Exhibit 10.4

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MEZZANINE A LOAN AGREEMENT

 

Dated as of May 10, 2005

 

Among

 

W-BALTIMORE MAJORITY MEZZ BORROWER, LLC,

W-BALTIMORE MINORITY MEZZ BORROWER, LLC,

PAH BATTERYMARCH REALTY COMPANY MEZZ BORROWER, LLC,

CASA MARINA MEZZ BORROWER, LLC,

KEY WEST MEZZ BORROWER, LLC,

CONQUISTADOR MEZZANINE (SPE), INC.,

EL SAN JUAN MEZZ BORROWER, INC.,

ATLANTA AMERICAN MEZZ BORROWER, LLC

AND WYNDHAM FORT LAUDERDALE

AIRPORT MEZZ BORROWER, LLC,

collectively, as Borrower

 

and

 

JPMORGAN CHASE BANK, N.A.,

 

and

 

BEAR STEARNS COMMERCIAL MORTGAGE, INC.,

collectively, as Lender

 

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TABLE OF CONTENTS

 

          Page

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I.      DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1.

  

Definitions

   2

Section 1.2.

  

Principles of Construction

   38

II.     GENERAL TERMS

Section 2.1.

  

Loan Commitment; Disbursement to Borrower

   39

Section 2.2.

  

Interest Generally

   39

Section 2.3.

  

Loan Payment

   45

Section 2.4.

  

Prepayments

   46

Section 2.5.

  

Release of Collateral

   49

Section 2.6.

  

Cash Management

   51

Section 2.7.

  

Extension of the Initial Maturity Date

   54

Section 2.8.

  

Substitution of Properties

   55

Section 2.9.

  

Release of Out Parcels

   61

Section 2.10.

  

Development at the Property Adjacent to the El Con Individual Property

   64

III.   CONDITIONS PRECEDENT

Section 3.1.

  

Conditions Precedent to Closing

   64

IV.   REPRESENTATIONS AND WARRANTIES

Section 4.1.

  

Borrower Representations

   68

Section 4.2.

  

Survival of Representations

   78

V.     BORROWER COVENANTS

Section 5.1.

  

Affirmative Covenants

   78

Section 5.2.

  

Negative Covenants

   100

VI.   INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS

Section 6.1.

  

Insurance

   112

Section 6.2.

  

Casualty

   113

Section 6.3.

  

Condemnation

   113

Section 6.4.

  

Restoration

   114

VII. RESERVE FUNDS

Section 7.1.

  

Required Repairs

   114

Section 7.2.

  

Tax and Insurance Escrow Fund

   114

 

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Section 7.3.

  

Replacements and Replacement Reserve

   115

Section 7.4.

  

Ground Lease Escrow Fund

   119

Section 7.5.

  

Reserve Funds, Generally

   119

Section 7.6.

  

Transfer of Reserve Funds under Mortgage Loan

   121

VIII. DEFAULTS

Section 8.1.

  

Event of Default

   122

Section 8.2.

  

Remedies

   125

IX.   SPECIAL PROVISIONS

Section 9.1.

  

Sale of Notes and Securitization

   127

Section 9.2.

  

Securitization Indemnification

   130

Section 9.3.

  

Intentionally Omitted

   134

Section 9.4.

  

Exculpation

   134

Section 9.5.

  

Matters Concerning Manager

   136

Section 9.6.

  

Servicer

   137

Section 9.7.

  

Matters Concerning Franchisor

   137

X.     MISCELLANEOUS

Section 10.1.

  

Survival

   138

Section 10.2.

  

Lender’s Discretion

   138

Section 10.3.

  

Governing Law

   138

Section 10.4.

  

Modification, Waiver in Writing

   139

Section 10.5.

  

Delay Not a Waiver

   140

Section 10.6.

  

Notices

   140

Section 10.7.

  

Trial by Jury

   141

Section 10.8.

  

Headings

   141

Section 10.9.

  

Severability

   141

Section 10.10.

  

Preferences

   141

Section 10.11.

  

Waiver of Notice

   142

Section 10.12.

  

Remedies of Borrower

   142

Section 10.13.

  

Expenses; Indemnity Deed of Trust

   142

Section 10.14.

  

Schedules Incorporated

   143

Section 10.15.

  

Offsets, Counterclaims and Defenses

   143

Section 10.16.

  

No Joint Venture or Partnership; No Third Party Beneficiaries

   144

Section 10.17.

  

Publicity

   144

Section 10.18.

  

Cross Default; Cross Collateralization; Waiver of Marshalling of Assets

   144

Section 10.19.

  

Waiver of Counterclaim

   145

Section 10.20.

  

Conflict; Construction of Documents; Reliance

   145

Section 10.21.

  

Brokers and Financial Advisors

   145

Section 10.22.

  

Prior Agreements

   146

Section 10.23.

  

Joint and Several Liability

   146

Section 10.24.

  

Co-Lenders

   146

Section 10.25.

  

Maximum Principal Indebtedness on Minority Interest Borrower

   146

Section 10.26.

  

Certain Additional Rights of Lender (VCOC)

   147

 

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SCHEDULES

 

Schedule 1.1

   –   

Out Parcels

Schedule 1.2

   –   

Pre-approved Qualified Franchisor

Schedule 1.3

   –   

Pre-approved Qualified Manager

Schedule 1.4

   –   

Properties – Allocated Loan Amounts

Schedule 1.5

   –   

Parking Lease

Schedule 1.6

   –   

Ferryboat Charters

Schedule 1.7

   –   

Ship Mortgages

Schedule 1.8

   –   

Submerged Land Leases

Schedule 1.9

   –   

Qualified Transferee

Schedule 2.3.1

   –   

Amortization Schedule

Schedule 2.10

   –   

Tempus Documents

Schedule 4.1.1

   –   

Organizational Structure

Schedule 4.1.4

   –   

Litigation

Schedule 4.1.5

   –   

Material Agreements

Schedule 4.1.12

   –   

Condemnation

Schedule 4.1.17

   –   

Assessments

Schedule 4.1.20

   –   

Insurance Claims

Schedule 4.1.26

   –   

Rent Roll

Schedule 5.1.11

   –   

Smith Travel Research Report

Schedule 5.2.1

   –   

Permitted Brands

Schedule 5.2.10

   –   

Permitted FF&E Financing

Schedule 7.1.1

   –   

Required Repairs – Deadlines for Completion

Schedule 9.6

   –   

Servicers

 

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MEZZANINE A LOAN AGREEMENT

 

THIS MEZZANINE A LOAN AGREEMENT, dated as of May 10, 2005 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), is made among JPMORGAN CHASE BANK, N.A., a national banking
association, having an address at 270 Park Avenue, New York, New York 10017-2014
and BEAR STEARNS COMMERCIAL MORTGAGE, INC., a New York corporation, having an
address at 383 Madison Avenue, New York, New York 10179 (each, a “Co-Lender” and
collectively, “Lender”), and W-Baltimore Majority Mezz Borrower, LLC and
W-Baltimore Minority Mezz Borrower, LLC (collectively, “Baltimore Borrower”),
PAH Batterymarch Realty Company Mezz Borrower, LLC (“Boston Borrower”), Casa
Marina Mezz Borrower, LLC (“Casa Marina Borrower”), Key West Mezz Borrower, LLC
(“Reach Borrower”), Conquistador Mezzanine (SPE), Inc. (“El Con Borrower”), El
San Juan Mezz Borrower, Inc. (“El San Juan Borrower”), Atlanta American Mezz
Borrower, LLC (“Atlanta Borrower”) and Wyndham Fort Lauderdale Airport Mezz
Borrower, LLC (“Fort Lauderdale Borrower”), each having an address c/o Wyndham
International, Inc., 1950 Stemmons Freeway, Suite 6001, Dallas, Texas 75207
(each, an “Individual Borrower” and collectively, “Borrower”).

 

W I T N E S S E T H:

 

WHEREAS, JPMorgan Chase Bank, N.A., a national banking association, having an
address at 270 Park Avenue, New York, New York 10017-2014 and Bear Stearns
Commercial Mortgage, Inc., a New York corporation, having an address at 383
Madison Avenue, New York, New York 10179, collectively, as mortgage lender
(“Mortgage Lender”), has made a loan in the original principal amount of Four
Hundred Seventy-Five Million and No/100 Dollars $475,000,000.00 (the “Mortgage
Loan”) to W-#2 Baltimore, LLC (“Baltimore Mortgage Borrower”), W-Boston, LLC
(“Boston Mortgage Borrower”), Casa Marina Owner, LLC (“Casa Marina Mortgage
Borrower”), Key West Reach Owner, LLC (“Reach Mortgage Borrower”), El
Conquistador Partnership L.P., S.E. (“El Con Mortgage Borrower”), Posadas De San
Juan Associates (“El San Juan Mortgage Borrower”), Atlanta American Owner, LLC
(“Atlantic Mortgage Borrower”) and Ft. Lauderdale Owner, LLC (“Fort Lauderdale
Mortgage Borrower”), each having an address c/o Wyndham International, Inc.,
1950 Stemmons Freeway, Suite 6001, Dallas, Texas 75207 (each, an “Individual
Mortgage Borrower” and collectively, “Mortgage Borrower”) pursuant to that
certain Loan Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the “Mortgage Loan Agreement”) among
Mortgage Borrower, Travis Real Estate Group Joint Venture (“Baltimore Owner”)
and Mortgage Lender, which Mortgage Loan is evidenced by a Promissory Note in
the amount of the Mortgage Loan of even date therewith as amended, supplemented
or otherwise modified from time to time, the “Mortgage Note”) made by Mortgage
Borrower to Mortgage Lender and secured by, among other things, the Mortgage (as
hereinafter defined) by the applicable Mortgage Borrower or Baltimore Owner, as
applicable, in favor of Mortgage Lender pursuant to which the applicable
Mortgage Borrower and Baltimore Owner have granted to Mortgage Lender a first
priority mortgage on, among other things, the real property and other collateral
as more fully described in such Mortgage (collectively, the “Properties”);

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WHEREAS, Borrower is the direct or indirect legal and beneficial owner of all of
the interests in Mortgage Borrower and Baltimore Owner;

 

WHEREAS, Borrower has requested Lender to make a loan to it in the aggregate
principal amount of Fifty Million and No/100 Dollars ($50,000,000.00) (the
“Loan”); and

 

WHEREAS, as a condition precedent to the obligation of Lender to make the Loan
to Borrower, Borrower has entered into that certain Pledge and Security
Agreement, dated as of the date hereof, in favor of Lender (as amended,
supplemented or otherwise modified from time to time, the “Pledge Agreement”),
pursuant to which Borrower has granted to Lender a first priority security
interest in the Collateral (as defined below) as collateral security for the
Debt (as defined below).

 

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:

 

  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 Bank” shall mean a bank or other financial institution which (a) has
a long term unsecured debt rating of at least “A” (or its equivalent) by each of
the Rating Agencies, which rating shall not include a “t” or otherwise reflect a
termination risk or (b) is otherwise acceptable to the Rating Agencies.
Notwithstanding the foregoing, JPMorgan Chase Bank, N.A. shall be an Acceptable
Bank from and after the occurrence of a Securitization.

 

“Acceptable Counterparty” shall mean any counterparty to the Interest Rate Cap
Agreement that (a) has and shall maintain (or who has a guarantor of its
obligations as counterparty which has and shall maintain), until the expiration
of the applicable Interest Rate Cap Agreement a long-term unsecured debt rating
of at least “A” (or its equivalent) by each of the Rating Agencies, which rating
shall not include a “t” or otherwise reflect a termination risk or (b) is
otherwise acceptable to the Rating Agencies; provided, however, if the
Acceptable Counterparty has a long-term unsecured debt rating of at least “AAA”
by S&P (or its equivalent by Moody’s), no additional rating shall be required by
Fitch if Fitch is one of the Rating Agencies rating the Securities.

 

“Actual Amount” shall have the meaning set forth in Section 7.3.1(a) hereof.

 

“Additional Insolvency Opinion” shall have the meaning set forth in Section
4.1.30(b) hereof.

 

“Adjusted Release Amount” shall mean, (a) for each Non-Minority Interest
Property, one hundred twenty percent (120%) of the Release Amount for such
Non-Minority

 

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Interest Property, and (b) for each Minority Interest Property, one hundred
percent (100%) of the Release Amount for such Minority Interest Property.

 

“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 executive officer of such Person or of an
Affiliate of such Person.

 

“Affiliated Franchisor” shall mean any Franchisor which is an Affiliate of
Mortgage Borrower, Borrower, Guarantor, Mortgage Principal, Mezzanine B Borrower
or Mezzanine C Borrower.

 

“Affiliated Loans” shall mean a loan made by Lender to an Affiliate of Borrower
or Guarantor.

 

“Affiliated Manager” shall mean any Manager which is an Affiliate of Mortgage
Borrower, Borrower, Guarantor, Mortgage Principal, Mezzanine B Borrower or
Mezzanine C Borrower.

 

“Agent” shall mean any Eligible Institution acting as Agent under the Cash
Management Agreement.

 

“ALTA” shall mean American Land Title Association, or any successor thereto.

 

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

 

“Annual Budget” shall mean the operating budget, including all planned Capital
Expenditures, for the Properties prepared by Mortgage Borrower for the
applicable Fiscal Year or other period.

 

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

 

“Applicable Month” shall have the meaning set forth in Section 7.3.1(a) hereof.

 

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

 

“Assignment of Leases” shall mean (a) with respect to each Individual Property
(other than the Baltimore Individual Property), that certain first priority
Assignment of Leases and Rents, dated as of the date hereof, from the applicable
Individual Mortgage Borrower, as assignor, to Mortgage Lender, as assignee,
assigning to Mortgage Lender all of such Mortgage Borrower’s interest in and to
the Leases and Rents of such Individual Property as security for the Mortgage
Loan, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time (provided that with respect to the El Con Individual
Property and the El San Juan Individual Property only, such Assignment of Leases
and Rents shall not be recorded) and, (b) with respect to the Baltimore
Individual Property, that certain first priority

 

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Indemnity Assignment of Leases and Rents, dated as of the date hereof, from
Baltimore Owner, as assignor, to Mortgage Lender, as assignee, assigning to
Mortgage Lender all of Baltimore Owner’s interest in and to the Leases and Rents
of the Baltimore Individual Property as security for the Baltimore Owner
Obligations, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Assignment of Management Agreement” shall mean that certain Assignment of
Management Agreement and Subordination of Management Fees, dated as of the date
hereof, among Mortgage Lender, Mortgage Borrower, Baltimore Owner and Manager,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

 

“Assumed Note Rate” shall have the meaning set forth in Section 2.4.1 hereof.

 

“Atlanta Borrower” shall have the meaning set forth in the introductory
paragraph hereto.

 

“Atlanta Individual Property” shall mean the Individual Property located in
Atlanta, Georgia and known as the Atlanta American.

 

“Atlanta Mortgage Borrower” shall have the meaning set forth in the Recitals.

 

“Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation with respect to all or any part of any Individual
Property.

 

“Baltimore Borrower” shall have the meaning set forth in the introductory
paragraph hereto.

 

“Baltimore Individual Property” shall mean the Individual Property located in
Baltimore, Maryland.

 

“Baltimore Mortgage Borrower” shall have the meaning set forth in the Recitals.

 

“Baltimore Owner” shall have the meaning set forth in the Recitals.

 

“Baltimore Owner Obligations” shall mean the obligations and liabilities of
Baltimore Owner under the Indemnity Guaranty.

 

“Bankruptcy Action” shall mean with respect to any Person (a) such Person filing
a voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (b) the filing of an involuntary petition against
such Person under the Bankruptcy Code or any other Federal or state 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 or state bankruptcy or insolvency law, or soliciting
or causing to be solicited petitioning creditors for any involuntary petition
from any Person; (d) such Person consenting to or acquiescing in or joining in
an application for the appointment of a custodian, receiver, trustee,

 

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or examiner for such Person 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.

 

“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 or state bankruptcy or insolvency law.

 

“Basic Carrying Costs” shall mean, for any period, with respect to each
Individual Property, the sum of the following costs associated with such
Individual Property for such period: (a) Taxes, (b) Insurance Premiums and (c)
Ground Rents.

 

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

 

“Boston Borrower” shall have the meaning set forth in the introductory paragraph
hereto.

 

“Boston Individual Property” shall mean the Individual Property located in
Boston, Massachusetts.

 

“Boston Mortgage Borrower” shall have the meaning set forth in the Recitals.

 

“Breakage Costs” shall have the meaning set forth in Section 2.2.3(h) 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 any
Servicer are not open for business and, in the case of Section 2.6.1 only, a
Puerto Rico Business Day.

 

“Capital Expenditures” shall mean, for any period, the amount expended for items
capitalized under GAAP and the Uniform System of Accounts (including, without
limitation, expenditures for building improvements or major repairs, leasing
commissions and tenant improvements).

 

“Casa Marina Borrower” shall have the meaning set forth in the introductory
paragraph hereto.

 

“Casa Marina Individual Property” shall mean the Individual Property located in
Key West, Florida and known as Wyndham Casa Marina Resort.

 

“Casa Marina Mortgage Borrower” shall have the meaning set forth in the
Recitals.

 

“Cash Expenses” shall mean, for any period, the Operating Expenses for the
operation of the Properties to the extent that such expenses are actually
incurred by Mortgage Borrower minus any payments into the Tax and Insurance
Escrow Fund.

 

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

 

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

 

“Cash Sweep Cure” shall mean any one of the following: (a) depositing cash in
escrow with Mortgage Lender or delivering to Mortgage Lender a Letter of Credit,
which cash deposit or Letter of Credit shall be in an amount which, if applied
to the reduction of the Mortgage Loan would cause the Debt Yield to be not less
than the Debt Yield Threshold, and, if applicable, the Non-Minority Debt Yield
to be not less than then the Non-Minority Debt Yield Threshold, (b) prepaying
the Mortgage Loan in an amount which, if applied to the reduction of the
Mortgage Loan would cause the Debt Yield to be not less than the Debt Yield
Threshold, and, if applicable, the Non-Minority Debt Yield to be not less than
the Non-Minority Debt Yield Threshold, or (c) the Debt Yield is in excess of the
Debt Yield Threshold for three (3) consecutive months and, if applicable, the
Non-Minority Debt Yield is in excess of the Non-Minority Debt Yield Threshold
for three (3) consecutive months; provided that no new Cash Sweep Event shall
have occurred and be continuing. Notwithstanding anything to the contrary
contained herein, the number of occurrences of a Cash Sweep Cure hereunder shall
not, in the aggregate, during any twelve (12) month period exceed two (2).

 

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

 

“Cash Sweep Event” shall mean that either (a) the Debt Yield is less than the
Debt Yield Threshold, or (b) the Non-Minority Debt Yield is less than the
Non-Minority Debt Yield Threshold.

 

“Cash Sweep Period” shall mean the period from and after a Cash Sweep Event
until a Cash Sweep Cure has occurred.

 

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

 

“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.

 

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

 

“Collateral” shall have the meaning ascribed to the term “Pledged Collateral” as
set forth in the Pledge Agreement and shall also include all amounts on deposit
in the Mezzanine A Debt Service Account and the Reserve Funds, if any, and all
other property to which Lender is granted a security interest under the Loan
Documents at any time prior to the

 

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repayment of the Debt in full or the earlier release of the Liens thereon (or
with respect to any Individual Borrower the earlier release of the Liens
encumbering the Collateral owned by such Individual Borrower).

 

“Collateral Assignment of Interest Rate Cap Agreement” shall mean that certain
Collateral Assignment of Interest Rate Cap Agreement, dated as of the date
hereof, executed by Borrower in connection with the Loan for the benefit of the
Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Concession Agreements” shall mean, collectively, the Concession Agreement dated
as of December 30, 2004 between El Con Mortgage Borrower and American Parking
System, Inc. and the Deed of Ground Lease and Concession Agreement dated
December 30, 2004 among Williams Hospitality Group Inc., El San Juan Mortgage
Borrower and American Parking System, Inc.

 

“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.

 

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

 

“Contractual Obligation” shall mean as to any Person, any provision of any
security issued by such Person or of any material 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.

 

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

 

“Counterparty” shall mean, with respect to the Interest Rate Cap Agreement
JPMorgan Chase Bank, N.A. and with respect to any Replacement Interest Rate Cap
Agreement, any substitute Acceptable Counterparty.

 

“Covered Disclosure Information” shall have the meaning set forth in Section
9.2(b) hereof.

 

“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 due to Lender in respect of the Loan under the Note,
this Agreement, the Pledge Agreement and the other Loan Documents.

 

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

 

“Debt Service Coverage Ratio” shall mean, as of any date of determination, a
ratio in which:

 

(a) the numerator is the Net Cash Flow for the applicable Properties to be
tested; and

 

(b) the denominator is an assumed aggregate debt service for the Mortgage Loan
and the Mezzanine Loans (or the portion of the Mortgage Loan and the Mezzanine
Loans attributable to the Properties to be tested) during the ensuing twelve
(12) month period calculated on the basis of a nine percent (9.0%) per annum
debt service constant for the Mortgage Loan and the Mezzanine Loans or portion
thereof, taking into account and reflecting any principal payments resulting
from amortization, releases, pre-payments, or otherwise.

 

“Debt Yield” shall mean, as of any date of determination, the percentage
obtained by dividing (a) Net Cash Flow for all of the Properties by (b) the then
outstanding aggregate principal balance of the Mortgage Loan and the Mezzanine
Loans.

 

“Debt Yield Threshold” shall mean eight percent (8.0%).

 

“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 a rate per annum equal to the lesser of (a) the
Maximum Legal Rate and (b) five percent (5%) above the Applicable Interest Rate.

 

“Determination Date” shall mean the date that is two (2) London Business Days
prior to the fifteenth (15th) day of the calendar month in which such Interest
Period commences.

 

“Disapproved Budget Category” shall have the meaning set forth in Section
5.1.11(d).

 

“Disclosure Document” shall mean a private placement memorandum, offering
memorandum, offering circular, term sheet, road show presentation materials or
other offering documents or marketing materials, in each case in preliminary or
final form, used to offer Securities in connection with a Securitization.

 

“El Con Borrower” shall have the meaning set forth in the introductory paragraph
hereto.

 

“El Con Individual Property” shall mean the Individual Property owned by El Con
Mortgage Borrower and located in Puerto Rico.

 

“El Con Mortgage Borrower” shall have the meaning set forth in the Recitals.

 

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“El Con Tax Decree” shall have the meaning set forth in Section 5.1.33 hereof.

 

“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
maintained with a federal, Puerto Rico or state-chartered depository institution
or trust company which complies with the definition of Eligible Institution or
(b) a segregated trust account or accounts maintained with a federal, Puerto
Rico or state chartered depository institution or trust company acting in its
fiduciary capacity which, in the case of a state chartered depository
institution or trust company, is subject to regulations substantially similar to
12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.

 

“Eligible Institution” shall mean a depository institution or trust company, the
short term unsecured debt obligations or commercial paper of which are rated at
least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of
accounts in which funds are held for thirty (30) days or less (or, in the case
of accounts in which funds are held for more than thirty (30) days, the long
term unsecured debt obligations of which are rated at least “AA” by Fitch and
S&P and “Aa2” by Moody’s); provided, however, for purposes of the definition of
“Property Account Bank” as set forth herein, Banco Popular shall be deemed to be
an Eligible Institution for purposes of the Puerto Rico Properties and Bank of
America, N.A. shall be deemed to be an Eligible Institution for all the
Properties.

 

“El San Juan Borrower” shall have the meaning set forth in the introductory
paragraph hereto.

