MSMCH Loan No.: 13-878027 LOAN AGREEMENT Dated as of September 26, 2013 Between WHITESTONE UPTOWN TOWER, LLC, as Borrower and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, as Lender DMEAST #17478116 v7
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MSMCH Loan No.: 13-878027
LOAN AGREEMENT
Dated as of September 26, 2013
Between
WHITESTONE UPTOWN TOWER, LLC,
as Borrower
and
XXXXXX XXXXXXX MORTGAGE CAPITAL HOLDINGS LLC,
as Lender
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Schedule I
Schedule II
Schedule III -
Schedule N -
Schedule V
Schedule VI -
Schedule VII -
DMEAST #17478116 v7
SCHEDULES
Rent Roll
Required Repairs
Organizational Chart
Intentionally Omitted
Intentionally Omitted
Intentionally Omitted
Description of REA
Vlll
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of September 26, 2013 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this "Agreement"), between
XXXXXX XXXXXXX MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability
company, having an address at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (together with its
successors and assigns, "Lender"), and WHITESTONE UPTOWN TOWER, LLC, a Delaware
limited liability company having an address at c/o Whitestone REIT, 0000 X. Xxxxxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000 (together with its permitted successors and permitted assigns,
"Borrower").
All capitalized terms used herein shall have the respective meanings set forth in Article I
hereof.
WITNESSETH:
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower, subject to and m
accordance with the conditions and terms of this Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, represent and warrant as follows:
ARTICLE I.
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided:
"Acceptable LLC" shall mean a limited liability company formed under Delaware or
Maryland law which (i) has at least one springing member, which, upon the dissolution of all of
the members or the withdrawal or the disassociation of all of the members from such limited
liability company, shall immediately become the sole member of such limited liability company,
and (ii) otherwise meets the Rating Agency criteria then applicable to such entities.
"Act" shall have the meaning set forth in Section 3.1.24( d) hereof.
"Actual Debt Service Coverage Ratio" shall mean as of the last day of the calendar
month immediately preceding the applicable date of determination, the quotient obtained by
dividing (1) the Adjusted Net Cash Flow by (2) the aggregate actual Debt Service (excluding
Reserve Funds) projected over the twelve (12) month period subsequent to the date of
calculation; provided, that, the foregoing shall be calculated by Lender (A) assuming that the
Loan had been in place for the entirety of said period and (B) disregarding any "interest only"
period under the Loan and assuming that constant principal and interest payments were due for
the entirety of said period based the Interest Rate and a thirty (30) year amortization schedule.
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Lender's calculation of the Actual Debt Service Coverage Ratio shall be conclusive and binding
on Borrower absent manifest error.
"Adjusted Net Cash Flow" shall mean the Underwritten NOI less (a) normalized tenant
improvement and leasing commission expenditures equal to $1.25 per square foot per annum,
and (b) normalized capital improvements equal to $0.17 per square foot per annum. Lender's
calculation of Adjusted Net Cash Flow shall be conclusive and binding on Borrower absent
manifest error.
"Adverse REMIC Event" shall mean, with respect to any REMIC Trust formed
pursuant to a securitization of any portion of the Loan, (i) the endangerment of the status of such
REMIC Trust, (ii) the imposition of a tax upon such REMIC Trust or any of its assets or
transactions (including, without limitation, the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on certain contributions set forth in Section 860G(d)
of the Code), or (iii) any event that may cause the Loan to fail to satisfy the REMIC
Requirements.
"Affiliate" shall mean, as to any Person, any other Person that, directly or indirectly,
(i) owns more than forty percent (40%) of such Person, (ii) is in control of such Person, (iii) is
Controlled by such Person, (iv) is under common ownership or Control with such Person, or
(v) is a director or officer of such Person or of an Affiliate of such Person.
"Affiliated Manager" shall mean any managing agent of the Property in which
Borrower, Guarantor, Sponsor, any SPC Party (if any) or any Affiliate of such entities has,
directly or indirectly, any legal, beneficial or economic interest.
"ALTA" shall mean American Land Title Association, or any successor thereto.
"Alteration Threshold" shall mean three percent (3.0%) of the outstanding principal
balance of the Loan.
"Annual Budget" shall mean the operating and capital budget for the Property setting
forth Borrower's good faith estimate of Operating Income, Operating Expenses, and Capital
Expenditures for the applicable Fiscal Year.
"Approved Annual Budget" shall have the meaning set forth in Section 4.1.6(e) hereof.
"Assignment of Management Agreement" shall mean that certain Conditional
Assignment of Management Agreement and Subordination of Management Agreement dated the
date hereof among Borrower, Manager and Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"Award" shall mean any compensation paid by any Governmental Authority m
connection with a Condemnation in respect of all or any part of the Property.
"Bankruptcy Code" shall mean Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time, and any successor statute or statutes and all rules
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and regulations from time to time promulgated thereunder, and any comparable foreign laws
relating to bankruptcy, insolvency or creditors' rights.
"Basic Carrying Costs" shall mean the sum of the following costs associated with the
Property for the relevant Fiscal Year or payment period: (i) Taxes and (ii) Insurance Premiums.
"Borrower" shall mean Whitestone Uptown Tower, LLC, a Delaware limited liability
company, together with its permitted successors and permitted assigns.
"Borrower Party(ies)" shall mean, individually and/or collectively, as the context may
require, Borrower, Guarantor, and each of their respective Affiliates that has executed any Loan
Document.
"Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday on
which national banks are not open for general business in (i) the State of New York, (ii) the state
where the corporate trust office of the Trustee is located, or (iii) the state where the servicing
offices of the Servicer are located.
"Buyer" shall have the meaning set forth in Section 8.1 (b) hereof.
"Capital Expenditures" for any period shall mean amounts expended for replacements
and alterations to the Property and required to be capitalized according to GAAP.
"Capital Expenditure Funds" shall have the meaning set forth in Section 6.4.1 hereof.
"Capital Expenditures Work" shall mean any labor performed or materials installed in
connection with any Capital Expenditure.
"Cash Management Agreement" shall mean that certain Cash Management Agreement
of even date herewith among Lender, Borrower and Manager.
"Casualty" shall mean the occurrence of any casualty, damage or injury, by fire or
otherwise, to the Property or any part thereof.
"Casualty Consultant" shall have the meaning set forth in Section 5.3.2(c) hereof.
"Casualty Retainage" shall have the meaning set forth in Section 5.3.2(d) hereof.
"Closing Date" shall mean the date of funding the Loan.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto in temporary or final form.
"Condemnation" shall mean 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
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thereto, including any right of access thereto or any change of grade affecting the Property or any
part thereof.
"Condemnation Payment" shall have the meaning set forth in Section 5.3.3 hereof.
"Condemnation Net Proceeds" shall have the meaning set forth in the definition of "Net
Proceeds."
"Control" shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise.
"Constituent Member" shall have the meaning set forth in Section 3.1.24(f) hereof.
"Covered Rating Agency Information" shall have the meaning set forth in Section
Uffi hereof.
"CPI" shall mean "The Consumer Price Index (New Series) (Base Period 1982-84=100)
(all items for all urban consumers)" issued by the Bureau of Labor Statistics of the United States
Department of Labor (the "Bureau"). If the CPI ceases to use the 1982-84 average equaling 100
as the basis of calculation, or if a change is made in the term, components or number of items
contained in said index, or if the index is altered, modified, converted or revised in any other
way, then the index shall be adjusted to the figure that would have been arrived at had the change
· in the manner of computing the index in effect at the date of this Agreement not been made. If at
any time during the term of the Loan the CPI shall no longer be published by the Bureau, then
any comparable index issued by the Bureau or similar agency of the United States issuing similar
indices shall be used in lieu of the CPl.
"Creditors' Rights Laws" shall have the meaning set forth in Section 3.1.24(d) hereof.
"DBRS" shall mean DBRS, Inc.
"Debt" shall mean the outstanding principal amount of the Loan together with all interest
accrued and unpaid thereon and all other sums (including the Yield Maintenance Premium) due
to Lender in respect of the Loan under the Note, this Agreement, the Security Instrument, the
Environmental Indemnity or any other Loan Document.
"Debt Service" shall mean, with respect to any particular period of time, scheduled
principal and interest payments under the Note.
"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, with respect to the Loan, a rate per annum equal to the lesser
of (i) the Maximum Legal Rate or (ii) five percent (5%) above the Interest Rate.
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"Defeasance Collateral Account" shall have the meaning set forth in Section 2.5.3
hereof.
"Defined Benefit Plan" shall mean a plan, document, agreement, or arrangement
currently or previously maintained or sponsored by the Borrower or by any Employee Plan
Affiliate or to which either the Borrower or Employee Benefit Affiliate currently makes, or
previously made, contributions and which (i) provides or is expected to provide retirement
benefits to employees or other workers and (ii) the Borrower could reasonably be expected to
have any liability (including liability attributable from an Employee Plan Affiliate). A Defined
Benefit Plan shall include any plan that if it were terminated at any time, would result in
Borrower or Employee Plan Affiliate being deemed to be a "contributing sponsor" (as defined in
Section 4001(a)(13) of ERISA) of the terminated plan pursuant to ERISA Section 4069. A
Defined Benefit Plan does not include a Multiemployer Plan.
"Disclosure Document" shall have the meaning set forth in Section 9.2(a) hereof.
"Eligible Account" shall mean an identifiable account which is separate from all other
funds held by the holding institution that is either (a) an account or accounts maintained with the
corporate trust department of 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 the corporate trust department of 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 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" shall mean a federal or state chartered depository institution or
trust company insured by the Federal Deposit Insurance Corporation the short term unsecured
debt obligations or commercial paper of which are rated at least A-1 by S&P, P-1 by Moody's
and F-1 by Fitch in the case of accounts in which funds are held for thirty (30) days or less or, in
the case of Letters of Credit or accounts in which funds are held for more than thirty (30) days,
the long term unsecured debt obligations of which are rated at least "A" by Fitch and S&P and
"A2" by Moody's.
"Embargoed Person" shall have the meaning set forth in Section 3 .1.41 hereof.
"Employee Benefit Affiliate" shall mean all members of a controlled group of
corporations and all trades and business (whether or not incorporated) under common control
and all other entities which, together with Borrower, are treated as a single employer under any
or all of Sections 414(b), (c), (m) or (o) of the Code.
"Environmental Indemnity" shall mean 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.
"Equipment" shall have the meaning set forth in the granting clause of the Security
Instrument.
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"Equity Collateral" shall have the meaning set forth in Section 9.4 hereof.
"ERISA" shall have the meaning set forth in Section 4.2.11 hereof.
"Event of Default" shall have the meaning set forth in Section 10.1 hereof.
"Exchange Act" shall have the meaning set forth in Section 9.2(a) hereof.
"Exchange Act Filing" shall have the meaning set forth in Section 9.1 (c) hereof.
"Exculpated Parties" shall have the meaning set forth in Section 11.22 hereof.
"Extraordinary Expense" shall have the meaning set forth in Section 4.1.6(e) hereof.
"Fiscal Year" shall mean each twelve month period commencing on January 1 and·
ending on December 31 during each year of the term of the Loan.
"Fitch" shall mean Fitch, Inc.
"Full Replacement Cost" shall have the meaning set forth in Section 5.1.1(a)(i) hereof.
"GAAP'' shall mean generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such entity as may be in general use by
significant segments of the U.S. accounting profession.
"Governmental Authority" shall mean any court, board, agency, commission, office or
authority of any nature whatsoever or any governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx,
xxxxxxxxx, xxxx or otherwise) whether now or hereafter in existence.
"Guarantor" shall mean Whitestone REIT Operating Partnership, L.P., a Delaware
limited partnership.
"Guaranty" shall mean that certain Guaranty of Recourse Obligations of Borrower of
even date herewith from Guarantor for the benefit of Lender.
"Improvements" shall have the meaning set forth in the granting clause of the Security
Instrument.
"Indebtedness" shall mean, for any Person, without duplication: (i) all indebtedness of
such Person for borrowed money, for amounts drawn under a letter of credit, or for the deferred
purchase price of property for which such Person or its assets is liable, (ii) all unfunded amounts
under a loan agreement, letter of credit, or other credit facility for which such Person would be
liable if such amounts were advanced thereunder, (iii) all amounts required to be paid by such
Person as a guaranteed payment to partners or a preferred or special dividend, including any
mandatory redemption of shares or interests, (iv) all indebtedness guaranteed by such Person,
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directly or indirectly, (v) all obligations under leases that constitute capital leases for which such
Person is liable, and (vi) all obligations of such Person under interest rate swaps, caps, floors,
collars and other interest hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations
such Person otherwise assures a creditor against loss.
"Insurance Funds" shall have the meaning set forth in Section 6.3.1 hereof.
"Insurance Premiums" shall have the meaning set forth in Section 5.l.l(b) hereof.
"Interest Bearing Reserve Accounts" shall mean the Ongoing Rollover Funds.
"Interest Rate" shall mean a rate per annum equal to four and ninety seven hundredths
(4.97%).
"Kroll" shall mean Xxxxx Bond Rating Agency, Inc.
"Lease" shall mean 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, and 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 every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed· and observed by the
other party thereto.
"Lease Termination Fee" shall have the meaning set forth in Section 6.6.1 hereof.
"Lease Termination Rollover Funds" shall have the meaning set forth in Section 6.6.1
hereof.
"Legal Requirements" shall mean all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities affecting Borrower or the Property or any part thereof
or the construction, use, alteration or operation thereof, or any part thereof, whether now or
hereafter enacted and in force, including, without limitation, the Americans with Disabilities Act
of 1990, 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 the Property or any part thereof,
including, without limitation, any which may (i) require repairs, modifications or alterations in or
to the Property or any part thereof, or (ii) in any way limit the use and enjoyment thereof.
"Lender" shall mean Xxxxxx Xxxxxxx Mortgage Capital Holdings LLC, a New York
limited liability company, together with its successors and assigns.
"Lender Indemnitees" shall have the meaning set forth in Section 11.13.2 hereof.
"Liabilities" shall have the meaning set forth in Section 9.2(b) hereof.
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"Licenses" shall have the meaning set forth in Section 3 .1.18 hereof
"Lien" shall mean any mortgage, deed-of-trust, lien, claim, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer of, or any agreement
to enter into or create any of the foregoing, on or affecting the Property or any portion thereof or
any direct or indirect interest in Borrower, including, without limitation, 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.
"LLC Agreement" shall have the meaning set forth in Section 3 .1.24( d) hereof.
"Loan" shall mean the loan in the original principal amount of Sixteen Million Four
Hundred Fifty Thousand and No/100 Dollars ($16,450,000) made by Lender to Borrower
pursuant to this Agreement.
"Loan Bifurcation" shall have the meaning set forth in Section 9.1(b)(iv) hereof.
"Loan Documents" shall mean, collectively, this Agreement, the Note, the Security
Instrument, the Cash Management Agreement, the Restricted Account Agreement, the
Environmental Indemnity, the Guaranty, the Assignment of Management Agreement and any
other document pertaining to the Property as well as all other documents now or hereafter
executed and/or delivered in connection with the Loan, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"Losses" shall have the meaning set forth in Section 11.13.2 hereof.
"Major Lease" shall mean (i) any Lease which, individually or when aggregated with all
other Leases at the Property with the same Tenant or its Affiliate, either (A) accounts for ten
percent (10%) or more of the Property's aggregate total rental income, or (B) demises 25,000
square feet or more of the Property's gross leasable area, (ii) any Lease which contains any
option, offer, right of first refusal or other similar entitlement to acquire all or any portion of the
Property (which such rights shall be deemed to be exclusive of any rights under any Lease to
extend the term thereof or to lease additional space at the Property), or (iii) any instrument
guaranteeing or providing credit support for any Lease meeting the requirements of (i) or (ii)
above.
"Management Agreement" shall mean the management agreement entered into by and
between Borrower and the Manager, pursuant to which the Manager is to provide management
and other services with respect to the Property.
"Manager" shall mean Whitestone REIT Operating Partnership, L.P. or any other
manager approved in accordance with the terms and conditions of the Loan Documents.
"Material Adverse Effect" shall mean a material adverse effect on (i) the Property,
(ii) the business, profits, prospects, management, use, operations or condition (financial or
otherwise) of Borrower, Guarantor, Sponsor or the Property, (iii) the enforceability, validity,
perfection or priority of the lien of the Security Instrument or the other Loan Documents, (iv) the
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ability of Borrower to perform its obligations under the Security Instrument or the other Loan
Documents or (v) the ability of Guarantor to perform its obligations under the Guaranty.
