deliver to such
holder a replacement Note in lieu of the lost, stolen, destroyed or mutilated
Note.

 

2.05         Conversions
or Continuations of Loans.

 

(a)           Subject
to Section 4.04, the Borrower shall have the right to Convert Loans
of one Type into Loans of another Type or Continue Loans of one Type as Loans
of the same Type, at any time or from time to time; provided that:  (i) the Borrower shall give the
Administrative Agent notice of each such Conversion or Continuation as provided
in Section 4.05; (ii) Eurodollar Loans may be Converted only on the
last day of an Interest Period for such Loans unless the Borrower complies with
the terms of Section 5.05 and (iii) subject to Sections 5.01(a)
and 5.03, any Conversion or Continuation of Loans shall be pro rata
among the Lenders. Notwithstanding the foregoing, and without limiting the
rights and remedies of the Administrative Agent and the Lenders under Article
XII, in the event that any Event of Default exists, the Administrative
Agent may (and at the request of the Required Lenders shall) suspend the right
of the Borrower to Convert any Loan into a Eurodollar Loan, or to Continue any
Loan as a Eurodollar Loan for so long as such Event of Default exists, in which
event all Loans shall be Converted (on the last day(s) of the respective
Interest Periods therefor) into, or Continued as, as the case may be, Base Rate
Loans. In connection with any such Conversion, a Lender may (at its sole
discretion) transfer a Loan from one Applicable Lending Office to another.

 

(b)           Notwithstanding
anything to the contrary contained in this Agreement, at any time that a Hedge
Agreement is in effect, the Borrower shall have the right to choose only an
Interest Period which is the same as the Interest Rate Hedge Period, provided
that the foregoing shall only apply to a Hedge Agreement that is required by Section
8.19(a) of this Agreement.

 

2.06         Prepayment.

 

(a)           Prepayment
of the Loans. Upon not less than ten (10) days’ prior written notice to the
Administrative Agent, the Borrower may prepay the Loans, in whole or in part,
in minimum increments of One Million Dollars ($1,000,000) except as otherwise
provided by Section 2.06(c), subject to the following:

 

(i)            any such prepayment shall be
accompanied by the amount of interest theretofore accrued but unpaid in respect
of the principal amount so prepaid, in accordance with Section 2.08;

 

(ii)           except as provided below, any such
prepayment (except as a result of a Casualty Event or Taking or any prepayment
made pursuant to Section 10.03(j) or Section 14.25)) shall
be accompanied by a prepayment premium equal to the following percentage of the
principal amount so prepaid:

 

38

 

	
  If the prepayment occurs during the

  following period:

  	
   

  	
  The percentage is as follows:

  
	
   

  	
   

  	
   

  
	
  During the period from the Closing Date to and
  including the date which occurs six (6) months after the Closing Date

  	
   

  	
  1.00%

  
	
   

  	
   

  	
   

  
	
  During the period from the day immediately following
  the date which occurs six (6) months after the Closing Date to and including
  the date which occurs twelve (12) months after the Closing Date

  	
   

  	
  0.50%

  
	
   

  	
   

  	
   

  
	
  Thereafter

  	
   

  	
  0.00%

  

 

and

 

(iii)          such prepayment shall be accompanied
by any amounts payable to a Lender pursuant to Section 5.05 as a
result of such prepayment while a Eurodollar Loan is in effect, in accordance
with Section 2.08.

 

If the Loans are paid or
prepaid in whole or in part for any reason (including acceleration of the Loans
or because the Loans automatically become due and payable in accordance with Section
12.02(a)), other than by a Casualty Event or Taking or any prepayment made
pursuant to Section 10.03(j) or Section 14.25) at any time,
the Borrower shall pay to the Administrative Agent (on behalf of the Lenders)
the amount(s) described in clauses (i), (ii), as applicable, and (iii),
of the immediately preceding sentence. Notwithstanding the foregoing, no
prepayment premium pursuant to clause (ii) of Section 2.06(a)
shall be payable in connection with any prepayment of principal made other than
pursuant to Section 2.09(a), if such prepayment, when aggregated with
all past prepayments made other than pursuant to Section 2.09(a), would
not exceed $106,250,000.

 

(b)           Treatment
of Prepayments. Except for any mandatory prepayment made pursuant to Section
2.07 and any prepayment made under Sections 2.06(c) and 2.09,
and notwithstanding when such prepayment is made, each partial prepayment of
the Loans shall be deemed to reduce the Allocated Loan Amounts pro-rata in
accordance with the Allocated Loan Amount for each Project.

 

(c)           Prepayment
Upon Release of Projects. Notwithstanding anything to the contrary
contained in this Section 2.06, any prepayment made in connection
with the release in accordance with the terms contained in Section 2.09
of any one or more of the Projects may be made at any time upon not less than
ten (10) days’ prior written notice to the Administrative Agent, and without
reference to the minimum One Million Dollars ($1,000,000) increment
requirements of Section 2.06(a), but subject to payment of any
applicable prepayment premium under clause (ii) of Section 2.06(a)
and compliance with the provisions set forth in clause (iii) of Section 2.06(a)
above, and the applicable provisions set forth in Section 2.09.

 

39

 

(d)           Acknowledgments
Regarding Prepayment Premium. The prepayment premiums required by this Section 2.06
are acknowledged by the Borrower to be partial compensation to the Lenders for
the costs of reinvesting the proceeds of the Loans and for the loss of the
contracted rate of return on the Loans and shall be due in accordance with the
terms of this Section 2.06 upon any prepayment of the Loans, including
any prepayment occurring after an acceleration resulting from a violation of
the provisions restricting Transfers set forth in this Agreement. Furthermore,
the Borrower acknowledges that the loss that may be sustained by the Lenders as
a result of such a prepayment by the Borrower is not susceptible of precise
calculation, and the prepayment premium represents the good faith effort of the
Borrower and the Lenders to compensate the Lenders for such loss and the parties’
reasonable estimate of such loss, and is not a penalty. By initialing this
provision where indicated below, the Borrower waives any rights it may have
under California Civil Code Section 2954.10, or any successor statute, and
the Borrower confirms that the Lenders’ agreement to make the Loans at the
interest rate and on the other terms set forth herein constitutes adequate and
valuable consideration, given individual weight by the Borrower, for the
prepayment provisions set forth in this Section 2.06.

 

	
   

  	
   

  	
   

  
	
   

  	
  Borrower’s Initials

  

 

2.07         Mandatory
Prepayments. If a Casualty Event or Taking shall occur with respect to any
Project, the Borrower, upon the Borrower’s or the Administrative Agent’s
receipt of the applicable Insurance Proceeds or Condemnation Awards, shall
prepay the Loan, if required by the provisions of Article X, on the
dates and in the amounts specified therein without premium (but subject to the
provisions of Sections 2.08 and 5.05) or, at the instruction of
the Borrower (provided no Event of Default is then continuing), shall be held
in a Controlled Account by the Administrative Agent and applied to prepayment
of the Loan on the next Payment Date (in which case the amount so held shall
continue to bear interest at the rate(s) provided in this Agreement until so
applied to prepay the Loan). Nothing in this Section 2.07 shall be
deemed to limit any obligation of the Borrower under the Deeds of Trust or any
other Security Document, including any obligation to remit to the Cash Trap
Account, Project-Level Account, or a Controlled Account pursuant to the Deeds
of Trust or any of the other Security Documents the Insurance Proceeds,
Condemnation Awards or other compensation received in respect of any Casualty
Event or Taking.

 

2.08         Interest
and Other Charges on Prepayment. If the Loans are prepaid, in whole or in
part, pursuant to Section 2.06 or 2.07, each such prepayment shall
be made together with (a) the accrued and unpaid interest on the principal
amount prepaid, and (b) any amounts payable to a Lender pursuant to Section
5.05 as a result of such prepayment while an Adjusted LIBO Rate is in
effect (provided the Borrower is notified of such amount or an estimate
thereof), including, without limitation, any such amounts that may result from
a prepayment other than on the last day of an Interest Period for a Eurodollar
Loan the Interest Period of which has been automatically Continued pursuant to Section
4.05 during any period on which a prepayment date has been postponed in
accordance with the provisions set forth below in this Section 2.08; provided,
however, that any such prepayment shall be applied first, to the
prepayment of any portions of the Outstanding Principal Amount that are Base
Rate Loans and, second, to the

 

40

 

prepayment of any
portions of the Outstanding Principal Amount that are Eurodollar Loans applying
such sums first to Eurodollar Loans of the shortest maturity so as to minimize Rollover
Breakage Costs (as defined below); provided  further, however,
that if an Event of Default exists, the Administrative Agent may distribute
such payment to the Lenders for application in such manner as it or the
Required Lenders, subject to Section 4.02, may determine to be
appropriate. Each prepayment pursuant to Section 2.06 shall be made on
the prepayment date specified in the notice of prepayment delivered pursuant to
Section 4.05, unless such notice is revoked (or the date of prepayment
is postponed) by a further written notice (which may be delivered by the
Borrower by facsimile to the Administrative Agent). Any notice revoking a notice of prepayment (or
postponing a previously-specified prepayment date) shall be delivered not less
than one (1) Business Day prior to the date of prepayment specified in the
notice of prepayment; provided, however, in the event that the
Borrower revokes or postpones such notice during the last three (3) Business
Days of any Interest Period for a Eurodollar Loan, and provided that the
Borrower has not elected to Convert such Eurodollar Loan into a Base Rate Loan
pursuant to Section 2.05, the Borrower acknowledges that losses, costs
and expenses for which the Borrower is responsible pursuant to Section 5.05(b)
shall include, without limitation, losses, costs and expenses that may
subsequently result from the early repayment, termination, cancellation or
failure of the Borrower to borrow any Eurodollar Loan that was to have been
automatically continued pursuant to Section 4.05 (“Rollover Breakage
Costs”).

 

2.09         Release
of Projects. Except as set forth in this Section 2.09, or
unless the Obligations have been paid in full, the Borrower shall have no right
to obtain the release of any Project from the Lien of the Loan Documents, and
no repayment or prepayment of any portion of the Loans shall cause, give rise
to a right to require, or otherwise result in, the release of the Lien of the
Deed of Trust on any Project or any other collateral securing the Loans. Any
release upon payment of the Obligations in full shall be in accordance with the
provisions of the Deeds of Trust governing releases.

 

(a)           Release
of Projects. At any time following the Closing Date, the Borrower on one or
more occasions may obtain, and the Administrative Agent shall take such actions
as are necessary to effectuate pursuant to this Section 2.09(a),
the release of the entirety of any Project from the Lien of the Deeds of Trust
(and related Loan Documents) thereon and the release of the Borrower’s
obligations under the Loan Documents with respect to such Project (other than
those which expressly survive repayment, including, but not limited to, those
set forth in the Environmental Indemnity), upon satisfaction of each of the
following conditions:

 

(i)            The Borrower shall submit to the
Administrative Agent (on behalf of the Lenders), by 3:00 P.M., New York
City time, at least ten (10) days prior to the date of the proposed release,
written notice of its election to obtain such release (which notice shall
include a certification by an Authorized Officer of the Borrower that the
proposed release complies with all of the conditions set forth in this Section 2.09(a)),
together with the form or forms for a release of Lien and related Loan
Documents (or, in the case of a Deed of Trust, a request for reconveyance) for
such Project for execution by the Administrative Agent, which the
Administrative Agent shall execute and deliver to the Borrower for recordation
upon satisfaction of all conditions set forth in this Section 2.09(a).
Such release shall be in a form appropriate in each jurisdiction in which the
applicable Project is located and reasonably satisfactory to the Administrative
Agent

 

41

 

and its counsel. Any notice of a proposed release of a
Project pursuant to this Section 2.09(a) may be revoked (or the date
proposed for such release may be postponed) by a further written notice (which
may be delivered by the Borrower by facsimile to the Administrative Agent). Any notice revoking a
proposed release (or postponing the date for a proposed release) shall be
delivered not less than one (1) Business Day prior to the date of such release
specified in the notice of release; provided, however, in the
event that the Borrower revokes or postpones such notice during the last three
(3) Business Days of the Interest Period for any Eurodollar Loan, and provided
that the Borrower has not elected to Convert such Eurodollar Loan into a Base
Rate Loan pursuant to Section 2.05, the Borrower acknowledges that the
losses, costs and expenses for which the Borrower shall be responsible under Section
5.05(b) shall include Rollover Breakage Costs;

 

(ii)           The Borrower shall remit to the
Administrative Agent an amount equal to one hundred ten percent (110%) of the
Allocated Loan Amount for the applicable Project (for application to the principal
balance of the Loans), plus any prepayment premium payable in connection with
such prepayment pursuant to clause (ii) of Section 2.06(a).
The minimum One Million Dollar ($1,000,000) increment requirements of Section
2.06(a) shall not apply to a prepayment of the Loans made in accordance
with this Section 2.09(a);

 

(iii)          The Borrower shall pay to the
Administrative Agent all sums, including, but not limited to, interest payments
and principal payments, if any, that are then due and payable under the Notes,
this Agreement, the Deeds of Trust and the other Loan Documents, and all costs
due pursuant to Section 5.05 and clause (viii) of this Section
2.09(a) (it being agreed that accrued interest on the principal amount to
be paid pursuant to clause (ii) of this Section 2.09(a) shall not be due
and payable in connection with such release (unless such accrued interest is
otherwise due and payable), but shall be due and payable on the next Payment
Date);

 

(iv)          [Reserved];

 

(v)           Immediately prior to such release,
the Debt Service Coverage Ratio as calculated for all of the Projects then
securing the Loans (inclusive of the Westwood Place Project unless it is the
project to be released) other than the Project proposed to be released (and
assuming for purposes of the calculation of the DSCR Debt Service that the
principal of the Loans shall have been reduced by the principal amount payable
with respect to the Project to be released in accordance with clause (ii)
of this Section 2.09(a)) shall be equal to or greater than 1.50-to-1.00;

 

(vi)          After giving effect to such release
and the payment of principal required to be made in connection therewith, the
Outstanding Principal Amount of the Loans (unless the Loans shall be repaid in
full) shall not be less than $212,500,000;

 

(vii)         No Default or Event of Default exists
at the time of the Borrower’s request or on the date of the proposed release or
after giving effect thereto (other than a Default or Event of Default that
would be cured by effectuating such release); and

 

42

 

(viii)        The Borrower shall pay all costs and
expenses (including, but not limited to, reasonable legal fees and
disbursements, escrow and trustee fees, costs for title insurance endorsements
required by the Administrative Agent to confirm the continued priority of the
Liens in favor of the Lenders on the Projects and the Westwood Place Project
not being released and other out-of-pocket costs and expenses) incurred by the
Administrative Agent in connection with such release.

 

It is
understood and agreed that no such release shall impair or otherwise adversely
affect the Liens, security interests and other rights of the Administrative
Agent or the Lenders under the Loan Documents not being released (or as to the
parties to the Loan Documents and Projects subject to the Loan Documents not
being released).

 

(b)           Any
Project released from the Lien of the Deed of Trust and other Loan Documents
pursuant to this Section 2.09 shall, effective upon such release, no
longer be considered a “Project” for purposes of this Agreement or the other
Loan Documents, except for purposes of those indemnification obligations and
other covenants which, by their terms, expressly survive any such release.

 

2.10         Call
Date. Notwithstanding anything to the contrary contained in this Agreement,
(i) the Outstanding Principal Amount under all Notes made by the Borrower shall
become automatically due and payable on the fifth (5th) anniversary of the
expiration of the Stub Interest Period if on or prior to such date the Borrower
has not paid to the Administrative Agent in accordance with the Fee Letter for
the benefit of the Lenders an extension fee equal to five (5) basis points
(0.05%) times the Outstanding Principal Amount under all Notes made by the
Borrower as of the fifth (5th) anniversary of the expiration of the Stub
Interest Period or if on such date an Event of Default exists and (ii) the
Outstanding Principal Amount under all Notes made by the Borrower shall become
automatically due and payable on the sixth (6th) anniversary of the expiration
of the Stub Interest Period if on such date the Borrower has not paid to the
Administrative Agent in accordance with the Fee Letter for the benefit of the
Lenders an extension fee equal to five (5) basis points (0.05%) times the
Outstanding Principal Amount under all Notes made by the Borrower as of the
sixth (6th) anniversary of the expiration of the Stub Interest Period or if on
such date an Event of Default exists.

 

ARTICLE
IIA        

WESTWOOD PLACE COMMITMENTS, LOANS,

NOTES AND PREPAYMENTS

 

Each Lender severally
agrees, on the terms and conditions of this Agreement, to make a Loan on a
non-revolving basis to the Westwood Place Borrower in Dollars on the Closing
Date in a principal amount up to but not exceeding the amount of the Westwood
Place Commitment of such Lender. Such Loans shall be on exactly the same terms
and conditions as Loans may be made to the Borrower as set forth in Article
II, as if, in each case as the context requires, each reference therein to
the “Borrower” or any “Borrower Party” or “Borrower Parties” shall mean the
Westwood Place Borrower, each reference therein to the “Loans” shall mean the
Loans made to the Westwood Place Borrower, each reference therein to the “Commitment”
shall mean the Westwood Place Commitment, each reference therein to any

 

43

 

“Project” shall mean the Westwood Place Project, each reference therein
to any Loan Document shall mean the applicable Loan Document to which the
Westwood Place Borrower is a party, if any, and each reference therein to a “Default”
or “Event of Default” shall mean a Westwood Place Default or Westwood Place
Event of Default, respectively; provided, however, that
(a) any reference in Section 2.02 to a “sources and uses statement”
shall mean a sources and uses statement approved by the Administrative Agent
and the Westwood Place Borrower, (b) such Loans may be prepaid, and the
Westwood Place Project may be released, in accordance with the terms and
conditions as are set forth in Sections 2.06 and 2.09, only as if
such Loans were made to, and the Westwood Place Project were owned by, the
Borrower, so that (without limiting the foregoing) the restrictions on releases
of Projects set forth in Section 2.09 shall be applicable, in the
aggregate, as to releases of Projects by the Borrower and the release of the
Westwood Place Project (provided, however, that the references to “Default” and
“Event of Default” set forth in Section 2.09(a)(vii) shall, in
connection with any proposed release of the Westwood Place Project, be deemed
to mean “Westwood Place Default” and “Westwood Place Event of Default” only),
(c) if the Westwood Place Project is proposed to be released pursuant to Section
2.09(a), the Westwood Place Borrower shall be obligated to pay the Loans
made to it in full and as an additional condition to the release, the Borrower
shall be obligated to prepay in compliance with Section 2.06 the Loans
in an amount equal to one hundred ten percent (110%) of the Allocated Loan
Amount for the Westwood Place Project less the principal amount paid by the
Westwood Place Borrower in connection with the release, and upon the release of
the Westwood Place Project in compliance with Section 2.09, the Westwood
Place Borrower shall be deemed discharged from its obligations under this
Agreement and the other Loan Documents, except for its obligations under those
indemnification obligations and other covenants which, by their terms,
expressly survive any such release; provided, however, that no
such release or discharge shall affect any of the obligations of the Borrower
under this Agreement or the other Loan Documents (including, without
limitation, any such obligations which relate to Affiliates or Subsidiaries of
the Borrower, to the extent that, from and after such release or discharge, the
Westwood Place Borrower continues to be an Affiliate or Subsidiary of the
Borrower), and (d) by initialing this provision where indicated below, the
Westwood Place Borrower, with respect to the Loans made to the Westwood Place
Borrower, hereby makes each of the acknowledgments set forth in Section
2.06(d) and hereby waives its rights under California Civil Code Section
2954.10 as set forth in Section 2.06(d), and (e) Section 2.10
shall apply to the Westwood Place Borrower as to the payment of an extension
fee equal to five (5) basis points (0.05%) times the Outstanding Principal
Amount of the Notes made by the Westwood Place Borrower.

 

	
   

  	
   

  	
   

  
	
   

  	
  Westwood Place
  Borrower’s Initials

  

 

ARTICLE
III

PAYMENTS OF PRINCIPAL AND INTEREST

 

3.01         Repayment
of Loans. The Borrower hereby promises to pay to the Administrative Agent
for the account of each Lender the principal amount of such Lender’s outstanding
Loans to the Borrower, together with accrued and unpaid interest, any
applicable

 

44

 

fees and all other
amounts due under the Loan Documents with respect to such Loans, which amounts,
to the extent not previously paid, shall, without notice, demand or other
action, be due and payable on the Maturity Date.

 

3.02         Interest.

 

(a)           The
Borrower hereby promises to pay to the Administrative Agent for the account of
each Lender interest on the unpaid principal amount of each Loan (which may be
Base Rate Loans and/or Eurodollar Loans) made by such Lender for the period
from and including the date of such Loan to but excluding the date such Loan
shall be paid in full if paid in the time and manner provided for in Section
4.01, at the following rates per annum:

 

(i)            during such periods as such Loan is
a Base Rate Loan, the Base Rate plus the Applicable Margin; and

 

(ii)           during such periods as such Loan is a
Eurodollar Loan, for each Interest Period relating thereto, the Adjusted LIBO
Rate for such Loan for such Interest Period plus the Applicable Margin.

 

(b)           Accrued
interest on each Loan shall be payable (i) monthly in arrears on each Payment
Date for all interest accrued through but not including the relevant Payment
Date and (ii) in the case of any Loan, upon the payment or prepayment thereof
(except as expressly provided in Section 2.09(a)(iii)) or the
Conversion of such Loan to a Loan of another Type (but only on the principal
amount so paid, prepaid or Converted), except that interest payable hereunder
at the Post-Default Rate shall be payable from time to time on demand.

 

(c)           Notwithstanding
anything to the contrary contained herein, after the Maturity Date and during
any period when an Event of Default exists, the Borrower shall pay to the
Administrative Agent for the account of each Lender interest at the applicable
Post-Default Rate on the outstanding principal amount of any Loan made by such
Lender, any interest payments thereon not paid when due and on any other amount
due and payable by the Borrower hereunder, under the Notes and any other Loan
Documents.

 

(d)           Promptly
after the determination of any interest rate provided for herein or any change
therein, the Administrative Agent shall give notice thereof to the Lenders to
which such interest is payable and to the Borrower, but the failure of the
Administrative Agent to provide such notice shall not affect the Borrower’s
obligation for the payment of interest on the Loans.

 

(e)           In
addition to any sums due under this Section 3.02, the Borrower shall pay
to the Administrative Agent for the account of the Lenders a late payment
premium in the amount of four percent (4%) of (i) any payments of
principal under the Loans not made when due, and (ii) any payments of
interest or other sums under the Loans not made when due, provided, in each
case, that such payments are not made within the earlier of (i) two (2)
Business Days after the Borrower receives written notice from the
Administrative Agent of Borrower’s failure to make such payment when due and
(ii) five (5) days after the date the same became due, which late payment
premium shall be due with any such late payment or upon demand by the
Administrative Agent. Such late payment charge represents the reasonable
estimate of the

 

45

 

Borrower, the
Administrative Agent and the Lenders of a fair average compensation for the
loss that may be sustained by the Lenders due to the failure of the Borrower to
make timely payments. Such late charge shall be paid without prejudice to the
right of the Administrative Agent and the Lenders to collect any other amounts
provided herein or in the other Loan Documents to be paid or to exercise any
other rights or remedies under the Loan Documents.

 

(f)            Reserved.

 

3.03         Project-Level
Account. The Borrower shall, and shall cause the Property Manager to (a)
deposit all Rents from the Projects, and all amounts received by the Borrower
or the Property Manager constituting Rent or other revenue or sums of any kind
from the Projects, into the applicable Project-Level Account for such Project
in accordance with the Project-Level Account Security Agreement and (b) upon an
Event of Default, and upon written request of the Administrative Agent, deliver
irrevocable written instructions to all tenants under Leases to deliver all
Rents payable thereunder directly to the applicable Project-Level Account for
such Project. The Borrower shall not maintain any checking, money market or
other deposit accounts for the deposit and holding of any revenues or sums
derived from the ownership or operation of the Projects other than the
Project-Level Account (except for such replacement or additional deposit
accounts in which the Administrative Agent shall have been granted, pursuant to
a written instrument in form and substance satisfactory to the Administrative
Agent, a first priority security interest on the terms provided herein, in
which case the “Project-Level Account” referred to herein shall include such
replacement or additional account), other than (i) accounts into which
funds initially deposited in a Project-Level Account have been, or may be,
transferred in compliance with the Project-Level Account Security Agreement and
(ii) any Cash Trap Account or Controlled Account required hereunder.

 

ARTICLE IIIA

PAYMENTS OF PRINCIPAL AND INTEREST

ON THE WESTWOOD PLACE LOANS

 

The Westwood Place
Borrower hereby promises to pay to the Administrative Agent for the account of
each Lender the principal of such Lender’s outstanding Loans to the Westwood
Place Borrower, together with accrued and unpaid interest (including accrued
and unpaid Additional Interest allocable to such Loans) thereon, any applicable
fees and all other amounts due under the Loan Documents with respect to such
Loans, and to perform all other obligations with respect to such Loans, on
exactly the same terms and conditions as apply to the Loans made to the
Borrower as set forth in Article III, as if, in each case as the context
requires each reference therein to the “Borrower” or any “Borrower Party” or “Borrower
Parties” shall mean the Westwood Place Borrower, each reference therein to the “Loans”
shall mean the Loans made to the Westwood Place Borrower, each reference therein
to the “Commitment” shall mean the Westwood Place Commitment, each reference
therein to any “Project” shall mean the Westwood Place Project, each reference
therein to any Loan Document shall mean the applicable Loan Document to which
the Westwood Place Borrower is a party, if any, and each reference therein to a
“Default” or “Event of Default” shall mean a Westwood Place Default or Westwood
Place Event of Default, respectively. Without limiting the foregoing, the
Westwood Place Borrower 

 

46

 

shall cause all Rents,
revenue and other sums from the Westwood Place Project to be deposited into the
Project-Level Account in accordance with the Project-Level Account Security
Agreement executed by the Westwood Place Borrower, the Administrative Agent (on
behalf of the Lenders) and the depository bank party thereto, which amounts
shall thereafter be governed by the terms of such Project-Level Account
Security Agreement.

 

ARTICLE
IV

PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

 

4.01         Payments.

 

(a)           Payments
by the Borrower. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
under this Agreement, the Notes and any other Loan Document, shall be made in Dollars,
in immediately available funds, without deduction, set-off or counterclaim, to
the Administrative Agent at the Administrative Agent’s Account, not later than
3:00 p.m., New York City time, on the date on which such payment shall
become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).

 

(b)           Application
of Payments.

 

(i)             The Borrower may, at the time of
making each payment under this Agreement, any Note or any other Loan Document
for the account of any Lender (if such payment is not comprised solely of
interest), specify to the Administrative Agent (which shall so notify the
intended recipient(s) thereof) the Loans or other amounts to which such payment
is to be applied (and in the event that the Borrower fails to so specify, or if
an Event of Default exists, the Administrative Agent may apply such payment to
amounts then due to the Lenders, subject to Section 4.02, pro rata
in accordance with their Proportionate Share and, thereafter, may apply any
remaining portion of such payment in such manner as it or the Required Lenders,
subject to Section 4.02, may determine to be appropriate). To the extent
that the Borrower has the right pursuant to this Section 4.01(b) to
designate the obligations to which a payment made by the Borrower under the
Loan Documents is to be applied, the Borrower shall exercise such rights in
such a manner as shall result in the application of such payment to the
designated obligation in a manner that will result in each Lender receiving its
pro rata share of the amount so paid by
the Borrower on account of the designated obligation in proportion to the
respective amounts then due and payable on account of the designated obligation
to all Lenders entitled to payment of the designated obligation. Notwithstanding
the foregoing and to avoid any potential ambiguity between this provision and Section 2.06,
nothing in the foregoing sentence is intended to modify or supersede Section
2.06.

 

(ii)            Unless separate payments
specifically identified for credit to the Loans to the Borrower or the Loans to
the Westwood Place Borrower are made by the Borrower or the Westwood Place
Borrower, the Administrative Agent shall apply all payments made by the
Borrower and the Westwood Place Borrower first to any sums due

 

47

 

and payable by the Westwood Place Borrower, and then
to any sums due and payable by the Borrower; provided, however, that any
payments made as a result of foreclosure upon the Projects or any other
collateral granted by the Borrower following any Event of Default may be
applied by the Administrative Agent to the sums due and payable by the Borrower
or the Westwood Place Borrower (subject to any otherwise applicable provisions
for the application of payments set forth in this Agreement and the other Loan
Documents) in such order and priority as the Administrative Agent may elect in
its discretion.

 

(c)           Payments
Received by the Administrative Agent. Each payment received by the
Administrative Agent under this Agreement, any Note or any other Loan Document
for account of any Lender shall be paid by the Administrative Agent promptly to
such Lender (and in any event, the Administrative Agent shall use commercially
reasonable efforts to pay such sums to such Lender on the same Business Day
such sums are received by the Administrative Agent provided the Administrative
Agent has actually received such sums prior to 3:00 p.m. on such Business Day),
in immediately available funds, for account of such Lender’s Applicable Lending
Office for the Loan or other obligation in respect of which such payment is
made. In the event that the Administrative Agent fails to make such payment to
such Lender within two (2) Business Days of receipt, subject to any delays
resulting from force majeure, then such Lender shall be entitled to interest from
the Administrative Agent at the Federal Funds Rate from the date that such
payment should have been paid by the Administrative Agent to such Lender until
the Administrative Agent makes such payment.

 

(d)           Extension
to Next Business Day. If the due date of any payment under this Agreement
or any Note would otherwise fall on a day that is not a Business Day, such date
shall be extended to the next succeeding Business Day, and interest shall be
payable for any principal so extended for the period of such extension.

 

4.02         Pro
Rata Treatment. Except to the extent otherwise provided herein:  (a) each borrowing from the Lenders
under Section 2.01 shall be made from the Lenders on a pro rata
basis according to the amounts of their respective Commitments; (b) except
as otherwise provided in Section 5.04, Eurodollar Loans having the
same Interest Period shall be allocated pro rata among the Lenders according to
the amounts of their respective Commitments (in the case of the making of
Loans) or their respective Loans (in the case of Conversions and Continuations
of Loans); (c) each payment or prepayment of principal of Loans by the
Borrower shall be made for account of the Lenders on a pro rata basis in
accordance with the respective unpaid principal amounts of the Loans held by
them; and (d) each payment of interest on Loans by the Borrower shall be
made for the account of the Lenders on a pro rata basis in accordance with the
amounts of interest on such Loans then due and payable to the respective
Lenders. Notwithstanding anything to the contrary contained in this Agreement
or in any of the other Loan Documents, (a) all payments received by the Administrative
Agent on account of interest, principal (including, without limitation,
prepayments), fees or other amounts which are required under this Agreement to
be paid to the Lenders pro rata, or in accordance with their respective
Proportionate Shares, shall be paid to the Lenders pro rata in proportion to
the respective amounts of interest, principal, fees or other amounts, as
applicable, then due and payable to all Lenders pursuant to the Loan Documents,
and (b) during the existence of an Event of Default, all payments
received by the Administrative Agent with respect to the Loan shall be applied
as provided in that certain

 

48

 

Co-Lender
Agreement to be entered into by and among the Lenders and the Administrative
Agent, as the same may be Modified from time to time.

 

4.03         Computations.
Interest on all Loans shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable.

 

4.04         Minimum
Amounts. Except for (a) mandatory prepayments made pursuant to Section 2.07,
8.19(g), 10.03(j) or 14.25 of this Agreement or Section
7.08 of the Deed of Trust, (b) Conversions or prepayments made pursuant to Section 5.04,
and (c) prepayments made pursuant to Section 2.06 or Section
2.09 (which shall be governed by such Sections) each borrowing, Conversion,
Continuation and partial prepayment of principal other than made pursuant to Section 2.09
(collectively, “Loan Transactions”) of Loans shall be in an aggregate
amount at least equal to $1,000,000 (Loan Transactions of or into Loans of
different Types or Interest Periods at the same time hereunder shall be deemed
separate Loan Transactions for purposes of the foregoing, one for each Type or
Interest Period); provided that if any Loans or borrowings would
otherwise be in a lesser principal amount for any period, such Loans shall be
Base Rate Loans during such period. Notwithstanding the foregoing, the minimum
amount of $1,000,000 shall not apply to Conversions of lesser amounts into a
tranche of Loans that has (or will have upon such Conversion) an aggregate
principal amount exceeding such minimum amount and one Interest Period.

 

4.05         Certain
Notices. Notices by the Borrower to the Administrative Agent regarding Loan
Transactions and the selection of Types of Loans and/or of the duration of
Interest Periods shall be effective only if received by the Administrative
Agent not later than 3:00 PM, New York City time, on the date which is the
number of calendar days or Business Days, as applicable, prior to the date of
the proposed Loan Transaction specified immediately below:

 

	
  Notice

  	
   

  	
  Number of Days Prior

  
	
   

  	
   

  	
   

  
	
  Optional
  Prepayment

  	
   

  	
  10 calendar days

  
	
   

  	
   

  	
   

  
	
  Conversions
  into, Continuations as, or borrowings in Base Rate Loans

  	
   

  	
  3 Business Days

  
	
   

  	
   

  	
   

  
	
  Conversions
  into, Continuations as, borrowings in, or changes in duration of Interest
  Periods for, Eurodollar Loans

  	
   

  	
  3 Business Days

  (prior to first day of next applicable Interest Period for such Conversion Continuation
  or change)

  

 

Notices
of the selection of Types of Loans and/or of the duration of Interest Periods
shall be irrevocable. Each notice of a Loan Transaction shall specify the
amount (subject to Section 4.04), Type, and Interest Period of such
proposed Loan Transaction, and the date (which shall be a Business Day) of such
proposed Loan Transaction. Notices for Conversions and Continuations shall be
in the form of Exhibit L attached hereto. Each such notice
specifying the duration of an

 

49

 

Interest
Period shall specify the portion of the Loans to which such Interest Period is
to relate. The Administrative Agent shall promptly notify the Lenders of the
contents of each such notice. If the Borrower fails to select (i) the Type of
Loan or (ii) the duration of any Interest Period for any Eurodollar Loan within
the time period (i.e., three (3) Business Days prior to the first day of the
next applicable Interest Period) and otherwise as provided in this Section 4.05,
such Loan (if outstanding as a Eurodollar Loan) will automatically be continued
as a Eurodollar Loan as of the last day of the then current Interest Period for
such Loan, with such Eurodollar Loan having an Interest Period of one month,
and the Borrower shall be deemed to have provided to the Administrative Agent
three (3) Business Days prior to the first day of such Interest Period a duly
completed and unqualified notice requesting such Continuation in the form of Exhibit L.

 

4.06         Non-Receipt
of Funds by the Administrative Agent. Unless the Administrative Agent shall
have been notified by a Lender or the Borrower (each, for purposes of this Section
4.06, a “Payor”) prior to the date on which such Payor is to make
payment to the Administrative Agent of (in the case of a Lender) the proceeds
of a Loan to be made by such Payor hereunder or (in the case of the Borrower) a
payment to the Administrative Agent for the account of one or more of the
Lenders hereunder (such payment being herein called a “Required Payment”),
which notice shall be effective upon receipt, that such Payor does not intend
to make such Required Payment to the Administrative Agent, the Administrative
Agent may assume that such Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient(s) on such date; and, if such Payor has not
in fact made the Required Payment to the Administrative Agent, the recipient(s)
of such payment from the Administrative Agent shall, on demand, repay to the
Administrative Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date (the “Advance
Date”) such amount was so made available by the Administrative Agent until
the date the Administrative Agent recovers such amount at a rate per annum
equal to (a) the Federal Funds Rate for such day in the case of payments
returned to the Administrative Agent by any of the Lenders or (b) the
applicable interest rate due hereunder with respect to payments returned by the
Borrower to the Administrative Agent and, if such recipient(s) shall fail to
promptly make such payment, the Administrative Agent shall be entitled to
recover such amount, on demand, from such Payor, together with interest at the
same rates as aforesaid; provided that if neither the recipient(s) nor
such Payor shall return the Required Payment to the Administrative Agent within
three (3) Business Days (five (5) days in the case the Borrower is the Payor) of
the Advance Date, then, retroactively to the Advance Date, such Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:

 

(i)            if the Required Payment shall
represent a payment to be made by the Borrower to the Administrative Agent for
the benefit of the Lenders, the Borrower and the recipient(s) shall each be
obligated to pay interest retroactively to the Advance Date in respect of the
Required Payment at the Post-Default Rate (without duplication of the
obligation of the Borrower under Section 3.02 to pay interest on the
Required Payment at the Post-Default Rate), it being understood that the return
by the recipient(s) of the Required Payment to the Administrative Agent shall
not limit such obligation of the Borrower under Section 3.02 to pay
interest at the Post-Default Rate in respect of the Required Payment, and it
being further understood that to the extent the Administrative Agent actually
receives from the Borrower any such interest at the Post-Default Rate on

 

50

 

such Required Payment, such amount so received shall
be credited against the amount of interest (if any) payable by the applicable
recipient(s), and

 

(ii)           if the Required Payment shall
represent proceeds of a Loan to be made by the Lenders to the Borrower, such
Payor and the Borrower shall each be obligated retroactively to the Advance
Date to pay interest in respect of the Required Payment pursuant to whichever
of the rates specified in Section 3.02 is applicable to the Type of
such Loan, it being understood that the return by the Borrower of the Required
Payment to the Administrative Agent shall not limit any claim that the Borrower
may have against such Payor in respect of such Required Payment and shall not
relieve such Payor of any obligation it may have hereunder or under any other
Loan Documents to the Borrower and no advance by the Administrative Agent to
the Borrower under this Section 4.06 shall release any Lender of
its obligation to fund such Loan except as set forth in the following sentence.
If any such Lender shall thereafter advance any such Required Payment to the
Administrative Agent, together with interest on such Required Payment as
provided herein, such Required Payment shall be deemed such Lender’s applicable
Loan to the Borrower and shall be advanced by the Administrative Agent to the
Borrower to the extent the Borrower has remitted the Required Payment and such
interest to the Administrative Agent.

 

4.07         Sharing
of Payments, Etc.

 

(a)           Sharing.
If any Lender shall obtain payment of any principal of or interest on any Loan
owing to it or payment of any other amount under this Agreement or any other
Loan Document through the exercise (subject to the provisions of Section
14.10) of any right of set-off, banker’s lien or counterclaim or similar
right or otherwise (other than from the Administrative Agent as provided
herein), and, as a result of such payment, such Lender shall have received a
greater percentage of the principal of or interest on the Loans or such other
amounts then due hereunder or thereunder by the Borrower to such Lender than
the percentage received by any other Lender, it shall promptly purchase from
such other Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Loans or such other amounts,
respectively, owing to such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to time
as shall be equitable, to the end that all the Lenders shall share the benefit
of such excess payment (net of any expenses that may be incurred by such Lender
in obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored. Each
Lender agrees that it shall turn over to the Administrative Agent (for
distribution by the Administrative Agent to the other Lenders in accordance
with the terms of this Agreement) any payment (whether voluntary or
involuntary, through the exercise of any right of setoff or otherwise) on
account of the Loans held by it in excess of its ratable portion of payments on
account of the Loans obtained by all the Lenders.

 

(b)           Consent
by the Borrower. The Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise (subject, as among the Lenders,
to Section 14.10) all rights of set-off, banker’s lien, counterclaim or
similar rights with respect to

 

51

 

such participation as
fully as if such Lender were a direct holder of Loans or other amounts (as the
case may be) owing to such Lender in the amount of such participation.

 

(c)           Rights
of Lenders; Bankruptcy. Nothing contained herein shall require any Lender
to exercise any right of set-off, banker’s lien or counterclaim or similar
right or otherwise or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 4.07 applies, then
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section 4.07 to share in the benefits of any
recovery on such secured claim.

 

ARTICLE IVA

PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

AS AFFECTING THE WESTWOOD PLACE LOANS

 

The provisions set forth
in Article IV (other than the provisions of Section 4.01(b)(ii))
shall be applicable to the Westwood Place Borrower, the Loans made to it, and
the Westwood Place Project, as if, in each case as the context requires, each
reference therein to the “Borrower” or any “Borrower Party” or “Borrower
Parties” shall mean the Westwood Place Borrower, each reference therein to the “Loans”
shall mean the Loans made to the Westwood Place Borrower, each reference therein
to the “Commitment” shall mean the Westwood Place Commitment, each reference
therein to any “Project” shall mean the Westwood Place Project, each reference
therein to any Loan Document shall mean the applicable Loan Document to which
the Westwood Place Borrower is a party, if any, and each reference therein to a
“Default” or “Event of Default” shall mean a Westwood Place Default or Westwood
Place Event of Default, respectively. The provisions of Section 4.01(b)(ii)
shall be binding upon and applicable to the Westwood Place Borrower as written.

 

ARTICLE
V

YIELD PROTECTION, ETC.

 

5.01         Additional
Costs.

 

(a)           Costs
of Making or Maintaining Eurodollar Loans. The Borrower shall pay directly
to each Lender from time to time such amounts as such Lender may determine to
be necessary to compensate such Lender for any costs that such Lender
determines are attributable to its making or maintaining of any Eurodollar
Loans, or its obligation to make any Eurodollar Loans, hereunder, or, subject
to the following provisions of this Article V, any reduction in any
amount receivable by such Lender hereunder in respect of any of such Eurodollar
Loans or such obligation (such increases in costs and reductions in amounts
receivable being herein called “Additional Costs”), provided such
Additional Costs result from any Regulatory Change that:

 

52

 

(i)            shall subject any Lender (or its
Applicable Lending Office for any of such Eurodollar Loans) to any tax, duty or
other charge in respect of such Eurodollar Loans or its Note or changes the
basis of taxation of any amounts payable to such Lender under this Agreement or
its Note in respect of any of such Eurodollar Loans (other than Excluded
Taxes); or

 

(ii)           imposes or Modifies any reserve,
special deposit or similar requirements (other than the Reserve Requirement
utilized in the determination of the Adjusted LIBO Rate for such Eurodollar
Loan) relating to any extensions of credit or other assets of, or any deposits
with or other liabilities of, any Lender (including any of such Eurodollar
Loans or any deposits referred to in the definition of “LIBO Rate” in Section 1.01),
or any commitment of such Lender (including the Commitment of such Lender
hereunder); or

 

(iii)          imposes any other condition affecting
this Agreement or the Note of any Lender (or any of such extensions of credit
or liabilities) or its Commitment.

 

If any
Lender requests compensation from the Borrower under this Section 5.01(a)
or Section 5.01(b), the Borrower may, by notice to such Lender (with a
copy to the Administrative Agent), suspend the obligation of such Lender
thereafter to make or Continue Eurodollar Loans, or to Convert Base Rate Loans
into Eurodollar Loans, until the Regulatory Change giving rise to such request
ceases to be in effect or until the Borrower notifies such Lender that the
Borrower is lifting such suspension (in which case the provisions of Section 5.04
shall be applicable), provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested for so long as
any Eurodollar Loan remains in effect.

 

(b)           Costs
Attributable to Regulatory Change or Risk-Based Capital Guidelines. Without
limiting the effect of the provisions of this Section 5.01 (but without
duplication), the Borrower shall pay to each Lender from time to time on
request such amounts as such Lender may determine to be necessary to compensate
such Lender (or, without duplication, the bank holding company or other legal
entity of which such Lender is a subsidiary) for any costs that it determines
are attributable to the maintenance of its Eurodollar Loans hereunder by such
Lender (or any Applicable Lending Office or such bank holding company or other
legal entity), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) of any Governmental Authority
(i) following any Regulatory Change with respect to such law, regulation,
interpretation, directive or request resulting in such costs or
(ii) implementing any risk-based capital guideline or other requirement of
capital (whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) hereafter issued by any Governmental
Authority implementing at the national level the Basel Accord, in respect of
its Commitment or its Eurodollar Loans (such compensation to include an amount
equal to any reduction of the rate of return on assets or equity of such Lender
(or any Applicable Lending Office or such bank holding company or other legal
entity) to a level below that which such Lender (or any Applicable Lending
Office or such bank holding company or other legal entity) could have achieved
but for such law, regulation, interpretation, directive or request).

 

53

 

(c)           Notification
and Certification. Each Lender shall notify the Borrower of any event
occurring after the date hereof entitling such Lender to compensation under subsections
(a) or (b) of this Section 5.01 (setting forth in
reasonable detail the basis of such determination) as promptly as practicable,
but in any event within sixty (60) days, after such Lender obtains actual
knowledge thereof; provided that (i) if any Lender fails to give
such notice within sixty (60) days after it obtains actual knowledge of such an
event, such Lender shall, with respect to compensation payable pursuant to this
Section 5.01 in respect of any costs resulting from such event, be
entitled to payment under this Section 5.01 only for costs incurred
from and after the date sixty (60) days prior to the date that such Lender does
give such notice and (ii) each Lender shall designate a different
Applicable Lending Office (if applicable) for the Eurodollar Loans of such
Lender affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender. Each Lender shall furnish to
the Borrower a certificate setting forth the basis and amount of each request
by such Lender for compensation under subsection (a) or (b)
of this Section 5.01. Determinations and allocations by any Lender
for purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to subsection (a) or (b) of this Section 5.01,
or of the effect of capital maintained pursuant to subsection (b) of
this Section 5.01, on its costs or rate of return of maintaining
Eurodollar Loans or its obligation to make Eurodollar Loans, or on amounts
receivable by it in respect of Eurodollar Loans, and of the amounts required to
compensate such Lender under this Section 5.01, as set forth in the
certificate of the Lender, shall be prima facie evidence of the accuracy of the
determinations and calculations contained or asserted therein. Notwithstanding
anything to the contrary contained herein, it shall be a condition to the
Borrower’s obligation to pay compensation under subsections (a) or (b)
of this Section 5.01 that such compensation requirements are also
being imposed on substantially all other similar classes or categories of
commercial loans or commitments of such Lender similarly affected by the
Regulatory Change and the other guidelines and requirements referred to in this
Section 5.01.

 

5.02         Limitation
on Eurodollar Loans. Anything herein to the contrary notwithstanding, if,
on or prior to the determination of any LIBO Rate for any Interest Period for any
Eurodollar Loan:

 

(a)           after
making reasonable efforts, the Administrative Agent determines, which
determination shall be conclusive absent manifest error, that quotations of
interest rates for the relevant deposits referred to in the definition of “LIBO
Rate” in Section 1.01 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining rates of
interest for Eurodollar Loans as provided herein; or

 

(b)           the
Administrative Agent determines, which determination shall be conclusive absent
manifest error, that, as a result of circumstances arising after the Closing
Date, the relevant rates of interest referred to in the definition of “LIBO
Rate” in Section 1.01 upon the basis of which the rate of interest
for Eurodollar Loans for such Interest Period is to be determined are not
likely adequately to cover the cost to such Lenders of making or maintaining
Eurodollar Loans for such Interest Period;

 

 then the Administrative Agent shall give the
Borrower and each Lender prompt notice thereof and, so long as such condition
remains in effect, the Lenders shall be under no obligation to

 

54

 

make
additional Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base Rate
Loans into Eurodollar Loans, and the Borrower shall, on the last day(s) of the
then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans in accordance with Sections 2.06 and 2.07
or, in accordance with Section 2.05, Convert such Eurodollar Loans
into Base Rate Loans or other Eurodollar Loans in amounts and maturities which
are still being provided. Notwithstanding the foregoing, (i) if the
applicable conditions under clauses (a) or (b) of this Section
5.02 affect only a portion of the Eurodollar Loans, the balance of the
Eurodollar Loans may continue as Eurodollar Loans and (ii) if the
applicable conditions under clauses (a) and (b) of this Section
5.02 only affect certain Interest Periods, the Borrower, subject to the
terms and conditions of this Agreement, may elect to have Eurodollar Loans with
such other Interest Periods.

 

5.03         Illegality.
Notwithstanding any other provision of this Agreement, if it becomes unlawful
for any Lender or its Applicable Lending Office to honor its obligation to make
or maintain Eurodollar Loans hereunder (and, in the sole opinion of such
Lender, the designation of a different Applicable Lending Office would either
not avoid such unlawfulness or would be disadvantageous to such Lender), then
such Lender shall promptly notify the Borrower thereof (with a copy to the
Administrative Agent) and such Lender’s obligation to make or Continue, or to
Convert portions of its Loan of any other Type into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain Eurodollar
Loans (in which case the provisions of Section 5.04 shall be
applicable).

 

5.04         Treatment
of Affected Loans. If the obligation of any Lender to make Eurodollar Loans
or to Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Sections 5.01 or 5.03, then such
Lender’s Eurodollar Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for Eurodollar Loans
(or, in the case of a Conversion resulting from a circumstance described in Section 5.03,
on such earlier date as such Lender may specify to the Borrower with a copy to
the Administrative Agent) and, unless and until either (a) such Lender gives
notice as provided below that the circumstances specified in Sections 5.01
or 5.03 that gave rise to such Conversion no longer exist or (b)
the Borrower, in the case of Section 5.01, ends any suspension by the
Borrower:

 

(a)           to
the extent that such Lender’s Eurodollar Loans have been so Converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender’s Eurodollar Loans shall be applied instead to its Base Rate Loans; and

 

(b)           all
portions of its Loan that would otherwise be made or Continued by such Lender
as Eurodollar Loans shall be made or Continued instead as Base Rate Loans, and
all Base Rate Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.

 

If such
Lender gives notice to the Borrower with a copy to the Administrative Agent
that the circumstances specified in Section 5.01 or 5.03
that gave rise to the Conversion of such Lender’s Eurodollar Loans pursuant to
this Section 5.04 no longer exist (which notice such Lender agrees
to give promptly upon such circumstances ceasing to exist) or the Borrower
terminates its applicable suspension at a time when Eurodollar Loans made by
other Lenders are outstanding,

 

55

 

such
Lender’s Base Rate Loans shall be automatically Converted, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect thereto, all Base
Rate and Eurodollar Loans are allocated among the Lenders ratably (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.

 

5.05         Compensation.
The Borrower shall pay to the Administrative Agent for account of each Lender,
upon the request of such Lender through the Administrative Agent, such amount
as shall be sufficient to compensate it for any loss, cost or expense that such
Lender reasonably determines is attributable to:

 

(a)           any
payment, mandatory or optional prepayment or Conversion of a Eurodollar Loan
made by such Lender for any reason (including the acceleration of the Loans
pursuant to Article XII) on a date other than the last day of the
Interest Period for such Loan;

 

(b)           any
failure by the Borrower for any reason to prepay a Eurodollar Loan pursuant to
a notice of prepayment given in accordance with Section 2.06 (or any
notice timely given postponing the date for prepayment given in accordance with
Section 2.08), unless such notice is timely revoked pursuant to a notice
of revocation given in accordance with Section 2.08; or

 

(c)           the
assignment of any Eurodollar Loan other than on the last day of the applicable
Interest Period as a result of a request by the Borrower pursuant to Section
5.07.

 

Without
limiting the effect of the preceding provisions, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of
interest that otherwise would have accrued on the principal amount so paid,
prepaid, Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan that would have commenced on the date
specified for such borrowing) at the applicable Adjusted LIBO Rate for such
Loan provided for herein over (ii) the amount of interest that such
Lender would earn on such principal amount for such period if such Lender would
have bid in the London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities comparable to
such period (as reasonably determined by such Lender), or if such Lender shall
not, or shall cease to, make such bids, the equivalent rate, as reasonably
determined by such Lender, derived from Page 3750 of the Dow Jones Markets
Service (Telerate) or other publicly available source as described in the
definition of “LIBO Rate” in Section 1.01, plus, in the case of Section
5.05(c), the amount of interest for such period paid to such Lender
pursuant to Section 5.07. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section
5.05 shall be delivered to the Borrower and shall be prima facie evidence
of the accuracy of the determinations and calculations contained or asserted
therein. The Borrower shall pay such Lender the amount shown as due on any such
certificate within ten (10) days after receipt thereof. Any payment due to any
of the Lenders pursuant to this Section 5.05 shall be deemed additional
interest under such Lender’s Note.

 

56

 

5.06         Taxes.

 

(a)           Payments
Free of Taxes. Any and all payments by or on account of any obligation of
the Borrower hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.06) the
Administrative Agent and each Lender (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b)           Payment
of Other Taxes by the Borrower. In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

(c)           Indemnification
by the Borrower. The Borrower shall indemnify the Administrative Agent and
each Lender, within ten (10) days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent
or such Lender, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section 5.06) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be prima
facie evidence of the accuracy of the determinations and calculations contained
or asserted therein.

 

(d)           Evidence
of Payments. As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

(e)           Foreign
Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate. Until such
documentation is provided, the Borrower shall be entitled to take all actions
that are required to comply with Applicable Laws with respect to payments
payable hereunder on account of Loans made to the Borrower by any Foreign
Lender who has not complied with the requirements of this Section 5.06(e),
and such actions shall not constitute a Default or an Event of Default.

 

57

 

(f)            Refunds.
If the Administrative Agent or a Lender determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 5.06, provided no Major
Default or Event of Default exists, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 5.06 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section 5.06(f) shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

5.07         Replacement
of Lenders. If any Lender requests compensation pursuant to Section 5.01
or 5.06, or any Lender’s obligation to Continue Loans of any Type, or to
Convert Loans of any Type into the other Type of Loan, shall be suspended
pursuant to Section 5.01 or 5.03 (any such Lender requesting
such compensation, or whose obligations are so suspended, being herein called a
“Requesting Lender”), the Borrower, upon five (5) Business Days notice
to such Requesting Lender and the Administrative Agent, may require that such
Requesting Lender transfer all of its right, title and interest under this
Agreement and such Requesting Lender’s Note and its interest in the other Loan
Documents to an Eligible Assignee (a “Proposed Lender”) identified by
the Borrower that is satisfactory to the Administrative Agent in its sole
discretion (i) if such Proposed Lender agrees to assume all of the
obligations of such Requesting Lender hereunder, and to purchase all of such
Requesting Lender’s Loan hereunder for consideration equal to the aggregate
outstanding principal amount of such Requesting Lender’s Loan, together with
interest thereon to the date of such purchase (to the extent not paid by the
Borrower), and satisfactory arrangements are made for payment to such
Requesting Lender of all other amounts accrued and payable hereunder to such
Requesting Lender as of the date of such transfer (including any fees accrued
hereunder and any amounts that would be payable under Section 5.05
as if all of such Requesting Lender’s Loan were being prepaid in full on such
date) and (ii) if such Requesting Lender has requested compensation
pursuant to Section 5.01 or 5.06, such Proposed Lender’s
aggregate requested compensation, if any, pursuant to Section 5.01
or 5.06 with respect to such Requesting Lender’s Loan is lower than that
of the Requesting Lender. Subject to the provisions of Section 14.07(b),
such Proposed Lender shall be a “Lender” for all purposes hereunder. Without
prejudice to the survival of any other agreement of the Borrower hereunder the
agreements of the Borrower contained in Sections 5.01, 5.06,
14.03 and 14.04 (without duplication of any payments made to such
Requesting Lender by the Borrower or the Proposed Lender) shall survive for the
benefit of such Requesting Lender under this Section 5.07 with
respect to the time prior to such replacement.

 

58

 

ARTICLE VA

YIELD PROTECTION, ETC. AS AFFECTING THE

WESTWOOD PLACE LOANS

 

The provisions set forth
in Article V shall be applicable to the Westwood Place Borrower, the
Loans made to it, and the Westwood Place Project, as if, in each case as the
context requires, each reference therein to the “Borrower” or any “Borrower
Party” or “Borrower Parties” shall mean the Westwood Place Borrower, each
reference therein to the “Loans” shall mean the Loans made to the Westwood
Place Borrower, each reference therein to the “Commitment” shall mean the
Westwood Place Commitment, each reference therein to any “Project” shall mean
the Westwood Place Project, each reference therein to any Loan Document shall
mean the applicable Loan Document to which the Westwood Place Borrower is a
party, if any, and each reference therein to a “Default” or “Event of Default”
shall mean a Westwood Place Default or Westwood Place Event of Default,
respectively.

 

ARTICLE
VI

CONDITIONS PRECEDENT

 

6.01         Conditions
Precedent to Effectiveness of Loan Commitments. The effectiveness of the
Commitments and the obligation of the Lenders to make the Loans are subject to
the conditions precedent that, on or prior to the Closing Date, (i) the
Administrative Agent shall have received each of the documents (duly executed
and completed by the part(y)(ies) thereto and acknowledged when applicable)
referred to below in this Section 6.01, (ii) each of the other
conditions listed below in this Section 6.01 is satisfied, the
satisfaction of each of such conditions to be satisfactory to the
Administrative Agent (and to the extent specified below, to each Lender) in
form and substance (or any such condition shall have been waived in accordance
with Section 14.05), (iii) all of the representations and
warranties of the Borrower and the Westwood Place Borrower (without giving
effect to any qualification therein which limits any such representations and
warranties to the “knowledge” or “best knowledge” of the Borrower, the Westwood
Place Borrower or any other Borrower Party) shall be true and correct on the
Closing Date, (iv) the Liens granted by the Security Documents shall have
attached and been perfected, with the priority as required pursuant to the
terms hereof or thereof (or, in the case of the Liens encumbering the Projects
and the Westwood Place Project, the Title Policies insuring the effectiveness
and priority of such Liens shall have been unconditionally delivered to the
Administrative Agent in accordance with the closing instructions delivered on
its behalf), and (v) no Default or Event of Default shall exist or shall result
therefrom.

 

(a)           Agreement.
From each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.

 

(b)           Notes.
The Notes for each Lender.

 

(c)           Deed
of Trust. Each Deed of Trust, in form for recording.

 

(d)           Environmental
Indemnity. The Environmental Indemnity.

 

59

 

(e)           Project-Level
Account Security Agreement. The Project-Level Account Security Agreement.

 

(f)            General
Assignment. The General Assignment.

 

(g)           Property
Manager’s Consent. The Property Manager’s Consent.

 

(h)           Other
Loan Documents. The Guarantor Documents and all other Loan Documents.

 

(i)            Opinion
of Counsel to the Borrower Parties. A favorable written opinion, dated the
Closing Date, of Cox, Castle & Nicholson LLP, counsel to the Borrower
and furnishing such opinions at the Borrower’s request on behalf of the other
Borrower Parties, and covering such matters relating to the Borrower Parties,
this Agreement, the other Loan Documents, and the Transactions as the
Administrative Agent shall reasonably request. The Borrower hereby requests
such counsel to deliver such opinion to the Lenders and the Administrative
Agent.

 

(j)            Organizational
Documents. Copies of (i) the Certificate of Incorporation, Certificate
of Formation, Certificate of Limited Partnership or similar formation document
of each of the Borrower Parties, certified by the Secretary of State of the
state of formation of such Person as of a recent date, (ii) the other
Organizational Documents of each of the Borrower Parties certified by any
Authorized Officer on behalf of such Borrower Party, (iii) the applicable
resolutions of each of the Borrower Parties authorizing the execution and
delivery of the Loan Documents to which they are a party, in each case
certified by an Authorized Officer on behalf of such Borrower Party as of the
date of this Agreement as being accurate and complete, all in form and
substance satisfactory to the Administrative Agent and its counsel,
(iv) certificates signed by an Authorized Officer on behalf of the
applicable Person certifying the name, incumbency and signature of each
individual authorized to execute the Loan Documents to which such Person is a
party and the other documents or certificates to be delivered pursuant hereto
or thereto, on which the Administrative Agent and the Lenders may conclusively
rely unless a revised certificate is similarly so delivered in the future, and
(v) good standing certificates with respect to each Borrower Party that is
organized under the laws of any state of the United States of America from such
state and good standing certificates and authority to conduct business with
respect to the Borrower, the Borrower’s Member and the Borrower’s Manager from
the State of California.

 

(k)           Title
Insurance; Priority. An ALTA policy or policies (or pro forma policy or
policies) of title insurance for each Project satisfactory to the
Administrative Agent (collectively, the “Title Policy”), together with
evidence of the payment of all premiums due thereon, issued by the Title Company
(i) each insuring the Administrative Agent for the benefit of the Lenders in an
amount equal to the aggregate amount of the Commitments (to the extent
advanced) in effect on the Closing Date (with a tie-in endorsement satisfactory
to the Administrative Agent) that the Borrower is lawfully seized and possessed
of a valid and subsisting fee simple (or other applicable) interest in the
Projects subject to no Liens other than Permitted Title Exceptions and
(ii) providing such other affirmative insurance and endorsements as the
Administrative Agent may require in each case as approved by the Administrative
Agent. In addition, the Borrower shall have paid to the Title Company all
expenses and premiums of the

 

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Title Company in
connection with the issuance of such policies and all recording and filing fees
payable in connection with recording the Deeds of Trust and the filing of the
Uniform Commercial Code financing statements related thereto in the appropriate
offices.

 

(l)            Survey.
An “as-built” survey of each Project, each satisfactory to the Administrative
Agent in form and content and made by a registered land surveyor satisfactory
to the Administrative Agent, each survey showing, among other things through the
use of course bearings and distances, (i) all easements and roads or
rights of way (including all access to public roads) and setback lines, if any,
affecting the Improvements and that the same are unobstructed or any such
obstructions are acceptable to the Administrative Agent; (ii) the
dimensions of all existing buildings and distance of all material Improvements
from the lot lines; (iii) no encroachments by improvements located on
adjoining property that are not acceptable to the Administrative Agent; and
(iv) such additional information which may be reasonably required by the
Administrative Agent. Each said survey shall be dated a date reasonably
satisfactory to the Administrative Agent, bear a proper certificate
substantially in the form of Exhibit M attached hereto by the
surveyor in favor of the Administrative Agent (on behalf of the Lenders) and
the Title Company and include the legal description of the Project.

 

(m)          Certificates
of Occupancy. Copies of permanent and unconditional certificates of
occupancy permitting the fully functioning operation and occupancy of the
Projects and of such other permits necessary for the use and operation of the
Projects issued by the respective Governmental Authorities having jurisdiction
over the Projects, together with such other evidence as may be requested by the
Administrative Agent with respect to the compliance of the Projects with zoning
requirements.

 

(n)           Insurance.
A copy of the insurance policies required by Section 8.05 or
certificates of insurance with respect thereto, such policies or certificates,
as the case may be, to be in form and substance, and issued by companies,
acceptable to the Administrative Agent and otherwise in compliance with the
terms of Section 8.05, together with evidence of the payment of all
premiums therefor.

 

(o)           Environmental
Report. The Environmental Reports.

 

(p)           Leases.
(i) An affidavit (the “Leasing Affidavit”) of an Authorized Officer
of the Borrower certifying that except as disclosed in the estoppel
certificates delivered to the Administrative Agent prior to the Closing Date,
that certain Douglas, Emmett & Company Delinquency/Aging Report
(Summarized) dated 7/20/2005 provided to the Administrative Agent, or the rent
rolls delivered to the Administrative Agent pursuant to Section 7.22,
(A) each tenant lease listed in the Leasing Affidavit is in full force and
effect; (B) the tenant lease summaries provided by the Borrower to the
Administrative Agent are true and correct and, as to all matters contained
therein relating to rent, term, termination rights, options to renew, extend or
expand, rights of first refusal or offer, tenant improvement allowances,
security deposits and other credit enhancements, insurance, tax and operating
expense recovery, and obligations with respect to subordination,
non-disturbance and attornment, complete in all material respects, and such
summaries do not fail to disclose any material term of any Lease which would adversely
affect the obligation of the tenant thereunder to pay rent or perform any of
its other material obligations for the entire term thereof consistent with the
terms disclosed in such summary and

 

61

 

the rent rolls delivered
to the Administrative Agent pursuant to Section 7.22; (C) no
defaults exist under any of the Leases (other than the Major Leases) by any
party (including any guarantor) thereto that, individually or in the aggregate
with respect to all such defaults, would result in a Material Adverse Effect
and, to the knowledge of the Borrower, no material default exists under any of
the Major Leases; and (D) to the Borrower’s knowledge, no event which
would result in a material adverse change in the financial condition,
operations or business of one or more tenants under Major Leases has occurred
which the Borrower has determined would adversely affect the ability of such
tenant to pay its rent and perform its other material obligations under such
Major Lease and (ii) the standard office lease form and the standard
retail lease form (both as approved by the Administrative Agent) to be used for
the Projects.

 

(q)           Estoppels.
 Estoppel certificates in form and substance satisfactory to the
Administrative Agent from tenants covering at least seventy-five percent (75%)
of all the leased space in the Projects, except to the extent that the
Administrative Agent agrees in writing to defer the receipt of any estoppel
certificate to a date subsequent to the Closing Date, in which case the
Borrower shall use commercially reasonable efforts to obtain such deferred
estoppel certificates as promptly as possible following the Closing Date. For
purposes of this requirement, it is agreed that the form tenant estoppels
required by any applicable Approved Lease shall be acceptable to the Administrative
Agent.

 

(r)            SNDA
Agreements. The Borrower will distribute and use commercially reasonable
efforts to obtain the SNDA Agreements duly executed by each tenant under a
Major Lease.

 

(s)           Non-Foreign
Status. A certificate by an Authorized Officer certifying the Borrower’s and
the Westwood Place Borrower’s tax identification number and the fact that neither
the Borrower nor the Westwood Place Borrower is a foreign person under the
Code.

 

(t)            UCC
Searches. Uniform Commercial Code searches with respect to the Borrower, the
Westwood Place Borrower, the Borrower’s Member and the Borrower’s Manager as
required by the Administrative Agent.

 

(u)           Appraisal.
The Appraisals indicating an “as-is” value for each of the Projects and the
Westwood Place Project such that the Allocated Loan Amount for each Project and
the Westwood Place Project shall not exceed sixty percent (60%) of the
Appraised Value of such Project or the Westwood Place Project, respectively.

 

(v)           Property
Management and Leasing Agreements. The Property Management Agreement and
all brokerage and/or leasing agreements affecting the Projects and certified by
an Authorized Officer to be true, correct and complete in all respects.

 

(w)          Financial
Statements. Copies of the most recent audited and unaudited annual and
quarterly financial statements of the Borrower’s Member, and a certificate
dated the Closing Date and signed by an Authorized Officer on behalf of the
Borrower’s Member stating that (i) such financial statements are true,
complete and correct in all material respects and (ii) no event that could
reasonably be expected to have a Material Adverse Effect has occurred since the

 

62

 

date of such financial
statements, all of the foregoing to be satisfactory to the Administrative Agent
and each Lender in their reasonable discretion.

 

(x)            Approved
Annual Budget. A copy of the Annual Budget for each Project for the current
calendar year.

 

(y)           Property
Condition Report. A survey of the physical condition of the Projects
prepared by a licensed engineer selected by the Administrative Agent and in
accordance with the Administrative Agent’s scope.

 

(z)            Project-Level
Accounts. The Project-Level Accounts shall have been established pursuant
to the terms of this Agreement and any other Loan Document.

 

(aa)         Seismic
Report. A seismic report for each Project prepared by a firm of licensed
engineers selected by the Administrative Agent and prepared in accordance with
the Administrative Agent’s scope for such reports and otherwise acceptable to
the Administrative Agent in all respects.

 

(bb)         Fees
and Expenses. The Borrower shall have paid (i) all fees then due and payable
to the Administrative Agent pursuant to the Fee Letter, (ii) any other
fees then due to the Administrative Agent, Eurohypo or the Arranger and
(iii) any fees and expenses due to the Administrative Agent or the
Arranger pursuant to Section 14.03, including the reasonable fees and
expenses of Morrison & Foerster LLP, counsel to the Administrative
Agent and Eurohypo.

 

(cc)         Other
Documents. Such other documents as the Administrative Agent may reasonably
request.

 

In addition, all
conditions precedent applicable to the effectiveness of the Westwood Place
Commitment and the obligations of the Lenders to make the Loans to the Westwood
Place Borrower as set forth in Article VIA shall have been satisfied.

 

ARTICLE VIA

CONDITIONS PRECEDENT TO THE

WESTWOOD PLACE LOANS

 

The Westwood Place
Borrower hereby acknowledges that the effectiveness of the Westwood Place
Commitment and the obligations of the Lenders to make the Loans to the Westwood
Place Borrower are subject to the conditions precedent which are exactly the
same as those which apply to the effectiveness of the Commitment and the
obligations of the Lenders to make the Loans to the Borrower as set forth in Article
VI, as if, in each case to the extent the context requires, each reference
therein to the “Borrower” or any “Borrower Party” or “Borrower Parties” shall
mean the Westwood Place Borrower, each reference therein to the “Loans” shall
mean the Loans to be made to the Westwood Place Borrower, each reference
therein to the “Commitment” shall mean the Westwood Place Commitment, each
reference therein to any “Project” shall mean the Westwood Place Project, each
reference therein to any Loan Document shall mean the applicable Loan Document
to which the Westwood Place Borrower is a party, if

 

63

 

any, and each reference
therein to a “Default” or “Event of Default” shall mean a Westwood Place
Default or Westwood Place Event of Default, respectively; provided,  however,
the Westwood Place Borrower shall not be required to satisfy the condition set
forth in Section 6.01(w) so long as the Westwood Place Borrower is
consolidated with the Borrower on the Borrower’s financial statements in
accordance with GAAP; the fees payable pursuant to Section 6.01(bb) by
the Borrower thereunder and by the Westwood Place Borrower pursuant to this Article
VIA shall be based upon the aggregate of the Loans and Commitments made or
to be made to the Borrower and the Westwood Place Borrower; and the following
additional conditions precedent shall apply to the effectiveness of the
Westwood Place Commitment and the obligations of the Lenders to make the Loans to
the Westwood Place Borrower:  all
conditions precedent applicable to the effectiveness of the Commitment and the
obligations of the Lenders to make the Loans to the Borrower as set forth in Article
VI shall have been satisfied.

 

ARTICLE
VII

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the
Administrative Agent and the Lenders as of the date hereof that:

 

7.01         Organization;
Powers. Each of the Borrower Parties is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, has
all requisite power and authority to carry on its business as now conducted
and, except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required. The Borrower Parties are each qualified to do
business and in good standing in the State of California.

 

7.02         Authorization;
Enforceability. The Transactions applicable to each Borrower Party are
within such Borrower Party’s organizational powers and have been duly
authorized by all necessary organizational action under their respective Organizational
Documents. This Agreement and the other Loan Documents have been duly executed
and delivered by the Borrower Parties party thereto and each of the Loan
Documents to which a Borrower Party is a party when delivered will constitute,
a legal, valid and binding obligation of the applicable Borrower Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

7.03         Government
Approvals; No Conflicts. The Transactions (a) do not require any Government
Approvals of, registration or filing with, or any other action by, any
Governmental Authority, except for (i) such as have been obtained or made and
are in full force and effect and (ii) filings and recordings in respect of the
Liens created pursuant to the Security Documents, (b) will not violate any
Applicable Law applicable to the Borrower Parties or the Organizational
Documents of any of the Borrower Parties, (c) will not violate or result in a
default under any material indenture, agreement or other instrument binding
upon any of the

 

64

 

Borrower Parties,
or give rise to a right thereunder to require any payment to be made by any of
the Borrower Parties, and (d) except for the Liens created pursuant to the
Security Documents, will not result in the creation or imposition of any Lien
on any asset of any of the Borrower Parties.

 

7.04         Financial
Condition. The Borrower has heretofore furnished to the Administrative
Agent certain financial statements of the Borrower’s Member. All such financial
statements are complete and correct in all material respects and fairly present
the financial condition of Borrower’s Member, as of the dates of such financial
statements, all in accordance with GAAP. Each of the Borrower and Borrower’s
Member, on the date hereof, does not have any Indebtedness (other than security
deposits and tenant improvement allowances under the Leases that are described
in the tenant lease summaries provided by the Borrower to the Administrative
Agent and that are in amounts and on terms consistent with market terms and in
the ordinary course of business), material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in said financial statements as of said dates and
except for Real Estate Taxes and Other Charges that are not yet delinquent. Since
the applicable dates of such financial statements, except as disclosed in Schedule
7.04 attached hereto, there has been no event that could reasonably be
expected to have a Material Adverse Effect.

 

7.05         Litigation.
Except as disclosed in Schedule 7.05 hereto, there are no legal or
arbitral proceedings, or any proceedings by or before any Governmental Authority
or agency of which the Borrower, Borrower’s Member or Borrower’s Manager has
received written notice, now pending or (to the knowledge of the Borrower)
threatened in writing against the Borrower, the Projects, the Borrower’s Member
or Borrower’s Manager except for those which (a) (subject to applicable
deductibles or self-insurance) are fully covered by insurance maintained by or
for the Borrower, the Borrower’s Member or the Borrower’s Manager or (b) involve
uninsured claims that do not exceed $75,000 individually, or in the aggregate
for all such claims.

 

7.06         ERISA.
Neither the Borrower nor Borrower’s Member has established any Plan which would
cause the Borrower or the Borrower’s Member to be subject to ERISA and none of
the Borrower’s or the Borrower’s Member’s assets constitutes or will constitute
“plan assets” of one or more Plans. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect. Each Plan
established by a Borrower Party and, to the knowledge of the Borrower Parties,
each of its ERISA Affiliates and each Multiemployer Plan, is in compliance
with, the applicable provisions of ERISA, the Code and any other Applicable
Law.

 

7.07         Taxes.
Each of the Borrower Parties has timely filed or timely caused to be filed (or
obtained effective extensions for filing) all tax returns and reports required
to have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except Taxes that are being contested in good faith by
appropriate proceedings and (a) for which such Borrower Party has set aside on
its books adequate reserves in accordance with GAAP or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

 

65

 

7.08         Investment
and Holding Company Status. None of the Borrower Parties is (a) an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a “holding company”, or an “affiliate” of a “holding company”
or a “subsidiary company” of a “holding company”, as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.

 

7.09         Environmental
Matters. Except for matters expressly and specifically set forth in the
Environmental Reports or the Property Condition Reports or matters disclosed in
Schedule 7.09 or Schedule 8.11 attached hereto, to the Borrower’s
knowledge:

 

(a)           The
Borrower and each Project is in compliance with all applicable Environmental
Laws, except where the failure to comply with such laws is not reasonably
likely to result in a Material Adverse Effect.

 

(b)           There
is no Environmental Claim of which the Borrower has received written notice
pending, or to the Borrower’s knowledge, threatened in writing, and no
penalties arising under Environmental Laws have been assessed, against the
Borrower, any Project or, to the Borrower’s knowledge, against any Person whose
liability for any Environmental Claim the Borrower or the Borrower’s Member has
or may have retained or assumed either contractually or by operation of law,
and the Borrower has received no written notice of any investigation or review
which is pending or, to the knowledge of the Borrower, threatened in writing by
any Governmental Authority, citizens group, employee or other Person with
respect to any alleged failure by the Borrower, the Borrower’s Member or any
Project to have any environmental, health or safety permit, license or other
authorization required under, or to otherwise comply with, any Environmental
Law or with respect to any alleged liability of the Borrower or the Borrower’s
Member for any Use or Release of any Hazardous Substances.

 

(c)           There
have been no past, and there are no present, Releases of any Hazardous
Substance that could reasonably be anticipated to form the basis of any
Environmental Claim against the Borrower, the Borrower’s Member, any Project
or, to the knowledge of the Borrower, against any Person whose liability for
any Environmental Claim the Borrower or the Borrower’s Member has or may have
retained or assumed either contractually or by operation of law.

 

(d)           To
the Borrower’s knowledge, there is no Release of Hazardous Substances migrating
to any Project which could require Remediation or require the Borrower to
provide notice to any Governmental Authority.

 

(e)           There
is not present at, on, in or under any Project, PCB-containing equipment,
asbestos or asbestos containing materials, underground storage tanks or surface
impoundments for Hazardous Substances, lead in drinking water (except in
concentrations that comply with all Environmental Laws), or lead-based paint
(except in compliance with all applicable Environmental Laws).

 

(f)            No
Liens are presently recorded with the appropriate land records under or
pursuant to any Environmental Law with respect to any Project and, to the
Borrower’s

 

66

 

knowledge no Governmental
Authority has been taking or is in the process of taking any action that could
subject any Project to Liens under any Environmental Law.

 

(g)           The
Borrower has provided to the Administrative Agent’s environmental consultant
prior to the Closing Date true and correct copies of all materials,
environmental reports and other documents pertaining to the Projects requested
by the consultant and in the Borrower’s possession or control.

 

7.10         Organizational
Structure. The Borrower has heretofore delivered to the Administrative
Agent a true and complete copy of the Organizational Documents of each Borrower
Party. The sole member of the Borrower on the date hereof is the Borrower’s Member.
The sole manager of Borrower and general partner of Borrower’s Member on the
date hereof is Borrower’s Manager.

 

7.11         Subsidiaries.
The Borrower’s Member has no Subsidiaries except for Borrower and the
Westwood Place Borrower and those specifically disclosed on Schedule 7.11.
No other Borrower Party has any Subsidiaries except for those specifically
disclosed on Schedule 7.11.

 

7.12         Title.
On the Closing Date, the Borrower will own and on such date will have good,
indefeasible and insurable fee simple title to the portion of the Projects
consisting of real property free and clear of all Liens, other than Permitted
Title Exceptions. On the Closing Date, the Borrower will own or (in compliance
with Section 9.04(d)) lease and will have good title to all other
portions of the Project free and clear of all Liens, other than Permitted Title
Exceptions and rights of equipment lessors under equipment leases currently in effect
which comply with the requirements set forth in Sections 9.02(h) and 9.04(d).
There are no outstanding options to purchase or rights of first refusal to
purchase affecting the Projects.

 

7.13         No Bankruptcy Filing. Neither
the Borrower nor the Borrower’s Member 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, and neither
the Borrower nor Borrower’s Member has knowledge of any Person contemplating
the filing of any such petition against the Borrower, the Borrower’s Member or
the Borrower’s Manager.

 

7.14         Executive
Offices; Places of Organization. The location of the Borrower’s, the
Borrower’s Member’s and the Borrower’s Manager’s principal place of business
and chief executive office is the address identified in the “Address for
Notices” area beneath the Borrower’s name on the Borrower’s signature page to
this Agreement, except to the extent changed in accordance with Section 9.07.
The Borrower was organized in the State of Delaware, and the Borrower’s Member
and the Borrower’s Manager were organized in the State of California.

 

7.15         Compliance;
Government Approvals. Except as expressly set forth in the Property
Condition Report for each Project, the Environmental Reports, or the seismic
reports delivered for the Projects pursuant to Section 6.01(aa), the
Borrower, each Project and the Borrower’s use thereof and operations thereat
comply in all material respects with all Applicable Laws. All material
Government Approvals necessary under Applicable Law in connection with

 

67

 

the operation of
the Projects as contemplated by the Loan Documents have been duly obtained, are
in full force and effect, are not subject to appeal, are held in the name of
the Borrower (or Borrower’s Member for the benefit of the Borrower) and are
free from conditions or requirements compliance with which could reasonably be
expected to have a Material Adverse Effect or which the Borrower does not
reasonably expect to be able to satisfy. To the best knowledge of the Borrower,
there is no proceeding pending or threatened in writing that seeks, or may
reasonably be expected, to rescind, terminate, Modify or suspend any such
Government Approval. Except for business licenses and other licenses or permits
that are not specifically applicable to the Projects, the Borrower has no reason
to believe that the Administrative Agent, acting for the benefit of the
Lenders, will not be entitled, without undue expense or delay, to the benefit
of each such Government Approval upon the exercise of remedies under the
Security Documents.

 

7.16         Condemnation;
Casualty. To the Borrower’s knowledge, no Taking has been commenced or is
presently contemplated with respect to all or any portion of any Project or for
the relocation of roadways providing access to any Project. No Casualty Event
of any material nature that has not been substantially repaired has occurred
with respect to any Project.

 

7.17         Utilities
and Public Access; No Shared Facilities. Each Project has adequate rights
of access to public ways and is served by adequate electric, gas, water, sewer,
sanitary sewer and storm drain facilities. All public utilities necessary to
the use and enjoyment of each Project as intended to be used and enjoyed are located
in the public right-of-way abutting each Project except as otherwise shown on
the survey of such Project provided to the Administrative Agent.

 

7.18         Solvency.
On the Closing Date and after and giving effect to the Loans occurring on the
Closing Date, and the disbursement of the proceeds of such Loans pursuant to
the Borrower’s instructions, each Borrower Party is and will be Solvent.

 

7.19         Foreign
Person. Neither the Borrower nor Borrower’s Member is a “foreign person”
within the meaning of Section 1445(f)(3) of the Code.

 

7.20         No
Joint Assessment; Separate Lots. The Borrower has not suffered, permitted
or initiated the joint assessment of any Project with any other real property
constituting a separate tax lot.

 

7.21         Security
Interests and Liens. The Security Documents create (and upon recordation of
the Deeds of Trust, filing of the applicable financing statements in the
appropriate filing offices and the execution and delivery by the Depository
Bank of control agreements with respect to any pledged deposit accounts there
will be perfected as to any portion of such collateral consisting of the
deposit account itself and the securities entitlements thereto), as security
for the Obligations, valid, enforceable, perfected and first priority security
interests in and Liens on all of the respective collateral intended to be
covered thereunder, in favor of the Administrative Agent as administrative
agent for the ratable benefit of the Lenders, subject to no Liens other than
the Permitted Title Exceptions and rights of equipment lessors under equipment
leases currently in effect which comply with the requirements set forth in Sections
9.02(h) and 9.04(d), except as enforceability may be limited by
applicable insolvency, bankruptcy,

 

68

 

reorganization,
moratorium or other laws affecting creditors’ rights generally, or general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at law. Other than in connection with any future change in the
Borrower’s name or the location in which the Borrower is organized or
registered, no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than the filing of continuation statements and
Notices of Intent to Preserve Security Interests in accordance with the Uniform
Commercial Code and the California Civil Code. A financing statement covering all
property covered by any Security Document that is subject to a Uniform
Commercial Code financing statement has been filed and/or recorded, as
appropriate, (or irrevocably delivered to the Administrative Agent or a title
agent for such recordation or filing) in all places necessary to perfect a
valid first priority security interest with respect to the rights and property
that are the subject of such Security Document to the extent governed by the
Uniform Commercial Code and to the extent such security can be perfected by
such filing.

 

7.22         Leases.
Except as disclosed in the estoppel certificates delivered to the
Administrative Agent prior to the Closing Date, in that certain Douglas, Emmett
& Company Delinquency/Aging Report (Summarized) dated 7/20/2005 provided to
the Administrative Agent prior to the Closing Date, or (as to items (2) through
(10) below) the rent rolls for each Project attached hereto as Schedule 7.22,
with respect to the Leases (which term, for the purposes of this Section 7.22
is limited to tenant leases): (1) the rent rolls attached hereto as Schedule
7.22 are true, correct and complete and the Leases referred to thereon are
all valid and in full force and effect; (2) the Leases (including
Modifications thereto) are in writing, and there are no oral agreements with
respect thereto; (3) the copies of each of the Leases (if any) delivered
to the Administrative Agent are true, correct and complete in all material
respects and have not been Modified (or further Modified); (4) the lease
summaries delivered to the Administrative Agent are true and correct in all
material respects and, as to all matters contained therein relating to rent,
term, termination rights, options to renew, extend or expand, rights of first
refusal or offer, tenant improvement allowances, security deposits and other
credit enhancements, insurance, tax and operating expense recovery, and
obligations with respect to subordination, non-disturbance and attornment,
complete in all material respects, and such summaries do not fail to disclose
any material term of any Lease which would materially impact the obligation of
the tenant thereunder to pay rent or perform any of its other material
obligations for the entire term thereof as disclosed in such summary and the
rent rolls attached hereto as Schedule 7.22; (5) to the Borrower’s knowledge,
no defaults exist under any of the Leases (other than the Major Leases) by any
party (including any guarantor) thereto that, individually or in the aggregate
with respect to all such defaults would result in a Material Adverse Effect
and, to the knowledge of the Borrower, no material default exists under any of
the Major Leases; (6) the Borrower has no knowledge of any presently
effective notice of termination or notice of default given by any tenant with
respect to any Major Lease or under any other Leases that individually or in
the aggregate could be reasonably expected to result in a Material Adverse
Effect; (7) the Borrower has not made any presently effective assignment
or pledge of any of the Leases, the rents or any interests therein except to
the Administrative Agent; (8) no tenant or other party has an option or
right of first refusal to purchase all or any portion of any Project;
(9) except as disclosed in the lease summaries delivered by the Borrower
to the Administrative Agent, no tenant has the right to terminate its lease
prior to expiration of the stated term of such Lease (except as a result of a
casualty or condemnation); and (10) no tenant has prepaid more than one
month’s rent in advance (except for bona fide security deposits and estimated payments
of operating expenses,

 

69

 

taxes and other
pass-throughs paid by tenants pursuant to their Leases not prepaid more than
one month prior to the date such estimated payments are due).

 

7.23         Insurance.
The Borrower has in force, and has paid (in each case to the extent now due and
payable) the Insurance Premiums in respect of all of the insurance required by Section
8.05.

 

7.24         Physical
Condition. Except as expressly and specifically described and disclosed in
the Property Condition Reports for the Projects, the seismic reports delivered
for the Projects pursuant to Section 6.01(aa), the Environmental Reports
for the Projects and the capital improvement schedules contained in the 2005
budgets for the Projects previously delivered to the Administrative Agent, and
except for the work described in Schedule 8.21, to the Borrower’s
knowledge, each Project, including all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, is in good condition, order and repair in all material respects; to
the Borrower’s knowledge, there exists no structural or other material defects
or damages in any Project, whether latent or otherwise, and the Borrower has not
received written notice from any insurance company or bonding company of any
defects or inadequacies in any Project, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond. Notwithstanding the provisions
of Section 12.01(c), if any representation or warranty contained in this
Section 7.24 is untrue at any time with respect to any Project, such
Default or Event of Default may be cured if the Borrower, within the cure
period set forth in Section 12.01(r), performs such acts as are
sufficient to cause this representation and warranty to be true by the end of
such cure period.

 

7.25         Flood
Zone. Except as may be disclosed on the survey of the Project, or any flood
zone certification delivered by the Borrower to the Administrative Agent prior
to the Closing Date, no portion of any Project is located in a flood hazard
area as designated by the Federal Emergency Management Agency or, if in a flood
zone, flood insurance is maintained therefor in full compliance with the
provisions of Section 8.05(a)(i).

 

7.26         Management
Agreement. The Property Management Agreement is the only management and/or
leasing agreement related to each Project, and is in full force and effect with
no default or event of default existing thereunder, and the copy of the
Property Management Agreement delivered to the Administrative Agent is a true,
correct and complete copy.

 

7.27         Boundaries.
Except as may be disclosed on the surveys delivered pursuant to Section
6.01(l) or Article VIA and in the Title Policy, to the Borrower’s
knowledge: (i) none of the Improvements is outside the boundaries of any
Project (or building restriction or setback lines applicable thereto);
(ii) no improvements on adjoining properties encroach upon any Project;
and (iii) no Improvements encroach upon or violate any easements or (in
any respect which would have a Material Adverse Effect) any other encumbrance
upon any Project.

 

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7.28         Illegal
Activity. No portion of any Project has been purchased with proceeds of any
illegal activity and no part of the proceeds of the Loans will be used in
connection with any illegal activity.

 

7.29         Permitted Liens. None of
the Permitted Title Exceptions or Permitted Liens individually or in the
aggregate will have a Material Adverse Effect.

 

7.30         Foreign Assets Control
Regulations, Etc. Neither the execution and delivery of the Notes and the
other Loan Documents by the Borrower Parties nor the use of the proceeds of the
Loan, will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or the Anti-Terrorism
Order or any enabling legislation or executive order relating to any of the
same. Without limiting the generality of the foregoing, no Borrower Party or
any of their respective Subsidiaries (a) is or will become a blocked person
described in Section 1 of the Anti-Terrorism Order or (b) knowingly
engages or will engage in any dealings or transactions or be otherwise
associated with any person who is known or who (after such inquiry as may be
required by Applicable Law) should be known to such Borrower Party or
Subsidiary to be such a blocked person.

 

7.31         Defaults.
No Default exists under any of the Loan Documents.

 

7.32         Other
Representations. All of the representations in this Agreement and the other
Loan Documents by the Borrower and its Affiliates are true, correct and
complete in all material respects as of the date hereof (provided that, for
purposes of this Section 7.32, any representation made by the Westwood Place
Borrower or any other Affiliate of the Borrower which is qualified by reference
to the “knowledge” or “best knowledge” of, or to matters “known” to, the
Westwood Place Borrower or such Affiliate (or similar such references to
knowledge of the Westwood Place Borrower or such Affiliate) shall be qualified
by reference to the “knowledge” or “best knowledge” (as applicable) of, or to
matters “known” to, the Borrower (or such similar such references to the
knowledge of the Borrower).

 

7.33         True
and Complete Disclosure. The information, reports, financial statements,
exhibits and schedules furnished in writing by or on behalf of the Borrower
Parties to the Administrative Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or
thereto, do not contain any untrue statement of material fact or omit to state
any material fact known to the Borrower necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by any
Borrower Party to the Administrative Agent and the Lenders in connection with
this Agreement and the other Loan Documents and the Transactions will, to the
Borrower’s knowledge, be true, complete and accurate in every material respect,
or (in the case of projections) based on reasonable estimates, on the date as
of which such information is stated or certified. There is no fact presently
known to the Borrower or the Borrower’s Manager that could reasonably be
anticipated to have a Material Adverse Effect that has not been disclosed
herein, in the other Loan Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the Administrative
Agent or the Lenders for use in connection with the Transactions.

 

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7.34         Reserved.

 

7.35         Limited
Partners. The Borrower represents and warrants to the Lenders as
follows:  (a) no limited partner of
the Borrower’s Member is presently asserting, or has threatened to assert, by
action or otherwise, any claims or other liability of the Borrower’s Manager in
its capacity as the general partner of Borrower’s Member or otherwise or any
person related to such general partner with respect to the business, operations
or financing of the Borrower or the Borrower’s Member or the past, present or
future offering of any limited partnership interests in the Borrower’s Member
or the making of the Loans or the grant of the security therefor (an “LP
Claim,” which term shall also refer to any other claim that any such
limited partner may make against the Borrower’s Manager from time to time of a
nature that would indicate that any assurance contained in this Section may be
incorrect); and (b) to the extent required, the consent of such limited
partners to the Loans has been obtained and is fully effective.

 

7.36         Non-Foreign
Status. The Borrower represents and warrants to the Lenders that its tax
identification number is 20-2983747 under the Code and that the Borrower’s Member’s tax
identification number is 95-4653254 under the Code.

 

7.37         Borrower’s
Member. The Borrower’s Member is permitted under the limited
partnership agreement of the Borrower’s Member, as amended, or pursuant to consents
obtained from the limited partners of the Borrower’s Member, to enter into or authorize
Borrower to enter into the Transactions including the borrowing of the Loans by
the Borrower. There is not, and after the Closing Date the original Borrower’s
Member will not incur, any ‘Portfolio Debt’ (as such term is defined in the
limited partnership agreement of the Borrower’s Member, as amended) that is not
permitted under the limited partnership agreement of the Borrower’s Member, as
amended, or pursuant to consents obtained from the limited partners of the
Borrower’s Member.

 

ARTICLE VIIA

REPRESENTATIONS AND WARRANTIES

 

The Westwood Place
Borrower represents and warrants to the Administrative Agent and the Lenders as
of the date hereof that:

 

7.01A      Organization;
Powers. The Westwood Place Borrower is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required. The Westwood Place Borrower
is qualified to do business and in good standing in the State of California.

 

7.02A      Authorization;
Enforceability. The Transactions applicable to the Westwood Place Borrower
are within its organizational powers and have been duly authorized by all
necessary organizational action under its Organizational Documents. This
Agreement and

 

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the
other Loan Documents to which it is a party have been duly executed and
delivered by the Westwood Place Borrower and when delivered will constitute, a
legal, valid and binding obligation of the Westwood Place Borrower, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

7.03A      Government
Approvals; No Conflicts. The Transactions applicable to the Westwood Place
Borrower (a) do not require any Government Approvals of, registration or filing
with, or any other action by, any Governmental Authority, except for
(i) such as have been obtained or made and are in full force and effect
and (ii) filings and recordings in respect of the Liens created pursuant
to the Security Documents, (b) will not violate any Applicable Law
applicable to the Westwood Place Borrower or the Organizational Documents of
the Westwood Place Borrower, (c) will not violate or result in a default
under any material indenture, agreement or other instrument binding upon the
Westwood Place Borrower, or give rise to a right thereunder to require any
payment to be made by the Westwood Place Borrower and (d) except for the
Liens created pursuant to the Security Documents to which the Westwood Place
Borrower is a party, will not result in the creation or imposition of any Lien
on any asset of the Westwood Place Borrower.

 

7.04A      Financial
Condition. The financial information relating to the Westwood Place
Borrower provided in the consolidated (entity level) financial statements
heretofore furnished to the Administrative Agent by the Borrower and the
financial information relating to the Westwood Place Project provided in the
project-level financial statements heretofore furnished to the Administrative
Agent by the Borrower are complete and correct in all material respects and
fairly present the financial condition of the Westwood Place Borrower, as of
the dates of such financial statements, all in accordance with GAAP. The
Westwood Place Borrower, on the date hereof, does not have any Indebtedness
(other than security deposits and tenant improvement allowances under the
Leases that are described in the tenant lease summaries provided by the
Borrower to the Administrative Agent and that are in amounts and on terms
consistent with market terms and in the ordinary course of business), material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
financial statements as of said dates and except for Real Estate Taxes and
Other Charges that are not yet delinquent. Since the applicable dates of such
financial statements, except as disclosed in Schedule 7.04A attached
hereto, there has been no event that could reasonably be expected to have a
Material Adverse Effect.

 

7.05A      Litigation.
Except as disclosed in Schedule 7.05A hereto, there are no legal or
arbitral proceedings, or any proceedings by or before any Governmental
Authority or agency of which the Westwood Place Borrower has received written
notice, now pending or (to the knowledge of the Westwood Place Borrower)
threatened in writing against the Westwood Place Borrower or the Westwood Place
Project except for those which (a) (subject to applicable deductibles or
self-insurance) are fully covered by insurance maintained by or for the
Westwood Place Borrower or (b) involve uninsured claims that do not exceed
$75,000 individually, or in the aggregate for such claims.

 

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7.06A      ERISA. The Westwood
Place Borrower has not established any Plan which would cause the Westwood
Place Borrower to be subject to ERISA and none of the Westwood Place Borrower’s
assets constitutes or will constitute “plan assets” of one or more Plans. No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect. Each Plan established by the Westwood Place Borrower, and, to the
knowledge of the Westwood Place Borrower, each of its ERISA Affiliates and each
Multiemployer Plan, is in compliance with, the applicable provisions of ERISA,
the Code and any other Applicable Law.

 

7.07A      Taxes. The Westwood
Place Borrower has timely filed or timely caused to be filed (or obtained
effective extensions for filing) all tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except Taxes that are being contested in good faith by appropriate
proceedings and (a) for which the Westwood Place Borrower has set aside on its
books adequate reserves in accordance with GAAP or (b) to the extent that
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect.

 

7.08A      Investment and
Holding Company Status. The Westwood Place Borrower is not (a) an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a “holding company”, or an “affiliate” of a “holding company”
or a “subsidiary company” of a “holding company”, as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.

 

7.09A      Environmental
Matters. Except for matters expressly and specifically set forth in the
Environmental Report or the Property Condition Report for the Westwood Place
Project or matters disclosed in Schedule 7.09A or Schedule 8.11 attached
hereto, to the Westwood Place Borrower’s knowledge:

 

(a)           The
Westwood Place Borrower and the Westwood Place Project is in compliance with
all applicable Environmental Laws, except where the failure to comply with such
laws is not reasonably likely to result in a Material Adverse Effect.

 

(b)           There
is no Environmental Claim of which the Westwood Place Borrower has received
written notice pending, or to the Westwood Place Borrower’s knowledge,
threatened in writing, and no penalties arising under Environmental Laws have
been assessed, against the Westwood Place Borrower, the Westwood Place Project
or, to the Westwood Place Borrower’s knowledge, against any Person whose
liability for any Environmental Claim the Westwood Place Borrower has or may
have retained or assumed either contractually or by operation of law, and the
Westwood Place Borrower has received no written notice of any investigation or
review which is pending or, to the knowledge of the Westwood Place Borrower,
threatened in writing by any Governmental Authority, citizens group, employee
or other Person with respect to any alleged failure by the Westwood Place
Borrower or the Westwood Place Project to have any environmental, health or
safety permit, license or other authorization required under, or to otherwise
comply with, any Environmental Law or with respect to any alleged liability of
the Westwood Place Borrower for any Use or Release of any Hazardous Substances.

