EXECUTION COPY

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LOAN AGREEMENT

Dated as of August 26, 2014

between

ARP 2014-1 BORROWER, LLC,
as Borrower,

and

GERMAN AMERICAN CAPITAL CORPORATION,
as Lender
 

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TABLE OF CONTENTS
 
 
Page
ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1

Section 1.1
Specific Definitions
1

Section 1.2    
Index of Other Definitions
32

Section 1.3
Principles of Construction
34

 
 
 
ARTICLE 2 THE LOAN
35

Section 2.1
The Loan
35

2.1.1
Agreement to Lend and Borrow
35

2.1.2
Components of the Loan
35

2.1.3
Single Disbursement to Borrower
35

2.1.4
The Note
35

2.1.5
Use of Proceeds
35

Section 2.2
Interest Rate
36

2.2.1
Interest Rate
36

2.2.2
Default Rate
36

2.2.3
Interest Calculation
37

2.2.4
Usury Savings
37

2.2.5
Breakage Indemnity
37

Section 2.3
Loan Payments
37

2.3.1
Payments
37

2.3.2
Payments Generally
38

2.3.3
Payment on Maturity Date
38

2.3.4
Late Payment Charge
38

2.3.5
Method and Place of Payment
38

Section 2.4
Prepayments
39

2.4.1
Prepayments
39

2.4.2
Voluntary Prepayments
39

2.4.3
Mandatory Prepayments
39

2.4.4
Prepayments After Default
43

2.4.5
Prepayment/Repayment Conditions
44

Section 2.5
Transfers of Properties
46

Section 2.6
Interest Rate Cap Agreement
48

2.6.1
Interest Rate Cap Agreement
48

2.6.2
Pledge and Collateral Assignment
48

2.6.3
Covenants
48

2.6.4
[Reserved]
50

2.6.5
Representations and Warranties
50

2.6.6
Payments
51

2.6.7
Remedies
51

2.6.8
Sales of Rate Cap Collateral
53

2.6.9
Public Sales Not Possible
53

2.6.10
Receipt of Sale Proceeds
53

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2.6.11
Replacement Interest Rate Cap Agreement
53

Section 2.7
Extension Options
53

2.7.1
Extension Options
53

2.7.2
Extension Documentation
54

Section 2.8
Spread Maintenance Premium
55

Section 2.9
Increased Costs
55

Section 2.10
Taxes
55

2.10.1
Defined Terms
55

2.10.2
Payments Free of Taxes
55

2.10.3
Payment of Other Taxes by Borrower
56

2.10.4
Indemnification by the Loan Parties
56

2.10.5
Evidence of Payments
56

2.10.6
Status of Lender
56

2.10.7
Treatment of Certain Refunds
58

2.10.8
Survival
58

 
 
 
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
58

Section 3.1
General Representations
58

3.1.1
Organization; Special Purpose
59

3.1.2
Proceedings; Enforceability
59

3.1.3
No Conflicts
59

3.1.4
Litigation
60

3.1.5
Agreements
60

3.1.6
Consents
60

3.1.7
Solvency
60

3.1.8
Employee Benefit Matters
60

3.1.9
Compliance with Legal Requirements
61

3.1.10
Perfection Representations
61

3.1.11
Business
62

3.1.12
Management
62

3.1.13
Financial Information
62

3.1.14
Insurance
63

3.1.15
Tax Filings
63

3.1.16
Federal Reserve Regulations
63

3.1.17
Organizational Chart
63

3.1.18
Bank Holding Company
63

3.1.19
FIRPTA
63

3.1.20
Investment Company Act
64

3.1.21
Fiscal Year
64

3.1.22
Other Debt; Liens
64

3.1.23
Contracts
64

3.1.24
Full and Accurate Disclosure
64

3.1.25
Illegal Activity
64

3.1.26
Patriot Act
64

Section 3.2
Property Representations
65

3.2.1
Property/Title
65

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3.2.2
Adverse Claims
65

3.2.3
Title Insurance Owner’s Policy
66

3.2.4
Deed
66

3.2.5
Property File Required Documents
66

3.2.6
Property File
66

3.2.7
Property Taxes and Other Charges
66

3.2.8
Compliance with Renovation Standards
67

3.2.9
Physical Condition
67

3.2.10
Brokers
67

3.2.11
Leasing
67

3.2.12
Insurance
67

3.2.13
Lawsuits, Etc
67

3.2.14
Orders, Injunctions, Etc
67

3.2.15
Agreements Relating to the Properties
67

3.2.16
Accuracy of Information Regarding Property
68

3.2.17
Compliance with Legal Requirements
68

3.2.18
Environmental Laws
68

3.2.19
Utilities and Public Access
69

3.2.20
Eminent Domain
69

3.2.21
Flood Zone
69

3.2.22
Illegal Activity (Substitute Properties)
69

Section 3.3
Survival of Representations
69

 
 
 
ARTICLE 4 COVENANTS
69

Section 4.1
Affirmative Covenants
69

4.1.1
Compliance with Laws, Etc
69

4.1.2
Preservation of Existence
70

4.1.3
Non-Property Taxes
70

4.1.4
Access to Properties
71

4.1.5
Perform Loan Documents
71

4.1.6
Awards and Insurance Benefits
71

4.1.7
Security Interest; Further Assurances
71

4.1.8
Keeping of Records and Books of Account
71

4.1.9
Special Purpose Bankruptcy Remote Entity/Separateness
72

4.1.10
Location of Records
72

4.1.11
Business and Operations
72

4.1.12
Leasing Matters
72

4.1.13
Property Management
73

4.1.14
Property Files
73

4.1.15
Security Deposits
73

4.1.16
Anti-Money Laundering
74

4.1.17
OFAC
75

4.1.18
Cooperate in Legal Proceedings
75

4.1.19
Further Assurances
75

4.1.20
Costs and Expenses
75

4.1.21
Indemnity
76

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4.1.22
Formation of a Borrower TRS
77

Section 4.2
Negative Covenants
77

4.2.1
Prohibition Against Termination or Modification
77

4.2.2
Liens Against Collateral
78

4.2.3
Transfers
78

4.2.4
Change in Business
78

4.2.5
Changes to Accounts
78

4.2.6
Dissolution, Merger, Consolidation, Etc
79

4.2.7
ERISA Matters
79

4.2.8
Indebtedness
79

4.2.9
Limitation on Transactions with Affiliates
79

4.2.10
Loan Documents
80

4.2.11
Limitation on Investments
80

4.2.12
Restricted Junior Payments
80

4.2.13
Limitation on Issuance of Equity Interests
80

4.2.14
Principal Place of Business
80

4.2.15
Change of Name, Identity or Structure
80

4.2.16
No Embargoed Persons
80

4.2.17
Special Purpose Bankruptcy Remote Entity
81

Section 4.3
Reporting Covenants
81

4.3.1
Financial Reporting
81

4.3.2
Reporting on Adverse Effects
83

4.3.3
Litigation
83

4.3.4
Event of Default
83

4.3.5
Other Defaults
83

4.3.6
Properties Schedule
83

4.3.7
Disqualified Properties
84

4.3.8
Security Deposits
84

4.3.9
ERISA Matters
84

4.3.10
[Intentionally omitted.]
84

4.3.11
Periodic Rating Agency Information
84

4.3.12
Other Reports
84

Section 4.4
Property Covenants
85

4.4.1
Ownership of the Property
85

4.4.2
Liens Against the Property
85

4.4.3
Title Insurance for the Property
85

4.4.4
Deeds
85

4.4.5
Mortgage Documents
85

4.4.6
Condition of the Property
85

4.4.7
Compliance with Legal Requirements
85

4.4.8
Property Taxes and Other Charges
86

4.4.9
Compliance with Agreements Relating to the Properties
87

4.4.10
Leasing
87

 
 
 
ARTICLE 5 INSURANCE, CASUALTY AND CONDEMNATION
87

Section 5.1
Insurance
87

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5.1.1
Insurance Policies
87

5.1.2
Insurance Company
91

5.1.3
Special Insurance Reserve
92

Section 5.2
Casualty
92

Section 5.3
Condemnation
93

Section 5.4
Restoration
94

 
 
 
Article 6 CASH MANAGEMENT AND RESERVE FUNDS
98

Section 6.1
Cash Management Arrangements
98

6.1.1
Rent Deposit Account and Cash Management Account
98

6.1.2
Investment of Funds in Cash Management Account, Accounts, and Rent Deposit
Account
100

6.1.3
Borrower’s Operating Account
101

6.1.4
General
101

Section 6.2
Tax Funds
101

6.2.1
Deposits of Tax Funds
101

6.2.2
Release of Tax Funds
101

6.2.3
Special Reserve of Tax Funds
102

Section 6.3
Insurance Funds
102

6.3.1
Deposits of Insurance Funds
102

6.3.2
Release of Insurance Funds
102

Section 6.4
Capital Expenditure Funds
102

6.4.1
Deposits of Capital Expenditure Funds
103

6.4.2
Release of Capital Expenditure Funds
103

Section 6.5
Special Insurance Reserve Account
103

Section 6.6
Casualty and Condemnation Account
103

Section 6.7
Cash Collateral Reserve
104

6.7.1
Cash Collateral Account
104

6.7.2
Withdrawal of Cash Collateral Funds
104

6.7.3
Release of Cash Collateral Funds
104

Section 6.8
Property Cash Flow Allocation
105

6.8.1
Order of Priority of Funds in Cash Management Account
105

6.8.2
Application During Event of Default
106

6.8.3
Annual Budget
106

6.8.4
Extraordinary Operating Expenses
107

Section 6.9
Security Interest in Reserve Funds
107

Section 6.10
Eligibility Reserve Account
108

Section 6.11
Release of Reserve Funds Generally
108

 
 
 
Article 7 PERMITTED TRANSFERS
108

Section 7.1
Permitted Transfers
108

Section 7.2
Cost and Expenses; Searches; Copies
110

 
 
 
Article 8 DEFAULTS
110

Section 8.1
Events of Default
110

Section 8.2
Remedies
113

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8.2.1
Acceleration
113

8.2.2
Remedies Cumulative
113

8.2.3
Severance
114

8.2.4
Lender’s Right to Perform
115

 
 
 
Article 9 SECURITIZATION
115

Section 9.1
Securitization
115

Section 9.2
Securitization Indemnification
118

Section 9.3
Severance
120

9.3.1
Severance Documentation
120

9.3.2
Cooperation; Execution; Delivery
121

 
 
 
Article 10 MISCELLANEOUS
121

Section 10.1
Survival; Successors and Assigns
121

Section 10.2
Lender’s Discretion; Rating Agency Review Waiver
121

Section 10.3
Governing Law
122

Section 10.4
Modification, Waiver in Writing
123

Section 10.5
Notices
123

Section 10.6
Waiver of Trial by Jury
125

Section 10.7
Headings, Schedules and Exhibits
125

Section 10.8
Severability
125

Section 10.9
Preferences
125

Section 10.10
Waiver of Notice
125

Section 10.11
Remedies of Borrower
126

Section 10.12
Offsets, Counterclaims and Defenses
126

Section 10.13
No Joint Venture or Partnership; No Third Party Beneficiaries
126

Section 10.14
Publicity
126

Section 10.15
Waiver of Marshalling of Assets
127

Section 10.16
Certain Waivers
127

Section 10.17
Conflict; Construction of Documents; Reliance
127

Section 10.18
Brokers and Financial Advisors
127

Section 10.19
Prior Agreements
128

Section 10.20
Servicer
128

Section 10.21
Joint and Several Liability
128

Section 10.22
Creation of Security Interest
128

Section 10.23
Assignments and Participations
128

Section 10.24
Register and Participant Register
129

Section 10.25
Counterparts
129

Section 10.26
Set-Off
129

Section 10.27
Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets
130

Section 10.28
Certificated Interests.
130

Section 10.29
Arizona Provisions
131

Section 10.30
California Provisions
131

Section 10.31
Florida Provision
132

Section 10.32
Georgia Provision
132

Section 10.33
Arizona Provision
132

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Section 10.34
California Provision
132

Section 10.35
Nevada Provision
132

Section 10.36
North Carolina Provision
133

Section 10.37
South Carolina Provision
133

Section 10.38
Texas Provision
133

Section 10.39
Tennessee Provision
133

Schedules and Exhibits

Schedules:

Schedule I     -    Properties Schedule
Schedule II    -    Organizational Chart
Schedule III     -    Exceptions to Representations and Warranties
Schedule IV    -    Definition of Special Purpose Bankruptcy Remote Entity
Schedule V    -     Allocated Loan Amount
Schedule VI    -    Qualified Title Insurance Companies
Schedule VII    -    Chief Executive Office, Prior Names and Employer
Identification Number
Schedule VIII    -    Securities
Schedule IX    -    Midland Loan Services – 2014-SFR1 CMBS Asset Management Fees
Schedule X    -    Periodic Rating Agency Information
Schedule XI    -    Vacant Properties
Schedule XII    -    Security Deposit Accounts

Exhibits:

Exhibit A    -     Form of Blocked Account Control Agreement
Exhibit B    -    Form of Property Account Control Agreement
Exhibit C    -    Form of Compliance Certificate
Exhibit D    -    Form of Tenant Direction Letter
Exhibit E    -    Request for Release
Exhibit F    -    Forms of U.S. Tax Compliance Certificate

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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of August 26, 2014 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
corporation, having an address at 60 Wall Street, 10th Floor, New York, New York
10005 (together with its successors and assigns, collectively, “Lender”) and ARP
2014-1 BORROWER, LLC, a Delaware limited liability company, having an address at
c/o American Residential Properties, 7047 E Greenway Parkway Suite 350,
Scottsdale, AZ 85254 (together with its permitted successors and assigns,
collectively, “Borrower”).
All capitalized terms used herein shall have the respective meanings set forth
in Article 1 hereof.
W I T N E S S E T H :
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms and conditions of this Agreement and the other Loan
Documents.
NOW, THEREFORE, in consideration of the covenants set forth in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree, represent and warrant
as follows:
ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1    Specific Definitions.
For all purposes of this Agreement, except as otherwise expressly provided:
“Acknowledgment” means the Acknowledgment, dated on or about the date hereof
made by Counterparty, or as applicable, Approved Counterparty.
“Actual Rent Collections” means, for any period of determination, actual cash
collections of Rents in respect of the Properties by Borrower (or, for the
period prior to the Closing Date, by Borrower’s Affiliates that owned the
Properties) to the extent such Rents relate to such period of determination,
regardless of when actually collected.
“Advance Rent” means, for any given month, any Rent that has been paid by a
Tenant more than one (1) month in advance, as measured from the date of
determination.
“Affiliate” means, as to any Person, any other Person that (i) owns directly or
indirectly forty-nine percent (49%) or more of all equity interests in such
Person, and/or (ii) is in Control of, is Controlled by or is under common
ownership or Control with such Person, and/or (iii) is a director or officer of
such Person or of an Affiliate of such Person, and/or (iv) is the spouse, issue
or parent of such Person or of an Affiliate of such Person.

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“Allocated Loan Amount” means, with respect to each Property, an amount equal to
the portion of the Loan made with respect to such Property, as set forth on
Schedule V as the same may be reduced in accordance with Section 2.4.
“ALTA” means American Land Title Association, or any successor thereto.
“Annual Budget” means the operating and capital budget for the Properties in the
aggregate setting forth, on a month-by-month basis, in reasonable detail, each
line item of Borrower’s good faith estimate of anticipated Rents and other
recurring income, Operating Expenses and Capital Expenditures for the applicable
Fiscal Year.
“Approved Capital Expenditures” means Capital Expenditures incurred by Borrower
and either (i) if no Trigger Period is continuing, included in the Annual Budget
or, if during a Trigger Period, an Approved Annual Budget or (ii) approved by
Lender, which approval shall not be unreasonably withheld, conditioned or
delayed.
“Approved Counterparty” means a counterparty to the Interest Rate Cap Agreement
(or the guarantor of such counterparty’s obligations) that (a) has and shall
maintain, until the expiration of the applicable Interest Rate Cap Agreement,
(i) (x) a long-term unsecured debt rating of not less than “A” by S&P and a
short-term senior unsecured debt rating of at least “A-1” from S&P or (y) if no
short-term debt rating exists, a long-term senior unsecured debt rating of at
least “A+” from S&P, (ii)(x) a long-term unsecured debt rating of not less than
“A2” from Moody’s and a short-term senior unsecured debt rating of at least “P1”
from Moody’s or (y) if no short-term debt rating exists, a long-term senior
unsecured debt rating of at least “A1” from Moody’s and (iii) if the
counterparty is then rated by KBRA (determined as of the date of such Interest
Rate Cap Agreement or any Replacement Interest Rate Cap Agreement, as
applicable), (x) a long-term senior unsecured debt rating of not less than “A”
from KBRA and a short-term debt/deposit rating of at least “K1” from KBRA, or
(y) if no short-term debt rating exists, a long-term senior unsecured debt
rating of at least “A+” from KBRA, or (b) is otherwise acceptable to the Rating
Agencies, as evidenced by a Rating Agency Confirmation to the effect that such
counterparty shall not cause a downgrade, withdrawal or qualification of the
ratings assigned, or to be assigned, to the Securities or any class thereof in
any Securitization.
“Assignment of Leases and Rents” means an Assignment of Leases and Rents for
each Property or for multiple Properties located within the same county or
parish, dated as of the Closing Date (or, in connection with a Property which is
a Substitute Property, dated as of the date of the substitution), executed and
delivered by Borrower, constituting an assignment of the Lease or the Leases, as
applicable, and the proceeds thereof as Collateral for the Loan, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time. The Assignment of Leases and Rents may be included as part of the Mortgage
for such Property or Properties.
“Assignment of Management Agreement” means an Assignment of Management Agreement
and Subordination of Management Fees among Borrower, Manager and Lender,
substantially in the form delivered on the date hereof by Borrower, Existing
Manager and Lender.

2

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“Assumed Note Rate” means, with respect to each Component of the Loan, an
interest rate equal to the sum of 0.50%, plus the applicable Component Spread,
plus LIBOR as determined on the preceding Interest Determination Date.
“Award” means any compensation paid by any Governmental Authority in connection
with a Condemnation in respect to all or any part of a Property.
“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. Section
101 et seq., as the same may be amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors’ rights or any other Federal or state bankruptcy or insolvency law.
“Blocked Account Control Agreement” means the Controlled Account Agreement among
Borrower, Cash Management Account Bank and Lender providing for the exclusive
control of the Cash Management Account and all other Accounts by Lender,
substantially in the form of Exhibit D or such other form as may be reasonably
acceptable to Lender.
“Borrower Security Agreement” that certain Security Agreement, dated as of the
date hereof, executed by Borrower in favor of Lender.
“Borrower TRS” means a wholly-owned Delaware limited liability company
subsidiary of Borrower that is treated for US income tax purposes as a “taxable
REIT subsidiary”.
“BPO Value” means, with respect to any Property, the “as is” value for such
Property set forth in a Broker Price Opinion obtained by Lender with respect to
a Property.
“Broker Price Opinion” means a broker price opinion obtained by Lender.
“Business Day” means any day other than a Saturday, a Sunday or a legal holiday
on which national banks are not open for general business in (i) the State of
New York, (ii) the state where the corporate trust office of the Trustee is
located, or (iii) the state where the servicing offices of the Servicer are
located.
“Calculation Date” means the last day of each calendar quarter during the Term.
“Capital Expenditures” for any period means amounts expended for replacements
and alterations to a Property and required to be capitalized according to GAAP.
“Cap Receipts” means all amounts received by a Borrower pursuant to an Interest
Rate Cap Agreement.
“Carry-Over Property” means a Property that is occupied by a Carry-Over Tenant
at the time of acquisition of such Property by Borrower or its Affiliate.
“Carry-Over Tenant” means one or more individuals who, at the time of
acquisition of a Property by Borrower or its Affiliate, occupy such Property.
“Cash Management Account Bank” shall mean the Eligible Institution selected by
Lender to maintain the Cash Management Account.

3

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“Casualty Threshold Amount” means, with respect to all Casualties arising from
any single Casualty event, an amount equal to two percent (2%) of the
Outstanding Principal Balance as of the date of such Casualty Event.
“Closing Date” means the date of the funding of the Loan.
“Closing Date Debt Yield” means 6.7%.
“Code” means the Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
“Collateral” means, collectively, all of the real, personal and mixed property
in which Liens are purported to be granted pursuant to the Collateral Documents
as security for the Obligations.
“Collateral Assignment of Interest Rate Protection Agreement” means a Collateral
Assignment of Interest Rate Protection Agreement between Borrower and Lender,
substantially in the form delivered on the date hereof by Borrower and Lender.
“Collateral Documents” means Borrower Security Agreement, the Equity Owner
Security Agreement, any Borrower TRS Security Agreement, the Blocked Account
Control Agreement, each Property Account Control Agreement, the Collateral
Assignment of Interest Rate Protection Agreement, the Assignment of Management
Agreement, each Mortgage Document and all other instruments, documents and
agreements delivered by any Loan Party pursuant to this Agreement or any of the
other Loan Documents in order to grant to Lender a Lien on any real, personal or
mixed property of that Loan Party as security for the Obligations, as the same
may be (and each of the foregoing defined terms shall refer to such documents as
they may be) amended, restated, replaced, supplemented or otherwise modified
from time to time.
“Collections” means, without duplication, with respect to any Property, all
Rents, Other Receipts, Insurance Proceeds, Condemnation Proceeds, Net Transfer
Proceeds, Cap Receipts, interest on amounts on deposit in the Cash Management
Account and the Reserve Funds, amounts paid to Borrower (or any Borrower TRS)
pursuant to the terms of the applicable Purchase Agreement, amounts drawn on
security deposits that become Collections pursuant to Section 4.1.15, amounts
paid by Borrower (or any Borrower TRS) to the Cash Management Account pursuant
to this Agreement, and all other payments received with respect to such Property
(except for security deposits) and all “proceeds” (as defined in Section 9-102
of the UCC) of such Property.
“Compliance Certificate” means the certificate in the form attached hereto as
Exhibit C.
“Component” means individually or collectively, as the context may require, any
one of Component A, Component B, Component C, Component D, Component E and
Component F, each as more particularly set forth in Section 2.1.2.
“Component Prime Rate Spread” means, in connection with any conversion of the
Loan from a LIBOR Loan to a Prime Rate Loan, with respect to each Component of
the Loan, the

4

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difference (expressed as the number of basis points) between (a) the sum of (i)
LIBOR, determined as of the Interest Determination Date for which LIBOR was last
available, plus (ii) the Component Spread applicable to such Component, minus
(b) the Prime Rate as of such Interest Determination Date; provided, however,
that if such difference is a negative number for such Component, then the
Component Prime Rate Spread for such Component shall be zero.
“Component Spread” means, (a) with respect to Component A, 1.2005% per annum;
(b) with respect to Component B, 1.8505% per annum, (c) with respect to
Component C, 2.4505% per annum, (d) with respect to Component D, 3.1005% per
annum, (e) with respect to Component E, 4.0205% per annum and (f) with respect
to Component F, 4.5205% per annum.
“Concessions” means, for any period of determination, the value of concessions
(other than free Rent) provided with respect to the Properties by Borrower (or,
for the period prior to the Closing Date, by Borrower’s Affiliates that owned
the Properties).
“Condemnation” means a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of a Property, or
any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting a Property or any part thereof.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.
“Constituent Document” means, (i) with respect to any partnership (whether
limited or general), (a) the certificate of partnership (or equivalent filings),
(b) the partnership agreement (or equivalent organizational documents) of such
partnership and (c) any document setting forth the designation, amount and/or
rights, limitations and preferences of any of such partnership’s partnership
interests or the holders thereof; (ii) with respect to any limited liability
company, (a) the certificate of formation (or the equivalent organizational
documents) of such entity, (b) the operating agreement (or the equivalent
governing documents) of such entity and (c) any document setting forth the
designation, amount and/or rights, limitations and preferences of any of such
limited liability company’s membership interests or the holders thereof; and
(iii) with respect to any other type of entity, the organizational and governing
document for such entity which are equivalent to those described in clauses (i)
and (ii) above, as applicable.
“Contest Security” shall mean any security delivered to Lender by Borrower under
Section 4.1.3 or Section 4.4.8.
“Control” means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, through the ownership of voting securities, by contract
or otherwise, and the terms Controlled, Controlling and Common Control shall
have correlative meanings.
“Counterparty” means, with respect to the Interest Rate Cap Agreement, SMBC
Capital Markets, Inc., and with respect to any Replacement Interest Rate Cap
Agreement, any Approved Counterparty thereunder.

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“Cure Period” means, with respect to the failure of any Property to qualify as
an Eligible Property if such failure is reasonably susceptible of cure, a period
of thirty (30) days after the earlier of actual knowledge of such condition by a
Responsible Officer of Borrower or the Manager or notice thereof by Lender to
Borrower; provided that, if Borrower is diligently pursuing such cure during
such thirty (30) day period and such failure is susceptible of cure but cannot
reasonably be cured within such thirty (30) day period, then such cure period
shall be extended for another ninety (90) days so long as Borrower continues to
diligently pursue such cure and, provided further, that if the Obligations have
been accelerated pursuant to Section 8.2.1, then the cure period hereunder shall
be reduced to zero (0) days. If any failure of any Property to qualify as an
Eligible Property is not reasonably susceptible of cure, then no cure period
shall be available. If any failure of any Property to qualify as an Eligible
Property is due to a Voluntary Action, then no cure period shall be available.
“Cut-Off Date” means June 30, 2014.
“Debt” means the Outstanding Principal Balance together with all interest
accrued and unpaid thereon and all other sums (including the Spread Maintenance
Premium, if applicable) due to Lender from time to time in respect of the Loan
under the Note, this Agreement, the Mortgage Documents, the Environmental
Indemnity or any other Loan Document.
“Debt Service” means, with respect to any particular period of determination,
the scheduled interest payments due under the Note for such period.
“Debt Service Coverage Ratio” means, as of any date of determination, a ratio in
which:
(a)    the numerator is the Underwritten Net Cash Flow calculated for the twelve
(12) month period ending on the Stated Maturity Date, the First Extended
Maturity Date or the Second Extended Maturity Date, as applicable; and
(b)    the denominator is the aggregate debt service for the twelve (12) month
period following such date of determination, calculated as the sum of (i) the
product of (A) the Outstanding Principal Balance as of such date and (B) an
interest rate equal to the sum of (x) the weighted average of the Component
Spreads (based on the outstanding principal balance of the Components as of such
date) and (y) the Strike Price described in clause (b)(ii) of the definition
thereof, and (ii) the regular monthly fee of the certificate administrator
(deemed to be $5,283 per month) and the trustee (deemed to be $417 per month)
under the Servicing Agreement.
“Debt Yield” means, as of any date of determination, a fraction expressed as a
percentage in which:
(a) the numerator is the Underwritten Net Cash Flow; and
(b) the denominator is the Outstanding Principal Balance.
“Default” means the occurrence of any event hereunder or under any other Loan
Document which, but for the giving of notice or passage of time, or both, would
constitute an Event of Default.

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“Default Rate” means, with respect to each Component of the Loan and any other
Obligations, a rate per annum equal to the lesser of (i) the Maximum Legal Rate
or (ii) three percent (3%) above the Interest Rate applicable to such Component.
“Deficiency” means, with respect to any Property File, (i) the failure of one or
more Specified Documents contained therein to be fully executed or to match the
information on the most recent Properties Schedule required to be delivered by
Section 4.3.6, (ii) one or more Specified Documents contained therein are
mutilated, materially damaged or torn or otherwise physically altered or
unreadable or (iii) the absence from a Property File of any Specified Document
required to be contained in such Property File.
“Disqualified Property” means any Property that fails to constitute an Eligible
Property (after the lapse of any applicable Cure Period).
“Eligible Account” means a separate and identifiable account from all other
funds held by the holding institution that is an account or accounts (or
subaccounts thereof) maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
“Eligible Institution” means:
(a)    PNC Bank, National Association so long as PNC Bank, National
Association’s long term unsecured debt rating shall be at least “A2” from
Moody’s and the equivalent by KBRA (if then rated by KBRA) (if the deposits are
to be held in the applicable account for more than 30 days) or PNC Bank,
National Association’s short term deposit or short term unsecured debt rating
shall be at least “P-1” from Moody’s and the equivalent by KBRA (if then rated
by KBRA) (if the deposits are to be held in the applicable account for 30 days
or less); or
(b)    a depository institution or trust company insured by the Federal Deposit
Insurance Corporation the short term unsecured debt obligations or commercial
paper of which are rated at least A-1 by S&P, P-1 by Moody’s, and F-1+ by Fitch
in the case of accounts in which funds are held for thirty (30) days or less or,
in the case of Letters of Credit or accounts in which funds are held for more
than thirty (30) days, the long term unsecured debt obligations of which are
rated at least (i) “AA” by S&P, (ii) “AA“ and/or “F1+” (for securities) and/or
“AAAmmf” (for money market funds), by Fitch and (iii) “Aa2” by Moody’s;
provided that, Bank of America, National Association shall be an Eligible
Institution with respect to Property Accounts and the Security Deposit Accounts
only, so long as Bank of America, National Association’s long term unsecured
debt rating shall be at least “A3” from Moody’s and the equivalent by KBRA (if
then rated by KBRA).
“Eligible Lease” means, as of any date of determination, a Lease for a Property
that satisfies all of the following:
(a)    the Lease reflects customary market standard terms;

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(b)    the Lease is entered into on an arms-length basis without payment support
by any Borrower or its Affiliates (provided that any incentives offered to
Tenants shall not be deemed to constitute such payment support);
(c)    the Lease had, as of its commencement date, an initial lease term of at
least six months, provided that 2% of the Leases may have a month-to-month lease
term;
(d)    the Lease is to a bona-fide third party lessee; and
(e)    the Lease is in compliance with all applicable Legal Requirements in all
material respects.
“Eligible Property” means, as of any date of determination, a Property that is
in compliance with each of the Property Representations and each of the Property
Covenants.
“Environmental Indemnity” means that certain Environmental Indemnity Agreement
dated as of the date hereof executed by Borrower and Guarantor in connection
with the Loan for the benefit of Lender.
“Environmental Laws” has the meaning set forth in the Environmental Indemnity.
“Equity Interests” means, with respect to any Person, shares of capital stock,
partnership interests, membership interests, beneficial interests or other
equity ownership interests in such Person, and any warrants, options or other
rights entitling the holder thereof to purchase or acquire any such equity
interest from such Person.
“Equity Owner” means 2014-SFR1 Equity Owner LLC, a Delaware limited liability
company.
“Equity Owner Guaranty” means that certain Equity Owner Guaranty, dated as of
the date hereof, executed by Equity Owner in favor of Lender.
“Equity Owner Security Agreement” means that certain Equity Owner Security
Agreement, dated as of the date hereof, executed by Equity Owner in favor of
Lender.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor statute.
“ERISA Affiliate” means any corporation or trade or business that is a member of
any group of organizations (i) described in Section 414(b) or (c) of the Code of
which another entity is a member or (ii) described in Section 414(m) or (o) of
the Code of which another entity is a member, except that this clause (ii) shall
apply solely for purposes of potential liability under Section 302(b) of ERISA
and Section 412(b) of the Code and the lien created under Section 303(k) of
ERISA and Section 430(k) of the Code.
“ERISA Event” means (i) the failure to pay a minimum required contribution or
installment to a Plan on or before the due date provided under Section 430 of
the Code or Section 303 of ERISA, (ii) the filing of an application with respect
to a Plan for a waiver of the minimum funding standard under Section 412(c) of
the Code or Section 302(c) of ERISA, (iii) the failure of a Loan Party or any of
its ERISA Affiliates to pay a required contribution or installment to a

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Multiemployer Plan on or before the applicable due date or (iv) any officer of
any Loan Party or any of its ERISA Affiliates knows or has reason to know that a
Plan is in “at risk” status within the meaning of Section 430(i) of the Code or
Section 303(i) of ERISA.
“Event of Bankruptcy” means, with respect to any Person:
(a)    such Person shall fail generally to pay its debts as they come due, or
shall make a general assignment for the benefit of creditors; or any case or
other proceeding shall be instituted by such Person seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of it or its
debts under the Bankruptcy Code; or such Person shall take any corporate,
limited partnership or limited liability company action to authorize any of such
actions; or
(b)    a case or other proceeding shall be commenced, without the application or
consent of such Person in any court seeking the liquidation, reorganization,
debt arrangement, dissolution, winding up, or composition or readjustment of
debts of such Person, the appointment of a trustee, receiver, custodian,
liquidator, assignee, sequestrator or the like for such Person or all or
substantially all of its assets, or any similar action with respect to such
Person under the Bankruptcy Code, and (A) such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of sixty (60) consecutive
days or (B) an order for relief in respect of such Person shall be entered in
such case or proceeding or a decree or order granting such other requested
relief shall be entered.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Lender or required to be withheld or deducted from a payment to a Lender, (a)
Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Lender being organized under the laws of, or having its principal office or its
applicable lending office located in, the jurisdiction imposing such Tax (or any
political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S.
federal withholding Taxes imposed on amounts payable to or for the account of
such Lender with respect to an applicable interest in a Loan pursuant to a law
in effect on the date on which (i) such Lender acquires such interest in the
Loan or (ii) such Lender changes its lending office, except in each case to the
extent that, pursuant to Section 2.10, amounts with respect to such Taxes were
payable either to such Lender's assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its lending office,
(c) Taxes attributable to such Lender’s failure to comply with Section 2.10.6
and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing Management Agreement” means that certain Management Agreement, dated
as of the date hereof, between Borrower and Existing Manager, pursuant to which
Existing Manager is to provide management and other services with respect to the
Properties.
“Existing Manager” means American Residential Properties OP, L.P.
“Extension Date” means the Stated Maturity Date, the First Extended Maturity
Date or the Second Extended Maturity Date, as applicable.
“Extension Option” means the First Extension Option, the Second Extension Option
and the Third Extension Option, as applicable.

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“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.
“Fiscal Quarter” means each three (3) month period ending on March 31, June 30,
September 30 and December 31, respectively, during each year of the Term.
“Fiscal Year” means each twelve (12) month period commencing on January 1 and
ending on December 31 during each year of the Term.
“Fitch” means Fitch, Inc.
“Fixture Filing” means, with respect to any jurisdiction in which any Property
or Properties are located in which a separate, stand alone fixture filing is
required or generally recorded or filed pursuant to the local law or custom (as
reasonably determined by Lender), a Uniform Commercial Code financing statement
(or other form of financing statement required in the jurisdiction in which the
applicable Property or Properties are located) recorded or filed in the real
estate records in which the applicable Property or Properties are located.
“Foreign Lender” means a Lender that is not a U.S. Person.
“Foreign Plan” means any “employee benefit plan” as defined in Section 3(3) of
ERISA that (a) neither is subject to ERISA nor is a governmental plan within the
meaning of Section 3(32) of ERISA and that is maintained, or contributed to, by
a Loan Party or any of its ERISA Affiliates and (b) is mandated by a government
other than the United States (other than a state within the United States or an
instrumentality thereof) for employees of a Loan Party or any of its ERISA
Affiliates.
“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession.
“Governmental Authority” means any court, board, agency, commission, office or
authority of any nature whatsoever or any governmental unit (federal, state,
commonwealth, county, district, municipal, city or otherwise) whether now or
hereafter in existence.
“Government List” means (1) any list maintained by OFAC pursuant to the Patriot
Act, (2) any other list of terrorists, terrorist organizations or narcotics
traffickers maintained pursuant to any of the Rules and Regulations of OFAC that
Lender notified Borrower in writing is now included in “Government Lists”, or
(3) any similar lists maintained by the United States Department of State, the
United States Department of Commerce or any other Governmental Authority or
pursuant to any Executive Order of the President of the United States of America
that Lender notified Borrower in writing is now included in “Government Lists”.

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“GPR” means, as of any date of determination, the sum of (i) the annualized in
place Rents under Eligible Leases for the Properties as of such date and (ii)
annualized market rents for Properties that are vacant as of such date. For
purposes of clause (ii) market rents shall be determined by Lender in its
reasonable discretion; provided that Borrower may object to any such
determination by delivering written notice to Lender within five (5) Business
Days of any such determination and, in such event, the market rents so objected
to shall be as determined by an independent broker opinion of market rent
obtained by Lender at Borrower’s sole cost and expense.
“Guarantor” means Equity Owner and, upon compliance with Section 4.1.23, any
Borrower TRS (if any).
“Hazardous Substance” has the meaning set forth in the Environmental Indemnity.
“Improvements” means the buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on a Property.
“Indebtedness” means, for any Person, without duplication: (i) all indebtedness
of such Person for borrowed money, for amounts drawn under a letter of credit,
or for the deferred purchase price of property for which such Person or its
assets is liable, (ii) all unfunded amounts under a loan agreement, letter of
credit, or other credit facility for which such Person would be liable if such
amounts were advanced thereunder, (iii) all amounts required to be paid by such
Person as a guaranteed payment to partners or a preferred or special dividend,
including any mandatory redemption of shares or interests, (iv) all indebtedness
guaranteed by such Person, directly or indirectly, (v) all obligations under
leases that constitute capital leases for which such Person is liable, (vi) all
obligations of such Person under interest rate swaps, caps, floors, collars and
other interest hedge agreements, in each case for which such Person is liable or
its assets are liable, whether such Person (or its assets) is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss and
(vii) any other contractual obligation for the payment of money which are not
settled within sixty (60) days.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.
“Independent” means, when used with respect to any Person, a Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in Borrower or in any Affiliate of Borrower, (ii) is not
connected with Borrower or any Affiliate of Borrower as an officer, employee,
promoter, underwriter, trustee, partner, member, manager, creditor, director,
supplier, customer or person performing similar functions and (iii) is not a
member of the immediate family of a Person defined in (i) or (ii) above.
“Independent Accountant” means (i) a firm of nationally recognized, certified
public accountants which is Independent and which is selected by Borrower and
reasonably acceptable to Lender or (ii) such other certified public
accountant(s) selected by Borrower, which is Independent and reasonably
acceptable to Lender.

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“Individual Material Adverse Effect” means, in respect of a Property, any event
or condition that has a material adverse effect on the value, use, occupation,
leasing or marketability of such Property or results in any material liability
to, claim against or obligation of Lender or material liability or obligation on
the part of any Loan Party.
“Insolvency Opinion” shall mean that certain bankruptcy non-consolidation
opinion letter dated the date hereof delivered by Hunton & Williams LLP in
connection with the Loan.
“Interest Determination Date” shall mean, (A) with respect to the Initial
Interest Period, the date that is two (2) Business Days before the Closing Date
and (B) with respect to any other Interest Period, the date which is two (2)
Business Days prior to the commencement of such Interest Period. When used with
respect to an Interest Determination Date, Business Day shall mean any day on
which banks are open for dealing in foreign currency and exchange in London.
“Interest Rate” shall mean, with respect to each Interest Period and with
respect to each Component of the Loan, an interest rate per annum equal to (i)
for a LIBOR Loan, the sum of (a) LIBOR determined as of the Interest
Determination Date immediately preceding the commencement of such Interest
Period plus (b) the Component Spread applicable to such Component (or, when
applicable pursuant to this Agreement or any other Loan Document, the Default
Rate); and (ii) for a Prime Rate Loan, the sum of (a) the Prime Rate, plus (b)
the Component Prime Rate Spread applicable to such Component (or, when
applicable pursuant to this Agreement or any other Loan Document, the applicable
Default Rate).
“Interest Rate Cap Agreement” means the Confirmation and Agreement (together
with the schedules relating thereto), dated on or about the date hereof, between
the Counterparty and Borrower, obtained by Borrower and collaterally assigned to
Lender pursuant to this Agreement. After delivery of a Replacement Interest Rate
Cap Agreement to Lender, the term Interest Rate Cap Agreement shall be deemed to
mean such Replacement Interest Rate Cap Agreement and such Replacement Interest
Rate Cap Agreement shall be subject to all requirements applicable to the
Interest Rate Cap Agreement. The Interest Rate Cap Agreement shall be governed
by the laws of the State of New York and shall contain each of the following:
(a)    the notional amount of the Interest Rate Cap Agreement shall be equal to
the maximum principal amount of the Loan;
(b)    the remaining term of the Interest Rate Cap Agreement shall at all times
extend through the end of the Interest Period in which the Maturity Date occurs
as extended from time to time pursuant to this Agreement and the Loan Documents;
(c)    the Interest Rate Cap Agreement shall be issued by the Approved
Counterparty to Borrower and shall be pledged to Lender by Borrower in
accordance with this Agreement;
(d)    the Approved Counterparty under the Interest Rate Cap Agreement shall be
obligated to make a stream of payments, directly to the Cash Management Account
(whether or not an Event of Default has occurred) from time to time equal to the
product of (i) the notional amount of such Interest Rate Cap Agreement
multiplied by (ii) the excess, if any, of LIBOR (including any upward rounding
under the definition of LIBOR) over the Strike Price and shall provide that such
payment shall be made on a monthly

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basis in each case not later than (after giving effect to and assuming the
passage of any cure period afforded to such Counterparty under the Interest Rate
Cap Agreement, which cure period shall not in any event be more than three
Business Days) each Monthly Payment Date;
(e)    the Approved Counterparty under the Interest Rate Cap Agreement shall
execute and deliver the Acknowledgment; and
(f)    the Interest Rate Cap Agreement shall impose no material obligation on
the beneficiary thereof (after payment of the acquisition cost) and shall be in
all material respects satisfactory in form and substance to Lender and shall
satisfy applicable Rating Agency standards and requirements, including, without
limitation, provisions satisfying Rating Agencies standards, requirements and
criteria (i) that incorporate customary tax “gross up” provisions, (ii) whereby
the Counterparty agrees not to file or join in the filing of any petition
against Borrower under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, and (iii) that incorporate, if the Interest Rate
Cap Agreement contemplates collateral posting by the Counterparty, a credit
support annex setting forth the mechanics for collateral to be calculated and
posted that are consistent with Rating Agency standards, requirements and
criteria.
“IRS” means the United States Internal Revenue Service.
“KBRA”:  Kroll Bond Rating Agency, Inc.
“Lease” means a bona fide written lease, sublease, letting, license, concession
or other agreement pursuant to which any Person is granted a possessory interest
in, or right to use or occupy all or any portion of any space in any Property by
or on behalf of Borrower (or, with respect to any Vacant Properties on the
Closing Date, prior to such Closing Date, by or on behalf of any Affiliate of
Borrower), and (a) every modification, amendment or other agreement relating to
such lease, sublease or other agreement entered into in connection with such
lease, sublease or other agreement, and (b) every guarantee of the performance
and observance of the covenants, conditions and agreements to be performed and
observed by the Tenant.
“Legal Requirements” means all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting the Loan, any
Secondary Market Transaction with respect to the Loan, Borrower or a Property or
any part thereof or the construction, use, alteration or operation thereof, or
any part thereof, whether now or hereafter enacted and in force, including,
without limitation, the Securities Act, the Exchange Act, Regulation AB, the
rules and regulations promulgated pursuant to the Dodd-Frank Wall Street Reform
and Consumer Protection Act, zoning and land use laws, the Americans with
Disabilities Act of 1990, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to
Borrower, at any time in force affecting a Property or any part thereof,
including any which may (i) require repairs, modifications or alterations in or
to a Property or any part thereof, or (ii) in any way limit the use and
enjoyment thereof.

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“LIBOR” means, with respect to each Interest Period and each Interest
Determination Date, the rate per annum (rounded upwards, if necessary, to the
nearest 1/1,000 of 1%) calculated by Lender as set forth below:
(a) The rate for deposits in U.S. Dollars for a one-month period that appears on
Reuters Screen LIBOR01 Page (or its equivalent) as of 11:00 a.m., London time,
on such Interest Determination Date.
(b) If such rate does not appear on Reuters Screen LIBOR01 Page (or its
equivalent) as of 11:00 a.m., London time, on the applicable Interest
Determination Date, Lender shall request the principal London office of any four
major reference banks in the London interbank market selected by Lender to
provide such reference bank’s offered quotation to prime banks in the London
interbank market for deposits in U.S. Dollars for a one month period as of 11:00
a.m., London time, on such Interest Determination Date in a principal amount of
not less than $1,000,000 that is representative for a single transaction in the
relevant market at the relevant time. If at least two such offered quotations
are so provided, LIBOR shall be the arithmetic mean of such quotations. If fewer
than two such quotations are so provided, Lender shall request any three major
banks in New York City reasonably selected by Lender to provide such bank’s
rates for loans in U.S. Dollars to leading European banks for a one-month period
as of 11:00 a.m., New York City time, on such Interest Determination Date in a
principal amount not less than $1,000,000 that is representative for a single
transaction in the relevant market at the relevant time, and if at least two
such rates are so provided, LIBOR shall be the arithmetic mean of such rates.
“LIBOR Loan” means the Loan at such time as interest thereon accrues at a rate
of interest based upon LIBOR.
“Lien” means any mortgage, deed of trust, lien (statutory or otherwise), pledge,
hypothecation, easement, restrictive covenant, preference, assignment, security
interest, or any other encumbrance, charge or transfer of, or any agreement to
enter into or create any of the foregoing, on or affecting all or any portion of
any Collateral or any interest therein, or any direct or indirect interest in
Borrower or any Loan Party, including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, the filing of any financing statement, and
mechanic’s, materialmen’s and other similar liens and encumbrances.
“Loan” means the loan in the original principal amount of Three Hundred and
Forty-Two Million Two Hundred and Forty-One Thousand and No/100 Dollars
($342,241,000.00) made by Lender to Borrower pursuant to this Agreement.
“Loan Documents” means, collectively, this Agreement, the Note, the Management
Agreement, the Sponsor Guaranty, the Equity Owner Guaranty, the Environmental
Indemnity, the Interest Rate Cap Agreement, each Collateral Document, any
Borrower TRS Guaranty and all other agreements, instruments and documents
delivered pursuant thereto or in connection therewith, as the same may be (and
each of the foregoing defined terms shall refer to such documents as they may
be) amended, restated, replaced, supplemented or otherwise modified from time to
time.

