8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 8-K

Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported) November 18, 2004

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS

(Exact Name of Registrant as Specified in Its Charter)

Ohio

(State or Other Jurisdiction of Incorporation)

001-06249	34-6513657
(Commission File Number)	(I.R.S. Employer Identification No.)

7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts	02114
(Address of Principal Executive Offices)	(Zip Code)

(617) 570-4600

(Registrant’s Telephone Number, Including Area Code)

n/a

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFT|R 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.01. Completion of Acquisition or Disposition of Assets.

On November 18, 2004, FT-Fin Acquisition LLC (“FT-Fin”), a Delaware limited liability company wholly-owned by First Union Real Estate Equity and Mortgage Investment (the “Trust”), acquired from Finova Capital Corporation, an unaffiliated third party, 16 triple-net leased properties containing approximately 2.5 million gross square feet.  The aggregate purchase price for the properties was approximately $91.6 million, inclusive of the assumption of approximately $31.6 million of existing first mortgage debt on certain of the properties.

The $61.1 million equity required for this acquisition was provided in part from the proceeds of a $27 million loan from Key Bank (see below) as well as $33.6 million in net proceeds realized from the sale of the Park Plaza property in June 2004 which were being held by a qualified intermediary to enable First Union to acquire the properties in a 1031 exchange.

The following table sets forth the location, the tenant, the type and square footage of each property and whether the land underlying such properties is owned by the Trust in fee, pursuant to a ground lease or held in a land estate.

Property Location	Tenant	Type	Square Feet	Ownership of Land (Fee/Land Estate/Ground Lease)
Plantation, FL	BellSouth Communications, Inc.	Office	133,000	Land Estate
Athens, GA	The Kroger Co.	Retail	52,000	Land Estate
Atlanta, GA	The Kroger Co.	Retail	61,000	Ground Lease
Louisville, KY	The Kroger Co.	Retail	47,000	Land Estate
Lafayette, LA	The Kroger Co.	Retail	46,000	Ground Lease
St Louis, MO	The Kroger Co.	Retail	46,000	Land Estate
Biloxi, MS	The Kroger Co.	Retail	51,000	Land Estate
Greensboro, NC	The Kroger Co.	Retail	47,000	Ground Lease
Knoxville, TN	The Kroger Co.	Retail	43,000	Land Estate
Memphis, TN	The Kroger Co.	Retail	47,000	Land Estate
Denton, TX	The Kroger Co.	Retail	48,000	Land Estate
Seabrook, TX	The Kroger Co.	Retail	53,000	Land Estate
Sherman, TX (1)	The Kroger Co.	Retail	46,000	Land Estate
Orlando, FL	Siemens Real Estate, Inc.	Office	256,000	Ground Lease
Churchill, PA	Viacom, Inc.	Office R&D	1,008,000	Ground Lease
Jacksonville, FL	Winn-Dixie Stores, Inc.	Warehouse	549,000	Fee

(1) The tenant for the Sherman, Texas property has exercised a purchase option effective May 1, 2005 pursuant to their lease for a sale price of $2,017,657

The following table sets forth the terms and rental rates for each property:

Property Location	Initial Term	Initial Term Rent		Renewal Terms
Plantation, FL	3/29/2010	$	3,158,220	Five 5-year
Athens, GA	10/31/2010	$	220,327	Six 5-year
Atlanta, GA	10/31/2010	$	259,308	One 6-yr/ Two 5-year
Louisville, KY	10/31/2010	$	197,447	Six 5-year
Lafayette, LA	10/31/2010	$	178,804	One 7-year /Six 5-year
St Louis, MO	10/31/2010	$	233,038	Six 5-year
Biloxi, MS	10/31/2010	$	219,480	Six 5-year
Greensboro, NC	10/31/2010	$	202,532	One 7-year /Five 5-year
Knoxville, TN	10/31/2010	$	214,395	Six 5-year
Memphis, TN	10/31/2010	$	220,327	Six 5-year
Denton, TX	10/31/2010	$	220,327	Six 5-year
Seabrook, TX	10/31/2010	$	211,854	Six 5-year
Sherman, TX	10/31/2010	$	203,379	Six 5-year
Orlando, FL	12/31/2010	$	4,083,974	Six 5-year
Churchill, PA	12/31/2010	$	2,786,151	Six 5-year
Jacksonville, FL	07/01/2011	$	1,463,688	One 10-year/ Four 5-year

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The following table sets forth the terms of the land estates:

Property Location	Land Estate Expiration	Lease Term Options Upon Expiration of Land Estate	Lease Term Rents Per Annum
Plantation, FL	02/28/2010	Thirteen 5-yr	$261,919 thru 6th term and then fair market value
Athens, GA	10/31/2010	Fourteen 5-yr	$	18,600
Louisville, KY	10/31/2010	Fourteen 5-yr	$	35,400
St Louis, MO	10/31/2010	Fourteen 5-yr	$	61,400
Biloxi, MS	10/31/2010	Fourteen 5-yr	$	54,000
Knoxville, TN	10/31/2010	Fourteen 5-yr	$	97,200
Memphis, TN	10/31/2010	Fourteen 5-yr	$	60,360
Denton, TX	10/31/2010	Fourteen 5-yr	$	86,880
Seabrook, TX	10/31/2010	Fourteen 5-yr	$	58,560
Sherman, TX	10/31/2010	Fourteen 5-yr	$	80,160

The following table sets forth the terms of the ground leases:

Property Location	Current Term Expiration	Renewal Terms	Lease Term Rents Per Annum (1)
Atlanta, GA	09/30/2006	Four 5-yr	$30,000 plus ½ of 1% of sales greater than $27,805,800
Lafayette, LA	4/30/2008	Eight 5-yr	$176,244 increased by 5% for each successive renewal term
Greensboro, NC	12/31/2007	Four 5-yr & Fifteen 1-yr	$59,315 increased by approx. $12,000 for each successive renewal period plus 1% of sales over $35 M
Orlando, FL	12/31/2010	Six 5-yr	$2 thru the current term and fair market value thereafter
Churchill, PA	12/31/2010	Six 5-yr	$2 thru the current term and fair market value thereafter

(1)The improvements lease requires the tenant to perform all covenants under the ground lease including the payment of ground rent.

The Orlando, Florida and Churchill, Pennsylvania properties are not encumbered by a first mortgage.  The following table sets for the terms of the first mortgages for each property:

Property Location	Principal Balance at 11/1/04		Maturity	Interest Rate	2005 Debt Service		Prepayment Terms
Plantation, FL	$	12,624,403	3/29/2010	6.45%	$	2,762,944	Make Whole Premium
Kroger Properties(1)	$	12,136,773	11/1/2010	6.71%	$	2,473,927	Make Whole Premium
Jacksonville, FL	$	6,875,811	7/1/2011	9.95%-11.05%	$	1,463,688	No Voluntary Prepayment

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(1)Each of the properties leased to Kroger are encumbered by one loan that is secured by all of the Kroger properties.

Attached hereto as Exhibit 99.1 is a Press Release dated November 18, 2004 announcing this acquisition.

ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On November 18, 2004, FT-Fin obtained a loan from Keybank National Association and Newstar CP Funding LLC and other lenders party thereto in the original principal amount of $27,000,000.  In addition, upon the satisfaction of certain conditions, FT-Fin can draw an additional $26,000,000 on the loan.  The loan bears interest at LIBOR plus 450 basis points, has a three-year term, subject to two one year extensions which may be exercised upon payment of .25% fee.  As a result of FT-Fin entering into an interest rate swap agreement, FT-Fin effectively fixed the interest at 8.55% per annum.  The loan is secured by a first mortgage on the Orlando, Florida and Churchill, Pennsylvania properties and a pledge on the Trust’s ownership interest in FT-Fin.

The loan requires monthly payments of interest only and amortization payments for each semiannual period ending on June 30 and December 31 during the term based on a 50% of the excess cash flow (as defined) after first mortgage debt and interest on this loan.

The loan is prepayable at any time without premium or penalty.

In connection with the loan, the Trust was required to provide standard hazardous substance and non-recourse carve-out guarantees to the lenders.

ITEM 9.01 Financial Statements and Exhibits.

(b)	Pro Forma Financial Information.
	The financial information required will be filed prior to the 71st day after the date hereof
(c)	Exhibits
10.1	Loan Agreement, dated November 18, 2004, among FT-Fin Acquisition LLC, Keybank National Association, Newstar CP Funding LLC, Keybank National Association, as agent for itself and such other lending institutions, and Keybanc Capital Markets, as the Arranger
10.2	Form of Mortgage, dated November 18, 2004, in favor of Keybank National Association.
10.3	Ownership Interest Pledge Agreement, dated November 18, 2004, from FT-Fin Acquisition LLC to Keybank National Association.
10.4	Guaranty, dated as of November 18, 2004, by First Union Real Estate Equity and Mortgage Investments in favor of Keybank National Association, as the agent.
10.5	Indemnity Regarding Hazardous Materials, dated as of November 18, 2004, by First Union Real Estate Equity and Mortgage Investments in favor of Keybank National Association, as the agent.
99.1	Press Release dated November 18, 2004

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 22nd day of November, 2004.

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
By:	/s/ Carolyn Tiffany
	Carolyn Tiffany
	Chief Operating Officer

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EX-10.1

Exhibit 10.1

LOAN AGREEMENT

This agreement (“Loan Agreement” or “Agreement”) is made and entered into as of the 18^th day of November, 2004, by and between FT-FIN ACQUISITION LLC, a Delaware limited liability company having an address c/o First Union Real Estate Equity and Mortgage Investments, 7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114 (the “Borrower”), KEYBANK NATIONAL ASSOCIATION, a national banking association, having an address at 127 Public Square, Cleveland, Ohio 44114, NEWSTAR CP FUNDING LLC, a Delaware limited liability company, having an address c/o Newstar Financial, Inc., 101 Federal Street, Suite 1900, Boston, MA 02110, and the other lending institutions which are, or may become, parties to this Agreement pursuant to Section 13.22 (singly and collectively, the “Lenders”), KEYBANK NATIONAL ASSOCIATION, a national banking association, with a place of business at 127 Public Square, Cleveland, Ohio 44114, as agent for itself and such other lending institutions (the “Agent”), and KEYBANC CAPITAL MARKETS, as the Arranger.

WITNESSETH:

ARTICLE 1

BACKGROUND.

1.1Defined Terms.  Capitalized terms used in this Agreement are defined either in Exhibit A, or in specific sections of this Agreement, or in another Loan Document, as referenced in Exhibit A.

1.2Borrower.  The Borrower is a limited liability company organized under the laws of the State of Delaware of which the sole member is Park Plaza Mall, LLC (“Park Plaza”), a Delaware limited liability company, of which the sole member is First Union.

1.3Use of Loan Proceeds.  The Borrower has applied to Lenders for a loan of up to FIFTY-THREE MILLION DOLLARS ($53,000,000.00) (the “Loan”), the proceeds of which are to be used to assist the Borrower with its acquisition of certain assets from Finova Capital Corporation and certain related entities consisting of a portfolio of sixteen (16) owned or leased properties with an aggregate of 2,500,000 square feet (the “Acquisition”), to pay certain closing and transactional costs as approved by the Agent, to provide funding for a working capital of the Borrower and its Subsidiaries, all in accordance with the schedule of sources and uses annexed hereto as Exhibit B.

1.4Guaranties.  As an inducement to Lenders to make the Loan, First Union (on a limited basis), FT-FIN GP LLC and FT-Orlando Property LLC, each a Delaware limited liability company, and FT-Churchill Property L.P., a Delaware limited partnership (in such capacity, severally and collectively called “Guarantor”) have agreed to furnish certain guaranties and indemnities to the Agent with respect to the Loan.

1.5Loan.  Subject to all of the terms, conditions and provisions of this Agreement, and of the agreements and instruments referred to herein, each of the Lenders agrees severally to make a loan to the Borrower equal to such Lender’s Commitment (the “Loan”), and the Borrower agrees to accept and repay the Loan.

ARTICLE 2

LOAN PROVISIONS.

2.1Amount of Loan.

2.1.1In no event shall the aggregate amount of the Loan and Total Commitment exceed $53,000,000.00.

2.1.2Advances under the Loan shall be disbursed as follows:

(a)The initial Loan Advance from the Lenders to the Borrower (the “Initial Advance”) shall be in an amount equal to $27,000,000.00.

(b)The remaining amount of the Loan (up to $26,000,000.00) (the “Subsequent Advance”) from the Lenders to the Borrower may be made in the form of a single subsequent Loan Advance as requested by Borrower at Borrower’s sole option prior to December 31, 2004, subject to satisfaction of the conditions set forth in Section 5.20.

2.1.3Any and all advances of proceeds of the Loan shall be made by the Lenders pro rata in accordance with each Lender’s Percentage.

2.2Term of Loan; Extension Rights.  The Loan shall be for a term (“Initial Term”) commencing on the date hereof and ending on November 18, 2007 (“Maturity Date”).  The Initial Term of each Loan may be extended for one (1) year (“First Extended Term”) until November 18, 2008 (“First Extended Maturity Date”) and thereafter may be further extended for an additional one (1) year (“Second Extended Term”) until November 18, 2009 (“Second Extended Maturity Date”), in each instance upon satisfaction of the conditions set forth in Section 2.8  (hereinafter, the First Extended Term and the Second Extended Term may be referred to herein sometimes as the “Extended Term” as may be applicable) (hereinafter, the First Extended Maturity Date and the Second Extended Maturity Date may be referred to herein sometimes as the “Extended Maturity Date” as may be applicable).

2.3Interest Rate and Payment Terms.  The Loan shall be payable as to interest and principal in accordance with the provisions of this Agreement and the Note.  This Agreement also provides for interest at a Default Rate, Late Charges and prepayment rights and fees.  All payments for the account of Lenders made by the Borrower shall be applied to the respective accounts of the Lenders in accordance with each Lender’s Percentage of the Loan.  The Agent will disburse such payments to the Lenders on the date of receipt thereof if received prior to 10:00 a.m. on such date and, if not, on the next Business Day.  Any and all interest rate selection and conversion provisions in this Agreement are to be administered by the Agent and to be allocated on a pro rata basis to the portion of the balance due under the Notes held by each Lender based upon such Lender’s Percentage.

2.4Interest Rate.

2.4.1The Loan will bear interest at the Applicable Rate, unless the Default Rate is applicable.  The Adjusted Prime Rate shall be the “Applicable Rate”, except that the

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Adjusted LIBOR Rate shall be the “Applicable Rate” with respect to portions of the Loan as to which a LIBOR Rate Option is then in effect.  For each disbursement of proceeds of the Loan, Borrower shall deliver to Agent irrevocable notice (which may be verbal notice provided that Borrower delivers to Agent facsimile confirmation or electronic mail confirmation within twenty four (24) hours of such verbal notice) of the requested amount of such disbursement (x) if such disbursement is to bear interest at the Adjusted Prime Rate, not later than 11:00 a.m. Eastern Time on the second Business Day prior to the desired date of disbursement and (y) if such disbursement is to bear interest at an Adjusted LIBOR Rate, not later than 11:00 a.m. Eastern Time on the third Business Day prior to the desired date of disbursement.  Commencing January 1, 2005, Borrower shall pay interest in arrears on the first day of every calendar month in the amount of all interest accrued and unpaid on the Loan.  All payments (whether of principal or of interest) shall be deemed credited to Borrower’s account only if received by 12:00 noon Eastern Time on a Business Day; otherwise, such payment shall be deemed received on the next Business Day.

2.4.2Provided that no Event of Default exists, Borrower shall have the option (the “LIBOR Rate Option”) to elect from time to time in the manner and subject to the conditions hereinafter set forth an Adjusted LIBOR Rate as the Applicable Rate for all or any portion of the Loan which would otherwise bear interest at the Adjusted Prime Rate.

2.4.3The only manner in which Borrower may exercise the LIBOR Rate Option is by giving Agent irrevocable notice (which may be verbal notice provided that Borrower delivers to Agent facsimile confirmation in the form of Exhibit H attached hereto within twenty-four (24) hours) of such exercise not later than 11:00 a.m. Eastern Time on the second LIBOR Business Day prior to the proposed commencement of the relevant LIBOR Rate Interest Period, which written notice shall specify:  (i) the portion of the Loan with respect to which Borrower is electing the LIBOR Rate Option, (ii) the LIBOR Business Day upon which the applicable LIBOR Rate Interest Period is to commence and (iii) the duration of the applicable LIBOR Rate Interest Period.  The Applicable Rate for any portion of the Loan with respect to which Borrower has elected the LIBOR Rate Option shall revert to the Adjusted LIBOR Rate with a LIBOR Rate Interest Period of one-month (the “One-Month LIBOR Rate”), as of the last day of the LIBOR Rate Interest Period applicable thereto (unless Borrower again exercises the LIBOR Rate Option for such portion of the Loan).  Agent shall be under no duty to notify Borrower that the Applicable Rate on any portion of the Loan is about to revert from an Adjusted LIBOR Rate to the One-Month LIBOR Rate.  The LIBOR Rate Option may be exercised by Borrower only with respect to any portion of the Loan equal to or in excess of $500,000.00. At no time may there be more than four (4) LIBOR Rate Interest Periods in effect with respect to the Loan.

2.4.4If Agent determines (which determination shall be conclusive and binding upon Borrower, absent manifest error) (i) that Dollar deposits in an amount approximately equal to the portion of the Loan for which Borrower has exercised the LIBOR Rate Option for the designated LIBOR Rate Interest Period are not generally available at such time in the London interbank market for deposits in Dollars, (ii) that the rate at which such deposits are being offered will not adequately and fairly reflect the cost to any Lender of maintaining a LIBOR Rate on such portion of the Loan or of

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funding the same for such LIBOR Rate Interest Period due to circumstances affecting the London interbank market generally, (iii) that reasonable means do not exist for ascertaining a LIBOR Rate, or (iv) that an Adjusted LIBOR Rate would be in excess of the maximum interest rate which Borrower may by law pay, then, in any such event, to the extent that such Lender makes such determination generally with respect to its borrowers who borrow funds at a rate based upon the LIBOR Rate, Agent shall so notify Borrower and all portions of the Loan bearing interest at an Adjusted LIBOR Rate that are so affected shall, as of the date of such notification with respect to an event described in clause (ii) or (iv) above, or as of the expiration of the applicable LIBOR Rate Interest Period with respect to an event described in clause (i) or (iii) above, bear interest at the Adjusted Prime Rate until such time as the situations described above are no longer in effect or can be avoided by Borrower exercising a LIBOR Rate Option for a different LIBOR Rate Interest Period.

2.4.5Interest at the Applicable Rate (or Default Rate) shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

2.4.6Borrower shall pay all Breakage Costs incurred from time to time by Lender upon demand within fifteen (15) Business Days of receipt of written notice from Agent.

2.4.7If the introduction of or any change in any law, regulation or treaty, or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof, shall make it unlawful for any Lender to maintain the Applicable Rate at an Adjusted LIBOR Rate with respect to the Loan or any portion thereof, or to fund the Loan or any portion thereof in Dollars in the London interbank market, or to give effect to its obligations regarding the LIBOR Rate Option as contemplated by the Loan Documents, then, to the extent that such Lender makes such determination generally with respect to its borrowers who borrow funds at a rate based upon the LIBOR Rate, (1) Agent shall notify Borrower that such Lender is no longer able to maintain the Applicable Rate at an Adjusted LIBOR Rate, (2) the LIBOR Rate Option shall immediately terminate, (3) the Applicable Rate for any portion of the Loan for which the Applicable Rate is then an Adjusted LIBOR Rate shall automatically be converted to the Adjusted Prime Rate, and (4) Borrower shall pay to Agent the amount of Breakage Costs (if any) incurred by such Lender in connection with such conversion.  Thereafter, Borrower shall not be entitled to exercise the LIBOR Rate Option until such time as the situation described herein is no longer in effect or can be avoided by Borrower exercising a LIBOR Rate Option for a different LIBOR Rate Interest Period.  So long as no Event of Default has occurred and is continuing, upon written demand of Borrower, the Borrower may with thirty (30) days written notice to the Agent, require any such Lender unable to maintain the Applicable Rate at an Adjusted LIBOR Rate pursuant to this Section 2.4.7 to sell and assign its entire interest in the Loan pursuant to Section 13.22 hereof to any Eligible Assignee identified by the Borrower in its demand and reasonably approved by the Agent, upon payment by such Eligible Assignee of the entire par amount of such Lender’s interest in the Loan, plus any applicable Breakage Costs.

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2.5Principal.

2.5.1Scheduled Payments.

(a)Commencing January 15, 2005, and continuing semiannually on the fifteenth day of each July and January thereafter, the Borrower, in addition to any other principal payments or prepayments required hereunder, Borrower shall make the following payments:

(i)The July 15 payment shall be equal to 50% of the sum of :

(A)(1) the amount of the Borrower’s Net Cash Flow for the two fiscal quarters just ending, less (2) the aggregate amount of interest on the Loan paid by the Borrower during the last two fiscal quarters just ending plus the aggregate amount of interest on the Loan projected to be paid by the Borrower through November of the same year as determined solely by the Agent in a manner consistent with the procedures and methods utilized by the Agent in analyzing the financial information provided by the Borrower prior to closing.

(ii)The January 15 payment shall be equal to 50% of (i) the Net Cash Flow for the two fiscal quarters just ending, (ii) less any interest payments made in December under the Loan.  In no event shall the payments due pursuant to this Section 2.5.1 (a) for any calendar year be less than an amount equal to 50% of (a) Net Cash Flow (b) less the interest paid under the Loan for such year.  The Officer’s Certificate provided by the Borrower to Lender pursuant to Section 7.2.1(q) shall detail the calculation of each such scheduled principal payment hereunder.  To the extent the Maturity Date is extended to any Extended Maturity Date, the required quarterly principal payment set forth above shall continue to be due on the dates set forth above.  The entire principal balance of the Loan shall be due and payable in full on the Maturity Date (or as may be applicable, any Extended Maturity Date).

(b)Mandatory Principal Repayments.  In addition to the scheduled payments of principal, as provided above, the Borrower shall make the following mandatory prepayments of principal (singly and collectively, the “Mandatory Principal Prepayments”) each of which shall be due and payable on the later of (x) within five (5) Business Days of the event giving rise to such Mandatory Principal Prepayment obligation (the “Mandatory Prepayment Event”) or (y) within three (3) Business Days of written demand therefor by the Agent; provided, however, at the request of the Borrower, the Agent agrees to hold the amount of any such Mandatory Principal Prepayment in the Mandatory Principal Payment Account (as defined in the Cash Management Agreement, pledged to the Agent, on behalf of the Lenders, to secure the repayment of the Obligations), until the earlier of (x)  the expiration of any relevant Interest Period so that the prepayment can be made without the Borrower incurring any costs under Section 2.5.7 or (y) ninety (90) days:

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(i)An amount equal to the greater of (a) one hundred (100%) percent of the Net Sales Proceeds, as determined in the reasonable judgment of the Agent, (x) received by any Borrower Subsidiary from the sale, transfer, or other disposition of any Individual Property or any portion thereof or (y) received by the Borrower from the sale, transfer, dissolution, or other disposition of the ownership interest in any Borrower Subsidiary, or (b) the Allocated Loan Amount for such Individual Property;

(ii)An amount equal to the greater of (a) one hundred (100%) percent of the Net Sales Proceeds, as determined in the reasonable judgment of the Agent, (x) distributed to any ownership interest held by the Borrower or FT-FIN GP from the sale, transfer, or other disposition of any Individual Property or any portion thereof by a Property Owner (based upon the aggregate percentage ownership interest therein) or (y) received by the Borrower, FT-FIN GP, or any other Loan Party from the sale, transfer, dissolution, or other disposition of the ownership interest in any Property Owner, or (b) the Allocated Loan Amount for such Individual Property;

(iii)One hundred (100%) percent of the Net Refinancing Proceeds, as determined in the reasonable judgment of the Agent, (x) received by any Borrower Subsidiary from any financing or refinancing of any Individual Property or any portion thereof or (y) received by the Borrower or FT-FIN GP from the financing or refinancing of any Individual Property by a Property Owner (based upon the aggregate percentage ownership interest therein);

(iv)An amount equal to the greater of (a) one hundred (100%) percent of the Net Sales Proceeds, as determined in the reasonable judgment of the Agent, (x) received by any Borrower Subsidiary from an Economic Discontinuance Sale of any Individual Property or any portion thereof or (y) received by the Borrower or FT-FIN GP from an Economic Discontinuance Sale of any Individual Property or any portion thereof, or (b) the Allocated Loan Amount for such Individual Property;

(v)An amount equal to the greater of (a) one hundred (100%) percent of the Net Proceeds, as determined in the reasonable judgment of the Agent, received by any Borrower Subsidiary or distributed to any ownership interest held by the Borrower or FT-FIN GP from any casualty or taking regarding any Individual Property or any portion thereof owned by a Property Owner which proceeds are not to be utilized within a reasonable period of time following such event for the repair or reconstruction thereof (based upon the aggregate percentage ownership interest therein), or (b) the Allocated Loan Amount for such Individual Property;

(vi)An amount equal to the greater of (a) one hundred (100%) percent of the Net Sales Proceeds, as determined in the reasonable

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judgment of the Agent, received by any Borrower Subsidiary or distributed to any limited partnership, membership or other ownership interest held by the Borrower or FT-FIN GP from the sale, transfer, or other disposition of any asset (other than a sale of any Individual Property) of any Borrower Subsidiary (based upon the aggregate percentage ownership interest therein), or (b) the Allocated Loan Amount for such Individual Property.

Any Mandatory Principal Prepayment shall be applied to then outstanding principal balance due under the Loan.

(c)Prepayment.  Notwithstanding anything to the contrary contained in this Agreement or any of the other Loan Documents to the contrary, the Loan or any portion thereof may be prepaid in whole or in part by the Borrower on any Business Day during the term of the Loan, upon five (5) days’ prior written notice to the Agent.  Any prepayment made pursuant to the foregoing shall be accompanied by the payment of interest accrued through the date of prepayment and the payment of any applicable Breakage Costs.

2.5.2Maturity.  At maturity all accrued interest, principal and other charges due with respect to the Loan shall be due and payable in full and the principal balance and such other charges, but not unpaid interest, shall bear interest at the Default Rate until so paid.

2.5.3Method of Payment; Date of Credit.  All payments of interest, principal and fees shall be made in lawful money of the United States in immediately available funds, without counterclaim or set off and free and clear, and without any deduction or withholding for, any taxes (other than income taxes or franchise taxes of any Lender) or other payments (a) by direct charge to an account of Borrower maintained with Agent (or then holder of the Loan), or (b) by wire transfer to Agent or to such other bank or address as the holder of the Loan may designate in a written notice to Borrower.  Payments shall be credited on the Business Day on which immediately available funds are received prior to 12:00 noon Cleveland Time; payments received after 12:00 noon Eastern Time shall be credited to the Loan on the next Business Day; payments which are by check, which Agent may at its option accept or reject, or which are not in the form of immediately available funds shall not be credited to the Loan until such funds become immediately available to Agent, and, with respect to payments by check, such credit shall be provisional until the item is finally paid by the payer bank.

2.5.4Billings.  Agent may submit monthly billings reflecting payments due from the Borrower; however, any changes in the interest rate which occur between the date of billing and the due date may be reflected in the billing for a subsequent month.  Neither the failure of Agent to submit a billing nor any error in any such billing shall excuse the Borrower from the obligation to make full payment of the Borrower’s payment obligations when due.

2.5.5Default Rate.  Agent shall have the option of imposing (and shall upon demand of the Required Lenders impose), and Borrower shall pay upon billing therefor, an interest rate which is four percent (4%) per annum above the interest rate otherwise

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payable (“Default Rate”):  (a) following any Event of Default, unless and until the Event of Default is cured with the consent of Required Lenders or waived by Required Lenders; and (b) after Maturity.  Borrower’s right to select LIBOR pricing options shall be suspended upon the occurrence and during the continuance of a monetary Default or following any Event of Default or at Maturity.

2.5.6Late Charges.  The Borrower shall pay, upon billing therefor, a “Late Charge” equal to five percent (5%) of the amount of any regularly scheduled payment of principal (other than principal due at Maturity or any Mandatory Principal Prepayment), interest, or both, which is not paid within ten (10) days of the due date thereof (other than with respect to any payment as to which the said ten (10) day period expires after the implementation of the Default Rate).  Late charges are: (a) except as provided above, payable in addition to, and not in limitation of, the Default Rate, (b) intended to compensate Agent for administrative and processing costs incident to late payments, (c) are not interest, and (d) shall not be subject to refund or rebate or credited against any other amount due.

2.5.7Prepayment Costs.  The Borrower shall pay to Agent, immediately upon request and notwithstanding contrary provisions contained in any of the Loan Documents, such amounts as shall, in the conclusive judgment of Agent (in the absence of manifest error), compensate Agent and the Lenders for the loss, cost or expense which they may reasonably incur as a result of (i) any payment or prepayment, under any circumstances whatsoever, whether voluntary or involuntary, of all or any portion of an Adjusted LIBOR Rate Advance on a date other than the last day of the applicable Interest Period of an Adjusted LIBOR Rate Advance, (ii) the conversion, for any reason whatsoever, whether voluntary or involuntary, of any Adjusted LIBOR Rate Advance to a Adjusted Prime Rate Advance on a date other than the last day of the applicable Interest Period, (iii) the failure of all or a portion of a Loan which was to have borne interest at the Adjusted LIBOR Rate pursuant to the request of Borrower to be made under the Loan Agreement (except as a result of a failure by any Lender to fulfill such Lender’s obligations to fund), or (iv) the failure of the Borrower to borrow in accordance with any request submitted by it for an Adjusted LIBOR Rate Advance.  Such amounts payable by the subject Borrower shall be equal to (a) any administrative costs actually incurred plus (b) the Breakage Costs.

2.6Fees.

2.6.1Loan Fees.  Borrower shall pay on the Closing Date a commitment fee to the Agent as and when provided in the addendum to the commitment letter between the Borrower and the Agent.  The commitment fee shall be based upon the amount of the Total Commitment and shall be fully earned by the Agent on the Closing Date, regardless of whether any Loan Advance is made subsequent to the Initial Advance.  Upon the funding of a subsequent advance, the Borrower shall pay the additional fee to the Agent as set forth in the written agreement with the Agent.

2.6.2Extension Fees.  The Borrower shall pay to the Agent for the account of the Lenders “Extension Fees” (so referred to herein) in amounts representing one quarter of one percent (0.25%) of then outstanding principal balance of the Loan at the Maturity Date (and at the First Extended Maturity Date, as applicable), on each occasion, in

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connection with the Borrower’s exercise of its extension rights, and as a condition precedent to the effectiveness thereof, in each instance, as provided in Section 2.8.

2.7Acceleration.  The Agent may, and upon the request of the Required Lenders shall, accelerate the applicable Loan, after the occurrence and during the continuance of an Event of Default.  Upon such an acceleration, all principal, accrued interest and costs and expenses shall be due and payable together with interest on such principal at the Default Rate and any applicable Prepayment Fee and any amounts due under Section 2.5.7.

2.8Conditions to Extending Loan.  Upon satisfaction of each of the following conditions, the Borrower may extend its respective Loan until the First Extended Maturity Date, and thereafter, again upon satisfaction of each of the following conditions, the Borrower may further extend its respective Loan until the Second Extended Maturity Date:

2.8.1No Default.  No Default with respect to the Borrower shall exist on the date of the Borrower’s written notice for an extension as provided for below and on the Maturity Date (or as may be applicable, the First Extended Maturity Date).

2.8.2Notice From Borrower.  Such Borrower shall have given Agent written notice of its request to exercise its extension right at least forty-five (45) days, but no more than ninety (90) days, before the Maturity Date (or as may be applicable, the First Extended Maturity Date).

2.8.3Covenant Compliance.  No breach of any covenants imposed upon the Borrower shall exist including, without limitation, the Financial Covenants;

2.8.4Exercise of Ground Lease Extension Options.  The Borrower shall or shall cause the applicable Property Owner to duly exercise, in a timely manner, all Ground Lease Extension Options as to which the final date to exercise such Ground Lease Extension Options is within thirteen (13) months of the First Extended Maturity Date (as of the Closing Date, the applicable Ground Lease Extension Options are detailed on Schedule 2.8.4);

2.8.5Conditions Satisfied.  All of the conditions set forth in Section 0 of this Agreement, to the extent applicable to the subject Loan being extended, shall continue to be satisfied;

2.8.6Extension Fee.  The Extension Fee of 0.25% of the Loan being extended referred to in Section 2.6 shall have been paid at least five (5) days prior to the Maturity Date (or as may be applicable, the First Extended Maturity Date) and shall be returned to the subject Borrower if the Loan is not extended for any reason;

2.8.7Additional Documents.  The Borrower and each Guarantor shall have executed and delivered to Agent such agreements and documents as Agent may reasonably require to effectuate the extension; provided, however, none of said requested agreements or documents shall provide for additional collateral or include any substantive modification of the terms and provisions of the Loan Documents;

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2.8.8Interest Rate Protection.  The applicable Borrower shall have entered into an Interest Rate Protection Agreement, from an issuer and in form and substance reasonably acceptable to the Agent, with respect to the subject Loan, which Interest Rate Protection Agreement shall be collaterally assigned to the Agent, on behalf of the Lenders, to secure the Loan being extended; and

2.8.9Before End of Term.  Each of the foregoing conditions are satisfied not later than, and on, the Maturity Date (or as applicable, the First Extended Maturity Date).

Within twenty (20) days following receipt by Agent of Borrower’s written notice under clause 2.8.2 above requesting the extension accompanied by the items described in Section 2.8, Agent shall notify the Borrower in writing if all of the conditions precedent to the extension, other than payment of the extension fee, have been satisfied, or if further information or documents set forth in Section 2.8 are required, specifying such missing information or documents.  If Agent determines that the conditions to extension have been satisfied (or if the Agent notified the Borrower as provided above of any outstanding information or documents required by this Section 2.8, specifying such missing information or documents, and the Borrower provides outstanding information or documents prior to ten (10) days before the Maturity Date (or as may be applicable, the First Extended Maturity Date)), other than payment of the Extension Fee, Agent shall so notify the Borrower and upon Agent’s receipt of the Extension Fee not later than five (5) days prior to the Maturity Date (or as may be applicable, the First Extended Maturity Date), so long as no Default exists, the term of the subject Loan shall be extended until the First Extended Maturity Date (or as may be applicable, the Second Extended Maturity Date).

2.9Increased Costs and Capital Adequacy.

2.9.1Borrower recognizes that the cost to any Lender of maintaining the Loan or any portion thereof may fluctuate and, to the extent that such Lender makes such determination generally with respect to similarly situated borrowers, Borrower agrees to pay Agent additional amounts to compensate any such Lender for any increase in its actual costs incurred in maintaining the Loan or any portion thereof outstanding or for the reduction of any amounts received or receivable from Borrower as a result of:

(a)any change after the date hereof in any applicable law, regulation or treaty, or in the interpretation or administration thereof, or by any domestic or foreign court, (A) changing the basis of taxation of payments under this Agreement to any Lender (other than taxes imposed on all or any portion of the overall net income or receipts of Lenders or franchise taxes), or (B) imposing, modifying or applying any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, credit extended by, or any other acquisition of funds for loans by any Lender (which includes the Loan or any applicable portion thereof) (provided, however, that Borrower shall not be charged again the Reserve Percentage already accounted for in the definition of the Adjusted LIBOR Rate), or (C) imposing on any Lender, or the London interbank market generally, any other condition affecting the Loan, provided that the result of the foregoing is to increase the cost to any Lender of maintaining the

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Loan or any portion thereof or to reduce the amount of any sum received or receivable from Borrower by any Lender under the Loan Documents; or

(b)the maintenance by any Lender of reserves in accordance with reserve requirements promulgated by the Board of Governors of the Federal Reserve System of the United States with respect to “Eurocurrency Liabilities” of a similar term to that of the applicable portion of the Loan (without duplication for reserves already accounted for in the calculation of a LIBOR Rate pursuant to the terms hereof).

So long as no Event of Default has occurred and is continuing, upon written demand of Borrower, the Borrower may with thirty (30) days’ written notice to the Agent, require any such Lender whose costs of maintaining the Loan or any portion thereof has increased as provided for in this Section 2.9.1 to sell and assign its entire interest in the Loan pursuant to Section 13.22 hereof to any Eligible Assignee identified by the Borrower in its demand and reasonably approved by the Agent, upon payment by such Eligible Assignee of the entire par amount of such Lender’s interest in the Loan, plus any compensation required to be paid hereunder and any applicable Breakage Costs.

2.9.2If the application of any law, rule, regulation or guideline adopted or arising out of the report of the Basle Committee on Banking Regulations and Supervisory Practices entitled “International Convergence of Capital Measurement and Capital Standards”, or the adoption after the date hereof of any other law, rule, regulation or guideline regarding capital adequacy, or any change after the date hereof in any of the foregoing, or in the interpretation or administration thereof by any domestic or foreign Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has the effect of reducing the rate of return on such Lender’s capital to a level below that which such Lender would have achieved but for such application, adoption, change or compliance (taking into consideration the policies of such Lender with respect to capital adequacy), then, to the extent that such Lender requires such compensation generally with respect to similarly situated borrowers, from time to time Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction with respect to any portion of the Loan outstanding.  So long as no Event of Default has occurred and is continuing, upon written demand of Borrower, the Borrower may with thirty (30) days written notice to the Agent, require any such Lender to whom compensation is due and payable by the Borrower as provided for in this Section 2.9.2 to sell and assign its entire interest in the Loan pursuant to Section 13.22 hereof to any Eligible Assignee identified by the Borrower in its demand and reasonably approved by the Agent, upon payment by such Eligible Assignee of the entire par amount of such Lender’s interest in the Loan, plus any compensation required to be paid hereunder and any applicable Breakage Costs.

2.9.3Any amount payable by Borrower under subsection 2.9.1 or 2.9.2 above shall be paid within five (5) days of receipt by Borrower of a certificate signed by an authorized officer of Agent setting forth the amount due and the basis for the determination of such amount, which statement shall be conclusive and binding upon Borrower, absent manifest error.  Failure on the part of Agent to demand payment from

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Borrower for any such amount attributable to any particular period shall not constitute a waiver of Lender’s right to demand payment of such amount for any subsequent or prior period. Agent shall use reasonable efforts to deliver to Borrower prompt notice of any event described in subsection 2.9.1 or 2.9.2 above, of the amount of the reserve and capital adequacy payments resulting therefrom and the reasons therefor and of the basis of calculation of such amount; provided, however, that any failure by Agent so to notify Borrower shall not affect Borrower’s obligation to pay the reserve and capital adequacy payment resulting therefrom.

2.10Borrower Withholding.  If by reason of a change in any applicable laws occurring after the date hereof, or, as to an Eligible Assignee acquiring an interest in the Loan after the date hereof, after such Eligible Assignee purchases such interest in the Loan, Borrower is required by law to make any deduction or withholding in respect of any taxes (other than taxes imposed on or measured by the net income of any Lender or any franchise tax imposed on any Lender), duties or other charges from any payment due under the Note to the maximum extent permitted by law, to the extent that such Lender imposes such requirement generally with respect to similarly situated borrowers, the sum due from Borrower in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, each Lender receives and retains a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made.  So long as no Event of Default has occurred and is continuing, upon written demand of Borrower, the Borrower may with thirty (30) days written notice to the Agent, require any such Lender requiring the Borrower to make such deductions or withholdings as set forth in this Section 2.10 to sell and assign its entire interest in the Loan pursuant to Section 13.22 hereof to any Eligible Assignee identified by the Borrower in its demand and reasonably approved by the Agent, upon payment by such Eligible Assignee of the entire par amount of such Lender’s interest in the Loan, plus any amounts required to be paid hereunder and any applicable Breakage Costs.

2.11Interest Rate Agreements.

2.11.1Any indebtedness incurred pursuant to an Interest Rate Agreement entered into by Borrower and Agent shall constitute indebtedness evidenced by the Note and secured by the other Loan Documents to the same extent and effect as if the terms and provisions of such Interest Rate Agreement were set forth herein, whether or not the aggregate of such indebtedness, together with the disbursements made by Lenders of the proceeds of the Loan, shall exceed the face amount of the Note.

2.11.2Borrower hereby collaterally assigns to Agent for the benefit of Lenders any and all Interest Rate Protection Products purchased or to be purchased by Borrower in connection with the Loan, as additional security for the Loan, and agrees to provide Lenders with any additional documentation requested by Lenders in order to confirm or perfect such security interest during the term of the Loan.  If Borrower obtains an Interest Rate Protection Product from a party other than Agent, Borrower shall deliver to Lenders such third party’s consent to such collateral assignment.  No Interest Rate Protection Product purchased from a third party may be secured by an interest in Borrower or the Collateral.

2.11.3Borrower shall, as a condition to the opening of the Loan if required by Lenders and otherwise within five (5) Business Days after Agent’s request, institute an

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interest rate hedging program through the purchase of an Interest Rate Protection Product with respect to the Loan.  The Interest Rate Protection Product, the portion of the Loan (if less than the entire Loan Amount) to which such Interest Rate Protection Product shall apply, and the financial institution providing the Interest Rate Protection Product, shall be subject to Agent’s prior written approval in its sole discretion.  Borrower shall afford Agent a right of first opportunity to provide all Interest Rate Protection Products but shall not be required to purchase such Interest Rate Protection Products from Agent or any Lender.

ARTICLE 3

SECURITY FOR THE LOAN; LOAN AND SECURITY DOCUMENTS.

3.1Security for Loan.  The Loan, together with interest thereon and all other charges and amounts payable by, and all other Obligations of, the Borrower and the other Loan Parties to the Agent and/or each of the Lenders, shall be secured by the following collateral (the “Collateral”) which the Borrower agrees to provide and maintain, or cause to be provided and maintained (whether provided for each in separate agreements or combined with various other agreements):

3.1.1Security Agreement.  A first priority security agreement and collateral assignment granted by the Borrower to the Agent, on behalf of the Lenders, respecting all assets of the Borrower, whether now owned, now due, or in which the Borrower has an interest, or hereafter, at any time in the future, acquired, arising, to become due, or in which the Borrower obtains an interest.

3.1.2Mortgages.  A first priority leasehold mortgage, security agreement, and assignment of leases and rents granted by (a) the Churchill Owner respecting the Churchill Property, and (b) the Orlando Owner respecting the Orlando Property; provided, however, that the Agent agrees to hold the mortgage granted by the Orlando Owner in escrow and shall not record same until such time as an Event of Default has occurred and is continuing.

3.1.3Borrower Ownership Interest Pledge and Security Agreements.  First priority Ownership Interest Pledge and Security Agreements granted by the Borrower to the Agent, on behalf of the Lenders, with respect to all right, title, and interest of the Borrower to and in each of the following:

(a)The Borrower’s 100% limited partnership interests in each of the Borrower Partnerships, as of the Funding Date to be as set forth in Exhibit M annexed hereto; and

(b)The Borrower’s 100% membership interest in each of the Borrower LLCs, as of the Funding Date to be as set forth in Exhibit M annexed hereto.

3.1.4Depository Account Pledge and Security Agreements.  A first priority Depository Account Pledge and Security Agreement granted by the Borrower and each Guarantor to the Agent, on behalf of the Lenders, respecting all of the Borrower’s

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Accounts maintained by such Persons at KEYBANK NATIONAL ASSOCIATION (or any successor thereto or affiliate thereof) (singly and collectively the “Depository Account Pledge and Security Agreement”).

3.1.5Collateral Assignment of Interest Rate Protection Agreement.  A first priority Collateral Assignment of Protected Interest Rate Agreement granted by the Borrower to the Agent, on behalf of the Lenders, respecting the Interest Rate Protection Agreement entered into with respect to the Loan.

3.1.6FT-FIN GP Ownership Interest Pledge and Security Agreement.  A first priority Ownership Interest Pledge and Security Agreement granted by FT-FIN GP to the Agent, on behalf of the Lenders, with respect to all right, title, and interest of FT-FIN GP to and in its general partner’s interest in each Borrower Partnership, respectively.

3.1.7Guaranties.

(a)The continuing guaranty from each Guarantor, pursuant to which each Guarantor shall guaranty the prompt, punctual, and faithful payment of the Loan and the performance of all other Obligations to the Agent and each of the Lenders under the Loan Documents; provided, however, that any particular Guaranty may be on a limited or non-recourse basis as, and only to the extent, specifically approved by the Agent and provided in any such Guaranty (singly and collectively the “Guaranty”).