 

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(c)           There
have been no past, and there are no present, Releases of any Hazardous
Substance that could reasonably be anticipated to form the basis of any
Environmental Claim against the Westwood Place Borrower, the Westwood Place
Project or, to the Westwood Place Borrower’s knowledge, against any Person
whose liability for any Environmental Claim the Westwood Place Borrower has or
may have retained or assumed either contractually or by operation of law.

 

(d)           To
the Westwood Place Borrower’s knowledge, there is no Release of Hazardous
Substances migrating to the Westwood Place Project which could require
Remediation or require the Westwood Place Borrower to provide notice to any
Governmental Authority.

 

(e)           There
is not present at, on, in or under the Westwood Place Project, PCB-containing
equipment, asbestos or asbestos containing materials, underground storage tanks
or surface impoundments for Hazardous Substances, lead in drinking water
(except in concentrations that comply with all Environmental Laws), or
lead-based paint (except in compliance with all applicable Environmental Laws).

 

(f)            No
Liens are presently recorded with the appropriate land records under or
pursuant to any Environmental Law with respect to the Westwood Place Project
and, to the Westwood Place Borrower’s knowledge no Governmental Authority has
been taking or is in the process of taking any action that could subject the
Westwood Place Project to Liens under any Environmental Law.

 

(g)           The
Westwood Place Borrower has provided to the Administrative Agent’s
environmental consultant prior to the Closing Date true and correct copies of
all materials, environmental reports and other documents pertaining to the
Westwood Place Project requested by the consultant and in the Westwood Place
Borrower’s possession or control.

 

7.10A      Organizational
Structure. The Westwood Place Borrower has heretofore
delivered to the Administrative Agent a true and complete copy of its
Organizational Documents. The only manager of the Westwood Place Borrower on
the date hereof is the Borrower’s Member.

 

7.11A      Subsidiaries. The Westwood Place
Borrower has no Subsidiaries.

 

7.12A      Title. The Westwood
Place Borrower owns and has on the date hereof good, indefeasible and insurable
fee simple title to the portion of the Westwood Place Project consisting of
real property free and clear of all Liens, other than Permitted Title
Exceptions. The Westwood Place Borrower owns or (in compliance with Section 9.04(d))
leases and has on the date hereof good title to all other portions of the
Westwood Place Project free and clear of all Liens, other than Permitted Title
Exceptions and rights of equipment lessors under equipment leases currently in
effect which comply with the requirements set forth in Sections 9.02(h)
and 9.04(d). There are no outstanding options to purchase or rights of
first refusal to purchase affecting the Westwood Place Project (other than in
favor of the Borrower’s Member).

 

7.13A      No Bankruptcy
Filing. The Westwood Place Borrower is not contemplating either the filing of
a petition by it under any state or federal bankruptcy or

 

75

 

insolvency
laws or the liquidation of all or a major portion of the Westwood Place
Borrower’s assets or property, and the Westwood Place Borrower has no knowledge
of any Person contemplating the filing of any such petition against it or its
manager.

 

7.14A      Executive
Offices; Places of Organization. The location of the
Westwood Place Borrower’s principal place of business and chief executive
office is the address identified in the “Address for Notices” area beneath the
Westwood Place Borrower’s name on the Westwood Place Borrower’s signature page
to this Agreement, except to the extent changed in accordance with Section 9.07.
The Westwood Place Borrower was organized in the State of Delaware.

 

7.15A      Compliance; Government
Approvals. Except as expressly set forth in the Property
Condition Report for the Westwood Place Project, the Environmental Report for
the Westwood Place Project or the seismic report for the Westwood Place Project
delivered pursuant to Section 6.01(ff), the Westwood Place Borrower, the
Westwood Place Project and the Westwood Place Borrower’s use thereof and
operations thereat comply in all material respects with all Applicable Laws. All
material Government Approvals necessary under Applicable Law in connection with
the operation of the Westwood Place Project as contemplated by the Loan
Documents to which the Westwood Place Borrower is a party have been duly
obtained, are in full force and effect, are not subject to appeal, are held in
the name of the Westwood Place Borrower (or the Borrower’s Member for the
benefit of the Westwood Place Borrower) and are free from conditions or
requirements compliance with which could reasonably be expected to have a
Material Adverse Effect or which the Westwood Place Borrower does not
reasonably expect to be able to satisfy. To the best knowledge of the Westwood
Place Borrower, there is no proceeding pending or threatened in writing that
seeks, or may reasonably be expected, to rescind, terminate, Modify or suspend any
such Government Approval. Except for business licenses and other licenses or
permits that are not specifically applicable to the Westwood Place Project, the
Westwood Place Borrower has no reason to believe that the Administrative Agent,
acting for the benefit of the Lenders, will not be entitled, without undue
expense or delay, to the benefit of each such Government Approval upon the
exercise of remedies under the Security Documents to which the Westwood Place
Borrower is a party.

 

7.16A      Condemnation; Casualty. To the
Westwood Place Borrower’s knowledge, no Taking has been commenced or is
presently contemplated with respect to all or any portion of the Westwood Place
Project or for the relocation of roadways providing access to the Westwood
Place Project. No Casualty Event of any material nature that has not been
substantially repaired has occurred with respect to the Westwood Place Project.

 

7.17A      Utilities and
Public Access; No Shared Facilities. The Westwood Place Project
has adequate rights of access to public ways and is served by adequate
electric, gas, water, sewer, sanitary sewer and storm drain facilities. All
public utilities necessary to the use and enjoyment of the Westwood Place
Project as intended to be used and enjoyed are located in the public
right-of-way abutting the Westwood Place Project except as otherwise shown on
the survey of the Westwood Place Project provided to the Administrative Agent.

 

7.18A      Solvency. On the
Closing Date and after and giving effect to the Loans to the Westwood Place
Borrower occurring on the Closing Date, and the disbursement of the

 

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proceeds
of such Loans pursuant to the Westwood Place Borrower’s instructions, the
Westwood Place Borrower is and will be Solvent.

 

7.19A      Foreign Person. The Westwood
Place Borrower is not a “foreign person” within the meaning of Section
1445(f)(3) of the Code.

 

7.20A      No Joint
Assessment; Separate Lots. The Westwood Place Borrower has not
suffered, permitted or initiated the joint assessment of the Westwood Place
Project with any other real property constituting a separate tax lot.

 

7.21A      Security
Interests and Liens. The Security Documents to which the Westwood Place
Borrower is a party create (and upon recordation of the Deed of Trust executed
by the Westwood Place Borrower, filing of the applicable financing statements
in the appropriate filing offices and the execution and delivery by the
Depository Bank of control agreements with respect to any pledged deposit
accounts there will be perfected as to any portion of such collateral
consisting of the deposit account itself and the securities entitlements
thereto), as security for the Obligations of the Westwood Place Borrower,
valid, enforceable, perfected and first priority security interests in and
Liens on all of the respective collateral intended to be covered thereunder, in
favor of the Administrative Agent as administrative agent for the ratable
benefit of the Lenders, subject to no Liens other than the Permitted Title
Exceptions and rights of equipment lessors under equipment leases currently in
effect which comply with the requirements set forth in Sections 9.02(h)
and 9.04(d), except as enforceability may be limited by applicable
insolvency, bankruptcy, reorganization, moratorium or other laws affecting
creditors’ rights generally, or general principles of equity, whether such
enforceability is considered in a proceeding in equity or at law. Other than in
connection with any future change in the Westwood Place Borrower’s name or the
location in which the Westwood Place Borrower is organized or registered, no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than the filing of continuation statements and Notices of Intent to Preserve
Security Interests in accordance with the Uniform Commercial Code and the
California Civil Code. A financing statement covering all property covered by
any Security Document to which the Westwood Place Borrower is a party that is
subject to a Uniform Commercial Code financing statement has been filed and/or
recorded, as appropriate, (or irrevocably delivered to the Administrative Agent
or a title agent for such recordation or filing) in all places necessary to
perfect a valid first priority security interest with respect to the rights and
property that are the subject of such Security Document to the extent governed
by the Uniform Commercial Code and to the extent such security can be perfected
by such filing.

 

7.22A      Leases. Except as
disclosed in the estoppel certificates delivered to the Administrative Agent
prior to the Closing Date, in that certain Douglas, Emmett & Company
Delinquency/Aging Report (Summarized) dated 7/20/2005 provided to the Administrative
Agent prior to the Closing Date, or (as to items (2) through (10) below) on the
rent roll attached hereto as Schedule 7.22A, with respect to the Leases
(which term, for the purposes of this Section 7.22A is limited to
tenant leases of the Westwood Place Project): (1) the rent roll attached
hereto as Schedule 7.22A is true, correct and complete and the Leases
referred to thereon are all valid and in full force and effect; (2) the
Leases (including Modifications thereto) are in writing, and there are no oral
agreements with respect thereto; (3) the copies of each of the

 

77

 

Leases
(if any) delivered to the Administrative Agent are true, correct and complete
in all material respects and have not been Modified (or further Modified);
(4) the lease summaries delivered to the Administrative Agent are true and
correct in all material respects, and, as to all matters contained therein
relating to rent, term, termination rights, options to renew, extend or expand,
rights of first refusal or offer, tenant improvement allowances, security
deposits and other credit enhancements, insurance, tax and operating expense
recovery, and obligations with respect to subordination, non-disturbance and
attornment, complete in all material respects, and such summaries do not fail
to disclose any material term of any Lease which would materially impact the
obligation of the tenant thereunder to pay rent or perform any of its other
material obligations for the entire term thereof as disclosed in such summary
and the rent roll attached hereto as Schedule 7.22A; (5) to the
Westwood Place Borrower’s knowledge, no defaults exist under any of the Leases
(other than the Major Leases) by any party (including any guarantor) thereto
that, individually or in the aggregate with respect to such defaults would
result in a Material Adverse Effect, and, to the knowledge of the Westwood
Place Borrower, no material default exists under any of the Major Leases;
(6) the Westwood Place Borrower has no knowledge of any presently
effective notice of termination or notice of default given by any tenant with
respect to any Major Lease or under any other Leases that individually or in
the aggregate could be reasonably expected to result in a Material Adverse
Effect; (7) the Westwood Place Borrower has not made any presently
effective assignment or pledge of any of the Leases, the rents or any interests
therein except to the Administrative Agent; (8) no tenant or other party
(other than the Borrower) has an option or right of first refusal to purchase
all or any portion of the Westwood Place Project; (9) except as disclosed
in the lease summaries delivered by the Westwood Place Borrower to the
Administrative Agent, no tenant has the right to terminate its lease prior to
expiration of the stated term of such Lease (except as a result of a casualty
or condemnation) and; (10) no tenant has prepaid more than one month’s
rent in advance (except for bona fide security deposits and estimated payments
of operating expenses, taxes and other pass-throughs paid by tenants pursuant
to their Leases not prepaid more than one month prior to the date such
estimated payments are due).

 

7.23A      Insurance. The Westwood
Place Borrower has in force, and has paid or caused to be paid (to the extent
now due and payable) the Insurance Premiums applicable to the Westwood Place
Project in respect of all of the insurance required by Section 8.05 (as
incorporated by reference in Article VIIIA).

 

7.24A      Physical
Condition. Except as expressly and specifically described and
disclosed in the Property Condition Report for the Westwood Place Project, the
seismic report for the Westwood Place Project delivered pursuant to Section
6.01(ff), the Environmental Report for the Westwood Place Project, the capital
improvement schedule contained in the 2003 budget for the Westwood Place
Project previously delivered to the Administrative Agent, and except for any
work (if any) applicable to the Westwood Place Project described in Schedule
8.21, to the Westwood Place Borrower’s knowledge, the Westwood Place
Project, including all buildings, improvements, parking facilities, sidewalks,
storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, is in good
condition, order and repair in all material respects; to the Westwood Place
Borrower’s knowledge, there exists no structural or other material defects or
damages in the Westwood Place Project, whether latent or otherwise, and the
Westwood Place Borrower has not received written notice from any

 

78

 

insurance
company or bonding company of any defects or inadequacies in the Westwood Place
Project, or any part thereof, which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon
or of any termination or threatened termination of any policy of insurance or
bond. Notwithstanding the provisions of Section 12.01(c), as
incorporated by reference in Article XIIA, if any representation or
warranty contained in this Section 7.24A is untrue at any time with
respect to the Westwood Place Project, such Westwood Place Default or Event of
Default may be cured if the Westwood Place Borrower, within the cure period set
forth in Section 12.01(r), as incorporated by reference in Article
XIIA, performs such acts as are sufficient to cause this representation and
warranty to be true by the end of such cure period.

 

7.25A      Flood Zone. Except as may
be disclosed on the survey of the Westwood Place Project, or any flood zone
certification delivered by the Westwood Place Borrower to the Administrative
Agent prior to the Closing Date, no portion of the Westwood Place Project is
located in a flood hazard area as designated by the Federal Emergency
Management Agency or, if in a flood zone, flood insurance is maintained
therefor in full compliance with the provisions of Section 8.05(a)(i) as
incorporated by reference in Article VIIIA.

 

7.26A      Management
Agreement. The Property Management Agreement for the Westwood
Place Project is the only management and/or leasing agreement related to the
Westwood Place Project and is in full force and effect with no default or event
of default existing thereunder. The copy of the Property Management Agreement
for the Westwood Place Project delivered to the Administrative Agent is a true,
correct and complete copy.

 

7.27A      Boundaries. Except as may
be disclosed on the surveys delivered pursuant to Section 6.01(l) or Article
VIA and in the Title Policy for the Westwood Place Project, to the Westwood
Place Borrower’s knowledge: (i) none of the Improvements is outside the
boundaries of the Westwood Place Project (or building restriction or setback
lines applicable thereto); (ii) no improvements on adjoining properties
encroach upon the Westwood Place Project; and (iii) no Improvements
encroach upon or violate any easements or (in any respect which would have a
Material Adverse Effect) any other encumbrance upon the Westwood Place Project.

 

7.28A      Illegal
Activity. No portion of the Westwood Place Project has been
purchased with proceeds of any illegal activity and no part of the proceeds of
the Loans to the Westwood Place Borrower will be used in connection with any
illegal activity.

 

7.29A      Permitted Liens. None of the
Permitted Title Exceptions or Permitted Liens related to the Westwood Place
Project individually or in the aggregate will have a Material Adverse Effect.

 

7.30A      Foreign Assets
Control Regulations, Etc. Neither the execution and delivery of the
Notes by the Westwood Place Borrower and the other Loan Documents to which the
Westwood Place Borrower is a party nor the use of the proceeds of the Loans
made to the Westwood Place Borrower will violate the Trading with the Enemy
Act, as amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or the Anti-Terrorism Order or any enabling legislation or executive
order relating to any of the same. Without limiting the generality of the
foregoing,

 

79

 

neither
the Westwood Place Borrower nor any of its respective Subsidiaries (a) is or
will become a blocked person described in Section 1 of the Anti-Terrorism Order
or (b) knowingly engages or will engage in any dealings or transactions or be
otherwise associated with any person who is known or who (after such inquiry as
may be required by Applicable Law) should be known to the Westwood Place
Borrower or its Subsidiary to be such a blocked person.

 

7.31A      Defaults. No Westwood
Place Default exists under any of the Loan Documents.

 

7.32A      Other
Representations. All of the representations in this Agreement and
the other Loan Documents to which the Westwood Place Borrower is a party made
by the Westwood Place Borrower are true, correct and complete in all material
respects as of the date hereof.

 

7.33A      True and
Complete Disclosure. The information, reports, financial statements,
exhibits and schedules furnished in writing by or on behalf of the Westwood
Place Borrower to the Administrative Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or
thereto, do not contain any untrue statement of material fact or omit to state
any material fact known to the Westwood Place Borrower necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the date
hereof by the Westwood Place Borrower to the Administrative Agent and the
Lenders in connection with this Agreement and the other Loan Documents and the
Transactions will, to the Westwood Place Borrower’s knowledge, be true,
complete and accurate in every material respect, or (in the case of
projections) based on reasonable estimates, on the date as of which such information
is stated or certified. There is no fact presently known to the Westwood Place
Borrower that could reasonably be anticipated to have a Material Adverse Effect
that has not been disclosed herein, in the other Loan Documents to which the
Westwood Place Borrower is a party or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the
Administrative Agent or the Lenders for use in connection with the
Transactions.

 

7.34A      Reserved.

 

7.35A      Non-Managing
Member. The Westwood Place Borrower represents and warrants to the Lenders as
follows:  (a) no non-managing member
of the Westwood Place Borrower is presently asserting, or has threatened to
assert, by action or otherwise, any claims or other liability of the manager of
the Westwood Place Borrower or any person related to such manager with respect
to the business, operations or financing of the Westwood Place Borrower or the
past, present or future offering of any membership interests in the Westwood
Place Borrower or the making of the Loans to the Westwood Place Borrower or the
grant of the security therefor (a “Member Claim,” which term shall also refer
to any other claim that any such non-managing member may make against the
manager from time to time of a nature that would indicate that any assurance
contained in this Section may be incorrect); and (b) to the extent
required, the consent of such non-managing member to the Loans to the Westwood
Place Borrower has been obtained and is fully effective.

 

80

 

7.36A      Non-Foreign
Status. The Westwood Place Borrower represents and warrants to the Lenders
that its tax identification number is 95-4736604 and it is not a foreign person
under the Code.

 

7.37A      Proposed
Refinancing Notice. In its capacity as the manager of the Westwood
Place Borrower, the Borrower’s Member has given written notice of the proposed
refinancing of the Westwood Place Project to Westwood Place, a California
limited partnership, and has afforded Westwood Place, a California limited
partnership, and its partners an opportunity to provide guaranties to the
lender(s) making the Loans to the Westwood Place Borrower in substance
comparable to the “New Loan Guaranty” (as referred to in the operating
agreement of the Westwood Place Borrower) in order to cause not less than
$28,500,000 of indebtedness to be allocated to Westwood Place, a California
limited partnership (and its partners through Westwood), during the “Guaranty
Period” (as such term is defined in the operating agreement of the Westwood
Place Borrower).

 

ARTICLE
VIII

AFFIRMATIVE COVENANTS OF THE BORROWER

 

The Borrower covenants and agrees with the Lenders and
the Administrative Agent that, so long as any Commitment or Loan is outstanding
and until payment in full of all amounts payable by the Borrower hereunder:

 

8.01         Information.
The Borrower shall deliver to the Administrative Agent:

 

(a)           Within
one hundred (100) days after the end of each fiscal year of the Borrower’s
operation of the Project, the Borrower shall furnish to the Administrative
Agent (i) an annual report containing a summary of operating results for such
year, a history of operating results broken down by quarter and twelve (12)
month periods for the Borrower and the Borrower’s Member since inception (which
may be consolidated provided that such report contains notes clearly
identifying each item on such report which is attributable to the Borrower and the
Borrower’s Member), an investment summary broken down for each of the Borrower’s
properties, a comparison of actual results to budget for all of the Borrower’s
properties for such year, audited financial statements for such year for the
Borrower and the Borrower’s Member (which may be consolidated provided that
such financial statements contain notes clearly identifying each item on such
financial statements which is attributable to the Borrower, the Borrower’s
Member and the Projects) (including a balance sheet, statement of income,
statement of aggregate partners’ capital or member’s equity, statement of cash
flows, and notes), and the operating budget for each of the Projects and the Westwood Place
Project for the fiscal year then under way, all in the same form as the
Borrower’s Member’s 2004 audited financial statements and related materials,
which form is acceptable to Administrative Agent, and (ii) an updated rent roll
for each of the Projects and the Westwood Place Project in the form delivered to the
Administrative Agent prior to the Closing Date; provided however, following a Permitted Public

 

81

 

REIT Transfer, in lieu of the items in clauses (i) and (ii) above, the
Borrower shall furnish to the Administrative Agent, within the later of the
time period for delivery of the annual report provided above or five (5)
Business Days after the annual Form 10-K of the Permitted Public REIT becomes
publicly available, the following:  (i)
the annual Form 10-K of the Permitted Public REIT, (ii) an annual summary of
operating results for each of the Projects and the Westwood Place Project for
such year, (iii) a comparison of actual results to budget for each of the
Projects and the Westwood Place Project for such year, (iv) the operating
budget for each of the Projects and the Westwood Place Project for the fiscal
year then under way, (v) an unaudited balance sheet and income statement for
such year for the Borrower (which may be consolidated provided that such
financial statements contain notes identifying each item on such financial
statements that is attributable to the Borrower or the Projects and the
Westwood Place Project) and (vi) an updated rent roll for each of the Projects
and the Westwood Place Project;

 

(b)           Within fifty (50) days after the end of each
calendar quarter (or, in the case of the fourth calendar quarter for each
fiscal year, within one hundred (100) days after the end of such quarter), the
Borrower shall furnish to the Administrative Agent (i) a quarterly report
containing a summary of operating results for such quarter and for the twelve
(12) months ending with such quarter, a history of operating results broken
down by quarter and twelve (12) month periods for the Borrower and Borrower’s
Member since inception (which may be consolidated provided that such report
contains notes clearly identifying each item on such report which is
attributable to the Borrower and the Borrower’s Member), an investment summary broken down for each of the Borrower’s
properties, a comparison of actual results to budget for all of the Borrower’s
properties for such quarter and for the twelve (12) months ending with such
quarter, unaudited financial statements for that quarter and for the twelve
(12) months ending with such quarter for the Borrower and the Borrower’s Member
(which may be consolidated provided that such financial statements
contain notes clearly identifying each item on such financial statements which
is attributable to the Borrower, the Borrower’s Member and the Projects and the Westwood Place
Project) (including a balance
sheet, statement of income, statement of partners’ capital or member’s
equity, statement of cash flows, and
notes), and in the same form as the most recent (as of the date hereof)
quarterly report of the Borrower’s Member provided to the Administrative Agent
pursuant to Section 6.01(w), which form is acceptable to Administrative
Agent and (ii) an updated rent roll for each of the Projects and the Westwood Place Project
in the form delivered to the
Administrative Agent in connection with the Closing; provided however,
following a Permitted Public REIT Transfer, in lieu of the items in clauses (i)
and (ii) above, the Borrower shall furnish to the Administrative Agent, within
the later of the time period provided above for delivery of the quarterly
report (which shall instead be based on the Permitted Public REIT’s fiscal
quarter) or five (5) Business Days after the Form 10-Q of the Permitted Public
REIT for such fiscal quarter becomes publicly available, the following:  (i) the most recent Form 10-Q of the
Permitted Public REIT, (ii) a summary of operating results for each of the
Projects and the Westwood Place Project as of the end of the current quarter
for the year-to-date, (iii) a comparison of actual results to budget for each
of the Projects and the Westwood Place Project as of the end of the current
quarter for the year-to-date, (iv) an unaudited balance sheet and income
statement for the Borrower as of the end of the current quarter for the
year-to-date (which may be consolidated provided that such financial statements
contain notes identifying each item on such financial statements that is
attributable to the Borrower or the Projects and the Westwood Place Project)
and (v) an updated rent roll for each of the Projects and the Westwood Place
Project;

 

(c)           at
the time of the delivery of each of the financial statements provided for in subsection
(a) and subsection (b) of this Section 8.01, a certificate of
an Authorized Officer on

 

82

 

behalf of the Borrower,
certifying (i) that such respective financial statements and reports as being
true, correct, and complete in all material respects; (ii) that such officer
has no knowledge, except as specifically stated, of any Default or if a Default has
occurred, specifying the nature thereof in reasonable detail and the action
which the Borrower is taking or proposes to take with respect thereto; (iii) that
the Borrower is in compliance with the restrictions on Indebtedness set forth
in Section 9.04; and (iv) containing a calculation in such
reasonable detail as is acceptable to the Administrative Agent setting forth
the Operating Income, Operating Expenses, Net Operating Income, Adjusted Net
Operating Income, DSCR Debt Service, and Debt Service Coverage Ratio for the
most recent calendar quarter;

 

(d)           from
time to time, within fifteen (15) days after request therefor, such other
information regarding the financial condition, operations, business or
prospects of the Borrower, the Projects, the other Borrower Parties, the Bankruptcy
Parties or status or terms of the Permitted Reorganization as the
Administrative Agent may reasonably request, including, without limitation, if
there is a material variation in the application of accounting principles as
further described herein (i) a description in reasonable detail of any
material variation between the application of accounting principles employed in
the preparation of any annual or quarterly financial statement under Section 8.01
and Article VIIIA and the application of accounting principles employed
in the preparation of the immediately preceding annual or quarterly financial
statements and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof; and

 

(e)           within
ten (10) Business Days after the end of each calendar month during a Low DSCR
Trigger Period, (i) an operating statement (showing monthly activity), with
such detail and in a form reasonably satisfactory to the Administrative Agent, showing
Operating Income, Operating Expenses, Net Operating Income, Adjusted Net
Operating Income, DSCR Debt Service, and the Borrower’s calculation of Excess
Cash for such month; (ii) the computations of Debt Service Coverage Ratio as
calculated as of the end of the most recent calendar month; and (iii) a
reconciliation of the results for such month and year-to-date as compared to
the Approved Annual Budget for such period.

 

(f)            In the event of a
Transfer to a Permitted REIT or its Permitted REIT Subsidiary in accordance
with Section 9.03(a)(iii), the Borrower shall furnish to the
Administrative Agent (a) if the Borrower shall have delivered a Guarantee of
the Guaranteed Line of Credit, all compliance certificates, financial
statements and all other financial and material reports required pursuant to
the terms of the Primary Credit Facility of the Permitted REIT on or prior to
the date(s) required for the delivery thereof by such Permitted REIT pursuant
to the terms of the Primary Credit Facility of such Permitted REIT and (b) at
all other times such compliance certificates, financial statements and all
other financial and material reports delivered by the Permitted REIT pursuant
to the terms of the Primary Credit Facility of the Permitted REIT as may be
requested by the Administrative Agent from time to time, promptly following
such request.

 

Any reports,
statements or other information required to be delivered under this Agreement (other
than the Form 10-K and Form 10-Q of the Permitted Public REIT, which may be
delivered in paper or electronic form) shall be delivered (1) in paper form,
(2) on a diskette, and (3) if requested by the Administrative Agent and within
the capabilities of the Borrower’s data

 

83

 

systems without
change or modification thereto, in electronic form and prepared using a
Microsoft Word for Windows or WordPerfect for Windows files (which files may be
prepared using a spreadsheet program and saved as word processing files).

 

8.02         Notices
of Material Events. The Borrower shall give to the Administrative Agent
prompt written notice after becoming aware of any of the following:

 

(a)           the
occurrence of any Default or Event of Default, including a description of the
same in reasonable detail;

 

(b)           the
commencement (or threatened commencement in writing) of all material legal or
arbitral proceedings whether or not covered by insurance policies maintained by
or for the Borrower, the Borrower’s Member or the Borrower’s Manager in
accordance herewith (it being understood that any monetary claims asserted in
any proceeding which, individually or in the aggregate, exceeds $3,000,000
shall be deemed material), and of all proceedings by or before any Governmental
Authority of a material nature, and any material development in respect of such
legal or other proceedings, affecting any of the Borrower Parties or any
Project;

 

(c)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower Parties in an aggregate amount exceeding $250,000;

 

(d)           promptly
after the Borrower knows or has reason to believe any default has occurred by
the Borrower or tenant under any Major Lease or the Borrower has received a
written notice of default from the tenant under any Major Lease, a notice of
such default;

 

(e)           copies
of any material notices or documents pertaining to or related to the Projects,
the Borrower or the Borrower’s Member received from any Governmental Authority;
and, with respect to Major Leases only, any notices received asserting a
material default by the landlord under such lease, or relating to an assignment
of the lease by the tenant, or a subletting of all or substantially all of the
premises thereunder, or the vacation of all or a material portion of the
premises by the tenant, or a change in control of the tenant, or an election by
the tenant to terminate the lease or any other event or condition which, as
reasonably determined by the Borrower, would impact the obligation of the
tenant thereunder to pay rent or perform any of its other material obligations
for the entire term thereof as previously disclosed to the Administrative Agent;

 

(f)            notice
of any Taking threatened in writing; or the occurrence of any Casualty Event resulting
in damage or loss in excess of $500,000; and

 

(g)           any
other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.

 

Each notice delivered
under this Section 8.02 shall be accompanied by a statement of an
Authorized Officer of the Borrower setting forth, in reasonable detail, the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

84

 

8.03         Existence,
Etc. The Borrower will, and will cause each other Borrower Party to,
preserve and maintain its legal existence and all material rights, privileges,
licenses and franchises necessary for the maintenance of its existence and the
conduct of its affairs.

 

8.04         Compliance
with Laws; Adverse Regulatory Changes.

 

(a)           The
Borrower shall comply in all material respects (subject to such more stringent
requirements as may be set forth elsewhere herein) with all Applicable Laws. The
Borrower shall maintain in full force and effect all required Government
Approvals and shall from time to time obtain all Government Approvals as shall
now or hereafter be necessary under Applicable Law in connection with the
operation or maintenance of the Projects and shall comply, in all material
respects, with all such Government Approvals and keep them in full force and
effect. Upon request from time to time, the Borrower shall promptly furnish a
true, correct and complete copy of each such Government Approval to the
Administrative Agent. The Borrower shall, unless otherwise approved by the
Administrative Agent in writing, use its reasonable efforts to contest any
proceedings before any Governmental Authority and to resist any proposed
adverse changes in Applicable Law to the extent that such proceedings or
changes are directed specifically toward any Project or could reasonably be
expected to have a Material Adverse Effect, but only to the extent that
Borrower deems such action to be in the best interests of the affected Project
in the exercise of its business judgment.

 

(b)           The
Borrower, at its own expense, may contest by appropriate legal proceedings
promptly initiated and conducted in good faith and with due diligence, the
validity or application of any Applicable Law, and shall provide the
Administrative Agent with notice of any such contest of a material nature, provided
that:

 

(i)            Reserved;

 

(ii)           the
Borrower shall pay any outstanding fines, penalties or other payments under
protest unless such proceeding shall suspend the collection of such items;

 

(iii)          such
proceeding shall be permitted under and be conducted in accordance with the
applicable provisions of any other instrument governing the contest of such
Applicable Laws to which the Borrower or any such Project is subject and shall
not constitute a default thereunder;

 

(iv)          no
part of or interest in any Project (or the Borrower’s interest therein) will be
in danger of being sold, forfeited, terminated, canceled or lost during the
pendency of the proceeding;

 

(v)           such
proceeding shall not subject the Borrower, the Administrative Agent or any
Lender to criminal or civil liability (other than civil liability of the
Borrower as to which adequate security has been provided pursuant to clause
(vi) below);

 

(vi)          unless
paid under protest, the Borrower shall have furnished such security as may be
required in the proceeding, or as may be reasonably requested by the
Administrative Agent, to insure the payment of any such items, together with
all interest

 

85

 

and penalties thereon, which shall not be less than
110% of the maximum liability of the Borrower as reasonably determined by the
Administrative Agent; and

 

(vii)         the
Borrower shall promptly upon final determination thereof pay the amount of such
items, together with all costs, interest and penalties.

 

8.05         Insurance.

 

(a)           The
Borrower shall obtain and maintain, or cause to be maintained, for the benefit
of the Borrower, the Administrative Agent and the Lenders, insurance for each
Project providing at least the following coverages:

 

(i)            comprehensive
all risk insurance (A) in an amount equal to one hundred percent (100%) of the
full replacement cost (less deductible amounts provided for herein), which for
purposes of this Agreement shall mean actual replacement value (exclusive of
costs of excavations, foundations, underground utilities and footings) with a
waiver of depreciation; (B) containing an agreed amount endorsement with
respect to the Improvements and personal property at each Project waiving all
co-insurance provisions (if applicable); (C) providing for no deductible in
excess of Seventy-Five Thousand Dollars ($75,000) for all such insurance
coverage; and (D) containing an “Ordinance or Law Coverage” or “Enforcement”
endorsement if any of the Improvements or the use of each Project shall at any
time constitute legal non-conforming structures or uses. In addition, the
Borrower shall obtain: (y) if any portion of the Improvements is currently or
at any time in the future located in a federally designated “special flood
hazard area”, flood hazard insurance in an amount equal to the lesser of (1)
the Outstanding Principal Amount of the Notes or (2) the maximum amount of such
insurance available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended or such greater amount as the Administrative Agent
shall require; and (z) subject to Sections 8.05(a)(xi) and (xii),
coverage for terrorism, terrorist acts and earthquake; provided that the
insurance pursuant to clauses (y) and (z) hereof shall be on terms (other than
with respect to deductibles and self-insurance) consistent with the
comprehensive all risk insurance policy required under this subsection (i);

 

(ii)           commercial
general liability insurance against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Project, such
insurance (A) to be on the so-called “occurrence” form with an occurrence limit
of not less than One Million and No/100 Dollars ($1,000,000) and an aggregate
limit of not less than Two Million and No/100 Dollars ($2,000,000); (B) to
continue at not less than the aforesaid limit until required to be changed by
the Administrative Agent by reason of changed economic conditions making such
protection inadequate; and (C) to cover at least the following hazards: (1)
premises and operations; (2) products and completed operations on an “if any”
basis; (3) independent contractors; (4) blanket contractual liability for all
legal contracts; and (5) contractual liability covering the indemnities
contained in the Loan Documents to the extent the same is available;

 

86

 

(iii)          business
income insurance (A) with loss payable to the Administrative Agent (on behalf
of the Lenders); (B) covering all risks required to be covered by the insurance
provided for in subsection (i) above for a period commencing at the
time of loss for such length of time as it takes to repair or replace with the
exercise of due diligence and dispatch; (C) containing an extended period of
indemnity endorsement which provides that after the physical loss to the
Improvements and personal property has been repaired, the continued loss of
income will be insured until such income either returns to the same level it
was at prior to the loss, or the expiration of twelve (12) months from the date
that the Project is repaired or replaced and operations are resumed, whichever
first occurs, and notwithstanding that the policy may expire prior to the end
of such period; and (D) if there is a separate sublimit for business income
insurance, such sublimit shall be not less than one hundred percent (100%) of
the projected gross income from the Project for a period of eighteen (18)
months. The amount of such business income insurance shall be determined prior
to the date hereof and at least once each year thereafter based on the Borrower’s
reasonable estimate of the gross income from the Project for the succeeding eighteen
(18) month period. All proceeds payable to the Administrative Agent pursuant to
this subsection (iii) shall be held by the Administrative Agent and
shall be applied to debt service that is due and payable under the Notes with
the amount in excess of such debt service during the period of business
interruption held in a Controlled Account and available for release to the
Borrower upon the completion of the restoration of the Project provided no Major
Default or Event of Default then exists; provided, however, that
nothing herein contained shall be deemed to relieve the Borrower of its
obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Notes and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;

 

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

 

(v)           workers’
compensation, subject to the statutory limits of the state in which the Project
is located, and employer’s liability insurance with a limit of at least One
Million and No/100 Dollars ($1,000,000) per accident and per disease per
employee, and One Million and No/100 Dollars ($1,000,000) for disease aggregate
in respect of any work or operations on or about the Project, or in connection
with the Project or its operation (if applicable);

 

87

 

(vi)          comprehensive
boiler and machinery insurance, if applicable, in amounts as shall be
reasonably required by the Administrative Agent on terms consistent with the
commercial property insurance policy required under subsection (i)
above;

 

(vii)         umbrella
liability insurance in addition to primary coverage in an amount not less than
Fifty Million and No/100 Dollars ($50,000,000) per occurrence on terms
consistent with the commercial general liability insurance policy required
under subsection (ii) above and subsections (viii) and (ix)
below;

 

(viii)        motor
vehicle liability coverage for all owned and non-owned vehicles, including
rented and leased vehicles containing minimum limits per occurrence of One
Million and No/100 Dollars ($1,000,000);

 

(ix)           if
applicable to a particular Project, so-called “dramshop” insurance or other
liability insurance required in connection with the sale by the Borrower of
alcoholic beverages;

 

(x)            insurance
against employee dishonesty in an amount not less than one (1) month of
Operating Income from the Project and with a deductible not greater than Ten
Thousand and No/100 Dollars ($10,000.00);

 

(xi)           such
coverages with respect to terrorism and terrorist acts as are then being
maintained by prudent owners of institutionally owned “Class A” office buildings
in the market where the Projects are located as reasonably determined by the
Borrower and the Administrative Agent; it being acknowledged and agreed that
the Administrative Agent and the Lenders have accepted the Borrower’s existing
coverages, deductibles and self-insurance limits in effect on the Closing Date
with respect to terrorism and terrorist acts;

 

(xii)          such
coverages with respect to earthquake as are then being maintained by prudent
owners of institutionally owned “Class A” office buildings in the market where
the Projects are located as reasonably determined by the Borrower and the
Administrative Agent; it being acknowledged and agreed that the Administrative
Agent and the Lenders have accepted the Borrower’s existing coverages,
deductibles and self-insurance limits in effect on the Closing Date with
respect to earthquake; and

 

(xiii)         upon
sixty (60) days’ notice, such other reasonable insurance and in such reasonable
amounts as the Administrative Agent from time to time may reasonably request
against such other insurable hazards which at the time are commonly insured
against for property similar to the Project located in or around the region in
which the Project is located.

 

(b)           All
insurance provided for in Section 8.05(a) shall be obtained under
valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”) and, to the extent not specified above, shall be
subject to the approval of the Administrative Agent as to deductibles, loss
payees and insureds. Not less than fifteen (15) days prior to the expiration
dates of the Policies theretofore furnished to the Administrative Agent,
certificates of insurance evidencing the Policies accompanied by evidence
satisfactory to the Administrative Agent of

 

88

 

payment of the premiums
then due thereunder (the “Insurance Premiums”), shall be delivered by
the Borrower to the Administrative Agent; provided, however, that
no Event of Default shall result from the Borrower’s failure to deliver or
cause to be delivered such certificates or other evidence unless (i) on or
prior to the expiration date of the applicable Policy, the Administrative Agent
shall not have obtained certificates or other evidence satisfactory to it confirming
that the Policies required hereunder shall have been extended for an additional
period or shall have been replaced for an additional period with replacement
Policies that comply with the requirements set forth in this Section 8.05
and (ii) on or prior to the fifth (5th) Business Day after the
expiration of such expiring Policy, the Administrative Agent shall not have
received certificates of insurance evidencing the extension of the existing
Policies or replacement Policies for an additional period accompanied by
evidence satisfactory to the Administrative Agent of payment of the Insurance
Premiums then due thereunder.

 

(c)           Each
Policy shall (i) provide that adjustment and settlement of any claim equal to
or in excess of the Insurance Threshold Amount shall be subject to the approval
of the Administrative Agent in accordance with Section 10.01(b); provided
that so long as no Event of Default exists, the Borrower may, upon notice to
the Administrative Agent, settle and adjust any claim with respect to a
Casualty Event in excess of the Insurance Threshold Amount without the prior
consent of the Administrative Agent and the Borrower is hereby authorized to
collect the Insurance Proceeds with respect to any such claim; provided
that such adjustment is carried out in a competent and timely manner; (ii)
include permission by the insurer for the parties to the transaction to waive
all rights of subrogation against each other; (iii) to the extent such
provisions are reasonably obtainable, provide that such insurance shall not be
impaired or invalidated by virtue of (1) any act, failure to act or negligence
of, or violation of declarations, warranties or conditions contained in such
policy by, the Borrower, the Administrative Agent, the Lenders or any other
named insured, additional insured, or loss payee, except for the willful
misconduct of the Administrative Agent or the Lenders knowingly in violation of
the conditions of such Policy or (2) any foreclosure or other proceeding or
notice of sale relating to the Projects; (iv) be subject to a deductible, if
any, not greater than $10,000 (except as otherwise specifically provided in or
permitted by Section 8.05(a)); (v) contain an endorsement providing that
none of the Administrative Agent, the Lenders or the Borrower shall be, or
shall be deemed to be, a co-insurer with respect to any risk insured by such
Policy; (vi) include effective waivers by the insurer of all claims for
insurance premiums against any loss payees, additional insureds and named
insureds (other than the Borrower Parties); (vii) provide that if all or any
part of such Policy shall be canceled or terminated, or shall expire, the
insurer will forthwith give notice thereof to each named insured, additional
insured and loss payee and that no cancellation, termination, expiration,
reduction in amount of, or material change (other than an increase) in,
coverage thereof shall be effective until at least thirty (30) days after
receipt by each named insured, additional insured and loss payee of written
notice thereof; and (viii) provide that the Administrative Agent shall not be
liable for any Insurance Premiums thereon or subject to any assessments
thereunder.

 

(d)           If
any such Insurance Proceeds required to be paid to the Administrative Agent are
instead made payable to the Borrower, the Borrower hereby appoints the
Administrative Agent as its attorney-in-fact, irrevocably and coupled with an
interest, to endorse and/or transfer any such payment to the Administrative
Agent (on behalf of the Lenders).

 

89

 

(e)           Except
as otherwise provided by the terms of the blanket insurance policies maintained
by the Borrower and/or its Affiliates with respect to the Borrower and the
Projects as of the Closing Date, or comparable blanket policies that may be
obtained by the Borrower and/or its Affiliates after the Closing Date, any
blanket insurance Policy shall specifically allocate to the Projects the amount
of coverage from time to time required hereunder and shall otherwise provide
the same protection as would a separate Policy insuring only the Projects in
compliance with the provisions of Section 8.05(a).

 

(f)            All
Policies of insurance provided for or contemplated by Section 8.05(a)
shall be primary coverage and, except for the Policy referenced in Section 8.05(a)(v),
shall name the Borrower as the insured and the Administrative Agent (on behalf
of the Lenders) and its successors and/or assigns as the additional insured (or
in the case of property insurance, as the “mortgagee”), as its interests may
appear, and in the case of property damage, boiler and machinery, flood,
earthquake and terrorism insurance, shall contain a standard non-contributing
mortgagee endorsement in favor of the Administrative Agent providing that the
loss thereunder shall be payable to the Administrative Agent. The Borrower
shall not procure or permit any of its constituent entities to 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 the Administrative
Agent or the Borrower to collect any proceeds under any of the Policies. All
polices must EXACTLY state the following: Eurohypo AG, New York Branch Its
successors and assigns 1114 Avenue of the Americas 29th Floor New
York, NY 10036 Attn: Director of Portfolio Operations.

 

(g)           Without
limiting the obligations of the Borrower under the foregoing provisions of this
Section 8.05, if at any time the Administrative Agent is not in receipt
of written evidence that all insurance required hereunder is in full force and
effect, the Administrative Agent shall have the right, without notice to the
Borrower, to take such action as the Administrative Agent deems necessary to
protect its interest in the Projects, including, without limitation, the
obtaining of such insurance coverage as the Administrative Agent in its sole
discretion deems appropriate and all premiums incurred by the Administrative
Agent in connection with such action or in obtaining such insurance and keeping
it in effect shall be paid by the Borrower to the Administrative Agent upon
demand and until paid shall be secured by the Deed of Trust and shall bear
interest at the Post-Default Rate.

 

(h)           In
the event of foreclosure of the Deed of Trust or other transfer of title to any
Project in extinguishment in whole or in part of the obligations thereunder,
all right, title and interest of the Borrower in and to the Policies that are
not blanket Policies then in force concerning such Project and all proceeds
payable thereunder shall thereupon vest in the purchaser at such foreclosure or
the Administrative Agent or other transferee in the event of such other
transfer of title.

 

(i)            The
Polices shall be issued by financially sound and responsible insurance
companies authorized to do business in the state in which the Projects are
located and be approved by the Administrative Agent. The insurance companies
shall have (i) a general policy and claims paying ability rating of A or better
and a financial class of IX or better (and, as to the coverages for terrorism,
terrorist acts and earthquake, a general policy and claims paying ability
rating of A minus or better and a financial class of VII or better) by A.M.
Best Company, Inc.; 

 

90

 

provided,
however, that the Borrower shall be permitted to maintain (at levels
other than the primary layer of insurance) up to twenty percent (20%) of the
total required all-risk insurance coverage required under subsection
8.05(a)(i) with insurance companies having a general policy and claims
paying ability rating of less than A and a financial class of less than IX provided
such companies have at least a general policy and claims paying ability rating
of A minus or better and a financial class of VII or better, provided such
insurance companies are also issuing earthquake coverage to the Borrower or
(ii) an investment grade rating for claims paying ability of “AA” by S&P or
the equivalent rating by one or more credit rating agencies approved by the
Administrative Agent.

 

8.06         Real
Estate Taxes and Other Charges.

 

(a)           Subject
to the provisions of subsection (b) of this Section 8.06, the
Borrower shall pay all Real Estate Taxes and Other Charges now or hereafter
levied or assessed or imposed against each Project or any part thereof before
fine, penalty, interest or cost attaches thereto. Subject to the provisions of subsection
(b) of this Section 8.06, upon the request of the Administrative
Agent, the Borrower shall furnish to the Administrative Agent receipts for, or
other evidence reasonably satisfactory to the Administrative Agent of, the
payment of Real Estate Taxes and Other Charges in compliance with this Section 8.06.

 

(b)           After
prior written notice to the Administrative Agent, the Borrower, at its own
expense, may contest by appropriate legal proceedings or other appropriate
actions, promptly initiated and conducted in good faith and with due diligence,
the amount or validity or application in whole or in part of any Real Estate
Taxes and Other Charges, provided that:

 

(i)            Reserved;

 

(ii)           the
Borrower shall pay the Real Estate Taxes and Other Charges under protest unless
such proceeding shall suspend the collection of the Real Estate Taxes and Other
Charges;

 

(iii)          such
proceeding shall be permitted under and be conducted in accordance with the
applicable provisions of any other instrument governing the contest of Real
Estate Taxes or Other Charges to which the Borrower or the Projects is subject
and shall not constitute a default thereunder;

 

(iv)          such
proceeding shall be conducted in accordance with all Applicable Laws;

 

(v)           neither
the Projects nor any part thereof or interest therein will, in the reasonable
opinion of the Administrative Agent, be in danger of being sold, forfeited,
terminated, cancelled or lost during the pendency of the proceeding;

 

(vi)          unless
paid under protest, the Borrower shall have furnished such security as may be
required in the proceeding, or as may be reasonably requested by the
Administrative Agent (but in no event less than 110% of the Real Estate Taxes
or Other Charges being contested), to insure the payment of any such Real
Estate Taxes and Other Charges, together with all interest and penalties
thereon; and

 

91

 

(vii)         the
Borrower shall promptly upon final determination thereof or upon the failure of
the existence of (ii), (iii), (iv) or (v) above pay the
amount of such Real Estate Taxes or Other Charges, together with all costs,
interest and penalties.

 

8.07         Maintenance
of the Projects; Alterations. The Borrower shall:

 

(i)            maintain
or cause to be maintained each Project in good condition and repair in a manner
consistent with a Class-A office building located in the relevant submarket in
which such Project is located in Los Angeles County, California, and make all
reasonably necessary repairs or replacements thereto;

 

(ii)           except
for work that constitutes required work under Section 8.21, not remove,
demolish or structurally alter, or permit or suffer the removal, demolition or
structural alteration of, any of the Improvements or make any alteration that
may have a Material Adverse Effect or involve a cost in the aggregate for such
alteration and all other alterations involving a single work of improvement (or
related group of improvements) which is anticipated to exceed the lesser of (A)
$5,000,000 or (B) ten percent (10%) of the Appraised Value of such Project,
without the prior consent of the Administrative Agent; provided, however,
that the Administrative Agent’s consent shall not be required for tenant
improvement work performed pursuant to the terms and provisions of an Approved
Lease which (upon completion of such work) does not adversely affect any
structural component of any Improvements, any utility or HVAC system contained
in any Improvements or the exterior of any building (excluding signage or other
alterations that would not otherwise require the consent of the Administrative
Agent under this Section 8.07(ii) in the absence of this proviso) constituting
a part of any Improvements at any Project; and provided, further,
that the Administrative Agent’s consent shall not be unreasonably withheld for any
alterations that are required by Applicable Law and otherwise require the
consent of the Administrative Agent under this Section 8.07(ii);

 

(iii)          complete
promptly and in a good and workmanlike manner any Improvements which may be
hereafter constructed and, subject to the terms of the Loan Documents
(including, without limitation, Section 10.03), promptly restore (in
compliance with Section 10.03) in like manner any portion of the
Improvements which may be damaged or destroyed thereon from any cause
whatsoever, and pay when due all claims for labor performed and material
furnished therefor, subject to the Borrower’s right to contest any such claims
(as long as, with respect to any claim for which a mechanic’s lien has been
filed, such contested claims have been bonded over to the satisfaction of the
Administrative Agent within thirty (30) days of the date of filing);

 

(iv)          not
commit, or permit, any waste of the Projects; and

 

(v)           not
remove any item from the Projects without replacing it with a comparable item
of equal quality, value and usefulness, except that the Borrower may sell or
dispose of in the ordinary course of the Borrower’s business any property which
is obsolete.

 

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8.08         Further
Assurances. The Borrower will, and will cause each of the other Borrower
Parties to, promptly upon request by the Administrative Agent, execute any and
all further documents, agreements and instruments, and take all such further
actions which may be required under any applicable law, or which the
Administrative Agent may reasonably request, to effectuate the Transactions,
all at the sole cost and expense of the Borrower. The Borrower, at its sole
cost and expense, shall take or cause to be taken all action required or
requested by the Administrative Agent to maintain and preserve the Liens of the
Security Documents and the priority thereof. The Borrower shall from time to
time execute or cause to be executed any and all further instruments, and
register and record such instruments in all public and other offices, and shall
take all such further actions, as may be necessary or requested by the
Administrative Agent for such purposes, including timely filing or refiling all
continuations and any assignments of any such financing statements, as
appropriate, in the appropriate recording offices.

 

8.09         Performance
of the Loan Documents. The Borrower shall observe, perform and satisfy all
the terms, provisions, covenants and conditions required to be observed,
performed or satisfied by it under the Loan Documents, and shall pay when due
all costs, fees and expenses required to be paid by it under the Loan Documents.

 

8.10         Books
and Records; Inspection Rights. The Borrower will, and will cause each of
the other Borrower Parties to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause each
of the other Borrower Parties to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties (subject to the proviso set forth in Section 8.11(a)),
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times (during normal business hours) and as often as
reasonably requested.

 

8.11         Environmental
Compliance.

 

(a)           Environmental
Covenants. The Borrower covenants and agrees that:

 

(i)            all
uses and operations on or of each Project, whether by the Borrower or any other
Person, shall be in compliance with all Environmental Laws and permits issued
pursuant thereto;

 

(ii)           except
for Releases incidental to the Use of Hazardous Substances permitted by clause
(iii) below and in compliance with all Applicable Laws, the Borrower shall
not permit a Release of Hazardous Substances in, on, under or from any Project;

 

(iii)          the
Borrower shall not knowingly permit Hazardous Substances in, on, or under any
Project, except those that are in compliance with all Environmental Laws and of
types and in quantities customarily used in the ownership, operation and
maintenance of buildings similar to the Projects (i.e., materials used in
cleaning and other building operations) and shall undertake to supervise and
inspect activities occurring on the Projects as may be reasonably prudent to
comply with the foregoing obligation;

 

93

 

(iv)          except
as disclosed in Schedule 8.11 or as specifically described in the
Environmental Reports, the Borrower shall not permit any underground storage
tanks to be in, on, or under any Project, and shall operate, maintain, repair
and replace any such underground storage tank so disclosed in compliance with
all Applicable Laws;

 

(v)           Reserved;

 

(vi)          the
Borrower shall keep each Project free and clear of all Liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of the Borrower or any other Person (collectively, “Environmental
Liens”);

 

(vii)         notwithstanding
clause (iii) above, the Borrower shall not, or knowingly permit any
other Person to, install any asbestos or asbestos containing materials on any
Project, and shall upon and following the Closing Date implement, comply with
and maintain in effect an operations and maintenance program with respect to
any existing asbestos or asbestos containing materials located at any Project;

 

(viii)        the
Borrower shall cause the Remediation of such Hazardous Substances present on,
under or emanating from any Project, or migrating onto or into any Project, in
accordance with this Agreement and applicable Environmental Laws subject to the
right to contest such Remediation in accordance with Section 7(a) of the
Environmental Indemnity; and

 

(ix)           the
Borrower shall provide the Administrative Agent, the Lenders and their
representatives (A) with access, upon prior reasonable notice, at
reasonable times (during normal business hours) to all or any portion of any
Project for purposes of inspection; provided that such inspections shall
not unreasonably interfere with the operation of such Project or the tenants or
occupants thereof, and shall be subject to the rights of tenants under their
Leases, and the Borrower shall cooperate with the Administrative Agent, the
Lenders and their representatives in connection with such inspections,
including, but not limited to, providing all relevant information and making
knowledgeable persons available for interviews and (B) promptly upon
request, copies of all environmental investigations, studies, audits, reviews
or other analyses conducted by or that are in the possession or control of the
Borrower in relation to any Project, whether heretofore or hereafter obtained.

 

(b)           Environmental
Notices. The Borrower shall promptly provide notice to the Administrative
Agent of:

 

(i)            all
Environmental Claims asserted or threatened against the Borrower or any other
Person occupying any Project or any portion thereof or against any Project
which become known to the Borrower;

 

(ii)           the
discovery by the Borrower of any occurrence or condition on any Project or on
any real property adjoining or in the vicinity of any Project which could
reasonably be expected to lead to an Environmental Claim against the Borrower,
any Project, the Administrative Agent or any of the Lenders;

 

94

 

(iii)          the
commencement or completion of any Remediation at any Project; and

 

(iv)          any
Environmental Lien filed against any Project.

 

In
connection therewith, the Borrower shall transmit to the Administrative Agent
copies of any citations, orders, notices or other written communications
received from any Person and any notices, reports or other written
communications and copies of any future Environmental Reports whether or not submitted
to any Governmental Authority with respect to the matters described above.

 

8.12         Management
of the Projects.

 

(a)           The
Borrower shall (i) cause each Project to be managed by the Property Manager in
accordance with the Property Management Agreement, (ii) promptly perform and
observe all of the material covenants required to be performed and observed by
the Borrower under the Property Management Agreement and do all things
necessary to preserve and to keep unimpaired its material rights thereunder,
(iii) promptly notify the Administrative Agent of any material default under
the Property Management Agreement of which it is aware and (iv) promptly
enforce the performance and observance of all of the material covenants
required to be performed and observed by the Property Manager under the Property
Management Agreement.

 

(b)           If
(i) an Event of Default exists, (ii) the Property Manager is
insolvent, or (iii) the Property Manager is in default of any material covenant
or obligation under the Property Management Agreement beyond the expiration of
any applicable grace period set forth therein, the Borrower shall, at the
request of the Administrative Agent, promptly terminate the Property Management
Agreement and replace the Property Manager with a property manager approved by
the Administrative Agent pursuant to a Property Management Agreement on terms
and conditions reasonably satisfactory to the Administrative Agent.

 

8.13         Leases.
The Borrower shall (a) upon the Closing Date, assign to the Administrative
Agent (on behalf of the Lenders) any and all Leases, and/or all Rents payable
thereunder, including, but not limited to, any Lease which is now in existence
or which may be executed after the Closing Date, (b) promptly perform and
fulfill, or cause to be performed and fulfilled, each and every material term
and provision of the Borrower’s obligations under the Leases, including the
performance of any tenant improvement work required with respect thereto, (c)
give to the Administrative Agent a copy of each notice of default given to any
tenant under a Major Lease or sent by any tenant thereunder to the Borrower,
(d) consistent with good business practices and in the best interests of
the affected Project, enforce its rights with regard to all Leases unless
otherwise approved by the Administrative Agent, (e) use its commercially
reasonable efforts to lease the Projects, and (f) diligently enforce the terms
of each Lease with respect to any construction work to be performed by the
tenant thereunder so that such work is performed in a manner which will cause a
minimum amount of disruption to the tenants then in occupancy at any such
Project and in a manner so as not to cause a default by the Borrower under any
other tenants’ Leases or provide the basis for any abatement or set off by any
other tenant of the rent payable under any such Lease, or a claim by any other
tenant for breach of warranty of habitability or similar claim.

 

95

 

8.14         Tenant
Estoppels. At the Administrative Agent’s request, at any time while an
Event of Default exists and otherwise from time to time upon the joint
agreement of the Borrower and the Administrative Agent, with each acting
reasonably, the Borrower shall request and use commercially reasonable efforts
to obtain and furnish to the Administrative Agent written estoppels in form and
substance satisfactory to the Administrative Agent, executed by tenants under
Leases in any Project and confirming the term, rent, and other provisions and
matters relating to the Leases. Borrower further hereby agrees that, while an
Event of Default exists, the Administrative Agent may exercise all rights of
the Borrower under the Leases to request the delivery of estoppels from the
tenants thereunder.

 

8.15         Subordination,
Non-Disturbance and Attornment Agreements. The Borrower shall use
commercially reasonable efforts to provide to the Administrative Agent SNDA
Agreements executed by each tenant under a Major Lease prior to the Closing
Date; provided, however, that in addition to the obligations set
forth in Section 9.09(c), if the Borrower does not obtain all such SNDA
Agreements by the Closing Date, the Borrower shall continue to use commercially
reasonable efforts to obtain such SNDA Agreements after the Closing Date.

 

8.16         Operating
Plan and Budget.

 

(a)           Commencing
with the budget for the calendar year 2006 and then annually thereafter, the
Borrower shall submit to the Administrative Agent an annual budget for each
Project (each an “Annual Budget”), in form and substance reasonably
satisfactory to the Administrative Agent setting forth in detail budgeted
monthly Operating Income and monthly Operating Expenses for each such Project
(which may be in the form of the calendar year 2005 budget for each Project
provided to the Administrative Agent prior to the Closing Date). The Annual
Budget for each year shall be delivered together with the annual financial
statement for the preceding year pursuant to Section 8.01(a). During any
Low DSCR Trigger Period but not otherwise, the Administrative Agent shall have
the right to approve such Annual Budget (including, without limitation, the
Annual Budget for the portions of the calendar year in which such Low DSCR
Trigger Period occurs following after the commencement of such Low DSCR Trigger
Period). Within fifty (50) days following the end of any calendar quarter which
comprises a Low DSCR Trigger Period, the Borrower shall deliver to the
Administrative Agent for its approval the Annual Budget (in the format as
described above) for the calendar year in which such Low DSCR Trigger Period
occurs (together with a reconciliation to that Annual Budget of actual revenues
and expenses year-to-date), and shall thereafter deliver to Administrative
Agent for its approval the Annual Budget (in the format as described above)
proposed by the Borrower for the succeeding calendar year, by no later than the
November 15 preceding such calendar year. The Administrative Agent shall not
unreasonably withhold its approval of any Annual Budget as required hereunder; provided,
however, that if during any Low DSCR Trigger Period the actual monthly
Operating Expenses exceed budgeted Operating Expenses in any month during any
period by more than ten percent (10%), the Administrative Agent shall have the
right to require the Borrower to submit for its approval a revised Annual
Budget for review and approval by the Administrative Agent in its sole
discretion. If the Administrative Agent objects to any proposed Annual Budget
for which approval is required hereunder, the Administrative Agent shall advise
the Borrower of such objections within fifteen (15) Business Days after receipt
thereof (and deliver to the Borrower a reasonably detailed description of such
objections), and the Borrower shall within five (5) days after receipt of
notice

 

96

 

of any such objections
revise such Annual Budget and resubmit the same to the Administrative Agent
(such procedure to be repeated until such time as the Administrative Agent
shall approve such Annual Budget). Each such Annual Budget submitted to and (to
the extent that such approval is required hereunder) approved by the
Administrative Agent in accordance with terms hereof, as well as the budget for
the current calendar year approved by the Administrative Agent on the Closing
Date, shall hereinafter be referred to as an “Approved Annual Budget”. Until
such time that the Administrative Agent has approved a proposed Annual Budget
for which its approval is required hereunder, the most recently Approved Annual
Budget shall apply for purposes of this Section 8.16; provided
that such Approved Annual Budget shall be adjusted to reflect actual increases
in real estate taxes, insurance premiums, utilities expenses and other fixed
costs and shall otherwise be adjusted to reflect any change during the
preceding year in the Consumer Price Index. Notwithstanding the foregoing, the
Administrative Agent and the Lenders acknowledge that the Borrower is not
required to operate under the terms of an Approved Annual Budget during any
period other than a Low DSCR Trigger Period.

 

(b)           During
any Low DSCR Trigger Period, the Borrower may at any time propose an amendment
to an Approved Annual Budget for any Project for the remainder of the calendar
year in which such Low DSCR Trigger Period has occurred, and, when approved as
provided below, such amended Approved Annual Budget for such Project shall be
deemed to be and shall be effective as the Approved Annual Budget for such
Project for such calendar year. Prior to making any expenditures not reflected
in any current Approved Annual Budget in excess of ten percent (10%) of the
budgeted amount therefor, the Borrower shall propose an amendment to such
Approved Annual Budget to the Administrative Agent for its approval in
accordance with the standards for the granting or withholding of consent to
Annual Budgets set forth in Section 8.16(a). The Administrative Agent shall
have fifteen (15) Business Days after receipt of any proposed amendment to such
Approved Annual Budget to approve or disapprove such proposed amendment.

 

8.17         Operating
Expenses. The Borrower shall pay all known costs and expenses of operating,
maintaining, leasing and otherwise owning the Projects on a current basis and
before same become delinquent (subject however to the other provisions of this
Agreement and the other Loan Documents), including all interest, principal
(when due) and other sums required to be paid under this Agreement, the other
Loan Documents and the Hedge Agreement, before utilizing any revenues derived
or to be derived from or in respect of the Projects for any other purpose,
including distributions or other payments to the Borrower’s Member.

 

8.18         Margin
Regulations. No part of the proceeds of the Loans will be used for the
purpose of purchasing or acquiring any “margin stock” within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System or for any
other purpose which would be inconsistent with such Regulation T, U, X or any
other Regulations of such Board of Governors, or for any purposes prohibited by
Legal Requirements.

 

8.19         Hedge
Agreements.

 

(a)           The
Borrower shall obtain, or cause to be obtained by an Other Swap Pledgor, no
later than thirty (30) days after the Closing Date and will at all times
thereafter maintain, or cause to be maintained by an Other Swap Pledgor, in
full force and effect one or

 

97

 

more Hedge Agreements in
the aggregate notional amount equal to one hundred percent (100%) of the
Outstanding Principal Amount of the Loans made to the Borrower and the Westwood
Place Borrower from time to time (the “Aggregate Notional Amount”) approved
by the Administrative Agent in its reasonable discretion with (i) Eurohypo
or its Affiliates or (ii) one or more other banks or insurance companies
as counterparties (each a “Third-Party Counterparty”), which is
effective to cause the All-in-Rate as to the Aggregate Notional Amount
commencing no later than the date that is thirty (30) days after the Closing
Date (or, if such day is not a Business Day, the first Business Day thereafter)
to be not in excess of eight percent (8.0%) per annum through the Hedging
Termination Date. Upon the Closing Date, the Borrower shall deliver, or cause
to be delivered by an Other Swap Pledgor, a Hedge Agreement Pledge,
substantially in the form of Exhibit G-1 attached hereto, together with,
within thirty (30) days after the Closing Date, the applicable bid package,
confirmation and other documentation for such Hedge Agreement (including,
without limitation, a certificate from an Authorized Officer of the Borrower
certifying that a Hedge Agreement has been entered into on the terms set forth
in the confirmation) as may be reasonably acceptable to the Administrative
Agent evidencing compliance with the Borrower’s obligations under the
provisions of this Section 8.19, and within ten (10) days after the
delivery of each such Hedge Agreement (or within the thirty (30) day period
referred to above)  shall deliver the
applicable counterparty acknowledgment. Any Hedge Agreement shall require
monthly fixed rate and floating rate payments and be based on a LIBO Rate of
interest having, at the Borrower’s option, successive Interest Periods (an “Interest
Rate Hedge Period”) of one, two, three, six or twelve months or such other
Interest Periods satisfactory to the Administrative Agent in its reasonable
discretion. Notwithstanding anything to the contrary contained in this Section
8.19, the Borrower or any Other Swap Pledgor shall be entitled to enter into
one or more Hedge Agreements in excess of the Aggregate Notional Amount, up to
the total amount of the Commitments or providing interest rate protection for
periods that extend beyond the Hedging Termination Date (each such agreement,
but only to the extent that it, after giving effect to all other Hedge
Agreements maintained pursuant to this Section 8.19(a), relates to a
notional amount in excess of the Aggregate Notional Amount or provides interest
rate protection for periods that extend beyond the Hedging Termination Date, is
referred to herein as an “Excess Hedge Agreement”) on terms acceptable
to the Borrower or such Other Swap Pledgor; provided, however, that
Borrower shall deliver, or cause to be delivered by an Other Swap Pledgor, upon
the Administrative Agent’s request in accordance with the time requirements set
forth in this Section 8.19(a), a Hedge Agreement Pledge with
respect to each Excess Hedge Agreement, substantially in the form of Exhibit
G-2 attached hereto, together with the counterparty’s acknowledgment and
other instruments provided to be delivered thereunder.

 

(b)           The
Borrower’s obligations under any Hedge Agreement shall not be secured by the
Deeds of Trust and shall not be secured by any Lien on or in all or any portion
of the collateral under the Security Documents, any direct or indirect interest
in the Borrower or any other Property (other than as permitted pursuant to Section
9.02(i)).

 

(c)           Any
Hedge Agreement with a Third-Party Counterparty is herein called a “Third-Party
Hedge Agreement.”  With respect to each
Third-Party Hedge Agreement maintained with respect to the Aggregate Notional
Amount and each Excess Hedge Agreement pledged to the Administrative Agent
pursuant to Section 8.19(a):  (i)
the Third-Party Counterparty providing such Third-Party Hedge Agreement must
have a long term credit rating no lower than “A” from S&P or “A2” from
Moody’s at the time of entry into such Third-Party

 

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Hedge Agreement; provided,
however, if there is a difference in the then current S&P rating and
the Moody’s rating, the lesser rating shall be applicable; (ii) the form
and substance thereof must be satisfactory to the Administrative Agent in its
reasonable discretion and in all respects and (iii) each counterparty
thereunder shall have delivered to the Administrative Agent a counterparty’s
acknowledgment in the form attached to the Hedge Agreement Pledge applicable
thereto (or in such other form as may be acceptable to the Administrative Agent
in its reasonable discretion).

 

(d)           Reserved.

 

(e)           If
the Borrower fails for any reason or cause whatsoever to secure and maintain,
or cause to be secured and maintained by an Other Swap Pledgor, a Hedge
Agreement with respect to the Aggregate Notional Amount as and when required to
do so hereunder, such failure shall constitute an Event of Default and the
Administrative Agent shall be entitled to exercise all rights and remedies
available to it under this Agreement (for the benefit of the Lenders) and the
other Loan Documents or otherwise, including the right (but not the obligation)
of the Administrative Agent to secure or otherwise enter into one or more Hedge
Agreements with respect to the Aggregate Notional Amount with a Lender for and
on behalf of the Borrower without such action constituting a cure of such Event
of Default and without waiving the Administrative Agent’s or the Lenders’
rights arising out of or in connection with such Event of Default. If the
Administrative Agent shall enter into a Hedge Agreement with a Lender in
accordance with its right to do so pursuant to this subsection (e), then
(i) the terms and provisions of any such Hedge Agreement, including the term
thereof, shall be determined by the Administrative Agent in its sole discretion
(except that the maximum notional amount of all such Hedge Agreements shall not
exceed the Aggregate Notional Amount) and (ii) the Borrower shall pay all of
the Administrative Agent’s costs and expenses in connection therewith,
including any fees charged by the applicable counterparty, attorneys’ fees and
disbursements, and the cost of additional title insurance in an amount
determined by the Administrative Agent to be necessary to protect the
Administrative Agent and the Lenders from potential funding losses under any
Hedge Agreement provided by a Lender.

 

(f)            Reserved.

 

(g)           If
the Borrower or Other Swap Pledgor is entitled to receive a payment upon the
termination of any Hedge Agreement required by this Section 8.19, or,
while any Event of Default exists, under any Excess Hedge Agreement pledged to
the Administrative Agent pursuant to Section 8.19(a) (it being
understood that any termination payment paid with respect to any Excess Hedge
Agreement shall be delivered to the Borrower or Other Swap Pledgor at any time
while an Event of Default does not exist) such payment shall be delivered to
the Administrative Agent and applied by the Administrative Agent to any amounts
due to the Administrative Agent or the Lenders under the Loan Documents evidencing
the Loans to the Borrower and the Westwood Place Borrower (it being understood
that any such payment applied to the principal of the Loans to the Borrower and
the Westwood Place Borrower shall be deemed a prepayment of such principal, and
shall be accompanied by any applicable prepayment premium resulting from such
prepayment, or such termination payment shall be applied in part to pay such
principal and in part to pay such prepayment premium) in such order and
priority as the Administrative Agent shall determine in its sole discretion. Notwithstanding
the foregoing, if

 

99

 

(i) at any time upon
or following any principal prepayment made pursuant to Section 2.06 the
Outstanding Principal Amount is reduced and the Borrower or Other Swap Pledgor elects
at its option to terminate or partially to terminate, or to reduce the notional
amount of, any Hedge Agreement (or is required under the terms of such Hedge
Agreement to do so) in a notional amount (in either such case) not exceeding,
respectively, the amount by which the aggregate notional amount in effect under
the Hedge Agreements then maintained pursuant hereto (other than Excess Hedge
Agreements unless pledged pursuant to the Hedge Agreement Pledge substantially
in the form of Exhibit G-1 attached hereto) exceeds the Aggregate
Notional Amount then required to be hedged pursuant hereto or (ii) the
Borrower or Other Swap Pledgor elects, in full compliance with the terms of
each Hedge Agreement Pledge, to deliver to the Administrative Agent, in
substitution for a Hedge Agreement, a substitute Hedge Agreement, then the
Borrower or Other Swap Pledgor shall have the right to do so, and if the
Borrower or Other Swap Pledgor is entitled (in the case of either (i) or (ii)
above) to receive a termination payment from the counterparty in connection
therewith, then, provided that no Event of Default then exists, the Borrower or
Other Swap Pledgor shall have the right to receive and retain such termination
payment free and clear of the Lien of the Hedge Agreement Pledge, provided,
that, after giving effect to any such termination or substitution, the Borrower
remains in compliance with its obligations under Section 8.19(a) with
respect to the maintenance of Hedge Agreements with respect to the Aggregate
Notional Amount then required to be hedged pursuant hereto and has complied (or
caused the Other Swap Pledgor to comply) with the applicable conditions
precedent set forth in Section 6(e) of the Hedge Agreement Pledge and the
certification obligations with respect thereto set forth in the applicable
Hedge Agreement Pledge and the Acknowledgment of Security Interest delivered
pursuant thereto. The Borrower or Other Swap Pledgor shall have the right to
terminate, reduce the notional amount of or modify any Excess Hedge Agreement
and to receive any payments from the counterparty thereunder resulting
therefrom, provided that if an Event of Default exists and such Excess Hedge
Agreement has been pledged to the Administrative Agent, then the rights and
obligations of the Borrower (or Other Swap Pledgor) and the Administrative
Agent with respect thereto shall be the same as their respective rights and
obligations with respect to Hedge Agreements maintained with respect to the
Aggregate Notional Amount.

 

(h)           Upon
securing any Hedge Agreement required under this Section 8.19, or any
Excess Hedge Agreement pledged to the Administrative Agent pursuant to Section
8.19(a) the Borrower agrees that the economic and other benefits of such Hedge
Agreement and all of the other rights of the Borrower or Other Swap Pledgor thereunder
shall be collaterally assigned to the Administrative Agent as additional
security for the Loans for the ratable benefit of the Lenders, pursuant to a
Hedge Agreement Pledge. All Hedge Agreement Pledges shall be accompanied by
(i) Uniform Commercial Code financing statements, in duplicate, with
respect to such pledges and (ii) within ten (10) days after delivery of
the applicable Hedge Agreement Pledge (or within such longer period as provided
in Section 8.19(a) above), a counterparty’s acknowledgment in the
form attached to the Hedge Agreement Pledge applicable thereto (or in such
other form as may be acceptable to the Administrative Agent in its reasonable
discretion) from each counterparty under each Hedge Agreement.

 

(i)            Notwithstanding
the provisions of Section 8.19(a), following the delivery of any notice
of full or partial prepayment delivered by the Borrower pursuant to Section 2.06(a) or any notice
of a proposed release of a Project pursuant to Section 2.06(c), Borrower’s

 

100

 

obligation to maintain,
or cause to be maintained, any Hedge Agreement required under Section
8.19(a) shall be suspended with respect to the full Aggregate Notional
Amount (in the case of a notice of full prepayment) or the portion of the
Aggregate Notional Amount equal to the amount to be prepaid in the case of a
partial prepayment or pursuant to Section 2.09(a)(ii) in connection with
the release of a Project (in the case of a notice of partial prepayment or
notice of the release of a Project), and Borrower or the Other Swap
Pledgor may terminate or reduce the notional amount of any Hedge Agreement
theretofore entered into with respect to such suspended portion of the Aggregate Notional Amount;
provided, however, that if such notice of prepayment or release is subsequently
revoked, or if such prepayment or release does not occur on or prior to the
date identified in such notice of prepayment or release (as such date may be
postponed in accordance with the provisions of this Agreement), then the
suspension of such obligation shall terminate, and Borrower shall be obligated
to enter into and thereafter maintain, or to cause an Other Swap Pledgor to
enter into and thereafter maintain, one or more Hedge Agreements in full
compliance with Section 8.19(a) by not later than the end of a
cumulative period during which the Hedge Agreements otherwise required under Section
8.19(a) are not being maintained (with respect to all such notices of
prepayment or release in the aggregate) which shall not exceed (60) days in the
aggregate.

 

(j)            If
any Hedge Agreement delivered by the Borrower or Other Swap Pledgor to the
Administrative Agent shall, by its terms, expire during any period in which
Borrower remains obligated to maintain a Hedge Agreement in effect pursuant to Section
8.19(a), and as a result thereof the Borrower would not be in compliance
with its obligations under Section 8.19(a) with respect to the
maintenance of Hedge Agreements covering the Aggregate Notional Amount, then,
subject to the provisions of Section 8.19(i), the Borrower shall deliver,
or cause an Other Swap Pledgor to deliver, to the Administrative Agent a
replacement Hedge Agreement at least ten (10) Business Days prior to the
expiration date of the then current Hedge Agreement (so as to remain in
compliance with its obligations under Section 8.19(a) with respect to
the maintenance of Hedge Agreements) which replacement Hedge Agreement shall be
acceptable to the Administrative Agent in its reasonable discretion and
otherwise satisfy the requirements of this Section 8.19.

 

8.20         Reserved.

 

8.21         Required
Work. The Borrower shall cause the work described on Schedule 8.21
attached hereto to be completed on or before the applicable dates set forth on
said schedule. Such work shall be completed in a good and workmanlike manner,
lien-free and in accordance with all Applicable Laws. The Administrative Agent
shall have the right to inspect such work and the reasonable costs of such
inspection shall be paid by the Borrower. In addition, the Borrower
acknowledges receipt of the Environmental Reports and the Property Condition
Reports and agrees to address in its prudent business judgment the recommendations
contained in such reports.

 

101

 

ARTICLE VIIIA

AFFIRMATIVE COVENANTS OF THE

WESTWOOD PLACE BORROWER

 

The Westwood Place
Borrower covenants and agrees with the Lenders and the Administrative Agent
that, so long as any Westwood Place Commitment or Loan to the Westwood Place
Borrower is outstanding and until payment in full of all amounts payable by the
Westwood Place Borrower hereunder, the Westwood Place Borrower hereby covenants
and agrees to perform exactly the same covenants and agreements as are made by
the Borrower in Article VIII, as if, in each case as the context
requires, each reference therein to the “Borrower” or any “Borrower Party” or “Borrower
Parties” shall mean the Westwood Place Borrower, each reference therein to the “Loans”
shall mean the Loans to be made to the Westwood Place Borrower, each reference
therein to the “Commitment” shall mean the Westwood Place Commitment, each
reference therein to any “Project” shall mean the Westwood Place Project, each
reference therein to any Loan Document shall mean the applicable Loan Document
to which the Westwood Place Borrower is a party, if any, and each reference
therein to a “Default” or “Event of Default” shall mean a Westwood Place Default
or Westwood Place Event of Default, respectively; provided,  however,
that (a) the Westwood Place Borrower shall not be required to furnish
separate entity-level annual audited or quarterly financial statements under Section
8.01 with respect to the Westwood Place Borrower so long as the Westwood
Place Borrower is consolidated in the annual audited and quarterly financial
statements delivered by the Borrower, (b) the Westwood Place Borrower
shall not be required to furnish separate property-level financial statements
or reports under Section 8.01 with respect to the Westwood Place
Project, so long as separate property-level financial statements and reports
for the Westwood Place Project are included in the property-level financial
statements or reports provided by the Borrower, (c) the provisions of Section
8.01(d) shall only apply to information concerning the Westwood Place
Borrower or the Westwood Place Project, (d) the provisions of Section
8.01(f) shall not apply, and (e) any reference to Borrower’s Member in
Section 8.17 shall be deemed to refer to the members of the Westwood
Place Borrower.

 

ARTICLE
IX

NEGATIVE COVENANTS OF THE BORROWER

 

The Borrower covenants and agrees that, until the
payment in full of the Obligations, it will not do or permit, directly or
indirectly, any of the following:

 

9.01         Fundamental
Change.

 

(a)           Mergers;
Consolidations; Disposal of Assets. Except as expressly provided for in Section
14.31, none of the Borrower Parties will merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease (other than tenant leases pursuant to and in
accordance with Sections 8.13 and 9.09 of this Agreement) or
otherwise dispose of (in one transaction or in a series of transactions) any
substantial part of its Properties and assets whether now owned or hereafter
acquired (but

 

102

 

excluding any Transfer
permitted by Section 9.03 (including, without limitation, any sale or
disposition of any Excluded Projects) or any sale or disposition of Projects
subject to and in accordance with Section 2.09 of this Agreement or of
obsolete or excess furniture, fixture and equipment in the ordinary course of
business if same is unnecessary or is replaced with furniture, fixtures and
equipment of equal or greater value and utility), or wind up, liquidate or
dissolve, or enter into any agreement to do any of the foregoing.

 

(b)           Organizational
Documents. Without the prior written consent of the Administrative Agent,
the Borrower will not, and will not permit any of the other Borrower Parties
to, make any Modification of the terms or provisions of its Organizational
Documents, except: (i) Modifications necessary to clarify existing
provisions of such Organizational Documents, (ii) Modifications which would
have no adverse, substantive effect on the rights or interests of the Lenders
in conjunction with the Loans or under the Loan Documents,
(iii) Modifications necessary to effectuate Transfers to the extent expressly
permitted in this Agreement; or (iv) Modifications of the Organizational
Documents for Borrower Parties other than the Borrower which are necessary to
effectuate the Permitted Reorganization.

 

9.02         Limitation
on Liens. None of the Borrower, the Borrower’s Member nor any of their
respective Subsidiaries shall create, incur, assume or suffer to exist any Lien
upon or with respect to any of its Property, now owned or hereafter acquired; provided,
however, that the following shall be permitted Liens except (in the case
of any Lien described in clauses (d), (f) or (g) below) to
the extent that they would encumber any interest in any Project, any other asset
which is collateral for the Loans or any interest in Borrower:

 

(a)           the
Liens created by the Loan Documents; any Permitted Title Exceptions affecting
the Projects; any Permitted Liens; and any Lien for the performance of work or
the supply of materials affecting any Property (unless, in the case of any such
Lien affecting any Project, the Borrower or the Borrower’s Member fails to
discharge such Lien by payment or bonding (in accordance with statutory bonding
requirements the effect of which is to release such Lien from the affected
Project and to limit the Lien claimant’s rights to a recovery on the bond) on
or prior to the date that is the earlier of (i) thirty (30) days after the date
of filing of such lien against such Project and (ii) the date on which the
Project (or the Borrower’s interest therein) is in danger of being sold, forfeited,
terminated, canceled or lost);

 

(b)           Liens
for taxes or assessments or other government charges or levies if not yet
delinquent or if they are being contested in good faith by appropriate
proceedings in accordance with Sections 8.04(b) and/or 8.06(b),
if applicable;

 

(c)           Liens
imposed by law, such as mechanic’s, materialmen’s, landlord’s, warehousemen’s
and carrier’s Liens, and other similar Liens securing obligations incurred in
the Borrower’s or the Borrower’s Member’s or their respective Subsidiary’s ordinary
course of business which, in the case of the Projects, are not past due for
more than thirty (30) days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;

 

(d)           Liens
or pledges to secure the performance of bids, tenders, contracts (other than
contracts for the payment of money), leases, public or statutory obligations,
surety,

 

103

 

stay, appeal, indemnity,
performance or other similar bonds, or other similar obligations arising in the
ordinary course of the Borrower’s or the Borrower’s Member’s or their
respective Subsidiary’s business;

 

(e)           Judgment
and other similar Liens (which shall be subordinate to the Liens of the Deeds
of Trust, in the case of any such Lien encumbering any Project or the Borrower’s
interest therein) in an aggregate amount not in excess of $1,000,000 arising in
connection with court proceedings, but only if the execution or other enforcement
of such Liens is effectively stayed (or bonded over through the posting of a
bond in accordance with a statutory bonding procedure the effect of which is to
release such Lien from any Property of the Borrower or the Borrower’s Member and
to limit the Lien claimant’s rights to recovery under the bond) and the claims
secured thereby are being actively contested in good faith by appropriate
proceedings and for which appropriate reserves have been established;

 

(f)            Easements,
rights-of-way, restrictions and other similar non-monetary encumbrances
encumbering assets other than the Projects or any other collateral for the
Loans;

 

(g)           Liens
on any of the Qualified Real Estate Interests (it being understood that the
Liens permitted under this Section 9.02(g) shall also include Liens
encumbering interests in accounts, rents, leases, management and other
contracts, personal property and other items related to the applicable
Qualified Real Estate Interest and Liens on Swap Agreements entered into in
connection therewith), but only to the extent created to secure Indebtedness
incurred in connection with the acquisition, financing or refinancing thereof,
in compliance with Section 9.04(e) or (g);

 

(h)           Liens
consisting of the rights of the lessor to the property covered by any equipment
lease entered into in compliance with Section 9.04(d), provided that
such lien consists solely of such rights with respect to the leased property;

 

(i)            Liens
encumbering cash and other liquid assets (not constituting collateral for the
Loans to the Borrower or the Westwood Place Borrower) in the aggregate amount not to exceed the sum required to be
pledged by the Borrower or any of its Subsidiaries in order to secure its respective
obligations with respect to the negative value of any Hedge Agreement or Excess
Hedge Agreement entered into by the Borrower or Other Swap Pledgor in
compliance with Section 8.19 hereof or the negative value of any Hedge
Agreement entered into by the Borrower or the Borrower’s Member or their respective
Subsidiaries in connection with the Indebtedness permitted by Section
9.04(e), (f) or (g);

 

(j)            Liens
securing the Indebtedness permitted by Section 9.04(e) or (f),
and encumbering the specific Residential Properties or Excluded Projects
financed pursuant to such section or sections (it being understood that the
Liens permitted under this Section 9.02(j) shall also include Liens
encumbering interests in accounts, rents, leases, management and other
contracts, personal property and other items related to the applicable
Residential Properties and/or Excluded Projects and Liens on Swap Agreements
entered into in connection therewith); and

 

104

 

(k)           Liens
securing the obligations of Borrower or its Subsidiaries on account of
Guarantees described in Section 9.04(h) provided that such Liens
encumber Excluded Projects (which may include Liens on any interests in
accounts, rents, leases, management and other contracts, personal property and,
other items related thereto) exclusively.

 

9.03         Due
on Sale; Transfer; Pledge. Without the prior written consent of the
Administrative Agent and (subject to the last paragraph of this Section 9.03)
the Required Lenders:

 

(a)           None
of the Borrower, nor any Borrower Party, nor any Principal shall (w) directly
or indirectly Transfer any interest in any Project or any part thereof
(including any direct or indirect interest in any partnership, membership or
other ownership interest or other Equity Interest in the Borrower, the Borrower’s
Member or the Borrower’s Manager); (x) directly or indirectly grant any
Lien on any direct or, prior to the Permitted Public REIT Transfer, indirect
interest in any Project or any part thereof (including any direct or, prior to
the Permitted Public REIT Transfer, indirect interest in any partnership,
membership or other ownership interest or other Equity Interest in the Borrower,
the Borrower’s Member or the Borrower’s Manager), whether voluntarily or
involuntarily; (y) except for arrangements which result from the Permitted
Reorganization pursuant to which the Permitted Public REIT or its Operating
Partnership or another Permitted Public REIT Subsidiary thereof shall acquire
such rights or powers, enter into any arrangement granting any direct or indirect
right or power to direct the operations, decisions and affairs of the Borrower,
the Borrower’s Member or the Borrower’s Manager, whether through the ability to
exercise voting power, by contract or otherwise; or (z) except as
described in clause (e) of the definition of “Permitted Liens,” enter into any
easement or other agreement granting rights in or restricting the use or
development of any Project except for easements and other agreements which, in
the reasonable opinion of the Administrative Agent, have no Material Adverse
Effect; provided, however, that, the foregoing restrictions shall
not apply with respect to:

 

(i)            any
Transfer of direct or indirect ownership interests in the Borrower’s Member, or
a successor to the Borrower’s Member (other than the ownership interests that
are covered by Section 9.03(a)(ii)), unless (A) in the case of any
such Transfer prior to the Permitted Public REIT Transfer, the acquisition by
any one investor of ownership interests in the Borrower’s Member would result
in the direct or indirect ownership by that investor of more than forty-nine
percent (49%) of the ownership interests in the Borrower’s Member, or successor
to the Borrower’s Member, in which case the consent of the Administrative
Agent, which shall not be unreasonably withheld or delayed, shall be required
or (B) in the case of any such Transfer following the Permitted Public
REIT Transfer, the Permitted Public
REIT, following such Transfer, shall not directly or indirectly own fifty-one
percent (51%) or more of the ownership interests in the Borrower or shall not
directly or indirectly control the Borrower, or a Change in Control shall
result from such Transfer;

 

(ii)           the
Transfer of direct or indirect ownership interests in, or the admission or
withdrawal of any partner, member or shareholder to or from, the Borrower’s
Manager (or any replacement manager referred to in Section 9.03(b) or
any general partner, manager or managing member of any successor to the
Borrower or the

 

105

 

Borrower’s Member referred to in Section 9.03(a)(iii)),
so long as, after such Transfer, admission or withdrawal, the provisions of Section
9.03(c) are not violated;

 

(iii)          the
conveyance of all of the Projects to a Qualified Successor Entity which assumes
all of the obligations of the Borrower under the Loan Documents in form and
substance satisfactory to the Administrative Agent and in recordable form; provided,
however, that such Qualified Successor Entity and the general partner,
manager or managing member of such Qualified Successor Entity, after giving
effect to such Transfer, is in compliance with all of the covenants of the
Borrower or applicable to the Borrower’s Member, the Borrower’s Manager or any
Borrower Party (as applicable) contained in the Loan Documents except as
otherwise provided in the definition of “Borrower’s Member” or “Borrower’s
Manager” (with all references herein to “Borrower” to mean such Qualified
Successor Entity, all references herein to the “Borrower’s Member” to mean (except
as otherwise provided in the definition of “Borrower’s Member”) the controlling
entity for such Qualified Successor Entity, and all references herein to “Borrower’s
Manager” to mean (except as otherwise provided in the definition of “Borrower’s
Manager”) any general partner, manager or managing member of the Qualified
Successor Entity; no Default or Event of Default is then existing or would
result therefrom; and upon the transfer of the Projects to such Qualified
Successor Entity, such Qualified Successor Entity, its controlling entity and
the general partner, manager or managing member of such Qualified Successor
Entity are in compliance in all material respects with all of the
representations and warranties of the Borrower or applicable to the Borrower’s
Member or the Borrower’s Manager (whether directly or as a Borrower Party) (as
applicable) contained herein and in the other Loan Documents (after giving
effect to the modifications reflecting the identity of the transferee resulting
from such transfer) except as otherwise provided in the definition of “Borrower’s
Member” or “Borrower’s Manager” (with all references herein to “Borrower” to
mean such Qualified Successor Entity, all references herein to the “Borrower’s
Member” to mean (except as otherwise provided in the definition of “Borrower’s
Member”) the controlling entity for such Qualified Successor Entity, and all
references herein to “Borrower’s Manager” to mean (except as otherwise provided
in the definition of “Borrower’s Manager”) any general partner, manager or
managing member of the Qualified Successor Entity); and provided, further,
that from and after such Transfer, in the case of a Transfer to a Qualified
Successor Entity consisting of a Permitted Public REIT Subsidiary, the Properties
may be managed by the Permitted Public REIT or any property management company
owned or controlled directly or indirectly by the Permitted Public REIT. Prior
to such Transfer, the Administrative Agent shall have received and approved
(which approval shall not be unreasonably withheld) the Organizational
Documents of such Qualified Successor Entity and the general partner, manager
or managing member of such Qualified Successor Entity (except that, in the case of a Qualified Successor Entity which is a
Permitted Public REIT Subsidiary of the Permitted Public REIT, there shall be
no approval rights over the Organizational Documents of such general partner,
manager or managing member if it is the Permitted Public REIT or the Operating
Partnership of the Permitted Public REIT), together with such financial information
relating to such Qualified Successor Entity as the Administrative Agent may
reasonably request, and concurrently with such Transfer, the Administrative
Agent shall have received such endorsements to the Title Policies

 

106

 

insuring ownership of the Projects by such Qualified
Successor Entity and the continued priority of the Liens of the Deeds of Trust
after giving effect to the delivery by such entity of the assumption agreement
referred to above (subject only to Permitted Title Exceptions), in form and
substance satisfactory to the Administrative Agent, and such confirmation as
the Administrative Agent may require that the Hedge Agreements required under Section 8.19(a)
remain in full force and effect, in compliance with Section 8.19 hereof,
as to the Loans as assumed by such Qualified Successor Entity. In connection
with any such Transfer, the assumption agreement to be entered into by the Borrower
and the Qualified Successor Entity (and such other parties deemed appropriate
by the Administrative Agent) shall include such modifications to this Agreement
and the other Loan Documents as the Administrative Agent may reasonably
require, including, without limitation, such modifications to the covenants and
other provisions that are contained herein and that relate to the Borrower,
Borrower’s Member or Borrower’s Manager, as shall be deemed necessary by the
Administrative Agent to allocate to the Qualified Successor Entity, its
controlling entity, and its general partner or manager responsibility for the
performance of the covenants of, and satisfaction of the other provisions set
forth herein that relate to, the Borrower, Borrower’s Member or Borrower’s
Manager, and of such limited indemnity agreements and guaranties as shall be
deemed necessary by the Administrative Agent to obtain recourse liability from
the general partner or manager of the Qualified Successor Entity as shall be
consistent with the obligations of the Guarantor under the Guarantor Documents
immediately upon the Closing Date. Upon
compliance with the foregoing requirements in connection with such Transfer,
the original Borrower and the original Guarantor, in their capacities as such,
shall be released from their respective obligations under the Loan Documents
arising from and after such Transfer, but such release shall not limit the
obligations of such parties to comply with any requirements applicable to them (if
any) in other capacities (including, without limitation, in capacities such as
the general partner, managing member, manager or controlling entity for such
Qualified Successor Entity). As used herein, “Qualified Successor Entity”
shall mean either (I) so long as the provisions of Section 9.03(c)
are not violated, an entity (other than a REIT, its Operating Partnership or
any Subsidiary of such REIT), majority-owned, directly or indirectly, by (A) the
Borrower and/or (B) the Borrower’s Member and/or (C) at least two (2) of the
Named Principals, so long as at least one of the Named Principals is either Dan
A. Emmett or Jordan L. Kaplan, and provided that in the case of this clause
(I)(C) the general partner, managing member or manager of such Qualified
Successor Entity must be controlled, directly or indirectly, by such Named
Principals, (II) a Permitted Public REIT Subsidiary of the Permitted Public
REIT (other than such Permitted Public REIT’s Operating Partnership), or (III) a
Permitted Private REIT Subsidiary of a private REIT, provided that at least two
(2) of the Named Principals are senior officers of such private REIT and own,
directly or indirectly, not less than one percent (1%) of the beneficial
interest in such private REIT, and at least one of the Named Principals is either
Dan A. Emmett or Jordan L. Kaplan; such private REIT has an institutional
character substantially the same as the institutional character of the Borrower
as of the date hereof; and all of the investors in such private REIT are “accredited
investors” within the meaning of Regulation D promulgated under the Securities
Act of 1933 (such private REIT is referred to as a “Permitted Private REIT”);
and, provided further, however, that
in the case of clauses (I),

 

107

 

(II) and (III) above, such
Qualified Successor Entity shall, from the date of its formation, have been in
compliance with the provisions of Sections 9.02, 9.04 and 9.05
hereof as if each reference therein to “Borrower” were to mean and refer to such
Qualified Successor Entity;

 

(iv)          entering
into Approved Leases or the granting of Liens expressly permitted by the Loan
Documents;

 

(v)           any
Transfers of direct or indirect Equity Interests in the Borrower or any of the
Borrower Parties to the Permitted Public REIT, its Operating Partnership or any
Permitted Public REIT Subsidiary in connection with a Permitted Public REIT
Transfer;

 

(vi)          the
transfer or conveyance of the
Westwood Place Project to the Borrower or the transfer or conveyance of the
Westwood Place Project or of the Borrower’s Member’s membership interest in the
Westwood Place Borrower to an entity majority-owned and controlled by the
Borrower or the Borrower’s Member in accordance with clause (v) of
subparagraph (a) of Article IXA;

 

(vii)         any
Transfers constituting part of the Permitted Reorganization which are permitted
under Section 14.31;

 

(viii)        any
Transfers expressly permitted by the Loan Documents; and

 

(ix)           following
the Permitted Public REIT Transfer, any of the following so long as no Change
of Control shall result therefrom:  (A) any Transfer or issuance (whether through public offerings, private
placements or other means) of shares or Equity Interests in the Permitted
Public REIT or its Operating Partnership; (B) any conversion, into
securities of the Permitted Public REIT, of partnership units or other Equity
Interests of the Operating Partnership of the Permitted Public REIT; (C) any
issuance or Transfer of any Equity Interests in any Permitted Public REIT
Subsidiary owning any direct or indirect Equity Interests in any Borrower
Party, so long as following such issuance or Transfer the Permitted Public REIT
shall directly or indirectly own fifty-one percent (51%) or more of the
ownership interests in the Borrower and shall directly or indirectly control
the Borrower; and/or (C) any merger, consolidation, dissolution, liquidation,
reorganization, sale, lease or other transaction involving any Person other
than the Borrower so long as the Permitted Public REIT (or, as applicable, a Permitted
Public REIT Subsidiary) is the surviving entity and the Permitted Public REIT
thereafter directly or indirectly owns fifty-one percent (51%) or more of the
ownership interests in the Borrower and directly or indirectly controls the
Borrower. As used herein, “control” (including, with its correlative meanings, “controlled
by” and “under common control with”) shall mean possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise) of such Person.

 

(b)           Prior
to a Permitted Public REIT Transfer, except for Transfers constituting part of the
Permitted Reorganization which are permitted under Section 14.31, no

 

108

 

new general partner,
manager or managing member that is not owned and controlled, directly or
indirectly, by at least two (2) of the Named Principals shall be admitted to or
created in the Borrower or the Borrower’s Member (nor shall the Borrower’s
Manager withdraw or be replaced as the Borrower’s sole manager or the Borrower’s
Manager withdraw or be replaced as the Borrower’s Member’s general partner)
unless the new or replacement general partner, manager or managing member is
owned and controlled, directly or indirectly, by at least two (2) Named
Principals and the general partners or managers owned and controlled, directly
or indirectly, by at least two (2) of the Named Principals own, directly or
indirectly, not less than one percent (1%) of the beneficial interest in the
Borrower’s Member following such admission or replacement and, without the
prior written consent of the Administrative Agent, no other change in the
Borrower’s or the Borrower’s Member’s Organizational Documents (except as
permitted in Section 9.01(b)) shall be effected in connection with such
replacement;

 

(c)           Except
for Transfers constituting part of the Permitted Reorganization which are
permitted under Section 14.31, prior to a Permitted Public REIT
Transfer, no Transfer shall be permitted which would cause the Borrower’s
Manager or any replacement general partner, manager or managing member referred
to in Section 9.03(b) (or any general partner, manager or managing
member of any Qualified Successor Entity unless the Borrower is, itself, such
manager or managing member) (i) to own, directly or indirectly, less than one
percent (1%) of the beneficial interest in the Borrower, the Borrower’s Member
or such successor to the Borrower or the Borrower’s Member or (ii) to cease to
be “controlled” directly or indirectly by at least two (2) of the Named
Principals (at least one of which shall be Dan A. Emmett or Jordan L. Kaplan in
the case of a Qualified Successor Entity referred to in clause (I)(A) of
the definition of the term “Qualified Successor Entity”); and

 

(d)           As
used in Sections 9.03(a)(iii), (b) and (c) above, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise) of such Person.