"Material Agreements" shall mean each contract and agreement relating to the
ownership, management, development, use, operation, leasing, maintenance, repair or
improvement of the Property, other than the Management Agreement and the Leases, as to which
either (i) there is an obligation of Borrower to pay more than $50,000.00 per annum; or (ii) the
term thereof extends beyond one year (unless cancelable on thirty (30) days or less notice
without requiring the payment of termination fees or payments of any kind).
"Maturity Date" shall mean October 1, 2023, 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" shall mean 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 indebtedness evidenced by the Note and as provided for herein or the other Loan Documents,
under the laws of such state or states whose laws are held by any court of competent jurisdiction
to govern the interest rate provisions of the Loan.
"Member" shall have the meaning set forth in Section 3 .1. 24( d) hereof.
"Mezzanine Borrower" shall have the meaning set forth in Section 9.4 hereof.
"Mezzanine Option" shall have the meaning set forth in Section 9.4 hereof.
"Minimum Disbursement Amount" shall mean Fifteen Thousand and No/100 Dollars
($15,000).
"Monthly Debt Service Payment Amount" shall mean (x) with respect to the Monthly
Payment Date occurring in November, 2013 and each Monthly Payment Date thereafter through
and including the Monthly Payment Date occurring in April 1, 2016, the monthly interest
accrued on the Loan, and (y) with respect to the Monthly Payment Date occurring in May 1,
2016 and each Monthly Payment Date thereafter, a constant monthly payment of $88,005.80.
"Monthly Payment Date" shall mean the first (1st) day of every calendar month
occurring during the term of the Loan, and if such day is not a Business Day, then the Business
Day immediately preceding such day, commencing on November 1, 2013 and continuing to and
including the Maturity Date.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Xxxxxx Xxxxxxx" shall mean MSMCH and its Affiliates.
"Xxxxxx Xxxxxxx Group" shall have the meaning set forth in Section 9 .2(b) hereof.
"Morningstar" shall mean Morningstar, Inc., an Illinois corporation.
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"MSMCH" shall mean Xxxxxx Xxxxxxx Mortgage Capital Holdings LLC.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in Section 3(37) of
ERISA or Section 400l(a)(3) of ERISA, and to which Borrower or any Employee Benefit
Affiliate is making, is obligated to make or has made or been obligated to make during the last
six years, contributions on behalf of participants who are or were employed by any of them.
"Net Proceeds" shall mean: (i) the net amount of all insurance proceeds payable as a
result of a Casualty to the Property, after deduction of reasonable costs and expenses (including,
but not limited to, reasonable attorneys' fees), if any, in collecting such insurance proceeds, or
(ii) the net amount of the Award, after deduction of reasonable costs and expenses (including,
but not limited to, reasonable attorneys' fees), if any, in collecting such Award ("Condemnation
Net Proceeds").
"Net Proceeds Deficiency" shall have the meaning set forth in Section 5.3.2(f) hereof.
"Note" shall have the meaning set forth in Section 2.1.3 hereof.
"Notice" shall have the meaning set forth in Section 11.6 hereof.
"OFAC" shall have the meaning set forth in Section 3.1.41 hereof.
"Officer's Certificate" shall mean a certificate delivered to Lender by Borrower which is
signed by an authorized senior officer of Borrower.
"Ongoing Rollover Funds" shall have the meaning set forth in Section 6.5.1.
"Operating Expenses" shall mean all expenses, computed in accordance with GAAP or
other sound and prudent accounting principles approved by Lender, of whatever kind and from
whatever source, relating to the ownership, operation, repair, maintenance and management of
the Property that are incurred on a regular monthly or other periodic basis, including, without
limitation (and without duplication), Taxes, Insurance Premiums, management fees (whether or
not actually paid) equal to the greater of the actual management fees and two percent (2.0%) of
annual Operating Income, costs attributable to the ordinary operation, repair and maintenance of
the systems for heating, ventilation and air conditioning, advertising expenses, license fees,
utilities, payroll and related taxes, computer processing charges, operating equipment or other
lease payments as approved by Lender, ground lease payments, bond assessments and other
similar costs, in each instance, actually paid for by BorroweL Operating Expenses shall not
include Debt Service, capital expenditures, tenant improvement costs, leasing commissions, or
other expenses which are paid from escrows required by the Loan Documents, any payment or
expense for which Borrower was or is to be reimbursed from proceeds of the loan or insurance or
by any third party, federal, state or local income taxes, any non-cash charges such as depreciation
and amortization, and any item of expense otherwise includable in Operating Expenses which is
paid directly by any Tenant except real estate taxes paid directly to any taxing authority by any
tenant. Lender's calculation of Operating Expenses shall be conclusive and binding on Borrower
absent manifest error.
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"Operating Income" shall mean all revenue derived from the ownership and operation
of the Property from whatever source, including, without limitation, rental income reflected in a
current rent roll for all Tenants paying rent and in actual physical occupancy of their respective
space demised pursuant to Leases which are in full force and effect (whether denominated as
basic rent, additional rent, escalation payments, electrical payments or otherwise), common area
maintenance, real estate tax recoveries, utility recoveries, other miscellaneous expense
recoveries, other required pass-throughs, business interruption, rent loss or other similar
insurance proceeds and other miscellaneous income. Operating Income shall not include
insurance proceeds (other than proceeds of rent loss, business interruption or other similar
insurance allocable to the applicable period), condemnation proceeds (other than condemnation
proceeds arising from a temporary taking or the use and occupancy of all or part of the
applicable Property allocable to the applicable period), proceeds of any financing, proceeds of
any sale, exchange or transfer of the Property or any part thereof or interest therein, capital
contributions or loans to Borrower or an Affiliate of Borrower, any item of income otherwise
includable in Operating Income but paid directly by any Tenant to a Person other than Borrower,
any other extraordinary, non-recurring revenues, payments paid by or on behalf of any Tenant
under a Lease which is the subject of any proceeding or action relating to its bankruptcy,
reorganization or other arrangement pursuant to the Bankruptcy Code or any similar federal or
state law or which has been adjudicated a bankrupt or insolvent unless such Lease has been
affirmed by the trustee in such proceeding or action pursuant to a final, non-appealable order of a
court of competent jurisdiction, payments paid by or on behalf of any Tenant under a Lease the
demised premises of which are not occupied either by such Tenant or by a sublessee thereof,
payments paid by or on behalf of any Tenant under a Lease in whole or partial consideration for
the termination of any Lease, sales tax rebates from any Governmental Authority, payments from
any Tenant in monetary or material non-monetary default under its Lease beyond ninety (90)
days or any other applicable notice and cure periods, whichever is longer, payments from any
Tenant that has expressed its intention (directly, constructively or otherwise) to not renew or to
terminate, cancel and/or reject its applicable Lease, sales, use and occupancy taxes on receipts
required to be accounted for by Borrower to any Governmental Authority, refunds and
uncollectible accounts, interest income from any source other than the Reserve Funds required
pursuant to this Agreement or the other Loan Documents, unforfeited security deposits, utility
and other similar deposits, income from Tenants not paying rent or any disbursements to
Borrower from the Reserve Funds. Lender's calculation of Operating Income shall be
conclusive and binding on Borrower absent manifest error
"Other Charges" shall mean all ground rents, maintenance charges, impositions other
than Taxes, and any other charges, including, without limitation, 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.
"Otherwise Rated Insurer" shall have the meaning set forth in Section 5 .1.2.
"Other Required Ratings" shall have the meaning set forth in Section 5.1.2.
"Participant" shall mean any Person that has purchased a participation in this Loan
Agreement pursuant to Section 11.27 hereof.
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"Patriot Act" shall have the meaning set forth in Section 3 .1.42 hereof.
"Permitted Encumbrances" shall mean, collectively, (i) the Liens and security interests
created by the Loan Documents, (ii) all Liens, encumbrances and other matters disclosed in the
Title Insurance Policy, (iii) Liens, if any, for Taxes imposed by any Governmental Authority not
yet delinquent, or which are being contested in accordance with the provisions of Section 4.1.2
of this Agreement, (iv) such other title and survey exceptions as Lender has approved or may
approve in writing in Lender's sole discretion, (v) rights of existing Tenants as tenants only in
possession pursuant to written unrecorded Leases with no rights of purchase, (vi) Liens with
respect to Permitted Equipment Leases, and (vii) mechanics', materialmen's, or other Liens
arising in the ordinary course of business, if any, in each case only if the amount or validity or
application in whole or in part of any such Lien is being contested by Borrower, at its own
expense, after prior written notice to Lender, by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, provided that (A) no Event of Default has
occurred and is continuing under this Agreement or any of the other Loan Documents, (B) such
proceeding shall suspend the collection of the amount secured by such Lien from Borrower and
from the Property or Borrower shall have paid such amount under protest, (C) such proceeding
shall be permitted under and be conducted in accordance with the provisions of any other
material instrument to which Borrower is subject and shall not constitute a material default
thereunder, (D) neither the Property nor any part thereof or interest therein will be in imminent
danger of being sold, forfeited, terminated, canceled or lost, (E) Borrower shall have furnished
the security as may be required in the proceeding to insure the payment of any contested amount
secured by such Lien, together with all interest and penalties thereon, and (F) Borrower shall
have bonded over such Lien in a manner acceptable to Lender.
"Permitted Equipment Leases" shall mean equipment leases or other similar
instruments entered into with respect to the Equipment and/or the Personal Property provided,
that, in each case, such equipment leases or similar instruments (i) are entered into on
commercially reasonable terms and conditions in the ordinary course of Borrower's business,
(ii) relate to Equipment and/or Personal Property which is (A) used in connection with the
operation and maintenance of the Property in the ordinary course of Borrower's business and
(B) readily replaceable without material interference or interruption to the operation of the
Property, and (iii) have annual payments not exceeding $50,000.00 in the aggregate.
"Permitted Prepayment Date" shall have the meaning set forth in Section 2.4.1 hereof.
"Permitted Transfer Date" shall have the meaning set forthin Section 8.1 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.
"Personal Property" shall have the meaning set forth in the granting clause of the
Security Instrument.
"Policies" shall have the meaning specified in Section 5.1.1(b) hereof.
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"Prepayment Date" shall mean the date on which the Loan is prepaid in accordance with
the terms hereof.
"Prohibited Transfer" shall have the meaning set forth in Section 4.2.1 hereof.
"Property" shall mean 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, all as more particularly described in the
Granting Clauses of the Security Instrument.
"Property Sale" shall have the meaning set forth in Section 8.1 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 Securitization, is reasonably acceptable to Lender and
(ii) after a Securitization, (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 Manager" shall mean a reputable and experienced professional management
organization approved by Lender (which such approval may, at Lender's option, be conditioned
upon Lender's receipt of a Rating Agency Confirmation with regard to both the identity of the
proposed manager and the replacement management agreement pursuant to which such manager
will be employed).
"Rating Agencies" shall mean each of S&P, Moody's, Fitch, DBRS, Morningstar, Kroll
and any other nationally-recognized statistical rating agency (and any successor to any of the
foregoing), but only to the extent that such Rating Agency has been designated by Lender or is
anticipated to be designated by Lender in connection with any Secondary Market Transaction.
"Rating Agency Confirmation" shall mean a written affirmation from each of the
Rating Agencies that the credit rating of the Securities by such Rating Agency immediately prior
to the occurrence of the event with respect to which such Rating Agency Confirmation is sought
will not be qualified, downgraded or withdrawn as a result of the occurrence of such event,
which affirmation may be granted or withheld in such Rating Agency's sole and absolute
discretion. For the purposes of this Agreement and the other Loan Documents, if (1) any Rating
Agency shall waive, decline or refuse to review or otherwise engage any request for a Rating
Agency Confirmation hereunder or under the other Loan Documents (collectively, a "RA
Declination Event"), or (2) Lender (or any Servicer acting on Lender's behalf) determines
pursuant to and in accordance with any applicable pooling and servicing agreement that a Rating
Agency Confirmation is not required (a "RAC Refusal Event") (hereinafter, each of an RA
Declination Event and a RAC Refusal Event, collectively, a "RAC Satisfaction Condition"),
such RAC Satisfaction Condition shall be deemed (for such request only) to satisfy the condition
that a Rating Agency Confirmation by such Rating Agency (only) be obtained for purposes of
this Agreement or the other Loan Documents, as applicable. For purposes of clarity, any RA
Declination Event or RAC Refusal Event, as applicable, shall not be deemed a RA Declination
Event or RAC Refusal Event, as applicable, for any subsequent request for a Rating Agency
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Confirmation hereunder or under the other Loan Documents, and the condition for Rating
Agency Confirmation pursuant to this Agreement and the other Loan Documents for any
subsequent request shall apply regardless of any previous RA Declination or RAC Refusal
Event, as applicable.
"Register" shall have the meaning set forth in Section 11.27 hereof.
"Registration Statement" shall have the meaning set forth in Section 9.2(b) hereof.
"Regulation AB" shall mean Regulation AB under the Securities Act and the Exchange
Act, as such Regulation may be amended from time to time.
"Related Loan" shall mean a loan made to an Affiliate of Borrower or secured by a
Related Property that is included in a Securitization with the Loan.
"Related Property" shall mean a parcel of real property, together with improvements
thereon and personal property related thereto, that is "related", within the meaning of the
definition of Significant Obligor, to the Property.
"Release Date" shall mean the earlier to occur of (i) the date that is forty two (42) full
calendar months after the first Monthly Payment Date and (ii) the date that is two (2) years from
the "startup day" (within the meaning of Section 860G(a)(9) of the Code) of the REMIC Trust
established in connection with the last Securitization involving any portion of this Loan.
"Relevant Sections" shall have the meaning set forth in Section 9 .2(b) hereof.
"REMIC Requirements" shall mean any applicable legal requirements relating to any
REMIC Trust (including, without limitation, any constraints, rules and/or other regulations
and/or requirements relating to the servicing, modification and/or other similar matters with
respect to the Loan (or any portion thereof and/or interest therein)).
"REMIC Trust" shall mean a "real estate mortgage investment conduit" within the
meaning of Section 8 60D of the Code that holds the Note.
"Rent Deficiency" shall have the meaning set forth in Section 6.6.2 hereof.
"Rents" shall mean all rents, moneys payable as damages or in lieu of rent, revenues,
deposits (including, without limitation, security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other consideration of whatever form or nature
received by or paid to or for the account of or benefit of Borrower or its agents or employees
from any and all sources arising from or attributable to the Property.
"Replacement Lease" shall have the meaning set forth in Section 6.6.2 hereof.
"Required Repairs" shall have the meaning set forth in Section 4.1.19 hereof.
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"Reserve Funds" shall mean, collectively, the Capital Expenditure Funds, the Insurance
Funds, the Tax Funds, the Lease Termination Rollover Funds, the Unfunded Rollover Funds and
the Ongoing Rollover Funds.
"Restoration" shall have the meaning set forth in Section 5.2.1 hereof.
"Restoration Threshold" shall mean three percent (3.0%) of the outstanding principal
balance of the Loan.
"Restricted Account" shall have the meaning ascribed to such term in the Restricted
Account Agreement.
"Restricted Account Agreement" shall mean that certain Deposit Account Control
Agreement of even .date herewith among Lender, Borrower, Bank of America, N.A. and
Manager.
"Restricted Party" shall mean Borrower, Guarantor, Sponsor, any SPC Party (if any),
any Affiliated Manager, or any shareholder, partner, member or non-member manager, or any
direct or indirect legal or beneficial owner of Borrower, Guarantor, Sponsor, any SPC Party (if
any), any Affiliated Manager or any non-member manager; provided that "Restricted Party"
shall not include any of the foregoing Persons or any Person if such Person is a publicly traded
company or a shareholder or a publicly traded company.
"Rollover Funds" have the meaning set forth in Section 6.5.1 hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc.
"Sale or Pledge" shall mean a voluntary or involuntary sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, grant of any options with respect to, or any
other transfer or disposition (directly or indirectly, voluntarily or involuntarily, by operation of
law or otherwise, and whether or not for consideration or of record) of a legal or beneficial
interest.
"Scheduled Defeasance Payments" shall mean scheduled payments of interest and
principal under the Note for all Monthly Payment Dates occurring after the Total Defeasance
Date and up to and including the Maturity Date (including the outstanding principal balance on
the Note as of the Maturity Date), and all payments required after the Total Defeasance Date, if
any, under the Loan Documents for servicing fees and other similar charges.
"Secondary Market Transaction" shall have the meaning set forth in Section 9.1 (a)
hereof.
"Securities" shall have the meaning set forth in Section 9.l(a) hereof.
"Securities Act" shall have the meaning set forth in Section 9.2(a) hereof.
"Securitization" shall have the meaning set forth in Section 9.l(a) hereof.
