Quarterly Report (10-q)

CIO City Office REIT Inc

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file no: 001-36409

CITY OFFICE REIT, INC.

Maryland

98-1141883

(State or other jurisdiction

of incorporation)

(IRS Employer

Identification No.)

1075 West Georgia Street

Suite 2600

Vancouver, BC

V6E 3C9

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (604) 806-3366

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ x No

The number of shares of Common Stock, $0.01 par value, of the registrant outstanding at November 4, 2015 was 12,517,777.

City Office REIT, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2015

Table of Contents


PART I. FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	3

		Condensed Consolidated and Combined Statements of Operations for the Three and Nine months Ended September 30, 2015 and 2014	4

		Condensed Consolidated Statement of Changes in Equity as of September 30, 2015	5

		Condensed Consolidated and Combined Statements of Cash Flows for the Nine months Ended September 30, 2015 and 2014	6

		Notes to Condensed Consolidated and Combined Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

	Item 4.	Controls and Procedures	33

PART II. OTHER INFORMATION			35

	Item 1.	Legal Proceedings	35

	Item 1A.	Risk Factors	35

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

	Item 3.	Defaults Upon Senior Securities	36

	Item 4.	Mine Safety Disclosures	36

	Item 5.	Other Information	36

	Item 6.	Exhibits	36

	Signatures		38

City Office REIT, Inc. and Predecessor

Condensed Consolidated Balance Sheets (Note 1)

(Unaudited)

(In thousands, except par value and share data)


	September 30, 2015			December 31, 2014
Assets
Real estate properties, cost
Land	$	90,205		$	66,204
Buildings and improvements		254,934			132,964
Tenant improvement		34,509			27,773
Furniture, fixtures and equipment		198			198

		379,846			227,139
Accumulated depreciation		(23,304	)		(15,311	)

		356,542			211,828

Cash and cash equivalents		10,516			34,862
Restricted cash		17,420			11,093
Rents receivable, net		12,676			7,981
Deferred financing costs, net of accumulated amortization		3,585			2,901
Deferred leasing costs, net of accumulated amortization		4,936			2,618
Acquired lease intangibles assets, net		44,245			29,391
Prepaid expenses and other assets		1,396			832

Total Assets	$	451,316		$	301,506

Liabilities and Equity
Liabilities:
Debt	$	344,946		$	189,940
Accounts payable and accrued liabilities		10,615			4,080
Deferred rent		3,147			2,212
Tenant rent deposits		2,184			1,862
Acquired lease intangibles liability, net		2,534			606
Dividend distributions payable		3,663			3,571
Earn-out liability		5,437			8,000

Total Liabilities		372,526			210,271

Commitments and Contingencies (Note 9)
Equity:
Common stock, $0.01 par value, 100,000,000 shares authorized, 12,517,777 shares issued and outstanding		125			123
Additional paid-in capital		94,814			91,308
Accumulated deficit		(25,104	)		(11,320	)

Total Stockholders’ Equity		69,835			80,111
Operating Partnership unitholders’ non-controlling interests		9,648			11,878
Non-controlling interests in properties		(693	)		(754	)

Total Equity		78,790			91,235

Total Liabilities and Equity	$	451,316		$	301,506

Subsequent Events (Note 11)

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

City Office REIT, Inc. and Predecessor

Condensed Consolidated and Combined Statements of Operations (Note 1)

(Unaudited)

(In thousands, except per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues:
Rental income	$	12,601		$	9,037		$	32,838		$	23,988
Expense reimbursement		1,701			844			3,737			1,796
Other		313			118			934			590

Total Revenues		14,615			9,999			37,509			26,374

Operating Expenses:
Property operating expenses		5,521			3,929			13,764			10,190
Acquisition costs		1,802			401			2,893			1,551
Stock based compensation		487			382			1,403			667
General and administrative		411			407			1,313			821
Base management fee		322			226			981			411
External advisor acquisition		174			—			174			—
Depreciation and amortization		5,888			4,058			14,788			10,634

Total Operating Expenses		14,605			9,403			35,316			24,274

Operating income		10			596			2,193			2,100
Interest Expense:
Contractual interest expense		(2,798	)		(1,867	)		(6,910	)		(5,821	)
Amortization of deferred financing costs		(196	)		(160	)		(550	)		(1,289	)
Loss on early extinguishment of Predecessor debt		—			—			—			(1,655	)

		(2,994	)		(2,027	)		(7,460	)		(8,765	)
Change in fair value of earn-out		—			(943	)		(600	)		(1,048	)
Gain on equity investment		—			—			—			4,475

Net loss		(2,984	)		(2,374	)		(5,867	)		(3,238	)
Less:
Net (income)/loss attributable to noncontrolling interests in properties		(116	)		(87	)		(371	)		(8	)
Net loss/(income) attributable to Predecessor		—			—			—			(1,973	)
Net loss attributable to Operating Partnership unitholders’ noncontrolling interests		601			694			1,199			1,508

Net loss attributable to stockholders	$	(2,499	)	$	(1,767	)	$	(5,039	)	$	(3,711	)

Net loss per share:
Basic and diluted	$	(0.20	)	$	(0.22	)	$	(0.41	)	$	(0.46	)

Weighted average common shares outstanding:
Basic and diluted	$	12,473		$	8,193		$	12,373		$	8,134

Dividends/distributions declared per common share and unit	$	0.235		$	0.235		$	0.705		$	0.418

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

City Office REIT, Inc. and Predecessor

Condensed Consolidated Statement of Changes in Equity (Note 1)

(Unaudited)

(In thousands)


	Number of shares of common stock		Common stock		Additional paid-in capital		Accumulated deficit			Total stockholders’ equity			Operating Partnership unitholders’ non-controlling interests			Non-controlling interests in properties			Total equity
Balance—December 31, 2014		12,279	$	123	$	91,308	$	(11,320	)	$	80,111		$	11,878		$	(754	)	$	91,235
Conversion of common units to shares		12		—		47		—			47			(47	)		—			—
Restricted stock award grants		137		1		1,402		—			1,403			—			—			1,403
Earn out payment in shares		90		1		2,057		—			2,058			1,105			—			3,163
Dividend distributions declared		—		—		—		(8,745	)		(8,745	)		(2,089	)		—			(10,834	)
Contributions		—		—		—		—			—			—			—			—
Distributions		—		—		—		—			—			—			(310	)		(310	)
Net loss		—		—		—		(5,039	)		(5,039	)		(1,199	)		371			(5,867	)

Balance—September 30, 2015		12,518	$	125	$	94,814	$	(25,104	)	$	69,835		$	9,648		$	(693	)	$	78,790

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

City Office REIT, Inc. and Predecessor

Condensed Consolidated and Combined Statements of Cash Flows (Note 1)

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2015			2014
Cash Flows from Operating Activities:
Net loss	$	(5,867	)	$	(3,238	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		14,788			10,634
Amortization of deferred financing costs		550			1,289
Amortization of above/below market leases		361			368
Increase in straight-line rent		(805	)		(1,146	)
Non-cash stock compensation		1,403			667
Change in fair value of earn-out		600			1,048
Loss on early extinguishment of debt		—			885
Gain on equity investment		—			(4,475	)
Changes in non-cash working capital:
Rents receivable, net		(3,890	)		(1,546	)
Prepaid expenses and other assets		(540	)		(218	)
Accounts payable and accrued liabilities		4,950			72
Deferred rent		934			1,160
Tenant rent deposits		(13	)		481

Net Cash Provided By Operating Activities		12,471			5,981

Cash Flows to Investing Activities:
Additions to real estate properties		(3,522	)		(2,542	)
Acquisition of real estate, net of cash assumed		(166,724	)		(62,544	)
Deferred leasing cost		(2,871	)		(571	)

Net Cash Used In Investing Activities		(173,117	)		(65,657	)

Cash Flows from Financing Activities:
Net proceeds from issuance of common shares		—			72,471
Formation transactions		—			(35,244	)
Debt issuance and extinguishment costs		(1,234	)		(3,926	)
Proceeds from mortgage loans payable		105,812			195,260
Proceeds from revolving credit facility		50,000			—
Repayment of mortgage loans payable		(807	)		(161,572	)
Contributions from partners and members		—			3,843
Contributions from non-controlling interests in properties		—			62
Distributions to partners and members		—			(1,347	)
Distributions to non-controlling interests in properties		(310	)		(233	)
Dividend distributions paid to stockholders and Operating Partnership unitholders		(10,834	)		(2,094	)
Change in restricted cash		(6,327	)		(5,817	)

Net Cash Provided By Financing Activities		136,300			61,403

Net (Decrease)/Increase in Cash and Cash Equivalents		(24,346	)		1,727
Cash and Cash Equivalents, Beginning of Period		34,862			7,128

Cash and Cash Equivalents, End of Period	$	10,516		$	8,855

Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	6,472		$	6,556

Accrued dividend distributions payable	$	3,601		$	2,690

Earn-out payment in shares	$	3,163		$	—

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

City Office REIT, Inc. and Predecessor

Notes to the Condensed Consolidated and Combined Financial Statements

1. Organization and Description of Business

City Office REIT, Inc. (the “Company”) was organized in the state of Maryland on November 26, 2013. On April 21, 2014, the Company completed its initial public offering (“IPO”) of shares of the Company’s common stock. The Company contributed the net proceeds of the IPO to City Office REIT Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”), in exchange for common units in the Operating Partnership (“common units”). Both the Company and the Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions (the “Formation Transactions”).

The Company’s interest in the Operating Partnership entitles the Company to share in distributions from, and allocations of profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership of common units. As the sole general partner of the Operating Partnership, the Company has the exclusive power under the partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners.

City Office REIT, Inc. Predecessor (the “Predecessor”) represents the combination of the six properties outlined below (the “Properties”). The Predecessor does not represent a legal entity. The Predecessor and its related assets and liabilities are under common control and were contributed to a newly formed Operating Partnership in connection with the IPO of the Company on April 21, 2014.

Unless the context suggests otherwise, references in this Quarterly Report on Form10-Q to “the Advisor” refers to the Company’s external advisor, City Office Real Estate Management Inc. “Second City” refers to Second City Capital Partners II, Limited Partnership. “Second City GP” refers to Second City General Partner II, Limited Partnership. “Gibralt” refers to Gibralt US, Inc. “GCC Amberglen” refers to GCC Amberglen Investments Limited Partnership. “CIO OP” refers to CIO OP Limited Partnership. “CIO REIT” refers to CIO REIT Stock Limited Partnership and CIO REIT Stock GP Limited Partnership. The “Second City Group” refers to Second City, any future real estate funds created by the principals of Second City, Second City GP, Gibralt, GCC Amberglen, CIO OP, CIO REIT and Daniel Rapaport.

The historical financial results in these financial statements and the accompanying notes thereto for periods prior to April 21, 2014 relate to the Predecessor. The Predecessor is comprised of the following properties:

•

City Center: Property in St. Petersburg, Florida, acquired in December 2010.

•

Central Fairwinds: Property in Orlando, Florida, acquired in May 2012.

•

AmberGlen: Property in Portland, Oregon, acquired in December 2009.

•

Washington Group Plaza: Property in downtown Boise, Idaho, acquired in June 2013.

•

Corporate Parkway: Property in Allentown, Pennsylvania, acquired in May 2013.

•

Cherry Creek: Property in Denver, Colorado, acquired in January 2014.

The Company has elected to be taxed and will continue to operate in a manner that will allow it to qualify as a real estate investment trust (“REIT”). Subject to qualification as a REIT, the Company will be permitted to deduct dividend distributions paid to its stockholders, eliminating the U.S. federal taxation of income represented by such distributions at the Company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and any applicable alternative minimum tax.

Initial Public Offering and Formation Transactions

The Company’s operations are carried on primarily through the Operating Partnership and wholly owned subsidiaries of the Operating Partnership. Both the Company and the Operating Partnership commenced operations upon completion of the IPO and certain related Formation Transactions.

On April 21, 2014, the Company closed the IPO, pursuant to which it sold 5,800,000 shares of common stock to the public at a public offering price of $12.50 per share. The Company raised $72.5 million in gross proceeds, resulting in net proceeds of approximately $63.4 million after deducting approximately $5.1 million in underwriting discounts and approximately $4.0 million in other expenses relating to the IPO. On May 9, 2014, the underwriters of the IPO exercised their overallotment option to purchase an additional 782,150 shares of the Company’s common stock at the IPO price of $12.50 a share resulting in additional gross proceeds of approximately $9.8 million. The net proceeds to the Company were $9.1 million after deducting approximately $0.7 million in underwriting discounts. The Company’s common stock began trading on the New York Stock Exchange under the symbol “CIO” on April 15, 2014.

The Company contributed the net proceeds of the IPO to the Operating Partnership in exchange for common units in the Operating Partnership. The Operating Partnership utilized a portion of the net proceeds of the IPO to pay fees in connection with the assumption of the indebtedness, pay expenses incurred in connection with the IPO and Formation Transactions and repay loans that were made to several of the contributing entities by certain investors in such entities. The remaining funds were used for general working capital purposes and to fund acquisitions.

Pursuant to the Formation Transactions, the Operating Partnership acquired a 100% interest in each of the Washington Group Plaza, Cherry Creek and Corporate Parkway properties and acquired an approximate 76% economic interest in the AmberGlen property, 90% interest in the Central Fairwinds property and 95% interest in the City Center property. These initial property interests were contributed in exchange for 3,731,209 common units, 1,858,860 shares of common stock and $19.4 million of cash. On May 9, 2014, the Company used the $9.1 million of net proceeds from the exercise of the underwriters’ overallotment option to redeem, 479,305 common units and 248,095 common stock from the Second City Group.

In connection with the IPO and Formation Transactions, the Company, through its Operating Partnership, extinguished the loan on the Central Fairwinds property and completed a refinancing of three properties (Cherry Creek, City Center and Corporate Parkway) with a new $95 million non-recourse mortgage loan and proceeds from the IPO. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021.

On December 10, 2014, the Company completed a follow-on public offering pursuant to which the Company sold 3,750,000 shares of common stock at a public offering price of $12.50 per share. The Company raised $46.9 million in gross proceeds, resulting in net proceeds to the Company of approximately $43.7 million after deducting approximately $2.6 million in underwriting discounts and approximately $0.6 million in other expenses relating to the offering. On December 23, 2014, the underwriters of the offering exercised their overallotment option to purchase an additional 512,664 shares of common stock at the public offering price of $12.50 a share for additional gross proceeds to the Company of approximately $6.4 million resulting in net proceeds to the Company of $6.1 million after deducting approximately $0.3 million in underwriting discounts. All net proceeds from the underwriters’ exercise of the overallotment option were used to redeem 336,195 common units and 176,469 common stock held by the Second City Group.

Balances for the nine months ended September 30, 2014 include those of the Predecessor for the period from January 1, 2014 through April 20, 2014, respectively.

2. Summary of Significant Accounting Policies

Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated and combined financial statements have been prepared by the Company in accordance with Securities and Exchange Commission rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position,

results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The Predecessor represents a combination of certain entities holding interests in real estate that were commonly controlled prior to the Formation Transactions. Due to their common control, the financial statements of the separate entities which own the properties are presented on a combined basis in the Predecessor financial statements.

New Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a new Topic Accounting Standards Codification (Topic 606). The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. This standard is effective for interim or annual periods beginning after December 15, 2017, and allows for either full retrospective or modified retrospective adoption. We are not permitted to adopt the standard earlier than January 1, 2017. We are currently evaluating the impact the adoption of Topic 606 will have on our financial statements.

In January 2015, the FASB issued ASU No. 2015-01, “Income Statement—Extraordinary and Unusual Items.” ASU 2015-01 eliminates the concept of extraordinary items. However, the presentation and disclosure requirements for items that are either unusual or in nature or infrequent in occurrence remain and will be expanded to include items that are both unusual in nature and infrequent in occurrence. ASU 2015-01 is effective for periods beginning after December 15, 2015. We are currently evaluating the impact of adopting this new accounting standard on our financial statements.

In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810)—Amendments to the Consolidation Analysis, which amends the criteria for determining which entities are considered variable interest entities (“VIE”), amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU 2015-02 is effective for annual periods, and interim periods therein, beginning after December 15, 2015. We are currently evaluating the impact the adoption of Topic 810 will have on our financial statements.

3. Real Estate Investments

Acquisitions

During the nine months ended September 30, 2015 and 2014, the Company, through the Operating Parntership, acquired the following properties:


Property	Date Acquired		Percentage Owned
Intellicenter		September 2015		100	%
190 Office Center		September 2015		100	%
DTC Crossroads		June 2015		100	%
Superior Pointe		June 2015		100	%
Logan Tower		February 2015		100	%
Lake Vista Pointe		July 2014		100	%
Plaza 25		June 2014		100	%
Cherry Creek		January 2014		100	%

The above acquisitions have been accounted for as business combinations.

On January 2, 2014, the Predecessor acquired the remaining 57.7% interest it did not already own in ROC-SCCP Cherry Creek I, LP (“Cherry Creek”) for approximately $12.0 million. The acquisition was financed through a new $50 million mortgage loan, the proceeds of which were used to repay $36 million of existing debt of Cherry Creek, fund the payment of $12.0 million to the seller, pay $1.2 million of deferred financing costs and $0.8 million in transactions costs.

The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed during the nine months ended September 30, 2014 (in thousands):


	Cherry Creek
Land	$	25,745
Buildings and improvements		15,771
Tenant improvements		4,372
Acquired intangible assets		12,009
Accounts payable and other liabilities		(815	)
Lease intangible liabilities		(249	)

Fair value of assets and liabilities at acquisition	$	56,833

The Company recognized expenses relating to the Cherry Creek acquisition of $806,344 for the nine months ended September 30, 2014. A gain of $4.5 million was recognized from the fair value adjustment associated with the Predecessor’s original ownership due to a change in control, calculated as follows (in thousands):


Fair value of assets and liabilities acquired	$	56,833
Less existing mortgage in Cherry Creek		(36,000	)

		20,833
Less cash paid to seller		(12,021	)

Fair value of 42.3% equity interest		8,812
Carrying value of investment in Cherry Creek		(4,337	)

Gain on existing 42.3% equity interest	$	4,475

On June 4, 2014, the Company, through its Operating Partnership acquired 100% of Plaza 25, a property in Denver, Colorado for $24.3 million. The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed (in thousands):


	Plaza 25
Land	$	1,764
Buildings and improvements		18,487
Tenant improvements		2,076
Acquired intangible assets		2,924
Prepaid expenses and other assets		2
Accounts payable and other liabilities		(641	)
Lease intangible liabilities		(328	)

Total consideration	$	24,284

On July 18, 2014, the Company, through its Operating Partnership, acquired 100% of Lake Vista, a property in Dallas, Texas for $26.7 million. The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed (in thousands):


	Lake Vista
Land	$	4,115
Buildings and improvements		17,562
Tenant improvements		3,038
Acquired intangible assets		3,685
Prepaid expenses and other assets		30
Accounts payable and other liabilities		(1,733	)

Total consideration	$	26,697

On February 4, 2015, the Company, through the Operating Partnership, acquired 100% of Logan Tower, a property in Denver, Colorado, for $10.4 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands):


	Logan Tower
Land	$	1,306
Buildings and improvements		7,844
Tenant improvements		353
Acquired intangible assets		1,274
Accounts payable and other liabilities		(48	)
Lease intangible liabilities		(306	)

Total consideration	$	10,423

On June 17, 2015, the Company, through the Operating Partnership, acquired 100% of Superior Pointe, a property in Denver, Colorado, for $25.5 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands):


	Superior Pointe
Land	$	3,153
Buildings and improvements		19,250
Tenant improvements		584
Acquired intangible assets		2,866
Prepaid expenses and other assets		24
Accounts payable and other liabilities		(316	)
Lease intangible liabilities		(53	)

Total consideration	$	25,508

On June 30, 2015, the Company, through the Operating Partnership, acquired 100% of DTC Crossroads, a property in Denver, Colorado, for $33.5 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands):


	DTC Crossroads
Land	$	7,137
Buildings and improvements		22,545
Tenant improvements		638
Acquired intangible assets		4,152
Accounts payable and other liabilities		(605	)
Lease intangible liabilities		(353	)

Total consideration	$	33,514

On September 3, 2015, the Company, through the Operating Partnership, acquired 100% of 190 Office Center, a property in Dallas, Texas, for $51.0 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands):


	190 Office Center
Land	$	7,162
Buildings and improvements		39,367
Tenant improvements		323
Acquired intangible assets		5,673
Accounts payable and other liabilities		(720	)
Lease intangible liabilities		(805	)

Total consideration	$	51,000

On September 3, 2015, the Company, through the Operating Partnership, acquired 100% of Intellicenter, a property in Tampa, Florida, for $46.3 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands):


	Intellicenter
Land	$	5,244
Buildings and improvements		31,359
Tenant improvements		2,919
Acquired intangible assets		7,742
Accounts payable and other liabilities		(321	)
Lease intangible liabilities		(664	)

Total consideration	$	46,279

The operating results of the Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties since the date of acquisition have been included in the Company’s condensed consolidated and combined financial statements for the three and nine months ended September 30, 2015. The following table represents the results of the properties operations since the date of acquisition on a stand-alone basis (in thousands):


	Three months ended September 30, 2015			Nine months ended September 30, 2015
Operating revenues	$	3,467		$	4,246
Operating expenses		(3,841	)		(5,037	)
Interest		(277	)		(283	)

Net loss before gain on equity investment	$	(651	)	$	(1,074	)

The following table presents the unaudited revenues and income from continuing operations for Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties on a pro forma basis as if the Company had completed the acquisition of the properties as of January 1, 2014 (in thousands):


	Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
Total revenues as reported by the Company	$	37,509		$	26,374
Plus: Logan Tower		143			1,148
Plus: Superior Pointe		1,666			2,384
Plus: DTC Crossroads		1,904			2,666
Plus: 190 Office Center		3,798			4,342
Plus: Intellicenter		3,196			3,158

Pro forma total revenues	$	48,216		$	40,072


Total operating income as reported by the Company	$	2,193		$	2,100
Property acquisition costs		2,893			(2,893	)
Plus: Logan Tower		(13	)		(102	)
Plus: Superior Pointe		(86	)		(203	)
Plus: DTC Crossroads		(59	)		(77	)
Plus: 190 Office Center		(233	)		(403	)
Plus: Intellicenter		930			635

Pro forma operating income	$	5,625		$	(943	)

4. Lease Intangibles

Lease intangibles and the value of assumed lease obligations as of September 30, 2015 and December 31, 2014 were comprised as follows (in thousands):


September 30, 2015	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	5,616		$	44,478		$	17,530		$	67,624		$	(2,927	)	$	(138	)	$	(3,065	)
Accumulated amortization		(2,599	)		(15,425	)		(5,355	)		(23,379	)		508			23			531

	$	3,017		$	29,053		$	12,175		$	44,245		$	(2,419	)	$	(115	)	$	(2,534	)


December 31, 2014	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	4,762		$	28,505		$	12,926		$	46,193		$	(746	)	$	(138	)	$	(884	)
Accumulated amortization		(1,985	)		(11,159	)		(3,658	)		(16,802	)		258			20			278

	$	2,777		$	17,346		$	9,268		$	29,391		$	(488	)	$	(118	)	$	(606	)

The estimated aggregate amortization expense for lease intangibles for the five succeeding years and in the aggregate are as follows (in thousands):


2015	$	2,993
2016		11,182
2017		8,492
2018		5,560
2019		4,034
Thereafter		9,450

	$	41,711

5. Debt

The following table summarizes the debt as of September 30, 2015 and December 31, 2014 (in thousands):


Property	September 30, 2015		December 31, 2014		Interest Rate as of September 30, 2015			Maturity
Intellicenter Term Loan ⁽¹⁾	$	14,000	$	—		LIBOR+6.00	%⁽²⁾	September 2016
Revolving Credit Facility ⁽³⁾		50,000		—		LIBOR +2.25	%⁽²⁾	June 2018
Washington Group Plaza ⁽⁴⁾		33,836		34,322		3.85		July 2018
AmberGlen Mortgage Loan ⁽⁵⁾		24,838		25,158		4.38		May 2019
Midland Life Insurance ⁽⁶⁾		95,000		95,000		4.34		May 2021
Lake Vista Pointe ⁽⁴⁾		18,460		18,460		4.28		August 2024
Florida Research Park ⁽⁴⁾⁽⁷⁾		17,000		17,000		4.44		December 2024
Plaza 25 ⁽⁴⁾⁽⁸⁾		17,000		—		4.10		July 2025
190 Office Center ⁽⁹⁾		41,250		—		4.79		September 2025
Intellicenter ⁽¹⁰⁾		33,562		—		4.65		September 2025

Total	$	344,946	$	189,940

All interest rates are fixed interest rates with the exception of the revolving credit facility (“Revolving Credit Facility”) and Intellicenter Term Loan (“Term Loan”) as explained in footnotes 1 and 2 below.

(1)

The Term Loan is collateralized by Intellicenter. The Company is required to maintain a maximum total leverage ratio of 65%, a minimum liquidity of $3 million and a debt service coverage ratio of no less than 1.60x.

(2)

As of September 30, 2015, the one month LIBOR rate was 0.20%

(3)

At September 30, 2015 the Revolving Credit Facility had $50 million authorized and drawn. In addition, the Revolving Credit Facility has an accordion feature that will permit the Company to borrow up to $150 million, subject to additional collateral availability and lender approval. The Credit Agreement has a maturity date of June 26, 2018, which may be extended to June 26, 2019 at the Company’s option upon meeting certain conditions. The Revolving Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.60x. At September 30, 2015, the Revolving Credit Facility is cross-collateralized by Central Fairwinds, Logan Tower, Superior Pointe and DTC Crossroads. On July 14, 2015, the Company entered into an Amendment and Joinder to its Amended and Restated Credit Agreement which increased the authorized borrowing capacity under the Credit Agreement from $35 million to $75 million.

(4)

Interest on mortgage loan is payable monthly plus principal based on 360 months of amortization.

(5)

The Company is required to maintain a minimum net worth of $25 million and a minimum liquidity of $2 million.

(6)

The mortgage loan is cross-collateralized by Corporate Parkway, Cherry Creek and City Center. Interest only until June 2016 then interest payable monthly plus principal based on 360 months of amortization. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021.

(7)

The Company is required to maintain a minimum net worth of $17 million, minimum liquidity of $1.7 million and a debt service coverage ratio of no less than 1.15x.

(8)

The Company is required to maintain a debt service coverage ratio of no less than 1.45x.

(9)

The Company is required to maintain a debt service coverage ratio of no less than 1.15x.

(10)

The Company is required to maintain a debt service coverage ratio of no less than 1.20x.

The scheduled principal repayments of debt as of September 30, 2015 are as follows (in thousands):


2015	$	276
2016		16,034
2017		3,036
2018		85,161
2019		26,629
Thereafter		213,810

Total	$	344,946

Mortgage Loans

On September 3, 2015, the Company closed on a $41.3 million loan secured by a first mortgage lien on the 190 Office Center property in Dallas. The loan matures in September 2025 and provides for monthly payments of principal and interest. Interest is payable at a fixed rate of 4.79% per annum. Monthly payments are initially interest only.

On September 3, 2015, the Company closed on a $33.6 million loan secured by a first mortgage lien on the Intellicenter property in Tampa. The loan matures in September 2025 and provides for monthly payments of principal and interest. Interest is payable at a fixed rate of 4.65% per annum. Monthly payments are initially interest only.

Term Loan

On September 2, 2015, the Company closed on a $14.0 million term loan secured by a first mortgage lien on the Intellicenter property in Tampa. The loan matures in September 2016 and provides for monthly interest payments. Interest is payable at a variable rate of LIBOR plus 6.00% per annum.

Secured Credit Facility

On July 14, 2015, the Company entered into an Amendment and Joinder to its Amended and Restated Credit Agreement which increased the authorized borrowing capacity under the Credit Agreement from $35 million to $75 million.

6. Fair Value of Financial Instruments

Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows:

Level 1 Inputs – quoted prices in active markets for identical assets or liabilities

Level 2 Inputs – observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 Inputs – unobservable inputs

Earn-Out Liability

The fair value of the Central Fairwinds earn-out (note 9) was derived by making assumptions on the timing of the lease up of vacant space and the gross effective rents of those new leases and then applying an 8% discount rate to the resulting cash-flows to obtain a present value. The earn-out valuation assumes that approximately 4,000 square feet of additional leasing is completed between the date of the valuation and the end of the calculation period which would take the earn-out occupancy from 76% signed and committed at September 30, 2015 to 89% by July 2016 and stabilized at that level thereafter. The average gross effective rent and incremental operating costs per square foot is assumed to be $22 and $3, respectively.

At June 30, 2015, the 70% earn-out occupancy and net operating income thresholds were met. This triggered a payment of approximately $3.2 million which was made on August 6, 2015.

The estimated fair value of the earn-out liability decreased from $8.0 million at December 31, 2014 to $5.4 million at September 30, 2015 primarily due to a $3.2 million payment in August 2014, satisfied through the issuance of common stock, partially offset by an increase in the fair value of the remaining liability during the nine months ended September 30, 2015 of approximately $0.6 million.

Level 3 sensitivity analysis:

The Company applies judgment in determining unobservable inputs used to calculate the fair value of Level 3 instruments. Level 3 instruments held by the Company include the earn-out. The unobservable inputs used in the valuation of the earn-out primarily include the net effective rent assumptions. A sensitivity analysis has been performed to determine the potential gain or loss by varying the significant unobservable inputs by increasing or decreasing them by 10%. The impact of applying these other reasonably possible inputs is a potential loss of $0.1 million and a potential gain of $0.1 million. This potential gain or loss would be recorded through profit and loss.

Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities

The Company estimates that the fair value approximates carrying value due to the relatively short-term nature of these instruments.

Fair Value of Financial Instruments Not Carried at Fair Value

With the exception of fixed rate mortgage loans payable, the carrying amounts of the Company’s financial instruments approximate their fair value. The Company determines the fair value of its fixed rate mortgage loan payable based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $290,000,000 and $192,500,000 as of September 30, 2015 and December 31, 2014, respectively. Although the Company has determined the majority of the inputs used to value its fixed rate debt fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its fixed rate debt utilize Level 3 inputs, such as estimates of current credit spreads. Accordingly, mortgage loans payable have been classified as Level 3 fair value measurements.

7. Related Party Transactions

Formation and Equity Transactions

The Formation Transactions were completed on April 21, 2014 through the contribution of the initial properties by Second City Capital Partners II, Limited Partnership, Second City General Partner II, Limited Partnership, Gibralt US, Inc., GCC Amberglen Investments Limited Partnership and Daniel Rapaport (collectively, the “Second City Group”). The Second City Group received as consideration for its contribution approximately $19.4 million in cash in accordance with the terms of its contribution agreement to acquire various non-controlling interests and eliminate economic incentives in the initial properties. Additional payments to the Second City Group included $4.9 million for reimbursement of IPO costs and $1.8 million for working capital. On May 9, 2014, subsequent to the underwriters’ exercise of the overallotment option, the Company used the $9.1 million of net proceeds from the underwriters’ exercise of the overallotment option to redeem 479,305 common units and 248,095 shares of common stock from the Second City Group.

On December 23, 2014, the underwriters of the secondary public offering exercised their overallotment option to purchase an additional 512,664 shares of the Company`s common stock at the offering price of $12.50 a share resulting in additional net proceeds to the Company of $6.1 million after deducting underwriting discounts. The Company used the $6.1 million of net proceeds from exercise of the overallotment option to redeem 336,195 common units and 176,469 shares of common stock from the Second City Group.

Property Management Fees

Three of the Company’s properties (City Center, Central Fairwinds and AmberGlen) engaged related parties to perform asset and property management services for a fee ranging from 3.0% to 3.5% of gross revenue.

Advisory and Transaction Fees

During the three and nine month period ended September 30, 2015, the Company incurred $1.3 million and $2.7 million, respectively, in advisory and transaction fees payable to the Advisor.

Earn-Out Payment

At June 30, 2015, the 70% earn-out occupancy and net operating income thresholds were met. This triggered a payment of approximately $3.2 million which was made on August 6, 2015.

8. Future Minimum Rent Schedule

Future minimum lease payments to be received as of September 30, 2015 under noncancellable operating leases for the next five years and thereafter are as follows (in thousands):


2015	$	12,537
2016		40,223
2017		38,317
2018		31,918
2019		25,955
Thereafter		113,414

	$	262,364

The above minimum lease payments to be received do not include reimbursements from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases.

Two state government tenants currently have the exercisable right to terminate their lease if the state does not appropriate rent in its annual budgets. The Company has determined that the occurrence of the government tenant not appropriating the rent in its annual budget is a remote contingency and accordingly recognizes lease revenue on a straight-line basis over the respective lease term. These tenants represent approximately 27.40% of the Company’s total future minimum lease payments as of September 30, 2015.

9. Commitments and Contingencies

Earn-Out

As part of the Formation Transactions and contribution agreement with respect to the Central Fairwinds property, the Company is obligated to make additional payments to Second City (each, an “Earn-Out Payment”). Earn-Out Payments are contingent on the property reaching certain specified occupancy levels through new leases to qualified tenants and exceeding a net operating income threshold, which grows annually. Second City will be entitled to receive an Earn-Out Payment (net of the associated leasing costs and inclusive of leasing commissions and tenant improvements/allowances and free rent) as and when the occupancy of Central Fairwinds reaches each of 70%, 80% and 90% (each, an “Earn-Out Threshold”) based on the incremental cash flow generated by new leases and a 7.75% stabilized capitalization rate. The Company will make any additional Earn-Out Payment within 30 days of the end of the Earn-Out Term based on new qualified leases entered into since the achievement of the last Earn-Out Threshold. Earn-Out Payments will be subject to a claw-back if a qualified tenant defaults in the payment of rent and is not replaced with another qualified tenant (see note 6).

At September 30, 2015, the 70% earn-out occupancy and net operating income thresholds were met. This triggered a payment of approximately $3.2 million which was made on August 6, 2015.

Other

The Company is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties.

Under various federal, state and local laws, ordinances and regulations relating to the protection of the environment, a current or previous owner or operator of real estate may be liable for the cost of removal or remediation of certain hazardous or toxic substances disposed, stored, generated, released, manufactured or discharged from, on, at, under, or in a property. As such, the Company may be potentially liable for costs associated with any potential environmental remediation at any of its formerly or currently owned properties.

The Company believes that it is in compliance in all material respects with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Management is not aware of any environmental liability that it believes would have a material adverse impact on the Company’s financial position or results of operations. Management is unaware of any instances in which the Company would incur significant environmental costs if any or all properties were sold, disposed of or abandoned. However, there can be no assurance that any such non-compliance, liability, claim or expenditure will not arise in the future.

The Company is involved from time to time in lawsuits and other disputes which arise in the ordinary course of business. As of September 30, 2015 management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations.

10. Stockholder’s Equity

The Company issued 5,800,000 shares in the IPO resulting in net proceeds of $63.4 million after deducting the underwriters’ discount and offering expenses. The underwriters of the IPO exercised their overallotment option to purchase an additional 782,150 shares of the Company’s common stock resulting in additional net proceeds of $9.1 million after deducting underwriting discounts.

On December 10, 2014, the Company completed a follow-on public offering pursuant to which the Company sold 3,750,000 shares of our common stock at a price of $12.50 per share. The Company raised $46.9 million in gross proceeds, resulting in net proceeds to the Company of approximately $43.7 million after deducting

approximately $2.6 million in underwriting discounts and approximately $0.6 million in other expenses relating to the offering. On December 23, 2014, the underwriters of the offering exercised their overallotment option to purchase an additional 512,664 shares of our common stock at the offering price of $12.50 a share for additional gross proceeds to the Company of approximately $6.4 million resulting in net proceeds to the Company of $6.1 million after deducting approximately $0.3 million in underwriting discounts. All net proceeds from the underwriters’ exercise of the overallotment option were used to redeem 336,195 common units and 176,469 common stock held by the Second City Group.

Non-controlling Interests

Non-controlling interests in the Company represent common units of the Operating Partnership held by the Predecessor’s prior investors. Non-controlling interests consisted of 3,070,405 Operating Partnership common units and represented an approximately 19.3% interest in the Operating Partnership as of September 30, 2015. Operating Partnership units and shares of common stock have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of the Operating Partnership. Beginning on or after the date which is 12 months after the later of the completion of the initial public offering or the date on which a person first became a holder of common units, each limited partner and assignees of limited partners will have the right, subject to the terms and conditions set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the common units held by such limited partner or assignee in exchange for a cash amount per common unit equal to the value of one share of common stock, determined in accordance with and subject to adjustment under the partnership agreement. The Company has the sole option at its discretion to redeem the common units by issuing common stock on a one-for-one basis. The Operating Partnership unitholders are entitled to share in cash distributions from the Operating Partnership in proportion to its percentage ownership of common units.

During the nine months ended September 30, 2015, 12,500 common units were converted to common stock.

Common Stock and Common Unit Distributions

On September 15, 2015, the Company’s board of directors declared a cash dividend distribution of $0.235 per share for the quarterly period ended September 30, 2015. The dividend was paid on October 19, 2015 to stockholders and common unitholders of record on October 5, 2015 for an aggregate of $2.9 million in dividends to stockholders and $0.7 million to common unitholders, totaling $3.6 million.

Restricted Stock Units

The Company has an equity incentive plan (“Equity Incentive Plan”) for certain officers, directors, advisors and personnel, and, with approval of the board of directors, for subsidiaries, the Advisor and their respective affiliates. The Equity Incentive Plan provides for grants of restricted common stock, restricted stock units, phantom shares, stock options, dividend equivalent rights and other equity-based awards (including LTIP Units), subject to the total number of shares available for issuance under the plan. The Equity Incentive Plan is administered by the compensation committee of the board of directors (the “plan administrator”).

The maximum number of shares of common stock that may be issued under the Equity Incentive Plan is 1,263,580 shares. To the extent an award granted under the Equity Incentive Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards.

During the three months ended September 30, 2015, 6,226 restricted stock units (“RSUs”) were granted to directors and non-executive employees of the Advisor with a fair value of $0.1 million. The awards will vest in three equal, annual installments on each of the first three anniversaries of the date of grant. For the three months ended September 30, 2015, 10,783 RSUs vested and the Company recognized net compensation expense of $0.5 million related to the RSUs.

A RSU award represents the right to receive shares of the Company’s common stock in the future, after the applicable vesting criteria, determined by the plan administrator, has been satisfied. The holder of an award of RSU

has no rights as a stockholder until shares of common stock are issued in settlement of vested RSUs. The plan administrator may provide for a grant of dividend equivalent rights in connection with the grant of RSU; provided, however, that if the RSUs do not vest solely upon satisfaction of continued employment or service, any payment in respect to the related dividend equivalent rights will be held by the Company and paid when, and only to the extent that, the related RSU vest.

11. Subsequent Events

On November 2, 2015, the Company and a subsidiary (“Buyer Sub”) entered into a Stock Purchase Agreement (“Stock Purchase Agreement”) with certain stockholders of the Advisor and two personal holding companies that own stock of the Advisor pursuant to which Buyer Sub will acquire all of the outstanding stock of the Advisor. The transaction is scheduled to close on February 1, 2016. Pursuant to the Stock Purchase Agreement, at closing, the Company will issue 297,321 shares of its common stock to the sellers, which include the Company’s three executive officers and Samuel Belzberg, a director of the Company. In addition, the Company will make cash payments to the sellers of up to $3.5 million if the Company’s fully diluted market capitalization reaches the following thresholds prior to December 31, 2016: $1 million upon the Company achieving a $200 million fully diluted market capitalization, an additional $1 million upon the Company achieving a $225 million fully diluted market capitalization and an additional $1.5 million upon the Company achieving a $250 million fully diluted market capitalization (in each case, including in the calculation of fully diluted market capitalization the value of units of limited partnership interest in the Company’s operating partnership held by parties other than the Company at a value per unit equal to the market price of the Company’s common stock).

On November 2, 2015, the Company and its operating partnership entered into an amendment to the Advisory Agreement that eliminates the payment of acquisition fees by the Company to the Advisor effective as of November 2, 2015. If closing under the Stock Purchase Agreement does not occur in accordance with its terms, the acquisition fee pursuant to the Advisory Agreement will be reinstated and any foregone fees will become due and payable.

Effective upon closing of the transactions under the Stock Purchase Agreement, each of James Farrar, the Company’s Chief Executive Officer, Gregory Tylee, President and Chief Operating Officer and Anthony Maretic, Chief Financial Officer, Secretary and Treasurer will enter into an employment agreement with a subsidiary of the Company and will become employees of the Company. In addition, at the same time, approximately ten additional current employees of the Advisor and its affiliates are expected to become employees of the Company and its subsidiaries and the Company will have offices in Vancouver, British Columbia and Dallas, Texas.

In connection with the closing of the transactions under the Stock Purchase Agreement, a subsidiary of the Company will enter into an Administrative Services Agreement (the “Administrative Services Agreement”) with entities that manage real estate investment funds affiliated with Second City Capital II Corporation and Second City Real Estate II Corporation (the “Second City funds”). The Company’s management team and one of its directors, Samuel Belzberg, are officers of the general partners of the Second City funds and own equity interests in the Second City funds. The Administrative Services Agreement has a three year term and pursuant to the agreement, a subsidiary of the Company will provide various administrative services and support to the entities managing the Second City funds. The Company’s subsidiary will receive annual payments for these services under the Administrative Services Agreement as follows: first 12 months—$1.5 million, second 12 months—$1.125 million and third 12 months—$0.625 million, for a total of $3.25 million over the three-year term. In addition, following the expiration of the three year term of the Administrative Services Agreement, the Company will agree to make Messrs. Farrar and Tylee available to assist the Second City funds with respect to certain matters.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is based on, and should be read in conjunction with, the condensed, consolidated and combined financial statements and the related notes thereto of the City Office REIT, Inc. for the three and nine months ended September 30, 2015 and 2014.

As used in this section, unless the context otherwise requires, references to “we,” “our,” “us,” and “our company” refer to City Office REIT, Inc., a Maryland corporation, together with our consolidated subsidiaries, including City Office REIT Operating Partnership L.P., a Maryland limited partnership, of which we are the sole general partner and which we refer to in this section as our Operating Partnership, except where it is clear from the context that the term only means City Office REIT, Inc. References to the “City Office Predecessor” are to the real estate activity and holdings of the entities that own the historical interests in the AmberGlen, Central Fairwinds, City Center, Cherry Creek, Corporate Parkway and Washington Group Plaza properties.

Cautionary Statement Regarding Forward-Looking Statements

This quarterly report on Form 10-Q, including “Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition,” contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are not based on historical facts, but rather reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward looking statements by using words including “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “result” and similar terms and phrases. These forward looking statements are subject to a number of known and unknown risks, uncertainties and other factors that are difficult to predict and which could cause our actual future results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward looking statements. These risks, uncertainties and other factors include, among others:

•

our ability to close on the internalization transaction on the terms expected or at all;

•

our ability to hire and retain key personnel;

•

our expectations regarding our ability to achieve higher profitability and lowered expenses as a result of the internalization;

•

changes in the real estate industry and in performance of the financial markets;

•

competition in the leasing market;

•

the demand for and market acceptance of our properties for rental purposes;

•

the amount and growth of our expenses;

•

tenant financial difficulties and general economic conditions, including interest rates, as well as economic conditions in our geographic markets;

•

defaults or non-renewal of leases; risks associated with joint venture partners; the risks associated with the ownership and development of real property, including risks related to natural disasters;

•

risks associated with property acquisitions and dispositions, the failure to acquire or sell properties as and when anticipated;

•

the outcome of claims and litigation involving or affecting the Company;

•

the ability to satisfy conditions necessary to close pending transactions;

•

our failure to maintain our status as real estate investment trust, or REIT; and

•

other factors described in our news releases and filings with the Securities and Exchange Commission (the “SEC”), including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2014 under the heading “Risk Factors” and in our subsequent reports filed with the SEC.

The forward looking statements included in this report are made only as of the date of this report, and except as otherwise required by federal securities law, we do not have any obligation to publicly update or revise any forward looking statements to reflect subsequent events or circumstances.

Overview

Company

We were formed as a Maryland corporation on November 26, 2013. On April 21, 2014, we completed our initial public offering (“IPO”) of shares of common stock. We contributed the net proceeds of the IPO to our Operating Partnership in exchange for common units in our Operating Partnership. Both we and our Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions (the “Formation Transactions”).

Upon completion of the Formation Transactions we entered into the Advisory Agreement with our Advisor pursuant to which the Advisor will provide management and advisory services to us. The Advisory Agreement requires our Advisor to manage our business affairs in conformity with policies and investment guidelines that are approved and monitored by our board of directors.

Our interest in our Operating Partnership entitles us to share in distributions from, and allocations of profits and losses of, our Operating Partnership in proportion to our percentage ownership of common units. As the sole general partner of our Operating Partnership, we have the exclusive power under the partnership agreement to manage and conduct our Operating Partnership’s business, subject to limited approval and voting rights of the limited partners.

On April 21, 2014, we closed the IPO, pursuant to which we sold 5,800,000 shares of common stock to the public at a public offering price of $12.50 per share. We raised $72.5 million in gross proceeds, resulting in net proceeds to us of approximately $63.4 million after deducting approximately $5.1 million in underwriting discounts and approximately $4.0 million in other expenses relating to the IPO. On May 9, 2014, the underwriters of the IPO partially exercised their overallotment option with respect to an additional 782,150 shares of our common stock at the IPO price of $12.50 a share resulting in additional gross proceeds of approximately $9.8 million. The net proceeds to us were $9.1 million after deducting approximately $0.7 million in underwriting discounts. Our common stock began trading on the NYSE under the symbol “CIO” on April 15, 2014.

Pursuant to the Formation Transactions and exercise of the underwriters’ over-allotment option, our Operating Partnership acquired a 100% interest in each of the Washington Group Plaza, Cherry Creek and Corporate Parkway properties and acquired an approximate 76% economic interest in the AmberGlen property, 90% interest in the Central Fairwinds property and 95% interest in the City Center property. These initial property interests were contributed in exchange for 3,731,209 common units, 1,858,860 shares of our common stock and $19.4 million of cash. On May 9, 2014, we used all of the net proceeds from the exercise of the underwriters’ overallotment option to redeem 479,305 common units and 248,095 common stock from the Second City Group for $9.1 million in cash.

On December 10, 2014, we completed a public offering pursuant to which we sold 3,750,000 of our common stock to the public at a price of $12.50 per share. We raised $46.9 million in gross proceeds, resulting in net proceeds to us of approximately $43.7 million after deducting approximately $2.6 million in underwriting discounts and approximately $0.6 million in other expenses relating to the offering. On December 23, 2014, the underwriters of the offering exercised their overallotment option to purchase an additional 512,664 shares of our common stock at

the offering price of $12.50 a share resulting in additional gross proceeds to us of approximately $6.4 million resulting in net proceeds to us of $6.1 million after deducting approximately $0.3 million in underwriting discounts. We used all of the net proceeds from the exercise of the underwriters’ overallotment option to redeem 336,195 common units and 176,469 common stock from the Second City Group for $6.1 million cash.

We have elected to be taxed and will continue to operate in a manner that will allow us to qualify as a REIT. So long as we qualify as a REIT, we will be permitted to deduct distributions paid to our stockholders, eliminating the U.S. federal taxation of income represented by such distributions at the company level. REITs are subject to a number of organizational and operational requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates.

On October 29, 2015, we commenced the marketing of our Corporate Parkway property in Center Valley (Allentown), PA, with CBRE Inc. acting as broker. Corporate Parkway is a 178,330 SF, Class A office campus that is currently 100% leased to the Dun & Bradstreet Corporation. As previously disclosed, in June 2015, an early lease extension for this tenant was completed for an additional 10 years through January 2027. We are at a preliminary stage in in the marketing process and we anticipate having more clarity regarding the timing and terms of any potential sale of the property in early 2016. Assuming that a transaction is completed, we expect that the net proceeds will be used to repay debt.

On November 2, 2015, we and one of our newly-formed subsidiaries (“Buyer Sub”) entered into a Stock Purchase Agreement (“Stock Purchase Agreement”) with certain stockholders of our Advisor, and two personal holding companies that own stock of the Advisor, pursuant to which Buyer Sub will acquire all of the outstanding stock of the Advisor and we will transition from an externally managed company to an internally managed company (the “Internalization”). The Internalization is scheduled to close on February 1, 2016. Pursuant to the Stock Purchase Agreement, on February 1, 2016 we expect to issue 297,321 shares of our common stock to the sellers, which include our three executive officers and Samuel Belzberg, a member of our Board of Directors. In addition, we expect to make cash payments to the sellers of up to $3.5 million pursuant to the Stock Purchase Agreement if our fully diluted market capitalization reaches the following thresholds prior to December 31, 2016: $1 million upon achieving a $200 million fully diluted market capitalization, an additional $1 million upon achieving a $225 million fully diluted market capitalization and an additional $1.5 million upon achieving a $250 million fully diluted market capitalization (in each case, including in the calculation of fully diluted market capitalization the value of common units held by parties other than us at a value per unit equal to the market price of our common stock).

In connection with the execution of the Stock Purchase Agreement, on November 2, 2015, we and our operating partnership entered into an amendment to the Advisory Agreement that eliminates the payment of acquisition fees by us to the Advisor effective as of November 2, 2015. If closing under the Stock Purchase Agreement does not occur in accordance with its terms, the acquisition fee pursuant to the Advisory Agreement will be reinstated and any foregone fees will become due and payable.

Effective upon closing of the Internalization, we expect that each of James Farrar, our Chief Executive Officer, Gregory Tylee, our President and Chief Operating Officer and Anthony Maretic, our Chief Financial Officer, Secretary and Treasurer, will enter into an employment agreement with one of our subsidiaries and will become our employees. In addition, at closing, we expect that approximately ten additional current employees of the Advisor and its affiliates will become our employees.

In connection with the closing of Internalization, we expect that one of our subsidiaries will enter into an Administrative Services Agreement (the “Administrative Services Agreement”) with entities that manage real estate investment funds affiliated with Second City Capital II Corporation and Second City Real Estate II Corporation (the “Second City funds”). Our executive officers and one of our directors, Samuel Belzberg, are officers of the general partners of the Second City funds and own equity interests in the Second City funds. We expect that the Administrative Services Agreement will have a three year term. Pursuant to the Administrative Services Agreement, we expect that one of our subsidiaries will provide various administrative services and support to the entities managing the Second City funds. We expect that this subsidiary will receive annual payments for these services under the Administrative Services Agreement as follows: first 12 months—$1.5 million, second 12 months—$1.125 million and third 12 months—$0.625 million, for a total of $3.25 million over the three-year term. In addition, following the expiration of the three year term of the Administrative Services Agreement, we expect to make Messrs. Farrar and Tylee available to assist the Second City funds with respect to certain matters.

Indebtedness

In connection with the IPO and the related Formation Transactions, we repaid in full the mortgage loan secured by the Central Fairwinds property and completed a mortgage refinancing of three properties (Cherry Creek,

City Center and Corporate Parkway) with a new $95 million non-recourse mortgage loan and proceeds from the IPO. On April 29, 2014, we completed a $25.4 million mortgage refinancing of the AmberGlen property. Following the Formation Transactions, the Washington Group Plaza property remained subject to the existing mortgage loan.

For additional information regarding these mortgage loans and the Secured Credit Facility, please refer to “Liquidity and Capital Resources” below.

Revenue Base

As of September 30, 2015, we owned 14 properties comprised of 28 office buildings with a total of approximately 3.3 million square feet of net rentable area (NRA). As of September 30, 2015, our properties were approximately 95% leased.

Office Leases

Historically, most leases for our properties were on a full-service gross or net lease basis, and we expect to continue to use such leases in the future. A full-service gross lease generally has a base year expense “stop”, whereby we pay a stated amount of expenses as part of the rent payment while future increases (above the base year stop) in property operating expenses are billed to the tenant based on such tenant’s proportionate square footage in the property. The property operating expenses are reflected in operating expenses; however, only the increased property operating expenses above the base year stop recovered from tenants are reflected as tenant recoveries in our statements of operations. In a net lease, the tenant is typically responsible for all property taxes and operating expenses. As such, the base rent payment does not include any operating expenses, but rather all such expenses are billed to or paid by the tenant. The full amount of the expenses for this lease type is reflected in operating expenses, and the reimbursement is reflected in tenant recoveries. The tenants in the Corporate Parkway, Lake Vista Pointe Florida Research Park and Superior Pointe properties have net leases. We are also a lessor for a fee simple ground lease at the AmberGlen property. All of our remaining leases are full-service gross leases.

Interest Rate Contracts

As of September 30, 2015, we did not have any interest rate contracts.

Factors That May Influence Our Operating Results and Financial Condition

Business and Strategy

We focus on owning and acquiring office properties in our target markets. Our target markets generally possess what we believe are favorable economic growth trends, growing populations with above-average employment growth forecasts, a large number of government offices, large international, national and regional employers across diversified industries, are generally low-cost centers for business operations, and exhibit favorable occupancy trends. We utilize our Advisor’s market-specific knowledge and relationships as well as the expertise of local real estate operators and our investment partners to identify acquisition opportunities that we believe will offer cash flow stability and long-term value appreciation. Our target markets are attractive, among other reasons, because we believe that ownership is often concentrated among local real estate operators that typically do not benefit from the same access to capital as public REITs and there is a relatively low level of participation of large institutional investors. We believe that these factors result in attractive pricing levels and risk-adjusted returns.

Rental Revenue and Tenant Recoveries

The amount of net rental revenue generated by our properties will depend principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space that becomes available from lease terminations. As of September 30, 2015, our properties were approximately 95% leased. The amount of rental revenue generated also depends on our ability to maintain or increase rental rates at our properties. We believe that the average rental rates for our portfolio of properties are generally in-line or slightly below the current average quoted market rates. Negative trends in one or more of these factors could adversely affect our rental

revenue in future periods. Future economic downturns or regional downturns affecting our markets or submarkets or downturns in our tenants’ industries that impair our ability to renew or re-let space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our properties. In addition, growth in rental revenue will also partially depend on our ability to acquire additional properties that meet our investment criteria.

Our Properties

As of September 30, 2015, we own fourteen office complexes comprised of 28 office buildings with a total of approximately 3.3 million square feet of NRA in the metropolitan areas of Boise (ID), Denver (CO), Portland (OR), Tampa (FL), Allentown (PA), Dallas (TX) and Orlando (FL). The following table presents an overview of our portfolio as of September 30, 2015 (properties listed by descending NRA by market).


Metropolitan Area	Property	Year Built /Last Major Renovation⁽¹⁾	Economic Interest			NRA⁽²⁾	In Place Occupancy			In Place & Committed Occupancy⁽³⁾			Annualized Base Rent Per Square Foot⁽⁵⁾		Annualized Gross Rent Per Square Foot⁽⁴⁾		Annualized Base Rent⁽⁵⁾
Denver, CO	Cherry Creek	1962 – 1980 / 2012		100.0	%	356		100.0	%		100.0	%	$	16.86	$	16.86	$	5,996,453
	Plaza 25	1981 /2006		100.0	%	197		92.4	%		92.4	%		20.36		20.36		3,701,671
	DTC Crossroads	1999 / 2015		100.0	%	191		89.8	%		89.8	%		24.20		24.20		4,142,547
	Superior Pointe	2000		100.0	%	149		89.8	%		89.8	%		14.68		25.68		1,964,083
	Logan Tower	1983 / 2014		100.0	%	70		95.1	%		95.1	%		18.36		18.36		1,221,871
Boise, ID	Washington Group Plaza	1970 – 1982 / 2012⁽⁶⁾		100.0	%	558		89.2	%		89.2	%		17.17		17.17		8,556,055
Dallas, TX	190 Office Center	2008		100.0	%	303		97.8	%		97.8	%		22.38		22.38		6,626,982
	Lake Vista Pointe	2007		100.0	%	163		100.0	%		100.0	%		14.00		14.00		2,286,704
Tampa, FL	City Center	1984 / 2012		95.0	%	241		100.0	%		100.0	%		23.29		23.29		5,613,297
	Intellicenter	2008		100.0	%	204		100.0	%		100.0	%		21.76		21.76		4,428,975
Portland, OR	AmberGlen	1984 /2002⁽⁷⁾		76.0	%	353		97.7	%		96.7	%		15.91		18.29		5,490,804
Orlando, FL	Central Fairwinds	1982 / 2012		90.0	%	167		76.7	%		87.5	%		25.84		25.84		3,316,278
	Florida Research Park	1999		100.0	%	125		100.0	%		100.0	%		19.50		27.50		2,427,750
Allentown, PA	Corporate Parkway	2006		100.0	%	178		100.0	%		100.0	%		18.19		25.19		3,242,940

Total/Weighted Average:						3,255		94.9	%		95.4	%	$	19.11	$	20.93	$	59,016,410

(1)	We define major renovation as significant upgrades, alterations or additions to building common areas, interiors, exteriors and/or systems.

(2)	NRA in thousands of square feet.

(3)	Includes both in place and committed tenants, which we define as tenants in occupancy as well as tenants that have executed binding leases for space undergoing improvement but are not yet in occupancy, as of September 30, 2015.

(4)

For Corporate Parkway, Lake Vista Pointe, Florida Research Park and Superior Pointe, the annualized base rent per square foot on a triple net basis was increased by $7.00, $6.50 $8.00 and $11.00 respectively, to estimate a gross equivalent base rent. AmberGlen has net leases for two tenants which have been grossed-up by $6.00 on a pro rata basis.

(5)	Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended September 30, 2015 by (ii) 12.

(6)

Plaza I was built in 1970 with the last major renovation completed in 2012; Plaza II was built in 1975 with the last major renovation completed in 2012; Central Plaza was built in 1982 with the last major renovation completed in 2011; and Plaza IV was built in 1982 with the last major renovation completed in 2010.

(7)	Building 1040 was built in 1984; Building 1195 was built in 1999; Building 1400 was built in 1984; Building 1600 was built in 1987; Building 2345 was built in 1998; and Building 2430 was built in 1998.

Operating Expenses

Our operating expenses generally consist of utilities, property and ad valorem taxes, insurance and site maintenance costs. Increases in these expenses over tenants’ base years (until the base year is reset at expiration) are generally passed along to tenants in our full-service gross leased properties and are generally paid in full by tenants in our net leased properties.

Conditions in Our Markets

Positive or negative changes in economic or other conditions in the markets we operate in, including state budgetary shortfalls, employment rates, natural hazards and other factors, may impact our overall performance.

Summary of Significant Accounting Policies

The interim financial statements follow the same policies and procedures as outlined in the audited combined financial statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Results of Operations

Comparison of Three Months Ended September 30, 2015 to Three Months Ended September 30, 2014

Revenue

Total Revenue. Revenue includes net rental income, including parking, signage and other income, as well as the recovery of operating costs and property taxes from tenants. Total revenues increased $4.6 million, or 46%, to $14.6 million for the three month period ended September 30, 2015 compared to $10.0 million in the corresponding period in 2014. Revenue in 2015 increased by $0.2 million from the acquisition of the Lake Vista Pointe property in July 2014, $0.7 million from the acquisition of Florida Research Park in November 2014, $0.4 million from the acquisition of Logan Tower in February 2015, $0.9 million from the acquisition of Superior Pointe in June 2015, $1.1 million from the acquisition of DTC Crossroads In June 2015, $0.6 million from the acquisition of 190 Office Center in September 2015 and $0.4 million from the acquisition of Intellicenter in September 2015. City Center and Central Fairwinds increased total revenues by $0.2 million and $0.1 million, respectively, due to the increased occupancy at the property over the prior year period. AmberGlen, Corporate Parkway, Washington Group Plaza and Cherry Creek revenues were relatively unchanged in comparison to the prior year.

Rental Income. Rental income includes net rental income, income from a ground lease. Total rental income increased $3.6 million, or 39%, to $12.6 million for the three month period ended September 30, 2015 compared to $9.0 million for the three months ended September 30, 2014. The increase in rental income was primarily due to the acquisitions described above. The acquisition of the Lake Pointe Vista, Florida Research Park, Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties contributed an additional $0.1 million, $0.6 million, $0.3 million, $0.5 million, $1.0 million, $0.5 million and $0.4 million in rental income, respectively to the 2015 period rental income. City Center and Central Fairwinds increased total rental income by $0.1 million and $0.1 million, respectively, due to the increased occupancy at the property over the prior year period.

Expense Reimbursement. Total expense reimbursement increased $0.9 million, or 102%, to $1.7 million for the three month period ended September 30, 2015 compared to $0.8 million for the same period in 2014, primarily due to the acquisition of the Plaza 25, Lake Vista Pointe, Florida Research Park, Logan Tower, Superior Pointe, DTC Crossroads, 190 Center and Intellicenter properties described above.

Other. Other revenue includes parking, signage and other miscellaneous income. Total other revenues increased $0.2 million, or 166%, to $0.3 million compared to $0.1 million for the same period in 2014. Nominal other income was generated by City Center, Central Fairwinds, Plaza 25, Logan Tower and DTC Crossroads with the largest contribution from City Center parking income.

Operating Expenses

$0.3 million, $0.9 million, $0.9 million, $0.9 million, and $0.7 million respectively, from the acquisition of the Plaza 25 property in June 2014, the acquisition of the Lake Vista Pointe property in July 2014, the acquisition of Florida Research Park property in November 2014, the acquisition of DTC Crossroads in June 2015, the acquisition of 190 Office Center in September 2015 and the acquisition of Intellicenter in September 2015. City, Center, AmberGlen, Central Fairwinds, Corporate Parkway, Washington Group Plaza and Cherry Creek operating expenses were relatively unchanged in comparison to the prior year period. Acquisition costs increased $0.9 million over the prior period due to the acquisitions of 190 Center and IntelliCenter during the quarter. The three month period ended September 30, 2015 also includes $0.2 million of costs related to the acquisition of the external advisor. The remaining increase relates to slight increases in stock-based compensation, base management fees and general and administrative expenses related to our growth over the prior year.

Property Operating Expenses. Property operating expenses are comprised mainly of building common area and maintenance expenses, insurance, property taxes, property management fees, as well as certain expenses that are not recoverable from tenants, the majority of which are related to costs necessary to maintain the appearance and marketability of vacant space. In the normal course of business, property expenses fluctuate and are impacted by various factors including, but not limited to, occupancy levels, weather, utility costs, repairs, maintenance and re-leasing costs. Property operating expenses increased $1.6 million, or 41%, to $5.5 million for the three month period ended September 30, 2015 from $3.9 million for the same period in 2014. The increase in property operating expenses was primarily due to the acquisitions described above. The acquisition of the Plaza 25, Florida Research Park, Lake Vista Pointe, Logan Tower,Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties contributed an additional $0.1 million, $0.1 million, $0.1 million, $0.1 million, $0.4 million, $0.4 million, $0.3 million and $0.1 million, in additional property operating expenses, respectively.

Acquisition Costs. Acquisition costs increased $1.4 million or 349% for the three month period ended September 30, 2015 compared to $0.4 million in the prior year. The acquisition costs in the 2015 period are related to the 190 Office Center and Intellicenter acquisitions whereas in the prior year period, the acquisition costs were related to Lake Vista.

Base Management Fee. Base Management Fee increased $0.1 million or 42%, to $0.3 million for the three month period ended September 30, 2015 compared to $0.2 million for the three months ended September 30, 2014 representing the fee paid to our Advisor. The increase in base management fee is primarily the result of the public offering completed in December 2014 which increased the Equity of the Company on which the base management fee is calculated.

Stock-Based Compensation. Stock-based compensation increased $0.1 million or 27% to $0.5 million for the three month period ended September 30, 2015 compared to $0.4 million for the three month period ended September 30, 2014. The increase is a result of the additional grant authorized by the Compensation Committee during its March 2015 meeting.

General and Administrative. General and administrative expenses remained unchanged at $0.4 million for the three month period ended September 30, 2015.

Depreciation and Amortization. Depreciation and amortization increased $1.8 million, or 45%, to $5.9 million for the three month period ended September 30, 2015 compared to $4.1 million for the same period in 2014, primarily due to the addition of the Plaza 25, Lake Vista Pointe, Florida Research Park, Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties.

Other Expense (Income)

Interest Expense, Net. Interest expense increased $1.0 million, or 48%, to $3.0 million for the three month period ended September 30, 2015, compared to $2.0 million for the corresponding period in 2014. The increase was primarily due to interest expense related to the property acquisitions described above. Interest expense of $0.2 million, $0.2 million, $0.2 million and $0.1 million respectively, due to interest expense associated with the Plaza 25, Florida Research Park, 190 Office Center and Intellicenter property debt and $0.3 million as a result of interest on the revolving line of credit.

Comparison of Nine Months Ended September 30, 2015 to Nine Months Ended September 30, 2014

The nine months ended September 30, 2015 includes our consolidated results whereas the comparable period in 2014 are the combined results which includes the City Office Predecessor from January 1, 2014 until April 20, 2014 and our results from April 21, 2014 through September 30, 2014 and accordingly may not be directly comparable due to the impact of the IPO and the Formation Transactions on April 21, 2014 and the absence of any public company and related costs prior to that time. In the discussion below, we have highlighted the impact of the IPO and Formation Transactions where applicable.

Revenue

Total Revenue. Revenue includes net rental income, including parking, signage and other income, as well as the recovery of operating costs and property taxes from tenants. Total revenues increased $11.1 million, or 42%, to $37.5 million for the nine month period ended September 30, 2015 compared to $26.4 million in the corresponding period in 2014. Revenue in 2015 increased by $1.8 million from the acquisition of the Plaza 25 property in June 2014, $2.0 million from the acquisition of the Lake Vista Pointe property in July 2014 and $2.2 million from the acquisition of Florida Research Park in November 2014, $1.0 million from the acquisition of Logan Tower in February 2015, $1.0 million from the acquisition of Superior Pointe in June 2015, $1.1 million from the acquisition of DTC Crossroads in June 2015, $0.6 million from the acquisition of 190 Office Center in September 2015 and $0.4 million from the acquisition of Intellicenter in September 2015. City Center and Central Fairwinds increased total revenues by $0.7 million and $0.3 million, respectively due to the increased occupancy at the property over the prior year period. AmberGlen, Corporate Parkway, Washington Group Plaza and Cherry Creek revenues were relatively unchanged in comparison to the prior year.

Rental Income. Rental income includes net rental income, income from a ground lease and lease termination income. Total rental income increased $8.8 million, or 37%, to $32.8 million for the nine month period ended September 30, 2015 compared to $24.0 million for the nine months ended September 30, 2014. The increase in rental income was primarily due to the acquisitions described above. The acquisition of the Plaza 25, Lake Pointe Vista, Florida Research Park, Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties contributed an additional $1.6 million, $1.3 million, $1.9 million, $0.9 million, $0.6 million, $1.1 million, $0.5 million and $0.4 million in rental income, respectively to the 2015 period rental income. City Center and increased total rental income by $0.5 million due to the increased occupancy at the property over the prior year period.

Expense Reimbursement. Total expense reimbursement increased $1.9 million, or 108%, to $3.7 million for the nine month period ended September 30, 2015 compared to $1.8 million for the same period in 2014, primarily due to the acquisitions described above.

Other. Other revenue includes parking, signage and other miscellaneous income. Total other revenues increased $0.3 million, or 58%, to $0.9 million for the nine month period ended September 30, 2015 compared to $0.6 million for the same period in 2014. Nominal other income was generated by City Center, Central Fairwinds, Plaza 25, Logan Tower and DTC Crossroads with the largest contribution from City Center parking income.

Operating Expenses

Total Operating Expenses. Total operating expenses consist of property operating expenses, as well as acquisition costs, base management fees, stock-based compensation, external advisor acquisition costs, general and administrative expenses and depreciation and amortization. Total operating expenses increased by $11.0 million, or 45%, to $35.3 million for the nine month period ended September 30, 2015, from $24.3 million for the same period in 2014, primarily due to the acquisitions described above. Total operating expenses increased by $1.7 million, $1.4 million, $1.3 million, $1.1 million, $1.2 million, $1.0 million, $1.0 million and $0.7 million, respectively, from the acquisition of the Plaza 25 property in June 2014, the acquisition of the Lake Vista Pointe property in July 2014, the acquisition of Florida Research Park property in November 2014, the acquisition of the Logan Tower property in February 2015, the Superior Pointe acquisition in June 2015, the DTC Crossroads acquisition in June 2015, the 190

Center acquisition in September 2015 and IntelliCenter acquisition in September 2015. AmberGlen, Central Fairwinds, Corporate Parkway, Washington Group Plaza and Cherry Creek operating expenses were relatively unchanged in comparison to the prior year. The nine month period ended September 30, 2015 also includes $0.2 million of costs related to the acquisition of the external advisor. The remaining increase relates to acquisition costs, stock-based compensation, base management fees and general and administrative expenses following the closing of the IPO and Formation Transactions on April 21, 2014.

Property Operating Expenses. Property operating expenses are comprised mainly of building common area and maintenance expenses, insurance, property taxes, property management fees, as well as certain expenses that are not recoverable from tenants, the majority of which are related to costs necessary to maintain the appearance and marketability of vacant space. In the normal course of business, property expenses fluctuate and are impacted by various factors including, but not limited to, occupancy levels, weather, utility costs, repairs, maintenance and re-leasing costs. Property operating expenses increased $3.6 million, or 35%, to $13.8 million for the nine month period ended September 30, 2015 from $10.2 million for the same period in 2014. The increase in property operating expenses was primarily due to the acquisitions described above. The acquisition of the Plaza 25, Florida Research Park, Lake Vista Pointe, Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties contributed an additional $1.0 million, $0.7 million, $0.3 million, $0.4 million, $0.4 million, $0.4 million, $0.3 million and $0.1 million in additional property operating expenses, respectively.

Acquisition Costs. Acquisition costs increased $1.3 million, or 87%, to $2.9 million for the nine month period ended September 30, 2015 compared to $1.6 million for the nine months ended September 30, 2014. The acquisition costs in the 2015 period are related to the Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter acquisitions whereas in the prior year period, the acquisition costs were primarily related to Cherry Creek, Plaza 25 and Lake Vista Pointe.

Base Management Fee. Base Management Fee increased $0.6 million or 138%, to $1.0 million for the nine month period ended September 30, 2015 compared to $0.4 million for the nine months ended September 30, 2014 representing the fee paid to our Advisor. No management fees were payable by the Predecessor for the 2014 period prior to the IPO and the Formation Transactions in April 2014.

Stock-Based Compensation. Stock-based compensation increased $0.7 million or 110% to $1.4 million for the nine month period ended September 30, 2015 compared to $0.7 million for the nine month period ended September 30, 2014 representing the amortization of the management equity grants issued as part of the Formation Transactions, upon completion of the IPO on April 21, 2014.

General and Administrative. General and administrative expenses increased $0.5 million or 60% to $1.3 million for the nine month period ended September 30, 2015 compared to $0.8 million for the nine month period ended September 30, 2014 representing public company costs following completion of the IPO. The Predecessor did not have any general and administrative costs.

Depreciation and Amortization. Depreciation and amortization increased $4.2 million, or 39%, to $14.8 million for the nine month period ended September 30, 2015 compared to $10.6 million for the same period in 2014, primarily due to the addition of the Plaza 25, Lake Vista Pointe, Florida Research Park, Logan Tower, Superior Pointe, 190 Office Center and Intellicenter properties.

Other Expense (Income)

Interest Expense, Net. Interest expense decreased $1.3 million, or 15%, to $7.5 million for the nine month period ended September 30, 2015, compared to $8.8 million for the corresponding period in 2014. The decrease was a result of the refinancing of property level debt which occurred upon completion of the IPO and Formation Transactions which resulted in a loss on early extinguishment of certain debts and a corresponding decrease in the interest rate of the new debt. Property level interest expense decreased by $1.8 million and $0.7 million respectively due to the refinancing of three properties with a new $95 million non-recourse loan in connection with the IPO, and the AmberGlen refinancing. Property level interest expense decreased by a further $0.3 million due to the repayment of the Central Fairwinds property debt. Amortization of deferred financing fees decreased

$0.9 million over the prior period due to the accelerated amortization on the Cherry Creek bridge loan incurred by the City Office Predecessor. Offsetting the decrease was an increase to interest expense of $0.2 milion, $0.5 million, $0.6 million, $0.2 million and $0.1 million respectively, due to interest expense associated with the Plaza 25, Lake Pointe Vista, Florida Research Park, 190 Office Center and Intellicenter property debt and $0.1 million as a result of interest on the revolving line of credit.

Gain on Equity Investment. Gain on equity investment is related to the purchase in January 2014 of the remaining 57.7% of Cherry Creek property that the Predecessor did not already own. As a result of this transaction, a gain of $4.5 million was recorded in the 2014 period.

Cash Flows

Comparison of Period Ended September 30, 2015 to Period Ended September 30, 2014

Cash and cash equivalents were $10.5 million and $8.9 million as of September 30, 2015 and September 30, 2014, respectively.

Cash flow from operating activities. Net cash provided by operating activities increased by $6.5 million to $12.5 million for the nine months ended September 30, 2015 compared to $6.0 million for the same period in 2014. The increase was primarily attributable to an increase in operating cash flows from new acquisitions.

Cash flow to investing activities. Net cash used in investing activities increased by $107.5 million to $173.1 million for the nine months ended September 30, 2015 compared to $65.6 million for the same period in 2014. The net cash used in investing activities in the 2015 period was used to acquire the Logan Tower, Superior Pointe, DTC Crossroads, 190 Office Center and Intellicenter properties and enhance capital assets.

Cash flow from financing activities. Net cash from financing activities increased by $74.9 million to $136.3 million for the nine months ended September 30, 2015 compared to a $61.4 million for the same period in 2014. Cash flow from financing activities increased primarily due to the Plaza 25, 190 Office Center and Intellicenter mortgage loan and borrowings from the Secured Credit Facility.

Liquidity and Capital Resources

Analysis of Liquidity and Capital Resources

We had approximately $10.5 million of cash and cash equivalents and $17.4 million of restricted cash as of September 30, 2015. In addition, we had drawn $50 million from the Revolving Credit Facility. On July 14, 2015, the authorized borrowing capacity increased from $35 million to $75 million.

Our short-term liquidity requirements primarily consist of operating expenses and other expenditures associated with our properties, distributions to our limited partners and distributions to our stockholders required to qualify for REIT status, capital expenditures and, potentially, acquisitions. We expect to meet our short-term liquidity requirements through net cash provided by operations, reserves established from existing cash and borrowings under our Secured Credit Facility.

Our long-term liquidity needs consist primarily of funds necessary for the repayment of debt at maturity, property acquisitions and non-recurring capital improvements. We expect to meet our long-term liquidity requirements with net cash from operations, long-term secured and unsecured indebtedness and the issuance of equity and debt securities. We also may fund property acquisitions and non-recurring capital improvements using our Secured Credit Facility pending longer term financing.

We believe we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity securities. However, we cannot assure you that this is or will continue to be the case. Our ability to incur additional debt is dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. Our ability to access the equity capital markets is dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us.

Consolidated Indebtedness as of September 30, 2015

As of September 30, 2015, we had approximately $344.9 million of outstanding consolidated indebtedness, $280.9 million of which is fixed rate debt. The following table sets forth information as of September 30, 2015 with respect to our outstanding indebtedness (in thousands).


Debt	September 30, 2015		Interest Rate as of September 30, 2015			Maturity Date
Intellicenter Term Loan ⁽¹⁾	$	14,000		LIBOR⁽²⁾ +6.00	%	September 2016
Revolving Credit Facility ⁽³⁾		50,000		LIBOR⁽²⁾ +2.25	%	June 2018
Washington Group Plaza⁽⁴⁾		33,836		3.85		July 2018
AmberGlen Mortgage Loan⁽⁵⁾		24,838		4.38		May 2019
Midland Life Insurance ⁽⁶⁾		95,000		4.34		May 2021
Lake Vista Pointe ⁽⁴⁾		18,460		4.28		August 2024
Florida Research Park⁽⁴⁾⁽⁷⁾		17,000		4.44		Dec 2024
Plaza 25^{(4) (8)}		17,000		4.10		July 2025
190 Office Center ⁽⁹⁾		41,250		4.79		September 2025
Intellicenter⁽¹⁰⁾		33,562		4.65		September 2025

Total	$	344,946

(1)

(2)

As of September 30, 2015, the one month LIBOR rate was 0.20%.

(3)

At September 30, 2015 the Revolving Credit Facility had $50 million authorized and drawn. In addition, the Revolving Credit Facility has an accordion feature that will permit us to borrow up to $150 million, subject to additional collateral availability and lender approval. The Credit Agreement has a maturity date of June 26, 2018, which may be extended to June 26, 2019 at the Company’s option upon meeting certain conditions. The Revolving Credit Facility requires us to maintain a fixed charge coverage ratio of no less than 1.60x. At September 30, 2015, the Revolving Credit Facility is cross-collateralized by Central Fairwinds, Logan Tower, Superior Pointe and DTC Crossroads. On July 14, 2015, the Company entered into an Amendment and Joinder to its Amended and Restated Credit Agreement which increased the authorized borrowing capacity under the Credit Agreement from $35 million to $75 million.

(4)

Interest on mortgage loan is payable monthly plus principal based on 360 months of amortization.

(5)

We are required to maintain a minimum net worth of $25 million and a minimum liquidity of $2 million.

(6)

(7)

We are required to maintain a minimum net worth of $17 million, minimum liquidity of $1.7 million and a debt service coverage ratio of no less than 1.15x.

(8)

We are required to maintain a debt service coverage ratio of no less than 1.45x.

(9)

We are required to maintain a debt service coverage ratio of no less than 1.15x.

(10)

We are required to maintain a debt service coverage ratio of no less than 1.20x.

Contractual Obligations and Other Long-Term Liabilities

The following table provides information with respect to our commitments as of September 30, 2015, including any guaranteed or minimum commitments under contractual obligations. The table does not reflect available debt extension options.


	Payments Due by Period (in thousands)
Contractual Obligation	Total		2015		2016-2017		2018-2019		More than 5 years
Principal payments on debt	$	344,946	$	276	$	19,070	$	111,790	$	213,810
Interest payments		84,726		2,795		24,581		21,676		35,674
Tenant-related commitments⁽¹⁾		11,975		4,184		6,691		1,100		—

Total	$	441,647	$	7,255	$	50,342	$	134,566	$	249,484

(1)	Consists principally of commitments for tenant improvements.

Off-Balance Sheet Arrangements

As of September 30, 2015, we did not have any off-balance sheet arrangements.

Inflation

Substantially all of our office leases provide for real estate tax and operating expense escalations. In addition, most of the leases provide for fixed annual rent increases. We believe that inflationary increases may be at least partially offset by these contractual rent increases and expense escalations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We have used, and will use, derivative financial instruments to manage or hedge interest rate risks related to borrowings. We do not use derivatives for trading or speculative purposes and only enter into contracts with major financial institutions based upon their credit rating and other factors. We have entered, and we will only enter into, contracts with major financial institutions based on their credit rating and other factors. As of September 30, 2015 and December 31, 2014, our Company did not have any outstanding derivatives.

As of September 30, 2015, approximately $280.9 million, or 81.4%, of our debt had fixed interest rates and approximately $64.0 million, or 18.6%, had variable interest rates. The variable rate indebtedness relates to borrowings under the Secured Credit Facility and the Intellicenter Term Loan.

The variable rate component of our consolidated indebtedness is LIBOR-based. Assuming no increase in the amount of our variable rate debt as of September 30, 2015, if LIBOR were to increase by 100 basis points, the increase in interest expense on our variable rate debt would decrease our future earnings and cash flows by approximately $0.6 million annually. If LIBOR were to decrease by 100 basis points, interest expense on our variable rate debt would decrease by approximately $0.6 million annually.

The primary market risk to which we are exposed is interest rate risk. Our primary interest rate exposure is LIBOR. We primarily use fixed interest rate financing to manage our exposure to fluctuations in interest rates.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the rules and regulations of the SEC and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We have carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and

procedures as of September 30, 2015, the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer have concluded, as of September 30, 2015, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

No changes to our internal control over financial reporting were identified in connection with the evaluation referenced above that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This quarterly report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm due to a transition period established by the rules of the Securities and Exchange Commission for newly public companies.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We and our subsidiaries are, from time to time, parties to litigation arising from the ordinary course of their business. Our management does not believe that any such litigation will materially affect our financial position or operations.

Item 1A. Risk Factors

We cannot assure you that we will be able to complete an internalization of our management (the “Internalization”) pursuant to the Stock Purchase Agreement (as defined below), or that the final terms of the Internalization will be consistent with our current expectations, either of which could materially adversely affect our business, financial condition and results of operations.

On November 2, 2015, we and one of our newly-formed subsidiaries (“Buyer Sub”) entered into a Stock Purchase Agreement (“Stock Purchase Agreement”) with certain stockholders of our Advisor, and two personal holding companies that own stock of the Advisor, pursuant to which we expect Buyer Sub will acquire all of the outstanding stock of the Advisor and we will transition from an externally managed company to an internally managed company. The Internalization is scheduled to close on February 1, 2016. Pursuant to the Stock Purchase Agreement, on February 1, 2016 we expect to issue 297,321 shares of our common stock to the sellers, which include our three executive officers and Samuel Belzberg, a member of our Board of Directors. In addition, we expect to make cash payments (“Earn-out Payments”) to the sellers of up to $3.5 million pursuant to the Stock Purchase Agreement if our fully diluted market capitalization reaches the following thresholds prior to December 31, 2016: $1 million upon achieving a $200 million fully diluted market capitalization, an additional $1 million upon achieving a $225 million fully diluted market capitalization and an additional $1.5 million upon achieving a $250 million fully diluted market capitalization (in each case, including in the calculation of fully diluted market capitalization the value of common units held by parties other than us at a value per unit equal to the market price of our common stock).

In connection with the closing of Internalization, we expect that one of our subsidiaries will enter into an Administrative Services Agreement (the “Administrative Services Agreement”) with entities that manage real estate investment funds affiliated with Second City Capital II Corporation and Second City Real Estate II Corporation (the “Second City funds”). Our executive officers and one of our directors, Samuel Belzberg, are officers of the general partners of the Second City funds and own equity interests in the Second City funds. We expect that the Administrative Services Agreement will have a three year term. Pursuant to the Administrative Services Agreement, we expect that one of our subsidiaries will provide various administrative services and support to the entities managing the Second City funds. We expect that this subsidiary will receive annual payments for these services under the Administrative Services Agreement (“Service Payments”) as follows: first 12 months—$1.5 million, second 12 months—$1.125 million and third 12 months—$0.625 million, for a total of $3.25 million over the three-year term. In addition, following the expiration of the three year term of the Administrative Services Agreement, we expect to make Messrs. Farrar and Tylee available to assist the Second City funds with respect to certain matters.

We cannot assure you that we will be able to close on the acquisition of our Advisor pursuant to the Stock Purchase Agreement. We cannot be certain if we will become obligated to make any or all of the Earn-out Payments under the Stock Purchase Agreement, and we cannot guarantee that we will be able to collect the Service Payments pursuant to the Administrative Services Agreement. We may not be able to retain all of the current employees of our Advisor or our executive officers upon Internalization. Our general and administrative expenses after the Internalization could be higher than our current expectations. Any of these foregoing risks could materially adversely affect our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits


Exhibit number		Description

3.1		Articles of Amendment and Restatement of the Registrant (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 10-Q filed with the Commission on May 23, 2014)

3.2		Articles Supplementary (incorporated by reference to Exhibit 3.1.1 of the Company’s Current Report on Form 8-K filed with the Commission on March 25, 2015)

3.3		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 10-Q filed with the Commission on May 23, 2014)

3.4		First Amendment to Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the Commission on March 25, 2015)

10.1		Credit Agreement, dated September 2, 2015, between City Office REIT Operating Partnership, L.P., and KeyBank National Association.†

10.2		Loan Agreement, dated September 3, 2015, between CIO 190, Limited Partnership, and CIBC Inc. †

10.3		Loan Agreement, dated September 3, 2015, between CIO Intellicenter, Limited Partnership and KeyBank National Association.†

10.4		First Amendment and Joinder to Amended and Restated Credit Agreement, dated July 14, 2015 among City Office REIT Operating Partnership, L.P. and certain of its subsidiaries, City Office REIT, Inc., the Lenders named therein, and Key Bank National Association, as agent for the lenders. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 17, 2015)

10.5		Promissory Note, dated July 14, 2015, by City Office REIT Operating Partnership, L.P. and certain of its subsidiaries, to BMO Harris Bank, N.A. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 17, 2015).

10.6		Promissory Note, dated July 14, 2015, by City Office REIT Operating Partnership, L.P. and certain of its subsidiaries, to the Royal Bank of Canada. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 17, 2015).



31.01		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†

31.02		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†

32.01		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†

32.02		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†

101.INS		INSTANCE DOCUMENT*

101.SCH		SCHEMA DOCUMENT*

101.CAL		CALCULATION LINKBASE DOCUMENT*

101.LAB		LABELS LINKBASE DOCUMENT*

101.PRE		PRESENTATION LINKBASE DOCUMENT*

101.DEF		DEFINITION LINKBASE DOCUMENT*

†	Filed herewith.

Submitted electronically herewith. Attached as Exhibit 101 are the following materials formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated and Combined Balance Sheets as of September 30, 2015 and December 31, 2014; (ii) Consolidated and Combined Statements of Operations for three months ended September 30, 2015 and 2014; (iii) Condensed Consolidated and Combined Statements of Changes in Equity as of September 30, 2015; (iv) Combined Statements of Cash Flows for the three months ended September 30, 2015 and 2014; and (v) Notes to Condensed Consolidated and Combined Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CITY OFFICE REIT, INC.


Date: November 6, 2015

	By:	/s/ James Farrar
		James Farrar
		Chief Executive Officer
Date: November 6, 2015

	By:	/s/ Anthony Maretic
		Anthony Maretic
		Chief Financial Officer

Exhibit 10.1

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 2, 2015

BY AND AMONG

CITY OFFICE REIT, INC.,

AS BORROWER,

KEYBANK NATIONAL ASSOCIATION,

ANY OTHER LENDERS THAT MAY BECOME

PARTIES TO THIS AGREEMENT,

AND

KEYBANK NATIONAL ASSOCIATION,

AS AGENT

KEYBANC CAPITAL MARKETS,

AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER

TABLE OF CONTENTS


§1.	DEFINITIONS AND RULES OF INTERPRETATION.		1

	§1.1	Definitions	1
	§1.2	Rules of Interpretation.	15

§2.	THE CREDIT FACILITY.		16

	§2.1	The Facility	16
	§2.2	RESERVED	16
	§2.3	Notes	16
	§2.4	RESERVED.	16
	§2.5	RESERVED.	16
	§2.6	RESERVED.	16
	§2.7	Interest on Loan.	16
	§2.8	Use of Proceeds	17

§3.	REPAYMENT OF THE LOANS.		17

	§3.1	Stated Maturity	17
	§3.2	Mandatory Prepayments	17
	§3.3	Optional Prepayments	17
	§3.4	Partial Prepayments	17
	§3.5	Effect of Prepayments	17
	§3.6	Failure to Repay Within Nine Months; Amortization	17

§4.	CERTAIN GENERAL PROVISIONS.		18

	§4.1	Conversion Options	18
	§4.2	Fees	18
	§4.3	RESERVED.	18
	§4.4	Funds for Payments	18
	§4.5	Computations	20
	§4.6	Suspension of LIBOR Rate Loan	20
	§4.7	Illegality	21
	§4.8	Additional Interest	21
	§4.9	Additional Costs, Etc.	21
	§4.10	Capital Adequacy	22
	§4.11	Breakage Costs	22
	§4.12	Default Interest; Late Charge	22
	§4.13	Certificate	22
	§4.14	Limitation on Interest	22
	§4.15	Certain Provisions Relating to Increased Costs and Non-Funding Lenders	23

§5.	COLLATERAL SECURITY.		24

	§5.1	Collateral	24
	§5.2	Release of Collateral	24

§6.	REPRESENTATIONS AND WARRANTIES		24

	§6.1	Corporate Authority, Etc.	24
	§6.2	Governmental Approvals	25
	§6.3	Title to Real Estate	25
	§6.4	Financial Statements	25


	§6.5	No Material Changes	25
	§6.6	Franchises, Patents, Copyrights, Etc.	25
	§6.7	Litigation	25
	§6.8	No Material Adverse Contracts, Etc.	26
	§6.9	Compliance with Other Instruments, Laws, Etc.	26
	§6.10	Tax Status	26
	§6.11	No Event of Default	26
	§6.12	Investment Company Act	26
	§6.13	Absence of UCC Financing Statements, Etc.	26
	§6.15	Certain Transactions	27
	§6.16	Employee Benefit Plans	27
	§6.17	Disclosure	27
	§6.18	Trade Name; Place of Business	27
	§6.19	Regulations T, U and X	28
	§6.20	Environmental Compliance	28
	§6.21	Subsidiaries; Organizational Structure	29
	§6.22	RESERVED	29
	§6.23	RESERVED	29
	§6.24	Brokers	29
	§6.25	Other Debt	29
	§6.26	Solvency	29
	§6.27	No Bankruptcy Filing	29
	§6.28	No Fraudulent Intent	30
	§6.29	Transaction in Best Interests of the Borrower; Consideration	30
	§6.30	OFAC	30

§7.	AFFIRMATIVE COVENANTS		30

	§7.1	Punctual Payment	30
	§7.2	Maintenance of Office	30
	§7.3	Records and Accounts	30
	§7.4	Financial Statements, Certificates and Information	31
	§7.5	Notices.	32
	§7.6	Existence; Maintenance of Properties.	33
	§7.7	Insurance	33
	§7.8	Taxes; Liens	33
	§7.9	Inspection of Books	34
	§7.10	Compliance with Laws, Contracts, Licenses, and Permits	34
	§7.11	Further Assurances	34
	§7.12	RESERVED	35
	§7.13	RESERVED	35
	§7.14	Business Operations	35
	§7.15	RESERVED.	35
	§7.16	Ownership of Real Estate	35
	§7.17	RESERVED	35
	§7.18	Plan Assets	35
	§7.19	Further Covenants	35
	§7.20	RESERVED	35
	§7.21	Borrower	35

§8.	NEGATIVE COVENANTS		36

	§8.1	Restrictions on Indebtedness	36


	§8.2	Restrictions on Liens, Etc.	36
	§8.3	Restrictions on Investments.	37
	§8.4	Merger, Consolidation	39
	§8.5	RESERVED.	39
	§8.6	Compliance with Environmental Laws	39
	§8.7	Distributions	40
	§8.8	Asset Sales	40
	§8.9	RESERVED	40
	§8.10	Restriction on Prepayment of Indebtedness	40
	§8.11	Derivatives Contracts	40
	§8.12	Transactions with Affiliates	40
	§8.13	Management Fees	40

§9.	FINANCIAL COVENANTS		41

	§9.1	Maximum Leverage Ratio	41
	§9.2	Minimum Liquidity	41
	§9.3	Minimum Fixed Charge Coverage Ratio	41
	§9.4	Minimum Tangible Net Worth	41
	§9.5	Interest Rate Protection	41

§10.	CLOSING CONDITIONS		41

	§10.1	Loan Documents	41
	§10.2	Certified Copies of Organizational Documents	41
	§10.3	Resolutions	41
	§10.4	Incumbency Certificate; Authorized Signers	41
	§10.5	Opinion of Counsel	42
	§10.6	Payment of Fees	42
	§10.7	Performance; No Default	42
	§10.8	Representations and Warranties	42
	§10.9	Proceedings and Documents	42
	§10.10	Representations True; No Default	42
	§10.11	Compliance Certificate	42
	§10.12	Consents	42
	§10.13	Other	42

§11.	RESERVED.		43

§12.	EVENTS OF DEFAULT; ACCELERATION; ETC.		43

	§12.1	Events of Default and Acceleration	43
	§12.2	RESERVED	45
	§12.3	RESERVED	45
	§12.4	Remedies	45
	§12.5	Distribution of Collateral Proceeds	45

§13.	SETOFF		46

§14.	THE AGENT.		46

	§14.1	Authorization	46
	§14.2	Employees and Agents	46
	§14.3	No Liability	47
	§14.4	No Representations	47
	§14.5	Payments	47

iii


	§14.6	Holders of Notes	48
	§14.7	Indemnity	48
	§14.8	Agent as Lender	48
	§14.9	Resignation	48
	§14.10	Duties in the Case of Enforcement	48
	§14.11	Bankruptcy	49
	§14.12	RESERVED	49
	§14.13	Reliance by the Agent	49
	§14.14	Approvals	49
	§14.15	Borrower Not Beneficiary	50
	§14.16	Defaulting Lenders.	50
	§14.17	Reliance on Hedge Provider	51

§15.	EXPENSES		51

§16.	INDEMNIFICATION		52

§17.	SURVIVAL OF COVENANTS, ETC.		52

§18.	ASSIGNMENT AND PARTICIPATION.		53

	§18.1	Conditions to Assignment by the Lenders	53
	§18.2	Register	53
	§18.3	New Notes	53
	§18.4	Participations	54
	§18.5	Pledge by Lender	54
	§18.6	No Assignment by the Borrower	55
	§18.7	Disclosure	55
	§18.8	Titled Agents	55
	§18.9	Amendments to Loan Documents	55

§19.	NOTICES		55

§20.	RELATIONSHIP		56

§21.	GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE		56

§22.	HEADINGS		56

§23.	COUNTERPARTS		56

§24.	ENTIRE AGREEMENT, ETC.		57

§25.	WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS		57

§26.	DEALINGS WITH BORROWER		57

§27.	CONSENTS, AMENDMENTS, WAIVERS, ETC		57

§28.	SEVERABILITY		58

§29.	TIME OF THE ESSENCE		58

§30.	NO UNWRITTEN AGREEMENTS		58

§31.	REPLACEMENT NOTES		58

§32.	NO THIRD PARTIES BENEFITED		58

§33.	PATRIOT ACT		59

§34.	RESERVED.		59


§35.	LIABILITY		59

§36. ADDITIONAL AGREEMENTS CONCERNING OBLIGATIONS OF THE BORROWER AND THE PLEDGOR.			59

	§36.1	Attorney-in-Fact	59
	§36.2	RESERVED.	59
	§36.3	Waiver of Automatic or Supplemental Stay	59
	§36.4	Waiver of Defenses	59
	§36.5	Waiver	61
	§36.6	Subordination	62

§37.	ACKNOWLEDGMENT OF BENEFITS; EFFECT OF AVOIDANCE PROVISIONS.		62

EXHIBITS AND SCHEDULES


Exhibit A		FORM OF LOAN NOTE

Exhibit B		RESERVED

Exhibit C		RESERVED

Exhibit D		RESERVED

Exhibit E		RESERVED

Exhibit F		RESERVED

Exhibit G		FORM OF COMPLIANCE CERTIFICATE

Exhibit H		FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

Exhibit I		RESERVED

Schedule 1.1		LENDERS AND COMMITMENTS

Schedule 1.2		RESERVED

Schedule 6.3		LIST OF ALL ENCUMBRANCES ON ASSETS

Schedule 6.5		NO MATERIAL CHANGES

Schedule 6.7		PENDING LITIGATION

Schedule 6.15		CERTAIN TRANSACTIONS

Schedule 6.20(d)		RESERVED

Schedule 6.21		SUBSIDIARIES

Schedule 6.23		PROPERTY

Schedule 8.8		RESERVED

Schedule 19		NOTICE ADDRESSES

CREDIT AGREEMENT

THIS CREDIT AGREEMENT is made as of the 2^nd day of September, 2015 (the “Agreement”), by and among City Office REIT, Inc., a Maryland corporation (“Borrower”), CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited partnership (“Pledgor”), KEYBANK NATIONAL ASSOCIATION (“KeyBank”), any other lending institutions that may become parties hereto pursuant to §18 (collectively, together with KeyBank “Lenders”), and KEYBANK NATIONAL ASSOCIATION, as administrative agent for Lenders (“Agent”), and KEYBANC CAPITAL MARKETS, as Sole Lead Arranger and Sole Book Manager.