 

Notwithstanding the
foregoing provisions of this Section 9.03, any Transfer of a direct
or indirect ownership interest in the Borrower, the Borrower’s Member, the Borrower’s
Manager or any Qualified Successor Entity or any general partner, manager or
managing member of any Qualified Successor Entity shall be further subject to
the requirement that, after giving effect to such Transfer, the Borrower, the
Borrower’s Member, the Borrower’s Manager, any Qualified Successor Entity and
its controlling entity and general partner or manager shall be in compliance
with all applicable laws applicable to such Persons and relating to such
Transfer, including the USA Patriot Act and regulations issued pursuant thereto
and “know your customer” laws, rules, regulations and orders. In addition, any
such Transfer (except for the Permitted Public REIT Transfer, any Transfer of
publicly-traded stocks in the Permitted Public REIT or any Transfers following
a Permitted Public REIT Transfer that are permitted by Section 9.03(a)(ix))
shall be further subject to (w) the Borrower providing prior written notice to
Administrative Agent of any such Transfer, (x) no Default or Event of Default
then existing, (y) the proposed transferee being a corporation, partnership, limited
liability company, joint venture, joint-stock company, trust or individual
approved in writing by each Lender subject to a Limiting Regulation in its
discretion, and (z) payment to the Administrative Agent on behalf of the
Lenders of all reasonable costs and

 

109

 

expenses incurred by the
Administrative Agent or any Lenders in connection with such Transfer. Each
Lender at the time subject to a Limiting Regulation shall, within ten (10)
Business Days after receiving the Borrower’s notice of a proposed Transfer
subject to this Section 9.03, furnish to the Borrower a certificate
(which shall be conclusive absent manifest error) stating that it is subject to
a Limiting Regulation, whereupon such Lender shall have the approval right
contained in clause (y) above. Each Lender which fails to furnish such a
certificate to the Borrower during such ten (10) Business Day period shall be
automatically and conclusively deemed not to be subject to a Limiting
Regulation with respect to such Transfer. If any Lender subject to a Limiting
Regulation fails to approve a proposed transferee under clause (y) above (any
such Lender being herein called a “Rejecting Lender”),
the Borrower, upon three (3) Business Days’ notice, may (A) notwithstanding the
terms of Sections 2.06, prepay such Rejecting Lender’s outstanding
Loans or (B) require that such Rejecting Lender transfer all of its right,
title and interest under this Agreement and such Rejecting Lender’s Note to any
Eligible Assignee or Proposed Lender selected by the Borrower that is
reasonably satisfactory to the Administrative Agent if such Eligible Lender or
Proposed Lender (x) agrees to assume all of the obligations of such Rejecting
Lender hereunder, and to purchase all of such Rejecting Lender’s Loans
hereunder for consideration equal to the aggregate outstanding principal amount
of such Rejecting Lender’s Loans, together with interest thereon to the date of
such purchase (to the extent not paid by the Borrower), and satisfactory
arrangements are made for payment to such Rejecting Lender of all other amounts
accrued and payable hereunder to such Rejecting Lender as of the date of such
transfer (including any fees accrued hereunder and any amounts that would be
payable under Section 2.06 as if all such Rejecting Lender’s Loans
were prepaid in full on such date) and (y) approves the proposed transferee. Subject
to the provisions of Section 14.07 such Eligible Assignee or
Proposed Lender shall be a “Lender” for all purposes hereunder. Without prejudice
to the survival of any other agreement of the Borrower hereunder, the
agreements of the Borrower contained in Section 5.05 shall survive
for the benefit of such Rejecting Lender with respect to the time period prior
to such replacement.

 

9.04         Indebtedness.
None of the Borrower, the Borrower’s Member nor any of their respective Subsidiaries
shall create, incur, assume, suffer to exist, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness or enter into
any equipment leases (whether or not constituting Indebtedness), except for the
following:

 

(a)           Indebtedness
Under the Loan Documents. Indebtedness of such Borrower Party and its
Subsidiaries in favor of the Administrative Agent and the Lenders pursuant to
this Agreement and the other Loan Documents;

 

(b)           Accounts
Payable. Accounts payable to trade creditors for goods and services and
current operating liabilities (not the result of the borrowing of money)
incurred in the ordinary course of such Borrower Party’s or Subsidiary’s business
in accordance with customary terms and paid within the specified time, unless
contested in good faith by appropriate actions or proceedings and reserved for
in accordance with GAAP, and provided such trade payables and accrued expenses
are not outstanding for more than sixty (60) days;

 

(c)           Contingent
Obligations. Indebtedness consisting of (i) endorsements by such Borrower Party
or such Subsidiary for collection or deposit in the ordinary course of business
or (ii) unsecured Swap Agreements entered into by the Borrower, the Borrower’s

 

110

 

Member or their
respective Subsidiaries with respect to Indebtedness permitted under Section 9.04
(a), (e), (f) or (g);

 

(d)           Indebtedness
for Capital Improvements. Unsecured Indebtedness of such Borrower Party and
its Subsidiaries and/or the Westwood Place Borrower (including obligations
under equipment leases or other personal property used in the ownership or
operation of their respective Properties), in the aggregate amount during the
term of the Loans not to exceed $30,000,000 (inclusive of the portion of the
value of the equipment covered by equipment leases entered into pursuant to
this Section 9.04(d) amortized through the rental payments under such
leases) incurred in connection with capital or tenant improvements to (or other
tenant concessions made in connection with) such Borrower Party’s and such
Subsidiaries’ Properties or the Westwood Place Borrower’s Properties (including,
without limitation, the Projects, the Residential Properties and the Westwood
Place Project) or the acquisition of equipment or other assets for the benefit
of such Borrower Party’s and such Subsidiaries’ Properties (including, without
limitation, the Projects, the Residential Properties and the Westwood Place
Project), and that is not used for the purposes of making Restricted Payments. Not
more than Two Million Three Hundred Ninety Three Thousand Five Hundred Dollars
($2,393,500) of the foregoing Thirty Million Dollar ($30,000,000) maximum may
be incurred by the Westwood Place Borrower, and not more than Two Million
Dollars ($2,000,000) of the foregoing Thirty Million Dollar ($30,000,000)
maximum may be incurred by the Borrower and the Westwood Place Borrower in the
form of equipment leases (as measured by the value of the equipment covered by
such equipment leases amortized through the rental payments under such leases);
provided that such equipment leases relate to equipment constituting
neither fixtures nor personal property material to the operation, maintenance
or management of any of the Projects; and

 

(e)           Additional
Indebtedness of Borrower Parties and Wholly-Owned Subsidiaries. Indebtedness
of the Borrower, the Borrower’s Member or their wholly-owned Subsidiaries for
borrowed money incurred in connection with the acquisition, financing or
refinancing of one or more of the Excluded Projects, but only if such
Indebtedness satisfies the following requirements:

 

(i)            the
obligation to repay such Indebtedness is non-recourse to the Borrower, the
Borrower’s Member, the Bankruptcy Parties and the Named Principals (except for “carve-outs”
(or Guarantees guarantying the debtor’s liability with respect to “carve-outs”)
for fraud, misrepresentation, misappropriation and other exceptions-from-non-recourse
customary in the real estate finance industry and not materially more favorable
to such lender than the exceptions-from-non-recourse set forth in the second
sentence of Sections 14.23(a));

 

(ii)           such
Indebtedness is secured solely by Liens on the Excluded Projects owned by the
Borrower or one or more of its wholly-owned Subsidiaries (if the Borrower or
any such Subsidiary is the borrower of the Indebtedness secured thereby), or by
Liens on the Excluded Projects owned by the Borrower’s Member or one or more of
its wholly-owned Subsidiaries (other than the Borrower or its wholly-owned
Subsidiaries) (if the Borrower’s Member or any such wholly-owned Subsidiary of
the Borrower’s Member is the borrower of the Indebtedness secured thereby), together
with Liens on any interests in accounts, rents, leases, management and other
contracts,

 

111

 

personal property and other items (including, without
limitation, Swap Agreements) related thereto;

 

(iii)          the
amount of such Indebtedness, when incurred, does not exceed sixty percent (60%)
of the fair market value of the Excluded Projects, as determined by the lender’s
appraisal (or, in the case of financing for the acquisition of Excluded Projects,
sixty percent (60%) of the acquisition cost of the Excluded Projects so
acquired) encumbered as collateral for
such Indebtedness, and, so long as the original Borrower’s Member remains a
member of the Borrower, such Indebtedness complies with the limitations
on indebtedness contained in the limited partnership agreement of the original Borrower’s Member, as
amended, or has otherwise received the requisite approval of the limited
partners of the original Borrower’s
Member, if required; provided that, in the case of any Excluded Project
consisting of a Residential Property, the “sixty percent (60%)” limitation set
forth above in this clause (iii) shall mean “seventy-five percent (75%)”; and

 

(iv)          no
Major Default or Event of Default shall have occurred or be continuing
immediately prior to the incurrence of such Indebtedness or would occur after
giving effect thereto.

 

(f)            Additional
Indebtedness of Residential Properties. Indebtedness for borrowed money
incurred in connection with the financing or refinancing of any residential property
that is a Qualified Real Estate Interest by the Borrower or one or more of its
wholly-owned Subsidiaries (if the Borrower or any such Subsidiary is the borrower
of the Indebtedness secured thereby), or by the Borrower’s Member or one or
more of its wholly-owned Subsidiaries (other than the Borrower or its
wholly-owned Subsidiaries) (if the Borrower’s Member or any such wholly-owned
Subsidiary of the Borrower’s Member is the borrower of the Indebtedness secured
thereby), but only if such Indebtedness satisfies the following requirements:

 

(i)            the
obligation to repay such Indebtedness is non-recourse to the Bankruptcy Parties
and the Named Principals (except for “carve-outs” (or Guarantees guarantying
the debtor’s liability with respect to “carve-outs”) for fraud,
misrepresentation, misappropriation and other exceptions-from-non-recourse
customary in the real estate finance industry);

 

(ii)           such
Indebtedness is secured solely by Liens on the residential properties so
financed, and, if applicable, Liens on other Excluded Projects owned by the
Borrower or one or more of its wholly-owned Subsidiaries (if the Borrower or
any such Subsidiary is the borrower of the Indebtedness secured thereby), or by
Liens on other Excluded Projects owned by the Borrower’s Member or one or more
of its wholly-owned Subsidiaries (other than the Borrower or its wholly-owned
Subsidiaries) (if the Borrower’s Member or any such wholly-owned Subsidiary of
the Borrower’s Member is the borrower of the Indebtedness secured thereby), together
with Liens on any interests in accounts, rents, leases, management and other
contracts, personal property and other items (including, without limitation,
Swap Agreements) related thereto;

 

(iii)          the
amount of such Indebtedness, when incurred, does not exceed seventy-five
percent (75%) of the fair market value of such residential properties, as

 

112

 

determined by the lender’s
appraisal, plus sixty percent (60%) of the fair market value, as determined by
the lender’s appraisal, of any Excluded Projects encumbered as security
therefore that are non-residential and seventy-five percent (75%) of the fair
market value, as determined by the lender’s appraisal, of any Excluded Projects
encumbered as security therefore that are residential and, so long as the original Borrower’s Member
remains a member of the Borrower, such Indebtedness complies with the
limitations on indebtedness contained in the limited partnership agreement of
the original Borrower’s Member,
as amended, or has otherwise received the requisite approval of the limited
partners of the original Borrower’s
Member, if required; and

 

(iv)          no
Major Default or Event of Default shall have occurred or be continuing
immediately prior to the incurrence of such Indebtedness or would occur after
giving effect thereto.

 

(g)           Additional
Indebtedness of Qualified Sub-Tier Entities. Indebtedness of any Qualified
Sub-Tier Entity for borrowed money incurred in connection with the acquisition,
financing or refinancing by such Qualified Sub-Tier Entity of Qualified Real
Estate Interests, but only if the obligation to repay such Indebtedness is
non-recourse to such Qualified Sub-Tier Entity, Bankruptcy Parties, and the
Named Principals (except for “carve-outs” (or Guarantees guarantying the debtor’s
liability with respect to “carve-outs”) for fraud, misrepresentation,
misappropriation and other exceptions-from-nonrecourse customary in the real
estate finance industry and not materially more favorable to the holder of such
Indebtedness than the exceptions from non-recourse set forth in the second
sentence of Sections 14.23(a)) and such Indebtedness otherwise is
in compliance with the requirements set forth in Sections 9.04(e)
above (unless such Qualified Real
Estate Interests consist of residential projects, in which case the applicable
requirements shall be as set forth in Section 9.04(f)).

 

(h)           Guarantees of Permitted Public REIT or
Operating Partnership Line of Credit. Following the Permitted Public REIT Transfer, Guarantees by the
Borrower or its Subsidiaries of one or more credit facilities provided to the
Permitted Public REIT, its Operating Partnership or another Permitted Public
REIT Subsidiary (each, a “Guaranteed Line of Credit”), which Guarantees,
if secured, shall be secured only in compliance with Section 9.02(k) and
shall in no event be secured by any of the Projects or other Collateral
encumbered by the Security Documents; provided that no Major Default or
Event of Default shall exist or be continuing immediately prior to the
incurrence of such Guarantees or would occur after giving effect thereto.

 

9.05         Investments.
Neither the Borrower nor the Borrower’s Member nor any of their respective Subsidiaries
will make or permit to remain outstanding any Investments except
(a) operating deposit accounts or money market accounts with banks,
(b) Permitted Investments, (c) Borrower’s Member’s 100% membership in
Borrower, (d) the Projects, (e) the Excluded Projects and the
interests in the Westwood Place Borrower not owned by the Borrower’s Member on
the Closing Date, (f) Borrower’s or Borrower’s Member’s Equity Interests
in any Subsidiary of Borrower or Borrower’s Member existing on the Closing
Date, (g) Borrower’s Equity Interests in any Qualified Sub-Tier Entity or
any Subsidiary permitted or contemplated by this Agreement, (h) other
investments which are permitted by the respective Organizational Documents of
the Borrower or the Borrower’s Member as in effect on the Closing Date, (i) other

 

113

 

investments
required or permitted by the Loan Documents, and (j) other investments
(including, without limitation, investments owned by Subsidiaries) which are
consistent with the investment practices prior to the date hereof of the
Douglas Emmett Realty Funds taken as a whole.

 

9.06         Restricted
Payments. Neither the Borrower nor the Borrower’s Member will make any
Restricted Payment at any time during the existence of a Major Default or Event
of Default.

 

9.07         Change
of Organization Structure; Location of Principal Office. The Borrower or
any Qualified Successor Entity that may hereafter acquire title to any of the
Projects shall not change its name or change the location of its chief
executive office, state of formation or organizational structure unless, in
each instance, Borrower shall have (a) given the Administrative Agent at least
thirty (30) days’ prior written notice thereof, and (b) made all filings
or recordings, and taken all other action, reasonably requested by the
Administrative Agent that is reasonably necessary under Applicable Law to
protect and continue the priority of the Liens created by the Security
Documents.

 

9.08         Transactions
with Affiliates. Except as expressly permitted by this Agreement, prior to
the Permitted Public REIT Transfer, neither the Borrower nor the Borrower’s
Member shall enter into, or be a party to, any transaction with an Affiliate of
the Borrower or Borrower’s Member, except in full compliance with the Organizational
Documents of the Borrower’s Member as in effect on the Closing Date. This
Section shall not prohibit any transfer of the Excluded Projects to Affiliates
of the Borrower or Borrower’s Member.

 

9.09         Leases.

 

(a)           Negative
Covenants. The Borrower shall not (i) accept from any tenant, nor permit
any tenant to pay, Rent for more than one month in advance except for payment
in the nature of security for performance of a tenant’s obligations,
escalations, percentage rents and estimated payments (not prepaid more than one
month prior to the date such estimated payments are due) of operating expenses,
taxes and other pass-throughs paid by tenants pursuant to their Leases, (ii)
Modify (other than ministerial changes), terminate, or accept surrender of, any
Major Lease now existing or hereafter made, without the prior written consent
of the Administrative Agent; notwithstanding the foregoing, the Borrower shall
retain the right to Modify, terminate, or accept surrender of any Approved
Lease that is not a Major Lease; provided that (A) any such Modification,
is (1) consistent with fair market terms and (2) is entered into
pursuant to arm’s-length negotiations with a tenant not affiliated with the
Borrower, and (B) any such termination is (1) in the ordinary course
of business, (2) consistent with good business practice and (3) in the
best interests of the affected Project, (iii) except for the Deed of Trust,
assign, transfer (except for a Transfer thereof together with the transfer of
the Projects to the entity described in Section 9.03(a)(iii) in full
compliance with the provisions of such Section), pledge, subordinate or
mortgage any Lease or any Rent without the prior written consent of the
Administrative Agent and the Required Lenders, (iv) waive or release any
nonperformance of any material covenant of any Major Lease by any tenant
without the Administrative Agent’s prior written consent, (v) release any
guarantor from its obligations under any guaranty of any Major Lease or any
letter of credit or other credit support for a tenant’s performance under any
Major Lease, except as expressly permitted pursuant to the terms of such Lease
or (vi) enter into

 

114

 

any master lease for any
space at the Projects. Notwithstanding the foregoing or anything to the
contrary contained herein, the Borrower shall have the right, at its option, to
terminate or accept the surrender of any Lease (including any Major Lease), and
to pursue any other rights and remedies the Borrower may have against any
tenant, following an uncured material default by a tenant under its Lease.

 

(b)           Approvals.
The Borrower shall not enter into any Lease for any space at any Project
(unless such proposed Lease is held in escrow pending the receipt of any
approval required below) except as follows:

 

(i)            Non-Major
Leases. The Borrower may enter into Leases that do not constitute Major
Leases, and extensions, Modifications and renewals thereof without the approval
of the Administrative Agent or any Lender; provided that such Lease,
extension, renewal or Modification (A) in the case of a Lease, is
substantially in the form of the Borrower’s standard form office lease or
standard form retail lease, as applicable, previously approved by the
Administrative Agent, (B) is consistent with fair market terms and (C) is
entered into pursuant to arm-length negotiations with a tenant not affiliated
with the Borrower. Any proposed Lease that is not a Major Lease, or any
extension, renewal or modification of any such Lease, that does not comply with
the preceding sentence shall require the prior approval of the Administrative
Agent.

 

(ii)           Major
Leases. The Borrower shall not enter into any Major Lease or any extension,
renewal or Modification of any Major Lease without the prior written approval
of the Administrative Agent.

 

(iii)          Information.
With respect to any Lease or Modification of Lease that requires approval of
the Administrative Agent, the Borrower shall provide the Administrative Agent
with the following information (collectively, the “Lease Approval Package”):  (A) all material information available
to the Borrower concerning the lessee and its business and financial condition;
(B) a draft of the lease (or lease modification); and (C) a summary
(the “Lease Information Summary”) substantially in the form attached
hereto as Exhibit N, of the material terms of such lease or lease
modification. Within ten (10) Business Days after the Administrative Agent
shall have received a Lease Approval Package, the Administrative Agent shall
either consent or refuse to consent to such Lease Approval Package. If the
Administrative Agent shall fail to respond within such ten (10) Business Day
period, the Administrative Agent shall be deemed to have approved such lease or
lease modification; provided that such lease or lease modification is
documented pursuant to a lease or lease modification which is consistent with
the draft and lease summary and Lease Approval Package previously delivered to
the Administrative Agent in all material respects.

 

(c)           Additional
Requirements as to all Leases. Notwithstanding anything to the contrary set
forth in this Section 9.09, the following requirements shall apply with
respect to all Leases and all Modifications of Leases entered into after the
date hereof:

 

115

 

(i)            The Borrower shall within ten (10)
days after the Administrative Agent’s request, provide the Administrative Agent
with a true, correct and complete copy thereof as signed by all such parties,
including any Modifications and Guarantees thereof.

 

(ii)           All Leases must be subordinate to the
Deed of Trust, and all existing and future advances thereunder, and to any
Modification thereof.

 

(iii)          Notwithstanding anything to the
contrary set forth above, the Administrative Agent may require that the
Borrower and the tenant under any Major Lease execute and deliver an SNDA
Agreement (with such commercially reasonable changes thereto as may be
requested by such tenant). The Administrative Agent (on behalf of the Lenders)
shall, if requested by the Borrower, and as a condition to a tenant’s
obligation to subordinate its lease (if necessary or if requested by the
Borrower) or attorn, enter into an SNDA Agreement with such tenant (with such
commercially reasonable changes thereto as may be requested by such tenant). The
Administrative Agent’s execution thereof shall be conditioned upon the prior
execution thereof by both the tenant and the Borrower.

 

(iv)          All Leases shall be substantially in
the form of the Borrower’s standard form office lease or standard form retail
lease, as applicable, approved by the Administrative Agent and the Borrower on
the Closing Date, with such Modifications as the Administrative Agent shall
thereafter approve prior to the execution of such Leases.

 

9.10         Reserved.

 

9.11         No
Joint Assessment; Separate Lots. The Borrower shall not suffer, permit or
initiate the joint assessment of any Project with any other real property
constituting a separate tax lot.

 

9.12         Zoning.
The Borrower shall not, without the Administrative Agent’s prior written
consent, seek, make, suffer, consent to or acquiesce in any change or variance
in any zoning or land use laws or other conditions of any Project or any
portion thereof. Except as disclosed on the Appraisals delivered to the
Administrative Agent prior to the Closing Date or any other existing
non-conforming use disclosed on Schedule 9.12, the Borrower shall not
use or permit the use of any portion of any Project in any manner that could
result in such use becoming a non-conforming use under any zoning or land use
law or any other applicable law, or Modify any agreements relating to zoning or
land use matters or permit the joinder or merger of lots for zoning, land use
or other purposes, without the prior written consent of the Administrative
Agent. Without limiting the foregoing, in no event shall the Borrower take any
action that would reduce or impair either (a) the number of parking spaces
at any Project or (b) access to any Project from adjacent public roads.

 

Further, without the
Administrative Agent’s prior written consent, the Borrower shall not file or
subject any part of any Project to any declaration of condominium or
co-operative or convert any part of any Project to a condominium, co-operative
or other direct or indirect form of multiple ownership and governance.

 

116

 

9.13         ERISA.
The Borrower shall not shall not take any action, or omit to take any action,
which would (a) cause the Borrower’s assets to constitute “plan assets” for
purposes of ERISA or the Code or (b) cause the Transactions to be a nonexempt
prohibited transaction (as such term is defined in Section 4975 of the Code or
Section 406 of ERISA) that could subject the Administrative Agent and/or the
Lenders, on account of any Loan or execution of the Loan Documents hereunder,
to any tax or penalty on prohibited transactions imposed under Section 4975 of
the Code or Section 502(i) of ERISA.

 

9.14         Reserved.

 

9.15         Property
Management. The Borrower will not, without the prior written approval of
the Administrative Agent, (i) enter into any new Property Management Agreement;
(ii) terminate or make any material changes to the Property Management
Agreement, either orally or in writing, in any respect; or (iii) consent to,
approve or agree to any assignment or transfer by or with respect to the
Property Manager (including transfers of beneficial interests in the Property
Manager or assignments or transfers by the Property Manager of any or all of
its rights under any Property Management Agreement) except as otherwise
permitted by Section 9.03 or Section 14.31. Notwithstanding
the foregoing, the Borrower may, on prior written notice to the Administrative
Agent, subject to the limitations set forth herein with respect to the
Administrative Agent’s approval of any new manager for any Project, terminate a
Property Management Agreement in accordance with its terms as a result of a
material default by a Property Manager thereunder, and the limited partners in the
Borrower’s Member may remove any Property Manager or terminate any Property
Management Agreement provided a replacement Property Manager satisfactory to
the Administrative Agent is immediately appointed pursuant to a Property
Management Agreement acceptable to the Administrative Agent which permits
termination by the Borrower on thirty (30) days’ notice so long as the new
property manager delivers a Property Manager’s Consent. Any change in ownership
or control of the Property Manager other than as specifically set forth herein
shall be cause for the Administrative Agent to re-approve such Property Manager
and Property Management Agreement. If at any time the Administrative Agent
consents to the appointment of a new Property Manager, such new Property
Manager and the Borrower shall, as a condition of the Administrative Agent’s consent, execute a Property Manager’s Consent in the form
then used by the Administrative Agent. Each Property Manager shall be required
to hold and maintain all necessary licenses, certifications and permits
required by Applicable Law. The Borrower may, on prior written notice to the
Administrative Agent, transfer a Property Management Agreement to, or terminate
and enter into a new Property Management Agreement on substantially the same
terms with, another entity owned and controlled by, or under common control
with, Douglas, Emmett and Company or the Borrower’s Manager; provided
that such new management entity is majority-owned and controlled, directly or
indirectly, by at least two (2) of the four (4) Named Principals, and such
entity delivers a Property Manager’s Consent with respect to such Property
Management Agreement.

 

9.16         Foreign Assets Control
Regulations. Neither the Borrower nor any Borrower Party shall use the
proceeds of the Loan in any manner that will violate the Trading with the Enemy
Act, as amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or the
Anti-Terrorism Order or any enabling legislation or executive order relating to
any of the same. Without

 

117

 

limiting the
foregoing, neither the Borrower nor any Borrower Party will permit itself nor
any of its Subsidiaries to (a) become a blocked person described in Section 1
of the Anti-Terrorism Order or (b) knowingly engage in any dealings or
transactions or be otherwise associated with any person who is known by such
Borrower Party or who (after such inquiry as may be required by Applicable Law)
should be known by such Borrower Party to be a blocked person.

 

ARTICLE IXA

NEGATIVE COVENANTS OF THE WESTWOOD PLACE BORROWER

 

The Westwood Place
Borrower covenants and agrees with the Lenders and the Administrative Agent
that, so long as any Westwood Place Commitment or Loan to the Westwood Place
Borrower is outstanding and until payment in full of all amounts payable by the
Westwood Place Borrower hereunder, the Westwood Place Borrower hereby covenants
and agrees that, until the payment in full of the Obligations of the Westwood
Place Borrower, it will not do or permit, directly or indirectly, any of the
actions or inactions exactly as if the covenants and agreements made by the
Borrower in Article IX were to be applicable to the Westwood Place
Borrower, as if, in each case as the context requires, each reference in Article
IX to the “Borrower” or any “Borrower Party” or “Borrower Parties” shall
mean the Westwood Place Borrower, each reference therein to the “Loans” shall
mean the Loans to be made to the Westwood Place Borrower, each reference
therein to the “Commitment” shall mean the Westwood Place Commitment, each
reference therein to any “Project” shall mean the Westwood Place Project, each
reference therein to any Loan Document shall mean the applicable Loan Document
to which the Westwood Place Borrower is a party, if any, and each reference
therein to a “Default” or “Event of Default” shall mean a Westwood Place
Default or Westwood Place Event of Default, respectively; provided,  however,
that (i) notwithstanding Section 9.01(a), the Westwood Place Borrower
may merge into the Borrower (in which case, the Borrower and the Westwood Place
Borrower hereby agree that, automatically effective upon such merger, the
Borrower shall be (subject to Section 14.23) liable for all of the obligations
of the Borrower and the Westwood Place Borrower set forth in this Agreement and
the other Loan Documents; the occurrence of any Event of Default shall be a
Westwood Place Event of Default; the Obligations which are secured by all
Security Documents shall include both the Obligations of the Borrower under the
Loan Documents and the Obligations of the Westwood Place Borrower under the
Loan Documents to which it is a party; the Borrower shall execute such
documents and take such actions as may be requested by the Administrative Agent
further to confirm the foregoing; and effective upon the foregoing, the Pledge
Agreement shall be of no further force or effect, and the Administrative Agent
shall, at the Borrower’s sole cost and expense, execute such documents and take
such other actions as may be necessary to terminate any financing statement
relating to the collateral covered thereby); (ii) the provisions of Sections
9.02(d), (f), (g), and (i), Sections 9.04(c)(ii),
(e) and (f), and Sections 9.05(c) through (g) shall
not apply to the Westwood Place Borrower; (iii) Section 9.04(d) shall
apply to the Westwood Place Borrower to the extent set forth therein; and (iv)
as to the provisions of Section 9.03 which are hereby incorporated by
reference as provisions applicable to the Westwood Place Borrower, clauses
(a), (b) and (c) of Section 9.03 shall be
modified to read in their entireties as follows:

 

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(a)           Neither the Westwood Place
Borrower, nor any partner or member in the Westwood Place Borrower shall (w) directly
or indirectly Transfer any interest in the Westwood Place Project or any part
thereof (including any direct or indirect interest in any partnership,
membership or other ownership interest or other Equity Interest in the Westwood
Place Borrower, the Borrower’s Member (in its capacity as a member in the
Westwood Place Borrower) or the Borrower’s Manager (in its capacity as the general
partner of the Borrower’s Member, in its capacity as the managing member of Westwood
Place Borrower); (x) directly or indirectly grant any Lien on any direct or,
prior to the Permitted Public REIT Transfer, indirect interest in the Westwood
Place Project or any part thereof (including any direct or, prior to the Permitted
Public REIT Transfer, indirect interest in any partnership, membership or other
ownership interest or other Equity Interest in the Westwood Place Borrower, the
Borrower’s Member (in its capacity as a member in the Westwood Place Borrower)
or the Borrower’s Manager (in its capacity as the general partner of the
Borrower’s Member, in its capacity as the managing member of Westwood Place
Borrower)), whether voluntarily or involuntarily; (y) except for
arrangements which result from the Permitted Reorganization pursuant to which
the Permitted Public REIT or its Operating Partnership or another Permitted
Public REIT Subsidiary thereof shall acquire such rights or powers, enter into
any agreement granting any direct or indirect right or power to direct the operations,
decisions and affairs of the Westwood Place Borrower, the Borrower’s Member (in
its capacity as a member in the Westwood Place Borrower) or the Borrower’s
Manager (in its capacity as the general partner of the manager of the Westwood
Place Borrower), whether through the ability to exercise voting power, by
contract or otherwise; or (z) except as described in clause (e) of the
definition of “Permitted Liens,” enter into any easement or other agreement
granting rights in or restricting the use or development of the Westwood Place
Project except for easements and other agreements which, in the reasonable
opinion of the Administrative Agent, have no Material Adverse Effect; provided,
however, that the foregoing restrictions shall not apply with respect
to:

 

(i)            any Transfer of direct or indirect
ownership interests in the Borrower’s Member, or a successor to the Borrower’s
Member (other than the ownership interests that are covered by Section
9.03(a)(iii)), unless (A) in the case of any such Transfer prior to
the Permitted Public REIT Transfer, the acquisition by any one investor of
ownership interests in the Borrower’s Member would result in the direct or
indirect ownership by that investor of more than forty-nine percent (49%) of
the ownership interests in the Borrower’s Member, or successor to the Borrower’s
Member, in which case the consent of the Administrative Agent, which shall not
be unreasonably withheld or delayed, shall be required or (B) in the case
of any such Transfer following the Permitted Public REIT Transfer, the Permitted Public REIT, following such
Transfer, shall not directly or indirectly own fifty-one percent (51%) or more
of the ownership interests in the Borrower or shall not directly or indirectly
control the Borrower, or a Change in Control shall result from such Transfer;

 

(ii)           any direct or indirect Transfer of
membership interests in the Westwood Place Borrower by Westwood Place, a
California limited partnership, or its partners; provided, however,
that if the transferee of such interests is the Borrower or an entity
majority-owned and controlled by the Borrower or the Borrower’s Member, then
the same provisions as are set forth below in clause (v) with respect to a
Transfer of the

 

119

 

Westwood Place Project to
the Borrower or an entity majority-owned and controlled by the Borrower or the
Borrower’s Member shall thereafter apply; or

 

(iii)          the Transfer of direct or indirect
ownership interests in, or the admission or withdrawal of any partner, member
or shareholder to or from, the Borrower’s Manager (or any replacement manager
referred to in Section 9.03(b) or any general partner, manager or
managing member of any successor to the Borrower or the Borrower’s Member
referred to in Section 9.03(a)(iii)), so long as, after such Transfer,
admission or withdrawal, the provisions of Section 9.03(c) are not
violated; or

 

(iv)          the transfer or conveyance of the
Westwood Place Project, or of the Borrower’s Member’s membership interest in
the Westwood Place Borrower, to the entity described in clause (iii) of Section
9.03(a), in conjunction with the transfer to such entity of all of the
Projects, and all other Projects then owned by the Borrower, as provided for in
such Section 9.03(a) and in compliance therewith;  provided that in the case of the
conveyance to such entity of the Westwood Place Project (but not the membership
interests in the Westwood Place Borrower), such entity shall assume all of the
obligations of the Westwood Place Borrower under the Loan Documents, and in
such case, automatically upon such conveyance, all of the consequences
described below in clauses (A), (B), (C), (D), (E)
and (F) of subsection (v) of this revised Section 9.03(a)
shall apply, as if each reference therein to “the Borrower” were to mean and
refer to such entity; or

 

(v)           the transfer or conveyance of the
Westwood Place Project to the Borrower or an entity majority-owned and
controlled by the Borrower or the Borrower’s Member which assumes all of the
obligations of the Westwood Place Borrower under the Loan Documents, provided,
that no Default or Event of Default is then existing or would result therefrom;
upon the transfer of the Westwood Place Project to the Borrower or such entity,
the Borrower or such entity is in compliance in all material respects with all
of the representations and warranties of the Westwood Place Borrower contained
herein and in the other Loan Documents (after giving effect to the
modifications resulting from such transfer); and concurrently with such
transfer the Administrative Agent shall have received such endorsements to the
Title Policy obtained for the Deed of Trust encumbering the Westwood Place
Project insuring ownership of the Westwood Place Project by the Borrower or
such transferee entity and the continued priority of the Lien of the Deed of
Trust encumbering the Westwood Place Project after giving effect to the
delivery by the Borrower or such entity of the assumption agreement referred to
above (subject only to Permitted Title Exceptions), in form and substance
satisfactory to the Administrative Agent, and such confirmation as the
Administrative Agent may require that the Hedge Agreements remain in full force
and effect, in compliance with Section 8.19 hereof. Automatically effective
upon such transfer, the Borrower and the Westwood Place Borrower hereby agree
that: (A) the Borrower and the Westwood Place Borrower shall be (subject
to Section 14.23) jointly and severally liable for all of the
obligations of the Borrower and the Westwood Place Borrower set forth in this
Agreement and the other Loan Documents; (B) the occurrence of any Event of
Default shall be a Westwood Place Event of Default; (C) the Obligations
which are secured by all Security Documents shall include both the Obligations
of the Borrower under the Loan Documents and the

 

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Obligations of the
Westwood Place Borrower under the Loan Documents to which it is a party;
(D) the Borrower and the Westwood Place Borrower shall execute such
documents and take such actions as may be requested by the Administrative Agent
further to confirm the foregoing; (E) if the Borrower is the transferee of such
transfer and conveyance of the Westwood Place Project, the applicable provisions
governing the recourse and exceptions therefrom applicable to the Borrower with
respect to both the Loans made to the Borrower and the Loans originally made to
the Westwood Place Borrower shall be as set forth in Section 14.23(a)
(and not Section 14.23(b)); and the Borrower’s Manager shall execute and
deliver such documentation as the Administrative Agent may reasonably require
in order to confirm and ratify the Guarantor Documents; and (F) effective
upon the foregoing, the Pledge Agreement shall be of no further force or
effect, and the Administrative Agent shall, at the Borrower’s sole cost and
expense, execute such documents and take such other actions as may be necessary
to terminate any financing statement relating to the collateral covered thereby.
No such Transfer shall release the Westwood Place Borrower from its duties and
obligations under the Loan Documents;

 

(vi)          entering into Approved Leases or the
granting of Liens expressly permitted by the Loan Documents;

 

(vii)         any Transfers of direct or indirect
Equity Interests in the Westwood Place Borrower to the Permitted Public REIT,
its Operating Partnership or any Permitted Public REIT Subsidiary in connection
with a Permitted Public REIT Transfer;

 

(viii)        any Transfers constituting part of the
Permitted Reorganization which are permitted under Section 14.31; and

 

(ix)           following the Permitted Public REIT
Transfer, any of the following so long as no Change of Control shall result
therefrom:  (A) any Transfer or issuance (whether through public offerings, private
placements or other means) of shares or Equity Interests in the Permitted
Public REIT or its Operating Partnership; (B) any conversion, into
securities of the Permitted Public REIT, of partnership units or other Equity
Interests of the Operating Partnership of the Permitted Public REIT; (C) any
issuance or Transfer of any Equity Interests in any Permitted Public REIT
Subsidiary owning any direct or indirect Equity Interests in any Borrower
Party, so long as following such issuance or Transfer the Permitted Public REIT
shall directly or indirectly own fifty-one percent (51%) or more of the
ownership interests in the Westwood Place Borrower (or any successor owner of
the Westwood Place Project permitted by this Agreement) and shall directly or
indirectly control the Westwood Place Borrower (or any successor owner of the
Westwood Place Project permitted by this Agreement); and/or (C) any merger,
consolidation, dissolution, liquidation, reorganization, sale, lease or other
transaction involving any Person other than the Westwood Place Borrower so long
as the Permitted Public REIT (or, as applicable, a Permitted Public REIT
Subsidiary) is the surviving entity and the Permitted Public REIT thereafter
directly or indirectly owns fifty-one percent (51%) or more of the ownership
interests in the Westwood Place Borrower and directly or indirectly controls
the Westwood Place Borrower. As used herein, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall
mean possession, directly or indirectly, of the power to

 

121

 

direct
or cause the direction of the management or policies (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise) of such Person.

 

(b)           Prior to a Permitted Public REIT
Transfer, except for Transfers constituting part of the Permitted
Reorganization, which are permitted under Section 14.31, no new general
partner, manager or managing member that is not owned and controlled, directly
or indirectly, by at least two (2) of the Named Principals shall be admitted to
or created in the Borrower’s Member (nor shall the Borrower’s Member withdraw
or be replaced as the Westwood Place Borrower’s sole manager or the Borrower’s
Manager withdraw or be replaced as the Borrower’s Member’s general partner)
unless the new or replacement general partner, manager or managing member is
owned and controlled, directly or indirectly, by at least two (2) Named
Principals and the general partners or managers owned and controlled, directly
or indirectly, by at least two (2) of the Named Principals own, directly or
indirectly, not less than one percent (1%) of the beneficial interest in the
Borrower’s Member following such admission or replacement and, without the
prior written consent of the Administrative Agent, no other change in the
Westwood Place Borrower’s Organizational Documents (except as permitted in Section
9.01(b) as incorporated by reference in Article IXA) shall be
effected in connection with such replacement; and

 

(c)           Except for Transfers
constituting part of the Permitted Reorganization which are permitted under Section 14.31,
prior to a Permitted Public REIT Transfer, no Transfer shall be permitted which
would cause the Borrower’s Manager or any replacement general partner, manager
or managing member referred to in Section 9.03(b) (or any general
partner, manager or managing member of any Qualified Successor Entity unless
the Borrower is, itself, such manager or managing member) (i) to own, directly
or indirectly, less than one percent (1%) of the beneficial interest in the
Borrower, the Borrower’s Member or such successor to the Borrower or the
Borrower’s Member or (ii) to cease to be “controlled” directly or indirectly by
at least two (2) of the Named Principals (at least one of which shall be Dan A.
Emmett or Jordan L. Kaplan in the case of a Qualified Successor Entity referred
to in clause (I)(A) of the definition of the term “Qualified Successor
Entity”).

 

ARTICLE
X

INSURANCE AND CONDEMNATION PROCEEDS

 

10.01       Casualty
Events.

 

(a)           If a Casualty Event shall occur
as to any Project which results in damage in excess of $500,000, the Borrower
shall give prompt notice of such damage to the Administrative Agent and shall,
subject to the provisions of Section 10.03, promptly commence and
diligently prosecute in accordance with Section 8.07 and this Article
X the completion of the repair and restoration of such Project in
accordance with Applicable Law to, as nearly as reasonably possible, the
condition such Project was in immediately prior to such Casualty Event, with
such alterations as may be reasonably approved by the Administrative Agent (a “Restoration”)
for any Restoration for which such approval is otherwise required pursuant to

 

122

 

Section 10.03(e)
or alteration for which such approval is otherwise required pursuant to Section
8.07. The Borrower shall pay all costs of such Restoration whether or not
such costs are covered by Insurance Proceeds. The Administrative Agent may, but
shall not be obligated to make proof of loss if not made promptly by the
Borrower. All Net Proceeds with respect to a Significant Casualty Event, shall,
at the Administrative Agent’s option, be applied to the payment of the
Obligations unless required to be made available to the Borrower for
Restoration hereunder, in which case such Net Proceeds shall, subject to the
provisions of this Agreement, be made available to the Borrower to pay the
costs incurred in connection with the Restoration. All Net Proceeds with
respect to a Casualty Event that is not a Significant Casualty Event shall,
subject to the provisions of this Agreement, be made available to the Borrower
to pay the costs incurred in connection with the Restoration of the affected
Project.

 

(b)           If Restoration of any Project
following a Casualty Event is reasonably expected to cost not more than the
lesser of (i) $5,000,000 and (ii) ten percent (10%) of the Appraised Value of
such Project (the “Insurance Threshold Amount”), provided no Event of
Default exists, the Borrower may, upon notice to the Administrative Agent,
settle and adjust any claim with respect to such Casualty Event without the
prior consent of the Administrative Agent and the Borrower is hereby authorized
to collect the Insurance Proceeds with respect to any such claim; provided such
adjustment is carried out in a manner consistent with good business practice. In
the event that Restoration of any Project is reasonably expected to cost an
amount equal to or in excess of the Insurance Threshold Amount (a “Significant
Casualty Event”), provided no Event of Default exists, the Borrower may,
with the prior written consent of the Administrative Agent (which consent shall
not be unreasonably withheld), settle and adjust any claim of the Borrower and
agree with the insurer(s) on the amount to be paid on the loss, and the
Insurance Proceeds shall be due and payable solely to the Administrative Agent
(on behalf of the Lenders); notwithstanding the foregoing, the Administrative
Agent shall retain the right to participate (not to the exclusion of the
Borrower) in any such insurance settlement at any time. If an Event of Default
exists, with respect to any Casualty Event, the Administrative Agent, in its
sole discretion, may settle and adjust any claim without the consent of the
Borrower and agree with the insurer(s) on the amount to be paid on the loss,
and the Insurance Proceeds shall be due and payable solely to the Administrative
Agent (on behalf of the Lenders) and deposited in a Controlled Account and
disbursed in accordance herewith. If the Borrower or any party other than the
Administrative Agent is a payee on any check representing Insurance Proceeds
with respect to a Significant Casualty Event, the Borrower shall immediately
endorse, and cause all such third parties to endorse, such check payable to the
order of the Administrative Agent. The Borrower hereby irrevocably appoints the
Administrative Agent as its attorney-in-fact, coupled with an interest, to
endorse such check payable to the order of the Administrative Agent. The
reasonable out-of-pocket expenses incurred by the Administrative Agent in the
settlement, adjustment and collection of the Insurance Proceeds shall become
part of the Obligations and shall be reimbursed by the Borrower to the
Administrative Agent upon demand to the extent not already deducted by the
Administrative Agent from such Insurance Proceeds in determining Net Proceeds.

 

10.02       Condemnation
Awards.

 

(a)           The Borrower shall promptly give
the Administrative Agent notice of any actual Taking or any Taking that has
been threatened in writing and shall deliver to the

 

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Administrative Agent
copies of any and all papers served in connection with such actual or
threatened Taking. The Administrative Agent may participate in any Taking
proceedings (not to the exclusion of the Borrower), and the Borrower shall from
time to time deliver to the Administrative Agent all instruments requested by
it to permit such participation. The Borrower shall, at its expense, diligently
prosecute any such proceedings, and shall consult with the Administrative
Agent, its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. The Administrative Agent may participate in
any such proceedings (not to the exclusion of the Borrower) and may be
represented therein by counsel of the Administrative Agent’s selection at the
Borrower’s cost and expense. Without the Administrative Agent’s prior consent,
the Borrower (i) shall not agree to any Condemnation Award and (ii) shall not
take any action or fail to take any action which would cause the Condemnation
Award to be determined; provided, however, that if no Event of
Default exists, and upon prior written notice to the Administrative Agent, the
Borrower shall have the right to compromise and collect or receive any
Condemnation Award that does not exceed the lesser of (i) $5,000,000 and (ii)
ten percent (10%) of the Appraised Value of such Project, provided that such
condemnation does not result in any material adverse effect upon the Project
affected thereby. In the event of such Taking, the Condemnation Award payable
is hereby assigned to and (except as provided in the preceding sentence) shall
be paid to the Administrative Agent (on behalf of the Lenders) and, except as
expressly set forth in Section 10.03 hereof, shall be applied to the
repayment of the Obligations. If any Project or any portion thereof is subject
to a Taking, the Borrower shall promptly commence and diligently prosecute the
Restoration of such Project in accordance with this Article X and
otherwise comply with the provisions of Section 10.03. If such
Project is sold, through foreclosure or otherwise, prior to the receipt by the
Administrative Agent of the Condemnation Award, the Administrative Agent and
the Lenders shall have the right, whether or not a deficiency judgment on the
Notes shall have been sought, recovered or denied, to receive the Condemnation
Award, or a portion thereof sufficient to pay the Obligations.

 

10.03       Restoration.

 

(a)           If each of the Net Proceeds and
the cost of completing the Restoration shall be not more than the Insurance
Threshold Amount, the Net Proceeds will be disbursed by the Administrative
Agent to the Borrower upon receipt; provided that no Major Default or
Event of Default then exists and, except where the Restoration has already been
completed by the Borrower and the Borrower seeks reimbursement for costs of the
Restoration, the Borrower delivers to the Administrative Agent a written
undertaking to expeditiously commence and to satisfactorily complete with due
diligence the Restoration in accordance with the terms of this Agreement; and
the Borrower thereafter commences and diligently proceeds with the Restoration
thereof in compliance with Section 8.07 and this Article X.

 

(b)           If either the Net Proceeds or
the costs of completing the Restoration is equal to or greater than the Insurance
Threshold Amount, the Administrative Agent shall make the Net Proceeds
available for the Restoration in accordance with the provisions of this Section
10.03. The term “Net Proceeds” for purposes of this Article X
shall mean:  (i) the net amount of all Insurance
Proceeds received by the Administrative Agent pursuant to the Policies as a
result of such damage or destruction, after deduction of the Administrative
Agent’s reasonable out-of-pocket costs and expenses (including, but not limited
to, reasonable counsel fees), if any, in

 

124

 

collecting same, or
(ii) the net amount of the Condemnation Award, after deduction of the
Administrative Agent’s reasonable out-of-pocket costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting same,
whichever the case may be.

 

(c)           The Net Proceeds shall be made
available to the Borrower for Restoration; provided that each of the
following conditions is met:

 

(i)            no Major Default or Event of Default
exists;

 

(ii)           (A) in the event the Net Proceeds are
Insurance Proceeds, less than twenty-five percent (25%) of the total (gross)
floor area of the Improvements on such Project has been damaged, destroyed or
rendered unusable as a result of such Casualty Event or (B) in the event the
Net Proceeds are Condemnation Awards, less than ten percent (10%) of the land
constituting such Project is taken, and such land is located along the
perimeter or periphery of such Project, and no portion of the Improvements
(other than sidewalks, paved areas and decorative non-structural elements of
the Improvements) is located on such land;

 

(iii)          Reserved;

 

(iv)          the Debt Service Coverage Ratio
projected (with Operating Income and Operating Expenses also being projected
rather than being based on the previous calendar quarter) by the Administrative
Agent for a period of one year after the Administrative Agent’s estimated date
for the stabilization of the affected Project following completion of the
Restoration will be equal to or greater than 1:50:1.00 based on Leases with
respect to which the tenants do not have the right to or have waived any right
to terminate their respective Leases;

 

(v)           subject to the applicable provisions
of Section 10.03(l), the Borrower shall commence the Restoration as soon
as reasonably practicable (but in no event later than ninety (90) days after
such Casualty Event or Taking, as the case may be, occurs) and shall diligently
pursue the same to completion to the reasonable satisfaction of the
Administrative Agent;

 

(vi)          the Administrative Agent shall be
satisfied that any operating deficits, including all scheduled payments of
principal and interest under the Notes, which will be incurred with respect to
the subject Project as a result of the occurrence of any such Casualty Event or
Taking, as the case may be, will be covered out of (A) the Net Proceeds, (B)
the proceeds of Business Interruption Insurance, if applicable, or (C) other
funds of the Borrower;

 

(vii)         the Administrative Agent shall be
satisfied that the Restoration will be completed on or before the earliest to
occur of (A) six (6) months prior to the Stated Maturity Date, (B) such time as
may be required under Applicable Law in order to repair and restore the subject
Project to the condition it was in immediately prior to such Casualty Event or
to as nearly as possible the condition it was in immediately prior to such
Taking, as the case may be, and (C) six (6) months prior to the expiration of
the Business Interruption Insurance unless the Borrower delivers to the
Administrative Agent

 

125

 

such additional security to the Administrative Agent
in an amount reasonably determined by the Administrative Agent which additional
security shall consist of cash or a letter of credit reasonably satisfactory to
the Administrative Agent;

 

(viii)        the subject Project and the use thereof
after the Restoration will be in substantial compliance with and permitted
under all Applicable Laws;

 

(ix)           the Borrower shall deliver, or cause
to be delivered, to the Administrative Agent satisfactory evidence that after
Restoration, the subject Project would be at least as valuable as immediately
before the Casualty Event or Taking occurred;

 

(x)            such Casualty Event or Taking, as
the case may be, does not result in the permanent loss of any current access to
the subject Project;

 

(xi)           the Borrower shall deliver, or cause
to be delivered, to the Administrative Agent a signed detailed budget approved
in writing by the Borrower’s architect or engineer stating the entire cost of
completing the Restoration, which budget shall be reasonably acceptable to the
Administrative Agent and any architect or engineer the Administrative Agent may
engage (at the Borrower’s expense); and

 

(xii)          the Net Proceeds together with any
cash or cash equivalent deposited by the Borrower with the Administrative Agent
are sufficient in the Administrative Agent’s judgment to cover the cost of the
Restoration.

 

(d)           Except for proceeds of a Casualty
Event or Taking received and retained by the Borrower in compliance with the
provisions of this Article X, the Net Proceeds shall be held by the
Administrative Agent in a Controlled Account, until disbursed in accordance
with the provisions of this Section 10.03, and shall constitute
additional security for the Obligations. Upon receipt of evidence reasonably
satisfactory to the Administrative Agent that all the conditions precedent to
such advance, including those set forth in subsection (c) above, have
been satisfied, the Net Proceeds shall be disbursed by the Administrative Agent
to, or as directed by, the Borrower from time to time during the course of the
Restoration in substantially the same manner and subject to similar conditions
as if such advances were being made in connection with a construction loan,
such manner of disbursement and conditions to be determined by the
Administrative Agent, including the Administrative Agent’s receipt of (i)
advice from the Restoration Consultant (who shall be employed by the
Administrative Agent at the Borrower’s sole expense) that the work completed or
materials installed conform to said budget and plans, as approved by the
Administrative Agent, (ii) evidence that all materials installed and work and
labor performed to the date of the applicable advance (except to the extent
that they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid for in full, including the receipt of
waivers of lien, contractor’s certificates, surveys, receipted bills, releases,
title policy endorsements and such other evidences of cost, payment and
performance satisfactory to the Administrative Agent, and (iii) evidence that
there exist no notices of pendency, stop orders, mechanic’s or materialman’s
liens or notices of intention to file same, or any other Liens of any nature
whatsoever on the subject Project which have not either been fully bonded to
the reasonable satisfaction of the Administrative Agent and discharged of
record or in

 

126

 

the alternative fully
insured to the reasonable satisfaction of the Administrative Agent under the
Title Policy.

 

(e)           All plans and specifications
required in connection with any Restoration resulting in Net Proceeds in excess
of the Insurance Threshold Amount shall be subject to prior review and approval
(such approval not to be unreasonably withheld) in all respects by the
Administrative Agent and by an independent consulting engineer selected by the Administrative
Agent (the “Restoration Consultant”). All plans and specifications
required in connection with any Restoration resulting in Net Proceeds not in
excess of the Insurance Threshold Amount shall be provided to the
Administrative Agent in the ordinary course of business. The Administrative
Agent shall have the use of the plans and specifications and all permits,
licenses and approvals required or obtained in connection with any Restoration.
With respect to any Restoration resulting in Net Proceeds in excess of the
Insurance Threshold Amount (whether resulting from a Casualty Event or a
Taking), the identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as all contracts having a cost in excess of
$100,000, shall be subject to the prior review and approval (such approval not
to be unreasonably withheld) of the Administrative Agent and the Restoration
Consultant. All costs and expenses incurred by the Administrative Agent in
connection with making the Net Proceeds available for the Restoration including
reasonable counsel fees and disbursements and the Restoration Consultant’s
fees, shall be paid by the Borrower. The Borrower shall also obtain, at its
sole cost and expense, all necessary Government Approvals as and when required
in connection with such Restoration and provide copies thereof to the
Administrative Agent and the Restoration Consultant.

 

(f)            In no event shall the
Administrative Agent be obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for
work in place as part of the Restoration, as certified by the Restoration
Consultant, minus the Restoration Retainage. The term “Restoration
Retainage” shall mean the greater of (i) an amount equal to ten percent
(10%) of the hard costs actually incurred for work in place as part of the
Restoration, as certified by the Restoration Consultant and (ii) the amount
actually held back by the Borrower from contractors, subcontractors and materialmen
engaged in the Restoration. The Restoration Retainage shall not be released
until the Restoration Consultant certifies to the Administrative Agent that the
Restoration has been substantially completed in accordance with the provisions
of this Section 10.03, subject to punch-list items and other
non-material items of work and that all approvals necessary for the
re-occupancy and use of the subject Project have been obtained from all
appropriate Governmental Authorities, and the Administrative Agent receives
evidence reasonably satisfactory to the Administrative Agent that the costs of
the Restoration have been paid in full or will be paid in full out of the
Restoration Retainage; provided, however, that the Administrative
Agent will release the portion of the Restoration Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Restoration Consultant certifies to
the Administrative Agent that such contractor, subcontractor or materialman has
satisfactorily completed all work and has supplied all materials in accordance
with its contract, and the Administrative Agent receives lien waivers and
evidence of payment in full of all sums due to such contractor, subcontractor
or materialman as may be reasonably requested by the Administrative Agent or by
the Title Company issuing the Title Policy, and the Administrative Agent
receives an endorsement to the Title Policy insuring the continued priority of
the lien of the Deed of Trust and evidence of payment of any premium payable
for such endorsement. If

 

127

 

required by the
Administrative Agent, the release of any such portion of the Restoration
Retainage shall be approved by the surety company, if any, which has issued a
payment or performance bond with respect to such contractor, subcontractor or
materialman.

 

(g)           The Administrative Agent shall
not be obligated to make disbursements of the Net Proceeds more frequently than
once per month.

 

(h)           If at any time the Net Proceeds
or the undisbursed balance thereof shall not, in the reasonable opinion of the
Administrative Agent in consultation with the Restoration Consultant, be
sufficient to pay in full the balance of the costs which are estimated by the
Restoration Consultant to be incurred in connection with the completion of the
Restoration, the Borrower shall deposit the deficiency (the “Net Proceeds
Deficiency”) with the Administrative Agent within ten (10) Business Days of
the Administrative Agent’s request and before any further disbursement of the
Net Proceeds shall be made. The Net Proceeds Deficiency shall be held in a
Controlled Account and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and, until so disbursed, shall constitute
additional security for the Obligations.

 

(i)            After the Restoration
Consultant certifies to the Administrative Agent that a Restoration has been
substantially completed in accordance with the provisions of this Section
10.03, and the receipt by the Administrative Agent of evidence satisfactory
to the Administrative Agent that all costs incurred in connection with the
Restoration have been paid in full, the excess, if any, of the Net Proceeds and
the remaining balance, if any, of the Net Proceeds Deficiency deposited in a
Controlled Account shall be remitted to the Borrower, provided that no
Event of Default shall exist.

 

(j)            All Net Proceeds not required
(i) to be made available for the Restoration or (ii) to be returned to the
Borrower as excess Net Proceeds pursuant to subsection (i) above may (A)
be retained and applied by the Administrative Agent toward the payment of the
Obligations, whether or not then due and payable, in such order, priority and
proportions as the Administrative Agent in its sole discretion shall deem
proper (but without premium or penalty) or (B) at the sole discretion of
the Administrative Agent, be paid, either in whole or in part, to the Borrower
for such purposes and upon such conditions as the Administrative Agent shall
designate. In the event the Net Proceeds are applied to the Obligations and all
of the Obligations have been performed or are discharged by the application of
less than all of the Net Proceeds, then any remaining Net Proceeds will be paid
over to the Borrower or any other party legally entitled thereto.

 

(k)           Notwithstanding any Casualty or
Taking, the Borrower shall continue to pay the Obligations in the manner
provided in the Notes, this Agreement and the other Loan Documents and the
Outstanding Principal Amount shall not be reduced unless and until (i) any
Insurance Proceeds or Condemnation Award shall have been actually received by
the Administrative Agent, (ii) the Administrative Agent shall have deducted its
reasonable expenses of collecting such proceeds and (iii) the Administrative
Agent shall have applied any portion of the balance thereof to the repayment of
the Outstanding Principal Amount in accordance with Section 10.03(j). The
Lenders shall not be limited to the interest paid on any Condemnation

 

128

 

Award but shall continue
to be entitled to receive interest at the rate or rates provided in the Notes
and this Agreement if such interest is then due hereunder.

 

(l)            Notwithstanding anything to the
contrary contained in this Article X or Section 8.07, if pursuant
to the provisions of this Article X the Net Proceeds are required to be
made available to the Borrower for Restoration of the damage caused by a
Casualty Event or any Taking, the Borrower’s obligation to commence or
thereafter to proceed with such Restoration shall be conditioned upon the
Borrower’s receipt of the Net Proceeds attributable to such Casualty Event or
Taking, respectively; provided, however, that nothing contained
in this sentence (or any other provision of this Article X) shall (i)
defer, limit or excuse in any respect the Borrower’s obligation to commence or
proceed with the Restoration of any Project: (A) if the Borrower does not
diligently pursue the collection of such Net Proceeds; (B) where the relevant
Casualty Event is not a Significant Casualty Event or the Taking involves a
claim of not more than the lesser of $5,000,000 or ten percent (10%) of the
Appraised Value of the affected Project; (C) in the case of a Casualty Event,
to the extent that the costs of such Restoration are included within any
applicable deductible or self-insurance retention, or exceed the applicable
limits of insurance, under any insurance policy maintained hereunder; (D) in
the case of a Casualty Event, if the Borrower is, at the time of such Casualty
Event, in default in its obligation to maintain the insurance policies required
under Section 8.05 in any respect which would reduce the amount of Net
Proceeds available to the Borrower on account of such Casualty Event below the
amount which would have been available had the Borrower not been in default of
such obligation, then to the extent of such reduction; or (E) to the extent
that the Net Proceeds available to the Borrower on account of such Casualty
Event or Taking are reasonably anticipated to be reduced as a result of any
defense to coverage or other defense available to the insurer or condemning
authority, whether as a result of any act or omission of the Borrower or
otherwise (provided that the undisputed portion of such Net Proceeds shall have
been paid by the insurer or condemning authority and made available to the
Borrower); (ii) defer, limit or excuse in any respect the Borrower’s obligation
to undertake such prudent measures (subject in all cases to any applicable
provisions in Section 8.07) as may be necessary to keep any Project,
following any Casualty Event or Taking, safe, secure and protected and as may
be appropriate to avoid further deterioration or damage; or (iii) defer, limit
or excuse any obligation of the Borrower under this Agreement or the other Loan
Documents (other than the obligation to commence and diligently prosecute the
Restoration of such damage).

 

ARTICLE XA

INSURANCE AND CONDEMNATION PROCEEDS

RELATED TO WESTWOOD PLACE

 

The provisions set forth
in Article X shall be applicable to the Westwood Place Borrower, the
Loans made to it, and the Westwood Place Project as if, in each case as the
context requires, each reference in Article X to the “Borrower” or any “Borrower
Party” or “Borrower Parties” shall mean the Westwood Place Borrower, each
reference therein to the “Loans” shall mean the Loans to be made to the Westwood
Place Borrower, each reference therein to the “Commitment” shall mean the
Westwood Place Commitment, each reference therein to any “Project” shall mean
the Westwood Place Project, each reference therein to any Loan Document

 

129

 

shall mean the applicable Loan Document to which the Westwood Place
Borrower is a party, if any, and each reference therein to a “Default” or “Event
of Default” shall mean a Westwood Place Default or Westwood Place Event of
Default, respectively.

 

ARTICLE
XI

CASH TRAP ACCOUNT

 

11.01       Low
DSCR Trigger Event. Upon the occurrence of a Low DSCR Trigger Event and on
each day that the required monthly report is due under Section 8.01(e)
and continuing for each month thereafter during any Low DSCR Trigger Period,
the Borrower and the Westwood Place Borrower shall cause all Excess Cash from
the Projects and the Westwood Place Project to be paid each month directly to
the Administrative Agent for deposit into Cash Trap Accounts established for
the Borrower and the Westwood Place Borrower, respectively, as additional
collateral for their respective Obligations.

 

(a)           Establishment and Maintenance of
the Cash Trap Account.

 

(i)            Each Cash Trap Account (A) shall be
a separate and identifiable account from all other funds held by the Depository
Bank and (B) shall contain only funds required to be deposited pursuant to this
Section 11.01. Any interest which may accrue on the amounts on deposit
in a Cash Trap Account shall be added to and shall become part of the balance
of such Cash Trap Account. The Borrower and the Westwood Place Borrower shall
each enter into with the Administrative Agent and the applicable Depository
Bank an agreement (the “Cash Trap Account Security Agreement”),
substantially in the form of Exhibit C attached hereto (with such
changes thereto as may be required by the Depository Bank and satisfactory to
the Administrative Agent) which shall govern the Cash Trap Account established
for it and the rights, duties and obligations of each party to such Cash Trap
Account Security Agreement.

 

(ii)           Each Cash Trap Account Security
Agreement shall provide that (A) the Cash Trap Account shall be established in
the name of the Administrative Agent, (B) the Cash Trap Account shall be
subject to the sole dominion, control and discretion of the Administrative
Agent, and (C) neither the Borrower, nor the Westwood Place Borrower nor
any other Person, including, without limitation, any Person claiming on behalf
of or through the Borrower or the Westwood Place Borrower, shall have any right
or authority, whether express or implied, to make use of or withdraw, or cause
the use or withdrawal of, any proceeds from the Cash Trap Account or any of the
other proceeds deposited in the Cash Trap Account, except as expressly provided
in this Agreement or in the Cash Trap Account Security Agreement.

 

(b)           Deposits to, Disbursements
and Release from the Cash Trap Account. All deposits to and disbursements
of all or any portion of the deposits to the Cash Trap Account shall be in
accordance with this Agreement and the Cash Trap Account Security Agreement. The
Borrower and the Westwood Place Borrower hereby agree to pay any and all fees
charged by Depository Bank in connection with the maintenance of their respective
Cash Trap Accounts and

 

130

 

the performance of its
duties. During any Low DSCR Trigger Period, provided that no Event of Default
or Westwood Place Event of Default, respectively, exists at the time of any
request by the Borrower or the Westwood Place Borrower for a disbursement from
its respective Cash Trap Account, the Administrative Agent will direct the
Depository Bank to transfer amounts credited to the Cash Trap Account for the
Borrower or the Westwood Place Borrower to the Borrower’s Account to pay or
reimburse the Borrower or the Westwood Place Borrower, respectively, for (i)
Real Estate Taxes or Insurance Premiums, (ii) capital expenditures incurred
pursuant to an Approved Annual Budget (such capital expenditures, “Approved
Capital Expenditures”), (iii) actual costs of tenant improvements and/or
leasing commissions pursuant to an Approved Lease and set forth in an Approved
Annual Budget (such expenditures, “Approved Leasing Expenditures”), or
(iv) capital expenditures which have been approved by the Administrative Agent
in accordance with subsection (c)(iv) below or leasing expenditures
incurred pursuant to an Approved Lease, in either case which are not set forth
in an Approved Annual Budget (such expenditures, “Extraordinary Capital or
Leasing Expenditures”), in accordance with the terms and conditions set
forth below in subsection (c). Provided no Default, Event of Default or
Westwood Place Event of Default then exists, any funds held in the Cash Trap
Account shall be released to the Borrower for the account of the Borrower and
the Westwood Place Borrower upon the occurrence of a Low DSCR Release Event
and, in such event the Borrower and the Westwood Place Borrower shall no longer
be required to cause the deposit of the subsequent Excess Cash into their
respective Cash Trap Accounts unless a Low DSCR Trigger Event occurs with
respect to any future calendar quarter.

 

(c)           Conditions to Disbursements
from Cash Trap Account. Each disbursement from a Cash Trap Account is
subject to the satisfaction of each of the following conditions:

 

(i)            Disbursements shall be utilized
solely for Real Estate Taxes, Insurance Premiums, Approved Capital
Expenditures, Approved Leasing Expenditures or Extraordinary Capital or Leasing
Expenditures and shall be in an amount no greater than the actual cost of such
Real Estate Taxes or Insurance Premiums, Approved Capital Expenditures,
Approved Leasing Expenditures or Extraordinary Capital or Leasing Expenditures
to the extent not theretofore paid from Operating Income;

 

(ii)           Disbursements for Approved Capital
Expenditures, Approved Leasing Expenditures and Extraordinary Capital or
Leasing Expenditures shall not be made more frequently than monthly, and each
disbursement (if any) shall be in an amount not less than $25,000.00 (unless
the disbursement represents the final disbursement for a particular Approved
Capital Expenditure or Approved Leasing Expenditure);

 

(iii)          Not less than ten (10) days prior to
the requested funding date for a disbursement, the Administrative Agent shall
have received a written request for such disbursement executed by an Authorized
Officer, which request shall specify the date on which the Borrower or the
Westwood Place Borrower requests the disbursement to be made and the Person(s)
or account(s) to whom

 

131

 

such disbursement should
be made (such duly completed request is referred to herein as a “Disbursement
Request”);

 

(iv)          Not less than ten (10) days prior to
each disbursement for Approved Capital Expenditures, Approved Leasing
Expenditures or Extraordinary Capital or Leasing Expenditures, the
Administrative Agent shall have received, reviewed and approved (A) a
certificate executed by the Borrower or the Westwood Place Borrower, as
applicable, or, if such Person was engaged for such work, the Borrower’s or the
Westwood Place Borrower’s architect or engineer, as applicable, certifying
that, to the knowledge of such Person, the work for which such disbursement is
being requested has been completed to the percentage of completion specified in
the Disbursement Request substantially in accordance with the applicable plans
and specifications therefor and in a good and workmanlike manner; (B) sworn
statements and conditional lien waivers from all contractors, subcontractors
and materialmen with respect to such work; (C) sworn statements and final lien
waivers from all contractors and subcontractors and materialmen with respect to
work theretofore completed and for which a disbursement was made to the
Borrower or the Westwood Place Borrower, as applicable, in a prior month; (D)
copies of paid invoices for prior disbursements and open invoices for requested
disbursements, and an all bills paid affidavit from the Borrower or the
Westwood Place Borrower, as applicable; (E) with respect to the final payment
for a work of improvement, certificates of occupancy (or similar
documentation), as required by Applicable Law, relating to the work for which
such disbursement is being made; and (F) such other supporting documentation as
may be reasonably required by the Administrative Agent, all in form and
substance reasonably satisfactory to the Administrative Agent. Notwithstanding
the foregoing, in lieu of complying with the requirements in clauses (A)
through (F) above with respect to any requested disbursement for Approved
Capital Expenditures, Approved Leasing Expenditures or Extraordinary Capital or
Leasing Expenditures which consists of leasing commissions or sums due pursuant
to any contract or subcontract providing for an aggregate contract sum of not
more than $50,000, the Borrower may, not less than ten (10) days prior to the
requested funding date for any disbursement on account thereof, deliver to the
Administrative Agent, together with (or as part of) its Disbursement Request, a
certificate executed by an Authorized Officer on behalf of the Borrower
certifying that such sums so requested are due and payable and are Approved
Capital Expenditures, Approved Leasing Expenditures or Extraordinary Capital or
Leasing Expenditures which have been incurred in compliance with this Agreement
and containing copies of the relevant invoices, contracts or other back-up
documentation to confirm that such sums are then owing; and

 

(v)           Based on the most recent
reconciliation report delivered by the Borrower pursuant to Section
8.01(e)(iii) and Article VIIIA prior to the delivery of such
Disbursement Request (or, if the most recent such report has not been delivered
pursuant to such section or article, based on such other information as the
Administrative Agent shall determine in its reasonable discretion), the results
from the operations of the Projects for the month and year-to-date covered by
such reconciliation report shall be

 

132

 

equal to or better than
the results contemplated by the Approved Annual Budget for such month and
year-to-date, except for Extraordinary Capital or Leasing Expenditures or other
expenses or items approved by the Administrative Agent.

 

ARTICLE
XII

EVENTS OF DEFAULT

 

12.01       Events
of Default. Any one or more of the following events shall constitute an “Event
of Default”:

 

(a)           The Borrower shall: (i) fail to
pay any principal of any Loan when due (whether at stated maturity, mandatory
prepayment or otherwise); or (ii) fail to pay any interest on any Loan,
any fee or any other amount (other than an amount referred to in clause (i)
above) payable by it under this Agreement or under any other Loan Document,
when and as the same shall become due and payable, and, in the case of this clause
(ii), such default shall continue for a period of five (5) days; or

 

(b)           The Borrower (or, if applicable,
any Borrower Party) shall default in the performance of any of its obligations
under any of Sections 8.05, 8.06, 8.12, 8.17, 8.19
or Article IX (other than Section 9.06); or any Change in
Control shall occur; or the Borrower shall default in the performance of any of
its obligations under Section 8.16 which are required to be performed
during any Low DSCR Trigger Period; or the Borrower shall make any Restricted
Payment while any Event of Default exists; or the Borrower shall make a
Restricted Payment while any other Major Default exists unless such Major
Default is cured within the applicable cure or grace period therefor; or

 

(c)           Any representation, warranty or
certification made or deemed made herein or in any other Loan Document (or in
any Modification hereto or thereto) by the Borrower or any request, notice or
certificate furnished by or on behalf of any Borrower Party pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading as
of the time made or furnished in any material respect; or

 

(d)           Any of the Bankruptcy Parties shall
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due; or

 

(e)           An involuntary proceeding shall
be commenced or an involuntary petition shall be filed, seeking (i)
liquidation, reorganization or other relief in respect of any of the Bankruptcy
Parties or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any of the Bankruptcy
Parties or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for a period of sixty (60)
days or an order or decree approving or ordering any of the foregoing shall be
entered; or

 

(f)            Any Bankruptcy Party shall (i)
voluntarily commence as to itself any proceeding or file any petition seeking
liquidation, reorganization or other relief under any

 

133

 

Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (e)
of this Section 12.01, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for it or for a substantial part of any of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing; or

 

(g)           The Borrower shall default in
the payment when due of any principal of or interest on any of its Indebtedness
(other than the Obligations) in excess of Five Million Dollars ($5,000,000) and
such default shall not be cured within any applicable notice or cure period
provided with respect to such Indebtedness; or any event specified in any note,
agreement, indenture or other document evidencing or relating to any such
Indebtedness shall occur if the effect of such event is to cause, or (with the
giving of any notice or the lapse of time or both) to permit the holder or
holders of such Indebtedness to cause, such Indebtedness to become due, or to
be prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity; or

 

(h)           Any of the Bankruptcy Parties shall
be terminated, dissolved or liquidated (as a matter of law or otherwise) or
proceedings shall be commenced by any Person (including any Bankruptcy Party)
seeking the termination, dissolution or liquidation of any Bankruptcy Party,
except, in each case, in connection with a merger, termination, dissolution or
liquidation permitted by Section 9.03(a) or Section 14.31;
or

 

(i)            One or more (i) judgments for
the payment of money (exclusive of judgment amounts fully covered by insurance
(other than permitted deductibles) where the insurer has admitted liability in
respect of the full amount of such judgment) aggregating in excess of One
Million Dollars ($1,000,000) shall be rendered against one or more of the
Borrower Parties or (ii) non-monetary judgments, orders or decrees shall be
entered against any of the Borrower Parties which have or would reasonably be
expected to have a Material Adverse Effect, and, in either case, the same shall
remain undischarged for a period of thirty (30) consecutive days during which
execution shall not be effectively stayed (or bonded over through the posting
of a bond in accordance with a statutory bonding procedure the effect of which
is to limit the judgment creditor’s claim to recovery under the bond), or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of such Borrower Party to enforce any such judgment; or

 

(j)            An ERISA Event shall have
occurred that, in the opinion of the Administrative Agent, when taken together with
all other such ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; or

 

(k)           The Liens created by the
Security Documents shall at any time not constitute a valid and perfected first
priority Lien (subject to the Permitted Title Exceptions) on the collateral
intended to be covered thereby in favor of the Administrative Agent, free and
clear of all other Liens (other than the Permitted Title Exceptions and Liens
which are described in clauses (b), (c), (e) and (g) of
the definition of “Permitted Liens” or which are described in

 

134

 

clauses (a), (b),
(c), (e) and (h) of Section 9.02 of this Agreement, and
which are in the case of Liens described in clause (e) of the definition of “Permitted
Liens” and Section 9.02 (e) of this Agreement subordinate to the Lien of
the Deed of Trust encumbering the affected Project), or, except for expiration
in accordance with its terms or releases or terminations contemplated by this
Agreement, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by any Borrower Party or any of their Affiliates
(controlled by the Permitted Public REIT, in the case of contest occurring
after a Permitted Public REIT Transfer); or

 

(l)            The Guarantor shall
(i) default under any of the Guarantor Documents beyond any applicable
notice and grace period; or (ii) revoke or attempt to revoke, contest or
commence any action against its obligations under any of the Guarantor
Documents; or

 

(m)          At any time while a Guarantee
furnished by the Borrower or any Subsidiary of the Borrower is in effect with
respect to any Guaranteed Line of Credit, any event of default shall occur
under any of the applicable documents evidencing or securing such Guaranteed
Line of Credit; or any event specified in any of the applicable documents
evidencing or securing such Guaranteed Line of Credit shall occur and the effect
of such event is to cause, or (with the giving of any notice or the lapse of
time or both) to permit the lenders providing such Guaranteed Line of Credit to
cause, all amounts outstanding under Guaranteed Line of Credit to become
immediately due and payable prior to the stated maturity date; or

 

(n)           Reserved

 

(o)           The Borrower uses, or permits
the use of, funds from the Security Accounts for
any purpose other than the purpose for which such funds were disbursed from the
Security Accounts; or

 

(p)           Except as permitted by Section 8.19(i),
the failure of Borrower to maintain, or cause to be maintained, Hedge
Agreements with respect to the Aggregate Notional Amount in accordance with Section 8.19;
or the occurrence of any default by or termination event as to the Borrower or
Other Swap Pledgor under any Hedge Agreement maintained with respect to the
Aggregate Notional Amount which is not cured within the applicable notice and grace
or cure periods provided therein; or

 

(q)           Reserved;

 

(r)            Any of the Borrower Parties
shall default under any of the other terms, covenants or conditions of this
Agreement or any other Loan Document not set forth above in this Section
12.01 and such default shall continue for thirty (30) days after notice
from the Administrative Agent to the Borrower; provided, however,
that if (i) such default is susceptible of cure but the Administrative Agent
reasonably determines that such non-monetary default cannot be reasonably cured
within such thirty (30) day period, (ii) the Administrative Agent determines,
in its sole discretion, that such default does not create a material risk of
sale or forfeiture of, or substantial impairment in value to, any material
portion of the Projects, and (iii) the Borrower has provided the
Administrative Agent with security reasonably satisfactory to the
Administrative Agent against any interruption of payment or impairment of
collateral that is

 

135

 

reasonably likely to
result from such continuing failure, then, so long as the relevant Borrower
Party shall have commenced to cure such default within such thirty (30) day
period and thereafter diligently and expeditiously proceeds to cure the same,
such thirty (30) day period shall be extended for such time as is reasonably
necessary for the relevant Borrower Party in the exercise of due diligence to
cure such default, but in no event shall such period exceed ninety (90) days
after the original notice from the Administrative Agent or extend beyond the
Maturity Date; or

 

(s)           At any time following a Transfer
to a Qualified Successor Entity consisting of a Permitted Private REIT or its Permitted
Private REIT Subsidiary pursuant to Section 9.03(a)(iii), the senior
officers of and members of the Board of Directors of the Permitted Private REIT
shall include less than two (2) of the Named Principals; or at the time of a
Permitted Public REIT Transfer, the senior officers of and members of the Board
of Directors of the Permitted Public REIT shall include less than two (2) of
the Named Principals; or

 

(t)            Any Westwood Place Event of
Default shall occur, or any default shall occur under the provisions of any of
the other Loan Documents to which the Westwood Place Borrower is a party beyond
any applicable notice and cure periods contained therein.

 

12.02       Remedies.
Upon the occurrence of an Event of Default and at any time thereafter during
the existence of such event, the Administrative Agent may (subject to, and in
accordance with, the provisions of Section 13.03) and, upon request of
the Required Lenders shall, by written notice to the Borrower, pursue any one
or more of the following remedies, concurrently or successively, it being the
intent hereof that none of such remedies shall be to the exclusion of any
other:

 

(a)           In the case of an Event of
Default other than one referred to in clause (e) or (f)
of Section 12.01 with respect to any Borrower Party, terminate the
Commitments of the Borrower and/or declare the Outstanding Principal Amount of
the Loans to the Borrower, and the accrued interest on the Loans to the
Borrower and all other amounts payable by the Borrower hereunder (including any
amounts payable under Section 5.05) and under the Notes made by the
Borrower and the Obligations of the Borrower under the other Loan Documents to
which the Borrower is a party to be forthwith due and payable and, if the
Administrative Agent or an Affiliate is a counterparty to a Hedge Agreement,
then the Administrative Agent may designate a default or similar event under
such Hedge Agreement whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower. In the case of the
occurrence of an Event of Default referred to in clause (e)
or (f) of Section 12.01 with respect to a Borrower Party,
the Commitments of the Borrower shall automatically be terminated and the
Outstanding Principal Amount of the Loans to the Borrower, and the accrued
interest on, the Loans to the Borrower and all other amounts payable by the
Borrower hereunder (including any amounts payable under Section 5.05)
and under the Notes made by the Borrower and the Obligations of the Borrower
under the other Loan Documents to which the Borrower is a party shall
automatically become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Borrower;

 

136

 

(b)           If the Borrower shall fail,
refuse or neglect to make any payment or perform any Obligations of the
Borrower under the Loan Documents to which the Borrower is a party, then, while
any Event of Default exists and without notice to or demand upon the Borrower
and without waiving or releasing any other right, remedy or recourse the
Administrative Agent may have because of such Event of Default, the
Administrative Agent may (but shall not be obligated to) make such payment or
perform such Obligation for the account of and at the expense of the Borrower,
and shall have the right to enter upon the Projects for such purpose and to
take all such action thereon and with respect to the Projects as it may deem
necessary or appropriate. If the Administrative Agent shall elect to pay any
sum due with respect to the Projects, the Administrative Agent may do so in
reliance on any bill, statement or assessment procured from the appropriate
Governmental Authority or other issuer thereof without inquiring into the
accuracy or validity thereof. Similarly, in making any payments to protect the
security intended to be created by the Loan Documents to which the Borrower is
a party, the Administrative Agent shall not be bound to inquire into the
validity of any apparent or threatened adverse title, Lien, encumbrance, claim
or charge before making an advance for the purpose of preventing or removing
the same. Additionally, if any Hazardous Substance affects or threatens to
affect any of the Projects, the Administrative Agent may (but shall not be
obligated to) give such notices and take such actions as it deems necessary or
advisable in order to abate the discharge of or remove any Hazardous Substance;
and/or

 

(c)           Exercise or pursue any other
remedy or cause of action permitted under this Agreement, any or all of the
Security Documents to which the Borrower is a party or any other Loan Document
to which the Borrower is a party, or conferred upon the Administrative Agent
and the Lenders by operation of law.

 

ARTICLE XIIA

WESTWOOD PLACE EVENTS OF DEFAULT

 

12.01A  Westwood
Place Events of Default. It shall be an event of default with respect to
the Westwood Place Borrower and the Westwood Place Project (“Westwood Place
Event of Default”) if (a) any event shall occur with respect to the Westwood
Place Borrower, the Loans made to the Westwood Place Borrower or the Westwood
Place Project which would constitute an Event of Default as if each reference
in Section 12.01 to the “Borrower” or any “Borrower Party” or “Borrower
Parties” shall mean the Westwood Place Borrower, each reference therein to the “Loans”
shall mean the Loans made or to be made to the Westwood Place Borrower, each
reference therein to the “Commitment” shall mean the Westwood Place Commitment,
each reference therein to any “Project” shall mean the Westwood Place Project,
each reference therein to any Loan Document shall mean and be limited to the
applicable Loan Document to which the Westwood Place Borrower is a party, if
any, each reference therein to any Security Document shall mean, and be limited
to, the applicable Security Document to which the Westwood Place Borrower is a
party, if any and each reference therein to a “Default” or “Event of Default”
shall mean a Westwood Place Default or Westwood Place Event of Default,
respectively; provided however, that (i) Events of Default in Section
12.01 that refer to provisions of this Agreement that are made inapplicable
to, or incorporated by reference and modified with respect to, the Westwood
Place Borrower by the terms of Articles IIA through

 

137

 

XIIIA or Section 14.30, shall
not apply to the extent so made inapplicable and shall only apply as so
incorporated and modified, and (ii) as to the Westwood Place Borrower, the
provisions of Section 12.01(p) shall be modified in their entirety to
read as follows:  “There shall not be
maintained (whether by the Borrower on account of the Loans to the Westwood
Place Borrower or directly by the Westwood Place Borrower or any Other Swap
Pledgor) in a notional amount equal to the Loans to the Westwood Place
Borrower, a Hedge Agreement which is in compliance with the requirements of Section
8.19 as incorporated by reference in Article VIIIA; or there shall
occur any default by or termination event as to the Borrower or the Westwood
Place Borrower thereunder which is not cured within the applicable notice and
cure periods provided therein (it being understood and agreed by the Borrower
and the Westwood Place Borrower that the notional amount under the Hedge
Agreements entered into by the Borrower or Other Swap Pledgor pursuant to Section
8.19 shall be allocated to and deemed to satisfy the obligations of the
Westwood Place Borrower under Section 8.19 as incorporated by reference
in Article VIIIA first, before any such notional amount is allocated to
or deemed to satisfy the obligations of the Borrower under Section 8.19)”.

 

12.02A  Westwood
Place Remedies. Upon the occurrence of a Westwood Place Event of Default
and at any time thereafter during the continuance of such event, the
Administrative Agent may (subject to, and in accordance with, the provisions of
Section 13.03) and, upon request of the Required Lenders shall, by
written notice to the Westwood Place Borrower, pursue any of the remedies
available to it under Section 12.02, as if each reference in Section
12.02 to the “Borrower” or any “Borrower Party” or “Borrower Parties” shall
mean the Westwood Place Borrower, each reference therein to the “Loans” shall
mean the Loans to be made to the Westwood Place Borrower, each reference therein
to the “Commitment” shall mean the Westwood Place Commitment, each reference
therein to any “Project” shall mean the Westwood Place Project, each reference
therein to any Loan Document shall mean the applicable Loan Document to which
the Westwood Place Borrower is a party, if any, each reference therein to any
Security Document shall mean, and be limited to, the applicable Security
Document to which the Westwood Place Borrower is a party, if any, and each
reference therein to a “Default” or “Event of Default” shall mean a Westwood
Place Default or Westwood Place Event of Default, respectively. In addition,
while a Westwood Place Event of Default exists, the Administrative Agent and
the Lenders shall, by virtue of Section 12.01(t), have all of the rights
and remedies available to them under Section 12.02 (and, with reference
to the above references to Section 12.01(t) and Section 12.02,
without giving effect to any changes in the meanings of defined terms as
specified above in this Article XIIA). Such remedies may be exercised
concurrently or successively, it being the intent hereof that none of such
remedies shall be to the exclusion of any other.

 

ARTICLE
XIII

THE ADMINISTRATIVE AGENT

 

13.01       Appointment,
Powers and Immunities. Each Lender hereby irrevocably appoints and
authorizes the Administrative Agent to act as its agent hereunder and under the
other Loan Documents with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement and of the other Loan
Documents, together with such other

 

138

 

powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 13.05 and the first sentence of Section 13.06
shall include reference to its Affiliates and its own and its Affiliates’
officers, directors, employees and agents):

 

(a)           shall have no duties or
responsibilities except those expressly set forth in this Agreement and in the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a fiduciary or trustee for any Lender except to the extent
that the Administrative Agent acts as an agent with respect to the receipt or
payment of funds, nor shall the Administrative Agent have any fiduciary duty to
the Borrower nor shall any Lender have any fiduciary duty to the Borrower or
any other Lender;

 

(b)           shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained
in this Agreement or in any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement,
any Note or any other Loan Document or any other document referred to or
provided for herein or therein or for any failure by the Borrower or any other
Person to perform any of its obligations hereunder or thereunder;

 

(c)           shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document or under any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith, except for its own
gross negligence, bad faith or willful misconduct;

 

(d)           shall not, except to the extent
expressly instructed by the Required Lenders with respect to collateral
security under the Security Documents, be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan
Document; and

 

(e)           shall not be required to take
any action which is contrary to this Agreement or any other Loan Document or
Applicable Law.

 

The
relationship between the Administrative Agent and each Lender is a contractual
relationship only, and nothing herein shall be deemed to impose on the
Administrative Agent any obligations other than those for which express
provision is made herein or in the other Loan Documents. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it in good faith. The Administrative Agent may deem and treat the payee of a
Note as the holder thereof for all purposes hereof unless and until a notice of
the assignment or transfer thereof shall have been filed with the
Administrative Agent, any such assignment or transfer to be subject to the
provisions of Section 14.07. Except to the extent expressly provided in Sections
13.08 and 13.10, the provisions of this Article XIII are
solely for the benefit of the Administrative Agent and the Lenders, and the
Borrower shall not have any rights as a third-party beneficiary of any of the
provisions hereof and the Lenders may Modify or waive such provisions of this Article
XIII in their sole and absolute discretion.

 

139

 

13.02       Reliance
by Administrative Agent. The Administrative Agent shall be entitled to rely
upon any certification, notice, document or other communication (including any
thereof by telephone, telecopy, telegram or cable) reasonably believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Administrative Agent
in good faith. As to any matters not expressly provided for by this Agreement
or any other Loan Document, the Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions given by the Required Lenders, and
such instructions of the Required Lenders and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders.

 

13.03       Defaults.

 

(a)           The Administrative Agent shall
give the Lenders notice of any material Default of which the Administrative
Agent has knowledge or notice. Except with respect to (i) the nonpayment of
principal, interest or any fees that are due and payable under any of the Loan
Documents, (ii) Defaults with respect to which the Administrative Agent has
actually sent written notice of to the Borrower and (iii) material Defaults
with respect to which the Administrative Agent is given written notice (or
copied on such written notice) from a third party specifying such Default, the
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default unless the Administrative Agent has received notice
from a Lender or the Borrower specifying such Default and stating that such
notice is a “Notice of Default”. If the Administrative Agent has such knowledge
or receives such a notice from the Borrower or a Lender in accordance with the
immediately preceding sentence with respect to the occurrence of a material
Default, the Administrative Agent shall give prompt notice thereof to the
Lenders. Within ten (10) days of delivery of such notice of Default from the
Administrative Agent to the Lenders (or such shorter period of time as the
Administrative Agent determines is necessary), the Administrative Agent and the
Lenders shall consult with each other to determine a proposed course of action.
The Lenders agree that the Administrative Agent shall (subject to Section 13.07)
take such action with respect to such Default as shall be directed by the
Required Lenders, provided that, (A) unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may while a
Default exists (but shall not be obligated to) take such action, or refrain
from taking such action, including decisions (1) to make protective advances
that the Administrative Agent determines are necessary to protect or maintain
the Projects and (2) to foreclose on any of the Projects or exercise any other
remedy, with respect to such Default as it shall deem advisable in the interest
of the Lenders and (B) no actions approved by the Required Lenders shall
violate the Loan Documents or Applicable Law. Each of the Lenders acknowledges
and agrees that no individual Lender may separately enforce or exercise any of
the provisions of any of the Loan Documents (including the Notes) other than
through the Administrative Agent. The Administrative Agent shall advise the
Lenders of all material actions which the Administrative Agent takes in
accordance with the provisions of this Section 13.03(a) and shall
continue to consult with the Lenders with respect to all of such actions.
Notwithstanding the foregoing, if the Required Lenders shall at any time direct
that a different or additional remedial action be taken from that already
undertaken by the Administrative Agent, including the commencement of
foreclosure proceedings, such different or additional remedial action shall be
taken in lieu of or in addition to, the prosecution of such action taken by the
Administrative Agent; provided that all actions already taken by the
Administrative Agent

 

140

 

pursuant to this Section
13.03(a) shall be valid and binding on each Lender. All money (other than
money subject to the provisions of Section 13.03(f)) received from any
enforcement actions, including the proceeds of a foreclosure sale of the
Projects, shall be applied, first, to the payment or reimbursement of
the Administrative Agent for expenses and advances incurred in accordance with
the provisions of Sections 13.03(a) and (d) and 13.05 and
to the payment of any fees owing to the Administrative Agent pursuant to the
Loan Documents, second, to the payment or reimbursement of the Lenders
for expenses incurred in accordance with the provisions of Sections 13.03(b),
(c) and (d) and 13.05; third, to the payment or
reimbursement of the Lenders for any advances made pursuant to Section
13.03(b); fourth, pari passu
to the Lenders in accordance with their respective Proportionate Shares until
the Obligations have been fully paid and discharged in full; and fifth
to the person(s) legally entitled thereto.

 

(b)           All losses with respect to
interest (including interest at the Post-Default Rate) and other sums payable
pursuant to the Notes or incurred in connection with the Loans, the enforcement
thereof or the realization of the security therefor, shall be borne by the
Lenders in accordance with their respective Proportionate Shares of the Loan,
and the Lenders shall promptly, upon request, remit to the Administrative Agent
their respective Proportionate Shares of (i) any expenses incurred by the
Administrative Agent in connection with any Default to the extent any expenses
have not been paid by the Borrower, (ii) any advances made to pay taxes or
insurance or otherwise to preserve the Lien of the Security Documents or to
preserve and protect the Projects, whether or not the amount necessary to be
advanced for such purposes exceeds the amount of the Obligations, (iii) any
other expenses incurred in connection with the enforcement of the Deeds of
Trust or other Loan Documents, and (iv) any expenses incurred in connection
with the consummation of the Loans not paid or provided for by the Borrower. To
the extent any such advances are recovered in connection with the enforcement
of the Deeds of Trust or the other Loan Documents, each Lender shall be paid
its Proportionate Share of such recovery after deduction of the expenses of the
Administrative Agent and the Lenders.

 

(c)           If, at the direction of the
Required Lenders or otherwise as provided in Section 13.03(a), any
action(s) is brought to collect on the Notes or enforce the Security Documents
or any other Loan Document, such action shall (to the extent permitted under
applicable law and the decisions of the court in which such action is brought)
be an action brought by the Administrative Agent and the Lenders, collectively,
to collect on all or a portion of the Notes or enforce the Security Documents
or any other Loan Document and counsel selected by the Administrative Agent
shall prosecute any such action at the direction of the Administrative Agent on
behalf of the Administrative Agent and the Lenders, and the Administrative
Agent and the Lenders shall consult and cooperate with each other in the
prosecution thereof. All decisions concerning the appointment of a receiver
while such action is pending, the conduct of such receivership, the conduct of
such action, the collection of any judgment entered in such action and the
settlement of such action shall be made by the Administrative Agent. The costs
and expenses of any such action shall be borne by the Lenders in accordance
with each of their respective Proportionate Shares (without diminishing or
releasing any obligation of the Borrower to pay for such costs).

 

(d)           If, at the direction of the
Required Lenders or otherwise as provided in Section 13.03(a), any
action(s) is brought to foreclose any Deed of Trust, such action shall (to the
extent permitted under applicable law and the decisions of the court in which
such action is

 

141

 

brought) be an action
brought by the Administrative Agent and the Lenders, collectively, to foreclose
all or a portion of the Deed of Trust and collect on the Notes. Counsel
selected by the Administrative Agent shall prosecute any such foreclosure at
the direction of the Administrative Agent on behalf of the Administrative Agent
and the Lenders and the Administrative Agent and the Lenders shall consult and
cooperate with each other in the prosecution thereof. All decisions concerning
the appointment of a receiver, the conduct of such foreclosure, the manner of
taking and holding title to any such Project (other than as set forth in subsection
(e) below), and the commencement and conduct of any deficiency judgment
proceeding shall be made by the Administrative Agent (subject to the rights of
the Required Lenders under Section 13.03(a)), and all decisions
concerning the acceptance of a deed in lieu of foreclosure and the bid on
behalf of the Administrative Agent and the Lenders at the foreclosure sale of
any Project shall be made by the Administrative Agent with the approval of the
Required Lenders. The costs and expenses of foreclosure will be borne by the
Lenders in accordance with their respective Proportionate Shares.

 

(e)           If title is acquired to any
Project after a foreclosure sale, nonjudicial foreclosure or by a deed in lieu
of foreclosure, title shall be held by the Administrative Agent in its own name
in trust for the Lenders or, at the Administrative Agent’s election, in the
name of a wholly owned subsidiary of the Administrative Agent on behalf of the
Lenders.

 

(f)            If the Administrative Agent (or
its subsidiary) acquires title to any Project or is entitled to possession of
any Project during or after the foreclosure, all material decisions with
respect to the possession, ownership, development, construction, control,
operation, leasing, management and sale of such Project shall be made by the
Administrative Agent. All income or other money received after so acquiring
title to or taking possession of such Project with respect to the Project,
including income from the operation and management of such Project and the
proceeds of a sale of such Project, shall be applied, first, to the
payment or reimbursement of the Administrative Agent and the expenses incurred
in accordance with the provisions of this Article XIII and to the
payment of any fees owed to the Administrative Agent, second, to the
payment of operating expenses with respect to such Project; third, to
the establishment of reasonable reserves for the operation of such Project; fourth,
to the payment or reimbursement of the Lenders for any advances made pursuant
to Section 13.03(b); fifth to fund any capital improvement,
leasing and other reserves; and sixth, to the Lenders in accordance with
their respective Proportionate Shares.

 

13.04       Rights
as a Lender. With respect to its Commitment and the Loans made by it,
Eurohypo (and any successor acting as Administrative Agent) in its capacity as
a Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. Subject to the provisions of Sections 4.07 and 14.10,
Eurohypo (and any successor acting as Administrative Agent) and any of its
Affiliates may (without having to account therefor to any other Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, investment banking, trust or other business with the Borrower
(and any of its Affiliates) as if it were not acting as the Administrative
Agent and Eurohypo (and any such successor) and any of its Affiliates may
accept fees and other

 

142

 

consideration from
the Borrower for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.

 

13.05       Indemnification.
Each Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower, but without limiting the obligations of the
Borrower under Section 14.03) in accordance with their
Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Administrative Agent in its capacity as Administrative
Agent (including by any Lender) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the Transactions (including the costs and expenses that
the Borrower is obligated to pay under Section 14.03, but excluding,
unless a Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof, provided that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence, bad faith or willful misconduct of the Administrative
Agent.