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"Security Agreement" shall mean a security agreement in form and substance that
would be satisfactory to a prudent lender originating commercial loans for securitization similar
to the Loan pursuant to which Borrower grants Lender a perfected, first priority security interest
in the Defeasance Collateral Account and the Total Defeasance Collateral.
"Security Instrument" shall mean that certain first priority 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 or otherwise modified from time to time.
"Servicer" shall have the meaning set forth in Section 11.24 hereof.
"Servicing Agreement" shall have the meaning set forth in Section 11.24 hereof.
"Severed Loan Documents" shall have the meaning set forth in Section 10.2(c) hereof.
"Short Interest" shall have the meaning set forth in Section 2.4.1 hereof.
"Significant Obligor" shall have the meaning set forth in Item 1101 (k) of Regulation AB
under the Securities Act.
"SPC Party" shall have the meaning set forth in Section 3 .1. 24( c) hereof.
"Special Member" shall have the meaning set forth in Section 3.1.24(d) hereof.
"Sponsor" shall mean Whitestone REIT, a Maryland real estate investment trust.
"State" shall mean the State or Commonwealth in which the Property or any part thereof
is located.
"Successor Borrower" shall have the meaning set forth in Section 2.5.4 hereof.
"Survey" shall mean a survey of the Property prepared by a surveyor licensed in the
State and satisfactory to Lender and the company or companies issuing the Title Insurance
Policy, and containing a certification of such surveyor satisfactory to Lender.
"Tax Funds" shall have the meaning set forth in Section 6.2.1 hereof.
"Taxes" shall mean 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, together with all interest and penalties thereon.
"Tenant" shall mean any Person obligated by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) under any Lease now or hereafter
affecting all or any part of the Property.
"Termination Space" shall have the meaning set forth in Section 6.6.1 hereof.
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"Title Insurance Policy" shall mean an ALTA mortgagee title insurance policy in the
form acceptable to Lender issued with respect to the Property and insuring the lien of the
Security Instrument.
"Total Defeasance Collateral" shall mean U.S. Obligations, which provide payments
(i) on or prior to, but as close as possible to, the Business Day immediately preceding all
Monthly Payment Dates and other scheduled payment dates, if any, under the Note after the
Total Defeasance Date and up to and including the Maturity Date, and (ii) in amounts equal to or
greater than the Scheduled Defeasance Payments relating to such Monthly Payment Dates and
other scheduled payment dates.
"Total Defeasance Date" shall have the meaning set forth in Section 2.5.1(a) hereof.
"Total Defeasance Event" shall have the meaning set forth in Section 2.5.1(a) hereof.
"Trustee" shall mean any trustee holding the Loan in a Securitization.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect in the State.
"Underwriter Group" shall have the meaning set forth in Section 9 .2(b) hereof.
"Underwritten NOI" shall mean Underwritten Operating Income less Underwritten
Operating Expenses. Lender's calculation of Underwritten NOI (including determination of
items that do, and do not, qualify as Operating Income or Operating Expenses) shall be
calculated by Lender in good faith based upon Lender's determination of Rating Agency criteria
and shall be final absent manifest error.
"Underwritten Operating Expenses" shall mean projected annualized Operating
Expenses based on a trailing twelve (12) month period adjusted upwards (but not downwards) by
CPI and anticipated increases in Operating Expenses. Lender's calculation of Underwritten
Operating Expenses shall be conclusive and binding on Borrower absent manifest error.
"Underwritten Operating Income" shall mean projected annualized Operating Income
based on the most recent rent roll and such other information as is required to be delivered by
Borrower pursuant to Section 4.1.6 hereof excluding rent relating to tenants under Leases
(pursuant to the most recent rent roll) which is more than thirty (30) days delinquent as
reasonably adjusted by Lender to take into account, a vacancy factor equal to the greater of (a) an
imputed vacancy rate of 5%, (b) market vacancies for the market in which the Property is
located, and (c) the actual vacancy rate at the Property. Lender's calculation of Underwritten
Operating Income shall be conclusive and binding on Borrower absent manifest error.
"Unfunded Rollover Funds" shall have the meaning set forth in Section 6.7.1 hereof.
"Updated Information" shall have the meaning set forth in Section 9.1(b)(i) hereof.
"U.S. Obligations" shall mean "government securities" as defined in Section 2(a)(16) of
the Investment Company Act of 1940 and within the meaning of Treasury Regulation Section
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Collateral not needed to pay the Scheduled Defeasance Payments shall be retained in the
Defeasance Collateral Account as additional collateral for the Loan. Borrower shall cause the
Eligible Institution at which the Total Defeasance Collateral is deposited to enter an agreement
with Borrower and Lender, satisfactory to Lender in its sole discretion, pursuant to which such
Eligible Institution shall agree to hold and distribute the Total Defeasance Collateral in
accordance with this Agreement. The Borrower or Successor Borrower, as applicable, shall be
the owner of the Defeasance Collateral Account and shall report all income accrued on Total
Defeasance Collateral for federal, state and local income tax purposes in its income tax return.
Borrower shall prepay all cost and expenses associated with opening and maintaining the
Defeasance Collateral Account. Lender shall not in any way be liable by reason of any
insufficiency in the Defeasance Collateral Account.
2.5.4. Successor Borrower. In connection with a Total Defeasance Event Defeasance
Event under this Section 2.5, Borrower shall transfer and assign all obligations, rights and duties
under and to the Note and the Security Agreement, together with the Total Defeasance Collateral
to a newly-created successor entity, which entity shall be a single purpose, bankruptcy remote
entity and which entity shall be designated or established by Lender, at Lender's option (the
"Successor Borrower"). Lender shall also have the right to purchase on behalf of Borrower, or
cause to be purchased on behalf of Borrower, the pledged Total Defeasance Collateral. Such
rights to designate or establish the Successor Borrower as provided above or to purchase, or
cause the purchase of, on behalf of Borrower the pledged Total Defeasance Collateral as
provided above may be exercised by MSMCH in its sole discretion and shall be retained by
MSMCH as the original Lender herein (and any successor or assign of MSMCH under a specific
assignment of such retained rights separate and apart from a Secondary Market Transaction
related to all or any portion of the Loan), notwithstanding any Secondary Market Transaction
related to all or any portion of the Loan. Such Successor Borrower shall assume the obligations
under the Note and the Security Agreement and Borrower shall be relieved of its obligations
under the Loan Documents (other than those obligations which by their terms survive a
repayment, defeasance or other satisfaction of the Loan and/or a transfer of the Property in
connection with Lender's exercise of its remedies under the Loan Documents). Borrower shall
pay a minimum of $1,000 to any such Successor Borrower as consideration for assuming the
obligations under the Note and the Security Agreement. Borrower shall pay all costs and
expenses incurred by Lender, including the cost of establishing the Successor Borrower and
Lender's attorney's fees and expenses, incurred in connection therewith.
2.5.5. Intentionally Omitted.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.1. Borrower Representations. Borrower represents and warrants that:
3.1.1. Organization.
(a) Each of Borrower and Guarantor is duly organized, validly existing and in
good standing with full power and authority to own its assets and conduct its business, and is
duly qualified and in good standing in Texas (with respect to Borrower) and all other
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jurisdictions in which failure to be so qualified could have a Material Adverse Effect. Borrower
has taken all necessary action to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents by it, and has the power and authority to execute,
deliver and perform under this Agreement, the other Loan Documents and all the transactions
contemplated hereby.
(b) Borrower's exact legal name is correctly set forth in the first paragraph of
this Agreement. Borrower is an organization of the type specified in the first paragraph of this
Agreement. Borrower is incorporated or organized under the laws of the state specified in the
first paragraph of this Agreement. 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 of recording, including software, writings, plans,
specifications and schematics, has been for the preceding four ( 4) months (or, if less than four ( 4)
months, the entire period of the existence of Borrower) and will continue to be the address of
Borrower set forth in the first paragraph of this Agreement (unless Borrower notifies Lender in
writing at least thirty (30) days prior to the date of such change). Borrower's organizational
identification number assigned by the state of its incorporation or organization is 5386832.
Borrower's federal tax identification number is 00-0000000. Borrower is not subject to back-up
withholding taxes.
3.1.2. Proceedings. This Agreement and the other Loan Documents have been duly
authorized, executed and delivered by Borrower and constitute a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights
generally, and by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3.1.3. No Conflicts. The execution and delivery of this Agreement and the other Loan
Documents by Borrower and the performance of its obligations hereunder and thereunder will
not conflict with any provision of any law or regulation to which Borrower is subject, or conflict
with, result in a breach of, or constitute a default under, any of the terms, conditions or
provisions of any of Borrower's organizational documents or any agreement or instrument to
which Borrower is a party or by which it is bound, or any order or decree applicable to Borrower,
or result in the creation or imposition of any lien on any of Borrower's assets or property (other
than pursuant to the Loan Documents).
3.1.4. Litigation. There is no action, suit, arbitration or governmental investigation or
proceeding pending, filed or, to Borrower's knowledge, threatened against Borrower, Borrower
Parties, Sponsor or the Property in any court or by or before any other Governmental Authority
which, if determined adversely against Borrower, Borrower Parties, Sponsor or the Property,
would materially and adversely affect (a) the use, operation or value of the Property or
Borrower's title to the Property, (b) the enforceability, validity, perfection or priority of the lien
of the Security Instrument or the other Loan Documents, (c) the ability of Borrower to perform
its obligations under the Security Instrument or the other Loan Documents, (d) the ability of
Guarantor to perform its obligations under the Guaranty, (e) the principal benefit of the security
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intended to be provided by the Loan Documents or (f) the ability of the Property to generate net
cash flow sufficient to service such Loan.
3.1.5. Agreements. Borrower is not a party to any agreement or instrument or subject
to any restriction which might cause a Material Adverse Effect. Borrower is not in default with
respect to any order or decree of any court or any order, regulation or demand of any
Governmental Authority, which default might have consequences that would cause a Material
Adverse Effect. Borrower is not in default in any material respect in the performance,
observance or fulfillment in any material respect of any of the obligations, covenants or
conditions contained in any Permitted Encumbrance or any other material agreement or
instrument to which it is a party or by which it or the Property is bound. Borrower has no
material financial obligation (contingent or otherwise) 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 (a) obligations incurred in the ordinary
course of the operation of the Property and (b) obligations under the Loan Documents.
3.1.6. Consents. No consent, approval, authorization or order of any court or
Governmental Authority is required for the execution, delivery and performance by Borrower of,
or compliance by Borrower with, this Agreement or the other Loan Documents or the
consummation of the transactions contemplated hereby, other than those which have been
obtained by Borrower.
3.1.7. Title. Borrower has indefeasible and insurable fee simple title to the real property
comprising part of the Property and good title to the balance of the Property owned by it, free
and clear of all Liens whatsoever except the Permitted Encumbrances. 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, the Restricted Account
Agreement and the Cash Management Agreement, will create (i) a valid and enforceable first
priority, perfected lien on the Property, subject only to Permitted Encumbrances and (ii) a legal,
valid and enforceable first priority, perfected security interest in and to, and perfected collateral
assignments of, all personalty (including the Leases and Rents), the proceeds arising from the
Property and other collateral securing the Loan, to the extent a security interest may be created
therein and perfected by the filing of a UCC Financing Statement under the Uniform
Commercial Code as in effect in the applicable jurisdiction, all in accordance with the terms
thereof, in each case subject only to any Permitted Encumbrances. There are no mechanics',
materialman's or other similar liens or claims that have been, or may be, filed for work, labor or
materials affecting the Property that are or may be liens prior to, or equal or coordinate with, the
lien of the Security Instrument. None of the Permitted Encumbrances, individually or in the
aggregate, materially interfere with or affect the value, current use or operation of the Property or
the security intended to be provided by the Security Instrument or with the ability of the Property
to generate net cash flow sufficient to service the Loan or the Borrower's ability to pay its
obligations when and as they become due.
3.1.8. No Plan Assets. As of the date hereof and throughout the term of the Loan
(a) Borrower is not and will not be an "employee benefit plan," as defined in Section 3(3) of
ERISA, subject to Title I of ERISA, (b) Borrower is not and will not be a "governmental plan"
within the meaning of Section 3(32) of ERISA, (c) transactions by or with Borrower are not and
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will not be subject to any state statute, regulation or ruling regulating investments of, or fiduciary
obligations with respect to, governmental plans; and (d) none of the assets of Borrower
constitutes or will constitute "plan assets" of one or more such plans within the meaning of 29
C.P.R. Section 2510.3-101., as modified by Section 3(42) of ERISA. As of the date hereof,
neither Borrower, nor any Employee Benefit Affiliate maintains, sponsors or contributes to a
Defined Benefit Plan or a Multiemployer Plan. Except for the Whitestone REIT 40lk program,
neither the Borrower nor an Employee Benefit Affiliate sponsors, contributes to or maintains
either currently or in the past a plan, document, agreement, or arrangement subject to ERISA.
3.1.9. Compliance. Borrower and the Property and the use thereof comply in all
material respects with all applicable Legal Requirements, including, without limitation, parking,
building, zoning and land use laws, ordinances, regulations, and codes, provided, however that
the Property is legally non-conforming with applicable zoning code due to a shortage of
approximately thirty (30) parking spaces. Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority, the violation of which might
cause a Material Adverse Effect. Borrower has not committed any act which may give any
Governmental Authority the right to cause Borrower to forfeit the Property or any part thereof or
any monies paid in performance of Borrower's obligations under any of the Loan Documents.
The Property is used exclusively for office rental and other appurtenant and related uses. In the
event that all or any part of the Improvements are destroyed or damaged, provided that such
damage or destruction is not caused by Borrower, said Improvements can be legally
reconstructed to their condition prior to such damage or destruction, and thereafter exist for the
same use without violating any zoning or other ordinances applicable thereto and without the
necessity of obtaining any variances or special permits.
3.1.10. Financial Information. All financial data, including, without limitation, the
statements of cash flow and income and operating expense, that have been delivered to Lender in
respect of the Property (i) are true, complete and correct in all material respects, (ii) accurately
represent the financial condition of the Property as of the date of such reports, and (iii) have been
prepared in accordance with GAAP (or such other accounting method reasonably approved by
Lender) throughout the periods covered, except as disclosed therein. Borrower does not have
any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to cause a Material Adverse Effect, except for the Permitted Encumbrances
and except as referred to or reflected in said financial statements. Since the date of the financial
statements, there has been no material adverse change in the financial condition, operations or
business of Borrower or the Property from that set forth in said financial statements.
3.1.11. Condemnation. No Condemnation or other proceeding has been commenced or,
to Borrower's best knowledge, is contemplated or threatened with respect to all or any portion of
the Property or for the relocation of roadways providing access to the Property.
3.1.12. Utilities and Public Access. The Property is located on or adjacent to a
dedicated road and is served by water, sewer, electric, sanitary sewer and storm drain facilities
adequate to service the Property for its current and intended uses. The Property has, or is served
by, parking to the extent required to comply with all Leases, Material Agreements and all Legal
Requirements.
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to amend, modify, terminate or otherwise change the partnership certificate,
partnership agreement, articles of incorporation and bylaws, operating agreement,
trust or other organizational documents of Borrower without the prior consent of
Lender.
(viii) Borrower has maintained and will maintain all of its books,
records, financial statements and bank accounts separate from those of its
Affiliates and any constituent party. Borrower's assets have not and will not be
listed as assets on the financial statement of any other Person; provided, however,
that Borrower's assets may be included in a consolidated financial statement of its
Affiliates provided that (i) appropriate notation shall be made on such
consolidated financial statements to indicate the separateness of Borrower and
such Affiliates and to indicate that Borrower's assets and credit are not available
to satisfy the debts and other obligations of such Affiliates or any other Person
and (ii) such assets shall be listed on Borrower's own separate balance sheet.
Borrower has filed and will file its own tax returns (to the extent Borrower is
required to file any such tax returns) and has not and will not file a consolidated
federal income tax return with any other Person. Borrower has maintained and
will maintain its books, records, resolutions and agreements as official records.
(ix) Borrower has been and will be, and at all times has and will hold
itself out to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower or any constituent party of Borrower), has
and shall correct any known misunderstanding regarding its status as a separate
entity, has and shall conduct business in its own name, has not and shall not
identify itself or any of its Affiliates as a division or part of the other and has and
shall maintain and utilize separate stationery, invoices and checks bearing its own
name and not the name of any other person or entity unless such person or entity
is clearly designated as being the Borrower's agent.
(x) Borrower has maintained and will maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and character in
light of its contemplated business operations (provided that there exists sufficient
cash flow from the Property to do so).
(xi) Neither Borrower nor any constituent party has or will seek or
effect the liquidation, dissolution, winding up, liquidation, consolidation or
merger, in whole or in part, of Borrower.