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“Loan Party” means Borrower, each Borrower TRS (if any) and Guarantor.
“Lockbox Agreement” means (i) the Lockbox Service Terms and Virtual Remit
Lockbox Service Terms relating to the Rent Deposit Account as of the Closing
Date or (ii) such other agreement or agreements providing for lockbox collection
and remittance of Rents and other Collections between Borrower and the Rent
Deposit Bank as may be approved by Lender in writing.
“Low Debt Yield Period” shall commence if, as of any Calculation Date, the Debt
Yield is less than eighty-five percent (85%) of the Closing Date Debt Yield (a
“Low Debt Yield Trigger”), and shall end (i) upon the Properties achieving a
Debt Yield of at least the Low Debt Yield Trigger for two consecutive
Calculation Dates or (ii) immediately (without waiting for two consecutive
Calculation Dates) upon Borrower prepaying the principal amount of the Loan in
an amount sufficient to cause the Debt Yield to be equal to or in excess of the
Low Debt Yield Trigger (a “Debt Yield Cure Prepayment”).
“Major Contract” shall mean (i) any management agreement relating to the
Properties or the Loan Parties, (ii) any agreement between any Loan Party and
any Affiliate of any Relevant Party and (iii) any brokerage, leasing, cleaning,
maintenance, service or other contract or agreement of any kind (other than
Leases) relating to the Properties, in each case involving payment or expense of
more than Two Million Dollars ($2,000,000) during any twelve (12) month period,
unless cancelable on thirty (30) days or less notice without requiring payment
of termination fees or payments of any kind.
“Management Agreement” means the Existing Management Agreement or a Replacement
Management Agreement pursuant to which a Qualified Manager is managing one or
more of the Properties in accordance with the terms and provisions of this
Agreement.
“Management Fee Cap” means, with respect to the calendar month ending
immediately prior to each Monthly Payment Date during the Term, six percent
(6.0%) of gross Rents collected with respect to the Properties for such calendar
month to the extent such Rents relate to such calendar month, regardless of when
actually collected.
“Manager” means Existing Manager or, if the context requires, a Qualified
Manager who is managing one or more of the Properties in accordance with the
terms and provisions of this Agreement or pursuant to a Replacement Management
Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the property,
business, operations or financial condition of any Loan Party, (b) the use,
operation or value of the Properties, taken as a whole, (c) the ability of
Borrower to repay the principal and interest of the Loan when due or to satisfy
any of Borrower’s other obligations under the Loan Documents, or (d) the
enforceability or validity of any Loan Document, the perfection or priority of
any Lien created under any Loan Document or the rights, interests and remedies
of Lender under any Loan Document.
“Maturity Date” means the Stated Maturity Date, provided that (a) in the event
of the exercise by Borrower of the First Extension Option pursuant to Section
2.7, the Maturity Date shall be the First Extended Maturity Date, (b) in the
event of the exercise by Borrower of the Second Extension Option pursuant to
Section 2.7, the Maturity Date shall be the Second

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Extended Maturity Date, and (c) in the event of the exercise by Borrower of the
Third Extension Option pursuant to Section 2.7, the Maturity Date shall be the
Third Extended Maturity Date, or such earlier date on which the final payment of
principal of the Note becomes due and payable as herein or therein provided,
whether at the Stated Maturity Date, by declaration of acceleration, or
otherwise.
“Maximum Legal Rate” means the maximum nonusurious interest rate, if any, that
at any time or from time to time may be contracted for, taken, reserved, charged
or received on the indebtedness evidenced by the Note and as provided for herein
or the other Loan Documents, under the laws of such Governmental Authority whose
laws are held by any court of competent jurisdiction to govern the interest rate
provisions of the Loan.
“Monthly Debt Service Payment Amount” means, for each Monthly Payment Date, an
amount equal to the amount of interest which is then due on all the Components
of the Loan in the aggregate for the Interest Period during which such Monthly
Payment Date occurs.
“Monthly Payment Date” means the ninth (9th) day of every calendar month
occurring during the Term. The first Monthly Payment Date shall be October 9,
2014.
“Moody’s” means Moody’s Investors Service, Inc.
“Mortgage” means a Mortgage or Deed of Trust or Deed to Secure Debt, as
applicable, for each Property or for multiple Properties located within the same
county or parish, dated as of the Closing Date (or, in connection with a
Property which is a Substitute Property, dated as of the date of the
substitution), executed and delivered by Borrower, constituting a Lien on the
Improvements and the Property or Properties, as applicable, as Collateral for
the Loan, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
“Mortgage Documents” means the Mortgages, the Assignments of Leases and Rents
and the Fixture Filings.
“Multiemployer Plan” means a plan within the meaning of Section 414(f) of the
Code or Section 3(37) of ERISA to which contributions are required to be made by
any Loan Party or any of its ERISA Affiliates or to which any such entity has
any liability.
“Net Assets” shall mean, with respect to any Person, the difference between (i)
the fair market value of such Person’s assets and (ii) such Person’s liabilities
determined in accordance with GAAP.
“Net Proceeds” means (i) the net amount of all insurance proceeds received by
Lender pursuant to Section 5.1.1 (a)(i) and (iii) as a result of damage to or
destruction of a Property, after deduction of its reasonable out-of-pocket costs
and expenses (including, but not limited to, reasonable counsel fees), if any,
in collecting same (“Insurance Proceeds”), or (ii) the net amount of an Award,
after deduction of Lender’s reasonable out-of-pocket costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
same (“Condemnation Proceeds”), whichever the case may be.

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“Net Transfer Proceeds” shall mean, with respect to the Transfer of any
Property, the gross sales price for such Property (including any earnest money,
down payment or similar deposit included in the total sales price paid by the
purchaser), less Transfer Expenses.
“Non-Property Taxes” means all Taxes other than Property Taxes and Other
Charges.
“NRSRO” means any credit rating agency that has elected to be treated as a
nationally recognized statistical rating organization for purposes of Section
15E of the Exchange Act, without regard to whether or not such credit rating
agency has been engaged by Lender or its designees in connection with, or in
anticipation of, a Securitization.
“Obligations” means, collectively, Borrower’s obligations for the payment of the
Debt and the performance by the Loan Parties of the Other Obligations.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of
Treasury.
“Officer’s Certificate” means a certificate delivered to Lender by Borrower
which is signed by an authorized officer of Borrower or another Loan Party.
“Operating Expenses” means, for any period, without duplication, all expenses
actually paid or payable by Borrower (or, for the period prior to the Closing
Date, by Borrower’s Affiliates that owned the Properties) during such period in
connection with the administration, operation, management, maintenance, repair
and use of the Properties, determined on an accrual basis, and, except to the
extent otherwise provided in this definition, in accordance with GAAP. Operating
Expenses specifically shall include, without duplication, (i) all operating
expenses incurred in such period based on quarterly financial statements
delivered to Lender in accordance with Section 4.3.1(a), (ii) cost of utilities,
inventories, and fixed asset supplies consumed in the operation of the
Properties, (iii) management fees in an amount equal to the greater of (A)
actual management fees or (B) the Management Fee Cap, (iv) administrative,
payroll, security and general expenses for the Properties, (v) costs and fees of
Independent professionals (including, without limitation, legal, accounting,
consultants and other professional expenses), technical consultants, operational
experts (including quality assurance inspectors) or other third parties retained
to perform services required or permitted hereunder, (vi) computer processing
charges, (vii) operational equipment and other lease payments to the extent
constituting operating expenses under GAAP, (viii) Property Taxes and Other
Charges (other than income taxes), (ix) insurance premiums, (x) Property
maintenance expenses and (xi) all reserves required by Lender hereunder (without
duplication). Notwithstanding the foregoing, Operating Expenses shall not
include (A) depreciation or amortization, (B) income taxes or other charges in
the nature of income taxes, (C) any expenses (including legal, accounting and
other professional fees, expenses and disbursements) incurred in connection with
the making of the Loan or the sale, exchange, transfer, financing or refinancing
of all or any portion of any Property or in connection with the recovery of
Insurance Proceeds or Awards which are applied to prepay the Note, (D) Capital
Expenditures, (E) Debt Service, (F) expenses incurred in connection with the
acquisition, initial renovation and initial leasing of Properties and other
activities undertaken prior to such initial lease that do not constitute
recurring operating expenses to be paid by Borrower, including eviction of
existing tenants, incentive payments to tenants and other similar expenses, (G)
any item of expense which would otherwise be considered within Operating
Expenses pursuant to the provisions above but is paid directly by any Tenant
under a Lease, (H) any service that is required to be provided by the Manager
pursuant to the Management

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Agreement without compensation or reimbursement (other than the management fee
set forth in the Management Agreement), (I) any expenses that relate to a
Property from and after the release of such Property in accordance with Section
2.5 hereof, (J) bad debt expense with respect to Rents, (K) the value of any
free rent or other concessions provided with respect to the Properties, (L) any
loss that is covered by the Policies including any portion of a loss that is
subject to a deductible under the Policies or (M) corporate overhead expenses
incurred by Borrower’s Affiliates.
“Other Charges” means all homeowners’ or condominium owners’ association dues,
fees and assessments, impositions other than Property Taxes, and any other
charges levied or assessed or imposed against a Property or any part thereof
other than Property Taxes.
“Other Connection Taxes” means, with respect to any Lender, Taxes imposed as a
result of a present or former connection between such Lender and the
jurisdiction imposing such Tax (other than connections arising from such Lender
having executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to or enforced any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).
“Other Obligations” means (a) the performance of all obligations of the Loan
Parties contained herein; (b) the performance of each obligation of the Relevant
Parties contained in any other Loan Document; and (c) the performance of each
obligation of the Relevant Parties contained in any renewal, extension,
amendment, restatement, modification, consolidation, change of, or substitution
or replacement for, all or any part of this Agreement, the Note or any other
Loan Document.
“Other Receipts” for any period of determination, any actual net cash flow
receipts received by Borrower (or, for the period prior to the Closing Date, by
Borrower’s Affiliates that owned the Properties) from sources other than Rents
(and excluding security deposits) with respect to the Properties, to the extent
they are recurring in nature and properly included as operating income for such
period in accordance with GAAP.
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.
“Outstanding Principal Balance” means, as of any date, the outstanding principal
balance of the Components of the Loan.
“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT
ACT) of 2001, as the same may be amended from time to time, and corresponding
provisions of future laws.
“Permitted Investments” means:
(a)    obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or instrumentality
thereof provided such

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obligations are backed by the full faith and credit of the United States
including, without limitation, obligations of: the U.S. Treasury (all direct or
fully guaranteed obligations), the Farmers Home Administration (certificates of
beneficial ownership), the General Services Administration (participation
certificates), the U.S. Maritime Administration (guaranteed Title XI financing),
the Small Business Administration (guaranteed participation certificates and
guaranteed pool certificates), the U.S. Department of Housing and Urban
Development (local authority bonds) and the Washington Metropolitan Area Transit
Authority (guaranteed transit bonds); provided, however, that the investments
described in this clause must (i) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (ii) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (iii) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;
(b)    federal funds, unsecured certificates of deposit, time deposits, bankers’
acceptances and repurchase agreements with maturities of not more than 365 days
of any bank, (A) in the case of such investments with maturities of 30 days or
less, the short term obligations of which are rated in the highest short term
rating category by each Rating Agency (or, if not rated by all Rating Agencies,
rated by Moody’s in the highest short term rating category) and the long term
obligations of which are rated at least “A2” by Moody’s (or such lower rating
for which Rating Agency Confirmation is received with respect to Moody’s), (B)
in the case of such investments with maturities of three months or less, but
more than 30 days, the short term obligations of which are rated in the highest
short term rating category by each Rating Agency (or, if not rated by all Rating
Agencies, rated by Moody’s in the highest short term rating category) and the
long term obligations of which are rated at least “A1” by Moody’s (or such lower
rating for which Rating Agency Confirmation is received with respect to
Moody’s), (C) in the case of such investments with maturities of six months or
less, but more than three months, the short term obligations of which are rated
in the highest short term rating category by each Rating Agency (or, if not
rated by all Rating Agencies, rated by Moody’s in the highest short term rating
category) and the long term obligations of which are rated at least “Aa3” by
Moody’s (or such lower rating for which Rating Agency Confirmation is received
with respect to Moody’s), and (D) in the case of such investments with
maturities of more than six months, the short term obligations of which are
rated in the highest short term rating category by each Rating Agency (or, if
not rated by all Rating Agencies, rated by Moody’s in the highest short term
rating category) and the long term obligations of which are rated “Aaa” by
Moody’s (or such lower rating for which Rating Agency Confirmation is received
with respect to Moody’s; provided, however, that the investments described in
this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;
(c)    fully Federal Deposit Insurance Corporation-insured demand and time
deposits in, or certificates of deposit of, or bankers’ acceptances issued by,
any bank or

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trust company, savings and loan association or savings bank, (A) in the case of
such investments with maturities of 30 days or less, the short term obligations
of which are rated in the highest short term rating category by each Rating
Agency (or, if not rated by all Rating Agencies, rated by Moody’s in the highest
short term rating category) and the long term obligations of which are rated at
least “A2” by Moody’s (or such lower rating for which Rating Agency Confirmation
is received with respect to Moody’s), (B) in the case of such investments with
maturities of three months or less, but more than 30 days, the short term
obligations of which are rated in the highest short term rating category by each
Rating Agency (or, if not rated by all Rating Agencies, rated by Moody’s in the
highest short term rating category) and the long term obligations of which are
rated at least “A1” by Moody’s (or such lower rating for which Rating Agency
Confirmation is received with respect to Moody’s), (C) in the case of such
investments with maturities of six months or less, but more than three months,
the short term obligations of which are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by Moody’s in the highest short term rating category) and the long term
obligations of which are rated at least “Aa3” by Moody’s (or such lower rating
for which Rating Agency Confirmation is received with respect to Moody’s), and
(D) in the case of such investments with maturities of more than six months, the
short term obligations of which are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by Moody’s in the highest short term rating category) and the long term
obligations of which are rated “Aaa” by Moody’s (or such lower rating for which
Rating Agency Confirmation is received with respect to Moody’s; provided,
however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (iii) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (iv) such
investments must not be subject to liquidation prior to their maturity;
(d)    debt obligations with maturities of not more than 365 days and at all
times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by Moody’s in its highest long-term unsecured rating category; provided,
however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (iii) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (iv) such
investments must not be subject to liquidation prior to their maturity;
(e)    commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than 365 days(A) in the case of such investments with maturities of
30 days or less, the short term obligations of which are rated in the highest
short term rating category by each Rating Agency (or, if not rated by all Rating
Agencies, rated by Moody’s in the highest short term rating category) and the
long term obligations of which are rated at least “A2” by Moody’s (or such lower
rating for which Rating Agency Confirmation is received with respect to
Moody’s), (B) in the case of such investments with maturities of three

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months or less, but more than 30 days, the short term obligations of which are
rated in the highest short term rating category by each Rating Agency (or, if
not rated by all Rating Agencies, rated Moody’s in the highest short term rating
category) and the long term obligations of which are rated at least “A1” by
Moody’s (or such lower rating for which Rating Agency Confirmation is received
with respect to Moody’s), (C) in the case of such investments with maturities of
six months or less, but more than three months, the short term obligations of
which are rated in the highest short term rating category by each Rating Agency
(or, if not rated by all Rating Agencies, rated by Moody’s in the highest short
term rating category ) and the long term obligations of which are rated at least
“Aa3” by Moody’s (or such lower rating for which Rating Agency Confirmation is
received with respect to Moody’s), and (D) in the case of such investments with
maturities of more than six months, the short term obligations of which are
rated in the highest short term rating category by each Rating Agency (or, if
not rated by all Rating Agencies, rated by Moody’s in the highest short term
rating category) and the long term obligations of which are rated “Aaa” by
Moody’s (or such lower rating for which Rating Agency Confirmation is received
with respect to Moody’s ; provided, however, that the investments described in
this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (iv) such investments must not be subject to liquidation prior to
their maturity;
(f)    units of taxable money market funds, which funds are regulated investment
companies, seek to maintain a constant net asset value per share and invested
solely in obligations backed by the full faith and credit of the United States,
which funds have the highest rating available from each Rating Agency (or, if
not rated by all Rating Agencies, rated by at least one Rating Agency and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds; and
(g)    any other security, obligation or investment which has been specifically
approved as a Permitted Investment in writing (i) by Lender and (ii) each Rating
Agency, as confirmed by satisfaction of the Rating Agency Condition with respect
to each Rating Agency;
provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment and provided, further, that each investment
described hereunder must have (x) a predetermined fixed amount of principal due
at maturity (that cannot vary or change) and (y) an original maturity of not
more than 365 days and a remaining maturity of not more than thirty (30) days.
“Permitted Liens” means, collectively, (i) the Liens and security interests
created by the Loan Documents, (ii) all encumbrances and other matters disclosed
in the Title Insurance Policies for the Properties and, with respect to any
Substitute Property, as Lender has approved

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in writing in Lender’s reasonable discretion, (iii) Liens, if any, for
Non-Property Taxes or Property Taxes imposed by any Governmental Authority not
yet due or delinquent, (iv) Liens arising after the Closing Date for
Non-Property Taxes, Property Taxes or Other Charges being contested in
accordance with Section 4.1.3 or Section 4.4.8, (v) any workers’, mechanics’ or
other similar Liens on a Property that are bonded or discharged within sixty
(60) days after Borrower first receives written notice of such Lien, (vi) all
easements, rights-of-way, restrictions and other similar non-monetary
encumbrances recorded against and affecting any Property and that would not
reasonably be expected to and do not have an Individual Material Adverse Effect
on the Property, (vii) such other title and survey exceptions as Lender has
approved or may approve in writing in Lender’s reasonable discretion and (viii)
rights of Tenants as Tenants only under Leases permitted hereunder.
“Person” means any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any other
entity, any Governmental Authority and any fiduciary acting in such capacity on
behalf of any of the foregoing.
“Plan” means an “employee benefit plan” as defined in Section 3(3) of ERISA that
is established, maintained or contributed to by any Loan Party or any of its
ERISA Affiliates (or as to which such entity has any liability) and that is
covered by Title IV of ERISA, other than a Multiemployer Plan.
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
“Plan Termination Event” means (i) any event described in Section 4043 of ERISA
with respect to any Plan (excluding events for which the 30-day notice has been
waived); (ii) the withdrawal of any Loan Party or any of its ERISA Affiliates
from a Plan during a plan year in which such Loan Party or such ERISA Affiliate
was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii)
the imposition of an obligation on any Loan Party or any of its ERISA Affiliates
under Section 4041 of ERISA to provide affected parties written notice of intent
to terminate a Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution of proceedings by the PBGC to terminate a Plan; (v)
any event or condition which could reasonably constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (vi) the partial or complete withdrawal of any Loan
Party or any of its ERISA Affiliates from a Multiemployer Plan or Foreign Plan
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
“Prepayment Notice” means a prior written notice to Lender specifying the
proposed Business Day on which a prepayment of the Debt is to be made pursuant
to Section 2.4.2, which date shall be no earlier than ten (10) days after the
date of such Prepayment Notice and no later than ninety (90) days after the date
of such Prepayment Notice. A Prepayment Notice may be revoked in writing by
Borrower, or may be modified in writing by Borrower to a new specified Business
Day, in each case, on or prior to the proposed prepayment date set forth in such
Prepayment Notice; provided that such new Business Day shall be no earlier than
such proposed prepayment date. If revoked (as opposed to modified), any new
Prepayment Notice shall comply with the timeframes set forth above. Borrower
shall pay to Lender all reasonable out-of-pocket costs and expenses (if any)
incurred by Lender in connection with Borrower’s permitted revocation or
modification of any Prepayment Notice.

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“Prime Rate” means the rate of interest published in The Wall Street Journal
from time to time as the “Prime Rate”. If more than one “Prime Rate” is
published in The Wall Street Journal for a day, the average of such “Prime
Rates” will be used, and such average will be rounded up to the nearest 1/100th
of one percent (0.01%). If The Wall Street Journal ceases to publish the “Prime
Rate,” Lender will select an equivalent publication that publishes such “Prime
Rate,” and if such “Prime Rates” are no longer generally published or are
limited, regulated or administered by a governmental or quasi-governmental body,
then Lender will select a comparable interest rate index.
“Prime Rate Loan” means the Loan at such time as interest thereon accrues at a
rate of interest based upon the Prime Rate.
“Properties Schedule” means the data tape of Properties attached hereto as
Schedule I, as updated on a monthly basis pursuant to Section 4.3.6.
“Property” means, individually, and “Properties” means, collectively, (i) the
residential real properties described on the Properties Schedule as of the
Closing Date and encumbered by the Mortgages and (ii) any residential real
properties that are Substitute Properties; provided that if the Allocated Loan
Amount for any Property has been reduced to zero and all interest and other
Obligations related thereto that are required to be paid on or prior to the date
when the Allocated Loan Amount for such Property is required to be repaid have
been repaid in full, then such residential real property shall no longer be a
Property hereunder. The Properties include the Improvements now or hereafter
erected or installed thereon and other personal property owned by Borrower
located thereon, together with all rights pertaining to such real property,
Improvements and personal property. Any Property transferred to a Borrower TRS
shall continue to constitute a “Property” for purposes of this Agreement and the
Loan Documents.
“Property Account Bank” means the Eligible Institution at which a Property
Account is maintained.
“Property Accounts” means the Rent Deposit Accounts and Borrower’s Operating
Account.
“Property Account Control Agreement” means the Deposit Account Control Agreement
dated the date hereof among Borrower, Lender, Equity Owner and a Property
Account Bank, providing for springing control by Lender, substantially in the
form set forth as Exhibit B attached hereto or such other form as may be
reasonably acceptable to Lender.
“Property Covenants” means those covenants set forth in Section 4.4 and the
covenants contained in Section 2 of the Environmental Indemnity.
“Property File” means with respect to each Property:
(a)    The Purchase Agreement, auction receipt or other applicable purchase
documentation reasonably satisfactory to Lender;
(b)    The documentation described in Sections 3.2.3, 3.2.4, 3.2.5, 4.4.3,
4.4.4, and 4.4.5;

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(c)    Evidence reasonably satisfactory to Lender of the insurance policies
required by Section 5.1.1 with respect to such Property;
(d)    The executed Lease and any renewals, amendments or modification of the
Lease or any new Lease, each of which shall be delivered to the Property File
within ten (10) days after execution thereof (provided, that if such Property is
a Vacant Property, such Property will be disclosed in the Properties Schedule
required to be delivered by Section 4.3.6 as a Vacant Property until an Eligible
Lease is executed with respect to such Property); and
(e)    The Broker Price Opinion for such Property.
“Property Representations” means, collectively, (i) those representations and
warranties set forth in Section 3.2 and Section 1 of the Environmental Indemnity
and (ii) those representations and warranties of the Manager defined as
“Property Representations” in the Management Agreement as of the date hereof
(which shall be deemed made by each Manager on each day of this Agreement
regardless of whether such representations continue to be made under the
Management Agreement or a Replacement Management Agreement).
“Property Taxes” means any real estate and personal property taxes, assessments,
water charges, sewer rents, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto now or hereafter levied
or assessed or imposed by a Governmental Authority against any Property, any
Collateral, any part of either of the foregoing or Borrower.
“Public Vehicle” shall mean a Person whose securities are listed and traded on a
national securities exchange and shall include a majority owned subsidiary of
any such Person or any operating partnership through which such Person conducts
all or substantially all of its business.
“Purchase Agreement” means the purchase agreement with respect to the purchase
of a Property entered into by Borrower or its Affiliate and a third party seller
of a Property who is not an Affiliate of any Loan Party.
“Qualified Manager” means (a) Existing Manager, (b) any Person that is under
common Control with Existing Manager or Sponsor and/or (c) a reputable Person
that has at least two (2) years’ experience in the management of at least two
hundred and fifty (250) residential rental properties in each metropolitan
statistical area in which the applicable Properties to be managed by such Person
are located and is not the subject of a bankruptcy or similar proceeding;
provided, that in the case of the foregoing subclause (c), Borrower shall have
obtained a Rating Agency Confirmation in respect of the management of the
Properties by such Person; and provided, further, that in the case of the
foregoing subclause (b) and subclause (c), if such Person is an Affiliate of
Borrower, Borrower shall have obtained an additional Insolvency Opinion if such
an opinion is requested by Lender.
“Qualified Title Insurance Company” means each title insurance company listed on
Schedule VI and any other title insurance company unless such title insurance
company is disqualified by Lender in its sole discretion by notice to Borrower.
“Qualified Transferee” means (a) Sponsor or (b) any Person that (i) has a net
worth of not less than $150,000,000 (exclusive of such Person’s direct or
indirect interest in the Properties

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and Borrower), (ii) has not been the subject of a voluntary or involuntary (to
the extent the same has not been discharged) bankruptcy proceeding or any
governmental or regulatory investigation which resulted in a final,
nonappealable conviction for criminal activity involving moral turpitude, (iii)
is (or is under common Control with a Person that is) regularly engaged in the
management, ownership or operation of one to four unit residential rental
properties and (iv) with respect to the applicable Transfer to such Person,
Borrower shall have obtained a Rating Agency Confirmation.
“Rating Agencies” means the nationally-recognized statistical rating
organization (e.g. S&P, Moody’s, Fitch, DBRS, Inc., Morningstar, Inc., KBRA or
any successor thereto) that have been or will be engaged by Lender or its
designees in connection with, or in anticipation of, a Securitization.
“Rating Agency Confirmation” means a written affirmation from each of the Rating
Agencies that the credit rating of the Securities by such Rating Agency
immediately prior to the occurrence of the event with respect to which such
Rating Agency Confirmation is sought will not be qualified, downgraded or
withdrawn as a result of the occurrence of such event, which affirmation may be
granted or withheld in such Rating Agency’s sole and absolute discretion. In the
event that, at any given time, no Securities are then outstanding, then the term
Rating Agency Confirmation shall be deemed instead to require the written
approval of Lender based on its reasonable, good faith determination of whether
the Rating Agencies would issue a Rating Agency Confirmation if any such
Securities were outstanding.
“Records” means all leases, agreements, instruments, documents, books, records
and other information (including, without limitation, tapes, disks, punch cards
and related property and rights) maintained with respect to Properties or the
Loan Parties, other than the Property Files.
“Regulation AB” means Regulation AB under the Securities Act and the Exchange
Act, as such Regulation may be amended from time to time.
“Regulatory Change” shall mean any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to
Lender, or any Person in Control of Lender or to a class of banks or companies
Controlling banks of or under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or Governmental Authority
or monetary authority charged with the interpretation or administration thereof.
“Related Loan” means a loan to an Affiliate of Borrower or any Guarantor or
secured by a Related Property, that is included in a Securitization with the
Loan, and any other loan that is cross-collateralized with the Loan.
“Related Property” means a parcel of real property, together with improvements
thereon and personal property related thereto, that is “related” within the
meaning of the definition of Significant Obligor, to a Property.
“Release Amount” means, for a Property, the following applicable amount
(hereinafter, the “Principal Portion” of the Release Amount) together with any
other amounts specified in Section 2.4.5:

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(a)    in connection with the Transfer of a Property pursuant to Section 2.5 or
any failure of a Property to qualify as an Eligible Property due to the
occurrence of a Voluntary Action (such Properties, “Release Premium
Properties”), (i) 105% of the Allocated Loan Amount for such Property if the sum
of the initial Allocated Loan Amounts of all Release Premium Properties,
including such Property, is less than $34,224,100, (i) 110% of the Allocated
Loan Amount for such Property if the sum of the initial Allocated Loan Amounts
of all Release Premium Properties, including such Property, is equal to or
greater than $34,224,100 but less than $51,336,150, (ii) 115% of the Allocated
Loan Amount for such Property if the sum of the initial Allocated Loan Amounts
of all Release Premium Properties, including such Property, is equal to or
greater than $51,336,150 but less than $68,448,200, and (iii) 120% of the
Allocated Loan Amount for such Property if the sum of the initial Allocated Loan
Amounts of all Release Premium Properties, including such Property, is equal to
or greater than $68,448,200; and
(b)    in connection with any failure of a Property to qualify as an Eligible
Property other than due to the occurrence of a Voluntary Action that is not
cured within the applicable Cure Period, an amount equal to 100% of the
Allocated Loan Amount for such Property.
“Relevant Party” means each Loan Party and Sponsor (and, collectively “Relevant
Parties”).
“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the
meaning of Section 860D of the Code.
“Renovation Standards” means the maintenance, repairs, improvements and
installations that are necessary for a Property to conform to applicable
material Legal Requirements and not deviate materially from local rental market
standards for the area in which such Property is located.
“Rents” means, with respect to each Property, all rents and rent equivalents and
any fees, payments or other compensation from any Tenant (except for security
deposits).
“Repayment Date” means the date of a prepayment of the Loan pursuant to the
provisions of Section 2.4 hereof.
“Replacement Interest Rate Cap Agreement” means an interest rate cap agreement
from an Approved Counterparty with terms that are the same in all material
respects as the terms of the Interest Rate Cap Agreement except that the same
shall be effective as of (i) in connection with a replacement pursuant to
Section 2.6.3(c) following a downgrade, withdrawal or qualification of the
long-term unsecured debt rating of the Counterparty, the date required in
Section 2.6 or (ii) in connection with a replacement (or extension of the
then-existing Interest Rate Cap Agreement) in connection with an extension of
the Maturity Date pursuant to Section 2.7, the date required in Section 2.7;
provided that to the extent any such interest rate cap agreement does not meet
the foregoing requirements, a Replacement Interest Rate Cap Agreement shall be
such interest rate cap agreement approved in writing by Lender, and if the Loan
or any portion thereof is included in a Securitization, each of the Rating
Agencies with respect thereto.

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“Replacement Management Agreement” means, collectively, (a) either (i) a
management agreement with a Qualified Manager, substantially in the same form
and substance as the Existing Management Agreement, (ii) a management agreement
with a Qualified Manager, which management agreement shall be reasonably
acceptable to Lender in form and substance, provided, that with respect to this
clause (ii), (x) if such management agreement provides for the payment of
management fees in excess of the Management Fee Cap, then Borrower shall have
obtained a Rating Agency Confirmation with respect to such increase in
management fees and (y) otherwise Lender, at its option, may require that
Borrower obtain a Rating Agency Confirmation with respect to such management
agreement or (iii) a management agreement with a Manager approved by Lender in
accordance with Section 4.1.13(b)(y) and satisfying the conditions set forth in
clauses (x) and (y) above, and (b) an assignment of management agreement and
subordination of management fees substantially in the form of the Assignment of
Management Agreement dated as of the date hereof (or such other form and
substance reasonably acceptable to Lender and the Qualified Manager).
“Request for Release” means a request for release of a Property in connection
with any Transfer of a Property, substantially in the form attached hereto as
Exhibit E.
“Reserve Funds” means, collectively, all funds deposited by Borrower with Lender
or Cash Management Account Bank pursuant to Article 6, including, but not
limited to, the Capital Expenditure Funds, the Insurance Funds, the Tax Funds,
the Casualty and Condemnation Funds, the Cash Collateral Funds, the Special
Insurance Reserve Funds and the Eligibility Funds.
“Reserve Release Date” means any Business Day as requested by Borrower pursuant
to a Reserve Release Request; provided that there shall be no more than one
Reserve Release Date in any calendar month.
“Reserve Release Request” means any written request by Borrower for a release of
Reserves Funds made in accordance with Article 6.
“Responsible Officer” means, as to any Person, the chief executive officer or
president or, with respect to financial matters, the chief financial officer or
treasurer of such Person; provided, that in the event any such officer is
unavailable at any time he or she is required to take any action hereunder,
Responsible Officer means any officer authorized to act on such officer’s behalf
as demonstrated by a certified resolution.
“Restoration” means the repair and restoration of a Property after a Casualty as
nearly as possible to the condition such Property was in immediately prior to
such Casualty, with such material alterations as may be approved by Lender, such
approval not to be unreasonably withheld, delayed or conditioned.
“Restricted Junior Payment” means, with respect to any Person, (i) any dividend
or other distribution of any nature (cash, securities, assets, Indebtedness or
otherwise) and any payment, by virtue of redemption, retirement or otherwise, on
any class of Equity Interests or subordinate Indebtedness issued by such Person,
whether such Equity Interests are now or may hereafter be authorized or
outstanding and any distribution in respect of any of the foregoing, whether
directly or indirectly, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Equity Interests or subordinate Indebtedness of such Person now or hereafter
outstanding, or (iii) any payment of management

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or similar fees by such Person (other than payment of management fees under any
Management Agreement to the extent expressly permitted by this Agreement).
“Restricted Pledge Party” shall mean, collectively, Borrower, each Borrower TRS
(if any), Guarantor and any other direct equity holder in Borrower, each
Borrower TRS (if any) or Guarantor up to, but not including, the first direct
equity holder that has substantial assets other than the Properties and the
other Collateral.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.
“Significant Obligor” shall have the meaning set forth in Item 1101(k) of
Regulation AB under the Securities Act.
“Solvent” means, with respect to any Person or any consolidated group, on any
date of determination, that on such date (i) the fair saleable value of such
Person’s or consolidated group’s assets exceeds its total liabilities,
including, without limitation, subordinated, unliquidated, disputed and
contingent liabilities, (ii) the fair saleable value of such Person’s or
consolidated group’s assets exceeds its probable liabilities, as applicable,
including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured, (iii) such Person’s or consolidated group’s
assets do not constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted and (iv) such Person or consolidated
group does not intend to, and does not believe that it will, incur debt and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debt and liabilities as they mature (taking into account the
timing and amounts of cash to be received by it and the amounts to be payable on
or in respect of its obligations).
“Specified Documents” means, with respect to any Property File, each document
listed in the definition of “Property File”.
“Sponsor” means American Residential Properties, Inc., a Maryland corporation.
“Sponsor Financial Covenant” means the requirement that Sponsor or any Qualified
Transferee that executes and delivers a replacement guaranty pursuant to Section
7.1(h) maintain Net Assets of not less than $150,000,000 (exclusive of Sponsor’s
or such Qualified Transferee’s direct or indirect interest in Borrower).
“Sponsor Guaranty” means that certain Sponsor Guaranty, dated as of the date
hereof, executed by Sponsor in favor of Lender.
“Spread Maintenance Date” means the Monthly Payment Date occurring in September
2016.
“Spread Maintenance Premium” means, with respect to any prepayment of principal
(or acceleration of the Loan) prior to the Spread Maintenance Date (other than
payments made pursuant to Section 2.4.3(a) (except where such prepayment arises
as a result of a Voluntary Action) or Section 2.4.3(c)), and with respect to
each Component, an amount equal to the product of the following: (i) the amount
of such prepayment (or the amount of principal so accelerated) allocable to such
Component, multiplied by (ii)) the Component Spread applicable

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to such Component, multiplied by (iii) a fraction (expressed as a
percentage) having a numerator equal to the number of months difference between
the Spread Maintenance Date and the date such prepayment occurs (or the next
succeeding Monthly Payment Date through which interest has been paid by
Borrower) and a denominator equal to twelve (12). The total Spread Maintenance
Premium shall be the sum of the Spread Maintenance Premium for each of the
Components. All Spread Maintenance Premium payments hereunder shall be deemed to
be earned by Lender upon the funding of the Loan.
“Stated Maturity Date” means September 9, 2016, as the same may be extended
pursuant to Section 2.7.
“Strike Price” shall mean (a) as to any Interest Rate Cap Agreement during the
initial term of the Loan, 3.12% per annum, and (b) as to any Replacement
Interest Rate Cap Agreement obtained in connection with the exercise of any
Extension Option, a rate per annum equal to the greater of (i) 3.12% per annum
and (ii) the interest rate at which the Debt Service Coverage Ratio as of the
Calculation Date immediately preceding the applicable Extension Date is not less
than 1.25:1.00.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
“Tenant” means any Person obligated by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) under any Lease now
or hereafter affecting all or any part of a Property.
“Term” means the entire term of this Agreement, which shall expire upon
repayment in full of the Debt.
“Title Insurance Policy” means, with respect to each Property or multiple
Properties encumbered by the same Mortgage, an ALTA mortgagee title insurance
policy issued by a Qualified Title Insurance Company containing such
endorsements as Lender may reasonably require (to the extent available in the
state where the Property or the Properties, as applicable, are located) in a
form reasonably acceptable to Lender (or, if such Property or the Properties, as
applicable, are located in a state which does not permit the issuance of such
ALTA policy, such form as shall be permitted in such state and determined that
is reasonably acceptable to Lender) issued with respect to such Property or
Properties, as applicable, and insuring the Lien of the Mortgage Documents
encumbering such Property or Properties (subject to Permitted Liens), as
applicable, and posted to the Lender’s online data room pursuant to Section
4.1.14 with electronic or written notification to Lender of such posting.
“Title Insurance Owner’s Policy” means, with respect to each Property, an ALTA
owner title insurance policy issued by a Qualified Title Insurance Company in a
form reasonably acceptable to Lender (or, if a Property is in a state which does
not permit the issuance of such ALTA policy, such form as shall be permitted in
such state and determined that is reasonably acceptable to Lender) issued with
respect to such Property and insuring the legal title to such Property, as
applicable, posted to the Lender’s online data room pursuant to Section 4.1.14
with electronic or written notification to Lender of such posting.

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“Transfer Date” means the date upon which a Transfer of a Property is
consummated.
“Transfer Expenses” means, with respect to the Transfer of any Property, the
reasonable expenses of Borrower incurred in connection therewith not to exceed
6.0% of all gross amounts realized with respect thereto, for any of the
following: (i) third party real estate commissions, (ii) the closing costs of
the purchaser of such Property actually paid by Borrower and (iii) Borrower’s
miscellaneous closings costs, including, but not limited to title, escrow and
appraisal costs and expenses.
“Trigger Period” shall commence upon the occurrence of (i) an Event of Default
or (ii) the commencement of a Low Debt Yield Period; and shall end if, (A) with
respect to a Trigger Period continuing pursuant to clause (i), the Event of
Default commencing the Trigger Period has been cured and such cure has been
accepted by Lender (and no other Event of Default is then continuing) or (B)
with respect to a Trigger Period continuing due to clause (ii), the Low Debt
Yield Period has ended pursuant to the terms hereof.
“Trust Fund Expenses” shall mean (a) any interest payable to the Servicer, or
any special servicer, trustee, operating advisor, custodian, or certificate
administrator in connection with the Loan or the Properties pursuant to the
Servicing Agreement in respect of advances made by any of the foregoing;
provided, however, that Borrower shall only be obligated to pay any amounts
described in this clause (a) if and to the extent such interest exceeds the sum
of the Default Rate interest and late payment charges payable pursuant to
Section 2.3.4 in respect of the event giving rise to the related advances; (b)
all special servicing fees, work-out, liquidation fees and other fees payable to
any special servicer under the Servicing Agreement (i) after the Loan is
transferred to the special servicer as a result of (A) the occurrence of an
Event of Default or (B) an acknowledgement by Borrower in writing that the Loan
is likely to go into default, or (ii) in connection with any Borrower requested
or consensual work-out or modification of the Loan; (c) the regularly monthly
fee of the certificate administrator (capped at $5,283 per month) and the
trustee (capped at $417 per month) under the Servicing Agreement, (d) the fees
and expenses of Midland Loan Services as Servicer as set forth in Schedule IX or
the fees and expenses of any replacement Servicer and (e) except for the regular
monthly fees payable to the master servicer and any operating advisor, any other
cost, fee or expense of the Servicer, the trustee, the operating advisor and any
certificate administrator under the Servicing Agreement (i) after the Loan is
transferred to the special servicer as a result of (A) the occurrence of an
Event of Default or (B) an acknowledgement by Borrower in writing that the Loan
is likely to go into default, (ii) the occurrence of an Event of Default under
clauses (i), (ii) or (iii) of Section 8.1 or (iii) in connection with any
Borrower requested or consensual work out or modification of the Loan or any
other special waiver or approval requests made by Borrower or Guarantor during
the term of the Loan (in each case including, but not limited to, (1) any costs
and expenses in connection with Broker Price Opinions and, where Broker Price
Opinions are not sufficient in accordance with customary mortgage servicing
standards, appraisals of the Properties or the Equity Interests in Borrower (or
any updates to Broker Price Opinions or such appraisals) conducted by or on
behalf of the Servicer and/or special servicer, (2) property inspections
conducted by or on behalf of the Servicer and/or special servicer, (3) lien
searches conducted by or on behalf of the Servicer and/or special servicer, (4)
any reimbursements to the trustee, the Servicer, the special servicer, the
operating advisor, any certificate administrator thereunder and related Persons
of each of the foregoing, or the trust fund, pursuant to the Servicing
Agreement, (5) any indemnification to Persons entitled thereto under the
Servicing Agreement, (6) any out-of-pocket

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litigation expenses arising from an Event of Default and (7) the cost of Rating
Agency Confirmations and/or opinions of counsel, if any, required to be obtained
pursuant to the Servicing Agreement in connection with servicing or
administering the Loan or the Properties and administration of the trust fund.
“Trustee” means any trustee holding the Loan or any Component in a
Securitization.
“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in
effect in the State (with respect to fixtures), the State of New York or the
state in which any of the Cash Management Accounts are located, as the case may
be.
“Underwritten Capital Expenditures” means, as of any date of determination, for
the twelve (12) month period ending on such date, the product of (i) the number
of Properties multiplied by (ii) $500.
“Underwritten Net Cash Flow” shall mean, as of any date of determination, the
excess of: (a) for the twelve (12) month period ending on such date, the sum of
(i) the lesser of (x) GPR multiplied by 94.5%, and (y) Actual Rent Collections,
and (ii) Other Receipts; over (b) for the twelve (12) month period ending on
such date, the sum of (i) Operating Expenses, adjusted to reflect exclusion of
amounts representing non-recurring expenses, (ii) Underwritten Capital
Expenditures and (iii) Concessions. For purposes of the foregoing calculations,
for each of the first three Calculation Dates after the Closing Date, Operating
Expenses, Concessions, Actual Rent Collections and Other Receipts with respect
to the Properties for the period from and including the Closing Date to and
including each such Calculation Date shall be annualized to determine the twelve
(12) month Operating Expenses, Concessions, Actual Rent Collections and Other
Receipts with respect to the Properties.
Notwithstanding the foregoing, Underwritten Net Cash Flow shall not include
(a) any Insurance Proceeds (other than business interruption and/or rental loss
insurance proceeds and only to the extent allocable to the applicable reporting
period), (b) any proceeds resulting from the Transfer of all or any portion of
any Property, (c)  any item of income otherwise included in Underwritten Net
Cash Flow but paid directly by any Tenant to a Person other than Borrower as an
offset or deduction against Rent payable by such Tenant, provided such item of
income is for payment of an item of expense (such as payments for utilities paid
directly to a utility company) and such expense is otherwise excluded from the
definition of Operating Expenses pursuant to clause “(G)” of the definition
thereof and (d) security deposits received from Tenants until forfeited or
applied.
Notwithstanding anything herein to the contrary, the Underwritten Net Cash Flow
of any Property that is a Disqualified Property shall be zero for all purposes
of this Agreement.
“United States” means the United States of America.
“Unrestricted Cash” means any cash or Permitted Investments not held (or
required to be held) in any Cash Management Account, Account, Rent Deposit
Account or Security Deposit Account, to the extent the cash value thereof could
be distributed as a Restricted Junior Payment by a Loan Party pursuant to
Section 4.2.12 on such date.
“U.S. Dollars” refers to lawful money of the United States.