R E C I T A L S

WHEREAS, the Borrower has requested that the Lenders make a bridge Loan to the Borrower for the purposes set forth herein (the “Loan”, as hereinafter further defined); and

WHEREAS, the Lenders are willing to lend funds upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the recitals herein and mutual covenants and agreements contained herein, the parties hereto hereby covenant and agree as follows:

§1. DEFINITIONS AND RULES OF INTERPRETATION.

§1.1 Definitions. The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Agreement referred to below:

Adjusted EBITDA. On any date of determination, the sum of (1) the EBITDA for the prior fiscal quarter most recently ended, multiplied by four (4), less (b) the Capital Reserve.

Advisor. City Office Real Estate Management Inc.

Affiliate. An Affiliate, as applied to any Person, shall mean any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means (a) the possession, directly or indirectly, of the power to vote more than fifty percent (50%) of the stock, shares, voting trust certificates, beneficial interest, partnership interests, member interests or other interests having voting power for the election of directors of such Person or otherwise to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise, or (b) the ownership of (i) a general partnership interest, (ii) a managing member’s or manager’s interest in a limited liability company or (iii) a limited partnership interest or preferred stock (or other ownership interest) representing more than fifty percent (50%) of the outstanding limited partnership interests, preferred stock or other ownership interests of such Person.

Agent. KeyBank National Association, acting as administrative agent for the Lenders, and its successors and assigns.

Agent’s Head Office. The Agent’s head office located at 127 Public Square, Cleveland, Ohio 44114-1306, or at such other location as the Agent may designate from time to time by notice to the Borrower and the Lenders.

Agent’s Special Counsel. Riemer & Braunstein LLP, or such other counsel as selected by Agent.

Agreement. This Credit Agreement, as the same may be amended, modified, supplemented and/or extended from time to time, including the Schedules and Exhibits hereto.

Agreement Regarding Fees. See §4.2.

Applicable Margin. The Applicable Margin for LIBOR Rate Loans shall be 6.00% and the Applicable Margin for Base Rate Loans shall be 5.00%.

Approved Fund. Any Fund that is administered or managed by (a) a Lender, or (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

Arranger. KeyBanc Capital Markets or any successors thereto.

Assignment and Acceptance Agreement. See §18.1.

Authorized Officer. Any of the following Persons: Jamie Farrar, Tony Maretic, Greg Tylee and such other Persons as the Borrower shall designate in a written notice to Agent.

Balance Sheet Date. [December 31, 2014].

Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or any successor statute thereto.

Base Rate. The greatest of (a) the fluctuating annual rate of interest announced from time to time by the Agent at the Agent’s Head Office as its “prime rate”, and (b) one half of one percent (0.50%) above the Federal Funds Effective Rate. The Base Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer. Any change in the rate of interest payable hereunder resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate becomes effective, without notice or demand of any kind.

Base Rate Loans. Loans bearing interest calculated by reference to the Base Rate.

Borrower. As defined in the preamble hereto.

Breakage Costs. The commercially reasonable cost to any Lender of re-employing funds bearing interest at LIBOR incurred (or reasonably expected to be incurred during such Interest Period) in connection with (i) any payment of any portion of the Loans bearing interest at LIBOR prior to the termination of any applicable Interest Period, or (ii) the conversion of a LIBOR Rate Loan to any other applicable interest rate on a date other than the last day of the relevant Interest Period.

Building. With respect to each parcel of Real Estate, all of the buildings, structures and improvements now or hereafter located thereon

Business Day. Any day on which banking institutions located in the same city and State as the Agent’s Head Office is located are open for the transaction of banking business and, in the case of LIBOR Rate Loans, which also is a LIBOR Business Day.

Capital Lease Obligations. With respect to the Borrower and its Subsidiaries for any period, the obligations of the Borrower or any Subsidiary to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as liabilities on a balance sheet of the Borrower and its Subsidiaries under GAAP and the amount of which obligations shall be the capitalized amount thereof determined in accordance with GAAP.

Capital Reserve. On an annual basis, an amount equal to $0.40 per square foot. The Capital Reserve shall be calculated based on the total rentable square footage of the Buildings owned (or ground leased) at the end of each fiscal quarter, less the square footage of unoccupied space held for development or redevelopment.

Cash Equivalents. As of any date, (i) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from such date, (ii) time deposits and certificates of deposits having maturities of not more than one year from such date and issued by any domestic commercial bank having, (A) senior long term unsecured debt rated at least A or the equivalent thereof by S&P or A2 or the equivalent thereof by Moody’s and (B) capital and surplus in excess of $100,000,000; and (iii) shares of any money market mutual fund rated at least AAA or the equivalent thereof by S&P or at least AAA or the equivalent thereof by Moody’s.

CERCLA. The Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq.

Change in Law. The occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

Change of Control. A Change of Control shall exist upon the occurrence of any of the following:

(a) During any twelve month period on or after the date of this Agreement, individuals who at the beginning of such period constituted the Board of Directors or Trustees of the Borrower (the “Board”) (together with any new directors whose election by the Board or whose nomination for election by the shareholders of the Borrower was approved by a vote of at least a majority of the members of the Board then in office who either were members of the Board at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Borrower then in office;

(b) Any Person (including a Person’s Affiliates and associates) or group (as that term is understood under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations thereunder), shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of a percentage (based on voting power, in the event different classes of stock or voting interests shall have different voting powers) of the voting stock or voting interests of the Borrower equal to at least twenty percent (20%) who did not hold such beneficial ownership as of the date of this Agreement;

(c) Borrower shall fail to own at least fifty five percent (55%) of the limited partner Equity Interests of the Pledgor and own and control the general partner of the Pledgor, shall fail to own such interests in the Pledgor free of any lien, encumbrance or other adverse claim, or shall fail to control (along with City Office Real Estate Management, Inc., through an advisory agreement) the management and policies of the Pledgor;

(d) the Borrower or the Pledgorconsolidates with, is acquired by, or merges into or with any Person (other than a merger permitted by Section 8.4); or

(e) the Pledgor fails to own, directly or indirectly, free and clear of any Liens, 100% of the ownership interests in the Intellicenter Property.

Closing Date. The date agreed to by the parties hereto on which all of the conditions set forth in §10 have been satisfied and the Loan is advanced in accordance with the terms hereof.

Code. The Internal Revenue Code of 1986, as amended.

Collateral. All of the property, rights and interests of the Borrower and the Pledgor that are subject to the security interests, security title, liens and pledges created by the Security Documents, which Collateral shall include a pledge of 49% of the Equity Interests in the Subsidiary which is acquiring the Intellicenter Property, such pledge to be delivered on a post closing basis upon the expiration of any required notice requirements under the Property Loan Documents with respect thereto.

Commitment. As to each Lender, the amount set forth on Schedule 1.1 hereto as such Lender’s commitment to fund the Loan in accordance with the terms of this Agreement.

Commitment Percentage. With respect to each Lender, the percentage set forth on Schedule 1.1 hereto as such Lender’s percentage of the aggregate Commitments of all of the Lenders, as the same may be changed from time to time in accordance with the terms of this Agreement.

Competitor. Any Person that is a competitor with the Borrower or the Pledgor in acquiring and investing in assets similar to those of the Borrower, the Pledgor and their Subsidiaries, excluding any commercial or investment banking institution regulated by any governmental entity.

Compliance Certificate. See §7.4(c).

Consolidated. With reference to any term defined herein, that term as applied to the accounts of a Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

Consolidated Leverage Ratio. The ratio of the Borrower’s Consolidated Indebtedness to Total Asset Value.

Conversion/Continuation Request. A notice given by the Borrower to the Agent of its election to convert or continue a Loan in accordance with §4.1.

Core Funds from Operations. As of any date of determination means, with respect to a Person and for a given period, (a) net income (loss) computed in accordance with GAAP of such person determined on a consolidated basis for such period minus (or plus) (b) gains (or losses) from debt restructuring, mark-to-market adjustments on interest rate swaps, and sales of property during such period, plus (c) depreciation with respect to such person’s real estate assets and amortization (other than amortization of deferred financing costs) of such person for such period, all after adjustment for unconsolidated partnerships and joint ventures, plus (d) all acquisition costs, loss on early extinguishment of debt, changes in the fair value of the earn out and the amortization of stock based compensation.

Credit Party(ies). Individually and collectively, the Borrower and the Pledgor.

Default. See §12.1.

Default Rate. See §4.12.

Defaulting Lender. Any Lender that, as determined by the Agent, (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loan, within three Business Days of the date required to be funded by it hereunder, unless such Lender is contesting its obligation to fund such amount in good faith, (b) has notified the Borrower, or the Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it has extended credit, (c) has failed, within three Business Days after request by the Agent, to confirm in a manner reasonably satisfactory to the Agent that it will comply with its funding obligations, unless such Lender is contesting its obligation to fund in good faith, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any bankruptcy or other debtor relief law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

Derivatives Contract. Any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement. Not in limitation of the foregoing, the term “Derivatives Contract” includes any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such master agreement.

Distribution. Any (a) dividend or other monetary distribution, direct or indirect, on account of any Equity Interest of the Borrower, now or hereafter outstanding, except a dividend or other distribution payable solely in Equity Interest to the holders of that class; (b) redemption, conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interest of the Borrower now or hereafter outstanding; and (c) payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests of the Borrower now or hereafter outstanding.

Dollars or $. Dollars in lawful currency of the United States of America.

Domestic Lending Office. Initially, the office of each Lender designated as such on Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, located within the United States that will be making or maintaining Base Rate Loan.

EBITDA. An amount derived from the following during any given period (a) net income, plus (b) to the extent included in the determination of net income, depreciation, amortization, interest expense (including any preferred dividends) and income taxes, plus (c) property acquisition fees plus or minus (d) to the extent included in the determination of net income, any extraordinary losses or gains, such as those resulting from sales or payment of Indebtedness but excluding straight-line rents and FAS 141 accruals or similar adjustments, in each case, as determined on a Consolidated basis in accordance with GAAP (unless otherwise indicated herein), and including (without duplication) the Equity Percentage of EBITDA for the Borrower’s non-wholly owned Affiliates.

Eligible Assignee. (a) A Lender; (b) an Affiliate of a Lender; (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Agent, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s or the Pledgor’s Affiliates or Subsidiaries, or unless an Event of Default is in existence, a Competitor; and provided further that it shall not be unreasonable to withhold consent if an assignee’s status would increase the costs to the Borrower or impose other restrictions on the Borrower.

Employee Benefit Plan. Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

Environmental Laws. All applicable past (which have current effect), present or future federal, state, county and local laws, by-laws, rules, regulations, codes and ordinances, or any judicial or administrative interpretations thereof, and the requirements of any governmental agency or authority having or claiming jurisdiction with respect thereto, applicable to the regulation or protection of the environment, the health and safety of persons and property and all other environmental matters and shall include, but not be limited to, all orders, decrees, judgments and rulings imposed through any public or private enforcement proceedings, relating to Hazardous Substances (as defined below) or the existence, use, discharge, release, containment, transportation, generation, storage, management or disposal thereof, or otherwise regulating or providing for the protection of the environment applicable to Real Estate and relating to Hazardous Substances, or to the existence, use, discharge, release or disposal thereof. Environmental Laws presently include, but are not limited to, the following laws: Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), the Public Health Service Act (42 U.S.C. §300(f) et seq.), the Pollution Prevention Act (42 U.S.C. §13101 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), the Federal Clean Water Act (33 U.S.C. §1251 et seq.), The Federal Clean Air Act (42 U.S.C. §7401 et seq.), and the applicable laws and regulations of each State in which any Real Estate is located.

Equity Interests. With respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person, any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

Equity Percentage. The aggregate ownership percentage of the Borrower or its Subsidiaries in each Affiliate.

ERISA. The Employee Retirement Income Security Act of 1974, as amended and in effect from time to time.

ERISA Affiliate. Any Person that is subject to ERISA and is treated as a single employer with the Borrower or its Subsidiaries under §414 of the Code.

ERISA Reportable Event. A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

Event of Default. See §12.1.

Facility Amount. Fourteen Million Dollars ($14,000,000).

Federal Funds Effective Rate. For any day, the rate per annum (rounded upward to the nearest one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of Cleveland on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate.”

Fixed Charge Ratio. The ratio of (a) Adjusted EBITDA to (b) all of the principal due and payable on the Indebtedness (other than amounts paid in connection with balloon maturities, refinancings, unscheduled principal payments or principal payments on the Loans), plus all Interest Expense, plus the aggregate of all cash dividends payable on any preferred stock, all based upon the immediately preceding calendar quarter (annualized).

Fund. Any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

GAAP. Generally accepted accounting principles consistently applied.

Governmental Authority. The government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

Guaranteed Pension Plan. Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Hazardous Substances. Mean and includes asbestos, flammable materials, explosives, radioactive or nuclear substances, polychlorinated biphenyls, other carcinogens, oil and other petroleum products, radon gas, urea formaldehyde, chemicals, gases, solvents, pollutants or contaminants that could be a detriment or pose a danger to the environment or to the health or safety of any person, and any other hazardous or toxic materials, wastes and substances which are defined, determined or identified as such in any past, present or future federal, state or local laws, by-laws, rules, regulations, codes or ordinances or any judicial or administrative interpretation thereof in concentrations which violate Environmental Laws except for such de minimus amounts used on Real Estate in the ordinary course of business in compliance with all applicable Environmental Laws.

Hedge Obligations. As may be applicable at any time, all obligations of the Borrower to any Lender Hedge Provider to make any termination payments under any Derivatives Contract with respect to an interest rate swap, collar, cap or floor or a forward rate agreement or other agreement regarding the hedging of interest rate risk exposure, and any confirming letter executed pursuant to such hedging agreement, all as amended, restated or otherwise modified.

Indebtedness. Without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, including mandatorily redeemable preferred stock, (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, fees paid under advisory agreements and other reasonable fees paid to affiliates), (f) all Indebtedness (excluding non-recourse carve-out guarantees until such time as the Borrower or the Pledgor is called upon to make payments under any of these guarantees, at which time such guarantees shall thereafter be included in the definition of Indebtedness to the extent of the actual liability thereunder) 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 in an amount equal to the lesser of such Indebtedness or the value of the encumbered property, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others (excluding non-recourse carve-out guarantees until such time as the Borrower or the Pledgor is called upon to make payments under any of these guarantees, at which time such guarantees shall thereafter be included in the definition of Indebtedness to the extent of the actual liability thereunder), (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, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) all currently payable obligations of such Person with respect to any Hedge Obligations. 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 therefore 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. Indebtedness shall be calculated on a consolidated basis in accordance with GAAP (unless otherwise indicated herein), and including (without duplication) the Equity Percentage of Indebtedness for the Pledgor’s non-wholly owned Affiliates.

Intellicenter Property. The real property consisting of the commercial office building and associated land located at 12653 and 12355 Telecom Drive, Temple Terrace, Florida.

Interest Expense. All paid, accrued or capitalized interest expense on such Person’s Indebtedness (whether direct, indirect or contingent, and including, without limitation, interest on all convertible debt), and including (without duplication) the Equity Percentage of Interest Expense for the Borrower’s non-Wholly Owned Affiliates.

Interest Payment Date. As to each Loan, the first day of each calendar month.

Interest Period. With respect to each LIBOR Rate Loan (a) initially, the period commencing on the Closing Date and ending one, two, or three months thereafter and (b) thereafter, each period commencing on the day following the last day of the next preceding Interest Period applicable to such Loan and ending on the last day of one of the periods set forth above, as selected by the Borrower in a Conversion/Continuation Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day that is not a LIBOR Business Day, such Interest Period shall end on the next succeeding LIBOR Business Day, unless such next succeeding LIBOR Business Day occurs in the next calendar month, in which case such Interest Period shall end on the next preceding LIBOR Business Day, as determined conclusively by the Agent in accordance with the then current bank practice in London, England;

(ii) if the Borrower shall fail to give notice as provided in §4.1, the Borrower shall be deemed to have requested a continuation of the affected LIBOR Rate Loan as a LIBOR Rate Loan for an interest period of one month on the last day of the then current Interest Period with respect thereto as provided in and subject to the terms of §4.1(c);

(iii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the applicable calendar month; and

(iv) no Interest Period relating to a LIBOR Rate Loan shall extend beyond the Maturity Date, as applicable.

Interpolated Rate. At any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Rate for the longest period for which the LIBO Rate is available that is shorter than the Impacted Interest Period; and (b) the LIBO Rate for the shortest period for which that LIBO Rate is available that exceeds the Impacted Interest Period, in each case, at such time.

Investments. With respect to any Person, all shares of capital stock, evidences of Indebtedness and other securities issued by any other Person and owned by such Person, all loans, advances, or extensions of credit to, or contributions to the capital of, any other Person, all purchases of the securities or business or integral part of the business of any other Person and commitments and options to make such purchases, all interests in real property, and all other investments; provided, however, that the term “Investments” shall not include (i) equipment, inventory and other tangible personal property acquired in the ordinary course of business, or (ii) current trade and customer accounts receivable for services rendered in the ordinary course of business and payable in accordance with customary trade terms. In determining the aggregate amount of Investments outstanding at any particular time: (a) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (b) there shall be deducted in respect of each Investment any amount received as a return of capital; (c) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (a) may be deducted when paid; and (d) there shall not be deducted in respect of any Investment any decrease in the value thereof.

KeyBank. As defined in the preamble hereto.

Leases. Leases, licenses and agreements, whether written or oral, relating to the use or occupation of space in or with respect to any Real Estate.

Legal Requirements shall mean all applicable federal, state, county and local laws, rules, regulations, codes and ordinances, and the requirements in each case of any governmental agency or authority having or claiming jurisdiction with respect thereto, including, but not limited to, those applicable to zoning, subdivision, building, health, fire, safety, sanitation, the protection of the handicapped, and environmental matters and shall also include all orders and directives of any court, governmental agency or authority having or claiming jurisdiction with respect thereto.

Lenders. KeyBank, the other lending institutions which are party hereto and any other Person which becomes an assignee of any rights of a Lender pursuant to §18 (but not including any participant as described in §18); individually each, a “Lender”.

Lender Hedge Provider. As may be applicable at any time with respect to any Hedge Obligations, any counterparty thereto that, at the time the applicable hedge agreement was entered into, was the Agent or an Affiliate of the Agent.

LIBOR. For any LIBOR Rate Loan for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for U.S. Dollars) for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Agent in its reasonable discretion; in each case the “LIBOR Screen Rate”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that (i) if the LIBOR Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the LIBOR Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”) then the LIBOR shall be the Interpolated Rate; provided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement, and (ii) if no such rate administered by ICE Benchmark Administration (or by such other Person that has taken over the administration of such rate for U.S. Dollars) is available to the Agent, the applicable LIBOR for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which KeyBank or one of its Affiliate banks offers to place deposits in U.S. dollars with first class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, in the approximate amount of the relevant LIBOR Rate Loan and having a maturity equal to such Interest Period. For any period during which a Reserve Percentage shall apply, LIBOR with respect to LIBOR Rate Loans shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

LIBOR Business Day. Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London, England.

LIBOR Lending Office. Initially, the office of each Lender designated as such on Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, that shall be making or maintaining LIBOR Rate Loans.

LIBOR Rate Loans. Loans bearing interest calculated by reference to LIBOR.

Lien. See §8.2.

Liquidity. The aggregate of (i) Unrestricted Cash and Cash Equivalents and (ii) marketable securities acceptable to the Agent in its reasonable discretion.

Loan(s). The Loan or any portion thereof made in accordance with the terms hereof in Dollars by Lenders to the Borrower on the Closing Date, in the Facility Amount.

Loan Documents. This Agreement, the Notes, the Security Documents, and all other documents, instruments or agreements now or hereafter executed or delivered by or on behalf of the Borrower or the Pledgor in connection with the Loan and intended to constitute a Loan Document.

Material Adverse Effect. A material adverse effect on (a) the business, properties, assets, financial condition or results of operations of the Borrower and its Subsidiaries in each case considered as a whole; (b) the ability of the Borrower (taken as a whole) to perform their material obligations under the Loan Documents; or (c) the validity or enforceability of any of the material Loan Documents or the material rights or remedies of the Agent or the Lenders thereunder.

Maturity Date. September 2, 2016, or such earlier date on which the Loan shall become due and payable pursuant to the terms hereof.

Moody’s. Moody’s Investor Service, Inc.

Multiemployer Plan. Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.

Net Operating Income. For any income producing Real Estate and for a given period, the difference between (a) any rentals, proceeds and other income received from such property during the determination period (excluding straight-line rents and FAS 141 accruals and similar adjustments), less (b) an amount equal to all costs and expenses (excluding Interest Expense, Taxes, depreciation and amortization expense, and any expenditures that are capitalized in accordance with GAAP) incurred as a result of, or in connection with, or properly allocated to, the operation or leasing of such property during the determination period (other than asset management fees); less (c) the Capital Expenditure Reserve; less (d) all rents, common area reimbursements and other income for such Real Estate received with respect to leases as to which (i) the tenant or any guarantor thereunder is subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such tenant has expressly assumed its obligations under the applicable lease in such proceeding, (ii) the tenant which has exercised any termination option or otherwise not renewed its lease with a termination date within three months of the subject quarter end, and/or (iii) with respect to any guarantor subject to any bankruptcy, reorganization, insolvency, dissolution, liquidation or similar debtor relief proceeding, unless such guarantor is replaced by a credit worthy guarantor reasonably capable of performing the guarantor’s obligation and in the case of any lease in excess of 5,000 square feet such replacement guarantor shall be reasonably acceptable to Agent, plus (e) projected rentals in connection with any replacement lease executed in accordance with the terms of this Agreement with respect to any space described in (d) above. Net Operating Income shall be calculated based on the immediately preceding calendar quarter unless the Real Estate has not been owned by the Borrower or its Subsidiaries for the entirety of such calendar quarter, in which event Net Operating Income shall be grossed up for such ownership period.

Non Excluded Taxes. See §4.4(b).

Non-Recourse Exclusions. With respect to any Non-Recourse Indebtedness of any Person, any industry standard exclusions from the non-recourse limitations governing such Indebtedness, including, without limitation, exclusions for claims that (i) are based on fraud, intentional misrepresentation, misapplication or misappropriation of funds, gross negligence or willful misconduct (ii) result from intentional mismanagement of or physical waste at the Real Estate securing such Non-Recourse Indebtedness, or (iii) arise from the presence of Hazardous Substances on the Real Estate securing such Non-Recourse Indebtedness (whether contained in a loan agreement, promissory note, indemnity agreement or other document), or (iv) are the result of any unpaid real estate taxes and assessments if sufficient cash flow from the Real Estate exists (whether contained in a loan agreement, promissory note, indemnity agreement or other document).

Non-Recourse Indebtedness. Indebtedness of Pledgor, Borrower, their respective Subsidiaries, or an Unconsolidated Affiliate of any such Person, which is secured by one or more parcels of Real Estate or interests therein or equipment and which is not a general obligation of Pledgor, Borrower or such Subsidiary or Unconsolidated Affiliate, the holder of such Indebtedness having recourse solely to the parcels of Real Estate, or interests therein, securing such Indebtedness or the direct owner of such real estate, the leases thereon and the rents, profits and equity thereof or equipment, as applicable (except for recourse against the general credit of the Person obligated thereon for any Non-Recourse Exclusions), provided that in calculating the amount of Non-Recourse Indebtedness at any time, the Borrower’s reasonable estimate of the amount of any Non-Recourse Exclusions which are the subject of a claim and action shall not be included in the Non-Recourse Indebtedness but shall constitute Recourse Indebtedness. Non-Recourse Indebtedness shall also include Indebtedness of a Subsidiary of Pledgor or Borrower that is not a Credit Party or of an Unconsolidated Affiliate which is a special purpose entity that is recourse solely to such Subsidiary or Unconsolidated Affiliate, which is not cross-defaulted to other Indebtedness of the Borrower and which does not constitute Indebtedness of any other Person (other than such Subsidiary or Unconsolidated Affiliate which is the borrower thereunder).

Notes. See §2.3.

Notice. See §19.

Obligations. The term “Obligations” shall mean and include:

A. The payment of the principal sum, interest at variable rates, charges and indebtedness evidenced by the Notes including any extensions, renewals, replacements, increases, modifications and amendments thereof, given by the Borrower to the order of the respective Lenders;

B. The payment, performance, discharge and satisfaction of each covenant, warranty, representation, undertaking and condition to be paid, performed, satisfied and complied with by the Borrower under and pursuant to this Agreement or the other Loan Documents;

C. The payment of all costs, expenses, legal fees and liabilities incurred by the Agent and the Lenders in connection with the enforcement of any of the Agent’s or any Lender’s rights or remedies under this Agreement or the other Loan Documents, or any other instrument, agreement or document which evidences or secures any other obligations or collateral therefor, whether now in effect or hereafter executed; and

D. The payment, performance, discharge and satisfaction of all other liabilities and obligations of the Borrower to the Agent or any Lender, whether now existing or hereafter arising, direct or indirect, absolute or contingent, and including, without limitation express or implied upon the generality of the foregoing, each liability and obligation of the Borrower under any one or more of the Loan Documents and any amendment, extension, modification, replacement or recasting of any one or more of the instruments, agreements and documents referred to in this Agreement or any other Loan Document or executed in connection with the transactions contemplated by this Agreement or any other Loan Document; provided however that notwithstanding anything to the contrary set forth in the definition of Obligations, with respect to any indemnification, contingent or other similar obligations, such matters shall be considered “Obligations” only to the extent a reasonable good faith claim has been made on such indemnification, contingent or similar obligation on or before the date that all other Obligations are satisfied in full.

OFAC. Office of Foreign Asset Control of the Department of the Treasury of the United States of America.

Outstanding. With respect to the Loan, the aggregate unpaid principal amount thereof as of any date of determination.

Partnership Agreement. The Amended and Restated Limited Partnership Agreement of the Pledgor dated April 21, 2014.

Patriot Act. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as the same may be amended from time to time, and corresponding provisions of future laws.

PBGC. The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

Permitted Liens. Liens, security interests and other encumbrances permitted by §8.2.

Person. Any individual, corporation, limited liability company, partnership, trust, unincorporated association, or other legal entity, and any government or any governmental agency or political subdivision thereof.

Plan Assets. Assets of any employee benefit plan subject to Part 4, Subtitle B, Title I of ERISA.

Pledge Agreement. Collectively, each Pledge Agreement wherein the Borrower or the Pledgor pledges the Collateral to the Agent on behalf of the Lenders.

Pledgor. As defined in the preamble hereto.

Property Loan Documents. As defined in the Pledge Agreement.

Real Estate. All real property at any time owned or leased (as lessee or sublessee) by the Borrower, the Pledgor, or any of their respective Subsidiaries.

Recourse Indebtedness. As of any date of determination, any Indebtedness (whether secured or unsecured) of a Person other than Non-Recourse Indebtedness.

Release. See §6.20(c)(iii).

Rent Roll. A report prepared by the Borrower showing for the Intellicenter Property owned or leased by the Borrower or the Pledgor, its occupancy, tenants, lease expiration dates, lease rent and other information in substantially the form presented to the Agent on or prior to the date hereof.

Required Lenders. As of any date when there are two (2) or more Lenders, at least two (2) Lenders whose aggregate Commitment Percentage is equal to or greater than sixty-six and 2/3 percent (66.67%) of the Total Commitment; provided that in determining said percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded and the Commitment Percentages of the Lenders shall be redetermined for voting purposes only to exclude the Commitment Percentages of such Defaulting Lenders.

Reserve Percentage. For any Interest Period, that percentage which is specified three (3) Business Days before the first day of such Interest Period by the Board of Governors of the Federal Reserve System (or any successor) or any other governmental or quasi-governmental authority with jurisdiction over Agent or any Lender for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirement) for the Agent or any Lender with respect to liabilities constituting of or including (among other liabilities) Eurocurrency liabilities in an amount equal to that portion of the Loan affected by such Interest Period and with a maturity equal to such Interest Period.

Revolving Credit Facility. The revolving credit facility by and among the Borrower, certain of its Affiliates, Key Bank National Association, as agent and a lender, and the other lenders party thereto, entered into as of June 26, 2015, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

Sanctioned Person. Any Person that is (i) listed on OFAC’s List of Specially Designated Nationals and Blocked Persons, (ii) otherwise the subject or target of Sanctions, to the extent U.S. persons are prohibited from engaging in transactions with such a Person, and (iii) 50 percent or greater owned or controlled by a Person described in clause (i) or (ii) above.

Sanction(s). Any sanction administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority, in each case, solely to the extent applicable to the Borrower or any of its Subsidiaries.

SEC. The federal Securities and Exchange Commission.

Security Documents. Collectively, the Pledge Agreement, UCC-1 financing statements and any further collateral security agreements or assignments to the Agent for the benefit of the Lenders.

S&P. Standard & Poor’s Ratings Group.

State. A state of the United States of America and the District of Columbia.

Subsidiary. For any Person, any corporation, partnership, limited liability company 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, partnership, limited liability company or other entity (without regard to the occurrence 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, and shall include all Persons the accounts of which are consolidated with those of such Person pursuant to GAAP.

Tangible Net Worth. The difference between (a) Total Asset Value less (b) all Indebtedness.

Taxes. Any present or future taxes, levies, imposts, duties, charges, fees, or similar deductions or withholdings that are imposed by any Governmental Authority.

Total Asset Value. The sum of (without duplication) (a) the aggregate Value of all of the Borrower’s, the Pledgor’s and their Subsidiaries’ Real Estate, plus (b) the carrying value of other real estate-related investments (such as loans receivable) plus (c) the amount of any cash and Cash Equivalents, excluding tenant security and other restricted deposits of the Borrower and its Subsidiaries. For any non-Wholly Owned Subsidiary, Total Asset Value shall be adjusted for the Borrower’s, the Pledgor’s and their Subsidiaries’ pro rata ownership percentage.

Total Commitment. As of the date of this Agreement, the Total Commitment is equal to the Facility Amount.

Type. As to the Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

Unconsolidated Affiliate. In respect of any Person, any other Person in whom such Person holds an Investment, (a) whose financial results would not be consolidated under GAAP with the financial results of such first Person on the consolidated financial statements of such first Person, and (b) which is not a Subsidiary of such first Person.

Unconsolidated Subsidiary. In respect of any Person, any other Person in whom such Person holds an Investment, whose financial results would not be consolidated under GAAP with the financial results of such first Person on the consolidated financial statements of such first Person.

Unrestricted Cash and Cash Equivalents. As of any date of determination, the sum of (a) the aggregate amount of Unrestricted Cash and (b) the aggregate amount of Unrestricted Cash Equivalents (valued at fair market value). As used in this definition, “Unrestricted” means the specified asset is not subject to any escrow, reserves or Liens or similar claims of any kind in favor of any Person (other than any statutory right of set off).

Value. The sum of the following: (a) for Real Estate for which the Borrower has obtained an Appraisal, the value indicated in such Appraisal, and (b) for all other Real Estate, the undepreciated cost basis of such Real Estate.

Wholly Owned Subsidiary. As to the Borrower, any Subsidiary of the Borrower that is directly or indirectly owned 100% by Borrower.

§1.2 Rules of Interpretation.

(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Agreement.

(b) The singular includes the plural and the plural includes the singular.

(d) A reference to any Person includes its permitted successors and permitted assigns.

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.

(f) The words “include”, “includes” and “including” are not limiting.

(g) The words “approval” and “approved”, as the context requires, means an approval in writing given to the party seeking approval.

(h) All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the State of New York, have the meanings assigned to them therein.

(i) Reference to a particular “§”, refers to that section of this Agreement unless otherwise indicated.

(j) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Agreement as a whole and not to any particular section or subdivision of this Agreement.

(k) The words “the date hereof” or words of like import shall mean the date that this Agreement is fully executed by all parties.

(l) In the event of any change in generally accepted accounting principles after the date hereof or any other change in accounting procedures pursuant to §7.3 which would affect the computation of any financial covenant, ratio or other requirement set forth in any Loan Document, then upon the request of the Borrower or the Agent, the Borrower and the Agent shall negotiate promptly, diligently and in good faith in order to amend the provisions of the Loan Documents such that such financial covenant, ratio or other requirement shall continue to provide substantially the same financial tests or restrictions of the Borrower as in effect prior to such accounting change, as determined by the Agent in its good faith judgment. Until such time as such amendment shall have been executed and delivered by the Borrower and the Agent, such financial covenants, ratio and other requirements, and all financial statements and other documents required to be delivered under the Loan Documents, shall be calculated and reported as if such change had not occurred.

§2. THE CREDIT FACILITY.

§2.1 The Facility. Subject to the terms and conditions herein set forth, Lenders agree to make the Loan to the Borrower in an amount equal to the Facility Amount. The Loan shall be funded in one advance on the date hereof in accordance with the terms and conditions of this Agreement. The Borrower may not re-borrow any portion of the Loan which is repaid.

§2.2 RESERVED.

§2.3 Notes. The Loan shall, if requested by each Lender, be evidenced by separate promissory notes of the Borrower in substantially the form of Exhibit A hereto (collectively, the “ Notes”), dated of even date with this Agreement (except as otherwise provided in §18.3) and completed with appropriate insertions. One Note shall be payable to the order of each Lender which so requests the issuance of a Note in the principal amount equal to such Lender’s Commitment or, if less, the outstanding amount of the Loan made by such Lender, plus interest accrued thereon, as set forth below.

§2.4 RESERVED.

§2.5 RESERVED.

§2.6 RESERVED.

§2.7 Interest on Loan.

(a) Each Base Rate Loan shall bear interest for the period commencing with the date such loan is selected as a Base Rate Loan and ending on the date on which such Base Rate Loan is repaid or converted to a LIBOR Rate Loan at the rate per annum equal to the sum of the Base Rate plus the Applicable Margin for Base Rate Loans.

(b) Each LIBOR Rate Loan shall bear interest for the period commencing the date such loan is selected as a LIBOR Rate Loan and ending on the last day of each Interest Period with respect thereto at the rate per annum equal to the sum of LIBOR determined for such Interest Period plus the Applicable Margin for LIBOR Rate Loans.

(d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other Type as provided in §4.1.

§2.8 Use of Proceeds. The Borrower and its Subsidiaries will use the proceeds of the Loan solely to fund a portion of the cost of acquiring the Intellicenter Property, with any excess proceeds being released to the Borrower to be used for general working capital purposes..

§3. REPAYMENT OF THE LOANS.

§3.1 Stated Maturity. The Borrower promises to pay on the Maturity Date and there shall become absolutely due and payable on the Maturity Date the outstanding amount of the Loan on such date, together with any and all accrued and unpaid interest thereon.

§3.2 Mandatory Prepayments. The Borrower shall promptly, but in any case within five (5) Business Days after receipt thereof, remit to the Agent for application to the outstanding principal balance of the Loan, and the permanent reduction of the amount of the Loan, an amount equal to 100% of: (a) the net proceeds of any issuance of common or preferred Equity Interests in the Pledgor or the Borrower, and (b) the proceeds of any refinancing in respect of any Indebtedness with respect to any Real Estate or the sale of any Real Estate (in the case of the amounts referred to in clause (b) above, net of the repayment, as applicable, of first mortgage indebtedness secured by such Real Estate, and the payment of customary closing costs).

§3.3 Optional Prepayments.

(a) The Borrower shall have the right, at its election, to prepay the outstanding amount of the Loan, as a whole or in part, at any time without penalty or premium; provided, that if any prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this §3.3 is made on a date that is not the last day of the Interest Period relating thereto, such prepayment shall be accompanied by the payment of any amounts due pursuant to §4.8.

(b) The Borrower shall give the Agent, no later than 1:00 p.m. (Eastern time) at least three (3) days prior written notice of any prepayment pursuant to this §3.3, in each case specifying the proposed date of prepayment of the Loan and the principal amount to be prepaid (provided that (i) any such notice may be revoked or modified upon one (1) day’s prior notice to the Agent) and/or (ii) any such notice or repayment may be conditioned upon the consummation of a transaction.

§3.4 Partial Prepayments. Each partial prepayment of the Loan under §3.3 shall be in a minimum amount of $100,000, shall be accompanied by the payment of accrued interest on the principal prepaid to the date of payment. Each partial payment under §3.2 and §3.3 shall be applied first to the principal of Loan (and with respect to each category of Loan, first to the principal of Base Rate Loans, and then to the principal of LIBOR Rate Loans).

§3.5 Effect of Prepayments. Amounts of the Loan prepaid under §3.2 and §3.3 prior to the Maturity Date may not be reborrowed.

§3.6 Failure to Repay Within Nine Months; Amortization. In the event that the outstanding amount of the Loan, together with all accrued and unpaid interest thereon, has not been paid to Agent by June 2, 2016, the Borrower shall present to the Agent on such date a written plan, in form and substance reasonably satisfactory to the Agent, setting forth the proposed plan of the Borrower to effect full and timely

repayment. If the Borrower’s proposed repayment plan reflects insufficient funds so to repay all such amounts on or before the Maturity Date, the amount equal to the anticipated deficiency shall be repaid to Agent in equal monthly installments over the then unexpired term hereof.

§4. CERTAIN GENERAL PROVISIONS.

§4.1 Conversion Options.

(a) The Borrower may elect from time to time to convert any of its outstanding Loans to a Loan of another Type and such Loans shall thereafter bear interest as a Base Rate Loan or a LIBOR Rate Loan, as applicable; provided that (i) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrower shall give the Agent at least one (1) Business Day’s prior written notice of such election, and such conversion shall only be made on the last day of the Interest Period with respect to such LIBOR Rate Loan unless the Borrower pays Breakage Costs as required under this Agreement; (ii) with respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower shall give the Agent at least three (3) LIBOR Business Days’ prior written notice of such election and the Interest Period requested for such Loan, the principal amount of the Loan so converted shall be in a minimum aggregate amount of $100,000 and, after giving effect to the making of such Loan, there shall be no more than four (4) LIBOR Rate Loans outstanding at any one time; and (iii) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing. All or any part of the outstanding Loans of any Type may be converted as provided herein, provided that no partial conversion shall result in a Base Rate Loan in a principal amount of less than $100,000 or a LIBOR Rate Loan in a principal amount of less than $100,000. On the date on which such conversion is being made, each Lender shall take such action as is necessary to transfer its Commitment Percentage of such Loans to its Domestic Lending Office or its LIBOR Lending Office, as the case may be. Each Conversion/Continuation Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrower.

(b) Any LIBOR Rate Loan may be continued as such Type upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the terms of §4.1; provided that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the Interest Period relating thereto ending during the continuance of any Default or Event of Default.

(c) In the event that the Borrower does not notify the Agent of its election hereunder with respect to any LIBOR Rate Loan, such Loan shall be automatically continued at the end of the applicable Interest Period as a LIBOR Rate Loan for an Interest Period of one month unless such Interest Period shall be greater than the time remaining until the Maturity Date, in which case such Loan shall be automatically converted to a Base Rate Loan at the end of the applicable Interest Period.

§4.2 Fees. In addition to all fees specified herein, the Borrower agrees to pay to KeyBank and the Arranger, for their own account, certain fees for services rendered or to be rendered in connection with the Loan as provided pursuant to a fee letter dated on or about the Closing Date, between the Borrower and KeyBank (the “Agreement Regarding Fees”).

§4.3 RESERVED.

§4.4 Funds for Payments.

(a) All payments of principal, interest, facility fees, closing fees and any other amounts due hereunder or under any of the other Loan Documents shall be made to Agent, for the respective accounts of Lenders and the Agent, as the case may be, at the Agent’s Head Office, not later than 3:00 p.m. (Eastern

time) on the day when due (or such later time as is acceptable to the Agent in the event of a payment in full of all Loan and a termination of Commitments hereunder), in each case in lawful money of the United States in immediately available funds. To the extent not already paid pursuant to the preceding sentence, the Agent is hereby authorized to charge the accounts of the Borrower with KeyBank, on the dates when the amount thereof shall become due and payable, with the amounts of the principal of and interest on the Loan and all fees, charges, expenses and other amounts owing to the Agent and/or the Lenders under the Loan Documents. Subject to the foregoing, all payments made to the Agent on behalf of the Lenders, and actually received by the Agent, shall be deemed received by the Lenders on the date actually received by the Agent.

(b) All payments by the Borrower hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any Taxes now or hereafter imposed or levied by the United States of America or any political subdivision thereof or taxing or other authority therein or any jurisdiction from or through which a payment is made by the Borrower, excluding any income Taxes, franchise or similar Taxes and any Taxes imposed by a jurisdiction as a result of any connection between a Lender and such jurisdiction other than any connection arising solely from executing, delivering, performing its obligations under, or enforcing any Loan Document (such Taxes, other than those so excluded as specifically set forth in this sentence referred to as “Non-Excluded Taxes”), unless the Borrower is compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrower with respect to any amount payable by the Borrower hereunder or under any of the other Loan Documents, the Borrower will pay to the Agent, for the account of the Lenders or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or the Agent to receive the same net amount which the Lenders or the Agent would have received on such due date had no such obligation been imposed upon the Borrower; provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender’s failure to comply with the requirements of §4.4(c) or such Lender’s failure to comply with Sections 1471 through 1474 of the Code or any regulations promulgated thereunder (“FATCA”) to establish an exemption from withholding thereunder; (ii) that are branch profits taxes imposed by the United States or any similar taxes imposed by any other jurisdiction under the laws of which a Lender is organized or in which its applicable lending office is located; or (iii) in the case of a Non-U.S. Lender and notwithstanding any consent given pursuant to §18.1, that are imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment) to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this §4.4(b). The Borrower will deliver promptly to Agent certificates or other valid vouchers for all Taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under any other Loan Document. In the event a Lender receives a refund or credit of any Non-Excluded Taxes paid by the Borrower pursuant to this section, such Lender will pay to the Borrower the amount of such refund or credit (and any interest received with respect thereto) promptly upon receipt thereof; provided that if at any time thereafter such Lender is required to return such refund or credit, the Borrower shall promptly repay to such Lender the amount of such refund or credit, net of any reasonable incremental additional costs.

(c) Each Lender that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes (a “Non-U.S. Lender”), to the extent such Lender is lawfully able to do so, shall provide the Borrower on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or prior to the date of the Assignment and Acceptance Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of the Borrower, with (x) two (2) original copies of Internal Revenue Service Form W-8BEN, W-8ECI and/or W-8IMY (or, in each case, any successor forms), properly completed and duly executed by such Lender, and any other such duly executed form(s) or statement(s) (including whether such Lender has complied with the FATCA) which may, from

time to time, be prescribed by law and, which, pursuant to applicable provisions of (i) an income tax treaty between the United States and the country of residence of such Lender, (ii) the Code, or (iii) any applicable rules or regulations in effect under (i) or (ii) above, establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Lender of principal, interest, fees or other amounts payable under any of the Loan Documents, or (y) if such Lender is not a “bank” or other Person described in Section 881(c)(3) of the Code, a Certificate Regarding Non-Bank Status together with two (2) original copies of Internal Revenue Service Form W-8BEN (or any successor form), properly completed and duly executed by such Lender, and such other documentation required under the Code and requested by the Borrower to establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Lender of interest payable under any of the Loan Documents. Each Lender that is a United States Person (as such term is defined in Section 7701(a)(30) of the Code) for United States federal income tax purposes (a “U.S. Lender”) and is not an exempt recipient within the meaning of Treasury Regulations Section 1.6049-4(c) shall provide the Borrower on or prior to the Closing Date (or, if later, on or prior to the date on which such Lender becomes a party to this Agreement) two (2) original copies of Internal Revenue Service From W-9 (or any successor form), properly completed and duly executed by such Lender, certifying that such U.S. Lender is entitled to an exemption from United States backup withholding tax, or otherwise prove that it is entitled to such an exemption. Each Lender required to deliver any forms, certificates or other evidence with respect to United States federal income tax withholding matters pursuant to this section hereby agrees, from time to time after the initial delivery by such Lender of such forms, certificates or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate in any material respect, that such Lender shall promptly provide the Borrower two (2) new original copies of Internal Revenue Service Form W-9, W-8BEN, W-8ECI and/or W-8IMY (or, in each case, any successor form), or a Certificate Regarding Non-Bank Status and two (2) original copies of Internal Revenue Service Form W-8BEN (or any successor form), as the case may be, properly completed and duly executed by such Lender, and such other documentation required under the Code and requested by the Borrower to confirm or establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to payments to such Lender under the Loan Documents, or notify the Borrower of its inability to deliver any such forms, certificates or other evidence.

§4.5 Computations. All computations of interest on the Loan and of other fees to the extent applicable shall be based on a 360-day year and paid for the actual number of days elapsed. Except as otherwise provided in the definition of the term “Interest Period” with respect to LIBOR Rate Loan, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. The Outstanding Loan as reflected on the records of the Agent from time to time shall be considered prima facie evidence of such amount.

§4.6 Suspension of LIBOR Rate Loan. In the event that, prior to the commencement of any Interest Period relating to any LIBOR Rate Loan, Agent shall determine that adequate and reasonable methods do not exist for ascertaining LIBOR for such Interest Period, or Agent shall reasonably determine that LIBOR will not accurately and fairly reflect the cost of the Lenders making or maintaining LIBOR Rate Loan for such Interest Period, the Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrower and the Lenders absent manifest error) to the Borrower and the Lenders. In such event (a) any Loan Request with respect to a LIBOR Rate Loan shall be automatically withdrawn and shall be deemed a request for a Base Rate Loan and (b) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period applicable thereto, become a Base Rate Loan, and the obligations of Lenders to make LIBOR Rate Loan shall be suspended until Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon the Agent shall so notify the Borrower and the Lenders.

§4.7 Illegality. Notwithstanding any other provisions herein, if any Change in Law shall make it unlawful, or any central bank or other governmental authority having jurisdiction over a Lender or its LIBOR Lending Office shall assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loan, such Lender shall forthwith give notice of such circumstances to the Agent and the Borrower thereupon (a) the commitment of the Lenders to make LIBOR Rate Loan shall forthwith be suspended and (b) the LIBOR Rate Loan then outstanding shall be converted automatically to Base Rate Loan on the last day of each Interest Period applicable to such LIBOR Rate Loan or within such earlier period as may be required by law. Notwithstanding the foregoing, before giving such notice, the applicable Lender shall designate a different lending office if such designation will void the need for giving such notice and will not, in the reasonable judgment of such Lender, be otherwise materially disadvantageous to such Lender or increase any costs payable by the Borrower hereunder.

§4.8 Additional Interest. If any LIBOR Rate Loan or any portion thereof is repaid or is converted to a Base Rate Loan for any reason on a date which is prior to the last day of the Interest Period applicable to such LIBOR Rate Loan, or if repayment of the Loan has been accelerated as provided in §12.1, the Borrower will pay to the Agent upon demand for the account of the applicable Lenders in accordance with their respective Commitment Percentages, in addition to any amounts of interest otherwise payable hereunder, the Breakage Costs. The Borrower understands, agrees and acknowledges the following: (i) no Lender has any obligation to purchase, sell and/or match funds in connection with the use of LIBOR as a basis for calculating the rate of interest on a LIBOR Rate Loan; (ii) LIBOR is used merely as a reference in determining such rate; and (iii) the Borrower have accepted LIBOR as a reasonable and fair basis for calculating such rate and any Breakage Costs. The Borrower further agrees to pay the Breakage Costs, if any, whether or not a Lender elects to purchase, sell and/or match funds.

§4.9 Additional Costs, Etc. Notwithstanding anything herein to the contrary, if any Change in Law, shall:

(a) subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Agreement, the other Loan Documents, such Lender’s Commitment, the Loan (other than taxes based upon or measured by the gross receipts, income or profits of such Lender or the Agent or its franchise tax), or

(b) materially change the basis of taxation (except for changes in taxes on gross receipts, income or profits or its franchise tax) of payments to any Lender of the principal of or the interest on any Loan or any other amounts payable to any Lender under this Agreement or the other Loan Documents, or

(c) impose or increase or render applicable any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law and which are not already reflected in any amounts payable by the Borrower hereunder) against assets held by, or deposits in or for the account of, or loans by, or commitments of an office of any Lender, or

(d) impose on any Lender or the Agent any other conditions or requirements with respect to this Agreement, the other Loan Documents, the Loan, such Lender’s Commitment, or any class of loans or commitments of which any of the Loan or such Lender’s Commitment forms a part; and the result of any of the foregoing is:

(i) to increase the cost to any Lender of making, funding, issuing, renewing, extending or maintaining the Loan, or such Lender’s Commitment, or

(ii) to reduce the amount of principal, interest or other amount payable to any Lender or Agent hereunder on account of such Lender’s Commitment or the Loan, or

(iii) to require any Lender or the Agent to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender or the Agent from the Borrower hereunder, then, and in each such case, the Borrower will (and as to clauses (a) and (b) above, subject to the provisions of Section §4.4), within thirty (30) days of demand made by such Lender or (as the case may be) the Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Agent such additional amounts as such Lender or the Agent shall reasonably determine in good faith to be sufficient to compensate such Lender or the Agent for such additional cost, reduction, payment or foregone interest or other sum. For the avoidance of doubt, the provisions of this §4.9 shall not apply with respect to Taxes, which shall be governed by §4.4(b) and §4.4(c).

§4.10 Capital Adequacy. If after the date hereof any Lender determines that (a) as a result of a Change in Law, or (b) compliance by such Lender or its parent bank holding company with any directive of any such entity regarding liquidity or capital adequacy, has the effect of reducing the return on such Lender’s or such holding company’s capital as a consequence of such Lender’s commitment to make Loan hereunder to a level below that which such Lender or holding company could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by such Lender to be material, then such Lender may notify the Borrower thereof. The Borrower agrees to pay to such Lender the amount of such reduction in the return on capital as and when such reduction is reasonably determined, upon presentation by such Lender of a statement of the amount setting forth the Lender’s calculation thereof. In determining such amount, such Lender may use any reasonable averaging and attribution methods generally applied by such Lender.

§4.11 Breakage Costs. The Borrower shall pay all Breakage Costs required to be paid by them pursuant to this Agreement and incurred from time to time by any Lender within fifteen (15) days from receipt of written notice from the Agent, or such earlier date as may be required by this Agreement.

§4.12 Default Interest; Late Charge. Following the occurrence and during the continuance of any Event of Default, and regardless of whether or not the Agent or the Lenders shall have accelerated the maturity of the Loan, the Loan shall bear interest payable on demand at a rate per annum equal to four percent (4.0%) above the interest rate that would otherwise be in effect hereunder (the “Default Rate”), until such amount shall be paid in full (after as well as before judgment). In addition, the Borrower shall pay a late charge equal to four percent (4.0%) of any amount of interest and/or principal payable on the Loan (other than amounts due on the Maturity Date or as a result of acceleration), which is not paid by the Borrower within ten (10) days of the date when due.

§4.13 Certificate. A certificate setting forth any amounts payable pursuant to §4.8, §4.9, §4.10, §4.11 or §4.12 and a reasonably detailed explanation of such amounts which are due, submitted by any Lender or the Agent to the Borrower, shall be prima facie evidence of the amount due. A Lender shall be entitled to reimbursement under §4.9, or §4.10 from and after notice to the Borrower that such amounts are due given in accordance with §4.9 or §4.10 and for a period of ninety (90) days prior to receipt of such notice if such Change in Law was effective during such ninety (90) day period.

§4.14 Limitation on Interest. Notwithstanding anything in this Agreement or the other Loan Documents to the contrary, all agreements between or among the Borrower, the Lenders and the Agent, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no contingency, whether by reason of acceleration of the maturity of any of the Obligations or otherwise, shall the interest contracted for, charged or received by the Lenders exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, interest would otherwise be payable to the Lenders in excess of the maximum lawful amount, the interest payable to the Lenders shall be reduced to the

maximum amount permitted under applicable law; and if from any circumstance the Lenders shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to the reduction of the principal balance of the Obligations and to the payment of interest or, if such excessive interest exceeds the unpaid balance of principal of the Obligations, such excess shall be refunded to the Borrower. All interest paid or agreed to be paid to the Lenders shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal of the Obligations (including the period of any renewal or extension thereof) so that the interest thereon for such full period shall not exceed the maximum amount permitted by applicable law. This Section shall control all agreements between or among the Borrower, the Lenders and the Agent.

§4.15 Certain Provisions Relating to Increased Costs and Non-Funding Lenders. If a Lender gives notice of the existence of the circumstances set forth in §4.7 or any Lender requests compensation for any losses or costs to be reimbursed pursuant to any one or more of the provisions of §4.4(b) (as a result of the imposition of U.S. withholding taxes on amounts paid to such Lender under this Agreement), §4.9 or §4.10, then, upon the request of the Borrower, such Lender, as applicable, shall use reasonable efforts in a manner consistent with such institution’s practice in connection with loans like the Loan of such Lender to eliminate, mitigate or reduce amounts that would otherwise be payable by the Borrower under the foregoing provisions, provided that such action would not be otherwise prejudicial to such Lender, including, without limitation, by designating another of such Lender’s offices, branches or affiliates; the Borrower agreeing to pay all reasonable and necessary costs and expenses incurred by such Lender in connection with any such action. Notwithstanding anything to the contrary contained herein, if no Default or Event of Default shall have occurred and be continuing, and if any Lender has given notice of the existence of the circumstances set forth in §4.7 or has requested payment or compensation for any losses or costs to be reimbursed pursuant to any one or more of the provisions of §4.4(b) (as a result of the imposition of U.S. withholding taxes on amounts paid to such Lender under this Agreement), §4.9 or §4.10 and following the request of the Borrower has been unable to take the steps described above to mitigate such amounts (each, an “Affected Lender”) and such failure has not been cured (a “Non-Funding Lender”), then, within ninety (90) days after such notice or request for payment or compensation or failure to fund, as applicable, the Borrower shall have the right as to such Affected Lender or Non-Funding Lender, as applicable, to be exercised by delivery of written notice delivered to the Agent and the Affected Lender or Non-Funding Lender, within ninety (90) days of receipt of such notice or failure to fund, as applicable, to elect to cause the Affected Lender or Non-Funding Lender, as applicable, to transfer its Commitment. The Agent shall promptly notify the remaining Lenders that each of such Lenders shall have the right, but not the obligation, to acquire a portion of the Commitment, pro rata based upon their relevant Commitment Percentages, of the Affected Lender or Non-Funding Lender, as applicable (or if any of such Lenders does not elect to purchase its pro rata share, then to such remaining Lenders in such proportion as approved by the Agent). In the event that the Lenders do not elect to acquire all of the Affected Lender’s or Non-Funding Lender’s Commitment, then the Agent shall endeavor to obtain a new Lender to acquire such remaining Commitment. Upon any such purchase of the Commitment of the Affected Lender or Non-Funding Lender, as applicable, the Affected Lender’s or Non-Funding Lender’s interest in the Obligations and its rights hereunder and under the Loan Documents shall terminate at the date of purchase, and the Affected Lender or Non-Funding Lender, as applicable, shall promptly execute all documents reasonably requested to surrender and transfer such interest. The purchase price for the Affected Lender’s or Non-Funding Lender’s Commitment shall equal any and all amounts outstanding and owed by the Borrower to the Affected Lender or Non-Funding Lender, as applicable, including principal, prepayment premium or fee, and all accrued and unpaid interest or fees.

§5. COLLATERAL SECURITY.

§5.1 Collateral. The Obligations and the Hedge Obligations shall be secured by a perfected first priority lien and security interest to be held by the Agent for the benefit of the Lenders on the Collateral, pursuant to the terms of and subject to the limitations contained in the Security Documents.

§5.2 Release of Collateral. Upon the refinancing or repayment of the Obligations in full, then the Agent shall release the Collateral from the lien and security interest of the Security Documents and to release the Borrower; provided that the Agent has not received a notice from the “Representative” (as defined in §14.17) or the holder of the Hedge Obligations that any Hedge Obligation is then due and payable to the holder thereof.

§6. REPRESENTATIONS AND WARRANTIES. The Borrower represent and warrant to the Agent and the Lenders as follows, each as of the Closing Date hereof, and as of the date of a request for a funding of any Loan hereunder:

§6.1 Corporate Authority, Etc.

(a) Incorporation; Good Standing. The Borrower is a Maryland corporation duly organized pursuant to its certificate of incorporation filed with the Maryland Secretary of State, and is validly existing and in good standing under the laws of Maryland. The Borrower (i) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated, and (ii) is in good standing and is duly authorized to do business in each other jurisdiction where a failure to be so qualified in such other jurisdiction could have a Material Adverse Effect.

(b) Other Credit Parties. Each of the other Credit Parties (i) is a corporation, limited partnership, general partnership, limited liability company or trust duly organized under the laws of its State of organization and is validly existing and in good standing under the laws thereof, (ii) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated and (iii) is in good standing and is duly authorized to do business in each jurisdiction where Real Estate is owned or leased by it is located to the extent required to do so under applicable law and in each other jurisdiction where a failure to be so qualified could have a Material Adverse Effect.

(c) Other Subsidiaries. Except where a failure to satisfy such representation would not have a Material Adverse Effect, each of the Subsidiaries of the Borrower (i) is a corporation, limited partnership, general partnership, limited liability company or trust duly organized under the laws of its State of organization and is validly existing and in good standing under the laws thereof, (ii) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated and (iii) is in good standing and is duly authorized to do business in each jurisdiction where Real Estate owned or leased by it is located.

(d) Authorization. The execution, delivery and performance of this Agreement and the other Loan Documents to which the Borrower or the Pledgor is a party and the transactions contemplated hereby and thereby (i) are within the authority of the Credit Parties, (ii) have been duly authorized by all necessary actions on the part of the Credit Parties, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any Credit Party is subject or any judgment, order, writ, injunction, license or permit applicable to any Credit Party, except as would not reasonably be expected to result in a Material Adverse Effect, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement, articles of incorporation or other charter documents or bylaws of, or any agreement or other instrument binding upon, any Credit Party or or any of its properties where, in the case of any agreement or other instrument binding upon any Credit Party or any of its properties, any conflict or default would not reasonably be expected to have a Material Adverse Effect, (v) do not and will not result in or

require the imposition of any lien or other encumbrance on any of the properties, assets or rights of any Credit Party other than the liens and encumbrances in favor of the Agent contemplated by this Agreement and the other Loan Documents, and (vi) do not require the approval or consent of any Person other than those already obtained and delivered to Agent or except as would not reasonably be expected to result in a Material Adverse Effect.

(e) Enforceability. The execution and delivery of this Agreement and the other Loan Documents to which any of the Credit Parties is a party are valid and legally binding obligations of the Credit Parties enforceable in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and general principles of equity.

§6.2 Governmental Approvals. The execution, delivery and performance of this Agreement and the other Loan Documents to which any Credit Party is a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing or registration with, or the giving of any notice to, any court, department, board, governmental agency or authority other than those already obtained and the filing of the Security Documents in the appropriate records office with respect thereto, in each case, except as would not reasonably be expected to result in a Material Adverse Effect.

§6.3 Title to Real Estate. The Subsidiaries own or lease the Real Estate, subject only to the rights of others, including mortgages or leases pursuant to which the Subsidiaries or any of their Affiliates is the lessee, conditional sales agreements, title retention agreements, liens or other monetary encumbrances incurred in the ordinary course of business with respect thereto.

§6.4 Financial Statements. The Borrower has furnished to the Agent: (a) the consolidated balance sheet of the Borrower and its Subsidiaries as of the Balance Sheet Date and the related consolidated statement of income and cash flow for the most recent period then ended (and available) certified by an Authorized Officer or the chief financial or accounting officer of the Borrower, and (b) certain other financial information relating to the Pledgor and the Real Estate. Such balance sheet and statements have been prepared in accordance with generally accepted accounting principles and fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of such dates and the consolidated results of the operations of the Borrower and its Subsidiaries for such periods.

§6.5 No Material Changes. Since the later of Balance Sheet Date or the date of the most recent financial statements delivered pursuant to §7.4, as applicable, except as otherwise disclosed to the Agent, there has occurred no materially adverse change in the financial condition, or business of the Borrower, and its Subsidiaries taken as a whole as shown on or reflected in the consolidated balance sheet of the Borrower as of the Balance Sheet Date, or its consolidated statement of income or cash flows for the calendar year then ended, other than changes that have not and could not reasonably be expected to have a Material Adverse Effect. As of the date hereof, except as set forth on Schedule 6.5 hereto, there has occurred no materially adverse change in the financial condition, prospects, operations or business activities of the Real Estate from the condition shown on the statements of income delivered to the Agent pursuant to §6.4 other than changes in the ordinary course of business that have not had a Material Adverse Effect.

§6.6 Franchises, Patents, Copyrights, Etc. The Borrower and the Pledgor possess all franchises, patents, copyrights, trademarks, trade names, service marks, licenses and permits, and rights in respect of the foregoing, adequate for the conduct of their business substantially as now conducted without known conflict with any rights of others.

§6.7 Litigation. As of the date hereof, except as stated on Schedule 6.7, there are no actions, suits, proceedings or investigations of any kind pending or to the knowledge of the Borrower or the Pledgor

threatened against the Borrower or the Pledgor before any court, tribunal, arbitrator, mediator or administrative agency or board which question the validity of this Agreement or any of the other Loan Documents, any action taken or to be taken pursuant hereto or thereto or any lien, security title or security interest created or intended to be created pursuant hereto or thereto. As of the date hereof, except as set forth on Schedule 6.7, there are no judgments, final orders or awards outstanding against or affecting the Borrower, the Pledgor, or any Real Estate, individually or in the aggregate, in excess of $1,000,000.

§6.8 No Material Adverse Contracts, Etc. Neither the Borrower nor the Pledgor is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation that has or is expected in the future to have a Material Adverse Effect, with Lenders agreeing the exercise of the redemption rights granted under the Partnership Agreement shall not be deemed to have a Material Adverse Effect. Neither the Borrower nor the Pledgor is a party to any contract or agreement that has or could reasonably be expected to have a Material Adverse Effect.

§6.9 Compliance with Other Instruments, Laws, Etc. Neither the Borrower nor the Pledgor is in violation of any provision of its charter or other organizational documents, bylaws, or any agreement or instrument to which it is subject or by which it or any of its properties is bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that has had or could reasonably be expected to have a Material Adverse Effect.

§6.10 Tax Status. Except as would not reasonably be expected to result in a Material Adverse Effect, each of the Borrower and the Pledgor (a) has made or filed all federal and state income and all other Tax returns, reports and declarations required by any jurisdiction to which it is subject or has obtained an extension for filing, (b) has paid prior to delinquency all Taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings or for which any of the Borrower or the Pledgor, as applicable, has set aside on its books provisions reasonably adequate for the payment of such Taxes, and (c) has made provisions reasonably adequate for the payment of all accrued Taxes not yet due and payable. Except as would not reasonably be expected to result in a Material Adverse Effect, there are no unpaid Taxes claimed by the taxing authority of any jurisdiction to be due by the Borrower or its Subsidiaries, the officers or partners of such Person know of no basis for any such claim, and as of the Closing Date, there are no audits pending or to the knowledge of the Borrower threatened with respect to any Tax returns filed by the Borrower or its Subsidiaries. The taxpayer identification number for the Borrower is 46-4654279.

§6.11 No Event of Default. No Default or Event of Default has occurred and is continuing.

§6.12 Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an “investment company”, or an “affiliated company” or a “principal underwriter” of an “investment company”, as such terms are defined in the Investment Company Act of 1940.

§6.13 Absence of UCC Financing Statements, Etc. Except with respect to Permitted Liens or as disclosed on the lien search reports delivered to and approved by the Agent, there is no financing statement (but excluding any financing statements that may be filed against the Borrower or the Pledgor without the consent or agreement of such Persons), security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any applicable filing records, registry, or other public office, that purports to cover, affect or give notice of any present or possible future lien on, or security interest or security title in, any Collateral.

§6.14 Setoff, Etc. Except as provided in the Pledges, the Collateral and the rights of the Agent and the Lenders with respect to the Collateral are not subject to any setoff, claims, withholdings or other defenses by the Borrower or any of its Subsidiaries or Affiliates or, to the best knowledge of the Borrower, any other Person other than Permitted Liens described in §8.2(i).

§6.15 Certain Transactions. Except as disclosed on Schedule 6.15 hereto, none of the partners, officers, trustees, managers, members, directors, or employees of the Borrower or the Pledgor is, nor shall any such Person become, a party to any transaction with the Borrower or the Pledgor (other than for services as partners, managers, members, employees, officers and directors), including any agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any partner, officer, trustee, director or such employee or, to the knowledge of the Borrower or the Pledgor, any corporation, partnership, trust or other entity in which any partner, officer, trustee, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, which are on terms less favorable to the Borrower or the Pledgor than those that would be obtained in a comparable arms-length transaction.

§6.16 Employee Benefit Plans. Except as would not reasonably be expected to have a Material Adverse Effect, the Borrower and each ERISA Affiliate that is subject to ERISA has fulfilled its obligation, if any, under the minimum funding standards of ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan. Except as would not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any ERISA Affiliate has (a) sought a waiver of the minimum funding standard under §412 of the Code in respect of any Multiemployer Plan or Guaranteed Pension Plan or (b) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under §4007 of ERISA. Neither the Borrower nor any ERISA Affiliate has failed to make any contribution or payment to any Multiemployer Plan or Guaranteed Pension Plan, or made any amendment to any Multiemployer Plan or Guaranteed Pension Plan, which has resulted or would reasonably be expected to result in the imposition of a Lien. None of the Real Estate constitutes a “plan asset” of any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan in each case, that is subject to ERISA.

§6.17 Disclosure. All of the representations and warranties made by the Borrower or the Pledgor in this Agreement and the other Loan Documents or any document or instrument delivered to the Agent or the Lenders pursuant to or in connection with any of such Loan Documents are true and correct in all material respects. All information contained in this Agreement, the other Loan Documents or otherwise furnished to or made available to the Agent or the Lenders by the Borrower or the Pledgor, is and will be true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not materially misleading when taken as a whole. The written information, reports and other papers and data with respect to the Borrower, the Pledgor, or the Real Estate (other than projections and estimates) furnished to the Agent or the Lenders by the Borrower or the Pledgor in connection with this Agreement or the obtaining of the Commitments of Lenders hereunder was, at the time so furnished, correct in all material respects, or has been subsequently supplemented by other written information, reports or other papers or data, to the extent necessary to give in all material respects a true and accurate knowledge of the subject matter in all material respects; provided that such representation shall not apply to (a) the accuracy of any appraisal, title commitment, survey, or engineering and environmental reports prepared by third parties or legal conclusions or analysis provided by the Borrower’s counsel or (b) budgets, projections and other forward-looking speculative information prepared in good faith by the Borrower (except to the extent the related assumptions were when made manifestly unreasonable) except to the extent that any of the foregoing would not reasonably be expected to have a Material Adverse Effect.

§6.18 Trade Name; Place of Business. Neither the Borrower nor the Pledgor uses any trade name and conducts business under any name other than its actual name set forth in the Loan Documents. The principal place of business of the Borrower and the other Credit Parties is c/o City Office REIT, Inc., 1075 West Georgia Street, Suite 2600, Vancouver, BC Canada V6E 3C9.

§6.19 Regulations T, U and X. No portion of any Loan is to be used for the purpose of purchasing or carrying any “margin security” or “margin stock” as such terms are used in Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224. No Borrower or other Credit Party is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any “margin security” or “margin stock” as such terms are used in Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224.

§6.20 Environmental Compliance. Except as set forth on Schedule 6.20:

(a) None of the Real Estate, nor to the Borrower’s knowledge, any tenant or operations thereon, is in violation, or alleged violation, of any Environmental Law, which violation would reasonably be expected to have a Material Adverse Effect.

(b) Neither the Borrower nor the Pledgor has received written notice from any third party including, without limitation, any federal, state or local governmental authority, (i) that it has been identified by the United States Environmental Protection Agency (“EPA”) as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that any Hazardous Substance(s) which it has generated, transported or disposed of have been found at any site at which a federal, state or local agency or other third party has conducted, or has demanded that the Borrower conduct a remedial investigation, removal or other response action pursuant to any Environmental Law; or (iii) that it is or shall be a named party to any claim, action, cause of action, complaint, or legal or administrative proceeding (in each case, contingent or otherwise) arising out of any third party’s incurrence of costs, expenses, losses or damages in connection with the release of Hazardous Substances in violation of applicable Environmental Law, which in the case of clauses (i) through (iii) above which involves the Real Estate and which would reasonably be expected to have a Material Adverse Effect.

(c) (i) No portion of the Real Estate is used by the Borrower or the Pledgor, or by any tenant or operator thereon, for the handling, processing, storage or disposal of Hazardous Substances except in compliance with applicable Environmental Laws, and to our knowledge and except as provided in any phase I environmental assessment obtained by any Subsidiary, no underground tank or other underground storage receptacle for Hazardous Substances is located on any portion of the Real Estate except those which are being operated and maintained, and, if required, remediated, in compliance with Environmental Laws; (ii) in the course of any business activities conducted by the Borrower, its Subsidiaries or, to the Borrower’s actual knowledge, the tenants and operators of their properties, no Hazardous Substances have been generated or are being used on the Real Estate except in the ordinary course of the Borrower’s or the Pledgor’s or their tenants’ and operators’ business and in compliance with applicable Environmental Laws; (iii) to the Borrower’s actual knowledge, there has been no past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping (other than in reasonable quantities to the extent necessary in the ordinary course of operation of the Borrower’s, the Pledgor’s, their tenants’ or operators’ business and, in any event, in compliance with all Environmental Laws) (a “Release”) or threatened Release of Hazardous Substances on, upon, into or from the Real Estate, which Release would reasonably be expected to have a Material Adverse Effect; (iv) to the Borrower’s knowledge, there have been no Releases on, upon, from or into any real property in the vicinity of any of the Real Estate which, through soil or groundwater contamination, have come to be located on the Real Estate, and which would be reasonably anticipated to have a Material Adverse Effect; and (v) to the Borrower’s actual knowledge, any Hazardous Substances that have been generated on any of the Real Estate have been transported off-site in accordance with all applicable Environmental Laws and in a manner that would not reasonably be expected to have a Material Adverse Effect.

(d) Except for such matters that shall be complied with as of the Closing Date, by virtue of the transactions set forth herein and contemplated hereby, or as a condition to the effectiveness of any other transactions contemplated hereby, to our knowledge and except as provided in any phase I environmental assessment obtained by any Subsidiary, none of the Borrower, the Pledgor, or the Real Estate will become subject to any applicable Environmental Law requiring the performance of environmental site assessments, or the removal or remediation of Hazardous Substances, or the giving of notice to any governmental agency or the recording or delivery to other Persons of an environmental disclosure document or statement pursuant to applicable Environmental Laws, which would reasonably be expected to have a Material Adverse Effect.

(e) To our knowledge and except as provided in any phase I environmental assessment obtained by the Borrower, there are no existing or closed sanitary waste landfills, or hazardous waste treatment, storage or disposal facilities on the Real Estate except where such existence would not reasonably be expected to have a Material Adverse Effect.

(f) Neither the Borrower nor the Pledgor has received any written notice from any party that any use, operation, or condition of any Real Estate has caused any adverse condition on any other property that would reasonably be expected to result in a claim under applicable Environmental Law that would have a Material Adverse Effect, nor does the Borrower or the Pledgor have actual knowledge of any existing facts or circumstances that could reasonably be expected to form the basis for such a claim.

§6.21 Subsidiaries; Organizational Structure. Schedule 6.21 sets forth, as of the Closing Date, all of the Subsidiaries and Unconsolidated Subsidiaries of the Borrower, the form and jurisdiction of organization of each of the Subsidiaries and Unconsolidated Subsidiaries, and the owners of the direct and indirect ownership interests therein.

§6.22 RESERVED.

§6.23 RESERVED.

§6.24 Brokers. Neither the Borrower nor any of its Subsidiaries has engaged or otherwise dealt with any broker, finder or similar entity in connection with this Agreement or the Loan contemplated hereunder.

§6.25 Other Debt. Except as may be provided in the Revolving Credit Facility, neither the Borrower nor the Pledgor is a party to or bound by any agreement, instrument or indenture that may require the subordination in right or time or payment of any of the Obligations to any other indebtedness or obligation of the Borrower.

§6.26 Solvency. As of the Closing Date and after giving effect to the transactions contemplated by this Agreement and the other Loan Documents, including all Loan made or to be made hereunder, and, including, without limitation the provisions of §37 hereof, the Borrower is not insolvent on a balance sheet basis such that the sum of such Person’s assets exceeds the sum of such Person’s liabilities, the Borrower is able to pay its debts as they become due, and the Borrower has sufficient capital to carry on its business.

§6.27 No Bankruptcy Filing. As of the Closing Date, the Borrower is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of its assets or property, and the Borrower and the Pledgor have no knowledge of any Person contemplating the filing of any such petition against it.

§6.28 No Fraudulent Intent. Neither the execution and delivery of this Agreement or any of the other Loan Documents nor the performance of any actions required hereunder or thereunder is being undertaken by the Borrower with or as a result of any actual intent by any of such Persons to hinder, delay or defraud any entity to which any of such Persons is now or will hereafter become indebted.

§6.29 Transaction in Best Interests of the Borrower; Consideration. The transaction evidenced by this Agreement and the other Loan Documents is in the best interests of the Borrower and the Pledgor. The direct and indirect benefits to inure to the Borrower or the Pledgor pursuant to this Agreement and the other Loan Documents constitute substantially more than “reasonably equivalent value” (as such term is used in §548 of the Bankruptcy Code) and “valuable consideration,” “fair value,” and “fair consideration,” (as such terms are used in any applicable state fraudulent conveyance law), in exchange for the benefits to be provided by the Borrower and the Pledgor pursuant to this Agreement and the other Loan Documents. The Borrower and the Pledgor further acknowledge and agree that the Borrower and the Pledgor constitute a single integrated and common enterprise and that each receives a benefit from the availability of credit under this Agreement.

§6.30 OFAC. Neither the Borrower nor the Pledgor is (or will be) (i) a Sanctioned Person, (ii) located, organized or resident in a Designated Jurisdiction or (iii) is or has been (within the previous five (5) years) engaged in any transaction with any Sanctioned Person or any Person who is located, organized or resident in any Designated Jurisdiction to the extent that such transactions would violate Sanctions. No Loan, nor the proceeds from any Loan, has been used, directly or indirectly, or has otherwise been made available to fund any activity or business in any Designated Jurisdiction or to fund any activity or business with any Sanctioned Person, or in any other manner that will result in a violation by any Loan Party or Subsidiary thereof, or any Lender or Agent, of Sanctions. Neither the making of the Loan hereunder nor the use of proceeds thereof will violate the Act, the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or successor statute thereto. The Borrower and its Subsidiaries are in compliance in all material respects with the Patriot Act.

§7. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees that, so long as any Loan or Note is outstanding or any Lender has any obligation to make any Loan:

§7.1 Punctual Payment. The Borrower will duly and punctually pay or cause to be paid the principal and interest on the Loan and all interest and fees provided for in this Agreement, all in accordance with the terms of this Agreement and the Notes, as well as all other sums owing pursuant to the Loan Documents in accordance with the terms hereof.

§7.2 Maintenance of Office. The Borrower will maintain its chief executive office at 1075 West Georgia Street, Suite 2600, Vancouver, BC Canada V6E 3C9, or at such other as the Borrower shall designate upon prompt written notice to the Agent and the Lenders, where notices, presentations and demands to or upon the Borrower in respect of the Loan Documents may be given or made.

§7.3 Records and Accounts. The Borrower and the Pledgor will (a) keep, and cause each of their respective Subsidiaries to keep true and accurate records and books of account in which full, true and correct entries will be made in accordance with GAAP (in each case, in all material respects) and (b) make adequate provision for the payment of all Taxes (including income taxes). Neither the Borrower nor any of its Subsidiaries shall, without the prior written consent of the Agent (x) make any material change to the accounting policies/principles used by such Person in preparing the financial statements and other information described in §6.4 or §7.4 (unless required by GAAP or other applicable accounting standards), or (y) change its fiscal year.

§7.4 Financial Statements, Certificates and Information. The Borrower will deliver or cause to be delivered to the Agent:

(a) not later than one hundred twenty (120) days after the end of each calendar year, the audited Consolidated balance sheet of the Pledgor and its Subsidiaries at the end of such year, and the related audited consolidated statements of income, changes in capital and cash flows for such year, setting forth in comparative form the figures for the previous fiscal year and all such statements to be in reasonable detail, prepared in accordance with GAAP, together with a certification by an Authorized Officer or the chief financial officer or accounting officer of the Borrower that the information contained in such financial statements fairly presents in all material respects the financial position of the Borrower and its Subsidiaries, and accompanied by an auditor’s report prepared without qualification as to the scope of the audit by a member firm of KPMG, LLP or another nationally recognized accounting firm, and any other information the Agent may reasonably request to complete a financial analysis of the Borrower and its Subsidiaries;

(b) not later than sixty (60) days after the end of each calendar quarter of each year, copies of the unaudited consolidated balance sheet of the Pledgor and its Subsidiaries and the Borrower and its Subsidiaries as at the end of such quarter, and the related unaudited consolidated statements of income and cash flows for the portion of the Borrower’s fiscal year then elapsed, all in reasonable detail and prepared in accordance with GAAP, together with a certification by an Authorized Officer or the chief financial officer or accounting officer of the Borrower that the information contained in such financial statements fairly presents in all material respects the financial position of the Borrower and its Subsidiaries on the date thereof (subject to year-end adjustments);

(c) simultaneously with the delivery of the financial statements referred to in subsections (a) and (b) above, a statement (a “Compliance Certificate”) certified by an Authorized Officer or the chief financial officer or chief accounting officer of the Borrower in the form of Exhibit G hereto (or in such other form as the Agent may reasonably approve from time to time) setting forth in reasonable detail computations evidencing compliance or non-compliance (as the case may be) with the covenants contained in §9. All income, expense, debt and value associated with Real Estate or other Investments disposed of during any quarter will be eliminated from calculations, where applicable. The Compliance Certificate shall be accompanied by copies of the statements of Net Operating Income for such calendar quarter for the Real Estate, prepared on a basis consistent with the statements furnished to Agent prior to the date hereof and otherwise in form and substance reasonably satisfactory to Agent, together with a certification by an Authorized Officer or the chief financial officer or chief accounting officer of the Borrower that the information contained in such statement fairly presents in all material respects Net Operating Income of the Real Estate for such periods;

(d) simultaneously with the delivery of the financial statements referred to in clause (a) above, the statement of all contingent liabilities involving amounts of $1,000,000 or more of the Borrower or the Pledgor which are not reflected in such financial statements or referred to in the notes thereto (including, without limitation, all guaranties, endorsements and other contingent obligations in respect of the indebtedness of others, and obligations to reimburse the issuer in respect of any letters of credit);

(e) simultaneously with the delivery of the financial statements referred to in subsections (a) and (b) above, upon request by Agent, a statement (i) listing the Real Estate owned by the Borrower and its Subsidiaries (or in which the Borrower or its Subsidiaries owns an interest), (ii) listing the Indebtedness (excluding, for the purposes hereof, the redemption obligations under the Partnership Agreement) of the Borrower and its Subsidiaries, which statement shall include, without limitation, a statement of the original principal amount of such Indebtedness and the current amount outstanding, the holder thereof, the maturity date and any extension options, the interest rate, the collateral provided for such Indebtedness and whether such Indebtedness is recourse or non-recourse;

(f) if requested by the Agent, promptly after they are filed with the Internal Revenue Service, copies of all annual federal income tax returns and amendments thereto of the Borrower;

(g) not later than December 15 of each year, a budget and business plan for the Borrower for the next calendar year;

(h) from time to time such other financial data and information in the possession of the Borrower or its Subsidiaries (including without limitation auditors’ management letters, status of litigation or investigations against the Borrower or the Pledgor and any settlement discussions relating thereto (unless the Borrower in good faith believe that such disclosure could result in a waiver or loss of attorney work product, attorney-client or any other applicable privilege), property inspection and environmental reports and information as to zoning and other legal and regulatory changes affecting the Borrower or the Pledgor) as the Agent may reasonably request.

Any material to be delivered pursuant to this §7.4 may be delivered electronically directly to Agent or made available to the Agent pursuant to an accessible website and the Lenders provided that such material is in a format reasonably acceptable to the Agent, and such material shall be deemed to have been delivered to the Agent and the Lenders upon the Agent’s receipt thereof or access to the website containing such material. Upon the request of the Agent, the Borrower shall deliver paper copies thereof to the Agent and the Lenders. The Borrower authorize the Agent to disseminate any such materials through the use of Intralinks, SyndTrak or any other electronic information dissemination system provided that system is secure and access thereto is protected by a password that is only disclosed to the Lenders, and the Borrower releases the Agent and the Lenders from any liability in connection therewith (other than the liability based on the Agent’s gross negligence or willful misconduct).

§7.5 Notices.

(a) Defaults. The Borrower and the Pledgor will promptly upon becoming aware of same notify the Agent in writing of the occurrence of any Default or Event of Default, which notice shall describe such occurrence with reasonable specificity and shall state that such notice is a “notice of default”. If any Person shall give any written notice or take any other action in respect of a claimed default (whether or not constituting an Event of Default) under this Agreement or under any note, evidence of indebtedness, indenture or other obligation to which or with respect to which the Borrower is a party or obligor, whether as principal or surety, and such default would permit the holder of such note or obligation or other evidence of indebtedness to accelerate the maturity thereof, which acceleration would either cause a Default or have a Material Adverse Effect, the Borrower and the Pledgor shall forthwith give written notice thereof to the Agent and each of the Lenders, describing the notice or action and the nature of the claimed default.

(b) Environmental Events. The Borrower or the Pledgor will give notice to the Agent within five (5) Business Days of becoming aware of (i) any known Release, or threat of Release, of any Hazardous Substances in violation of any applicable Environmental Law; (ii) any violation of any Environmental Law that the Borrower reports in writing or is reportable by such Person in writing (or for which any written report supplemental to any oral report is made) to any federal, state or local environmental agency or (iii) any written inquiry, proceeding, or investigation, including a written notice from any agency of potential environmental liability, of any federal, state or local environmental agency or board, that in the case of either clauses (i) – (iii) above involves any Real Estate and would reasonably be expected to have a Material Adverse Effect.

(c) Notification of Claims Against Collateral. The Borrower or the Pledgor will give notice to the Agent in writing within five (5) Business Days of becoming aware of any material setoff, claims (including, with respect to the Real Estate, environmental claims), withholdings or other defenses to which any of the Collateral, or the rights of the Agent or the Lenders with respect to the Collateral, are subject, which could have a Material Adverse Effect.

(d) Notice of Litigation and Judgments. The Borrower or the Pledgor will give notice to the Agent in writing within five (5) Business Days of becoming aware of any pending litigation and proceedings affecting the Borrower or to which the Borrower is a party involving an uninsured claim against the Borrower that could either cause a Default or could reasonably be expected to have a Material Adverse Effect and stating the nature and status of such litigation or proceedings. The Borrower or the Pledgor will give notice to the Agent, in writing, within ten (10) days of any judgment not covered by insurance, whether final or otherwise, against the Borrower or any of its Subsidiaries in an amount in excess of $5,000,000.

(e) ERISA. The Borrower or Pledgor will give notice to the Agent within ten (10) Business Days after Borrower or any ERISA Affiliate (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in §4043 of ERISA) with respect to any Guaranteed Pension Plan, Multiemployer Plan or Employee Benefit Plan, or knows that the plan administrator of any such plan has given or is required to give notice of any such reportable event; (ii) gives a copy of any notice (including any received from the trustee of a Multiemployer Plan) of complete or partial withdrawal liability under Title IV of ERISA; or (iii) receives any notice from the PBGC under Title IV or ERISA of an intent to terminate or appoint a trustee to administer any such plan, in each case if such event or occurrence would reasonably be expected to have a Material Adverse Effect.

(f) Notification of Lenders. Within five (5) Business Days after receiving any notice under this §7.5, the Agent will forward a copy thereof to each of the Lenders, together with copies of any certificates or other written information that accompanied such notice.

§7.6 Existence; Maintenance of Properties.

(a) The Borrower and the Pledgor will preserve and keep in full force and effect their legal existence in the jurisdiction of its incorporation or formation. The Borrower and the Pledgor will preserve and keep in full force all of their rights and franchises, the preservation of which is necessary to the conduct of their business, to the extent that the failure to do so could reasonably be expected to result in a Material Adverse Effect.

(b) The Borrower (i) will cause all of the Real Estate to be maintained and kept in good condition, repair and working order (ordinary wear and tear excepted) and supplied with all necessary equipment, and (ii) will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof in each case under (i) or (ii) above in which the failure to do so would cause a Material Adverse Effect.

§7.7 Insurance.

The Borrower or the Pledgor will, at their expense, procure and maintain with financially sound and reputable insurance companies not Affiliates of any Credit Party, insurance with respect to the properties and business of the Borrower and its Subsidiaries of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

§7.8 Taxes; Liens. The Borrower and the Pledgor will, and will cause their respective Subsidiaries to, duly pay and discharge, or cause to be paid and discharged, before the same shall become delinquent, all taxes, assessments and other governmental charges imposed upon them or upon the Real Estate, sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims

for labor, materials or supplies, that if unpaid might by law become a lien or charge upon any of its property or other Liens affecting any of the Collateral or other property of the Borrower or the Pledgor, or, with respect to their respective Subsidiaries that in case of any of the foregoing could reasonably be expected to have a Material Adverse Effect, provided that any such tax, assessment, charge or levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings which shall suspend the collection thereof with respect to such property, neither such property nor any portion thereof or interest therein would be in any danger of sale, forfeiture or loss by reason of such proceeding and the Borrower or any such Subsidiary shall have set aside on its books adequate reserves in accordance with GAAP; and provided, further, that forthwith upon the commencement of proceedings to foreclose any lien that may have attached as security therefor, the Borrower or any such Subsidiary either (i) will provide a bond issued by a surety reasonably acceptable to Agent and sufficient to stay all such proceedings or (ii) if no such bond is provided, will pay each such tax, assessment, charge or levy.

§7.9 Inspection of Books and Records. The Borrower and the Pledgor will, and will cause their respective Subsidiaries to, permit the Agent and the Lenders, at the Borrower’s expense (subject to the limitation set forth below) and upon reasonable prior notice, to visit any of the Real Estate during normal business hours, to examine the books of account of the Borrower and the Pledgor (and to make copies thereof and extracts therefrom) and to discuss the affairs, finances and accounts of the Borrower and the Pledgor with, and to be advised as to the same by, their respective officers, partners or members, all at such reasonable times and intervals as the Agent or any Lender may reasonably request, provided that so long as no Default or Event of Default shall have occurred and be continuing, the Borrower and the Pledgor shall not be required to pay for such visits and inspections more than once in any twelve (12) month period. The Agent and the Lenders shall use good faith efforts to coordinate such visits and inspections so as to minimize the interference with and disruption to the normal business operations of the Borrower, the Pledgor and their respective Subsidiaries.

§7.10 Compliance with Laws, Contracts, Licenses, and Permits. The Borrower and the Pledgor will comply in all respects with (i) all applicable laws and regulations now or hereafter in effect wherever its business is conducted, (ii) the provisions of its corporate charter, partnership agreement, limited liability company agreement or declaration of trust, as the case may be, and other charter documents and bylaws, (iii) all agreements and instruments to which it is a party or by which it or any of its properties may be bound, (iv) all applicable decrees, orders, and judgments, and (v) all licenses and permits required by applicable laws and regulations for the conduct of its business or the ownership, use or operation of its properties, except where a failure to so comply with any of clauses (i) through (v) could not reasonably be expected to have a Material Adverse Effect. If any authorization, consent, approval, permit or license from any officer, agency or instrumentality of any government shall become necessary or required in order that the Borrower or its Subsidiaries may fulfill any of its obligations hereunder, the Borrower or such Subsidiary will immediately take or cause to be taken all steps necessary to obtain such authorization, consent, approval, permit or license and furnish the Agent and the Lenders with evidence thereof, except where the failure to obtain the foregoing could not reasonably be expected to have a Material Adverse Effect. The Borrower and the Pledgor shall develop and implement such programs, policies and procedures as are necessary to comply with the Patriot Act and shall promptly advise the Agent in writing in the event that the Borrower and the Pledgor shall determine that any investors in the Borrower are in violation of such act.

