Exhibit 10.2

LOAN AGREEMENT

Dated as of May 14, 2018

Between

NIC 12 OWNER LLC and NIC 13 OWNER LLC,

as Borrower

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Lender

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TABLE OF CONTENTS

 

     Page  

ARTICLE I – DEFINITIONS; PRINCIPLES OF CONSTRUCTION

     2  

Section 1.1 Definitions

     2  

Section 1.2 Principles of Construction

     38  

ARTICLE II – GENERAL TERMS

     39  

Section 2.1 Loan Commitment; Disbursement to Borrower

     39  

2.1.1 Agreement to Lend and Borrow

     39  

2.1.2 Single Disbursement to Borrower

     39  

2.1.3 The Note, Pledge Agreement and Loan Documents

     39  

2.1.4 Use of Proceeds

     39  

Section 2.2 Interest Rate

     39  

2.2.1 Interest Rate

     39  

2.2.2 Interest Calculation

     39  

2.2.3 Determination of Interest Rate

     39  

2.2.4 Additional Costs

     42  

2.2.5 Default Rate

     42  

2.2.6 Usury Savings

     42  

2.2.7 Interest Rate Cap Agreement

     42  

Section 2.3 Loan Payment

     45  

2.3.1 Monthly Debt Service Payments

     45  

2.3.2 Payments Generally

     46  

2.3.3 Payment on Maturity Date

     46  

2.3.4 Late Payment Charge

     46  

2.3.5 Method and Place of Payment

     46  

Section 2.4 Prepayments

     46  

2.4.1 Voluntary Prepayments

     46  

2.4.2 Liquidation Events

     47  

2.4.3 Prepayments After Default

     48  

Section 2.5 Release of Collateral

     48  

2.5.1 Release of all Collateral Upon Payment in Full

     48  

2.5.2 Release of Individual Property

     48  

Section 2.6 Lockbox Account/Cash Management

     50  

2.6.1 Lockbox Account

     50  

2.6.2 Cash Management Account

     51  

2.6.3 Payments Received under the Cash Management Agreement

     51  

2.6.4 Distributions

     52  

2.6.5 Replacement Lockbox Account Agreement and Cash Management Agreement

     52  

Section 2.7 Withholding Taxes

     52  

ARTICLE III – CONDITIONS PRECEDENT

     56  

Section 3.1 Conditions Precedent to Closing

     56  

 

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ARTICLE IV – REPRESENTATIONS AND WARRANTIES

     56  

Section 4.1

   Borrower Representations      56  

4.1.1

   Organization      56  

4.1.2

   Proceedings      56  

4.1.3

   No Conflicts      56  

4.1.4

   Litigation      57  

4.1.5

   Agreements      57  

4.1.6

   Title      57  

4.1.7

   Solvency      58  

4.1.8

   Full and Accurate Disclosure      58  

4.1.9

   ERISA      58  

4.1.10

   Compliance      59  

4.1.11

   Financial Information      60  

4.1.12

   Condemnation      60  

4.1.13

   Federal Reserve Regulations      60  

4.1.14

   Utilities and Public Access      60  

4.1.15

   Not a Foreign Person      61  

4.1.16

   Separate Lots      61  

4.1.17

   Assessments      61  

4.1.18

   Enforceability      61  

4.1.19

   No Prior Assignment      61  

4.1.20

   Insurance      61  

4.1.21

   Use of Property      61  

4.1.22

   Certificate of Occupancy; Licenses      61  

4.1.23

   Flood Zone      62  

4.1.24

   Physical Condition      62  

4.1.25

   Boundaries      62  

4.1.26

   Leases and Major Contracts      62  

4.1.27

   Survey      63  

4.1.28

   Inventory      63  

4.1.29

   Filing and Recording Taxes      63  

4.1.30

   Special Purpose Entity/Separateness      63  

4.1.31

   Management Agreement      67  

4.1.32

   Illegal Activity      67  

4.1.33

   No Change in Facts or Circumstances; Disclosure      67  

4.1.34

   Investment Company Act      68  

4.1.35

   Embargoed Person      68  

4.1.36

   Principal Place of Business; State of Organization      68  

4.1.37

   Environmental Representations and Warranties      68  

4.1.38

   Cash Management Account      69  

4.1.39

   Taxes      70  

4.1.40

   Ground Lease      70  

4.1.41

   Operating Lease      71  

4.1.42

   Residency Agreement      71  

4.1.43

   Third-Party Payors’ Programs      72  

4.1.44

   Labor Matters      72  

 

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4.1.45

  No Contractual Obligations      72  

4.1.46

  Mortgage Loan Representations      72  

Section 4.2

  Survival of Representations      72  

ARTICLE V – BORROWER COVENANTS

     72  

Section 5.1

  Affirmative Covenants      72  

5.1.1

  Existence; Compliance with Legal Requirements      73  

5.1.2

  Taxes and Other Charges      74  

5.1.3

  Litigation      75  

5.1.4

  Access to the Properties      75  

5.1.5

  Notice of Default      75  

5.1.6

  Cooperate in Legal Proceedings      75  

5.1.7

  Perform Loan Documents      75  

5.1.8

  Net Liquidation Proceeds After Debt Service      75  

5.1.9

  Further Assurances      75  

5.1.10

  Principal Place of Business, State of Organization      76  

5.1.11

  Financial Reporting      76  

5.1.12

  Business and Operations      79  

5.1.13

  Title to the Properties      79  

5.1.14

  Costs of Enforcement      79  

5.1.15

  Estoppel Statement      79  

5.1.16

  Loan Proceeds      80  

5.1.17

  Performance by Loan Party      80  

5.1.18

  Confirmation of Representations      80  

5.1.19

  Environmental Covenants      80  

5.1.20

  Residency Agreements, Leasing Matters and Major Contracts      82  

5.1.21

  Alterations      83  

5.1.22

  Operation of Property      84  

5.1.23

  Embargoed Person      84  

5.1.24

  Payment of Obligations      84  

5.1.25

  Taxes      85  

5.1.26

  Ground Leases      85  

5.1.27

  Operating Lease      88  

5.1.28

  Reserve Funds      88  

5.1.29

  Special Distributions      88  

5.1.30

  Notices      88  

5.1.31

  Curing      88  

5.1.32

  Mortgage Borrower Covenants      89  

Section 5.2

  Negative Covenants      89  

5.2.1

  Operation of Property      89  

5.2.2

  Liens      89  

5.2.3

  Dissolution      89  

5.2.4

  Change In Business      90  

5.2.5

  Debt Cancellation      90  

5.2.6

  Zoning      90  

5.2.7

  No Joint Assessment      90  

5.2.8

  Intentionally Omitted      90  

 

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5.2.9

  ERISA      90  

5.2.10

  Transfers      91  

5.2.11

  Ground Lease      93  

5.2.12

  Operating Lease      94  

5.2.13

  Major Contracts      94  

5.2.14

  Limitation on Securities Issuances      94  

5.2.15

  Limitations on Distributions      94  

5.2.16

  Contractual Obligations      95  

5.2.17

  Refinancing      95  

5.2.18

  Bankruptcy Related Covenants      95  

ARTICLE VI – INSURANCE; CASUALTY; CONDEMNATION;

     96  

Section 6.1

  Insurance      96  

Section 6.2

  Casualty      96  

Section 6.3

  Condemnation      97  

Section 6.4

  Restoration      97  

ARTICLE VII – RESERVE FUNDS

     97  

Section 7.1

  Required Repairs      97  

7.1.1

  Required Repairs      97  

Section 7.2

  Tax and Insurance Escrow Fund      98  

Section 7.3

  Replacements and Replacement Reserve      98  

Section 7.4

  Intentionally Omitted      98  

Section 7.5

  Ground Lease Reserve      98  

Section 7.6

  Excess Cash Flow Reserve Fund      99  

Section 7.7

  Mezzanine Reserve Funds, Generally      99  

Section 7.8

  Transfer of Funds In Mortgage Reserve Accounts      100  

ARTICLE VIII – DEFAULTS

     100  

Section 8.1

  Event of Default      100  

Section 8.2

  Remedies      104  

Section 8.3

  Remedies Cumulative; Waivers      105  

Section 8.4

  Right to Cure Defaults      106  

ARTICLE IX – SPECIAL PROVISIONS

     106  

Section 9.1

  Secondary Market Transaction      106  

9.1.1

  Sale of Notes and Secondary Market Transaction      106  

9.1.2

  Secondary Market Transaction Costs      108  

9.1.3

  Uncross of Properties      108  

Section 9.2

  Intentionally Omitted      108  

Section 9.3

  Exculpation      108  

Section 9.4

  Matters Concerning Manager      113  

Section 9.5

  Servicer      113  

ARTICLE X – MISCELLANEOUS

     114  

Section 10.1

  Survival      114  

Section 10.2

  Lender’s Discretion      114  

 

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Section 10.3

  Governing Law      114  

Section 10.4

  Modification, Waiver in Writing      115  

Section 10.5

  Delay Not a Waiver      116  

Section 10.6

  Notices      116  

Section 10.7

  Trial by Jury      117  

Section 10.8

  Headings      117  

Section 10.9

  Severability      117  

Section 10.10

  Preferences      118  

Section 10.11

  Waiver of Notice      118  

Section 10.12

  Remedies of Borrower      118  

Section 10.13

  Expenses; Indemnity      118  

Section 10.14

  Schedules Incorporated      119  

Section 10.15

  Offsets, Counterclaims and Defenses      119  

Section 10.16

  No Joint Venture or Partnership; No Third Party Beneficiaries      120  

Section 10.17

  Publicity      120  

Section 10.18

  Cross Default; Cross Collateralization; Waiver of Marshalling of Assets     
120  

Section 10.19

  Waiver of Counterclaim      121  

Section 10.20

  Conflict; Construction of Documents; Reliance      121  

Section 10.21

  Brokers and Financial Advisors      121  

Section 10.22

  Prior Agreements      122  

Section 10.23

  Joint and Several Liability      122  

Section 10.24

  Certain Additional Rights of Lender (VCOC)      122  

Section 10.25

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      123
 

SCHEDULES

 

Schedule I-A

  –     

Individual Mortgage Borrowers

Schedule I-B

  –     

OpCo Managers

Schedule II-A

  –     

Rent Roll

Schedule II-B

  –     

Major Contracts

Schedule III

  –     

Intentionally Omitted

Schedule IV

  –     

Organizational Chart of Borrower

Schedule V

  –     

Release Amounts

Schedule VI

  –     

Intentionally Omitted

Schedule VII

  –     

Leasehold Pledgor Company Agreement

Schedule VIII  

  –     

Mortgage Borrower Company Agreements

 

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MEZZANINE LOAN AGREEMENT

THIS MEZZANINE LOAN AGREEMENT, dated as of May 14, 2018 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking
association chartered under the laws of the United States of America, having an
address at 383 Madison Avenue, New York, New York 10179 (“Lender”) and NIC 12
OWNER LLC and NIC 13 OWNER LLC, each a Delaware limited liability company,
having its principal place of business at c/o Fortress Investment Group LLC,
1345 Avenue of the Americas, 45th Floor, New York, New York 10105 (each, an
“Individual Borrower” and collectively, “Borrower”).

W I T N E S S E T H:

WHEREAS, JPMorgan Chase Bank, National Association, a banking association
chartered under the laws of the United States of America (together with its
successors and assigns, “Mortgage Lender”) is making a loan to the entities
listed on Schedule I-A attached hereto (collectively, “Mortgage Borrower”) in
the principal amount of Six Hundred Twenty-Five Million and No/100 Dollars
($625,000,000.00) (the “Mortgage Loan”) pursuant to a Loan Agreement dated as of
the date hereof (as amended, supplemented or otherwise modified from time to
time, the “Mortgage Loan Agreement”) and evidenced by that certain Consolidated,
Amended and Restated Promissory Note, dated of even date herewith and payable to
the order of Mortgage Lender in the original principal amount of $625,000,000.00
(as the same may hereafter be amended, restated, renewed, supplemented,
replaced, extended or otherwise modified from time to time, the “Mortgage
Note”), and Mortgage Borrower and Operating Lessee (as defined herein) have
granted to Mortgage Lender certain first priority mortgages and deeds of trust
(collectively, as each of the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the “Mortgage”) on, among
other things, the fee and/or leasehold interest of such Person, as the case may
be, in the real property as more fully described in the Mortgages (the
“Properties”);

WHEREAS, (i) Borrower is (a) the legal and beneficial owner of 100% of the
issued and outstanding limited liability company interests in Mortgage Borrowers
that are limited liability companies (the “Fee Borrower LLC Pledged Interests”)
and (b) the legal and beneficial owner of 100% of the issued and outstanding
limited liability company interests in NIC 13 Durham Regent Inc. and NIC 13
Jordan Oaks Inc. (such Persons, “Corporate Pledgor” and such interests the
“Corporate Pledged Interests”) and (ii) Corporate Pledgor is (a) the legal and
beneficial owner of 100% of the issued and outstanding limited partnership
interests in NIC 13 Durham Regent Owner LP and NIC 13 Jordan Oaks Owner LP, each
an Individual Mortgage Borrower (the “Fee Borrower LP Pledged Interests” and
together with the Fee Borrower LLC Pledged Interests and the Corporate Pledged
Interests, the “Fee Borrower Pledged Interests”) and (b) the legal and
beneficial owner of 100% of the issued and outstanding limited liability company
interests in NIC 13 Durham Regent Owner GP LLC and NIC 13 Jordan Oaks Owner GP
LLC, each a Delaware limited liability company (the “GP Pledged Interests”);

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WHEREAS, pursuant to the Operating Lease (as defined herein) between Mortgage
Borrower and Operating Lessee (as defined herein), as lessee, Operating Lessee
has agreed to lease and operate the Properties;

WHEREAS, Needle Interco Parent LLC, a Delaware limited liability company
(“Leasehold Pledgor”; together with Borrower and Corporate Pledgor collectively
or individually, as the context may require, “Pledgor”) is the legal and
beneficial owner of 100% of the issued and outstanding limited liability company
interests in Operating Lessee (the “Leasehold Pledgor Pledged Interests” and,
collectively with the Fee Borrower Pledged Interests and the GP Pledged
Interests, the “Pledged Company Interests”);

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

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

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

ARTICLE I – DEFINITIONS; PRINCIPLES OF CONSTRUCTION.

Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:

“Acceptable Counterparty” shall mean a counterparty to the Interest Rate Cap
Agreement (or the guarantor of such counterparty’s obligations) that has and
shall maintain, until the expiration of the applicable Interest Rate Cap
Agreement, (i) 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, (ii) a
long-term unsecured debt rating of not less than “A1” from Moody’s, and (iii) a
long-term unsecured debt rating of at least “A” by Fitch (and not on Rating
Watch Negative) and a short-term unsecured debt rating of at least “F1” by Fitch
(and not on Rating Watch Negative); provided, however, that (I) so long as
neither SMBC Capital Markets, Inc. nor its credit support party (which shall be
either Sumitomo Mitsui Banking Corporation or SMBC Derivative Products Limited)
is downgraded by S&P or Moody’s from the long and short term ratings issued by
such Rating Agencies below the above rating (as applicable) or its ratings as of
the date hereof and SMBC Capital Markets, Inc. (with Sumitomo Mitsui Banking
Corporation or SMBC Derivative Products Limited, as applicable, as its credit
support party) and either Sumitomo Mitsui Banking Corporation or SMBC Derivative
Products Limited provides a full guaranty of all of the obligations of SMBC
Capital Markets, Inc. under the applicable Interest Rate Cap Agreement pursuant
to a guaranty in form and substance reasonably acceptable to Lender, then SMBC
Capital Markets, Inc. (with Sumitomo Mitsui Banking Corporation or SMBC
Derivative Products Limited, as applicable, as its credit support party) will be
an Acceptable Counterparty, and (II) so long as Wells Fargo Bank, N.A. is not
downgraded by S&P or Moody’s below its long and short-term ratings as of the
date hereof, Wells Fargo Bank, N.A. shall be an Acceptable Counterparty.

 

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“Additional Insolvency Opinion” shall mean a non-consolidation opinion letter
delivered in connection with the Loan subsequent to the Closing Date reasonably
satisfactory in form and substance to Lender and is delivered by counsel
reasonably satisfactory to Lender.

“Adjusted Release Amount” shall mean, for each Individual Property, the sum of
(I)(a) the Release Amount for such Individual Property plus (b) fifteen percent
(15%) of the Release Amount for such Individual Property plus (II) the Debt
Yield Cure Payment, to the extent applicable.

“Affiliate” shall mean, as to any Person, any other Person that, directly or
indirectly, is in Control of, is Controlled by or is under common Control with
such Person or is a director or officer of such Person or of an Affiliate of
such Person.

“Affiliated Manager” shall mean OpCo Manager.

“Agent” shall mean Wells Fargo Bank, National Association, or any successor
Eligible Institution acting as Agent under the Cash Management Agreement.

“Allocated Loan Amount” shall have the meaning set forth in Section 9.1.3
hereof.

“Alternate Rate Index” shall mean a floating rate index (a) that is commonly
accepted by market participants in CMBS loans as an alternative to the LIBOR
Rate Index and (b) that is publicly recognized by the International Swaps and
Derivatives Association (ISDA) as an alternative to the LIBOR Rate Index;
provided that in no event will the Alternate Rate Index be less than zero.

“Alternate Rate” shall mean, with respect to each Interest Period, the per annum
rate of interest of the Alternate Rate Index determined as of the Determination
Date immediately preceding the commencement of such Interest Period, plus the
Alternate Rate Spread; provided that in no event will the Alternate Rate be less
than zero. Notwithstanding the foregoing, in no event shall the interest rate
for the Alternate Rate Loan be less than the LIBOR Rate Floor plus the Spread
under the LIBOR Rate Loan.

“Alternate Rate Loan” shall mean the Loan at such time as interest thereon
accrues at a rate of interest based upon the Alternate Rate.

“Alternate Rate Spread” shall mean, in connection with any conversion of the
Loan from (A) a LIBOR Rate Loan to an Alternate Rate Loan, the difference
(expressed as the number of basis points) of (a) the LIBOR Rate Index plus the
Spread as of the Determination Date for which the LIBOR Rate Index was last
applicable to the Loan minus (b) the Alternate Rate Index as of such
Determination Date, and (B) a Prime Rate Loan to an Alternate Rate Loan, the
difference (expressed as the number of basis points) of (a) the LIBOR Rate Index
plus the Spread as of the Determination Date for which the LIBOR Rate Index was
last applicable to the Loan minus (b) the Alternate Rate Index as of the
Determination Date that the Prime Rate Index

 

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was last applicable to the Loan ; provided, however, that in either such case,
if such difference is a negative number, then the Alternate Rate Spread shall be
zero; provided, further however, that (a) if the Loan is an Alternative Rate
Loan immediately prior to the commencement of the Interest Period with respect
to the seventh (7th) Payment Date (i) the Alternative Rate Spread will be
increased by fifty (50) basis points for the Interest Period applicable to the
seventh (7th) Payment Date and any Payment Date following such Payment Date, and
(ii) if the Loan is an Alternative Rate Loan immediately prior to the
commencement of the Interest Period with respect to the tenth (10th) Payment
Date, the Alternative Rate Spread will be increased by an additional fifty
(50) basis points for the Interest Period applicable to the tenth (10th) Payment
Date and any Payment Date following such Payment Date.

“Annual Budget” shall mean the operating budget for the Properties prepared by
Mortgage Borrower in accordance with Section 5.1.11(d) hereof for the applicable
Fiscal Year or other period.

“Applicable Rate” shall mean (i) the LIBOR Rate for so long as the Loan is a
LIBOR Rate Loan, (ii) the Alternate Rate for so long as the Loan is an Alternate
Rate Loan or (iii) the Prime Rate for so long as the Loan is a Prime Rate Loan.

“Applicable Spread” shall mean (i) the Spread for so long as the Loan is a LIBOR
Rate Loan, (ii) the Alternate Rate Spread for so long as the Loan is an
Alternate Rate Loan or (iii) the Prime Rate Spread for so long as the Loan is a
Prime Rate Loan.

“Approved Annual Budget” shall have the meaning set forth in Section 5.1.11(d)
hereof.

“Approved Rating Agencies” shall mean each of S&P, Moody’s, Fitch and
Morningstar or any other nationally-recognized statistical rating agency which,
in each case, has been approved by Lender.

“Assignment of Interest Rate Cap Agreement” shall have the meaning set forth in
Section 2.2.7(a) hereof.

“Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation.

“Bail-in Action” shall have the meaning set forth in Section 10.25 hereof.

“Bail-in Legislation” shall have the meaning set forth in Section 10.25 hereof.

“Bankruptcy Action” shall mean with respect to any Person (a) such Person filing
a voluntary petition under the Bankruptcy Code, or any other Federal, state,
local or foreign bankruptcy or insolvency law; (b) the filing of an involuntary
petition against such Person under the Bankruptcy Code, or any other Federal,
state, local or foreign bankruptcy or insolvency law, or soliciting or causing
to be solicited petitioning creditors for any involuntary petition against such
Person; (c) such Person filing an answer consenting to or otherwise acquiescing
in or joining in any involuntary petition filed against it, by any other Person
under the Bankruptcy Code, or any other Federal, state, local or foreign
bankruptcy or insolvency law;

 

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(d) such Person consenting to or acquiescing in or joining in an application for
the appointment of a custodian, receiver, trustee, or examiner for such Person
or any portion of the Collateral or any portion of any Individual Property; or
(e) such Person making an assignment for the benefit of creditors, or admitting,
in writing or in any legal proceeding, its insolvency or inability to pay its
debts as they become due or to take action in furtherance of any of the
foregoing.

“Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C. §101,
et seq., as the same may be amended from time to time, and any successor statute
or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors’ rights or any other Federal, state, local or foreign bankruptcy or
insolvency law.

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

“Breakage Costs” shall have the meaning set forth in Section 2.2.3(f) hereof.

“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which national banks in New York, New York, or the place of business of
Lender, or any Servicer or the financial institution that maintains any
collection account for or on behalf of any Servicer or any Reserve Funds (or, if
applicable, any Mezzanine Reserve Funds) or the New York Stock Exchange or the
Federal Reserve Bank of New York is not open for business.

“Capital Expenditures” shall mean, for any period, the amount expended for items
capitalized under GAAP (including expenditures for building improvements or
major repairs).

“Cash Management Account” shall have the meaning set forth in Section 2.6.2
hereof.

“Cash Management Agreement” shall mean that certain Cash Management Agreement,
dated as of the date hereof, by and among Borrower, Operating Lessee, Lender,
OpCo Manager, Holiday Manager, Mortgage Lender, Mortgage Borrower and Agent, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

“Cash Sweep Event” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Cash Sweep Period” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Casualty” shall have the meaning set forth in Section 6.2 hereof.

“Cause” shall mean, with respect to an Independent Director, (a) acts or
omissions by such Independent Director that constitute systematic and persistent
or willful disregard of such Independent Director’s duties, (b) such Independent
Director has been indicted or convicted for any crime or crimes of moral
turpitude or dishonesty or for any violation of any

 

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Legal Requirements, (c) such Independent Director no longer satisfies the
requirements set forth in the definition of “Independent Director”, (d) the fees
charged for the services of such Independent Director are materially in excess
of the fees charged by the other providers of Independent Directors listed in
the definition of “Independent Director” or (v) any other reason for which the
prior written consent of Lender shall have been obtained.

“Closing Date” shall mean the date of the funding of the Loan.

“Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be
further amended from time to time, and any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

“Collateral” shall have the meaning set forth in the Pledge Agreement and shall
include all amounts on deposit in the Mezzanine Deposit Account and the
Mezzanine Reserve Funds (if any) and any and all other property or collateral in
which Lender is granted a security interest under any of the Loan Documents, in
each case whether existing on the date hereof or hereafter pledged or assigned
to Lender.

“Cold Spring Property” shall have the meaning set forth in Section 4.1.16.

“Commercial Leases” shall have the meaning set forth in Section 4.1.26 hereof.

“Condemnation” shall mean a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of any Individual
Property, or any interest therein or right accruing thereto, including any right
of access thereto or any change of grade affecting such Individual Property or
any part thereof.

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise
Section 2.7 Taxes or branch profits Section 2.7 Taxes.

“Contractual Obligation” shall mean as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound, or
any provision of the foregoing.

“Contribution Agreement” shall mean that certain Contribution Agreement, dated
as of the date hereof, among each Individual Borrower and Lender, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of management, policies or activities of a Person,
whether through ownership of voting securities, by contract or otherwise.
“Controlled” and “Controlling” shall have correlative meanings.

“Debt” shall mean the outstanding principal amount set forth in, and evidenced
by, this Agreement and the Note together with all interest accrued and unpaid
thereon and all other sums (including, but not limited to, and/or Breakage
Costs) due to Lender in respect of the Loan under the Note, this Agreement, the
Pledge Agreement or any other Loan Document.

 

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“Debt Service” shall mean, with respect to any particular period of time, the
scheduled principal and interest payments due under this Agreement and the Note.

“Debt Yield” shall mean, as of any date of determination, the percentage
obtained by dividing:

(a) the Net Operating Income (excluding interest on credit accounts and using
annualized operating expenses for any recurring expenses not paid monthly (e.g.,
Taxes and Insurance Premiums)) for such period as set forth in the statements
required hereunder, without deduction for (i) actual management fees incurred in
connection with the operation of the Properties, or (ii) amounts paid to the
Reserve Funds (or, if applicable, any Mezzanine Reserve Funds), less
(A) management fees equal to the greater of (1) assumed management fees of 3% of
Gross Income from Operations and (2) the actual management fees incurred, and
(B) Replacement Reserve Fund contributions equal to an annual amount for all
Properties of $350 per year for each Unit; and

(b) the outstanding principal balance of the Loan and the Mortgage Loan taking
into account any voluntary prepayments made by Borrower following the end of the
applicable calendar quarter but prior to the date on which the quarterly
financial report is submitted pursuant to Section 5.1.11(c).

“Debt Yield Cure” shall mean (a) no Event of Default or Mortgage Loan Default
shall be continuing and (b) the achievement of a Debt Yield of 8.33% for the
two (2) consecutive calendar quarters immediately preceding the date of
determination based upon the trailing three (3) month period immediately
preceding such date of determination annualized.

“Debt Yield Cure Payment” shall have the meaning set forth in Section 2.5.2(e)
hereof.

“Debt Yield Trigger Event” shall mean a Debt Yield of less than 8.33% on any
date of determination for the calendar quarter immediately preceding the date of
such determination, based upon the trailing three (3) month period immediately
preceding such date of determination annualized, as determined in good faith by
Lender.

“Default” shall mean the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would be an Event of Default.

“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to
the lesser of (a) the Maximum Legal Rate or (b) five percent (5%) above the
Interest Rate.

“Determination Date” shall mean, (i) with respect to any Interest Accrual Period
that occurs while the Loan is a LIBOR Rate Loan, the date that is two (2) London
Business Days prior to the first day of such Interest Period, (ii) with respect
to any Interest Period that occurs while the Loan is a Prime Rate Loan or an
Alternate Rate Loan, the date that is two (2) Business Days prior to the first
day of such Interest Period.

 

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“EEA Financial Institution” shall have the meaning set forth in Section 10.25.

“EEA Member Country” shall have the meaning set forth in Section 10.25.

“EEA Resolution Authority” shall have the meaning set forth in Section 10.25.

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (a) 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 or (b) a segregated trust account or accounts (or subaccounts
thereof) maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity that has a Moody’s rating of at
least “Baa2” and which, in the case of a state chartered depository institution
or trust company, is subject to regulations substantially similar to 12 C.F.R.
§9.10(b), having in either case a combined capital and surplus of at least
$50,000,000.00 and subject to supervision or examination by federal and state
authority. An Eligible Account shall not be evidenced by a certificate of
deposit, passbook or other instrument.

“Eligible Institution” shall mean either (a) 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 and “P-1” by Moody’s in the case of accounts in which funds are
held for thirty (30) days or less (or, in the case of Letters of Credit and
accounts in which funds are held for more than thirty (30) days, the long-term
unsecured debt obligations of which are rated at least “A+” by S&P and “Aa3” by
Moody’s), or (b) Wells Fargo Bank, National Association, provided that the
rating by S&P and the other Approved Rating Agencies for the short term
unsecured debt obligations or commercial paper and long term unsecured debt
obligations of the same does not decrease below the ratings in effect as of the
Closing Date.

“Embargoed Person” shall mean any person, entity or government subject to trade
restrictions under U.S. law, including, but not limited to, The USA PATRIOT Act
(including the anti-terrorism provisions thereof), the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701, et seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated
thereunder including those related to Specially Designated Nationals and
Specially Designated Global Terrorists, with the result that the investment in
Borrower, any Loan Party, any Mortgage Loan Party, Mortgage Principal or
Guarantor, as applicable (whether directly or indirectly), is prohibited by law
or the Loan made by the Lender is in violation of law.

“Enforcement Action” shall have the meaning set forth in Section 9.3(c).

“Environmental Indemnity” shall mean that certain Mezzanine Environmental
Indemnity Agreement, dated as of the date hereof, executed by Borrower and
Guarantor in connection with the Loan for the benefit of Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

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“Environmental Law” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
relating to protection of human health or the environment, relating to Hazardous
Substances, relating to liability for or costs of Remediation or prevention of
Releases of Hazardous Substances or relating to liability for or costs of other
actual or threatened danger to human health or the environment. “Environmental
Law” includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like addressing
similar issues: the Comprehensive Environmental Response, Compensation and
Liability Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource Conservation and Recovery
Act (including but not limited to Subtitle I relating to underground storage
tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation Act.
“Environmental Law” also includes, but is not limited to, any present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law: (a) conditioning transfer of property upon a
negative declaration or other approval of a Governmental Authority of the
environmental condition of any Individual Property; (b) requiring notification
or disclosure of Releases of Hazardous Substances or other environmental
condition of any Individual Property to any Governmental Authority or other
Person, whether or not in connection with transfer of title to or interest in
property; (c) imposing conditions or requirements in connection with permits or
other authorization for lawful activity; (d) relating to nuisance, trespass or
other causes of action related to any Individual Property; (e) relating to
wrongful death, personal injury resulting from environmental conditions or
exposure to Hazardous Substances or (f) property or other damage in connection
with any environmental condition or use of Hazardous Substances at any
Individual Property.

“Environmental Liens” shall have the meaning set forth in Section 5.1.19 hereof.

“Environmental Report” shall have the meaning set forth in Section 4.1.37
hereof.

“Equipment” shall mean, with respect to each Individual Property, any equipment
now owned or hereafter acquired by Mortgage Borrower, which is used at or in
connection with the Improvements or such Individual Property or is located
thereon or therein, including (without limitation) all Gaming Equipment, all
machinery, equipment, furnishings, and electronic data-processing and other
office equipment now owned or hereafter acquired by Mortgage Borrower and any
and all additions, substitutions and replacements of any of the foregoing),
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.

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

“ERISA Affiliate” shall mean any Person that for purposes of Title IV of ERISA
is a member of the Mortgage Borrower’s, Borrower’s or Guarantor’s controlled
group, under common control with the Mortgage Borrower’s, Borrower or Guarantor,
within the meaning of Section 414 of the Code.

 

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“ERISA Event” shall mean shall mean (a) the occurrence with respect to a Plan of
a reportable event, within the meaning of Section 4043 of ERISA, unless the
30-day notice requirement with respect thereto has been waived by the Pension
Benefit Guaranty Corporation (or any successor) (“PBGC”); (b) the application
for a minimum funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of the Mortgage Borrower, Borrower, the Guarantor, or
any ERISA Affiliates in the circumstances described in Section 4062(e) of ERISA;
(e) the withdrawal by the Mortgage Borrower, Borrower, the Guarantor, or any
ERISA Affiliates from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions set forth in Section 430(e) of the Internal Revenue Code or
Section 303(k)(1)(A) and (B) of ERISA to the creation of a lien upon property or
assets or rights to property or assets of the Borrower, Mortgage Borrower, the
Guarantor, or any ERISA Affiliates for failure to make a required payment to a
Plan are satisfied; (g) the termination of a Plan by the PBGC pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, a Plan; (h) any failure by any Plan to
satisfy the minimum funding standards, within the meaning of Sections 412 or 430
of the Internal Revenue Code or Section 302 of ERISA, whether or not waived;
(i) the determination that any Plan is or is expected to be in “at-risk” status,
within the meaning of Section 430 of the Internal Revenue Code or Section 303 of
ERISA or (j) the receipt by the Borrower, Mortgage Borrower, the Guarantor, or
any ERISA Affiliate of any notice concerning the imposition of liability with
respect to the withdrawal or partial withdrawal from a Multiemployer Plan or a
determination that a Multiemployer Plan is, or is expected to be “insolvent”
(within the meaning of Section 4245 of ERISA), in “reorganization” (within the
meaning of Section 4241 of ERISA) or in “endangered” or “critical status”
(within the meaning of Section 432 of the Internal Revenue Code or Section 305
of ERISA).

“Essex Property” shall mean that certain Individual Property commonly known as
20 North 12th Street, Lemoyne, Pennsylvania 17043.

“EU Bail-in Legislation Schedule” shall have the meaning set forth in
Section 10.25 hereof.

“Event of Default” shall have the meaning set forth in Section 8.1(a) hereof.

“Excess Cash Flow” shall have the meaning set forth in the Cash Management
Agreement.

“Excluded Taxes” shall mean any of the following Section 2.7 Taxes imposed on or
with respect to Lender or required to be withheld or deducted from a payment to
Lender: (a) Section 2.7 Taxes imposed on or measured by net income (however
denominated), franchise Section 2.7 Taxes, and branch profits Section 2.7 Taxes,
in each case, (i) imposed as a result of

 

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Lender being organized under the laws of, or having its principal office or its
applicable lending office located in, the jurisdiction imposing such Section 2.7
Tax (or any political subdivision thereof) or (ii) that are Other Connection
Taxes, (b) U.S. federal withholding Section 2.7 Taxes imposed on amounts payable
to or for the account of such Lender with respect to an applicable interest in
the 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 2.7, amounts
with respect to such Section 2.7 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) Section 2.7 Taxes
attributable to such Lender’s failure to comply with Section 2.7(e) and (d) any
U.S. federal withholding Section 2.7 Taxes imposed under FATCA.

“Extraordinary Expense” shall have the meaning set forth in Section 5.1.11(e)
hereof.

“FATCA” shall mean 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)(i) of the Code.

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the term of the Loan.

“Fitch” shall mean Fitch, Inc.

“Fixtures” shall mean, with respect to each Individual Property, all Equipment
now owned, or the ownership of which is hereafter acquired, by Mortgage Borrower
which is so related to the Land and the Improvements forming part of the
Individual Property in question that it is deemed fixtures or real property
under applicable Legal Requirements, including, without limitation, all building
or construction materials intended for construction, reconstruction, alteration,
decoration or repair of or installation on the applicable Individual Property,
construction equipment, appliances, machinery, plant equipment, fittings,
apparatuses, fixtures and other items now or hereafter attached to, installed in
or used in connection with (temporarily or permanently) any of the Improvements
or the Land, including, but not limited to, engines, devices for the operation
of pumps, pipes, plumbing, call and sprinkler systems, fire extinguishing
apparatuses and equipment, heating, ventilating, incinerating, electrical, air
conditioning and air cooling equipment and systems, gas and electric machinery,
appurtenances and equipment, pollution control equipment, security systems,
disposals, dishwashers, refrigerators and ranges, recreational equipment and
facilities of all kinds, and water, electrical, storm and sanitary sewer
facilities, utility lines and equipment (whether owned individually or jointly
with others, and, if owned jointly, to the extent of Mortgage Borrower’s
interest therein) and all other utilities whether or not situated in easements,
all water tanks, water supply, water power sites, fuel stations, fuel tanks,
fuel supply, and all other structures, together with all accessions,
appurtenances, additions, replacements, betterments and substitutions or any of
the foregoing and the proceeds thereof.

“Force Majeure” shall mean a delay solely due to acts of God, Governmental
Authority restrictions, stays, judgments, orders, decrees (so long as no such
Governmental Authority restrictions, stays, judgments, orders or decrees are the
result of a violation of

 

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Borrower’s covenants pursuant to this Agreement), enemy actions, terrorist
activities, civil commotion, fire, casualty, strikes, work stoppages, shortages
of labor or materials, in each case which are beyond the reasonable control of
Borrower or Mortgage Borrower. In no event shall Borrower’s or Mortgage
Borrower’s lack of funds constitute a Force Majeure event. Any period of Force
Majeure shall apply only to such Person’s performance of the obligations
necessarily affected by such circumstance and efforts to minimize the effect and
duration thereof, and in no event, shall such period extend for more than sixty
(60) days from the first occurrence of the applicable Force Majeure event
(provided, the occurrence of a subsequent Force Majeure event shall have the
effect of extending each timeframe for any obligation hereunder that is said to
be subject to such Force Majeure, and not solely the first such timeframe
immediately following the occurrence of such subsequent event (so long as such
subsequent period shall not extend beyond sixty (60) days from the occurrence of
such subsequent Force Majeure event); provided that Borrower shall have notified
Lender of any Force Majeure promptly following the occurrence thereof (and in no
event more than five (5) Business Days following the occurrence thereof)).

“Foreign Benefit Arrangement” shall mean any employee benefit arrangement
mandated by non-U.S. law that is maintained or contributed to by the Borrower,
Mortgage Borrower, the Guarantor or any ERISA Affiliate.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Foreign Plan” shall mean each “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) that is not subject to U.S. law and is maintained or
contributed to by the Borrower, Mortgage Borrower the Guarantor or any ERISA
Affiliate.

“Full Replacement Cost” shall have the meaning set forth in Section 6.1(a)(i)
hereof.

“GAAP” shall mean generally accepted accounting principles in the United States
of America as of the date of the applicable financial report, consistently
applied with such changes and modifications as Lender may reasonable approve

“Governmental Authority” shall mean any court, board, agency, commission, office
or other authority of any nature whatsoever for any governmental unit (foreign,
federal, state, county, district, municipal, city or otherwise) whether now or
hereafter in existence having jurisdiction or authority over any Individual
Property, any Borrower, Operating Lessee or Manager.

“Grantor Trust” shall mean a grantor trust as defined in Subpart E, Part I of
Subchapter J of the Code.

“Gross Income from Operations” shall mean, during any period, all income as
reported on the financial statements delivered by Borrower in accordance with
this Agreement, computed in accordance with GAAP, derived from the ownership and
operation of the Properties from whatever source during such period, including,
but not limited to, (i) Rents from Tenants

 

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that are in occupancy, open for business and paying full contractual rent
without right of offset or credit, (ii) utility charges, (iii) escalations,
(iv) forfeited security deposits, (v) interest on credit accounts, (vi) service
fees or charges, (vii) license fees, (viii) parking fees, (ix) rent concessions
or credits, (x) income from vending machines, (xi) business interruption or
other loss of income or rental insurance proceeds, (xii) other required
pass-throughs and (xii) interest on Reserve Accounts, if any, but excluding
(i) Rents from month-to-month Tenants, Tenants during a free-rent period, or
Tenants that are included in any Bankruptcy Action, (ii) sales, use and
occupancy or other taxes on receipts required to be accounted for by Mortgage
Borrower to any Governmental Authority, (iii) refunds and uncollectible
accounts, (iv) sales of furniture, fixtures and equipment, (v) Insurance
Proceeds (other than business interruption or other loss of income or rental
insurance), (vi) Awards, (vii) forfeited or unforfeited security deposits,
(viii) utility and other similar deposits, (ix) any disbursements to Mortgage
Borrower from the Reserve Funds, if any (or, if applicable, to Borrower from any
Mezzanine Reserve Funds), (x) payments made to Borrower pursuant to the Interest
Rate Cap Agreement and/or to Mortgage Borrower pursuant to the Interest Rate Cap
Agreement (as defined in the Mortgage Loan Agreement). Gross income shall not be
diminished as a result of the Mortgages or the creation of any intervening
estate or interest in the Properties or any part thereof and (xi) the MILO rent.