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“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.10.6(b)(ii)(C).
“Vacant Property” means, individually, and “Vacant Properties” means,
collectively, the Properties listed on Schedule XI attached hereto which are not
leased to or occupied by any Tenant as of the Cut-Off Date.
“Voluntary Action” means, in respect of any Property, a voluntary action or
omission by any Loan Party or an action or omission by any third party
authorized by a Loan Party that, in each case, such Loan Party intends to result
in (1) an imposition of a Lien (other than a Permitted Lien) on such Property,
(ii) a Transfer of such Property or (iii) such Property becoming a Disqualified
Property.
Section 1.2    Index of Other Definitions. The following terms are defined in
the Sections, Schedules or Loan Documents as indicated below:
“Acceptable LLC” – Schedule IV
“Account Collateral” – 6.9
“Accounts” – 6.1.1
“Act” – Schedule IV
“Advance Rent Notice” – 6.1.1
“Affected Property” and “Affected Properties” – 2.4.3(a)
“Agreement” – Introductory Paragraph
“Anti-Money Laundering Laws” –4.1.16
“Approved Annual Budget” – 6.8.3
“Approved Extraordinary Operating Expense” – 6.8.4
“Approved Initial Budget” – 6.8.3
“Available Cash” – 6.8.1(i)
“Borrower” – Introductory Paragraph
“Borrower’s Operating Account” – 6.1.3
“Borrower TRS Guaranty” – 4.1.23
“Borrower TRS Security Agreement” – 4.1.23
“Borrower TRS Permitted Indebtedness” – 4.2.8
“Breakage Costs” – 2.2.5
“Capital Expenditure Account” – 6.4.1
“Capital Expenditure Funds” – 6.4.1
“Cash Collateral Account” – 6.7.1
“Cash Collateral Floor” – 6.7.2
“Cash Collateral Funds” – 6.7.1
“Cash Management Account” – 6.1.1
“Cash Management Accounts” – 6.9
“Casualty” – 5.2    
“Casualty and Condemnation Account” – 6.6
“Casualty and Condemnation Funds” – 6.6
“Casualty Consultant” – 5.4(d)(iii)
“Casualty Retainage” – 5.4(d)(iv)

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“Cause” – Schedule IV
“Committee” – Schedule IV
“Condemnation Proceeds” – Net Proceeds definition
“Counterparty Opinion” – 2.6.3(g)
“Covered Disclosure Information” – 9.2(b)
“Debt Yield Cure Prepayment” – Low Debt Yield Period Definition
“Disclosure Document” – 9.2(a)
“Eligibility Funds” – 6.10(a)
“Eligibility Reserve Account” – 6.10(a)
“Embargoed Person” – 4.2.16
“Equity Certificate” – 10.28(a)
“ERISA Plan” – 3.1.8(a)
“Event of Default” – 8.1
“Excess Deductible”- 5.1.3
“Exchange Act” – 9.2(a)
“Exchange Act Filing” – 9.1(d)
“Extraordinary Operating Expense” – 6.8.4
“First Extended Maturity Date” – 2.7.1
“First Extension Notice” – 2.7.1
“First Extension Option” – 2.7.1
“Fully Condemned Property” – 5.3(b)
“Fully Condemned Property Prepayment Amount” – 5.3(b)
“Government Lists” – 3.1.26
“Guarantor’s Permitted Indebtedness” – 4.2.8
“Increased Costs” – 2.9.1
“Indemnified Liabilities” – 4.1.21
“Independent Director” – Schedule IV
“Independent Manager” – Schedule IV
“Initial Interest Period” – 2.3.1
“Insurance Account” – 6.3.1
“Insurance Funds” – 6.3.1
“Insurance Premiums” – 5.1.1(b)
“Insurance Proceeds” – Net Proceeds definition
“Interest Period” – 2.3.2
“Interest Shortfall” – 2.4.5(a)(ii)
“Issuer” – 9.2(b)
“Lender” – Introductory Paragraph
“Lender Group” – 9.2(b)
“Liabilities” – 9.2(b)
“Margin Stock” – 3.1.16
“Material Action” – Schedule IV
“Monthly Budgeted Amount” – 6.8.3
“Nationally Recognized Service Company” – Schedule IV
“Net Proceeds Deficiency” – 5.4(d)(vi)
“Note” – 2.1.4
“Notice” – 10.5
“Participant Register” – 10.24
“Patriot Act Offense” – 3.1.26

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“Periodic Rating Agency Information” – 4.3.11
“Permitted Indebtedness” – 4.2.8
“Permitted Transfers” – 7.1
“Policy” and “Policies” – 5.1.1(b)
“Qualified Release Property Default” – 2.5(b)
“Rate Cap Collateral” – 2.6.2
“Register” – 10.24
“Registrar” – 10.24
“Release Conditions” – 2.5
“Release Premium Properties” – Release Amount Definition
“Release Property” – 2.5
“Rent Deposit Account” – 6.1.1
“Rent Deposit Account Retained Amount” – 6.1.1
“Rent Deposit Bank” – 6.1.1
“Review Waiver” – 10.2(b)
“Second Extended Maturity Date” – 2.7.1
“Second Extension Notice” – 2.7.1
“Second Extension Option” – 2.7.1
“Secondary Market Transaction” – 9.1(a)
“Securities” – 9.1(a)
“Securitization” – 9.1(a)
“Securities Act” – 9.2(a)
“Security Deposit Account” – 4.1.15(a)
“Servicer” – 10.20
“Servicing Agreement” – 10.20
“Sole Member” – Schedule IV
“Special Insurance Reserve Account” – 6.5(a)
“Special Insurance Reserve Funds” – 6.5(a)
“Special Member” – Schedule IV
“Special Purpose Bankruptcy Remote Entity” – Schedule IV
“Substitute Property” and “Substitute Properties” – 2.4.3(a)
“Substitute Mortgage Documents” – 2.4.3(a)(x)
“Succeeding Interest Period” – 2.4.5(a)(ii)
“Tax Account” – 6.2.1
“Tax Funds” – 6.2.1
“Tenant Direction Letter” – 6.1.1
“Third Extended Maturity Date” – 2.7.1
“Third Extension Notice” – 2.7.1
“Third Extension Option” – 2.7.1
“Transfer” – 4.2.3
“Underwriter Group” – 9.2(b)
“Updated Information” – 9.1(b)(i)
“U.S. Tax Compliance Certificate” – 2.10.6(b)(ii)(C)
    
Section 1.3    Principles of Construction. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement or any other
Loan Document shall refer to this Agreement or such other Loan

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Document as a whole and not to any particular provision hereof or thereof. When
used in this Agreement or any other Loan Document, the word “including” shall
mean “including but not limited to”. Unless otherwise specified, all meanings
attributed to defined terms herein shall be equally applicable to both the
singular and plural forms of the terms so defined.

ARTICLE 2
THE LOAN
Section 2.1    The Loan.
2.1.1    Agreement to Lend and Borrow. Subject to and upon the terms and
conditions set forth herein, Lender shall make the Loan to Borrower and Borrower
shall accept the Loan from Lender on the Closing Date.
2.1.2    Components of the Loan. For purposes of the computation of the interest
accrued on the Loan from time to time and certain other computations set forth
herein, the Loan shall be divided into multiple components designated as
“Component A”, “Component B”, “Component C”, “Component D”, “Component E” and
“Component F”. The following table sets forth the initial principal amount of
each such Component.
Component
Initial Principal Amount
 
 
Component A
$184,663,000
Component B
$35,930,000
Component C
$26,314,000
Component D
$30,924,000
Component E
$39,965,000
Component F
$24,445,000

2.1.3    Single Disbursement to Borrower. Borrower shall receive only one
borrowing hereunder in respect of the Loan and any amount borrowed and repaid
hereunder in respect of the Loan may not be reborrowed.
2.1.4    The Note. The Loan and all of the Components thereof shall be evidenced
by that certain Promissory Note of even date herewith, in the stated principal
amount of Three Hundred and Forty-Two Million Two Hundred and Forty-One Thousand
and No/100 Dollars ($342,241,000.00) executed by Borrower and payable to the
order of Lender in evidence of each of the Components of the Loan (as the same
may hereafter be amended, supplemented, restated, increased, extended or
consolidated from time to time, the “Note”) and shall be repaid in accordance
with the terms of this Agreement, the Note and the other Loan Documents.
2.1.5    Use of Proceeds. Borrower shall use proceeds of the Loan to (i) make
initial deposits of the Reserve Funds, (ii) make distributions to Equity Owner,
(iii) pay costs and expenses incurred in connection with the closing of the Loan
and the related Securitization, and

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(iv) to the extent any proceeds remain after satisfying clauses (i) through
(iii) above, for such lawful purpose as Borrower shall designate.
Section 2.2    Interest Rate.
2.2.1    Interest Rate.
(a)    Each Component of the Loan shall accrue interest throughout the Term at
the Interest Rate applicable to such Component during each Interest Period. The
total interest accrued under the Loan shall be the sum of the interest accrued
on the outstanding balance of each of the Components. Borrower shall pay to
Lender on each Monthly Payment Date the interest accrued or to be accrued on the
Loan for the related Interest Period.
(b)    Subject to the terms and conditions hereof, the Loan shall be a LIBOR
Loan. In the event that Lender shall have determined (which determination shall
be conclusive and binding upon Borrower absent manifest error) that by reason of
circumstances affecting the interbank Eurodollar market, adequate and reasonable
means do not exist for ascertaining LIBOR, then Lender shall forthwith give
notice by telephone of such determination, confirmed in writing, to Borrower at
least one (1) day prior to the next succeeding Interest Determination Date. If
such notice is given, the Loan shall be converted, as of the first day of the
next succeeding Interest Period, to a Prime Rate Loan. Notwithstanding any
provision of this Agreement to the contrary, in no event shall Borrower have the
right to convert a LIBOR Loan to a Prime Rate Loan.
(c)    If, pursuant to the terms hereof, the Loan has been converted to a Prime
Rate Loan and Lender shall determine (which determination shall be conclusive
and binding upon Borrower absent manifest error) that the event(s) or
circumstance(s) which resulted in such conversion shall no longer be applicable,
Lender shall give notice by telephone of such determination, confirmed in
writing, to Borrower at least one (1) day prior to the next succeeding Interest
Determination Date. If such notice is given, the Loan shall be converted, as of
the first day of the next succeeding Interest Period, to a LIBOR Loan.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Borrower have the right to convert a Prime Rate Loan to a LIBOR Loan.
(d)    If the adoption of any requirement of law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender to maintain a LIBOR Loan as contemplated hereunder, (i) the obligation of
Lender hereunder to make or maintain a LIBOR Loan or to convert a Prime Rate
Loan to a LIBOR Loan shall be canceled forthwith and (ii) any outstanding LIBOR
Loan shall be converted automatically to a Prime Rate Loan on the first day of
the next succeeding Interest Period, or upon such earlier date as may be
required by law. Borrower hereby agrees to promptly pay to Lender, upon demand,
any additional amounts necessary to compensate Lender for any costs incurred by
Lender in making any conversion in accordance with this Agreement, including
without limitation, any interest or fees payable by Lender to lenders of funds
obtained by it in order to make or maintain the LIBOR Loan hereunder. Lender’s
notice of such costs, as certified to Borrower, shall be conclusive absent
manifest error.
2.2.2    Default Rate. In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the Outstanding Principal Balance
of the Components
 

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and, to the extent not prohibited by applicable law, all other portions of the
Debt, shall accrue interest at the Default Rate, calculated from the date such
payment was due or, if later, such Default shall have occurred, without regard
to any grace or cure periods contained herein. Interest at the Default Rate
shall be paid immediately upon demand, which demand may be made as frequently as
Lender shall elect, to the extent not prohibited by applicable law.
2.2.3    Interest Calculation. Interest on the Loan and other Obligations shall
be calculated by multiplying (A) the actual number of days elapsed in the period
for which the calculation is being made by (B) a daily rate based on a three
hundred sixty (360) day year (that is, the Interest Rate expressed as an annual
rate divided by 360) by (C) the Outstanding Principal Balance or the amount of
such other Obligations, as applicable. The accrual period for calculating
interest due on each Monthly Payment Date shall be the Interest Period in which
such Monthly Payment Date occurs.
2.2.4    Usury Savings. This Agreement and the other Loan Documents are subject
to the express condition that at no time shall Borrower be required to pay
interest on the Outstanding Principal Balance at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
Outstanding Principal Balance at a rate in excess of the Maximum Legal Rate, the
Interest Rate shall be deemed to be immediately reduced to the Maximum Legal
Rate and all previous payments in excess of the Maximum Legal Rate shall be
deemed to have been payments in reduction of principal and not on account of the
interest due hereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
2.2.5    Breakage Indemnity. Borrower shall indemnify Lender against any loss or
expense which Lender may actually sustain or incur in liquidating or redeploying
deposits from third parties acquired to effect or maintain the Loan or any part
thereof as a consequence of (i) any payment or prepayment of the Loan or any
portion thereof made on a date other than a Monthly Payment Date and (ii) any
default in payment or prepayment of the Principal or any part thereof or
interest accrued thereon, as and when due and payable (at the date thereof or
otherwise, and whether by acceleration or otherwise) (collectively, “Breakage
Costs”), provided, Borrower shall not indemnify Lender from any loss or expense
arising from Lender’s willful misconduct or gross negligence. Lender shall
deliver to Borrower a statement for any such sums which it is entitled to
receive pursuant to this Section 2.2.5, which statement shall be binding and
conclusive absent manifest error. Borrower’s obligations under this Section
2.2.5 are in addition to Borrower’s obligations to pay any Spread Maintenance
Premium applicable to a payment or prepayment of the Loan.
Section 2.3    Loan Payments.
2.3.1    Payments. On the Closing Date, Borrower shall pay interest on the
Outstanding Principal Balance of the Components from the date hereof through and
including September 14, 2014 (the “Initial Interest Period”).  On October 9,
2014, and each Monthly Payment Date thereafter during the Term, Borrower shall
make a payment of principal and

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interest equal to the Monthly Debt Service Payment Amount, which payment shall
be applied in accordance with Article 6. Borrower shall also pay to Lender all
amounts required in respect of Reserve Funds as set forth in Article 6.
2.3.2    Payments Generally. After the Initial Interest Period, each interest
accrual period thereafter (each, an “Interest Period”) shall commence on the
fifteenth (15th) calendar day of a calendar month and ending on (and including)
the fourteenth (14th) calendar day of the following calendar month. For purposes
of making payments hereunder, but not for purposes of calculating Interest
Periods, if the Monthly Payment Date is not a Business Day, then amounts due on
such date shall be due on the immediately preceding Business Day. Lender shall
have the right from time to time, in its sole discretion, upon not less than ten
(10) days prior written notice to Borrower, to change the Monthly Payment Date
to a different calendar day and, if requested by Lender, Borrower shall promptly
execute an amendment to this Agreement to evidence such change; provided,
however, that if Lender shall have elected to change the Monthly Payment Date as
aforesaid, Lender shall adjust the Interest Period and the Interest
Determination Date accordingly, so that (a) after giving effect to any such
change or adjustment, the period of time between the Monthly Payment Date and
the end of the Interest Period shall not be greater than five (5) days and (b)
the date of each Maturity Date (including the Stated Maturity Date, the First
Extended Maturity Date, the Second Extended Maturity Date and the Third Extended
Maturity Date) and any other date in the Loan Documents which corresponds with a
Monthly Payment Date shall be automatically amended to reflect the Monthly
Payment Date as so adjusted. With respect to payments of principal due on any
Component on the Maturity Date, interest shall be payable at the Interest Rate,
through and including the day immediately preceding such Maturity Date.
2.3.3    Payment on Maturity Date. Borrower shall pay to Lender on the Maturity
Date the Outstanding Principal Balance, all accrued and unpaid interest and all
other amounts due hereunder and under the Note, the Mortgage Documents and the
other Loan Documents.
2.3.4    Late Payment Charge. If any principal, interest or any other sum due
under the Loan Documents (other than the Outstanding Principal Balance due and
payable on the Maturity Date) is not paid by Borrower on the date on which it is
due, Borrower shall pay to Lender upon demand an amount equal to the lesser of
four percent (4%) of such unpaid sum or the maximum amount permitted by
applicable law in order to defray the expense incurred by Lender in handling and
processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Any such amount shall be secured by Borrower
Security Agreement, the Mortgage Documents and the other Loan Documents to the
extent permitted by law.
2.3.5    Method and Place of Payment.
(a)    Except as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Lender not later
than 2:00 p.m., New York City time, on the date when due and shall be made in
lawful money of the United States of America in immediately available funds at
Lender’s office or at such other place as Lender shall from time to time
designate, and any funds received by Lender after such time shall, for all
purposes hereof, be deemed to have been paid on the next succeeding Business
Day.

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(b)    Whenever any payment to be made hereunder or under any other Loan
Document shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be the immediately preceding Business Day.
(c)    All payments required to be made by Borrower hereunder or under the Note
or the other Loan Documents shall be made irrespective of, and without deduction
for, any setoff, claim or counterclaim and shall be made irrespective of any
defense thereto.
Section 2.4    Prepayments.
2.4.1    Prepayments. Except as otherwise provided herein, Borrower shall not
have the right to prepay the Loan in whole or in part prior to the Stated
Maturity Date.
2.4.2    Voluntary Prepayments. Provided that Borrower shall timely deliver to
Lender a Prepayment Notice, Borrower may prepay all or any portion of the
Outstanding Principal Balance and any other amounts outstanding under the Note,
this Agreement, the Mortgage Documents and any of the other Loan Documents, on
any Business Day, provided that Borrower shall comply with the provisions of and
pay to Lender the amounts set forth in Section 2.4.5. Each such prepayment shall
be in a minimum principal amount equal to $1,000,000 and in integral multiples
of $100,000 in excess thereof and shall be made and applied in the manner set
forth in Section 2.4.5.
2.4.3    Mandatory Prepayments.
(a)    Disqualified Properties. If at any time any Property shall become a
Disqualified Property, Borrower shall, no later than the close of business on
the fifth (5th) Business Day following the last day of the applicable Cure
Period, give notice thereof to Lender and prepay the Debt in the applicable
Release Amount with respect to such Property. Simultaneous with the prepayment
of the Debt by the Release Amount with respect to a Disqualified Property as
provided above, Lender shall release the Disqualified Property from the
applicable Mortgage Documents and related Lien, provided, that (x) Borrower has
delivered to Lender a draft release (and, in the event the Mortgage and the
Assignment of Leases and Rents applicable to the Disqualified Property encumbers
other Property(ies) in addition to the Disqualified Property, such release shall
be a partial release that relates only to the Disqualified Property and does not
affect the Liens and security interests encumbering or on the other
Property(ies)) in form and substance appropriate for the jurisdiction in which
such Disqualified Property is located and shall contain standard provisions
protecting the rights of Lender, (y) Borrower shall pay all costs, taxes and
expenses associated with such release (including, without limitation, cost to
file and record the release and Lender’s reasonable out-of-pocket attorneys’
fees) and (z) such Disqualified Property is a separate legal parcel from the
property remaining encumbered by Mortgages. Notwithstanding the foregoing, in
lieu of such prepayment, Borrower may, no later than the close of business on
the fifth (5th) Business Day following the last day of the applicable Cure
Period, either (1) deposit an amount equal to 100% of the Allocated Loan Amount
for such Disqualified Property in the Eligibility Reserve Account in accordance
with and subject to Section 6.10 or (2) substitute a Disqualified Property or a
portfolio of Disqualified Properties (each, an “Affected Property” and
collectively, the “Affected Properties”) with a substitute Eligible Property or
a portfolio of Eligible Properties (each, a “Substitute Property” and
collectively, the “Substitute Properties”) provided that, in the case of a
proposed substitution, the following conditions are satisfied:
 

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(i)    each Substitute Property is a detached single-family residential real
property and not a two-to-four family residential real property, townhome,
housing cooperative, manufactured housing unit or condominium;
(ii)    no Event of Default shall have occurred and be continuing except as
related to, and cured by the removal of, any Affected Property;
(iii)    Lender shall have obtained, at Borrower’s sole cost and expense, a
Broker Price Opinion for the Substitute Property (or Broker Price Opinions for
the Substitute Properties, if a portfolio of Affected Properties are being
substituted) and based on such Broker Price Opinion(s), the Substitute Property
(or Substitute Properties, if a portfolio of Affected Properties are being
substituted) shall have the same or greater BPO Value as the greater of (x) the
BPO Value of the Affected Property (or portfolio of Affected Properties being
substituted) as of the Closing Date and (y) the BPO Value of the Affected
Property (or portfolio of Affected Properties being substituted) immediately
prior to the substitution;
(iv)    Borrower shall deliver to Lender an Officer’s Certificate stating that
each Substitute Property satisfies each of the Property Representations and is
in compliance with each of the Property Covenants on the date of the
substitution after giving effect to the substitution;
(v)    the Eligible Lease for each Substitute Property shall have a remaining
contractual term of at least six months (without giving effect to any extension
option in such lease);
(vi)    the in place Rents under the Lease(s) for the Substitute Property (or
Substitute Properties, if a portfolio of Affected Properties are being
substituted) and the Underwritten Net Cash Flow attributable to the Substitute
Property (or Substitute Properties, if a portfolio of Affected Properties are
being substituted) based on reasonable allocations by Borrower shall be equal to
or greater than the greater of (A) the in place Rents under the Lease(s) for the
Affected Property (or portfolio of Affected Properties being substituted) and
the Underwritten Net Cash Flow attributable to the Affected Property (or
portfolio of Affected Properties being substituted) based on reasonable
allocations by Borrower, in each case, measured as of the time of substitution
and (B) the in place Rents under the Lease(s) for the Affected Property (or
portfolio of Affected Properties being substituted) and the Underwritten Net
Cash Flow attributable to the Affected Property (or portfolio of Affected
Properties being substituted) based on reasonable allocations by Borrower, in
each case, measured as of the Closing Date;
(vii)    simultaneously with the substitution, Borrower shall convey all of
Borrower’s right, title and interest in, to and under the Affected Property (or
portfolio of Affected Properties being substituted) to a Person other than
Borrower, a Loan Party or any Person owned directly or indirectly by Borrower or
a Loan Party (provided that, prior to any such conveyance, the Affected Property
may initially be contributed to a Borrower TRS so long as the Properties in a
Borrower TRS shall not exceed five percent (5%) of the total Properties of the
Loan Parties at any time and the Borrower TRS shall commence marketing such
Release Property within sixty (60) calendar days of transfer) and Borrower shall
deliver to Lender a copy of the deed conveying all or Borrower’s

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right, title and interest in the Affected Property (or portfolio of Affected
Properties being substituted);
(viii)    Borrower shall deliver on or prior to the date of substitution
evidence satisfactory to Lender that each Substitute Property is insured
pursuant to Policies meeting the requirements of Article 5;
(ix)    Borrower shall deliver to Lender the Property File with respect to each
Substitute Property;
(x)    Borrower shall have executed and delivered to Lender, the Mortgage
Documents with respect to each Substitute Property, which shall be in
substantially the same form as the Mortgage, Assignment of Leases and Rents and
Fixture Filing, if applicable, executed and/or delivered on the Closing Date
with such changes as may be necessitated or appropriate (as reasonably
determined by Lender) for the jurisdiction in which the Substitute Property is
located, and which may, in Lender’s reasonable discretion, be Mortgage Documents
with respect to only such Substitute Property (and in the event the Substitute
Property is located in the same county or parish in which one or more other
Properties (other than the Affected Property) is located, such Mortgage and
Assignment of Leases and Rents may be in the form of an amendment and spreader
agreement to the existing Mortgage and Assignment of Leases and Rents covering
such Property or Properties located in the same county or parish as the
Substitute Property, in each case, in form and substance reasonably acceptable
to Lender) (the “Substitute Mortgage Documents”);
(xi)    Borrower shall deliver to Lender the following opinions of counsel: (A)
an opinion of counsel admitted to practice under the laws of the state in which
the Substitute Property (or Substitute Properties, if a portfolio of Affected
Properties are being substituted) is located in form and substance reasonably
satisfactory to Lender opining as to the enforceability of the Substitute
Mortgage Documents with respect to the Substitute Property and (B) an opinion
stating that the Substitute Mortgage Documents were duly authorized, executed
and delivered by Borrower and that the execution and delivery of such Substitute
Mortgage Documents and the performance by Borrower of its obligations thereunder
will not cause a breach or a default under, any agreement, document or
instrument to which Borrower is a party or to which it or the Properties are
bound and otherwise in form and substance reasonably satisfactory to Lender;
(xii)    Lender shall have received a Title Insurance Policy for the Substitute
Property (or, in the event a Substitute Property is located in the same county
or parish in which one or more other Properties (other than an Affected
Property) is located, an endorsement to the existing Title Insurance Policy with
respect to such Property or Properties located in the same county or parish as
such Substitute Property in form and substance reasonably satisfactory to
Lender) insuring the Lien of the Mortgage encumbering such Substitute Property
as a valid first lien on such Substitute Property, free and clear of all
exceptions other than the Permitted Liens;

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(xiii)    each Substitute Property shall be located in a metropolitan
statistical area that contains at least one property described on the Properties
Schedule as of the Closing Date;
(xiv)    no acquisition of a Substitute Property will result in Borrower or any
Loan Party incurring any indebtedness (except as permitted by this Agreement);
(xv)    the BPO Value of the Affected Properties, together with the BPO Value of
all other Affected Properties since the date hereof, shall be no more than ten
percent (10%) of the aggregate BPO Values of all Properties as of the Closing
Date;
(xvi)    if any Lien, litigation or governmental proceeding is existing or
pending or, to the actual knowledge of a Responsible Officer of Manager or a
Loan Party, threatened against any Affected Property or Substitute Property
which may result in liability for Borrower, Borrower shall have deposited with
Lender reserves reasonably satisfactory to Lender as security for the
satisfaction of such liability;
(xvii)    simultaneously with the substitution, Lender shall release the
Affected Property or Affected Properties from the applicable Mortgage Documents
and related Lien, provided, that Borrower has delivered to Lender a draft
release (and, in the event the Mortgage and the Assignment of Leases and Rents
applicable to the Affected Property or Affected Properties encumbers other
Property(ies) in addition to the Affected Property or Affected Properties, such
release shall be a partial release that relates only to the Affected Property or
Affected Properties and does not affect the Liens and security interests
encumbering or on the other Property(ies)) in form and substance appropriate for
the jurisdiction in which such Affected Property or Affected Properties are
located which contains standard provisions protecting the rights of Lender;
(xviii)    Borrower shall pay to Lender all reasonable out-of-pocket costs and
expenses incurred by Lender in connection with the substitution (including,
without limitation, costs and expenses incurred by Lender in connection with the
release of the Affected Property from applicable Mortgage Documents) and, in
addition, the fee specified on Schedule IX as being assessed by Lender and/or
its Servicer, or with respect to any replacement Servicer, the current
reasonable and customary fee being assessed by such replacement Servicer, to
effect releases or assignments; and
(xix)    the Affected Property or Affected Properties shall constitute separate
legal parcels from the property remaining encumbered by Mortgages, and the
Substitute Property shall be comprised of one or more separate legal parcels on
a stand alone basis.
Any such deposit in the Eligibility Reserve Account or any such substitution
shall be completed no later than the due date for the prepayment required under
this Section 2.4.3(a). Notwithstanding anything to the contrary contained herein
or in any other Loan Document, if the Loan is included in a REMIC Trust, no
substitution under this Section 2.4.3(a) or Section 2.5 will be permitted unless
(1) either (aa) immediately after such substitution the ratio of the unpaid
principal balance of the Loan to the value of the remaining Properties (as
determined by Lender in its sole discretion using any commercially reasonable
method permitted to a REMIC Trust; and which shall exclude the value of personal
property (other than fixtures) or going concern

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value, if any) is equal to or less than 125% or (bb) the ratio of the unpaid
principal balance of the Loan to the value of the Properties (including the
Substitute Property or Substitute Properties) will not increase as a result of
the substitution of the Substitute Property or Substitute Properties for the
Affected Property or Affected Properties, or (2) Lender receives an opinion of
counsel that the Securitization will not fail to maintain its status as a REMIC
Trust as a result of the substitution of the Substitute Property or Substitute
Properties for the Affected Property or Affected Properties.
(b)    Transfer. If at any time any Property is Transferred to a party other
than a Loan Party, then Borrower shall, no later than the close of business on
the day on which such Transfer occurs, give notice thereof to Lender and prepay
the Debt in the applicable Release Amount with respect to such Property in
accordance with Section 2.5.
(c)    Condemnation or Casualty. If Borrower is required to make any prepayment
under Section 5.3 or Section 5.4 as a result of a Condemnation or Casualty, on
the next occurring Monthly Payment Date following the date on which Lender
actually receives the applicable Net Proceeds, one hundred percent (100%) of
such Net Proceeds and all other amounts required to be prepaid pursuant to
Section 5.3 or Section 5.4, as applicable, shall be applied to the prepayment of
the Debt in accordance with Section 2.4.5(d). Notwithstanding anything herein to
the contrary, no Spread Maintenance Premium shall be due in connection with any
prepayment made pursuant to this Section 2.4.3(c).
(d)    Application of Mandatory Prepayments. Each such prepayment shall be made
and applied in the manner set forth in Section 2.4.5.
(e)    Payment from Cash Management Account. Lender may collect any prepayment
required under this Section 2.4.3 from the Cash Management Account on the date
such prepayment is payable hereunder.
2.4.4    Prepayments After Default.
(a)    If, during the continuance of an Event of Default, payment of all or any
part of the Debt is tendered by Borrower and accepted by Lender or is otherwise
recovered by Lender (including through application of any Reserve Funds), such
tender or recovery shall be deemed to be a voluntary prepayment by Borrower in
violation of the prohibition against prepayment set forth in Section 2.4.1, and
Borrower shall pay, as part of the Debt, all of: (i) all accrued interest
calculated at the Interest Rate on the amount of principal being prepaid through
and including the date of such prepayment together with an amount equal to the
interest that would have accrued at the Interest Rate on the amount of principal
being prepaid through the end of the Interest Period in which such prepayment
occurs, notwithstanding that such Interest Period extends beyond the date of
prepayment, (ii) the Interest Shortfall, if applicable, with respect to the
amount prepaid, (iii) Breakage Costs, if any, without duplication of any sums
paid pursuant to the preceding clauses (i) and (ii), and (iv) an amount equal to
the Spread Maintenance Premium (if made before the Spread Maintenance Date).
(b)    Notwithstanding anything contained herein to the contrary, upon the
occurrence and during the continuance of any Event of Default, any payment of
principal, interest and other amounts payable under the Loan Documents from
whatever source may be

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applied by Lender among the Components and other Obligations as Lender shall
determine in its sole and absolute discretion.
2.4.5    Prepayment/Repayment Conditions.
(a)    On the date on which a prepayment, voluntary or mandatory, is made under
the Note or as required under this Agreement, which date must be a Business Day,
Borrower shall pay to Lender:
(i)    all accrued and unpaid interest calculated at the Interest Rate on the
amount of principal being prepaid on the applicable Component or Components
through and including the Repayment Date together with an amount equal to the
interest that would have accrued at the Interest Rate on the amount of principal
being prepaid through the end of the Interest Period in which such prepayment
occurs, notwithstanding that such Interest Period extends beyond the date of
prepayment;
(ii)     if such prepayment is made during the period from and including the
first day after a Monthly Payment Date through and including the last day of the
Interest Period in which such prepayment occurs, all interest on the principal
amount being prepaid on the applicable Component or Components which would have
accrued from the first day of the Interest Period immediately following the
Interest Period in which the prepayment occurs (the “Succeeding Interest
Period”) through and including the end of the Succeeding Interest Period,
calculated at (A) the Interest Rate if such prepayment occurs on or after the
Interest Determination Date for the Succeeding Interest Period or (B) the
Assumed Note Rate if such prepayment occurs before the Interest Determination
Date for the Succeeding Interest Period (the “Interest Shortfall”);
(iii)     Breakage Costs, if any, without duplication of any sums paid pursuant
to the preceding clauses (i) and (ii);
(iv)    the Spread Maintenance Premium applicable thereto (if such prepayment
occurs prior to the Spread Maintenance Date); provided that no Spread
Maintenance Premium shall be due in connection with a prepayment under
Section 2.4.3(a) (except where such prepayment arises as a result of a Voluntary
Action) or Section 2.4.3(c) or Section 5.03 of each of the Mortgages; and
(v)    all other sums, then due under the Note, this Agreement and the other
Loan Documents.
(b)    If the Interest Shortfall was calculated based upon the Assumed Note
Rate, upon determination of LIBOR on the Interest Determination Date for the
Succeeding Interest Period then (i) if the Interest Rate applicable to any
Component for such Succeeding Interest Period is less than the Assumed Note Rate
applicable to such Component, Lender shall promptly refund to Borrower the
amount of the Interest Shortfall paid with respect to such Component, calculated
at a rate equal to the difference between the Assumed Note Rate applicable to
such Component and the Interest Rate applicable to such Component for such
Interest Period, or (ii) if the Interest Rate applicable to any Component is
greater than the Assumed Note Rate applicable to such Component, Borrower shall
promptly (and in no event later than the ninth (9th) day of the following month)
pay Lender the amount of such additional Interest Shortfall applicable to such

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Component calculated at a rate equal to the amount by which the Interest Rate
applicable to such Component exceeds the Assumed Note Rate applicable to such
Component.
(c)    Borrower shall pay all reasonable out-of-pocket costs and expenses of
Lender incurred in connection with the repayment or prepayment (including
without limitation reasonable attorneys’ fees and expenses and costs and
expenses related to the Transfer or substitution of any Property); provided, for
the avoidance of doubt, this provision shall not apply with respect to Taxes.
(d)    Except during an Event of Default, prepayments shall be applied by Lender
in the following order of priority: (i) first, to any amounts (other than
principal, interest, Interest Shortfall, Breakage Costs and Spread Maintenance
Premium) then due and payable under the Loan Documents, including any costs and
expenses of Lender in connection with such prepayment; (ii) second, interest
payable pursuant to Section 2.4.5(a)(i) on the applicable Component or
Components being prepaid pursuant to this clause (d) at the Interest Rate; (iii)
third, Interest Shortfall on the applicable Component or Components being
prepaid pursuant to this clause (d); (iv) fourth, Breakage Costs on the
applicable Component or Components being prepaid pursuant to this clause (d);
(v) fifth, Spread Maintenance Premium, to the extent applicable, on the
applicable Component or Components being prepaid pursuant to this clause (d) and
(vi) sixth, to principal, applied as set forth in clause (e) below.
(e)    Except during an Event of Default, prepayments of principal of the Loan
made pursuant to this Section 2.4.5 shall be applied to the Loan (i) first, to
Component A until the outstanding principal balance of Component A is reduced to
zero, (ii) second, to Component B until the outstanding principal balance of
Component B is reduced to zero, (iii) third, to Component C until the
outstanding principal balance of Component C is reduced to zero, (iv) fourth, to
Component D until the outstanding principal balance of Component D is reduced to
zero, (v) fifth, to Component E until the outstanding principal balance of
Component E is reduced to zero and (vi) sixth, to Component F until the
outstanding principal balance of Component F is reduced to zero; provided, that
so long as no Default or Event of Default shall then exist or would result
therefrom, any voluntary prepayments of principal on the Loan made from
Unrestricted Cash pursuant to Section 2.4.2, other than Debt Yield Cure
Prepayments, shall be applied to the Components of the Loan on a pro rata basis.
(f)    Prepayments under Section 2.4.2 shall reduce the Allocated Loan Amounts
for each Property on a pro rata basis. Prepayments under Section 2.4.3 shall
reduce the Allocated Loan Amount with respect to the applicable Property, until
the Allocated Loan Amount and any interest, fees or other Obligations related
thereto is zero and any excess of such prepayment shall be applied to reduce the
Allocated Loan Amounts for the remaining Properties on a pro rata basis.
(g)    Lender shall, upon the written request and at the expense of Borrower,
upon payment in full of the Debt in accordance with the terms and provisions of
the Loan Documents, at Borrower’s election, (i) release the Liens of the
Mortgage Documents and cause the trustees under any of the Mortgages to reconvey
the applicable Properties to Borrower or (ii) assign the Mortgage Documents and
deliver the original notes to the Person designated by Borrower. In connection
with the releases of the Liens or assignments of the Mortgage Documents,
Borrower shall submit to Lender, forms of releases of Liens or assignments, as
applicable, (and related Loan Documents) for execution by Lender. Such releases
and

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assignments shall be the forms appropriate in the jurisdictions in which the
Properties are located and contain standard provisions protecting the rights of
Lender. In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such releases
and assignments, together with an Officer’s Certificate certifying that such
documentation (i) is in compliance with all Legal Requirements, and (ii) will
effect such release or assignment in accordance with the terms of this
Agreement. Borrower shall pay all out-of-pocket costs, taxes and expenses
associated with the release of the Liens of the Mortgage Documents or the
assignment of the Mortgage Document, including Lender’s reasonable attorneys’
fees.
Section 2.5    Transfers of Properties. Borrower and Borrower TRS may Transfer
any Property (each, a “Release Property”) and Lender shall release the Release
Property from the applicable Mortgage Documents and release the security
interest and Lien on any Collateral located at such Property, provided that the
following conditions precedent to such Transfer are satisfied (the “Release
Conditions”); provided, that, for the avoidance of doubt, the Release Conditions
do not need to be satisfied in order for Lender to release its security interest
and Lien on any Disqualified Property in connection with any prepayment or
substitution in accordance with Section 2.4.3(a) to the extent Section 2.4.3(a)
conflicts with such Release Conditions:
(a)    Borrower shall submit to Lender, not less than ten (10) Business Days’
prior to the Transfer Date, a Request for Release, together with all attachments
thereto and evidence reasonably satisfactory to Lender that the conditions
precedent set forth in this Section 2.5 will be satisfied upon the consummation
of such Transfer (for the avoidance of doubt, a Request for Release in
connection with a contribution of a Release Property to a Borrower TRS prior to
the Transfer thereof to such third party shall include only clauses (b), (c) and
(j) below);
(b)    No Event of Default has occurred and is continuing (other than a
non-monetary Event of Default that is specific to such Release Property to which
Section 2.4.3(a) is applicable and would be cured as a result of the release of
the Release Property, so long as a mandatory prepayment is made with respect
thereto in accordance with Section 2.4.3(a) (a “Qualified Release Property
Default”));
(c)    The Debt Yield as of the most recent Calculation Date, after giving pro
forma effect for the elimination of the Underwritten Net Cash Flow for the
Release Property and the repayment of the Loan in the applicable Release Amount,
is at least the greater of (x) the Closing Date Debt Yield and (y) the actual
Debt Yield as of such date; provided that the condition in this clause (c) shall
not be applicable to a Transfer of a Property if the Loan is prepaid in the
amount that is the greater of the applicable Release Amount and 100% of the Net
Transfer Proceeds for the Transferred Property;
(d)    The Release Property shall be Transferred to a Person other than
Borrower, any other Loan Party or, unless the release of the Release Property is
effected in order to cure a Qualified Release Property Default, any Affiliate of
Borrower or any other Loan Party (provided that Borrower may contribute the
Release Property to a Borrower TRS prior to such Transfer so long as the
Properties in a Borrower TRS shall not exceed five percent (5%) of the total
Properties of the Loan Parties at any time and the Borrower TRS shall commence
marketing such Release Property within sixty (60) calendar days of transfer),
and, unless the release of the Release Property is effected in order to cure a
Qualified Release Property Default, shall be

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Transferred pursuant to a bona fide all-cash sale of the Release Property on
arms-length terms and conditions;
(e)    On or prior to the Transfer Date, Borrower shall prepay the Outstanding
Principal Balance by an amount equal to the applicable Release Amount for the
Release Property, and Borrower shall comply with the provisions and pay to
Lender the amounts set forth in Section 2.4.5;
(f)    If a Trigger Period is continuing on the Transfer date, the excess, if
any, of (i) the Net Transfer Proceeds for the Release Property over (ii) the
applicable Release Amount for the Release Property and any other amounts payable
to Lender in connection with such release, shall be deposited into the Cash
Collateral Account;
(g)    Borrower shall submit to Lender, not less than five (5) Business Days’
prior to the Transfer Date, a draft release for the applicable Mortgage
Documents (and, in the event the Mortgage and the Assignment of Leases and Rents
applicable to the Release Property encumber other Property(ies) in addition to
the Release Property, such release shall be a partial release that relates only
to the Release Property and does not affect the Liens and security interests
encumbering or on the other Property(ies)) in form and substance appropriate for
the jurisdiction in which the Release Property is located and shall contain
standard provisions protecting the rights of Lender. In addition, Borrower shall
provide all other documentation of a ministerial or administrative nature that
Lender reasonably requires to be delivered by Borrower in connection with such
release or assignment;
(h)    Borrower shall have paid all taxes and all reasonable out-of-pocket costs
and expenses incurred by Lender and/or its Servicer in connection with any such
release and, in addition, the fee specified on Schedule IX as being assessed by
Lender and/or its Servicer, or with respect to any replacement Servicer, the
current reasonable and customary fee being assessed by such replacement
Servicer, to effect such release or assignment;
(i)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, if the Loan is included in a REMIC Trust and the ratio of the
unpaid principal balance of the Loan to the value of the remaining Properties
(as determined by Lender in its sole discretion using any commercially
reasonable method permitted to a REMIC Trust; and which shall exclude the value
of any personal property (other than fixtures) or going concern value, if any)
exceeds or would exceed 125% immediately after giving effect to the release of
the Release Property, no release under this Section 2.5 or Section 2.4.3 will be
permitted unless the principal balance of the Loan is prepaid by an amount not
less than the greater of (i) the Release Amount or (ii) the least amount that is
a “qualified amount” as that term is defined in IRS Revenue Procedure 2010-30,
as the same may be amended, replaced, supplemented or modified from time to
time, unless Lender receives an opinion of counsel that, if this Section 2.5(i)
is applicable but not followed or is no longer applicable at the time of such
release, the Securitization will not fail to maintain its status as a REMIC
Trust as a result of the release of the Release Property; and
(j)    The Release Property is a separate legal parcel from the property
remaining encumbered by Mortgages.