 

13.06       Non-Reliance
on Administrative Agent and Other Lenders. Each Lender agrees that it has,
independently and without reliance on the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its decision to
enter into this Agreement and that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or under any other Loan Document. The Administrative Agent shall not be
required to keep itself informed as to the performance or observance by the
Borrower of this Agreement or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Borrower. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial condition
or business of the Borrower (or any of its Affiliates) that may come into the
possession of the Administrative Agent or any of its Affiliates.

 

13.07       Failure
to Act. Except for action expressly required of the Administrative Agent
hereunder and under the other Loan Documents, the Administrative Agent shall in
all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction from
the Lenders of their indemnification obligations under Section 13.05
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action, subject to the limitations on
such obligations contained in such Section 13.05.

 

13.08       Resignation
of Administrative Agent. It is agreed by the Lenders that subject to the
terms of this Loan Agreement, the Administrative Agent will remain the
Administrative Agent under this Agreement and the other Loan Documents
throughout the term of the Loans; provided, however, that
(a) the Administrative Agent may assign all its rights as

 

143

 

the Administrative
Agent to any Related Entity of Eurohypo, and such Related Entity shall assume
the obligations of Administrative Agent hereunder arising after the date of
such assignment, (b) subject to the appointment and acceptance of a
successor Administrative Agent as provided below, the Administrative Agent may
resign at any time by giving at least thirty (30) days’ prior written notice
thereof to the Lenders and the Borrower and (c) the Administrative Agent may be
removed upon the unanimous consent of the Lenders (excepting therefrom the
Administrative Agent in its capacity as a Lender) on account of the gross
negligence, bad faith or willful misconduct of the Administrative Agent. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent that shall be a Person that, provided
that no Event of Default then exists, meets the qualifications of an Eligible
Assignee with an office in the United States through which it will act as the
servicer of the Loans; who is knowledgeable and experienced in servicing real
estate secured syndicated commercial loans in the United States; who (together
with its Affiliates and Related Entities and any Approved Funds managed by it
or by any of its Affiliates or Related Entities) then holds (and agrees in
writing for the benefit of the Borrower and the Westwood Place Borrower to maintain,
for so long as it shall remain the Administrative Agent and provided that no
Event of Default has occurred), minimum Loans and Commitments either (i) in an
aggregate principal amount not less than ten percent (10%) of the aggregate
Outstanding Principal Amount of the Loans, (ii) comprising Loans and Commitments evidenced
by a Note C, which comprise at least two and one-half percent (21⁄2%) of the
aggregate Loans and Commitments of all Lenders and which, determined
collectively with the Loans and Commitments evidenced by a Note C of Eurohypo
and Barclays Capital Real Estate Inc. and their respective Affiliates, Related
Entities and Approved Funds managed by either of them or their respective
Affiliates or Related Entities, comprise at least five percent (5%) of the
aggregate Loans and Commitments of all Lenders, but only (in the case of this
clause (ii)) if such replacement Administrative Agent also qualifies and is
named as the replacement Administrative Agent pursuant to the loan agreements
entered into by Eurohypo as administrative agent with Douglas Emmett 1993, LLC,
Douglas Emmett 1995, LLC, Douglas Emmett 1996, LLC, Douglas Emmett 1998, LLC,
Douglas Emmett 2000, LLC, and Douglas Emmett 2002, LLC and certain co-borrowers
named therein to the extent then outstanding or (iii) only if the
replacement Administrative Agent is Barclays Capital Real Estate Inc. or one of
its Affiliates, Related Entities or Approved Funds managed by Barclays Capital
Real Estate Inc or one of its Affiliates or Related Entities, comprising Loans
and Commitments evidenced by a Note C, which comprise at least two and one-half
percent (21⁄2%) of the aggregate Loans and Commitments of all Lenders, and who
agrees in writing for the benefit of the Borrower and the Westwood Place Borrower
not to resign except in accordance with the provisions of this Loan Agreement. If
such successor Administrative Agent is not a Lender (or is a Lender, but such
Lender does not comply with the requirements of the second sentence of this Section
13.08), as long as no Major Default exists, the Borrower shall have the
right to approve such successor Administrative Agent, such approval not to be
unreasonably withheld or delayed and which consent shall be deemed to have been
given unless written notice of disapproval is delivered by the Borrower to the
resigning Administrative Agent within five (5) Business Days after notice of
such proposed successor Administrative Agent has been delivered to the Borrower.
If, in the case of a resignation by the Administrative Agent, no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent’s giving of notice of resignation, then the retiring Administrative
Agent may, on behalf of the

 

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Lenders, appoint a
successor Administrative Agent, that shall be a Person that meets the
requirements of the second sentence of this Section 13.08. If any
successor Administrative Agent is not a Lender (or is a Lender, but such Lender
does not comply with the requirements of the second sentence of this Section
13.08), the Borrower, as long as no Major Default exists, shall have the
right to approve such successor Administrative Agent, such approval not to be
unreasonably withheld or delayed and which consent shall be deemed to have been
given unless, in the case of a resignation, written notice of disapproval is
delivered by the Borrower to the resigning Administrative Agent within five (5)
Business Days after notice of such proposed successor Administrative Agent has
been delivered to the Borrower. Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
such successor Administrative Agent shall assume all obligations of the
Administrative Agent hereunder arising after the date of such acceptance, and
the retiring or removed Administrative Agent shall be discharged from its
duties and obligations hereunder; provided, however, that the
retiring or removed Administrative Agent shall not be discharged from any
liabilities which existed prior to the effective date of such resignation. The
fees payable by the Borrower to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After any retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this Article
XIII shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent.

 

13.09       Consents
under Loan Documents. Subject to the provisions of Section 14.05,
the Administrative Agent may (a) grant any consent or approval required of it
or (b) consent to any Modification or waiver under any of the Loan Documents. If
the Administrative Agent solicits any consents or approvals from the Lenders
under any of the Loan Documents, each Lender shall within ten (10) Business
Days of receiving such request, give the Administrative Agent written notice of
its consent or approval or denial thereof; provided that, if any Lender
does not respond within such ten (10) Business Days or within any such shorter
period as required in this Agreement or any other Loan Document, such Lender
shall be deemed to have authorized the Administrative Agent to vote such Lender’s
interest with respect to the matter which was the subject of the Administrative
Agent’s solicitation as the Administrative Agent elects. Any such solicitation
by the Administrative Agent for a consent or approval shall be in writing and
shall include a description of the matter or thing as to which such consent or
approval is requested and shall include the Administrative Agent’s recommended
course of action or determination in respect thereof.

 

13.10       Authorization.
The Administrative Agent is hereby authorized by the Lenders to execute,
deliver and perform in accordance with the terms of each of the Loan Documents
to which the Administrative Agent is or is intended to be a party and each Lender
agrees to be bound by all of the agreements of the Administrative Agent
contained in such Loan Documents. The Borrower shall be entitled to rely on all
written agreements, approvals and consents received from the Administrative
Agent as being that also of the Lenders, without obtaining separate
acknowledgment or proof of authorization of same.

 

145

 

13.11       Amendments
Concerning Agency Function. Notwithstanding anything to the contrary
contained in this Agreement, the Administrative Agent shall not be bound by any
waiver, amendment, supplement or Modification of this Agreement or any other
Loan Document which affects its duties, rights and/or functions hereunder or
thereunder unless it shall have given its prior written consent thereto.

 

13.12       Liability
of the Administrative Agent. The Administrative Agent shall not have any
liabilities or responsibilities to the Borrower on account of the failure of
any Lender (other than the Administrative Agent in its capacity as a Lender) to
perform its obligations hereunder or to any Lender on account of the failure of
the Borrower to perform its obligations hereunder or under any other Loan
Document.

 

13.13       Transfer
of Agency Function. Without the consent of the Borrower or any Lender, the
Administrative Agent may at any time or from time to time transfer its
functions as the Administrative Agent hereunder to any of its offices wherever
located in the United States; provided that the Administrative Agent
shall promptly notify the Borrower and the Lenders thereof.

 

13.14       Co-Lead
Arranger and Joint Bookrunner. No Lender identified on the cover page of or
elsewhere in this Agreement as a “Co-Lead Arranger” or “Joint Bookrunner” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders under this Agreement and
the other Loan Documents as a Lender.

 

ARTICLE XIIIA

PROVISIONS REGARDING THE ADMINISTRATIVE AGENT AS RELATING TO WESTWOOD PLACE AND
DELEGATION OF AUTHORITY BY THE WESTWOOD PLACE BORROWER TO THE BORROWER

 

13.01A  Administrative
Agent Provisions. The provisions set forth in Article XIII shall be
applicable to the Westwood Place Borrower, the Loans made to it, and the
Westwood Place Project, as if, in each case as the context requires, each
reference in Article XIII to the “Borrower” or any “Borrower Party” or “Borrower
Parties” shall mean the Westwood Place Borrower, each reference therein to the “Loans”
shall mean the Loans to be made to the Westwood Place Borrower, each reference
therein to the “Commitment” shall mean the Westwood Place Commitment, each
reference therein to any “Project” shall mean the Westwood Place Project, each
reference therein to any Loan Document shall mean the applicable Loan Document
to which the Westwood Place Borrower is a party, if any, and each reference
therein to a “Default” or “Event of Default” shall mean a Westwood Place
Default or Westwood Place Event of Default, respectively.

 

13.02A  Delegation
of Authority by the Westwood Place Borrower to the Borrower. The Westwood
Place Borrower hereby grants and delegates to the Borrower’s Manager the non-exclusive
authority and power of attorney (which is coupled with an interest, and is
irrevocable, for so long as the Loans shall remain outstanding) to receive,
accept, deliver

 

146

 

and provide all notices, communications, certifications, instructions,
reports, consents and approvals provided to be made by or to the Westwood Place
Borrower in this Agreement and the other Loan Documents to which the Westwood
Place Borrower is a party, including, without limitation, all notices pursuant
to Section 4.05 (as incorporated into Article IVA), and
irrevocably authorizes the Administrative Agent and the Lenders to rely upon
all such notices, communications, certifications, instructions, reports,
consents and approvals provided by the Borrower’s Manager on behalf of the
Westwood Place Borrower. If the Westwood Place Borrower is obligated pursuant
to the terms of this Agreement or any Loan Document to deliver to the
Administrative Agent or any Lender any notice, certification, instruction,
report (including any financial report provided for in Section 8.01 (as
incorporated into Article VIIIA)) or other communication, or to deliver
any Lease, budget, insurance policy, Hedge Agreement, Excess Hedge Agreement or
other document or instrument, such obligation shall be deemed performed if such
notice, certification, instruction, report, other communication, Lease, budget,
insurance policy, Hedge Agreement, Excess Hedge Agreement or other document or
instrument is provided in compliance with the provisions of this Agreement by
the Borrower’s Manager (or, in the case of any Hedge Agreement or Excess Hedge
Agreement, an Other Swap Pledgor).

 

ARTICLE
XIV

 

MISCELLANEOUS

 

14.01       Non-Waiver;
Remedies Cumulative. No failure on the part of the Administrative Agent or
any Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under this Agreement or any
other Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement or any
other Loan Documents preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The remedies provided herein
and in the other Loan Documents are cumulative and not exclusive of any
remedies provided by law.

 

14.02       Notices.

 

(a)           All notices, requests, demands,
statements, authorizations, approvals, directions, consents and other
communications provided for herein and under the Loan Documents (to which the
Borrower or the Westwood Place Borrower is a party) shall be given or made in
writing and shall be deemed sufficiently given or served for all purposes as of
the date (a) when hand delivered, (b) three (3) days after being sent by
postage pre-paid registered or certified mail, return receipt requested, (c)
one (1) Business Day after being sent by reputable overnight courier service,
or (d) with a simultaneous delivery by one of the means in clause (a), (b)
or (c) above, by facsimile, when sent, with confirmation and a copy sent
by first class mail, in each case addressed to the intended recipient at the “Address
for Notices” specified below its name on the signature pages hereof; or, as to
any party, at such other address as shall be designated by such party in a
notice to each other party hereto. Unless otherwise expressly provided in the
Loan Documents, the Borrower and the Westwood Place Borrower shall only be

 

147

 

required to send notices,
requests, demands, statements, authorizations, approvals, directions, consents
and other communications to the Administrative Agent on behalf of all of the
Lenders.

 

(b)           Notices and other communications
to the Lenders hereunder may be delivered or furnished by electronic
communications pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Article II (as
incorporated into Article IIA) or notices pursuant to Section 13.03
unless otherwise agreed by the Administrative Agent and the applicable Lender. The
Administrative Agent, the Borrower or the Westwood Place Borrower may, in its
discretion, agree (in writing) to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided
that approval of such procedures by such party may be limited to particular
notices or communications.

 

(c)           Any person shall have the right
to specify, from time to time, as its address or addresses for purposes of this
Agreement, any other address or addresses upon giving notice thereof to each
other person then entitled to receive notices or other instruments hereunder at
least five (5) days before such change of address shall become effective for
purposes of this Agreement.

 

14.03       Expenses,
Etc. Subject to the limitation set forth in Section 14.26:

 

(a)           The Borrower agrees to pay on
demand or reimburse on demand to the applicable party all reasonable out-of-pocket
costs and expenses of the Administrative Agent and the Arranger incurred prior
to the Closing Date or otherwise in connection with the closing of the Loans
(including customary post-closing follow-through) and in connection with the
satisfaction of the requirements of Section 8.19 following the Closing
Date, including, but not limited to, (i) the reasonable fees and expenses
for Morrison & Foerster LLP, counsel to the Administrative Agent and
Eurohypo; such legal fees to be paid on the Closing Date; provided, however, that payment of ten percent (10%) of such legal
fees shall be deferred and payable promptly upon the Borrower’s receipt of a
closing binder and legal invoices prepared by Morrison & Foerster LLP
and payment of any such legal fees relating to the satisfaction of the
requirements of Section 8.19 following the Closing Date shall be payable
promptly following the Borrower’s receipt of any legal invoice therefor (if
delivered subsequent to the invoices covering the 10% retention referred to
above), (ii) due diligence expenses, including title insurance reports and
policies, surveys, title and lien searches and appraisals (including the
Appraisal and the Environmental Reports) and (iii) fees and expenses for
the services of an insurance consultant, in connection with:  the negotiation, preparation, execution and
delivery of this Agreement and the other Loan Documents and initial funding of
the Loans hereunder and the creation and perfection of the Liens to be created
by the Security Documents.

 

(b)           The Borrower also agrees to pay
on demand or reimburse on demand to the applicable party all reasonable
out-of-pocket costs and expenses of the Administrative Agent incurred after the
Closing Date (including, but not limited to, the reasonable fees and expenses
of legal counsel, but excluding any travel expenses incurred for travel by the
personnel of the Administrative Agent (but not any of its consultants when
engaged in services for which the Borrower is required to reimburse the
Administrative Agent hereunder, with the understanding that the Administrative
Agent shall use good faith efforts to attempt to engage qualified local

 

148

 

consultants to provide
such services) and also excluding the Administrative Agent’s internal overhead)
in connection with (i) any release of a Project under Section 2.09, (ii)
the negotiation or preparation of any Modification or waiver of any of the
terms of this Agreement or any of the other Loan Documents (whether or not
consummated), (iii) the protection and maintenance of the perfection and
priority of the Liens created pursuant to the Security Documents, (iv) the
negotiation with any tenant, execution, delivery or recordation of any SNDA
Agreement, (v) any review or inspection of the work undertaken pursuant to
Section 8.21 (including, without limitation, any seismic review
undertaken to measure the probable maximum loss with respect to the affected
Projects following the completion of such work); any monitoring or evaluation
of environmental conditions occurring at any Project following the occurrence
of (A) any event for which notice is required under Section 8.11(b),
(B) any violation by the Borrower of any of its covenants contained in Section
8.11(a) or (C) any act or occurrence for which the Borrower is
obligated to indemnify the Administrative Agent or any Lender pursuant to the
terms set forth in the Environmental Indemnity Agreement; any review,
inspection or evaluation undertaken by the Restoration Consultant; and the
preparation of any reports or studies in connection with any of the foregoing, (vi) any
review of documents or requests, consideration for approval or disapproval or
exercise of rights outside of the ordinary day-to-day administration of the
Loans and the Loan Documents, and (vii) any other act, condition, request,
delivery or other item, if any other applicable provision of this Agreement or
the other Loan Documents provides for the costs and expenses of the
Administrative Agent in connection therewith to be paid by the Borrower and are
not in violation of the limitations contained herein.

 

(c)           The Borrower also agrees to pay
on demand or reimburse on demand to the applicable party all reasonable out-of-pocket
costs and expenses of the Lenders and the Administrative Agent (including, but
not limited to, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection
proceedings resulting therefrom, including all manner of participation in or
other involvement with (A) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, (B) judicial or regulatory proceedings
and (C) workout, restructuring or other negotiations or proceedings (whether or
not the workout, restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section 14.03.

 

(d)           The Borrower also agrees to pay
on demand or reimburse on demand to the applicable party all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any Governmental
Authority in respect of this Agreement or any of the other Loan Documents or any
other document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Security Document or any other document referred to therein.

 

14.04       Indemnification.
(a) The Borrower hereby agrees to (i) protect and indemnify the
Indemnified Parties from, and hold each of them harmless, from and against all
damages, losses, claims, actions, liabilities (or actions, investigations or
other proceedings commenced or threatened in respect thereof) penalties, fines,
costs and expenses including reasonable attorneys’ fees and expenses
(collectively and severally, “Losses”) which may be imposed upon,
asserted against or incurred or paid by any of them resulting from the claims
of any third party relating to or arising out of (A) the Projects, (B) any of
the Loan Documents or

 

149

 

the Transactions,
(C) any ERISA Events, (D) any Environmental Losses and (E) any act performed or
permitted to be performed by any Indemnified Party under any of the Loan
Documents, except for Losses to the extent determined by a court of competent
jurisdiction to be caused by the gross negligence, bad faith or willful
misconduct of an Indemnified Party (but the effect of this exception only
eliminates the liability of the Borrower with respect to the Indemnified Party
(and if such Indemnified Party is not a Lender, the Lender on whose behalf such
Indemnified Party was acting) to the extent such Indemnified Party has been
adjudged to have so acted and not with respect to any other Indemnified Party),
and (ii) reimburse each Indemnified Party on demand for any expenses (including
the reasonable attorneys’ fees and disbursements) reasonably incurred in
connection with the investigation of, preparation for or defense of any actual
or threatened claim, action or proceeding arising therefrom (excluding any
action or proceeding where the Indemnified Party is not a party to such action
or proceeding out of which any such expenses arise unless such Indemnified
Party is required to participate or respond in connection with such action or
proceeding (e.g., by way of deposition, discovery requests, testimony, subpoena
or similar reason)). The Obligations shall not be considered to have been paid
in full unless all obligations of the Borrower under this Section 14.04(a)
shall have been fully performed (except for contingent indemnification
obligations for which no claim has actually been made pursuant to this
Agreement). This Section 14.04(a) shall survive repayment in full of the
Obligations and, as to any Project, the release of that Project as collateral
for the Loans in accordance with Section 2.09 of this Agreement, and in
addition, shall survive the assignment, sale or other transfer of the
Administrative Agent’s or any Lender’s interest hereunder.

 

(b)           The Westwood Place Borrower hereby
agrees to (i) protect and indemnify the Indemnified Parties from, and hold each
of them harmless, from and against all Losses which may be imposed upon,
asserted against or incurred or paid by any of them resulting from the claims
of any third party relating to or arising out of (A) the Westwood Place
Project, (B) any of the Loan Documents to which the Westwood Place Borrower is
a party or the Transactions relating to the Loans made or to be made to the
Westwood Place Borrower, (C) any ERISA Events affecting the Westwood Place
Borrower, (D) any Environmental Losses affecting the Westwood Place Project and
(E) any act performed or permitted to be performed by any Indemnified Party
under any of the Loan Documents relating to the Loans to the Westwood Place
Borrower, except for Losses to the extent determined by a court of competent
jurisdiction to be caused by the gross negligence, bad faith or willful
misconduct of an Indemnified Party (but the effect of this exception only
eliminates the liability of the Westwood Place Borrower with respect to the
Indemnified Party (and if such Indemnified Party is not a Lender, the Lender on
whose behalf such Indemnified Party was acting) to the extent such Indemnified
Party has been adjudged to have so acted and not with respect to any other
Indemnified Party), and (b) reimburse each Indemnified Party on demand for any
expenses (including the reasonable attorneys’ fees and disbursements)
reasonably incurred in connection with the investigation of, preparation for or
defense of any actual or threatened claim, action or proceeding arising therefrom
(excluding any action or proceeding where the Indemnified Party is not a party
to such action or proceeding out of which any such expenses arise unless such
Indemnified Party is required to participate or respond in connection with such
action or proceeding (e.g., by way of deposition, discovery requests,
testimony, subpoena or similar reason)). The Obligations of the Westwood Place
Borrower shall not be considered to have been paid in full unless all
indemnification obligations of the Westwood Place Borrower under this Section
14.04(b) shall

 

150

 

have been fully performed (except for contingent indemnification
obligations for which no claim has actually been made pursuant to this
Agreement). The indemnification obligations of the Westwood Place Borrower
under this Section 14.04(b) shall survive repayment in full of the other
Obligations of the Westwood Place Borrower and the release of the Westwood
Place Project as collateral for the Loans to the Westwood Place Borrower in
accordance with Section 2.09 of this Agreement, and in addition, shall
survive the assignment, sale or other transfer of the Administrative Agent’s or
any Lender’s interest hereunder.

 

14.05       Amendments,
Etc. Except as otherwise expressly provided in this Agreement or the other
Loan Documents, this Agreement and the other Loan Documents may be Modified
only by an instrument in writing signed by the Borrower and the Administrative
Agent acting with the consent of the Required Lenders; provided
that:  (a) no Modification or waiver
shall, unless by an instrument signed by all of the Lenders or by the
Administrative Agent acting with the written consent of all of the
Lenders:  (i) extend the date fixed
for the payment of principal of or interest on any Loan or any fee hereunder or
under the Loan Documents, including, without limitation, any extension of the
Maturity Date, (ii) reduce the amount of any such payment of principal,
(iii) reduce the rate at which interest is payable thereon or any fee is
payable hereunder, (iv) alter the rights or obligations of the Borrower to
prepay Loans, (v) alter the manner in which payments or prepayments of
principal, interest or other amounts hereunder shall be applied as between the
Lenders or Types of Loans, (vi) alter the terms of this Section 14.05,
(vii) Modify the definition of the term “Required Lenders” or Modify in
any other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to Modify any provision hereof,
(viii) alter the several nature of the Lenders’ obligations hereunder,
(ix) release the Borrower, any collateral or the Guarantor or otherwise
terminate any Lien under any Security Document providing for collateral
security (except that no such consent shall be required, and the Administrative
Agent is hereby authorized, to release any Lien covering the collateral under
the Security Documents, and to release (or terminate the liability of) the
Borrower or the Westwood Place Borrower under the Loan Documents, and to
release the Guarantor under the Guarantor Documents:  (A) as expressly provided in the Loan
Documents and (B) upon payment of the Obligations in full in accordance with
the terms of the Loan Documents), (x) agree to additional obligations being
secured by such collateral security, or (xi) alter the relative priorities
of the obligations entitled to the benefits of the Liens created under the
Security Documents; (b) any Modification of Article XIII, or of any of
the rights or duties of the Administrative Agent hereunder, shall require the
consent of the Administrative Agent and the Required Lenders; and (c) no
Modification shall increase the Commitment of any Lender without the consent of
such Lender. Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, the Administrative Agent is hereby
authorized by the Lenders to enter into Modifications to the Loan Documents
which are ministerial in nature, including the preparation and execution of
Uniform Commercial Code forms, Assignments and Assumptions and SNDA Agreements
and any amendment to the definition of “Change of Control” that would eliminate
the exclusions set forth in clause (i) or (ii) of such definition.

 

14.06       Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.

 

151

 

14.07       Assignments
and Participations.

 

(a)           Consent Required for
Assignments by the Borrower. Except as otherwise expressly permitted by
this Agreement, neither the Borrower nor the Westwood Place Borrower may assign
any of its rights or obligations hereunder or under the Loan Documents without
the prior consent of all of the Lenders and the Administrative Agent.

 

(b)           Assignments by Lenders.

 

(i)            Subject to the conditions set forth
in subsection (b)(ii) below, any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing
to it) with the prior written consent of:

 

(A)          the Borrower, whose consent shall not
be unreasonably withheld, conditioned or delayed; provided that (1) such
consent shall be deemed granted should the Borrower fail to respond within five
(5) Business Days upon receipt of a notice of such assignment and (2) should
the Borrower not give such consent, the Borrower shall provide to the
Administrative Agent and the Lender requesting such assignment its specific
reasons for such disapproval; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a Lender that
is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business (and which
is not engaged in the business of acquiring direct or indirect ownership
interests in commercial real estate projects), an Eligible Assignee or, if a
Major Default exists, any other assignee; and

 

(B)           the Administrative Agent, whose
consent shall not be unreasonably withheld, conditioned or delayed; provided
that no consent of the Administrative Agent shall be required for an assignment
of all or a portion of any Commitment or Loans to an assignee that is a Lender
with a Commitment immediately prior to giving effect to such assignment or an
Affiliate of the assigning Lender if also an Eligible Assignee.

 

(ii)           Assignments shall be subject to the
following additional conditions:

 

(A)          except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment or Loan, the amount of the
Commitment or Loan of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent; provided that no such consent of the Borrower shall be required
if an Event of Default exists;

 

(B)           each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement;

 

152

 

(C)           the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $4,500;

 

(D)          the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire;

 

(E)           such assignment shall include the
assignment of the same proportional interest in the Loans made to the Borrower
and the portion of the Commitment allocated to make the Loans to the Borrower and
the Loans made to the Westwood Place Borrower and the Westwood Place
Commitment.

 

(iii)          Subject to acceptance and recording
thereof pursuant to subsection (b)(iv) of this Section 14.07,
from and after the effective date specified in each Assignment and Assumption
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 5.01,
5.05, 5.06 and 14.04); provided, however,
that in no event shall such assigning Lender be released with respect to any
defaults by or liabilities of such Lender under the Loan Documents which
accrued prior to such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section
14.07 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with subsection
(c) of this Section 14.07.

 

(iv)          The Administrative Agent shall
maintain at its Principal Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitment of, and principal amount of the Loan owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive absent manifest error, and the
Borrower, the Administrative Agent, and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Administrative Agent shall record all entries in the Register promptly
upon their being effected. The Register shall be available for inspection by
the Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)           Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire, the processing and
recordation fee referred to in subsection (b) of this Section 14.07
and any written consent to such assignment required by subsection (b) of
this Section 14.07, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.

 

153

 

No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
subsection.

 

(c)           Participations.

 

(i)            Any Lender may, without the consent
of the Borrower or the Administrative Agent, sell participations to one or more
banks or other financial institutions (including, without limitation, life
insurance companies), or an Affiliate of the Lender that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business (and which is not engaged in the
business of acquiring direct or indirect ownership interests in commercial real
estate projects) (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement and the other Loan Documents
(including all or a portion of its Commitment and the Loans owing to it); provided
that (A) such Lender’s obligations under this Agreement and the other Loan
Documents shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(C) such participation is made pro rata among the Loans made to the Borrower
and the Loans made to the Westwood Place Borrower and (D) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any Modification or waiver of any provision
of this Agreement or any other Loan Document; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of such Participant, agree to (1) increase or extend the term of such
Lender’s Commitment to the extent that it affects such Participant, (2) extend
the date fixed for the payment of principal of or interest on the related Loan
or Loans, (3) reduce the amount of any such payment of principal or (4) reduce
the rate at which interest is payable thereon to a level below the rate at
which the Participant is entitled to receive such interest. Subject to subsection (c)(ii)
of this Section 14.07, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 5.01, 5.05 and 5.06
to the same extent, but subject to the same limitations, conditions and duties
set forth in such sections, as if it were a Lender and had acquired its
interest by assignment pursuant to subsection (b) of this Section
14.07. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 14.10 as though it were a Lender; provided
that such Participant agrees to be subject to Section 14.10 as though it
were a Lender.

 

(ii)           A Participant shall not be entitled
to receive any greater payment under Section 5.01 or 5.06
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 5.06 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees in writing, for the benefit of the Borrower, to comply with Section 5.06
as though it were a Lender.

 

154

 

(d)           Pledges. In addition to
the assignments and participations permitted under the foregoing provisions of
this Section 14.07:  (a) any
Lender may (without notice to the Borrower, the Administrative Agent or any
other Lender and without payment of any fee) assign and pledge all or any
portion of its Loans and its Note to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank, and such Loans and Note shall be transferable as provided
therein; and (b) any Lender may (upon notice to the Administrative Agent and without
payment of any fee) assign and pledge all or any portion of its Loans and its
Note as collateral for financing, and such Loans and Note shall be fully
transferable as provided therein. No such assignment shall release the
assigning Lender from its obligations hereunder.

 

(e)           Provision of Information to
Assignees and Participants. A Lender may furnish any information concerning
the Borrower, the Projects, the Loans, the Borrower’s Member or any Borrower
Party in the possession of such Lender from time to time to assignees, pledgees
and participants (including prospective assignees, pledgees and participants),
subject, however, to the party receiving such information confirming in writing
that such party and such information is subject to the provisions of Section
14.24.

 

(f)            No Assignments to the
Borrower or Affiliates. Anything in this Section 14.07 or Section
14.27 to the contrary notwithstanding, each Lender agrees for itself that
it shall not assign or participate any interest in any Loan held by it
hereunder to the Borrower or any of its Affiliates without the prior consent of
each Lender.

 

14.08       Survival.
The obligations of the Borrower under Sections 3.02(e), 5.01, 5.05,
5.06, 14.03, 14.04 and 14.12, and the obligations
of the Lenders under Sections 13.05, shall survive the repayment of
the Obligations, the termination of the Commitments and, as to any Project, the
release of that Project as collateral for the Loans in accordance with Section
2.09 of this Agreement, and in addition, in the case of any Lender that may
assign any interest under the Loan Documents in accordance with the terms
thereof including any Lender’s interest in its Commitment or Loan hereunder,
shall survive the making of such assignment, notwithstanding that such assigning
Lender may cease to be a “Lender” hereunder. In addition, each representation
and warranty made herein or pursuant hereto by the Borrower shall survive the
making of such representation and warranty, and no Lender shall be deemed to
have waived, by reason of making any Loan, any Default that may arise by reason
of such representation or warranty proving to have been false or misleading,
notwithstanding that such Lender or the Administrative Agent may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time such Loan was made.

 

14.09       Reserved.

 

14.10       Right
of Set-off.

 

(a)           Upon the occurrence and during
the continuance of any Event of Default, each of the Lenders is, subject (as
between the Lenders) to the provisions of subsection (c) of this Section
14.10, hereby authorized at any time and from time to time, without notice
to the Borrower (any such notice being expressly waived by the Borrower) and to
the fullest extent permitted by law, to set-off and apply any and all deposits
(general or special, time or demand,

 

155

 

provisional or final) at
any time held, and other indebtedness at any time owing, by such Lender in any
of its offices, in Dollars or in any other currency, to or for the credit or
the account of the Borrower against any and all of the respective obligations
of the Borrower now or hereafter existing under the Loan Documents,
irrespective of whether or not such Lender or any other Lender shall have made
any demand hereunder and although such obligations may be contingent or
unmatured and such deposits or indebtedness may be unmatured. Each Lender and
the Administrative Agent acknowledges that it is aware of the implications of
the anti-deficiency laws and “one form of action” laws of various jurisdictions
in which the Collateral may be located. These laws, in general, restrict or
prohibit the exercise of remedies under loans secured by real property, and the
violation of those laws can result in severe consequences to a lender,
including a loss of the real property security. These laws include, for
example, Section 726 of the California Code of Civil Procedure. Therefore,
anything obtained in this Section 14.10 to the contrary notwithstanding,
no Lender shall exercise any right of set-off against any Borrower Party with
respect to the Obligations under the Loan Documents without the prior written
consent of all of the Lenders. In the event that any Lender exercises any right
of set-off without all of the Lenders’ prior consent, such Lender shall
protect, indemnify, defend and hold harmless the Administrative Agent and each
of the other Lenders from and against any liability, loss, cost, damage, or
injury that may result from such Person’s exercise of its right of set-off. This
Section 14.10 shall inure only for the benefit of the Lenders and the
Administrative Agent, and may not be relied upon by any third party, including
but not limited to the Borrower and its Subsidiaries.

 

(b)           Each Lender shall promptly
notify the Borrower and the Administrative Agent after any such set-off and
application, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Lenders
under this Section 14.10 are in addition to other rights and remedies
(including other rights of set-off) which the Lenders may have.

 

(c)           If an Event of Default has
resulted in the Loans becoming due and payable prior to the stated maturity
thereof, each Lender agrees that it shall turn over to the Administrative Agent
any payment (whether voluntary or involuntary, through the exercise of any
right of setoff or otherwise) on account of the Loans held by it in excess of
its ratable portion of payments on account of the Loans obtained by all the
Lenders.

 

14.11       Remedies
of Borrower. It is expressly understood and agreed that, notwithstanding
any Applicable Law or any provision of this Agreement or the other Loan
Documents to the contrary, the liability of the Administrative Agent and each
Lender (including their respective successors and assigns) and any recourse of
the Borrower or the Westwood Place Borrower against the Administrative Agent
and each Lender shall be limited solely and exclusively to their respective
interests in the Loans and/or Commitments or the Projects and the Westwood
Place Project. Without limiting the foregoing, in the event that a claim or
adjudication is made that the Administrative Agent, any of the Lenders, or
their agents, acted unreasonably or unreasonably delayed acting in any case
where by Applicable Law or under this Agreement or the other Loan Documents,
the Administrative Agent, any Lender or any such agent, as the case may be, has
an obligation to act reasonably or promptly, or otherwise violated this
Agreement or the Loan Documents, the Borrower agrees that none of the
Administrative Agent, the Lenders or their agents shall be liable for any
incidental, indirect, special, punitive,

 

156

 

consequential or
speculative damages or losses resulting from such failure to act reasonably or
promptly in accordance with this Agreement or the other Loan Documents.

 

14.12       Brokers.
The Borrower hereby represents to the Administrative Agent and each Lender that
it has not dealt with any broker, underwriter, placement agent, or finder in
connection with the Transactions, except for Secured Capital. The Borrower
hereby agrees that it shall pay any and all brokerage commissions or finders
fees owing to Secured Capital in connection with the Transactions and agrees
and acknowledges that payment of all such brokerage commissions or finders fees
shall be the Borrower’s sole responsibility. The Borrower hereby agrees to protect
and indemnify and hold the Administrative Agent and each 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 Secured Capital and any Person
that such Person acted on behalf of the Borrower in connection with the
Transactions.

 

14.13       Estoppel
Certificates.

 

(a)           The Borrower, within ten (10)
days after the Administrative Agent’s request, shall furnish to the
Administrative Agent a written statement, duly acknowledged, certifying to the
Administrative Agent and each Lender and/or, subject to the terms of Section
14.07, any proposed assignee of any portion of the interests
hereunder:  (i) the amount of the
Outstanding Principal Amount then owing under this Agreement and each of the
Notes, (ii) the terms of payment and Stated Maturity Date of the Loans (or if
earlier, the Maturity Date), (iii) the date to which interest has been paid
under each of the Notes, (iv) whether, to the Borrower’s knowledge, any offsets
or defenses exist against the repayment of the Loans and, if any are alleged to
exist, a reasonably detailed description thereof, (v) the extent to which the
Loan Documents have been Modified by the Borrower and (vi) such other
information as the Administrative Agent shall reasonably request.

 

(b)           The Administrative Agent, within
ten (10) days after the Borrower’s reasonable request therefor, shall furnish
to the Borrower a written statement, duly acknowledged, certifying to any
prospective permitted purchaser of an interest in the Borrower or any
prospective permitted lender to the Borrower or any lender providing any
Guaranteed Line of Credit, as to which the Borrower or any Subsidiary thereof remains
or will be obligated under a Guarantee: (i) the amount of the Outstanding Principal
Amount, (ii) the terms of payment and Stated Maturity Date of the Loans (or if
earlier, the Maturity Date), (iii) the date to which interest has been paid
under each of the Notes, (iv) whether, to the actual knowledge of the Person
signing on behalf of the Administrative Agent, there are any Defaults on the
part of the Borrower under this Agreement or under any of the other Loan
Documents, and, if any are alleged to exist, a detailed description thereof and
(v) the extent to which the Loan Documents have been Modified.

 

14.14       Preferences.
To the extent that the Borrower makes a payment or payments to the
Administrative Agent and/or any Lender, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and

 

157

 

continue in full
force and effect, as if such payment or proceeds had not been received by the
Administrative Agent or a Lender, as the case may be.

 

14.15       Certain
Waivers. The Borrower hereby irrevocably and unconditionally waives
(a) promptness and diligence, (b) notice of any actions taken by the
Administrative Agent or any Lender hereunder or under any other Loan Document
or any other agreement or instrument relating thereto except to the extent (i)
otherwise expressly provided herein or therein or (ii) the Borrower is not,
pursuant to Applicable Law, permitted to waive the giving of such notice,
(c) all other notices, demands and protests, and all other formalities of
every kind in connection with the enforcement of the Borrower’s obligations
hereunder and under the other Loan Documents, the omission of or delay in
which, but for the provisions of this Section 14.15, might constitute
grounds for relieving the Borrower of any of its obligations hereunder or under
the other Loan Documents, except to the extent otherwise expressly provided
herein or to the extent that the Borrower is not, pursuant to Applicable Law,
permitted to waive the giving of such notice, (d) any requirement that the
Administrative Agent or any Lender protect, secure, perfect or insure any lien
on any collateral for the Loans or exhaust any right or take any action against
the Borrower or any other Person or against any collateral for the Loans,
(e) any right or claim of right to cause a marshalling of the Borrower’s
assets and (f) until the Obligations are paid in full and discharged, all
rights of subrogation or contribution, whether arising by contract or operation
of law or otherwise by reason of payment by the Borrower pursuant hereto or to
the other Loan Documents.

 

14.16       Entire
Agreement. This Agreement, the Notes and the other Loan Documents
constitute the entire agreement between the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof and all
understandings, oral representations and agreements heretofore or
simultaneously had among the parties are merged in, and are contained in, such
documents and instruments.

 

14.17       Severability.
If any provision of this Agreement shall be held by any court of competent
jurisdiction to be unlawful, void or unenforceable for any reason as to any
Person or circumstance, such provision or provisions shall be deemed severable
from and shall in no way affect the enforceability and validity of the
remaining provisions of this Agreement.

 

14.18       Captions.
The table of contents and captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.

 

14.19       Counterparts.
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.

 

14.20       GOVERNING
LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS ARE TO BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA (AS PERMITTED BY SECTION 1646.5 OF THE CALIFORNIA CIVIL CODE OR ANY
SIMILAR SUCCESSOR PROVISION), WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW RULE
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY

 

158

 

JURISDICTION OTHER
THAN THE INTERNAL LAWS OF THE STATE OF CALIFORNIA TO GOVERN THE RIGHTS AND
DUTIES OF THE PARTIES.

 

14.21       SUBMISSION
TO JURISDICTION. THE BORROWER, THE WESTWOOD PLACE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH OF THE LENDERS HEREBY IRREVOCABLY (I) AGREE THAT
ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, ANY SECURITY DOCUMENT, OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN A COURT OF RECORD IN THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
OR IN THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN SUCH STATE AND
COUNTY, (II) CONSENT TO THE JURISDICTION OF EACH SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING, (III) WAIVE ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM AND (IV) AGREE AND CONSENT THAT ALL SERVICE OF PROCESS UPON
THE BORROWER OR THE WESTWOOD PLACE BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY SUCH STATE OR FEDERAL COURT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER OR THE WESTWOOD PLACE
BORROWER, AT THE ADDRESS FOR NOTICES PURSUANT TO SECTION 14.02
HEREOF, AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN SO MAILED. NOTHING IN THIS SECTION 14.21 SHALL AFFECT
THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE
AGENT OR ANY LENDER TO BRING ANY SUIT, ACTION OR PROCEEDING AGAINST THE
BORROWER OR THE WESTWOOD PLACE BORROWER OR THE PROPERTY OF THE BORROWER OR THE
WESTWOOD PLACE BORROWER IN THE COURTS OF ANY OTHER JURISDICTIONS.

 

14.22       WAIVER
OF JURY TRIAL; COUNTERCLAIM. EACH OF THE BORROWER, THE WESTWOOD PLACE
BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE NOTES, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS. THE BORROWER AND THE
WESTWOOD PLACE BORROWER FURTHER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE,
IN CONNECTION WITH ANY LEGAL PROCEEDING BROUGHT BY OR ON BEHALF OF THE
ADMINISTRATIVE AGENT OR THE LENDERS WITH RESPECT TO THIS AGREEMENT, THE NOTES,
THE OTHER LOAN DOCUMENTS OR OTHERWISE IN RESPECT OF THE LOANS, ANY AND EVERY
RIGHT THE BORROWER OR THE WESTWOOD PLACE BORROWER MAY HAVE TO
(A) INTERPOSE ANY COUNTERCLAIM THEREIN, OTHER THAN A MANDATORY OR
COMPULSORY COUNTERCLAIM, AND (B) HAVE THE SAME CONSOLIDATED WITH ANY OTHER
OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING CONTAINED IN THE IMMEDIATELY
PRECEDING SENTENCE SHALL PREVENT OR PROHIBIT THE BORROWER OR THE WESTWOOD PLACE
BORROWER

 

159

 

FROM INSTITUTING
OR MAINTAINING A SEPARATE ACTION AGAINST THE ADMINISTRATIVE AGENT OR THE
LENDERS WITH RESPECT TO ANY ASSERTED CLAIM. THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY WAIVE ANY DEFENSE OR OBJECTION TO THE BORROWER OR THE WESTWOOD
PLACE BORROWER INSTITUTING OR MAINTAINING SUCH A SEPARATE ACTION AGAINST THE
ADMINISTRATIVE AGENT OR THE LENDERS FOR ANY CLAIM WHICH THE BORROWER OR THE
WESTWOOD PLACE BORROWER IS PRECLUDED FROM INTERPOSING AS A COUNTERCLAIM IN OR
CONSOLIDATING WITH ANY PROCEEDING COMMENCED BY THE ADMINISTRATIVE AGENT OR THE
LENDERS DESCRIBED IN THIS SECTION 14.22, BUT THE DEFENSES AND OBJECTIONS
SO WAIVED ARE LIMITED SOLELY TO DEFENSES AND OBJECTIONS BASED ON THE ASSERTION
OF SUCH CLAIM IN A SEPARATE ACTION AND DO NOT INCLUDE ANY OTHER DEFENSES OR
OBJECTIONS, WHETHER PROCEDURAL OR SUBSTANTIVE.

 

14.23       Limitation
of Liability.

 

(a)           Neither the Borrower, nor the
Westwood Place Borrower, nor any past, present or future member in or manager
of Borrower or the Westwood Place Borrower, nor any owner of any direct or
indirect Equity Interests in the Borrower or the Westwood Place Borrower, shall
be personally liable for payments due hereunder or under any other Loan Document
or for the performance of any obligation of the Borrower hereunder or
thereunder, or breach of any representation or warranty made by the Borrower
hereunder or thereunder. Notwithstanding the foregoing provisions of this Section
14.23(a), the Borrower shall be personally (and on a full recourse basis)
liable for and shall protect, indemnify and defend the Administrative Agent and
the Lenders from and against, and shall hold the Administrative Agent and the
Lenders harmless of, from and against any deficiency, liability, loss, damage,
costs, and expenses (including legal fees and disbursements) suffered by the
Administrative Agent and/or the Lenders and caused by, or related to or as a
result of any of the following:  (i) the
commission of a criminal act by or on behalf of the Borrower, (ii) fraud,
intentional misrepresentation or intentionally inaccurate certification made at
any time in connection with the Loan Documents or the Loans by or on behalf of
the Borrower; (iii) misapplication or misappropriation of cash flow or other
revenue derived from or in respect of the Projects, including security
deposits, Insurance Proceeds, Condemnation Awards, or any rental, sales or
other income derived directly or indirectly from the Projects in violation of the
Loan Documents by or on behalf of the Borrower; and/or (iv) intentional or
bad faith commission of waste to or of the Projects or any portion thereof by
or on behalf of the Borrower. In addition, the Borrower (but not any past,
present or future member in or manager of Borrower, nor any owner of any direct
or indirect Equity Interests in the Borrower) shall be personally (and on a
full recourse basis) liable for and shall protect, indemnify and defend the
Administrative Agent and the Lenders from and against, and shall hold the
Administrative Agent and the Lenders harmless of, from and against any
deficiency, liability, loss, damage, costs, and expenses (including legal fees
and disbursements) suffered by the Administrative Agent and/or the Lenders and
caused by, or related to or as a result of any of the following:
(A) voluntary bankruptcy or collusion in an involuntary bankruptcy of the
Borrower by or on behalf of the Borrower, (B) any violation of Section
8.11(a) or resulting from a failure to perform under the Environmental
Indemnity, and/or (C) interference with foreclosure following an Event of
Default by or on behalf of the Borrower.

 

160

 

(b)           Neither the Westwood Place
Borrower, nor the Borrower, nor any past, present or future member in or
manager of the Westwood Place Borrower or the Borrower, nor any owner of any
direct or indirect Equity Interests in the Westwood Place Borrower or the
Borrower, shall be personally liable for payments due by the Westwood Place
Borrower hereunder or under any other Loan Document or for the performance of
any obligation of the Westwood Place Borrower hereunder or thereunder, or
breach of any representation or warranty made by the Westwood Place Borrower
hereunder or thereunder. Notwithstanding the foregoing provisions of this Section
14.23(b), the Westwood Place Borrower shall be personally (and on a full
recourse basis) liable for and shall protect, indemnify and defend the
Administrative Agent and the Lenders from and against, and shall hold the
Administrative Agent and the Lenders harmless of, from and against any
deficiency, liability, loss, damage, costs, and expenses (including legal fees
and disbursements) suffered by the Administrative Agent and/or the Lenders and
caused by, or related to or as a result of any of the following:  (i) the commission of a criminal act by or on
behalf of the Westwood Place Borrower, (ii) fraud, intentional
misrepresentation or intentionally inaccurate certification made by or on behalf
of the Westwood Place Borrower at any time in connection with the Loan
Documents to which the Westwood Place Borrower is a party or the Loans made to
it; (iii) misapplication or misappropriation of cash flow or other revenue
derived from or in respect of the Westwood Place Project, including security
deposits, Insurance Proceeds, Condemnation Awards, or any rental, sales or
other income derived directly or indirectly from the Westwood Place Project in
violation of the Loan Documents to which the Westwood Place Borrower is a party
by or on behalf of the Westwood Place Borrower; and/or (iv) intentional or
bad faith commission of waste to or of the Westwood Place Project or any
portion thereof by or on behalf of the Westwood Place Borrower. In addition,
the Westwood Place Borrower (but not any past, present or future member in or
manager of the Westwood Place Borrower, nor any owner of any direct or indirect
Equity Interests in the Westwood Place Borrower) shall be personally (and on a
full recourse basis) liable for and shall protect, indemnify and defend the
Administrative Agent and the Lenders from and against, and shall hold the
Administrative Agent and the Lenders harmless of, from and against any
deficiency, liability, loss, damage, costs, and expenses (including legal fees
and disbursements) suffered by the Administrative Agent and/or the Lenders and
caused by, or related to or as a result of any of the following:
(A) voluntary bankruptcy or collusion in an involuntary bankruptcy of the
Westwood Place Borrower by or on behalf of the Westwood Place Borrower,
(B) any violation of Section 8.11(a) which has been incorporated by
reference as covenants of the Westwood Place Borrower pursuant to Article
VIIIA, but solely with respect to the Westwood Place Project, or resulting
from a failure to perform under the Environmental Indemnity to which the
Westwood Place Borrower is a party, and/or (C) interference with
foreclosure following a Westwood Place Event of Default by or on behalf of the
Westwood Place Borrower.

 

(c)           Nothing contained in this
Section shall impair the validity of the indebtedness, obligations or Liens
arising under the Loan Documents. Notwithstanding anything to the contrary
contained herein, the Administrative Agent may pursue any power of sale, bring
any foreclosure action, any action for specific performance, or any other
appropriate action or proceedings against Borrower or any other Person for the
purpose of enabling the Administrative Agent and the Lenders to realize upon
the collateral for the Loans (including, without limitation, any Rents and Net
Proceeds to the extent provided for in the Loan Documents) or to obtain the
appointment of a receiver.

 

161

 

(d)           Notwithstanding anything to the contrary
contained herein, the Guarantor shall have personal liability on the terms
contained in the Guarantor Documents (to the extent provided therein).

 

14.24       Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information that may be
disclosed (a) to it and its Subsidiaries’ and Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by Applicable Laws or by
any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder
or under any other Loan Document or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section 14.24, to (i) any
assignee or pledgee of or Participant in, or any prospective assignee or
pledgee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Borrower and its obligations,
(g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a
breach of this Section 14.24 or of arrangements entered into pursuant
hereto or (ii) becomes available to the Administrative Agent or any Lender
on a non-confidential basis from a source other than the Borrower; provided,
however, the obligation to maintain the confidentiality of the
Information provided hereunder shall expire twelve (12) months after the date
upon which the Obligations hereunder are indefeasibly paid in full. For the
purposes of this Section 14.24, “Information” means all written
information received from or on behalf of the Borrower relating to the
Borrower, its Subsidiaries or Affiliates or their respective businesses, other
than any such information that is available to the Administrative Agent or any
Lender on a nonconfidential basis (and obtained from a Person not known by the
Administrative Agent or such Lender to have disclosed such information in violation
of a contractual confidentiality obligation of such Person owed to the
Borrower) prior to disclosure by the Borrower. The Administrative Agent and
each Lender, to the extent required to maintain the confidentiality of
Information as provided in this Section 14.24, shall be considered to
have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as a
commercial banker exercising reasonable and customary business practices would
accord to its own confidential information. Notwithstanding anything herein to
the contrary, the information subject to this Section 14.24 shall not
include, and the Administrative Agent and each Lender may disclose without
limitation of any kind, any information with respect to the “tax treatment” and
“tax structure” (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to the
Administrative Agent or such Lender relating to such tax treatment and tax
structure; provided that with respect to any document or similar item
that in either case contains information concerning the tax treatment or tax
structure of the transactions as well as other information, this sentence shall
only apply to such portions of the document or similar item that relate to the
tax treatment or tax structure of the Loans and transactions contemplated
hereby.

 

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14.25       Usury
Savings Clause. It is the intention of the Borrower, the Administrative
Agent and the Lenders to conform strictly to the usury and similar laws
relating to interest from time to time in force, and all Loan Documents between
the Borrower, the Administrative Agent and the Lenders, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever, whether by acceleration of maturity
hereof or otherwise, shall the amount paid or agreed to be paid in the
aggregate to the Lenders as interest (whether or not designated as interest,
and including any amount otherwise designated by or deemed to constitute
interest by a court of competent jurisdiction) hereunder or under the other
Loan Documents or in any other agreement given to secure the Loans, or in any
other document evidencing, securing or pertaining to the Loans, exceed the
maximum amount (the “Maximum Rate”) permissible under Applicable Laws. If
under any circumstances whatsoever fulfillment of any provision hereof, of this
Agreement or of the other Loan Documents, at the time performance of such
provisions shall be due, shall involve exceeding the Maximum Rate, then, ipso
facto, the obligation to be fulfilled shall be reduced to the Maximum Rate. For
purposes of calculating the actual amount of interest paid and/or payable
hereunder in respect of laws pertaining to usury or such other laws, all sums
paid or agreed to be paid to the Lenders for the use, forbearance or detention
of the Loans evidenced hereby, outstanding from time to time shall, to the
extent permitted by Applicable Law, be amortized, pro-rated, allocated and
spread from the date of disbursement of the proceeds of the Notes until payment
in full of all of such indebtedness, so that the actual rate of interest on
account of such Loans is uniform through the term hereof. If under any
circumstances any Lender shall ever receive an amount which would exceed the
Maximum Rate, such amount shall be deemed a payment in reduction of the
principal amount of the applicable Loans and shall be treated as a voluntary
prepayment under this Agreement (without prepayment penalty or premium) and
shall be so applied in accordance with the provisions of this Agreement, or if
such excessive interest exceeds the outstanding amount of the applicable Loans
and any other Obligations, the excess shall be deemed to have been a payment
made by mistake and shall be refunded to the Borrower.

 

14.26       Cooperation
with Syndication. The Borrower acknowledges that Arranger intends to
syndicate a portion of the Commitments to one or more Lenders (the “Syndication”)
and in connection therewith, the Borrower will take all actions as Arranger may
reasonably request to assist Arranger in its Syndication effort. Without
limiting the generality of the foregoing, the Borrower shall, at the request of
Arranger (i) facilitate the review of the Loan and the Projects by any
prospective Lender; (ii) assist Arranger and otherwise cooperate with Arranger
in the preparation of information offering materials (which assistance may
include reviewing and commenting on drafts of such information materials and
drafting portions thereof); (iii) deliver updated information on the Borrower
and the Projects; (iv) make representatives of the Borrower available to meet
with prospective Lenders at tours of the Projects and bank meetings; (v)
facilitate direct contact between the senior management and advisors of the
Borrower and any prospective Lender; and (vi) provide Arranger with all
information reasonably deemed necessary by it to complete the Syndication
successfully. The Borrower agrees to take such further action, in connection
with documents and amendments to the Loan Documents, as may reasonably be
required to effect such Syndication. The Borrower shall not be responsible for
any costs or expenses incurred by the Administrative Agent, the Arranger, any
Lender or any other Person in connection with such Syndication, other than Arranger’s
attorneys’ fees incurred through the closing of the Loan.

 

163

 

14.27       Reserved.

 

14.28       Controlled
Account. The Borrower and the Westwood Place Borrower hereby agree with the
Administrative Agent, as to any Controlled Account into which this Agreement
requires the Borrower or the Westwood Place Borrower, respectively, to deposit
funds, as follows:

 

(a)           Establishment and Maintenance of
the Controlled Account.

 

(i)            Each Controlled Account (A) shall be
a separate and identifiable account from all other funds held by the Depository
Bank and (B) shall contain only funds required to be deposited pursuant to this
Agreement or any other Loan Document. Any interest which may accrue on the
amounts on deposit in a Controlled Account shall be added to and shall become
part of the balance of such Controlled Account. Whichever of the Borrower or
the Westwood Place Borrower (as applicable) shall have opened such account (the
“Controlled Account Depositor”), the Administrative Agent and the
applicable Depository Bank shall enter into an agreement (the “Controlled
Account Agreement”), substantially in the form of Exhibit O attached
hereto (with such changes thereto as may be required by the Depository Bank and
satisfactory to the Administrative Agent) which shall govern the Controlled
Account and the rights, duties and obligations of each party to the Controlled
Account Agreement.

 

(ii)           The Controlled Account Agreement
shall provide that (A) the Controlled Account shall be established in the name
of the Administrative Agent, as agent for the Lenders, (B) the Controlled
Account shall be subject to the sole dominion, control and discretion of the
Administrative Agent, and (C) neither the Controlled Account Depositor nor
any other Person, including, without limitation, any Person claiming on behalf
of or through the Controlled Account Depositor, shall have any right or
authority, whether express or implied, to make use of or withdraw, or cause the
use or withdrawal of, any proceeds from the Controlled Account or any of the
other proceeds deposited in the Controlled Account, except as expressly
provided in this Agreement or in the Controlled Account Agreement.

 

(b)           Deposits to and Disbursements from
the Controlled Account. All deposits to and disbursements of all or any
portion of the deposits to the Controlled Account shall be in accordance with
this Agreement and the Controlled Account Agreement. The Controlled Account
Depositor shall pay any and all fees charged by Depository Bank in connection
with the maintenance of the Controlled Account required to be established by or
for it hereunder, and the performance of the Depository Bank’s duties.

 

(c)           Security Interest.

 

(i)            The Controlled Account Depositor
hereby grants a perfected first priority security interest in favor of the
Administrative Agent for the ratable benefit of the Lenders in each Controlled
Account established by or for it hereunder and all financial assets and other
property and sums at any time held, deposited or invested therein, and all
security entitlements and investment property relating thereto, together with
any interest

 

164

 

or other earnings
thereon, and all proceeds thereof, whether accounts, general intangibles,
chattel paper, deposit accounts, instruments, documents or securities
(collectively, such Controlled Account Depositor’s “Controlled Account
Collateral”), together with all rights of a secured party with respect
thereto (even if no further documentation is requested by the Administrative
Agent or the Lenders or executed by the Borrower or the Westwood Place Borrower
with respect thereto) to secure the Obligations of the Controlled Account
Depositor (and, in case the Borrower is the Controlled Account Depositor, also
to secure the Obligations of the Westwood Place Borrower).

 

(ii)           The Controlled Account Depositor
covenants and agrees:

 

(A)          to do all acts that may be reasonably
necessary to maintain, preserve and protect such Controlled Account Depositor’s
Controlled Account Collateral;

 

(B)           to pay promptly when due all material
taxes, assessments, charges, encumbrances and liens now or hereafter imposed
upon or affecting such Controlled Account Depositor’s Controlled Account
Collateral;

 

(C)           to appear in and defend any action or
proceeding which may materially and adversely affect such Controlled Account
Depositor’s title to or the Administrative Agent’s interest in such Controlled
Account Depositor’s Controlled Account Collateral;

 

(D)          following the creation of each
Controlled Account established by or for such Controlled Account Depositor and
the initial funding thereof, other than to the Administrative Agent pursuant to
this Agreement or a Controlled Account Agreement, not to transfer, assign, sell,
surrender, encumber, mortgage, hypothecate, or otherwise dispose of any of such
Controlled Account Depositor’s Controlled Account Collateral or rights or
interests therein, and to keep such Controlled Account Depositor’s Controlled
Account Collateral free of all levies and security interests or other liens or
charges except the security interest in favor of the Administrative Agent
granted hereunder;

 

(E)           to account fully for and promptly
deliver to the Administrative Agent, in the form received, all documents,
chattel paper, instruments and agreements constituting such Controlled Account
Depositor’s Controlled Account Collateral hereunder, endorsed to the
Administrative Agent or in blank, as requested by the Administrative Agent, and
accompanied by such powers as appropriate and until so delivered all such
documents, instruments, agreements and proceeds shall be held by such
Controlled Account Depositor in trust for the Administrative Agent, separate
from all other property of such Controlled Account Depositor; and

 

(F)           from time to time upon request by the
Administrative Agent, to furnish such further assurances of such Controlled
Account Depositor’s title with respect to such Controlled Account Depositor’s
Controlled Account Collateral, execute such written agreements, or do such
other acts, all as may be reasonably necessary to effectuate the purposes of
this agreement or as may be required by law, or in

 

165

 

order to perfect or continue the first-priority lien
and security interest of the Administrative Agent in such Controlled Account
Depositor’s Controlled Account Collateral.

 

(iii)          All interest earned on such Controlled
Account Depositor’s Controlled Account shall be retained in such Controlled
Account subject to such Controlled Account Depositor’s withdrawal rights set
forth herein. Such Controlled Account Depositor shall treat all interest earned
on its Controlled Account as its income for federal income tax purposes.

 

(iv)          Upon the occurrence and during the
continuation of an Event of Default, the Administrative Agent may (and, upon
the instruction of the Required Lenders, shall):

 

(A)          without any advertisement or notice to
or authorization from the Borrower (all of which advertisements, notices and/or
authorizations are hereby expressly waived), withdraw, sell or otherwise
liquidate the funds deposited into any Controlled Account established by or for
the Borrower, and apply the proceeds thereof to the unpaid Obligations of the
Borrower in such order as the Administrative Agent may elect in its sole
discretion, without liability for any loss, and the Borrower hereby consents to
any such withdrawal and application as a commercially reasonable disposition of
such funds and agrees that such withdrawal shall not result in satisfaction of
the Borrower’s Obligations except to the extent the proceeds are applied to
such sums;

 

(B)           without any advertisement or notice
to or authorization from the Borrower (all of which advertisements, notices
and/or authorizations are hereby expressly waived), notify any account debtor
on any Controlled Account Collateral pledged by the Borrower pursuant hereto to
make payment directly to the Administrative Agent;

 

(C)           foreclose upon all or any portion of
the Controlled Account Collateral pledged by the Borrower or otherwise enforce
the Administrative Agent’s security interest in any manner permitted by law or
provided for in this Agreement;

 

(D)          sell or otherwise dispose of all or
any portion of the Controlled Account Collateral pledged by the Borrower at one
or more public or private sales, whether or not such Controlled Account
Collateral is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as the Administrative Agent may determine;

 

(E)           recover from the Borrower all costs
and expenses, including, without limitation, reasonable attorneys’ fees,
incurred or paid by the Administrative Agent in exercising any right, power or
remedy provided by this subsection (iv); and

 

(F)           exercise any other right or remedy
available to the Administrative Agent or the Lenders under Applicable Law or in
equity.

 

166

 

(v)           Upon the occurrence and during the
continuation of a Westwood Place Event of Default, the Administrative Agent may
(and, upon the instruction of the Required Lenders, shall):

 

(A)          without any advertisement or notice to
or authorization from the Westwood Place Borrower (all of which advertisements,
notices and/or authorizations are hereby expressly waived), withdraw, sell or
otherwise liquidate the funds deposited into any Controlled Account established
by or for the Westwood Place Borrower, and apply the proceeds thereof to the
unpaid Obligations of the Westwood Place Borrower in such order as the
Administrative Agent may elect in its sole discretion, without liability for
any loss, and the Westwood Place Borrower hereby consents to any such
withdrawal and application as a commercially reasonable disposition of such
funds and agrees that such withdrawal shall not result in satisfaction of the
Westwood Place Borrower’s Obligations except to the extent the proceeds are
applied to such sums;

 

(B)           without any advertisement or notice
to or authorization from the Westwood Place Borrower (all of which
advertisements, notices and/or authorizations are hereby expressly waived),
notify any account debtor on any Controlled Account Collateral pledged by the
Westwood Place Borrower pursuant hereto to make payment directly to the
Administrative Agent;

 

(C)           foreclose upon all or any portion of
the Controlled Account Collateral pledged by the Westwood Place Borrower or
otherwise enforce the Administrative Agent’s security interest in any manner
permitted by law or provided for in this Agreement;

 

(D)          sell or otherwise dispose of all or
any portion of the Controlled Account Collateral pledged by the Westwood Place
Borrower at one or more public or private sales, whether or not such Controlled
Account Collateral is present at the place of sale, for cash or credit or
future delivery, on such terms and in such manner as the Administrative Agent
may determine;

 

(E)           recover from the Westwood Place
Borrower all costs and expenses, including, without limitation, reasonable
attorneys’ fees, incurred or paid by the Administrative Agent in exercising any
right, power or remedy provided by this subsection (v);

 

(F)           exercise all rights and remedies
available under subsection (iv) above as to any Controlled Account Collateral
pledged by the Borrower and apply such Controlled Account Collateral and any
proceeds thereof to the Obligations of the Westwood Place Borrower (as if each
reference to the “Obligations” in clause (iv) included both the Obligations of
the Borrower and the Obligations of the Westwood Place Borrower); and

 

(G)           exercise any other right or remedy
available to the Administrative Agent or the Lenders under applicable law or in
equity.

 

(vi)          Reserved.

 

167

 

14.29       Financing Statements. The
Borrower authorizes the Administrative Agent to file such financing statements
(and any continuation statements with respect thereto) as the Administrative
Agent may deem necessary in order to perfect or maintain the perfection of any
security interest granted or to be granted to the Administrative Agent pursuant
to any of the Loan Documents, in such jurisdictions as the Administrative Agent
may elect.

 

14.30       Severance of Loan. Eurohypo shall have the right, at any time,
but at no additional cost to the Borrower or the Westwood Place Borrower, to
direct the Administrative Agent, with respect to all or any portion of the Loans
to the Borrower or the Loans to the Westwood Place Borrower, respectively, to
(a) cause the Notes, the Deeds of Trust and the other Security Documents made
by such Person, to be severed and/or split into two or more separate notes,
deeds of trust and other security agreements, so as to evidence and secure one
or more senior and subordinate mortgage loans, (b) create one or more senior
and subordinate notes (i.e., an A/B or A/B/C structure) secured by the Deeds of
Trust and the other Security Documents applicable to such Loans, (c) create
multiple components of the Notes (and allocate or reallocate the Outstanding
Principal Amount of the Loans to the Borrower or the Loans to the Westwood
Place Borrower, respectively, among such components or among the components of
the Notes made by such Person, delivered upon the Closing Date) or (d)
otherwise sever the Loans to the Borrower or the Loans to the Westwood Place Borrower,
respectively, into two or more loans secured by the applicable Deeds of Trust
and the other Security Documents; in each such case, in whatever proportions
and priorities as Eurohypo may so direct in its discretion to the
Administrative Agent; provided, however, that in each such
instance (i) the Outstanding Principal Amount of all the Notes evidencing the Loans
to the Borrower or the Loans to the Westwood Place Borrower, respectively (or
(in any case involving the splitting,
modification, componentization or other severance of any previously-split,
componentized or severed Note) components of such Notes) immediately after the
effective date of such splitting, modification, componentization or other
severance, equals the Outstanding Principal Amount of the applicable Loan (or
(in any case involving the splitting,
modification, componentization or other severance of any previously-split,
componentized or severed Note) the applicable component thereof) immediately
prior to such splitting, modification, componentization or other severance,
(ii) the weighted average of the interest rates for all such Notes (or, if
applicable, components of such Notes) immediately after the effective date of
such splitting, modification, componentization or other severance equals the
interest rate of the original Note (or the applicable component thereof)
immediately prior to such splitting, modification, componentization or other
severance thereof, (iii) there shall be no modification of the Maturity
Date, the Types of Loans available to be selected by the Borrower or the
Westwood Place Borrower (provided that the Applicable Margins on the relevant
Types may be modified, and may differ for each of such split, modified,
componentized or otherwise severed Notes or components, so long as the
restrictions set forth in clause (ii) above are not violated), the due dates
for mandatory principal payments, prepayment terms, Events of Default or
Westwood Place Events of Default (other than cross defaulting of any severed
Notes or Security Documents, but not so as to cross default the Borrower’s
Defaults or Events of Default with those of the Westwood Place Borrower) or any
other modifications which would result, in the aggregate, in an increase in the
economic obligations of the Borrower or the Westwood Place Borrower with
respect to all Loans to such Person outstanding hereunder following such splitting, modification, componentization or
other severance as compared to the obligations of the Borrower or the Westwood
Place Borrower immediately prior thereto (other than changes in the
interest rate or Applicable Margins which do not violate the restrictions in

 

168

 

clause (ii)
above), including, without limitation, any recourse provisions, and (iv) except
for modifications which do not violate the restrictions set forth in clauses
(ii) and (iii) above, such modification shall not result, in the aggregate, in
an increase in any liability or obligation, or any change in any substantive
rights, of the Borrower, any Borrower Party or any Named Principal under the
Loan Documents following such splitting, modification, componentization or other severance as compared
to the respective liabilities, obligations or rights of such parties
immediately prior thereto. If requested by the Administrative Agent in writing,
subject to the provisions of Section 2.04(b), the Borrower or the
Westwood Place Borrower shall execute within ten (10) Business Days after such
request, a severance agreement, amendments to or amendments and restatements of
any one or more Loan Documents to which such Person is a party, and such
documentation as the Administrative Agent may reasonably request to evidence
and/or effectuate any such splitting, modification, componentization or other
severance, all in form and substance reasonably satisfactory to Eurohypo, the
Administrative Agent and the Borrower or the Westwood Place Borrower, as
applicable. In no event shall the Administrative Agent exercise its rights
hereunder to seek to (i) cause the Westwood Place Borrower to be liable
for the Obligations of the Borrower, (ii) cross-default or cross-collateralize
the Borrower’s obligations with those of the Westwood Place Borrower or (iii)
allocate or reallocate the Outstanding Principal Amount of the Loans to the
Borrower to the Loans to the Westwood Place Borrower or to allocate or
reallocate the Outstanding Principal Amount of the Loans to the Westwood Place
Borrower to the Loans to the Borrower.

 

14.31       Additional
Permitted Public REIT Provisions. In connection with the Permitted
Reorganization and following a Permitted Public REIT Transfer, the following
provisions shall apply:

 

(a)           The
Borrower shall have the right from time to time upon notice to, but without the
consent of, the Administrative Agent to change the Borrower’s Manager to the
Permitted Public REIT or any other Permitted Public REIT Subsidiary determined
by the Permitted Public REIT. Upon the occurrence of such change, the Borrower
shall notify the Administrative Agent of the name and principal place of
business or chief executive office of the new Borrower’s Manager within ten
(10) Business Days after any change in the same.

 

(b)           Notwithstanding
the provisions of Section 1.02(b), the Borrower shall have the right
from time to time upon notice to, but without the consent of, the
Administrative Agent, to change its fiscal year, including the last days of its
fiscal year and fiscal quarters, to correspond with those of the Permitted
Public REIT. The Borrower shall provide written notice thereof to the
Administrative Agent within ten (10) Business Days after the occurrence of such
change.

 

(c)           Nothing in Sections 8.03, 9.01
and 9.07 as to parties other than the Borrower shall prohibit or
restrict the actions taken pursuant to the Permitted Reorganization, or any
other actions expressly permitted by this Section 14.31 (or any
agreement to take any such actions). As used herein, the term “Permitted
Reorganization” shall mean a simultaneous transaction consisting of
one or more of the following elements, provided that, upon the consummation of
such transaction, the Borrower shall be in compliance with all covenants set
forth in this Agreement (after giving effect to the express terms thereof which
by their terms may be applicable or inapplicable upon the occurrence of the
Permitted Public REIT Transfer or

 

169

 

Transfer of the Projects to a Qualified Successor Entity), no Event of
Default shall result therefrom, and the
Permitted Public REIT shall directly or indirectly own fifty-one percent (51%)
or more of the ownership interests in the Borrower and shall directly or
indirectly control the Borrower:

 

(i)            The
formation of a limited liability company that is a wholly owned Subsidiary of
the Operating Partnership of the Permitted Public REIT (the “OP Merger Sub”)
and the merger of the Borrower’s Member into the OP Merger Sub with either the
Borrower’s Member or the OP Merger Sub as the surviving entity;

 

(ii)           The
contribution to the Operating Partnership of the Permitted Public REIT of all
of the Equity Interests in the Borrower’s Member that are not redeemed;

 

(iii)          At
the option of the Permitted Public REIT, the contribution to the
Operating Partnership of the Permitted Public REIT or another Permitted Public REIT
Subsidiary as part of a Permitted Public REIT Transfer of all of the Equity
Interests in the Borrower and/or the Westwood Place Borrower, the withdrawal of
the Borrower’s Member as the sole member of the Borrower and as a member and
manager of the Westwood Place Borrower and the dissolution of the Borrower’s
Member or the OP Merger Sub;

 

(iv)          The
formation of a limited liability company that is a wholly owned Subsidiary of
the Permitted Public REIT (“REIT Merger Sub 1”) and the merger of the Borrower’s
Manager into REIT Merger Sub 1 with either the Borrower’s Manager or REIT
Merger Sub 1 as the surviving entity;

 

(v)           The
formation of a limited liability company that is a wholly owned Subsidiary of
the Permitted Public REIT (“REIT Merger Sub 2”) and the merger of the
Property Manager into REIT Merger Sub 2 with either the Property Manager or
REIT Merger Sub 2 as the surviving entity;

 

(vi)          The
contribution to the Operating Partnership of the Permitted Public REIT of all
or substantially all of the assets of the Borrower’s Manager and all or
substantially all of the assets of the Property Manager and, at the option of
the Permitted Public REIT, the subsequent dissolution of the Borrower’s Manager
and/or the Property Manager;

 

(vii)         The
withdrawal of the Borrower’s Manager as the manager of the Borrower and any
applicable Subsidiaries of the Borrower or the Borrower’s Member and the
appointment of the Permitted Public REIT or any wholly-owned Permitted Public
REIT Subsidiary determined by the Permitted Public REIT as the new manager of
such Person;

 

(viii)        The
termination of the Property Management Agreement for each Project and the
appointment, pursuant to Section 14.31(d), of a new Property Manager for
the Projects consisting of the Permitted Public REIT or any wholly-owned Permitted
Public REIT Subsidiary determined by the Permitted Public REIT; and

 

(ix)           Modifications
to the Organizational Documents of the Borrower Parties that do not violate Section 9.01(b);
and

 

170

 

(x)            The
formation, dissolution or termination of such other entities, the contribution
or transfer of such other assets, the execution of such contracts and
agreements, and such other deliveries and actions as the Borrower Parties shall
determine to be necessary or appropriate to accomplish the foregoing so long
as, upon the consummation of such transaction, the Borrower shall be in
compliance with all covenants set forth in this Agreement (after giving effect
to the express terms thereof which by their terms may be applicable or
inapplicable upon the occurrence of the Permitted Public REIT Transfer or Transfer
of the Projects to a Qualified Successor Entity), no Event of Default shall
result therefrom, and the Permitted
Public REIT shall directly or indirectly own fifty-one percent (51%) or more of
the ownership interests in the Borrower and shall directly or indirectly
control the Borrower.

 

(d)           In connection with the Permitted
Reorganization or at any time thereafter, the Borrower shall have the right to
terminate (or assign to the new property manager) the existing Property
Management Agreement for each Project and to replace, pursuant to this Section
14.31(d), the Property Manager by
the Permitted Public REIT or by a management company controlled directly or
indirectly by the Permitted Public REIT (including, without limitation, the
Operating Partnership of the Permitted Public REIT or any other wholly-owned Permitted
Public REIT Subsidiary). If any Project is managed by the Permitted Public REIT
or a Permitted Public REIT Subsidiary, then the Borrower may dispense with the
requirement of entering into a property management agreement or may enter into
a new property management agreement for one or more of the Projects on such
terms as it deems satisfactory (which may include, without limitation, a
separate cost sharing agreement delegating responsibilities for property
management to the Permitted Public REIT or a Permitted Public REIT Subsidiary);
provided that, if a property management agreement is entered into, such
agreement shall in all events be subordinate to the Deeds of Trust and the
other Loan Documents, and, within thirty (30) days after entering into a new
property management agreement, the Borrower and the new property manager will
execute and deliver to the Administrative Agent a Property Manager’s Consent,
with such changes thereto as may be reasonably necessary for the Permitted
Public REIT or its Affiliates to comply with tax or other Applicable Laws
pertaining to their status.

 

(e)           The Borrower’s Manager’s Limited
Indemnity and Guaranty shall be replaced by replacement guaranties delivered by
an entity reasonably
satisfactory to the Administrative Agent with a net worth at least equivalent
to that of Borrower’s Manager as of the date of this Agreement and which
controls the Borrower, which may, at Borrower’s option, be the Permitted Public
REIT’s Operating Partnership or another guarantor reasonably
satisfactory to the Administrative Agent. Without limiting the discretion of
the Administrative Agent in connection with the review of any such replacement
guarantor, it is understood and agreed that (i) such replacement guarantor
shall deliver to the Administrative Agent such certified organizational
documents and papers, authorizations, consents, resolutions, incumbency
certificates and legal opinions as the Administrative Agent may reasonably
require in its discretion in order to confirm the due formation, valid
existence and good standing of such replacement guarantor, due execution,
authorization, validity and enforceability of such replacement guaranties, the
enforceability with respect to such replacement guarantor of the obligations incurred
thereby and the adequacy of the consideration received by such replacement
guarantor for the incurrence of such obligations and such other matters
relating to such replacement guarantor as the Administrative Agent may
reasonably request; (ii) the Administrative Agent shall have received such
financial statements and obtained such

 

171

 

background checks, searches of governmental records and similar
diligence items with respect to such replacement guarantor as shall be in form
and substance reasonably satisfactory to the Administrative Agent; and (iii)
the Borrower or replacement guarantor shall pay upon demand all costs and
expenses (including, without limitation, reasonable attorneys’ fees and
expenses) incurred by the Administrative Agent in connection with the review,
preparation, negotiation or execution of any of the foregoing items. Upon the
Administrative Agent’s approval of such replacement guarantor and satisfaction
of the conditions set forth above, such replacement guarantor shall be deemed a
“Guarantor” hereunder in substitution for the named Guarantor and the
replacement guaranties delivered by such replacement guarantor shall be deemed
the “Guarantor Documents” hereunder.

 

(f)            The
Borrower shall ̧ within ten (10) Business Days, following the consummation of
the Permitted Reorganization, deliver written notice thereof to the
Administrative Agent which shall identify in reasonable detail any changes in
the identity of the Borrower Parties or the Property Manager, any changes in
the Property Management Agreement, any changes in the Organizational Documents
of the Borrower Parties, or any change in the fiscal year of the Borrower which
were consummated in connection therewith.

 

(g)           Reserved.

 

14.32       Provisions
of Article XIV Affecting Westwood Place. In addition to those provisions in
Article XIV which expressly relate to the Westwood Place Borrower, each
of the provisions of all of the other sections in Article XIV shall be
binding upon and refer to the Westwood Place Borrower and shall apply to the
Loans made to it, the Westwood Place Project and the Loan Documents to which
the Westwood Place Borrower is a party, as if, in each case as the context
requires, each reference therein to the “Borrower” or any “Borrower Party” or
“Borrower Parties” shall mean the Westwood Place Borrower, each reference
therein to the “Loans” shall mean the Loans made or to be made to the Westwood
Place Borrower, each reference therein to the “Commitment” shall mean the
Westwood Place Commitment, each reference therein to any “Project” shall mean
the Westwood Place Project, each reference therein to any Loan Document shall
mean the applicable Loan Document to which the Westwood Place Borrower is a
party, if any, and each reference therein to a “Default” or “Event of Default”
shall mean a Westwood Place Default or Westwood Place Event of Default,
respectively.

 

 

[Signature Pages Follow]

 

172

 

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

 

 

	
   

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  DOUGLAS EMMETT
  1997, LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DOUGLAS EMMETT
  REALTY ADVISORS,

  
	
   

  	
   

  	
  a California
  corporation, its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  s/ William Kamer

  	
   

  
	
   

  	
   

  	
   

  	
  William Kamer

  	
   

  
	
   

  	
   

  	
   

  	
  Senior Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Douglas Emmett
  1997, LLC

  
	
   

  	
  c/o Douglas
  Emmett Realty Advisors

  
	
   

  	
  808 Wilshire
  Boulevard, Suite 200

  
	
   

  	
  Santa Monica,
  California 90401

  
	
   

  	
  Attention:
  Jordan L. Kaplan

  
	
   

  	
  Telecopier No.:
  (310) 255-7702

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Douglas Emmett
  1997, LLC

  
	
   

  	
  c/o Douglas
  Emmett Realty Advisors

  
	
   

  	
  808 Wilshire
  Boulevard, Suite 200

  
	
   

  	
  Santa Monica,
  California 90401

  
	
   

  	
  Attention:
  William Kamer, Esq.

  
	
   

  	
  Telecopier No.:
  (310) 255-7702

  

 

 

	
   

  	
  WESTWOOD PLACE
  BORROWER

  
	
   

  	
   

  
	
   

  	
  WESTWOOD PLACE
  INVESTORS, LLC,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DOUGLAS EMMETT
  REALTY FUND 1997,

  A CALIFORNIA LIMITED PARTNERSHIP,

  its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DOUGLAS EMMETT
  REALTY ADVISORS,

  
	
   

  	
   

  	
   

  	
  a California
  corporation, its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
    /s/
  William Kamer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  William
  Kamer

  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

   

   

  Westwood Place
  Investors, LLC

  c/o Douglas Emmett Realty Advisors

  808 Wilshire Boulevard, Suite 200

  Santa Monica, California  90401

  Attention:  Jordan L. Kaplan

  Telecopier No.:  (310) 255-7701

   

   

  With copies to:

   

  Westwood Place
  Investors, LLC

  Douglas Emmett Realty Advisors

  808 Wilshire Boulevard, Suite 200

  Santa Monica, California  90401

  Attention: William Kamer, Esq.

  Telecopier No.: (310) 255-7702

  

 

 

	
   

  	
  LENDERS

  
	
   

  	
   

  
	
   

  	
  EUROHYPO AG, NEW
  YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Sarner

  
	
   

  	
   

  	
  Name: David
  Sarner

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Cox

  
	
   

  	
   

  	
  Name: Stephen
  Cox

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for
  Notices to Eurohypo AG,

  
	
   

  	
  New York Branch:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: Legal
  Director

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New York
  10036

  
	
   

  	
  Attention: Head
  of Portfolio Operations

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
  - and -

  
	
   

  	
   

  
	
   

  	
  Morrison &
  Foerster LLP

  
	
   

  	
  555 West Fifth
  Street, Suite 3500

  
	
   

  	
  Los Angeles,
  California 90013

  
	
   

  	
  Attention:
  Thomas R. Fileti, Esq.

  
	
   

  	
  Telecopier No.:
  (213) 892-5454

  

 

 

	
   

  	
  BARCLAYS CAPITAL
  REAL ESTATE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LoriAnn Rung

  
	
   

  	
   

  	
  Name: LoriAnn
  Rung

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Barclays Capital Real Estate Inc.

  
	
   

  	
  200 Park Avenue

  
	
   

  	
  New York, NY 10166

  
	
   

  	
  Attention: Larry Miller, Director

  
	
   

  	
  Telecopier No.: (212) 412-1613

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Barclays Capital Real Estate Inc.

  
	
   

  	
  200 Park Avenue

  
	
   

  	
  New York, NY 10166

  
	
   

  	
  Attention: Lori Rung

  
	
   

  	
  Telecopier No.: (212) 412-1664

  

 

 

	
   

  	
  ADMINISTRATIVE
  AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EUROHYPO AG, NEW
  YORK BRANCH,

  	
   

  
	
   

  	
  as
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alfred Koch

  	
   

  
	
   

  	
   

  	
  Name: Alfred
  Koch

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Cox

  	
   

  
	
   

  	
   

  	
  Name: Stephen
  Cox

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for
  Notices to

  
	
   

  	
  Eurohypo as
  Administrative Agent:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: Legal
  Director

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: Head
  of Portfolio Operations

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
  - and -

  
	
   

  	
   

  
	
   

  	
  Morrison &
  Foerster LLP

  
	
   

  	
  555 West Fifth
  Street, Suite 3500

  
	
   

  	
  Los Angeles,
  California 90013

  
	
   

  	
  Attention:
  Thomas R. Fileti, Esq.

  
	
   

  	
  Telecopier No.:
  (213) 892-5454

  

 

 

SCHEDULE 1A

 

LIST OF PROJECTS

 

	
  1.

  	
  Century
  Park Plaza, 1801 Century Park East, Los Angeles, California

  
	
   

  	
   

  
	
  2.

  	
  Olympic
  Center, 11150 Olympic Blvd., Los Angeles, California

  
	
   

  	
   

  
	
  3.

  	
  Westside
  Towers, 11835-11845 W. Olympic Blvd., Los Angeles, California

  
	
   

  	
   

  
	
  4.

  	
  Coral
  Plaza, 11812 San Vicente Blvd., Los Angeles, California

  
	
   

  	
   

  
	
  5.

  	
  Lincoln
  Wilshire, 808 Wilshire Blvd., Santa Monica, California

  
	
   

  	
   

  
	
  6.

  	
  Valley
  Executive Tower, 15260 Ventura Blvd., Los Angeles, California

  
	
   

  	
   

  
	
  7.

  	
  Valley
  Office Plaza, 15233 Ventura Blvd., Los Angeles, California

  
	
   

  	
   

  
	
  8.

  	
  MB Plaza,
  16255 Ventura Blvd., Los Angeles, California

  
	
   

  	
   

  
	
  9.

  	
  Encino
  Terrace, 15821 Ventura Blvd., Los Angeles, CaliforniaExhibit
10.46

 

 

LOAN AGREEMENT

 

dated as of

 

August 25, 2005

 

among

 

DOUGLAS EMMETT 1998, LLC,

A DELAWARE LIMITED LIABILITY COMPANY

 

 

the LENDERS Party Hereto,

 

and

 

EUROHYPO AG, NEW
YORK BRANCH,

 

as Administrative Agent

 

 

$150,000,000

 

 

EUROHYPO AG, NEW YORK BRANCH,

as Lead Arranger and Joint Bookrunner

 

and

 

BARCLAYS CAPITAL
REAL ESTATE INC.

as Co-Lead Arranger and Joint Bookrunner

 

 

 

	
  ARTICLE I

  	
  DEFINITIONS AND ACCOUNTING
  MATTERS

  	
  2

  
	
  1.01

  	
   

  	
  Certain Defined Terms

  	
  2

  
	
  1.02

  	
   

  	
  Accounting Terms and Determinations

  	
  33

  
	
  1.03

  	
   

  	
  Types of Loans

  	
  33

  
	
  1.04

  	
   

  	
  Terms Generally

  	
  33

  
	
  ARTICLE II

  	
  COMMITMENTS, LOANS, NOTES AND
  PREPAYMENTS

  	
  33

  
	
  2.01

  	
   

  	
  Loans

  	
  33

  
	
  2.02

  	
   

  	
  Funding of Loans

  	
  34

  
	
  2.03

  	
   

  	
  Several Obligations

  	
  34

  
	
  2.04

  	
   

  	
  Notes

  	
  34

  
	
  2.05

  	
   

  	
  Conversions or Continuations of Loans

  	
  34

  
	
  2.06

  	
   

  	
  Prepayment

  	
  35

  
	
  2.07

  	
   

  	
  Mandatory Prepayments

  	
  37

  
	
  2.08

  	
   

  	
  Interest and Other Charges on Prepayment

  	
  37

  
	
  2.09

  	
   

  	
  Release of Projects

  	
  38

  
	
  2.10

  	
   

  	
  Call Date

  	
  40

  
	
  ARTICLE III

  	
  PAYMENTS OF PRINCIPAL AND
  INTEREST

  	
  40

  
	
  3.01

  	
   

  	
  Repayment of Loans

  	
  40

  
	
  3.02

  	
   

  	
  Interest

  	
  40

  
	
  3.03

  	
   

  	
  Project-Level Account

  	
  41

  
	
  ARTICLE IV

  	
  PAYMENTS; PRO RATA TREATMENT;
  COMPUTATIONS; ETC

  	
  42

  
	
  4.01

  	
   

  	
  Payments

  	
  42

  
	
  4.02

  	
   

  	
  Pro Rata Treatment

  	
  43

  
	
  4.03

  	
   

  	
  Computations

  	
  43

  
	
  4.04

  	
   

  	
  Minimum Amounts

  	
  43

  
	
  4.05

  	
   

  	
  Certain Notices

  	
  44

  
	
  4.06

  	
   

  	
  Non-Receipt of Funds by the Administrative Agent

  	
  44

  
	
  4.07

  	
   

  	
  Sharing of Payments, Etc

  	
  46

  
	
  ARTICLE V

  	
  YIELD PROTECTION, ETC

  	
  47

  
	
  5.01

  	
   

  	
  Additional Costs

  	
  47

  
	
  5.02

  	
   

  	
  Limitation on Eurodollar Loans

  	
  48

  
	
  5.03

  	
   

  	
  Illegality

  	
  49

  
	
  5.04

  	
   

  	
  Treatment of Affected Loans

  	
  49

  

 

i

 

	
  5.05

  	
   

  	
  Compensation

  	
  50

  
	
  5.06

  	
   

  	
  Taxes

  	
  51

  
	
  5.07

  	
   

  	
  Replacement of Lenders

  	
  52

  
	
  ARTICLE VI

  	
  CONDITIONS PRECEDENT

  	
  53

  
	
  6.01

  	
   

  	
  Conditions Precedent to Effectiveness of Loan
  Commitments

  	
  53

  
	
  ARTICLE VII

  	
  REPRESENTATIONS AND WARRANTIES

  	
  57

  
	
  7.01

  	
   

  	
  Organization; Powers

  	
  57

  
	
  7.02

  	
   

  	
  Authorization; Enforceability

  	
  57

  
	
  7.03

  	
   

  	
  Government Approvals; No Conflicts

  	
  58

  
	
  7.04

  	
   

  	
  Financial Condition

  	
  58

  
	
  7.05

  	
   

  	
  Litigation

  	
  58

  
	
  7.06

  	
   

  	
  ERISA

  	
  58

  
	
  7.07

  	
   

  	
  Taxes

  	
  59

  
	
  7.08

  	
   

  	
  Investment and Holding Company Status

  	
  59

  
	
  7.09

  	
   

  	
  Environmental Matters

  	
  59

  
	
  7.10

  	
   

  	
  Organizational Structure

  	
  60

  
	
  7.11

  	
   

  	
  Subsidiaries

  	
  60

  
	
  7.12

  	
   

  	
  Title

  	
  60

  
	
  7.13

  	
   

  	
  No Bankruptcy Filing

  	
  60

  
	
  7.14

  	
   

  	
  Executive Offices; Places of Organization

  	
  60

  
	
  7.15

  	
   

  	
  Compliance; Government Approvals

  	
  61

  
	
  7.16

  	
   

  	
  Condemnation; Casualty

  	
  61

  
	
  7.17

  	
   

  	
  Utilities and Public Access; No Shared Facilities

  	
  61

  
	
  7.18

  	
   

  	
  Solvency

  	
  61

  
	
  7.19

  	
   

  	
  Foreign Person

  	
  61

  
	
  7.20

  	
   

  	
  No Joint Assessment; Separate Lots

  	
  61

  
	
  7.21

  	
   

  	
  Security Interests and Liens

  	
  61

  
	
  7.22

  	
   

  	
  Leases

  	
  62

  
	
  7.23

  	
   

  	
  Insurance

  	
  63

  
	
  7.24

  	
   

  	
  Physical Condition

  	
  63

  
	
  7.25

  	
   

  	
  Flood Zone

  	
  63

  
	
  7.26

  	
   

  	
  Management Agreement

  	
  63

  
	
  7.27

  	
   

  	
  Boundaries

  	
  64

  

 

ii

 

	
  7.28

  	
   

  	
  Illegal Activity

  	
  64

  
	
  7.29

  	
   

  	
  Permitted Liens

  	
  64

  
	
  7.30

  	
   

  	
  Foreign Assets Control Regulations, Etc

  	
  64

  
	
  7.31

  	
   

  	
  Defaults

  	
  64

  
	
  7.32

  	
   

  	
  Other Representations

  	
  64

  
	
  7.33

  	
   

  	
  True and Complete Disclosure

  	
  64

  
	
  7.34

  	
   

  	
  Reserved

  	
  65

  
	
  7.35

  	
   

  	
  Limited Partners

  	
  65

  
	
  7.36

  	
   

  	
  Non-Foreign Status

  	
  65

  
	
  7.37

  	
   

  	
  Borrower’s Member

  	
  65

  
	
  ARTICLE VIII

  	
  AFFIRMATIVE COVENANTS OF THE
  BORROWER

  	
  65

  
	
  8.01

  	
   

  	
  Information

  	
  65

  
	
  8.02

  	
   

  	
  Notices of Material Events

  	
  68

  
	
  8.03

  	
   

  	
  Existence, Etc

  	
  69

  
	
  8.04

  	
   

  	
  Compliance with Laws; Adverse Regulatory Changes

  	
  69

  
	
  8.05

  	
   

  	
  Insurance

  	
  70

  
	
  8.06

  	
   

  	
  Real Estate Taxes and Other Charges

  	
  75

  
	
  8.07

  	
   

  	
  Maintenance of the Projects; Alterations

  	
  76

  
	
  8.08

  	
   

  	
  Further Assurances

  	
  77

  
	
  8.09

  	
   

  	
  Performance of the Loan Documents

  	
  77

  
	
  8.10

  	
   

  	
  Books and Records; Inspection Rights

  	
  77

  
	
  8.11

  	
   

  	
  Environmental Compliance

  	
  77

  
	
  8.12

  	
   

  	
  Management of the Projects

  	
  79

  
	
  8.13

  	
   

  	
  Leases

  	
  79

  
	
  8.14

  	
   

  	
  Tenant Estoppels

  	
  80

  
	
  8.15

  	
   

  	
  Subordination, Non-Disturbance and Attornment
  Agreements

  	
  80

  
	
  8.16

  	
   

  	
  Operating Plan and Budget

  	
  80

  
	
  8.17

  	
   

  	
  Operating Expenses

  	
  81

  
	
  8.18

  	
   

  	
  Margin Regulations

  	
  82

  
	
  8.19

  	
   

  	
  Hedge Agreements

  	
  82

  
	
  8.20

  	
   

  	
  Reserved

  	
  86

  
	
  8.21

  	
   

  	
  Required Work

  	
  86

  

 

iii

 

	
  ARTICLE IX

  	
  NEGATIVE COVENANTS OF THE
  BORROWER

  	
  86

  
	
  9.01

  	
   

  	
  Fundamental Change

  	
  86

  
	
  9.02

  	
   

  	
  Limitation on Liens

  	
  86

  
	
  9.03

  	
   

  	
  Due on Sale; Transfer; Pledge

  	
  88

  
	
  9.04

  	
   

  	
  Indebtedness

  	
  94

  
	
  9.05

  	
   

  	
  Investments

  	
  97

  
	
  9.06

  	
   

  	
  Restricted Payments

  	
  97

  
	
  9.07

  	
   

  	
  Change of Organization Structure; Location of
  Principal Office

  	
  97

  
	
  9.08

  	
   

  	
  Transactions with Affiliates

  	
  97

  
	
  9.09

  	
   

  	
  Leases

  	
  97

  
	
  9.10

  	
   

  	
  Reserved

  	
  99

  
	
  9.11

  	
   

  	
  No Joint Assessment; Separate Lots

  	
  99

  
	
  9.12

  	
   

  	
  Zoning

  	
  99

  
	
  9.13

  	
   

  	
  ERISA

  	
  100

  
	
  9.14

  	
   

  	
  Reserved

  	
  100

  
	
  9.15

  	
   

  	
  Property Management

  	
  100

  
	
  9.16

  	
   

  	
  Foreign Assets Control Regulations

  	
  101

  
	
  ARTICLE X

  	
  INSURANCE AND CONDEMNATION
  PROCEEDS

  	
  101

  
	
  10.01

  	
   

  	
  Casualty Events

  	
  101

  
	
  10.02

  	
   

  	
  Condemnation Awards

  	
  102

  
	
  10.03

  	
   

  	
  Restoration

  	
  103

  
	
  ARTICLE XI

  	
  CASH TRAP ACCOUNT

  	
  108

  
	
  11.01

  	
   

  	
  Low DSCR Trigger Event

  	
  108

  
	
  ARTICLE XII

  	
  EVENTS OF DEFAULT

  	
  111

  
	
  12.01

  	
   

  	
  Events of Default

  	
  111

  
	
  12.02

  	
   

  	
  Remedies

  	
  114

  
	
  ARTICLE XIII

  	
  THE ADMINISTRATIVE AGENT

  	
  115

  
	
  13.01

  	
   

  	
  Appointment, Powers and Immunities

  	
  115

  
	
  13.02

  	
   

  	
  Reliance by Administrative Agent

  	
  116

  
	
  13.03

  	
   

  	
  Defaults

  	
  116

  
	
  13.04

  	
   

  	
  Rights as a Lender

  	
  119

  
	
  13.05

  	
   

  	
  Indemnification

  	
  119

  
	
  13.06

  	
   

  	
  Non-Reliance on Administrative Agent and Other
  Lenders

  	
  120

  

 

iv

 

	
  13.07

  	
   

  	
  Failure to Act

  	
  120

  
	
  13.08

  	
   

  	
  Resignation of Administrative Agent

  	
  120

  
	
  13.09

  	
   

  	
  Consents under Loan Documents

  	
  122

  
	
  13.10

  	
   

  	
  Authorization

  	
  122

  
	
  13.11

  	
   

  	
  Amendments Concerning Agency Function

  	
  122

  
	
  13.12

  	
   

  	
  Liability of the Administrative Agent

  	
  122

  
	
  13.13

  	
   

  	
  Transfer of Agency Function

  	
  122

  
	
  13.14

  	
   

  	
  Co-Lead Arranger and Joint Bookrunner

  	
  122

  
	
  ARTICLE XIV

  	
  MISCELLANEOUS

  	
  123

  
	
  14.01

  	
   

  	
  Non-Waiver; Remedies Cumulative

  	
  123

  
	
  14.02

  	
   

  	
  Notices

  	
  123

  
	
  14.03

  	
   

  	
  Expenses, Etc

  	
  124

  
	
  14.04

  	
   

  	
  Indemnification

  	
  125

  
	
  14.05

  	
   

  	
  Amendments, Etc

  	
  126

  
	
  14.06

  	
   

  	
  Successors and Assigns

  	
  126

  
	
  14.07

  	
   

  	
  Assignments and Participations

  	
  127

  
	
  14.08

  	
   

  	
  Survival

  	
  130

  
	
  14.09

  	
   

  	
  Reserved

  	
  130

  
	
  14.10

  	
   

  	
  Right of Set-off

  	
  130

  
	
  14.11

  	
   

  	
  Remedies of Borrower

  	
  131

  
	
  14.12

  	
   

  	
  Brokers

  	
  131

  
	
  14.13

  	
   

  	
  Estoppel Certificates

  	
  132

  
	
  14.14

  	
   

  	
  Preferences

  	
  132

  
	
  14.15

  	
   

  	
  Certain Waivers

  	
  132

  
	
  14.16

  	
   

  	
  Entire Agreement

  	
  133

  
	
  14.17

  	
   

  	
  Severability

  	
  133

  
	
  14.18

  	
   

  	
  Captions

  	
  133

  
	
  14.19

  	
   

  	
  Counterparts

  	
  133

  
	
  14.20

  	
   

  	
  GOVERNING LAW

  	
  133

  
	
  14.21

  	
   

  	
  SUBMISSION TO JURISDICTION

  	
  133

  
	
  14.22

  	
   

  	
  WAIVER OF JURY TRIAL; COUNTERCLAIM

  	
  134

  
	
  14.23

  	
   

  	
  Limitation of Liability

  	
  135

  
	
  14.24

  	
   

  	
  Confidentiality

  	
  136

  

 

v

 

	
  14.25

  	
   

  	
  Usury Savings Clause

  	
  137

  
	
  14.26

  	
   

  	
  Cooperation with Syndication

  	
  137

  
	
  14.27

  	
   

  	
  Reserved

  	
  138

  
	
  14.29

  	
   

  	
  Financing Statements

  	
  140

  
	
  14.30

  	
   

  	
  Severance of Loan

  	
  140

  
	
  14.31 

  	
   

  	
  Additional Permitted Public REIT Provisions

  	
  142

  

 

	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1A

  	
  -

  	
  List of Projects

  
	
  Schedule 1B

  	
  -

  	
  Legal
  Descriptions of Projects

  
	
  Schedule 1.01(1)

  	
  -

  	
  Allocated Loan
  Amounts

  
	
  Schedule 1.01(2)

  	
  -

  	
  List of
  Applicable Lending Offices

  
	
  Schedule 1.01(3)

  	
  -

  	
  Appraised Values

  
	
  Schedule 1.01(4)

  	
  -

  	
  List of
  Commitments and Proportionate Shares

  
	
  Schedule 1.01(5)

  	
  -

  	
  Certain Eligible
  Assignees

  
	
  Schedule 1.01(6)

  	
  -

  	
  List of
  Environmental Reports

  
	
  Schedule 1.01(7)

  	
  -

  	
  List of Property
  Condition Reports

  
	
  Schedule 1.01(8)

  	
  -

  	
  List of Property
  Management Agreements

  
	
  Schedule 1.01(9)

  	
  -

  	
  Title Companies

  
	
  Schedule 7.04

  	
  -

  	
  Financial
  Condition Events

  
	
  Schedule 7.05

  	
  -

  	
  Pending Litigation

  
	
  Schedule 7.09

  	
  -

  	
  Environmental
  Matters

  
	
  Schedule 7.11

  	
  -

  	
  Subsidiaries

  
	
  Schedule 7.22

  	
  -

  	
  Rent Roll

  
	
  Schedule 8.11

  	
  -

  	
  List of
  Underground Storage Tanks

  
	
  Schedule 8.21

  	
  -

  	
  Required Work

  
	
  Schedule 9.12

  	
  -

  	
  Existing
  Non-conforming Uses

  

 

vi

 

	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of
  Assignment and Assumption

  
	
  Exhibit B

  	
  -

  	
  Borrower’s
  Manager’s Limited Indemnity and Guarantee

  
	
  Exhibit C

  	
  -

  	
  Form of Cash
  Trap Account Security Agreement

  
	
  Exhibit D

  	
  -

  	
  Form of Deed of
  Trust

  
	
  Exhibit E

  	
  -

  	
  Form of
  Environmental Indemnity

  
	
  Exhibit F

  	
  -

  	
  Form of General
  Assignment

  
	
  Exhibit G-1

  	
  -

  	
  Form of Hedge
  Agreement Pledge (Required)

  
	
  Exhibit G-2

  	
  -

  	
  Form of Hedge
  Agreement Pledge (Optional)

  
	
  Exhibit H

  	
  -

  	
  Form of Notes

  
	
  Exhibit I

  	
  -

  	
  Form of
  Project-Level Account Security Agreement

  
	
  Exhibit J

  	
  -

  	
  Form of Property
  Manager’s Consent

  
	
  Exhibit K

  	
  -

  	
  Form of
  Subordination, Non-Disturbance and Attornment Agreement

  
	
  Exhibit L

  	
  -

  	
  Notice of
  Conversion or Continuation

  
	
  Exhibit M

  	
  -

  	
  Form of Survey
  Certification

  
	
  Exhibit N

  	
  -

  	
  Form of Lease
  Information Summary

  
	
  Exhibit O

  	
  -

  	
  Form of
  Controlled Account Agreement

  

 

vii

 

LOAN AGREEMENT

 

LOAN AGREEMENT dated as
of August 25, 2005 by Douglas Emmett 1998, LLC, a limited liability company organized
under the laws of the State of Delaware (the “Borrower”); each of the
lenders (including Eurohypo (as hereinafter defined) in its capacity as a
lender) that is a signatory hereto identified under the caption “LENDERS” on
the signature pages hereto and each lender that becomes a “Lender” after the
date hereof pursuant to Section 14.07(b) (individually, a “Lender”
and, collectively, the “Lenders”); and EUROHYPO AG, NEW YORK BRANCH, as
agent for the Lenders (in such capacity, together with its successors in such
capacity, the “Administrative Agent”).