3.1.8Environmental Compliance and Indemnification Agreement.  A compliance and indemnification agreement with respect to environmental matters (“Environmental Indemnity”) from the Borrower, First Union and each Guarantor (collectively, the Indemnitor”) in favor of the Agent and each of the Lenders.

3.1.9Escrow Agreement Respecting Mortgage.  An escrow agreement (“Escrow Agreement Respecting Mortgage”) pursuant to which the Borrower and Orlando Owner, respectively, execute and deliver in escrow to the Agent, on behalf of the Lenders, the Mortgage on the Orlando Property.

3.1.10Escrow Agreement Respecting Ground Lease Extensions and Lease Options.  An escrow agreement (“Escrow Agreement Respecting Ground Lease Extensions and Lease Options”) pursuant to which the Borrower and certain Property Owners, respectively and as applicable, execute and deliver in escrow to the Agent, on behalf of the Lenders, executed notices and such other documents and agreements required to exercise all extensions and other rights respecting the following, as determined in the reasonable judgment of the Agent.

(a)Those lease extension options (singly and collectively, the “Ground Lease Extension Options”) relating to all ground lessor interests held by any party as detailed on Schedule 2.8.4, whether with respect to a Ground Lease in effect as of the date hereof and any other Ground Lease which may be entered into hereafter, including any Ground Lease entered into in connection with the exercise of a Remainder Ground Lease Option.

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3.1.11Additional Documents.  Any other documents, instruments and agreements with respect to the Loan as set forth on the Loan Agenda.

3.2Loan Documents and Security Documents.  The Loan shall be made, evidenced, administered, secured and governed by all of the terms, conditions and provisions of the “Loan Documents”, each as the same may be hereafter modified or amended, consisting of: (i) this Loan Agreement; (ii) the promissory notes in the form of Exhibit C, annexed hereto, payable by the Borrower to each of the respective Lenders in the original aggregate principal amount of up to FIFTY-THREE MILLION DOLLARS ($53,000,000.00) (collectively, the “Note”); (iii) the various documents and agreements referenced in Section 3.1, above; (iv) any Consents or Payment Direction Letters executed by any Borrower Subsidiary; (v) the Interest Rate Protection Agreement, (vi) the Cash Management Agreement; and (vii) any other documents, instruments, or agreements heretofore or hereafter executed to further evidence or secure the Loan.

Each of the Loan Documents listed above is dated as of the date hereof.  The Loan Documents referenced in Section 3.1 are sometimes referred to herein, singly and collectively as the “Security Documents”.

ARTICLE 4

CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES

4.1Authorized Representatives.  Agent and each of the Lenders are authorized to rely upon the continuing authority of the persons, officers, signatories or agents hereafter designated (“Authorized Representatives”) to bind the Borrower with respect to all matters pertaining to the Loan and the Loan Documents including, but not limited to, the selection of interest rates, the submission of the request for the Loan Advance and certificates with regard thereto.  Such authorization may be changed only upon written notice to Agent accompanied by evidence, reasonably satisfactory to Agent, of the authority of the person giving such notice.  The present Authorized Representatives as to the Borrower are listed on Exhibit D.  The Agent shall have a right of approval, not to be unreasonably withheld or delayed, over the identity of the Authorized Representatives so as to assure Agent and each of the Lenders that each Authorized Representative is a responsible and senior official of the Borrower.

ARTICLE 5

CONDITIONS PRECEDENT.

It shall be a condition precedent of Lenders’ obligation to close the Loan and to fund the Initial Advance that each of the following conditions precedent be satisfied in full (as determined by each Lender in its discretion which discretion shall be exercised in good faith having due regard for the advice of the Agent), unless specifically waived in writing by all of the Lenders at or prior to the date of the funding of the Initial Advance (the date of the closing of the Loan shall be referred to herein as the “Closing Date” and the date of the Initial Advance shall be referred to herein as the “Funding Date”), and the Lenders shall, subject to compliance with all of the other terms, conditions and provisions of this Agreement, make disbursement of the Initial Advance on the Closing Date and shall, if so requested by Borrower as and when provided in Section 5.20 and as otherwise provided herein, make disbursement of the remaining Subsequent Advance subject to the satisfaction of said following conditions precedent:

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5.1Satisfactory Loan Documents and Related Documents; Loan Agenda Items.  On the Funding Date, each of the Loan Documents and the Related Documents shall be satisfactory in form, content and manner of execution and delivery to Agent and Agent’s counsel and all Loan Documents and Related Documents shall be in full force and effect.  Without limiting the foregoing, the Agent shall have received each of the instruments, documents, and agreements itemized on the Loan Agenda, each executed and delivered in favor of, and/or in form and substance reasonably satisfactory to, the Agent.

5.2Financial Information; No Material Change.

(a)No change shall have occurred in the financial condition, business, affairs, operations or control of the Borrower, the Loan Parties, and/or the other Loan Parties since the date of their respective financial statements or financial projections most recently delivered to Agent, which change has had or could reasonably be expected to have a Material Adverse Effect; and the Borrower and the other Loan Parties shall have furnished Agent such other financial information, projections, and certifications as reasonably requested by the Agent.

(b)The absence of any material adverse change in the loan syndication, financial or capital market conditions generally from those currently in effect.

(c)The Borrower shall have provided to the Agent a copy certified by an officer of the Borrower of its balance sheet after giving effect to the Loan, to evidence that the Borrower is solvent, has assets having a fair value in excess of the amount required to pay the Borrower’s probable liabilities on the Borrower’s existing Debts as such become absolute and mature, and has adequate capital for the conduct of the Borrower’s business and the ability to pay the Borrower’s Debts from time to time incurred in connection therewith as such Debts mature.

5.3Warranties and Representations Accurate.  All warranties and representations made by or on behalf of any of the Borrower and the other Loan Parties, or any of them, to Agent or any of the Lenders shall be true, accurate and complete in all material respects and, to the best of the Borrower’s Knowledge, shall not omit any material fact necessary to make the same not misleading.

5.4Validity and Sufficiency of Security Documents.  The Security Documents shall create a valid and perfected lien on the Collateral described therein and each of the Security Documents and related UCC filings shall have been duly recorded and filed to the satisfaction of Agent and Agent’s counsel, including, without limitation, as follows:

(a)On the Funding Date, the Borrower and the other Loan Parties shall have delivered to the Agent evidence of the completion of all recordings and filings of, or with respect to, the Security Documents or, in the case of UCC-1 financing statements, delivery of such financing statements in proper form for recording, and shall have taken all such other actions as may be necessary or, in the reasonable opinion of the Agent, desirable to perfect the Liens and security interests intended to be created by the Security Documents in the Collateral covered thereby.  Such filings, recordings and other actions shall include, without

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limitation, in addition to the UCC-1 financing statements, (x) delivery to the Agent of the certificates, if any, representing the respective partnership and membership interests in each partnership and limited liability company, the partnership or membership interests in which are being pledged to Agent on behalf of the Lenders pursuant to the Security Documents, and (y) delivery to the Agent of all consents, acknowledgments, and approvals relating in any way to the Security Documents as the Agent in its reasonable discretion determines appropriate, including, without limitation, those consents and approvals set forth in the Loan Agenda with respect to the granting of the Security Documents and the acknowledgment of the interests of the Agent and the Lenders created therein (the “Consents”); and

(b)on or prior to the Funding Date, the Agent shall have received the results of a UCC, tax lien and judgment search in the jurisdictions in which the Borrower, the Borrower Subsidiaries, and the other Loan Parties, respectively, are organized, have assets, or have their chief executive office, and the results of such search shall indicate there are no judgments or Liens not permitted under the Loan Documents.

5.5Payment Direction And Authorization. Agent shall have received evidence of such Payment Direction Letters set forth in the Loan Agenda in order to evidence the intended management of the cash flow of the Borrower and the other Loan Parties.

5.6Litigation.  Except as noted on Schedule 6.5, on the Funding Date, there shall not be any actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority by any entity (private or governmental) pending or, to the best of the Borrower’s Knowledge, threatened with respect to the Loan, the transactions contemplated in the Loan Documents or any documentation executed in connection therewith, or in connection with the Borrower or any other Loan Party, which the Agent shall determine in good faith is likely to have a Material Adverse Effect.

5.7Formation Documents and Entity Agreements.

(a)On the Funding Date, the Agent shall have received a certificate of the general partner or managing member or manager, as applicable, of the Borrower and each other Loan Party which is a partnership or limited liability company, annexing and certifying as to (a) the Formation Documents of such entity having been duly executed, delivered and filed and remaining in full force and effect and unmodified as of the date of such certificate (and annexing a copy thereof), (b) due authorization, execution and delivery by such entity of the Loan Documents to which it is a party, and (c) such entity being in good standing and authorized to do business in each jurisdiction where the ownership of its assets and operation of its business requires such qualification, as each of the foregoing is set forth in Loan Agenda;

(b)On the Funding Date, the Agent shall have received a certificate of the managing member or manager of each Loan Party which is a limited liability company annexing and certifying as to (a) resolutions of such entity authorizing and approving the transactions contemplated by the Loan Documents, and the

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execution and delivery thereof by such entity in respect of the documents to which it is a party and on behalf of the other entities in which such limited liability company is a general partner or managing member in respect of any of the Loan Documents, (b) signatures and incumbency of all officers of such limited liability company executing documentation on behalf of such entity or on behalf of any entity as to which such limited liability company is a general partner or managing member, as the case may be, in connection with the transactions contemplated by the Loan Documents, (c) the Formation Documents of such entity having been duly executed, delivered and filed and remaining in full force and effect and unmodified as of the date of such certificate (and annexing copies thereof) and (d) such entity being in good standing and authorized to do business in each jurisdiction where the conduct of its business and ownership of its assets requires such qualification, as each of the foregoing is set forth in the Loan Agenda.

(c)On the Funding Date, the Agent shall have received a certificate of the secretary of each Loan Party which is a corporation annexing and certifying as to (a) corporate resolutions of such entity authorizing and approving the transactions contemplated by the Loan Documents, and the execution and delivery thereof by such entity in respect of the documents to which it is a party and on behalf of the other entities in which such corporation is a general partner or managing member in respect of any of the Loan Documents, (b) signatures and incumbency of all officers of such corporation executing documentation on behalf of such entity or on behalf of any entity as to which such corporation is a general partner or managing member, as the case may be, in connection with the transactions contemplated by the Loan Documents, (c) the Formation Documents of such entity having been duly executed, delivered and filed and remaining in full force and effect and unmodified as of the date of such certificate (and annexing copies thereof) and (d) such entity being in good standing and authorized to do business in each jurisdiction where the conduct of its business and ownership of its assets requires such qualification, including, as each of the foregoing is set forth in the Loan Agenda.

5.8Compliance With Law.  There are no Legal Requirements which prohibit or adversely limit the capacity or authority of the Borrower to enter into the Loan or any Loan Party to execute the Loan Documents to which it is a party, and perform the obligations of such Person with respect thereto.

5.9Compliance With Financial Covenants.  Agent shall have received an Officer’s Certificate reflecting compliance with the Financial Covenants and the terms and conditions hereof.

5.10Due Diligence.  Agent shall have received and completed a review of such due diligence as the Agent may require with respect to any Individual Property, including, without limitation:

(a)Updated title reports and copies of specimen owner’s title insurance policies (which policies shall include, without limitation, a mezzanine endorsement) with respect to the Individual Properties owned (fee simple or land

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estate) or ground leased by any Property Owner, reflecting the owner thereof, the interest of the Property Owner therein, and any Mortgage Debt (the “Title Reports”);

(b)For the Churchill Property, a lender’s title insurance policy in favor of Agent insuring the mortgage granted by the Churchill Owner to the Agent, containing such coverages and endorsements as the Agent may reasonably require;

(c)For the Orlando Property, a commitment for the issuance of a lender’s title insurance policy in favor of Agent insuring the mortgage granted by the Orlando Owner to the Agent, containing such coverages and endorsements as the Agent may reasonably require;

(d)Copies of all notes and mortgages evidencing all Mortgage Debt on any Individual Property;

(e)As requested by the Agent, copies of all Ownership Interest Agreements;

(f)Borrower’s certification as to the principal balance and the regularly scheduled principal and interest payments due on all First Mortgage Debt as of November 15, 2004;

(g)For each Individual Property, third party market rent updates;

(h)Tenant estoppel certificates from each tenant under a Lease;

(i)Estoppel Certificates from each ground lessor and/or remainderman (as available) as applicable to each Individual Property;

(j)Zoning reports and surveys for each Individual Property; and

(k)Copies of all Leases for any Individual Property.

5.11Condition of Property.  There shall have been no uninsured, unrepaired, or unrestored damage or destruction by fire or otherwise to any of the real or tangible personal property comprising or intended to comprise the Individual Properties which could reasonably be expected to have a Material Adverse Effect.

5.12Insurance.  The Borrower shall have provided to Agent and each of the Lenders evidence of the following insurance, each meeting the requirements of the Agent: (i) reasonably satisfactory blanket liability insurance in favor of the Borrower and each of the Borrower Subsidiaries, with the Agent and the Lenders named as additional insureds and, with respect to the Churchill Property, physical all-risk insurance acceptable to the Agent with the Agent named as mortgagee and loss payee; (ii) a reasonably satisfactory report from the third party monitoring the insurance as to the hazard and other insurance on the Individual Properties maintained by the respective tenant thereof, evidencing compliance with Exhibit E and, as applicable, the respective Lease of each Individual Property, and (iii) a reasonably satisfactory third party

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contract regarding the monitoring of the insurance to be obtained by tenants under Leases with respect to the Individual Properties.

5.13Third Party Consents and Agreements.  The Agent shall have received the Consents and such other third party consents and agreements as the Agent may require with respect to the Loan.

5.14Intentionally Omitted.

5.15Cash Management.  The Borrower, each Borrower Subsidiary, and FT-FIN GP shall open a Depository Account, as provided for herein, and the Borrower, FT-FIN GP, and each Property Owner shall enter into a Cash Management Agreement with the Agent.

5.16Interest Rate Protection Agreement.  The Borrower shall have entered into an Interest Rate Protection Agreement, from an issuer and in form and substance reasonably acceptable to the Agent, with respect to the Loan, which Interest Rate Protection Agreement shall be collaterally assigned to the Agent, on behalf of the Lenders, to secure the Obligations.

5.17Legal Opinions.  Agent shall have received and approved legal opinion letters from counsel representing the Borrower and the other Loan Parties which meet Agent’s legal opinion requirements and covering such matters incident to the transactions contemplated herein, as the Agent may reasonably request.

5.18No Default.  There shall not be any Default under any of the Loan Documents.

5.19Acquisition.  Agent shall have received and completed a review of such due diligence and documentation as the Agent may require with respect to the Acquisition.  All conditions precedent to completion of the Acquisition shall have been satisfied, as determined by the Agent, and all documentation necessary to complete the Acquisition shall have been approved by the Agent and have been executed, or will be executed simultaneous with the funding of the Loan.

5.20Subsequent Advance.  Upon the written request of the Borrower, at the sole option of the Borrower, provided to the Agent not later than December 31, 2004, the Lenders agree to make the Subsequent Advance to the Borrower subject to the following terms and conditions:

5.20.1No Default or Event of Default shall have occurred and be continuing as of the date such notice is given and as of date of the proposed Subsequent Advance;

5.20.2The Borrower remains in compliance with the various conditions set forth in Section 5.1 through 5.19 above; and

5.20.3The Borrower is in compliance with the Financial Covenants and shall remain in pro forma compliance with the Financial Covenants after giving effect to the Subsequent Advance.

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ARTICLE 6

WARRANTIES AND REPRESENTATIONS. 

The Borrower warrants and represents to Agent and each of the Lenders for the express purpose of inducing Lenders to enter into this Agreement, to make the Loan Advance, and to otherwise complete all of the transactions contemplated hereby that upon the date of the Loan Advance and at all times thereafter until the Loan has been repaid and all Obligations have been satisfied as follows:

6.1Formation.  Each of the Borrower and the other Loan Parties has been duly formed and is validly existing and in good standing as a corporation, partnership or limited liability company, as the case may be, under the laws of the State of its formation.  Each of the Borrower and the other Loan Parties has the requisite corporate, partnership or company power and authority, as applicable, to own its assets and conduct its businesses as currently conducted and owned, and to enter into and perform its obligations under each Loan Document and/or Related Document to which it is a party.  Each of the Borrower and the other Loan Parties is in good standing and authorized to do business in each jurisdiction where the ownership of its assets and/or the conduct of its business requires such qualification except where the failure to be so qualified would not have a Material Adverse Effect.

6.2Proceedings; Enforceability.  Each of the Borrower and the other Loan Parties has taken all requisite corporate, partnership or company action, as applicable, to authorize the execution, delivery and performance by such Person of the Loan Documents and/or the Related Documents to which it is a party.  Each Loan Document and the Related Document to which it is a party which is required to be executed and delivered on or prior to the date on which this representation and warranty is being made has been duly authorized, executed and delivered and constitutes the legal, valid and binding obligation of each of the Borrower and the other Loan Parties which is a party thereto, enforceable against each such Person in accordance with its respective terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

6.3Conflicts.  Neither the execution, delivery and performance of the Loan Documents and the Related Documents by each of the Borrower and the other Loan Parties or compliance by any such Person with the terms and provisions thereof (including, without limitation, the granting of Liens pursuant to the Security Documents), (i) will contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict with or result in any breach of any of the terms, covenants or conditions of, or constitute a default under, or result in the creation or imposition (or the obligation to create or impose) of any Lien (except pursuant to the Security Documents) upon any of the property or assets of any such Person pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement or any other agreement, contract or instrument to which any such Person is a party or by which it or any of its properties or assets is bound or to which it may be subject or (iii) will violate any provision of any Formation Document of any such Person.

6.4Ownership and Taxpayer Identification Numbers.

(a)All of the partners, owners, stockholders, and members, respectively and as may be applicable, of each of the Borrower and the other Loan Parties are listed in Exhibit F.  The exact correct name and organizational

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number(s) and federal employer identification number(s) of the Borrower and the other Loan Parties are accurately stated in Exhibits F, L and M.

(b)The Borrower is the owner of all of the ownership interests set forth in Section 3.1.3, above, pledged by it to the Agent, on behalf of the Lenders.  Except for such ownership interests, the Borrower does not directly hold any stock, membership, partnership or ownership interest in any other Person.

(c)The Borrower and FT-FIN GP are each the owner, respectively, of all of the ownership interests to be pledged to the Agent, on behalf of the Lenders, pursuant to the Loan Documents.  Except for such ownership interests and except as shown on Schedule 6.4, the Borrower and the other Loan Parties do not directly hold any stock, membership, partnership or ownership interest in any other Person.

(d)Except as shown on Schedule 6.4, no Loan Party or third party, directly or indirectly, owns or controls any interest in any asset relating to the Borrower or the business operations of the Borrower and/or the Borrower Subsidiaries.

6.5Litigation.  Except as set forth in Schedule 6.5, there are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority by any entity (private or governmental) pending or, to the best of the Borrower’s Knowledge, threatened with respect to the Loan, or the transactions contemplated in the Loan Documents or the Related Documents, or any documentation executed in connection therewith, or against the Borrower and/or any of the other Loan Parties which could reasonably be expected to have a Material Adverse Effect.

6.6Information.  All factual information furnished by or on behalf of the Borrower and the other Loan Parties to the Agent and/or any of the Lenders (including, without limitation, all information contained in the Loan Documents) for purposes of or in connection with this Agreement, the other Loan Documents or any transaction contemplated herein or therein is, and all other such factual information hereafter furnished by or on behalf of the Borrower and the other Loan Parties to the Agent and/or any of the Lenders will be, true and accurate in all material respects on the date as of which such information is dated or certified and to the best of the Borrower’s Knowledge, not incomplete by omitting to state any fact necessary to make such information not misleading in any material respect at such time in light of the circumstances under which such information was provided.

6.7Taxes.  Each of the Borrower and the other Loan Parties has made all required tax filings and have paid all federal, state and local taxes applicable to them and/or their respective assets, except if contested in accordance with Section 9.1.

6.8Financial Information.  The financial statements of the Borrower and the other Loan Parties provided to the Agent present fairly the financial conditions of each at the dates of such statements of financial condition and the results of operations for the periods covered thereby. The financial projections of the Borrower and the other Loan Parties present a good faith estimate of the projected financial condition of each at the reflected dates and the projected results of operations for the periods covered thereby. Since the dates of the relevant financial

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statements, no change has occurred which could have or reasonably be expected to have a Material Adverse Effect.

6.9Management Agreements.  There are no other management agreements or asset management agreements respecting the management of the assets of the Borrower and/or any of the other Loan Parties.

6.10Control Provisions.

(a)The Borrower controls, directly or indirectly, and without the requirement for consent of any other Person, the management of each Borrower Subsidiary.

(b)There are no provisions in any limited partnership agreement, operating agreement, certificate of incorporation, bylaws or any other agreement or instrument to which the Borrower or any Borrower Subsidiary is party, under which any Person (other than the Borrower or a Borrower Subsidiary) has the right to exercise the management or control rights, powers or authority currently belonging to the Borrower or any Borrower Subsidiary, except as set forth in (i) any mortgage, deed of trust or similar security agreement encumbering any Individual Property upon exercise of the rights and remedies upon default set forth in any of the foregoing, or (ii) the rights of FT-FIN GP as general partner of the Borrower Partnerships.

6.11Formation Documents.  The Borrower has delivered or caused to be delivered to the Agent true and complete copies of all Formation Documents of the Borrower and the other Loan Parties, and all amendments thereto as of the date hereof and as of the date of the Loan Advance.

6.12Related Documents.  To the extent not provided for otherwise in this Article 6, true and correct copies of all other Related Documents, together with all amendments and modifications thereto, have been delivered to the Agent, each of which is in full force and effect and, to the best of the Borrower’s Knowledge, no material default has occurred thereunder which could have a Material Adverse Effect.

6.13Bankruptcy Filings.  None of the Borrower or any of the other Loan Parties is contemplating either a filing of a petition under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property, and the Borrower has no Knowledge of any Person contemplating the filing of any such petition against any of the Borrower and/or any of the other Loan Parties.

6.14Options.  No Person holds a right of first refusal or option to purchase with respect to any item of Collateral other than as set forth in the Leases.

6.15Investment Company.  None of the Borrower and/or any of the other Loan Parties is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

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6.16Holding Company.  None of the Borrower and/or any of the other Loan Parties is a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public Utility Holding Company Act of 1935, as amended.

6.17Individual Properties.

6.17.1Each of the Property Owners possesses such Licenses and Permits issued by the appropriate federal, state, or local regulatory agencies or bodies necessary to own and operate each Individual Property, except where the failure to possess any such License or Permit would not have a Material Adverse Effect. The Property Owners are in material compliance with the terms and conditions of all such Licenses and Permits, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect.  All of the Licenses and Permits are valid and in full force and effect, except where the invalidity of such Licenses and Permits or the failure of such Licenses and Permits to be in full force and effect would not result in a Material Adverse Effect.  Neither the Borrower nor any of the Property Owners has received any notice of proceedings relating to the revocation or modification of any such Licenses and Permits which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

6.17.2Except to the extent the failure of the following to be true would not result in a Material Adverse Effect, (i) the Property Owners have either (x) fee simple title to the Individual Properties, (y) a land estate interest for a specified number of years in the Individual Properties, or (z) a leasehold estate interest in the Individual Properties, as set forth in Schedule 6.17; (ii) the interests of the Property Owners in the Individual Properties are not subject to any Liens securing the repayment of money except for those securing the repayment of the First Mortgage Debt, as set forth in Schedule 6.17.8, and (iii) each land estate remainderman interest and lessor interest under a Ground Lease is not, directly or indirectly, owned or controlled by a Loan Party, Borrower Subsidiary or other Loan Party;

6.17.3Except to the extent the failure of the following to be true would not result in a Material Adverse Effect, (i) to the best of Borrower’s Knowledge and except as otherwise disclosed in those reports identified on Schedule 6.17.3, each Individual Property is free of any Hazardous Materials in violation of any Environmental Laws applicable to such property; (ii) none of the Property Owners or Borrower has received any notice of a claim under or pursuant to any Environmental Laws applicable to an Individual Property or under common law pertaining to Hazardous Materials on or originating from any Individual Property; and (iii) none of the Property Owners or Borrower has received any notice from any Governmental Authority claiming any material violation of any Environmental Laws that is uncured or unremediated as of the date hereof;

6.17.4The mortgages and deeds of trust encumbering the Individual Properties of any Property Owners are not cross-defaulted or cross-collateralized to any Individual Property owned by any other Property Owners;

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6.17.5Except to the extent the failure of the following to be true would not result in a Material Adverse Effect, (i) with respect to the Individual Properties, each Lease is in full force and effect, (ii) except as set forth in Schedule 6.17.5, to the best of Borrower’s Knowledge, none of the Property Owners is in default in the performance of any material obligation under any Lease and Borrower has no Knowledge of any circumstances which, with the passage of time or the giving of notice, or both, would constitute an event of default by any party under any of the Leases, (iii) except as set forth in Schedule 6.17.5, to the best of Borrower’s Knowledge, no tenant is in monetary default beyond thirty (30) days or material non-monetary default under its Lease, (iv) except as otherwise expressly set forth in Schedule 6.17.5, to the best of Borrower’s Knowledge, there are no actions, voluntary or involuntary, pending against any tenant under a Lease under any bankruptcy or insolvency laws, (v) none of the Leases and none of the rents or other amounts payable thereunder has been assigned, pledged or encumbered by any of the Property Owners or any other Person, except in connection with financing secured by the applicable Individual Property, and (vi) the basic terms and conditions of each Lease are set forth in Schedule 6.17.5 and Schedule 6.17.6 (the foregoing schedule, as updated from time to time as provided herein, being referred to herein as the “Lease Schedule”).

6.17.6Except to the extent the failure of the following to be true would not result in a Material Adverse Effect, (i) each Ground Lease is valid, binding and in full force and effect as against the applicable Property Owners and, to the best of Borrower’s Knowledge, the other party thereto, (ii) except for tenants under the Leases and except in connection with security relating to the Mortgage Debt, none of the Ground Leases is subject to any pledge, lien, assignment, license or other agreement granting to any third party any interest therein or any right to the use or occupancy of any premises leased thereunder, (iii) no payments under any Ground Lease are delinquent and no notice of default thereunder has been sent or received by any Loan Party which has not been cured or waived prior to the date hereof, and to the best of Borrower’s Knowledge, there does not exist under any of the Ground Leases any default by any Property Owners or any event which merely with notice or lapse of time or both, would constitute such a default by any of the Property Owners, and (iv) the basic terms and conditions of each Ground Lease are set forth in Schedule 6.17.6 and Schedule 2.8.4, including, without limitation, all such Ground Lease Extension Options (x) which have been exercised as of the Closing Date and (y) as to which the final date to exercise such Ground Lease Extension Option is within the next twelve (12) months (including all applicable dates by which notices must be provided in connection with the exercise of same) (the foregoing schedule, as updated from time to time as provided herein, being referred to as the “Ground Lease Extension Option Schedule”).

6.17.7Except to the extent the failure of the following to be true would not result in a Material Adverse Effect, (i) each Ownership Interest Agreement relating to a Remainder Ground Lease Option is valid, binding and in full force and effect as against the applicable Property Owners and, to the best of Borrower’s Knowledge, the other party thereto, (ii) except for tenants under the Leases and except in connection with security relating to the Mortgage Debt, none of the Remainder Ground Lease Options is subject to any pledge, lien, assignment, license or other agreement granting to any third party any interest therein or any right to the use or occupancy of any premises leased thereunder, (iii) no payments under any Ownership Interest Agreement relating to a

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Remainder Ground Lease Option are delinquent and no notice of default thereunder has been sent or received by any Borrower, any other Loan Party or other Loan Party which has not been cured or waived prior to the date hereof, and to the best of Borrower’s Knowledge, there does not exist under any of the Ownership Interest Agreements relating to the Remainder Ground Lease Options any default by any Property Owners or any event which merely with notice or lapse of time or both, would constitute such a default by any of the Property Owners, and (iv)  the basic terms and conditions of each Remainder Ground Lease Option are set forth in Schedule 6.17.6 and Schedule 2.8.4, including, without limitation, all such Remainder Ground Lease Options as to which the final date to exercise such Remainder Ground Lease Option is within the next twelve (12) months (including all applicable dates by which notices must be provided in connection with the exercise of same) (the foregoing schedule, as updated from time to time as provided herein, being referred to as the “Remainder Ground Lease Option Schedule”).

6.17.8Schedule 6.17.8 accurately details in all material respects the approximate amount, term, and interest rate applicable to all Mortgage Debt encumbering the Individual Properties (the foregoing schedule, as updated from time to time as provided herein, the “Mortgage Debt Schedule”). Except as noted on Schedule 6.17.8, no notice of default thereunder has been sent or received by any Loan Party which has not been cured or waived prior to the date hereof, and to the best of the Borrower’s Knowledge, there does not exist with respect to any Mortgage Debt any default by any Property Owners or any event which merely with notice or lapse of time or both, would constitute such a default by any of the Property Owners.  None of the Borrower, any Loan Party, any Borrower Subsidiary, or any other Loan Party owns, directly or indirectly, any material interest in any Mortgage Debt.

6.17.9Each of the Property Owners is treated as a partnership for federal income tax purposes and does not constitute a publicly traded partnership within the meaning of Section 7704 of the Code.

6.17.10Each of the Property Owners possesses valid owner’s policy title insurance from title insurers of recognized financial responsibility on each of the Individual Properties in amounts not less than the original purchase price of such properties, and such title insurance is in full force and effect.

6.17.11Except as set forth in Schedule 6.17.11, as to any of the Individual Properties, there is not pending the exercise of any Economic Discontinuance Rights by any tenants.

6.18Use of Proceeds.  The proceeds of the Loan shall be used solely and exclusively as provided in Section 1.3.  No portion of the proceeds of the Loan shall be used by the Borrower directly or indirectly, and whether immediately, incidentally or ultimately (i) to purchase or carry any margin stock or to extend credit to others for the purpose thereof or to repay or refund indebtedness previously incurred for such purpose, or (ii) for any purpose which would violate or be inconsistent with the provisions of regulations of the Board of Governors of the Federal Reserve System including, without limitation, Regulations G, T, U and X thereof.

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6.19Insurance.

6.19.1(i) The Individual Properties are insured by insurers of recognized financial responsibility against such losses and risks in compliance with the requirements of the Leases and as set forth in Exhibit E, hereto, such insurance maintained by the tenants under the Leases; (ii) the Borrower has a monitoring system in place to periodically verify whether the tenants under the Leases have in place insurance as required by the applicable Lease; and (iii) the Borrower has satisfactory liability insurance in favor of the Borrower and each of the Borrower Subsidiaries in compliance with the requirements of the Agent in effect on the date hereof.

6.20Deferred Compensation and ERISA.  None of the Borrower and/or any of the other Loan Parties has any pension, profit sharing, stock option, insurance or other arrangement or Plan for employees covered by ERISA except as may be designated to Agent in writing by the Borrower from time to time and no Reportable Event has occurred and is now continuing with respect to any such ERISA Plan.  The granting of the Loan, the performance by the Borrower and/or of any of the other Loan Parties of their respective obligations under the Loan Documents and/or such Persons’ conducting of their respective operations do not and will not violate any provisions of ERISA.

6.21No Default.  There is no Default on the part of the Borrower or any of the other Loan Parties under this Agreement or any of the other Loan Documents and no event has occurred and is continuing which would constitute a Default under any Loan Document.

6.22Other Loan Parties’ Warranties and Representations.  The Borrower has no reason to believe that any warranties or representations made in writing by any of the other Loan Parties to the Agent or any of the Lenders are untrue, incomplete or misleading in any material respect.

ARTICLE 7

AFFIRMATIVE COVENANTS. 

The Borrower covenants and agrees that from the date hereof and so long as any indebtedness is outstanding hereunder, or any of the Loan or other Obligations remains outstanding, as follows:

7.1Notices.  The Borrower shall, with reasonable promptness, but in all events within five (5) days after it has actual Knowledge thereof, notify Agent and each of the Lenders in writing of the occurrence of any act, event or condition which constitutes a Default or Event of Default under any of the Loan Documents.  Such notification shall include a written statement of any remedial or curative actions which the Borrower proposes to undertake and/or to cause any of the other Loan Parties to undertake to cure or remedy such Default or Event of Default.

7.2Financial Statements; Reports; Officer’s Certificates.  The Borrower shall furnish or cause to be furnished to Agent as set forth herein from time to time, the following financial statements, reports, certificates, and other information, all in form, manner of presentation and substance acceptable to Agent and each of the Lenders:

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7.2.1Annual Statements.

(a)Within one hundred twenty (120) days after the close of each fiscal year of the Borrower, the consolidated statements of financial condition of the Borrower and all non-consolidated Borrower Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and statements of changes in financial position for such fiscal year, in each case, commencing with the Fiscal Year ending December 31, 2005, setting forth comparative for the preceding fiscal year, internally prepared in accordance with GAAP, all in form and manner of presentation acceptable to Agent, such financial statements to include and to be supplemented by such detail and supporting data and schedules as Agent may from time to time reasonably determine, together with an Officer’s Certificate from the Borrower certifying that such financial statements are true, accurate, and complete in all material respects and that no Default or Event of Default has occurred and is continuing.

(b)Periodic Statements.  Within forty-five (45) days after the close of each calendar quarter (including the quarter ending on December 31) commencing March 31, 2005, the following: (i) the consolidated statements of financial condition of the Borrower and all non-consolidated Borrower Subsidiaries, internally prepared in accordance with GAAP, consistently applied, as at the end of such quarterly period and the related consolidated statements of income and retained earnings and statements of changes in financial position for such quarterly period and for the elapsed portion of the Fiscal Year ended with the last day of such quarterly period, in each case commencing with the Fiscal Year ending December 31, 2004, setting forth comparative figures for the related periods in the prior fiscal year, subject to normal year-end audit adjustments, all in form and manner of presentation acceptable to Agent, such financial statements to include and to be supplemented by such detail and supporting data and schedules as Agent may from time to time reasonably determine, (ii) an Officer’s Certificate from the Borrower certifying that such financial statements are true, accurate, and complete in all material respects and that no Default or Event of Default has occurred and is continuing, and (iii) an updated Cash Flow Projection specifically identifying, without limitation, (a) any changes to the Cash Flow Projections provided in then prior Officer’s Certificate and (b) any Distributions by Borrower Subsidiaries projected during the next one-hundred and eighty (180) days.

(c)Compliance Certificates.  Within forty-five (45) days after the close of each quarterly Accounting period in each Fiscal Year of the Borrower commencing March 31, 2005, Compliance Certificates in the form of Exhibit G, annexed hereto, together with an Officer’s Certificate from the Borrower providing and otherwise certifying with respect to the following:

(i)the compliance with the Financial Covenants and the scheduled principal payments provided for in Section 2.5.1, with such supporting detail as is deemed necessary by the Agent to verify the calculations incorporated therein;

(ii)any changes to the Lease Schedule, including, without limitation, specific identification of (a) any Leases which will expire

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within one (1) calendar year from the date of the respective Officer’s Certificate and the applicable dates and conditions by and upon which such term may be extended, (b) any material defaults then existing under any Lease of which the Borrower has Knowledge not included in a prior Officer’s Certificate or Lease Schedule, (c) any Leases as to which the term thereof has expired since the date of the then prior Officer’s Certificate, without the extension thereof, of which the Borrower has Knowledge, (d) any Leases as to which the tenant has vacated the subject premises since the date of the then prior Officer’s Certificate, of which the Borrower has Knowledge, (e) any Leases or commitments to lease entered into since the date of the then prior Officer’s Certificate, and (f) an updated summary of any pending exercise by any tenant under a Lease of Economic Discontinuance Rights from the date of the then prior Officer’s Certificate, including, without limitation, (i) the identity of the subject Individual Property, (ii) the date by which the relevant Property Owner must reject the Rejectable Offer, and (iii) the current calculation of the applicable Rejection Test with such supporting detail as is deemed necessary by the Agent to verify the calculations incorporated therein;

(iii)any changes to the Ground Lease Extension Option Schedule, including, without limitation, (a) specific identification of all Ground Lease Extension Options (i) which have been exercised since the date of the then prior Officer’s Certificate, and (ii) as to which the final date for exercising such Ground Lease Extension Option is within the twelve (12) months following the date of the Officer’s Certificate (including all applicable dates by which notices must be provided in connection with the exercise of same), and (b) any defaults then existing under any Ground Lease not included in a prior Officer’s Certificate or Ground Lease Extension Option Schedule;

(iv)any changes to the Remainder Ground Lease Options Schedule, including, without limitation, (a) specific identification of all Remainder Ground Lease Options (i) which have been exercised since the date of then prior Officer’s Certificate and (ii) as to which the final date for exercising such remainder Ground Lease Option is within the twelve (12) months following the date of the Officer’s Certificate (including all applicable dates by which notices must be provided in connection with the exercise of same), (b) any defaults then existing under any Ownership Interest Agreement relating to a Remainder Ground Lease Option not included in a prior Officer’s Certificate or Remainder Ground Lease Option Schedule, and (c) a listing of any remainderman interests or ground lessor interests in Ground Leases (i) acquired by the Borrower, any of the Borrower Subsidiaries and/or any of the other Loan Parties since the date of the then prior Officer’s Certificate, together with specific detail as to the nature of the interest acquired and the Person to whom the interest was transferred, and (ii) as to which an agreement has been entered into since the date of the then prior Officer’s Certificate for the acquisition thereof

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by the Borrower, the Borrower Subsidiaries, and/or any of the other Loan Parties, together with the primary terms of such agreement;

(v)any changes to the Mortgage Debt Schedule, including, without limitation, (a) any prepayments made on any Mortgage Debt since the date of the then prior Officer’s Certificate, (b)  specific identification of all Mortgage Debt which matures within the twelve (12) months following the date of the Officer’s Certificate, (c) any refinancing of such Mortgage Debt which has occurred (or for which an application has been made or a loan commitment received) since the date of the then prior Officer’s Certificate, together with a summary of the use and disbursement of the proceeds thereof, and (d) any defaults then existing under any Mortgage Debt not included in a prior Officer’s Certificate or Mortgage Debt Schedule, with such supporting detail as is deemed necessary by the Agent to verify the calculations incorporated therein;

(vi)A listing of any Individual Properties (a) sold by the applicable Property Owner since the date of then prior Officer’s Certificate, together with specific detail as to the use and disbursement of the proceeds of the sale, and (b) as to which an agreement has been entered into since the date of the then prior Officer’s Certificate for the sale thereof, together with the primary terms of such agreement;

(vii)a listing of any material assets acquired, or as to which an agreement to acquire has been entered into, by the Borrower, the Borrower Subsidiaries, and/or any of the other Loan Parties since the date of then prior Officer’s Certificate, together with the primary terms of such acquisition or agreement;

(viii)except as disclosed in such Officer’s Certificate, to the extent of the knowledge of such officer, a certification that all insurance premiums in respect of insurance policies covering the properties owned (directly or indirectly) by the Property Owners have been paid or are not past due more than sixty (60) days, all debt service payments in respect of any Mortgage Debt of any Property Owner have been made and all real estate taxes and other impositions relating to any Property Owner or its related assets have been paid; and

(ix)a summary of the status of any pending insurance claims or condemnation award proceedings.

(d)Data Requested.  Within a reasonable period of time and from time to time such other financial data or information as Agent may reasonably request with respect to the Individual Properties, the Borrower, the Borrower Subsidiaries, and/or any of the other Loan Parties, including, but not limited to, rent rolls, aged receivables, aged payables, leases, budgets, forecasts, reserves, cash flow projections, deposit accounts, mortgage information, physical condition of the Individual Properties and pending lease proposals.

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(e)Tax Returns.  To the extent prepared and filed, upon Agent’s request, copies of all federal and state tax returns of the Borrower and any of the other Loan Parties.

(f)Lease Notices.  Concurrently with the giving thereof, and within ten (10) Business Days of receipt thereof, copies of all notices, other than routine correspondence, given or received by the Borrower, FT-FIN GP, or any Property Owner with respect to any Lease.

(g)Mortgage Notices.  Concurrently with the giving thereof, and within ten (10) Business Days of receipt thereof, copies of all notices, other than routine correspondence, given or received by the Borrower, FT-FIN GP, or any Property Owner with respect to any Mortgage Debt.

(h)Ground Lessor/Remainder Interest Notices.  Concurrently with the giving thereof, and within ten (10) Business Days of receipt thereof, copies of all notices, other than routine correspondence, given or received by Borrower, FT-FIN GP or any Property Owner with respect to any Ownership Interest Agreement, Ground Lease Extension Option, and/or Remainder Ground Lease Option.

(i)Entity Notices. Concurrently with the issuance thereof, copies of all written notices (excluding routine correspondence) given to the partners, owners, stockholders, and/or members, respectively, of the Borrower and/or any of the other Loan Parties.

(j)Notice of Distributions.  Concurrently with the giving thereof, and within ten (10) Business Days of receipt thereof, copies of all notices of Distributions to the extent given by any Borrower Subsidiaries to the Borrower and/or FT-FIN GP.  The Borrower shall provide the Agent with immediate written notice in the event that the Borrower or any Borrower Subsidiaries determines (or reasonably should be able to determine) that the Cash Flow Projections are no longer accurate and could reasonably be expected to have a Material Adverse Effect.

(k)Property Acquisition or Sale.  Within ten (10) Business Days of receipt thereof, copies of all proposed contracts, agreements, or offers in any way relating to a proposed sale or acquisition of any material asset by the Borrower and/or any of the other Loan Parties, along with a pro forma Compliance Certificate with respect to the Financial Covenants after giving effect to the proposed transaction.

(l)Notices Regarding Payment Direction Letters.  Within ten (10) Business Days of receipt thereof, copies of all notices (excluding routine correspondence) received by the Borrower, FT-FIN GP or any Borrower Subsidiary who has agreed to the direction of the payment of funds as provided for in a Payment Direction Letter.

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(m)Notice of Termination of Payment Direction Letter. Promptly, and in any event within ten (10) Business Days after an officer of the Borrower obtains Knowledge thereof, written notice of the termination of any Payment Direction Letter, together with evidence of the satisfactory reinstatement or replacement thereof in accordance with the terms and conditions hereof.

(n)Third Party Default Notices.  Immediately upon notice or receipt thereof by the Borrower and/or any of the other Loan Parties, copies of all notices of default, other non-performance, and/or exercise (or intended exercise) relating in any way to any one or more of the Related Documents.

(o)Notice of Litigation. Promptly, and in any event within ten (10) Business Days after the Borrower obtains Knowledge thereof, written notice of any pending or, to the best of the Borrower’s Knowledge, threatened action, suit or proceeding at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority by any entity (private or governmental) relating in any way to the Loan, the transactions contemplated in the Loan Documents (including, without limitation, with regard to all Distributions), the Related Documents, or the transactions contemplated in connection with the Acquisition or any documentation executed in connection therewith, or relating to the Borrower and/or any of the other Loan Parties, which could reasonably be expected to have a Material Adverse Effect.

(p)Notice of Hazardous Materials  Promptly, and in any event within ten (10) Business Days after the Borrower obtains Knowledge thereof, written notice of (i) any Release (as defined in the Environmental Indemnity) or Threat of Release (as defined in the Environmental Indemnity) of Hazardous Materials on, in, under or affecting all or any portion of any Individual Property or (ii) the violation of any Environmental Law, in each case which could reasonably be expected to have a Material Adverse Effect.

(q)Net Cash Flow.  Within fifteen (15) days after the end of each calendar quarter, a certification of the Net Cash Flow for the quarter then ended.

7.3Existence.  The Borrower shall do or cause to be done all things necessary to (i) preserve, renew and keep in full force and effect (x) the partnership, company or corporate existence, as applicable, of FT-FIN GP and the Borrower Subsidiaries and (y) the material rights, licenses, permits and franchises of FT-FIN GP and the Borrower Subsidiaries, (ii) comply with all laws and other Legal Requirements applicable to it and its assets, business and operations and those of FT-FIN GP and the Borrower Subsidiaries, and (iii) to the extent applicable, at all times maintain, preserve and protect all material franchises and trade names and all the remainder of its property used or useful in the conduct of its business, and keep its assets in good working order and repair, ordinary wear and tear excepted, and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto.

7.4Payment of Taxes.  The Borrower shall duly pay and discharge, and cause FT-FIN GP and each Borrower Subsidiary to duly pay and discharge, before the same shall become overdue, all taxes, assessments, impositions, and other governmental charges payable by it or

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with respect to the Individual Properties, to the extent that same are not paid by the tenants under the respective Leases, except if contested in accordance with Section 9.1.

7.5Insurance; Casualty, Taking.