“Ground Lease” shall mean (a) that certain Ground Lease, dated as of August 19,
1998, between Masonic Hill Corporation of Santa Clara, as lessor and Matrix
Properties, Inc., as tenant, as the same may have been or may be assigned,
amended, restated, replaced or otherwise modified from time to time and (b) that
certain Ground Lease, dated as of November 17, 2013 between Rocky Hill Holdings
LLC, as landlord and Rocky Hills Retirement Residence LLC, as tenant, as the
same may have been or may be assigned, amended, restated, replaced or otherwise
modified from time to time.

“Ground Lease Property” shall mean those certain Individual Properties demised
by a Ground Lease.

“Ground Lease Reserve Account” shall have the meaning set forth in the Mortgage
Loan Agreement.

“Ground Lease Reserve Fund” shall have the meaning set forth in the Mortgage
Loan Agreement.

“Ground Lessor” shall mean the lessor under each Ground Lease.

“Ground Rent” shall have the meaning set forth in the Mortgage Loan Agreement.

“Guarantor” shall mean New Senior Investment Group, Inc., a Delaware
corporation.

“Guaranty” shall mean that certain Mezzanine Guaranty Agreement, dated as of the
date hereof, executed and delivered by Guarantor in connection with the Loan to
and for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

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“Guaranty (Payment)” shall mean that certain Mezzanine Guaranty Agreement
(Payment), dated as of the date hereof, executed and delivered by Guarantor in
connection with the Loan to and for the benefit of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Hazardous Substances” shall include but are not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables,
explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally
occurring or otherwise), but excluding substances of kinds and in amounts
ordinarily and customarily used or stored in similar properties for the purpose
of cleaning or other maintenance or operations and otherwise in compliance with
all Environmental Laws.

“Health Care Authorities” shall mean any Governmental Authority or fiscal
intermediary having jurisdiction over the ownership, operation, use or occupancy
of any Individual Property as an independent living facility or other health
care facility.

“Health Care Licenses” shall mean, all certificates of need, certifications,
governmental licenses, permits, regulatory agreements, or other agreements,
including certificates of operation, completion and occupancy, and state
licenses required to operate an independent living facility or similar facility
or other licenses required by Health Care Authorities, if any, for the legal
use, occupancy and operation of each Individual Property which are necessary to
operate each Independent Property as currently used, occupied and operated

“Health Care Requirements” shall mean, with respect to the Property, all
federal, state, county, municipal and other governmental statutes, laws, rules,
orders, regulations, ordinances, standards, policies, judgments, decrees and
injunctions or agreements, in each case regulating the establishment,
construction, ownership, operation, use or occupancy of such Property or any
part thereof in accordance with its Health Care License, if applicable, and all
material permits, licenses and authorizations and regulations relating thereto,
including all material rules, orders, regulations and decrees of and agreements
with Health Care Authorities as pertaining to such Property, whether now
existing or coming into effect after the date hereof.

“Hidden Lake Property” shall mean that certain Individual Property commonly
known as 400 Madrona Avenue Southeast, Salem, Oregon 97302.

“Holiday Manager” shall mean Holiday AL Management Sub LLC and/or its
Affiliates, if the context requires, a Qualified Manager who is managing the
Properties or any Individual Property in accordance with the terms and
provisions of this Agreement pursuant to a Replacement Management Agreement.

“Improvements” shall have the meaning set forth in the granting clause of the
related Mortgage with respect to each Individual Property.

 

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“Indebtedness” of a Person, at a particular date, shall mean the sum (without
duplication) at such date of (a) all indebtedness or liability of such Person
(including, without limitation, amounts for borrowed money and indebtedness in
the form of mezzanine debt or preferred equity); (b) obligations evidenced by
bonds, debentures, notes, or other similar instruments; (c) obligations for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under acceptance
facilities; (f) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds, to invest in any Person
or entity, or otherwise to assure a creditor against loss;(g) obligations under
PACE Loans and (h) obligations secured by any Liens, whether or not the
obligations have been assumed (other than the Permitted Encumbrances).

“Indemnified Liabilities” shall have the meaning set forth in Section 10.13(b)
hereof.

“Indemnified Parties” shall mean Lender and, its designee, (whether or not it is
the Lender), any Person who is or will have been involved in the origination of
the Loan, any Person who is or will have been involved in the servicing of the
Loan secured hereby, any Person in whose name the encumbrance created by the
Pledge Agreement is or will have been recorded or filed, any Person who may hold
or acquire or will have held a full or partial interest in the Loan secured
hereby (including, but not limited to, investors or prospective investors in a
Secondary Market Transaction, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in the Loan secured
hereby for the benefit of third parties) as well as the respective directors,
officers, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, but not limited to, any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan, whether during the term of the Loan or as
a part of or following a foreclosure of the Loan and including, but not limited
to any successors by merger, consolidation or acquisition of all or a
substantial portion of Lender’s assets and business).

“Indemnified Taxes” shall mean (a) Section 2.7 Taxes, other than Excluded Taxes,
imposed on or with respect to any payment made by or on account of any
obligation of the Borrower under any Loan Document and (b) to the extent not
otherwise described in (a), Other Taxes.

“Indemnifying Person” shall mean each of Borrower and Guarantor.

“Independent Director” shall mean an individual who has prior experience as an
independent director, independent manager or independent member with at least
three years of employment experience and who is provided by CT Corporation,
Corporation Service Company, National Registered Agents, Inc., Wilmington Trust
Company, Stewart Management Company, Lord Securities Corporation or, if none of
those companies is then providing professional Independent Directors, another
nationally-recognized company reasonably approved by Lender, in each case that
is not an Affiliate of Borrower and that provides professional Independent
Directors and other corporate services in the ordinary course of its business,
and which individual is duly appointed as an Independent Director and is not,
and has never been, and will not while serving as Independent Director be, any
of the following:

 

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(a) a member, partner, equityholder, manager, director, officer or employee of
Borrower or any of its equityholders or Affiliates (other than serving as an
Independent Director of Borrower or an Affiliate of Borrower that does not own a
direct or indirect interest in Borrower and that is required by a creditor to be
a single purpose bankruptcy remote entity, provided that such Independent
Director is employed by a company that routinely provides professional
Independent Directors or managers in the ordinary course of its business);

(b) a creditor, supplier or service provider (including provider of professional
services) to Borrower or any of its equityholders or Affiliates (other than a
nationally-recognized company that routinely provides professional Independent
Directors and other corporate services to Borrower or any of its Affiliates in
the ordinary course of its business);

(c) a family member of any such member, partner, equityholder, manager,
director, officer, employee, creditor, supplier or service provider; or

(d) a Person that controls (whether directly, indirectly or otherwise) any of
(a), (b) or (c) above.

A natural person who otherwise satisfies the foregoing definition and satisfies
subparagraph (a) by reason of being the Independent Director of a “special
purpose entity” affiliated with Borrower that does not own a direct or indirect
interest in Borrower shall be qualified to serve as an Independent Director of
the Borrower, provided that the fees that such individual earns from serving as
an Independent Director of affiliates of Borrower in any given year constitute
in the aggregate less than five percent (5%) of such individual’s annual income
for that year. For purposes of this paragraph, a “special purpose entity” is an
entity, whose organizational documents contain restrictions on its activities
and impose requirements intended to preserve such entity’s separateness that are
substantially similar to those contained in the definition of Special Purpose
Entity of this Agreement.

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

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

“Individual Property” shall mean each parcel of real property, the Improvements
thereon and all personal property owned by an Individual Mortgage Borrower (or
leased pursuant to a Ground Lease) and encumbered by a Mortgage, together with
all rights pertaining to such property and Improvements, as more particularly
described in the Granting Clauses of each Mortgage and referred to therein as
the “Property”.

“Insolvency Opinion” shall mean that certain non-consolidation opinion letter
dated the date hereof delivered by Locke Lord LLP in connection with the Loan.

 

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“Insurance Premiums” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Insurance Proceeds” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Interest Period” shall mean, in connection with the calculation of interest
accrued with respect to any specified Payment Date, including the Maturity Date,
the period commencing on and including the fifteenth (15th) day of the prior
calendar month and ending on and including the fourteenth (14th) day of the
calendar month in which such Payment Date occurs; provided, however, the initial
Interest Period shall be the period commencing on the Closing Date, and ending
on and including May 14, 2018.

“Interest Rate” shall mean the rate at which the outstanding principal amount of
the Loan bears interest from time to time in accordance with Section 2.2.3
hereof.

“Interest Rate Cap Agreement” shall mean, collectively, one or more interest
rate protection agreements (together with the confirmation and schedules
relating thereto) acceptable to Lender, between an Acceptable Counterparty and
Borrower (or an IR Cap Borrower on behalf of and for the benefit of Borrower)
obtained by Borrower as and when required pursuant to Section 2.2.7 hereof.
After delivery of a Replacement Interest Rate Cap Agreement or Substitute
Interest Rate Cap Agreement to Lender, the term “Interest Rate Cap Agreement”
shall be deemed to mean such Replacement Interest Rate Cap Agreement or
Substitute Interest Rate Cap Agreement, as applicable, and such Replacement
Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement, as
applicable, shall be subject to all requirements applicable to the Interest Rate
Cap Agreement.

“Interests” shall have the meaning set forth in the definition of Special
Purpose Entity.

“IR Cap Borrower” shall have the meaning set forth in Section 2.2.7(a) hereof.

“Lease” shall mean any lease (other than any Ground Lease and the Operating
Lease), sublease or subsublease, letting, license, concession or other agreement
(whether written or oral and whether now or hereafter in effect) pursuant to
which any Person is granted a possessory interest in, or right to use or occupy
all or any portion of any space in the any Individual Property by or on behalf
of an Individual Borrower, including, any Commercial Lease and (a) every
modification, amendment or other agreement relating to such lease, sublease,
subsublease, or other agreement entered into in connection with such lease,
sublease, subsublease, or other agreement and (b) every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

“Leasehold Pledgor” shall have the meaning set forth in the recitals hereto.

“Leasehold Pledgor Company Agreements” shall mean those certain operating
agreements set forth in Schedule VII.

 

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“Leasehold Pledgor Pledged Interests” shall have the meaning set forth in the
recitals hereto.

“Legal Requirements” shall mean, with respect to each Individual Property or the
Collateral, all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities affecting such Individual Property, the
Collateral or any part thereof, or the construction, use, alteration or
operation thereof, or any part thereof (including Health Care Requirements),
whether now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto (including, without limitation,
all licenses), and all covenants, agreements, restrictions and encumbrances
contained in any instruments, either of record or known to Borrower or Mortgage
Borrower at any time in force affecting Borrower, Mortgage Borrower, the
Collateral, such Individual Property or any part thereof, including, without
limitation, any which may (a) require repairs, modifications or alterations in
or to such Individual Property, the Collateral or any part thereof, or (b) in
any way limit the use and enjoyment thereof.

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

“LIBOR Rate Index” shall mean, with respect to each Interest Period, the rate
(expressed as a percentage per annum and rounded up to the next nearest 1/1000
of 1%) for deposits in U.S. dollars, for a one-month period, that appears on
“Thomson Reuters ICE LIBOR# Rates – LIBOR01” (or the successor thereto) as of
11:00 a.m., London time, on the related Determination Date. If such rate does
not appear on Thomson Reuters ICE LIBOR# Rates – LIBOR01 as of 11:00 a.m.,
London time, on such Determination Date, LIBOR shall be the arithmetic mean of
the offered rates (expressed as a percentage per annum) for deposits in U.S.
dollars for a one-month period that appear on the Thomson Reuters ICE LIBOR#
Rates – LIBOR01 as of 11:00 a.m., London time, on such Determination Date, if at
least two such offered rates so appear. If fewer than two such offered rates
appear on the Thomson Reuters ICE LIBOR# Rates – LIBOR01 as of 11:00 a.m.,
London time, on such Determination Date, Lender (or Servicer, on Lender’s
behalf) shall request the principal London office of any four major reference
banks in the London interbank market selected by Lender to provide such bank’s
offered quotation (expressed as a percentage per annum) 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 Determination Date for the amounts of not
less than U.S. $1,000,000. 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 (or Servicer, on Lender’s behalf)
shall request any three major banks in New York City selected by Lender to
provide such bank’s rate (expressed as a percentage per annum) for loans in U.S.
dollars to leading European banks for a one-month period as of approximately
11:00 a.m., New York City time on the applicable Determination Date for amounts
of not less than U.S. $1,000,000. If at least two such rates are so provided,
LIBOR shall be the arithmetic mean of such rates. The LIBOR Rate Index shall be
determined conclusively by Lender or its agent. Notwithstanding the foregoing,
in no event shall the LIBOR Rate Index be less than the LIBOR Rate Floor.

“LIBOR Rate Floor” shall mean 0.50% per annum.

 

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“LIBOR Rate” shall mean a fluctuating rate per annum equal to the LIBOR Rate
Index plus the Spread; provided, however, in no event shall the LIBOR Rate Index
be deemed to be less than the LIBOR Rate Floor.

“LIBOR Rate Loan” shall mean the Loan at such time as interest thereon accrues
at a rate of interest based upon the LIBOR Rate.

“Lien” shall mean, with respect to each Individual Property or any Collateral,
as the case may be, any mortgage, deed of trust, deed to secure debt, indemnity
deed of trust, lien, pledge, hypothecation, assignment, security interest, PACE
Loan or any other encumbrance, charge or transfer of, on or affecting any
Individual Mortgage Borrower, Borrower, the Collateral, any Individual Property,
any portion thereof or any interest therein, including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement, and mechanic’s, materialmen’s and other similar liens
and encumbrances.

“Liquidation Event” shall have the meaning set forth in Section 2.4.2(a) hereof.

“Loan” shall mean the loan made by Lender to Borrower pursuant to this
Agreement.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgages, the Environmental Indemnity, the Subordination of Management
Agreement, the Guaranty, the Guaranty (Payment), the Cash Management Agreement,
the Interest Rate Cap Agreement, the Assignment of Interest Rate Cap Agreement,
the Contribution Agreement, the Assignment of Title Proceeds and all other
documents executed and/or delivered in connection with the Loan.

“Loan Party” shall mean, individually or collectively, as the context requires,
Borrower, Corporate Pledgor and Leasehold Pledgor.

“Lockbox Account” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Lockbox Agreement” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Lockbox Bank” shall have the meaning set forth in the Mortgage Loan Agreement.

“London Business Day” shall mean any day other than a Saturday, Sunday or any
other day on which commercial banks in London, England are not open for
business.

“Major Contract” shall mean, with respect to an Individual Property, (i) any
management, brokerage or leasing agreement, or (ii) any maintenance, service or
other contract or agreement of any kind of a material nature (materiality for
these purposes mean contracts with required annual payments in excess of One
Hundred Thousand and No/100 Dollars ($100,000.00) and which are not cancelable
on thirty (30) days’ or less notice without requiring

 

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the payment of termination fees or payments of any kind)), in either case
entered into by or on behalf of any Individual Mortgage Borrower, Operating
Lessee, Individual Borrower or Leasehold Pledgor and relating to the ownership,
leasing, management, use, operation, maintenance, repair or restoration of any
Individual Property.

“Management Agreement” shall mean the Management Agreement (Holiday) and
Management Agreement (OpCo Manager).

“Management Agreement (Holiday)” shall mean, with respect to each Individual
Property, the Sub-Management Agreement, dated as of the date hereof, entered
into by and between OpCo Manager and Holiday Manager, pursuant to which Holiday
Manager is to provide management and other services with respect to such
Individual Property, or, if the context requires, a Qualified Manager who is
managing the such Individual Property in accordance with the terms and
provisions of this Agreement pursuant to a Replacement Management Agreement, in
each case as the same may be amended, restated, replaced or otherwise modified
from time to time in accordance with the terms hereof.

“Management Agreement (OpCo Manager)” shall mean, with respect to each
Individual Property, the Master Management Agreement, dated as of the date
hereof entered into by and between OpCo Manager and Operating Lessee, pursuant
to which OpCo Manager is to provide management and other services with respect
to such Individual Property, or, if the context requires, a Qualified Manager
who is managing the such Individual Property in accordance with the terms and
provisions of this Agreement pursuant to a Replacement Management Agreement, in
each case as the same may be amended, restated, replaced or otherwise modified
from time to time in accordance with the terms hereof.

“Manager” shall mean, individually or collectively as the context may require,
Holiday Manager and OpCo Manager.

“Material Action” means with respect to any Special Purpose Entity, to file any
insolvency, or reorganization case or proceeding, to institute proceedings to
have such Special Purpose Entity be adjudicated bankrupt or insolvent, to
institute proceedings under any applicable insolvency law, to seek any relief
under any law relating to relief from debts or the protection of debtors, to
consent to the filing or institution of bankruptcy or insolvency proceedings
against such Special Purpose Entity, to file a petition seeking, or consent to,
reorganization or relief with respect to such Special Purpose Entity under any
applicable federal or state law relating to bankruptcy or insolvency, to seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian, or any similar official of or for such Special Purpose
Entity or a substantial part of its property, to make any assignment for the
benefit of creditors of such Special Purpose Entity, or to take action in
furtherance of any of the foregoing.

“Material Adverse Effect” shall mean, in Lender’s reasonable judgment, any event
or condition that has a material adverse effect on (a) the use, operation, or
value of any Individual Property or the Collateral, (b) the business, profits,
operations or financial condition of Mortgage Borrower, Mortgage Principal,
Operating Lessee, Borrower, Leasehold Pledgor, or Guarantor (c) the ability of
Borrower to repay the principal and interest of the Loan as it

 

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becomes due or to satisfy any of Mortgage Borrower’s, Mortgage Principal’s,
Operating Lessee’s, Borrower’s, Leasehold Pledgor’s, or Guarantor’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” shall mean May 9, 2019 or such earlier date on which the final
payment of the Note becomes due and payable as therein or herein provided
whether at such stated maturity date, by declaration of acceleration, or
otherwise.

“Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or the other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

“Mezzanine Deposit Account” shall have the meaning set forth in the Cash
Management Agreement.

“Mezzanine Reserve Funds” shall mean each of the reserve funds, if any,
established pursuant to Article VII hereof.

“Monthly Debt Service Payment Amount” shall mean, on each Payment Date, the
amount of interest which accrues on the Loan for the related Interest Period.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Morningstar” shall mean Morningstar Credit Ratings, LLC, or any of its
successors in interest, assigns, and/or changed entity name or designation
resulting from any acquisition by Morningstar, Inc. or other similar entity of
Morningstar Credit Ratings, LLC.

“Mortgage” shall have the meaning set forth in the recitals to this Agreement.

“Mortgage Assignment of Management Agreement” shall mean the “Assignment of
Management Agreement” as defined in the Mortgage Loan Agreement.

“Mortgage Borrower” shall have the meaning set forth in the recitals to this
Agreement.

“Mortgage Borrower Company Agreements” shall mean, collectively, the limited
liability company agreements set forth on Schedule VIII attached hereto.

“Mortgage Debt Service” shall mean, with respect to any particular period of
time, the scheduled interest payments then due under the Mortgage Loan Agreement
and the Mortgage Note.

“Mortgage Environmental Indemnity” shall mean the “Environmental Indemnity” as
defined in the Mortgage Loan Agreement.

 

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“Mortgage Lender” shall have the meaning set forth in the recitals to this
Agreement, together with its successors and assigns.

“Mortgage Loan” shall have the meaning set forth in the recitals to this
Agreement.

“Mortgage Loan Adjusted Release Amount” shall mean the “Adjusted Release Amount”
under and as defined in the Mortgage Loan Agreement.

“Mortgage Loan Agreement” shall have the meaning set forth in the recitals to
this Agreement.

“Mortgage Loan Contribution Agreement” shall mean the “Contribution Agreement”
as defined in the Mortgage Loan Agreement.

“Mortgage Loan Debt” shall mean the “Debt”, as defined in the Mortgage Loan
Agreement.

“Mortgage Loan Documents” shall mean, collectively, the Mortgage Note, the
Mortgage Loan Agreement, the Mortgage, the Cash Management Agreement, the
Mortgage Loan Contribution Agreement, the Mortgage Loan Guaranty, Mortgage
Assignment of Management Agreement, the Lockbox Agreement and any and all other
documents defined as “Loan Documents” in the Mortgage Loan Agreement, as
amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Mortgage Loan Event of Default” shall mean an “Event of Default” under and as
defined in the Mortgage Loan Agreement.

“Mortgage Loan Guaranty” shall mean the “Guaranty” as defined in the Mortgage
Loan Agreement.

“Mortgage Loan Party” shall mean the “Loan Party” as defined in the Mortgage
Loan Agreement.

“Mortgage Note” shall have the meaning set forth in the Recitals to this
Agreement.

“Mortgage Principal” shall mean the Special Purpose Entity that is the general
partner of an Individual Mortgage Borrower, if such Individual Mortgage Borrower
is a limited partnership, or managing member of an Individual Mortgage Borrower,
if such Individual Mortgage Borrower is a limited liability company other than a
single-member Delaware limited liability company.

“Multiemployer Plan” shall mean a multiemployer plan, as defined in
Section 3(37) or Section 4001(a)(3) of ERISA, as applicable, in respect of which
the Mortgage Borrower, Mortgage Loan Party, Borrower, any Loan Party Guarantor
or any ERISA Affiliate could have any obligation or liability, contingent or
otherwise.

 

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“Multiple Employer Plan” shall mean a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Mortgage Borrower, Mortgage Loan Party, Borrower, and Loan Party, Guarantor or
any ERISA Affiliate and at least one Person other than the Mortgage Borrower,
Mortgage Loan Party, Borrower, any Loan Party, Guarantor and the ERISA
Affiliates, or (b) was so maintained, and in respect of which the Mortgage
Borrower, Mortgage Loan Party, Borrower, Guarantor or any ERISA Affiliate could
have liability under Sections 4062-4069 of ERISA in the event such plan has been
or were to be terminated.

“Net Liquidation Proceeds After Debt Service” shall mean, with respect to any
Liquidation Event, all amounts actually paid to or received by or on behalf of
Mortgage Borrower, Leasehold Pledgor, Operating Lessee or Borrower in connection
with such Liquidation Event (and not paid to Mortgage Lender in accordance with
the Mortgage Loan Documents), less (a) all costs incurred by Lender and Mortgage
Lender in connection with the collection, recovery and/or settlement thereof,
(b) the reasonable costs incurred by Mortgage Borrower and Operating Lessee, as
the case may be, in connection with the repair of any unsafe condition and the
restoration of all or any portion of the Properties made in accordance with the
Mortgage Loan Documents, (c) amounts required or permitted to be deducted
therefrom and amounts paid to Mortgage Lender pursuant to the Mortgage Loan
Documents, (d) in the case of a foreclosure sale, disposition or Transfer of any
Individual Property in connection with realization thereon pursuant to the
Mortgage Loan Documents following and during the continuance of a Mortgage Loan
Event of Default, such reasonable and customary costs and expenses of sale or
other disposition (including reasonable attorneys’ fees and brokerage
commissions), and (e) in the case of a foreclosure sale, such costs and expenses
incurred by Mortgage Lender and/or any servicer under the Mortgage Loan
Documents as Mortgage Lender shall be entitled to receive reimbursement for
under the terms of the Mortgage Loan Documents.

“Net Operating Income” shall mean the amount obtained by subtracting Operating
Expenses from Gross Income from Operations.

“Note” shall mean that certain Mezzanine Promissory Note, dated the date hereof,
in the principal amount of $95,000,000.00, made by Borrower in favor of Lender,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

“Obligations” shall mean Borrower’s obligation to pay the Debt and perform its
obligations under the Note, this Agreement and the other Loan Documents.

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by an authorized officer of Borrower or the general partner,
managing member or sole member of Borrower, as applicable.

“OpCo Manager” means each of the entities listed on Schedule I-B hereto.

“Operating Expenses” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Operating Lease” shall mean that certain Master Lease and Security Agreement,
dated as of the date hereof, by and among the Individual Mortgage Borrowers
party thereto as landlord and the Operating Lessee, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

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“Operating Lessee” shall mean Needle Interco Tenant LLC, a Delaware limited
liability company.

“Operating Rent” shall mean all rent and other amounts due to Mortgage Borrower
under the Operating Lease.

“Other Charges” shall have the meaning set forth in the Mortgage Loan Agreement.

“Other Connection Taxes” shall mean Section 2.7 Taxes imposed as a result of a
present or former connection between Lender and the jurisdiction imposing such
Section 2.7 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 the Loan or any Loan Document).

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Section 2.7 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 Section 2.7 Taxes
that are Other Connection Taxes imposed with respect to an assignment.

“PACE Loan” shall mean (x) any “Property-Assessed Clean Energy loan” or (y) any
other indebtedness, without regard to the name given to such indebtedness, which
is (i) incurred for improvements to any Individual Property for the purpose of
increasing energy efficiency, increasing use of renewable energy sources,
resource conservation, or a combination of the foregoing, and (ii) repaid
through multi-year assessments against such Individual Property.

“Parent REIT” shall mean a Person that owns a direct or indirect equity interest
in Borrower that qualifies or intends to qualify as a real estate investment
trust pursuant to Sections 856 through 860 of the Code.

“Participant Register” shall have the meaning set forth in Section 9.1.1(f)
hereof.

“Payment Date” shall mean the ninth (9th) day of each calendar month during the
term of the Loan, or if such date is not a Business Day, the immediately
preceding Business Day.

“PBGC” shall have the meaning assigned to that term in the definition of ERISA
Event.

 

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“Permitted Encumbrances” shall have the meaning given to such term in the
Mortgage Loan Agreement and shall include the Liens and security interests
created by the Loan Documents.

“Permitted Investments” shall mean any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, including
those issued by Servicer, or any of its Affiliates, payable on demand or having
a maturity date not later than the Business Day immediately prior to the first
Payment Date following the date of acquiring such investment and meeting one of
the appropriate standards set forth below:

(i) direct obligations of, and obligations fully guaranteed as to timely payment
of principal and interest by, the United States of America, Fannie Mae, Freddie
Mac or any agency or instrumentality of the United States of America, the
obligations of which are backed by the full faith and credit of the United
States of America that mature in one (1) year or less from the date of
acquisition; provided that any obligation of, or guarantee by, any agency or
instrumentality of the United States of America shall be a Permitted Investment
only if such investment would not result in the downgrading, withdrawal or
qualification of the then-current rating assigned by each Approved Rating Agency
to any securities as evidenced in writing, other than (a) unsecured senior debt
obligations of the U.S. Treasury (direct or fully funded obligations), U.S.
Department of Housing and Urban Development public housing agency bonds, Federal
Housing Administration debentures, Government National Mortgage Association
guaranteed mortgage-backed securities or participation certificates, RefCorp
debt obligations and SBA-guaranteed participation certificates and guaranteed
pool certificates and (b) Farm Credit System consolidated systemwide bonds and
notes, Federal Home Loan Banks’ consolidated debt obligations, Freddie Mac debt
obligations, and Fannie Mae debt obligations (1) rated at least “A-1” by S&P, if
such obligations mature in sixty (60) days or less, or rated at least “AA-”,
“A-1+” or “AAAm” by S&P, if such obligations mature in 365 days or less and
(2)(A) if it has a term of thirty (30) days or less, the short-term obligations
of which are rated in the highest short-term rating category by Moody’s or the
long-term obligations of which are rated at least “A2” by Moody’s, (B) if it has
a term of three (3) months or less, but more than thirty (30) days, the
short-term obligations of which are rated in the highest short-term rating
category by Moody’s and the long-term obligations of which are rated at least
“A1” by Moody’s, (C) if it has a term of six (6) months or less, but more than
three (3) months, the short-term obligations of which are rated in the highest
short-term rating category by Moody’s and the long-term obligations of which are
rated at least “Aa3” by Moody’s, and (D) if it has a term of more than six
(6) months, the short-term obligations of which are rated in the highest
short-term rating category by Moody’s and the long-term obligations of which are
rated “Aaa” by Moody’s;

(ii) federal funds, unsecured certificates of deposit, time deposits, banker’s
acceptances, and repurchase agreements having maturities of not more than 90
days of any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia, the short-term debt
obligations of which are rated (a) “A-1+” (or the equivalent) by S&P and, if it
has a term in excess of three months, the long-term debt obligations of which
are rated “AAA” (or the equivalent) by

 

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S&P, and that (1) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator) and (2) has Tier 1 capital
(as defined in such regulations) of not less than $1,000,000,000, (b) in one of
the following Moody’s rating categories: (1) for maturities less than one month,
a long-term rating of “A2” or a short-term rating of “P-1”, (2) for maturities
between one and three months, a long-term rating of “A1” and a short-term rating
of “P-1”, (3) for maturities between three months to six months, a long-term
rating of “Aa3” and a short-term rating of “P-1” and (4) for maturities over six
months, a long-term rating of “Aaa” and a short-term rating of “P-1”, or such
other ratings acceptable to Lender and (c) in one of the following DBRS rating
categories: (1) for maturities less than three months, a short term rating by
DBRS of R-1 (high) and (2) for maturities greater than three months, a long-term
rating by DBRS of AAA;

(iii) deposits that are fully insured by the Federal Deposit Insurance Corp.
(“FDIC”);

(iv) commercial paper rated (a) “A–1+” (or the equivalent) by S&P and having a
maturity of not more than 90 days, (b) in one of the following Moody’s rating
categories: (i) for maturities less than one month, a long-term rating of “A2”
or a short-term rating of “P-1”, (ii) for maturities between one and three
months, a long-term rating of “A1” and a short-term rating of “P-1”, (iii) for
maturities between three months to six months, a long-term rating of “Aa3” and a
short-term rating of “P-1” and (iv) for maturities over six months, a long-term
rating of “Aaa” and a short-term rating of “P-1” and (c) in one of the following
DBRS rating categories: (i) for maturities less than six months, a short-term
rating by DBRS of R-1(high) and for maturities greater than six months, a
long-term rating by DBRS of AAA;

(v) any money market funds that (a) has substantially all of its assets invested
continuously in the types of investments referred to in clause (i) above,
(b) has net assets of not less than $5,000,000,000, and (c) has the highest
rating obtainable from S&P and Moody’s; and

(vi) such other investments acceptable to Lender.

Notwithstanding the foregoing, “Permitted Investments” (i) shall exclude any
security with the S&P’s “r” symbol (or any other Approved Rating Agency’s
corresponding symbol) attached to the rating (indicating high volatility or
dramatic fluctuations in their expected returns because of market risk), as well
as any mortgage-backed securities and any security of the type commonly known as
“strips”; (ii) shall be limited to those instruments that have a predetermined
fixed dollar of principal due at maturity that cannot vary or change;
(iii) shall only include instruments that qualify as “cash flow investments”
(within the meaning of Section 860G(a)(6) of the Code); and (iv) shall exclude
any investment where the right to receive principal and interest derived from
the underlying investment provides a yield to maturity in excess of 120% of the
yield to maturity at par of such underlying investment. Interest may either be
fixed or variable, and any variable interest must be tied to a single interest
rate index plus a single fixed spread (if any), and move proportionately with
that index. No investment shall be made which requires a payment above par for
an obligation if the obligation may be prepaid at the option of the issuer
thereof

 

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prior to its maturity. All investments shall mature or be redeemable upon the
option of the holder thereof on or prior to the earlier of (x) three months from
the date of their purchase and (y) the Business Day preceding the day before the
date such amounts are required to be applied hereunder.

“Permitted Transfer” shall mean any of the following: (a) any transfer, directly
as a result of the death of a natural person, of stock, membership interests,
partnership interests or other ownership interests previously held by the
decedent in question to the Person or Persons lawfully entitled thereto, (b) any
transfer, directly as a result of the legal incapacity of a natural person, of
stock, membership interests, partnership interests or other ownership interests
previously held by such natural person to the Person or Persons lawfully
entitled thereto, (c) so long as Guarantor is a Public Vehicle (i) any Transfer
in the public securities markets of any interest in Guarantor, or (ii) the
issuance by Guarantor of additional stock (except in connection with a merger or
acquisition or corporate reorganization) (including by creation of a new class
or series of stock) and the subsequent Transfer of such stock on any nationally
or internationally recognized stock exchange, and (d) Transfers or disposal of
Equipment that is either being replaced or which is no longer necessary in
connection with the operation of the Properties, provided that such Transfer or
disposal is in the ordinary course and would not reasonably be expected to and
does not have a Material Adverse Effect and provided, further, that any new
Equipment acquired by or on behalf of Mortgage Borrower (and not so disposed of)
shall be subject to the Lien of the Mortgage, it being agreed that Borrower
shall cause Mortgage Borrower to execute and deliver, or cause to be executed
and delivered to Mortgage Lender such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary or desirable,
to evidence, preserve and/or protect Mortgage Lender’s security interest in any
such new building Equipment, as Lender may reasonably require.

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

“Personal Property” shall have the meaning set forth in the granting clause of
the Mortgage with respect to each Individual Property.

“Plan” shall mean a Single Employer Plan, a Multiple Employer Plan or a
Multiemployer Plan.

“Plan Asset Regulations” shall have the meaning set forth in Section 5.2.9(b)(i)
hereof.

“Pledge Agreement” shall mean that certain Mezzanine Pledge and Security
Agreement, dated as of the date hereof, by and among Borrower, Corporate
Pledgor, Leasehold Pledgor and Lender.

“Pledged Company Interests” shall have the meaning set forth the recitals to
this Agreement.

“Pledgor” shall have the meaning set forth the recitals to this Agreement.

 

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“Policies” shall have the meaning set forth in the Mortgage Loan Agreement.

“Policy” shall have the meaning set forth in the Mortgage Loan Agreement.

“Prime Rate” shall mean a fluctuating rate per annum equal to the Prime Rate
Index plus the Prime Rate Spread; provided, however, in no event shall the LIBOR
Rate Index be deemed to be less than the Prime Rate Floor.

“Prime Rate Index” shall mean the annual rate of interest publicly announced by
JPMorgan Chase Bank, National Association, in New York, New York, as its base
rate, as such rate shall change from time to time. If JPMorgan Chase Bank,
National Association, ceases to announce a base rate, Prime Rate Index shall
mean the rate of interest published in The Wall Street Journal from time to time
as the “Prime Rate.” If The Wall Street Journal ceases to publish the “Prime
Rate,” the Lender shall 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 shall select a comparable interest rate index. Notwithstanding the
foregoing, in no event shall Prime Rate Index be less than the Prime Rate Floor.

“Prime Rate Floor” shall mean 0.50%.

“Prime Rate Loan” shall mean the Loan at such time as interest thereon accrues
at a rate of interest based upon the Prime Rate.

“Prime Rate Spread” shall mean, in connection with the conversion of the Loan
from a LIBOR Rate Loan to a Prime Rate Loan, the difference (expressed as the
number of basis points) of (a) the LIBOR Rate Index plus the Spread as of the
Determination Date for which the LIBOR Rate Index was last applicable to the
Loan minus (b) the Prime Rate as of such Determination Date; provided, however,
that if such difference is a negative number, the Prime Rate Spread shall be
zero ; provided, further, however, that (a) if the Loan is a Prime Rate Loan
immediately prior to the commencement of the Interest Period with respect to the
seventh (7th) Payment Date (i) the Prime Rate Spread will be increased by 50
basis points for the Interest Period applicable to the seventh (7th) Payment
Date and any Payment Date following such Payment Date, and (ii) if the Loan is
an Prime Rate Loan immediately prior to the commencement of the Interest Period
with respect to the tenth (10th) Payment Date the Prime Rate Spread will be
increased by an additional 50 basis points for the Interest Period applicable to
tenth (10th) Payment Date and any Payment Date following such Payment Date.

“Principal” shall mean the Special Purpose Entity that is the general partner of
an Individual Borrower or other Loan Party, if such Individual Borrower or other
Loan Party is a limited partnership, or the managing member of an Individual
Borrower or other Loan Party, if such Individual Borrower or other Loan Party is
a limited liability company other than a single-member Delaware limited
liability company.

“Properties” shall have the meaning set forth in the recitals to this Agreement.

“Property Uncross” shall have the meaning set forth in Section 9.1.3 hereof.

 

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“Provided Information” shall mean any and all financial and other information
provided at any time prepared by, or on behalf of, Mortgage Borrower, Operating
Lessee, Borrower, Leasehold Pledgor, Guarantor and/or Manager.

“Public Vehicle” shall mean a Person whose securities are listed and traded on
the New York Stock Exchange, the NYSE American, NASDAQ or any other nationally
recognized 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.

“Qualified Manager” shall mean either (a) Holiday Manager; (b) OpCo Manager; or
(c) in the reasonable judgment of Lender, a reputable and experienced management
organization (which may be an Affiliate of Borrower) possessing experience in
managing properties similar in size, scope, use and value as the Properties,
provided, that, if required by Lender, Borrower shall have obtained, if such
entity is an Affiliate of Borrower, an Additional Insolvency Opinion in form
acceptable to Lender.

“Radon Remediation Work” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Rate Conversion” shall have the meaning set forth in Section 2.2.7(g) hereof.

“Rating Agencies” shall mean each of S&P, Moody’s, Fitch and Morningstar.

“Register” shall have the meaning set forth in Section 9.1.1(f) hereof.

“Release” of any Hazardous Substance includes but is not limited to any release,
deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Substances.

“Release Amount” shall mean for an Individual Property the amount set forth on
Schedule V hereto.

“Release Debt Yield” shall have the meaning set forth Section 2.5.2(e).

“Remediation” includes but is not limited to any response, remedial, removal, or
corrective action, any activity to cleanup, detoxify, decontaminate, contain or
otherwise remediate any Hazardous Substance, any actions to prevent, cure or
mitigate any Release of any Hazardous Substance, any action to comply with any
Environmental Laws or with any permits issued pursuant thereto, any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous
Substances.

“Rents” shall have the meaning set forth in the Mortgage Loan Agreement.

“Replacement Cash Management Account” shall have the meaning set forth in
Section 2.6.5 hereof.

 

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“Replacement Cash Management Agreement” shall have the meaning set forth in
Section 2.6.5 hereof.

“Replacement Interest Rate Cap Agreement” shall mean, collectively, one or more
interest rate protection agreements, acceptable to Lender, from an Acceptable
Counterparty with terms substantially similar to the Interest Rate Cap Agreement
except that the same shall be effective as of the date required in
Section 2.2.7(c).

“Replacement Management Agreement” shall mean, collectively, (a) either (i) a
management agreement with a Qualified Manager substantially in the same form and
substance as the Management Agreement, or (ii) a management agreement with a
Qualified Manager, which management agreement shall be reasonably acceptable to
Lender in form and substance and (b) a subordination of management agreement and
subordination of management fees substantially in the form then used by Lender
(or of such other form and substance reasonably acceptable to Lender), executed
and delivered to Lender by the applicable Loan Party and such Qualified Manager
at Borrower’s expense.

“Replacement Reserve Account” shall have the meaning set forth in the Mortgage
Loan Agreement.

“Replacement Reserve Fund” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Replacements” shall have the meaning set forth in the Mortgage Loan Agreement.

“Required Repair Account” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Required Repair Fund” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Required Repairs” shall have the meaning set forth in the Mortgage Loan
Agreement.

“Reserve Funds” shall have the meaning set forth in the Mortgage Loan Agreement.

“Residency Agreement” shall mean, each residential living agreement, entered
into by or on behalf of Mortgage Borrower or Operating Lessee, with a resident
for residency and services at an Individual Property.

“Restoration” shall mean the repair and restoration of an Individual Property
after a Casualty or Condemnation as nearly as possible to the condition the
Individual Property was in immediately prior to such Casualty or Condemnation,
with such alterations as may be reasonably approved by Lender.

 

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“Restoration Threshold” shall have the meaning set forth in Section 6.4(a)
hereof.

“Restricted Party” shall mean collectively, (a) Mortgage Borrower, Mortgage
Principal, Borrower, Leasehold Pledgor, Pledgor, any other Loan Party or
Mortgage Loan Party, and any Affiliated Manager and (b) any Guarantor, any
shareholder, partner, member, non-member manager, any direct or indirect legal
or beneficial owner of, Borrower, any Guarantor, Mortgage Borrower, any
Affiliated Manager or any non-member manager but, with respect to clause (b),
excluding any shareholders or owners of stock or equity interest in a Public
Vehicle.