 

“El San Juan Individual Property” shall mean the Individual Property owned by El
San Juan Mortgage Borrower and located in Puerto Rico.

 

“El San Juan Mortgage Borrower” shall have the meaning set forth in the
Recitals.

 

“El San Juan Tax Decree” shall have the meaning set forth in Section 5.1.33
hereof.

 

“Embargoed Person” shall have the meaning set forth in Section 4.1.35 hereof.

 

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

 

“Equipment” shall have the meaning set forth in Section 5.2.10(g) hereof.

 

“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.

 

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

 

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“Excess” shall have the meaning set forth in Section 7.3.1(b) hereof.

 

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

 

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

 

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

 

“Exchange Act” shall have the meaning set forth in Section 9.2(a) hereof.

 

“Exit Fee” shall mean two percent (2%) of the principal amount of the Loan being
prepaid for any payment made on or prior to the Lockout Release Date.

 

“Extended Maturity Date” shall have the meaning set forth in Section 2.7 hereof.

 

“Extension Option” shall have the meaning set forth in Section 2.7 hereof.

 

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

 

“Ferryboat Affiliate” shall mean El Conquistador Ferryboat Inc., a Puerto Rico
corporation.

 

“Ferryboat Charters” shall mean, collectively, those certain Baltic and
International Maritime Conference Standard Bareboat Charters between El Con
Mortgage Borrower and Ferryboat Affiliate as more particularly described on
Schedule 1.6 attached hereto.

 

“FF&E” shall mean all fixtures, furniture, furnishings, equipment (including
operating equipment, operating supplies and fixtures attached to and forming
part of the Improvements), apparatus and other personal property used in, or
held in storage for use in (or if the context so dictates, required in
connection with), or required for the operation of the Improvements in
accordance with the Mortgage Loan Agreement, including, without limitation, (i)
office furnishings and equipment, (ii) specialized hotel, spa and casino
equipment necessary for the operation of any portion of the Improvements,
including equipment for kitchens, laundries, dry cleaning facilities, bars,
restaurants, public rooms, commercial and parking space, spa, casino and
recreational facilities, and (iii) all other furnishings and equipment as the
applicable Mortgage Borrower or Manager deems necessary or desirable for the
operation of the Improvements in accordance with the Mortgage Loan Agreement.

 

“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.

 

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“Foreign Taxes” shall have the meaning set forth in Section 2.2.3(e) hereof.

 

“Fort Lauderdale Borrower” shall have the meaning set forth in the introductory
paragraph hereto.

 

“Fort Lauderdale Individual Property” shall mean the Individual Property located
in Fort Lauderdale, Florida.

 

“Fort Lauderdale Mortgage Borrower” shall have the meaning set forth in the
Recitals.

 

“Franchise Agreement” shall mean, with respect to each Individual Property, that
certain Franchise Agreement, dated as of the date hereof, between the applicable
Mortgage Borrower or Baltimore Owner and Franchisor, as the same may be amended
or modified from time to time in accordance with the terms and provisions of
this Agreement, or, if the context requires, the applicable Replacement
Franchise Agreement executed in accordance with the terms and provisions of this
Agreement.

 

“Franchisor” shall mean WHC Franchise Corporation, a Delaware corporation, or,
if the context requires, a Qualified Franchisor.

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America as of the date of the applicable financial report.

 

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

 

“Gross Income from Operations” shall mean all income, revenue and proceeds
computed in accordance with GAAP and the Uniform System of Accounts and derived
by Mortgage Borrower, Baltimore Owner, Borrower or Manager from the use,
occupancy or enjoyment of the Properties, or any part thereof, or received by
Mortgage Borrower, Baltimore Owner, Borrower or Manager from the sale of any
goods, services or other items sold on or provided from the Properties in the
ordinary course of the Properties operation, including without limitation: (a)
all income and proceeds received from rental of rooms, Leases and commercial
space, meeting, conference and/or banquet space within the Properties including
net parking revenue and net casino wins; (b) all income and proceeds received
from food and beverage operations and from catering services conducted from the
Properties even though rendered outside of the Properties; (c) all income and
proceeds from business interruption, rental interruption and use and occupancy
insurance with respect to the operation of the Properties (after deducting
therefrom all necessary costs and expenses incurred in the adjustment or
collection thereof); and (d) interest on credit accounts, rent concessions or
credits, and other required pass-throughs and interest on Reserve Funds; but
excluding, (1) gross receipts received by lessees, licensees or concessionaires
of the Properties; (2) consideration received at the Properties for hotel
accommodations, goods and services to be provided at other hotels, although
arranged by, for or on behalf of Mortgage Borrower, Baltimore Owner, Borrower or
Manager; (3) income and proceeds from the sale or other disposition of goods,
capital assets and other items not in the ordinary course of the Properties
operation; (4) federal, state, commonwealth and

 

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municipal excise, sales, use, occupancy, gaming, and other taxes collected
directly from patrons or guests of the Properties as a part of or based on the
sales price of any goods, services or other items, such as gross receipts, room,
admission, cabaret or equivalent taxes; (5) Awards; (6) refunds of amounts not
included in Operating Expenses at any time and uncollectible accounts; (7)
gratuities collected by the Properties employees; (8) the proceeds of any
financing; (9) other income or proceeds resulting other than from the use or
occupancy of the Properties, or any part thereof, or other than from the sale of
goods, services or other items sold on or provided from the Properties in the
ordinary course of business; (10) any credits or refunds made to customers,
guests or patrons in the form of allowances or adjustments to previously
recorded revenues; (11) payments made to Borrower, Mortgage Borrower, Mezzanine
B Borrower and Mezzanine C Borrower pursuant to their respective Interest Rate
Cap Agreement, and (12) all income and proceeds from judgments, settlements and
other resolutions of disputes, except to the extent payable on account of or in
lieu of items otherwise includable in Gross Income from Operations.

 

“Gross Revenue Percentage Increase” shall have the meaning set forth in Section
5.1.11(d) hereof.

 

“Ground Lease” shall mean that certain Deed Number 12 of Lease, dated December
15, 1990, executed before Notary Public Silvestre M. Miranda, among Alberto
Bachman Umpierre, an individual, and Lilliam Bachman Umpierre, an individual,
collectively as the ground lessor, and El Con Mortgage Borrower, as ground
lessee.

 

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

 

“Ground Rent” shall mean the rent and all other charges which may be due under
the Ground Lease.

 

“Guarantor” shall mean Wyndham International, Inc.

 

“Guaranty” shall mean that certain Recourse Guaranty Agreement, dated as of the
date hereof, from Guarantor to Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

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

 

“Indebtedness” of a Person, at a particular date, means the sum (without
duplication) at such date of (a) all indebtedness or liability of such Person
for borrowed money including indebtedness in the form of mezzanine debt and in
the form of preferred equity if such preferred equity is treated as debt under
GAAP; (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; and (g) obligations secured by any Liens, whether or not
the obligations have been assumed.

 

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“Indemnified Person” shall have the meaning set forth in Section 9.2(b) hereof.

 

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

 

“Indemnity Deed of Trust” shall mean that certain Indemnity Deed of Trust, dated
as of the date hereof, from Baltimore Owner to Mortgage Lender to secure the
payment of all of the obligations and liabilities of Baltimore Mortgage Borrower
under the Mortgage Loan Agreement and the other Mortgage Loan Documents, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

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

 

“Independent Director” or “Independent Manager” shall mean a Person who is not
at the time of initial appointment, or at any time while serving as a director
or manager, as applicable, and has not been at any time during the preceding
five (5) years: (a) a stockholder, director (with the exception of serving as
the Independent Director or Independent Manager of an Individual Borrower),
officer, employee, partner, member, trustee, attorney or counsel of Borrower,
Mortgage Borrower, Mortgage Principal, Baltimore Owner, or any Affiliate of any
of them; (b) a creditor, customer (other than as a hotel guest or patron),
supplier or other person who derives any of its income or revenues from its
activities with Borrower, Mortgage Borrower, Mortgage Principal, Baltimore Owner
or any Affiliate of either of them (other than the receipt of fees for serving
as an Independent Director or Manager); (c) a Person Controlling or under common
Control with any such stockholder, director, officer, partner, member, customer,
supplier or other Person; or (d) a member of the immediate family of any such
stockholder, director, officer, employee, partner, member, customer, supplier or
other Person. A natural person who satisfies the foregoing definition other than
subparagraph (b) shall not be disqualified from serving as an Independent
Director or Independent Manager if such individual is an Independent Director or
Independent Manager provided by a nationally-recognized company that provides
professional independent directors or managers (a “Professional Independent
Director”) and other corporate services in the ordinary course of its business.
A natural person who otherwise satisfies the foregoing definition other than
subparagraph (a) by reason of being the independent director or independent
manager of a “special purpose entity” affiliated with a Borrower shall not be
disqualified from serving as an Independent Director or Independent Manager if
such individual is either (i) a Professional Independent Director or (ii) the
fees that such individual earns from serving as independent director of
affiliates in any given year constitute in the aggregate less than five percent
(5%) of such individual’s annual income for that year. Except as set forth in
(a) above, notwithstanding the immediately preceding sentence, an Independent
Director or Independent Manager may not simultaneously serve as Independent
Director or Independent Manager of a Borrower, as applicable, and also as an
independent director or independent manager of a special purpose entity that
owns a direct or indirect equity interest in such Borrower or Mortgage Borrower
or a direct or indirect interest in any co-borrower with such Borrower or
Mortgage Borrower.

 

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

 

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“Individual Mortgage Borrower” shall have the meaning set forth in the
introductory paragraph 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 Mortgage Borrower or Baltimore Owner
and encumbered by the applicable Mortgage, together with all rights pertaining
to such property and Improvements, as more particularly described in the
Granting Clauses of such Mortgage and referred to therein as the “Property”.

 

“Initial Ground Lease Escrow Deposit” shall have the meaning set forth in
Section 7.4 hereof.

 

“Initial Maturity Date” shall mean June 9, 2007.

 

“Insolvency Opinion” shall mean that certain non-consolidation opinion letter
dated the date hereof delivered by Akin Gump Strauss Hauer & Feld LLP or another
firm reasonably acceptable to Lender in connection with the Loan.

 

“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.

 

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated
the date hereof between Lender, Mezzanine B Lender, Mezzanine C Lender and
Mortgage Lender with respect to the Loan, the Mortgage Loan and the Mezzanine B
Loan and the Mezzanine C Loan.

 

“Interest Period” shall mean the period from the ninth (9th) day of each month
through and including the eighth (8th) day of the immediately following month;
provided that the first Interest Period hereunder shall commence on and include
the date that principal is advanced hereunder and shall end on and include the
eighth (8th) day of the month immediately following the month in which the
Closing Date occurs.

 

“Interest Rate Cap Agreement” shall mean, as applicable, an Interest Rate Cap
Agreement (together with the confirmation and schedules relating thereto) in
form and substance reasonably satisfactory to Lender between Borrower and an
Acceptable Counterparty or a Replacement Interest Rate Cap Agreement.

 

“Lease” shall mean any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in any
Individual Property, 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

 

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and observed by the other party thereto. Notwithstanding the foregoing, with
respect to the El Con Individual Property the term “Lease” shall not include the
Ground Lease.

 

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

 

“Letter of Credit” shall mean an irrevocable, unconditional, transferable, clean
sight draft letter of credit reasonably acceptable to Lender, which Letter of
Credit (a) shall be issued in favor of Lender, (b) shall be either an evergreen
letter of credit or one which has an initial expiration date not earlier than
one (1) year from the date of its issuance, (c) shall entitle Lender to draw
thereon in New York, New York, and (d) shall be issued by a domestic Acceptable
Bank or the U.S. agency or branch of a foreign Acceptable Bank.

 

“Liabilities” shall have the meaning set forth in Section 9.2(b) hereof.

 

“LIBOR” shall mean, with respect to each Interest Period, the rate (expressed as
a percentage per annum and rounded upward, if necessary, to the next nearest
1/1000 of 1%) for deposits in U.S. dollars, for a one-month period, that appears
on Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London time,
on the related Determination Date. If such rate does not appear on Telerate Page
3750 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 Reuters
Screen Libor Page 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 Reuters Screen Libor Page as of 11:00 a.m., London time, on such
Determination Date, Lender shall request the principal London office of any four
major reference banks in the London interbank market selected by Lender to
provide such 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 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

 

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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. LIBOR shall be determined conclusively, absent manifest error, by
Lender or its agent.

 

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

 

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

 

“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer of,
on or affecting Borrower, Mortgage Borrower, Baltimore Owner, the Collateral or
the Properties, 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 Pledge
Agreement, the Environmental Indemnity, the O&M Agreement, the Subordination of
Management Agreement, the Subordination of Franchise Agreement, the Guaranty,
the Collateral Assignment of Interest Rate Cap Agreement and all other documents
executed and/or delivered in connection with the Loan.

 

“Lockout Release Date” shall mean October 1, 2005.

 

“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.

 

“Losses” shall have the meaning set forth in Section 9.4(b) hereof.

 

“Management Agreement” shall mean, with respect to each Individual Property, the
management agreement entered into by and between the applicable Mortgage
Borrower or Baltimore Owner, if applicable and Manager, pursuant to which
Manager is to provide management and other services with respect to such
Individual Property, or, if the context requires, the applicable Replacement
Management Agreement, and in the case of the Puerto Rico Properties shall
include the Services Agreements between WMC Puerto Rico, Inc. and Williams
Hospitality Group Inc.

 

“Manager” shall mean Wyndham International, Inc. (or any of its Affiliates), or,
if the context requires, a Qualified Manager who is managing the Properties in
accordance with the terms and provisions of this Agreement.

 

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“Material Lease” shall mean a Lease demising in excess of 2,500 square feet or
for parking operations and/or facilities.

 

“Maturity Date” shall mean the Initial Maturity Date or, if applicable, the
Extended Maturity Date, or such other date on which the final payment of
principal of the Note becomes due and payable as therein or herein provided,
whether at such stated maturity date, by declaration of acceleration, or
otherwise.

 

“Maximum Allowable Fees” shall mean aggregate franchise royalty and base and
incentive management fees equal to the lesser of (a) the aggregate actual base
and incentive management and franchise royalty fees due under the Management
Agreement and Franchise Agreement, respectively and (b) three percent (3%) of
gross revenue at the Properties.

 

“Maximum Legal Rate” shall mean the maximum non-usurious 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 A Debt Service Account” shall have the meaning ascribed to such term
in the Cash Management Agreement.

 

“Mezzanine B Adjusted Release Amount” shall mean the “Adjusted Release Amount”
as defined in the Mezzanine B Loan Documents.

 

“Mezzanine B Borrower” shall mean collectively, W-Baltimore Majority Mezz
Borrower #2, LLC, W-Baltimore Minority Mezz Borrower #2, LLC, PAH Batterymarch
Realty Company Mezz Borrower #2, LLC, Conquistador Mezzanine #2 (SPE), Inc., El
San Juan Mezz Borrower #2, Inc., Casa Marina Mezz Borrower #2, LLC, Key West
Mezz Borrower #2, LLC, Atlanta American Mezz Borrower #2, LLC and Wyndham Fort
Lauderdale Airport Mezz Borrower #2, LLC, together with their respective
successors and permitted assigns.

 

“Mezzanine B Debt Service Account” shall have the meaning ascribed to such term
in the Cash Management Agreement.

 

“Mezzanine B Lender” shall mean, collectively, JPMorgan Chase Bank, N.A. and
Bear Stearns Commercial Mortgage, Inc., together with their respective
successors and permitted assigns.

 

“Mezzanine B Loan” shall mean that certain loan made as of the date hereof by
Mezzanine B Lender to Mezzanine B Borrower in the original principal amount of
Fifty Million Dollars ($50,000,000.00).

 

“Mezzanine B Loan Agreement” shall mean that certain Mezzanine B Loan Agreement,
dated as of the date hereof, between Mezzanine B Borrower and Mezzanine B
Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified, from time to time.

 

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“Mezzanine B Loan Default” shall mean an “Event of Default” under the Mezzanine
B Loan.

 

“Mezzanine B Loan Documents” shall mean all documents evidencing the Mezzanine B
Loan and all documents executed and/or delivered in connection therewith.

 

“Mezzanine B Release Amount” shall mean the “Release Amount” as defined in the
Mezzanine B Loan Documents.

 

“Mezzanine Borrower” shall mean, collectively, as the context may require,
Borrower, Mezzanine B Borrower and Mezzanine C Borrower, together with their
respective successors and permitted assigns.

 

“Mezzanine C Adjusted Release Amount” shall mean the “Adjusted Release Amount”
as defined in the Mezzanine C Loan Documents.

 

“Mezzanine C Borrower” shall mean shall mean, collectively, W-Baltimore Majority
Mezz Borrower #3, LLC, W-Baltimore Minority Mezz Borrower #3, LLC, PAH
Batterymarch Realty Company Mezz Borrower #3, LLC, Conquistador Mezzanine #3
(SPE), Inc., El San Juan Mezz Borrower #3, Inc., Casa Marina Mezz Borrower #3,
LLC, Key West Mezz Borrower #3, LLC, Atlanta American Mezz Borrower #3, LLC and
Wyndham Fort Lauderdale Airport Mezz Borrower #3, LLC, together with their
respective successors and permitted assigns.

 

“Mezzanine C Debt Service Account” shall have the meaning ascribed to such term
in the Cash Management Agreement.

 

“Mezzanine C Lender” shall mean, collectively, JPMorgan Chase Bank, N.A. and
Bear Stearns Commercial Mortgage, Inc., together with their respective
successors and permitted assigns.

 

“Mezzanine C Loan” shall mean that certain loan made as of the date hereof by
Mezzanine C Lender to Mezzanine C Borrower in the original principal amount of
One Hundred Million Dollars ($100,000,000.00).

 

“Mezzanine C Loan Agreement” shall mean that certain Mezzanine C Loan Agreement,
dated as of the date hereof, between Mezzanine C Borrower and Mezzanine C
Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified, from time to time.

 

“Mezzanine C Loan Default” shall mean an “Event of Default” under the Mezzanine
C Loan.

 

“Mezzanine C Loan Documents” shall mean all documents evidencing the Mezzanine C
Loan and all documents executed and/or delivered in connection therewith.

 

“Mezzanine C Release Amount” shall mean the “Release Amount” as defined in the
Mezzanine C Loan Documents.

 

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“Mezzanine Entities” shall have the meaning set forth in Section 5.2.10(f)
hereof.

 

“Mezzanine Lenders” shall mean, collectively, Lender, Mezzanine B Lender and
Mezzanine C Lender, or individually, a “Mezzanine Lender” shall mean any of
Lender, Mezzanine B Lender or Mezzanine C Lender, together with their respective
successors and permitted assigns.

 

“Mezzanine Loan Agreements” shall mean, collectively, this Loan Agreement, the
Mezzanine B Loan Agreement and the Mezzanine C Loan Agreement.

 

“Mezzanine Loan Default” shall mean an Event of Default hereunder, a Mezzanine B
Loan Default and a Mezzanine C Loan Default.

 

“Mezzanine Loan Documents” shall mean, collectively, the Loan Documents, the
Mezzanine B Loan Documents and the Mezzanine C Loan Documents.

 

“Mezzanine Loans” shall mean, collectively, the Loan, the Mezzanine B Loan and
the Mezzanine C Loan or individually, a “Mezzanine Loan” shall mean any of the
Loan, Mezzanine B Loan or Mezzanine C Loan.

 

“Mezzanine Release Amounts” shall mean, collectively, the Release Amounts, the
Mezzanine B Release Amount and the Mezzanine C Release Amount.

 

“Minimum Aggregate Cap Ex Amount” shall mean $35,000,000, as such amount may be
reduced in accordance with the provisions of Section 5.1.22(c) hereof.

 

“Minority Interest Borrower” shall mean each of Casa Marina Borrower, Reach
Borrower and Atlanta Borrower.

 

“Minority Interest Debt” shall mean, for each Minority Interest Property, the
Minority Interest Property Pro-Rata Debt applicable to such Minority Interest
Property, together with all interest accrued and unpaid thereon and all other
sums due to Lender in respect of such portion of the Loan under the Note, this
Agreement, the Pledge and the other Loan Documents.

 

“Minority Interest Property” shall mean each of the Casa Marina Individual
Property, the Reach Individual Property and the Atlanta Individual Property.
Notwithstanding the foregoing or anything to the contrary contained herein or in
the Mortgage Loan Documents, with respect to any Minority Interest Property, in
the event all the interests of all minority interest holders (which shall not be
Affiliates of Guarantor) of an entity that is an indirect owner of such Minority
Interest Property are redeemed in accordance with the applicable provisions set
forth in Section 5.2.10(d) hereof, then such Minority Interest Property shall
become a Non-Minority Interest Property and shall no longer be deemed to be a
Minority Interest Property for all purposes under the Loan Documents.

 

“Minority Interest Property Pro-Rata Debt” shall mean the product of (a) the
quotient obtained by dividing the Release Amount for such Minority Interest
Property by the

 

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sum of the Release Amount for all Properties subject to the Lien of the
Mortgages, and (b) the outstanding principal balance of the Loan.

 

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

 

“Mortgage” shall mean (a) with respect to each Individual Property (other than
the Baltimore Individual Property, the El Con Individual Property and the El San
Juan Individual Property), that certain first priority Mortgage (or Deed of
Trust or Deed to Secure Debt) and Security Agreement, dated as of the date
hereof, executed and delivered by the applicable Mortgage Borrower as security
for the Mortgage Loan and encumbering such Mortgage Borrower’s fee estate in
such Individual Property, (b) with respect to the Baltimore Individual Property,
that certain first priority Indemnity Deed of Trust and Security Agreement,
dated as the date hereof, executed and delivered by Baltimore Owner as security
for the Baltimore Owner Obligations and encumbering Baltimore Owner’s fee estate
in the Baltimore Individual Property, and (c) with respect to the El San Juan
Individual Property and the El Con Individual Property, (i) the Mortgage Note
Pledge and Security Agreement, dated as of the hereof, executed and delivered by
the applicable Mortgage Borrower as security for the Mortgage Loan and pursuant
to which such Mortgage Borrower has pledged mortgage notes securing mortgages
encumbering such Mortgage Borrower’s fee estate in the applicable Puerto Rico
Property, and (ii) with respect to the El Con Individual Property only, El Con
Mortgage Borrower’s leasehold interest under the Ground Lease as each such
instruments and agreements may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Mortgage Borrower” shall have the meaning set forth in the Recitals to this
Agreement, together with its successors and permitted assigns and shall be
equally applicable to both the singular and plural forms of the terms.

 

“Mortgage Interest Rate Cap Agreement” shall mean the “Interest Rate Cap
Agreement” as defined in the Mortgage Loan Agreement.

 

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

 

“Mortgage Loan Default” shall mean an “Event of Default” under and 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, 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.

 

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“Mortgage Loan Reserve Funds” shall mean the “Reserve Funds” 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 (a) with respect to El Con Mortgage Borrower,
Conquistador Holding (SPE), Inc. (b) with respect to El San Juan Mortgage
Borrower, each of W-San Juan Hotel Corp. and W-San Juan Holding Corp.

 

“Mortgage Release Amount” shall mean, with respect to an Individual Property,
the “Release Amount” as defined in the Mortgage Loan Agreement.

 

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

 

“Net Cash Flow” shall mean, with respect to the applicable Properties, the
amount obtained by subtracting Operating Expenses and payments to the
Replacement Reserve Fund from Gross Income from Operations during the trailing
twelve (12) month period.

 

“Net Cash Flow Schedule” shall have the meaning set forth in Section 5.1.11(b)
hereof.