(xii) Borrower has not and will not commingle the funds and other
assets of Borrower with those of any Affiliate or constituent party or any other
Person, and has and will hold all of its assets in its own name.
(xiii) Borrower has and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its individual
assets from those of any Affiliate or constituent party or any other Person.
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LLC Agreement, or (B) the resignation of Member and the admission of an additional member of
Borrower or the SPC Party (as applicable) in accordance with the terms of the Loan Documents
and the LLC Agreement), any natural person duly designated under the applicable organizational
documents shall, without any action of any other Person and simultaneously with the Member
ceasing to be the member of Borrower or the SPC Party (as applicable) automatically be
admitted to Borrower or the SPC Party (as applicable) as a member with a 0% economic interest
("Special Member") and shall continue Borrower or the SPC Party (as applicable) without
dissolution and (ii) Special Member may not resign from Borrower or the SPC Party (as
applicable) or transfer its rights as Special Member unless a successor Special Member has been
admitted to Borrower or the SPC Party (as applicable) as a Special Member in accordance with
requirements of Delaware or Maryland law (as applicable). The LLC Agreement shall further
provide that (i) Special Member shall automatically cease to be a member of Borrower or the
SPC Party (as applicable) upon the admission to Borrower or the SPC Party (as applicable) of the
first substitute member, (ii) Special Meinber shall be a member of Borrower or the SPC Party (as
applicable) that has no interest in the profits, losses and capital of Borrower or the SPC Party (as
applicable) and has no right to receive any distributions of the assets of Borrower or the SPC
Party (as applicable), (iii) pursuant to the applicable provisions of the limited liability company
act of the State of Delaware or Maryland (as applicable, the "Act"), Special Member shall not be
required to make any capital contributions to Borrower or the SPC Party (as applicable) and shall
not receive a limited liability company interest in Borrower or the SPC Party (as applicable), (iv)
Special Member, in its capacity as Special Member, may not bind Borrower or the SPC Party (as
applicable) and (v) except as required by any mandatory provision of the Act, Special Member,
in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to
any action by, or matter relating to, Borrower or the SPC Party (as applicable) including, without
limitation, the merger, consolidation or conversion of Borrower or the SPC Party (as applicable).
In order to implement the admission to Borrower or the SPC Party (as applicable) of Special
Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its
admission to Borrower or the SPC Party (as applicable) as Special Member, Special Member
shall not be a member of Borrower or the SPC Party (as applicable).
(II) The LLC Agreement shall further provide that (i) upon the occurrence of
any event that causes the Member to cease to be a member of Borrower or the SPC Party (as
applicable) to the fullest extent permitted by law, the personal representative of Member shall,
within ninety (90) days after the occurrence of the event that terminated the continued
membership of Member in Borrower or the SPC Party (as applicable) agree in writing (A) to
continue Borrower or the SPC Party (as applicable) and (B) to the admission of the personal
representative or its nominee or designee, as the case may be, as a substitute member of
Borrower or the SPC Party (as applicable) effective as of the occurrence of the event that
terminated the continued membership of Member in Borrower or the SPC Party (as applicable),
(ii) any action initiated by or brought against Member or Special Member under any laws
relating to bankruptcy, insolvency or creditors' rights ("Creditors' Rights Laws") shall not
cause Member or Special Member to cease to be a member of Borrower or the SPC Party (as
applicable) and upon the occurrence of such an event, the business of Borrower or the SPC Party
(as applicable) shall continue without dissolution and (iii) each of Member and Special Member
waives any right it might have to agree in writing to dissolve Borrower or the SPC Party (as
applicable) upon the occurrence of any action initiated by or brought against Member or Special
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material respects and fairly present the financial condition and results of the
operations of Borrower and the Property in accordance with GAAP, as
applicable:, (B) that as of the date of such Officer's Certificate, no Default exists
under this Agreement or any other Loan Document or, if so, specifying the nature
and status of each such Default and the action then being taken by Borrower or
proposed to be taken to remedy such Default, and (C) a calculation reflecting the
Actual Debt Service Coverage Ratio for the prior twelve (12) month period.
(iii) a current rent roll for the Property; and
(iv) a comparison of the budgeted income and expenses and the actual
income and expenses for such quarter and year to date for the Property, together
with a detailed explanation of any variances of more than five percent (5%)
between budgeted and actual amounts for such period and year to date.
(d) Prior to Securitization, Borrower will furnish Lender on or before the
thirty-fifth (35th) day after the end of each calendar month, the following items:
(i) a current balance sheet of Borrower and monthly and year-to-date
statements of income and expense and cash flow prepared for such month with
respect to the Property, and for the corresponding month of the previous year, and
a statement of revenues and expenses for the year-to-date, and a statement of
Adjusted Net Cash Flow for such month.
(ii) an Officer's Certificate from the chief financial officer of
Borrower, certifying to the best of the signer's knowledge: (A) that such
statements referred to in (i) above 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 accordance with GAAP as applicable;
and (B) that as of the date of such Officer's Certificate, no Default exists under
this Agreement or any other Loan Document or, if so, specifying the nature and
status of each such Default and the action then being taken by Borrower or
proposed to be taken to remedy such Default; and
(iii) a current rent roll for the Property.
(e) Borrower shall submit the Annual Budget to Lender not later than thirty
(30) days prior to the commencement of each Fiscal Year. Lender shall have the right to approve
each Annual Budget acting in its reasonable discretion. Annual Budgets approved by Lender
shall hereinafter be referred to as an "Approved Annual Budget." In the event that Borrower
incurs an extraordinary operating expense or extraordinary capital expenditure not set forth in the
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, not to be unreasonably withheld, conditioned, or delayed.
(f) Borrower shall furnish to Lender any notice received from a Tenant
threatening non-payment of Rent or other default, alleging or acknowledging a default by
landlord, requesting a termination of a Lease or a material modification of any Lease or notifying
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(c) Borrower agrees to promptly furnish to Lender all material written
correspondence received from Tenants (including notices of default) or prospective Tenants
concerning existing and/or prospective Leases, and notwithstanding anything contained herein to
the contrary, Borrower shall not willfully withhold from Lender any information regarding
renewal, extension, amendment, modification, waiver of provisions of, termination, rental
reduction of, surrender of space of, or shortening of the term of, any Lease during the term of the
Loan. Borrower further agrees to provide Lender with written notice of a Tenant "going dark"
under such Tenant's Lease within five (5) Business Days after such Tenant "goes dark" and
Borrower's failure to provide such notice shall constitute an Event of Default.
(d) Borrower shall notify Lender in writing, within two (2) Business Days
following receipt thereof, of Borrower's receipt of any Lease Termination Fee paid by any
Tenant under any Lease, and Borrower further covenants and agrees that Borrower shall deposit
such Lease Termination Fee with Lender in accordance with Section 6.6 hereof.
(e) Notwithstanding anything to the contrary contained herein, to the extent
Lender's prior approval is required for any leasing matters set forth in this Section 4.1.9, Lender
shall have ten (10) Business Days from receipt of written request and all required information
and documentation relating thereto in which 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 TEN (1 0) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE
UNDERSIGNED AND LENDER" and the envelope containing the request must be marked
"PRIORITY". In the event that Lender fails to respond to the leasing matter in question within
such time, Lender's approval shall be deemed given for all purposes. 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.
4.1.10. Alterations. Lender's prior approval shall be required in connection with any
alterations to any Improvements (except tenant improvements under any Lease approved by
Lender), (a) that may have a Material Adverse Effect, (b) the cost of which (including any
related alteration, improvement or replacement) is reasonably anticipated to exceed the
Alteration Threshold or (c) that are structural in nature, which approval may be granted or
withheld in Lender's sole discretion. If the total unpaid amounts incurred and to be incurred
with respect to such alterations to the Improvements shall at any time exceed the Alteration
Threshold, 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: (i) cash, (ii) Letters of Credit, (iii) U.S. Obligations, (iv) other securities
acceptable to Lender, such approval by Lender may include (pursuant to the Prudent Lender
Standard) a Rating Agency Confirmation, or (v) a completion bond, acceptable to Lender, such
approval by Lender may include (pursuant to the Prudent Lender Standard) a Rating Agency
Confirmation. Such security shall be in an amount equal to the excess of the total unpaid
amounts incurred and to be incurred with respect to such alterations to the Improvements (other
than such amounts to be paid or reimbursed by Tenants under the Leases) over the Alteration
Threshold. Except as expressly set forth above, Lender's prior approval is not required for
alterations to any Improvements.
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interest, direct or indirect, in a Restricted Party, the Property or any part thereof, whether
voluntarily or involuntarily, in violation of the covenants and conditions set forth in the Security
Instrument and this Agreement (collectively, "Prohibited Transfer").
(b) A Prohibited Transfer shall include, but not be limited to, (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 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; (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 in one or a
series of transactions; (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 or limited partner or any profits or
proceeds relating to such partnership interests 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 any member or any profits or proceeds relating to such membership
interest; (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; (vii) the removal or the resignation of Manager (including,
without limitation, an Affiliated Manager) other than in accordance with Section 7.3 hereof;
(viii) any action for partition of the Property (or any portion thereof or interest therein) or any
similar action instituted or prosecuted by Borrower or by any other person or entity, pursuant to
any contractual agreement or other instrument or under applicable law (including, without
limitation, common law) and/or (ix) any other action instituted by (or at the behest of) Borrower
or its Affiliates or consented to or acquiesced in by Borrower or its Affiliates which results in a
termination of any REA or any Material Agreements, which termination causes a Material
Adverse Effect.
(c) Lender reserves the right to condition the consent to a Prohibited Transfer
requested hereunder upon (a) a modification of the terms hereof and an assumption of this
Agreement and the other Loan Documents as so modified by the proposed Prohibited Transfer,
(b) payment of a transfer fee of 1% of outstanding principal balance of the Loan and all of
Lender's expenses incurred in connection with such Prohibited Transfer, (c) if required by
Lender, receipt of a Rating Agency Confirmation with respect to the Prohibited Transfer, (d) the
proposed transferee's continued compliance with the covenants set forth in this Agreement,
including, without limitation, the covenants in Sections 3.1.24 and 4.2.11 hereof, (e) omitted,
(f) the ability of the transferee to satisfy Lender's then current underwriting standards, (g) an
opinion satisfactory to Lender that the Prohibited Transaction will not cause an Adverse REMIC
Event and/or (h) such other conditions and/or legal opinions as Lender shall determine in its sole
discretion to be in the interest of Lender. All expenses incurred by Lender shall be payable by
Borrower whether or not Lender consents to the Prohibited Transfer. Lender shall not be
required to demonstrate any actual impairment of its security or any increased risk of default
hereunder in order to declare the Debt immediately due and payable upon a Prohibited Transfer
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(y) hereof shall be on terms consistent with the comprehensive all risk insurance
policy required under this subsection (i).
(ii) commercial general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (A) to be on the so-called "occurrence" form with a
combined limit, excluding umbrella coverage, of not less than Two Million and
No/100 Dollars ($2,000,000) and a per occurrence limit of no less than
$1 ,000,000; (B) to continue at not less than the aforesaid limit until required to be
changed by Lender 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
insurable contracts; and (5) contractual liability covering the indemnities
contained in Section 11.13 hereof to the extent the same is available;
(iii) business income insurance (A) with loss payable to Lender;
(B) covering all risks required to be covered by the insurance provided for in
subsection (i) above for a period commencing at the time of loss for such length
of time as it takes to repair or replace with the exercise of due diligence and
dispatch; (C) containing an extended period of indemnity endorsement which
provides that after the physical loss to the Improvements and Personal Property
has been repaired, the continued loss of income will be insureq until such income
either returns to the same level it was at prior to the loss, or the expiration of
twelve (12) months from the date that the 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; and (D) in an amount equal to
one hundred percent (100%) of the projected gross income from the Property for a
period from the date of loss to a date (assuming total destruction) which is twelve
(12) months from the date that the Property is repaired or replaced and operations
are resumed. The amount of such business income 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 income from the Property for the succeeding
twelve (12) month period. 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 the Note and the
other Loan Documents except to the extent such amounts are actually paid out of
the proceeds of such business income insurance;
(iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Property coverage form does not otherwise apply, (A) owner's contingent or
protective liability insurance covering claims not covered by or under the terms or
provisions of the above mentioned commercial general liability insurance policy;
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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;
(v) workers' compensation, subject to the statutory limits of the State,
and employer's liability insurance with a limit of at least one Million and No/100
Dollars ($1 ,000,000) per accident and per disease per employee, and one Million
and No/100 Dollars ($1,000,000) for disease aggregate in respect of any work or
operations on or about the Property, or in connection with the Property or its
operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by Lender on terms consistent with the
commercial property insurance policy required under subsection (i) above;
(vii) umbrella liability insurance in addition to primary coverage in an
amount not less than Five Million and No/100 Dollars ($5,000,000) per
occurrence on terms consistent with the commercial general liability insurance
policy required under subsection (ii) above and (viii) below;
(viii) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence, including umbrella coverage, of One Million and No/100 Dollars
($1,000,000);
(ix) so-called "dramshop" insurance or other liability insurance
required in connection with the sale of alcoholic beverages, if applicable;
(x) insurance against employee dishonesty, if applicable, in an amount
not less than one (1) month of gross revenue from the Property and with a
deductible not greater than Ten Thousand and No/100 Dollars ($10,000), if
applicable;
(xi) if "acts of terrorism" or other similar acts or events or "fire
following" are hereafter excluded from Borrower's comprehensive all risk
insurance policy or policies required under Sections 5.l.l(a)(i) and 5.l.l(a)(iii)
above, Borrower shall obtain an endorsement to such policy or policies, or a
separate policy from an insurance provider which maintains at least an investment
grade rating from (1) S&P (that is, "BBB"), and (2) if Fitch and/or Xxxxx'x has
been designated by Lender in connection with the Securitization and such Rating
Agency also rates the insurer, Fitch (that is, "BBB") and Xxxxx'x (that is,
"Baa3"), as applicable, insuring against all such excluded acts or events and "fire
following," to the extent such policy or endorsement is available, in an amount
determined by Lender in its sole discretion (but in no event more than an amount
equal to the sum of 100% of the "Full Replacement Cost" and twelve (12) months
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business interruption insurance); provided, such endorsement or policy shall be in
form and substance satisfactory to Lender. Notwithstanding the foregoing, for so
long as the Terrorism Risk Insurance Act of 2002, as extended and modified by
the Terrorism Risk Insurance Program Reauthorization Act of 2007 ("TRIPRA")
is in effect (including any extensions thereof or if another federal governmental
program is in effect relating to "acts of terrorism" which provides substantially
similar protections as TRIPRA), Lender shall accept terrorism insurance which
covers against "covered acts" as defined by TRIPRA (or such other program) as
full compliance with this Section 5.1.1(a)(xi) as it relates to the risks that are
required to be covered hereunder but only in the event that TRIPRA (or such
other program) continues to cover both domestic and foreign acts of terrorism;
and
(xii) upon sixty (60) days' notice, such other reasonable 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 5.1.1(a) above shall be obtained
under valid and enforceable policies (collectively, the "Policies" or, in the singular, the "Policy")
and, to the extent not specified above, shall be subject to the approval of Lender as to
.deductibles, loss payees and insureds. Not less than ten (10) days prior to the expiration dates of
the Policies theretofore furnished to Lender, certificates of insurance satisfactory to Lender
evidencing the Policies accompanied by evidence satisfactory to Lender of payment of the
premiums then due thereunder (the "Insurance Premiums"), shall be delivered by Borrower to
Lender.
(c) Any blanket insurance Policy (which may include coverage required under
Section 5.1.1(a)(xi)) above) shall provide the same protection as would a separate Policy
insuring only the Property in compliance with the provisions of Section 5.1.1(a) above. Without
limitation of any provision hereof, (i) Lender's consent required hereunder with respect to any
blanket policy shall include the schedule of locations and values with respect to the same and
(ii) any blanket Policy shall specifically allocate to the Property the amount of coverage from
time to time required hereunder.
(d) All Policies of insurance provided for or contemplated by Section 5 .1.1 (a)
above shall be primary coverage and, except for the Policy referenced in Section 5.1.1(a)(v)
above, shall name Borrower as the insured and Lender and its successors and/or assigns as the
additional insured, as its interests may appear, and in the case of property damage, boiler and
machinery, flood, earthquake and terrorism 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. Borrower shall not procure or permit any of its constituent entities to
procure any other insurance coverage which would be on the same level of payment as the
Policies or would adversely impact in any way the ability of Lender or Borrower to collect any
proceeds under any of the Policies.