“S&P” shall mean Standard & Poor’s Ratings Services.

“Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance,
assignment, transfer, encumbrance, pledge, grant of option or other transfer or
disposal of a legal or beneficial interest, whether direct or indirect.

“Satisfactory Search Results” shall mean the results of credit history check,
litigation, lien, bankruptcy, judgment and other similar searches with respect
to the applicable transferee and its applicable affiliates, in each case,
(i) revealing no matters which would have a material adverse effect on
Borrower’s, Mortgage Borrower’s or any other Loan Party’s or Mortgage Loan
Party’s financial condition, the value of the applicable Individual Property or
such Individual Property’s Net Operating Income; (ii) demonstrating that any
transferee is not an Embargoed Person and (iii) yielding results which are
otherwise acceptable to Lender in its reasonable discretion.

“Secondary Market Transaction” shall have the meaning set forth in
Section 9.1.1.

“Section 2.7 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.

“Servicer” shall have the meaning set forth in Section 9.5 hereof.

“Servicing Agreement” shall have the meaning set forth in Section 9.5 hereof.

“Severed Loan Documents” shall have the meaning set forth in Section 8.2(c)
hereof.

“Similar Law” shall have the meaning set forth in Section 4.1.9(b) hereof.

“Single Employer Plan” shall mean a single employer plan, as defined in
Section 3(41) or Section 4001(a)(15) of ERISA, as applicable, that (a) is
maintained for employees of the Borrower, Mortgage Borrower, Guarantor, any Loan
Party, any Mortgage Loan Party or any ERISA Affiliate and no Person other than
the Borrower, Mortgage Borrower, Guarantor, any Loan Party, any Mortgage Loan
Party and the ERISA Affiliates, or (b) was so maintained, and in respect of
which the Borrower, Mortgage Borrower, Guarantor, any Loan Party, any Mortgage
Loan Party or any ERISA Affiliate could have liability under Sections 4062-4069
of ERISA in the event such plan has been or were to be terminated.

 

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“Special Purpose Entity” shall mean a limited partnership or limited liability
company that, at all times on and after the date hereof, has complied with and
shall at all times comply with the following requirements unless it has received
prior consent to do otherwise from Lender or a permitted administrative agent
thereof, in each case:

(i) is and shall be organized solely for the purpose of acquiring, owning,
holding, selling, transferring and exchanging its equity interests in its
respective Subsidiaries (the “Interests”), entering into and performing its
obligations under the Loan Documents with Lender, refinancing the Interests in
connection with a permitted repayment of the Loan, and transacting lawful
business that is incident, necessary and appropriate to accomplish the
foregoing;

(ii) shall not engage in any business unrelated to the acquisition and ownership
of the Interests, and transacting lawful business that is incident, necessary
and appropriate to accomplish the foregoing;

(iii) shall not own any real property;

(iv) does not have and shall not have and at no time had any assets other than
the Interests and personal property necessary or incidental to its ownership of
such Interests, and cash and other assets or revenues received from the
activities set forth in (i) above;

(v) to the fullest extent permitted by law, shall not engage in, seek, consent
to or permit (A) any dissolution, winding up, liquidation, consolidation or
merger, or (B) any sale or other transfer of all or substantially all of its
assets or any sale of assets outside the ordinary course of its business, except
as permitted by the Loan Documents;

(vi) shall not cause, consent to or permit any amendment of its limited
partnership agreement, articles of organization, certificate of formation,
operating agreement or other formation document or organizational document (as
applicable) in any manner that violates the single purpose covenants set forth
in Section 4.1.30;

(vii) if such entity is a limited partnership, has and shall have at least one
general partner and has and shall have, as its only general partners, Special
Purpose Entities each of which (A) is a single-member Delaware limited liability
company, (B) has two (2) Independent Directors, and (C) holds a direct interest
as general partner in the limited partnership of not less than 0.1%;

(viii) if such entity is a limited liability company (other than a limited
liability company meeting all of the requirements applicable to a single-member
limited liability company set forth in this definition of “Special Purpose
Entity”), has and shall have at least one (1) member that is a Special Purpose
Entity, that is a single-member limited liability company, that has at least two
(2) Independent Directors and that directly owns at least one-half-of-one
percent (0.5%) of the equity of the limited liability company;

 

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(ix) if such entity is a single-member limited liability company, (A) is and
shall be a Delaware limited liability company, (B) has and shall have at least
two (2) Independent Directors serving as managers of such company, (C) shall not
take any action requiring the unanimous affirmative vote of the managing member
and the Independent Directors and shall not cause or permit the members or
managers of such entity to take any action requiring the unanimous affirmative
vote of the managing member and the Independent Directors unless two
(2) Independent Directors then serving as managers of the company shall have
participated consented in writing to such action, and (D) has and shall have
either (1) a member which owns no economic interest in the company, has signed
the company’s limited liability company agreement and has no obligation to make
capital contributions to the company, or (2) two natural persons or one entity
that is not a member of the company, that has signed its limited liability
company agreement and that, under the terms of such limited liability company
agreement becomes a member of the company immediately prior to the withdrawal or
dissolution of the last remaining member of the company;

(x) shall not (and, if such entity is (a) a limited liability company, has and
shall have a limited liability agreement or an operating agreement, as
applicable, or (b) a limited partnership, has a limited partnership agreement,
that, in each case, provide that such entity shall not) (1) dissolve, merge,
liquidate, consolidate; (2) sell all or substantially all of its assets;
(3) amend its organizational documents with respect to the matters set forth in
this definition without the consent of Lender; or (4) without the affirmative
vote of two (2) Independent Directors of itself or the consent of a Principal
that is a member or general partner in it, take any Material Action;

(xi) shall at all times intend to remain solvent and shall pay its debts and
liabilities (including, a fairly-allocated portion of any personnel and overhead
expenses that it shares with any Affiliate) from its assets as the same shall
become due, and shall intend to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations, provided, in each instance,
there exists sufficient cash flow from the Interests to do so and, provided
further, that no Person shall be required to make any direct or indirect
additional capital contributions or loan to an Individual Borrower;

(xii) shall not fail to correct any known misunderstanding regarding the
separate identity of such entity and shall not identify itself as a division of
any other Person;

(xiii) shall maintain its bank accounts, books of account, books and records
separate from those of any other Person and, to the extent that it is required
to file tax returns under applicable law, shall file its own tax returns, except
to the extent that it is required by law to file consolidated tax returns or if
it is an entity the existence of which is disregarded entity for tax purposes;

(xiv) shall maintain its own records, books, resolutions and agreements;

 

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(xv) except as contemplated by the Loan Documents with respect to each other
Borrower, shall not commingle its funds or assets with those of any other Person
and shall not participate in any cash management system with any other Person
except pursuant to the Cash Management Agreement;

(xvi) shall hold its assets in its own name;

(xvii) shall conduct its business in its name or in a name franchised or
licensed to it by an entity other than an Affiliate of itself, except for
business conducted on behalf of itself by another Person under a business
management services agreement that is on commercially-reasonable terms, so long
as the manager, or equivalent thereof, under such business management services
agreement holds itself out as an agent of Borrower;

(xviii) (A) shall maintain its financial statements, accounting records and
other entity documents separate from those of any other Person; (B) shall show,
in its financial statements, its asset and liabilities separate and apart from
those of any other Person; and (C) shall not permit its assets to be listed as
assets on the financial statement of any of its Affiliates except as required by
GAAP; provided, however, that any such consolidated financial statement contains
a note indicating that the Special Purpose Entity’s separate assets and credit
are not available to pay the debts of such Affiliate and that the Special
Purpose Entity’s liabilities do not constitute obligations of the consolidated
entity;

(xix) except as contemplated by the Loan Documents with respect to each other
Borrower, shall pay its own liabilities and expenses, including the salaries of
its own employees, out of its own funds and assets, as distinguished from the
funds and assets of another Person, and shall maintain a sufficient number of
employees in light of its contemplated business operations, provided in each
instance, there exists sufficient cash flow from the Interests to do so and,
provided further, that no Person shall be required to make any direct or
indirect additional capital contributions or loans to an Individual Borrower;

(xx) shall observe all partnership, corporate or limited liability company
formalities necessary to maintain its separate existence, as applicable;

(xxi) shall have no Indebtedness other than (i) the Loan, (ii) liabilities
incurred in the ordinary course of business relating to the ownership of the
related Interests and the routine administration of related Individual Borrower,
in amounts not to exceed 2% of the amount of the Loan which liabilities are not
more than sixty (60) days past the date incurred, are not evidenced by a note
and are paid when due (unless being contested in good faith in accordance with
the terms of this Agreement), and which amounts are normal and reasonable under
the circumstances, and (iii) such other liabilities that are permitted pursuant
to this Agreement;

(xxii) except as contemplated by the Loan Documents with respect to each other
Borrower, shall not assume or guarantee or become obligated for the debts of any
other Person, shall not hold out its credit as being available to satisfy the
obligations of any other Person and shall not pledge its assets to secure the
obligations of any other Person;

 

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(xxiii) shall not acquire obligations or securities of its partners, members or
shareholders or any other owner or Affiliate, except for the Interests;

(xxiv) shall allocate fairly and reasonably any overhead expenses that are
shared with any of its Affiliates, constituents, or owners, or any guarantors of
any of their respective obligations, or any Affiliate of any of the foregoing,
including, but not limited to, paying for shared office space and for services
performed by any employee of an Affiliate, provided there exists sufficient cash
flow from the Interests to do so and, provided further, that no Person shall be
required to make any direct or indirect additional capital contributions or
loans to an Individual Borrower;

(xxv) shall maintain and use, to the extent reasonably necessary in the
operation of its business, separate stationery, invoices and checks bearing its
name and not bearing the name of any other entity unless such entity is clearly
designated as being the Special Purpose Entity’s agent;

(xxvi) except as contemplated by the Loan Documents with respect to each other
Borrower, shall not pledge its assets to secure the obligations of any other
Person;

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

(xxviii) shall not make loans to any Person and shall not hold evidence of
indebtedness issued by any other Person or entity (other than cash and
investment-grade securities issued by an entity that is not an Affiliate of or
subject to common ownership with such entity) other than Permitted Investments;

(xxix) shall not identify its partners, members or shareholders, or any
Affiliate of any of them, as a division or part of it;

(xxx) other than capital contributions and distributions permitted under the
terms of its organizational documents, shall not enter into or be a party to,
any transaction with any of its partners, members, shareholders or Affiliates
except in the ordinary course of its business and on terms which are
commercially reasonable terms comparable to those of an arm’s-length transaction
with an unrelated third party;

(xxxi) shall not have any obligation to, and shall not indemnify its partners,
officers, directors or members, as the case may be, in each case unless such an
obligation or indemnification is fully subordinated to the Debt and shall not
constitute a claim against it in the event that its cash flow is insufficient to
pay the Debt;

(xxxii) shall not have any of its obligations guaranteed by any Affiliate except
as provided by the Loan Documents with respect to the Guaranty, Guaranty
(Payment) and the Environmental Indemnity;

(xxxiii) shall not form, acquire or hold any subsidiary, except for its
respective Subsidiaries;

 

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(xxxiv) shall comply with all of the terms and provisions contained in its
organizational documents necessary to maintain its separate existence; and

(xxxv) shall not permit any Affiliate or constituent party independent access to
its bank accounts other than Manger, solely in its capacity as Borrower’s agent
under the Management Agreement, and solely for legitimate business purposes of
Borrower.

“Spread” shall mean for the period commencing on the date hereof and ending on
(and including) the last day of the Interest Period applicable to the sixth
(6th) Payment Date, 7.00%, which amount shall be increased by fifty (50) basis
points beginning on the commencement of the Interest Period applicable to the
seventh (7th) Payment Date and ending on the last day of the Interest Period
applicable to the ninth (9th) Payment Date, and which amount shall be further
increased by fifty (50) basis points beginning on the commencement of the
Interest Period applicable to the tenth (10th) Payment Date and ending on the
last day of the Interest Period applicable to the Maturity Date.

“State” shall mean, with respect to an Individual Property and the Collateral,
the State or Commonwealth in which such Individual Property or the Collateral,
as applicable or any part thereof is located.

“Stoneybrook Property” shall mean that certain Individual Property commonly
known as 4700 Southwest Hollyhock Circle, Corvallis, Oregon 97333.

“Strike Price” shall mean through and including the Maturity Date, three and
one-half percent (3.50%).

“Subordination of Management Agreement” shall mean, collectively, the
Subordination of Management Agreement (Holiday) and Subordination of Management
Agreement (OpCo Manager).

“Subordination of Management Agreement (Holiday)” shall mean, with respect to
each Individual Property, that certain Subordination of Management Agreement and
Subordination of Management Fees, dated as of the date hereof, among Lender,
Borrower, Leasehold Pledgor, OpCo Manager and Holiday Manager and consented and
agreed to by Mortgage Borrower and Operating Lessee, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

“Subordination of Management Agreement (OpCo Manager)” shall mean, with respect
to each Individual Property, that certain Subordination of Management Agreement
and Subordination of Management Fees, dated as of the date hereof, among Lender,
Borrower, Leasehold Pledgor and OpCo Manager and consented and agreed to by
Mortgage Borrower and Operating Lessee, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

“Subsidiaries” shall mean, individually or collectively, as the context may
require, Mortgage Borrower, Operating Lessee, Corporate Pledgor and Mortgage
Principal.

 

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“Substitute Interest Rate Cap Agreement” shall have the meaning set forth in
Section 2.2.7(h) hereof.

“Tax and Insurance Escrow Fund” shall have the meaning set forth in the Mortgage
Loan Agreement.

“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against any Individual Property or part thereof. In no event shall any PACE Loan
be considered Taxes for purposes of this Agreement.

“Tenant” means the lessee of all or a portion of an Individual Property under a
Lease.

“Threshold Amount” shall have the meaning set forth in Section 5.1.21 hereof.

“Title Insurance Policy” shall mean, with respect to each Individual Property,
the mortgagee title insurance policy issued with respect to such Individual
Property and insuring the lien of the Mortgage encumbering such Individual
Property.

“Transfer” shall have the meaning set forth in Section 5.2.10(b) hereof.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the applicable State in which perfection of a security interest in the
Collateral is made.

“UCC Financing Statements” shall mean the UCC financing statements delivered in
connection with the Pledge Agreement and the other Loan Documents and filed in
the applicable filing offices.

“UCC Title Insurance Policy” shall mean, with respect to the Collateral, a UCC
title insurance policy in the form acceptable to Lender issued with respect to
the Collateral and insuring the lien of the Pledge Agreement encumbering the
Collateral.

“Unit” shall mean each residential unit or apartment in an Individual Property.

“U.S. Obligations” shall mean non-redeemable securities evidencing an obligation
to timely pay principal and/or interest in a full and timely manner that are
(a) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged, or (b) to the extent acceptable to the
Approved Rating Agencies, other “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended.

“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” shall have the meaning set forth in
Section 2.7(e).

 

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“Write Down and Conversion Powers” shall have the meaning set forth in
Section 10.25.

“Zoning Reports” shall mean those certain planning and zoning reports provided
to Lender in connection with the closing of the Loan.

Section 1.2 Principles of Construction. (a) All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. Unless otherwise
specified, the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. 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.

(b) Borrower and Lender hereby acknowledge and agree that, as to any clauses or
provisions contained in this Agreement or any of the other Loan Documents to the
effect that (i) Borrower shall cause Mortgage Borrower to cause Operating Lessee
to act or to refrain from acting in any manner, (ii) Borrower shall cause to
occur or not to occur, or otherwise be obligated in any manner with respect to,
any matters pertaining to any Operating Lessee or Operating Lease, or
(iii) other phrases of similar effect, such clause or provision, in each case,
is intended to mean, and shall be construed as meaning, that (A) Borrower shall
cause the applicable Leasehold Pledgor to cause the applicable Operating Lessee
so to act or refrain from acting and (B) shall cause Mortgage Borrower to
undertake to enforce Operating Lessee’s obligations under the Operating Lease.

(c) With respect to references to the Mortgage Loan Documents (including,
without limitation, terms defined by cross-reference to the Mortgage Loan
Documents), such references shall refer to the Mortgage Loan Documents as in
effect on the Closing Date (and any such defined terms shall have the
definitions set forth in the Mortgage Loan Documents as of the Closing Date) and
no amendments, restatements, replacements, supplements, waivers or other
modifications to or of the Mortgage Loan Documents shall have the effect of
changing such references (including, without limitation, any such definitions)
for the purposes of this Agreement (except with respect to any amendments,
restatements, replacements, supplements, waivers or other modifications required
to be entered into by Mortgage Loan Party under Section 9.1.1, 9.1.3 or 9.1.4 of
the Mortgage Loan Agreement) unless Lender expressly consents to such
modification in writing that such references or definitions, as appearing,
incorporated into or used in this Agreement, have been revised.

(d) Notwithstanding anything stated herein to the contrary, any provisions in
this Agreement cross-referencing provisions of the Mortgage Loan Documents shall
be effective notwithstanding the termination of the Mortgage Loan Documents by
payment in full of the Mortgage Loan or otherwise.

(e) To the extent that any terms, provisions or definitions of any Mortgage Loan
Documents that are incorporated herein by reference are incorporated into the
Mortgage Loan Documents by reference to any document or instrument, such terms,
provisions or

 

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definitions that are incorporated herein by reference shall at all times be
deemed to incorporate each such term, provision and definition of the applicable
other document or instrument as the same is set forth in such other document or
instrument as of the Closing Date, without regard to any amendments,
restatements, replacements, supplements, waivers or other modifications to or of
such other document or instrument occurring after the Closing Date, unless
Lender expressly agrees that such term, provision or definition as appearing,
incorporated into, or used in this Agreement have been revised.

ARTICLE II – GENERAL TERMS

Section 2.1 Loan Commitment; Disbursement to Borrower.

2.1.1 Agreement to Lend and Borrow. Subject to and upon the terms and conditions
set forth herein, Lender hereby agrees to make and Borrower hereby agrees to
accept the Loan on the Closing Date.

2.1.2 Single Disbursement to Borrower. Borrower may request and receive only
one (1) borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed. Borrower
acknowledges and agrees that the Loan has been fully funded as of the Closing
Date.

2.1.3 The Note, Pledge Agreement and Loan Documents. The Loan shall be evidenced
by the Note and secured by the Pledge Agreement and the other Loan Documents.

2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to (a) repay
and discharge any amount due under existing loans relating to the Collateral and
the Individual Properties, (b) make an equity contribution to Mortgage Borrower
and cause Mortgage Borrower to use such amounts for any use permitted pursuant
to the Mortgage Loan Agreement, (c) pay costs and expenses incurred in
connection with the closing of the Loan, as approved by Lender and
(d) distribute the balance, if any, to Borrower.

Section 2.2 Interest Rate.

2.2.1 Interest Rate. Subject to the provisions of this Section 2.2, interest on
the outstanding principal balance of the Loan shall accrue from (and include)
the Closing Date through the end of the last Interest Period at the LIBOR Rate.
Borrower shall pay to Lender on each Payment Date the interest accrued (or to be
accrued) on the Loan for the related Interest Period.

2.2.2 Interest Calculation. Interest on the outstanding principal balance of the
Loan shall be calculated by multiplying (a) the actual number of days elapsed in
the period for which the calculation is being made by (b) a daily rate based on
the Interest Rate and on a three hundred sixty (360) day year by (c) the
outstanding principal balance of the Loan.

2.2.3 Determination of Interest Rate. (a) Subject to the terms and conditions of
this Section 2.2.3 the Loan shall bear interest at the LIBOR Rate. The LIBOR
Rate applicable to an Interest Period shall be determined by Lender as set forth
herein; provided, however, that the LIBOR Rate Index for the Interest Period
commencing on the Closing Date through and including May 14, 2018 shall be the
LIBOR Rate Index on the Closing Date, which the parties agree is 1.933750%.

 

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(b) In the event that Lender shall have reasonably determined that by reason of
circumstances affecting the interbank Eurodollar market the LIBOR Rate Index
cannot be determined as provided in the definition of the LIBOR Rate Index as
set forth herein and an Alternate Rate Index has not been established pursuant
to Section 2.2.3(c) below, then Lender shall forthwith give notice thereof by
telephone of such fact, confirmed in writing, to Borrower at least one
(1) Business Day prior to the Determination Date. If such notice is given, the
Loan shall be converted, from and after the first day of the next succeeding
Interest Period, to a Prime Rate Loan bearing interest based on the Prime Rate
in effect on the related Determination Date.

(c) If at any time Lender has determined in good faith (which determination
shall be conclusive and binding upon Borrower absent manifest error) that the
LIBOR Rate Index has been succeeded by an Alternate Rate Index, the Loan shall
be converted from a LIBOR Rate Loan to an Alternate Rate Loan bearing interest
based on the Alternate Rate in effect on the related Determination Date,
provided that the same does not violate applicable law. Lender may exercise the
foregoing conversion right by giving notice of such determination in writing to
Borrower at least one (1) Business Day prior to any Determination Date
Notwithstanding any provision of this Agreement to the contrary, in no event
shall (i) Borrower have the right to convert the Loan to a Prime Rate Loan or an
Alternate Rate Loan, (ii) Borrower have the right to convert a LIBOR Rate Loan
to an Alternate Rate Loan, or to convert an Alternate Rate Loan to a LIBOR Rate
Loan or a Prime Rate Loan, (iii) the Prime Rate be less than the LIBOR Rate
Floor plus the LIBOR Rate Spread as of the Closing Date, or (iv) the Alternate
Rate be less than the LIBOR Rate Floor plus the LIBOR Rate Spread as of the
Closing Date.

(d) If, pursuant to the terms of Section 2.2.3(b) above, the Loan has been
converted to a Prime Rate Loan but thereafter the LIBOR Rate Index can again be
determined as provided in the definition of the LIBOR Rate Index as set forth
herein, Lender may give notice thereof to Borrower and convert the Prime Rate
Loan back to a LIBOR Loan by delivering to Borrower notice of such conversion no
later than 11:00 a.m. (New York City Time), one (1) Business Day prior to the
next succeeding Determination Date. If such notice is given, the Loan shall be
converted, from and after the first day of the next succeeding Interest Period,
to a LIBOR Rate Loan bearing interest based on the LIBOR Rate Index in effect on
the related Determination Date. Notwithstanding any provision of this Agreement
to the contrary, in no event shall Borrower have the right to elect to convert a
LIBOR Rate Loan to a Prime Rate Loan.

(e) In the event that any change in any requirement of law or in the
interpretation or application thereof, or compliance by Lender with any request
or directive (whether or not having the force of law) hereafter issued from any
central bank or other Governmental Authority:

(i) shall hereafter impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
Lender which is not otherwise included in the determination of the LIBOR Rate
Index, the Prime Rate Index or the Alternate Rate Index hereunder;

 

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(ii) shall hereafter have the effect of reducing the rate of return on Lender’s
capital as a consequence of its obligations hereunder to a level below that
which Lender could have achieved but for such adoption, change or compliance
(taking into consideration Lender’s policies with respect to capital adequacy)
by any amount deemed by Lender to be material;

(iii) shall hereafter subject Lender to any Section 2.7 Taxes (other than
(A) Indemnified Taxes, (B) Section 2.7 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

(iv) shall hereafter impose on Lender any other condition (other than
Section 2.7 Taxes);

and the result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining loans or extensions of credit or to reduce any
amount receivable hereunder, then, in any such case, Borrower shall promptly pay
Lender, upon demand, any additional amounts necessary to compensate Lender for
such additional cost or reduced amount receivable which Lender deems to be
material as determined by Lender in its reasonable discretion. If Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.2.3(e),
Lender shall provide Borrower with not less than thirty (30) days written notice
specifying in reasonable detail the event by reason of which it has become so
entitled and the additional amount required to fully compensate Lender for such
additional cost or reduced amount. A certificate as to any additional costs or
amounts payable pursuant to the foregoing sentence submitted by Lender to
Borrower shall be conclusive in the absence of manifest error. Subject to
Section 2.2.3(f) and Section 2.7 hereof, this provision shall survive payment of
the Note and the satisfaction of all other obligations of Borrower under this
Agreement and the Loan Documents.

(f) Borrower agrees to indemnify Lender and to hold Lender harmless from any
loss or expense which Lender sustains or incurs as a consequence of (i) any
default by Borrower in payment of the principal of or interest on a LIBOR Rate
Loan, a Prime Rate Loan or an Alternate Rate Loan including, without limitation,
any such loss or expense arising from interest or fees payable by Lender to
lenders of funds obtained by it in order to maintain a LIBOR Rate Loan, a Prime
Rate Loan or an Alternate Rate Loan hereunder, (ii) any prepayment (whether
voluntary or mandatory) of the LIBOR Rate Loan, Prime Rate Loan or Alternate
Rate Loan, as applicable, on a day that (A) is not a Payment Date or (B) is a
Payment Date if Borrower did not give the prior written notice of such
prepayment required pursuant to the terms of this Agreement, including, without
limitation, such loss or expense arising from interest or fees payable by Lender
to lenders of funds obtained by it in order to maintain the LIBOR Rate Loan, a
Prime Rate Loan or an Alternate Rate Loan hereunder and (iii) the conversion
pursuant to the terms hereof of the LIBOR Rate Loan to the Prime Rate Loan or an
Alternate Rate Loan on a date other than the Payment Date, including, without
limitation, such loss or expenses

 

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arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain a LIBOR Rate Loan hereunder (the amounts referred to in
clauses (i), (ii) and (iii) are herein referred to collectively as the “Breakage
Costs”); provided, however, Borrower shall not indemnify Lender from any loss or
expense arising from Lender’s willful misconduct or gross negligence. This
provision shall survive payment of the Note in full and the satisfaction of all
other obligations of Borrower under this Agreement and the other Loan Documents.

2.2.4 Additional Costs. Lender will use reasonable efforts (consistent with
legal and regulatory restrictions) to maintain the availability of the LIBOR
Rate Loan and to avoid or reduce any increased or additional costs payable by
Borrower under Section 2.2.3, including, if requested by Borrower, a transfer or
assignment of the Loan to a branch, office or Affiliate of Lender in another
jurisdiction, or a redesignation of its lending office with respect to the Loan,
in order to maintain the availability of the LIBOR Rate Loan or to avoid or
reduce such increased or additional costs, provided that the transfer or
assignment or redesignation (a) would not result in any additional costs,
expenses or risk to Lender that are not reimbursed by Borrower and (b) would not
be disadvantageous in any other respect to Lender as determined by Lender in its
reasonable discretion.

2.2.5 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
Loan and, to the extent permitted by law, all accrued and unpaid interest in
respect of the Loan and any other amounts due pursuant to the Loan Documents,
shall accrue interest at the Default Rate, calculated from the date such payment
was due without regard to any grace or cure periods contained herein.

2.2.6 Usury Savings. This Agreement, the Note and the other Loan Documents are
subject to the express condition that at no time shall Borrower be obligated or
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the
other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be,
shall be deemed to be immediately reduced to the Maximum Legal Rate and all
previous payments in excess of the Maximum Legal Rate shall be deemed to have
been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.

2.2.7 Interest Rate Cap Agreement. (a) Prior to or contemporaneously with the
Closing Date, Borrower (or an Individual Borrower on behalf of and for the
benefit of Borrower (such Individual Borrower, the “IR Cap Borrower”)) shall
enter into an Interest Rate Cap Agreement with a LIBOR strike price equal to the
Strike Price. The Interest Rate Cap Agreement (i) shall at all times be in a
form and substance reasonably acceptable to Lender, (ii) shall at all times be
with an Acceptable Counterparty, (iii) shall direct such Acceptable

 

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Counterparty to deposit directly into the Mezzanine Deposit Account any amounts
due Borrower under such Interest Rate Cap Agreement so long as any portion of
the Debt exists, provided that the Debt shall be deemed to exist if the
Collateral is transferred by judicial or non-judicial foreclosure or
assignment-in-lieu thereof, (iv) shall be for a period equal to the term of the
Loan and (v) shall at all times have a notional amount equal to or greater than
the principal balance of the Loan and shall at all times provide for the
applicable Strike Price. Borrower shall collaterally assign to Lender, pursuant
to the Collateral Assignment of Interest Rate Cap Agreement (the “Assignment of
Interest Rate Cap Agreement”), all of its right, title and interest to receive
any and all payments under the Interest Rate Cap Agreement, and shall deliver to
Lender an executed counterpart of such Interest Rate Cap Agreement (which shall,
by its terms, authorize the assignment to Lender and require that payments be
deposited directly into the Mezzanine Deposit Account) and shall notify the
Acceptable Counterparty of such assignment.

(b) Borrower shall comply with all of its obligations under the terms and
provisions of the Interest Rate Cap Agreement. All amounts paid by the
Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or
Lender shall be deposited immediately into the Mezzanine Deposit Account or into
such other account as specified by Lender. Borrower shall take all actions
reasonably requested by Lender to enforce Lender’s rights under the Interest
Rate Cap Agreement in the event of a default by the Acceptable Counterparty and
shall not waive, amend or otherwise modify any of its rights thereunder.

(c) In the event of any downgrade, withdrawal or qualification of the rating of
the Acceptable Counterparty by any Approved 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 of such downgrade, withdrawal or qualification.

(d) In the event that Borrower fails to purchase and deliver to Lender the
Interest Rate Cap Agreement or fails to maintain the Interest Rate Cap Agreement
in accordance with the terms and provisions of this Agreement, Lender may
purchase the Interest Rate Cap Agreement and the cost incurred by Lender in
purchasing such 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 reimbursed by Borrower to Lender.

(e) In connection with the Interest Rate Cap Agreement, Borrower shall obtain
and deliver to Lender (a) a resolution/consent, as applicable, of the Acceptable
Counterparty authorizing the delivery of the Interest Rate Cap Agreement
acceptable to Lender, and (b) an opinion from counsel (which counsel may be
in-house counsel for the Acceptable Counterparty) for the Acceptable
Counterparty (upon which Lender and its successors and assigns may rely) which
shall provide, in relevant part, that:

(i) the Acceptable Counterparty is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation or formation and
has the organizational power and authority to execute and deliver, and to
perform its obligations under, the Interest Rate Cap Agreement;

 

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(ii) the execution and delivery of the Interest Rate Cap Agreement by the
Acceptable Counterparty, and any other agreement which the Acceptable
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 affecting it or its property;

(iii) all consents, authorizations and approvals required for the execution and
delivery by the Acceptable Counterparty of the Interest Rate Cap Agreement, and
any other agreement which the Acceptable 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
Acceptable Counterparty has executed and delivered pursuant thereto, has been
duly executed and delivered by the Acceptable Counterparty and constitutes the
legal, valid and binding obligation of the Acceptable Counterparty, enforceable
against the Acceptable 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).

(f) At such time as the Debt is repaid in full, all of Lender’s right, title and
interest in and to the Interest Rate Cap Agreement shall terminate and Lender at
Borrower’s sole cost and expense shall execute and deliver such documents as may
be required to evidence Lender’s release of the Interest Rate Cap Agreement and
to notify the Acceptable Counterparty of such release.

(g) Notwithstanding anything to the contrary contained in this Section 2.2.7 or
elsewhere in this Agreement, if, at any time, Lender converts the Loan to either
a Prime Rate Loan or an Alternate Rate Loan in accordance with Section 2.2.3
above (each, a “Rate Conversion”), then within thirty (30) days after such Rate
Conversion, Borrower shall enter into, make all payments under, and satisfy all
conditions precedent to the effectiveness of, a Substitute Interest Rate Cap
Agreement (and in connection therewith, but not prior to Borrower taking all the
actions described in this clause (i), Borrower shall have the right to terminate
any then-existing Interest Rate Cap Agreement).

(h) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an
interest rate cap agreement between an Acceptable Counterparty and Borrower (or
IR Cap Borrower on behalf of and for the benefit of Borrower), obtained by
Borrower and collaterally assigned to Lender pursuant to an Assignment of
Interest Rate Cap Agreement (or substantially similar collateral assignment) and
shall contain each of the following:

 

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(i) a term expiring no earlier than the end of the Interest Period in which the
Maturity Date occurs;

(ii) the notional amount of the Substitute Interest Rate Cap Agreement shall be
equal to or greater than the then outstanding principal balance of the Loan;

(iii) it provides that the only monetary and material obligation of Borrower
thereunder is the making of a single payment to the Acceptable Counterparty
thereunder upon the execution and delivery thereof and there are no other
conditions to the effectiveness of such Substitute Interest Rate Cap Agreement;

(iv) it provides to Lender and Borrower (as determined by Lender in its sole but
good faith discretion), for the term of the Substitute Interest Rate Cap
Agreement, a protection against rising interest rates that is no less beneficial
to Borrower and Lender than that which was provided by the Interest Rate Cap
Agreement being replaced by the Substitute Interest Rate Cap Agreement ; and

(v) without limiting any of the provisions of the preceding clauses (i) through
(iv) above, it satisfies all of the requirements set forth in clauses
(i) through (iii) and clause (v) of Section 2.2.7(a) hereof.

From and after the date of any Rate Conversion, all references to “Interest Rate
Cap Agreement” and “Replacement Interest Rate Cap Agreement” herein (other than
in the definition of “Interest Rate Cap Agreement”, the definition of
“Replacement Interest Rate Cap Agreement” and as referenced in the first
sentence of Section 2.2.7(a) hereof) shall be deemed to refer or relate, as
applicable, to a Substitute Interest Rate Cap Agreement. Notwithstanding the
foregoing, Lender acknowledges and agrees that Borrower shall have the right, in
lieu of delivering a new Substitute Interest Rate Cap Agreement to satisfy the
foregoing, to modify the then existing Interest Rate Cap Agreement so that it
satisfies the conditions set forth in clauses (i) – (v) of the definition of
“Substitute Interest Rate Cap Agreement” herein.

Section 2.3 Loan Payment.

2.3.1 Monthly Debt Service Payments. Borrower shall pay to Lender (a) on the
Closing Date, an amount equal to interest only on the outstanding principal
balance of the Loan from the Closing Date up to and including May 14, 2018,
which interest shall be calculated in accordance with the provisions of
Section 2.2 hereof and (b) on each Payment Date commencing on the Payment Date
occurring in June 2018 and on each Payment Date thereafter up to and including
the Maturity Date, an amount equal to the Monthly Debt Service Payment Amount,
which payments shall be applied first to interest due for the related Interest
Period at the LIBOR Rate or, if unavailable, at the Prime Rate or the Alternate
Rate, as applicable, for such related Interest Period and then to the principal
amount of the Loan due in accordance with this Agreement, if any, and lastly, to
any other amounts due and unpaid pursuant to the Loan Documents hereto.

 

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2.3.2 Payments Generally. The first Interest Period hereunder shall commence on
and include the Closing Date and shall end on and include May 14, 2018.
Thereafter during the term of the Loan, each Interest Period shall commence on
the

fifteenth (15th) day of the calendar month preceding the calendar month in which
the related Payment Date occurs and shall end on and include the
fourteenth (14th) day of the calendar month in which the related Payment Date
occurs. For purposes of making payments hereunder, but not for purposes of
calculating Interest Periods, if the day on which such payment is due is not a
Business Day, then amounts due on such date shall be due on the immediately
preceding Business Day and with respect to payments of principal due on the
Maturity Date, interest shall be payable at the Interest Rate or the Default
Rate, as the case may be, through and including the last day of the related
Interest Period. All amounts due under this Agreement and the other Loan
Documents shall be payable without setoff, counterclaim, defense or any other
deduction whatsoever.

2.3.3 Payment on Maturity Date. Borrower shall pay to Lender on the Maturity
Date the outstanding principal balance of the Loan, all accrued and unpaid
interest and all other amounts due hereunder and under the Note, the Pledge
Agreement and the other Loan Documents.

2.3.4 Late Payment Charge. If any principal, interest or any other sums due
under the Loan Documents are not paid by Borrower on or prior to the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5%) of such unpaid sum or the Maximum Legal Rate in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Pledge Agreement and
the other Loan Documents to the extent permitted by applicable law.

2.3.5 Method and Place of Payment. 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 as otherwise directed by
Lender, 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.

Section 2.4 Prepayments.

2.4.1 Voluntary Prepayments. (a) Except as otherwise provided in
Section 2.4.1(b), Section 2.4.2 and Section 2.5.2 hereof, Borrower shall not
have the right to prepay the Loan in part.

(b) Borrower may prepay the Loan in whole, or in part, including, in accordance
with Section 2.5.2 hereof, provided that (i) no Event of Default exists;
(ii) Borrower gives Lender not less than ten (10) Business Days and not more
than sixty (60) days prior written notice of the amount of the Loan that
Borrower intends to prepay (it being agreed that such notice may be revoked by
Borrower at any time, but Borrower shall pay any actual reasonable out-of-pocket
expenses incurred by Lender in connection with such revocation); (iii) no
prepayment shall be permitted on any date during the period commencing on the
first calendar day immediately following a Payment Date to, but not including,
the Determination Date in such calendar month; and (iv) Borrower pays Lender, in
addition to the outstanding principal amount of the Loan to be prepaid, (A) all
interest which would have accrued on the amount of the Loan

 

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to be paid through and including the date of prepayment; (B) all other sums due
and payable under this Agreement, the Note, and the other Loan Documents,
including, but not limited to the Breakage Costs and all of Lender’s costs and
expenses (including reasonable attorney’s fees and disbursements) incurred by
Lender in connection with such prepayment; and (C) Mortgage Borrower shall make
a pro rata prepayment of the Mortgage Loan in accordance with the terms of the
Mortgage Loan Agreement. If a notice of prepayment is given by Borrower to
Lender pursuant to this Section 2.4.1(b), the amount designated for prepayment
and all other sums required under this Section 2.4.1(b) shall be due and payable
on the proposed prepayment date.

2.4.2 Liquidation Events. (a) In the event of (i) any Casualty to all or any
portion of the Properties or any Individual Property, (ii) any Condemnation of
all or any portion of the Properties or any Individual Property, (iii) a
transfer of any Individual Property in connection with realization thereon
pursuant to the Mortgage Loan Documents following and during the continuance of
a Mortgage Loan Event of Default, including without limitation, a foreclosure
sale or acceptance of a deed in lieu thereof, (iv) a sale or refinancing of any
Individual Property in violation of the Transfer provisions in the Loan
Documents or any refinancing of the Mortgage Loan in violation of the terms of
the Loan Documents, or (v) the receipt by Mortgage Borrower of any excess
proceeds realized under its owner’s title insurance policy after application of
such proceeds by Mortgage Borrower to cure any title defect (each, a
“Liquidation Event”), Borrower shall cause the related Net Liquidation Proceeds
After Debt Service to be deposited with Mortgage Lender. All Net Liquidation
Proceeds After Debt Service deposited with Mortgage Lender pursuant to this
Section 2.4.2, shall be applied by Lender as a full or partial prepayment of the
outstanding principal balance of the Loan in an amount equal to one hundred
percent (100%) of such Net Liquidation Proceeds After Debt Service, together
with interest that would have accrued on such amount through the end of the
Interest Period applicable to the Payment Date on which such Net Liquidation
Proceeds After Debt Service shall be applied by Lender in accordance with this
Section 2.4.2. Any prepayment received by Lender pursuant to this Section 2.4.2
on a date other than a Payment Date shall be held by Lender as collateral
security for the Loan (and if held in an interest bearing account, with such
interest accruing to the benefit of Borrower), and shall be applied by Lender on
the next Payment Date. Net Liquidation Proceeds After Debt Service shall be
applied to the Loan, up to the Adjusted Release Amount for the affected
Individual Property and any excess Net Liquidation Proceeds shall be disbursed
to Borrower. In the event any such application of the Net Liquidation Proceeds
After Debt Service is insufficient to repay the entire Adjusted Release Amount
for the affected Individual Property, the Adjusted Release Amount for such
Individual Property shall be reduced by an amount of the Net Liquidation
Proceeds After Debt Service actually paid to Lender. For the avoidance of doubt,
a release of an Individual Property pursuant to and in accordance with the terms
and conditions of Section 2.5.2 hereof and Section 2.5.2 of the Mortgage Loan
Agreement shall not constitute a Liquidation Event.