7.5.1The Borrower shall at all times maintain or cause the appropriate Person to maintain in full force and effect the following insurance: (i) to the best of the Borrower’s Knowledge, the Individual Properties shall be insured by insurers of recognized financial responsibility against such losses and risks in compliance with the Leases and the requirements set forth in Exhibit E hereto, such insurance maintained by the tenants under the Leases; (ii) the Borrower shall have a monitoring system in place to periodically verify whether the tenants under the Leases have in place insurance as required by the applicable Lease; and (iii) the Borrower shall have satisfactory liability insurance in favor of the Borrower and each of the Borrower Subsidiaries in compliance with the requirements in effect of the date hereof.

7.5.2In the event of any damage or destruction to any Individual Property (or to the extent now or hereafter applicable, any Collateral) by reason of fire or other hazard or casualty, the Borrower shall give immediate written notice thereof to Agent. If there is any condemnation for public use of any Individual Property (or to the extent now or hereafter applicable, any Collateral), the Borrower shall give immediate written notice thereof to Agent. Further, the Borrower shall upon the request of the Agent provide to the Agent with a report as to the status of any insurance adjustment, condemnation claim, or restoration resulting from any casualty or taking.

7.6Inspection.  The Borrower shall cause the Borrower Subsidiaries to permit the Agent and the Lenders and its/their agents, representatives and employees to inspect the Individual Properties and the Collateral at reasonable hours upon reasonable notice, except to the extent expressly prohibited or otherwise limited in the subject Leases.

7.7Loan Documents.  The Borrower (i) shall observe, perform and satisfy all the terms, provisions, covenants and conditions to be performed by it under, and to pay when due all costs, fees and expenses, and other Obligations of the Borrower to the extent required under, the Loan Documents and (ii) shall cause the other Borrower Subsidiaries and other Loan Parties to observe, perform and satisfy all the terms, provisions, covenants and conditions to be performed by such Person under, and to pay when due all costs, fees and expenses, and other Obligations to the extent required under, the Loan Documents.

7.8Further Assurances.  The Borrower shall and shall cause the Borrower Subsidiaries and other Loan Parties to execute and deliver to the Agent and the other Lenders such documents, instruments, certificates, assignments and other writings, and do such other acts, necessary or desirable in the reasonable judgment of the Agent, to evidence, preserve and/or protect the Collateral at any time securing or intended to secure the Obligations and do and execute all and such further lawful acts, conveyances and assurances as the Agent may reasonably require for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents.

7.9Books and Records.  The Borrower shall and shall cause FT-FIN GP and the Borrower Subsidiaries and other Loan Parties to keep and maintain in accordance with GAAP

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(or such other Accounting basis reasonably acceptable to the Agent), proper and accurate books, records and accounts reflecting all of the financial affairs of the Borrower and such other Persons and all items of income and expense in connection with their respective business and operations and in connection with any services, equipment or furnishings provided in connection with the operation of the business of the Borrower and such Persons, whether such income or expense is realized thereby or by any other Person.  The Agent shall have the right, not more than once each quarter (unless an Event of Default shall have occurred and be continuing in which case as often as the Agent shall determine), during normal business hours and upon reasonable notice, to examine such books, records and accounts of the Borrower, FT-FIN GP, and the other Loan Parties at the office of the Person maintaining such books, records, and accounts and to make such copies or extracts thereof as the Agent shall desire. The Borrower shall maintain all of its business records at the address specified at the beginning of this Agreement, subject to change upon advance written notification to the Agent.  The Agent may discuss the financial and other affairs of the Borrower and/or, FT-FIN GP, and the other Loan Parties with any of their respective partners, owners, and any accountants (as to accountants, prior to the occurrence of an Event of Default and following the cure of any Event of Default, upon prior approval of the Borrower, not to be unreasonably withheld, and at the cost and expense of the Agent and the Lenders) hired by the Borrower, it being agreed that Agent and each of the Lenders shall use best efforts to not divulge information obtained from such examination to others except in connection with Legal Requirements and in connection with administering the Loan, enforcing its rights and remedies under the Loan Documents and in the conduct, operation and regulation of its banking and lending business (which may include, without limitation, the transfer of the Loan or of participation interests therein).  Any assignee or transferee of the Loan, co-lender, or any holder of a participation interest in the Loan shall be entitled to deal with such information in the same manner and in connection with any subsequent transfer of its interest in the Loan or of further participation interests therein.

7.10Business and Operations.  The Borrower shall (and shall cause FT-FIN GP and the Borrower Subsidiaries to) (i) continue to engage in the type of businesses presently conducted by them as of the Closing Date, respectively, as and to the extent the same are necessary for the ownership of, and preservation of the value and utility of, the Collateral and the Individual Properties, and (ii) be qualified to do business and in good standing under the laws of each jurisdiction, and otherwise to comply with all Legal Requirements, as and to the extent the same are required for the ownership, maintenance, management and operation of the assets of such Person except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.

7.11Title.  The Borrower shall and shall cause the Borrower Subsidiaries to warrant and defend (x) the title to each item of Collateral owned by such Person and every part thereof, subject only to the Liens (if any) permitted hereunder, (y) the validity and priority of the Liens and security interests held by the Agent pursuant to the Loan Documents, in each case against the claims of all Persons whomsoever, and (z) the title to and in the Individual Properties, subject only to the Mortgage Debt and any liens granted to the Agent.  The Borrower shall be responsible to reimburse Agent and the Lenders for any losses, costs, damages or expenses (including reasonable attorneys’ fees and court costs) incurred by the Agent and/or any of the Lenders if an interest in any item of Collateral, other than as permitted hereunder, is claimed by another Person.

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7.12Estoppel.  The Borrower shall (and shall cause the Borrower Subsidiaries to), within ten (10) days after a request therefor from the Agent, which request shall not be made by Agent more than once each quarter during each Fiscal Year, furnish to the Agent a statement, duly acknowledged and certified, setting forth (i) the amount then owing by the Borrower in respect of the Obligations, (ii) the date through which interest on the Loan has been paid, (iii) any offsets, counterclaims, credits or defenses to the payment by the Borrower or any Borrower Subsidiary to the Obligations and (iv) whether any written notice of Default from Agent to the Borrower or any of the Borrower Subsidiaries is then outstanding and acknowledging that this Agreement and the other Loan Documents are in full force and effect and unmodified, or if modified, giving the particulars of such modification.

7.13ERISA.  The Borrower shall (and shall cause each of FT-FIN GP and the Borrower Subsidiaries to) as soon as possible and, in any event, within ten (10) days after the Borrower, FT-FIN GP, any Borrower Subsidiary or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following which could have or reasonably be expected to have a Material Adverse Effect, deliver to Agent a certificate of the an executive officer of the Borrower setting forth details as to such occurrence and the action, if any, that the Borrower, FT-FIN GP, or applicable Borrower Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by such the Borrower, FT-FIN GP, Borrower Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto:  (i) that a Reportable Event has occurred; (ii) that an accumulated funding deficiency has been incurred or an application may be or has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan; (iii) that a contribution required to be made to a Plan has not been timely made; (iv) that a Plan has been or may be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; (v) that a Plan has an Unfunded Current Liability giving rise to a lien under ERISA or the Code; (vi) that proceedings may be or have been instituted to terminate or appoint a trustee to administer a Plan; (vii) that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; (viii) that the Borrower, FT-FIN GP, Borrower Subsidiary, or ERISA Affiliate will or may incur any liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA; (ix) or that the Borrower, FT-FIN GP, or Borrower Subsidiary may incur any material liability pursuant to any employee welfare benefit plan (as defined in Section 3(l) of ERISA) that provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any employee pension benefit plan (as defined in Section 3(2) of ERISA).  The Borrower shall (and shall cause FT-FIN GP and the Borrower Subsidiaries to) deliver to Agent a complete copy of the annual report (Form 5500) of each Plan required to be filed with the Internal Revenue Service.  In addition to any certificates or notices delivered to Agent pursuant to the first sentence hereof, copies of any material notices received by the Borrower, FT-FIN GP, a Borrower Subsidiary, or any ERISA Affiliate with respect to any Plan shall be delivered to Agent no later than ten (10) days after the date such report has been filed with the Internal Revenue Service or such notice has been received by Borrower, FT-FIN GP, or Borrower Subsidiary or ERISA Affiliate, as applicable.

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7.14Depository Accounts.  The Borrower shall (and shall cause each of the Borrower Subsidiaries and the other Loan Parties) to (i) maintain all operating and other depository accounts, if any, with the Agent (or any successor thereto) (singly and collectively, including the Depository Accounts, the “Borrower Accounts”), the Borrower Accounts as of the date hereof listed on Exhibit R, annexed hereto, unless otherwise agreed by Agent in writing, (ii) maintain a minimum of one depository account for each such Person) with the Agent (or any successor thereto) (singly and collectively, the “Depository Accounts”), unless otherwise agreed by Agent in writing, and (iii) execute and deliver such Cash Management Agreements as Agent shall deem customary and appropriate to provide for terms and conditions satisfactory to the Agent with respect to the use and disbursement of funds in any the Borrower Account.  Each of the Borrower Accounts shall be subject to the Pledge and Security Agreement.

7.15Cash Flow; Payment Direction Letters.

7.15.1The Borrower agrees that appropriate procedures satisfactory to the Agent will be put in place such that (i) any Distributions by any Borrower Subsidiary payable to the Borrower shall be directly deposited in the designated Depository Account in the name of the Borrower, and (ii) any other Distributions or other revenues or payments received by the Borrower, FT-FIN GP, or any Borrower Subsidiary or any other Loan Party shall be directly deposited in a designated Depository Account in the name of such Person.

7.15.2The Borrower agrees that appropriate procedures satisfactory to the Agent will be put in place such that subject to any limitations provided for with respect to any Mortgage Debt: (i) any Distributions and other revenues due or payable to FT-FIN GP and/or any Borrower Subsidiary shall be paid directly in to the designated Depository Account in the name of the Borrower or as otherwise directed by the Agent, and (ii) any Distributions by any Borrower Subsidiary payable to the Borrower and/or FT-FIN GP shall be directly deposited in the designated Depository Account in the name of the Borrower or as otherwise directed by the Agent.  Further, subject to any limitations provided for with respect to any Mortgage Debt, after the occurrence and during the continuance of an Event of Default, Agent shall have the right to receive any and all such Distributions or other revenues and make application thereof to the Obligations.

7.15.3The use and disbursement of all funds in the Depository Accounts and the Borrower Accounts shall be subject to the terms and provisions hereof and the Cash Management Agreement.

7.15.4The Borrower agrees that to the extent that the Borrower, FT-FIN GP, any Borrower Subsidiary or any other Loan Party receives directly any Distributions or revenues or other payments which are required to be deposited as provided for herein, the Borrower shall, and shall cause such Person to deposit such funds in the applicable designated Depository Account as directed by the Agent.

7.15.5The Borrower shall (and shall cause FT-FIN GP and the Borrower Subsidiaries and other Loan Parties) to maintain in place during the term of the Loan such direction letters and agreements as the Agent may from time to time require in order to effectuate the terms and provisions hereof relating to the management of the cash flow of such Persons (together with the Consents (to the extent that the Consents provide for

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the management of cash flow), the “Payment Direction Letters”), including, without limitation, and provided that such Payment Direction Letters are consistent with this Article 7, including, without limitation, the following:

(a)to each tenant under a Lease for any Individual Property to pay rent, purchase prices, and any other amounts payable under such Lease (a) to the holder (or servicer) of the First Mortgage Debt thereon, or (b) if there exists no First Mortgage Debt on an Individual Property, to the designated Depository Account of such Property Owner;

(b)for each Property Owner (a) with each holder (or servicer) of the First Mortgage Debt on any Individual Property to pay excess proceeds after debt service to the designated Depository Account in the name of the applicable Borrower Subsidiary or, subject to the terms of Section 7.15, as otherwise may be directed by the Agent, or (b) if there exists no First Mortgage Debt on an Individual Property, to pay excess proceeds after debt service to the designated Depository Account of such Property Owner;

(c)with the Borrower Subsidiary to pay any Distribution or other amount due to the Borrower or FT-FIN GP into a designated Depository Account in the respective Person’s name or, subject to the terms of Section 7.15, as otherwise directed by the Agent;

(d)after the occurrence and during the continuance of an Event of Default, such additional Payment Direction Letters so as to direct payment of all funds due, or Distributions payable, to the Borrower, FT-FIN GP, and any Borrower Subsidiaries into the designated Depository Account in the name of the Borrower or, subject to the terms of Section 7.15, as otherwise directed by the Agent; and

(e)such other Payment Direction Letters as Agent may direct from time to time in accordance with the provisions of this Agreement and the other Loan Documents.

7.15.6the Borrower shall (and shall cause FT-FIN GP, and the other Loan Parties to) keep in effect all Payment Direction Letters, including, without limitation, any replacements, substitutions, or renewals thereof as the Agent shall reasonably deem appropriate from time to time.

7.16Distributions.

7.16.1Subject to the requirements set forth in clause (h)(xvi) of the definition of “Single-Purpose Entity” contained herein, the Borrower shall cause the Borrower Subsidiaries to make the maximum amount of all Distributions to the Borrower and FT-FIN GP, respectively, at the earliest opportunity permitted under the respective Formation Documents of each of the Borrower Subsidiaries, but not less often than quarterly or within three (3) Business Days of the receipt of any funds relating to a Mandatory Prepayment Event and shall take all actions necessary (and as may be directed by the Agent) to preserve and maintain the Distribution scheme provided for herein.

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7.16.2the Borrower shall cause the Borrower Subsidiaries to deposit all Distributions made or payable to the Borrower and/or FT-FIN GP in a designated Depository Account in the name of the Borrower or, subject to the terms of Section 7.15, as otherwise directed by the Agent.

7.17Exercise of Ground Lease Extension Options.  The Borrower shall (and shall cause the Property Owners, as applicable, to) provide evidence to the Agent of the due exercise of each and every Ground Lease Extension Option at least thirty (30) days prior to the last date for such exercise (being no less than ninety (90) days prior to the subject Ground Lease term expiration date).  In the event that Borrower fails to provide such evidence to the Agent in a timely fashion, the Agent shall be authorized to exercise the rights provided for in the Escrow Agreement Respecting Ground Lease Extensions with respect thereto.  Borrower shall provide the Agent with all instruments, documents, and agreements requested by the Agent with respect to foregoing provisions of this Section 7.17.

7.18Costs and Expenses.  The Borrower shall pay all costs and expenses (excluding salaries or wages of employees of Agent) reasonably incurred by Agent in connection with the implementation and syndication of the Loan and the administration of the Loan, and reasonably incurred by the Agent or any of the Lenders in connection with the enforcement of the Agent’s and Lenders’ rights under the Loan Documents, including, without limitation, legal fees and disbursements, appraisal fees, inspection fees, plan review fees, travel costs and fees and out-of-pocket costs of independent engineers and consultants.  The Borrower’s obligations to pay such costs and expenses shall include, without limitation, all attorneys’ fees and other costs and expenses for preparing and conducting litigation or dispute resolution arising from any breach by the Borrower or the Loan Parties of any covenant, warranty, representation or agreement under any one or more of the Loan Documents.  Unless an Event of Default has occurred and is then continuing, the Agent shall use its best efforts to notify the Borrower prior to the incurrence of any such cost or expense if the aggregate amount of such costs and expenses in any one calendar year will exceed $10,000.00; provided, however, that the failure shall provide such notice shall not affect in any manner whatsoever on the Borrower’s obligations hereunder.

7.19Appraisals

7.19.1Appraisal. Agent shall have the right at its option, from time to time, to order an appraisal of one or more of the Individual Properties prepared at Agent’s direction by an appraiser selected by Agent (the “Appraisal”).  An appraiser selected by Agent shall be an MAI member with appropriate experience appraising commercial properties in the respective area(s) of the Individual Properties and otherwise qualified pursuant to provisions of applicable laws and regulations under and pursuant to which Agent operates).

7.19.2Costs of Appraisal.  The Borrower shall pay for the costs of (i) each Appraisal and (ii) each updated Appraisal only after the occurrence and during the continuance of an Event of Default; provided, however, Borrower shall not be required to pay for more than one appraisal per year, per property.

7.20Indemnification.  The Borrower shall at all times, both before and after repayment of the Loan, at its sole cost and expense defend, indemnify, exonerate and save harmless Agent and each of the Lenders and all those claiming by, through or under Agent and each of the

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Lenders (“Indemnified Party”) (to the extent not paid by the Borrower in this Section 7.20 or under the applicable provisions of this or any other Loan Document) against and from all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind whatsoever, including, without limitation, attorneys’ fees and experts’ fees and disbursements, which may at any time (including, without limitation, before or after discharge or foreclosure of the Security Documents) be imposed upon, incurred by or asserted or awarded against the Indemnified Party and arising from or out of:

(a)any liability for damage to person or property arising out of any violation of any Legal Requirement with respect to the Borrower, any other Loan Party or any Individual Property, or

(b)any and all liabilities, damages, penalties, costs, and expenses, relating in any manner to any brokerage or finder’s fees in respect of the Loan, or

(c)as a result of litigation that may arise in connection with Borrower’s activities, or

(d)the payment of any fees to any Loan Party or any manager or owner of the Borrower; or

(e)any act, omission, negligence or conduct at any Individual Property, or arising or claimed to have arisen, out of any act, omission, negligence or conduct of the Borrower or any tenant, occupant or invitee thereof which is in any way related to any Individual Property.

Notwithstanding the foregoing, an Indemnified Party shall not be entitled to indemnification in respect of claims arising from acts of its own gross negligence or willful misconduct to the extent that such gross negligence or willful misconduct is determined by the final judgment of a court of competent jurisdiction, not subject to further appeal, in proceedings to which such Indemnified Party is a proper party.

7.21Leasing Matters.

7.21.1Agent’s Approval Required.

(a)Except as provided for herein, the Property Owners shall not require the approval of the Agent or the Lenders for any proposed Lease of an Individual Property.

(b)Agent’s prior written approval shall be required in each instance as to any proposed Lease which represents the conversion of a substantially single-tenant Individual Property to a substantially multi-tenant Individual Property.

(c)Agent’s prior written approval shall be required in each instance as to any proposed Lease for 25,000 or more rentable square feet, but less than 75,000 rentable square feet, unless the Borrower evidences to the Agent that (x) the rental rate under the proposed Lease is equal to or greater than the rental rate for the first renewal term in the Lease in effect for the subject Individual Property

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as of the Closing Date and (y) the rating, if any, of the new tenant is equal to or higher than the rating for the tenant under such existing Lease.

(d)Agent’s and Required Lenders prior written approval shall be required in each instance as to any proposed Lease for 75,000 or more rentable square feet.

(e)For any Lease requiring approval hereunder, the approval shall relate to: (i) the economic and other terms of the Lease; (ii) each tenant under a proposed Lease; (iii) each guarantor, if any, of a tenant’s obligations under a proposed Lease; (iv) any modification or amendment to the Lease, if such modification or amendment relates to the amount of rent payable thereunder, the term of the Lease, the Economic Discontinuance Rights provided for therein, or any other term which may have a material impact on the value of the Individual Property or the rental payments due under the Lease; and (v) any termination, cancellation or surrender of the Lease.

7.21.2Borrower’s Requests.  Any request by the Borrower for an approval from Agent with respect to leasing matters shall be sent to the Agent and shall be accompanied, at a minimum, by the following: (i) the proposed lease or amendment or modification thereof complete with all applicable schedules and exhibits; (ii) a complete copy of any proposed guaranty; (iii) comprehensive financial information with respect to the proposed tenant and, if applicable, the proposed guarantor (as to new leases or amendments or modifications to existing leases involving material economic changes); and (iv) an executive summary of the terms and conditions of the proposed lease and, if applicable, the proposed guaranty.

7.21.3Response.  The Agent (and the Required Lenders, as applicable) shall act on requests from the Borrower for any approval required under Section 7.21 in a commercially reasonable manner and shall use commercially reasonable efforts to respond to any such request within (a) fifteen (15) Business Days for approvals required under Section 7.21(b) and (c) above, and (b) twenty (20) Business Days for approvals required under Section 7.21(d) above, in each instance following Agent’s receipt thereof with all required supporting information.  Agent’s response may consist of an approval or disapproval of the request, or a conditional approval thereof subject to specified conditions, or a request for further data or information, or any combination thereof.  If Agent (and the Required Lenders, as applicable) fails to respond to any such request within such prescribed time period, such request shall be deemed approved by the Agent (and the Required Lenders, as applicable).  In order to expedite the processing of requests for such approvals, the Borrower agrees to provide Agent with as much advance information as is possible in a commercially reasonable manner in advance of the Borrower’s formal request for an approval.

7.22Future Collateral Obligations.  The Borrower acknowledges that the determination by the Agent as to the Collateral was based upon an analysis of the assets owned by the Borrower and the Borrower Subsidiaries, and the assets owned by Loan Parties that are parties to the Security Documents. The Borrower shall (and shall cause each of the other Loan Parties to) agree to the following undertaking:

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7.22.1In the event that at any time the Borrower or any Loan Party acquires or obtains any interest in any asset relating to the Borrower or the business operations of the Borrower and the Borrower Subsidiaries, including, without limitation, (i) the fee, remainderman or ground lessor interest in any Individual Property, or (ii) any interest in any Mortgage Debt, the Borrower shall notify the Agent in writing and shall execute, or cause the applicable Person to execute, such documents as shall be reasonably requested by the Agent to confirm, or establish, that the interest so acquired or obtained is included within the Collateral and to effectuate the terms and provisions of this Agreement with respect thereto.

7.22.2The Borrower agrees that without the prior consent of the Agent, no other Loan Party will acquire or obtain any interest in any asset related to the operation, ownership or management of the Individual Properties or any of the other assets of the Borrower, FT-FIN GP, or the Borrower Subsidiaries unless such Person shall execute such documents as shall be reasonably requested by the Agent to confirm, or establish, that the interest so acquired or obtained is included within the Collateral (or if such Person cannot grant such security interest to the Agent, that the ownership interest in the entity holding such asset is included within the Collateral) and to effectuate the terms and provisions of this Agreement with respect thereto.

7.22.3In the event that at any time the Borrower shall establish or acquire a Person such that such Person is a Borrower Subsidiary, the Borrower shall notify the Agent in writing and shall execute, or cause the applicable Borrower Subsidiary to execute, such documents as shall be reasonably requested by the Agent to confirm, or establish, that the ownership interests in such Borrower Subsidiary and the assets of such Subsidiary (other than the assets of Property Owners) are included within the Collateral (subject to any existing Liens associated with any such asset) and to effectuate the terms and provisions of this Agreement with respect thereto.

7.22.4In the event that at any time the Borrower or any Borrower Subsidiary acquires or obtains any interest in any asset (other than an Individual Property), the Borrower shall notify the Agent in writing and shall execute, or cause the applicable Borrower Subsidiary to execute, such documents as shall be reasonably requested by the Agent to confirm, or establish, that the asset so acquired or obtained is included within the Collateral (subject to any existing Liens associated with any such asset) and to effectuate the terms and provisions of this Agreement with respect thereto (if the value of the asset acquired is less than $1,000,000.00, the notification and documentation will be provided annually).

7.22.5In the event that at any time due to the rejection of a Rejectable Offer, the applicable Lease terminates and the applicable Property Owner is the owner of an Individual Property without any Mortgage Debt thereon, at the option of the Agent, the Property Owner shall grant to the Agent, on behalf of the Lenders, a mortgage or deed of trust interest in and to said Individual Property; provided, however, in the event of a subsequent Permitted Refinance, or other refinance with the written consent of the Agent, of the Individual Property, the Agent shall release the said mortgage or deed of trust to the refinanced loan subject to the payment of the Borrower Mandatory Principal Payment relating thereto.

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7.22.6In the event that at any time due to the acceptance of a Rejectable Offer, a so called “Exchange Property” is conveyed to the applicable Property Owner so that it is the owner of the “Exchange Property” without any Mortgage Debt thereon, at the option of the Agent, the Property Owner shall grant to the Agent, on behalf of the Lenders, a mortgage or deed of trust interest in and to said Individual Property; provided, however, in the event of the subsequent Permitted Refinance, or other refinance with the written consent of the Agent, of the “Exchange Property”, the Agent shall release the said mortgage or deed of trust to the refinanced loan subject to the payment of the Borrower Mandatory Principal Prepayment relating thereto.

7.22.7Upon the payment in full of the Mortgage Debt on any Individual Property or if at any time any Individual Property is free and clear of all Mortgage Debt, at the option of the Agent, the applicable Property Owner shall grant to the Agent, on behalf of the Lenders, a mortgage or deed of trust interest in and to said Individual Property; provided, however, in the event of the subsequent Permitted Refinance, or other refinance with the consent of the Agent of the Individual Property, the Agent shall release the said mortgage or deed of trust to the refinanced loan subject to the payment of the Borrower Mandatory Principal Prepayment relating thereto.

7.22.8the Borrower agrees to provide to the Agent written notice of any of the events described in this Section 7.22 within five (5) Business Days of Knowledge thereof by the Borrower and further agrees to execute and deliver any documents as reasonably requested by the Agent to effectuate the terms and provisions hereof within five (5) Business Days of the Agent’s request therefor.

7.23Economic Discontinuance.

7.23.1Within ten (10) Business Days of receipt thereof, the Borrower shall cause the applicable Property Owner to provide to the Agent a copy of each Rejectable Offer received by any Property Owner, and concurrently with the giving thereof, and within five (5) Business Days of receipt thereof copies of any subsequent notices received with respect thereto, whether from the tenant exercising the Economic Discontinuance Rights, the applicable holder of the remainderman interest in the subject Individual Property, the applicable ground lessor, or any other Person.

7.23.2No later than forty-five (45) days prior to the last day for the Property Owner to reject the Rejectable Offer, the Borrower shall provide to the Agent in writing the determination by the Borrower as to whether it requests the approval of the acceptance or rejection of the Rejectable Offer, which notice shall include the Officer’s Certificate required in accordance with subsection 7.23.4 or 7.23.5, below, with supporting detail necessary for the Agent to verify the calculations incorporated therein.

7.23.3Except as otherwise provided for herein, in connection with the exercise by a tenant of the Economic Discontinuance Rights, the Borrower shall not, and shall cause each Property Owner not to grant, approve, reject or object to any requested consent or approval, including, without limitation, the acceptance or rejection of a so called “Exchange Offer”, without the written approval of the Agent.

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7.23.4Subject to the compliance with any applicable terms relating to the Mortgage Debt and, if applicable, the Ownership Interest Agreement, (i) the Borrower may accept any Rejectable Offer if (a) any required Mandatory Principal Prepayment relative thereto is to be paid to the Agent upon the consummation of the Economic Discontinuance Sale, (b) no Default or Event of Default is then occurring or will occur as a result of the consummation of the subject Economic Discontinuance Sale, (c) the Borrower is in compliance with the Financial Covenants and will not fail to be in compliance therewith as a result of the consummation of the subject Economic Discontinuance Sale, and (d) the Borrower submits to the Agent an Officer’s Certificate reflecting a pro-forma calculation that the Borrower will be in compliance with the Financial Covenants after the consummation of the subject Economic Discontinuance Sale, or (ii)the Borrower shall accept the Rejectable Offer if approved in writing by the Agent;

7.23.5Subject to the compliance with any applicable terms relating to the Mortgage Debt and, if applicable, the Ownership Interest Agreement, (i) the Borrower may reject any Rejectable Offer if (a) the Borrower is in compliance with the Rejection Test and will not fail to be in compliance therewith as a result of the consequences of the rejection of the Rejectable Offer, (b) no Default or Event of Default is then occurring or will occur as a result of the consequences of the rejection of the Rejectable Offer, (c) the Borrower submits to the Agent an Officer’s Certificate reflecting a pro-forma calculation that the Borrower will be in compliance with the Financial Covenants, and the Rejection Test after giving effect to the financial consequences of the rejection of the Rejectable Offer or (ii) the Borrower shall reject the Rejectable Offer if approved in writing by the Agent;

7.23.6As used herein, the “Rejection Test” shall mean that the aggregate outstanding Mortgage Debt on all ED Properties (assuming for purposes of this calculation, that the subject Rejectable Offer is rejected and included therein) shall be less than the ED Cash Flow.  The Term “ED Cash Flow” shall mean the projected Free Cash Flow for the succeeding twelve (12) month period, excluding (a) all cash flow from all ED Properties, and (b) all cash flow from any Individual Property after the date on which the existing term of the lease for such Individual Property expires, unless an applicable extension option shall have been exercised.

7.24Replacement Documentation.  Upon receipt of an affidavit of an officer of Agent as to the loss, theft, destruction or mutilation of the Note or any other Security Document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Note or other Security Document, the Borrower will issue, in lieu thereof, a replacement Note or other security document in the same principal amount and otherwise of like tenor upon receipt by the Borrower of a suitable indemnity.

7.25Other Covenants.  The Borrower hereby represents and warrants that no Collateral is in the possession of any third party bailee (such as at a warehouse).  In the event that the Borrower and/or any of the other Loan Parties, after the date hereof, intends to store or otherwise deliver any Collateral or other personal property in which the Agent has been granted a security interest to such a bailee, then the Borrower shall receive the prior written consent of the Agent and such bailee must acknowledge in writing that the bailee is holding such Collateral or such other personal property for the benefit of the Agent and the Lenders.

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7.26Related Documents.  The Borrower will, or will cause each Borrower Subsidiary and FT -FIN GP to, comply with the terms and provisions of all of the Related Documents.

7.27Single-Purpose Entity.

7.27.1the Borrower shall cause each Borrower Subsidiary to be a Single-Purpose Entity and to comply with the terms and provisions hereof with respect thereto.

7.28Financial Covenants.  The Borrower shall comply with the following financial covenants:

7.28.1Debt Service Coverage Ratios.

(a)Certain Definitions.

(i)“Calculation Date” shall mean the last day of each calendar quarter commencing with December 31, 2004.

(ii)“Calculation Period” shall mean each successive twelve (12) month period ending on a Calculation Date.

(iii)“Debt Service” shall mean (A) the sum of the aggregate regularly scheduled actual principal and interest paid or payable respecting all Debt of the Borrower and the Borrower Subsidiaries (but excluding any Mandatory Principal Prepayments and/or required principal amortization as provided in Section 2.5.1) during the subject Calculation Period, less (B) with respect to interest payments required with respect to the Loan, the amount paid to the Borrower or the Agent pursuant to any Interest Rate Protection Agreement relating to interest due during the subject Calculation Period.

(iv)“Debt Service Coverage” shall mean the ratio for the Calculation Period of:  (A) Net Cash Flow to (B) Debt Service.

(v)“ Net Cash Flow” shall mean the aggregate of (i) that portion of the Consolidated Net Cash Flow which is available to the Borrower, as Distributions or otherwise, from Borrower Subsidiaries (after payment of that portion of Consolidated Debt Service in connection with the First Mortgage Debt, and operating costs and expenses specifically attributable to the Borrower’s Subsidiaries), all of the foregoing as determined solely by the Agent in a manner consistent with the procedures and methods utilized by the Agent in analyzing the financial information provided by the Borrower prior to closing.

(vi)“Consolidated Debt Service Coverage” shall mean the ratio for the Calculation Period of:  (A) Consolidated Net Cash Flow to (B) Consolidated Debt Service.

(vii)“Consolidated Net Cash Flow” shall mean the sum of (i) (a) all cash revenues from the aggregate of all of the Borrower’s

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Subsidiaries, including, without limitation, all rents, management fees, ground rent, common area maintenance charges, insurance premium and tax reimbursements and proceeds from rental interruption insurance, less the aggregate of (ii) all operating costs and expenses (excluding Consolidated Debt Service) of the Borrower and the Borrower’s Subsidiaries related to such investments, amounts reserved for taxes and insurance, replacement reserves, and capital expenditures, all of the foregoing as reasonably determined by the Agent in a manner consistent with the procedures and methods utilized by the Agent in analyzing the financial information provided by the Borrower prior to closing.

(viii)“Consolidated Debt Service” shall mean (A) the sum of the aggregate actual principal and interest paid or payable respecting all Debt of the Borrower and the Borrower’s Subsidiaries (but excluding, for the purposes of this definition, debt service with respect any Mandatory Principal Prepayments and/or required principal amortization as provided in Section 2.5.1), on a consolidated basis, during the Calculation Period less (B) with respect to interest payments required with respect to the Loan, the amount paid to the Borrower or the Agent pursuant to any Interest Rate Protection Agreement relating to interest due during the subject Calculation Period.

(b)Minimum Consolidated Debt Service Coverage.  The Consolidated Debt Service Coverage for each Calculation Period determined on each Calculation Date shall be not less than 1.15:1.  The compliance with the Consolidated Debt Service Coverage covenant shall be tested by the Agent on the Calculation Date with results based upon the most recent Calculation Period results, as reasonably determined by the Agent in a manner consistent with the procedures and methods utilized by the Agent in analyzing the financial information provided by the Borrower prior to closing.  If such Consolidated Debt Service Coverage covenant shall not be satisfied on any Calculation Date, the Borrower shall prepay a sufficient amount of principal outstanding on the Loan such that if such principal reduction had been made on the first day of the Calculation Period the Consolidated Debt Service Coverage covenant would have been satisfied.  It shall be an Event of Default if the Borrower fails to make such a prepayment not later than the first to occur of: (i) ten (10) Business Days after notice from Agent to the Borrower properly requesting the payment, or (ii) if the Borrower has failed to give Agent sufficient reports to enable Agent to make the necessary calculations, forty-five (45) days following the applicable Calculation Date, provided the Borrower shall have an additional five (5) days to supply additional information to the Agent from the date the Agent notifies the Borrower that the initial reports have been deemed insufficient by the Agent.

(c)Minimum Debt Service Coverage.  The Debt Service Coverage for each Calculation Period determined on each Calculation Date shall be not less than 1.40:1.  The compliance with the Debt Service Coverage covenant shall be tested by the Agent on the Calculation Date with results based upon the most recent Calculation Period results, as reasonably determined by the Agent in a

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manner consistent with the procedures and methods utilized by the Agent in analyzing the financial information provided by the Borrower prior to closing.  If such Debt Service Coverage covenant shall not be satisfied on any Calculation Date, the Borrower shall prepay a sufficient amount of principal outstanding on the Loan such that if such principal reduction had been made on the first day of the Calculation Period the Debt Service Coverage covenant would have been satisfied.  It shall be an Event of Default if the Borrower fails to make such a prepayment not later than the first to occur of: (i) ten (10) Business Days after notice from Agent to the Borrower properly requesting the payment, or (ii) if the Borrower has failed to give Agent sufficient reports to enable Agent to make the necessary calculations, forty-five (45) days following the applicable Calculation Date, provided the Borrower shall have an additional five (5) days to supply additional information to the Agent from the date the Agent notifies the Borrower that the initial reports have been deemed insufficient by the Agent.

7.28.2Consolidated Leverage Ratio.  The quotient resulting from dividing (i) the sum of (1) the Borrower’s allocable share of the aggregate amount of all Debt respecting the Borrower’s Investments (including, without limitation, the outstanding balance of the Loan) by (ii) the aggregate of (1) Aggregate Investment Capitalization of the Borrower’s allocable share of all the Borrower’s Investments (the “Consolidated Leverage Ratio”), plus (2) plus all cash and cash equivalents of the Borrower and the Borrower Subsidiaries, all as reasonably determined by the Agent in a manner consistent with the procedures and methods utilized by the Agent in analyzing the financial information provided by the Borrower prior to closing, shall at all times be less than seventy-five (75%) percent.

The compliance with the Consolidated Leverage Ratio covenant shall be tested by the Agent on the Calculation Date with results based upon then current financial information, as reasonably determined solely by the Agent.  If such Consolidated Leverage Ratio covenant shall not be satisfied on any Calculation Date, the Borrower shall prepay a sufficient amount of principal outstanding on the Loan such that if such principal reduction had been made on the Calculation Date the Consolidated Leverage Ratio covenant would have been satisfied on such Calculation Date.  It shall be an Event of Default if the Borrower fails to make such a prepayment not later than the first to occur of: (i) ten (10) Business Days after Notice from Agent to the Borrower properly requesting the payment, or (ii) if the Borrower has failed to give Agent and each of the Lenders sufficient reports to enable Agent to make the necessary calculations, forty-five (45) days following the applicable Calculation Date, provided the Borrower shall have an additional five (5) days to supply additional information to the Agent from the date the Agent notifies the Borrower that the initial reports have been deemed insufficient by the Agent.

7.28.3Minimum Liquidity.  The sum of all of First Union’s Liquid Assets (excluding, however, the Liquid Assets of any Borrower Subsidiary as to which there exists a default or event of default on any Mortgage Debt of such Borrower Subsidiary) must at all times be at least $10,000,000.00, as evidenced by First Union’s annual and quarterly SEC filings.  If such Minimum Liquidity shall not be satisfied on any date of testing, First Union shall arrange for an infusion of Liquid Assets in an amount necessary

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to satisfy the requirements of this Section 7.28.3.  It shall be an Event of Default if First Union fails to arrange for any required additional Liquid Assets not later than ten (10) Business Days after Notice from Agent to the Borrower notifying the Borrower of the noncompliance.

7.28.4Minimum Net Worth.  Minimum Net Worth of First Union shall at all times be equal to or greater than $40,000,000.00.  “Minimum Net Worth” shall mean the consolidated net worth of First Union as evidenced by First Union’s annual and quarterly SEC reports.  The compliance with the Minimum Net Worth covenant shall be tested by the Agent on each Calculation Date.  If such Minimum Net Worth covenant shall not be satisfied on any Calculation Date, the Borrower shall prepay a sufficient amount of principal outstanding on the Loan such that if such principal reduction had been made on the Calculation Date the Minimum Net Worth covenant would have been satisfied on such Calculation Date.  It shall be an Event of Default if the Borrower fails to make such a prepayment not later than the first to occur of: (i) ten (10) Business Days after Notice from Agent to the Borrower properly requesting the payment, or (ii) if the Borrower has failed to give Agent and each of the Lenders sufficient reports to enable Agent to make the necessary calculations, forty-five (45) days following the applicable Calculation Date, provided the Borrower shall have an additional five (5) days to supply additional information to the Agent from the date the Agent notifies the Borrower that the initial reports have been deemed insufficient by the Agent.

ARTICLE 8

NEGATIVE COVENANTS. 

The Borrower covenants and agrees that from the date hereof and so long as any Obligations remain outstanding hereunder, the Borrower shall not (and shall not suffer or permit the other Loan Parties and/or the Borrower Subsidiaries to):

8.1No Changes to the Borrower and other Loan Parties.  Without the prior written consent of the Agent, which consent will not be unreasonably withheld, after not less than thirty (30) days’ prior written notice (with reasonable particularity of the facts and circumstances attendant thereto):(i) change its jurisdiction of organization, (ii) change its organizational structure or type, (iii) change its legal name, or (iv) change the organizational number (if any) assigned by its jurisdiction of formation or its federal employer identification number (if any).

8.2Restrictions on Liens.  Create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible, including, without limitation, the Individual Properties), whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse) or assign any right to receive income or permit the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute, or grant rights with respect to, or otherwise encumber or create a security interest in, such property or assets (including, without limitation, any item of Collateral) or any portion thereof or any other revenues therefrom or the proceeds payable upon the sale, transfer or other disposition of such property or asset or any portion thereof, or permit or suffer any such action to be taken, except the following (singly and collectively, “Permitted Liens”):

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8.2.1Liens created by the Loan Documents;

8.2.2Liens for taxes, assessments or other governmental charges not yet delinquent or which are being diligently contested in good faith and by appropriate proceedings, if (x) reasonable reserves in an amount not less than the tax, assessment or governmental charge being so contested shall have been established in a manner reasonably satisfactory to the Agent or deposited in cash (or cash equivalents) with the Agent to be held during the pendency of such contest, or such contested amount shall have been duly bonded in accordance with applicable law, (y) no risk of sale, forfeiture or loss of any interest in any Individual Property or the Collateral or any part thereof arises during the pendency of such contest and (z) such contest does not have and could not reasonably be expected to have a Material Adverse Effect;

8.2.3Liens in respect of property or assets imposed by law, which were incurred in the ordinary course of business and do not secure Debt, such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of any property or assets or have, and could not reasonably be expected to have, a Material Adverse Effect or (y) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien;

8.2.4Liens existing as of the Closing Date in favor of the holders of the Mortgage Debt;

8.2.5A Lien on an Individual Property which may be granted to secure a Permitted Refinance; and

8.2.6To the extent that the Borrower or any Borrower Subsidiary or any Loan Party acquires any other asset, any Lien as to which the acquisition of such asset is subject.

8.3Consolidations, Mergers, Sales of Assets, Issuance and Sale of Equity.  (i)  Dissolve, terminate, liquidate, consolidate with or merge with or into any other Person, (ii) issue, sell, lease, transfer or assign to any Persons or otherwise dispose of (whether in one transaction or a series of transactions) any portion of its assets (whether now owned or hereafter acquired), including, without limitation, any securities, membership or partnership interests, or other interests of any kind in any other Loan Party or Borrower Subsidiary, directly or indirectly (whether by the issuance of rights of, options or warrants for, or securities convertible into, any such security, membership or partnership interests or other interests of any kind), (iii) withdraw from or resign as general partner or managing member of any Person, including, without limitation, any withdrawal or resignation of: (x) Park Plaza as the sole member of the Borrower, or (y) FT-FIN GP as the general partner of a Borrower Partnership, (iv) permit another Person to merge with or into it, (v) acquire all or substantially all the capital stock, membership or partnership interests or assets of any other Person, or (vi) take any action which could have the effect, directly or indirectly, of diluting the economic interest of any Loan Party in any other Loan Party or Borrower Subsidiary; except the following:

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8.3.1Transfers pursuant to the Security Documents and other agreements in favor of Agent on behalf of the Lenders;

8.3.2Transfers or mergers to facilitate a Permitted Investment (to the extent required, the Agent shall release any security interest which it may have thereon to effectuate such transfer or merger);

8.3.3Mergers, consolidations, transfers and sales between and among Loan Parties of partnership interests, membership interests or capital stock, so long as after giving effect to any such merger, consolidation, transfer or sale, the Agent shall have a security interest, directly or through its security interest in the partnership interests, membership interests or capital stock of another Loan Party, in the partnership interests, membership interests or capital stock of each Borrower Subsidiary which is the survivor of such merger or consolidation or the recipient of such partnership interests, membership interests or capital stock transferred and/or sold, provided that in no event may any such merger, consolidation, transfer or sale cause a Change of Control or otherwise adversely affect the interests of the Agent and/or the Lenders, as determined solely by the Agent;

8.3.4Sales of any Individual Property in connection with an Economic Discontinuance Sale, subject to the terms and conditions ofSection 7.23 and payment of the required Mandatory Principal Prepayment related thereto (to the extent required, the Agent shall release any security interest which it may have thereon to effectuate such sale); provided, however, the sale of the Sherman, Texas, Individual Property to The Kroger Co. pursuant to the Rejectable Offer letter dated April 29, 2004 shall be deemed approved by the Agent and the Lenders;

8.3.5Sales of any Individual Property (other than in connection with an Economic Discontinuance Sale) or the ownership interest of the Borrower and/or FT-FIN GP in any Property Owner or, with the prior consent of the Agent; provided (a) the Agent receives the Mandatory Principal Payment required under Section 2.5.1(b) above, (b) the purchaser is an unaffiliated third party, and (c) the Borrower submits to the Agent an Officer’s Certificate reflecting a pro-forma calculation that such sale will not result in any decrease in or negatively impact the existing level of the Borrower’s performance under the Financial Covenants considering the consequences of the sale (to the extent required, the Agent shall release any security interest which it may have thereon to effectuate such sale);

8.3.6Sales or dispositions in the ordinary course of business of worn, obsolete or damaged items of personal property or fixtures which are suitably replaced (to the extent required, the Agent shall release any security interest which it may have thereon to effectuate such sale or disposition);

8.3.7Leases to the extent provided for herein;

8.3.8Transfers of ownership interests in the Borrower and/or FT-Fin GP to entities which are, directly or indirectly, wholly owned subsidiaries of First Union;  and

8.3.9Transactions, whether outright or as security, for which Agent’s prior written consent has been obtained.