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(e) All Policies of insurance provided for in Section 5 .1.1 (a) above, except for
the Policies referenced in Section 5.1.1(a)(v) and (a)(viii) above, 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 canceled without at least thirty (30) days'
written notice to Lender and any other party named therein as an additional
insured and, if obtainable by Borrower using commercially reasonable efforts,
shall not be materially changed (other than to increase the coverage provided
thereby) without such a thirty (30) day notice;
(iii) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder; and
(iv) the Policies shall not exclude coverage for acts of terror or similar
acts of sabotage.
(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 necessary to protect its interest in the Property,
including, without limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate and all premiums or other expenses 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.
(g) 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.
5.1.2. Insurance Company. The Policies shall be issued by financially sound and
responsible insurance companies authorized to do business in the State and having an insurer
financial strength rating of "A-" or better by S&P and Fitch and an insurer financial strength
rating of "A3" by Moody's. If a Securitization occurs, (i) the foregoing required insurance
company rating by a Rating Agency not designated by Lender in connection with such
Securitization shall be disregarded, and (ii) if the insurance company complies with the aforesaid
S&P required rating (and S&P is designated by Lender in connection with such Securitization)
and the other Rating Agencies designated by Lender in connection with such Securitization do
not rate the insurance company, such insurance company shall be deemed acceptable by such
Rating Agency not rating such insurance company. Notwithstanding the foregoing, Borrower
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(ii) (A) in the event the Net Proceeds are insurance proceeds, less than
thirty percent (30%) of each of the (i) fair market value of the Property as
reasonably determined by Lender and (ii) rentable area of the Property has been
damaged, destroyed or rendered unusable as a result of such Casualty or (B) in the
event the Net Proceeds are an Award, less than fifteen percent (15%) of each of
the (i) fair market value of the Property as reasonably determined by Lender, and
(ii) rentable area of the Property has been taken, and such land is located along the
perimeter or periphery of the Property, and no portion of the Improvements is the
subject of the Condemnation;
(iii) Leases requiring payment of annual rent equal to eighty percent
(80%) of the Operating Income received by Borrower during the twelve (12)
month period immediately preceding the Casualty or Condemnation and all Major
Leases and any REAs shall remain in full force and effect during and after the
completion of the Restoration without abatement of rent beyond the time required
for Restoration, notwithstanding the occurrence of such Casualty or
Condemnation;
(iv) Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than sixty (60) days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall diligently pursue the
same to satisfactory completion;
(v) Lender shall be satisfied that any operating deficits and all
payments of principal and interest under the Note will be paid during the period
required for Restoration from (A) the Net Proceeds, or (B) other funds of
Borrower;
(vi) Lender shall be satisfied that the Restoration will be completed on
or before the earliest to occur of (A) the date six (6) months prior to the Maturity
Date, (B) the earliest date required for such completion under the terms of any
Major Lease, Material Agreement and REA, (C) such time as may be required
under 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 (D) the expiration of the insurance coverage referred to in Section
5.l.l(a)(iii);
(vii) the Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable Legal Requirements and in
material compliance with any Major Lease or Material Agreement;
(viii) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements and the requirements in material compliance with any Major Lease
or Material Agreement;
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(ix) such Casualty or Condemnation, as applicable, does not result in
the loss of access to the Property or the related Improvements; and
(x) with respect to a Condemnation, Lender shall be satisfied that
making the Net Proceeds available for Restoration shall be permitted pursuant to
REMIC Requirements.
(b) The Net Proceeds shall be paid directly to Lender and held by Lender in
an interest-bearing account and, until disbursed in accordance with the provisions of this Section
5.3.2, shall constitute additional security for the Debt. The Net Proceeds including all interest
earned thereof, 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 satisfactory to Lender that (A) all
requirements set forth in Section 5.3.2(a) hereof have been satisfied, (B) 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
(C) 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 arising out of the Restoration 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.
(c) All plans and specifications required in connection with the Restoration
shall be subject to prior approval of Lender and an independent architect selected by Lender (the
"Casualty Consultant"). The plans and specifications shall require that the Restoration be
completed in a first-class workmanlike manner at least equivalent to the quality and character of
the original work in the Improvements (provided, however, that in the case of a partial
Condemnation, the Restoration shall be done to the extent reasonably practicable after taking
into account the consequences of such partial Condemnation), so that upon completion thereof,
the Property shall be at least equal in value and general utility to the Property prior to the damage
or destruction; it being understood, however, that Borrower shall not be obligated to restore the
Property to the precise condition of the Property prior to such Casualty provided the Property is
restored, to the extent practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty. Borrower shall restore all Improvements such that when they
are fully restored and/or repaired, such Improvements and their contemplated use fully comply
with all applicable material Legal Requirements and the material requirements of any Major
Lease. 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
approval of Lender and the Casualty Consultant. All costs and expenses incurred by Lender in
connection with recovering, holding and advancing the Net Proceeds for the Restoration
including, without limitation, reasonable attorneys' fees and disbursements and the Casualty
Consultant's fees and disbursements, shall be paid by Borrower.
(d) 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, less the Casualty
Retainage. The term "Casualty Retainage" shall mean, as to each contractor, subcontractor or
materialman engaged in the Restoration, an amount equal to ten percent (10%) of the costs
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actually incurred for work in place as part of the Restoration, as certified by the Casualty
Consultant, until the Restoration has been completed. The Casualty Retainage shall in no event,
and notwithstanding anything to the contrary set forth above in this Section 5.3.2(d), 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 5.3.2(d) and that all approvals necessary for there-occupancy and use
of the Property have been obtained from all appropriate Governmental Authorities, and Lender
receives evidence 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 will 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.
(e) Lender shall not be obligated to make disbursements of the Net Proceeds
more frequently than once every calendar month.
(f) If at any time the Net Proceeds or the undisbursed balance thereof shall
not, in the 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 5.3.2 shall constitute additional security for the Debt.
(g) The excess, if any, of the Net Proceeds and the remaining balance, if any,
of the Net Proceeds Deficiency deposited with Lender after the Casualty Consultant certifies to
Lender that the Restoration has been completed in accordance with the provisions of this Section
5.3.2, and the receipt by Lender of evidence satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be continuing under any of the Loan
Documents; provided, however, the amount of such excess returned to Borrower in the case of a
Condemnation shall not exceed the amount of Net Proceeds Deficiency deposited by Borrower
with the balance being applied to the Debt in the manner provided for in Section 5.3.2(h) hereof.
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pursuant to this Section 6.4.1 upon thirty (30) days' notice to Borrower if Lender determines in
its reasonable discretion that an increase is necessary to maintain proper operation of the
Property.
6.4.2. Release of Capital Expenditure Funds.
(a) Lender shall disburse Capital Expenditure Funds only for Capital
Expenditures.
(b) Lender shall disburse to Borrower the Capital Expenditure Funds (or any
portion thereof) upon satisfaction by Borrower of each of the following conditions: (i) Borrower
shall submit a request for payment to Lender at least ten ( 10) days prior to the date on which
Borrower requests such payment be made and specifies the Capital Expenditures to be paid,
(ii) on the date such request is received by Lender and on the date such payment is to be made,
no Event of Default shall exist and remain uncured, (iii) Lender shall have received a certificate
from Borrower (A) stating that the items to be funded by the requested disbursement are Capital
Expenditures, (B) stating that all Capital Expenditures at the Property to be funded by the
requested disbursement have been completed in a good and workmanlike manner and in
accordance with all applicable Legal Requirements and any Major Lease and Material
Agreement, such certificate to be accompanied by a copy of any license, permit or other approval
required by any Governmental Authority in connection with the Capital Expenditures,
(C) identifying each Person that supplied materials or labor in connection with the Capital
Expenditures to be funded by the requested disbursement, and (D) stating that each such Person
has been paid in full or will be paid in full upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment satisfactory to Lender, (iv) at
Lender's option, a title search for the Property indicating that the Property is free from all Liens,
claims and other encumbrances not previously approved by Lender, and (v) at Lender's option, if
the cost of any individual Capital Expenditure exceeds $25,000, Lender shall have received a
report satisfactory to Lender in its reasonable discretion from an architect or engineer approved
by Lender in respect of such architect or engineer's inspection of the required repairs, and
(vi) Lender shall have received such other evidence as Lender shall reasonably request that the
Capital Expenditures at the Property to be funded by the requested disbursement have been
completed and are paid for or will be paid upon such disbursement to Borrower. Lender shall
not be required to disburse Capital Expenditure Funds more frequently than once each calendar
month, nor in an amount less than the Minimum Disbursement Amount (or a lesser amount if the
total amount of Capital Expenditure Funds is less than the Minimum Disbursement Amount, in
which case only one disbursement of the amount remaining in the account shall be made).
(c) Nothing in this Section 6.4.2 shall (i) make Lender responsible for making
or completing the Capital Expenditures Work; (ii) require Lender to expend funds in addition to
the Capital Expenditure Funds to complete any Capital Expenditures Work; (iii) obligate Lender
to proceed with the Capital Expenditures Work; or (iv) obligate Lender to demand from
Borrower additional sums to complete any Capital Expenditures Work.
(d) Borrower shall permit Lender and Lender's agents and representatives
(including, without limitation, Lender's engineer, architect, or inspector) or third parties to enter
onto the Property during normal business hours (subject to the rights of Tenants under their
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Borrower is obligated to pay or reimburse certain tenant improvement costs and leasing
commissions, (iv) with respect to any Lease Termination Rollover Funds to be released by
Lender for tenant improvements or leasing commissions pursuant to a Replacement Lease,
Lender shall have received a budget for tenant improvement costs and a schedule of leasing
commissions payments and the requested disbursement will be used to pay all or a portion of
such costs and payments, (v) with respect to any Lease Termination Rollover Funds to be
released by Lender for tenant improvements or leasing commissions pursuant to a Replacement
Lease, Lender shall have received a certificate from Borrower (A) stating that all tenant
improvements at the Property to be funded by the requested disbursement have been completed
in good and workmanlike manner and in accordance with all applicable federal, state and local
laws, rules and regulations, such certificate to be accompanied by a copy of any license, permit
or other approval by any Governmental Authority required in connection with the Capital
Expenditures, (B) identifying each Person that supplied materials or labor in connection with the
tenant improvements to be funded by the requested disbursement, and (C) stating that each such
Person has been paid in full or will be paid in full upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment satisfactory to Lender, (vi) with
respect to any Lease Termination Rollover Funds to be released by Lender for tenant
improvements or leasing commissions pursuant to a Replacement Lease, at Lender's option, a
title search for the Property indicating that the Property is free from all Liens, claims and other
encumbrances not previously approved by Lender and (vii) with respect to any Lease
Termination Rollover Funds to be released by Lender for tenant improvements or leasing
commissions pursuant to a Replacement Lease, Lender shall have received such other evidence
as Lender shall reasonably request that the tenant improvements at the Property to be funded by
the requested disbursement have been completed and are paid for or will be paid upon such
disbursement to Borrower. Lender shall not be required to disburse Lease Termination Rollover
Funds more frequently than once each calendar month, unless such requested disbursement is in
an amount greater than the Minimum Disbursement Amount (or a lesser amount if the total
amount of Lease Termination Rollover Funds is less than the Minimum Disbursement Amount,
in which case only one disbursement of the amount remaining in the account shall be made). All
Rent Deficiency disbursements made by Lender shall be deposited into the Deposit Account as if
such sums were received by Borrower as Rent during the calendar month after such request is
made by Borrower.
(b) Notwithstanding the foregoing, upon receipt by Lender of evidence that,
with respect to any new Replacement Lease with a term of at least five (5) years, all tenant
improvements required to be completed by Borrower pursuant to the Replacement Lease, if any,
have been completed and all leasing commissions required to be paid by Borrower with respect
to the Replacement Lease, if any, have been paid, and provided no Event of Default then exists,
Lender shall disburse to Borrower the Lease Termination Rollover Funds on deposit with respect
to such Termination Space provided that the rent to be obtained by Borrower for such
Termination Space during the next succeeding sixty (60) calendar months pursuant to the
respective Replacement Lease is equal to or greater than the sum of the monthly rent last
received from the previous Tenant in such Termination Space pursuant to its Lease multiplied by
sixty (60).
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expenses, including, without limitation, reasonable attorneys' fees, incurred by Lender in
connection with the Property Sale plus an amount equal to one-half percent (0.5%) of the then
outstanding principal balance of the Note, and (ii) all costs and expenses of all third parties and
Rating Agencies in connection with the Property Sale;
(d) Buyer assumes and agrees to pay the Debt as and when due (subject to the
provlSlons of Section 11.22 hereof) and, prior to or concurrently with the closing of such
Property Sale, Buyer and its constituent partners, members or shareholders as Lender may
reasonably require execute, without any cost or expense to Lender, such documents and
agreements as Lender shall reasonably require to evidence and effectuate said assumption,
including, without limitation, the execution and delivery by an Affiliate of such Buyer,
acceptable to Lender, of a recourse guaranty and environmental indemnity in form and substance
identical to the Guaranty and the Environmental Indemnity, respectively, together with such
legal opinions, certifications, and acknowledgements as may be reasonably requested by Lender;
(e) Borrower and Buyer, without any cost to Lender, furnish any information
requested by Lender for the preparation of, and shall authorize Lender to file, new financing
statements and financing statement amendments and other documents to the fullest extent
permitted by applicable law, and shall execute any additional documents reasonably requested by
Lender;
(f) Borrower delivers 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 Lender may reasonably deem necessary at the time of the Property
Sale, all in form and substance reasonably satisfactory to Lender, including, without limitation,
an endorsement or endorsements to Lender's title insurance policy or policies insuring the lien of
the Security Instrument insuring that fee title to the Property is vested in Buyer;
(g) Buyer furnishes, if Buyer is a corporation, partnership or other entity, all
appropriate papers evidencing Buyer's capacity and good standing, and the qualification of the
signers to execute the assumption of the Debt, which papers shall include certified copies of all
documents relating to the organization and formation of Buyer and of the entities, if any, which
are partners or members of Buyer. Buyer and such constituent partners, members or
shareholders of Buyer (as the case may be), as Lender shall require, shall be single purpose,
"bankruptcy remote" entities which satisfy the requirements of Section 3.1.24 hereof and the
requirements of the Rating Agencies (provided, however, such Buyer shall not be a Delaware
Statutory Trust or tenancy-in-common), and whose formation documents shall be approved by
counsel to Lender;
(h) Buyer assumes the obligations of Borrower under any management
agreements pertaining to the Property or assigns to Lender as additional security any new
management agreement entered into in connection with such Property Sale, which such new
management agreement and the new manager thereunder shall each comply with the
requirements of Article 7 hereof;
(i) Buyer furnishes opinions of counsel satisfactory to Lender and its counsel
(A) that Buyer's formation documents provide for the matters described in subparagraph (g)
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if customary, with appropriate verification of the Updated Information through
letters of auditors or opinions of counsel acceptable to Lender and the Rating
Agencies;
(ii) provide opinions of counsel, which may be relied upon by Lender,
the Rating Agencies and their respective counsel, agents and representatives, as to
non-consolidation, fraudulent conveyance, matters of Delaware and federal
bankruptcy law relating to single-member limited liability companies, and true
sale or any other opinion customary in Secondary Market Transactions or
required by the Rating Agencies with respect to the Property and Borrower and
Affiliates, which counsel and opinions shall be satisfactory in form and substance
to Lender and the Rating Agencies;
(iii) provide updated, as of the closing date of the Secondary Market
Transaction, representations and warranties made in the Loan Documents and
such additional representations and warranties as the Rating Agencies may
require;
(iv) execute such amendments to the Loan Documents and Borrower or
any SPC Party's organizational documents as may be reasonably requested by
Lender or requested by the Rating Agencies or otherwise to effect the
Securitization including, without limitation, bifurcation of the Loan into two or
more components and/or separate notes and/or creating a senior/subordinate note
structure (any of the foregoing, a "Loan Bifurcation"); provided, however, that
Borrower shall not be required to modify or amend any Loan Document if such
modification or amendment would (A) change the interest rate, the stated maturity
or the amortization of principal as set forth herein or in the Note, or (B) modify or
amend any other material economic term of the Loan Agreement or the Note,
except in connection with a Loan Bifurcation which may result in varying fixed
interest rates and amortization schedules, but which shall have the same initial
weighted average coupon of the original Note. 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 under this Agreement, the Note, the
Security Instrument and the other Loan Documents if Borrower fails to comply
with any of the terms, covenants or conditions of this Section 9.1(b)(iv) after
expiration of ten ( 1 0) Business Days after written notice thereof; and
(v) at any time prior to a Secondary Market Transaction, execute such
amendments to the Loan Documents as requested by the Lender, in its discretion,
to extend the Maturity Date to a Monthly Payment Date no more than three (3)
months beyond the initial Maturity Date set forth herein (the "Extended
Maturity Date"). In connection with such amendment, the defined term
"Maturity Date" shall then be replaced with the term "Extended Maturity Date,"
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the time period in clause (i) of the definition of "Release Date" shall be extended
by the same period between the initial Maturity Date and the Extended Maturity
Date, and the "Permitted Prepayment Date" shall be extended by the same period
between the initial Maturity Date and the Extended Maturity Date together with
such corresponding changes to other defined terms herein as reasonably requested
by Lender.