(b) Borrower shall promptly notify Lender of any Liquidation Event following
Borrower obtaining knowledge of such event. Borrower shall be deemed to have
knowledge of (i) a sale described in subclause (iv) of Section 2.4.2(a) above
(other than a foreclosure sale) of any Individual Property on the date on which
a contract of sale for such sale is entered into, and a foreclosure sale, on the
date notice of such foreclosure sale is given, and (ii) a refinancing described
in subclause (iv) of Section 2.4.2(a) above, on the date on which a binding
commitment for such refinancing has been entered into. The provisions of this
Section 2.4.2 shall not be construed to contravene in any manner the
restrictions and other provisions regarding refinancing of the Mortgage Loan or
Transfer of the Properties set forth in this Agreement and the other Loan
Documents.

 

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2.4.3 Prepayments After Default. If, following the occurrence and during the
continuance of an Event of Default, payment of all or any part of the Debt is
tendered by Borrower or otherwise recovered by Lender (including, without
limitation, through application of any Mezzanine Reserve Funds), such tender or
recovery shall (a) include interest at the Default Rate on the outstanding
principal amount of the Loan through the last calendar day of the Interest
Period within which such tender or recovery occurs and (b) be deemed a voluntary
prepayment by Borrower (and if such tender or recovery occurs prior to the
Prepayment Release Date, it shall be in violation of the prohibition against
prepayment set forth in Section 2.4.1 hereof) and shall in all instances include
all interest which would have accrued on the amount of the Loan to be paid
through and including the Payment Date next occurring following the date of such
prepayment.

Section 2.5 Release of Collateral. Except as set forth in this Section 2.5, no
repayment or prepayment of all or any portion of the Loan shall cause, give rise
to a right to require, or otherwise result in, the release of any Lien on any
Collateral.1

2.5.1 Release of all Collateral Upon Payment in Full. (a) If Borrower has
elected to prepay the entire Loan and the requirements of Section 2.4 and this
Section 2.5 have been satisfied, all of the Collateral shall be released from
the Liens thereon.

(b) In connection with the release of the Lien of the Pledge Agreement and the
other Loan Documents on the Collateral, Borrower shall submit to Lender, not
less than twenty (20) days prior to the Payment Date on which Borrower intends
to prepay the Loan in full, a release of Lien (and related Loan Documents) for
the Collateral for execution by Lender. Such release shall be in a form
appropriate in each jurisdiction in which the Collateral is located and that
would be satisfactory to a prudent lender and contains standard provisions, if
any, protecting the rights of the releasing lender. In addition, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release, together with an Officer’s Certificate
certifying that such documentation (i) is in compliance with all Legal
Requirements, and (ii) will effect such releases in accordance with the terms of
this Agreement.

2.5.2 Release of Individual Property. If Borrower has elected to prepay a
portion of the Loan and the requirements of Section 2.4 and this Section 2.5
have been satisfied, and provided that no Event of Default has occurred and is
continuing, Borrower may cause Mortgage Borrower to obtain the release of an
Individual Property from the Lien of the Mortgage thereon (and related Mortgage
Loan Documents) and the release of Mortgage Borrower’s obligations under the
Mortgage Loan Documents with respect to such Individual Property (other than
those expressly stated to survive), upon the satisfaction of each of the
following conditions:

 

1  If Westmont Ground Lease Estoppel is not delivered prior to closing, right of
Lender to request a release of the Westmont Property upon an EOD to be included.

 

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(a) The amount of the outstanding principal balance of the Loan to be prepaid
shall equal or exceed the Adjusted Release Amount for the applicable Individual
Property, and such prepayment shall be deemed a voluntary prepayment for all
purposes hereunder;

(b) Subsequent to such release, each Individual Mortgage Borrower, Borrower,
Leasehold Pledgor and Operating Lessee shall continue to be a Special Purpose
Entity pursuant to, and in accordance with, Section 4.1.30 hereof;

(c) Borrower shall deliver to Lender an Additional Insolvency Opinion or an
update of the Insolvency Opinion indicating that the release does not affect the
opinions set forth therein;

(d) Borrower shall cause Mortgage Borrower to submit to Mortgage Lender, not
less than twenty (20) days prior to the Payment Date on which the prepayment
will be made, a release of Lien (and related Mortgage Loan Documents) for such
Individual Property for execution by Mortgage Lender. Such release shall be in a
form appropriate in each jurisdiction in which the Individual Property is
located and that would be satisfactory to a prudent lender and contains standard
provisions, if any, protecting the rights of the releasing lender. In addition,
Borrower shall provide all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such release, together with an
Officer’s Certificate certifying that such documentation (i) is in compliance
with all Legal Requirements, (ii) will effect such release in accordance with
the terms of this Agreement, and (iii) will not impair or otherwise adversely
affect the Liens, security interests and other rights of Lender under the Loan
Documents or Mortgage Lender under the Mortgage Loan Documents not being
released (or as to the parties to the Loan Documents and Mortgage Loan Documents
and Properties subject to the Mortgage Loan Documents and Collateral subject to
the Loan Documents not being released);

(e) After giving effect to such release, the Debt Yield for the Properties then
remaining subject to the Liens of the Mortgages shall be equal to or greater
than the Debt Yield for all of the Properties subject to the Liens of the
Mortgages immediately prior to giving effect to the applicable release (the
“Release Debt Yield”), provided, that if Borrower does not satisfy the Release
Debt Yield as of the date of such release, Borrower may prepay a portion of the
outstanding principal balance of the Loan in the amount (taking into account a
pro rata prepayment of the Mortgage Loan pursuant to Section 2.5.2(g) of the
Mortgage Loan) necessary to cause the Debt Yield to equal or exceed the Release
Debt Yield, as the case may be (each such prepayment, a “Debt Yield Cure
Payment”)), so long as Borrower satisfies the conditions to prepayment set forth
in Section 2.4.1(b) (other than the notice required under Section 2.4.1(b)(ii)
hereof).

(f) Mortgage Borrower shall have satisfied all of the conditions set forth in
Section 2.5.2 of the Mortgage Loan Agreement, including payment of the Mortgage
Adjusted Release Amount to Mortgage Lender;

(g) The Individual Property to be released shall be conveyed in a transfer to a
Person other than a Borrower, Individual Mortgage Borrower or any of its
Affiliates;

 

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(h) The Adjusted Release Amount paid to Lender in connection with any such
release shall be deemed a voluntary prepayment for all purposes hereunder;

(i) Borrower shall reimburse Lender and Servicer for any costs and expenses
Lender and Servicer arising from such release (including reasonable attorneys’
fees and expenses) and Borrower shall have paid, in connection with such
release, (i) all recording charges, filing fees, taxes or other expenses payable
in connection therewith, (ii) all costs and expenses of the Rating Agencies
incurred with respect to such release, and (iii) to any Servicer, the current
fee being assessed by such Servicer to effect such release.

(j) The Operating Lease for the released Individual Property shall be amended to
release such Individual Property from the Operating Lease and to reduce the Rent
payable thereunder by the amount of the Rent which was due under the Operating
Lease for such Individual Property.

Section 2.6 Lockbox Account/Cash Management.

2.6.1 Lockbox Account. (a) During the term of the Loan, Borrower shall cause
Mortgage Borrower or Operating Lessee to establish and maintain the Lockbox
Account. Mortgage Lender and Servicer shall have the sole right to make
withdrawals from the Lockbox Account and all costs and expenses for establishing
and maintaining the Lockbox Account shall be paid by Borrower or Mortgage
Borrower. All monies now or hereafter deposited into the Lockbox Account shall
be deemed additional security for the Debt. The Lockbox Agreement and Lockbox
Account shall remain in effect until the Loan has been repaid in full. The
Lockbox Account shall at all times be an Eligible Account.

(b) If any Residents or Tenants do not deposit their Rents directly into the
Lockbox Account, Borrower shall cause Mortgage Borrower and/or Operating Lessee
to, or to cause Manager to deposit all amounts received by Mortgage Borrower,
Operating Lessee or Manager constituting Rents into the Lockbox Account within
one (1) Business Day after receipt thereof.

(c) Borrower shall cause Mortgage Borrower to obtain from Lockbox Bank its
agreement to transfer, upon the occurrence and during the continuance of a Cash
Sweep Period, to the Cash Management Account in immediately available funds by
federal wire transfer all amounts on deposit in the Lockbox Account once every
Business Day throughout the Cash Sweep Period.

(d) Intentionally omitted.

(e) The Lockbox Account shall not be commingled with other monies held by
Mortgage Borrower, Operating Lessee, Manager, Borrower, Leasehold Pledgor or
Lockbox Bank.

(f) Borrower shall not permit Mortgage Borrower to further pledge, assign or
grant any security interest in the Lockbox Account or the monies deposited
therein or permit any lien or encumbrance to attach thereto, or any levy to be
made thereon, or any UCC-1 Financing Statements, except those naming Lender as
the secured party, to be filed with respect thereto.

 

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(g) Borrower shall indemnify Lender and hold Lender harmless from and against
any and all actions, suits, claims, demands, liabilities, losses, damages,
obligations and costs and expenses (including litigation costs and reasonable
attorneys’ fees and expenses) arising from or in any way connected with the
Lockbox Account and/or the Lockbox Agreement (unless arising from the gross
negligence or willful misconduct of Lender) or the performance of the
obligations for which the Lockbox Account was established.

2.6.2 Cash Management Account. (a) Upon the occurrence of a Cash Sweep Event,
Borrower shall cause Mortgage Borrower to promptly establish and maintain a
segregated Eligible Account (the “Cash Management Account”) to be held by Agent
in trust and for the benefit of Mortgage Lender, which Cash Management Account
shall be under the sole dominion and control of Mortgage Lender. During a Cash
Sweep Period, Borrower shall cause Mortgage Borrower to cause Lockbox Bank to
deposit, on each Business Day, all sums on deposit in the Lockbox Account and
all sums required to be deposited into the Cash Management Account. The Cash
Management Account shall be entitled “Needle Interco Tenant LLC for the benefit
of JPMorgan Chase Bank, National Association, as Lender, pursuant to Loan
Agreement dated as of May 14, 2018 – Cash Management Account” Mortgage Lender
and Servicer 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 or Mortgage Borrower.

(b) The insufficiency of funds on deposit in the Cash Management Account or the
Mezzanine Deposit Account shall not relieve Borrower from the obligation to make
any payments, as and when due pursuant to this Agreement and the other Loan
Documents, and such obligations shall be separate and independent, and not
conditioned on any event or circumstance whatsoever or Mortgage Borrower from
the obligation to make any payments, as and when due pursuant to the Mortgage
Loan Agreement and the other Mortgage Loan Documents, and such obligations shall
be separate and independent, and not conditioned on any event or circumstance
whatsoever.

(c) All funds on deposit in the Mezzanine Deposit Account following the
occurrence and during the continuance of an Event of Default may be applied by
Lender in such order and priority as Lender shall determine.

(d) Borrower hereby agrees that Mortgage Lender may modify the Cash Management
Agreement for the purpose of establishing additional sub-accounts in connection
with any payments otherwise required under this Agreement and the other Loan
Documents and Lender shall provide notice thereof to Borrower.

2.6.3 Payments Received under the Cash Management Agreement. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents, and provided no Event of Default has occurred and is continuing, upon
the occurrence and during the continuation of a Cash Sweep Period, Borrower’s
obligations with respect to the payment of the Monthly Debt Service Payment
Amount and amounts required to be deposited into the Mezzanine Reserve Funds, if
any, shall be deemed satisfied to the extent sufficient amounts are available to
be paid to Lender in accordance with the Cash Management Agreement to satisfy
such obligations pursuant to this Agreement on the dates each such payment is
required, regardless of whether any of such amounts are so applied by Lender.

 

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2.6.4 Distributions. Any transfer of Mortgage Borrower’s funds from the Lockbox
Account or Cash Management Account or other sources to or for the benefit of
Borrower or Lender pursuant to the terms of this Agreement, or any other Loan
Document, is intended by Mortgage Borrower and Borrower to constitute, and shall
constitute, a distribution from Mortgage Borrower to Borrower and shall be
treated as such on the books and records of each of Mortgage Borrower and
Borrower. All such distributions by Mortgage Borrower shall comply with the
requirements of Section 18-607 of the Delaware Limited Liability Company Act. No
provision of this Agreement, or any other Loan Document, is intended to, nor
shall, create a debtor-creditor relationship between Mortgage Borrower and
Borrower or Mortgage Borrower and Lender or Borrower and Mortgage Lender.

2.6.5 Replacement Lockbox Account Agreement and Cash Management Agreement. If
Mortgage Borrower is no longer required to maintain the Lockbox Account or the
Cash Management Account in accordance with the Mortgage Loan Documents, upon
written notice from Lender, Borrower shall establish a lockbox account or cash
management account (the “Replacement Cash Management Account”) and cash
management system (as applicable) with Lender pursuant to a replacement lockbox
account agreement or cash management agreement (as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, the
“Replacement Cash Management Agreement”) (as applicable) in a form reasonably
acceptable to Borrower and Lender, which replacement lockbox account agreement
or Replacement Cash Management Agreement shall be substantially the same as the
Lockbox Agreement or Cash Management Agreement (as applicable). If Borrower
shall be required to make a deposit into any Mezzanine Reserve Funds hereunder,
Borrower shall establish a Replacement Cash Management Account and related
replacement cash management system with Lender with respect to such Mezzanine
Reserves Funds pursuant to a Replacement Cash Management Agreement, which
Replacement Cash Management Agreement shall be in substantially the same form as
the Cash Management Agreement.

Section 2.7 Withholding Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Loan Document shall be made without
deduction or withholding for any Section 2.7 Taxes, except as required by
applicable law. If any applicable law (as determined in the good faith
discretion of the Borrower) requires the deduction or withholding of any
Section 2.7 Tax from any such payment by the Borrower, then the Borrower 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 and, if such Section 2.7 Tax is an Indemnified Tax, then the
sum payable by the Borrower 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 2.7) the
Lender receives an amount equal to the sum it would have received had no such
deduction or withholding been made.

 

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(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the
relevant Governmental Authority in accordance with applicable law any Other
Taxes.

(c) Indemnification by the Borrower. The Borrower 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) payable or paid by such Lender or required to be
withheld or deducted from a payment to such Lender and any reasonable
out-of-pocket 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 the Borrower by a Lender shall be conclusive absent
manifest error.

(d) Evidence of Payments. As soon as practicable after any payment of
Section 2.7 Taxes by the Borrower to a Governmental Authority pursuant to this
Section 2.7, the Borrower shall deliver to the 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 the Lender.

(e) Status of Lenders. (i) Any Lender that is entitled to an exemption from or
reduction of withholding Section 2.7 Tax with respect to payments made under any
Loan Document shall deliver to the Borrower, at the time or times reasonably
requested by the Borrower, such properly completed and executed documentation
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrower, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower as will enable the Borrower to determine whether or not such 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 2.7(e)(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Borrower,

(A) any Lender that is a U.S. Person shall deliver to the Borrower on or prior
to the date on which such Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of the Borrower), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower (in such number of copies as shall be requested by the
recipient) 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 the Borrower), whichever of the following is applicable:

 

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(1) 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 or IRS
Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of,
U.S. federal withholding Section 2.7 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 or IRS Form W-8BEN-E, as applicable, establishing
an exemption from, or reduction of, U.S. federal withholding Section 2.7 Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit A-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 the 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 IRS Form
W-8BEN-E, as applicable,; or

(4) to the extent a Foreign Lender is a partnership or is not the beneficial
owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI,
IRS Form W-8BEN, or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance
Certificate substantially in the form of Exhibit A-2 or Exhibit A-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 A-4 on behalf of each such
direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower (in such number of copies as shall be requested by the
recipient) 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 the 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 the Borrower to
determine the withholding or deduction required to be made; and

 

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(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower at the time or times prescribed by law and at such
time or times reasonably requested by the 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 the Borrower as
may be necessary for the Borrower to comply with their obligations under FATCA
and to determine that such Lender has complied with such Lender’s obligations
under FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete, invalid, incomplete or inaccurate in any respect,
it shall update such form or certification or promptly notify the Borrower in
writing of its legal inability to do so.

(f) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any
Section 2.7 Taxes as to which it has been indemnified pursuant to this
Section 2.7 (including by the payment of additional amounts pursuant to this
Section 2.7), 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 Section 2.7 Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses (including Section 2.7 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 paragraph (f) (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 paragraph (f), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (f) 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 Section 2.7 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 Section 2.7 Tax had never been paid. This paragraph
shall not be construed to require any indemnified party to make available its
tax returns (or any other information relating to its Section 2.7 Taxes that it
deems confidential) to the indemnifying party or any other Person.

(g) Survival. Each party’s obligations under this Section 2.7 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.

 

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ARTICLE III – CONDITIONS PRECEDENT

Section 3.1 Conditions Precedent to Closing. The obligation of Lender to make
the Loan hereunder is subject to the fulfillment by Borrower or waiver by Lender
of all of the conditions precedent to closing set forth in the application or
term sheet for the Loan delivered by Borrower to Lender and the commitment or
commitment rider, if any, to the application or term sheet for the Loan issued
by Lender. Notwithstanding anything contained herein to the contrary, Lender’s
funding of the Loan on the Closing Date shall be deemed to constitute the
satisfaction or waiver of all conditions precedent set forth therein or herein.

ARTICLE IV – REPRESENTATIONS AND WARRANTIES

Section 4.1 Borrower Representations. Each Loan Party represents and warrants as
of the date hereof that:

4.1.1 Organization. Each Loan Party has been duly organized and is validly
existing and in good standing with requisite power and authority to own the
related Collateral and to transact the businesses in which it is now engaged.
Each Loan Party is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its
businesses and operations. Each Loan Party possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it
to own, lease or manage, as applicable, the related Collateral and to transact
the businesses in which it is now engaged, and the sole business of such Loan
Party is the ownership, management, leasing and operation, as applicable, of the
related Individual Property. The ownership interests in each Loan Party are as
set forth on the organizational chart attached hereto as Schedule IV.

4.1.2 Proceedings. Each Loan Party has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the other Loan
Documents. This Agreement and such other Loan Documents have been duly executed
and delivered by or on behalf of Loan Party and constitute legal, valid and
binding obligations of Borrower enforceable against Loan Party in accordance
with their respective 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).

4.1.3 No Conflicts. The execution, delivery and performance of this Agreement
and the other Loan Documents by Loan Party will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance (other
than pursuant to the Loan Documents) upon any of the property or assets of Loan
Party pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, partnership agreement, management agreement or other agreement or
instrument to which Loan Party is a party or by which any of the Collateral or
Loan Party’s assets is subject, nor will such action result in any violation of
the provisions of any statute or any order, rule or regulation of any
Governmental Authority having jurisdiction over Loan Party or any of Loan
Party’s properties or assets, and any consent, approval, authorization, order,
registration or qualification of or with any court or any such Governmental
Authority required for the execution, delivery and performance by Loan Party of
this Agreement or any other Loan Documents has been obtained and is in full
force and effect.

 

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4.1.4 Litigation. There are no actions, suits or proceedings at law or in equity
by or before any Governmental Authority or other agency now pending or, to Loan
Party’s knowledge, threatened against or affecting Mortgage Borrower, Borrower,
Guarantor, any Loan Party, any Mortgage Loan Party, any Collateral or any
Individual Property, which actions, suits or proceedings, if determined against
Mortgage Borrower, Borrower, Guarantor, any Loan Party, any Mortgage Loan Party,
any Collateral or any Individual Property, would reasonably be expected to have
a Material Adverse Effect.

4.1.5 Agreements. No Loan Party or Mortgage 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 or Mortgage Loan Party
is in 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 it is a party or by which Loan Party or
Mortgage Loan Party or any Individual Property or any Collateral is bound. No
Loan Party or Mortgage Loan Party has material financial obligation under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Loan Party or Mortgage Loan Party is a party or by which
Loan Party or Mortgage Loan Party or the Properties or the Collateral are
otherwise bound, other than (i) with respect to Mortgage Loan Party
(a) obligations incurred in the ordinary course of the operation of the
Properties as permitted pursuant to clause (xxi) of the definition of “Special
Purpose Entity” set forth in Section 1.1 of the Mortgage Loan Agreement and
(b) obligations under the Mortgage Loan Documents and (ii) with respect to Loan
Party (a) obligations incurred in the ordinary course of the operation of the
Collateral as permitted pursuant to clause (xxi) of the definition of “Special
Purpose Entity” set forth in Section 1.1 of this Agreement and (b) obligations
under the Loan Documents.

4.1.6 Title. Mortgage Borrower has good, marketable and insurable fee simple
title or with respect to the Ground Lease Properties, leasehold estate title, to
the real property comprising part of each Individual Property, as applicable,
and good title to the balance of such Individual Property, free and clear of all
Liens whatsoever except the Permitted Encumbrances, such other Liens as are
permitted pursuant to the Loan Documents and the Liens created by the Loan
Documents. Operating Lessee has good, marketable and insurable leasehold estate
title to the real property comprising part of each Individual Property, as
applicable, and good title to the balance of such Individual Property, free and
clear of all Liens whatsoever except the Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by
the Loan Documents. Each Loan Party has good, marketable title to the Collateral
it owns, free and clear of all Liens whatsoever except the Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. The Permitted Encumbrances in the
aggregate do not materially and adversely affect the value, operation or use
(a) of the applicable Individual Property (as currently used) or Mortgage
Borrower’s ability to repay the Mortgage Loan or (b) of the applicable
Collateral (as currently used) or Borrower’s ability to repay the Loan. Each
Mortgage, when properly recorded in the appropriate records, together with any
Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected first priority lien on the
applicable Individual Property, subject only to Permitted Encumbrances and the
Liens created by the Loan Documents and (b) perfected security interests in and
to, and perfected collateral assignments of, all personalty (including the
Leases), all in accordance with the terms thereof, in each case subject only to
any applicable Permitted Encumbrances, such other Liens as are permitted
pursuant to the Mortgage Loan Documents and the Liens created by the Mortgage
Loan Documents. The Pledge Agreement,

 

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together with the UCC Financing Statements relating to the Collateral, when
properly filed in the appropriate records, will create a valid, perfected first
priority lien on the applicable Collateral, subject only to the Liens created by
the Loan Documents. There are no claims for payment for work, labor or materials
affecting the Properties which are or, to the best of Borrower’s knowledge, may
become a Lien prior to, or of equal priority with, the Liens created by the Loan
Documents and the Mortgage Loan Documents.

4.1.7 Solvency. Each Loan Party has (a) not entered into this transaction or
executed the Note, this Agreement or any other Loan Documents with the actual
intent to hinder, delay or defraud any creditor and (b) received reasonably
equivalent value in exchange for its obligations under such Loan Documents.
Giving effect to the Loan, the fair saleable value of each Loan Party’s assets
exceeds and will, immediately following the making of the Loan, exceed each Loan
Party’s total liabilities, including, without limitation, subordinated,
unliquidated, disputed and contingent liabilities. The fair saleable value of
each Loan Party’s assets is and will, immediately following the making of the
Loan, be greater than each Loan Party’s probable liabilities, including the
maximum amount of its contingent liabilities on its debts as such debts become
absolute and matured. Each Loan Party’s assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. No Loan Party
intends 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 each Loan Party and the amounts to be payable
on or in respect of obligations of each Loan Party). No petition in bankruptcy
has been filed against Borrower, any Loan Party, Mortgage Borrower, any Mortgage
Loan Party or any constituent Person in the last seven (7) years, and neither
Borrower, any Loan Party, Mortgage Borrower, any Mortgage Loan Party nor any
constituent Person in the last seven (7) years has ever made an assignment for
the benefit of creditors or taken advantage of any insolvency act for the
benefit of debtors. Neither Borrower, any Loan Party, Mortgage Borrower, any
Mortgage Loan Party nor any of its constituent Persons are contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of Borrower’s or
any Loan Party’s, Mortgage Borrower’s or any Mortgage Loan Party’s assets or
property, and neither Borrower nor any Loan Party has any knowledge of any
Person contemplating the filing of any such petition against it or such
constituent Persons.

4.1.8 Full and Accurate Disclosure. No statement of fact made by any Loan Party
in this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There is no material
fact presently known to any Loan Party which has not been disclosed to Lender
which adversely affects, nor as far as Loan Party can foresee, would be
reasonably expected to result in a Material Adverse Effect.

4.1.9 ERISA.

(a) Generally. Each of the Borrower, Guarantor, each other Loan Party, Mortgage
Borrower, each other Mortgage Loan Party and their ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other applicable law relating to any Plans and the regulations and
published interpretations thereunder.

 

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Neither Borrower, any Loan Party, Mortgage Borrower, any Mortgage Loan Party nor
Guarantor has incurred or reasonably expects to incur any liability for a
Prohibited Transaction (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code). No ERISA Event or termination of any Plan has
occurred or is reasonably expected to occur and no notice of termination has
been filed by or with the PBGC with respect to any Plan established or
maintained by Borrower, Guarantor or any ERISA Affiliate. Neither Borrower, any
Loan Party, , Mortgage Borrower, any Mortgage Loan Party Guarantor nor any ERISA
Affiliate is or was a party to any Multiemployer Plan. With respect to each
Foreign Benefit Arrangement and with respect to each Foreign Plan, (i) any
employer and employee contributions required by law or by the terms of any
Foreign Benefit Arrangement or any Foreign Plan have been made, or, if
applicable, accrued, in accordance with normal accounting practices, (ii) the
fair market value of the assets of each funded Foreign Plan, the liability of
each insurer for any Foreign Plan funded through insurance or the book reserve
established for any Foreign Plan, together with any accrued contributions, is
sufficient to procure or provide for the accrued benefit obligations, as of the
date hereof, with respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles, and (iii) each Foreign Plan that is required to be
registered has been registered and has been maintained in good standing with
applicable regulatory authorities.

(b) Plan Assets; Prohibited Transactions. Neither the Borrower, any Loan Party,
Mortgage Borrower, any Mortgage Loan Party nor the Guarantor is, and neither
shall become an entity deemed to hold “plan assets” within the meaning of 29
C.F.R. § 2510.3-101 (as modified by Section 3(42) of ERISA) of an employee
benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or any plan (within the meaning of and subject to Section 4975 of the
Code). Neither the Borrower, any Loan Party, Mortgage Borrower, any Mortgage
Loan Party nor the Guarantor is a “governmental plan” within the meaning of
Section 3(32) of ERISA and transactions by or with Borrower, any Loan Party,
Mortgage Borrower, any Mortgage Loan Party or Guarantor are not subject to any
state or other statute, regulation or other restriction regulating investments
of, or fiduciary obligations with respect to, governmental plans within the
meaning of Section 3(32) of ERISA which is similar to Section 406 of ERISA or
Section 4975 of the Code (“Similar Law”). The execution of this Agreement, the
making of the Loan and the other transactions contemplated by the Loan
Documents, including but not limited to the exercise by the Lender of its rights
under the Loan Documents, are not and will not give rise to an unexempt
Prohibited Transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code, and are not prohibited or otherwise restricted by
Similar Law.

4.1.10 Compliance. Each Loan Party, Mortgage Loan Party and the Properties and
the use thereof comply in all material respects with all applicable Legal
Requirements, building and zoning ordinances and codes, except to the extent
noted in the Zoning Reports or to the extent any such non-compliance would not
reasonably be expected to have a Material Adverse Effect. No Loan Party or
Mortgage Loan Party is in default or violation of any order, writ, injunction,
decree or demand of any Governmental Authority. There has not been committed by
Borrower, any Loan Party, Mortgage Borrower, any Mortgage Loan Party or any
other Person in occupancy of or involved with the operation or use of the
Properties any act or omission affording the federal government or any other
Governmental Authority the right of

 

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forfeiture as against any Individual Property or any part thereof or any monies
paid in performance of Borrower’s or any Loan Party’s obligations under any of
the Loan Documents or Mortgage Borrower’s or any Mortgage Loan Party’s
obligations under any of the Mortgage Loan Documents. On the Closing Date, to
the knowledge of each Loan Party, the Improvements at each Individual Property
were in material compliance with applicable law.

4.1.11 Financial Information. All financial data, including, without limitation,
the statements of cash flow and income and operating expense, that have been
delivered to Lender in connection with the Loan (a) are true, complete and
correct in all material respects, (b) accurately represent the financial
condition of Borrower, each Loan Party, Mortgage Borrower, Mortgage Loan Party,
the Collateral and the Properties, as applicable, as of the date of such
reports, and (c) to the extent prepared or audited by an independent certified
public accounting firm, have been prepared in accordance with GAAP throughout
the periods covered, except as disclosed therein. Except for Permitted
Encumbrances, neither Borrower, Mortgage Borrower, Mortgage Loan Party nor any
Loan Party has any contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments that are known to Borrower or any Loan Party and
reasonably likely to have a material adverse effect on any Individual Property,
the Collateral or the current operation thereof, except as referred to or
reflected in said financial statements. Since the date of such financial
statements, there has been no material adverse change in the financial
condition, operations or business of Borrower, Mortgage Borrower, any Mortgage
Loan Party or any Loan Party from that set forth in said financial statements.

4.1.12 Condemnation. No Condemnation or other similar proceeding has been
commenced or, to Loan Party’s knowledge, is threatened or contemplated with
respect to all or any portion of any Individual Property or for the relocation
of roadways providing access to any Individual Property.

4.1.13 Federal Reserve Regulations. No part of the proceeds of the Loan will be
used for the purpose of purchasing or acquiring any “margin stock” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or for any other purpose which would be inconsistent with such Regulation U or
any other Regulations of such Board of Governors, or for any purposes prohibited
by Legal Requirements or by the terms and conditions of this Agreement or the
other Loan Documents.

4.1.14 Utilities and Public Access. Each Individual Property has rights of
access to public ways and except as shown on the Surveys or such matters that do
not have a Material Adverse Effect on such Individual Property, is served by
water, sewer, sanitary sewer and storm drain facilities adequate to service such
Individual Property for its respective intended uses. All public utilities
necessary or convenient to the full use and enjoyment of each Individual
Property are located either in the public right of way abutting such Individual
Property (which are connected so as to serve such Individual Property without
passing over other property) or in recorded easements serving such Individual
Property and such easements are set forth in and insured by the related Title
Insurance Policy. All roads necessary for the use of each Individual Property
for its current respective purposes have been completed and dedicated to public
use and accepted by all Governmental Authorities.

 

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4.1.15 Not a Foreign Person. No Loan Party is a “foreign person” within the
meaning of §1445(f)(3) of the Code.

4.1.16 Separate Lots. Except with respect to that certain Individual Property
known as the Lodge at Cold Springs (“Cold Springs Property”), each Individual
Property is comprised of one (1) or more parcels which constitute a separate tax
lot or lots and does not constitute a portion of any other tax lot not a part of
such Individual Property.

4.1.17 Assessments. There are no pending or, to the Loan Parties knowledge,
proposed special or other assessments for public improvements or otherwise
affecting any Individual Property, nor to any Loan Party’s knowledge, are there
any contemplated improvements to any Individual Property that may result in such
special or other assessments.

4.1.18 Enforceability. The Loan Documents are enforceable by Lender (or any
subsequent holder thereof) in accordance with their respective terms, subject to
principles of equity and bankruptcy, insolvency and other laws generally
applicable to creditors’ rights and the enforcement of debtors’ obligations. The
Loan Documents are not subject to any right of rescission, set off, counterclaim
or defense by any Loan Party or Guarantor, including the defense of usury, nor
would the operation of any of the terms of the Loan Documents, or the exercise
of any right thereunder, render the Loan Documents unenforceable (subject to
principles of equity and bankruptcy, insolvency and other laws generally
affecting creditors’ rights and the enforcement of debtors’ obligations), and
neither Borrower, any Loan Party nor Guarantor has asserted any right of
rescission, set off, counterclaim or defense with respect thereto.

4.1.19 No Prior Assignment. There are no prior assignments of the Leases or any
portion of the Rents due and payable or to become due and payable which are
presently outstanding.

4.1.20 Insurance. Borrower has obtained and has delivered to Lender certified
copies of the Policies reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement. No material claims have been made or
are currently pending, outstanding or otherwise remain unsatisfied under any
such Policy which would reasonably be expected to have a Material Adverse
Effect, and neither Borrower, any Loan Party, Mortgage Borrower, any Mortgage
Loan Party nor any other Person, has done, by act or omission, anything which
would impair the coverage of any such Policy.

4.1.21 Use of Property. Each Individual Property is used exclusively for
independent living facility purposes and other appurtenant and related uses.

4.1.22 Certificate of Occupancy; Licenses. Except as disclosed in the Zoning
Reports, all certifications, permits, licenses and approvals, including without
limitation, certificates of completion and occupancy permits, required for the
legal use, occupancy and operation of each Individual Property as currently
used, occupied and operated have been obtained and are in full force and effect.
The use being made of each Individual Property is in conformity with the
certificate of occupancy issued for such Individual Property.

 

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4.1.23 Flood Zone. Except as set forth on the Survey for an Individual Property,
none of the Improvements on any Individual Property are located in an area as
identified by the Federal Emergency Management Agency as an area having special
flood hazards, or, if so located, the flood insurance required pursuant to
Section 6.1 is in full force and effect with respect to such Individual
Property.

4.1.24 Physical Condition. Except as otherwise expressly disclosed in the
property condition reports delivered to Lender prior to the date hereof in
connection with the origination of the Loan, each Individual Property,
including, without limitation, all buildings, improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping, irrigation systems and to the Loan Party’s knowledge,
all structural components, are in good condition, order and repair in all
material respects; there exists no structural or other material defects or
damages in any Individual Property, whether latent or otherwise, and neither
Mortgage Borrower nor Borrower has received notice from any insurance company or
bonding company of any defects or inadequacies in any Individual Property, or
any part thereof, which would adversely affect the insurability of the same or
cause the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.

4.1.25 Boundaries. Except as may be disclosed on the Survey for an Individual
Property, all of the improvements which were included in determining the
appraised value of each Individual Property lie wholly within the boundaries and
building restriction lines of such Individual Property, and no improvements on
adjoining properties encroach upon any Individual Property, and no easements or
other encumbrances upon any Individual Property encroach upon any of the
Improvements, so as to affect the value or marketability of the applicable
Property except those which are insured against by the applicable Title
Insurance Policy.

4.1.26 Leases and Major Contracts. (a) The Properties are not subject to any
Leases, other than (i) the Residency Agreements described in the rent roll
attached hereto as Schedule II-A and made a part hereof, which rent roll is
true, complete and accurate in all respects as of the Closing Date and
(ii) Leases with commercial Tenants (collectively, the “Commercial Leases”),
copies of which have been delivered to Lender prior to the Closing Date.
Mortgage Borrower is the owner and lessor of landlord’s interest in the
Operating Lease and Operating Lessee is the sublandlord’s interest in the other
Leases. No Person has any possessory interest in any Individual Property or
right to occupy the same except under and pursuant to the provisions of the
Commercial Leases, the Management Agreements, the Operating Lease and the
Residency Agreements. The current Leases are in full force and effect and there
are no defaults thereunder by either party that are reasonably expected to
result in a Material Adverse Effect and, to the knowledge of each Loan Party,
there are no conditions that, with the passage of time or the giving of notice,
or both, would constitute defaults thereunder. No Rent has been paid more than
one (1) month in advance of its due date. All security deposits are held by
Borrower in accordance with applicable law. All work to be performed by Mortgage
Borrower under each Lease with a commercial Tenant has been performed as
required and has been accepted by the applicable Tenant, and any payments, free
rent, partial rent, rebate of rent or other payments, credits, allowances or
abatements required to be given by Mortgage Borrower to any Tenant has already
been received by such Tenant. There has been no prior sale, transfer or
assignment, hypothecation or pledge of any Lease or of the Rents received
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outstanding. No Tenant under any Commercial Lease has assigned its Lease or
sublet all or any portion of the premises demised thereby, no such Tenant holds
its leased premises under assignment or sublease, nor does anyone except such
Tenant and its employees occupy such leased premises. No Tenant under any Lease
has a right or option pursuant to such Lease or otherwise to purchase all or any
part of the leased premises or the building of which the leased premises are a
part. No Tenant under any commercial Lease has any right or option for
additional space in the Improvements.

(b) Neither the Properties nor Mortgage Borrower or Operating Lessee are subject
to any Major Contracts other than the Major Contracts set forth on Schedule II-B
attached hereto.

4.1.27 Survey. To each Loan Party’s knowledge, the Survey for each Individual
Property delivered to Lender in connection with this Agreement does not fail to
reflect any material matter affecting such Individual Property or the title
thereto.

4.1.28 Inventory. Mortgage Borrower or Operating Lessee is the owner of all of
the Equipment, Fixtures and Personal Property located on or at each Individual
Property (except for any personal property owned by Manager pursuant to and in
accordance with the Management Agreement) and shall not lease any Equipment,
Fixtures or Personal Property other than as permitted hereunder. To each Loan
Party’s knowledge, all of the Equipment, Fixtures and Personal Property are
sufficient to operate the Properties in the manner required hereunder and in the
manner in which it is currently operated.

4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible
taxes or other amounts in the nature of transfer taxes required to be paid by
any Person under applicable Legal Requirements and Health Care Requirements have
been paid. All mortgage, mortgage recording, stamp, intangible or other similar
tax required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgages, have been paid. If at any time
Lender determines based on applicable law, that Lender is not being afforded the
maximum amount of security available from any one or more of the Properties as a
direct or indirect result of applicable taxes not having been paid with respect
to any Individual Property, Borrower agrees that Borrower will execute,
acknowledge and deliver to Lender, immediately upon Lender’s request,
supplemental affidavits and/or mortgage(s) increasing the amount of the Debt
attributable to any such Individual Property (as set forth as the Release Amount
on Schedule V annexed hereto) for which all applicable taxes have been paid to
an amount determined by Lender, and Borrower shall, on demand, pay any
additional taxes.

4.1.30 Special Purpose Entity/Separateness. (a) Until the Debt has been paid in
full, each Loan Party and any Principal hereby represents, warrants and
covenants that each Loan Party is, shall be and shall continue to be a Special
Purpose Entity.

(b) The representations, warranties and covenants set forth in Section (a) shall
survive for so long as any amount remains payable to Lender under this Agreement
or any other Loan Document.

 

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(c) Any and all of the stated facts and assumptions made about it in any
Insolvency Opinion, including, but not limited to, any exhibits attached
thereto, will have been and shall be true and correct in all respects, and each
Loan Party will have complied and will comply with all of the stated facts and
assumptions made with respect to it in any Insolvency Opinion. Each Loan Party
covenants that in connection with any Additional Insolvency Opinion delivered in
connection with this Agreement it shall provide an updated certification
regarding compliance with the facts and assumptions made about it therein.

(d) Each Loan Party covenants and agrees that (i) it shall provide Lender with
five (5) Business Days’ written notice prior to the removal of an Independent
Director of Borrower or any Loan Party, and (ii) no Independent Director shall
be removed other than for Cause.