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8.4Restrictions on Debt.  (i) Create, incur or assume any Debt, (ii) enter into, acquiesce, suffer or permit any amendment, restatement or other modification of the documentation evidencing and/or securing any Debt under which it is an obligor, or (iii) increase the amount of any Debt existing as of the Closing Date; except with respect to the following (singly and collectively, “Permitted Debt”):

8.4.1The Obligations;

8.4.2The following Debt existing as of the Closing Date in the amount disclosed to the Agent hereunder:

(a)the Mortgage Debt (none of which is recourse to the Borrower, except for the type of recourse obligation set forth in Section 8.4.4, below);

(b)Debt described in Schedule 8.4.2(b) annexed hereto;

8.4.3Any refinancing of any Mortgage Debt provided such refinancing is, unless otherwise approved by the Agent, at an interest rate equal to or less than the existing rate under the applicable First Mortgage and with a term and amortization schedule not in excess of the existing term and amortization schedule under the First Mortgage (a “Permitted Refinance”); provided, however, that no refinancing of any Debt otherwise permitted hereunder shall be allowed unless and until:

(a)the Agent has received at least thirty (30) days’ prior written notice of any intended refinancing, which notice shall detail with specificity the terms and conditions of any such refinancing and shall include complete copies of any loan application and loan commitment respecting such proposed refinancing, together with such other materials and information as the Agent shall reasonably request;

(b)no Default or Event of Default shall have occurred and then be continuing; and

(c)the Borrower has provided the Agent with such instruments, documents, agreements, certifications, and opinions as the Agent shall reasonably require with respect thereto.

8.4.4With respect to any Mortgage Debt, obligations under (i) limited guaranties by the Borrower as to usual and customary exceptions to non-recourse provisions (e.g., fraud and misappropriation of funds) provided that such limited guaranties are evidenced by documentation approved by the Agent and (ii) indemnifications by the Borrower as to usual Hazardous Materials issues relating to the subject Individual Property provided that such indemnifications are evidenced by documentation customary for transactions of that type;

8.4.5Indebtedness incurred in the ordinary course of business for the purchase of goods or services which are payable, without interest, within thirty (30) days of billing; and

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8.4.6Transactions, whether secured or unsecured, for which Agent’s prior written consent has been obtained.

8.5Respecting Individual Properties.  Permit or otherwise suffer to occur any event such that the representations and warranties of the Borrower set forth in Section 6.17 would be untrue or misleading in any material respect.

8.6Respecting Ground Lease Extension Options and Remainder Ground Lease Options.  Permit any of the Ground Lease Extension Options and/or Remainder Ground Lease Options, including, without limitation, any conditions precedent therein, to lapse, expire, or otherwise remain unexercised, or otherwise permit the expiration of any Ownership Interest Agreement, without the express prior written consent of the Agent.

8.7Other Business.  Enter into any line of business or make any material change in the nature of its business, purposes or operations, except as otherwise specifically permitted by this Agreement or the other Loan Documents.

8.8Change of Control.  Permit or otherwise suffer to occur any Change of Control.

8.9Forgiveness of Debt.  Cancel or otherwise forgive or release any Debt owed to it by any Person, except upon receipt of adequate consideration or as otherwise approved by the Agent.

8.10Affiliate Transactions.  On and after the Closing Date, enter into, or be a party to, any transaction with any Person who is an Affiliate of the Borrower, or any Borrower Subsidiary, or any Loan Party, except for (i) any property management contract for an Individual Property which is no longer subject to a triple net lease with a management fee not to exceed three (3%) percentof gross revenue per year, and (ii) any construction management contract for improvements to be made to any Individual Property or Permitted Investment acquisition with a construction management fee not to exceed five (5%) percent of the gross cost of the construction of improvements, provided that this Section 8.10 shall not apply to transactions between and among Loan Parties or to transactions between Loan Parties and Borrower Subsidiaries.

8.11Amendments; Terminations of Related Documents.  Enter into, acquiesce in, suffer or permit any amendment, restatement or other modification or termination of any of the Related Documents, without the express prior written consent of the Agent.

8.12ERISA.  Except for Code Section 401(k) plans, establish or be obligated to contribute to any Plan.

8.13Bankruptcy Filings.  File a petition under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property.

8.14Investment Company.  Become an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

8.15Holding Company.  Become a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of

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a “holding company,” within the meaning of the Public Utility Holding Company Act of 1935, as amended.

8.16Use of Proceeds.  Permit the proceeds of the Loan, or any other accommodation at any time made hereunder, to be used for any purpose which entails a violation of, or is inconsistent with, Regulation T, U or X of the Board of Governors of the Federal Reserve, or for any purpose other than those set forth in Section 1.3.

8.17Advances and Loan.  Except as contemplated herein in connection with the Loan Advances of the Obligations, directly or indirectly, lend money or credit or make advances to any Person.

8.18Distributions.  (i) Authorize, declare, or pay any Distributions on behalf of the Borrower, except for Permitted Distributions or (ii) take any action which would amend, modify, or terminate any Distribution due, or the terms of any Formation Document relating to Distributions due, to the Borrower, FT-FIN GP, or any Borrower Subsidiary.  The term “Permitted Distributions” shall mean, so long as no Default or Event of Default exists and is continuing, or would be created thereby, subject to requirements set forth in Section 9.2, hereof, any Distributions by the Borrower in accordance with its Formation Documents.

8.19Restrictions on Investments.  Make or permit to exist or to remain outstanding any Investment except which is or results in (“Permitted Investments”):

8.19.1marketable direct or guaranteed general obligations of the United States of America which mature within one year from the date of purchase;

8.19.2bank deposits, certificates of deposit and banker’s acceptances, or other obligations in or of the Lenders or banks located within and chartered by the United States of America or a state and having assets of over $500,000,000.00; and

8.19.3the Borrower’s Subsidiaries, subject in all instances to the terms of this Agreement;

8.19.4the acquisition of any asset related to the operation, ownership or management of the Individual Properties or any of the other assets of the Borrower or the Borrower Subsidiaries; and

All such Investments shall be made by the Borrower in a manner which assures that Agent shall have and maintain a perfected first lien security interest therein.

8.20Contracts of a Material or Significant Nature.  Except for contracts otherwise complying with this Agreement, not enter into any other contracts, agreements or purchase orders which would involve the expenditure of more than $1,000,000.00 in any instance or $1,000,000.00 in the aggregate without Agent’s prior written consent, which consent shall not be unreasonably withheld or delayed, but which consent may be conditioned upon a demonstration by the Borrower to Agent’s reasonable satisfaction that the contract, agreement or purchase order is reasonable and that the Party entering into such contract has adequate resources to pay and perform the same.

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8.21Consulting or Management Fees.  Permit the payment of any asset management fees to any Person or enter into any agreement providing asset management services to the Borrower or any Borrower Subsidiary which provides for the payment of asset management fees, except pursuant to any property management contract for an Individual Property which is no longer subject to a triple net lease on terms and conditions customary in the relevant market area.

8.22Negative Pledges, etc.  Enter into any agreement subsequent to the Closing Date (other than a Loan Document) which (a) prohibits the creation or assumption of any Lien upon any of the Collateral, including, without limitation, any hereafter acquired property, (b) specifically prohibits the amendment or other modification of this Agreement or any other Loan Document, or (c) could reasonably be expected to have a Material Adverse Effect.

8.23Business Transactions.  Conduct any business activities that relate, directly or indirectly, to the Property Owners, their properties or assets through any Person other than the Borrower and/or FT-FIN GP, except pursuant to the structure of ownership existing as of the Closing Date and disclosed to the Agent.

ARTICLE 9

SPECIAL PROVISIONS.

9.1Legal Requirements.  The Borrower, FT-FIN GP, or any Borrower Subsidiary may contest in good faith any claim, demand, levy or assessment under any Legal Requirements or taxes owed by any person or entity if: (i) the contest is based upon a material question of law or fact raised by such Person in good faith; (ii) such Person properly commences and thereafter diligently pursues the contest; (iii) the contest will not materially impair the ability to ultimately comply with the contested Legal Requirement should the contest not be successful; (iv) reasonable reserves in an amount necessary to undertake and pay for such contest and any corrective or remedial action then or thereafter reasonably likely to be necessary shall have been established in a manner satisfactory to the Agent or deposited in cash (or cash equivalents) with the Agent to be held during the pendency of such contest, or such contested amount shall have been duly bonded in accordance with applicable law; (v) if the contest relates to a Legal Requirement under Environmental Law, the conditions set forth in the Environmental Indemnity relating to such contests shall be satisfied; (vi) no risk of sale, forfeiture or loss of any interest in any Individual Property or the Collateral or any part thereof arises during the pendency of such contest; and (vii) such contest does not have and could not reasonably be expected to have a Material Adverse Effect.

9.2Distributions.

9.2.1Notice of Intention to Distribute.  At least ten (10) Business Days prior to making any Distribution to its owners, each of the Borrower and FT-FIN GP shall submit to Agent a written statement of its intent to make such Distribution accompanied by an Officer’s Certificate reflecting a pro-forma calculation that the Borrower will be in compliance with the Financial Covenants after the proposed Distribution, together with such other documentation and information as Agent may reasonably require (“Notice of Intention to Distribute”) in order to verify that the Borrower and/or FT-FIN GP is entitled to make a Distribution as provided for herein.

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9.2.2Conditions Must Be Satisfied.  If the Agent objects to such proposed Distribution on the basis that the conditions thereto are not satisfied, or that further information is required, Agent may, by written notice to the Borrower given within ten (10) Business Days following receipt of the Borrower’s Notice of Intention to Distribute, prohibit the proposed Distribution by Borrower and/or FT-FIN GP until such time as the Agent is reasonably satisfied that the conditions have been satisfied.

9.2.3Current Information.  Once Agent has received a Notice of Intention to Distribute and a Distribution has been made in accordance with the foregoing, subsequent Notices of Intention to Distribute submitted within the next twelve (12) months shall not require the submission of new financial information if the Borrower submits a sworn affidavit and unconditional representation that there have been no material adverse changes, unless Agent has a good faith basis for requiring the same.

9.3Limited Recourse Provisions.

9.3.1Borrower Fully Liable.  The Borrower shall be fully liable for the Loan and the Obligations to each of the Lenders.

9.3.2Certain Non-Recourse.  The Loan shall be on a non-recourse basis to First Union, except to the extent provided for in the Limited Non-Recourse Carve Out Guaranty.

9.3.3Additional Matters.  Nothing contained in this Section 9.3 or elsewhere shall: (i) limit the right of Agent or any of the Lenders to obtain injunctive relief or to pursue equitable remedies under any of the Loan Documents, excluding only any injunctive relief ordering payment of obligations by any Person or entity for which personal liability does not otherwise exist; or (ii) limit the liability of any attorney, law firm, accountant or other professional who or which renders or provides any written opinion or certificate to Agent or any of the Lenders in connection with the Loan even though such person or entity may be a member of the Borrower.

9.4Payment of Obligations.  Upon the payment in full of the Obligations, in immediately available funds, including, without limitation, all unreimbursed costs and expenses of the Agent and of each Lender for which the Borrower is responsible, the Agent shall release any security and other collateral interests, including, without limitation, the Payment Direction Letters, rights of setoff and right to freeze granted to the Agent as provided for herein and under the other Loan Documents and shall execute and deliver such documents and termination statements as the Borrower or any other Loan Party reasonably requests to evidence such termination and release.  However, such release by the Agent shall not be deemed to terminate or release any Person from any obligation or liability under the Loan Documents which specifically by its terms survives the payment in full of the Obligations.

ARTICLE 10

EVENTS OF DEFAULT

The following provisions deal with Default, Events of Default, notice, grace and cure periods, and certain rights of Agent following an Event of Default.

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10.1Default and Events of Default.  The term “Default” as used herein or in any of the other Loan Documents shall mean an Event of Default, or any fact or circumstance which constitutes, or upon the lapse of time, or giving of notice, or both, could constitute, an Event of Default. The occurrence of any of the following events, respectively, shall, subject to the giving of any notice or the expiration of any applicable grace period referred to in Section 10.2 without the cure thereof, constitute an “Event of Default” herein.  Upon the occurrence of any Event of Default described in Sections 10.1.8, any and all Obligations shall become due and payable without any further act on the part of the Agent. Upon the occurrence of any other Event of Default, the Agent may declare any and all Obligations immediately due and payable.  The occurrence and continuance of any Event of Default shall also constitute, without notice or demand, a default under all other agreements between the Agent and/or the Lenders and the Borrower and instruments and papers heretofore, now, or hereafter given the Agent and/or the Lenders by the Borrower.

10.1.1Failure to Pay the Loan.  The failure by the Borrower to pay when due any principal of, interest on, or fees in respect of, the Loan.

10.1.2Failure to Make Other Payments.  The failure by the Borrower to pay when due (or upon demand, if payable on demand) any payment the Obligation other than any payment the Obligation on account of the principal of, or interest on, or fees in respect of, the Loan.

10.1.3Note, Security Documents, and Other Loan Documents.  Any other default in the performance of any term or provision of the Note, or of the Security Documents, or of any of the other Loan Documents, or a breach, or other failure to satisfy, any other term, provision, condition or warranty under the Note, the Security Documents, or any other Loan Document, regardless of whether any then undisbursed portion of the Loan is sufficient to cover any payment of money required thereby, and the specific grace period, if any, allowed for the default in question shall have expired without such default having been cured.

10.1.4Default under Other Agreements.  The occurrence of any breach of any covenant or Obligation imposed by, or of any default under, any agreement (including any Loan Document) between the Agent and/or the Lenders and the Borrower, the other Loan Parties, and/or the Property Owners or instrument given by the Borrower and such Persons to the Agent and/or the Lenders and the expiry, without cure, of any applicable grace period (notwithstanding that the Agent and/or the Lenders may not have exercised all or any of its/their rights on account of such breach or default).

10.1.5Representations and Warranties.  If any representation or warranty made by the Borrower or by any of the other Loan Parties or the Borrower Subsidiaries in the Loan Documents was untrue or misleading in a manner which could reasonably be expected to have a Material Adverse Effect.

10.1.6Affirmative Covenants.  The breach of any covenant contained in Sections Article 7 herein, including, without limitation, the Financial Covenants.

10.1.7Negative Covenants.  The breach of any covenant contained in Article 8 herein.

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10.1.8Financial Status and Insolvency.

(a)the Borrower shall: (i) admit in writing its inability to pay its debts generally as they become due; (ii) file a petition in bankruptcy or a petition to take advantage of any insolvency act; (iii) make an assignment for the benefit of creditors; (iv) consent to, or acquiesce in, the appointment of a receiver, liquidator or trustee of itself or of the whole or any substantial part of its properties or assets; (v) file a petition or answer seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the Federal Bankruptcy laws or any other applicable law; (vi) have a court of competent jurisdiction enter an order, judgment or decree appointing a receiver, liquidator or trustee of the Borrower, or of the whole or any substantial part of the property or assets of the Borrower, and such order, judgment or decree shall remain unvacated or not set aside or unstayed for sixty (60) days; (vii) have a petition filed against it seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the Federal Bankruptcy laws or any other applicable law and such petition shall remain undismissed for sixty (60) days; (viii) have, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction assume custody or control of the Borrower or of the whole or any substantial part of its property or assets and such custody or control shall remain unterminated or unstayed for sixty (60) days; or (ix) have an attachment or execution levied against any substantial portion of the property of the Borrower or against any substantial portion of the Collateral which is not discharged or dissolved by a bond within thirty (30) days; or

(b)any such event set forth in subsection (i) above shall occur with respect to a Borrower Subsidiary, FT-FIN GP, and/or any other Loan Party;

10.1.9Loan Documents.  If any Loan Document for any reason other than the satisfaction in full of all Obligations shall cease to be in full force and effect (other than in accordance with its terms), thereby preventing the Agent and/or the Lenders from obtaining the practical realization of the benefits thereof, or if any Loan Document shall be declared null and void or any Loan Party shall claim or declare any such Loan Document to no longer be in full force and effect or is null and void, or if the Liens and security interests purported to be created by any of the Loan Documents shall cease to be valid, perfected, first priority (except as otherwise expressly provided herein) security interests;

10.1.10Judgments.  One or more judgments or decrees shall be entered against the Borrower or any other Loan Party or Borrower Subsidiary involving a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of sixty (60) consecutive days, and the aggregate amount of all such judgments exceeds $500,000.00;

10.1.11Default of Other Specified Debt and Related Documents.  If a Default or Event of Default (regardless of how or if defined) shall occur under any Mortgage Debt as to which Default or Event of Default the holder has accelerated the obligations due thereunder and commenced exercising its rights upon such Default or Event of Default;

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10.1.12ERISA.  (i) If any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code, any Plan shall have had or is likely to have a trustee appointed to administer such Plan, any Plan is, shall have been or is likely to be terminated or to be the subject of termination proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a contribution required to be made to a Plan has not been timely made, the Borrower or any Borrower Subsidiary or any ERISA Affiliate has incurred or is likely to incur a liability to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code, or the Borrower or any Borrower Subsidiary has incurred or is likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(l) of ERISA) that provide benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or employee pension benefit plans (as defined in Section 3(2) of ERISA) and any of the foregoing could have a Material Adverse Effect; (ii) if there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability which could have, or reasonably be expected to have, a Material Adverse Effect; or (iii) if which lien, security interest or liability, individually, and/or in the aggregate, in the opinion of the Agent could have, or reasonably be expected to have, a Material Adverse Effect.

10.1.13Change of Control.  If a Change of Control shall occur.

10.1.14Indictment; Forfeiture.  The indictment of, or institution of any legal process or proceeding against, the Borrower, any other Loan Party, and/or any Borrower Subsidiary under any applicable law where the relief, penalties, or remedies sought or available include the forfeiture of any property of the Borrower and/or any other such Person and/or the imposition of any stay or other order, the effect of which could reasonably be expected to have a Material Adverse Effect.

10.1.15Default of Other Obligations.  Any failure by the Borrower to pay at maturity, or within any applicable grace period, any obligation for borrowed money, or in respect of any capitalized lease, or any failure to observe or perform any material term, covenant or agreement contained in any agreement by which the Borrower is bound, evidencing or securing borrowed money, or in respect of any capitalized lease, such that the holder or holders thereof or of any obligations issued thereunder have accelerated the maturity thereof.

10.1.16Termination of Guaranty or the Borrower Consent.  The termination or attempted termination of (i) any Guaranty by any Guarantor of the Obligations, or (ii) any Indemnification by any Indemnitor.

10.1.17Generally.  A default by the Borrower in the performance of any term, provision or condition of this Agreement to be performed by the Borrower, or a breach, or other failure to satisfy, any other term provision, condition, covenant or warranty under this Agreement and such default remains uncured beyond any applicable specific grace period provided for in this Agreement, or as set forth in Section 10.2. below.

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10.2Grace Periods and Notice.  As to each of the foregoing events the following provisions relating to grace periods and notice shall apply:

10.2.1No Notice or Grace Period.  Except for any grace or notice period specifically provided for in any referenced section of this Agreement, there shall be no grace period and no notice provision with respect to the payment of principal at maturity and no grace period and no notice provision with respect to defaults related to the voluntary filing of bankruptcy or reorganization proceedings or an assignment for the benefit of creditors, or with respect to a breach of warranty or representation as set forth in Section 10.1.5, or with respect to the breach of any of the affirmative covenants set forth in Sections 7.28.1, 7.28.3, and 7.28.4.

10.2.2Nonpayment of Interest and Principal.  As to the nonpayment of interest, installments of principal, and in connection with a Mandatory Principal Prepayment prior to maturity there shall be a ten (10) Business Day grace period without any requirement of notice from Agent.

10.2.3Other Monetary Defaults.  All other monetary defaults shall have a five (5) Business Day grace period following notice from Agent.

10.2.4Nonmonetary Defaults.

(a)As to non-monetary default under Section 7.2, 7.5, 7.18, 7.21, or 7.22, or with respect to the breach of any of the negative covenants set forth in Article 8, there shall be a ten (10) day grace period following notice from Agent of such default;

(b)As to non-monetary default under Section 7.16.1, or 7.27, there shall be a five (5) day grace period following notice from Agent of such default;

(c)As to any other non-monetary default, unless there is a specific shorter or longer grace period provided for in this Loan Agreement or in another Loan Document, there shall be a thirty (30) day grace period following notice from Agent or, if such default would reasonably require more than thirty (30) days to cure or remedy, such longer period of time not to exceed a total of ninety (90) days from Agent’s notice as may be reasonably required so long as Borrower shall commence reasonable actions to remedy or cure the default within thirty (30) days following such notice and shall diligently prosecute such curative action to completion within such ninety (90) day period.  However, where there is an emergency situation in which there is danger to person or property such curative action shall be commenced as promptly as possible.  As to breaches of warranties and representations (other than those related to financial information) there shall be a thirty (30) day grace period following notice from Agent.

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ARTICLE 11

REMEDIES.

11.1Remedies.  Upon the occurrence and during the continuance of an Event of Default, whether or not the indebtedness evidenced by the Notes and secured by the Security Documents shall be due and payable or Agent shall have instituted any foreclosure or other action for the enforcement of the Security Documents or the Notes, Agent may, and shall upon the direction of the Required Lenders, in addition to any other remedies which Agent may have hereunder or under the other Loan Documents, or otherwise, and not in limitation thereof, and in Agent’s sole and absolute discretion:

11.1.1Accelerate Debt.  Agent may, and with the direction of the Required Lenders shall, declare the indebtedness evidenced by the Notes and secured by the Security Documents immediately due and payable (provided that in the case of a voluntary petition in bankruptcy filed by the Borrower or an involuntary petition in bankruptcy filed against the Borrower (after expiration of the grace period, if any, set forth in Section 10.1.8), such acceleration shall be automatic).

11.1.2Pursue Remedies.  Agent may, and with the direction of the Required Lenders shall, pursue any and all remedies provided for hereunder, under any one or more of the other Loan Documents, and/or otherwise.

11.2Written Waivers.  If a Default or an Event of Default is waived by the Required Lenders, in their sole discretion, pursuant to a specific written instrument executed by an authorized officer of Agent, the Default or Event of Default so waived shall be deemed to have never occurred.

11.3Power of Attorney.  For the purpose of exercising the rights granted by this Article 11, as well as any and all other rights and remedies of Agent under the Loan Documents, the Borrower hereby irrevocably constitutes and appoints Agent (or any agent designated by Agent) its true and lawful attorney-in-fact, with full power of substitution, upon the occurrence and during the continuance of any Event of Default, to execute, acknowledge and deliver any instruments and to do and perform any acts in the name and on behalf of the Borrower.  In connection with the foregoing power of attorney, the Borrower hereby grants unto the Agent (acting through any of its officers) full power to do any and all things after the occurrence and during the continuance of an Event of Default necessary or appropriate in connection with the exercise of such powers as fully and effectually as the Borrower might or could do, hereby ratifying all that said attorney shall do or cause to be done by virtue of this Agreement.  The foregoing power of attorney shall not be affected by any disability or incapacity suffered by the Borrower and shall survive the same.  All powers conferred upon the Agent by this Agreement, being coupled with an interest, shall be irrevocable until this Agreement is terminated by a written instrument executed by a duly authorized officer of the Agent.

ARTICLE 12

SECURITY INTEREST AND SET-OFF.

12.1Security Interest.  The Borrower hereby grants to the Agent and each of the Lenders, a continuing lien, security interest and right of setoff as security for all of the Obligations to Agent and each of the Lenders, whether now existing or hereafter arising, upon and against all Depository Accounts, Accounts, deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Agent or any of the Lenders or any

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entity under the control of KeyBank National Association and its successors and assigns, or in transit to any of them.

12.2Set-Off.  After the occurrence and during the continuance of any Event of Default, any such Depository Accounts, Accounts, deposits, balances or other sums credited by or due from Agent, any affiliate of Agent or any of the Lenders, or from any such affiliate of any of the Lenders, to the Borrower may to the fullest extent not prohibited by applicable law at any time or from time to time, without regard to the existence, sufficiency or adequacy of any other collateral, and without notice or compliance with any other condition precedent now or hereafter imposed by statute, rule of law or otherwise, all of which are hereby waived, be set off, appropriated and applied by Agent against any or all of the Borrower’s Obligations irrespective of whether demand shall have been made, in such manner as Agent in its sole and absolute discretion may determine.  Within three (3) Business Days of making any such set off, appropriation or application, Agent agrees to notify the Borrower thereof, provided the failure to give such notice shall not affect the validity of such set off or appropriation or application.  ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY OF THE LENDERS TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES A LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF SUCH BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

12.3Application.  Each of the Lenders agrees with each other Lender that with respect to this Agreement or under any other Loan Document (a) if an amount to be set off is to be applied to indebtedness of the Borrower or any other Loan Party to such Lender, other than the respective Obligations due to such Lender, such amount shall be applied ratably to such other indebtedness and to the Borrower’s Obligations due to such Lender, and (b) if such Lender shall receive from the Borrower or any other Loan Party, whether by voluntary payment, exercise of the right of setoff, counterclaim, cross action, enforcement of the claim due to such Lender by proceedings against the Borrower or any other Loan Party at law or in equity or by proof thereof in bankruptcy, reorganization, liquidation, receivership or similar proceedings, or otherwise, and shall retain and apply to the payment of the Obligations due to such Lender any amount in excess of its ratable portion of the payments received by all of the Lenders with respect to the Borrower’s Obligations due to all of the Lenders, such Lender will make such disposition and arrangements with the other Lenders with respect to such excess, either by way of distribution, pro tanto assignment of claims, subrogation or otherwise as shall result in each Lender receiving in respect of the subject Obligations its proportionate payment as contemplated by this Agreement; provided that if all or any part of such excess payment is thereafter recovered from such Lender, such disposition and arrangements shall be rescinded and the amount restored to the extent of such recovery, but without interest.

12.4Right to Freeze.  The Agent and each of the Lenders shall also have the right, at its option, upon the occurrence and during the continuance of any event which would entitle the Agent and each of the Lenders to set off or debit as set forth in Section 12.2, to freeze, block or segregate any such deposits, balances and other sums so that the Borrower may not access, control or draw upon the same.

12.5Additional Rights.  The rights of Agent, the Lenders and each affiliate of Agent and each of the Lenders under this Article 12 are in addition to, and not in limitation of, other

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rights and remedies, including other rights of set off, which Agent or any of the Lenders may have.

ARTICLE 13

THE AGENT AND THE LENDERS

13.1Appointment.  KeyBank National Association is hereby appointed as Agent hereunder and under each other Loan Document, and each Lender hereby irrevocably authorizes the Agent to act as agent for Lender and to take such actions as Lender is obligated or entitled to take under the provisions of this Agreement and the other Loan Documents.  Agent agrees to act as such upon the express conditions contained in this Article in substantially the same manner that it would act in dealing with a loan held for its own account.  Agent shall not have a fiduciary relationship with respect to any Lender by reason of this Agreement.  The provisions of this Article 13 which do not expressly grant Borrower certain rights by direct reference to Borrower are solely for the benefit of the Agent and the Lenders, and Borrower shall not have any rights as a third party beneficiary of any of the provisions hereof.  In performing its functions and duties under this Agreement, the Agent shall act solely as agent of Lender and does not assume, and shall not be deemed to have assumed, any obligations toward or relationship of agency or trust with or for the Borrower, provided, however, that nothing contained in this Article 13 shall be deemed to release Agent or the Lenders from any of their obligations under this Agreement.

13.2Reliance on Agent.  All acts of and communications by the Agent, as agent for the Lenders, shall be deemed legally conclusive and binding; and Borrower or any third party (including any court) shall rely on any and all communications or acts of the Agent with respect to the exercise of any rights or the granting of any consent, waiver or approval on behalf of a Lender in all circumstances where an action by such Lender is required or permitted pursuant to this Agreement or the provisions of any other Loan Document or by applicable law without the right or necessity of making any inquiry of any individual Lender as to the authority of Agent with respect to such matter.  In no event shall any of the foregoing limit the rights or obligations of any Lender with respect to any other Lender pursuant to this Article 13.

13.3Powers.  The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto or are otherwise necessary or desirable in connection with the administration of the Loan, and may exercise all other powers of Lender as are not made subject to the consent of the Required Lenders pursuant to Section 13.26.1 or to the consent of all Lenders pursuant to Section 13.26.2.  Without limiting the foregoing, the Agent may consent to or execute easements, plats, dedications, release of minor portions of the collateral and similar documents. The Agent shall not be considered, or be deemed, a separate agent of the Lenders hereunder, but is, and shall be deemed, acting in its contractual capacity as Agent, exercising such rights and powers under the Loan Documents as are specifically delegated to the Agent or Agent is otherwise entitled to take hereunder.  Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action except any action specifically provided by the Loan Documents to be taken by the Agent.

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13.4Disbursements.

13.4.1At least two (2) Business Days (by 11:00 a.m. Eastern Time) prior to each date a disbursement of the Loan is to be made hereunder pursuant to this Agreement (or at least two (2) LIBOR Business Days by 11:00 a.m. Eastern Time for any disbursements to be made at the Adjusted LIBOR Rate), the Agent shall notify each Lender of the proposed disbursement.  Each Lender shall make available to Agent (or the funding Lender or entity designated by the Agent), the amount of such Lender’s Percentage of such disbursement (with respect to such Lender, such amount being referred to herein as an “Advance”) in immediately available funds not later than 11:00 a.m. Eastern Time on the date such disbursement is to be made (such date being referred to herein as a “Funding Date”).  Unless the Agent shall have been notified by any Lender prior to such time for funding in respect of any Advance that such Lender does not intend to make available to the Agent such Lender’s Advance, the Agent may assume that such Lender has made such amount available to the Agent and the Agent, in its sole discretion, may, but shall not be obligated to, make available to Borrower a corresponding amount.  If such corresponding amount is not in fact made available to the Agent by such Lender on or prior to the respective Funding Date, such Lender agrees to pay and Borrower agrees to repay to Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to Borrower until the date such amount is paid or repaid to Agent, at (A) in the case of such Lender, the Federal Funds Effective Rate, and (B) in the case of Borrower, the interest rate applicable at the time to a disbursement made on such Funding Date.  If such Lender shall pay to Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance, and if both such Lender and Borrower shall have paid and repaid, respectively, such corresponding amount, Agent shall promptly return to Borrower such corresponding amount in same day funds.  If any Lender declines to make available to Agent such Lender’s advance as described above, so long as no Event of Default has occurred and is continuing, upon written demand of Borrower, the Borrower may require such Lender to sell and assign its entire interest in the Loan pursuant to Section 13.22 hereof to an Eligible Assignee, reasonably approved by Agent, upon payment by such Eligible Assignee of the entire par amount of such Lender’s interest.

13.4.2Requests by the Agent for funding by the Lenders of disbursements of the Loan will be made by facsimile.  Each Lender shall make its Advance available to the Agent in dollars and in immediately available funds to such Lender and account as the Agent may designate, not later than Noon Eastern Time on the Funding Date.  Nothing in this Section 13.4 shall be deemed to relieve any Lender of its obligation hereunder to make any Advance on any Funding Date, nor shall any Lender be responsible for the failure of any other Lender to perform its obligations to make any Advance hereunder, and the Commitment of any Lender shall not be increased or decreased as a result of the failure by any other Lender to perform its obligation to make any Advances hereunder.

13.4.3As soon as practical Agent will promptly forward to each Lender copies of any draw request documents and, if applicable, cause the Lender’s Consultant to forward to each Lender a copy of the Lender’s Consultant’s most recent inspection.  Delivery of the draw request documents and the Lender’s Consultant’s inspection report shall not be a condition to funding any Advance.

13.5Distribution and Apportionment of Payments.

13.5.1Subject to Section 13.5.3, payments actually received by Agent for the account of the Lenders shall be paid to them promptly after receipt thereof by Agent, but in any

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event within one (1) Business Day, provided that, if any such payments are not distributed to the Lenders within one (1) Business Day after Agent’s receipt thereof, Agent shall pay to such Lenders interest thereon, at the lesser of (i) the Federal Funds Effective Rate and (ii) if the applicable payment represents repayment of a portion of the principal of the Loan, the rate of interest applicable to such portion of the Loan, from the date of receipt of such funds by Agent until such funds are paid in immediately available funds to such Lenders provided such funds are received by Agent not later than 11:00 A.M. Eastern Time on the date of receipt.  All payments of principal and interest in respect of the Loan, all payments of the fees described in this Agreement (but not in any separate fee letter except to the extent expressly set forth therein), and all payments in respect of any other obligations of Borrower under the Loan Documents shall be allocated among such of Lenders as are entitled thereto, in proportion of their respective Percentages or otherwise as provided herein or in the other Loan Documents, as the case may be.  The Agent shall distribute to each Lender at its primary address set forth herein or in its Assignment and Assumption, or at such other address as a Lender may request in writing, such funds as it may be entitled to receive, provided that the Agent shall in any event not be bound to inquire into or determine the validity, scope or priority of any interest or entitlement of any Lender and may suspend all payments and seek appropriate relief (including without limitation instructions from the Required Lenders, or all Lenders, as applicable, or an action in the nature of interpleader) in the event of any doubt or dispute as to any apportionment or distribution contemplated hereby.  The order of priority herein is set forth solely to determine the rights and priorities of the Lenders as among themselves and may at any time or from time to time be changed by the Lenders as they may elect, in writing, without necessity of notice to or consent of or approval by Borrower.  The Agent shall upon each distribution noted above promptly notify Borrower of such distribution and each Lender of the amounts so distributed to it applicable to principal of, and interest on, the proportionate share held by the applicable Lender.  Each payment to the Agent by Borrower as noted in this Section shall constitute a payment by the Borrower to each Lender in the amount of such Lender’s proportionate of such payment, and any such payment to the Agent shall not be considered outstanding for any purpose after the date of such payment by the Borrower to the Agent without regard to whether or when the Agent makes distribution thereof as provided above.

13.5.2Distribution of Liquidation Proceeds.  Subject to the terms and conditions hereof, the Agent shall distribute all Liquidation Proceeds in the order and manner set forth below:

First:To the Agent, towards any fees and any expenses for which the Agent is entitled to reimbursement under this Agreement or the other Loan Documents not theretofore paid to the Agent.

Second:To all applicable Lenders in accordance with their proportional share based upon their respective Commitment Percentages until all Lenders have been reimbursed for all expenses which such Lenders have previously paid to the Agent and not theretofore paid to such Lenders.

Third:Pro Rata to (a) all Lenders in accordance with their proportional share based upon their respective Commitment Percentages until all Lenders have been paid in full all principal and interest due to such Lenders under the Loan, with each Lender applying such proceeds for purposes of this Agreement against the outstanding principal balance and accrued and

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unpaid interest due to such Lender under the Loan in such fashion and priority as the Agent may direct, and (b) to the Agent in connection with any Interest Rate Protection Agreement or other hedging or protection arrangement entered into by the Borrower or any other party with the KeyBank National Association with respect to the Loan.

Fourth:To all applicable Lenders in accordance with their proportional share based upon their respective Commitment Percentages until all Lenders have been paid in full all other amounts due to such Lenders under the Loan including, without limitation, any costs and expenses incurred directly by such Lenders to the extent such costs and expenses are reimbursable to such Lenders by the Borrower under the Loan Documents.

Fifth:To the Borrower or such third parties as may be entitled to claim Liquidation Proceeds.

13.5.3If a Lender (a “Defaulting Lender”) defaults in making any Advance or paying any other sum payable by it hereunder, such sum together with interest thereon at the Default Rate from the date such amount was due until repaid (such sum and interest thereon as aforesaid referred to, collectively, as the “Lender Default Obligation”) shall be payable by the Defaulting Lender (i) to any Lender(s) which elect, at their sole option (and with no obligation to do so), to fund the amount which the Defaulting Lender failed to fund or (ii) to Agent or any other Lender which under the terms of this Agreement is entitled to reimbursement from the Defaulting Lender for the amounts advanced or expended.  Notwithstanding any provision hereof to the contrary, until such time as a Defaulting Lender has repaid the Lender Default Obligation in full, all amounts which would otherwise be distributed to the Defaulting Lender shall instead be applied first to repay the Lender Default Obligation (to be applied first to interest at the Default Rate and then to principal) until the Lender Default Obligation has been repaid in full (whether by such application or by cure by the Defaulting Lender), whereupon such Lender shall no longer be a Defaulting Lender.  Any interest collected from Borrower on account of principal advanced by any Lender(s) on behalf of a Defaulting Lender shall be paid to the Lender(s) who made such advance and shall be credited against the Defaulting Lender’s obligation to pay interest on the amount advanced at the Default Rate.  If no other Lender makes an advance a Defaulting Lender failed to fund, a portion of the indebtedness of Borrower to the Defaulting Lender equal to the Lender Default Obligation shall be subordinated to the indebtedness of Borrower to all other Lenders and shall be paid only after the indebtedness of Borrower to all other Lenders is paid.  The provisions of this Section shall apply and be effective regardless of whether an Event of Default occurs and is then continuing, and notwithstanding (i) any other provision of this Agreement to the contrary or (ii) any instruction of Borrower as to its desired application of payments.  No Defaulting Lender shall have the right to vote on matters which are subject to the consent or approval of Required Lenders or all Lenders and while any Lender is a Defaulting Lender the requisite percentage of Lenders which constitutes the Required Lenders shall be calculated exclusive of the Percentage of the Defaulting Lender.  The Agent shall be entitled to (i) withhold or set off, and to apply to the payment of the Lender Default Obligation any amounts to be paid to such Defaulting Lender under this Agreement, and (ii) bring an action or suit against such Defaulting Lender in a court of competent jurisdiction to recover the Lender Default Obligation and, to the extent such recovery would not fully compensate the Lenders for the Defaulting Lender’s breach of this Agreement, to collect damages.  In addition, the Defaulting Lender shall indemnify, defend and hold Agent and each of the other Lenders harmless from and against any and all claims, actions, liabilities, damages,

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costs and expenses (including attorneys’ fees and expenses), plus interest thereon at the Default Rate, for funds advanced by Agent or any other Lender on account of the Defaulting Lender or any other damages such persons may sustain or incur by reason of or as a direct consequence of the Defaulting Lender’s failure or refusal to abide by its obligations under this Agreement.

13.5.4At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of any Lender, each Lender that is not incorporated under the laws of the United States of America, or a state thereof, agrees that it will deliver to each of the Agent and the Borrower two duly completed copies of United States Internal Revenue Service Form W-8 BEN or W-8 ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement and the Note without deduction or withholding of any United States federal income taxes.  Each Lender which so delivers a Form W-8 BEN or W-8 ECI further undertakes to deliver to the Agent two additional copies of such form (or a successor form) on or before the date that such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Agent, in each case certifying that such Lender is entitled to receive payments under this Agreement and the Note without deduction or withholding of any United States federal income taxes, unless any change in treaty, law or regulation has occurred after the initial delivery required by this Section 13.5.4 but prior to the date on which any such subsequent delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender advises the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax, provided, however, that if any such Lender so advises the Agent, Agent shall promptly notify Borrower thereof, and so long as no Event of Default has occurred and is continuing, upon written demand of Borrower, the Borrower may require such Lender to sell and assign its entire interest in the Loan pursuant to Section 13.22 hereof to an Eligible Assignee, reasonably approved by Agent, upon payment by such Eligible Assignee of the entire par amount of such Lender’s interest.

13.6Agency Provisions Relating to Collateral.

13.6.1The Agent is hereby authorized on behalf of all Lenders, without the necessity of any notice to or further consent from any Lender, at any time and from time to time, to take any action with respect to any collateral for the Loan or any Loan Document which may be necessary to preserve and maintain such collateral or to perfect and maintain perfected the liens upon such collateral granted pursuant to this Agreement and the other Loan Documents.

13.6.2Except as provided in this Agreement, the Agent shall have no obligation whatsoever to any Lender or to any other person or entity to assure that any collateral exists or is owned by Borrower or is cared for, protected or insured or has been encumbered or that the liens granted herein or in any of the other Loan Documents or pursuant hereto or thereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority.

13.6.3Should the Agent commence any proceeding or in any way seek to enforce the Agent’s or the Lenders’ rights or remedies under the Loan Documents, irrespective of whether as a result thereof the Agent shall acquire title to any collateral, each Lender, upon demand therefor from time to time, shall contribute its share (based on its Percentage) of the reasonable

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costs and/or expenses of any such enforcement or acquisition, including, but not limited to, fees of receivers or trustees, court costs, title company charges, filing and recording fees, appraisers’ fees and fees and expenses of attorneys to the extent not otherwise reimbursed by Borrower.  Without limiting the generality of the foregoing, each Lender shall contribute its share (based on its Percentage) of all reasonable costs and expenses incurred by the Agent (including reasonable attorneys’ fees and expenses) if the Agent employs counsel for advice or other representation (whether or not any suit has been or shall be filed) with respect to any collateral for the Loan or any part thereof, or any of the Loan Documents, or the attempt to enforce any security interest or lien on any collateral, or to enforce any rights of the Agent or the Lenders or any of Borrower’s or any other party’s obligations under any of the Loan Documents, but not with respect to any dispute between Agent and any other Lender(s).  It is understood and agreed that in the event the Agent determines it is necessary to engage counsel for Lender from and after the occurrence of a Default or Event of Default, said counsel shall be selected by the Agent and written notice of such selection, together with a copy of such counsel’s engagement letter and fee estimate, shall be delivered to the Lenders.

13.6.4In the event that all or any portion of the collateral for the Loan is acquired by the Agent as the result of the exercise of any remedies hereunder or under any other Loan Document, or is retained in satisfaction of all or any part of Borrower’s obligations under the Loan Documents, title to any such collateral or any portion thereof shall be held in the name of the Agent or a nominee or subsidiary of Agent, as agent, for the ratable benefit of the Agent and the Lenders.  The Agent shall prepare a recommended course of action for such collateral (the “Post-Default Plan”), which shall be subject to the approval of the Required Lenders.  The Agent shall administer the collateral in accordance with the Post-Default Plan, and upon demand therefor from time to time, each Lender will contribute its share (based on its Percentage) of all reasonable costs and expenses incurred by the Agent pursuant to the Post-Default Plan, including without limitation, any operating losses and all necessary operating reserves.  To the extent there is net operating income from such collateral, the Agent shall, in accordance with the Post-Default Plan, determine the amount and timing of distributions to Lenders.  All such distributions shall be made to Lenders in accordance with their respective Percentages.  In no event shall the provisions of this subsection or the Post-Default Plan require the Agent or any Lender to take an action which would cause such Lender to be in violation of any applicable regulatory requirements.

13.7Lender Actions Against Borrower or the Collateral.  Each Lender agrees that it will not take any action, nor institute any actions or proceedings, against Borrower or any other person hereunder or under any other Loan Documents with respect to exercising claims against the Borrower or rights in any collateral without the consent of the Required Lenders.  With respect to any action by the Agent to enforce the rights and remedies of the Agent and Lenders with respect to the Borrower and any collateral in accordance with the terms of this Agreement, each Lender hereby consents to the jurisdiction of the court in which such action is maintained.

13.8Assignment and Participation.  No Lender shall be permitted to assign or sell all or any portion of its rights and obligations under this Agreement to Borrower or any Affiliate of Borrower.

13.9Ratable Sharing.  Subject to Sections 13.4 and 13.5, Lenders agree among themselves that (i) with respect to all amounts received by them which are applicable to the payment of the Loan, equitable adjustment will be made so that, in effect, all such amounts will

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be shared among them ratably in accordance with their Percentages, whether received by voluntary payment, by the exercise of the right of set-off or bankers’ lien, by counterclaim or cross action or by the enforcement of any or all of the Loan Documents or any collateral and (ii) if any of them shall by voluntary payment or by the exercise of any right of counterclaim, set-off, bankers’ lien or otherwise, receive payment of a proportion of the aggregate amount of the Loan held by it which is greater than its Percentage of the payments on account of the Loan, the one receiving such excess payment shall purchase, without recourse or warranty, an undivided interest and participation (which it shall be deemed to have done simultaneously upon the receipt of such payment) in such obligations owed to the others so that all such recoveries with respect to such obligations shall be applied ratably in accordance with their Percentages; provided, that if all or part of such excess payment received by the purchasing party is thereafter recovered from it, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to that party to the extent necessary to adjust for such recovery, but without interest except to the extent the purchasing party is required to pay interest in connection with such recovery.  Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation.

13.10General Immunity.  Neither Agent nor any of its directors, officers, agents or employees shall be liable to Borrower or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith, except for its or their own gross negligence or willful misconduct.  In the absence of gross negligence, the Agent shall not be liable for any apportionment or distribution of payments made by it in good faith pursuant to Section 13.5, and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due, but not made, shall be to recover from the recipients of such payments any payment in excess of the amount to which they are determined to have been entitled.

13.11No Responsibility for Loan, Recitals, etc.  Neither Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Loan Document or any use of the Loan; (ii) the performance or observance of any of the covenants or agreements of any party to any Loan Document; (iii) the satisfaction of any condition specified in this Agreement, except receipt of items purporting to be the items required to be delivered to any Agent; or (iv) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith, provided that the foregoing shall not release Agent from liability for its gross negligence or willful misconduct.