§7.11 Further Assurances. The Borrower and the Pledgor will cooperate with the Agent and the Lenders and execute such further instruments and documents as the Lenders or the Agent shall reasonably request to carry out to their satisfaction the transactions contemplated by this Agreement and the other Loan Documents provided that such instrument and documents are consistent with the terms of the Loan Documents and do not impose any additional material obligations or expenses on the Borrower or the Pledgor.

§7.12 RESERVED.

§7.13 RESERVED..

§7.14 Business Operations. The Borrower and the Pledgor will not and will not permit any of their respective Subsidiaries to engage in any business other than to acquire, own, use, operate, manage, finance, sell, lease, sublease, exchange or otherwise dispose of office-type properties in the United States, directly or indirectly, and engage in any other activities related or incidental thereto or permitted pursuant to the terms hereof.

§7.15 RESERVED.

§7.16 Ownership of Real Estate. Without the prior written consent of Agent, all Real Estate and all interests (whether direct or indirect) of the Borrower or the Pledgor in any real estate assets now owned or leased or acquired or leased after the date hereof shall be owned or leased directly by the Pledgor or a Wholly Owned Subsidiary of the Pledgor; provided, however that the Pledgor shall be permitted to own or lease interests in Real Estate through non-Wholly Owned Subsidiaries and Unconsolidated Affiliates as permitted by §8.3.

§7.17 RESERVED.

§7.18 Plan Assets. The Borrower and the Pledgor will do, or cause to be done, all things necessary to ensure that none of the Real Estate will be deemed to be Plan Assets at any time.

§7.19 Further Covenants. The Borrower shall comply with the following covenants:

(a) The Borrower will not make or permit to be made, by voluntary or involuntary means, any transfer or encumbrance of its interest in the Pledgor, or any dilution of its interest in the Pledgor, that would result in a Change of Control; and

(b) The Borrower shall not dissolve, liquidate or otherwise wind-up its business, affairs or assets.

Nothing contained in this Agreement or the other Loan Documents shall prohibit, limit or restrict the Borrower, as the general partner of the Pledgor, from performing its obligations under the Partnership Agreement (including, without limitation, its obligations under Section 15.1 of the Partnership Agreement), provided that such obligations do not result in a Change of Control and no payment shall be made in cash (other than from proceeds of equity raised by the Borrower) in connection with any redemption obligations if an Event of Default shall be in existence.

§7.20 RESERVED..

§7.21 Borrower. The Equity Interests of the Borrower shall at all times be publicly traded on the New York Stock Exchange, or some other comparable stock exchange approved by the Agent. The Borrower shall at all times comply with all requirements of applicable laws necessary to maintain its status as a real estate investment trust under the Code, shall elect to be treated as a real estate investment trust and shall operate its business in compliance with the terms and conditions of this Agreement applicable to the Borrower and the other Loan Documents to which it is a party.

§8. NEGATIVE COVENANTS. The Borrower covenants and agrees that, so long as any Loan or Note is outstanding or any of the Lenders has any obligation to make any Loan:

§8.1 Restrictions on Indebtedness. The Borrower will not, and will not allow Pledgor to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than:

(i) Indebtedness to Lenders arising under any of the Loan Documents and Hedge Obligations to a Lender Hedge Provider;

(ii) Indebtedness under the Revolving Credit Facility;

(iii) current liabilities of the Borrower or the Pledgor incurred in the ordinary course of business but not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services;

(iv) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of §7.8;

(v) Indebtedness in respect of judgments only to the extent, for the period and for an amount not resulting in an Event of Default;

(vi) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business;

(vii) Indebtedness incurred to any other landowners, government or quasi-government or entity or similar entity in the ordinary course of business in connection with the construction or development of any Real Estate, including, without limitation, subdivision improvement agreements, development agreements, reimbursement agreements, infrastructure development agreements, agreements to construct or pay for on-site or off-site improvements and similar agreements incurred in the ordinary course of business in connection with the development of Real Estate or construction of infrastructure in connection therewith;

(viii) To the extent constituting Indebtedness, the redemption obligations set forth in the Partnership Agreement; and

(ix) Indebtedness of the Borrower and the Pledgor under carve-out guaranties and environmental indemnifications on first mortgage or other property related loans, provided the Borrower shall use commercially reasonably efforts to have any such guaranties or environmental indemnifications be provided by the Borrower before being provided by the Pledgor.

§8.2 Restrictions on Liens, Etc. Except as may otherwise be expressly permitted under the terms of the Revolving Credit Facility, the Borrower will not, and will not allow Pledgor to, (a) create or incur or suffer to be created or incurred or to exist any lien, security title, encumbrance, mortgage, pledge, negative pledge, charge, or other security interest of upon any Collateral pledged under the Loan Documents, or upon the income or profits therefrom; (b) acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement, except to the extent expressly permitted under the Revolving Credit Facility; (c) suffer to exist for a period of more than thirty (30) days after the same shall have been incurred any Indebtedness or claim or demand against any of them that if unpaid could by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever as to the Real Estate over any of their general creditors; (d) sell, assign, pledge or otherwise transfer any accounts, contract rights, general intangibles, chattel paper or instruments,

with or without recourse; or (e) incur or maintain any obligation to any holder of Indebtedness of any of such Persons which prohibits the creation or maintenance of any lien securing the Obligations (collectively, “Liens”); provided that notwithstanding anything to the contrary contained herein, the Borrower and the Pledgor may create or incur or suffer to be created or incurred or to exist:

(i) Liens not yet due or payable on properties to secure taxes, assessments and other governmental charges (excluding any Lien imposed pursuant to any of the provisions of ERISA) or claims for labor, material or supplies incurred in the ordinary course of business in respect of obligations not overdue by more than 60 days or are being contested in good faith and by appropriate proceedings diligently conducted with adequate reserves being maintained by Borrower in accordance with GAAP or not otherwise required to be paid or discharged under the terms of this Agreement or any of the other Loan Documents;

(ii) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance, old age pensions or other social security obligations;

(iii) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(iv) judgment liens and judgments that do not constitute an Event of Default;

(v) Liens in favor of the Agent and the Lenders under the Loan Documents to secure the Obligations and the Hedge Obligations;

(vi) Liens in favor of agent and lenders under the Revolving Credit Facility to secure the Obligations (as defined thereunder) and the Hedge Obligations (as defined thereunder); and

(vii) Liens and encumbrances on Real Estate expressly permitted under the Revolving Credit Facility.

§8.3 Restrictions on Investments.

(a) Neither the Borrower nor the Pledgor will make or permit to exist or to remain outstanding any Investment except Investments in:

(i) marketable direct or guaranteed obligations of the United States of America that mature within one (1) year from the date of purchase by the Borrower or the Pledgor;

(ii) marketable direct obligations of any of the following: Federal Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal Home Loan Banks, Federal National Mortgage Association, Government National Mortgage Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or any other agency or instrumentality of the United States of America;

(iii) demand deposits, certificates of deposit, bankers acceptances and time deposits of United States banks having total assets in excess of $100,000,000; provided, however, that the aggregate amount at any time so invested with any single bank having total assets of less than $1,000,000,000 will not exceed $200,000;

(iv) securities commonly known as “commercial paper” issued by a corporation organized and existing under the laws of the United States of America or any State which at the time of

purchase are rated by Moody’s Investors Service, Inc. or by Standard & Poor’s Corporation at not less than “P 1” if then rated by Moody’s Investors Service, Inc., and not less than “A 1”, if then rated by Standard & Poor’s Corporation;

(v) repurchase agreements having a term not greater than ninety (90) days and fully secured by securities described in the foregoing subsection (i), (iv) and (vi) with banks described in the foregoing subsection (iii) or with financial institutions or other corporations having total assets in excess of $500,000,000;

(vi) shares of so-called “money market funds” registered with the SEC under the Investment Company Act of 1940 which maintain a level per-share value, invest principally in investments described in the foregoing subsections (i) through (iv) and have total assets in excess of $50,000,000;

(vii) the acquisition of fee interests or long-term ground lease interests by the Borrower or the Pledgor (directly or indirectly) in real estate and investments incidental thereto, any and all construction and development related thereto;

(viii) Investments by Borrower and the Pledgor (directly or indirectly) in Subsidiaries of the Pledgor;

(ix) Investments which constitute Indebtedness to the extent such Indebtedness is permitted pursuant to §8.1;

(x) Investments in preferred equity (including preferred limited partnership interests) in entities owning real estate projects;

(xi) Investments in real estate including the acquisition of entities (or interest therein) that are either publicly traded or privately held that own, manage, develop or construct commercial real estate including without limitation REITS and other real estate related entities such as private real estate funds, real estate management companies, real estate development companies and debt funds, acquisition of real estate preferred securities or preferred equity investments and other equity interests, including common stock in companies related directly or indirectly to real estate; and

(xii) real estate debt of any kind or nature whatsoever, either directly or indirectly, including but not limited to origination of and participation in commercial real estate loans, mortgage notes, collateralized mortgage notes, collateralized mortgage back securities and collateralized debt obligations (including any subordinated promissory notes secured by real estate), and mezzanine loans.

(b) The Borrower shall not permit Investments by the Borrower and/or the Pledgor or the Borrower’s Subsidiaries to be outstanding at any one time which exceed the following:

(i) Investments in unimproved land to exceed five percent (5%) of Total Asset Value;

(ii) Investments in “ground up” construction and “ground up” development projects to exceed five percent (5%) of Total Asset Value;

(iii) Investments in Real Estate consisting of mortgage loans to exceed ten percent (10%) of Total Asset Value; and

(iv) Investments in Real Estate consisting of property other than office properties to exceed five percent (5%) of Total Asset Value;

Notwithstanding the foregoing, in no event shall the aggregate value of the Investments described in §8.3(b)(i) through (iv) exceed ten percent (10%) of Total Asset Value at any time.

For the purposes of this §8.3, the Investment of the Borrower or the Pledgor in any non-Wholly Owned Subsidiaries and Unconsolidated Affiliates will equal (without duplication) the sum of (i) such Person’s pro rata share of their Unconsolidated Affiliate’s Investment in Real Estate; plus (ii) such Person’s pro rata share of any other Investments valued at the GAAP book value.

§8.4 Merger, Consolidation. No Credit Party will become a party to any dissolution, liquidation, disposition of all or substantially all of its assets or business, merger, reorganization, consolidation or other business combination or agree to effect any asset acquisition, stock acquisition or other acquisition individually or in a series of transactions which may have a similar effect as any of the foregoing, in each case without the prior written consent of the Required Lenders except for (i) the merger or consolidation of one or more of the Subsidiaries of the Pledgor with and into the Pledgor (it being understood and agreed that in any such event the Pledgor will be the surviving Person), or (ii) the merger or consolidation of two or more Subsidiaries of the Pledgor.

§8.5 RESERVED.

§8.6 Compliance with Environmental Laws. Neither the Borrower nor the Pledgor will do any of the following: (a) use any of the Real Estate or any portion thereof as a facility for the handling, processing, storage or disposal of Hazardous Substances, except for quantities of Hazardous Substances used in the ordinary course of the Borrower’s, the Pledgor’s or its tenants’ business and in material compliance with all applicable Environmental Laws, (b) cause or permit to be located on any of the Real Estate any underground tank or other underground storage receptacle for Hazardous Substances except in material compliance with Environmental Laws, (c) generate any Hazardous Substances on any of the Real Estate except in material compliance with Environmental Laws, (d) conduct any activity at any Real Estate or use any Real Estate in any manner that would reasonably be expected to cause a Release of Hazardous Substances on, upon or into the Real Estate or any surrounding properties which would reasonably be expected to give rise to liability under CERCLA or any other Environmental Law, or (e) directly or indirectly transport or arrange for the transport of any Hazardous Substances (except in compliance with all Environmental Laws), except, any such use, generation, conduct or other activity described in clauses (a) to (e) of this §8.6 would not reasonably be expected to have a Material Adverse Effect.

Borrower and the Pledgor shall, except to the extent in conflict with any Property Loan Documents:

(i) in the event of any change in applicable Environmental Laws governing the assessment, release or removal of Hazardous Substances, take all reasonable action as required by such Laws, and

(ii) if any Release or disposal of Hazardous Substances which the Borrower or the Pledgor is legally obligated to contain, correct or otherwise remediate shall occur or shall have occurred on any Real Estate (including without limitation any such Release or disposal occurring prior to the acquisition or leasing of such Real Estate by the Borrower or the Pledgor), the Borrower or the Pledgor shall, after obtaining knowledge thereof, cause the performance of actions required by applicable Environmental Laws at the Real Estate in material compliance with all applicable Environmental Laws; provided, that each of the Borrower and the Pledgor shall be deemed to be in compliance with Environmental Laws for the purpose of this clause (ii) so long as it or a responsible third party with sufficient financial resources is taking

reasonable action to remediate or manage such event to the reasonable satisfaction of the Agent or has taken and is diligently pursuing a challenge to any such alleged legal obligation through appropriate administrative or judicial proceedings.

§8.7 Distributions. Pledgor shall not pay any Distribution to the partners, members or other owners of Pledgor, and Borrower shall not pay any Distribution to its partners, members, or other owners or shareholders, (a) if an Event of Default is in existence, except that each of Pledgor, Borrower and Subsidiary Credit Parties shall be permitted to make Distributions in an amount not less than the amount that would be required to be distributed by Borrower taking into account all other sources of net income in order to maintain REIT qualification, to eliminate any U.S. federal income tax liability, and to avoid the imposition of any excise tax for undistributed income, or (b) for Distributions made by the Borrower, in excess of, for each quarter end for the preceding twelve month period, one hundred percent (100%) of Core Funds From Operations, provided that if the Borrower’s equity raise in a subject quarter is in excess of 5% of its Consolidated Tangible Net Worth prior to such equity raise, the Distributions made on such additional equity will be excluded from the limitation in this subsection (b) during such calendar quarter and the next two succeeding calendar quarters

§8.8 Asset Sales. The Borrower and the Pledgor will not sell, transfer or otherwise dispose of any material asset other than pursuant to a bona fide arm’s length transaction or if replaced with an asset of equal value, and subject in all instances to §5.4 hereof.

§8.9 RESERVED..

§8.10 Restriction on Prepayment of Indebtedness. The Borrower and the Pledgor will not (a) voluntarily prepay, redeem, defease, purchase or otherwise retire the principal amount, in whole or in part, of any material Indebtedness other than the Obligations and the Hedge Obligations after the occurrence and continuance of any Event of Default; provided, that the foregoing shall not prohibit (x) the prepayment of Indebtedness which is financed primarily from the proceeds of a new loan or external equity which would otherwise be permitted by the terms of §8.1; (y) the prepayment, redemption, defeasance or other retirement of the principal of Indebtedness secured by Real Estate which is satisfied primarily from the proceeds of a sale of the Real Estate securing such Indebtedness or external equity; and (z) the prepayment, redemption, defeasance, purchase, or retirement, in whole or in part, of any amounts whatsoever under or in respect of the Revolving Credit Facility in accordance with the terms thereof, and (b) modify any document evidencing any material Indebtedness (other than the Obligations) to accelerate the maturity date of such Indebtedness after the occurrence and continuance of an Event of Default.

§8.11 Derivatives Contracts. Neither the Borrower nor the Pledgor shall contract, create, incur, assume or suffer to exist any Derivatives Contracts except for Derivative Contracts made in the ordinary course of business and not prohibited pursuant to §8.1 which are not secured by any portion of the collateral granted to the Agent under any of the Loan Documents (other than Hedge Obligations).

§8.12 Transactions with Affiliates. Neither the Borrower nor the Pledgor shall permit to exist or enter into any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate (but not including any Subsidiary of the Borrower), except (i) transactions in connection with the Management Agreements, (ii) transactions set forth on Schedule 6.15 attached hereto, (iii) transactions pursuant to the reasonable requirements of the business of such Person and upon fair and reasonable terms which are no less favorable to such Person than would be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate and (iv) distributions permitted under §8.7.

§8.13 Management Fees. The Borrower and the Pledgor shall not pay, and shall not permit to be paid, any property management, administrative, advisory or acquisition fees or other payments under any

Management Agreement or otherwise to Advisor or any other Person that is an Affiliate of the Borrower or the Pledgor in the event that a Default or Event of Default shall have occurred and be continuing; provided, however, that such fees and other payments may continue to accrue during the continuance of any such Default or Event of Default.

§9. FINANCIAL COVENANTS. The Borrower and the Pledgor covenant and agree that, so long as any Loan or Note is outstanding, the Borrower and the Pledgor, as applicable, shall comply with the following covenants. The Borrower’s and the Pledgor’s compliance with the following covenants shall be tested quarterly, as of the close of each fiscal quarter.

§9.1 Maximum Leverage Ratio. The Consolidated Leverage Ratio shall not exceed sixty five percent (65%).

§9.2 Minimum Liquidity. The Borrower’s Liquidity shall not be less than $3,000,000.

§9.3 Minimum Fixed Charge Coverage Ratio. The Borrower’s Fixed Charge Ratio shall not be less than 1.60 to 1.0.

§9.4 Minimum Tangible Net Worth. Consolidated Tangible Net Worth of the Borrower and its respective Subsidiaries shall not be less than the sum of (i) $181,007,270.00, plus (ii) an amount equal to 85% of the net proceeds from any issuance of common or preferred Equity Interests in Borrower or Pledgor following June 26, 2015, plus (iii) an amount equal to 85% of the equity in any Real Estate contributed to Pledgor or Borrower following June 26, 2015.

§9.5 Interest Rate Protection. The aggregate amount of Consolidated Indebtedness of the Borrower which accrues interest at a variable rate and is not otherwise subject to an interest rate hedging arrangement shall not exceed 30% of all Consolidated Indebtedness of the Borrower.

§10. CLOSING CONDITIONS. The obligation of the Lenders to make the Loan shall be subject to the satisfaction of the following conditions precedent:

§10.1 Loan Documents. Each of the Loan Documents shall have been duly executed and delivered by the respective parties thereto and shall be in full force and effect, subject to the notice requirements set forth in the Security Documents. The Agent shall have received a fully executed counterpart of each such document.

§10.2 Certified Copies of Organizational Documents. The Agent shall have received from each Credit Party a copy, certified as of a recent date by the appropriate officer of each State in which such Person is organized and a duly authorized officer, partner or member of such Person, as applicable, to be true and complete, of the partnership agreement, corporate charter or operating agreement and/or other organizational agreements of such Credit Party, as applicable, and its qualification to do business, as applicable, as in effect on such date of certification.

§10.3 Resolutions. All action on the part of each Credit Party, as applicable, necessary for the valid execution, delivery and performance by such Person of this Agreement and the other Loan Documents to which such Person is or is to become a party shall have been duly and effectively taken, and evidence thereof reasonably satisfactory to the Agent shall have been provided to the Agent.

§10.4 Incumbency Certificate; Authorized Signers. The Agent shall have received from each Credit Party an incumbency certificate, dated as of the Closing Date, signed by a duly authorized officer of such Person and giving the name and bearing a specimen signature of each individual who shall be

authorized to sign, in the name and on behalf of such Person, each of the Loan Documents to which such Person is or is to become a party. The Agent shall have also received from each Credit Party a certificate, dated as of the Closing Date, signed by a duly authorized representative of such Credit Party and giving the name and specimen signature of each Authorized Officer who shall be authorized to make Loan Requests and Conversion/Continuation Requests and to give notices and to take other action on behalf of such Credit Party under the Loan Documents.

§10.5 Opinion of Counsel. The Agent shall have received an opinion addressed to the Lenders and the Agent and dated as of the Closing Date from counsel to each Credit Party in form and substance reasonably satisfactory to the Agent.

§10.6 Payment of Fees. The Borrower shall have paid to the Agent the fees payable pursuant to §4.2.

§10.7 Performance; No Default. Each Credit Party shall have performed and complied with all terms and conditions herein required to be performed or complied with by it on or prior to the Closing Date, and on the Closing Date there shall exist no Default or Event of Default.

§10.8 Representations and Warranties. The representations and warranties made by the Credit Parties in the Loan Documents or otherwise made by or on behalf of the Credit Parties and their respective Subsidiaries in connection therewith or after the date thereof shall have been true and correct in all material respects when made and shall also be true and correct in all material respects on the Closing Date (unless such representations and warranties are limited by their terms to a specific date).

§10.9 Proceedings and Documents. All proceedings in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be reasonably satisfactory to the Agent and the Agent’s counsel in form and substance, and the Agent shall have received all information and such counterpart originals or certified copies of such documents and such other certificates, opinions, assurances, consents, approvals or documents as the Agent and the Agent’s counsel may reasonably require and are customarily required in connection with similar transactions.

§10.10 Representations True; No Default. Each of the representations and warranties made by or on behalf of the Credit Parties or any of their respective Subsidiaries contained in this Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with this Agreement shall be true in all material respects.

§10.11 Compliance Certificate. The Agent shall have received a Compliance Certificate dated as of the date of the Closing Date demonstrating compliance with each of the covenants calculated therein. Further, such Compliance Certificate shall include within the calculation of Net Operating Income any Real Estate which have been owned for less than a calendar quarter, and shall be based upon financial data and information with respect to Real Estate as of the end of the most recent calendar month as to which data and information is available.

§10.12 Consents. The Agent shall have received evidence reasonably satisfactory to the Agent that all necessary stockholder, partner, member or other consents required in connection with the consummation of the transactions contemplated by this Agreement and the other Loan Documents have been obtained, subject to the terms of the Security Documents.

§10.13 Other. The Agent shall have reviewed such other documents, instruments, certificates, opinions, assurances, consents and approvals as the Agent or the Agent’s Special Counsel may reasonably have requested and are customarily required in connection with similar transactions.

§11. RESERVED.

§12. EVENTS OF DEFAULT; ACCELERATION; ETC.

§12.1 Events of Default and Acceleration. If any of the following events (“Events of Default” or, if the giving of notice or the lapse of time or both is required, then, prior to such notice or lapse of time, “Defaults”) shall occur:

(a) The Borrower shall fail to pay any principal of the Loan when the same shall become due and payable, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment;

(b) The Borrower shall fail to pay any interest on the Loan within five (5) days of the date that the same shall become due and payable, or any fees or other sums due hereunder (other than any voluntary prepayment) or under any of the other Loan Documents within five (5) days after notice from Agent, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment;

(d) any of the Borrower or the other Credit Parties or any of their respective Subsidiaries shall fail to perform any other term, covenant or agreement contained in §9.1, §9.2, §9.3, or §9.4, in each case without prepaying a portion of the Loan in order to comply with such financial covenant within fifteen (15) days after written notice of a Default under this §12.1(d);

(e) any of the Borrower or the other Credit Parties shall fail to perform any other term, covenant or agreement contained herein or in any of the other Loan Documents which they are required to perform (other than those specified in the other subclauses of this §12 (including, without limitation, §12.2 below) or in the other Loan Documents), and such failure shall continue for thirty (30) days after the Borrower receives from Agent written notice thereof, and in the case of a default that cannot be cured within such thirty (30)-day period despite the Borrower’s diligent efforts but is susceptible of being cured within ninety (90) days of the Borrower’s receipt of the Agent’s original notice, then the Borrower shall have such additional time as is reasonably necessary to effect such cure, but in no event in excess of ninety (90) days from the Borrower’s receipt of Agent’s original notice; provided that the foregoing cure provisions shall not pertain to any default consisting of a failure to comply with §8.4, §8.7, or to any Default excluded from any provision of cure of defaults contained in any other of the Loan Documents and with respect to any defaults under §8.1, §8.2, §8.3, §8.4, §8.7 or §8.8, the thirty (30) day cure period described above shall be reduced to a period of ten (10) days and no additional cure period shall be provided with respect to such defaults;

(f) any material representation or warranty made by or on behalf of the Credit Parties or any of their respective Subsidiaries in this Agreement or any other Loan Document, or any report, certificate, financial statement, request for a Loan, or in any other document or instrument delivered pursuant to or in connection with this Agreement, any advance of a Loan, or any of the other Loan Documents shall prove to have been false in any material respect upon the date when made or deemed to have been made or repeated except to the extent it is not reasonably expected to have a Material Adverse Effect;

(g) the Borrower or the Pledgor or any Subsidiary defaults under any Recourse Indebtedness or Non-Recourse Indebtedness;

(h) any of the Borrower or other Credit Party, (i) shall make an assignment for the benefit of creditors, or admit in writing its general inability to pay or generally fail to pay its debts as they

mature or become due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator or receiver for it or any substantial part of its assets, (ii) shall commence any case or other proceeding relating to it under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, or (iii) shall take any action to authorize any of the foregoing;

(i) a petition or application shall be filed for the appointment of a trustee or other custodian, liquidator or receiver of any of the Borrower or other Credit Party or any substantial part of the assets of any thereof, or a case or other proceeding shall be commenced against any such Person under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, and any such Person shall indicate its approval thereof, consent thereto or acquiescence therein or such petition, application, case or proceeding shall not have been dismissed within ninety (90) days following the filing or commencement thereof;

(j) a decree or order is entered appointing a trustee, custodian, liquidator or receiver for any of the Borrower or other Credit Party or adjudicating any such Person, bankrupt or insolvent, or approving a petition in any such case or other proceeding, or a decree or order for relief is entered in respect of any such Person in an involuntary case under federal bankruptcy laws as now or hereafter constituted;

(k) there shall remain in force, undischarged, unsatisfied and unstayed, for more than sixty (60) days, one or more uninsured or unbonded final judgments against the Pledgor or the Borrower in excess of $5,000,000;

(l) any of the material Loan Documents shall be canceled, terminated, revoked or rescinded otherwise than in accordance with the terms thereof or the express prior written agreement, consent or approval of the Required Lenders, or any action at law, suit in equity or other legal proceeding to cancel, revoke or rescind any of the material Loan Documents shall be commenced by or on behalf of any of the Credit Parties, or any court or any other governmental or regulatory authority or agency of competent jurisdiction shall make a determination, or issue a judgment, order, decree or ruling, to the effect that any one or more of the material Loan Documents is illegal, invalid or unenforceable in accordance with the terms thereof;

(m) RESERVED;

(n) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall have occurred and such event reasonably would be expected to result in liability of any of the Credit Parties to pay money to the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and one of the following shall apply with respect to such event: (x) such event in the circumstances occurring reasonably would be expected to result in the termination of such Guaranteed Pension Plan by the PBGC or for the appointment by the appropriate United States District Court of a trustee to administer such Guaranteed Pension Plan; or (y) a trustee shall have been appointed by the United States District Court to administer such Plan; or (z) the PBGC shall have instituted proceedings to terminate such Guaranteed Pension Plan;

(o) any Change of Control shall occur; or

(p) then, and upon any such Event of Default, the Agent may, and upon the request of the Required Lenders shall, by notice in writing to the Borrower declare all amounts owing with respect to this Agreement, the Notes, and the other Loan Documents to be, and they shall thereupon forthwith become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; provided that in the event of any Event of Default specified in §12.1(h), §12.1(i) or §12.1(j), all such amounts shall become immediately due and payable automatically and without any requirement of presentment, demand, protest or other notice of any kind from any of the Lenders or the Agent.

§12.2 RESERVED.

§12.3 RESERVED.

§12.4 Remedies. In case any one or more Events of Default shall have occurred and be continuing, and whether or not the Lenders shall have accelerated the maturity of the Loan pursuant to §12.1, the Agent on behalf of the Lenders may, and upon the direction of the Required Lenders shall, proceed to protect and enforce their rights and remedies under this Agreement, the Notes and/or any of the other Loan Documents by suit in equity, action at law or other appropriate proceeding, including to the full extent permitted by applicable law the specific performance of any covenant or agreement contained in this Agreement and the other Loan Documents, the obtaining of the ex parte appointment of a receiver, and, if any amount shall have become due, by declaration or otherwise, the enforcement of the payment thereof. No remedy herein conferred upon the Agent or the holder of any Note is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law. Notwithstanding the provisions of this Agreement providing that the Loan may be evidenced by multiple Notes in favor of the Lenders, the Lenders acknowledge and agree that only the Agent may exercise any remedies arising by reason of a Default or Event of Default. If any Credit Party fails to perform any agreement or covenant contained in this Agreement or any of the other Loan Documents beyond any applicable period for notice and cure, the Agent may itself perform, or cause to be performed, any agreement or covenant of such Person contained in this Agreement or any of the other Loan Documents which such Person shall fail to perform, and the out-of-pocket costs of such performance, together with any reasonable expenses, including reasonable attorneys’ fees actually incurred (including attorneys’ fees incurred in any appeal) by the Agent in connection therewith, shall be payable by the Borrower upon demand and shall constitute a part of the Obligations and shall if not paid within five (5) days after demand bear interest at the rate for overdue amounts as set forth in this Agreement. In the event that all or any portion of the Obligations is collected by or through an attorney-at-law, the Borrower shall pay all costs of collection including, but not limited to, reasonable attorney’s fees.

§12.5 Distribution of Collateral Proceeds. In the event that, following the occurrence and during the continuance of any Event of Default, any monies are received in connection with the enforcement of any of the Loan Documents, or otherwise with respect to the realization upon any of the Collateral or other assets of Credit Parties, such monies shall be distributed for application as follows:

(a) First, to the payment of, or (as the case may be) the reimbursement of the Agent for or in respect of, all reasonable out-of-pocket costs, expenses, disbursements and losses which shall have been paid, incurred or sustained by the Agent in accordance with the terms of the Loan Documents to protect or preserve the Collateral or in connection with the collection of such monies by the Agent, for the exercise, protection or enforcement by the Agent of all or any of the rights, remedies, powers and privileges of the Agent or the Lenders under this Agreement or any of the other Loan Documents or in respect of the Collateral or in support of any provision of adequate indemnity to the Agent against any taxes or liens which by law shall have, or may have, priority over the rights of the Agent or the Lenders to such monies;

(b) Second, to all other Obligations and Hedge Obligations in such order or preference as the Required Lenders shall determine; provided, that (i) distributions in respect of such other Obligations shall include, on a pari passu basis, any Agent’s fee payable pursuant to §4.2; (ii) in the event that any Lender shall have wrongfully failed or refused to make an advance under Error! Reference source not found. and such failure or refusal shall be continuing, advances made by other Lenders during the pendency of such failure or

refusal shall be entitled to be repaid as to principal and accrued interest in priority to the other Obligations and Hedge Obligations described in this subsection (b); and (iv) Obligations owing to the Lenders with respect to each type of Obligation such as interest, principal, fees and expenses and Hedge Obligations shall be made among the Lenders, pro rata, and among the Lender Hedge Providers pro rata; and provided, further that the Required Lenders may in their discretion make proper allowance to take into account any Obligations and Hedge Obligations not then due and payable;

§13. SETOFF. Regardless of the adequacy of any Collateral, during the continuance of any Event of Default, any deposits (general or specific, time or demand, provisional or final, regardless of currency, maturity, or the branch where such deposits are held) or other sums credited by or due from any Lender or any Affiliate thereof to the Borrower or the Pledgor and any securities or other property of such parties in the possession of such Lender or any Affiliate may, without notice to the Borrower (any such notice being expressly waived by the Borrower) but with the prior written approval of the Agent, be applied to or set off against the payment of Obligations and any and all other liabilities, direct, or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, of the Borrower or the Pledgor to such Lender. Each of Lenders agrees with each other Lender that if such Lender shall receive from the Borrower or the Pledgor, whether by voluntary payment, exercise of the right of setoff, or otherwise, and shall retain and apply to the payment of the Note or Notes held by such Lender any amount in excess of its ratable portion of the payments received by all of the Lenders with respect to the Notes held by all of the Lenders, such Lender will make such disposition and arrangements with the other Lenders with respect to such excess, either by way of distribution, pro tanto assignment of claims, subrogation or otherwise as shall result in each Lender receiving in respect of the Notes held by it its proportionate payment as contemplated by this Agreement; provided that if all or any part of such excess payment is thereafter recovered from such Lender, such disposition and arrangements shall be rescinded and the amount restored to the extent of such recovery, but without interest.

§14. THE AGENT.

§14.1 Authorization. The Agent is authorized to take such action on behalf of each of the Lenders and to exercise all such powers as are hereunder and under any of the other Loan Documents and any related documents delegated to the Agent and all other powers not specifically reserved to the Lenders, together with such powers as are reasonably incident thereto, provided that no duties or responsibilities not expressly assumed herein or therein shall be implied to have been assumed by the Agent. The obligations of the Agent hereunder are primarily administrative in nature, and nothing contained in this Agreement or any of the other Loan Documents shall be construed to constitute the Agent as a trustee for any Lender or to create an agency or fiduciary relationship. The Agent shall act as the contractual representative of the Lenders hereunder, and notwithstanding the use of the term “Agent”, it is understood and agreed that the Agent shall not have any fiduciary duties or responsibilities to any Lender by reason of this Agreement or any other Loan Document and is acting as an independent contractor, the duties and responsibilities of which are limited to those expressly set forth in this Agreement and the other Loan Documents. The Borrower and any other Person shall be entitled to conclusively rely on a statement from the Agent that it has the authority to act for and bind the Lenders pursuant to this Agreement and the other Loan Documents.

§14.2 Employees and Agents. The Agent may exercise its powers and execute its duties by or through employees or agents and shall be entitled to take, and to rely on, advice of counsel concerning all matters pertaining to its rights and duties under this Agreement and the other Loan Documents. The Agent may utilize the services of such Persons as the Agent may reasonably determine, and all reasonable fees and expenses of any such Persons shall be paid by the Borrower.

§14.3 No Liability. Neither the Agent nor any of its shareholders, directors, officers or employees nor any other Person assisting them in their duties nor any agent, or employee thereof, shall be liable to the Lenders for (a) any waiver, consent or approval given or any action taken, or omitted to be taken, in good faith by it or them hereunder or under any of the other Loan Documents, or in connection herewith or therewith, or be responsible for the consequences of any oversight or error of judgment whatsoever, except that the Agent or such other Person, as the case may be, shall be liable for losses due to its willful misconduct or gross negligence as finally determined by a court of competent jurisdiction after the expiration of all applicable appeal periods or (b) any action taken or not taken by the Agent with the consent or at the request of the Required Lenders. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent for the account of the Lenders, unless the Agent has received notice from a Lender or the Borrower referring to the Loan Documents and describing with reasonable specificity such Default or Event of Default and stating that such notice is a “notice of default”.

§14.4 No Representations. The Agent shall not be responsible for the execution or validity or enforceability of this Agreement, the Notes, any of the other Loan Documents or any instrument at any time constituting, or intended to constitute, collateral security for the Notes, or for the value of any such collateral security or for the validity, enforceability or collectability of any such amounts owing with respect to the Notes, or for any recitals or statements, warranties or representations made herein, or any agreement, instrument or certificate delivered in connection therewith or in any of the other Loan Documents or in any certificate or instrument hereafter furnished to it by or on behalf of the Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or in any of the other Loan Documents. The Agent shall not be bound to ascertain whether any notice, consent, waiver or request delivered to it by the Borrower or any holder of any of the Notes shall have been duly authorized or is true, accurate and complete. The Agent has not made nor does it now make any representations or warranties, express or implied, nor does it assume any liability to the Lenders, with respect to the creditworthiness or financial condition of the Borrower or any of its Subsidiaries, or the value of the Collateral or any other assets of the Borrower or any of its Subsidiaries. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender, and based upon such information and documents as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender, based upon such information and documents as it deems appropriate at the time, continue to make its own credit analysis and decisions in taking or not taking action under this Agreement and the other Loan Documents. The Agent’s Special Counsel has only represented the Agent and KeyBank in connection with the Loan Documents and the only attorney client relationship or duty of care is between the Agent’s Special Counsel and the Agent or KeyBank. Each Lender has been independently represented by separate counsel on all matters regarding the Loan Documents and the granting and perfecting of liens in the Collateral.

§14.5 Payments.

(a) A payment by the Borrower to the Agent hereunder or under any of the other Loan Documents for the account of any Lender shall constitute a payment to such Lender. The Agent agrees to distribute to each Lender not later than one Business Day after the Agent’s receipt of good funds, determined in accordance with the Agent’s customary practices, such Lender’s pro rata share of payments received by the Agent for the account of the Lenders except as otherwise expressly provided herein or in any of the other Loan Documents. In the event that the Agent fails to distribute such amounts within one Business Day as provided above, the Agent shall pay interest on such amount at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.

(b) If in the reasonable opinion of the Agent the distribution of any amount received by it in such capacity hereunder, under the Notes or under any of the other Loan Documents might involve it in liability, it may refrain from making such distribution until its right to make such distribution shall have been adjudicated by a court of competent jurisdiction. If a court of competent jurisdiction shall adjudge that any amount received and distributed by the Agent is to be repaid, each Person to whom any such distribution shall have been made shall either repay to the Agent its proportionate share of the amount so adjudged to be repaid or shall pay over the same in such manner and to such Persons as shall be determined by such court.

§14.6 Holders of Notes. Subject to the terms of §18, the Agent may deem and treat the payee of any Note as the absolute owner or purchaser thereof for all purposes hereof until it shall have been furnished in writing with a different name by such payee or by a subsequent holder, assignee or transferee.

§14.7 Indemnity. The Lenders ratably agree hereby to indemnify and hold harmless the Agent from and against any and all claims, actions and suits (whether groundless or otherwise), losses, damages, costs, expenses (including any expenses for which the Agent has not been reimbursed by the Borrower as required by §15), and liabilities of every nature and character arising out of or related to this Agreement, the Notes, or any of the other Loan Documents or the transactions contemplated or evidenced hereby or thereby, or Agent’s actions taken hereunder or thereunder, except to the extent that any of the same shall be directly caused by the Agent’s willful misconduct or gross negligence as finally determined by a court of competent jurisdiction after the expiration of all applicable appeal periods. The agreements in this §14.7 shall survive the payment of all amounts payable under the Loan Documents.

§14.8 Agent as Lender. In its individual capacity, KeyBank shall have the same obligations and the same rights, powers and privileges in respect to its Commitment and the Loan made by it, and as the holder of any of the Notes as it would have were it not also the Agent.

§14.9 Resignation. The Agent may resign at any time by giving thirty (30) calendar days’ prior written notice thereof to the Lenders and the Borrower. The Required Lenders may remove the Agent from its capacity as the Agent in the event of the Agent’s gross negligence or willful misconduct. Upon any such resignation, or removal, the Required Lenders, subject to the terms of §18.1, shall have the right to appoint as a successor Agent, (i) any Lender or (ii) any bank whose senior debt obligations are rated not less than “A” or its equivalent by Moody’s or not less than “A” or its equivalent by S&P and which has a net worth of not less than $500,000,000. Unless a Default or Event of Default shall have occurred and be continuing, such successor Agent shall be reasonably acceptable to the Borrower and shall have a minimum Commitment of at least $5,000,000. If no successor Agent shall have been appointed and shall have accepted such appointment within thirty (30) days after the retiring Agent’s giving of notice of resignation or the Required Lender’s removal of the Agent, then the retiring or removed Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be (i) any Lender or (ii) any financial institution whose senior debt obligations are rated not less than “A2” or its equivalent by Moody’s or not less than “A” or its equivalent by S&P and which has a net worth of not less than $500,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent, and the retiring or removed Agent, shall be discharged from its duties and obligations hereunder as Agent. After any retiring Agent’s resignation or removal, the provisions of this Agreement and the other Loan Documents 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 Agent. Upon any change in Agent under this Agreement, the resigning or removed Agent shall execute such assignments of and amendments to the Loan Documents as may be necessary to substitute the successor Agent for the resigning or removed Agent.

§14.10 Duties in the Case of Enforcement. In case one or more Events of Default have occurred and shall be continuing, and whether or not acceleration of the Obligations shall have occurred, the Agent

may and, if (a) so requested by the Required Lenders and (b) the Lenders have provided to the Agent such additional indemnities and assurances in accordance with their respective Commitment Percentages against expenses and liabilities as the Agent may reasonably request, shall proceed to exercise all or any legal and equitable and other rights or remedies as it may have; provided, however, that unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem to be in the best interests of the Lenders. Without limiting the generality of the foregoing, if the Agent reasonably determines payment is in the best interest of all Lenders, the Agent may without the approval of the Lenders pay taxes and insurance premiums and spend money for maintenance, repairs or other expenses which may be necessary to be incurred, and the Agent shall promptly thereafter notify the Lenders of such action. Each Lender shall, within thirty (30) days of request therefor, pay to the Agent its Commitment Percentage of the reasonable costs incurred by the Agent in taking any such actions hereunder to the extent that such costs shall not be promptly reimbursed to the Agent by the Borrower or out of the Collateral within such period. The Required Lenders may direct the Agent in writing as to the method and the extent of any such exercise, the Lenders hereby agreeing to indemnify and hold the Agent harmless in accordance with their respective Commitment Percentages from all liabilities incurred in respect of all actions taken or omitted in accordance with such directions, except to the extent that any of the same shall be directly caused by the Agent’s willful misconduct or gross negligence as finally determined by a court of competent jurisdiction after the expiration of all applicable appeal periods, provided that the Agent need not comply with any such direction to the extent that the Agent reasonably believes the Agent’s compliance with such direction to be unlawful in any applicable jurisdiction or commercially unreasonable under the UCC as enacted in any applicable jurisdiction.

§14.11 Bankruptcy. In the event a bankruptcy or other insolvency proceeding is commenced by or against the Borrower with respect to the Obligations, the Agent shall have the sole and exclusive right to file and pursue a joint proof claim on behalf of all Lenders. Any votes with respect to such claims or otherwise with respect to such proceedings shall be subject to the vote of the Required Lenders or all of the Lenders as required by this Agreement. Each Lender irrevocably waives its right to file or pursue a separate proof of claim in any such proceedings unless Agent fails to file such claim within thirty (30) days after receipt of written notice from the Lenders requesting that Agent file such proof of claim.

§14.12 RESERVED.

§14.13 Reliance by the Agent. The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by an Authorized Officer. The Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, that by its terms must be fulfilled to the satisfaction of a Lender, the Agent may presume that such condition is satisfactory to such Lender unless the Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

§14.14 Approvals. If consent is required for some action under this Agreement, or except as otherwise provided herein an approval of the Lenders or the Required Lenders is required or permitted under this Agreement, each Lender agrees to give the Agent, within ten (10) days of receipt of the request for action together with all reasonably requested information related thereto (or such lesser period of time required by the terms of the Loan Documents), notice in writing of approval or disapproval (collectively

“Directions”) in respect of any action requested or proposed in writing pursuant to the terms hereof. To the extent that any Lender does not approve any recommendation of the Agent, such Lender shall in such notice to the Agent describe the actions that would be acceptable to such Lender. If consent is required for the requested action, any Lender’s failure to respond to a request for Directions within the required time period shall be deemed to constitute a Direction to take such requested action. In the event that any recommendation is not approved by the requisite number of Lenders and a subsequent approval on the same subject matter is requested by the Agent, then for the purposes of this paragraph each Lender shall be required to respond to a request for Directions within five (5) Business Days of receipt of such request. The Agent and each Lender shall be entitled to assume that any officer of the other Lenders delivering any notice, consent, certificate or other writing is authorized to give such notice, consent, certificate or other writing unless the Agent and such other Lenders have otherwise been notified in writing.

§14.15 Borrower Not Beneficiary. Except for the provisions of §14.9 relating to the appointment of a successor Agent, the provisions of this §14 are solely for the benefit of the Agent and the Lenders, may not be enforced by the Borrower, and except for the provisions of §14.9, may be modified or waived without the approval or consent of the Borrower.

§14.16 Defaulting Lenders.

(a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Legal Requirements:

(i) That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in §27.

(ii) Any payment of principal, interest, fees or other amounts received by the Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, or otherwise, and including any amounts made available to the Agent by that Defaulting Lender pursuant to §13), shall be applied at such time or times as may be determined by the Agent as follows: first, to the payment of any amounts owing by that Defaulting Lender to the Agent hereunder; second, if so determined by the Agent, to be held as cash collateral for future funding obligations of that Defaulting Lender of any participation; third, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent; fourth, if so determined by the Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loan under this Agreement; fifth, so long as no Default or Event of Default exists or non-defaulting Lenders have been paid in full all amounts then due, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction ; provided that if (x) such payment is a payment of the principal amount of any Loan in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loan were made at a time when the conditions set forth in §11 were satisfied or waived, such payment shall be applied solely to pay the Loan of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loan of that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this §14.16(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) During any period that a Lender is a Defaulting Lender, the Borrower may, by giving written notice thereof to the Agent, such Defaulting Lender, and the other Lenders, demand that

such Defaulting Lender assign its Commitment to an Eligible Assignee subject to and in accordance with the provisions of §18.1. No party hereto shall have any obligation whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee. In addition, any Lender who is not a Defaulting Lender may, but shall not be obligated, in its sole discretion, to acquire the face amount of all or a portion of such Defaulting Lender’s Commitment via an assignment subject to and in accordance with the provisions of §18.1. No such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Agent in an aggregate amount sufficient with any applicable amounts held pursuant to the immediately preceding subsection (ii), upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Agent, the applicable pro rata share of Loan previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agent, or any Lender hereunder (and interest accrued thereon). Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under any Legal Requirement without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(b) Defaulting Lender Cure. If the Borrower and the Agent agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that the Lender will, to the extent applicable, purchase that portion of outstanding Loan of the other Lenders or take such other actions as the Agent may determine to be necessary to cause the Loan to be held on a pro rata basis by the Lenders in accordance with their Commitment Percentages (without giving effect to §14.16(a)(iv)), whereupon that the Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to the Lender will constitute a waiver or release of any claim of any party hereunder arising from that the Lender’s having been a Defaulting Lender.

§14.17 Reliance on Hedge Provider. For purposes of applying payments received in accordance with §12.5, the Agent shall be entitled to rely upon the trustee, paying agent or other similar representative (each, a “Representative”) or, in the absence of such a Representative, upon the holder of the Hedge Obligations for a determination (which each holder of the Hedge Obligations agrees (or shall agree) to provide upon request of the Agent) of the outstanding Hedge Obligations owed to the holder thereof. Unless it has actual knowledge (including by way of written notice from such holder) to the contrary, the Agent, in acting hereunder, shall be entitled to assume that no Hedge Obligations are outstanding.

§15. EXPENSES. The Borrower agrees to pay (a) the reasonable out-of-pocket costs incurred by the Agent of producing and reproducing this Agreement, the other Loan Documents and the other agreements and instruments mentioned herein, (b) any recording, mortgage, documentary or intangibles taxes in connection with the Loan Documents, (c) all title insurance premiums, engineer’s fees incurred by the Agent, third party environmental reviews incurred by the Agent and the reasonable fees, expenses and disbursements of the outside counsel to the Agent and any local counsel to the Agent incurred in connection with the preparation, administration, or interpretation of the Loan Documents and other instruments mentioned herein, and amendments, modifications, approvals, consents or waivers hereto or hereunder, (d) all other reasonable out of pocket fees, expenses and disbursements (other than Taxes unless such payment is otherwise required pursuant to the terms of this Agreement) of the Agent incurred by the Agent in connection with the preparation or interpretation of the Loan Documents and other instruments mentioned herein, and the third party out-of-pocket costs and expenses incurred in connection with the syndication of the Commitments

pursuant to §18 hereof, and (e) without duplication, all out-of-pocket expenses (including reasonable attorneys’ fees and costs, and the fees and costs of appraisers, engineers, investment bankers or other experts retained by any Lender or the Agent) incurred by any Lender or the Agent in connection with (i) the enforcement of or preservation of rights under any of the Loan Documents against the Credit Parties or the administration thereof after the occurrence of a Default or Event of Default and (ii) any litigation, proceeding or dispute whether arising hereunder or otherwise, in any way related to the Agent’s or any of the Lenders’ relationship with the Borrower (provided that any attorneys’ fees and costs pursuant to this clause (e) shall be limited to those incurred by the Agent and one other counsel with respect to the Lenders as a group), (f) all reasonable fees, expenses and disbursements of the Agent incurred in connection with UCC searches and UCC filings, (g) all reasonable out-of-pocket fees, expenses and disbursements (including reasonable attorneys’ fees and costs) which may be incurred by Agent in connection with the execution and delivery of this Agreement and the other Loan Documents (without duplication of any of the items listed above), and (h) all expenses relating to the use of Intralinks, SyndTrak or any other similar system for the dissemination and sharing of documents and information in connection with the Loan in accordance with the terms of this Agreement. The covenants of this §15 shall survive the repayment of the Loan and the termination of the obligations of the Lenders hereunder.

§16. INDEMNIFICATION. The Borrower and the Pledgor, jointly and severally, agree to indemnify and hold harmless the Agent, the Lenders, and each director, officer, employee, agent and Affiliate thereof and Person who controls the Agent or any Lender against any and all claims, actions and suits, whether groundless or otherwise, and from and against any and all liabilities, losses, damages and expenses of every nature and character arising out of or relating to any claim, action, suit or litigation arising out of this Agreement or any of the other Loan Documents or the transactions contemplated hereby and thereby including, without limitation, (a) any and all claims for brokerage, leasing, finders or similar fees which may be made relating to the Loan by parties claiming by or through the Borrower or the Pledgor, (b) any condition of the Real Estate, (c) any actual or proposed use by the Borrower or the Pledgor of the proceeds of the Loan, (d) any actual or alleged infringement of any patent, copyright, trademark, service mark or similar right of the Borrower and the Pledgor, (e) the Borrower or the Pledgor entering into or performing this Agreement or any of the other Loan Documents, (f) any actual or alleged violation of any law, ordinance, code, order, rule, regulation, approval, consent, permit or license relating to any Real Estate, (g) with respect to the Borrower or the Pledgor and their respective properties and assets, the violation of any Environmental Law, the Release or threatened Release of any Hazardous Substances or any action, suit, proceeding or investigation brought or threatened with respect to any Hazardous Substances (including, but not limited to, claims with respect to wrongful death, personal injury, nuisance or damage to property), and (h) to the extent used by the Borrower or the Pledgor, any use of Intralinks, SyndTrak or any other system for the dissemination and sharing of documents and information, in each case including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding; provided, however, that the Borrower and the Pledgor shall not be obligated under this §16 or otherwise to indemnify any Person for liabilities arising from such Person’s own gross negligence or willful misconduct as determined by a court of competent jurisdiction after the exhaustion of all applicable appeal periods. In litigation, or the preparation therefor, the Lenders and the Agent shall be entitled to select a single law firm as their own counsel and, in addition to the foregoing indemnity, the Borrower and the Pledgor agree to pay promptly the reasonable fees and expenses of such counsel. If, and to the extent that the obligations of the Borrower or the Pledgor under this §16 are unenforceable for any reason, the Borrower and the Pledgor hereby agree to make the maximum contribution to the payment in satisfaction of such obligations which is permissible under applicable law. The provisions of this §16 shall survive the repayment of the Loan and the termination of the obligations of the Lenders hereunder for a period of one year.

§17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations and warranties made herein, in the Notes, in any of the other Loan Documents or in any documents or other papers delivered by or on behalf of the Borrower or any of its Subsidiaries pursuant hereto or thereto shall be deemed to have

been relied upon by the Lenders and the Agent, notwithstanding any investigation heretofore or hereafter made by any of them, and shall survive the making by the Lenders of any of the Loan, as herein contemplated, and shall continue in full force and effect so long as any amount due under this Agreement or the Notes or any of the other Loan Documents remains outstanding. The indemnification obligations of the Borrower and the Pledgor provided herein and in the other Loan Documents shall survive the full repayment of amounts due and the termination of the obligations of the Lenders hereunder and thereunder to the extent provided herein and therein for a period of one year. All statements contained in any certificate delivered to any Lender or the Agent at any time by or on behalf of the Borrower or any of its Subsidiaries pursuant hereto or in connection with the transactions contemplated hereby shall constitute representations and warranties by such Person hereunder.

§18. ASSIGNMENT AND PARTICIPATION.

§18.1 Conditions to Assignment by the Lenders. Except as provided herein, each Lender may assign to one or more Eligible Assignee all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment Percentage and Commitment and the same portion of the Loan at the time owing to it and the Notes held by it); provided that (a) the Agent and the Issuing Lender shall have each given its prior written consent to such assignment, which consent shall not be unreasonably withheld or delayed, (b) each such assignment shall be of a constant, and not a varying, percentage of all the assigning Lender’s rights and obligations under this Agreement with respect to the Commitment in the event an interest in the Loan is assigned, (c) the parties to such assignment shall execute and deliver to the Agent, for recording in the Register (as hereinafter defined) an Assignment and Acceptance Agreement in the form of Exhibit H annexed hereto, together with any Notes subject to such assignment, (d) in no event shall any assignment be to any Person controlling, controlled by or under common control with, or which is not otherwise free from influence or control by, the Borrower or the Pledgor, and (e) such assignee shall acquire an interest in the Loan of not less than $5,000,000 and integral multiples of $1,000,000 in excess thereof (or if less, the remaining Loan of the assignor), unless waived by the Agent, and so long as no Default or Event of Default exists hereunder, the Borrower. Upon execution, delivery, acceptance and recording of such Assignment and Acceptance Agreement, (i) the assignee thereunder shall be a party hereto and all other Loan Documents executed by the Lenders and, to the extent provided in such Assignment and Acceptance Agreement, have the rights and obligations of a Lender hereunder, (ii) the assigning the Lender shall, upon payment to the Agent of the registration fee referred to in §18.2, be released from its obligations under this Agreement arising after the effective date of such assignment with respect to the assigned portion of its interests, rights and obligations under this Agreement, and (iii) the Agent may unilaterally amend Schedule 1.1 to reflect such assignment. In connection with each assignment, the assignee shall represent and warrant to the Agent, the assignor and each other Lender as to whether such assignee is controlling, controlled by, under common control with or is not otherwise free from influence or control by, the Borrower and the Pledgor.

§18.2 Register. The Agent shall maintain on behalf of the Borrower a copy of each assignment delivered to it and a register or similar list (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitment Percentages of and principal amount of and interest on the Loan owing to the Lenders from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and the Lenders at any reasonable time and from time to time upon reasonable prior notice. Upon each such recordation, the assigning Lender agrees to pay to the Agent a registration fee in the sum of $3,500.

§18.3 New Notes. Upon its receipt of an Assignment and Acceptance Agreement executed by the parties to such assignment, together with each Note subject to such assignment, the Agent shall record

the information contained therein in the Register. Within five (5) Business Days after receipt of notice of such assignment from the Agent, the Borrower, at its own expense, shall execute and deliver to the Agent, in exchange for each surrendered Note, a new Note (if requested by the subject Lender) to the order of such assignee in an amount equal to the amount assigned to such assignee pursuant to such Assignment and Acceptance Agreement and, if the assigning Lender has retained some portion of its obligations hereunder, a new Note to the order of the assigning Lender in an amount equal to the amount retained by it hereunder. Such new Notes shall provide that they are replacements for the surrendered Notes, shall be in an aggregate principal amount equal to the aggregate principal amount of the surrendered Notes, shall be dated the effective date of such Assignment and Acceptance Agreement and shall otherwise be in substantially the form of the assigned Notes. The surrendered Notes shall be canceled and returned to the Borrower.

§18.4 Participations. Each Lender may sell participations to one or more Lenders or other entities in all or a portion of such Lender’s rights and obligations under this Agreement and the other Loan Documents; provided that (a) any such sale or participation shall not affect the rights and duties of the selling Lender hereunder, (b) such participation shall not entitle such participant to any rights or privileges under this Agreement or any Loan Documents, including without limitation, rights granted to the Lenders under §4.8, §4.9 and §4.10, (c) such participation shall not entitle the participant to the right to approve waivers, amendments or modifications, (d) such participant shall have no direct rights against the Borrower, (e) such participant shall be entitled to the benefits of §4.4(b) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to §18.1, but shall not be entitled to receive any greater payment under §4.4(b) than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, (f) such sale is effected in accordance with all applicable laws, (g) such participant shall not be a Person controlling, controlled by or under common control with, or which is not otherwise free from influence or control by any of the Borrower, and (h) unless an Event of Default is in existence, such participant is not a Competitor; provided, however, such Lender may agree with the participant that it will not, without the consent of the participant, agree to (i) increase, or extend the term or extend the time or waive any requirement for the reduction or termination of, such Lender’s Commitment, (ii) extend the date fixed for the payment of principal of or interest on the Loan or portions thereof owing to such Lender (other than pursuant to an extension of the Maturity Date pursuant to §2.13), (iii) reduce the amount of any such payment of principal, (iv) reduce the rate at which interest is payable thereon or (v) release the Borrower (except as otherwise permitted under §5.2). Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loan or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.

§18.5 Pledge by Lender. Any Lender may at any time pledge all or any portion of its interest and rights under this Agreement (including all or any portion of its Note) to any of the twelve Federal Reserve Banks organized under §4 of the Federal Reserve Act, 12 U.S.C. §341 or any other central banking authority, or to such other Person as the Agent elects and so long as no Default or Event of Default has occurred and is continuing, the Borrower may approve the identity of such other Person. No such pledge or the enforcement thereof shall release the pledgor Lender from its obligations hereunder or under any of the other Loan Documents.

§18.6 No Assignment by the Borrower. The Borrower shall not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each of the Lenders.

§18.7 Disclosure. The Borrower agrees to promptly and reasonably cooperate with any Lender in connection with any proposed assignment or participation of all or any portion of its Commitment. The Borrower agrees that, in addition to disclosures made in accordance with standard banking practices, any Lender may disclose information obtained by such Lender pursuant to this Agreement to assignees or participants and potential assignees or participants hereunder, but in all events subject to the terms hereof. Each Lender agrees for itself that it shall use reasonable efforts in accordance with its customary procedures to hold confidential all non-public information obtained from the Borrower that has been identified in writing as confidential by any of them, and shall use reasonable efforts in accordance with its customary procedures to not disclose such information to any other Person, it being understood and agreed that, notwithstanding the foregoing, a Lender may make (a) disclosures to its participants (provided such Persons are advised of the provisions of this §18.7, and agree to destroy or return all confidential information if it does not become an assignee or participant), (b) disclosures to its directors, officers, employees, Affiliates, accountants, appraisers, legal counsel and other professional advisors of such Lender (provided that such Persons who are not employees of such Lender are advised of the provision of this §18.7), (c), disclosures customarily provided or reasonably required by any potential or actual bona fide assignee, transferee or participant or their respective directors, officers, employees, Affiliates, accountants, appraisers, legal counsel and other professional advisors in connection with a potential or actual assignment or transfer by such Lender of any Loan or any participations therein (provided such Persons are advised of the provisions of this §18.7), (d) disclosures to bank regulatory authorities or self-regulatory bodies with jurisdiction over such Lender, or (e) disclosures required or requested by any other governmental authority or representative thereof or pursuant to legal process; provided that, unless specifically prohibited by applicable law or court order, each Lender shall notify the Borrower of any request by any governmental authority or representative thereof prior to disclosure (other than any such request in connection with any examination of such Lender by such government authority) for disclosure of any such non-public information prior to disclosure of such information and provide (if permitted under applicable Legal Requirements) the Borrower a reasonable opportunity to challenge the disclosure or require that such disclosure be made under seal. In addition, each Lender may make disclosure of such information to any contractual counterparty in swap agreements or such contractual counterparty’s professional advisors (so long as such contractual counterparty or professional advisors agree to be bound by the provisions of this §18.7). Non-public information shall not include any information which is or subsequently becomes publicly available other than as a result of a disclosure of such information by a Lender, or prior to the delivery to such Lender is within the possession of such Lender if such information is not known by such Lender to be subject to another confidentiality agreement with or other obligations of secrecy to the Borrower, or is disclosed with the prior approval of the Borrower. Nothing herein shall prohibit the disclosure of non-public information to the extent necessary to enforce the Loan Documents.

§18.8 Titled Agents. The Titled Agents shall not have any additional rights or obligations under the Loan Documents, except for those rights, if any, as a Lender.

§18.9 Amendments to Loan Documents. Upon any such assignment or participation, the Borrower shall, upon the request of the Agent, enter into such documents as may be reasonably required by the Agent to modify the Loan Documents to reflect such assignment or participation.

§19. NOTICES. Each notice, demand, election or request provided for or permitted to be given pursuant to this Agreement (hereinafter in this §19 referred to as “Notice”) must be in writing and shall be deemed to have been properly given or served by personal delivery or by telegraph or by sending same by overnight courier or by depositing same in the United States Mail, postpaid and registered or certified, return receipt requested, and addressed to the parties at the address set forth on Schedule 19.

Each Notice shall be effective upon being personally delivered or upon being sent by overnight courier or upon being deposited in the United States Mail as aforesaid, or if transmitted by telegraph, telecopy, telefax or telex is permitted, upon being sent and confirmation of receipt. The time period in which a response to such Notice must be given or any action taken with respect thereto (if any), however, shall commence to run from the date of receipt if personally delivered or sent by overnight courier, or if so deposited in the United States Mail, the earlier of three (3) Business Days following such deposit or the date of receipt as disclosed on the return receipt. Rejection or other refusal to accept or the inability to deliver because of changed address for which no notice was given shall be deemed to be receipt of the Notice sent. By giving at least fifteen (15) days prior Notice thereof, the Borrower, a Lender or the Agent shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America or Canada.

§20. RELATIONSHIP. Neither the Agent nor any Lender has any fiduciary relationship with or fiduciary duty to the Borrower or its Subsidiaries arising out of or in connection with this Agreement or the other Loan Documents or the transactions contemplated hereunder and thereunder, and the relationship between each Lender and the Agent, and the Borrower is solely that of a lender and borrower, and nothing contained herein or in any of the other Loan Documents shall in any manner be construed as making the parties hereto partners, joint venturers or any other relationship other than lender and borrower.

§21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401. THE BORROWER, THE PLEDGOR, THE AGENT AND THE LENDERS AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK (INCLUDING ANY FEDERAL COURT SITTING THEREIN). THE BORROWER, THE PLEDGOR, THE AGENT AND THE LENDERS FURTHER ACCEPT, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT AND IRREVOCABLY (i) AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY WITH RESPECT TO THIS AGREEMENT AND (ii) WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION ANY OF THEM MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH A COURT IS AN INCONVENIENT FORUM. IN ADDITION TO THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT OR ANY LENDER MAY BRING ACTION(S) FOR ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE ANY COLLATERAL OR ASSETS OF THE BORROWER OR THE PLEDGOR, EXIST AND THE BORROWER AND THE PLEDGOR, CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS. THE BORROWER AND THE PLEDGOR EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE FOREGOING CHOICE OF NEW YORK LAW WAS A MATERIAL INDUCEMENT TO THE AGENT AND THE LENDERS IN ENTERING INTO THIS AGREEMENT AND IN MAKING THE LOANS HEREUNDER.

§22. HEADINGS. The captions in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof.

§23. COUNTERPARTS. This Agreement and any amendment hereof may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. In proving this Agreement it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought.

§24. ENTIRE AGREEMENT, ETC. This Agreement and the Loan Documents are intended by the parties as the final, complete and exclusive statement of the transactions evidenced by this Agreement and the Loan Documents. All prior or contemporaneous promises, agreements and understandings, whether oral or written, are deemed to be superseded by this Agreement and the Loan Documents, and no party is relying on any promise, agreement or understanding not set forth in this Agreement and the Loan Documents. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated, except as provided in §27.

§25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. EACH OF THE BORROWER, THE PLEDGOR, THE AGENT AND THE LENDERS HEREBY WAIVE ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, PUNITIVE OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS §25. EACH PARTY ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THIS §25 WITH LEGAL COUNSEL AND THAT EACH PARTY AGREES TO THE FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.

§26. DEALINGS WITH BORROWER. The Agent, the Lenders and their affiliates may accept deposits from, extend credit to, invest in, act as trustee under indentures of, serve as financial advisor of, and generally engage in any kind of banking, trust or other business with the Borrower and its Subsidiaries or any of their Affiliates regardless of the capacity of the Agent or the Lender hereunder. The Lenders acknowledge that, pursuant to such activities, KeyBank or its Affiliates may receive information regarding such Persons (including information that may be subject to confidentiality obligations in favor of such Person) and acknowledge that the Agent shall be under no obligation to provide such information to them.

§27. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly provided in this Agreement, any consent or approval required or permitted by this Agreement may be given, and any material term of this Agreement or of any other instrument related hereto or mentioned herein may be amended, and the performance or observance by the Borrower or the Pledgor of any terms of this Agreement or such other instrument or the continuance of any Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Required Lenders and, with respect to any amendment of any term of this Agreement or of any other instrument related hereto or mentioned herein, the Borrower or the other Credit Parties, as the case may be. Notwithstanding the foregoing, none of the following may occur without the written consent of each Lender adversely affected thereby: (a) a reduction in the rate of interest on the Notes (other than a reduction or waiver of default interest); (b) an increase in the amount of the Commitments of the Lenders (except as provided in §18.1); (c) a forgiveness, reduction or waiver of the principal of any unpaid Loan or any interest thereon or fee payable under the Loan Documents; (d) a change in the amount of any fee payable to a Lender hereunder; (e) the postponement of any date fixed for any payment of principal of or interest on the Loan; (f) an extension of the Maturity Date; (g) a change in the manner of distribution of any payments to the Lenders

or the Agent; (h) the release of the Borrower, other Credit Party, or any Collateral except as otherwise provided in §5.2; (i) an amendment of the definition of the Required Lenders or of any requirement for consent by all of the Lenders; (j) any modification to require a Lender to fund a pro rata share of a request for an advance of the Loan made by the Borrower other than based on its Commitment Percentage; (k) an amendment to this §27; or (l) an amendment of any provision of this Agreement or the Loan Documents which requires the approval of all of the Lenders or the Required Lenders to require a lesser number of the Lenders to approve such action. The provisions of §14 may not be amended without the written consent of the Agent. No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon. No course of dealing or delay or omission on the part of the Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

§28. SEVERABILITY. The provisions of this Agreement are severable, and if any one clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

§29. TIME OF THE ESSENCE. Time is of the essence with respect to each and every covenant, agreement and obligation under this Agreement and the other Loan Documents.

§30. NO UNWRITTEN AGREEMENTS. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTH BELOW.

§31. REPLACEMENT NOTES. Upon receipt of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of any Note, and in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to the Borrower or, in the case of any such mutilation, upon surrender and cancellation of the applicable Note, the Borrower will execute and deliver, in lieu thereof, a replacement Note, identical in form and substance to the applicable Note and dated as of the date of the applicable Note and upon such execution and delivery all references in the Loan Documents to such Note shall be deemed to refer to such replacement Note.

§32. NO THIRD PARTIES BENEFITED. This Agreement and the other Loan Documents are made and entered into for the sole protection and legal benefit of the Borrower, the Pledgor, the Lenders, the Agent, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. All conditions to the performance of the obligations of the Agent and the Lenders under this Agreement are imposed solely and exclusively for the benefit of the Agent and the Lenders, and their permitted successors and assigns, and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that the Agent and the Lenders will refuse to make the Loan in the absence of strict compliance with any or all thereof and no other Person shall, under

any circumstances, be deemed to be a beneficiary of such conditions, any and all of which may be freely waived in whole or in part by the Agent and the Lenders at any time if in their sole discretion they deem it desirable to do so. In particular, the Agent and the Lenders make no representations and assume no obligations as to third parties concerning the quality of the construction by the Borrower or any of its Subsidiaries of any development or the absence therefrom of defects.

§33. PATRIOT ACT. Each Lender and the Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that, pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower and the Pledgor, which information includes names and addresses and other information that will allow such Lender or the Agent, as applicable, to identify the Borrower and the Pledgor in accordance with the Patriot Act.

§34. RESERVED.

§35. LIABILITY. The Agent and the Lenders acknowledge and agree that the obligations of the Pledgor under the Loan Documents shall be non-recourse to the Pledgor individually; the sole recourse of the Agent and the Lenders with respect to the Pledgor shall be to any collateral granted by the Pledgor under the Loan Documents.

§36. ADDITIONAL AGREEMENTS CONCERNING OBLIGATIONS OF THE BORROWER AND THE PLEDGOR.

§36.1 Attorney-in-Fact. For the purpose of implementing the joint borrower provisions of the Loan Documents, the Borrower and the Pledgor hereby irrevocably appoint the Borrower as their agent and attorney-in-fact for all purposes of the Loan Documents, including the giving and receiving of notices and other communications.

§36.2 RESERVED.

§36.3 Waiver of Automatic or Supplemental Stay. Each of the Borrower and the Pledgor represent, warrant and covenant to the Lenders and the Agent that in the event of the filing of any voluntary or involuntary petition in bankruptcy by or against the Borrower or the Pledgor at any time following the execution and delivery of this Agreement, neither the Borrower nor the Pledgor shall seek a supplemental stay or any other relief, whether injunctive or otherwise, pursuant to Section 105 of the Bankruptcy Code or any other provision of the Bankruptcy Code, to stay, interdict, condition, reduce or inhibit the ability of the Lenders or the Agent to enforce any rights it has by virtue of this Agreement, the Loan Documents, or at law or in equity, or any other rights the Lenders or the Agent have, whether now or hereafter acquired, against the Borrower or the Pledgor or against any property owned by the Borrower or the Pledgor.

§36.4 Waiver of Defenses. To the extent permitted by applicable law, each of the Borrower and the Pledgor hereby waives and agrees not to assert or take advantage of any defense based upon:

(a) Any right to require the Agent or the Lenders to proceed against the other of the Borrower or the Pledgor or any other Person or to proceed against or exhaust any security held by the Agent or the Lenders at any time or to pursue any other remedy in the Agent’s or any Lender’s power or under any other agreement before proceeding against the Borrower or the Pledgor hereunder or under any other Loan Document;

(b) The defense of the statute of limitations in any action hereunder or the payment or performance of any of the Obligations;

(c) Any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other Person or Persons or the failure of the Agent or any Lender to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other Person or Persons;

(d) Any failure on the part of the Agent or any Lender to ascertain the extent or nature of any Collateral or any insurance or other rights with respect thereto, or the liability of any party liable under the Loan Documents or the obligations evidenced or secured thereby;

(e) Demand, presentment for payment, notice of nonpayment, protest, notice of protest and all other notices of any kind (except for such notices as are specifically required to be provided to the Borrower or the Pledgor pursuant to the Loan Documents), or the lack of any thereof, including, without limiting the generality of the foregoing, notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part of the Borrower, the Pledgor, the Agent, any Lender, any endorser or creditor of the Borrower or the Pledgor or on the part of any other Person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by the Agent or any Lender;

(f) Any defense based upon an election of remedies by the Agent or any Lender, including any election to proceed by judicial or nonjudicial foreclosure of any security, whether real property or personal property security, or by deed in lieu thereof, and whether or not every aspect of any foreclosure sale is commercially reasonable, or any election of remedies, including remedies relating to real property or personal property security, which destroys or otherwise impairs the subrogation rights of the Borrower or the Pledgor or the rights of the Borrower or the Pledgor to proceed against the other for reimbursement, or both;

(g) Any right or claim of right to cause a marshaling of the assets of the Borrower;

(h) Any duty on the part of Agent or any Lender to disclose to the Borrower or the Pledgor any facts the Agent or any Lender may now or hereafter know about the Borrower or the Pledgor or the Collateral, regardless of whether the Agent or any Lender has reason to believe that any such facts materially increase the risk beyond that which the Borrower or the Pledgor intends to assume or has reason to believe that such facts are unknown to the Borrower or the Pledgor or has a reasonable opportunity to communicate such facts to the Borrower, it being understood and agreed that the Borrower and the Pledgor are fully responsible for being and keeping informed of the financial condition of the other, of the condition of the Real Estate or the Collateral and of any and all circumstances bearing on the risk that liability may be incurred by the Borrower or the Pledgor hereunder and under the other Loan Documents;

(i) Any inaccuracy of any representation made by or on behalf of the Borrower or the Pledgor contained in any Loan Document;

(j) Subject to compliance with the provisions of this Agreement, any sale or assignment of the Loan Documents, or any interest therein;

(k) Subject to compliance with the provisions of this Agreement, any sale or assignment by the Borrower, the Pledgor or any other Person, of any Collateral, or any portion thereof or interest therein, not consented to by the Agent or any Lender;

(l) Any invalidity, irregularity or unenforceability, in whole or in part, of any one or more of the Loan Documents;

(m) Any deficiencies in the Collateral or any deficiency in the ability of the Agent or any Lender to collect or to obtain performance from any Persons now or hereafter liable for the payment and performance of any obligation hereby guaranteed;

(n) An assertion or claim that the automatic stay provided by 11 U.S.C. §362 (arising upon the voluntary or involuntary bankruptcy proceeding of the Borrower or the Pledgor) or any other stay provided under any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of the Agent or any Lender to enforce any of its rights, whether now or hereafter required, which the Agent or any Lender may have against the Borrower, the Pledgor or the Collateral owned by either of them;

(o) Any modifications of the Loan Documents or any obligation of the Borrower or the Pledgor relating to the Loan by operation of law or by action of any court, whether pursuant to the Bankruptcy Code, or any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, or otherwise;

(p) Any release of the Borrower, the Pledgor, or of any other Person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents by operation of law, the Agent’s or Lenders’ voluntary act or otherwise;

(q) Any action, occurrence, event or matter consented to by the Borrower or the Pledgor under any provision hereof, or otherwise;

(r) The dissolution or termination of existence of the Borrower or the Pledgor;

(s) Subject to compliance with the provisions of this Agreement, any renewal, extension, modification, amendment or another changes in the Obligations, including but not limited to any material alteration of the terms of payment or performance of the Obligations;

(t) Any defense of the Borrower or the Pledgor, other than that of prior performance, including without limitation, the invalidity, illegality or unenforceability of any of the Obligations;

(u) To the fullest extent permitted by law, any other legal, equitable or surety defenses whatsoever to which the Borrower or the Pledgor might otherwise be entitled, it being the intention that the obligations of the Borrower or the Pledgor hereunder are absolute, unconditional and irrevocable; or

(v) Subject to compliance with the provisions of this Agreement, any lack of notice of disposition or manner of disposition of any Collateral except for notices required by law.

§36.5 Waiver. Each of the Borrower and the Pledgor waives, to the fullest extent that each may lawfully so do, the benefit of all appraisement, valuation, stay, extension, homestead, exemption and redemption laws which such Person may claim or seek to take advantage of in order to prevent or hinder the enforcement of any of the Loan Documents or the exercise by the Lenders or the Agent of any of their respective remedies under the Loan Documents and, to the fullest extent that the Borrower and the Pledgor may lawfully so do, such Person waives any and all right to have the assets comprised in the security intended to be created by the Security Documents (including, without limitation, those assets owned by the other of the Borrower or the Pledgor) marshaled upon any foreclosure of the lien created by such Security Documents. Each of the Borrower and the Pledgor further agree that the Lenders and the Agent shall be entitled to exercise their respective rights and remedies under the Loan Documents or at law or in equity in such order as they may elect. Without limiting the foregoing, each of the Borrower and the Pledgor further

agree that upon the occurrence of an Event of Default, the Lenders and the Agent may exercise any of such rights and remedies without notice to either the Borrower or the Pledgor except as required by law or the Loan Documents and agrees that neither the Lenders nor the Agent shall be required to proceed against the other of the Borrower or the Pledgor or any other Person or to proceed against or to exhaust any other security held by the Lenders or the Agent at any time or to pursue any other remedy in the Lender’s or the Agent’s power or under any of the Loan Documents before proceeding against the Borrower, the Pledgor or their assets under the Loan Documents.

§36.6 Subordination. So long as the Loan is outstanding, each of the Borrower and the Pledgor hereby expressly defers and agrees (a) not to assert any right of contribution from or indemnity against the other, whether at law or in equity, arising from any payments made by such Person pursuant to the terms of this Agreement or the Loan Documents, and (b) not to proceed against the other for reimbursement of any such payments. In connection with the foregoing, each of the Borrower and the Pledgor expressly defers and agrees not to assert or take advantage of (i) any rights of subrogation to the Lenders or the Agent against the other of the Borrower and the Pledgor, (ii) any rights to enforce any remedy which the Lenders or the Agent may have against the other of the Borrower or the Pledgor and any rights to participate in any Collateral or any other assets of the other of the Borrower or the Pledgor. In addition to and without in any way limiting the foregoing, each of the Borrower or the Pledgor hereby subordinates any and all indebtedness it may now or hereafter owe to the other of the Borrower or the Pledgor to all indebtedness of the Borrower and the Pledgor to Lenders and Agent, and agrees with Lenders and Agent that neither of the Borrower nor the Pledgor shall claim any offset or other reduction of the Borrower’s or the Pledgor’s obligations hereunder because of any such indebtedness and shall not take any action to obtain any of the Collateral or any other assets of the other of the Borrower or the Pledgor so long as the Loan are outstanding.

§37. ACKNOWLEDGMENT OF BENEFITS; EFFECT OF AVOIDANCE PROVISIONS.

Without limiting any other provision of §36, each Credit Party acknowledges that it has received, or will receive, significant financial and other benefits, either directly or indirectly, from the proceeds of the Loan made by the Lender to the Borrower pursuant to this Agreement; that the benefits received by such Credit Party are reasonably equivalent consideration for such Credit Party’s execution of this Agreement and the other Loan Documents to which it is a party; and that such benefits include, without limitation, the access to capital afforded to the Borrower and the Pledgor pursuant to this Agreement from which the activities of such Credit Party will be supported.

IN WITNESS WHEREOF, each of the undersigned have caused this Agreement to be executed by its duly authorized representatives as of the date first set forth above.


BORROWER:

City Office REIT, Inc., a Maryland corporation

By:		/s/ Anthony Maretic
Name:		Anthony Maretic
Title:		Chief Financial Officer

[Signature Page to Credit Agreement]


PLEDGOR:

CITY OFFICE REIT OPERATING PARTNERSHIP, L.P., a Maryland limited partnership, by its general partner, City Office REIT, Inc., a Maryland corporation

By:		/s/ Anthony Maretic
Name:		Anthony Maretic
Title:		Chief Financial Officer

[Signature Page to Credit Agreement]


AGENT AND LENDERS:

KEYBANK NATIONAL ASSOCIATION, as a Lender and as Agent

By:		/s/ Christopher T. Neil


Name:		Christopher T. Neil


Title:		Vice President

KeyBank National Association

225 Franklin Street

Boston, Massachusetts 02110

Attention: Mr. Christopher T. Neil

Telephone: 617 385 6202

Facsimile: 617 385 6293

[Signature Page to Credit Agreement]

Exhibit 10.2

THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS AND PROVISIONS

LIMITING LENDER’S LIABILITY FOR NEGLIGENCE

LOAN AGREEMENT

made between

CIO 190, LIMITED PARTNERSHIP,

as Borrower

and

CIBC INC.,

as Lender

DATED: as of September 3, 2015

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of September 3 2015 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), between CIBC INC., a Delaware corporation, having an address at 425 Lexington Avenue, New York, New York 10017, Attn: Real Estate Group (together with its successors and assigns, “Lender”) and CIO 190, LIMITED PARTNERSHIP, a Delaware limited partnership, having its principal place of business at c/o City Office REIT, Inc., 8150 North Central Expressway, Suite 1255, Dallas, Texas 75206 (“Borrower”).

W I T N E S S E T H:

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter defined).

NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Agreement, the parties hereto hereby covenant, agree, represent and warrant as follows:

ARTICLE I

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

1.1 Definitions.

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

“Interest Rate” shall mean Four and 79/100 percent (4.79%) per annum.

“Loan” shall mean the loan in the principal amount of up to FORTY-ONE MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($41,250,000.00) made by Lender to Borrower pursuant to this Agreement.

“Monthly Payment Amount” shall mean, for any Payment Date, (a) if such Payment Date is for an Interest Accrual Period that commenced during the Interest-Only Period, interest on the outstanding principal balance of the Loan at the Interest Rate for the number of days during the Interest Accrual Period ending on such Payment Date, and (b) if such Payment Date is for an Interest Accrual Period that commenced after the end of the Interest-Only Period, the amount of Two Hundred Sixteen Thousand One Hundred and Seventy-Five and 19/100 Dollars ($216,175.19).

“Accounts Receivable Instruction” shall have the meaning set forth in Section 3.1 hereof.

“Accounts Receivable Payor” shall have the meaning set forth in Section 3.1 hereof.

“ACMs” shall have the meaning set forth in Section 4.25 hereof.

“Added Fee Collateral” shall have the meaning set forth in Section 4.31(f)(ii) hereof.

“Added Fee Acquisition” and “Added Fee Acquisition Date” shall have the meanings set forth in Section 4.31(f)(ii)(B) hereof.

“Additional Taxes” shall have the meaning set forth in Section 2.3(b) hereof.

“Affiliate” shall mean any person or entity which directly or indirectly through one or more intermediaries (i) controls, is controlled by or is under common control with a specified person or entity, or (ii) at least twenty-five percent (25%) of the ownership interests in which are owned by a specified person or entity and/or entities described in clause (i) above with respect thereto, or (iii) owns (individually or with other entities described in clause (i) above) at least twenty-five percent (25%) of the ownership interests in a specified person or entity. For purposes of the definition of “Affiliate”, the terms “control”, “controlled”, or “controlling” with respect to a specified person or entity shall include, without limitation, (A) the ownership, control or power to vote ten percent (10%) or more of (1) the outstanding shares of any class of voting securities or (2) beneficial interests, of any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons or entities, (B) the control in any manner over the general partner(s) or the election of more than one director or trustee (or persons exercising similar functions) of such person or entity, or (C) the power to exercise, directly or indirectly, control over the management or policies of such person or entity.

“Amortization Term” shall mean a period of thirty (30) years.

“Annual Budget” shall have the meaning set forth in Section 3.8 hereof.

“Applicable Laws” shall have the meaning set forth in Section 4.1(h) hereof.

“Approved Annual Budget” shall mean each Annual Budget approved by Lender in accordance with the terms of Section 3.8 of this Agreement.

“Assignment of Leases” shall mean that certain Assignment of Leases and Rents, dated as of the date hereof, from Borrower to Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Available Cash” shall have the meaning set forth in Section 3.3 hereof.

“Bankruptcy Action” shall mean, with respect to any Person, to (i) institute proceedings to be adjudicated bankrupt or insolvent; (ii) consent to the institution of bankruptcy or insolvency proceedings against it; (iii) file a petition seeking, or consenting to, reorganization or relief under any applicable federal or state law relating to bankruptcy; (iv) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of an entity or a substantial part of its property; (v) make any assignment for the benefit of creditors; (vi) admit in writing its inability to pay its debts generally as they become due or declare or effect a moratorium on its debts; or (vii) take any action in furtherance of any such action.

“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from time to time and any successor statute thereto.

“Borrower” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns.

“Business Day” or “business day” shall mean any day other than (a) a Saturday or Sunday, or (b) a day on which banking and savings and loan institutions in the State of New York are authorized or obligated by law or executive order to be closed.

“Buyer” shall have the meaning set forth in Section 4.11 hereof

“Calculation Date” shall mean the last day of each calendar quarter during the Term.

“Capital Expenditures” shall mean for any period, the amount expended for items capitalized under generally accepted accounting principles, including expenditures for building improvements or major repairs, as set forth in an Approved Annual Budget.

“Cash Collateral Reserve” shall have the meaning set forth in Section 4.28 hereof.

“Cash Expenses” shall mean, for any period, the operating expenses for the operation and maintenance of the Property as set forth in an Approved Annual Budget to the extent that such expenses are actually incurred by Borrower, excluding payments into the Impound Account, the Leasing Reserve, Replacement Reserve and expenses for which Borrower shall be reimbursed from, or which shall be paid for out of any such account or reserve.

“Cash Management Account” shall have the meaning set forth in Section 3.2 hereof.

“Cash Management Bank” shall have the meaning set forth in Section 3.2 hereof.

“Cash Management Commencement Date” shall mean any date on which a Cash Management Period commences.

“Cash Management Period” shall commence upon the occurrence of (i) an Event of Default, (ii) the commencement of a Low Debt Service Period, (iii) the commencement of a United Healthcare Trigger Period, or (iv) the commencement of a Parsons Trigger Period; and shall end if, with respect to a Cash Management Period continuing pursuant to clause (i), the Event of Default commencing the Cash Management Period has been cured and such cure has been accepted by Lender (and no other Event of Default is then continuing), or, with respect to a Cash Management Period continuing due to clause (ii), the Low Debt Service Period has ended pursuant to the terms hereof, or, with respect to a Cash Management Period continuing due to clause (iii), the United Healthcare Trigger Period has ended pursuant to the terms hereof, or, with respect to a Cash Management Period continuing due to clause (iv), the Parsons Trigger Period has ended pursuant to the terms hereof. A Cash Management Period shall also continue for so long as any New Mezzanine Loan is outstanding.

“Certificates” shall mean the securities issued in connection with a securitization of the Loan.

“City Office REIT” shall mean City Office REIT, Inc., a Maryland corporation.

“Clearing Account” shall have the meaning set forth in Section 3.1 hereof.

“Clearing Bank” shall mean KeyBank, National Association, or any successor Eligible Bank approved or appointed by Lender.

“Clearing Bank Agreement” shall mean that certain Lockbox-Deposit Account Control Agreement (Springing) by and among Borrower, Lender and Clearing Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, relating to the operation and maintenance of the Clearing Account.

“Closing Date” shall mean the date of this Agreement.

“Closing Statement” shall mean the loan closing statement prepared by Lender and executed by Borrower and delivered to Lender in connection with the closing of the Loan.

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

“Collateral” shall mean the Property, the UCC Collateral, and any and all other properties, rights, estates and interests now or at any time hereafter securing the payment of the Debt and/or the other obligations of Borrower under the Loan Documents.

“Contracts” shall mean, collectively, all contracts and agreements now or hereafter entered into relating to the ownership or operation or management of the Real Estate or the Improvements or any portion of them.

“Constituent Entity” shall mean with respect to any entity, (A) with respect to any limited partnership, (1) any general partner of such limited partnership and (2) any limited partner of such partnership which owns (or is owned by any person or entity owning, holding or controlling, directly or indirectly) the right to receive 50% or more of the income, distributable funds or losses of such partnership; (B) with respect to any general partnership or joint venture, any partner or venturer in such general partnership or joint venture; (C) with respect to any corporation, (1) any officer or director of such corporation, and (2) any person or entity which owns or controls 50% or more of any class of stock of such corporation; (D) with respect to any limited liability company, (1) any manager of such limited liability company, (2) any managing member of such limited liability company, or the sole member of any limited liability company having only one (1) member, and (3) any non-managing member of such limited liability company which owns (or is owned by any person or entity owning, holding or controlling, directly or indirectly) the right to receive 50% or more of the income, distributable funds or losses of such limited liability company; (E) any person or entity which controls any entity described in any of foregoing clauses (A) through (D) of this definition; and (F) any entity which is a “Constituent Entity” with respect to an entity which is a “Constituent Entity” of the subject entity. For the purposes of clause (F) of this definition, if entity “B” is a Constituent Entity of entity “A”, then any Constituent Entity of “B” shall be deemed to be a Constituent Entity of any entity of which “A” is a Constituent Entity.

“Control” and “Controlled by” shall, unless expressly noted, have the meanings assigned to such terms in Rule 405 under the Securities Act of 1933, as amended.

“Controlling Entity” shall mean any general partner, manager, managing member or (if applicable) sole member, of Borrower, as the case may be.

“Debt” shall mean the outstanding principal amount set forth in, and evidenced by, the Note and this Agreement together with all interest accrued and unpaid thereon and all other sums (including, without limitation, any prepayment fees, if applicable) due to Lender in respect of the Loan under the Note, this Agreement, the Mortgage and the other Loan Documents.

“Debt Service Constant” shall mean the constant derived using an interest rate equal to the Interest Rate and an amortization schedule equal to the Amortization Term.

“Debt Service Coverage Ratio” shall mean, for any period, the ratio of (A) Underwritten Net Cash Flow, to (B) an amount equal to the maximum principal amount of the Loan multiplied (unless otherwise specified) by the Debt Service Constant.

“Default” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.

“Default Rate” shall mean the rate equal to the lesser of (a) the Maximum Legal Rate, or (b) four percent (4%) above the Interest Rate.

“Defeasance” shall mean a release of the Property from the lien of the Mortgage and other Loan Documents, and a substitution of the collateral for the Loan, all in accordance with the provisions of Section 2.5 of this Agreement.

“Defeasance Collateral” shall mean direct, non-callable and non-prepayable obligations of the United States of America or, at the option of Lender (and, if a Secondary Market Transaction has then occurred, only if permitted under the applicable Securitization Documents (or, if such permission is conditioned on satisfaction of any conditions, only upon the satisfaction of all such conditions)), other securities considered “government securities” within the meaning of the Investment Company Act of 1940, as amended.

“Defeasance Date” shall have the meaning set forth in Section 2.5(a) hereof.

“Defeasance Deposit” shall mean funds sufficient to purchase or cause to be purchased Defeasance Collateral in an amount that provides for payments prior, but as close as possible, to all successive Payment Dates occurring after the Defeasance Date through and including the Maturity Date, with each such payment being equal to or greater than (1) the Monthly Payment Amount, and (2) with respect to the payment due on the Maturity Date, the entire outstanding principal balance of the Loan together with any interest accrued as of such date and all other amounts payable pursuant to the Loan Documents.

“Defeasance Period” shall mean the period of time commencing on the first Payment Date to occur on or after the date which is the earlier to occur of (i) two (2) years after the “startup day”, within the meaning of Section 860G(a)(9) of the Code, of the Trust, and (ii) four (4) years after the date of this Agreement, and ending on the Lockout Release Date.

“Defeasance Security Agreement” shall mean a pledge and security agreement, in form and substance satisfactory to Lender in its sole discretion (or, if the Loan shall then be held by a REMIC or similar entity, satisfactory to the Servicer thereof and satisfying all requirements of the agreements establishing and/or governing such REMIC or similar entity), creating a first priority security interest in favor of Lender in the Defeasance Deposit and the Defeasance Collateral; among other things, such Defeasance Security Agreement shall provide that any excess received by Lender on any Payment Date from the Defeasance Collateral over the amounts payable by Borrower hereunder on such Payment Date shall be refunded to Borrower promptly after the related Payment Date.

“Deferred Maintenance” shall have the meaning set forth in Section 4.28 hereof.

“Direction Letter” shall mean any Tenant Direction Letter.

“Disbursement Instructions” shall have the meaning set forth in Section 3.2 hereof.

“Early Termination Payment” shall have the meaning set forth in Section 4.28 hereof.

“Early Termination Reserve” shall have the meaning set forth in Section 4.28 hereof.

“Eligible Account” shall mean either (i) an account or accounts maintained with an Eligible Bank or (ii) a Trust Account. Eligible Accounts may bear interest.

“Eligible Bank” shall mean a bank that (i) satisfies the Rating Criteria and (ii) insures the deposits hereunder through the Federal Deposit Insurance Corporation.

“Environmental Laws” shall mean local, state or federal law, rule or regulation pertaining to environmental regulation, contamination or clean-up, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq. and 40 CFR §302.1 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §1251 et seq. and 40 CFR § 116.1 et seq.), those relating to lead based paint, and the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), and the regulations promulgated pursuant to said laws, all as amended.

“Environmental Report” shall mean the environmental report(s) prepared for Lender in connection with the Loan.

“Equity Holder” shall mean any holder of any Equity Interest.

“Equity Interest” shall mean any direct or indirect ownership interest in Borrower.

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

“Event of Default” shall have the meaning set forth in Section 5.1 hereof.

“Exchange Act” shall mean the Securities and Exchange Act of 1934, and the regulations promulgated thereunder, as amended from time to time.

“Extraordinary Expense” shall mean an extraordinary operating expense or capital expense not set forth in the Approved Annual Budget or allotted for in the Replacement Reserve and/or the Leasing Reserve.

“Fee Real Estate” shall have the meaning set forth in Mortgage.