 

RECITALS:

 

A.            The Borrower is the fee owner of those certain office
buildings listed in Schedule 1A attached hereto located in the County of
Los Angeles, State of California on certain land more fully described in Schedule
1B attached hereto (each such office building and the rights of the
Borrower with respect to the land on which such office building is located,
together with any air rights and other rights, privileges, easements,
hereditaments and appurtenances thereunto relating or appertaining thereto, all
Improvements thereon, together with all fixtures and equipment required for the
operation thereof, all personal property related to the foregoing and the
rights of the Borrower with respect to all other items described in the
granting clause of the Deed of Trust relating to such office building and
interest in land is referred to as a “Project” and, collectively, the “Projects”).

 

B.            The Projects consist of three (3) improved office
buildings, containing approximately 739,081 square feet (each such Project and
all other improvements constructed on each Project being, individually and
collectively, the “Improvements”).

 

C.            The
Borrower has requested and applied to the Lenders for a loan in the aggregate
principal amount of $150,000,000 in connection with the Projects for the
purposes provided herein.

 

D.            The
Lenders are willing to make such loans on and subject to the terms and
conditions hereinafter set forth.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

 

ARTICLE
I

DEFINITIONS AND ACCOUNTING MATTERS

 

1.01         Certain
Defined Terms. As used herein, the following terms shall have the following
meanings:

 

“555 Barrington” shall mean that certain
residential project currently owned by a wholly-owned Subsidiary of the
Borrower’s Member and located at 555 Barrington Avenue, Los Angeles, California
90049.

 

“Additional Costs” shall have the meaning
assigned to such term in Section 5.01.

 

“Adjusted LIBO Rate” shall mean, for any
Eurodollar Loan for any Interest Period therefor, a rate per annum (expressed
as a percentage and rounded upwards, if necessary, to the nearest 1/10000 of
1%) determined by the Administrative Agent to be equal to a fraction, the
numerator of which is equal to the LIBO Rate for such Eurodollar Loan for such
Interest Period and the denominator of which is equal to (x) 1 minus (y) the Reserve Requirement (if any) for such
Eurodollar Loan for such Interest Period.

 

“Adjusted Net Operating Income” shall mean Net
Operating Income, exclusive of any income from tenants subject to any
proceeding or case under the Bankruptcy Code (except to the extent such income
has been actually received).

 

“Administrative Agent” shall have the meaning
assigned to such term in the preamble.

 

“Administrative Agent’s Account” shall mean the
account maintained by the Administrative Agent and of which the Borrower shall
have been notified, with such bank as may from time to time be specified by the
Administrative Agent.

 

“Administrative Questionnaire” shall mean an administrative
questionnaire in a form supplied by the Administrative Agent.

 

“Advance Date” shall have the meaning assigned
to such term in Section 4.06.

 

“Affiliate” shall mean, with respect to any
Person, another Person that directly or indirectly controls, or is under common
control with, or is controlled by, such Person and, if such Person is an
individual, any member of the immediate family (including parents, spouse,
children and siblings) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, “control” (including, with its correlative meanings, “controlled
by” and “under common control with”) shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any
event, any Person that owns directly or indirectly securities having 10% or
more of the voting power for the election of directors or other governing body of
a publicly traded corporation or 10% or more of the partnership, membership or
other ownership interests of any 

 

2

 

other publicly traded Person (other than as a limited
partner of such other Person) shall be deemed to control such corporation or
other Person.

 

“Aggregate Notional Amount” shall have the
meaning assigned to such term in Section 8.19(a).

 

“Agreement” shall mean this Loan Agreement, as
the same may from time to time hereafter be Modified and in effect from time to
time.

 

“All-in-Rate” shall mean, for any period, an
annual interest rate equal to the weighted average of the following rates: (i)
as to any portions of the Outstanding Principal Amount which are covered by one
or more Hedge Agreements (including any Excess Hedge Agreement for which a
Hedge Agreement Pledge has been executed and delivered to the Administrative
Agent and remains in effect) which are in effect during such period
(collectively, the “Hedged Principal Amount”), an imputed rate equal to
the sum of all interest payments due with respect to such period on the Hedged
Principal Amount, plus all payments due by the Borrower or Other Swap
Pledgor with respect to such period under all Hedge Agreements maintained
pursuant to Section 8.19 (including any Excess Hedge Agreement for which
a Hedge Agreement Pledge has been executed and delivered to the Administrative
Agent and remains in effect), minus all payments due to the Borrower or
Other Swap Pledgor with respect to such period under all Hedge Agreements
maintained pursuant to Section 8.19 (including any Excess Hedge
Agreement for which a Hedge Agreement Pledge has been executed and delivered to
the Administrative Agent and remains in effect) (with all such interest and
other payments to be annualized), divided by the Hedged Principal Amount and
(ii) as to any portion of the Outstanding Principal Amount which is not covered
by any Hedge Agreement (or Excess Hedge Agreement for which a Hedge Agreement
Pledge has been executed and delivered to the Administrative Agent and remains
in effect) during such period, the weighted average annual interest rate
actually payable hereunder on such Loans during such period.  For purposes
of this calculation, the notional amount provided for in any Hedge Agreement (or
Excess Hedge Agreement) in effect during any period shall be deemed to “cover”
a portion of the Outstanding Principal Amount outstanding during such period in
proportion to the amount which the notional amount provided for in such Hedge
Agreement (or Excess Hedge Agreement) bears to the entire Outstanding Principal
Amount outstanding during such period.  If this Agreement requires the calculation
of the “All-in-Rate” based upon any monthly or quarterly periods, and the
period during which any Hedge Agreement (or Excess Hedge Agreement) covering
any portion of the Outstanding Principal Amount is in effect is less than the
entirety of the relevant month or quarter, the calculation required under this
definition shall be made separately with respect to the different periods
during such month or quarter during which such portion of the Outstanding
Principal Amount is covered by such Hedge Agreement (or Excess Hedge Agreement),
and such calculations shall be aggregated, on a weighted average basis, for the
relevant period of one month or quarter.

 

“Allocated Loan Amount” shall mean, solely for
the purposes of performing certain calculations hereunder: for any Project, the
portion of the Loans allocated to such Project in Schedule 1.01(1)
attached hereto. The Allocated Loan Amount of a Project suffering a Casualty
Event or a Taking shall be reduced by the amount of any Net Proceeds
attributable to 

 

3

 

such Project applied by the Administrative Agent in prepayment of the
Outstanding Principal Amount pursuant to Section 2.07.

 

“Annual Budget” shall have the meaning assigned
to such term in Section 8.16(a).

 

“Anti-Terrorism Order” shall mean Executive
Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President of the
United States of America (Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism).

 

“Applicable Law” shall mean any statute, law
(including Environmental Laws), regulation, ordinance, rule, judgment, rule of
common law, order, decree, Government Approval, approval, concession, grant,
franchise, license, agreement, directive, guideline, policy, requirement, or
other governmental restriction or any similar form of decision of, or
determination by, or any interpretation or administration of any of the
foregoing by, any Governmental Authority, whether now or hereinafter in effect
and, in each case, as amended (including any thereof pertaining to land use,
zoning and building ordinances and codes).

 

“Applicable Lending Office” shall mean, for
each Lender and for each Type of Loan, the “Lending Office” of such Lender (or
of an Affiliate of such Lender) designated for such Type of Loan on Schedule
1.01(2) or such other office of such Lender (or of an Affiliate of such
Lender) as such Lender may from time to time specify to the Administrative
Agent and the Borrower as the office by which its Loans of such Type are to be
made and maintained.

 

“Applicable Margin” shall mean (a) with
respect to that portion of the Loan evidenced by Note A, the Note A
Applicable Margin, (b) with respect to that portion of the Loan evidenced
by Note B, the Note B Applicable Margin and (c) with respect to that
portion of the Loan evidenced by Note C, the Note C Applicable Margin.

 

“Appraisal” shall mean an appraisal of each
Project prepared by an Appraiser, each such Appraisal must comply in all
respects with the standards for real estate appraisal established pursuant to
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989, as amended, and otherwise in form and substance satisfactory to the
Administrative Agent.

 

“Appraised Value” shall mean, for any Project,
the appraised value indicated as such for that Project in Schedule 1.01(3)
attached hereto, as determined by the Appraisal.

 

“Appraiser” shall mean CB Richard Ellis and/or
KTR Newmark, or any other “state certified general appraiser” as such term is
defined and construed under applicable regulations and guidelines issued
pursuant to Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended, which appraiser must have been licensed
and certified by the applicable Governmental Authority having jurisdiction in
the State of California, and which appraiser shall have been selected by the
Administrative Agent.

 

“Approved Annual Budget” shall have the meaning
assigned to such term in Section 8.16(a).

 

4

 

“Approved Capital Expenditures” shall have the
meaning assigned to such term in Section 11.01(b).

 

“Approved Fund” shall mean any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business (and which is not engaged in the business of acquiring direct
or indirect ownership interests in commercial real estate projects) and that is
administered or managed by (a) a Lender, or (b) a Person that meets
the requirements in clauses (i), (ii), (iii) or (iv)
of the definition of “Eligible Assignee.”

 

“Approved Lease” shall mean (a) each
existing Lease as of the Closing Date as set forth in the Leasing Affidavit and
(b) each Lease entered into after the Closing Date in accordance with the
terms and conditions contained in Section 9.09 as such leases and
related documents shall be Modified as permitted pursuant to the terms of this
Agreement.

 

“Approved Leasing Expenditures” shall have the
meaning assigned to such term in Section 11.01(b).

 

“Arranger” shall mean EUROHYPO AG, NEW YORK
BRANCH as lead arranger and joint bookrunner of the lending syndicate.

 

“Assignment and Assumption” shall mean an
Assignment and Assumption, duly executed by the parties thereto, in
substantially the form of Exhibit A attached hereto and, if required
pursuant to Section 14.07(b) consented to by the Borrower and the
Administrative Agent.

 

“Authorized Officer” shall mean, with respect
to the Borrower or the Borrower’s Member, any of the individual officers
serving as the President, Vice President, Chief Financial Officer, Secretary,
Treasurer or Assistant Treasurer of Borrower’s Manager, in its respective capacity
as the manager of Borrower or the sole general partner of Borrower’s Member,
and whose name appears on a certificate of incumbency executed by the Secretary
of Borrower’s Manager, in its respective capacity as the manager of Borrower and/or
the sole general partner of Borrower’s Member, and delivered concurrently with
the execution of this Agreement, as such certificate of incumbency may be
amended from time to time to identify the names of the individuals then holding
such offices and certified by the Secretary of Borrower’s Manager, in its respective
capacity as the manager of Borrower or the sole general partner of Borrower’s
Member.

 

“Bankruptcy Code” shall mean the Federal
Bankruptcy Code of 1978, as amended from time to time.

 

“Bankruptcy Party” shall mean any of the
Borrower Parties (including, in the case of a Borrower Party which is a Qualified
Successor Entity consisting of a Permitted Private REIT Subsidiary of a
Permitted Private REIT, such Permitted Private REIT, its Operating Partnership
and any Permitted Private REIT Subsidiary that holds direct or indirect
interests in the Borrower). Following a Permitted Public REIT Transfer, “Bankruptcy
Party” shall mean any of the Borrower Parties while such Person qualifies as a “Borrower
Party” under the definition of such term, the Permitted Public REIT, its Operating
Partnership, and any Permitted Public REIT 

 

5

 

Subsidiary that holds direct or indirect interests in and controls the
Borrower. “Bankruptcy Party” shall also mean any Subsidiary of the Borrower
while such Person remains a Subsidiary of the Borrower, other than an
Immaterial Subsidiary.

 

“Base Rate” shall mean, for any day, a rate per
annum equal to the Federal Funds Rate for such day. Each change in any interest
rate provided for herein based upon the Base Rate resulting from a change in
the Base Rate shall take effect at the time of such change in the Base Rate.

 

“Base Rate Loans” shall mean the portions of
the Outstanding Principal Amount that bear interest at rates based upon the
Base Rate.

 

“Basel Accord” shall mean the proposals for
risk-based capital framework described by the Basel Committee on Banking
Regulations and Supervisory Practices in its paper entitled “International
Convergence of Capital Measurement and Capital Standards” dated July 1988, as
Modified and in effect from time to time.

 

“Borrower” shall mean the Borrower named in the
preamble to this Agreement until such time (if any) as a Qualified Successor
Entity shall acquire all of the Projects and assume the obligations of Borrower
under the Loan Documents and the originally named Borrower shall be released
from its obligations under the Loan Documents, in accordance with Section
9.03(a)(iii), at which time the “Borrower” shall be such Qualified
Successor Entity.

 

“Borrower Party” shall mean each of the
Borrower, the Borrower’s Member and the Borrower’s Manager (and in any event
shall not include any such Person that is not the general partner or manager of
the Qualified Successor Entity). Upon the acquisition of the Projects, but not
of direct or indirect Equity Interests in the Borrower by a Qualified Successor
Entity, “Borrower Party” shall also mean and include such Qualified Successor
Entity and the general partner or manager thereof (except as expressly provided
in this definition) and, unless the Borrower, the Borrower’s Member or the Borrower’s
Manager constitutes the general partner or manager of the Qualified Successor
Entity, shall no longer include the original Borrower, the original Borrower’s
Member or the original Borrower’s Manager (and in any event shall not include
any such Person that is not the general partner or manager of the Qualified
Successor Entity). Upon the acquisition of the Projects, but not of direct or
indirect Equity Interests in the Borrower, by a Qualified Successor Entity that
is a Permitted Public REIT Subsidiary in connection with a Permitted Public
REIT Transfer, “Borrower Party” shall include such Permitted REIT Subsidiary
and its general partner or manager; provided, however, if the general partner
or manager of such Permitted Public REIT Subsidiary is the Permitted Public
REIT or such REIT’s Operating Partnership, “Borrower Party” shall not include
the Permitted Public REIT or such Operating Partnership. Upon the acquisition
of direct or indirect Equity Interests in the Borrower by a Permitted Public
REIT Subsidiary, or by the Operating Partnership of the Permitted Public REIT,
or by the Permitted Public REIT, “Borrower Party” shall include the Borrower
and its general partner or manager, but shall not include such Permitted Public
REIT Subsidiary (unless it is the general partner or manager of the Borrower)
or such Operating Partnership or the Permitted Public REIT (regardless of
whether such Operating Partnership or the Permitted Public REIT is the general
partner or manager of the Borrower).

 

6

 

“Borrower’s Account” shall mean an account
maintained by the Borrower with such bank as may from time to time be specified
by or approved by the Administrative Agent to accept the deposit of funds in
accordance with this Agreement.

 

“Borrower’s Manager” shall mean DERA, in the
capacity of the manager of the Borrower or in the capacity of the sole general
partner of Borrower’s Member, under their respective Organizational Documents, and
its successors thereunder in one or more of such capacities as permitted under
the Loan Documents. Except as may otherwise be expressly provided herein or as
the context may require, each reference herein to Borrower’s Manager shall mean
Borrower’s Manager in both such capacities. It is understood that,
notwithstanding anything to the contrary contained in this Agreement, any
covenants, representations or warranties that are required to be observed under
this Agreement by the “Borrower’s Manager” shall not be required to be observed
by any manager of the Borrower consisting of the Permitted Public REIT or its
Operating Partnership.

 

“Borrower’s Manager’s Limited Indemnity and
Guarantee” shall mean that certain Limited Indemnity and Guarantee in the
form of Exhibit B attached hereto, to be executed, dated and
delivered by Borrower’s Manager to the Administrative Agent (on behalf of the
Lenders) on the Closing Date as the same may be Modified and in effect from
time to time.

 

“Borrower’s Member” shall mean Douglas Emmett
Realty Fund 1998, a California Limited Partnership, as sole member under the
Organizational Documents of Borrower, and its successors thereunder as sole
member of the Borrower as permitted under the Loan Documents. It is understood
that, notwithstanding anything to the contrary contained in this Agreement, any
covenants, representations or warranties that are required to be observed under
this Agreement by the “Borrower’s Member” shall not be required to be observed
by any member of the Borrower consisting of the Permitted Public REIT, its
Operating Partnership or any Permitted Public REIT Subsidiary that is not the
general partner or manager of the Borrower including, without limitation
Douglas Emmett Realty Fund 1998, the Borrower’s Member as of the date hereof,
if it is not the general partner or manager of the Borrower.

 

“Business Day” shall mean any day that is not a
Saturday, Sunday or other day on which commercial banks in New York City (or,
with respect only to payments to be made by the Borrower, in California) are
authorized or required by law to remain closed; provided that, when used
in connection with a borrowing, or Continuation of, a Conversion into, a
payment or prepayment of principal of or interest on, or an Interest Period
for, a Eurodollar Loan, or a notice by the Borrower with respect to any such
borrowing, Continuation, Conversion, payment, prepayment or Interest Period,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

“Business Interruption Insurance” shall mean
rental and/or business income insurance required pursuant to Section
8.05(a)(iii) or otherwise maintained in accordance with this Agreement.

 

“Capital Lease Obligations” shall mean, for any
Person, all obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) property to the extent
such obligations would generally be classified and accounted for as a 

 

7

 

capital lease on a balance sheet of such Person under GAAP, and, for
purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.

 

“Cash Trap Account Security Agreement” shall
mean a Cash Trap Account Security Agreement, among the Borrower, the
Administrative Agent (on behalf of the Lenders) and the Depository Bank, substantially
in the form of Exhibit C attached hereto, and which is established
and maintained in accordance with Section 11.01.

 

“Cash Trap Account” shall have the meaning assigned
to such term in the Cash Trap Account Security Agreement.

 

“Casualty Event” shall mean any loss of or
damage to, any portion of any Project by fire or other casualty.

 

“Change of Control”
shall mean, with respect to any Permitted Public REIT, any event or series of
events by which any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding (i) any person
or group consisting of Named Principals or Related Parties, (ii) any “person”
or “group” which is controlled by one or more Named Principals or Related
Parties, (iii) the Depository Trust Company or its nominees, (iv) any “dealer”
(as defined in the Securities Act of 1933) who acquires securities of the
Permitted Public REIT with a view to, or in connection with, (A) the
distribution of such securities, (B) the resale of such securities in
accordance with the provisions of Rule 144A(d) promulgated under the
Securities Act of 1933 or (C) the resale of such securities in accordance with
the provisions of Rule 904 (promulgated under the Securities Act) applicable to
“Distributors” as defined in Rule 902 (promulgated under the Securities Act), (v) any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership “ of all
securities that such person or group has the right to acquire (such right, an “option
right”), whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of forty percent (40%) or more of the
equity securities of the Permitted Public REIT entitled to vote for members of
the board of directors or equivalent governing body of the Permitted Public REIT
on a fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right).

 

“Closing Date” shall mean the date of this
Agreement, which date shall be the initial funding date of the Loans pursuant
to Section 2.02.

 

“Code” shall mean the Internal Revenue Code of
1986, as amended from time to time.

 

“Commitment” shall mean, as to each Lender, the
obligation of such Lender to make a Loan in a principal amount up to but not
exceeding the amount set opposite the name of such Lender on Schedule
1.01(4) attached hereto under the caption “Commitment” or, in the case of a
Person that becomes a Lender pursuant to an assignment permitted under Section
14.07(b), 

 

8

 

as specified in the respective Assignment and Assumption pursuant to
which such assignment is effected, as such percentage may be modified by any
Assignment and Assumption.

 

“Condemnation Awards” shall mean all
compensation, awards, damages, rights of action and proceeds awarded to the
Borrower by reason of a Taking.

 

“Consumer Price Index” shall mean the “Consumer
Price Index — For all Items” for the Los Angeles-Riverside-Orange County
Consolidated Metropolitan Statistical Area, published monthly in the “Monthly
Labor Review” of the Bureau of Labor Statistics of the United States Department
of Labor. If at any time the Consumer Price Index is no longer available, then
the term “Consumer Price Index” shall be an index selected by the Administrative
Agent which, in the opinion of the Administrative Agent, is comparable to the
Consumer Price Index.

 

“Continue”, “Continuation” and “Continued”
shall refer to the continuation pursuant to Section 2.05 of
(a) a Eurodollar Loan from one Interest Period to the next Interest Period
or (b) Base Rate Loan at the Base Rate.

 

“Controlled Account” shall mean one or more
deposit accounts established by the Administrative Agent (for the benefit of
the Lenders) at a depository bank or financial institution that is acceptable
to the Administrative Agent, and which is established and maintained in
accordance with Section 14.28 hereof.

 

“Controlled Account Agreement” shall have the
meaning assigned to such term in Section 14.28(a)(i).

 

“Controlled Account Collateral” shall have the
meaning assigned to such term in Section 14.28(c)(i).

 

“Convert”, “Conversion” and “Converted”
shall refer to a conversion pursuant to Section 2.05 of one Type of
Loan into another Type of Loan, which may be accompanied by the transfer by a
Lender (at its sole discretion) of a Loan from one Applicable Lending Office to
another.

 

“Debt
Service Coverage Ratio” shall mean, with respect to any period being
measured, the ratio of (a) Adjusted Net Operating Income for such period to (b)
DSCR Debt Service for such period. For purposes of calculating Debt Service
Coverage Ratio pursuant to Section 2.09(a), Adjusted Net Operating
Income and DSCR Debt Service shall be calculated on an annualized basis, and the
Debt Service Coverage Ratio for such purposes shall be as determined by the
Administrative Agent, based upon the quarterly results reflected in the most
recent reports submitted by Borrower pursuant to Section 8.01 (or,
if the most recent report has not been submitted pursuant to such section,
based on such other information as the Administrative Agent shall determine in
its reasonable discretion), which determination shall be conclusive in the
absence of manifest error. For purposes of calculating Debt Service Coverage
Ratio pursuant to Section 10.03(c), Adjusted Net Operating Income and
DSCR Debt Service shall be projected for a period of one year in accordance
with Section 10.03(c)(iv).

 

9

 

“Deed of Trust” shall mean each Deed of Trust,
Assignment of Leases and Rents and Security Agreement and substantially in the
form of Exhibit D attached hereto, to be executed, dated and
delivered by the Borrower to the Administrative Agent (on behalf of the
Lenders) on the Closing Date, securing the obligations identified therein, as
each such deed of trust may be Modified and in effect from time to time.

 

“Default” shall mean an Event of Default or an
event that with notice or lapse of time or both would become an Event of
Default.

 

“Depository Bank” shall mean, at any time, the
depository bank which is party to the Cash Trap Account Security Agreement, the
Project-Level Account Security Agreement or a Controlled Account Agreement.

 

“DERA” shall mean Douglas Emmett Realty
Advisors, a California corporation.

 

“Disbursement Request” shall have the meaning
assigned to such term in Section 11.01(c)(iii).

 

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

 

“Douglas Emmett Realty Funds” shall mean
Douglas Emmett Joint Venture, Douglas Emmett Realty Fund 1995, Douglas Emmett
Realty Fund 1996, Douglas Emmett Realty Fund 1997, Douglas Emmett Realty Fund
1998, Douglas Emmett Realty Fund 2000, Douglas Emmett Realty Fund 2002 and
Douglas Emmett Realty Fund 2005 and their respective Subsidiaries.

 

“DSCR Debt Service” shall mean, for any period,
an amount equal to the payment of interest which would be required under the
Notes delivered by the Borrower based on the Outstanding Principal Amounts of
such Notes as of the end of such period and the All-in-Rate at such time. All
such calculations shall be subject to the approval of the Administrative Agent.
For purposes of Section 10.03, the calculation of DSCR Debt Service
shall be projected for a one year period in accordance with Section
10.03(c)(iv).

 

“Eligible Assignee” means any of (i) a
commercial bank organized under the Laws of the United States, or any state
thereof, and having (x) total assets in excess of $25,000,000,000 and
(y) a combined capital and surplus of at least $1,000,000,000; (ii) a
commercial bank organized under the laws of any other country which is a member
of the Organization of Economic Cooperation and Development (“OECD”), or
a political subdivision of any such country, and having (x) total assets
in excess of $25,000,000,000 and (y) a combined capital and surplus of at
least $1,000,000,000, provided that such bank is acting through a branch
or agency located in the United States or in the country in which it is
organized or another country which is also a member of OECD; (iii) a life
insurance company organized under the Laws of any state of the United States,
or organized under the Laws of any country which is a member of OECD and
licensed as a life insurer by any state within the United States and having
(x) admitted assets of at least $25,000,000,000 and (y) a combined
capital and surplus of at least $1,000,000,000; (iv) any Person described
in Schedule 1.01(5); or (v) an Approved Fund having
(1) total assets of at least $25,000,000,000 and (2) a net worth of
at least $1,000,000,000; provided that any such Person meeting the
requirements of (i) through (v) (or its holding 

 

10

 

company) shall also have a long-term senior unsecured
indebtedness rating of BBB- or better by S&P (if rated by S&P) and Baa3
or better by Moody’s (if rated by Moody’s) at the time an interest in the Loans
is assigned to it.

 

“Environmental Claim” shall mean, with respect
to any Person, any written request for information by a Governmental Authority,
or any written notice, notification, claim, administrative, regulatory or
judicial action, suit, judgment, demand or other written communication by any
Person or Governmental Authority alleging or asserting liability with respect
to the Borrower or the Projects, whether for damages, contribution,
indemnification, cost recovery, compensation, injunctive relief, investigatory,
response, Remediation, damages to natural resources, personal injuries, fines
or penalties arising out of, based on or resulting from (i) the presence, Use
or Release into the environment of any Hazardous Substance originating at or
from, or otherwise affecting, the Projects, (ii) any fact, circumstance,
condition or occurrence forming the basis of any violation, or alleged
violation, of any Environmental Law by the Borrower or otherwise affecting the
health, safety or environmental condition of the Projects or (iii) any alleged
injury or threat of injury to the environment by the Borrower or otherwise
affecting the Projects.

 

“Environmental Indemnity” means that certain
Environmental Indemnity Agreement by the Borrower in favor of the
Administrative Agent and each of the Lenders substantially in the form of Exhibit
E attached hereto, to be executed, dated and delivered to the
Administrative Agent (on behalf of the Lenders) on the Closing Date, as the
same may be Modified and in effect from time to time.

 

“Environmental Laws” shall mean any and all
Applicable Laws relating to the regulation or protection of the environment or
the Release or threatened Release of Hazardous Substances into the indoor or
outdoor environment, including ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata, or otherwise relating to the Use of
Hazardous Substances; provided, however, that solely for purposes
of the Environmental Indemnity, “Environmental Laws” shall not include the
California Environmental Quality Act or statutes, laws, regulations or orders
which relate to zoning or otherwise regulating the permissible uses of land or
permissible structures to be developed thereon.

 

“Environmental Liens” shall have the meaning
assigned thereto in Section 8.11(a).

 

“Environmental Losses” shall mean any losses,
damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities
(including, but not limited to, strict liabilities), obligations, debts,
diminutions in value, fines, penalties, charges, costs of Remediation (whether
or not performed voluntarily), amounts paid in settlement, foreseeable and
unforeseeable consequential damages, litigation costs, reasonable attorneys’
fees and expenses, engineers’ fees, environmental consultants’ fees, and
investigation costs (including, but not limited to, costs for sampling, testing
and analysis of soil, water, air, building materials, and other materials and
substances whether solid, liquid or gas), of whatever kind or nature, and
whether or not incurred in connection with any judicial or administrative
proceedings, actions, claims, suits, judgments or awards relating to Hazardous
Substances, Environmental Claims, Environmental Liens and violation of
Environmental Laws. Notwithstanding the foregoing, “Environmental Losses” shall

 

11

 

not include any loss resulting from diminution in value of any Project suffered
by any Lender if the Lenders shall have been paid in full all amounts payable
by the Borrower under this Agreement and the other Loan Documents to which the
Borrower is a party or shall have otherwise realized all such amounts upon or
prior to foreclosure of the collateral for the Loans; provided, that,
subject to the provisions of Section 8 of the Environmental Indemnity, nothing
contained in this sentence shall limit any claim for a loss (otherwise included
within the term “Environmental Losses” as defined herein) suffered by the
Administrative Agent, any Lender or any Affiliate as a result of a claim for the
diminution in value of the interest of any Person (other than the interest of
the Administrative Agent, any Lender or any Affiliate of the Administrative
Agent or any Lender) in any Project (including the interest of any ground
lessor, tenant, easement holder or other third party, but excluding any Person
who has purchased or acquired the Borrower’s interest in such Project by
foreclosure or deed-in-lieu of foreclosure or any time thereafter) or the diminution
in value of any other property made against the Administrative Agent, any such
Lender or any Affiliate by any other Person as a result of the Administrative
Agent, any Lender or any Affiliate succeeding to the ownership of any Project
through foreclosure or other exercise of remedies (but not as a result of any
contractual obligation incurred by the Administrative Agent, any Lender or any
Affiliate subsequent to or in connection with its acquisition of the ownership
of a Project).

 

“Environmental Reports” shall mean,
collectively, each environmental survey and assessment report prepared for the
Administrative Agent relating to each Project listed on Schedule 1.01(6)
attached hereto; each such environmental report shall include a certification
by the engineer (i) that such engineer has obtained and examined the list
of prior owners, (ii) has made an on-site physical examination of the applicable
Project and (iii) has made a visual observation of the surrounding areas
and has found no evidence of the presence of toxic or Hazardous Substances, or
of past or present Hazardous Substances activities that have not been
remediated or are not subject to an operation and maintenance program. The Administrative
Agent acknowledges receipt of copies of the Environmental Reports.

 

“Equity Interests” means shares of capital
stock, partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership interests in
a Person, and any warrants, options or other rights entitling the holder
thereof to purchase or acquire any such equity interest.

 

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” shall mean any trade or
business (whether or not incorporated) that, together with any Borrower Party,
is treated as a single employer under Section 414(b) or (c) of the Code, or,
solely for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 (b), (c), (m) or (o) of the
Code.

 

“ERISA Event” means (a) any “reportable event”,
as defined in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan which is subject to Title IV of ERISA (other than an event
for which the thirty (30) day notice period is waived); (b) the existence with
respect to any Plan subject to Section 412 of the Code or Section 302 of ERISA of
an “accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of 

 

12

 

ERISA), whether or not waived; (c) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan subject to Section 412 of
the Code or Section 302 of ERISA; (d) the incurrence by a Borrower Party or any
of its ERISA Affiliates of any liability under Title IV of ERISA with respect
to the termination of any Plan which is subject to Title IV of ERISA; (e) the
receipt by any Borrower Party or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans which are subject to Title IV of ERISA or to appoint a trustee to
administer any such Plan; (f) the incurrence by a Borrower Party or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan which is subject to Title IV of ERISA or Multiemployer
Plan; or (g) the receipt by a Borrower Party or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from a Borrower Party or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar Loans” shall mean the portions of
the Outstanding Principal Amount that bear interest based on a “LIBO Rate”.

 

“Eurohypo” shall mean Eurohypo AG, New York
Branch.

 

“Event of Default” shall have the meaning
assigned to such term in Article XII.

 

“Excess Cash” shall mean with respect to any
calendar month, the amount by which the sum of Operating Income actually
received during such calendar month plus amounts actually paid during such
month to or for the account of the Borrower or Other Swap Pledgor by the
counterparty under and pursuant to the Hedge Agreement (but only on account of
any “regular” payments due thereunder (and not on account of any default or
termination thereunder or any obligation to deliver collateral pursuant
thereto)) exceeds the sum of (i) Operating Expenses actually paid during such
month plus (ii) the sum of interest payments on the Loans and other amounts due
and payable under the Loan Documents plus amounts actually paid during such
month by the Borrower or Other Swap Pledgor to the counterparty under and
pursuant to the Hedge Agreement (but only on account of any “regular” payments
due thereunder (and not on account of any default or termination thereunder or
any obligation to deliver collateral pursuant thereto)) in each case, to the
extent actually paid during such month; provided, however, that
for purposes of determining Excess Cash, Operating Expenses shall exclude any
amounts due or accrued for Insurance Premiums, Real Estate Taxes, Approved
Capital Expenditures or Approved Leasing Expenditures, except for amounts
actually paid in cash during the relevant month for Insurance Premiums, Real
Estate Taxes and, if approved in accordance with the provisions of Article
XI, Approved Capital Expenditures or Approved Leasing Expenditures (and the
Borrower may utilize its Operating Income in such month to pay for Insurance
Premiums, Real Estate Taxes and, if approved in accordance with the provisions
of Article XI, Approved Capital Expenditures or Approved Leasing
Expenditures). For the avoidance of doubt, it is understood that the
calculation of Excess Cash for any month shall be based upon the cash method of
accounting notwithstanding references to GAAP or the imputation of any income
or expense item that is not actually received or paid in such month in the
definitions of “Operating Income” and “Operating Expenses.”  Notwithstanding the provisions set forth in
the definition of “Operating Expenses” relating to the treatment of 

 

13

 

reserves specifically required under this Agreement and amounts paid
from such reserves for purposes of that definition, for purposes of the
calculation of Excess Cash, the deposit of sums into any such
specifically-required reserve (but not the expenditure and release of sums from
any such reserve) shall be treated as an expense.

 

“Excess Hedge Agreement” shall have the meaning
assigned to such term in Section 8.19(a).

 

“Excluded Project” shall mean (a) any of the
Residential Properties, (b) any of the Properties owned by the Borrower on the
Closing Date other than the Projects which are identified on Schedule 1A,
(c) any Qualified Real Estate Interest that is acquired after the Closing Date
by the Borrower or by a wholly-owned Subsidiary or Qualified Sub-Tier Entity,
and (d) any Project which has been released from the Liens of the Loan
Documents in accordance with Section 2.09.

 

“Excluded Taxes” shall mean, with respect to
the Administrative Agent and any Lender, or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income
by the United States of America, or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its Applicable Lending Office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 5.07), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office)
or is attributable to such Foreign Lender’s failure to comply with Section 5.06(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation, to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 5.06(a).

 

“Extraordinary Capital or Leasing Expenditures”
shall have the meaning assigned to such term in Section 11.01(b).

 

“Federal Funds Rate” shall mean, for any day,
the weighted average (rounded upwards, if necessary, to the next 1/1000 of 1%)
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day, for the immediately preceding
Business Day) on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average (rounded upwards, if necessary, to the next 1/1000 of
1%) of the quotations for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fee Letter” means that certain letter
agreement, dated as of the date of this Agreement, between the Borrower and the
Administrative Agent with respect to certain fees payable by the Borrower in
connection with the Commitments, as the same may be Modified from time to time.

 

14

 

“Foreign Lender” shall mean any Lender that is
organized under the laws of a jurisdiction other than that in which the
Borrower is located. For purposes of this definition, the United States of
America, each state thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

 

“GAAP” shall mean generally accepted accounting
principles applied on a basis consistent with those that, in accordance with Section 1.02(a)
and, except as otherwise provided in this Agreement, are to be used in making
the calculations for purposes of determining compliance with this Agreement, it
being understood that the annual and quarterly financial statements to be
delivered by the Borrower shall be deemed prepared in accordance with “GAAP”
for purposes of this Agreement notwithstanding that such financial statements
contain adjustments for the market value of the Properties of the Borrower (as
reflected in the auditor’s statement that is contained in the most recent such
annual financial statement provided to the Administrative Agent on or before the
Closing Date) and that the treatment of depreciation charges in such quarterly
financial statements is consistent with the treatment of depreciation charges
in the most recent such quarterly financial statements provided to the
Administrative Agent on or before the Closing Date.

 

“General Assignment” shall mean that certain
Assignment of Contracts and Government Approvals substantially in the form of Exhibit
F attached hereto, to be executed, dated and delivered by the Borrower to
the Administrative Agent (on behalf of the Lenders) on the Closing Date, as the
same may be Modified and in effect from time to time.

 

“Government Approval” shall mean any action,
authorization, consent, approval, license, ruling, permit, tariff, rate,
certification, exemption, filing or registration by or with any Governmental
Authority, including all licenses, permits, allocations, authorizations,
approvals and certificates obtained by or in the name of, or assigned to, the
Borrower and used in connection with the ownership, construction, operation, use
or occupancy of the Projects, including building permits, certificates of
occupancy, zoning and planning approvals, business licenses, licenses to
conduct business, and all such other permits, licenses and rights.

 

“Governmental Authority” shall mean any
governmental department, commission, board, bureau, agency, regulatory
authority, instrumentality, judicial or administrative body, federal, state or
local, foreign or domestic, having jurisdiction over the matter or matters in
question.

 

“Guarantee” shall mean a guarantee, an
endorsement, a contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become contingently liable
under or with respect to, the Indebtedness, other obligations, net worth,
working capital or earnings of any Person, or a guarantee of the payment of
dividends or other distributions upon the stock or equity interests of any
Person, or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for the purpose
of enabling a debtor to make payment of such debtor’s obligations or an
agreement to assure a creditor against loss, and including causing a bank or
other financial institution to issue a letter of credit or other similar
instrument for the benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The terms “Guarantee”
and “Guaranteed” used as a verb shall have a correlative meaning.

 

15

 

“Guaranteed Line of Credit” shall have the meaning set forth in Section 9.04(h).

 

“Guarantor” shall mean the Borrower’s Manager,
in its capacity as the guarantor under the Borrower’s Manager’s Limited
Indemnity and Guarantee.

 

“Guarantor Documents” shall mean the Borrower’s
Manager’s Limited Indemnity and Guarantee.

 

“Hazardous Substance” shall mean, collectively,
(a) any petroleum or petroleum products, flammable materials, explosives,
radioactive materials, asbestos, urea formaldehyde foam insulation, Mold, and
transformers or other equipment that contain polychlorinated biphenyls (“PCB’s”),
(b) any chemicals or other materials or substances that are now or hereafter
become defined as or included in the definition of “hazardous substances”, “hazardous
wastes”, “hazardous materials”, “extremely hazardous wastes”, “restricted
hazardous wastes”, “toxic substances”, “toxic pollutants”, “contaminants”, “pollutants”
or words of similar import under any Environmental Law and (c) any other
chemical or other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.

 

“Hedge Agreement” shall mean any Swap Agreement
or Swap Agreements between the Borrower or Other Swap Pledgor and one or more
financial institutions providing for the transfer or mitigation of interest
risks with respect to the Loans, either generally or under specific
contingencies, as the same may be Modified and in effect from time to time in
accordance with Section 8.19.

 

“Hedge Agreement Pledge” shall mean that
certain Assignment, Pledge and Security Agreement substantially in the form of Exhibit G-1
or G-2, as applicable, attached hereto, to be executed, dated and
delivered by the Borrower or Other Swap Pledgor to the Administrative Agent (on
behalf of the Lenders) in accordance with Section 8.19 and at any
other time the Borrower elects or is required to enter into, or cause to be
delivered, a Hedge Agreement, covering the Borrower’s or Other Swap Pledgor’s right,
title and interest in and to any such Hedge Agreement, as the same may be
Modified and in effect from time to time.

 

“Hedging Termination Date” shall mean the date
which is three (3) months prior to August 1, 2010.

 

“Immaterial Subsidiary” shall mean any
Subsidiary of the Borrower which has incurred no Indebtedness other than (i)
Indebtedness which is non-recourse to such Subsidiary, the Bankruptcy Parties
and the Named Principals (except for “carve-outs” (or Guarantees guarantying
the debtor’s liability with respect to “carve-outs”) for fraud,
misrepresentation, misappropriation and other exceptions-from-non-recourse
customary in the real estate finance industry and not materially more favorable
to such lender than the exceptions-from-non-recourse set forth in the second
sentence of Sections 14.23(a) (and which shall in no event include
any recourse obligation of the Borrower on account of the occurrence with
respect to such Subsidiary or any other Person of any event of the type
described in Sections 12.01(d), (e) or (f) hereof)) and
(ii) Indebtedness which, in the aggregate for all such Immaterial Subsidiaries,
does not exceed ten percent (10%) of the aggregate Indebtedness of the Borrower
and all Subsidiaries of the Borrower.

 

16

 

“Improvements” shall have the meaning assigned
to such term in the Recitals.

 

“Indebtedness” of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments,
(c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional
sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred
purchase price of property or services (excluding current accounts payable
incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others
or performance of obligations, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (j) all
obligations under or in respect of Swap Agreements and (k) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person is not
liable therefor.

 

“Indemnified Parties” shall mean the
Administrative Agent, the Arranger, the Affiliates of the Administrative Agent,
the Arranger, and each Lender and each of the foregoing parties’ respective directors,
officers, employees, attorneys, agents, successors and assigns.

 

“Indemnified Taxes” shall mean Taxes other than
Excluded Taxes.

 

“Information” has the meaning assigned to such
term in Section 14.24.

 

“Insurance Premiums” shall have the meaning assigned
to such term in Section 8.05(b).

 

“Insurance Proceeds” shall mean all insurance
proceeds, damages, claims and rights of action and the right thereto under any
insurance policies relating to the Projects.

 

“Insurance Threshold Amount” shall have the
meaning assigned to such term in Section 10.01(b).

 

“Interest Period” shall mean, at all times following the Stub Interest
Period, with respect to any Eurodollar Loan, each period commencing on
the date such Eurodollar Loan is made or Converted from a Base Rate Loan or (in
the event of a Continuation) the last day of the immediately preceding Interest
Period for such Loan and ending on the numerically corresponding day in the
first, second, third, sixth or (but only if available from all Lenders) twelfth calendar month thereafter, as the
Borrower may select as provided in Section 4.05; provided that, (i) except for the Stub Interest Period, each Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business 

 

17

 

Day of the appropriate subsequent calendar month; (ii) each
Interest Period that would otherwise end on a day that is not a Business Day
shall end on the next succeeding Business Day (or, if such next succeeding
Business Day falls in the next succeeding calendar month, on the immediately
preceding Business Day); (iii) except
for the Stub Interest Period, no Interest Period shall have a duration
of less than one month and, if the Interest Period for any Eurodollar Loan
would otherwise be a shorter period (other
than for the Stub Interest Period), such Loan shall bear interest at the
Base Rate plus the Applicable Margin for Base Rate Loans; (iv) in no event
shall any Interest Period extend beyond the Maturity Date; and (v) there may be
no more than seven (7) separate Interest Periods in respect of Eurodollar Loans
outstanding from each Lender at any one time. The first Interest Period shall be the Stub Interest Period.

 

“Interest Rate Hedge Period” shall have the
meaning assigned to such term in Section 8.19(a).

 

“Investment” shall mean, for any Person:  (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any “short
sale” or any sale of any securities at a time when such securities are not
owned by the Person entering into such sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to, any other
Person (including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person), but excluding any such advance, loan or extension of credit
having a term not exceeding ninety (90) days arising in connection with the
sale of inventory or supplies by such Person in the ordinary course of
business; (c) the entering into of any Guarantee of, or other contingent
obligation with respect to, Indebtedness or other liability of any other Person
and (without duplication) any amount committed to be advanced, lent or extended
to such Person; or (d) the entering into of any Swap Agreement (other than
the Hedge Agreement or any Excess Hedge Agreement).

 

“Lease Approval Package” shall have the meaning
assigned to such term in Section 9.09(b)(iii).

 

“Lease Information Summary” shall have the
meaning assigned to such term in Section 9.09(b)(iii).

 

“Leases” shall mean all leases and other
agreements or arrangements with or assumed by the Borrower as landlord for the
use or occupancy of all or any portion of the Projects, including any signage
thereat, now in effect or hereafter entered into (including lettings,
subleases, licenses, concessions, tenancies and other occupancy agreements with
or assumed by the Borrower as landlord covering or encumbering all or any
portion of the Projects), together with any Guarantees, Modifications of the
same, and all additional remainders, reversions and other rights and estates
appurtenant thereto.

 

“Leasing Affidavit” shall have the meaning
assigned to such term in Section 6.01(p).

 

“Lender” shall have the meaning assigned to
such term in the preamble.

 

18

 

“LIBO Rate” shall mean, for any Interest Period
for any Eurodollar Loan, the rate per annum appearing on Page 3750 of the
Dow Jones Markets Service (Telerate) (or on any successor or substitute page of
such service, or any successor to or substitute for such service, providing
rate quotations comparable to those currently provided on such page of such
service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to Dollar
deposits in the London interbank market) at approximately 11:00 a.m.
London time on the date two (2) Business Days prior to the first day of such
Interest Period as the rate for Dollar deposits having a term comparable to
such Interest Period and in an amount comparable to the amount of the
applicable Eurodollar Loan, provided that if such rate does not appear
on such page as of the date of determination, or if such page shall cease to be
publicly available at such time, or if the information contained on such page,
in the sole judgment of the Administrative Agent shall cease accurately to
reflect the rate offered by leading banks in the London interbank market, the
LIBO Rate shall be based on the rate that appears as of 11:00 a.m. London time
on such date of determination on the LIBO Page of Reuters Screen for Dollar
deposits having a term comparable to such Interest Period and in an amount
comparable to the amount of the applicable Eurodollar Loan. If both of such
pages shall cease to be publicly available as of the time of determination, or
if the information contained on such page, in the sole but reasonable judgment
of the Administrative Agent shall cease accurately to reflect the rate offered
by leading banks in the London interbank market, the LIBO Rate shall be based
on the rate reported by any publicly available source of similar market data
selected by the Administrative Agent that, in its sole but reasonable judgment,
accurately reflects such rate offered by leading banks in the London interbank
market. The LIBO Rate for the Stub
Interest Period shall be 4.4120% per annum.

 

“Lien” shall mean, with respect to any Property
(including the Projects), any mortgage, deed of trust, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such Property. For
purposes of this Agreement and the other Loan Documents, a Person shall be
deemed to own subject to a Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.

 

“Limiting
Regulation” shall mean any law or regulation of any Governmental
Authority, or any interpretation, directive or request under any such law or
regulation (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or Governmental Authority
or monetary authority charged with the interpretation or administration
thereof, or any internal bank policy resulting therefrom (applicable to loans
made in the United States of America) which would or could in any way require a
Lender to have the approval right contained in the last paragraph of Section
9.03.

 

“Loan” and “Loans” shall have the
respective meanings assigned to such terms in Section 2.01 with
reference to the extensions of credit provided to the Borrower hereunder.

 

“Loan Documents” shall mean, collectively, this
Agreement, the Notes, the Security Documents, the Environmental Indemnity, the
Guarantor Documents and each other agreement, instrument or document (excluding
any Hedge Agreement or Excess Hedge Agreement) required to be executed and
delivered in connection with the Loans, together with any Modifications
thereof.

 

19

 

“Loan Transactions” shall have the meaning
assigned to such term in Section 4.04.

 

“Losses” shall have the meaning assigned to
such term in Section 14.04.

 

“Low DSCR Release Event” shall mean, at any
time after the occurrence of a Low DSCR Trigger Event, that the Debt Service
Coverage Ratio shall be at or above 1:20:1.00 for a period of at least two (2)
consecutive calendar quarters.

 

“Low DSCR Trigger Event” shall mean,
at any time prior to the Maturity Date, that the Debt Service Coverage Ratio
measured as of the end of any calendar quarter is less than 1:15:1.00.

 

“Low DSCR Trigger Period” shall mean the period
of time after a Low DSCR Trigger Event until the occurrence of a Low DSCR
Release Event.

 

“LP Claim” shall have the meaning set forth in Section
7.35.

 

“Major Default” shall mean (i) any Event of
Default; (ii) any Default arising from the failure to make any payment on
account of interest to any Lender required under the Loan Documents or any fees
payable to the Administrative Agent under the Fee Letter, in each case on or
before the due date therefor; and (iii) any other Default written notice of
which has been delivered by the Administrative Agent to the Borrower unless, in
the case of this clause (iii), the Borrower has provided written notice to the Administrative Agent, within seven
(7) days after notice of such Default has been delivered to the Borrower, stating
that the Borrower shall
undertake to cure such Default on or prior to the expiration of the applicable
cure period therefor, if any, set forth in the definition of the term “Event of
Default” (and setting forth the steps that the Borrower intends to take in
order to effectuate such cure), and the Administrative Agent shall not have
provided notice to the Borrower within five (5) Business Days after receipt of
such notice from the Borrower, setting forth the Administrative Agent’s
determination, in its reasonable discretion, that the steps set forth in the
notice from the Borrower are not likely to result in the timely cure of such
default. Notwithstanding the foregoing, for purposes of Sections 13.08
and 14.07(b)(i)(A), a Major Default of the type described in clause (ii)
above shall not be deemed to “exist” unless the Borrower has received notice of
such Major Default and has failed to cure such Major Default within five (5)
Business Days.

 

“Major Lease” shall mean one or more Leases to
the same tenant or its Affiliates covering an aggregate of either (i) 20%
of the rentable square footage of any Project or (ii) 30,000 rentable
square feet or more.

 

“Material Adverse Effect” shall mean a material
adverse effect, as determined by the Administrative Agent, in its reasonable
judgment and discretion, on (a) any Project or the business, operations,
financial condition, liabilities or capitalization of the Borrower, (b) the
ability of the Borrower or any other Borrower Party to pay or perform (or cause
to be performed) its respective material obligations under any of the Loan
Documents to which it is a party, including the timely payment of the
principal of or interest on the Loans or other amounts payable in connection
therewith, (c) the Administrative Agent’s Liens in any of the collateral
securing the Loans or the priority of any such Liens, (d) the validity or
enforceability of any of

 

20

 

the Loan Documents or (e) the rights and remedies of the Lenders
and the Administrative Agent under any of the Loan Documents.

 

“Maturity Date” shall mean the earliest of (a)
the Stated Maturity Date or (b) the date as to any Loans on which the
Outstanding Principal Amounts under the Notes evidencing such Loans are
accelerated or automatically become due and payable pursuant to the terms of
the Notes or any other Loan Document.

 

“Maximum Rate” shall have the meaning assigned
to such term in Section 14.25.

 

“Modifications” shall mean any amendments, supplements,
modifications, renewals, replacements, consolidations, severances,
substitutions and extensions thereof from time to time; “Modify”, “Modified”,
or related words shall have meanings correlative thereto.

 

“Mold” shall mean any microbial or fungus contamination
or infestation in any Project of a type which could reasonably be anticipated
(after due inquiry and investigation) to pose a risk to human health or the
environment or could reasonably be anticipated (after due inquiry and
investigation) to negatively impact the value of such Project in any material
respect.

 

“Moody’s” shall mean Moody’s Investors Service,
Inc., or any successor thereto.

 

“Multiemployer Plan” shall mean a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.

 

“Named Principals” shall mean Dan A.
Emmett, Christopher H. Anderson, Kenneth M. Panzer and Jordan L.
Kaplan.

 

“Net Operating Income” shall mean, for any
period, the excess, if any, of Operating Income for such period over Operating
Expenses for such period.

 

“Net Proceeds” shall have the meaning assigned
to such term in Section 10.03(b).

 

“Net Proceeds Deficiency” shall have the
meaning assigned to such term in Section 10.03(h).

 

“Note A” shall mean those certain notes or
note denominated “Note A” dated concurrently with the Loan Agreement,
executed by Borrower to the order of the Lender named therein, in the aggregate
original principal amount of $85,470,085.47, as the same may be Modified from
time to time. Each Note A shall constitute a “Note” for all purposes under
this Agreement and the other Loan Documents.

 

“Note A Applicable Margin” shall mean
(a) for Base Rate Loans, 80 basis points per annum; and (b) for
Eurodollar Loans, 65 basis points per annum.

 

“Note B” shall mean those certain notes or
note denominated “Note B” dated concurrently with the Loan Agreement,
executed by Borrower to the order of the Lender named therein, in the aggregate
original principal amount of $55,982,905.98, as the same may be 

 

21

 

Modified from time to time. Each Note B shall constitute a “Note”
for all purposes under this Agreement and the other Loan Documents.

 

“Note B Applicable Margin” shall mean
(a) for Base Rate Loans, 110 basis points per annum; and (b) for
Eurodollar Loans, 85 basis points per annum.

 

“Note C” shall mean those certain notes or
note denominated “Note C” dated concurrently with the Loan Agreement,
executed by Borrower to the order of the Lender named therein, in the aggregate
original principal amount of $8,547,008.55, as the same may be Modified from
time to time. Each Note C shall constitute a “Note” for all purposes under
this Agreement and the other Loan Documents.

 

“Note C Applicable Margin” shall mean
(a) for Base Rate Loans, 410 basis points per annum; and (b) for
Eurodollar Loans, 285 basis points per annum.

 

“Notes” shall mean, collectively, each Note A,
Note B, Note C and each other promissory note hereafter executed by
the Borrower to the order of any of the Lenders evidencing such Lender’s
respective Commitment and Loans, as such notes may be Modified or substituted
and in effect from time to time. Subject to such modifications thereto as may
be deemed necessary by the Administrative Agent to reflect the Applicable
Margin applicable to such Notes or to denominate any such Note as a Note A,
Note B, Note C or similar reference, and subject to the provisions of
Section 14.30, each of the Notes shall be substantially in the form
of Exhibit H attached hereto.

 

“Obligations” means all obligations,
liabilities and indebtedness of every nature of the Borrower from time to time
owing to the Administrative Agent or any Lender under or in connection with
this Agreement, the Notes or any other Loan Document to which it is a party,
including principal, interest, fees (including fees of counsel), and expenses
whether now or hereafter existing under the Loan Documents to which it is a
party.

 

“OECD” has the meaning assigned to such term in
the definition of “Eligible Assignee”.

 

“OP
Merger Sub” shall have the meaning set forth in Section 14.31.

 

“Operating Expenses” shall mean, for any
period, all expenditures, computed in accordance with GAAP, of whatever kind or
nature relating to the ownership, operation, maintenance, repair or leasing of
the Projects that are incurred on a regular monthly or other periodic basis,
including (a) allocated amounts on account of Insurance Premiums and Real
Estate Taxes, prorated on an annual basis, (b) management fees in an
amount which is the greater of (i) management fees actually paid and
(ii) management fees at an imputed rate of 2.0% of Operating Income for
such period and (c) imputed capital expenditure in an amount equal to a
prorated portion of an annual amount equal to $0.20 per square foot; provided,
however, that Operating Expenses shall not include
(i) depreciation, amortization and other non-cash charges or capital
expenditures (except as provided above), (ii) leasing commissions, tenant
improvement allowances or other expenditures incurred for tenant improvements,
(iii) any deposits to cash reserves (if any) required to be maintained under
the Loan Documents (except if and to the extent any sums are withdrawn
therefrom to pay (and are actually used to pay) expenses which 

 

22

 

otherwise constitute Operating Expenses without duplication), (iv) any
payment or expense for which the Borrower was or is to be reimbursed by any
third party if the receipt of the related reimbursement payment is required to
be excluded in the calculation of Operating Income, (v) any payment payable by
the Borrower or any Other Swap Pledgor under the Hedge Agreement, (vi) any
changes in value of derivative contracts or of the Projects, and (vii) any
principal, interest or other debt service payable with respect to the Loans. Operating
Expenses shall be determined on an annualized basis based on the relevant
quarterly results for purposes of Section 2.09(a), and on a projected
annual basis for purposes of Section 10.03(c)(iv).

 

“Operating Income” shall mean, for any period,
all regular ongoing income, computed in accordance with GAAP (but without
taking into account any treatment of Rent on a straight-line amortization basis
over the term of a lease that would otherwise be required by GAAP), during such
period from the ownership or operation, or otherwise arising in respect, of the
Projects, including (a) all amounts payable to the Borrower by any Person
as Rents under Approved Leases, (b) business interruption proceeds and
rent loss insurance proceeds (except with respect to any Leases that have been
terminated as of the date of computation as a result of any Casualty Event or
Taking) and (c) all other amounts which are included in the Borrower’s
financial statements as operating income of the Projects, including, receipts
from leases and parking agreements, concession fees and charges, other
miscellaneous operating revenues, but excluding any extraordinary income,
including (i) any Condemnation Awards or Insurance Proceeds (other than
business interruption and rent loss proceeds as aforementioned), (ii) any
item of income otherwise includable in Operating Income but paid directly to a
Person other than the Borrower, its representative or its Affiliate (except, in
each case, to the extent the Borrower receives monetary credit for such payment
from the recipient thereof or such item is treated as an income item to the
Borrower, in accordance with GAAP), (iii) security deposits and earnest
money deposits received from tenants until forfeited or applied in accordance
with their Leases, (iv) lease buyout payments made by tenants in
connection with any surrender, cancellation or termination of their Leases,
(v) any disbursements to the Borrower from the Cash Trap Account (it being
understood that nothing set forth in this clause (v) shall prevent the receipt
of funds that have been deposited into the Cash Trap Account from being treated
as Operating Income when received to the extent such receipt otherwise
constitutes Operating Income as provided in the definition thereof), (vi) any
changes in value of derivative contracts or of the Projects, and (vii) any
payment payable to the Borrower or any Other Swap Pledgor under the Hedge
Agreement. Operating Income shall be determined on an annualized basis based on
the relevant quarterly results for purposes of Section 2.09(a), and
on a projected annual basis for purposes of Section 10.03(c).

 

“Operating Partnership” shall mean, with
respect to a Permitted REIT, its affiliated operating partnership
majority-owned and controlled, directly or indirectly, by such Permitted REIT
through which such REIT holds substantially all of its assets.

 

“Organizational Documents” shall mean
(a) for any corporation, the certificate or articles of incorporation, the
bylaws, any certificate of determination or instrument relating to the rights
of preferred shareholders of such corporation, any shareholder rights
agreement, and any amendments thereto, (b) for any limited liability
company, the articles of organization and any certificate relating thereto and
the limited liability company (or operating) agreement of such limited
liability company, and any amendments thereto, and (c) for any partnership
(general or 

 

23

 

limited), the certificate of limited partnership or other certificate
pertaining to such partnership and the partnership agreement of such
partnership (which must be a written agreement), and any amendments thereto.

 

“Other Charges” shall mean all ground rents,
maintenance charges, impositions other than Real Estate Taxes, and any other
charges, including vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Projects, now or hereafter levied or assessed
or imposed against the Projects or any part thereof, other than Excluded Taxes.

 

“Other Swap Pledgor” shall mean
(i) Borrower’s Member, (ii) any Qualified Successor Entity to whom
the Projects are transferred pursuant to Section 9.03(a)(iii),
(iii) any entity that qualifies under clause (I) of the definition of
Qualified Successor Entity, (iv) a Permitted Public REIT, its Operating
Partnership or any Permitted Public REIT Subsidiary and/or (v) a Permitted
Private REIT or any Permitted Private REIT Subsidiary.

 

“Other Taxes” means any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made under any Loan Document
or from the execution, delivery, ownership or enforcement of, or otherwise with
respect to, any Loan Document.

 

“Outstanding Principal Amount” shall mean the outstanding principal amount of the
Loans at any point in time after giving effect to any repayment thereof
pursuant to Sections 2.06, 2.07, 2.09 and 3.01 or
other applicable provisions of this Agreement.

 

“Participant” shall have the meaning assigned
to such term in Section 14.07(c)(i).

 

“Payment Date” shall mean the first Business
Day of each calendar month. The first Payment Date shall be October 1, 2005.

 

“Payor” shall have the meaning assigned to such
term in Section 4.06.

 

“PBGC” shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any successor entity
performing similar functions.

 

“Permitted Investments” shall mean:  (a) direct obligations of the United
States of America, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States of America, or by any agency
thereof, in either case maturing not more than ninety (90) days from the date
of acquisition thereof; (b) certificates of deposit issued by any bank or
trust company organized under the laws of the United States of America or any
state thereof and having capital, surplus and undivided profits of at least
$500,000,000, maturing not more than ninety (90) days from the date of acquisition
thereof; and (c) commercial paper rated A-1 or P-1 or better by S&P or
Moody’s, respectively, maturing not more than ninety (90) days from the date of
acquisition thereof; in each case so long as the same (i) provide for the
payment of principal and interest (and not principal alone or interest alone)
and (ii) are not subject to any contingency regarding the payment of principal
or interest.

 

“Permitted Liens” shall mean for each Project:
(a) any Lien created by the Loan Documents, (b) Liens for Real Estate
Taxes not yet delinquent and Liens for Other Charges 

 

24

 

imposed by any Governmental Authority not yet due or delinquent,
(c) rights of existing and future tenants under Approved Leases as tenants
only, (d) Permitted Title Exceptions that constitute Liens, (e) utility
and other easements entered into by the Borrower in the ordinary course of
business having no adverse impact on the occupation, use, enjoyment, operation,
value or marketability of any Project and approved in advance in writing by the
Administrative Agent in its reasonable discretion, (f) any Lien for the
performance of work or the supply of materials affecting any Project unless the
Borrower fails to discharge such Lien by payment or bonding (in accordance with
statutory bonding requirements the effect of which is to release such Lien from
the affected Project and to limit the Lien claimant’s rights to a recovery on
the bond) on or prior to the date that is the earlier of (i) thirty (30)
days after the date of filing of such Lien and (ii) the date on which the
Project or the Borrower’s interest therein is subject to risk of sale,
forfeiture, termination, cancellation or loss, (g) any Lien consisting of
the rights of a lessor under equipment leases which are entered into in
compliance with Sections 9.02(h) and 9.04(d), and (h) any other
title and survey exceptions (not referred to in clauses (a) through (g) above)
affecting the Projects as the Administrative Agent may approve in advance in writing
and in its sole discretion.

 

“Permitted Private REIT” shall have the meaning
set forth in Section 9.03(a)(iii).

 

“Permitted Private REIT Subsidiary” shall mean any
wholly-owned Subsidiary of a Permitted Private REIT or its Operating Partnership.

 

“Permitted Public REIT” shall mean a REIT, in
which, at the time of the initial public offering of shares therein, at least
two (2) of the Named Principals are senior officers of such REIT.

 

“Permitted Public REIT Subsidiary” shall mean
any wholly-owned Subsidiary of the Permitted Public REIT or its Operating
Partnership.

 

“Permitted Public REIT Transfer” shall mean (a)
a transfer, through one or a series of related transactions, of one hundred
percent (100%) of the direct or indirect Equity Interests in the Borrower or
any Qualified Successor Entity to the Permitted Public REIT, its Operating
Partnership or a Permitted Public REIT Subsidiary in accordance with this
Agreement; provided that the Projects continue to be directly owned by
the Borrower or such Qualified Successor Entity, as the case may be, or (b) a
transfer, in compliance with Section 9.03(a)(iii), of all but not less
than all of the Projects to a Qualified Successor Entity that is a Permitted
Public REIT Subsidiary of the Permitted Public REIT (other than its Operating
Partnership).

 

“Permitted REIT” shall mean a Permitted Private
REIT or the Permitted Public REIT.

 

“Permitted REIT Subsidiary” shall mean a
Permitted Public REIT Subsidiary or a Permitted Private REIT Subsidiary.

 

“Permitted Reorganization” shall have the
meaning set forth in Section 14.31.

 

“Permitted Title Exceptions” shall mean as to
any Project, the outstanding liens, easements, restrictions, security interests
and other exceptions to title set forth in the policy of 

 

25

 

title insurance insuring the lien of the Deed of Trust encumbering such
Project approved by the Administrative Agent.

 

“Person” shall mean any individual,
corporation, company, voluntary association, partnership, limited liability
company, joint venture, trust, unincorporated organization or government (or
any agency, instrumentality or political subdivision thereof).

 

“Plan” shall mean any employee pension benefit
plan (other than a Multiemployer Plan) as defined in Section 3(2) of ERISA, and
in respect of which any Borrower Party or its ERISA Affiliates is (or, if such
plan were terminated, would, if the Plan were subject to Title IV of ERISA,
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

 

“Policy” and “Policies” shall have the
respective meanings assigned to such terms in Section 8.05(b).

 

“Post-Default Rate” shall mean a rate per annum
equal to 5% plus the Base Rate as in effect from time to time plus
the Applicable Margin for Base Rate Loans, provided that, with respect
to principal of a Eurodollar Loan, the “Post-Default Rate” shall be the greater
of (a) 5% plus the interest rate for such Loan as provided in Section 3.02(a)(ii)
and (b) the rate provided for above in this definition; provided, however,
that in no event shall the Post-Default Rate exceed the Maximum Rate.

 

“Primary
Credit Facility” means, with respect to any Permitted REIT, the primary
credit facility under which such Permitted REIT obtains financing for its
general purposes.

 

“Principal Office” shall mean the office of
Eurohypo, located on the date hereof at 1114 Avenue of the Americas, 29th
Floor, New York, New York, or such other office as the Administrative Agent
shall designate upon ten (10) days’ prior notice to the Borrower and the
Lenders.

 

“Principals” shall mean the Named Principals
and any other Person holding ten percent (10%) or more of the shares,
partnership interests, membership interests, or other voting or beneficial
interests in Borrower’s Manager. As of the date hereof, the Named Principals
own all of the shares in Borrower’s Manager.

 

“Project” shall have the meaning assigned to
such term in the Recitals.

 

“Project-Level Account” shall have the meaning
assigned to such term in the Project-Level Account Security Agreement.

 

“Project-Level
Account Security Agreement” shall mean the Project-Level Account Security
Agreement, among the Borrower, the Administrative Agent (on behalf of the
Lenders) and the Depository Bank, substantially in the form of Exhibit I
attached hereto, delivered on the Closing Date, as the same may be Modified and
in effect from time to time.

 

“Property” shall mean any right or interest in
or to property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible.

 

26

 

“Property Condition Report” shall mean,
collectively, those certain property condition reports for each Project
prepared for the Administrative Agent and listed on Schedule 1.01(7)
attached hereto. The Administrative Agent acknowledges receipt of copies of the
foregoing Property Condition Reports.

 

“Property Management Agreement” shall mean,
collectively, (a) each Property Management Agreement between the Borrower and the
Property Manager listed on Schedule 1.01(8) attached hereto and (b) any
other property management and/or leasing agreement entered into with a Property
Manager appointed in accordance with the definition of Property Manager
contained in this Section 1.01, as the same shall be Modified in
accordance with the provisions of this Agreement.

 

“Property Manager” shall mean Douglas, Emmett
and Company or such successor manager and/or leasing agent as shall be
reasonably approved by the Administrative Agent or otherwise permitted without
such approval pursuant to Section 9.15 or Section 14.31.

 

“Property Manager’s Consent” shall mean a
Property Manager’s Consent and Subordination of Property Management Agreement
substantially in the form of Exhibit J attached hereto, to be
executed, dated and delivered by (a) the Property Manager and the Borrower to
the Administrative Agent (on behalf of the Lenders) on the Closing Date and (b)
any other Property Manager to the Administrative Agent (on behalf of the
Lenders) prior to its appointment as Property Manager, as such agreements may
be Modified and in effect from time to time.

 

“Proportionate Share” shall mean, with respect
to each Lender, the percentage set forth opposite such Lender’s name on Schedule
1.01(4) attached hereto under the caption “Proportionate Share” or in the
Assignment and Assumption (in accordance with the terms of this Agreement)
pursuant to which such Lender became a party hereto, in any case, as such
percentage may be Modified in the most recent Assignment and Assumption (in
accordance with the terms of this Agreement) to which such Lender is a party. The
aggregate Proportionate Shares of all Lenders shall equal one hundred percent
(100%).

 

“Proposed Lender” shall have the meaning
assigned to such term in Section 5.07.

 

“Qualified Real Estate Interest” shall mean any
real estate asset of a type and quality, located in markets, consistent with
the Projects or any Residential Property as of the date this Agreement is
entered into or which is otherwise consistent with the investment practices
prior to the date hereof of the Douglas Emmett Realty Funds taken as a whole and
which is acquired after the Closing Date directly by the Borrower or by a
Qualified Sub-Tier Entity.

 

“Qualified Successor Entity” shall have the
meaning set forth in Section 9.03(a)(iii).

 

“Qualified Sub-Tier Entity” means an entity
wholly- or majority-owned and controlled by the Borrower.

 

“Real Estate Taxes” shall mean all real estate
taxes and all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges, 

 

27

 

all charges for utilities and all other public charges whether of a
like kind or different nature, imposed upon or assessed against the Borrower,
the Projects or any part thereof or upon the revenues, rents, issues, income
and profits of the Projects or arising in respect of the occupancy, use or
possession thereof.

 

“Register” shall have the meaning assigned to
such term in Section 14.07(b)(iv).

 

“Regulations A, D, T, U and X” shall mean,
respectively, Regulations A, D, T, U and X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be Modified and in
effect from time to time.

 

“Regulatory Change” shall mean, with respect to
any Lender, any change after the Closing Date in federal, state or foreign law
or regulations (including Regulation D) or the adoption or making after such
date of any interpretation, directive or request applying to a class of banks
including such Lender of or under any federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any Governmental Authority or
monetary authority charged with the interpretation or administration thereof.

 

“REIT” shall mean a real estate investment
trust as defined in Sections 856-860 of the Code.

 

“REIT
Merger Sub 1” shall have the meaning set forth in Section 14.31.

 

“REIT
Merger Sub 2” shall have the meaning set forth in Section 14.31.

 

“Rejecting Lender” shall have the meaning set
forth in Section 9.03(c).

 

“Related Entity” shall mean, as to any Person,
(a) any other Person which directly or indirectly owns 51% or more of the
partnership, membership or other ownership interests of such Person and
directly or indirectly controls such Person; (b) any other Person into
which, or with which, such Person is merged, consolidated or reorganized, or
which is otherwise a successor to such Person by operation of law, or which
acquires all or substantially all of the assets of such Person; (c) any
other Person which is a successor to the business operations of such Person and
engages in substantially the same activities; or (d) any other Person in which a
Person described in clauses (b) and (c) of this definition directly
or indirectly owns 51% or more of the partnership, membership or other
ownership interests of such Person and directly or indirectly controls such
Person. As used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”)
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).

 

“Related Party” shall mean:

 

(i)            any
family member of any Named Principal; or

 

28

 

(ii)           any
trust, corporation, partnership, limited liability company or other entity, in
which any Named Principal and/or such other persons referred to in the
immediately preceding clause (i) have a controlling interest.

 

“Release” shall mean any release, spill,
emission, leaking, pumping, injection, pouring, dumping, deposit, disposal,
discharge, dispersal, leaching, seeping or migration 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.

 

“Remediation” shall mean, without limitation,
any investigation, site monitoring, response, remedial, removal, or corrective
action, any activity to cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance, any actions to prevent, cure or mitigate any
Release of any Hazardous Substance, any action to comply with any Environmental
Laws or with any permits issued pursuant thereto, any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing, laboratory
or other analysis, or evaluation relating to any Hazardous Substances. “Remediate”
shall have a correlative meaning.

 

“Rents” means all rents (whether denoted as
base rent, advance rent, minimum rent, percentage rent, additional rent or
otherwise), issues, income, royalties, profits, revenues, proceeds, bonuses,
deposits (whether denoted as security deposits or otherwise), termination fees,
rejection damages, buy-out fees and any other fees made or to be made in lieu
of rent to the Borrower, any award made hereafter to the Borrower in any court
proceeding involving any tenant, lessee, licensee or concessionaire under any
of the Leases in any bankruptcy, insolvency or reorganization proceedings in
any state or federal court, and all other payments, rights and benefits of
whatever nature from time to time due to the Borrower under the Leases
(including any Leases with respect to signage), including (i) rights to
payment earned under the Leases, (ii) any payments or rights to payment
with respect to parking facilities or other facilities in any way contained
within or associated with the Projects, and (iii) all other income,
consideration, issues, accounts, profits or benefits of any nature arising from
the possession, use and operation of the Projects.

 

“Requesting Lender” shall have the meaning
assigned to such term in Section 5.07.

 

“Required Lenders” shall mean Lenders holding
at least 66.67% of the Outstanding Principal Amount.

 

“Required Payment” shall have the meaning
assigned to such term in Section 4.06.

 

“Reserve Requirement” shall mean, for any
Interest Period for any Eurodollar Loan, the average maximum rate at which
reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against “Eurocurrency liabilities” (as such term
is used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall include any other reserves required to be maintained
by such member banks by reason of any Regulatory Change 

 

29

 

with respect to (i) any category of liabilities that includes
deposits by reference to which the LIBO Rate is to be determined as provided in
the definition of “LIBO Rate” in this Section 1.01 or (ii) any
category of extensions of credit or other assets that includes Eurodollar
Loans.

 

“Residential Properties” shall mean 555 Barrington
and Santa Monica Shores.

 

“Restoration” shall have the meaning assigned
to such term in Section 10.01(a).

 

“Restoration Consultant” shall have the meaning
assigned to such term in Section 10.03(e).

 

“Restoration Retainage” shall have the meaning
assigned to such term in Section 10.03(f).

 

“Restricted Payment” shall mean all
distributions of the Borrower or the Borrower’s Member (in cash, Property or
other obligations) on, or other payments or distributions on account of (or the
setting apart of money for a sinking or other analogous fund for) the purchase,
redemption, retirement or other acquisition of, any portion of any Equity
Interest in the Borrower or the Borrower’s Member or of any warrants, options
or other rights to acquire any such Equity Interest.

 

“Rollover
Breakage Costs” shall have the meaning assigned to such term in Section
2.08.

 

“Santa Monica Shores” shall mean that certain
residential project currently owned by a wholly-owned Subsidiary of the
Borrower’s Member and located at 2700 Nielson Way, Santa Monica, California
90405.

 

“Security Accounts” shall mean, collectively,
the Cash Trap Account, the Project-Level Account and any Controlled Account.

 

“Security Documents” shall mean, collectively,
the Deed of Trust, the Hedge Agreement Pledge, the Cash Trap Account Security
Agreement, the Project-Level Account Security Agreement, the Controlled Account
Agreement, the General Assignment and such other security documents as the
Administrative Agent may reasonably request and all Uniform Commercial Code
financing statements required by this Agreement, the Deed of Trust, the Hedge
Agreement Pledge, the Cash Trap Account Security Agreement, the Project-Level
Account Security Agreement, the Controlled Account Agreement, the General
Assignment or any other security document the Administrative Agent may
reasonably request to be filed with respect to the applicable security
interests.

 

“Significant Casualty Event” shall have the
meaning assigned to such term in Section 10.01(b).

 

“SNDA Agreement” shall mean (i) the form of
Subordination, Non-Disturbance, and Attornment Agreement attached hereto as Exhibit
K, (ii) any form attached to a Major Lease currently in effect or which has
been approved by the Administrative Agent pursuant to the terms 

 

30

 

of this Agreement or (iii) such other form as is reasonably
satisfactory to the Administrative Agent.

 

“Solvent” shall mean, when used with respect to
any Person, that at the time of determination: (i) the fair saleable value of
its assets is in excess of the total amount of its liabilities (including
contingent liabilities); (ii) the present fair saleable value of its assets is
greater than its probable liability on its existing debts as such debts become
absolute and matured; (iii) it is then able and expects to be able to pay its
debts (including contingent debts and other commitments) as they mature; and
(iv) it has capital sufficient to carry on its business as conducted and as
proposed to be conducted.

 

“S&P” shall mean Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc., or any
successor thereto.

 

“Stated Maturity Date” shall mean the date that
is seven (7) years from the expiration of the Stub Interest Period, subject to Section 2.10.

 

“Stub Interest Period”
shall mean the period commencing on the Closing Date and ending on (but
not including) the first calendar day
of the first month following the Closing Date (or if such day is not a Business
Day, the next Business Day thereafter).

 

“Subsidiary” shall mean, with respect to any
Person, any corporation, limited liability company, partnership or other entity
of which at least a majority of the securities or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions of such
corporation, limited liability company, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, limited liability
company, partnership or other entity shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.

 

“Swap Agreement” means any agreement (whether
one or more) with respect to any swap, forward, future or derivative
transaction or option or similar agreement (including, without limitation, any
cap or collar) involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions. For
purposes hereof, the credit exposure at any time of any Person under a Swap
Agreement to which such Person is a party shall be determined at such time in
accordance with the standard methods of calculating credit exposure under
similar arrangements as reasonably prescribed from time to time by the
Administrative Agent, taking into account (a) potential interest rate
movements, (b) the respective termination provisions, (c) the notional
principal amount and term of such Swap Agreement and (d) any provisions
providing for the netting of amounts payable by and to a Person thereunder (or
simultaneous payments of amounts by and to such Person).

 

“Syndication” shall have the meaning assigned
to such term in Section 14.26.

 

31

 

“Taking” means a taking or voluntary conveyance
during the term hereof of all or part of any Project or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority affecting such project or any portion thereof whether or not the same
shall have actually been commenced.

 

“Taxes” shall mean any and all present or
future taxes, levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.

 

“Third Party Counterparty” shall have the
meaning assigned to such term in Section 8.19(a).

 

“Third Party Hedge Agreement” shall have the
meaning assigned to such term in Section 8.19(c).

 

“Title Company” shall mean Chicago Title
Insurance Company and any one or more reinsurers identified on Schedule
1.01(9) attached hereto; provided, however, that (i) in no
event shall the amount insured by any such title insurer exceed the limits
shown on Schedule 1.01(9) and (ii) any reinsurance shall be subject to
direct access agreements from such reinsurers.

 

“Title Policy” shall have the meaning assigned
to such term in Section 6.01(k).

 

“Trading with the Enemy Act” shall mean 50
U.S.C. App. 1 et seq.

 

“Transactions” shall mean, collectively,
(a) the execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents to which it is a party, the borrowing of
their Loans and the use of the proceeds thereof and (b) the execution,
delivery and performance by the other Borrower Parties of the other Loan
Documents to which they are a party and the performance of their obligations
thereunder.

 

“Transfer” shall mean any transfer, sale,
assignment, mortgage, encumbrance, pledge or conveyance, whether voluntary or
involuntary.

 

“Type” shall have the meaning assigned to such
term in Section 1.03.

 

“Uniform Commercial Code” shall mean the Uniform
Commercial Code of the State of California, except with respect to those
circumstances in which the Uniform Commercial Code of the State of California
shall require the application of the Uniform Commercial Code of another state,
in which case, for purposes of such circumstances, the “Uniform Commercial Code”
shall mean the Uniform Commercial Code of such other state.

 

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

 

“Withdrawal Liability” means liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan.

 

32

 

1.02         Accounting
Terms and Determinations.

 

(a)           Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time.

 

(b)           Without
first obtaining the Administrative Agent’s consent, the Borrower will not change
the last day of its fiscal year from December 31, or the last days of the first
three fiscal quarters in each of its fiscal years.

 

1.03         Types
of Loans. Loans hereunder are distinguished by “Type”. The “Type” of a Loan
refers to whether such Loan is a Base Rate Loan or a Eurodollar Loan, each of
which constitutes a Type.

 

1.04         Terms
Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time Modified
(subject to any restrictions on such Modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder,”
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights and (f) whenever this Agreement provides that any consent
or approval will not be “unreasonably withheld” or words of like import, the
same shall be deemed to include within its meaning that such consent or
approval will not be unreasonably delayed or conditioned.

 

ARTICLE
II

COMMITMENTS, LOANS, NOTES AND PREPAYMENTS

 

2.01         Loans.
Each Lender severally agrees, on the terms and conditions of this Agreement, to
make a loan (each such loan being a “Loan” and collectively, the “Loans”)
on a non-revolving basis to the Borrower in Dollars on the Closing Date in a
principal amount up to but not exceeding the amount of the Commitment of such
Lender. Thereafter the Borrower may Convert all or a portion of the Outstanding
Principal Amount of one Type of Loan into another Type of Loan (as provided in Section 2.05)
or Continue one Type of Loan as the same Type of Loan (as provided in Section 2.05),
subject in all cases to the limit on the number of Interest Periods that may be
outstanding at any one time as set forth in the definition of “Interest Period”.

 

33

 

2.02         Funding
of Loans. On the Closing Date, each Lender shall make available from its
Applicable Lending Office the amount of the Loan to be made by it on such date
to the Administrative Agent as specified by the Administrative Agent, in
immediately available funds, for account of the Borrower. The amount so
received by the Administrative Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Borrower in immediately available
funds, for the uses and purposes identified on a sources and uses statement
approved by the Administrative Agent and the Borrower.

 

2.03         Several
Obligations. The failure of any Lender to make any Loan to be made by it on
the date specified therefor shall not relieve any other Lender of its obligation
to make its Loan on such date, but neither any Lender nor the Administrative
Agent shall be responsible for the failure of any other Lender to make a Loan
to be made by such other Lender. The amounts payable by the Borrower at any
time hereunder and under the Note to each Lender shall be a separate and
independent debt. It is understood and agreed that the Closing hereunder shall
not occur unless each of the Lenders shall have funded the amount of the Loan
to be made by it.

 

2.04         Notes.

 

(a)           Notes.
The Loan made by each Lender shall be evidenced by its Note.

 

(b)           Substitution,
Exchange and Subdivision of Notes. No Lender shall be entitled to have its
Note substituted or exchanged for any reason, or subdivided for promissory
notes of lesser denominations, except (i) in connection with a permitted
assignment of all or any portion of such Lender’s Commitment, Loan and Note
pursuant, and subject to the terms and conditions of, Section 14.07(b)
(and, if requested by any Lender in connection with such permitted assignment,
the Borrower agrees to so exchange any such Note provided the original Note
subject to such exchange has been delivered to the Borrower) or (ii) as
provided in Section 14.30 with respect to severance of Notes if elected
by Eurohypo, provided the original Note severed, split, divided or otherwise
replaced pursuant to Section 14.30 has been delivered to the Borrower.

 

(c)           Loss,
Theft, Destruction or Mutilation of Notes. In the event of the loss, theft
or destruction of any Note, upon the Borrower’s receipt of a reasonably
satisfactory indemnification agreement executed in favor of the Borrower by the
holder of such Note, or in the event of the mutilation of any Note, upon the
surrender of such mutilated Note by the holder thereof to the Borrower, the
Borrower shall execute and deliver to such holder a replacement Note in lieu of
the lost, stolen, destroyed or mutilated Note.

 

2.05         Conversions
or Continuations of Loans.

 

(a)           Subject
to Section 4.04, the Borrower shall have the right to Convert Loans
of one Type into Loans of another Type or Continue Loans of one Type as Loans
of the same Type, at any time or from time to time; provided that:  (i) the Borrower shall give the
Administrative Agent notice of each such Conversion or Continuation as provided
in Section 4.05; (ii) Eurodollar Loans may be Converted only on the
last day of an Interest Period for such Loans unless the Borrower complies with
the terms of Section 5.05 and (iii) subject to 

 

34

 

Sections 5.01(a)
and 5.03, any Conversion or Continuation of Loans shall be pro rata
among the Lenders. Notwithstanding the foregoing, and without limiting the
rights and remedies of the Administrative Agent and the Lenders under Article
XII, in the event that any Event of Default exists, the Administrative
Agent may (and at the request of the Required Lenders shall) suspend the right
of the Borrower to Convert any Loan into a Eurodollar Loan, or to Continue any
Loan as a Eurodollar Loan for so long as such Event of Default exists, in which
event all Loans shall be Converted (on the last day(s) of the respective
Interest Periods therefor) into, or Continued as, as the case may be, Base Rate
Loans. In connection with any such Conversion, a Lender may (at its sole
discretion) transfer a Loan from one Applicable Lending Office to another.

 

(b)           Notwithstanding
anything to the contrary contained in this Agreement, at any time that a Hedge
Agreement is in effect, the Borrower shall have the right to choose only an
Interest Period which is the same as the Interest Rate Hedge Period, provided
that the foregoing shall only apply to a Hedge Agreement that is required by Section
8.19(a) of this Agreement.

 

2.06         Prepayment.

 

(a)           Prepayment
of the Loans. Upon not less than ten (10) days’ prior written notice to the
Administrative Agent, the Borrower may prepay the Loans, in whole or in part,
in minimum increments of One Million Dollars ($1,000,000) except as otherwise
provided by Section 2.06(c), subject to the following:

 

(i)            any such prepayment shall be
accompanied by the amount of interest theretofore accrued but unpaid in respect
of the principal amount so prepaid, in accordance with Section 2.08;

 

(ii)           except as provided below, any such
prepayment (except as a result of a Casualty Event or Taking or any prepayment
made pursuant to Section 10.03(j) or Section 14.25)) shall
be accompanied by a prepayment premium equal to the following percentage of the
principal amount so prepaid:

 

	
  If the prepayment occurs during the

  following period:

  	
   

  	
  The percentage is as follows:

  
	
  During the
  period from the Closing Date to and including the date which occurs six (6)
  months after the Closing Date

  	
   

  	
  1.00%

  
	
   

  	
   

  	
   

  
	
  During the
  period from the day immediately following the date which occurs six (6)
  months after the Closing Date to and including the date which occurs twelve
  (12) months after the Closing Date

  	
   

  	
  0.50%

  
	
   

  	
   

  	
   

  
	
  Thereafter

  	
   

  	
  0.00%

  

 

35

 

and

 

(iii)          such prepayment shall be accompanied
by any amounts payable to a Lender pursuant to Section 5.05 as a
result of such prepayment while a Eurodollar Loan is in effect, in accordance
with Section 2.08.

 

If the Loans are paid or
prepaid in whole or in part for any reason (including acceleration of the Loans
or because the Loans automatically become due and payable in accordance with Section
12.02(a)), other than by a Casualty Event or Taking or any prepayment made
pursuant to Section 10.03(j) or Section 14.25) at any time,
the Borrower shall pay to the Administrative Agent (on behalf of the Lenders)
the amount(s) described in clauses (i), (ii), as applicable, and (iii),
of the immediately preceding sentence. Notwithstanding the foregoing, no
prepayment premium pursuant to clause (ii) of Section 2.06(a)
shall be payable in connection with any prepayment of principal made other than
pursuant to Section 2.09(a), if such prepayment, when aggregated with
all past prepayments made other than pursuant to Section 2.09(a), would
not exceed $37,500,000.

 

(b)           Treatment
of Prepayments. Except for any mandatory prepayment made pursuant to Section
2.07 and any prepayment made under Sections 2.06(c) and 2.09,
and notwithstanding when such prepayment is made, each partial prepayment of
the Loans shall be deemed to reduce the Allocated Loan Amounts pro-rata in
accordance with the Allocated Loan Amount for each Project.

 

(c)           Prepayment
Upon Release of Projects. Notwithstanding anything to the contrary
contained in this Section 2.06, any prepayment made in connection
with the release in accordance with the terms contained in Section 2.09
of any one or more of the Projects may be made at any time upon not less than
ten (10) days’ prior written notice to the Administrative Agent, and without
reference to the minimum One Million Dollars ($1,000,000) increment
requirements of Section 2.06(a), but subject to payment of any
applicable prepayment premium under clause (ii) of Section 2.06(a)
and compliance with the provisions set forth in clause (iii) of Section 2.06(a)
above, and the applicable provisions set forth in Section 2.09.

 

(d)           Acknowledgments
Regarding Prepayment Premium. The prepayment premiums required by this Section 2.06
are acknowledged by the Borrower to be partial compensation to the Lenders for
the costs of reinvesting the proceeds of the Loans and for the loss of the
contracted rate of return on the Loans and shall be due in accordance with the
terms of this Section 2.06 upon any prepayment of the Loans, including
any prepayment occurring after an acceleration resulting from a violation of
the provisions restricting Transfers set forth in this Agreement. Furthermore,
the Borrower acknowledges that the loss that may be sustained by the Lenders as
a result of such a prepayment by the Borrower is not susceptible of precise
calculation, and the prepayment premium represents the good faith effort of the
Borrower and the Lenders to compensate the Lenders for such loss and the
parties’ reasonable estimate of such loss, and is not a penalty. By initialing
this provision where indicated below, the Borrower waives any rights it may
have under California Civil Code Section 2954.10, or any successor
statute, and the Borrower confirms that the Lenders’ agreement to make the
Loans at the interest rate and on the other terms set forth herein constitutes
adequate and valuable consideration, 

 

36

 

given individual weight
by the Borrower, for the prepayment provisions set forth in this Section 2.06.

 

	
   

  	
   

  
	
  Borrower’s Initials

  

 

2.07         Mandatory
Prepayments. If a Casualty Event or Taking shall occur with respect to any
Project, the Borrower, upon the Borrower’s or the Administrative Agent’s
receipt of the applicable Insurance Proceeds or Condemnation Awards, shall
prepay the Loan, if required by the provisions of Article X, on the
dates and in the amounts specified therein without premium (but subject to the
provisions of Sections 2.08 and 5.05) or, at the instruction of
the Borrower (provided no Event of Default is then continuing), shall be held
in a Controlled Account by the Administrative Agent and applied to prepayment
of the Loan on the next Payment Date (in which case the amount so held shall
continue to bear interest at the rate(s) provided in this Agreement until so
applied to prepay the Loan). Nothing in this Section 2.07 shall be
deemed to limit any obligation of the Borrower under the Deeds of Trust or any
other Security Document, including any obligation to remit to the Cash Trap
Account, Project-Level Account, or a Controlled Account pursuant to the Deeds
of Trust or any of the other Security Documents the Insurance Proceeds,
Condemnation Awards or other compensation received in respect of any Casualty
Event or Taking.

 

2.08         Interest
and Other Charges on Prepayment. If the Loans are prepaid, in whole or in
part, pursuant to Section 2.06 or 2.07, each such prepayment shall
be made together with (a) the accrued and unpaid interest on the principal
amount prepaid, and (b) any amounts payable to a Lender pursuant to Section
5.05 as a result of such prepayment while an Adjusted LIBO Rate is in
effect (provided the Borrower is notified of such amount or an estimate
thereof), including, without limitation, any such amounts that may result from
a prepayment other than on the last day of an Interest Period for a Eurodollar
Loan the Interest Period of which has been automatically Continued pursuant to Section
4.05 during any period on which a prepayment date has been postponed in
accordance with the provisions set forth below in this Section 2.08; provided,
however, that any such prepayment shall be applied first, to the
prepayment of any portions of the Outstanding Principal Amount that are Base
Rate Loans and, second, to the prepayment of any portions of the
Outstanding Principal Amount that are Eurodollar Loans applying such sums first
to Eurodollar Loans of the shortest maturity so as to minimize Rollover Breakage
Costs (as defined below); provided  further, however, that
if an Event of Default exists, the Administrative Agent may distribute such
payment to the Lenders for application in such manner as it or the Required
Lenders, subject to Section 4.02, may determine to be appropriate. Each
prepayment pursuant to Section 2.06 shall be made on the prepayment date
specified in the notice of prepayment delivered pursuant to Section 4.05,
unless such notice is revoked (or the date of prepayment is postponed) by a
further written notice (which may be delivered by the Borrower by facsimile to
the Administrative Agent).
Any notice
revoking a notice of prepayment (or postponing a previously-specified
prepayment date) shall be delivered not less than one (1) Business Day prior to
the date of prepayment specified in the notice of prepayment; provided, however,
in the event that the Borrower revokes or postpones such notice during the last
three (3) Business Days of any Interest Period for a Eurodollar Loan, and
provided that the Borrower has not elected to Convert such Eurodollar Loan into
a Base Rate Loan pursuant to 

 

37

 

Section 2.05, the Borrower
acknowledges that losses, costs and expenses for which the Borrower is
responsible pursuant to Section 5.05(b) shall include, without
limitation, losses, costs and expenses that may subsequently result from the
early repayment, termination, cancellation or failure of the Borrower to borrow
any Eurodollar Loan that was to have been automatically continued pursuant to Section
4.05 (“Rollover Breakage Costs”).