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Section 2.6    Interest Rate Cap Agreement.
2.6.1    Interest Rate Cap Agreement. Prior to or contemporaneously with the
Closing Date, Borrower shall have obtained, and thereafter maintain in effect,
the Interest Rate Cap Agreement, which shall have a term expiring no earlier
than the last day of the Interest Period in which the Stated Maturity Date
occurs and have a notional amount which shall not at any time be less than the
Outstanding Principal Balance. The Interest Rate Cap Agreement shall have a
strike rate equal to the Strike Price.
2.6.2    Pledge and Collateral Assignment. As security for the full and punctual
payment and performance of the Obligations when due (whether upon stated
maturity, by acceleration, early termination or otherwise), Borrower, as
pledgor, hereby pledges, assigns, hypothecates, transfers and delivers to Lender
as collateral and hereby grants to Lender a continuing first priority lien on
and security interest in, to and under all of the following whether now owned or
hereafter acquired and whether now existing or hereafter arising (the “Rate Cap
Collateral”): all of the right, title and interest of Borrower in and to (i) the
Interest Rate Cap Agreement; (ii) all payments, distributions, disbursements or
proceeds due, owing, payable or required to be delivered to Borrower in respect
of the Interest Rate Cap Agreement or arising out of the Interest Rate Cap
Agreement, whether as contractual obligations, damages or otherwise; and (iii)
all of Borrower’s claims, rights, powers, privileges, authority, options,
security interests, liens and remedies, if any, under or arising out of the
Interest Rate Cap Agreement, in each case including all accessions and additions
to, substitutions for and replacements, products and proceeds of any or all of
the foregoing.
2.6.3    Covenants.
(a)    Borrower shall comply with all of its obligations under the terms and
provisions of the Interest Rate Cap Agreement. All amounts paid by the
Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall
be deposited immediately into the Cash Management Account pursuant to Section
6.1.1. Subject to terms hereof, provided no Event of Default has occurred and is
continuing, Borrower shall be entitled to exercise all rights, powers and
privileges of Borrower under, and to control the prosecution of all claims with
respect to, the Interest Rate Cap Agreement and the other Rate Cap Collateral.
Borrower shall take all actions reasonably requested by Lender to enforce
Borrower’s rights under the Interest Rate Cap Agreement in the event of a
default by the Counterparty thereunder and shall not waive, amend or otherwise
modify any of its rights thereunder.
(b)    Borrower shall defend Lender’s right, title and interest in and to the
Rate Cap Collateral pledged by Borrower pursuant hereto or in which it has
granted a security interest pursuant hereto against the claims and demands of
all other Persons.
(c)    In the event of any downgrade, withdrawal or qualification of the rating
of the Counterparty such that it ceases to qualify as an “Approved
Counterparty”, unless the Counterparty shall have posted collateral on terms
acceptable to each Rating Agency, Borrower shall replace the Interest Rate Cap
Agreement with a Replacement Interest Rate Cap Agreement not later than ten (10)
Business Days following receipt of notice from Lender, Servicer or any other
Person of such downgrade, withdrawal or qualification. In the event that the
Counterparty is downgraded (i) below BBB+ by S&P or KBRA (or, if such
counterparty was an approved counterparty based on its short-term rating by S&P
or KBRA, below “A-2” by S&P or “K2” by

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KBRA) or (ii) below “Baa1” by Moody’s, a Replacement Interest Rate Cap Agreement
shall be required regardless of the posting of collateral.
(d)    In the event that Borrower fails to purchase and deliver to Lender the
Interest Rate Cap Agreement as and when required hereunder, Lender may purchase
the Interest Rate Cap Agreement and the cost incurred by Lender in purchasing
the Interest Rate Cap Agreement shall be paid by Borrower to Lender with
interest thereon at the Default Rate from the date such cost was incurred by
Lender until such cost is paid by Borrower to Lender.
(e)    Borrower shall not sell, assign, or otherwise dispose of, or mortgage,
pledge or grant a security interest in, any of the Rate Cap Collateral or any
interest therein, and any sale, assignment, mortgage, pledge or security
interest whatsoever made in violation of this covenant shall be a nullity and of
no force and effect, and upon demand of Lender, shall forthwith be cancelled or
satisfied by an appropriate instrument in writing.
(f)    Borrower shall not (i) without the prior written consent of Lender,
modify, amend or supplement the terms of the Interest Rate Cap Agreement, (ii)
without the prior written consent of Lender, except in accordance with the terms
of the Interest Rate Cap Agreement, cause the termination of the Interest Rate
Cap Agreement prior to its stated maturity date, (iii) without the prior written
consent of Lender, except as aforesaid, waive or release any obligation of the
Counterparty (or any successor or substitute party to the Interest Rate Cap
Agreement) under the Interest Rate Cap Agreement, (iv) without the prior written
consent of Lender, consent or agree to any act or omission to act on the part of
the Counterparty (or any successor or substitute party to the Interest Rate Cap
Agreement) which, without such consent or agreement, would constitute a default
under the Interest Rate Cap Agreement, (v) fail to exercise promptly and
diligently each and every material right which it may have under the Interest
Rate Cap Agreement, (vi) take or intentionally omit to take any action or
intentionally suffer or permit any action to be omitted or taken, the taking or
omission of which would result in any right of offset against sums payable under
the Interest Rate Cap Agreement or any defense by the Counterparty (or any
successor or substitute party to the Interest Rate Cap Agreement) to payment or
(vii) fail to give prompt notice to Lender of any notice of default given by or
to Borrower under or with respect to the Interest Rate Cap Agreement, together
with a complete copy of such notice. If Borrower shall have received written
notice that the Securitization shall have occurred, no consent by Lender
provided for in this Section 2.6.3 (f) shall be given by Lender unless Lender
shall have received a Rating Agency Confirmation.
(g)    In connection with an Interest Rate Cap Agreement, Borrower shall obtain
and deliver to Lender an opinion of counsel from counsel (which counsel may be
in-house counsel for the Counterparty) for the Counterparty upon which Lender
and its successors and assigns may rely (the “Counterparty Opinion”), under New
York law and, if the Counterparty is a non-U.S. entity, the applicable foreign
law, which shall provide in relevant part, that: (i) the Counterparty is duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and has the organizational power and authority to
execute and deliver, and to perform its obligations under, the Interest Rate Cap
Agreement; (ii) the execution and delivery of the Interest Rate Cap Agreement by
the Counterparty, and any other agreement which the Counterparty has executed
and delivered pursuant thereto, and the performance of its obligations
thereunder have been and remain duly authorized by all necessary action and do
not contravene any provision of its certificate of incorporation or by-laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or

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affecting it or its property; (iii) all consents, authorizations and approvals
required for the execution and delivery by the Counterparty of the Interest Rate
Cap Agreement, and any other agreement which the Counterparty has executed and
delivered pursuant thereto, and the performance of its obligations thereunder
have been obtained and remain in full force and effect, all conditions thereof
have been duly complied with, and no other action by, and no notice to or filing
with any governmental authority or regulatory body is required for such
execution, delivery or performance; and (iv) the Interest Rate Cap Agreement,
and any other agreement which the Counterparty has executed and delivered
pursuant thereto, has been duly executed and delivered by the Counterparty and
constitutes the legal, valid and binding obligation of the Counterparty,
enforceable against the Counterparty in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
2.6.4    [Reserved].
2.6.5    Representations and Warranties. Borrower hereby covenants with, and
represents and warrants to Lender as of the Closing Date as follows:
(a)    The Interest Rate Cap Agreement constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, subject only to applicable bankruptcy, insolvency and similar laws
affecting rights of creditors generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(b)    The Rate Cap Collateral is free and clear of all claims or security
interests of every nature whatsoever, except for Permitted Liens and such claims
and security interests as are created pursuant to this Agreement and the other
Loan Documents, and Borrower has the right to pledge and grant a security
interest in the same as herein provided without the consent of any other Person
other than any such consent that has been obtained and is in full force and
effect.
(c)    The Rate Cap Collateral has been duly and validly pledged hereunder. All
consents and approvals required to be obtained by Borrower for the consummation
of the transactions contemplated by this Agreement have been obtained.
(d)    Giving effect to the aforesaid grant and assignment to Lender, Lender
has, as of the date of this Agreement, and as to Rate Cap Collateral acquired
from time to time after such date, shall have, a valid, and upon proper filing,
perfected and continuing first priority lien upon and security interest in the
Rate Cap Collateral, except for Permitted Liens and such claims and security
interests as are created pursuant to this Agreement and the other Loan
Documents; provided that no representation or warranty is made with respect to
the perfected status of the security interest of Lender in the proceeds of Rate
Cap Collateral consisting of “cash proceeds” or “non-cash proceeds” as defined
in the UCC except if, and to the extent, the provisions of Section 9-306 of the
UCC shall be complied with.
(e)    Except for financing statements filed or to be filed in favor of Lender
as secured party, there are no financing statements under the UCC covering any
or all of the Rate Cap Collateral and Borrower shall not, without the prior
written consent of Lender, until

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payment in full of all of the Obligations, execute and file in any public
office, any enforceable financing statement or statements covering any or all of
the Rate Cap Collateral, except financing statements filed or to be filed in
favor of Lender as secured party.
2.6.6    Payments. If Borrower at any time shall be entitled to receive any
payments with respect to the Interest Rate Cap Agreement, such amounts shall,
immediately upon becoming payable to Borrower, be deposited by Counterparty into
the Cash Management Account.
2.6.7    Remedies. Subject to the provisions of the Interest Rate Cap Agreement,
if an Event of Default shall occur and then be continuing:
(a)    Lender, without obligation to resort to any other security, right or
remedy granted under any other agreement or instrument, shall have the right to,
in addition to all rights, powers and remedies of a secured party pursuant to
the UCC, at any time and from time to time, sell, resell, assign and deliver, in
its sole discretion, any or all of the Rate Cap Collateral (in one or more
parcels and at the same or different times) and all right, title and interest,
claim and demand therein and right of redemption thereof, at public or private
sale, for cash, upon credit or for future delivery, and in connection therewith
Lender may grant options and may impose reasonable conditions such as requiring
any purchaser to represent that any “securities” constituting any part of the
Rate Cap Collateral are being purchased for investment only, Borrower hereby
waiving and releasing any and all equity or right of redemption to the fullest
extent permitted by the UCC or applicable law. If all or any of the Rate Cap
Collateral is sold by Lender upon credit or for future delivery, Lender shall
not be liable for the failure of the purchaser to purchase or pay for the same
and, in the event of any such failure, Lender may resell such Rate Cap
Collateral. It is expressly agreed that Lender may exercise its rights with
respect to less than all of the Rate Cap Collateral, leaving unexercised its
rights with respect to the remainder of the Rate Cap Collateral, provided,
however, that such partial exercise shall in no way restrict or jeopardize
Lender’s right to exercise its rights with respect to all or any other portion
of the Rate Cap Collateral at a later time or times.
(b)    Lender may exercise, either by itself or by its nominee or designee, in
the name of Borrower, all of Lender’s rights, powers and remedies in respect of
the Rate Cap Collateral, hereunder and under law.
(c)    Borrower hereby irrevocably, in the name of Borrower or otherwise,
authorizes and empowers Lender and assigns and transfers unto Lender, and
constitutes and appoints Lender its true and lawful attorney-in-fact, and as its
agent, irrevocably, with full power of substitution for Borrower and in the name
of Borrower, (i) to exercise and enforce every right, power, remedy, authority,
option and privilege of Borrower under the Interest Rate Cap Agreement,
including any power to subordinate or modify the Interest Rate Cap Agreement
(but not, unless an Event of Default exists and is continuing, the right to
terminate or cancel the Interest Rate Cap Agreement), or to give any notices, or
to take any action resulting in such subordination, termination, cancellation or
modification and (ii) in order to more fully vest in Lender the rights and
remedies provided for herein, to exercise all of the rights, remedies and powers
granted to Lender in this Agreement, and Borrower further authorizes and
empowers Lender, as Borrower’s attorney-in-fact, and as its agent, irrevocably,
with full power of substitution for Borrower and in the name of Borrower, to
give any authorization, to furnish any information, to make any demands, to
execute any instruments and to take any and all other

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action on behalf of and in the name of Borrower which in the opinion of Lender
may be necessary or appropriate to be given, furnished, made, exercised or taken
under the Interest Rate Cap Agreement, in order to comply therewith, to perform
the conditions thereof or to prevent or remedy any default by Borrower
thereunder or to enforce any of the rights of Borrower thereunder. These
powers-of-attorney are irrevocable and coupled with an interest, and any similar
or dissimilar powers heretofore given by Borrower in respect of the Rate Cap
Collateral to any other Person are hereby revoked.
(d)    Lender may, without notice to, or assent by, Borrower or any other Person
(to the extent permitted by law), but without affecting any of the Obligations,
in the name of Borrower or in the name of Lender, notify the Counterparty, or if
applicable, any other counterparty to the Interest Rate Cap Agreement, to make
payment and performance directly to Lender; extend the time of payment and
performance of, compromise or settle for cash, credit or otherwise, and upon any
terms and conditions, any obligations owing to Borrower, or claims of Borrower,
under the Interest Rate Cap Agreement; file any claims, commence, maintain or
discontinue any actions, suits or other proceedings deemed by Lender necessary
or advisable for the purpose of collecting upon or enforcing the Interest Rate
Cap Agreement; and execute any instrument and do all other things deemed
necessary and proper by Lender to protect and preserve and realize upon the Rate
Cap Collateral and the other rights contemplated hereby.
(e)    Pursuant to the powers-of-attorney provided for above, Lender may take
any action and exercise and execute any instrument which it may deem necessary
or advisable to accomplish the purposes hereof; provided, however, that Lender
shall not be permitted to take any action pursuant to said power-of-attorney
that would conflict with any limitation on Lender’s rights with respect to the
Rate Cap Collateral. Without limiting the generality of the foregoing, Lender,
after the occurrence of an Event of Default, shall have the right and power to
receive, endorse and collect all checks and other orders for the payment of
money made payable to Borrower representing: (i) any payment of obligations owed
pursuant to the Interest Rate Cap Agreement, (ii) interest accruing on any of
the Rate Cap Collateral or (iii) any other payment or distribution payable in
respect of the Rate Cap Collateral or any part thereof, and for and in the name,
place and stead of Borrower, to execute endorsements, assignments or other
instruments of conveyance or transfer in respect of any property which is or may
become a part of the Rate Cap Collateral hereunder.
(f)    Lender may exercise all of the rights and remedies of a secured party
under the UCC.
(g)    Without limiting any other provision of this Agreement or any of
Borrower’s rights hereunder, and without waiving or releasing Borrower from any
obligation or default hereunder, Lender shall have the right, but not the
obligation, to perform any act or take any appropriate action, as it, in its
reasonable judgment, may deem necessary to protect the security of this
Agreement, to cure such Event of Default or to cause any term, covenant,
condition or obligation required under this Agreement or the Interest Rate Cap
Agreement to be performed or observed by Borrower to be promptly performed or
observed on behalf of Borrower. All amounts advanced by, or on behalf of, Lender
in exercising its rights under this Section 2.6.7(g) (including, but not limited
to, reasonable legal expenses and disbursements incurred in connection
therewith), together with interest thereon at the Default Rate from the date of
each such advance, shall be payable by Borrower to Lender upon demand and shall
be secured by this Agreement.

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2.6.8    Sales of Rate Cap Collateral. No demand, advertisement or notice, all
of which are, to the fullest extent permitted by law, hereby expressly waived by
Borrower, shall be required in connection with any sale or other disposition of
all or any part of the Rate Cap Collateral, except that Lender shall give
Borrower at least thirty (30) Business Days’ prior written notice of the time
and place of any public sale or of the time when and the place where any private
sale or other disposition is to be made, which notice Borrower hereby agrees is
reasonable, all other demands, advertisements and notices being hereby waived.
To the extent permitted by law, Lender shall not be obligated to make any sale
of the Rate Cap Collateral if it shall determine not to do so, regardless of the
fact that notice of sale may have been given, and Lender may without notice or
publication adjourn any public or private sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. Upon each private sale of the Rate Cap Collateral of a type
customarily sold in a recognized market and upon each public sale, unless
prohibited by any applicable statute which cannot be waived, Lender (or its
nominee or designee) may purchase any or all of the Rate Cap Collateral being
sold, free and discharged from any trusts, claims, equity or right of redemption
of Borrower, all of which are hereby waived and released to the extent permitted
by law, and may make payment therefor by credit against any of the Obligations
in lieu of cash or any other obligations. In the case of all sales of the Rate
Cap Collateral, public or private, Borrower shall pay all reasonable costs and
expenses of every kind for sale or delivery, including brokers’ and attorneys’
fees and disbursements and any tax imposed thereon. However, the proceeds of
sale of Rate Cap Collateral shall be available to cover such costs and expenses,
and, after deducting such costs and expenses from the proceeds of sale, Lender
shall apply any residual to the payment of the Obligations in the order of
priority as set forth in this Agreement.
2.6.9    Public Sales Not Possible. Borrower acknowledges that the terms of the
Interest Rate Cap Agreement may prohibit public sales, that the Rate Cap
Collateral may not be of the type appropriately sold at public sales, and that
such sales may be prohibited by law. In light of these considerations, Borrower
agrees that private sales of the Rate Cap Collateral shall not be deemed to have
been made in a commercially unreasonably manner by mere virtue of having been
made privately.
2.6.10    Receipt of Sale Proceeds. Upon any sale of the Rate Cap Collateral by
Lender hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt by Lender or the officer
making the sale or the proceeds of such sale shall be a sufficient discharge to
the purchaser or purchasers of the Rate Cap Collateral so sold, and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to Lender or such officer or be answerable
in any way for the misapplication or non-application thereof.
2.6.11    Replacement Interest Rate Cap Agreement. If, in connection with
Borrower’s exercise of any Extension Option pursuant to Section 2.7, Borrower
delivers a Replacement Interest Rate Cap Agreement, all the provisions of this
Section 2.6 applicable to the Interest Rate Cap Agreement delivered on the
Closing Date shall be applicable to the Replacement Interest Rate Cap Agreement.
Section 2.7    Extension Options.
2.7.1    Extension Options. Borrower shall have the option (the “First Extension
Option”), by written notice (the “First Extension Notice”) delivered to Lender
(which notice

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may be revoked) no later than thirty (30) days prior to the Stated Maturity
Date, to extend the Maturity Date to September 9, 2017 (the “First Extended
Maturity Date”). In the event Borrower shall have exercised the First Extension
Option, Borrower shall have the option (the “Second Extension Option”), by
written notice (the “Second Extension Notice”) delivered to Lender (which notice
may be revoked) no later than thirty (30) days prior to the First Extended
Maturity Date, to extend the First Extended Maturity Date to September 9, 2018
(the “Second Extended Maturity Date”). In the event Borrower shall have
exercised the Second Extension Option, Borrower shall have the option (the
“Third Extension Option”), by written notice (the “Third Extension Notice”)
delivered to Lender (which notice may be revoked) no later than thirty (30) days
prior to the Second Extended Maturity Date, to extend the Second Extended
Maturity Date to September 9, 2019 (the “Third Extended Maturity Date”).
Borrower’s right to so extend the applicable Maturity Date shall be subject to
the satisfaction of the following conditions precedent prior to each extension
hereunder:
(a)    no Event of Default shall have occurred and be continuing on the
applicable Extension Date;
(b)    Borrower shall (i) obtain and deliver to Lender not later than the first
day of the term of the Loan as extended, one or more Replacement Interest Rate
Cap Agreements from an Approved Counterparty, in a notional amount equal to the
Outstanding Principal Balance, which Replacement Interest Rate Cap Agreement(s)
shall be (A) effective for the period commencing on the Business Day immediately
following the then applicable Maturity Date (prior to giving effect to the
applicable Extension Option) and ending on the last day of the Interest Period
in which the applicable extended Maturity Date occurs and (B) otherwise on same
terms set forth in Section 2.6 and at the applicable Strike Price and (ii)
execute and deliver an Acknowledgement with respect to each such Replacement
Interest Rate Cap Agreement;
(c)    the Debt Yield as of the most recent Calculation Date is at least equal
to or greater than the Closing Date Debt Yield;
(d)    Borrower shall deliver a Counterparty Opinion with respect to the
Replacement Interest Rate Cap Agreement and the related Acknowledgment and shall
deliver to Lender an executed Collateral Assignment of Interest Rate Protection
Agreement;
(e)    All amounts due and payable by Borrower and any other Person pursuant to
this Agreement or the other Loan Documents as of the Stated Maturity Date, the
First Extended Maturity Date, and the Second Extended Maturity Date, as
applicable, and all reasonable, out-of-pocket costs and expenses of Lender,
including fees and expenses of Lender’s counsel, in connection with the Loan
and/or the applicable extension of the Term shall have been paid in full.
If Borrower is unable to satisfy all of the foregoing conditions within the
applicable time frames for each, Lender shall have no obligation to extend the
Maturity Date hereunder.
2.7.2    Extension Documentation. As soon as practicable following an extension
of the Maturity Date pursuant to this Section 2.7, Borrower shall, if requested
by Lender, execute and deliver an amendment of and/or restatement of the Note
and shall, if requested by Lender, enter into such amendments to the related
Loan Documents as may be necessary or appropriate to evidence the extension of
the Maturity Date as provided in this Section 2.7; provided, however,

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that no failure by Borrower to enter into any such amendments and/or
restatements shall affect the rights or obligations of Borrower or Lender with
respect to the extension of the Maturity Date.
Section 2.8    Spread Maintenance Premium. Upon any repayment or prepayment of
the Loan (including in connection with an acceleration of the Loan but excluding
in connection with any mandatory prepayment pursuant to Section 2.4.3(a) (except
where such prepayment arises as a result of a Voluntary Action) or Section
2.4.3(c)) made prior to the Spread Maintenance Date, Borrower shall pay to
Lender on the date of such repayment or prepayment (or acceleration of the Loan)
the Spread Maintenance Premium applicable thereto. All Spread Maintenance
Premium payments hereunder shall be deemed to be earned by Lender upon the
funding of the Loan.
Section 2.9    Increased Costs. If as a result of any Regulatory Change or
compliance of Lender therewith, the basis of taxation of payments to Lender or
any company in Control of Lender of the principal of or interest on the Loan is
changed or Lender or the company in Control of Lender shall be subject to (i)
any Tax (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b)
through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes)
on its loans, loan principal, letters of credit, commitments, or other
obligations, or its deposits, reserves, other liabilities or capital
attributable thereto; or (ii) any reserve, special deposit or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities, of Lender or any company in Control of
Lender is imposed, modified or deemed applicable; or (iii) any other condition
(other than Taxes) affecting loans to borrowers subject to LIBOR-based interest
rates is imposed on Lender or any company in Control of Lender and Lender
determines that, by reason thereof, the cost to Lender or any company in Control
of Lender of making, maintaining or extending the Loan to Borrower is increased,
or any amount receivable by Lender or any company in Control of Lender hereunder
in respect of any portion of the Loan to Borrower is reduced, in each case by an
amount deemed by Lender in good faith to be material (such increases in cost and
reductions in amounts receivable being herein called “Increased Costs”), then
Lender shall provide notice thereof to Borrower and Borrower agrees that it will
pay to Lender upon Lender’s written request such additional amount or amounts as
will compensate Lender or any company in Control of Lender for such Increased
Costs to the extent Lender determines that such Increased Costs are allocable to
the Loan. If Lender requests compensation under this Section 2.9.1, Lender
shall, if requested by notice by Borrower to Lender, furnish to Borrower a
statement setting forth the basis for requesting such compensation and the
method for determining the amount thereof.
Section 2.10    Taxes.
2.10.1    Defined Terms. For purposes of this Section 2.10, the term “applicable
law” includes FATCA.
2.10.2    Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Loan Party) requires the deduction or withholding of any Tax from any such
payment by a Loan Party, then the applicable Loan Party shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
law

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and, if such Tax is an Indemnified Tax, then the sum payable by the applicable
Loan Party shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section 2.10) Lender receives an amount
equal to the sum it would have received had no such deduction or withholding
been made.
2.10.3    Payment of Other Taxes by Borrower. The Loan Parties shall timely pay
to the relevant Governmental Authority in accordance with applicable law any
Other Taxes.
2.10.4    Indemnification by the Loan Parties. The Loan Parties shall indemnify
Lender, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.10) payable or paid by
Lender or required to be withheld or deducted from a payment to Lender and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to Borrower by Lender shall be conclusive absent manifest
error.
2.10.5    Evidence of Payments. As soon as practicable after any payment of
Taxes by any Loan Party to a Governmental Authority pursuant to this Section
2.10, such Loan Party shall deliver to Lender the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Lender.
2.10.6    Status of Lender.
(a)    If Lender is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document then Lender shall
deliver to Borrower, at the time or times reasonably requested by Borrower, such
properly completed and executed documentation reasonably requested by Borrower
as will permit such payments to be made without withholding or at a reduced rate
of withholding. In addition, Lender, if reasonably requested by Borrower, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by Borrower as will enable Borrower to determine whether or not Lender
is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.10.6(b)(i), (b)(ii) and (b)(iv) below)
shall not be required if in Lender’s reasonable judgment such completion,
execution or submission would subject Lender to any material unreimbursed cost
or expense or would materially prejudice the legal or commercial position of
Lender.
(b)    Without limiting the generality of the foregoing,
(i)    If Lender is a U.S. Person it shall deliver to Borrower (in such number
of copies as shall be reasonably requested by Borrower) on or prior to the date
on which such Lender becomes the Lender under this Agreement (and from time to
time thereafter upon the reasonable request of Borrower), executed originals of
IRS Form W-9 certifying that Lender is exempt from U.S. federal backup
withholding tax;

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(ii)    If Lender is a Foreign Lender it shall, to the extent it is legally
entitled to do so, deliver to Borrower (in such number of copies as shall be
reasonably requested by Borrower) on or prior to the date on which it becomes
the Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Borrower), whichever of the following is applicable:
(A)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;
(B)    executed originals of IRS Form W-8ECI;
(C)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) or 871(h) of the Code, (x) a
certificate substantially in the form of Exhibit F-1 to the effect that such
Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)
executed originals of IRS Form W-8BEN; or
(D)    to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or
Exhibit F-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on
behalf of each such direct and indirect partner;
(iii)    any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to Borrower (in such number of copies as shall be reasonably
requested by Borrower) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Borrower), executed originals of any other form prescribed
by applicable law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary
documentation as may be prescribed by applicable law to permit Borrower to
determine the withholding or deduction required to be made; and
(iv)    if a payment made to Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if Lender were to fail to

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comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), Lender
shall deliver to Borrower at the time or times prescribed by law and at such
time or times reasonably requested by Borrower such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by Borrower as may be
necessary for Borrower to comply with its obligations under FATCA and to
determine that Lender has complied with Lender’s obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.
Lender agrees that if any form or certification it previously delivered expires
or becomes obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify Borrower in writing of its legal inability to
do so.
2.10.7    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.10 (including by
the payment of additional amounts pursuant to this Section 2.10), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this Section 2.10.7 (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this Section 2.10.7, in no event will the indemnified party be required to
pay any amount to an indemnifying party pursuant to this Section 2.10.7 the
payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the Tax
subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Tax had never been paid. This Section 2.10.7 shall
not be construed to require any indemnified party to make available its Tax
returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.
2.10.8    Survival. Each party’s obligations under this Section 2.10 shall
survive any assignment of rights by, or the replacement of, a Lender and the
repayment, satisfaction or discharge of all obligations under any Loan Document.
ARTICLE 3

REPRESENTATIONS AND WARRANTIES
Section 3.1    General Representations. Borrower represents and warrants to
Lender as of the Closing Date, and with respect to any Borrower TRS as of the
date of the formation of such Borrower TRS and delivery of a Borrower TRS
Guaranty and Loan Documents hereunder,

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that, except to the extent (if any) disclosed on Schedule III with reference to
a specific subsection of this Section 3.1:
3.1.1    Organization; Special Purpose. Each Loan Party has been duly organized
and is validly existing with requisite power and authority to own its properties
and to transact the businesses in which it is now engaged. Each Loan Party is
duly qualified to do business and in good standing in each jurisdiction where it
is required to be so qualified in connection with its properties, businesses and
operations, except to the extent that failure to do so would not reasonably be
expected to have a Material Adverse Effect. Each Loan Party possesses all
rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses in
which it is now engaged, except to the extent that failure to do so could not in
the aggregate reasonably be expected to have a Material Adverse Effect. The sole
business of Borrower is the acquisition, ownership, maintenance, sale, transfer,
financing, refinancing, management, leasing and operation of the Properties and
other activity in furtherance thereof; and the sole business of Equity Owner is
acting as the sole member of Borrower and other activity in furtherance thereof,
including, providing the Equity Owner Guaranty and the Equity Owner Security
Agreement; and the sole business of any Borrower TRS is the acquisition,
ownership, maintenance, sale, transfer, financing, refinancing, management,
leasing and operation of the Properties and other activity in furtherance
thereof, including, providing the Borrower TRS Guaranty and the Borrower TRS
Security Agreement. Each Loan Party is a Special Purpose Bankruptcy Remote
Entity.
3.1.2    Proceedings; Enforceability. Each Loan Party has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and each of the other Loan Documents to which it is a party. This Agreement and
the other Loan Documents have been duly authorized, executed and delivered by or
on behalf of each Loan Party party thereto and constitute legal, valid and
binding obligations of each Loan Party party thereto, enforceable against each
such Loan Party party thereto in accordance with their respective terms, subject
only to applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law). The Loan Documents
are not subject to any right of rescission, set-off, counterclaim or defense by
any Loan Party including the defense of usury, nor would the operation of any of
the terms of the Loan Documents, or the exercise of any right thereunder, render
the Loan Documents unenforceable, and no Loan Party has asserted any right of
rescission, set-off, counterclaim or defense with respect thereto.
3.1.3    No Conflicts. The execution, delivery and performance of this Agreement
and the other Loan Documents by each Loan Party party thereto (i) will not
contravene such Loan Party’s Constituent Documents, (ii) will not result in any
material violation of the provisions of any Legal Requirement of any
Governmental Authority having jurisdiction over any Loan Party or any of each
Loan Party’s properties or assets, (iii) with respect to each Loan Party, will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under the terms of any indenture, mortgage, deed of trust,
deed to secure debt, loan agreement, management agreement or other agreement or
instrument to which any Loan Party is a party or to, which any of each Loan
Party’s property or assets is subject, that would be reasonably expected to have
a Material Adverse Effect and (iv) with respect to each Loan Party, except for
Liens created under the Loan Documents, result in or require the creation or
imposition of any

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Lien upon or with respect to any of the assets of any Loan Party. Any consent,
approval, authorization, order, registration or qualification of or with any
such Governmental Authority required for the execution, delivery and performance
by each Loan Party of this Agreement or any other Loan Documents to which it is
a party has been obtained and is in full force and effect.
3.1.4    Litigation. There are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority or other entity now pending or,
to the actual knowledge of a Responsible Officer of any Loan Party, threatened,
against or affecting any Loan Party or Manager, as applicable, which actions,
suits or proceedings (i) involve this Agreement, the Mortgage Documents, the
Loan Documents or the transactions contemplated thereby or (ii) if adversely
determined, would reasonably be expected to have a Material Adverse Effect.
There are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other entity that resulted in a judgment against any
Loan Party that has not been paid in full that would otherwise constitute an
Event of Default under Section 8.1.
3.1.5    Agreements. No Loan Party is a party to any agreement or instrument or
subject to any restriction which would reasonably be expected to have a Material
Adverse Effect. No Loan Party is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party which default would reasonably be
expected to have a Material Adverse Effect. Other than the Loan Documents, no
Loan Party has a material financial obligation under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which any Loan
Party is a party other than, with respect to Borrower, the Management Agreement.
3.1.6    Consents. No consent, approval, authorization or order of any court or
Governmental Authority is required for the execution, delivery and performance
by any Loan Party of, or compliance by any Loan Party with, this Agreement or
the other Loan Documents or the consummation of the transactions contemplated
hereby and thereby, other than those which have been obtained by the applicable
Loan Party.
3.1.7    Solvency. Each Loan Party has (a) not entered into the transaction
contemplated by this Agreement nor executed any Loan Document with the actual
intent to hinder, delay or defraud any creditor and (b) received reasonably
equivalent value in exchange for its obligations under the Loan Documents. After
giving effect to the Loans, each Loan Party is Solvent. No petition in
bankruptcy has been filed against any Loan Party, and no Loan Party has made an
assignment for the benefit of creditors or taken advantage of any insolvency act
for the benefit of debtors. No Loan Party is contemplating either the filing of
a petition by it under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of such Person’s assets or property, and
to the actual knowledge of any Loan Party, no Person is contemplating the filing
of any such petition against any Loan Party.
3.1.8    Employee Benefit Matters. Assuming no portion of the assets used by
Lender to fund the Loan constitutes the assets of an ERISA Plan, the assets of
each Loan Party do not constitute “plan assets” of (a) any “employee benefit
plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA,
(b) any “plan” (as defined in Section 4975 of the Code) that is subject to
Section 4975 of the Code or (c) any governmental plan or church plan that is not
subject to Title I of ERISA or Section 4975 of the Code but is subject to any
law, rule or regulation applicable to such Loan Party which is substantially
similar to the prohibited transaction provisions of Section 406 of ERISA or
Section 4975 of the Code (each of (a), (b) and

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(c), an “ERISA Plan”) with the result that the transactions contemplated by this
Agreement, including, but not limited to, the exercise by Lender of any rights
under the Loan Documents will constitute a non-exempt prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the Code. No Loan
Party or any of its ERISA Affiliates sponsors, maintains or is required to
contribute to, or has, within the preceding six calendar years, sponsored,
maintained or been required to contribute to, any Plans or Foreign Plans. No
Loan Party or any of their respective Subsidiaries has any employees.
3.1.9    Compliance with Legal Requirements. Each Loan Party is in compliance
with all applicable Legal Requirements, except to the extent that any
noncompliance would not reasonably be expected to have a Material Adverse
Effect. No Loan Party is in default or violation of any order, writ, injunction,
decree or demand of any Governmental Authority, except for any default or
violation that would not reasonably be expected to have a Material Adverse
Effect.
3.1.10    Perfection Representations.
(a)    The Borrower Security Agreement, the Equity Owner Security Agreement and
any Borrower TRS Security Agreement create valid and continuing security
interests (as defined in the applicable UCC) in the personal property Collateral
in favor of Lender, which security interests are prior to all other Liens
arising under the UCC, subject to Permitted Liens, and are enforceable as such
against creditors of each Loan Party, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity);
(b)    All appropriate financing statements have been filed in the proper filing
office in the appropriate jurisdictions under applicable law in order to perfect
the security interest granted to Lender hereunder in the Collateral that may be
perfected by filing a financing statement;
(c)    Other than the security interest granted to Lender pursuant to Borrower
Security Agreement, the Equity Owner Security Agreement and any Borrower TRS
Security Agreement, no Loan Party has pledged, assigned, collaterally assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Collateral except to the extent expressly permitted by the terms hereof. No Loan
Party has authorized the filing of and is not aware of any financing statements
against any Loan Party that include a description of the Collateral other than
any financing statement relating to the security interest granted to Lender
hereunder or that has been terminated.
(d)    No instrument or document that constitutes or evidences any Collateral
has any marks or notations indicating that such Collateral has been pledged,
assigned or otherwise conveyed to any Person other than Lender.
(e)    The grant of the security interest in the Collateral by each Loan Party
to Lender, pursuant to Borrower Security Agreement, the Equity Owner Security
Agreement and any Borrower TRS Security Agreement is in the ordinary course of

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business for each Loan Party and is not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction.     
(f)    The chief executive office and the location of each Loan Party’s records
regarding the Collateral are listed on Schedule VII. Except as otherwise
disclosed to Lender in writing, each Loan Party’s legal name is as set forth in
this Agreement, each Loan Party has not changed its name since its formation.
Except as otherwise listed on Schedule VII, each Loan Party does not have
tradenames, fictitious names, assumed names or “doing business as” names and
each Loan Party’s federal employer identification number and organizational
identification number is set forth on Schedule VII.
(g)    Borrower is a limited liability company, and the jurisdiction in which
Borrower is organized is Delaware. Borrower’s Tax I.D. number is 90-0841489 and
Borrower’s Delaware Organizational I.D. number is 5504907.
3.1.11    Business. Since its formation, no Loan Party has conducted any
business other than entering into and performing its obligations under the Loan
Documents to which it is a party and as described on Schedule IV. Since the date
of formation of each Loan Party, no event has occurred which would reasonably be
expected to have a Material Adverse Effect. As of the date hereof, no Loan Party
owns or holds, directly or indirectly (i) any capital stock or equity security
of, or any equity interest in, any Person other than a Loan Party, except as set
forth on Schedule VIII or (ii) any debt security or other evidence of
indebtedness of any Person, except for Permitted Investments and as otherwise
contemplated by the Loan Documents. Borrower does not have any subsidiaries and
no Borrower TRS has any subsidiaries.
3.1.12    Management. The ownership, leasing, management and collection
practices used by each Loan Party and Manager with respect to the Properties
have been, to the actual knowledge of the Responsible Officers of each Loan
Party, in compliance with all applicable Legal Requirements, and all necessary
licenses, permits and regulatory requirements pertaining thereto have been
obtained and remain in full force and effect, except to the extent that failure
to comply with Legal Requirements or obtain such licenses, permits and
regulatory requirements would not reasonably be expected to have a Material
Adverse Effect. The Management Agreement is in full force and effect and there
is no default thereunder by any party thereto and no event has occurred that,
with the passage of time and/or the giving of notice would constitute a default
thereunder.
3.1.13    Financial Information. All financial data with respect to any Loan
Property or Property that has been delivered to Lender by or on behalf of any
Loan Party in connection with the Loan (i) are true, complete and correct in all
material respects (or, to the extent that any such financial data was incorrect
in any material respect when delivered, the same has been corrected by financial
data subsequently delivered to Lender prior to the date hereof), (ii) accurately
represent the financial condition of the Properties as of the date of such
reports, and (iii) have been prepared in accordance with GAAP throughout the
periods covered, except as disclosed therein. The foregoing representation shall
not apply to any such financial data that constitutes projections, provided that
Borrower represents and warrants that such projections were made in good faith
and that Borrower has no reason to believe that such projections were materially
inaccurate. Borrower does not have any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable

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commitments that are known to Borrower and would be reasonably expected to have
a material adverse effect on the Properties or the operation thereof, except as
referred to or reflected in said financial statements. Borrower has no
liabilities or other obligations that arose or accrued prior to the date hereof
that would reasonably be expected to have a Material Adverse Effect. Borrower
has no known contingent liabilities.
3.1.14    Insurance. Borrower has obtained and delivered to Lender certificates
evidencing the Policies required to be maintained under Section 5.1.1. All such
Policies are in full force and effect, with all premiums prepaid thereunder. No
claims have been made that are currently pending, outstanding or otherwise
remain unsatisfied under any such Policies that would reasonably be expected to
have a Material Adverse Effect. With respect to any Policy, neither Borrower
nor, to Borrower’s or Manager’s knowledge, any other Person, has done, by act or
omission, anything which would impair the coverage of any of the Policies in any
material respect.
3.1.15    Tax Filings. Each Loan Party has filed, or caused to be filed, on a
timely basis all Tax returns (including, without limitation, all foreign,
federal, state, local and other Tax returns) required to be filed by it, is not
liable for Non-Property Taxes payable by any other Person and has paid or made
adequate provisions for the payment of all Non-Property Taxes (to the extent
such Taxes, assessment and other governmental charges exceed $100,000 in the
aggregate) payable by such Loan Party except as permitted by Section 4.1.3 or
4.4.7. All material recording or other similar taxes required to be paid by any
Loan Party under applicable Legal Requirements currently in effect in connection
with the execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents have been paid.
3.1.16    Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of purchasing or acquiring any “margin stock” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(“Margin Stock”) or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements in any material respects or by the
terms and conditions of this Agreement or the other Loan Documents. None of the
Collateral is comprised of Margin Stock and less than 25% of the assets of each
Loan Party are comprised of Margin Stock.
3.1.17    Organizational Chart. The organizational chart attached as Schedule
II, relating to the Loan Parties and certain Affiliates and other parties, is
true, complete and correct on and as of the date hereof. No Person other than
those Persons shown on Schedule II has any ownership interest in, or right of
control, directly or indirectly, in Borrower or any other Loan Party.
3.1.18    Bank Holding Company. Borrower is not a “bank holding company” or a
direct or indirect subsidiary of a “bank holding company” as defined in the Bank
Holding Company Act of 1956, as amended, and Regulation Y thereunder of the
Board of Governors of the Federal Reserve System.
3.1.19    FIRPTA. No Loan Party is a “foreign person” within the meaning of
Section 1445(f)(3) of the Code.

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3.1.20    Investment Company Act. No Loan Party or any Person controlling such
Loan Party, including Sponsor, is required to register as an “investment
company” under the Investment Company Act of 1940, as amended.
3.1.21    Fiscal Year. Each fiscal year of Borrower commences on January 1.
3.1.22    Other Debt; Liens. No Loan Party has any Indebtedness other than, with
respect to Borrower, Permitted Indebtedness, and with respect to Equity Owner,
Guarantor’s Permitted Indebtedness, and with respect to each Borrower TRS,
Borrower TRS Permitted Indebtedness. 
3.1.23    Contracts.
(a)    Borrower has not (and no Borrower TRS has) entered into, and is not bound
by, any Major Contract which continues in existence, except those disclosed in
writing to Lender prior to the Closing Date.
(b)    Each of the Major Contracts is in full force and effect, there are no
material defaults by Borrower thereunder and, to the knowledge of Borrower,
there are no monetary or other material defaults thereunder by any other party
thereto. None of Borrower, Manager, any Affiliate of Borrower or any other
Person acting on Borrower’s behalf has given or received any notice of default
under any of the Major Contracts that remains uncured or in dispute.
(c)    Borrower has delivered copies of the Major Contracts (including all
amendments and supplements thereto) to Lender that are true, correct and
complete in all material respects.
(d)    Except for the Manager under the Management Agreement, no Major Contract
has as a party an Affiliate of Borrower. All fees and other compensation for
services previously performed under the Management Agreement have been paid in
full.
3.1.24    Full and Accurate Disclosure. All information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of each
Loan Party to Lender in connection with the negotiation, preparation or delivery
of this Agreement and the other Loan Documents or included herein or therein or
delivered pursuant hereto or thereto (but excluding any projections, forward
looking statements, budgets, estimates and general market data as to which each
Loan Party only represents and warrants that such information was prepared in
good faith based upon assumptions believed by it to be reasonable at the time),
when taken as a whole, as of the date furnished, do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not materially misleading.
3.1.25     Illegal Activity. None of the Properties has been purchased with
proceeds of any illegal activity.
3.1.26    Patriot Act. No Loan Party nor any owner of a direct interest in any
Loan Party (i) is listed on any Government Lists, (ii) is a person who has been
determined by competent authority to be subject to the prohibitions contained in
Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar
prohibitions contained in the rules and regulations of OFAC

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or in any enabling legislation or other Presidential Executive Orders in respect
thereof, (iii) has been previously indicted for or convicted of any felony
involving a crime or crimes of moral turpitude or for any Patriot Act Offense,
or (iv) is currently under investigation by any Governmental Authority for
alleged criminal activity. For purposes hereof, the term “Patriot Act Offense”
means any violation of the criminal laws of the United States of America or of
any of the several states, or that would be a criminal violation if committed
within the jurisdiction of the United States of America or any of the several
states, relating to terrorism or the laundering of monetary instruments,
including any offense under (A) the criminal laws against terrorism; (B) the
criminal laws against money laundering, (C) the Bank Secrecy Act, as amended,
(D) the Money Laundering Control Act of 1986, as amended, or (E) the Patriot
Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or
aiding and abetting another to commit, a Patriot Act Offense.
Section 3.2    Property Representations. Borrower represents and warrants to
Lender with respect to each Property as follows:
3.2.1    Property/Title.
(a)    Borrower has (i) if the Property is located in Texas, good and marketable
fee simple legal and equitable title to the real property comprising the
Property, subject to Permitted Liens and (ii) if the Property is not located in
Texas, good and marketable fee simple legal and equitable title to the real
property comprising the Property, subject to Permitted Liens. The Mortgage
Documents, when properly recorded and/or filed in the appropriate records, will
create (i) a valid, first priority, perfected Lien on Borrower’s interest in the
Property, subject only to the Permitted Liens, and (ii) perfected security
interests in and to, and perfected collateral assignments of, all personalty
(including the Leases), all in accordance with the terms thereof, in each case
subject only to the Permitted Liens. The Permitted Liens with respect to the
Property, in the aggregate, do not have a material adverse effect on the
profitability, value, use or operation of the Property or the enforceability,
validity or perfection of the lien of the applicable Mortgage.
(b)    All transfer taxes, deed stamps, intangible taxes or other amounts in the
nature of transfer taxes required to be paid under applicable Legal Requirements
in connection with the transfer of the Property to Borrower have been paid or
are being paid simultaneously herewith. All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid under applicable Legal
Requirements in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Mortgage Documents with
respect to such Property, including the Mortgages, have been paid or are being
paid simultaneously herewith. All taxes and governmental assessments due and
owing in respect of the Property have been paid, or an escrow of funds in an
amount sufficient to cover such payments has been established hereunder or are
insured against by the Title Insurance Policy and the Title Insurance Owner’s
Policy for such Property.
(c)    Each Property is comprised of one (1) or more parcels which constitute
separate tax lots and do not constitute a portion of any other tax lot not a
part of such Property. Each Property is comprised of one (1) or more separate
legal parcels and no portion of any Property constitutes a portion of any legal
parcel not a part of such Property.
3.2.2    Adverse Claims. Borrower’s ownership of the Property is free and clear
of any Liens other than Permitted Liens.

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3.2.3    Title Insurance Owner’s Policy. The Property File for the Property
includes either (i) a Title Insurance Owner’s Policy insuring fee simple
ownership of such Property by Borrower in an amount equal to or greater than the
initial Allocated Loan Amount of the Property, issued by a Qualified Title
Insurance Company with no title exceptions other than Permitted Liens or (ii) a
marked or initialed binding commitment that is effective as a Title Insurance
Owner’s Policy in respect of such Property in an amount equal to or greater than
the initial Allocated Loan Amount of the Property, issued by a Qualified Title
Insurance Company with no title exceptions other than Permitted Liens, which
commitment shall be accompanied by such other affidavits, transfer declarations
and other documents as are necessary for the recordation of the deed for such
Property and issuance of such Title Insurance Owner’s Policy.
3.2.4    Deed. The Property File for the Property includes a copy of a deed for
such Property conveying the Property to Borrower, with vesting in the actual
name of Borrower with a certification from Borrower that such Property’s deed
has been recorded or presented to and accepted for recording by the applicable
Qualified Title Insurance Company issuing the related Title Insurance Owner’s
Policy or binding commitment referred to in Section 3.2.3, with all fees,
premiums and deed stamps and other transfer taxes paid.
3.2.5    Property File Required Documents. The Property File for the Property
includes (a) either (i) certified or file stamped (in each case by the
applicable land registry) original executed Mortgage Documents or (ii) a copy of
the Mortgage Documents in recordable form that have been submitted by the title
insurance company for recording in the jurisdiction in which such Property is
located (with Lender and Borrower acknowledging that the Mortgage Documents
delivered on the Closing Date consist solely of Mortgages (which include
Assignments of Leases and Rents and Fixture Filings as a part thereof), and that
no separate Assignments of Leases and Rents or Fixture Filings are included as
part of the Mortgage Documents delivered at the Closing Date), (b) an opinion of
counsel admitted to practice in the state in which such Property is located in
form and substance reasonably satisfactory to Lender in respect of the
enforceability of such Mortgage Documents and an opinion of counsel in form and
substance reasonably satisfactory to Lender stating that the Mortgage Documents
were duly authorized, executed and delivered by Borrower and that the execution
and delivery of such Mortgage Loan Documents and the performance by Borrower of
its obligations thereunder will not cause a breach of, or a default under,
specified material agreements, (c) either (x) a Title Insurance Policy insuring
the Lien of the Mortgage encumbering such Property, or (y) a marked or initialed
binding commitment that is effective as a Title Insurance Policy in respect of
such Property, in each case, issued by a Qualified Title Insurance Company with
no title exceptions other than Permitted Liens, which commitment shall be
accompanied by such other affidavits, transfer declarations and other documents
specified in such commitment as necessary for the issuance of such Title
Insurance Policy, and (d) evidence that all taxes, fees and other charges
payable in connection therewith have been paid in full.
3.2.6    Property File. The Property File for such Property has been delivered
to Lender and there is no Deficiency with respect to such Property File.
3.2.7    Property Taxes and Other Charges. There are no delinquent Property
Taxes or Other Charges outstanding with respect to the Property, other than
Property Taxes or Other Charges not yet due and payable that are being contested
in accordance with Section 4.4.8. There are no pending or, to Borrower’s or
Manager’s knowledge, proposed, special or other assessments for homeowner’s or
condominium owner’s association improvements affecting the

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Property that would reasonably be expected to have an Individual Material
Adverse Effect with respect to the Property.
3.2.8    Compliance with Renovation Standards. Except if the Property is a
Carry-Over Property, the Property satisfies the Renovation Standards and all
renovations thereto have been conducted in accordance with applicable Legal
Requirements, in all material respects.
3.2.9    Physical Condition. Subject to any Casualty that occurs after the date
hereof and is in the process of being restored in accordance with Section 5.4,
the Property is in a good, safe and habitable condition and repair, and free of
and clear of any damage or waste that has an Individual Material Adverse Effect
on the Property.
3.2.10    Brokers. There is no commission or other compensation payable to any
broker or finder in connection with the purchase of the Property by Borrower or
its Affiliate that has not been paid.
3.2.11    Leasing. Each Vacant Property was either (i) previously subject to an
Eligible Lease or (ii) with respect to a Carry-Over Property, occupied by a
Carry-Over Tenant. As of the Cut-Off Date, unless such Property is a Vacant
Property, or, in case of any Substitute Property, as of the date such Property
becomes a Substitute Property, either (i) the Property was leased by Borrower
pursuant to an Eligible Lease and each such lease was in full force and effect
and was not in default in any material respect or (ii) if the Property is a
Carry-Over Property, it was occupied by a Carry-Over Tenant. No Person (other
than the Borrower) has any possessory interest in the Property or right to
occupy the same except any Tenant under and pursuant to the provisions of the
applicable Lease and any Person claiming rights through any such Tenant. The
copy of such Eligible Lease in the Property File for the Property is true and
complete in all material respects and there are no material oral agreements with
respect thereto. No Rent has been paid more than thirty (30) days in advance of
its due date, other than Advance Rents held in the Cash Management Account. As
of the date hereof, any payments, free rent, partial rent, rebate of rent or
other payments, credits, allowances or abatements required to be given by
Borrower to the relevant Tenant has already been provided to such Tenant.
3.2.12    Insurance. The Property is covered by insurance in compliance with the
applicable requirements of Section 5.1.1 and neither Borrower or Manager has
taken (or omitted to take) any action that would be reasonably expected to
impair or invalidate the coverage provided by any such policies. As of the date
hereof, no claims have been made that are currently pending, outstanding or
otherwise remain unsatisfied under any such Policies and would reasonably be
expected to have an Individual Material Adverse Effect with respect to the
Property.
3.2.13    Lawsuits, Etc. There are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority or other entity pending or to the
actual knowledge of Borrower or Manager on the date hereof, threatened against
or affecting the Property, which actions, suits or proceedings would reasonably
be expected to have an Individual Material Adverse Effect on such Property.
3.2.14    Orders, Injunctions, Etc. There are no orders, injunctions, decrees or
judgments outstanding with respect to the Property that would reasonably be
expected to have an Individual Material Adverse Effect on such
Property.Agreements Relating to the Properties.