13.12Action on Instructions of Lenders.  The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by all the Lenders (or the Required Lenders, if such action may be directed hereunder by the Required Lenders), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of Lenders.  Each Lender, severally to the extent of its Percentage, hereby agrees to indemnify Agent against and hold it harmless from any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action, provided that the foregoing shall not release Agent from liability for its gross negligence or willful misconduct.

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13.13Employment of Agents and Counsel.  The Agent may undertake any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be liable to Lenders, except as to money or securities received by them or their authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.  The Agent shall be entitled to advice of counsel concerning all matters pertaining to the agency hereby created and its duties hereunder and under any other Loan Document.

13.14Reliance on Documents; Counsel.  The Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be an employee of Agent, provided that the foregoing shall not release the Agent from liability for its gross negligence or willful misconduct.  Any such counsel shall be deemed to be acting on behalf of Lender in assisting the Agent with respect to the Loan, but shall not be precluded from also representing Agent in any matter in which the interests of Agent and the other Lenders may differ.

13.15Agent’ Reimbursement and Indemnification.  Lenders agree to reimburse and indemnify Agent ratably (i) for any amounts (excluding principal and interest on the Loan and loan fees) not reimbursed by Borrower for which Agent is entitled to reimbursement under the Loan Documents, (ii) for any other expenses incurred by Agent on behalf of Lender, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents, if not paid by Borrower, (iii) for any expenses incurred by Agent on behalf of Lender which may be necessary or desirable to preserve and maintain collateral or to perfect and maintain perfected the liens upon the collateral granted pursuant to this Agreement and the other Loan Documents, if not paid by Borrower, (iv) for any amounts and other expenses incurred by Agent on behalf of Lender in connection with any default by any Lender hereunder or under the other Loan Documents, if not paid by such Lender, and (v) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of Agent.

13.16Rights as a Lender.  With respect to its Commitment, if any, Agent shall have the same rights, powers and obligations hereunder and under any other Loan Document as any Lender and may exercise such rights and powers as though it were not an Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include Agent in its individual capacities.  The Borrower and each Lender acknowledge and agree that Agent and/or its affiliates may accept deposits from, lend money to, hold other investments in, and generally engage in any kind of trust, debt, equity or other transaction or have other relationships, in addition to those contemplated by this Agreement or any other Loan Document, with Borrower or any of its affiliates in which Borrower or such affiliate is not restricted hereby from engaging with any other person.

13.17Lenders’ Credit Decisions.  Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements

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and other information prepared by Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents.  Each Lender also acknowledges that it will, independently and without reliance upon Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.

13.18Notice of Events of Default.  Should Agent receive any written notice of the occurrence of a default or Event of Default, or should the Agent send Borrower a notice of Default or Event of Default, the Agent shall promptly furnish a copy thereof to each Lender.

13.19Successor Agent.

13.19.1Notwithstanding anything contained in this Agreement to the contrary, KeyBank National Association shall serve as Agent pursuant to this Agreement until the earlier to occur of the following (the “Resignation Event”): (a) the occurrence of an Event of Default, or (b) the date upon which the full Loan is advanced.  Following such a Resignation Event, Agent may resign from the performance of all its functions and duties hereunder at any time by giving at least thirty (30) days prior written notice to Lenders and Borrower.  Such resignation shall take effect on the date set forth in such notice or as otherwise provided below.  Such resignation by Agent as agent shall not affect its obligations hereunder, if any, as a Lender.

13.19.2Upon resignation by the Agent, or any successor Agent, the Required Lenders shall appoint a successor Agent with the consent of Borrower, which shall not be unreasonably withheld, conditioned or delayed (provided that no consent of Borrower shall be required if the successor Agent is also a Lender or if an Event of Default then exists).  If no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment within thirty (30) days after the retiring Agent’s giving notice of resignation, then the retiring Agent may appoint a successor Agent with the consent of Borrower, which shall not be unreasonably withheld, conditioned or delayed (provided that no consent of Borrower shall be required if the successor Agent is also a Lender or if an Event of Default then exists).  Upon the acceptance of any appointment as an Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Agent and the Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents other than its liability, if any, for duties and obligations accrued prior to its retirement.  After any retiring Agent’s resignation hereunder as an Agent, the provisions of this Article 13 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as an Agent hereunder and under the other Loan Documents.

13.20Distribution by Agent.  If in the opinion of the Agent distribution of any amount received by it in such capacity hereunder or under the Notes or under any of the other Loan Documents might involve any liability, it may refrain from making distribution until its right to make distribution shall have been adjudicated by a court of competent jurisdiction or has been resolved by the mutual consent of all Lenders.  In addition, the Agent may request full and complete indemnity, in form and substance satisfactory to it, prior to making any such distribution.  If a court of competent jurisdiction shall adjudge

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that any amount received and distributed by the Agent is to be repaid, each person to whom any such distribution shall have been made shall either repay to the Agent its proportionate share of the amount so adjudged to be repaid or shall pay over to the same in such manner and to such persons as shall be determined by such court.

13.21Holders.  The Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Agent.  Any request, authority or consent of any person or entity who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

13.22Assignment and Participation.

  Each Lender shall have the right to assign, transfer, sell, negotiate, pledge or otherwise hypothecate this Agreement and any of its rights and security hereunder and under the other Loan Documents to any other Eligible Assignee with the prior written consent of the Agent and with the prior written consent of Borrower, which consents by the Agent and the Borrower shall not be unreasonably withheld, conditioned or delayed (provided that, in the case of the Borrower, such consent shall not be required if a Default or Event of Default shall have occurred and be continuing and provided, further, such consent shall not be required from either the Agent or the Borrower in connection with any assignment as to which (a) the assignee is an existing Lender (other than a Defaulting Lender) or (b) an Affiliate or a Related Fund of the assigning Lender)); provided, however, that (i) the parties to each such assignment shall execute and deliver to Agent, for its approval and acceptance, an Assignment and Assumption in form and substance satisfactory to the Agent and substantially in the form set forth in Exhibit E attached hereto, (ii) each such assignment shall be of a constant, and not a varying, percentage of the assigning Lender’s rights and obligations under this Agreement, (iii) unless the Agent and, so long as no Event of Default exists, Borrower otherwise consent, the aggregate amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment shall in no event be less than One Million Dollars ($1,000,000.00), provided, however, that such minimum amount shall not apply if either (x) the assignee is an Affiliate or Related Fund of the Assigning Lender or (y) the Lender is assigning its entire remaining interest in the Loan, (iv) the Agent shall receive from the assigning Lender a processing fee of Three Thousand Five Hundred Dollars ($3,500.00), provided, however, that such fee shall not apply if the assignee is an Affiliate or Related Fund of the Assigning Lender, and (v) if the assignment is less than the assigning Lender’s entire interest in the Loan, the assigning Lender must retain at least a One Million Dollar ($1,000,000.00) interest in the Loan, provided that such minimum shall not apply if the assignee is an Affiliate or Related Fund of the assigning Lender.  The Agent may designate any Eligible Assignee accepting an assignment of a specified portion of the Loan to be a Co-Agent, an “Arranger” or similar title, but such designation shall not confer on such Assignee the rights or duties of the Agent.  Upon such execution, delivery, approval and acceptance, and upon the effective date specified in the applicable Assignment and Assumption, (a) the Eligible Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant

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to such Assignment and Assumption, have the rights and obligations of a Lender hereunder and under the other Loan Documents, and Borrower hereby agrees that all of the rights and remedies of Lenders in connection with the interest so assigned shall be enforceable against Borrower by such Eligible Assignee with the same force and effect and to the same extent as the same would have been enforceable but for such assignment, and (b) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Assumption, relinquish its rights and be released from its obligations hereunder and thereunder thereafter accruing.  Notwithstanding anything contained in this Section 13.22 to the contrary, prior to the occurrence of an Event of Default, (x) KeyBank National Association shall at all times hold not less than twenty-five percent (25%) of the Lenders’ interest in the Loan and (y) KeyBank National Association’s interest in the Loan shall at all times equal or exceed the interest of each other Lender.

13.22.1By executing and delivering an Assignment and Assumption, the assigning Lender thereunder and the Eligible Assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) except as provided in such Assignment and Assumption, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document or any other instrument or document furnished in connection therewith; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under any Loan Document or any other instrument or document furnished in connection therewith; (iii) such Eligible Assignee confirms that it has received a copy of this Agreement together with such financial statements, Loan Documents and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into the Assignment and Assumption and to become a Lender hereunder; (iv) such Eligible Assignee will, independently and without reliance upon Agent, the assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such Eligible Assignee appoints and authorizes the Agent to take such action as the Agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto; and (vi) such Eligible Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

13.22.2Agent shall maintain a copy of each Assignment and Assumption delivered to and accepted by it and shall record in its records the names and address of each Lender and the Commitment of, and Percentage of the Loan owing to, such Lender from time to time.  Borrower, the Agent and Lenders may treat each entity whose name is so recorded as a Lender hereunder for all purposes of this Agreement.

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13.22.3Upon receipt of an Assignment and Assumption executed by an assigning Lender and an Eligible Assignee, Agent shall, if such Assignment and Assumption has been properly completed and consented to if required herein, accept such Assignment and Assumption, and record the information contained therein in its records, and the Agent shall use its best efforts to give prompt notice thereof to Borrower (provided that neither the Agent nor the Lenders shall be liable for any failure to give such notice).

13.22.4Borrower shall use reasonable efforts to cooperate with Agent and each Lender in connection with the assignment of interests under this Agreement or the sale of participations herein which shall be at no cost to the Borrower.

13.22.5Anything in this Agreement to the contrary notwithstanding, and without the need to comply with any of the formal or procedural requirements of this Agreement, including this Section, any Lender may at any time and from time to time pledge and assign all or any portion of its rights under all or any of the Loan Documents to a Federal Reserve Bank or, in the case of a Lender which is a fund, to any holders of obligations owed or securities issued by such Lender or any trustee for or other representatives of such holders; provided that no such pledge or assignment shall release such Lender from its obligations hereunder.  To facilitate any such pledge or assignment, the Agent shall, at the request of such Lender, enter into a letter agreement with the Federal Reserve Bank in, or substantially in, the form of the exhibit to Appendix C to the Federal Reserve Bank of New York Operating Circular No. 12.

13.22.6Anything in this Agreement to the contrary notwithstanding, and subject to the requirement that prior to the occurrence of an Event of Default, (x) KeyBank National Association shall at all times hold not less than twenty-five percent (25%) of the Lenders’ interest in the Loan and (y) KeyBank National Association’s interest in the Loan shall at all times equal or exceed the interest of each other Lender as provided in Section 13.22 hereof, any Lender may assign all or any portion of its rights and obligations under this Agreement to another branch or affiliate of such Lender without first obtaining the approval of any Agent or the Borrower, provided that (i) such Lender remains liable hereunder unless the Borrower and Agent shall otherwise agree, (ii) at the time of such assignment such Lender is not a Defaulting Lender, (iii) such Lender gives the Agent and Borrower at least fifteen (15) days’ prior written notice of any such assignment; (iv) the parties to each such assignment execute and deliver to Agent an Assignment and Assumption, and (v) the Agent receives from the assigning Lender a processing fee of One Thousand Five Hundred Dollars ($1,500).

13.22.7Each Lender shall have the right, without the consent of the Borrower, to sell participations to one or more Eligible Assignees, or an Affiliate or Related Fund of the assigning Lender, in or to all or a portion of its rights and obligations under the Loan and the Loan Documents; provided, however, that (i) such Lender’s obligations under this Agreement (including without limitation its Commitment to Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations (iii) the Borrower, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and with regard to any and all payments to be made under this Agreement and (iv) the holder of any such participation

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shall not be entitled to voting rights under this Agreement or the other Loan Documents (but such holder may contract with the Lender selling such Eligible Assignee its interest in such Lender’s share of the Loan as to voting of such Lender’s interest under Section 13.26.2 but not under any other section of this Agreement, provided that any such agreement by a Lender shall bind only such Lender alone and not Borrower, the other Lenders or the Agent).

13.22.8No Eligible Assignee of any rights and obligations under this Agreement shall be permitted to subassign such rights and obligations.  No participant in any rights and obligations under this Agreement shall be permitted to sell subparticipations of such rights and obligations.

13.22.9Borrower acknowledges and agrees that Lenders may provide to any assignee or participant originals or copies of this Agreement, any other Loan Document and any other documents, instruments, certificates, opinions, insurance policies, letters of credit, reports, requisitions and other materials and information of every nature or description, and may communicate all oral information, at any time submitted by or on behalf of Borrower or received by any Lender in connection with the Loan or with respect to Borrower, provided that prior to any such delivery or communication, such Eligible Assignees or participants shall agree to preserve the confidentiality of any of the foregoing to the same extent that such Lender agreed to preserve such confidentiality.  In order to facilitate assignments to Eligible Assignees and sales to Eligible Assignees, Borrower shall execute such further documents, instruments or agreements as Lenders may reasonably require; provided, that Borrower shall not be required (i) to execute any document or agreement which would materially decrease its rights, or materially increase its obligations, relative to those set forth in this Agreement or any of the other Loan Documents (including financial obligations, personal recourse, representations and warranties and reporting requirements), or (ii) to expend more than incidental sums of money or incidental administrative time for which it does not receive reasonable reimbursement in order to comply with any requests or requirements of any Lender in connection with such assignment or sale arrangement.  In addition, Borrower agrees to reasonably cooperate fully with Lenders in the exercise of Lenders’ rights pursuant to this Section, including providing such information and documentation regarding Borrower as any Lender or any potential Eligible Assignee may reasonably request and to meet with potential Eligible Assignees in Borrower’s offices.

13.23Several Liability.  Anything contained in this Agreement to the contrary notwithstanding, the obligations of each Lender to Borrower under this Agreement are several and not joint and several; each Lender shall only be obligated to fund its Percentage of each disbursement to be made hereunder up to the amount of its Commitment.  Failure of any Lender to fulfill its obligations hereunder shall not result in any other Lender becoming obligated to advance more than its Commitment, nor shall such failure release or diminish the obligations of any other Lender to fund its Commitment provided herein.  During any time, and only during such time, as Agent is the sole Lender and has not assigned any portion or portions of its interest in the Loan to another Lender pursuant to an Assignment and Assumption Agreement, Agent in its individual capacity shall be liable for all of the obligations of the Lender under this Agreement and the other Loan Documents.  From and after the date that Agent as the sole Lender assigns any portion or portions of its interest in the Loan to another Lender pursuant to an

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Assignment and Assumption Agreement, then Agent shall act as the administrative agent on behalf of itself as a Lender and the other Lenders.

13.24Miscellaneous Assignment Provisions.  Any assigning Lender shall retain its rights to be indemnified pursuant to Section 7.20 with respect to any claims or actions arising prior to the date of such assignment.  If any assignee Lender is not incorporated under the laws of the United States of America or any state thereof, it shall prior to the date on which any interest or fees are payable hereunder or under any of the other Loan Documents for its account, deliver to the Borrower and the Agent certification as to its exemption from deduction or withholding of any United States federal income taxes.

13.25Assignment by Borrower.  The Borrower shall not assign or transfer any of its rights or obligations under any of the Loan Documents.

13.26Consents and Approvals.

13.26.1Each of the following shall require the approval or consent of the Required Lenders:

(a)The exercise by Agent and/or Lenders of any rights and remedies under the Loan Documents following an Event of Default, provided that absent any direction from the Required Lenders, Agent may exercise any right or remedy under the Loan Documents as Agent may determine in good faith to be necessary or appropriate to protect the Lenders or the collateral securing the Loan;

(b)Appointment of a successor Agent;

(c)Approval of Post-Default Plan (defined in Section 13.6.4); and

(d)Except as referred to in Section 13.26.2 below, approval of any amendment or modification of this Agreement or any of the other Loan Documents, or issuance of any waiver of any material provision of this Agreement or any of the other Loan Documents;

13.26.2Each of the following shall require the approval or consent of all the Lenders:

(a)Extension of the Maturity (beyond any extension permitted herein) or forgiveness of all or any portion of the principal amount of the Loan or any accrued interest thereon, or any other amendment of this Agreement or the other Loan Documents which would reduce the interest rate options or the rate at which fees are calculated or forgive any loan fee, or extend the time of payment of any principal, interest or fees;

(b)Reduction of the percentage specified in the definition of Required Lenders;

(c)Increasing the amount of the Loan or any non-consenting Lender’s Commitment;

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(d)Release of any lien on any material collateral (except as Borrower is entitled to under the Loan Documents);

(e)The release or forgiveness of any Guarantor;

(f)Amendment of the provisions of this Section 13.26;

(g)Amendment of the Mandatory Prepayment Events or the application of proceeds from such events;

(h)Modification of Section 13.5.2 on the distribution of Liquidation Proceeds; and

(i)Amendment of what or how much is allowed as (i) Permitted Liens on the Individual Properties or any other Collateral for the Loan, (ii) Permitted Debt or (iii) Permitted Refinance.

13.26.3In addition to the required consents or approvals referred to in Sections 13.26.1 and 13.26.2 above, the Agent may at any time request instructions from the Required Lenders with respect to any actions or approvals which, by the terms of this Agreement or of any of the Loan Documents, the Agent is permitted or required to take or to grant without instructions from any Lenders, and if such instructions are promptly requested, the Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever for refraining from taking any action or withholding any approval under any of the Loan Documents until it shall have received such instructions from the Required Lenders.  Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders or, where applicable, all Lenders.  The Agent shall promptly notify each Lender at any time that the Required Lenders have instructed the Agent to act or refrain from acting pursuant hereto.

13.26.4Each Lender authorizes and directs the Agent to enter into the Loan Documents other than this Agreement for the benefit of the Lenders.  Each Lender agrees that any action taken by the Agent at the direction or with the consent of the Required Lenders in accordance with the provisions of this Agreement or any other Loan Document, and the exercise by the Agent at the direction or with the consent of the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders, except for actions specifically requiring the approval of all Lenders.  All communications from the Agent to the Lenders requesting Lenders’ determination, consent, approval or disapproval (i) shall be given in the form of a written notice to each Lender, (ii) shall be accompanied by a description of the matter or item as to which such determination, approval, consent or disapproval is requested, or shall advise each Lender where such matter or item may be inspected, or shall otherwise describe the matter or issue to be resolved, (iii) shall include, if reasonably requested by a Lender and to the extent not previously provided to such Lender, written materials and a summary of all oral information provided to the Agent by Borrower in respect of the matter or issue to be

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resolved, and (iv) shall include the Agent’s recommended course of action or determination in respect thereof.  Each Lender shall reply promptly, but in any event within ten (10) Business Days after receipt of the request therefor from the Agent (the “Lender Reply Period”).  Unless a Lender shall give written notice to the Agent that it objects to the recommendation or determination of the Agent (together with a written explanation of the reasons behind such objection) within the Lender Reply Period, such Lender shall be deemed to have approved of or consented to such recommendation or determination.  With respect to decisions requiring the approval of the Required Lenders or all Lenders, the Agent shall upon receiving the required approval or consent follow the course of action or determination recommended to the Lenders by the Agent or such other course of action recommended by the Required Lenders.  Where this Loan Agreement or any other Loan Document requires that Borrower deliver any documentation to Agent or any Lenders, the Borrower shall deliver the same to Agent and Agent shall promptly deliver copies of the same to each of the Lenders.

13.27Lead Arranger.  Notwithstanding the provisions of this Agreement or of the other Loan Documents, the Lead Arranger shall have no powers, rights, duties, responsibilities or liabilities with respect to this Agreement and the other Loan Documents.  To the extent requested by the Agent, the Lead Arranger has coordinated, or will coordinate, the initial syndication of the Loan and the assignment of interests in the Loan.

ARTICLE 14

GENERAL PROVISIONS.

14.1Notices.  Any notice or other communication in connection with this Loan Agreement, the Note, the Security Documents, or any of the other Loan Documents, shall be in writing, and (i) deposited in the United States Mail, postage prepaid, by registered or certified mail, or (ii) hand delivered by any commercially recognized courier service or overnight delivery service such as Federal Express, or (iii) sent by facsimile transmission if a FAX Number is designated below addressed:

If to the Borrower:

FT-FIN ACQUISITION LLC

Two Jericho Plaza, Wing A, Suite 111

Jericho, New York 11753

Attention: Peter Braverman, Executive Vice President

FAX Number: (516) 433-2777

And

FT-FIN ACQUISITION LLC

7 Bulfinch Place, Suite 500, P.O. Box 9507

Boston, Massachusetts 02114

Attention: Carolyn Tiffany, Chief Operating Officer

FAX Number: (617) 570-4710

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with copies by regular mail or such hand delivery or facsimile transmission to:

Post Heymann & Koffler LLP

Two Jericho Plaza, Wing A, Suite 111

Jericho, New York 11753

Attention: William W. Post, Esquire

FAX Number:(516) 433-2777

If to Agent:

KEYBANK NATIONAL ASSOCIATION

127 Public Square

Cleveland, Ohio 44114

Attention:

FAX Number:

And

KEYBANK NATIONAL ASSOCIATION

101 Federal Street

Boston, Massachusetts 02110

Attention: Mr. Jeffry M. Morrison

FAX Number: 617 204 5769

with copies by regular mail or such hand delivery or facsimile transmission to:

Riemer & Braunstein LLP

Three Center Plaza

Boston, Massachusetts 02108

Attention: Kevin J. Lyons, Esquire

FAX Number: (617) 880-3433

If to KEYBANK NATIONAL ASSOCIATION:

KEYBANK NATIONAL ASSOCIATION

127 Public Square

Cleveland, Ohio 44114

Attention:

FAX Number:

And

KEYBANK NATIONAL ASSOCIATION

101 Federal Street

Boston, Massachusetts 02110

Attention: Mr. Jeffry M. Morrison

FAX Number: 617 204 5769

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with copies by regular mail or such hand delivery or facsimile transmission to:

Riemer & Braunstein LLP

Three Center Plaza

Boston, Massachusetts 02108

Attention: Kevin J. Lyons, Esquire

FAX Number: (617) 692-3433

If to the Co-Lender, to the addresses set forth on the signature page or to such addresses as set forth in the Assignment and Acceptance.

Any such addressee may change its address for such notices to such other address in the United States as such addressee shall have specified by written notice given as set forth above. All periods of notice shall be measured from the deemed date of delivery.

A notice shall be deemed to have been given, delivered and received for the purposes of all Loan Documents upon the earliest of: (i) if sent by such certified or registered mail, on the third Business Day following the date of postmark, or (ii) if hand delivered at the specified address by such courier or overnight delivery service, when so delivered or tendered for delivery during customary business hours on a Business Day, or (iii) if so mailed, on the date of actual receipt as evidenced by the return receipt, or (iv) if so delivered, upon actual receipt, or (v) if facsimile transmission is a permitted means of giving notice, upon receipt as evidenced by confirmation.

14.2Limitations on Assignment.  The Borrower may not assign this Agreement or the monies due thereunder without the prior written consent of all of the Lenders in each instance, but in such event Lenders may nevertheless at their option make the Loan under this Agreement to the Borrower or to those who succeed to the title of the Borrower and all sums so advanced by Lenders shall be deemed a Loan Advance under this Agreement and not to be modifications thereof and shall be secured by all of the Collateral for the subject’s Borrower’s Obligations given at any time in connection herewith.

14.3Further Assurances.  The Borrower shall upon request from Agent from time to time execute, seal, acknowledge and deliver such further instruments or documents which Agent may reasonably require to better perfect and confirm its rights and remedies hereunder, under the Notes, under the Security Documents and under each of the other Loan Documents.

14.4Payments.  All payments under the Note shall be applied first to the payment of all fees, expenses and other amounts due to the Agent (excluding principal and interest) and, to the extent reimbursement is provided for herein, the Lenders, then to accrued interest, and the balance on account of outstanding principal under the Note; provided, however, that after an Event of Default, Liquidation Proceeds will be applied to the Obligations of the Borrower to Agent and the Lenders as otherwise provided for herein.

14.5Parties Bound.  The provisions of this Agreement and of each of the other Loan Documents shall be binding upon and inure to the benefit of the Borrower, the Agent and each of the Lenders and their respective successors and assigns, except as otherwise prohibited by this Agreement or any of the other Loan Documents.

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This Agreement is a contract by and among the Borrower, the Agent and each of the Lenders for their mutual benefit, and no third person shall have any right, claim or interest against either Agent, any of the Lenders or the Borrower by virtue of any provision hereof.

14.6Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial.

14.6.1Substantial Relationship.  It is understood and agreed that all of the Loan Documents were negotiated, executed and delivered in The Commonwealth of Massachusetts, which Commonwealth the parties agree has a substantial relationship to the parties and to the underlying transactions embodied by the Loan Documents.

14.6.2Place of Delivery.  The Borrower agrees to furnish to Agent at the Agent’s office in Boston, Massachusetts all further instruments, certifications and documents to be furnished hereunder.

14.6.3Governing Law.  This Agreement and each of the other Loan Documents shall in all respects be governed, construed, applied and enforced in accordance with the internal laws of The Commonwealth of Massachusetts without regard to principles of conflicts of law.

14.6.4Consent to Jurisdiction. The Borrower hereby consents to personal jurisdiction in any state or Federal court located within The Commonwealth of Massachusetts.

14.6.5JURY TRIAL WAIVER.  THE BORROWER, AGENT, AND EACH OF THE LENDERS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS LOAN AGREEMENT, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPT AS PROHIBITED BY LAW, EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, INDIRECT, SPECULATIVE, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  THE BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THE TRANSACTIONS CONTEMPLATED HEREBY.

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14.7Survival.  All representations, warranties, covenants and agreements of the Borrower, or a Loan Party, herein or in any other Loan Document, or in any notice, certificate, or other paper delivered by or on behalf of the Borrower or a Loan Party pursuant hereto are significant and shall be deemed to have been relied upon by Agent and each of the Lenders notwithstanding any investigation made by Agent or any of the Lenders or on its behalf and shall survive the delivery of the Loan Documents and the making of the Loan pursuant thereto.  No review or approval by Agent or the Lenders or any of their representatives, of any opinion letters, certificates by professionals or other item of any nature shall relieve the Borrower or anyone else of any of the obligations, warranties or representations made by or on behalf of Borrower or a Loan Party, or any one or more of them, under any one or more of the Loan Documents.

14.8Cumulative Rights.  All of the rights of Agent and the Lenders hereunder and under each of the other Loan Documents and any other agreement now or hereafter executed in connection herewith or therewith, shall be cumulative and may be exercised singly, together, or in such combination as Agent may determine in its sole good faith judgment.

14.9Claims Against Agent or Lenders.

14.9.1Borrower Must Notify.  The Agent and each of the Lenders shall not be in default under this Agreement, or under any other Loan Document, unless a written notice specifically setting forth the claim of the Borrower shall have been given to Agent and each of the Lenders within thirty (30) days after the subject Borrower first had actual Knowledge or actual notice of the occurrence of the event which Borrower alleges gave rise to such claim and Agent or any of the Lenders does not remedy or cure the default, if any there be, with reasonable promptness thereafter.  Such actual Knowledge or actual notice shall refer to what was actually known by, or expressed in a written notification furnished to, any of the persons or officials referred to in Exhibit D as Authorized Representatives.

14.9.2Remedies.  If it is determined by the final order of a court of competent jurisdiction, which is not subject to further appeal, that Agent or any of the Lenders has breached any of its obligations under the Loan Documents and has not remedied or cured the same with reasonable promptness following notice thereof, Agent’s and each of the Lenders’ responsibilities shall be limited to: (i) where the breach consists of the failure to grant consent or give approval in violation of the terms and requirements of a Loan Document, the obligation to grant such consent or give such approval and to pay the Borrower’s reasonable costs and expenses including, without limitation, reasonable attorneys’ fees and disbursements in connection with such court proceedings; and (ii) the case of any such failure to grant such consent or give such approval, or in the case of any other such default by Agent or any of the Lenders, where it is also so determined that Agent or any of the Lenders acted in bad faith, the payment of any actual, direct, compensatory damages sustained by the Borrower as a result thereof plus the Borrower’s reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees and disbursements in connection with such court proceedings.

14.9.3Limitations.  In no event, however, shall Agent and each of the Lenders be liable to the Borrower or to any Loan Party or anyone else for other damages such as, but not limited to, indirect, speculative, special, exemplary, punitive or consequential damages whatever the nature of the breach by Agent or any of the Lenders of its

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obligations under this Loan Agreement or under any of the other Loan Documents.  In no event shall Agent or any of the Lenders be liable to the Borrower or to any Loan Party or anyone else unless a written notice specifically setting forth the claim of the Borrower shall have been given to Agent and each of the Lenders within the time period specified above.

14.10Regarding Consents.  Except to the extent expressly provided herein, any and all consents to be made hereunder by the Agent, Required Lenders, or Lenders shall be in the discretion of the Party to whom consent rights are given hereunder.

14.11Obligations Absolute.  Except to the extent prohibited by applicable law which cannot be waived, the Obligations of the Borrower and the obligations of each Guarantor and the other Loan Parties under the Loan Documents shall be joint and several, absolute, unconditional and irrevocable and shall be paid strictly in accordance with the terms of the Loan Documents to which such Loan Party is a party under all circumstances whatsoever, including, without limitation, the existence of any claim, set off, defense or other right which the Borrower or any Loan Party may have at any time against Agent or any of the Lenders whether in connection with the Loan or any unrelated transaction.

14.12Table of Contents, Title and Headings.  Any Table of Contents, the titles and the headings of sections are not parts of this Loan Agreement or any other Loan Document and shall not be deemed to affect the meaning or construction of any of its or their provisions.

14.13Counterparts.  This Loan Agreement and each other Loan Document may be executed in several counterparts, each of which when executed and delivered is an original, but all of which together shall constitute one instrument.  In making proof of this agreement, it shall not be necessary to produce or account for more than one such counterpart which is executed by the party against whom enforcement of such loan agreement is sought.

14.14Satisfaction of Commitment.  The Loan being made pursuant to the terms hereof and of the other Loan Documents is being made in satisfaction of Agent’s and each of the Lenders’ obligations under the Commitment dated November    , 2004.  The terms, provisions and conditions of this Agreement and the other Loan Documents supersede the provisions of the Commitment.

14.15Time Of the Essence.  Time is of the essence of each provision of this Agreement and each other Loan Document.

14.16No Oral Change.  This Loan Agreement and each of the other Loan Documents may only be amended, terminated, extended or otherwise modified by a writing signed by the party against which enforcement is sought (except no such writing shall be required for any party which, pursuant to a specific provision of any Loan Document, is required to be bound by changes without such party’s assent).  In no event shall any oral agreements, promises, actions, inactions, knowledge, course of conduct, course of dealings or the like be effective to amend, terminate, extend or otherwise modify this Loan Agreement or any of the other Loan Documents.

14.17Monthly Statements.  While Agent may issue invoices or other statements on a monthly or periodic basis (a “Statement”), it is expressly acknowledged and agreed that: (i) the failure of Agent to issue any Statement on one or more occasions shall not affect the Borrower’s

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obligations to make payments under the Loan Documents as and when due; (ii) the inaccuracy of any Statement shall not be binding upon Lenders and so Borrower shall always remain obligated to pay the full amount(s) required under the Loan Documents as and when due notwithstanding any provision to the contrary contained in any Statement; (iii) all Statements are issued for information purposes only and shall never constitute any type of offer, acceptance, modification, or waiver of the Loan Documents or any of Lenders’ rights or remedies thereunder; and (iv) in no event shall any Statement serve as the basis for, or a component of, any course of dealing, course of conduct, or trade practice which would modify, alter, or otherwise affect the express written terms of the Loan Documents.

ARTICLE 15

CASUALTY AND TAKING

15.1Casualty or Taking; Obligation To Repair  In the event of the occurrence of a loss, casualty or taking as to any Mortgaged Property, Borrower shall give immediate written notice thereof to Agent and proceed with reasonable diligence, in full compliance with all Legal Requirements and the other requirements of the Loan Documents, to repair, restore, rebuild or replace the affected Mortgaged Property (each, the “Repair Work”).

15.2Adjustment of Claims  All insurance claims or condemnation or similar awards shall be adjusted or settled by Borrower, at Borrower’s sole cost and expense, but subject to Agent’s prior written approval for any Mortgaged Property, which approval shall not be unreasonably withheld; provided that (i) the Agent shall have the right to participate in any adjustment or settlement for any Mortgaged Property with respect to which the Net Proceeds in the aggregate are equal to or greater than Five Hundred Thousand Dollars ($500,000.00) and (ii) if any Event of Default exists under any of the Loan Documents, Agent shall have the right to adjust, settle, and compromise such claims without the approval of Borrower.

15.3Payment and Application of Insurance Proceeds and Condemnation Awards.

15.3.1Except as otherwise provided for herein, all Net Proceeds shall be paid to Agent and, at Agent’s option, be applied to Borrower’s Obligations or released, in whole or in part, to pay for the actual cost of repair, restoration, rebuilding or replacement (collectively, “Cost To Repair”).  If any Net Proceeds are received directly by any Loan Party, such Loan Party shall hold such Net Proceeds in trust for the Agent and shall promptly deliver such Net Proceeds in kind to the Agent.  ..

15.3.2Notwithstanding the terms and provisions hereof, with respect to any Mortgaged Property, if the Net Proceeds do not exceed Five Hundred Thousand Dollars ($500,000.00), provided no Default or Event of Default is then in existence, Agent shall release the Net Proceeds to pay for the actual Cost to Repair and the applicable Loan Party shall commence and diligently prosecute to completion, the Repair Work relative to the subject Collateral Property, with any excess being retained by the applicable Loan Party.

15.3.3Notwithstanding the terms and provisions hereof, with respect to any Mortgaged Property, if the Net Proceeds are equal to or greater than Five Hundred Thousand Dollars ($500,000.00), the Administrative Agent shall release so much of the

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Net Proceeds as may be required to pay for the actual Cost To Repair in accordance the limitations and procedures set forth in Section 15.4, if the following conditions are satisfied in a manner reasonably acceptable to the Agent:

(a)no Default or Event of Default shall have occurred and be continuing under the Loan Documents;

(b)in Agent’s good faith judgment such Net Proceeds together with any additional funds as may be deposited with and pledged to Agent, on behalf of the Lenders, are sufficient to pay for the Cost To Repair.  In order to make this determination, Agent shall be furnished by the Borrower with an estimate of the Cost to Repair accompanied by an independent architect’s or engineer’s certification as to such Cost to Repair and appropriate plans and specifications for the Repair Work;

(c)in Agent’s good faith judgment, the Repair Work can reasonably be completed on or before the time required under applicable Legal Requirements; and

(d)the Lease with respect to the Mortgaged Property shall remain in full force and effect and shall require the repair and reconstruction of the Mortgaged Property.

15.4Conditions To Release of Insurance Proceeds.  If Agent elects or is required to release insurance proceeds, Agent may impose reasonable conditions on such release which shall include, but not be limited to, the following:

15.4.1Prior written approval by Agent, which approval shall not be unreasonably withheld or delayed of plans, specifications, cost estimates, contracts and bonds for the Repair Work;

15.4.2Waivers of lien, architect’s and/or engineer’s certificates, and other evidence of costs, payments and completion as Agent may reasonably require;

15.4.3The funds shall be released upon final completion of the Repair Work, unless Borrower requests earlier funding, in which event partial monthly disbursements equal to 90% of the costs of the work completed prior to the certification by the applicable Lender’s Consultant and if there is no Lender’s Consultant, an independent architect or engineer retained by the Borrower, that the Repair Work is completed, and then upon final completion of the Repair Work as certified by such Lender’s Consultant or independent architect or engineer, and the receipt by Agent of satisfactory evidence of payment and release of all liens, the balance of the funds shall be released;

15.4.4Determination by Agent that the undisbursed balance of such Net Proceeds on deposit with Agent, together with additional funds deposited for the purpose, shall be at least sufficient to pay for the remaining Cost To Repair, free and clear of all liens and claims for lien;

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15.4.5All work to comply with the Legal Requirements applicable to the construction of the Improvements; and

15.4.6The absence of any Default under any Loan Documents.

15.5Consultant.  The Agent shall have the right to hire, at the cost and expense of the Borrower, a Lender’s Consultant to assist the Agent in the determination of the satisfaction of the conditions provided for herein for the release of the Net Proceeds, to pay the Costs to Repair and to periodically inspect the status of the construction of any Repair Work.

15.6Excess.  In the event that the Agent makes any Net Proceeds available to any Loan Party for the payment of Costs to Repair as provided for herein, upon the completion of the Repair Work as certified by the applicable Lender’s Consultant and if there is no Lender’s Consultant, an independent architect or engineer retained by the Borrower, and receipt by Agent of satisfactory evidence of payment and release of all liens, any excess Net Proceeds still held by the Agent shall be remitted by the Agent to the Borrower provided that no Event of Default shall have occurred and be continuing.

15.7Leases.  The terms and provisions of this Article 15 shall be subject to the terms and provisions of any Lease which remains in full force and effect under which the repair or reconstruction of the Mortgaged Property is required under the First Mortgage Debt.

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IN WITNESS WHEREOF this Agreement has been duly executed and delivered as a sealed instrument at Boston, Massachusetts, as of the date first written above.

BORROWER:	FT-FIN ACQUISITION LLC, a Delaware limited liability company
	By:	PARK PLAZA MALL, LLC, its sole member
		By:	FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, its sole member
			By:
			Name:	Carolyn Tiffany
			Title:	Chief Operating Officer
AGENT:	KEYBANK NATIONAL ASSOCIATION, a national banking association
	By:
		Jeffry M. Morrison
		Duly Authorized
LENDER:	KEYBANK NATIONAL ASSOCIATION, a national banking association
	By:
		Jeffry M. Morrison
		Duly Authorized
	NEWSTAR CP FUNDING LLC, a Delaware limited liability company
	By:	NEWSTAR FINANCIAL, INC., its designated manager
		By:
		Name:
		Title:

S1

EXHIBITS:

	Section Reference Number
Exhibit A - Definitions	1.1
Exhibit B - Use of Proceeds
Exhibit C - Notes
Exhibit D - Authorized Representatives	4
Exhibit E - Required Property, Hazard and Other Insurance	5.1.13, 5.2.11, 6.1.20, 6.2.17, 7.1.5, 7.2.5
Exhibit F - Ownership Interests and Taxpayer Identification Numbers	6.4(a)
Exhibit G-1 Compliance Certificate the Borrower	7.1.2(i)(d)
Exhibit G-2 - Financial Covenant Compliance Certificate.	7.2.1(c)
Exhibit H - Form of Assignment and Acceptance
Exhibit I - Lenders’ Commitments	Exhibit A
Exhibit J - Individual Properties	Exhibit A
Exhibit K - Loan Agenda	Exhibit A
Exhibit M - the Borrower Partnerships and Borrower LLCs	Exhibit A
Exhibit P - Cash Flow Projections	Exhibit A
Exhibit R - Accounts	7.14
Exhibit ALA - Allocated Loan Amount

EXHIBIT A TO LOAN AGREEMENT

DEFINITIONS

Accounts shall mean, collectively, the Depository Accounts.

Acquisition  as defined in Section 1.3.

Adjusted LIBOR Rate:  For any LIBOR Rate Interest Period, an interest rate per annum equal to the sum of (A) the rate obtained by dividing (x) the LIBOR Rate for such LIBOR Rate Interest Period by (y) a percentage equal to one hundred percent (100%) minus the Reserve Percentage for such LIBOR Rate Interest Period and (B) the LIBOR Rate Margin.

Adjusted LIBOR Rate Advance.  The term “Adjusted LIBOR Rate Advance” means any principal outstanding under this Agreement which pursuant to this Agreement bears interest at the Adjusted LIBOR Rate.

Adjusted Prime Rate:  A rate per annum equal to the sum of (a) the Prime Rate Margin and (b) the greater of (i) the Prime Rate or (ii) one percent (1%) in excess of the Federal Funds Effective Rate.  Any change in the Adjusted Prime Rate shall be effective immediately from and after a change in the Adjusted Prime Rate (or the Federal Funds Effective Rate, as applicable).

Adjusted Prime Rate Advance.  The term “Adjusted Prime Rate Advance” means any principal amount outstanding under this Agreement which pursuant to this Agreement bears interest at the Adjusted Prime Rate.

Affiliate shall mean, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person.  For purposes of this definition, control of a Person shall mean the power, direct or indirect, (i) to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

Agent.  KEYBANK NATIONAL ASSOCIATION, acting as agent for the Lenders.

Aggregate Investment Capitalization shall mean, with respect to the Borrower’s Investments,the value of the non-real estate assets, as calculated by the Borrower and approved by the Agent in its reasonable discretion, plus the value of the underlying real estate assets.  The underlying real estate assets will be valued based upon a 10 year discounted Cash Flow.  The discount rate will be 9% and the reversionary capitalization rate will be 11%.  The Cash Flow will be based upon (a) in place rental income through the expiration of the primary term of the lease, and (b) at primary term maturity of a given lease, (i) the lease rate will be the renewal lease rate if the renewal rent is less than Market Rent, and (ii) if the renewal rate is greater than the Market Rent, the post primary term income stream will be based on the Market Rent based upon the following assumptions: (1) the renewal probability of the tenant remaining at lease expiration is 65%, (2) the downtime at expiration is estimated to be nine (9) months, (3) the Market Rent is assumed to grow at 0% per year from the analysis made at the Closing Date, and (4) the rent employed for these spaces is the Market Rent, regardless as to the rate in the renewal option, all of the foregoing as determined solely by the Agent.

Agreement as defined in the Preamble.

Allocated Loan Amount shall mean, for each Individual Property, the amount set forth in Exhibit ALA.

Applicable Rate:  As such term is defined in Section 2.4.1.

Appraisal as defined in Section 7.19.

Arranger shall mean KEYBANC CAPITAL MARKETS.

Authorized Representatives as defined in Section 4.1 and listed on Exhibit D.

Borrower as defined in the Preamble.

Borrower LLCs  shall mean, singly and collectively, from time to time, those limited liability companies which are wholly-owned and controlled by the Borrower, including, without limitation, those listed on Exhibit M.

Borrower Partnerships  shall mean, singly and collectively, from time to time, those limited partnerships whose limited partnership interests are wholly-owned and controlled by the Borrower and whose sole general partner is FT-FIN GP, including, without limitation, those listed on Exhibit M.

Borrower Subsidiaries shall mean all of the Subsidiaries of the Borrower, and all Subsidiaries of Subsidiaries of the Borrower, including, without limitation, the Borrower Partnerships and the Borrower LLCs, as listed on Exhibit M.

Breakage Costs:  (a) The cost to Lender of re-employing funds bearing interest at an Adjusted LIBOR Rate, incurred (or expected to be incurred) in connection with (i) any payment of any portion of the Loan bearing interest at an Adjusted LIBOR Rate prior to the termination of any applicable LIBOR Rate Interest Period, (ii) the conversion of an Adjusted LIBOR Rate to any other applicable interest rate on a date other than the last day of the relevant LIBOR Rate Interest Period, or (iii) the failure of Borrower to draw down, on the first day of the applicable LIBOR Rate Interest Period, any amount as to which Borrower has elected a LIBOR Rate Option and (b) any amounts payable by Borrower under any Interest Rate Agreement in connection with termination of such Agreement.

Business Day shall mean any day of the year on which offices of Agent are not required or authorized by law to be closed for business in Boston, Massachusetts.  If any day on which a payment is due is not a Business Day, then the payment shall be due on the next day following which is a Business Day, and such extension of time shall be included in computing interest and fees in connection with such payment.  Further, if there is no corresponding day for a payment in the given calendar month (i.e., there is no “February 30th”), the payment shall be due on the last Business Day of the calendar month.

Calculation Date as defined in Section 7.28.1(a)(i).

Calculation Period as defined in Section 7.28.1(a)(ii).

Cash Flow shall mean, in each calendar year, in each instance determined in a manner satisfactory to the Agent, the aggregate sum of (i) all revenues and cash receipts of the Borrower Subsidiaries less (ii) the sum of the Borrower Subsidiaries’ (a) property level operating expenses including but not limited to ground rent, (b) management fees and (c) administrative fees.

Cash Flow Projections shall mean a detailed schedule of all cash Distributions projected to be made to the Borrower and FT-FIN GP from the Borrower Subsidiaries within the next one hundred and eight (180) days, as detailed on Exhibit P, being the Cash Flow Projections as of the Closing Date based upon information then available to the Borrower, and subject to change as shall be detailed in the respective Officer’s Certificate to be provided to the Agent as set forth herein.

Cash Management Agreement one or more cash management agreements to be entered into pursuant to Article 7.