 

“Net Liquidation Proceeds After Debt Service” shall mean, with respect to any
Liquidation Event, all amounts paid to or received by or on behalf of Borrower
or Mortgage Borrower in connection with such Liquidation Event, including,
without limitation, proceeds of any sale, refinancing or other disposition or
liquidation, less (i) Lender’s and/or Mortgage Lender’s (and/or, except with
respect to clauses (iv) and (v) below, Mortgage Borrower’s) reasonable costs
incurred in connection with the recovery thereof, (ii) the costs incurred by
Mortgage Borrower in connection with a restoration of all or any portion of the
Properties made in accordance with the Mortgage Loan Documents, (iii) amounts
required or permitted to be deducted therefrom and amounts paid pursuant to the
Mortgage Loan Documents to Mortgage Lender or otherwise applied pursuant to the
Mortgage Loan Documents, and amounts paid pursuant to the Loan Documents to
Lender or otherwise applied pursuant to the Loan Documents, (iv) in the case of
a foreclosure sale, disposition or Transfer of any Individual Property in
connection with realization thereon following a Mortgage Loan Default,
reasonable and customary costs and expenses of sale or other disposition
(including attorneys’ fees and brokerage commissions), (v) in the case of a
foreclosure sale, such reasonable costs and expenses incurred by Mortgage Lender
under the Mortgage Loan Documents as Mortgage Lender shall be entitled to
receive reimbursement for under the terms of the Mortgage Loan Documents, (vi)
in the case of a foreclosure sale, disposition or Transfer of any Collateral in
connection with realization thereon, following an Event of Default, reasonable
and customary costs and expenses of sale or other disposition (including
attorneys’ fess and brokerage commissions), (vii) in the case of a foreclosure
sale, such reasonable costs and expenses incurred by Lender under the Loan
Documents as Lender shall be entitled to receive reimbursement for under the
terms of the Loan Documents and (viii) in the case of a refinancing of the
Mortgage and/or the Loan, such

 

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reasonable costs and expenses (including attorneys’ fees) of such refinancing as
shall be reasonably approved by Mortgage Lender or Lender, as applicable.

 

“Net Operating Income” shall mean, for any period, the amount obtained by
subtracting Operating Expenses for such period from Gross Income from Operations
for such period.

 

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

 

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

 

“Net Wins” shall mean, with respect to any Puerto Rico property and for any
period, the amount equal to the total of all gaming revenues for such period,
less total gaming losses for such period arising from casino operations at such
Individual Property; provided that for purposes of Section 7.3.1, Net Wins shall
not be less than $0.

 

“New Mezzanine Borrower” shall have the meaning set forth in Section 9.1.3
hereof.

 

“New Mezzanine Loan” shall have the meaning set forth in Section 9.1.3 hereof.

 

“Non-Minority Debt Yield” shall mean, as of any date of determination, the
percentage obtained by dividing (a) Net Cash Flow for the Non-Minority Interest
Properties by (b) the then outstanding aggregate principal balance of the
Mortgage Loan and the Mezzanine Loans attributable to the Non-Minority Interest
Properties. Notwithstanding the foregoing or anything to the contrary contained
herein or in the other Loan Documents, in the event all the interests of all
minority interest holders (which shall not be Affiliates of Guarantor) of
entities that are indirect owners of two (2) Individual Properties which are
Minority Interest Properties as of the date hereof are redeemed in accordance
with the applicable provisions set forth in Section 5.2.10(d) of the Mortgage
Loan Agreement, then the provisions set forth in this Agreement and the other
Loan Documents relating to “Non-Minority Debt Yield” shall thereafter be not
applicable.

 

“Non-Minority Debt Yield Threshold” shall mean eight percent (8.0%).

 

“Non-Minority Interest Properties” shall mean all of the Properties other than
the Minority Interest Properties.

 

“Note” shall mean that certain Promissory Note of even date herewith in the
principal amount of Fifty Million and No/100 Dollars ($50,000,000.00), made by
Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“O&M Agreement” shall mean that certain Operations and Maintenance Agreement,
dated as of the date hereof, between Borrower and Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

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

 

“Operating Expenses” shall mean the sum of all costs and expenses of operating,
maintaining, directing, managing and supervising the Properties, computed in
accordance with GAAP and the Uniform System of Accounts, that are incurred on a
regular monthly or other periodic basis, including without limitation,
utilities, ordinary repairs and maintenance, insurance, license fees, property
taxes and assessments, advertising expenses, franchise and management fees,
payroll and related taxes, computer processing charges, operational equipment or
other lease payments, ground rents payable under the Ground Lease, and other
similar costs, but excluding depreciation and similar non-cash items, Debt
Service, Capital Expenditures and contributions to the Mortgage Loan Reserve
Funds.

 

“Organizational Documents” means as to any Person, the certificate of
incorporation and by-laws with respect to a corporation; the certificate of
organization and operating agreement with respect to a limited liability
company; the certificate of limited partnership and partnership agreement with
respect to a limited partnership, or any other organizational or governing
documents of such Person.

 

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

 

“Out Parcels” shall mean, collectively, the parcels of real property (each
consisting of a portion of an Individual Property) described on Schedule 1.1
attached hereto.

 

“Parking Lease” shall mean, collectively, that certain Indenture of Lease and
that certain ground lease relating to the Individual Property known as Wyndham
Atlanta American as more particularly described on Schedule 1.5 hereto.

 

“Payment Date” shall mean the ninth (9th) day of each month, or if such day is
not a Business Day, the immediately succeeding Business Day.

 

“Permitted Encumbrances” shall mean, with respect to an Individual Property,
collectively (a) the Liens and security interests created by the Mortgage Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policies (including matters for which affirmative coverage has been
provided) relating to such Individual Property or any part thereof, (c) Liens,
if any, for Taxes or Other Charges not yet delinquent or being contested in good
faith and by appropriate proceedings in accordance with the terms of the
Mortgage Loan Agreement or this Agreement, as applicable, (d) any and all
easements, licenses, covenants, restrictions or other agreements which may
hereafter be granted by Mortgage Borrower or Baltimore Owner in accordance with
the terms hereof, (e) rights of existing and future tenants, licensees and
concessionaires only, pursuant to Leases in effect as of the date of this
Agreement or entered into in accordance with the terms hereof, (f) any lien or
security interest expressly permitted by the terms of the Mortgage Loan
Agreement or this Agreement, (g) all Liens of record for which the underlying
indebtedness or obligations secured by such Liens have been paid or discharged
and which Liens have been insured against under the Title

 

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Policies by omission of such Liens from Schedule B thereto and with respect to
which the applicable Mortgage Borrower or Borrower is using commercially
reasonable efforts to discharge, and (h) such other title and survey exceptions
as Lender has approved or may approve in writing in Lender’s sole discretion.

 

“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, the trustee under any Securitization or any of their
respective 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) obligations of, or obligations fully guaranteed as to payment of principal
and interest by, the United States or any agency or instrumentality thereof
provided such obligations are backed by the full faith and credit of the United
States of America including, without limitation, obligations of: the U.S.
Treasury (all direct or fully guaranteed obligations), the Farmers Home
Administration (certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime Administration
(guaranteed Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed transit bonds);
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;

 

(ii) Federal Housing Administration debentures;

 

(iii) obligations of the following United States government sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated system-wide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

 

(iv) federal funds, unsecured certificates of deposit, time deposits, bankers’
acceptances and repurchase agreements with maturities of not more than 365 days
of any bank, the short term obligations of which at all times are rated in the
highest short term

 

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rating category by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency in the highest short term rating category
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

 

(v) fully Federal Deposit Insurance Corporation-insured demand and time deposits
in, or certificates of deposit of, or bankers’ acceptances issued by, any bank
or trust company, savings and loan association or savings bank, the short term
obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency in the highest short term rating category and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

 

(vi) debt obligations with maturities of not more than 365 days and at all times
rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by
at least one Rating Agency and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) in its highest long-term unsecured
rating category; provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

 

(vii) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date not
more than one year after the date of issuance thereof) with maturities of not
more than 365 days and that at all times is rated by each Rating Agency (or, if
not rated by all Rating Agencies, rated by at least one Rating Agency and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of

 

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itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities) in its highest
short-term unsecured debt rating; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

 

(viii) units of taxable money market funds, which funds are regulated investment
companies, seek to maintain a constant net asset value per share and invest
solely in obligations backed by the full faith and credit of the United States,
which funds have the highest rating available from each Rating Agency (or, if
not rated by all Rating Agencies, rated by at least one Rating Agency and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds; and

 

(ix) any other security, obligation or investment which has been approved as a
Permitted Investment in writing by (a) Lender and (b) each Rating Agency, as
evidenced by a written confirmation that the designation of such security,
obligation or investment as a Permitted Investment will not, in and of itself,
result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities by such Rating Agency;

 

provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.

 

“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 clauses of
the Mortgage with respect to each Individual Property.

 

“Physical Conditions Report” shall mean, with respect to each Individual
Property, a report prepared by a company satisfactory to Lender regarding the
physical condition of such Individual Property, satisfactory in form and
substance to Lender in its sole discretion.

 

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

 

“Pledgor” shall have the meaning as set forth in the Pledge Agreement.

 

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“Policy” or “Policies” shall have the meaning specified in the Mortgage Loan
Agreement.

 

“Prepayment Release Date” shall mean June 1, 2006.

 

“Prepayment Spread Maintenance Payment” shall mean, with respect to any
repayment of any principal amount of the Loan on or prior to the Prepayment
Release Date, a payment to Lender in an amount equal to the sum of the present
values of each future installment of interest that would be payable under the
Loan on the principal amount of the Loan being prepaid from the date of such
prepayment through and including the Payment Date occurring in July 2006
(without duplication for any interest paid to Lender in connection with such
repayment in accordance with the terms of this Agreement), assuming an interest
rate equal to the difference between (a) the Applicable Interest Rate in effect
as of the date of such prepayment (taking into account the effect of any floors
on such Applicable Interest Rate) and (b) LIBOR in effect as of the date of such
prepayment, such future installments of interest to be discounted at an interest
rate per annum equal to the Reinvestment Yield.

 

“Prime Rate” shall mean the annual rate of interest publicly announced by
JPMorgan Chase Bank, N.A. in New York, New York, as its base rate, as such rate
shall change from time to time. If JPMorgan Chase Bank, N.A. ceases to announce
a base rate, Prime Rate shall mean the rate of interest published in The Wall
Street Journal from time to time as the “Prime Rate.” If more than one “Prime
Rate” is published in The Wall Street Journal for a day, the average of such
“Prime Rates” shall be used, and such average shall be rounded up to the nearest
one-eighth of one percent (0.125%). 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
quasigovernmental body, then Lender shall select a comparable interest rate
index.

 

“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 the difference (expressed as the number of basis
points) between (a) LIBOR plus the Spread on the date LIBOR was last applicable
to the Loan and (b) the Prime Rate on the date that LIBOR was last applicable to
the Loan; provided, however, in no event shall such difference be a negative
number.

 

“Prescribed Laws” shall mean, collectively, (a) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), (b) Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001, and
relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism, (c) the International
Emergency Economic Power Act, 50 U.S.C. §1701 et. seq. and (d) all other Legal
Requirements relating to money laundering or terrorism.

 

“Properties” shall mean, collectively, each and every Individual Property which
is subject to the terms of the Mortgage Loan Agreement.

 

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“Property Account(s)” shall have the meaning set forth in the Mortgage Loan
Agreement.

 

“Property Account Agreement” shall mean that certain Deposit Account Control
Agreement, dated as of the date hereof, among Mortgage Borrower, Mortgage Lender
and Property Account Bank, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“Property Account Bank” shall mean an Eligible Institution for each Individual
Property designated by Mortgage Borrower.

 

“Provided Information” shall mean any and all financial and other written
information provided to Lender at any time by, or on behalf of, any Indemnifying
Person with respect to the Properties, the Collateral, Mortgage Borrower,
Baltimore Owner, Guarantor, Manager, Mortgage Principal, Borrower and/or
Franchisor.

 

“Public Company” shall mean a corporation or other Person whose (i) stock or
ownership interests or (ii) depository receipts or their equivalent are publicly
traded on a nationally recognized stock exchange, including, without limitation,
NASDAQ or on the leading recognized stock exchange in Spain, Germany, Italy,
Canada, France, Tokyo, Australia, Singapore, England or Hong Kong, or in another
country which requires companies publicly traded on such leading exchange to
provide public information reasonably comparable to that required in the United
States.

 

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

 

“Puerto Rico Properties” shall mean, collectively, the El Con Individual
Property and the El San Juan Individual Property.

 

“Qualified Franchisor” shall mean an entity (a) appearing on Schedule 1.2
attached hereto or (b) an entity that has a national reservation system or
global distribution system and which, together with any Affiliates of such
entity, franchises at least twenty-five (25) full service upscale and upper
upscale urban and resort hotel properties in the United States, provided, that,
if such Person is an Affiliate of Borrower or Mortgage Borrower, Borrower shall
have obtained an Additional Insolvency Opinion. For purposes of clause (b) of
this definition, the term “Affiliate” shall mean, with respect to any Person,
any other Person that (i) Controls and (ii) owns, directly or indirectly, not
less than fifty-one percent (51%) of the legal and beneficial ownership
interests in such Person.

 

“Qualified Manager” shall mean (a) Wyndham International, Inc. or an Affiliate
thereof, (b) an entity appearing on Schedule 1.3 attached hereto or (c) an
entity that, together with any Affiliates of such entity, operates or manages at
least twenty-five (25) full service upscale and upper upscale urban and resort
hotel properties in the United States, provided, that, if such Person is an
Affiliate of Borrower, Borrower shall have obtained an Additional Insolvency
Opinion. For purposes of clause (c) of this definition, the term “Affiliate”
shall mean, with respect to any Person, any other Person that (i) Controls and
(ii) owns, directly or indirectly, not less than fifty-one percent (51%) of the
legal and beneficial ownership interests in such Person.

 

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“Qualified Transferee” shall mean any one of the following Persons:

 

(a) a pension fund, pension trust or pension account that (i) has total real
estate assets of at least $1 billion or (ii) has total real estate assets of at
least $500 million that are managed by a Person who controls or manages at least
$1 billion of real estate equity assets; or

 

(b) a pension fund advisor who (i) immediately prior to such transfer, controls
or manages at least $1 billion of real estate equity assets and (ii) is acting
on behalf of one or more pension funds that, in the aggregate, satisfy the
requirements of clause (a) of this definition; or

 

(c) an insurance company which is subject to supervision by the insurance
commissioner, or a similar official or agency, of a state or territory of the
United States (including the District of Columbia) (i) with a net worth, as of a
date no more than six (6) months prior to the date of the transfer of at least
$500 million and (ii) who, immediately prior to such transfer, controls real
estate equity assets of at least $1 billion; or

 

(d) a corporation organized under the banking laws of the United States or any
state or territory of the United States (including the District of Columbia) (i)
with a combined capital and surplus of at least $500 million and (ii) who,
immediately prior to such transfer, controls real estate equity assets of at
least $1 billion; or

 

(e) a newly formed real estate fund that has not yet made any acquisitions but
otherwise has committed capital of at least $1 billion; or

 

(f) any Person who (i) has a long-term unsecured debt rating from the Rating
Agencies of at least investment grade, or (ii) has a net worth, as of a date no
more than six (6) months prior to the date of such transfer of at least $500
million and immediately prior to such transfer controls, together with its
affiliates, real estate equity assets of at least $1 billion; or

 

(g) an entity appearing on Schedule 1.9 attached hereto, provided that, in each
case, such entity is not then subject to a Bankruptcy Action.

 

“Ratable Share” shall mean, with respect to any Co-Lender, its share of the
Loan, or any portion thereof, based on the proportion of the outstanding
principal of the Loan advanced by such Co-Lender to the total outstanding
principal amount of the Loan.

 

“Rating Agencies” shall mean, prior to the initial Securitization of the Loan or
any portion thereof, each of S&P, Moody’s and Fitch, or any other
nationally-recognized statistical rating agency which has been designated by
Lender and, after the Securitization of the Loan or any portion thereof, shall
mean only those of the foregoing that have rated any of the Securities in
connection with any such Securitization.

 

“Reach Borrower” shall have the meaning set forth in the introductory paragraph
hereto.

 

“Reach Individual Property” shall mean the Individual Property located in Key
West, Florida and knows as the Wyndham Reach Resort.

 

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“Reach Mortgage Borrower” shall have the meaning set forth in the Recitals.

 

“Reinvestment Yield” means the yield calculated by the linear interpolation of
the yields, as reported in the Federal Reserve Statistical Release H.15-Selected
Interest Rates under the heading “U.S. government securities” and the
sub-heading “Treasury constant maturities” during the second full week preceding
the date of which the applicable Prepayment Spread Maintenance Payment is
payable, of the U.S. Treasury constant maturities with maturity dates (one
longer and one equal to or shorter) most nearly approximating the Prepayment
Release Date. In the event Release H.15 is no longer published, Lender shall
reasonably select a comparable publication to determine the Reinvestment Yield.

 

“Release Amount” shall mean for an Individual Property the amount set forth on
Schedule 1.4 hereto, as the same may be reduced pursuant to Section 2.4.2.

 

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

 

“Replacement Franchise Agreement” shall mean, collectively, (a) either (i) a
franchise or license agreement with a Qualified Franchisor substantially in the
same form and substance as the applicable Franchise Agreement, or (ii) a
franchise or license agreement with a Qualified Franchisor, which franchise or
license agreement shall be reasonably acceptable to Lender in form and
substance, and (b) either (i) a comfort letter substantially in the form of the
Subordination of Franchise Agreement delivered to Lender on the Closing Date (or
in such other form and substance reasonably acceptable to Lender), executed and
delivered to Lender by Borrower and such Qualified Franchisor at Borrower’s
expense or (ii) a comfort letter in form and substance reasonably acceptable to
Lender, executed and delivered to Lender by Borrower and such Qualified
Franchisor at Borrower’s expense.

 

“Replacement Interest Rate Cap Agreement” means an interest rate cap agreement
from an Acceptable Counterparty with terms substantially the same as the
Interest Rate Cap Agreement except that the same shall be effective in
connection with an extension of the terms of the Loan as required by Section
2.7(c) hereof or the replacement of the Interest Rate Cap Agreement following a
downgrade, withdrawal or qualification of the long-term unsecured debt rating of
the Counterparty; provided that to the extent any such interest rate cap
agreement does not meet the foregoing requirements, a “Replacement Interest Rate
Cap Agreement” shall be such interest rate cap agreement approved in writing by
each of the Rating Agencies with respect thereto.

 

“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 applicable 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 fees substantially in the form of the Subordination of
Management Agreement (or of such other form and substance reasonably acceptable
to Lender), executed and delivered to Lender by Borrower and such Qualified
Manager at Borrower’s expense.

 

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“Replacement Reserve Account” shall have the meaning set forth in Section
7.3.1(a) hereof.

 

“Replacement Reserve Fund” shall have the meaning set forth in Section 7.3.1(a)
hereof.

 

“Replacement Reserve Monthly Deposit” shall have the meaning set forth in
Section 7.3.1(a) hereof.

 

“Replacements” shall mean replacements of, or additions to, FF&E, and any
special projects designed to maintain the current condition of the Improvements.

 

“Required Monthly Expenditure” 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 mean, collectively, the Tax and Insurance Escrow Fund, the
Replacement Reserve Fund, the Ground Lease Escrow Fund, Required Repair Fund and
any other escrow fund established pursuant to the Loan Documents.

 

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

 

“Restoration Threshold Amount” shall have the meaning set forth in the Mortgage
Loan Agreement.

 

“Restricted Party” shall mean, collectively (a) Mortgage Borrower, Mortgage
Principal, Baltimore Owner, Guarantor, Affiliated Manager and Borrower and (b)
any shareholder, partner, member, non-member manager, or direct or indirect
legal or beneficial owner of, Mortgage Borrower, Mortgage Principal, Baltimore
Owner, Guarantor, Affiliated Manager, and non-member manager of Borrower.
Notwithstanding the foregoing, the term “Restricted Party” shall not include any
Person that is an indirect owner of a Minority Interest Property and that is not
an affiliate of Guarantor.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill
Companies.

 

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

 

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“Securities” shall have the meaning set forth in Section 9.1 hereof.

 

“Securitization” shall have the meaning set forth in Section 9.1 hereof.

 

“Servicer” shall have the meaning set forth in Section 9.6 hereof.

 

“Servicing Agreement” shall have the meaning set forth in Section 9.6 hereof.

 

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

 

“Ship Mortgages” shall mean, collectively, those certain Preferred Ship
Mortgages relating to ferryboats owned by either El Con Mortgage Borrower or
Ferryboat Affiliate as more particularly described on Schedule 1.7 hereto.

 

“Shortfall” shall have the meaning set forth in Section 7.3.1(b) hereof.