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Borrower is not a party to any agreement or instrument or subject to any
restriction of record which would reasonably be expected to have an Individual
Material Adverse Effect on such Property. Borrower has not received notice of a
default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which the Property is bound. Borrower does not have a material
financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument by which the Property is bound, other
than obligations under the Loan Documents. Borrower is not in default in any
material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Permitted Lien with
respect to any Property. Neither the Property nor any part thereof are subject
to any purchase options, rights of first refusal, rights of first offer or other
similar rights in favor of any Tenant or other third parties.
3.2.16    Accuracy of Information Regarding Property. All information with
respect to the Property included in the Property File and the Properties
Schedule is, with respect to the initial Property File and Properties Schedule
as of the Cut-Off Date and with respect to each subsequent delivery or update
thereof as of the date such information is required to be certified under the
Loan Documents (or if no such date is specified, as of the date of such delivery
or update), true, complete and accurate in all material respects.
3.2.17    Compliance with Legal Requirements. The Property (including the
leasing and intended use thereof) complies with all applicable Legal
Requirements, including, without limitation, building and zoning ordinances and
codes and all certifications, permits, licenses and approvals, including without
limitation, certificates of completion and occupancy permits, required for the
legal leasing, use, occupancy, habitability and operation of such Property,
except as would not reasonably be expected to have an Individual Material
Adverse Effect with respect to the Property. There is no consent, approval,
permit, license, order or authorization of, and no filing with or notice to, any
court or Governmental Authority required for the operation, use or leasing of
the Property that has not been obtained, except as would not reasonably be
expected to have an Individual Material Adverse Effect with respect to the
Property. There has not been committed by Borrower or by any other Person in
occupancy of or involved with the operation, use or leasing of the Property any
act or omission affording any Governmental Authority the right of forfeiture as
against the Property or any part thereof.
3.2.18    Environmental Laws. The Property is in material compliance with all
Environmental Laws. No Loan Party nor any Affiliate of any Loan Party has caused
or has knowledge of any discharge, spill, uncontrolled loss or seepage of any
Hazardous Substance onto any property comprising or adjoining any location of
the Property, and no Loan Party nor any Affiliate of any Loan Party nor, to the
actual knowledge of Borrower, any tenant or occupant of all or part of the
Property, is now or has been involved in operations at any Property that could
reasonably be expected to lead to environmental liability for any Loan Party or
any Affiliate of a Loan Party or the imposition of a Lien (other than a
Permitted Lien) on the Property under any Environmental Law. There is no
condition presently existing and no event has occurred or failed to occur prior
to the date hereof, concerning the Property relating to any Hazardous Substance
or other hazardous or toxic materials or condition, asbestos, mold or other
environmental or similar matters which would reasonably be expected to have an
Individual Material Adverse Effect on the Property.    

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3.2.19    Utilities and Public Access. The Property has rights of access to
public ways and is served by water, sewer or septic system, and storm drain
facilities adequate to service the Property for its intended uses and all public
utilities necessary or convenient to the full use and enjoyment of the Property
are located either in the public right-of-way abutting the Property (which are
connected so as to serve the Property without passing over other property) or in
recorded easements serving the Property and such easements are set forth in and
insured by the applicable Title Insurance Policy and all roads necessary for the
use of the Property for its intended purposes have been completed and dedicated
to public use and accepted by all Governmental Authorities, except as would not
reasonably be expected to have an Individual Material Adverse Effect with
respect to the Property.
3.2.20    Eminent Domain. With respect to each Property as of the date hereof,
such Property has not been condemned in whole or in part. There is no proceeding
pending or, to Borrower’s or Manager’s knowledge, threatened, for the total or
partial condemnation or taking of the Property by eminent domain or for the
relocation of roadways resulting in a failure of access to the Property on
public roads.
3.2.21    Flood Zone. The Property is not located in an area identified by the
Federal Emergency Management Agency as a special flood hazard area, or, if so
located the flood insurance required pursuant to Section 5.1.1(a) is in full
force and effect with respect to the Property.
3.2.22    Illegal Activity (Substitute Properties). Solely with respect to each
Substitute Property, such Property has not been purchased with proceeds of any
illegal activity.
Section 3.3    Survival of Representations. The representations and warranties
set forth in this Article III and elsewhere in this Agreement and the other Loan
Documents shall (i) survive until the Debt has been paid in full and (ii) be
deemed to have been relied upon by Lender notwithstanding any investigation
heretofore or hereafter made by Lender or on its behalf.
ARTICLE 4
COVENANTS
Section 4.1    Affirmative Covenants. Borrower shall comply with the following
covenants:
4.1.1    Compliance with Laws, Etc. Borrower shall and shall cause each other
Loan Party to do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its rights, licenses and permits and to comply
with all Legal Requirements applicable to it and the Properties (and the use
thereof), including, without limitation, building and zoning ordinances and
codes and certificates of occupancy, except to the extent that the failure to do
so would not reasonably be expected to have a Material Adverse Effect. Any Loan
Party, at such Loan Party’s expense, may contest by appropriate legal proceeding
promptly initiated and conducted in good faith and with due diligence, the
validity of any Legal Requirement, the applicability of any Legal Requirement to
a Loan Party or any Property or any alleged violation of any Legal Requirement;
provided that (i)  such proceeding shall be permitted under and be conducted in
accordance with the provisions of any instrument to which a Loan Party is
subject

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and shall not constitute a default thereunder and such proceeding shall be
conducted in accordance with all applicable Legal Requirements; (ii) no Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, cancelled or lost; and (iii) the Loan Party shall
promptly upon final determination thereof comply with any such Legal Requirement
determined to be valid or applicable or cure any violation of any Legal
Requirement, except to the extent that the failure to do so would not reasonably
be expected to have a Material Adverse Effect.
4.1.2    Preservation of Existence. Borrower shall and shall cause each other
Loan Party to (i) observe all procedures required by its Constituent Documents
and preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its organization, and (ii) qualify and remain
qualified in good standing (where relevant) as a foreign limited liability
company or limited partnership, as applicable, in each other jurisdiction where
the nature of its business requires such qualification and to the extent such
concept exists in such jurisdiction and where, in the case of clause (ii),
except where the failure to be so qualified would not reasonably be expected to
have a Material Adverse Effect.
4.1.3    Non-Property Taxes. Borrower shall and shall cause each other Loan
Party to file, cause to be filed or obtain an extension of the time to file, all
foreign, federal, state and other material Tax returns for Non-Property Taxes
and reports required by law to be filed by it and to promptly pay or cause to be
paid all Non-Property Taxes now or hereafter levied, assessed or imposed on it
as the same become due and payable; provided that, after prior notice to Lender,
such Loan Party may contest by appropriate legal proceedings conducted in good
faith and with due diligence, the amount or validity of any such Non-Property
Taxes and, in such event, may permit the Non-Property Taxes so contested to
remain unpaid during any period, including appeals, when a Loan Party is in good
faith contesting the same so long as (i) no Event of Default has occurred and
remains uncured, (ii) such proceeding shall be permitted under and be conducted
in accordance with all applicable Legal Requirements, (iii) no Property or other
Collateral nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, canceled or lost, (iv) the applicable Loan Party
has set aside on its books adequate reserves in accordance with GAAP, and the
non-payment or non-discharge of such Non-Property Taxes would not reasonably be
expected to have a Material Adverse Effect, (v) enforcement of the contested
Non-Property Taxes is effectively stayed for the entire duration of such contest
and no Lien is imposed on any Property or other Collateral, (vi) any
Non-Property Taxes determined to be due, together with any interest or penalties
thereon, is promptly paid as required after final resolution of such contest,
(vii) to the extent such Non-Property Taxes (when aggregated with all other
Taxes that any Loan Party is then contesting under this Section 4.1.3 or Section
4.4.8 and for which Borrower has not delivered to Lender any Contest Security)
exceed $1,000,000, Borrower shall deliver to Lender either (A) cash, or other
security as may be approved by Lender, in an amount sufficient to insure the
payment of any such Non-Property Taxes, together with all interest and penalties
thereon or (B) a payment and performance bond in an amount equal to one hundred
percent (100%) of the contested amount from a surety acceptable to Lender in its
reasonable discretion, (viii) failure to pay such Non-Property Taxes will not
subject Lender to any civil or criminal liability, (ix) such contest shall not
affect the ownership, use or occupancy of any Property or other Collateral, and
(x) Borrower shall, upon request by Lender, give Lender prompt notice of the
status of such proceedings and/or confirmation of the continuing satisfaction of
the conditions set forth in clauses (i) through (ix) of this Section 4.1.3.
Notwithstanding the foregoing, Borrower shall and shall cause each other Loan
Party to pay any

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contested Non-Property Taxes (or, if cash or other security has been provided,
Lender may pay over any such cash or other security held by Lender to the
claimant entitled thereto) if, in the Lender’s reasonable judgment, any Property
or other Collateral (or any part thereof or interest therein) shall be in danger
of being sold, forfeited, terminated, cancelled or lost or there shall be any
danger of the Lien of any Collateral Document being primed by any related Lien.
4.1.4    Access to Properties. Subject to the rights of Tenants, Borrower shall
permit agents, representatives and employees of Lender to inspect the Properties
or any part thereof at reasonable hours upon reasonable advance notice.
4.1.5    Perform Loan Documents. Borrower shall and shall cause each other Loan
Party to, in a timely manner, observe, perform and satisfy all the terms,
provisions, covenants and conditions of the Loan Documents executed and
delivered by, or applicable to, the Loan Party.
4.1.6    Awards and Insurance Benefits. Borrower shall cooperate with Lender, in
accordance with the relevant provisions of this Agreement, to enable Lender to
receive the benefits of any Awards or Insurance Proceeds lawfully or equitably
payable in connection with any Property, and Lender shall, to the extent
entitled to exercise rights with respect to such Awards or Insurance Proceeds
under the Loan Documents, be reimbursed for any expenses incurred in connection
therewith (including reasonable attorneys’ fees and disbursements, and the
payment by the Loan Parties of the reasonable expense of an appraisal on behalf
of Lender in case of Casualty or Condemnation affecting any Property or any part
thereof) out of such Insurance Proceeds.
4.1.7    Security Interest; Further Assurances. Borrower shall and shall cause
each other Loan Party to take all necessary action to establish and maintain, in
favor of Lender a valid and perfected first priority security interest in all
Collateral to the full extent contemplated herein, free and clear of any Liens
(including the filing of all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Lender’s security interest in the Collateral) other
than Permitted Liens. Borrower shall and shall cause each other Loan Party to,
at the Loan Party’s sole cost and expense execute and deliver, or cause to be
executed and delivered, any and all further documents, financing statements,
agreements, affirmations, waivers and instruments, and take all such further
actions (including the filing and recording of financing statements) that may be
required under any applicable Legal Requirement, or that Lender reasonably deems
necessary or advisable, in order to evidence, preserve and/or protect the
Collateral at any time securing or intended to secure the Obligations or to
grant, preserve, protect and perfect the validity and priority of the security
interests created or intended to be created hereby or by the Collateral
Documents or the enforceability of any guaranty or other Loan Document.
4.1.8    Keeping of Records and Books of Account. Borrower shall and shall cause
each other Loan Party to maintain and implement administrative and operating
procedures (including an ability to recreate records regarding the Properties in
the event of the destruction of the originals thereof) and keep and maintain on
a calendar year basis, in accordance with the requirements for a Special Purpose
Bankruptcy Remote Entity set forth herein, as applicable, GAAP, and, to the
extent required under Section 9.1, the requirements of Regulation AB, proper and
accurate documents, books, records and other information reasonably necessary
for the collection of all Rents and other Collections and payments of its
obligations. Such books and

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records shall include, without limitation, records adequate to permit the
identification of each Property and all items of income and expense in
connection with the operation of each Property. Lender shall have the right from
time to time (but, in any event, not more than twice in any calendar year
(unless an Event of Default shall have occurred and be continuing, in which case
no such restriction shall apply)) during normal business hours upon reasonable
notice (which may be given verbally) to Borrower to examine such books, records,
accounts, agreements, leases, instruments and other documents and the collection
systems of the Loan Parties and Manager at the offices of the Loan Parties or
any other Person maintaining such books, records and accounts and to make such
copies or extracts thereof as Lender shall desire. Borrower shall pay any
reasonable out-of-pocket costs and expenses incurred by Lender in any such
examination.
4.1.9    Special Purpose Bankruptcy Remote Entity/Separateness.
(a)    Borrower shall and shall cause each other Loan Party to be and continue
to be a Special Purpose Bankruptcy Remote Entity.
(b)    Borrower shall and shall cause each other Loan Party to comply in all
material respects with all of the stated facts and assumptions made with respect
to the Loan Parties in each Insolvency Opinion.
4.1.10    Location of Records. Borrower shall and shall cause each other Loan
Party to keep its chief place of business and chief executive office and the
offices where it keeps the Records at the address(es) referred to on Schedule
VII or upon thirty (30) days’ prior written notice to Lender, at any other
location in the United States where all actions reasonably requested by Lender
to protect and perfect the interests of Lender in the Collateral have been taken
and completed.
4.1.11    Business and Operations. Borrower shall and shall cause each other
Loan Party to, directly or through the Manager or subcontractors of the Manager
(subject to Section 4.2.1), continue to engage in the businesses presently
conducted by it as and to the extent the same are necessary for the ownership,
maintenance, sale, management, leasing and operation of the Properties. Borrower
shall and shall cause each other Loan Party to qualify to do business and will
remain in good standing under the laws of each jurisdiction as and to the extent
the same are required for the ownership, maintenance, management and operation
of the Properties, except to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect. Borrower and each
Borrower TRS, as applicable, shall, at all times during the term of the Loan,
continue to own or lease all equipment, fixtures and personal property which are
necessary to operate the Properties.
4.1.12    Leasing Matters. Borrower shall (i) observe and perform the
obligations imposed upon the lessor under the Leases for its Properties in a
commercially reasonable manner; and (ii) enforce the terms, covenants and
conditions contained in such Leases upon the part of the Tenant thereunder to be
observed or performed in a commercially reasonable manner except in each case to
the extent that the failure to do so would not reasonably be expected to have an
Individual Material Adverse Effect with respect to a Property. No Rent may be
collected under any Lease for the Properties more than one (1) month in advance
of its due date; provided that any Advance Rent nonetheless received from a
Tenant shall be held in the Cash Management Account subject to an Advance Rent
Notice.

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4.1.13    Property Management.
(a)    Borrower shall (i) cause Manager to manage the Properties in accordance
with the Management Agreement, (ii) diligently perform and observe all of the
terms, covenants and conditions of the Management Agreement on the part of
Borrower to be performed and observed, (iii) promptly notify Lender of any
default under the Management Agreement of which it is aware, (iv) promptly
deliver to Lender a copy of each financial statement, business plan, capital
expenditures plan, report and estimate received by it under the Management
Agreement, and (v) promptly enforce the performance and observance of all of the
covenants required to be performed and observed by Manager under the Management
Agreement in a commercially reasonable manner. If Borrower shall default in the
performance or observance of any material term, covenant or condition of the
Management Agreement on the part of Borrower to be performed or observed, then,
without limiting Lender’s other rights or remedies under this Agreement or the
other Loan Documents, and without waiving or releasing Borrower from any of its
Obligations hereunder or under the Management Agreement, Lender shall have the
right, but shall be under no obligation, to pay any sums and to perform any act
as may be appropriate to cause all the material terms, covenants and conditions
of the Management Agreement on the part of Borrower to be performed or observed.
In no event shall the fee payable to Manager for any Interest Period exceed the
Management Fee Cap for such Interest Period and in no event shall Borrower pay
or become obligated to pay to Manager, any transition or termination costs or
expenses, termination fees, or their equivalent in connection with the Transfer
of a Property or the termination of the Management Agreement.
(b)    If any one or more of the following events occurs: (i) the occurrence of
an Event of Default, (ii) Manager shall be in material default under the
Management Agreement beyond any applicable notice and cure period (including as
a result of any gross negligence, fraud, willful misconduct or misappropriation
of funds), or (iii) Manager shall become insolvent or a debtor in any bankruptcy
or insolvency proceeding, then Lender shall have the right to require Borrower
to replace the Manager and enter into a Replacement Management Agreement with
(x) a Qualified Manager selected by Borrower that is not an Affiliate of
Borrower or (y) another property manager chosen by Borrower and approved by
Lender; provided, that such approval shall be conditioned upon Borrower
delivering a Rating Agency Confirmation as to such property manager. If Borrower
fails to select a new Qualified Manager or a replacement Manager that satisfies
the conditions described in the foregoing clause (y) and enter into a
Replacement Management Agreement with such Person within sixty (60) days of
Lender’s demand to replace the Manager, then Lender may chose the replacement
property manager provided that such replacement property manager is a Qualified
Manager or satisfies the conditions set forth in the foregoing clause (y).
4.1.14    Property Files. Borrower will deliver to Lender all Property Files in
an electronic format reasonably agreed by Lender and Borrower.
4.1.15    Security Deposits.
(a)    All security deposits of Tenants, whether held in cash or any other form,
shall be deposited into one or more Eligible Accounts (each, a “Security Deposit
Account”) established and maintained by Borrower at an Eligible Institution,
held in compliance with all Legal Requirements and identified on Schedule XII,
and shall not be commingled with any other funds of Borrower. Borrower shall
cause all security deposits received by Borrower or Manager

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after the Closing Date to be deposited into a Security Deposit Account, the Cash
Management Account or a Rent Deposit Account within three (3) Business Days of
receipt. Borrower shall, no less frequently than once each month, transfer into
a Security Deposit Account any security deposits previously received and
deposited into the Cash Management Account or a Rent Deposit Account. The
security deposits shall be disbursed by Borrower in accordance with the terms of
the applicable Leases and all Legal Requirements. In the event the Tenant under
any Lease defaults such that the applicable security deposit may be drawn upon
on account of such default, the proceeds of such draw shall constitute
Collections and Borrower shall immediately deposit the proceeds thereof into a
Rent Deposit Account or the Cash Management Account. Borrower shall pay for all
expenses of opening and maintaining the Security Deposit Accounts. So long as
the Debt is outstanding, except as otherwise provided in this Section 4.1.15(a),
Borrower shall not (and shall not permit Manager or any other Person to) open
any other accounts for the deposit of security deposits other than the Security
Deposit Accounts.
(b)    Any bond or other instrument which Borrower is permitted to hold in lieu
of cash security deposits under any applicable Legal Requirements (i) shall be
maintained in full force and effect in the full amount of such deposits unless
replaced by cash deposits as herein above described, (ii) shall be issued by an
institution reasonably satisfactory to Lender, (iii) shall, if permitted
pursuant to any Legal Requirements, name Lender as payee or mortgagee thereunder
(or at Lender’s option, be fully assignable to Lender), and (iv) shall in all
respects comply with any applicable Legal Requirements and otherwise be
satisfactory to Lender. Borrower shall, upon request, provide Lender with
evidence reasonably satisfactory to Lender of Borrower’s compliance with the
foregoing.
(c)    (i) Upon Lender’s written request following the occurrence and during the
continuance of an Event of Default, Borrower shall deliver (or cause to be
delivered) to Lender (or Servicer) or to one or more accounts designated by
Lender (or Servicer) the security deposits, and (ii) upon a foreclosure of any
Property or action in lieu thereof, Borrower shall deliver to Lender (or
Servicer) or to an account designated by Lender (or Servicer) the security
deposit applicable to the Lease with respect to such Property, except, in each
case, to the extent any such security deposits were previously deposited into a
Rent Deposit Account or the Cash Management Account in accordance with Section
4.1.15(a) following a default by the Tenant under the applicable Lease. Any
security deposits delivered to Lender (or Servicer) pursuant to this Section
4.1.15(c) will be held by Lender (or Servicer) for the benefit of the applicable
Tenants in accordance with the terms of the Leases.
4.1.16    Anti-Money Laundering. Borrower shall and shall cause each other Loan
Party to comply in all material respects with all applicable anti-money
laundering laws and regulations to the extent applicable, including without
limitation, the Patriot Act (collectively, the “Anti-Money Laundering Laws”) and
shall provide notice to Lender, within two (2) Business Days, of any Anti-Money
Laundering Law regulatory notice or action involving any Loan Party.

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4.1.17    OFAC. Notwithstanding the foregoing, if a Responsible Officer of a
Loan Party or Manager obtains knowledge that a Tenant is a Person (A) that is
listed in the Annex to, or is otherwise subject to the provisions of EO13224 or
(B) whose name appears on OFAC’s most current list of “Specifically Designated
National and Blocked Persons” (which list may be published from time to time in
various mediums including, but not limited to, the OFAC website,
http:www.treas.gof/ofac/downloads/t11sdn.pdf), it shall promptly provide notice
of such determination to Lender, within two (2) Business Days.
4.1.18    Cooperate in Legal Proceedings. Borrower shall cooperate fully with
Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in the reasonable opinion of Lender affect the
rights of Lender hereunder or any rights obtained by Lender under any of the
other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.
4.1.19    Further Assurances. Borrower shall and shall cause each other Loan
Party to, at Borrower’s sole cost and expense:
(a)    furnish to Lender all instruments, documents, certificates, title and
other insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished by Borrower
pursuant to the terms of the Loan Documents or which are reasonably requested by
Lender in connection therewith.
(b)    cure any defects in the execution and delivery of the Loan Documents; and
(c)    do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
may reasonably require from time to time.
4.1.20    Costs and Expenses.
(a)    Except as otherwise expressly set forth herein or in any of the other
Loan Documents, Borrower shall pay or, if Borrower fails to pay, reimburse
Lender upon receipt of notice from Lender, for (1) all reasonable out-of-pocket
costs and expenses (including reasonable attorneys’ fees and disbursements)
incurred by Lender in connection with (i) the Relevant Parties’ ongoing
performance of and compliance with Borrower’s agreements and covenants contained
in this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date, including confirming compliance with
environmental and insurance requirements (except to the extent expressly set
forth in Section 10.20); (ii) Lender’s ongoing performance of and compliance
with all agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date
(except to the extent expressly set forth in Section 10.20); (iii) the
negotiation, preparation, execution and delivery of any consents, amendments,
waivers or other modifications to this Agreement and the other Loan Documents
and any other documents or matters requested by any Loan Party; (iv) filing and
recording of any Loan Documents; (v) title insurance, surveys, inspections,
Broker Price Opinions and broker opinions of market rent; (vi) the creation,
perfection or protection of Lender’s Liens in the Collateral (including fees and
expenses for title and lien searches, intangibles taxes, personal property
taxes, mortgage recording taxes, due diligence expenses, travel expenses,
accounting firm fees, environmental reports and Lender’s

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diligence consultant); and (2) all costs and expenses (including reasonable
attorneys’ fees and disbursements) incurred by Lender in connection with
(i) enforcing or preserving any rights in response to third party claims or the
prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting any Relevant Party, the Loan Documents,
any Property, or any other security given for the Loan; (ii) fees charged by
Servicer (except to the extent expressly set forth in Section 10.20) and, if a
Securitization has occurred, the Rating Agencies in connection with the Loan or
any modification thereof; and (iii) enforcing any Obligations of or collecting
any payments due from any Relevant Party under this Agreement, the other Loan
Documents or with respect to any Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in the
nature of a “work-out” or of any insolvency or bankruptcy proceedings; provided,
however, that Borrower shall not be liable for the payment of any such costs and
expenses to the extent the same arise by reason of the active gross negligence,
illegal acts, fraud or willful misconduct of Lender; provided, further, that
this Section 4.1.20 shall not apply with respect to Taxes other than any Taxes
that represent losses or damages arising from any non-Tax claim.
(b)    In addition, in connection with any Rating Agency Confirmation, Review
Waiver or other Rating Agency consent, approval or review requested or required
hereunder (other than the initial review of the Loan by the Rating Agencies in
connection with a Securitization), Borrower shall pay all of the reasonable
out-of-pocket costs and expenses of Lender, Servicer and each Rating Agency in
connection therewith, and, if applicable, shall pay any customary fees imposed
by any Rating Agency in connection therewith.
(c)    Any costs and expenses due and payable by Borrower hereunder which are
not paid by Borrower within ten (10) days after demand may be paid from any
amounts in the Cash Management Account, with notice thereof to Borrower. The
obligations and liabilities of Borrower under this Section 4.1.20 shall (i)
become part of the Obligations, (ii) be secured by the Loan Documents and (iii)
survive the Term and the exercise by Lender of any of its rights or remedies
under the Loan Documents.
4.1.21    Indemnity. Borrower shall indemnify, defend and hold harmless Lender
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of
(i) any breach by any Relevant Party of its Obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents; and (ii) the use or intended use of the proceeds of the Loan
(collectively, the “Indemnified Liabilities”); provided, however, that Borrower
shall not have any obligation to Lender hereunder (a) to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender and (b) with respect to punitive, consequential or
similar special damages due to Lender (provided, that nothing contained in this
clause (b) shall limit Borrower’s indemnification obligations with respect to
any claims against Lender). To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.

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4.1.22    Formation of a Borrower TRS. If Borrower organizes any Borrower TRS
then the following covenants shall be applicable:
(a)    Borrower shall cause such Borrower TRS to execute and deliver to the
Lender promptly after the formation of such Borrower TRS and, in any event,
prior to contributing or otherwise transferring any Properties or other
Collateral to such Borrower TRS: (i) a guaranty substantially in the form of the
Equity Owner Guaranty, guaranteeing the Obligations (a “Borrower TRS Guaranty”);
(ii) a security agreement, substantially in the form of the Borrower Security
Agreement, pursuant to which all property and assets of such Borrower TRS are
pledged as security for the Obligations (a “Borrower TRS Security Agreement”)
and (iii) such other agreements, instruments, approvals, legal opinions or other
documents as are reasonably requested by Lender in order to create, perfect or
establish the first priority of (subject to Permitted Liens) any Lien purported
to be covered by any such Collateral Documents or otherwise to effect the intent
that all property and assets of such Borrower TRS shall become Collateral for
the Obligations; provided, that for the avoidance of doubt, the Lien of the
Mortgage encumbering any Property contributed to the Borrower TRS shall not be
released at such time and no new Mortgage shall be executed with respect to or
recorded against any Property contributed to such Borrower TRS by Borrower;
(b)    Borrower shall deliver promptly after the formation of such Borrower TRS
and, in any event, prior to contributing or otherwise transferring any
Properties or other Collateral to such Borrower TRS: (i) an updated Exhibit D to
the Borrower Security Agreement reflecting the pledge of Borrower’s capital
stock in such Borrower TRS as Collateral for the Obligations, (ii) a certificate
evidencing all of the capital stock of such Borrower TRS; (iii) undated stock
powers or other appropriate instruments of assignment executed in blank with
signature guaranteed and (iv) such other agreements, instruments, approvals,
legal opinions or other documents as are reasonably requested by Lender in order
to create, perfect or establish the first priority of (subject to Permitted
Liens) Lender’s Lien in such capital stock or otherwise to effect the intent
that such capital stock shall become Collateral for the Obligations; and
(c)    Prior to contributing or otherwise transferring a Property to such
Borrower TRS, Borrower shall cause such Borrower TRS to execute and deliver to
Lender an assumption of the Mortgage related to such Property, in form and
substance reasonably acceptable to Lender and Borrower.
Section 4.2    Negative Covenants. Borrower shall comply with the following
covenants:
4.2.1    Prohibition Against Termination or Modification. Borrower shall not (i)
surrender, terminate, cancel, modify, renew or extend the Management Agreement,
provided, that Borrower may, without Lender’s consent, replace Manager so long
as the replacement manager is a Qualified Manager pursuant to a Replacement
Management Agreement, (ii) enter into any other agreement relating to the
management or operation of a Property with Manager or any other Person,
provided, that Borrower may permit Manager to enter into sub-management
agreements with third-party service providers to perform all or any portion of
the services by Manager so long as (x) the fees and charges payable under any
such sub-management agreements shall be the sole responsibility of Manager, (y)
Borrower shall have no liabilities of obligations under any such sub-management
agreements, and (z) any such sub-management agreements will be terminable
without penalty upon the termination of the Management

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Agreement, (iii) consent to the assignment by the Manager of its interest under
the Management Agreement, or (iv) waive or release any of its rights and
remedies under the Management Agreement, in each case without the express
consent of Lender, which consent shall not be unreasonably withheld. If at any
time Lender consents to the appointment of a new property manager or a Qualified
Manager is appointed, such new property manager (including a Qualified Manager)
shall execute a Replacement Management Agreement.
4.2.2    Liens Against Collateral. Borrower shall not and shall cause each other
Loan Party not to create or suffer to exist any Liens upon or with respect to,
any Collateral except for Liens permitted under the Loan Documents (including,
without limitation, Permitted Liens).
4.2.3    Transfers. Borrower acknowledges that Lender has examined and relied on
the experience of Borrower and its Affiliates, and their principals in owning
and operating properties such as the Properties in agreeing to make the Loan,
and will continue to rely on Borrower’s ownership of the Properties as a means
of maintaining the value of the Properties in connection with the repayment of
the Debt and the performance of the Other Obligations. Borrower acknowledges
that Lender has a valid interest in maintaining the value of the Properties so
as to ensure that, should Borrower default in the repayment of the Debt or the
performance of the Other Obligations, Lender can recover the Debt by a sale of
the Properties or Borrower’s Equity Interests. Therefore, without the prior
written consent of Lender, but, in each instance, subject to the provisions of
Article 7, neither Borrower nor any Loan Party nor any other Person having a
direct ownership or beneficial interest in Borrower or any Loan Party shall
sell, convey, mortgage, grant, bargain, encumber, pledge, assign or transfer the
Properties or Collateral or any part thereof, or any direct interest, in
Borrower or any Loan Party, whether voluntarily or involuntarily and whether
directly or indirectly, by operation of law or otherwise (a “Transfer”). A
Transfer within the meaning of this Section 4.2.3 shall be deemed to include
(i) an installment sales agreement wherein Borrower agrees to sell a Property or
any part thereof for a price to be paid in installments; (ii) an agreement by
Borrower for the leasing of all or a substantial part of the Property for any
purpose other than the actual occupancy by a space Tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower’s right, title and interest in and to any Leases or any Rents;
(iii) [reserved]; (iv) if Borrower, any Loan Party or any general partner,
managing member or controlling shareholder of Borrower or any Loan Party is a
limited or general partnership, joint venture or limited liability company, the
change, removal, resignation or addition of a general partner, managing partner,
limited partner, joint venturer or member or the transfer of the partnership
interest of any general partner, managing partner or limited partner or the
transfer of the interest of any joint venturer or member; and (v) any pledge,
hypothecation, assignment, transfer or other encumbrance of any direct ownership
interest in Borrower or any Loan Party.
4.2.4    Change in Business. Borrower shall not and shall cause each Borrower
TRS not to enter into any line of business other than the acquisition,
renovation, rehabilitation, ownership, management and operation of the
Properties (and any businesses ancillary or related thereto), or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance
of its present business. Except as provided in the Loan Documents, Borrower
shall cause Equity Owner to not engage in any activity other than acting as the
sole member of Borrower.
4.2.5    Changes to Accounts. Borrower shall not and shall cause each other Loan
Party not to (i) open or permit to remain open any cash, securities or other
account with any bank,

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custodian or institution other than the Cash Management Account, the Accounts,
the Security Deposit Accounts and Property Accounts that are subject to a
Property Account Control Agreement, (ii) change or permit to change any account
number of the Cash Management Account, the Accounts or any Property Account,
(iii) open or permit to remain open any sub-account of the Cash Management
Account (except any Account), the Accounts or any Property Account, (iv) permit
any funds of Persons other than Borrower or a Borrower TRS to be deposited or
held in any of the Cash Management Account, the Accounts or the Property
Accounts or (v) permit any Collections or other proceeds of any Properties to be
deposited or held in Borrower’s Operating Account other than cash that is
distributed to Borrower pursuant to Section 6.8.1(i).
4.2.6    Dissolution, Merger, Consolidation, Etc Borrower shall not and shall
cause each other Loan Party not to (i) engage in any dissolution, liquidation or
consolidation or merger with or into any other business entity, (ii) engage in
any business activity other than the business activity of such Loan Party
described on Schedule IV or otherwise herein, (iii) transfer, lease or sell, in
one transaction or any combination of transactions, the assets or all or
substantially all of the properties or assets of any Loan Party except to the
extent permitted by the Loan Documents, or (iv) modify, amend, waive or
terminate its Constituent Documents or its qualification and good standing in
any jurisdiction.
4.2.7    ERISA Matters. Borrower shall not and shall cause each of the other
Loan Parties and the ERISA Affiliates under the control of any Loan Party not to
establish a Plan or Foreign Plan.
4.2.8    Indebtedness. Borrower shall not, and shall cause each Borrower TRS to
not, create, incur, assume or suffer to exist any indebtedness other than (i)
the Debt and (ii) unsecured trade payables incurred in the ordinary course of
business relating to the ownership and operation of the Properties, which in the
case of such unsecured trade payables (A) are not evidenced by a note, (B) do
not exceed, at any time, on an aggregate basis among Borrower and each Borrower
TRS, a maximum aggregate amount of three percent (3%) of the original principal
amount of the Loan and (C) are paid within sixty (60) days of the date incurred
(collectively, “Permitted Indebtedness” and with respect to any Borrower TRS,
the “Borrower TRS Permitted Indebtedness”). Borrower shall cause Guarantor and
each Borrower TRS not to create, incur, assume or suffer to exist any
indebtedness other than (x) with respect to any Borrower TRS, Borrower TRS
Permitted Indebtedness and indebtedness incurred under the Borrower TRS
Guaranty, this Agreement and the other Loan Documents to which it is a party and
(y) with respect to the Equity Owner, indebtedness incurred under the Equity
Owner Guaranty, this Agreement and the other Loan Documents to which Guarantor
is a party and unsecured trade payables incurred in the ordinary course of
business with respect to Equity Owner, related to the ownership of its limited
liability company interest in Borrower, in each case that (i) are not evidenced
by a note, (ii) do not exceed at any one time $250,000, and (iii) are paid
within sixty (60) days after the date incurred (collectively, the “Guarantor’s
Permitted Indebtedness”).
4.2.9    Limitation on Transactions with Affiliates. Borrower shall not and
shall cause each other Loan Party not to enter into, or be a party to any
transaction with any Affiliate of the Loan Parties, except for: (i) the Loan
Documents; (ii) capital contributions by (x) Sponsor to Equity Owner, (y) Equity
Owner to Borrower or (z) Borrower to a Borrower TRS; (iii) Restricted Junior
Payments which are in compliance with Section 4.2.12 and distributions from a
Borrower TRS to Borrower; (iv) the Management Agreement; and (v) to the extent
not otherwise

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prohibited under this Agreement, other transactions upon fair and reasonable
terms materially no less favorable to the Loan Parties than would be obtained in
a comparable arm’s-length transaction with a Person not an Affiliate.
4.2.10    Loan Documents. Borrower shall not and shall cause each other Loan
Party not to terminate, amend or otherwise modify any Loan Document, or grant or
consent to any such termination, amendment, waiver or consent, except in
accordance with the terms thereof.
4.2.11    Limitation on Investments. Borrower shall not and shall cause each
other Loan Party not to make or suffer to exist any loans or advances to, or
extend any credit to, purchase any property or asset or make any investment (by
way of transfer of property, contributions to capital, purchase of stock or
securities or evidences of indebtedness, acquisition of the business or assets,
or otherwise) in, any Affiliate or any other Person except for (i) investments
by Borrower in the Borrower TRS and (ii) acquisition of the Properties and
related Collateral and Permitted Investments.
4.2.12    Restricted Junior Payments. Borrower shall not and shall cause each
other Loan Party not to make any Restricted Junior Payment; provided, that the
Loan Parties may make Restricted Junior Payments so long as (i) no Event of
Default shall then exist or would result therefrom, (ii) such Restricted Junior
Payments have been approved by all necessary action on the part of the Loan
Parties and in compliance with all applicable laws and (iii) such Restricted
Junior Payments are paid from Unrestricted Cash.
4.2.13    Limitation on Issuance of Equity Interests. Borrower shall not and
shall cause each other Loan Party not to issue or sell or enter into any
agreement or arrangement for the issuance and sale of any Equity Interests.
4.2.14    Principal Place of Business. Borrower shall not and shall cause each
other Loan Party not to change its principal place of business from the address
set forth on the first page of this Agreement without first giving Lender thirty
(30) days prior written notice.
4.2.15    Change of Name, Identity or Structure. Borrower shall not and shall
cause each other Loan Party not to change its name, identity (including its
trade name or names) or change its organizational structure without notifying
Lender of such change in writing at least thirty (30) days prior to the
effective date of such change and without first obtaining the prior written
consent of Lender, such consent not to be unreasonably withheld, conditioned or
delayed. Borrower shall not and shall cause each other Loan Party not to change
its jurisdiction of organization. Prior to or contemporaneously with the
effective date of any such change, Borrower shall deliver to Lender any
financing statement or financing statement change required by Lender to
establish or maintain the validity, perfection and priority of the security
interest granted herein. At the request of Lender, Borrower shall and shall
cause each other Loan Party to execute a certificate in form satisfactory to
Lender listing the trade names under which such Loan Party intends to operate it
business, and representing and warranting that such Loan Party does business
under no other trade name.
4.2.16    No Embargoed Persons. At all times throughout the term of the Loan,
including after giving effect to any Transfers permitted pursuant to the Loan
Documents, Borrower shall ensure that (a) none of the funds or other assets of
any Loan Party shall constitute property of, or shall be beneficially owned,
directly or indirectly, by any Person subject to trade restrictions

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under United States law, including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder, with the result that the investment in Borrower or
Guarantor, as applicable, would be prohibited by law (each, an “Embargoed
Person”), or the Loan made by Lender would be in violation of law, (b) no
Embargoed Person shall have any interest of any nature whatsoever in any Loan
Party with the result that the investment in any Loan Party, would be prohibited
by law or the Loan would be in violation of law, and (c) none of the funds of
any Loan Party shall be derived from any unlawful activity with the result that
the investment in such Loan Party, would be prohibited by law or the Loan would
be in violation of law.
4.2.17    Special Purpose Bankruptcy Remote Entity. Borrower shall not and shall
cause each other Loan Party not to directly or indirectly make any change,
amendment or modification to its Constituent Documents, or otherwise take any
action, which could result in Borrower or any other Loan Party not being a
Special Purpose Bankruptcy Remote Entity.
Section 4.3    Reporting Covenants. Borrower shall, unless Lender shall
otherwise consent in writing, furnish or cause to be furnished to Lender the
following reports, notices and other documents:
4.3.1    Financial Reporting. Borrower shall furnish the following financial
reports to Lender:
(a)    As soon as available and in any event within forty-five (45) days after
the end of each calendar quarter commencing with the first calendar quarter
ending after the Closing Date, consolidated balance sheets, statements of
operations and retained earnings, and statements of cash flows of Borrower, in
each case, as at the end of such quarter and for the period commencing at the
end of the immediately preceding calendar year and ending with the end of such
quarter, setting forth in each case in comparative form the figures for the
corresponding date or period of the immediately preceding calendar year (if
any), all in reasonable detail and prepared in accordance with GAAP. Such
financial statements shall contain such other information as shall be reasonably
requested by Lender for purposes of calculations to be made by Lender pursuant
to the terms hereof.
(b)    As soon as available, and in any event (i) within ninety (90) days after
the end of each calendar year, unaudited copies, and (ii) within 120 days
following the end of each calendar year, audited copies, of a balance sheet,
statements of operations and retained earnings, and statement of cash flows of
Sponsor (accompanied by a consolidating schedule for Borrower), in each case, as
at the end of such calendar year, setting forth in each case in comparative form
the figures for the immediately preceding calendar year (if any), all in
reasonable detail and prepared in accordance with GAAP and the inclusion of
footnotes to the extent required by GAAP, such audited financial statements to
be accompanied by a report and an unqualified opinion, prepared in accordance
with generally accepted auditing standards, of an Independent Accountant
selected by Sponsor that is reasonably acceptable to Lender (which opinion on
such consolidated information shall be without (1) any qualification as to the
scope of such audit or (2) a “going concern” or like qualification (other than a
going concern qualification that relates solely to the near term maturity of the
Loans hereunder)), together with a written statement of such accountants (A) to
the effect that, in making the examination necessary for their certification of
such financial statements, they have not obtained any knowledge of the existence

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of an Event of Default or a Default and (B) if such accountants shall have
obtained any knowledge of the existence of an Event of Default or such Default,
describing the nature thereof.
(c)    As soon as available, and in any event within forty-five (45) days after
the end of each calendar month (i) an operating statement in respect of such
calendar month and a calendar year-to-date operating statement for Borrower,
(ii) a statement for each Property showing (A) rent roll in respect of such
calendar month and rent received on a per Property basis calendar year-to-date,
(B) expiration date of the related Lease, (C) vacancy status, (D) security
deposits maintained, (E) Tenant payment status, (F) Capital Expenditures and
repairs and (G) known violations of any Legal Requirements; provided that any of
the foregoing items may be excluded from such statements if they are included in
the Properties Schedule, (iii) an Officer’s Certificate certifying that such
operating statement and Property statements are true, correct and complete in
all material respects as of their respective dates, and (iv) upon Lender’s
request, other information maintained by Borrower in the ordinary course of
business that is reasonably necessary and sufficient to fairly represent the
financial position, ongoing maintenance and results of operation of the
Properties (on a combined basis) during such calendar month;
(d)    Simultaneously with the delivery of the financial statements required by
clauses (a) and (b) above an Officer’s Certificate certifying (i) that such
statements (including, with respect to any annual financial statements, the
consolidating schedule for Borrower) fairly set forth or represent the financial
condition and results of operations of Borrower as of the end of such quarter or
calendar year (as applicable) and the results of operations and cash flows of
Borrower for such quarter or calendar year (as applicable), in accordance with
GAAP applied in a manner consistent with that of the most recent audited
financial statements of Sponsor furnished to Lender, subject to normal year-end
adjustments and the absence of footnotes, (ii) stating that such Responsible
Officer has reviewed the provisions of this Agreement and the other Loan
Documents and has made or caused to be made under his or her supervision a
review of the condition and operations of the Relevant Parties with a view to
determining whether the Relevant Parties are in compliance with the provisions
of the Loan Documents to the extent applicable to them, and that such review has
not disclosed, and such Responsible Officer has no knowledge of, the existence
of an Event of Default or Default or, if an Event of Default or Default exists,
describing the nature and period of existence thereof and the action which the
Relevant Parties propose to take or have taken with respect thereto and
(iii) that as of the date of each Officer’s Certificate, no litigation exists
involving Borrower or any Property or Properties in which the amount involved is
$500,000 (in the aggregate) or more or in which all or substantially all of the
potential liability is not covered by insurance, or, if so, specifying such
litigation and the actions being taking in relation thereto.
(e)    Simultaneously with the delivery of the financial statements required by
clauses (a) and (b) above, a reconciliation for the relevant period of net
income to Underwritten Net Cash Flow;
(f)    Simultaneously with the delivery of the financial statements required by
clause (a) above, a duly completed Compliance Certificate, with appropriate
insertions, containing the data and calculations set forth on Exhibit C;
(g)    Simultaneously with the delivery of the financial statements required by
clause (a) above, a certificate executed by a Responsible Officer of Borrower
certifying (i) the current Property Tax assessment amounts and Other Charges
payable in respect of each Property,

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(ii) the payment of all Property Taxes and Other Charges prior to the date such
Property Taxes or Other Charges become delinquent, subject to any contest
conducted in accordance with Section 4.4.8 and (iii) the monthly cost of the
insurance required under in Section 5.1.1;
(h)    Simultaneously with the delivery of the financial statements required by
clause (a) above, a report setting forth a quarterly summary of any and all
Capital Expenditures made at each Property during the prior calendar quarter.
4.3.2    Reporting on Adverse Effects. Promptly and in no event more than
two (2) Business Days after any Responsible Officer of any Loan Party obtains
knowledge of any matter or the occurrence of any event concerning any Loan Party
which would reasonably be expected to have a Material Adverse Effect, written
notice thereof.
4.3.3    Litigation. Prompt written notice to Lender of any litigation or
governmental proceedings pending or to the actual knowledge of a Responsible
Officer of any Loan Party, threatened in writing against any Loan Party or
against Manager with respect to any Property, which would reasonably be expected
to have a Material Adverse Effect or an Individual Material Adverse Effect with
respect to any Property.
4.3.4    Event of Default. Promptly after any Responsible Officer of any Loan
Party obtains knowledge of the occurrence of each Event of Default or Default
(if such Default is continuing on the date of such notice), a statement of a
Responsible Officer of Manager setting forth the details of such Event of
Default or Default and the action which such Loan Party is taking or proposes to
take with respect thereto.
4.3.5    Other Defaults. Promptly and in no event more than two (2) Business
Days after any Responsible Officer of any Loan Party obtains actual knowledge of
any default by any Loan Party under any agreement other than the Loan Documents
to which such Loan Party is a party which would reasonably be expected to have a
Material Adverse Effect, the statement of a Responsible Officer of Manager
setting forth the details of such default and the action which such Loan Party
is taking or proposes to take with respect thereto.
4.3.6    Properties Schedule. Borrower shall deliver to Lender no later than the
tenth (10th) Business Day of each calendar month (i) an updated Properties
Schedule containing each of the data fields set forth on Schedule I (other than
those under the caption “BPO Values” and including for the monthly reports
delivered after October 1, 2014, an entry for the next home owner’s or
condominium owner’s association fee due date); provided that the information
under the caption “Underwritten Net Cash Flow” need only be updated in the
Properties Schedule that is delivered in March, June, September and December of
each year and (ii) a calculation of the monthly turnover rate for the Properties
for the prior calendar month, which shall be equal to the number of Properties
that became vacant during such calendar month divided by the daily average
number of Properties during such calendar month. The foregoing information shall
be delivered together with a certificate of a Responsible Officer of Borrower
certifying that it is true, correct and complete (i) with respect to the
information in the Properties Schedule other than Underwritten Net Cash Flow
data, as of the last day of the preceding calendar month, (ii) with respect to
the Underwritten Net Cash Flow data in the Properties Schedule, for calendar
quarter ended on the last day of the preceding calendar month and (iii) with
respect to the turnover rate of the Properties, for the prior calendar month.