Change of Control shall mean the occurrence of any of the following, as determined solely by the Agent (for purposes of this definition, ownership of interests in a Borrower that are subject to a Lien permitted under the Security Documents shall be deemed beneficially owned by the pledgor thereof):

1.A change in the identity of any general partner, managing member, and/or any material change in the effective control of any general partner or managing member of any Loan Parties (other than the Borrower) and/or any Borrower Subsidiary, such that effective control is not in the Borrower (except as to any change in the effective control of any Loan Party which is released as provided for herein from its obligations under the Loan Documents);

2.Except as provided in Section 8.3.8, a change in the identity of the member of the Borrower and the partners of FT-FIN GP and/or any material change in the effective control of the member of the Borrower, from the identity and control structure existing as of the Funding Date;

3.A change in the identity of any general partner, managing member, and/or effective control of any general partner or managing member of any Loan Parties which is a Loan Party, such that effective control is not in any other Loan Party; or

4.The death or disability of both of Michael Ashner and Peter Braverman, or the failure of both of Michael Ashner and Peter Braverman, at any time to exercise that authority and discharge those management responsibilities with respect to the Borrower as are exercised and discharged by such Person at the execution of this Agreement; provided, however, the death or disability of both Michael Ashner and Peter Braverman shall not be a default hereunder if within thirty (30) days of the death or disability of the second to die or become disabled, the Borrower provides the Agent with evidence satisfactory to the Agent of acceptable replacement or substitute management of the Borrower and their respective Subsidiaries.

Churchill Owner shall mean FT-Churchill Property L.P., a Delaware limited partnership.

Churchill Property shall mean the Individual Property located at 1310 Beulah Road, Churchill, Pennsylvania, ground leased by the Churchill Owner.

Closing Date as defined in Section Article 5.

Code shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

Collateral. as defined in Section 3.1.

Commitment shall mean, with respect to each Lender, the amount set forth on Exhibit I hereto as the amount of such Lender’s commitment to make advances to the Borrower, as may be amended from time to time by the Agent as provided in Article 13.

Consents as defined in Section 5.4.

Consolidated Debt Service as defined in Section 7.28.1(a)(viii).

Consolidated Debt Service Coverage as defined in Section 7.28.1(a)(vi).

Consolidated Leverage Ratio as defined in Section.7.28.2.

Consolidated Net Cash Flow as defined in Section 7.28.1(a)(vii).

Debt  shall mean, with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of such Person for the deferred purchase price of property or services (other than property and services purchased, and expense accruals and deferred compensation items arising, in the ordinary course of business), (iii) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments (other than performance, surety and appeal bonds arising in the ordinary course of business), (iv) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (v) all obligations of such Person under leases which have been, or should be, in accordance with generally accepted Accounting principles, recorded as capital leases, to the extent required to be so recorded, (vi) all reimbursement, payment or similar obligations of such Person, contingent or otherwise, under acceptance, letter of credit or similar facilities (other than letters of credit in support of trade obligations or in connection with workers’ compensation, unemployment insurance, old-age pensions and other social security benefits in the ordinary course of business), (vii) all Debt in the nature of that referred to in clauses (i) through (vi) above which is guaranteed directly or indirectly by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (A) to pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (B) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss in respect of such Debt, (C) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or

such services are rendered) or (D) otherwise to assure a creditor against loss in respect of such Debt, (viii) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any indebtedness referred to in clause (i) through (iv) above of any Person, either directly or indirectly, and (ix) all Debt referred to in clauses (i) through (vi) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien, security interest or other charge or encumbrance upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt.

Debt Service as defined in Section 7.28.1(a)(iii).

Debt Service Coverage as defined in Section 7.28.1(a)(iv).

Default as defined in Section 10.1.

Defaulting Lender:  As such term is defined in Section 13.5.3.

Default Rate as defined in Section 2.5.5.

Depository Account Pledge and Security Agreement as defined in Section 3.1.4.

Depository Accounts  as defined in Section 3.1.4.

Distribution shall mean, with respect to any Person, that such Person has paid a dividend or returned any equity capital to its stockholders, members or partners or made any other distribution, payment or delivery of property (other than common stock or partnership or membership interests of such Person) or cash to its stockholders, members or partners as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of any class of its capital stock or any membership or partnership interests (or any options or warrants issued by such Person with respect to its capital stock or membership or partnership interests), or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any shares of any class of the capital stock or any membership or partnership interests of such Person (or any options or warrants issued by such Person with respect to its capital stock or membership or partnership interests). Without limiting the foregoing, “Distributions” with respect to any Person shall also include all payments made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans, and any proceeds of a dissolution or liquidation of such Person.

Dollars shall mean lawful money of the United States.

Economic Discontinuance Rights shall mean the right of a tenant under a Lease relative to any Individual Property to terminate the Lease prior to the expiration of the primary term of the Lease by making a Rejectable Offer to the applicable Property Owner, all of the foregoing as and when provided for in the Lease relative to such Individual Property.  If the Rejectable Offer is accepted by the Property Owner, the Individual Property is to be sold to the said tenant for the amount as set forth in the Lease.  If the Rejectable Offer is rejected by the Property Owner, the Lease terminates as set forth in the Lease.

Economic Discontinuance Sale shall mean the sale of an Individual Property to a tenant upon the acceptance of a Rejectable Offer by the applicable Property Owner.

ED Cash Flow as defined in Section 7.23.6.

ED Properties shall mean all Individual Properties as to which a Property Owner has rejected the Rejectable Offer made by a tenant pursuant to the tenant’s exercise of its Economic Discontinuance Rights.  An Individual Property shall no longer be considered an ED Property at such time as such Individual Property evidences a minimum ratio of cash flow to debt service (as determined by the Agent based solely on revenues and debt service of such Individual Property based on leases executed in accordance with the requirements of Section 7.21), of no less than 1.30 to 1.0.  The value and income from all ED Properties will be excluded when calculating compliance (or pro forma compliance, as applicable) with the Financial Covenants in any instance, until such time as the Borrower shall have executed (a) a binding, arms length purchase and sale agreement with respect to such ED Property, or ( b) a Lease in accordance with the provisions of Section 7.21 hereof.

Eligible Assignee:  (i) Any Lender; (ii) any commercial bank, savings bank, savings and loan association or similar financial institution which (A) has total assets of One Billion Dollars ($1,000,000,000) or more, (B) is “well capitalized” within the meaning of such term under the regulations promulgated under the auspices of the Federal Deposit Insurance Corporation Improvement Act of 1991, (C) in the sole judgment of the Agent, is engaged in the business of lending money and extending credit, and buying loans or participations in loans under credit facilities substantially similar to those extended under this Agreement, and (D) in the reasonable judgment of the Agent, is operationally and procedurally able to meet the obligations of a Lender hereunder to the same degree as a commercial bank; (iii) any insurance company in the business of writing insurance which (A) has total assets of One Billion Dollars ($1,000,000,000) or more (B) is “best capitalized” within the meaning of such term under the applicable regulations of the National Association of Insurance Commissioners, and (C) meets the requirements set forth in subclauses (C) and (D) of clause (ii) above; and (iv) any other financial institution having total assets of One Billion Dollars ($1,000,000,000)  (including a mutual fund or other fund under management of any investment manager having under its management total assets of One Billion Dollars ($1,000,000,000) or more) which meets the requirement set forth in subclauses (C) and (D) of clause (ii) above; provided that each Eligible Assignee must (w) be organized under the Laws of the United States of America, any state thereof or the District of Columbia, or, if a commercial bank, be organized under the Laws of the United States of America, any state thereof or the District of Columbia, the Cayman Islands or any country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of such a country, (x) act under the Loan Documents through a branch, agency or funding office located in the United States of America, (y) be exempt from withholding of tax on interest and deliver the documents related thereto pursuant to the Internal Revenue Code as in effect from time to time and (z) not be the Borrower or an Affiliate of the Borrower.

Environmental Indemnity as defined in Section 3.1.8.

Environmental Laws as defined in the Environmental Indemnity.

ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references

to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

ERISA Affiliate shall mean each person (as defined in Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of a Borrower would be deemed to be a “single employer”  within the meaning of Section 414(b), (c), (m) or (o) of the Code.

Escrow Agreement Respecting Ground Lease Extensions and Lease Options as defined in Section 3.1.10.

Escrow Agreement Respecting Mortgage as defined in Section 3.1.9.

Event of Default as defined in Section 10.1.

Extended Maturity Date as defined in Section 2.2.

Extended Term as defined in Section 2.2.

Extension Fee as defined in Section 2.6.

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

Financial Covenants  shall mean those covenants of the Borrower set forth in Section 7.28.

First Extended Maturity Date as defined in Section 2.2.

First Extended Term as defined in Section 2.2.

First Mortgage Debt shall mean, from time to time, any obligations of a Property Owner secured by a first mortgage or first deed of trust on one or more Individual Properties, as of the Closing Date as set forth in Schedule 6.17.2.

First Union shall mean First Union Real Estate Equity and Mortgage Investments, an Ohio business trust.

Fiscal Year shall mean each twelve month period commencing on January 1 and ending on December 31.

Formation Documents shall mean, singly and collectively, the partnership agreements, joint venture agreements, limited partnership agreements, limited liability company or operating agreements and certificates of limited partnership and certificates of formation, articles (or certificate) of incorporation and by-laws and any similar agreement, document or instrument of any Person.

Free Cash Flow shall mean for any four (4) fiscal quarters of the Borrower the Net Cash Flow for such period less (i) the Debt Service for such period.

FT-FIN GP shall mean FT-FIN GP LLC, a Delaware limited liability company, being the sole general partner of each Borrower Partnership.

Funding Date as defined in Section 0.

GAAP shall mean generally accepted Accounting principles in the United States of America as of the date applicable.

Governmental Authority shall mean any court, board, agency, commission, office or authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.

Ground Leases shall mean, from time to time, any Ground Lease relative to an Individual Property as to which a Property Owner is the ground lessee, including, without limitation, any ground lease which shall be entered into in connection with the exercise by an Property Owner of a Remainder Ground Lease Option.

Ground Lease Extension Options as defined in Section 3.1.10(a).

Ground Lease Extension Option Schedule as defined in Section 6.17.6

Guaranty as defined in Section 3.1.7.

Guarantor as defined in Section 1.4.

Hazardous Materials shall mean and include asbestos, flammable materials, explosives, radioactive substances, polychlorinated biphenyls, radioactive substances, other carcinogens, oil and other petroleum products, pollutants or contaminants that could be a detriment to the environment, and any other hazardous or toxic materials, wastes, or substances which are defined, determined or identified as such in any past, present or future federal, state or local laws, rules, codes or regulations, or any judicial or administrative interpretation of such laws, rules, codes or regulations.

Indemnified Party as defined in Sections 7.20.

Indemnitor as defined in Section 3.1.8.

Independent shall mean, when used with respect to any Person, a Person who (i) is in fact independent, (ii) does not have any direct financial or indirect financial interest (other than amounts payable to such Person for serving as a director) in the Borrower, any Borrower Subsidiary, or any Loan Party or in any Affiliate of any thereof or in any constituent partner or member of the Borrower, any Borrower Subsidiary, or any Loan Party or any Affiliate of any thereof and (iii)  is not connected with the Borrower, any Borrower Subsidiary, or any Loan Party or any Affiliate thereof or any constituent partner of the Borrower, any Borrower Subsidiary, or any Loan Party or any Affiliate of any thereof as an officer, employee, promoter, underwriter, trustee, partner, director, or person performing similar functions.  Any such Person shall not be deemed to fail to comply with the requirements of clause (iii), above, solely due to

such Person serving as an Independent director of First Union.  Whenever it is herein provided that any Independent Person’s opinion or certificate shall be provided, such opinion or certificate shall state that the Person executing the same has read this definition and is Independent within the meaning hereof.

Individual Property and Individual Properties shall mean, from time to time, with respect to each Property Owner, each real estate property owned by such entity, together with all improvements, fixtures, equipment, and personalty relating to such property, with the Individual Properties as of the date hereof being listed on Exhibit J hereto.

Initial Advance  as defined in Section 2.1.2(a).

Initial Term as defined in Section 2.2.

Interest Rate Agreement:  An Interest Rate Protection Product purchased by Borrower from Agent.

Interest Rate Protection Product:  An interest rate hedging product, such as a cap or swap.

Investment shall mean the acquisition of any real or tangible personal property or of any stock or other security, any loan, advance, bank deposit, money market fund, contribution to capital, extension of credit (except for accounts receivable arising in the ordinary course of business and payable in accordance with customary terms), or purchase or commitment or option to purchase or otherwise acquire real estate or tangible personal property or stock or other securities of any party or any part of the business or assets comprising such business, or any part thereof.

Knowledge shall mean with respect to the Borrower and any of their respective Subsidiaries, the knowledge of any of Michael Ashner, Peter Braverman, Thomas Staples, Carolyn Tiffany, or Jay Cramer, or any Person who shall at any time replace any of the foregoing.

Late Charge as defined in Section 2.5.6.

Lease shall mean any lease relative to all or any portion of an Individual Property.

Lease Schedule as defined in Section 6.17.5.

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

Lenders as defined in the Preamble.

Lender Default Obligation:  As such term is defined in Section 13.5.3.

Lender Reply Period:  As such term is defined in Section 13.26.

LIBOR Business Day:  A Business Day on which dealings in U.S. dollars are carried on in the London Interbank Market.

LIBOR Rate:  For any LIBOR Rate Interest Period, the average rate (rounded upwards to the nearest 1/16^th) as shown in Dow Jones Markets (formerly Telerate) (Page 3750) at which deposits in U.S. dollars are offered by first class banks in the London Interbank Market at approximately 11:00 a.m. (London time) on the day that is two (2) LIBOR Business Days prior to the first day of such LIBOR Rate Interest Period with a maturity approximately equal to such LIBOR Rate Interest Period and in an amount approximately equal to the amount to which such LIBOR Rate Interest Period relates, adjusted for reserves and taxes if required by future regulations.  If Dow Jones Markets no longer reports such rate or Agent determines in good faith that the rate so reported no longer accurately reflects the rate available to Agent in the London Interbank Market, Lender may select a replacement index.

LIBOR Rate Interest Period:  With respect to each amount bearing interest at a LIBOR based rate, a period of one (1), two (2), three (3), or six (6) months, to the extent deposits with such maturities are available to Agent, commencing on a LIBOR Business Day, as selected by Borrower provided, however, that (i) any LIBOR Rate Interest Period which would otherwise end on a day which is not a LIBOR Business Day shall continue to and end on the next succeeding LIBOR Business Day, unless the result would be that such LIBOR Rate Interest Period would be extended to the next succeeding calendar month, in which case such LIBOR Rate Interest Period shall end on the next preceding LIBOR Business Day, (ii) any LIBOR Rate Interest Period which begins on a day for which there is no numerically corresponding date in the calendar month in which such LIBOR Rate Interest Period would otherwise end shall instead end on the last LIBOR Business Day of such calendar month, and (iii) Borrower may not select a LIBOR Rate Interest Period which would end after the Maturity Date..

LIBOR Rate Margin:   Four and one half (4.50%) percent (450 basis points) per annum.

LIBOR Rate Option:  As defined in Section 2.4.

Lien shall mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer, 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, and mechanic’s, materialmen’s and other similar liens and encumbrances.

Licenses and Permits shall mean all licenses, permits, authorizations and agreements issued by or agreed to by any governmental authority, including, but not limited to, building permits, occupancy permits and such special permits, variances and other relief as may be required pursuant to Legal Requirements which may be applicable to the Individual Property.

Liquid Assets shall mean the sum of the following unencumbered (other than by Liens held by the Agent on behalf of the Lenders) assets: (i) all cash (denominated in United States dollars), (ii) any demand deposits, (iii) marketable securities consisting of short-term (maturity of one year or less) obligations issued or guaranteed as to principal and interest by the United States of America, (iv) short-term certificates of deposit, with a maturity of one year or less, issued by any bank organized under the laws of the United States of America having total assets in excess of

$1,000,000,000.00, and (v) any other securities acceptable to the Agent as evidenced by the Agent’s written approval.

Liquidation Proceeds. Amounts received by the Agent and/or the Lenders in the exercise of the rights and remedies under the Loan Documents (including, but not limited to, all rents, profits and other proceeds received by the Agent and/or the Lenders from the liquidation of, or exercising rights upon the occurrence of an Event of Default relative to, any Collateral, but not including any amount bid at a foreclosure sale or on behalf of the Agent or otherwise credited to a Borrower in, any deed-in-lieu of foreclosure or similar transaction).

Loan as defined in Section 1.3.

Loan Advance  each advance of proceeds of the Loan hereunder.

Loan Agenda shall mean that Document Agenda respecting the establishment of the Loan annexed hereto as Exhibit K.

Loan Agreement as defined in the Preamble.

Loan Documents as defined in Section 3.1.

Loan Party and Loan Parties shall mean, singly and collectively, the Borrower, FT-FIN GP, and the Borrower Subsidiaries.

Mandatory Prepayment Event as defined in Section 2.5.

Mandatory Principal Prepayments as defined in Section 2.5.1(b).

Market Rent shall mean, at any point of determination, then current rentals being charged to new tenants for comparable quality space located on comparable quality property within the subject geographic area of the subject Individual Property, taking into account and giving effect to, without limitation, such considerations as size, location of the Individual Property, lease term and level and quality of building construction and space improvements, tenant allowances, and rent concessions, all as reasonably determined by the Agent.

Material Adverse Effect shall mean a material adverse effect on, determined separately with respect to the Borrower, (i) the business, assets, prospects, operations or financial or other condition of any of the Borrower and/or, taken as a whole, any of the other Loan Parties, including, without limitation, all Distributions to be made pursuant to Cash Flow Projections (ii) the ability of Borrower, the Borrower Subsidiaries, and/or the other Loan Parties to perform any material Obligations or to pay any Obligations which it is obligated to pay in accordance with the terms hereof or of any other Loan Document, (iii) the rights of, or benefits available to, the Agent and/or any of the Lenders under any Loan Document or (iv) any Lien given to Agent and/or any of the Lenders on any material portion of the Collateral or the priority of any such Lien.

Maturity shall mean the Maturity Date, or, if the Maturity Date has been extended pursuant to the provisions of the Loan Agreement, the applicable Extended Maturity Date, or in any instance, upon acceleration of the Loan, if the Loan has been accelerated by Lenders upon an Event of Default.

Maturity Date as defined in Section 2.2.

Minimum Consolidated Net Worth as defined in Section 7.28.4.

Mortgage Debt shall mean, singly and collectively, the First Mortgage Debt.

Mortgage Debt Schedule as defined in Section 6.17.8.

Mortgaged Property shall mean any Individual Property which is subject to a mortgage or deed of trust in favor of the Agent to secure the Obligations (including, without limitation, the Orlando Property).

Net Cash Flow as defined in Section 7.28.1(a).

Net Proceeds shall mean the gross proceeds received from any insurance recovery or condemnation award relating to any casualty or taking of any asset less the aggregate of (i) obligations due to the holders of Mortgage Debt thereon, including, without limitation, any prepayment penalties or fees, and (ii) all reasonable costs and expenses incurred in the collection of such amounts, including, but not limited to, reasonable attorney’s fees, payable to third-parties who are not a Borrower Subsidiary or other Loan Party or an Affiliate thereof.

Net Refinancing Proceeds shall mean the gross proceeds received from the closing of the financing or refinancing of a specified asset less the aggregate of (i) obligations due to the holders of Mortgage Debt thereon, including, without limitation, any prepayment penalties or fees, and (ii) reasonable closing costs payable to third-parties who are not a Borrower Subsidiary or other Loan Party or an Affiliate thereof.

Net Sales Proceeds shall mean the gross sale proceeds received from the closing of the sale of a specified asset less the aggregate of (i) obligations due to the holders of Mortgage Debt thereon, including, without limitation, any prepayment penalties or fees, and (ii) usual closing adjustments, and (iii) reasonable closing costs payable to third-parties who are not a Borrower Subsidiary or other Loan Party or an Affiliate thereof.

Note shall mean, singly and collectively, the Note or Notes payable to Agent on behalf of the Lenders in the original principal amount of Fifty-Three Million Dollars ($53,000,000.00).

Notice of Intention to Distribute an defined in Section 9.2.1.

Obligations shall mean all indebtedness, obligations and liabilities of the Borrower to the Agent and/or any Lender existing on the date of this Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, assignment, operation of law or otherwise, arising or incurred under this Agreement, the Note, or any of the other Loan Documents, including, without limitation, under any Interest Rate Protection Agreement with the Agent with respect to the Loan.

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

OFAC Review Process:  That certain review process established by Agent to determine if any potential transferee of any interests or any assignee of any portion of the Loan or any of their members, officers or partners area a party with whom Agent and any Lender are restricted from doing business under (i) the regulations of OFAC, including those Persons named on OFAC’s Specially Designated and Blocked Persons list, or (ii) any other statute, executive order or other governmental action or list (including the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism).

Officer’s Certificate shall mean a certificate delivered to the Agent by a Borrower, a Subsidiary of a Borrower, or a Guarantor, as the case may be, respectively, which is signed by an authorized officer thereof (or an authorized officer of the direct or indirect managing general partner or managing member, as applicable, of such Borrower, the Borrower Subsidiary, or such Guarantor, if and as applicable).

One-Month LIBOR Rate  as defined in Section 2.4

Orlando Owner shall mean FT-Orlando Property LLC, a Delaware limited liability company.

Orlando Property shall mean the Individual Property located at 4400 Alafaya Trail, Orlando, Florida ground leased by the Orlando Owner.

Ownership Interest Agreements shall mean all of the agreements establishing any Remainder Ground Lease Option or Ground Lease Extension Option in favor of a Property Owner in an Individual Property, including the Ground Leases.

Park Plaza as defined in Section 1.2.

Payment Direction Letters as defined in Section 7.15.

PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

Percentage:  With respect to each Lender, the percentage that its Commitment constitutes of the maximum amount of the Loan.

Permitted Debt as defined in Section 8.4.

Permitted Distributions as defined in Section 8.18.

Permitted Investments as defined in Section 8.19.

Permitted Liens as defined in Section 8.2.

Permitted Refinance as defined in Section 8.4.3.

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

Plan shall mean any multiemployer or single-employer plan as defined in Section 4001 of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) a Borrower or any Subsidiary of a Borrower or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which such Person or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.

Prime Rate  That interest rate established from time to time by KeyBank National Association as its prime rate, whether or not such rate is publicly announced; the Prime Rate may not be the lowest interest rate charged by KeyBank National Association for commercial or other extensions of credit.

Prime Rate Margin  Two and one half (2.50%) percent (250 basis points) per annum.

Property Owners shall mean, singly and collectively, the Borrower Partnerships and the Borrower LLCs being the owners, land estate holders, or ground lessees of the Individual Properties.

Rejectable Offer shall mean the rejectable offer of any tenant pursuant to a Lease respecting any Individual Property to purchase the respective Individual Property at a predetermined price, as and when may be specifically provided in any such Lease respecting any Individual Property.

Rejection Test as defined in Section 7.23.6.

Related Documents shall mean, singly and collectively, the Formation Documents, each Ownership Interest Agreement, the Payment Direction Letters, and the documents establishing and evidencing any Mortgage Debt.

Related Fund shall mean, with respect to a Lender which is a fund that invests in loans, any other such fund managed by the same investment advisor as such Lender or by an Affiliate of such Lender or such advisor.

Remainder Ground Lease Option Schedule as defined in Section 6.17.7.

Reportable Event  shall mean an event described in Section 4043(b) of ERISA with respect to a Plan other than those events as to which the 30-day notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 2615, or as otherwise now or hereafter defined in ERISA.

Required Lenders:  Lenders holding Percentages aggregating at least sixty six and two-thirds percent (66 2/3%).

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

Second Extended Maturity Date as defined in Section 2.2.

Second Extended Term as defined in Section 2.2.

Security Documents as defined in Section 3.2.

Single-Purpose Entity shall mean, with respect to a Person, that such Person has Formation Documents which contain generally the following provisions (with such variations as required by the provisions of the First Mortgage Debt), and has agreed to abide by such terms and conditions:

(a)Such Person shall not engage in any business or activity other than acquiring by merger the assets and liabilities of the applicable Property Owner.

(b)Such Person shall not acquire or own any material assets other than (i) the real property owned by the Borrower Partnership or Borrower LLC on the Closing Date, and (ii) such incidental personal property as may be necessary for the operation of such real property.

(c)Such Person shall not fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation and under the applicable laws of any state or states in which the ownership of its assets or the conduct of its business requires such qualification.

(d)Such Person shall not incur any Debt, except as provided herein.

(e)Such Person shall not merge into or consolidate with any person or entity or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure.

(f)Such Person shall not own any subsidiary or make any investment in any person or entity.

(g)Such Person shall not file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors.

(h)Such Person shall agree to abide by the following covenants in its management and operation:

(i)To maintain its records, books of account and bank accounts separate and apart from those of any other Person;

(ii)Not to commingle assets with those of any other Person;

(iii)Not to maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

(iv)To maintain separate financial statements;

(v)To pay its own liabilities out of its own funds;

(vi)To observe all corporate, partnership or limited liability company formalities;

(vii)To maintain an arm’s-length relationship with its Affiliates;

(viii)To pay the salaries of its own employees and maintain a sufficient number of employees in light of its contemplated business operations;

(ix)Not to guarantee or become obligated for the debts of any other entity or hold out its credit as being available to satisfy the obligations of others, except as provided for herein;

(x)Not to acquire obligations or securities of its partners, members or shareholders;

(xi)To allocate and charge fairly and reasonably any overhead for shared office space or any common employee or overhead shared with affiliates;

(xii)To use separate stationery, invoices and checks;

(xiii)Not to pledge its assets for the benefit of any other entity or make any Loan or advances to any entity, including any general partner or any affiliate thereof, except as provided for herein;

(xiv)To hold itself out to the public as a legal entity separate and distinct from any other Person and to conduct its business solely in its own name in order not (A) to mislead others as to the identity with which such other Person is transacting business, or (B) to suggest that such Person is responsible for the debts of any third party (including any general partner or any affiliate thereof or any other Person);

(xv)To correct any known misunderstanding regarding its separate identity; and

(xvi)To maintain adequate capital and cash on hand for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.

State shall mean the State or Commonwealth in which the subject of such reference or any part thereof is located.

Statement as defined in Section 14.17.

Subsequent Advance as defined in Section 2.1.2(b).

Subsidiary shall mean, with respect to any Person, any corporation, association, limited liability company, partnership or other business entity of which securities or other ownership interests representing more than 50% of either (x) the beneficial ownership interest or (y) ordinary voting power are, at the time as of which any determination is being made, owned or controlled, directly or indirectly, by such Person.

Title Reports as defined in Section 5.10(a).

Total Commitment.  The sum of the Commitments of the Lenders, as in effect from time to time.

UCC or the Uniform Commercial Code means the Uniform Commercial Code in effect in a State.

Unfunded Current Liability of any Plan means the amount, if any, by which the actuarial present value of the accumulated plan benefits under the Plan as of the close of its most recent plan year exceeds the fair market value of the assets allocable thereto, each determined in accordance with Statement of Financial Accounting Standards No. 35, based upon the actuarial assumptions used by the Plan’s actuary in the most recent annual valuation of the Plan.

United States and U.S. shall each mean the United States of America.

EX-10.2

Exhibit 10.2

OPEN-END LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

This is an Open-End Leasehold Mortgage and secures future advances pursuant to 42 PA C.S.A. §§§ 8143 and 8144, act. No. 126 of 1990.

KNOW ALL MEN BY THESE PRESENTS that FT-CHURCHILL PROPERTY L.P., a Delaware limited partnership having an address at c/o First Union Real Estate Equity and Mortgage Investments, 7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114 (hereinafter called “Mortgagor”), for consideration paid, hereby grants, conveys, transfers, assigns and sets-over unto KEYBANK NATIONAL ASSOCIATION, a national banking association,as agent under a Loan Agreement (hereinafter called the “Loan Agreement”) of even date among the FT-FIN ACQUISITION LLC, a Delaware limited liability company (the “Borrower”), KeyBank National Association and the other lending institutions which become parties to the Loan Agreement (KeyBank National Association and the other lending institutions which become parties to the Loan Agreement are collectively referred to as the “Lenders” and individually as the “Lender”), and KeyBank National Association, as Agent (hereinafter called the “Agent”), having a place of business at 101 Federal Street, Boston, Massachusetts 02110, with mortgage covenants, the Mortgaged Property (as defined below) to secure the Obligations (as defined below).

This Mortgage (as defined below) is an “Open-End Mortgage” as set forth in 42 PA. C.S.A. § 8143 and secures all obligations by the Guaranty (as defined below), plus accrued and unpaid interest, which obligations include, but are not limited to, advances for the payment of taxes and municipal assessments, maintenance charges, insurance premiums, costs incurred for the protection of the Property or the lien of this Mortgage, expenses incurred by Agent by reason of any Default or circumstance, which with the passage of time, or giving of notice, or both, would constitute a Default, including, without limitation, legal fees and costs, and advances for construction, alteration or renovation on the Property, together with all other sums due hereunder or secured hereby.

The term “Mortgagor” shall include, wherever the context permits, its successors and assigns.

The terms “Agent” and “Lenders” shall include, wherever the context permits, their respective successors and assigns as the holder for the time being of this Open-End Leasehold Mortgage and Security Agreement and other Obligations hereby secured.

R E C I T A L S:

A.Pursuant to the terms and conditions of the Loan Agreement, the Lenders have agreed to make a Loan to the Borrower in a principal amount not to exceed FIFTY-THREE MILLION DOLLARS ($53,000,000.00);

B.The Mortgagor has executed and delivered to the Agent its Guaranty of even date herewith (as such may be amended, modified, supplemented or restated hereafter, the “Guaranty”), pursuant to which the Mortgagor has guaranteed the obligations of the Borrower under the Loan Agreement;

C.The Mortgagor owns (i) a leasehold estate interest in the Land (as defined herein) as established under the Ground Lease (as defined herein) which is currently set to expire on

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December 31, 2010, unless otherwise renewed pursuant to its terms and conditions, and (ii) a fee simple interest in the Improvements (as defined herein); and

D.It is a condition precedent to the Lenders making the Loan or otherwise extending credit to the Borrower under the Loan Agreement that the Mortgagor execute and deliver to the Agent this Agreement.

ThisOpen-End Leasehold Mortgageand Security Agreement (hereinafter, the “Mortgage”) is granted pursuant to the terms, provisions and conditions of the Loan Agreement.  Capitalized terms used herein which are not otherwise specifically defined herein shall have the meaning ascribed to such terms under the Loan Agreement, which Loan Agreement and other Loan Documents are incorporated by reference herein and made part of this Mortgage.

The term “Mortgaged Property” shall mean and include all of the following described property:

A.Real Estate.  The Mortgagor’s interest in and to the land more particularly described on Exhibit A which is annexed hereto and made a part hereof (hereinafter, the “Land”), together with the improvements and other structures now or hereafter situated thereon (such improvements being sometimes called the “Improvements”) located at 1310 Beulah Road, Pittsburgh, Pennsylvania, together with all rights, privileges, tenements, hereditaments, appurtenances, easements, including, but not limited to, rights and easements for access and egress and utility connections, and other rights now or hereafter appurtenant thereto (hereinafter, the “Real Estate”);

B.Fixtures.  All real estate fixtures or items which by agreement of the parties may be deemed to be such fixtures, now or hereafter owned by Mortgagor, or in which Mortgagor has or hereafter obtains an interest, and now or hereafter located in or upon the Real Estate, or now or hereafter attached to, installed in, or used in connection with any of the Real Estate, including, but not limited to, any and all portable or sectional buildings, bathroom, plumbing, heating, lighting, refrigerating, ventilating and air-conditioning apparatus and equipment, garbage incinerators and receptacles, elevators and elevator machinery, boilers, furnaces, stoves, tanks, motors, sprinkler and fire detection and extinguishing systems, doorbell and alarm systems, window shades, screens, awnings, screen doors, storm and other detachable windows and doors, mantels, partitions, built-in cases, counters and other fixtures whether or not included in the foregoing enumeration (hereinafter, the “Fixtures”);

C.Additional Appurtenances. All bridges, easements, rights of way, licenses, privileges, hereditaments, permits and appurtenances hereafter belonging to or enuring to the benefit of the Real Estate and all right, title and interest of Mortgagor in and to the land lying within any street or roadway adjoining any of the Real Estate and all right, title and interest of Mortgagor in and to any vacated or hereafter vacated streets or roads adjoining any of the Real Estate and any and all reversionary or remainder rights (hereinafter, the “Additional Appurtenances”);

D.Awards.  All of the right, title and interest of Mortgagor in and to any award or awards heretofore made or hereafter to be made by any municipal, county, state or federal authorities to the present or any subsequent owners of any of the Real Estate or the Land, or the Improvements, or the Fixtures, or the Additional Appurtenances, or the Leases or the Personal Property, including, without limitation, any award or awards, or settlements or payments, or other compensation hereafter made resulting from (x) condemnation proceedings or the taking of

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the Real Estate, or the Land, or the Improvements, or the Fixtures, or the Additional Appurtenances, or the Leases or the Personal Property, or any part thereof, under the power of eminent domain, or (y) the alteration of grade or the location or discontinuance of any street adjoining the Land or any portion thereof, or (z) any other injury to or decrease in value of the Mortgaged Property (hereinafter, the “Awards”);

E.Leases.  All leases and subleases now or hereafter entered into of the Real Estate, or any portion thereof, and all rents, issues, profits, revenues, earnings and royalties therefrom, and all right, title and interest of Mortgagor thereunder, including, without limitation, purchase or sale options, cash, letters of credit, or securities deposited thereunder to secure performance by the tenants or occupants of their obligations thereunder, whether such cash, letters of credit, or securities are to be held until the expiration of the terms of such leases or occupancy agreements or applied to one or more of the installments of rent coming due prior to the expiration of such terms including, without limitation, the right to receive and collect the rents and other payments due thereunder (hereinafter, the “Leases”);

F.Purchase and Sale Agreements.  All purchase and sale agreements now or hereafter entered into of the Real Estate, or any portion thereof, or any condominium units into which the Real Estate may be converted including, without limitation, cash, letters of credit or securities deposited thereunder to secure performance by the purchasers of their obligations thereunder (hereinafter, the “Purchase and Sale Agreements”);

G.Ground Lease.  All of the right, title and interest of the Mortgagor, as ground lessee, in and to the Land pursuant to that certain Ground Lease dated as of November 15, 1985, (hereinafter, together with any amendments, modifications, extensions, renewals, replacements, and assignments thereof, the “Ground Lease”); and

H.Personal Property.  All tangible and intangible personal property now owned or at any time hereafter acquired by Mortgagor of every nature and description, and whether or not used in any way in connection with the Real Estate, the Fixtures, the Additional Appurtenances, the Purchase and Sale Agreements or any other portion of the Mortgaged Property, including, without limitation express or implied upon the generality of the foregoing, all Equipment, Goods, Inventory, Fixtures, Accounts, Instruments, Documents and General Intangibles (as each such capitalized term is defined in the Uniform Commercial Code in effect in the state where the Real Estate is situated) and further including, without any such limitation, the following whether or not included in the foregoing: materials; supplies; furnishings; chattel paper; money; bank accounts; security deposits; utility deposits; any insurance or tax reserves deposited with Agent; any cash collateral deposited with Agent; claims to rebates, refunds or abatements of real estate taxes or any other taxes; contract rights; plans and specifications; licenses, permits, approvals and other rights; the rights of Mortgagor under contracts with respect to the Real Estate or any other portion of the Mortgaged Property; signs, brochures, advertising, the name by which the Mortgaged Property is known and any variation of the words thereof, and good will; copyrights, service marks, and all goodwill associates therewith; and trademarks; all proceeds paid for any damage or loss to all or any portion of the Real Estate, the Fixtures, the Additional Appurtenances, any other Personal Property or any other portion of the Mortgaged Property (hereinafter, the “Insurance Proceeds”); all Awards; all Leases; all Purchase and Sale Agreements; all books and records; and all proceeds, products, additions, accessions, substitutions and replacements to any one or more of the foregoing (collectively, the “Personal Property”).

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The term “Obligations” shall mean and include:

A.The Guaranteed Obligations, as such term is defined in the Guaranty;

B.The payment, performance, discharge and satisfaction of each covenant, warranty, representation, undertaking and condition to be paid, performed, satisfied and complied with by Mortgagor under and pursuant to this Mortgage, the Guaranty, and also by Mortgagor under and pursuant to each of the other Loan Documents referred to in, or executed in connection therewith;

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

D.The payment, performance, discharge and satisfaction of all other liabilities and obligations of Mortgagor to Agent or any Lender, whether now existing or hereafter arising, direct or indirect, absolute or contingent, arising under this Mortgage, the Guaranty, the Loan Documents, or any other documents executed therewith. and including, without limitation express or implied upon the generality of the foregoing.

PROVIDED ALWAYS, that this instrument is upon the express condition that, if Mortgagor performs the Obligations (as defined herein), in accordance with the provisions of this Mortgage and the Loan Documents, at the times and in the manner specified, without deduction, fraud or delay, and if Mortgagor performs and complies with all the agreements, conditions, covenants, provisions and stipulations contained herein and in the other Loan Documents, then this Mortgage and the estate hereby granted shall cease and become void and Agent shall provide and deliver to Mortgagor a discharge of this Mortgage in proper form for recording.

Mortgagor hereby grants to Agent, on behalf of the Lenders, a continuing security interest in all of the Mortgaged Property in which a security interest may be granted under the Uniform Commercial Code as such is in effect in the Commonwealth of Massachusetts and the Commonwealth of Pennsylvania including, without limitation, the Fixtures, the Personal Property and the Purchase and Sale Agreements, together with all proceeds and products, whether now or at any time hereafter acquired and whether or not used in any way in connection with the development, construction, marketing or operation of the Real Estate, to secure all Obligations.

This instrument is intended to take effect as a mortgage pursuant to Pennsylvania law, and as a security agreement to the UCC and is to be filed with Office of the Recorder of Deeds of Allegheny County, Pennsylvania as a fixture financing statement pursuant to the UCC.

Mortgagor hereby covenants, warrants, represents and agrees with Agent, its successors and assigns, and the Lenders that:

1.Title.  Mortgagor has good marketable title to the Mortgaged Property and has good right, full power and lawful authority to grant and convey the same in the manner aforesaid; and that the Mortgaged Property is free and clear of all encumbrances and exceptions, except for the Permitted Title Exceptions, if any, as set forth on Schedule B, Section II of Title Insurance Policy No.                     issued by Fidelity National Title Insurance Co.

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Mortgagor shall make any further assurances of title that Agent may in good faith require including, without limitation, such further instruments as may be requested by Agent to confirm the assignment to Agent of all Awards.

2.Performance of Obligations.  Mortgagor shall perform and observe all of the obligations and conditions set forth in each of the Guaranty, this Mortgage, the Collateral Assignment of Leases and Rents, and each of the other agreements, if any, executed by Mortgagor in connection with the Loan.

3.Protection and Maintenance.  Mortgagor shall protect and maintain, or cause to be protected and maintained by the Tenant, in good, first-class and substantial order, repair and tenantable condition at all times, the buildings and structures now standing or hereafter erected on the Mortgaged Property, and any additions and improvements thereto, and all Personal Property now or hereafter situated therein, and the utility services, the parking areas and access roads, and all building fixtures and equipment and articles of personal property now or hereafter acquired and used in connection with the operation of the Mortgaged Property.  Mortgagor shall promptly replace, or shall cause Tenant to promptly replace, any of the aforesaid which may become lost, destroyed or unsuitable for use with other property of similar character.

4.Insurance Coverages.  Mortgagor shall insure, or shall cause to be insured by Tenant, the Mortgaged Property and the operation thereof with such coverages and in such amounts as are required by the provisions of the Loan Agreement and shall at all times keep, or cause the Tenant to keep, such insurance in full force and effect and pay all premiums therefor.  Certificates of insurance shall be delivered to Agent and the Lenders, and Mortgagor shall deliver to the Agent and the Lenders such a certificate as a replacement for an expiring certificate required to be deposited hereunder at least thirty (30) days before the date of such expiration.  Mortgagor hereby irrevocably appoints Agent its true and lawful attorney-in-fact, with full power of substitution, to assign any such policy in the event of the foreclosure of this Mortgage.

5.Insurance Proceeds.  Subject to the provisions of the Loan Agreement relating to the application of insurance proceeds, which provisions are expressly incorporated by reference herein and which Mortgagor is hereby made a third-party beneficiary of, the proceeds of any hazard insurance shall be used for the repair and restoration of the Mortgaged Property or applied to or toward the indebtedness secured hereby in such order as Agent may determine.  Notwithstanding anything in this Section 5 to the contrary, however, if the insurer denies liability to Mortgagor, Mortgagor shall not be relieved of any obligation under Section 3 of this Mortgage.

6.Eminent Domain.  Subject to the provisions of the Loan Agreement relating to the application of Awards, which provisions are expressly incorporated by reference herein and which Mortgagor is hereby made a third-party beneficiary of, any Awards shall be used for the repair and restoration of the Mortgaged Property or applied to or toward the indebtedness secured hereby in such order as Agent may determine.

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7.No Waste; Compliance With Law.  Mortgagor shall not commit or suffer, or allow the Tenant to commit or suffer, any strip or waste of the Mortgaged Property, or any portion thereof, or any violation of any law, rule, regulation, ordinance, license or permit, or the requirements of any licensing authority affecting the Mortgaged Property or any business conducted thereon, and shall not commit or suffer, or allow the Tenant to commit or suffer, any demolition, removal or material alteration of any of the Mortgaged Property (except for the replacement of Fixtures and Personal Property in the ordinary course of business, so long as items of comparable value and quality are installed free and clear of liens in favor of any other party), without the express prior written consent of Agent in each instance, which consent shall not be unreasonably withheld or delayed, and shall not violate or suffer, or allow the Tenant to violate or suffer, the violation of the covenants and agreements, if any, of record against the Mortgaged Property, and in all respects Mortgagor shall do, or shall cause the Tenant to do, all things necessary to comply with, and keep in full force and effect all licenses, permits and other governmental authorizations for the operation of the Mortgaged Property for its intended purposes, including, without limitation express or implied, the licenses, permits and authorizations referenced in the Loan Agreement.

8.Environmental and Related Matters; Indemnification.  Mortgagor shall at all times comply with all of the terms, conditions and provisions imposed on the Indemnitors under the Environmental Indemnity.

9.Payment of Taxes and Prevention of Liens.  The Mortgagor shall pay, or shall cause the Tenant to pay, before delinquent or before any penalty for nonpayment attaches thereto, all taxes, assessments and charges of every nature and to whomever assessed that may now or hereafter be levied or assessed upon the Mortgaged Property or any part thereof, or upon the rents, issues, income or profits thereof or upon the lien or estate hereby created, whether any or all of said taxes, assessments or charges be levied directly or indirectly or as excise taxes or as income taxes.  Mortgagor may apply, or may allow the Tenant to apply, for tax abatements and prosecute diligently and in good faith claims for refund so long as: (i) no additional taxes, interest thereon or penalties are incurred thereby and (ii) no proceedings are instituted to divest Mortgagor of title to all or any portion of the Mortgaged Property.  Mortgagor shall pay all sums which, if unpaid, may result in the imposition of a lien on the Mortgaged Property before such lien may attach (except that real estate taxes need not be paid prior to the due date thereof) or which may result in conferring upon a tenant of any part or all of the Mortgaged Property a right to recover such sums as prepaid rent.

10.Due On Sale; No Other Encumbrances; No Transfer of Ownership Interests; Failure to Comply with Permitted Exceptions.  Except as otherwise specifically provided for in the Loan Agreement, or in this Mortgage, it shall be an Event of Default under the Loan Agreement, a breach of the conditions of this Mortgage and an event permitting Agent or any Lender to accelerate all indebtedness secured hereby, if, without Agent’s prior written consent in each instance, which consent may be granted, withheld or conditionally granted in Agent’s sole discretion: (a) there is any sale, conveyance,

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transfer or encumbrance of, or lien imposed upon, all or any portion of the Mortgaged Property; or (b) there is any transfer or assignment of, or grant of any security interest in, any of the direct or indirect ownership interests in Mortgagor; or (c) there is a failure to comply with the provisions of, or there is a default under, any of the Permitted Title Exceptions unless cured within any applicable grace period provided for in the applicable Permitted Title Exception.