(c) If, at the time one or more Disclosure Documents are being prepared for a
Securitization, Lender expects that Borrower alone or Borrower and one or more Affiliates of
Borrower collectively, or the Property alone or the Property and Related Properties collectively,
will be a Significant Obligor, Borrower shall furnish to Lender upon request (i) the selected
financial data or, if applicable, net operating income, required under Item 1112(b)(l) of
Regulation AB, if Lender expects that the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization may, or if the principal amount of the
Loan together with any Related Loans as of the cut-off date for such Securitization and at any
time during which theLoan and any Related Loans are included in a Securitization does, equal
or exceed ten percent (1 0%) (but less than twenty percent (20%)) of the aggregate principal
amount of all mortgage loans included or expected to be included, as applicable, in the
Securitization or (ii) the financial statements required under Item 1112(b)(2) of Regulation AB,
if Lender expects that the principal amount of the Loan together with any Related Loans as of the
cut-off date for such Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization and at any time during which the
Loan and any Related Loans are included in a Securitization does, equal or exceed twenty
percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in the Securitization. Notwithstanding anything in Section 4.1.6 above
to the contrary, such financial data or financial statements shall be furnished to Lender
(A) within ten (10) Business Days after notice from Lender in connection with the preparation of
Disclosure Documents for the Securitization, (B) not later than thirty (30) days after the end of
each fiscal quarter of Borrower and (C) not later than seventy-five (75) days after the end of each
fiscal year of Borrower; provided, however, that Borrower shall not be obligated to furnish
financial data or financial statements pursuant to clauses (B) or (C) of this sentence with respect
to any period for which a filing pursuant to the Exchange Act in connection with or relating to
the Securitization (an "Exchange Act Filing") is not required. If requested by Lender, Borrower
shall use commercially reasonable efforts to furnish to Lender financial data and/or financial
statements for any tenant of the Property if, in connection with a Securitization, Lender expects
there to be, with respect to such tenant or group of affiliated tenants, a concentration within all of
the mortgage loans included or expected to be included, as applicable, in the Securitization such
that such tenant or group of affiliated tenants would constitute a Significant Obligor.
(d) All financial data and financial statements provided by Borrower
hereunder pursuant to Section 9.1(c) and@ hereof shall be prepared in accordance with GAAP,
and shall meet the requirements of Regulation AB and other applicable legal requirements. All
financial statements referred to in Section 9.1(c) above shall be audited by independent
accountants of Borrower acceptable to Lender in accordance with Regulation AB and all other
applicable legal requirements, shall be accompanied by the manually executed report of the
independent accountants thereon, which report shall meet the requirements of Regulation AB
and all other applicable legal requirements, and shall be further accompanied by a manually
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have signed the Registration Statement and each Person that controls the Affiliate within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the
"Xxxxxx Xxxxxxx Group"), and Xxxxxx Xxxxxxx, and any other placement agent or underwriter
with respect to the Securitization, each of their respective directors and each Person who controls
Xxxxxx Xxxxxxx or any other placement agent or underwriter within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act (collectively, the "Underwriter Group")
for any losses, claims, damages or liabilities (collectively, the "Liabilities") to which Lender, the
Xxxxxx Xxxxxxx Group or the Underwriter Group may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact furnished by Borrower contained in the Relevant Sections or arise out of or are based upon
the omission or alleged omission by Borrower to state therein a material fact required to be stated
in the Relevant Sections or necessary in order to make the statements in the Relevant Sections, in
light of the circumstances under which they were made, not misleading and (C) agreeing to
reimburse Lender, the Xxxxxx Xxxxxxx Group and/or the Underwriter Group for any legal or
other expenses reasonably incurred by Lender, the Xxxxxx Xxxxxxx Group and the Underwriter
Group in connection with investigating or defending. the Liabilities; provided, however, that
Borrower will be liable in any such case under clauses (B) or (C) above only to the extent that
any such loss claim, damage or liability arises out of or is based upon any such untrue statement
or omission made therein in reliance upon and in conformity with information furnished to
Lender by or on behalf of Borrower in connection with the preparation of the Disclosure
Document or in connection with the underwriting or closing of the Loan, including, without
limitation, financial statements of Borrower, operating statements and rent rolls with respect to
the Property (collectively, the "Provided Information"). The indemnification provided in
clauses (B) and (C) above shall be effective whether or not the indemnification agreement
described above is provided to Borrower or Guarantor; provided, however, such indemnity shall
be limited to the Provided Information and shall only be effective to the extent that Lender
accurately states the Provided Information in the applicable Disclosure Document. The aforesaid
indemnity agreement will be in addition to any liability which Borrower may otherwise have.
(c) In connection with Exchange Act Filings, Borrower shall (i) indemnify
Lender, the Xxxxxx Xxxxxxx Group and the Underwriter Group for Liabilities to which Lender,
the Xxxxxx Xxxxxxx Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact furnished by Borrower in the Relevant Sections of the Disclosure Document or
upon the omission or alleged omission to state in the Disclosure Document a material fact
required to be stated in the Disclosure Document in order to make the statements in the
Disclosure Document related to Relevant Sections, in light of the circumstances under which
they were made, not misleading and (ii) reimburse Lender, the Xxxxxx Xxxxxxx Group or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender, the Xxxxxx
Xxxxxxx Group or the Underwriter Group in connection with defending or investigating the
Liabilities.
(d) Promptly after receipt by an indemnified party under this Section 9.2 of
notice of the commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 9.2, notify the
indemnifying party in writing of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying party from any liability which the
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indemnifying party may have to any indemnified party hereunder except to the extent that failure
to notify causes prejudice to the indemnifying party. In the event that any action is brought
against any indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled, jointly with any other indemnifying party, to
participate therein and, to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party. After notice
from the indemnifying party to such indemnified party under this Section 9.2, such indemnified
party shall pay for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded that there are any
legal defenses available to it and/or other indemnified parties that are different from or additional
to those available to the indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assert such legal defenses and to otherwise participate in the defense
of such action on behalf of such indemnified party at the cost of the indemnifying party. The
indemnifying party shall not be liable for the expenses of more than one separate counsel unless
an indemnified party shall have reasonably concluded that there may be legal defenses available
to it that are different from or additional to those available to another indemnified party.
(e) In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Section 9.2(b) or(£} hereof is for any reason held
to be unenforceable as to an indemnified party in respect of any losses, claims, damages or
liabilities (or action in respect thereof) referred to therein which would otherwise be
indemnifiable under Section 9 .2(b) or (£} hereof, the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such losses, claims, damages or
liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the respective parties are entitled, the following
factors shall be considered: (i) Xxxxxx Xxxxxxx'x and Borrower's relative knowledge and access
to information concerning the matter with respect to which the claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any other equitable
considerations appropriate in the circumstances. Lender and Borrower hereby agree that it
would not be equitable if the amount of such contribution were determined by pro rata or per
capita allocation.
(f) Borrower shall indemnify Lender and its officers, directors, partners,
employees, representatives, agents and Affiliates against any Losses to which Lender or its
officers, directors, partners, employees, representatives, agents and Affiliates, may become
subject in connection with any indemnification to the Rating Agencies in connection with
issuing, monitoring or maintaining the Securities insofar as the Losses arise out of or are based
upon any untrue statement of any material fact in any information provided by or on behalf of
Borrower to the Rating Agencies (the "Covered Rating Agency Information") or arise out of
or are based upon the omission to state a material fact in the Covered Rating Agency Information
required to be stated therein or necessary in order to make the statements in Covered Rating
Agency Information, in light of the circumstances under which they were made, not misleading.
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payable on the Maturity Date, or (ii) pay within five (5) days when due (A) any
monthly installment of principal and/or interest due under the Note and any
amount required to be paid into the Reserve Funds or (B) any other sums payable
under the Note, this Agreement or any of the other Loan Documents;
(ii) if any of the Taxes or Other Charges are not paid pnor to
delinquency;
(iii) if the Policies are not kept in full force and effect or if evidence of
the same is not delivered to Lender as provided in Section 5.l.l(b) hereof;
(iv) if Borrower breaches or permits or suffers a breach of Sections
4.2.1 hereof, or 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, any SPC Party, Sponsor or Guarantor shall make an
assignment for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for Borrower,
any SPC Party, Sponsor or Guarantor or if Borrower, any SPC Party, Sponsor or
Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower, any SPC Party, Sponsor or Guarantor, or if any
proceeding for the dissolution or liquidation of Borrower, any SPC Party, Sponsor
or Guarantor shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower, any SPC Party, Sponsor or Guarantor, upon the same not being
discharged, stayed or dismissed within forty-five (45) days;
(viii) if the Property becomes subject to any mechanic's, materialman's
or other Lien other than a Lien for local real estate taxes and assessments not then
due and payable and the Lien shall remain undischarged of record (by payment,
bonding or otherwise) for a period of thirty (30) days after Borrower becomes
aware of such Lien;
(ix) 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;
(x) omitted;
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(xi) if (A) Borrower violates or does not comply with any of the
provisions of Section 4.1.6 hereof, or (B) Borrower or any SPC Party breaches
any representation, warranty or covenant contained in Section 3 .1.24 hereof;
(xii) if Borrower, Guarantor, or Sponsor fails to comply with the
covenants as to the Patriot Act, OF AC, and Embargoed Persons as set forth in
Section 4.1.1 hereof;
(xiii) if Borrower breaches any of the negative covenants contained in
Section 4.2.11 hereof;
(xiv) omitted;
(xv) if Guarantor breaches in any material respect any covenant,
warranty or representation contained in the Guaranty;
(xvi) if (A) Borrower shall fail (beyond any applicable notice or grace
period) to pay any rent, additional rent or other charges payable under any
Material Agreement as and when payable thereunder, (B) Borrower defaults
under any Material Agreements beyond the expiration of applicable notice and
grace periods, if any, thereunder, (C) any of the Material Agreements are
amended, supplemented, replaced, restated or otherwise modified in any material
respect without Lender's prior written consent or if Borrower consents to a
transfer of any party's interest thereunder without Lender's prior written consent,
or (D) any Material Agreement and/or the estate created thereunder is canceled,
rejected, terminated, surrendered or expires pursuant to its terms, unless in such
case Borrower enters into a replacement thereof in accordance with the applicable
terms and provisions hereof.
(xvii) 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 xvi 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; or
(xviii) if there shall be default under any of the other Loan Documents
beyond any applicable cure periods contained in such Loan Documents, whether
as to any Borrower Party or the Property, or if any other such event shall occur or
condition shall exist, if the effect of such event or condition is to accelerate the
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maturity of any portion of the Debt or to permit Lender to accelerate the maturity
of all or any portion of the Debt.
(b) Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vi) or (vii) above with respect to the Borrower and/or SPC Party
only) and at any time thereafter Lender may, 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, 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, without limitation, 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 the Property, including, without
limitation, all rights or remedies available at law or in equity; and upon any Event of Default
described in clauses (vi) or (vii) above with respect to the Borrower and/or SPC Party only, the
Debt and all 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 any such notice or demand, anything contained herein or in
any other Loan Document to the contrary notwithstanding.
Section 10.2. Remedies.
(a) Upon the occurrence 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 the Property. 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 sole discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract
or as set forth herein or in the other Loan Documents. Without limiting the generality of the
foregoing, if an Event of Default is continuing (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 and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.
(b) 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 sole discretion including, without limitation, the
following circumstances: (i) in the event Borrower defaults beyond any applicable grace period
in the payment of one or more scheduled payments of principal and 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
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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 sole
discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder.
Borrower shall execute and deliver to Lender from time to time, promptly after the request of
Lender, a severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and substance reasonably
satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make and execute all
documents necessary or desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not make or execute any
such documents under such power until three (3) days after notice has been given to Borrower by
Lender of Lender's intent to exercise its rights under such power. Except as may be required in
connection with a Securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be
obligated to pay any costs or expenses incurred in connection with the preparation, execution,
recording or filing of the Severed Loan Documents, and (ii) 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) Any amounts recovered from the Property or any other collateral for the
Loan after an Event of Default may be applied by Lender toward the payment of any interest
and/or principal of the Loan and/or any other amounts due under the Loan Documents in such
order, priority and proportions as Lender in its sole discretion shall determine.
Section 10.3. Right to Cure Defaults.
Lender may, but without any obligation to do so and without notice to or demand on
Borrower and without releasing Borrower from any obligation hereunder or being deemed to
have cured any Event of Default hereunder, make, do or perform any obligation of Borrower
hereunder in such manner and to such extent as Lender may deem necessary. Lender is
authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action
or proceeding to protect its interest in the Property for such purposes, and the cost and expense
thereof (including reasonable attorneys' fees to the extent permitted by law), with interest as
provided in this Section 10.3, shall constitute a portion of the Debt and shall be due and payable
to Lender upon demand. All such costs and expenses incurred by Lender in remedying such
Event of Default or such failed payment or act or in appearing in, defending, or bringing any
action or proceeding shall bear interest at the Default Rate, for the period after such cost or
expense was incurred into the date of payment to Lender. All such costs and expenses incurred
by Lender together with interest thereon calculated at the Default Rate shall be deemed to
constitute a portion of the Debt and be secured by the liens, claims and security interests
provided to Lender under the Loan Documents and shall be immediately due and payable upon
demand by Lender therefore.
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Section 10.4. Remedies Cumulative.
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 singly, concurrently or
otherwise, at such time and in such order as Lender may determine in Lender's sole 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 XI.
MISCELLANEOUS
Section 11.1. Successors and Assigns.
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 11.2. 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 discretion of
Lender and shall be final and conclusive. Prior to a Securitization, whenever pursuant to this
Agreement the Rating Agencies are given any right to approve or disapprove, or any
arrangement or term is to be satisfactory to the Rating Agencies, the decision of Lender to
approve or disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory, based upon Lender's determination of Rating Agency criteria, shall be substituted
therefore.
Section 11.3. Governing Law.
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF
TEXAS, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN
THE STATE OF TEXAS, AND THE PROCEEDS OF THE LOAN DELIVERED
PURSUANT HERETO WERE DISBURSED TO THE STATE OF TEXAS, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSIDP 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
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WITH, THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES
OF AMERICA.
(b) ANY LEGAL SIDT, ACTION OR PROCEEDING AGAINST
LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY AT LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR
STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX XXXX,
PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW AND BORROWER WAIVES ANY OBJECTIONS WIDCH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF
ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUIT, ACTION OR PROCEEDING. BORROWER HEREBY IRREVOCABLY
CONSENTS:
TO SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE, OR IN ANY
OTHER METHOD PERMITTED BY APPLICABLE LAW, AT THE ADDRESS
SPECIFIED IN SECTION 11.6 HEREOF, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF
SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER
PROVIDED HEREIN SHALL .BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS HEREUNDER.
Section 11.4. Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement 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 11.5. 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 any other Loan Document, 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
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 or the other
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Loan Documents, or to declare a default for failure to effect prompt payment of any such other
amount. Lender shall have the right to waive or reduce any time periods that Lender is entitled
to under the Loan Documents in its sole and absolute discretion.
Section 11.6. Notices.