(e) The Organizational Documents for each Individual Borrower, each Loan Party
and Principal that is a Delaware limited liability company shall provide that
except for duties to such Loan Party as set forth in the Organizational
Documents (including duties to the member and such Loan Party’s creditors solely
to the extent of their respective economic interests in such Loan Party, but
excluding (i) all other interests of the member, (ii) the interests of other
Affiliates of such Loan Party and (iii) the interests of any group of Affiliates
of which such Loan Party is a part), the Independent Directors shall not have
any fiduciary duties to the member, any officer or any other Person bound by the
applicable Loan Party’s or Principal’s Organizational Documents; provided,
however, the foregoing shall not eliminate the implied contractual covenant of
good faith and fair dealing. The Organizational Documents for each Loan Party
and Principal that is a Delaware Limited Liability Company shall provide that to
the fullest extent permitted by law, including Section 18-1101(e) of the
Delaware Limited Liability Company Act, an Independent Director shall not be
liable to Loan Party, the member or any other Person bound by the applicable
Loan Party’s or Principal’s Organizational Documents for breach of contract or
breach of duties (including fiduciary duties), unless the Independent Director
acted in bad faith or engaged in willful misconduct. The Organizational
Documents for each Loan Party and Principal that is a Delaware Limited Liability
Company shall provide that all right, power and authority of the Independent
Directors shall be limited to the extent necessary to exercise those rights and
perform those duties specifically set forth in the applicable Loan Party’s or
Principal’s Organizational Documents. The Organizational Documents for each Loan
Party and Principal that is a Delaware Limited Liability Company shall provide
that notwithstanding any other provision of the applicable Loan Party’s or
Principal’s Organizational Documents to the contrary, each Independent Director,
in its capacity as an Independent Director, may only act, vote or otherwise
participate in those matters referred to in Section 6(b) of the applicable Loan
Party’s or Principal’s Organizational Documents or as otherwise specifically
required by the applicable Organizational Documents, and such Independent
Director’s act, vote or other participation shall not be required for the
validity of any action taken by the board of directors of such Loan Party or
Principal unless, pursuant to the provisions of Section 6(b) or as otherwise
specifically provided in the applicable Organizational Documents, such action
would be invalid in the absence of the affirmative vote or consent of such
Independent Director.

 

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(f) Each Loan Party each hereby represents with respect to itself that any
amendment or restatement of any organizational document has been accomplished in
accordance with, and was permitted by, the relevant provisions of such document
prior to its amendment or restatement from time to time.

(g) Each Loan Party each hereby represents that from the date of its formation
to the date hereof:

(i) its business has been limited solely to acquiring, owning, holding and
financing the Interests and transacting any and all lawful business that was
incident, necessary and appropriate to accomplish the foregoing;

(ii) it has not engaged in any business other than as set forth in (i) above,
and transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing;

(iii) it has not entered into any contract or agreement with any of its
Affiliates, constituents, or owners, or any guarantors of any of their
respective obligations, or any Affiliate of any of the foregoing, except upon
terms and conditions that are commercially reasonable and substantially similar
to those available in an arm’s-length transaction with an unrelated party, or as
may otherwise have been expressly permitted pursuant to the terms of any prior
financings;

(iv) it has not (a) made any loans or other extensions of credit to any Person
or (b) acquired or held evidence of indebtedness issued by any other Person or
entity, in either of the case of (a) or (b), other than cash and
investment-grade securities issued by an entity that is not an Affiliate of or
subject to common ownership with such entity;

(v) it has paid its debts and liabilities from its assets as the same have
become due or such debts and liabilities have been repaid or discharged as of
the date hereof;

(vi) it has done or caused to be done all things necessary to observe
organizational formalities and preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises;

(vii) it has maintained all of its books, records, financial statements and bank
accounts separate from those of any other Person and each Loan Party’s, and, to
the extent applicable, assets have not been listed as assets on the financial
statement of any other Person. Each Loan Party, to the extent applicable, has
filed its own tax returns (except to the extent that it has been a
tax-disregarded entity not required to file tax returns under applicable law).
Each Loan Party has maintained its books, records, resolutions and agreements;

(viii) it has been, and at all times has held itself out to the public as, a
legal entity separate and distinct from any other Person (including any
Affiliate or other constituents, or owners, or any guarantors of any of their
respective obligations, or any Affiliate of any of the foregoing), has corrected
any known misunderstanding regarding its status as a separate entity, has
conducted its business in its own name, has not identified itself or any of its
Affiliates as a division or part of the other and has maintained and utilized,
to the extent reasonably necessary in the operation of its business, separate
stationery, invoices and checks;

 

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(ix) except with respect to co-borrowers under prior financings that have been
repaid or otherwise discharged or that will be repaid or otherwise discharged as
of the closing of the Loan, it has not commingled its assets with those of any
other Person and has held all of its assets in its own name;

(x) except with respect to co-borrowers under prior financings that have been
repaid or otherwise discharged or that will be repaid or otherwise discharged as
of the closing of the Loan, it has not guaranteed or become obligated for the
debts of any other Person and has not held itself out as being responsible for
the debts or obligations of any other Person;

(xi) it has allocated fairly and reasonably any overhead expenses that have been
shared with an Affiliate, including paying for office space and services
performed by any employee of an Affiliate or any of constituents, or owners, or
any guarantors of any of their respective obligations, or any Affiliate of any
of the foregoing;

(xii) except to Lender in connection with the Loan, it has not granted a
security interest or lien in, to or upon, or pledged or otherwise encumbered any
of its assets to secure the obligations for the benefit of any other Person
other than with respect to loans secured by the Interests and no such security
interest, lien, pledge or other encumbrance remains outstanding except in
connection with the Loan with respect to the obligations or the other Loan
Parties;

(xiii) it has maintained adequate capital in light of its contemplated business
operations;

(xiv) to the extent it has any employees, it has paid the salaries of its own
employees from its own funds, as distinguished from the funds and assets of
another Person;

(xv) it has not owned any subsidiary or any equity interest in any other Person,
except for its respective Subsidiaries;

(xvi) it has not made loans to any other person that have not been released or
discharged nor has it bought or held evidence of indebtedness issued by any
other person or entity (other than cash and investment-grade securities issued
by an entity that is not an Affiliate of or subject to common ownership with
such entity) other than Permitted Investments;

(xvii) it has not incurred any Indebtedness that is still outstanding other than
Indebtedness that is permitted under the Loan Documents;

(xviii) it is not now, nor has ever been, party to any lawsuit, arbitration,
summons, or legal proceeding that is still pending and not covered by insurance
or that resulted in a judgment against it that is due and has not been paid in
full;

 

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(xix) it has no material contingent or actual obligations not related to the
Interests;

(xx) it is and has since its formation been duly formed, validly existing, and
in good standing in the state of its formation and in all other jurisdictions
where it is qualified to do business;

(xxi) it has not had any of its obligations guaranteed by an Affiliate, except
for any guarantees, indemnities, and environmental indemnities with respect to
prior loans that have been paid in full prior to the date hereof;

(xxii) intentionally omitted;

(xxiii) has no judgments or liens of any nature against it except for tax liens
not yet delinquent as set forth in the Title Insurance Policy;

(xxiv) is in compliance in all material respects with all laws, regulations, and
orders applicable to it and, except as otherwise disclosed in this Agreement,
has received all material permits necessary for it to operate;

(xxv) is not involved in any material dispute with any taxing authority;

(xxvi) has paid all material taxes which it owes except as permitted pursuant to
this Agreement;

(xxvii) has no material contingent or actual obligations not related to the
Interests; and

(xxviii) has provided Lender with complete financial statements that reflect a
fair and accurate view of the entity’s financial condition.

4.1.31 Management Agreement. Each Management Agreement is in full force and
effect and there is no default thereunder by any party thereto and, to the
knowledge of the Loan Parties, no event has occurred that, with the passage of
time and/or the giving of notice would constitute a default thereunder. Each
Management Agreement was entered into on commercially reasonable terms.

4.1.32 Illegal Activity. No portion of any Individual Property has been
purchased with proceeds of any illegal activity.

4.1.33 No Change in Facts or Circumstances; Disclosure. All information
submitted by and on behalf of Borrower or Mortgage Borrower to Lender and in all
financial statements, rent rolls (including the rent roll attached hereto as
Schedule II-A), reports, certificates and other documents submitted in
connection with the Loan or in satisfaction of the terms thereof and all
statements of fact made by each Loan Party in this Agreement or in any other
Loan Document, are true, complete and correct in all material respects. To the
knowledge of the Loan Parties, there has been no material adverse change in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise

 

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misleading in any material respect or that otherwise materially and adversely
affects or is reasonably likely to result in a Material Adverse Effect. Each
Loan Party has disclosed to Lender all material facts known to such Loan Party
and has not failed to disclose any material fact known to such Loan Party that
could cause any Provided Information or representation or warranty made herein
to be materially misleading.

4.1.34 Investment Company Act. No Loan Party or Mortgage Loan Party is (a) an
“investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended; (b) a
“holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 2005, as amended; or
(c) subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.

4.1.35 Embargoed Person. As of the date hereof and at all times throughout the
term of the Loan, including after giving effect to any Transfers permitted
pursuant to the Loan Documents, (a) none of the funds or other assets of
Borrower, any Loan Party, Mortgage Borrower, any Mortgage Loan Party and
Guarantor constitute property of, or are beneficially owned, directly or
indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest of
any nature whatsoever in Borrower, any Loan Party, Mortgage Borrower, any Loan
Party or Guarantor, as applicable, with the result that the investment in
Borrower, Mortgage Borrower or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and
(c) none of the funds of Borrower, any Loan Party, Mortgage Borrower, any
Mortgage Loan Party or Guarantor, as applicable, have been derived from any
unlawful activity with the result that the investment in Borrower, any Loan
Party, Mortgage Borrower, Mortgage Loan Party or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law.

4.1.36 Principal Place of Business; State of Organization. Each Loan Party’s
principal place of business as of the date hereof is the address set forth in
the introductory paragraph of this Agreement. Each Loan Party is organized under
the laws of the State of Delaware and its organizational identification number
is as set forth on Schedule I opposite such Loan Party’s name.

4.1.37 Environmental Representations and Warranties. Except as otherwise
disclosed by that certain Phase I environmental report (or Phase II
environmental report, if required) delivered to Lender by Borrower in connection
with the origination of the Loan (such report is referred to below as the
“Environmental Report”), to each Loan Party’s knowledge, (a) there are no
Hazardous Substances or underground storage tanks in, on, or under any
Individual Property, except those that are (i) in compliance with Environmental
Laws and with permits issued pursuant thereto (to the extent such permits are
required under Environmental Law), (ii) de-minimis amounts necessary to operate
each Individual Property for the purposes set forth in the Loan Agreement which
will not result in an environmental condition in, on or under any Individual
Property and which are otherwise permitted under and used in compliance with
Environmental Law and (iii) fully disclosed to Lender in writing pursuant the
Environmental Report; (b) there are no past, present or threatened Releases of
Hazardous Substances in, on, under or from any Individual Property which has not
been fully remediated in

 

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accordance with Environmental Law; (c) there is no threat of any Release of
Hazardous Substances migrating to any Individual Property; (d) there is no past
or present non-compliance with Environmental Laws, or with permits issued
pursuant thereto, in connection with any Individual Property which has not been
fully remediated in accordance with Environmental Law; (e) no Loan Party knows
of, and has not received, any written or oral notice or other communication from
any Person (including but not limited to a Governmental Authority) relating to
Hazardous Substances or Remediation thereof, of possible liability of any Person
pursuant to any Environmental Law, other environmental conditions in connection
with any Individual Property, or any actual or potential administrative or
judicial proceedings in connection with any of the foregoing; and (f) each Loan
Party has truthfully and fully disclosed provided to Lender, in writing, any and
all information relating to environmental conditions in, on, under or from the
Properties that is known to Loan Party and has provided to Lender all
information that is contained in Loan Party’s files and records, including, but
not limited to, any reports relating to Hazardous Substances in, on, under or
from the Properties and/or to the environmental condition of the Properties.

4.1.38 Cash Management Account. Each Loan Party hereby represents and warrants
to Lender that:

(a) Other than in connection with the Mortgage Loan Documents and except for
Permitted Encumbrances, neither Mortgage Borrower nor any other Mortgage Loan
Party has sold, pledged, transferred or otherwise conveyed the Lockbox Account
and the Cash Management Account;

(b) Each of the Lockbox Account and the Cash Management Account constitutes
“deposit accounts” and/or “securities accounts” within the meaning of the
Uniform Commercial Code of the State of New York);

(c) Pursuant and subject to the terms hereof and the other applicable Loan
Documents, the Lockbox Bank and Agent have agreed to comply with all
instructions originated by Mortgage Lender, without further consent by Mortgage
Borrower or any Mortgage Loan Party, directing disposition of the Lockbox
Account and the Cash Management Account and all sums at any time held, deposited
or invested therein, together with any interest or other earnings thereon, and
all proceeds thereof (including proceeds of sales and other dispositions),
whether accounts, general intangibles, chattel paper, deposit accounts,
instruments, documents or securities; and

(d) The Lockbox Account and Cash Management Account are not in the name of any
Person other than Operating Lessee or Mortgage Borrower, as pledgor, or Mortgage
Lender, as pledgee. Neither Mortgage Borrower nor any other Mortgage Loan Party
has consented to the Lockbox Bank and Agent complying with instructions with
respect to the Lockbox Account and the Cash Management Account from any Person
other than Lender.

(e) The Property is not subject to any cash management system (other than
pursuant to the Loan Documents), and any and all existing tenant instruction
letters directing deposits into any account other than the Lockbox Account have
been duly terminated prior to the date hereof.

 

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4.1.39 Taxes. No Loan Party is subject to U.S. federal income tax on a net
income basis. Each Loan Party has timely filed or caused to be filed all U.S.
federal income and other material tax returns and reports required to have been
filed by it and has timely paid or caused to be paid all U.S. federal income and
other material Section 2.7 Taxes required to have been paid by it, except for
(a) any such Section 2.7 Taxes that are being contested in good faith by
appropriate proceedings and for which the applicable Loan Party has set aside on
its books adequate reserves in accordance with GAAP, and (b) Taxes and Other
Charges, the payment of which shall be governed by Section 5.1.2 and Section 7.2
hereof.

4.1.40 Ground Lease. Borrower hereby represents and warrants to Lender the
following with respect to each Ground Lease:

(a) The Ground Lease or a memorandum of the Ground Lease has been duly recorded.
The Ground Lease permits the interest of the Individual Mortgage Borrower
thereunder to be encumbered by a mortgage and the Collateral to be pledged or
the Ground Lessor has approved and consented to the encumbrance of the Ground
Lease Property by the applicable Mortgage and the Pledge Agreement. There have
not been amendments or modifications to the terms of the Ground Lease since
recordation of the Ground Lease (or a memorandum thereof), with the exception of
written instruments which have been recorded or as disclosed to Lender in this
Agreement.

(b) The Ground Lease may not be terminated, surrendered or amended without the
prior written consent of Lender and Mortgage Lender; provided that the Ground
Lessor shall not be prevented from exercising its remedies in accordance with
the Ground Lease if the obligations of Mortgage Borrower under the Ground Lease
are not performed as provided in the Ground Lease.

(c) Except for the Permitted Encumbrances and other encumbrances of record,
Mortgage Borrower’s interest in the Ground Lease is not subject to any Liens or
encumbrances superior to, or of equal priority with, the applicable Mortgage
other than the Ground Lessor’s related fee interest.

(d) Mortgage Borrower’s interest in the Ground Lease and Borrower’s interest in
Mortgage Borrower is assignable without the consent of the Ground Lessor to
Mortgage Lender or Lender, as applicable, the purchaser at any foreclosure sale
or the transferee under a deed or assignment in lieu of foreclosure in
connection with the foreclosure of the Lien of the Mortgage or Pledge Agreement,
as applicable, or transfer of Mortgage Borrower’s leasehold estate or Borrower
interest in the Collateral by deed or assignment in lieu of foreclosure.
Thereafter, the Ground Lease is further assignable by such transferee and its
successors and assigns without the consent of the Ground Lessor.

(e) As of the date hereof, the Ground Lease is in full force and effect and no
default has occurred on the part of the Mortgage Borrower under the Ground
Lease, nor to Borrower’s knowledge has any default occurred by the Ground Lessor
under such Ground Lease (except in each case, any such default that has been
previously cured). There is no existing condition which, but for the passage of
time or the giving of notice, could result in a default by the Mortgage Borrower
or Ground Lessor under the terms of such Ground Lease.

 

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(f) Under the terms of the Ground Lease and the Loan Documents, taken together,
any related insurance and condemnation proceeds that are paid or awarded to
Mortgage Borrower with respect to the leasehold interest will be applied either
to the repair or restoration of all or part of the Ground Lease Property, with
Mortgage Lender having the right subject to the terms of the Loan Documents to
hold and disburse the proceeds as the repair or restoration progresses, or to
the payment of the outstanding principal balance of the Loan together with any
accrued interest thereon.

(g) The Ground Lease requires the Ground Lessor to give notice of any default by
Mortgage Borrower to Lender prior to exercising its remedies thereunder.

(h) Lender is permitted the opportunity to cure any default under the Ground
Lease, which is curable after the receipt of notice of the default before the
Ground Lessor thereunder may terminate the Ground Lease.

(i) The Ground Lease has a term which extends not less than twenty (20) years
beyond the Maturity Date (including any unexercised option periods and automatic
renewal periods).

(j) the Ground Lease requires the Ground Lessor to enter into a new lease upon
termination (prior to expiration of the term thereof) of the Ground Lease for
any reason, including rejection or disaffirmation of the Ground Lease in a
bankruptcy proceeding.

4.1.41 Operating Lease. The Operating Lease is in full force and effect and
there is no default, breach or violation existing thereunder by Mortgage
Borrower or Operating Lessee and no event has occurred that, with the passage of
time or the giving of notice, or both, would constitute a default, breach or
violation by any party thereunder. The terms and provisions of the Operating
Lease are subordinate to this Agreement and the Pledge Agreement. Neither the
execution and delivery of the Loan Documents, Borrower’s performance thereunder,
nor the exercise of any remedies by Lender, will adversely affect Mortgage
Borrower’s rights under the Operating Lease.

4.1.42 Residency Agreement. (a) The Properties are not subject to any Residency
Agreement other than the Residency Agreements set forth on the rent roll on
Schedule II-A attached hereto and made a part hereof, which Schedule II-A is
true, complete and accurate in all respects as of the Closing Date. Operating
Lessee holds lessor’s interest in the Residency Agreement. No Person has any
possessory interest in any Individual Property or right to occupy the same
except under and pursuant to the provisions of the Residency Agreements, the
Management Agreements, the Operating Lease and the Commercial Leases. The
current Residency Agreements are in full force and effect and there are no
defaults thereunder that would be reasonably expected to result in a Material
Adverse Effect on any Individual Property. No Rent has been paid more than one
(1) month in advance of its due date. All security deposits are held by Mortgage
Borrower in accordance with applicable Legal Requirements. There has been no
prior sale, transfer or assignment, hypothecation or pledge of any Residency
Agreements or of the Rents received therein which is outstanding. To the
knowledge of the Loan Party, no resident listed on Schedule II-A has assigned
its Residency Agreement or sublet all or any portion of the premises demised
thereby, no such resident holds its Unit under assignment or

 

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sublease, nor does anyone except such resident such Unit. No resident under any
Residency Agreement has a right or option pursuant to such Residency Agreement
or otherwise to purchase all or any part of the Unit or the building of which
the Unit is a part. No resident under any Residency Agreement has any right or
option for additional space in the Improvements.

4.1.43 Third-Party Payors’ Programs. No Loan Party or Mortgage Loan Party
receives any revenues from Medicaid, Medicare, Blue Cross and/or Blue Shield or
any other similar governmental insurance program.

4.1.44 Labor Matters. None Mortgage Borrower, Operating Lessee, Borrower or any
Loan Party has any employees and is not a party to any collective bargaining
agreements.

4.1.45 No Contractual Obligations. No Loan Party (a) is currently bound by any
Contractual Obligations other than the Loan Documents, the Borrower Operating
Agreements, the Leasehold Pledgor Company Agreements, the Operating Lessee
Company Agreements or the Mortgage Borrower Company Agreements, as applicable,
and (b) has any outstanding Indebtedness other than the Loan and other
Indebtedness permitted by this Agreement or the other Loan Documents.

4.1.46 Mortgage Loan Representations. All of the representations and warranties
contained in the Mortgage Loan Documents are true and correct as of the date
made thereunder without regard to any amendment, waiver or termination of the
Mortgage Loan Documents and are hereby incorporated into this Agreement and
deemed made hereunder by Borrower with respect to the Individual Mortgage
Borrower and Operating Lessee by Leasehold Pledgor, and the Individual Property
owned or leased by such Individual Mortgage Borrower or Operating Lessee, as
applicable, as and when made under the Mortgage Loan Documents, and shall remain
so incorporated as and when made thereunder without regard to any waiver,
amendment or other modification thereof by the Mortgage Lender or to whether the
related Mortgage Loan Document has been repaid or otherwise terminated unless
otherwise consented to in writing by Lender.

Section 4.2 Survival of Representations. Each Loan Party agrees that all of the
representations and warranties of any Loan Party set forth in Section 4.1 hereof
and elsewhere in this Agreement and in the other Loan Documents shall survive
for so long as any amount remains owing to Lender under this Agreement or any of
the other Loan Documents by any Loan Party. All representations, warranties,
covenants and agreements made in this Agreement or in the other Loan Documents
by any Loan Party shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.

ARTICLE V – BORROWER COVENANTS

Section 5.1 Affirmative Covenants. From the date hereof and until payment and
performance in full of all obligations of any Loan Party under the Loan
Documents or the earlier release of the Lien of the Pledge Agreement encumbering
the Collateral (and all related obligations) in accordance with the terms of
this Agreement and the other Loan Documents, Borrower hereby covenants and
agrees with Lender that:

 

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5.1.1 Existence; Compliance with Legal Requirements. Each Loan Party shall do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its existence, rights, licenses, permits and franchises and shall
comply, and cause Mortgage Borrower and Operating Lessee to comply with all
Legal Requirements applicable to it, the Collateral and the Properties,
including, without limitation, all Health Care Requirements, building and zoning
codes and certificates of occupancy. There shall never be committed by any Loan
Party or any Affiliate or agent of any Loan Party, and Loan Party shall not
permit any Mortgage Loan Party to, and shall use commercially reasonable efforts
to ensure that no other Person in occupancy of or involved with the operation or
use of the Properties to commit any act or omission affording the federal
government or any state or local government the right of forfeiture against the
Collateral, any Individual Property or any part thereof or any monies paid in
performance of Loan Party’s obligations under any of the Loan Documents. Each
Loan Party hereby covenants and agrees not to commit, permit or suffer and shall
not permit any Mortgage Loan Party to commit, permit or suffer to exist any act
or omission affording such right of forfeiture. Each Loan Party shall, and shall
cause each Mortgage Loan Party to, at all times maintain, preserve and protect
all franchises and trade names and preserve all the remainder of its property
used or useful in the conduct of its business and shall keep the Properties in
good working order and repair, and from time to time make, or cause to be made,
all reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided in the Loan Documents and the
Mortgage Loan Documents. Each Loan Party shall keep, or shall cause each
Mortgage Loan Party to keep, the Properties insured at all times by financially
sound and reputable insurers, to such extent and against such risks, and
maintain liability and such other insurance, as is more fully provided in this
Agreement and the Mortgage Loan Agreement. After prior written notice to Lender,
Borrower, at Borrower’s own expense, may, or may permit Mortgage Borrower to,
contest by appropriate legal proceeding promptly initiated and conducted in good
faith and with due diligence, the validity of any Legal Requirement, the
applicability of any Legal Requirement to Borrower, Mortgage Borrower or any
Individual Property or any alleged violation of any Legal Requirement, provided
that (i) no Default or Event of Default has occurred and remains uncured;
(ii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any instrument to which Borrower and Mortgage Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) no Individual Property nor the Collateral nor any part thereof or interest
therein will be in imminent danger of being sold, forfeited, terminated,
cancelled or lost; (iv) Borrower shall, and shall cause Mortgage Borrower to,
promptly upon final determination thereof comply with any such Legal Requirement
determined to be valid or applicable or cure any violation of any Legal
Requirement; (v) such proceeding shall suspend the enforcement of the contested
Legal Requirement against Borrower, Mortgage Borrower, the Collateral or any
Individual Property; and (vi) either (A) in the case of any contest related to
Mortgage Borrower or an Individual Property, Borrower shall cause Mortgage
Borrower to furnish to Mortgage Lender such security as may be required pursuant
to the Mortgage Loan Agreement, or if Mortgage Lender shall have waived in
writing the requirement to deposit such security, upon reasonable request of
Lender, Borrower shall furnish such security to Lender or (B) in the case of any
contest related to Borrower or the Collateral, in the event the amount
reasonably determined to

 

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be necessary to cause compliance with such Legal Requirements is equal to or
greater than Five Hundred and No/100 Dollars ($500,000.00), Borrower shall
furnish such security as may be required in the proceeding, or as may be
requested by Lender, to insure compliance with such Legal Requirement, together
with all interest and penalties payable in connection therewith. Lender may
apply any such security, as necessary to cause compliance with such Legal
Requirement at any time when, in the reasonable judgment of Lender, the
validity, applicability or violation of such Legal Requirement is finally
established or any Individual Property or any of the Collateral (or any part
thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost.

5.1.2 Taxes and Other Charges. Each Loan Party shall pay or cause each Mortgage
Loan Party to pay all Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Properties or any part thereof as the same
become due and payable; provided, however, Loan Party’s obligation to cause
Mortgage Loan Party to directly pay Taxes shall be suspended for so long as
Mortgage Borrower complies with the terms and provisions of Section 7.2 of the
Mortgage Loan Agreement. Loan Party will deliver to Lender receipts for payment
or other evidence satisfactory to Lender that the Taxes and Other Charges have
been so paid or are not then delinquent no later than ten (10) days prior to the
date on which the Taxes and/or Other Charges would otherwise be delinquent if
not paid (provided, however, Borrower is not required to furnish such receipts
for payment of Taxes in the event that such Taxes have been paid by Mortgage
Lender pursuant to Section 7.2 of the Mortgage Loan Agreement. Except if a Loan
Party is contesting, or causing Mortgage Loan Party to contest, the same in
compliance with the terms and conditions of this Section 5.1.2 and this
Agreement and Section 5.1.2 of the Mortgage Loan Agreement and the Mortgage Loan
Agreement, Loan Party shall not suffer (or permit Mortgage Loan Party to suffer)
and shall promptly cause (or cause Mortgage Loan Party to cause) to be paid and
discharged any Lien or charge whatsoever which may be or become a Lien or charge
against the Properties or the Collateral, and shall promptly pay for all utility
services provided to the Properties. After prior written notice to Lender,
Borrower may cause Mortgage Borrower, at Borrower’s own expense, to contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity or application in whole or in part of
any Taxes or Other Charges, provided that (i) no Default or Event of Default has
occurred and remains uncured; (ii) such proceeding shall be permitted under and
be conducted in accordance with the provisions of any other instrument to which
Borrower or Mortgage Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) no Individual Property nor the
Collateral nor any part thereof or interest therein will be in imminent danger
of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall
promptly upon final determination thereof cause Mortgage Borrower to pay the
amount of any such Taxes or Other Charges, together with all costs, interest and
penalties which may be payable in connection therewith; (v) such proceeding
shall suspend the collection of such contested Taxes or Other Charges from the
applicable Individual Property; and (vi) Mortgage Borrower shall furnish such
security as may be required under the Mortgage Loan Agreement, or if Mortgage
Lender shall have waived such security, Borrower shall have furnished to Lender
such security as may be required in the proceeding, or as may be reasonably
requested by Lender, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon. Lender may pay over any such
cash deposit or part thereof held by Lender to the claimant entitled thereto at
any time when, in the judgment of Lender, the entitlement of such

 

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claimant is established or any Individual Property or the Collateral (or 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
Mortgage or the Pledge Agreement being primed by any related Lien.

5.1.3 Litigation. Each Loan Party shall give prompt written notice to Lender of
any litigation or governmental proceedings pending or, to each Loan Party’s
knowledge, threatened against Borrower, any Loan Party, Mortgage Borrower, any
Mortgage Loan Party and/or Guarantor which would reasonably be expected to
result in a Material Adverse Effect.

5.1.4 Access to the Properties. Each Loan Party shall, and shall cause Mortgage
Borrower to, permit agents, representatives and employees of Lender to inspect
the Properties or any part thereof during business hours upon reasonable advance
notice. subject to Legal Requirements and the rights of tenants, subtenants or
residents and accompanied by a representative of Borrower or Mortgage Borrower.

5.1.5 Notice of Default. Each Loan Party shall promptly advise Lender of any
material adverse change in Borrower’s, Mortgage Borrower’s, any Mortgage Loan
Party, any Loan Party’s or Guarantor’s condition, financial or otherwise, or of
the occurrence of any Default or Event of Default of which any Loan Party has
knowledge.

5.1.6 Cooperate in Legal Proceedings. Each Loan Party shall, and shall cause
each Mortgage Loan Party to, cooperate fully with Lender with respect to any
proceedings before any court, board or other Governmental Authority which may in
any way affect the rights of Lender hereunder or any rights obtained by Lender
under any of the other Loan Documents and, in connection therewith, permit
Lender, at its election, to participate in any such proceedings.

5.1.7 Perform Loan Documents. Each Loan Party shall, and shall cause Mortgage
Loan Party to, observe, perform and satisfy all the terms, provisions, covenants
and conditions of, and shall pay when due all costs, fees and expenses to the
extent required under the Loan Documents executed and delivered by, or
applicable to, such Loan Party.

5.1.8 Net Liquidation Proceeds After Debt Service.. Each Loan Party shall, and
shall cause each Mortgage Loan Party to, cooperate with Lender in obtaining for
Lender the benefits of any Net Liquidation Proceeds After Debt Service, and
Lender shall be reimbursed for any expenses incurred in connection therewith
(including reasonable attorneys’ fees and disbursements, and the payment by Loan
Party of the expense of an appraisal on behalf of Lender in case of Casualty or
Condemnation affecting any Individual Property or any part thereof) out of such
Insurance Proceeds.

5.1.9 Further Assurances. Each Loan Party shall, and shall cause each Mortgage
Loan Party to, at Loan Party’s sole cost and expense:

(a) upon request from Lender, furnish to Lender all instruments, documents,
boundary surveys, footing or foundation surveys, certificates, plans and
specifications, appraisals, title and other insurance reports and agreements,
and each and every other document, certificate, agreement and instrument
required to be furnished by Loan Party pursuant to the terms of the Loan
Documents and by Mortgage Loan Party to Mortgage Lender pursuant to the terms of
the Mortgage Loan Documents or which are reasonably requested by Lender in
connection therewith;

 

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(b) upon request from Lender, execute and deliver to Lender such documents,
instruments, certificates, assignments and other writings, and do such other
acts necessary or desirable, to evidence, preserve and/or protect the Collateral
at any time securing or intended to secure the obligations of Loan Party under
the Loan Documents, as Lender may reasonably require; and

(c) do and execute all and such further lawful and reasonable acts, conveyances
and assurances reasonably necessary for carrying out of the intents and purposes
of this Agreement and the other Loan Documents, as Lender shall reasonably
require from time to time.

5.1.10 Principal Place of Business, State of Organization. No Loan Party will
cause or permit any, or cause or permit any Mortgage Loan Party to, change to be
made in its name, identity (including its trade name or names), place of
organization or formation (as set forth in Section 4.1.36 hereof or
Section 4.1.36 of the Mortgage Loan Agreement) or Borrower’s limited liability
company or other structure or Mortgage Borrower’s limited liability company or
limited partnership or other structure (except as permitted pursuant to
Section 5.2.10 hereof and Section 5.1.20 of the Mortgage Loan Agreement);
provided, that with respect to a change of name only, a Loan Party shall be
permitted to make such change if such Loan Party shall have first notified
Lender in writing of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken all action required by
Lender for the purpose of perfecting or protecting the lien and security
interests of Lender pursuant to this Agreement, and the other Loan Documents. No
Loan Party shall change, or cause or permit any Mortgage Loan Party to change,
its organizational structure or place of organization without first obtaining
the prior written consent of Lender, which consent may be given or denied in
Lender’s sole discretion. Upon Lender’s request, Loan Party shall, at Loan
Party’s sole cost and expense, execute and deliver additional security
agreements and other instruments which may be necessary to effectively evidence
or perfect Lender’s security interest in the Collateral as a result of such
change of principal place of business or place of organization approved in
accordance with the foregoing sentence. Loan Party’s principal place of business
and chief executive office, and the place where Loan Party keeps its books and
records, including recorded data of any kind or nature, regardless of the medium
or recording, including software, writings, plans, specifications and
schematics, has been for the preceding four months (or, if less, the entire
period of the existence of such Loan Party) and will continue to be the address
of such Loan Party set forth at the introductory paragraph of this Agreement. No
Loan Party shall change its organizational identification number. If a Loan
Party does not now have an organizational identification number and later
obtains one, such Loan Party promptly shall notify Lender of such organizational
identification number.

5.1.11 Financial Reporting. (a) Each Loan Party will keep and maintain or will
cause to be kept and maintained on a Fiscal Year basis, in accordance with the
requirements for a Special Purpose Entity set forth herein and GAAP (or such
other accounting basis acceptable to Lender), proper and accurate books, records
and accounts reflecting all of the

 

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financial affairs of such Loan Party and the Mortgage Loan Parties in which it
owns an interest, and all items of income and expense in connection with the
operation on an individual basis of the Properties and the Collateral. Lender
shall have the right from time to time at all times during normal business hours
upon reasonable prior written notice and accompanied by a representative of the
Loan Parties to examine such books, records and accounts at the office of
Borrower or any other Person maintaining such books, records and accounts and to
make such copies or extracts thereof as Lender shall desire. After the
occurrence of an Event of Default, Borrower shall pay any reasonable costs and
expenses incurred by Lender to examine Borrower’s accounting records with
respect to the Properties and the Collateral, as Lender shall reasonably
determine to be necessary or appropriate in the protection of Lender’s interest.

(b) Each Loan Party will furnish, and cause Mortgage Loan Party to furnish, to
Lender annually, within ninety (90) days following the end of each Fiscal Year
of Loan Party, a complete copy of Loan Party’s and Mortgage Loan Party’s annual
financial statements in accordance with GAAP (or such other accounting basis
acceptable to Lender) covering the Properties and the Collateral on a combined
basis as well as each Individual Property for such Fiscal Year and containing
statements of profit and loss for Loan Party and Mortgage Loan Party and the
Properties and the Collateral and a balance sheet for Loan Party and Mortgage
Loan Party, certified by an officer of Borrower, provided, in the event the
audited financial statements of Guarantor are not delivered in accordance with
Section 5.1.11(h) below, audited by an independent certified public accountant.
Such statements shall set forth the financial condition and the results of
operations for the Properties for such Fiscal Year, and shall include, but not
be limited to, amounts representing annual net operating income, gross income,
and operating expenses.

(c) Each Loan Party will furnish, and cause Mortgage Loan Party to furnish, or
cause to be furnished, to Lender on or before forty-five (45) days after the end
of each calendar quarter (commencing at the conclusion of the first full
calendar quarter following the Closing Date) the following items, accompanied by
an Officer’s Certificate stating that such items are true, correct, accurate,
and complete and fairly present the financial condition and results of the
operations of Loan Party, Mortgage Loan Party, the Collateral and the Properties
on a combined basis as well as each Individual Property (subject to normal
year-end adjustments) as applicable: (i) a rent roll for the subject quarter
with resident occupancy information; (ii) quarterly and year-to-date operating
statements prepared for each calendar quarter, noting net operating income,
gross income, and operating expenses (not including any contributions to the
Replacement Reserve Fund and the Required Repair Fund), and other information
necessary and sufficient to fairly represent the financial position and results
of operation of the Properties and the Collateral during such calendar quarter;
and (iii) a calculation reflecting the Debt Yield as of the last day of such
calendar quarter, subject to verification by Lender. In addition, such
certificate shall also be accompanied by an Officer’s Certificate stating that
the representations and warranties of each Loan Party set forth in
Section 4.1.30 are true and correct as of the date of such certificate.

(d) For the partial year period commencing on the date hereof, and for each
Fiscal Year thereafter, Borrower shall submit, or cause Mortgage Loan Party to
submit, to Lender an Annual Budget not later than thirty (30) days prior to the
commencement of such period or Fiscal Year in form reasonably satisfactory to
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Cash Sweep Period, to the extent the Borrower is required to submit an Annual
Budget to Lender pursuant to the first sentence of this clause (d), such Annual
Budget shall be subject to Lender’s written approval (each such Annual Budget,
together with each Annual Budget that Lender does not have the right to approve
hereunder, an “Approved Annual Budget”), provided, any modifications or
adjustments to an Approved Annual Budget during a Cash Sweep Period shall be
subject to the Lender’s prior approval. In the event that Lender objects to a
proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of
such objections within fifteen (15) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower
shall promptly revise such Annual Budget and resubmit the same to Lender. Lender
shall advise Borrower of any objections to such revised Annual Budget within ten
(10) days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall promptly revise the same in
accordance with the process described in this subsection until Lender approves
the Annual Budget. Until such time that Lender approves a proposed Annual
Budget, the most recently Approved Annual Budget shall apply; provided that,
such Approved Annual Budget shall be adjusted to reflect actual increases in
Taxes, Insurance Premiums and Other Charges. In the event of a Cash Sweep Period
shall commence after an Approved Annual Budget has been approved or deemed
approved hereunder, Borrower shall not be required to submit such Approved
Annual Budget for approval, provided, any modifications or adjustments thereto
during a Cash Sweep Period shall be subject to the Lender’s prior approval.

(e) During the continuance of a Cash Sweep Period, in the event that Borrower or
any Loan Party must incur an extraordinary operating expense or capital expense
not set forth in the Approved Annual Budget (each an “Extraordinary Expense”),
then Borrower shall promptly deliver to Lender a reasonably detailed explanation
of such proposed Extraordinary Expense for Lender’s approval, which may be given
or denied in Lender’s sole discretion.

(f) Loan Party shall furnish, and cause Mortgage Loan Party to furnish, to
Lender, within ten (10) Business Days after request (or as soon thereafter as
may be reasonably possible), such further detailed information with respect to
the operation of the Properties, the Collateral and the financial affairs of
Loan Party and Mortgage Loan Party as may be reasonably requested by Lender.

(g) Intentionally Omitted.

(h) Borrower will cause Guarantor to furnish to Lender annually, within one
hundred twenty (120) days following the end of each Fiscal Year of Guarantor,
financial statements audited by an independent certified public accountant,
which shall include an annual balance sheet and profit and loss statement of
Guarantor, in the form reasonably required by Lender, provided, that so long as
Guarantor is a Public Vehicle, Guarantor shall not be required to furnish such
financial statements to Lender.

(i) Any reports, statements or other information required to be delivered under
this Agreement shall be delivered (i) via email with report files in electronic
form of Microsoft Word, Microsoft Excel or .pdf format, (ii) or, if requested by
Lender, in paper form, and/or (iii) or if requested by Lender, on a compact
disc. Borrower agrees that Lender may disclose information regarding the
Properties and Borrower that is provided to Lender pursuant to this
Section 5.1.11 in connection with the Secondary Market Transaction to such
parties requesting such information in connection with such Secondary Market
Transaction.

 

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5.1.12 Business and Operations. Each Loan Party shall, and shall cause each
Mortgage Loan Party to, continue to engage in the businesses presently conducted
by it as and to the extent the same are necessary for the ownership,
maintenance, management and operation of the Properties and/or Collateral, as
applicable. Each Loan Party will, and shall cause each Mortgage Loan Party to,
qualify to do business and will remain in good standing under the laws of each
jurisdiction of its formation as and to the extent the same are required for the
ownership, maintenance, management and operation of the Properties and/or the
Collateral, as applicable. Each Loan Party shall, and shall cause each Mortgage
Loan Party to, and Loan Party shall, and shall cause each Mortgage Loan Party
to, cause Holiday Manager to, at all times during the term of the Loan, subject
to the terms of the Operating Lease, continue to own or lease all of the
Equipment, Fixtures and Personal Property which are necessary to operate the
Properties in a manner consistent with the requirements of the Management
Agreement.

5.1.13 Title to the Properties. Each Loan Party shall, and shall cause each
Mortgage Loan Party to, warrant and defend (a) the title to the each Individual
Property and every part thereof, subject only to Liens permitted hereunder
(including Permitted Encumbrances) and (b) the validity and priority of the
Liens of the Mortgages on the Properties, subject only to Liens permitted
hereunder (including Permitted Encumbrances), in each case against the claims of
all Persons whomsoever. Borrower shall reimburse Lender for any losses, costs,
damages or expenses (including reasonable attorneys’ fees and expenses) incurred
by Lender if an interest in any Individual Property, other than as permitted
hereunder, is claimed by another Person, unless the same has been paid or
reimbursed by the Title Company under the Title Policy.