11.Agent’s and Lenders’ Rights.  If Mortgagor shall neglect or refuse: (a) to maintain and keep, or cause Tenant to maintain and keep, in good repair the Mortgaged Property or any part thereof as required by this Mortgage or the Loan Agreement, or (b) to maintain and pay, or cause the Tenant to maintain and pay, the premiums for insurance which may be required by this Mortgage or the Loan Agreement, or (c) to pay and discharge, or cause the Tenant to pay and discharge, all taxes of whatsoever nature, assessments and charges of every nature and to whomever assessed, as required by this Mortgage or the Loan Agreement, or (d) to pay the sums required to be paid by this Mortgage or the Loan Agreement, or (e) to satisfy any other terms or conditions of this Mortgage, or any instrument secured hereby, Agent may, at its election in each instance, but without any obligation whatsoever to do so, upon thirty (30) days prior written notice (except in the case of (i) an emergency where there is danger to person or property, or (ii) required insurance coverage would lapse, or (iii) an Event of Default exists, in each of which events no notice shall be required), cause such repairs or replacements to be made, obtain such insurance or pay said taxes, assessments, charges, and sums, incur and pay reasonable amounts in protecting its rights hereunder and the security hereby granted, pay any balance due under any conditional agreement of sale (or lease) of any property included as a part of the Mortgaged Property, and pay any amounts as Agent deems reasonably necessary or appropriate to satisfy any term or condition of this Mortgage, which Mortgagor shall have failed to satisfy, or to remedy any breach of such term or condition, and any amounts or expenses so paid or incurred, together with interest thereon from the date of payment by Agent or the Lenders at the Default Rate as provided in the Guaranty or Loan Agreement, shall be immediately due and payable by Mortgagor to Agent and the Lenders and until paid shall be secured hereby equally and ratably, and the same may be collected as part of said principal debt in any suit hereon or upon the Note.  No payment by Agent or the Lenders shall relieve Mortgagor from any default hereunder or impair any right or remedy of Agent consequent thereon.

12.Tax Reserve and Insurance Reserve.  Unless paid, or required to be paid, by the Tenant under the Lease, Mortgagor shall, upon the request of Agent, from time to time if an Event of Default shall be in existence, pay to Agent, such amount as Agent from time to time estimates as necessary to create and maintain a reserve fund from which to pay before the same become due: (a) all taxes, assessments, liens and charges on or against the Mortgaged Property, and (b) all premiums for insurance policies which are required by this Mortgage.  Such payments, if so requested, shall be invested in an interest-bearing account with the interest earned to be added to the reserve accountwhich shall be held by Agent as Cash Collateral, and so long as no Event of Default exists hereunder or under any of other Loan Documents, shall be paid to or for Mortgagor’s benefit as set forth

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below.  Payments from such reserve fund for said purposes may be made by Agent at its discretion even though subsequent owners of the property described herein may benefit thereby.  In the event of any Event of Default under the Loan Agreement or under the terms of this Mortgage, any part or all of such reserve fund may be applied, at the option of Agent, to cure any such Event of Default or to any part of the indebtedness hereby secured.  Prior to an Event of Default, the amount in such reserve fund, but not in excess of the applicable real estate taxes or insurance premiums then due, shall be paid to the taxing authority or the insurer upon written request of Mortgagor provided that such request is accompanied by the applicable current billing from the taxing authority or the insurer.

13.Certain Expenses.  If any action or proceeding is commenced, including, without limitation, an action to foreclose this Mortgage or to collect the debt hereby secured, to which action or proceeding Agent or any Lender is made a party by reason of the execution of this Mortgage, or by reason of any obligation which it secures, or by reason of entry or any other action under this Mortgage, or if in Agent’s judgment it becomes necessary in connection with legal proceedings or otherwise to defend or uphold the Mortgage hereby granted or the lien hereby created or any act taken to defend or uphold the Mortgage hereby granted or the lien hereby created or any act taken under this Mortgage, all sums reasonably paid or incurred by Agent or any Lender for the expense of any litigation or otherwise, in connection with any rights created by this Mortgage or any other Loan Document, shall be paid by Mortgagor, or may at the option of Agent, if not so paid, be added to the debt secured hereby and shall be secured hereby equally and ratably and shall bear interest until paid at the Default Rate set forth in the Guaranty or the Loan Agreement.

14.Regarding Leases.  Except as otherwise provided in the Loan Agreement, Mortgagor shall not enter into any leases or occupancy agreements with respect to the Mortgaged Property and shall not modify or amend any such leases or occupancy agreements without Agent’s prior written consent in each instance.  As to each permitted lease or occupancy agreement, Mortgagor will perform every material obligation of the lessor and, to the extent commercially reasonable, will enforce every material obligation of the lessee in the leases in effect with respect to all or any part or all of the Mortgaged Property and, except as otherwise provided in the Loan Agreement, Mortgagor will not: (i) cancel any Lease, nor terminate or accept a surrender thereof, or reduce the rent payable thereunder or alter, modify or amend any Lease; (ii) accept any prepayment of rent thereunder (except any rent which may be required to be prepaid by the terms of any such lease) more than one (1) month in advance of the time when the same shall be due; (iii) enter into any new leases, without first obtaining on each occasion the prior written consent of Agent; (iv) execute any assignment of Mortgagor’s interest in any Lease (other than the Collateral Assignment of Leases and Rents) or assignment of rents arising or accruing from any Lease or from the Mortgaged Property; (v) subordinate any Lease to any mortgage or other encumbrance, or permit, consent or agree to such subordination, without Agent’s prior written consent in each instance; (vi) convey or transfer or suffer or permit a conveyance or transfer of the premises demised by any Lease or of any interest

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therein so as to affect, directly or indirectly, a merger of the estates and rights, or a termination or diminution of the obligations, of any lessee thereunder; (vii) alter, modify or change the terms of any guaranty of any Lease, or any security for any Lease, or cancel or terminate any such guaranty, or release or reduce any such security, without the prior written consent of Agent in each instance; or (viii) consent to any assignment of, or subleasing under, any Lease (except in accordance with the terms of any Lease) without the prior written consent of Agent in each instance.  As to all leases and occupancy agreements, Agent, at its option from time to time, may require that all security deposits and similar funds or security provided by a lessee or occupant be deposited with Agent, or with an escrow agent satisfactory to Agent, subject to the rights of the lessee or occupant, but otherwise subject to a security interest in favor of Agent.

15.Declaration of Subordination.  At the option of Agent, which may be exercised at any time or from time to time by written notice to Mortgagor and to any applicable tenant, this Mortgage shall become subject and subordinate, in whole or in part (but not with respect to priority of entitlement to insurance proceeds or condemnation proceeds), to any and all leases of all or any part of the Mortgaged Property upon the execution by Agent and recording or filing thereof, at any time hereafter in the appropriate official records of the county wherein the Mortgaged Property are situatedof a unilateral declaration to that effect.

16.Further Assignment by Mortgagor.  Mortgagor hereby further assigns to Agent, as security for the Obligations, the lessor’s interests in any or all Leases, now or hereafter outstanding, and to the extent it may lawfully do so Mortgagor’s interests in all agreements, contracts, licenses and permits, now or hereafter outstanding, affecting all or any portion of the Mortgaged Property.  Mortgagor shall execute, acknowledge and deliver such further or confirmatory assignments thereof, by instruments in form satisfactory to the Agent, as Agent may reasonably require.  Mortgagor hereby authorizes Agent in the event of foreclosure, to sell and assign said interests to the purchaser at foreclosure, but neither such assignment nor any such future assignment shall be construed as binding Agent to any lease, agreement, contract, license or permit so assigned, or to impose upon Agent any obligations with respect thereto.  Mortgagor hereby irrevocably appoints Agent, or any agent designated by Agent, the true and lawful attorney-in-fact of Mortgagor, with full power of substitution, to execute, acknowledge and deliver any such assignment on behalf of Mortgagor which Mortgagor fails or refuses to do.

17.UCC Filing.  Mortgagor, upon Agent’s written request, shall promptly cause this Mortgage and any required financing statements to be recorded and re-recorded, registered and re-registered, filed and re-filed at such times and places as may be required by law or reasonably deemed advisable by Agent to create, preserve or protect the priority hereof and of any lien created hereby upon the Mortgaged Property or any part thereof; and Mortgagor shall from time to time do and cause to be done all such things as may be required by Agent, or required by law, including all things which may from time to time be necessary under the Uniform Commercial Code of the Commonwealth of

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Pennsylvania fully to create, preserve and protect the priority hereof and of any lien created hereby upon said property.  Mortgagor hereby irrevocably appoints Agent, or any agent designated by Agent, the true and lawful attorney-in-fact of Mortgagor, with full power of substitution, to execute, acknowledge and deliver any such things on behalf of Mortgagor which Mortgagor fails or refuses to do.

18.Right to Deal with Successor.  Agent may, without notice to any person, deal with any successor in interest of Mortgagor herein regarding this Mortgage and the debt hereby secured in all respects as it might deal with Mortgagor herein, without in any way affecting the liability hereunder or upon the debt hereby secured of any predecessor in interest of the person so dealt with; and no sale of the premises hereby mortgaged, nor any forbearance on the part of Agent, not any extension by Agent of the time for payment of the debt hereby secured, shall operate to release, discharge, modify, change or affect the original liability of any predecessor in interest of the equity owner at the time of such sale, forbearance or extension.

19.Acceleration of Debt.  If there is an Event of Default or if an event occurs which pursuant to which entitles Agent to exercise its rights and remedies under the Guaranty, then, at the option of Agent, the entire indebtedness hereby secured shall become immediately due and payable without further notice.

20.Additional Rights of Agent.

a.Enter and Perform.  Mortgagor authorizes Agent, in addition to all other rights granted by law or by this Mortgage, or by any of the other instruments executed herewith, whenever and as long as any Event of Default hereunder or under the Loan Agreement shall exist and remain uncured beyond the applicable grace period, if any, and without notice beyond the notice, if any, required to be given by the terms of the Loan Agreement, or upon the occurrence of an Event of Default under the Loan Agreement, to enter and take possession of all or any part of the Mortgaged Property and to use, lease, operate, manage and control the same and conduct the business thereof, and perform lessor’s obligations under any lease or the seller’s obligations under any Purchase and Sale Agreement or Mortgagor’s obligations under any other agreement affecting all or any part of the Mortgaged Property, perform the obligations of the seller under any contracts,and collect the rents, profits and all receipts of every nature therefrom as Agent shall deem best.

b.Repairs and Improvements.  Upon every such entry, Agent may, but shall not be obligated to, exercise all rights and powers of Mortgagor, either in the name of Mortgagor, or otherwise as Agent shall determine.  Without limitation express or implied upon the generality of the foregoing, Agent shall have the right to do all things necessary or desirable in order to keep in full force and effect all applicable licenses, permits and authorizations and any amendments thereto.

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c.Pay Costs and Expenses.  Upon such entry, Agent may, at its option, but without any obligation to do so, do any one or more of the following: pay and incur all expenses necessary or deemed by it appropriate for the holding and operating of the Mortgaged Property, the conduct of any business thereon, the maintenance of the Mortgaged Property, including without limitation payments of taxes, assessments, insurance, wages of employees connected with the Mortgaged Property or any business conducted thereon, charges and reasonable compensation for services of Agent, its attorneys and accountants and all other persons engaged or employed in connection with the Mortgaged Property or of any business conducted thereon and, in addition, Agent, at its option, may, but shall not be obligated to, make payments or incur liability with respect to obligations arising prior to the date it takes possession.

d.Add to Secured Indebtedness.  All obligations so paid or incurred by Agent shall be reimbursed or paid for by Mortgagor upon demand and prior to the repayment thereof shall be added to the debt secured hereby and shall bear interest at the Default Rate provided for in the Guaranty or the Loan Agreement, and shall be secured hereby equally and ratably.  Agent may also reimburse itself therefor from the income or receipts of the Mortgaged Property or any business conducted thereon, or from the sale of all or any portion of the Mortgaged Property.  Agent may also apply toward any of the Obligations any tax or insurance reserve account, deposit or any sum credited or due from Agent to Mortgagor without first enforcing any other rights of Agent against Mortgagor or the against any other guarantor of any of the Obligations or against the Mortgaged Property.

e.Attorney-In-Fact.  Mortgagor hereby irrevocably constitutes and appoints Agent, or any agent designated by Agent, for so long as this Mortgage remains undischarged of record, as attorney-in-fact of Mortgagor to execute, acknowledge, seal and deliver all instruments, agreements, deeds, certificates and other documents of every nature and description in order to carry out or implement the exercise of Agent’s rights hereunder and under the other Loan Documents.

f.Foreclosure.  Agent may institute an action of mortgage foreclosure, or take such other action at law or in equity for the enforcement of this Mortgage and realization on the mortgage security or any other security herein or elsewhere provided for, as the law may allow, and may proceed therein to final judgment and execution for the entire unpaid balance of the principal debt, with interest at the rate(s) stipulated in the Loan Agreement, together with all other sums due from Mortgagor in accordance with the provisions of the Loan Agreement, including all sums which may have been loaned by Agent to Mortgagor after the date of this Mortgage, all sums which may have been advanced by Agent to Mortgagor after the date of this Mortgage, all sums which may have been advanced by Agent for taxes, water or sewer rents, other lienable charges or claims, insurance or repairs or maintenance after the date of this Mortgage (including the period after the entry of any judgment in mortgage foreclosure or

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other judgment entered pursuant to this Mortgage or the Loan Agreement), and all costs of suit, including counsel fees (as permitted by applicable law).  Mortgagor authorizes Agent at its option to foreclose this Mortgage subject to the rights of any tenants of the Mortgaged Property, and the failure to make any such tenants parties defendant to any such foreclosure proceedings and to foreclose their rights will not be asserted by Mortgagor as a defense to any proceedings instituted by Agent to recover the indebtedness secured hereby or any deficiency remaining unpaid after the foreclosure sale of the Mortgaged Property; however, nothing herein contained shall prevent Mortgagor from asserting in any proceedings disputing the amount of the deficiency or the sufficiency of any bid at such foreclosure sale that any such tenants adversely affect the value of the Mortgaged Property.

In connection with the exercise of Agent’s rights above, Mortgagor hereby authorizes and empowers any attorney of any court of record in the Commonwealth of Pennsylvania or elsewhere, as attorney for Agent and all persons claiming under or through Agent, to appear for and confess judgment in ejectment against Mortgagor for the possession of the Mortgaged Property and to appear for and confess judgment against Mortgagor and against all persons claiming under or through Mortgagor, in favor of Agent, for recovery by Agent of possession thereof, for which this Mortgage, or a copy thereof verified by affidavit, shall be a sufficient warrant; and thereupon a writ of possession may immediately issue for possession of the Mortgaged Property, without any prior writ or proceeding whatsoever and without any stay of execution.  If for any reason after such action has been commenced it shall be discontinued, or possession of the Mortgaged Property shall remain in or be restored to Mortgagor, Agent shall have the right for the same default or any subsequent default to bring one or more further actions as above provided to recover possession of the Mortgaged Property.  Agent may confess judgment in ejectment therein before or after the institution of proceedings to foreclose this Mortgage or to enforce the Loan Documents, or after entry of judgment on this Mortgage or on the other Loan Documents executed in connection therewith, or after a sheriff’s sale of the Mortgaged Property in which Agent or any Lender is the successful bidder.   The authorization to pursue such proceedings for obtaining possession is an essential part of the enforcement of this Mortgage, or the other Loan Documents, and shall survive any execution sale to Agent.

21.Setoff.  Mortgagor hereby grants to Agent and each of the Lenders, a lien, security interest and right of setoff as security for all liabilities and obligations to Agent and the Lenders, whether now existing or hereafter arising, upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Agent or any Lender or any entity under the control of KeyBank National Association, or in transit to any of them.  At any time, without demand or notice, after the occurrence of an Event of Default, Agent or any Lender may set off the same or any part thereof and apply the same to any liability or obligation of Mortgagor even though

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unmatured and regardless of the adequacy of any other collateral securing the Loan.  ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE MORTGAGOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

22.Notices.  All notices, requests and demands to or upon the Agent, the Lenders or the Mortgagor under this Mortgage shall be in writing and given as provided in the Loan Agreement (and with respect to the Mortgagor, c/o the Borrower at the address of the Borrower as set forth in the Loan Agreement).

23.Agent/Lender Not Obligated; Cumulative Rights.  Nothing in this instrument shall be construed as obligating Agent or any Lender to take any action or incur any liability with respect to the Mortgaged Property or any business conducted thereon, and all options given to Agent are for its benefit and shall and may be exercised in such order and in such combination as Agent may from time to time decide.

24.Severability.  In case any one or more of the provisions of this Mortgage, the Guaranty, the Collateral Assignment of Leases and Rents, the Loan Agreement, or any other agreement now or hereafter executed in connection with any one or more of the foregoing are held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.  Each of the provisions of every such agreement, document or instrument shall be enforceable by Agent to the fullest extent now or hereafter not prohibited by applicable law.

25.No Waiver.  No consent or waiver, express or implied, by Agent to or of any Default by Mortgagor shall be construed as a consent or waiver to or of any other Default at the same time or upon any future occasion.

26.Waivers By Mortgagor.  Mortgagor, to the fullest extent that Mortgagor may do so, hereby: (a) agrees that Mortgagor will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay or extension, or any redemption after foreclosure sale, and waives and releases all rights of redemption after foreclosure sale, valuation, appraisement, stay of execution, notice of election to mature or declare due the debt secured hereby; and (b) waives all rights to a marshalling of the assets of Mortgagor, including the Mortgaged Property, or to a sale in inverse order of alienation in the event of a sale hereunder of the Mortgaged Property, and agrees not to assert any right under any statute or rule of law pertaining to the marshalling of assets, sale in inverse order of alienation, or other matters whatever to defeat, reduce or affect the right of Agent under the terms of this Mortgage or the Guaranty to a sale of the Mortgaged Property for the collection of the indebtedness evidenced by the Guaranty without any prior or different resort for collection, or the right of Agent to the payment of such indebtedness out of the proceeds of sale of the Mortgaged Property in preference to every other claimant whatever.

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27.Business Loan: Not Personal Residence.  Mortgagor covenants, warrants and represents that all of the proceeds of the Loan secured hereby shall be used for business or commercial purposes, none of the proceeds of the Loan secured hereby shall be used for personal, family or household purposes, and that no individual liable for the Loan resides or intends to reside in any portion of the Mortgaged Property.

28.Certification. The undersigned hereby certify that (a) Mortgagor is a duly organized, validly existing limited partnership organized and in good standing under the laws of the State of Delaware, and (b) that the execution and delivery hereof and of all of the other Loan Documents by Mortgagor has been duly authorized by a resolution of First Union Real Estate Equity and Mortgage Investments which is in full force and effect.

29.Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial.

a.Substantial Relationship.  It is understood and agreed that all of the Loan Documents were delivered in the Commonwealth of Massachusetts, which Commonwealth the parties agree has a substantial relationship to the parties and to the underlying transactions embodied by the Loan Documents.

b.Place of Delivery.  Mortgagor agrees to furnish to Agent at Agent’s office in Boston, Massachusetts all further instruments, certifications and documents to be furnished hereunder.

c.Governing Law.  This Mortgage, except as otherwise provided in herein, and each of the other Loan Documents shall in all respects be governed, construed, applied and enforced in accordance with the internal laws of the Commonwealth of Massachusetts without regard to principles of conflicts of law.

d.Exceptions.  Notwithstanding the foregoing choice of law:

i)The procedures governing the enforcement by Agent of its foreclosure and other remedies against Mortgagor under this Mortgage and under the other Loan Documents with respect to the Mortgaged Property or other assets situated in the Commonwealth of Pennsylvania, including by way of illustration, but not in limitation, actions for foreclosure, for injunctive relief or for the appointment of a receiver shall be governed by the laws of the Commonwealth of Pennsylvania;

ii)Agent and each of the Lenders shall comply with applicable law in the Commonwealth of Pennsylvania to the extent required by the law of such jurisdiction in connection with the foreclosure of the security interests and liens created under this Mortgage and the other Loan

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Documents with respect to the Mortgaged Property or other assets situated in the Commonwealth of Pennsylvania; and

iii)provisions of Federal law and the law of the Commonwealth of Pennsylvania shall apply in defining the terms Hazardous Materials, Environmental Legal Requirements and Legal Requirements applicable to the Mortgaged Property as such terms are used in this Mortgage.

Nothing contained herein or any other provisions of the Loan Documents shall be construed to provide that the substantive laws of the Commonwealth of Pennsylvania shall apply to any parties’ rights and obligations under any of the Loan Documents, which, except as expressly provided in clauses (i), (ii) and (iii) of this Section 30(d), are and shall continue to be governed by the substantive law of Commonwealth of Massachusetts, except as set forth in clauses (i), (ii) and (iii) of this Section 30(d).  In addition, the fact that portions of the Loan Documents may include provisions drafted to conform to the law of the Commonwealth of Pennsylvania is not intended, nor shall it be deemed, in any way, to derogate the parties’ choice of law as set forth or referred to in this Mortgage or in the other Loan Documents.  The parties further agree that the Agent may enforce its rights under the Loan Documents including, but not limited to, its rights to sue the Mortgagor or to collect any outstanding indebtedness in accordance with applicable law.

e.Consent to Jurisdiction.  Mortgagor hereby consents to personal jurisdiction in any state or Federal court located within the Commonwealth of Massachusetts.

30.Advance Money Mortgage. This Mortgage secures future advances made pursuant to the Loan Agreement, which future advances are guarantied by the Mortgagor pursuant to the Guaranty.  Without limiting the foregoing, this Mortgage secures all advances made by Agent or any Lender of any kind or nature described in 42 Pa. C.S. §8144.  The maximum principal amount that may be secured by this Mortgage is $53,000,000.00, plus all advances made pursuant to any provisions of the Mortgage; provided that in no event shall any Lender be obligated to advance in excess of the stated principal amount of the Note evidencing the indebtedness secured hereby.  If Mortgagor sends a written notice to Agent or any Lender which purports to limit the indebtedness secured by this Mortgage and to release the obligation of Agent or any Lender to make any additional advances, such notice shall be ineffective as to any future advances made: (i) to enable completion of improvements on the Property for which the loan secured hereby was originally made; (ii) to pay taxes, assessments, maintenance charges and insurance premiums; (iii) for costs incurred for protection of the Property or the lien of this Mortgage; (iv) expenses incurred by Agent or any Lender by reason of a default of Mortgagor hereunder or under the Loan Documents; and (v) any other costs incurred by Agent or any Lender to protect and preserve the Property.  It is the intention of the parties hereto that any such advance made by Agent or any Lender after any such notice by Mortgagor shall be secured by the lien of this Mortgage on the Property.

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31.Representations, Warranties and Covenants Regarding the Ground Lease.  In addition to Mortgagor’s representations, warranties and covenants elsewhere contained herein, the Mortgagor represents, warrants, covenants and agrees as follows:

a.The Ground Lease is valid, binding and will be in full force and effect with respect to the Mortgagor until December 31, 2010, unless the same is renewed in accordance with its terms and conditions.

b.The Mortgagor will promptly pay, when due and payable, the rent and all other sums and charges mentioned in and made payable by Mortgagor, as “Lessee” under the Ground Lease.

c.The Mortgagor will promptly perform and observe all of the terms, covenants and conditions required to be performed and observed by Mortgagor, as “Lessee” under the Ground Lease, within the periods provided in the Ground Lease, and will do all things necessary to preserve and to keep unimpaired its rights under the Ground Lease.

d.The Mortgagor shall (a) promptly notify the Agent in writing of the receipt by Mortgagor of any notice (other than notices customarily sent on a regular periodic basis) from the lessor under the Ground Lease of any default in the performance or observance of any of the terms, covenants, or conditions on the part of Mortgagor to be performed or observed under the Ground Lease; (b) promptly notify the Agent and the Lenders in writing of the receipt by Mortgagor of any notice from the lessor under the Ground Lease of any attempted termination of the Ground Lease pursuant to the provisions of the Ground Lease; and (c) promptly cause a copy of each such notice received by Mortgagor from the lessor under the Ground Lease to be delivered to the Agent.

e.The Mortgagor will, within twenty (20) days after written demand from the Agent, deliver to the Agent an estoppel certificate in form and substance satisfactory to the Agent.

f.The Mortgagor will furnish the Agent upon demand, proof of payment of all items which are required to be paid by the Mortgagor pursuant to the Ground Lease.

g.The Mortgagor shall not consent to any waiver or modification, amendment or cancellation of any provision of the Ground Lease without the prior written consent of the Agent, and any such waiver, modification, amendment or cancellation shall be null and void; the Mortgagor shall not consent to the subordination of the Ground Lease to any mortgage of the leasehold interest of the Mortgagor in the Mortgaged Property without the prior written consent of the Agent.

h.The Mortgagor shall execute and deliver, on request of the Agent, such instruments as the Agent may reasonably request and deem useful or required to

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permit the Agent to cure any default under the Ground Lease or permit the Agent to take such other action as the Agent considers desirable to cure or remedy the matter in default and preserve the interest of the Agent in the Mortgaged Property.

i.Upon the occurrence of an Event of Default hereunder and the expiration of any applicable grace period without the cure thereof, or upon the failure of the Mortgagor to take any action under this Section upon two (2) days written notice from the Agent requesting such action, the Mortgagor hereby authorizes the Agent to pay any and all rental payments or similar sums to be paid by the Mortgagor, payment of which is then due under the Ground Lease, with interest or penalties thereon if charged by the lessor under the Ground Lease; and to incur and pay all sums reasonably necessary to protect Agent’s rights hereunder and under the Ground Lease.  Such sums shall be included in the Obligations secured hereby.

32.Headings.  Headings and captions in this Mortgage are for convenience and reference only and the words and phrases contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of any of the provisions hereof.

33.Time of Essence.  Time shall be of the essence of each and every provision of this Mortgage and each of the other Loan Documents.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed and delivered as a sealed instrument as of the      day of November, 2004.

	Mortgagor:
	FT-CHURCHILL PROPERTY L.P., a Delaware limited partnership
	By:	FT-FIN GP LLC, its general partner
		By:	FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, its Sole Member
Sealed and delivered
in the presence of:		By:
		Name:	Carolyn Tiffany
		Title:	Chief Operating Officer
Witness

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STATE OF NEW YORK

                                 , ss.

On this date, November        , 2004, before me, the undersigned notary public, personally appeared Carolyn Tiffany, as Chief Operating Officer of First Union Real Estate Equity and Mortgage Investments, the sole member of FT-Fin GP LLC, the general partner of FT-Churchill Property L.P., a limited partnership, proved to me through satisfactory evidence of identification, which were                                             , to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he/she signed it voluntarily for its stated purpose.

	Notary Public
My commission expires:

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EXHIBIT “A”

LEGAL DESCRIPTION

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EX-10.3

Exhibit 10.3

OWNERSHIP INTEREST PLEDGE AND SECURITY AGREEMENT

OWNERSHIP INTEREST PLEDGE AND SECURITY AGREEMENT (this “Pledge Agreement”), dated as of November 18, 2004, by and between FT-FIN ACQUISITION LLC, a Delaware limited liability company (“Borrower”), and KEYBANK NATIONAL ASSOCIATION, a national banking association having an address at 101 Federal Street, Boston, Massachusetts 02110, as agent (KeyBank National Association, in such capacity as agent, hereinafter referred to as “Agent”) for a syndicate of Lenders (singly and collectively, the “Lenders”) as specifically provided in the Loan Agreement (as defined below).

W I T N E S S E T H

WHEREAS, pursuant to that certain Loan Agreement dated as of November    , 2004 (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”) entered into by and among the Borrower, the Agent and the Lenders, the Agent and the Lenders have agreed to make a loan to the Borrower in the aggregate principal amount of $53,000,000.00 (the “Loan”), upon the terms and subject to the conditions set forth therein.

WHEREAS, the Borrower (i) is the record owner and beneficial owner of those certain limited partnership interests listed on Schedule 1 attached hereto issued by the limited partnerships named therein (the “Limited Partnerships”), and (ii) is the record owner and beneficial owner of those certain membership interests listed on Schedule 1 attached hereto issued by the limited liability companies named therein (the “Companies”), (the “Limited Partnerships”, and the “Companies” are hereinafter collectively referred to as the “Subsidiaries”).

WHEREAS, as a condition to extending the Loan, the Agent and the Lenders have required the Borrower to execute and deliver this Pledge Agreement and certain other Security Documents to secure the Borrower’s obligations under the Loan Agreement.

NOW, THEREFORE, in consideration of the premises and to induce the Lenders to make the Loan under the Loan Agreement, the Borrower hereby agrees with Agent and the Lenders as follows:

1.Defined Terms.  Unless otherwise defined herein, terms which are defined in the Loan Agreement and used herein are so used as so defined, and the following terms shall have the following meanings:

“Agent”:  as defined in the first paragraph of this Pledge Agreement.

“Borrower”:  as defined in the first paragraph of this Pledge Agreement.

“Cash Management Agreement”: shall mean that certain Cash Management Agreement of even date among the Borrower, various subsidiaries of the Borrower, the Agent and the Lenders, as amended, supplemented or otherwise modified from time to time.

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“Collateral”:  means the Pledged Interests and all Proceeds thereof.

“Consents”:  shall mean those certain Consents from the Subsidiaries referenced in Section 4 of this Pledge Agreement.

“Lenders”:  as defined in the first paragraph hereto.

“Loan Agreement”:  as defined in the recitals of this Pledge Agreement.

“Loans”:  as defined in the recitals of this Pledge Agreement.

“Loan”:  as defined in the recitals of this Pledge Agreement.

“Obligations”:  means all indebtedness, obligations and liabilities of “Borrower”:  as defined in the first paragraph of this Pledge Agreement to the Agent and/or any of the Lenders, whether now existing or hereafter arising, direct or indirect, absolute or contingent, under any one or more of: (i) this Pledge Agreement; (ii) the Loan Agreement, Note or any other Loan Document; and (iii) each of the same as hereafter modified, amended, extended or replaced, including, without limitation, the Obligations (as defined in the Loan Agreement).

“Pledge Agreement”:  means this Ownership Interest Pledge and Security Agreement, as amended, supplemented or otherwise modified from time to time.

“Pledged Interests”:  means all right, title and interest of Borrower, whether now owned or hereafter acquired, in and to the Subsidiaries, as listed on Schedule 1 hereto, together with all interests, certificates, options or rights of any nature whatsoever which may be issued or granted to Borrower by the Subsidiaries in respect of the foregoing.

“Proceeds”:  means (i) Borrower’s right, title and interest in and to all Distributions, monies, fees, payments, compensations and proceeds now or hereafter payable in respect of the Pledged Interests, whether payable as profits, Distributions, asset Distributions, repayment of loans or capital or otherwise and including all “proceeds” as such term is defined in Section 9-102 of the UCC; (ii) all books, records, electronically stored data and information relating to the Pledged Interests and all rights of access to such books, records and information; (iii) all contract rights, general intangibles, claims, powers, privileges, benefits and remedies of Borrower relating to the foregoing; (iv) all additions to the Pledged Interests, all substitutions therefor and all replacements thereof; and (v) all cash or non-cash proceeds of any of the foregoing.

“Subsidiaries”:  as defined in the recitals of this Pledge Agreement.

“UCC”:  means the Uniform Commercial Code from time to time in effect in The Commonwealth of Massachusetts; provided, that if by mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest granted hereunder in the Collateral is governed by the Uniform Commercial Code of a jurisdiction other than Massachusetts, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of provisions hereof relating to such perfection or effect of perfection on non-perfection.

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2.Pledge; Grant of Security Interest.  As security for the full and punctual payment and performance of the Obligations when due and payable (whether upon stated maturity, by acceleration or otherwise), Borrower hereby transfers, assigns, grants, bargains, sells, conveys, hypothecates, pledges, sets over, endorses over and delivers to Agent all the Pledged Interests, and Borrower hereby grants, pledges, hypothecates, transfers and assigns to Agent a continuing lien on and security interest in all of the Collateral.

3.Delivery of Certificates, Instruments, Etc.  Borrower shall deliver to Agent:

a.all original certificates, instruments and other documents, if any, evidencing or representing the Pledged Interests, concurrently with the execution and delivery of this Pledge Agreement; and

b.the original certificates, instruments or other documents, if any, evidencing or representing all other Collateral (except for collateral which this Pledge Agreement specifically permits Borrower to retain) within five (5) days after Borrower’s receipt thereof.

4.Powers and Transfer Instruments.  Concurrently with the delivery to the Agent of this Pledge Agreement and each certificate, if any, representing the Pledged Interests, Borrower shall deliver a duly executed Consent from each Subsidiary.

5.Representations and Warranties.  Borrower represents and warrants that:

a.Except for any consents as may be required in connection with any disposition of any portion of the Collateral by laws affecting the offering and sale of securities generally or as otherwise contemplated by the Loan Agreement, no consent of any other person or entity (including, without limitation, any owner or creditor of Borrower), and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing (other than the filing of financing statements under the UCC in order to perfect a security interest in that portion of the Collateral in which a security interest is perfected by filing) or declaration with any governmental instrumentality is required in connection with (i) the execution, delivery, performance, validity or enforceability of this Pledge Agreement, (ii) the perfection or maintenance of the security interest created hereby (including the first priority nature of such security interest) or (iii) the exercise by the Agent of any rights provided for in this Pledge Agreement;

b.The Pledged Interests constitute all of the ownership interests owned by Borrower in each of the Subsidiaries;

c.All the Pledged Interests have been duly and validly issued and are fully paid.  No certificate or other instrument has been issued at any time to evidence the Pledged

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Interests that has not been delivered to the Agent pursuant to Section 3 of this Pledge Agreement.  None of the limited partnership interests or the membership interests comprising the Collateral are dealt in or traded on securities exchanges or in securities markets, and none by its terms expressly provides that it is a security governed by Article 8 of the UCC or that it is an investment company security, and none is held in a securities account (as defined in Section 8-501 of the UCC);

d.Borrower is the sole holder of record and sole beneficial owner of, and has good and valid title to, the Pledged Interests, free of any and all liens or options in favor of, or claims of, any other Person, except the liens in existence on the date hereof and described on Schedule 1 hereto (“Permitted Liens”) and the lien created in favor of the Agent by this Pledge Agreement;

e.Upon the filing of the Form UCC-1 Statements referred to in Section 13, the lien granted pursuant to this Pledge Agreement will constitute a valid, perfected lien on such Pledged Interests and related Collateral, subject only to Permitted Liens, with respect to that portion of the Collateral in which a security interest is perfected by the filing of a financing statement, enforceable as such against all creditors of Borrower and any Persons purporting to purchase any Pledged Interests and related Collateral from Borrower; and

f.There are no restrictions on the transfer of the Collateral to the Agent hereunder, or with respect to any subsequent transfer thereof or realization thereupon by the Agent and/or the Lenders (or, if there are any such restrictions, such transfer restrictions have been duly waived by all required parties), and, as set forth in the Consents, Borrower has obtained all consents needed in connection with any such transfer or subsequent transfer, subject to matters resulting from the operation of law.

6.Covenants.   Borrower covenants and agrees with Agent and the Lenders that from and after the date of this Pledge Agreement until this Pledge Agreement shall be terminated:

a.If Borrower shall, as a result of its ownership of the Pledged Interests, become entitled to receive or shall receive (i) any limited liability company certificate (including, without limitation, any certificate representing a dividend or a Distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, (ii) any stock, (iii) any limited partnership interests (including, without limitation, any certificate representing a dividend or a Distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, or (iv) any property other than cash, whether in addition to, in substitution of, as a conversion of, or in

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exchange for any of the Pledged Interests, or otherwise in respect thereof, Borrower shall accept the same as Agent’s agent, hold the same in trust for Agent and deliver the same forthwith to Agent in the exact form received, duly endorsed by Borrower to Agent, if required, together with an undated assignment or power covering such certificate, duly executed in blank and with, if Agent so requests, signature guaranteed, to be held by Agent hereunder as additional security for the Obligations.

b.Without the prior written consent of Agent, Borrower will not, directly or indirectly (i) vote to enable, or take any other action to permit, the issuer(s) of the Pledged Interests to issue any interests or shares, as applicable, or to issue any other securities convertible into or granting the right to purchase or exchange for any interests of the issuer(s) of the Pledged Interests, or (ii) if prohibited by the Loan Agreement, sell, assign, transfer, exchange or otherwise dispose of, or grant any option with respect to, the Collateral, or (iii) create, incur or permit to exist any lien or option in favor of, or any claim of any person or entity with respect to, any of the Collateral, or any interest therein, except for the lien provided for by this Pledge Agreement and liens permitted under the Loan Agreement.  Borrower will defend the right, title and interest of Agent in and to the Collateral against the claims and demands of all Persons whomsoever.

c.At any time and from time to time, upon the written request of Agent, and at the sole expense of Borrower, Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as Agent may reasonably request for the purposes of obtaining or preserving the full benefits of this Pledge Agreement and of the rights and powers herein granted.  If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel paper, such note, instrument or chattel paper shall be promptly delivered to Agent, duly endorsed in a manner satisfactory to Agent, to be held as Collateral pursuant to this Pledge Agreement.

d.Borrower agrees to pay, and to indemnify and save Agent harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes (other than income taxes on the income of Agent or any of the Lenders) which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Pledge Agreement.

e.Borrower shall, upon request from the Agent, from time to time, cause the issuer of any securities comprising any of the Collateral which may be, but have not been, certificated, to issue certificates with respect thereto in the name of

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Borrower or, if so requested by the Agent, in the name of the Agent as secured party.

f.Borrower shall not exercise any right with respect to the Collateral which would dilute or adversely affect Agent’s rights in the Collateral.

7.Cash Dividends; Distributions; Voting Rights.

a.Unless an Event of Default shall have occurred and be continuing, Borrower shall be permitted to exercise all voting rights with respect to the Pledged Interests; provided, however, that Borrower shall not, without the prior written consent of Agent in each instance, which consent shall not be unreasonably withheld, vote the Collateral in favor of, or consent to, any resolution or action which does or might:

i.impose any restrictions upon the sale, transfer or disposition of the Collateral other than restrictions, if any, the application of which is waived to the full satisfaction of the Agent as to the Collateral; or

ii.result in the issuance of any additional interest in the Subsidiaries, or of any class of security, which issuance might adversely affect the value of the Collateral; or

iii.vest additional powers, privileges, preferences or priorities to any other class of interest in the Subsidiaries to the detriment of the value of, or rights accruing to, the Collateral; or

iv.except as permitted in the Loan Agreement, permit the Subsidiaries to sell, transfer, assign, pledge, mortgage or otherwise encumber any property owned by any of them, or to incur any new indebtedness in respect of such property, unless Agent has given its prior written consent.

b.Subject to the terms and provisions hereof relating to the rights and remedies of the Agent after the occurrence and during the continuance of an Event of Default, in accordance with the terms and conditions of the Loan Agreement (including, without limitation, Sections 7.14, 7.15 and 7.16 thereof), the Consents, the Payment Direction Letters and the Cash Management Agreement (including, without limitation, Section 2.2 thereof), any and all cash dividends or Distributions or any other payments received by Borrower in respect of the Collateral shall be directly deposited in a designated Depository Account in the name of Borrower.  Borrower agrees that, to the extent that Borrower receives directly any cash dividends or Distributions or any other payments which are required to be deposited in a designated Depository Account as provided for in the Loan Agreement, the Consents and/or the Cash Management Agreement, then

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(i) such amounts shall be deemed to be Collateral and shall be held in trust for the benefit of Agent, (ii) such amounts shall not be commingled with any other funds or property of Borrower, and (iii) Borrower shall deposit such amounts in the applicable Depository Account within three Business Days of receipt.

8.Rights of Agent.

a.If an Event of Default shall have occurred and be continuing, Agent shall have the right to receive any and all cash dividends or Distributions or any other amounts paid in respect of the Collateral and make application thereof to the Borrower Obligations, in such order as Agent, in its sole discretion, may elect.  In connection therewith, if an Event of Default shall have occurred and be continuing, the Agent shall have the right to direct the issuer(s) of the Pledged Interests to pay all such cash dividends or Distributions or any other payments directly to the Agent or as otherwise directed by the Agent.

b.If an Event of Default shall have occurred and be continuing, then all such Pledged Interests at Agent’s option shall be registered in the name of Agent or its nominee, and Agent or its nominee may thereafter exercise (x) all voting and other rights pertaining to such Pledged Interests and (y) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Interests as if Agent were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Interests upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the organizational structure of Borrower, or upon the exercise by Borrower or Agent of any right, privilege or option pertaining to such Pledged Interests, and in connection therewith, the right to deposit and deliver any and all of the Pledged Interests with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as it may determine), all without liability except to account for property actually received by it, but Agent shall have no duty to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

c.The rights of Agent hereunder shall not be conditioned or contingent upon the pursuit by Agent of any right or remedy against Borrower or against any other person or entity which may be or become liable in respect of all or any part of the Obligations or against any other Collateral security therefor, guarantee thereof or right of offset with respect thereto.  Agent shall not be liable for any failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so, nor shall it be under any obligation to sell or otherwise dispose of any Collateral upon the request of Borrower or any other person or entity or to take any other action whatsoever with regard to the Collateral or any part thereof.

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9.Actions By Agent.  Borrower hereby designates Agent as the attorney-in-fact of Borrower to: (a) after the occurrence and during the continuance of an Event of Default, endorse in favor of Agent any of the Collateral; (b) after the occurrence and during the continuance of an Event of Default, cause the transfer of any of the Collateral in such name as Agent may from time to time determine; (c) cause the issuance of certificates for book entry and/or uncertificated securities; (d) renew, extend or roll over any Collateral; (e) make, demand and initiate actions to enforce any of the Collateral or rights therein; and (f) take any other action to effectuate the terms and provisions of this Pledge Agreement.  Agent may take such action with respect to the Collateral as Agent may reasonably determine to be necessary to protect and preserve its interest in the Collateral.  Except as otherwise provided herein, all of the rights, remedies, powers, privileges and discretions included in this Section 9 may be exercised by Agent whether or not the Obligations are then due and whether or not an Event of Default has occurred.  The within designation and grant of power of attorney is coupled with an interest, is irrevocable until the lien created by this Pledge Agreement is terminated by a written instrument executed by a duly authorized officer of Agent.  The power of attorney shall not be affected by subsequent disability or incapacity of Borrower.  Agent shall not be liable for any act or omission to act pursuant to this Section 9, except for any act or omission to act which is in actual bad faith.

10.Remedies.

a.If an Event of Default shall have occurred and be continuing, Agent may exercise, in addition to all other rights and remedies granted in this Pledge Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the UCC.  Without limiting the generality of the foregoing, Agent, if an Event of Default shall have occurred and be continuing, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon Borrower or any other person or entity (all and each of which demands, presentments, protests, advertisements or notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give option or options to purchase or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, in the over-the-counter market, at any exchange, broker’s board or office of Agent or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.  Agent shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Borrower, which right or equity is hereby waived or

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released.  Agent shall apply any Proceeds from time to time held by it and the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and expenses of every kind incurred therein or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Agent hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in such order as Agent may elect, and only after such application and after the payment by Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a) of the UCC, need Agent account for the surplus, if any, to Borrower.  To the extent permitted by applicable law, Borrower waives all claims, damages and demands it may acquire against Agent arising out of the exercise by Agent of any of its rights hereunder, except for any claims, damages and demands it may have against Agent arising from the gross negligence or willful misconduct of Agent.  If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.  Borrower shall remain liable for any deficiency if the proceeds of any sale or other disposition of Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by Agent to collect such deficiency.

b.If any Event of Default occurs and is continuing, any deposits, balances or other sums credited by or due from Agent, any affiliate of Agent or any of the Lenders, or from any affiliate of any of the Lenders, to Borrower may to the fullest extent not prohibited by applicable law at any time or from time to time, without regard to the existence, sufficiency or adequacy of any other collateral, and without notice or compliance with any other condition precedent now or hereafter imposed by statute, rule of law or otherwise, all of which are hereby waived to the fullest extent permitted by law, be set off, appropriated and applied by Agent against any or all of the Obligations irrespective of whether demand shall have been made, in such manner as Agent in its sole and absolute discretion may determine.  Within three (3) Business Days of making any such set off, appropriation or application, Agent agrees to notify Borrower thereof, provided the failure to give such notice shall not affect the validity of such set off or appropriation or application.  ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY OF THE LENDERS TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

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11.Private Sales.

a.Borrower recognizes that Agent may be unable to effect a public sale of any or all the Pledged Interests, by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Borrower acknowledges and agrees that any such private sale may result in prices and other terms less favorable to Agent than if such sale were a public sale.  Agent shall be under no obligation to delay a sale of any of the Pledged Interests for the period of time necessary to permit Borrower to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if Borrower would agree to do so.

b.Borrower further agrees to use its reasonable efforts to do or cause to be done all such other acts as may be necessary to make any sale or sales of all or any portion of the Pledged Interests pursuant to this paragraph 11 valid and binding and in compliance with any and all other applicable requirements of law; provided, however, that Borrower shall be under no obligation to register the Pledged Interests for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws.  Borrower further agrees that a breach of any of the covenants contained in this paragraph 11 will cause irreparable injury to Agent, that Agent has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this paragraph 11 shall be specifically enforceable against Borrower, and Borrower hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred with respect to the Obligations.