 

“Special Purpose Entity” shall mean a corporation, limited partnership, general
partnership or limited liability company which at all times from and after the
date such entity is represented as being or is required to be a Special Purpose
Entity hereunder and until the Loan is paid in full or, with respect to each
Individual Borrower, the earlier release of the liens of the Pledge Agreements
encumbering all Collateral owned by such Individual Borrower:

 

(a) is organized solely for the purpose of (i) acquiring, owning, holding,
selling, transferring, and exchanging the Collateral, entering into the Loan
Documents, refinancing the Collateral in connection with a permitted repayment
of the Loan, and transacting lawful business that is incident and appropriate
thereto; or (ii) acting as a general partner of the general or limited
partnership that owns the Properties or an Individual Property or managing
member of the limited liability company that owns the Properties and transacting
lawful business that is incident and appropriate thereto;

 

(b) is not engaged and will not engage in any business unrelated to (i) the
ownership, management or operation of the Collateral and transacting lawful
business that is incident and appropriate thereto; (ii) acting as general
partner of the general or limited partnership that owns the Properties or an
Individual Property or (iii) acting as a managing member of a limited liability
company that owns the Properties or an Individual Property, as applicable;

 

(c) does not have and will not have any assets other than those related to the
Collateral and personal property necessary or incidental to its ownership of the
Collateral or its partnership interest in the general or limited partnership or
the member interest in the limited liability company that owns the Properties or
an Individual Property or acts as the general partner or managing member
thereof, as applicable;

 

(d) has not engaged, sought or consented to and will not engage in, seek or
consent to any dissolution, winding up, liquidation, consolidation, merger, sale
of all or substantially all of its assets, transfer of all or substantially all
of its partnership or membership interests (if such entity is a general partner
in a general or limited partnership or a managing

 

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member in a limited liability company) or amendment of its partnership
agreement, articles of incorporation, articles of organization, certificate of
formation or operating agreement (as applicable) with respect to the matters set
forth in this definition;

 

(e) if such entity is a limited or general partnership, has, as its only general
partners, Special Purpose Entities that are corporations, limited partnerships
or limited liability companies;

 

(f) if such entity is a corporation, has at least two (2) Independent Directors,
and has not caused or allowed and will not cause or allow the board of directors
of such entity to take any action requiring the unanimous affirmative vote of
one hundred percent (100%) of the members of its board of directors unless two
(2) Independent Directors shall have participated in such vote;

 

(g) if such entity is a limited liability company with more than one (1) member,
has at least one (1) member that is a Special Purpose Entity that has at least
two (2) Independent Directors or two (2) Independent Managers and that owns at
least one percent (1.0%) of the equity of the limited liability company;

 

(h) if such entity is a limited liability company with only one (1) member, is a
limited liability company organized in the State of Delaware that has (i) as its
only member a non-managing member, (ii) at least two (2) Independent Managers
and has not caused or allowed and will not cause or allow the board of managers
of such entity to take any action requiring the unanimous affirmative vote of
one hundred percent (100%) of the managers unless two (2) Independent Managers
shall have participated in such vote and (iii) at least two (2) springing
members, one (1) of which will become the non-managing member of such entity
(which may have a zero economic interest) upon the dissolution of the existing
non-managing member;

 

(i) if such entity is (i) a limited liability company, has articles of
organization, a certificate of formation and/or an operating agreement, as
applicable, (ii) a limited partnership, has a limited partnership agreement, or
(iii) a corporation, has a certificate of incorporation or articles that, in
each case, provide that such entity will not: (A) dissolve, merge, liquidate,
consolidate; (B) sell all or substantially all of its assets or the assets of
Borrower or an Individual Borrower (as applicable), except as expressly
permitted by the Loan Documents; (C) engage in any other business activity not
permitted by (a) and (b) above, or amend its organizational documents with
respect to the matters set forth in this definition without the consent of the
Lender; or (D) without the affirmative vote of two Independent Directors and of
all other directors of the corporation (that is such entity or the general
partner or managing or co-managing member of such entity), file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings with respect
to itself or to any other entity in which it has a direct or indirect legal or
beneficial ownership interest;

 

(j) is and will remain solvent and pay its debts and liabilities (including, as
applicable, shared personnel and overhead expenses) from its assets as the same
shall become due (except for debts and liabilities being contested in good faith
in accordance with the terms of the Loan Documents), and is maintaining and will
maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its

 

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contemplated business operations, provided that the foregoing shall not require
its shareholders, partners or members to make capital contributions to such
entity;

 

(k) has not failed and will not fail to correct any known misunderstanding
regarding the separate identity of such entity;

 

(l) has maintained and will maintain its accounts, books and records separate
from any other Person and will file its own tax returns separate from those of
any other Person, except to the extent that it is required to file consolidated
tax returns by law;

 

(m) has maintained and will maintain its own records, books, resolutions and
agreements;

 

(n) other than as provided in the Cash Management Agreement or in a cash
management agreement provided for in a loan document with another institutional
lender which will no longer be in effect on or prior to making the Loan, (i) has
not commingled and will not commingle its funds or assets with those of any
other Person and (ii) has not participated and will not participate in any cash
management system with any other Person;

 

(o) has held and will hold its assets in its own name;

 

(p) has conducted and will conduct its business in its name or in a name owned
by it or in which it has rights or in a name franchised or licensed to it by an
entity other than an Affiliate or if by an Affiliate that is a Franchisor or
Manager or otherwise permitted hereunder, except for services rendered under a
business management services agreement with an Affiliate that complies with the
terms contained in subsection (dd) below, so long as the manager, or equivalent
thereof, under such business management services agreement holds itself out as
an agent of the Borrower or an Individual Borrower;

 

(q) has maintained and will maintain its financial statements, accounting
records and other entity documents separate from any other Person and has not
permitted and will not permit its assets to be listed as assets on the financial
statement of any other entity except as required by GAAP; provided, however,
that any such consolidated financial statement shall contain a note indicating
that its separate assets and liabilities are neither available to pay the debts
of the consolidated entity nor constitute obligations of the consolidated entity
and provided such assets are listed on its own balance sheet;

 

(r) has paid and will pay its own liabilities and expenses, including the
salaries of its own employees, out of its own funds and assets, and has
maintained and will maintain a sufficient number of employees in light of its
contemplated business operations;

 

(s) has observed and will observe all partnership, corporate or limited
liability company formalities, as applicable;

 

(t) has had no indebtedness other than that permitted pursuant to the loan
documents with other institutional lenders which has been or will be paid off on
or prior to making the Loan, and will have no Indebtedness other than (i) the
Loan and (ii) such other liabilities that were permitted pursuant to the loan
documents with other institutional lenders and

 

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have been or will be discharged on or prior to the making of the Loan or are
permitted pursuant to this Agreement;

 

(u) has not (with respect to any assumption, guaranty, obligation or holding out
which remains outstanding) and, except in connection with the Loan, will not
assume or guarantee or become obligated for the debts of any other Person or
hold out its credit as being available to satisfy the obligations of any other
Person or pledge its assets for the benefit of any other Person, except as
permitted pursuant to this Agreement;

 

(v) except for its interests in any Individual Mortgage Borrower, does not hold
and will not acquire obligations or securities of its partners, members or
shareholders or any other Affiliate;

 

(w) has allocated and will allocate fairly and reasonably any overhead expenses
that are shared with any Affiliate, including, but not limited to, paying for
shared office space and services performed by any employee of an Affiliate;

 

(x) maintains and uses and will maintain and use separate stationery, invoices
and checks bearing its name or the name under which it is conducting business as
permitted hereunder. The stationery, invoices, and checks utilized by the
Special Purpose Entity or utilized to collect its funds or pay its expenses
shall bear its own name and shall not bear the name of any other entity unless
such entity is clearly designated as being the Special Purpose Entity’s agent;

 

(y) has not pledged (which pledge remains outstanding) and, except pursuant to
the Loan Documents, will not pledge its assets to secure the obligations of any
other Person;

 

(z) has held itself out and identified itself and will hold itself out and
identify itself as a separate and distinct entity under its own name or in a
name owned by it or in which it has rights, or in a name franchised or licensed
to it by an entity other than an Affiliate of Borrower (or if by an Affiliate
that is a Franchisor or is otherwise permitted hereunder) and not as a division
or part of any other Person, except for services rendered under a business
management services agreement with an Affiliate that complies with the terms
contained in subsection (dd) below, so long as the manager, or equivalent
thereof, under such business management services agreement holds itself out as
an agent of Borrower or an Individual Borrower;

 

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

 

(bb) except loans to any Person or evidence of indebtedness issued by any other
Person as contemplated or permitted by any loan document with other
institutional lenders which have been or will be paid off on or prior to making
the Loan or as permitted by the Loan Documents, has not made and will not make
loans to any Person or hold evidence of indebtedness issued by any other Person
(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);

 

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(cc) has not identified and will not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a division of any
other Person;

 

(dd) except for capital contributions and capital distributions permitted under
the terms and conditions of its organizational documents and properly reflected
on its books and records, has not entered into or been a party to, and will not
enter into or be a party to, any transaction with its partners, members,
shareholders or Affiliates except (A) in the ordinary course of its business and
on terms which are intrinsically fair, commercially reasonable and are no less
favorable to it than would be obtained in a comparable arm’s-length transaction
with an unrelated third party and (B) in connection with this Agreement;

 

(ee) does not have any outstanding obligation to and will not have any
obligation to, and will not, indemnify its partners, officers, directors or
members, as the case may be, unless such an obligation is fully subordinated to
the Debt and will not constitute a claim against it in the event that cash flow
in excess of the amount required to pay the Debt is insufficient to pay such
obligation;

 

(ff) if such entity is a corporation, it shall consider the interests of its
creditors in connection with all corporate actions;

 

(gg) except for obligations guaranteed by any Affiliate as permitted by the Loan
Documents or any loan document with other institutional lenders which have been
or will be paid off on or prior to making the Loan, does not and will not have
any of its obligations guaranteed by any Affiliate;

 

(hh) except for its ownership interest in any Individual Mortgage Borrower, will
not form, acquire or hold any subsidiary (whether corporate, partnership,
limited liability company or otherwise) or own equity interests in any other
entity; and

 

(ii) has complied and will comply with all of the terms and provisions contained
in its organizational documents and the statement of facts contained in its
organizational documents are true and correct and will remain true and correct.

 

“Spread” shall mean four and fifty one-hundredths of one percent (4.50%).

 

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

 

“Strike Price” shall mean five and fifty one hundredths percent (5.50%),
provided that, in connection with any Extension Option, the Strike Price
applicable to a Replacement Interest Rate Cap Agreement may be increased (but
not decreased) to a rate which results in a debt service coverage ratio (on an
aggregate basis) of the Mortgage Loan and the Mezzanine Loans of not less than
1.05 to 1 based on (a) Net Cash Flow, and (b) an assumed interest rate (which
shall be equal to such Strike Price, plus the Spread), together with anticipated
principal amortization of the Mortgage Loan and the Mezzanine Loans over the
ensuing twelve (12) month period; provided, further that, in connection with any
proposed adjustment of the Strike Price in accordance with the foregoing
proviso, the determination by Lender in accordance

 

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with the provisions thereof of (i) Net Cash Flow shall be conclusive and binding
for all purposes, absent manifest error.

 

“Subject Month” shall have the meaning set forth in Section 7.3.1(b) hereof.

 

“Submerged Land Leases” shall mean, collectively, those certain Sovereignty
Submerged Lands Leases for submerged land with Florida Department of
Environmental Protection as more particularly described on Schedule 1.8 hereto.

 

“Subordination of Franchise Agreement” shall mean that certain letter agreement,
dated as of the date hereof, among Lender, Borrower, Mortgage Borrower, Mortgage
Lender and Franchisor, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

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

 

“Subsequent Ground Lease Escrow Deposit” shall have the meaning set forth in
Section 7.4 hereof.

 

“Substitute Individual Property” shall have the meaning set forth in Section 2.8
hereof.

 

“Substituted Individual Property” shall have the meaning set forth in Section
2.8 hereof.

 

“Tax and Insurance Escrow Fund” shall have the meaning set forth in Section 7.2
hereof.

 

“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against any Individual Property or part thereof.

 

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

 

“Tempus Documents” shall mean each of the agreements and other documents as set
forth on Schedule 2.10 attached hereto.

 

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

 

“Transferee” shall have the meaning set forth in Section 5.2.10(f)(iii)(B)
hereof.

 

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

 

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“UCC Financing Statements” shall mean the UCC financing statement executed in
connection with the Cash Management Agreement, 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 form reasonably acceptable to Lender issued with
respect to the Collateral and insuring the lien of the Pledge Agreement
encumbering such Collateral.

 

“Unavoidable Delays” shall mean delays due to acts of God, government
restrictions, stays, judgments, orders, decrees, enemy actions, acts of
terrorism, civil commotion, fire, casualty, strikes, work stoppages, shortages
of labor or materials, or other causes beyond the reasonable control of
Borrower; provided that the lack or insufficiency of funds shall not constitute
an Unavoidable Delay.

 

“Uncontrollable Expenses” shall have the meaning set forth in Section 5.1.11(d)
hereof.

 

“Uniform System of Accounts” shall mean the Uniform System of Accounts for
Hotels as in effect from time to time as adopted by the American Hotel and Motel
Association.

 

“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
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged.

 

“Variable Expenses” shall have the meaning set forth in Section 5.1.11(d)
hereof.

 

“WKA Ground Lease” shall mean collectively, that certain Agreement dated as of
June 30, 2000, as amended on the date hereof, between WKA Development, S.E. and
El Con Mortgage Borrower and that certain Agreement dated as of June 23, 2000,
as amended on the date hereof, between WKA Development, S.E. and El Con Mortgage
Borrower.

 

“Wyndham” shall mean Wyndham International, Inc. and its successors and
permitted assigns.

 

Section 1.2. Principles of Construction. 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. Wherever a
representation, warranty or certificate is based upon the knowledge of any
Individual Borrower or Borrower, the knowledge of each Individual Borrower or
Borrower shall be imputed to each other Individual Borrower or Borrower subject
to the provisions hereof and of the Mortgage Loan Agreement relating to the
Minority Interest Properties. Terms used herein but defined in the Mortgage Loan
Agreement shall have the

 

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meaning set forth in the Mortgage Loan Agreement as of the Closing Date,
notwithstanding any subsequent amendment of the Mortgage Loan Agreement to such
defined terms unless Lender shall have consented to such amendment.

 

  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.

 

2.1.3 The Note, Mortgages 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 solely to (a)
make an equity contribution to Mortgage Borrower in order to cause the Mortgage
Borrower to use such amounts for any use permitted pursuant to Section 2.1.4 of
the Mortgage Loan Agreement, (b) pay costs and expenses incurred in connection
with the closing of the Loan, and (c) retain the balance, if any, or make
distributions to its equity owners.

 

Section 2.2. Interest Generally.

 

2.2.1 Interest Generally. Interest on the outstanding principal balance of the
Loan shall accrue from (and including) the Closing Date to the last day of the
Interest Period immediately preceding the Maturity Date at the Applicable
Interest Rate. Borrower shall pay to Lender on each Payment Date the interest
accrued on the Loan for the immediately preceding Interest Period. On or prior
to the first (1st) day of the month in which any Payment Date occurs (other than
the Payment Date occurring in the month immediately following the Closing Date),
Lender shall provide to Borrower a statement setting forth the amount of such
accrued interest.

 

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
a three hundred sixty (360) day year by (c) the outstanding principal balance.

 

2.2.3 Determination of Interest Rate. (a) The Applicable Interest Rate with
respect to the Loan shall be: (i) LIBOR plus the Spread with respect to the
applicable Interest Period for a LIBOR Loan or (ii) the Prime Rate plus the
Prime Rate Spread for a Prime Rate Loan if the Loan is converted to a Prime Rate
Loan pursuant to the provisions of Section 2.2.3 (c) or (f).

 

(b) Subject to the terms and conditions of this Section 2.2.3, the Loan shall be
a LIBOR Loan and Borrower shall pay interest on the outstanding principal amount
of the Loan

 

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at LIBOR plus the Spread for the applicable Interest Period. Any change in the
rate of interest hereunder due to a change in the Applicable Interest Rate shall
become effective as of the opening of business on the first day on which such
change in the Applicable Interest Rate shall become effective. Each
determination by Lender of the Applicable Interest Rate shall be conclusive and
binding for all purposes, absent manifest error.

 

(c) In the event that Lender shall have determined (which determination shall be
conclusive and binding upon Borrower absent manifest error) that by reason of
circumstances affecting the interbank eurodollar market, adequate and reasonable
means do not exist for ascertaining LIBOR, then Lender shall forthwith give
notice by telephone of such determination, confirmed in writing, to Borrower at
least one (1) Business Day prior to the last day of the related Interest Period.
If such notice is given, the related outstanding LIBOR Loan shall be converted,
on the last day of the then current Interest Period, to a Prime Rate Loan.

 

(d) If, pursuant to the terms of this Agreement, any portion of the Loan has
been converted to a Prime Rate Loan and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that the event(s) or circumstance(s) which resulted in such conversion
shall no longer be applicable, Lender shall give notice by telephone of such
determination, confirmed in writing, to Borrower at least one (1) Business Day
prior to the last day of the related Interest Period. If such notice is given,
the related outstanding Prime Rate Loan shall be converted to a LIBOR Loan on
the last day of the then current Interest Period.

 

(e) With respect to a LIBOR Loan, all payments made by Borrower hereunder shall
be made free and clear of, and without reduction for or on account of, income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions,
reserves or withholdings imposed, levied, collected, withheld or assessed by any
Governmental Authority, which are imposed, enacted or become effective after the
date hereof (such non-excluded taxes being referred to collectively as “Foreign
Taxes”), excluding income and franchise taxes of the United States of America or
any political subdivision or taxing authority thereof or therein (including
Puerto Rico) or any other jurisdiction. If any Foreign Taxes are required to be
withheld from any amounts payable to Lender hereunder (and such Foreign Taxes
are not a result of activities of Lender unrelated to the Loan or Borrower), the
amounts so payable to Lender shall be increased to the extent necessary to yield
to Lender (after payment of all Foreign Taxes) interest or any such other
amounts payable hereunder at the rate or in the amounts specified hereunder.
Whenever any Foreign Tax is payable pursuant to applicable law by Borrower, as
promptly as possible thereafter, Borrower shall send to Lender an original
official receipt, if available, or certified copy thereof showing payment of
such non-excluded Foreign Tax. Borrower hereby indemnifies Lender for any
incremental taxes, interest or penalties that may become payable by Lender which
may result from any failure by Borrower to pay any such Foreign Tax when due to
the appropriate taxing authority or any failure by Borrower to remit to Lender
the required receipts or other required documentary evidence provided, however,
in the event that Lender or any successor and/or assign of Lender is not
incorporated under the laws of the United States of America or a state thereof
upon request Lender agrees that, prior to the first date on which any payment is
due such entity hereunder, it will deliver to Borrower (i) two duly completed
copies of United State Internal Revenue Service Form W-8BEN or W-8EC1 or
successor applicable form, as the case may be, certifying in each case that such
entity is entitled to receive payments

 

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under the Note, without deduction or withholding of any United States federal
income taxes, and (ii) an Internal Revenue Service Form W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding tax. Each entity required to deliver to Borrower a
Form W-8BEN or W-8ECI or Form W-9 pursuant to the preceding sentence further
undertakes to deliver to Borrower two further copies of the said letter and
W-8BEN or W-8ECI or Form W-9, or successor applicable forms, or other matter of
certification, as the case may be, on or before the date that any such letter or
form expires (which in the case of the Form W-8SECI, is the last day of each
U.S. taxable year of the non-U.S. entity) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent letter and form
previously delivered by it to Borrower, and such other extensions or renewals
thereof as may reasonably be requested by Borrower, certifying in the case of a
Form W-8BENM or W-8ECI that such entity is to receive payments under the Note
without deduction or withholding of any United States federal income taxes,
unless in any case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such entity from duly completing and delivering to any
such letter or form with respect to it and such entity advises Borrower that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax and in the case of a Form W-9, and establishing
an exemption from United State backup withholding tax. Notwithstanding the
foregoing, if such entity fails to provide a duly completed Form W-8BEN or
W-8SECI or other applicable form and, under applicable law, in order to avoid
liability for Foreign Taxes, and Borrower is required to withhold on payments
made to such entity that has failed to provide the applicable form, Borrower
shall be entitled to withhold the appropriate amount of Foreign Taxes. In such
event, Borrower shall promptly provide to such entity evidence of payment of
such Foreign Taxes to the appropriate taxing authority and shall promptly
forward to such entity any official tax receipts or other documentation with
respect to the payment of the Foreign Taxes as may be issued by the taxing
authority.

 

(f) If any requirement of law or any change therein or in the interpretation or
application thereof, shall hereafter make it unlawful for Lender to make or
maintain a LIBOR Loan as contemplated hereunder (i) the obligation of Lender
hereunder to make a LIBOR Loan or to convert a Prime Rate Loan to a LIBOR Loan
shall be canceled forthwith and (ii) any outstanding LIBOR Loan shall be
converted automatically to a Prime Rate Loan on the next succeeding Payment Date
or within such earlier period as required by law. Borrower hereby agrees
promptly to pay Lender, within ten (10) days of Lender’s written demand
therefor, any additional amounts necessary to compensate Lender for any
reasonable costs incurred by Lender in making any conversion in accordance with
this Agreement, including, without limitation, any interest or fees payable by
Lender to lenders of funds obtained by it in order to make or maintain the LIBOR
Loan hereunder. Upon written request from Borrower, Lender shall demonstrate in
reasonable detail the circumstances giving rise to Lender’s determination and
calculation substantiating the Prime Rate Loan and any additional costs by
Lender in making the conversion. Lender’s notice of such costs, as certified to
Borrower, shall be conclusive absent manifest error.

 

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(g) 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 LIBOR hereunder;

 

(ii) shall, if the Loan is a LIBOR Loan, 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; or

 

(iii) shall, if the Loan is a LIBOR Loan, hereafter impose on Lender any other
condition 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(g), Lender shall provide
Borrower with not less than thirty (30) days 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. This provision shall survive payment of the Note
and the satisfaction of all other obligations of Borrower under this Agreement
and the Loan Documents.

 

(h) Borrower agrees to indemnify Lender and to hold Lender harmless (without
duplication) from any loss or expense which Lender sustains or incurs as a
consequence of (i) any Event of Default by Borrower in payment of the principal
of or interest on a LIBOR 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 Loan hereunder, (ii) any prepayment
(whether voluntary or mandatory) of the LIBOR Loan on a day that (A) is not a
Payment Date or (B) is a Payment Date but Borrower did not give the prior 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 Loan
hereunder and (iii) the conversion (for any reason whatsoever, whether voluntary
or involuntary) of the Applicable Interest Rate from LIBOR plus the Spread to
the Prime Rate plus the Prime Rate Spread with respect to any portion of the
outstanding principal amount of the Loan then bearing interest at LIBOR plus the
Spread on a date other than the Payment Date immediately following the last day
of an Interest Period, including, without limitation, such loss or expenses
arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain a LIBOR 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

 

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expense arising from Lender’s willful misconduct, fraud, illegal acts, gross
negligence or bad faith. 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.

 

(i) Lender shall not be entitled to claim compensation pursuant to this Section
2.2.3 for any Foreign Taxes, increased cost or reduction in amounts received or
receivable hereunder, or any reduced rate of return, which was incurred or which
accrued more than the earlier of (i) ninety (90) days before the date Lender
notified Borrower of the change in law or other circumstance on which such claim
of compensation is based and delivered to Borrower a written statement setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Section 2.2.3, which statement shall be conclusive and
binding upon all parties hereto absent manifest error or (ii) any earlier date
provided that Lender notified Borrower of such change in law or circumstance and
delivered the written statement referenced in clause (i) within ninety (90) days
after Lender received written notice of such change in law or circumstance.

 

2.2.4 Additional Costs. Lender will use reasonable efforts (consistent with
legal and regulatory restrictions) to maintain the availability of the LIBOR
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 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 (including the effect on any Securitization) as
determined by Lender in its sole but good faith 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 Applicable 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

 

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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 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 Counterparty during a Cash Sweep Period to deposit with
Lender 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 a secured party foreclosure sale or
transfer 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 not less than
the outstanding principal balance of the Loan. Borrower shall collaterally
assign to Lender, pursuant to the Collateral 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 during a Cash Sweep
Period be paid directly to Lender) and shall notify the Counterparty of such
assignment. At such time as the Loan is repaid in full, all of Lender’s right,
title and interest in the Interest Rate Agreement shall terminate and Lender
shall promptly execute and deliver at Borrower’s sole cost and expense, such
documents as may be required to evidence Lender’s release of the Interest Rate
Cap Agreement and to notify the Counterparty of such release.

 

(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
Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall
be deposited immediately with Lender upon the occurrence of a Cash Sweep Event
and during a Cash Sweep Period. 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 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 Counterparty such that the Counterparty is no longer an Acceptable
Counterparty (unless there is a guarantor of its obligations as Counterparty,
and then as to such guarantor) by any 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 written 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 resolution or consent, as applicable, of the
Counterparty

 

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authorizing the delivery of the Interest Rate Cap Agreement reasonably
acceptable to Lender and an opinion from counsel (which counsel may be in-house
counsel for the Counterparty) for the Counterparty (upon which Lender and its
successors and assigns may rely) which shall provide, in relevant part, that:

 

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

 

(ii) the execution and delivery of the Interest Rate Cap Agreement by the
Counterparty, and any other agreement which the Counterparty has executed and
delivered pursuant thereto, and the performance of its obligations thereunder
have been and remain duly authorized by all necessary action and do not
contravene any provision of its certificate of incorporation or by-laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;

 

(iii) all consents, authorizations and approvals required for the execution and
delivery by the Counterparty of the Interest Rate Cap Agreement, and any other
agreement which the Counterparty has executed and delivered pursuant thereto,
and the performance of its obligations thereunder have been obtained and remain
in full force and effect, all conditions thereof have been duly complied with,
and no other action by, and no notice to or filing with any governmental
authority or regulatory body is required for such execution, delivery or
performance; and

 

(iv) the Interest Rate Cap Agreement, and any other agreement which the
Counterparty has executed and delivered pursuant thereto, has been duly executed
and delivered by the Counterparty and constitutes the legal, valid and binding
obligation of the Counterparty, enforceable against the Counterparty in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

Section 2.3. Loan Payment.

