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<br />200704126
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<br />repair of the Property, for any waste committed on the Property, for any dangerous or defective
<br />condition of the Property, or for any negligence in the management, upkeep, repair or control of
<br />the Property.
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<br />4. Right to Applv Rents. Subject to the terms and provisions of the Loan
<br />Agreement, Lender shall have the right, but not the obligation, to use and apply any Rents
<br />received hereunder in such order and such manner as Lender may determine for:
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<br />(a) Enforcement or Defense. The payment of costs and expenses of enforcing
<br />or defending the terms of this Agreement or the rights of Lender hereunder, and
<br />collecting any Rents;
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<br />(b) Loan Payments. Interest, principal or other amounts payable pursuant to
<br />(1) the Loan Agreement of even date herewith between Borrower and Lender (the "Loan
<br />Agreement"); (2) the Promissory Note, of even date herewith, in the maximum principal
<br />amount of FIFTY-THREE MILLION AND 00/100 DOLLARS ($53,000,000), executed
<br />by Borrower, bearing interest and being payable to the order of Lender (the "Note");
<br />(3) the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
<br />Filing, of even date herewith, executed by Borrower for the benefit of Lender and relating
<br />to the Property (the "Mortgage"); and all other documents and instruments evidencing,
<br />governing and securing the loan evidenced by the Note (the "Loan") and any and all
<br />modifications, amendments or extensions thereof or replacements or substitutions
<br />therefor (the Loan Agreement, the Note, the Mortgage, this Agreement, such other
<br />documents and instruments, and such modifications, amendments, extensions,
<br />replacements, and substitutions thereof being herein collectively called the "Loan
<br />Documents"); and
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<br />( c) Operating Expenses. Payment of costs and expenses of the operation and
<br />maintenance of the Property, including (1) rentals and other charges payable by Borrower
<br />under any ground lease, sublease or other agreement affecting the Property;
<br />(2) electricity, telephone, water and other utility costs, taxes, assessments, water charges
<br />and sewer rents and other utility and governmental charges levied, assessed or imposed
<br />against the Property; (3) insurance premiums; (4) costs and expenses with respect to any
<br />litigation affecting the Property, the Leases or the Rents; (5) wages and salaries of
<br />employees, commissions of agents and reasonable attorneys' fees and expenses; and
<br />(6) all other carrying costs, fees, charges, reserves, and expenses whatsoever relating to
<br />the Property.
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<br />After the payment of all such costs and expenses and after Lender has established such reserves
<br />as it, in its sole discretion, deems necessary for the proper management of the Property, Lender
<br />shall apply all remaining Rents received by it to the reduction ofthe Obligations.
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<br />5. No Waiver. The exercise or non-exercise by Lender of the rights granted
<br />in this Agreement or the collection and application of Rents by Lender or its agent shall not be a
<br />waiver of any default by Borrower under this Agreement or any other Loan Document. No
<br />action or failure to act by Lender with respect to any obligations of Borrower under the Loan
<br />Documents, or any security or guaranty given for the payment or performance thereof, shall in
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<br />DC \ 952533v.\
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