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4.3.7    Disqualified Properties. Promptly and in no event more than ten (10)
Business Days after any Responsible Officer of Borrower obtains actual knowledge
that any Property fails to comply with the Property Representations or the
Property Covenants, written notice thereof and the action that Borrower is
taking or proposes to take with respect thereto.
4.3.8    Security Deposits.
(a)    Within five (5) days of the last day of each calendar month, written
notice of the aggregate amount of security deposits deposited into the Cash
Management Account during such month, which notice shall include (i) the
identity of each applicable Security Deposit Account (including, the name and
identification number of the applicable Security Deposit Account, the name,
address and wiring instructions of the financial institution which maintains the
Security Deposit Account, and the name of the Person to contact at such
financial institution) and (ii) amount of each security deposit allocable to
such Security Deposit Account.
(b)    Within ten (10) Business Days of Lender’s request therefore, a written
accounting of all security deposits held in connection with the Leases,
including the name and identification number of the accounts in which such
security deposits are held, the name and address of the financial institutions
in which such security deposits are held and the name of the Person to contact
at such financial institution, along with any authority or release necessary for
Lender to obtain information regarding such accounts directly from such
financial institutions.
4.3.9    ERISA Matters.
(a)    As soon as reasonably possible, and in any event within thirty (30) days
after a Responsible Officer of a Loan Party has actual knowledge of the
occurrence of any ERISA Event, written notice of, and any requested information
relating to such ERISA Event.
(b)    As soon as reasonably possible after a Responsible Officer of a Loan
Party has actual knowledge of the occurrence of a Plan Termination Event,
written notice of any action that any Loan Party or any of its ERISA Affiliates
proposes to take with respect thereto, along with a copy of any notices received
from or filed with the PBGC, the IRS or any Multiemployer Plan with respect to
such Plan Termination Event, as applicable.
4.3.10    [Intentionally omitted.].
4.3.11    Periodic Rating Agency Information. Borrower shall, or shall cause the
Manager pursuant to the Management Agreement to, deliver to the Rating Agencies
the information and reports set forth on Schedule X (the “Periodic Rating Agency
Information”) at the times set forth therein.
4.3.12    Other Reports.Borrower shall deliver to Lender, within ten (10)
Business Days of the receipt thereof by Borrower, a copy of all material reports
prepared by Manager pursuant to the Management Agreement, including, without
limitation, the Annual Budget.
(b)    Borrower shall deliver to Lender, within ten (10) Business Days of
Lender's request therefore, copies of any requested Property Taz, Other Charge
or insurance bills, statements or invoices received by Borrower or any Loan
Party with respect to the Properties.

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(c)    Borrower shall, as soon as reasonably practicable after request by Lender
furnish or cause to be furnished to Lender in such manner and in such detail as
may be reasonably requested by Lender, such additional information, documents,
records or reports as may be reasonably requested with respect to the Property
or the conditions or operations, financial or otherwise, of the Relevant
Parties.
Section 4.4    Property Covenants. Borrower shall comply with the following
covenants with respect to each Property:
4.4.1    Ownership of the Property. Borrower shall take all necessary action to
retain title to the Property and the related Collateral irrevocably in Borrower,
free and clear of any Liens other than Permitted Liens. Borrower shall warrant
and defend the title to the Property and every part thereof, subject only to
Permitted Liens, in each case against the claims of all Persons whomsoever.
4.4.2    Liens Against the Property. Borrower shall not and shall cause each
Borrower TRS not to create, incur, assume or permit to exist any Lien on any
direct or indirect interest in any Property, except for the Permitted Liens.
4.4.3    Title Insurance for the Property. If a Title Insurance Policy or a
Title Insurance Owner’s Policy provided in the Property File with respect to the
Property initially consists of a marked or initialed binding commitment, then
Borrower shall deliver to Lender for the Property File a fully issued Title
Insurance Policy or Title Insurance Owner’s Policy, as applicable, for such
Property in the form and with the coverages and endorsements as provided in such
marked or initialed binding commitment within one hundred eighty (180) days
following the date hereof.
4.4.4    Deeds. If a deed provided in the Property File with respect to the
Property does not initially consist of a certified copy of the original
conforming recorded deed from the applicable recording office, then Borrower
shall deliver a certified copy of such recorded deed to Lender for the Property
File within three hundred sixty (360) days following the date hereof.
4.4.5    Mortgage Documents. If any Mortgage Documents provided in the Property
File with respect to the Property initially consists of a copy of such Mortgage
Documents in recordable form that have been submitted by the title insurance
company for recording in the jurisdiction in which the Property is located, then
Borrower shall deliver a copy to Lender for the Property File a certified or
file stamped (in each by the applicable land registry) executed original of such
Mortgage Documents within one hundred eighty (180) days following the date
hereof.
4.4.6    Condition of the Property. Except if the Property has suffered a
Casualty and is in the process being restored in accordance with Section 5.4,
Borrower shall and shall cause each Borrower TRS to keep and maintain in all
material respects the Property in a good, safe and habitable condition and
repair and free of and clear of any damage or waste, and from time to time make,
or cause to be made, in all material respects, all reasonably necessary repairs,
renewals, replacements, betterments and improvements thereto, all in compliance
with the Renovation Standards and applicable Legal Requirements in all material
respects.
4.4.7    Compliance with Legal Requirements. The Property (including the leasing
and intended use thereof) shall comply in all material respects with all
applicable Legal

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Requirements, including, without limitation, building and zoning ordinances and
codes and all certifications, permits, licenses and approvals, including without
limitation, certificates of completion and occupancy permits, required for the
legal leasing, use, occupancy, habitability and operation of the Property, all
such certifications, permits, licenses and approvals shall be maintained in full
force and effect, except as would not reasonably be expected to have an
Individual Material Adverse Effect on the Property. Borrower shall and shall
cause each Borrower TRS to obtain and maintain in full force and effect all
consents, approvals, orders, certifications, permits, licenses and
authorizations of, and make all filings with or notices to, any court or
Governmental Authority related to the operation, use or leasing of the Property
except where the failure to obtain would not reasonably be expected to have an
Individual Material Adverse Effect with respect to the Property. Borrower shall
not and shall not permit any other Loan Party, any Manager or any other Person
in occupancy of or involved with the operation, use or leasing of the Property
to commit any act or omission affording any Governmental Authority the right of
forfeiture as against the Property or any part thereof.
4.4.8    Property Taxes and Other Charges. Borrower shall promptly pay or cause
to be paid all Property Taxes and Other Charges now or hereafter levied,
assessed or imposed on it as the same become due and payable and shall furnish
to Lender receipts for the payment of the Property Taxes and Other Charges prior
to the date the same shall become delinquent, and shall promptly pay for all
utility services provided to the Property as the same become due and payable
(other than any such utilities which are, pursuant to the terms of any Lease,
required to be paid by the Tenant thereunder directly to the applicable service
provider); provided that, after prior written notice to Lender of its intention
to contest any such Property Taxes or Other Charges, such Loan Party may contest
by appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity of any such Property Taxes and Other Charges and, in such
event, may permit the Property Taxes and Other Charges so contested to remain
unpaid during any period, including appeals, when a Loan Party is in good faith
contesting the same so long as (i) no Event of Default has occurred and remains
uncured, (ii) such proceeding shall be permitted under and be conducted in
accordance with all applicable Legal Requirements, (iii) no Property or other
Collateral nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, canceled or lost, (iv) the applicable Loan Party
has set aside on its books adequate reserves in accordance with GAAP, and the
non-payment or non-discharge of such Property Taxes and Other Charges would not
reasonably be expected to have an Individual Material Adverse Effect on the
applicable Property, (v) enforcement of the contested Property Taxes and Other
Charges is effectively stayed for the entire duration of such contest and no
Lien is imposed on any Property or other Collateral which is reasonably expected
to have an Individual Material Adverse Effect, (vi) any Property Taxes and Other
Charges determined to be due, together with any interest or penalties thereon,
is promptly paid as required after final resolution of such contest, (vii) to
the extent such Property Taxes and Other Charges (when aggregated with all other
Taxes that any Loan Party is then contesting under this Section 4.1.3 or Section
4.4.8 and for which Borrower has not delivered to Lender any Contest Security)
exceed $2,500,000, Borrower shall deliver to Lender either (A) cash, or other
security as may be approved by Lender, in an amount sufficient to insure the
payment of any such Property Taxes and Other Charges, together with all interest
and penalties thereon or (B) a payment and performance bond in an amount equal
to one hundred percent (100%) of the contested amount from a surety acceptable
to Lender in its reasonable discretion, (viii) failure to pay such Property
Taxes and Other Charges will not subject Lender to any civil or criminal
liability, (ix) such contest shall not affect the ownership, use or occupancy of
any Property, and (x) Borrower shall,

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upon request by Lender, give Lender prompt notice of the status of such
proceedings and/or confirmation of the continuing satisfaction of the conditions
set forth in clauses (i) through (ix) of this Section 4.1.3. Notwithstanding the
foregoing, Borrower shall pay any contested Property Taxes and Other Charges
(or, if cash or other security has been provided, Lender may pay over any such
cash or other security held by Lender to the claimant entitled thereto) if, in
the Lender’s reasonable judgment, any Property or other Collateral (or any part
thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost or there shall be any danger of the Lien of any
Collateral Document being primed by any related Lien.
4.4.9    Compliance with Agreements Relating to the Properties. Borrower shall
not and shall cause each Borrower TRS not to enter into any agreement or
instrument or become subject to any restriction which would reasonably be
expected to have an Individual Material Adverse Effect on any Property. Borrower
shall not and shall cause each Borrower TRS not to default in any material
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which any
Property is bound. Borrower shall not and shall cause each Borrower TRS not to
have a material financial obligation under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument by which any Property is
bound, other than obligations under the Loan Documents. Borrower shall not and
shall cause each Borrower TRS not to default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Permitted Lien with respect to any Property. No
Property nor any part thereof shall be subject to any purchase options, rights
of first refusal, rights of first offer or other similar rights in favor of any
Tenant or other third parties.
4.4.10    Leasing. Borrower shall not and shall cause each Borrower TRS not to
enter into any Lease (including any renewals or extensions of any existing
Lease) for any Property unless such Lease is an Eligible Lease.     

ARTICLE 5
INSURANCE, CASUALTY AND CONDEMNATION
Section 5.1    Insurance.
5.1.1    Insurance Policies.
(a)    Borrower, at its sole cost and expense, shall obtain and maintain during
the entire Term, or cause to be maintained, insurance policies for Borrower and
the Properties providing at least the following coverages:
(i)    comprehensive “all risk” or special causes of loss form insurance, as is
available in the insurance market as of the Closing Date, including, but not
limited to, loss caused by any type of windstorm (including hail) on the
Properties (A) in an amount equal to one hundred percent (100%) of the “full
replacement cost”, which for purposes of this Agreement shall mean actual
replacement value of the Properties, subject to a loss limit equal to
$25,000,000 per occurrence; (B) containing an agreed amount endorsement with
respect to the Improvements and personal property at any Property waiving all
co-insurance provisions or to be written on a no co-insurance form and (C)
providing for no deductible in excess of $250,000 (it being understood that, so
long as no

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Default or Event of Default has occurred and is continuing (1) Borrower may
utilize a $3,000,000 aggregate deductible stop loss subject to a $25,000 per
occurrence deductible and a $25,000 maintenance deductible following the
exhaustion of the aggregate, (2) the aggregate stop loss does not contain any
losses arising from named windstorm, earthquake or flood, (3) the perils of
named windstorm or flood shall be permitted to have a per occurrence deductible
of five percent (5%) of the total insurable value of the affected Properties
(with a minimum deductible of $250,000 per occurrence for any and all affected
Properties), (4) the peril of earth movement including but not limited to
earthquake shall be permitted to have a per occurrence deductible of ten percent
(10%) of the total insurable value of the affected Properties (with a minimum
deductible of $250,000 per occurrence for any and all affected Properties) and
(5) the peril of “other wind and hail” shall be permitted to have a per
occurrence deductible of three percent (3%) of the total insurable value of the
affected Properties (with a minimum deductible of $250,000 per occurrence for
any and all affected Properties)). In addition, Borrower shall obtain (x) if any
portion of a Property is currently or at any time in the future located in a
federally designated “special flood hazard area”, flood hazard insurance in an
amount equal to the maximum amount of such insurance available under the
National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973
or the National Flood Insurance Reform Act of 1994, as each may be amended, plus
excess amounts as Lender shall require, (y) named storm insurance in an amount
not less than the greater of $25,000,000 and the Probable Maximum Loss (PML) or
Scenario Expected Limit (SEL) based upon a storm risk analysis for a 475 year
event for the entire portfolio at risk (such analysis to be secured by the
applicable Borrower utilizing a third-party engineering firm qualified to
perform such storm risk analysis using the most current RMS software, or its
equivalent, to include consideration of storm surge, if applicable and loss
amplification, at the expense of the applicable Borrower at least two times per
year or more frequently as may reasonably be requested by Lender and shared with
Lender presented by the Properties located in areas prone to named storm
activity); and (z) earthquake insurance in an amount equal to or greater than
the Probable Maximum Loss (PML) or Scenario Expected Limit (SEL) based upon a
seismic risk analysis for a 475 year event for the entire portfolio at risk
(such analysis to be secured by the applicable Borrower utilizing a third-party
engineering firm qualified to perform such seismic risk analysis using the most
current RMS software, or its equivalent, to include consideration of loss
amplification, at the expense of the applicable Borrower at least two times per
year or more frequently as may reasonably be requested by Lender and shared with
Lender presented by the Properties located in areas prone to seismic activity);
provided that the insurance pursuant to subclauses (x), (y) and (z) hereof shall
be on terms consistent with the comprehensive all risk insurance policy required
under this Section 5.1.1(a)(i);
(ii)    business income or rental loss insurance, written on an “Actual Loss
Sustained Basis” (A) with loss payable to Lender for the benefit of Lenders; (B)
covering all risks required to be covered by the insurance provided for in
Section 5.1.1(a)(i), (ii), (iv) and (viii); (C) in an amount equal to one
hundred percent (100%) of the aggregate projected net income from the operation
of the Properties for a period of at least twelve (12) months after the date of
the Casualty; and (D) containing an extended period of indemnity endorsement
which provides that after the physical loss to the Improvements and personal
property at a Property has been repaired, the continued loss of income will be
insured until such income either returns to the same level it was at prior

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to the loss, or the expiration of thirty (30) days from the date that the
applicable Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire prior to
the end of such period. The amount of such business income or rental loss
insurance shall be determined prior to the Closing Date and at least once each
year thereafter based on Borrower’ reasonable estimate of the net income from
each Property for the succeeding twelve (12) month period. All proceeds payable
to Lender pursuant to this subsection shall be held by Lender and shall be
applied in Lender’s sole discretion to (x) the Obligations or (y) Operating
Expenses approved by Lender in its sole discretion; provided, however, that
nothing herein contained shall be deemed to relieve Borrower of their obligation
to pay the Obligations on the respective dates of payment provided for in this
Agreement and the other Loan Documents except to the extent such amounts are
actually paid out of the proceeds of such business income insurance;
(iii)    at all times during which structural construction, repairs or
renovations are being made with respect to any Property, and only if each of the
property coverage form and the liability insurance coverage form does not
otherwise apply, (A) liability insurance covering claims not covered by or under
the terms or provisions of the above mentioned commercial general liability
insurance policy, (B) the insurance provided for in Section 5.1.1(a) written in
a so-called builder’s risk completed value form including coverage for all
insurable hard and soft costs of construction (x) on a non-reporting basis,
(y) against all risks insured against pursuant to Section 5.1.1(a)(i), (iii),
(iv) and (viii), (z) including permission to occupy such Property and (C) with
an agreed amount endorsement waiving co-insurance provisions;
(iv)    commercial general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about any
Property, such insurance (A) to be on the so-called “occurrence” form with a
combined limit of not less than One Million and No/100 Dollars ($1,000,000.00)
per occurrence and Two Million and No/100 Dollars ($2,000,000.00) in the
aggregate “per location”; (B) to continue at not less than the aforesaid limit
until required to be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate and (C) to cover at least the
following hazards: (1) premises and operations; (2) products and completed
operations on an “if any” basis; (3) independent contractors; (4) blanket
contractual liability for all insured contracts and (5) contractual liability
covering the indemnities contained in any Loan Document to the extent the same
is available;
(v)    automobile liability coverage for all owned and non-owned vehicles,
including rented and leased vehicles containing minimum limits per occurrence of
One Million and No/100 Dollars ($1,000,000.00);
(vi)    if applicable, worker’s compensation subject to the worker’s
compensation laws of the applicable state, and employer’s liability in amounts
reasonably acceptable to Lender;
(vii)    umbrella and excess liability insurance in an amount not less than
Fifty Million and No/100 Dollars ($50,000,000.00) per occurrence and in the
aggregate on terms consistent with the commercial general liability insurance
policy required under

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Section 5.1.1(a)(iv), and including employer liability and automobile liability,
if required; and
(viii)    upon sixty (60) days’ written notice, such other reasonable insurance,
and in such reasonable amounts as Lender from time to time may reasonably
request against such other insurable hazards which at the time are commonly
insured against for properties similar to the Properties located in or around
the region in which Properties are located.
(b)    All insurance provided for in Section 5.1.1(a) shall be obtained under
valid and enforceable policies (collectively, the “Policies” or in the singular,
the “Policy”) and shall be subject to the approval of Lender as to form and
substance, including insurance companies, amounts, deductibles, covered
properties (which, with respect to Section 5.1.1(a)(i), shall only include the
Properties), loss payees and insureds. Certificates of insurance evidencing the
Policies shall be delivered to Lender on the Closing Date with respect to the
current Policies. Not less than ten (10) days prior to the expiration dates of
the Policies theretofore furnished to Lender, certificates of insurance
evidencing the Policies (and, upon the written request of Lender, copies of such
Policies) accompanied by evidence satisfactory to Lender of payment of the
premiums then due thereunder (the “Insurance Premiums”), shall be delivered by
Borrower to Lender.
(c)    All Policies of insurance provided for or contemplated by
Section 5.1.1(a), except for the Policy referenced in Section 5.1.1(a)(v), shall
name Borrower as the insured and Lender and its successors and/or assigns as
mortgagee and loss payee, as its interests may appear, and in the case of
property damage, boiler and machinery, windstorm, flood and earthquake
insurance, shall contain a so-called New York standard non-contributing
mortgagee clause in favor of Lender providing that the loss thereunder shall be
payable to Lender unless below the threshold for Borrower to handle such claim
without Lender intervention as provided in Section 5.2. Additionally, if
Borrower obtains property insurance coverage in addition to or in excess of that
required by Section 5.1.1(a)(i), then such insurance policies shall also contain
a so-called New York standard non-contributing mortgagee clause in favor of
Lender providing that the loss thereunder shall be payable to Lender.
(d)    All Policies of insurance provided for in Section 5.1.1(a), except for
the Policies referenced in Section 5.1.1(a)(vi), shall contain clauses or
endorsements to the effect that:
(i)    no act or negligence of Borrower, or anyone acting for Borrower, or of
any Tenant or other occupant, or failure to comply with the provisions of any
Policy, which might otherwise result in a forfeiture of the insurance or any
part thereof, shall in any way affect the validity or enforceability of the
insurance insofar as Lender is concerned;
(ii)    the Policy shall not be canceled without at least thirty (30) days’
written notice to Lender and any other party named therein as an additional
insured (other than in the case of non-payment in which case only ten days prior
notice, or the shortest time allowed by applicable Legal Requirement (whichever
is longer), will be required) and shall not be materially changed (other than to
increase the coverage provided thereby) without such a thirty (30) day notice;

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(iii)    Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder; and
(iv)    the issuers thereof and/or the Borrowers shall give notice to Lender if
a Policy has not been renewed ten (10) days prior to its expiration; and
(e)    If at any time Lender is not in receipt of written evidence that all
insurance required hereunder is in full force and effect, Lender shall have the
right, without notice to Borrower, to take such action as Lender deems necessary
to protect its interest in the Properties, including the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate and all
premiums incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon
demand and until paid shall be secured by the Collateral Documents and shall
bear interest at the Default Rate.
(f)    In the event of foreclosure of the pledge of the Equity Interests of
Borrower pursuant to Borrower Security Agreement the Policies shall remain in
full force and effect.
5.1.2    Insurance Company. All Policies required pursuant to Section 5.1.1
shall (i) be issued by financially sound and responsible insurance companies
authorized to do business in the states where the applicable Properties are
located and having a rating of “A3” or better by Moody’s or, if Moody’s does not
provide a rating of an applicable insurance company, a rating of “A-” or better
by S&P or Fitch, provided, however, that if Borrower elects to have its
insurance coverage provided by a syndicate of insurers, then, if such syndicate
consists of five (5) or more members, (A) at least sixty percent (60%) of the
insurance coverage (or seventy-five percent (75%) if such syndicate consists of
four (4) or fewer members) and one hundred (100%) of the first layer of such
insurance coverage shall be provided by insurance companies having a rating of
“A3” or better by Moody’s or, if Moody’s does not provide a rating of an
applicable insurance company, a rating of “A-” or better by S&P or Fitch and (B)
the remaining forty percent (40%) of the insurance coverage (or the remaining
twenty-five percent (25%) if such syndicate consists of four (4) or fewer
members) shall be provided by insurance companies having a rating of “Baa2” by
Moody’s or better or, if Moody’s does not provide a rating of an applicable
insurance company, a rating of “BBB” or better by S&P or Fitch; (ii) shall, with
respect to all property insurance policies, name Lender and its successors
and/or assigns as their interest may appear; (iii) shall, with respect to all
property insurance policies and rental loss and/or business interruption
insurance policies, contain a Lender’s Loss Payable Endorsement, or their
equivalents, naming Lender as the person to whom all payments made by such
insurance company shall be paid; (iv) shall, with respect to all liability
policies, name Lender and its successors and/or assigns as an additional
insured; (v) shall contain a waiver of subrogation against Lender; (vi) shall
contain such provisions as Lender deems reasonably necessary or desirable to
protect its interest including endorsements providing (A) that neither Borrower,
Lender nor any other party shall be a co-insurer under said Policies, (B) that
Lender shall receive at least thirty (30) days prior written notice of any
modification, reduction or cancellation, and (C) for a deductible per loss of an
amount not more than that which is customarily maintained by prudent owners of
properties with a standard of operation and maintenance comparable to and in the
general vicinity of the Properties, but in no event in excess of an amount
reasonably acceptable to Lender; and (vii) shall be satisfactory in form and
substance to Lender and shall be approved by Lender as to amounts, form, risk
coverage, deductibles, loss payees and insureds.

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In addition to the insurance coverages described in Section 5.1.1, Borrower
shall obtain such other insurance as may from time to time be reasonably
required by Lender in order to protect its interests. Certified copies of the
Policies shall be delivered to Lender at the address below (or to such other
address or Person as Lender shall designate from time to time by notice to
Borrower) on the date hereof with respect to the current Policies and within
thirty (30) days after the effective date thereof with respect to all renewal
Policies:
GERMAN AMERICAN CAPITAL CORPORATION
60 Wall Street, 10th Floor
New York, NY 10005
Attn: Mary Brundage
Borrower shall pay the Insurance Premiums annually in advance as the same become
due and payable and shall furnish to Lender evidence of the renewal of each of
the Policies with receipts for the payment of the Insurance Premiums or other
evidence of such payment reasonably satisfactory to Lender (provided, however,
that Borrower shall not be required to pay such Insurance Premiums nor furnish
such evidence of payment to Lender in the event that the amounts required to pay
such Insurance Premiums have been deposited into the Insurance Account pursuant
to Section 6.3). Within thirty (30) days after request by Lender, Borrower shall
obtain such increases in the amounts of coverage required hereunder as may be
reasonably requested by Lender, taking into consideration changes in the value
of money over time, changes in liability laws, changes in prudent customs and
practices.
5.1.3    Special Insurance Reserve. Notwithstanding anything in this Section 5.1
to the contrary, Borrower shall be permitted to obtain and maintain insurance
policies with deductibles in excess of the amounts specified in this Section
5.1, so long as Borrower shall have deposited into and maintains at all times in
the Special Insurance Reserve Account an amount equal to the difference between
such higher deductible and the applicable deductible specified in this Section
5.1 (such amount, the “Excess Deductible”).
Section 5.2    Casualty. If a Property is damaged or destroyed, in whole or in
part, by fire or other casualty (a “Casualty”), Borrower shall give prompt
notice thereof to Lender. Lender may, but shall not be obligated to make proof
of loss if not made promptly by Borrower. In addition, Lender may participate in
any settlement discussions with any insurance companies (and shall approve any
final settlement) (i) if an Event of Default is continuing or (ii) with respect
to any Casualty in which the Net Proceeds or the costs of completing the
Restoration are reasonably expected to be equal to or greater than the Casualty
Threshold Amount and Borrower shall deliver to Lender all instruments required
by Lender to permit such participation. Any Insurance Proceeds in connection
with any Casualty (whether or not Lender elects to settle and adjust the claim
or Borrower settles such claim) shall be deposited directly into, or shall be
due and payable solely to Lender to be held in, the Casualty and Condemnation
Account in accordance with the terms of this Agreement. If Borrower or any party
other than Lender receives any Insurance Proceeds or Condemnation Proceeds,
Borrower shall immediately deposit into, or deliver such proceeds to Lender to
be held in, the Casualty and Condemnation Account and shall endorse, and cause
all such third parties to endorse, check payable therefor to the order of
Lender. Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to endorse any such check payable to the order of
Lender. Borrower hereby releases Lender from any and all liability with respect
to the settlement and adjustment by Lender of any claims in respect of any
Casualty.
    

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Section 5.3    Condemnation. Borrower shall promptly give Lender notice of the
actual or threatened commencement of any proceeding for the Condemnation of all
or any portion of a Property and shall deliver to Lender copies of any and all
papers served in connection with such proceedings. Lender may participate in any
such proceedings if an Event of Default is continuing, and in such cases
Borrower shall from time to time deliver to Lender all instruments requested by
it to permit such participation. Borrower shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Lender, its attorneys and
experts, and cooperate with them in the carrying on or defense of any such
proceedings which is reasonably expected to involve an Award of an amount
greater than the Casualty Threshold Amount. Notwithstanding any taking by any
public or quasi-public authority through Condemnation or otherwise (including,
but not limited to, any transfer made in lieu of or in anticipation of the
exercise of such taking), Borrower shall continue to pay the Debt at the time
and in the manner provided for its payment in the Note and in this Agreement and
the Debt shall not be reduced until any Condemnation Proceeds shall have been
actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. If Borrower or any party
other than Lender receives any Condemnation Proceeds, Borrower shall immediately
deposit into, or deliver such proceeds to Lender to be held in, the Casualty and
Condemnation Account and shall endorse, and cause all such third parties to
endorse, a check payable therefore to the order of Lender. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. Net Proceeds from a Condemnation shall be applied as
follows:
(a)    If a partial Condemnation of a Property does not interfere with the use
of such Property as a residential rental property, then the Net Proceeds paid by
the condemning authority shall be applied to the prepayment of the Debt in
accordance with Section 2.4.3(c).
(b)    If a partial Condemnation of a Property does interfere with the use of
such Property as a residential rental property or if there occurs a complete
Condemnation of a Property (each, a “Fully Condemned Property”), then (i) if no
Event of Default shall have occurred and be continuing and, within thirty (30)
days of the date of the occurrence of such Condemnation, Borrower delivers to
Lender a written undertaking to substitute the Fully Condemned Property with a
Substitute Property in accordance with the requirements of Section 2.4.3(a),
then (A) if Net Proceeds are paid by the condemning authority directly to
Borrower subsequent to such substitution, such Net Proceeds may be retained by
Borrower (for the avoidance of doubt, Net Proceeds received by Borrower prior to
such substitution shall be immediately paid to Lender to be held in the Casualty
and Condemnation Account as required by Section 5.2), (B) if Net Proceeds are
paid by the condemning authority to Lender, such Net Proceeds will be disbursed
by Lender to Borrower upon the consummation of such substitution and (C)
Borrower shall provide a Substitute Property in accordance with the requirements
of Section 2.4.3(a) and (ii) if an Event of Default shall have occurred and be
continuing or Borrower fails to deliver such an undertaking to Lender, then (A)
Lender may retain any Net Proceeds received by it, (B) Borrower shall
immediately deliver to Lender any Net Proceeds paid to Borrower, (C) all such
Net Proceeds shall be applied to the prepayment of the Debt in accordance with
Section 2.4.3(c) and (D) Borrower shall prepay the Loan in an amount equal to
the positive difference between such Net Proceeds and the Allocated Loan Amount
for the Fully Condemned Property, together with all interest and other amounts
required to be paid in connection therewith under Section 2.4.5 (collectively,
the “Fully Condemned Property Prepayment Amounts”). Following Borrower’s written
request after either (1) the substitution

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of a Substitute Property for such Fully Condemned Property in accordance with
the conditions set forth above or (2) receipt by Lender of the Net Proceeds and
payment by Borrower of the Fully Condemned Property Prepayment Amounts, Lender
shall release the Fully Condemned Property from the applicable Mortgage
Documents and related Lien, provided, that (x) Borrower has delivered to Lender
a draft release (and, in the event the Mortgage and the Assignment of Leases and
Rents applicable to the Fully Condemned Property encumbers other Property(ies)
in addition to the Fully Condemned Property, such release shall be a partial
release that relates only to the Fully Condemned Property and does not affect
the Liens and security interests encumbering or on the other Property(ies)) in
form and substance appropriate for the jurisdiction in which such Fully
Condemned Property is located and shall contain standard provisions protecting
the rights of Lender and (y) Borrower shall pay all costs, taxes and expenses
associated with such release (including, without limitation, cost to file and
record the release and Lender’s reasonable out-of-pocket attorneys’ fees).
Section 5.4    Restoration. The following provisions shall apply in connection
with the Restoration of Properties affected by a Casualty:
(a)    If the Net Proceeds reasonably expected to be received in connection with
any single Casualty event is less than the Casualty Threshold Amount, then, (i)
if no Event of Default shall have occurred and be continuing and, within sixty
(60) days of the date of the occurrence of such Casualty, Borrower delivers to
Lender a written undertaking to expeditiously commence and to diligently pursue
to satisfactory completion the Restoration of the affected Properties in
accordance with the terms of this Agreement, then (A) if Net Proceeds are paid
by the insurance company directly to Borrower subsequent to delivering such
undertaking, such Net Proceeds may be retained by Borrower (for the avoidance of
doubt, Net Proceeds received by Borrower prior to delivering such undertaking
shall be immediately paid to Lender to be held in the Casualty and Condemnation
Account as required by Section 5.2), (B) if Net Proceeds are paid by the
insurance company to Lender, such Net Proceeds will be disbursed by Lender to
Borrower and (C) Borrower shall conduct the Restoration of the affected
Properties in accordance with the terms of Section 5.4(c) and (ii) if an Event
of Default shall have occurred and be continuing or Borrower fails to deliver
such an undertaking to Lender, then (A) Lender may retain any Net Proceeds
received by it, (B) Borrower shall immediately deliver to Lender any Net
Proceeds paid to Borrower as required by Section 5.2, (C) such Net Proceeds
shall be applied to the prepayment of the Debt in accordance with
Section 2.4.3(c), (D) Borrower shall prepay the Loan in an amount equal to the
positive difference between such Net Proceeds and the Allocated Loan Amount for
the affected Properties, together with all interest and other amounts required
to be paid in connection therewith under Section 2.4.5, and (E) following
Borrower’s written request and receipt by Lender of the Net Proceeds and payment
by Borrower of the amounts set forth in clause (D) above, Lender shall release
the affected Properties from the applicable Mortgage Documents and related
Liens, provided, that (x) Borrower has delivered to Lender draft releases (and,
in the event any of the Mortgages and the Assignments of Leases and Rents
applicable to any of the affected Properties encumber other Property(ies) in
addition to the affected Properties, such release shall be a partial release
that relates only to the affected Property(ies) and does not affect the Liens
and security interests encumbering or on the other Property(ies)) in form and
substance appropriate for the jurisdiction in which such affected Properties are
located and shall contain standard provisions protecting the rights of Lender
and (y) Borrower shall pay all costs, taxes and expenses associated with such
release (including,

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without limitation, cost to file and record the release and Lender’s reasonable
out-of-pocket attorneys’ fees).
(b)    If the Net Proceeds reasonably expected to be received in connection with
any single Casualty event is greater than the Casualty Threshold Amount, then,
(i) if no Event of Default shall have occurred and be continuing and, within
sixty (60) days of the date of the occurrence of such Casualty, Borrower
delivers to Lender a written undertaking to expeditiously commence and to
diligently pursue to satisfactory completion the Restoration of the affected
Properties in accordance with the terms of this Agreement, then (A) Borrower
shall immediately deliver to Lender to be held in the Casualty and Condemnation
Account any Net Proceeds paid to Borrower as required by Section 5.2 and (B)
Borrower shall conduct the Restoration of the affected Properties in accordance
with the terms of and subject to the conditions of Section 5.4(d) and (ii) if an
Event of Default shall have occurred and be continuing or Borrower fails to
deliver such an undertaking to Lender, then (A) Lender may retain any Net
Proceeds received by it, (B) Borrower shall immediately deliver to Lender any
Net Proceeds paid to Borrower as required by Section 5.2, (C) such Net Proceeds
shall be applied to the prepayment of the Debt in accordance with
Section 2.4.3(c), (D) Borrower shall prepay the Loan in an amount equal to the
positive difference between such Net Proceeds and the Allocated Loan Amount for
the affected Properties, together with all interest and other amounts required
to be paid in connection therewith under Section 2.4.5, and (E) following
Borrower’s written request and receipt by Lender of the Net Proceeds and payment
by Borrower of the amounts set forth in clause (D) above, Lender shall release
the affected Properties from the applicable Mortgage Documents and related
Liens, provided, that (x) Borrower has delivered to Lender draft releases (and,
in the event any of the Mortgages and the Assignments of Leases and Rents
applicable to any of the affected Properties encumber other Property(ies) in
addition to the affected Properties, such release shall be a partial release
that relates only to the affected Property(ies) and does not affect the Liens
and security interests encumbering or on the other Property(ies)) in form and
substance appropriate for the jurisdiction in which such affected Properties are
located and shall contain standard provisions protecting the rights of Lender
and (y) Borrower shall pay all costs, taxes and expenses associated with such
release (including, without limitation, cost to file and record the release and
Lender’s reasonable attorneys’ fees).
(c)    If Borrower elects to undertake the Restoration of a Property or
Properties pursuant to Section 5.4(a), (i) Borrower shall commence the
Restoration as soon as reasonably practicable (but in no event later than ninety
(90) days after such Casualty occurs) and shall diligently pursue the same to
satisfactory completion; (ii) Borrower shall cause the affected Property and the
use thereof after the Restoration to be in compliance with and permitted under
all applicable Legal Requirements and such Property, after Restoration, shall be
of the same or better character as prior to such damage or destruction; (iii)
the Restoration shall be done and completed by Borrower in an expeditious and
diligent fashion and in compliance with all applicable Legal Requirements and
the Renovation Standards and (iv) Borrower shall deliver, or cause to be
delivered, to Lender a signed detailed budget approved in writing by Borrower’s
architect or engineer stating the entire cost of completing the Restoration,
which budget shall be reasonably acceptable to Lender.
(d)    If Borrower elects to undertake the Restoration of a Property or
Properties pursuant to Section 5.4(b), the following provisions shall apply:

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(i)    the Net Proceeds shall be made available to Borrower for Restoration upon
the determination of Lender that the following conditions are met: (i) Borrower
shall commence the Restoration as soon as reasonably practicable (but in no
event later than ninety (90) days after such Casualty occurs) and shall
diligently pursue the same to satisfactory completion; (ii) Lender shall be
satisfied that any operating deficits, including all scheduled payments of
principal and interest under the Note, which will be incurred with respect to
the Properties as a result of the occurrence of the Casualty, whichever the case
may be, will be covered out of (1) the Net Proceeds, (2) the insurance coverage
referred to in Section 5.1.1(a)(ii), if applicable, or (3) by other funds of
Borrower; (iii) Lender shall be satisfied that the Restoration will be completed
on or before the earliest to occur of (1) the date six (6) months prior to the
Stated Maturity Date, as extended pursuant to Section 2.7, (2) the earliest date
required for such completion under the terms of any Lease, (3) such time as may
be required under applicable Legal Requirements or (4) six (6) months prior to
the expiration of the insurance coverage referred to in Section 5.1.1(a)(ii);
(iv) Borrower shall cause the affected Property and the use thereof after the
Restoration to be in compliance with and permitted under all applicable Legal
Requirements and such Property, after Restoration, shall be of the same
character as prior to such damage or destruction; (v) the Restoration shall be
done and completed by Borrower in an expeditious and diligent fashion and in
compliance with all applicable Legal Requirements and the Renovation Standards;
(vi) Borrower shall deliver, or cause to be delivered, to Lender a signed
detailed budget approved in writing by Borrower’s architect or engineer stating
the entire cost of completing the Restoration, which budget shall be reasonably
acceptable to Lender and (vii) the Net Proceeds together with any cash or cash
equivalent deposited by Borrower with Lender are sufficient in Lender’s
discretion to cover the cost of the Restoration.
(ii)    The Net Proceeds shall be held by Lender in the Casualty and
Condemnation Account and, until disbursed in accordance with the provisions of
this Section 5.4(d), shall constitute additional security for the Debt and other
obligations under the Loan Documents. The Net Proceeds shall be disbursed by
Lender to, or as directed by, Borrower from time to time during the course of
the Restoration, upon receipt of evidence satisfactory to Lender that (A) all
materials installed and work and labor performed (except to the extent that they
are to be paid for out of the requested disbursement) in connection with the
Restoration have been paid for in full, and (B) there exist no notices of
pendency, stop orders, mechanic’s or materialman’s liens or notices of intention
to file same, or any other liens or encumbrances of any nature whatsoever on the
Properties which have been fully bonded to the satisfaction of Lender and
discharged of record or in the alternative fully insured to the satisfaction of
Lender by the title company issuing the Title Insurance Policy.
(iii)    All plans and specifications required in connection with the
Restoration shall be subject to the prior approval of Lender and an independent
consulting engineer selected by Lender (the “Casualty Consultant”). Lender shall
have the use of the plans and specifications and all permits, licenses and
approvals required or obtained in connection with the Restoration. The identity
of the contractors, subcontractors and materialmen engaged in the Restoration,
as well as the contracts under which they have been engaged, shall be subject to
the approval of Lender and the Casualty Consultant. All out-of-pocket costs and
expenses incurred by Lender in

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connection with recovering, holding and advancing the Net Proceeds for the
Restoration including, without limitation, reasonable attorneys’ fees and
disbursements and the Casualty Consultant’s fees and disbursements, shall be
paid by Borrower.
(iv)    In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, less the Casualty Retainage. The term “Casualty Retainage”
shall mean, as to each contractor, subcontractor or materialman engaged in the
Restoration, an amount equal to ten percent (10%) of the costs actually incurred
for work in place as part of the Restoration, as certified by the Casualty
Consultant, until the Restoration has been completed. The Casualty Retainage
shall in no event, and notwithstanding anything to the contrary set forth above
in this Section 5.4(d), be less than the amount actually held back by Borrower
from contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 5.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
Governmental Authorities, and Lender receives evidence satisfactory to Lender
that the costs of the Restoration have been paid in full or will be paid in full
out of the Casualty Retainage; provided, however, that Lender will release the
portion of the Casualty Retainage being held with respect to any contractor,
subcontractor or materialman engaged in the Restoration as of the date upon
which (x) the Casualty Consultant certifies to Lender that such contractor,
subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of such contractor’s,
subcontractor’s or materialman’s contract, (y) the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment in full of all
sums due to the contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company issuing the Title Insurance Policy,
and (z) Lender receives an endorsement to the Title Insurance Policy insuring
the continued priority of the Lien of the Mortgage and evidence of payment of
any premium payable for such endorsement. If required by Lender, the release of
any such portion of the Casualty Retainage shall be approved by the surety
company, if any, which has issued a payment or performance bond with respect to
the contractor, subcontractor or materialman.
(v)    Lender shall not be obligated to make disbursements of the Net Proceeds
more frequently than once every calendar month.
(vi)    If at any time the Net Proceeds or the undisbursed balance thereof shall
not, in the opinion of Lender in consultation with the Casualty Consultant, be
sufficient to pay in full the balance of the costs which are estimated by the
Casualty Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the “Net Proceeds
Deficiency”) with Lender (for deposit into the Casualty and Condemnation
Account) before any further disbursement of the Net Proceeds shall be made. The
Net Proceeds Deficiency deposited with Lender shall be deposited by Lender into
the Casualty and Condemnation Account and shall be disbursed for costs actually
incurred in connection with the Restoration on the same conditions

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applicable to the disbursement of the Net Proceeds, and until so disbursed
pursuant to this Section 5.4(d) shall constitute additional security for the
Obligations.
(vii)    The excess, if any, of the Net Proceeds and the remaining balance, if
any, of the Net Proceeds Deficiency deposited into the Casualty and Condemnation
Account after the Casualty Consultant certifies to Lender that the Restoration
has been completed in accordance with the provisions of this Section 5.4(d), and
the receipt by Lender of evidence satisfactory to Lender that all costs incurred
in connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall
be continuing.
(e)    All reasonable out-of-pocket costs and expenses incurred by Lender in
connection with any Restoration including, without limitation, reasonable
attorneys’ fees and disbursements, shall be paid by Borrower.
(f)    Notwithstanding anything to the contrary set forth in this Agreement,
including the provisions of Section 5.3 or Section 5.4, if the Loan is included
in a REMIC Trust and, immediately following a release of any portion of the Lien
of a Mortgage following a Casualty or Condemnation of a Property (but taking
into account any proposed Restoration of the remaining portion of such
Property), the ratio of the unpaid principal balance of the Loan to the value of
the remaining Properties is greater than 125% (such value to be determined, in
Lender’s sole discretion, by any commercially reasonable method permitted to a
REMIC Trust; and which shall exclude the value of personal property (other than
fixtures) or going concern value, if any), the Outstanding Principal Balance
must be paid down (by application of the Net Proceeds or Award, as applicable,
or if such amounts are not sufficient, by Borrower) by a “qualified amount” as
that term is defined in the IRS Revenue Procedure 2010-30, as the same may be
amended, replaced, supplemented or modified from time to time, unless Lender
receives an opinion of counsel that if such amount is not paid, the applicable
Securitization will not fail to maintain its status as a REMIC Trust as a result
of the related release of such portion of the Lien of such Mortgage. If and to
the extent the preceding sentence applies, only such amount of the net Award or
net Insurance Proceeds (as applicable), if any, in excess of the amount required
to pay down the principal balance of the Loan may be released for purposes of
Restoration or released to Borrower as otherwise expressly provided in Section
5.3 or Section 5.4.
(g)    In the event of foreclosure of a Mortgage, or other transfer of title to
a Property or Properties in extinguishment in whole or in part of the Debt all
right, title and interest of Borrower in and to the Policies that are not
blanket Policies then in force concerning such Property or Properties and all
proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other transfer of
title.