All notices, demands, requests, consents, approvals or other communications (any of the
foregoing, a "Notice") required, permitted, or desired to be given hereunder shall be in writing
sent by telefax (with answer back acknowledged) or by registered or certified mail, postage
prepaid, return receipt requested, or delivered by hand or reputable overnight courier addressed
to the party to be so notified at its address hereinafter set forth, or to such other address as such
party may hereafter specify in accordance with the provisions of this Section 11.6. Any Notice
shall be deemed to have been received: (a) three (3) days after the date such Notice is mailed,
(b) on the date of sending by telefax if sent during business hours on a Business Day (otherwise
on the next Business Day), (c) on the date of delivery by hand if delivered during business hours
on a Business Day (otherwise on the next Business Day), and (d) on the next Business Day if
sent by an overnight commercial courier, in each case addressed to the parties as follows:
If to Lender:
with a copy to:
If to Borrower:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Holdings LLC
0000 Xxxxxxxx
Xxx X xxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile No. 212.507.4859
Xxxxxxx Xxxxx LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xx Xxxxxx
Facsimile No. 215.864.8999
Whitestone Uptown Tower LLC
c/o Whitestone REIT
0000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxx
Xxxx Xxxxxxx
Facsimile No. 713.465.8847
Bass, Xxxxx & Xxxx PLC
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: X. Xxxxxxxx Xxxxxxx, V
Facsimile No. 901.543.5999
Any party may change the address to which any such Notice is to be delivered by
furnishing ten (10) days written notice of such change to the other parties in accordance with the
provisions of this Section 11.6. Notices shall be deemed to have been given on the date as set
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forth above, even if there is an inability to actually deliver any such Notice because of a changed
address of which no Notice was given, or there is a rejection or refusal to accept any Notice
offered for delivery. Notice for any party may be given by its respective counsel. Additionally,
Notice from Lender may also be given by Servicer and Lender hereby acknowledges and agrees
that Borrower shall be entitled to rely on any Notice given by Servicer as if it had been sent by
Lender.
Section 11.7. Trial by Jury.
BORROWER AND LENDER EACH 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 BORROWER AND LENDER, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
Section 11.8. Headings.
The Article and/or Section headings and the Table of Contents in this Agreement are
included herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 11.9. 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 11.10. 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.
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Section 11.11. 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. 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 11.12. Remedies of Borrower.
In the event that 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, neither Lender nor its agents shall be liable for any monetary damages,
and Borrower's sole remedy shall be limited to commencing an action seeking injunctive relief
or declaratory judgment. Any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
Section 11.13. Expenses; General Indemnity; Mortgage Tax Indemnity; Employee
Benefit Indemnity; Duty to Defend; Survival.
11.13.1. Expenses. Borrower shall pay or, if Borrower fails to pay, reimburse
Lender upon receipt of written notice from Lender, for all reasonable costs and expenses
(including reasonable attorneys' fees and disbursements and any Rating Agency fees and
disbursements) incurred by Lender in connection with (i) the ongoing performance of and
compliance with agreements and covenants of any Borrower Party contained in this Agreement
and the other Loan Documents including, without limitation, confirming compliance with
environmental and insurance requirements; (ii) Lender's ongoing performance of and
compliance with all 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; (iii) the
negotiation, preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower; (iv) the filing and recording fees and expenses,
title insurance and reasonable fees and expenses of counsel for providing to Lender all required
legal opinions, and other similar expenses incurred, in creating and perfecting the Liens in favor
of Lender pursuant to this Agreement and the other Loan Documents; (v) enforcing or preserving
any rights, in response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation or otherwise, 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 (vi) enforcing any obligations of or collecting any payments due from the Borrower
Parties under this Agreement, the other Loan Documents or with respect to the Property or in
connection with any "special servicing" of the Loan (including, without limitation, any costs and
expenses incurred in connection with transferring the Loan to a special servicer) or restructuring
of the credit arrangements provided under this Agreement in the nature of a "work out" or of any
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insolvency or bankruptcy proceedings (including, without limitation, loan servicing or special
servicing fees, loan advances, and "work-out" and/or liquidation fees); 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 or willful misconduct of Lender.
Any costs due and payable to Lender may be paid to Lender pursuant to the Cash Management
Agreement.
11.13.2. General Indemnity. Borrower shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless Lender Indemnitees (defined below) from and
against any and all claims, suits, liabilities (including, without limitation, strict liabilities),
actions, proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive
damages, foreseeable and unforeseeable consequential damages, of whatever kind or nature
(including but not limited to reasonable attorneys' fees and other costs of defense) (collectively,
the "Losses") that may be imposed upon or incurred by or asserted against any Lender
Indemnitees and directly or indirectly arising out of or in any way relating to any one or more of
the following: (a) any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan Documents;
(b) the use or intended use of the proceeds of the Loan; (c) ownership of the Security Instrument,
the Property or any interest therein or receipt of any Rents; (d) any amendment to, or
restructuring of, the Debt, and the Note, this Agreement, the Security Instrument, or any other
Loan Documents; (e) any and all lawful action that may be taken by Lender in connection with
the enforcement of the provisions of this Agreement, the Security Instrument, the Note or any of
the other Loan Documents, whether or not suit is filed in connection with same, or in connection
with Borrower, any guarantor or indemnitor and/or any partner, joint venturer or shareholder
thereof becoming a party to a voluntary or involuntary federal or state bankruptcy, insolvency or
similar proceeding; (f) any accident, injury to or death of persons or loss of or damage to
property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (g) any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (h) any failure on the part of
Borrower to perform or be in compliance with any of the terms of the Security Instrument;
(i) performance of any labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof; (j) the failure of any person to file timely with the
Internal Revenue Service an accurate Form 1099-S, Proceeds from Real Estate Transactions, or
Form 0000-X, Xxxxxxxxx for Recipients of Proceeds from Real Estate Broker and Barter
Exchange Transactions, which may be required in connection with the Security Instrument, or to
supply a copy thereof in a timely fashion to the recipient of the proceeds of the transaction in
connection with which the Security Instrument is made; (k) any failure of the Property to be in
compliance with any Legal Requirements; (1) the enforcement by any Lender Indemnitees of the
provisions of this Section 11.13; (m) any and all claims and demands whatsoever which may be
asserted against Lender by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants, or agreements contained in any Lease; (n) the
payment of any commission, charge or brokerage fee to anyone claiming through Borrower
which may be payable in connection with the funding of the Loan; or (o) any misrepresentation
made by Borrower in this Agreement, the Security Instrument or any other Loan Document;
provided, however, that Borrower shall not have any obligation to the Lender Indemnitees
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hereunder to the extent that such Losses arise from the gross negligence, illegal acts, fraud or
willful misconduct of the Lender Indemnitees. 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 Losses incurred by the
Lender Indemnitees. Any amounts payable to Lender by reason of the application of this Section
11.13 shall become immediately due and payable and shall bear interest at the Default Rate from
the date loss or damage is sustained by Lender Indemnitees until paid.
For purposes of this Section 11.13, the term "Lender Indemnitees" shall mean Lender
and 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, persons
and entities who may hold or acquire or will have held a full or partial interest in the Loan
secured hereby (including, but not limited to, 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 but not limited to 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, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial portion of Lender's
assets and business).
11.13.3. Mortgage Tax Indemnity. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless each Lender Indemnitee from and against
any and all Losses imposed upon or incurred by or asserted against any Lender Indemnitee and
directly or indirectly arising out of or in any way relating to (i) any tax on the making and/or
recording of the Security Instrument, the Note or any of the other Loan Documents, or (ii) any
transfer tax incurred by any Lender Indemnitee in connection with the exercise of remedies
hereunder, under the Security Instrument or under any other Loan Documents.
11.13.4. Employee Benefit Plans Indemnity. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless each Lender Indemnitee from and
against any and all Losses (including, without limitation, reasonable attorneys' fees and costs
incurred in the investigation, defense, and settlement of Losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's sole discretion)
that Lender may incur, directly or indirectly, as a result of a default under Sections 3.1.8 and/or
4.2.11 hereof.
11.13.5. Duty to Defend; Attorney's Fees and Other Fees and Expenses. Upon
written request by any Lender Indemnitee, Borrower shall defend such Lender Indemnitees (if
requested by any Lender Indemnitee, in the name of the Lender Indemnitee) by attorneys and
other professionals approved by the Lender Indemnitees. Notwithstanding the foregoing, any
Lender Indemnitees may, in their sole discretion, engage their own attorneys and other
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professionals to defend or assist them, and, at the option of Lender Indemnitees, their attorneys
shall control the resolution of any claim or proceeding. Upon demand, Borrower shall pay or, in
the sole discretion of the Lender lndemnitees, reimburse, the Lender lndemnitees for the
payment of reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.
11.13.6. Survival. The obligations and liabilities of Borrower under this Section
11.13 shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment,
entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of
foreclosure of the Security Instrument, except with respect to Losses arising as a result of a first
event occurring after the date on which Lender (or the applicable Lender Indemnitee) acquires
title to or possession of the Property via foreclosure, deed in lieu of foreclosure, or otherwise;
provided that such losses are not the result of an action or inaction by Borrower, its Affiliates or
any of their respective authorized agents or employees.
11.13.7. Environmental Indemnity. Simultaneously herewith, Borrower and
Guarantor have executed and delivered the Environmental Indemnity to Lender, which
Environmental Indemnity is not secured by the Security Instrument.
Section 11.14. 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 11.15. Offsets, Counterclaims and Defenses. Any assignee of Lender's interest
in and to this Agreement 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 00.00.Xx 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 or 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 nothing contained in this Agreement or the other Loan Documents shall be
deemed to confer upon anyone other than Lender 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
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make the Loan in the absence of strict compliance with any or all thereof and no other Person
shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole discretion, Lender
deems it advisable or desirable to do so.
Section 11.17.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, Xxxxxx Xxxxxxx Mortgage Capital Holdings LLC,
or any of their Affiliates shall be subject to the prior approval of Lender.
Section 11.18. 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 members or partners and
others with interests in Borrower, and of the Property, and shall not 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 11.19. Waiver of Offsets/Defenses/Counterclaims.
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 or otherwise
to offset any obligations to make the payments required by the Loan Documents. No failure by
Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any
offset against, any payments which Borrower is obligated to make under any of the Loan
Documents.
Section 11.20. 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
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in connection with the Loan or to commence any other appropriate action or proceeding in order
for Lender to exercise its remedies against such security; or (h) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, to
the extent of any Losses incurred by Lender (including attorneys' fees and costs reasonably
incurred) arising out of or in connection with any of the following:
(i) fraud or willful misrepresentation by Borrower, any of the
Exculpated Parties or any Borrower Party in connection with the Loan;
(ii) the gross negligence or willful misconduct of Borrower, any of the
Exculpated Parties or any Borrower Party in connection with the Loan;
(iii) the breach beyond any applicable notice and cure periods expressly
contained in the Environmental Indemnity or in any other Loan Document, of any
representation, warranty, covenant or indemnification provision in the
Environmental Indemnity or in any other Loan Document concerning
environmental laws, hazardous substances and asbestos and any indemnification
of Lender with respect thereto in any such document;
(iv) waste to the Property (or any portion thereof) caused by intentional
acts or intentional omissions of Borrower, any Exculpated Party, or any Borrower
Party, or the removal or disposal of any portion of the Property after an Event of
Default;
(v) the misapplication, misappropriation or conversion by Borrower,
any of the Exculpated Parties or the Borrower Parties, to the extent actually
received by Borrower, any of the Exculpated Parties or the Borrower Parties, of
(A) any insurance proceeds paid by reason of any loss, damage or destruction to
the Property, (B) any Awards or other amounts received in connection with the
Condemnation of all or a portion of the Property, or (C) any Rents following an
Event of Default or (D) any Tenant security deposits or Rents collected in
advance;
(vi) any Personal Property of Borrower taken from the Property by or
on behalf of Borrower, any of the Exculpated Parties or any Borrower Parties, and
not replaced with Personal Property of the same utility and of the same of greater
value;
(vii) any act of arson by Borrower, any of the Exculpated Parties, or any
Borrower Parties;
(viii) any fees or comrmss1ons paid by Borrower or on behalf of
Borrower after the occurrence of an Event of Default to any Exculpated Party or
any Borrower Party in violation of the terms of the Note, this Agreement, the
Security Instrument or the other Loan Documents;
(ix) failure to pay Taxes, charges for labor or materials, or other
charges that can create Liens on any portion of the Property (unless such Taxes
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and charges are the subject of a bona fide dispute in which Borrower is contesting
the amount or validity thereof in accordance with the terms of this Agreement)
and/or the failure to pay Insurance Premiums in accordance with the terms hereof;
(x) 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;
(xi) any failure by Borrower to permit on-site inspections of the
Property as required by, and subject to the terms of, this Agreement and/or the
other Loan Documents;
(xii) any failure of Borrower to appoint a new property manager upon
the request of Lender as required by the terms of this Agreement and/or the other
Loan Documents;
(xiii) Borrower's breach of, or failure to comply with, the
representations, warranties and covenants contained in Sections 4.1.5 and/or
4.1.9(c) hereof;
(xiv) Borrower's indemnification of Lender Indemnitees set forth m
Sections 9.2, 11.13.3, and 11.13.4 hereof;
(xv) any litigation or other legal proceeding related to the Debt filed by
Borrower, any Borrower Party or any Exculpated Party that delays, opposes,
impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates the
efforts of Lender to exercise any rights and remedies available to Lender as
provided herein and in the other Loan Documents;
(xvi) the seizure or forfeiture of the Property, or any portion thereof, or
Borrower's interest therein, resulting from criminal wrongdoing by Borrower, any
of the Exculpated Parties, or any Borrower Parties;
(xvii) Borrower's failure to make the Condemnation Payment, if
required, pursuant to Section 5.3.3 hereof; and/or
(xviii) a casualty affecting the Property, which results in Losses to Lender
because of (1) the Property is non-conforming or legal non-conforming under the
applicable zoning laws, ordinances and/or regulations in the jurisdiction in which
the Property is located ("Zoning Code"), and (2) the affected Improvements
cannot be rebuilt to their pre-casualty condition under the terms of the Zoning
Code other than as a result of changes to the Zoning Code as in effect as of the
date hereof, and (3) the Net Proceeds available to Lender under the terms of the
Security Instrument are insufficient to repay the Debt in full or Borrower does not
otherwise repay the Debt in full.
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Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan
Documents, (A) Lender shall not be deemed to have waived any right which Lender may have
under Section 506(a), 506(b), llll(b) or any other provisions 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 owing to Lender in accordance with the Loan Documents, and (B) the Debt shall be
fully recourse to Borrower in the event that: (i) the first full monthly payment of principal and
interest under this Agreement and the Note is not paid when due; (ii) Borrower fails to comply
with the provisions of Section 4.2.1 hereof or Article 8 hereof; (iii) Borrower fails to comply
with any provision of Section 3.1.24 hereof; (iv) Borrower fails to comply with the Cash
Management Agreement relating to the institution of cash management generally; (v) Borrower
or any SPC Party files a voluntary petition under the Bankruptcy code or any other Federal or
state bankruptcy or insolvency law; (vi) an Affiliate, officer, director, or representative which
Controls, directly or indirectly, Borrower or any SPC Party, files, or joins in the filing of, an
involuntary petition against Borrower or any SPC Party under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning
creditors for any involuntary petition against Borrower or any SPC Party from any Person;
(vii) Borrower or any SPC Party files an answer consenting to or otherwise acquiescing in or
joining in any involuntary petition filed against it, by any other Person under the Bankruptcy
Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be
solicited petitioning creditors for any involuntary petition from any Person; (viii) any Affiliate,
officer, director, or representative which Controls Borrower or any SPC Party consents to or
acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or
examiner for Borrower or any SPC Party or any portion of the Property; (ix) Borrower or any
SPC Party makes an assignment for the benefit of creditors, or admits, in writing or in any legal
proceeding, its insolvency or inability to pay its debts as they become due; (x) there is
substantive consolidation of Borrower (or any Restricted Party) with any other Person in
connection with any federal or state bankruptcy proceeding involving the Guarantor or any of its
Affiliates, (xi) Borrower (or any Restricted Party) contests or opposes any motion made by
Lender to obtain relief from the automatic stay or seeks to reinstate the automatic stay in the
event of any federal or state bankruptcy or insolvency proceeding involving the Guarantor or its
Affiliates; or (xii) Borrower (or any Restricted Party) accepts from any Guarantor or Guarantor
solicits or provides any debtor-in-possession financing to Borrower in the event Borrower (or
any Restricted Party) is the subject of a bankruptcy or insolvency proceeding.
The obligations and liabilities of Borrower under this Section 11.22 shall fully survive
indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of
foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the
Security Instrument.
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Section 11.27.Assignments and Participations.
(a) The Lender may assign to one or more Persons all or a portion of its rights
and obligations under this Loan Agreement.
(b) Lender may sell participations to one or more Persons in or to all or a
portion of its rights and obligations under this Loan Agreement; provided, however, that
(i) Lender's obligations under this Loan Agreement shall remain unchanged, (ii) Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations,
(iii) Lender shall remain the holder of any Note for all purposes of this Loan Agreement and
(iv) Borrower shall continue to deal solely and directly with Lender in connection with Lender's
rights and obligations under and in respect of this Loan Agreement and the other Loan
Documents.
(c) Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.27, disclose to the assignee or
Participant or proposed assignee or Participant, as the case may be, any information relating to
Borrower or any of its Affiliates or to any aspect of the Loan that has been furnished to the
Lender by or on behalf of the Borrower or any of its Affiliates.