 

2.3.1 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 June 8, 2005, and (b) on each Payment Date
commencing on July 9, 2005 and on each Payment Date thereafter up to and
including the Initial Maturity Date, interest only on the outstanding principal
balance of Loan for the Interest Period immediately preceding such Payment Date,
through the Interest Period immediately preceding the Initial Maturity Date, and
(c) during the term of any Extension Option, a monthly payment on each Payment
Date of (i) interest on the outstanding principal balance of the Loan for the
Interest Period immediately preceding such Payment Date, and (ii) a payment of
principal based on a 25-year amortization schedule and an implied interest rate
equal to 7.25% as set forth on Schedule 2.3.1 attached hereto, which
amortization schedule shall be adjusted in connection with prepayments of the
outstanding principal balance of the Loan. Payments under the Loan shall be
applied first to

 

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interest due for the related Interest Period at the Applicable Interest Rate and
then to the principal amount of the Loan due in accordance with this Agreement,
and lastly, to any other amounts due and unpaid pursuant to the Loan Documents.
All amounts due pursuant to this Agreement and the other Loan Documents shall be
payable without setoff, counterclaim, defense or any other deduction whatsoever.

 

2.3.2 Payment on Maturity Date. Borrower shall pay to Lender on the Maturity
Date the outstanding principal balance of the Loan, all accrued and/or unpaid
interest through and including the last day of the Interest Period immediately
preceding the Maturity Date occurs and all other amounts due hereunder and under
the Note, the Pledge Agreement and the other Loan Documents. Notwithstanding
anything to the contrary contained herein or in the other Loan Documents, for
purposes of payment only (and not for the calculation of interest), if the
Maturity Date is not a Business Day, the Maturity Date shall be deemed to be the
immediately preceding Business Day.

 

2.3.3 Late Payment Charge. Except as provided in Section 2.6.3 hereof, if any
regularly scheduled payment of Debt Service (other than any payment due on the
Maturity Date) is not paid by Borrower on or before the date such payment is due
(other than any payment due on the Maturity Date), Borrower shall pay to Lender
upon demand an amount equal to the lesser of five percent (5%) of such unpaid
sum or the maximum amount permitted by applicable law in order to defray the
expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. Any
such amount shall be secured by the Pledge Agreement and the other Loan
Documents to the extent permitted by applicable law.

 

2.3.4 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 1:00 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. Borrower may prepay the Loan in whole or in part,
provided that (i) no Event of Default shall have occurred and be continuing;
(ii) Borrower gives Lender not less than ten (10) Business Days prior written
notice of the amount of the Loan that Borrower intends to prepay; and (iii)
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 to be paid through and including the last day of the Interest Period
immediately preceding the Payment Date next occurring following the date of such
prepayment, or, if such prepayment occurs on a Payment Date, through and
including the last day of the Interest Period immediately preceding such Payment
Date; (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 (if any
and without duplication of costs covered by payments made pursuant to this
Section 2.4) 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) if such

 

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prepayment is made on or prior to the Prepayment Release Date, the Prepayment
Spread Maintenance Payment; and (D) if such payment is made on or prior to the
Lockout Release Date, the Exit Fee (except with respect to both the Prepayment
Spread Maintenance Payment and Exit Fee as otherwise provided in Section 2.4.2
hereof). If a notice of prepayment is given by Borrower to Lender pursuant to
this Section 2.4.1, the amount designated for prepayment and all other sums
required under this Section 2.4 shall be due and payable on the proposed
prepayment date; provided, however, Borrower shall have the right to postpone
such prepayment upon written notice to Lender on the date immediately prior to
the date such prepayment is due so long as Borrower pays Lender and/or Servicer
all costs and expenses incurred by Lender or Servicer in connection with such
postponement. In the event that any prepayment occurs prior to the applicable
Determination Date it may be impossible for Borrower and Lender to calculate
with certainty the interest that would have accrued at the Applicable Interest
Rate on the amount then prepaid through the end of the Interest Period in which
such prepayment occurs. Accordingly, in the event that the Debt is prepaid prior
to the Determination Date applicable to the Interest Period in which such
prepayment occurs, the interest that would have accrued at the Applicable
Interest Rate on the amount then prepaid through the end of the Interest Period
in which such prepayment occurs shall be calculated based on an interest rate
(the “Assumed Note Rate”) equal to the sum of (i) LIBOR for the Interest Period
prior to the Interest Period in which such prepayment occurs, plus (ii) the
Spread, plus (iii) one percent (1.00%). Thereafter, on the Determination Date
applicable to the Interest Period in which such prepayment occurs, Lender shall
determine the Applicable Interest Rate as if such prepayment had not occurred.
If it is determined by Lender that the Applicable Interest Rate for the Interest
Period in which such prepayment occurs is less than the Assumed Note Rate,
Lender shall promptly refund to Borrower, without interest, an amount equal to
the difference between the interest paid by Borrower for the Interest Period in
which such prepayment occurs calculated at the Assumed Note Rate and the amount
of interest for said Interest Period calculated at the actual Applicable
Interest Rate. Alternatively, in the event that it is determined that the actual
Applicable Interest Rate applicable to the Interest Period in which such
prepayment occurs is greater than the Assumed Note Rate, Borrower shall promptly
pay to Lender, without additional interest or other late charges or penalties
(and in no event later than the fifteen (15th) day of the month in which such
prepayment occurs), an amount equal to the difference between the interest paid
by Borrower for the Interest Period in which such prepayment occurs on the
prepaid amount calculated at the Assumed Note Rate and the amount of interest
for said Interest Period calculated at the actual Applicable Interest Rate.

 

2.4.2 Liquidation Events; Mandatory Prepayments. (a) In the event of (i) any
Casualty to all or any portion of the Properties or any material portion of any
Individual Property thereof, (ii) any Condemnation of all or any portion of the
Properties or any material portion of any Individual Property thereof, (iii) a
Transfer of any Collateral or of any Individual Property in connection with
realization thereon by Lender or Mortgage Lender, as applicable, following an
Event of Default, Mortgage Loan Default, including without limitation a
foreclosure sale, (iv) any refinancing of any Individual Property, the Loan or
the Mortgage Loan, (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 or (vi) the receipt by
Mortgage Borrower of any excess proceeds realized pursuant to a lawsuit, claim
or other proceeding brought to enforce its rights under a warranty deed after
application of such proceeds by Mortgage Borrower to cure any title defect
(each, a “Liquidation Event”), but

 

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subject to the rights, if any, of Mortgage Lender under the Mortgage Loan
Documents, Borrower shall cause the related Net Liquidation Proceeds After Debt
Service to be paid directly to Lender to be applied in accordance with the terms
of this Agreement. On each date on which Lender actually receives a distribution
of Net Liquidation Proceeds After Debt Service, Borrower shall prepay 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 and including the
Interest Period related to the next Payment Date and any Spread Maintenance
Payment, if applicable. The Release Amount with respect to such Individual
Property shall be reduced in an amount equal to the principal portion of such
prepayment (provided, however, no reallocation of Release Amounts shall occur).
Any amounts of Net Liquidation Proceeds After Debt Service in excess of the Debt
shall be deposited with Lender and applied in accordance with the terms of this
Agreement. Notwithstanding the foregoing, any Net Liquidation Proceeds After
Debt Service related to a Liquidation Event described in clauses (i) or (ii)
above shall be applied to the outstanding principal balance of the Loan in an
amount not to exceed the related Adjusted Release Amount for the applicable
affected Individual Property or Properties and provided (x) no Cash Sweep Period
is then in effect and (y) no Event of Default has occurred and is continuing any
Net Liquidation Proceeds After Debt Service in excess of such Adjusted Release
Amount shall be paid to Borrower. Any prepayment received by Lender pursuant to
this Section 2.4.2(a) on a date other than a Payment Date shall be held by
Lender as collateral security for the Loan 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. Any transfer or refinancing of an Individual
Property that results in a release of such Individual Property (or a release of
Mortgage Borrower’s obligations in respect of such Individual Property) in
accordance with the terms of Section 2.5.2 shall not be deemed a Liquidation
Event for purposes of this Agreement.

 

(b) Borrower shall promptly notify Lender of any Liquidation Event once Borrower
has knowledge of such event. Borrower shall be deemed to have knowledge of (i) a
sale (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 of
any Individual Property, on the date on which a 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 Loan, the Mortgage Loan or Transfer of the
Collateral, or the Properties set forth in this Agreement and the other Loan
Documents.

 

(c) If any Individual Property or Mortgage Borrower’s or Baltimore Owner’s
interests therein, or any of the Collateral or Borrower’s direct or indirect
interests in Mortgage Borrower and Baltimore Owner are sold, transferred or
otherwise disposed of, voluntarily or involuntarily (other than in accordance
with the terms of this Agreement) or if the Mortgage Loan is repaid in full,
then, Borrower shall be required to pay the Loan in full and otherwise in
accordance with Section 2.4.1 hereof plus payment of the Prepayment Spread
Maintenance Payment if such payment occurs on or prior to the Prepayment Release
Date except, unless an Event of Default then exists, no Prepayment Spread
Maintenance Payment or Exit Fee shall be due in connection with any prepayment
made pursuant to the application of Net Proceeds to the Debt or any prepayment
made to obtain a release of an Individual Property following the application of
Net Proceeds from such Individual Property to the Debt.

 

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2.4.3 Prepayments After Default. If, following an Event of Default, and during
the continuation thereof, 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 Reserve Funds), such tender or recovery shall (a)
include interest at the Default Rate on the outstanding principal amount of the
Debt being tendered or recovered 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 shall include (i) if such tender or recovery occurs
on or prior to the Prepayment Release Date, an amount equal to the applicable
Prepayment Spread Maintenance Payment, (ii) if such tender or recovery occurs on
or prior to the Lockout Release Date, an amount equal to the applicable
Prepayment Spread Maintenance Payment and Exit Fee and (iii) all interest which
would have accrued on the amount of the Loan to be paid through and including
the last day of the Interest Period immediately preceding the Payment Date next
occurring following the date of such prepayment, or, if such prepayment occurs
on a Payment Date, through and including the last day of the Interest Period
immediately preceding such Payment Date. Borrower acknowledges and agrees that
any sums received by Lender pursuant to this Section 2.4.3 may be transferred by
the Lender to the Mortgage Lender in accordance with the terms of the
Intercreditor Agreement to be applied to the payment of the Mortgage Loan in
accordance with the terms of the Mortgage Loan Documents and any such sums which
are transferred to the Mortgage Lender will not be applied to the payment of the
Debt.

 

2.4.4 Prepayments to Satisfy Requirements. Borrower may at any time prepay a
portion of the Loan to (i) effectuate a Cash Sweep Cure, or (ii) satisfy the
Debt Service Coverage Ratio test in connection with a Release, provided Borrower
satisfies the requirements of Section 2.4.1 hereof.

 

2.4.5 Intentionally Omitted.

 

Section 2.5. Release of Collateral. Except as set forth in this Section 2.5 and
Section 8.1(c), 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 or assignment of any Lien of the Pledge Agreement or the Collateral.

 

2.5.1 Release of Individual Property. Borrower may cause Mortgage Borrower,
except for El Con Mortgage Borrower and El San Juan Mortgage Borrower, to obtain
the release of an Individual Property (other than the El Con Individual Property
and the El San Juan Individual Property) and after the Prepayment Release Date,
Borrower may cause El Con Mortgage Borrower and El San Juan Mortgage Borrower to
also obtain the release of the El Con Individual Property and the El San Juan
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 and to obtain
the release of the Collateral and of the applicable Individual Borrower
obligations under the Loan Documents with respect to such Individual Property
(other than those expressly stated to survive), upon the satisfaction of each of
the following conditions:

 

(a) No Event of Default shall have occurred and be continuing that will not be
cured by the release of such Individual Property;

 

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(b) Mortgage Borrower shall have satisfied all of the conditions to the proposed
release set forth in the Mortgage Loan Agreement;

 

(c) Subject to the third sentence of this Section 2.5.1(c) giving effect to such
release, the Debt Service Coverage Ratio for the Properties then remaining
subject to the Liens of the Mortgage Loan Documents shall be equal to or greater
than the Debt Service Coverage Ratio for all of the then remaining Properties
(including the Individual Property to be released) for the twelve (12) full
calendar months immediately preceding the release of the Individual Property. In
addition and if the Individual Property to be released is a Non-Minority
Interest Property, after giving effect to such release, the Debt Service
Coverage Ratio for the Non-Minority Interest Properties then remaining subject
to the Liens of the Mortgages shall be equal to or greater than the Debt Service
Coverage Ratio for all of the then remaining Non-Minority Interest Properties
(including the Individual Property to be released) for the twelve (12) full
calendar months immediately preceding the release of the Individual Property.
Notwithstanding the provisions set forth in the first sentence of this Section
2.5.1(c), in the event that the Individual Property to be released is the
Atlanta Individual Property, then after giving effect to such release, the Debt
Service Coverage Ratio for the Properties then remaining subject to the Liens of
the Mortgages shall not be less than the Debt Service Coverage Ratio for all of
the then remaining Properties (including the Atlanta Individual Property to be
released) for the twelve (12) full calendar months immediately preceding the
release of the Atlanta Individual Property, plus 0.01. For purposes of
clarification only, if the Debt Service Coverage Ratio for all of the then
remaining Properties (including the Atlanta Individual Property to be released)
for the applicable period is equal to 1.20 to 1.0, then, after giving effect to
the release of the Atlanta Individual Property, the Debt Service Coverage for
the Properties then remaining subject to the Liens of the Mortgages must be
greater than or equal to 1.21 to 1.0;

 

(d) The Individual Property to be released shall be conveyed to a Person other
than a Mortgage Borrower or any of its Affiliates, if such Mortgage Borrower
will continue to own Properties not released;

 

(e) Borrower shall pay to Lender in reduction of the outstanding principal
balance of the Loan the Adjusted Release Amount for the applicable Individual
Property, the Prepayment Spread Maintenance Payment, if any, and the Exit Fee,
if any, due in connection therewith. Notwithstanding anything to the contrary
contained in Section 2.4 hereof or the foregoing provisions of this Section
2.5.1(e), Borrower may obtain the release of the Collateral with respect to and
cause Mortgage Borrower to obtain the release of one (1) Individual Property
(other than the El Con Individual Property or the El San Juan Individual
Property) with the payment of the Prepayment Spread Maintenance Payment and the
Exit Fee if such prepayment occurs on or prior to the Lockout Release Date and
without any Prepayment Spread Maintenance Payment or Exit Fee thereafter,
provided, that no Individual Property has been theretofore released without the
payment of the Prepayment Spread Maintenance Payment and the Exit Fee; and

 

(f) Concurrently with the payment of the Adjusted Release Amount, each
applicable Mezzanine Borrower shall make a partial prepayment of the related
Mezzanine Loan equal to the related Mezzanine Adjusted Release Amount applicable
to such Individual Property, together with any related interest, fees,
prepayment premiums or other amounts payable under

 

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the related Mezzanine Loan Documents in connection with such prepayment,
including, to the extent such prepayment is made on a date other than a Payment
Date, interest which would have accrued on the outstanding principal balance of
the related Mezzanine Loan pursuant to the applicable Mezzanine Loan Documents.

 

2.5.2 Release on Payment in Full. Lender shall, upon the written request and at
the expense of Borrower, upon payment in full of all principal and interest due
on the Loan and all other amounts due and payable under the Loan Documents in
accordance with the terms and provisions of the Note and this Agreement, release
the Lien of the Pledge Agreement and any other Liens on the Collateral not
theretofore released, provided, that Borrower shall submit to Lender, not less
than thirty (30) days prior to the date of such release, a release of Lien (and
related Loan Documents) for the Collateral not theretofore released for
execution by Lender. Such release shall be in a form appropriate in each
jurisdiction in which such release of the Collateral needs to be filed and that
would be satisfactory to a prudent lender and that contains standard provisions,
if any, protecting the rights of the releasing lender.

 

2.5.3 Release on Application of Net Proceeds. In addition to the foregoing
provisions (including, but not limited to, the payment of the Release Amount),
Borrower shall have the right to obtain a release of the Collateral applicable
to an Individual Property in accordance with the terms this Section 2.5, at any
time whether before or after the Prepayment Release Date, provided (i) Mortgage
Lender, Lender or any other Mezzanine Lender has elected to apply the Net
Proceeds of a Casualty or Condemnation of the applicable Individual Property
towards the reduction of its respective Debt accruing under its respective loan,
(ii) no Event of Default has occurred and shall be continuing which will not be
cured by obtaining the release, (iii) Borrower pays all accrued and unpaid
interest on the amount of the principal being prepaid through and including the
last day of the Interest Period in which such prepayment occurs, and (iv)
Borrower pays all Breakage Costs, if any, without duplications of the amounts
provided for in the immediately preceding clause (iii) above.

 

Section 2.6. Cash Management.

 

2.6.1 Property Account. (a) Borrower shall cause Mortgage Borrower and Baltimore
Owner to establish and maintain one or more segregated Eligible Accounts
(individually, a “Property Account” and collectively the “Property Accounts”)
with a Property Account Bank in trust for the benefit of Mortgage Lender, which
Property Accounts shall be under the sole dominion and control of Mortgage
Lender. Each Property Account shall be entitled as set forth in the Property
Account Agreement. Borrower hereby grants to Lender a first priority security
interest in Borrower’s interest in each Property Account and all deposits at any
time contained therein and the proceeds thereof and will take all actions
necessary to maintain in favor of Lender a first priority security interest in
the Property Accounts, including, without limitation, executing and filing UCC-1
Financing Statements and continuations thereof. Provided that no Event of
Default has occurred and is continuing, at any time that is prior to a Cash
Sweep Event or after a Cash Sweep Cure (a “Cash Sweep Period”), Mortgage
Borrower shall have the sole right to make withdrawals from each Property
Account, including, without limitation, the right to sweep the account on a
daily basis. Upon the occurrence of a Cash Sweep Event (but prior to a Cash
Sweep Cure) or during the continuance of an Event of Default, Mortgage Lender
shall provide notice of such occurrence to the Property Account Bank, and,

 

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thereafter Mortgage Lender and Mortgage Servicer shall have the sole right to
make withdrawals from each Property Account in accordance with the Mortgage Loan
Agreement and the other Mortgage Loan Documents. All costs and expenses for
establishing and maintaining the Property Accounts shall be paid by Mortgage
Borrower. Subject to the rights of Mortgage Lender under the Mortgage Loan
Documents, all monies now or hereafter deposited into the Property Accounts
shall be deemed additional security for the Debt.

 

(b) Borrower shall, or shall cause Mortgage Borrower and Baltimore Owner to, or
shall cause Mortgage Borrower and Baltimore Owner to cause Manager to (i)
deliver irrevocable written instructions to each of the credit card companies or
credit card clearing banks with which Mortgage Borrower, Baltimore Owner or
Manager has entered into merchant’s agreements to deliver all receipts payable
with respect to an Individual Property directly to the applicable Property
Account. Borrower shall, or shall cause Mortgage Borrower to cause Manager and
any Affiliates of Wyndham at the Minority Interest Properties to, deposit all
amounts received by Mortgage Borrower or Manager constituting Rents into a
Property Account within one (1) Business Day of receipt thereof.

 

(c) Borrower shall cause Mortgage Borrower to obtain from each Property Account
Bank its agreement that, upon written notice from Mortgage Lender of the
occurrence of a Cash Sweep Event or an Event of Default, the Property Account
Bank shall transfer to the Cash Management Account in immediately available
funds by federal wire transfer all amounts on deposit in the Property Account
once every Business Day until such time as Property Account Bank receives
written notice from Mortgage Lender of the occurrence of a Cash Sweep Cure or
the withdrawal of the related notice of an Event of Default. Such agreement from
the Property Account Bank shall contain an agreement that the transfers to the
Cash Management Account from the Property Accounts related to each of the
Minority Interest Properties shall each be separate from the transfers to the
Cash Management Account for every other Individual Property and shall be
separately identifiable upon transfer to the Cash Management Account. Bank fees,
returned checks and credit card charge-backs may be debited and paid from the
Property Account. All funds on deposit in the Cash Management Account shall be
applied by Mortgage Lender in accordance with the Cash Management Agreement.

 

(d) 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 received by Lender under or pursuant to the Cash
Management Agreement to the payment of the Debt in any order or priority in its
sole discretion; provided, however, Lender agrees that any sums it receives
which are associated with a Minority Interest Borrower shall only be applied to
the Minority Interest Debt applicable to such Minority Interest Borrower.

 

(e) Borrower shall not cause or permit Mortgage Borrower and Baltimore Owner to
further pledge, assign or grant any security interest in the Property 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 Mortgage Lender as the secured party, to be filed with
respect thereto. Borrower shall not further pledge, assign or grant any security
interest in the Mezzanine A Debt Service Account or the monies deposited therein
or permit any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any

 

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UCC-a Financing Statements, except those naming the Lender as the secured party,
to be filed with respect thereto.

 

(f) 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 a
Property Account and/or the applicable Property Account Agreement or the
performance of the obligations for which such Property Account was established
(unless arising from the bad faith, fraud, illegal acts, gross negligence or
willful misconduct of Lender or Mortgage Lender).

 

(g) In the event that a Minority Interest Property becomes a Non-Minority
Interest Property, any amount then on deposit in the Property Accounts
attributable to such Individual Property shall no longer be segregated and shall
thereafter be deemed to constitute funds attributable to a Non-Minority Interest
Property.

 

2.6.2 Cash Management Account. (a) During the term of the Loan, Borrower shall
cause Mortgage Borrower to 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. The Cash Management Account shall
segregate separately for each Minority Interest Property any sums received by it
from a Property Account for such Minority Interest Property. To the extent and
only to the extent Borrower has the right to do so under the Mortgage Loan
Documents, and without any representation as to Borrower’s interest in the Cash
Management Agreement or as to Borrower’s right to grant a security interest
therein to Lender or as to the perfection thereof, Borrower hereby grants to
Lender a first priority security interest in Borrower’s interest, if any, in the
Cash Management Account and all deposits at any time contained therein and the
proceeds thereof and will take all actions, if any, reasonably necessary to
maintain in favor of Lender a security interest in the Cash Management Account,
including, without limitation, executing and filing UCC-1 Financing Statements
and continuations thereof. Borrower will not cause or permit Mortgage Borrower
in any way to alter or modify the Cash Management Account without Lender’s
consent and will notify Lender of the account number thereof. Mortgage Lender
and its 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 Mortgage Borrower. Borrower shall
direct or cause Mortgage Borrower to direct that all cash distributions from the
Cash Management Account to be paid to Lender in accordance with the Cash
Management Agreement (including the Net Liquidation Proceeds After Debt Service)
be deposited into the Mezzanine A Debt Service Account maintained in accordance
with the Cash Management Agreement. Disbursements from the Mezzanine A Debt
Service Account will be made in accordance with the terms and conditions of the
Cash Management Agreement.

 

(b) Borrower hereby agrees that in the event Mortgage Borrower and Baltimore
Owner are no longer required to maintain the Property Account and the Cash
Management Account in accordance with the Mortgage Loan Documents, Borrower
shall establish a cash management account and system with Lender substantially
the same as required as of the Closing Date under the Mortgage Loan Documents.
If Borrower is required to deposit

 

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amounts with Lender pursuant to Article VII hereof, Borrower shall establish a
cash management account and system with Lender substantially the same as
required as of the Closing Date under the Mortgage Loan Documents (which cash
management account and system shall include accounts and subaccounts with
respect to the Reserve Funds)

 

(c) The insufficiency of funds on deposit in the Cash Management 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.