ARTICLE 6
CASH MANAGEMENT AND RESERVE FUNDS
Section 6.1    Cash Management Arrangements.
6.1.1    Rent Deposit Account and Cash Management Account.

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(a)    Borrower shall establish and maintain one or more trust accounts for the
purpose of collecting Rents (each, a “Rent Deposit Account”) at a local bank
selected by Borrower and reasonably approved by Lender which shall be an
Eligible Institution (the “Rent Deposit Bank”). Borrower shall require each
current and future Tenant pursuant to an instruction letter in the form of
Exhibit D attached hereto (a “Tenant Direction Letter”) to send all payments of
Rent (whether by cash, check or electronic means) directly to the Rent Deposit
Bank, payable to Borrower, for deposit into the Rent Deposit Account. On or
prior to the Closing Date, Borrower shall enter into the Lockbox Agreement with
the Rent Deposit Bank, pursuant to which the Rent Deposit Bank will be
instructed by Borrower to deposit all Rents received with respect to the
Properties directly into the Rent Deposit Account. Without the consent of
Lender, neither Borrower nor Manager shall terminate, amend, revoke or modify
any Tenant Direction Letter in any manner whatsoever, or direct or cause any
Tenant to pay any amount in any manner other than as provided in the related
Tenant Direction Letter. Without the consent of Lender, neither Borrower nor
Manager shall terminate, amend, revoke or modify the Lockbox Agreement in any
manner whatsoever, or direct or cause the Rent Deposit Bank to deposit Rents in
any bank account other than the Rent Deposit Account. The Rent Deposit Accounts
shall be subject to a Property Account Control Agreement and Borrower and
Manager shall have access to and may make withdrawals from any Rent Deposit
Account for the sole purpose of making refunds of partial payments of Rents to
preserve rights of eviction (as provided below) until the occurrence of an Event
of Default, after which Lender may exercise sole control and dominion over each
Rent Deposit Account and neither Borrower nor Manager shall have the right of
withdrawal from or access to the Rent Deposit Accounts; provided that, for the
avoidance of doubt, no Property Account Control Agreement shall be required with
respect to Security Deposit Accounts. If Borrower or Manager shall receive any
Rents, then Borrower shall and shall cause such Rents to be deposited into a
Rent Deposit Account or the Cash Management Account within three (3) Business
Days after receipt thereof by Borrower or Manager, which deposit shall be deemed
satisfied if Borrower or Manager deliver such Rents to the lockbox maintained
pursuant to the Lockbox Agreement. Borrower shall (or instruct Manager to) cause
all funds on deposit in a Rent Deposit Account to be deposited into the Cash
Management Account every third (3rd) Business Day (or more frequently in
Borrower’s discretion); provided, that so long as no Event of Default exists,
Borrower may cause Rent Deposit Bank to retain a reasonable amount of funds in
the Rent Deposit Accounts (the “Rent Deposit Account Retained Amount”) with
respect to anticipated overdrafts, charge-backs and refunds of partial payments
of Rents to preserve rights of eviction, provided in no event shall the Rent
Deposit Account Retained Amount exceed 2.5% of the total Rents deposited into
the Rent Deposit Accounts during the immediately prior calendar month. Borrower
shall cause any Rents which are paid to Borrower or Manager via wire or other
electronic means to be deposited directly into a Rent Deposit Account or the
Cash Management Account. In the event of any Transfer of any Property, Borrower
shall deposit directly (or shall cause to be deposited directly, whether by the
closing title company or escrow agent or otherwise) into the Cash Management
Account the Net Transfer Proceeds for allocation in accordance with the terms of
this Agreement. In addition, Borrower shall deposit or cause to be deposited any
other Collections received by or on behalf of Borrower directly into the Cash
Management Account within three (3) Business Days following receipt thereof.
Without in any way limiting the foregoing, any Rents and other Collections
received by Borrower or Manager shall be deemed to be collateral for the
Obligations and shall be held in trust for the benefit, and as the property, of
Lender, and such amounts shall not be commingled with any other funds or
property of Borrower or Manager. If any Rent deposited into the Rent Deposit
Accounts constitutes Advance Rent,

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Borrower shall deliver written notice (the “Advance Rent Notice”) to Lender
within three (3) Business Days of such deposit showing the Monthly Payment Dates
to which Advance Rents received by Borrower are applicable and should be
disbursed from the Cash Management Account.
(b)    Borrower shall establish and maintain a segregated Eligible Account (the
“Cash Management Account”) to be held by the Cash Management Account Bank in
trust and for the benefit of Lender, which Cash Management Account shall be
under the sole dominion and control of Lender or the Servicer on behalf of
Lender. Borrower hereby grants to Lender a first priority security interest in
the Cash Management Account and all deposits at any time contained therein and
the proceeds thereof and will take all actions necessary to maintain in favor of
Lender a perfected first priority security interest in the Cash Management
Account, including, without limitation, filing UCC‑1 financing statements and
continuations thereof. Borrower will not in any way alter or modify the Cash
Management Account. Lender and Servicer on behalf of Lender shall have the sole
right to make withdrawals from the Cash Management Account and all costs and
expenses for establishing and maintaining the Cash Management Account shall be
paid by Borrower. Lender may also establish subaccounts of the Cash Management
Account which shall at all times be Eligible Accounts (and may be ledger or book
entry accounts and not actual accounts) (such subaccounts are referred to herein
as “Accounts”). The Cash Management Account and all other Accounts shall be
subject to the Blocked Account Control Agreement and shall be under the sole
control and dominion of Lender. Neither Borrower nor Manager shall have the
right of withdrawal with respect to the Cash Management Account or any Accounts
except with the prior written consent of Lender, and neither Borrower, Manager,
nor any Person claiming on or behalf of or through Borrower or Manager shall
have any right or authority to give instructions with respect to the Cash
Management Account or the Accounts. Borrower acknowledges and agrees that Cash
Management Account Bank shall comply with (i) the instructions originated by
Lender with respect to the disposition of funds in the Cash Management Account
and the Accounts without the further consent of Borrower or Manager or any other
Person and (ii) all “entitlement orders” (as defined in Section 8-102(a)(8) of
the UCC) and instructions originated by Lender directing the transfer or
redemption of any financial asset relating to the Cash Management Account or any
Account without further consent by Borrower or any other Person. The Cash
Management Account and each Account is and shall be treated either as a
“securities account”, as such term is defined in Section 8-501(a) of the UCC, or
a “deposit account”, as defined in Section 9-102(a)(29) of the UCC.
(c)    During the Term, Borrower shall not deposit, and shall cause not to be
deposited, any Rents or other Collections into any account other than a Rent
Deposit Account or the Cash Management Account.
6.1.2    Investment of Funds in Cash Management Account, Accounts, and Rent
Deposit Account . Sums on deposit in the Cash Management Account and the
Accounts may be invested in Permitted Investments. Lender shall have the right
to direct Cash Management Account Bank to invest sums on deposit in the Cash
Management Account and the Accounts in Permitted Investments. The Cash
Management Account shall be assigned the federal tax identification number of
Borrower. Sums on deposit in the Rent Deposit Accounts shall not be invested in
Permitted Investments and shall be held solely in cash. The amount of actual
losses sustained on a liquidation of a Permitted Investment in the Cash
Management Account or

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an Account shall be deposited into the Cash Management Account or the applicable
Account, as applicable, by Borrower no later than one (1) Business Day following
such liquidation. Borrower shall be responsible for payment of any federal,
state or local income or other tax applicable to income earned from Permitted
Investments.
6.1.3    Borrower’s Operating Account. Borrower shall establish and maintain an
account (the “Borrower’s Operating Account”) at a local bank selected by
Borrower and reasonably approved by Lender which shall be an Eligible
Institution. Borrower may also establish and maintain subaccounts of Borrower’s
Operating Account (which may be ledger or book entry accounts and not actual
accounts). Borrower’s Operating Account (and any subaccounts thereof) shall be
subject to a Property Account Control Agreement in which Borrower and Manager
shall have access to and may make withdrawals from Borrower’s Operating Account
until the occurrence and during the continuance of an Event of Default, after
which Lender may exercise sole control and dominion over Borrower’s Operating
Account (and any subaccounts thereof) and neither Borrower nor Manager shall
have the right of withdrawal from or access to Borrower’s Operating Account (and
any subaccounts thereof).
6.1.4    General. Borrower shall pay for all expenses of opening and maintaining
the Cash Management Account (and the Accounts) and the Property Accounts. There
are no other accounts maintained by Borrower or Manager or any other Person
other than the Rent Deposit Accounts and the Cash Management Account into which
Rents or any other Collections shall be deposited. So long as the Debt is
outstanding, Borrower shall not (and shall not permit Manager or any other
Person to) open any other account for the deposit of Rents or any other
Collections.
Section 6.2    Tax Funds.
6.2.1    Deposits of Tax Funds. Borrower shall deposit into the Tax Account
(i) on the Closing Date, an amount equal to $3,750,000 and (ii) on each Monthly
Payment Date, an amount equal to one-twelfth of the Property Taxes that Lender
estimates will be payable during the next ensuing twelve (12) months (initially,
$598,327.90), in order to accumulate sufficient funds to pay all such Property
Taxes prior to their respective due dates, which amounts shall be transferred
into an Account (the “Tax Account”). Amounts deposited from time to time into
the Tax Account pursuant to this Section 6.2.1 are referred to herein as the
“Tax Funds”. If at any time Lender reasonably determines that the Tax Funds will
not be sufficient to pay the Property Taxes, Lender shall notify Borrower of
such determination and, commencing with the first Monthly Payment Date following
Borrower’s receipt of such written notice, the monthly deposits for Property
Taxes shall be increased by the amount that Lender estimates is sufficient to
make up the deficiency at least ten (10) days prior to the respective due dates
for the Property Taxes; provided, that if Borrower receives notice of any
deficiency after the date that is ten (10) days prior to the date that Property
Taxes are due, Borrower will deposit with or on behalf of Lender such amount
within one (1) Business Day after its receipt of such notice.
6.2.2    Release of Tax Funds. Provided no Event of Default is continuing,
Lender shall apply Tax Funds in the Tax Account to reimburse Borrower for
payments of Property Taxes made by Borrower after delivery by Borrower to Lender
of evidence of such payment reasonably acceptable to Lender. If the amount of
the Tax Funds shall exceed the amounts due for Property Taxes, Lender shall, in
its sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Tax Funds. Any Tax

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Funds remaining in the Tax Account after the Obligations have been paid in full
shall be returned to Borrower. Provided no Default or Event of Default exists,
the Tax Funds reserved for any Property will be released upon a permitted sale
and release of such Property in accordance with the terms hereof.
6.2.3    Special Reserve of Tax Funds. Notwithstanding the foregoing, in lieu of
making the deposits required by Section 6.2.1, Borrower may, by written notice
to Lender, elect to maintain in the Tax Account an amount equal to the amount of
Property Taxes payable with respect to the Properties for a period of six
months. If such an election is in effect and Lender determines that the Tax
Funds in the Tax Account constitute less than the amount described in the
previous sentence, Lender shall notify Borrower of such determination and,
commencing with the first Payment Date following Borrower’s receipt of such
written notice, Borrower shall deposit into the Tax Account such shortfall.
Furthermore, during any period while such an election is in effect, Borrower
shall not be entitled to receive any release of Tax Funds from the Tax Account.
Borrower may revoke the election contemplated by this Section 6.1.3 by written
notice to Lender; provided, that (i) such revocation shall not take effect until
the first Monthly Payment Date that is more than ten (10) Business Days after
the date Lender receives such notice and (ii) on such Monthly Payment Date
Borrower shall deposit into the Tax Account an amount reasonably determined by
Lender that, when combined with prospective deposits into the Tax Account
contemplated by clause (ii) of Section 6.1.1 will be sufficient funds to pay all
Property Taxes with respect to the Properties prior to their respective due
dates.
Section 6.3    Insurance Funds.
6.3.1    Deposits of Insurance Funds. Borrower shall deposit into the Insurance
Account on each Monthly Payment Date, an amount equal to one-twelfth of the
Insurance Premiums that Lender estimates will be payable for the renewal of the
coverage afforded by the Policies upon the expiration thereof, in order to
accumulate sufficient funds to pay all such Insurance Premiums prior to the
expiration of the Policies, which amounts shall be transferred into an Account
established at the Cash Management Account Bank to hold such funds (the
“Insurance Account”). Amounts deposited from time to time into the Insurance
Account pursuant to this Section 6.3.1 are referred to herein as the “Insurance
Funds”. If at any time Lender reasonably determines that the Insurance Funds
will not be sufficient to pay the Insurance Premiums, Lender shall notify
Borrower of such determination and the monthly deposits for Insurance Premiums
shall be increased by the amount that Lender estimates is sufficient to make up
the deficiency at least thirty (30) days prior to expiration of the Policies.
6.3.2    Release of Insurance Funds. Provided no Event of Default is continuing,
Lender shall apply Insurance Funds in the Insurance Account to timely pay, or
reimburse Borrower for payments of, Insurance Premiums. If the amount of the
Insurance Funds shall exceed the amounts due for Insurance Premiums, Lender
shall, in its sole discretion, return any excess to Borrower or credit such
excess against future payments to be made to the Insurance Funds. Any Insurance
Funds remaining in the Insurance Account after the Obligations have been paid in
full shall be returned to Borrower. Provided no Default or Event of Default
exists, the Insurance Funds reserved for any Property will be released upon a
permitted sale and release of such Property in accordance with the terms hereof.
Section 6.4    Capital Expenditure Funds.

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6.4.1    Deposits of Capital Expenditure Funds. Borrower shall deposit into the
Capital Expenditure Account on each Monthly Payment Date, an amount equal to
one-twelfth of the product of (i) $500 multiplied by (ii) the number of
Properties to which the Loan is applicable, in order to accumulate sufficient
funds, for annual Capital Expenditures, which amounts shall be transferred into
an Account (the “Capital Expenditure Account”). Amounts deposited from time to
time into the Capital Expenditure Account pursuant to this Section 6.4.1 are
referred to herein as the “Capital Expenditure Funds”.
6.4.2    Release of Capital Expenditure Funds. Provided no Event of Default is
continuing, Lender shall disburse Capital Expenditure Funds out of the Capital
Expenditure Account to either reimburse Borrower for Capital Expenditures
actually paid for by Borrower or pay for Capital Expenditures to be incurred by
Borrower, provided that: (i) such disbursement is for an Approved Capital
Expenditure, (ii) the request for disbursement is accompanied by (A) an
Officer’s Certificate from Borrower (1) stating that the items to be funded by
the requested disbursement are Approved Capital Expenditures, and a description
thereof, (2) stating that all Approved Capital Expenditures to be funded by the
requested disbursement have been completed (or completed to the extent of the
requested disbursement) in a good and workmanlike manner and in accordance with
all applicable Legal Requirements and the Renovation Standards and, (3) stating
that the Approved Capital Expenditures to be funded from the disbursement in
question have not been the subject of a previous disbursement have been paid for
by Borrower and (iii) for any individual expenditure greater than $25,000,
Borrower has delivered to Lender copies of any invoices, bills or statements
related to such Approved Capital Expenditures that are requested by Lender. For
the avoidance of doubt, Borrower shall not be entitled to receive a distribution
of Capital Expenditure Funds for expenses related to the refurbishment or repair
of a Property to the extent that Borrower has been or will be entitled to
reimbursement for such expenses from a Tenant’s security deposit.
Section 6.5    Special Insurance Reserve Account.
(a)    Deposit of Special Insurance Reserve Funds. If pursuant to Section 5.1.3
Borrower elects to maintain insurance policies with deductibles in excess of the
amounts required by Section 5.1.1, Borrower shall deposit into and maintain in
an Account (the “Special Insurance Reserve Account”) an aggregate amount equal
to the difference between deductibles in respect of insurance policies
maintained by Borrower that are in excess of the levels required by Section
5.1.1. Amounts deposited from time to time into the Special Insurance Reserve
Account pursuant to this Section 6.5 are referred to herein as the “Special
Insurance Reserve Funds”.
(b)    Release of Special Insurance Reserve Funds. Provided no Event of Default
is continuing, in the event of a Casualty, Lender shall disburse to Borrower
Special Insurance Reserve Funds in the amount of the applicable Excess
Deductible within five (5) Business Days of receipt by Lender of written request
therefor by Borrower; provided that if Borrower continues to maintain insurance
policies with Excess Deductibles, then no disbursement shall be made to the
extent such disbursement would result in the Special Insurance Reserve Funds on
deposit in the Special Insurance Reserve Account to be less than the aggregate
amount of the Excess Deductibles.
Section 6.6    Casualty and Condemnation Account. Borrower shall deposit all
Insurance Proceeds or Awards due to any Casualty or Condemnation in accordance
with the

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provisions of Section 5.2 and Section 5.3 into an Account (the “Casualty and
Condemnation Account”). Amounts deposited from time to time into the Casualty
and Condemnation Account pursuant to this Section 6.6 are referred to herein as
the “Casualty and Condemnation Funds”. All Casualty and Condemnation Funds shall
be held, disbursed and/or applied in accordance with the provisions of Section
5.3 or Section 5.4, as applicable.
Section 6.7    Cash Collateral Reserve.
6.7.1    Cash Collateral Account. If a Trigger Period shall be continuing, all
Available Cash (after payment of the Monthly Budgeted Amount and any Approved
Extraordinary Operating Expenses in accordance with Section 6.8.1) shall be paid
to Lender, which amounts shall be transferred by Lender into an Account (the
“Cash Collateral Account”) to be held by Lender as cash collateral for the Debt.
Amounts on deposit from time to time in the Cash Collateral Account pursuant to
this Section 6.7 are referred to as the “Cash Collateral Funds”. Lender shall
have the right, but not the obligation, at any time during the continuance of an
Event of Default, in its sole and absolute discretion to apply any and all Cash
Collateral Funds then on deposit in the Cash Collateral Account to the Debt, in
such order and in such manner as Lender shall elect in its sole and absolute
discretion, including to make a prepayment of principal to cause the Debt Yield
to meet the Low Debt Yield Trigger (together with the applicable Spread
Maintenance Premium, if any, applicable thereto) or any other amounts due
hereunder.
6.7.2    Withdrawal of Cash Collateral Funds. Provided no Default or an Event of
Default hereunder is continuing and there is an amount exceeding one percent
(1%) of the Outstanding Principal Balance on deposit in the Cash Collateral
Account (the “Cash Collateral Floor”), Lender shall make disbursements from the
Cash Collateral Account of Cash Collateral Funds in excess of the Cash
Collateral Floor to pay costs and expenses in connection with the ownership,
management and/or operation of the Properties to the extent such amounts are not
otherwise paid pursuant to Section 6.8.1 or by Manager pursuant to the
Management Agreement for the following items: (i) Operating Expenses (including
Management Fees) (subject to discretionary Operating Expenses being within a
five percent (5%) variation of an Approved Annual Budget), (ii) emergency
repairs and/or life-safety items (including applicable Capital Expenditures for
such purpose), (iii) Capital Expenditures set forth in an Approved Annual Budget
(subject to a five percent (5%) variation for Capital Expenditures in such
Approved Annual Budget), (iv) legal, audit and accounting costs associated with
the Properties or Borrower, excluding legal fees incurred in connection with the
enforcement of Borrower’s, rights pursuant to the Loan Documents, (v) payment of
Debt Service on the Loan, (vi) voluntary or mandatory prepayment of the Loan
(together with any applicable Spread Maintenance Premium), including, without
limitation, any Debt Yield Cure Prepayment and (vii) expenses and shortfalls
relating to Restoration; provided that no disbursements shall be made from the
Cash Collateral Account for any of the Operating Expenses or Capital
Expenditures described in the foregoing clauses (i) through (iv) to the extent
amounts for such Operating Expenses or Capital Expenditures have been
distributed to Borrower from the Cash Management Account under Section
6.8.1(i)(B), or may be distributed to Borrower from the Tax Account, the
Insurance Account or the Capital Expenditure Account, as applicable.
6.7.3    Release of Cash Collateral Funds. Provided no Trigger Period is
continuing as of two consecutive Calculation Dates, Lender shall release Cash
Collateral Funds in the Cash Collateral Account to Borrower; provided, that in
the event of a Debt Yield Cure

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Prepayment, Lender shall release Cash Collateral Funds in the Cash Collateral
Account to Borrower within one (1) Business Day of the date of such Debt Yield
Cure Prepayment.
Section 6.8    Property Cash Flow Allocation.
6.8.1    Order of Priority of Funds in Cash Management Account. On each Monthly
Payment Date during the Term, except during the continuance of an Event of
Default, Collections on deposit in the Cash Management Account on such day
(other than Advance Rent, which shall not be deemed available for disbursement
until, and shall be disbursed on, the Monthly Payment Date specified in the
Advance Rent Notice), which shall be applied on such Monthly Payment Date in the
following order of priority:
(a)    first, to the applicable Security Deposit Account, the amount of any
security deposits that have been deposited into the Cash Management Account by
Borrower during the calendar month ending immediately prior to such Monthly
Payment Date, as set forth in a written notice from Borrower to Lender delivered
pursuant to Section 4.3.8;
(b)    second, to Lender the amount of any mandatory prepayment of the
Outstanding Loan Principal Balance pursuant to Sections 2.4.3 then due and
payable and all other amounts payable in connection therewith, such amounts to
be applied in the manner set forth in Section 2.4.5(d);
(c)    third, to the Tax Account, to make the required payments of Tax Funds as
required under Section 6.2;
(d)    fourth, to the Insurance Account, to make any required payments of
Insurance Funds as required under Section 6.3;
(e)    fifth, to Lender, funds sufficient to pay the Monthly Debt Service
Payment Amount, applied (A) first, to the payment of interest then due and
payable on Component A, (B) second, to the payment of interest then due and
payable on Component B, (C) third, to the payment of interest then due and
payable on Component C, (D) fourth, to the payment of interest then due and
payable on Component D, (E) fifth, to the payment of interest then due and
payable on Component E, and (F) sixth, to the payment of interest then due and
payable on Component F;
(f)    sixth, to the Manager, management fees payable for the calendar month
ending immediately prior to such Monthly Payment Date, but not in excess of six
percent (6%) of gross Rents collected during such calendar month;
(g)    seventh, to the Capital Expenditure Account, to make the required
payments of Capital Expenditure Funds as required under Section 6.4;
(h)    eighth, to Lender, any other fees, costs, expenses (including Trust Fund
Expenses) or indemnities then due or payable under this Agreement or any other
Loan Document;

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(i)    ninth, all amounts remaining after payment of the amounts set forth in
clauses (a) through (h) above (the “Available Cash”) either:
(A)    if as of a Monthly Payment Date no Low Debt Yield Period is continuing,
any remaining amounts to Borrower’s Operating Account; and
(B)    if as of a Monthly Payment Date a Low Debt Yield Period is continuing:
(1)    first, to Borrower’s Operating Account, funds in an amount equal to the
Monthly Budgeted Amount;
(2)    second, to Borrower’s Operating Account, payments for Approved
Extraordinary Operating Expenses, if any; and
(3)    third, to the Cash Collateral Account to be held or disbursed in
accordance with Section 6.7.
6.8.2    Application During Event of Default. Notwithstanding anything to the
contrary contained herein (including this Article 6), upon the occurrence and
during the continuance of an Event of Default, Lender, at its option, may apply
any Collections then in the possession of Lender, Servicer or the Cash
Management Account Bank (including any Reserve Funds on deposit in the Accounts)
or any Property Account Bank to the payment of the Debt in such order,
proportion and priority as Lender may determine in its sole and absolute
discretion. Lender’s right to withdraw and apply any of the foregoing funds
shall be in addition to all other rights and remedies provided to Lender under
the Loan Documents.
6.8.3    Annual Budget. Prior to the date hereof, Borrower has submitted and
Lender has approved an Annual Budget for the 2014 calendar year (the “Approved
Initial Budget”). Borrower shall submit to Lender by November 1 of each year the
Annual Budget relating to the Properties for the succeeding Fiscal Year and
Lender shall have the right to approve each Annual Budget (which approval shall
not be unreasonably conditioned, delayed or withheld so long as no Event of
Default is continuing). During the continuance of a Trigger Period, Borrower
shall also submit to Lender not less than thirty (30) days prior to the end of
each Fiscal Quarter, an updated Annual Budget relating to the Properties for the
twelve (12) month period commencing with the immediately succeeding Fiscal
Quarter and Lender shall have the right to approve each updated Annual Budget
(which approval shall not be unreasonably conditioned, delayed or withheld so
long as no Event of Default is continuing). An Annual Budget approved by Lender
during a Trigger Period or any Annual Budget submitted prior to the commencement
of a Trigger Period, shall each hereinafter be referred to as an “Approved
Annual Budget”. In the event of a Transfer of any Property the Approved Annual
Budget shall be reduced as reasonably determined by Lender in consultation with
Borrower in order to reflect the removal of such Property and the Operating
Expenses associated therewith; provided, further, that no such reduction shall
be made in the event such Transfer is made in connection with a substitution
under Section 2.4.3(a). Neither Borrower nor Manager shall change or modify the
Annual Budget that has been approved by Lender without the prior written consent
of Lender (which consent shall not be unreasonably withheld, conditioned or
delayed so long as no Event of Default is continuing). The “Monthly Budgeted
Amount” for each Monthly Payment Date shall mean the monthly amount set forth in
the Approved Annual Budget for

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Operating Expenses and Capital Expenditures for the Interest Period related to
such Monthly Payment Date, but excluding management fees that are distributed
pursuant to Section 6.8.1(f), Property Taxes that are required to be deposited
into the Tax Account pursuant to Section 6.8.1(c) and Insurance Premiums that
are required to be deposited into the Insurance Account pursuant to Section
6.8.1(d).
6.8.4    Extraordinary Operating Expenses During any Low Debt Yield Period, in
the event that Borrower incurs or is required to incur an extraordinary
operating expense not set forth in the Approved Annual Budget relating to the
Properties (each an “Extraordinary Operating Expense”), then Borrower shall
promptly deliver to Lender a reasonably detailed explanation of such proposed
Extraordinary Operating Expense for Lender’s approval. Any Extraordinary
Operating Expense approved by Lender is referred to herein as an “Approved
Extraordinary Operating Expense”. Any Funds distributed to Borrower for the
payment of Approved Extraordinary Operating Expenses pursuant to Section 6.8.1
shall be used by Borrower only to pay for such Approved Extraordinary Operating
Expenses or reimburse Borrower for such Approved Extraordinary Operating
Expenses, as applicable.
Section 6.9    Security Interest in Reserve Funds. As security for payment of
the Debt and the performance by Borrower of all other terms, conditions and
provisions of the Loan Documents, Borrower hereby pledges and assigns to Lender,
and grants to Lender a security interest in, all Borrower’s right, title and
interest in and to all (collectively, the “Account Collateral”) (i) Collections,
(ii) any and all Permitted Investments, (iii) in and to all payments to, cash,
checks, drafts, letters of credit, certificates and instruments from time to
time held in the Property Accounts, the Cash Management Account and/or Accounts
(collectively, the “Cash Management Accounts”), (iv) all interest, dividends,
cash, instruments, investment property and other property from time to time
received, receivable or otherwise payable in respect of, or in exchange for, any
or all of the foregoing, and (iv) to the extent not covered by clauses (i),
(ii), (iii) or (iv) above, all “proceeds” (as defined under the UCC) of any or
all of the foregoing. Borrower hereby grants to Lender a continuing security
interest in, and agrees to hold in trust for the benefit of Lender, all Rents
and other Collections in its possession prior to the (x) payment of such
Collections to Lender or (y) deposit of such Collections into a Rent Deposit
Account or Cash Management Account, as applicable. Borrower shall not, without
obtaining the prior written consent of Lender, further pledge, assign or grant
any security interest in any Cash Management Account, or permit any Lien to
attach thereto, or any levy to be made thereon, or any UCC Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto. This Agreement is, among other things, intended by the parties to be a
security agreement for purposes of the UCC. Upon the occurrence and during the
continuance of an Event of Default, Lender may apply any sums in any Cash
Management Account in any order and in any manner as Lender shall elect in
Lender’s discretion without seeking the appointment of a receiver and without
adversely affecting the rights of Lender to foreclose the Lien of any Mortgage
Documents, Borrower Security Agreement or exercise its other rights under any
other Loan Documents. Provided no Event of Default exists, all interest which
accrues on the funds in the Cash Management Account or any Account (other than
the Tax Account and the Insurance Account) shall accrue for the benefit of
Borrower and shall be taxable to Borrower and shall be added to and disbursed in
the same manner and under the same conditions as the principal sum on which said
interest accrued. Upon repayment in full of the Debt, all remaining funds in the
Cash Management Account and the Accounts, if any, shall be promptly disbursed to
Borrower.

    

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Section 6.10    Eligibility Reserve Account.
(a)    Deposit of Eligibility Funds. If Borrower shall be required to make a
prepayment in respect of any Property pursuant to Section 2.4.3(a) (other than
in the case of any Property that constitutes a Disqualified Property due to the
occurrence of a Voluntary Action in respect thereof), Borrower shall have an
option to deposit into an Account (the “Eligibility Reserve Account”) an amount
equal to 100% of the Allocated Loan Amount for any such Property (“Eligibility
Funds”), provided that Borrower provides Lender with written notice of any such
Eligibility Funds and, no later than the due date for the prepayment required
under Section 2.4.3(a), delivers such Eligibility Funds with Lender for deposit
to the Eligibility Reserve Account.
(b)    Release of Eligibility Funds. Provided no Default or Event of Default
exists, Lender shall disburse the Eligibility Funds with respect to a Property
to Borrower upon (i) the sale of such Property and payment in full of the
applicable Release Amount, (ii) upon such Property becoming an Eligible Property
or (iii) upon the substitution of the applicable Disqualified Property with a
Substitute Property in accordance with the conditions of Section 2.4.3(a).
Section 6.11    Release of Reserve Funds Generally. Notwithstanding anything to
the contrary contained in this Article 6, disbursements of Reserve Funds to
Borrower shall only occur on the Reserve Release Date after receipt by Lender of
a Reserve Release Request from Borrower not less than five (5) Business Days
prior to such date.
ARTICLE 7

PERMITTED TRANSFERS
Section 7.1    Permitted Transfers. Notwithstanding anything to the contrary
contained in Section 4.2.3, the following Transfers (herein, the “Permitted
Transfers”) shall be permitted hereunder without Lender’s consent:
(a)    an Eligible Lease entered into in accordance with the Loan Documents;
(b)    a Permitted Lien or any other Lien expressly permitted under the terms of
the Loan Documents;
(c)    a Transfer of a Property in accordance with Section 2.5;
(d)    a substitution of a Property for a Substitute Property in accordance with
Section 2.4.3 or Section 5.3(b), as applicable;
(e)    the Transfer of any direct or indirect legal or beneficial interests in
any Public Vehicle, including a Public Vehicle that exists on the date hereof or
a Public Vehicle which acquires a direct or indirect legal or beneficial
interest in Borrower and each other Loan Party after the Closing Date in
accordance with the terms of this Section 7.1; and
(f)    a Transfer of any direct or indirect interest in Borrower or any other
Loan Party provided that:

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(i)    after giving effect to such Transfer, a Qualified Transferee (A) shall
own not less than fifty-one percent (51%) of the direct or indirect legal and
beneficial interests in Borrower and the other Loan Parties and (B) shall
continue to Control (directly or indirectly) Borrower, each other Loan Party;
(ii)    Lender shall receive notice of any Transfer described in this Section
7.1(f) not less than (x) if the Qualified Transferee referenced in clause (i)
above is not the Sponsor, ten (10) Business Days prior to the consummation
thereof or (y) if the Qualified Transferee referenced in clause (i) above is the
Sponsor, thirty (30) days following the consummation thereof, but the failure to
deliver the notice referred to in this clause (y) shall not constitute an Event
of Default unless such failure continues for ten (10) Business Days following
notice of such failure from Lender;
(iii)    each Loan Party shall continue to be a Special Purpose Bankruptcy
Remote Entity;
(iv)    after giving effect to such Transfer, Equity Owner shall remain the sole
member of Borrower and Borrower shall remain the sole member of any Borrower
TRS;
(v)    the Properties shall continue to be managed by Existing Manager or by a
Qualified Manager pursuant to a Replacement Management Agreement;
(vi)    if such Transfer shall cause more than forty-nine percent (49%) of the
direct or indirect interests in Borrower, or any other Loan Party to be owned by
any Person and its Affiliates that owned less than forty-nine percent (49%) of
the direct or indirect interest in Borrower or any other Loan Party prior to
such Transfer, Borrower shall deliver (or cause to be delivered) to Lender a
substantive non-consolidation opinion in form and substance reasonably
satisfactory to Lender and satisfactory to the applicable Rating Agencies;
(vii)    notwithstanding the foregoing, no Transfer of any direct interest in
Borrower or any other Loan Party which constitutes a portion of the Collateral
shall be permitted; and
(viii)    so long as the Loan is outstanding, (A) no pledge or other encumbrance
of any direct interests in any Restricted Pledge Party (other than pledges
securing the Obligations pursuant to the Collateral Documents) shall be
permitted, except that a pledge of the direct ownership interests in the most
upper-tier Restricted Pledge Party shall be permitted if such pledge directly or
indirectly secures indebtedness that is also directly or indirectly secured by
substantial assets other than the Collateral, and (B) no Restricted Pledge Party
shall issue preferred equity that has the characteristics of mezzanine debt
(such as a fixed maturity date, regular payments of interest, a fixed rate of
return and rights of the equity holder to demand repayment of its investment).
Following a Permitted Transfer, if Sponsor (or a Person comprising Sponsor) no
longer owns a majority of the direct or indirect interest in Borrower or the
Properties, Sponsor shall be released from the Sponsor Guaranty for all
liability accruing after the date of such Transfer, provided, that the Qualified
Transferee shall execute and deliver to Lender a replacement

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guaranty in substantially the same form and substance as the Sponsor Guaranty
covering all liability accruing from and after the date of such Transfer (but
not any which may have accrued prior thereto).
Section 7.2    Cost and Expenses; Searches; Copies.
(a)    Borrower shall pay all reasonable out-of-pocket costs and expenses of
Lender in connection with any Transfer, whether or not such Transfer is deemed
to be a Permitted Transfer, including, without limitation, all fees and expenses
of Lender’s counsel, and the cost of any required counsel opinions related to
REMIC or other securitization or tax issues and any Rating Agency fees.
(b)    Borrower shall provide Lender with copies of all organizational documents
and all transaction documents relating to any Permitted Transfer.
(c)    In connection with any Permitted Transfer, to the extent a transferee
shall own ten percent (10%) or more of the direct or indirect ownership
interests in Borrower immediately following such transfer (provided such
transferee owned less than ten percent (10%) of the direct or indirect ownership
interests in Borrower as of the Closing Date), Borrower shall deliver (and
Borrower shall be responsible for any reasonable out of pocket costs and
expenses in connection therewith), customary searches reasonably requested by
Lender in writing (including credit, judgment, lien, litigation, bankruptcy,
criminal and watch list) reasonably acceptable to Lender with respect to such
transferee.
ARTICLE 8
DEFAULTS
Section 8.1    Events of Default. Each of the following events shall constitute
an event of default hereunder (an “Event of Default”):
(i)    if (A) the Obligations are not paid in full on the Maturity Date, (B) any
regularly scheduled monthly payment of interest or principal due under the Note
is not paid in full on the applicable Monthly Payment Date (except, in each
case, to the extent amounts have been deposited with Lender in the Accounts
sufficient to pay such payments in accordance with the terms hereof and no other
Event of Default has occurred and is continuing), (C) any prepayment of
principal due under this Agreement or the Note is not paid when due or (D) the
Spread Maintenance Premium is not paid when due,
(ii)    if any deposit to the Reserve Funds is not made on the required deposit
date therefor, with such failure continuing for two (2) Business Days after
Lender delivers written notice thereof to Borrower;
(iii)    if any other amount payable pursuant to this Agreement, the Note or any
other Loan Document (other than as set forth in the foregoing clauses (i) and
(ii)) is not paid in full when due and payable in accordance with the provisions
of the applicable Loan Document, with such failure continuing for ten (10) days
after Lender delivers written notice thereof to Borrower (except to the extent
amounts have been

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deposited with Lender in the Accounts sufficient to pay such payments in
accordance with the terms hereof and no other Event of Default has occurred and
is continuing);
(iv)    if the Policies are not (A) delivered to Lender within five (5) days of
Lender’s written request and (B) kept in full force and effect, each in
accordance with the terms and conditions hereof;
(v)    a Transfer other than a Permitted Transfer occurs;
(vi)    if any certification, representation or warranty made by a Relevant
Party herein or any other Loan Document, other than a Property Representation,
or in any report, certificate, financial statement or other instrument,
agreement or document furnished to Lender shall have been false or misleading in
any material and adverse respect as of the date such representation or warranty
was made; or if any certification, representation or warranty qualified by
reference to the knowledge in any respect of any Loan Party (or any Responsible
Officer or other officer, employee or agent thereof) made by a Relevant Party
herein or any other Loan Document, other than a Property Representation, or in
any report, certificate, financial statement or other instrument, agreement or
document furnished to Lender is true but shall have been false or misleading in
any material and adverse respect as of the date such representation or warranty
was made if such qualification had been by reference to the knowledge in similar
degree of the Manager; provided, however, with respect to any of the foregoing,
if any untrue certification, representation or warranty made after the Closing
Date is susceptible of being cured, Borrower shall have the right to cure such
certification, representation or warranty within thirty (30) days after receipt
of notice from Lender;
(vii)    if any Relevant Party shall make an assignment for the benefit of
creditors;
(viii)    if a receiver, liquidator or trustee shall be appointed for any
Relevant Party or if Borrower, any Relevant Party shall be adjudicated as
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Borrower,
any Relevant Party, or if any proceeding for the dissolution or liquidation of
Borrower, any Relevant Party shall be instituted, or if Borrower is
substantively consolidated with any other Person; provided, however, if such
appointment, adjudication, petition, proceeding or consolidation was involuntary
and not consented to by such Relevant Party, upon the same not being discharged,
stayed or dismissed within ninety (90) days following its filing;
(ix)    if any Loan Party attempts to assign its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;
(x)    if any of the assumptions contained in the Insolvency Opinion, or in any
other non-consolidation opinion delivered to Lender in connection with the Loan,
or in any other non-consolidation opinion delivered subsequent to the closing of
the Loan, is or shall become untrue in any material respect;

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(xi)    a breach of the covenants set forth in Sections 2.1.5, 4.1.1, 4.1.2,
4.1.3, 4.1.9, 4.1.17, 4.1.23, 4.2.1, 4.2.2, 4.2.3, 4.2.4, 4.2.5, 4.2.7, 4.2.8,
4.2.9, 4.2.13 or 4.2.17;
(xii)    if with respect to any Disqualified Property, Borrower fails to within
the time periods specified in Section 2.4.3(a) either: (A) pay the Release
Amount in respect thereof, (B) substitute such Disqualified Property with a
Substitute Property in accordance with Section 2.4.3(a) or (C) or deposit an
amount equal to 100% of the Allocated Loan Amount for the Disqualified Property
in the Eligibility Reserve Account in accordance with Section 2.4.3(a) and, in
any such case, such failure continues for more than five (5) Business Days after
written notice thereof from Lender to Borrower;
(xiii)    if, without Lender’s prior written consent, (i) any Management
Agreement is terminated (unless simultaneously therewith, Borrower and a new
Qualified Manager enter into a Replacement Management Agreement in accordance
with Section 4.2.1), or (ii) there is a default by Borrower under any Management
Agreement beyond any applicable notice or grace period that permits such Manager
to terminate or cancel the applicable Management Agreement (unless, within
thirty (30) days after the expiration of such notice or grace period, Borrower
and a new Qualified Manager enter into a Replacement Management Agreement in
accordance with Section 4.2.1);
(xiv)    if any Loan Party or any Person owning a direct or indirect ownership
interest in any Loan Party shall be convicted of a Patriot Act Offense by a
court of competent jurisdiction;
(xv)    if there shall be a default under any of the other Loan Documents beyond
any applicable cure periods contained in such Loan Documents, whether as to any
Relevant Party or the Properties, or if any other such event shall occur or
condition shall exist, if the effect of such event or condition is to accelerate
the maturity of any portion of the Obligations or to permit Lender to accelerate
the maturity of all or any portion of the Obligations;
(xvi)    if Borrower fails to obtain or maintain an Interest Rate Cap Agreement
or replacement thereof in accordance with Section 2.6 and/or Section 2.7 hereof;
(xvii)    if any Loan Document or any Lien granted thereunder by any Relevant
Party shall (except in accordance with its terms or pursuant to Lender’s written
consent), in whole or in part, terminate, cease to be effective or cease to be
the legally valid, binding and enforceable obligation of the parties thereto or
(y) any Relevant Party or any other party shall disaffirm or contest, in
writing, in any manner such effectiveness, validity, binding nature or
enforceability (other than as a result of the occurrence of the payment in full
of the Obligations);
(xviii)    one or more final judgments for the payment of $2,500,000 or more
rendered against any Loan Party, and such amount is not covered by insurance or
indemnity or not discharged, paid or stayed within sixty (60) days after (i) the
date on which the right to appeal thereof has expired if no such appeal has
commenced, or (ii) the date on which all rights to appeal have been
extinguished;

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(xix)    as of any Calculation Date, Sponsor or any Qualified Transferee that
executes and delivers a replacement guaranty pursuant to Section 7.1 fails to
comply with the Sponsor Financial Covenant; or
(xx)    if any Relevant Party shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement or any other Loan
Document not specified in subsections (i) to (xx) above, and such Default shall
continue for ten (10) days after notice to Borrower from Lender, in the case of
any such Default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice to Borrower from Lender in the case of any other
such Default; provided, however, that if such non-monetary Default is
susceptible of cure but cannot reasonably be cured within such 30-day period,
and provided further that Borrower shall have commenced to cure such Default
within such 30-day period shall and thereafter diligently and expeditiously
proceed to cure the same, such 30-day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence to cure
such Default, such additional period not to exceed ninety (90) days.
Section 8.2    Remedies.
8.2.1    Acceleration. Upon the occurrence of an Event of Default (other than an
Event of Default described in clauses (vii), (viii) or (ix) of Section 8.1) and
at any time thereafter, Lender may, in addition to any other rights or remedies
available to it pursuant to this Agreement and the other Loan Documents or at
law or in equity, take such action, without notice or demand (and Borrower
hereby expressly waives any such notice or demand), that Lender deems advisable
to protect and enforce its rights against any Relevant Party and in and to the
Properties, including declaring the Obligations to be immediately due and
payable, and Lender may enforce or avail itself of any or all rights or remedies
provided in the Loan Documents against the Relevant Parties, including all
rights or remedies available at law or in equity; and upon any Event of Default
described in clauses (vii), (viii) or (ix) of Section 8.1, the Obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable in full, without notice or demand, and the
Loan Parties hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary notwithstanding.
8.2.2    Remedies Cumulative.
(a)    During the continuance of an Event of Default, all or any one or more of
the rights, powers, privileges and other remedies available to Lender against
each Relevant Party under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, a Relevant Party or at law or in
equity may be exercised by Lender at any time and from time to time, whether or
not all or any of the Obligations shall be declared due and payable, and whether
or not Lender shall have commenced any foreclosure proceeding or other action
for the enforcement of its rights and remedies under any of the Loan Documents
with respect to the Collateral. The rights, powers and remedies of Lender under
this Agreement shall be cumulative and not exclusive of any other right, power
or remedy which Lender may have against a Relevant Party pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or
otherwise. Lender’s rights, powers and remedies may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as
Lender may determine in its sole discretion, to the fullest extent permitted by
law, without impairing or

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otherwise affecting the other rights and remedies of Lender permitted by law or
contract or as set forth herein or in the other Loan Documents or by equity.
Without limiting the generality of the foregoing, if an Event of Default is
continuing (i) Lender shall not be subject to any “one action” or “election of
remedies” law or rule, and (ii) all Liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until Lender
has exhausted all of its remedies against the Properties and the other
Collateral and each Mortgage has been foreclosed, sold and/or otherwise realized
upon in satisfaction of the Obligations or the Obligations have been paid in
full including, without limitation, any liquidation fees, workout fees, special
servicing fees and interest payable on advances made by the Servicer with
respect to delinquent debt service payments or expenses of curing Borrower’s or
any Loan Party’s defaults under the Loan Documents or other similar fees payable
to Servicer or any special servicer in connection therewith. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to a Relevant Party shall not be construed to be a
waiver of any subsequent Default or Event of Default by such Relevant Party or
to impair any remedy, right or power consequent thereon.
(b)    With respect to Borrower, the other Loan Parties and the Collateral,
nothing contained herein or in any other Loan Document shall be construed as
requiring Lender to resort to any Property or other portion of the Collateral
for the satisfaction of any of the Debt in preference or priority to any other
portion of the Collateral, and Lender may seek satisfaction out of all of the
Collateral or any part thereof, in its absolute discretion in respect of the
Debt. During the continuance of an Event of Default, Lender shall have the right
from time to time to partially foreclose any Mortgage or the Lien of any of the
other Collateral Documents in any manner and for any amounts secured by the
Collateral Documents then due and payable as determined by Lender in its sole
discretion, including the following circumstances: (i) in the event Borrower
defaults beyond any applicable grace period in the payment of one or more
scheduled payments of principal and interest, Lender may foreclose one or more
of the Mortgages or other Collateral Documents to recover such delinquent
payments, or (ii) in the event Lender elects to accelerate less than the entire
Outstanding Principal Balance, Lender may foreclose one or more of the Mortgages
or other Collateral Documents to recover so much of the principal balance of the
Loan as Lender may accelerate and such other sums secured by the Mortgages and
the other Collateral Documents as Lender may elect. Notwithstanding one or more
partial foreclosures, the Collateral shall remain subject to the Mortgages and
the other Collateral Documents to secure payment of the sums secured by the
Collateral Documents and not previously recovered.
8.2.3    Severance.
(a)    During the continuance of an Event of Default, Lender shall have the
right from time to time to sever the Note and the other Loan Documents into one
or more separate notes, Collateral Documents and other security documents in
such denominations as Lender shall determine in its sole discretion for purposes
of evidencing and enforcing its rights and remedies provided hereunder. The Loan
Parties shall execute and deliver to Lender from time to time, promptly after
the request of Lender, a severance agreement and such other documents as Lender
shall request in order to effect the severance described in the preceding
sentence, all in form and substance reasonably satisfactory to Lender. The Loan
Parties hereby absolutely and irrevocably