“First Interest Accrual Period” shall mean the period commencing on the Closing Date and ending on, but excluding, the Payment Date first occurring after the Closing Date.

“Fitch” shall mean Fitch, Inc.

“General Intangibles” shall mean, collectively, all present and future funds, accounts, instruments, accounts receivable, documents, causes of action, claims, general intangibles (including without limitation, trademarks, trade names, servicemarks and symbols now or hereafter used in connection with any part of the Real Estate or the Improvements, all names by which the Real Estate or the Improvements may be operated or known, all rights to carry on business under such names, and all rights, interest and privileges which Borrower has or may have as developer or declarant under any covenants, restrictions or declarations now or hereafter relating to the Real Estate or the Improvements) and all notes or chattel paper now or hereafter arising from or by virtue of any transactions related to the Real Estate or the Improvements.

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

“Ground Lease” shall mean the ground lease described on Exhibit G as attached hereto and by this reference made part hereof.

“Ground Lessor” means Granite 190 Center, Ltd., a Texas limited partnership, and its successors and assigns as landlord under the Ground Lease.

“Ground Lessor’s Recognition Agreement” shall mean that certain Recognition, Non-Disturbance and Attornment Agreement dated on or about the date hereof by Ground Lessor and Borrower for the benefit of Lender.

“Ground Rent” shall mean any rent, additional rent or other charge payable by the tenant under the Ground Lease.

“Guarantor” shall mean City Office REIT Operating Partnership, L.P., a Maryland limited partnership.

“Guarantor Financial Covenants” shall mean those covenants set forth in Section 5 of the Indemnity and Guaranty.

“Hazardous Substances” shall mean, collectively, all hazardous, toxic or harmful substances, wastes, materials, pollutants or contaminants (including, without limitation, ACMs, asbestos, lead based paint, polychlorinated biphenyls, petroleum products, flammable explosives, radioactive materials, infectious substances or raw materials which include hazardous constituents) or any other substances or materials which are included under or regulated by Environmental Laws, or any molds, spores or fungus or other harmful microbial matter.

“Hazardous Substances Indemnity Agreement” shall mean that certain Hazardous Substances Indemnity Agreement, dated as of the date hereof, from Borrower and Guarantor to Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Impound Account” shall have the meaning set forth in Section 4.6 hereof.

“Improvements” shall have the meaning set forth in the granting clause of the Mortgage.

“Indemnity and Guaranty” shall mean that certain Indemnity and Guaranty Agreement, dated as of the date hereof, from Guarantor to Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Independent Director” shall mean an individual who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience

and who is provided by a Recognized Independent Director Provider, and which individual is duly appointed as an Independent Director and is not, and has never been, and will not while serving as Independent Director be, any of the following:

(i) a member, partner, equityholder, manager, director, officer or employee of the Borrower (or, if applicable, the SPE Component Entity) or any of their respective equityholders or Affiliates (other than as an Independent Director that does not own any Equity Interest in Borrower or any Affiliate and that is required by a creditor to be a single purpose bankruptcy remote entity);

(ii) a creditor, supplier or service provider (including provider of professional services) to the Borrower, or any of its equityholders or Affiliates (other than in connection with such person’s employment by the related Recognized Independent Director Provider) to Borrower (or, if applicable, to the SPE Component Entity) or Affiliates, in each case in the ordinary course of its business) , provided that the fees that such individual earns in any given year from serving as Independent Director of Borrower and any Affiliates (or, if applicable, the portion of the salary paid to such person by the related Recognized Independent Director Provider from such service) constitutes (in the aggregate) less than five percent (5%) of such individual’s annual income for that year;

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

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

The same persons may not serve as Independent Directors of Borrower and SPE Component Entity or of any Equity Holder of Borrower.

“Insurance Premiums” shall have the meaning set forth in Section 4.6 hereof.

“Insurance Rating Requirements” shall mean that the insurer maintains either (a) a rating of “A” by S&P, (b) a rating of “A2” by Moody’s, or (c) if not rated by either Moody’s or S&P, a rating of A X from A.M. Best company.

“Interest Accrual Period” shall mean the First Interest Accrual Period and, thereafter, the period from the first (1^st) day of each calendar month through and including the last day of such calendar month. Each Interest Accrual Period shall end one (1) day prior to the related Payment Date.

“Interest-Bearing Reserve” shall have the meaning set forth in Section 4.30 hereof.

“Interest-Only Period” shall mean the forty-two (42) calendar month period beginning on the first day of the first calendar month following the Closing Date.

“Investor” shall mean any actual or potential purchaser, transferee, assignee, servicer, participant or investor in a Secondary Market Transaction.

“Late Payment Charge” shall have the meaning set forth in Section 2.3(c) hereof.

“Lease” shall mean any lease (including, without limitation, the Ground Lease, any oil, gas and mineral lease), sublease or subsublease, letting, license, concession, occupancy or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property, and (a) every modification, amendment or other agreement relating to such lease, sublease, subsublease, or

other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.

“Lease Modification” shall have the meaning set forth in Section 4.10 hereof.

“Leasing Commissions” shall have the meaning set forth in Section 4.28 hereof.

“Leasing Costs” shall have the meaning set forth in Section 4.28 hereof.

“Leasing Reserve” shall have the meaning set forth in Section 4.28 hereof.

“Lender” shall have the meaning set forth in the introductory paragraph hereof. Any action that may be taken by Lender pursuant to this Agreement or any other Loan Document (other than the obligation to advance the Loan on the Closing Date), and any right or remedy granted to Lender pursuant to this Agreement or any other Loan Document, may be exercised by a Servicer on behalf of Lender.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the Mortgage, the Assignment of Leases, the Indemnity and Guaranty, the Hazardous Substances Indemnity Agreement and all other documents executed and/or delivered in connection with the Loan, together with any and all renewals, amendments, extensions and modifications thereof.

“Lockbox Address” shall have the meaning set forth in Section 3.1 hereof.

“Lockout Release Date” shall mean the Payment Date occurring two (2) months prior to the Scheduled Maturity Date.

“Low Debt Service Period” shall commence if, as of any Calculation Date, the Debt Service Coverage Ratio is less than 1.15:1.00 and shall end if the Property has achieved a Debt Service Coverage Ratio of at least 1.20:1.00 for two (2) consecutive Calculation Dates, as determined by Lender.

“Major Income Lease” shall have the meaning set forth in Section 4.10 hereof.

“Major Lease” shall mean any Lease demising in the aggregate more than the lesser of (i) 20,000 rentable square feet or (ii) ten percent (10%) of the total rentable square feet at the Property, including, without limitation, the Ground Lease.

“Maturity Date” shall mean the Scheduled Maturity Date, or such earlier date on which the final payment of principal of the Note becomes due and payable as provided in this Agreement or the Note, whether at the Scheduled Maturity Date, by declaration of acceleration, or otherwise.

“Maximum Legal Rate” shall have the meaning set forth in Section 2.2(d) hereof.

“Mortgage” shall mean that certain first priority Fee and Leasehold Deed of Trust, Assignment of Leases and Rents and Security Agreement, dated the date hereof, executed and delivered by Borrower as security for the Loan and encumbering the Property, as the same may be amended, restated, replaced, supplemented, severed or otherwise modified from time to time.

“Moody’s” shall mean Moody’s Investor Service, Inc.

“New Mezzanine Loan” shall have the meaning set forth in Section 8.24 hereof.

“Net Capital Expenditures” shall mean for any period the amount by which Capital Expenditures during such period exceeds reimbursements for such items during such period from any fund (including, but not limited to, the Leasing Reserve and the Replacement Reserve) established pursuant to the Loan Documents.

“Non-Consolidation Opinion” shall mean an opinion of outside counsel (which counsel shall be reasonably acceptable to Lender) to Borrower, Guarantor and such of their Affiliates and Equity Holders as Lender may require, addressed to Lender and in form and substance satisfactory to Lender, analyzing the likelihood of substantive consolidation of one or more such Persons upon a Bankruptcy Action by other of such Persons.

“Note” shall mean that certain Promissory Note, dated as of the date hereof, in the principal amount of the Loan, made by Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented, severed or otherwise modified from time to time.

“Occupancy Conditions” shall mean the delivery by Borrower to Lender of evidence reasonably satisfactory to Lender (which shall include an estoppel certificate executed by the relevant Tenant(s)) that (A) the entire United Healthcare Premises or the entire Parsons Premises, as applicable, is tenanted under one or more Qualified Replacement Leases, (B) each such Tenant has accepted possession and taken physical occupancy of the entire space demised to such Tenant and each such Tenant is open for business, not “dark” and conducting normal business operations from the United Healthcare Premises or the Parsons Premises, as applicable, (C) all contingencies under all such Lease(s) to the effectiveness of the Lease(s) and the commencement of the payment of full, unabated rent thereunder have been satisfied (and such Tenant has actually commenced paying full, unabated rent thereunder), (D) no defaults exist under any such Leases and no Tenant (or its guarantor) under any such Lease is subject to a Bankruptcy Action, (E) all Leasing Commissions payable in connection with any such Lease have been paid and all Tenant Improvement obligations or other landlord obligations of an inducement nature have either been completed or paid in full, and Borrower has complied with all requirements of Section 4.29 hereof with respect to the payment, performance and completion, as applicable, of such Leasing Commissions and Tenant Improvements, and (F) any period of free rent, rent concessions and/or partial rent abatements has expired.

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

“Operating Account” shall have the meaning set forth in Section 3.1 hereof.

“Organizational Documents” shall mean, with respect to any entity, the documents customarily used to form an entity and provide for its governance, as the same may be amended from time to time, including, without limitation, (A) with respect to a corporation, the articles of incorporation or certificate of incorporation or charter, and the by-laws; (B) with respect to a limited liability company, the articles of organization and the operating agreement; and (C) with respect to a limited partnership, the certificate of limited partnership and the limited partnership agreement.

“Other Charges” shall have the meaning set forth in Section 4.5 hereof.

“PACE Loan” shall mean (x) any “Property-Assessed Clean Energy loan” or (y) any other indebtedness, without regard to the name given to such indebtedness, which is (i) incurred for improvements to the Property for the purpose of increasing energy efficiency, increasing use of renewable energy sources, resource conservation or a combination of the foregoing and (ii) repaid through multi-year assessments against the Property.

“Parent” shall mean, with respect to Lender, any person controlling Lender.

“Parsons” shall mean Parsons Service Corporation and Parsons Service Company, together with their permitted successors and/or assigns under the Parsons Lease.

“Parsons Cash Collateral Reserve” shall have the meaning set forth in Section 4.28 hereof.

“Parsons Lease” shall mean, collectively, (i) that certain office lease dated August 28, 2007, between GPI-M 190A, LP, as successor-in-interest to Granite 190 Center, Ltd., and Parsons, as tenant, together with and as amended by that certain First Amendment dated September 27, 2007, that certain Acceptance of Premises Memorandum dated January 29, 2008, that certain Second Amendment dated April 22, 2008, that certain Third Amendment dated February 15, 2012, that certain Acceptance of Premises Memorandum dated June 6, 2012, that certain Fourth Amendment dated July 19, 2012, that certain Fifth Amendment dated October 2, 2013, that certain Acceptance of Premises Memorandum dated April 11, 2014 and that certain Sixth Amendment dated July 28, 2015, covering approximately 44,346 square feet of space at the Property at the date of this Agreement, and (ii) that certain office lease dated February 25, 2013, between GPI-M 190A, LP, as successor-in-interest to Granite 190 Center, Ltd., and Parsons, as tenant, together with and as amended by that certain Acceptance of Premises Memorandum dated February 25, 2013, that certain Acceptance of Premises Memorandum dated July 14, 2014, that certain First Amendment dated July 14, 2014 and that certain Second Amendment dated July 29, 2015, covering approximately 2,578 square feet of space at the Property at the date of this Agreement, which covers an approximate aggregate space of 41,031 square feet at the Property at the date of this Agreement.

“Parsons Premises” shall mean that certain premises demised under the Parsons Lease.

“Parsons Rent Reserve” shall have the meaning set forth in Section 4.28(j) hereof.

“Parsons Trigger Period” (i) shall commence upon the occurrence of each of the following (each time any of the following may occur):

(a) Tenant under the Parsons Lease failing to provide written notice to Borrower of its election to extend or renew the Parsons Lease for at least five (5) years on or before 12 months prior to lease expiration at a base rent that is not less than $25 per square foot;

(b) the receipt by Borrower or Property Manager of notice from the Tenant under the Parsons Lease that it is exercising its right to terminate the Parsons Lease pursuant to the Parsons Lease;

(c) the date that the Parsons Lease (or any material portion of the premises demised thereunder) is surrendered, cancelled or terminated prior to its then current expiration date (including any rejection in a Bankruptcy Action) or the receipt by Borrower or Property Manager of notice from the Tenant under the Parsons Lease of its intent to surrender, cancel or terminate the Parsons Lease (or any material portion of the premises demised thereunder) prior to its then current expiration date;

(d) Tenant under the Parsons Lease failing to be in actual, physical occupancy of the Parsons Premises, ceases operations and the conduct of its business and/or such Tenant “going dark” in or vacating the Parsons Premises;

(e) any Bankruptcy Action of the Tenant under the Parsons Lease or any guarantor of such Lease; or

(f) an event of default under the Parsons Lease beyond any applicable notice and cure periods; and

(ii) shall end upon the first to occur of the following:

(A) in the case of clauses (i)(a), (i)(b), (i)(c), and (i)(d) above, each of the Occupancy Conditions with respect to the entire Parsons Premises have been satisfied;

(B) in the case of clauses (i)(a) and (i)(b) above, provided no other Parsons Trigger Period has commenced, the date on which Tenant under the Parsons Lease irrevocably (A) exercises its renewal or extension option (or otherwise enters into an extension agreement with Borrower and acceptable to Lender) with respect to all of the Parsons Premises for a term of at least five (5) years at a base rent that is not less than $25 per square foot or (B) revokes or rescinds in writing all termination or cancellation notices with respect to the Parsons Lease and re-affirms such Lease as being in full force and effect without any default thereunder, as applicable, and such Tenant is (w) conducting normal business operations at the entire Parsons Premises, (x) is paying full, unabated rent under the Parsons Lease, (y) is not in default (beyond any applicable notice and cure period) in accordance with the terms and conditions of the Parsons Lease and (z) has executed and delivered estoppel certificates reasonably acceptable to Lender certifying the foregoing and confirming that all Leasing Costs and other material costs and expenses associated with the Parsons Lease have, to the extent then due and owing, been paid in accordance with the terms of the Parsons Lease;

(C) in the case of clause (i)(c) above, provided no other Parsons Trigger Period has commenced, if such termination option is not validly exercised by the Tenant under the Parsons Lease by the latest exercise date specified in the Parsons Lease or is otherwise validly and irrevocably waived in writing by the Tenant under the Parsons Lease, and such Tenant has re-affirmed the Parsons Lease as being in full force and effect without any default thereunder;

(D) in the case of clause (i)(d) above, provided no other Parsons Trigger Period has commenced, Borrower has provided to Lender evidence reasonably satisfactory to Lender (which shall include a duly executed estoppel certificate from such Tenant) that such Tenant is in actual, physical possession and occupancy of (and re-commenced its operations at) the Parsons Premises, such Tenant is open to the public for business during customary hours, not “dark” in Parsons Premises and paying full, unabated rent without offset, and that there are no Leasing Costs due and payable (or to become due or payable) and/or Tenant Improvements to be completed in connection with such re-occupancy or re-commencement of operations at the Parsons Premises;

(E) in the case of clause (i)(e) above, provided no other Parsons Trigger Period has commenced, such Tenant and/or the guarantor under the Parsons Lease, as applicable, is no longer insolvent or subject to any Bankruptcy Action and has affirmed the Parsons Lease pursuant to final, non-appealable order of a court of competent jurisdiction;

(F) in the case of clause (i)(f) above, provided no other Parsons Trigger Period has commenced, Borrower has provided Lender with evidence reasonably satisfactory to Lender (which can include a duly-executed estoppel certificate from such Tenant) that all defaults under the Parsons Lease have been cured.

“Payment” shall have the meaning set forth in Section 2.3(e) hereof.

“Payment Date” shall mean the first (1^st) day of each month beginning with the second calendar month following the date hereof (or, if the date of this Agreement is the first of a calendar month, beginning with the first calendar month following the date hereof).

“Payment Differential” shall mean an amount equal to (i) the Interest Rate less the Reinvestment Yield, divided by (ii) twelve (12), and multiplied by (iii) the principal sum outstanding under the Note after application of the Monthly Payment Amount due on the Prepayment Date (or, if notwithstanding the provisions of Section 2.4 hereof the Prepayment Date is not a Payment Date, on the Payment Date immediately prior to the Prepayment Date), provided that the Payment Differential shall in no event be less than zero.

“Permitted Exceptions” shall have the meaning set forth in Section 4.1(k) hereof.

“Permitted Transfers” shall have the meaning set forth in Section 4.11 hereof.

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

“Prepayment Date” shall have the meaning set forth in Section 2.4(c) hereof.

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

“Prohibited Use” shall mean (A) operation of a dry-cleaning business, except for a dry-cleaning business at which no on-site cleaning operations of any sort are undertaken (i.e., a so-called drop-off station); (B) operation of a gasoline station or automobile service or maintenance facility; (C) operation of a car wash; (D) operation of any other business that, in the ordinary course of operation, would be likely to result in the release of Hazardous Substances; (E) the sale or display of obscene or pornographic material, the conduct of obscene, nude or semi-nude live performances, or similar purposes; and (F) the operation of a cabaret, dance hall or similar venue.

“Property” shall mean each parcel of real property (including, without limitation, the Fee Real Estate, and the Leasehold Real Estate (each as defined in the Mortgage), the Improvements thereon and all personal property owned by Borrower and encumbered by the Mortgage, together with all rights pertaining to such real property, personal property and Improvements, as more particularly described in granting clause of the Mortgage.

“Property Management Agreement” shall have the meaning set forth in Section 4.24(a) hereof.

“Property Manager” shall mean Transwestern Commercial Services Central Region, L.P. d/b/a Transwestern, as property manager and leasing broker, or any successor manager of the Property approved by Lender.

“Property Reserve Accounts” shall have the meaning set forth in Section 4.29 hereof.

“Prudent Lender Standard” shall, with respect to any matter, be deemed to have been met if the matter in question (i) prior to a Secondary Market Transaction, is acceptable to Lender in Lender’s sole

discretion, applying standards comparable to those used by Lender in similar commercial mortgage loans, and (ii) after a Secondary Market Transaction, (A) if permitted by REMIC requirements applicable to such matter, would be reasonably acceptable to Lender or (B) if the Lender discretion in the foregoing subsection (A) is not permitted under such applicable REMIC requirements, would be acceptable to a prudent lender of securitized commercial mortgage loans.

“Qualified Replacement Lease” shall have the meaning set forth in Section 4.28 hereof.

“Qualified Transferee” shall mean a Person that (i) is a real estate investment trust, a bank, saving and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, government entity or plan, investment company registered under the Investment Company Act of 1940, as amended, or exempt or excluded from resignation or regulation thereunder pursuant to such Act and the rules thereunder, money management firm or a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act, as amended, (ii) has total assets (in name or under management) in excess of $400,000,000.00 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s equity of $200,000,000.00, (iii) is not the subject of, and has no subsidiary under its Control that is the subject of, a proceeding involving bankruptcy, insolvency, reorganization or relief of debtors, (iv) has not been convicted in a criminal proceeding for a felony or a crime involving moral turpitude and is not reputed to have substantial business or other affiliations with an organized crime figure, (v) has no material outstanding litigation pending against such Person, and has no material regulatory actions pending against such Person or any Person under its Control, (vi) has not, and has no subsidiary under its Control that has, defaulted under its obligations with respect to any other indebtedness in a manner which is not reasonably acceptable to Lender and (vii) has passed all OFAC, Patriot Act and similar compliance requirements (including, without limitation, so as to cause the representations set forth in Section 4.1(nn) hereof to be true, correct and complete as of the relevant date).

“Rating Agency” shall mean Fitch, Moody’s, S&P and/or any other nationally-recognized statistical rating organizations, as designated by Lender from time to time, including, without limitation, to provide a rating on any proposed Defeasance Collateral, Borrower, the Loan or any securities evidencing an interest in, inter alia, a Trust or other entity which is the holder of the Note.

“Rating Confirmation” shall mean, as to any proposed action, written confirmation from each applicable Rating Agency that the proposed action will not result in a downgrade, qualification or withdrawal of any rating issued on securities evidencing an ownership interest in the Loan that was in effect immediately prior to such proposed action.

“Rating Criteria” with respect to any Person shall mean that (i) the short-term unsecured debt obligations or commercial paper of which are rated at least A-1 by S&P, P-1 by Moody’s and F-1+ by Fitch, if deposits are held in the account for a period of less than 30 days or (ii) the long-term unsecured debt obligations of which are rated at least “AA” by S&P and Fitch and Aa by Moody’s, if deposits are held in the account for a period of 30 days or more.

“Real Estate” shall mean that certain real property (fee and leasehold) more particularly described on Exhibit A attached hereto and incorporated herein by this reference.

“Regulation AB” shall mean Regulation AB under the Securities Act and the Exchange Act, as amended from time to time.

“Recognized Independent Director Provider” shall mean one or more of CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or another nationally-recognized company approved by Lender (which approval shall not unreasonably be withheld if such company is then generally acceptable both to the Rating Agencies and in the market for Secondary Market Transactions involving loans comparable to the Loan), in each case that is not an Affiliate of Borrower or the related SPE Component Entity and that provides professional independent directors and other corporate services in the ordinary course of its business.

“Reinvestment Yield” shall mean an amount equal to the lesser of (i) the yield on the U.S. Treasury issue (primary issue) with a maturity date closest to the Maturity Date, or (ii) the yield on the U.S. Treasury issue (primary issue) with a term equal to the remaining average life of the indebtedness evidenced by the Note, as determined by Lender, with each such yield being based on the bid price for such issue as published in the Wall Street Journal on the date that is fourteen (14) days prior to the Prepayment Date (or, if such bid price is not published on that date, the next preceding date on which such bid price is so published) and converted to a monthly compounded nominal yield.

“REMIC” shall mean a “real estate mortgage investment conduit”, within the meaning of Section 860D of the Internal Revenue Code of 1986, as amended from time to time (or any successor statute), or any substantially similar vehicle for the holding of real estate indebtedness without the incurrence of taxation.

“Renewal Lease” shall have the meaning set forth in Section 4.10 hereof.

“Rents and Profits” shall mean all rents (including, without limitation, minimum rents, additional rents and percentage rents), rent equivalents, termination payments, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, all other amounts payable as rent under any Lease or other agreement relating to the Property, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower or its agents or employees from any and all sources arising from or attributable to the Property, and proceeds, if any, from business interruption or other loss of income insurance.

“Rent Roll” shall mean a schedule of all Leases affecting the Property, accurately and completely setting forth in all material respects for each Lease the following: the name of the Tenant, the space demised to such Tenant, the Lease expiration date, extension and renewal provisions, cancellation and termination provisions, the base rent payable, the security deposit held thereunder and any other material provisions of such Lease customarily included in similar schedules.

“Replacement Ground Lease” shall have the meaning set forth in Section 4.1(rr) hereof.

“Replacement Reserve” shall have the meaning set forth in Section 4.28 hereof.

“Reserves” shall mean, collectively, all cash funds, deposit accounts and other rights and evidence of rights to cash, now or hereafter created or held by Lender pursuant to this Agreement or any other of the Loan Documents, including, without limitation, all funds now or hereafter on deposit in the Impound Account, and in the reserves required pursuant to Section 4.28 hereof.

“Restoration” shall have the meaning set forth in Section 4.7 hereof.

“Sale” shall have the meaning set forth in Section 4.11 hereof.

“S&P” shall mean Standard & Poor’s Ratings Group.

“Scheduled Maturity Date” shall mean October 1, 2025.

“Secondary Market Transaction” shall mean (1) any sale of this Agreement, the Mortgage, Note and other Loan Documents to one or more Investors as a whole loan, (2) a participation of the Debt to one or more Investors, (3) a securitization of the Loan, (4) any other sale or transfer of the Debt or any interest therein to one or more Investors.

“Securities Act” shall mean the Securities Act of 1933, and the regulations promulgated thereunder, as amended from time to time.

“Securitization Closing Date” shall mean the date upon which a Secondary Market Transaction closes, if any.

“Securitization Documents” shall mean the documents effecting any Secondary Market Transaction in which the Loan (or any portion of, or interest in, the Loan) may be included, and/or the documents creating and/or governing any Trust created thereby, and/or any other document, instrument or agreement in connection with the foregoing establishing conditions for the administration and/or servicing of the Loan following any Secondary Market Transaction.

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

“SPE Component Entity” shall mean a corporation or an SPE-Qualifying LLC that satisfies all of the following at all times: (i) the sole asset of such entity is its ownership interest in Borrower, and such ownership interest represents not less than one-half of one percent (0.5%) direct ownership in Borrower; (ii) such entity has, at all times, at least one (1) Independent Director; (iii) includes, in its Organizational Documents, provisions substantially similar to clauses (i) through (v), inclusive, of Section 4.27(c) of this Agreement; (iv) includes, in its Organizational Documents, provisions substantially similar to Section 4.27(d), (g), and (i) of this Agreement; (v) such entity has no debt (whether secured or unsecured, direct or contingent, including pursuant to any guaranty); and (vi) such entity agrees in writing with Lender to comply with the relevant provisions of this Agreement.

“SPE-Qualifying LLC” shall mean a limited liability company formed under the laws of the State of Delaware or the laws of the State of Maryland which (i) at all times has at least one springing member that, upon the dissolution of all of other members of (or the withdrawal or the disassociation of all other members from) such limited liability company, shall immediately become the sole member of such limited liability company, and (ii) otherwise meets the criteria then applicable to such entities as established by the Rating Agencies and/or generally applicable to Secondary Market Transactions, and (iii) generally meets the requirements of Section 4.27 of this Agreement.

“Subaccounts” shall have the meaning set forth in Section 3.2 hereof.

“Successor Guarantor” shall have the meaning set forth in Section 4.11 hereof

“Taxes” shall have the meaning set forth in Section 4.5 hereof.

“Tenant” shall mean any Person leasing, subleasing or otherwise occupying any portion of the Property under a Lease.

“Tenant Direction Letter” shall have the meaning set forth in Section 3.1 hereof.

“Tenant Financial Information” shall have the meaning set forth in Section 4.10 hereof.

“Tenant Improvements” shall have the meaning set forth in Section 4.28 hereof.

“Term” shall mean the entire term of this Agreement, which shall expire upon repayment in full of the Debt and full performance of each and every obligation to be performed by Borrower pursuant to the Loan Documents.

“Terminating Tenant” shall have the meaning set forth in Section 4.28 hereof.

“Title Insurance Policy” shall have the meaning set forth in Section 4.1(k) hereof.

“Transfer” shall have the meaning set forth in Section 4.11 hereof.

“Trust” shall mean the REMIC (or other transferee pursuant to a Secondary Market Transaction, as to which interests are conveyed to one or more Investors) that holds the Loan.

“Trust Account” shall mean a segregated trust account maintained by a corporate trust department of a federal depository institution or a state chartered depository institution subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulations §9.10(B) which has corporate trust powers and is acting in its fiduciary capacity.

“UCC Collateral” shall have the meaning set forth in the Mortgage.

“Underwritten Net Cash Flow” shall mean, for any period, the underwritten net cash flow for the Property (calculated in accordance with Lender’s underwriting standards for financings similar to the Loan) for such period, annualized, reflecting (i) an assumed vacancy rate equal to the greater of (1) the actual vacancy rate at the Property, (2) the market vacancy in the Richardson/Plano Class A office submarket, or (3) a five percent (5.0%) vacancy rate) and (ii) operating expenses (including such reserves for tenant improvements, leasing commissions, repairs and replacements, taxes and insurance premiums as Lender requires), and (iii) management fees (equal to the greater of the actual management fees paid by Borrower or a three percent (3.0%) management fee), and (iv) an ongoing replacement reserve equal to $0.20 per square foot, and (v) a rollover reserve equal to $230,601.00 per annum.

“United Healthcare” shall mean United HealthCare Services, Inc., together with its permitted successors and/or assigns under the United Healthcare Lease.

“United Healthcare Cash Collateral Reserve” shall have the meaning set forth in Section 4.28 hereof.

“United Healthcare Lease” shall mean, collectively, (i) that certain office lease dated April 12, 2012, between GPI-M 190A, LP, as landlord, and United Healthcare, as tenant, together with and as amended by that that certain Acceptance of Premises Memorandum dated October 5, 2012, that certain First Amendment dated March 1, 2013 and that certain Second Amendment dated February 16, 2015, covering approximately 50,908 square feet of space at the Property at the date of this Agreement, and (ii) that certain office lease dated March 12, 2008, between GPI-M 190B, LP, as landlord, and United

Healthcare, as tenant, together with and as amended by that certain Acceptance of Premises Memorandum dated October 31, 2008, that certain notice letter dated June 25, 2010, that certain Release and Indemnity Agreement dated March 2013 and that certain First Amendment dated February 16, 2015, covering approximately 147,049 square feet of space at the property at the date of this Agreement, which covers an approximate aggregate space of 197,957 square feet at the Property at the date of this Agreement.

“United Healthcare Premises” shall mean that certain premises demised under the United Healthcare Lease.

“United Healthcare Rent Reserve” shall have the meaning set forth in Section 4.28(k) hereof

“United Healthcare Trigger Period” (i) shall commence upon the occurrence of each of the following (each time any of the following may occur):

(a) Tenant under the United Healthcare Lease failing to provide written notice to Borrower of its election to extend or renew the United Healthcare Lease for at least five (5) years on or before 15 months prior to lease expiration at a base rent that is not less than $24 per square foot;

(b) the receipt by Borrower or Property Manager of notice from the Tenant under the United Healthcare Lease that it is exercising its right to terminate the United Healthcare Lease pursuant to the United Healthcare Lease, excluding such right to terminate with relation only to the termination option specifically provided in that certain Second Amendment dated February 16, 2015 relating to the 50,908 square feet in building one at the Property unless such termination would result in a Low Debt Service Period;

(c) the date that the United Healthcare Lease (or any material portion of the premises demised thereunder) is surrendered, cancelled or terminated prior to its then current expiration date (including any rejection in a Bankruptcy Action) or the receipt by Borrower or Property Manager of notice from the Tenant under the United Healthcare Lease of its intent to surrender, cancel or terminate the United Healthcare Lease (or any material portion of the premises demised thereunder) prior to its then current expiration date;

(d) Tenant under the United Healthcare Lease failing to be in actual, physical occupancy of the United Healthcare Premises, ceases operations and the conduct of its business and/or such Tenant “going dark” in or vacating the United Healthcare Premises;

(e) any Bankruptcy Action of the Tenant under the United Healthcare Lease or any guarantor of such Lease; or

(f) an event of default under the United Healthcare Lease beyond any applicable notice and cure periods; and

(ii) shall end upon the first to occur of the following:

(A) in the case of clauses (i)(a), (i)(b), (i)(c), and (i)(d) above, each of the Occupancy Conditions with respect to the entire United Healthcare Premises have been satisfied;

(B) in the case of clauses (i)(a) and (i)(b) above, provided no other United Healthcare Trigger Period has commenced, the date on which Tenant under the United Healthcare Lease irrevocably (A) exercises its renewal or extension option (or otherwise enters into an extension

agreement with Borrower and acceptable to Lender) with respect to all of the United Healthcare Premises for a term of at least five (5) years at a base rent that is not less than $24 per square foot or (B) revokes or rescinds in writing all termination or cancellation notices with respect to the United Healthcare Lease and re-affirms such Lease as being in full force and effect without any default thereunder, as applicable, and such Tenant is (w) conducting normal business operations at the entire United Healthcare Premises, (x) is paying full, unabated rent under the United Healthcare Lease, (y) is not in default (beyond any applicable notice and cure period) in accordance with the terms and conditions of the United Healthcare Lease and (z) has executed and delivered estoppel certificates reasonably acceptable to Lender certifying the foregoing and confirming that all Leasing Costs and other material costs and expenses associated with the United Healthcare Lease have, to the extent then due and owing, been paid in accordance with the terms of the United Healthcare Lease;

(C) in the case of clause (i)(c) above, provided no other United Healthcare Trigger Period has commenced, if such termination option is not validly exercised by the Tenant under the United Healthcare Lease by the latest exercise date specified in the United Healthcare Lease or is otherwise validly and irrevocably waived in writing by the Tenant under the United Healthcare Lease, and such Tenant has re-affirmed the United Healthcare Lease as being in full force and effect without any default thereunder;

(D) in the case of clause (i)(d) above, provided no other United Healthcare Trigger Period has commenced, Borrower has provided to Lender evidence reasonably satisfactory to Lender (which shall include a duly executed estoppel certificate from such Tenant) that such Tenant is in actual, physical possession and occupancy of (and re-commenced its operations at) the United Healthcare Premises, such Tenant is open to the public for business during customary hours, not “dark” in United Healthcare Premises and paying full, unabated rent without offset, and that there are no Leasing Costs due and payable (or to become due or payable) and/or Tenant Improvements to be completed in connection with such re-occupancy or re-commencement of operations at the United Healthcare Premises;

(E) in the case of clause (i)(e) above, provided no other United Healthcare Trigger Period has commenced, such Tenant and/or the guarantor under the United Healthcare Lease, as applicable, is no longer insolvent or subject to any Bankruptcy Action and has affirmed the United Healthcare Lease pursuant to final, non-appealable order of a court of competent jurisdiction; or

(F) in the case of clause (i)(f) above, provided no other United Healthcare Trigger Period has commenced, Borrower has provided Lender with evidence reasonably satisfactory to Lender (which can include a duly-executed estoppel certificate from such Tenant) that all defaults under the United Healthcare Lease have been cured.

“Vacated Space” shall have the meaning set forth in Section 4.28 hereof.

“Yield Maintenance Amount” shall mean the present value of a series of payments each equal to the Payment Differential and payable on each Payment Date over the remaining original term of the Loan and, with respect to the principal balance of the Note due to be outstanding on such date, on the Maturity Date, discounted at the Reinvestment Yield for the number of months remaining as of the date of such prepayment to each such Payment Date and the Maturity Date, respectively.

ARTICLE II

GENERAL TERMS

2.1 Loan Commitment; Disbursement to Borrower.

(a) Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make and Borrower hereby agrees to borrow the Loan.

(b) Disbursement of Loan to Borrower. Borrower may request and receive only one borrowing hereunder in respect of the Loan.

(d) No Reborrowing of Amounts Repaid. Any amount borrowed and repaid in respect of the Loan may not be reborrowed.

(e) The Note, this Agreement, the Mortgage and Loan Documents. The Loan shall be evidenced by the Note and this Agreement and secured by the Mortgage, the Assignment of Leases and the other Loan Documents.

2.2 Interest Rate.

(a) Interest Generally. Interest on the outstanding principal balance of the Loan shall accrue from the Closing Date to the Maturity Date at the Interest Rate. Borrower shall pay to Lender on each Payment Date the interest accrued on the Loan for the preceding Interest Accrual Period.

(b) Interest Calculation. Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year by (c) the outstanding principal balance of the Loan.

(c) Default Rate. During the existence of an Event of Default, Borrower shall pay interest on the entire unpaid principal sum and any other amounts due under the Loan Documents at the Default Rate. The Default Rate shall be computed from the occurrence of an Event of Default until the cure of all Event(s) of Default then continuing. Amounts of interest accrued at the Default Rate shall constitute a portion of the Debt, and shall be deemed secured by the Loan Documents. This clause, however, shall not be construed as an agreement or privilege to extend the date of the payment of the Debt, nor as a waiver of any other right or remedy accruing to Lender by reason of the occurrence of any Event of Default.

(d) Usury Savings. This Agreement, the Note and the other Loan Documents are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the maximum interest rate which Borrower is permitted by applicable law to contract or agree to pay (the “Maximum Legal Rate”). If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender

for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

2.3 Loan Payment.

(a) Payments Generally. If any payment hereunder or under any Loan Document becomes due and payable on a day other than a Business Day, such payment shall be payable on the next Business Day (but the passing of any grace period shall be measured from the original date on which such payment was due and payable). All amounts due pursuant to this Agreement and the other Loan Documents shall be payable without setoff, counterclaim, defense or any other deduction whatsoever.

(b) Principal and Interest Payments. Payments of principal and interest under the Loan, calculated in accordance with the terms hereof, shall be due and payable (without notice or demand) as follows:

(i) interest only at the Interest Rate in effect for the First Interest Accrual Period shall be due and payable concurrently with the making of the advance of the principal balance of the Loan, as shown on the Closing Statement;

(ii) for each Interest Accrual Period following the First Interest Accrual Period, Borrower shall pay to Lender the Monthly Payment Amount on the related Payment Date, to be applied as set forth in Section 2.3(e) of this Agreement; and

(iii) the entire outstanding principal amount of the Loan, together with all accrued and unpaid interest and any other charges due thereon and all other sums due and payable pursuant to this Agreement and/or the other Loan Documents, shall be due and payable on the Maturity Date.

Payments made by Borrower under this Agreement shall be made free and clear of, and without reduction for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding income and franchise taxes of the United States of America or any political subdivision or taxing authority thereof or therein (such non-excluded taxes being called “Additional Taxes”). If any Additional Taxes are required to be withheld from any amounts payable to Lender hereunder or under any of the other Loan Documents, the amounts so payable to Lender shall be increased to the extent necessary to yield to Lender (after payment of all Additional Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement.

(c) Late Payment Charge. If any Monthly Payment Amount or any other sums due under the Loan Documents (excluding only the outstanding principal due on the Maturity Date) is not paid by Borrower by the date on which it is due (after giving effect to any applicable notice, cure and/or grace period set forth in Section 5.1(a) below), Borrower shall pay to Lender upon demand an amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount permitted by applicable law (the “Late Payment Charge”) in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall be secured by the Mortgage and the other Loan Documents to the extent permitted by applicable law.

(d) Method and Place of Payment. Payments shall be paid by Borrower, without set-off or counterclaim, by wire transfer to Lender at 425 Lexington Avenue, Attention: Agency Services, New York, New York 10017, or to such other location or account as Lender may specify to Borrower from time to time, in federal or other immediately available funds in lawful money of the United States of America, not later than 12:00 noon, New York City time, on the date due. If the date for any payments of principal is extended on account of the foregoing or on account of operation of law or otherwise, interest thereon shall be payable at the then applicable rate during such extension.

(e) Application of Payments.

(i) Except during the continuance of an Event of Default, all proceeds of any repayment, including prepayments, of the Loan (a “Payment”) shall be applied to pay: (1) first, any costs and expenses of Lender (and any Servicer) required to be reimbursed under the terms of the Loan Documents; (2) second, to any Late Payment Charges and accrued and unpaid interest payable at the Default Rate; (3) third, accrued and unpaid interest payable at the Interest Rate; (4) fourth, any other amounts then due and owing under the Loan Documents (including, without limitation, payments to any Reserve required hereunder); and (5) fifth, to the outstanding principal amount of the Loan. After the occurrence and during the continuation of an Event of Default, all proceeds of repayment, including any payment or recovery on the Collateral, shall be applied in such order and in such manner as Lender shall elect in Lender’s sole and absolute discretion.

(ii) To the extent that Borrower makes a Payment or Lender receives any Payment or proceeds for Borrower’s benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the obligations of Borrower hereunder intended to be satisfied shall be revived and continue as if such Payment or proceeds had not been received by Lender.

2.4 Prepayment Restrictions.

(a) Restriction on Prepayment. The principal balance of the Loan may not be prepaid in whole or in part (except with respect to the application of casualty or condemnation proceeds, as to which the provisions of Section 2.4(e) shall apply) prior to the Lockout Release Date. From and after the Lockout Release Date, the Loan may be prepaid in whole only, and not in part, in accordance with Section 2.4(c) of this Agreement. Notwithstanding the foregoing, if an Event of Default is continuing at the time of prepayment of the Loan, then the provisions of Section 2.4(d) of this Agreement shall apply.

(b) Restriction on Defeasance. Borrower may effect a Defeasance only as set forth in Section 2.5 below.

(c) Conditions for Prepayment. On the Lockout Release Date, or at any time thereafter, provided no Event of Default exists, the principal balance of the Loan may be prepaid, in whole but not in part (except with respect to the application of casualty or condemnation proceeds), on any Payment Date upon not less than thirty (30) days nor more than ninety (90) days prior written notice to Lender specifying the Payment Date on which prepayment is to be made (the “Prepayment Date”), provided that such prepayment is accompanied by payment of (i) any costs and expenses of Lender required to be reimbursed under the terms of the Loan Documents, (ii) interest accrued and unpaid on the principal balance of the Loan to and including the Prepayment Date, and (iii) all other sums then due under this Agreement and the other Loan Documents. If any such notice of prepayment is given, the principal balance of the Loan that is the subject of such notice of prepayment and the other sums required under this paragraph shall be due and payable on the Prepayment Date.

(d) Prepayment During the Continuation of an Event of Default. If prepayment of the Loan, in whole or in part, occurs at any time when an Event of Default shall be continuing (irrespective of whether foreclosure proceedings have been commenced) prior to the Lockout Release Date, then in addition to the payment of the amounts specified in clauses (i) through (iii) of Section 2.4(c) above, Borrower shall also pay to Lender a prepayment fee equal to the greater of (1) the Yield Maintenance Amount, and (2) an amount equal to two percent (2%) of the principal amount of the Loan prepaid.

(e) Prepayment from Casualty or Condemnation Proceeds. Prepayments of principal (whether full or partial) resulting from the application of casualty or condemnation proceeds to the Debt (whether such application is required by Lender or requested by Borrower) shall be applied to the payments of principal due under the Loan in inverse order of maturity. Any such repayment shall not change the amounts of subsequent monthly installments of principal (if any are required hereunder) nor change the dates on which such installments are due, unless Lender shall otherwise agree in writing. In addition, except as hereinafter provided in this subparagraph (e), prepayments of principal (whether full or partial) resulting from the application of casualty or condemnation proceeds to the Debt under this subparagraph (e) shall be made without the imposition of the Yield Maintenance Amount or any other premium or penalty, provided, however, if an Event of Default shall have occurred and be continuing at the time of the related casualty or condemnation, in addition to applying such proceeds as provided in this Agreement, Borrower shall pay the Yield Maintenance Amount to Lender. Lender, at its option, may elect to use such proceeds and Yield Maintenance Amount (if any) to defease an amount of the Loan equal to the proceeds applied as a prepayment, in the manner provided in Section 2.5 below.

2.5 Defeasance. At any time during the Defeasance Period, Borrower may obtain a release of the Property from the lien of the Mortgage and other Loan Documents upon the satisfaction of the following conditions:

(a) Not less than thirty (30) days’ prior written notice shall be given to Lender specifying a date (the “Defeasance Date”) on which the Defeasance Deposit is to be delivered;

(b) All accrued and unpaid interest on the Loan and all other sums due hereunder and under the other Loan Documents up to the Defeasance Date, including, without limitation, all amounts payable pursuant to Section 2.5(f) hereof, shall be paid in full on or prior to the Defeasance Date;

(c) No Event of Default, shall be continuing either at the time Borrower gives notice of the Defeasance Date to Lender or on the Defeasance Date;

(d) On or before the Defeasance Date, Borrower shall deliver (or cause to be delivered) to Lender each of the following:

(i) the Defeasance Deposit, together with the amount required by Section 2.5(f) hereof;

(ii) the Defeasance Security Agreement, duly executed by Borrower, together with an endorsement of the Defeasance Collateral by the holder thereof as directed by Lender (or a written instrument of transfer in form and substance wholly satisfactory to Lender (including, without limitation, such instruments as may be required by the depository institution holding such securities to effectuate book-entry transfers and pledges through the book-entry facilities of such institution)) sufficient so as to create a first priority security interest therein in favor of Lender in conformity with any applicable state and federal laws governing granting of such security interests;

(iii) an opinion of counsel for Borrower, in form and substance (and delivered by counsel) satisfactory to Lender in its sole discretion stating, among other things, (w) that Lender has a perfected first priority security interest in the Defeasance Deposit and the Defeasance Collateral, (x) that the Defeasance Security Agreement is enforceable against Borrower in accordance with its terms, (y) that the Defeasance will not (1) cause the Trust to fail to qualify as a REMIC within the meaning of Section 860D of the Code as a result of such Defeasance, (2) constitute a “significant modification” of the Loan within the meaning of Treasury Regulation Section 1.1001-3(b) or cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code, (3) result in a deemed exchange for purposes of the Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes, and (4) constitute an avoidable preference under Section 547 of the Bankruptcy Code, or similar provisions of any applicable state law, and (z) if a Non-Consolidation Opinion was delivered in connection with the closing of the Loan, setting forth such comparable opinions as to Successor Borrower as Lender shall reasonably require (or as shall be required to satisfy the Securitization Documents);

(iv) a Rating Confirmation from each of the applicable Rating Agencies for any securities issued in connection with a Secondary Market Transaction;

(v) a certificate in form and substance acceptable to Lender, from a nationally-recognized firm of independent certified public accountants acceptable to Lender and satisfying the requirements of the Securitization Documents, certifying that the Defeasance Collateral is sufficient to generate monthly amounts equal to or greater than the payments due on all successive Payment Dates occurring after the Defeasance Date through and including the Maturity Date, with each such payment being equal to or greater than (1) the Monthly Payment Amount due on such Payment Date, and (2) with respect to the payment due on the Maturity Date, the entire outstanding principal balance of the Loan together with any interest accrued as of such date and all other amounts payable pursuant to the Loan Documents on such date;

(vi) if required to comply with the requirements of any Securitization Documents, a certification of Borrower and Guarantor that the purpose of the defeasance is to facilitate the disposition of the Property, the refinancing of the Property or any other customary commercial transaction, and is not part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages; and

(vii) such other certificates, opinions, documents or instruments as Lender may reasonably require to satisfy any conditions of the Securitization Documents.

(e) As part of the Defeasance, Borrower shall assign all its obligations and rights in, to and under the Note, the Defeasance Collateral and the Defeasance Security Agreement to a successor entity acceptable to Lender (“Successor Borrower”). In connection therewith, the Successor Borrower shall execute an assumption agreement in form and substance satisfactory to Lender in its sole discretion pursuant to which it shall assume Borrower’s obligations under the Note and the Defeasance Security Agreement and accept an assignment of the Defeasance Collateral. In connection with such assignment and assumption, Borrower and/or Successor Borrower shall deliver to Lender an opinion of counsel in form and substance and delivered by counsel satisfactory to Lender in its sole discretion stating, among other things, that such assumption agreement is enforceable against Borrower and Successor Borrower, as applicable, in accordance with its terms and that the Note, the Defeasance Security Agreement and any other documents executed in connection with such defeasance are enforceable against Borrower or Successor Borrower, as applicable, in accordance with their respective terms.

(f) Borrower shall pay, simultaneously with the Defeasance of the Loan as aforesaid, all reasonable costs and expenses incurred by Lender and Successor Borrower and their respective agents and servicers in satisfying the foregoing conditions and of the transactions contemplated by this Section 2.5, including, without limitation, the reasonable and customary brokerage or other transaction fees in purchasing the Defeasance Collateral, any reasonable legal fees and expenses incurred in connection with obtaining and reviewing the Defeasance Collateral and the preparation of the Defeasance Security Agreement and related documentation and confirming the satisfaction of the other conditions to the Defeasance, and the cost of any Rating Confirmation.

(g) Upon compliance with all of the foregoing requirements of this Section 2.5, (i) Borrower and Guarantor shall be relieved of their respective obligations under the Note and the Defeasance Security Agreement and the other Loan Documents (except to the extent such obligations survive any repayment or defeasance of the Loan), and (ii) the Property shall be released from the lien of the Mortgage and of the other Loan Documents, and (iii) the Defeasance Collateral shall constitute the only collateral which shall secure the Note. Lender will, at Borrower’s expense, execute and deliver any agreements reasonably requested by Borrower to release the Property from such liens.

(h) The entity initially named herein as “Lender” shall have the sole right to (i) establish or designate the Successor Borrower and (ii) purchase or cause the purchase of the Defeasance Collateral with the Defeasance Deposit, which rights (collectively, the “Defeasance Rights”) may be exercised in Lender’s sole discretion and shall be retained by such entity initially named herein as “Lender” notwithstanding any transfer or securitization of the Loan unless such Defeasance Rights are expressly conveyed together therewith; the Defeasance Rights may be conveyed separately from the Loan.

ARTICLE III

CASH MANAGEMENT

3.1 Clearing Account; Deposit of Rents and Profits; Withdrawals from Clearing Account.

(a) Borrower confirms that upon the commencement of a Cash Management Period and at all times thereafter, Borrower shall establish, and Borrower covenants that it shall maintain, pursuant to the Clearing Bank Agreement, an Eligible Account at the Clearing Bank (the “Clearing Account”). Borrower irrevocably agrees that, upon the first occurrence of a Cash Management Period, Lender may direct the Clearing Bank to open the Clearing Account in accordance with the Clearing Bank Agreement. The Clearing Account shall be in the name of the Borrower for the benefit of the Lender, provided that Borrower shall be the owner of all funds on deposit in such accounts for federal and applicable state and local tax purposes and the Clearing Account shall be assigned the tax identification number of Borrower. Borrower acknowledges and agrees that, so long as any portion of the Debt remains outstanding, neither Borrower, Property Manager nor any other Person acting on behalf of, or claiming through, Borrower or Property Manager, shall have any right or authority to change the identity, name, location, account number, bank location or other feature or attribute of the Clearing Account without the prior written consent of Lender, which consent may be withheld by Lender in its sole and absolute discretion. In the event that Clearing Bank requires a modification to the Clearing Bank Agreement, such modification shall only be made following Lender’s written consent (which may be granted or withheld in Lender’s sole and absolute discretion) and if Lender refuses to agree to the requested change, then Borrower shall establish a new Clearing Account at an Eligible Bank (and such Eligible Bank shall enter into a new Clearing Bank Agreement in form and substance satisfactory to Lender). In addition, at the

election of Lender, exercised from time to time (i) after the occurrence and during the existence of an Event of Default, (ii) at any time Lender reasonably believes that the Clearing Bank is not adequately performing its duties under the Clearing Bank Agreement, (iii) at any time after the credit rating of the Clearing Bank falls below the requirements of an Eligible Bank (unless Lender has waived the Eligible Bank requirements) or (iv) at any time after Lender has waived the Eligible Bank requirements for the Clearing Bank, but Lender has elected, in its sole and absolute discretion, to require that the Clearing Account be located at an Eligible Bank, Borrower will establish a new Clearing Account at an Eligible Bank (and such Eligible Bank shall enter into a new Clearing Bank Agreement in form and substance satisfactory to Lender). Borrower hereby irrevocably appoints Lender as its attorney-in-fact (coupled with an interest) to execute a modification of the Clearing Bank Agreement approved by Lender or establish a new Clearing Account at an Eligible Bank upon Lender’s exercise of its rights under the preceding sentence, upon Borrower’s failure to do so within ten (10) days following Lender’s written demand.

(b) The Clearing Account shall be under the sole and exclusive dominion and control of the Lender and neither Borrower, nor Property Manager, nor any other party claiming on behalf of, or through, Borrower or Property Manager, shall have any right to transfer, withdraw, access or otherwise direct the disposition of funds on deposit or deposited into the Clearing Account or have any other right or power with respect to the Clearing Account; provided, however, that Borrower or Property Manager or their designee shall have the right, if available through the Clearing Bank, to access information regarding balances, deposits into and withdrawals from the Clearing Account, so long as such information access right does not permit Borrower or Property Manager or any party other than Lender or Servicer to transfer, withdraw, access or otherwise direct the disposition of funds on deposit in the Clearing Account.

(c) Borrower agrees to timely pay the customary fees and expenses of Clearing Bank in connection with the Clearing Account and any Lockbox Address, as such fees and expenses are established from time to time. In the event that Clearing Bank seeks reimbursement of any item deposited into the Clearing Account but returned or disallowed or reimbursement of any other monetary sum pursuant to the Clearing Bank Agreement, Borrower shall promptly and timely pay such sum. In the event Clearing Bank seeks reimbursement of sums from Lender pursuant to the Clearing Bank Agreement, Borrower shall, upon demand by Lender, pay Clearing Bank such sums. Failure of Borrower to pay any sum due and payable (by Borrower or Lender) to the Clearing Bank in connection with the Clearing Account within five (5) days after written demand by Lender shall constitute an Event of Default under this Agreement.

(d) The following provisions shall apply:

(i) Upon the occurrence of a Cash Management Period and upon written demand by Lender, Borrower shall establish with Clearing Bank a lock box address at the Clearing Bank (the “Lockbox Address”).

(ii) Upon the commencement of a Cash Management Period and upon written demand by Lender and until the Debt is repaid in full, Borrower shall, or shall cause Property Manager to, notify and advise each Tenant under each Lease (whether such Lease is presently effective or executed after the date hereof) pursuant to an instruction letter in the form of Exhibit E attached hereto (a “Tenant Direction Letter”) to send directly to the Lockbox Address (or to the Clearing Account via ACH transfer or wire transfer) all sums due and payable by such Tenant under its Lease as and when due and payable under its Lease. At or prior to the Closing Date, Borrower shall deliver to Lender partially-completed original Tenant Direction Letters addressed to all Tenants listed on the Rent Roll attached hereto as Exhibit B. Borrower hereby grants to Lender a power of attorney (which power of attorney shall be coupled with an interest and irrevocable so long as any portion of the Debt remains outstanding) to sign and

deliver to any Tenant, (i) upon the occurrence of a Cash Management Period, or (ii) upon failure of Borrower to do so within five (5) days following written demand from Lender, such partially-completed or completed Tenant Direction Letters, as applicable.

(iii) During any Cash Management Period and until the Debt is repaid in full, Borrower shall, or shall cause Property Manager to, instruct all Persons that maintain open accounts with Borrower or Property Manager with respect to the Property or with whom Borrower or Property Manager does business on an “accounts receivable” basis with respect to the Property (any such Person, an “Accounts Receivable Payor”), to deliver all payments due under such accounts directly to the Lockbox Address (or to the Clearing Account via ACH transfer or wire transfer) (such an instruction by Borrower, an “Accounts Receivable Instruction”). Neither Borrower nor Property Manager shall direct any such Person to make payments due under such accounts in any other manner.

(iv) Intentionally omitted.

(v) If Lender requires Borrower to deliver any Direction Letters or Accounts Receivable Instructions, then if notwithstanding the foregoing, Borrower or Property Manager should receive any Rents and Profits, the recipient of such Rents and Profits shall deposit same with the Clearing Bank within one (1) Business Day after receipt.

(vi) Without the prior written consent of Lender, so long as any portion of the Debt remains outstanding, neither Borrower nor Property Manager shall terminate, amend, revoke or modify any Direction Letter or any Accounts Receivable Instruction in any manner whatsoever or direct or cause any Tenant or any Accounts Receivable Payor to pay any amount in any manner other than as provided in the related Direction Letter or Accounts Receivable Instruction.

(vii) So long as any portion of the Debt remains outstanding, neither Borrower, Property Manager nor any other Person shall open or maintain any accounts into which Rents and Profits are deposited other than the Clearing Account. The foregoing shall not prohibit Borrower or Property Manager from utilizing one or more separate accounts for the disbursement or retention of funds that have been transferred to Borrower or the Property Manager pursuant to the express terms of this Agreement.

(e) Absent the existence of a Cash Management Period, on each Business Day on which available funds are on deposit in the Clearing Account, Clearing Bank shall transfer all such available funds to an operating account established, maintained by and under the exclusive dominion and control of Borrower (the “Operating Account”). Commencing with a Cash Management Commencement Date and continuing during the existence of a Cash Management Period, without limiting the foregoing provisions, all transfers from the Clearing Account to the Operating Account shall immediately cease and Lender shall have the right, at its sole option, to instruct the Clearing Bank, from time to time, to administer available sums on deposit in or deposited into the Clearing Account in the manner set forth in Section 3.3 below or to transfer available sums on deposit in the Clearing Account, from time to time, to a Cash Management Account (as defined below). The initial Operating Account is set forth in the Clearing Bank Agreement.

3.2 Cash Management Account; Processing of Rents and Profits.

(a) At Lender’s option, Lender may establish an Eligible Account (the “Cash Management Account”) at an Eligible Bank (the “Cash Management Bank”) selected by Lender in its sole discretion. The Cash Management Account shall be in the name of the Borrower for the benefit of

the Lender, provided that Borrower shall be the owner of all funds on deposit in such accounts for federal and applicable state and local tax purposes and the Cash Management Account shall be assigned the tax identification number of Borrower.

(b) The Cash Management Account shall be under the sole and exclusive dominion and control of the Lender and neither Borrower, Property Manager nor any other party claiming on behalf of, or through, Borrower or Property Manager, shall have any right to transfer, withdraw, access or otherwise direct the disposition of funds on deposit in the Cash Management Account or have any other right or power with respect to the Cash Management Account.

(c) Borrower agrees to timely pay the customary fees and expenses of Cash Management Bank in connection with the Cash Management Account, as such fees and expenses are established from time to time. Failure of Borrower to pay any sum due and payable (by Borrower or Lender) to the Cash Management Bank in connection with the Cash Management Account within five (5) days after written demand by Lender shall constitute an Event of Default under this Agreement.

(d) At Lender’s option, the Cash Management Bank (or, if the Lender elects to utilize the Clearing Account as the Cash Management Account, the Clearing Bank (which shall in such context also be referred to herein as the Cash Management Bank)) shall transfer sums on deposit in the Cash Management Account to any number of subaccounts (collectively, the “Subaccounts”) which subaccounts shall be maintained on a ledger-entry basis and which Subaccounts may include, without limitation, one or more of the Impound Account and the Reserves.

(e) Upon a Cash Management Commencement Date and during the existence of a Cash Management Period, Lender or Servicer shall (so long as no Event of Default has occurred and is continuing) direct the Cash Management Bank to allocate and disburse amounts on deposit in and deposited into the Cash Management Account in accordance with the provisions of Section 3.3 below (the “Disbursement Instructions”); provided, however, that if no Disbursement Instructions are received by the Cash Management Bank with respect to a monthly period, the Cash Management Bank may allocate and disburse amounts in the Cash Management Account pursuant to the most recent Disbursement Instructions received from Lender or Servicer prior thereto.

3.3 Application and Disbursement of Funds.

(a) During any Cash Management Period, except as set forth is Section 3.3(c) hereof, on each Payment Date Lender shall disburse and/or allocate to Subaccounts, as applicable, amounts deposited into the Cash Management Account in the following order of priority:

(i) First, payments to the Impound Account in accordance with the terms and conditions of Section 4.6 hereof;

(ii) Next, to the payment of all amounts due under the Note on such Payment Date (including, without limitation, interest and, if applicable, principal) (which, following an Event of Default shall include, without limitation, interest at the Default Rate);

(iii) Next, payments of any other amounts due under the Loan Documents not otherwise addressed by this Section 3.3 (a) (including, without limitation, payments to any Reserves not otherwise addressed by this Section 3.3(a));

(iv) Next, payments to the Replacement Reserve, in accordance with the terms and conditions of Section 4.28 hereof;

(v) Next, payments to the Leasing Reserve, in accordance with the terms and conditions of Section 4.28 hereof;

(vi) Next, payments for monthly Cash Expenses, less amounts payable to affiliates of Borrower, incurred in accordance with the terms and conditions of the related Approved Annual Budget pursuant to a written request for payment submitted by Borrower to Lender specifying the individual Cash Expenses in a form acceptable to Lender;

(vii) Next, payments for monthly Cash Expenses payable to Affiliates of Borrower, incurred in accordance with the terms and conditions of the related Approved Annual Budget pursuant to a written request for payment submitted by Borrower to Lender specifying the individual Cash Expenses in a form acceptable to Lender;

(viii) Next, payment for monthly Net Capital Expenditures, incurred in accordance with the terms and conditions of the related Approved Annual Budget pursuant to a written request for payment submitted by Borrower to Lender specifying the individual Net Capital Expenditures in a form acceptable to Lender;

(ix) Next, payment for Extraordinary Expenses approved by Lender, if any; and

(x) Lastly, all amounts remaining after payment of the amounts set forth in clauses (i) through (ix) above (“Available Cash”):

(A) During a Cash Management Period continuing due to a United Healthcare Trigger Period, to the United Healthcare Cash Collateral Reserve to be held and disbursed in accordance with Section 4.28(g); or

(B) During a Cash Management Period continuing due to a Parsons Trigger Period, to the Parsons Cash Collateral Reserve to be held and disbursed in accordance with Section 4.28(i); or

(C) Provided that no United Healthcare Trigger Period or Parsons Trigger Period is continuing, to the Cash Collateral Reserve to be held or disbursed in accordance with Section 4.28(h).

(D) In the event that a United Healthcare Trigger Period and a Parsons Trigger Period exist simultaneously, then Lender shall, in its reasonable discretion, allocate funds under clause (x) to such Reserves and Leases as Lender determines.

(b) During any Cash Management Period, in the event that the Borrower must incur an Extraordinary Expense, then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for the Lender’s prior written approval.

(c) Notwithstanding any other provision of this Agreement or of the other Loan Documents, during the continuance of an Event of Default, Lender reserves the right, exercisable at its sole option, to (x) take such enforcement actions (including, but not limited to, acceleration and foreclosure of the Property) as it deems appropriate under the Loan Documents or otherwise under law or in equity and/or (y) apply Rents and Profits and other sums on deposit in or deposited into the Clearing Account, the Cash Management Account, the Impound Account, the Reserves and any other sums deposited by Borrower with Lender to the payment of the Debt, in such order, manner, amounts and times as Lender in its sole discretion determines, and such reserved rights shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents.

(d) Nothing in this Section 3.3 shall limit, reduce or otherwise affect Borrower’s obligations to make payments of the Monthly Payment Amount and, if applicable, payments to the Impound Account and/or any other Reserves, due under this Agreement and under the other Loan Documents, whether or not Rents and Profits are available to make such payments.

3.4 Security Interest. Borrower acknowledges and agrees that it has granted to Lender a first-priority security interest in the Clearing Account and Cash Management Account and the sums on deposit therein, among other things, pursuant to this Agreement. Borrower acknowledges and agrees that, without limitation of any other provisions of this Agreement, the Mortgage or the other Loan Documents, upon the occurrence and during the existence of an Event of Default, Lender may use the Clearing Account, the Cash Management Account and/or any sums on deposit in either of them for any or all of the following purposes: (i) repayment of the Debt, including, but not limited to, interest, principal and any prepayment premium or fee applicable to any such full or partial prepayment, (ii) reimbursement of Lender for all losses, fees, costs and expenses (including, without limitation, reasonable legal fees and disbursements) suffered or incurred by Lender as a result of such Event of Default, (iii) payment of any amount expended in exercising any or all rights and remedies available to Lender at law or in equity or under this Agreement or any of the other Loan Documents, (iv) payment of any item as required or permitted by this Agreement or any of the other Loan Documents or (v) any other purpose permitted by applicable law, provided, however, that any such application of funds shall not cure or be deemed to cure any Event of Default. Without limiting any other provisions hereof, each of the remedial actions described in the immediately preceding sentence shall be deemed to be a commercially reasonable exercise of Lender’s rights and remedies as a secured party with respect to the Clearing Account, the Cash Management Account and any sums on deposit in either of them and shall not in any event be deemed to constitute a setoff or a foreclosure of a statutory banker’s lien. Nothing in this Agreement shall obligate Lender to apply all or any portion of the Clearing Account or Cash Management Account to effect a cure of any Event of Default, or to pay the Debt, or, during an Event of Default, in any specific order of priority. The exercise of any or all of Lender’s rights and remedies under this Agreement with respect to the Clearing Account, Cash Management Account and/or the sums on deposit therein shall not in any way prejudice or affect Lender’s right to initiate and complete a foreclosure under the Mortgage.

3.5 Indemnification by Borrower. Lender shall be responsible for the performance only of such duties with respect to the Clearing Account and Cash Management Account as are specifically set forth herein, and no duty shall be implied from any provision hereof. Lender shall not be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect hereof, or to advance any of its own monies. Lender shall not be liable for any acts, omissions, errors in judgment or mistakes of fact or law, including, without limitation, with respect to proceeds on deposit in the Clearing Account or Cash Management Account. Borrower shall indemnify and hold the Lender, its successors, assigns, shareholders, directors, officers, employees, and agents (including, without limitation, any Servicers) harmless from and against any loss, cost or damage (including, without limitation, reasonable attorneys’ fees and disbursements) incurred by such parties in connection with the Clearing Account, Lockbox Address, Cash Management Account or the investment by Lender of amounts in the Cash Management Account or the Subaccounts, other than such as result from the gross negligence or willful misconduct of Lender or intentional nonperformance by Lender of its obligations under this Agreement.

3.6 Acknowledgment and Agreement by Property Manager. Borrower hereby covenants and agrees that it shall cause the Property Manager and any successor Property Manager to acknowledge, agree to and assume in writing, the duties and obligations of the Property Manager under this Article III.

3.7 Miscellaneous.

(a) Borrower agrees that the Cash Management Bank shall pay over to Lender all amounts deposited in the Cash Management Account on demand (to be applied by Lender in accordance with this Article III), without notice to the Borrower.

(b) Borrower confirms and agrees that, notwithstanding the provisions of this Agreement, Borrower retains sole control over the operation and maintenance of the Property, subject to the obligations of Borrower under this Agreement and the other Loan Documents, and Lender is not and shall not be deemed to be a mortgagee in possession.

(c) The Lender shall from time to time direct the Cash Management Bank (which direction shall not be required to be given more often than one time per month), to invest amounts allocated to the Subaccounts in investments selected by the Lender. All funds in the Subaccounts that are so invested are deemed to be held in the Subaccounts for all purposes of this Agreement, the Mortgage and the other Loan Documents. Except as otherwise provided in Section 4.30 hereof, all earnings on investments from the Subaccounts shall be for the benefit of the Lender. Borrower hereby assumes all risk of loss with respect to funds on deposit in the Subaccounts.

3.8 Annual Budgets.

For each fiscal year during the term of the Loan, Borrower shall submit to Lender for Lender’s written approval an Annual Budget not later than sixty (60) days prior to the commencement of such fiscal year (provided that the Annual Budget for the fiscal year in which the date hereof occurs shall be submitted to Lender for its approval prior to the date hereof, in form satisfactory to Lender setting forth in reasonable detail budgeted monthly operating income and monthly operating capital and other expenses for the Property. Each Annual Budget shall contain, among other things, limitations on management fees, third party service fees, and other expenses as Borrower may reasonably determine. Lender shall have the right to approve such Annual Budget, and in the event that Lender objects to the proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall within three (3) days after receipt of notice of any such objections revise such Annual Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall revise the same in accordance with the process described in this subparagraph until the Lender approves an Annual Budget. Until such time as Lender approves a proposed Annual Budget, the most recently Approved Annual Budget shall apply; provided that such Approved Annual Budget shall be adjusted to reflect actual increases in real estate taxes, insurance premiums and utilities expenses. Failure of the Borrower to submit, in a timely fashion, Annual Budgets in accordance with the provisions of this Section 3.8, shall constitute, at Lender’s option, an Event of Default. In addition, and without limiting any of the foregoing, the receipt and approval by Lender of an Annual Budget as required hereunder shall be a condition precedent to any obligation hereunder of Lender to release any funds from the Cash Management Account for the payment of Cash Expenses, Net Capital Expenditures and/or Extraordinary Expenses, and Borrower expressly acknowledges that it shall be responsible for the current and timely payment of such expenses notwithstanding that Lender’s shall not be required to release such funds.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER

For the purpose of inducing Lender to make the Loan and for the protection of the security of the Loan Documents, for so long as the Debt or any part thereof remains unpaid, Borrower makes the representations and warranties as set forth in Section 4.1 below and covenants and agrees as set forth elsewhere in this Article IV as follows:

4.1 Representations and Warranties of Borrower. Borrower, for itself and its successors and assigns, does hereby represent and warrant to Lender that:

(a) Organization and Existence; Organizational Chart. Borrower is duly organized and validly existing as a limited partnership in good standing under the laws of the Delaware and is qualified to do business in the state of Texas and in all other jurisdictions in which Borrower is transacting business. Attached as Exhibit C to this Agreement is a true, correct and complete organizational chart of Borrower. Borrower has delivered to Lender a true, correct and complete copy of the Organizational Documents for each Person (other than a natural person) shown thereon.

(b) Authorization. Borrower has the power and authority to execute, deliver and perform the obligations imposed on it under the Loan Documents and to consummate the transactions contemplated by the Loan Documents and has taken all necessary actions in furtherance thereof including, without limitation, that those partners or members of Borrower whose approval is required by the terms of Borrower’s organizational documents have duly approved the transactions contemplated by the Loan Documents and have authorized execution and delivery thereof by the respective signatories. To the best of Borrower’s knowledge, no other consent by any local, state or federal agency is required in connection with the execution and delivery of the Loan Documents.

(c) Valid Execution and Delivery. All of the Loan Documents requiring execution by Borrower have been duly and validly executed and delivered by Borrower.

(d) Enforceability. All of the Loan Documents constitute valid, legal and binding obligations of Borrower and are fully enforceable against Borrower in accordance with their terms, subject only to bankruptcy laws and general principles of equity.

(e) No Defenses. This Agreement, the Note, the Mortgage and the other Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense, nor would the operation of any of the terms of this Agreement, the Note, the Mortgage or any of the other Loan Documents, or the exercise of any right thereunder, render this Agreement, the Note, the Mortgage or any of the other Loan Documents unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury.

(f) Defense of Usury. Borrower knows of no facts that would support a claim of usury to defeat or avoid its obligation to repay the principal of, interest on, and other sums or amounts due and payable under, the Loan Documents.

(g) No Conflict/Violation of Law. The execution, delivery and performance of the Loan Documents by Borrower will not cause or constitute a default under or conflict with the organizational documents of Borrower, any Guarantor or any Constituent Entity of either of them. The execution, delivery and performance of the obligations imposed on Borrower under the Loan Documents will not cause Borrower or any Guarantor or any Constituent Entity of either of them to be in default, including after due notice or lapse of time or both, under the provisions of any agreement, judgment or order to which Borrower or any Guarantor or any Constituent Entity of either of them is a party or by which Borrower or any Guarantor or any Constituent Entity of either of them is bound.

(h) Compliance with Applicable Laws and Regulations. All of the Improvements and the use of the Property by Borrower comply with, and shall remain in compliance with, all applicable statutes, rules, regulations and private covenants now or hereafter relating to the ownership, construction, use or operation of the Property, including all applicable health, fire and building codes, and all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination, fair housing, environmental protection, zoning and land use (collectively, “Applicable Laws”). There is no evidence of any illegal activities relating to controlled substances on the Property. All licenses, permits, franchises, certificates of occupancy, consents and other approvals necessary for the operation of the Property for the use currently being made thereof have been obtained and are in full force and effect. All of the Improvements comply with all requirements of any applicable zoning and subdivision laws and ordinances.

(i) Consents Obtained. All consents, approvals, authorizations, orders or filings with any court or governmental agency or body, if any, required for the execution, delivery and performance of the Loan Documents by Borrower have been obtained or made.

(j) No Litigation. There are no pending actions, suits or proceedings, arbitrations or governmental investigations against the Property, Borrower, any Guarantor or any Constituent Entity of Borrower or any Guarantor, whether pursuant to the Loan Documents or otherwise, an adverse outcome of which would materially affect Borrower’s performance under this Agreement, the Note, the Mortgage or any of the other Loan Documents.

(k) Title. Borrower has good and marketable fee simple title to the Property, subject only to those matters expressly listed as exceptions to title or subordinate matters in the title insurance policy accepted by Lender in connection with this Agreement (the “Title Insurance Policy”), excepting therefrom all preprinted and/or standard exceptions (the “Permitted Exceptions”). Borrower has good and marketable leasehold title to the Leasehold Real Estate, pursuant to the Ground Lease for the terms described in the Ground Lease and subject only to the Permitted Exceptions. The possession of the Property has been peaceful and undisturbed and title thereto has not been disputed or questioned. Further, Borrower and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer and mortgage its interest in the Property in the manner and form done or intended under the Loan Documents. Borrower will preserve its interest in and title to the Property and will forever warrant and defend the same to Lender against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created under the Loan Documents against the claims of all persons and parties whomsoever, subject to the Permitted Exceptions. The foregoing warranty of title shall survive the foreclosure of the Mortgage and shall inure to the benefit of and be enforceable by Lender in the event Lender acquires title to the Property pursuant to any foreclosure.

(l) Permitted Exceptions. The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of Borrower to pay in full the principal and interest on the Note in a timely manner or (2) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the Property.

(m) First Lien. Upon the execution by Borrower and the recording of the Mortgage, and upon the filing of UCC-1 financing statements or amendments thereto, Lender will have a valid first lien on the Property and a valid security interest in all personal property encumbered thereby, subject to no liens, charges or encumbrances (which prohibition shall include any lien, charge or encumbrance securing a PACE Loan) other than the Permitted Exceptions.

(n) ERISA. Borrower has made and shall continue to make all required contributions to all employee benefit plans and multi-employer plans, if any, and Borrower has no knowledge of any material liability which has been incurred by Borrower which remains unsatisfied for any taxes or penalties with respect to any employee benefit plan or any multi-employer plan, and each such plan has been administered in compliance with its terms and the applicable provisions of ERISA and any other federal or state law and shall continue to be qualified and tax-exempt to the greatest extent permitted thereunder. Other than with respect to any such plans, Borrower is not an entity subject to regulation or restriction under ERISA, and no assets of Borrower are “plan assets” (as defined in ERISA).

(o) Financial Statements. The financial statements of Borrower (or any predecessor-in-interest to Borrower as owner of the Property, if applicable, that is an Affiliate of Borrower), any general partner, managing member or sole member of Borrower, and Guarantor that were furnished to Lender (whether in connection with Lender’s consideration to make the Loan, pursuant to the Loan Documents, or otherwise) are (in each case) complete and correct and fairly present the financial condition of the subject thereof (including, without limitation, assets, liabilities and liquidity) as of the date set forth thereon, and the results of operations of such party for the periods covered by such statements (if applicable). No material adverse change in the financial condition of any such party has occurred between the respective dates of the most recent financial statements that were furnished to Lender (whether in connection with Lender’s consideration to make the Loan, pursuant to the Loan Documents, or otherwise) relating to such entities or persons, and the date on which this representation is made (or deemed restated). After giving effect to the Loan, each of Borrower, any general partner, managing member or sole member of Borrower, and Guarantor each has a positive net worth. After the Loan is made, and giving effect to the payment obligations with respect to the Loan, Borrower will have sufficient working capital (including, if applicable, projected cash flow from the Property) not only to adequately maintain the Property as required by the Loan Documents but also to pay all of Borrower’s outstanding debts as they come due. Each of the representations in this paragraph shall be deemed restated as part of each request for any disbursement from any Reserve.

(p) No Other Obligations or Contingent Liabilities. Borrower has no material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Borrower is a party or by which Borrower or the Property is otherwise bound, other than (i) obligations incurred in the ordinary course of the operation of the Property that do not violate Section 4.27, and (ii) the Debt. Neither Borrower nor any Guarantor has any known material contingent liabilities, except for contingent liabilities of any Guarantor explicitly set forth on the most recent financial statements of such Guarantor that were delivered to Lender in connection with the Loan.

(q) Fraudulent Conveyance. Borrower (1) has not entered into the Loan or any Loan Document with the actual intent to hinder, delay, or defraud any creditor and (2) received reasonably equivalent value in exchange for its obligations under the Loan Documents. Giving effect to the Loan contemplated by the Loan Documents, the fair saleable value of Borrower’s assets exceed and will, immediately following the execution and delivery of the Loan Documents, exceed Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed or contingent liabilities. The fair saleable value of Borrower’s assets is and will, immediately following the execution and delivery of the Loan Documents, be greater than Borrower’s probable liabilities, including the maximum amount of its contingent liabilities or its debts as such debts become absolute and matured. Borrower’s assets do not and, immediately following the execution and delivery of the Loan Documents will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur debts and liabilities (including, without limitation, contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of Borrower). Neither Borrower, nor any member, partner or shareholder of Borrower, has made or received,

or is making or receiving in connection with the Loan, (1) a transfer of an interest of its property to or for the benefit of a creditor of such party that is or could constitute a voidable preference under federal bankruptcy, state insolvency, or similar applicable creditors’ rights laws, or (2) a transfer (including any transfer to or for the benefit of an insider under an employment contract) within two years of the date hereof that is or could constitute a fraudulent transfer under federal bankruptcy, state insolvency, or similar applicable creditors’ rights laws.

(r) Investment Company Act. Neither Borrower nor any Guarantor is (1) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (2) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (3) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

(s) Access/Utilities. The Property has adequate rights of access to public ways and is served by adequate water, sewer, sanitary sewer and storm drain facilities. All public utilities necessary to the continued use and enjoyment of the Property as presently used and enjoyed are located in the public right-of-way abutting the Property, or enter the Property via permanent easements not subject to termination except with the consent of Borrower, and all such utilities are connected so as to serve the Property without passing over other property. All roads, and access to such roads, necessary for the full utilization of the Property for its current purpose have been completed and dedicated to public use and accepted by all governmental authorities or are the subject of access easements for the benefit of the Property without any further condition or cost to Borrower.

(t) Taxes Paid. Borrower has filed all federal, state, county and municipal tax returns required to have been filed by Borrower, and has paid all taxes which have become due pursuant to such returns or to any notice of assessment received by Borrower, and Borrower has no knowledge of any basis for additional assessment with respect to such taxes. Further, the Property is free from delinquent Taxes and Other Charges.

(u) Single Tax Lot. The Real Estate consists of a single lot or multiple tax lots; no portion of said tax lot(s) covers property other than the Real Estate or a portion of the Real Estate and no portion of the Real Estate lies in any other tax lot.

(v) Special Assessments. Except as disclosed in the Title Insurance Policy, there are no pending or, to the knowledge of Borrower, proposed special or other assessments for public improvements or otherwise affecting the Property, nor, to the knowledge of Borrower, are there any contemplated improvements to the Property that may result in such special or other assessments.

(w) Flood Zone. The Property is not located in an area as identified by the Federal Emergency Management Agency as an area having special flood hazards or, if so located, the flood insurance required pursuant to Section 4.4 is in full force and effect with respect to the Property.

(x) Seismic Exposure. The Real Estate is not located in Zone 3 or Zone 4 of the “Seismic Zone Map of the U.S.”

(y) Misstatements of Fact. No certification, representation or statement of fact made in the Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. There is no fact presently known to Borrower, any Guarantor or any Constituent Entity of Borrower or any Guarantor which has not been disclosed which adversely affects, or in the judgment of a reasonable person might adversely affect,

the business, operations or condition (financial or otherwise) of the representing party. Further, and in clarification of the foregoing, all reports, certificates, affidavits, representations, statements and other data furnished by or on behalf of Borrower, Guarantor and each Constituent Entity of each of them to Lender, or their respective agents, in connection with the Loan are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not misleading.

(z) Condition of Improvements. The Property has not been damaged by fire, water, wind or other cause of loss since the earlier to occur of the initial visit to or inspection of the Property by Lender or its agents in connection with the Loan. The Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto. All major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition.

(aa) No Insolvency or Judgment. Neither Borrower, nor any Guarantor, nor any Constituent Entity of Borrower or any Guarantor, (i) has been or is currently the subject of or a party to any completed or pending bankruptcy, reorganization or insolvency proceeding; or (ii) is currently the subject of any judgment unsatisfied of record or docketed in any court of the state in which the Property is located or in any other court located in the United States. The proposed Loan will not render Borrower or any general partner or member of Borrower insolvent. As used in this Agreement, the term “insolvent” means that the sum total of all of an entity’s liabilities (whether secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of all such entity’s non-exempt assets, i.e., all of the assets of the entity that are available to satisfy claims of creditors.

(bb) No Condemnation. No part of the Property has been taken in condemnation or other like proceeding to an extent which would impair the value of the Property, this Agreement, the Mortgage or the Loan or the usefulness of such property for the purposes contemplated by the Loan Documents, nor is any proceeding pending, threatened or known to be contemplated for the partial or total condemnation or taking of the Property.

(cc) No Labor or Materialmen Claims. All parties furnishing labor and materials to Borrower (or any predecessor-in-title) or the Property have been paid in full and, except for such liens or claims expressly disclosed in, and insured against by the Title Insurance Policy, there are no mechanics’, laborers’ or materialmen’s liens or claims outstanding for work, labor or materials affecting the Property, whether prior to, equal with or subordinate to the lien of the Mortgage.

(dd) No Purchase Options. No tenant, party, firm, corporation or other Person has an option, right of first offer, or right of first refusal, to purchase the Property, any portion thereof or any interest therein.

(ee) Leases. Attached hereto as Exhibit B is a true, correct and complete Rent Roll as of the date hereof. The Property is not subject to any Leases or other agreements related to the leasing or renting of the Property or any portion thereof, except as set forth on the Rent Roll. No person has any possessory interest in the Property or right to occupy the same, except pursuant to the Leases. Borrower hereby represents that: (i) Borrower has delivered a Rent Roll that is true, correct and complete as of the date hereof; and (ii) Borrower is the owner and holder of the landlord’s interest under the Leases, and there are no prior assignments of all or any portion of the Leases or any portion of the Rents and Profits which are presently outstanding and have priority over the assignment of leases and rents given by Borrower to Lender in the Mortgage or the Assignment of Leases; and (iii) each Lease constitutes the legal, valid and binding obligation of Borrower and, to the best of Borrower’s knowledge and belief, is

enforceable against the Tenant thereunder; and (iv) no default exists, or with the passing of time or the giving of notice or both would exist, under any Lease which would, in the aggregate, have a material adverse effect on Borrower or the Property; and (v) except as disclosed in writing in an estoppel certificate by such Tenant that has been delivered to and accepted by Lender in connection with the Loan, no Tenant has any offset or defense to the payment of rent under its Lease; and (vi) except as disclosed in writing in an estoppel certificate by such Tenant that has been delivered to and accepted by Lender in connection with the Loan, no Tenant has, as of the date hereof, paid rent under its Lease more than one (1) month in advance, and the rents under such Lease have not been waived, released, or otherwise discharged or compromised; and (vii) all work to be performed by Borrower under each Lease has been substantially performed, all contributions to be made by Borrower to the Tenant thereunder have been made and all other conditions precedent to each Tenant’s obligations thereunder have been satisfied; and (viii) except as disclosed in writing in an estoppel certificate by such Tenant that has been delivered to and accepted by Lender in connection with the Loan, each Tenant under a Lease has entered into occupancy of the premises demised thereunder; and (ix) Borrower has delivered to Lender true, correct and complete copies of all Leases described in the Rent Roll; and (x) to the best of Borrower’s knowledge and belief, each Tenant is free from bankruptcy, reorganization or arrangement proceedings or a general assignment for the benefit of creditors; and (xi) no Lease provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of the Mortgage.

(ff) Appraisal. All information provided by or on behalf of Borrower to the appraiser in connection with the appraisal of the property prepared in connection with the closing of the Loan was true, correct and complete in all material respects.

(gg) Boundary Lines. All of the Improvements which were included in determining the appraised value of the Property lie wholly within the boundaries and building restriction lines of the Property, and except as specifically described in the Title Insurance Policy, no improvements on adjoining properties encroach upon the Property, and no easements or other encumbrances upon the Real Estate encroach upon any of the Improvements, in each case so as to affect the value or marketability of the Property except those which are insured against by title insurance.

(hh) Survey. The survey of the Property delivered to Lender in connection with this Agreement does not fail to reflect any material matter affecting the Property or the title thereto. To the best of Borrower’s knowledge, such survey has been prepared by a duly licensed surveyor in the State in which the Real Estate is located.

(ii) Forfeiture. There has not been and shall never be committed by Borrower or any other person in occupancy of or involved with the operation or use of the Property any act or omission affording the federal government or any state or local government the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents.

(jj) No Broker. No financial advisors, brokers, underwriters, placement agents, agents or finders have been dealt with by Borrower in connection with the Loan, except for any broker whose full commission was paid out of the proceeds of the Loan and is set forth on the Closing Statement.

(kk) Conviction of Criminal Acts. Each of Borrower, any Guarantor, and any Constituent Entity of Borrower or any Guarantor, has never been convicted of a crime (which shall not include traffic violations) and is not currently the subject of any pending or threatened criminal investigation or proceeding. Borrower has disclosed to Lender in writing any civil action (whether or not such action resulted in a judgment) and regulatory or enforcement proceeding to which Borrower and any

Guarantor was a defendant or respondent within the 20-year period prior to the date of this Agreement that (i) was a Bankruptcy Action, or (ii) in which it was alleged that Borrower or such Guarantor engaged in fraud, deception or misrepresentation, or with respect to which Borrower or any Guarantor was ordered or agreed not to engage in the banking or securities industry.

(ll) Security Agreements. There are no security agreements or financing statements affecting or encumbering any of the Property other than the security agreements and financing statements created in favor of Lender.

(mm) Homestead. The Property forms no part of any property owned, used or claimed by Borrower as a residence or business homestead and is not exempt from forced sale under the laws of the State in which the Real Estate is located. Borrower hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead.

(nn) Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws. None of Borrower, Guarantor, any Controlling Entity, or any Person who owns any direct equity interest in or controls any of the foregoing, is or has previously been (i) identified on the OFAC List or otherwise qualified as a Prohibited Person, or (ii) in violation of any applicable laws relating to anti-money laundering or anti-terrorism, including, without limitation, any applicable laws related to transacting business with Prohibited Persons or the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder, including temporary regulations, all as amended from time to time, or (iii) in violation of other requirements of Governmental Authority (including, without limitation, requirements applicable to Lender of which Borrower has notice) with respect to anti-money laundering, “know your customer” regulations, and similar matters. Borrower will implement procedures, approved by Borrower’s Controlling Entity, to ensure that no Equity Holder (and no Person who, after the date hereof, becomes an Equity Holder) causes the foregoing representations not to be true, correct and complete.

(oo) Personal Property. Borrower is the owner, free and clear of all liens and encumbrances, of all personal property that is used in, and is reasonably necessary to, the operation of the Property.

(pp) Use of Proceeds. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System, or to reduce ore retire any obligation originally incurred to purchase any margin stock, or for any other purpose which would be inconsistent with such Regulations T, U or X or any other Regulations of such Board of Governors, or for any purposes prohibited by any Applicable Laws or by the terms and conditions of this Agreement or any other Loan Document. Borrower does not own any margin stock (as so defined).

(qq) Intentionally Omitted.

(rr) Ground Lease.

(1) The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease (either by itself or together with the Ground Lessor’s Recognition Agreement) permits the interest of Borrower to be encumbered, including, without limitation, by the Mortgage. The Ground Lease does not restrict the use of the Property in a manner that would materially adversely affect the security provided by the Mortgage and other Loan Documents;

(2) The Ground Lease (either itself or together with the Ground Lessor’s Recognition Agreement) provides that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of Ground Lessor and Borrower, or surrendered by Borrower, in each case without the prior written consent of Lender;

(3) The term of the Ground Lease as currently in effect expires on June 9, 2023. The Ground Lease provides for renewal term that is automatically coterminous without further requirements with any extensions and/or renewals of the United Healthcare Lease.

(4) The priority of the Ground Lease with respect to fee title to the Real Estate is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the Ground Lessor and the Permitted Encumbrances. The lien of any mortgage hereafter placed on the fee title to the Real Estate is and will be subject and subordinate to the Ground Lease and to any Replacement Ground Lease;

(5) [Intentionally Omitted];

(6) The Ground Lease is in full force and effect. There is no default under the Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a default under the Ground Lease. The Ground Lease represents the entire agreement between the parties thereto and their respective Affiliates with respect to the Real Estate and the Improvements;

(7) The Ground Lease (either by themselves or together with the Ground Lessor’s Recognition Agreement) requires the Ground Lessor to give to Lender written notice of any default under the Ground Lease, and provides that no notice of default or termination is effective against Lender unless such notice is given to Lender;

(8) Pursuant to the Ground Lessor’s Recognition Agreement, Lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of Borrower under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after Lender’s receipt of notice of any such default, before Ground Lessor may terminate the Ground Lease. Provided that no monetary default remains uncured beyond any applicable notice and grace periods to which Borrower and Lender are entitled, the Ground Lease may not be terminated by Ground Lessor by reason of any default by Borrower which is not susceptible of cure by Lender without Ground Lessor being obligated to offer a Replacement Ground Lease to Lender;

(9) The Ground Lease does not impose any restrictions on subletting of the Property that are commercially unreasonable;

(10) [Intentionally Omitted];

(11) In the event of a casualty, the terms and conditions of the Loan Documents shall prevail. The foregoing shall not apply with respect to any condemnation, it being understood and agreed that per the terms of the Ground Lease, Ground Landlord shall be entitled to all proceeds from any condemnation;

(12) Provided that Lender cures any defaults under the Ground Lease that are susceptible of being cured, Ground Lessor has agreed to enter into a new lease(s) (such new lease, a “Replacement Ground Lease”) with Lender (or Lender’s designee), for the remainder of the term of such Ground Lease upon the same base rent and additional rent and other terms, covenants, conditions and agreements as are contained in the Ground Lease, upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding involving Borrower;

(13) Borrower does not make any type of escrow deposits with Ground Lessor and Ground Lessor does not hold any type of deposit from Borrower (security or otherwise).

4.2 Defense of Title. If the title to the Property or the interest of Lender therein shall be the subject, directly or indirectly, of any action at law or in equity, or be attached directly or indirectly, or endangered, clouded or adversely affected in any manner, Borrower, at Borrower’s expense, shall take all necessary and proper steps for the defense of said title or interest, including the employment of counsel approved by Lender (it being agreed that Lender shall not unreasonably withhold its consent to counsel appointed pursuant to the Title Insurance Policy for such purposes), the prosecution or defense of litigation, and the compromise or discharge of claims made against said title or interest. Notwithstanding the foregoing, in the event that Lender determines that Borrower is not adequately performing its obligations under this Section 4.2, Lender may, without limiting or waiving any other rights or remedies of Lender hereunder, take such steps with respect thereto as Lender shall deem necessary or proper; any and all costs and expenses incurred by Lender in connection therewith, together with interest thereon at the Default Rate, shall be immediately paid by Borrower on demand.

4.3 Performance of Obligations. Borrower shall pay when due the principal of and the interest on and other amounts evidenced by the Note. Borrower shall also pay and perform all of the Debt as and when due. Further, Borrower shall promptly and strictly perform and comply with all covenants, conditions, obligations and prohibitions required of Borrower in connection with any other document or instrument affecting title to the Property, or any part thereof, regardless of whether such document or instrument is superior or subordinate to the Mortgage, except as expressly prohibited by the Loan Documents.

4.4 Insurance. Borrower shall, at Borrower’s expense, maintain in force and effect on the Property at all times the following insurance (or such greater insurance as may be required under the Ground Lease):

(a) Insurance against loss or damage to the Property by fire, windstorm, tornado and hail and against loss and damage by such other, further and additional risks as may be now or hereafter embraced by an “all-risk/special” form of insurance policy. The amount of such insurance shall be not less than one hundred percent (100%) of the full replacement (insurable) cost of the Improvements from time to time, without reduction for depreciation. The determination of the replacement cost amount shall be adjusted annually to comply with the requirements of the insurer issuing such coverage or, at Lender’s election, by reference to such indices, appraisals or information as Lender determines in its reasonable discretion. Full replacement cost, as used herein, means, with respect to the Improvements, the cost of replacing the Improvements without regard to deduction for depreciation, exclusive of the cost of excavations, foundations and footings below the lowest basement floor, and means, with respect to such furniture, furnishings, fixtures, equipment and other items, the cost of replacing the same, in each case, with inflation guard coverage to reflect the effect of inflation, or annual valuation. Each policy or policies shall contain a replacement cost endorsement and either an agreed amount endorsement (to avoid the operation of any co-insurance provisions) or a waiver of any co-insurance provisions, all subject to Lender’s approval. In the event that the Real Estate or the Improvements constitutes a legal

non-conforming use under applicable building, zoning or land use laws or ordinances, shall include ordinance or law coverage which will contain Coverage A: “Loss to Operation of Law” (with a minimum liability limit approved by Lender), Coverage B: “Demolition Cost” and Coverage C: “Increased Cost of Construction” coverages (each with sublimits reasonably approved by Lender). The deductible with respect to such insurance shall not exceed $25,000.00 per occurrence, except for wind/hail coverage which is permitted to have up to a $100,000 deductible.