 

2.09         Release
of Projects. Except as set forth in this Section 2.09, or
unless the Obligations have been paid in full, the Borrower shall have no right
to obtain the release of any Project from the Lien of the Loan Documents, and
no repayment or prepayment of any portion of the Loans shall cause, give rise
to a right to require, or otherwise result in, the release of the Lien of the
Deed of Trust on any Project or any other collateral securing the Loans. Any
release upon payment of the Obligations in full shall be in accordance with the
provisions of the Deeds of Trust governing releases.

 

(a)           Release
of Projects. At any time following the Closing Date, the Borrower on one or
more occasions may obtain, and the Administrative Agent shall take such actions
as are necessary to effectuate pursuant to this Section 2.09(a),
the release of the entirety of any Project from the Lien of the Deeds of Trust
(and related Loan Documents) thereon and the release of the Borrower’s
obligations under the Loan Documents with respect to such Project (other than
those which expressly survive repayment, including, but not limited to, those
set forth in the Environmental Indemnity), upon satisfaction of each of the
following conditions:

 

(i)            The Borrower shall submit to the
Administrative Agent (on behalf of the Lenders), by 3:00 P.M., New York
City time, at least ten (10) days prior to the date of the proposed release,
written notice of its election to obtain such release (which notice shall
include a certification by an Authorized Officer of the Borrower that the proposed
release complies with all of the conditions set forth in this Section 2.09(a)),
together with the form or forms for a release of Lien and related Loan
Documents (or, in the case of a Deed of Trust, a request for reconveyance) for
such Project for execution by the Administrative Agent, which the
Administrative Agent shall execute and deliver to the Borrower for recordation
upon satisfaction of all conditions set forth in this Section 2.09(a).
Such release shall be in a form appropriate in each jurisdiction in which the
applicable Project is located and reasonably satisfactory to the Administrative
Agent and its counsel. Any notice of a proposed release of a Project pursuant
to this Section 2.09(a) may be revoked (or the date proposed for such
release may be postponed) by a further written notice (which may be delivered
by the Borrower by facsimile to the Administrative Agent). Any notice revoking a
proposed release (or postponing the date for a proposed release) shall be
delivered not less than one (1) Business Day prior to the date of such release
specified in the notice of release; provided, however, in the
event that the Borrower revokes or postpones such notice during the last three
(3) Business Days of the Interest Period for any Eurodollar Loan, and provided
that the Borrower has not elected to Convert such Eurodollar Loan into a Base
Rate Loan pursuant to Section 2.05, the Borrower acknowledges that the
losses, costs and expenses for which the Borrower shall be responsible under Section
5.05(b) shall include Rollover Breakage Costs;

 

(ii)           The Borrower shall remit to the
Administrative Agent an amount equal to one hundred ten percent (110%) of the
Allocated Loan Amount for the 

 

38

 

applicable Project (for application to the principal
balance of the Loans), plus any prepayment premium payable in connection with
such prepayment pursuant to clause (ii) of Section 2.06(a).
The minimum One Million Dollar ($1,000,000) increment requirements of Section
2.06(a) shall not apply to a prepayment of the Loans made in accordance
with this Section 2.09(a);

 

(iii)          The Borrower shall pay to the
Administrative Agent all sums, including, but not limited to, interest payments
and principal payments, if any, that are then due and payable under the Notes,
this Agreement, the Deeds of Trust and the other Loan Documents, and all costs
due pursuant to Section 5.05 and clause (viii) of this Section
2.09(a) (it being agreed that accrued interest on the principal amount to
be paid pursuant to clause (ii) of this Section 2.09(a) shall not be due
and payable in connection with such release (unless such accrued interest is
otherwise due and payable), but shall be due and payable on the next Payment
Date);

 

(iv)          [Reserved];

 

(v)           Immediately prior to such release,
the Debt Service Coverage Ratio as calculated for all of the Projects then
securing the Loans other than the Project proposed to be released (and assuming
for purposes of the calculation of the DSCR Debt Service that the principal of
the Loans shall have been reduced by the principal amount payable with respect
to the Project to be released in accordance with clause (ii) of this Section
2.09(a)) shall be equal to or greater than 1.50-to-1.00;

 

(vi)          After giving effect to such release
and the payment of principal required to be made in connection therewith, the
Outstanding Principal Amount of the Loans (unless the Loans shall be repaid in
full) shall not be less than $75,000,000.

 

(vii)         No Default or Event of Default exists
at the time of the Borrower’s request or on the date of the proposed release or
after giving effect thereto (other than a Default or Event of Default that
would be cured by effectuating such release); and

 

(viii)        The Borrower shall pay all costs and
expenses (including, but not limited to, reasonable legal fees and
disbursements, escrow and trustee fees, costs for title insurance endorsements
required by the Administrative Agent to confirm the continued priority of the
Liens in favor of the Lenders on the Projects not being released and other out-of-pocket
costs and expenses) incurred by the Administrative Agent in connection with
such release.

 

It is
understood and agreed that no such release shall impair or otherwise adversely
affect the Liens, security interests and other rights of the Administrative
Agent or the Lenders under the Loan Documents not being released (or as to the
parties to the Loan Documents and Projects subject to the Loan Documents not
being released).

 

(b)           Any
Project released from the Lien of the Deed of Trust and other Loan Documents
pursuant to this Section 2.09 shall, effective upon such release, no
longer be considered a “Project” for purposes of this Agreement or the other
Loan Documents, except for 

 

39

 

purposes of those
indemnification obligations and other covenants which, by their terms,
expressly survive any such release.

 

2.10         Call
Date. Notwithstanding anything to the contrary contained in this Agreement,
(i) the Outstanding Principal Amount under all Notes shall become automatically
due and payable on the fifth (5th) anniversary of the expiration of the Stub
Interest Period if on or prior to such date the Borrower has not paid to the
Administrative Agent in accordance with the Fee Letter for the benefit of the
Lenders an extension fee equal to five (5) basis points (0.05%) times the
Outstanding Principal Amount under all Notes as of the fifth (5th) anniversary
of the expiration of the Stub Interest Period or if on such date an Event of
Default exists and (ii) the Outstanding Principal Amount under all Notes shall
become automatically become due and payable on the sixth (6th) anniversary of
the expiration of the Stub Interest Period if on such date the Borrower has not
paid to the Administrative Agent in accordance with the Fee Letter for the
benefit of the Lenders an extension fee equal to five (5) basis points (0.05%)
times the Outstanding Principal Amount under all Notes as of the sixth (6th)
anniversary of the expiration of the Stub Interest Period or if on such date an
Event of Default exists.

 

ARTICLE
III

PAYMENTS OF PRINCIPAL AND INTEREST

 

3.01         Repayment
of Loans. The Borrower hereby promises to pay to the Administrative Agent
for the account of each Lender the principal amount of such Lender’s
outstanding Loans to the Borrower, together with accrued and unpaid interest,
any applicable fees and all other amounts due under the Loan Documents with
respect to such Loans, which amounts, to the extent not previously paid, shall,
without notice, demand or other action, be due and payable on the Maturity
Date.

 

3.02         Interest.

 

(a)           The
Borrower hereby promises to pay to the Administrative Agent for the account of
each Lender interest on the unpaid principal amount of each Loan (which may be
Base Rate Loans and/or Eurodollar Loans) made by such Lender for the period
from and including the date of such Loan to but excluding the date such Loan
shall be paid in full if paid in the time and manner provided for in Section
4.01, at the following rates per annum:

 

(i)            during such periods as such Loan is
a Base Rate Loan, the Base Rate plus the Applicable Margin; and

 

(ii)           during such periods as such Loan is a
Eurodollar Loan, for each Interest Period relating thereto, the Adjusted LIBO
Rate for such Loan for such Interest Period plus the Applicable Margin.

 

(b)           Accrued
interest on each Loan shall be payable (i) monthly in arrears on each Payment
Date for all interest accrued through but not including the relevant Payment
Date and (ii) in the case of any Loan, upon the payment or prepayment thereof
(except as expressly provided in Section 2.09(a)(iii)) or the
Conversion of such Loan to a Loan of another Type (but 

 

40

 

only on the principal
amount so paid, prepaid or Converted), except that interest payable hereunder
at the Post-Default Rate shall be payable from time to time on demand.

 

(c)           Notwithstanding
anything to the contrary contained herein, after the Maturity Date and during
any period when an Event of Default exists, the Borrower shall pay to the
Administrative Agent for the account of each Lender interest at the applicable
Post-Default Rate on the outstanding principal amount of any Loan made by such
Lender, any interest payments thereon not paid when due and on any other amount
due and payable by the Borrower hereunder, under the Notes and any other Loan
Documents.

 

(d)           Promptly
after the determination of any interest rate provided for herein or any change
therein, the Administrative Agent shall give notice thereof to the Lenders to
which such interest is payable and to the Borrower, but the failure of the
Administrative Agent to provide such notice shall not affect the Borrower’s
obligation for the payment of interest on the Loans.

 

(e)           In
addition to any sums due under this Section 3.02, the Borrower shall pay
to the Administrative Agent for the account of the Lenders a late payment
premium in the amount of four percent (4%) of (i) any payments of
principal under the Loans not made when due, and (ii) any payments of
interest or other sums under the Loans not made when due, provided, in each
case, that such payments are not made within the earlier of (i) two (2)
Business Days after the Borrower receives written notice from the Administrative
Agent of Borrower’s failure to make such payment when due and (ii) five
(5) days after the date the same became due, which late payment premium shall
be due with any such late payment or upon demand by the Administrative Agent. Such
late payment charge represents the reasonable estimate of the Borrower, the
Administrative Agent and the Lenders of a fair average compensation for the
loss that may be sustained by the Lenders due to the failure of the Borrower to
make timely payments. Such late charge shall be paid without prejudice to the
right of the Administrative Agent and the Lenders to collect any other amounts
provided herein or in the other Loan Documents to be paid or to exercise any
other rights or remedies under the Loan Documents.

 

(f)            Reserved.

 

3.03         Project-Level
Account. The Borrower shall, and shall cause the Property Manager to (a)
deposit all Rents from the Projects, and all amounts received by the Borrower
or the Property Manager constituting Rent or other revenue or sums of any kind
from the Projects, into the applicable Project-Level Account for such Project
in accordance with the Project-Level Account Security Agreement and (b) upon an
Event of Default, and upon written request of the Administrative Agent, deliver
irrevocable written instructions to all tenants under Leases to deliver all
Rents payable thereunder directly to the applicable Project-Level Account for
such Project. The Borrower shall not maintain any checking, money market or
other deposit accounts for the deposit and holding of any revenues or sums
derived from the ownership or operation of the Projects other than the
Project-Level Account (except for such replacement or additional deposit
accounts in which the Administrative Agent shall have been granted, pursuant to
a written instrument in form and substance satisfactory to the Administrative
Agent, a first priority security interest on the terms provided herein, in
which case the “Project-Level Account” referred to herein shall include such
replacement or additional account), other than (i) accounts 

 

41

 

into which funds
initially deposited in a Project-Level Account have been, or may be,
transferred in compliance with the Project-Level Account Security Agreement and
(ii) any Cash Trap Account or Controlled Account required hereunder.

 

ARTICLE
IV

PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

 

4.01         Payments.

 

(a)           Payments
by the Borrower. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
under this Agreement, the Notes and any other Loan Document, shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at the Administrative Agent’s
Account, not later than 3:00 p.m., New York City time, on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day).

 

(b)           Application
of Payments. The Borrower may, at the time of making each payment under
this Agreement, any Note or any other Loan Document for the account of any
Lender (if such payment is not comprised solely of interest), specify to the
Administrative Agent (which shall so notify the intended recipient(s) thereof)
the Loans or other amounts to which such payment is to be applied (and in the
event that the Borrower fails to so specify, or if an Event of Default exists,
the Administrative Agent may apply such payment to amounts then due to the
Lenders, subject to Section 4.02, pro rata in accordance with their
Proportionate Share and, thereafter, may apply any remaining portion of such
payment in such manner as it or the Required Lenders, subject to Section 4.02,
may determine to be appropriate). To the extent that the Borrower has the right
pursuant to this Section 4.01(b) to designate the obligations to which a
payment made by the Borrower under the Loan Documents is to be applied, the
Borrower shall exercise such rights in such a manner as shall result in the
application of such payment to the designated obligation in a manner that will
result in each Lender receiving its pro rata share
of the amount so paid by the Borrower on account of the designated obligation in proportion to the
respective amounts then due and payable on account of the designated obligation
to all Lenders entitled to payment of the designated obligation. Notwithstanding
the foregoing and to avoid any potential ambiguity between this provision and Section 2.06,
nothing in the foregoing sentence is intended to modify or supersede Section
2.06.

 

(c)           Payments
Received by the Administrative Agent. Each payment received by the
Administrative Agent under this Agreement, any Note or any other Loan Document
for account of any Lender shall be paid by the Administrative Agent promptly to
such Lender (and in any event, the Administrative Agent shall use commercially
reasonable efforts to pay such sums to such Lender on the same Business Day
such sums are received by the Administrative Agent provided the Administrative
Agent has actually received such sums prior to 3:00 p.m. on such Business Day),
in immediately available funds, for account of such Lender’s Applicable Lending
Office for the Loan or other obligation in respect of which such payment is
made. In the event that the Administrative Agent fails to make such payment to
such Lender within two 

 

42

 

(2) Business Days of
receipt, subject to any delays resulting from force majeure, then such Lender
shall be entitled to interest from the Administrative Agent at the Federal
Funds Rate from the date that such payment should have been paid by the
Administrative Agent to such Lender until the Administrative Agent makes such
payment.

 

(d)           Extension
to Next Business Day. If the due date of any payment under this Agreement
or any Note would otherwise fall on a day that is not a Business Day, such date
shall be extended to the next succeeding Business Day, and interest shall be
payable for any principal so extended for the period of such extension.

 

4.02         Pro
Rata Treatment. Except to the extent otherwise provided herein:  (a) each borrowing from the Lenders
under Section 2.01 shall be made from the Lenders on a pro rata
basis according to the amounts of their respective Commitments; (b) except
as otherwise provided in Section 5.04, Eurodollar Loans having the
same Interest Period shall be allocated pro rata among the Lenders according to
the amounts of their respective Commitments (in the case of the making of
Loans) or their respective Loans (in the case of Conversions and Continuations
of Loans); (c) each payment or prepayment of principal of Loans by the
Borrower shall be made for account of the Lenders on a pro rata basis in
accordance with the respective unpaid principal amounts of the Loans held by
them; and (d) each payment of interest on Loans by the Borrower shall be
made for the account of the Lenders on a pro rata basis in accordance with the amounts
of interest on such Loans then due and payable to the respective Lenders. Notwithstanding
anything to the contrary contained in this Agreement or in any of the other
Loan Documents, (a) all payments received by the Administrative Agent on
account of interest, principal (including, without limitation, prepayments),
fees or other amounts which are required under this Agreement to be paid to the
Lenders pro rata, or in accordance with their respective Proportionate Shares,
shall be paid to the Lenders pro rata in proportion to the respective amounts
of interest, principal, fees or other amounts, as applicable, then due and
payable to all Lenders pursuant to the Loan Documents, and (b) during
the existence of an Event of Default, all payments received by the Administrative
Agent with respect to the Loan shall be applied as provided in that certain Co-Lender
Agreement to be entered into by and among the Lenders and the Administrative
Agent, as the same may be Modified from time to time.

 

4.03         Computations.
Interest on all Loans shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable.

 

4.04         Minimum
Amounts. Except for (a) mandatory prepayments made pursuant to Section 2.07,
8.19(g), 10.03(j) or 14.25 of this Agreement or Section
7.08 of the Deed of Trust, (b) Conversions or prepayments made pursuant to Section 5.04,
and (c) prepayments made pursuant to Section 2.06 or Section
2.09 (which shall be governed by such Sections) each borrowing, Conversion,
Continuation and partial prepayment of principal other than made pursuant to Section 2.09
(collectively, “Loan Transactions”) of Loans shall be in an aggregate
amount at least equal to $1,000,000 (Loan Transactions of or into Loans of
different Types or Interest Periods at the same time hereunder shall be deemed
separate Loan Transactions for purposes of the foregoing, one for each Type or
Interest Period); provided that if any Loans or borrowings would otherwise
be in a lesser principal amount for any period, such Loans shall be Base Rate
Loans during such period. Notwithstanding the foregoing, the minimum amount of

 

43

 

$1,000,000 shall
not apply to Conversions of lesser amounts into a tranche of Loans that has (or
will have upon such Conversion) an aggregate principal amount exceeding such
minimum amount and one Interest Period.

 

4.05         Certain
Notices. Notices by the Borrower to the Administrative Agent regarding Loan
Transactions and the selection of Types of Loans and/or of the duration of
Interest Periods shall be effective only if received by the Administrative
Agent not later than 3:00 PM, New York City time, on the date which is the
number of calendar days or Business Days, as applicable, prior to the date of
the proposed Loan Transaction specified immediately below:

 

	
  Notice

  	
   

  	
  Number of Days Prior

  
	
   

  	
   

  	
   

  
	
  Optional
  Prepayment

  	
   

  	
  10 calendar days

  
	
   

  	
   

  	
   

  
	
  Conversions
  into, Continuations as, or borrowings in Base Rate Loans

  	
   

  	
  3 Business Days

  
	
   

  	
   

  	
   

  
	
  Conversions
  into, Continuations as, borrowings in, or changes in duration of Interest
  Periods for, Eurodollar Loans

  	
   

  	
  3 Business Days (prior
  to first day of next applicable Interest Period for such Conversion Continuation
  or change)

  

 

Notices
of the selection of Types of Loans and/or of the duration of Interest Periods
shall be irrevocable. Each notice of a Loan Transaction shall specify the
amount (subject to Section 4.04), Type, and Interest Period of such
proposed Loan Transaction, and the date (which shall be a Business Day) of such
proposed Loan Transaction. Notices for Conversions and Continuations shall be
in the form of Exhibit L attached hereto. Each such notice
specifying the duration of an Interest Period shall specify the portion of the
Loans to which such Interest Period is to relate. The Administrative Agent
shall promptly notify the Lenders of the contents of each such notice. If the
Borrower fails to select (i) the Type of Loan or (ii) the duration of any
Interest Period for any Eurodollar Loan within the time period (i.e., three (3)
Business Days prior to the first day of the next applicable Interest Period)
and otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will automatically be continued as a
Eurodollar Loan as of the last day of the then current Interest Period for such
Loan, with such Eurodollar Loan having an Interest Period of one month, and the
Borrower shall be deemed to have provided to the Administrative Agent three (3)
Business Days prior to the first day of such Interest Period a duly completed
and unqualified notice requesting such Continuation in the form of Exhibit L.

 

4.06         Non-Receipt
of Funds by the Administrative Agent. Unless the Administrative Agent shall
have been notified by a Lender or the Borrower (each, for purposes of this Section
4.06, a “Payor”) prior to the date on which such Payor is to make
payment to the Administrative Agent of (in the case of a Lender) the proceeds
of a Loan to be made by such Payor hereunder or (in the case of the Borrower) a
payment to the Administrative Agent for the account of one or more of the
Lenders hereunder (such payment being herein called a “Required Payment”),
which notice shall be effective upon receipt, that such Payor does not intend
to make 

 

44

 

such Required
Payment to the Administrative Agent, the Administrative Agent may assume that
such Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if such Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
from the Administrative Agent shall, on demand, repay to the Administrative
Agent the amount so made available together with interest thereon in respect of
each day during the period commencing on the date (the “Advance Date”)
such amount was so made available by the Administrative Agent until the date
the Administrative Agent recovers such amount at a rate per annum equal to (a)
the Federal Funds Rate for such day in the case of payments returned to the
Administrative Agent by any of the Lenders or (b) the applicable interest rate
due hereunder with respect to payments returned by the Borrower to the
Administrative Agent and, if such recipient(s) shall fail to promptly make such
payment, the Administrative Agent shall be entitled to recover such amount, on
demand, from such Payor, together with interest at the same rates as aforesaid;
provided that if neither the recipient(s) nor such Payor shall return
the Required Payment to the Administrative Agent within three (3) Business Days
(five (5) days in the case the Borrower is the Payor) of the Advance Date,
then, retroactively to the Advance Date, such Payor and the recipient(s) shall
each be obligated to pay interest on the Required Payment as follows:

 

(i)            if the Required Payment shall
represent a payment to be made by the Borrower to the Administrative Agent for
the benefit of the Lenders, the Borrower and the recipient(s) shall each be
obligated to pay interest retroactively to the Advance Date in respect of the
Required Payment at the Post-Default Rate (without duplication of the
obligation of the Borrower under Section 3.02 to pay interest on the
Required Payment at the Post-Default Rate), it being understood that the return
by the recipient(s) of the Required Payment to the Administrative Agent shall
not limit such obligation of the Borrower under Section 3.02 to pay
interest at the Post-Default Rate in respect of the Required Payment, and it
being further understood that to the extent the Administrative Agent actually
receives from the Borrower any such interest at the Post-Default Rate on such
Required Payment, such amount so received shall be credited against the amount
of interest (if any) payable by the applicable recipient(s), and

 

(ii)           if the Required Payment shall
represent proceeds of a Loan to be made by the Lenders to the Borrower, such
Payor and the Borrower shall each be obligated retroactively to the Advance
Date to pay interest in respect of the Required Payment pursuant to whichever
of the rates specified in Section 3.02 is applicable to the Type of
such Loan, it being understood that the return by the Borrower of the Required
Payment to the Administrative Agent shall not limit any claim that the Borrower
may have against such Payor in respect of such Required Payment and shall not
relieve such Payor of any obligation it may have hereunder or under any other
Loan Documents to the Borrower and no advance by the Administrative Agent to
the Borrower under this Section 4.06 shall release any Lender of
its obligation to fund such Loan except as set forth in the following sentence.
If any such Lender shall thereafter advance any such Required Payment to the
Administrative Agent, together with interest on such Required Payment as
provided herein, such Required Payment shall be deemed such Lender’s applicable
Loan to the Borrower and shall be advanced by the Administrative Agent to

 

45

 

the Borrower to the extent the Borrower has remitted
the Required Payment and such interest to the Administrative Agent.

 

4.07         Sharing
of Payments, Etc.

 

(a)           Sharing.
If any Lender shall obtain payment of any principal of or interest on any Loan
owing to it or payment of any other amount under this Agreement or any other
Loan Document through the exercise (subject to the provisions of Section
14.10) of any right of set-off, banker’s lien or counterclaim or similar
right or otherwise (other than from the Administrative Agent as provided
herein), and, as a result of such payment, such Lender shall have received a
greater percentage of the principal of or interest on the Loans or such other
amounts then due hereunder or thereunder by the Borrower to such Lender than
the percentage received by any other Lender, it shall promptly purchase from
such other Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Loans or such other amounts,
respectively, owing to such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to time
as shall be equitable, to the end that all the Lenders shall share the benefit
of such excess payment (net of any expenses that may be incurred by such Lender
in obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored. Each
Lender agrees that it shall turn over to the Administrative Agent (for
distribution by the Administrative Agent to the other Lenders in accordance
with the terms of this Agreement) any payment (whether voluntary or involuntary,
through the exercise of any right of setoff or otherwise) on account of the
Loans held by it in excess of its ratable portion of payments on account of the
Loans obtained by all the Lenders.

 

(b)           Consent
by the Borrower. The Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise (subject, as among the Lenders,
to Section 14.10) all rights of set-off, banker’s lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender were
a direct holder of Loans or other amounts (as the case may be) owing to such
Lender in the amount of such participation.

 

(c)           Rights
of Lenders; Bankruptcy. Nothing contained herein shall require any Lender
to exercise any right of set-off, banker’s lien or counterclaim or similar
right or otherwise or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section 4.07 applies, then such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery on
such secured claim.

 

46

 

ARTICLE
V

YIELD PROTECTION, ETC.

 

5.01         Additional
Costs.

 

(a)           Costs
of Making or Maintaining Eurodollar Loans. The Borrower shall pay directly
to each Lender from time to time such amounts as such Lender may determine to
be necessary to compensate such Lender for any costs that such Lender
determines are attributable to its making or maintaining of any Eurodollar
Loans, or its obligation to make any Eurodollar Loans, hereunder, or, subject
to the following provisions of this Article V, any reduction in any
amount receivable by such Lender hereunder in respect of any of such Eurodollar
Loans or such obligation (such increases in costs and reductions in amounts
receivable being herein called “Additional Costs”), provided such
Additional Costs result from any Regulatory Change that:

 

(i)            shall subject any Lender (or its Applicable
Lending Office for any of such Eurodollar Loans) to any tax, duty or other
charge in respect of such Eurodollar Loans or its Note or changes the basis of
taxation of any amounts payable to such Lender under this Agreement or its Note
in respect of any of such Eurodollar Loans (other than Excluded Taxes); or

 

(ii)           imposes or Modifies any reserve,
special deposit or similar requirements (other than the Reserve Requirement
utilized in the determination of the Adjusted LIBO Rate for such Eurodollar Loan)
relating to any extensions of credit or other assets of, or any deposits with
or other liabilities of, any Lender (including any of such Eurodollar Loans or
any deposits referred to in the definition of “LIBO Rate” in Section 1.01),
or any commitment of such Lender (including the Commitment of such Lender
hereunder); or

 

(iii)          imposes any other condition affecting
this Agreement or the Note of any Lender (or any of such extensions of credit
or liabilities) or its Commitment.

 

If any
Lender requests compensation from the Borrower under this Section 5.01(a)
or Section 5.01(b), the Borrower may, by notice to such Lender (with a
copy to the Administrative Agent), suspend the obligation of such Lender
thereafter to make or Continue Eurodollar Loans, or to Convert Base Rate Loans
into Eurodollar Loans, until the Regulatory Change giving rise to such request
ceases to be in effect or until the Borrower notifies such Lender that the
Borrower is lifting such suspension (in which case the provisions of Section 5.04
shall be applicable), provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested for so long as
any Eurodollar Loan remains in effect.

 

(b)           Costs
Attributable to Regulatory Change or Risk-Based Capital Guidelines. Without
limiting the effect of the provisions of this Section 5.01 (but without
duplication), the Borrower shall pay to each Lender from time to time on
request such amounts as such Lender may determine to be necessary to compensate
such Lender (or, without duplication, the bank holding company or other legal
entity of which such Lender is a subsidiary) for any costs that it determines
are attributable to the maintenance of its Eurodollar Loans 

 

47

 

hereunder by such Lender
(or any Applicable Lending Office or such bank holding company or other legal
entity), pursuant to any law or regulation or any interpretation, directive or
request (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) of any Governmental Authority
(i) following any Regulatory Change with respect to such law, regulation,
interpretation, directive or request resulting in such costs or
(ii) implementing any risk-based capital guideline or other requirement of
capital (whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) hereafter issued by any Governmental
Authority implementing at the national level the Basel Accord, in respect of
its Commitment or its Eurodollar Loans (such compensation to include an amount
equal to any reduction of the rate of return on assets or equity of such Lender
(or any Applicable Lending Office or such bank holding company or other legal
entity) to a level below that which such Lender (or any Applicable Lending
Office or such bank holding company or other legal entity) could have achieved
but for such law, regulation, interpretation, directive or request).

 

(c)           Notification
and Certification. Each Lender shall notify the Borrower of any event
occurring after the date hereof entitling such Lender to compensation under subsections
(a) or (b) of this Section 5.01 (setting forth in
reasonable detail the basis of such determination) as promptly as practicable,
but in any event within sixty (60) days, after such Lender obtains actual
knowledge thereof; provided that (i) if any Lender fails to give
such notice within sixty (60) days after it obtains actual knowledge of such an
event, such Lender shall, with respect to compensation payable pursuant to this
Section 5.01 in respect of any costs resulting from such event, be
entitled to payment under this Section 5.01 only for costs incurred
from and after the date sixty (60) days prior to the date that such Lender does
give such notice and (ii) each Lender shall designate a different
Applicable Lending Office (if applicable) for the Eurodollar Loans of such
Lender affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender. Each Lender shall furnish to
the Borrower a certificate setting forth the basis and amount of each request
by such Lender for compensation under subsection (a) or (b)
of this Section 5.01. Determinations and allocations by any Lender
for purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to subsection (a) or (b) of this Section 5.01,
or of the effect of capital maintained pursuant to subsection (b) of
this Section 5.01, on its costs or rate of return of maintaining
Eurodollar Loans or its obligation to make Eurodollar Loans, or on amounts
receivable by it in respect of Eurodollar Loans, and of the amounts required to
compensate such Lender under this Section 5.01, as set forth in the
certificate of the Lender, shall be prima facie evidence of the accuracy of the
determinations and calculations contained or asserted therein. Notwithstanding
anything to the contrary contained herein, it shall be a condition to the
Borrower’s obligation to pay compensation under subsections (a) or (b)
of this Section 5.01 that such compensation requirements are also
being imposed on substantially all other similar classes or categories of
commercial loans or commitments of such Lender similarly affected by the
Regulatory Change and the other guidelines and requirements referred to in this
Section 5.01.

 

5.02         Limitation
on Eurodollar Loans. Anything herein to the contrary notwithstanding, if,
on or prior to the determination of any LIBO Rate for any Interest Period for
any Eurodollar Loan:

 

48

 

(a)           after
making reasonable efforts, the Administrative Agent determines, which
determination shall be conclusive absent manifest error, that quotations of
interest rates for the relevant deposits referred to in the definition of “LIBO
Rate” in Section 1.01 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining rates of interest
for Eurodollar Loans as provided herein; or

 

(b)           the
Administrative Agent determines, which determination shall be conclusive absent
manifest error, that, as a result of circumstances arising after the Closing
Date, the relevant rates of interest referred to in the definition of “LIBO
Rate” in Section 1.01 upon the basis of which the rate of interest
for Eurodollar Loans for such Interest Period is to be determined are not
likely adequately to cover the cost to such Lenders of making or maintaining
Eurodollar Loans for such Interest Period;

 

 then the Administrative Agent shall give the
Borrower and each Lender prompt notice thereof and, so long as such condition
remains in effect, the Lenders shall be under no obligation to make additional
Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base Rate Loans
into Eurodollar Loans, and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for the outstanding Eurodollar Loans, either prepay
such Eurodollar Loans in accordance with Sections 2.06 and 2.07 or,
in accordance with Section 2.05, Convert such Eurodollar Loans into
Base Rate Loans or other Eurodollar Loans in amounts and maturities which are
still being provided. Notwithstanding the foregoing, (i) if the applicable
conditions under clauses (a) or (b) of this Section 5.02
affect only a portion of the Eurodollar Loans, the balance of the Eurodollar
Loans may continue as Eurodollar Loans and (ii) if the applicable
conditions under clauses (a) and (b) of this Section 5.02
only affect certain Interest Periods, the Borrower, subject to the terms and
conditions of this Agreement, may elect to have Eurodollar Loans with such
other Interest Periods.

 

5.03         Illegality.
Notwithstanding any other provision of this Agreement, if it becomes unlawful
for any Lender or its Applicable Lending Office to honor its obligation to make
or maintain Eurodollar Loans hereunder (and, in the sole opinion of such
Lender, the designation of a different Applicable Lending Office would either not
avoid such unlawfulness or would be disadvantageous to such Lender), then such
Lender shall promptly notify the Borrower thereof (with a copy to the
Administrative Agent) and such Lender’s obligation to make or Continue, or to
Convert portions of its Loan of any other Type into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain Eurodollar
Loans (in which case the provisions of Section 5.04 shall be
applicable).

 

5.04         Treatment
of Affected Loans. If the obligation of any Lender to make Eurodollar Loans
or to Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Sections 5.01 or 5.03, then such
Lender’s Eurodollar Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for Eurodollar Loans
(or, in the case of a Conversion resulting from a circumstance described in Section 5.03,
on such earlier date as such Lender may specify to the Borrower with a copy to
the Administrative Agent) and, unless and until either (a) such Lender gives
notice as provided below that the circumstances specified in Sections 5.01
or 5.03 that gave rise to such Conversion no longer exist or (b)
the Borrower, in the case of Section 5.01, ends any suspension by the
Borrower:

 

49

 

(a)           to
the extent that such Lender’s Eurodollar Loans have been so Converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender’s Eurodollar Loans shall be applied instead to its Base Rate Loans; and

 

(b)           all
portions of its Loan that would otherwise be made or Continued by such Lender
as Eurodollar Loans shall be made or Continued instead as Base Rate Loans, and
all Base Rate Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.

 

If
such Lender gives notice to the Borrower with a copy to the Administrative
Agent that the circumstances specified in Section 5.01 or 5.03
that gave rise to the Conversion of such Lender’s Eurodollar Loans pursuant to
this Section 5.04 no longer exist (which notice such Lender agrees
to give promptly upon such circumstances ceasing to exist) or the Borrower
terminates its applicable suspension at a time when Eurodollar Loans made by
other Lenders are outstanding, such Lender’s Base Rate Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Base Rate and Eurodollar Loans are
allocated among the Lenders ratably (as to principal amounts, Types and
Interest Periods) in accordance with their respective Commitments.

 

5.05         Compensation.
The Borrower shall pay to the Administrative Agent for account of each Lender,
upon the request of such Lender through the Administrative Agent, such amount
as shall be sufficient to compensate it for any loss, cost or expense that such
Lender reasonably determines is attributable to:

 

(a)           any
payment, mandatory or optional prepayment or Conversion of a Eurodollar Loan
made by such Lender for any reason (including the acceleration of the Loans
pursuant to Article XII) on a date other than the last day of the
Interest Period for such Loan;

 

(b)           any
failure by the Borrower for any reason to prepay a Eurodollar Loan pursuant to
a notice of prepayment given in accordance with Section 2.06 (or any
notice timely given postponing the date for prepayment given in accordance with
Section 2.08), unless such notice is timely revoked pursuant to a notice
of revocation given in accordance with Section 2.08; or

 

(c)           the
assignment of any Eurodollar Loan other than on the last day of the applicable
Interest Period as a result of a request by the Borrower pursuant to Section
5.07.

 

Without
limiting the effect of the preceding provisions, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of
interest that otherwise would have accrued on the principal amount so paid,
prepaid, Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan that would have commenced on the date
specified for such borrowing) at the applicable Adjusted LIBO Rate for such
Loan provided for herein over (ii) the amount of interest that such
Lender would earn on such principal amount for such period if such Lender would
have bid in the London interbank market for Dollar deposits of leading banks in
amounts comparable 

 

50

 

to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender), or if such Lender shall not, or shall
cease to, make such bids, the equivalent rate, as reasonably determined by such
Lender, derived from Page 3750 of the Dow Jones Markets Service (Telerate) or
other publicly available source as described in the definition of “LIBO Rate”
in Section 1.01, plus, in the case of Section 5.05(c), the
amount of interest for such period paid to such Lender pursuant to Section
5.07. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section 5.05 shall
be delivered to the Borrower and shall be prima facie evidence of the accuracy
of the determinations and calculations contained or asserted therein. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within ten (10) days after receipt thereof. Any payment due to any of the
Lenders pursuant to this Section 5.05 shall be deemed additional
interest under such Lender’s Note.

 

5.06         Taxes.

 

(a)           Payments
Free of Taxes. Any and all payments by or on account of any obligation of
the Borrower hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.06) the
Administrative Agent and each Lender (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b)           Payment
of Other Taxes by the Borrower. In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

(c)           Indemnification
by the Borrower. The Borrower shall indemnify the Administrative Agent and
each Lender, within ten (10) days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent
or such Lender, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 5.06) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender or by the Administrative
Agent on its own behalf or on behalf of a Lender, shall be prima facie evidence
of the accuracy of the determinations and calculations contained or asserted
therein.

 

(d)           Evidence
of Payments. As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

51

 

(e)           Foreign
Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate. Until such
documentation is provided, the Borrower shall be entitled to take all actions
that are required to comply with Applicable Laws with respect to payments
payable hereunder on account of Loans made to the Borrower by any Foreign
Lender who has not complied with the requirements of this Section 5.06(e),
and such actions shall not constitute a Default or an Event of Default.

 

(f)            Refunds.
If the Administrative Agent or a Lender determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 5.06, provided no Major
Default or Event of Default exists, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 5.06 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section 5.06(f) shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

5.07         Replacement
of Lenders. If any Lender requests compensation pursuant to Section 5.01
or 5.06, or any Lender’s obligation to Continue Loans of any Type, or to
Convert Loans of any Type into the other Type of Loan, shall be suspended
pursuant to Section 5.01 or 5.03 (any such Lender requesting
such compensation, or whose obligations are so suspended, being herein called a
“Requesting Lender”), the Borrower, upon five (5) Business Days notice
to such Requesting Lender and the Administrative Agent, may require that such
Requesting Lender transfer all of its right, title and interest under this
Agreement and such Requesting Lender’s Note and its interest in the other Loan
Documents to an Eligible Assignee (a “Proposed Lender”) identified by
the Borrower that is satisfactory to the Administrative Agent in its sole
discretion (i) if such Proposed Lender agrees to assume all of the
obligations of such Requesting Lender hereunder, and to purchase all of such
Requesting Lender’s Loan hereunder for consideration equal to the aggregate
outstanding principal amount of such Requesting Lender’s Loan, together with
interest thereon to the date of such purchase (to the extent not paid by the
Borrower), and satisfactory arrangements are made for payment to such
Requesting Lender of all other amounts accrued and payable hereunder to such
Requesting Lender as of the date of such transfer (including any fees accrued
hereunder and any amounts that would be payable under Section 5.05
as if all of such Requesting Lender’s Loan were being prepaid in full on such
date) and (ii) if such Requesting Lender has requested compensation
pursuant to Section 5.01 or 5.06,

 

52

 

such Proposed
Lender’s aggregate requested compensation, if any, pursuant to Section 5.01
or 5.06 with respect to such Requesting Lender’s Loan is lower than that
of the Requesting Lender. Subject to the provisions of Section 14.07(b),
such Proposed Lender shall be a “Lender” for all purposes hereunder. Without
prejudice to the survival of any other agreement of the Borrower hereunder the
agreements of the Borrower contained in Sections 5.01, 5.06,
14.03 and 14.04 (without duplication of any payments made to such
Requesting Lender by the Borrower or the Proposed Lender) shall survive for the
benefit of such Requesting Lender under this Section 5.07 with
respect to the time prior to such replacement.

 

ARTICLE
VI

CONDITIONS PRECEDENT

 

6.01         Conditions
Precedent to Effectiveness of Loan Commitments. The effectiveness of the
Commitments and the obligation of the Lenders to make the Loans are subject to
the conditions precedent that, on or prior to the Closing Date, (i) the
Administrative Agent shall have received each of the documents (duly executed
and completed by the part(y)(ies) thereto and acknowledged when applicable)
referred to below in this Section 6.01, (ii) each of the other conditions
listed below in this Section 6.01 is satisfied, the satisfaction of each
of such conditions to be satisfactory to the Administrative Agent (and to the
extent specified below, to each Lender) in form and substance (or any such
condition shall have been waived in accordance with Section 14.05),
(iii) all of the representations and warranties of the Borrower (without giving
effect to any qualification therein which limits any such representations and
warranties to the “knowledge” or “best knowledge” of the Borrower or any other
Borrower Party) shall be true and correct on the Closing Date, (iv) the Liens
granted by the Security Documents shall have attached and been perfected, with
the priority as required pursuant to the terms hereof or thereof (or, in the case
of the Liens encumbering the Projects the Title Policies insuring the
effectiveness and priority of such Liens shall have been unconditionally
delivered to the Administrative Agent in accordance with the closing
instructions delivered on its behalf), and (v) no Default or Event of Default
shall exist or shall result therefrom.

 

(a)           Agreement.
From each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.

 

(b)           Notes.
The Notes for each Lender.

 

(c)           Deed
of Trust. Each Deed of Trust, in form for recording.

 

(d)           Environmental
Indemnity. The Environmental Indemnity.

 

(e)           Project-Level
Account Security Agreement. The Project-Level Account Security Agreement.

 

(f)            General
Assignment. The General Assignment.

 

53

 

(g)           Property
Manager’s Consent. The Property Manager’s Consent.

 

(h)           Other
Loan Documents. The Guarantor Documents and all other Loan Documents.

 

(i)            Opinion
of Counsel to the Borrower Parties. A favorable written opinion, dated the
Closing Date, of Cox, Castle & Nicholson LLP, counsel to the Borrower
and furnishing such opinions at the Borrower’s request on behalf of the other
Borrower Parties, and covering such matters relating to the Borrower Parties,
this Agreement, the other Loan Documents, and the Transactions as the
Administrative Agent shall reasonably request. The Borrower hereby requests
such counsel to deliver such opinion to the Lenders and the Administrative
Agent.

 

(j)            Organizational
Documents. Copies of (i) the Certificate of Incorporation, Certificate
of Formation, Certificate of Limited Partnership or similar formation document
of each of the Borrower Parties, certified by the Secretary of State of the
state of formation of such Person as of a recent date, (ii) the other Organizational
Documents of each of the Borrower Parties certified by any Authorized Officer
on behalf of such Borrower Party, (iii) the applicable resolutions of each
of the Borrower Parties authorizing the execution and delivery of the Loan
Documents to which they are a party, in each case certified by an Authorized
Officer on behalf of such Borrower Party as of the date of this Agreement as
being accurate and complete, all in form and substance satisfactory to the
Administrative Agent and its counsel, (iv) certificates signed by an
Authorized Officer on behalf of the applicable Person certifying the name,
incumbency and signature of each individual authorized to execute the Loan
Documents to which such Person is a party and the other documents or
certificates to be delivered pursuant hereto or thereto, on which the
Administrative Agent and the Lenders may conclusively rely unless a revised
certificate is similarly so delivered in the future, and (v) good standing
certificates with respect to each Borrower Party that is organized under the
laws of any state of the United States of America from such state and good
standing certificates and authority to conduct business with respect to the
Borrower, the Borrower’s Member and the Borrower’s Manager from the State of
California.

 

(k)           Title
Insurance; Priority. An ALTA policy or policies (or pro forma policy or
policies) of title insurance for each Project satisfactory to the
Administrative Agent (collectively, the “Title Policy”), together with
evidence of the payment of all premiums due thereon, issued by the Title
Company (i) each insuring the Administrative Agent for the benefit of the
Lenders in an amount equal to the aggregate amount of the Commitments (to the
extent advanced) in effect on the Closing Date (with a tie-in endorsement
satisfactory to the Administrative Agent) that the Borrower is lawfully seized
and possessed of a valid and subsisting fee simple (or other applicable) interest
in the Projects subject to no Liens other than Permitted Title Exceptions and (ii) providing
such other affirmative insurance and endorsements as the Administrative Agent
may require in each case as approved by the Administrative Agent. In addition,
the Borrower shall have paid to the Title Company all expenses and premiums of
the Title Company in connection with the issuance of such policies and all
recording and filing fees payable in connection with recording the Deeds of
Trust and the filing of the Uniform Commercial Code financing statements
related thereto in the appropriate offices.

 

54

 

(l)            Survey.
An “as-built” survey of each Project, each satisfactory to the Administrative
Agent in form and content and made by a registered land surveyor satisfactory
to the Administrative Agent, each survey showing, among other things through
the use of course bearings and distances, (i) all easements and roads or
rights of way (including all access to public roads) and setback lines, if any,
affecting the Improvements and that the same are unobstructed or any such
obstructions are acceptable to the Administrative Agent; (ii) the
dimensions of all existing buildings and distance of all material Improvements
from the lot lines; (iii) no encroachments by improvements located on
adjoining property that are not acceptable to the Administrative Agent; and
(iv) such additional information which may be reasonably required by the
Administrative Agent. Each said survey shall be dated a date reasonably
satisfactory to the Administrative Agent, bear a proper certificate
substantially in the form of Exhibit M attached hereto by the
surveyor in favor of the Administrative Agent (on behalf of the Lenders) and
the Title Company and include the legal description of the Project.

 

(m)          Certificates
of Occupancy. Copies of permanent and unconditional certificates of
occupancy permitting the fully functioning operation and occupancy of the
Projects and of such other permits necessary for the use and operation of the
Projects issued by the respective Governmental Authorities having jurisdiction
over the Projects, together with such other evidence as may be requested by the
Administrative Agent with respect to the compliance of the Projects with zoning
requirements.

 

(n)           Insurance.
A copy of the insurance policies required by Section 8.05 or
certificates of insurance with respect thereto, such policies or certificates,
as the case may be, to be in form and substance, and issued by companies,
acceptable to the Administrative Agent and otherwise in compliance with the terms
of Section 8.05, together with evidence of the payment of all
premiums therefor.

 

(o)           Environmental
Report. The Environmental Reports.

 

(p)           Leases.
(i) An affidavit (the “Leasing Affidavit”) of an Authorized Officer
of the Borrower certifying that except as disclosed in the estoppel
certificates delivered to the Administrative Agent prior to the Closing Date,
that certain Douglas, Emmett & Company Delinquency/Aging Report
(Summarized) dated 7/20/2005 provided to the Administrative Agent, or the rent
rolls delivered to the Administrative Agent pursuant to Section 7.22,
(A) each tenant lease listed in the Leasing Affidavit is in full force and
effect; (B) the tenant lease summaries provided by the Borrower to the
Administrative Agent are true and correct and, as to all matters contained
therein relating to rent, term, termination rights, options to renew, extend or
expand, rights of first refusal or offer, tenant improvement allowances,
security deposits and other credit enhancements, insurance, tax and operating
expense recovery, and obligations with respect to subordination,
non-disturbance and attornment, complete in all material respects, and such
summaries do not fail to disclose any material term of any Lease which would adversely
affect the obligation of the tenant thereunder to pay rent or perform any of
its other material obligations for the entire term thereof consistent with the
terms disclosed in such summary and the rent rolls delivered to the
Administrative Agent pursuant to Section 7.22; (C) no defaults
exist under any of the Leases (other than the Major Leases) by any party
(including any guarantor) thereto that, individually or in the aggregate with
respect to all such defaults, would result in a Material Adverse Effect and, to
the knowledge of the Borrower, no material default 

 

55

 

exists under any of the
Major Leases; and (D) to the Borrower’s knowledge, no event which would
result in a material adverse change in the financial condition, operations or
business of one or more tenants under Major Leases has occurred which the
Borrower has determined would adversely affect the ability of such tenant to
pay its rent and perform its other material obligations under such Major Lease
and (ii) the standard office lease form and the standard retail lease form
(both as approved by the Administrative Agent) to be used for the Projects.

 

(q)           Estoppels.
 Estoppel certificates in form and substance satisfactory to the
Administrative Agent from tenants covering at least seventy-five percent (75%)
of all the leased space in the Projects, except to the extent that the
Administrative Agent agrees in writing to defer the receipt of any estoppel
certificate to a date subsequent to the Closing Date, in which case the
Borrower shall use commercially reasonable efforts to obtain such deferred
estoppel certificates as promptly as possible following the Closing Date. For
purposes of this requirement, it is agreed that the form tenant estoppels
required by any applicable Approved Lease shall be acceptable to the
Administrative Agent.

 

(r)            SNDA
Agreements. The Borrower will distribute and use commercially reasonable
efforts to obtain the SNDA Agreements duly executed by each tenant under a
Major Lease.

 

(s)           Non-Foreign
Status. A certificate by an Authorized Officer certifying the Borrower’s
tax identification number and the fact that the Borrower is not a foreign
person under the Code.

 

(t)            UCC
Searches. Uniform Commercial Code searches with respect to the Borrower, the
Borrower’s Member and the Borrower’s Manager as required by the Administrative
Agent.

 

(u)           Appraisal.
The Appraisals indicating an “as-is” value for each of the Projects, such that
the Allocated Loan Amount for each Project shall not exceed sixty percent (60%)
of the Appraised Value of such Project.

 

(v)           Property
Management and Leasing Agreements. The Property Management Agreement and
all brokerage and/or leasing agreements affecting the Projects and certified by
an Authorized Officer to be true, correct and complete in all respects.

 

(w)          Financial
Statements. Copies of the most recent audited and unaudited annual and
quarterly financial statements of the Borrower’s Member, and a certificate
dated the Closing Date and signed by an Authorized Officer on behalf of the
Borrower’s Member stating that (i) such financial statements are true,
complete and correct in all material respects and (ii) no event that could
reasonably be expected to have a Material Adverse Effect has occurred since the
date of such financial statements, all of the foregoing to be satisfactory to
the Administrative Agent and each Lender in their reasonable discretion.

 

(x)            Approved
Annual Budget. A copy of the Annual Budget for each Project for the current
calendar year.

 

56

 

(y)           Property
Condition Report. A survey of the physical condition of the Projects
prepared by a licensed engineer selected by the Administrative Agent and in
accordance with the Administrative Agent’s scope.

 

(z)            Project-Level
Accounts. The Project-Level Accounts shall have been established pursuant
to the terms of this Agreement and any other Loan Document.

 

(aa)         Seismic
Report. A seismic report for each Project prepared by a firm of licensed
engineers selected by the Administrative Agent and prepared in accordance with
the Administrative Agent’s scope for such reports and otherwise acceptable to
the Administrative Agent in all respects.

 

(bb)         Fees
and Expenses. The Borrower shall have paid (i) all fees then due and payable
to the Administrative Agent pursuant to the Fee Letter, (ii) any other
fees then due to the Administrative Agent, Eurohypo or the Arranger and
(iii) any fees and expenses due to the Administrative Agent or the
Arranger pursuant to Section 14.03, including the reasonable fees and
expenses of Morrison & Foerster LLP, counsel to the Administrative
Agent and Eurohypo.

 

(cc)         Other
Documents. Such other documents as the Administrative Agent may reasonably
request.

 

ARTICLE
VII

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the
Administrative Agent and the Lenders as of the date hereof that:

 

7.01         Organization;
Powers. Each of the Borrower Parties is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
has all requisite power and authority to carry on its business as now conducted
and, except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required. The Borrower Parties are each qualified to do
business and in good standing in the State of California.

 

7.02         Authorization;
Enforceability. The Transactions applicable to each Borrower Party are
within such Borrower Party’s organizational powers and have been duly
authorized by all necessary organizational action under their respective
Organizational Documents. This Agreement and the other Loan Documents have been
duly executed and delivered by the Borrower Parties party thereto and each of
the Loan Documents to which a Borrower Party is a party when delivered will
constitute, a legal, valid and binding obligation of the applicable Borrower
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

 

57

 

7.03         Government
Approvals; No Conflicts. The Transactions (a) do not require any Government
Approvals of, registration or filing with, or any other action by, any
Governmental Authority, except for (i) such as have been obtained or made and
are in full force and effect and (ii) filings and recordings in respect of the
Liens created pursuant to the Security Documents, (b) will not violate any
Applicable Law applicable to the Borrower Parties or the Organizational
Documents of any of the Borrower Parties, (c) will not violate or result in a
default under any material indenture, agreement or other instrument binding
upon any of the Borrower Parties, or give rise to a right thereunder to require
any payment to be made by any of the Borrower Parties, and (d) except for the
Liens created pursuant to the Security Documents, will not result in the
creation or imposition of any Lien on any asset of any of the Borrower Parties.

 

7.04         Financial
Condition. The Borrower has heretofore furnished to the Administrative
Agent certain financial statements of the Borrower’s Member. All such financial
statements are complete and correct in all material respects and fairly present
the financial condition of Borrower’s Member, as of the dates of such financial
statements, all in accordance with GAAP. Each of the Borrower and Borrower’s
Member, on the date hereof, does not have any Indebtedness (other than security
deposits and tenant improvement allowances under the Leases that are described
in the tenant lease summaries provided by the Borrower to the Administrative
Agent and that are in amounts and on terms consistent with market terms and in
the ordinary course of business), material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in said financial statements as of said dates and
except for Real Estate Taxes and Other Charges that are not yet delinquent. Since
the applicable dates of such financial statements, except as disclosed in Schedule
7.04 attached hereto, there has been no event that could reasonably be
expected to have a Material Adverse Effect.

 

7.05         Litigation.
Except as disclosed in Schedule 7.05 hereto, there are no legal or
arbitral proceedings, or any proceedings by or before any Governmental
Authority or agency of which the Borrower, Borrower’s Member or Borrower’s
Manager has received written notice, now pending or (to the knowledge of the
Borrower) threatened in writing against the Borrower, the Projects, the Borrower’s
Member or Borrower’s Manager except for those which (a) (subject to applicable
deductibles or self-insurance) are fully covered by insurance maintained by or
for the Borrower, the Borrower’s Member or the Borrower’s Manager or (b) involve
uninsured claims that do not exceed $75,000 individually, or in the aggregate
for all such claims.

 

7.06         ERISA.
Neither the Borrower nor Borrower’s Member has established any Plan which would
cause the Borrower or the Borrower’s Member to be subject to ERISA and none of
the Borrower’s or the Borrower’s Member’s assets constitutes or will constitute
“plan assets” of one or more Plans. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect. Each Plan
established by a Borrower Party and, to the knowledge of the Borrower Parties,
each of its ERISA Affiliates and each Multiemployer Plan, is in compliance
with, the applicable provisions of ERISA, the Code and any other Applicable
Law.

 

58

 

7.07         Taxes.
Each of the Borrower Parties has timely filed or timely caused to be filed (or
obtained effective extensions for filing) all tax returns and reports required
to have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except Taxes that are being contested in good faith by
appropriate proceedings and (a) for which such Borrower Party has set aside on
its books adequate reserves in accordance with GAAP or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

 

7.08         Investment
and Holding Company Status. None of the Borrower Parties is (a) an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a “holding company”, or an “affiliate” of a “holding company”
or a “subsidiary company” of a “holding company”, as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.

 

7.09         Environmental
Matters. Except for matters expressly and specifically set forth in the
Environmental Reports or the Property Condition Reports or matters disclosed in
Schedule 7.09 or Schedule 8.11 attached hereto, to the Borrower’s
knowledge:

 

(a)           The
Borrower and each Project is in compliance with all applicable Environmental
Laws, except where the failure to comply with such laws is not reasonably
likely to result in a Material Adverse Effect.

 

(b)           There
is no Environmental Claim of which the Borrower has received written notice
pending, or to the Borrower’s knowledge, threatened in writing, and no
penalties arising under Environmental Laws have been assessed, against the
Borrower, any Project or, to the Borrower’s knowledge, against any Person whose
liability for any Environmental Claim the Borrower or the Borrower’s Member has
or may have retained or assumed either contractually or by operation of law,
and the Borrower has received no written notice of any investigation or review
which is pending or, to the knowledge of the Borrower, threatened in writing by
any Governmental Authority, citizens group, employee or other Person with
respect to any alleged failure by the Borrower, the Borrower’s Member or any
Project to have any environmental, health or safety permit, license or other
authorization required under, or to otherwise comply with, any Environmental
Law or with respect to any alleged liability of the Borrower or the Borrower’s
Member for any Use or Release of any Hazardous Substances.

 

(c)           There
have been no past, and there are no present, Releases of any Hazardous
Substance that could reasonably be anticipated to form the basis of any
Environmental Claim against the Borrower, the Borrower’s Member, any Project
or, to the knowledge of the Borrower, against any Person whose liability for
any Environmental Claim the Borrower or the Borrower’s Member has or may have
retained or assumed either contractually or by operation of law.

 

(d)           To
the Borrower’s knowledge, there is no Release of Hazardous Substances migrating
to any Project which could require Remediation or require the Borrower to
provide notice to any Governmental Authority.

 

59

 

(e)           There
is not present at, on, in or under any Project, PCB-containing equipment,
asbestos or asbestos containing materials, underground storage tanks or surface
impoundments for Hazardous Substances, lead in drinking water (except in
concentrations that comply with all Environmental Laws), or lead-based paint
(except in compliance with all applicable Environmental Laws).

 

(f)            No
Liens are presently recorded with the appropriate land records under or
pursuant to any Environmental Law with respect to any Project and, to the
Borrower’s knowledge no Governmental Authority has been taking or is in the
process of taking any action that could subject any Project to Liens under any
Environmental Law.

 

(g)           The
Borrower has provided to the Administrative Agent’s environmental consultant
prior to the Closing Date true and correct copies of all materials,
environmental reports and other documents pertaining to the Projects requested
by the consultant and in the Borrower’s possession or control.

 

7.10         Organizational
Structure. The Borrower has heretofore delivered to the Administrative
Agent a true and complete copy of the Organizational Documents of each Borrower
Party. The sole member of the Borrower on the date hereof is the Borrower’s
Member. The sole manager of Borrower and general partner of Borrower’s Member
on the date hereof is Borrower’s Manager.

 

7.11         Subsidiaries.
The Borrower’s Member has no Subsidiaries except for Borrower and those
specifically disclosed on Schedule 7.11. No other Borrower Party
has any Subsidiaries except for those specifically disclosed on Schedule 7.11.

 

7.12         Title.
On the Closing Date, the Borrower will own and on such date will have good,
indefeasible and insurable fee simple title to the portion of the Projects
consisting of real property free and clear of all Liens, other than Permitted
Title Exceptions. On the Closing Date, the Borrower will own or (in compliance
with Section 9.04(d)) lease and will have good title to all other
portions of the Project free and clear of all Liens, other than Permitted Title
Exceptions and rights of equipment lessors under equipment leases currently in effect
which comply with the requirements set forth in Sections 9.02(h) and 9.04(d).
There are no outstanding options to purchase or rights of first refusal to
purchase affecting the Projects.

 

7.13         No Bankruptcy Filing. Neither
the Borrower nor the Borrower’s Member 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, and neither
the Borrower nor Borrower’s Member has knowledge of any Person contemplating
the filing of any such petition against the Borrower, the Borrower’s Member or
the Borrower’s Manager.

 

7.14         Executive
Offices; Places of Organization. The location of the Borrower’s, the
Borrower’s Member’s and the Borrower’s Manager’s principal place of business
and chief executive office is the address identified in the “Address for
Notices” area beneath the Borrower’s name on the Borrower’s signature page to
this Agreement, except to the extent changed in accordance with Section 9.07.
The Borrower was organized in the State of Delaware, 

 

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and the Borrower’s
Member and the Borrower’s Manager were organized in the State of California.

 

7.15         Compliance;
Government Approvals. Except as expressly set forth in the Property
Condition Report for each Project, the Environmental Reports, or the seismic
reports delivered for the Projects pursuant to Section 6.01(aa), the
Borrower, each Project and the Borrower’s use thereof and operations thereat
comply in all material respects with all Applicable Laws. All material
Government Approvals necessary under Applicable Law in connection with the
operation of the Projects as contemplated by the Loan Documents have been duly
obtained, are in full force and effect, are not subject to appeal, are held in
the name of the Borrower (or Borrower’s Member for the benefit of the Borrower)
and are free from conditions or requirements compliance with which could
reasonably be expected to have a Material Adverse Effect or which the Borrower
does not reasonably expect to be able to satisfy. To the best knowledge of the
Borrower, there is no proceeding pending or threatened in writing that seeks,
or may reasonably be expected, to rescind, terminate, Modify or suspend any
such Government Approval. Except for business licenses and other licenses or
permits that are not specifically applicable to the Projects, the Borrower has
no reason to believe that the Administrative Agent, acting for the benefit of
the Lenders, will not be entitled, without undue expense or delay, to the
benefit of each such Government Approval upon the exercise of remedies under
the Security Documents.

 

7.16         Condemnation;
Casualty. To the Borrower’s knowledge, no Taking has been commenced or is
presently contemplated with respect to all or any portion of any Project or for
the relocation of roadways providing access to any Project. No Casualty Event
of any material nature that has not been substantially repaired has occurred
with respect to any Project.

 

7.17         Utilities
and Public Access; No Shared Facilities. Each Project has adequate rights
of access to public ways and is served by adequate electric, gas, water, sewer,
sanitary sewer and storm drain facilities. All public utilities necessary to
the use and enjoyment of each Project as intended to be used and enjoyed are
located in the public right-of-way abutting each Project except as otherwise
shown on the survey of such Project provided to the Administrative Agent.

 

7.18         Solvency.
On the Closing Date and after and giving effect to the Loans occurring on the
Closing Date, and the disbursement of the proceeds of such Loans pursuant to
the Borrower’s instructions, each Borrower Party is and will be Solvent.

 

7.19         Foreign
Person. Neither the Borrower nor Borrower’s Member is a “foreign person”
within the meaning of Section 1445(f)(3) of the Code.

 

7.20         No
Joint Assessment; Separate Lots. The Borrower has not suffered, permitted
or initiated the joint assessment of any Project with any other real property
constituting a separate tax lot.

 

7.21         Security
Interests and Liens. The Security Documents create (and upon recordation of
the Deeds of Trust, filing of the applicable financing statements in the
appropriate filing offices and the execution and delivery by the Depository
Bank of control agreements with 

 

61

 

respect to any
pledged deposit accounts there will be perfected as to any portion of such
collateral consisting of the deposit account itself and the securities
entitlements thereto), as security for the Obligations, valid, enforceable,
perfected and first priority security interests in and Liens on all of the
respective collateral intended to be covered thereunder, in favor of the
Administrative Agent as administrative agent for the ratable benefit of the
Lenders, subject to no Liens other than the Permitted Title Exceptions and rights
of equipment lessors under equipment leases currently in effect which comply
with the requirements set forth in Sections 9.02(h) and 9.04(d),
except as enforceability may be limited by applicable insolvency, bankruptcy,
reorganization, moratorium or other laws affecting creditors’ rights generally,
or general principles of equity, whether such enforceability is considered in a
proceeding in equity or at law. Other than in connection with any future change
in the Borrower’s name or the location in which the Borrower is organized or
registered, no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than the filing of continuation statements and Notices
of Intent to Preserve Security Interests in accordance with the Uniform
Commercial Code and the California Civil Code. A financing statement covering all
property covered by any Security Document that is subject to a Uniform
Commercial Code financing statement has been filed and/or recorded, as
appropriate, (or irrevocably delivered to the Administrative Agent or a title
agent for such recordation or filing) in all places necessary to perfect a
valid first priority security interest with respect to the rights and property
that are the subject of such Security Document to the extent governed by the
Uniform Commercial Code and to the extent such security can be perfected by
such filing.

 

7.22         Leases.
Except as disclosed in the estoppel certificates delivered to the
Administrative Agent prior to the Closing Date, in that certain Douglas, Emmett
& Company Delinquency/Aging Report (Summarized) dated 7/20/2005 provided to
the Administrative Agent prior to the Closing Date, or (as to items (2) through
(10) below) the rent rolls for each Project attached hereto as Schedule 7.22,
with respect to the Leases (which term, for the purposes of this Section 7.22
is limited to tenant leases): (1) the rent rolls attached hereto as Schedule
7.22 are true, correct and complete and the Leases referred to thereon are
all valid and in full force and effect; (2) the Leases (including
Modifications thereto) are in writing, and there are no oral agreements with
respect thereto; (3) the copies of each of the Leases (if any) delivered
to the Administrative Agent are true, correct and complete in all material
respects and have not been Modified (or further Modified); (4) the lease
summaries delivered to the Administrative Agent are true and correct in all
material respects and, as to all matters contained therein relating to rent,
term, termination rights, options to renew, extend or expand, rights of first
refusal or offer, tenant improvement allowances, security deposits and other
credit enhancements, insurance, tax and operating expense recovery, and
obligations with respect to subordination, non-disturbance and attornment,
complete in all material respects, and such summaries do not fail to disclose
any material term of any Lease which would materially impact the obligation of
the tenant thereunder to pay rent or perform any of its other material
obligations for the entire term thereof as disclosed in such summary and the
rent rolls attached hereto as Schedule 7.22; (5) to the Borrower’s knowledge,
no defaults exist under any of the Leases (other than the Major Leases) by any
party (including any guarantor) thereto that, individually or in the aggregate
with respect to all such defaults would result in a Material Adverse Effect
and, to the knowledge of the Borrower, no material default exists under any of
the Major Leases; (6) the Borrower has no knowledge of any presently
effective notice of termination or notice of default given by any tenant with
respect to any Major Lease or under any other Leases that individually or in
the aggregate could be 

 

62

 

reasonably
expected to result in a Material Adverse Effect; (7) the Borrower has not
made any presently effective assignment or pledge of any of the Leases, the
rents or any interests therein except to the Administrative Agent; (8) no
tenant or other party has an option or right of first refusal to purchase all
or any portion of any Project; (9) except as disclosed in the lease
summaries delivered by the Borrower to the Administrative Agent, no tenant has
the right to terminate its lease prior to expiration of the stated term of such
Lease (except as a result of a casualty or condemnation); and (10) no
tenant has prepaid more than one month’s rent in advance (except for bona fide
security deposits and estimated payments of operating expenses, taxes and other
pass-throughs paid by tenants pursuant to their Leases not prepaid more than
one month prior to the date such estimated payments are due).

 

7.23         Insurance.
The Borrower has in force, and has paid (in each case to the extent now due and
payable) the Insurance Premiums in respect of all of the insurance required by Section
8.05.

 

7.24         Physical
Condition. Except as expressly and specifically described and disclosed in
the Property Condition Reports for the Projects, the seismic reports delivered
for the Projects pursuant to Section 6.01(aa), the Environmental Reports
for the Projects and the capital improvement schedules contained in the 2005
budgets for the Projects previously delivered to the Administrative Agent, and
except for the work described in Schedule 8.21, to the Borrower’s
knowledge, each Project, including all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, is in good condition, order and repair in all material respects; to
the Borrower’s knowledge, there exists no structural or other material defects
or damages in any Project, whether latent or otherwise, and the Borrower has not
received written notice from any insurance company or bonding company of any
defects or inadequacies in any Project, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond. Notwithstanding the provisions
of Section 12.01(c), if any representation or warranty contained in this
Section 7.24 is untrue at any time with respect to any Project, such
Default or Event of Default may be cured if the Borrower, within the cure
period set forth in Section 12.01(r), performs such acts as are
sufficient to cause this representation and warranty to be true by the end of
such cure period.

 

7.25         Flood
Zone. Except as may be disclosed on the survey of the Project, or any flood
zone certification delivered by the Borrower to the Administrative Agent prior
to the Closing Date, no portion of any Project is located in a flood hazard
area as designated by the Federal Emergency Management Agency or, if in a flood
zone, flood insurance is maintained therefor in full compliance with the
provisions of Section 8.05(a)(i).

 

7.26         Management
Agreement. The Property Management Agreement is the only management and/or
leasing agreement related to each Project, and is in full force and effect with
no default or event of default existing thereunder, and the copy of the
Property Management Agreement delivered to the Administrative Agent is a true,
correct and complete copy.

 

63

 

7.27         Boundaries.
Except as may be disclosed on the surveys delivered pursuant to Section
6.01(l) and in the Title Policy, to the Borrower’s knowledge: (i) none
of the Improvements is outside the boundaries of any Project (or building
restriction or setback lines applicable thereto); (ii) no improvements on
adjoining properties encroach upon any Project; and (iii) no Improvements
encroach upon or violate any easements or (in any respect which would have a
Material Adverse Effect) any other encumbrance upon any Project.

 

7.28         Illegal
Activity. No portion of any Project has been purchased with proceeds of any
illegal activity and no part of the proceeds of the Loans will be used in
connection with any illegal activity.

 

7.29         Permitted Liens. None of
the Permitted Title Exceptions or Permitted Liens individually or in the aggregate
will have a Material Adverse Effect.

 

7.30         Foreign Assets Control
Regulations, Etc. Neither the execution and delivery of the Notes and the
other Loan Documents by the Borrower Parties nor the use of the proceeds of the
Loan, will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or the
Anti-Terrorism Order or any enabling legislation or executive order relating to
any of the same. Without limiting the generality of the foregoing, no Borrower
Party or any of their respective Subsidiaries (a) is or will become a blocked
person described in Section 1 of the Anti-Terrorism Order or (b) knowingly
engages or will engage in any dealings or transactions or be otherwise
associated with any person who is known or who (after such inquiry as may be
required by Applicable Law) should be known to such Borrower Party or
Subsidiary to be such a blocked person.

 

7.31         Defaults.
No Default exists under any of the Loan Documents.

 

7.32         Other
Representations. All of the representations in this Agreement and the other
Loan Documents by the Borrower and its Affiliates are true, correct and
complete in all material respects as of the date hereof.

 

7.33         True
and Complete Disclosure. The information, reports, financial statements,
exhibits and schedules furnished in writing by or on behalf of the Borrower
Parties to the Administrative Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or
thereto, do not contain any untrue statement of material fact or omit to state
any material fact known to the Borrower necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by any
Borrower Party to the Administrative Agent and the Lenders in connection with
this Agreement and the other Loan Documents and the Transactions will, to the
Borrower’s knowledge, be true, complete and accurate in every material respect,
or (in the case of projections) based on reasonable estimates, on the date as
of which such information is stated or certified. There is no fact presently
known to the Borrower or the Borrower’s Manager that could reasonably be
anticipated to have a Material Adverse Effect that has not been disclosed
herein, in the other Loan Documents or in a report, financial statement, 

 

64

 

exhibit, schedule,
disclosure letter or other writing furnished to the Administrative Agent or the
Lenders for use in connection with the Transactions.

 

7.34         Reserved.

 

7.35         Limited
Partners. The Borrower represents and warrants to the Lenders as
follows:  (a) no limited partner of
the Borrower’s Member is presently asserting, or has threatened to assert, by
action or otherwise, any claims or other liability of the Borrower’s Manager in
its capacity as the general partner of Borrower’s Member or otherwise or any
person related to such general partner with respect to the business, operations
or financing of the Borrower or the Borrower’s Member or the past, present or
future offering of any limited partnership interests in the Borrower’s Member
or the making of the Loans or the grant of the security therefor (an “LP
Claim,” which term shall also refer to any other claim that any such
limited partner may make against the Borrower’s Manager from time to time of a
nature that would indicate that any assurance contained in this Section may be
incorrect); and (b) to the extent required, the consent of such limited
partners to the Loans has been obtained and is fully effective.

 

7.36         Non-Foreign
Status. The Borrower represents and warrants to the Lenders that its tax
identification number is 20-2983805 under the Code and that the Borrower’s Member’s tax
identification number is 95-4722502 under the Code.

 

7.37         Borrower’s
Member. The Borrower’s Member is permitted under the limited
partnership agreement of the Borrower’s Member, as amended, or pursuant to consents
obtained from the limited partners of the Borrower’s Member, to enter into or authorize
Borrower to enter into the Transactions including the borrowing of the Loans by
the Borrower. There is not, and after the Closing Date the original Borrower’s
Member will not incur, any ‘Portfolio Debt’ (as such term is defined in the
limited partnership agreement of the Borrower’s Member, as amended) that is not
permitted under the limited partnership agreement of the Borrower’s Member, as
amended, or pursuant to consents obtained from the limited partners of the
Borrower’s Member.

 

ARTICLE
VIII

AFFIRMATIVE COVENANTS OF THE BORROWER

 

The Borrower covenants and agrees with the Lenders and
the Administrative Agent that, so long as any Commitment or Loan is outstanding
and until payment in full of all amounts payable by the Borrower hereunder:

 

8.01         Information.
The Borrower shall deliver to the Administrative Agent:

 

(a)           Within one hundred (100) days
after the end of each fiscal year of the Borrower’s operation of the Project,
the Borrower shall furnish to the Administrative Agent (i) an annual report
containing a summary of operating results for such year, a history of operating
results broken down by quarter and twelve (12) month periods for the Borrower and
the Borrower’s Member since inception (which may be consolidated provided that
such report 

 

65

 

contains notes clearly
identifying each item on such report which is attributable to the Borrower and the
Borrower’s Member), an investment summary broken down for each of the Borrower’s
properties, a comparison of actual results to budget for all of the Borrower’s
properties for such year, audited financial statements for such year for the
Borrower and the Borrower’s Member (which may be consolidated provided that
such financial statements contain notes clearly identifying each item on such
financial statements which is attributable to the Borrower, the Borrower’s
Member and the Projects) (including a balance sheet, statement of income,
statement of aggregate partners’ capital or member’s equity, statement of cash
flows, and notes), and the operating budget for each of the Projects for the
fiscal year then under way, all in the same form as the Borrower’s Member’s 2004
audited financial statements and related materials, which form is acceptable to
Administrative Agent, and (ii) an updated rent roll for each of the Projects in
the form delivered to the Administrative Agent prior to the Closing Date; provided however,
following a Permitted Public REIT Transfer, in lieu of the items in clauses (i)
and (ii) above, the Borrower shall furnish to the Administrative Agent, within
the later of the time period for delivery of the annual report provided above
or five (5) Business Days after the annual Form 10-K of the Permitted Public
REIT becomes publicly available, the following: 
(i) the annual Form 10-K of the Permitted Public REIT, (ii) an annual
summary of operating results for each of the Projects for such year, (iii) a
comparison of actual results to budget for each of the Projects for such year,
(iv) the operating budget for each of the Projects for the fiscal year then
under way, (v) an unaudited balance sheet and income statement for such year
for the Borrower (which may be consolidated provided that such financial
statements contain notes identifying each item on such financial statements that
is attributable to the Borrower or the Projects) and (vi) an updated rent roll
for each of the Projects;

 

(b)           Within fifty (50) days after the end of each
calendar quarter (or, in the case of the fourth calendar quarter for each
fiscal year, within one hundred (100) days after the end of such quarter), the
Borrower shall furnish to the Administrative Agent (i) a quarterly report
containing a summary of operating results for such quarter and for the twelve
(12) months ending with such quarter, a history of operating results broken
down by quarter and twelve (12) month periods for the Borrower and Borrower’s
Member since inception (which may be consolidated provided that such report
contains notes clearly identifying each item on such report which is attributable
to the Borrower and the Borrower’s Member),
an investment summary broken down for each of the Borrower’s properties, a
comparison of actual results to budget for all of the Borrower’s properties for
such quarter and for the twelve (12) months ending with such quarter, unaudited
financial statements for that quarter and for the twelve (12) months ending
with such quarter for the Borrower and the Borrower’s Member (which may be
consolidated provided that such financial statements contain notes
clearly identifying each item on such financial statements which is
attributable to the Borrower, the Borrower’s Member and the Projects) (including a balance sheet, statement of
income, statement of partners’ capital or member’s equity, statement of cash flows, and notes), and
in the same form as the most recent (as of the date hereof) quarterly report of
the Borrower’s Member provided to the Administrative Agent pursuant to Section
6.01(w), which form is acceptable to Administrative Agent and (ii) an
updated rent roll for each of the Projects in the form delivered to the
Administrative Agent in connection with the Closing; provided however,
following a Permitted Public REIT Transfer, in lieu of the items in clauses (i)
and (ii) above, the Borrower shall furnish to the Administrative Agent, within
the later of the time period provided above for delivery of the quarterly
report (which shall instead be based on the Permitted Public REIT’s fiscal
quarter) or five (5) Business 

 

66

 

Days after the Form 10-Q
of the Permitted Public REIT for such fiscal quarter becomes publicly
available, the following:  (i) the most
recent Form 10-Q of the Permitted Public REIT, (ii) a summary of operating
results for each of the Projects as of the end of the current quarter for the
year-to-date, (iii) a comparison of actual results to budget for each of the
Projects as of the end of the current quarter for the year-to-date, (iv) an
unaudited balance sheet and income statement for the Borrower as of the end of
the current quarter for the year-to-date (which may be consolidated provided
that such financial statements contain notes identifying each item on such
financial statements that is attributable to the Borrower or the Projects) and
(v) an updated rent roll for each of the Projects;

 

(c)           at
the time of the delivery of each of the financial statements provided for in subsection
(a) and subsection (b) of this Section 8.01, a certificate of
an Authorized Officer on behalf of the Borrower, certifying (i) that such
respective financial statements and reports as being true, correct, and
complete in all material respects; (ii) that such officer has no knowledge,
except as specifically stated, of any Default or if a Default has
occurred, specifying the nature thereof in reasonable detail and the action
which the Borrower is taking or proposes to take with respect thereto; (iii) that
the Borrower is in compliance with the restrictions on Indebtedness set forth
in Section 9.04; and (iv) containing a calculation in such
reasonable detail as is acceptable to the Administrative Agent setting forth
the Operating Income, Operating Expenses, Net Operating Income, Adjusted Net
Operating Income, DSCR Debt Service, and Debt Service Coverage Ratio of the
Borrower for the most recent calendar quarter;

 

(d)           from
time to time, within fifteen (15) days after request therefor, such other
information regarding the financial condition, operations, business or
prospects of the Borrower, the Projects, the other Borrower Parties, the
Bankruptcy Parties or status or terms of the Permitted Reorganization as the
Administrative Agent may reasonably request, including, without limitation, if
there is a material variation in the application of accounting principles as
further described herein (i) a description in reasonable detail of any
material variation between the application of accounting principles employed in
the preparation of any annual or quarterly financial statement under Section 8.01
and the application of accounting principles employed in the preparation of the
immediately preceding annual or quarterly financial statements and
(ii) reasonable estimates of the difference between such statements
arising as a consequence thereof; and

 

(e)           within
ten (10) Business Days after the end of each calendar month during a Low DSCR
Trigger Period, (i) an operating statement (showing monthly activity), with
such detail and in a form reasonably satisfactory to the Administrative Agent, showing
Operating Income, Operating Expenses, Net Operating Income, Adjusted Net
Operating Income, DSCR Debt Service, and the Borrower’s calculation of Excess
Cash for such month; (ii) the computations of Debt Service Coverage Ratio as
calculated as of the end of the most recent calendar month; and (iii) a
reconciliation of the results for such month and year-to-date as compared to
the Approved Annual Budget for such period.

 

(f)            In the event of a
Transfer to a Permitted REIT or its Permitted REIT Subsidiary in accordance
with Section 9.03(a)(iii), the Borrower shall furnish to the
Administrative Agent (a) if the Borrower shall have delivered a Guarantee of
the Guaranteed Line of Credit, all compliance certificates, financial
statements and all other financial and 

 

67

 

material reports required
pursuant to the terms of the Primary Credit Facility of the Permitted REIT on
or prior to the date(s) required for the delivery thereof by such Permitted
REIT pursuant to the terms of the Primary Credit Facility of such Permitted
REIT and (b) at all other times such compliance certificates, financial
statements and all other financial and material reports delivered by the
Permitted REIT pursuant to the terms of the Primary Credit Facility of the
Permitted REIT as may be requested by the Administrative Agent from time to
time, promptly following such request.

 

Any reports,
statements or other information required to be delivered under this Agreement (other
than the Form 10-K and Form 10-Q of the Permitted Public REIT, which may be
delivered in paper or electronic form) shall be delivered (1) in paper form,
(2) on a diskette, and (3) if requested by the Administrative Agent and within
the capabilities of the Borrower’s data systems without change or modification
thereto, in electronic form and prepared using a Microsoft Word for Windows or
WordPerfect for Windows files (which files may be prepared using a spreadsheet
program and saved as word processing files).

 

8.02         Notices
of Material Events. The Borrower shall give to the Administrative Agent
prompt written notice after becoming aware of any of the following:

 

(a)           the
occurrence of any Default or Event of Default, including a description of the
same in reasonable detail;

 

(b)           the
commencement (or threatened commencement in writing) of all material legal or
arbitral proceedings whether or not covered by insurance policies maintained by
or for the Borrower, the Borrower’s Member or the Borrower’s Manager in
accordance herewith (it being understood that any monetary claims asserted in
any proceeding which, individually or in the aggregate, exceeds $3,000,000
shall be deemed material), and of all proceedings by or before any Governmental
Authority of a material nature, and any material development in respect of such
legal or other proceedings, affecting any of the Borrower Parties or any
Project;

 

(c)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower Parties in an aggregate amount exceeding $250,000;

 

(d)           promptly
after the Borrower knows or has reason to believe any default has occurred by
the Borrower or tenant under any Major Lease or the Borrower has received a
written notice of default from the tenant under any Major Lease, a notice of
such default;

 

(e)           copies
of any material notices or documents pertaining to or related to the Projects,
the Borrower or the Borrower’s Member received from any Governmental Authority;
and, with respect to Major Leases only, any notices received asserting a
material default by the landlord under such lease, or relating to an assignment
of the lease by the tenant, or a subletting of all or substantially all of the
premises thereunder, or the vacation of all or a material portion of the
premises by the tenant, or a change in control of the tenant, or an election by
the tenant to terminate the lease or any other event or condition which, as
reasonably determined by the Borrower, would impact the obligation of the
tenant thereunder to pay rent or perform any of its 

 

68

 

other material
obligations for the entire term thereof as previously disclosed to the
Administrative Agent;

 

(f)            notice
of any Taking threatened in writing; or the occurrence of any Casualty Event
resulting in damage or loss in excess of $500,000; and

 

(g)           any
other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.

 

Each notice delivered under
this Section 8.02 shall be accompanied by a statement of an Authorized
Officer of the Borrower setting forth, in reasonable detail, the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.

 

8.03         Existence,
Etc. The Borrower will, and will cause each other Borrower Party to,
preserve and maintain its legal existence and all material rights, privileges,
licenses and franchises necessary for the maintenance of its existence and the
conduct of its affairs.

 

8.04         Compliance
with Laws; Adverse Regulatory Changes.

 

(a)           The
Borrower shall comply in all material respects (subject to such more stringent
requirements as may be set forth elsewhere herein) with all Applicable Laws. The
Borrower shall maintain in full force and effect all required Government
Approvals and shall from time to time obtain all Government Approvals as shall
now or hereafter be necessary under Applicable Law in connection with the
operation or maintenance of the Projects and shall comply, in all material
respects, with all such Government Approvals and keep them in full force and
effect. Upon request from time to time, the Borrower shall promptly furnish a
true, correct and complete copy of each such Government Approval to the
Administrative Agent. The Borrower shall, unless otherwise approved by the
Administrative Agent in writing, use its reasonable efforts to contest any
proceedings before any Governmental Authority and to resist any proposed
adverse changes in Applicable Law to the extent that such proceedings or
changes are directed specifically toward any Project or could reasonably be
expected to have a Material Adverse Effect, but only to the extent that
Borrower deems such action to be in the best interests of the affected Project
in the exercise of its business judgment.

 

(b)           The
Borrower, at its own expense, may contest by appropriate legal proceedings
promptly initiated and conducted in good faith and with due diligence, the
validity or application of any Applicable Law, and shall provide the
Administrative Agent with notice of any such contest of a material nature, provided
that:

 

(i)            Reserved;

 

(ii)           the Borrower shall pay any
outstanding fines, penalties or other payments under protest unless such
proceeding shall suspend the collection of such items;

 

(iii)          such proceeding shall be permitted
under and be conducted in accordance with the applicable provisions of any
other instrument governing the contest 

 

69

 

of such Applicable Laws to which the Borrower or any
such Project is subject and shall not constitute a default thereunder;

 

(iv)          no part of or interest in any Project
(or the Borrower’s interest therein) will be in danger of being sold,
forfeited, terminated, canceled or lost during the pendency of the proceeding;

 

(v)           such proceeding shall not subject the
Borrower, the Administrative Agent or any Lender to criminal or civil liability
(other than civil liability of the Borrower as to which adequate security has
been provided pursuant to clause (vi) below);

 

(vi)          unless paid under protest, the
Borrower shall have furnished such security as may be required in the
proceeding, or as may be reasonably requested by the Administrative Agent, to
insure the payment of any such items, together with all interest and penalties
thereon, which shall not be less than 110% of the maximum liability of the
Borrower as reasonably determined by the Administrative Agent; and

 

(vii)         the Borrower shall promptly upon final
determination thereof pay the amount of such items, together with all costs,
interest and penalties.

 

8.05         Insurance.

 

(a)           The
Borrower shall obtain and maintain, or cause to be maintained, for the benefit
of the Borrower, the Administrative Agent and the Lenders, insurance for each
Project providing at least the following coverages:

 

(i)            comprehensive all risk insurance (A)
in an amount equal to one hundred percent (100%) of the full replacement cost
(less deductible amounts provided for herein), which for purposes of this
Agreement shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver of
depreciation; (B) containing an agreed amount endorsement with respect to the
Improvements and personal property at each Project waiving all co-insurance
provisions (if applicable); (C) providing for no deductible in excess of
Seventy-Five Thousand Dollars ($75,000) for all such insurance coverage; and
(D) containing an “Ordinance or Law Coverage” or “Enforcement” endorsement if
any of the Improvements or the use of each Project shall at any time constitute
legal non-conforming structures or uses. In addition, the Borrower shall
obtain: (y) if any portion of the Improvements is currently or at any time in
the future located in a federally designated “special flood hazard area”, flood
hazard insurance in an amount equal to the lesser of (1) the Outstanding
Principal Amount of the Notes or (2) the maximum amount of such insurance
available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as
each may be amended or such greater amount as the Administrative Agent shall
require; and (z) subject to Sections 8.05(a)(xi) and (xii), coverage
for terrorism, terrorist acts and earthquake; provided that the
insurance pursuant to clauses (y) and (z) hereof shall be on terms (other than
with respect to deductibles and self-insurance) consistent with the
comprehensive all risk insurance policy required under this subsection (i);

 

70

 

(ii)           commercial general liability
insurance against claims for personal injury, bodily injury, death or property
damage occurring upon, in or about the Project, such insurance (A) to be on the
so-called “occurrence” form with an occurrence limit of not less than One
Million and No/100 Dollars ($1,000,000) and an aggregate limit of not less than
Two Million and No/100 Dollars ($2,000,000); (B) to continue at not less than
the aforesaid limit until required to be changed by the Administrative Agent by
reason of changed economic conditions making such protection inadequate; and
(C) to cover at least the following hazards: (1) premises and operations; (2)
products and completed operations on an “if any” basis; (3) independent
contractors; (4) blanket contractual liability for all legal contracts; and (5)
contractual liability covering the indemnities contained in the Loan Documents
to the extent the same is available;

 

(iii)          business income insurance (A) with
loss payable to the Administrative Agent (on behalf of the Lenders); (B)
covering all risks required to be covered by the insurance provided for in subsection (i)
above for a period commencing at the time of loss for such length of time as it
takes to repair or replace with the exercise of due diligence and dispatch; (C)
containing an extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and personal property has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the expiration of twelve
(12) months from the date that the Project is repaired or replaced and operations
are resumed, whichever first occurs, and notwithstanding that the policy may
expire prior to the end of such period; and (D) if there is a separate sublimit
for business income insurance, such sublimit shall be not less than one hundred
percent (100%) of the projected gross income from the Project for a period of
eighteen (18) months. The amount of such business income insurance shall be
determined prior to the date hereof and at least once each year thereafter
based on the Borrower’s reasonable estimate of the gross income from the
Project for the succeeding eighteen (18) month period. All proceeds payable to
the Administrative Agent pursuant to this subsection (iii) shall be
held by the Administrative Agent and shall be applied to debt service that is
due and payable under the Notes with the amount in excess of such debt service
during the period of business interruption held in a Controlled Account and
available for release to the Borrower upon the completion of the restoration of
the Project provided no Major Default or Event of Default then exists; provided,
however, that nothing herein contained shall be deemed to relieve the
Borrower of its obligations to pay the obligations secured by the Loan
Documents on the respective dates of payment provided for in the Notes and the
other Loan Documents except to the extent such amounts are actually paid out of
the proceeds of such business income insurance;

 

(iv)          at all times during which structural
construction, repairs or alterations are being made with respect to the
Improvements, and only if or to the extent the coverage specified herein is not
provided through the other insurance maintained by or for the benefit of the
Borrower, (A) owner’s contingent or protective liability insurance covering
claims not covered by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the insurance provided
for in subsection (i) above written in a so-called builder’s risk
completed value form (1) on a non-reporting basis, (2) against all risks
insured against pursuant to subsection (i) above, 

 

71

 

(3) including permission to occupy the Project, and
(4) with an agreed amount endorsement waiving co-insurance provisions;

 

(v)           workers’ compensation, subject to the
statutory limits of the state in which the Project is located, and employer’s
liability insurance with a limit of at least One Million and No/100 Dollars
($1,000,000) per accident and per disease per employee, and One Million and
No/100 Dollars ($1,000,000) for disease aggregate in respect of any work or
operations on or about the Project, or in connection with the Project or its
operation (if applicable);

 

(vi)          comprehensive boiler and machinery
insurance, if applicable, in amounts as shall be reasonably required by the
Administrative Agent on terms consistent with the commercial property insurance
policy required under subsection (i) above;

 

(vii)         umbrella liability insurance in
addition to primary coverage in an amount not less than Fifty Million and
No/100 Dollars ($50,000,000) per occurrence on terms consistent with the
commercial general liability insurance policy required under subsection (ii)
above and subsections (viii) and (ix) below;

 

(viii)        motor vehicle liability coverage for all
owned and non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence of One Million and No/100 Dollars ($1,000,000);

 

(ix)           if applicable to a particular
Project, so-called “dramshop” insurance or other liability insurance required
in connection with the sale by the Borrower of alcoholic beverages;

 

(x)            insurance against employee
dishonesty in an amount not less than one (1) month of Operating Income from
the Project and with a deductible not greater than Ten Thousand and No/100
Dollars ($10,000.00);

 

(xi)           such coverages with respect to
terrorism and terrorist acts as are then being maintained by prudent owners of
institutionally owned “Class A” office buildings in the market where the Projects
are located as reasonably determined by the Borrower and the Administrative
Agent; it being acknowledged and agreed that the Administrative Agent and the
Lenders have accepted the Borrower’s existing coverages, deductibles and
self-insurance limits in effect on the Closing Date with respect to terrorism
and terrorist acts;

 

(xii)          such coverages with respect to
earthquake as are then being maintained by prudent owners of institutionally
owned “Class A” office buildings in the market where the Projects are located
as reasonably determined by the Borrower and the Administrative Agent; it being
acknowledged and agreed that the Administrative Agent and the Lenders have
accepted the Borrower’s existing coverages, deductibles and self-insurance
limits in effect on the Closing Date with respect to earthquake; and

 

(xiii)         upon sixty (60) days’ notice, such
other reasonable insurance and in such reasonable amounts as the Administrative
Agent from time to time may 

 

72

 

reasonably request against such other insurable
hazards which at the time are commonly insured against for property similar to
the Project located in or around the region in which the Project is located.

 

(b)           All
insurance provided for in Section 8.05(a) shall be obtained under
valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”) and, to the extent not specified above, shall be
subject to the approval of the Administrative Agent as to deductibles, loss
payees and insureds. Not less than fifteen (15) days prior to the expiration
dates of the Policies theretofore furnished to the Administrative Agent,
certificates of insurance evidencing the Policies accompanied by evidence
satisfactory to the Administrative Agent of payment of the premiums then due
thereunder (the “Insurance Premiums”), shall be delivered by the Borrower
to the Administrative Agent; provided, however, that no Event of
Default shall result from the Borrower’s failure to deliver or cause to be
delivered such certificates or other evidence unless (i) on or prior to the
expiration date of the applicable Policy, the Administrative Agent shall not
have obtained certificates or other evidence satisfactory to it confirming that
the Policies required hereunder shall have been extended for an additional
period or shall have been replaced for an additional period with replacement
Policies that comply with the requirements set forth in this Section 8.05
and (ii) on or prior to the fifth (5th) Business Day after the expiration
of such expiring Policy, the Administrative Agent shall not have received
certificates of insurance evidencing the extension of the existing Policies or
replacement Policies for an additional period accompanied by evidence
satisfactory to the Administrative Agent of payment of the Insurance Premiums
then due thereunder.

 

(c)           Each
Policy shall (i) provide that adjustment and settlement of any claim equal to
or in excess of the Insurance Threshold Amount shall be subject to the approval
of the Administrative Agent in accordance with Section 10.01(b); provided
that so long as no Event of Default exists, the Borrower may, upon notice to
the Administrative Agent, settle and adjust any claim with respect to a
Casualty Event in excess of the Insurance Threshold Amount without the prior
consent of the Administrative Agent and the Borrower is hereby authorized to
collect the Insurance Proceeds with respect to any such claim; provided
that such adjustment is carried out in a competent and timely manner; (ii)
include permission by the insurer for the parties to the transaction to waive
all rights of subrogation against each other; (iii) to the extent such
provisions are reasonably obtainable, provide that such insurance shall not be
impaired or invalidated by virtue of (1) any act, failure to act or negligence
of, or violation of declarations, warranties or conditions contained in such
policy by, the Borrower, the Administrative Agent, the Lenders or any other
named insured, additional insured, or loss payee, except for the willful
misconduct of the Administrative Agent or the Lenders knowingly in violation of
the conditions of such Policy or (2) any foreclosure or other proceeding or
notice of sale relating to the Projects; (iv) be subject to a deductible, if
any, not greater than $10,000 (except as otherwise specifically provided in or
permitted by Section 8.05(a)); (v) contain an endorsement providing that
none of the Administrative Agent, the Lenders or the Borrower shall be, or
shall be deemed to be, a co-insurer with respect to any risk insured by such
Policy; (vi) include effective waivers by the insurer of all claims for
insurance premiums against any loss payees, additional insureds and named
insureds (other than the Borrower Parties); (vii) provide that if all or any
part of such Policy shall be canceled or terminated, or shall expire, the
insurer will forthwith give notice thereof to each named insured, additional
insured and loss payee and that no cancellation, termination, expiration,
reduction in amount of, or material change (other than an increase) in, 

 

73

 

coverage thereof shall be
effective until at least thirty (30) days after receipt by each named insured,
additional insured and loss payee of written notice thereof; and (viii) provide
that the Administrative Agent shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder.

 

(d)           If
any such Insurance Proceeds required to be paid to the Administrative Agent are
instead made payable to the Borrower, the Borrower hereby appoints the
Administrative Agent as its attorney-in-fact, irrevocably and coupled with an
interest, to endorse and/or transfer any such payment to the Administrative
Agent (on behalf of the Lenders).

 

(e)           Except
as otherwise provided by the terms of the blanket insurance policies maintained
by the Borrower and/or its Affiliates with respect to the Borrower and the
Projects as of the Closing Date, or comparable blanket policies that may be
obtained by the Borrower and/or its Affiliates after the Closing Date, any
blanket insurance Policy shall specifically allocate to the Projects the amount
of coverage from time to time required hereunder and shall otherwise provide
the same protection as would a separate Policy insuring only the Projects in
compliance with the provisions of Section 8.05(a).

 

(f)            All
Policies of insurance provided for or contemplated by Section 8.05(a)
shall be primary coverage and, except for the Policy referenced in Section 8.05(a)(v),
shall name the Borrower as the insured and the Administrative Agent (on behalf
of the Lenders) and its successors and/or assigns as the additional insured (or
in the case of property insurance, as the “mortgagee”), as its interests may
appear, and in the case of property damage, boiler and machinery, flood,
earthquake and terrorism insurance, shall contain a standard non-contributing
mortgagee endorsement in favor of the Administrative Agent providing that the
loss thereunder shall be payable to the Administrative Agent. The Borrower
shall not procure or permit any of its constituent entities to 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 the Administrative
Agent or the Borrower to collect any proceeds under any of the Policies. All
polices must EXACTLY state the following: Eurohypo AG, New York Branch Its
successors and assigns 1114 Avenue of the Americas 29th Floor New
York, NY 10036 Attn: Director of Portfolio Operations.

 

(g)           Without
limiting the obligations of the Borrower under the foregoing provisions of this
Section 8.05, if at any time the Administrative Agent is not in receipt
of written evidence that all insurance required hereunder is in full force and
effect, the Administrative Agent shall have the right, without notice to the
Borrower, to take such action as the Administrative Agent deems necessary to
protect its interest in the Projects, including, without limitation, the
obtaining of such insurance coverage as the Administrative Agent in its sole
discretion deems appropriate and all premiums incurred by the Administrative
Agent in connection with such action or in obtaining such insurance and keeping
it in effect shall be paid by the Borrower to the Administrative Agent upon
demand and until paid shall be secured by the Deed of Trust and shall bear
interest at the Post-Default Rate.

 

(h)           In
the event of foreclosure of the Deed of Trust or other transfer of title to any
Project in extinguishment in whole or in part of the obligations thereunder,
all right, title and interest of the Borrower in and to the Policies that are
not blanket Policies then in force 

 

74

 

concerning such Project and
all proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or the Administrative Agent or other transferee in the event of
such other transfer of title.