5.1.14 Costs of Enforcement. In the event (a) that Lender exercises any or all
of its rights or remedies under the Pledge Agreement or any other Loan Documents
as and when permitted thereby, or (b) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower, any Loan
Party or any Mortgage Loan Party or any of their respective constituent Persons
or an assignment by Borrower, any Loan Party or any Mortgage Loan Party or any
of their respective constituent Persons for the benefit of its creditors,
Borrower, each Loan Party, their respective successors or assigns, shall be
chargeable with and agrees to pay all costs of collection and defense, including
reasonable attorneys’ fees and expenses, incurred by Lender or any Loan Party in
connection therewith and in connection with any appellate proceeding or post
judgment action involved therein, together with all required service or use
taxes.

5.1.15 Estoppel Statement. (a) After request by Lender, Borrower shall within
twenty (20) days furnish Lender with a statement, duly acknowledged and
certified, setting forth (i) the original principal amount of the Note, (ii) the
unpaid principal amount of the Note, (iii) the Interest Rate of the Note,
(iv) the date installments of interest and/or principal were last paid, (v) any
offsets or defenses to the payment of the Debt, if any, claimed by Borrower, and
(vi) that the Note, this Agreement, the Pledge Agreement and the other Loan
Documents are valid, legal and binding obligations and have not been modified or
if modified, giving particulars of such modification.

 

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(b) After request by Lender, Borrower shall and shall cause Mortgage Borrower
to, within twenty (20) days furnish Lender with a statement, duly acknowledged
and certified by Mortgage Borrower, setting forth (i) the original principal
amount of the Mortgage Note, (ii) the unpaid principal amount of the Mortgage
Note, (iii) the interest rate of the Mortgage Note, (iv) the date installments
of interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Mortgage Loan and (vi) that the Mortgage Note, the Mortgage Loan
Agreement and the other Mortgage Loan Documents have not been modified or if
modified, giving particulars of such modification.

5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan received by it
on the Closing Date only for the purposes set forth in Section 2.1.4 hereof.

5.1.17 Performance by Loan Party. (a) Each Loan Party shall in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Loan Document executed and delivered by, or applicable to, each Loan Party, and
shall not enter into or otherwise suffer or permit any amendment, waiver,
supplement, termination or other modification of any Loan Document executed and
delivered by, or applicable to, each Loan Party without the prior written
consent of Lender.

(b) Each Loan Party shall cause each Mortgage Loan Party to in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Mortgage Loan Document executed and delivered by, or applicable to, each
Mortgage Loan Party, and shall not permit any Mortgage Loan Party to enter into
or otherwise suffer or permit any amendment, waiver, supplement, termination or
other modification of any Mortgage Loan Document executed and delivered by, or
applicable to, each Mortgage Loan Party without the prior written consent of
Lender.

5.1.18 Confirmation of Representations. Each Loan Party shall deliver, in
connection with any Secondary Market Transaction, (a) one (1) or more Officer’s
Certificates certifying as to the accuracy of all representations made by Loan
Party in the Loan Documents as of the date of the closing of such Secondary
Market Transaction in all relevant jurisdictions with any updates as may be
necessary for the passage of time (provided that the representations and
warranties set forth in Sections 4.1.1, 4.1.3, 4.1.4, 4.1.5 (the last sentence
only), 4.1.6, 4.1.7, 4.1.8, 4.1.9, 4.1.11, 4.1.13, 4.1.15, 4.1.32, 4.1.33,
4.1.34 and 4.1.35 shall not be subject to being updated), provided that such
updates do not result in the breach of any covenant contained in this Agreement
or the other Loan Documents or in a Default or Event of Default, and
(b) certificates of the relevant Governmental Authorities in all relevant
jurisdictions indicating the good standing and qualification of Borrower and
Guarantor as of the date of the Secondary Market Transaction.

5.1.19 Environmental Covenants. (a) Each Loan Party covenants and agrees that:
(i) all uses and operations on or of the Properties, whether by a Loan Party, a
Mortgage Loan Party, or any other Person, shall be in compliance in all material
respects with all Environmental Laws and permits issued pursuant thereto;
(ii) there shall be no Releases of Hazardous Substances in, on, under or from
the Properties; (iii) there shall be no Hazardous Substances in, on, or under
the Properties, except those that are (A) in compliance with all Environmental
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required by Environmental Law), (B) de-minimis amounts necessary to operate the
Properties for the purposes set forth in the Loan Agreement which is not
reasonably expected to result in an environmental condition in, on or under the
Properties and which are otherwise permitted under and used in compliance with
Environmental Law and (C) fully disclosed to Lender in writing; (iv) each Loan
Party shall, and shall cause each Mortgage Loan Party to, keep the Properties
free and clear of all liens and other encumbrances imposed pursuant to any
Environmental Law, whether due to any act or omission of Borrower, Mortgage
Borrower or any other Person (the “Environmental Liens”); (v) each Loan Party
shall, and shall cause each Mortgage Loan Party to, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to
subsection (b) below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (vi) each
Loan Party shall, and shall cause each Mortgage Loan Party to, at its sole cost
and expense, perform any environmental site assessment or other investigation of
environmental conditions in connection with the Properties, pursuant to any
reasonable written request of Lender made in the event that Lender has reason to
believe that an environmental hazard exists on any Individual Property
(including but not limited to sampling, testing and analysis of soil, water,
air, building materials and other materials and substances whether solid, liquid
or gas), and share with Lender the reports and other results thereof, and Lender
shall be entitled to rely on such reports and other results thereof; (vii) each
Loan Party shall, and shall cause each Mortgage Loan Party to, at its sole cost
and expense, comply with all reasonable written requests of Lender made in the
event that Lender has reason to believe that an environmental hazard exists on
any Individual Property (A) reasonably effectuate Remediation of any condition
(including but not limited to a Release of a Hazardous Substance) in, on, under
or from such Individual Property; (B) comply with any Environmental Law;
(C) comply with any directive from any Governmental Authority; and (D) take any
other reasonable action necessary or appropriate for protection of human health
or the environment; (viii) each Loan Party shall, and shall cause each Mortgage
Loan Party to, not do and shall use commercially reasonable efforts to prevent
any Tenant or other user of any Individual Property to do any act that
materially increases the dangers to human health or the environment, poses an
unreasonable risk of harm to any Person (whether on or off such Individual
Property), impairs or is reasonably likely to impair the value of such
Individual Property, is contrary to any requirement of any insurer, constitutes
a public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to such Individual Property; and
(ix) each Loan Party shall, and shall cause each Mortgage Loan Party to,
promptly notify Lender in writing of (A) any presence or Releases or threatened
Releases of Hazardous Substances in, on, under, from or migrating towards any
Individual Property; (B) any non-compliance with any Environmental Laws related
in any way to any Individual Property; (C) any actual or potential Environmental
Lien; (D) any required or proposed Remediation of environmental conditions
relating to any Individual Property; and (E) any written or oral notice or other
communication of which Loan Party receives or has knowledge (including but not
limited to a governmental entity) relating in any way to the release or
potential release of Hazardous Substances or Remediation thereof, reasonably
likely to result in liability of any Person pursuant to any Environmental Law,
other environmental conditions in connection with any Individual Property, or
any actual or potential administrative or judicial proceedings in connection
with anything referred to in this Section.

 

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(b) In the event that Lender has a reasonable basis to believe that an
environmental hazard exists on any Individual Property that in Lender’s
reasonable discretion is reasonably likely to endanger any Tenants or other
occupants of such Individual Property or their guests or the general public or
is reasonably likely to materially and adversely affect the value of such
Individual Property, upon reasonable notice from Lender, Loan Party shall, and
shall cause each Mortgage Loan Party to, at Loan Party’s expense, promptly cause
an engineer or consultant reasonably satisfactory to Lender to conduct an
environmental assessment or audit (the scope of which shall be determined in
Lender’s reasonable discretion) and may, if appropriate, include invasive
testing and promptly deliver the results of any such assessment, audit, sampling
or other testing; provided, however, if such results are not delivered to Lender
within a reasonable period or if Lender has reason to believe that an
environmental hazard exists on such Individual Property that, in Lender’s
reasonable judgment, endangers any Tenant or other occupant of such Individual
Property or their guests or the general public or may materially and adversely
affect the value of such Individual Property, upon reasonable notice to
Borrower, Lender and any other Person designated by Lender, including but not
limited to any receiver, any representative of a governmental entity, and any
environmental consultant, shall have the right, but not the obligation, to enter
upon such Individual Property at all reasonable times to assess any and all
aspects of the environmental condition of such Individual Property and its use,
including but not limited to conducting any environmental assessment or audit
(the scope of which shall be determined in Lender’s reasonable discretion).
Borrower shall cooperate with and provide Lender and any such Person designated
by Lender with access to such Individual Property.

(c) Borrower shall, and shall cause Mortgage Loan Party to, or shall cause
Operating Lessee to, perform and complete the Radon Remediation Work.

5.1.20 Residency Agreements, Leasing Matters and Major Contracts. (a) All
Residency Agreements executed after the date hereof shall (i) not permit
collection of any Rents more than one month in advance (other than security
deposits) and (ii) be written substantially in accordance with the standard form
of Residency Agreements previously provided to Lender with such modifications
that are reasonably necessary or appropriate to preserve the qualification of
any Parent REIT as a REIT for any period or to eliminate or reduce Taxes of such
Parent REIT under Sections 856, 857, 860, and 4981 of the Code (and similar
provisions of state or local law) for any period) and are otherwise on
commercially reasonable and market terms. Each Loan Party shall, and shall cause
each Mortgage Loan Party to, not execute any assignment of Loan Party’s or
Mortgage Loan Party’s interest in the Leases or the Rents (except as
contemplated by the Loan Documents).

(b) Any Major Contracts with respect to any Individual Property written after
the date hereof and any material amendment thereto, shall be subject to the
prior written approval of Lender, which approval shall not be unreasonably
withheld, conditioned or delayed. Upon written request, Borrower shall furnish
Lender with executed copies of all Major Contracts to the extent not previously
deliver to Lender. During the continuance of an Event of Default, upon written
request, Borrower shall, or shall cause each Mortgage Borrower to, or shall
cause Manager to, furnish Lender with executed copies of all Leases. All Leases
executed after the date hereof shall (i) be written substantially in accordance
with the standard form of lease previously provided to Lender and (ii) not
permit collection of any of the rents more than one (1) month in advance (other
than security deposits). Borrower shall, and shall cause each Mortgage Loan
Party to, execute and deliver at the request of Lender all such further
assurances, confirmations and assignments in connection with the Leases and
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Lender shall from time to time reasonably require. Notwithstanding anything to
the contrary contained herein, (x) neither Borrower, Mortgage Borrower, any
other Mortgage Loan Party, nor any other Loan Party shall enter into a lease of
all or substantially all of any Individual Property without Lender’s prior
written consent, and (y) any Major Contracts, Residency Agreements or any new
Leases with Tenants or residents that are Affiliates of Borrower, Mortgage
Borrower, any other Mortgage Loan Party, or any other Loan Party and all
material amendments, modifications, extensions, and renewals thereof shall be
subject to the prior written consent of Lender.

5.1.21 Alterations. Loan Party shall obtain Lender’s prior written consent prior
to permitting any Mortgage Loan Party to perform any alterations to any
Improvements, which consent shall not be unreasonably withheld or delayed except
with respect to alterations that may have a material adverse effect on
Borrower’s, Mortgage Borrower’s, any other Mortgage Loan Party’s, or any other
Loan Party’s financial condition, the value of the applicable Individual
Property or such Individual Property’s Net Operating Income. Notwithstanding the
foregoing, Lender’s consent shall not be required in connection with any
alterations that will not have a material adverse effect on Borrower’s, Mortgage
Borrower’s, any other Mortgage Loan Party’s, or any other Loan Party’s financial
condition, the value of the applicable Individual Property or the applicable
Property’s Net Operating Income, provided that such alterations (i) are made in
connection with (a) tenant improvement work performed pursuant to the terms of
any Lease executed on or before the date hereof, (b) tenant improvement work
performed pursuant to the terms and provisions of a Lease and not adversely
affecting any structural component of any Improvements, any utility or HVAC
system contained in any Improvements or the exterior of any building
constituting a part of any Improvements, (c) alterations performed in connection
with the Restoration of an Individual Property after the occurrence of a
Casualty or Condemnation in accordance with the terms and provisions of the
Mortgage Loan Agreement or (ii) with respect to any Individual Property, the
cost of which, in the aggregate shall not exceed the greater of (a) $1,000,000
and (b) five percent (5%) of the Release Amount (as defined in the Mortgage Loan
Agreement) for the applicable Individual Property. If the total unpaid amounts
due and payable with respect to alterations to the Improvements at an Individual
Property (other than such amounts to be paid or reimbursed by Tenants under the
Leases) shall at any time exceed $1,000,000.00 (the “Threshold Amount”),
Borrower shall, or shall cause Mortgage Borrower to, promptly deliver to Lender
as security for the payment of such amounts and as additional security for
Borrower’s obligations under the Loan Documents any of the following: (A) cash,
(B) U.S. Obligations (C) other securities having a rating acceptable to Lender
or (D) an irrevocable letter of credit (payable on sight draft only) issued by a
financial institution having a rating by S&P of not less than “A-1+” (and the
equivalent by Moody’s) if the term of such letter of credit is no longer than
three (3) months or, if such term is in excess of three (3) months, issued by a
financial institution having a rating that is acceptable to Lender; provided,
however, such requirement shall be deemed satisfied to the extent Mortgage
Borrower or Operating Lessee has delivered the same to Mortgage Lender under the
Mortgage Loan Agreement. Such security shall be in an amount equal to the excess
of the total unpaid amounts with respect to alterations to the Improvements on
the applicable Individual Property (other than such amounts to be paid or
reimbursed by Tenants under the Leases) over the Threshold Amount and Lender may
apply such security from time to time at the option of Lender to pay for such
alterations.

 

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5.1.22 Operation of Property. (a) Borrower and each other Loan Party shall, and
shall cause each Mortgage Loan Party to, cause the Properties to be operated, in
all material respects, in accordance with the Management Agreement (or
Replacement Management Agreement) as applicable. In the event that the
Management Agreement expires or is terminated (without limiting any obligation
of Borrower and each other Loan Party to obtain Lender’s consent to any
termination or modification of the Management Agreement in accordance with the
terms and provisions of this Agreement), Borrower shall, and shall cause each
Mortgage Loan Party to, promptly enter into a Replacement Management Agreement
with Manager or another Qualified Manager, as applicable.

(b) Borrower and each other Loan Party, as applicable, shall, and shall cause
each Mortgage Loan Party to: (i) promptly perform and/or observe, in all
material respects, all of the covenants and agreements required to be performed
and observed by it under the Management Agreement to which it is a party and do
all things reasonably necessary to preserve and to keep unimpaired its material
rights thereunder; (ii) promptly notify Lender of any material default under the
Management Agreement of which it has received notice or has knowledge;
(iii) during the continuance of any Cash Sweep Period, promptly deliver to
Lender a copy of each financial statement, business plan, capital expenditures
plan, or any other material financial or Property written report received by it
under the Management Agreement to which it is a party; and (iv) enforce the
performance and observance of all of the covenants and agreements required to be
performed and/or observed by Manager under the Management Agreement to which it
is a party, in a commercially reasonable manner.

5.1.23 Embargoed Person. Borrower and each other Loan Party and Mortgage
Borrower and each other Mortgage Loan Party has performed and shall, and each
Loan Party shall cause each Mortgage Loan Party to, perform reasonable due
diligence to insure that at all times throughout the term of the Loan, including
after giving effect to any Transfers permitted pursuant to the Loan Documents,
(a) none of the funds or other assets of Borrower, any Loan Party, Mortgage
Borrower, any Mortgage Loan Party and Guarantor constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed Person; (b) no
Embargoed Person has any interest of any nature whatsoever in Borrower, any Loan
Party, Mortgage Borrower, any Mortgage Loan Party or Guarantor, as applicable,
with the result that the investment in Borrower or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law; and (c) none of the funds of Borrower, any Loan Party,
Mortgage Borrower, any Mortgage Loan Party or Guarantor, as applicable, have
been derived from, or are the proceeds of, any unlawful activity, including
money laundering, terrorism or terrorism activities, with the result that the
investment in Borrower, any Loan Party, Mortgage Borrower, any Mortgage Loan
Party or Guarantor, as applicable (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law, or may cause any
Individual Property to be subject to forfeiture or seizure.

5.1.24 Payment of Obligations. Borrower and each other Loan Party will, and
shall cause each Mortgage Loan Party to, pay its obligations, including tax
liabilities, that, if not paid, could result in a material adverse effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings,
(b) Borrower or such other Loan Party, as applicable, has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, or (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a material adverse effect.

 

 

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5.1.25 Taxes. Each Loan Party will be, and shall cause each Mortgage Loan Party
to be, treated as a partnership or a disregarded entity for U.S. federal income
tax purposes. Each Loan Party will, and shall cause each Mortgage Loan Party to,
timely file or cause to be filed all federal income and other material tax
returns and reports required to be filed by it and will pay or cause to be paid
all federal income and other material taxes and related liabilities required to
be paid by it, except taxes that are being contested in good faith by
appropriate proceedings and for which each Loan Party sets aside on its books
adequate reserves in accordance with GAAP. No Loan Party will, or cause any
Mortgage Loan Party to, permit any Liens for Section 2.7 Taxes to be imposed on
or with respect to any of its income or assets, other than Liens for Section 2.7
Taxes not yet due and payable and for which Loan Party sets aside on its books
adequate reserves in accordance with GAAP.

5.1.26 Ground Leases. (a) Borrower shall cause Mortgage Borrower, at its sole
cost and expense, promptly and timely perform and observe all the material
terms, covenants and conditions required to be performed and observed by
Mortgage Borrower as lessee under each Ground Lease (including, but not limited
to, the payment of all rent, additional rent, percentage rent and other charges
required to be paid under each Ground Lease).

(b) If Mortgage Borrower shall be in default under any Ground Lease, then,
subject to the terms of the applicable Ground Lease, Borrower shall cause
Mortgage Borrower to grant Lender the right (but not the obligation), to cause
the default or defaults under such Ground Lease to be remedied and otherwise
exercise any and all rights of Mortgage Borrower under the Ground Lease, as may
be necessary to prevent or cure any default, and Lender shall have the right to
enter all or any portion of the related Ground Lease Property at such times and
in such manner as Lender deems necessary, to prevent or to cure any such
default.

(c) The actions or payments of Lender to cure any default by Mortgage Borrower
under each Ground Lease shall not remove or waive, as between Borrower and
Lender, the default that occurred under this Agreement by virtue of the default
by Mortgage Borrower under any Ground Lease. All sums expended by Lender to cure
any such default shall be paid by Borrower to Lender, upon demand, with interest
on such sum at the rate set forth in this Agreement from the date such sum is
expended to and including the date the reimbursement payment is made to Lender.
All such indebtedness shall be deemed to be secured by the Pledge Agreement.

(d) Borrower shall notify Lender promptly in writing of the occurrence of any
default by Ground Lessor under any Ground Lease or following the receipt by
Mortgage Borrower of any written notice from Ground Lessor under any Ground
Lease noting or claiming the occurrence of any default by Mortgage Borrower
under any Ground Lease or the occurrence of any event that, with the passage of
time or service of notice, or both, would constitute a default by Mortgage
Borrower under any Ground Lease. Borrower shall promptly deliver to Lender a
copy of any such written notice of default.

 

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(e) Within ten (10) days after receipt of written demand by Lender, Borrower
shall cause Mortgage Borrower to use commercially reasonable efforts to obtain
from the Ground Lessor under each Ground Lease and furnish to Lender the
estoppel certificate of such Ground Lessor stating the date through which rent
has been paid and whether or not there are any defaults thereunder and
specifying the nature of such claimed defaults, if any.

(f) Borrower shall, and shall cause each Mortgage Loan Party to, promptly
execute, acknowledge and deliver to Lender such instruments as may be required
to permit Lender to cure any default under any Ground Lease or permit Lender to
take such other action required to enable Lender to cure or remedy the matter in
default and preserve the security interest of Lender under the Loan Documents
with respect to each Ground Lease Property. Borrower irrevocably appoints Lender
as its true and lawful attorney-in-fact to do, in its name or otherwise, after
the occurrence of an Event of Default, any and all acts and to execute any and
all documents that are necessary to preserve any rights of Mortgage Borrower
under or with respect to each Ground Lease, including, without limitation, the
right to effectuate any extension or renewal of each Ground Lease, or to
preserve any rights of Mortgage Borrower whatsoever in respect of any part of
each Ground Lease (and the above powers granted to Lender are coupled with an
interest and shall be irrevocable).

(g) Notwithstanding anything to the contrary contained in this Agreement with
respect to each Ground Lease:

(i) The lien of the related Mortgage attaches to all of Mortgage Borrower’s
rights and remedies at any time arising under or pursuant to
Subsection 365(h) of the Bankruptcy Code, 11 U.S.C. Sections 101 et seq.,
including, without limitation, all of Borrower’s rights, as debtor, to remain in
possession of the related Ground Lease Property.

(ii) Mortgage Borrower shall not, without Lender’s written consent, elect to
treat the Ground Lease as terminated under Subsection 365(h)(l) of the
Bankruptcy Code. Any such election made without Lender’s prior written consent
shall be void.

(iii) Subject to the rights of Mortgage Lender under the Mortgage Loan
Documents, as security for the Debt, Borrower shall cause Mortgage Borrower to
unconditionally assign, transfer and set over to Lender all of Mortgage
Borrower’s claims and rights to the payment of damages arising from any
rejection by the Ground Lessor under the Ground Lease under the Bankruptcy Code.
Subject to the rights of Mortgage Lender under the Mortgage Loan Documents,
Lender and Mortgage Borrower shall proceed jointly or in the name of Mortgage
Borrower in respect of any claim, suit, action or proceeding relating to the
rejection of the Ground Lease, including, without limitation, the right to file
and prosecute any proofs of claim, complaints, motions, applications, notices
and other documents in any case in respect of lessor under the Bankruptcy Code.
This assignment constitutes a present, irrevocable and unconditional assignment
of the foregoing claims, rights and remedies, and shall continue in effect until
all of the Debt shall have been satisfied and discharged in full. Subject to the
rights of Mortgage Lender under the Mortgage Loan Documents, any amounts
received by Lender or Mortgage Borrower as damages arising out of the rejection
of the Ground Lease as aforesaid shall be applied to all costs and expenses of
Lender (including, without limitation, reasonable attorney’s fees and
costs) incurred in connection with the exercise of any of its rights or remedies
in accordance with the applicable provisions of this Agreement.

 

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(iv) If, pursuant to Subsection 365(h) of the Bankruptcy Code, Mortgage Borrower
seeks to offset, against the rent reserved in the Ground Lease, the amount of
any damages caused by the nonperformance by the Ground Lessor of any of its
obligations thereunder after the rejection by Ground Lessor of the Ground Lease
under the Bankruptcy Code, then Borrower shall not permit Mortgage Borrower to
effect any offset of the amounts so objected to by Lender. If Lender has failed
to object as aforesaid within ten (10) days after notice from Borrower in
accordance with the first sentence of this Subsection, Mortgage Borrower may
proceed to offset the amounts set forth in Borrower’s notice.

(v) If any action, proceeding, motion or notice shall be commenced or filed in
respect of any Ground Lessor of all or any part of the Ground Lease Property in
connection with any case under the Bankruptcy Code, Lender and Borrower shall
cooperatively conduct and control any such litigation with counsel agreed upon
between Borrower and Lender in connection with such litigation. Borrower shall,
upon demand, pay to Lender all costs and expenses (including reasonable
attorneys’ fees and costs) incurred in connection with the cooperative
prosecution or conduct of any such proceedings. All such costs and expenses
shall be secured by the lien of the Pledge Agreement.

(vi) Borrower shall promptly after obtaining knowledge of such filing notify
Lender of any filing by or against the Ground Lessor under the Ground Lease of a
petition under the Bankruptcy Code, setting forth any information available to
Borrower as to the date of such filing, the court in which such petition was
filed, and the relief sought in such filing. Borrower shall deliver to Lender
any and all notices, summonses, pleadings, applications and other documents
received by Borrower in connection with any such petition and any proceedings
relating to such petition.

(h) if Lender, its nominee, designee, successor, or assignee acquires title
and/or rights of Borrower in Mortgage Borrower by reason of foreclosure of the
Pledge Agreement, assignment in lieu of foreclosure or otherwise, such party
shall (x) succeed to all of the rights of and benefits accruing to Mortgage
Borrower under the Ground Lease, and (y) be entitled to exercise all of the
rights and benefits accruing to Mortgage Borrower under the Ground Lease. At
such time as Lender shall request, Borrower agrees to cause Mortgage Borrower to
execute and deliver and use commercially reasonable efforts to cause any third
party to execute and deliver to Lender such documents as Lender and its counsel
may require in order to insure that the provisions of this section will be
validly and legally enforceable and effective against Borrower and Mortgage
Borrower and all parties claiming by, through, under or against Borrower and
Mortgage Borrower.

 

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5.1.27 Operating Lease. Borrower shall and shall cause Mortgage Borrower to,
(a) cause the Property to be operated pursuant to the Operating Lease;
(b) promptly perform and/or observe, in all material respects, all of the
covenants, agreements and obligations required to be performed and observed by
Mortgage Borrower under the Operating Lease and do all things reasonably
necessary to preserve and to keep unimpaired its material rights thereunder;
(c) promptly notify Lender of any material default under the Operating Lease;
(d) promptly deliver to Lender a copy of each (x) budget and/or capital
expenditures plan to the extent such budget or capital expenditures plan was not
set forth in the Approved Annual Budget, or (y) material notice received by
Mortgage Borrower under the Operating Lease; (e) promptly enforce in a
commercially reasonable manner the performance and observance of all of the
material covenants and agreements required to be performed and/or observed by
Operating Lessee under the Operating Lease and (f) cause Operating Lessee to
deposit all Rents from the Property into the Lockbox Account, as required
pursuant to Section 2.6.1.

5.1.28 Reserve Funds. Borrower shall cause Mortgage Borrower to deposit and
maintain each of the Reserve Funds as defined in and more particularly set forth
in Article VII of the Mortgage Loan Agreement and to perform and comply with all
the terms and provisions relating thereto. Borrower grants to Lender a
first-priority perfected security interest in Borrower’s interest in each of the
Reserve Funds, if any, subject to the prior rights of Mortgage Lender), and any
and all monies now or hereafter deposited in each of the Reserve Funds as
additional security for payment of the Debt to the extent Borrower has an
interest in same. Subject to the qualifications regarding Borrower’s interest in
the Reserve Funds, if any, until expended or applied in accordance with the
Mortgage Loan Documents or the Loan Documents, Borrower’s interest in the
Reserve Funds (subject to the Mortgage Lender’s prior rights) (and, if
applicable, any Mezzanine Reserve Funds) shall constitute additional security
for the Debt and upon the occurrence and during the continuance of an Event of
Default, Lender may, in addition to any and all other remedies available to
Lender, subject to the prior rights of Mortgage Lender, apply any sums then
present in any or all of the Reserve Funds (and, if applicable, any Mezzanine
Reserve Funds) to the payment of the Debt in any order in its sole discretion,
in accordance with the Cash Management Agreement.

5.1.29 Special Distributions. On each date on which amounts are required to be
disbursed to the Mezzanine Deposit Account pursuant to the terms of the Cash
Management Agreement or are required to be paid to Lender under any of the Loan
Documents, Borrower shall exercise its rights under the applicable Mortgage
Borrower Company Agreement to cause Mortgage Borrower to make to Borrower a
distribution in an aggregate amount such that Lender shall receive the amount
required to be disbursed to the Mezzanine Deposit Account or otherwise paid to
Lender on such date.

5.1.30 Notices. Loan Party shall give notice, or cause notice to be given to
Lender, promptly upon the occurrence of any event of default under any
Contractual Obligation of any Loan Party or Mortgage Loan Party.

5.1.31 Curing. During the continuance of an Event of Default, after five
(5) Business Days’ notice to each Loan Party (except in an emergency when no
notice shall be required), Lender shall have the right, but shall not have the
obligation, to exercise each Loan Party’s rights under the Mortgage Borrower
Company Agreement or Operating Lessee Company Agreements to (a) cure a Mortgage
Loan Event of Default and (b) satisfy any Liens, claims or judgments against the
Properties (except for Liens securing the Mortgage Loan and other Permitted
Encumbrances), in the case of either (a) or (b), unless Borrower or Mortgage
Borrower

 

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shall be diligently pursuing remedies to cure to Lender’s reasonable
satisfaction. Borrower shall reimburse Lender within ten (10) days of written
demand for any and all reasonable out-of-pocket costs and expenses incurred by
Lender in connection with curing any such Mortgage Loan Event of Default or
satisfying any such Liens, claims or judgments against any Individual Property.

5.1.32 Mortgage Borrower Covenants. Each Loan Party shall cause each Mortgage
Loan Party to comply with all obligations with which Mortgage Loan Party has
covenanted to comply under the Mortgage Loan Agreement and all other Mortgage
Loan Documents (including, without limitation, those certain affirmative and
negative covenants set forth in Article V of the Mortgage Loan Agreement)
whether the Mortgage Loan has been repaid or the related Mortgage Loan Document
terminated, unless otherwise consented to in writing by Lender.

Section 5.2 Negative Covenants. From the date hereof until payment and
performance in full of all obligations of any Loan Party under the Loan
Documents or the earlier release of the Collateral accordance with the terms of
this Agreement and the other Loan Documents, each Loan Party covenants and
agrees with Lender that it will not (and will not permit any Mortgage Loan Party
to), directly or indirectly, do any of the following:

5.2.1 Operation of Property. (a) Loan Party shall not (and shall not permit any
Mortgage Loan Party to), without Lender’s prior written consent (which consent
shall not be unreasonably withheld): (i) surrender, terminate, cancel, amend or
modify the Management Agreement; (ii) reduce or consent to the reduction of the
term of the Management Agreement; (iii) increase or consent to the increase of
the amount of any charges under the Management Agreement; or (iv) otherwise
modify, change, supplement, alter or amend, or waive or release any of its
rights and remedies under, the Management Agreement in any material respect.

(b) Following the occurrence and during the continuance of an Event of Default,
Loan Party shall not (and shall not permit any Mortgage Loan Party to) exercise
any rights, grant any approvals or otherwise take any action under the
Management Agreement without the prior written consent of Lender, which consent
may be granted, conditioned or withheld in Lender’s sole discretion.

5.2.2 Liens. No Loan Party shall (and shall not permit any Mortgage Loan Party
to) create, incur, assume or suffer to exist any Lien on any portion of any
Individual Property or the Collateral or permit any such action to be taken,
except for Permitted Encumbrances.

5.2.3 Dissolution. No Loan Party shall (and shall not permit any Mortgage Loan
Party to) (a) engage in any dissolution, liquidation or consolidation or merger
with or into any other business entity, (b) in the case of Mortgage Loan Party,
engage in any business activity not related to the ownership and operation of
the Properties, and in the case of Loan Party, engage in any business activity
not related to the ownership and operation of the Collateral, (c) transfer,
lease or sell, in one transaction or any combination of transactions, the assets
or all or substantially all of the properties or assets of such Loan Party’s or
Mortgage Loan Party’s except to the extent permitted by the Loan Documents and
the Mortgage Loan Document, or (d) modify, amend, waive or terminate its
organizational documents or its qualification and good standing in any
jurisdiction, in each case, without obtaining the prior written consent of
Lender.

 

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5.2.4 Change In Business. No Loan Party shall permit any Mortgage Loan Party to
enter into any line of business other than the ownership and operation of the
Properties, 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. No Loan Party shall enter
into any line of business other than the ownership and operation of the
Collateral, 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.

5.2.5 Debt Cancellation. No Loan Party shall (and shall not permit any Mortgage
Loan Party to) cancel or otherwise forgive or release any claim or debt (other
than termination of Leases in accordance herewith) owed to Loan Party or
Mortgage Loan Party by any Person, except for adequate consideration and in the
ordinary course of such Loan Party’s or Mortgage Loan Party’s business.

5.2.6 Zoning. No Loan Party shall (and shall not permit any Mortgage Loan Party
to) initiate or consent to any zoning reclassification of any portion of any
Individual Property or seek any variance under any existing zoning ordinance or
use or permit the use of any portion of any Individual Property in any manner
that could result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, without the
prior written consent of Lender.

5.2.7 No Joint Assessment. No Loan Party (and shall not permit any Mortgage Loan
Party to) shall suffer, permit or initiate the joint assessment of any
Individual Property (a) with any other real property constituting a tax lot
separate from such Individual Property, and (b) which constitutes real property
with any portion of such Individual Property which may be deemed to constitute
personal property, or any other procedure whereby the lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to such real property portion of such Individual Property.

5.2.8 Intentionally Omitted.

5.2.9 ERISA. (a) Neither Borrower, any other Loan Party, Mortgage Loan Party,
nor Guarantor shall engage in any transaction which would cause any obligation,
or action taken or to be taken, hereunder (including but not limited to the
exercise by Lender of any of its rights under the Note, this Agreement or the
other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA or Section 4975 of the Code
or Similar Law.

(b) Each Loan Party further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) neither Borrower,
any other Loan Party, Mortgage Loan Party nor Guarantor is subject to any state
statute regulating investment of, or fiduciary obligations with respect to
governmental plans which is a Similar Law and (B) one or more of the following
circumstances is true:

 

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(i) Equity interests in each of Borrower, each other Loan Party, Mortgage Loan
Party and Guarantor are publicly offered securities, within the meaning of 29
C.F.R. §2510.3-101 as modified by Section 3 (42) of ERISA (the “Plan Asset
Regulations”);

(ii) Less than twenty-five percent (25%) of each outstanding class of equity
interests in each of Borrower, each other Loan Party, Mortgage Loan Party and
Guarantor are held by “benefit plan investors” within the meaning of the Plan
Asset Regulations; or

(iii) Each of Borrower, each other Loan Party, Mortgage Loan Party and Guarantor
qualifies as an “operating company” or a “real estate operating company” within
the meaning of the Plan Asset Regulations or another exception to ERISA applies
such that each of Borrower’s and Guarantor’s assets should not constitute “plan
assets” of any “benefit plan investor” within the meaning of the Plan Asset
Regulations.

(c) Borrower, each other Loan Party, Mortgage Loan Party and the Guarantor will
fund or cause to be funded each Plan established or maintained by Borrower, the
Guarantor, each other Loan Party, Mortgage Loan Party or any ERISA Affiliate, as
the case may be, so that there is never a failure to satisfy the minimum funding
standards, within the meaning of Sections 412 or 430 of the Internal Revenue
Code or Section 302 of ERISA (whether or not such standards are waived). As soon
as possible and in any event within ten (10) days after Loan Party knows that
any ERISA Event has occurred with respect to any Plan, Lender will be provided
with a statement, signed by an Authorized Representative of Borrower, and/or the
Guarantor, describing said ERISA Event and the action which the Borrower and/or
the Guarantor proposes to take with respect thereto.

5.2.10 Transfers. (a) Each Loan Party acknowledges that Lender has examined and
relied on the experience of Borrower, each other Loan Party, Mortgage Borrower,
Mortgage Loan Party and their respective stockholders, general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Properties and the Collateral in agreeing to
make the Loan, and will continue to rely on Borrower’s ownership of the
Collateral as a means of maintaining the value of the Collateral as security for
repayment of the Debt and the performance of the Other Obligations. Each Loan
Party acknowledges that Lender has a valid interest in maintaining the value of
the Properties and the Collateral 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 Collateral.

(b) Without the prior written consent of Lender, and except to the extent
otherwise set forth in this Section 5.2.10, no Loan Party shall, and shall not
permit any Restricted Party do any of the following (collectively, a
“Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge,
assign, grant options with respect to, or otherwise transfer or dispose of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) any Individual
Property, the Collateral or any part thereof or any legal or beneficial interest
therein, (ii) enter into any PACE Loan or (iii) permit a Sale or Pledge of an
interest in any Restricted Party, other than (A) pursuant to Leases of space in
the Improvements to Tenants in accordance with the provisions of Section 5.1.20
and (B) Permitted Transfers.

 

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(c) A Transfer shall include, but not be limited to, (i) an installment sales
agreement wherein Borrower agrees to sell the Collateral or any portion thereof,
or Mortgage Borrower agrees to sell one or more Individual Properties or any
part thereof for a price to be paid in installments; (ii) an agreement by
Mortgage Borrower leasing all or a substantial part of any Individual Property
for other than actual occupancy by a space Tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Mortgage Borrower’s right, title and interest in and to any Leases or any Rents;
(iii) if a Restricted Party is a corporation, any merger, consolidation or Sale
or Pledge of such corporation’s stock or the creation or issuance of new stock;
(iv) if a Restricted Party is a limited or general partnership or joint venture,
any merger or consolidation or the change, removal, resignation or addition of a
general partner or the Sale or Pledge of the partnership interest of any general
partner or any profits or proceeds relating to such partnership interest, or the
Sale or Pledge of limited partnership interests or any profits or proceeds
relating to such limited partnership interest or the creation or issuance of new
limited partnership interests; (v) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of a managing
member (or if no managing member, any member) or any profits or proceeds
relating to such membership interest, or the Sale or Pledge of non-managing
membership interests or the creation or issuance of new non managing membership
interests; (vi) if a Restricted Party is a trust or nominee trust, any merger,
consolidation or the Sale or Pledge of the legal or beneficial interest in a
Restricted Party or the creation or issuance of new legal or beneficial
interests; or (vii) the removal or the resignation of the managing agent
(including, without limitation, an Affiliated Manager) other than in accordance
with Section 5.1.22 hereof.

(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent
shall not be required in connection with one or a series of Transfers, of
(i) not more than forty-nine percent (49%) of the stock, the limited partnership
interests or non-managing membership interests (as the case may be) in a
Restricted Party and (ii) up to one hundred percent (100%) of the direct or
indirect equity interest in Borrower or Leasehold Pledgor to any Affiliate of
Borrower that is Controlled by Guarantor and Guarantor owns, directly or
indirectly, one-hundred percent (100%) of such Affiliate of Borrower; provided,
however, no such Transfers shall result in the change of Control in a Restricted
Party, and as a condition to each such Transfer, Lender shall receive not less
than thirty (30) days prior written notice of such proposed Transfer. If after
giving effect to any such Transfer, more than forty-nine percent (49%) in the
aggregate of direct or indirect interests in a Restricted Party are owned by any
Person and its Affiliates that owned less than forty-nine percent (49%) direct
or indirect interest in such Restricted Party as of the Closing Date, Borrower
shall, no less than thirty (30) days prior to the effective date of any such
Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to
Lender. In addition, at all times, (x) Guarantor must continue to Control
Borrower, each other Loan Party, OpCo Manager, Mortgage Borrower and each other
Mortgage Loan Party and own, directly or indirectly, at least a 51% legal and
beneficial interest in Borrower, each

 

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other Loan Party, OpCo Manager, Mortgage Borrower and each other Mortgage Loan
Party and (y) for so long as the Loan or Mortgage Loan shall remain outstanding,
(i) no pledge or other encumbrance of any direct interests in any Individual
Mortgage Borrower or Operating Lessee shall be permitted (other than the pledges
securing the Loan) and (ii) none of Individual Mortgage Borrower, Operating
Lessee, Leasehold Pledgor or Borrower shall issue preferred equity interests.
Lender shall have performed searches and/or received other diligence such that
Lender is in compliance with Lender’s then current “know your customer”
requirements and to the extent that any Transfer will result in the transferee
(either itself or collectively with its affiliates) owning a 25% or greater
equity interest (directly or indirectly) in Borrower or any other Loan Party,
Lender’s receipt of the Satisfactory Search Results, at Borrower’s cost and
expense, shall be a condition precedent to such Transfer.

(e) Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Debt
immediately due and payable upon Borrower’s or any other Loan Party’s Transfer
without Lender’s consent. This provision shall apply to every Transfer
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer.