12.Limitation on Duties Regarding Collateral.  Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as Agent deals with similar securities and property for its own account.  Neither Agent nor any of its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Borrower or otherwise.

13.Financing Statements; Other Documents.  This Pledge Agreement constitutes an authenticated record, and Borrower hereby authorizes the Agent to file one or more UCC-1 financing statements, continuation statements or other documents with respect to the

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Collateral, without the signature of Borrower, and in such filing offices as the Agent shall deem reasonably appropriate.  Borrower agrees to deliver any other document or instrument which Agent may reasonably request in connection with the administration and enforcement of this Pledge Agreement or with respect to the Collateral for the purposes of obtaining or preserving the full benefits of this Pledge Agreement and of the rights and powers herein granted.

14.Powers Coupled with an Interest.  All authorizations and agencies and powers herein contained with respect to the Collateral are irrevocable and coupled with an interest.

15.Security Interest Absolute.  All rights of the Agent hereunder, the grant of a security interest in the Collateral and all obligations of Borrower hereunder, shall be absolute and unconditional irrespective of (i) any lack of validity or enforceability of the Loan Agreement, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (ii) any change in time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Note or any other agreement or instrument, (iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to or departure from any guarantee, for all or any of the Obligations, or (iv) any other circumstance which might otherwise constitute a defense available to (other than the defense of indefeasible payment), or a discharge of, Borrower in respect of the Obligations or in respect of this Pledge Agreement.

16.Fees and Expenses.   To the extent provided in the Loan Agreement, Borrower shall be obligated to, upon demand, pay to the Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts or agents which the Agent or any Lender may incur in connection with (i) the sale of, collection from, or other realization upon, any of the Collateral, or (ii) during the continuance of an Event of Default, the exercise or enforcement of any of the rights of the Agent hereunder.  Any such amounts payable as provided hereunder or thereunder shall be additional obligations secured hereby and by the other Security Documents.

17.Termination.  Upon the payment in full of the Obligations, in immediately available funds, including, without limitation, all unreimbursed costs and expenses of the Agent and of each Lender for which Borrower is responsible, the Agent shall release the Collateral granted to the Agent as provided for herein.  However, such release by the Agent shall not be deemed to terminate or release Borrower from any obligation or liability under this Pledge Agreement which specifically by its terms survives the payment in full of the Obligations.

18.Severability.  Any provision of this Pledge Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent

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of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

19.Paragraph Headings.  The paragraph headings used in this Pledge Agreement are for convenience of reference only and are not to affect the construction, or be taken into consideration in interpreting, this Pledge Agreement.

20.No Waiver; Cumulative Remedies.  Agent shall not by any act delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or in any breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in exercising, on the part of Agent, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by Agent of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Agent would otherwise have on any future occasion.  The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

21.Waivers and Amendments; Successors and Assigns; Governing Law; Venue.  None of the terms or provisions of this Pledge Agreement may be waived, amended, or otherwise modified except by a written instrument executed by the party against which enforcement of such waiver, amendment, or modification is sought.  This Pledge Agreement shall be binding upon Borrower, Agent and the Lenders, and the successors and assigns of each, and shall inure to the benefit of Agent and the Lenders and their successors and assigns and to the benefit of Borrower and Borrower’s successors and permitted assigns; provided that Borrower shall not have any right to (i) assign this Pledge Agreement or any interest herein, or (ii) to assign any interest in the Collateral or any part thereof, or otherwise pledge, encumber or grant any option with respect to the Collateral or any part thereof, or any cash or property held by Borrower as Collateral under this Pledge Agreement if any such assignment, pledge, encumbrance or grant would constitute a violation of the Loan Agreement.  The rights of Agent under this Pledge Agreement shall automatically be transferred to any transferee to which Agent transfers the Note and Loan Agreement pursuant to the terms thereof.  The construction, interpretation, validity, enforceability and effect of all provisions of this Pledge Agreement including, but not limited to, the payment of the Obligations and the legality of the interest rate and other charges shall be construed and enforced in accordance with the internal laws of The Commonwealth of Massachusetts (without regard to conflicts of laws).  Borrower agrees to submit to non-exclusive personal jurisdiction in Suffolk County, in The Commonwealth of Massachusetts in any action or proceeding arising out of this Pledge Agreement and, in furtherance of such agreement, Borrower hereby agrees and consents that, without limiting other methods of obtaining jurisdiction, personal jurisdiction over

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Borrower in any such action or proceeding may be obtained within or without the jurisdiction of any court located in The Commonwealth of Massachusetts and that any process or notice of motion or other application to any such court in connection with any such action or proceeding may be served upon Borrower by registered or certified mail to or by personal service at the last known address of Borrower, whether such address be within or without the jurisdiction of any such court.

22.Executive Offices.  Borrower shall not (i) change the location of its chief executive offices or sole place of business from the location as of the date hereof or remove its books and records from such location, or (ii) change its name, identity or structure if, in either case, such change is prohibited by the Loan Agreement.

23.Notices.  Notices by Agent to Borrower, to be effective, shall be in writing and shall be hand-delivered or sent by Federal Express, or other reputable national overnight courier service, or by postage pre-paid registered or certified mail, return receipt requested, addressed to Borrower at its address set forth below its signature hereto, with a copy in each instance to Post Heymann & Koffler LLP at the address set forth in Section 14.1 of the Loan Agreement, and shall be deemed to have been duly given or made (a) when delivered if hand-delivered or sent by Federal Express, or other reputable national overnight courier service, or (b) when delivered if sent by registered or certified mail.  Any communications by Borrower to Agent may be given in any manner set forth in the immediately preceding sentence, with a copy to Riemer & Braunstein LLP, Attention: Kevin J. Lyons, Esq., to the addresses set forth in Section 14.1 of the Loan Agreement.

24.Entire Understanding.  Agent acknowledges that this Pledge Agreement, the Note and the other Loan Documents and Security Documents set forth the entire agreement and understanding of Lender and Borrower with respect to the Loan and that no oral or other agreements, understanding, representation or warranties exist with respect to the Loan, other than those set forth in this Pledge Agreement, the Note, and the other Loan Documents and Security Documents.

25.Counterpart Signatures.  This Pledge Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement to be duly executed and delivered as of the date first above written.

		BORROWER:
		FT-FIN ACQUISITION LLC A Delaware limited Liability Company
		By:	PARK PLAZA MALL, LLC, a Delaware limited liability company, its Sole Member
			By:	FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, its Sole Member
			By:
			Name:	Carolyn Tiffany
			Title:	Chief Operating Officer
Addresses:
1.    Chief Executive Office:
c/o First Union Real Estate Equity and Mortgage Investments
7 Bulfinch Place, Suite 500
Boston, Massachusetts 02114
2.    Principal Place of Business:
c/o First Union Real Estate Equity and Mortgage Investments
7 Bulfinch Place, Suite 500
Boston, Massachusetts 02114
KEYBANK NATIONAL ASSOCIATION,
A national banking association
By:
	Jeffry M. Morrison
	duly authorized

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SCHEDULE 1

To Pledge

Agreement

DESCRIPTION OF PLEDGED INTERESTS

Issuers of Pledged Interests	Type of Interest	Percentage of Issued Interests	Permitted Liens
FT-FLORIDA PROPERTY LLC	Membership	100.0%	None
FT-WD PROPERTY LLC	Membership	100.0%	None
FT-ORLANDO PROPERTY LLC	Membership	100.0%	None
FT-CHURCHILL PROPERTY L.P.	Limited Partnership	99%	None
FT-KRG PROPERTY L.P.	Limited Partnership	99%	None

EX-10.4

Exhibit 10.4

GUARANTY

GUARANTY, dated as of November 18, 2004 (the “Guaranty”), by FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio business trust (the “Guarantor”), in favor of KEYBANK NATIONAL ASSOCIATION, a national banking association having an address at 101 Federal Street, Boston, Massachusetts 02110, as the agent (KEYBANK NATIONAL ASSOCIATION, in such capacity as the agent, hereinafter referred to as the “Agent”) for a syndicate of Lenders (singly and collectively, the “Lenders”) as specifically provided in the Loan Agreement (as defined below).

INTRODUCTORY STATEMENT

WHEREAS, pursuant to that certain Loan Agreement of even date herewith (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”) entered into by and among FT-FIN ACQUISITION LLC, a Delaware limited liability company (the “Borrower”), the Agent and the Lenders, the Agent and the Lenders have agreed to make a loan to the Borrower in the aggregate principal amount of $53,000,000.00 (the “Loan”), upon the terms and subject to the conditions set forth therein.  Capitalized terms used herein and not otherwise defined herein, but defined in the Loan Agreement, shall have the meaning set forth in the Loan Agreement.

WHEREAS, the Borrower is a subsidiary of the Guarantor and will derive substantial economic benefit from the granting of the Loan.

WHEREAS, as a condition to making the Loan, the Agent and the Lenders have required the Guarantor to execute and deliver this Guaranty, guaranteeing the payment and performance of the Guarantied Obligations set forth below.

NOW THEREFORE, in consideration of the premises and in order to induce the Agent and the Lenders to make the Loan and extend other financial accommodations under the Loan Agreement, the Guarantor hereby agrees as follows:

1.Guaranty.  Guarantor, as a primary party and not merely as a surety, unconditionally and irrevocably guarantees the following obligations (hereinafter, the “Guaranteed Obligations”):

a.Specific Obligations.  The Guarantor shall be:

i.Liable for any loss, damage or liability suffered by Agent and the Lenders, to the extent such arises out of any of the following (hereinafter, a “Guaranty Event”):

a)Fraud by the Guarantor;

b)Breach of a material warranty or material representation with respect to the Guarantor;

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c)Breach of a material warranty or material representation by the Guarantor with respect to the Borrower, any Property Owner or the Loan Arrangement;

d)Failure of the Borrower or any Property Owner to pay when due, prior to an Event of Default, any amounts for real estate taxes or insurance premiums;

e)Misappropriation by the Borrower or the Property Owner of any insurance proceeds, condemnation takings or awards, or rental or other income from the Property; and

f)Imposition of any taxes, assessments, impositions, recording fees, and other governmental charges with respect to the recording of the Mortgage and/or establishment, structure and effectuation of the Loan Arrangement.

ii.Liable under the Environmental Indemnity; and

iii.Liable for the amount of any distributions made by the Borrower, FT-FIN GP or any Property Owner to the Guarantor in breach of the terms and provisions of the Loan Documents.

b.Additional Obligations.  Upon the occurrence of a Trigger Event (as defined hereunder), Guarantor, as a primary party and not merely as a surety, unconditionally and irrevocably guarantees to the Agent and the Lenders the prompt and full payment (and not merely the collectibility), performance and observance of all of the obligations, terms and conditions to be paid, performed or observed by the Borrower under the Loan Agreement, the Note and each other Loan Document, each as the same may be hereafter amended, modified, extended, renewed or recast, including, but not limited to the payment of the then outstanding principal together with interest and other charges thereon as provided for in the Loan Agreement.  As used herein, the term “Trigger Event” shall mean and refer to the occurrence of any of the following events:

i.Borrower or its member or any person or entity having direct or indirect control of Borrower’s member wrongly contests in bad faith or in any way wrongly interferes with, in bad faith, directly or indirectly any foreclosure action, UCC sale and/or assignment or transfer in lieu of foreclosure transaction commenced by Agent or any Lender or with any other enforcement of Agent’s or any Lender’s rights, powers or remedies under the Mortgage or any of the other Security Documents or under any document evidencing, securing or otherwise relating to the Property or any portion of the foregoing (whether by making any motion, bringing any

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counterclaim, claiming any defense, seeking any injunction or other restraint, commencing any action or otherwise);

ii.Borrower or its member or any person or entity having direct or indirect control of Borrower’s member in bad faith initiates a voluntary filing with respect to Borrower under the provisions of federal, state or other bankruptcy and insolvency law, or votes adversely to Agent’s or any Lender’s interest in an involuntary filing with respect to Borrower under the provisions of federal, state or other bankruptcy and insolvency law;

iii.If a Change of Control shall occur without the prior written consent of the Agent, which consent (i) will not be unreasonably withheld or delayed by the Agent and (ii) will not be conditioned by the Agent on the payment of any fees other than the Agent’s and the Lenders’ reasonable costs associated therewith.

 Upon the occurrence of any Guaranty Event or any Trigger Event, Agent may at its option proceed directly and at once, without further notice, against Guarantor hereunder, without proceeding against Borrower, Property Owner, or any other person or other Collateral for the obligations secured by this Guaranty.  Any sums payable by Guarantor hereunder shall bear interest at the Default Rate from the date of demand until the date paid.

If Borrower, or Guarantor if so required, shall fail or refuse to perform or continue performance of all of the Obligations of the Loan Agreement on the part of Borrower to be kept and performed, then, if an Event of Default exists on account thereof under the Loan Agreement or this Guaranty, in addition to any other rights and remedies which Agent or any Lender may have hereunder or elsewhere, and not in limitation thereof, Agent or any Lender, at such party’s option, may exercise any or all of its rights and remedies under the Loan Agreement and each other Loan Document.

This Guaranty shall survive and continue in full force and effect beyond and after the payment and satisfaction of the Guaranteed Obligations and the obligations of Borrower in the event Agent or any Lender is required to disgorge or return any payment or property received as a result of any laws pertaining to preferences, fraudulent transfers or fraudulent conveyances.

2.Waiver.  The Guarantor hereby absolutely, unconditionally and irrevocably waives, to the fullest extent permitted by law, (i) promptness, diligence, notice of acceptance and any other notice with respect to this Guaranty, (ii) presentment, demand of payment, protest, notice of dishonor or nonpayment and any other notice with respect to the Guaranteed Obligations, (iii) any requirement that the Agent protect, secure, perfect or insure any security interest or Lien on any property subject thereto or exhaust any right or take any action against the Borrower or any other Person or any collateral (other than the Collateral pledged to the Agent and the Lenders pursuant to the Security Documents), (iv) any and all right to assert any defense (other than the defense of indefeasible payment), set-off, counterclaim or cross-claim of any nature whatsoever with respect to

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this Guaranty (except as otherwise provided in Section 20(a)(iii) hereof), the obligations of the Guarantor hereunder or the obligations of any other person or party relating to this Guaranty or the obligations of the Guarantor hereunder or otherwise with respect to the Guaranteed Obligations in any action or proceeding brought by the Agent to collect the Guaranteed Obligations or any portion thereof or to enforce the obligations of the Guarantor under this Guaranty, and (v) any other action, event or precondition to the enforcement of this Guaranty or the performance by the Guarantor of the obligations hereunder.

3.Guaranty Absolute.

a.The Guarantor guarantees that, to the fullest extent permitted by law, the Guaranteed Obligations will be paid or performed strictly in accordance with their terms, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Agent with respect thereto.

b.No invalidity, irregularity, voidability, voidness or unenforceability of the Loan Agreement, the Note, or any other Loan Document or any other agreement or instrument relating thereto, or of all or any part of the Guaranteed Obligations or of any security therefor shall affect, impair or be a defense to this Guaranty.

c.This Guaranty is one of payment and performance, not collection, and the obligations of the Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this Guaranty, irrespective of whether any action is brought against or any Affiliate or Subsidiary thereof or whether or any Affiliate or Subsidiary thereof is joined in any such action or actions.

d.The liability of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of:

i.any change in the manner, place or terms of payment or performance, and/or any change or extension of the time of payment or performance of, renewal or alteration of, any Guaranteed Obligation, any security therefor, or any liability incurred directly or indirectly in respect thereof, or any other amendment or waiver of or any consent to departure from the Loan Agreement or the Note or any other Loan Document, including any increase in the Guaranteed Obligations resulting from the extension of additional credit to the Borrower or any Subsidiary or Affiliate thereof or otherwise;

ii.any sale, exchange, release, surrender, realization upon any property by whomsoever at any time pledged or mortgaged to secure, or howsoever

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securing, all or any of the Guaranteed Obligations (other than the Collateral pledged to the Agent and the Lenders under the Security Documents), and/or any offset against such Guaranteed Obligations, or failure to perfect, or continue the perfection of, any Lien in any such property, or delay in the perfection of any such Lien, or any amendment or waiver of or consent to departure from any other guaranty for all or any of the Guaranteed Obligations;

iii.any exercise or failure to exercise any rights against the Borrower or any Affiliate or Subsidiary thereof or others (including the Guarantor);

iv.any settlement or compromise of any Guaranteed Obligation, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof;

v.any manner of application of Collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral for all or any of the Guaranteed Obligations or any other assets of the Borrower or any Affiliate or Subsidiary thereof,

vi.any change, restructuring or termination of the existence of the Borrower or any Affiliate or Subsidiary thereof;

vii.the release of the Borrower or any other party, other than the Guarantor, now or hereafter liable upon or in respect of the Loan Documents; or

viii.any other agreements or circumstance of any nature whatsoever which might otherwise constitute a defense available to, or a discharge of, this Guaranty and/or the obligations of the Guarantor hereunder, or a defense to, or discharge of, the Borrower or any Affiliate or Subsidiary thereof relating to this Guaranty or the obligations of the Guarantor hereunder or otherwise with respect to the Loan or other financial accommodations to the Borrower (other than the defense of indefeasible payment).

i)The Agent may at any time and from time to time (whether or not after revocation or termination of this Guaranty) without the consent of, or notice (except as shall be required by applicable statute and cannot be waived) to, the Guarantor, and without incurring responsibility to the Guarantor or impairing or releasing the obligations of the Guarantor hereunder, apply any sums by whomsoever paid or howsoever realized to any Guaranteed Obligation regardless of what Guaranteed Obligations remain unpaid.

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ii)This Guaranty shall continue to be effective or be reinstated, as the case may be, if claim is ever made upon the Agent for repayment or recovery of any amount or amounts received by the Agent in payment or on account of any of the Guaranteed Obligations as a result of laws relating to preferences, fraudulent transfers and fraudulent conveyances, and the Agent repays all or part of said amount by reason of any judgment, decree or order of any court or administrative body having jurisdiction over the Agent or its property, or any settlement or compromise of any such claim effected by the Agent with any such claimant (including the Borrower).  In such event the Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon the Guarantor, notwithstanding any revocation hereof or the cancellation of any note (including the Note) or other instrument evidencing any Guaranteed Obligation, and the Guarantor shall be and remain liable to the Agent hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Agent.

4.Continuing Guaranty. This Guaranty is a continuing one and shall (i) remain in full force and effect until the indefeasible payment and satisfaction in full of the Guaranteed Obligations, (ii) be binding upon the Guarantor, its successors and assigns, and (iii) inure to the benefit of, and be enforceable by, the Agent and the Lenders. All obligations to which this Guaranty applies shall be conclusively presumed to have been created in reliance hereon.

5.Representations, Warranties and Covenants. The Guarantor hereby represents, warrants and covenants to and with the Agent and the Lenders that:

a.The Guarantor has the power to execute and deliver this Guaranty and to incur and perform its obligations hereunder;

b.The Guarantor has duly taken all necessary action to authorize the execution, delivery and performance of this Guaranty and to incur and perform its obligations hereunder;

c.No consent, approval, authorization or other action by, and no notice to or of, or declaration or filing with, any governmental or other public body, or any other Person, is required for the due authorization, execution, delivery and performance by the Guarantor of this Guaranty or the consummation of the transactions contemplated hereby;

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d.The execution, delivery and performance by the Guarantor of this Guaranty does not and will not, with the passage of time or the giving of notice or both, violate or otherwise conflict with any term or provision of any material agreement, instrument, judgment, decree, order or any statute, rule or governmental regulation applicable to the Guarantor or result in the creation of any Lien upon any of its properties or assets pursuant thereto;

e.This Guaranty has been duly authorized, executed and delivered by the Guarantor and constitutes the legal, valid and binding obligation of the Guarantor, and is enforceable against the Guarantor in accordance with its terms, except as enforcement thereof may be subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally, and general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law); and

f.The granting of the Loan to the Borrower will constitute a material economic benefit to the Guarantor.

6.Affirmative Covenants.  The Guarantor covenants and agrees that, from the date hereof and so long as the Loan or the other Guaranteed Obligations remain outstanding, the Guarantor shall pay, perform, observe and otherwise comply with all of the affirmative covenants set forth in Article 7 of the Loan Agreement that have been made by the Borrower therein with respect to the Subsidiaries or the Loan Parties, but only to the extent that such covenants were made with respect to the Guarantor.

7.Negative Covenants.  The Guarantor covenants and agrees that, from the date hereof and so long as the Loan or the other Guaranteed Obligations remain outstanding, the Guarantor shall not take any action (or otherwise suffer or permit to occur any event) contrary to the negative covenants set forth in Article 8 of the Loan Agreement, as agreed by the Borrower therein with respect to the Subsidiaries or the Loan Parties, but only to the extent that such covenants were made with respect to the Guarantor.

8.Expenses. The Guarantor will, upon demand, reimburse the Agent for any sums, costs, and expenses which the Agent and/or the Lenders may pay or incur pursuant to the provisions of this Guaranty or in enforcing this Guaranty or in enforcing payment of the Guaranteed Obligations or otherwise in connection with the provisions hereof, including court costs, collection charges, and reasonable attorneys’ fees, together with interest thereon as specified in Section 15 hereof.

9.Terms.

a.All terms defined in the Uniform Commercial Code of The Commonwealth of Massachusetts (as amended and in effect from time to time, the “UCC”) and used

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herein shall have the meanings as defined in the UCC, unless the context otherwise requires.

b.The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.

c.All references herein to Sections and subsections shall be deemed to be references to Sections and subsections of this Guaranty unless the context shall otherwise require.

10.Amendments and Modification. No provision hereof shall be modified, altered or limited except by written instrument expressly referring to this Guaranty and to such provision, and executed by the party to be charged.

11.Waiver of Subrogation Rights. Until such time as all the Guaranteed Obligations have been indefeasibly satisfied (including the expiration of any applicable voidable preference period under the federal bankruptcy laws), the Guarantor hereby waives and releases any and all rights and claims it may now or hereafter have or acquire against the Borrower that would constitute it a “creditor” of the Borrower for purposes of the federal bankruptcy laws, including all rights of subrogation against the Borrower and its property and all rights of indemnification, contribution and reimbursement from the Borrower and its property, regardless of whether such rights arise in connection with this Guaranty, by operation of law, pursuant to contract or otherwise.

12.Remedies Upon Default.

a.Upon the occurrence and during the continuance of any Event of Default, in addition to any other rights and remedies which the Agent and/or the Lenders may have hereunder or at law, and not in limitation thereof, the Agent may, without notice to or demand upon the Borrower or the Guarantor, declare any Guaranteed Obligations immediately due and payable, and shall be entitled to enforce the obligations of the Guarantor hereunder.

b.The Agent’s rights under this Guaranty shall be in addition to, and not in limitation of, all of the rights and remedies of the Agent and/or the Lenders under the Loan Documents.  All rights and remedies of the Agent and/or the Lenders shall be cumulative and may be exercised in such manner and combination as the Agent and/or the Lenders, respectively, may determine.

13.Set-Off.  After the occurrence and during the continuance of any Event of Default, and Accounts, deposits, balances or other sums credited by or due from the Agent, any affiliate of the Agent or any of the Lenders, or from any affiliate of any of the Lenders, to the Guarantor may to the fullest extent not prohibited by applicable law at any time or from time to time, without regard to the existence, sufficiency or adequacy of any other

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collateral, and without notice or compliance with any other condition precedent now or hereafter imposed by statute, rule of law or otherwise, all of which are hereby waived to the fullest extent permitted by law, be set off, appropriated and applied by the Agent against any or all of the Guaranteed Obligations irrespective of whether demand shall have been made, in such manner as the Agent in its sole and absolute discretion may determine.  Within three (3) Business Days of making any such set off, appropriation or application, the Agent agrees to notify Guarantor thereof, provided the failure to give such notice shall not affect the validity of such set off or appropriation or application.  ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR ANY OF THE LENDERS TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH ACCOUNTS, DEPOSITS, CREDITS OR OTHER PROPERTY OF THE GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

14.Statute of Limitations. Any acknowledgment or new promise, whether by payment of principal or interest or otherwise and whether by the Borrower or others (including the Guarantor), with respect to any of the Guaranteed Obligations shall, if the statute of limitations in favor of the Guarantor against the Agent shall have commenced to run, toll the running of such statute of limitations and, if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations.

15.Interest. All amounts payable from time to time by the Guarantor hereunder shall bear interest at the Default Rate, provided, that such interest shall not be duplicative of any obligations payable under the Loan Agreement.

16.Rights and Remedies Not Waived. No act, omission or delay by the Agent shall constitute a waiver of its rights and remedies hereunder or otherwise. No single or partial waiver by the Agent of any default hereunder or right or remedy which it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion.

17.Admissibility of Guaranty.  The Guarantor agrees that any copy of this Guaranty signed by the Guarantor and transmitted by telecopier for delivery to the Agent shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence.

18.Notices. All notices, requests and demands to or upon the Agent, the Lenders or the Guarantor under this Guaranty shall be in writing and given as provided in the Loan Agreement (and with respect to the Guarantor, c/o the Borrower at the address of the Borrower as set forth in the Loan Agreement).

19.Counterparts. This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and

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delivered shall be an original and all of which shall together constitute one and the same agreement.

20.CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; ETC.

a.ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY SECURITY DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR OF THE UNITED STATES OF AMERICA FOR THE DISTRICT OF MASSACHUSETTS, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING, (i) TRIAL BY JURY, (ii) TO THE EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (iii) THE RIGHT TO IMPOSE ANY SET-OFF, COUNTERCLAIM OR CROSS-CLAIM UNLESS SUCH SET-OFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION.

b.The Guarantor irrevocably consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by certified mail, postage prepaid, to the Guarantor at its address determined pursuant to Section 18 hereof.

c.Nothing herein shall affect the right of the Agent to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Guarantor in any other jurisdiction.

d.The Guarantor hereby waives presentment, notice of dishonor and protests of all instruments included in or evidencing any of the Guaranteed Obligations, and any and all other notices and demands whatsoever (except as expressly provided herein).

21.GOVERNING LAW. THIS GUARANTY, THE SECURITY DOCUMENTS AND THE GUARANTEED OBLIGATIONS SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS APPLICABLE

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TO CONTRACTS EXECUTED AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

22.Captions; Separability.

a.The captions of the Sections and subsections of this Guaranty have been inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Guaranty.

b.If any term of this Guaranty shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby.

23.Acknowledgment of Receipt. The Guarantor acknowledges receipt of a copy of this Guaranty and each of the Loan Documents.

24.Entire Agreement. This Guaranty sets forth the entire agreement and understanding of the Agent, the Lenders and the Guarantor with respect to the matters covered hereby and, by accepting this Guaranty, the Guarantor acknowledges that no oral or other understanding, agreements, representations or warranties have been made and/or exist with respect to the matters covered by this Guaranty or with respect to the obligations of the Guarantor hereunder or otherwise, except as specifically set forth in this Guaranty.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Guarantor has duly executed or caused this Guaranty to be duly executed in The Commonwealth of Massachusetts as of the date first above set forth.

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
	By:
	Name:	Carolyn Tiffany
	Title:	Chief Operating Officer

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EX-10.5

Exhibit 10.5

INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS

This indemnity agreement (“Indemnity Agreement”), dated as of November 18, 2004, is given pursuant to the terms and conditions of the Loan Agreement dated as of even date captioned “Loan Agreement” (the “Loan Agreement”) among FT-FIN ACQUISITION LLC, a Delaware limited liability company (“Borrower”), KEYBANK NATIONAL ASSOCIATION, a national banking association having an address at 101 Federal Street, Boston, Massachusetts, and the other lending institutions which become parties to the Loan Agreement (KEYBANK NATIONAL ASSOCIATION and such other lending institutions which become parties to the Loan Agreement are collectively referred to as the “Lenders” and individually as the “Lender”), and KEYBANK NATIONAL ASSOCIATION, as Agent (the “Agent”).  All capitalized terms used in this Indemnity Agreement which are not otherwise specifically defined herein shall have the same meaning herein as in the Loan Agreement.

W I T N E S S E T H:

WHEREAS, Borrower is the owner, directly and indirectly, of all or a substantial portion of the ownership interests in the Borrower Partnerships or Borrower LLCs (each such entity a “Subsidiary” collectively the “Subsidiaries”), which Subsidiaries own various fee, ground lease, land estate and other interests in the Individual Properties (such interests, collectively, the “Property”);

WHEREAS, the Agent, on behalf of itself and the Lenders, has made and Borrower has accepted a loan in the amount of $53,000,000.00 (the “Loan”), which Loan is evidenced by that certain Note of even date from Borrower payable to the Agent on behalf of itself and the Lenders in the principal amount of $53,000,000.00 (the “Note”) executed pursuant to the Loan Agreement;

WHEREAS, as a condition to making the Loan, the Agent requires Borrower, certain of the Subsidiaries of the Borrower, and First Union Real Estate Equity and Mortgage Investments (“First Union”) to provide certain indemnities concerning Hazardous Materials (as hereinafter defined) presently upon, in or under any Property, or hereafter placed or otherwise located thereon or therein;

WHEREAS, to induce the Agent to make the Loan to Borrower, Borrower, First Union, Churchill and Orlando (singly and collectively, the “Indemnitor”) have agreed to provide this Indemnity Agreement for the Agent’s benefit.

NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 ($10.00) Dollars and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agent, by its acceptance of delivery hereof, Indemnitor hereby agrees as follows:

1.Definitions.  The following definitions shall apply for purposes of this Indemnity Agreement:

a.“Environmental Law” shall mean any federal, state or local statute, regulation or ordinance or any judicial or administrative decree or decision, whether now existing or hereinafter enacted, promulgated or issued, with respect to any

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Hazardous Materials, drinking water, groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid waste, waste water, storm water run-off, waste emissions or wells.  Without limiting the generality of the foregoing, the term shall encompass each of the following statutes, and regulations promulgated thereunder, and amendments and successors to such statutes and regulations, as may be enacted and promulgated from time to time:  (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (codified in scattered sections of 26 U.S.C.; 33 U.S.C.; 42 U.S.C. and 42 U.S.C. §9601 et seq.); (ii) the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et seq.); (iii) the Toxic Substances Control Act (15 U.S.C. §2601 et seq.); (iv) the Clean Water Act (33 U.S.C. §1251 et seq.); (v) the Clean Air Act (42 U.S.C. §7401 et seq.); (vi) the Safe Drinking Water Act (21 U.S.C. §349; 42 U.S.C. §201 and §300f et seq.); (vii) the National Environmental Policy Act of 1969 (42 U.S.C. §4321); and (viii) the Superfund Amendment and Reauthorization Act of 1986 (codified in scattered sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.).

b.“Hazardous Materials” shall mean each and every element, compound, chemical mixture, contaminant, pollutant, material, waste or other substance which is defined, determined or identified as hazardous or toxic under any Environmental Law.  Without limiting the generality of the foregoing, the term shall mean and include:

i.“hazardous substances” as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendment and Reauthorization Act of 1986, or Title III of the Superfund Amendment and Reauthorization Act, each as amended, and regulations promulgated thereunder;

ii.“hazardous waste” as defined in the Resource Conservation and Recovery Act of 1976, as amended, and regulations promulgated thereunder;

iii.“hazardous materials” as defined in the Hazardous Materials Transportation Act, as amended, and regulations promulgated thereunder;

iv.“chemical substance or mixture” as defined in the Toxic Substances Control Act, as amended, and regulations promulgated thereunder;

c.“Indemnified Parties” shall mean the Agent, each Lender, Agent and each Lender’s parent, Subsidiaries and Affiliates, each of their respective shareholders, directors, officers, employees and agents, and the successors and assigns of any of them; and “Indemnified Party” shall mean any one of the Indemnified Parties.

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d.“Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, storing, escaping, leaching, dumping, or discarding, burying, abandoning, or disposing into the environment.

e.“Threat of Release” shall mean a substantial likelihood of a Release which requires action under Environmental Laws to prevent or mitigate damage to the environment which may result from such Release.

2.Indemnity Agreement.  Indemnitor covenants and agrees, jointly and severally, at its sole cost and expense, to indemnify, defend (at trial and appellate levels and with attorneys, consultants and experts acceptable to Agent) and hold each Indemnified Party harmless against and from any and all liens, damages, losses, liabilities, obligations, settlement payments, penalties, assessments, citations, directives, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, reasonable attorneys’, consultants’ and experts’ fees and disbursements incurred in investigating, defending against, settling or prosecuting any claim, litigation or proceeding) which may at any time be imposed upon, incurred by or asserted or awarded against such Indemnified Party and, and arising directly or indirectly from or out of: (A) the Release or Threat of Release of any Hazardous Materials on, in, under or affecting all or any portion of any Property, regardless of whether or not caused by or within the control of Indemnitor or any Subsidiary; (B) the violation of any Environmental Laws relating to or affecting any Property or Indemnitor or any Subsidiary, whether or not caused by or within the control of Indemnitor or any Subsidiary; (C) the failure of Indemnitor to comply fully with the terms and conditions of this Indemnity Agreement; or (D) the enforcement of this Indemnity Agreement, including, without limitation, (i) the costs of assessment, containment and/or removal of any and all Hazardous Materials from all or any portion of any Property or any surrounding areas, (ii) the costs of any actions taken in response to a Release or Threat of Release of any Hazardous Materials on, in, under or affecting all or any portion of any Property or any surrounding areas to prevent or minimize such Release or Threat of Release so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, and (iii) costs incurred to comply with the Environmental Laws in connection with all or any portion of any Property or any surrounding areas.  The Agent’s and the other Indemnified Parties’ rights under this Indemnity Agreement shall be in addition to all rights of the Agent under the Loan Agreement, the Note, and under any other documents or instruments evidencing, securing or relating to the Loan (the Loan Agreement, the Note, and such other documents or instruments, as amended or modified from time to time, being herein referred to as the “Loan Documents”), and payments by Indemnitor under this Indemnity Agreement shall not reduce Indemnitor’s obligations and liabilities under any of the Loan Documents.  If any action or proceeding in respect of which indemnity may be sought from Indemnitor in accordance with Section 2 is brought or asserted against any Indemnified Party, such Indemnified Party shall promptly notify in writing

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(but the failure to give such notice shall not affect Indemnitor’s obligations hereunder unless Indemnitor demonstrates that the defense of such action or proceeding was materially prejudiced by such failure), and Indemnitor shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party and the payment of all defense costs and expenses.  The Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be borne by the Indemnified Party unless (i) Indemnitor has agreed in writing to pay such fees and expenses, or (ii) Indemnitor shall have failed to assume the defense of such action or proceeding.  If Indemnitor assumes the defense of such an action, (a) no compromise or settlement thereof may be effected by Indemnitor without the Indemnified Party’s consent (which shall not be unreasonably withheld or delayed) unless (i) there is no finding or admission of any violation of law or any violation of the rights of any Person and no effect on any other claims that may be made against the Indemnified Party and (ii) the sole relief provided is monetary damages that are paid in full by Indemnitor and (b) Indemnitor shall have no liability with respect to any compromise or settlement thereof effected without its consent (which shall not be unreasonably withheld).

3.Assessment; Remediation.

a.The Agent shall have the right to require Indemnitor, at its own cost and expense, to obtain a professional environmental assessment for any Property in accordance with the Agent’s then standard environmental assessment requirements, provided that such requirements are consistent with the reasonable guidelines of Phase I or Phase II environmental site assessments as established by the Agent consistently applied in similar situations upon the occurrence of any one or more of the following events: (i) an Event of Default but only during the continuance thereof; or (ii) upon the Agent obtaining knowledge of the occurrence of a Release or Threat of Release on, in, on, under or affecting the said Property and the determination by the Agent that such Release or Threat of Release could reasonably be expected to have a Material Adverse Effect.

b.In the event that Indemnitor does not commence any such environmental assessment within forty-five (45) days of the written request therefor by the Agent, the Agent may, at Indemnitor’s cost and expense, cause such environmental assessment to be undertaken.

c.Any amounts paid or advanced by the Agent and all costs and expenditures incurred in connection with any action taken pursuant to the terms of this Indemnity Agreement, including but not limited to reasonable environmental consultants’ and experts’ fees and expenses, attorneys’ fees and expenses, court costs and all costs of assessment monitoring clean-up, containment, remediation, removal and restoration, with interest thereon at the Default Rate, shall be a

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demand obligation of Indemnitor to the Agent, and shall be added to the Obligations secured by the Collateral and shall be secured by the lien of the Security Documents as fully and as effectively and with the same priority as every other Obligation secured thereby.

4.Survival.

a.The indemnity set forth above in Paragraph 2 shall survive the repayment of the Loan and any exercise by the Agent of any remedies under the Loan Agreement or any other Loan Document.

b.It is agreed and intended by Indemnitor and the Agent that the indemnity set forth above in Paragraph 2 may be assigned or otherwise transferred by the Agent to its successors and assigns and to any subsequent purchaser of all or any portion of the Loan by, through or under the Agent, without notice to Indemnitor and without any further consent of Indemnitor.  To the extent consent of any such assignment or transfer is required by law, advance consent to any such assignment or transfer is hereby given by Indemnitor in order to maximize the extent and effect of the indemnity given hereby.

5.No Waiver.  The liabilities of Indemnitor under this Indemnity Agreement shall in no way be limited or impaired by, and Indemnitor hereby consents to and agrees to be bound by, any amendment or modification of the provisions of the Loan Documents to or with the Agent or any Person who succeeds Indemnitor or any Subsidiary as owner of a Property.  Notwithstanding any terms of any of the Loan Documents to the contrary, the liability of Indemnitor under this Indemnity Agreement shall in no way be limited or impaired by: (i) any extensions of time for performance required by any of the Loan Documents; (ii) any sale, assignment or foreclosure of the Note or any Collateral or any sale or transfer of all or part of a Property; (iii) any exculpatory provision in any of the Loan Documents limiting the Agent’s recourse to property encumbered by the Loan Documents or to any other security, or limiting the Agent’s rights to a deficiency judgment against Indemnitor; (iv) the accuracy or inaccuracy of the representations and warranties made by Indemnitor under any of the Loan Documents; (v) the release of Indemnitor or any other Person from performance or observance of any of the agreements, covenants, terms or conditions contained in the Loan Documents by operation of law, the Agent’s voluntary act, or otherwise; (vi) the release or substitution, in whole or in part, of any security for the Note; or (vii) the Agent’s failure to file any UCC-1 financing statements (or the Agent’s improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Note; and, in any such case, whether with or without notice to Indemnitor and with or without consideration.

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6.Waiver by Indemnitor and Agent.  Indemnitor waives any right or claim of right to cause a marshaling of Indemnitor’s assets or to cause the Agent to proceed against any of the security for the Loan before proceeding under this Indemnity Agreement against Indemnitor or to proceed against Indemnitor in any particular order; Indemnitor agrees that any payments required to be made hereunder shall become due on demand.

7.Delay.  No delay on the Agent’s part in exercising any right, power or privilege under any of the Loan Documents shall operate as a waiver of any privilege, power or right hereunder.

8.Counterparts.  This Indemnity Agreement may be executed in one or more counterparts, each of which shall be deemed an original.  Said counterparts shall constitute but one and the same instrument and shall be binding upon each of the undersigned individually as fully and completely as if all had signed but one instrument so that the liability of the undersigned hereunder shall be unaffected by the failure of any of the undersigned to execute all of said counterparts.

9.Notices.  Each notice, demand, election or request provided for or permitted to be given pursuant to this Indemnity Agreement shall be given in accordance with the terms of the Loan Agreement.

10.Amendments.  No provision of this Indemnity Agreement may be changed, waived, discharged or terminated orally, by telephone or by any other means except by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought.

11.Binding Effect.  Except as herein provided, this Indemnity Agreement shall be binding upon Indemnitor and its successors and assigns, and shall inure to the benefit of the Agent, each Lender, the other Indemnified Parties, and respective successors and assigns.  Notwithstanding the foregoing, Indemnitor, without the prior written consent of the Agent in each instance, which consent shall not be withheld unreasonably, may not assign, transfer or set over to another, in whole or in part, all or any part of its or their benefits, rights, duties and obligations hereunder, including, but not limited to, performance of and compliance with conditions hereof.

12.GOVERNING LAW; CONSENT TO JURISDICTION.  THIS INDEMNITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND INTERPRETED AND DETERMINED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  INDEMNITOR HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS

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INDEMNITY AGREEMENT, AND (B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, OR (II) TO OBJECT TO JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS OR VENUE IN ANY PARTICULAR FORUM WITHIN THE COMMONWEALTH OF MASSACHUSETTS. INDEMNITOR AGREES THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO INDEMNITOR AS SET FORTH IN PARAGRAPH 9 ABOVE, AND SERVICE TO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL BE SO MAILED.  NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT AGENT FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST INDEMNITOR PERSONALLY, AND AGAINST ANY PROPERTY OF INDEMNITOR OR ANY SUBSIDIARY, WITHIN ANY OTHER STATE.  INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF INDEMNITOR AND THE AGENT HEREUNDER OR OF THE SUBMISSION HEREIN MADE BY INDEMNITOR TO PERSONAL JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, Indemnitor has caused this Indemnity Agreement to be executed under seal as of the day and year first written above.

INDEMNITOR:	FT-FIN ACQUISITION LLC,
	a Delaware limited Liability Company
	By:	PARK PLAZA MALL, LLC, a Delaware limited liability company, its Sole Member
		By:			FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, its Sole Member
			By:
			Name:		Carolyn Tiffany
			Title:		Chief Operating Officer
	FT-ORLANDO PROPERTY LLC,
	a Delaware limited Liability Company
	By:			FT-FIN ACQUISITION LLC,
				a Delaware limited Liability Company
	By:			PARK PLAZA MALL, LLC, a Delaware limited liability company, its Sole Member
				By:	FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, its Sole Member
				By:
				Name:	Carolyn Tiffany
				Title:	Chief Operating Officer

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	FT-CHURCHILL PROPERTY L.P.,
	a Delaware limited partnership
	By:	FT-FIN GP LLC, a Delaware limited Liability Company, its General Partner
		By:	FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, its Sole Member
		By:
		Name:	Carolyn Tiffany
		Title:	Chief Operating Officer
	FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, its Sole Member
		By:
		Name:	Carolyn Tiffany
		Title:	Chief Operating Officer
AGENT:	KEYBANK NATIONAL ASSOCIATION
	By:
		Jeffry M. Morrison
		duly authorized

854176.3

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EX-99.1

Exhibit 99.1

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS

AT THE COMPANY

Carolyn Tiffany

Chief Operating Officer

(617) 570-4614

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS ANNOUNCES ACQUISITION OF 16 PROPERTIES FOR APPROXIMATELY $91.6 MILLION

Boston, Massachusetts- November 18, 2004-First Union Real Estate Equity and Mortgage Investments (NYSE:FUR) announced today that it acquired from Finova Capital Corporation 16 triple-net leased properties containing approximately 2.5 million gross square feet for a gross purchase price of approximately $91.6 million, inclusive of the assumption of approximately $31.6 million of existing first mortgage debt on certain of the properties.

Michael L. Ashner, the chief executive officer of First Union, commented, “this transaction is representative of the type of value investing that we are pursuing.”

The $61.1 million equity required for this acquisition was provided in part from the proceeds of a $27 million loan from a third party as well as $33.6 million in net proceeds realized from the sale of the Park Plaza property in June 2004 which were being held by a qualified intermediary to enable First Union to acquire the properties in a 1031 exchange.

The $27 million loan bears interest at 8.55%, has a three-year term, subject to two one year extensions and is secured by first mortgages on certain of the acquired properties as well as First Union’s ownership interest in the single-purpose entities that hold the acquired properties.  In addition, First Union has the right to borrow an additional $26 million under the loan facility upon the satisfaction of certain conditions.  Assuming First Union elects to borrow these additional funds it is expected that the borrowing will occur prior to year end.  First Union anticipates that, subject to the proposed additional financing closing, this acquisition will generate a current return on an $8 million net cash investment of 18.5%, exclusive of amortization.

Certain statements contained in this press release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially.  Further information about these matters and the risks generally with respect to First Union can be found in First Union’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

First Union Real Estate Equity and Mortgage Investments is a NYSE-listed real estate investment trust (REIT) headquartered in Boston, Massachusetts.