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appoint Lender as its true and lawful attorney, coupled with an interest, in its
name and stead to make and execute all documents necessary or desirable to
effect the aforesaid severance, Borrower ratifying all that its said attorney
shall do by virtue thereof; provided, however, Lender shall not make or execute
any such documents under such power until three (3) days after notice has been
given to a Loan Party by Lender of Lender’s intent to exercise its rights under
such power.
(b)    During the continuance of an Event of Default, any amounts recovered from
the Collateral may be applied by Lender toward the payment of any interest
and/or principal of the Loan and/or any other amounts due under the Loan
Documents, in such order, priority and proportions as Lender in its sole
discretion shall determine.
(c)    As used in this Section 8.2, a “foreclosure” shall include, without
limitation, any sale by power of sale.
8.2.4    Lender’s Right to Perform. If any Loan Party fails to perform any
covenant or obligation contained herein and such failure shall continue for a
period of five (5) Business Days after Borrower’s receipt of written notice
thereof from Lender, without in any way limiting Lender’s right to exercise any
of its rights, powers or remedies as provided hereunder, or under any of the
other Loan Documents, Lender may, but shall have no obligation to, perform, or
cause the performance of, such covenant or obligation, and all costs, expenses,
liabilities, penalties and fines of Lender incurred or paid in connection
therewith shall be payable by Borrower to Lender upon demand and if not paid
shall be added to the Obligations (and to the extent permitted under applicable
laws, secured by the Mortgages and the other Collateral Documents) and shall
bear interest thereafter at the Default Rate. Notwithstanding the foregoing,
Lender shall have no obligation to send notice to Borrower of any such failure.
ARTICLE 9

SECURITIZATION
Section 9.1    Securitization.
(a)    Lender shall have the right (i) to sell or otherwise transfer the Loan or
any portion thereof as a whole loan, (ii) to sell participation interests in the
Loan, or (iii) to securitize the Loan or any portion thereof in a single asset
securitization or a pooled loan securitization. (The transactions referred to in
clauses (i), (ii) and (iii) are each hereinafter referred to as a “Secondary
Market Transaction” and the transactions referred to in clause (iii) shall
hereinafter be referred to as a “Securitization”. Any certificates, notes or
other securities issued in connection with a Secondary Market Transaction are
hereinafter referred to as “Securities”). At Lender’s election, each note and/or
component comprising the Loan may be subject to one or more Secondary Market
Transactions.
(b)    If requested by Lender, the Loan Parties shall use reasonable efforts to
provide information in the possession or control of Borrower or its Affiliates,
attorneys, accountants or other agents or which may be reasonably required by
Lender in order to satisfy the market standards to which Lender customarily
adheres or which may be required in the marketplace, by prospective investors,
the Rating Agencies, applicable Legal Requirements

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and/or otherwise in the marketplace in connection with any Secondary Market
Transactions, including to:
(i)    (A) provide updated financial and other information with respect to the
Properties, the business operated at the Properties, Borrower, Sponsor and the
Manager, including, without limitation, the information set forth on Exhibit C
attached hereto, (B) provide updated budgets relating to the Properties, and
(C) provide updated appraisals, market studies, environmental reviews and
reports (Phase I’s and, if appropriate, Phase II’s), property condition reports
and other due diligence investigations of the Properties (the “Updated
Information”) which were obtained in connection with the origination of the
Loan;
(ii)    provide reliance to each Person acquiring any interest in the Loan in
connection with any Secondary Market Transaction (including, without limitation,
any “B Note” purchasers) on (A) each Insolvency Opinion, and (B) each opinion of
Borrower’s and Guarantor’s New York and Delaware counsel, or otherwise
reasonably satisfactory to Lender and the Rating Agencies;
(iii)    (A) confirm that as of the closing date of any Secondary Market
Transaction, the representations and warranties as set forth in the Loan
Documents are true, complete and correct in all material respects as of the
closing date of the Secondary Market Transaction (except to the extent that any
such representations and warranties are made as of a specific date and the facts
and circumstances upon which such representation and warranty is based are
specific solely to a certain date in which case confirmation as to truth,
completeness and correctness shall be provided as of such specific date or to
the extent such representations are no longer true and correct as a result of
subsequent events in which case Borrower shall provide an updated representation
or warranty) and (B) make such additional representations and warranties as the
Rating Agencies may customarily require; and
(iv)    execute amendments to the Loan Documents and the Loan Parties’
organizational documents requested by Lender; provided, however, that Borrower
shall not be required to modify or amend any Loan Document if such modification
or amendment would (A) cause the initial weighted average of the interest rates
for all Components in the aggregate immediately after the effective date of such
modification to exceed the weighted average interest rate of the original
Components in the aggregate immediately prior to such modification or alter the
basis for any interest rate or convert such interest rate to a fixed rate,
(B) cause the outstanding principal balance of all Components in the aggregate
immediately after the effective date of such modification to exceed the
outstanding principal balance of all Components in the aggregate immediately
prior to such modification, (C) require Borrower to make or remake any
representations or warranties, (D) require principal amortization of the Loan
(other than repayment in full on the Maturity Date), (E) change any Stated
Maturity Date or (F) otherwise increase the obligations or reduce the rights of
Borrower or Guarantor under the Loan Documents.
(c)    If, at the time a Disclosure Document is being prepared for a
Securitization, Lender reasonably determines that Borrower alone or Borrower and
one or more Affiliates of Borrower (including any guarantor or other Person that
is directly or indirectly committed by contract or otherwise to make payments on
all or a part of the Loan) collectively,

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or the Properties alone or the Properties and Related Properties collectively,
will be a Significant Obligor, Borrower shall furnish to Lender upon request the
following financial information:
(i)    if Lender reasonably determines that the principal amount of the Loan
together with any Related Loans, as of the cut-off date for such Securitization,
may equal or exceed ten percent (10%) (but less than twenty percent (20%)) of
the aggregate principal amount of all mortgage loans included or expected to be
included in the Securitization, net operating income for the Properties and the
Related Properties for the most recent Fiscal Year and interim period as
required under Item 1112(b)(1) of Regulation AB (or, if the Loan is not treated
as a non-recourse loan under Instruction 3 for Item 1101(k) of Regulation AB,
selected financial data meeting the requirements and covering the time periods
specified in Item 301 of Regulation S-K and Item 1112(b)(1) of Regulation AB),
or
(ii)    if Lender reasonably determines that the principal amount of the Loan
together with any Related Loans, as of the cut-off date for such Securitization,
may equal or exceed twenty percent (20%) of the aggregate principal amount of
all mortgage loans included or expected to be included in the Securitization,
the financial statements required under Item 1112(b)(2) of Regulation AB (which
includes, but may not be limited to, a balance sheet with respect to the entity
that Lender determines to be a Significant Obligor for the two most recent
Fiscal Years and applicable interim periods, meeting the requirements of Rule
3-01 of Regulation S-X, and statements of income and statements of cash flows
with respect to the Properties for the three most recent Fiscal Years and
applicable interim periods, meeting the requirements of Rule 3-02 of Regulation
S-X (or if Lender determines that the Properties is the Significant Obligor and
the Properties (other than properties that are hotels, nursing homes, or other
properties that would be deemed to constitute a business and not real estate
under Regulation S-X or other legal requirements) was acquired from an
unaffiliated third party and the other conditions set forth in Rule 3-14 of
Regulation S-X have been met, the financial statements required by Rule 3-14 of
Regulation S-X)).
(d)    Further, if requested by Lender, Borrower shall, promptly upon Lender’s
request, furnish to Lender financial data or financial statements meeting the
requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender,
for any Tenant of the Properties if, in connection with a Securitization, Lender
reasonably determines there to be, as of the cutoff date for such
Securitization, a concentration with respect to such Tenant or group of
Affiliated Tenants within all of the mortgage loans included or expected to be
included in the Securitization such that such Tenant or group of Affiliated
Tenants would constitute a Significant Obligor. Borrower shall furnish to
Lender, in connection with the preparation of the Disclosure Documents and on an
ongoing basis, financial data and/or financial statements with respect to such
Tenants meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as
specified by Lender, but only for so long as such entity or entities are a
Significant Obligor and either (x) filings pursuant to the Exchange Act in
connection with or relating to the Securitization (an “Exchange Act Filing”) are
required to be made under applicable Legal Requirements or (y) comparable
information is required to otherwise be “available” to holders of the Securities
under Regulation AB or applicable Legal Requirements.
(e)    If Lender determines that Borrower alone or Borrower and one or more
Affiliates of Borrower collectively, or the Properties alone or the Properties
and Related

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Properties collectively, are a Significant Obligor, then Borrower shall furnish
to Lender, on an ongoing basis, selected financial data or financial statements
meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as
specified by Lender, but only for so long as such entity or entities are a
Significant Obligor and either (x) Exchange Act Filings are required to be made
under applicable Legal Requirements or (y) comparable information is required to
otherwise be “available” to holders of the Securities under Regulation AB or
applicable Legal Requirements.
(f)    If reasonably requested by Lender in connection with a Securitization,
Borrower shall provide Lender, within a reasonable period of time following
Lender’s request therefor, with any other or additional financial statements, or
financial, statistical or operating information, as Lender shall reasonably
determine to be required pursuant to Regulation S-K or Regulation S-X, as
applicable, Regulation AB, or any amendment, modification or replacement thereto
or other Legal Requirements relating to a Securitization.
Section 9.2    Securitization Indemnification.
(a)    Borrower understands that information provided to Lender by Borrower,
Guarantor and their respective agents, counsel and representatives may be
included in preliminary and final disclosure documents in connection with any
Secondary Market Transaction, including a Securitization, including an offering
circular, a prospectus, prospectus supplement, private placement memorandum or
other offering document (each, a “Disclosure Document”) and may also be included
in filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the “Securities Act”), or the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), and may be made available
to investors or prospective investors in the Securities, investment banking
firms, NRSROs, accounting firms, law firms and other third-party advisory and
service providers relating to any Secondary Market Transaction, including a
Securitization. Borrower also understands that the findings and conclusions of
any third-party due diligence report obtained by Lender, the Issuer or the
Securitization placement agent or underwriter may be made publicly available if
required, and in the manner prescribed, by Section 15E(s)(4)(A) of the Exchange
Act and any rules promulgated thereunder.
(b)    Borrower hereby agrees to indemnify Lender (and for purposes of this
Section 9.2, Lender shall include the initial lender, its successors and
assigns, and their respective officers and directors) and each Person who
controls Lender within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively, the “Lender Group”), the issuer of
the Securities (the “Issuer” and for purposes of this Section 9.2, Issuer shall
include its officers, director and each Person who controls the Issuer within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act), and any placement agent or underwriter with respect to the Securitization,
each of their respective officers and directors and each Person who controls the
placement agent or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the “Underwriter
Group”) for any losses, claims, damages or liabilities (collectively, the
“Liabilities”) to which Lender, Lender Group, the Issuer or the Underwriter
Group may become subject insofar as the Liabilities arise out of, or are based
upon, (A) any untrue statement or alleged untrue statement of any material fact
contained in the Covered Disclosure Information (defined below), (B) the
omission or alleged omission to state in the Covered Disclosure Information a
material fact required to be stated in such information or necessary in order to
make the statements in such information, in light of the circumstances under
which they were made, not misleading, or (C) a breach of the

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representations and warranties made by any Loan Party in Section 3.1.24 of this
Agreement (Full and Accurate Disclosure). For purposes of the foregoing, the
“Covered Disclosure Information” shall mean the information provided by or on
behalf of Borrower contained in the Disclosure Documents authorized for use by
Borrower. Borrower also agrees to reimburse Lender, Lender Group, the Issuer
and/or the Underwriter Group for any legal or other expenses reasonably incurred
by Lender, Lender Group, the Issuer and/or the Underwriter Group in connection
with investigating or defending the Liabilities. This indemnification provision
will be in addition to any liability which Borrower may otherwise have.
(c)    In connection with any Exchange Act Filing or other reports containing
comparable information that is required to be made “available” to holders of the
Securities under Regulation AB or applicable Legal Requirements, Borrower agrees
to (i) indemnify Lender, Lender Group, the Issuer and the Underwriter Group for
Liabilities to which Lender, Lender Group, the Issuer and/or the Underwriter
Group may become subject insofar as the Liabilities arise out of, or are based
upon any untrue statement or alleged untrue statement of any material fact in
the Covered Disclosure Information, or the omission or alleged omission to state
in the Covered Disclosure Information a material fact required to be stated
therein or necessary in order to make the statements in the Covered Disclosure
Information, in light of the circumstances under which they were made, not
misleading, and (ii) reimburse Lender, Lender Group, the Issuer and/or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender,
Lender Group, the Issuer and/or the Underwriter Group in connection with
defending or investigating the Liabilities.
(d)    Promptly after receipt by an indemnified party under this Section 9.2 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9.2, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party under Section 9.2(b) or (c) except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party pursuant to the immediately preceding sentence of this
Section 9.2(d), such indemnifying party shall pay for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party at
the cost of the indemnifying party. The indemnifying party shall not be liable
for the expenses of more than one separate counsel unless an indemnified party
shall have reasonably concluded that there may be legal defenses available to it
that are different from or additional to those available to the indemnifying
party. Without the prior

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written consent of Lender (which consent shall not be unreasonably withheld or
delayed), no indemnifying party shall settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any indemnified party is an actual or potential party to such claim,
action, suit or proceeding) unless the indemnifying party shall have given
Lender reasonable prior written notice thereof and shall have obtained an
unconditional release of each indemnified party hereunder from all liability
arising out of such claim, action, suit or proceedings, and such settlement
requires no statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of the indemnified party.
(e)    In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 9.2(b) or (c) is for
any reason held to be unenforceable as to an indemnified party in respect of any
Liabilities (or action in respect thereof) referred to therein which would
otherwise be indemnifiable under Section 9.2(b) or (c), the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such Liabilities (or action in respect thereof); provided, however,
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. In determining
the amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) the Issuer’s and Borrower’s relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; and (iii) any other equitable considerations appropriate
in the circumstances. Lender and Borrower hereby agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation.
(f)    The liabilities and obligations of both Borrower and Lender under this
Section 9.2 shall survive the termination of this Agreement and the satisfaction
and discharge of the Debt.
Section 9.3    Severance.
9.3.1    Severance Documentation. Lender, without in any way limiting Lender’s
other rights hereunder, in its sole and absolute discretion, shall have the
right, at any time (whether prior to or after any sale, participation or other
Secondary Market Transaction with respect to all or any portion of the Loan), to
require Borrower (at Lender’s expense) to execute and deliver “component” notes
(including certificating existing uncertificated “component” notes) and/or
modify the Loan or the existing “component note” structure in order to create
one or more senior and subordinate notes (i.e., an A/B or A/B/C structure)
and/or one or more additional components of the Note or Notes), or make any
other change to the Loan the Note or Components including but not limited to:
reducing the number of Components of the Note or Notes, revising the interest
rate for each Component, reallocating the principal balances of the Notes and/or
the Components, increasing or decreasing the monthly debt service payments for
each Component or eliminating the Component structure and/or the multiple note
structure of the Loan (including the elimination of the related allocations of
principal and interest payments); provided that (A) the outstanding principal
balance of all Components in the aggregate immediately after the effective date
of such modification equals the outstanding principal balance immediately prior
to such modification, (B) the initial weighted average of the interest rate for
all Components in the aggregate immediately after the effective date of such

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modification equals the weighted average interest rate of the original
Components immediately prior to such modification and such interest rates remain
determined by reference to LIBOR plus a Component Spread, (C) no principal
amortization of the Loan (or any Components thereof) shall be required (other
than repayment in full on the Maturity Date), (D) there shall be no change to
any Stated Maturity Date and (E) Borrower and Guarantor shall not be required to
amend any Loan Documents that would otherwise increase the obligations or reduce
the rights of Borrower or Guarantor under the Loan Documents. At Lender’s
election, each note comprising the Loan may be subject to one or more Secondary
Market Transactions. Lender shall have the right to modify the Note and/or Notes
and any Components in accordance with this Section 9.3 and, provided that such
modification shall comply with the terms of this Section 9.3, it shall become
immediately effective.
9.3.2    Cooperation; Execution; Delivery. Borrower shall reasonably cooperate
with all reasonable requests of Lender in connection with this Section 9.3. If
requested by Lender, Borrower shall promptly execute and deliver such documents
as shall be required by Lender and any Rating Agency in connection with any
modification pursuant to this Section 9.3, all in form and substance
satisfactory to Lender and satisfactory to any applicable Rating Agency. It
shall be an Event of Default under this Agreement, the Note, and the other Loan
Documents if Borrower fails to comply with any of the terms, covenants or
conditions of this Section 9.3 after expiration of ten (10) Business Days after
notice thereof.
ARTICLE 10

MISCELLANEOUS
Section 10.1    Survival; Successors and Assigns. This Agreement and all
covenants, agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making by Lender of the
Loan and the execution and delivery to Lender of the Note, and shall continue in
full force and effect so long as all or any of the Obligations are outstanding
and unpaid unless a longer period is expressly set forth herein or in the other
Loan Documents. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the legal representatives,
successors and assigns of such party. All covenants, promises and agreements in
this Agreement, by or on behalf of Borrower and the other Loan Parties, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
Section 10.2    Lender’s Discretion; Rating Agency Review Waiver.
(a)    Whenever pursuant to this Agreement Lender exercises any right given to
it to approve or disapprove any matter, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove such
matter or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Lender and shall be final and conclusive. Prior to a
Securitization, whenever pursuant to this Agreement the Rating Agencies are
given any right to approve or disapprove any matter, or any arrangement or term
is to be satisfactory to the Rating Agencies, the decision of Lender to approve
or disapprove such matter or to decide whether arrangements or terms are
satisfactory or not satisfactory, based upon Lender’s determination of Rating
Agency criteria, shall be substituted therefor.

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(b)    Whenever, pursuant to this Agreement or any other Loan Documents, a
Rating Agency Confirmation is required from each applicable Rating Agency, in
the event that any applicable Rating Agency “declines review”, “waives review”
or otherwise indicates to Lender’s or Servicer’s satisfaction that no Rating
Agency Confirmation will or needs to be issued with respect to the matter in
question (each, a “Review Waiver”), then the requirement to obtain a Rating
Agency Confirmation from such Rating Agency shall not apply with respect to such
matter; provided, however, if a Review Waiver occurs with respect to a Rating
Agency and Lender does not have a separate and independent approval right with
respect to the matter in question, then such matter shall require the written
reasonable approval of Lender. It is expressly agreed and understood, however,
that receipt of a Review Waiver (i) from any one Rating Agency shall not be
binding or apply with respect to any other Rating Agency and (ii) with respect
to one matter shall not apply or be deemed to apply to any subsequent matter for
which Rating Agency Confirmation is required.
Section 10.3    Governing Law.
(a)    THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF
THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND ANY APPLICABLE LAW
OF THE UNITED STATES OF AMERICA, PROVIDED HOWEVER, THAT WITH RESPECT TO THE
CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIENS AND SECURITY
INTERESTS CREATED BY THIS AGREEMENT, THE SECURITY INSTRUMENTS AND THE OTHER LOAN
DOCUMENTS ON ANY “PROPERTY” AS DEFINED HEREIN, AND THE DETERMINATION OF
DEFICIENCY JUDGMENTS WITH RESPECT THERETO, THE LAWS OF THE STATE WHERE SUCH
“PROPERTY” IS LOCATED SHALL APPLY. TO THE FULLEST EXTENT PERMITTED BY LAW,
BORROWER AND GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM
TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE
NOTE.
ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND BORROWER WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION

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OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER AGREES THAT
SERVICE OF PROCESS UPON BORROWER AT THE ADDRESS FOR BORROWER SET FORTH HEREIN
AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER
PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON BORROWER. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGE IN
THE ADDRESS FOR BORROWER SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME TO
TIME DESIGNATE AN AUTHORIZED AGENT OF BORROWER WITH AN OFFICE IN NEW YORK, NEW
YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR
SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF
BORROWER CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED
HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
BORROWER IN ANY OTHER JURISDICTION.
Section 10.4    Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement
or of any other Loan Document, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party or parties against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to, or demand on, any Loan Party shall entitle any Loan Party to any
other or future notice or demand in the same, similar or other circumstances.
Neither any failure nor any delay on the part of Lender in insisting upon strict
performance of any term, condition, covenant or agreement, or exercising any
right, power, remedy or privilege hereunder or under any other Loan Document,
shall operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement or any other Loan Document, Lender shall not be deemed to have
waived any right either to require prompt payment when due of all other amounts
due under this Agreement or the other Loan Documents, or to declare a default
for failure to effect prompt payment of any such other amount. Lender shall have
the right to waive or reduce any time periods that Lender is entitled to under
the Loan Documents in its sole and absolute discretion.
Section 10.5    Notices. All notices, demands, requests, consents, approvals or
other communications (any of the foregoing, a “Notice”) required, permitted or
desired to be given hereunder shall be in writing and shall be sent by facsimile
(with answer back acknowledged) or by registered or certified mail, postage
prepaid, return receipt requested, or delivered by hand or by reputable
overnight courier, addressed to the party to be so notified at its address
hereinafter set forth, or to such other address as such party may hereafter
specify in accordance with the provisions of this Section 10.5. Any Notice shall
be deemed to have been received: (a) three (3) days after the date such Notice
is mailed, (b) on the date of sending by facsimile if sent during business hours
on a Business Day (otherwise on the next Business Day), (c) on the date of
delivery by hand if delivered during business hours on a Business Day (otherwise
on the next Business Day), and (d) on the next Business Day if sent by an
overnight commercial courier, in each case addressed to the parties as follows:

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If to Lender:
German American Capital Corporation
60 Wall Street, 10th Floor
New York, NY 10005
Attention: R. Christopher Jones
Facsimile No. (732) 578-6572

and to:
German American Capital Corporation
60 Wall Street, 10th Floor
New York, NY 10005
Attention: General Counsel
Facsimile No. (646) 736-5721

with a copy to:
Midland Loan Services, a Division of PNC Bank, National Association

10851 Mastin Street, Suite 700
Overland Park, KS 66210
Attention: Executive Vice President – Division Head
Facsimile No. (913) 253-9001

with a copy to:
Andrascik & Tita LLC

1425 Locust Street, Suite 26B
Philadelphia, PA 19102
Attention: Stephanie M. Tita
Email: Stephanie@kanlegal.com

If to a Loan Party:
[INSERT NAME OF LOAN PARTY]
c/o American Residential Properties

7047 E Greenway Parkway Suite 350
Scottsdale, AZ 85254
Attention: Legal Department
Facsimile No. (480) 264-2943

With a copy to:
American Residential Properties

7047 E Greenway Parkway Suite 350
Scottsdale, AZ 85254
Attention: Legal Department
Facsimile No. (480) 264-2943

Any party may change the address to which any such Notice is to be delivered by
furnishing ten (10) days written notice of such change to the other parties in
accordance with the provisions of this Section 10.5. Notices shall be deemed to
have been given on the date as set forth above, even if there is an inability to
actually deliver any such Notice because of a changed address of which no Notice
was given, or there is a rejection or refusal to accept any Notice offered for
delivery. Notice for any party may be given by its respective counsel.
Additionally, Notice from Lender may also be given by Servicer and Lender hereby
acknowledges and agrees that Borrower shall be entitled to rely on any Notice
given by Servicer as if it had been sent by Lender.
    

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Section 10.6    Waiver of Trial by Jury. BORROWER AND LENDER EACH HEREBY AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES
ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE
A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER.
Section 10.7    Headings, Schedules and Exhibits. The Article and/or Section
headings and the Table of Contents in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose. The Schedules and Exhibits annexed hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.
Section 10.8    Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 10.9    Preferences. Lender shall have the continuing and exclusive
right to apply or reverse and reapply any and all payments by Borrower to any
portion of the Obligations of Borrower hereunder. To the extent Borrower makes a
payment or payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
Section 10.10    Waiver of Notice. Borrower shall not be entitled to any notices
of any nature whatsoever from Lender except with respect to matters for which
this Agreement or the other Loan Documents specifically and expressly provide
for the giving of notice by Lender to Borrower and except with respect to
matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which
this Agreement or the other Loan Documents do not specifically and expressly
provide for the giving of notice by Lender to Borrower. Except as specifically
and expressly provided for in the Loan Documents, Guarantor shall not be
entitled to any notices of any nature whatsoever from Lender under this
Agreement or the other Loan Documents, and Guarantor hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which
this Agreement or the other Loan Documents do not specifically and expressly
provide for the giving of notice by Lender to Guarantor.

    

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Section 10.11    Remedies of Borrower. In the event that a claim or adjudication
is made that Lender or its agents have acted unreasonably or unreasonably
delayed acting in any case where, by law or under this Agreement or the other
Loan Documents, Lender or such agent, as the case may be, has an obligation to
act reasonably or promptly, neither Lender nor its agents shall be liable for
any monetary damages and Borrower’s sole remedy shall be limited to commencing
an action seeking injunctive relief or declaratory judgment. Any action or
proceeding to determine whether Lender has acted reasonably shall be determined
by an action seeking declaratory judgment.
Section 10.12    Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to this Agreement and the other Loan Documents shall take the
same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.
Section 10.13    No Joint Venture or Partnership; No Third Party Beneficiaries.
(a)    Borrower and Lender intend that the relationships created hereunder and
under the other Loan Documents be solely that of borrower and lender. Nothing
herein or therein is intended to create a joint venture, partnership,
tenancy-in-common or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in any Property other than that of beneficiary or
lender.
(b)    The Loan Documents are solely for the benefit of Lender and Borrower and
nothing contained in any Loan Document shall be deemed to confer upon anyone
other than Lender and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained therein.
Section 10.14    Publicity. All news releases, publicity or advertising by
Borrower or any of its Affiliates through any media intended to reach the
general public which refers to the Loan Documents or the financing evidenced by
the Loan Documents, to Lender (with respect to the Loan and the Securitization
of the Loan only), the Affiliate of Lender that acts as the issuer with respect
to a Securitization or any of their other Affiliates (in each case, with respect
to the Loan and the Securitization of the Loan only) (x) shall be prohibited
prior to the final Securitization of the Loan and (y) after the final
Securitization of the Loan, shall be subject to the prior written approval of
Lender. Lender shall have the right to publicly describe the Loan in general
terms advertising and public communications of all kinds, including press
releases, direct mail, newspapers, magazines, journals, e-mail, or internet
advertising or communications. Details such as the names of the Properties, the
addresses of the Properties, the amount of the Loan, the date of the closing and
descriptions of the size/locations of the Properties shall only be included
subject to Borrower’s reasonable approval in advance. Notwithstanding the
foregoing, Borrower’s approval shall not be required for the publication by
Lender of notice of the Loan and the Securitization of the Loan by means of a
customary tombstone advertisement, which, for the avoidance of doubt, may
include the amount of the Loan, the amount of securities sold, the number of
Properties as of the Closing Date, the settlement date and the parties involved
in the transactions contemplated hereby and the Securitization.
    

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Section 10.15    Waiver of Marshalling of Assets. To the fullest extent
permitted by law, Borrower, for itself and its successors and assigns, waives
all rights to a marshalling of the assets of Borrower, Borrower’s members or
partners, as applicable, and others with interests in Borrower, and of the
Collateral, and shall not assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Collateral for the collection of the Obligations
without any prior or different resort for collection, or of the right of Lender
to the payment of the Obligations out of the net proceeds of the Collateral in
preference to every other claimant whatsoever.
Section 10.16    Certain Waivers. Borrower hereby waives the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by Lender or its agents or otherwise to offset any
obligations to make the payments required by the Loan Documents. No failure by
Lender to perform any of its obligations hereunder shall be a valid defense to,
or result in any offset against, any payments which Borrower is obligated to
make under any of the Loan Documents. Without limiting any of the other
provisions contained herein, Borrower hereby unconditionally and irrevocably
waives, to the maximum extent not prohibited by applicable law, any rights it
may have to claim or recover against Lender in any legal action or proceeding
any special, exemplary, punitive or consequential damages. 
Section 10.17    Conflict; Construction of Documents; Reliance. In the event of
any conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan, without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender’s exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.
Section 10.18    Brokers and Financial Advisors. Borrower hereby represents that
neither Borrower or any other Loan Party has dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement. Borrower shall indemnify,
defend and hold Lender harmless from and against any and all claims,
liabilities, losses, costs and expenses of any kind (including Lender’s
attorneys’ fees and expenses) in any way relating to or arising out of a claim
by any Person that such Person acted on behalf of Borrower, any Loan Party or
Lender in connection with the transactions contemplated herein. The provisions
of this Section 10.18 shall survive the expiration and termination of this
Agreement and the payment of the Obligations.
    

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Section 10.19    Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto and their
respective affiliates in respect of the transactions contemplated hereby and
thereby, and all prior agreements among or between such parties, including any
confidentiality agreements or any similar agreements between or among any such
parties, whether oral or written, are superseded by the terms of this Agreement
and the other Loan Documents.
Section 10.20    Servicer. At the option of Lender, the Loan may be serviced by
a servicer or special servicer (the “Servicer”) selected by Lender (prior to any
Default or Event of Default, in consultation with Borrower) and Lender may
delegate all or any portion of its responsibilities under this Agreement and the
other Loan Documents to the Servicer pursuant to the trust and servicing
agreement or pooling and servicing agreement (the “Servicing Agreement”)
governing the Securitization. Borrower shall not be responsible for any set-up
fees or any other initial costs relating to or arising under the Servicing
Agreement. Borrower shall not be responsible for payment of the monthly master
servicing fee due to the Servicer under the Servicing Agreement. Notwithstanding
the foregoing, Borrower shall pay all Trust Fund Expenses. For the avoidance of
doubt, this Section 10.20 shall not be deemed to limit Borrower’s obligations
under Section 4.1.20.
Section 10.21    Joint and Several Liability. If more than one Person has
executed this Agreement as “Borrower,” the representations, covenants,
warranties and obligations of all such Persons hereunder shall be joint and
several.
Section 10.22    Creation of Security Interest. Notwithstanding any other
provision set forth in this Agreement, the Note, the Mortgage Documents or any
of the other Loan Documents, Lender may at any time create a security interest
in all or any portion of its rights under this Agreement, the Note, the Mortgage
Documents and any other Loan Document (including the advances owing to it) in
favor of any Federal Reserve Bank in accordance with Regulation A of the Board
of Governors of the Federal Reserve System.
Section 10.23    Assignments and Participations. In addition to the right to
securitize the Loan under Section 9.1, to sever the interests in the Loan into
“component” notes under Section 9.3 and any other rights of Lender hereunder,
the Loan, the Note, the Loan Documents and/or Lender’s rights, title,
obligations and interests therein may be sold, assigned, participated or
otherwise transferred by Lender and any of its successors and assigns to any
Person at any time in its sole and absolute discretion, in whole or in part,
whether by operation of law (pursuant to a merger or other successor in
interest) or otherwise without notice to or consent from Borrower or any other
Person. Upon such assignment, all references to Lender in this Agreement and in
any Loan Document shall be deemed to refer to such assignee or successor in
interest and such assignee or successor in interest shall thereafter stand in
the place of Lender in all respects (subject to the requirements and limitations
therein, including the requirements under Section 2.10.6). Each participant
shall be entitled to the benefits of Sections 2.9 and 2.10 (subject to the
requirements and limitations therein, including the requirements under Section
2.10.6, it being understood that the documentation required under Section 2.10.6
shall be delivered to the participating Lender) to the same extent as if it were
a Lender and had acquired its interest by assignment; provided that (i) such
participant shall not be entitled to receive any greater payment pursuant to
Sections 2.9 or Section 2.10 than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
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in law that occurs after the participant acquired the applicable participation
and (ii) no holder of Securities shall be entitled to the benefits of Sections
2.9 and 2.10.
Section 10.24    Register and Participant Register. Each Lender or its designee,
which may include any Servicer, as a non-fiduciary agent of Borrower, or the
Borrower, (such Lender or its designee, the “Registrar”) shall maintain a record
that identifies such Lender (including successors and assignees), including the
name and address of such Lender, and such Lender’s rights to principal and
stated interest (the “Register”), and shall record all transfers of an interest
in such Lender’s Loan, in a Register. Transfers of interests in the Loan
(including assignments) shall be subject to the applicable conditions set forth
in the Loan Documents with respect thereto and the Registrar will update such
Register to reflect the transfer. The Register maintained by such Lender (or its
designee) shall be available for inspection by Borrower, at any reasonable time
and from time to time upon reasonable prior notice. Each assignment shall be
recorded in the Register as provided in this paragraph; provided that failure to
properly record a transfer shall not affect the validity of such transfer, and
any such error shall be corrected in the applicable Register. Furthermore, each
Lender that sells a participation shall, acting solely for this purpose as a
non-fiduciary agent of Borrower, maintain a register on which it enters the name
and address of each participant and the principal amounts and stated interest of
each participant’s interest in the Loan or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register to any
Person (including the identity of any participant or any information relating to
a participant’s interest) except to the extent that such disclosure is necessary
to establish that such Loan or other obligation is in registered form under
Section 5f.103-1(c) of the U.S. Department of Treasury regulations. The entries
in the Register and Participant Register shall be conclusive absent manifest
error. Borrower, the Lender and any of its successors and assigns, and the
Registrar shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement and the participating Lender shall treat each Person whose name is
recorded in the Participant Register pursuant to the terms hereof as the owner
of such participation for all purposes of this Agreement. Failure to make any
such recordation, or any error in such recordation, however, shall not affect
Borrower’s obligations in respect of the Loan.
Section 10.25    Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 10.26    Set-Off. In addition to any rights and remedies of Lender
provided by this Agreement and by law, Lender shall have the right in its sole
discretion, without prior notice to Borrower, any such notice being expressly
waived by Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by Borrower hereunder (whether at the stated maturity,
by acceleration or otherwise), to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by Lender or any Affiliate
thereof to or for the credit or the account of Borrower; provided however,
Lender may only exercise such right during the continuance of an Event of
Default. Lender agrees promptly to notify Borrower after any such set-off and
application made

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by Lender; provided that the failure to give such notice shall not affect the
validity of such set-off and application.
Section 10.27    Cross-Default; Cross-Collateralization; Waiver of Marshalling
of Assets.
(a)    Borrower acknowledge that Lender has made the Loan to Borrower upon,
among other things, the security of its collective interest in the Properties
and in reliance upon the aggregate of the Properties taken together being of
greater value as collateral security than the sum of each Property taken
separately. Borrower agrees that the Mortgages are and will be
cross-collateralized and cross-defaulted with each other so that (i) an Event of
Default under any of the Mortgages shall constitute an Event of Default under
each of the other Mortgages which secure the Note; (ii) an Event of Default
under the Note or this Agreement shall constitute an Event of Default under each
Mortgage; (iii) each Mortgage shall constitute security for the Note as if a
single blanket lien were placed on all of the Properties as security for the
Note; and (iv) such cross-collateralization shall in no event be deemed to
constitute a fraudulent conveyance.
(b)    To the fullest extent permitted by law, Borrower for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners or members and of the Properties, or to a sale in
inverse order of alienation in the event of foreclosure of all or any of the
Mortgages, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Properties for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Properties in preference to
every other claimant whatsoever. In addition, Borrower, for itself and its
successors and assigns, waives in the event of foreclosure of any or all of the
Mortgages, any equitable right otherwise available to Borrower which would
require the separate sale of the Properties or require Lender to exhaust its
remedies against any Property or any combination of the Properties before
proceeding against any other Property or combination of Properties; and further
in the event of such foreclosure Borrower does hereby expressly consents to and
authorizes, at the option of Lender, the foreclosure and sale either separately
or together of any combination of the Properties
Section 10.28    Certificated Interests.
(a)    If any ownership interest in an Equity Interest of Borrower or any
Borrower TRS is represented by a certificate (each, an “Equity Certificate”)
that has been pledged and delivered to Lender and such Equity Certificate is
lost, stolen or destroyed, then, upon the written request of Lender to the
applicable Loan Party, such Loan Party shall issue to Lender a new Equity
Certificate in place of the Equity Certificate that was lost, stolen or
destroyed, provided such Lender: (i) makes proof by affidavit, in form and
substance reasonably satisfactory to the applicable Loan Party, that such
previously issued Equity Certificate has been lost, stolen or destroyed and
indemnifies Borrower for any loss relating thereto and (ii) requests the
issuance of a new Equity Certificate before the Loan party has notice that such
previously issued Equity Certificate has been acquired by a purchaser for value
in good faith and without notice of an adverse claim.

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(b)    Upon repayment in full of the Loan, in the event Lender fails to return
to a Loan Party an Equity Certificate previously delivered by such Loan Party to
Lender in connection with the Loan, Lender shall deliver to the applicable Loan
Party, within ten (10) days of such Loan Party’s demand, an affidavit in form
and substance satisfactory to the applicable Loan Party, that such previously
issued Certificate has been lost, stolen or destroyed, and that such Equity
Certificate has not been transferred to any third party and indemnifies Borrower
for any loss relating thereto.
Section 10.29    Arizona Provisions. Anything to the contrary herein or
elsewhere notwithstanding, in no event shall Borrower have any liability or
other obligation under or with respect to the Sponsor Guaranty, the Equity Owner
Guaranty or the Borrower TRS Guaranty. The following Arizona provision does not
limit the express choice of New York law as set forth in Section 10.3 of this
Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions contained in this Agreement and the
other Loan Documents, Arizona law is held to govern this Agreement, any Mortgage
Document encumbering a Property located in Arizona or any other Loan Document:
(a)    [Reserved].
Section 10.30    California Provisions. Anything to the contrary herein or
elsewhere notwithstanding, in no event shall Borrower have any liability or
other obligation under or with respect to the Sponsor Guaranty, the Equity Owner
Guaranty or the Borrower TRS Guaranty. The following California provision does
not limit the express choice of New York law as set forth in Section 10.3 of
this Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions contained in this Agreement and the
other Loan Documents, California law is held to govern this Agreement, any
Mortgage Document encumbering a Property located in California or any other Loan
Document:
(a)    Waiver of Offset. Notwithstanding anything contained herein to the
contrary, no portion of any of the Obligations shall be or be deemed to be
offset or compensated by all or any part of any claim, cause of action,
counterclaim, or cross-claim, whether liquidated or unliquidated, that Borrower
may have or claim to have against any other Relevant Party. Borrower hereby
waives, to the fullest extent permitted by applicable law, the benefits of
California Code of Civil Procedure Section 431.70.
(b)    Insurance Notice.     Lender hereby notifies Borrower of the provisions
of Section 2955.5(a) of the California Civil Code, which reads as follows:
“No lender shall require a borrower, as a condition of receiving or maintaining
a loan secured by real property, to provide hazard insurance coverage against
risks to the improvements on that real property in an amount exceeding the
replacement value of the improvements on the property.”

This disclosure is being made by Lender to Borrower pursuant to Section
2955.5(b) of the California Civil Code. Borrower hereby acknowledges receipt of
this disclosure and acknowledges that this disclosure has been made by Agent
before execution of the Note.

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(c)    Environmental Provisions. The provisions contained in Section 3.2.1 of
this Agreement are intended by the parties to constitute “environmental
provisions” as defined in California Code of Civil Procedure Section 736, and
Lender shall have all rights and remedies provided in such section.
(d)    Access to Properties. Lender’s rights under Section 4.1.4 of this
Agreement shall be deemed to include, without limitation, its rights under
California Civil Code Section 2929.5, as such provisions may be amended from
time to time.
Section 10.31    Florida Provision. The following Florida provision does not
limit the express choice of New York law as set forth in Section 10.3 of this
Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions contained in this Agreement and the
other Loan Documents, Florida law is held to govern this Agreement, any Mortgage
Document encumbering a Property located in Florida or any other Loan Document:
(a)    Interest on Judgments. The parties acknowledge and agree that the Default
Rate provided for herein shall also be the rate of interest payable on any
judgments entered in favor of Lender in connection with the loan evidenced
hereby.
Section 10.32    Georgia Provision. The following Georgia provision does not
limit the express choice of New York law as set forth in Section 10.3 of this
Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions contained in this Agreement and the
other Loan Documents, Georgia law is held to govern this Agreement, any Mortgage
Document encumbering a Property located in Georgia or any other Loan Document:
(a)    [Reserved].
Section 10.33    Arizona Provision. The following Arizona provision does not
limit the express choice of New York law as set forth in Section 10.3 of this
Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions contained in this Agreement and the
other Loan Documents, Arizona law is held to govern this Agreement, any Mortgage
Document encumbering a Property located in Arizona or any other Loan Document:
(a)    [Reserved].
Section 10.34    California Provision. The following California provision does
not limit the express choice of New York law as set forth in Section 10.3 of
this Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions contained in this Agreement and the
other Loan Documents, California law is held to govern this Agreement, any
Mortgage Document encumbering a Property located in California or any other Loan
Document:
(a)    [Reserved].
Section 10.35    Nevada Provision. The following Nevada provision does not limit
the express choice of New York law as set forth in Section 10.3 of this
Agreement and the other

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Loan Documents. If and to the extent that, notwithstanding the choice of law
provisions contained in this Agreement and the other Loan Documents, Nevada law
is held to govern this Agreement, any Mortgage Document encumbering a Property
located in Nevada or any other Loan Document:
(a)    Waiver of Offset. Notwithstanding anything contained herein to the
contrary, no portion of any of the Obligations shall be or be deemed to be
offset or compensated by all or any part of any claim, cause of action,
counterclaim, or cross-claim, whether liquidated or unliquidated, that Borrower
may have or claim to have against any other Loan Party.
(b)    Waiver of Prepayment. Borrower hereby expressly (i) waives, to the extent
permitted by law, any right it may have to prepay any Loan in whole or in part,
without penalty, upon acceleration of the Maturity Date; and (ii) agrees that if
a prepayment of any or all of any Loan is made, Borrower shall be obligated to
pay, concurrently therewith, any fees applicable thereto.  By initialing this
provision in the space provided below, the Loan Parties hereby declare that the
Lender’s agreement to make the subject Loan at the Interest Rate and for the
term set forth herein constitutes adequate consideration, given individual
weight by the undersigned, for this waiver and agreement.
Section 10.36    North Carolina Provision. The following North Carolina
provision does not limit the express choice of New York law as set forth in
Section 10.3 of this Agreement and the other Loan Documents. If and to the
extent that, notwithstanding the choice of law provisions contained in this
Agreement and the other Loan Documents, North Carolina law is held to govern
this Agreement, any Mortgage Document encumbering a Property located in North
Carolina or any other Loan Document:
(a)    [Reserved].
Section 10.37    South Carolina Provision. The following South Carolina
provision does not limit the express choice of New York law as set forth in
Section 10.3 of this Agreement and the other Loan Documents. If and to the
extent that, notwithstanding the choice of law provisions contained in this
Agreement and the other Loan Documents, South Carolina law is held to govern
this Agreement, any Mortgage Document encumbering a Property located in South
Carolina or any other Loan Document:
(a)    [Reserved].
Section 10.38    Texas Provision. The following Texas provision does not limit
the express choice of New York law as set forth in Section 10.3 of this
Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions contained in this Agreement and the
other Loan Documents, Texas law is held to govern this Agreement, any Mortgage
Document encumbering a Property located in Texas or any other Loan Document:
(a)    [Reserved].
Section 10.39    Tennessee Provision. The following Tennessee provision does not
limit the express choice of New York law as set forth in Section 10.3 of this
Agreement and the other Loan Documents. If and to the extent that,
notwithstanding the choice of law provisions

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contained in this Agreement and the other Loan Documents, Tennessee law is held
to govern this Agreement, any Mortgage Document encumbering a Property located
in Tennessee or any other Loan Document:
(a)    [Reserved].
[No Further Text on This Page]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives, all as of the day and year
first above written.
LENDER:
GERMAN AMERICAN CAPITAL CORPORATION

By:
/s/ R. Christopher Jones

Name: R. Christopher Jones
Title: Director

By:
/s/ Menahem Namer

Name: Menahem Namer
Title: Vice President

Signature Page to ARP 2014 SFR1
Loan Agreement

--------------------------------------------------------------------------------

BORROWER:

ARP 2014-1 BORROWER, LLC, a
Delaware limited liability company

By:
/s/ Shant Koumriqian

Name: Shant Koumriqian
Title: Treasurer

Signature Page to ARP 2014 SFR1
Loan Agreement