5.2.11 Ground Lease. (a) Borrower shall not, without Lender’s written consent,
permit Mortgage Borrower to fail to exercise any option or right to renew or
extend the term of any Ground Lease, and shall give immediate written notice to
Lender and shall execute, acknowledge, deliver and record any document requested
by Lender to evidence the lien of the related Mortgage on such extended or
renewed lease term; provided, however, Borrower shall not be required to cause
Mortgage Borrower to exercise any particular such option or right to renew or
extend to the extent Borrower shall have received the prior written consent of
Lender (which consent may not be unreasonably withheld, delayed or
conditioned) allowing Borrower to forego exercising such option or right to
renew or extend. If Mortgage Borrower shall fail to exercise any such option or
right as aforesaid, Lender may exercise the option or right as Mortgage
Borrower’s agent and attorney-in-fact as provided above in Lender’s own name or
in the name of and on behalf of a nominee of Lender, as Lender may determine in
the exercise of its sole and absolute discretion.

(b) Borrower shall not cause or permit Mortgage Borrower waive, excuse, condone
or in any way release or discharge any Ground Lessor under any Ground Lease of
or from such Ground Lessor’s obligations, covenant and/or conditions under the
related Ground Lease without the prior written consent of Lender.

(c) Borrower shall not cause or permit Mortgage Borrower, without Lender’s prior
written consent, surrender, terminate, forfeit, or suffer or permit the
surrender, termination or forfeiture of, or change, modify or amend any Ground
Lease, other than an expiration of the Ground Lease pursuant to its terms.
Consent to one amendment, change, agreement or modification shall not be deemed
to be a waiver of the right to require consent to other, future or successive
amendments, changes, agreements or modifications. Any acquisition of Ground
Lessor’s interest in any Ground Lease by Mortgage Borrower, Borrower or any
Affiliate of Mortgage Borrower or Borrower shall be accomplished by Mortgage
Borrower or Borrower, as applicable, in such a manner so as to avoid a merger of
the interests of lessor and lessee in such Ground Lease, unless consent to such
merger is granted by Lender.

 

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5.2.12 Operating Lease. Without Lender’s prior written consent, Borrower shall
not (and shall not cause or permit Mortgage Borrower to) (a) surrender,
terminate or cancel the Operating Lease; (b) reduce or consent to the reduction
of the term of the Operating Lease; (c) increase or consent to the increase of
the amount of any charges under the Operating Lease; (d) modify, change,
supplement, alter or amend the Operating Lease or waive or release any of
Mortgage Borrower’s rights and remedies under the Operating Lease; or (e) waive,
excuse, condone or in any way release or discharge Operating Lessee of or from
Operating Lessee’s obligations, covenants and/or conditions under the Operating
Lease.

5.2.13 Major Contracts. (a) No Loan Party shall, and shall not cause or permit
Mortgage Borrower and Operating Lessee to, without Lender’s prior written
consent, such consent not to be unreasonably withheld, conditioned or delayed:
(i) enter into (except for Major Contracts in effect on the Closing Date),
surrender or terminate any Major Contracts to which it is a party, (ii) increase
in any material respect or consent to the material increase of the amount of any
charges under any Major Contracts to which it is a party, except as provided
therein; or (iii) otherwise modify, change, supplement, alter or amend, or waive
or release any of its rights and remedies under any Major Contracts to which it
is a party in any material respect, except on an arm’s-length basis and
commercially reasonable terms.

5.2.14 Limitation on Securities Issuances. None of Borrower, any other Loan
Party or any Mortgage Loan Party shall issue any limited liability company
interests, partnership interests, capital stock interests or other securities
other than those that have been issued as of the date hereof.

5.2.15 Limitations on Distributions. Except as otherwise expressly permitted
under this Agreement, prior to the payment in full of the Debt, no Loan Party or
any of its Affiliates shall, without the prior written consent of Lender (which
may be furnished or withheld at its sole and absolute discretion), give its
consent or approval to any of the following actions or items:

(b) except as permitted herein (i) any prepayment in full of the Mortgage Loan
unless the Loan is prepaid in full concurrently therewith, or (ii) except as
expressly set forth Section 2.5 herein, any Transfer of any or all of the
Properties or any portion thereof;

(c) creating, incurring, assuming or suffering to exist any additional Liens on
any portion of the Properties except for Liens made in favor of Mortgage Lender
and other Permitted Encumbrances and rights of contest expressly permitted by
the Mortgage Loan Agreement;

(d) except as may be expressly required pursuant to the terms of Sections 9.1.1,
9.1.3 or 9.1.4 of the Mortgage Loan Agreement, any modification, amendment,
consolidation, spread, restatement, waiver or termination of any of the Mortgage
Loan Documents (other than a termination that is effected pursuant to the
provisions of the Mortgage Loan Documents and does not otherwise violate the
terms of this Agreement or the other Loan Documents);

 

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(e) the distribution to the partners, members or shareholders of Mortgage
Borrower or Operating Lessee of property other than cash;

(f) except (i) as set forth in an Approved Annual Budget, (ii) as permitted
under the Mortgage Loan Documents or (iii) in connection with alterations
performed subject to and in accordance with Section 5.1.22 of this Agreement or
required under any Required Repairs performed in accordance with the terms of
the Mortgage Loan Agreement, any (A) improvement, renovation or refurbishment of
all or any part of the Properties to a materially higher standard or level than
that of comparable properties in the same market segment and in the same
geographical area as the respective Individual Properties, (B) removal,
demolition or material alteration of the Improvements or Equipment on the
Property or (C) material increase in the square footage or gross leasable area
of the Improvements on the Properties if a material portion of any of the
expenses in connection therewith are paid or incurred by Mortgage Borrower or
Operating Lessee;

(g) except as provided in the Mortgage Loan Documents, any determination to
restore any Individual Property after a Casualty or Condemnation; or

(h) any change in the method of conduct of the business of Mortgage Borrower,
Operating Lessee, Leasehold Pledgor or any Loan Party.

5.2.16 Contractual Obligations. No Loan Party shall enter into or permit any
Mortgage Loan Party to enter into any Contractual Obligations by which such Loan
Party or its assets shall be bound, except for such Contractual Obligations and
liabilities that are not material in the aggregate and are incidental to its
activities as a limited partner, member or shareholder, as applicable, of
Mortgage Borrower or Operating Lessee or are expressly permitted under the Loan
Documents.

5.2.17 Refinancing. No Loan Party shall consent to or permit a refinancing of
the Mortgage Loan unless it obtains the prior consent of Lender, which consent
may be given or withheld by Lender in its sole discretion (other than in
connection with the simultaneous payoff or refinancing of the Loan, in its
entirety and in accordance with the terms and provisions of the Loan Documents
and the Mortgage Loan Documents, respectively, in which case the consent of
Lender shall not be required.

5.2.18 Bankruptcy Related Covenants. (a) To the extent permitted by applicable
Legal Requirements, no Loan Party shall, nor shall it cause Mortgage Borrower or
Operating Lessee to, seek or consent to substantive consolidation of any of the
foregoing into the bankrupt estate of Guarantor in connection with a case or
proceeding under the Bankruptcy Code or under the Bankruptcy Code involving
Guarantor.

(b) To the extent permitted by applicable Legal Requirements, no Loan Party
shall, nor shall it cause or, to the extent within its corporate authority,
permit, any Mortgage Loan Party, Guarantor, any other Restricted Party, or any
Affiliate of the foregoing to, contest, oppose or object to any motion made by
Lender to obtain relief from the automatic stay or seek to reinstate the
automatic stay in connection with a case or proceeding under the Bankruptcy Code
or under any other federal, state or foreign insolvency law involving Guarantor,
any Loan Party or any Mortgage Loan Party.

 

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(c) To the extent permitted by applicable Legal Requirements, no Loan Party
shall, nor shall it cause or, to the extent within its corporate authority,
permit, any Mortgage Loan Party, Guarantor, any other Restricted Party, or any
Affiliate of the foregoing to, provide, originate, acquire an interest in or
solicit (in writing) or accept from Guarantor or any Affiliate of Guarantor, or
any other Restricted Party, any debtor-in-possession financing on behalf of
Guarantor in the event that Guarantor is the subject of a case or proceeding
under the Bankruptcy Code or under federal, state or foreign insolvency law
involving Guarantor.

ARTICLE VI – INSURANCE; CASUALTY; CONDEMNATION;

Section 6.1 Insurance. (a) Borrower shall cause Mortgage Borrower to maintain,
or cause to be maintained, at all times during the term of the Loan the
insurance required under Section 6.1 of the Mortgage Loan Agreement, including,
without limitation, meeting all insurer requirements thereunder. In addition,
Borrower shall cause Lender and each Loan Party to each be named as an
additional insured under the insurance policies described in Section 6.1(a) of
the Mortgage Loan Agreement. In addition, Borrower shall cause Lender to be
named as a loss payee together with Mortgage Lender, as their interest may
appear, under the liability insurance policies required under Sections 6.1(a) of
the Mortgage Loan Agreement other than the policies described in
Section 6.1(a)(vi) and (viii) of the Mortgage Loan Agreement. Borrower shall
give written notice to Lender if any Policy has not been renewed thirty
(30) days prior to its expiration. Borrower shall provide Lender with evidence
of all such insurance required hereunder simultaneously with Mortgage Borrower’s
provision of such evidence to Mortgage Lender.

(b) 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 indirect interest in the Properties, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate after three (3) Business Days’ notice to Borrower
if prior to the date upon which any such coverage will lapse or at any time
Lender deems necessary (regardless of prior notice to Borrower) to avoid the
lapse of any such coverage. All premiums incurred by Lender in connection with
such action or in obtaining such insurance and keeping it in effect shall be
paid by Borrower to Lender upon demand and, until paid, shall be secured by the
Pledge Agreement and shall bear interest at the Default Rate.

Section 6.2 Casualty. If any Individual Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall
give prompt written notice of such damage to Lender and shall cause Mortgage
Borrower to promptly commence and diligently prosecute the completion of the
Restoration of the Individual Property pursuant to Section 6.4 of the Mortgage
Loan Agreement as nearly as possible to the condition such Individual Property
was in immediately prior to such Casualty, with such alterations as may be
reasonably approved by Lender and otherwise in accordance with Section 6.4 of
the Mortgage Loan Agreement. Borrower and/or Mortgage Borrower shall pay all
costs of such Restoration whether or not such costs are covered by insurance.
Lender may, but shall not be obligated to

 

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make proof of loss if not made promptly by Borrower. In addition, Lender may
participate in any settlement discussions with any insurance companies (and
shall approve the final settlement, which approval shall not be unreasonably
withheld or delayed) with respect to any Casualty in which the Net Proceeds or
the costs of completing the Restoration are equal to or greater than ten percent
(10%) of the Release Amount with respect to the applicable Individual Property
and Borrower shall deliver to Lender all instruments required by Lender to
permit such participation.

Section 6.3 Condemnation. (a) Borrower shall promptly give Lender notice of the
actual or threatened commencement of any proceeding for the Condemnation of any
Individual Property and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments reasonably requested by it to permit such participation. Borrower
shall cause Mortgage Borrower, 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.
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
Net Liquidation Proceeds After Debt Service shall have been actually received
and applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Debt. Lender shall not be limited to the interest
paid on the Net Liquidation Proceeds After Debt Service by the condemning
authority but shall be entitled to receive out of the Award interest at the rate
or rates provided herein or in the Note. If any Individual Property or any
portion thereof is taken by a condemning authority, Borrower shall cause
Mortgage Borrower to promptly commence and diligently prosecute the Restoration
of the applicable Individual Property pursuant to Section 6.4 hereof and
otherwise comply with the provisions of Section 6.4 hereof. If any Individual
Property is sold, through foreclosure or otherwise, prior to the receipt by
Lender of the Award, Lender shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or denied, to receive the
Award, or a portion thereof sufficient to pay the Debt.

Section 6.4 Restoration. Borrower shall, or shall cause Mortgage Borrower to,
deliver to Lender all reports, plans, specifications, documents and other
materials that are delivered to Mortgage Lender under Section 6.4 of the
Mortgage Loan Agreement and to otherwise comply in all respects with Section 6.4
of the Mortgage Loan Agreement in connection with a restoration of any
Individual Property after a Casualty or Condemnation.

ARTICLE VII – RESERVE FUNDS

Section 7.1 Required Repairs.

7.1.1 Required Repairs. Borrower shall cause Mortgage Borrower to comply with
all of the terms and conditions set forth in Section 7.1 of the Mortgage Loan
Agreement.

 

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Section 7.2 Tax and Insurance Escrow Fund. (a) Borrower shall cause Mortgage
Borrower to comply with all the terms and conditions set forth in Section 7.2 of
the Mortgage Loan Agreement.

(b) In the event that, prior to the payment and performance in full of the Debt,
(i) Mortgage Borrower is required to maintain the Tax and Insurance Escrow Fund
pursuant to the terms of Section 7.2 of the Mortgage Loan Agreement, but
Mortgage Lender waives such requirement, (ii) Mortgage Borrower is no longer
required pursuant to the terms of the Mortgage Loan Agreement to maintain the
Tax and Insurance Escrow Fund or (iii) the Mortgage Loan has been repaid in
full, (A) Lender shall have the right to require Borrower to establish and
maintain a reserve account that would operate in the same manner as the Tax and
Insurance Escrow Fund pursuant to Section 7.2 of the Mortgage Loan Agreement,
and (B) the provisions of Section 7.2 of the Mortgage Loan Agreement and all
related definitions shall be incorporated herein by reference.

Section 7.3 Replacements and Replacement Reserve.

(a) (a) Borrower shall cause Mortgage Borrower to comply with all the terms and
conditions set forth in Section 7.3 of the Mortgage Loan Agreement.

(b) In the event that, prior to the payment and performance in full of the Debt,
(i) Mortgage Borrower is required to maintain the Replacement Reserve Account
pursuant to the terms of Section 7.3 of the Mortgage Loan Agreement, but
Mortgage Lender waives such requirement, (ii) Mortgage Borrower is no longer
required pursuant to the terms of the Mortgage Loan Agreement to maintain the
Replacement Reserve Escrow Fund or (iii) the Mortgage Loan has been repaid in
full, (A) Lender shall have the right to require Borrower to establish and
maintain reserve accounts that would operate in the same manner as the
Replacement Reserve Account pursuant to Section 7.3 of the Mortgage Loan
Agreement, and (B) the provisions of Section 7.3 of the Mortgage Loan Agreement
and all related definitions shall be incorporated herein by reference.

Section 7.4 Intentionally Omitted.

Section 7.5 Ground Lease Reserve.

(a) (a) Borrower shall cause Mortgage Borrower to comply with all the terms and
conditions set forth in Section 7.5 of the Mortgage Loan Agreement.

(b) In the event that, prior to the payment and performance in full of the Debt,
(i) Mortgage Borrower is required to maintain the Ground Lease Reserve Fund
pursuant to the terms of Section 7.5 of the Mortgage Loan Agreement, but
Mortgage Lender waives such requirements, (ii) Mortgage Borrower is no longer
required pursuant to the terms of the Mortgage Loan Agreement to maintain the
Ground Lease Reserve Fund or (iii) the Mortgage Loan has been repaid in full,
(A) Lender shall have the right to require Borrower to establish and maintain a
reserve account that would operate in the same manner as the Ground Lease
Reserve Fund pursuant to Section 7.5 of the Mortgage Loan Agreement, and (B) the
provisions of Section 7.5 of the Mortgage Loan Agreement and all related
definitions shall be incorporated herein by reference.

 

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Section 7.6 Excess Cash Flow Reserve Fund.

(a) During a Cash Sweep Period, all Excess Cash Flow shall be applied subject to
and in accordance with Section 7.6 of the Mortgage Loan Agreement and the Cash
Management Agreement.

(b) In the event that, prior to the payment and performance in full of the Debt,
(i) Mortgage Borrower is required to maintain the Excess Cash Flow Reserve
Account pursuant to the terms of Section 7.6 of the Mortgage Loan Agreement, but
Mortgage Lender waives such requirement, or (ii) the Mortgage Loan has been
repaid in full, (A) Lender shall have the right to require Borrower to establish
and maintain a reserve account that would operate, without duplication, in the
same manner as the Excess Cash Flow Reserve Account pursuant to Section 7.6 of
the Mortgage Loan Agreement, and (B) the provisions of Section 7.6 of the
Mortgage Loan Agreement and all related definitions shall be incorporated herein
by reference.

Section 7.7 Mezzanine Reserve Funds, Generally. (a) Borrower grants to Lender a
first-priority perfected security interest in each of the Mezzanine Reserve
Funds and any and all monies now or hereafter deposited in each Mezzanine
Reserve Fund as additional security for payment of the Debt. Until expended or
applied in accordance herewith, the Mezzanine Reserve Funds shall constitute
additional security for the Debt.

(b) Upon the occurrence and during the continuance of an Event of Default,
Lender may, in addition to any and all other rights and remedies available to
Lender, apply any sums then present in any or all of the Mezzanine Reserve Funds
to the payment of the Debt in any order in its sole discretion.

(c) The Mezzanine Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Lender. The Mezzanine Reserve Funds shall
be held in an Eligible Account in Permitted Investments as directed by Lender or
Lender’s Servicer. Unless expressly provided for in this Article VII, all
interest on a Mezzanine Reserve Fund shall be added to and become a part
thereof. Borrower shall be responsible for payment of any federal, state or
local income or other tax applicable to the interest earned on the Mezzanine
Reserve Funds credited or paid to Borrower.

(d) Borrower shall not, without obtaining the prior written consent of Lender,
further pledge, assign or grant any security interest in any Mezzanine Reserve
Fund or the monies deposited therein or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto.

(e) Lender and Servicer shall not be liable for any loss sustained on the
investment of any funds constituting the Mezzanine Reserve Funds. Borrower shall
indemnify Lender and Servicer and hold Lender and Servicer harmless from and
against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and
reasonable attorneys’ fees and expenses) arising from or in any way connected
with the Mezzanine Reserve Funds or the performance of the obligations for which
the Mezzanine Reserve Funds were established. Borrower shall assign to Lender
all rights and claims Borrower may have against all persons or entities
supplying labor, materials or other services which are to be paid from or
secured by the Mezzanine Reserve Funds; provided, however, that Lender may not
pursue any such right or claim unless an Event of Default has occurred and
remains uncured.

 

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(f) The required monthly deposits into the Mezzanine Reserve Funds and the
Monthly Debt Service Payment Amount, shall be added together and shall be paid
as an aggregate sum by Borrower to Lender.

(g) Any amount remaining in the Mezzanine Reserve Funds after the Debt has been
paid in full shall be paid to Borrower.

Section 7.8 Transfer of Funds In Mortgage Reserve Accounts. If Mortgage Lender
waives any Reserve Funds (as defined in the Mortgage Loan Agreement) or other
reserves or escrow accounts required in accordance with the terms of the
Mortgage Loan Agreement, which reserves or escrow accounts are also required in
accordance with the terms of this Article VII, or if the Mortgage Loan is
refinanced or paid off in full (without a prepayment of the Loan) and Reserve
Funds in respect of which Mezzanine Reserve Funds are required hereunder are not
required under the new mortgage loan, if any, then Borrower shall cause any
amounts that would have been deposited into any Reserve Funds or other reserves
or escrow accounts in accordance with the terms of the Mortgage Loan Agreement
to be transferred to and deposited with Lender in accordance with the terms of
this Article VII (and Borrower shall enter into a cash management agreement and
lockbox agreement for the benefit of Lender in substantially the same form as
the Cash Management Agreement and Lockbox Agreement entered into at the time of
the closing of the Mortgage Loan).

ARTICLE VIII– DEFAULTS

Section 8.1 Event of Default. (a) Each of the following events shall constitute
an event of default hereunder (an “Event of Default”):

(i) if any portion of the Debt is not paid when due;

(ii) if any of the Taxes or Other Charges are not paid prior to delinquency
(unless contested in good faith and in accordance with the terms hereunder),
unless the amount payable has been adequately reserved for pursuant to this
Agreement or the Mortgage Loan Agreement (in which event such failure shall not
constitute an Event of Default);

(iii) if the Policies are not kept in full force and effect, or if certified
copies of the Policies are not delivered to Lender upon request within ten
(10) Business Days of such request;

(iv) if Borrower or any Loan Party permits Mortgage Borrower or any other
Mortgage Loan Party to Transfer or otherwise encumber any portion of any
Individual Property without Lender’s prior written consent in violation of the
provisions of the Mortgage Loan Agreement or Article 6 of the Mortgage or
Borrower or any other Loan Party Transfers or otherwise encumbers any portion of
the Collateral without Lender’s prior written consent in violation of the
provisions of this Agreement;

 

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(v) if any representation or warranty made by Borrower or any other Loan Party
herein (including any representation or warranty of any Mortgage Loan Party that
is incorporated herein by reference and made by Borrower hereunder) or in any
other Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made; provided, however, that with respect to any such breach which was
unintentionally made and which is susceptible of being cured, such breach shall
not be deemed an Event of Default hereunder unless and until it shall remain
uncured for thirty (30) days after Borrower receives written notice of such
breach; provided that Borrower acknowledges and agrees that the representations
and warranties set forth in Sections 4.1.3, 4.1.4, 4.1.5 (the last sentence
only), 4.1.6, 4.1.7, 4.1.8, 4.1.9, 4.1.11, 4.1.13, 4.1.15, 4.1.32, 4.1.33,
4.1.34 and 4.1.35 are not capable of being cured; provided, further, however,
that in the case of a breach of Section 4.1.1, such breach shall not constitute
an Event of Default in the event that such breach shall be remedied within a
timely manner and in any event within not more than thirty (30) days of Borrower
obtaining knowledge of such breach;

(vi) if Borrower or any other Loan Party or Mortgage Borrower or any other
Mortgage Loan Party shall make an assignment for the benefit of creditors;

(vii) if a receiver, liquidator or trustee shall be appointed for Borrower or
any other Loan Party or Mortgage Borrower or any other Mortgage Loan Party or if
Borrower or any other Loan Party or Mortgage Borrower or any other Mortgage Loan
Party shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower or any other Loan Party or Mortgage Borrower or any
other Mortgage Loan Party, or if any proceeding for the dissolution or
liquidation of Borrower or any Loan Party or Mortgage Borrower or any other
Mortgage Loan Party shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower or any other Loan Party or Mortgage Borrower or any other Mortgage Loan
Party upon the same not being discharged, stayed or dismissed within thirty
(30) days;

(viii) if Borrower or any other 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 or if Mortgage Borrower or any
other Mortgage Loan Party attempts to assign its rights under the Mortgage
Agreement or any of the other Mortgage Loan Documents or any interest herein or
therein in contravention of the Loan Documents or the Mortgage Loan Documents;

 

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(ix) if Guarantor or any guarantor or indemnitor under any guaranty or indemnity
issued in connection with the Loan shall make an assignment for the benefit of
creditors or if a receiver, liquidator or trustee shall be appointed for
Guarantor or any guarantor or indemnitor under any guarantee or indemnity issued
in connection with the Loan or if Guarantor or such other guarantor or
indemnitor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Guarantor or such other guarantor or indemnitor, or if any
proceeding for the dissolution or liquidation of Guarantor or such other
guarantor or indemnitor shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Guarantor or such other guarantor or indemnitor, upon the same
not being discharged, stayed or dismissed within ninety (90) days; provided,
further, however, it shall be at Lender’s option to determine whether any of the
foregoing shall be an Event of Default;

(x) if Borrower or any other Loan Party breaches any covenant contained in
Section 4.1.30 hereof unless, in the case of Section 4.1.30, if such breach is
susceptible of cure, Borrower shall have (x) cured such breach, and
(y) delivered to Lender an Additional Insolvency Opinion or an update from the
law firm under the most recent Insolvency Opinion previously delivered to Lender
to the effect that such breach or violation not negate or impair the Insolvency
Opinion previously delivered to Lender, in each case, within thirty (30) days of
Borrower becoming aware of such breach, or any negative covenant contained in
Section 5.2 hereof;;

(xi) intentionally omitted;

(xii) if any of the assumptions contained in the Insolvency Opinion delivered to
Lender in connection with the Loan, or in any Additional Insolvency Opinion
delivered subsequent to the closing of the Loan, is or shall become untrue in
any material respect unless Borrower shall have (x) cured such default, and
(y) delivered to Lender an Additional Insolvency Opinion or an update from the
law firm under the most recent Insolvency Opinion previously delivered to Lender
to the effect that such breach does not negate or impair the Insolvency Opinion
previously delivered to Lender, in each case, within thirty (30) days of
Borrower becoming aware of such default;

(xiii) if a material default by any Mortgage Loan Party has occurred and
continues beyond any applicable cure period under the Management Agreement (or
any Replacement Management Agreement) and if such default permits the Manager
thereunder to terminate or cancel the Management Agreement (or any Replacement
Management Agreement); provided, however, that no Event of Default shall exist
hereunder if (x) prior to the earlier of (A)the date on which Manager elects to
terminate the Management Agreement and (B) thirty (30) days’ after notice of
such default, Manager shall waive such default or (y) Mortgage Borrower engages
a Qualified Manager in accordance with the terms and as required by this
Agreement within thirty (30) days’ notice of the default under the Management
Agreement;

(xiv) if Borrower or any other Loan Party shall continue to be in Default under
any of the terms, covenants or conditions of Section 9.1 hereof for three
(3) Business Days after notice to Borrower from Lender;

 

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(xv) Borrower or any other Loan Party shall fail to obtain and/or maintain the
Interest Rate Cap Agreement or Replacement Interest Rate Cap Agreement, as
applicable, as required pursuant to Section 2.2.7 hereof;

(xvi) if Borrower or any other Loan Party shall continue to be in Default under
any of the other terms, covenants or conditions of this Agreement not specified
in subsections (i) to (xv) above, for ten (10) days after notice to Borrower or
any other Loan Party from Lender, in the case of any Default which can be cured
by the payment of a sum of money, or for thirty (30) days after notice from
Lender in the case of any other Default; provided, however, that if such
non-monetary Default is susceptible of cure but cannot reasonably be cured
within such thirty (30) day period and provided further that Borrower or any
other Loan Party shall have commenced to cure such Default within such thirty
(30) day period and thereafter diligently and expeditiously proceeds to cure the
same, such thirty (30) day period shall be extended for such time as is
reasonably necessary for Borrower in the exercise of due diligence to cure such
Default, such additional period not to exceed ninety (90) days;

(xvii) if there shall be default under any of the other Loan Documents beyond
any applicable cure periods contained in such documents, whether as to Borrower,
any other Loan Party, or Mortgage Borrower or any other Mortgage Loan Party,
Guarantor or any Individual Property, the Collateral, or if any other such event
shall occur or condition shall exist, if the effect of such default, event or
condition is to accelerate the maturity of any portion of the Debt or to permit
Lender to accelerate the maturity of all or any portion of the Debt;

(xviii) (A) a breach or default by Mortgage Borrower under any condition or
obligation contained in the Ground Lease that is not cured within any applicable
cure period provided therein, (B) there occurs any event or condition (beyond
any applicable notice and cure period or without any opportunity to cure) that
gives the lessor under the Ground Lease a right to terminate or cancel the
Ground Lease, or (C) the Ground Lease Property shall be surrendered or the
Ground Lease shall be terminated or cancelled for any reason or under any
circumstances whatsoever, or (D) any of the terms, covenants or conditions of
the Ground Lease shall in any manner be modified, changed, supplemented,
altered, or amended without the prior written consent of Lender in violation of
the provisions of this Agreement;

(xix) intentionally omitted;

(xx) if any Operating Lease is amended, modified or terminated in violation of
the terms of this Agreement;

(xxi) the Liens created pursuant to the Pledge Agreement shall cease to be a
fully perfected enforceable first priority security interest; or

(xxii) a Mortgage Loan Event of Default shall occur.

 

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(b) Upon the occurrence and during the continuance of an Event of Default (other
than an Event of Default described in clauses (vi), (vii) or (viii) above) and
at any time thereafter, in addition to any other rights or remedies available to
it pursuant to this Agreement and the other Loan Documents or at law or in
equity, Lender may take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and any other Loan
Party and in and to any or all of the Collateral, including, without limitation,
declaring the Debt to be immediately due and payable, and Lender may enforce or
avail itself of any or all rights or remedies provided in the Loan Documents
against Borrower and any other Loan Party and any or all of the Collateral and
may exercise all the rights and remedies of a secured party under the Uniform
Commercial Code, as adopted and enacted by the applicable State where the
Collateral is located, against any Loan Party, including, without limitation,
all rights or remedies available at law or in equity; and upon any Event of
Default described in clauses (vi), (vii) or (viii) above, the Debt and Other
Obligations of Borrower and any other Loan Party hereunder and under the other
Loan Documents shall immediately and automatically become due and payable,
without notice or demand, and Borrower and any other Loan Party hereby expressly
waives any such notice or demand, anything contained herein or in any other Loan
Document to the contrary notwithstanding.

Section 8.2 Remedies. (a) Upon the occurrence of an Event of Default, all or any
one or more of the rights, powers, privileges and other remedies available to
Lender against Borrower and any other Loan Party under this Agreement or any of
the other Loan Documents executed and delivered by, or applicable to, Borrower
and any other Loan 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 Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to all or any part of any
of the Collateral. Any such actions taken by Lender shall be cumulative and
concurrent and may be pursued independently, singularly, successively, together
or otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
Without limiting the generality of the foregoing, Borrower and each other Loan
Party agrees that if an Event of Default is continuing (i) Lender is not subject
to any “one action” or “election of remedies” law or rule, and (ii) all liens
and other rights, remedies or privileges provided to Lender shall remain in full
force and effect until Lender has exhausted all of its remedies against the
Collateral has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.

(b) With respect to Borrower and each other Loan Party and the Collateral,
nothing contained herein or in any other Loan Document shall be construed as
requiring Lender to resort to any portion of the Collateral for the satisfaction
of any of the Debt in any 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. In
addition, Lender shall have the right from time to time to partially foreclose
the Collateral in any manner and for any amounts secured by the Pledge Agreement
then due and payable as determined by Lender in its sole discretion including,
without limitation, the following circumstances: (i) in the event Borrower and
any other Loan Party defaults beyond any applicable grace period in the payment
of one or more scheduled payments of principal and interest, Lender may
foreclose upon all or any portion of the Collateral to recover such delinquent
payments or (ii) in the event

 

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Lender elects to accelerate less than the entire outstanding principal balance
of the Loan, Lender may foreclose upon all or any portion of the Collateral to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by the Pledge Agreement as Lender may elect.
Notwithstanding one or more partial foreclosures, the remaining portions of the
Collateral shall remain subject to the Pledge Agreement and the other Loan
Documents to secure payment of sums secured by the Pledge Agreement and the
other Loan Documents and not previously recovered.

(c) Lender shall have the right from time to time to sever the Note and the
other Loan Documents into one or more separate notes, pledges and other security
documents (the “Severed Loan Documents”) in such denominations as Lender shall
determine in its sole discretion for purposes of evidencing and enforcing its
rights and remedies provided hereunder. Borrower and each other Loan Party 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. Following the occurrence
and during the continuance of an Event of Default, Borrower and each other Loan
Party hereby absolutely and irrevocably appoints Lender as its true and lawful
attorney, coupled with an interest, in its name and stead to make and execute
all documents necessary or desirable to effect the aforesaid severance, Borrower
and each other Loan Party ratifying all that its said attorney shall do by
virtue thereof; provided, however, Lender shall not make or execute any such
documents under such power until three (3) days after notice has been given to
Borrower by Lender of Lender’s intent to exercise its rights under such power.
Borrower shall be obligated to pay any costs or expenses incurred in connection
with the preparation, execution, recording or filing of the Severed Loan
Documents and the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.

(d) As used in this Section 8.2, a “foreclosure” shall include, without
limitation, any sale by power of sale.

(e) Any amounts recovered from the Collateral after and during the continuance
of an Event of Default may be applied by Lender toward the payment of any
interest and/or principal of the Loan and/or any other amounts due under the
Loan Documents in such order, priority and proportions as Lender in its sole
discretion shall determine.

Section 8.3 Remedies Cumulative; Waivers. The rights, powers and remedies of
Lender under this Agreement shall be cumulative and not exclusive of any other
right, power or remedy which Lender may have against Borrower and any other Loan
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
singularly, concurrently or otherwise, at such time and in such order as Lender
may determine in Lender’s sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of one Default or Event of Default with respect to
Borrower or any other

Loan Party shall not be construed to be a waiver of any subsequent Default or
Event of Default by Borrower or any other Loan Party or to impair any remedy,
right or power consequent thereon.

 

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Section 8.4 Right to Cure Defaults. During the continuation of an Event of
Default, Lender may, but without any obligation to do so and without notice to
or demand on any Loan Party and without releasing any Loan Party from any
obligation hereunder or being deemed to have cured any Event of Default
hereunder, make, do or perform any obligation of any Loan Party hereunder in
such manner and to such extent as Lender may deem necessary. Subject to the
rights of Mortgage Lender, if any, Lender is authorized to enter upon the
Properties for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in such Individual Property for such
purposes, and the cost and expense thereof (including reasonable attorneys’ fees
to the extent permitted by law), with interest as provided in this Section 8.4,
shall constitute a portion of the Debt and shall be due and payable to Lender
upon demand. All such costs and expenses incurred by Lender in remedying such
Event of Default or such failed payment or act or in appearing in, defending, or
bringing any action or proceeding shall bear interest at the Default Rate, for
the period after such cost or expense was incurred until the date of payment to
Lender. Upon the occurrence and during the continuance of a Mortgage Loan Event
of Loan Default, Lender may, but without any obligation to do so and without
notice to or demand on any Loan Party, Mortgage Borrower or Operating Lessee and
without releasing any Loan Party from any obligation under the Loan Documents or
being deemed to have cured any Mortgage Loan Event Default, make, do or perform
any obligation of Mortgage Borrower or Operating Lessee under the Mortgage Loan
Documents in such manner and to such extent as Lender may deem necessary. All
such costs and expenses incurred by Lender in remedying such Mortgage Loan Event
of Default or such failed payment or act shall bear interest at the Default
Rate, for the period after such cost or expense was incurred to the date of
payment to Lender. All such costs and expenses incurred by Lender together with
interest thereon calculated at the Default Rate shall be deemed to constitute a
portion of the Debt and be secured by the liens, claims and security interests
provided to Lender under the Loan Documents and shall be immediately due and
payable upon demand by Lender therefor.

ARTICLE IX – SPECIAL PROVISIONS

Section 9.1 Secondary Market Transaction.

9.1.1 Sale of Notes and Secondary Market Transaction. (a) Borrower and each
other Loan Party acknowledges and agrees that Lender may sell all or any portion
of the Loan and the Loan Documents, designate an administrative agent, or issue
one or more participations therein (such sales and/or participations,
collectively, a “Secondary Market Transaction”).

(b) At the request of Lender, and to the extent not already required to be
provided by or on behalf of Borrower or any other Loan Party under this
Agreement, Borrower and each other Loan Party shall use reasonable efforts to
provide, and cause Mortgage Borrower or Operating Lessee to provide or otherwise
cause to be provided, information not in the possession of Lender or which may
be reasonably required by Lender or take other actions reasonably required by
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Lender customarily adheres or which may be reasonably required by prospective
investors in connection with any such Secondary Market Transaction. Lender shall
have the right to provide to prospective investors any information in its
possession, including, without limitation, financial statements relating to
Borrower, each other Loan Party Guarantor, Mortgage Borrower, each other
Mortgage Loan Party, the Collateral, the Properties and any Tenant of the
Improvements. Borrower and each other Loan Party acknowledges that certain
information regarding the Loan and the parties thereto and the Properties may be
included in a private placement memorandum, prospectus or other disclosure
documents. Borrower each other Loan Party agrees that each of Borrower, Loan
Party, Mortgage Borrower, Mortgage Loan Party, Guarantor and their respective
officers and representatives, shall, at Lender’s request, at its sole cost and
expense, cooperate with Lender’s efforts to arrange for a Secondary Market
Transaction in accordance with the market standards to which Lender customarily
adheres and/or which may be required by prospective investors in connection with
any such Secondary Market Transaction.

(c) Borrower and each other Loan Party agree to make upon Lender’s written
request, without limitation, all structural or other changes to the Loan
(including delivery of one or more new component notes to replace the original
note or modify the original note to reflect multiple components of the Loan and
such new notes or modified note may have different interest rates),
modifications to any documents evidencing or securing the Loan, creation of one
or more mezzanine loans (including amending Borrower’s organizational structure
to provide for one or more mezzanine borrowers), delivery of opinions of counsel
acceptable to potential investors and addressing such matters as potential
investors may reasonably require; provided, however, that in creating such new
notes or modified notes Borrower shall not be required to modify (i) the initial
weighted average interest rate payable under the Note, (ii) the stated maturity
of the Note, (iii) the aggregate amortization of principal of the Note, (iv) any
other material economic term of the Loan, (v) create any other material
obligations on any Loan Party, or (vi) decrease the time periods during which
Borrower is permitted to perform its obligations under the Loan Documents. In
connection with the foregoing, Borrower covenants and agrees to modify the Cash
Management Agreement to reflect the newly created components.

(d) Borrower and each other Loan Party agrees that each participant pursuant to
Section 9.1.1(a) shall be entitled to the benefits of Section 2.2.3(f) and
(g) and Section 2.7 (subject to the requirements and limitations therein,
including the requirements under Section 2.7(e) (it being understood that the
documentation required under Section 2.7(e) 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 such participant shall not be
entitled to receive any greater payment under Section 2.2.3(f) or Section 2.7,
with respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a change in a requirement of law or in the interpretation
or application thereof, or compliance by such participant or the participating
Lender with any request or directive (whether or not having the force of law)
issued from any central bank or other Governmental Authority, in each case after
the participant acquired the applicable participation.

 

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(e) JPMorgan Chase Bank, National Association, or an agent appointed by it, in
either case acting solely for this purpose as an agent of the Borrower, shall
maintain a register for the recordation of the names and addresses of each
Lender, and the principal amounts (and stated interest) of the Loan owing to
each Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive absent manifest error, and the
Borrower and each Lender 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. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

(f) Each Lender that sells a participation pursuant to Section 9.1.1(a) shall,
acting solely for this purpose as an agent of the Borrower, maintain a register
on which it enters the name and address of each participant and the principal
amounts (and stated interest) of each participant’s interest in the Loan or
other Obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any participant or any
information relating to a participant’s interest in any Obligations under any
Loan Document) to any Person except to the extent that such disclosure is
necessary to establish that such Obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

9.1.2 Secondary Market Transaction Costs. All reasonable third party costs and
expenses incurred by Borrower, Guarantors and Manager in connection with
Borrower’s complying with requests made under this Section 9.1 shall be paid by
Borrower.

9.1.3 Uncross of Properties. If pursuant to Section 9.1.3 of the Mortgage Loan
Agreement any Affected Property (as defined in the Mortgage Loan Agreement) is
uncrossed from the Mortgage as required thereunder (a “Property Uncross”), each
Loan Party shall reasonably cooperate with Lender in connection with any
corresponding uncrossing or severing of a pro rata portion of the Loan and/or
such other modifications to the Loan as Lender may reasonably require in
connection with any Property Uncross. Each Loan Party shall not be obligated in
connection with a Property Uncross to agree to increase in the aggregate (A) any
monetary obligation of Borrower under the Loan Documents, or (B) any right or
other obligation of Borrower or any other Loan Party under the Loan Documents
other than to a de minimis extent. Provided that no Event of Default shall have
occurred and be continuing under the Loan Documents, Lender shall cause all
reasonable costs and expenses incurred by Borrower in connection with this
Section 9.1.3 (including, without limitation, any costs and expenses incurred by
Borrower in connection with the transfer of the Affected Property to a Special
Purpose Entity and the maintenance and operation of such Special Purpose Entity)
to be paid by Lender.

Section 9.2 Intentionally Omitted.