 

(d) All funds on deposit in the Mezzanine A Debt Service 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. Provided no Event
of Default shall have occurred and be continuing all funds on deposit in the
Mezzanine A Debt Service Account shall be applied by Lender in accordance with
this Agreement; provided, however, any Excess Cash Flow attributable to a
Minority Interest Borrower may only be applied by Lender to the Minority
Interest Debt of such Minority Borrower.

 

(e) In the event that a Minority Interest Property becomes a Non-Minority
Interest Property, any amount then on deposit in the Cash Management Account
attributable to such Individual Property shall no longer be segregated and shall
thereafter be deemed to constitute funds attributable to a Non-Minority Interest
Property.

 

2.6.3 Payments Received Under the Cash Management Agreement. Notwithstanding
anything to the contrary contained in this Agreement and the other Loan
Documents, and provided no Event of Default has occurred and is continuing, upon
the occurrence of a Cash Sweep Event and prior to the occurrence of a Cash Sweep
Cure, Borrower’s obligations with respect to the monthly payment of Debt Service
and amounts due for the Tax and Insurance Escrow Fund, Required Repair Fund,
Replacement Escrow Fund and any other payment reserves established pursuant to
this Agreement or any other Loan Document shall be deemed satisfied to the
extent sufficient amounts are deposited in the Mezzanine A Debt Service Account
established pursuant to the Cash Management Agreement to satisfy such
obligations on the dates each such payment is received by Lender, regardless of
whether any of such amounts are so applied by Lender.

 

Section 2.7. Extension of the Initial Maturity Date. Borrower shall have the
option to extend the term of the Loan beyond the Initial Maturity Date for five
(5) successive terms (each, an “Extension Option”) of one (1) year each (the
Initial Maturity Date following the exercise of each such option is hereinafter
the “Extended Maturity Date”) upon satisfaction of the following terms and
conditions:

 

(a) no Event of Default shall have occurred and be continuing at the time the
applicable Extension Option is exercised and on the date that the applicable
extension term is commenced;

 

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(b) Borrower shall notify Lender of its irrevocable election to extend the
Maturity Date as aforesaid not earlier than six (6) months, and no later than
one (1) month, prior to the date the Loan is then scheduled to mature;

 

(c) if the Interest Rate Cap Agreement is scheduled to mature prior to the
applicable Extended Maturity Date, Borrower shall obtain and deliver to Lender
not later than ten (10) Business Days prior to the first day of each Extension
Option, one or more Replacement Interest Rate Cap Agreements with a LIBOR strike
price equal to the then applicable Strike Price from an Acceptable Counterparty
which Replacement Interest Rate Cap Agreement shall be effective commencing on
the first date of such Extension Option and shall have a maturity date not
earlier than the applicable Extended Maturity Date;

 

(d) Intentionally omitted;

 

(e) Borrower shall pay to Lender (i) in connection with the exercise of the
fourth (4th) Extension Option an extension fee equal to one hundred twenty-five
thousandths of one percent (0.125%) of the then outstanding principal amount of
the Loan and (ii) in connection with the exercise of the fifth (5th) Extension
Option an extension fee equal to two hundred fifty thousandths of one percent
(0.250%) of the then outstanding principal amount of the Loan, in each case on
or prior to the commencement of the Extension Option, which extension fee shall
be deemed earned by Lender and non-refundable upon receipt;

 

(f) (i) in connection with the fourth (4th) Extension Option, the Debt Yield of
the Properties in the aggregate shall not be less than 10.75% as of the day
immediately preceding the commencement date thereof and (ii) in connection with
the fifth (5th) Extension Option, the Debt Yield of the Properties in the
aggregate shall not be less than 11.25% as of the day immediately preceding the
commencement date thereof; and

 

(g) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in
accordance with Section 2.7 of the Mortgage Loan Agreement.

 

Section 2.8. Substitution of Properties. Subject to the terms and conditions set
forth in this Section 2.8, Borrower may cause Mortgage Borrower to obtain a
release of the Lien of a Mortgage (and the related Mortgage Loan Documents)
encumbering an Individual Property (a “Substituted Individual Property”) by
substituting therefore another full service hotel or resort property of like
kind and quality acquired by Mortgage Borrower or an Affiliate of Mortgage
Borrower (provided, however, if the Substitute Property shall be owned by an
Affiliate of Mortgage Borrower such Affiliate (i) shall become a party to the
Mortgage Loan Documents and shall be bound by the terms and provisions thereof
as if it had executed the Mortgage Loan Documents and shall have the rights and
obligations of Mortgage Borrower thereunder) (a “Substitute Individual
Property”), provided that the following conditions precedent are satisfied.

 

(a) The Maturity Date shall have not occurred. During the term of the Loan,
Borrower shall have the right to cause Mortgage Borrower to substitute
Properties, provided that the sum of the original Release Amount for all
Substituted Individual Properties and all

 

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Properties released under Section 2.5.1 in no event exceeds thirty percent (30%)
of the original principal balance of the Loan;

 

(b) Lender shall have received at least thirty (30) days’ prior written notice
requesting the substitution and identifying the Substitute Individual Property
and Substituted Individual Property. If a Substitute Individual Property shall
consist, in whole or in part, of a leasehold estate created pursuant to a ground
lease such ground lease shall be reasonably acceptable to Lender;

 

(c) If the applicable Mortgage Borrower or Baltimore Owner continues to own an
Individual Property not released, Lender shall have received a copy of a deed
conveying all of the applicable Mortgage Borrower’s or Baltimore Owner’s right,
title and interest in and to the Substituted Individual Property to an entity
other than such Mortgage Borrower or Baltimore Owner pursuant to an arms length
transaction and a letter from the applicable Mortgage Borrower or Baltimore
Owner countersigned by a title insurance company acknowledging receipt of such
deed and agreeing to record such deed in the real estate records for the county
or other appropriate land registry in which the Substituted Individual Property
is located;

 

(d) Lender shall have received an appraisal of each of the Substitute Individual
Property and Substituted Individual Property, dated no more than ninety (90)
days prior to the substitution date, by an appraiser reasonably acceptable to
Lender;

 

(e) The fair market value of the Substitute Individual Property is not less than
one hundred percent (100%) of the fair market value of the Substituted
Individual Property as of the date immediately preceding the substitution, which
determination shall be made by Lender based on the appraisals delivered pursuant
to subsection (d) above;

 

(f) After giving effect to the substitution, the Debt Service Coverage Ratio for
the Mortgage Loan for all of the Properties (excluding the Substituted
Individual Property and including the Substitute Individual Property) is not
less than the Debt Service Coverage Ratio for the Mortgage Loan for all of the
Properties as of the date immediately preceding the substitution;

 

(g) No Event of Default shall have occurred and be continuing. Lender shall have
received an Officer’s Certificate certifying that, to such officer’s knowledge,
the representations and warranties of Mortgage Borrower and Baltimore Owner
contained in the Mortgage Loan Agreement and the other Mortgage Loan Documents
are true and correct in all material respects on and as of the date of the
substitution with respect to the Substitute Individual Property and containing
any other reasonable representations and warranties with respect to the
Substitute Individual Property as Lender may reasonably require, unless such
certificate would be inaccurate, such certificate to be in form and substance
reasonably satisfactory to Lender;

 

(h) Lender shall have received to the extent available a Mezzanine Loan or
similar endorsement to each Owner’s Title Insurance Policy insuring such
Substitute Individual Property as of the date of the substitution. The Title
Insurance Policy issued with respect to the Substitute Individual Property shall
contain such endorsements and affirmative coverages as are then available and
are contained in the Owner’s Title Insurance Policies of Mortgage Borrower and
Baltimore Owner insuring the Properties. Lender also shall have received copies
of paid

 

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receipts or other evidence showing that all premiums in respect of such
endorsements and Title Insurance Policies have been paid;

 

(i) Lender shall have received a current survey for each Substitute Individual
Property, certified to the title insurance company and Lender and their
successors and assigns, in substantially the same form and content as the
certification of the survey of the Substituted Individual Property prepared by a
professional land surveyor licensed in the State in which the Substitute
Individual Property is located and acceptable to the Rating Agencies, in
accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. Such survey shall reflect the same legal description contained in
the Title Insurance Policy delivered to Mortgage Lender under the Mortgage Loan
in connection with such Substitution relating to such Substitute Individual
Property and shall include, among other things, a metes and bounds description
of the real property comprising part of such Substitute Individual Property
(unless such real property has been satisfactorily designated by lot number on a
recorded plat). The surveyor’s seal shall be affixed to such survey and, if
customary, such survey shall certify whether any portion of the surveyed
property or the improvements thereon is located in a “one-hundred-year flood
hazard area”;

 

(j) Lender shall have received valid certificates of insurance indicating that
the requirements for the policies of insurance required for an Individual
Property hereunder have been satisfied with respect to the Substitute Individual
Property and evidence of the payment of all premiums payable for the existing
policy period;

 

(k) Lender shall have received a Phase I environmental report dated not more
than 90 days prior to the substitution and otherwise reasonably acceptable to a
prudent lender and, if recommended under the Phase I environmental report, a
Phase II environmental report acceptable to a prudent lender, which conclude
that the Substitute Individual Property does not contain any unacceptable levels
of hazardous materials and is not subject to any significant risk of
contamination from any off-site hazardous materials. If any such report
discloses the presence of any such hazardous materials or the risk of such
contamination from any off-site hazardous materials, such report shall include
an estimate of the cost of any related remediation and Borrower shall deposit
with Lender (which deposit may be made in the form of a Letter of Credit) an
amount equal to one hundred twenty-five percent (125%) of such estimated cost,
which deposit shall constitute additional security for the Loan and shall be
disbursed to pay for the costs of remediation in the manner provided herein for
the disbursement of the Required Repair Fund; provided, however, such deposit
shall be waived to the extent that Mortgage Borrower is required to make such
deposit with Mortgage Lender under the Mortgage Loan. Any remaining balance of
such deposit (or Letter of Credit) shall be released to Borrower upon the
delivery to Lender of (i) an update to such report indicating that there is no
longer any such hazardous materials on the Substitute Individual Property or any
significant risk of contamination from any such off-site hazardous materials
that has not been acceptably remediated and (ii) paid receipts or other
reasonable evidence indicating that the costs of all such remediation work have
been paid;

 

(l) Borrower shall deliver, or cause to be delivered, to Lender (i) updates
certified by Borrower of all organizational documentation related to Mortgage
Borrower and Borrower and/or the formation, structure, existence, good standing
and/or qualification to do

 

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business delivered to Lender on the Closing Date; (ii) good standing
certificates and/or certificates of qualification to do business in the
jurisdiction in which the Substitute Individual Property is located (if required
in such jurisdiction); and (iii) resolutions of Mortgage Borrower and Borrower
authorizing the substitution and any actions taken in connection with such
substitution; provided that such organizational documents, structure and other
documents delivered in accordance with the foregoing shall be reasonably
acceptable to an ordinary prudent lender;

 

(m) Lender shall have received copies of the opinions of Mortgage Borrower’s
counsel delivered to Mortgage Lender under Section 2.8(o) of the Mortgage Loan
Agreement together with an update of the Insolvency Opinion indicating that the
substitution does not affect the opinions set forth therein acceptable to REMIC
Trust;

 

(n) Borrower shall have caused Mortgage Borrower to have paid, unless Mortgage
Borrower contesting in accordance with terms of the Mortgage Loan Documents or
escrowed with Mortgage Lender, all Basic Carrying Costs relating to the
Substitute Individual Property, including without limitation, (i) accrued and
currently due and payable but unpaid insurance premiums relating to the
Substitute Individual Property, and (ii) currently due and payable Taxes
(including any in arrears) relating to the Substitute Individual Property and
(iii) currently due and payable maintenance charges and other impositions
relating to the Substitute Individual Property;

 

(o) Borrower shall have paid or reimbursed Lender for all reasonable costs and
expenses incurred by Lender (including, without limitation, reasonable attorneys
fees and disbursements) in connection with the substitution and Borrower shall
have caused Mortgage Borrower to have paid all recording charges, filing fees,
taxes or other expenses (including, without limitation, mortgage and intangibles
taxes and documentary stamp taxes) payable in connection with the substitution,
however, Borrower shall not be required to pay any fee to Lender or Servicer in
connection with a substitution;

 

(p) Lender shall have received annual operating statements and occupancy
statements for the Substitute Individual Property for the most current completed
fiscal year and a current operating statement for the Substituted Individual
Property, each certified to Lender as being true and correct in all material
respects a certificate from Borrower certifying that there has been no material
adverse change in the financial condition of the Substitute Individual Property
since the date of such operating statements;

 

(q) Borrower shall have delivered or caused Mortgage Borrower to have delivered
to Lender estoppel certificates from any existing tenants under Material Leases
at the Substitute Individual Property. All such estoppel certificates shall be
in form used in connection with the original closing of the Loan or otherwise in
form and substance reasonably acceptable to an ordinary prudent lender and shall
indicate that (i) the subject lease is a valid and binding obligation of the
tenant thereunder, (ii) to tenant’s knowledge, there are no defaults under such
lease on the part of the landlord or tenant thereunder, (iii) to tenant’s
knowledge, the tenant thereunder has no defense or offset to the payment of rent
under such leases, (iv) no rent under such lease has been paid more than one (1)
month in advance, (v) the tenant thereunder has no option under such lease to
purchase all or any portion of the Substitute Individual Property and

 

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(vi) all tenant improvement work required under such lease has been completed,
or, if an estoppel certificate indicates that all tenant improvement work
required under the subject lease has not yet been completed, or, if an estoppel
certificate indicates that all tenant improvement work required under the
subject lease has not yet been completed, Borrower shall, if required by the
Rating Agencies, deliver or cause Mortgage Borrower to deliver to Lender
financial statements or other reasonable evidence indicating that Mortgage
Borrower has adequate funds to pay all costs related to such tenant improvement
work to be paid to by Mortgage Borrower under such lease;

 

(r) Lender shall have received copies of all tenant leases affecting the
Substitute Individual Property certified by Borrower as being true and correct;

 

(s) Lender shall have received a Physical Conditions Report with respect to the
Substitute Individual Property stating that the Substitute Individual Property
and its use comply in all material respects with all applicable Legal
Requirements (including, without limitation, zoning, subdivision and building
laws) and that the Substitute Individual Property is in good condition and
repair and free of damage or waste. If compliance with any Legal Requirements
are not addressed by the Physical Conditions Report, such compliance shall be
confirmed by delivery to Lender of a certificate of an architect licensed in the
State in which the Substitute Individual Property is located, a letter from the
municipality in which such Property is located, a certificate of a surveyor that
is licensed in the State in which the Substitute Individual Property is located
(with respect to zoning and subdivision laws), an ALTA 3.1 zoning endorsement to
the Owner’s Title Insurance Policy delivered pursuant to subsection (j) above
(with respect to zoning laws) or a subdivision endorsement to the Owner’s Title
Insurance Policy delivered pursuant to subsection (j) above (with respect to
subdivision laws). If the Physical Conditions Report recommends that any repairs
be made with respect to the Substitute Individual Property, such Physical
Conditions Report shall include an estimate of the cost of such recommended
repairs and Borrower shall deposit with Lender (which deposit may be made in the
form of a Letter of Credit) an amount equal to one hundred twenty-five percent
(125%) of such estimated cost, which deposit shall constitute additional
security for the Loan and shall be disbursed to pay for the costs of such
recommended repairs in the manner provided herein for the disbursement of the
Required Repair Fund; provided, however, such deposit shall be waived to the
extent that Mortgage Borrower is required to make such deposit with Mortgage
Lender under the Mortgage Loan. Any remaining balance of such deposit (or Letter
of Credit) shall be released to Borrower upon the delivery to Lender of (i) an
update to such Physical Conditions Report or a letter from the engineer that
prepared such Physical Conditions Report indicating that the recommended repairs
were completed in good and workmanlike manner and (ii) paid receipts or other
reasonable evidence indicating that the costs of all such repairs have been
paid;

 

(t) In the event the Substituted Individual Property is subject to a Management
Agreement along with one or more additional Properties, Lender shall have
received a certified copy of an amendment to the applicable Management Agreement
reflecting the deletion of the Substituted Individual Property and the addition
of the Substitute Individual Property as a property operated pursuant thereto
and Manager shall have executed and delivered to Lender an amendment to the
applicable Subordination of Management Agreement reflecting such amendment to
the related Management Agreement. In the event that the Substituted Individual
Property is subject to a Management Agreement relating only to such a
Substituted

 

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Individual Property, Lender shall receive a certified copy of a new Management
Agreement for the Substitute Individual Property on substantially the same terms
as the Management Agreement for the Substituted Individual Property or on such
other terms as would be reasonably acceptable to an ordinary prudent lender with
respect to real estate collateral of similar size, scope and value as the
Substitute Individual Property and the Manager thereunder shall have executed
and delivered to Lender a Subordination of Management Agreement with respect to
such new Management Agreement on substantially the same terms as used in
connection with the Substituted Individual Property or on such other terms as
would be reasonably acceptable to an ordinary prudent lender with respect to
real estate collateral of similar size, scope and value as the Substitute
Individual Property;

 

(u) Lender shall have received a certified copy of an amendment to the
applicable Franchise Agreement reflecting the deletion of the Substituted
Individual Property and the addition of the Substitute Individual Property as a
property operated pursuant thereto and Franchisor shall have executed and
delivered to Lender an amendment to the applicable comfort letter reflecting
such amendment to the related Franchise Agreement. In the event that the
Substituted Individual Property is subject to a Franchise Agreement relating
only to such a Substituted Individual Property, Lender shall receive a certified
copy of a new Franchise Agreement for the Substitute Individual Property on
substantially the same terms as the Franchise Agreement for the Substituted
Individual Property or on such other terms as would be reasonably acceptable to
an ordinary prudent lender with respect to real estate collateral of similar
size, scope and value as the Substitute Individual Property and the Franchisor
thereunder shall have executed and delivered to Lender a comfort letter, if the
Franchisor is not an Affiliate of the Borrower, with respect to such new
Franchise Agreement on substantially the same terms as used in connection with
the Substituted Individual Property or on such other terms as would be
reasonably acceptable to an ordinary prudent lender with respect to real estate
collateral of similar size, scope and value as the Substitute Individual
Property;

 

(v) Lender shall have received evidence acceptable to a prudent lender that (i)
Mortgage Lender, Mezzanine B Lender and Mezzanine C Lender have each approved
the substitution and (ii) the Loan (or the portion thereof attributable to the
Substituted Individual Property, as applicable) has been assumed by an entity
reasonably acceptable to Lender, in each case as and to the extent required
under its respective loan documents;

 

(w) Lender shall have received such other and further approvals, opinions,
documents and information in connection with the substitution as reasonably
requested by Lender;

 

(x) Lender shall have received copies of all contracts and agreements relating
to the leasing and operation of the Substitute Individual Property (other than
the Management Agreement) together with a certification of Borrower attached to
each such contract or agreement certifying that the attached copy is a true and
correct copy of such contract or agreement and all amendments thereto;

 

(y) Borrower shall have delivered to Lender certified search results pertaining
to the entity assuming the Loan and each holder of a direct ownership interest
in such entity for state and federal tax liens, bankruptcy, judgment, litigation
and state and local UCC filings;

 

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(z) Borrower shall cause the entity assuming the Loan to execute, acknowledge
and/or deliver to Lender (i) a Pledge Agreement in the same form and substance
as the Pledge Agreement executed and delivered to Lender on the Closing Date,
with such modifications relating to the Individual Substitute Property and the
ownership structure thereof, (ii) such certificates and other documents required
under such Pledge Agreement, and (iii) UCC-1 Financing Statements so as to
create valid and enforceable Liens upon the Collateral of the requisite priority
in favor of Lender;

 

(aa) Borrower shall execute, acknowledge and/or deliver, or cause to be
executed, acknowledged and/or delivered, an Environmental Indemnity with respect
to the Substitute Individual Property and such other agreements, documents and
instruments as an ordinary prudent lender would require in connection therewith;

 

(bb) Borrower shall have caused Guarantor to acknowledge and confirm its
obligations under the Loan Documents to which it is a party;

 

(cc) Lender shall have received a UCC Title Insurance Policy issued by a title
company reasonably acceptable to Lender and dated as of the date of the
substitution, with reinsurance and direct access agreements acceptable to
Lender. Such UCC Title Insurance Policy shall (i) provide coverage in an amount
equal to the Release Amount of the released Collateral, (ii) insure Lender that
the Pledge Agreement and the documents executed and delivered in connection
therewith creates a valid lien on the Collateral of the requisite priority, free
and clear of all exceptions from coverage other than standard exceptions and
exclusions from coverage (as modified by the terms of any endorsements), (iii)
contain such available endorsements and affirmative coverages as Lender may
reasonably request, and (iv) name Lender as the insured. UCC Title Insurance
Policy shall be assignable to the extent permitted in the applicable
jurisdiction. Lender also shall have received evidence that all premiums in
respect of such UCC Title Insurance Policy have been paid; and

 

(dd) Borrower shall deliver an Officer’s Certificate certifying that the
requirements set forth in this Section 2.8 have been satisfied.

 

Upon the satisfaction of the foregoing conditions precedent, Lender will release
its Lien from the Collateral relating to the Substituted Individual Property and
the Collateral relating to the Substitute Individual Property shall constitute
Collateral for purposes of this Agreement and the other Loan Documents and the
Release Amount with respect to the released Collateral shall be deemed to be the
Release Amount with respect the Collateral accepted in connection with such
substitution for all purposes hereunder.

 

Section 2.9. Release of Out Parcels. Subject to the terms and conditions set
forth in this Section 2.9, at any time after the date hereof, Borrower may
permit Mortgage Borrower to transfer and obtain a release of an Out Parcel from
the Lien of the applicable Mortgage, provided that the following conditions
precedent have been satisfied:

 

(a) At the time Borrower or Mortgage Borrower requests the right to cause such
release and at the time such right to cause release is granted there is no
continuing Event of Default.

 

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(b) Lender shall have received at least thirty (30) days prior written notice
requesting the right to cause the release and identifying the Out Parcel.

 

(c) The intended use of such Out Parcel shall not have a material adverse effect
on the value, use, operation or occupancy of the applicable Individual Property.

 

(d) There shall be vehicular ingress and egress to the remainder of the
applicable Individual Property from public streets (or from appurtenant
easements) and pedestrian ingress and egress to improvements on the remainder of
the applicable Individual Property following such release.

 

(e) Upon the transfer and release of the Out Parcel and after the completion of
the standard approval process for tax lot-splits by the applicable municipal
authority exercising jurisdiction over the Out Parcel, no part of the remaining
applicable Individual Property shall be part of a tax lot which includes any
portion of the related Out Parcel.

 

(f) Each applicable municipal authority exercising jurisdiction over the Out
Parcel shall have approved, as part of its standard approval process, a
lot-split ordinance or other applicable action under local law dividing the Out
Parcel from the remainder of the applicable Individual Property and the required
procedures or processes necessary for the assignment of separate tax
identification numbers to each shall be initiated concurrently with the release
and transfer of the Out Parcel.

 

(g) All requirements under all Legal Requirements (including, without
limitation, all zoning and subdivision laws, setback requirements, sideline
requirements, parking ratio requirements, use requirements, building and fire
code requirements, environmental requirements and wetlands requirements)
applicable to the applicable Individual Property necessary to accomplish the lot
split shall have been fulfilled, and all necessary variances, if any, shall have
been obtained, and evidence thereof shall have been delivered to Lender which in
form and substance shall be appropriate for the jurisdiction in which the
applicable Individual Property is located.