(d) Upon such assignment the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such assignment, have the rights and obligations of
Lender under this Agreement.
(e) In connection with any Secondary Market Transaction, including, without
limitation, any assignment or participation pursuant to this Section 11.27, at the request of
Lender, Borrower shall (i) appoint, as its agent, a registrar and transfer agent (the "Register")
reasonably acceptable to Lender which shall maintain, subject to such reasonable regulations as
it shall provide, such books and records as are necessary for the registration and transfer of the
Note in a manner that shall cause the Note to be considered to be in registered form for purposes
of Section 163(f) of the Code, and (ii) otherwise cooperate with Lender in order to cause the
Note to be in registered form pursuant to Section 163(f) of the Code. The option to convert the
Note into registered form once exercised may not be revoked. Any agreement setting out the
rights and obligation of the Register shall be subject to the reasonable approval of Lender.
Borrower may revoke the appointment of any particular person as Register, effective upon the
effectiveness of the appointment of a replacement Register, reasonably acceptable to Lender.
The Register shall not be entitled to any fee from Borrower or Lender or any other lender in
respect of transfers of the Note and other Loan Documents.
Section 11.28. Set-Off. In addition to any rights and remedies of Lender provided by
this Loan Agreement and by law, the Lender shall have the right, without prior notice to
Borrower, any such notice being expressly waived by Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by Borrower hereunder (whether at
the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against
such amount any and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or
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owing by Lender or any Affiliate thereof to or for the credit or the account of Borrower. Lender
agrees promptly to notify Borrower after any such set-off and application made by Lender;
provided that the failure to give such notice shall not affect the validity of such set-off and
application.
Section 11.29. State-Specific Provisions. IN ACCORDANCE WITH SECTION
26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, TIDS AGREEMENT
AND THE OTHER DOCUMENTS EVIDENCING, SECURING OR PERTAINING TO
ALL OR ANY PORTION OF THE LOAN, REPRESENT THE FINAL AGREEMENT
BETWEEN BORROWER AND LENDER AS TO THE SUBJECT MATTER THEREOF
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH
PARTIES.
[NO FURTHER TEXT ON THIS PAGE]
DMEAST #17478116 v7 98
![Page 109](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa109.jpg)
BORROWER:
WHITESTONE UPTOWN TOWER, LLC, a Delaware
limited liability company
By: Whitestone REIT Operating Partnership, L.P.,
a Delaware limited partnership
Its: Sole Member
By: Whitestone REIT,
a Maryland real estate investment trust
Its: General Partner /
By: Q:-:-~-z::_:s-::;
- £1 I I
Name: v-a ~ Y, b4-.t!.
Title: ot--t 111£_/! o,.?.t!'.(,4-rr.J (f.- o,;r:../t&£ ,((_
[Signature Page to Loan Agreement]
![Page 110](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa110.jpg)
DMEAST #17478116 v7
SCHEDULE I
RENT ROLL
SCH. I-1
![Page 111](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa111.jpg)
Rent Roll- Occupancy Summary
/\s of Date: 09/24/2013 Show Excluded Units; No Show All Amounts: tl!onthly
Property: UPTOWN TOWER- 525 - 525
Unit
1000, 115
0000
0000
0000
110
1100
1160
120
1210
1230
1250
lease Name
NEW lJFESTYLES, INC.
DISPUTE MEDIATION, I
WATERS, HARDY & CO.
Universal Protection
Xxxxx X. Xxxxx
Xxxxxxxxx/Xxxxx/Drak
Lease Type
Office net
Office net
Office net
Office net
Office net
Office net
XXXXXX XXXXXXX PROPE Office net
Victory Telecom Office net
ABDELHADI & ASSOCIAT Office net
Xxxxxxxxx Xxxxxxxx, Office net
CAPSTONE UNDERWRITER Office net
1255 Law Office of Xxxx A Office net
1260 Xxxxxxxxxx Xxxxxxxx, Office net
150 EXECUTIVE SNACK SHOP Office net
160 UBERTY MUTUALINSUR Office net
170 SOUTHWEST SEARCH, L Office net
210, 215, 260, .ElJGIBILITY SERVICES Office net
265, 285
225 XXXX X. XXXX XX. Office net
230 The Xxxxxxx Law Arm Office net
235 WHITESTONE REIT Office net
240
250
300
360
370
380
400
405
410
420
Whitestone Reit
XXXXX XXXX
XXXXX LAW, P.C.
Office net
Office net
Office net
DALLAS ANESTHESIOLOG Office net
LAW OFFICE OF XXXX J Office net
XXXX ENGINEERING, IN Office net
VEHICLE ACCEPTANCE C Office net
Maxim Healthcare Ser Office net
Madefey & Company Office net
Berlof & Xxxxxx, P.C Office net
Lease
From
05/05/1998
11/01/2008
08/22/2002
05/31/2011
09/29/2011
03/14/1994
Lease
To
12/31/2018
11/30/2019
11/30/2014
11/30/2018
02/28/2017
04/30/2016
06/01/2003 07/31/2015
04/01/2013 08/31/2016
07/01/2007 08/31/2017
08/01/2010 10/31/2013
04/06/2001 10/31/2016
12/31/2009 10/31/2015
06/01/2011 08/31/2014
10/30/1998 12/31/2016
12/01/2012 11/30/2017
12/06/2000 06/30/2018
06/06/2000 06/30/2018
04/08/2002 12/31/2014
12/12/2011 04/30/2014
12/01/2008 11/30/2013
06/01/2009
02/10/2003 07/31/2015
08/01/2009 06/30/2018
06/01/2008 12/31/20 18
08/01/2009
08/15/2006 05/30/2014
04/14/2004 07/31/2015
05/01/2009 05/31/2014
12/31/2010 12/31/2017
07/20/1999
Term
{Months)
248
133
148
91
66
266
146
41
122
39
187
71
39
219
60
000
000
000
29
60
150
107
127
94
136
61
85
Area
7,387
5,421
3,496
3,709
1,681
. 13,870
1,037
2,014
2,598
1,773
5,152
3,672
2,500
1,499
1,328
4,902
11,873
1,231
1,166
669
1,316
1,531
4,488
2,342
2,355
2,059
4,246
4,226
3,083
1,574
Base Rent
0.00
9,035.00
5,972.33
0.00
2,451.46
16,181.67
1,555.50
2,853.17
4,005.23
2,733.38
8,925.00
5,967.00
3,750.00
1,311.63
1,992.00
7,148.50
17,314.79
2,051.67
1,578.96
14.00
2,083.00
2,424.08
6,545.00
3,513.00
3,532.50
2,959.82
6,457.46
7,395.50
4,239.13
2,033.08
Rent
Per Area
0.00
1.67
1.71
0,00
1.46
1.17
1.50
1.42
1.54
1.54
1.73
1.63
1.50
.0.88
1.50
1.46
1.46
1.67
1.35
0.02
1.58
1.58
1.46
1.50
1.50
1.44
1.52
1.75
1.38
1.29
Recovery
Per Area
0.00
0.00
0.00
O.Xx
X.D3
0.04
0.00
0.00
0.06
0.00
0.00
0.00
0.03
0.04
0.00
0.00
o.oo
0.04
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.03
0.02
Mise
Per Area
0.00
0.00
0.00
0.00
0.00
o.oo
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Total
Per Area
0.00
1.67
1.71
0.01
1.49
1.20
1.50
1.42
1.60
1.54
1.73
1.63
1.53
0.91
1.50
1.46
1.46
1.70
1.35
0.02
1.58
1.58
1.46
1.50
1.50
1.44
1.52
1.75
1.40
1.31
Page 1
Deposit
12,935.25
10,164.38
4,370.00
2,769.25
2,661.58
0.00
1,425.88
2,056.58
4,784.85
2,733.38
5,8.02.42
6,120.00
3,750.00
1,100.00
0.00
o.oo
13,547.80
1,641.33
2,269.33
0.00
0.00
2,000.00
2,000.00
3,805.75
3,532.50
2,917.00
2,743.00
0.00
0.00
1,249.33
Tuesday - >tember 24, 2013
![Page 112](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa112.jpg)
l~s of Date: 09/24/2013 Show Excluded Units: No Show All Amounts: IVJonthly
430
450
515
518
520
530,550
580
600
610
630
650, 670
700
702
705
710
750
760
770
800
850
870,870A
900
910
920
945
950
ROOF3
ROOFS
1030
1150
1165
1170
1200
INTEGRATED SERVICES Office net
XXXXXXX & ASSOCIATES Office net
Naturopathic Health Office net
J HUNTER & ASSOCIATE Office net
UPTOWN PSYCHOTHERAPY Office net
MOSAIC FAMILY SERVIC Office net
YWCA OF METRO DALLAS Office net
Whitestone Executive Office net
THE XXXXXXXXX CENTER Office net
Quest XXX, Inc Office net
SCOmE X. XXXXX Office net
Royal Palms Travel, Office net
Universal Managers I Office net
The Guarantee Compan Office net
SILVER SCREEN TELE-R Office net
ALZHEIMER$ DISEASE A Office net
Colliers Internation Office net
Home Savings of Amer Office net
XXXXXXX LICENSING, I Office net
XXXXXXX CORPORATION Office net
Xxx X. Xxxxxx XX, At Office net
TECON CORPORATION Office net
The XxXxxx Law Firm Office net
ICA INC. Office net
Xxxxxxxx, Xxxx & Ass Office net
Bluebonnet Hospice C Office net
METRO PCS TEXAS, LLC Office net
COGENT COMMUNICATION Office net
VACANT N/A
XXXXXX
XXXXXX
XXXXXX
XXXXXX
N/A
N/A
N/A
N/A
Rent Roil - 0(, "HlCY Summary
06/01/2003
01/14/2008
09/20/2000
07/01/2012
11/29/2001
04/02/2002
12/30/2004
07/01/2009
09/15/2007
01/01/2012
10/09/2001
10/01/2011
08/26/2011
12/01/2012
04/01/2007
09/01/2005
10/04/2010
03/08/2011
07/01/2008
12/10/2001
12/01/2010
07/11/2003
03/15/2013
09/01{2008
11/15/2012
09(27/2010
11/01]2007
06/30/2017
06/13/2015
09/30/2016
09/30/2015
02/28/2017
08/31/2016
10/31/2013
08/31/2014
02/28/2015
04/30/2015
12/31/2013
01{31/2016
08/31/2014
05/31/2015
03/03/2016
05/07/2014
09/30/2015
09/14/2014
04/30/2016
08/31/2016
08/31/2018
12/31/2013
04/15/2018
12/26/2014
10/31/2017
01/01/1900 12/31/2017
169
90
193
39
000
000
000
84
38
163
27
38
89
117
66
39
87
154
65
158
66
64
66
52
120
1416
2,901
6,032
1,814
622
765
8,849
7,451
12,850
2,972
916
2,311
2,078
1,218
1,063
4,733
7,074
3,371
2,375
2,607
13,751
2,926
5,817
1,854
4,075
1,499
3,265
3,230
1,525
5,467
2,727
4,291.06
10,304.67
2,532.05
933.00
1,179.38
12,904.80
11,486.96
16,062.50
4,891.42
1,335.84
3,947.96
3,117.00
1,700.17
1,550.21
7,243.41
12,379.50
5,337.42
3,513.02
4,127.75
21,772.42
3,077.25
8,967.88
2,781.00
6,621.88
2,248.50
4,965.53
2,086.70
500.00
0.00
0.00
0.00
0.00
0.00
1.48
1.71
1.40
1.50
1.54
1.46
1.54
1.25
1.65
1.46
1.71
1.50
1.40
1.46
1.53
1.75
1.58
1.48
1.58
1.58
1.05
1.54
1.50
1.63
1.50
1.52
0.00
0.00
0.00
0.00
0.06
0.00
0.04
0.06
0.06
0.00
0.00
0.00
0.00
0.14
0.00
0.04
0.03
0.04
0.00
0.00
0.00
0.04
o.oo
0.00
0.02
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.24
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.02
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.54
1.95
1.43
1.56
1.60
1.46
1.54
1.25
1.65
1.60
1.73
1.54
1.42
1.49
1.53
1.75
1.58
1.52
1.58
1.58
1.07
1.55
1.50
1.63
1.50
1.52
0.00
0.00
0.00
0,00
Page 2
3,848.92
10,556.00
2,012.50
933.00
1,147.50
7,366.06
0.00
0,00
3,271.42
1,374.00
3,225.77
2,056.58
1,700.17
0.00
4,098.25
9,137.25
5,618.34
3,513.03
5,082.50
22,918.00
2,240.42
0.00
3,012.75
6,621.88
0.00
5,101.57
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Tuesday ~ ·tember 24, 2013
![Page 113](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa113.jpg)
As of Date: 09/24/2013 Show Excluded Units: 1\lo Show All Amounts: fVIonthly
Page 3
1210A VACANT N/A 518 0.00 0.00 0.00 0.00 0.00 0.00
1270 VACANT N/A 2,973 0.00 0.00 0.00 0.00 0.00 0.00
165 VACANT N/A - 373 0.00 0.00 0.00 0.00 0.00 0.00
000 XXXXXX X/X - 1,228 0.00 0.00 o.oo 0.00 0.00 0.00
255 VACANT N/A 2,265 0.00 0.00 0.00 0.00 0.00 0.00
303 VACANT N/A 0.00 0.00
305 VACANT N/A 1,188 0.00 0.00 0.00 0.00 0.00 0.00
310 VACANT N/A 1,975 0.00 0.00 0.00 0.00 0.00 0.00
320 VACANT N/A 1,848 0.00 0.00 0.00 0.00 0.00 o.oo
330 VACANT N/A 1,336 0.00 0.00 0.00 0.00 0.00 0.00
340 VACANT N/A 1,334 0.00 0.00 0.00 0,00 0.00 0.00
350 VACANT N/A 2,532 0.00 0.00 o.oo 0.00 0.00 0.00
555 VACANT N/A 2,576 0.00 0.00 0.00 0.00 0.00 0.00
640 VACANT N/A 2,250 0.00 0.00 0.00 0.00 0.00 0.00
640A VACANT N/A 696 0.00 0.00 0.00 0.00 0.00 0.00
860 VACANT N/A 2,544 0.00 0.00 0.00 0.00 0.00 0.00
905 VACANT N/A 2,543 0.00 0.00 0.00 0.00 0.00 0.00
930 VACANT N/A 2,421 0.00 0.00 0,00 0.00 0.00 0.00
A VACANT N/A 73 0.00 0.00 0.00 0.00 0.00 0.00
PLUG VACANT N/A - 552 0.00 0.00 0.00 0.00 0.00 0.00
Summary
Total Total Total Total
Rent Recovery Mist Charges Total
Total Units Pertentage Total Area Percentage Total Base Rent Per Area Per Area Per Area Per Area Deposit
Occupied 66 72.53% 209,387 ·82.58% 297,883.14 1.42 0.01 0.01 1.44 201,215.52
Vacant 25 27.47% 44,174 17.42% 0.00 0.00 0.00 0.00 0.00 0.00
Totals 91 253,561 297,883.14 1.17 0.01 0.01 1.19 201,215.52
Rent Roll - Or· ''lncy Summary Tuesday ~ 'tember 24, 2013
![Page 114](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa114.jpg)
Required Repair
Replace building
perimeter sealant
DMEAST #17478116 v7
SCHEDULE II
REQUIRED REPAIRS
Deadline Deposit Amount
November 26,2013 N/A
SCH. II-1
![Page 115](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa115.jpg)
DMEAST #17478116 v7
SCHEDULE III
ORGANIZATIONAL CHART
SCH. III-1
![Page 116](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa116.jpg)
Whitestone REIT, a Maryland
real estate investment trust Limited Partners
~LP
12292124.1
Whitestone REIT Operating
Partnership, L.P., a Delaware
limited partnership
100%
Whitestone Uptown Tower,
LLC, a Delaware limited liability
company
![Page 117](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa117.jpg)
DMEAST #17478116 v7
SCHEDULE IV
[Intentionally omitted]
SCH. N-1
![Page 118](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa118.jpg)
DMEAST #17478116 v7
SCHEDULEV
[Intentionally Omitted]
SCH. V-1
![Page 119](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa119.jpg)
DMEAST #17478116 v7
SCHEDULE VI
[Intentionally Omitted]
SCH. VI-1
![Page 120](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa120.jpg)
OM EAST #17 478116 v7
SCHEDULE VII
INTENTIONALLY OMITTED
SCH. VIII-1
![Page 121](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa121.jpg)
![Page 122](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa122.jpg)
![Page 123](https://www.sec.gov/Archives/edgar/data/928953/000092895316000005/exhibit108uptowntowerloa123.jpg)
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