Section 9.3 Exculpation. (a) Subject to the qualifications below, Lender shall
not enforce the liability and obligation of any Loan Party to perform and
observe the obligations contained in the Note, this Agreement, the Pledge
Agreement or the other Loan Documents by any action or proceeding wherein a
money judgment shall be sought against any Loan Party, except that Lender may
bring a foreclosure action, an action for specific performance or any other
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realize upon its interest under the Note, this Agreement, the Pledge Agreement
and the other Loan Documents, or in the Collateral, or any other collateral
given to Lender pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Loan Party only to the extent of Loan Party’s
interest in the Collateral and in any other collateral given to Lender, and
Lender, by accepting the Note, this Agreement, the Pledge Agreement and the
other Loan Documents, agrees that it shall not sue for, seek or demand any
deficiency judgment against any Loan Party in any such action or proceeding
under or by reason of or under or in connection with the Note, this Agreement,
the Pledge Agreement or the other Loan Documents. The provisions of this Section
shall not, however, (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Lender to name any Loan Party as a party defendant in any action or
suit for foreclosure and sale under the Pledge Agreement; (c) affect the
validity or enforceability of or any guaranty made in connection with the Loan
or any of the rights and remedies of Lender thereunder; (d) impair the right of
Lender to obtain the appointment of a receiver; (e) intentionally omitted; or
(f) constitute a prohibition against Lender to seek a deficiency judgment
against any Loan Party in order to fully realize the security granted by the
Pledge Agreement or to commence any other appropriate action or proceeding in
order for Lender to exercise its remedies against all of the Collateral.

(b) Nothing contained herein shall in any manner or way release, affect or
impair the right of Lender to recover, and Borrower shall be fully and
personally liable and subject to legal action, for any actual, out-of-pocket
loss, cost, expense, damage, claim or other obligation (including without
limitation reasonable attorneys’ fees and court costs) (but excluding
consequential, punitive and special damages unless the same are required to be
paid to any third party) reasonably incurred or suffered by Lender arising out
of or in connection with the following:

(i) fraud or intentional misrepresentation by any Individual Mortgage Borrower,
any other Mortgage Loan Party, Borrower, any other Loan Party or Guarantor in
connection with the Loan;

(ii) the gross negligence or willful misconduct of any Individual Mortgage
Borrower, any other Mortgage Loan Party, Borrower, any other Loan Party or
Guarantor in connection with the Property or the Collateral;

(iii) material physical waste of any Individual Property (except if sufficient
cash flow is not available to Mortgage Borrower from the Property to prevent
such material physical waste, so long as such insufficiency does not arise from
the intentional misappropriation or conversion of revenues by any Loan Party,
Mortgage Loan Party or Guarantor);

(iv) the removal or disposal of any portion of any Individual Property in
violation of the Loan Documents after and during the continuance of an Event of
Default unless (A) such Personal Property shall be replaced by property of the
same utility and of equivalent or greater value and (B) such removal or disposal
of such Personal Property is in the ordinary course of Borrower’s or Loan
Party’s business;

 

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(v) the misappropriation, misapplication or conversion by any Individual
Mortgage Borrower, any other Mortgage Loan Party, Borrower, any other Loan Party
or Guarantor of (A) any Insurance Proceeds paid to a Loan Party by reason of any
loss, damage or destruction to any Individual Property, (B) any Awards received
by a Loan Party in connection with a Condemnation of all or a portion of any
Individual Property, (C) any Rents following and during the continuance of an
Event of Default, or (D) any Rents paid more than one month in advance;

(vi) failure to pay uncontested charges for labor or materials or other
uncontested charges or judgments incurred by an Individual Borrower that can
create Liens on any portion of any Individual Property (other than a Lien for
local real estate taxes and assessments not then due and payable, a Permitted
Encumbrance or a utility or access easement which does not materially impair the
use or value of the Property) except to the extent (A) such charges are incurred
by an Individual Borrower in accordance with the Loan Documents and
(B) sufficient funds are not available from the operation of the Individual
Property to pay such charges after payment of debt service and normal operating
expenses;

(vii) subject to the rights of Mortgage Lender under the Mortgage Loan
Documents, any security deposits, advance deposits or any other deposits
collected with respect to any Individual Property which are not delivered to
Lender upon a foreclosure of any Collateral or action in lieu thereof, to the
extent permissible under applicable law and except to the extent any such
security deposits were applied in accordance with the terms and conditions of
any of the Leases prior to the occurrence of the Event of Default that gave rise
to such foreclosure or action in lieu thereof;

(viii) Borrower’s failure to obtain and/or maintain the Interest Rate Cap
Agreement or Replacement Interest Rate Cap Agreement, as applicable, as required
pursuant to Section 2.2.7 hereof;

(ix) the determination by a court of competent jurisdiction that any payment
made by NCT Master Tenant I LLC or Holiday AL Holding LP to Borrower, any other
Loan Party, Mortgage Borrower, any other Mortgage Loan Party, Guarantor or any
of their respective Affiliates is a preference or otherwise avoidable in a
bankruptcy;

(x) with respect to the Cold Springs Property, the failure by any Person to pay
Taxes or charges for labor or materials or other charges or judgments that can
create Liens on the tax lot for such Individual Property,

(xi) failure by any Individual Mortgage Borrower, Mortgage Principal, Operating
Lessee, Borrower or any other Loan Party to maintain its status as a Single
Purpose Entity or comply with any representation, warranty or covenant set forth
in Section 4.1.30;

(xii) failure by any Individual Mortgage Borrower to perform and complete
(including payment of all costs and expenses in connection therewith) all Radon
Remediation Work; and

 

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(xiii) arising out of the failure of any of the Stoneybrook Property, the Essex
Property and/or the Hidden Lakes Property to comply with any applicable zoning
regulations or other Legal Requirements.

(c) Notwithstanding anything to the contrary in this Agreement, the Note or any
of the Loan Documents, (i) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt secured by the Pledge Agreement or to require that all Collateral shall
continue to secure all of the Debt owing to Lender in accordance with the Loan
Documents, and (ii) the Debt shall be fully recourse to Borrower in the event of
any of the following:

(A) (1) any Individual Mortgage Borrower, any other Mortgage Loan Party,
Borrower or any other Loan Party filing a voluntary petition under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(2) the filing of an involuntary petition against any Individual Mortgage
Borrower, any other Mortgage Loan Party, Borrower or any other Loan Party under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law
in which any Individual Mortgage Borrower, any other Mortgage Loan Party,
Borrower or any other Loan Party or Guarantor colludes with, or otherwise
assists such Person, or solicits or causes to be solicited petitioning creditors
for any involuntary petition against any Individual Mortgage Borrower, any other
Mortgage Loan Party, Borrower or any other Loan Party from any Person; (3) any
Individual Mortgage Borrower, any other Mortgage Loan Party, Borrower or any
other Loan Party fails to oppose any involuntary petition filed against it, by
any other Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law unless there is no good faith defense to such
involuntary petition, other than at the request or with the consent of Lender;
(4) any Individual Mortgage Borrower, any other Mortgage Loan Party, Borrower or
any other Loan Party consenting to or acquiescing in or joining in an
application for the appointment of a custodian, receiver, trustee, or examiner
for any Individual Mortgage Borrower, any other Mortgage Loan Party, Borrower or
any other Loan Party or any portion of any Individual Property or the Collateral
other than at the request or with the prior, written consent of Lender; (5) any
Individual Mortgage Borrower, any other Mortgage Loan Party, Borrower or any
other Loan Party making an assignment for the benefit of creditors other than at
the request or with the prior, written consent of Lender, or admitting, in
writing or in any legal proceeding, its insolvency or inability to pay its debts
as they become due (except for admissions reasonably believed to be truthful
when made) or

(B) if (1) any Individual Mortgage Borrower, any other Mortgage Loan Party,
Borrower or any other Loan Party fails to maintain its status as a Single
Purpose Entity or comply with any representation, warranty or covenant set forth
in Section 4.1.30 hereof (excluding any provision relating to solvency, adequacy
of capital or payment of debts as they come due), each as required by, and in
accordance with, the terms and provisions of this Agreement, the Mortgage Loan
Agreement, the Pledge Agreement or the Mortgages; but only if such failure is

 

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cited in connection with a pending bankruptcy proceeding by a court of competent
jurisdiction as a factor in connection with ordering the substantive
consolidation of the assets and liabilities of such Individual Mortgage
Borrower, any other Mortgage Loan Party, Borrower or any other Loan Party with
any Person other than an Individual Borrower or other Loan Party (except upon a
motion or pleading seeking a substantive consolidation brought or actively
supported by Lender); (3) any Individual Mortgage Borrower, any other Mortgage
Loan Party, Borrower or any other Loan Party fails to obtain Lender’s prior
written consent to any Indebtedness or voluntary Lien encumbering the Properties
or the Collateral; (4) any Individual Mortgage Borrower, any other Mortgage Loan
Party, Borrower or any other Loan Party fails to obtain Lender’s prior written
consent to any Transfer as required by this Agreement, the Mortgage Loan
Agreement, the Pledge Agreement or the Mortgages, (5) if Guarantor (or any
Person comprising Guarantor), any Individual Mortgage Borrower, any other
Mortgage Loan Party, Borrower or any other Loan Party or any Affiliate of any of
the foregoing, in connection with any enforcement action or exercise or
assertion of any right or remedy by or on behalf of Lender under or in
connection with the Guaranty, the Note, the Pledge Agreement or any other Loan
Document, raises a defense or seeks judicial intervention or injunctive or other
equitable relief of any kind, or asserts in a pleading filed in connection with
a judicial proceeding any defense against Lender or any right in connection with
any security for the Loan, other than any defense made in good faith and not for
the purpose of delaying, hindering or impairing Lender’s rights and remedies
under the Loan Documents or (6) any material modification or termination of the
Ground Lease without Lender’s consent to the extent such consent is required
pursuant to the terms of this Agreement.

Notwithstanding the foregoing, Guarantor shall not be liable for any Guaranteed
Obligations (as defined in the Guaranty) first arising or occurring following
the date of (i) the consummation of any enforcement action by Mortgage Lender
under the Mortgage Loan Documents (including, a foreclosure or acceptance of a
deed or assignment in lieu of foreclosure) which results in Mortgage Lender or a
designee thereof or a third-party purchaser taking title to the Property, or
(ii) any foreclosure, acceptance of an assignment in lieu of foreclosure upon
the Collateral for Loan by Lender and which, in each case, results in Borrower
not being under direct or indirect Control of or common Control with Guarantor,
provided, however, (A) Guarantor shall remain liable for any Guaranteed
Obligations (x) actually caused by the actions of Guarantor or any Person
Controlled by Guarantor, whether such actions occurred prior to or after the
occurrence of any of the actions set forth in clauses (i) or (ii) above (each,
an “Enforcement Action”), and (y) to the extent arising from any circumstance,
condition, action or event occurring prior to the occurrence of an Enforcement
Action, including, to the extent the applicable circumstance, condition, action
or event occurred prior to the occurrence of an Enforcement Action, but is not
discovered until after the occurrence of such Enforcement Action and
(B) Guarantor’s liability shall be automatically reinstated upon any Enforcement
Action being set aside, rescinded or invalidated, except Guarantor shall not be
liable for any loss damage, cost, expense, liability, claim or other obligation
arising from the actions or omissions of Mortgage Lender, Lender, any receiver
or any transferee or designee thereof during the period between the effective
date of the Enforcement Action and the date such Enforcement Action is set
aside, rescinded or invalidated.

 

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Section 9.4 Matters Concerning Manager. If (a) with respect to OpCo Manager, an
Event of Default hereunder has occurred and remains uncured, (b) Manager shall
become subject to a Bankruptcy Action, or (c) a default occurs beyond all
applicable notice and cure periods under the Management Agreement, Borrower or
the applicable Loan Party shall, at the request of Lender, cause the applicable
Mortgage Loan Party to terminate the Management Agreement and replace the
Manager with a Qualified Manager pursuant to a Replacement Management Agreement,
it being understood and agreed that the management fee for such Qualified
Manager shall not exceed then prevailing market rates, provided, with respect to
Holiday Manager under the foregoing clauses (b) and (c), Lender shall not
request any such termination unless (i) a Cash Sweep Period is in effect,
(ii) an Event of Default is continuing or (iii) in the reasonable judgment of
Lender, such default under the Management Agreement or such Bankruptcy Action is
reasonably likely to result in a Material Adverse Effect.

Section 9.5 Servicer. At the option of Lender, the Loan may be serviced by a
master servicer, primary servicer, special servicer and/or trustee (any such
master servicer, primary servicer, special servicer, and trustee, together with
its agents, nominees or designees, are collectively referred to as “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to Servicer
pursuant to a pooling and servicing agreement, servicing agreement, special
servicing agreement or other agreement providing for the servicing of one or
more mortgage loans (collectively, the “Servicing Agreement”) between Lender and
Servicer. Borrower shall be responsible for any reasonable set up fees or any
other initial costs relating to or arising under the Servicing Agreement, but
Borrower shall not be responsible for payment of the regular monthly master
servicing fee or trustee fee due to Servicer under the Servicing Agreement or
any fees or expenses required to be borne by, and not reimbursable to, Servicer.
Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on
demand for (a) interest payable on advances made by Servicer with respect to
delinquent debt service payments (to the extent charges are due pursuant to
Section 2.3.4 and interest at the Default Rate actually paid by Borrower in
respect of such payments are insufficient to pay the same) or expenses paid by
Servicer or trustee in respect of the protection and preservation of the
Collateral (including, without limitation, payments of Taxes and Insurance
Premiums) and (b) all costs and expenses, liquidation fees, workout fees,
special servicing fees, operating advisor fees or any other similar fees payable
by Lender to Servicer: (i) as a result of an Event of Default under the Loan or
the Loan becoming specially serviced, an enforcement, refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a “work-out” of the Loan Documents or of any insolvency or bankruptcy
proceeding; (ii) any liquidation fees, workout fees, special servicing fees,
operating advisor fees or any other similar fees that are due and payable to
Servicer under the Servicing Agreement or the trustee, which fees may be due and
payable under the Servicing Agreement on a periodic or continuing basis;
(iii) the costs of all property inspections and/or appraisals of the Properties
(or any updates to any existing inspection or appraisal) that Servicer or the
trustee may be required to obtain (other than the cost of regular annual
inspections required to be borne by Servicer under the Servicing Agreement); or
(iv) any special requests made by Borrower or any other Loan Party or Guarantor
during the term of the Loan including, without limitation, in connection with a
prepayment, assumption or modification of the Loan.

 

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ARTICLE X – MISCELLANEOUS

Section 10.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth herein or in the other Loan Documents. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on behalf
of Borrower or any other Loan Party, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.

Section 10.2 Lender’s Discretion. Whenever pursuant to this Agreement, Lender
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Lender, the decision of Lender to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Lender and shall be final and conclusive.

Section 10.3 Governing Law. (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF
NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER AND EACH OTHER
LOAN PARTY IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN 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, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL
TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS
AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE
IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD
THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF
ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH LOAN PARTY HEREBY

 

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UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR ANY LOAN PARTY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS 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 EACH LOAN PARTY 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 EACH LOAN PARTY HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT:

CT CORPORATION SYSTEM

111 EIGHTH AVENUE

NEW YORK, NEW YORK 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO ANY LOAN PARTY IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.

Section 10.4 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of the Note, or of any other Loan Document, nor consent to any departure by
Borrower or any other Loan Party therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall

 

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be effective only in the specific instance, and for the purpose, for which
given. Except as otherwise expressly provided herein, no notice to, or demand on
Borrower or any other Loan Party, shall entitle Borrower or such other Loan
Party to any other or future notice or demand in the same, similar or other
circumstances.

Section 10.5 Delay Not a Waiver. Neither any failure nor any delay on the part
of Lender in insisting upon strict performance of any term, condition, covenant
or agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Note or under any other Loan Document, or any other instrument given
as security therefor, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement, the Note or any other Loan Document, Lender shall
not be deemed to have waived any right either to require prompt payment when due
of all other amounts due under this Agreement, the Note or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.

Section 10.6 Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):

If to Lender:          JPMorgan Chase Bank, National Association

                               383 Madison Avenue, 31st Floor

                               New York, New York 10179

                               Attention: Thomas Nicholas Cassino

                               Facsimile No.: (212) 834-6029

with a copy to:      JPMorgan Chase Bank, National Association

                               SPG Middle Office/CIB

                               4 Chase Metrotech Center, 4th Floor

                               Brooklyn, New York 11245-0001

                               Attention: Nancy Alto

                               Facsimile No.: (917) 546-2564

                               and

                               Cadwalader, Wickersham & Taft LLP

                               One World Financial Center

                               New York, New York 10281

                               Attention: William P. McInerney, Esq.

                               Facsimile No.: (212) 504-6666

 

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If to Borrower or any other Loan Party:

                               c/o Fortress Investment Group LLC

                               1345 Avenue of the Americas, 45th Floor

                               New York, New York 10105

                               Attention: General Counsel

                               Fax: 212-798-6070

With a copy to:     Skadden, Arps, Slate, Meagher & Flom LLP

                               4 Times Square

                               New York, New York 10036

                               Attention: Vered Rabia, Esq.

                               Facsimile No.: (917) 777-2892

A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day; or in the case of telecopy, upon sender’s receipt of a
machine-generated confirmation of successful transmission after advice by
telephone to recipient that a telecopy notice is forthcoming.

Section 10.7 Trial by Jury. EACH LOAN PARTY 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 EACH LOAN PARTY, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

Section 10.8 Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.

Section 10.9 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

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Section 10.10 Preferences. 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, 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 of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.

Section 10.11 Waiver of Notice. No Loan Party shall 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 or such other Loan Party and
except with respect to matters for which a Loan Party is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice. Each
Loan Party 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
such other Loan Party.

Section 10.12 Remedies of Borrower. In the event that a claim or adjudication is
made that Lender or its agents have acted unreasonably or unreasonably delayed
acting in any case where by law or under this Agreement or the other Loan
Documents, Lender or such agent, as the case may be, has an obligation to act
reasonably or promptly, each Loan Party agrees that neither Lender nor its
agents shall be liable for any monetary damages, and each Loan Party’s sole
remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. The parties hereto agree that any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.

Section 10.13 Expenses; Indemnity. (a) Borrower covenants and agrees to pay or,
if Borrower fails to pay, to reimburse, Lender upon receipt of written notice
from Lender for all reasonable out-of-pocket costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by Lender in connection with
(i) the preparation, negotiation, execution and delivery of this Agreement and
the other Loan Documents and the consummation of the transactions contemplated
hereby and thereby and all the costs of furnishing all opinions by counsel for
each Loan Party (including without limitation any opinions requested by Lender
as to any legal matters arising under this Agreement or the other Loan Documents
with respect to the Properties); provided that Borrower shall not be required to
pay for costs and expenses incurred by Lender in connection with a Secondary
Market Transaction; (ii) each Loan Party’s ongoing performance of and compliance
with each Loan Party’s respective agreements and covenants contained in this
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (iii) Lender’s ongoing
performance and compliance with all agreements and conditions contained in this
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing Date; (iv) the negotiation, preparation, execution,
delivery and administration of any consents, amendments, waivers or other
modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by any Loan Party; (v) securing each Loan Party’s
compliance with any requests made pursuant to the provisions of this Agreement;
(vi) the filing and recording fees and expenses, title insurance and fees and
expenses of counsel for providing to Lender all required

 

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legal opinions, and other similar expenses incurred in creating and perfecting
the Liens in favor of Lender pursuant to this Agreement and the other Loan
Documents; (vii) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting any Loan Party, this
Agreement, the other Loan Documents, the Collateral, or any other security given
for the Loan; and (viii) enforcing any obligations of or collecting any payments
due from any Loan Party under this Agreement, the other Loan Documents or with
respect to the Collateral (including, without limitation, any fees and expenses
incurred by or payable to Servicer or a trustee in connection with the transfer
of the Loan to a special servicer upon Servicer’s anticipation of a Default or
Event of Default, liquidation fees, workout fees, special servicing fees,
operating advisor fees or any other similar fees and interest payable on
advances made by the Servicer with respect to delinquent debt service payments
or expenses of curing any Loan Party’s defaults under the Loan Documents) 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 or any other amounts required under Section 9.5;
provided, however, that no Loan Party shall be liable for the payment of any
such costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender. Any cost and
expenses due and payable to Lender may be paid from any amounts in the Mezzanine
Deposit Account.

(b) Each Loan Party shall indemnify, defend and hold harmless the Indemnified
Parties from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not an Indemnified Party shall be designated a party thereto), that
may be imposed on, incurred by, or asserted against any Indemnified Party in any
manner relating to or arising out of (i) any breach by any Loan Party of its
obligations under, or any material misrepresentation by any Loan Party contained
in, this Agreement or the other Loan Documents, or (ii) the use or intended use
of the proceeds of the Loan (collectively, the “Indemnified Liabilities”);
provided, however, that Borrower shall not have any obligation to any
Indemnified Party hereunder to the extent that such Indemnified Liabilities
arise from the gross negligence, illegal acts, fraud or willful misconduct of
such Indemnified Party. To the extent that the undertaking to indemnify, defend
and hold harmless set forth in the preceding sentence may be unenforceable
because it violates any law or public policy, Loan Party shall pay the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnified Parties.

Section 10.14 Schedules Incorporated. The Schedules annexed hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.

Section 10.15 Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to this Agreement, the Note and the other Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which any Loan Party may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by any Loan Party 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 such Loan Party.

 

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Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries. (a)
Each Loan Party 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 any Loan Party and Lender nor to
grant Lender any interest in the Collateral other than that of pledgee,
beneficiary or lender.

(b) This Agreement and the other Loan Documents are solely for the benefit of
Lender and each Loan Party and nothing contained in this Agreement or the other
Loan Documents shall be deemed to confer upon anyone other than Lender and each
Loan Party any right to insist upon or to enforce the performance or observance
of any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.

Section 10.17 Publicity. All news releases, publicity or advertising by any Loan
Party or its Affiliates through any media intended to reach the general public
which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, JPMorgan Chase Bank, National Association, or any of their
Affiliates shall be subject to the prior written approval of Lender and JPMorgan
Chase Bank, National Association in their sole discretion; provided, that the
foregoing shall not include any filings which may be required with Governmental
Authorities and financial or regulatory authorities which shall not be subject
to the foregoing. No news release, publicity or advertising intended to reach
the general public shall contain the name of Fortress Investment Group or any
Affiliate thereof, or any part thereof, without the prior written consent of
Borrower, provided that, Lender is expressly permitted hereunder, and no consent
of Borrower or any other Person shall be required with respect to, Lender’s use
of the name Fortress Investment Group or any Affiliate thereof, or any part
thereof in connection with only one or more Secondary Market Transactions of all
or any part of the Loan and with Lender’s reasonable and customary marketing
activities that are a part of any such Secondary Market Transaction.

Section 10.18 Cross Default; Cross Collateralization; Waiver of Marshalling of
Assets. (a) Each Loan Party acknowledges that Lender has made the Loan to
Borrower upon the security of its collective interest in the Collateral and in
reliance upon the aggregate of the Collateral taken together being of greater
value as collateral security than the sum of each of the portions of the
Collateral taken separately. Each Loan Party agrees that (i) an Event of Default
under the Pledge Agreement shall constitute an Event of Default under each of
the other Loan Documents and (ii) an Event of Default under the Note or this
Agreement shall constitute an Event of Default under the Pledge Agreement.

 

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(b) To the fullest extent permitted by law, each Loan Party, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of such
Loan Party, such Loan Party’s partners and others with interests in such Loan
Party, and of the Collateral, 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 Collateral 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 Collateral s in
preference to every other claimant whatsoever. In addition, each Loan Party, for
itself and its successors and assigns, waives in the event of foreclosure of any
portion of or all of the Collateral, any equitable right otherwise available to
Borrower which would require the separate sale of portions of the Collateral or
require Lender to exhaust its remedies against any portion of the Collateral or
any combination of the Collateral before proceeding against any other portion of
the Collateral or combination of the Collateral; and further in the event of
such foreclosure each Loan Party 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 Collateral.

Section 10.19 Waiver of Counterclaim. Each Loan Party 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.

Section 10.20 Conflict; Construction of Documents; Reliance. In the event of any
conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Each Loan Party acknowledges that, with
respect to the Loan, it 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 any Loan Party, and each Loan Party
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. Each Loan Party 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 each Loan Party
or its Affiliates.

Section 10.21 Brokers and Financial Advisors. Each Loan Party hereby represents
that it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the transactions contemplated by
this Agreement. Each Loan Party hereby agrees to indemnify, defend and hold
Lender harmless from and against any and all claims, liabilities, costs and
expenses of any kind (including Lender’s attorneys’ fees and expenses) in any
way relating to or arising from a claim by any Person that such Person acted on
behalf of any Loan Party or Lender in connection with the transactions
contemplated herein. The provisions of this Section 10.21 shall survive the
expiration and termination of this Agreement and the payment of the Debt.

 

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Section 10.22 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, between any Loan Party and Lender
are superseded by the terms of this Agreement and the other Loan Documents.

Section 10.23 Joint and Several Liability. If Borrower consists of more than one
(1) Person the obligations and liabilities of each of the entities comprising
the Borrower shall be joint and several. If Leasehold Pledgor consists of more
than one (1) Person the obligations and liabilities of each of the entities
comprising Leasehold Pledgor shall be joint and several. If Corporate Pledgor
consists of more than one (1) Person the obligations and liabilities of each of
the entities comprising the Corporate Pledgor shall be joint and several.

Section 10.24 Certain Additional Rights of Lender (VCOC). Notwithstanding
anything to the contrary contained in this Agreement, Lender shall have:

(a) the right to routinely consult with and advise Borrower’s management
regarding the significant business activities and business and financial
developments of Borrower; provided, however, that such consultations shall not
include discussions of environmental compliance programs or disposal of
hazardous substances. Consultation meetings should occur on a regular basis (no
less frequently than quarterly) with Lender having the right to call special
meetings at any reasonable times and upon reasonable advance notice;

(b) the right, upon not less than fifteen (15) Business Days prior written
notice to the Loan Parties in accordance with the terms of this Agreement, to
examine the books and records of the Loan Parties at any reasonable times during
business hours but no more than one (1) time during any calendar year; provided
that any such examination shall be conducted so as not to unreasonably interfere
with the business of Borrower, Master Tenant and each Operator or any Tenants or
other occupants of any Individual Property;

(c) the right, in accordance with the terms of this Agreement, including,
without limitation, Section 5.1.11 hereof, to receive monthly, quarterly and
year-end financial reports, including balance sheets, statements of income,
shareholder’s equity and cash flow, a management report and schedules of
outstanding indebtedness; and

(d) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to approve any acquisition by Borrower
of any other significant property (other than personal property required for the
day to day operation of the Property).

The rights described above in this Section 10.24 may be exercised by any entity
which owns and controls, directly or indirectly, substantially all of the
interests in Lender.

 

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Section 10.25 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. (a) Notwithstanding anything to the contrary in any Loan Document
or in any other agreement, arrangement or understanding among the respective
parties thereto, each party hereto acknowledges that any liability of any EEA
Financial Institution arising under any Loan Document, to the extent such
liability is unsecured, may be subject to the write-down and conversion powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(i) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(ii) the effects of any Bail-in Action on any such liability, including, if
applicable:

(A) a reduction in full or in part or cancellation of any such liability;

(B) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

As used in this Section 10.25 the following terms have the following meanings
ascribed thereto: (i) “Bail-In Action” means the exercise of any Write-Down and
Conversion Powers by the applicable EEA Resolution Authority in respect of any
liability of an EEA Financial Institution; (ii) “Bail-In Legislation” means,
with respect to any EEA Member Country implementing Article 55 of
Directive 2014/59/EU of the European Parliament and of the Council of the
European Union, the implementing law for such EEA Member Country from time to
time which is described in the EU Bail-In Legislation Schedule; (iii) “EEA
Financial Institution” means (x) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority; (y) any entity established in an EEA Member Country
which is a parent of an institution described in clause (x) of this definition,
or (x) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (x) or (y) of this definition
and is subject to consolidated supervision with its parent; (iv) “EEA Member
Country” means any of the member states of the European Union, Iceland,
Liechtenstein, and Norway; (v) “EEA Resolution Authority” means any public
administrative authority or any person entrusted with public administrative
authority of any EEA Member Country (including any delegee) having
responsibility for the resolution of any EEA Financial Institution; (vi) “EU
Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time; and (vii) “Write Down and Conversion Powers” means, with
respect to any EEA Resolution Authority, the write-down and conversion powers of
such EEA Resolution Authority from time to time under the Bail-In Legislation
for the applicable EEA Member Country, which write-down and conversion powers
are described in the EU Bail-In Legislation Schedule.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

-123-

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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.

 

NIC 12 OWNER LLC NIC 13 OWNER LLC, each a Delaware limited liability company By:
 

/s/ Ivy Hernandez

 

Name:  Ivy Hernandez

 

Title:   Vice President

[SIGNATURES CONTINUE ON NEXT PAGE

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The undersigned hereby execute this Agreement solely for the purposes of
agreeing to comply with, perform and observe all obligations, covenants,
obligations and duties and make, as and when required, the representations and
warranties, hereunder and under any other Loan Document that purport to bind it
or apply to it as a “Leasehold Pledgor” or “Corporate Pledgor”.

 

 

NEEDLE INTERCO PARENT LLC,

    a Delaware limited liability company

  By:  

/s/ Ivy Hernandez

   

Name:  Ivy Hernandez

   

Title:   Vice President

NIC 13 DURHAM REGENT INC. NIC 13 JORDAN OAKS INC., each a Delaware corporation  
By:  

/s/ Ivy Hernandez

   

Name:  Ivy Hernandez

   

Title:   Vice President

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

LENDER:

JPMORGAN CHASE BANK, NATIONAL

ASSOCIATION, a banking association chartered under the laws of the United States
of America

By:  

/s/ Simon B. Burce

  Name: Simon B. Burce  

Title:   Vice President

 

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

SCHEDULE I-A

(INDIVIDUAL MORTGAGE BORROWERS)

 

NIC 12 Arlington Plaza Owner LLC

NIC 13 The Bentley Owner LLC

NIC 12 Blair House Owner LLC

NIC 12 Blue Water Lodge Owner LLC

NIC 12 Briarcrest Estates Owner LLC

NIC 12 Chateau Ridgeland Owner LLC

NIC 12 Cherry Laurel Owner LLC

NIC 12 Colonial Harbor Owner LLC

NIC 12 Country Squire Owner LLC

NIC 12 Courtyard at Lakewood Owner LLC

NIC 12 Desoto Beach Club Owner LLC

NIC 13 Dogwood Estates Owner LLC

NIC 13 Durham Regent Owner LP

NIC 12 El Dorado Owner LLC

NIC 12 Essex House Owner LLC

NIC 12 Fleming Point Owner LLC

NIC 13 Fountains at Hidden Lakes Owner LLC

NIC 12 Grasslands Estates Owner LLC

NIC 12 Greeley Place Owner LLC

NIC 12 Grizzly Peak Owner LLC

NIC 13 Hidden Lakes Owner LLC

NIC 13 Illahee Hills Owner LLC

NIC 12 Jackson Oaks Owner LLC

NIC 13 Jordan Oaks Owner LP

NIC 13 Lodge at Cold Spring Owner LLC

NIC 13 Madison Estates Owner LLC

NIC 13 Manor at Oakridge Owner LLC

NIC 12 Maple Downs Owner LLC

NIC 13 Oakwood Hills Owner LLC

NIC 13 Orchid Terrace Owner LLC

NIC 13 Palmer Hills Owner LLC

NIC 12 Parkwood Estates Owner LLC

NIC 13 Pinewood Hills Owner LLC

NIC 12 Pioneer Valley Lodge Owner LLC

NIC 13 Pueblo Regent Owner LLC

NIC 12 Regency Residence Owner LLC

NIC 13 The Regent Owner LLC

NIC 13 Rock Creek Owner LLC

NIC 13 Sheldon Oaks Owner LLC

 

SCH. I-A -1

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NIC 12 Simi Hills Owner LLC

NIC 13 Sky Peaks Owner LLC

NIC 12 Stoneybrook Lodge Owner LLC

NIC 12 Summerfield Estates Owner LLC

NIC 13 Thornton Place Owner LLC

NIC 13 Uffelman Estates Owner LLC

NIC 12 Ventura Place Owner LLC

NIC 13 Village Gate Owner LLC

NIC 13 Vista De La Montana Owner LLC

NIC 13 Walnut Woods Owner LLC

NIC 13 The Westmont Owner LLC

NIC 13 Whiterock Court Owner LLC

 

SCH. I-A -2

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SCHEDULE I-B

(OPCO MANAGERS)

NIC 12 Arlington Plaza Management LLC

NIC 13 The Bentley Management LLC

NIC 12 Blair House Management LLC

NIC 12 Blue Water Lodge Management LLC

NIC 12 Briarcrest Estates Management LLC

NIC 12 Chateau Ridgeland Management LLC

NIC 12 Cherry Laurel Management LLC

NIC 12 Colonial Harbor Management LLC

NIC 12 Country Squire Management LLC

NIC 12 Courtyard at Lakewood Management LLC

NIC 12 Desoto Beach Club Management LLC

NIC 13 Dogwood Estates Management LLC

NIC 13 Durham Regent Management LLC

NIC 12 El Dorado Management LLC

NIC 12 Essex House Management LLC

NIC 12 Fleming Point Management LLC

NIC 13 Fountains at Hidden Lakes Management LLC

NIC 12 Grasslands Estates Management LLC

NIC 12 Greeley Place Management LLC

NIC 12 Grizzly Peak Management LLC

NIC 13 Hidden Lakes Management LLC

NIC 13 Illahee Hills Management LLC

NIC 12 Jackson Oaks Management LLC

NIC 13 Jordan Oaks Management LLC

NIC 13 Lodge at Cold Spring Management LLC

NIC 13 Madison Estates Management LLC

NIC 13 Manor at Oakridge Management LLC

NIC 12 Maple Downs Management LLC

NIC 13 Oakwood Hills Management LLC

NIC 13 Orchid Terrace Management LLC

NIC 13 Palmer Hills Management LLC

NIC 12 Parkwood Estates Management LLC

NIC 13 Pinewood Hills Management LLC

NIC 12 Pioneer Valley Lodge Management LLC

NIC 13 Pueblo Regent Management LLC

NIC 12 Regency Residence Management LLC

NIC 13 The Regent Management LLC

NIC 13 Rock Creek Management LLC

NIC 13 Sheldon Oaks Management LLC

NIC 12 Simi Hills Management LLC

NIC 13 Sky Peaks Management LLC

NIC 12 Stoneybrook Lodge Management LLC

NIC 12 Summerfield Estates Management LLC

 

SCH. I-B -1

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NIC 13 Thornton Place Management LLC

NIC 13 Uffelman Estates Management LLC

NIC 12 Ventura Place Management LLC

NIC 13 Village Gate Management LLC

NIC 13 Vista De La Montana Management LLC

NIC 13 Walnut Woods Management LLC

NIC 13 The Westmont Management LLC

NIC 13 Whiterock Court Management LLC

 

SCH. I-B -2

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SCHEDULE II-A

(RENT ROLL)

 

SCH. II -1

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SCHEDULE II-B

MAJOR CONTRACTS

NONE

 

SCH. II -1

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

SCHEDULE III

INTENTIONALLY OMITTED

 

SCH. III-1

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SCHEDULE IV

(ORGANIZATIONAL CHART OF BORROWER)

 

SCH. IV-1

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SCHEDULE V

(RELEASE AMOUNTS)

 

Mezzanine Allocated Loan Amounts

 

General Property Information

 

#

  

Property Name

  

City

  

State

   Mezzanine ALA  

1

   Parkwood Estates    Fort Collins    Colorado    $ 1,634,000  

2

   Madison Estates    San Antonio    Texas    $ 1,183,000  

3

   Ventura Place    Lubbock    Texas    $ 1,802,000  

4

   The Westmont    Santa Clara    California    $ 3,286,000  

5

   Sky Peaks    Reno    Nevada    $ 2,414,000  

6

   Blair House    Normal    Illinois    $ 1,653,000  

7

   Jackson Oaks    Paducah    Kentucky    $ 1,150,000  

8

   Blue Water Lodge    Fort Gratiot    Michigan    $ 2,022,000  

9

   Oakwood Hills    Eau Claire    Wisconsin    $ 1,710,000  

10

   Essex House    Lemoyne    Pennsylvania    $ 2,089,000  

11

   The Manor at Oakridge    Harrisburg    Pennsylvania    $ 1,935,000  

12

   Walnut Woods    Boyertown    Pennsylvania    $ 1,993,000  

13

   Grizzly Peak    Missoula    Montana    $ 2,213,000  

14

   The Fountains at Hidden Lakes    Salem    Oregon    $ 1,246,000  

15

   Hidden Lakes    Salem    Oregon    $ 2,309,000  

16

   The Regent    Corvallis    Oregon    $ 1,553,000  

17

   Rock Creek    Hillsboro    Oregon    $ 2,242,000  

18

   Sheldon Oaks    Eugene    Oregon    $ 1,878,000  

19

   Stonybrook Lodge    Corvallis    Oregon    $ 3,459,000  

20

   Colonial Harbor    Yorktown    Virginia    $ 2,146,000  

21

   Durham Regent    Durham    North Carolina    $ 2,099,000  

22

   Jordan Oaks    Cary    North Carolina    $ 2,606,000  

23

   Vista de la Montana    Surprise    Arizona    $ 1,609,000  

24

   Simi Hills    Simi Valley    California    $ 3,382,000  

25

   Lodge at Cold Spring    Rocky Hill    Connecticut    $ 1,906,000  

26

   Village Gate    Farmington    Connecticut    $ 3,027,000  

27

   Fleming Point    Greece    New York    $ 2,539,000  

28

   Maple Downs    Fayetteville    New York    $ 2,701,000  

29

   Cherry Laurel    Tallahassee    Florida    $ 1,646,000  

30

   Desoto Beach Club    Sarasota    Florida    $ 2,290,000  

31

   Regency Residence    Port Richey    Florida    $ 1,926,000  

32

   Summerfield Estates    Shreveport    Louisiana    $ 167,000  

33

   Chateau Ridgeland    Ridgeland    Mississippi    $ 957,000  

34

   Uffelman Estates    Clarksville    Tennessee    $ 1,227,000  

35

   Arlington Plaza    Arlington    Texas    $ 972,000  

36

   The Bentley    Dallas    Texas    $ 1,782,000  

37

   Whiterock Court    Dallas    Texas    $ 1,653,000  

38

   Dogwood Estates    Denton    Texas    $ 2,357,000  

39

   The El Dorado    Richardson    Texas    $ 939,000  

40

   Pinewood Hills    Flower Mound    Texas    $ 1,916,000  

 

SCH. V-1

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Mezzanine Allocated Loan Amounts (cont.)

 

General Property Information

 

#

  

Property Name

  

City

  

State

   Mezzanine ALA  

41

   The Courtyard at Lakewood    Lakewood    Colorado    $ 1,773,000  

42

   Greeley Place    Greeley    Colorado    $ 1,150,000  

43

   Pueblo Regent    Pueblo    Colorado    $ 1,179,000  

44

   Illahee Hills    Urbandale    Iowa    $ 1,466,000  

45

   Palmer Hills    Bettendorf    Iowa    $ 1,389,000  

46

   Grasslands Estates    Wichita    Kansas    $ 1,719,000  

47

   Thornton Place    Topeka    Kansas    $ 1,524,000  

48

   Briarcrest Estates    Ballwin    Missouri    $ 1,476,000  

49

   Country Squire    St. Joseph    Missouri    $ 1,629,000  

50

   Orchid Terrace    St. Louis    Missouri    $ 2,989,000  

51

   Pioneer Valley Lodge    North Logan    Utah    $ 1,088,000              

 

 

 

Total

         $ 95,000,000              

 

 

 

 

SCH. V-2

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SCHEDULE VI

INTENTIONALLY OMITTED

 

SCH. VI-1

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SCHEDULE VII

LEASEHOLD PLEDGOR COMPANY AGREEMENT

 

SCH. VII-1

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SCHEDULE VIII

MORTGAGE BORROWER COMPANY AGREEMENTS

 

SCH. VIII-1