(b) Comprehensive Commercial General Liability Insurance written on an occurrence basis for personal injury, bodily injury, death and property damage liability in amounts not less than $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate, with no deductible or self insured retention together with umbrella coverage in amounts not less than $50,000,000.00. If the aggregate limit applying to the Premises is reduced by the payment of a claim or establishment of a reserve equal to or greater than fifty percent (50%) of the annual aggregate, Borrower shall immediately arrange to have the aggregate limit restored by endorsement to the existing policy or the purchase of an additional insurance policy unless, in Lender’s reasonable judgment, Borrower maintains sufficient concurrent excess liability insurance to satisfy the liability requirements of this Loan Document without the reinstatement of the aggregate limit. This insurance shall be primary and non-contributory and the additional insureds required will be added to both the CGL and Umbrella policies. During any construction on the Property, Borrower’s general contractor for such construction shall also provide the insurance required in this Subsection (b). Lender hereby retains the right to periodically review the amount of said liability insurance being maintained by Borrower and to require an increase in the amount of said liability insurance should Lender deem an increase to be reasonably prudent under then existing circumstances.

(c) General boiler and machinery insurance coverage is required if the property contains centralized equipment, steam boilers or other pressure-fired vessels in operation at the Property. Minimum liability amount per accident must equal the lesser of the replacement (insurable) value of the Improvements housing such equipment, boiler or pressure-fired machinery or such lesser amount as approved by Lender in their discretion. The deductible with respect to such insurance shall not exceed $10,000.00 per claim.

(d) If the Improvements on the Property or any part thereof is identified by the Secretary of Housing and Urban Development as being situated in an area now or subsequently designated as having special flood hazards (including, without limitation, those areas designated as Zone A or Zone V), flood insurance in an amount equal to the lesser of: (i) the minimum amount required, under the terms of coverage, to compensate for any damage or loss on a replacement basis (or the unpaid balance of the Debt if replacement cost coverage is not available for the type of building insured); or (ii) such lesser amount as may be required by Lender. The deductible with respect to such insurance shall not exceed $5,000.00 per occurrence for residential properties and $10,000 for commercial properties.

(e) During the period of any construction on the Property or renovation or alteration of the Improvements, a so-called “Builder’s All-Risk Completed Value” insurance policy for any Improvements under construction, renovation or alteration in an amount approved by Lender consistent with Section 4.1(a) above and Worker’s Compensation Insurance covering all persons engaged in such construction, renovation or alteration. The deductible for such insurance, if any, shall be satisfactory to Lender.

(f) Loss of rents or loss of business income insurance which covers a period of not less than eighteen (18) months), together with an extended period of indemnity of not less than 180 days, and covers the actual loss sustained during restoration. The amount of such rental loss and/or business interruption insurance shall be increased from time to time while the Loan remains outstanding as and

when new Leases and renewal Leases are entered into and the Rents and Profits increase or the estimate of (or the actual) operating expenses for the Property, as may be applicable, increases. The deductible for such insurance, if any, shall be satisfactory to Lender.

(g) Any other insurance coverage (or higher coverages) running to the benefit of, or required by, Lender in connection with the making of the Loan and as set forth on the insurance certificates or policies delivered to and accepted by Lender in connection with the closing of the Loan.

(h) The property insurance, public liability insurance and rental loss and/or business interruption insurance required under Sections 4.4(a), (b) and (f) above shall cover perils of terrorism and acts of terrorism and Borrower shall maintain property insurance, public liability insurance and rental loss and/or business interruption insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required under Sections 4.4(a), (b) and (f) above at all times during the term of the Loan, and such other insurance (see section (i)).

(i) Such other insurance on the Property or on any replacements or substitutions thereof or additions thereto as may from time to time be required by Lender against other insurable hazards or casualties which at the time are commonly insured against in the case of property similarly situated to the Property including, without limitation, Sinkhole, Mine Subsidence, Earthquake and Environmental insurance, due regard being given to the height and type of buildings, their construction, location, use and occupancy.

Unless otherwise approved by lender in writing in advance of placement, all such insurance shall (i) be with insurers authorized to do business in the State within which the Real Estate is located and who have and maintain a rating satisfying the Insurance Ratings Requirement (or, alternatively, if the insurers maintain re-insurance with re-insurers maintaining such rating, Lender will not unreasonably withhold its consent to satisfying the Insurance Ratings Requirement by means of a “cut-through” endorsement allowing recourse directly against a reinsurer that meets the Insurance Rating Requirement), (ii) contain the complete address of the Property (or a complete legal description), (iii) be for terms of at least one year, and (iv) be subject to the approval of Lender as to insurance companies, amounts, content, forms of policies, method by which premiums are paid and expiration dates.

Borrower shall as of the date hereof deliver to Lender evidence that said insurance policies have been paid current as of the date hereof and certified copies of such insurance policies and original certificates of insurance signed by an authorized agent of the applicable insurance companies evidencing such insurance, all of which shall be satisfactory to Lender. Without limiting the foregoing, all certificates of insurance for the liability insurance referenced in (b) above shall be on the ACORD 25 Form, and all certificates of insurance for other coverages shall be on either the ACORD 27 form or the March, 1993 edition of the ACORD 28 form (unless Lender expressly approves another form). Borrower shall renew all such insurance and deliver to Lender certificates evidencing such renewals at least fifteen (15) days before any such insurance shall expire. Without limiting the required endorsements to the insurance policies, Borrower further agrees that all such policies shall include a standard, non-contributory, mortgagee clause naming:

CIBC INC.,

its successors and/or assigns, as their interests may appear

Attn: Real Estate Group, Mr. Karin O’Callahan

425 Lexington Avenue, 4^th Floor

New York, New York 10017

(x) as an additional insured under all liability insurance policies, (y) as the first mortgagee on all property insurance policies and (z) as the loss payee/lender’s loss payable on all business personal property, loss of rents and/or loss of business income insurance policies as applicable. Borrower further agrees that all such insurance policies: (1) shall provide for at least thirty (30) days’ prior written notice to Lender prior to any cancellation or termination thereof (10 days for nonpayment of premium as statutorily required) on the property insurance and when available, on the liability insurance policies (provided, however, that if such notice provisions are not available in any of the Policies, Borrower shall provide the required notice to Lender); (2) shall contain an endorsement or agreement by the insurer that any loss shall be payable to Lender in accordance with the terms of such policy notwithstanding any act or negligence of Borrower which might otherwise result in forfeiture of such insurance; (3) shall waive all rights of subrogation against Lender; and (4) may be in the form of a blanket policy provided that, in the event that any such coverage is provided in the form of a blanket policy, Borrower hereby acknowledges and agrees that failure to pay any portion of the premium therefor which is not allocable to the Property or by any other action not relating to the Property which would otherwise permit the issuer thereof to cancel the coverage thereof, will result in Lender requiring the Property to be insured by a separate, single-property policy. The blanket policy must properly identify and fully protect the Property as if a separate policy were issued for 100% of Replacement Cost at the time of loss and otherwise meet all of Lender’s applicable insurance requirements set forth in this Section 4.4. Lender will be provided a complete schedule of locations and values for all properties associated with a blanket policy. The delivery to Lender of the insurance policies or the certificates of insurance as provided above shall constitute an assignment of all proceeds payable under such insurance policies relating to the Property by Borrower to Lender as further security for the Debt. In the event of foreclosure of the Mortgage, or other transfer of title to the Property in extinguishment in whole or in part of the Debt, all right, title and interest of Borrower in and to all unearned insurance premiums and proceeds payable under such policies then in force concerning the Property shall thereupon vest in the purchaser at such foreclosure, or in Lender or other transferee in the event of such other transfer of title whether or not the damage to the Property occurred prior to such transfer of title. Approval of any insurance by Lender shall not be a representation of the solvency of any insurer or the sufficiency of any amount of insurance. In the event Borrower fails to provide, maintain, keep in force or deliver and furnish to Lender the policies of insurance required by this Agreement or evidence of their renewal as required herein, Lender may, but shall not be obligated to, procure such insurance and Borrower shall pay all amounts advanced by Lender therefor, together with interest thereon at the Default Rate from and after the date advanced by Lender until actually repaid by Borrower, promptly upon demand by Lender. Lender shall not be responsible for nor incur any liability for the insolvency of the insurer or other failure of the insurer to perform, even though Lender has caused the insurance to be placed with the insurer after failure of Borrower to furnish such insurance. Borrower shall not obtain insurance for the Property in addition to that required by Lender without the prior written consent of Lender, which consent will not be unreasonably withheld provided that (i) Lender is mortgagee, loss payee/lender’s loss payable and/or additional insured (as applicable) on such insurance, (ii) Lender receives complete copies of all policies evidencing such insurance, and (iii) such insurance complies with all of the applicable requirements set forth herein. To the extent that at any time Lender agrees to accept insurance from an insurer that is rated less than the foregoing, Lender may terminate its waiver and reassert the aforesaid minimum rating requirements upon any renewal of any insurance coverage, or at any time if the rating of any insurer is reduced or Lender determines that any other material adverse event has occurred with respect to the financial condition of such insurer.

4.5 Payment of Taxes. Except to the extent funds are held in the Impound Account therefor pursuant to Section 4.6 of this Agreement when the same become due and payable, (a) Borrower shall pay or cause to be paid all taxes, assessments, water rents, sewer rents, governmental impositions and other charges, including, without limitation, vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Real Estate, now or hereafter levied or assessed or imposed against, or which are or may become a lien upon, the Property (“Taxes”), and all ground rents, maintenance charges and

similar charges, now or hereafter levied or assessed or imposed against the Property or any part thereof (the “Other Charges”), and (b) Borrower shall furnish Lender with receipts (or if receipts are not immediately available, with copies of canceled checks evidencing payment with receipts to follow promptly after they become available) showing payment of such Taxes and Other Charges at least fifteen (15) days prior to the applicable delinquency date therefor. In no event shall any PACE Loan be considered a Tax or Other Charge for purposes of this Agreement. Notwithstanding the foregoing, Borrower may in good faith, by appropriate proceedings and upon notice to Lender, contest the validity, applicability or amount of any asserted Taxes or Other Charges so long as (x) such contest is diligently pursued, (y) Lender determines, in its subjective opinion, that such contest suspends the obligation to pay the Taxes or Other Charges and that nonpayment of such Taxes or Other Charges will not result in the sale, loss, forfeiture or diminution of the Property or any part thereof or any interest of Lender therein, and (z) prior to the earlier of the commencement of such contest or the delinquency date of the asserted Taxes or Other Charges, Borrower deposits in the Impound Account an amount determined by Lender to be adequate to cover the payment of such Taxes or Other Charges and a reasonable additional sum to cover possible interest, costs and penalties; provided, however, that Borrower shall promptly cause to be paid any amount adjudged by a court of competent jurisdiction to be due, with all interest, costs and penalties thereon, promptly after such judgment becomes final; and provided, further, that in any event each such contest shall be concluded, the Taxes or Other Charges, as the case may be, together with any applicable interest, costs and penalties, shall be paid prior to the date any writ or order is issued under which the Property may be sold, lost or forfeited.

4.6 Tax and Insurance Impound Account. Borrower shall establish and maintain in effect with Lender at all times while the Loan is outstanding an impound account (the “Impound Account”) for payment of Taxes and Other Charges and for the premiums on the insurance required to be maintained with respect to Borrower and the Property (“Insurance Premiums”) and as additional security for the Debt. In addition to the initial deposit to the Impound Account required simultaneously with the execution hereof, commencing on the first Payment Date and continuing thereafter on each Payment Date until the Note and all other Debt are fully paid and performed, Borrower shall pay to Lender, for deposit to the Impound Account, an amount equal to one-twelfth (1/12^th) of the amount of the annual Taxes and Other Charges that will next become due and payable on the Property, plus one-twelfth (1/12^th) of the amount of the annual Insurance Premiums that will next become due and payable, each as estimated and determined by Lender. So long as no Default has occurred and is continuing, all sums in the Impound Account shall be held by Lender in the Impound Account to pay said Taxes and Other Charges, in periodic installments, and Insurance Premiums in one annual installment, in each case, before the same become delinquent. Borrower shall be responsible for ensuring the receipt by Lender, at least thirty (30) days prior to the respective due date for payment thereof, of all bills, invoices and statements for all Taxes and Other Charges, and all Insurance Premiums, and so long as no Event of Default has occurred and is continuing, Lender shall pay the Governmental Authority or other party entitled thereto directly to the extent funds are available for such purpose in the Impound Account. In making any payment from the Impound Account, Lender shall be entitled to rely on any bill, statement or estimate procured from the appropriate public office or insurance company or agent without any inquiry into the accuracy of such bill, statement or estimate and without any inquiry into the accuracy, validity, enforceability or contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or title or claim thereof. The Impound Account shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Lender’s option and in Lender’s discretion, may either be held in a separate account or be commingled by Lender with the general funds of Lender. No interest on the funds contained in the Impound Account shall be paid by Lender to Borrower. The Impound Account is solely for the protection of Lender and entails no responsibility on Lender’s part beyond the payment of Taxes and Other Charges, and of Insurance Premiums, following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Agreement by Lender, any funds in the Impound Account shall be turned over to

the assignee and any responsibility of Lender, as assignor, with respect thereto shall terminate. If the total funds in the Impound Account are reasonably determined by Lender to be in excess of the amount of payments required by Lender for the purposes of the Impound Account, such excess may be credited by Lender on subsequent payments to be made hereunder or, if such excess is greater than the amounts due from Borrower to Lender in the month following such determination (and if no Default or Event of Default is then continuing), refunded to Borrower. If at any time Lender determines that, with the making of all monthly deposits to the Impound Account when due, the Impound Account nonetheless would not contain sufficient funds to pay the next due periodic installments of all Taxes and Other Charges at least 30 days prior to the delinquency date thereof, or to pay the next due annual Insurance Premiums at least 30 days prior to the due date thereof, Borrower shall, within ten (10) days after receipt of written notice thereof, deposit with Lender the full amount of any such deficiency. If Borrower shall fail to deposit with Lender the full amount of such deficiency as provided above, Lender shall have the option, but not the obligation, to make such deposit and all amounts so deposited by Lender, together with interest thereon at the Default Rate from the date incurred by Lender until actually paid by Borrower, shall be immediately paid by Borrower on demand. At any time during the continuance of an Event of Default, Lender may, but shall not be obligated to, apply at any time the balance then remaining in the Impound Account against the Debt in whatever order Lender shall subjectively determine. No such application of the Impound Account shall be deemed to cure any Default or Event of Default hereunder, and any such application shall not limit Borrower’s obligation to deposit any deficiency of which Lender gives notice. Upon full payment of the Debt in accordance with its terms or at such earlier time as Lender may elect, the balance of the Impound Account then in Lender’s possession shall be paid over to Borrower and no other party shall have any right or claim thereto.

4.7 Condemnation and Casualty. Borrower shall give Lender prompt written notice of the occurrence of any casualty affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Default or Event of Default is continuing, Lender shall not participate in the adjustment of any loss which is less than the lesser of (a) ten percent (10%) of the then outstanding principal balance of the Note and (b) $500,000.00. Lender may, at Lender’s option, (i) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its original condition or to such other condition as may be approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to such other condition as may be approved by Lender, or (ii) apply the balance of such proceeds to the payment of the Debt, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Debt if all of the following conditions are met: (A) no Default or Event of Default has occurred and is continuing; (B) in the case of casualty, less than forty percent (40%) of the Improvements has been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements has been taken; (C) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the

Restoration or promptly upon Lender’s determination that such a shortfall exists); (D) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to Reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio after Restoration will be the same as on the Closing Date and the ratio of the amount of the Loan to the value of the Property after Restoration will be the same as on the Closing Date; (E) Lender determines, in its discretion, that (1) the Restoration will be completed before the earlier of (a) one year before the Scheduled Maturity Date or (b) one year after the date of the loss or casualty, and (2) the rent loss insurance or business interruption insurance referenced in Section 4.4(f) will cover all payments due under the Loan during the completion of the Restoration; (F) the Ground Lease shall remain in full force and effect during the completion of the Restoration; (G) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 4.4; and (H) Borrower provides Lender with written notice within five (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration.

Unless Lender otherwise agrees in writing, any application of any insurance or condemnation awards or proceeds to the Debt shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any insurance or condemnation awards or proceeds as Lender may require. Any reduction in the Debt resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Debt and, in any event, the unpaid portion of the Debt shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final principal payment due under the Note and thereafter to other principal installments due under the Note in the inverse order of their due date. If Borrower elects to effect or is otherwise required to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided that Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Debt is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this Section 4.7, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.

Notwithstanding the foregoing provisions of this Section 4.7, if (I) Lender is a REMIC at the time when any portion of the Property is the subject of a taking, condemnation, eminent domain or similar proceeding, and (II) immediately after giving effect to the related release (and taking into account any proposed Restoration), the loan-to-value ratio (based solely on the value of real property, and excluding any personal property and/or going concern value, if any) shall be greater than one hundred twenty-five percent (125%), then an amount equal to the entire net proceeds (as defined in Revenue Procedure 2010-30) of the taking, condemnation, eminent domain or similar proceeding must be applied

to the principal amount of the Debt (rather than to any other portion of the Debt) if and to the extent necessary for the Loan to remain a “qualified mortgage” in accordance with the requirements applicable to a REMIC under Revenue Procedure 2010-30.

4.8 Mechanics’ Liens. Borrower shall pay when due all claims and demands of mechanics, materialmen, laborers and others for any work performed or materials delivered for the Real Estate or Improvements; provided, however, that, Borrower shall have the right to contest in good faith any such claim or demand, so long as it does so diligently, by appropriate proceedings and without prejudice to Lender, and provided that neither the Property nor any interest therein would be in any danger of sale, loss or forfeiture as a result of such proceeding or contest. In the event Borrower shall contest any such claim or demand, Borrower shall promptly notify Lender of such contest and thereafter shall, upon Lender’s request, promptly provide a bond, cash deposit or other security satisfactory to Lender to protect Lender’s interest and security should the contest be unsuccessful. If Borrower shall fail to immediately discharge or provide security against any such claim or demand as aforesaid, Lender may do so and any and all expenses incurred by Lender, together with interest thereon at the Default Rate from the date incurred by Lender until actually paid by Borrower, shall be immediately paid by Borrower on demand.

4.9 Assignment of Leases and Rents and Profits. As additional and collateral security for the payment of the Debt and cumulative of any and all rights and remedies herein provided for, pursuant to the Mortgage and the Assignment of Leases the Borrower has assigned to Lender all existing and future Leases, and all existing and future Rents and Profits.

4.10 Leases.

(a) Entering Into Leases. Borrower may enter into a proposed Lease (which includes the renewal or extension of an existing Lease (a “Renewal Lease”)) without the prior written consent of Lender (except if required pursuant to Section 4.10(d) hereof) if such proposed Lease (i) provides for rental rates and terms comparable to existing local market rates and terms (taking into account the type and quality of the tenant) as of the date such Lease is executed by Borrower (unless, in the case of a Renewal Lease, the rent payable during such renewal, or a formula or other method to compute such rent, is provided for in the original Lease), (ii) is an arms-length transaction with a bona fide, independent third party tenant for occupancy by the lessee under such Lease, (iii) does not have a materially adverse effect on the value of the Property taken as a whole, (iv) is subject and subordinate to the Mortgage, and obligates the lessee thereunder to attorn to Lender, or any designee, upon transfer of title to the Property thereto, (v) does not contain any option or right of first refusal to purchase all or any portion of the Property, (vi) expressly provides that the portion of the Property demised thereby shall not be used for a Prohibited Use, and (vii) is written on the standard form of lease which was either delivered to Lender simultaneously herewith or was subsequently approved by Lender, in either case with only immaterial variations from such standard form. All proposed Leases which do not satisfy the requirements set forth in this Section 4.10(a) shall be subject to the prior approval of Lender and its counsel, at Borrower’s expense (and, in conjunction therewith, Borrower shall provide Lender with such information as Lender shall reasonably request with respect to such proposed Lease and the Tenant thereunder). Promptly upon entering into any Lease without Lender’s approval pursuant to this Section 4.10(a), Borrower shall promptly deliver to Lender a copy of such Lease, together with Borrower’s certification that such Lease satisfies all of the conditions of this Section 4.10. Upon Lender’s request, Borrower shall deliver to Lender a true, correct and complete copy of each Lease then in effect.

(b) Covenants Regarding Leases. Borrower (i) shall observe and perform all the obligations imposed upon the lessor under each Lease, and shall not do or permit to be done anything to impair the value of any Lease as security for the Debt; (ii) upon request (which request is hereby deemed given with respect to any Major Lease), shall promptly send copies to Lender of all notices of default

which Borrower shall send or receive thereunder; (iii) shall enforce all of the material terms, covenants and conditions contained in each Lease upon the part of the Tenant thereunder to be observed or performed; (iv) shall not collect any of the Rents and Profits more than one (1) month in advance (it being acknowledged that security deposits shall not be deemed Rents and Profits collected in advance); and (v) shall not execute any other assignment of the lessor’s interest in any of the Leases or the Rents and Profits (other than to Lender as security for the Debt), in each case without the prior written consent of Lender. Within 30 days after Lender’s request therefor (which request, other than a request for a Tenant estoppel certificate pursuant to Section 4.29 hereof, shall not be made more than twice in any calendar year absent an Event of Default), Borrower shall deliver to Lender an estoppel certificate from each Tenant.

(c) Amendments to Leases. Provided no Default exists hereunder, Borrower may, without the prior written consent of Lender (except if required pursuant to Section 4.10(d) hereof), amend, modify or waive the provisions of any Lease or terminate, reduce rents under, accept a surrender of space under, shorten the term of, consent to any assignment of, or consent to the subletting of any portion of the premises demised pursuant to any Lease (including any guaranty, letter of credit or other credit support with respect thereto) (any of the foregoing, a “Lease Modification”), provided that (i) such Lease Modification (taking into account, in the case of a termination, reduction in rent, surrender of space or shortening of term, the planned alternative use of the affected space) does not have a materially adverse effect on the value of the Property taken as a whole, (ii) such Lease Modification is in the normal course of business and is consistent with sound and customary leasing and management practices for similar properties in the community in which the Property is located, and (iii) such Lease, as amended, modified or waived, is otherwise in compliance with the requirements of this Agreement and any subordination agreement binding upon Lender with respect to such Lease. A termination of a Lease with a Tenant who is in default beyond applicable notice and grace periods shall not be considered an action which has a materially adverse effect on the value of the Property taken as a whole. Any Lease Modification which does not satisfy the requirements set forth in this Section 4.10(c) shall be subject to the prior approval of Lender and its counsel, at Borrower’s expense (and, in conjunction therewith, Borrower shall provide Lender with such information as Lender shall reasonably request with respect to such proposed Lease Modification and the Tenant under the Lease affected thereby). Promptly upon entering into any Lease Modification without Lender’s approval pursuant to this Section 4.10(c), Borrower shall deliver to Lender a copy of such instrument, together with Borrower’s certification that such instrument satisfies all of the conditions of this Section 4.10.

(d) Major Leases. Notwithstanding anything contained herein to the contrary, Borrower shall not, without the prior written consent of Lender, enter into, renew, extend, amend, modify, waive any provisions of, terminate, reduce rents under, accept a surrender of space under, shorten the term of, consent to any assignment of, or consent to the subletting of any portion of the premises demised pursuant to any Major Lease.

(e) Security Deposits. All security deposits of Tenants, whether held in cash or in any other form, shall be held in compliance with applicable law. All such security deposits shall not be commingled with any other funds of Borrower or any other Person. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under any applicable legal requirements (i) shall be maintained in full force and effect in the full amount of such deposits unless replaced by cash deposits as hereinabove described; (ii) shall be issued by an institution reasonably satisfactory to Lender; (iii) shall, if permitted pursuant to any applicable legal requirements, name Lender as payee or mortgagee thereunder or, at Lender’s option, be assigned or fully assignable to Lender; and (iv) shall, in all respects, comply with any applicable legal requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Upon an Event of Default, Borrower shall, immediately upon Lender’s request (if permitted by applicable law), deliver to Lender the security deposits (and any interest previously earned thereon and not disbursed to the person(s) lawfully entitled to receive same) with respect to all or any portion of the Property, to be held by Lender subject to the terms of the Leases.

(f) Tenant Financial Information. Borrower shall cause each Lease entered into on or after the date hereof which, if all Tenants paid all rents as and when due under their respective Leases, would yield one-quarter or more of the aggregate rental income of the Property (a “Major Income Lease”) to require the Tenant under such Lease to deliver to Borrower periodic operating statements with respect to (i) such Tenant’s operations at the Property, and (ii) the operations of such Tenant and, if applicable, any parent or affiliated entity of such Tenant which operates, or has subsidiaries that operate, comparable businesses (collectively, “Tenant Financial Information”). Notwithstanding the provisions of Section 4.10(a) above, any Major Income Lease entered into after the date hereof which does not require the Tenant to provide Tenant Financial Information upon request shall require the prior written approval of Lender. Borrower shall, from time to time promptly upon request of Lender, request Tenant Financial Information from the Tenant under each Major Income Lease (and use all commercially reasonable efforts to obtain such Tenant Financial Information), and promptly upon receipt thereof, deliver such Tenant Financial Information to Lender; provided, however, that (1) prior to a Secondary Market Transaction consisting of a securitization, Lender shall not require Borrower to request Tenant Financial Information more than three (3) times, and (2) following a Secondary Market Transaction consisting of a securitization, provided that no Event of Default is continuing, Lender shall not request such information without reasonable cause (which reasonable cause shall include, without limitation, the occurrence of any default by the Tenant under a Major Income Lease or if such Tenant ceases to conduct its business in the premises demised by such Major Income Lease).

4.11 Restrictions on Alienation and Further Encumbrances.

(a) Borrower acknowledges that Lender has relied upon the principals of Borrower and their experience in owning and operating properties similar to the Property in connection with the closing of the Loan. Accordingly, notwithstanding anything to the contrary contained in Section 8.6 hereof, neither the Property, nor any part thereof or interest therein, shall be sold, conveyed, disposed of, alienated, hypothecated, leased (except to Tenants under Leases which are not in violation of Section 4.10), assigned, pledged, mortgaged, further encumbered or otherwise transferred, nor shall Borrower be divested of its title to the Property or any interest therein, in any manner or way, whether voluntarily or involuntarily, nor shall Borrower enter into or subject the Property to any PACE Loan (any of the foregoing, a “Transfer”), in each case without the prior written consent of Lender being first obtained, which consent may be withheld in Lender’s sole discretion. For the avoidance of doubt and without limiting the generality of the foregoing, Borrower acknowledges and agrees that the forgoing sentence is intended by the parties to prevent Borrower from encumbering (other than in favor of lender pursuant to Section 4.31(f) hereof) any fee interest in any portion of the premises subject to the Ground Lease that may hereafter be acquired by Borrower without Lender’s prior written consent, which consent may be withheld in Lender’s sole discretion. For the purposes of this Agreement and the other Loan Documents, a Transfer shall also include (and each of the following shall also be prohibited without the prior written consent of Lender being first obtained in each case, which consent may be withheld in Lender’s sole discretion): (i) transfers of direct or indirect ownership interests in Borrower, and the creation of new or additional ownership interests in Borrower, or in any Constituent Entity of Borrower, (ii) an installment sales agreement with respect to the Property or any portion thereof, (iii) a Lease of all or substantially all of the Property other than for actual occupancy by a space tenant thereunder, (iv) any sale or assignment of any of Borrower’s right, title and interest in, to and under any Leases or Rents and Profits, other than to Lender, (v) if Borrower or any Constituent Entity of Borrower is a partnership or joint venture, the addition, change, removal or resignation of any general partner, or the transfer or pledge of any interest (whether as a general partner or limited partner) of any general partner in such partnership, and (vi) if Borrower or any Constituent Entity of Borrower is a limited liability company, the addition, change,

removal or resignation of any manager or managing member, or the transfer or pledge of any interest (whether as a managing member or otherwise) of such manager or managing member in such limited liability company, or the transfer of control (as defined in Section 4.27) of such manager or managing member.

(b) Notwithstanding the foregoing provisions of this Section, Lender shall not unreasonably withhold its consent to the sale of the Property in its entirety (hereinafter, “Sale”) to a single-purpose entity that complies with the requirements of Section 4.27 of this Agreement and is otherwise reasonably acceptable to Lender (such transferee, hereinafter, a “Buyer”) provided that such Sale occurs after the earlier to occur of a Secondary Market Transaction and the date that is two (2) years after the date of this Agreement, and each of the following terms and conditions are satisfied in connection with such Sale:

(1) No Event of Default is then continuing;

(2) Borrower gives Lender written notice of the terms of such prospective Sale not less than thirty (30) days before the date on which such Sale is scheduled to close, accompanied by all information concerning the proposed Buyer as Lender would require in evaluating an initial extension of credit to a borrower and a non-refundable application fee in the amount of $2,500.00. Lender shall have the right to approve or disapprove the proposed Buyer in its reasonable discretion (it being acknowledged that Lender may, as a condition to approving any proposed Buyer, require a Rating Confirmation with respect to such Sale and satisfaction of any conditions applicable thereto pursuant to the Securitization Documents), and such approval, if given, may be given subject to such conditions as Lender may deem appropriate;

(3) Borrower pays Lender, concurrently with the closing of such Sale, a non-refundable assumption fee in an amount equal to all out-of-pocket costs and expenses, including, without limitation, attorneys’ fees, incurred by Lender in connection with the Sale plus an amount equal to one half of one percent (0.5%) of the outstanding principal balance of the Note for the first Sale and thereafter an amount equal to one percent (1.0%) of the then outstanding principal balance of the Note;

(4) Buyer assumes and agrees to pay the Debt (subject to the provisions of Section 8.16 hereof) and, prior to or concurrently with the closing of such Sale, the Buyer executes, without any cost or expense to Lender, such documents and agreements as Lender shall reasonably require to evidence and effectuate said assumption (together with causing to be filed such new financing statements and/or financing statement amendments as Lender may require) and delivers such legal opinions as Lender may require, all in such reasonable and customary form as Lender may require;

(5) Borrower causes to be delivered to Lender, without any cost or expense to Lender, such endorsements to Lender’s title insurance policy, hazard insurance endorsements or certificates and other similar materials as are generally required for comparable transactions, all in form and substance satisfactory to Lender, including, without limitation, an endorsement or endorsements to Lender’s title insurance policy insuring the lien of the Mortgage, extending the effective date of such policy to the date of execution and delivery (or, if later, of recording) of the assumption agreement referenced above in subparagraph (4) of this Section, with no additional exceptions added to such policy and insuring that title to the Property is vested in the Buyer with no exceptions not included in the Title Insurance Policy or approved by Lender in accordance with this Agreement;

(6) Borrower and Guarantor each executes and delivers to Lender, without any cost or expense to Lender, a release of Lender, its officers, directors, employees and agents, from all claims and liability relating to the transactions evidenced by the Loan Documents through and including the date of the closing of the Sale, which agreement shall be in form and substance satisfactory to Lender and shall be binding upon the Buyer;

(7) Subject to the provisions of Section 8.16 hereof, such Sale is not construed so as to relieve Borrower of any personal liability under the Note or any of the other Loan Documents for any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Sale and Borrower executes, without any cost or expense to Lender, such documents and agreements as Lender shall reasonably require to evidence and effectuate the ratification of said personal liability. Borrower shall be released from and relieved of any personal liability under the Note or any of the other Loan Documents for any acts or events occurring or obligations arising after the closing of such Sale which are not caused by or arising out of any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Sale;

(8) Such Sale is not construed so as to relieve any Guarantor of its obligations under any Loan Document, and a Constituent Entity of the Buyer approved by Lender in its sole discretion (a “Successor Guarantor”) assumes the obligations of such Guarantor and executes such documents as may be required by Lender to evidence such assumption. Each Guarantor shall be released from and relieved of any of its obligations under any Loan Document for any acts or events occurring or obligations arising after the closing of such Sale which are not caused by or arising out of any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Sale;

(9) Buyer has furnished to Lender all appropriate instruments evidencing the Buyer’s capacity and good standing, and the authority of the signers to execute the assumption of the Loan Documents and the Debt, which papers shall include certified copies of all documents relating to the organization and formation of the Buyer and of the entities, if any, which are Constituent Entities of the Buyer, all of which shall be satisfactory to Lender and which, inter alia, shall satisfy the requirements of Section 4.27 hereof;

(10) Buyer shall assume the obligations of Borrower under any management agreements pertaining to the Property, or shall cause the new manager and management agreement to satisfy the requirements of Section 4.24 hereof;

(11) The Ground Lease shall have been assigned to and assumed by the Buyer, and the Ground Lessor has consented in writing thereto pursuant to the terms of the Ground Lease; and

(12) Buyer shall furnish an opinion of counsel satisfactory to Lender that the acquisition of the Property and the assumption of the Loan Documents and Debt by Buyer and, to the extent applicable, Successor Guarantor, was validly authorized, and duly executed and delivered, and constitutes the legal, valid and binding obligations of Buyer and Successor Guarantor, enforceable against each of them in accordance with their respective terms, and with respect to such other matters as Lender may reasonably require.

Upon the delivery of such assumption agreement by the Buyer, and the assumption by the Successor Guarantor of the obligations of the Guarantor, “Loan Documents” as used herein and in each Loan Document shall include such Loan Document as assumed by Buyer and/or Successor Guarantor, as applicable (together with such assumption agreements and any other instruments delivered to or for the benefit of Lender in connection with such Sale).

(c) The following Transfers shall be permitted upon satisfaction of the conditions noted in Section 4.11(d) below (such Transfers being referred to herein as “Permitted Transfers”):

(i) A Transfer which, when taken in the aggregate with all prior Transfers effected pursuant to this Section 4.11(c)(i), results in the Transfer of not more than forty-nine percent of the beneficial ownership interests in Borrower; provided that (A) no Event of Default shall then be existing and (B) Borrower continues (after such Transfer) to be Controlled by City Office REIT; or

(ii) A Transfer for estate planning purposes by any natural person who is a holder of beneficial ownership interests in Borrower, provided that such Transfer does not result in any change of Control of the interests Transferred; or

(iii) Any involuntary transfer caused by the death of a holder of any natural person who is a direct or indirect ownership interests in Borrower or in any Controlling Entity, in each case so long as (y) Borrower is reconstituted, if required, following any such death and (z) either (i) the Person in Control of Borrower and responsible for the management of the Property remains unchanged, or (ii) any substitute for such Person is approved by Lender; or

(iv) For so long as Borrower and Guarantor each is under the Control of City Office REIT, a Transfer (directly or indirectly) of limited partnership interests in Guarantor; and

(v) Transfers of ownership interests in City Office REIT resulting solely from the sale, transfer or issuance of shares of publicly traded common stock listed on the New York Stock Exchange or another nationally recognized stock exchange or marketplace in the United States of America and subject to the federal laws thereof.

(d) Each Permitted Transfer shall be subject to satisfaction of the following conditions precedent if applicable thereto:

(i) Other than with respect to Transfers as set forth in subsection (v) of Section 4.11(c) above, evidence reasonably satisfactory to Lender that, after giving effect to such Transfer, the representations set forth in Section 4.1(nn) shall continue to be true, correct and complete as to each Person that holds, in the aggregate, ten percent (10%) or more of the beneficial ownership interests of Borrower or Controls Borrower; and

(ii) If, as a result of any Permitted Transfer of the type described in subsection (i)-(iv) of Section 4.11(c) above, any Person owns, in the aggregate, twenty percent (20%) or more of the direct or indirect beneficial ownership interests of Borrower (and such Person owned less than twenty percent (20%) of such interests prior to such Transfer):

such Person shall have delivered a certification (in Lender’s then-current standard form) as to its prior history (for a period of not less than ten (10) years prior to such Transfer) regarding any Bankruptcy Action by such Person (or an entity Controlled by such Person) and as to whether such Person has any felony convictions during such period, which certification shall not include any matters that a prudent commercial mortgage lender would generally deem unacceptable;

Lender shall have received (at Borrower’s cost and expense) results of searches of such public records as Lender may require, verifying and confirming the information set forth in such certification; and

Borrower shall cause to be delivered to Lender an updated organizational chart for Borrower (reflecting such Transfer, on a pro forma basis) together with any Organizational Documents revised in connection with such Transfer.

(iii) Ground Lessor shall have consented in writing to such Permitted Transfer if required pursuant to the terms of the Ground Lease.

Borrower shall deliver the foregoing to Lender not less than ten (10) days prior to any such Transfer of the type described in subsection (i)-(iv) of Section 4.11(c) above, except in the case of a Transfer pursuant to Section 4.11(c)(iii) above, in which case such delivery shall be given reasonably promptly thereafter. Upon Lender’s verification that such Transfer satisfies the requirements of this Section 4.11(d), the revised organizational chart delivered in accordance with Section 4.11(d)(ii)(C) shall be deemed substituted for that attached as Exhibit C attached hereto.

In addition to the foregoing provisions of this Section 4.11, Guarantor may Transfer any of its beneficial ownership interests in Borrower and the SPE Component Entity, collectively, to a Qualified Transferee, provided each of the following conditions is satisfied:

(1) Borrower shall pay Lender a non-refundable application fee of $5,000.00 and, upon completion of such Transfer, a transfer fee equal to one percent (1%) of the then-current outstanding principal balance of the Loan;

(2) Borrower shall pay any and all reasonable and documented out-of-pocket costs incurred in connection with such Transfer (including Lender’s counsel fees and disbursements for outside counsel and all recording fees, title insurance premiums and mortgage and intangible taxes, and the fees and expenses of the Rating Agencies pursuant to clause (5) below);

(3) The proposed Qualified Transferee or its principals must have demonstrated experience in owning and operating properties similar in location, size, class and operation to the Property, which experience shall be reasonably acceptable to Lender;

(4) The proposed Qualified Transferee must not cause any representation or covenant set forth in this Agreement or in any other Loan Document (including, without limitation, those set forth in Section 4.27 of this Agreement) to become not true, correct and complete in any material respects or to be breached, and shall deliver (a) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender, and (b) all certificates, agreements, covenants and legal opinions reasonably required by Lender, and (c) a revised organizational chart reflecting the proposed ownership of Borrower after giving effect to such proposed Transfer;

(5) If required by Lender, the proposed Qualified Transferee shall obtain a Rating Confirmation with respect to such Transfer from each applicable Rating Agency;

(6) Such Qualified Transferee, or an Affiliate thereof under common Control therewith approved by Lender in its sole discretion, shall assume the obligations of the then-current Guarantor (including, without limitation, pursuant to the Hazardous Substances Indemnity Agreement and the Indemnity and Guaranty Agreement) and executes such documents as may be required by Lender to evidence such assumption, and deliver such organization documents and enforceability or other opinions as may be required by Lender; upon the delivery of such assumptions, the previously existing Guarantor shall be released from and relieved of any of its obligations under any Loan Document for any acts or events occurring or obligations arising after the closing of such Transfer which are not caused by or arising out of any acts or events occurring or obligations arising prior to or simultaneously with the closing of such Transfer;

(7) The Property shall be managed in a manner that satisfies the requirements of Section 4.24 of this Agreement; and

(8) Borrower or the proposed Qualified Transferee shall deliver to Lender a Non-Consolidation Opinion reflecting such Transfer in form and substance reasonably satisfactory to Lender.

(e) Notwithstanding (and without limiting) the foregoing provisions of this Section 4.11, no transfer of any direct or indirect ownership interests in Borrower may be made (other than with respect to Transfers as set forth in subsection (v) of Section 4.11(c) above) such that the transferee owns, in the aggregate with the ownership interests in Borrower of transferee’s Affiliates, more than a forty-nine percent (49%) interest in Borrower unless such transfer is conditioned upon the delivery of a nonconsolidation opinion acceptable to the Lender and any applicable Rating Agency.

4.12 Use of Rents and Profits. Except to the extent provided to the contrary in the Loan Documents, all Rents and Profits generated by or derived from the Property shall first be utilized solely for current expenses directly attributable to the ownership and operation of the Property, including, without limitation, current expenses relating to Borrower’s liabilities and obligations with respect to this Agreement and the other Loan Documents, and none of the Rents and Profits generated by or derived from the Property shall be diverted by Borrower, distributed to the Equity Holders or utilized for any other purposes, in each case unless all expenses attributable to the ownership and operation of the Property then due and payable have been fully paid and satisfied. Without limiting the foregoing, Borrower shall pay when due all utility charges (e.g., for gas, electricity, water and sewer services and similar charges) which are incurred by Borrower or its agents, and all other assessments or charges of a similar nature, or assessments payable pursuant to any restrictive covenants, whether public or private, affecting the Real Estate and/or the Improvements or any portion thereof, whether or not such assessments or charges are or may become liens thereon.

4.13 Access Privileges and Inspections. Lender and the agents, representatives and employees of Lender shall, subject to the rights of Tenants, have full and free access to the Real Estate and the Improvements and any other location where books and records concerning the Property are kept at all reasonable times for the purposes of inspecting the Property and of examining, copying and making extracts from the books and records of Borrower relating to the Property. Borrower shall lend assistance to all such agents, representatives and employees of Lender. Upon reasonable notice to Borrower, Borrower shall make principals and executives of Borrower available at reasonable times to meet with Lender to review and discuss the status of the Loan and the Property.

4.14 Waste; Alteration of Improvements. Borrower shall not commit, suffer or permit any waste on the Property nor take any actions that might invalidate any insurance carried on the Property. Borrower shall maintain the Property in good condition and repair. No part of the Improvements may be removed, demolished or materially altered, in each case, without the prior written consent of Lender, except as required pursuant to Applicable Laws or to cause the Property not to be in violation of any Lease approved or deemed approved pursuant to Section 4.10. Without the prior written consent of Lender in each case, Borrower shall not commence construction of any improvements on the Real Estate other than improvements required for the maintenance or repair of the Property.

4.15 Zoning. Without the prior written consent of Lender in each case, Borrower shall not (a) change the use of the Property or (b) seek, make, suffer, consent to or acquiesce in any change in the

zoning or conditions of use of the Real Estate or the Improvements. If, under applicable zoning provisions, the use of all or any part of the Real Estate or the Improvements is or becomes a nonconforming use, Borrower shall not cause or permit such use to be discontinued or abandoned without the prior written consent of Lender. Without Lender’s prior written consent, Borrower shall not file or subject any part of the Real Estate or the Improvements to any declaration of condominium or co-operative or convert any part of the Real Estate or the Improvements to a condominium, co-operative or other form of multiple ownership and governance.

4.16 Financial Statements; Books and Records; Informational Reporting. Borrower shall keep accurate books and records of account of the Property and its own financial affairs sufficient to permit the preparation of financial statements therefrom in accordance with generally accepted accounting principles. Lender and its duly authorized representatives shall have the right to examine, copy and audit Borrower’s records and books of account at all reasonable times. So long as all or any portion of the Loan is outstanding, Borrower shall provide to Lender, in addition to any other financial statements required hereunder or under any of the other Loan Documents, the following financial statements and information, all of which must be certified to Lender as being true and correct by Borrower or the person or entity to which they pertain, as applicable, be prepared in accordance with generally accepted accounting principles consistently applied, and be in form and substance acceptable to Lender:

(a) copies of all tax returns filed by Borrower, within thirty (30) days after the date of filing;

(b) monthly operating statements for the Property (including a current Rent Roll), within thirty (30) days after the end of each month, provided, however, that after a Secondary Market Transaction, monthly operating statements shall only be required if (i) a Cash Management Period is continuing, or (ii) if the amount of any payment under the Loan Documents (including, without limitation, any deposit to any Reserve) is determined based in whole or in part on the revenue, expenses or net cash flow (or comparable concepts) of Borrower or the Property;

(c) quarterly operating statements for the Property, accompanied by a current Rent Roll certified by Borrower as being true, correct and complete, within thirty (30) days after the end of each calendar quarter;

(d) annual financial statements for Borrower (setting forth Borrower’s balance sheet and operating statements for the Property) and each Guarantor in connection with the Loan including an annual balance sheet for the Property, within ninety (90) days after the end of each calendar year; and

(e) such other information with respect to the Property, Borrower, the principals in Borrower, and each Guarantor which may reasonably be requested from time to time by Lender, within a reasonable time after the applicable request.

If any of the aforementioned materials are not furnished to Lender within the applicable time periods, in addition to any other rights and remedies of Lender contained herein, Lender shall have the right, but not the obligation, to obtain the same by means of an audit by an independent certified public accountant selected by Lender, in which event Borrower agrees to pay, or to reimburse Lender for, any expense of such audit and further agrees to provide all necessary information to said accountant and to otherwise cooperate in the making of such audit.

4.17 Further Documentation. Borrower shall, on the request of Lender and at the expense of Borrower, promptly: (a) correct any defect, error or omission which may be discovered in the contents of this Agreement or in the contents of any of the other Loan Documents; (b) execute, acknowledge, deliver

and record or file such further instruments (including, without limitation, further mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements and assignments of rents or leases) and promptly do such further acts as may be necessary, desirable or proper to carry out more effectively the purposes of this Agreement and the other Loan Documents and to subject to the liens and security interests hereof and thereof any property intended by the terms hereof and thereof to be covered hereby and thereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements or appurtenances to the Property; (c) execute, acknowledge, deliver, procure and record or file any document or instrument (including specifically any financing statement) deemed advisable by Lender to protect, continue or perfect the liens or the security interests hereunder against the rights or interests of third persons; and (d) furnish to Lender, upon Lender’s request, a duly acknowledged written statement and estoppel certificate addressed to such party or parties as directed by Lender and in form and substance supplied by Lender, setting forth all amounts due under the Note, stating whether any Default or Event of Default exists, stating whether any offsets or defenses exist against the Debt, affirming that the Loan Documents are the legal, valid and binding obligations of Borrower, and containing such other matters as Lender may reasonably require.

4.18 Payment of Costs; Reimbursement to Lender. Borrower shall pay all costs and expenses of every character incurred in connection with the closing of the Loan or otherwise attributable or chargeable to Borrower as the owner of the Property, including, without limitation, appraisal fees, recording fees, documentary, stamp, mortgage or intangible taxes, brokerage fees and commissions, title policy premiums and title search fees, public records search fees, escrow fees and attorneys’ fees (including, without limitation, Lender’s attorneys’ fees and expenses). Borrower shall pay to Lender any and all reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees) in connection with any matter for which the consent or approval of Lender is required (or which is required to be delivered to Lender for review and/or approval) pursuant to the Loan Documents. If Borrower defaults in any such payment, which default is not cured within any applicable grace or cure period, Lender may pay the same and Borrower shall reimburse Lender on demand for all such costs and expenses incurred or paid by Lender, together with such interest thereon at the Default Rate from and after the date of Lender’s making such payment until reimbursement thereof by Borrower. Further, Borrower shall promptly notify Lender in writing of any litigation or threatened litigation affecting the Property, or any other demand or claim which, if enforced, could impair or threaten to impair Lender’s security hereunder. Without limiting or waiving any other rights and remedies of Lender hereunder, if any action or proceeding of any kind (including, but not limited to, any bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding) is commenced which might affect Lender’s interest in the Property or Lender’s right to enforce its security, or upon the occurrence of any other Event of Default, then Lender may, at its option, with or without notice to Borrower, make any appearances, disburse any sums and take any actions as may be necessary or desirable to protect or enforce the security of this Agreement, the Mortgage and the other Loan Documents or to remedy such Event of Default (without, however, waiving any Default). Borrower agrees to pay on demand all expenses of Lender incurred with respect to the foregoing (including, but not limited to, reasonable fees and disbursements of counsel), together with interest thereon at the Default Rate from and after the date on which Lender incurs such expenses until reimbursement thereof by Borrower. The necessity for any such actions and of the amounts to be paid shall be determined by Lender in its discretion. Lender is hereby empowered to enter and to authorize others to enter upon the Property or any part thereof for the purpose of performing or observing any such defaulted term, covenant or condition without thereby becoming liable to Borrower or any person in possession holding under Borrower. Borrower hereby acknowledges and agrees that the remedies set forth in this Section 4.18 shall be exercisable by Lender, and any and all payments made or costs or expenses incurred by Lender in connection therewith shall, without demand, immediately be repaid by Borrower with interest thereon at the Default Rate, notwithstanding the fact that such remedies were exercised and such payments made and costs incurred by Lender after the filing by Borrower of a voluntary case or the filing against Borrower of an involuntary case pursuant to or within the meaning of

the Bankruptcy Reform Act of 1978, as amended, Title 11 U.S.C., or after any similar action pursuant to any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter, in effect, which may be or become applicable to Borrower, Lender, any Guarantor, the Debt or any of the Loan Documents. Borrower hereby indemnifies and holds Lender harmless from and against all loss, cost and expenses with respect to any Default hereof, any liens (i.e., judgments, mechanics’ and materialmen’s liens, or otherwise), charges and encumbrances filed against the Property, and from any claims and demands for damages or injury, including claims for property damage, personal injury or wrongful death, arising out of or in connection with any accident or fire or other casualty on the Real Estate or the Improvements or any nuisance made or suffered thereon, including, in any case, attorneys’ fees, costs and expenses as aforesaid, whether at pretrial, trial or appellate level, and such indemnity shall survive payment in full of the Debt. This Section 4.18 shall not be construed to require Lender to incur any expenses, make any appearances or take any actions.

4.19 Security Interest and Security Agreement. Borrower acknowledges and agrees that the Mortgage is also a security agreement under the Uniform Commercial Code for the UCC Collateral.

4.20 Easements and Rights-of-Way. Borrower shall not grant any easement or right-of-way with respect to all or any portion of the Real Estate or the Improvements without the prior written consent of Lender. The purchaser at any foreclosure sale under the Mortgage may, at its discretion, disaffirm any easement or right-of-way granted in violation of any of the provisions of this Agreement and may take immediate possession of the Property free from, and despite the terms of, such grant of easement or right-of-way. If Lender consents to the grant of an easement or right-of-way, Lender agrees to grant such consent provided that Lender is paid a standard review fee together with all other expenses, including, without limitation, attorneys’ fees, incurred by Lender in the review of Borrower’s request and in the preparation of documents effecting the subordination. Borrower shall at all times comply with all easement agreements, reciprocal easement agreements, declarations, restrictive covenants and any other similar types of agreements now or hereafter affecting the Property, and Borrower shall not amend, modify or terminate any such easement agreements, reciprocal easement agreements, declarations, restrictive covenants or any other similar types of agreements without Lender’s prior written consent.

4.21 Compliance with Laws. Borrower shall at all times comply with all Applicable Laws, even if such compliance shall require structural changes to the Property. Borrower may, upon providing Lender with security satisfactory to Lender, proceed diligently and in good faith to contest the validity or applicability of any Applicable Law so long as the Property shall not be subject to any lien, charge, fine or other liability, and shall not be in danger of being forfeited, lost or closed, during or as a result of such contest. Borrower shall not alter the Property in any manner that would materially increase Borrower’s responsibilities for compliance with Applicable Laws without the prior approval of Lender. Borrower shall not use or occupy, or allow the use or occupancy of, the Property in any manner which violates any Lease or any Applicable Law or which constitutes a public or private nuisance or which makes void, voidable or cancelable, or increases the premium of, any insurance then in force with respect thereto. Borrower shall, from time to time, upon Lender’s request, provide Lender with evidence reasonably satisfactory to Lender that the Property complies with all Applicable Laws. Borrower shall keep all material licenses, permits, franchises, certificates of occupancy, consents and other approvals necessary for the operation of the Property in full force and effect.

4.22 Additional Taxes. In the event of the enactment after this date of any law of the State where the Real Estate is located or of any other governmental entity deducting from the value of the Property for the purpose of taxation any lien or security interest thereon, or imposing upon Lender the payment of the whole or any part of the taxes required to be paid by Borrower, or changing in any way the laws relating to the taxation of mortgages or security agreements or debts secured by mortgages or security agreements or the interest of lenders or secured parties in the property covered thereby, or the

manner of collection of such taxes, so as to adversely affect this Agreement, the Mortgage or the Debt or Lender, then, and in any such event, Borrower, upon demand by Lender, shall pay such Taxes or Other Charges, or reimburse Lender therefor; provided, however, that if in the opinion of counsel for Lender (a) it might be unlawful to require Borrower to make such payment, or (b) the making of such payment might result in the imposition of interest beyond the maximum amount permitted by law, then and in either such event, Lender may elect, by notice in writing given to Borrower, to declare all of the Debt to be and become due and payable in full thirty (30) days from the giving of such notice.

4.23 Borrower’s Waivers.

(a) To the full extent permitted by applicable law, Borrower shall not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, moratorium or extension, or any law now or hereafter in force providing for the reinstatement of the Debt prior to any sale of the Property to be made pursuant to any provisions contained herein or prior to the entering of any decree, judgment or order of any court of competent jurisdiction, or any right under any statute to redeem all or any part of the Property so sold. Borrower, for Borrower and Borrower’s successors and assigns, and for any and all Persons ever claiming any interest in the Property, to the full extent permitted by law, hereby knowingly, intentionally and voluntarily with and upon the advice of competent counsel: (i) waives, releases, relinquishes and forever forgoes all rights of valuation, appraisement, stay of execution, reinstatement and notice of election or intention to mature or declare due the Debt (except such notices as are specifically provided for herein); (ii) waives, releases, relinquishes and forever forgoes all right to a marshalling of the assets of Borrower, including the Property, to a sale in the inverse order of alienation, or to direct the order in which any of the Property shall be sold in the event of foreclosure of the liens and security interests hereby created and agrees that any court having jurisdiction to foreclose such liens and security interests may order the Property sold as an entirety; and (iii) waives, releases, relinquishes and forever forgoes all rights and periods of redemption provided under applicable law. To the full extent permitted by law, Borrower shall not have or assert any right under any statute or rule of law pertaining to the exemption of homestead or other exemption under any federal, state or local law now or hereafter in effect, the administration of estates of decedents or other matters whatever to defeat, reduce or affect the right of Lender under the terms of this Agreement, the Mortgage or any of the other Loan Documents to a sale of the Property, for the collection of the Debt without any prior or different resort for collection, or the right of Lender under the terms of this Agreement, the Mortgage or any of the other Loan Documents to the payment of the Debt out of the proceeds of sale of the Property in preference to every other claimant whatever. Further, Borrower hereby knowingly, intentionally and voluntarily, with and upon the advice of competent counsel, waives, releases, relinquishes and forever forgoes all present and future statutes of limitations as a defense to any action to enforce the provisions of this Agreement, the Mortgage or any of the other Loan Documents or to collect any of the Debt the fullest extent permitted by law. Borrower covenants and agrees that upon the commencement of a voluntary or involuntary bankruptcy proceeding by or against Borrower, Borrower shall not seek a supplemental stay or otherwise shall not seek pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory, common law, case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights of Lender against any Guarantor of the secured obligations or any other party liable with respect thereto by virtue of any indemnity, guaranty or otherwise.

(b) Except as may be specifically provided in the Loan Documents, Borrower waives presentment and demand for payment, notice of intent to accelerate maturity, notice of acceleration of maturity, protest and notice of protest and non-payment, all applicable exemption rights, valuation and appraisement, notice of demand, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of the Note and this Agreement and the bringing of

suit and diligence in taking any action to collect any sums owing under the Note or hereunder or in proceeding against any of the rights and collateral securing payment hereof. Borrower agrees (i) that the time for any payments under the Note or hereunder may be extended from time to time without notice and consent, (ii) to the acceptance by Lender of further collateral, (iii) the release by Lender of any existing collateral for the payment of the Note or the payments due under this Agreement or any of the other Loan Documents, (iv) to any and all renewals, waivers or modifications that may be granted by Lender with respect to the payment or other provisions of the Note, this Agreement or any of the other Loan Documents, and/or (v) that additional Persons may become parties hereto or the other Loan Documents all without notice to Borrower and without in any manner affecting Borrower’s obligations or liabilities under or with respect to the Note, this Agreement or any of the other Loan Documents. No extension of time for the payment of the Note or the payments due under this Agreement or any of the other Loan Documents or any installment thereof or hereof shall affect the obligations or liabilities of Borrower under the Note, this Agreement or any of the other Loan Documents even if Borrower is not a party to such agreement.

(c) Failure of Lender to exercise any of the options or remedies granted herein to Lender upon the happening of one or more of the events giving rise to such options or remedies shall not constitute a waiver of the right to exercise the same or any other option or remedy at any subsequent time in respect to the same or any other event. The acceptance by Lender of any payment hereunder or under any of the other Loan Documents that is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the options or remedies granted herein or under any of the other Loan Documents to Lender at that time or at any subsequent time or nullify any prior exercise of any such option or remedy without the express written acknowledgment of the Lender.

4.24 Management.

(a) The management of the Property (including, without limitation, property management, leasing brokerage and/or asset management services) shall be performed by one or more of the following: (i) an entity affiliated with Borrower approved by Lender for so long as Borrower or said affiliated entity is managing the Property in a first class manner; and/or (ii) a professional property management company approved by Lender, and in either case pursuant to a written agreement (a “Property Management Agreement”) approved by Lender. As of the date hereof, the entity named in this Agreement as “Property Manager” is the only entity responsible for management of the Property as aforesaid. In no event shall any Property Manager be removed, replaced or retained, or any Property Management Agreement entered into, modified or amended, in each case without the prior written consent of Lender, which shall not unreasonably be withheld. After an Event of Default hereunder or a default under any Property Management Agreement then in effect, which default is not cured within any applicable grace or cure period, Lender shall have the right to terminate, or to direct Borrower to terminate, such Property Management Agreement upon thirty (30) days’ notice and to retain, or to direct Borrower to retain, a new Property Manager approved by Lender. It shall be a condition of Lender’s consent to any Property Management Agreement, whether with an affiliate of Borrower or a professional property management company, that such Property Manager enter into an agreement with Lender whereby the manager acknowledges and agrees to the aforesaid rights of Lender, and as to such other matters as Lender may require.

(b) Borrower has delivered to Lender a true, correct and complete copy of each Contract now in effect. Borrower will comply with all of its obligations under all Contracts which are material to the operation of the Property in accordance with Borrower’s current practice, and with all material obligations under all other Contracts. Without limiting the restrictions set forth in Section 4.24(a) pertaining to the Property Management Agreement, Borrower may not terminate any other Contract that

is material to the operation of the Property, or enter into any amendment thereto that makes the terms thereof less favorable to Borrower, in each case without the prior written consent of Lender, which shall not unreasonably be withheld; provided, however, that if the other party to such Contract is in default thereunder, and Borrower can replace the goods or services provided on terms not materially disadvantageous to Borrower, then the prior written consent of Lender shall not be required to terminate such Contract. Borrower shall perform its obligations under each Contract and each of the General Intangibles, except where Borrower’s failure to do so would not have a material adverse effect on Borrower or the Property. Borrower represents that its interest under each Contract, and each General Intangible, is not subject to any claim, setoff, lien, deduction or encumbrance of any nature, other than that created by the Loan Documents. At any time during the continuance of an Event of Default, Lender may (but shall not be obligated to) take such action as Lender may determine to be reasonably necessary to protect the rights of Borrower under any or all of the Contracts and/or the General Intangibles. Should Lender, or Lender’s designee, acquire the Property (whether pursuant to exercise of Lender’s remedies hereunder or by transfer in lieu thereof), Lender may elect to assume Borrower’s interests under any or all of the Contracts or General Intangibles as Lender shall determine, and Borrower shall cause to be terminated, without obligation to Lender or the successor owner of the Property, such other Contracts and/or General Intangibles as Lender may direct.

4.25 Hazardous Waste and Other Substances.

(a) Borrower hereby represents and warrants to Lender that, as of the date hereof, except as disclosed in writing to Lender: (i) to the best of Borrower’s knowledge, information and belief, except as expressly set forth in the Environmental Report, the Property is not in direct or indirect violation of any Environmental Laws; (ii) to the best of Borrower’s knowledge, information and belief, except as expressly set forth in the Environmental Report, no Hazardous Substances are located on or have been handled, generated, stored, processed or disposed of on or released or discharged from the Property (including underground contamination) except for those substances used by Borrower or Tenants in the ordinary course of their respective business and in compliance with all Environmental Laws; (iii) the Property is not subject to any private or governmental lien or judicial or administrative notice or action relating to Hazardous Substances; (iv) to the best of Borrower’s knowledge, information and belief, except as expressly set forth in the Environmental Report, there are no existing or closed underground storage tanks or other underground storage receptacles for Hazardous Substances on the Property; (v) Borrower has received no notice of, and to the best of Borrower’s knowledge and belief, there exists no investigation, action, proceeding or claim by any agency, authority or unit of government or by any third party which could result in any liability, penalty, sanction or judgment under any Environmental Laws with respect to any condition, use or operation of the Property nor does Borrower know of any basis for such a claim; and (vi) Borrower has received no notice of and, to the best of Borrower’s knowledge and belief, there has been no claim by any party that any use, operation or condition of the Property has caused any nuisance or any other liability or adverse condition on any other property nor does Borrower know of any basis for such a claim.

(b) Borrower shall keep or cause the Property to be kept free from Hazardous Substances (except those substances used by Borrower and Tenants in the ordinary course of their respective business and, in each case, in compliance with all Environmental Laws and in a manner that does not result in contamination of the Property) and in compliance with all Environmental Laws, shall not install or use any underground storage tanks, shall expressly prohibit the use, generation, handling, storage, production, processing and disposal of Hazardous Substances by all Tenants (except in the ordinary course of a business that is not a Prohibited Use and in each case in compliance with all Environmental Laws and in a manner that does not result in contamination of the Property) and, without limiting the generality of the foregoing, shall not install in the Improvements or permit to be installed in the Improvements asbestos-containing materials (“ACMs”) or any substance containing ACMs. Borrower

shall, if required under applicable Environmental Laws, maintain all applicable Material Safety Data Sheets with respect to the Property, and make same available to Lender or Lender’s consultants upon reasonable notice.

(c) Borrower shall promptly notify Lender if Borrower shall become aware of the possible existence of any Hazardous Substances on the Property (except to the extent used in the ordinary course of a business that is not a Prohibited Use and in each case in compliance with all Environmental Laws and in a manner that does not result in contamination of the Property) or if Borrower shall become aware that the Property is or may be in direct or indirect violation of any Environmental Laws. Further, immediately upon receipt of the same, Borrower shall deliver to Lender copies of any and all orders, notices, permits, applications, reports, and other communications, documents and instruments pertaining to the actual, alleged or potential presence or existence of any Hazardous Substances at, on, about, under, within, near or in connection with the Property. Borrower shall, promptly and when and as required by Lender, at Borrower’s sole cost and expense, take all actions as shall be necessary or advisable for the clean-up of any and all portions of the Property or other affected property, including, without limitation, all investigative, monitoring, removal, containment and remedial actions in accordance with all applicable Environmental Laws (and in all events in a manner satisfactory to Lender), and shall further pay or cause to be paid, at no expense to Lender, all clean-up, administrative and enforcement costs of applicable governmental agencies which may be asserted against the Property; in the event Borrower fails to take such actions, (i) Lender may, but shall not be obligated to, cause the Property or other affected property to be freed from any Hazardous Substances or otherwise brought into conformance with Environmental Laws and any and all costs and expenses incurred by Lender in connection therewith, together with interest thereon at the Default Rate from the date incurred by Lender until actually paid by Borrower, shall be immediately paid by Borrower on demand, and (ii) Borrower hereby grants to Lender and its agents and employees access to the Property and a license to remove any items deemed by Lender to be Hazardous Substances and to do all things Lender shall deem necessary to bring the Property in conformance with Environmental Laws. Borrower covenants and agrees, at Borrower’s sole cost and expense, to indemnify, defend (at trial and appellate levels, and with attorneys, consultants and experts acceptable to Lender), and hold Lender harmless from and against any and all liens, damages, losses, liabilities, obligations, settlement payments, penalties, assessments, citations, directives, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, reasonable attorneys’, consultants’ and experts’ fees and disbursements actually incurred in investigating, defending, settling or prosecuting any claim, litigation or proceeding) which may at any time be imposed upon, incurred by or asserted or awarded against Lender or the Property, and arising directly or indirectly from or out of: (A) the presence, release or threat of release of any Hazardous Substances on, in, under or affecting all or any portion of the Property or (to the extent such Hazardous Substances were released from, or migrated from, the Property) any surrounding areas, regardless of whether or not caused by or within the control of Borrower; (B) the violation of any Environmental Laws relating to or affecting the Property, whether or not caused by or within the control of Borrower; (C) the failure by Borrower to comply fully with the terms and conditions of this Section 4.25; (D) the breach of any representation or warranty contained in this Section 4.25; or (E) the enforcement of this Section 4.25, including, without limitation, the cost of assessment, containment and/or removal of any and all Hazardous Substances from all or any portion of the Property or (to the extent such Hazardous Substances were released from, or migrated from, the Property) any surrounding areas, the cost of any actions taken in response to the presence, release or threat of release of any Hazardous Substances on, in, under or affecting any portion of the Property or (to the extent such Hazardous Substances were released from, or migrated from, the Property) any surrounding areas to prevent or minimize such release or threat of release so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, and costs incurred to comply with the Environmental Laws in connection with all or any portion of the Property or any surrounding areas. The indemnity set forth in this Section 4.25(c) shall also include any diminution in the

value of the security afforded by the Property or any future reduction in the sales price of the Property by reason of any matter set forth in this Section 4.25(c). Lender’s rights under this Section 4.25(c) shall survive payment in full of the Debt and shall be in addition to all other rights of Lender under this Agreement, the Mortgage, the Note and the other Loan Documents.

(d) Upon Lender’s request, at any time during the continuance of an Event of Default or at such other time as Lender has reasonable grounds to believe that Hazardous Substances are or have been released, stored or disposed of on or around the Property or that the Property may be in violation of the Environmental Laws, Borrower shall provide, at Borrower’s sole cost and expense, an inspection or audit of the Property prepared by a hydrogeologist or environmental engineer or other appropriate consultant approved by Lender indicating the presence or absence of Hazardous Substances on the Property or an inspection or audit of the Improvements prepared by an engineering or consulting firm approved by Lender indicating the presence or absence of friable asbestos or substances containing asbestos on the Property. If Borrower fails to provide such inspection or audit within thirty (30) days after such request, Lender may order the same, and Borrower hereby grants to Lender and its employees and agents access to the Property and a license to undertake such inspection or audit. The cost of such inspection or audit, together with interest thereon at the Default Rate from the date incurred by Lender until actually paid by Borrower, shall be immediately due and payable to Lender by Borrower on demand.

(e) The obligations of Borrower under this Agreement (including, without limitation, this Section 4.25) with respect to Hazardous Substances shall not in any way limit the obligations of any party under the Hazardous Substances Indemnity.

4.26 Indemnification; Subrogation.

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

(b) If Lender is made a party defendant to any litigation or any claim is threatened or brought against Lender concerning the Debt, this Agreement, the other Loan Documents, the Property, or any part thereof, or any interest therein, or the construction, maintenance, operation or occupancy or use thereof, then Borrower shall indemnify, defend and hold Lender harmless from and against all liability by reason of said litigation or claims, including reasonable attorneys’ fees (together with reasonable appellate counsel fees, if any) and expenses incurred by Lender in any such litigation or claim, whether or not any such litigation or claim is prosecuted to judgment. If Lender commences an action against Borrower to enforce any of the terms hereof or to prosecute any breach by Borrower of any of the terms hereof or of any of the other Loan Documents, Borrower shall pay to Lender its reasonable attorneys’ fees (together with reasonable appellate counsel fees, if any) and expenses. The right to such attorneys’ fees (together with reasonable appellate counsel fees, if any) and expenses shall be deemed to have accrued on the commencement of such action, and shall be enforceable whether or not such action is prosecuted to judgment. If Borrower breaches any term of this Agreement, Lender may engage the services of an attorney or attorneys to protect its rights hereunder, and in the event of such engagement following any

breach by Borrower, Borrower shall pay Lender reasonable attorneys’ fees (together with reasonable appellate counsel fees, if any) and expenses incurred by Lender, whether or not an action is actually commenced against Borrower by reason of such breach. All references to “attorneys” in this Section 4.26 and elsewhere in this Agreement shall include without limitation any attorney or law firm engaged by Lender and Lender’s in-house counsel, and all references to “fees and expenses” in this Section 4.26 and elsewhere in this Agreement shall include without limitation any fees of such attorney or law firm and any allocation charges and allocation costs of Lender’s in-house counsel. The rights of Lender and obligations of Borrower under this section shall survive the foreclosure of the Mortgage and/or the repayment of the Debt. The rights of Lender under this section shall inure to the benefit of all current and future holders of all or any portion of the Loan from time to time, and shall continue to inure to the benefit of any such holder even after any such holder transfers its interest in the Loan (it being acknowledged, for purposes of clarification, that in connection with any transfer of a holder’s interest in the Loan, that such rights shall continue to inure to the benefit of both the transferor and transferee of such interest in the Loan).

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

4.27 Single-Purpose Entity Covenants. Borrower hereby represents, warrants and covenants, as of the date hereof and until such time as the Debt is paid in full, that without, in each case, the prior written consent of Lender (which may be withheld or conditioned by Lender in its sole and absolute discretion for any reason or for no reason):

(a) The sole purpose of Borrower has been, is and will be, to acquire, own, hold, maintain, and operate the Property, together with such other activities as may be necessary or advisable in connection with the ownership and operation of the Property. Borrower has not engaged, and does not and shall not engage, in any business, and it has and shall have no purpose, unrelated to the Property. Borrower has not owned, does not own and shall not acquire, any real property or own assets other than those related to the Property and/or otherwise in furtherance of the limited purposes of Borrower.

(b) Borrower shall at all times satisfy one of the following requirements:

(i) Borrower shall be a corporation that, at all times, has an Independent Director;

(ii) Borrower shall be an SPE-Qualifying LLC that at all times has an Independent Director;

(iii) Borrower shall be a limited partnership as to which, at all times, each general partner is an SPE Component Entity; or

(iv) Borrower shall be a limited liability company (other than an SPE-Qualifying LLC) as to which, at all times, at least one member shall be an SPE Component Entity.

(i) make any loans to any Affiliate, any Equity Holder or any Affiliate of any Equity Holder;

(ii) except as expressly permitted by Lender in writing (including, without limitation, as contemplated by Section 4.11 of this Agreement), sell, encumber (except with respect to Lender) or otherwise transfer or dispose of all or substantially all of its properties (a sale or disposition will be deemed to be “all or substantially all of its properties” if the sale or disposition includes the Property or if the total value of the properties sold or disposed of in such transaction and during the twelve months preceding such transaction is sixty six and two thirds percent (66-2/3%) or more in value of its total assets as of the end of the most recently completed fiscal year);

(iii) to the fullest extent permitted by law, dissolve, wind-up, or liquidate, or merge or consolidate with, or acquire all or substantially all of the assets of, any other person or entity (whether or not an Affiliate);

(iv) change the nature of the business conducted by it;

(v) act in a manner not consistent with the assumptions of any Non-Consolidation Opinion delivered to Lender in connection with the closing of the Loan, or in connection with any Transfer;

(vi) perform, nor shall any Controlling Entity of Borrower have the authority to cause Borrower to perform, any act in respect of Borrower in violation of any (a) applicable laws or regulations or (b) any agreement between Borrower and Lender (including, without limitation, this Agreement and the other Loan Documents); or

(vii) except as permitted by Lender in writing, amend, modify or otherwise change its Organizational Documents (which approval, after a Secondary Market Transaction with respect to the Loan, may be conditioned upon Lender’s receipt of a Rating Confirmation).

(d) Without the prior written affirmative vote of both (1) one hundred percent (100%) of the members, partners or stockholders of Borrower, and (2) the Independent Directors of Borrower and/or (if applicable) of any SPE Component Entity of Borrower, Borrower shall not undertake a Bankruptcy Action.

(e) Borrower shall have no indebtedness (including any PACE Loan) or incur any liability other than (i) unsecured debts and liabilities for trade payables and accrued expenses incurred in the ordinary course of its business of operating the Property; provided, however, that such unsecured indebtedness or liabilities (A) are in amounts that are normal and reasonable under the circumstances, but in no event to exceed two percent (2%) of the original principal amount of the Loan, and (B) are not evidenced by a note and are paid when due, but in no event for more than sixty (60) days from the date that such indebtedness or liabilities are incurred, and (ii) the Debt. No indebtedness (including any PACE Loan) other than the Loan shall be secured (senior, subordinated or pari passu) by the Property.

(f) The provisions of this Section 4.27(f) shall apply at all times when Borrower is a limited liability company or a partnership. A Bankruptcy Action by or against any partner or member of Borrower, as applicable, shall not cause such partner or member of Borrower, as applicable, to cease to be a partner or member of Borrower and upon the occurrence of a Bankruptcy Action, Borrower shall continue without dissolution. Additionally, to the fullest extent permitted by law, if any partner or member of Borrower, as applicable, ceases to be a partner or member of Borrower, as applicable, such event shall not terminate Borrower and Borrower shall continue without dissolution.

(g) Borrower shall at all times observe the applicable legal requirements for the recognition of Borrower as a legal entity separate from any Equity Holder or Affiliates of Borrower or of any Equity Holder, including, without limitation, as follows:

(i) It shall either (A) maintain its principal executive office and telephone and facsimile numbers separate from that of any Affiliate or of any Equity Holder and shall conspicuously identify such office and numbers as its own, or (B) shall allocate by written agreement fairly and reasonably any rent, overhead and expenses for shared office space. Additionally, it shall use its own separate stationery, invoices and checks which reflects its name, address, telephone number and facsimile number.

(ii) It shall maintain correct and complete financial statements, accounts, books and records and other entity documents separate from those of any Affiliate or any Equity Holder or any other person or entity. It shall prepare unaudited quarterly and annual financial statements, and its financial statements shall substantially comply with generally accepted accounting principles.

(iii) It shall maintain its own separate bank accounts, payroll and correct, complete and separate books of account.

(iv) It shall file or cause to be filed its own separate tax returns, if required to file tax returns.

(v) It shall hold itself out to the public (including any of its Affiliates’ creditors) under its own name and as a separate and distinct entity and not as a department, division or otherwise of any Affiliate or any Equity Holder.

(vi) It shall observe all customary formalities regarding its existence, including holding meetings and maintaining current and accurate entity record books separate from those of any Affiliate or any Equity Holder.

(vii) It shall hold title to its assets in its own name and act solely in its own name and through its own duly authorized officers and agents. No Affiliate or Equity Holder shall be appointed or act as its agent (except that, with respect to Borrower, an Affiliate or Equity Holder may serve as Property Manager with respect to the Property if in accordance with Section 4.24 hereof).

(viii) Investments shall be made in its name directly by it or on its behalf by brokers engaged and paid by it.

(ix) Except as required by Lender, it shall not guarantee, pledge or assume or hold itself out or permit itself to be held out as having guaranteed, pledged or assumed any liabilities or obligations of any Equity Holder or any Affiliate, nor shall it make any loan, except as permitted in the Loan Documents.

(x) It was solvent as of the date of its formation and remains solvent as of the date hereof, and will not make any distribution or dividend if doing so would cause it not to be solvent.

(xi) Its assets shall be separately identified, maintained and segregated. Its assets shall at all times be held by or on behalf of it and, if held on its behalf by another entity, shall at all times be kept identifiable (in accordance with customary usages) as assets owned by it. This restriction requires, among other things, that (A) funds shall be deposited or invested in its name, (B) funds shall not be commingled with the funds of any Affiliate or any Equity Holder, (C) it shall maintain all accounts in its own name and with its own tax identification number, separate from those of any Affiliate or any Equity Holder, and (D) its funds shall be used only for its business.

(xii) It shall maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or any Equity Holder.

(xiii) It shall pay or cause to be paid its own liabilities and expenses of any kind, including but not limited to salaries of its employees, only out of its own separate funds and assets.

(xiv) It shall at all times be adequately capitalized to engage in the transactions contemplated at its formation, and will not make any distribution or dividend if doing so would cause it not to be adequately capitalized.

(xv) It shall not do any act which would make it impossible to carry on its ordinary business.

(xvi) All data and records (including computer records) used by it or any Affiliate in the collection and administration of any loan shall reflect its ownership interest therein.

(xvii) None of its funds shall be invested in securities issued by, nor shall it acquire the indebtedness or obligation of, any Affiliate or any Equity Holder.

(xviii) It shall maintain an arm’s length relationship with each of its Affiliates and Equity Holders, and may enter into contracts or transact business with its Affiliates or Equity Holders only on commercially reasonable terms that are no less favorable to it than is obtainable in the market from a person or entity that is not an Affiliate or Equity Holder.

(xix) It shall correct any misunderstanding that is known to it regarding its name or separate identity.

(h) Any indemnification obligation of Borrower to any Equity Holder shall (i) be fully subordinated to the Loan, and (ii) not constitute a claim against Borrower or its assets until such time as the Loan has been indefeasibly paid in accordance with its terms and otherwise has been fully discharged (or, if applicable, defeased as contemplated by this Agreement).

(i) As to Borrower, or any SPE Component Entity with an Independent Director, the Organizational Documents shall also include provisions substantially comparable to the following (together with such modifications as may be approved (or, in the case of any Buyer or other Transfer, required) by Lender based on changes in relevant law or market standards after the date of this Agreement):

(i) To the fullest extent permitted by law, and notwithstanding any duty otherwise existing at law or in equity, the Independent Director shall consider only the interests of this entity (and, in the case of an SPE Component Entity, of Borrower), including its creditors, in exercising such person’s authority as an Independent Director. Except for duties to the entity in which it is an Independent Director (and, in the case of an SPE Component Entity, duties to Borrower) as set forth in the immediately preceding sentence (including duties to creditors solely to the extent of their respective economic interests in Borrower or such SPE Component Entity, but excluding (i) all other interests of such entity, (ii) the interests of other Affiliates of such entity, and (iii) the interests of any group of Affiliates of which the entity is a part), the Independent Directors shall not have any fiduciary duties to the entity, any other member or director of such entity, or to Borrower or Lender); provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.

(ii) To the fullest extent permitted by law, an Independent Director shall not be liable to the entity in which it serves for breach of contract or breach of duties (including fiduciary duties), unless the Independent Director acted in bad faith or engaged in willful misconduct.

(iii) No Independent Director shall resign or be removed or replaced, in each case unless Lender receives not less than five (5) business days’ prior written notice of (a) any proposed resignation or removal or replacement of such Independent Director, and (b) the identity of the proposed replacement Independent Director, together with evidence satisfactory to Lender that such replacement satisfies the applicable requirements to be an Independent Director, in each case except for removal of an Independent Director by reason of (y) acts or omissions by such Independent Director that constitute willful disregard of such Independent Director’s duties, in accordance with the standards set forth herein, or (z) such Independent Director having engaged in or having been charged with, or having been convicted of, fraud or other acts constituting a crime under any law applicable to such Independent Director, in which case a replacement Independent Director shall be identified and elected or appointed within five (5) business days after Borrower (or, if applicable, such SPE Component Entity) knew or was deemed to have known thereof.

(j) Borrower shall cause the Organizational Documents of Borrower to include, at all times, substantially all of the requirements of this Section 4.27, in a manner satisfactory to Lender.

4.28 Reserve Accounts and Disbursement Requests. At Lender’s option, as additional security for the Debt, Borrower shall establish and maintain the reserve accounts required by this Section 4.28, subject to the security interest therein as more fully set forth in Section 4.19.

(a) Intentionally Omitted.

(b) Replacement Reserve. Borrower agrees that it will perform all repairs and replacements necessary to maintain the Property in good working order, in accordance with its condition as of the date hereof. On each Payment Date until the Note is paid in full, Borrower shall pay to Lender the sum of $5,124.50 to be held in a reserve fund (the “Replacement Reserve”) subject to this Agreement, for payment of certain repairs and replacements at the Property which, under generally accepted accounting principles, are categorized as capital expenses and not as operating expenses (the “Repairs”). Borrower shall perform all Repairs in a good and workmanlike manner, in accordance with all applicable codes and regulations, and in each case in a manner satisfactory to Lender and as necessary to maintain the Property in good condition and in compliance with all Applicable Laws. So long as no Default shall exist and be continuing, Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Borrower the amount paid or incurred by Borrower in performing the Repairs as required above upon satisfaction of the requirements set forth in Section 4.29 of this Agreement. Lender may, at Borrower’s expense, make or cause to be made an inspection of the Property to determine the need, as determined by Lender in its reasonable judgment, for further Repairs of the Property. In the event that such inspection reveals that further Repairs are required, Lender shall provide Borrower with a written description of the required Repairs, and Borrower shall complete such Repairs to Lender’s reasonable satisfaction within ninety (90) days after Lender’s notice, or such later date as may be approved by Lender in its discretion.

(d) Leasing Reserve. Borrower agrees that, upon the execution of any Lease approved or deemed approved in accordance with Section 4.10 of this Agreement, Borrower shall timely perform all build-out, construction, tenant improvement work and other obligations required to be performed by Borrower under such Lease (the foregoing, “Tenant Improvements”) and timely pay as and when due any and all commissions to brokers in connection with such Lease (“Leasing Commissions”). Simultaneously herewith, Borrower shall deposit with Lender the sum of $2,253,651 for outstanding Leasing Commissions and Tenant Improvements as shown on Exhibit F attached hereto and

made a part hereof, and on each Payment Date until the Note is paid in full, Borrower shall pay to Lender the sum of $19,216.75 to be held in a reserve fund (the “Leasing Reserve”) subject to this Agreement, for payment of the costs of Leasing Commissions and Tenant Improvements (collectively, “Leasing Costs”). Borrower shall make additional deposits to the Leasing Reserve from time to time as required by Section 4.28(f) below. Borrower shall perform all Tenant Improvements in a good and workmanlike manner, in accordance with all applicable codes and regulations, and each case in a manner satisfactory to Lender and as necessary to maintain the Property in good condition and in compliance with all Applicable Laws. So long as no Default shall exist and be continuing, Lender shall, to the extent funds are available for such purpose in the Leasing Reserve (including, without limitation, in any Early Termination Reserve established pursuant to Section 4.28(f) hereof), disburse to Borrower the amount paid or incurred by Borrower as Leasing Costs upon satisfaction of the requirements set forth in Section 4.29 of this Agreement.

(e) Intentionally Omitted.

(f) Early Termination Reserve. If any Tenant (a “Terminating Tenant”) gives notice to Borrower that it is exercising an early termination option set forth in its Lease with Borrower, or if Borrower agrees to allow any Tenant to reduce or terminate its obligations under its Lease (subject, in each case, to the restrictions of Section 4.10(c) hereof), Borrower shall direct such Tenant that the payment or other consideration in connection therewith (the “Early Termination Payment”) is to be remitted to Lender (or, if a Cash Management Period shall then be in effect, such Early Termination Payment shall be deposited in the Clearing Account), for application as set forth below. If such Tenant remits the Early Termination Payment directly to Borrower, Borrower shall remit the Early Termination Payment to Lender, for application as set forth below. Any Early Termination Payment shall be deposited in a segregated sub-account of the Leasing Reserve (the “Early Termination Reserve”) to be held as additional security for the Debt; a separate Early Termination Reserve shall be maintained with respect to each Lease so terminated. Funds deposited in an Early Termination Reserve shall be disbursed as follows:

(i) If Borrower enters into a Lease for the entire premises previously demised under the Lease so terminated (the “Vacated Space”) with a Tenant reasonably acceptable to Lender and such Lease satisfies all applicable requirements of Section 4.10 hereof, and the Tenant under such Lease accepts such demised premises, takes occupancy thereof and commences the payment of base rent under its Lease (any such Lease, a “Qualified Replacement Lease”), then all funds in the Early Termination Reserve shall be used first to pay Leasing Costs with respect to such Qualified Replacement Lease upon satisfaction of the conditions set forth in Section 4.29 hereof; any funds remaining in the Early Termination Reserve after payment of all Leasing Costs with respect thereto shall be disbursed to Borrower as follows: (x) if the monthly net rent payable under the Qualified Replacement Lease is greater than or equal to the monthly net rent payable by the Terminating Tenant under its Lease as of the date of such termination, then provided no Default is then continuing, such funds remaining in the Early Termination Reserve shall be disbursed to Borrower; and (y) if the monthly net rent payable under the Qualified Replacement Lease is less than the monthly net rent payable by the Terminating Tenant under its Lease as of the date of such termination, then provided no Default is then continuing all funds remaining in the Early Termination Reserve shall be disbursed to Borrower in equal monthly installments over the remaining term of the Qualified Replacement Lease, until such time as all funds have been disbursed from the Early Termination Reserve.

(ii) If Borrower enters into one or more Leases each for less than the entire Vacated Space, no disbursements shall be permitted from the Early Termination Reserve except as follows:

Until such time as the entire Vacated Space has been re-leased pursuant to one or more Qualified Replacement Leases, and the Tenant under each such Qualified Replacement Lease accepts such demised premises, takes occupancy thereof and commences the payment of base rent under its Lease, Lender shall from time to time make disbursements on account of Leasing Costs with respect to the Vacated Space, provided, however, that the disbursements with respect to any portion of the Vacated Space on a per-square foot basis shall not exceed the amount of the Early Termination Payment on a per-square-foot basis; and

At such time as the entire Vacated Space has been re-leased pursuant to one or more Qualified Replacement Leases and the Tenant under each such Qualified Replacement Lease accepts such demised premises, takes occupancy thereof and commences the payment of base rent under its Lease, then after payment of all Leasing Costs with respect to the re-leasing of such Vacated Space, the funds remaining in the Early Termination Reserve shall be disbursed as follows: (i) first, to the extent that any disbursements were made from the Leasing Reserve with respect to such Vacated Space, an amount equal to the sum of all such disbursements will be transferred to the Leasing Reserve (notwithstanding any limit to the required deposits thereto); (ii) next, any funds remaining in the Early Termination Reserve shall be disbursed to Borrower as follows: (x) if the monthly aggregate net rents payable under all such Qualified Replacement Leases is greater than or equal to the monthly net rent payable by the Terminating Tenant, and the term of all such Qualified Replacement Leases extends to or beyond the scheduled expiration date of the Lease with the Terminating Tenant, then provided no Default is then continuing such funds remaining in the Early Termination Reserve shall be disbursed to Borrower; and (y) if the conditions of clause (x) are not satisfied, then provided no Default is then continuing such funds remaining in the Early Termination Reserve shall be disbursed to Borrower in equal monthly installments over the period that would have remained in the term of the Lease with the Terminating Tenant.

Leasing Costs with respect to any Qualified Replacement Lease shall be disbursed first out of the related Early Termination Reserve, if applicable, prior to using any funds in the Leasing Reserve with respect thereto.

(g) Cash Collateral Reserve. If a Cash Management Period shall be continuing (other than a Cash Management Period continuing due to a United Healthcare Trigger Period or a Parsons Trigger Period), Borrower shall make deposits to a reserve fund (the “Cash Collateral Reserve”) in accordance with Section 3.3(a) hereof. All funds on deposit in the Cash Collateral Reserve not previously disbursed or applied shall be disbursed to Borrower upon the termination of such Cash Management Period and so long as no other Cash Management Period then exists. Lender shall have the right, but not the obligation, at any time during the continuance of an Event of Default, in its sole and absolute discretion, to apply any and all funds on deposit in the Cash Collateral Reserve to the Debt, in such order and in such manner as Lender shall elect in its sole and absolute discretion, including to make a prepayment of Debt (together with the applicable Yield Maintenance Amount, if any, applicable thereto) or any other amounts due hereunder.

(h) United Healthcare Cash Collateral Reserve.

(i) During the continuance of a United Healthcare Trigger Period, Borrower shall make deposits to a reserve fund (the “United Healthcare Cash Collateral Reserve”) in

accordance with Section 3.3(a) hereof for the payment of Leasing Costs associated with the United Healthcare Premises and as additional collateral for the Loan. So long as no Event of Default shall exist and be continuing, Lender shall, to the extent funds are available for such purpose in the United Healthcare Cash Collateral Reserve, disburse to Borrower the amount paid or incurred by Borrower as Leasing Costs with respect to the United Healthcare Premises upon satisfaction of the requirements set forth in Section 4.29 of this Agreement.

(ii) Following the termination of a United Healthcare Trigger Period, provided no Event of Default is continuing, funds on deposit in the United Healthcare Cash Collateral Reserve not previously disbursed or applied shall be disbursed as follows: (x) provided no other Cash Management Period is continuing, to Borrower once all Occupancy Conditions are satisfied, or (y) if a Cash Management Period is continuing, but all Occupancy Conditions have been satisfied, on the next occurring Payment Date in accordance Section 3.3 hereof

(i) Parsons Cash Collateral Reserve.

(i) During the continuance of a Parsons Trigger Period, Borrower shall make deposits to a reserve fund (the “Parsons Cash Collateral Reserve”) in accordance with Section 3.3(a) hereof for the payment of Leasing Costs associated with the Parsons Premises and as additional collateral for the Loan. So long as no Event of Default shall exist and be continuing, Lender shall, to the extent funds are available for such purpose in the Parsons Cash Collateral Reserve, disburse to Borrower the amount paid or incurred by Borrower as Leasing Costs with respect to the Parsons Premises upon satisfaction of the requirements set forth in Section 4.29 of this Agreement.

(ii) Following the termination of a Parsons Trigger Period, provided no Event of Default is continuing, funds on deposit in the Parsons Cash Collateral Reserve not previously disbursed or applied shall be disbursed as follows: (x) provided no other Cash Management Period is continuing, to Borrower once all Occupancy Conditions are satisfied, or (y) if a Cash Management Period is continuing but all Occupancy Conditions have been satisfied, on the next occurring Payment Date in accordance Section 3.3 hereof

(j) Parsons Rent Reserve. Simultaneously herewith, Borrower shall pay to Lender the sum of $83,646.64 to be held in a reserve fund (the “Parsons Rent Reserve”) as additional collateral for the Debt, subject to this Agreement. So long as no Event of Default exists, Lender shall disburse to Borrower the amount in the Parsons Rent Reserve provided that all of the following conditions have been satisfied, as determined by Lender: (i) the Parsons Lease is in full force and effect and there are not defaults by Borrower thereunder; (ii) Parsons has taken actual possession and occupancy of the space demised to Parsons under the Parsons Lease, and is conducting business with the public therefrom; (iii) Parsons is paying full, unabated rent pursuant to the Parsons Lease; (iv) all work to be performed and paid for by Borrower, as landlord, under such Lease has been fully performed and paid for; and (v) Tenant delivers to Lender a tenant estoppel certificate in form and substance acceptable to Lender in its discretion confirming each of the foregoing subsections (i)-(iv).