 

(i)            The
Polices shall be issued by financially sound and responsible insurance
companies authorized to do business in the state in which the Projects are
located and be approved by the Administrative Agent. The insurance companies
shall have (i) a general policy and claims paying ability rating of A or better
and a financial class of IX or better (and, as to the coverages for terrorism,
terrorist acts and earthquake, a general policy and claims paying ability
rating of A minus or better and a financial class of VII or better) by A.M.
Best Company, Inc.; provided, however, that the Borrower shall be
permitted to maintain (at levels other than the primary layer of insurance) up
to twenty percent (20%) of the total required all-risk insurance coverage
required under subsection 8.05(a)(i) with insurance companies having a
general policy and claims paying ability rating of less than A and a financial
class of less than IX provided such companies have at least a general policy
and claims paying ability rating of A minus or better and a financial class of
VII or better, provided such insurance companies are also issuing earthquake
coverage to the Borrower or (ii) an investment grade rating for claims paying
ability of “AA” by S&P or the equivalent rating by one or more credit
rating agencies approved by the Administrative Agent.

 

8.06         Real
Estate Taxes and Other Charges.

 

(a)           Subject
to the provisions of subsection (b) of this Section 8.06, the
Borrower shall pay all Real Estate Taxes and Other Charges now or hereafter
levied or assessed or imposed against each Project or any part thereof before
fine, penalty, interest or cost attaches thereto. Subject to the provisions of subsection
(b) of this Section 8.06, upon the request of the Administrative
Agent, the Borrower shall furnish to the Administrative Agent receipts for, or
other evidence reasonably satisfactory to the Administrative Agent of, the
payment of Real Estate Taxes and Other Charges in compliance with this Section 8.06.

 

(b)           After
prior written notice to the Administrative Agent, the Borrower, at its own
expense, may contest by appropriate legal proceedings or other appropriate
actions, promptly initiated and conducted in good faith and with due diligence,
the amount or validity or application in whole or in part of any Real Estate
Taxes and Other Charges, provided that:

 

(i)            Reserved;

 

(ii)           the Borrower shall pay the Real
Estate Taxes and Other Charges under protest unless such proceeding shall
suspend the collection of the Real Estate Taxes and Other Charges;

 

(iii)          such proceeding shall be permitted
under and be conducted in accordance with the applicable provisions of any
other instrument governing the contest of Real Estate Taxes or Other Charges to
which the Borrower or the Projects is subject and shall not constitute a
default thereunder;

 

(iv)          such proceeding shall be conducted in
accordance with all Applicable Laws;

 

75

 

(v)           neither the Projects nor any part
thereof or interest therein will, in the reasonable opinion of the
Administrative Agent, be in danger of being sold, forfeited, terminated,
cancelled or lost during the pendency of the proceeding;

 

(vi)          unless paid under protest, the
Borrower shall have furnished such security as may be required in the
proceeding, or as may be reasonably requested by the Administrative Agent (but
in no event less than 110% of the Real Estate Taxes or Other Charges being
contested), to insure the payment of any such Real Estate Taxes and Other
Charges, together with all interest and penalties thereon; and

 

(vii)         the Borrower shall promptly upon final
determination thereof or upon the failure of the existence of (ii), (iii),
(iv) or (v) above pay the amount of such Real Estate Taxes or Other
Charges, together with all costs, interest and penalties.

 

8.07         Maintenance
of the Projects; Alterations. The Borrower shall:

 

(i)            maintain or cause to be maintained
each Project in good condition and repair in a manner consistent with a Class-A
office building located in the relevant submarket in which such Project is
located in Los Angeles County, California, and make all reasonably necessary
repairs or replacements thereto;

 

(ii)           except for work that constitutes
required work under Section 8.21, not remove, demolish or structurally
alter, or permit or suffer the removal, demolition or structural alteration of,
any of the Improvements or make any alteration that may have a Material Adverse
Effect or involve a cost in the aggregate for such alteration and all other
alterations involving a single work of improvement (or related group of
improvements) which is anticipated to exceed the lesser of (A) $5,000,000 or
(B) ten percent (10%) of the Appraised Value of such Project, without the prior
consent of the Administrative Agent; provided, however, that the
Administrative Agent’s consent shall not be required for tenant improvement
work performed pursuant to the terms and provisions of an Approved Lease which
(upon completion of such work) does not adversely affect any structural
component of any Improvements, any utility or HVAC system contained in any Improvements
or the exterior of any building (excluding signage or other alterations that
would not otherwise require the consent of the Administrative Agent under this Section
8.07(ii) in the absence of this proviso) constituting a part of any
Improvements at any Project; and provided, further, that the
Administrative Agent’s consent shall not be unreasonably withheld for any
alterations that are required by Applicable Law and otherwise require the
consent of the Administrative Agent under this Section 8.07(ii);

 

(iii)          complete promptly and in a good and
workmanlike manner any Improvements which may be hereafter constructed and,
subject to the terms of the Loan Documents (including, without limitation, Section
10.03), promptly restore (in compliance with Section 10.03) in
like manner any portion of the Improvements which may be damaged or destroyed
thereon from any cause whatsoever, and pay when due all claims for labor
performed and material furnished therefor, subject to the Borrower’s right to
contest any such claims (as long as, with respect to any claim for which a 

 

76

 

mechanic’s lien has been filed, such contested claims
have been bonded over to the satisfaction of the Administrative Agent within
thirty (30) days of the date of filing);

 

(iv)          not commit, or permit, any waste of
the Projects; and

 

(v)           not remove any item from the Projects
without replacing it with a comparable item of equal quality, value and
usefulness, except that the Borrower may sell or dispose of in the ordinary
course of the Borrower’s business any property which is obsolete.

 

8.08         Further
Assurances. The Borrower will, and will cause each of the other Borrower
Parties to, promptly upon request by the Administrative Agent, execute any and
all further documents, agreements and instruments, and take all such further
actions which may be required under any applicable law, or which the
Administrative Agent may reasonably request, to effectuate the Transactions,
all at the sole cost and expense of the Borrower. The Borrower, at its sole
cost and expense, shall take or cause to be taken all action required or
requested by the Administrative Agent to maintain and preserve the Liens of the
Security Documents and the priority thereof. The Borrower shall from time to
time execute or cause to be executed any and all further instruments, and register
and record such instruments in all public and other offices, and shall take all
such further actions, as may be necessary or requested by the Administrative
Agent for such purposes, including timely filing or refiling all continuations
and any assignments of any such financing statements, as appropriate, in the
appropriate recording offices.

 

8.09         Performance
of the Loan Documents. The Borrower shall observe, perform and satisfy all
the terms, provisions, covenants and conditions required to be observed,
performed or satisfied by it under the Loan Documents, and shall pay when due
all costs, fees and expenses required to be paid by it under the Loan
Documents.

 

8.10         Books
and Records; Inspection Rights. The Borrower will, and will cause each of
the other Borrower Parties to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause each
of the other Borrower Parties to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties (subject to the proviso set forth in Section 8.11(a)),
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times (during normal business hours) and as often as
reasonably requested.

 

8.11         Environmental
Compliance.

 

(a)           Environmental
Covenants. The Borrower covenants and agrees that:

 

(i)            all uses and operations on or of
each Project, whether by the Borrower or any other Person, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto;

 

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(ii)           except for Releases incidental to the
Use of Hazardous Substances permitted by clause (iii) below and in
compliance with all Applicable Laws, the Borrower shall not permit a Release of
Hazardous Substances in, on, under or from any Project;

 

(iii)          the Borrower shall not knowingly
permit Hazardous Substances in, on, or under any Project, except those that are
in compliance with all Environmental Laws and of types and in quantities
customarily used in the ownership, operation and maintenance of buildings
similar to the Projects (i.e., materials used in cleaning and other building
operations) and shall undertake to supervise and inspect activities occurring
on the Projects as may be reasonably prudent to comply with the foregoing
obligation;

 

(iv)          except as disclosed in Schedule
8.11 or as specifically described in the Environmental Reports, the
Borrower shall not permit any underground storage tanks to be in, on, or under
any Project, and shall operate, maintain, repair and replace any such
underground storage tank so disclosed in compliance with all Applicable Laws;

 

(v)           Reserved;

 

(vi)          the Borrower shall keep each Project
free and clear of all Liens and other encumbrances imposed pursuant to any
Environmental Law, whether due to any act or omission of the Borrower or any
other Person (collectively, “Environmental Liens”);

 

(vii)         notwithstanding clause (iii)
above, the Borrower shall not, or knowingly permit any other Person to, install
any asbestos or asbestos containing materials on any Project, and shall upon
and following the Closing Date implement, comply with and maintain in effect an
operations and maintenance program with respect to any existing asbestos or
asbestos containing materials located at any Project;

 

(viii)        the Borrower shall cause the Remediation
of such Hazardous Substances present on, under or emanating from any Project,
or migrating onto or into any Project, in accordance with this Agreement and
applicable Environmental Laws subject to the right to contest such Remediation
in accordance with Section 7(a) of the Environmental Indemnity; and

 

(ix)           the Borrower shall provide the
Administrative Agent, the Lenders and their representatives (A) with
access, upon prior reasonable notice, at reasonable times (during normal
business hours) to all or any portion of any Project for purposes of
inspection; provided that such inspections shall not unreasonably
interfere with the operation of such Project or the tenants or occupants
thereof, and shall be subject to the rights of tenants under their Leases, and
the Borrower shall cooperate with the Administrative Agent, the Lenders and
their representatives in connection with such inspections, including, but not
limited to, providing all relevant information and making knowledgeable persons
available for interviews and (B) promptly upon request, copies of all
environmental investigations, studies, audits, reviews or other analyses
conducted by or that are in the possession or control of the Borrower in
relation to any Project, whether heretofore or hereafter obtained.

 

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(b)           Environmental
Notices. The Borrower shall promptly provide notice to the Administrative
Agent of:

 

(i)            all Environmental Claims asserted or
threatened against the Borrower or any other Person occupying any Project or
any portion thereof or against any Project which become known to the Borrower;

 

(ii)           the discovery by the Borrower of any
occurrence or condition on any Project or on any real property adjoining or in
the vicinity of any Project which could reasonably be expected to lead to an
Environmental Claim against the Borrower, any Project, the Administrative Agent
or any of the Lenders;

 

(iii)          the commencement or completion of any
Remediation at any Project; and

 

(iv)          any Environmental Lien filed against
any Project.

 

In
connection therewith, the Borrower shall transmit to the Administrative Agent
copies of any citations, orders, notices or other written communications
received from any Person and any notices, reports or other written
communications and copies of any future Environmental Reports whether or not submitted
to any Governmental Authority with respect to the matters described above.

 

8.12         Management
of the Projects.

 

(a)           The
Borrower shall (i) cause each Project to be managed by the Property Manager in
accordance with the Property Management Agreement, (ii) promptly perform and
observe all of the material covenants required to be performed and observed by
the Borrower under the Property Management Agreement and do all things
necessary to preserve and to keep unimpaired its material rights thereunder,
(iii) promptly notify the Administrative Agent of any material default under
the Property Management Agreement of which it is aware and (iv) promptly
enforce the performance and observance of all of the material covenants
required to be performed and observed by the Property Manager under the
Property Management Agreement.

 

(b)           If
(i) an Event of Default exists, (ii) the Property Manager is
insolvent, or (iii) the Property Manager is in default of any material covenant
or obligation under the Property Management Agreement beyond the expiration of
any applicable grace period set forth therein, the Borrower shall, at the
request of the Administrative Agent, promptly terminate the Property Management
Agreement and replace the Property Manager with a property manager approved by
the Administrative Agent pursuant to a Property Management Agreement on terms
and conditions reasonably satisfactory to the Administrative Agent.

 

8.13         Leases.
The Borrower shall (a) upon the Closing Date, assign to the Administrative
Agent (on behalf of the Lenders) any and all Leases, and/or all Rents payable
thereunder, including, but not limited to, any Lease which is now in existence
or which may be executed after the Closing Date, (b) promptly perform and
fulfill, or cause to be performed and fulfilled, each and every material term
and provision of the Borrower’s obligations under the Leases, including the performance
of any tenant improvement work required with respect 

 

79

 

thereto, (c) give
to the Administrative Agent a copy of each notice of default given to any
tenant under a Major Lease or sent by any tenant thereunder to the Borrower,
(d) consistent with good business practices and in the best interests of
the affected Project, enforce its rights with regard to all Leases unless
otherwise approved by the Administrative Agent, (e) use its commercially reasonable
efforts to lease the Projects, (f) diligently enforce the terms of each Lease
with respect to any construction work to be performed by the tenant thereunder
so that such work is performed in a manner which will cause a minimum amount of
disruption to the tenants then in occupancy at any such Project and in a manner
so as not to cause a default by the Borrower under any other tenants’ Leases or
provide the basis for any abatement or set off by any other tenant of the rent
payable under any such Lease, or a claim by any other tenant for breach of
warranty of habitability or similar claim and (g) prior to entering into any
new Lease with a retail tenant provide a copy of the Borrower’s standard form
of retail lease to the Administrative Agent for review and approval, which
approval shall not be unreasonably withheld or delayed.

 

8.14         Tenant
Estoppels. At the Administrative Agent’s request, at any time while an
Event of Default exists and otherwise from time to time upon the joint
agreement of the Borrower and the Administrative Agent, with each acting
reasonably, the Borrower shall request and use commercially reasonable efforts
to obtain and furnish to the Administrative Agent written estoppels in form and
substance satisfactory to the Administrative Agent, executed by tenants under
Leases in any Project and confirming the term, rent, and other provisions and
matters relating to the Leases. Borrower further hereby agrees that, while an
Event of Default exists, the Administrative Agent may exercise all rights of
the Borrower under the Leases to request the delivery of estoppels from the
tenants thereunder.

 

8.15         Subordination,
Non-Disturbance and Attornment Agreements. The Borrower shall use
commercially reasonable efforts to provide to the Administrative Agent SNDA
Agreements executed by each tenant under a Major Lease prior to the Closing
Date; provided, however, that in addition to the obligations set
forth in Section 9.09(c), if the Borrower does not obtain all such SNDA
Agreements by the Closing Date, the Borrower shall continue to use commercially
reasonable efforts to obtain such SNDA Agreements after the Closing Date.

 

8.16         Operating
Plan and Budget.

 

(a)           Commencing
with the budget for the calendar year 2006 and then annually thereafter, the
Borrower shall submit to the Administrative Agent an annual budget for each
Project (each an “Annual Budget”), in form and substance reasonably
satisfactory to the Administrative Agent setting forth in detail budgeted
monthly Operating Income and monthly Operating Expenses for each such Project
(which may be in the form of the calendar year 2005 budget for each Project
provided to the Administrative Agent prior to the Closing Date). The Annual
Budget for each year shall be delivered together with the annual financial
statement for the preceding year pursuant to Section 8.01(a). During any
Low DSCR Trigger Period but not otherwise, the Administrative Agent shall have
the right to approve such Annual Budget (including, without limitation, the
Annual Budget for the portions of the calendar year in which such Low DSCR
Trigger Period occurs following after the commencement of such Low DSCR Trigger
Period). Within fifty (50) days following the end of any calendar quarter which
comprises a Low DSCR Trigger Period, the Borrower shall deliver to the
Administrative Agent for its approval the Annual Budget (in the format as
described above) for the calendar year in 

 

80

 

which such Low DSCR
Trigger Period occurs (together with a reconciliation to that Annual Budget of
actual revenues and expenses year-to-date), and shall thereafter deliver to
Administrative Agent for its approval the Annual Budget (in the format as
described above) proposed by the Borrower for the succeeding calendar year, by
no later than the November 15 preceding such calendar year. The Administrative
Agent shall not unreasonably withhold its approval of any Annual Budget as
required hereunder; provided, however, that if during any Low DSCR Trigger
Period the actual monthly Operating Expenses exceed budgeted Operating Expenses
in any month during any period by more than ten percent (10%), the
Administrative Agent shall have the right to require the Borrower to submit for
its approval a revised Annual Budget for review and approval by the
Administrative Agent in its sole discretion. If the Administrative Agent
objects to any proposed Annual Budget for which approval is required hereunder,
the Administrative Agent shall advise the Borrower of such objections within fifteen
(15) Business Days after receipt thereof (and deliver to the Borrower a
reasonably detailed description of such objections), and the Borrower shall
within five (5) days after receipt of notice of any such objections revise such
Annual Budget and resubmit the same to the Administrative Agent (such procedure
to be repeated until such time as the Administrative Agent shall approve such
Annual Budget). Each such Annual Budget submitted to and (to the extent that
such approval is required hereunder) approved by the Administrative Agent in
accordance with terms hereof, as well as the budget for the current calendar
year approved by the Administrative Agent on the Closing Date, shall
hereinafter be referred to as an “Approved Annual Budget”. Until such
time that the Administrative Agent has approved a proposed Annual Budget for
which its approval is required hereunder, the most recently Approved Annual
Budget shall apply for purposes of this Section 8.16; provided
that such Approved Annual Budget shall be adjusted to reflect actual increases
in real estate taxes, insurance premiums, utilities expenses and other fixed
costs and shall otherwise be adjusted to reflect any change during the
preceding year in the Consumer Price Index. Notwithstanding the foregoing, the
Administrative Agent and the Lenders acknowledge that the Borrower is not
required to operate under the terms of an Approved Annual Budget during any
period other than a Low DSCR Trigger Period.

 

(b)           During
any Low DSCR Trigger Period, the Borrower may at any time propose an amendment
to an Approved Annual Budget for any Project for the remainder of the calendar
year in which such Low DSCR Trigger Period has occurred, and, when approved as
provided below, such amended Approved Annual Budget for such Project shall be
deemed to be and shall be effective as the Approved Annual Budget for such
Project for such calendar year. Prior to making any expenditures not reflected
in any current Approved Annual Budget in excess of ten percent (10%) of the
budgeted amount therefor, the Borrower shall propose an amendment to such
Approved Annual Budget to the Administrative Agent for its approval in
accordance with the standards for the granting or withholding of consent to
Annual Budgets set forth in Section 8.16(a). The Administrative Agent shall
have fifteen (15) Business Days after receipt of any proposed amendment to such
Approved Annual Budget to approve or disapprove such proposed amendment.

 

8.17         Operating
Expenses. The Borrower shall pay all known costs and expenses of operating,
maintaining, leasing and otherwise owning the Projects on a current basis and
before same become delinquent (subject however to the other provisions of this
Agreement and the other Loan Documents), including all interest, principal (when
due) and other sums required to be paid under this Agreement, the other Loan
Documents and the Hedge Agreement, 

 

81

 

before utilizing
any revenues derived or to be derived from or in respect of the Projects for
any other purpose, including distributions or other payments to the Borrower’s
Member.

 

8.18         Margin
Regulations. No part of the proceeds of the Loans will be used for the
purpose of purchasing or acquiring any “margin stock” within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System or for any
other purpose which would be inconsistent with such Regulation T, U, X or any
other Regulations of such Board of Governors, or for any purposes prohibited by
Legal Requirements.

 

8.19         Hedge
Agreements.

 

(a)           The
Borrower shall obtain, or cause to be obtained by an Other Swap Pledgor, no
later than thirty (30) days after the Closing Date and will at all times
thereafter maintain, or cause to be maintained by an Other Swap Pledgor, in
full force and effect one or more Hedge Agreements in the aggregate notional
amount equal to one hundred percent (100%) of the Outstanding Principal Amount
of the Loans from time to time (the “Aggregate Notional Amount”) approved
by the Administrative Agent in its reasonable discretion with (i) Eurohypo
or its Affiliates or (ii) one or more other banks or insurance companies
as counterparties (each a “Third-Party Counterparty”), which is
effective to cause the All-in-Rate as to the Aggregate Notional Amount
commencing no later than the date that is thirty (30) days after the Closing
Date (or, if such day is not a Business Day, the first Business Day thereafter)
to be not in excess of eight percent (8.0%) per annum through the Hedging
Termination Date. Upon the Closing Date, the Borrower shall deliver, or cause
to be delivered by an Other Swap Pledgor, a Hedge Agreement Pledge,
substantially in the form of Exhibit G-1 attached hereto, together with,
within thirty (30) days after the Closing Date, the applicable bid package,
confirmation and other documentation for such Hedge Agreement (including,
without limitation, a certificate from an Authorized Officer of the Borrower
certifying that a Hedge Agreement has been entered into on the terms set forth in
the confirmation) as may be reasonably acceptable to the Administrative Agent
evidencing compliance with the Borrower’s obligations under the provisions of
this Section 8.19, and within ten (10) days after the delivery of each
such Hedge Agreement (or within the thirty (30) day period referred to
above)  shall deliver the applicable
counterparty acknowledgment. Any Hedge Agreement shall require monthly fixed
rate and floating rate payments and be based on a LIBO Rate of interest having,
at the Borrower’s option, successive Interest Periods (an “Interest Rate
Hedge Period”) of one, two, three, six or twelve months or such other
Interest Periods satisfactory to the Administrative Agent in its reasonable
discretion. Notwithstanding anything to the contrary contained in this Section
8.19, the Borrower or any Other Swap Pledgor shall be entitled to enter
into one or more Hedge Agreements in excess of the Aggregate Notional Amount,
up to the total amount of the Commitments or providing interest rate protection
for periods that extend beyond the Hedging Termination Date (each such
agreement, but only to the extent that it, after giving effect to all other
Hedge Agreements maintained pursuant to this Section 8.19(a), relates to
a notional amount in excess of the Aggregate Notional Amount or provides
interest rate protection for periods that extend beyond the Hedging Termination
Date, is referred to herein as an “Excess Hedge Agreement”) on terms
acceptable to the Borrower or such Other Swap Pledgor; provided, however,
that Borrower shall deliver, or cause to be delivered by an Other Swap Pledgor,
upon the Administrative Agent’s request in accordance with the time
requirements set forth in this Section 8.19(a), a Hedge Agreement
Pledge with respect to each Excess Hedge Agreement, substantially in the form
of 

 

82

 

Exhibit G-2
attached hereto, together with the counterparty’s acknowledgment and other
instruments provided to be delivered thereunder.

 

(b)           The
Borrower’s obligations under any Hedge Agreement shall not be secured by the
Deeds of Trust and shall not be secured by any Lien on or in all or any portion
of the collateral under the Security Documents, any direct or indirect interest
in the Borrower or any other Property (other than as permitted pursuant to Section
9.02(i)).

 

(c)           Any
Hedge Agreement with a Third-Party Counterparty is herein called a “Third-Party
Hedge Agreement.”  With respect to each
Third-Party Hedge Agreement maintained with respect to the Aggregate Notional
Amount and each Excess Hedge Agreement pledged to the Administrative Agent
pursuant to Section 8.19(a):  (i)
the Third-Party Counterparty providing such Third-Party Hedge Agreement must
have a long term credit rating no lower than “A” from S&P or “A2” from
Moody’s at the time of entry into such Third-Party Hedge Agreement; provided,
however, if there is a difference in the then current S&P rating and
the Moody’s rating, the lesser rating shall be applicable; (ii) the form
and substance thereof must be satisfactory to the Administrative Agent in its
reasonable discretion and in all respects and (iii) each counterparty
thereunder shall have delivered to the Administrative Agent a counterparty’s
acknowledgment in the form attached to the Hedge Agreement Pledge applicable
thereto (or in such other form as may be acceptable to the Administrative Agent
in its reasonable discretion).

 

(d)           Reserved.

 

(e)           If
the Borrower fails for any reason or cause whatsoever to secure and maintain,
or cause to be secured and maintained by an Other Swap Pledgor, a Hedge
Agreement with respect to the Aggregate Notional Amount as and when required to
do so hereunder, such failure shall constitute an Event of Default and the
Administrative Agent shall be entitled to exercise all rights and remedies
available to it under this Agreement (for the benefit of the Lenders) and the
other Loan Documents or otherwise, including the right (but not the obligation)
of the Administrative Agent to secure or otherwise enter into one or more Hedge
Agreements with respect to the Aggregate Notional Amount with a Lender for and
on behalf of the Borrower without such action constituting a cure of such Event
of Default and without waiving the Administrative Agent’s or the Lenders’
rights arising out of or in connection with such Event of Default. If the
Administrative Agent shall enter into a Hedge Agreement with a Lender in
accordance with its right to do so pursuant to this subsection (e), then
(i) the terms and provisions of any such Hedge Agreement, including the term
thereof, shall be determined by the Administrative Agent in its sole discretion
(except that the maximum notional amount of all such Hedge Agreements shall not
exceed the Aggregate Notional Amount) and (ii) the Borrower shall pay all of
the Administrative Agent’s costs and expenses in connection therewith,
including any fees charged by the applicable counterparty, attorneys’ fees and
disbursements, and the cost of additional title insurance in an amount
determined by the Administrative Agent to be necessary to protect the
Administrative Agent and the Lenders from potential funding losses under any
Hedge Agreement provided by a Lender.

 

(f)            Reserved.

 

83

 

(g)           If
the Borrower or Other Swap Pledgor is entitled to receive a payment upon the
termination of any Hedge Agreement required by this Section 8.19, or,
while any Event of Default exists, under any Excess Hedge Agreement pledged to
the Administrative Agent pursuant to Section 8.19(a) (it being
understood that any termination payment paid with respect to any Excess Hedge
Agreement shall be delivered to the Borrower or Other Swap Pledgor at any time
while an Event of Default does not exist) such payment shall be delivered to
the Administrative Agent and applied by the Administrative Agent to any amounts
due to the Administrative Agent or the Lenders under the Loan Documents
evidencing the Loans (it being understood that any such payment applied to the
principal of the Loans shall be deemed a prepayment of such principal, and
shall be accompanied by any applicable prepayment premium resulting from such
prepayment, or such termination payment shall be applied in part to pay such
principal and in part to pay such prepayment premium) in such order and
priority as the Administrative Agent shall determine in its sole discretion. Notwithstanding
the foregoing, if (i) at any time upon or following any principal
prepayment made pursuant to Section 2.06 the Outstanding Principal
Amount is reduced and the Borrower or Other Swap Pledgor elects at its option to
terminate or partially to terminate, or to reduce the notional amount of, any
Hedge Agreement (or is required under the terms of such Hedge Agreement to do
so) in a notional amount (in either such case) not exceeding, respectively, the
amount by which the aggregate notional amount in effect under the Hedge
Agreements then maintained pursuant hereto (other than Excess Hedge Agreements
unless pledged pursuant to the Hedge Agreement Pledge substantially in the form
of Exhibit G-1 attached hereto) exceeds the Aggregate Notional Amount then
required to be hedged pursuant hereto or (ii) the Borrower or Other Swap
Pledgor elects, in full compliance with the terms of each Hedge Agreement
Pledge, to deliver to the Administrative Agent, in substitution for a Hedge
Agreement, a substitute Hedge Agreement, then the Borrower or Other Swap
Pledgor shall have the right to do so, and if the Borrower or Other Swap
Pledgor is entitled (in the case of either (i) or (ii) above) to receive a
termination payment from the counterparty in connection therewith, then, provided
that no Event of Default then exists, the Borrower or Other Swap Pledgor shall
have the right to receive and retain such termination payment free and clear of
the Lien of the Hedge Agreement Pledge, provided, that, after giving effect to
any such termination or substitution, the Borrower remains in compliance with
its obligations under Section 8.19(a) with respect to the maintenance of
Hedge Agreements with respect to the Aggregate Notional Amount then required to
be hedged pursuant hereto and has complied (or caused the Other Swap Pledgor to
comply) with the applicable conditions precedent set forth in Section 6(e)
of the Hedge Agreement Pledge and the certification obligations with respect
thereto set forth in the applicable Hedge Agreement Pledge and the
Acknowledgment of Security Interest delivered pursuant thereto. The Borrower or
Other Swap Pledgor shall have the right to terminate, reduce the notional
amount of or modify any Excess Hedge Agreement and to receive any payments from
the counterparty thereunder resulting therefrom, provided that if an Event of
Default exists and such Excess Hedge Agreement has been pledged to the
Administrative Agent, then the rights and obligations of the Borrower (or Other
Swap Pledgor) and the Administrative Agent with respect thereto shall be the
same as their respective rights and obligations with respect to Hedge
Agreements maintained with respect to the Aggregate Notional Amount.

 

(h)           Upon
securing any Hedge Agreement required under this Section 8.19, or any
Excess Hedge Agreement pledged to the Administrative Agent pursuant to Section
8.19(a) the Borrower agrees that the economic and other benefits of such
Hedge Agreement and all of 

 

84

 

the other rights of the
Borrower or Other Swap Pledgor thereunder shall be collaterally assigned to the
Administrative Agent as additional security for the Loans for the ratable
benefit of the Lenders, pursuant to a Hedge Agreement Pledge. All Hedge
Agreement Pledges shall be accompanied by (i) Uniform Commercial Code
financing statements, in duplicate, with respect to such pledges and (ii) within
ten (10) days after delivery of the applicable Hedge Agreement Pledge (or
within such longer period as provided in Section 8.19(a) above), a
counterparty’s acknowledgment in the form attached to the Hedge Agreement
Pledge applicable thereto (or in such other form as may be acceptable to the
Administrative Agent in its reasonable discretion) from each counterparty under
each Hedge Agreement.

 

(i)            Notwithstanding
the provisions of Section 8.19(a), following the delivery of any notice
of full or partial prepayment delivered by the Borrower pursuant to Section
2.06(a) or any notice of a proposed release of a Project pursuant to Section
2.06(c), Borrower’s obligation to maintain, or cause to be
maintained, any Hedge Agreement required under Section 8.19(a) shall be
suspended with
respect to the full Aggregate Notional Amount (in the case of a notice of full
prepayment) or the portion of the Aggregate Notional Amount equal to the amount
to be prepaid in the case of a partial prepayment or pursuant to Section
2.09(a)(ii) in connection with the release of a Project (in the case of a
notice of partial prepayment or notice of the release of a Project), and
Borrower or the Other Swap Pledgor may terminate or reduce the notional amount
of any Hedge Agreement theretofore entered into with respect to such suspended portion of the
Aggregate Notional Amount; provided, however, that if such notice of
prepayment or release is subsequently revoked, or if such prepayment or release
does not occur on or prior to the date identified in such notice of prepayment
or release (as such date may be postponed in accordance with the provisions of
this Agreement), then the suspension of such obligation shall terminate, and
Borrower shall be obligated to enter into and thereafter maintain, or to cause
an Other Swap Pledgor to enter into and thereafter maintain, one or more Hedge
Agreements in full compliance with Section 8.19(a) by not later than the
end of a cumulative period during which the Hedge Agreements otherwise required
under Section 8.19(a) are not being maintained (with respect to all such
notices of prepayment or release in the aggregate) which shall not exceed (60)
days in the aggregate.

 

(j)            If
any Hedge Agreement delivered by the Borrower or Other Swap Pledgor to the
Administrative Agent shall, by its terms, expire during any period in which
Borrower remains obligated to maintain a Hedge Agreement in effect pursuant to Section
8.19(a), and as a result thereof the Borrower would not be in compliance
with its obligations under Section 8.19(a) with respect to the
maintenance of Hedge Agreements covering the Aggregate Notional Amount, then,
subject to the provisions of Section 8.19(i),  the Borrower shall deliver, or cause an Other
Swap Pledgor to deliver, to the Administrative Agent a replacement Hedge
Agreement at least ten (10) Business Days prior to the expiration date of the
then current Hedge Agreement (so as to remain in compliance with its
obligations under Section 8.19(a) with respect to the maintenance of
Hedge Agreements) which replacement Hedge Agreement shall be acceptable to the
Administrative Agent in its reasonable discretion and otherwise satisfy the
requirements of this Section 8.19.

 

85

 

8.20         Reserved.

 

8.21         Required
Work. The Borrower shall cause the work described on Schedule 8.21
attached hereto to be completed on or before the applicable dates set forth on
said schedule. Such work shall be completed in a good and workmanlike manner,
lien-free and in accordance with all Applicable Laws. The Administrative Agent
shall have the right to inspect such work and the reasonable costs of such
inspection shall be paid by the Borrower. In addition, the Borrower
acknowledges receipt of the Environmental Reports and the Property Condition
Reports and agrees to address in its prudent business judgment the
recommendations contained in such reports.

 

ARTICLE
IX

NEGATIVE COVENANTS OF THE BORROWER

 

The Borrower covenants and agrees that, until the
payment in full of the Obligations, it will not do or permit, directly or
indirectly, any of the following:

 

9.01         Fundamental
Change.

 

(a)           Mergers;
Consolidations; Disposal of Assets. Except as expressly provided for in Section
14.31, none of the Borrower Parties will merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease (other than tenant leases pursuant to and in
accordance with Sections 8.13 and 9.09 of this Agreement) or
otherwise dispose of (in one transaction or in a series of transactions) any
substantial part of its Properties and assets whether now owned or hereafter
acquired (but excluding any Transfer permitted by Section 9.03 (including,
without limitation, any sale or disposition of any Excluded Projects) or any
sale or disposition of Projects subject to and in accordance with Section
2.09 of this Agreement or of obsolete or excess furniture, fixture and
equipment in the ordinary course of business if same is unnecessary or is
replaced with furniture, fixtures and equipment of equal or greater value and
utility), or wind up, liquidate or dissolve, or enter into any agreement to do
any of the foregoing.

 

(b)           Organizational
Documents. Without the prior written consent of the Administrative Agent,
the Borrower will not, and will not permit any of the other Borrower Parties
to, make any Modification of the terms or provisions of its Organizational
Documents, except: (i) Modifications necessary to clarify existing
provisions of such Organizational Documents, (ii) Modifications which would
have no adverse, substantive effect on the rights or interests of the Lenders
in conjunction with the Loans or under the Loan Documents,
(iii) Modifications necessary to effectuate Transfers to the extent expressly
permitted in this Agreement; or (iv) Modifications of the Organizational
Documents for Borrower Parties other than the Borrower which are necessary to
effectuate the Permitted Reorganization.

 

9.02         Limitation
on Liens. None of the Borrower, the Borrower’s Member nor any of their respective
Subsidiaries shall create, incur, assume or suffer to exist any Lien upon or
with respect to any of its Property, now owned or hereafter acquired; provided,
however, that the following shall be permitted Liens except (in the case
of any Lien described in clauses (d), (f) or 

 

86

 

(g)
below) to the extent that they would encumber any interest in any Project, any
other asset which is collateral for the Loans or any interest in Borrower:

 

(a)           the
Liens created by the Loan Documents; any Permitted Title Exceptions affecting
the Projects; any Permitted Liens; and any Lien for the performance of work or
the supply of materials affecting any Property (unless, in the case of any such
Lien affecting any Project, the Borrower or the Borrower’s Member fails to
discharge such Lien by payment or bonding (in accordance with statutory bonding
requirements the effect of which is to release such Lien from the affected
Project and to limit the Lien claimant’s rights to a recovery on the bond) on
or prior to the date that is the earlier of (i) thirty (30) days after the date
of filing of such lien against such Project and (ii) the date on which the
Project (or the Borrower’s interest therein) is in danger of being sold,
forfeited, terminated, canceled or lost);

 

(b)           Liens
for taxes or assessments or other government charges or levies if not yet
delinquent or if they are being contested in good faith by appropriate
proceedings in accordance with Sections 8.04(b) and/or 8.06(b),
if applicable;

 

(c)           Liens
imposed by law, such as mechanic’s, materialmen’s, landlord’s, warehousemen’s
and carrier’s Liens, and other similar Liens securing obligations incurred in
the Borrower’s or the Borrower’s Member’s or their respective Subsidiary’s ordinary
course of business which, in the case of the Projects, are not past due for
more than thirty (30) days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;

 

(d)           Liens
or pledges to secure the performance of bids, tenders, contracts (other than
contracts for the payment of money), leases, public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of the Borrower’s or the
Borrower’s Member’s or their respective Subsidiary’s business;

 

(e)           Judgment
and other similar Liens (which shall be subordinate to the Liens of the Deeds
of Trust, in the case of any such Lien encumbering any Project or the Borrower’s
interest therein) in an aggregate amount not in excess of $1,000,000 arising in
connection with court proceedings, but only if the execution or other
enforcement of such Liens is effectively stayed (or bonded over through the
posting of a bond in accordance with a statutory bonding procedure the effect
of which is to release such Lien from any Property of the Borrower or the
Borrower’s Member and to limit the Lien claimant’s rights to recovery under the
bond) and the claims secured thereby are being actively contested in good faith
by appropriate proceedings and for which appropriate reserves have been
established;

 

(f)            Easements,
rights-of-way, restrictions and other similar non-monetary encumbrances
encumbering assets other than the Projects or any other collateral for the
Loans;

 

(g)           Liens
on any of the Qualified Real Estate Interests (it being understood that the
Liens permitted under this Section 9.02(g) shall also include Liens
encumbering interests in accounts, rents, leases, management and other
contracts, personal property and other items related to the applicable
Qualified Real Estate Interest and Liens on Swap Agreements entered 

 

87

 

into in connection
therewith), but only to the extent created to secure Indebtedness incurred in
connection with the acquisition, financing or refinancing thereof, in
compliance with Section 9.04(e) or (g);

 

(h)           Liens
consisting of the rights of the lessor to the property covered by any equipment
lease entered into in compliance with Section 9.04(d), provided that
such lien consists solely of such rights with respect to the leased property;

 

(i)            Liens
encumbering cash and other liquid assets (not constituting collateral for the
Loans to the Borrower) in the aggregate
amount not to exceed the sum required to be pledged by the Borrower or
any of its Subsidiaries in order to secure its respective obligations with
respect to the negative value of any Hedge Agreement or Excess Hedge Agreement entered
into by the Borrower or Other Swap Pledgor in compliance with Section 8.19
hereof or the negative value of any Hedge Agreement entered into by the
Borrower or the Borrower’s Member or their respective Subsidiaries in
connection with the Indebtedness permitted by Section 9.04(e), (f)
or (g);

 

(j)            Liens
securing the Indebtedness permitted by Section 9.04(e) or (f),
and encumbering the specific Residential Properties or Excluded Projects
financed pursuant to such section or sections (it being understood that the
Liens permitted under this Section 9.02(j) shall also include Liens
encumbering interests in accounts, rents, leases, management and other
contracts, personal property and other items related to the applicable
Residential Properties and/or Excluded Projects and Liens on Swap Agreements
entered into in connection therewith); and

 

(k)           Liens
securing the obligations of Borrower or its Subsidiaries on account of
Guarantees described in Section 9.04(h) provided that such Liens encumber
Excluded Projects (which may include Liens on any interests in accounts, rents,
leases, management and other contracts, personal property and, other items
related thereto) exclusively.

 

9.03         Due
on Sale; Transfer; Pledge. Without the prior written consent of the
Administrative Agent and (subject to the last paragraph of this Section 9.03)
the Required Lenders:

 

(a)           None
of the Borrower, nor any Borrower Party, nor any Principal shall (w) directly
or indirectly Transfer any interest in any Project or any part thereof
(including any direct or indirect interest in any partnership, membership or
other ownership interest or other Equity Interest in the Borrower, the Borrower’s
Member or the Borrower’s Manager); (x) directly or indirectly grant any
Lien on any direct or, prior to the Permitted Public REIT Transfer, indirect
interest in any Project or any part thereof (including any direct or, prior to
the Permitted Public REIT Transfer, indirect interest in any partnership,
membership or other ownership interest or other Equity Interest in the Borrower,
the Borrower’s Member or the Borrower’s Manager), whether voluntarily or
involuntarily; (y) except for arrangements which result from the Permitted
Reorganization pursuant to which the Permitted Public REIT or its Operating
Partnership or another Permitted Public REIT Subsidiary thereof shall acquire
such rights or powers, enter into any arrangement granting any direct or
indirect right or power to direct the operations, decisions and affairs of the
Borrower, the Borrower’s Member or the 

 

88

 

Borrower’s Manager,
whether through the ability to exercise voting power, by contract or otherwise;
or (z) except as described in clause (e) of the definition of “Permitted
Liens,” enter into any easement or other agreement granting rights in or
restricting the use or development of any Project except for easements and
other agreements which, in the reasonable opinion of the Administrative Agent,
have no Material Adverse Effect; provided, however, that, the
foregoing restrictions shall not apply with respect to:

 

(i)            any Transfer of direct or indirect
ownership interests in the Borrower’s Member, or a successor to the Borrower’s
Member (other than the ownership interests that are covered by Section
9.03(a)(ii)), unless (A) in the case of any such Transfer prior to the
Permitted Public REIT Transfer, the acquisition by any one investor of ownership
interests in the Borrower’s Member would result in the direct or indirect ownership
by that investor of more than forty-nine percent (49%) of the ownership
interests in the Borrower’s Member, or successor to the Borrower’s Member, in
which case the consent of the Administrative Agent, which shall not be
unreasonably withheld or delayed, shall be required or (B) in the case of
any such Transfer following the Permitted Public REIT Transfer, the Permitted Public REIT, following such
Transfer, shall not directly or indirectly own fifty-one percent (51%) or more
of the ownership interests in the Borrower or shall not directly or indirectly
control the Borrower, or a Change in Control shall result from such Transfer;

 

(ii)           the Transfer of direct or indirect
ownership interests in, or the admission or withdrawal of any partner, member
or shareholder to or from, the Borrower’s Manager (or any replacement manager referred
to in Section 9.03(b) or any general partner, manager or managing member
of any successor to the Borrower or the Borrower’s Member referred to in Section
9.03(a)(iii)), so long as, after such Transfer, admission or withdrawal,
the provisions of Section 9.03(c) are not violated;

 

(iii)          the conveyance of all of the Projects to
a Qualified Successor Entity which assumes all of the obligations of the
Borrower under the Loan Documents in form and substance satisfactory to the
Administrative Agent and in recordable form; provided, however,
that such Qualified Successor Entity and the general partner, manager or
managing member of such Qualified Successor Entity, after giving effect to such
Transfer, is in compliance with all of the covenants of the Borrower or
applicable to the Borrower’s Member, the Borrower’s Manager or any Borrower
Party (as applicable) contained in the Loan Documents except as otherwise
provided in the definition of “Borrower’s Member” or “Borrower’s Manager” (with
all references herein to “Borrower” to mean such Qualified Successor Entity, all
references herein to the “Borrower’s Member” to mean (except as otherwise
provided in the definition of “Borrower’s Member”) the controlling entity for
such Qualified Successor Entity, and all references herein to “Borrower’s
Manager” to mean (except as otherwise provided in the definition of “Borrower’s
Manager”) any general partner, manager or managing member of the Qualified
Successor Entity; no Default or Event of Default is then existing or would
result therefrom; and upon the transfer of the Projects to such Qualified
Successor Entity, such Qualified Successor Entity, its controlling entity and
the general partner, manager or managing member of such Qualified Successor
Entity are in compliance in all material respects with all of the
representations and warranties of the Borrower or 

 

89

 

applicable to the Borrower’s Member or the Borrower’s
Manager (whether directly or as a Borrower Party) (as applicable) contained
herein and in the other Loan Documents (after giving effect to the
modifications reflecting the identity of the transferee resulting from such
transfer) except as otherwise provided in the definition of “Borrower’s Member”
or “Borrower’s Manager” (with all references herein to “Borrower” to mean such
Qualified Successor Entity, all references herein to the “Borrower’s Member” to
mean (except as otherwise provided in the definition of “Borrower’s Member”) the
controlling entity for such Qualified Successor Entity, and all references
herein to “Borrower’s Manager” to mean (except as otherwise provided in the
definition of “Borrower’s Manager”) any general partner, manager or managing
member of the Qualified Successor Entity); and provided, further,
that from and after such Transfer, in the case of a Transfer to a Qualified
Successor Entity consisting of a Permitted Public REIT Subsidiary, the
Properties may be managed by the Permitted Public REIT or any property
management company owned or controlled directly or indirectly by the Permitted
Public REIT. Prior to such Transfer, the Administrative Agent shall have
received and approved (which approval shall not be unreasonably withheld) the
Organizational Documents of such Qualified Successor Entity and the general
partner, manager or managing member of such Qualified Successor Entity (except that, in the case of a Qualified
Successor Entity which is a Permitted Public REIT Subsidiary of the Permitted
Public REIT, there shall be no approval rights over the Organizational
Documents of such general partner, manager or managing member if it is the
Permitted Public REIT or the Operating Partnership of the Permitted Public
REIT), together with such financial information relating to such Qualified
Successor Entity as the Administrative Agent may reasonably request, and
concurrently with such Transfer, the Administrative Agent shall have received
such endorsements to the Title Policies insuring ownership of the Projects by
such Qualified Successor Entity and the continued priority of the Liens of the
Deeds of Trust after giving effect to the delivery by such entity of the
assumption agreement referred to above (subject only to Permitted Title
Exceptions), in form and substance satisfactory to the Administrative Agent,
and such confirmation as the Administrative Agent may require that the Hedge
Agreements required under Section 8.19(a) remain in full force and
effect, in compliance with Section 8.19 hereof, as to the Loans as
assumed by such Qualified Successor Entity. In connection with any such
Transfer, the assumption agreement to be entered into by the Borrower and the
Qualified Successor Entity (and such other parties deemed appropriate by the
Administrative Agent) shall include such modifications to this Agreement and
the other Loan Documents as the Administrative Agent may reasonably require,
including, without limitation, such modifications to the covenants and other
provisions that are contained herein and that relate to the Borrower, Borrower’s
Member or Borrower’s Manager, as shall be deemed necessary by the
Administrative Agent to allocate to the Qualified Successor Entity, its
controlling entity, and its general partner or manager responsibility for the
performance of the covenants of, and satisfaction of the other provisions set
forth herein that relate to, the Borrower, Borrower’s Member or Borrower’s
Manager, and of such limited indemnity agreements and guaranties as shall be
deemed necessary by the Administrative Agent to obtain recourse liability from
the general partner or manager of the Qualified Successor Entity as shall be
consistent with the obligations of the Guarantor under the Guarantor Documents
immediately upon the 

 

90

 

Closing Date. Upon
compliance with the foregoing requirements in connection with such Transfer,
the original Borrower and the original Guarantor, in their capacities as such,
shall be released from their respective obligations under the Loan Documents
arising from and after such Transfer, but such release shall not limit the
obligations of such parties to comply with any requirements applicable to them (if
any) in other capacities (including, without limitation, in capacities such as
the general partner, managing member, manager or controlling entity for such
Qualified Successor Entity). As used herein, “Qualified Successor Entity”
shall mean either (I) so long as the provisions of Section 9.03(c)
are not violated, an entity (other than a REIT, its Operating Partnership or
any Subsidiary of such REIT), majority-owned, directly or indirectly, by (A) the
Borrower and/or (B) the Borrower’s Member and/or (C) at least two (2) of the
Named Principals, so long as at least one of the Named Principals is either Dan
A. Emmett or Jordan L. Kaplan, and provided that in the case of this clause
(I)(C) the general partner, managing member or manager of such Qualified
Successor Entity must be controlled, directly or indirectly, by such Named
Principals, (II) a Permitted Public REIT Subsidiary of the Permitted Public
REIT (other than such Permitted Public REIT’s Operating Partnership), or (III) a
Permitted Private REIT Subsidiary of a private REIT, provided that at least two
(2) of the Named Principals are senior officers of such private REIT and own,
directly or indirectly, not less than one percent (1%) of the beneficial
interest in such private REIT, and at least one of the Named Principals is
either Dan A. Emmett or Jordan L. Kaplan; such private REIT has an
institutional character substantially the same as the institutional character
of the Borrower as of the date hereof; and all of the investors in such private
REIT are “accredited investors” within the meaning of Regulation D promulgated
under the Securities Act of 1933 (such private REIT is referred to as a “Permitted
Private REIT”); and, provided
further, however, that in the case of clauses (I), (II) and (III) above, such
Qualified Successor Entity shall, from the date of its formation, have been in
compliance with the provisions of Sections 9.02, 9.04 and 9.05
hereof as if each reference therein to “Borrower” were to mean and refer to
such Qualified Successor Entity;

 

(iv)          entering into Approved Leases or the
granting of Liens expressly permitted by the Loan Documents;

 

(v)           any Transfers of direct or indirect
Equity Interests in the Borrower or any of the Borrower Parties to the
Permitted Public REIT, its Operating Partnership or any Permitted Public REIT
Subsidiary in connection with a Permitted Public REIT Transfer;

 

(vi)          any Transfers constituting part of the
Permitted Reorganization which are permitted under Section 14.31;

 

(vii)         any Transfers expressly permitted by
the Loan Documents; and

 

(viii)        following the Permitted Public REIT
Transfer, any of the following so long as no Change of Control shall result
therefrom:  (A) any Transfer or issuance (whether through public offerings, private
placements or other means) of shares or Equity Interests in the Permitted Public
REIT or its Operating Partnership; (B) any 

 

91

 

conversion, into securities of the Permitted Public
REIT, of partnership units or other Equity Interests of the Operating
Partnership of the Permitted Public REIT; (C) any issuance or Transfer of any
Equity Interests in any Permitted Public REIT Subsidiary owning any direct or
indirect Equity Interests in any Borrower Party, so long as following such
issuance or Transfer the Permitted Public REIT shall directly or indirectly own
fifty-one percent (51%) or more of the ownership interests in the Borrower and
shall directly or indirectly control the Borrower; and/or (C) any merger,
consolidation, dissolution, liquidation, reorganization, sale, lease or other transaction
involving any Person other than the Borrower so long as the Permitted Public
REIT (or, as applicable, a Permitted Public REIT Subsidiary) is the surviving
entity and the Permitted Public REIT thereafter directly or indirectly owns
fifty-one percent (51%) or more of the ownership interests in the Borrower and
directly or indirectly controls the Borrower. As used herein, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise) of such Person.

 

(b)           Prior
to a Permitted Public REIT Transfer, except for Transfers constituting part of the
Permitted Reorganization which are permitted under Section 14.31, no
new general partner, manager or managing member that is not owned and
controlled, directly or indirectly, by at least two (2) of the Named Principals
shall be admitted to or created in the Borrower or the Borrower’s Member (nor
shall the Borrower’s Manager withdraw or be replaced as the Borrower’s sole manager
or the Borrower’s Manager withdraw or be replaced as the Borrower’s Member’s
general partner) unless the new or replacement general partner, manager or
managing member is owned and controlled, directly or indirectly, by at least
two (2) Named Principals and the general partners or managers owned and
controlled, directly or indirectly, by at least two (2) of the Named Principals
own, directly or indirectly, not less than one percent (1%) of the beneficial
interest in the Borrower’s Member following such admission or replacement and,
without the prior written consent of the Administrative Agent, no other change
in the Borrower’s or the Borrower’s Member’s Organizational Documents (except
as permitted in Section 9.01(b)) shall be effected in connection with
such replacement;

 

(c)           Except
for Transfers constituting part of the Permitted Reorganization which are
permitted under Section 14.31, prior to a Permitted Public REIT
Transfer, no Transfer shall be permitted which would cause the Borrower’s
Manager or any replacement general partner, manager or managing member referred
to in Section 9.03(b) (or any general partner, manager or managing
member of any Qualified Successor Entity unless the Borrower is, itself, such
manager or managing member) (i) to own, directly or indirectly, less than one
percent (1%) of the beneficial interest in the Borrower, the Borrower’s Member
or such successor to the Borrower or the Borrower’s Member or (ii) to cease to
be “controlled” directly or indirectly by at least two (2) of the Named
Principals (at least one of which shall be Dan A. Emmett or Jordan L. Kaplan in
the case of a Qualified Successor Entity referred to in clause (I)(A) of
the definition of the term “Qualified Successor Entity”); and

 

(d)           As
used in Sections 9.03(a)(iii), (b) and (c) above, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management 

 

92

 

or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise) of such Person.

 

Notwithstanding the
foregoing provisions of this Section 9.03, any Transfer of a direct
or indirect ownership interest in the Borrower, the Borrower’s Member, the Borrower’s
Manager or any Qualified Successor Entity or any general partner, manager or
managing member of any Qualified Successor Entity shall be further subject to
the requirement that, after giving effect to such Transfer, the Borrower, the
Borrower’s Member, the Borrower’s Manager, any Qualified Successor Entity and
its controlling entity and general partner or manager shall be in compliance
with all applicable laws applicable to such Persons and relating to such
Transfer, including the USA Patriot Act and regulations issued pursuant thereto
and “know your customer” laws, rules, regulations and orders. In addition, any
such Transfer (except for the Permitted Public REIT Transfer, any Transfer of
publicly-traded stocks in the Permitted Public REIT or any Transfers following
a Permitted Public REIT Transfer that are permitted by Section 9.03(a)(viii))
shall be further subject to (w) the Borrower providing prior written notice to
Administrative Agent of any such Transfer, (x) no Default or Event of Default
then existing, (y) the proposed transferee being a corporation, partnership, limited
liability company, joint venture, joint-stock company, trust or individual
approved in writing by each Lender subject to a Limiting Regulation in its
discretion, and (z) payment to the Administrative Agent on behalf of the
Lenders of all reasonable costs and expenses incurred by the Administrative
Agent or any Lenders in connection with such Transfer. Each Lender at the time
subject to a Limiting Regulation shall, within ten (10) Business Days after
receiving the Borrower’s notice of a proposed Transfer subject to this Section 9.03,
furnish to the Borrower a certificate (which shall be conclusive absent
manifest error) stating that it is subject to a Limiting Regulation, whereupon
such Lender shall have the approval right contained in clause (y) above. Each
Lender which fails to furnish such a certificate to the Borrower during such
ten (10) Business Day period shall be automatically and conclusively deemed not
to be subject to a Limiting Regulation with respect to such Transfer. If any
Lender subject to a Limiting Regulation fails to approve a proposed transferee
under clause (y) above (any such Lender being herein called a “Rejecting
Lender”), the Borrower, upon three (3)
Business Days’ notice, may (A) notwithstanding the terms of Sections 2.06,
prepay such Rejecting Lender’s outstanding Loans or (B) require that such
Rejecting Lender transfer all of its right, title and interest under this
Agreement and such Rejecting Lender’s Note to any Eligible Assignee or Proposed
Lender selected by the Borrower that is reasonably satisfactory to the
Administrative Agent if such Eligible Lender or Proposed Lender (x) agrees to
assume all of the obligations of such Rejecting Lender hereunder, and to
purchase all of such Rejecting Lender’s Loans hereunder for consideration equal
to the aggregate outstanding principal amount of such Rejecting Lender’s Loans,
together with interest thereon to the date of such purchase (to the extent not
paid by the Borrower), and satisfactory arrangements are made for payment to
such Rejecting Lender of all other amounts accrued and payable hereunder to
such Rejecting Lender as of the date of such transfer (including any fees
accrued hereunder and any amounts that would be payable under Section 2.06
as if all such Rejecting Lender’s Loans were prepaid in full on such date) and
(y) approves the proposed transferee. Subject to the provisions of Section 14.07
such Eligible Assignee or Proposed Lender shall be a “Lender” for all purposes
hereunder. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements of the Borrower contained in Section 5.05
shall survive for the benefit of such Rejecting Lender with respect to the time
period prior to such replacement.

 

93

 

9.04         Indebtedness.
None of the Borrower, the Borrower’s Member nor any of their respective Subsidiaries
shall create, incur, assume, suffer to exist, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness or enter into
any equipment leases (whether or not constituting Indebtedness), except for the
following:

 

(a)           Indebtedness
Under the Loan Documents. Indebtedness of such Borrower Party and its
Subsidiaries in favor of the Administrative Agent and the Lenders pursuant to
this Agreement and the other Loan Documents;

 

(b)           Accounts
Payable. Accounts payable to trade creditors for goods and services and
current operating liabilities (not the result of the borrowing of money)
incurred in the ordinary course of such Borrower Party’s or Subsidiary’s business
in accordance with customary terms and paid within the specified time, unless
contested in good faith by appropriate actions or proceedings and reserved for
in accordance with GAAP, and provided such trade payables and accrued expenses
are not outstanding for more than sixty (60) days;

 

(c)           Contingent
Obligations. Indebtedness consisting of (i) endorsements by such Borrower Party
or such Subsidiary for collection or deposit in the ordinary course of business
or (ii) unsecured Swap Agreements entered into by the Borrower, the Borrower’s
Member or their respective Subsidiaries with respect to Indebtedness permitted
under Section 9.04 (a), (e), (f) or (g);

 

(d)           Indebtedness
for Capital Improvements. Unsecured Indebtedness of the such Borrower Party
and its Subsidiaries (including obligations under equipment leases or other
personal property used in the ownership or operation of their respective
Properties), in the aggregate amount during the term of the Loans not to exceed
$25,000,000 (inclusive of the portion of the value of the equipment covered by
equipment leases entered into pursuant to this Section 9.04(d) amortized
through the rental payments under such leases) incurred in connection with
capital or tenant improvements to (or other tenant concessions made in
connection with) such Borrower Party’s and such Subsidiaries’ Properties
(including, without limitation, the Projects and the Residential Properties) or
the acquisition of equipment or other assets for the benefit of such Borrower
Party’s and such Subsidiaries’ Properties (including, without limitation, the
Projects and the Residential Properties), and that is not used for the purposes
of making Restricted Payments. Not more than Two Million Dollars ($2,000,000)
of the foregoing $25,000,000 maximum may be incurred in the form of equipment
leases (as measured by the value of the equipment covered by such equipment leases
amortized through the rental payments under such leases); provided that
such equipment leases relate to equipment constituting neither fixtures nor
personal property material to the operation, maintenance or management of any
of the Projects; and

 

(e)           Additional
Indebtedness of Borrower Parties and Wholly-Owned Subsidiaries. Indebtedness
of the Borrower, the Borrower’s Member or their wholly-owned Subsidiaries for
borrowed money incurred in connection with the acquisition, financing or
refinancing of one or more of the Excluded Projects, but only if such
Indebtedness satisfies the following requirements:

 

94

 

(i)            the obligation to repay such
Indebtedness is non-recourse to the Borrower, the Borrower’s Member, the Bankruptcy
Parties and the Named Principals (except for “carve-outs” (or Guarantees
guarantying the debtor’s liability with respect to “carve-outs”) for fraud,
misrepresentation, misappropriation and other exceptions-from-non-recourse
customary in the real estate finance industry and not materially more favorable
to such lender than the exceptions-from-non-recourse set forth in the second
sentence of Sections 14.23(a));

 

(ii)           such Indebtedness is secured solely
by Liens on the Excluded Projects owned by the Borrower or one or more of its
wholly-owned Subsidiaries (if the Borrower or any such Subsidiary is the
borrower of the Indebtedness secured thereby), or by Liens on the Excluded
Projects owned by the Borrower’s Member or one or more of its wholly-owned
Subsidiaries (other than the Borrower or its wholly-owned Subsidiaries) (if the
Borrower’s Member or any such wholly-owned Subsidiary of the Borrower’s Member
is the borrower of the Indebtedness secured thereby), together with Liens on
any interests in accounts, rents, leases, management and other contracts,
personal property and other items (including, without limitation, Swap
Agreements) related thereto;

 

(iii)          the amount of such Indebtedness, when
incurred, does not exceed sixty percent (60%) of the fair market value of the Excluded
Projects, as determined by the lender’s appraisal (or, in the case of financing
for the acquisition of Excluded Projects, sixty percent (60%) of the
acquisition cost of the Excluded Projects so acquired) encumbered as collateral for such Indebtedness, and, so long as the original
Borrower’s Member remains a member of the Borrower, such Indebtedness
complies with the limitations on indebtedness contained in the limited
partnership agreement of the original Borrower’s Member, as amended, or has
otherwise received the requisite approval of the limited partners of the original
Borrower’s Member, if required; provided that, in the case of any Excluded
Project consisting of a Residential Property, the “sixty percent (60%)” limitation
set forth above in this clause (iii) shall mean “seventy-five percent (75%)”; and

 

(iv)          no Major Default or Event of Default
shall have occurred or be continuing immediately prior to the incurrence of
such Indebtedness or would occur after giving effect thereto.

 

(f)            Additional Indebtedness of
Residential Properties. Indebtedness for borrowed money incurred in
connection with the financing or refinancing of any of the Residential
Properties by the Borrower or one or more of its wholly-owned Subsidiaries (if
the Borrower or any such Subsidiary is the borrower of the Indebtedness secured
thereby), or by the Borrower’s Member or one or more of its wholly-owned
Subsidiaries (other than the Borrower or its wholly-owned Subsidiaries) (if the
Borrower’s Member or any such wholly-owned Subsidiary of the Borrower’s Member
is the borrower of the Indebtedness secured thereby), but only if such
Indebtedness satisfies the following requirements:

 

(i)            the obligation to repay such
Indebtedness is non-recourse to the Bankruptcy Parties and the Named Principals
(except for “carve-outs” (or Guarantees guarantying the debtor’s liability with
respect to “carve-outs”) for fraud, 

 

95

 

misrepresentation,
misappropriation and other exceptions-from-non-recourse customary in the real
estate finance industry);

 

(ii)           such Indebtedness is secured solely
by Liens on the Residential Properties so financed and, if applicable, Liens on
other Excluded Projects owned by the Borrower or one or more of its
wholly-owned Subsidiaries (if the Borrower or any such Subsidiary is the
borrower of the Indebtedness secured thereby), or by Liens on Excluded Projects
owned by the Borrower’s Member or one or more of its wholly-owned Subsidiaries
(other than the Borrower or its wholly-owned Subsidiaries) (if the Borrower’s
Member or any such wholly-owned Subsidiary of the Borrower’s Member is the
borrower of the Indebtedness secured thereby), together with Liens on any
interests in accounts, rents, leases, management and other contracts, personal
property and other items (including, without limitation, Swap Agreements) related
thereto;

 

(iii)          the amount of such Indebtedness, when
incurred, does not exceed seventy-five percent (75%) of the fair market value
of such Residential Properties, as determined by the lender’s appraisal, plus
sixty percent (60%) of the fair market value, as determined by the lender’s
appraisal, of any Excluded Projects encumbered as security therefore that are
non-residential and seventy-five percent (75%) of the fair market value, as
determined by the lender’s appraisal, of any Excluded Projects encumbered as
security therefore that are residential and, so long as the original Borrower’s Member remains a member of the
Borrower, such Indebtedness complies with the limitations on
indebtedness contained in the limited partnership agreement of the original Borrower’s
Member, as amended, or has otherwise received the requisite approval of the
limited partners of the original Borrower’s Member, if required; and

 

(iv)          no Major Default or Event of Default
shall have occurred or be continuing immediately prior to the incurrence of
such Indebtedness or would occur after giving effect thereto.

 

(g)           Additional
Indebtedness of Qualified Sub-Tier Entities. Indebtedness of any Qualified
Sub-Tier Entity for borrowed money incurred in connection with the acquisition,
financing or refinancing by such Qualified Sub-Tier Entity of Qualified Real
Estate Interests, but only if the obligation to repay such Indebtedness is
non-recourse to such Qualified Sub-Tier Entity, Bankruptcy Parties, and the
Named Principals (except for “carve-outs” (or Guarantees guarantying the debtor’s
liability with respect to “carve-outs”) for fraud, misrepresentation, misappropriation
and other exceptions-from-nonrecourse customary in the real estate finance
industry and not materially more favorable to the holder of such Indebtedness
than the exceptions from non-recourse set forth in the second sentence of Sections 14.23(a))
and such Indebtedness otherwise is in compliance with the requirements set
forth in Sections 9.04(e) above (unless such Qualified Real Estate Interests consist of residential
projects, in which case the applicable requirements shall be as set forth in
Section 9.04(f)).

 

(h)           Guarantees of Permitted Public REIT or
Operating Partnership Line of Credit. Following the Permitted Public REIT Transfer, Guarantees by the
Borrower or its Subsidiaries of one or more credit facilities provided to the
Permitted Public REIT, its Operating Partnership or another Permitted Public
REIT Subsidiary (each, a “Guaranteed Line of Credit”), 

 

96

 

which
Guarantees, if secured, shall be secured only in compliance with Section
9.02(k) and shall in no event be secured by any of the Projects or other
Collateral encumbered by the Security Documents; provided that no Major Default
or Event of Default shall exist or be continuing immediately prior to the
incurrence of such Guarantees or would occur after giving effect thereto.

 

9.05         Investments.
Neither the Borrower nor the Borrower’s Member nor any of their respective Subsidiaries
will make or permit to remain outstanding any Investments except
(a) operating deposit accounts or money market accounts with banks,
(b) Permitted Investments, (c) Borrower’s Member’s 100% membership in
Borrower, (d) the Projects, (e) the Excluded Projects (including,
without limitation, any of the Residential Properties (or Borrower’s Member’s
Equity Interest in the owner of any of the Residential Properties) which may
hereafter be acquired by the Borrower or any Subsidiary thereof), (f) Borrower’s
or Borrower’s Member’s Equity Interests in any Subsidiary of Borrower or
Borrower’s Member existing on the Closing Date, (g) Borrower’s Equity
Interests in any Qualified Sub-Tier Entity or any Subsidiary permitted or
contemplated by this Agreement, (h) other investments which are permitted
by the respective Organizational Documents of the Borrower or the Borrower’s
Member as in effect on the Closing Date, (i) other investments required or
permitted by the Loan Documents, and (j) other investments (including,
without limitation, investments owned by Subsidiaries) which are consistent
with the investment practices prior to the date hereof of the Douglas Emmett
Realty Funds taken as a whole.

 

9.06         Restricted
Payments. Neither the Borrower nor the Borrower’s Member will make any
Restricted Payment at any time during the existence of a Major Default or Event
of Default.

 

9.07         Change
of Organization Structure; Location of Principal Office. The Borrower or
any Qualified Successor Entity that may hereafter acquire title to any of the
Projects shall not change its name or change the location of its chief
executive office, state of formation or organizational structure unless, in
each instance, Borrower shall have (a) given the Administrative Agent at least
thirty (30) days’ prior written notice thereof, and (b) made all filings
or recordings, and taken all other action, reasonably requested by the
Administrative Agent that is reasonably necessary under Applicable Law to
protect and continue the priority of the Liens created by the Security
Documents.

 

9.08         Transactions
with Affiliates. Except as expressly permitted by this Agreement, prior to
the Permitted Public REIT Transfer, neither the Borrower nor the Borrower’s
Member shall enter into, or be a party to, any transaction with an Affiliate of
the Borrower or Borrower’s Member, except in full compliance with the
Organizational Documents of the Borrower’s Member as in effect on the Closing
Date. This Section shall not prohibit any transfer of the Excluded Projects to
Affiliates of the Borrower or Borrower’s Member.

 

9.09         Leases.

 

(a)           Negative
Covenants. The Borrower shall not (i) accept from any tenant, nor permit
any tenant to pay, Rent for more than one month in advance except for payment
in the nature of security for performance of a tenant’s obligations,
escalations, percentage rents and 

 

97

 

estimated payments (not
prepaid more than one month prior to the date such estimated payments are due)
of operating expenses, taxes and other pass-throughs paid by tenants pursuant
to their Leases, (ii) Modify (other than ministerial changes), terminate, or
accept surrender of, any Major Lease now existing or hereafter made, without
the prior written consent of the Administrative Agent; notwithstanding the
foregoing, the Borrower shall retain the right to Modify, terminate, or accept
surrender of any Approved Lease that is not a Major Lease; provided that
(A) any such Modification, is (1) consistent with fair market terms
and (2) is entered into pursuant to arm’s-length negotiations with a
tenant not affiliated with the Borrower, and (B) any such termination is
(1) in the ordinary course of business, (2) consistent with good
business practice and (3) in the best interests of the affected Project, (iii)
except for the Deed of Trust, assign, transfer (except for a Transfer thereof together
with the transfer of the Projects to the entity described in Section 9.03(a)(iii)
in full compliance with the provisions of such Section), pledge, subordinate or
mortgage any Lease or any Rent without the prior written consent of the
Administrative Agent and the Required Lenders, (iv) waive or release any
nonperformance of any material covenant of any Major Lease by any tenant
without the Administrative Agent’s prior written consent, (v) release any
guarantor from its obligations under any guaranty of any Major Lease or any
letter of credit or other credit support for a tenant’s performance under any
Major Lease, except as expressly permitted pursuant to the terms of such Lease
or (vi) enter into any master lease for any space at the Projects. Notwithstanding
the foregoing or anything to the contrary contained herein, the Borrower shall
have the right, at its option, to terminate or accept the surrender of any
Lease (including any Major Lease), and to pursue any other rights and remedies
the Borrower may have against any tenant, following an uncured material default
by a tenant under its Lease.

 

(b)           Approvals.
The Borrower shall not enter into any Lease for any space at any Project
(unless such proposed Lease is held in escrow pending the receipt of any
approval required below) except as follows:

 

(i)            Non-Major Leases. The
Borrower may enter into Leases that do not constitute Major Leases, and
extensions, Modifications and renewals thereof without the approval of the
Administrative Agent or any Lender; provided that such Lease, extension,
renewal or Modification (A) in the case of a Lease, is substantially in
the form of the Borrower’s standard form office lease or standard form retail
lease, as applicable, previously approved by the Administrative Agent, (B) is consistent
with fair market terms and (C) is entered into pursuant to arm-length
negotiations with a tenant not affiliated with the Borrower. Any proposed Lease
that is not a Major Lease, or any extension, renewal or modification of any
such Lease, that does not comply with the preceding sentence shall require the
prior approval of the Administrative Agent.

 

(ii)           Major Leases. The Borrower
shall not enter into any Major Lease or any extension, renewal or Modification
of any Major Lease without the prior written approval of the Administrative
Agent.

 

(iii)          Information. With respect to
any Lease or Modification of Lease that requires approval of the Administrative
Agent, the Borrower shall provide the Administrative Agent with the following
information (collectively, the “Lease Approval Package”):  (A) all material information available
to the Borrower concerning the lessee 

 

98

 

and its business and financial condition; (B) a
draft of the lease (or lease modification); and (C) a summary (the “Lease
Information Summary”) substantially in the form attached hereto as Exhibit
N, of the material terms of such lease or lease modification. Within ten
(10) Business Days after the Administrative Agent shall have received a Lease
Approval Package, the Administrative Agent shall either consent or refuse to
consent to such Lease Approval Package. If the Administrative Agent shall fail
to respond within such ten (10) Business Day period, the Administrative Agent
shall be deemed to have approved such lease or lease modification; provided
that such lease or lease modification is documented pursuant to a lease or
lease modification which is consistent with the draft and lease summary and
Lease Approval Package previously delivered to the Administrative Agent in all
material respects.

 

(c)           Additional
Requirements as to all Leases. Notwithstanding anything to the contrary set
forth in this Section 9.09, the following requirements shall apply with
respect to all Leases and all Modifications of Leases entered into after the
date hereof:

 

(i)            The Borrower shall within ten (10)
days after the Administrative Agent’s request, provide the Administrative Agent
with a true, correct and complete copy thereof as signed by all such parties,
including any Modifications and Guarantees thereof.

 

(ii)           All Leases must be subordinate to the
Deed of Trust, and all existing and future advances thereunder, and to any
Modification thereof.

 

(iii)          Notwithstanding anything to the
contrary set forth above, the Administrative Agent may require that the
Borrower and the tenant under any Major Lease execute and deliver an SNDA
Agreement (with such commercially reasonable changes thereto as may be
requested by such tenant). The Administrative Agent (on behalf of the Lenders)
shall, if requested by the Borrower, and as a condition to a tenant’s
obligation to subordinate its lease (if necessary or if requested by the
Borrower) or attorn, enter into an SNDA Agreement with such tenant (with such
commercially reasonable changes thereto as may be requested by such tenant). The
Administrative Agent’s execution thereof shall be conditioned upon the prior
execution thereof by both the tenant and the Borrower.

 

(iv)          All Leases shall be substantially in
the form of the Borrower’s standard form office lease or standard form retail
lease, as applicable, approved by the Administrative Agent and the Borrower on
the Closing Date, with such Modifications as the Administrative Agent shall
thereafter approve prior to the execution of such Leases.

 

9.10         Reserved.

 

9.11         No
Joint Assessment; Separate Lots. The Borrower shall not suffer, permit or
initiate the joint assessment of any Project with any other real property
constituting a separate tax lot.

 

9.12         Zoning.
The Borrower shall not, without the Administrative Agent’s prior written
consent, seek, make, suffer, consent to or acquiesce in any change or variance
in any zoning or land use laws or other conditions of any Project or any
portion thereof. Except as 

 

99

 

disclosed on the
Appraisals delivered to the Administrative Agent prior to the Closing Date or
any other existing non-conforming use disclosed on Schedule 9.12, the
Borrower shall not use or permit the use of any portion of any Project in any
manner that could result in such use becoming a non-conforming use under any
zoning or land use law or any other applicable law, or Modify any agreements
relating to zoning or land use matters or permit the joinder or merger of lots
for zoning, land use or other purposes, without the prior written consent of
the Administrative Agent. Without limiting the foregoing, in no event shall the
Borrower take any action that would reduce or impair either (a) the number
of parking spaces at any Project or (b) access to any Project from
adjacent public roads.

 

Further, without the
Administrative Agent’s prior written consent, the Borrower shall not file or
subject any part of any Project to any declaration of condominium or
co-operative or convert any part of any Project to a condominium, co-operative
or other direct or indirect form of multiple ownership and governance.

 

9.13         ERISA.
The Borrower shall not shall not take any action, or omit to take any action,
which would (a) cause the Borrower’s assets to constitute “plan assets” for
purposes of ERISA or the Code or (b) cause the Transactions to be a nonexempt
prohibited transaction (as such term is defined in Section 4975 of the Code or
Section 406 of ERISA) that could subject the Administrative Agent and/or the
Lenders, on account of any Loan or execution of the Loan Documents hereunder,
to any tax or penalty on prohibited transactions imposed under Section 4975 of
the Code or Section 502(i) of ERISA.

 

9.14         Reserved.

 

9.15         Property
Management. The Borrower will not, without the prior written approval of
the Administrative Agent, (i) enter into any new Property Management Agreement;
(ii) terminate or make any material changes to the Property Management
Agreement, either orally or in writing, in any respect; or (iii) consent to,
approve or agree to any assignment or transfer by or with respect to the
Property Manager (including transfers of beneficial interests in the Property
Manager or assignments or transfers by the Property Manager of any or all of
its rights under any Property Management Agreement) except as otherwise
permitted by Section 9.03 or Section 14.31. Notwithstanding the
foregoing, the Borrower may, on prior written notice to the Administrative
Agent, subject to the limitations set forth herein with respect to the
Administrative Agent’s approval of any new manager for any Project, terminate a
Property Management Agreement in accordance with its terms as a result of a
material default by a Property Manager thereunder, and the limited partners in the
Borrower’s Member may remove any Property Manager or terminate any Property
Management Agreement provided a replacement Property Manager satisfactory to
the Administrative Agent is immediately appointed pursuant to a Property
Management Agreement acceptable to the Administrative Agent which permits
termination by the Borrower on thirty (30) days’ notice so long as the new
property manager delivers a Property Manager’s Consent. Any change in ownership
or control of the Property Manager other than as specifically set forth herein
shall be cause for the Administrative Agent to re-approve such Property Manager
and Property Management Agreement. If at any time the Administrative Agent
consents to the appointment of a new Property Manager, such new Property
Manager and the Borrower shall, as a condition of the Administrative Agent’s consent, execute a Property Manager’s Consent in the form
then used by 

 

100

 

the Administrative
Agent. Each Property Manager shall be required to hold and maintain all
necessary licenses, certifications and permits required by Applicable Law. The
Borrower may, on prior written notice to the Administrative Agent, transfer a
Property Management Agreement to, or terminate and enter into a new Property
Management Agreement on substantially the same terms with, another entity owned
and controlled by, or under common control with, Douglas, Emmett and Company or
the Borrower’s Manager; provided that such new management entity is majority-owned
and controlled, directly or indirectly, by at least two (2) of the four (4)
Named Principals, and such entity delivers a Property Manager’s Consent with
respect to such Property Management Agreement.

 

9.16         Foreign
Assets Control Regulations. Neither the Borrower nor any Borrower Party
shall use the proceeds of the Loan in any manner that will violate the Trading
with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or the Anti-Terrorism Order or any enabling legislation
or executive order relating to any of the same. Without limiting the foregoing,
neither the Borrower nor any Borrower Party will permit itself nor any of its
Subsidiaries to (a) become a blocked person described in Section 1 of the
Anti-Terrorism Order or (b) knowingly engage in any dealings or transactions or
be otherwise associated with any person who is known by such Borrower Party or
who (after such inquiry as may be required by Applicable Law) should be known
by such Borrower Party to be a blocked person.

 

ARTICLE
X

INSURANCE AND CONDEMNATION PROCEEDS

 

10.01       Casualty
Events.

 

(a)           If
a Casualty Event shall occur as to any Project which results in damage in
excess of $500,000, the Borrower shall give prompt notice of such damage to the
Administrative Agent and shall, subject to the provisions of Section 10.03,
promptly commence and diligently prosecute in accordance with Section 8.07
and this Article X the completion of the repair and restoration of such
Project in accordance with Applicable Law to, as nearly as reasonably possible,
the condition such Project was in immediately prior to such Casualty Event,
with such alterations as may be reasonably approved by the Administrative Agent
(a “Restoration”) for any Restoration for which such approval is
otherwise required pursuant to Section 10.03(e) or alteration for which
such approval is otherwise required pursuant to Section 8.07. The
Borrower shall pay all costs of such Restoration whether or not such costs are
covered by Insurance Proceeds. The Administrative Agent may, but shall not be
obligated to make proof of loss if not made promptly by the Borrower. All Net
Proceeds with respect to a Significant Casualty Event, shall, at the
Administrative Agent’s option, be applied to the payment of the Obligations
unless required to be made available to the Borrower for Restoration hereunder,
in which case such Net Proceeds shall, subject to the provisions of this
Agreement, be made available to the Borrower to pay the costs incurred in
connection with the Restoration. All Net Proceeds with respect to a Casualty
Event that is not a Significant Casualty Event shall, subject to the provisions
of this Agreement, be made available to the Borrower to pay the costs incurred
in connection with the Restoration of the affected Project.

 

101

 

(b)           If
Restoration of any Project following a Casualty Event is reasonably expected to
cost not more than the lesser of (i) $5,000,000 and (ii) ten percent (10%) of
the Appraised Value of such Project (the “Insurance Threshold Amount”),
provided no Event of Default exists, the Borrower may, upon notice to the
Administrative Agent, settle and adjust any claim with respect to such Casualty
Event without the prior consent of the Administrative Agent and the Borrower is
hereby authorized to collect the Insurance Proceeds with respect to any such
claim; provided such adjustment is carried out in a manner consistent with good
business practice. In the event that Restoration of any Project is reasonably
expected to cost an amount equal to or in excess of the Insurance Threshold
Amount (a “Significant Casualty Event”), provided no Event of Default
exists, the Borrower may, with the prior written consent of the Administrative
Agent (which consent shall not be unreasonably withheld), settle and adjust any
claim of the Borrower and agree with the insurer(s) on the amount to be paid on
the loss, and the Insurance Proceeds shall be due and payable solely to the
Administrative Agent (on behalf of the Lenders); notwithstanding the foregoing,
the Administrative Agent shall retain the right to participate (not to the
exclusion of the Borrower) in any such insurance settlement at any time. If an
Event of Default exists, with respect to any Casualty Event, the Administrative
Agent, in its sole discretion, may settle and adjust any claim without the
consent of the Borrower and agree with the insurer(s) on the amount to be paid
on the loss, and the Insurance Proceeds shall be due and payable solely to the
Administrative Agent (on behalf of the Lenders) and deposited in a Controlled
Account and disbursed in accordance herewith. If the Borrower or any party
other than the Administrative Agent is a payee on any check representing
Insurance Proceeds with respect to a Significant Casualty Event, the Borrower
shall immediately endorse, and cause all such third parties to endorse, such
check payable to the order of the Administrative Agent. The Borrower hereby
irrevocably appoints the Administrative Agent as its attorney-in-fact, coupled
with an interest, to endorse such check payable to the order of the
Administrative Agent. The reasonable out-of-pocket expenses incurred by the
Administrative Agent in the settlement, adjustment and collection of the
Insurance Proceeds shall become part of the Obligations and shall be reimbursed
by the Borrower to the Administrative Agent upon demand to the extent not
already deducted by the Administrative Agent from such Insurance Proceeds in
determining Net Proceeds.

 

10.02       Condemnation
Awards.

 

(a)           The
Borrower shall promptly give the Administrative Agent notice of any actual
Taking or any Taking that has been threatened in writing and shall deliver to
the Administrative Agent copies of any and all papers served in connection with
such actual or threatened Taking. The Administrative Agent may participate in
any Taking proceedings (not to the exclusion of the Borrower), and the Borrower
shall from time to time deliver to the Administrative Agent all instruments
requested by it to permit such participation. The Borrower shall, at its
expense, diligently prosecute any such proceedings, and shall consult with the
Administrative Agent, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. The Administrative Agent may
participate in any such proceedings (not to the exclusion of the Borrower) and
may be represented therein by counsel of the Administrative Agent’s selection
at the Borrower’s cost and expense. Without the Administrative Agent’s prior
consent, the Borrower (i) shall not agree to any Condemnation Award and (ii)
shall not take any action or fail to take any action which would cause the
Condemnation Award to be determined; provided, however, that if
no Event of Default exists, 

 

102

 

and upon prior written
notice to the Administrative Agent, the Borrower shall have the right to
compromise and collect or receive any Condemnation Award that does not exceed
the lesser of (i) $5,000,000 and (ii) ten percent (10%) of the Appraised Value
of such Project, provided that such condemnation does not result in any
material adverse effect upon the Project affected thereby. In the event of such
Taking, the Condemnation Award payable is hereby assigned to and (except as
provided in the preceding sentence) shall be paid to the Administrative Agent
(on behalf of the Lenders) and, except as expressly set forth in Section
10.03 hereof, shall be applied to the repayment of the Obligations. If any
Project or any portion thereof is subject to a Taking, the Borrower shall
promptly commence and diligently prosecute the Restoration of such Project in
accordance with this Article X and otherwise comply with the provisions
of Section 10.03. If such Project is sold, through foreclosure or
otherwise, prior to the receipt by the Administrative Agent of the Condemnation
Award, the Administrative Agent and the Lenders shall have the right, whether
or not a deficiency judgment on the Notes shall have been sought, recovered or
denied, to receive the Condemnation Award, or a portion thereof sufficient to
pay the Obligations.

 

10.03       Restoration.

 

(a)           If
each of the Net Proceeds and the cost of completing the Restoration shall be
not more than the Insurance Threshold Amount, the Net Proceeds will be
disbursed by the Administrative Agent to the Borrower upon receipt; provided
that no Major Default or Event of Default then exists and, except where the
Restoration has already been completed by the Borrower and the Borrower seeks
reimbursement for costs of the Restoration, the Borrower delivers to the
Administrative Agent a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Agreement; and the Borrower thereafter commences and
diligently proceeds with the Restoration thereof in compliance with Section
8.07 and this Article X.

 

(b)           If
either the Net Proceeds or the costs of completing the Restoration is equal to
or greater than the Insurance Threshold Amount, the Administrative Agent shall
make the Net Proceeds available for the Restoration in accordance with the
provisions of this Section 10.03. The term “Net Proceeds” for
purposes of this Article X shall mean: 
(i) the net amount of all Insurance Proceeds received by the
Administrative Agent pursuant to the Policies as a result of such damage or
destruction, after deduction of the Administrative Agent’s reasonable
out-of-pocket costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same, or (ii) the net amount of the
Condemnation Award, after deduction of the Administrative Agent’s reasonable
out-of-pocket costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same, whichever the case may be.

 

(c)           The
Net Proceeds shall be made available to the Borrower for Restoration; provided
that each of the following conditions is met:

 

(i)            no Major Default or Event of Default
exists;

 

(ii)           (A) in the event the Net Proceeds are
Insurance Proceeds, less than twenty-five percent (25%) of the total (gross)
floor area of the Improvements on such Project has been damaged, destroyed or
rendered unusable as a result of such Casualty 

 

103

 

Event or (B) in the event the Net Proceeds are
Condemnation Awards, less than ten percent (10%) of the land constituting such
Project is taken, and such land is located along the perimeter or periphery of
such Project, and no portion of the Improvements (other than sidewalks, paved
areas and decorative non-structural elements of the Improvements) is located on
such land;

 

(iii)          Reserved;

 

(iv)          the Debt Service Coverage Ratio
projected (with Operating Income and Operating Expenses also being projected
rather than being based on the previous calendar quarter) by the Administrative
Agent for a period of one year after the Administrative Agent’s estimated date
for the stabilization of the affected Project following completion of the
Restoration will be equal to or greater than 1:50:1.00 based on Leases with
respect to which the tenants do not have the right to or have waived any right
to terminate their respective Leases;

 

(v)           subject to the applicable provisions
of Section 10.03(l), the Borrower shall commence the Restoration as soon
as reasonably practicable (but in no event later than ninety (90) days after
such Casualty Event or Taking, as the case may be, occurs) and shall diligently
pursue the same to completion to the reasonable satisfaction of the
Administrative Agent;

 

(vi)          the Administrative Agent shall be
satisfied that any operating deficits, including all scheduled payments of
principal and interest under the Notes, which will be incurred with respect to
the subject Project as a result of the occurrence of any such Casualty Event or
Taking, as the case may be, will be covered out of (A) the Net Proceeds, (B)
the proceeds of Business Interruption Insurance, if applicable, or (C) other
funds of the Borrower;

 

(vii)         the Administrative Agent shall be
satisfied that the Restoration will be completed on or before the earliest to
occur of (A) six (6) months prior to the Stated Maturity Date, (B) such time as
may be required under Applicable Law in order to repair and restore the subject
Project to the condition it was in immediately prior to such Casualty Event or
to as nearly as possible the condition it was in immediately prior to such
Taking, as the case may be, and (C) six (6) months prior to the expiration of
the Business Interruption Insurance unless the Borrower delivers to the
Administrative Agent such additional security to the Administrative Agent in an
amount reasonably determined by the Administrative Agent which additional
security shall consist of cash or a letter of credit reasonably satisfactory to
the Administrative Agent;

 

(viii)        the subject Project and the use thereof
after the Restoration will be in substantial compliance with and permitted
under all Applicable Laws;

 

(ix)           the Borrower shall deliver, or cause
to be delivered, to the Administrative Agent satisfactory evidence that after
Restoration, the subject Project would be at least as valuable as immediately
before the Casualty Event or Taking occurred;

 

104

 

(x)            such Casualty Event or Taking, as
the case may be, does not result in the permanent loss of any current access to
the subject Project;

 

(xi)           the Borrower shall deliver, or cause
to be delivered, to the Administrative Agent a signed detailed budget approved
in writing by the Borrower’s architect or engineer stating the entire cost of
completing the Restoration, which budget shall be reasonably acceptable to the
Administrative Agent and any architect or engineer the Administrative Agent may
engage (at the Borrower’s expense); and

 

(xii)          the Net Proceeds together with any
cash or cash equivalent deposited by the Borrower with the Administrative Agent
are sufficient in the Administrative Agent’s judgment to cover the cost of the
Restoration.

 

(d)           Except
for proceeds of a Casualty Event or Taking received and retained by the
Borrower in compliance with the provisions of this Article X, the Net
Proceeds shall be held by the Administrative Agent in a Controlled Account,
until disbursed in accordance with the provisions of this Section 10.03,
and shall constitute additional security for the Obligations. Upon receipt of
evidence reasonably satisfactory to the Administrative Agent that all the
conditions precedent to such advance, including those set forth in subsection
(c) above, have been satisfied, the Net Proceeds shall be disbursed by the
Administrative Agent to, or as directed by, the Borrower from time to time
during the course of the Restoration in substantially the same manner and
subject to similar conditions as if such advances were being made in connection
with a construction loan, such manner of disbursement and conditions to be
determined by the Administrative Agent, including the Administrative Agent’s
receipt of (i) advice from the Restoration Consultant (who shall be employed by
the Administrative Agent at the Borrower’s sole expense) that the work
completed or materials installed conform to said budget and plans, as approved
by the Administrative Agent, (ii) evidence that all materials installed and
work and labor performed to the date of the applicable advance (except to the
extent that they are to be paid for out of the requested disbursement) in
connection with the Restoration have been paid for in full, including the
receipt of waivers of lien, contractor’s certificates, surveys, receipted
bills, releases, title policy endorsements and such other evidences of cost,
payment and performance satisfactory to the Administrative Agent, and (iii)
evidence that there exist no notices of pendency, stop orders, mechanic’s or
materialman’s liens or notices of intention to file same, or any other Liens of
any nature whatsoever on the subject Project which have not either been fully
bonded to the reasonable satisfaction of the Administrative Agent and
discharged of record or in the alternative fully insured to the reasonable
satisfaction of the Administrative Agent under the Title Policy.

 

(e)           All
plans and specifications required in connection with any Restoration resulting
in Net Proceeds in excess of the Insurance Threshold Amount shall be subject to
prior review and approval (such approval not to be unreasonably withheld) in
all respects by the Administrative Agent and by an independent consulting
engineer selected by the Administrative Agent (the “Restoration Consultant”).
All plans and specifications required in connection with any Restoration
resulting in Net Proceeds not in excess of the Insurance Threshold Amount shall
be provided to the Administrative Agent in the ordinary course of business. The
Administrative Agent shall have the use of the plans and specifications and all
permits, licenses and approvals required or obtained in connection with any
Restoration. With respect to any Restoration 

 

105

 

resulting in Net Proceeds
in excess of the Insurance Threshold Amount (whether resulting from a Casualty
Event or a Taking), the identity of the contractors, subcontractors and
materialmen engaged in the Restoration, as well as all contracts having a cost
in excess of $100,000, shall be subject to the prior review and approval (such
approval not to be unreasonably withheld) of the Administrative Agent and the
Restoration Consultant. All costs and expenses incurred by the Administrative
Agent in connection with making the Net Proceeds available for the Restoration
including reasonable counsel fees and disbursements and the Restoration
Consultant’s fees, shall be paid by the Borrower. The Borrower shall also
obtain, at its sole cost and expense, all necessary Government Approvals as and
when required in connection with such Restoration and provide copies thereof to
the Administrative Agent and the Restoration Consultant.

 

(f)            In
no event shall the Administrative Agent be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually incurred
from time to time for work in place as part of the Restoration, as certified by
the Restoration Consultant, minus the Restoration Retainage. The term “Restoration
Retainage” shall mean the greater of (i) an amount equal to ten percent
(10%) of the hard costs actually incurred for work in place as part of the
Restoration, as certified by the Restoration Consultant and (ii) the amount
actually held back by the Borrower from contractors, subcontractors and
materialmen engaged in the Restoration. The Restoration Retainage shall not be
released until the Restoration Consultant certifies to the Administrative Agent
that the Restoration has been substantially completed in accordance with the
provisions of this Section 10.03, subject to punch-list items and other
non-material items of work and that all approvals necessary for the
re-occupancy and use of the subject Project have been obtained from all
appropriate Governmental Authorities, and the Administrative Agent receives
evidence reasonably satisfactory to the Administrative Agent that the costs of
the Restoration have been paid in full or will be paid in full out of the Restoration
Retainage; provided, however, that the Administrative Agent will
release the portion of the Restoration Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of the
date upon which the Restoration Consultant certifies to the Administrative
Agent that such contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with its
contract, and the Administrative Agent receives lien waivers and evidence of
payment in full of all sums due to such contractor, subcontractor or
materialman as may be reasonably requested by the Administrative Agent or by
the Title Company issuing the Title Policy, and the Administrative Agent
receives an endorsement to the Title Policy insuring the continued priority of
the lien of the Deed of Trust and evidence of payment of any premium payable
for such endorsement. If required by the Administrative Agent, the release of
any such portion of the Restoration Retainage shall be approved by the surety
company, if any, which has issued a payment or performance bond with respect to
such contractor, subcontractor or materialman.

 

(g)           The
Administrative Agent shall not be obligated to make disbursements of the Net Proceeds
more frequently than once per month.

 

(h)           If
at any time the Net Proceeds or the undisbursed balance thereof shall not, in
the reasonable opinion of the Administrative Agent in consultation with the
Restoration Consultant, be sufficient to pay in full the balance of the costs
which are estimated by the Restoration Consultant to be incurred in connection
with the completion of the Restoration, the Borrower shall deposit the
deficiency (the “Net Proceeds Deficiency”) with the Administrative 

 

106

 

Agent within ten (10)
Business Days of the Administrative Agent’s request and before any further
disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency
shall be held in a Controlled Account and shall be disbursed for costs actually
incurred in connection with the Restoration on the same conditions applicable
to the disbursement of the Net Proceeds, and, until so disbursed, shall
constitute additional security for the Obligations.

 

(i)            After
the Restoration Consultant certifies to the Administrative Agent that a
Restoration has been substantially completed in accordance with the provisions
of this Section 10.03, and the receipt by the Administrative Agent of
evidence satisfactory to the Administrative Agent that all costs incurred in
connection with the Restoration have been paid in full, the excess, if any, of
the Net Proceeds and the remaining balance, if any, of the Net Proceeds
Deficiency deposited in a Controlled Account shall be remitted to the Borrower,
provided that no Event of Default shall exist.

 

(j)            All
Net Proceeds not required (i) to be made available for the Restoration or (ii)
to be returned to the Borrower as excess Net Proceeds pursuant to subsection
(i) above may (A) be retained and applied by the Administrative Agent
toward the payment of the Obligations, whether or not then due and payable, in
such order, priority and proportions as the Administrative Agent in its sole
discretion shall deem proper (but without premium or penalty) or (B) at
the sole discretion of the Administrative Agent, be paid, either in whole or in
part, to the Borrower for such purposes and upon such conditions as the
Administrative Agent shall designate. In the event the Net Proceeds are applied
to the Obligations and all of the Obligations have been performed or are
discharged by the application of less than all of the Net Proceeds, then any
remaining Net Proceeds will be paid over to the Borrower or any other party
legally entitled thereto.

 

(k)           Notwithstanding
any Casualty or Taking, the Borrower shall continue to pay the Obligations in
the manner provided in the Notes, this Agreement and the other Loan Documents
and the Outstanding Principal Amount shall not be reduced unless and until (i)
any Insurance Proceeds or Condemnation Award shall have been actually received
by the Administrative Agent, (ii) the Administrative Agent shall have deducted
its reasonable expenses of collecting such proceeds and (iii) the
Administrative Agent shall have applied any portion of the balance thereof to
the repayment of the Outstanding Principal Amount in accordance with Section
10.03(j). The Lenders shall not be limited to the interest paid on any
Condemnation Award but shall continue to be entitled to receive interest at the
rate or rates provided in the Notes and this Agreement if such interest is then
due hereunder.

 

(l)            Notwithstanding
anything to the contrary contained in this Article X or Section 8.07,
if pursuant to the provisions of this Article X the Net Proceeds are
required to be made available to the Borrower for Restoration of the damage
caused by a Casualty Event or any Taking, the Borrower’s obligation to commence
or thereafter to proceed with such Restoration shall be conditioned upon the
Borrower’s receipt of the Net Proceeds attributable to such Casualty Event or
Taking, respectively; provided, however, that nothing contained
in this sentence (or any other provision of this Article X) shall (i)
defer, limit or excuse in any respect the Borrower’s obligation to commence or
proceed with the Restoration of any Project: (A) if the Borrower does not
diligently pursue the collection of such Net Proceeds; (B) where the relevant
Casualty Event is not a Significant Casualty Event or the Taking involves a claim
of not more 

 

107

 

than the lesser of
$5,000,000 or ten percent (10%) of the Appraised Value of the affected Project;
(C) in the case of a Casualty Event, to the extent that the costs of such
Restoration are included within any applicable deductible or self-insurance
retention, or exceed the applicable limits of insurance, under any insurance
policy maintained hereunder; (D) in the case of a Casualty Event, if the
Borrower is, at the time of such Casualty Event, in default in its obligation
to maintain the insurance policies required under Section 8.05 in any
respect which would reduce the amount of Net Proceeds available to the Borrower
on account of such Casualty Event below the amount which would have been
available had the Borrower not been in default of such obligation, then to the
extent of such reduction; or (E) to the extent that the Net Proceeds available
to the Borrower on account of such Casualty Event or Taking are reasonably
anticipated to be reduced as a result of any defense to coverage or other
defense available to the insurer or condemning authority, whether as a result
of any act or omission of the Borrower or otherwise (provided that the
undisputed portion of such Net Proceeds shall have been paid by the insurer or
condemning authority and made available to the Borrower); (ii) defer, limit or
excuse in any respect the Borrower’s obligation to undertake such prudent
measures (subject in all cases to any applicable provisions in Section 8.07)
as may be necessary to keep any Project, following any Casualty Event or
Taking, safe, secure and protected and as may be appropriate to avoid further
deterioration or damage; or (iii) defer, limit or excuse any obligation of the
Borrower under this Agreement or the other Loan Documents (other than the
obligation to commence and diligently prosecute the Restoration of such
damage).