 

(h) As a result of the lot split, the remaining applicable Individual Property
with all easements appurtenant and other Permitted Encumbrances thereto will not
be in violation of any then applicable Legal Requirements (including, without
limitation, all zoning and subdivision laws, setback requirements, sideline
requirements, parking ratio requirements, use requirements, building and fire
code requirements, environmental requirements and wetland requirements) and all
necessary variances, if any, shall have been obtained and evidence thereof shall
have been delivered to Lender which in form and substance shall be appropriate
for the jurisdiction in which the applicable Individual Property is located.

 

(i) Lender shall receive evidence that the single purpose nature and bankruptcy
remoteness of Borrower, Mortgage Borrower and their respective shareholders or
partners following such release have not been adversely affected and are in
accordance with the terms and provisions of the Loan Documents (which
requirement may include a “bring-down” of the Insolvency Opinion previously
delivered to Lender in connection with the origination of the Loan).

 

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(j) Appropriate reciprocal easement agreements for the benefit and burden of the
remaining applicable Individual Property and the Out Parcel regarding the use of
common facilities of such parcels, including, but not limited to, roadways,
parking areas, utilities and community facilities, in form and substance that
would be reasonably acceptable to an ordinary prudent lender with respect to
comparable property and which easements will not materially adversely affect the
value of the remaining applicable Individual Property, shall be declared and
recorded, and the remaining applicable Individual Property and the Out Parcel
shall be in compliance with all applicable covenants under all easements and
property agreements contained in the Permitted Encumbrances for the applicable
Individual Property.

 

(k) Intentionally omitted

 

(l) Lender shall have received surveys of the Out Parcel and of the remaining
applicable Individual Property satisfying the requirements set forth in Section
3.1.3(c) hereof.

 

(m) The transferee of such Out Parcel shall have assumed all of Mortgage
Borrower’s obligations, if any, relating only to the Out Parcel (other than the
Mortgage Loan Documents) arising from and after the release.

 

(n) Borrower shall reimburse Lender for any out-of-pocket costs and expenses it
reasonably incurs arising from the transfer of the Out Parcel and any release of
the Out Parcel from the Lien of the applicable Mortgage (including, without
limitation, reasonable attorneys’ fees and expenses); however, Borrower shall
not be required to pay any fee to Lender or Servicer in connection with the
transfer or release. Mortgage Borrower shall have paid all recording charges,
filing fees, taxes or other expenses payable in connection with the release.

 

(o) Borrower shall pay to Lender as a prepayment of the Loan an amount equal to
the sum of (i) one hundred twenty percent (120%) of the applicable release price
for the Out Parcel, if any, set forth on Schedule 1.1 hereto and (ii) the
Prepayment Spread Maintenance Payment, if any, due in connection therewith. Upon
such payment, the Release Amount for the applicable Individual Property shall be
reduced by an amount equal to the amount calculated under clause (i) above.

 

(p) Borrower shall cause Mortgage Borrower to submit to Mortgage Lender a
release of Lien (and related Mortgage Loan Documents) for the Out Parcel for
execution by Mortgage Lender. Such release shall be in a form appropriate for
the jurisdiction in which the applicable Individual Property is located and that
would be satisfactory to an ordinary prudent lender and that contains standard
provisions, if any, protecting the rights of the releasing lender (and in case
at Puerto Rico, will include notation of the release on the mortgage notes
secured by the mortgages on such Puerto Rico Properties).

 

(q) Borrower has delivered an Officer’s Certificate to the effect that, to such
officer’s knowledge, the conditions in subsections (a)-(p) hereof have occurred
or shall occur concurrently with the transfer and release of the Out Parcel.

 

(r) Borrower shall cause Mortgage Borrower to deliver an opinion of counsel
reasonably acceptable to the Rating Agencies, if the Mortgage Loan is part of a
Securitization, that the release of the Out Parcel does not constitute a
“significant modification” of the Mortgage

 

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Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a
“prohibited transaction” by any REMIC Trust.

 

(s) Borrower shall execute and shall cause Mortgage Borrower to execute such
documents and instruments and obtain such opinions of counsel as are typical for
similar transactions and as may be reasonable required by Lender and Mortgage
Lender and not inconsistent with the provisions hereof.

 

(t) Borrower shall have caused Mortgage Borrower to comply with all requirements
under Section 2.9 of the Mortgage Loan Agreement.

 

Section 2.10. Development at the Property Adjacent to the El Con Individual
Property. Lender hereby approves (i) the Mortgage Borrower’s execution and
delivery of the Tempus Documents substantially in the draft forms reviewed by
Lender and its counsel and attached hereto as Schedule 2.10 (it being understood
and agreed that the final forms of the Tempus Documents shall contain only such
changes from the draft forms necessary to further delineate the agreements by
the parties thereto and which are in substance reasonably satisfactory to an
ordinary prudent lender) and (ii) the various transactions to be consummated
thereunder. The Tempus Documents, in the draft forms reviewed by Lender and its
counsel, may not be amended, supplemented or otherwise modified in any material
respect or in any manner adverse to Lender or Mortgage Lender without the prior
written consent of Lender.

 

  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 the following conditions precedent no later than the Closing Date:

 

3.1.1 Representations and Warranties; Compliance with Conditions. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and no Default or an Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.

 

3.1.2 Loan Agreement and Note. Lender shall have received a copy of this
Agreement and the Note, in each case, duly executed and delivered on behalf of
Borrower.

 

3.1.3 Delivery of Loan Documents; Title Insurance; Reports; Leases.

 

(a) Pledge Agreement. Lender shall have received from Borrower fully executed
and acknowledged counterparts of the Pledge Agreement and delivery of the
required certificates and interests in accordance therewith, the UCC Financing
Statements, and such other documents required pursuant to the Pledge Agreement,
in the reasonable judgment of Lender, so as to effectively create valid and
enforceable Liens upon the Collateral, of the requisite priority, in favor of
Lender. Lender shall have also received from Borrower fully executed
counterparts of the other Loan Documents.

 

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(b) Title Insurance. Lender shall have received the UCC Title Insurance Policy
issued by a title insurance company acceptable to Lender and dated as of the
Closing Date, with reinsurance and direct access agreements reasonably
acceptable to Lender. Such UCC Title Insurance Policy shall (i) provide coverage
in amounts reasonably satisfactory to Lender, (ii) insure Lender that the Pledge
Agreement and the documents executed and delivered in connection therewith
creates a valid lien on the Collateral of the requisite priority, free and clear
of all exceptions from coverage other than standard exceptions and exclusions
from coverage (as modified by the terms of any endorsements), (iii) contain such
endorsements and affirmative coverages as Lender may reasonably request, and
(iv) name Lender as the insured. The UCC Title Insurance Policy shall be
assignable. Lender also shall have received evidence that all premiums in
respect of such UCC Title Insurance Policy have been paid.

 

(c) Survey. Lender shall have received a current Survey for each Individual
Property, certified to the title insurance company and Mortgage Lender and their
successors and assigns, in form and content reasonably satisfactory to Lender
and prepared by a professional and properly licensed land surveyor reasonably
satisfactory to Lender in accordance with the Accuracy Standards for ALTA/ACSM
Land Title Surveys as adopted by ALTA, American Congress on Surveying & Mapping
and National Society of Professional Surveyors in 1999. Each such Survey shall
reflect the same legal description contained in the Title Insurance Policies
relating to such Individual Property in all material respects (except in the
case of the El Con Individual Property and the El San Juan Individual Property
for which such descriptions shall be substantially the same to the extent
customary and usual in Puerto Rico) and shall include, among other things, a
metes and bounds description of the real property comprising part of such
Individual Property reasonably satisfactory to Lender (unless such real property
is legally described by reference to a recorded plat of subdivision). The
surveyor’s seal shall be affixed to each Survey and the surveyor shall provide a
certification for each Survey in form and substance acceptable to Lender.

 

(d) Insurance. Lender shall have received valid certificates of insurance for
the Policies required under the Mortgage Loan, satisfactory to Lender in its
reasonable discretion, and Lender and Mortgage Lender shall be included as an
“additional insured” under such liability policies and Lender shall have
received evidence of the payment of all Insurance Premiums payable for the
existing policy period.

 

(e) Environmental Reports. Lender shall have received a Phase I environmental
report (and, if recommended by the Phase I environmental report, a Phase II
environmental report) in respect of each Individual Property, in each case
reasonably satisfactory in form and substance to Lender.

 

(f) Mortgage Loan Documents. The Mortgage Loan Documents shall have been duly
authorized, executed and delivered by all parties thereto, the Mortgage Loan
shall have been contemporaneously funded and Lender shall have received and
approved certified copies thereof. All of the conditions precedent set forth in
Article 3 of the Mortgage Loan Agreement shall have been satisfied or waived and
the Mortgage Loan shall have closed and been fully advanced in accordance
therewith.

 

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(g) Encumbrances. Borrower shall have taken or caused to be taken such actions
in such a manner so that Lender has a valid and perfected first priority Lien as
of the Closing Date on the Collateral and with respect to the Pledge Agreement,
and Lender shall have received satisfactory evidence thereof.

 

3.1.4 Related Documents. Each additional document not specifically referenced
herein, but relating to the transactions contemplated herein, shall be in form
and substance reasonably satisfactory to Lender, and shall have been duly
authorized, executed and delivered by all parties thereto and Lender shall have
received and approved certified copies thereof, certified to the extent
reasonably required by Lender.

 

3.1.5 Delivery of Organizational Documents. Borrower shall deliver or cause to
be delivered to Lender copies certified by Borrower of all organizational
documentation related to Borrower, Baltimore Owner, Mortgage Borrower and
Mortgage Principal and/or the formation, structure, existence, good standing
and/or qualification to do business, as Lender may request in its reasonable
discretion, including, without limitation, amendments (as reasonably requested
by Lender), good standing certificates, qualifications to do business in the
appropriate jurisdictions, resolutions authorizing the entering into of the Loan
and Mortgage Loan, as applicable, and incumbency certificates as may be
requested by Lender.

 

3.1.6 Opinions of Borrower’s Counsel. Lender shall have received from Borrower’s
counsel (a) the Insolvency Opinion, (b) an opinion with respect to priority and
perfection of the Collateral and (c) an opinion as to the due execution,
authority, enforceability of the Loan Documents and such other matters as Lender
may reasonably require, all such opinions in form, scope and substance
satisfactory to Lender and Lender’s counsel in their reasonable discretion.

 

3.1.7 Budgets. Borrower shall have delivered, and Lender shall have approved,
the Annual Budget for the current Fiscal Year.

 

3.1.8 Basic Carrying Costs. Borrower shall have caused Mortgage Borrower and
Baltimore Owner to have paid all Basic Carrying Costs relating to the Properties
which are in arrears (other than those being contested in accordance with the
provisions of the Loan Documents), including without limitation, (a) accrued but
unpaid Insurance Premiums, (b) currently due Taxes (including any in arrears)
and (c) currently due Other Charges, which amounts shall be funded with proceeds
of the Mortgage Loan.

 

3.1.9 Completion of Proceedings. All organizational and other proceedings taken
or to be taken in connection with the transactions contemplated by this
Agreement and other Loan Documents and all documents incidental thereto shall be
reasonably satisfactory in form and substance to Lender, and Lender shall have
received all such counterpart originals or certified copies of such documents as
Lender may reasonably request.

 

3.1.10 Payments. All payments, deposits or escrows required to be made or
established by Borrower under this Agreement, the Note and the other Loan
Documents on or before the Closing Date shall have been paid.

 

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3.1.11 Tenant Estoppels. Lender shall have received an executed tenant estoppel
letter from the tenants under Material Leases identified by Lender to deliver an
estoppel certificate.

 

3.1.12 Transaction Costs. Borrower shall have paid or reimbursed Lender for all
UCC title insurance premiums, recording and filing fees, costs of environmental
reports, Physical Conditions Reports, appraisals and other reports, the
reasonable fees and costs of Lender’s outside counsel and all other third party
out-of-pocket expenses incurred in connection with the origination of the Loan
and closing of the Loan to the extent such costs and expenses relating to third
party costs have not already been paid or reimbursed by Mortgage Borrower to
Mortgage Lender.

 

3.1.13 Intentionally Omitted.

 

3.1.14 Leases and Rent Roll. Lender shall have received copies of all Leases and
the Ground Lease, which Leases and the Ground Lease shall be certified by
Borrower as being true and correct.

 

3.1.15 Intentionally Omitted.

 

3.1.16 Intentionally Omitted.

 

3.1.17 Physical Conditions Reports. Lender shall have received copies of
Physical Conditions Reports with respect to each Individual Property delivered
to Mortgage Lender.

 

3.1.18 Management Agreement. Lender shall have received a copy of the Management
Agreement with respect to each Individual Property which shall be satisfactory
in form and substance to Lender.

 

3.1.19 Appraisal. Lender shall have received a copy of the appraisal of each
Individual Property delivered in connection with the Mortgage Loan.

 

3.1.20 Financial Statements. Lender shall have received a balance sheet with
respect to each Individual Property for the two (2) most recent Fiscal Years and
statements of income and statements of cash flows with respect to each
Individual Property for the three (3) most recent Fiscal Years, each in form and
substance satisfactory to Lender.

 

3.1.21 Franchise Agreement. Lender shall have received a copy of the Franchise
Agreement with respect to each Individual Property, which shall be satisfactory
in form and substance to Lender.

 

3.1.22 Interest Rate Cap Agreement. Lender shall have received the Interest Rate
Cap Agreement, in form reasonably acceptable to Lender, from an Acceptable
Counterparty.

 

3.1.23 Further Documents. Lender or its counsel shall have received such other
and further approvals, opinions, documents and information as Lender or its
counsel may have

 

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reasonably requested including the Loan Documents in form and substance
satisfactory to Lender and its counsel.

 

  IV. REPRESENTATIONS AND WARRANTIES

 

Section 4.1. Borrower Representations. Each Individual Borrower represents and
warrants (as to itself in each instance where the representation or warranty
relates to Borrower or Individual Borrower and as to the Individual Property it
indirectly owns where the representation or warranty relates to the Properties
or Individual Property) as of the Closing Date that:

 

4.1.1 Organization. Borrower has been duly organized and is validly existing and
in good standing in the jurisdiction in which it is organized with requisite
power and authority to own its properties and to transact the businesses in
which it is now engaged. Borrower 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 properties, businesses and operations. Borrower possesses
all rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses in
which it is now engaged, and the sole business of Borrower is the ownership,
management and operation of Mortgage Borrower and Baltimore Owner. The ownership
interests of Borrower are as set forth on the organizational chart attached
hereto as Schedule 4.1.1.

 

4.1.2 Proceedings. Borrower has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party. This Agreement and such other Loan Documents
have been duly executed and delivered by or on behalf of Borrower and constitute
legal, valid and binding obligations of Borrower enforceable against Borrower 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 Borrower 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
Borrower pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, partnership agreement, management agreement or other agreement or
instrument to which Borrower is a party or by which any of Borrower’s property
or 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 Borrower or any of Borrower’s properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any such Governmental Authority required for the
execution, delivery and performance by Borrower of this Agreement or any other
Loan Documents has been obtained and is in full force and effect.

 

4.1.4 Litigation. Except as disclosed on Schedule 4.1.4 hereto, there are no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority or

 

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other agency now pending or, to Borrower’s knowledge, threatened against or
affecting Borrower, Mortgage Borrower, Baltimore Owner, Mortgage Principal, the
Collateral, Guarantor or any Individual Property, which actions, suits or
proceedings, if determined against Borrower, Mortgage Borrower, Baltimore Owner,
Mortgage Principal, the Collateral, Guarantor or any Individual Property, would
reasonably be expected to materially adversely affect the condition (financial
or otherwise) or business of Borrower, Mortgage Borrower, Baltimore Owner,
Mortgage Principal, the Collateral, Guarantor or the condition or ownership of
any Individual Property.

 

4.1.5 Agreements. Borrower is not a party to any agreement or instrument or
subject to any restriction which would reasonably be expected to materially and
adversely affect Borrower, Mortgage Borrower, Baltimore Owner, Mortgage
Principal, the Properties or the Collateral, or Borrower’s, Mortgage Borrower’s,
Baltimore Owner’s, Mortgage Principal’s business, properties or assets,
operations or condition, financial or otherwise. Except as disclosed in Schedule
4.1.5 hereto, neither Borrower nor Mortgage Borrower nor Baltimore Owner 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 Borrower, Mortgage Borrower,
Baltimore Owner, any of the Properties or any of the Collateral are bound which
would reasonably be expected to materially and adversely affect Borrower or any
Collateral. Neither Borrower nor Mortgage Borrower nor Baltimore Owner has any
material financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Borrower, Mortgage Borrower
or Baltimore Owner is a party or by which Borrower, Mortgage Borrower, Baltimore
Owner, any of the Properties or the Collateral is otherwise bound, other than
(a) obligations incurred in the ordinary course of the operation of the
ownership of the Collateral and the operation of Mortgage Borrower and Baltimore
Owner as permitted pursuant to clause (t) of the definition of “Special Purpose
Entity” set forth in Section 1.1 hereof, (b) obligations under or permitted
under the Loan Documents and the Mortgage Loan Documents, as applicable, and (c)
the Permitted Encumbrances.

 

4.1.6 Warranty of Title. Borrower is the record and beneficial owner of, and has
good title to, the Collateral, free and clear of all Liens whatsoever. The
Pledge Agreement, together with the UCC Financing Statements relating to the
Collateral when properly filed in the appropriate records, will create a valid,
perfected first priority security interests in and to the Collateral, all in
accordance with the terms thereof for which a Lien can be perfected by filing a
UCC Financing Statement. Borrower’s delivery of the certificates to Lender (so
long as Lender maintains possession thereof), as set forth in Section 3 of the
Pledge Agreement creates a first priority valid and perfected security interest
in the Collateral.

 

4.1.7 Solvency. Borrower has (a) not entered into the 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. The fair
saleable value of each Individual Borrower’s assets exceeds and will,
immediately following the making of the Loan, exceed such Individual Borrower
total liabilities, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities. The fair saleable value of each Individual
Borrower’s assets is and will, immediately following the making of the Loan, be
greater than such Individual Borrower’s

 

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probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Each Individual
Borrower’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. Borrower does not intend to, and does
not believe that it will, incur debt and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debt and
liabilities as they mature (taking into account the timing and amounts of cash
to be received by Borrower and the amounts to be payable on or in respect of
obligations of Borrower). No petition in bankruptcy has been filed against
Borrower, Mortgage Borrower, Baltimore Owner, Mortgage Principal or any
constituent Person, and neither Borrower, Mortgage Borrower, Baltimore Owner,
Mortgage Principal nor any constituent Person has ever made an assignment for
the benefit of creditors or taken advantage of any insolvency act for the
benefit of debtors. Neither Borrower, Mortgage Borrower, Baltimore Owner,
Mortgage Principal 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,
Mortgage Borrower’s, Baltimore Owner’s or Mortgage Principal’s assets or
properties, and neither Borrower, Mortgage Borrower, Baltimore Owner nor
Mortgage Principal has any knowledge of any Person contemplating the filing of
any such petition against it, any Mortgage Borrower, Baltimore Owner or such
constituent Persons.

 

4.1.8 Full and Accurate Disclosure. No statement of fact made by Borrower 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 Borrower which has not been disclosed to Lender which
materially adversely affects, nor as far as Borrower can foresee, would
reasonably be expected to materially adversely affect, Borrower, the Collateral,
Mortgage Borrower, Baltimore Owner, any Individual Property or the business,
operations or condition (financial or otherwise) of Mortgage Borrower, Baltimore
Owner or Borrower.

 

4.1.9 No Plan Assets. Borrower does not sponsor, is not obligated to contribute
to, and is not itself an “employee benefit plan,” as defined in Section 3(3) of
ERISA, subject to Title I of ERISA or Section 4975 of the Code, and none of the
assets of Borrower constitutes or will constitute “plan assets” of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a)
Borrower is not a “governmental plan” within the meaning of Section 3(32) of
ERISA and (b) transactions by or with Borrower 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 the provisions of Section 406 of
ERISA or Section 4975 of the Code and which prohibit or otherwise restrict the
transactions contemplated by this Agreement, including, but not limited to the
exercise by Lender of any of its rights under the Loan Documents.

 

4.1.10 Compliance. Except as disclosed in any physical condition reports, PZR
reports, Urban Concepts reports, environmental reports or Surveys received by
Lender, Borrower and the Properties (and the use thereof) comply in all material
respects with all applicable Legal Requirements, including, without limitation,
building and zoning ordinances and codes. Borrower is not in any material
respect in default or violation of any order, writ, injunction, decree or demand
of any Governmental Authority. There has not been committed by Borrower,

 

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Mortgage Borrower or Baltimore Owner or, to Borrower’s knowledge, 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 forfeiture as against any Individual Property or any part
thereof or any monies paid in performance of Borrower’s obligations under any of
the Loan Documents.

 

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 (i) are true, complete and
correct in all material respects, (ii) accurately represent the financial
condition of Borrower, Mortgage Borrower, Baltimore Owner, the Collateral and
the Properties as of the date of such reports in all material respects, and
(iii) 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,
Borrower does not have any contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments that are known to Borrower and reasonably
likely to have a materially adverse effect on any portion of the Collateral,
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, operation or business of Borrower, Mortgage Borrower or
Baltimore Owner from that set forth in said financial statements except as
disclosed in writing to Lender and acknowledged by Lender in writing.

 

4.1.12 Condemnation. Except as disclosed in Schedule 4.1.12 hereto or on any
Survey or Title Insurance Policy, no Condemnation or other proceeding has been
commenced or, to Borrower’s best 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 Intentionally Omitted.

 

4.1.15 Not a Foreign Person. Borrower is not a “foreign person” within the
meaning of §1445(f)(3) of the Code.

 

4.1.16 Intentionally Omitted.

 

4.1.17 Intentionally Omitted.

 

4.1.18 Enforceability. The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense by Borrower 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

 

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bankruptcy, insolvency and other laws generally affecting creditors’ rights and
the enforcement of debtors’ obligations), and Borrower and Guarantor have not
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. There are no prior assignments of the Collateral which
are presently outstanding except in accordance with the Loan Documents.

 

4.1.20 Insurance. Borrower has obtained and has delivered to Lender certified
copies (or other evidence reasonably acceptable to Lender) of all Policies
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. Except as disclosed on Schedule 4.1.20 hereto, no material
claims have been made or are currently pending, outstanding or otherwise remain
unsatisfied under any such Policy, and neither Borrower or to Borrower’s
knowledge, no other Person has done, by act or omission, anything which would
impair the coverage of any such Policy.