(k) United Healthcare Rent Reserve. Simultaneously herewith, Borrower shall pay to Lender the sum of $1,781,613 to be held in a reserve fund (the “United Healthcare Rent Reserve”) as additional collateral for the Debt, subject to this Agreement. So long as no Event of Default or other Cash Management Period exists, Lender shall disburse to Borrower the amount of $593,871 from the United Healthcare Rent Reserve within ten (10) following Borrower’s written request on each of April 1, 2016, May 1, 2016 and June 1, 2016, provided that all of the following conditions have been satisfied as of the date of the request, as determined by Lender: (i) the United Healthcare Lease is in full force and effect

and there are not defaults by Borrower thereunder; (ii) United Healthcare has taken actual possession and occupancy of the space demised to United Healthcare under the United Healthcare Lease, and is conducting business with the public therefrom; (iii) United Healthcare is paying full, unabated rent pursuant to the United Healthcare Lease; (iv) all work to be performed and paid for by Borrower, as landlord, under such Lease has been fully performed and paid for; and (v) Tenant delivers to Lender a tenant estoppel certificate in form and substance acceptable to Lender in its discretion confirming each of the foregoing subsections (i)-(iv)

4.29 Disbursements from the Property Reserve Accounts. So long as no Event of Default shall have occurred and be continuing under this Agreement, all sums in each of the Leasing Reserve, the United Healthcare Cash Collateral Reserve, the Parsons Cash Collateral Reserve, the Parsons Rent Reserve, the United Healthcare Rent Reserve and the Replacement Reserve (the foregoing, collectively, the “Property Reserve Accounts”) shall be held by Lender in the respective Property Reserve Account as set forth above for the purposes set forth in Section 4.28. So long as no Default has occurred and is continuing, Lender shall disburse to Borrower, from the appropriate Property Reserve Account for the purposes set forth in Section 4.28, an amount equal to the actual expenses incurred to date by Borrower, less any prior disbursements to Borrower from any of the Property Reserve Account for such expenditure, but only to the extent that such expense is one for which, pursuant to Section 4.28, the proceeds of a Property Reserve Account may be disbursed. Disbursements shall be made to Borrower within ten (10) days following Lender’s receipt of each of the following:

(a) a written request from Borrower for such disbursement, accompanied by a certification by Borrower, in the form therefor then utilized by Lender or Lender’s servicing agent;

(b) copies of invoices, receipts or other evidence satisfactory to Lender verifying the costs and expenses for which Borrower is requesting such disbursement;

(c) for disbursement requests in connection with a single project, or group of related projects, for which Borrower is seeking disbursement of $10,000 or more, affidavits, lien waivers or other evidence reasonably satisfactory to Lender showing that all materialmen, laborers, contractors, suppliers and other parties who have or might claim statutory or common law liens, or who have furnished labor, materials or supplies to or in connection with the Property, have been paid (or are being paid out of the proceeds of such disbursement) all amounts due;

(d) for disbursement requests in connection with a single project, or group of related projects, for which Borrower is seeking disbursement of $20,000 or more, excluding, however, Leasing Commissions, a certification from an inspecting architect or other third party acceptable to Lender, verifying that the any work for which Borrower is requesting a disbursement has been properly completed and that the cost of such work bears a reasonable relationship to the costs incurred therefor;

(e) if requested by Lender, for disbursement requests in connection with Leasing Costs, a current estoppel certificate (in form and substance acceptable to Lender) from the tenant under the applicable Lease pursuant to which such Leasing Costs were incurred;

(f) a copy of the certificate of occupancy for the Improvements if, as a result of any work undertaken by Borrower, it was necessary to receive an amendment to the existing certificate of occupancy (or similar instrument) issued with respect to the Improvements, or to obtain a new certificate of occupancy for the Improvements, or a certification of Borrower that no such amended or new certificate of occupancy is required; and

(g) payment of an administrative fee of $150.00 per request.

Lender shall not be required to make an advance from each Property Reserve Account more frequently than once in any thirty (30) day period. In making any disbursement from a Property Reserve Account, Lender shall be entitled to rely on the disbursement request from Borrower without any inquiry into the accuracy, validity or contestability of any amount set forth therein. All costs and expenses required to be incurred in connection with the review and approval of each request for a disbursement from a Property Reserve Account shall be paid by Borrower not later than concurrently with such disbursement; Lender shall have the right to make disbursement of any costs and expenses not paid as of the request for such disbursement directly to the contractor, vendor or other provider (or by two-party check jointly to Borrower and such contractor, vendor or other provider). The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds. Lender may, at its discretion, hold the Reserves either in a separate account or commingled by Lender with any other funds in the possession or control of Lender. The Reserves are solely for the protection of Lender, and entail no responsibility on Lender’s part beyond making disbursements upon strict satisfaction of the requirements of Section 4.28 and this Section 4.29 and beyond the allowing of due credit for the sums actually received. To the extent that any funds in any of the Reserves are invested by Lender, Borrower shall bear the risk of loss of such investments. In the event that the amounts on deposit in any of the Property Reserve Account are insufficient to reimburse Borrower for amounts otherwise properly requested, Lender shall not be obligated or authorized to transfer funds from other Reserves, and Borrower shall pay the amount of such deficiency. Upon assignment of this Agreement by Lender, any funds in the Reserves shall be turned over to the assignee, and any responsibility of the assignor with respect thereto shall terminate.

4.30 Interest-Bearing Reserves. Lender shall cause funds in the Leasing Reserve and the Replacement Reserve (referred to in this Section 4.30 as the “Interest-Bearing Reserve”) to be deposited into an interest bearing account of the type customarily maintained by Lender or its Servicer for the investment of similar reserves, which account may not yield the highest interest rate then available. Interest payable on such amounts shall be computed based on the daily outstanding balance in the Interest-Bearing Reserve. Such interest shall be calculated on a simple, non-compounded interest basis based solely on contributions made to the Interest-Bearing Reserve by Borrower. All interest earned on amounts contributed to the Interest-Bearing Reserve shall be retained by Lender and added to the balance in such Interest-Bearing Reserve and shall be disbursed for payment of the items for which other funds in such Interest-Bearing Reserve are to be disbursed. Borrower acknowledges that all Reserves other than the Interest-Bearing Reserves shall not accrue or bear interest for the benefit of Borrower, and no interest shall be payable thereon by Lender.

4.31 Ground Lease Covenants. Borrower hereby covenants and agrees with Lender with respect to the Ground Lease:

(a) Borrower will comply in all material respects with the terms and conditions of the Ground Lease. Borrower will not do or permit anything to be done, the doing of which, or refrain from doing anything, the omission of which, will impair or tend to impair the security of the Leasehold Real Estate under the Ground Lease or will be grounds for declaring a default under, or forfeiture of, the Ground Lease.

(b) Borrower shall enforce the Ground Lease and will not terminate, modify, cancel, change, supplement, alter or amend the Ground Lease, or waive, excuse, condone or in any way release or discharge the Ground Lessor of or from any of the material covenants and conditions to be performed or observed by the Ground Lessor under the Ground Lease. Borrower hereby expressly covenants with Lender not to cancel, surrender, amend, modify or alter in any way the terms of the Ground Lease. Borrower hereby assigns to Lender, as further security for the payment of the Obligations and for the performance and observance of the terms, covenants and conditions of the Loan Documents, all of the

rights, privileges and prerogatives of Borrower, as tenant under the Ground Lease, to surrender the leasehold estate created by the Ground Lease or to terminate, cancel, modify, change, supplement, alter or amend the Ground Lease, and any such surrender of the leasehold estate created by the Ground Lease or termination, cancellation, modification, change, supplement, alteration or amendment of the Ground Lease without the prior consent of Lender shall be void and of no force and effect. Notwithstanding the foregoing, if the United Healthcare Lease is amended pursuant to the terms and conditions hereof during the Loan Term so that the parking obligations required therein no longer require the Ground Lease be utilized to meet their permitted parking spaces, and the parking at the Property otherwise complies with all zoning requirements for parking and no other tenants at the Property require the use of such parking spaces and/or the Leasehold Real Estate pursuant to the Ground Lease, Borrower may, with Lender’s reasonable prior written consent, terminate the Ground Lease.

(c) Borrower will give Lender prompt (and in all events within five (5) days) notice of any default under the Ground Lease or of the receipt by Borrower of any notice of default from Ground Lessor. Borrower will promptly (and in all events within (5) days) furnish to Lender copies of all information furnished to Ground Lessor by the terms of the Ground Lease or the provisions of this Section. Borrower will deposit with Lender an exact copy of any notice, communication, plan, specification or other instrument or document received or given by Borrower in any way relating to or affecting the Ground Lease which may concern or affect the estate of Ground Lessor or Borrower thereunder in or under the Ground Lease or in the Leasehold Real Estate thereby demised.

(d) Lender shall have the right, but not the obligation, to perform any obligations of Borrower under the terms of the Ground Lease during the continuance of a default. All costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) so incurred, shall be treated as an advance secured by the Loan Documents, shall bear interest thereon at the Default Rate from the date of payment by Lender until paid in full and shall be paid by Borrower to Lender during the continuance of an Event of Default within five (5) days after demand. No performance by Lender of any obligations of Borrower shall constitute a waiver of any default arising by reason of Borrower’s failure to perform the same. Subject to the rights of lessees, sublessees and other occupants under the Leases, Lender and any person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action.

(e) To the extent permitted by law, the amounts payable by Borrower or any other Person in the exercise of any right of redemption following foreclosure of the Property shall include all Ground Lease Rents paid and other sums advanced by Lender, together with interest thereon at the Default Rate, on behalf of Borrower and/or any successor to Borrower as lessee under the Ground Lease or any Replacement Ground Lease, on account of the Property.

(f) Unless Lender shall otherwise consent, the fee title and the leasehold estate in the Leasehold Real Estate shall not merge but shall always be kept separate and distinct, notwithstanding the union of said estates either in Ground Lessor or in Borrower, or in a third party, by purchase or otherwise.

(i) Without limiting the generality of the foregoing, Borrower expressly agrees to promptly execute, acknowledge and deliver to Lender such instruments as may be required to create, perfect, and preserve (i) a valid first lien, subject to no liens, charges or encumbrances other than the Permitted Exceptions, in favor of Lender, on the fee interest in any portion of the premises subject to the Ground Lease that may hereafter be acquired by Borrower (the “Added Fee Real Estate”), and (ii) a valid security interest in all personal property associated therewith.

(ii) Notwithstanding the foregoing, any other provision of this Agreement, or any requirement of the Ground Lease, Borrower shall not acquire a fee interest in any part of the Leasehold Real Estate (any such interest, along with all other interests in real or personal property acquired in conjunction therewith, “Added Fee Collateral,” provided, for avoidance of doubt, that Added Fee Real Estate shall not include any leasehold or other interest in real or personal property that is, immediately prior to an acquisition, both (1) held by Borrower, and (2) subject to the lien of the Mortgage), unless and until Borrower has caused each of the following conditions to be satisfied:

A. Lender shall have received a copy of a deed (and, as to any associated personal property, a bill of sale) conveying such Added Fee Collateral to Borrower, and a letter from the Borrower (countersigned by a title insurance company reasonably acceptable to Lender) acknowledging receipt of such deed and bill of sale, and agreeing to record such deed in the appropriate real estate records for the county in which the Fee Real Estate is located.

B. If the Loan (or any interest therein) is held by a REMIC, Lender shall have received an appraisal of the Property, including therein the proposed Added Fee Collateral, prepared by an appraiser acceptable to the Lender and the Rating Agencies (or such other evidence of valuation of the Fee Collateral as may be acceptable to a REMIC), dated no more than sixty (60) days prior to the date upon which such an acquisition (a “Fee Acquisition”) is to be consummated (the “Fee Acquisition Date”), indicating that as of the Fee Acquisition Date, the value of the Property including the proposed Added Fee Collateral and accounting for any merger of fee and leasehold interests that may occur as a result of such Fee Acquisition below, will be greater than the value of the Property, excluding the Fee Collateral, immediately prior to the Fee Acquisition.

C. After giving effect to such Fee Acquisition and any reduction in Borrower’s obligation to pay Ground Rent, the Debt Service Coverage Ratio for the Loan is not less than the Debt Service Coverage Ratio immediately preceding the Fee Acquisition.

D. If the Loan (or any interest therein) is held by a REMIC, Lender shall have received a Rating Confirmation with respect to the contemplated Fee Acquisition.

E. If the Loan (or any interest therein) is held by a REMIC, Borrower shall include in the certificate required pursuant to clause (E) above such additional representations and warranties with respect to Borrower, the Property, the Added Fee Collateral or the Loan as the Lender or the Rating Agencies may require (in accordance with the Prudent Lender Standard), and shall deliver such certificate in form and substance satisfactory to the Lender and the Rating Agencies.

F. Borrower shall have executed, acknowledged and delivered to Lender (A) a first priority deed of trust, an assignment of leases, a security agreement, and applicable financing statements with respect to the Added Fee Collateral (or, if determined by Lender in accordance with the Prudent Lender Standard, a modification and spreader of the lien of the Mortgage and the Assignment of Leases, together with an amendment to any previously filed financing statements), together with a letter from Borrower countersigned by a title insurance company reasonably acceptable to Lender

acknowledging receipt of such deed of trust, assignment of leases, security agreement, and financing statements and agreeing to record or file, as applicable, such instruments in the real estate records for the county in which the Added Fee Collateral is located and to file one of the financing statements in the office of the Secretary of State of the state in which Borrower is organized, so as to effectively create upon such recording and filing a valid and enforceable first priority lien upon the Added Fee Collateral in favor of Lender (or such other trustee as may be desired under local law), subject only to the Permitted Exceptions and such other liens as are permitted pursuant to the Loan Documents, and (B) modifications of all other Loan Documents necessary to include the Added Fee Collateral within the scope thereof (including to acknowledge any merger of fee and leasehold interests that may occur as a result of the Fee Acquisition). All such instruments shall be substantially the same in form and substance as the counterparts of such documents executed and delivered with respect to the Property as a whole, subject to modifications reflecting that the Added Fee Collateral is only a portion of the Property as a whole, and as otherwise might be appropriate under the Prudent Lender Standard based on changes in Applicable Laws as of the Fee Acquisition Date in order for counsel admitted to practice in the state of Texas to deliver the opinion as to the enforceability of such documents required pursuant to clause (L) below. Such Mortgage, as modified to encumber the Added Fee Collateral (including by the addition of any separate deed of trust or other security instrument), shall continue to secure all amounts evidenced by the Note, and any instruments delivered pursuant to this clause (F) shall thereafter be included within the term Loan Documents.

G. Lender shall have received an endorsement to the Title Insurance Policy, dated as of the Fee Acquisition Date, insuring that the Mortgage, modified or spread as contemplated by this Section 4.31(f), encumbers all of the Property including the Added Fee Collateral. The amount of coverage under the Title Insurance Policy shall not be reduced in connection with such endorsement, nor shall any exceptions to coverage be added thereby. Lender also shall have received copies of paid receipts showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid.

H. If the Loan (or any interest therein) is held by a REMIC, Lender shall have received an opinion of counsel acceptable to Lender and the Rating Agencies (together with such other evidence as Lender may request in accordance with the Prudent Lender Standard) that (a) the Fee Acquisition as contemplated hereby will not cause a “significant modification” of the Loan within the meaning of U.S. Treasury Regulation Section 1.860G-2(b)(2); (b) the substitution as contemplated hereby will not cause the Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code; and (c) the aggregate fair market value of the Property including therein the proposed Added Fee Collateral, as determined immediately after such Fee Acquisition, either (1) is equal to at least 80% of the adjusted issue price of the Loan that is outstanding immediately after such Fee Acquisition, or (2) equals or exceeds the aggregate fair market value of the borrower’s interest in the Ground Lease (to the extent not extinguished by any prior merger) and any previously acquired Fee Collateral that secures the Loan immediately before such Fee Acquisition. For purposes of the preceding clause (c), fair market value shall be determined by any commercially reasonable valuation method permitted under the REMIC Provisions and by excluding any personal property or going concern value attributable to the Property, the Added Fee Collateral, or the borrower’s interest therein.

I. Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for the Property include the Added Fee Collateral, and evidencing the payment of all premiums payable for the existing policy period.

J. Intentionally Omitted.

K. Borrower shall deliver or cause to be delivered to Lender (1) updates, certified by Borrower, of all organizational documentation related to Borrower and/or the formation, structure, existence, good standing and/or qualification to do business delivered to Lender in connection with the origination of the Loan; (2) good standing certificates, certificates of qualification to do business in the State of Texas and (3) resolutions of the manager or managing member of Borrower authorizing the Fee Acquisition and any actions taken in connection with such substitution.

L. Lender shall have received the following opinions of Borrower’s counsel: (1) an opinion or opinions of counsel admitted to practice under the laws of the state Texas stating that the Loan Documents delivered with respect to the Added Fee Collateral pursuant to clause (F) above are valid and enforceable in accordance with their terms, subject to the laws applicable to creditors’ rights and equitable principles, and that Borrower is qualified to do business and in good standing under the laws of the state in which the Added Fee Collateral is located; (2) an opinion of counsel acceptable to the Lender and the Rating Agencies stating that the Loan Documents delivered with respect to the Added Fee Collateral pursuant to clause (G) above were duly authorized, executed and delivered by Borrower and that the execution and delivery of such Loan Documents and the performance by Borrower of its obligations thereunder will not cause a breach of, or a default under, any agreement, document or instrument to which Borrower is a party or to which it or its properties are bound; (3) an opinion of counsel acceptable to the Lender and the Rating Agencies stating that subjecting the Added Fee Collateral to the Lien of the Mortgage (or such spreader agreement, as applicable) and the execution and delivery of the related Loan Documents does not and will not affect or impair the ability of Lender to enforce its remedies under all of the Loan Documents; (4) an update of the Non-Consolidation Opinion indicating that such Fee Acquisition does not affect the opinions set forth therein; and (5), if the Loan (or any interest therein) is held by a REMIC, an opinion of counsel acceptable to the Lender and the Rating Agencies stating that such Fee Acquisition and the related transactions do not constitute a fraudulent conveyance under applicable bankruptcy and insolvency laws.

M. Borrower shall have paid all costs relating to the ownership of the Property, including the Added Fee Collateral, including without limitation, (1) accrued but unpaid insurance premiums relating to the Property as modified to include the Added Fee Collateral, (2) currently due Taxes and Other Charges (including any in arrears) relating to the Property, including the Added Fee Collateral, and (3) amounts then due under the Ground Lease (including without limitation in respect of any leasehold estate that may be extinguished by merger as a result of such Fee Acquisition notwithstanding Borrower’s compliance with the requirements of clause (Q) below).

N. Borrower shall have paid or reimbursed Lender for all costs and expenses incurred by Lender (including, without limitation, reasonable attorneys fees and disbursements) in connection with the Fee Acquisition and Borrower shall have paid all recording charges, filing fees, taxes or other expenses (including, without limitation,

mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the substitution. Borrower shall have paid all costs and expenses of the Lender and the Rating Agencies incurred in connection with the Fee Acquisition.

O. Lender shall have received (1) an endorsement to the Title Insurance Policy insuring the first priority Lien of the Mortgage, modified or spread as contemplated by this Section 4.31(f), insuring that the Added Fee Collateral constitutes a separate tax lot or, if such an endorsement is not available in the state in which the Fee Collateral is located, other evidence meeting the Prudent Lender Standard, that the Fee Collateral constitutes a separate tax lot or (2) evidence meeting the Prudent Lender Standard that the Fee Collateral constitutes a separate tax lot.

P. If any rating on any security evidencing an ownership interest in the Loan has been issued and is then in effect, Lender shall have received such other and further approvals, opinions, documents and information in connection with the substitution as the Lender or the Rating Agencies may have requested.

Q. No Event of Default shall have occurred and be continuing as of the Fee Acquisition Date.

R. Lender shall have received from Borrower and Guarantor a certificate, in form and substance reasonably satisfactory to Lender:

(1) accompanying debt service coverage ratio calculation confirming satisfaction of the requirements of clause (C) above;

(2) attesting that such calculation is accurate, complete, and not misleading;

(3) stating that the representations and warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the Fee Acquisition Date with respect to Borrower, Guarantor and the Property (including the Added Fee Collateral), unless such certificate would be inaccurate (in which case such certificate shall recite any exceptions to such representations and warranties); and

(4) certifying that all of the requirements set forth in this Section 4.31(f) have been satisfied.

Upon the satisfaction of the foregoing conditions precedent, the Fee Acquisition may be consummated and the Added Fee Collateral shall be deemed to be part of the Property for purposes of this Agreement. Should such a Fee Acquisition occur without the conditions set forth above having been satisfied or waived (which waiver may be withheld by Lender in accordance with the Prudent Lender Standard), the same shall constitute an Event of Default.

(g) The actions or payments of Lender to cure any default by Borrower under the Ground Lease shall not cure or waive, as between Borrower and Lender, the default that occurred under this Agreement by virtue of Borrower’s default under the Ground Lease. All reasonable out-of-pocket

costs and expenses incurred by Lender to cure or attempt to cure any such default shall be paid by Borrower to Lender, upon demand, with interest at the Default Rate from the date such costs and expenses were incurred to and including the date the reimbursement payment is received by Lender. All such indebtedness shall be secured by the Mortgage.

(h) Borrower shall not, without prior consent of Lender, subordinate or consent to the subordination of the Ground Lease to any mortgage, security deed, lease or other interest on or in Ground Lessor’s interest in all or any part of the Property.

(i) Within fifteen (15) days after receipt of Lender’s request, Borrower shall use reasonable efforts to obtain from Ground Lessor and furnish to Lender an estoppel certificate of Ground Lessor stating the date through which Ground Rent has been paid, whether or not there are any defaults under the Ground Lease and specifying the nature of such claimed defaults, if any, and such other matters as Lender may reasonably request.

(j) Upon acquisition of the fee title in the Real Estate, the Mortgage shall, automatically and without the necessity of execution of any other documents, attach to and cover and be a lien upon such other estate so acquired, and such other estate shall be considered as mortgaged, assigned and conveyed to Lender and the lien hereof spread to cover such estate with the same force and effect as though specifically herein mortgaged, assigned and conveyed. The provisions of this subsection (g) shall not apply if Lender acquires title to the Property unless Lender shall so elect.

(k) If the Ground Lessor shall deliver to Lender a copy of any notice of default sent by the Ground Lessor to Borrower, as tenant under the Ground Lease, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender in reliance thereon.

(l) Borrower shall exercise each individual option, if any, to extend or renew the term of the Ground Lease promptly (and in all events within five (5) days) after demand by Lender made at any time within one (1) year of the last day upon which any such option may be exercised, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower to so exercise such option if Borrower fails to exercise as herein required, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest.

(m) Each Lease hereafter made, and each renewal of any existing Lease, shall provide that, (i) in the event of the termination of the Ground Lease, the Lease shall not terminate or be terminable by the lessee; (ii) in the event of any action for the foreclosure of the Mortgage, the Lease shall not terminate or be terminable by the subtenant by reason of the termination of the Ground Lease unless the lessee is specifically named and joined in any such action and unless a judgment is obtained therein against the lessee; and (iii) in the event that the Ground Lease is terminated as aforesaid, the lessee under the Lease shall attorn to the lessee under the Ground Lease (or any Replacement Ground Lease) or to the purchaser at the sale of the Property on such foreclosure, as the case may be.

(n) Borrower hereby assigns, transfers and sets over to Lender all of Borrower’s claims and rights to the payment of damages arising from any rejection by the Ground Lessor of the Ground Lease under the Bankruptcy Code. Borrower shall notify Lender promptly (and in any event within ten (10) days) of any claim, suit action or proceeding relating to the rejection of the Ground Lease. Lender is hereby irrevocably appointed as Borrower’s attorney-in-fact, coupled with an interest, with exclusive power to file and prosecute, to the exclusion of Borrower, any proofs of claim, complaints, motions, applications, notices and other documents, in any case in respect of the Ground Lessor under the Bankruptcy Code during the continuance of any Event of Default. Borrower may make any compromise

or settlement in connection with such proceedings (subject to Lender’s reasonable approval); provided, however, that Lender shall be authorized and entitled to compromise or settle any such proceeding if such compromise or settlement is made after the occurrence and during the continuance of any Event of Default. Borrower shall promptly execute and deliver to Lender any and all instruments reasonably required in connection with any such proceeding after request therefor by Lender. Except as set forth above, Borrower shall not adjust, compromise, settle or enter into any agreement with respect to such proceedings without the prior written consent of Lender.

(o) Borrower shall not, without Lender’s prior written consent, elect to treat the Ground Lease as terminated under Section 365(h)(l) of the Bankruptcy Code. Any such election made without Lender’s prior written consent shall be void.

(p) If pursuant to Section 365(h)(2) of the Bankruptcy Code, Borrower seeks to offset against the rent reserved in the Ground Lease the amount of any damages caused by the non-performance by the Ground Lessor of any of the Ground Lessor’s obligations under the Ground Lease after the rejection by the Ground Lessor of the Ground Lease under the Bankruptcy Code, Borrower shall, prior to effecting such offset, notify Lender of its intention to do so, setting forth the amounts proposed to be so offset and the basis therefor. If Lender has failed to object as aforesaid within ten (10) days after notice from Borrower in accordance with the first sentence of this subsection (m), Borrower may proceed to effect such offset in the amounts set forth in Borrower’s notice. Neither Lender’s failure to object as aforesaid nor any objection or other communication between Lender and Borrower relating to such offset shall constitute an approval of any such offset by Lender. Borrower shall indemnify and save Lender harmless from and against any and all claims, demands, actions, suits, proceedings, damages, losses, costs and expenses of every nature whatsoever (including, without limitation, reasonable attorneys’ fees and disbursements) arising from or relating to any such offset by Borrower against the rent reserved in the Ground Lease.

(q) If any action, proceeding, motion or notice shall be commenced or filed in respect of Borrower or, during the continuance of any Event of Default, the Property in connection with any case under the Bankruptcy Code, Lender shall have the option, to the exclusion of Borrower, exercisable upon notice from Lender to Borrower, to conduct and control any such litigation with counsel of Lender’s choice. Lender may proceed in its own name or in the name of Borrower in connection with any such litigation, and Borrower agrees to execute any and all powers, authorizations, consents and other documents required by Lender in connection therewith. Borrower shall pay to Lender all costs and expenses (including, without limitation, reasonable attorneys’ fees and disbursements) paid or incurred by Lender in connection with the prosecution or conduct of any such proceedings within five (5) days after notice from Lender setting forth such costs and expenses in reasonable detail. Any such costs or expenses not paid by Borrower as aforesaid shall be secured by the Mortgage, shall be added to the Debt and shall bear interest at the Default Rate. Borrower shall not commence any action, suit, proceeding or case, or file any application or make any motion, in respect of the Ground Lease in any such case under the Bankruptcy Code without the prior written consent of Lender.

(r) Borrower shall immediately, after obtaining knowledge thereof, notify Lender of any filing by or against the Ground Lessor of a petition under the Bankruptcy Code. Borrower shall thereafter forthwith give written notice of such filing to Lender, setting forth any information available to Borrower as to the date of such filing, the court in which such petition was filed, and the relief sought therein. Borrower shall promptly deliver to Lender following receipt any and all notices, summonses, pleadings, applications and other documents received by Borrower in connection with any such petition and any proceedings relating thereto.

(s) If there shall be filed by or against Borrower a petition under the Bankruptcy Code, and Borrower, as the tenant under the Ground Lease, shall determine to reject the Ground Lease pursuant to Section 365(a) of the Bankruptcy Code, then Borrower shall give Lender not less than ten (10) days’ prior notice of the date on which Borrower shall apply to the bankruptcy court for authority to reject the Ground Lease. Lender shall have the right, but not the obligation, to serve upon Borrower within such 10-day period a notice stating that (i) Lender demands that Borrower assume and assign the Ground Lease to Lender pursuant to Section 365 of the Bankruptcy Code and (ii) Lender covenants to cure or provide adequate assurance of prompt cure of all defaults and provide adequate assurance of future performance under the Ground Lease. If Lender serves upon Borrower the notice described in the preceding sentence, Borrower shall not seek to reject the Ground Lease and shall comply with the demand provided for in clause (i) of the preceding sentence within thirty (30) days after the notice shall have been given, subject to the performance by Lender of the covenant provided for in clause (ii) of the preceding sentence.

(t) effective upon the entry of an order for relief in respect of Borrower under the Bankruptcy Code, Borrower hereby assigns and transfers to Lender a non-exclusive right to apply to the Bankruptcy Code under Section 365(d)(4) of the Bankruptcy Code for an order extending the period during which the Ground Lease may be rejected or assumed.

ARTICLE V

EVENTS OF DEFAULT

5.1 Events of Default. The occurrence of any of the following shall be an “Event of Default” hereunder:

(a) Borrower fails to punctually perform any covenant, agreement, obligation, term or condition of the Note, this Agreement, the Mortgage or any other Loan Document which requires payment of any money to Lender (including, without limitation, the failure of Borrower to repay the entire outstanding principal balance of the Note in full on the Maturity Date), and such failure continues (i) in the case of payment of the Monthly Payment Amount and the related payments to Reserves due from Borrower to Lender on a Payment Date, for a period of seven (7) days after any such Payment Date, and (ii) for all other payments (other than the payment of the entire outstanding principal balance of the Note due on the Maturity Date), for a period of ten (10) days after such payment becomes due (giving effect to any grace period set forth in the Loan Documents therefor) or, if due on demand, is demanded.

(b) Borrower fails (i) to maintain in effect at all times insurance as required by Section 4.4 hereof, or (ii) to perform any covenant, agreement, obligation, term or condition set forth in Section 4.5 hereof, or (iii) to comply with Section 4.27(b) hereof.

(c) If, after the occurrence of a Cash Management Period, Borrower gives any Tenant or other party directions that contradict any Tenant Direction Letter then required to be in effect, or deposits Rents and Profits (or otherwise causes Rents and Profits to be deposited) into any bank account other than the Clearing Account.

(d) Borrower fails to perform any other covenant, agreement, obligation, term or condition set forth herein other than those otherwise described in this Section 5.1 and, to the extent such failure or default is susceptible of being cured, the continuance of such failure or default for thirty (30) days after written notice thereof from Lender to Borrower; provided, however, that if such default is susceptible of cure but such cure cannot be accomplished with reasonable diligence within said period of time, and if Borrower commences to cure such default promptly after receipt of notice thereof from Lender (but in any event within thirty (30) days of such notice), and thereafter continuously and diligently prosecutes the curing of such default, such period of time shall be extended for such period of time as may be necessary to cure such default with reasonable diligence, but not to exceed an additional sixty (60) days.

(e) Any representation or warranty made herein, in or in connection with materials delivered to Lender regarding the Property or the Loan or any loan commitment issued by Lender relating to the Loan, or in any of the other Loan Documents to Lender, by Borrower, by any Guarantor or by any Constituent Entity of Borrower or any Guarantor, is determined by Lender to have been false or misleading in any material respect at the time made.

(f) A Transfer, except as expressly permitted by Section 4.11.

(g) A default occurs under any of the other Loan Documents which has not been cured within any applicable grace or cure period therein provided.

(h) Borrower, any Guarantor, any Constituent Entity of Borrower or any Guarantor becomes insolvent, or shall make a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors, shall file a petition in bankruptcy, shall voluntarily be adjudicated insolvent or bankrupt or shall admit in writing the inability to pay debts as they mature, shall petition or apply to any tribunal for or shall consent to or shall not contest the appointment of a receiver, trustee, custodian or similar officer for Borrower, any Guarantor, any such Constituent Entity, or for a substantial part of the assets of Borrower, any such Guarantor, any such Constituent Entity, or shall commence any case, proceeding or other action under any bankruptcy, reorganization, arrangement, readjustment or debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect.

(i) A petition is filed or any case, proceeding or other action is commenced against Borrower, against any Guarantor, against any Constituent Entity of Borrower or any Guarantor, seeking to have an order for relief entered against it as debtor or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or other relief under any law relating to bankruptcy, insolvency, arrangement, reorganization, receivership or other debtor relief under any law or statute of any jurisdiction whether now or hereafter in effect or a court of competent jurisdiction enters an order for relief against Borrower, against any Guarantor, against any Constituent Entity of Borrower or any Guarantor, as debtor, or an order, judgment or decree is entered appointing, with or without the consent of Borrower, of any Guarantor, of any Constituent Entity of Borrower or any Guarantor, a receiver, trustee, custodian or similar officer for Borrower, for any such Guarantor, for any such Constituent Entity, or for any substantial part of any of the properties of Borrower, any such Guarantor, any such Constituent Entity, and if any such event shall occur, such petition, case, proceeding, action, order, judgment or decree shall not be dismissed within sixty (60) days after being commenced.

(j) The Property or any part thereof shall be taken on execution or other process of law (other than by eminent domain) in any action against Borrower.

(k) Borrower abandons all or a portion (other than a de minimis portion) of the Property.

(l) The holder of any lien or security interest on the Property (without implying the consent of Lender to the existence or creation of any such lien or security interest), whether superior or subordinate to the Mortgage or any of the other Loan Documents, declares a default and such default is not cured within any applicable grace or cure period set forth in the applicable document or such holder institutes foreclosure or other proceedings for the enforcement of its remedies thereunder.

(m) The Property, or any part thereof, is subjected to actual or threatened waste or to removal, demolition or material alteration so that the value of the Property is materially diminished thereby, and Lender determines that it is not adequately protected from any loss, damage or risk associated therewith.

(n) Any dissolution, termination, partial or complete liquidation, merger or consolidation of Borrower, any Guarantor or any Constituent Entity of Borrower or any Guarantor, without the prior written consent of Lender.

(o) Borrower shall fail in the payment of any rent, additional rent or other charge mentioned in or made payable by the Ground Lease when said rent or other charge is due and payable.

(p) There shall occur any default by Borrower, as lessee under the Ground Lease, in the observance or performance of any term, covenant or condition of the Ground Lease on the part of Borrower, to be observed or performed, and said default is not cured within five (5) Business Days prior to the expiration of any applicable grace period therein provided, or any one or more of the events referred to in the Ground Lease shall occur which would cause the Ground Lease to terminate without notice or action by the Ground Lessor or which would entitle the Ground Lessor to terminate the Ground Lease and the term thereof by giving notice to Borrower, as tenant thereunder, of if the leasehold estate created by the Ground Lease shall be surrendered or the Ground Lease shall be terminated or cancelled for any reason or under any circumstances whatsoever, or any of the terms, covenants or conditions of the Ground Lease shall in any manner be modified, changed, supplemented, altered or amended without the consent of Lender , or Borrower shall fail or neglect to pursue diligently all actions necessary to exercise such renewal rights pursuant to the terms of the Ground Lease.

(q) Guarantor breaches any of the Guarantor Financial Covenants.

(r) Borrower shall effect a Fee Acquisition other than pursuant to Section 4.31(f).

ARTICLE VI

REMEDIES

6.1 Remedies.

(a) Acceleration. At any time during the continuance of an Event of Default (other than an Event of Default described in paragraph (h) or (i) of Section 5.1), in addition to any other rights or remedies available to it pursuant to the Loan Documents or at law or in equity, Lender may take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and in and to the Property; including declaring the Debt to be immediately due and payable (including unpaid interest), Default Rate interest, Late Payment Charges and any other amounts owing by Borrower), without notice or demand; and upon any Event of Default described in paragraph (h) or (i) of Section 5.1, the Debt (including unpaid interest, Default Rate interest, Late Payment Charges and any other amounts owing by Borrower) shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice or demand, anything contained in any Loan Document to the contrary notwithstanding.

(b) Remedies Cumulative. During the continuance of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under the Loan Documents or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Debt shall be declared, or be automatically, due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the

enforcement of its rights and remedies under any of the Loan Documents. Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth in the Loan Documents. Without limiting the generality of the foregoing, Borrower agrees that if an Event of Default is continuing, (i) to the extent permitted by applicable law, Lender is not subject to any “one action or “election of remedies law or rule, and (ii) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Property, the Mortgage has been foreclosed, the Property has been sold and/or otherwise realized upon in satisfaction of the Debt or the Debt have been paid in full. To the extent permitted by applicable law, nothing contained in any Loan Document shall be construed as requiring Lender to resort to any portion of the Property for the satisfaction of any of the Debt in preference or priority to any other portion, and Lender may seek satisfaction out of the entire Property or any part thereof, in its discretion.

(c) Severance. Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, mortgages and other security documents (and, in connection therewith, to bifurcate or otherwise modify the nature of the collateral that secures such notes) in such denominations and priorities of payment and liens as Lender shall determine in its discretion for purposes of evidencing and enforcing its rights and remedies. Borrower shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and such other documents as Lender shall request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect such severance, Borrower ratifying all that such attorney shall do by virtue thereof. The rights under this Section 6.1(c) are in addition to, and shall not limit or be deemed to limit, the rights of Lender under Sections 8.24 and 8.25 hereof.

(d) Delay. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default, or the granting of any indulgence or compromise by Lender shall impair any such remedy, right or power hereunder or be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or Event of Default shall not be construed to be a waiver of any subsequent Default or Event of Default or to impair any remedy, right or power consequent thereon. Lender shall not be required to accept the tendered cure of any Event of Default, except to the extent Lender is required to do so pursuant to Applicable Laws or to the extent Lender agrees to the contrary pursuant to a written instrument executed and delivered by Lender. Notwithstanding any other provision of this Agreement, Lender reserves the right to seek a deficiency judgment or preserve a deficiency claim in connection with the foreclosure of the Mortgage to the extent necessary to foreclose on all or any portion of the Property, the Rents and Profits, the Cash Management Account or any other collateral.

(e) Lender’s Right to Perform. If Borrower fails to perform any covenant or obligation contained herein and such failure shall continue for a period of five Business Days after Borrower’s receipt of written notice thereof from Lender, without in any way limiting Lender’s right to exercise any of its rights, powers or remedies as provided hereunder, or under any of the other Loan Documents, Lender may, but shall have no obligation to, perform, or cause performance of, such covenant or obligation, and all costs, expenses, liabilities, penalties and fines of Lender incurred or paid in connection therewith shall be payable by Borrower to Lender upon demand and if not paid shall be added to the Debt (and to the extent permitted under applicable laws, secured by the Mortgage and other Loan Documents) and shall bear interest thereafter at the Default Rate. Notwithstanding the foregoing, Lender shall have no obligation to send notice to Borrower of any such failure.

6.2 Payment of Expenses. Borrower shall pay on demand all of Lender’s expenses incurred in any efforts to enforce any terms of this Agreement, the Mortgage or any of the other Loan Documents, whether or not any lawsuit is filed and whether or not foreclosure is commenced but not completed, including, but not limited to, legal fees and disbursements, foreclosure costs and title charges, together with interest thereon from and after the date incurred by Lender until actually paid by Borrower at the Default Rate. Furthermore, Borrower shall, and does hereby, indemnify Lender for, and hold Lender harmless from, any and all losses, costs, expenses, claims, actions, demands liabilities, loss or damage which may or might be incurred by Lender under this Agreement, the Mortgage or any of the other Loan Documents or by the exercise of rights or remedies hereunder, and from any and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on Lender’s part with respect to the Property except as expressly set forth in the Loan Documents, other than those finally determined to have resulted solely from the gross negligence or willful misconduct of Lender. Borrower’s obligation pursuant to the previous sentence shall include, without limitation, payment to (or reimbursement of) any compensation payable by the holder of the Loan to any servicing agent under a Secondary Market Transaction pursuant to the Securitization Documents if such payment becomes due solely by reason of the existence and/or continuance of any Event of Default. Should Lender incur any such liability, the amount thereof, including, without limitation, costs, expenses and attorneys’ fees, together with interest thereon at the Default Rate from the date incurred by Lender until actually paid by Borrower, shall be immediately due and payable to Lender from Borrower on demand.

ARTICLE VII

RESERVED

ARTICLE VIII

MISCELLANEOUS TERMS AND CONDITIONS

8.1 Time of Essence. Time is of the essence with respect to all provisions of the Loan Documents.

8.2 Release of Mortgage. If all of the Debt be paid and all other obligations under the Loan Documents be performed (in accordance and in compliance with the terms and provisions of the Loan Documents), then and in that event only, upon delivery and recordation of a written satisfaction or reconveyance of the Mortgage (in form acceptable to Lender), all rights under the Mortgage shall terminate except for those provisions thereof which by their terms survive, and the Property shall become wholly clear of the liens, security interests, conveyances and assignments evidenced thereby, which shall be released by Lender in due form at Borrower’s cost. No release of the Mortgage or the lien of any Loan Document shall be valid unless executed by Lender.

8.3 Certain Rights of Lender. Without affecting Borrower’s liability for the payment of any of the Debt, Lender may from time to time and without notice to Borrower: (a) release any person liable for the payment of the Debt; (b) extend or modify the terms of payment of the Debt; (c) accept additional real or personal property of any kind as security or alter, substitute or release any property securing the Debt; (d) consent in writing to the making of any subdivision map or plat thereof; (e) join in granting any easement therein; or (f) join in any extension agreement of the Mortgage or any agreement subordinating the lien hereof.

8.4 Waiver of Certain Defenses. No action for the enforcement of the lien of the Mortgage or of any provision thereof shall be subject to any defense which would not be good and available to the party interposing the same in an action at law upon the Note or any of the other Loan Documents.

8.5 Notices. All notices, demands, requests or other communications to be sent by one party to the other hereunder or required by law shall be in writing and shall be deemed to have been validly given or served by delivery of the same in person to the intended addressee, or by depositing the same with Federal Express or another reputable private courier service for next business day delivery, with all charges prepaid, or by depositing the same in the United States mail, postage prepaid, certified mail, return receipt requested, in any event addressed to the intended addressee at its address set forth below or at such other address as may be designated by such party as herein provided. All notices, demands and requests shall be effective upon such personal delivery, or one (1) business day after being deposited with the private courier service, or three (3) business days after being deposited in the United States mail as required above. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given as herein required shall be deemed to be receipt of the notice, demand or request sent. By giving to the other party hereto at least fifteen (15) days’ prior written notice thereof in accordance with the provisions hereof, the parties hereto shall have the right from time to time to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America. All notices, demands, requests or other communications shall be addressed as follows:

If to Lender:

CIBC INC.

425 Lexington Avenue

4^th Floor

New York, New York 10017

Attn: Real Estate Group, Mr. Todd Roth

and to:

Cassin & Cassin LLP

711 Third Avenue, 20^th Floor

New York, New York 10017

Attention: Michael J. Hurley, Jr., Esq.

If to Borrower:

CIO 190, Limited Partnership

c/o City Office REIT, Inc.

8150 North Central Expressway, Suite 1255

Dallas, TX 75206

Attention: Merrick Egin

and to:

CIO 190, Limited Partnership

c/o City Office REIT, Inc.

Suite 2600 – 1075 West Georgia Street

Vancouver, BC V6E 3C9

8.6 Successors and Assigns. The terms, provisions, indemnities, covenants and conditions hereof shall be binding upon Borrower and the successors and assigns of Borrower, including all successors in interest of Borrower in and to all or any part of the Property, and shall inure to the benefit of Lender, its successors and assigns, and shall constitute covenants running with the land. All indemnities

in this Agreement for the benefit of Lender shall inure to the benefit of Lender and each of its directors, officers, shareholders, partners, members, managers, employees and agents (including, without limitation, any Servicers), and pledgees and participants of the Debt, and their respective successors and assigns. All references in this Agreement to Borrower or Lender shall be deemed to include each such party’s successors and assigns. If Borrower consists of more than one person or entity, each will be jointly and severally liable to perform the obligations of Borrower.

8.7 Severability. A determination that any provision of this Agreement is unenforceable or invalid shall not affect the enforceability or validity of any other provision, and any determination that the application of any provision of this Agreement to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to any other persons or circumstances.

8.8 Interpretation. Within this Agreement, words of any gender shall be held and construed to include any other gender, and words in the singular shall be held and construed to include the plural, and vice versa, unless the context otherwise requires. The headings of the sections and paragraphs of this Agreement are for convenience of reference only, are not to be considered a part hereof and shall not limit or otherwise affect any of the terms hereof. In the event of any inconsistency between the provisions hereof and the provisions in any of the other Loan Documents, it is intended that the provisions of this Agreement shall be controlling.

8.9 Waiver: Discontinuance of Proceedings. Lender may waive any single Event of Default by Borrower hereunder without waiving any other prior or subsequent Event of Default. Lender may remedy any Event of Default by Borrower hereunder without waiving the Event of Default remedied. Neither the failure by Lender to exercise, nor the delay by Lender in exercising, any right, power or remedy upon any Event of Default by Borrower hereunder shall be construed as a waiver of such Event of Default or as a waiver of the right to exercise any such right, power or remedy at a later date. No single or partial exercise by Lender of any right, power or remedy hereunder shall exhaust the same or shall preclude any other or further exercise thereof, and every such right, power or remedy hereunder may be exercised at any time and from time to time. No modification or waiver of any provision hereof nor consent to any departure by Borrower therefrom shall in any event be effective unless the same shall be in writing and signed by Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose given. No notice to nor demand on Borrower in any case shall of itself entitle Borrower to any other or further notice or demand in similar or other circumstances. Acceptance by Lender of any payment in an amount less than the amount then due on any of the Debt shall be deemed an acceptance on account only and shall not in any way affect the existence of a Default or an Event of Default hereunder. In case Lender shall have proceeded to invoke any right, remedy or recourse permitted hereunder or under the other Loan Documents and shall thereafter elect to discontinue or abandon the same for any reason, Lender shall have the unqualified right to do so and, in such an event, Borrower and Lender shall be restored to their former positions with respect to the Debt, the Loan Documents, the Property and otherwise, and the rights, remedies, recourses and powers of Lender shall continue as if the same had never been invoked.

8.10 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State in which the Real Estate is located, provided that to the extent any of such laws may now or hereafter be preempted by Federal law, in which case such Federal law shall so govern and be controlling.

8.11 Counting of Days. The term “days” when used herein shall mean calendar days. If any time period ends on a Saturday, Sunday or holiday officially recognized by the state within which the Real Estate is located, the period shall be deemed to end on the next succeeding Business Day.

8.12 Relationship of the Parties. The relationship between Borrower and Lender is that of a borrower and a lender only and neither of those parties is, nor shall it hold itself out to be, the agent, employee, joint venturer or partner of the other party.

8.13 Application of the Proceeds of the Note. To the extent that proceeds of the Note are used to pay indebtedness secured by any outstanding lien, security interest, charge or prior encumbrance against the Property, such proceeds have been advanced by Lender at Borrower’s request and Lender shall be subrogated to any and all rights, security interests and liens owned by any owner or holder of such outstanding liens, security interests, charges or encumbrances, irrespective of whether said liens, security interests, charges or encumbrances are released.

8.14 Unsecured Portion of Indebtedness. If any part of the Debt cannot be lawfully secured by the Mortgage or if any part of the Property cannot be lawfully subject to the lien and security interest thereof to the full extent of such indebtedness, then all payments made shall be applied on said indebtedness first in discharge of that portion thereof which is unsecured by the Mortgage.

8.15 Cross Default. An Event of Default shall be a default (without further rights to cure) under each of the other Loan Documents.

8.16 Exculpation. Notwithstanding anything in the Loan Documents to the contrary, but subject to the qualifications set forth in this Section 8.16, Lender agrees that (i) Borrower shall be liable upon the Debt and for the other obligations arising under the Loan Documents to the full extent (but only to the extent) of the Collateral, (ii) during the continuance of any Event of Default, any judicial or other proceedings brought by Lender against Borrower shall be limited to the preservation, enforcement and foreclosure, or any thereof, of the liens, security titles, estates, assignments, rights and security interests now or at any time hereafter securing the Debt, and no attachment, execution or other writ of process shall be sought, issued or levied upon any assets, properties or funds of Borrower other than the Collateral, except with respect to the liability described below in this Section 8.16, and (iii) in the event of a foreclosure of such liens, security titles, estates, assignments, rights or security interests securing the Debt and/or the other obligations of Borrower under the Loan Documents, no judgment for any deficiency upon the Debt shall be sought or obtained by Lender against Borrower, except with respect to the liability described below in this Section 8.16; provided, however, that, notwithstanding the foregoing provisions of this Section 8.16, Borrower shall be fully liable, and subject to legal action, for all losses, costs and expenses incurred by Lender (including, without limitation, the fees and expenses of Lender’s counsel) by reason of:

(a) Misappropriation or misapplication or conversion of any Rents and Profits, or other funds constituting proceeds of the Property (which misappropriation may include, without limitation, (i) rent and other payments received from Tenants paid more than one month in advance, and not applied in accordance with the Loan Documents or paid to Lender upon an Event of Default; and/or (ii) failure to apply Rents and Profits in accordance with the terms of this Agreement and the other Loan Documents), in each case to the full extent of the funds misappropriated or misapplied;

(b) Any security deposits not delivered to Lender upon foreclosure of the Mortgage (or similar sale pursuant to the terms thereof) or an action or conveyance in lieu thereof, except to the extent previously applied in accordance with the terms of the related Lease;

(c) Proceeds (i) paid under any insurance policies (or paid as a result of any other claim or cause of action against any person or entity) by reason of damage, loss or destruction to all or any portion of the Property, or (ii) resulting from the condemnation or other taking in lieu of condemnation of all or any portion of the Property, or any of them, in each case to the full extent of such proceeds not previously delivered to Lender, but which, under the terms of the Loan Documents, should have been delivered to Lender;

(d) Any willful misconduct by the Borrower or Guarantor, or any Person acting at the direction of either of them (including, without limitation, removal of any portion of the Property in violation of the terms of the Loan Documents);

(e) Material physical waste committed on the Property by the Borrower or Guarantor, or any Person acting at the direction of either of them;

(f) Failure to pay, or make deposits to the Impound Account on account of, any (i) Taxes or Other Charges, or other amounts which (if unpaid) could create liens on any portion of the Property which would be superior to the lien or security title granted to Lender pursuant to the Loan Documents and which accrue prior to the Lender taking title to the Property, or (ii) premiums on insurance policies required under the Loan Documents to be maintained by Borrower or with respect to the Property and which accrue prior to Lender taking title to the Property and, in each case to the extent not previously escrowed with Lender, with respect to Taxes and Insurance Premiums and then, only to the extent the Property generated, and the Borrower received sufficient revenue to escrow and/or pay, such Taxes or Insurance Premiums;

(g) Intentionally omitted;

(h) Fraud or material misrepresentation or failure to disclose a material fact by Borrower or Guarantor, or any person acting on behalf of, or at the direction of, Borrower or Guarantor;

(i) If the Ground Lease is amended, modified, or terminated without Lender’s prior written consent, or if Borrower surrenders any or all of its interest under the Ground Lease; or

(j) If the representation and warranty given under Section 4.1(rr)(6) of the Loan Agreement is determined to have been materially false, incomplete, or misleading when given.

Furthermore, notwithstanding the foregoing provisions of this Section 8.16 or anything to the contrary in the Loan Documents, the Loan shall be fully recourse to Borrower (and the exculpatory provisions above shall be of no force or effect) upon the occurrence of any of the following: (A) Borrower fails to obtain Lender’s prior written consent to any subordinate financing or other voluntary lien encumbering the Property or the ownership interests in Borrower (including with respect to a PACE Loan), if such consent is required by the Loan Documents; (B) Borrower fails to obtain Lender’s prior written consent to any Transfer, if such consent is required by Loan Documents; (C) the first Monthly Payment Amount (together with all required payments for Reserves due concurrently therewith) is not paid in full when due; (D) a bankruptcy petition is filed by, consented to, or acquiesced in by Borrower (or Borrower takes similar voluntary action under any comparable state or federal law); or (E) Borrower or Guarantor (or any Equity Holder or Affiliate of either of the foregoing) shall have made or colluded with creditors of Borrower (other than Lender) to cause an involuntary bankruptcy filing with respect to Borrower (or similar action under any comparable state or federal law).

Nothing contained in this Section 8.16 shall (1) be deemed to be a release or impairment of the Debt or the other obligations of Borrower under the Loan Documents or the lien of the Loan Documents upon the Property, or (2) preclude Lender from foreclosing the Loan Documents during the continuance of any Event of Default or from enforcing any of the other rights of Lender except as stated in this section, or (3) reduce, release, relieve, waive, limit or impair in any way whatsoever the liability of Guarantor pursuant to any guaranty or indemnity executed and delivered in connection with the Loan, or

release, relieve, reduce, waive or impair in any way whatsoever, any obligation of any party to such instrument, or (4) waive any right that Lender may have under Section 506 (a), 506 (b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Loan or to require that all Collateral shall continue to secure all of the Debt in accordance with the Loan Documents.

8.17 No Merger. It is the desire and intention of the parties hereto that the Mortgage and the lien thereof do not merge in fee simple title to the Property. It is hereby understood and agreed that should Lender acquire any additional or other interests in or to the Property or the ownership thereof, then, unless a contrary intent is manifested by Lender as evidenced by an appropriate document duly recorded, the Mortgage and the lien thereof shall not merge in such other or additional interests in or to the Property, toward the end that the Mortgage may be foreclosed as if owned by a stranger to said other or additional interests.

8.18 Lender May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting Borrower or the principals or general partners or members in Borrower, or their respective creditors or property, Lender, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of Lender allowed in such proceedings for the entire Debt at the date of the institution of such proceedings and for any additional amount which may become due and payable by Borrower hereunder after such date.

8.19 No Representation. By accepting delivery of any item required to be observed, performed or fulfilled or to be given to Lender pursuant to the Loan Documents, including, but not limited to, any officer’s certificates, balance sheet, statement of profit and loss or other financial statement, survey, appraisal or insurance policy, and/or by conducting its own underwriting, due diligence and investigations into Borrower, Guarantor, the Property and related matters, Lender shall not be deemed to have warranted, consented to, or affirmed the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance of delivery thereof shall not be or constitute any warranty, consent or affirmation with respect thereto by Lender.

8.20 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. Each Loan Document other than this Agreement may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties thereto had signed the same signature page. Any signature page of any such Loan Document may be detached from any counterpart of such Loan Document without impairing the legal effect of any signatures thereon and may be attached to another counterpart of such Loan Document identical in form thereto but having attached to it one or more additional signature pages.

8.21 Recording and Filing. Borrower will cause the Loan Documents and all amendments and supplements thereto and substitutions therefor to be recorded, filed, re-recorded and re-filed in such manner and in such places as Lender shall reasonably request, and will pay on demand all such recording, filing, re-recording and re-filing taxes, fees and other charges. Borrower shall reimburse Lender, or its Servicer, for the costs incurred in obtaining a tax service company to verify the status of payment of Taxes and Other Charges on the Property.

8.22 Entire Agreement and Modification. This Agreement and the other Loan Documents contain the entire agreements between the parties relating to the subject matter hereof and thereof and all prior agreements relative hereto and thereto which are not contained herein or therein are terminated. This Agreement and the other Loan Documents may not be amended, revised, waived, discharged, released or terminated orally but only by a written instrument or instruments executed by the party against which enforcement of the amendment, revision, waiver, discharge, release or termination is asserted. Any alleged amendment, revision, waiver, discharge, release or termination which is not so documented shall not be effective as to any party.

8.23 Secondary Market Transaction.

(a) Cooperation. Borrower acknowledges that Lender may effectuate a Secondary Market Transaction. Borrower shall cooperate in good faith with Lender in effecting any such Secondary Market Transaction and shall cooperate in good faith to implement all requirements imposed by any Investor or Rating Agency involved therein or as may be necessary for Lender to comply with or applicable law (including, without limitation, Regulation AB), including, without limitation, all structural or other changes to Borrower and/or the Debt, and modifications to any Loan Documents and/or Organizational Documents; provided, however, that Borrower shall not be required to modify any Loan Documents if such modification would (A) increase the interest rate payable under the Note, (B) shorten the period until the stated maturity of the Note, (C) modify the amortization of principal of the Note, or (D) modify any other material term of the Debt. Borrower shall provide such information and documents relating to Borrower, any Guarantor, the Property and any Tenants as Lender may reasonably request in connection with such Secondary Market Transaction. Borrower shall make available to Lender all information concerning its business and operations that Lender may reasonably request. Upon request, Borrower shall furnish to Lender from time to time such financial data and financial statements as Lender determines to be necessary, advisable or appropriate for complying with any applicable legal requirements (including those applicable to Lender or any Servicer (including, without limitation and to the extent applicable, Regulation AB)) within the timeframes necessary, advisable or appropriate in order to comply with such legal requirements.

(b) Rating Confirmation. Borrower acknowledges that, as part of the Securitization Documents, the parties to such Secondary Market Transaction may, in their sole discretion, elect to impose certain requirements as conditions precedent to certain actions by one or more of the Servicers (including, without limitation, that such Servicer obtain either or both of the approval of one or more Investors (or representatives of one or more Investors) as to certain proposed actions, and/or a Rating Confirmation). No requirement or condition imposed upon such Servicer pursuant to such Securitization Documents as a condition precedent to the granting or denying of any consent or approval, or the taking or refusal to take of any action, pursuant to this Agreement (except only for any action required of Lender hereunder) shall give rise to any claim or cause of action by Borrower against Lender, or give Borrower any defense for failure to perform its obligations under the Loan Documents. Borrower further acknowledges that the cost of any Rating Confirmation required by the Securitization Documents in connection with any matter requiring the approval or consent of Lender shall be payable by Borrower.

(c) Disclosure; Indemnification. Lender shall be permitted to share all information provided in connection with the Loan with the Investors, Rating Agencies, investment banking firms, accounting firms, law firms and other third-party advisory firms involved with the Loan Documents or the applicable Secondary Market Transaction. It is understood that the information provided to Lender in connection with the Loan may ultimately be incorporated into the offering documents for the Secondary Market Transaction and thus potential Investors may also see some or all of the information with respect to the Loan, the Property, Borrower and the Equity Holders. Borrower irrevocably waives any and all rights it may have under any applicable laws (including, without limitation, any right of privacy) to

prohibit such disclosure. Lender and all of the aforesaid third-party advisors and professional firms shall be entitled to rely on the information supplied by, or on behalf of, Borrower. Borrower hereby indemnifies Lender as to any losses, claims, damages or liabilities that arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the information provided by or on behalf of Borrower, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated in such information, or necessary in order to make the statements in such information, or in light of the circumstances under which they were made, not misleading. Lender may publicize the existence of the Loan in connection with its marketing for a Secondary Market Transaction or otherwise as part of its business development.

8.24 New Mezzanine Loan. Lender, without in any way limiting Lender’s other rights hereunder, in its sole and absolute discretion, shall have the right at any time to require Borrower to restructure a portion of the Loan into a mezzanine loan (the “New Mezzanine Loan”) to the owners of the direct equity interests in Borrower, secured by a pledge of such direct equity interests, the establishment of different interest rates and debt service payments for the Loan and the New Mezzanine Loan and the payment of the Loan and the New Mezzanine Loan in such order of priority as may be designated by Lender; provided, that (a) (i) the total amounts of the Loan and the New Mezzanine Loan shall equal the amount of the Loan immediately prior to the restructuring, (ii) the weighted average interest rate of the Loan and the New Mezzanine Loan, shall on the date created equal the interest rate which was applicable to the Loan immediately prior to the restructuring and (iii) the debt service payments on the Loan and the New Mezzanine Loan shall on the date created equal the debt service payment which was due under the Loan immediately prior to the restructuring; provided that any such restructuring carried out after the closing of the Loan shall be at no material cost to Borrower, and provided, further, that if Borrower is not an SPE-Qualifying LLC, no SPE Component Entity shall be the borrower of (and the ownership interests of any SPE Component Entity shall not be collateral for) such New Mezzanine Loan, but appropriate structural changes shall be made to result in comparable effect. Borrower shall cooperate with all reasonable requests of Lender in order to restructure the Loan and create the New Mezzanine Loan and shall (A) execute and deliver such documents including, without limitation, in the case of the New Mezzanine Loan, a mezzanine note, a mezzanine loan agreement, a pledge and security agreement and a mezzanine deposit account agreement, (B) cause Borrower’s counsel to deliver such legal opinions and (C) create such bankruptcy remote borrower under the New Mezzanine Loan as, in the case of each of (A), (B) and (C) above, shall be reasonably required by Lender and required by any Rating Agency in connection therewith, all in form and substance reasonably satisfactory to Lender and satisfactory to any such Rating Agency, including the severance of this Agreement, the Mortgage and other Loan Documents if requested. In the event Borrower fails to execute and deliver such documents to Lender within ten (10) Business Days following such request by Lender, Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect such transactions, Borrower ratifying all that such attorney shall do by virtue thereof. It shall be an Event of Default if Borrower fails to comply with any of the terms, covenants or conditions of this Section 8.24 after the expiration of ten (10) Business Days after notice thereof.

8.25 Component Notes. Lender, without in any way limiting Lender’s other rights hereunder, in its sole and absolute discretion, shall have the right at any time to require Borrower to execute and deliver “component” notes (which may include senior and junior notes), which notes may be paid in such order of priority as may be designated by Lender, provided that (a) the aggregate principal amount of such “component” notes shall equal the outstanding principal balance of the Loan immediately prior to the

creation of such “component” notes, (b) the weighted average interest rate of all such “component” notes shall on the date created equal the interest rate which was applicable to the Loan immediately prior to the creation of such “component” notes, (c) the debt service payments on all such “component” notes shall on the date created equal the debt service payment which was due under the Loan immediately prior to the creation of such component notes and (d) the other terms and provisions of each of the “component” notes shall be identical in substance and substantially similar in form to the Loan Documents. Borrower shall cooperate with all reasonable requests of Lender in order to establish the “component” notes and shall execute and deliver such documents as shall reasonably be required by Lender in connection therewith, all in form and substance reasonably satisfactory to Lender, including, without limitation, the severance of security documents if requested. It shall be an Event of Default if Borrower fails to comply with any of the terms, covenants or conditions of this Section 8.25 after the expiration of ten (10) Business Days after notice thereof.

8.26 Updated Appraisals. Lender shall have the right to cause to be prepared, from time to time, at Borrower’s expense, a new or updated appraisal of the Property prepared by an M.A.I. appraiser selected by Lender; provided that absent the existence of an Event of Default, Borrower shall not be required to pay for the cost of such new or updated appraisal. In connection with any new or updated appraisal of the Property requested by Lender, Borrower shall cooperate with Lender and the appraiser in connection therewith, and shall provide to the appraiser such information as the appraiser shall request in order to prepare such new or updated appraisal.

8.27 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.

(a) BORROWER, TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (i) SUBMITS TO PERSONAL JURISDICTION IN THE STATE IN WHICH THE REAL ESTATE IS LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THE NOTE, THIS AGREEMENT OR ANY OTHER OF THE LOAN DOCUMENTS, (ii) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION OVER THE COUNTY IN WHICH THE REAL ESTATE IS LOCATED, (iii) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (iv) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). BORROWER FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 8.5, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW).

(b) LENDER AND BORROWER, TO THE FULL EXTENT PERMITTED BY LAW, EACH HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THE DEBT OR ANY CONDUCT, ACT OR OMISSION OF LENDER OR BORROWER, OR ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

8.28 State-Specific Provisions. The following provisions shall govern and control in the event of a conflict with any other provision of this Agreement:

(a) SPECIFIC NOTICE. IT IS EXPRESSLY AGREED AND UNDERSTOOD THAT THE INDEMNIFICATION PROVISIONS SET FORTH IN THIS AGREEMENT OBLIGATE BORROWER TO INDEMNIFY LENDER FROM ALL CLAIMS OR LOSSES INCURRED OR SUFFERED BY LENDER, INCLUDING, WITHOUT LIMITATION, THOSE RESULTING FROM THE JOINT, CONCURRENT OR COMPARATIVE NEGLIGENCE OF LENDER, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SUCH INDEMNIFICATION PROVISIONS.

(b) Interest Calculation. The following language is hereby added to the end of Section 2.2(b) of this Agreement:

“If calculating interest based on a 360 day year would result in a usurious rate, interest shall be calculated on the per annum basis of a year of 365 or 366 days, as the case may be.”

(i) The definition of “Interest Rate” under Section 1.1 of this Agreement is hereby deleted in its entirety and the following substituted therefor:

“Interest Rate” shall mean a rate equal to the lesser of 4.79% per annum or the Highest Lawful Rate.”

(ii) The following definition is added to Section 1.1:

“Highest Lawful Rate” as used herein shall mean, with respect to the Lender, the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Debt under laws applicable to the Lender that are presently in effect or, to the extent allowed by law, under such applicable laws that may hereafter be in effect and that allow a higher maximum nonusurious interest rate than applicable laws now allow.

(iii) The definition of “Environmental Laws” as used in this Agreement and the other Loan Documents shall include, without limitation, the Texas Solid Waste Disposal Act (V.T.C.A. Health and Safety Code §361.001 et. Seq.), the Texas Water Code (V.T.C.A. Water Code §§26.001-26.407) and Risk Reduction Standard No. 1 (30 Tex. Adm. Code §335.554).

(d) Replacement of the Term Maximum Legal Rate for Highest Lawful Rate.

(i) The definition of “Maximum Legal Rate” is hereby deleted and the phrase “Maximum Legal Rate” is hereby deleted wherever used in any of the Loan Documents and the phrase “Highest Lawful Rate” substituted therefore.

(e) Compliance with Usury Laws.

It is the intention of the parties hereto to conform strictly to applicable usury laws. Accordingly, if the transactions contemplated hereby would be usurious under any such applicable law, then, and in that event, notwithstanding anything to the contrary in this Agreement, or in any other instrument or agreement entered into in connection with or as security for the Loan, it is agreed as follows:

(i) the aggregate of all consideration that constitutes interest under any such applicable law and that is contracted for, charged or received under this Agreement and the Note, or under any of the aforesaid instruments or agreements or otherwise in connection with this Agreement and the Note (whether designated as interest, fees, late charges, payments or otherwise) shall under no circumstances exceed the maximum amount of interest permitted by any such applicable law and any excess shall be cancelled automatically and, if theretofore paid, shall be credited on the Note by Lender (or, if the Note has been paid in full, refunded to Borrower);

(ii) in the event that the Maturity Date is accelerated by reason of an Event of Default under this Agreement, or otherwise, then such consideration that constitutes interest may never include more than the maximum amount permitted by any such applicable law, and excess interest, if any, provided for in this Agreement and the Note, or otherwise, shall be canceled automatically as of the date of such acceleration or prepayment, and, if theretofore paid, shall be credited on the Note (or, if the Note has been paid in full, refunded to Borrower);

(iii) to the extent that Lender is relying on Chapter 303, as amended, of the Texas Finance Code to determine the maximum amount of interest permitted by applicable law on the principal of the Note, Lender will utilize the weekly rate ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent United States federal law permits a greater amount of Interest than is permitted under Texas law, Lender will rely on United States federal law instead of such Chapter 303, as amended, for the purpose of determining the maximum amount permitted by applicable law. Additionally, to the extent permitted by applicable law now or hereafter in effect, Lender may, at its option and from time to time, implement any other method of computing the maximum lawful rate under such Chapter 303, as amended, or under other applicable law by giving notice, if required, to maker as provided by applicable law now or hereafter in effect. In no event shall the provisions of chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to the indebtedness evidenced by the Loan Documents; and

(iv) all sums paid or agreed to be paid to Lender for the use, forbearance or detention of the indebtedness evidenced hereby shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the rate or amount of interest on account of any such indebtedness does not exceed the applicable usury ceiling.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the day and year first above written.


BORROWER:

CIO 190, LIMITED PARTNERSHIP, a Delaware limited partnership

By:		CIO 190 GP, LLC,
		a Delaware limited liability company,
		its General Partner

		By:/s/ James Farrar
		Name: James Farrar
		Title: President

[ADDITIONAL SIGNATURE PAGE FOLLOWS]

The undersigned is an “SPE Component Entity” with respect to Borrower and, as such, hereby (a) represents and warrants to Lender that: (i) its sole asset is its ownership interest in Borrower, and such ownership interest represents not less than one-half of one percent (0.5%) direct ownership in Borrower; (ii) it has at least one Independent Director (namely, Mr. Steven P. Zimmer, as of the date hereof); (iii) it includes, in its Organizational Documents, provisions substantially similar to clauses (i) through (v), inclusive, of Section 4.27(c) of this Agreement; (iv) it includes, in its Organizational Documents, provisions substantially similar to Section 4.27(d), (g), and (i) of this Agreement; (v) it has no debt (whether secured or unsecured, direct or contingent, including pursuant to any guaranty), and (b) covenants to Lender that, (i) it shall have, at all times, at least one Independent Director, and (ii) for so long as Borrower shall remain obligated for payment of the Loan, it shall not take any actions that would cause itself or Borrower to violate the provisions of Section 4.27 of this Agreement.


CIO 190 GP, LLC,
a Delaware limited liability company

By: /s/ James Farrar
Name: James Farrar
Title: President

[ADDITIONAL SIGNATURE PAGE FOLLOWS]


LENDER:

CIBC INC., a
Delaware corporation

By:/s/ Todd Roth
Name: Todd Roth
Title: Managing Director

Exhibit 10.3

LOAN AGREEMENT

Dated as of September 3, 2015

Between

CIO INTELLICENTER, LIMITED PARTNERSHIP,

as Borrower

and

KEYBANK NATIONAL ASSOCIATION,

as Lender

Loan No. 10099360

TABLE OF CONTENTS


		Page

ARTICLE I - DEFINITIONS; PRINCIPLES OF CONSTRUCTION			1
Section 1.1	Definitions		1
Section 1.2	Principles of Construction		27

ARTICLE II - GENERAL TERMS			28
Section 2.1	Loan Commitment; Disbursement to Borrower		28
2.1.1	Agreement to Lend and Borrow		28
2.1.2	Single Disbursement to Borrower		28
2.1.3	The Note, Security Instrument and Loan Documents		29
2.1.4	Use of Proceeds		29
Section 2.2	Interest Rate		29
2.2.1	Interest Rate		29
2.2.2	Interest Calculation		29
2.2.3	Default Rate		29
2.2.4	Usury Savings		30
Section 2.3	Loan Payment		30
Section 2.4	Prepayments		30
Section 2.5	Intentionally Deleted		30
Section 2.6	Release of Property		30
2.6.1	Release of Property		30
Section 2.7	Clearing Account/Cash Management		31
2.7.1	Clearing Account		31
2.7.2	Cash Management Account		32
2.7.3	Payments Received under the Cash Management Agreement		33

ARTICLE III - CONDITIONS PRECEDENT			33
Section 3.1	Conditions Precedent to Closing		33

ARTICLE IV - REPRESENTATIONS AND WARRANTIES			34
Section 4.1	Borrower Representations		34
4.1.1	Organization		34
4.1.2	Proceedings		34
4.1.3	No Conflicts		34
4.1.4	Litigation		34
4.1.5	Agreements		35
4.1.6	Title		35
4.1.7	Solvency		35
4.1.8	Full and Accurate Disclosure		36
4.1.9	No Plan Assets		36
4.1.10	Compliance		36
4.1.11	Financial Information		37
4.1.12	Condemnation		37
4.1.13	Federal Reserve Regulations		37
4.1.14	Utilities and Public Access		37


4.1.15	Not a Foreign Person	37
4.1.16	Separate Lots	37
4.1.17	Assessments	38
4.1.18	Enforceability	38
4.1.19	No Prior Assignment	38
4.1.20	Insurance	38
4.1.21	Use of Property	38
4.1.22	Certificate of Occupancy; Licenses	38
4.1.23	Flood Zone	38
4.1.24	Physical Condition	38
4.1.25	Boundaries	39
4.1.26	Leases	39
4.1.27	Survey	39
4.1.28	Inventory	40
4.1.29	Filing and Recording Taxes	40
4.1.30	Special Purpose Entity/Separateness	40
4.1.31	Management Agreement	40
4.1.32	Illegal Activity	41
4.1.33	No Change in Facts or Circumstances; Disclosure	41
4.1.34	Investment Company Act	41
4.1.35	Embargoed Person	41
4.1.36	Principal Place of Business; State of Organization	41
4.1.37	Environmental Representations and Warranties	41
4.1.38	Cash Management Account	42
Section 4.2	Survival of Representations	43

ARTICLE V - BORROWER COVENANTS		43
Section 5.1	Affirmative Covenants	43
5.1.1	Existence; Compliance with Legal Requirements	43
5.1.2	Taxes and Other Charges	44
5.1.3	Litigation	45
5.1.4	Access to Property	45
5.1.5	Notice of Default	45
5.1.6	Cooperate in Legal Proceedings	45
5.1.7	Perform Loan Documents	46
5.1.8	Award and Insurance Benefits	46
5.1.9	Further Assurances	46
5.1.10	Principal Place of Business, State of Organization	46
5.1.11	Financial Reporting	47
5.1.12	Business and Operations	49
5.1.13	Title to the Property	50
5.1.14	Costs of Enforcement	50
5.1.15	Estoppel Statement	50
5.1.16	Loan Proceeds	51
5.1.17	Intentionally Omitted	51
5.1.18	Confirmation of Representations	51
5.1.19	Environmental Covenants	51


5.1.20	Leasing Matters	53
5.1.21	Alterations	55
5.1.22	Operation of Property	56
5.1.23	Embargoed Person	56
Section 5.2	Negative Covenants	57
5.2.1	Operation of Property	57
5.2.2	Liens	57
5.2.3	Dissolution	57
5.2.4	Change In Business	58
5.2.5	Debt Cancellation	58
5.2.6	Zoning	58
5.2.7	No Joint Assessment	58
5.2.8	Intentionally Omitted	58
5.2.9	ERISA	58
5.2.10	Transfers	59

ARTICLE VI - INSURANCE; CASUALTY; CONDEMNATION		65
Section 6.1	Insurance	65
Section 6.2	Casualty	69
Section 6.3	Condemnation	69
Section 6.4	Restoration	70

ARTICLE VII - RESERVE FUNDS		74
Section 7.1	Intentionally Omitted	74
Section 7.2	Tax and Insurance Escrow Fund	74
Section 7.3	Replacements and Replacement Reserve	75
7.3.1	Replacement Reserve Fund	75
7.3.2	Disbursements from Replacement Reserve Account	75
7.3.3	Performance of Replacements	76
7.3.4	Failure to Make Replacements	79
7.3.5	Balance in the Replacement Reserve Account	79
Section 7.4	Rollover Reserve	79
7.4.1	Deposits to Rollover Reserve Fund	79
7.4.2	Withdrawal of Rollover Reserve Funds	80
Section 7.5	Excess Cash Flow Reserve Fund	80
7.5.1	Deposits to Excess Cash Flow Reserve Account	80
7.5.2	Release of Excess Cash Flow Reserve Funds	80
Section 7.6	Reserve Funds, Generally	80
Section 7.4	Morgan Stanley Reserve	81
7.7.1	Deposits to Morgan Stanley Reserve Fund	81
7.7.2	Release of Morgan Stanley Reserve Funds	82
Section 7.8	Major Tenant Rollover Reserve	82
7.8.1	Deposits to Major Tenant Rollover Reserve Fund	82
7.7.2	Withdrawal of Major Tenant Rollover Reserve Fund	83

ARTICLE VIII - DEFAULTS		83
Section 8.1	Event of Default	83
Section 8.2	Remedies	86
Section 8.3	Remedies Cumulative; Waivers	87

iii



ARTICLE IX - SPECIAL PROVISIONS		88
Section 9.1	Securitization	88
9.1.1	Sale of Notes and Securitization	88
9.1.2	Securitization Costs	89
Section 9.2	Right To Release Information	89
Section 9.3	Exculpation	90
Section 9.4	Matters Concerning Manager	92
Section 9.5	Servicer	93

ARTICLE X - MISCELLANEOUS		93
Section 10.1	Survival	93
Section 10.2	Lender’s Discretion	93
Section 10.3	Governing Law	94
Section 10.4	Modification, Waiver in Writing	95
Section 10.5	Delay Not a Waiver	95
Section 10.6	Notices	95
Section 10.7	Intentionally Omitted	96
Section 10.8	Headings	97
Section 10.9	Severability	97
Section 10.10	Preferences	97
Section 10.11	Waiver of Notice	97
Section 10.14	Schedules Incorporated	99
Section 10.15	Offsets, Counterclaims and Defenses	99
Section 10.16	No Joint Venture or Partnership; No Third Party Beneficiaries	99
Section 10.17	Publicity	99
Section 10.18	Waiver of Marshalling of Assets	100
Section 10.19	Waiver of Counterclaim	100
Section 10.20	Conflict; Construction of Documents; Reliance	100
Section 10.21	Brokers and Financial Advisors	100
Section 10.22	Prior Agreements	101
Section 10.23	Liability	101
Section 10.24	Certain Additional Rights of Lender (VCOC)	101
Section 10.25	OFAC	102
Section 10.26	Duplicate Originals; Counterparts	102

ARTICLE XI – LOCAL LAW PROVISIONS		102
Section 11.1	Inconsistencies	102
Section 11.2	Trial by Jury	102

SCHEDULES


Schedule I	–	Rent Roll

Schedule II	–	Intentionally Omitted

Schedule III	–	Organizational Chart of Borrower

LOAN AGREEMENT

THIS LOAN AGREEMENT is made as of September 3, 2015 (this “Agreement”), between KEYBANK NATIONAL ASSOCIATION, a national banking association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 6211 (“Lender”) and CIO INTELLICENTER, LIMITED PARTNERSHIP, a Delaware limited partnership, having its principal place of business at c/o City Office REIT, Inc., 1075 West Georgia Street, Suite 2600, Vancouver, British Columbia V6E 3C9, Canada (“Borrower”).

RECITALS:

A. Borrower desires to obtain the Loan (as hereinafter defined) from Lender.

B. Lender is willing to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter defined).

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

ARTICLE I - DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:

“Accrual Period” means the period commencing on and including the first (1st) day of each calendar month during the term of the Loan and ending on and including the final calendar date of such calendar month; however, the initial Accrual Period shall commence on and include the Closing Date and shall end on and include the final calendar date of the calendar month in which the Closing Date occurs.

“Action” has the meaning set forth in Section 10.3 hereof.

“Additional Insolvency Opinion” means any subsequent Insolvency Opinion.

“Additional Permitted Transfer” has the meaning set forth in Section 5.2.10(f) hereof.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.

“Affiliated Party Transfer” has the meaning set forth in Section 5.2.10(g) hereof.

“Affiliated Manager” means any Manager in which Borrower, Principal, or Guarantor has, directly or indirectly, any legal, beneficial or economic interest.

“Agent” means KeyBank National Association, or any successor Eligible Institution acting as Agent under the Cash Management Agreement.

“Amortizing Monthly Payment” has the meaning set forth in the Loan Terms Table of the Note.

“Amortizing Payment Date” has the meaning set forth in the Loan Terms Table of the Note.

“Annual Budget” means an operating budget, including all planned Capital Expenditures, for the Property prepared by Borrower in accordance with Section 5.1.11(g) hereof for the applicable Fiscal Year or other period.

“Approved Annual Budget” has the meaning set forth in Section 5.1.11(g) hereof.

“Assignment of Management Agreement” means that certain Assignment of Management Agreement and Subordination of Management Fees, dated as of the date hereof, among Lender, Borrower and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Availability Threshold” means the greater of $30,000.00 or 1% of the initial principal balance of the Loan.

“Award” means any compensation paid by any Governmental Authority in connection with a Condemnation.

“Bankruptcy Action” means with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law that is not dismissed within ninety (90) days of filing; (c) such Person filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (d) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of the Property; (e) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due.

“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. §101, et seq., as the same may be amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights or any other Federal or state bankruptcy or insolvency law.

“Borrower” has the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns.

“Business Day” means a day upon which commercial banks are not authorized or required by law to close in the city designated from time to time as the place for receipt of payments.

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

“Cash Management Account” has the meaning set forth in Section 2.7.2 hereof.

“Cash Management Agreement” means that certain Cash Management Agreement, dated as of the date hereof, by and among Borrower, Lender and Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Cash Sweep Event” means the occurrence of: (a) an Event of Default; (b) any Bankruptcy Action of Borrower or Manager; (c) a DSCR Trigger Event or (d) a Major Tenant Trigger Event.

“Cash Sweep Event Cure” means (a) if the Cash Sweep Event is caused solely by the occurrence of a DSCR Trigger Event, the achievement of a Debt Service Coverage Ratio of 1.25 to 1.00 or greater for two (2) consecutive quarters based upon the trailing three (3) month period immediately preceding each date of determination, (b) if the Cash Sweep Event is caused by an Event of Default, the cure of such Event of Default in accordance with the terms and conditions of the Loan Documents, (c) if the Cash Sweep Event is caused by a Bankruptcy Action of Manager, if Borrower replaces the Manager with a Qualified Manager under a Replacement Management Agreement within sixty (60) days of such Bankruptcy Action or (d) if the Cash Sweep Event is caused by a Major Tenant Trigger Event, the completion of the applicable Major Tenant Cure Event; provided, however, that, such Cash Sweep Event Cure set forth in this definition shall be subject to the following conditions, (i) no Event of Default shall have occurred and be continuing under this Agreement or any of the other Loan Documents at the time of such Cash Sweep Event Cure, (ii) a Cash Sweep Event Cure may occur no more than a total of four (4) times in the aggregate during the term of the Loan, and (iii) Borrower shall have paid all of Lender’s reasonable and documented out-of-pocket expenses incurred in connection with such Cash Sweep Event Cure including, reasonable attorney’s fees and expenses. Notwithstanding any provision in this Agreement to the contrary, in no event shall Borrower have the right to cure any Cash Sweep Event caused by a Bankruptcy Action of Borrower.

“Cash Sweep Period” means each period commencing on the occurrence of a Cash Sweep Event and continuing until the earlier of (a) the date of the related Cash Sweep Event Cure, or (b) until payment in full of all principal and interest on the Loan and all other amounts payable under the Loan Documents in accordance with the terms and provisions of the Loan Documents.

“Casualty” has the meaning set forth in Section 6.2 hereof.

“Casualty Consultant” has the meaning set forth in Section 6.4(b)(iii) hereof.

“Casualty Retainage” has the meaning set forth in Section 6.4(b)(iv) hereof.

“Clearing Account” has the meaning set forth in Section 2.7.1 hereof.

“Clearing Account Agreement” means that certain Clearing Account - Deposit Account Control Agreement dated the date hereof among Borrower, Lender and Clearing Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, relating to funds deposited in the Clearing Account.

“Clearing Bank” means the clearing bank which establishes, maintains and holds the Clearing Account, which shall be an Eligible Institution acceptable to Lender in its reasonable discretion.

“Closing Date” means the date of the funding of the Loan.

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

“Condemnation” means a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of the Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting the Property or any part thereof.

“Condemnation Proceeds” has the meaning set forth in Section 6.4(b) hereof.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. “Controlled” and “Controlling” have correlative meanings.

“Current Owner” has the meaning set forth in Section 5.2.10(f) hereof.

“Debt” means the Outstanding Principal Balance of the Loan set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums (including any Prepayment Consideration (as defined in the Note)) due to Lender in respect of the Loan under the Note, this Agreement, the Security Instrument or any other Loan Document.

“Debt Service” means, with respect to any particular period of time, the scheduled principal and interest payments due under this Agreement and the Note.

“Debt Service Coverage Ratio” means a ratio for the applicable period in which:

(a) the numerator is the Net Operating Income (excluding interest on credit accounts and using annualized operating expenses for any recurring expenses not paid monthly (e.g., Taxes and Insurance Premiums)) for such period as set forth in the financial statements required hereunder, without deduction for (i) actual management fees incurred in connection with the operation of the Property, or (ii) amounts paid to the Reserve Funds, less (A) management fees equal to the greater of (1) assumed management fees of 2% of Gross Income from Operations and (2) the actual management fees incurred, and (B) annual Replacement Reserve Fund contributions equal to $0.20 per square foot of gross leasable area at the Property, and (C) annual Rollover Reserve Fund contributions equal to $0.34 per square foot of gross leasable area at the Property; and

(b) the denominator is an amount equal to the Amortizing Monthly Payment multiplied by the aggregate number of Payment Dates occurring during such period.

“Default” means the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.

“Default Rate” means, with respect to the Loan, a rate per annum equal to the lesser of (a) the Maximum Legal Rate or (b) four percent (4%) above the Interest Rate.

“Disclosure Documents” means, collectively and as applicable, any offering circular, prospectus, prospectus supplement, private placement memorandum or other offering document, in each case, in connection with a Securitization.

“DSCR Trigger Event” means, that as of the date of determination, the Debt Service Coverage Ratio based on the trailing three (3) month period immediately preceding the date of such determination is less than 1.20 to 1.00.

“Eligible Account” means a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000.00 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

“Eligible Institution” means KeyBank National Association or a depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of accounts in which funds are held for more than thirty (30) days, the long-term unsecured debt obligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” by Moody’s).

“Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including The USA PATRIOT Act (including the anti terrorism provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder including those related to Specially Designated Nationals and Specially Designated Global Terrorists, with the result that the investment in Borrower, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan made by the Lender is in violation of law.

“Environmental Indemnity” means that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

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

“Environmental Liens” has the meaning set forth in Section 5.1.19 hereof.

“Environmental Report” has the meaning set forth in Section 4.1.37 hereof.

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

“Event of Default” has the meaning set forth in Section 8.1(a) hereof.

“Excess Cash Flow” has the meaning set forth in the Cash Management Agreement.

“Excess Cash Flow Reserve Account” has the meaning set forth in Section 7.5 hereof.

“Excess Cash Flow Reserve Fund” has the meaning set forth in Section 7.5 hereof.

“Extraordinary Expense” has the meaning set forth in Section 5.1.11(h) hereof.

“Fiscal Year” means each twelve (12) month period commencing on January 1 and ending on December 31 during each year of the term of the Loan.

“Fitch” means Fitch, Inc.

“Foreclosure Sale” has the meaning set forth in Section 9(c) of the Note.

“GAAP” means generally accepted accounting principles in the United States of America as of the date of the applicable financial report.

“Governing State” has the meaning set forth is Section 10.3 hereof.

“Governmental Authority” means any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental unit (foreign, federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.

“Gross Income from Operations” means, during any period, all income as reported on the financial statements delivered by Borrower in accordance with this Agreement, computed in accordance with GAAP, derived from the ownership and operation of the Property from whatever source during such period, including, without limitation, (i) Rents from Tenants that are in occupancy, open for business and paying full contractual rent without right of offset or credit, (ii) utility charges, (iii) escalations, (iv) forfeited security deposits, (v) interest on credit accounts, (vi) service fees or charges, (vii) license fees, (viii) parking fees, (ix) rent concessions or credits, (x) income from vending machines, (xi) business interruption or other loss of income or rental insurance proceeds, (xii) other required pass-throughs and (xiii) interest on Reserve Funds, if any, but excluding (i) Rents from month-to-month Tenants or Tenants that are included in any Bankruptcy Action (unless and until the underlying lease is affirmed by the Tenant or trustee, as applicable), (ii) sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, (iii) refunds and uncollectible accounts, (iv) sales of furniture, fixtures and equipment, (v) Insurance Proceeds (other than business interruption or other loss of income or rental insurance), (vi) Awards, (vii) unforfeited security deposits, (viii) utility and other similar deposits and (ix) any disbursements to Borrower from the Reserve Funds, if any. Gross income shall not be diminished as a result of the Security Instrument or the creation of any intervening estate or interest in the Property or any part thereof.

“Guarantor” means City Office REIT Operating Partnership, L.P., a Maryland limited partnership.

“Guarantor Interests” has the meaning set forth in Section 5.2.10(i) hereof.

“Guarantor Transfer” has the meaning set forth in Section 5.2.10(i) hereof.

“Guaranty” means that certain Guaranty Agreement, dated as of the date hereof, executed and delivered by Guarantor in connection with the Loan to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Hazardous Substances” means any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally occurring or otherwise), but excluding substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for the purpose of cleaning or other maintenance or operations (including, without limitation, operations by any Tenant) and otherwise in compliance with all Environmental Laws.

“Immediate Family Member” has the meaning set forth in Section 5.2.10(f).

“Improvements” has the meaning set forth in the granting clause of the Security Instrument.

“Indebtedness” of a Person, at a particular date, means the sum (without duplication) at such date of (a) all indebtedness or liability of such Person (including amounts for borrowed money and indebtedness in the form of mezzanine debt or preferred equity); (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss; and (g) obligations secured by any Liens, whether or not the obligations have been assumed (other than the Permitted Encumbrances).

“Indemnified Liabilities” has the meaning set forth in Section 10.13(b) hereof.

“Indemnified Parties” means Lender, any Affiliate of Lender that has filed any registration statement relating to the Securitization or has acted as the sponsor or depositor in connection with the Securitization, any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in the Securitization, any other co-underwriters, co-placement agents or co-initial purchasers of Securities issued in the Securitization, and each of their respective officers, directors, partners, employees, representatives, agents and Affiliates and each Person or entity who Controls any such Person within the meaning of Section 15 of the Securities Act of 1933 as amended or Section 20 of the Security Exchange Act of 1934 as amended, any Person who is or will have been involved in the origination of the Loan, any Person who is or will have been involved in the servicing of the Loan secured hereby, any Person in whose name the encumbrance created by the Security Instrument is or will have been recorded, any Person who may hold or acquire or will have held a full or partial interest in the Loan secured hereby (including investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan secured hereby for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing

(including any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan, whether during the term of the Loan or as a part of or following a foreclosure of the Loan and including any successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s assets and business).

“Independent Director” means a natural Person who (a) is not at the time of initial appointment, or at any time while serving in such capacity, and is not, and has never been, and shall not while serving as Independent Director be: (i) a stockholder, director (with the exception of serving as the Independent Director of Borrower), officer, employee, partner, member (other than a “special member” or “springing member”), manager, attorney or counsel of Borrower, equity owners of Borrower or Guarantor or any Affiliate of Borrower or Guarantor; (ii) a customer, supplier or other person who derives any of its purchases or revenues from its activities with Borrower or Guarantor, equity owners of Borrower or Guarantor or any Affiliate of Borrower or Guarantor; (iii) a Person Controlling or under common Control with any such stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other Person; or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other Person and (b) has (i) prior experience as an independent director or independent manager for a corporation, a trust or limited liability company whose charter documents required the unanimous consent of all independent directors or independent managers thereof before such corporation, trust or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more nationally-recognized companies that provides, inter alia, professional independent directors or independent managers in the ordinary course of their respective business to issuers of securitization or structured finance instruments, agreements or securities or lenders originating commercial real estate loans for inclusion in securitization or structured finance instruments, agreements or securities (a “Professional Independent Director”) and is at all times during his or her service as an Independent Director of Borrower an employee of such a company or companies. A natural Person who satisfies the foregoing definition except for being (or having been) the independent director or independent manager of a “special purpose entity” affiliated with Borrower (provided such affiliate does not or did not own a direct or indirect equity interest in an Borrower) shall not be disqualified from serving as an Independent Director, provided that such natural Person satisfies all other criteria set forth above and that the fees such individual earns from serving as independent director or independent manager of affiliates of Borrower or in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year. A natural Person who satisfies the foregoing definition other than subparagraph (a)(ii) shall not be disqualified from serving as an Independent Director of Borrower if such individual is a Professional Independent Director and such individual complies with the requirements of the previous sentence.

“Initial Interest Payment Per Diem” has the meaning set forth in the Loan Terms Table of the Note.

“Insolvency Opinion” means that certain non-consolidation opinion letter dated the date hereof delivered by Gardere Wynne Sewell LLP in connection with the Loan.

“Institutional Controls” means any legal or physical restrictions or limitations on the use of, or access to, the Property to eliminate or minimize potential exposures to any Hazardous Substance, to prevent activities that could interfere with the effectiveness of any Remediation, or to ensure maintenance of a level of risk to human health or the environment, including physical modifications to the Property such as slurry walls, capping, hydraulic controls for ground water, or point of use water treatment, restrictive covenants, environmental protection easements, or property use limitations.

“Insurance Premiums” has the meaning set forth in Section 6.1(b) hereof.

“Insurance Proceeds” has the meaning set forth in Section 6.4(b) hereof.

“Interest Only Monthly Payment” has the meaning set forth in the Loan Terms Table of the Note.

“Interest Only Payment Date” has the meaning set forth in the Loan Terms Table of the Note.

“Interest Rate” means a rate of four and sixty five hundredths percent (4.65%).

“Land” has the meaning set forth in the granting clause of the Security Instrument.

“Lease” means any lease, sublease or subsublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property by or on behalf of Borrower, and (a) every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.

“Legal Requirements” means, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Property or any part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting Borrower, the Property or any part thereof, including any which may (a) require repairs, modifications or alterations in or to the Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.

“Lender” has the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.

“Lien” means, any mortgage, deed of trust, deed to secure debt, indemnity deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting Borrower, the Property, any portion thereof or any interest therein, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.

“Loan” means the loan in the Original Principal Amount made by Lender to Borrower pursuant to this Agreement.