 

ARTICLE
XI

CASH TRAP ACCOUNT

 

11.01       Low
DSCR Trigger Event. Upon the occurrence of a Low DSCR Trigger Event and on
each day that the required monthly report is due under Section 8.01(e)
and continuing for each month thereafter during any Low DSCR Trigger Period,
the Borrower shall cause all Excess Cash from the Projects to be paid each
month directly to the Administrative Agent for deposit into a Cash Trap Account
established for the Borrower as additional collateral for its Obligations.

 

(a)           Establishment and Maintenance of
the Cash Trap Account.

 

(i)            The Cash Trap Account (A) shall be a
separate and identifiable account from all other funds held by the Depository
Bank and (B) shall contain only funds required to be deposited pursuant to this
Section 11.01. Any interest which may accrue on the amounts on deposit
in a Cash Trap Account shall be added to and shall become part of the balance
of the Cash Trap Account. The Borrower shall enter into with the Administrative
Agent and the applicable Depository Bank a Cash Trap Account Security Agreement
(with such changes thereto as may be required by the Depository Bank and
satisfactory to the Administrative Agent) which shall govern the Cash Trap
Account established for it and the rights, duties and obligations of each party
to such Cash Trap Account Security Agreement.

 

108

 

(ii)           The Cash Trap Account Security
Agreement shall provide that (A) the Cash Trap Account shall be established in
the name of the Administrative Agent, (B) the Cash Trap Account shall be
subject to the sole dominion, control and discretion of the Administrative
Agent, and (C) neither the Borrower nor any other Person, including,
without limitation, any Person claiming on behalf of or through the Borrower,
shall have any right or authority, whether express or implied, to make use of
or withdraw, or cause the use or withdrawal of, any proceeds from the Cash Trap
Account or any of the other proceeds deposited in the Cash Trap Account, except
as expressly provided in this Agreement or in the Cash Trap Account Security
Agreement.

 

(b)           Deposits
to, Disbursements and Release from the Cash Trap Account. All deposits to
and disbursements of all or any portion of the deposits to the Cash Trap
Account shall be in accordance with this Agreement and the Cash Trap Account Security
Agreement. The Borrower hereby agrees to pay any and all fees charged by
Depository Bank in connection with the maintenance of the Cash Trap Account and
the performance of its duties. During any Low DSCR Trigger Period, provided
that no Event of Default exists at the time of any request by the Borrower for
a disbursement from the Cash Trap Account, the Administrative Agent will direct
the Depository Bank to transfer amounts credited to the Cash Trap Account to
the Borrower’s Account to pay or reimburse the Borrower for (i) Real Estate
Taxes or Insurance Premiums, (ii) capital expenditures incurred pursuant to an
Approved Annual Budget (such capital expenditures, “Approved Capital
Expenditures”), (iii) actual costs of tenant improvements and/or leasing
commissions pursuant to an Approved Lease and set forth in an Approved Annual
Budget (such expenditures, “Approved Leasing Expenditures”), or (iv)
capital expenditures which have been approved by the Administrative Agent in
accordance with subsection (c)(iv) below or leasing expenditures
incurred pursuant to an Approved Lease, in either case which are not set forth
in an Approved Annual Budget (such expenditures, “Extraordinary Capital or
Leasing Expenditures”), in accordance with the terms and conditions set
forth below in subsection (c). Provided no Default or Event of Default
then exists, any funds held in the Cash Trap Account shall be released to the
Borrower for the account of the Borrower upon the occurrence of a Low DSCR
Release Event and, in such event the Borrower shall no longer be required to
cause the deposit of the subsequent Excess Cash into the Cash Trap Account
unless a Low DSCR Trigger Event occurs with respect to any future calendar
quarter.

 

(c)           Conditions
to Disbursements from Cash Trap Account. Each disbursement from a Cash Trap
Account is subject to the satisfaction of each of the following conditions:

 

(i)            Disbursements shall be utilized
solely for Real Estate Taxes, Insurance Premiums, Approved Capital
Expenditures, Approved Leasing Expenditures or Extraordinary Capital or Leasing
Expenditures and shall be in an amount no greater than the actual cost of such
Real Estate Taxes or Insurance Premiums, Approved Capital Expenditures,
Approved Leasing Expenditures or Extraordinary Capital or Leasing Expenditures
to the extent not theretofore paid from Operating Income;

 

(ii)           Disbursements for Approved Capital
Expenditures, Approved Leasing Expenditures and Extraordinary Capital or
Leasing 

 

109

 

Expenditures shall not be
made more frequently than monthly, and each disbursement (if any) shall be in
an amount not less than $25,000.00 (unless the disbursement represents the
final disbursement for a particular Approved Capital Expenditure or Approved Leasing
Expenditure);

 

(iii)          Not less than ten (10) days prior to
the requested funding date for a disbursement, the Administrative Agent shall
have received a written request for such disbursement executed by an Authorized
Officer, which request shall specify the date on which the Borrower requests
the disbursement to be made and the Person(s) or account(s) to whom such
disbursement should be made (such duly completed request is referred to herein
as a “Disbursement Request”);

 

(iv)          Not less than ten (10) days prior to
each disbursement for Approved Capital Expenditures, Approved Leasing
Expenditures or Extraordinary Capital or Leasing Expenditures, the
Administrative Agent shall have received, reviewed and approved (A) a
certificate executed by the Borrower, or, if such Person was engaged for such
work, the Borrower’s architect or engineer, as applicable, certifying that, to
the knowledge of such Person, the work for which such disbursement is being
requested has been completed to the percentage of completion specified in the
Disbursement Request substantially in accordance with the applicable plans and
specifications therefor and in a good and workmanlike manner; (B) sworn
statements and conditional lien waivers from all contractors, subcontractors
and materialmen with respect to such work; (C) sworn statements and final lien
waivers from all contractors and subcontractors and materialmen with respect to
work theretofore completed and for which a disbursement was made to the
Borrower in a prior month; (D) copies of paid invoices for prior disbursements
and open invoices for requested disbursements, and an all bills paid affidavit
from the Borrower; (E) with respect to the final payment for a work of
improvement, certificates of occupancy (or similar documentation), as required
by Applicable Law, relating to the work for which such disbursement is being
made; and (F) such other supporting documentation as may be reasonably required
by the Administrative Agent, all in form and substance reasonably satisfactory
to the Administrative Agent. Notwithstanding the foregoing, in lieu of
complying with the requirements in clauses (A) through (F) above with respect
to any requested disbursement for Approved Capital Expenditures, Approved
Leasing Expenditures or Extraordinary Capital or Leasing Expenditures which
consists of leasing commissions or sums due pursuant to any contract or
subcontract providing for an aggregate contract sum of not more than $50,000,
the Borrower may, not less than ten (10) days prior to the requested funding
date for any disbursement on account thereof, deliver to the Administrative
Agent, together with (or as part of) its Disbursement Request, a certificate
executed by an Authorized Officer on behalf of the Borrower certifying that
such sums so requested are due and payable and are Approved Capital Expenditures,
Approved Leasing Expenditures or Extraordinary Capital or Leasing Expenditures
which have been incurred in compliance with this Agreement and containing
copies of the relevant invoices, contracts or other back-up documentation to
confirm that such sums are then owing; and

 

110

 

(v)           Based on the most recent
reconciliation report delivered by the Borrower pursuant to Section
8.01(e)(iii) prior to the delivery of such Disbursement Request (or, if the
most recent such report has not been delivered pursuant to such section or
article, based on such other information as the Administrative Agent shall
determine in its reasonable discretion), the results from the operations of the
Projects for the month and year-to-date covered by such reconciliation report
shall be equal to or better than the results contemplated by the Approved
Annual Budget for such month and year-to-date, except for Extraordinary Capital
or Leasing Expenditures or other expenses or items approved by the
Administrative Agent.

 

ARTICLE
XII

EVENTS OF DEFAULT

 

12.01       Events
of Default. Any one or more of the following events shall constitute an “Event
of Default”:

 

(a)           The
Borrower shall: (i) fail to pay any principal of any Loan when due (whether at
stated maturity, mandatory prepayment or otherwise); or (ii) fail to pay
any interest on any Loan, any fee or any other amount (other than an amount
referred to in clause (i) above) payable by it under this Agreement or under
any other Loan Document, when and as the same shall become due and payable,
and, in the case of this clause (ii), such default shall continue for a
period of five (5) days; or

 

(b)           The
Borrower (or, if applicable, any Borrower Party) shall default in the
performance of any of its obligations under any of Sections 8.05, 8.06,
8.12, 8.17, 8.19 or Article IX (other than Section 9.06);
or any Change in Control shall occur; or the Borrower shall default in the
performance of any of its obligations under Section 8.16 which are required
to be performed during any Low DSCR Trigger Period; or the Borrower shall make
any Restricted Payment while any Event of Default exists; or the Borrower shall
make a Restricted Payment while any other Major Default exists unless such
Major Default is cured within the applicable cure or grace period therefor; or

 

(c)           Any
representation, warranty or certification made or deemed made herein or in any
other Loan Document (or in any Modification hereto or thereto) by the Borrower
or any request, notice or certificate furnished by or on behalf of any Borrower
Party pursuant to the provisions hereof or thereof, shall prove to have been
false or misleading as of the time made or furnished in any material respect;
or

 

(d)           Any
of the Bankruptcy Parties shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or

 

(e)           An
involuntary proceeding shall be commenced or an involuntary petition shall be
filed, seeking (i) liquidation, reorganization or other relief in respect of
any of the Bankruptcy Parties or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for any 

 

111

 

of the Bankruptcy Parties
or for a substantial part of its assets, and, in any such case, such proceeding
or petition shall continue undismissed for a period of sixty (60) days or an
order or decree approving or ordering any of the foregoing shall be entered; or

 

(f)            Any
Bankruptcy Party shall (i) voluntarily commence as to itself any proceeding or
file any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (e) of this Section 12.01, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for it or for a substantial part of any of its
assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any
of the foregoing; or

 

(g)           The
Borrower shall default in the payment when due of any principal of or interest
on any of its Indebtedness (other than the Obligations) in excess of Five
Million Dollars ($5,000,000) and such default shall not be cured within any
applicable notice or cure period provided with respect to such Indebtedness; or
any event specified in any note, agreement, indenture or other document
evidencing or relating to any such Indebtedness shall occur if the effect of
such event is to cause, or (with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such Indebtedness to cause, such
Indebtedness to become due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise), prior to its stated maturity; or

 

(h)           Any
of the Bankruptcy Parties shall be terminated, dissolved or liquidated (as a
matter of law or otherwise) or proceedings shall be commenced by any Person
(including any Bankruptcy Party) seeking the termination, dissolution or
liquidation of any Bankruptcy Party, except, in each case, in connection with a
merger, termination, dissolution or liquidation permitted by Section 9.03(a)
or Section 14.31; or

 

(i)            One
or more (i) judgments for the payment of money (exclusive of judgment amounts
fully covered by insurance (other than permitted deductibles) where the insurer
has admitted liability in respect of the full amount of such judgment)
aggregating in excess of One Million Dollars ($1,000,000) shall be rendered
against one or more of the Borrower Parties or (ii) non-monetary judgments,
orders or decrees shall be entered against any of the Borrower Parties which
have or would reasonably be expected to have a Material Adverse Effect, and, in
either case, the same shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively stayed (or
bonded over through the posting of a bond in accordance with a statutory
bonding procedure the effect of which is to limit the judgment creditor’s claim
to recovery under the bond), or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of such Borrower Party to enforce
any such judgment; or

 

(j)            An
ERISA Event shall have occurred that, in the opinion of the Administrative
Agent, when taken together with all other such ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect; or

 

112

 

(k)           The
Liens created by the Security Documents shall at any time not constitute a
valid and perfected first priority Lien (subject to the Permitted Title
Exceptions) on the collateral intended to be covered thereby in favor of the
Administrative Agent, free and clear of all other Liens (other than the
Permitted Title Exceptions and Liens which are described in clauses (b),
(c), (e) and (g) of the definition of “Permitted Liens” or which
are described in clauses (a), (b), (c), (e) and (h)
of Section 9.02 of this Agreement, and which are in the case of Liens
described in clause (e) of the definition of “Permitted Liens” and Section
9.02 (e) of this Agreement subordinate to the Lien of the Deed of Trust
encumbering the affected Project), or, except for expiration in accordance with
its terms or releases or terminations contemplated by this Agreement, any of
the Security Documents shall for whatever reason be terminated or cease to be
in full force and effect, or the enforceability thereof shall be contested by
any Borrower Party or any of their Affiliates (controlled by the Permitted
Public REIT, in the case of contest occurring after a Permitted Public REIT
Transfer); or

 

(l)            The
Guarantor shall (i) default under any of the Guarantor Documents beyond
any applicable notice and grace period; or (ii) revoke or attempt to
revoke, contest or commence any action against its obligations under any of the
Guarantor Documents; or

 

(m)          At
any time while a Guarantee furnished by the Borrower or any Subsidiary of the Borrower
is in effect with respect to any Guaranteed Line of Credit, any event of
default shall occur under any of the applicable documents evidencing or
securing such Guaranteed Line of Credit; or any event specified in any of the
applicable documents evidencing or securing such Guaranteed Line of Credit
shall occur and the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the lenders providing such
Guaranteed Line of Credit to cause, all amounts outstanding under Guaranteed
Line of Credit to become immediately due and payable prior to the stated
maturity date; or

 

(n)           Reserved

 

(o)           The
Borrower uses, or permits the use of, funds from the Security Accounts for any purpose other than the purpose for which
such funds were disbursed from the Security Accounts; or

 

(p)           Except
as permitted by Section 8.19(i), the failure of Borrower to
maintain, or cause to be maintained, Hedge Agreements with respect to the
Aggregate Notional Amount in accordance with Section 8.19; or the
occurrence of any default by or termination event as to the Borrower or Other
Swap Pledgor under any Hedge Agreement maintained with respect to the Aggregate
Notional Amount which is not cured within the applicable notice and grace or cure
periods provided therein; or

 

(q)           Reserved;

 

(r)            Any
of the Borrower Parties shall default under any of the other terms, covenants
or conditions of this Agreement or any other Loan Document not set forth above
in this Section 12.01 and such default shall continue for thirty (30)
days after notice from the Administrative Agent to the Borrower; provided,
however, that if (i) such default is susceptible of cure but the
Administrative Agent reasonably determines that such non-monetary default 

 

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cannot be reasonably
cured within such thirty (30) day period, (ii) the Administrative Agent
determines, in its sole discretion, that such default does not create a
material risk of sale or forfeiture of, or substantial impairment in value to,
any material portion of the Projects, and (iii) the Borrower has provided
the Administrative Agent with security reasonably satisfactory to the
Administrative Agent against any interruption of payment or impairment of
collateral that is reasonably likely to result from such continuing failure,
then, so long as the relevant Borrower Party shall have commenced to cure such
default within such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure the same, such thirty (30) day period shall be
extended for such time as is reasonably necessary for the relevant Borrower
Party in the exercise of due diligence to cure such default, but in no event
shall such period exceed ninety (90) days after the original notice from the
Administrative Agent or extend beyond the Maturity Date; or

 

(s)           At
any time following a Transfer to a Qualified Successor Entity consisting of a
Permitted Private REIT or its Permitted Private REIT Subsidiary pursuant to Section
9.03(a)(iii), the senior officers of and members of the Board of Directors
of the Permitted Private REIT shall include less than two (2) of the Named
Principals; or at the time of a Permitted Public REIT Transfer, the senior
officers of and members of the Board of Directors of the Permitted Public REIT
shall include less than two (2) of the Named Principals.

 

12.02       Remedies.
Upon the occurrence of an Event of Default and at any time thereafter during
the existence of such event, the Administrative Agent may (subject to, and in
accordance with, the provisions of Section 13.03) and, upon request of
the Required Lenders shall, by written notice to the Borrower, pursue any one
or more of the following remedies, concurrently or successively, it being the intent
hereof that none of such remedies shall be to the exclusion of any other:

 

(a)           In
the case of an Event of Default other than one referred to in clause (e)
or (f) of Section 12.01 with respect to any Borrower Party,
terminate the Commitments and/or declare the Outstanding Principal Amount of
the Loans, and the accrued interest on the Loans and all other amounts payable
by the Borrower hereunder (including any amounts payable under Section 5.05)
and under the Notes and the Obligations of the Borrower under the other Loan
Documents to be forthwith due and payable and, if the Administrative Agent or
an Affiliate is a counterparty to a Hedge Agreement, then the Administrative
Agent may designate a default or similar event under such Hedge Agreement
whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrower. In the case of the occurrence of an
Event of Default referred to in clause (e) or (f) of Section
12.01 with respect to a Borrower Party, the Commitments shall automatically
be terminated and the Outstanding Principal Amount of the Loans, and the
accrued interest on, the Loans and all other amounts payable by the Borrower
hereunder (including any amounts payable under Section 5.05) and
under the Notes and the Obligations of the Borrower under the other Loan
Documents shall automatically become immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrower;

 

(b)           If
the Borrower shall fail, refuse or neglect to make any payment or perform any
Obligations under the Loan Documents, then, while any Event of Default exists
and 

 

114

 

without notice to or
demand upon the Borrower and without waiving or releasing any other right,
remedy or recourse the Administrative Agent may have because of such Event of
Default, the Administrative Agent may (but shall not be obligated to) make such
payment or perform such Obligation for the account of and at the expense of the
Borrower, and shall have the right to enter upon the Projects for such purpose
and to take all such action thereon and with respect to the Projects as it may
deem necessary or appropriate. If the Administrative Agent shall elect to pay
any sum due with respect to the Projects, the Administrative Agent may do so in
reliance on any bill, statement or assessment procured from the appropriate Governmental
Authority or other issuer thereof without inquiring into the accuracy or
validity thereof. Similarly, in making any payments to protect the security
intended to be created by the Loan Documents, the Administrative Agent shall
not be bound to inquire into the validity of any apparent or threatened adverse
title, Lien, encumbrance, claim or charge before making an advance for the
purpose of preventing or removing the same. Additionally, if any Hazardous
Substance affects or threatens to affect any of the Projects, the
Administrative Agent may (but shall not be obligated to) give such notices and
take such actions as it deems necessary or advisable in order to abate the
discharge of or remove any Hazardous Substance; and/or

 

(c)           Exercise
or pursue any other remedy or cause of action permitted under this Agreement,
any or all of the Security Documents or any other Loan Document, or conferred
upon the Administrative Agent and the Lenders by operation of law.

 

ARTICLE
XIII

THE ADMINISTRATIVE AGENT

 

13.01       Appointment,
Powers and Immunities. Each Lender hereby irrevocably appoints and
authorizes the Administrative Agent to act as its agent hereunder and under the
other Loan Documents with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement and of the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent (which term as used in this sentence and in Section 13.05
and the first sentence of Section 13.06 shall include reference to
its Affiliates and its own and its Affiliates’ officers, directors, employees
and agents):

 

(a)           shall
have no duties or responsibilities except those expressly set forth in this
Agreement and in the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a fiduciary or trustee for any Lender
except to the extent that the Administrative Agent acts as an agent with
respect to the receipt or payment of funds, nor shall the Administrative Agent
have any fiduciary duty to the Borrower nor shall any Lender have any fiduciary
duty to the Borrower or any other Lender;

 

(b)           shall
not be responsible to the Lenders for any recitals, statements, representations
or warranties contained in this Agreement or in any other Loan Document, or in
any certificate or other document referred to or provided for in, or received
by any of them under, this Agreement or any other Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, any Note or any other Loan 

 

115

 

Document or any other
document referred to or provided for herein or therein or for any failure by
the Borrower or any other Person to perform any of its obligations hereunder or
thereunder;

 

(c)           shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other Loan Document or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence, bad faith or willful
misconduct;

 

(d)           shall
not, except to the extent expressly instructed by the Required Lenders with
respect to collateral security under the Security Documents, be required to
initiate or conduct any litigation or collection proceedings hereunder or under
any other Loan Document; and

 

(e)           shall
not be required to take any action which is contrary to this Agreement or any
other Loan Document or Applicable Law.

 

The
relationship between the Administrative Agent and each Lender is a contractual
relationship only, and nothing herein shall be deemed to impose on the
Administrative Agent any obligations other than those for which express
provision is made herein or in the other Loan Documents. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it in good faith. The Administrative Agent may deem and treat the payee of a
Note as the holder thereof for all purposes hereof unless and until a notice of
the assignment or transfer thereof shall have been filed with the
Administrative Agent, any such assignment or transfer to be subject to the
provisions of Section 14.07. Except to the extent expressly provided in Sections
13.08 and 13.10, the provisions of this Article XIII are
solely for the benefit of the Administrative Agent and the Lenders, and the
Borrower shall not have any rights as a third-party beneficiary of any of the
provisions hereof and the Lenders may Modify or waive such provisions of this Article
XIII in their sole and absolute discretion.

 

13.02       Reliance
by Administrative Agent. The Administrative Agent shall be entitled to rely
upon any certification, notice, document or other communication (including any
thereof by telephone, telecopy, telegram or cable) reasonably believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Administrative Agent
in good faith. As to any matters not expressly provided for by this Agreement
or any other Loan Document, the Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions given by the Required Lenders, and
such instructions of the Required Lenders and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders.

 

13.03       Defaults.

 

(a)           The
Administrative Agent shall give the Lenders notice of any material Default of
which the Administrative Agent has knowledge or notice. Except with respect to
(i) the nonpayment of principal, interest or any fees that are due and payable
under any of the Loan Documents, (ii) Defaults with respect to which the
Administrative Agent has actually sent 

 

116

 

written notice of to the
Borrower and (iii) material Defaults with respect to which the Administrative
Agent is given written notice (or copied on such written notice) from a third
party specifying such Default, the Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received notice from a Lender or the Borrower
specifying such Default and stating that such notice is a “Notice of Default”. If
the Administrative Agent has such knowledge or receives such a notice from the
Borrower or a Lender in accordance with the immediately preceding sentence with
respect to the occurrence of a material Default, the Administrative Agent shall
give prompt notice thereof to the Lenders. Within ten (10) days of delivery of
such notice of Default from the Administrative Agent to the Lenders (or such
shorter period of time as the Administrative Agent determines is necessary),
the Administrative Agent and the Lenders shall consult with each other to determine
a proposed course of action. The Lenders agree that the Administrative Agent
shall (subject to Section 13.07) take such action with respect to
such Default as shall be directed by the Required Lenders, provided
that, (A) unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may while a Default exists (but shall not
be obligated to) take such action, or refrain from taking such action,
including decisions (1) to make protective advances that the Administrative
Agent determines are necessary to protect or maintain the Projects and (2) to
foreclose on any of the Projects or exercise any other remedy, with respect to
such Default as it shall deem advisable in the interest of the Lenders and (B)
no actions approved by the Required Lenders shall violate the Loan Documents or
Applicable Law. Each of the Lenders acknowledges and agrees that no individual
Lender may separately enforce or exercise any of the provisions of any of the
Loan Documents (including the Notes) other than through the Administrative
Agent. The Administrative Agent shall advise the Lenders of all material
actions which the Administrative Agent takes in accordance with the provisions
of this Section 13.03(a) and shall continue to consult with the Lenders
with respect to all of such actions. Notwithstanding the foregoing, if the
Required Lenders shall at any time direct that a different or additional
remedial action be taken from that already undertaken by the Administrative
Agent, including the commencement of foreclosure proceedings, such different or
additional remedial action shall be taken in lieu of or in addition to, the
prosecution of such action taken by the Administrative Agent; provided
that all actions already taken by the Administrative Agent pursuant to this Section
13.03(a) shall be valid and binding on each Lender. All money (other than
money subject to the provisions of Section 13.03(f)) received from any
enforcement actions, including the proceeds of a foreclosure sale of the Projects,
shall be applied, first, to the payment or reimbursement of the
Administrative Agent for expenses and advances incurred in accordance with the
provisions of Sections 13.03(a) and (d) and 13.05 and to
the payment of any fees owing to the Administrative Agent pursuant to the Loan
Documents, second, to the payment or reimbursement of the Lenders for
expenses incurred in accordance with the provisions of Sections 13.03(b),
(c) and (d) and 13.05; third, to the payment or
reimbursement of the Lenders for any advances made pursuant to Section
13.03(b); fourth, pari passu
to the Lenders in accordance with their respective Proportionate Shares until
the Obligations have been fully paid and discharged in full; and fifth
to the person(s) legally entitled thereto.

 

(b)           All
losses with respect to interest (including interest at the Post-Default Rate)
and other sums payable pursuant to the Notes or incurred in connection with the
Loans, the enforcement thereof or the realization of the security therefor,
shall be borne by the Lenders in accordance with their respective Proportionate
Shares of the Loan, and the Lenders shall promptly, upon request, remit to the
Administrative Agent their respective Proportionate Shares 

 

117

 

of (i) any expenses
incurred by the Administrative Agent in connection with any Default to the
extent any expenses have not been paid by the Borrower, (ii) any advances made
to pay taxes or insurance or otherwise to preserve the Lien of the Security Documents
or to preserve and protect the Projects, whether or not the amount necessary to
be advanced for such purposes exceeds the amount of the Obligations,  (iii) any other expenses incurred in
connection with the enforcement of the Deeds of Trust or other Loan Documents,
and (iv) any expenses incurred in connection with the consummation of the Loans
not paid or provided for by the Borrower. To the extent any such advances are
recovered in connection with the enforcement of the Deeds of Trust or the other
Loan Documents, each Lender shall be paid its Proportionate Share of such
recovery after deduction of the expenses of the Administrative Agent and the
Lenders.

 

(c)           If,
at the direction of the Required Lenders or otherwise as provided in Section
13.03(a), any action(s) is brought to collect on the Notes or enforce the
Security Documents or any other Loan Document, such action shall (to the extent
permitted under applicable law and the decisions of the court in which such
action is brought) be an action brought by the Administrative Agent and the
Lenders, collectively, to collect on all or a portion of the Notes or enforce
the Security Documents or any other Loan Document and counsel selected by the
Administrative Agent shall prosecute any such action at the direction of the
Administrative Agent on behalf of the Administrative Agent and the Lenders, and
the Administrative Agent and the Lenders shall consult and cooperate with each
other in the prosecution thereof. All decisions concerning the appointment of a
receiver while such action is pending, the conduct of such receivership, the
conduct of such action, the collection of any judgment entered in such action
and the settlement of such action shall be made by the Administrative Agent. The
costs and expenses of any such action shall be borne by the Lenders in
accordance with each of their respective Proportionate Shares (without
diminishing or releasing any obligation of the Borrower to pay for such costs).

 

(d)           If,
at the direction of the Required Lenders or otherwise as provided in Section
13.03(a), any action(s) is brought to foreclose any Deed of Trust, such
action shall (to the extent permitted under applicable law and the decisions of
the court in which such action is brought) be an action brought by the
Administrative Agent and the Lenders, collectively, to foreclose all or a
portion of the Deed of Trust and collect on the Notes. Counsel selected by the
Administrative Agent shall prosecute any such foreclosure at the direction of
the Administrative Agent on behalf of the Administrative Agent and the Lenders
and the Administrative Agent and the Lenders shall consult and cooperate with
each other in the prosecution thereof. All decisions concerning the appointment
of a receiver, the conduct of such foreclosure, the manner of taking and
holding title to any such Project (other than as set forth in subsection (e)
below), and the commencement and conduct of any deficiency judgment proceeding
shall be made by the Administrative Agent (subject to the rights of the
Required Lenders under Section 13.03(a)), and all decisions concerning
the acceptance of a deed in lieu of foreclosure and the bid on behalf of the
Administrative Agent and the Lenders at the foreclosure sale of any Project
shall be made by the Administrative Agent with the approval of the Required
Lenders. The costs and expenses of foreclosure will be borne by the Lenders in
accordance with their respective Proportionate Shares.

 

(e)           If
title is acquired to any Project after a foreclosure sale, nonjudicial
foreclosure or by a deed in lieu of foreclosure, title shall be held by the
Administrative Agent in 

 

118

 

its own name in trust for
the Lenders or, at the Administrative Agent’s election, in the name of a wholly
owned subsidiary of the Administrative Agent on behalf of the Lenders.

 

(f)            If
the Administrative Agent (or its subsidiary) acquires title to any Project or is
entitled to possession of any Project during or after the foreclosure, all
material decisions with respect to the possession, ownership, development,
construction, control, operation, leasing, management and sale of such Project
shall be made by the Administrative Agent. All income or other money received
after so acquiring title to or taking possession of such Project with respect
to the Project, including income from the operation and management of such
Project and the proceeds of a sale of such Project, shall be applied, first,
to the payment or reimbursement of the Administrative Agent and the expenses
incurred in accordance with the provisions of this Article XIII and to
the payment of any fees owed to the Administrative Agent, second, to the
payment of operating expenses with respect to such Project; third, to
the establishment of reasonable reserves for the operation of such Project; fourth,
to the payment or reimbursement of the Lenders for any advances made pursuant
to Section 13.03(b); fifth to fund any capital improvement,
leasing and other reserves; and sixth, to the Lenders in accordance with
their respective Proportionate Shares.

 

13.04       Rights
as a Lender. With respect to its Commitment and the Loans made by it,
Eurohypo (and any successor acting as Administrative Agent) in its capacity as
a Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. Subject to the provisions of Sections 4.07 and 14.10,
Eurohypo (and any successor acting as Administrative Agent) and any of its
Affiliates may (without having to account therefor to any other Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, investment banking, trust or other business with the Borrower
(and any of its Affiliates) as if it were not acting as the Administrative
Agent and Eurohypo (and any such successor) and any of its Affiliates may
accept fees and other consideration from the Borrower for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.

 

13.05       Indemnification.
Each Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower, but without limiting the obligations of the
Borrower under Section 14.03) in accordance with their
Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Administrative Agent in its capacity as Administrative
Agent (including by any Lender) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the Transactions (including the costs and expenses that
the Borrower is obligated to pay under Section 14.03, but excluding,
unless a Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof, provided that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence, bad faith or willful misconduct of the Administrative
Agent.

 

119

 

13.06       Non-Reliance
on Administrative Agent and Other Lenders. Each Lender agrees that it has,
independently and without reliance on the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its decision to
enter into this Agreement and that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or under any other Loan Document. The Administrative Agent shall not be
required to keep itself informed as to the performance or observance by the
Borrower of this Agreement or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Borrower. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of the Borrower (or any of its Affiliates) that may come
into the possession of the Administrative Agent or any of its Affiliates.

 

13.07       Failure
to Act. Except for action expressly required of the Administrative Agent
hereunder and under the other Loan Documents, the Administrative Agent shall in
all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 13.05
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action, subject to the limitations on
such obligations contained in such Section 13.05.

 

13.08       Resignation
of Administrative Agent. It is agreed by the Lenders that subject to the
terms of this Loan Agreement, the Administrative Agent will remain the
Administrative Agent under this Agreement and the other Loan Documents throughout
the term of the Loans; provided, however, that (a) the
Administrative Agent may assign all its rights as the Administrative Agent to
any Related Entity of Eurohypo, and such Related Entity shall assume the
obligations of Administrative Agent hereunder arising after the date of such
assignment, (b) subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by giving at least thirty (30) days’ prior written notice thereof to
the Lenders and the Borrower and (c) the Administrative Agent may be removed
upon the unanimous consent of the Lenders (excepting therefrom the
Administrative Agent in its capacity as a Lender) on account of the gross
negligence, bad faith or willful misconduct of the Administrative Agent. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent that shall be a Person that, provided
that no Event of Default then exists, meets the qualifications of an Eligible
Assignee with an office in the United States through which it will act as the
servicer of the Loans; who is knowledgeable and experienced in servicing real
estate secured syndicated commercial loans in the United States; who (together
with its Affiliates and Related Entities and any Approved Funds managed by it
or by any of its Affiliates or Related Entities) then holds (and agrees in
writing for the benefit of the Borrower to maintain, for so long as it shall
remain the Administrative Agent and provided that no Event of Default has
occurred), minimum Loans and Commitments either (i) in an aggregate principal
amount not less than ten percent (10%) of the aggregate Outstanding Principal
Amount of the Loans, (ii) comprising Loans and 

 

120

 

Commitments evidenced by a Note C, which comprise
at least two and one-half percent (21⁄2%) of the aggregate Loans and Commitments
of all Lenders and which, determined collectively with the Loans and
Commitments evidenced by a Note C of Eurohypo and Barclays Capital Real Estate
Inc. and their respective Affiliates, Related Entities and Approved Funds
managed by either of them or their respective Affiliates or Related Entities,
comprise at least five percent (5%) of the aggregate Loans and Commitments of
all Lenders, but only (in the case of this clause (ii)) if such replacement
Administrative Agent also qualifies and is named as the replacement
Administrative Agent pursuant to the loan agreements entered into by Eurohypo
as administrative agent with Douglas Emmett 1993, LLC, Douglas Emmett 1995,
LLC, Douglas Emmett 1996, LLC, Douglas Emmett 1997, LLC, Douglas Emmett 2000,
LLC, and Douglas Emmett 2002, LLC and certain co-borrowers named therein to the
extent then outstanding or (iii) only if the replacement Administrative
Agent is Barclays Capital Real Estate Inc. or one of its Affiliates, Related
Entities or Approved Funds managed by Barclays Capital Real Estate Inc or one
of its Affiliates or Related Entities, comprising Loans and Commitments
evidenced by a Note C, which comprise at least two and one-half percent (21⁄2%)
of the aggregate Loans and Commitments of all Lenders, and who agrees
in writing for the benefit of the Borrower not to resign except in accordance
with the provisions of this Loan Agreement. If such successor Administrative
Agent is not a Lender (or is a Lender, but such Lender does not comply with the
requirements of the second sentence of this Section 13.08), as long as
no Major Default exists, the Borrower shall have the right to approve such
successor Administrative Agent, such approval not to be unreasonably withheld
or delayed and which consent shall be deemed to have been given unless written
notice of disapproval is delivered by the Borrower to the resigning
Administrative Agent within five (5) Business Days after notice of such
proposed successor Administrative Agent has been delivered to the Borrower. If,
in the case of a resignation by the Administrative Agent, no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent’s giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, that shall be a Person that meets the requirements of the
second sentence of this Section 13.08. If any successor Administrative
Agent is not a Lender (or is a Lender, but such Lender does not comply with the
requirements of the second sentence of this Section 13.08), the
Borrower, as long as no Major Default exists, shall have the right to approve
such successor Administrative Agent, such approval not to be unreasonably
withheld or delayed and which consent shall be deemed to have been given unless,
in the case of a resignation, written notice of disapproval is delivered by the
Borrower to the resigning Administrative Agent within five (5) Business Days
after notice of such proposed successor Administrative Agent has been delivered
to the Borrower. Upon the acceptance of any appointment as the Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
such successor Administrative Agent shall assume all obligations of the
Administrative Agent hereunder arising after the date of such acceptance, and
the retiring or removed Administrative Agent shall be discharged from its
duties and obligations hereunder; provided, however, that the
retiring or removed Administrative Agent shall not be discharged from any
liabilities which existed prior to the effective date of such resignation. The
fees payable by the Borrower to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After any 

 

121

 

retiring
Administrative Agent’s resignation hereunder as the Administrative Agent, the
provisions of this Article XIII shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
acting as the Administrative Agent.

 

13.09       Consents
under Loan Documents. Subject to the provisions of Section 14.05,
the Administrative Agent may (a) grant any consent or approval required of it
or (b) consent to any Modification or waiver under any of the Loan Documents. If
the Administrative Agent solicits any consents or approvals from the Lenders
under any of the Loan Documents, each Lender shall within ten (10) Business
Days of receiving such request, give the Administrative Agent written notice of
its consent or approval or denial thereof; provided that, if any Lender
does not respond within such ten (10) Business Days or within any such shorter
period as required in this Agreement or any other Loan Document, such Lender
shall be deemed to have authorized the Administrative Agent to vote such Lender’s
interest with respect to the matter which was the subject of the Administrative
Agent’s solicitation as the Administrative Agent elects. Any such solicitation
by the Administrative Agent for a consent or approval shall be in writing and
shall include a description of the matter or thing as to which such consent or
approval is requested and shall include the Administrative Agent’s recommended
course of action or determination in respect thereof.

 

13.10       Authorization.
The Administrative Agent is hereby authorized by the Lenders to execute,
deliver and perform in accordance with the terms of each of the Loan Documents
to which the Administrative Agent is or is intended to be a party and each
Lender agrees to be bound by all of the agreements of the Administrative Agent
contained in such Loan Documents. The Borrower shall be entitled to rely on all
written agreements, approvals and consents received from the Administrative
Agent as being that also of the Lenders, without obtaining separate
acknowledgment or proof of authorization of same.

 

13.11       Amendments
Concerning Agency Function. Notwithstanding anything to the contrary
contained in this Agreement, the Administrative Agent shall not be bound by any
waiver, amendment, supplement or Modification of this Agreement or any other
Loan Document which affects its duties, rights and/or functions hereunder or
thereunder unless it shall have given its prior written consent thereto.

 

13.12       Liability
of the Administrative Agent. The Administrative Agent shall not have any
liabilities or responsibilities to the Borrower on account of the failure of
any Lender (other than the Administrative Agent in its capacity as a Lender) to
perform its obligations hereunder or to any Lender on account of the failure of
the Borrower to perform its obligations hereunder or under any other Loan
Document.

 

13.13       Transfer
of Agency Function. Without the consent of the Borrower or any Lender, the
Administrative Agent may at any time or from time to time transfer its
functions as the Administrative Agent hereunder to any of its offices wherever
located in the United States; provided that the Administrative Agent
shall promptly notify the Borrower and the Lenders thereof.

 

13.14       Co-Lead
Arranger and Joint Bookrunner. No Lender identified on the cover page of or
elsewhere in this Agreement as a “Co-Lead Arranger” or “Joint Bookrunner” 

 

122

 

shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders under this Agreement and
the other Loan Documents as a Lender.

 

ARTICLE
XIV

 

MISCELLANEOUS

 

14.01       Non-Waiver;
Remedies Cumulative. No failure on the part of the Administrative Agent or
any Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under this Agreement or any
other Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement or any
other Loan Documents preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The remedies provided herein
and in the other Loan Documents are cumulative and not exclusive of any
remedies provided by law.

 

14.02       Notices.

 

(a)           All
notices, requests, demands, statements, authorizations, approvals, directions,
consents and other communications provided for herein and under the Loan
Documents shall be given or made in writing and shall be deemed sufficiently
given or served for all purposes as of the date (a) when hand delivered,
(b) three (3) days after being sent by postage pre-paid registered or
certified mail, return receipt requested, (c) one (1) Business Day after being
sent by reputable overnight courier service, or (d) with a simultaneous
delivery by one of the means in clause (a), (b) or (c)
above, by facsimile, when sent, with confirmation and a copy sent by first
class mail, in each case addressed to the intended recipient at the “Address
for Notices” specified below its name on the signature pages hereof; or, as to
any party, at such other address as shall be designated by such party in a
notice to each other party hereto. Unless otherwise expressly provided in the
Loan Documents, the Borrower shall only be required to send notices, requests,
demands, statements, authorizations, approvals, directions, consents and other
communications to the Administrative Agent on behalf of all of the Lenders.

 

(b)           Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to
notices pursuant to Article II or notices pursuant to Section 13.03
unless otherwise agreed by the Administrative Agent and the applicable Lender. The
Administrative Agent or the Borrower may, in its discretion, agree (in writing)
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that
approval of such procedures by such party may be limited to particular notices
or communications.

 

(c)           Any
person shall have the right to specify, from time to time, as its address or
addresses for purposes of this Agreement, any other address or addresses upon
giving notice thereof to each other person then entitled to receive notices or
other instruments hereunder at 

 

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least five (5) days
before such change of address shall become effective for purposes of this
Agreement.

 

14.03       Expenses,
Etc. Subject to the limitation set forth in Section 14.26:

 

(a)           The
Borrower agrees to pay on demand or reimburse on demand to the applicable party
all reasonable out-of-pocket costs and expenses of the Administrative Agent and
the Arranger incurred prior to the Closing Date or otherwise in connection with
the closing of the Loans (including customary post-closing follow-through) and
in connection with the satisfaction of the requirements of Section 8.19
following the Closing Date, including, but not limited to, (i) the
reasonable fees and expenses for Morrison & Foerster LLP, counsel to the
Administrative Agent and Eurohypo; such legal fees to be paid on the Closing
Date; provided, however, that payment of
ten percent (10%) of such legal fees shall be deferred and payable promptly
upon the Borrower’s receipt of a closing binder and legal invoices prepared by
Morrison & Foerster LLP and payment of any such legal fees relating to
the satisfaction of the requirements of Section 8.19 following the
Closing Date shall be payable promptly following the Borrower’s receipt of any
legal invoice therefor (if delivered subsequent to the invoices covering the
10% retention referred to above), (ii) due diligence expenses, including title
insurance reports and policies, surveys, title and lien searches and appraisals
(including the Appraisal and the Environmental Reports) and (iii) fees and
expenses for the services of an insurance consultant, in connection with:  the negotiation, preparation, execution and
delivery of this Agreement and the other Loan Documents and initial funding of
the Loans hereunder and the creation and perfection of the Liens to be created
by the Security Documents.

 

(b)           The
Borrower also agrees to pay on demand or reimburse on demand to the applicable
party all reasonable out-of-pocket costs and expenses of the Administrative
Agent incurred after the Closing Date (including, but not limited to, the
reasonable fees and expenses of legal counsel, but excluding any travel
expenses incurred for travel by the personnel of the Administrative Agent (but
not any of its consultants when engaged in services for which the Borrower is
required to reimburse the Administrative Agent hereunder, with the
understanding that the Administrative Agent shall use good faith efforts to
attempt to engage qualified local consultants to provide such services) and
also excluding the Administrative Agent’s internal overhead) in connection with
(i) any release of a Project under Section 2.09, (ii) the negotiation or
preparation of any Modification or waiver of any of the terms of this Agreement
or any of the other Loan Documents (whether or not consummated), (iii) the
protection and maintenance of the perfection and priority of the Liens created
pursuant to the Security Documents, (iv) the negotiation with any tenant,
execution, delivery or recordation of any SNDA Agreement, (v) any review
or inspection of the work undertaken pursuant to Section 8.21
(including, without limitation, any seismic review undertaken to measure the
probable maximum loss with respect to the affected Projects following the
completion of such work); any monitoring or evaluation of environmental
conditions occurring at any Project following the occurrence of (A) any
event for which notice is required under Section 8.11(b), (B) any
violation by the Borrower of any of its covenants contained in Section
8.11(a) or (C) any act or occurrence for which the Borrower is
obligated to indemnify the Administrative Agent or any Lender pursuant to the
terms set forth in the Environmental Indemnity Agreement; any review,
inspection or evaluation undertaken by the Restoration Consultant; and the preparation
of any reports or studies in connection with any of the foregoing, (vi) any
review of documents or requests, consideration for approval or 

 

124

 

disapproval or exercise
of rights outside of the ordinary day-to-day administration of the Loans and
the Loan Documents, and (vii) any other act, condition, request, delivery
or other item, if any other applicable provision of this Agreement or the other
Loan Documents provides for the costs and expenses of the Administrative Agent
in connection therewith to be paid by the Borrower and are not in violation of the
limitations contained herein.

 

(c)           The
Borrower also agrees to pay on demand or reimburse on demand to the applicable
party all reasonable out-of-pocket costs and expenses of the Lenders and the
Administrative Agent (including, but not limited to, the reasonable fees and
expenses of legal counsel) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom, including all manner
of participation in or other involvement with (A) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (B) judicial
or regulatory proceedings and (C) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of this Section
14.03.

 

(d)           The
Borrower also agrees to pay on demand or reimburse on demand to the applicable
party all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any Governmental Authority in respect of this Agreement or
any of the other Loan Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection of any
security interest contemplated by any Security Document or any other document
referred to therein.

 

14.04       Indemnification.
(a) The Borrower hereby agrees to (i) protect and indemnify the
Indemnified Parties from, and hold each of them harmless, from and against all
damages, losses, claims, actions, liabilities (or actions, investigations or
other proceedings commenced or threatened in respect thereof) penalties, fines,
costs and expenses including reasonable attorneys’ fees and expenses
(collectively and severally, “Losses”) which may be imposed upon,
asserted against or incurred or paid by any of them resulting from the claims
of any third party relating to or arising out of (A) the Projects, (B) any of
the Loan Documents or the Transactions, (C) any ERISA Events, (D) any
Environmental Losses and (E) any act performed or permitted to be performed by
any Indemnified Party under any of the Loan Documents, except for Losses to the
extent determined by a court of competent jurisdiction to be caused by the
gross negligence, bad faith or willful misconduct of an Indemnified Party (but
the effect of this exception only eliminates the liability of the Borrower with
respect to the Indemnified Party (and if such Indemnified Party is not a
Lender, the Lender on whose behalf such Indemnified Party was acting) to the
extent such Indemnified Party has been adjudged to have so acted and not with
respect to any other Indemnified Party), and (ii) reimburse each Indemnified
Party on demand for any expenses (including the reasonable attorneys’ fees and
disbursements) reasonably incurred in connection with the investigation of,
preparation for or defense of any actual or threatened claim, action or
proceeding arising therefrom (excluding any action or proceeding where the
Indemnified Party is not a party to such action or proceeding out of which any
such expenses arise unless such Indemnified Party is required to participate or
respond in connection with such action or proceeding (e.g., by way of
deposition, discovery requests, testimony, subpoena or similar reason)). The
Obligations shall not be considered to have been paid in full unless all
obligations of the Borrower under this Section 14.04(a) shall 

 

125

 

have been fully
performed (except for contingent indemnification obligations for which no claim
has actually been made pursuant to this Agreement). This Section 14.04(a)
shall survive repayment in full of the Obligations and, as to any Project, the
release of that Project as collateral for the Loans in accordance with Section
2.09 of this Agreement, and in addition, shall survive the assignment, sale
or other transfer of the Administrative Agent’s or any Lender’s interest
hereunder.

 

(b)           Reserved.

 

14.05       Amendments,
Etc. Except as otherwise expressly provided in this Agreement or the other
Loan Documents, this Agreement and the other Loan Documents may be Modified
only by an instrument in writing signed by the Borrower and the Administrative
Agent acting with the consent of the Required Lenders; provided
that:  (a) no Modification or waiver
shall, unless by an instrument signed by all of the Lenders or by the Administrative
Agent acting with the written consent of all of the Lenders:  (i) extend the date fixed for the
payment of principal of or interest on any Loan or any fee hereunder or under
the Loan Documents, including, without limitation, any extension of the
Maturity Date, (ii) reduce the amount of any such payment of principal,
(iii) reduce the rate at which interest is payable thereon or any fee is
payable hereunder, (iv) alter the rights or obligations of the Borrower to
prepay Loans, (v) alter the manner in which payments or prepayments of
principal, interest or other amounts hereunder shall be applied as between the
Lenders or Types of Loans, (vi) alter the terms of this Section 14.05,
(vii) Modify the definition of the term “Required Lenders” or Modify in
any other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to Modify any provision hereof,
(viii) alter the several nature of the Lenders’ obligations hereunder,
(ix) release the Borrower, any collateral or the Guarantor or otherwise
terminate any Lien under any Security Document providing for collateral
security (except that no such consent shall be required, and the Administrative
Agent is hereby authorized, to release any Lien covering the collateral under
the Security Documents, and to release (or terminate the liability of) the
Borrower under the Loan Documents, and to release the Guarantor under the
Guarantor Documents:  (A) as
expressly provided in the Loan Documents and (B) upon payment of the
Obligations in full in accordance with the terms of the Loan Documents), (x)
agree to additional obligations being secured by such collateral security, or
(xi) alter the relative priorities of the obligations entitled to the
benefits of the Liens created under the Security Documents; (b) any
Modification of Article XIII, or of any of the rights or duties of the
Administrative Agent hereunder, shall require the consent of the Administrative
Agent and the Required Lenders; and (c) no Modification shall increase the
Commitment of any Lender without the consent of such Lender. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents, the Administrative Agent is hereby authorized by the Lenders to
enter into Modifications to the Loan Documents which are ministerial in nature,
including the preparation and execution of Uniform Commercial Code forms,
Assignments and Assumptions and SNDA Agreements and any amendment to the
definition of “Change of Control” that would eliminate the exclusions set forth
in clause (i) or (ii) of such definition.

 

14.06       Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.

 

126

 

14.07       Assignments
and Participations.

 

(a)           Consent
Required for Assignments by the Borrower. Except as otherwise expressly
permitted by this Agreement, the Borrower may not assign any of its rights or
obligations hereunder or under the Loan Documents without the prior consent of
all of the Lenders and the Administrative Agent.

 

(b)           Assignments
by Lenders.

 

(i)            Subject to the conditions set forth
in subsection (b)(ii) below, any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing
to it) with the prior written consent of:

 

(A)          the Borrower, whose consent shall not
be unreasonably withheld, conditioned or delayed; provided that (1) such
consent shall be deemed granted should the Borrower fail to respond within five
(5) Business Days upon receipt of a notice of such assignment and (2) should
the Borrower not give such consent, the Borrower shall provide to the
Administrative Agent and the Lender requesting such assignment its specific
reasons for such disapproval; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a Lender that
is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business (and which
is not engaged in the business of acquiring direct or indirect ownership
interests in commercial real estate projects), an Eligible Assignee or, if a
Major Default exists, any other assignee; and

 

(B)           the Administrative Agent, whose
consent shall not be unreasonably withheld, conditioned or delayed; provided
that no consent of the Administrative Agent shall be required for an assignment
of all or a portion of any Commitment or Loans to an assignee that is a Lender
with a Commitment immediately prior to giving effect to such assignment or an
Affiliate of the assigning Lender if also an Eligible Assignee.

 

(ii)           Assignments shall be subject to the
following additional conditions:

 

(A)          except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment or Loan, the amount of the
Commitment or Loan of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent; provided that no such consent of the Borrower shall be required
if an Event of Default exists;

 

(B)           each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement;

 

127

 

(C)           the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $4,500; and

 

(D)          the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

(iii)          Subject to acceptance and recording
thereof pursuant to subsection (b)(iv) of this Section 14.07,
from and after the effective date specified in each Assignment and Assumption
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and obligations
of a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 5.01,
5.05, 5.06 and 14.04); provided, however,
that in no event shall such assigning Lender be released with respect to any
defaults by or liabilities of such Lender under the Loan Documents which
accrued prior to such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section
14.07 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with subsection
(c) of this Section 14.07.

 

(iv)          The Administrative Agent shall
maintain at its Principal Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitment of, and principal amount of the Loan owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive absent manifest error, and the
Borrower, the Administrative Agent, and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Administrative Agent shall record all entries in the Register promptly
upon their being effected. The Register shall be available for inspection by
the Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)           Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire, the processing and
recordation fee referred to in subsection (b) of this Section 14.07
and any written consent to such assignment required by subsection (b) of
this Section 14.07, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this subsection.

 

128

 

(c)           Participations.

 

(i)            Any Lender may, without the consent
of the Borrower or the Administrative Agent, sell participations to one or more
banks or other financial institutions (including, without limitation, life insurance
companies), or an Affiliate of the Lender that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business (and which is not engaged in the
business of acquiring direct or indirect ownership interests in commercial real
estate projects) (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement and the other Loan Documents
(including all or a portion of its Commitment and the Loans owing to it); provided
that (A) such Lender’s obligations under this Agreement and the other Loan
Documents shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement and the other Loan
Documents. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and the other Loan Documents and to approve any
Modification or waiver of any provision of this Agreement or any other Loan
Document; provided that such agreement or instrument may provide that
such Lender will not, without the consent of such Participant, agree to (1)
increase or extend the term of such Lender’s Commitment to the extent that it
affects such Participant, (2) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans, (3) reduce the amount of
any such payment of principal or (4) reduce the rate at which interest is
payable thereon to a level below the rate at which the Participant is entitled
to receive such interest. Subject to subsection (c)(ii) of this Section
14.07, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 5.01, 5.05 and 5.06 to the same
extent, but subject to the same limitations, conditions and duties set forth in
such sections, as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section 14.07.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 14.10 as though it were a Lender; provided
that such Participant agrees to be subject to Section 14.10 as though it
were a Lender.

 

(ii)           A Participant shall not be entitled
to receive any greater payment under Section 5.01 or 5.06
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 5.06 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees in writing, for the benefit of the Borrower, to comply with Section 5.06
as though it were a Lender.

 

(d)           Pledges.
In addition to the assignments and participations permitted under the foregoing
provisions of this Section 14.07: 
(a) any Lender may (without notice to the Borrower, the Administrative
Agent or any other Lender and without payment of any fee) assign and pledge all
or any portion of its Loans and its Note to any Federal Reserve Bank as
collateral 

 

129

 

security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank,
and such Loans and Note shall be transferable as provided therein; and (b) any
Lender may (upon notice to the Administrative Agent and without payment of any
fee) assign and pledge all or any portion of its Loans and its Note as
collateral for financing, and such Loans and Note shall be fully transferable
as provided therein. No such assignment shall release the assigning Lender from
its obligations hereunder.

 

(e)           Provision
of Information to Assignees and Participants. A Lender may furnish any
information concerning the Borrower, the Projects, the Loans, the Borrower’s
Member or any Borrower Party in the possession of such Lender from time to time
to assignees, pledgees and participants (including prospective assignees,
pledgees and participants), subject, however, to the party receiving such
information confirming in writing that such party and such information is
subject to the provisions of Section 14.24.

 

(f)            No
Assignments to the Borrower or Affiliates. Anything in this Section
14.07 or Section 14.27 to the contrary notwithstanding, each Lender
agrees for itself that it shall not assign or participate any interest in any
Loan held by it hereunder to the Borrower or any of its Affiliates without the
prior consent of each Lender.

 

14.08       Survival.
The obligations of the Borrower under Sections 3.02(e), 5.01, 5.05,
5.06, 14.03, 14.04 and 14.12, and the obligations
of the Lenders under Sections 13.05, shall survive the repayment of
the Obligations, the termination of the Commitments and, as to any Project, the
release of that Project as collateral for the Loans in accordance with Section
2.09 of this Agreement, and in addition, in the case of any Lender that may
assign any interest under the Loan Documents in accordance with the terms
thereof including any Lender’s interest in its Commitment or Loan hereunder,
shall survive the making of such assignment, notwithstanding that such
assigning Lender may cease to be a “Lender” hereunder. In addition, each representation
and warranty made herein or pursuant hereto by the Borrower shall survive the
making of such representation and warranty, and no Lender shall be deemed to
have waived, by reason of making any Loan, any Default that may arise by reason
of such representation or warranty proving to have been false or misleading,
notwithstanding that such Lender or the Administrative Agent may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time such Loan was made.

 

14.09       Reserved.

 

14.10       Right
of Set-off.

 

(a)           Upon
the occurrence and during the continuance of any Event of Default, each of the
Lenders is, subject (as between the Lenders) to the provisions of subsection
(c) of this Section 14.10, hereby authorized at any time and from
time to time, without notice to the Borrower (any such notice being expressly
waived by the Borrower) and to the fullest extent permitted by law, to set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held, and other indebtedness at any time owing, by such
Lender in any of its offices, in Dollars or in any other currency, to or for
the credit or the account of the Borrower against any and all of the respective
obligations of the Borrower now or hereafter existing under the Loan Documents,
irrespective of whether or not such Lender or any other 

 

130

 

Lender shall have made
any demand hereunder and although such obligations may be contingent or
unmatured and such deposits or indebtedness may be unmatured. Each Lender and
the Administrative Agent acknowledges that it is aware of the implications of
the anti-deficiency laws and “one form of action” laws of various jurisdictions
in which the Collateral may be located. These laws, in general, restrict or
prohibit the exercise of remedies under loans secured by real property, and the
violation of those laws can result in severe consequences to a lender,
including a loss of the real property security. These laws include, for
example, Section 726 of the California Code of Civil Procedure. Therefore,
anything obtained in this Section 14.10 to the contrary notwithstanding,
no Lender shall exercise any right of set-off against any Borrower Party with
respect to the Obligations under the Loan Documents without the prior written
consent of all of the Lenders. In the event that any Lender exercises any right
of set-off without all of the Lenders’ prior consent, such Lender shall protect,
indemnify, defend and hold harmless the Administrative Agent and each of the
other Lenders from and against any liability, loss, cost, damage, or injury
that may result from such Person’s exercise of its right of set-off. This Section
14.10 shall inure only for the benefit of the Lenders and the Administrative
Agent, and may not be relied upon by any third party, including but not limited
to the Borrower and its Subsidiaries.

 

(b)           Each
Lender shall promptly notify the Borrower and the Administrative Agent after
any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of the Lenders under this Section 14.10 are in addition to other
rights and remedies (including other rights of set-off) which the Lenders may
have.

 

(c)           If
an Event of Default has resulted in the Loans becoming due and payable prior to
the stated maturity thereof, each Lender agrees that it shall turn over to the
Administrative Agent any payment (whether voluntary or involuntary, through the
exercise of any right of setoff or otherwise) on account of the Loans held by
it in excess of its ratable portion of payments on account of the Loans
obtained by all the Lenders.

 

14.11       Remedies
of Borrower. It is expressly understood and agreed that, notwithstanding
any Applicable Law or any provision of this Agreement or the other Loan
Documents to the contrary, the liability of the Administrative Agent and each
Lender (including their respective successors and assigns) and any recourse of
the Borrower against the Administrative Agent and each Lender shall be limited
solely and exclusively to their respective interests in the Loans and/or Commitments
or the Projects. Without limiting the foregoing, in the event that a claim or
adjudication is made that the Administrative Agent, any of the Lenders, or
their agents, acted unreasonably or unreasonably delayed acting in any case
where by Applicable Law or under this Agreement or the other Loan Documents, the
Administrative Agent, any Lender or any such agent, as the case may be, has an
obligation to act reasonably or promptly, or otherwise violated this Agreement or
the Loan Documents, the Borrower agrees that none of the Administrative Agent,
the Lenders or their agents shall be liable for any incidental, indirect,
special, punitive, consequential or speculative damages or losses resulting
from such failure to act reasonably or promptly in accordance with this
Agreement or the other Loan Documents.

 

14.12       Brokers.
The Borrower hereby represents to the Administrative Agent and each Lender that
it has not dealt with any broker, underwriter, placement agent, or finder in 

 

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connection with
the Transactions, except for Secured Capital. The Borrower hereby agrees that
it shall pay any and all brokerage commissions or finders fees owing to Secured
Capital in connection with the Transactions and agrees and acknowledges that
payment of all such brokerage commissions or finders fees shall be the Borrower’s
sole responsibility. The Borrower hereby agrees to protect and indemnify and
hold the Administrative Agent and each 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 Secured Capital and any Person that such Person
acted on behalf of the Borrower in connection with the Transactions.

 

14.13       Estoppel
Certificates.

 

(a)           The
Borrower, within ten (10) days after the Administrative Agent’s request, shall
furnish to the Administrative Agent a written statement, duly acknowledged,
certifying to the Administrative Agent and each Lender and/or, subject to the
terms of Section 14.07, any proposed assignee of any portion of the interests
hereunder:  (i) the amount of the
Outstanding Principal Amount then owing under this Agreement and each of the
Notes, (ii) the terms of payment and Stated Maturity Date of the Loans (or if
earlier, the Maturity Date), (iii) the date to which interest has been paid
under each of the Notes, (iv) whether, to the Borrower’s knowledge, any offsets
or defenses exist against the repayment of the Loans and, if any are alleged to
exist, a reasonably detailed description thereof, (v) the extent to which the Loan
Documents have been Modified by the Borrower and (vi) such other information as
the Administrative Agent shall reasonably request.

 

(b)           The
Administrative Agent, within ten (10) days after the Borrower’s reasonable
request therefor, shall furnish to the Borrower a written statement, duly
acknowledged, certifying to any prospective permitted purchaser of an interest
in the Borrower or any prospective permitted lender to the Borrower or any
lender providing any Guaranteed Line of Credit, as to which the Borrower or any
Subsidiary thereof remains or will be obligated under a Guarantee: (i) the
amount of the Outstanding Principal Amount, (ii) the terms of payment and
Stated Maturity Date of the Loans (or if earlier, the Maturity Date), (iii) the
date to which interest has been paid under each of the Notes, (iv) whether, to
the actual knowledge of the Person signing on behalf of the Administrative
Agent, there are any Defaults on the part of the Borrower under this Agreement or
under any of the other Loan Documents, and, if any are alleged to exist, a
detailed description thereof and (v) the extent to which the Loan Documents
have been Modified.

 

14.14       Preferences.
To the extent that the Borrower makes a payment or payments to the
Administrative Agent and/or any Lender, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received, the
obligations hereunder or part thereof intended to be satisfied shall be revived
and continue in full force and effect, as if such payment or proceeds had not been
received by the Administrative Agent or a Lender, as the case may be.

 

14.15       Certain
Waivers. The Borrower hereby irrevocably and unconditionally waives
(a) promptness and diligence, (b) notice of any actions taken by the
Administrative Agent 

 

132

 

or any Lender
hereunder or under any other Loan Document or any other agreement or instrument
relating thereto except to the extent (i) otherwise expressly provided herein
or therein or (ii) the Borrower is not, pursuant to Applicable Law, permitted
to waive the giving of such notice, (c) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of the Borrower’s obligations hereunder and under the other Loan
Documents, the omission of or delay in which, but for the provisions of this Section
14.15, might constitute grounds for relieving the Borrower of any of its
obligations hereunder or under the other Loan Documents, except to the extent
otherwise expressly provided herein or to the extent that the Borrower is not,
pursuant to Applicable Law, permitted to waive the giving of such notice,
(d) any requirement that the Administrative Agent or any Lender protect,
secure, perfect or insure any lien on any collateral for the Loans or exhaust
any right or take any action against the Borrower or any other Person or
against any collateral for the Loans, (e) any right or claim of right to
cause a marshalling of the Borrower’s assets and (f) until the Obligations
are paid in full and discharged, all rights of subrogation or contribution,
whether arising by contract or operation of law or otherwise by reason of
payment by the Borrower pursuant hereto or to the other Loan Documents.

 

14.16       Entire
Agreement. This Agreement, the Notes and the other Loan Documents
constitute the entire agreement between the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof and all
understandings, oral representations and agreements heretofore or
simultaneously had among the parties are merged in, and are contained in, such
documents and instruments.

 

14.17       Severability.
If any provision of this Agreement shall be held by any court of competent
jurisdiction to be unlawful, void or unenforceable for any reason as to any
Person or circumstance, such provision or provisions shall be deemed severable
from and shall in no way affect the enforceability and validity of the
remaining provisions of this Agreement.

 

14.18       Captions.
The table of contents and captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.

 

14.19       Counterparts.
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.

 

14.20       GOVERNING
LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS ARE TO BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA (AS PERMITTED BY SECTION 1646.5 OF THE CALIFORNIA CIVIL CODE OR ANY
SIMILAR SUCCESSOR PROVISION), WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW RULE
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA TO GOVERN THE RIGHTS AND DUTIES OF THE
PARTIES.

 

14.21       SUBMISSION
TO JURISDICTION. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS
HEREBY IRREVOCABLY (I) 

 

133

 

AGREE THAT ANY
SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, ANY SECURITY DOCUMENT, OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN A COURT OF RECORD IN THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
OR IN THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN SUCH STATE AND
COUNTY, (II) CONSENT TO THE JURISDICTION OF EACH SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING, (III) WAIVE ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM AND (IV) AGREE AND CONSENT THAT ALL SERVICE OF PROCESS UPON
THE BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH STATE OR
FEDERAL COURT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO THE BORROWER, AT THE ADDRESS FOR NOTICES PURSUANT TO SECTION 14.02
HEREOF, AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN SO MAILED. NOTHING IN THIS SECTION 14.21 SHALL AFFECT
THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE
AGENT OR ANY LENDER TO BRING ANY SUIT, ACTION OR PROCEEDING AGAINST THE
BORROWER OR THE PROPERTY OF THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTIONS.

 

14.22       WAIVER
OF JURY TRIAL; COUNTERCLAIM. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS. THE BORROWER FURTHER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY LEGAL PROCEEDING BROUGHT BY OR
ON BEHALF OF THE ADMINISTRATIVE AGENT OR THE LENDERS WITH RESPECT TO THIS
AGREEMENT, THE NOTES , THE OTHER LOAN DOCUMENTS OR OTHERWISE IN RESPECT OF THE
LOANS, ANY AND EVERY RIGHT THE BORROWER MAY HAVE TO (A) INTERPOSE ANY
COUNTERCLAIM THEREIN, OTHER THAN A MANDATORY OR COMPULSORY COUNTERCLAIM, AND
(B) HAVE THE SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR
PROCEEDING. NOTHING CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL
PREVENT OR PROHIBIT THE BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE
ACTION AGAINST THE ADMINISTRATIVE AGENT OR THE LENDERS WITH RESPECT TO ANY
ASSERTED CLAIM. THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE ANY
DEFENSE OR OBJECTION TO THE BORROWER INSTITUTING OR MAINTAINING SUCH A SEPARATE
ACTION AGAINST THE ADMINISTRATIVE AGENT OR THE LENDERS FOR ANY CLAIM WHICH THE
BORROWER IS PRECLUDED FROM INTERPOSING AS A COUNTERCLAIM IN OR CONSOLIDATING
WITH ANY PROCEEDING COMMENCED BY THE ADMINISTRATIVE AGENT OR THE LENDERS
DESCRIBED IN THIS SECTION 14.22, BUT THE DEFENSES AND OBJECTIONS SO
WAIVED ARE LIMITED SOLELY TO DEFENSES AND OBJECTIONS 

 

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BASED ON THE
ASSERTION OF SUCH CLAIM IN A SEPARATE ACTION AND DO NOT INCLUDE ANY OTHER
DEFENSES OR OBJECTIONS, WHETHER PROCEDURAL OR SUBSTANTIVE.

 

14.23       Limitation
of Liability.

 

(a)           Neither
the Borrower, nor any past, present or future member in or manager of Borrower,
nor any owner of any direct or indirect Equity Interests in the Borrower, shall
be personally liable for payments due hereunder or under any other Loan
Document or for the performance of any obligation of the Borrower hereunder or
thereunder, or breach of any representation or warranty made by the Borrower
hereunder or thereunder. Notwithstanding the foregoing provisions of this Section
14.23(a), the Borrower shall be personally (and on a full recourse basis)
liable for and shall protect, indemnify and defend the Administrative Agent and
the Lenders from and against, and shall hold the Administrative Agent and the
Lenders harmless of, from and against any deficiency, liability, loss, damage,
costs, and expenses (including legal fees and disbursements) suffered by the
Administrative Agent and/or the Lenders and caused by, or related to or as a
result of any of the following:  (i) the
commission of a criminal act by or on behalf of the Borrower, (ii) fraud,
intentional misrepresentation or intentionally inaccurate certification made at
any time in connection with the Loan Documents or the Loans by or on behalf of
the Borrower; (iii) misapplication or misappropriation of cash flow or other
revenue derived from or in respect of the Projects, including security
deposits, Insurance Proceeds, Condemnation Awards, or any rental, sales or
other income derived directly or indirectly from the Projects in violation of
the Loan Documents by or on behalf of the Borrower; and/or (iv) intentional
or bad faith commission of waste to or of the Projects or any portion thereof
by or on behalf of the Borrower. In addition, the Borrower (but not any past,
present or future member in or manager of Borrower, nor any owner of any direct
or indirect Equity Interests in the Borrower) shall be personally (and on a
full recourse basis) liable for and shall protect, indemnify and defend the
Administrative Agent and the Lenders from and against, and shall hold the
Administrative Agent and the Lenders harmless of, from and against any
deficiency, liability, loss, damage, costs, and expenses (including legal fees
and disbursements) suffered by the Administrative Agent and/or the Lenders and
caused by, or related to or as a result of any of the following:
(A) voluntary bankruptcy or collusion in an involuntary bankruptcy of the
Borrower by or on behalf of the Borrower, (B) any violation of Section
8.11(a) or resulting from a failure to perform under the Environmental
Indemnity, and/or (C) interference with foreclosure following an Event of
Default by or on behalf of the Borrower.

 

(b)           Nothing
contained in this Section shall impair the validity of the indebtedness,
obligations or Liens arising under the Loan Documents. Notwithstanding anything
to the contrary contained herein, the Administrative Agent may pursue any power
of sale, bring any foreclosure action, any action for specific performance, or
any other appropriate action or proceedings against Borrower or any other
Person for the purpose of enabling the Administrative Agent and the Lenders to
realize upon the collateral for the Loans (including, without limitation, any Rents
and Net Proceeds to the extent provided for in the Loan Documents) or to obtain
the appointment of a receiver.

 

135

 

(c)           Notwithstanding
anything to the contrary contained herein, the Guarantor shall have personal
liability on the terms contained in the Guarantor Documents (to the extent
provided therein).

 

14.24       Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information that
may be disclosed (a) to it and its Subsidiaries’ and Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority, (c) to the extent
required by Applicable Laws or by any subpoena or similar legal process,
(d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this Section
14.24, to (i) any assignee or pledgee of or Participant in, or any
prospective assignee or pledgee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the
Borrower and its obligations, (g) with the consent of the Borrower or
(h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 14.24 or of
arrangements entered into pursuant hereto or (ii) becomes available to the
Administrative Agent or any Lender on a non-confidential basis from a source
other than the Borrower; provided, however, the obligation to
maintain the confidentiality of the Information provided hereunder shall expire
twelve (12) months after the date upon which the Obligations hereunder are
indefeasibly paid in full. For the purposes of this Section 14.24, “Information”
means all written information received from or on behalf of the Borrower
relating to the Borrower, its Subsidiaries or Affiliates or their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis (and obtained
from a Person not known by the Administrative Agent or such Lender to have
disclosed such information in violation of a contractual confidentiality
obligation of such Person owed to the Borrower) prior to disclosure by the
Borrower. The Administrative Agent and each Lender, to the extent required to
maintain the confidentiality of Information as provided in this Section
14.24, shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as a commercial banker exercising
reasonable and customary business practices would accord to its own
confidential information. Notwithstanding anything herein to the contrary, the
information subject to this Section 14.24 shall not include, and the
Administrative Agent and each Lender may disclose without limitation of any
kind, any information with respect to the “tax treatment” and “tax structure”
(in each case, within the meaning of Treasury Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Administrative Agent
or such Lender relating to such tax treatment and tax structure; provided
that with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transactions
as well as other information, this sentence shall only apply to such portions
of the document or similar item that relate to the tax treatment or tax
structure of the Loans and transactions contemplated hereby.

 

136

 

14.25       Usury
Savings Clause. It is the intention of the Borrower, the Administrative
Agent and the Lenders to conform strictly to the usury and similar laws
relating to interest from time to time in force, and all Loan Documents between
the Borrower, the Administrative Agent and the Lenders, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever, whether by acceleration of maturity
hereof or otherwise, shall the amount paid or agreed to be paid in the
aggregate to the Lenders as interest (whether or not designated as interest,
and including any amount otherwise designated by or deemed to constitute
interest by a court of competent jurisdiction) hereunder or under the other
Loan Documents or in any other agreement given to secure the Loans, or in any
other document evidencing, securing or pertaining to the Loans, exceed the
maximum amount (the “Maximum Rate”) permissible under Applicable Laws. If
under any circumstances whatsoever fulfillment of any provision hereof, of this
Agreement or of the other Loan Documents, at the time performance of such
provisions shall be due, shall involve exceeding the Maximum Rate, then, ipso
facto, the obligation to be fulfilled shall be reduced to the Maximum Rate. For
purposes of calculating the actual amount of interest paid and/or payable
hereunder in respect of laws pertaining to usury or such other laws, all sums
paid or agreed to be paid to the Lenders for the use, forbearance or detention
of the Loans evidenced hereby, outstanding from time to time shall, to the
extent permitted by Applicable Law, be amortized, pro-rated, allocated and
spread from the date of disbursement of the proceeds of the Notes until payment
in full of all of such indebtedness, so that the actual rate of interest on
account of such Loans is uniform through the term hereof. If under any
circumstances any Lender shall ever receive an amount which would exceed the
Maximum Rate, such amount shall be deemed a payment in reduction of the
principal amount of the applicable Loans and shall be treated as a voluntary
prepayment under this Agreement (without prepayment penalty or premium) and
shall be so applied in accordance with the provisions of this Agreement, or if
such excessive interest exceeds the outstanding amount of the applicable Loans
and any other Obligations, the excess shall be deemed to have been a payment
made by mistake and shall be refunded to the Borrower.

 

14.26       Cooperation
with Syndication. The Borrower acknowledges that Arranger intends to
syndicate a portion of the Commitments to one or more Lenders (the “Syndication”)
and in connection therewith, the Borrower will take all actions as Arranger may
reasonably request to assist Arranger in its Syndication effort. Without
limiting the generality of the foregoing, the Borrower shall, at the request of
Arranger (i) facilitate the review of the Loan and the Projects by any
prospective Lender; (ii) assist Arranger and otherwise cooperate with Arranger
in the preparation of information offering materials (which assistance may
include reviewing and commenting on drafts of such information materials and
drafting portions thereof); (iii) deliver updated information on the Borrower
and the Projects; (iv) make representatives of the Borrower available to meet
with prospective Lenders at tours of the Projects and bank meetings; (v) facilitate
direct contact between the senior management and advisors of the Borrower and
any prospective Lender; and (vi) provide Arranger with all information
reasonably deemed necessary by it to complete the Syndication successfully. The
Borrower agrees to take such further action, in connection with documents and
amendments to the Loan Documents, as may reasonably be required to effect such
Syndication. The Borrower shall not be responsible for any costs or expenses
incurred by the Administrative Agent, the Arranger, any Lender or any other
Person in connection with such Syndication, other than Arranger’s attorneys’
fees incurred through the closing of the Loan.

 

137

 

14.27       Reserved.

 

14.28       Controlled Account. The Borrower
hereby agrees with the Administrative Agent, as to any Controlled Account into
which this Agreement requires the Borrower to deposit funds, as follows:

 

(a)           Establishment and Maintenance of
the Controlled Account.

 

(i)            Each Controlled Account (A) shall be
a separate and identifiable account from all other funds held by the Depository
Bank and (B) shall contain only funds required to be deposited pursuant to this
Agreement or any other Loan Document. Any interest which may accrue on the
amounts on deposit in a Controlled Account shall be added to and shall become
part of the balance of such Controlled Account. The Borrower, the
Administrative Agent and the applicable Depository Bank shall enter into an
agreement (the “Controlled Account Agreement”), substantially in the
form of Exhibit O attached hereto (with such changes thereto as may be
required by the Depository Bank and satisfactory to the Administrative Agent)
which shall govern the Controlled Account and the rights, duties and
obligations of each party to the Controlled Account Agreement.

 

(ii)           The Controlled Account Agreement
shall provide that (A) the Controlled Account shall be established in the name
of the Administrative Agent, as agent for the Lenders, (B) the Controlled
Account shall be subject to the sole dominion, control and discretion of the
Administrative Agent, and (C) neither the Borrower nor any other Person,
including, without limitation, any Person claiming on behalf of or through the Borrower,
shall have any right or authority, whether express or implied, to make use of
or withdraw, or cause the use or withdrawal of, any proceeds from the
Controlled Account or any of the other proceeds deposited in the Controlled
Account, except as expressly provided in this Agreement or in the Controlled
Account Agreement.

 

(b)           Deposits to and Disbursements from
the Controlled Account. All deposits to and disbursements of all or any
portion of the deposits to the Controlled Account shall be in accordance with
this Agreement and the Controlled Account Agreement. The Borrower shall pay any
and all fees charged by Depository Bank in connection with the maintenance of
the Controlled Account required to be established by or for it hereunder, and
the performance of the Depository Bank’s duties.

 

(c)           Security Interest.

 

(i)            The Borrower hereby grants a
perfected first priority security interest in favor of the Administrative Agent
for the ratable benefit of the Lenders in each Controlled Account established
by or for it hereunder and all financial assets and other property and sums at
any time held, deposited or invested therein, and all security entitlements and
investment property relating thereto, together with any interest or other
earnings thereon, and all proceeds thereof, whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities (collectively, “Controlled Account Collateral”), together
with all rights of a secured party with respect thereto (even 

 

138

 

if no further
documentation is requested by the Administrative Agent or the Lenders or
executed by the Borrower).

 

(ii)           The Borrower covenants and agrees:

 

(A)          to do all acts that may be reasonably
necessary to maintain, preserve and protect the Controlled Account Collateral;

 

(B)           to pay promptly when due all material
taxes, assessments, charges, encumbrances and liens now or hereafter imposed
upon or affecting any Controlled Account Collateral;

 

(C)           to appear in and defend any action or
proceeding which may materially and adversely affect the Borrower’s title to or
the Administrative Agent’s interest in the Controlled Account Collateral;

 

(D)          following the creation of each
Controlled Account established by or for the Borrower and the initial funding thereof,
other than to the Administrative Agent pursuant to this Agreement or a
Controlled Account Agreement, not to transfer, assign, sell, surrender,
encumber, mortgage, hypothecate, or otherwise dispose of any of the Controlled
Account Collateral or rights or interests therein, and to keep the Controlled
Account Collateral free of all levies and security interests or other liens or
charges except the security interest in favor of the Administrative Agent
granted hereunder;

 

(E)           to account fully for and promptly
deliver to the Administrative Agent, in the form received, all documents,
chattel paper, instruments and agreements constituting the Controlled Account
Collateral hereunder, endorsed to the Administrative Agent or in blank, as
requested by the Administrative Agent, and accompanied by such powers as
appropriate and until so delivered all such documents, instruments, agreements
and proceeds shall be held by the Borrower in trust for the Administrative
Agent, separate from all other property of the Borrower; and

 

(F)           from time to time upon request by the
Administrative Agent, to furnish such further assurances of the Borrower’s
title with respect to the Controlled Account Collateral, execute such written
agreements, or do such other acts, all as may be reasonably necessary to
effectuate the purposes of this agreement or as may be required by law, or in
order to perfect or continue the first-priority lien and security interest of
the Administrative Agent in the Controlled Account Collateral.

 

(iii)          All interest earned on the Controlled
Account shall be retained in such Controlled Account subject to the Borrower’s
withdrawal rights set forth herein. The Borrower shall treat all interest
earned on the Controlled Account as its income for federal income tax purposes.

 

(iv)          Upon the occurrence and during the
continuation of an Event of Default, the Administrative Agent may (and, upon
the instruction of the Required Lenders, shall):

 

139

 

(A)          without any advertisement or notice to
or authorization from the Borrower (all of which advertisements, notices and/or
authorizations are hereby expressly waived), withdraw, sell or otherwise
liquidate the funds deposited into any Controlled Account, and apply the
proceeds thereof to the unpaid Obligations in such order as the Administrative
Agent may elect in its sole discretion, without liability for any loss, and the
Borrower hereby consents to any such withdrawal and application as a
commercially reasonable disposition of such funds and agrees that such
withdrawal shall not result in satisfaction of the Obligations except to the
extent the proceeds are applied to such sums;

 

(B)           without any advertisement or notice
to or authorization from the Borrower (all of which advertisements, notices
and/or authorizations are hereby expressly waived), notify any account debtor
on any Controlled Account Collateral pledged by the Borrower pursuant hereto to
make payment directly to the Administrative Agent;

 

(C)           foreclose upon all or any portion of
the Controlled Account Collateral pledged by the Borrower or otherwise enforce
the Administrative Agent’s security interest in any manner permitted by law or
provided for in this Agreement;

 

(D)          sell or otherwise dispose of all or
any portion of the Controlled Account Collateral pledged by the Borrower at one
or more public or private sales, whether or not such Controlled Account
Collateral is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as the Administrative Agent may
determine;

 

(E)           recover from the Borrower all costs
and expenses, including, without limitation, reasonable attorneys’ fees,
incurred or paid by the Administrative Agent in exercising any right, power or
remedy provided by this subsection (iv); and

 

(F)           exercise any other right or remedy
available to the Administrative Agent or the Lenders under Applicable Law or in
equity.

 

(v)           Reserved.

 

14.29       Financing Statements. The
Borrower authorizes the Administrative Agent to file such financing statements
(and any continuation statements with respect thereto) as the Administrative
Agent may deem necessary in order to perfect or maintain the perfection of any
security interest granted or to be granted to the Administrative Agent pursuant
to any of the Loan Documents, in such jurisdictions as the Administrative Agent
may elect.

 

14.30       Severance of Loan. Eurohypo shall have the right, at any time,
but at no additional cost to the Borrower, to direct the Administrative Agent,
with respect to all or any portion of the Loan, to (a) cause the Notes, the
Deeds of Trust and the other Security Documents to be severed and/or split into
two or more separate notes, deeds of trust and other security agreements, so as
to evidence and secure one or more senior and subordinate mortgage loans, (b)
create one more senior and subordinate notes (i.e., an A/B or A/B/C structure)
secured by the

 

140

 

Deeds of Trust and the other Security Documents, (c) create multiple
components of the Notes (and allocate or reallocate the Outstanding Principal
Amount of the Loan among such components or among the components of the Notes
delivered upon the Closing Date) or (d) otherwise sever the Loan into two or
more loans secured by the Deeds of Trust and the other Security Documents; in
each such case, in whatever proportions and priorities as Eurohypo may so
direct in its discretion to the Administrative Agent; provided, however,
that in each such instance (i) the Outstanding Principal Amount of all the
Notes evidencing the Loan (or (in any case involving the  splitting, modification, componentization or
other severance of any previously-split, componentized or severed Note)
components of such Notes) immediately after the effective date of such
splitting, modification, componentization or other severance, equals the
Outstanding Principal Amount of the Loan (or (in any case involving the splitting, modification, componentization or
other severance of any previously-split, componentized or severed Note) the
applicable component thereof) immediately prior to such splitting,
modification, componentization or other severance, (ii) the weighted average of
the interest rates for all such Notes (or, if applicable, components of such
Notes) immediately after the effective date of such splitting, modification,
componentization or other severance equals the interest rate of the original
Note (or the applicable component thereof) immediately prior to such splitting,
modification, componentization or other severance thereof, (iii) there
shall be no modification of the Maturity Date, the Types of Loans available to
be selected by the Borrower (provided that the Applicable Margins on the
relevant Types may be modified, and may differ for each of such split,
modified, componentized or otherwise severed Notes or components, so long as
the restrictions set forth in clause (ii) above are not violated), the due
dates for mandatory principal payments, prepayment terms, Events of Default
(other than cross defaulting of any severed Notes or Security Documents) or any
other modifications which would result, in the aggregate, in an increase in the
economic obligations of the Borrower with respect to all Loans outstanding
hereunder following such splitting, modification,
componentization or other severance as compared to the obligations of the
Borrower immediately prior thereto (other than changes in the interest
rate or Applicable Margins which do not violate the restrictions in clause (ii)
above), including, without limitation, any recourse provisions, and (iv) except
for modifications which do not violate the restrictions set forth in clauses
(ii) and (iii) above, such modification shall not result, in the aggregate, in
an increase in any liability or obligation, or any change in any substantive
rights, of the Borrower, any Borrower Party or any Named Principal under the
Loan Documents following such splitting,
modification, componentization or other severance as compared to the respective
liabilities, obligations or rights of such parties immediately prior thereto. If
requested by the Administrative Agent in writing, subject to the provisions of Section
2.04(b), the Borrower shall execute within ten (10) Business Days after
such request, a severance agreement, amendments to or amendments and
restatements of any one or more Loan Documents, and such documentation as the
Administrative Agent may reasonably request to evidence and/or effectuate any
such splitting, modification, componentization or other severance, all in form
and substance reasonably satisfactory to Eurohypo, the Administrative Agent and
the Borrower.

 

141

 

14.31       Additional Permitted Public REIT
Provisions. In connection with the Permitted Reorganization and following a
Permitted Public REIT Transfer, the following provisions shall apply:

 

(a)           The Borrower shall have the right from
time to time upon notice to, but without the consent of, the Administrative
Agent to change the Borrower’s Manager to the Permitted Public REIT or any
other Permitted Public REIT Subsidiary determined by the Permitted Public REIT.
Upon the occurrence of such change, the Borrower shall notify the
Administrative Agent of the name and principal place of business or chief executive
office of the new Borrower’s Manager within ten (10) Business Days after any
change in the same.

 

(b)           Notwithstanding the provisions of Section
1.02(b), the Borrower shall have the right from time to time upon notice
to, but without the consent of, the Administrative Agent, to change its fiscal
year, including the last days of its fiscal year and fiscal quarters, to
correspond with those of the Permitted Public REIT. The Borrower shall provide
written notice thereof to the Administrative Agent within ten (10) Business
Days after the occurrence of such change.

 

(c)           Nothing in Sections 8.03, 9.01
and 9.07 as to parties other than the Borrower shall prohibit or
restrict the actions taken pursuant to the Permitted Reorganization, or any
other actions expressly permitted by this Section 14.31 (or any
agreement to take any such actions). As used herein, the term “Permitted
Reorganization” shall mean a simultaneous transaction consisting of
one or more of the following elements, provided that, upon the consummation of
such transaction, the Borrower shall be in compliance with all covenants set
forth in this Agreement (after giving effect to the express terms thereof which
by their terms may be applicable or inapplicable upon the occurrence of the
Permitted Public REIT Transfer or Transfer of the Projects to a Qualified
Successor Entity), no Event of Default shall result therefrom, and the Permitted Public REIT shall directly or
indirectly own fifty-one percent (51%) or more of the ownership interests in
the Borrower and shall directly or indirectly control the Borrower:

 

(i)            The
formation of a limited liability company that is a wholly owned Subsidiary of
the Operating Partnership of the Permitted Public REIT (the “OP Merger Sub”)
and the merger of the Borrower’s Member into the OP Merger Sub with either the
Borrower’s Member or the OP Merger Sub as the surviving entity;

 

(ii)           The
contribution to the Operating Partnership of the Permitted Public REIT of all
of the Equity Interests in the Borrower’s Member that are not redeemed;

 

(iii)          At
the option of the Permitted Public REIT, the contribution to the
Operating Partnership of the Permitted Public REIT or another Permitted Public REIT
Subsidiary as part of a Permitted Public REIT Transfer of all of the Equity
Interests in the Borrower, the withdrawal of the Borrower’s Member as the sole
member of the Borrower and the dissolution of the Borrower’s Member or the OP
Merger Sub;

 

(iv)          The
formation of a limited liability company that is a wholly owned Subsidiary of
the Permitted Public REIT (“REIT Merger Sub 1”) and the merger of the 

 

142

 

Borrower’s Manager into REIT Merger Sub 1 with either
the Borrower’s Manager or REIT Merger Sub 1 as the surviving entity;

 

(v)           The formation of a limited liability
company that is a wholly owned Subsidiary of the Permitted Public REIT (“REIT
Merger Sub 2”) and the merger of the Property Manager into REIT Merger Sub
2 with either the Property Manager or REIT Merger Sub 2 as the surviving
entity;

 

(vi)          The contribution to the Operating
Partnership of the Permitted Public REIT of all or substantially all of the
assets of the Borrower’s Manager and all or substantially all of the assets of
the Property Manager and, at the option of the Permitted Public REIT, the
subsequent dissolution of the Borrower’s Manager and/or the Property Manager;

 

(vii)         The withdrawal of the Borrower’s
Manager as the manager of the Borrower and any applicable Subsidiaries of the
Borrower or the Borrower’s Member and the appointment of the Permitted Public
REIT or any wholly-owned Permitted Public REIT Subsidiary determined by the
Permitted Public REIT as the new manager of such Person;

 

(viii)        The termination of the Property
Management Agreement for each Project and the appointment, pursuant to Section
14.31(d), of a new Property Manager for the Projects consisting of the
Permitted Public REIT or any wholly-owned Permitted Public REIT Subsidiary
determined by the Permitted Public REIT; and

 

(ix)           Modifications
to the Organizational Documents of the Borrower Parties that do not violate Section 9.01(b);
and

 

(x)            The
formation, dissolution or termination of such other entities, the contribution
or transfer of such other assets, the execution of such contracts and
agreements, and such other deliveries and actions as the Borrower Parties shall
determine to be necessary or appropriate to accomplish the foregoing so long
as, upon the consummation of such transaction, the Borrower shall be in
compliance with all covenants set forth in this Agreement (after giving effect
to the express terms thereof which by their terms may be applicable or
inapplicable upon the occurrence of the Permitted Public REIT Transfer or Transfer
of the Projects to a Qualified Successor Entity), no Event of Default shall
result therefrom, and the Permitted
Public REIT shall directly or indirectly own fifty-one percent (51%) or more of
the ownership interests in the Borrower and shall directly or indirectly
control the Borrower.

 

(d)           In connection with the Permitted
Reorganization or at any time thereafter, the Borrower shall have the right to
terminate (or assign to the new property manager) the existing Property
Management Agreement for each Project and to replace, pursuant to this Section
14.31(d), the Property Manager by
the Permitted Public REIT or by a management company controlled directly or
indirectly by the Permitted Public REIT (including, without limitation, the
Operating Partnership of the Permitted Public REIT or any other wholly-owned Permitted
Public REIT Subsidiary). If any Project is managed by the Permitted Public REIT
or a Permitted Public REIT Subsidiary, then the Borrower may dispense with the
requirement of entering into a property management agreement or may enter into
a new property management agreement for one or more of the Projects on such
terms as it deems satisfactory (which may 

 

143

 

include, without
limitation, a separate cost sharing agreement delegating responsibilities for
property management to the Permitted Public REIT or a Permitted Public REIT
Subsidiary); provided that, if a property management agreement is
entered into, such agreement shall in all events be subordinate to the Deeds of
Trust and the other Loan Documents, and, within thirty (30) days after entering
into a new property management agreement, the Borrower and the new property
manager will execute and deliver to the Administrative Agent a Property
Manager’s Consent, with such changes thereto as may be reasonably necessary for
the Permitted Public REIT or its Affiliates to comply with tax or other
Applicable Laws pertaining to their status.

 

(e)           The Borrower’s Manager’s Limited
Indemnity and Guaranty shall be replaced by replacement guaranties delivered by
an entity reasonably
satisfactory to the Administrative Agent with a net worth at least equivalent
to that of Borrower’s Manager as of the date of this Agreement and which
controls the Borrower, which may, at Borrower’s option, be the Permitted Public
REIT’s Operating Partnership or another guarantor reasonably
satisfactory to the Administrative Agent. Without limiting the discretion of
the Administrative Agent in connection with the review of any such replacement
guarantor, it is understood and agreed that (i) such replacement guarantor
shall deliver to the Administrative Agent such certified organizational
documents and papers, authorizations, consents, resolutions, incumbency
certificates and legal opinions as the Administrative Agent may reasonably
require in its discretion in order to confirm the due formation, valid
existence and good standing of such replacement guarantor, due execution,
authorization, validity and enforceability of such replacement guaranties, the
enforceability with respect to such replacement guarantor of the obligations incurred
thereby and the adequacy of the consideration received by such replacement
guarantor for the incurrence of such obligations and such other matters
relating to such replacement guarantor as the Administrative Agent may
reasonably request; (ii) the Administrative Agent shall have received such
financial statements and obtained such background checks, searches of
governmental records and similar diligence items with respect to such
replacement guarantor as shall be in form and substance reasonably satisfactory
to the Administrative Agent; and (iii) the Borrower or replacement guarantor
shall pay upon demand all costs and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) incurred by the Administrative Agent
in connection with the review, preparation, negotiation or execution of any of
the foregoing items. Upon the Administrative Agent’s approval of such
replacement guarantor and satisfaction of the conditions set forth above, such
replacement guarantor shall be deemed a “Guarantor” hereunder in substitution
for the named Guarantor and the replacement guaranties delivered by such
replacement guarantor shall be deemed the “Guarantor Documents” hereunder.

 

(f)            The Borrower shall ̧ within ten (10) Business Days, following the
consummation of the Permitted Reorganization, deliver written notice thereof to
the Administrative Agent which shall identify in reasonable detail any changes
in the identity of the Borrower Parties or the Property Manager, any changes in
the Property Management Agreement, any changes in the Organizational Documents
of the Borrower Parties, or any change in the fiscal year of the Borrower which
were consummated in connection therewith.

 

[Signature Pages Follow]

 

144

 

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

 

	
   

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  DOUGLAS EMMETT
  1998, LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DOUGLAS EMMETT
  REALTY ADVISORS,

  
	
   

  	
   

  	
  a California
  corporation, its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  William Kamer

  	
   

  
	
   

  	
   

  	
   

  	
  William Kamer

  
	
   

  	
   

  	
   

  	
  Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Douglas Emmett
  1998, LLC

  
	
   

  	
  c/o Douglas
  Emmett Realty Advisors

  
	
   

  	
  808 Wilshire
  Boulevard, Suite 200

  
	
   

  	
  Santa Monica,
  California 90401

  
	
   

  	
  Attention:  Jordan L. Kaplan

  
	
   

  	
  Telecopier
  No.:  (310) 255-7702

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Douglas Emmett
  1998, LLC

  
	
   

  	
  c/o Douglas
  Emmett Realty Advisors

  
	
   

  	
  808 Wilshire
  Boulevard, Suite 200

  
	
   

  	
  Santa Monica,
  California 90401

  
	
   

  	
  Attention:
  William Kamer, Esq.

  
	
   

  	
  Telecopier No.:
  (310) 255-7702

  

 

 

	
   

  	
  LENDERS

  
	
   

  	
   

  
	
   

  	
  EUROHYPO AG, NEW
  YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Sarner

  	
   

  
	
   

  	
   

  	
  Name:  David Sarner

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Cox

  	
   

  
	
   

  	
   

  	
  Name:  Stephen Cox

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices to Eurohypo AG,

  
	
   

  	
  New York Branch:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: Legal
  Director

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: Head
  of Portfolio Operations

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
   

  	
  - and -

  
	
   

  	
   

  
	
   

  	
  Morrison &
  Foerster LLP

  
	
   

  	
  555 West Fifth
  Street, Suite 3500

  
	
   

  	
  Los Angeles,
  California 90013

  
	
   

  	
  Attention:
  Thomas R. Fileti, Esq.

  
	
   

  	
  Telecopier No.:
  (213) 892-5454

  
					

 

 

	
   

  	
  BARCLAYS CAPITAL
  REAL ESTATE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LoriAnn Rung

  	
   

  
	
   

  	
   

  	
  Name: LoriAnn
  Rung

  
	
   

  	
   

  	
  Title:  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Barclays Capital Real Estate Inc.

  
	
   

  	
  200 Park Avenue

  
	
   

  	
  New York, NY 10166

  
	
   

  	
  Attention: 
  Larry Miller, Director

  
	
   

  	
  Telecopier No.: (212) 412-1613

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Barclays Capital Real Estate Inc.

  
	
   

  	
  200 Park Avenue

  
	
   

  	
  New York, NY 10166

  
	
   

  	
  Attention: 
  Lori Rung

  
	
   

  	
  Telecopier No.: (212) 412-1664

  

 

 

	
   

  	
  ADMINISTRATIVE
  AGENT

  
	
   

  	
   

  
	
   

  	
  EUROHYPO AG, NEW
  YORK BRANCH,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alfred Koch

  	
   

  
	
   

  	
   

  	
  Name: Alfred
  Koch

  
	
   

  	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Cox

  	
   

  
	
   

  	
   

  	
  Name:  Stephen Cox

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices to

  
	
   

  	
  Eurohypo as
  Administrative Agent:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: Legal
  Director

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
  With copies to:

  
	
   

  	
   

  
	
   

  	
  Eurohypo AG, New
  York Branch

  
	
   

  	
  1114 Avenue of
  the Americas, 29th Floor

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: Head
  of Portfolio Operations

  
	
   

  	
  Telecopier No.:
  (866) 267-7680

  
	
   

  	
   

  
	
   

  	
   

  	
  - and -

  
	
   

  	
   

  
	
   

  	
  Morrison &
  Foerster LLP

  
	
   

  	
  555 West Fifth
  Street, Suite 3500

  
	
   

  	
  Los Angeles,
  California 90013

  
	
   

  	
  Attention:
  Thomas R. Fileti, Esq.

  
	
   

  	
  Telecopier No.:
  (213) 892-5454

  
					

 

 

SCHEDULE 1A

 

LIST OF PROJECTS

 

1.             100 Wilshire, 100 Wilshire Blvd., Santa Monica,
California

 

2.             Encino Gateway, 15760 Ventura Blvd., Encino, California

 

3.             Encino Plaza, 15910 Ventura Blvd., Encino, California

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