“Loan Documents” means, collectively, this Agreement, the Note, the Security Instrument, the Environmental Indemnity, the Assignment of Management Agreement, the Guaranty, the Clearing Account Agreement, the Cash Management Agreement, and all other documents executed or delivered in connection with the Loan.

“Loan to Value Ratio” shall mean, as of the date of its calculation, the ratio of (i) the sum of the Outstanding Principal Balance of the Loan as of the date of such calculation to (ii) the fair market value of the Property, as determined, in Lender’s reasonable discretion, by any commercially reasonable method permitted to a REMIC Trust.

“Major Tenant” means H. Lee Moffitt Cancer Center & Research Institute, Inc., a Florida non-profit corporation, any successor or assigns of such entity as tenant under the Major Tenant Lease, or any subsequent Tenant under any replacement of the Major Tenant Lease.

“Major Tenant Cure Event” shall mean:

(i) if the Cash Sweep Period is caused by Major Tenant Trigger Event - Bankruptcy, no Event of Default has occurred and is continuing and no other uncured Cash Sweep Event exists, (A) the date which is thirty (30) days after the date that Major Tenant, or the trustee, if applicable, has affirmed the Major Tenant’s Lease and Major Tenant is in occupancy and paying full contractual unabated post-petition rent without right of offset or free rent credit and has delivered to Lender a tenant estoppel reasonably acceptable to Lender, or (B) the date that Borrower has entered into one or more replacement Leases or Major Tenant has entered into one or more subleases, in each case with a Tenant or Tenants acceptable to Lender in its reasonable discretion (with respect to replacement leases), for a rental rate and term acceptable to Lender in its reasonable discretion, and, with respect to replacement leases, containing such other terms and conditions substantially similar or superior to the terms which were applicable to such space under the Major Tenant Lease as of the closing of the Loan or as otherwise reasonably acceptable to Lender, and such replacement Tenant or Tenants and/or Major Tenant has delivered to Lender a tenant estoppel reasonably acceptable to Lender (provided, however, in the event of one or more subleases by Major Tenant, Major Tenant shall remain fully liable for all of the obligations under the Major Tenant Lease) confirming that such replacement Tenant or Tenants and/or Major Tenant are collectively in occupancy of not less than 80% of the net leaseable area of the Major Tenant Premises, are obligated to pay full contractual rent without right of offset or free rent credit, and have made their first monthly rental payment;

(ii) if the Cash Sweep Event is caused by the occurrence of a Major Tenant Trigger Event - Vacation, no Event of Default has occurred and is continuing and no other uncured Cash Sweep Event exists, (A) the date which is thirty (30) days after the date that Major Tenant is in occupancy of not less than 80% of the net leaseable area of

the Major Tenant Premises, is obligated to pay full contractual rent without right of offset or free rent credit, is open for business, has made its next due monthly rental payment, and has delivered to Lender a tenant estoppel reasonably acceptable to Lender, or (B) the date that Borrower has entered into one or more replacement Leases or Major Tenant has entered into one or more subleases, in each case with a Tenant or Tenants acceptable to Lender in its reasonable discretion (with respect to replacement leases) for a rental rate and term acceptable to Lender in its reasonable discretion, and, with respect to replacement leases, containing such other terms and conditions substantially similar or superior to the terms which were applicable to such space under the Major Tenant Lease as of the closing of the Loan or as otherwise reasonably acceptable to Lender, and such replacement Tenant or Tenants and/or Major Tenant has delivered to Lender a tenant estoppel reasonably acceptable to Lender (provided, however, in the event of one or more subleases by Major Tenant, Major Tenant shall remain fully liable for all of the obligations under the Major Tenant Lease) confirming that such replacement Tenant or Tenants and/or Major Tenant are collectively in occupancy of 80% of the portion of the Property covered by the Major Tenant Lease, are obligated to pay full contractual rent without right of offset or free rent credit, and have made their first monthly rental payment.

“Major Tenant Lease” means that certain Lease Agreement with an effective date of December 19, 2011, between Intellicenter Tampa Investments LLP, a Delaware limited liability company (predecessor to Borrower)], as landlord, and Major Tenant, as tenant, as the same may have been amended, modified, renewed and/or restated, or, if applicable, replaced in connection with any replacement of the Major Tenant Lease.

“Major Tenant Premises” means the entire space at the Property leased pursuant to the Major Tenant Lease as of the Closing Date.

“Major Tenant Rollover Reserve Account” has the meaning set forth in Section 7.8.1 hereof.

“Major Tenant Rollover Reserve Fund” has the meaning set forth in Section 7.8.1 hereof.

“Major Tenant Trigger Event” means the occurrence of a (a) Major Tenant Trigger Event – Bankruptcy, or (b) Major Tenant Trigger Event – Vacation.

“Major Tenant Trigger Event - Bankruptcy” means any Bankruptcy Action of any Major Tenant.

“Major Tenant Trigger Event - Vacation” means the earlier to occur of (a) the date that any Major Tenant gives a notice that it intends to cease all substantial business operations at its Major Tenant Premises, i.e. to “go dark”, or vacate or abandon substantially all of its Major Tenant Premises, which notice is not thereafter rescinded, or (b) the date that any Major Tenant ceases all substantial business operations at its Major Tenant Premises, i.e. “goes dark”, or vacates or abandons substantially all of its Major Tenant Premises.

“Management Agreement” means the management agreement entered into by and between Borrower and Manager, pursuant to which Manager is to provide management and other services with respect to the Property, or, if the context requires, a Qualified Manager who is managing the Property in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.

“Manager” means Cassidy Turley Commercial Real Estate Services, Inc., d/b/a Cushman and Wakefield, a Missouri corporation, or, if the context requires, a Qualified Manager who is managing the Property in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.

“Material Action” means to consolidate or merge Borrower with or into any Person, or sell all or substantially all of the assets of Borrower, or to institute proceedings to have Borrower be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against Borrower or file a petition seeking, or consent to, reorganization or relief with respect to Borrower under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of Borrower or a substantial part of its property, or make any assignment for the benefit of creditors of Borrower, or admit in writing Borrower’s inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate Borrower.

“Maturity Date” means October 1, 2025, or such other date on which the final payment of principal of the Note becomes due and payable as therein or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

“Maximum Legal Rate” has the meaning set forth in Section 7 of the Note.

“Monthly Debt Service Payment Amount” means individually and collectively, as the context may require, any Interest Only Monthly Payment and any Amortizing Monthly Payment.

“Moody’s” means Moody’s Investors Service, Inc.

“Morgan Stanley Premises” means the entire space at the Property occupied by Morgan Stanley Smith Barney financing LLC pursuant to its Lease as of the Closing Date.

“Morgan Stanley Reserve Account” has the meaning set forth in Section 7.7.1 hereof.

“Morgan Stanley Reserve Deposit” has the meaning set forth in Section 7.7.1 hereof.

“Morgan Stanley Reserve Fund” has the meaning set forth in Section 7.7.1 hereof.

“Net Cash Flow” means, with respect to the Property for any period, the amount obtained by subtracting Operating Expenses and Capital Expenditures for such period from Gross Income from Operations for such period.

“Net Operating Income” means the amount obtained by subtracting Operating Expenses from Gross Income from Operations.

“Net Proceeds” has the meaning set forth in Section 6.4(b) hereof.

“Net Proceeds Deficiency” has the meaning set forth in Section 6.4(b)(vi) hereof.

“Note” means that certain Promissory Note, dated the date hereof, in the principal amount of $33,562,500.00, made by Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“OFAC” has the meaning set forth in Section 10.25 hereof.

“Officer’s Certificate” means a certificate delivered to Lender by Borrower which is signed by an authorized officer of Borrower or the general partner, managing member or sole member of Borrower, as applicable.

“Operating Expenses” means the total of all expenditures, computed in accordance with GAAP, of whatever kind relating to the operation, maintenance and management of the Property that are incurred on a regular monthly or other periodic basis, including, bad debt, utilities, ordinary repairs and maintenance, insurance, license fees, property taxes and assessments, advertising expenses, management fees, payroll and related taxes, computer processing charges, operational equipment or other lease payments as approved by Lender, and other similar costs, but excluding depreciation, Debt Service, Capital Expenditures and contributions to the Reserve Funds.

“Original Principal Amount” means $33,562,500.00.

“Other Charges” means all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed against the Property or any part thereof.

“Other Obligations” has the meaning as set forth in the Security Instrument.

“Outstanding Principal Balance” or “OPB” means the portion of the Original Principal Amount that remains outstanding from time to time

“Payment Date” means, as applicable, an Interest Only Payment Date or an Amortizing Payment Date.

“Permitted Encumbrances” means, with respect to the Property, collectively, (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, (d) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s discretion, (e) such other Liens, encumbrances and other matters that are expressly permitted to exist in accordance with the terms and conditions of the Loan Documents, which Permitted Encumbrances, individually or in the aggregate, do not materially interfere with the current use or operation of the Property or the security intended to be provided by the Security Instrument or with the current ability of the Property to generate Net Cash Flow sufficient to service the Loan or Borrower’s ability to pay its obligations under the Loan Documents when they become due.

“Permitted Investments” means any one or more of the following obligations or securities acquired at a purchase price of not greater than par, including those issued by Servicer, the trustee under any Securitization or any of their respective Affiliates, payable on demand or having a maturity date not later than the Business Day immediately prior to the first Payment Date following the date of acquiring such investment and meeting one of the appropriate standards set forth below:

(i) obligations of, or obligations fully guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality thereof provided such obligations are backed by the full faith and credit of the United States of America including obligations of: the U.S. Treasury (all direct or fully guaranteed obligations), the Farmers Home Administration (certificates of beneficial ownership), the General Services Administration (participation certificates), the U.S. Maritime Administration (guaranteed Title XI financing), the Small Business Administration (guaranteed participation certificates and guaranteed pool certificates), the U.S. Department of Housing and Urban Development (local authority bonds) and the Washington Metropolitan Area Transit Authority (guaranteed transit bonds); provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

(ii) Federal Housing Administration debentures;

(iii) obligations of the following United States government sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System (consolidated systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt obligations), the Federal National Mortgage Association (debt obligations), the Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt obligations); provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

(iv) federal funds, unsecured certificates of deposit, time deposits, bankers’ acceptances and repurchase agreements with maturities of not more than 365 days of any bank, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating category and otherwise

acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities); provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

(v) fully Federal Deposit Insurance Corporation-insured demand and time deposits in, or certificates of deposit of, or bankers’ acceptances issued by, any bank or trust company, savings and loan association or savings bank, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating category and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities); provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

(vi) debt obligations with maturities of not more than 365 days and at all times rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) in its highest long-term unsecured rating category; provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

(vii) commercial paper (including both non interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) with maturities of not more than 365 days and that at all times is rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) in its highest short-term unsecured debt rating;

provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

(viii) units of taxable money market funds, which funds are regulated investment companies, seek to maintain a constant net asset value per share and invest solely in obligations backed by the full faith and credit of the United States, which funds have the highest rating available from each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) for money market funds; and

(ix) any other security, obligation or investment which has been approved as a Permitted Investment in writing by (a) Lender and (b) each Rating Agency, as evidenced by a written confirmation that the designation of such security, obligation or investment as a Permitted Investment will not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities by such Rating Agency;

provided, however, that no obligation or security shall be a Permitted Investment if (A) such obligation or security evidences a right to receive only interest payments or (B) the right to receive principal and interest payments on such obligation or security are derived from an underlying investment that provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment.

“Permitted Par Prepayment Date” means July 2, 2025.

“Permitted Transfer” means any of the following: (a) any transfer, directly as a result of the death of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by the decedent in question to the Person or Persons lawfully entitled thereto, (b) any transfer, directly as a result of the legal incapacity of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by such natural person to the Person or Persons lawfully entitled thereto, (c) any Additional Permitted Transfer, and (d) all other Transfers or transfers that are expressly permitted under the terms and conditions of this Agreement or the other Loan Documents.

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

“Personal Property” has the meaning set forth in the granting clause of the Security Instrument.

“Policies” has the meaning specified in Section 6.1(b) hereof.

“Policy” has the meaning specified in Section 6.1(b) hereof.

“Prepayment Date” has the meaning specified in Section 9(b) of the Note.

“Principal” means the Special Purpose Entity that is the general partner of Borrower, if Borrower is a limited partnership, or managing member of Borrower, if Borrower is a limited liability company.

“Property” means the parcel of real property, the Improvements thereon and all personal property owned by Borrower and encumbered by the Security Instrument, together with all rights pertaining to such property and Improvements, as more particularly described in the granting clauses of the Security Instrument and referred to therein as the “Property.”

“Provided Information” means any and all financial and other information provided at any time prepared by, or on behalf of, Borrower, Principal or Guarantor or, solely to the extent prepared on behalf of Borrower, by Manager.

“Qualified Manager” means either (a) Manager, Tower Realty Asset Management, Inc., Tower Realty Partners, Inc., CBRE, Inc. or Jones Lang LaSalle; or (b) in the reasonable judgment of Lender, a reputable and experienced management organization (which may be an Affiliate of Borrower) that (i) possesses adequate experience in managing properties similar in size, scope, use and value as the Property, (ii) has a reasonably acceptable reputation for property management, (iii) is, at the time it manages the Property, managing similar office space in the submarket in which the Property is located and (iv) is not a debtor in bankruptcy or similar proceedings, provided, that, if required under the operative documents in connection with any Securitization, Borrower shall have obtained (i) prior written confirmation from the applicable Rating Agencies that management of the Property by such entity will not cause a downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof, and (ii) in the event such entity is an Affiliate of Borrower, an Additional Insolvency Opinion.

“Qualified Transferee” has the meaning set forth in Section 5.2.10(h) hereof.

“Rating Agencies” means each of S&P, Moody’s, Fitch, and Morningstar Credit Ratings, LLC, or any other nationally recognized statistical rating agency which has been approved by Lender and designated by Lender to assign a rating to the Securities.

“Recognized Stock Exchange” has the meaning set forth in Section 5.2.10(i) hereof.

“REIT” has the meaning set forth in Section 5.2.10(g) hereof.

“REIT Share Transfer” has the meaning set forth in Section 5.2.10(i) hereof.

“REIT Shares” has the meaning set forth in Section 5.2.10(i) hereof.

“Related Entities” has the meaning set forth in Section 5.2.10(e) hereof.

“Release” means any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.

“Remediation” includes any response, remedial, removal, or corrective action, any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance, any actions to prevent, cure or mitigate any Release of any 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.

“REMIC Requirements” shall mean any applicable legal requirements relating to any REMIC Trust (including, without limitation, those relating to the continued treatment of the Loan (or the applicable portion thereof or interest therein) as a “qualified mortgage” held by such REMIC Trust, the continued qualification of such REMIC Trust as such under the Code, the non-imposition of any tax on such REMIC Trust under the Code (including, without limitation, taxes on “prohibited transactions and “contributions”) and any other constraints, rules or other regulations or requirements relating to the servicing, modification or other similar matters with respect to the Loan (or any portion thereof or interest therein) that may now or hereafter exist under applicable legal requirements (including, without limitation under the Code)).

“REMIC Trust” means a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note or a portion thereof.

“Rents” means, all rents (including percentage rents), rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, payments (including payments in connection with the exercise of any purchase option or termination rights), deposits (including security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, all other amounts payable as rent under any Lease or other agreement relating to the Property, including charges for electricity, oil, gas, water, steam, heat, ventilation, air-conditioning and any other energy, telecommunication, telephone, utility or similar items or time use charges, HVAC equipment charges, sprinkler charges, escalation charges, license fees, maintenance fees, charges for Taxes, operating expenses or other reimbursables payable to Borrower (or to the Manager for the account of Borrower) under any Lease, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower or its agents or employees from any and all sources arising from or attributable to the Property.

“Replacement Management Agreement” means, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in the same form and substance as the Management Agreement, or (ii) a management agreement with a Qualified Manager, which management agreement shall be reasonably acceptable to Lender in form and substance, provided, with respect to this subclause (ii), Lender, if required by under the operative documents in connection with any Securitization, may require that Borrower shall have obtained prior written confirmation from the applicable Rating Agencies that such management agreement will not cause a downgrade, withdrawal or qualification of the then current rating of the

Securities or any class thereof and (b) an assignment of management agreement and subordination of management fees substantially in the form then used by Lender (or of such other form and substance reasonably acceptable to Lender), executed and delivered to Lender by Borrower and such Qualified Manager at Borrower’s expense.

“Replacement Reserve Account” has the meaning set forth in Section 7.3.1 hereof.

“Replacement Reserve Fund” has the meaning set forth in Section 7.3.1 hereof.

“Replacement Reserve Monthly Deposit” has the meaning set forth in Section 7.3.1 hereof.

“Replacements” has the meaning set forth in Section 7.3.1 hereof.

“Reserve Funds” means, collectively, the Tax and Insurance Escrow Fund, the Replacement Reserve Fund, the Rollover Reserve Fund, the Major Tenant Rollover Reserve Fund, the Morgan Stanley Reserve Fund, the Excess Cash Flow Reserve Fund and any other escrow fund established by the Loan Documents.

“Restoration” means the repair and restoration of the Property after a Casualty or Condemnation as nearly as possible to the condition the Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender.

“Restricted Party” means collectively, (a) Borrower, Principal, any Guarantor, and any Affiliated Manager and (b) any shareholder, partner, member, non-member manager, or any direct or indirect legal or beneficial owner who Controls Borrower, Principal, any Guarantor, any Affiliated Manager or any non-member manager.

“Rollover Reserve Account” has the meaning set forth in Section 7.4.1 hereof.

“Rollover Reserve Fund” has the meaning set forth in Section 7.4.1 hereof.

“Rollover Reserve Letter of Credit” means, an unconditional irrevocable letter of credit, together with any related documentation required by Lender, an amount equal to $525,000.00 minus the then current balance of the Rollover Reserve Account, issued by an institution reasonably acceptable to Lender and otherwise in form and substance reasonably acceptable to Lender. The Letter of Credit (a) shall have a term expiring not earlier than twelve (12) months from the date of its issuance, (b) shall provide that it is transferable by Lender and its successors at no cost to them, and that the issuer of the Letter of Credit will look solely to Borrower for any transfer costs or fees, (c) shall provide for partial draws thereon, and (d) shall not include any requirements or conditions for draws other than Lender’s written or in person demand therefor. Not less than thirty (30) days prior to the expiration date of the Letter of Credit then held by Lender hereunder, Borrower shall deposit with Lender a replacement Letter of Credit complying with the requirements of this paragraph or provide Lender with evidence reasonably satisfactory to Lender that the expiration date of the existing Letter of Credit has been extended an additional twelve (12) months. Borrower’s failure to provide to Lender such replacement cash or replacement or extension of the letter of credit as required by the immediately prior sentence shall allow Lender to draw the entire remaining proceeds thereof and

deposit the same in the Rollover Reserve Account. Borrower will pay all costs associated with the initial issuance of any re-issuance of the Letter of Credit as provided hereunder, or associated with any modification or re-issuance of the Letter of Credit, now or in the future, in connection with any transfer of the Loan by Lender, in connection with any Securitization or otherwise. Upon such transfer, Borrower agrees that Lender is released from all liability in respect of the Letter of Credit, and that Borrower shall look solely to the transferee with respect to all matters relating to the Letter of Credit.

“Rollover Reserve Monthly Deposit” has the meaning set forth in Section 7.4.1 hereof.

“S&P” means Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.

“Sale or Pledge” means a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance, pledge, grant of option or other transfer or disposal of a legal or beneficial interest, whether direct or indirect.

“Securities” has the meaning set forth in Section 9.1 hereof.

“Securitization” has the meaning set forth in Section 9.1 hereof.

“Security Agreement” has the meaning set forth in Section 2.5.1(a)(v) hereof.

“Security Instrument” means, that certain first priority Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated the date hereof, executed and delivered by Borrower to Lender as security for the Loan and encumbering the Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Servicer” has the meaning set forth in Section 9.5 hereof.

“Severed Loan Documents” has the meaning set forth in Section 8.2(c) hereof.

“Significant Lease” means a Lease which (i) when aggregated with all other Leases at the Property with the same Tenant or its Affiliates, and assuming the exercise of all expansion rights and all preferential rights to lease additional space contained in such Lease, is expected to cover more than 15,000 rentable square feet, (ii) contains an option or preferential right to purchase all or any portion of the Property, (iii) is with an Affiliate of Borrower as Tenant, or (iv) is entered into during the continuance of an Event of Default or Cash Sweep Period.

“Special Purpose Entity” means a corporation, limited partnership or limited liability company that, since the date of its formation and at all times on and after the date thereof, has complied with and shall at all times comply with the following requirements unless it has received either prior consent to do otherwise from Lender or a permitted administrative agent thereof, or, while the Loan is securitized, confirmation from each of the applicable Rating Agencies that such noncompliance would not result in the requalification, withdrawal, or downgrade of the ratings of any Securities or any class thereof:

(i) is and shall be organized solely for the purpose of (A) in the case of Borrower, acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Property, entering into and performing its obligations under the Loan Documents with Lender, refinancing the Property in connection with a permitted repayment of the Loan, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing or (B) in the case of a Principal, acting as a general partner of the limited partnership that owns the Property or as member of the limited liability company that owns the Property and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing;

(ii) has not engaged and shall not engage in any business unrelated to (A) the acquisition, development, ownership, management or operation of the Property, or (B) in the case of a Principal, acting as general partner of the limited partnership that owns the Property or acting as a member of the limited liability company that owns the Property, as applicable;

(iii) has not owned and shall not own any real property other than, in the case of Borrower, the Property;

(iv) does not have, shall not have and at no time had any assets other than (A) in the case of Borrower, the Property and personal property necessary or incidental to its ownership and operation of the Property or (B) in the case of a Principal, its partnership interest in the limited partnership or the member interest in the limited liability company that owns the Property and personal property necessary or incidental to its ownership of such interests;

(v) has not engaged in, sought, consented to or permitted and shall not engage in, seek, consent to or permit (A) any dissolution, winding up, liquidation, consolidation or merger, (B) any sale or other transfer of all or substantially all of its assets or any sale of assets outside the ordinary course of its business, except as permitted by the Loan Documents, or (C) in the case of a Principal, any transfer of its partnership or membership interests;

(vi) shall not cause, consent to or permit any amendment of its limited partnership agreement, articles of incorporation, articles of organization, certificate of formation, operating agreement or other formation document or organizational document (as applicable) with respect to the matters set forth in this definition;

(vii) if such entity is a limited partnership, has and shall have at least one general partner and has and shall have, as its only general partners, Special Purpose Entities each of which (A) is a corporation or single-member Delaware limited liability company, (B) holds a direct interest as general partner in the limited partnership of not less than one percent (1.0%); and (C) has one (1) Independent Director;

(viii) if such entity is a corporation, has and shall have at least one (1) Independent Director, and shall not cause or permit the board of directors of such entity to take any Material Action either with respect to itself or, if the corporation is a Principal, with respect to Borrower or any action requiring the unanimous affirmative

vote of one hundred percent (100%) of the members of its board of directors unless one (1) Independent Director shall have participated in such vote and shall have voted in favor of such action;

(ix) if such entity is a limited liability company (other than a limited liability company meeting all of the requirements applicable to a single-member limited liability company set forth in this definition of “Special Purpose Entity”), has and shall have at least one (1) member that is a Special Purpose Entity, that is a corporation, that directly owns at least one percent (1.0%) of the equity of the limited liability company; and that has at least one (1) Independent Director;

(x) if such entity is a single-member limited liability company, (A) is and shall be a Delaware limited liability company, (B) has and shall have at least one (1) Independent Director serving as a manager of such company, (C) shall not take any Material Action and shall not cause or permit the members or managers of such entity to take any Material Action, either with respect to itself or, if the company is a Principal, with respect to Borrower, in each case unless one (1) Independent Director then serving as a manager of the company shall have participated consented in writing to such action, and (D) has and shall have either (1) a member which owns no economic interest in the company, has signed the company’s limited liability company agreement and has no obligation to make capital contributions to the company, or (2) two natural persons or one entity that is not a member of the company, that has signed its limited liability company agreement and that, under the terms of such limited liability company agreement becomes a member of the company immediately prior to the withdrawal or dissolution of the last remaining member of the company;

(xi) has not and shall not (and, if such entity is (a) a limited liability company, has and shall have a limited liability agreement or an operating agreement, as applicable, (b) a limited partnership, has a limited partnership agreement, or (c) a corporation, has a certificate of incorporation or articles that, in each case, provide that such entity shall not) (1) dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of its assets; (3) amend its organizational documents with respect to the matters set forth in this definition without the consent of Lender; or (4) without the affirmative vote of one (1) Independent Director of itself or without the consent of a Principal that is a member or general partner in it: (A) file or consent to the filing of any bankruptcy, insolvency or reorganization case or proceeding, institute any proceedings under any applicable insolvency law or otherwise seek relief under any laws relating to the relief from debts or the protection of debtors generally, file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings; (B) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the entity or a substantial portion of its property; (C) make an assignment for the benefit of the creditors of the entity; or (D) take any action in furtherance of any of the foregoing;

(xii) has at all times been and shall at all times intend to remain solvent and has paid and shall pay its debts and liabilities (including, a fairly-allocated portion of any personnel and overhead expenses that it shares with any Affiliate) from its assets, to the extent of sufficient liquid assets, as the same shall become due, and has maintained and

shall intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

(xiii) holds itself out as a legal entity, separate and apart from any other person or entity, has not failed and shall not fail to correct any known misunderstanding regarding the separate identity of such entity and has not identified and shall not identify itself as a division of any other Person;

(xiv) has maintained and shall maintain its bank accounts, books of account, books and records separate from those of any other Person and, to the extent that it is required to file tax returns under applicable law, has filed and shall file its own tax returns, except to the extent that it is required by law to file consolidated tax returns and, if it is a corporation, has not filed and shall not file a consolidated federal income tax return with any other corporation, except to the extent that it is required by law to file consolidated tax returns;

(xv) has maintained and shall maintain its own records, books, resolutions and agreements;

(xvi) has not commingled and shall not commingle its funds or assets with those of any other Person and has not participated and shall not participate in any cash management system with any other Person;

(xvii) has held and shall hold its assets in its own name;

(xviii) has conducted and shall conduct its business in its name or in a name franchised or licensed to it by an entity other than an Affiliate of itself or of Borrower, except for business conducted on behalf of itself by another Person under a business management services agreement that is on commercially-reasonable terms, so long as the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of Borrower;

(xix) (A) has maintained and shall maintain its financial statements, accounting records and other entity documents separate from those of any other Person; (B) has shown and shall show, in its financial statements, its asset and liabilities separate and apart from those of any other Person; and (C) has not permitted and shall not permit its assets to be listed as assets on the financial statement of any of its Affiliates except as required by GAAP; provided, however, that any such consolidated financial statement contains a note indicating that the Special Purpose Entity’s separate assets and credit are not available to pay the debts of such Affiliate and that the Special Purpose Entity’s liabilities do not constitute obligations of the consolidated entity;

(xx) has paid and shall pay, to the extent of sufficient liquid assets, its own liabilities and expenses, including the salaries of its own employees, out of its own funds and assets, and has maintained and shall maintain a sufficient number of employees in light of its contemplated business operations;

(xxi) has observed and shall observe all partnership, corporate or limited liability company formalities, as applicable;

(xxii) has not incurred any Indebtedness other than (i) acquisition financing with respect to the Property; construction financing with respect to the Improvements and certain off-site improvements required by municipal and other authorities as conditions to the construction of the Improvements; and first mortgage financings secured by the Property; and Indebtedness pursuant to letters of credit, guaranties, interest rate protection agreements and other similar instruments executed and delivered in connection with such financings, (ii) unsecured trade payables and operational debt not evidenced by a note, and (iii) Indebtedness incurred in the financing of equipment and other personal property used on the Property;

(xxiii) if such entity is the “Borrower” hereunder, shall have no Indebtedness other than (i) the Loan, (ii) liabilities incurred in the ordinary course of business relating to the ownership and operation of the Property and the routine administration of Borrower, in amounts not to exceed 2% of the amount of the Loan which liabilities are not more than sixty (60) days past the date incurred, are not evidenced by a note and are paid when due, and which amounts are normal and reasonable under the circumstances, and (iii) such other liabilities that are permitted pursuant to this Agreement or, if such entity is the Principal hereunder, shall have no other Indebtedness other than unsecured trade payable or accrued expenses incurred in the ordinary course of business related to the ownership of the interest in the Borrower that is not evidenced by a promissory note and is due and payable within sixty (60) days after the date incurred and which in no event exceeds $20,000.00;

(xxiv) has not assumed, guaranteed or become obligated and shall not assume or guarantee or become obligated for the debts of any other Person, has not held out and shall not hold out its credit as being available to satisfy the obligations of any other Person or has not pledged and shall not pledge its assets for the benefit of any other Person, in each case except as permitted pursuant to this Agreement;

(xxv) has not acquired and shall not acquire obligations or securities of its partners, members or shareholders or any other owner or Affiliate;

(xxvi) has allocated and shall allocate fairly and reasonably any overhead expenses that are shared with any of its Affiliates, constituents, or owners, or any guarantors of any of their respective obligations, or any Affiliate of any of the foregoing, including paying for shared office space and for services performed by any employee of an Affiliate;

(xxvii) has maintained and used and shall maintain and use separate stationery, invoices and checks bearing its name and not bearing the name of any other entity unless such entity is clearly designated as being the Special Purpose Entity’s agent;

(xxviii) has not pledged and shall not pledge its assets to or for the benefit of any other Person other than with respect to loans secured by the Property and no such pledge remains outstanding except to Lender to secure the Loan;

(xxix) has held itself out and identified itself and shall hold itself out and identify itself as a separate and distinct entity under its own name or in a name franchised or licensed to it by an entity other than an Affiliate of Borrower and not as a division or part of any other Person;

(xxx) has maintained and shall maintain its assets in such a manner that it shall not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

(xxxi) has not made and shall not make loans to any Person and has not held and shall not hold evidence of indebtedness issued by any other Person or entity (other than cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity);

(xxxii) has not identified and shall not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of it, and has not identified itself and shall not identify itself as a division of any other Person;

(xxxiii) other than capital contributions, loans and distributions permitted under the terms of its organizational documents, has not entered into or been a party to, and shall not enter into or be a party to, any transaction with any of its partners, members, shareholders or Affiliates except in the ordinary course of its business and on terms which are commercially reasonable terms comparable to those of an arm’s-length transaction with an unrelated third party;

(xxxiv) has not had and shall not have any obligation to, and has not indemnified and shall not indemnify its partners, officers, directors or members, as the case may be, in each case unless such an obligation or indemnification is fully subordinated to the Debt and shall not constitute a claim against it if its cash flow is insufficient to pay the Debt;

(xxxv) if such entity is a corporation, has considered and shall consider the interests of its creditors in connection with all corporate actions;

(xxxvi) has not had and shall not have any of its obligations guaranteed by any Affiliate except as provided by the Loan Documents;

(xxxvii) has not formed, acquired or held and shall not form, acquire or hold any subsidiary, except that a Principal may acquire and hold its interest in Borrower;

(xxxviii) has complied and shall comply with all of the terms and provisions contained in its organizational documents;

(xxxix) has conducted and shall conduct its business so that each of the assumptions made about it and each of the facts stated about it in the Insolvency Opinion are true; and

(xl) has not permitted and shall not permit any Affiliate or constituent party independent access to its bank accounts.

“State” means, the State or Commonwealth in which the Land or any part thereof is located.

“Survey” means that certain survey of the Property prepared by Extreme Surveying of Florida, Inc., as Job No. 0610-100-095, and delivered to Lender in connection with the closing of the Loan, or, if applicable, any subsequent survey of the Property prepared by a surveyor reasonably satisfactory to Lender and containing a certification reasonably satisfactory to Lender.

“Tax and Insurance Escrow Fund” has the meaning set forth in Section 7.2 hereof.

“Taxes” means all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against the Property or part thereof.

“Tenant” means the lessee of all or a portion of the Property under a Lease.

“Threshold Amount” has the meaning set forth in Section 5.1.21 hereof.

“Title Insurance Policy” means the mortgagee title insurance policy issued with respect to the Property and insuring the lien of the Security Instrument.

“Transfer” has the meaning set forth in Section 5.2.10(b) hereof.

“Transferee” has the meaning set forth in Section 5.2.10(e) hereof.

“Transferee’s Principals” means collectively, (A) Transferee’s managing members, general partners or principal shareholders (to the extent such parties Control Transferee) and (B) such other members, partners or shareholders which directly or indirectly shall own a fifty-one percent (51%) or greater economic, voting interest, and Control rights in Transferee.

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State in which the Property is located.

“U.S. Obligations” means non redeemable, non prepayable, non callable securities evidencing an obligation to timely pay principal or interest in a full and timely manner that constitute “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, and are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged, or (b) to the extent acceptable to the Rating Agencies, other “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended.

Section 1.2 Principles of Construction. The following rules of construction shall be applicable for all purposes of this Agreement and all documents or instruments supplemental hereto, unless the context otherwise clearly requires:

(a) any pronoun used herein shall be deemed to cover all genders, and words importing the singular number shall mean and include the plural number, and vice versa;

(b) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”;

(c) an Event of Default shall “continue” or be “continuing” or “exist” or be “existing” until (A) with respect to a monetary Event of Default, (x) the total amount then due and payable by Borrower (including all penalties and interest thereon pursuant to the terms and conditions hereof) shall be paid in full to Lender or (y) such Event of Default has otherwise been waived in writing by Lender, or (B) with respect to a non-monetary Event of Default, such Event of Default has been waived in writing by Lender or has otherwise been cured to the reasonable satisfaction of Lender;

(d) no inference in favor of or against any party shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document;

(e) the cover page (if any) of, all recitals set forth in, and all Exhibits to, this Agreement are hereby incorporated herein;

(f) all references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified;

(g) all uses of the words “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to” unless the context shall indicate otherwise;

(h) unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and

(i) unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.

ARTICLE II - GENERAL TERMS

Section 2.1 Loan Commitment; Disbursement to Borrower.

2.1.1 Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on the Closing Date.

2.1.2 Single Disbursement to Borrower. Borrower may request and receive only one (1) borrowing hereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect of the Loan may not be reborrowed. Borrower acknowledges and agrees that the Loan has been fully funded as of the Closing Date.

2.1.3 The Note, Security Instrument and Loan Documents. The Loan shall be evidenced by the Note and secured by the Security Instrument and the other Loan Documents.

2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to (a) acquire the Property or repay and discharge any existing loans relating to the Property, (b) pay all past due basic carrying costs, if any, with respect to the Property, (c) make deposits into the Reserve Funds on the Closing Date in the amounts provided herein, (d) pay costs and expenses incurred in connection with the closing of the Loan, as reasonably approved by Lender, (e) fund any working capital requirements of the Property and (f) distribute the balance, if any, to Borrower.

Section 2.2 Interest Rate.

2.2.1 Interest Rate. Interest on the Outstanding Principal Balance of the Loan shall accrue at the Interest Rate or as otherwise set forth in this Agreement or in the Note from (and including) the Closing Date to but excluding the Maturity Date.

2.2.2 Interest Calculation. Interest on the Outstanding Principal Balance of the Loan shall be calculated by multiplying (a) the actual number of days elapsed in the relevant Accrual Period by (b) a daily rate based on the Interest Rate and a three hundred sixty (360) day year by (c) the then Outstanding Principal Balance of the Loan. Borrower acknowledges that the calculation method for interest described herein results in a higher effective interest rate than the numeric Interest Rate and Borrower hereby agrees to this calculation method.

2.2.3 Default Rate. Upon the occurrence and during the continuance of an Event of Default (including the failure of Borrower to make full payment of the Debt on the Maturity Date), Lender shall be entitled to receive and Borrower shall pay interest on the Outstanding Principal Balance at the Default Rate. Interest shall accrue and be payable at the Default Rate from the occurrence of an Event of Default until all Events of Default have been waived in writing by Lender, or the cure thereof accepted by Lender in its reasonable discretion, or, with respect to any monetary Events of Default, all amounts due Lender (together will all applicable interest and penalties) on account of such monetary Events of Default shall be paid in full to Lender. Such accrued interest, to the extent unpaid, shall be added to the Outstanding Principal Balance, and interest shall accrue thereon at the Default Rate until fully paid. Such accrued interest shall be secured by the Security Instrument and other Loan Documents. Borrower agrees that Lender’s right to collect interest at the Default Rate is given for the purpose of compensating Lender at reasonable amounts for Lender’s added costs and expenses that occur as a result of Borrower’s Event of Default and that are difficult to predict in amount, such as increased general overhead, concentration of management resources on problem loans, and increased cost of funds. Lender and Borrower agree that Lender’s collection of interest at the Default Rate is not a fine or penalty, but is intended to be and shall be deemed to be reasonable compensation to Lender for increased costs and expenses that Lender will incur if there occurs an Event of Default hereunder. Collection of interest at the Default Rate shall not be construed as an agreement or privilege to extend the Maturity Date or to limit

or impair any rights and remedies of Lender under any Loan Documents. If judgment is entered on the Note, interest shall continue to accrue post-judgment at the greater of (a) the Default Rate or (b) the applicable statutory judgment rate.

2.2.4 Usury Savings. This Agreement, the Note and the other Loan Documents are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which is in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

Section 2.3 Loan Payment. Payments of principal, interest, and Late Charges (as defined in the Note) shall be made as provided in the Note.

Section 2.4 Prepayments. Except as provided in Section 9 of the Note, Borrower shall not have the right to prepay the Loan in whole or in part prior to the Maturity Date.

Section 2.5 Intentionally Deleted.

Section 2.6 Release of Property. Except as set forth in this Section 2.6, no repayment, prepayment of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in, the release of the Lien of the Security Instrument on the Property.

2.6.1 Release of Property. (a) If Borrower has the right to and has elected to prepay in full the Loan in accordance with this Agreement and the Note, upon satisfaction of the requirements of Section 2.4 and Section 9 of the Note, as applicable, and this Section 2.6, either (x) all of the Property shall be released from the Lien of the Security Instrument, or (y) Lender shall cooperate with Borrower, at Borrower’s cost, to assign the Security Instrument and other relevant Loan Documents to such new lender as is designated by Borrower.

(b) In connection with the release of the Security Instrument, Borrower shall submit to Lender, not less than ten (10) days prior to the Prepayment Date, either (x) a release of Lien (and related Loan Documents) for the Property, or (y) such assignment documents, satisfactory to Lender in its discretion, as are required to transfer and assign the Note, the Security Instrument

and any related loan documents to a new lender designated by Borrower in lieu of discharging the Note and satisfying the Security Instrument and related loan documents, for execution by Lender. Such release or assignment documents shall be in a form appropriate in the jurisdiction in which the Property is located and that would be satisfactory to a prudent lender and contains standard provisions, if any, protecting the rights of the releasing or assigning lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release or assignment, together with an Officer’s Certificate certifying that such documentation (i) is, to the actual knowledge of officer signing such Officer’s Certificate, in compliance with all applicable Legal Requirements, and (ii) will effect such releases or transfers and assignments in accordance with the terms of this Agreement. Borrower shall reimburse Lender and Servicer for any reasonable and documented out-of-pocket costs and expenses Lender and Servicer incur arising from such release (including reasonable attorneys’ fees and expenses for outside counsel) and Borrower shall pay, in connection with such release or assignment documents, (i) all recording charges, filing fees, taxes or other expenses payable in connection therewith, and (ii) to any Servicer, a processing fee in an amount determined by Lender or Servicer in its reasonable discretion, not to exceed the customary amount typically charged by such Servicer in connection therewith.

Section 2.7 Clearing Account/Cash Management.

2.7.1 Clearing Account. (a) During the term of the Loan, Borrower shall establish and maintain an Eligible Account (the “Clearing Account”) with Clearing Bank for the benefit of Lender, which Clearing Account shall be under the sole dominion and control of Lender. The Clearing Account shall be entitled in the name of Borrower for the benefit of Lender. Borrower hereby grants to Lender a security interest in the Clearing Account and all deposits at any time contained therein and the proceeds thereof and shall take (or shall authorize Lender to take) all actions reasonably necessary to maintain in favor of Lender a perfected first priority security interest in the Clearing Account, including filing UCC-1 Financing Statements and continuations thereof. Lender and Servicer shall have the sole right to make withdrawals from the Clearing Account. All reasonable and customary costs and expenses for establishing and maintaining the Clearing Account shall be paid by Borrower. All monies now or hereafter deposited into the Clearing Account shall be deemed additional security for the Debt. The Clearing Account Agreement and Clearing Account shall remain in effect until the Loan has been repaid in full.

(b) Borrower shall, and shall cause Manager to, deposit all amounts received by Borrower or Manager constituting Rents into the Clearing Account within two (2) Business Days after receipt thereof. Until so deposited, all Rents received by Borrower or Manager shall be held in trust for the benefit of Lender and shall not be commingled with any other funds or property of Borrower or Manager.

(c) Borrower shall obtain from Clearing Bank its agreement to transfer on each Business Day all amounts on deposit in the Clearing Account at the direction of Borrower unless a Cash Sweep Period is in effect, in which case such funds shall be transferred to the Cash Management Account.

(d) Upon the occurrence and during the continuance of an Event of Default or any Bankruptcy Action of Borrower or Manager, Lender may, in addition to any and all other rights and remedies available to Lender, apply any sums then present in the Clearing Account to the payment of the Debt in any order in its discretion..

(e) The Clearing Account shall not be commingled with other monies held by Borrower, Manager or Clearing Bank.

(f) Borrower shall not further pledge, assign or grant any security interest in the Clearing Account or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.

(g) Borrower shall indemnify Lender and hold Lender harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and the reasonable and documented out-of-pocket costs and expenses (including litigation costs and reasonable attorneys’ fees and expenses for outside counsel) arising from or in any way connected with the Clearing Account or the Clearing Account Agreement (unless arising from the gross negligence, willful misconduct, or bad faith of Lender) or the performance of the obligations for which the Clearing Account was established.

(h) Upon (i) Clearing Bank ceasing to be an Eligible Institution, (ii) the Clearing Account ceasing to be an Eligible Account, (iii) any resignation by Clearing Bank or termination of the Clearing Account Agreement by Clearing Bank or Lender in accordance with the terms and conditions of the Loan Documents or (iv) the occurrence and continuance of an Event of Default, Borrower shall, within fifteen (15) days of Lender’s written request, (A) terminate the existing Clearing Account Agreement, (B) appoint a new Clearing Bank (which such Clearing Bank shall (I) be an Eligible Institution, (II) other than during the continuance of an Event of Default, be selected by Borrower and reasonably approved by Lender and (III) during the continuance of an Event of Default, be selected by Lender), (C) cause such Clearing Bank to open a new Clearing Account (which such account shall be an Eligible Account) and enter into a new Clearing Account Agreement with Lender on substantially the same terms and conditions as the previous Clearing Account Agreement and (D) send any notices required pursuant to the terms hereof relating to such new Clearing Account Agreement and Clearing Account. Borrower constitutes and appoints Lender its true and lawful attorney-in-fact with full power of substitution to complete or undertake any action required of Borrower under this Section 2.7.1 in the name of Borrower in the event Borrower fails to do the same as required hereunder. Such power of attorney shall be deemed to be a power coupled with an interest and cannot be revoked.

2.7.2 Cash Management Account. (a) Upon the occurrence of a Cash Sweep Event, a segregated Eligible Account (the “Cash Management Account”) shall be established and maintained with Agent in Borrower’s name for the benefit of Lender, which Cash Management Account shall be under the sole dominion and control of Lender. Borrower hereby grants to Lender a security interest in the Cash Management Account and all deposits at any time contained therein and the proceeds thereof and shall take (or shall authorize Lender to take) all actions reasonably necessary to maintain in favor of Lender a perfected first priority security interest in the Cash Management Account, including filing UCC-1

Financing Statements and continuations thereof. Lender and Servicer shall have the sole right to make withdrawals from the Cash Management Account and all reasonable and customary costs and expenses for establishing and maintaining the Cash Management Account shall be paid by Borrower.

(b) The insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrower from the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.

(c) All funds on deposit in the Cash Management Account following the occurrence and during the continuance of an Event of Default or any Bankruptcy Action of Borrower or Manager may be applied by Lender in such order and priority as Lender shall determine.

(d) Borrower hereby agrees that Lender may modify the Cash Management Agreement for the purpose of establishing additional sub-accounts in connection with any payments otherwise required under this Agreement and the other Loan Documents and Lender shall provide notice thereof to Borrower.

2.7.3 Payments Received under the Cash Management Agreement. Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, and provided no Event of Default has occurred and is continuing, Borrower’s obligations with respect to the payment of the Monthly Debt Service Payment Amount and amounts required to be deposited into the Reserve Funds, if any, shall be deemed satisfied to the extent sufficient amounts are deposited in the Cash Management Account to satisfy such obligations pursuant to this Agreement on the dates each such payment is required, regardless of whether any of such amounts are so applied by Lender.

ARTICLE III - CONDITIONS PRECEDENT

Section 3.1 Conditions Precedent to Closing. The obligation of Lender to make the Loan hereunder is subject to the fulfillment by Borrower, in all material respects, or waiver by Lender of all of the conditions precedent to closing set forth in the application or term sheet for the Loan delivered by Borrower to Lender and the commitment or commitment rider, if any, to the application or term sheet for the Loan issued by Lender. Lender’s funding of the Loan (or any part thereof) to Borrower on the Closing Date or thereafter shall be conclusive evidence of the satisfaction or waiver of all conditions precedent to Lender’s obligation to make the Loan hereunder.

ARTICLE IV - REPRESENTATIONS AND WARRANTIES

Section 4.1 Borrower Representations. Borrower represents and warrants as of the date hereof that:

4.1.1 Organization. Borrower has been duly organized and is validly existing and in good standing with requisite power and authority to own the Property and to transact the businesses in which it is now engaged. Borrower is duly qualified to do business and is in good standing in the jurisdiction in which the Property is located and each other jurisdiction where it is required to be so qualified in connection with its businesses and operations. Borrower possesses all rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle it to own the Property and to transact the businesses in which it is now engaged, and the sole business of Borrower is the ownership, management and operation of the Property. The direct and indirect ownership interests in Borrower are as set forth on the organizational chart attached hereto as Schedule III.

4.1.2 Proceedings. Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents. This Agreement and such other Loan Documents have been duly executed and delivered by or on behalf of Borrower and constitute legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, except as such enforcement may be limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization or other similar laws affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

4.1.3 No Conflicts. The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower will not conflict with or result in a breach, in any material respect, of any of the terms or provisions of, or constitute a material default under, or result in the creation or imposition of any lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, partnership agreement, management agreement or other agreement or instrument to which Borrower is a party or by which any of the Property or Borrower’s assets is subject, nor will such action result in any material violation of the provisions of any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over Borrower or any of Borrower’s properties or assets, and any consent, approval, authorization, order, registration or qualification of or with any court or any such Governmental Authority required for the execution, delivery and performance by Borrower of this Agreement or any other Loan Documents has been obtained and is in full force and effect.

4.1.4 Litigation. Borrower has received no written notice of any actions, suits or proceedings at law or in equity, arbitrations, or governmental investigations by or before any Governmental Authority or other agency now pending, filed, or, to Borrower’s actual knowledge, threatened against or affecting Borrower, Guarantor, Principal or the Property, which actions, suits or proceedings, or governmental investigations, if determined against Borrower, Guarantor, Principal or the Property, would materially adversely affect (a) title to the Property; (b) the validity or enforceability of the Security Instrument; (c) Borrower’s ability to perform under the Loan; (d) Guarantor’s ability to perform under the Guaranty; (e) the use, operation or value of the Property; (f) the principal benefit of the security intended to be provided by the Loan Documents; (g) the current ability of the Property to generate Net Cash Flow sufficient to service the Loan; or (h) the current principal use of the Property.

4.1.5 Agreements. Borrower is not a party to any agreement or instrument or, to Borrower’s actual knowledge, subject to any restriction which would materially and adversely affect Borrower or the Property, or Borrower’s business, properties or assets, operations or condition, financial or otherwise. To its actual knowledge, Borrower is not in default, beyond any applicable notice and cure period, in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party or by which, to its actual knowledge, Borrower or the Property is bound. Borrower has no material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Borrower is a party or by which, to its actual knowledge, Borrower or the Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the Property as permitted pursuant to clause (xxiii) of the definition of “Special Purpose Entity” set forth in Section 1.1 hereof and (b) obligations under the Loan Documents.

4.1.6 Title. Borrower has good, marketable and insurable fee simple title to the real property comprising part of the Property and good title to the balance of the Property, free and clear of all Liens whatsoever except the Permitted Encumbrances, such other Liens as may be expressly permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. The Permitted Encumbrances in the aggregate do not materially and adversely affect the operation or use of the Property (as currently used) or Borrower’s ability to repay the Loan. The Security Instrument, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected lien on the Property, subject only to Permitted Encumbrances and the Liens created by the Loan Documents and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. There are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.

4.1.7 Solvency. Borrower has (a) not entered into this transaction or executed the Note, this Agreement or any other Loan Documents with the actual intent to hinder, delay or defraud any creditor and (b) received reasonably equivalent value in exchange for its obligations under such Loan Documents. Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed Borrower’s total known liabilities, including subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Borrower’s assets is and will, immediately following the making of the Loan, be greater than Borrower’s total known liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and matured. Borrower’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe, as of the date hereof, that it will, incur debt and liabilities (including contingent liabilities and other commitments) beyond its

ability to pay such debt and liabilities as they mature (taking into account the timing and amounts of cash to be received by Borrower and the amounts to be payable on or in respect of obligations of Borrower). No petition in bankruptcy has been filed against Borrower or Principal in the last seven (7) years, and neither Borrower nor Principal in the last seven (7) years has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. Neither Borrower nor Principal are 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 Borrower’s assets or property, and Borrower has no actual knowledge of any Person contemplating the filing of any such petition against it or Principal.

4.1.8 Full and Accurate Disclosure. No statement of fact made by Borrower in this Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. There is no material fact presently known to Borrower which has not been disclosed to Lender which materially adversely affects, nor as far as Borrower can reasonably foresee, would reasonably be expected to materially adversely affect, the Property or the business, operations or financial condition of Borrower.

4.1.9 No Plan Assets. Borrower does not sponsor, is not obligated to contribute to, and is not itself an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA or Section 4975 of the Code, and none of the assets of Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject to any state or other statute, regulation or other restriction regulating investments of, or fiduciary obligations with respect to, governmental plans within the meaning of Section 3(32) of ERISA which is similar to the provisions of Section 406 of ERISA or Section 4975 of the Code and which prohibit or otherwise restrict the transactions contemplated by this Agreement, including the exercise by Lender of any of its rights under the Loan Documents.

4.1.10 Compliance. Except as otherwise set forth in the Environmental Report, Title Insurance Policy, any property condition report or zoning report delivered to Lender by or on behalf of Borrower in connection with the Loan, Borrower and, to Borrower’s knowledge, the Property and the use thereof comply in all material respects with all applicable Legal Requirements, including building and zoning ordinances and codes. To Borrower’s knowledge, it is not in material default or violation of any order, writ, injunction, decree or demand of any Governmental Authority. To Borrower’s knowledge, there has not been committed by Borrower or any other Person in occupancy of or involved with the operation or use of the Property any act or omission affording the federal government or any other Governmental Authority the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. Except as otherwise set forth in the Environmental Report, Title Insurance Policy, any property condition report or zoning report delivered to Lender in connection with the Loan, to the knowledge of the Borrower, on the Closing Date, the Improvements at the Property were in material compliance with applicable law.

4.1.11 Financial Information. All financial data, including the statements of cash flow and income and operating expense, that have been delivered to Lender in connection with the Loan (a) are true, complete and correct in all material respects, (b) accurately represent the financial condition of Borrower and the Property, as applicable, as of the date of such reports, and (c) to the extent prepared or audited by an independent certified public accounting firm, have been prepared in accordance with GAAP throughout the periods covered, except as disclosed therein. Except for Permitted Encumbrances or as otherwise permitted pursuant to the terms and conditions of the Loan Documents, Borrower does not have any contingent liabilities, liabilities for delinquent taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and reasonably likely to have a material adverse effect on the Property or the current operation thereof, except as referred to or reflected in said financial statements or otherwise disclosed to Lender in writing. Since the date of such financial statements, there has been no material adverse change in the financial condition or business of Borrower from that set forth in said financial statements.

4.1.12 Condemnation. To Borrower’s knowledge, no Condemnation or other similar proceeding has been commenced or is threatened or contemplated with respect to all or any portion of the Property or for the relocation of roadways providing access to the Property.

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

4.1.14 Utilities and Public Access. Except as otherwise disclosed in the Survey or the Title Insurance Policy, the Property has rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service the Property for its intended uses. Except as otherwise disclosed in the Survey or the Title Insurance Policy, all public utilities necessary or convenient to the full use and enjoyment of the Property for its current use are located either in the public right of way abutting the Property (which are connected so as to serve the Property without passing over other property) or in recorded easements serving the Property and such easements are set forth in and insured by the Title Insurance Policy. Except as otherwise disclosed in the Survey or the Title Insurance Policy, all roads necessary for the use of the Property for its current purposes have been completed and dedicated to public use and accepted by all Governmental Authorities.

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

4.1.16 Separate Lots. The Property is comprised of one (1) or more parcels which constitute a separate tax lot or lots and does not constitute a portion of any other tax lot not a part of the Property.

4.1.17 Assessments. To Borrower’s knowledge, there are no pending or proposed special or other assessments for public improvements or otherwise affecting the Property, nor are there any contemplated improvements to the Property that may result in such special or other assessments.

4.1.18 Enforceability. The Loan Documents are enforceable by Lender (or any subsequent holder thereof) in accordance with their respective terms, subject to principles of equity and bankruptcy, insolvency and other laws generally applicable to creditors’ rights and the enforcement of debtors’ obligations. The Loan Documents are not subject to any right of rescission, set off, counterclaim or defense by Borrower or Guarantor, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (subject to principles of equity and bankruptcy, insolvency and other laws generally affecting creditors’ rights and the enforcement of debtors’ obligations), and neither Borrower nor Guarantor has asserted any right of rescission, set off, counterclaim or defense with respect thereto.

4.1.19 No Prior Assignment. There are no prior assignments of the Leases or any portion of the Rents due and payable or to become due and payable which are presently outstanding.

4.1.20 Insurance. Borrower has obtained and has delivered to Lender certified copies of the Policies (or other evidence reasonably acceptable to Lender) reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. No claims have been made or are currently pending, outstanding or otherwise remain unsatisfied under any such Policies, and to the actual knowledge of Borrower, neither Borrower nor any other Person, has done, by act or omission, anything which would impair the coverage of any such Policy.

4.1.21 Use of Property. The Property is used primarily for office purposes and other appurtenant, related, and incidental uses.

4.1.22 Certificate of Occupancy; Licenses. All certifications, permits, franchises, licenses, consents, authorizations, and approvals, including, certificates of completion and occupancy permits, required for the legal use, occupancy and operation of the Property have been obtained and are in full force and effect. The use being made of the Property is in conformity with the certificate of occupancy issued for the Property.

4.1.23 Flood Zone. Except as otherwise set forth in the Survey, none of the Improvements on the Property are located in an area as identified by the Federal Emergency Management Agency as an area having special flood hazards, or, if so located, the flood insurance required pursuant to Section 6.1(a) is in full force and effect with respect to the Property.

4.1.24 Physical Condition. Except as otherwise set forth in the Environmental Report or property condition report delivered to Lender in connection with the Loan, the Property, including all buildings, improvements, parking

facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in all material respects; there exists no structural or other material defects or damages in the Property, whether latent or otherwise, and Borrower has not received notice from any insurance company or bonding company of any defects or inadequacies in the Property, or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.

4.1.25 Boundaries. Except as otherwise set forth in the Survey, all of the improvements which were included in determining the appraised value of the Property lie wholly within the boundaries and building restriction lines of the Property, and no improvements on adjoining properties encroach upon the Property, and no easements or other encumbrances upon the Property encroach upon any of the Improvements, so as to materially affect the value or marketability of the Property except those which are insured against by the Title Insurance Policy.

4.1.26 Leases. The Property is not subject to any leases other than the Leases described in the rent roll attached hereto as Schedule I and made a part hereof, which rent roll is true, complete and accurate in all material respects as of the Closing Date. Borrower is the owner and lessor of landlord’s interest in the Leases; subject, however, to the rights therein granted to Lender pursuant to the Loan Documents. No Person has any possessory interest in the Property or right to occupy the same except under and pursuant to the provisions of the Leases. The current Leases are in full force and effect and, to Borrower’s actual knowledge, there are no defaults thereunder by either party and there are no conditions that, with the passage of time or the giving of notice, or both, would constitute defaults thereunder. Except with respect to security deposits, no Rent has been paid more than one (1) month in advance of its due date. All security deposits are held by Borrower in accordance with applicable law. All work to be performed by Borrower under each Lease has been performed as required and has been accepted by the applicable Tenant, and any payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or abatements required to be given by Borrower to any Tenant has already been received by such Tenant. There has been no prior sale, transfer or assignment, hypothecation or pledge of any Lease or of the Rents received therein which is outstanding. No Tenant listed on Schedule I has assigned its Lease or sublet all or any material portion of the premises demised thereby, no such Tenant holds its leased premises under assignment or sublease, nor does anyone except such Tenant and its employees occupy such leased premises. No Tenant under any Lease has a right or option pursuant to such Lease or otherwise to purchase all or any part of the leased premises or the building of which the leased premises are a part. No Tenant under any Lease has any right or option for additional space in the Improvements.

4.1.27 Survey. To Borrower’s knowledge, the Survey for the Property delivered to Lender in connection with this Agreement does not fail to reflect any material matter affecting the Property or the title thereto.

4.1.28 Inventory. Except as otherwise expressly set forth in the Leases, Borrower is the owner of all of the Equipment, Fixtures and Personal Property (as such terms are defined in the Security Instrument) located on or at the Property and shall not lease any Equipment, Fixtures or Personal Property other than as permitted hereunder. All of the Equipment, Fixtures and Personal Property are sufficient to operate the Property in the manner required hereunder and in the manner in which it is currently operated.

4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements have been paid or adequate arrangements have been made for the payment thereof promptly following the Closing Date. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including the Security Instrument, have been paid or adequate arrangements have been made for the payment thereof promptly following the Closing Date.

4.1.30 Special Purpose Entity/Separateness. (a) Until the Debt has been paid in full, Borrower hereby represents, warrants and covenants that (i) Borrower is, shall be and shall continue to be a Special Purpose Entity and (ii) Principal is, shall be and shall continue to be a Special Purpose Entity.

(b) The representations, warranties and covenants set forth in Section 4.1.30(a) shall survive for so long as any of the Debt remains payable to Lender under this Agreement or any other Loan Document.

(d) Any and all of the stated facts and assumptions made in any Insolvency Opinion, including any exhibits attached thereto, will have been and shall be true and correct in all material respects, and Borrower and Principal will have complied and will comply, in all material respects, with all of the stated facts and assumptions made with respect to it in any Insolvency Opinion. Each entity other than Borrower and Principal with respect to which an assumption is made or a fact stated in any Insolvency Opinion will have complied and shall comply, in all material respects, with all of the assumptions made and facts stated with respect to it in any such Insolvency Opinion. Borrower covenants that in connection with any Additional Insolvency Opinion delivered in connection with this Agreement it shall provide an updated certification regarding material compliance with the facts and assumptions made therein.

(e) Borrower covenants and agrees that Borrower shall provide Lender with thirty (30) days’ prior written notice prior to any removal of an Independent Director of any of Borrower or Principal.

4.1.31 Management Agreement. The Management Agreement is in full force and effect and, to the actual knowledge of Borrower, there is no default thereunder by any party thereto and no event has occurred that, with the passage of time or the giving of notice would constitute a default thereunder. The Management Agreement was entered into on commercially reasonable terms.

4.1.32 Illegal Activity. No portion of any proceeds used by Borrower to acquire the Property are the proceeds of any illegal activity.

4.1.33 No Change in Facts or Circumstances; Disclosure. All information submitted by and on behalf of Borrower to Lender and in all financial statements, rent rolls (including the rent roll attached hereto as Schedule I), reports, certificates and other documents submitted in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by Borrower in this Agreement or in any other Loan Document, are, to Borrower’s knowledge, true, complete and correct in all material respects. To Borrower’s knowledge, there has been no material adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise materially and adversely affects the use, operation or value of the Property or the business operations or the financial condition of Borrower. Borrower has disclosed to Lender all material facts actually known to Borrower and has not failed to disclose any material fact actually known to Borrower that could cause any Provided Information or representation or warranty made herein to be materially misleading.

4.1.34 Investment Company Act. Borrower is not (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (b) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 2005, as amended; or (c) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

4.1.35 Embargoed Person. As of the date hereof and at all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower and Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest of any nature whatsoever in Borrower or Guarantor, as applicable, with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower or Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law.

4.1.36 Principal Place of Business; State of Organization. Borrower’s principal place of business as of the date hereof is the address set forth in the introductory paragraph of this Agreement. Borrower’s state of organization is as set forth in the introductory paragraph of this Agreement.

4.1.37 Environmental Representations and Warranties. Except as otherwise disclosed by that certain Phase I

environmental report (or Phase II environmental report, if required) delivered to Lender by Borrower in connection with the origination of the Loan (such report is referred to below as the “Environmental Report”), (a) to Borrower’s knowledge, there are no Hazardous Substances or underground storage tanks in, on, or under the Property and no Hazardous Substances have been handled, manufactured, generated, stored, processed, or disposed of on or released or discharged from the Property, except those that are (i) in compliance with Environmental Laws and with permits issued pursuant thereto (to the extent such permits are required under Environmental Law), and (ii) de minimis amounts necessary to operate the Property for the purposes set forth in this Agreement which will not result in an environmental condition in, on or under the Property and which are otherwise permitted under and used in compliance with Environmental Law; (b) to Borrower’s knowledge, there are no past, present or threatened Releases of Hazardous Substances in, on, under or from the Property which has not been fully remediated in accordance with Environmental Law; (c) to Borrower’s knowledge, there is no threat of any Release of Hazardous Substances migrating to the Property; (d) to Borrower’s knowledge, there is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property which has not been fully remediated in accordance with Environmental Law; (e) Borrower does not know of, and has not received, any written notice or other communication from any Person (including a Governmental Authority) relating to Hazardous Substances or Remediation thereof, of possible liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing; (f) Borrower has truthfully and fully disclosed to Lender, in writing (including the Environmental Report), any and all information relating to environmental conditions in, on, under or from the Property that is known to Borrower and has provided to Lender all information that is contained in Borrower’s files and records, including any reports relating to Hazardous Substances in, on, under or from the Property or to the environmental condition of the Property; and (g) there are no Institutional Controls on or affecting the Property.

4.1.38 Cash Management Account. Borrower hereby represents and warrants to Lender that:

(a) This Agreement, together with the other Loan Documents, create a valid and continuing security interest (as defined in the Uniform Commercial Code) in the Clearing Account and Cash Management Account in favor of Lender, which security interest is enforceable as such against creditors of and purchasers from Borrower. Other than in connection with the Loan Documents and except for Permitted Encumbrances, Borrower has not sold, pledged, transferred or otherwise conveyed the Clearing Account or Cash Management Account;

(b) Each of the Clearing Account and Cash Management Account constitutes a “deposit account” or “securities account” within the meaning of the Uniform Commercial Code);

(c) Pursuant and subject to the terms hereof and the other applicable Loan Documents, the Clearing Bank and Agent have agreed to comply with all instructions originated by Lender, without further consent by Borrower, directing disposition of the Clearing Account and Cash Management Account and all sums at any time held, deposited or invested therein, together with any interest or other earnings thereon, and all proceeds thereof (including proceeds of sales and other dispositions), whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities;

(d) The Clearing Account and Cash Management Account are not in the name of any Person other than Borrower, as pledgor, or Lender, as pledgee. Borrower has not consented to the Clearing Bank and Agent complying with instructions with respect to the Clearing Account and Cash Management Account from any Person other than Lender; and

(e) The Property is not subject to any cash management system (other than pursuant to the Loan Documents), and any and all existing tenant instruction letters issued in connection with any previous financing have been duly terminated or superseded prior to the date hereof or will be duly terminated or superseded promptly following the Closing Date.

Section 4.2 Survival of Representations. Borrower agrees that all of the representations and warranties of Borrower set forth in Section 4.1 hereof and elsewhere in this Agreement and in the other Loan Documents shall survive for so long as any of the Debt remains owing to Lender under this Agreement or any of the other Loan Documents by Borrower. All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf.

ARTICLE V - BORROWER COVENANTS

Section 5.1 Affirmative Covenants. From the date hereof and until payment and performance in full of all obligations of Borrower under the Loan Documents or the earlier release of the Lien of the Security Instrument encumbering the Property (and all related obligations) in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:

5.1.1 Existence; Compliance with Legal Requirements. Borrower shall do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits, authorizations, and franchises and comply in all material respects with all Legal Requirements applicable to it and the Property, including all regulations, building and zoning codes and certificates of occupancy. There shall never be committed by Borrower, and Borrower shall never knowingly permit any other Person in occupancy of or involved with the operation or use of the Property to commit any act or omission affording the federal government or any state or local government the right of forfeiture against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not to commit or knowingly permit to exist any act or omission affording such right of forfeiture. Borrower shall at all times maintain, preserve and protect all franchises and trade names and preserve all the remainder of its property used or useful in the conduct of its business and shall keep the Property in good working order and repair, and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully provided in the

Loan Documents. Borrower shall keep the Property insured at all times by financially sound and reputable insurers, to such extent and against such risks, and maintain liability and such other insurance, as is more fully provided in this Agreement. Borrower shall from time to time, upon Lender’s request, provide Lender with evidence reasonably satisfactory to Lender that the Property complies with all Legal Requirements or is exempt from compliance with Legal Requirements. Borrower shall give prompt notice to Lender of the receipt by Borrower of any written notice related to a violation of any Legal Requirements affecting the Property or Borrower and of the commencement of any proceedings or investigations which relate to compliance with Legal Requirements affecting the Property or Borrower. After prior written notice to Lender, Borrower, at Borrower’s own expense, may contest by appropriate legal proceeding promptly initiated and conducted in good faith and with due diligence, the validity of any Legal Requirement, the applicability of any Legal Requirement to Borrower or the Property or any alleged violation of any Legal Requirement, provided that (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which Borrower is subject and shall not constitute a material default thereunder (beyond applicable notice and cure periods) and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (iii) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost prior to the final determination of such proceeding; (iv) Borrower shall promptly upon final determination thereof comply with any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal Requirement; (v) such proceeding shall suspend the enforcement of the contested Legal Requirement against Borrower or the Property; and (vi) Borrower shall furnish such security as may be required in the proceeding, or as may be reasonably requested by Lender, to insure compliance with such Legal Requirement, together with all interest and penalties payable in connection therewith. Lender may apply any such security, as reasonably necessary to cause compliance with such Legal Requirement at any time when, in the reasonable judgment of Lender, the validity, applicability or violation of such Legal Requirement is finally established or the Property (or any part thereof or interest therein) shall be in imminent danger of being sold, forfeited, terminated, cancelled or lost.

5.1.2 Taxes and Other Charges. Borrower shall pay, prior to delinquency, all Taxes and Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof as the same become due and payable; provided, however, Borrower’s obligation to directly pay Taxes shall be suspended for so long as Borrower complies with the terms and provisions of Section 7.2 hereof, in which event Lender shall pay all such Taxes and Other Charges prior to delinquency in accordance with the terms and conditions hereof. Borrower shall furnish to Lender receipts for the payment of the Taxes and the Other Charges prior to the date the same shall become delinquent (provided, however, Borrower is not required to furnish such receipts for payment of Taxes and Other Charges if such Taxes or Other Charges have been paid by Lender pursuant to Section 7.2 hereof and Lender has received receipts from the relevant taxing authority). Subject to Borrower’s right to contest Liens and other charges to the extent expressly set forth in the Loan Documents, Borrower shall promptly cause to be paid and discharged any Lien or charge whatsoever which may be or become a Lien or charge against the Property, and shall pay, prior to delinquency, for all utility services provided to the Property, except for utility services billed directly to the Tenants. After prior written notice to Lender, Borrower, at Borrower’s own expense, may

contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any Taxes or Other Charges, provided that (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower is subject and shall not constitute a material default thereunder beyond applicable notice and cure periods and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (iii) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost prior to the final determination of such proceeding; (iv) Borrower shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith, determined to be due; (v) such proceeding shall suspend the collection of such contested Taxes or Other Charges from the Property; (vi) Borrower shall have set aside reasonably adequate reserves for the payment of the Taxes, together with all interest and penalties thereon, unless Borrower has paid all of the Taxes under protest; and (vii) Borrower shall furnish such security as may be required in the proceeding, or as may be reasonably requested by Lender, to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon. Lender may pay over any such cash deposit or part thereof held by Lender to the claimant entitled thereto at any time when, in the reasonable judgment of Lender, the entitlement of such claimant is finally established or the Property (or part thereof or interest therein) shall be in imminent danger of being sold, forfeited, terminated, cancelled or lost or there shall be any imminent danger of the Lien of the Security Instrument being primed by any related Lien.

5.1.3 Litigation. Promptly after becoming aware of the same, Borrower shall give written notice to Lender of any litigation or governmental proceedings pending or threatened against Borrower or Guarantor which, if adversely determined, would reasonably be expected to materially adversely affect Borrower’s or Guarantor’s financial condition or the operation of the Property.

5.1.4 Access to Property. Subject to the rights of the Tenants under their Leases, Borrower shall permit agents, representatives and employees of Lender to inspect the Property or any part thereof at reasonable hours upon reasonable advance notice.

5.1.5 Notice of Default. Promptly after becoming aware of the same, Borrower shall give written notice to Lender of any material adverse change in Borrower’s or Guarantor’s financial condition or existence of any continuing Event of Default.

5.1.6 Cooperate in Legal Proceedings. Borrower shall reasonably cooperate with Lender with respect to any proceedings before any court, board or other Governmental Authority which may materially and adversely affect the rights of Lender hereunder or any rights obtained by Lender under any of the other Loan Documents and, in connection therewith, permit Lender, at its election, to participate in any such proceedings.

5.1.7 Perform Loan Documents. Borrower shall observe, perform and satisfy, in all material respects, all the terms, provisions, covenants and conditions of, and shall pay when due all costs, fees and expenses to the extent required under the Loan Documents executed and delivered by, or applicable to, Borrower, and shall not enter into or otherwise permit any amendment, waiver, supplement, termination or other modification of any Loan Document executed and delivered by, or applicable to, Borrower, except as permitted pursuant to the express terms and conditions of the Loan Documents, without the prior written consent of Lender.

5.1.8 Award and Insurance Benefits. Borrower shall reasonably cooperate with Lender in obtaining for Lender the benefits of any Awards or Insurance Proceeds lawfully or equitably payable in connection with the Property, and Lender shall be reimbursed for any reasonable and documented out-of-pocket expenses incurred in connection therewith (including attorneys’ fees and disbursements for outside counsel, and the payment by Borrower of the expense of an appraisal on behalf of Lender in case of Casualty or Condemnation affecting the Property or any part thereof) out of such Insurance Proceeds.

5.1.9 Further Assurances. Borrower shall, at Borrower’s sole cost and expense:

(a) furnish to Lender all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications, appraisals, title and other insurance reports and agreements, and each and every other document, certificate, agreement and instrument required to be furnished by Borrower pursuant to the terms of the Loan Documents or which are reasonably requested by Lender in connection therewith;

(b) execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts reasonably necessary or desirable, to evidence, preserve or protect the collateral at any time securing or intended to secure the obligations of Borrower under the Loan Documents, as Lender may reasonably require; and

(c) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time.

5.1.10 Principal Place of Business, State of Organization. Borrower shall not cause or permit any change to be made in its name, identity (including its trade name or names), place of organization or formation (as set forth in Section 4.1.36 hereof) or Borrower’s corporate or partnership or other structure (except as otherwise expressly permitted under Section 5.2.10 hereof) unless Borrower shall have first notified Lender in writing of such change at least thirty (30) days prior to the effective date of such change, and shall have first taken all action required by Lender for the purpose of perfecting or protecting the lien and security interests of Lender pursuant to this Agreement, and the other Loan Documents and, in the case of a change in Borrower’s structure, without first obtaining the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned, or delayed. Upon Lender’s request, Borrower shall, at Borrower’s sole cost and expense, execute and deliver additional security agreements

and other instruments which may be reasonably necessary to effectively evidence or perfect Lender’s security interest in the Property as a result of such change of principal place of business or place of organization. Borrower’s principal place of business and chief executive office, and the place where Borrower keeps its books and records, including recorded data of any kind or nature, regardless of the medium or recording, including software, writings, plans, specifications and schematics, has been for the preceding four months (or, if less, the entire period of the existence of Borrower) and will continue to be the address of Borrower set forth at the introductory paragraph of this Agreement (unless Borrower notifies Lender in writing at least thirty (30) days prior to the date of such change). Borrower shall promptly notify Lender of any change in its organizational identification number. If Borrower does not now have an organizational identification number and later obtains one, Borrower promptly shall notify Lender of such organizational identification number.

5.1.11 Financial Reporting. (a) Borrower shall keep and maintain or shall cause to be kept and maintained on a Fiscal Year basis, in accordance with the requirements for a Special Purpose Entity set forth herein and GAAP (or such other accounting basis acceptable to Lender), proper and accurate books, records and accounts reflecting all of the financial affairs of Borrower and all items of income and expense in connection with the operation of the Property. Lender shall have the right from time to time at all times during normal business hours upon reasonable notice to examine such books, records and accounts at the office of Borrower or any other Person maintaining such books, records and accounts and to make such copies or extracts thereof as Lender shall desire. After the occurrence and during the continuance of an Event of Default, Borrower shall pay any reasonable and documented out-of-pocket costs and expenses incurred by Lender to examine Borrower’s accounting records with respect to the Property, as Lender shall determine to be reasonably necessary or appropriate in the protection of Lender’s interest.

(b) Borrower shall furnish to Lender annually, within hundred twenty (120) days following the end of each Fiscal Year of Borrower, a complete copy of Borrower’s annual financial statements and prepared in accordance with GAAP (or such other accounting basis acceptable to Lender) covering the Property for such Fiscal Year and containing statements of profit and loss for Borrower and the Property, an annual rent roll and a balance sheet for Borrower, all of the forgoing to be accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete in all material respects and fairly present the financial condition and results of the operations of Borrower and the Property in all material respects. If Borrower consists of more than one entity, said financial statements shall be in the form of an annual combined balance sheet of the Borrower entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Individual Properties on a combined basis. Such statements shall set forth the financial condition and the results of operations for the Property for such Fiscal Year, and shall include amounts representing annual net operating income, Net Cash Flow, gross income, and operating expenses. Borrower shall also furnish to Lender annually, within fifteen (15) days after the same has been filed, a complete copy of the audited Annual Report (Form 10-K) of the REIT.

(c) Borrower shall furnish, or cause to be furnished, to Lender on or before thirty (30) days after the end of each calendar quarter the following items, accompanied by an Officer’s

Certificate stating that such items are true, correct, accurate, and complete, in all material respects, and fairly present the financial condition and results of the operations of Borrower and the Property (subject to normal year-end adjustments) as applicable: (i) a rent roll for the subject quarter; (ii) quarterly and year-to-date operating statements (including Capital Expenditures) prepared for each calendar quarter, noting net operating income, gross income, and operating expenses (not including any contributions to the Replacement Reserve Fund), and other information necessary and sufficient to fairly represent the financial position and results of operation of the Property during such calendar quarter, and containing a comparison of budgeted income and expenses and the actual income and expenses; and (iii) a calculation reflecting the annual Debt Service Coverage Ratio for the immediately preceding three (3), six (6), and twelve (12) month periods as of the last day of such quarter. In addition, such certificate shall also be accompanied by an Officer’s Certificate stating that the representations and warranties of Borrower set forth in Section 4.1.30 are true and correct, in all material respects, as of the date of such certificate.

(d) Until the earlier of Securitization or twelve (12) months after the date of this Agreement, Borrower shall furnish, or cause to be furnished, to Lender on or before thirty (30) days after the end of each calendar month, all of the following items with respect to the previous calendar month, accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete, in all material respects, and fairly present the financial condition and results of the operations of Borrower and the Property (subject to normal year-end adjustments) as applicable: (A) a rent roll for the subject month; (B) monthly operating statement(s) of the Property; and (C) year-to-date operating statement(s) of the Property.

(e) Intentionally omitted.

(f) Upon request, Borrower and its affiliates shall furnish to Lender a listing of all security deposits held in connection with any Lease of any part of the Property, including the name of the Tenant to which each such security deposit applies.

(g) For each Fiscal Year commencing after the Closing Date, Borrower shall submit to Lender an Annual Budget not later than sixty (60) days prior to the commencement of such period or Fiscal Year in form reasonably satisfactory to Lender. The Annual Budget shall be subject to Lender’s written approval (each such Annual Budget, an “Approved Annual Budget”). If Lender objects to a proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise such Annual Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise the same in accordance with the process described in this subsection until Lender approves the Annual Budget. Until such time that Lender approves a proposed Annual Budget, the most recently Approved Annual Budget shall apply; provided that, such Approved Annual Budget shall be adjusted to reflect actual increases in Taxes, Insurance Premiums, Other Charges and any other Operating Expenses for which the annual costs thereof are reasonably ascertainable.

(h) If Borrower must incur an extraordinary operating expense or capital expense not set forth in the Approved Annual Budget (each an “Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for Lender’s approval, which approval shall not be unreasonably withheld, conditioned, or delayed.

(i) Borrower shall furnish to Lender, within ten (10) Business Days after request (or as soon thereafter as may be reasonably possible), such further detailed information with respect to the operation of the Property and the financial affairs of Borrower as may be reasonably requested by Lender, provided that Borrower shall not be obligated to deliver such information more than once in any calendar year, except during the existence of an Event of Default.

(j) Borrower shall furnish to Lender, within (x) ten (10) Business Days after Lender’s request (or as soon thereafter as may be reasonably possible) or (y) such longer period in which the applicable Tenant has to respond to such a request under its Lease, financial information from any Tenant designated by Lender (to the extent such financial information is required to be provided under the applicable Lease and same is received by Borrower after request therefor), provided that Borrower shall not be obligated to deliver such information with respect to each Tenant more than once in any calendar year, except during the existence of an Event of Default.

(k) Borrower shall cause Guarantor to furnish to Lender annually, within one hundred twenty (120) days following the end of each Fiscal Year of Guarantor: (i) if such Guarantor is an entity, financial statements, which shall include an annual balance sheet and profit and loss statement of Guarantor, in the form reasonably required by Lender, accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete in all material respects and fairly present the financial condition and results of the operations of Guarantor in all material respects, or (ii) if such Guarantor is an individual, a signed personal financial statement in a form reasonably satisfactory to Lender.

(l) Any reports, statements or other information required to be delivered under this Agreement shall be delivered (i) in paper form, (ii) on compact disk, flash drive, or other reasonably reliable portable storage media, which may be delivered in secured or encrypted format and (iii) if requested by Lender and within the capabilities of Borrower’s data systems without change or modification thereto, in electronic form and prepared using Microsoft Word for Windows files (which files may be prepared using a spreadsheet program and saved as word processing files), which may be delivered in secured or encrypted format. Borrower agrees that Lender may disclose information regarding the Property and Borrower that is provided to Lender pursuant to this Section 5.1.11 in connection with and solely to the extent reasonably required for the Securitization to such parties requesting such information in connection with such Securitization.

5.1.12 Business and Operations. Borrower shall continue to engage in the businesses presently conducted by it as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Property. Borrower shall qualify to do business and shall remain in good standing in the jurisdiction in which the Property is located and the jurisdiction of its formation. Borrower shall

at all times during the term of the Loan, continue to own all of Equipment, Fixtures and Personal Property which are necessary to operate the Property in the manner required hereunder and in the manner in which it is currently operated.

5.1.13 Title to the Property. Borrower shall warrant and defend (a) the title to the Property and every part thereof, subject only to Liens permitted hereunder (including Permitted Encumbrances) and (b) the validity and priority of the Lien of the Security Instrument on the Property, subject only to Liens permitted hereunder (including Permitted Encumbrances), in each case against the claims of all Persons whomsoever. Borrower shall reimburse Lender for any losses or damages, and reasonable and documented out-of-pocket costs or expenses (including reasonable attorneys’ fees and expenses for outside counsel) actually incurred by Lender if an interest in the Property, other than as permitted hereunder, is claimed by another Person.

5.1.14 Costs of Enforcement. In the event (a) that the Security Instrument encumbering the Property is foreclosed in whole or in part or that the Security Instrument is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage encumbering the Property prior to or subsequent to the Security Instrument in which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of Borrower or any of its constituent Persons or an assignment by Borrower or any of its constituent Persons for the benefit of its creditors, Borrower, its successors or assigns, shall be chargeable with and agrees to pay all reasonable and documented out-of-pocket costs of collection and defense, including reasonable attorneys’ fees and expenses for outside counsel, incurred by Lender or Borrower in connection therewith and in connection with any appellate proceeding or post judgment action involved therein, together with all required service or use taxes.

5.1.15 Estoppel Statement. (a) After request by Lender, Borrower shall within ten (10) days furnish Lender or any proposed assignee of the Loan with a statement, duly acknowledged and certified, setting forth (i) the original principal amount of the Note, (ii) to the knowledge of Borrower, the unpaid principal amount of the Note, (iii) the Interest Rate of the Note, (iv) the terms of payment and Maturity Date, (v) the date installments of interest or principal were last paid, (vi) that, except as provided in such statement, there are no Defaults or Events of Default under this Agreement or any of the other Loan Documents, (vii) that the Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification, (viii) whether any offsets or defenses exist against the obligations secured hereby and, if any are alleged to exist, a detailed description thereof, (ix) that all Leases are in full force and effect (except as otherwise provided) and (provided the Property is not a residential multifamily property) have not been modified (or if modified, setting forth all modifications), (x) the date to which the Rents thereunder have been paid pursuant to the Leases, (xi) whether or not, to the knowledge of Borrower, any of the lessees under the Leases are in default under the Leases, and, if any of the lessees are in default, setting forth the specific nature of all such defaults, (xii) the amount of security deposits held by Borrower under each Lease and that such amounts are consistent with the amounts required under each Lease, and (xiii) as to any other matters reasonably requested by Lender and reasonably related to the Leases, the obligations secured hereby, the Property or the Security Instrument.

(b) Borrower shall use commercially reasonable efforts to deliver to Lender upon request, tenant estoppel certificates from each commercial Tenant leasing space at the Property in form and substance reasonably acceptable to Lender (it being agreed that an estoppel certificate in the form provided as of the closing of the Loan shall be deemed acceptable to Lender) provided that Borrower shall not be required to deliver such certificates more frequently than (i) two (2) times in any calendar year prior to Securitization, and (ii) one (1) time in any calendar year following Securitization.

5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan received by it on the Closing Date only for the purposes set forth in Section 2.1.4 hereof.

5.1.17 Intentionally Omitted.

5.1.18 Confirmation of Representations. Upon the request of Lender, Borrower shall deliver, in connection with any Securitization, (a) one (1) or more Officer’s Certificates certifying as to the accuracy, in all material respects, of all representations made by Borrower in the Loan Documents (or disclosing any materially inaccurate representations) as of the date of the closing of such Securitization in all relevant jurisdictions, and (b) certificates of the relevant Governmental Authorities in all relevant jurisdictions indicating the good standing and qualification of Borrower, Principal and Guarantor as of a date that is no more than thirty (30) days prior to the Securitization.

5.1.19 Environmental Covenants. (a) Borrower covenants and agrees that: (i) all uses and operations on or of the Property, whether by Borrower or any other Person claiming by, through, or under Borrower, shall be in compliance, in all material respects, with all Environmental Laws and permits issued pursuant thereto; (ii) there shall be no Releases of Hazardous Substances in, on, under or from the Property; (iii) there shall be no Hazardous Substances in, on, or under the Property, except those that are (A) in compliance with all Environmental Laws and with permits issued pursuant thereto (to the extent such permits are required by Environmental Law), and (B) de-minimis amounts necessary to operate the Property for the purposes set forth in this Agreement and the Leases which will not result in an environmental condition in, on or under the Property and which are otherwise permitted under and used in compliance with Environmental Law; (iv) Borrower shall keep the Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Borrower or any other Person (the “Environmental Liens”); (v) Borrower shall, at its sole cost and expense, fully and expeditiously cooperate in all activities pursuant to subsection (b) below, including providing all relevant information and making knowledgeable persons available for interviews; (vi) intentionally omitted; (vii) Borrower shall, at its sole cost and expense, comply with all reasonable written requests of Lender made if Lender has a reasonable basis to believe that an environmental hazard exists on the Property in order to: (A) reasonably effectuate Remediation of any condition (including a Release of a Hazardous Substance) in, on, under or from the Property; (B) comply with any applicable Environmental Law; (C) comply with any written directive from any Governmental Authority; and (D) take any other reasonable action necessary or appropriate for protection of human health or the environment; (viii) Borrower shall not do,

and shall utilize commercially reasonable efforts to ensure that no Tenant or other user of the Property does, any act that materially increases the dangers to human health or the environment, poses an unreasonable risk of harm to any Person (whether on or off the Property), impairs or may impair the value of the Property, is contrary to any requirement of any insurer, constitutes a public or private nuisance, constitutes material physical waste, or violates, in any material respect, any covenant, condition, agreement or easement applicable to the Property; (ix) immediately upon Borrower becoming aware of the same, Borrower shall notify Lender in writing of (A) any presence or Releases or threatened Releases of Hazardous Substances in, on, under, from or migrating towards the Property; (B) any material non-compliance with any Environmental Laws related in any way to the Property; (C) any actual or threatened Environmental Lien; (D) any required or proposed Remediation of environmental conditions relating to the Property; and (E) any written notice or other communication of which Borrower becomes aware from any source whatsoever (including a governmental entity) relating in any way to the release or potential release of Hazardous Substances or Remediation thereof, likely to result in liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with anything referred to in this Section; (x) Borrower shall not install, use, generate, manufacture, store, treat, release or dispose of, nor knowingly permit the installation, use, generation, storage, treatment, release or disposal of, any Hazardous Substances (except de-minimis amounts necessary to operate the Property for the purposes set forth in this Agreement and the Leases which will not result in an environmental condition in, on or under the Property and which are otherwise permitted under and used in compliance with Environmental Law) on, under or about the Property, and all uses and operations on or of the Property, whether by Borrower or any other person or entity claiming by, through, or under Borrower, shall be in compliance, in all material respects, with all Environmental Laws and permits issued pursuant thereto; (xi) Borrower shall not make any change in the use or condition of the Property which (A) would reasonably be expected to lead to the presence on, under or about the Property of any Hazardous Substances which is not in accordance with any applicable Environmental Law, or (B) would require, under any applicable Environmental Law, notice be given to or approval be obtained from any governmental agency in the event of a transfer of ownership or control of the Property, in each case without the prior written consent of Lender; (xii) Borrower shall not allow any Institutional Control on or to affect the Property; and (xiii) Borrower shall take all acts reasonably necessary to preserve its status, if applicable, as an “innocent landowner,” “contiguous property owner,” or “prospective purchaser” as to the Property and as those terms are defined in CERCLA; provided, however, that this covenant does not limit or modify any of Borrower’s other duties or obligations under this Agreement.

(b) If Lender has a reasonable basis to believe that an environmental hazard exists on the Property, upon reasonable notice from Lender, Borrower shall, at Borrower’s expense, promptly cause an engineer or consultant reasonably satisfactory to Lender to conduct an environmental assessment or audit (the scope of which shall be determined in Lender’s reasonable discretion) and take any samples of soil, groundwater or other water, air, or building materials or any other invasive testing requested by Lender and promptly deliver the results of any such assessment, audit, sampling or other testing; provided, however, if such results are not delivered to Lender within a reasonable period or if Lender has reason to believe that an environmental hazard exists on the Property that, in Lender’s reasonable judgment, endangers any Tenant or other occupant of the Property or their guests or the general public or may

materially and adversely affect the value of the Property, upon not less than five (5) Business Days prior notice to Borrower, Lender and any other Person designated by Lender, including any receiver, any representative of a governmental entity, and any environmental consultant, shall have the right, subject to the rights of Tenants, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including conducting any environmental assessment or audit (the scope of which shall be determined in Lender’s reasonable discretion) and taking samples of soil, groundwater or other water, air, or building materials, and reasonably conducting other invasive testing. Borrower shall reasonably cooperate with and provide Lender and any such Person designated by Lender with access to the Property, subject to the rights of Tenants and the foregoing notice requirements.

(d) Intentionally omitted.

(e) Borrower shall promptly perform all reasonably necessary remedial work in response to the presence of any Hazardous Substances on the Property, any violation of any Environmental Laws, or any claims or requirements made by any governmental agency or authority. All such work shall be conducted by licensed and reputable contractors pursuant to written plans approved by the agency or authority in question (if applicable), under proper permits and licenses (if applicable) with such insurance coverage as is customarily maintained by prudent property owners in similar situations. If the cost of the work exceeds $100,000, then Lender shall have the right of prior approval over the environmental contractor and plans, which shall not be unreasonably withheld, conditioned, or delayed. Subject to Borrower’s rights under the Security Instrument and this Agreement to contest costs and expenses for labor and materials, the costs and expenses of the remedial work shall be promptly paid by Borrower. In the event Borrower fails to undertake the remedial work, or fails to complete the same within a reasonable time period after the same is undertaken, and if Lender is of the good faith opinion that Lender’s security in the Property is materially jeopardized thereby, then Lender shall have the right to undertake or complete the remedial work itself. In such event all reasonable and documented out-of-pocket costs of Lender in doing so, including all fees and expenses of environmental consultants, engineers, attorneys, accountants and other professional advisors, shall become a part of the Loan and shall be due and payable from Borrower upon demand. Such amount shall be secured by the Loan Documents, and failure to pay the same within thirty (30) days following demand therefor shall be an Event of Default under the Loan Documents. In the event any Hazardous Substances are removed from the Property, either by Borrower or Lender, the number assigned by the United States Environmental Protection Agency to such Hazardous Substances shall be solely in the name of Borrower, and Borrower shall have any and all liability for such removed Hazardous Substances, except to the extent of any liability arising from the gross negligence, willful misconduct, or bad faith of Lender, its employees, or agents.

5.1.20 Leasing Matters. Any Significant Leases written after the date hereof shall be subject to the prior written approval of Lender, which approval shall not be unreasonably withheld, conditioned or delayed. All subleases related to, or any renewals or extensions of, any Significant Lease after the date hereof shall be subject to the prior written approval of Lender, which approval shall not be unreasonably withheld,

conditioned or delayed; provided, however, that no such Lender approval shall be required in connection with (a) any sublease by a Tenant under an existing Significant Lease pursuant to subleasing rights specifically set forth in such Significant Lease, or (b) any renewal or extension of an existing Significant Lease pursuant to the renewal or extension terms specifically set forth in such Significant Lease. Additionally, no Lender approval shall be required in connection with any renewal or extension of an existing Significant Lease on renewal or extension terms not specifically set forth in such Significant Lease, but which (I) is on the then existing form lease previously approved by Lender or another lease form approved by Lender, (II) provides for base rents equal to or in excess of ninety five (95%) percent of the per square foot paid by the applicable Tenant in the immediately preceding Lease year, (III) does not contain Inducement Costs (as hereinafter defined) paid or to be payable by Borrower in excess of the sum of the then current balance of the Rollover Reserve Fund plus any additional capital contributions made by the partners of Borrower that are specifically designated to be used, or are otherwise actually used, for such Inducement Costs. For purposes of this Section 5.1.20, “Inducement Costs” shall consist of free rent and Borrower contributions to tenant improvement costs. Upon request, Borrower shall furnish Lender with executed copies of all Leases. Other than as provided for herein, all renewals of Leases and all proposed Leases shall provide for rental rates comparable to existing local market rates, shall be on commercially reasonable terms and shall not contain any terms which would materially affect Lender’s rights under the Loan Documents, shall provide that they are subordinate to the Security Instrument and that the lessee agrees to attorn to Lender or any purchaser at a sale by foreclosure or power of sale, which subordination and attornment agreements by lessee may be subject to Lender delivering to such lessee a customary non-disturbance agreement that is reasonably acceptable to the parties thereto. Borrower (i) shall observe and perform, in all material respects, the obligations imposed upon the lessor under the Leases in a commercially reasonable manner; (ii) shall enforce and may amend or terminate the terms, covenants and conditions contained in the Leases upon the part of the lessee thereunder to be observed or performed in a commercially reasonable manner and in a manner not to impair the value of the Property involved except that no termination by Borrower or acceptance of surrender by a Tenant of any Leases shall be permitted unless by reason of a tenant default and then only in a commercially reasonable manner to preserve and protect the Property; provided, however, that no such termination or surrender of any Significant Lease will be permitted without the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned, or delayed; (iii) shall not collect any of the rents more than one (1) month in advance (other than security deposits); (iv) shall not execute any other assignment of lessor’s interest in the Leases or the Rents (except as contemplated by the Loan Documents); (v) shall not alter, modify or change the terms of the Leases, in any material respect, in a manner inconsistent with the provisions of the Loan Documents; and (vi) shall execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Leases as Lender shall from time to time reasonably require. Notwithstanding anything to the contrary contained herein, Borrower shall not enter into a new Significant Lease of all or substantially all of the Property without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed Notwithstanding anything to the contrary contained herein, all new Leases and all amendments, modifications, extensions, and renewals of existing Leases with Tenants that are Affiliates of Borrower shall be subject to the prior written consent of Lender.

Notwithstanding anything to the contrary contained herein, to the extent Lender’s prior approval is required for any matters related to a Significant Lease, Lender shall have seven (7) Business Days from receipt of written request (which such written request shall include a copy of the proposed lease, market information relating to leases comparable to the proposed lease, financial information with respect to the proposed tenant to the extent in Borrower’s possession and such other relevant materials and information used by Borrower in connection with negotiation of the proposed Lease, and such information as is necessary to evidence that the proposed Lease satisfies the requirements of an acceptable Approved Replacement Lease), to approve or disapprove such matter, provided that such request to Lender is marked in bold lettering with the following language: “LENDER’S RESPONSE IS REQUIRED WITHIN SEVEN (7) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER.” In the event additional information is reasonably requested by Lender, Lender shall have five (5) Business Days from receipt of all additional requested information in which to approve or disapprove such applicable matter, notwithstanding the date of the original request. In the event that Lender fails to respond to the applicable matter in question within such time frame as set forth above, Borrower shall submit a second request for approval with respect to such matter in accordance with the above conditions, including marking the request in bold lettering as described above. In the event that Lender fails to respond to the applicable matter in question within five (5) Business Days from receipt of such second written request, Lender’s failure to respond shall constitute Lender’s deemed approval for all purposes related to the particular approval request. Borrower shall provide Lender with such information and documentation as may be reasonably required by Lender, including, without limitation, lease comparables and other market information as reasonably required by Lender.

5.1.21 Alterations. Borrower shall obtain Lender’s prior written consent to any material alterations to any Improvements, which consent shall not be unreasonably withheld, conditioned or delayed except with respect to alterations that may have a material adverse effect on Borrower’s financial condition, the value of the Property or the Property’s Net Operating Income. Notwithstanding the foregoing, Lender’s consent shall not be required in connection with any material alterations that will not have a material adverse effect on Borrower’s financial condition, the value of the Property or the Property’s Net Operating Income, provided that such material alterations are made in connection with (a) tenant improvement work performed pursuant to the terms of any Lease executed on or before the date hereof, (b) tenant improvement work performed pursuant to the terms and provisions of a Lease and not adversely affecting any structural component of any Improvements, any utility or HVAC system contained in any Improvements or the exterior of any building constituting a part of any Improvements, or (c) material alterations performed in connection with the Restoration of the Property after the occurrence of a Casualty or Condemnation in accordance with the terms and provisions of this Agreement. For purposes of this Section 5.1.21, an alteration shall be deemed to be “material” if: (i) such alteration affects any structural component of any Improvements, any utility or HVAC system contained in any Improvements or the exterior of any building constituting a part of any Improvements, or (ii) the total anticipated cost of such alteration will be in excess of $250,000.00. If the total unpaid amounts due and payable with respect to alterations to the Improvements at the Property (other than such amounts to be paid or reimbursed by Tenants under the Leases) shall at any time exceed $250,000.00 (the “Threshold Amount”), Borrower shall promptly deliver to Lender as security for the payment of such

amounts and as additional security for Borrower’s obligations under the Loan Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other securities having a rating acceptable to Lender and that, if required by under the operative documents in connection with any Securitization, the applicable Rating Agencies have confirmed in writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the initial, or, if higher, then current ratings assigned to any Securities or any class thereof in connection with any Securitization or (D) a completion and performance bond or an irrevocable letter of credit (payable on sight draft only) issued by a financial institution having a rating by S&P of not less than “A-1+” if the term of such bond or letter of credit is no longer than three (3) months or, if such term is in excess of three (3) months, issued by a financial institution having a rating that is acceptable to Lender and that, if required by under the operative documents in connection with any Securitization, the applicable Rating Agencies have confirmed in writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the initial, or, if higher, then current ratings assigned to any Securities or class thereof in connection with any Securitization. Such security shall be in an amount equal to the excess of the total unpaid amounts with respect to alterations to the Improvements on the Property (other than such amounts to be paid or reimbursed by Tenants under the Leases) over the Threshold Amount and Lender may apply such security from time to time at the option of Lender to pay for such alterations.

5.1.22 Operation of Property. (a) Borrower shall cause the Property to be operated, in all material respects, in accordance with the Management Agreement (or Replacement Management Agreement) as applicable. If the Management Agreement expires or is terminated (without limiting any obligation of Borrower to obtain Lender’s consent to any termination or modification of the Management Agreement in accordance with the terms and provisions of this Agreement), Borrower shall promptly enter into a Replacement Management Agreement with Manager or another Qualified Manager, as applicable.

(b) Borrower shall: (i) promptly perform or observe, in all material respects, all of the covenants and agreements required to be performed and observed by it under the Management Agreement and do all things reasonably necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any material default under the Management Agreement of which it is aware; (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, notice, report and estimate received by it under the Management Agreement; and (iv) enforce the performance and observance of all of the material covenants and agreements required to be performed or observed by Manager under the Management Agreement, in a commercially reasonable manner.

5.1.23 Embargoed Person. Borrower has performed and shall perform reasonable due diligence to ensure that at all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower, Principal and Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest of any nature whatsoever in Borrower, Principal or Guarantor, as applicable, with the result that the investment in Borrower, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower, Principal or Guarantor, as applicable, have been

derived from, or are the proceeds of, any unlawful activity, including money laundering, terrorism or terrorism activities, with the result that the investment in Borrower, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law, or may cause the Property to be subject to forfeiture or seizure.

Section 5.2 Negative Covenants. From the date hereof until payment and performance in full of all obligations of Borrower under the Loan Documents or the earlier release of the Lien of the Security Instrument and any other collateral in accordance with the terms of this Agreement and the other Loan Documents, Borrower covenants and agrees with Lender that it shall not do, directly or indirectly, any of the following:

5.2.1 Operation of Property. (a) Borrower shall not, without Lender’s prior written consent (which consent shall not be unreasonably withheld, conditioned, or delayed): (i) surrender, terminate, cancel, amend or modify the Management Agreement; provided, that Borrower may, without Lender’s consent, replace the Manager so long as the replacement manager is a Qualified Manager pursuant to a Replacement Management Agreement; (ii) reduce or consent to the reduction of the term of the Management Agreement, subject to Borrower’s foregoing right to replace the Manager; (iii) increase or consent to the increase of the amount of any management fees under the Management Agreement to an above-market rate, or (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Management Agreement in any material respect.

(b) Following the occurrence and during the continuance of an Event of Default, Borrower shall not exercise any rights, make any decisions, grant any approvals or otherwise take any action under the Management Agreement without the prior written consent of Lender, which consent may be granted, conditioned or withheld in Lender’s discretion.

(c) If under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use that is otherwise permitted as a pre-existing nonconforming use, Borrower shall not cause or permit the nonconforming use or Improvement to be discontinued or abandoned without the express written consent of Lender.

5.2.2 Liens. Borrower shall not create, incur, assume or allow any Lien to exist on any portion of the Property or permit any such action to be taken, except for Permitted Encumbrances and subject to Borrower’s right to contest any such Lien in accordance with the terms and conditions of the Loan Documents.

5.2.3 Dissolution. Borrower shall not (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (b) engage in any business activity not related to or incidental to the ownership and operation of the Property, (c) transfer, lease or sell, in one transaction or any combination of transactions, the assets or all or substantially all of the properties or assets of Borrower except to the extent permitted by the Loan Documents, (d) modify, amend, waive or terminate, in any material respects, its organizational documents or its qualification and good standing in any jurisdiction, except to the extent permitted by the Loan Documents, or (e) cause Principal to (i) dissolve, wind up or liquidate or take any action, or omit to take an action, as a result of which the Principal

would be dissolved, wound up or liquidated in whole or in part, or (ii) amend, modify, waive or terminate, in any material respects, the organizational documents of Principal except to the extent permitted by the Loan Documents, in each case, without obtaining the prior written consent of Lender or Lender’s designee.

5.2.4 Change In Business. Borrower shall not enter into any line of business other than the ownership and operation of the Property, or make any material change in the scope or nature of its business objectives, purposes or operations, or undertake or participate in activities other than the continuance of its present business. Nothing contained in this Section 5.2.4 is intended to expand the rights of Borrower contained in Section 5.2.10(d) hereof.

5.2.5 Debt Cancellation. Borrower shall not cancel or otherwise forgive or release any claim or debt (other than termination of Leases in accordance herewith) owed to Borrower by any Person, except for adequate consideration and in the ordinary course of Borrower’s business.

5.2.6 Zoning. Borrower shall not initiate or consent to any zoning reclassification of any portion of the Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of the Property in any manner that could result in such use becoming a non conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, without the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned, or delayed.

5.2.7 No Joint Assessment. Borrower shall not allow, permit or initiate the joint assessment of the Property (a) with any other real property constituting a tax lot separate from the Property, and (b) which constitutes real property with any portion of the Property which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such real property portion of the Property.

5.2.8 Intentionally Omitted.

5.2.9 ERISA. (a) Borrower shall not engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA.

(b) Borrower further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term of the Loan, as requested by Lender in its reasonable discretion, that (A) Borrower is not and does not maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (B) Borrower is not subject to any state statute regulating investment of, or fiduciary obligations with respect to governmental plans and (C) one or more of the following circumstances is true:

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

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

(iii) Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

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

(b) Without the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned, or delayed, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20, (B) Permitted Transfers, and (C) Permitted Encumbrances.

(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents (except with respect to the security interest created under the Loan Documents); (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non member manager (or if no

managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.

(d) Notwithstanding any contrary provisions of this Section 5.2.10 or anything else to the contrary contained in this Agreement or any other Loan Documents, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than forty-nine percent (49%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the change of Control in a Restricted Party, and as a condition to each such Transfer, Lender shall receive not less than fifteen (15) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall, no less than fifteen (15) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Rating Agencies. In addition, at all times, the management team of City Office REIT Operating Partnership, L.P. must continue to Control Borrower and the Property. Borrower shall pay any and all reasonable and documented out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).

(e) No Transfer of the Property and assumption of the Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Except for such 120 day period, so long as no Event of Default exists and is then continuing, Lender shall not unreasonably withhold, condition, or delay its consent to a Transfer of the Property and assumption of the Loan provided that the following minimum conditions are satisfied:

(i) Borrower shall pay Lender a transfer fee equal to one-half percent (0.50%) of the outstanding principal balance of the Loan at the time of such transfer;

(ii) Borrower shall pay any and all reasonable and documented out-of-pocket costs incurred in connection with such Transfer (including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);

(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated experience in owning and operating properties similar in location, size, class and operation to the Property, which experience shall be reasonably determined by Lender;

(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;

(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any voluntary bankruptcy proceedings, or involuntary bankruptcy proceedings (except to the extent dismissed within ninety (90) days following the commencement thereof), made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;

(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents, from and after the date of such assumption, in a manner reasonably satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;

(vii) There shall be no material adverse litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;

(viii) Transferee, Transferee’s Principals and Related Entities shall not have materially defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender in its reasonable discretion;

(ix) Transferee and Transferee’s Principals must be able to satisfy, in all material respects, all the representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;

(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;

(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.

(xii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement

shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Policy issued on the date hereof and the Permitted Encumbrances;

(xiii) The Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement;

(xiv) Intentionally omitted; and

(xv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer reasonably satisfactory in form and substance to Lender.

(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee or any other requirements set forth in Section 5.2.10(e): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no Indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the reasonable and documented out-of-pocket costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual reasonable and documented out-of-pocket costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons (or represent the majority of such persons) who had such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any material documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; (H) Borrower shall have delivered reasonably satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.30 hereof; and (I) if required under the operative documents in connection with any Securitization, delivery of an Additional Insolvency Opinion acceptable to Lender.

(g) Notwithstanding any contrary provisions of this Section 5.2.10 or anything else to the contrary contained in this Agreement or any other Loan Documents, Guarantor may Transfer its interest in Borrower to any entity owned or Controlled directly or indirectly by Guarantor or City Office REIT, Inc., a Maryland corporation (the “REIT”) (any such transfer is hereinafter referred to as an “Affiliated Party Transfer”), without consent of Lender, provided each of the following conditions is satisfied: (A) no Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Affiliated Party Transfer no less than 10 days prior

to such Transfer; (C) no Indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Affiliated Party Transfer; (D) Borrower shall be responsible for the reasonable and documented out-of-pocket costs and expenses of documenting the Affiliated Party Transfer; (E) Borrower shall reimburse Lender for all actual reasonable and documented out-of-pocket costs and expenses incurred by Lender in connection with the Affiliated Party Transfer, whether or not consummated; (F) once the Affiliated Party Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons (or represent the majority of such persons) who had such Control and management rights immediately prior to the Affiliated Party Transfer; (G) Borrower shall furnish Lender copies of any material documentation executed in connection with the Affiliated Party Transfer promptly after execution thereof; (H) Borrower shall have delivered reasonably satisfactory evidence to Lender that, following the Affiliated Party Transfer, Borrower shall continue to comply with the provisions of Section 4.1.30 hereof; and (I) if required under the operative documents in connection with any Securitization, delivery of an Additional Insolvency Opinion acceptable to Lender.

(h) Notwithstanding any provision in this Section 5.2.10 to the contrary, Guarantor may Transfer its interest in Borrower to a Qualified Transferee, provided each of the following conditions is satisfied:

(A) Borrower shall pay Lender a non-refundable application fee of $5,000.00 and a transfer fee equal to one percent (1%) of the Outstanding Principal Balance of the Loan at the time of such Transfer;

(B) Borrower shall pay any and all reasonable and documented out-of-pocket costs incurred in connection with such Transfer (including Lender’s counsel fees and disbursements for outside counsel and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant to clause (E) below);

(C) The proposed Qualified Transferee or its principals must have demonstrated experience in owning and operating properties similar in location, size, class and operation to the Property, which experience shall be reasonably acceptable to Lender;

(D) The proposed Qualified Transferee must be able to satisfy, in all material respects, all the representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, and shall deliver (1) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (2) all certificates, agreements, covenants and legal opinions reasonably required by Lender;

(E) If required by Lender, the proposed Qualified Transferee shall be approved by the Rating Agencies through a written confirmation to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such Transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;

(F) Prior to any release of Guarantor, one or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender;

(G) The Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement;

(H) Borrower or the proposed Qualified Transferee, at no cost to Lender, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer in form and substance reasonably satisfactory to Lender.

A “Qualified Transferee” for purposes of this this Section 5.2.10(h) shall mean a person that (i) is a real estate investment trust, a bank, saving and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, government entity or plan, investment company registered under the Investment Company Act of 1940, as amended, or exempt or excluded from resignation or regulation thereunder pursuant to such Act and the rules thereunder, money management firm or a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended, (ii) has total assets (in name or under management) in excess of $200,000,000.00 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s equity of $100,000,000.00, (iii) is not the subject of a proceeding involving bankruptcy, insolvency, reorganization or relief of debtors, (iv) has not been convicted in a criminal proceeding for a felony or a crime involving moral turpitude and is not reputed to have substantial business or other affiliations with an organized crime figure, (v) has no material outstanding litigation or regulatory actions pending against such person, (vi) has not defaulted under its obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender and (vii) has passed all OFAC, Patriot Act and similar compliance requirements.

(i) Notwithstanding the foregoing or any provision in any Loan Document, the following transfers shall constitute Permitted Transfers (subject only to any conditions set forth below) and shall not require Lender’s consent:

(A) the issuance, sale, conveyance, transfer, redemption, or other disposition (each, a “REIT Share Transfer”) of any shares of common stock or preferred stock (the “REIT Shares”) in the REIT so long as (1) at the time of the REIT Share Transfer, the REIT Shares are listed on the New York Stock Exchange or any other nationally recognized stock exchange (any such stock exchange, a “Recognized Stock Exchange”), and (2) the REIT Share Transfer does not result in or cause a Change of Control;

(B) the issuance, sale, conveyance, transfer, redemption, or other disposition (each a “Guarantor Transfer”), of any limited partnership interests (the “Guarantor Interests”) in Guarantor so long as (1) at the time of the Guarantor Transfer, the REIT Shares are listed on a Recognized Stock Exchange, and (2) the Guarantor Transfer does not result in or cause a Change of Control;

For purposes of this Section 5.2.10(i), a “Change of Control” shall occur when: (i) the REIT is no longer the sole general partner of Guarantor, (ii) the REIT owns less than 50.1% of the limited partnership interest in Guarantor, or (iii) if the REIT no longer Controls Borrower.

Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent, except for Permitted Transfers and such other Transfers or transfers that are expressly permitted under this Section 5.2.10 or elsewhere in the Loan Documents without the consent of Lender. This provision shall apply to every Transfer hereunder that requires Lender’s consent regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.

ARTICLE VI - INSURANCE; CASUALTY; CONDEMNATION

Section 6.1 Insurance. (a) Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and the Property providing at least the following coverages:

(i) comprehensive all risk “special form” insurance including loss caused by any type of windstorm, windstorm related perils, “named storms,” or hail on the Improvements and the Personal Property, including contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of Construction Endorsements, (A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost,” which for purposes of this Agreement means actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation; (B) containing an agreed amount endorsement with respect to the Improvements and Personal Property waiving all co-insurance provisions or to be written on a no co-insurance form; (C) providing for no deductible in excess of 5% of Net Cash Flow of the Property for all such insurance coverage; provided however with respect to windstorm and earthquake coverage, providing for a deductible satisfactory to Lender in its reasonable discretion; and (D) if any of the Improvements or the use of the Property shall at any time constitute legal non-conforming structures or uses, coverage for loss due to operation of law in an amount equal to the full Replacement Cost, coverage for demolition costs and coverage for increased costs of construction. In addition, Borrower shall obtain: (y) if any material 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 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, plus excess flood coverage in an amount equal to the “probable maximum loss” for the Improvements, as determined by an engineer reasonably satisfactory to Lender, or such greater amount as Lender shall require, and (z) earthquake insurance in amounts and in form and substance reasonably satisfactory to Lender (but in any event, in an amount not less than 150% of the “probable maximum loss”) in the event the Property is located in an area with a high degree of seismic activity and the “probable maximum loss” for the Improvements, as determined by an engineer reasonably satisfactory to Lender, is 20% or

greater (based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance), provided that the insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent with the comprehensive all risk insurance policy required under this subsection (i);

(ii) business income or rental loss insurance (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided for in subsection (i) above; (C) in an amount equal to one hundred percent (100%) of the projected gross revenues from the operation of the Property (as reduced to reflect expenses not incurred during a period of Restoration) for a period of (1) not less than twelve (12) months from the date of casualty or loss if the amount of the Loan is less than $35,000,000, or (2) not less than eighteen (18) months from the date of casualty or loss if the amount of the Loan is $35,000,000 or more; and (D) if the amount of the Loan is $50,000,000 or more, 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 180 days from the date that the Property 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. The amount of such business income or rental loss insurance shall be determined prior to the date hereof and at least once each year thereafter based on Borrower’s reasonable estimate of the gross revenues from the Property for the succeeding twelve (12) month period. Notwithstanding the provisions of Section 2.7.1 hereof, all proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied to the obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on the respective dates of payment provided for in this Agreement and the other Loan Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance;

(iii) at all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only if the Property coverage form does not otherwise apply, (A) owner’s contingent or protective liability insurance, otherwise known as Owner Contractor’s Protective Liability, 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 Property and (4) with an agreed amount endorsement waiving co-insurance provisions;

(iv) comprehensive boiler and machinery insurance, if steam boilers, other pressure-fixed vessels, large air conditioning systems, elevators or other large machinery are in operation, in amounts as shall be reasonably required by Lender on terms consistent with the commercial property insurance policy required under subsection (i) above;

(v) commercial general liability insurance against claims for personal injury, bodily injury, death, contractual damage or property damage occurring upon, in or about the Property, such insurance (A) to be on the so-called “occurrence” form with a combined limit of not less than $2,000,000.00 in the aggregate and $1,000,000.00 per occurrence; (B) to continue at not less than the aforesaid limit until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate 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 written contracts and (5) contractual liability covering the indemnities contained in Article 9 of the Security Instrument to the extent the same is available;

(vi) automobile liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence of $1,000,000.00;

(vii) worker’s compensation and employee’s liability subject to the worker’s compensation laws of the applicable state;

(viii) umbrella and excess liability insurance in an amount not less than: (A) $5,000,000.00 per occurrence if the amount of the Loan is less than $35,000,000, or (B) $25,000,000.00 per occurrence, if the amount of the Loan is $35,000,000 or more, on terms consistent with the commercial general liability insurance policy required under subsection (v) above, including supplemental coverage for employer liability and automobile liability, which umbrella liability coverage shall apply in excess of the automobile liability coverage in clause (vi) above;

(ix) the insurance required under this Section 6.1(a) above shall cover perils of terrorism and acts of terrorism and Borrower shall maintain insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required under Sections 6.1(a) above at all times during the term of the Loan; and

(x) upon sixty (60) days written notice, such other reasonable insurance, including sinkhole or land subsidence insurance, and in such reasonable amounts as Lender from time to time may reasonably request against such other insurable hazards which at the time are commonly insured against for property similar to the Property located in or around the region in which the Property is located.

(b) All insurance provided for in Section 6.1(a) hereof, shall be obtained under valid and enforceable policies (collectively, the “Policies” or in the singular, the “Policy”), and shall be subject to the approval of Lender as to insurance companies, amounts, deductibles, loss payees and insureds. The Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the State and having a rating of (A) if the amount of the Loan is $35,000,000 or more, “A:VIII” or better in the current Best’s Insurance Reports and a claims paying ability rating of “A-” or better by S&P, and “A3” or better by Moody’s or (B) if the amount of the Loan is less than $35,000,000, “A-:VIII” or better in the current Best’s Insurance Reports and a claims paying ability rating of “A-” or better by S&P, and “A3” or better by Moody’s. Notwithstanding the foregoing, any required earthquake insurance must

satisfy the requirements of subsection (A) hereof regardless of the amount of the Loan. The Policies described in Section 6.1 hereof (other than those strictly limited to liability protection) shall designate Lender as loss payee. Not less than ten (10) days prior to the expiration dates of the Policies theretofore furnished to Lender, certificates of insurance evidencing the Policies accompanied by evidence reasonably satisfactory to Lender of payment of the premiums due thereunder (the “Insurance Premiums”), shall be delivered by Borrower to Lender.

(c) Any blanket insurance Policy shall specifically allocate to the Property the amount of coverage from time to time required hereunder and shall otherwise provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions of Section 6.1(a) hereof.

(d) All Policies provided for or contemplated by Section 6.1(a) hereof, except for the Policy referenced in Section 6.1(a)(vii) of this Agreement, shall name Borrower as the insured and Lender as the additional insured, as its interests may appear, and in the case of property damage, boiler and machinery, flood and earthquake insurance, shall contain a so-called New York standard non-contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender.

(e) All Policies shall contain clauses or endorsements to the effect that:

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

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

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

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

(f) If at any time Lender is not in receipt of written evidence that all insurance required hereunder is in full force and effect, Lender shall have the right, without notice to Borrower, to take such action as Lender deems reasonably necessary to protect its interest in the Property, including the obtaining of such insurance coverage as Lender in its reasonable discretion deems appropriate after three (3) Business Days notice to Borrower if prior to the date upon which any such coverage will lapse or at any time Lender deems reasonably necessary (regardless of prior notice to Borrower) to avoid the lapse of any such coverage. All premiums incurred by Lender in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and, until paid, shall be secured by the Security Instrument and shall bear interest at the Default Rate.

Section 6.2 Casualty. If the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give prompt written notice of such damage to Lender and shall promptly commence and diligently prosecute the completion of the Restoration of the Property pursuant to Section 6.4 hereof as nearly as possible to the condition the Property was in immediately prior to such Casualty, with such alterations as may be reasonably approved by Lender and otherwise in accordance with Section 6.4 hereof. Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender may, but shall not be obligated to make proof of loss if not made promptly by Borrower. In addition, Lender may participate in any settlement discussions with any insurance companies (and shall approve the final settlement, which approval shall not be unreasonably withheld, conditioned, or delayed) with respect to any Casualty in which the Net Proceeds or the costs of completing the Restoration are equal to or greater than the Availability Threshold and Borrower shall deliver to Lender all instruments required by Lender to permit such participation.

Section 6.3 Condemnation. Promptly after becoming aware of the same, Borrower shall give Lender notice of the actual or threatened commencement of any proceeding for the Condemnation of the Property and shall deliver to Lender copies of any and all papers served in connection with such proceedings. Lender may participate in any such proceedings, and Borrower shall from time to time deliver to Lender all instruments reasonably requested by it to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and shall consult with Lender, its attorneys and experts, and reasonably cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any taking by any public or quasi-public authority through Condemnation or otherwise (including any transfer made in lieu of or in anticipation of the exercise of such taking), Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement and the Debt shall not be reduced until any Award shall have been actually received and applied by Lender, after the deduction of the reasonable and documented out-of-pocket expenses of collection, to the reduction or discharge of the Debt. Lender shall not be limited to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note. If any portion of the Property is taken by a condemning authority, Borrower shall promptly commence and diligently prosecute the Restoration of the Property pursuant to Section 6.4 hereof and otherwise comply with the provisions of Section 6.4 hereof. If the Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt. Notwithstanding the foregoing provisions of this Section 6.3, and Section 6.4 hereof, if the Loan or any portion thereof is included in a REMIC Trust and, immediately following a release of any portion of the Lien of the Security Instrument in connection with a Condemnation (but taking into account any proposed Restoration on the remaining portion of the Property), the Loan to Value Ratio is greater than 125% (such value to be determined, in Lender’s sole discretion, by any commercially reasonable method permitted to a REMIC Trust and, if the Property is a hospitality property, determination of such value shall exclude personal property and going concern value, if any), the principal balance of the Loan must be paid down in an amount sufficient to satisfy the REMIC Requirements, unless the Lender receives an opinion of counsel that if such amount is not paid, the Securitization will not fail to maintain its

status as a REMIC Trust and that the REMIC Trust will not be subject to tax as a result of the related release of such portion of the Lien of the Security Instrument. In connection with the foregoing, the Net Proceeds shall not be available for Restoration and shall be used to pay down the principal balance of the Loan to the extent set forth above (i.e. to the extent required to sufficient to satisfy the REMIC Requirements) and shall thereafter be made available to Borrower for Restoration.

Section 6.4 Restoration. The following provisions shall apply in connection with the Restoration of the Property:

(a) If the Net Proceeds shall be less than the Availability Threshold and the costs of completing the Restoration shall be less than the Availability Threshold, the Net Proceeds shall be disbursed by Lender to Borrower upon receipt, provided that all of the conditions set forth in Section 6.4(b)(i) hereof are met and Borrower delivers to Lender a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement.

(b) If the Net Proceeds are equal to or greater than the Availability Threshold or the costs of completing the Restoration are equal to or greater than the Availability Threshold, Lender shall make the Net Proceeds available for the Restoration in accordance with the provisions of this Section 6.4. The term “Net Proceeds” for purposes of this Section 6.4 means: (i) the net amount of all insurance proceeds received by Lender pursuant to Section 6.1(a)(i), (iv), (ix) and (x) as a result of such damage or destruction, after deduction of its reasonable and documented out-of-pocket costs and expenses (including reasonable counsel fees for outside counsel), if any, in collecting same (“Insurance Proceeds”), or (ii) the net amount of the Award, after deduction of its reasonable and documented out-of-pocket costs and expenses (including reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever the case may be.

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

(A) no Event of Default shall have occurred and be continuing;

(B) (1) in the event the Net Proceeds are Insurance Proceeds, less than thirty-five percent (35%) of the total floor area of the Improvements on the Property has been damaged, destroyed or rendered unusable as a result of such Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds, less than fifteen percent (15%) of the land constituting the Property is taken, and no portion of the Improvements is located on such land;

(C) Leases demising in the aggregate a percentage amount equal to or greater than the Rentable Space Percentage of the total rentable space in the Property which has been demised under executed and delivered Leases in effect as of the date of the occurrence of such Casualty or Condemnation, whichever the case may be, shall remain in full force and effect during and after the completion of the Restoration, notwithstanding the occurrence of any such Casualty or Condemnation, whichever the case may be, and Borrower or Tenant, as applicable

under the respective Lease, shall make all necessary repairs and restorations thereto at their sole cost and expense. The term “Rentable Space Percentage” means (1) in the event the Net Proceeds are Insurance Proceeds, a percentage amount equal to eighty percent (80%) and (2) in the event the Net Proceeds are Condemnation Proceeds, a percentage amount equal to eighty percent (80%);

(D) Borrower shall commence the Restoration as soon as reasonably practicable (but in no event later than ninety (90) days after such Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion;

(E) Lender shall be reasonably satisfied that any operating deficits, including all scheduled payments of principal and interest under the Note, which will be incurred with respect to the Property as a result of the occurrence of any such Casualty or Condemnation, whichever the case may be, will be covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(ii) hereof, if applicable, or (3) by other funds of Borrower;

(F) Lender shall be satisfied that the Restoration will be completed on or before the earliest to occur of (1) six (6) months prior to the Maturity Date, (2) the earliest date required for such completion under the terms of any Leases included within the Rentable Space Percentage calculation set forth in Section 6.4(b)(i)(C) above (and the inclusion of which is required to meet the Rentable Space Percentage), the failure to meet such completion date would permit the Tenant thereunder to terminate such Lease, (3) such time as may be required under all applicable Legal Requirements in order to repair and restore the Property to the condition it was in immediately prior to such Casualty or to as nearly as possible the condition it was in immediately prior to such Condemnation, as applicable, or (4) the expiration of the insurance coverage referred to in Section 6.1(a)(ii) hereof;

(G) the Property and the use thereof after the Restoration will be in compliance with and permitted under all applicable Legal Requirements;

(H) the Restoration shall be done and completed by Borrower in an expeditious and diligent fashion and in material compliance with all applicable Legal Requirements;

(I) such Casualty or Condemnation, as applicable, does not result in the material loss of access to the Property or the Improvements;

(J) the Debt Service Coverage Ratio for the Property, after giving effect to the Restoration, shall be equal to or greater than 1.20 to 1.0;

(K) Borrower shall deliver, or cause to be delivered, to Lender a signed detailed budget approved in writing by Borrower’s architect or engineer stating the entire cost of completing the Restoration, which budget shall be subject to Lender’s approval, which approval shall not be unreasonably withheld, conditioned, or delayed; and

(L) the Net Proceeds together with any cash or cash equivalent deposited by Borrower with Lender are sufficient in Lender’s reasonable discretion to cover the cost of the Restoration.

(ii) The Net Proceeds shall be held by Lender in an Eligible Account and, until disbursed in accordance with the provisions of this Section 6.4(b), shall constitute additional security for the Debt and Other Obligations under the Loan Documents. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt of evidence reasonably satisfactory to Lender that (A) all materials installed and work and labor performed (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, and (B) 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 or encumbrances of any nature whatsoever on the Property which have not either been fully bonded to the satisfaction of Lender and discharged of record or in the alternative fully insured to the satisfaction of Lender by the title company issuing the Title Insurance Policy.

(iii) All plans and specifications required in connection with the Restoration shall be subject to prior review and acceptance in all respects by Lender and by an independent consulting engineer selected by Lender (the “Casualty Consultant”). Lender shall have the use of the plans and specifications and all permits, licenses and approvals required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts under which they have been engaged, shall be subject to prior review and approval by Lender and the Casualty Consultant, which approval shall not be unreasonably withheld, conditioned, or delayed. All reasonable and documented out-of-pocket costs and expenses incurred by Lender in connection with making the Net Proceeds available for the Restoration including reasonable counsel fees and disbursements and the Casualty Consultant’s fees, shall be paid by Borrower.

(iv) In no event shall Lender 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 Casualty Consultant, minus the Casualty Retainage. The term “Casualty Retainage” means an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been completed; provided, that the Casualty Retainage shall be reduced to five percent (5%) of the costs once the Restoration is more than seventy-five percent (75%) completed, as certified by the Casualty Consultant. The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this Section 6.4(b), be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration has been completed in

accordance with the provisions of this Section 6.4(b) and that all approvals necessary for the re-occupancy and use of the Property have been obtained from all appropriate governmental and quasi-governmental authorities, and Lender receives evidence reasonably satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage; provided, however, that Lender shall release the portion of the Casualty Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the Casualty Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the title company issuing the Title Insurance Policy, and Lender receives an endorsement to the Title Insurance Policy insuring the continued priority of the lien of the Security Instrument and evidence of payment of any premium payable for such endorsement. If required by Lender, the release of any such portion of the Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman.

(v) Lender shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.

(vi) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the reasonable opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration, Borrower shall deposit the deficiency (the “Net Proceeds Deficiency”) with Lender before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall be held by Lender 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 pursuant to this Section 6.4(b) shall constitute additional security for the Debt and Other Obligations under the Loan Documents.

(vii) Provided no continuing Event of Default shall then exist, after the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 6.4(b), and the receipt by Lender of evidence reasonably satisfactory to Lender 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 with Lender shall be (1) if a Cash Sweep Period then exists, deposited in the Cash Management Account to be disbursed in accordance with this Agreement, and (2) if no Cash Sweep Period then exists, disbursed to Borrower.

(c) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant to Section 6.4(b)(vii) hereof may be

retained and applied by Lender toward the payment of the Debt in accordance with Section 9(e) of the Note, whether or not then due and payable in such order, priority and proportions as Lender in its reasonable discretion shall deem proper; provided, however, that no Prepayment Consideration or other penalty shall be due or payable in connection with such prepayment, or, at the reasonable discretion of Lender, the same may be paid, either in whole or in part, to Borrower for such purposes as Lender shall approve, in its reasonable discretion.

(d) In the event of foreclosure of the Security Instrument, or other transfer of title to the Property in extinguishment in whole or in part of the Debt all right, title and interest of Borrower in and to the Policies that are not blanket Policies then in force concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Lender or other transferee in the event of such other transfer of title.

ARTICLE VII - RESERVE FUNDS

Section 7.1 Intentionally Omitted.

Section 7.2 Tax and Insurance Escrow Fund. Borrower shall pay to Lender (a) on the Closing Date an initial deposit and (b) on each Payment Date thereafter (i) one-twelfth (1/12) of the Taxes and Other Charges that Lender estimates will be payable during the next ensuing twelve (12) months in order to accumulate with Lender sufficient funds to pay all such Taxes and Other Charges at least thirty (30) days prior to their respective due dates, and (ii) one-twelfth (1/12) of the Insurance Premiums that Lender reasonably estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to accumulate with Lender sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies (said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Escrow Fund”). Provided, however, so long as Borrower maintains blanket policies of insurance in accordance with Section 6.1 hereof, the provisions of this Section with regard to Insurance Premiums shall not be applicable, until and unless Lender elects to apply such provisions following (i) the issuance by any insurer or its agent of any notice of cancellation, termination, or lapse of any insurance coverage required under Section 6.1 hereof, (ii) any cancellation, termination, or lapse of any insurance coverage required under Section 6.1 hereof whether or not any notice is issued, (iii) Lender having not received from Borrower evidence of insurance coverages as required by and in accordance with the terms of Section 6.1 hereof, or (iv) the occurrence of any Event of Default. Lender shall apply the Tax and Insurance Escrow Fund to payments of Taxes and Insurance Premiums required to be made by Borrower pursuant to Section 5.1.2 hereof and under the Security Instrument and shall make all such payments prior to delinquency. In making any payment relating to the Tax and Insurance Escrow Fund, Lender may do so according to any bill, statement or estimate procured from the appropriate public office (with respect to Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof, to the extent that on its face, such bill, statement or estimate reasonably appears to be valid. If the amount of the Tax and Insurance Escrow Fund shall exceed the amounts due for Taxes, Other Charges and Insurance Premiums pursuant to Section 5.1.2 hereof, Lender shall, in its reasonable discretion, return any

excess to Borrower or credit such excess against future payments to be made to the Tax and Insurance Escrow Fund. If at any time Lender reasonably determines that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes, Other Charges and Insurance Premiums by the dates set forth in (a) and (b) above, Lender shall notify Borrower of such determination and Borrower shall increase its monthly payments to Lender by the amount that Lender estimates is sufficient to make up the deficiency at least thirty (30) days prior to the due date of the Taxes and Other Charges or thirty (30) days prior to expiration of the Policies, as the case may be.

Section 7.3 Replacements and Replacement Reserve.

7.3.1 Replacement Reserve Fund. Borrower shall pay to Lender (a) on the Closing Date an initial deposit of $3,392.00 and (b) on each Payment Date thereafter $3,392.00 (the “Replacement Reserve Monthly Deposit”) which amounts are reasonably estimated by Lender in its discretion to be due for replacements and repairs required to be made to the Property during the calendar year (collectively, the “Replacements”). Amounts so deposited shall hereinafter be referred to as Borrower’s “Replacement Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as Borrower’s “Replacement Reserve Account.” Lender may reasonably reassess its estimate of the amount necessary for the Replacement Reserve Fund from time to time, and may increase the monthly amounts required to be deposited into the Replacement Reserve Fund upon thirty (30) days’ notice to Borrower if Lender determines in its reasonable discretion that an increase is necessary to maintain the proper maintenance and operation of the Property. Any interest earned on the amounts on deposit in the Replacement Reserve Account shall be added to and become a part of the Replacement Reserve Fund.

7.3.2 Disbursements from Replacement Reserve Account. (a) Lender shall make disbursements from the Replacement Reserve Account to pay Borrower only for the costs of the Replacements. Lender shall not be obligated to make disbursements from the Replacement Reserve Account to reimburse Borrower for the costs of routine maintenance to the Property, replacements of inventory or for costs which are to be reimbursed from the Rollover Reserve Fund.

(b) Lender shall, upon written request from Borrower and satisfaction of the requirements set forth in this Section 7.3.2, disburse to Borrower amounts from the Replacement Reserve Account necessary to pay for the actual approved costs of Replacements (or the portion thereof so requested) or to reimburse Borrower therefor, upon completion of such Replacements (or, upon partial completion in the case of Replacements made pursuant to Section 7.3.2(e) hereof) as reasonably determined by Lender. In no event shall Lender be obligated to disburse funds from the Replacement Reserve Account if an uncured Event of Default exists.

(c) Each request for disbursement from the Replacement Reserve Account shall be in a form reasonably specified or approved by Lender and shall specify the specific Replacements for which the disbursement is requested and the cost of all contracted labor or other services applicable to each Replacement for which such request for disbursement is made. With each request Borrower shall certify that all Replacements have been made (to the extent completed) in

accordance, in all material respects, with all applicable Legal Requirements of any Governmental Authority having jurisdiction over the Property. Each request for disbursement shall include copies of invoices for all items or materials purchased and all contracted labor or services provided and, unless Lender has agreed to issue joint checks as described below in connection with a particular Replacement, each request shall include evidence reasonably satisfactory to Lender of payment of all such amounts. Except as provided in Section 7.3.2(e) hereof, each request for disbursement from the Replacement Reserve Account shall be made only after completion of the Replacement for which disbursement is requested. Borrower shall provide Lender evidence of completion of the subject Replacement satisfactory to Lender in its reasonable judgment.

(d) Borrower shall pay all invoices in connection with the Replacements with respect to which a disbursement is requested prior to submitting such request for disbursement from the Replacement Reserve Account or, at the request of Borrower, Lender shall issue joint checks, payable to Borrower and the contractor, supplier, materialman, mechanic, subcontractor or other party to whom payment is due in connection with a Replacement. In the case of payments made by joint check, Lender may require Borrower to obtain lien waivers from each contractor, supplier, materialman, mechanic or subcontractor who receives payment in an amount equal to or greater than $25,000.00 for completion of its work or delivery of its materials. Any lien waiver delivered hereunder shall conform to the requirements of applicable law and shall cover all work performed and materials supplied (including equipment and fixtures) for the Property by that contractor, supplier, subcontractor, mechanic or materialman through the date covered by the current reimbursement request (or, if payment to such contractor, supplier, subcontractor, mechanic or materialmen is to be made by a joint check, the release of lien shall be effective through the date covered by the previous release of funds request).

(e) If (i) the cost of a Replacement exceeds $25,000.00, (ii) the contractor performing such Replacement requires periodic payments pursuant to terms of a written contract, and (iii) Lender has approved in writing in advance such periodic payments, a request for reimbursement from the Replacement Reserve Account may be made after completion of a portion of the work under such contract, provided (A) such contract requires payment upon completion of such portion of the work, (B) the materials for which the request is made are on site at the Property and are properly secured or have been installed in the Property, (C) all other conditions in this Agreement for disbursement have been satisfied, (D) funds remaining in the Replacement Reserve Account are, in Lender’s reasonable judgment, sufficient to complete such Replacement and other Replacements when required, and (E) if required by Lender, each contractor or subcontractor receiving payments under such contract shall provide a waiver of lien with respect to amounts which have been paid to that contractor or subcontractor.

(f) Borrower shall not make a request for disbursement from the Replacement Reserve Account more frequently than once in any calendar month and (except in connection with the final disbursement) the total cost of all Replacements in any request shall not be less than $25,000.00.

7.3.3 Performance of Replacements. (a) Borrower shall make Replacements when reasonably required in order to keep the Property in condition and repair consistent with other comparable properties in the same market

segment in the metropolitan area in which the Property is located, and to keep the Property or any portion thereof from deteriorating. Borrower shall complete all Replacements in a good and workmanlike manner as soon as is reasonably practicable following the commencement of making each such Replacement.

(b) Lender reserves the right, at its option, to approve, in its reasonable discretion, all contracts or work orders in excess of $200,000.00 with materialmen, mechanics, suppliers, subcontractors, contractors or other parties providing labor or materials in connection with the Replacements. Upon Lender’s request, Borrower shall assign any of the forgoing contracts or subcontracts to Lender.

(c) In the event Lender determines in its reasonable discretion that any Replacement is not being performed in a workmanlike or timely manner or that any Replacement has not been completed in a workmanlike or timely manner, and such matters are not corrected to the reasonable satisfaction of Lender within sixty (60) days following written notice thereof from Lender to Borrower, Lender shall have the option to withhold disbursement therefor and to proceed under existing contracts or to contract with third parties to complete such Replacement and to apply the Replacement Reserve Fund toward the labor and materials necessary to complete such Replacement.

(d) In order to facilitate Lender’s completion of any Replacements pursuant to Section 7.3.3(c) above, Borrower grants Lender the right to enter, upon reasonable prior notice and during reasonable times, onto the Property, subject to the rights of the Tenants, and perform any and all work and labor necessary to complete such Replacements or employ watchmen to protect the Property from damage. All reasonable and documented out-of-pocket sums so expended by Lender, to the extent not from the Replacement Reserve Fund, shall be deemed to have been advanced under the Loan to Borrower and secured by the Security Instrument. For this purpose Borrower constitutes and appoints Lender its true and lawful attorney in fact with full power of substitution to complete or undertake such Replacements in the name of Borrower. Such power of attorney shall be deemed to be a power coupled with an interest and cannot be revoked. Borrower empowers said attorney in fact as follows: (i) to use any funds in the Replacement Reserve Account for the purpose of making or completing such Replacements; (ii) to make such additions, changes and corrections to such Replacements as shall be reasonably necessary or desirable to complete such Replacements; (iii) to employ such contractors, subcontractors, agents, architects and inspectors as shall be reasonably required for such purposes; (iv) to pay, settle or compromise all existing bills and claims which are or may become Liens against the Property, or as may be reasonably necessary or desirable for the completion of such Replacements, or for clearance of title; (v) to execute all applications and certificates in the name of Borrower which may be required by any of the contract documents; (vi) to prosecute and defend all actions or proceedings in connection with the Property or the rehabilitation and repair of the Property; and (vii) to do any and every act which Borrower might do in its own behalf to fulfill the terms of this Agreement.

(e) Nothing in this Section 7.3.3 shall: (i) make Lender responsible for making or completing any Replacements; (ii) require Lender to expend funds in addition to the Replacement Reserve Fund to make or complete any Replacement; (iii) obligate Lender to proceed with any Replacements; or (iv) obligate Lender to demand from Borrower additional sums to make or complete any Replacement.

(f) In connection with any requested monthly disbursement in excess of $100,000.00, Borrower shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect, or inspector) or third parties making Replacements pursuant to this Section 7.3.3 to enter onto the Property with reasonable prior notice and during normal business hours (subject to the rights of Tenants under their Leases) to inspect the progress of any Replacements and all materials being used in connection therewith, to examine all plans and shop drawings relating to such Replacements which are or may be kept at the Property, and to complete any Replacements made pursuant to this Section 7.3.3. Borrower shall cause all contractors and subcontractors to reasonably cooperate with Lender or Lender’s representatives or such other persons described above in connection with inspections described in this Section 7.3.3(f) or the completion of Replacements pursuant to this Section 7.3.3.

(g) In connection with any requested monthly disbursement in excess of $100,000.00, Lender may require an inspection of the Property at Borrower’s reasonable expense prior to making a monthly disbursement from the Replacement Reserve Account in order to verify completion or progress of the Replacements (or the portion thereof) for which reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender or may require a copy of a certificate of completion by an independent qualified professional reasonably acceptable to Lender prior to the disbursement of any amounts from the Replacement Reserve Account. Borrower shall pay the reasonable and documented expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional.

(h) The Replacements and all materials, equipment, fixtures, or any other item comprising a part of any Replacement shall be constructed, installed or completed, as applicable, free and clear of all mechanic’s, materialmen’s or other liens (except for those Liens existing on the date of this Agreement which have been approved in writing by Lender); subject, however, to Borrower’s right to contest such Liens in accordance with the terms and conditions of the Loan Documents.

(i) In connection with any requested monthly disbursement in excess of $100,000.00, Lender may require Borrower to provide Lender with a search of title to the Property effective to the date of the disbursement, which search shows that no mechanic’s or materialmen’s liens or other liens of any nature have been placed against the Property since the date of recordation of the related Security Instrument and that title to the Property is free and clear of all Liens (other than the lien of the related Security Instrument and any other Liens previously approved in writing by Lender, if any) or such Liens as are being contested by Borrower in accordance with the terms and conditions of the Loan Documents.

(j) All Replacements shall comply, in all material respects, with all applicable Legal Requirements of all Governmental Authorities having jurisdiction over the Property and applicable insurance requirements including applicable building codes, special use permits, environmental regulations, and requirements of insurance underwriters.

(k) In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk, and public liability insurance and other insurance to the extent required under applicable law in connection with a particular Replacement. All such policies shall be in form and amount reasonably satisfactory to Lender. All such policies which can be endorsed with standard mortgagee clauses making loss payable to Lender or its assigns shall be so endorsed. Certificates of Insurance evidencing such policies shall be delivered to Lender upon request.

7.3.4 Failure to Make Replacements. (a) It shall be an Event of Default under this Agreement if Borrower fails to comply, in all material respects, with any provision of this Section 7.3 and such failure is not cured within thirty (30) days after notice thereof from Lender to Borrower. Upon the occurrence and during the continuance of such an Event of Default, Lender may use the Replacement Reserve Fund (or any portion thereof) for any purpose, including completion of the Replacements as provided in Section 7.3.3, or for any other repair or replacement to the Property or toward payment of the Debt in such order, proportion and priority as Lender may determine in its reasonable discretion. Lender’s right to withdraw and apply the Replacement Reserve Fund shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents.

(b) Nothing in this Agreement shall obligate Lender to apply all or any portion of the Replacement Reserve Fund on account of an Event of Default to payment of the Debt or in any specific order or priority.

7.3.5 Balance in the Replacement Reserve Account. The insufficiency of any balance in the Replacement Reserve Account shall not relieve Borrower from its obligation to fulfill, in all material respects, all preservation and maintenance covenants in the Loan Documents.

Section 7.4 Rollover Reserve.

7.4.1 Deposits to Rollover Reserve Fund. Borrower shall pay to Lender (a) on the Closing Date an initial deposit of $250,000.00 and (b) on each Payment Date thereafter $16,959.00 (the “Rollover Reserve Monthly Deposit”), which amounts shall be deposited with and held by Lender for tenant improvement and leasing commission obligations incurred following the date hereof. Amounts so deposited, and, if applicable, any amount resulting from a draw on the Rollover Reserve Letter of Credit, shall hereinafter be referred to as the “Rollover Reserve Fund” and the account to which such amounts are held shall hereinafter be referred to as the “Rollover Reserve Account.” Borrower shall also pay to Lender, for deposit into the Rollover Reserve Account, all fees and other payments made to Borrower in connection with or relating to the rejection, buy-out, termination, surrender or cancellation of any Lease (excluding, however, any such Fee related to the Morgan Stanley Premises). Notwithstanding the aforementioned, the aggregate amount of the Rollover Reserve Fund and the amount of the Rollover Reserve Letter of Credit remaining available for draws shall not exceed $525,000.00 in the aggregate (the “Rollover Reserve Cap”) on any Payment Date (after giving effect to the payment of the Rollover Reserve Monthly Deposit) and accordingly, to the extent a Rollover Reserve Monthly Deposit would

result in the aggregate amount of Rollover Reserve Funds in the Rollover Reserve Account and the amount of the Rollover Reserve Letter of Credit remaining available for draws exceeding the Rollover Reserve Cap, such Rollover Reserve Monthly Deposit shall be decreased by an amount equal to such excess or if applicable, eliminated. Any interest earned on the amounts on deposit in the Rollover Reserve Account shall be added to and become a part of the Rollover Reserve Fund.

7.4.2 Withdrawal of Rollover Reserve Funds. Provided no Event of Default hereunder then exists, Lender shall make disbursements from the Rollover Escrow Fund for tenant improvement and leasing commission obligations incurred by Borrower. All such expenses shall be approved by Lender in its reasonable discretion. Lender shall make disbursements as requested by Borrower on a monthly basis in increments of no less than $5,000.00 upon delivery by Borrower of Lender’s standard form of draw request accompanied by copies of paid invoices for the amounts requested (or the unpaid invoices to be paid therewith) and, with respect to any single disbursement in excess of $50,000.00, if required by Lender, lien waivers and releases from all parties furnishing materials or services in connection with the requested payment. In connection with any requested monthly disbursement in excess of $50,000.00, Lender may require an inspection of the Property at Borrower’s expense prior to making such disbursement in order to verify completion of improvements for which reimbursement is sought.

Section 7.5 Excess Cash Flow Reserve Fund.

7.5.1 Deposits to Excess Cash Flow Reserve Account. During a Cash Sweep Period caused by a DSCR Trigger Event, Borrower shall deposit with Lender all Excess Cash Flow in the Cash Management Account, which shall be held by Lender as additional security for the Loan and amounts so held shall be hereinafter referred to as the “Excess Cash Flow Reserve Fund” and the account to which such amounts are held shall hereinafter be referred to as the “Excess Cash Flow Reserve Account.”

7.5.2 Release of Excess Cash Flow Reserve Funds. Upon the occurrence of a Cash Sweep Event Cure, all Excess Cash Flow Reserve Funds shall be deposited into the Cash Management Account to be disbursed to Borrower in accordance with the Cash Management Agreement. Any Excess Cash Flow Reserve Funds remaining after the Debt has been paid in full shall be paid to Borrower.

Section 7.6 Reserve Funds, Generally. (a) Borrower grants to Lender a security interest in each of the Reserve Funds and any and all monies now or hereafter deposited in each Reserve Fund as additional security for payment of the Debt. Until expended or applied in accordance herewith, the Reserve Funds shall constitute additional security for the Debt.

(b) Upon the occurrence and during the continuance of an Event of Default, Lender may, in addition to any and all other rights and remedies available to Lender, apply any sums then present in any or all of the Reserve Funds to the payment of the Debt in any order in its discretion.

(c) The Reserve Funds shall not constitute trust funds and may be commingled with other monies held by Lender. The Reserve Funds shall be held in an Eligible Account in Permitted Investments as directed by Lender or Lender’s Servicer. Unless expressly provided for in this Article VII, all interest on a Reserve Fund shall not be added to or become a part thereof and shall be the sole property of and shall be paid to Lender. Borrower shall be responsible for payment of any federal, state or local income or other tax applicable to the interest earned on the Reserve Funds credited or paid to Borrower.

(d) Borrower shall not, without obtaining the prior written consent of Lender, further pledge, assign or grant any security interest in any Reserve Fund or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.

(e) Lender and Servicer shall not be liable for any loss sustained on the investment of any funds constituting the Reserve Funds. Borrower shall indemnify Lender and Servicer and hold Lender and Servicer harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable attorneys’ fees and expenses) arising from or in any way connected with the Reserve Funds or the performance of the obligations for which the Reserve Funds were established, except to the extent arising out of the gross negligence, willful misconduct or bad faith of Lender. Borrower shall assign to Lender all rights and claims Borrower may have against all persons or entities supplying labor, materials or other services which are to be paid from or secured by the Reserve Funds; provided, however, that Lender may not pursue any such right or claim unless an Event of Default has occurred and remains uncured.

(f) The required monthly deposits into the Reserve Funds and the Monthly Debt Service Payment Amount, shall be added together and shall be paid as an aggregate sum by Borrower to Lender.

(g) Any amount remaining in the Reserve Funds after the Debt has been paid in full shall be promptly returned to Borrower.

Section 7.7 Morgan Stanley Reserve.

7.7.1 Deposits to Morgan Stanley Reserve Fund. Within one (1) Business Day after its receipt of the same, Borrower shall pay to Lender any fee and other payments made to Borrower in connection with or relating to the rejection, buy-out, termination, surrender or cancellation of the Lease of Morgan Stanley (the “Morgan Stanley Reserve Deposit”), which amount shall be held by Lender as additional security for the Loan. Amounts so held shall be hereinafter referred to as the “Morgan Stanley Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as the “Morgan Stanley Reserve Account”. Any interest earned on the amounts on deposit in the Morgan Stanley Reserve Account shall be added to and become a part of the Morgan Stanley Reserve Fund.

7.7.2 Release of Morgan Stanley Reserve Funds. Provided no Event of Default hereunder then exists, Lender shall make disbursements from the Morgan Stanley Reserve Fund to fund tenant improvement costs, leasing commission costs and market free rent obligations, to the extent incurred by Borrower in connection with its re-leasing all or part of the Morgan Stanley Premises. All such costs shall be approved by Lender in its reasonable discretion. Lender shall make disbursements as requested by Borrower on a monthly basis in increments of no less than $5,000.00 upon delivery by Borrower of Lender’s standard form of draw request accompanied by copies of paid invoices for the amounts requested (or the unpaid invoices to be paid therewith) and, with respect to any single disbursement in excess of $50,000.00, if required by Lender, lien waivers and releases from all parties furnishing materials or services in connection with the requested payment. In connection with any requested monthly disbursement in excess of $50,000.00, Lender may require an inspection of the Property at Borrower’s expense prior to making such disbursement in order to verify completion of improvements for which reimbursement is sought. So long as no Event of Default or uncured Cash Sweep Event then exists, Lender shall disburse the full remaining amount of the Morgan Stanley Reserve Fund to Borrower upon Borrower’s delivery to Lender of (a) fully executed Leases with one or more Tenant(s) covering the entire net leaseable area of the Morgan Stanley Premises, and (b) evidence, in form and substance satisfactory to Lender (including one or more tenant estoppels), confirming that (i) such Tenant(s) are (A) in full possession and occupancy not less than ninety percent (90%), in the aggregate, of the Morgan Stanley Premises, (B) open for business therein, and (C) paying full, unabated contractual rent pursuant to their respective Lease, without right of offset or free rent credit, (ii) Borrower has completed any tenant improvements required to be completed by Borrower with respect to the Morgan Stanley Premises, such tenant improvements have been accepted by such Tenant(s), and that that all of the costs and expenses associated with such tenant improvements have been fully paid, or, if applicable, reimbursed by Borrower to such Tenant(s), (iii) such Tenant(s) have received any and all amounts or reimbursements required to be paid to them pursuant to their respective Lease, and (iv) all leasing commissions related to such Tenant(s) have been fully paid.

Section 7.8 Major Tenant Rollover Reserve.

7.8.1 Deposits to Major Tenant Rollover Reserve Fund. During a Cash Sweep Period caused by a Major Tenant Trigger Event, Borrower shall deposit with Lender all Excess Cash Flow, which amounts shall be held by Lender for tenant improvement and leasing commission obligations incurred in connection with the leasing of any or all of the Major Tenant Premises. Amounts so deposited, shall hereinafter be referred to as the “Major Tenant Rollover Reserve Fund” and the account to which such amounts are held shall hereinafter be referred to as the “Major Tenant Rollover Reserve Account”. Borrower shall also pay to Lender, for deposit into the Major Tenant Rollover Reserve Account, all fees and other payments made to Borrower in connection with or relating to the rejection, buy-out, termination, surrender or cancellation of any Major Tenant Lease. Any interest earned on the amounts on deposit in the Major Tenant Reserve Account shall be added to and become a part of the Major Tenant Reserve Fund.

7.8.2 Withdrawal of Major Tenant Rollover Reserve Fund. Provided no Event of Default hereunder exists and is then continuing, Lender shall make disbursements from the Major Tenant Rollover Reserve Fund for tenant improvement and leasing commission obligations incurred by Borrower incurred in connection with the leasing of any or all of the Major Tenant Premises. All such expenses shall be approved by Lender in its reasonable discretion. Lender shall make disbursements as requested by Borrower on a monthly basis in increments of no less than $5,000.00 upon delivery by Borrower of Lender’s standard form of draw request accompanied by copies of paid invoices for the amounts requested (or the unpaid invoices to be paid therewith) and, with respect to any single disbursement in excess of $50,000.00, if required by Lender, lien waivers and releases from all parties furnishing materials or services in connection with the requested payment. In connection with any requested monthly disbursement in excess of $50,000.00, Lender may require an inspection of the Property at Borrower’s expense prior to making any disbursement in order to verify completion of improvements for which reimbursement is sought. Upon the occurrence of a Major Tenant Cure Event for the last then existing Major Tenant Trigger Event, so long as no uncured Event of Default or other uncured Cash Sweep Event then exists, all Major Tenant Rollover Reserve Funds in the Major Tenant Rollover Reserve Account shall be disbursed to Borrower.

ARTICLE VIII - DEFAULTS

Section 8.1 Event of Default. (a) Each of the following events shall constitute an event of default hereunder (an “Event of Default”):

(i) if: (A) Borrower fails to make full and punctual payment of any Monthly Debt Service Payment Amount or any other amount payable on a monthly basis under the Note, this Loan Agreement, the Security Instrument or any other Loan Document within five (5) days of the date on which such payment was due; (B) Borrower fails to pay all amounts payable on the Maturity Date on such date; or (C) any portion of the Debt (other than any portion of the Debt described in subclauses A or B in this Section 8.1(i)) is not paid when due, provided, however, any such nonpayment described in this subclause C shall not be deemed to be an Event of Default until five (5) days (or such longer period as is expressly set forth in the Loan Documents with respect to such payment) after Lender’s written notice to Borrower demanding payment of the same;

(ii) if any of the Taxes or Other Charges are not paid on the date the same are due and payable, unless there are sufficient funds in the Tax and Insurance Escrow Fund on such date and Lender fails to pay same out of the Tax and Insurance Escrow Fund;

(iii) if certified copies of the Policies are not delivered to Lender upon request, or if the Policies are not kept in full force and effect (provided that no Event of Default shall occur if the Policies are terminated as a result of a failure to pay the applicable premiums on the date the same are due, sufficient funds were present in the Tax and Insurance Escrow Fund on such date and Lender fails to pay same out of the Tax and Insurance Escrow Fund);

(iv) if Borrower Transfers or otherwise encumbers any portion of the Property without Lender’s prior written consent in violation of the provisions of this Agreement and Article 6 of the Security Instrument;

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

(vi) if Borrower or Principal shall make an assignment for the benefit of creditors;

(vii) if (A) Borrower, Principal, Guarantor or any other guarantor or indemnitor under any guarantee issued in connection with the Loan shall commence any case, proceeding or other action (I) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (II) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower, Principal, Guarantor or any other guarantor or indemnitor shall make a general assignment for the benefit of its creditors; or (B) there shall be commenced against Borrower, Principal, Guarantor or any other guarantor or indemnitor any case, proceeding or other action of a nature referred to in clause (A) above that is not dismissed within ninety (90) days of filing; or (C) there shall be commenced against the Borrower, Principal, Guarantor or any other guarantor or indemnitor any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that is not discharged or dismissed within ninety (90) days of filing; or (D) the Borrower, Principal, Guarantor or any other guarantor or indemnitor shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (A), (B), or (C) above; or (E) the Borrower, Principal, Guarantor or any other guarantor or indemnitor shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

(viii) if Borrower attempts to assign its rights under this Agreement or any of the other Loan Documents or any interest herein or therein in contravention of the Loan Documents;

(ix) if Borrower breaches any covenant contained in Section 4.1.30 hereof or any negative covenant contained in Section 5.2 hereof, provided, however, any such breach or violation shall not be deemed to be an Event of Default hereunder if (i) such breach or violation was inadvertent or immaterial, is susceptible of cure and would not be reasonably likely to result in a in a material adverse effect on Borrower, the Property, Lender or the Loan and (ii) within ten (10) Business Days of the earlier of (1) notice of such breach or violation from Lender or (2) the date Borrower becomes aware of such breach or violation, Borrower cures such beach or violation and provides Lender with satisfactory evidence of same;

(x) with respect to any term, covenant or provision set forth herein which specifically contains a notice requirement or grace period, if Borrower shall be in default under such term, covenant or condition after the giving of such notice or the expiration of such grace period;

(xi) if any of the assumptions contained in the Insolvency Opinion delivered to Lender in connection with the Loan, or in any Additional Insolvency Opinion delivered subsequent to the closing of the Loan, is or shall become untrue in any material respect, provided, however, the same shall not be deemed to be an Event of Default hereunder if the same is cured within ten (10) Business Days of the date Borrower becomes aware of it;

(xii) if a material default has occurred and continues beyond any applicable cure period under the Management Agreement (or any Replacement Management Agreement) and as a result thereof the Manager thereunder terminates or cancels the Management Agreement (or any Replacement Management Agreement) and Borrower fails to replace the Manager with a Qualified Manager pursuant to a Replacement Management Agreement within thirty (30) days following the termination or cancellation of the Management Agreement;

(xiii) if Borrower shall continue to be in Default under any of the terms, covenants or conditions of Section 9.1 hereof, or fails to reasonably cooperate with Lender in connection with a Securitization pursuant to the provisions of Section 9.1 hereof, for five (5) days after notice to Borrower from Lender;

(xiv) if Borrower shall continue to be in default under any of the other terms, covenants or conditions of this Agreement not specified in subsections (i) to (xiii) above, for ten (10) days after notice to Borrower from Lender, in the case of any Default which can be cured by the payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other Default; provided, however, that if such non monetary Default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceed sixty (60) days;

(xv) if there shall be default under any of the other Loan Documents beyond any applicable cure periods contained in such documents, whether as to Borrower or the Property, or if any other such event shall occur or condition shall exist, if the effect of such default, event or condition is to accelerate the maturity of any portion of the Debt or to permit Lender to accelerate the maturity of all or any portion of the Debt; or

(xvi) Borrower shall be in default under any other deed of trust, mortgage or security agreement covering any part of the Property whether it be superior or junior in priority to the Security Instrument (it not being implied by this clause that any such encumbrance will be permitted).

(b) During the continuance of an Event of Default (other than an Event of Default described in clauses (vi), (vii) or (viii) above), in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, Lender may take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and the Property, including declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and any or all of the Property, including all rights or remedies available at law or in equity; and upon any Event of Default described in clauses (vi), (vii) or (viii) above, the Debt and Other Obligations of Borrower hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives, to the extent permitted under applicable law, any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.

Section 8.2 Remedies. (a) Upon the occurrence and during the continuance of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Debt shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to all or any part of the Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singularly, successively, together or otherwise, at such time and in such order as Lender may determine in its discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents. Without limiting the generality of the foregoing, Borrower agrees that if an Event of Default is continuing, to the extent permitted under applicable law (i) Lender is not subject to any “one action” or “election of remedies” law or rule, and (ii) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Property and the Security Instrument has been foreclosed, sold or otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.

(b) With respect to Borrower and the Property, nothing contained herein or in any other Loan Document shall be construed as requiring Lender to resort to the Property for the satisfaction of any of the Debt in any preference or priority, and Lender may seek satisfaction out of the Property, or any part thereof, in its discretion in respect of the Debt. In addition, Lender shall have the right from time to time to partially foreclose the Security Instrument in any manner and for any amounts secured by the Security Instrument then due and payable as determined by Lender in its discretion including the following circumstances: (i) during the continuance of an Event of Default in the payment of one or more scheduled payments of principal and interest, Lender may foreclose the Security Instrument to recover such delinquent payments or (ii) in the event Lender elects to accelerate less than the entire Outstanding Principal

Balance of the Loan, Lender may foreclose the Security Instrument to recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by the Security Instrument as Lender may elect. Notwithstanding one or more partial foreclosures, the Property shall remain subject to the Security Instrument to secure payment of sums secured by the Security Instrument and not previously recovered.

(c) Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such denominations as Lender shall determine in its discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and such other documents as Lender shall reasonably request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents reasonably necessary or desirable to effect the aforesaid severance, Borrower ratifying all that its said attorney shall do by virtue thereof; provided, however, Lender shall not make or execute any such documents under such power until five (5) days after notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower shall be obligated to pay any reasonable and documented out-of-pocket costs or expenses incurred in connection with the preparation, execution, recording or filing of the Severed Loan Documents and the Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the Loan Documents and any such representations and warranties contained in the Severed Loan Documents will be given by Borrower only as of the Closing Date.

(d) As used in this Section 8.2, a “foreclosure” shall include, without limitation, any sale by power of sale to the extent permitted by applicable law.

Section 8.3 Remedies Cumulative; Waivers. The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singularly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s discretion. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.

ARTICLE IX - SPECIAL PROVISIONS

Section 9.1 Securitization.

9.1.1 Sale of Notes and Securitization. (a) Borrower acknowledges and agrees that Lender may sell all or any portion of the Loan and the Loan Documents, or issue one or more participations therein, or consummate one or more private or public securitizations of rated single- or multi-class securities (the “Securities”) secured by or evidencing ownership interests in all or any portion of the Loan and the Loan Documents or a pool of assets that include the Loan and the Loan Documents (such sales, participations or securitizations, collectively, a “Securitization”).

(b) At the request of Lender, and to the extent not already required to be provided by or on behalf of Borrower under this Agreement, Borrower shall use reasonable efforts to provide information not in the possession of Lender or which may be reasonably required by Lender or take other actions reasonably required by Lender, in each case in order to satisfy the market standards to which Lender customarily adheres or which may be reasonably required by prospective investors or the Rating Agencies in connection with any such Securitization. Lender shall have the right to provide to prospective investors and the Rating Agencies any information in its possession, including financial statements relating to Borrower, Guarantor, if any, the Property and any Tenant of the Improvements. Borrower acknowledges that certain information regarding the Loan and the parties thereto and the Property may be included in a private placement memorandum, prospectus or other disclosure documents. Borrower agrees that each of Borrower, Principal, Guarantor and their respective officers and representatives, shall, at Lender’s request, reasonably cooperate with Lender’s efforts to arrange for a Securitization in accordance with the market standards to which Lender customarily adheres or which may be required by prospective investors or the Rating Agencies in connection with any such Securitization. Borrower, Principal and Guarantor agree to review, at Lender’s request in connection with the Securitization, the Disclosure Documents as such Disclosure Documents relate to Borrower, Principal, Guarantor, the Property and the Loan, including, the sections entitled “Risk Factors,” “Special Considerations,” “Description of the Security Instrument,” “Description of the Mortgage Loan and Mortgaged Property,” “The Manager,” “The Borrower,” and “Certain Legal Aspects of the Mortgage Loan,” and shall confirm, each to its actual knowledge, that the factual statements and representations contained in such sections and such other information in the Disclosure Documents (to the extent such information relates to, or is based on, or includes any information regarding the Property, Borrower, Guarantor, Manager or the Loan) do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

(c) Borrower agrees to make upon Lender’s written request, without limitation, all reasonable structural or other changes to the Loan (including delivery of one or more new component notes to replace the original note or modify the original note to reflect multiple components of the Loan and such new notes or modified note may have different interest rates and amortization schedules), reasonable modifications to any documents evidencing or securing the Loan, creation of one or more mezzanine loans (including amending Borrower’s organizational structure to provide for one or more mezzanine borrowers), delivery of opinions of counsel acceptable to the Rating Agencies or potential investors and addressing such matters as the Rating Agencies or potential investors may require; provided, however, that in creating such new notes or modified notes or mezzanine notes Borrower shall not be required to modify ((i) modify the initial weighted average interest rate payable under the Note, (ii) modify the

stated maturity of the Note, (iii) modify the aggregate amortization of principal under the Note, (iv) modify any other material economic term of the Loan (including, without limitation, any prepayment rights), (v) decrease the time periods during which Borrower is permitted to perform its obligations under the Loan Documents, or (vi) make any other modification the effect of which would be to materially increase Borrower’s obligations or liabilities under the Loan Documents, or to materially reduce Borrower’s rights or any obligations owed to Borrower under the Loan Documents. In connection with the foregoing, Borrower covenants and agrees to modify the Cash Management Agreement to reflect the newly created components loans or mezzanine loans.

(d) To the extent not otherwise required to be delivered to Lender hereunder, if requested by Lender, Borrower shall provide to Lender, upon request and at no out-of-pocket cost to Borrower, with any financial statements, or financial, statistical or operating information not then in the possession of Lender, as Lender shall determine to be required pursuant to Regulation AB under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any amendment, modification or replacement thereto or other legal requirements in connection with any private placement memorandum, prospectus or other disclosure documents or any filing pursuant to the Exchange Act in connection with the Securitization or as shall otherwise be reasonably requested by Lender.

(e) Borrower hereby appoints Lender its attorney-in-fact with full power of substitution (which appointment shall be deemed to be coupled with an interest and to be irrevocable until the Loan is paid and the Security Instrument is discharged of record, with Borrower hereby ratifying all that its said attorney shall do by virtue thereof) to execute and deliver all documents and do all other acts and things reasonably necessary or desirable to effect any Securitization authorized hereunder; provided, however, that unless an Event of Default exists, Lender shall not execute or deliver any such documents or do any such acts or things under such power until five (5) days after written notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower’s failure to deliver any document, or to take any other action, that Borrower is obligated to take hereunder with respect to any Securitization for a period five (5) days after notice of such failure is delivered by Lender shall, at Lender’s option, constitute an Event of Default hereunder.

9.1.2 Securitization Costs. All reasonable and documented third party costs and expenses incurred by Borrower and Guarantor in connection with Borrower’s compliance with this Section 9.1 (including the fees and expenses of the Rating Agencies) shall be paid or reimbursed by Lender.

Section 9.2 Right To Release Information. Following the occurrence of any Event of Default, Lender may forward to any broker, prospective purchaser of the Property or the Loan, or other person or entity all documents and information which Lender now has or may hereafter acquire relating to the Debt, Borrower, any Guarantor, any indemnitor, the Property and any other matter in connection with the Loan, whether furnished by Borrower, any Guarantor, any indemnitor or otherwise, as Lender reasonably determines necessary or desirable. Borrower irrevocably waives any and all rights it may have to limit or prevent such disclosure, including any right of privacy or any claims arising therefrom.

Section 9.3 Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the obligations contained in the Note, this Agreement, the Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Security Instrument and the other Loan Documents, or in the Property, the Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Security Instrument and the other Loan Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Security Instrument or the other Loan Documents. The provisions of this Section shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (ii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Security Instrument; (iii) affect the validity or enforceability of any guaranty, indemnity or similar agreement or undertaking made in connection with the Loan or any of the rights and remedies of Lender thereunder; (iv) impair the right of Lender to obtain the appointment of a receiver; (v) impair the enforcement of any assignment of leases contained in the Security Instrument and any other Loan Documents; or (vi) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property; provided, that any such judgment shall be enforced solely against and to the extent of Borrower’s interest in the Property.

(b) Nothing contained herein shall in any manner or way release, affect or impair the right of Lender to recover, and Borrower shall be fully and personally liable and subject to legal action, for any loss, damage, claim or other obligation and any reasonable and documented out-of-pocket costs and expenses (including attorneys’ fees for outside counsel and court costs) actually incurred or suffered by Lender arising out of or in connection with the following:

(i) fraud or willful misrepresentation by Borrower, Principal, Guarantor or any of their Affiliates in connection with the Loan;

(ii) the gross negligence or willful misconduct of Borrower, Principal or Guarantor, or any Affiliate of the foregoing, in connection with the Loan;

(iii) material physical waste of the Property, excluding any failure to maintain or make repairs or replacements to the Property because there was insufficient cash flow available from the Property and physical waste resulting from Lender failing to make funds available to maintain and make repairs and replacements to the Property in violation of the Loan Documents;

(iv) during the continuance of an Event of Default, the removal or disposal of any portion of the Property in violation of the terms of the Loan Documents;

(v) the misapplication in violation of the terms of the Loan Documents, misappropriation, or conversion by Borrower, any of its Affiliates, Principal or Guarantor of (A) any Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, (B) any Awards received in connection with a Condemnation of all or a portion of the Property, (C) any Rents or other Property income or collateral proceeds in their respective possession during the continuance of an Event of Default, or (D) any Rents paid more than one month in advance (including security deposits);

(vi) during the continuance of an Event of Default, the failure to apply Rents or other Property income, whether collected before or after such Event of Default, to the ordinary, customary, and necessary expenses of operating the Property or, upon demand, to deliver such rents or other Property income to Lender (provided that the foregoing shall not apply to any Rents or other Property income distributed or expended prior to the occurrence of the Event of Default);

(vii) (A) failure to pay charges for labor or materials or other charges or judgments that can create Liens on any portion of the Property unless Borrower is contesting such Liens or underlying charges for labor and materials in accordance with the Loan Documents, or (B) failure to maintain insurance or to pay taxes and assessments unless (1) Lender is escrowing funds therefor and fails to make such payments or has taken possession of the Property following an Event of Default, has received all Rents from the Property applicable to the period for which such insurance, taxes or other items are due, and thereafter fails to make such payments or (2) there is insufficient cash flow from the Property to pay such taxes, assessments, and insurance premiums;

(viii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure of the Property or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;

(ix) intentionally omitted;

(x) any failure by Borrower to comply with any of the representations, warranties or covenants set forth in Sections 4.1.37 or 5.1.19 hereof;

(xi) any failure by Borrower to reasonably cooperate in good faith, as and when required pursuant to the Loan Documents, in establishing the cash management system described in Section 2.7 hereof, the Clearing Account Agreement and the Cash Management Agreement, including the creation of the Cash Management Account and the Clearing Account;

(xii) any failure by Borrower to permit on-site inspections of the Property in accordance with the terms and provisions of the Loan Documents; or

(xiii) any failure by Borrower to appoint a new property manager upon the request of Lender as permitted under this Agreement.

(i) Borrower shall be personally liable for the Debt if (and only if) (A) Borrower fails to obtain Lender’s prior written consent to any Transfer, to the extent required by this Agreement or the Security Instrument; (B) Borrower fails to obtain Lender’s prior written consent, to the extent required under the Loan Documents, to any Indebtedness or voluntary Lien encumbering the Property; (C) Borrower shall at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower fails to maintain its status as a Special Purpose Entity or comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof, each as required by, and in accordance with, the terms and provisions of this Agreement or the Security Instrument; (E) Borrower or any Principal admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due; (F) Borrower fails to make the first full monthly payment of principal and interest on or before the first Payment Date; (G) Borrower or any Principal files, consents to, or acquiesces in a petition for bankruptcy, insolvency, dissolution or liquidation under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or there is a filing of an involuntary petition against Borrower or any Principal under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in which Borrower or Guarantor or any Principal colludes with, or otherwise assists any party in connection with such filing, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or such Principal from any party; (H) the Property or any part thereof shall at any time hereafter become property of the estate or an asset in (1) a voluntary bankruptcy, insolvency, receivership, liquidation, winding up, or other similar type of proceeding, or (2) an involuntary bankruptcy or insolvency proceeding (other than one filed by Lender) in which Borrower or Guarantor or any Principal colludes with, or otherwise assists any party in connection with such filing, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or such Principal from any party.

(d) Nothing herein shall be deemed to constitute a waiver by Lender of any right Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt.

Section 9.4 Matters Concerning Manager. If (a) an Event of Default hereunder has occurred and remains uncured, (b) Manager shall become subject to a Bankruptcy Action, (c) a material default occurs beyond any applicable notice and cure period under the Management Agreement, or (d) the occurrence of a DSCR Trigger Event, Borrower shall, at the request of Lender, terminate the Management Agreement and replace the Manager with a Qualified Manager pursuant to a Replacement Management Agreement, it being understood and agreed that the management fee for such Qualified Manager shall not exceed then prevailing market rates.

Section 9.5 Servicer. At the option of Lender, the Loan may be serviced by a master servicer, primary servicer, special servicer or trustee (any such master servicer, primary servicer, special servicer, and trustee, together with its agents, nominees or designees, are collectively referred to as “Servicer”) selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to Servicer pursuant to a pooling and servicing agreement, servicing agreement, special servicing agreement or other agreement providing for the servicing of one or more mortgage loans (collectively, the “Servicing Agreement”) between Lender and Servicer. Borrower shall be responsible for any reasonable and customary set up fees or any other initial costs relating to or arising under the Servicing Agreement (to the extent relating directly to the Loan), but Borrower shall not be responsible for payment of the regular monthly master servicing fee or trustee fee due to Servicer under the Servicing Agreement or any fees or expenses required to be borne by, and not reimbursable to, Servicer. Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on demand for the following reasonable and documented out-of-pocket costs and expenses payable by Lender to Servicer as a result of the Loan becoming specially serviced following an Event of Default: (i) any liquidation fees that are due and payable to Servicer under the Servicing Agreement in connection with the exercise of any or all remedies permitted under this Agreement, (ii) any workout fees and special servicing fees that are due and payable to Servicer under the Servicing Agreement, which fees may be due and payable under the Servicing Agreement on a periodic or continuing basis, and which may be payable to a special servicer, in amounts not to exceed reasonable and customary amounts, upon return of the Loan by the special servicer to the master servicer, and (iii) the costs of all amounts owed to any third-party contractor in connection with the Servicer obtaining any third-party report, including any property inspections or appraisals of the Properties (or any updates to any existing inspection or appraisal) that Servicer reasonably determines to obtain or may be required to obtain (other than the cost of regular annual inspections required to be borne by Servicer under the Servicing Agreement).

ARTICLE X - MISCELLANEOUS

Section 10.1 Survival. This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long as all or any of the Debt is outstanding and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the legal representatives, successors and assigns of such party. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Lender.

Section 10.2 Lender’s Discretion. Whenever pursuant to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole and absolute discretion of Lender and shall be final and conclusive.

Section 10.3 Governing Law. (a) LENDER HAS OFFICES IN THE STATE OF NEW YORK AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK (“GOVERNING STATE”), WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b) ANY ACTION TO ENFORCE THE LIEN OF THIS MORTGAGE BY FORECLOSURE MUST BE BROUGHT IN THE STATE AND COUNTY IN WHICH THE MORTGAGED PROPERTY IS SITUATE. ANY IN PERSONAM LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS (“ACTION”) MAY AT LENDER’S OPTION BE INSTITUTED IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE ELECTION OF LENDER BE TRANSFERRED TO) ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE OR FORUM NON CONVENIENS OF ANY SUCH ACTION, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY ACTION. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

CT CORPORATION SYSTEM

111 8TH AVENUE

NEW YORK, NEW YORK 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH ACTION IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

Section 10.4 Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any other Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.

Section 10.5 Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under the Note or under any other Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount.

Section 10.6 Notices. All notices, consents, approvals and requests required or permitted hereunder or under any other Loan Document shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) certified or registered United States mail, postage prepaid, return receipt requested or (b) expedited

prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, or (c) by telecopier (with answer back acknowledged) and with a second copy to be sent to the intended recipient by any other means permitted under this Section, addressed as follows (or at such other address and Person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section):


If to Lender:		KeyBank National Association
		11501 Outlook, Suite 300
		Overland Park, Kansas 66211
		Facsimile No.: 877-379-1625
		Attention: Loan Servicing

with a copy to:		Daniel Flanigan, Esq.
		POLSINELLI
		900 West 48^thPlace, Suite 900
		Kansas City, Missouri 64112
		Facsimile No.: 816-753-1536

If to Borrower:		CIO Intellicenter, Limited Partnership
		c/o City Office REIT, Inc.
		1075 West Georgia Street, Suite 2600
		Vancouver, British Columbia V6E 3C9, Canada
		Facsimile No.: 604-661-4873
		Attention: Jamie Farrar

With a copy to:		CIO Intellicenter, Limited Partnership
		8150 North Central Expressway, Suite 1255
		Dallas, Texas 75206
		Attn: Merrick Egan

With a copy to:		Miller, Canfield, Paddock & Stone, P.L.C.
		101 North Main Street, 7th Floor
		Ann Arbor, Michigan 48104
		Facsimile No.: 734-747-7147
		Attention: Joseph M. Fazio, Esq.

A notice shall be deemed to have been given: in the case of hand delivery, at the time of delivery; in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; or in the case of expedited prepaid delivery, upon the first attempted delivery on a Business Day; or in the case of telecopy, upon sender’s receipt of a machine-generated confirmation of successful transmission after advice by telephone to recipient that a telecopy notice is forthcoming.

Section 10.7 Intentionally Omitted.

Section 10.8 Headings. The Article or Section headings and the Table of Contents in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

Section 10.9 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

Section 10.10 Preferences. Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder. To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.

Section 10.11 Waiver of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. To the extent permitted under applicable law, Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents do not specifically and expressly provide for the giving of notice by Lender to Borrower.

Section 10.12 Remedies of Borrower. If a claim or adjudication is made that Lender or its agents have acted unreasonably or unreasonably delayed acting in any case where by law or under this Agreement or the other Loan Documents, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive relief or declaratory judgment. The parties hereto agree that any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.

Section 10.13 Expenses; Indemnity. (a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of written notice from Lender, for all reasonable and documented out-of-pocket costs and expenses (including attorneys’ fees and expenses for outside counsel) incurred by Lender, to the extent the payment of such costs and expenses is expressly made the obligation of Borrower under the Loan Documents, in connection with (i) the preparation, negotiation,

execution and delivery of this Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including any opinions requested by Lender as to any legal matters arising under this Agreement or the other Loan Documents with respect to the Property); (ii) Borrower’s ongoing performance of and compliance with Borrower’s respective agreements and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date, including confirming compliance with environmental and insurance requirements; (iii) Lender’s ongoing performance and compliance with all agreements and conditions contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date; (iv) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters requested by Lender; (v) securing Borrower’s compliance with any requests made pursuant to the provisions of this Agreement; (vi) the filing and recording fees and expenses, title insurance and fees and expenses of counsel for providing to Lender all required legal opinions, and other similar expenses incurred in creating and perfecting the Lien in favor of Lender pursuant to this Agreement and the other Loan Documents; (vii) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement, the other Loan Documents, the Property, or any other security given for the Loan; and (viii) enforcing any obligations of or collecting any payments due from Borrower under this Agreement, the other Loan Documents or with respect to the Property (including any fees incurred by Servicer in connection with the transfer of the Loan to a special servicer prior to a Default or Event of Default) or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work out” or of any insolvency or bankruptcy proceedings; provided, however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the gross negligence, illegal acts, fraud, willful misconduct or bad faith of Lender. Any cost and expenses due and payable to Lender may be paid from any amounts in the Clearing Account or Cash Management Account, as applicable.

(b) Borrower shall indemnify, defend and hold harmless the Indemnified Parties from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, reasonable and documented out-of-pocket costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not an Indemnified Party shall be designated a party thereto), that may be imposed on, incurred by, or asserted against any Indemnified Party in any manner relating to or arising out of (i) any breach by Borrower of its obligations under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents, or (ii) the use or intended use of the proceeds of the Loan (collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation to any Indemnified Party hereunder to the extent that such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud, willful misconduct or bad faith of such Indemnified Party. To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by the Indemnified Parties.

(c) Borrower covenants and agrees to pay for or, if Borrower fails to pay, to reimburse Lender for, any fees and expenses incurred by any Rating Agency in connection with any Rating Agency review of the Loan, the Loan Documents or any transaction contemplated thereby or any consent, approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and conditions of this Agreement or any other Loan Document and Lender shall be entitled to require payment of such fees and expenses as a condition precedent to the obtaining of any such consent, approval, waiver or confirmation.

Section 10.14 Schedules Incorporated. The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

Section 10.15 Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to this Agreement, the Note and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.

Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries. (a) Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy in common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender.

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

Section 10.17 Publicity. All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender, KeyBank National Association or any of their Affiliates shall be subject to the prior written approval of Lender and KeyBank National Association, which approval shall not be unreasonably withheld, conditioned, or delayed.

Section 10.18 Waiver of Marshalling of Assets. To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s partners and others with interests in Borrower, and of the Property, and agrees not to assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Property for the collection of the Debt without any prior or different resort for collection or of the right of Lender to the payment of the Debt out of the net proceeds of the Property in preference to every other claimant whatsoever.

Section 10.19 Waiver of Counterclaim. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents; provided, however, that such waiver shall in no way limit or otherwise affect Borrower’s right to assert a claim against Lender in any separate action or proceeding.

Section 10.20 Conflict; Construction of Documents; Reliance. In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.

Section 10.21 Brokers and Financial Advisors. Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement. Borrower hereby agrees to indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, reasonable and documented out-of-pocket costs and expenses of any kind (including Lender’s attorneys’ fees and expenses) in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein. The provisions of this Section 10.21 shall survive the expiration and termination of this Agreement and the payment of the Debt.

100

Section 10.22 Prior Agreements. This Agreement and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, between Borrower and Lender are superseded by the terms of this Agreement and the other Loan Documents.

Section 10.23 Liability. If Borrower consists of more than one (1) Person the obligations and liabilities of each Person shall be joint and several. Under no circumstances whatsoever shall Lender have any liability for punitive, special, consequential or incidental damages in connection with, arising out of, or in any way related to or under this Loan Agreement or any other Loan Document or in any way related to the transactions contemplated or any relationship established by this Agreement or any other Loan Document or any act, omission or event occurring in connection herewith or therewith, and, to the extent not expressly prohibited by applicable laws, Borrower for itself and its Guarantor and indemnitors waives all claims for punitive, special, consequential or incidental damages. Lender shall have no duties or responsibilities except those expressly set forth in this Agreement, the Security Instrument and the other Loan Documents. Neither Lender nor any of its officers, directors, employees or agents shall be liable for any action taken or omitted by them as such hereunder or in connection herewith, unless caused by their gross negligence, willful misconduct or bad faith. This Agreement shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors and assigns forever.

Section 10.24 Certain Additional Rights of Lender (VCOC). Notwithstanding anything to the contrary contained in this Agreement, Lender shall have:

(a) the right to consult with and advise Borrower’s management regarding the significant business activities and business and financial developments of Borrower; provided, however, that such consultations shall not include discussions of environmental compliance programs or disposal of hazardous substances. Consultation meetings should occur on a regular basis (no more frequently than twice per calendar year) with Lender having the right to call special meetings at any reasonable times and upon reasonable advance notice;

(b) the right, in accordance with the terms of this Agreement, to examine the books and records of Borrower at any reasonable times upon not less than five (5) Business Days prior notice but no more than once in any calendar year except during the continuance of an Event of Default;

(c) the right, in accordance with the terms of this Agreement, including Section 5.1.11 hereof, to receive quarterly and year end financial reports, including balance sheets, statements of income, shareholder’s equity and cash flow, a management report and schedules of outstanding indebtedness; and

(d) the right, without restricting any other rights of Lender under this Agreement (including any similar right), to approve any acquisition by Borrower of any other significant property (other than personal property required for the day to day operation of the Property).

The rights described above in this Section 10.24 may be exercised by any entity which owns and Controls, directly or indirectly, substantially all of the interests in Lender.

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Section 10.25 OFAC. Borrower hereby represents, warrants and covenants that neither Borrower nor any Guarantor is (or will be) a person with whom Lender is restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury of the United States of America (including, those Persons named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated with such persons. In addition, Borrower hereby covenants to provide Lender with any additional information that Lender deems reasonably necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar activities.

Section 10.26 Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterpart shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

ARTICLE XI – LOCAL LAW PROVISIONS

Section 11.1 Inconsistencies. In the event of any inconsistencies between the terms and conditions of this Article XI and the other provisions of this Agreement, the terms and conditions of this Article XI shall control and be binding.

Section 11.2 Trial by Jury. TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, EACH OF LENDER AND BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY LENDER AND BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.


		BORROWER:

		CIO INTELLICENTER, LIMITED PARTNERSHIP, a Delaware limited partnership



		By:		CIO Intellicenter GP, LLC
				a Delaware limited liability company
				General Partner

				By:/s/ James Farrar
				Name: James Farrar
				Title: President

SIGNATURE PAGE TO LOAN AGREEMENT

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.


LENDER:

KEYBANK NATIONAL ASSOCIATION, a national banking association

By:/s/ Mary Ann Gripka
		Name: Mary Ann Gripka
		Title: Vice President

Exhibit 31.1

CERTIFICATION

I, James Farrar, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of City Office REIT, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2015

/s/ James Farrar

James Farrar

Chief Executive Officer and Director

Exhibit 31.2

CERTIFICATION

I, Anthony Maretic, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of City Office REIT, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2015

/s/ Anthony Maretic

Anthony Maretic

Chief Financial Officer, Secretary and Treasurer

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of City Office REIT, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2015 as filed with the Securities and Exchange Commission (the “Report”), I, James Farrar, Chief Executive Officer of the Company, certify that to my knowledge:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James Farrar

James Farrar

Chief Executive Officer and Director

November 6, 2015

This written statement is being furnished to the Securities and Exchange Commission as an exhibit to the Report. A signed original of this written statement required by Section 906 has been provided to City Office REIT, Inc. and will be retained by City Office REIT, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of City Office REIT, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2015 as filed with the Securities and Exchange Commission (the “Report”), I, Anthony Maretic, Chief Financial Officer of the Company, certify that to my knowledge:

1.	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Anthony Maretic

Anthony Maretic

Chief Financial Officer, Secretary and Treasurer

November 6, 2015

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