 

4.1.21 Intentionally Omitted.

 

4.1.22 Intentionally Omitted.

 

4.1.23 Intentionally Omitted.

 

4.1.24 Intentionally Omitted.

 

4.1.25 Intentionally Omitted.

 

4.1.26 Leases. The Properties are not subject to any Leases other than the
Leases described in Schedule 4.1.26 attached hereto and made a part hereof.
Mortgage Borrower is the owner and lessor of landlord’s interest in the 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 Leases.
Except as disclosed on Schedule 4.1.26, to Borrower’s knowledge, the current
Leases are in full force and effect and to Borrower’s knowledge there are no
material defaults thereunder by either party and to Borrower’s knowledge there
are no conditions that, with the passage of time or the giving of notice, or
both, would constitute material defaults thereunder. Except for security
deposits, no Rent has been paid more than one (1) month in advance of its due
date. Except as disclosed on Schedule 4.1.26, to Borrower’s knowledge, all work
to be performed by Mortgage Borrower or Baltimore Owner, as applicable, under
each Lease 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 or Baltimore Owner to any tenant has already been received by
such tenant. There is no prior sale, transfer or assignment, hypothecation or
pledge of any Lease or of the Rents received therein which is still in effect.
Except as disclosed on Schedule 4.1.26, to Borrower’s knowledge, no tenant
listed on Schedule 4.1.26 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

 

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premises are a part. Except as disclosed on Schedule 4.1.26, no tenant, to
Borrower’s knowledge, under any Lease has any right or option for additional
space in the Improvements. To Borrower’s knowledge, no hazardous wastes or toxic
substances, as defined by applicable federal, state or local statutes, rules and
regulations, have been disposed, stored or treated by any tenant under any Lease
on or about the leased premises nor does Borrower have any knowledge of any
tenant’s intention to use its leased premises for any activity which, directly
or indirectly, involves the use, generation, treatment, storage, disposal or
transportation of any petroleum product or any toxic or hazardous chemical,
material, substance or waste in violation of applicable law.

 

4.1.27 Intentionally Omitted.

 

4.1.28 Principal Place of Business; State of Organization. Borrower’s principal
place of business as of the date hereof is the address set forth in the
introductory paragraph of this Agreement. Baltimore Mortgage Borrower is
organized under the laws of the State of Texas, El San Juan Mortgage Borrower is
organized under the laws of the State of New York and each other Mortgage
Borrower is organized under the laws of the State of Delaware.

 

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 currently in effect in connection
with the transfer of the Collateral to Borrower have been paid. All 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
Pledge Agreement have been paid.

 

4.1.30 Special Purpose Entity/Separateness. (a) Until the Debt has been paid in
full, or with respect to an Individual Borrower, the earlier release of the
liens of the Pledge Agreement on all Collateral owned by such Individual
Borrower, each Individual Borrower hereby represents, warrants and covenants
that (i) it is, shall be and shall continue to be a Special Purpose Entity; and
(ii) each of Mortgage Borrower and Mortgage Principal is, shall be and shall
continue to be a Special Purpose Entity (as defined in the Mortgage Loan
Agreement).

 

(b) All of the facts and all of the assumptions made in the Insolvency Opinion
and in the Insolvency Opinion (as defined in the Mortgage Loan Agreement) given
to Mortgage Lender, including, but not limited to, any exhibits attached
thereto, are true and correct in all respects and all of the facts and all of
the assumptions made in any subsequent non-consolidation opinion required to be
delivered in connection with the Loan Documents (an “Additional Insolvency
Opinion”), including, but not limited to, any exhibits attached thereto, will
have been and shall be true and correct in all respects. Borrower has complied
with, and has caused Mortgage Borrower, Baltimore Owner and Mortgage Principal
to have complied with, all of the assumptions made with respect to Borrower,
Mortgage Borrower, Baltimore Owner and Mortgage Principal in the Insolvency
Opinion. Borrower will have complied with and Borrower will cause Mortgage
Borrower, Baltimore Owner and Mortgage Principal to comply with, all of the
assumptions made with respect to Borrower, Mortgage Borrower, Baltimore Owner
and Mortgage Principal in any Additional Insolvency Opinion. Each entity other
than Borrower,

 

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Mortgage Borrower, Baltimore Owner and Mortgage Principal with respect to which
an assumption shall be made in any Additional Insolvency Opinion will have
complied and will comply with all of the assumptions made with respect to it in
any Additional Insolvency Opinion.

 

4.1.31 Management Agreement. The Management Agreement with respect to each
Individual Property is in full force and effect and there is no material default
thereunder by any party thereto and no event has occurred that, with the passage
of time and/or the giving of notice would constitute a material default
thereunder.

 

4.1.32 Illegal Activity. No portion of the Properties or the Collateral has been
or will be purchased with proceeds of any illegal activity.

 

4.1.33 No Change in Facts or Circumstances; Disclosure. All information
submitted by or on behalf of Borrower to Lender and in all financial statements,
rent rolls, 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 Borrower in this Agreement or in any other Loan Document, are accurate,
complete and correct in all material respects. There has been no material
adverse change in any condition, fact, circumstance or event that would make any
such information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely affects or would reasonably
be expected to materially and adversely affect the use, operation or value of
the Properties or the business operations or the financial condition of
Borrower, Mortgage Borrower or Baltimore Owner. Borrower has disclosed to Lender
all material facts and has not failed to disclose any material fact that would
reasonably be expected to cause any Provided Information or representation or
warranty made herein to be materially misleading.

 

4.1.34 Investment Company Act. Borrower is not (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 1935, 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. 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, Mortgage Borrower, Mortgage
Principal, Baltimore Owner or Guarantor shall constitute property of, or are
beneficially owned, directly or indirectly, by any Person subject to trade
restrictions under U.S. law, including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder (each such Person, an “Embargoed Person”) with the result
that the investment in Borrower, Mortgage Borrower, Mortgage Principal,
Baltimore Owner or Guarantor, as applicable (whether directly or indirectly), is
or would be prohibited by law or the Loan made by the Lender is or would be in
violation of law; (b) no Embargoed Person shall have any interest of any nature
whatsoever in Borrower, Mortgage Borrower, Mortgage Principal,

 

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Baltimore Owner or Guarantor, as applicable, with the result that the investment
in Borrower, Mortgage Borrower, Mortgage Principal, Baltimore Owner or
Guarantor, as applicable (whether directly or indirectly), is or would be
prohibited by law or the Loan is or would be in violation of law; and (c) none
of the funds of Borrower, Mortgage Borrower, Mortgage Principal, Baltimore Owner
or Guarantor, as applicable, shall be derived from any unlawful activity with
the result that the investment in Borrower, Mortgage Borrower, Mortgage
Principal, Baltimore Owner or Guarantor, as applicable (whether directly or
indirectly), is or would be prohibited by law or the Loan is or would be in
violation of law.

 

4.1.36 Intentionally Omitted.

 

4.1.37 Inventory. Mortgage Borrower or Baltimore Owner is the owner (or lessee
pursuant to leases permitted hereunder) of all of the Equipment, Fixtures and
Personal Property (as such terms are defined in the Mortgages) located on or at
each Individual Property and shall not lease any Equipment, Fixtures or Personal
Property other than as permitted under the Mortgage Loan Documents. 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 they are
currently operated.

 

4.1.38 SPE Prior Act Representation. El Con Borrower hereby represents that it
is and has been a Special Purpose Entity from the date of its formation to the
present.

 

4.1.39 Franchise Agreement. The Franchise Agreement with respect to each
Individual Property is in full force and effect and there is no default
thereunder by any party thereto and no event has occurred that, with the passage
of time and/or giving of notice, would constitute a default thereunder.

 

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

 

(a) Recording; Modification. The Ground Lease has been duly recorded. The Ground
Lease permits the interest of El Con Mortgage Borrower to be encumbered by a
mortgage or the Ground Lessor has approved and consented to the encumbrance of
the applicable Individual Property by the related Mortgage. There have not been
amendments or modifications to the terms of the Ground Lease since recordation
of the Ground Lease, with the exception of written amendments or modifications,
copies of which have been delivered to Lender. The Ground Lease may not be
terminated, surrendered or amended without the prior written consent of Lender;
provided that Ground Lessor shall not be prevented from exercising its remedies
in accordance with the Ground Lease if the obligations of El Con Mortgage
Borrower under the Ground Lease are not performed as provided in the Ground
Lease.

 

(b) No Liens. Except for the Permitted Encumbrances and other encumbrances of
record, El Con 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.

 

(c) Ground Lease Assignable. El Con Mortgage Borrower’s interest in the Ground
Lease is assignable without the consent of the Ground Lessor to Mortgage Lender,
the

 

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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
related Mortgage or transfer of El Con Mortgage Borrower’s leasehold estate 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.

 

(d) Default. As of the date hereof, the Ground Lease is in full force and effect
and no default by Mortgage Borrower or, to Borrower’s knowledge Ground Lessor
has occurred and is continuing under the Ground Lease and there is no existing
condition which, but for the passage of time or the giving of notice, would
reasonably be expected to result in a default under the terms of the Ground
Lease by Mortgage Borrower or, to Borrower’s knowledge, by Ground Lessor.

 

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

 

(f) Cure. Mortgage 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 as set forth
in Paragraph Seventeen (iii) thereof.

 

(g) Term. The term of the Ground Lease expires on November 30, 2022.

 

(h) New Lease. 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.

 

(i) Insurance Proceeds. Under the terms of the Ground Lease and the Mortgage,
taken together, any related insurance and condemnation proceeds that are paid or
awarded with respect to the leasehold interest will be applied either to the
repair or restoration of all or part of the El Con Individual Property, with
Mortgage Lender having the right 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.

 

(j) Subleasing. The Ground Lease permits subleasing subject to the limitations
set forth in the Ground Lease.

 

4.1.41 WKA Ground Lease. Borrower hereby represents and warrants to Lender the
following with respect to the WKA Ground Lease: (i) the WKA Ground Lease permits
the interest of the respective Mortgage Borrower to be encumbered by a mortgage;
(ii) the WKA Ground Lease may not be terminated, surrendered or amended without
the prior written consent of Lender, which consent shall not be unreasonably
withheld, conditioned or delayed; provided that WKA Ground Lessor shall not be
prevented from exercising its remedies in accordance with the WKA Ground Lease
if the obligations of Mortgage Borrower under the WKA Ground Lease are not
performed as provided in the WKA Ground Lease subject, however, to the rights of
Lender (x) to cure any default that is curable by Lender, and (y) to receive a
new lease on substantially the same terms as the WKA Ground Lease in the case of
a default that is

 

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not susceptible of cure by Lender; and (iii) as of the date hereof, the WKA
Ground Lease is in full force and effect and no default has occurred under the
WKA Ground Lease and there is no existing condition which, but for the passage
of time or the giving of notice, could result in a default under the terms of
the WKA Ground Lease.

 

4.1.42 Submerged Land Lease. Borrower hereby represents and warrants to Lender
the following with respect to the Submerged Land Lease relating to the Reach
Individual Property: (i) Borrower has heretofore provided Lender with a true and
correct copy of the Submerged Land Lease; (ii) there have not been amendments or
modifications to the terms of the Submerged Land Lease other than pursuant to
written instruments, copies of which have been previously provided to Lender;
(iii) except for the Permitted Encumbrances and other encumbrances of record,
Mortgage Borrower’s interest in the Submerged Land Lease is not subject to any
Liens or encumbrances superior to, or of equal priority with, the Mortgage; (iv)
Mortgage Borrower’s interest in the Submerged Land Lease, as a result of a
comfort letter delivered to Mortgage Lender by the lessor under the Submerged
Land Lease, is assignable without the consent of the lessor thereunder to
Mortgage Lender in the event Mortgage Lender acquires title to the riparian
upland property adjacent to the submerged land described in the Submerged Land
Lease and Mortgage Lender assumes the duties and responsibilities of Mortgage
Borrower under the Submerged Land Lease; and (v) as of the date hereof, the
Submerged Land Lease is in full force and effect and no default by Mortgage
Borrower, or to the best knowledge of Borrower, any other party thereto has
occurred under the Submerged Land Lease and there is no existing condition
which, but for the passage of time or the giving of notice, could result in a
default under the terms of the Submerged Land Lease.

 

4.1.43 Concession Agreements. Borrower hereby represents and warrants to Lender
the following with respect to each of the Concession Agreements: (i) Borrower
has heretofore provided Lender with a true and correct copy of the Concession
Agreement; (ii) there have not been amendments or modifications to the terms of
the Concession Agreements other than pursuant to written instruments, copies of
which have been previously provided to Lender; (iii) Mortgage Borrower’s
interests in the Concession Agreements are not subject to any Liens or
encumbrances superior to, or of equal priority with, the Mortgage; and (iv) as
of the date hereof, each of the Concession Agreements is in full force and
effect and no default by Mortgage Borrower, or to the best knowledge of
Borrower, any other party thereto has occurred under either of the Concession
Agreements and there is no existing condition which, but for the passage of time
or the giving of notice, could result in a default under the terms of either the
Concession Agreements.

 

4.1.44 Parking Lease. Borrower hereby represents and warrants to Lender the
following with respect to the Parking Lease: (i) Borrower has heretofore
provided Lender with a true and correct copy of the Parking Lease; (ii) the
Parking Lease permits the interest of Mortgage Borrower to be encumbered by a
mortgage (provided that the mortgage is at all times subject and subordinate to
the Parking Lease); (iii) there have not been amendments or modifications to the
terms of the Parking Lease other than pursuant to written instruments, copies of
which have been previously provided to Lender; (iv) except for the Permitted
Encumbrances and other encumbrances of record, Mortgage Borrower’s interest in
the Parking Lease is not subject to any Liens or encumbrances superior to, or of
equal priority with, the Mortgage; (v) Mortgage Borrower’s interest in the
Parking Lease for Land Lot 78 is assignable

 

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upon a sale, lease or transfer of the Atlanta Individual Property without the
consent of the Parking Lessor to Lender; and (vi) as of the date hereof, the
Parking Lease is in full force and effect and no default by Mortgage Borrower,
or to the best knowledge of Borrower, any other party thereto has occurred under
the Parking Lease and there is no existing condition which, but for the passage
of time or the giving of notice, could result in a default under the terms of
the Parking Lease.

 

4.1.45 Ferryboat Charters. (a) Borrower hereby represents and warrants the
following with respect to each of the Ferryboat Charters: (i) Borrower has
heretofore provided Lender with a true and correct copy of the Ferryboat
Charters; (ii) there have not been amendments or modifications to the terms of
the Ferryboat Charters other than pursuant to written instruments, copies of
which have been previously provided to Lender; (iii) Mortgage Borrower’s
interests in the Ferryboat Charters are not subject to any Liens or encumbrances
superior to, or of equal priority with, the Ship Mortgages; and (iv) as of the
date hereof, each of the Ferryboat Charters is in full force and effect and no
default by Mortgage Borrower or Ferryboat Affiliate has occurred under either of
the Ferryboat Charters and there is no existing condition which, but for the
passage of time or the giving of notice, could result in a default under the
terms of any of the Ferryboat Charters.

 

(b) Borrower hereby represents and warrants that El Con Mortgage Borrower and
Ferryboat Affiliate own their respective ferryboats encumbered by the Ship
Mortgages, free and clear of all Liens whatsoever except the Liens created by
the Loan Documents and all Liens of record for which the underlying indebtedness
or obligations secured by such Liens have been paid or discharged and with
respect to which Borrower shall cause El Con Mortgage Borrower to use
commercially reasonable efforts to discharge.

 

4.1.46 Mortgage Loan Representations. All of the representations and warranties
contained in the Mortgage Loan Documents are hereby incorporated into this
Agreement and deemed made hereunder as and when made thereunder and shall remain
incorporated (except with respect to any Individual Mortgage Borrower,
Individual Borrower or Individual Property as to which the Lien of the
applicable Mortgage or the Pledge Agreement, as applicable, has been released)
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, defeased or otherwise terminated, unless otherwise consented to in
writing by Lender.

 

Section 4.2. Survival of Representations. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 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 Borrower. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents by Borrower
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.

 

  V. BORROWER COVENANTS

 

Section 5.1. Affirmative Covenants. From the date hereof and until payment and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier

 

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release of the Liens encumbering the Collateral (and all related obligations) in
accordance with the terms of this Agreement and the other Loan Documents (or
with respect to any Individual Borrower, the earlier release of the Lien
encumbering the Collateral owned by such Individual Borrower), Borrower hereby
covenants and agrees with Lender that:

 

5.1.1 Existence; Compliance with Legal Requirements. Borrower shall do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its existence, and its material rights, licenses, permits and franchises
and/or cause Mortgage Borrower and Baltimore Owner to comply in all material
respects with all Legal Requirements applicable to Borrower, Mortgage Borrower
and Baltimore Owner and the Properties, including, without limitation,
Prescribed Laws. There shall never be committed by Borrower and Borrower shall
not permit any other Person and Borrower shall not permit Mortgage Borrower or
Baltimore Owner to allow or cause Mortgage Borrower or Baltimore Owner to permit
any other Person in occupancy of or involved with the operation or use of the
Properties, and Borrower shall not permit Mortgage Borrower or Baltimore Owner
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 Borrower’s
obligations under any of the Loan Documents. Borrower hereby covenants and
agrees not to permit or allow or cause Mortgage Borrower or Baltimore Owner to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times cause Mortgage Borrower and Baltimore
Owner to maintain, preserve and protect all material franchises and trade names
and preserve all the material remainder of its property used or useful in the
conduct of its business and shall keep or cause Mortgage Borrower and Baltimore
Owner to keep the Properties in good working order and repair in all material
respects, 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 Mortgages. Borrower shall keep or cause
Mortgage Borrower and Baltimore Owner 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 the Mortgage Loan Agreement. Borrower shall cause each Individual
Property that is the subject of an O&M Agreement to be operated in accordance
with the terms and provisions thereof in all material respects. After prior
notice to Lender, Borrower, at its own expense, may contest or cause Mortgage
Borrower or Baltimore Owner 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 or
any Individual Property or any alleged violation of any Legal Requirement,
provided that (a) no Event of Default has occurred and remains uncured; (b)
Mortgage Borrower or Baltimore Owner is permitted to do so under the provisions
of any mortgage or deed of trust superior in lien to the applicable Mortgage;
(c) such proceeding shall be permitted under and be conducted in accordance with
the provisions of any material instrument to which Borrower, Mortgage Borrower
or Baltimore Owner is subject and shall not constitute a default thereunder and
such proceeding shall be conducted in accordance with all applicable statutes,
laws and ordinances; (d) neither the applicable Individual Property nor the
Collateral nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (e) Mortgage Borrower and/or
Baltimore Owner, as applicable, shall promptly upon final determination thereof
comply with any such Legal Requirement determined to be valid or applicable or
cure any violation of any Legal Requirement; (f) such proceeding shall suspend
the enforcement of the contested Legal

 

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Requirement against Borrower, Baltimore Owner, Mortgage Borrower, the Collateral
and the applicable Individual Property; and (g) Borrower shall cause Mortgage
Borrower or Baltimore Owner to furnish such security as may be required in the
proceeding, or as may be reasonably 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 the applicable Individual Property or 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. Subject to Borrower’s right to contest the same
in accordance with the terms of this Section 5.1.2, Borrower shall pay, or shall
cause Mortgage Borrower or Baltimore Owner 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, Borrower’s
obligation to cause Mortgage Borrower and Baltimore Owner to directly pay Taxes
and Other Charges shall be suspended for so long as Mortgage Borrower and
Baltimore Owner comply with the terms and provisions of Section 7.2 of the
Mortgage Loan Agreement. Borrower will deliver or cause to be delivered to
Lender receipts for payment or other evidence reasonably 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. Borrower shall furnish, or
cause to be furnished, to Lender receipts for the payment of the Taxes and the
Other Charges prior to the date the same shall become delinquent provided,
however, Borrower is not required to furnish such receipts for payment of Taxes
in the event that such Taxes have been paid by Lender pursuant to Section 7.2
hereof or Mortgage Lender pursuant to Section 7.2 of the Mortgage Loan
Agreement. Except for Permitted Encumbrances, Borrower shall not suffer and
shall not permit Mortgage Borrower or Baltimore Owner to suffer and shall
promptly cause to be paid and discharged any Lien or charge whatsoever which may
be or become a Lien or charge against the Properties, and shall promptly pay for
or cause to be paid all utility services provided to the Properties. After prior
notice to Lender, Borrower, at its own or Mortgage Borrower’s or Baltimore
Owner’s expense, may contest or cause Mortgage Borrower or Baltimore Owner 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 (a) no Event of
Default has occurred and remains uncured; (b) Mortgage Borrower and Baltimore
Owner is permitted to do so under the provisions of any mortgage or deed of
trust superior in lien to the applicable Mortgage; (c) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower, Mortgage Borrower and Baltimore Owner are subject
and shall not constitute a default thereunder and such proceeding shall be
conducted in accordance with all applicable statutes, laws and ordinances; (d)
neither the Collateral nor any part thereof or interest therein nor any
Individual Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, cancelled or lost; (e) Borrower shall or
shall cause Mortgage Borrower or Baltimore Owner to, promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (f) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the applicable Individual Property or the
Collateral; and (g) Borrower shall or shall cause Mortgage Borrower or Baltimore
Owner to furnish such

 

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security as may be required in the proceeding, or as may be requested by Lender,
to insure the payment of any such Taxes or Other Charges, together with all
interest and penalties thereon; provided, however, such deposit shall be waived
to the extent that Mortgage Borrower is required to make such deposit with
Mortgage Lender under the Mortgage Loan. 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 reasonable judgment of Lender, the entitlement of such
claimant is finally 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.

 

5.1.3 Litigation. Borrower shall give prompt notice to Lender after obtaining
knowledge of any litigation or governmental proceedings pending or threatened
against Borrower, Mortgage Borrower, the Collateral or the Properties which
might materially adversely affect Borrower’s or Mortgage Borrower’s condition
(financial or otherwise) or business or any Individual Property or the
Collateral.

 

5.1.4 Access to Properties. Borrower shall permit and shall cause Mortgage
Borrower and Baltimore Owner to permit agents, representatives and employees of
Lender to inspect the Properties or any part thereof at reasonable hours upon
reasonable advance notice, subject to the rights of tenants, licensees,
concessionaires, patrons or guests.

 

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

 

5.1.6 Cooperate in Legal Proceedings. Borrower shall cooperate reasonably 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. Borrower shall 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, Borrower.

 

5.1.8 Award and Insurance Benefits. Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Awards or Insurance Proceeds or other
Net Liquidation Proceeds After Debt Service to which Lender is entitled under
the Loan Documents and which is lawfully or equitably payable in connection with
any Individual Property, and Lender shall be reimbursed for any reasonable
out-of-pocket expenses incurred in connection therewith (including reasonable
attorneys’ fees and disbursements) out of such Insurance Proceeds, Award or
other Net Liquidation Proceeds After Debt Service.

 

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5.1.9 Further Assurances. Borrower shall, at Borrower’s sole cost and expense:

 

(a) 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 Borrower
pursuant to the terms of the Loan Documents or which are reasonably requested by
Lender in connection therewith;

 

(b) 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 Borrower under the Loan Documents, as
Lender may reasonably require, including, without limitation, subject to the
rights of the Mortgage Lender, the execution and delivery of all such writings
necessary to transfer any liquor licenses with respect to any Individual
Property into the name of Lender or its designee after the occurrence and during
the continuance of an Event of Default; and

 

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

 

5.1.10 Mortgage Taxes Paid. Borrower represents that Mortgage Borrower and
Baltimore Owner have paid all state, county and municipal recording and all
other taxes imposed upon the execution and recordation of the Mortgages.

 

5.1.11 Financial Reporting. (a) Borrower will keep and maintain and will cause
Mortgage Borrower and Baltimore Owner to keep and maintain, on a Fiscal Year
basis, in accordance with the Uniform System of Accounts and reconciled in
accordance with GAAP (or such other accounting basis acceptable to Lender),
proper and accurate books, records and accounts reflecting all of the financial
affairs of Mortgage Borrower and Baltimore Owner and all items of income and
expense with respect to the Collateral and in connection with Mortgage
Borrower’s and Baltimore Owner’s operation on an individual basis of the
Properties. Lender shall have the right from time to time at all times during
normal business hours upon reasonable notice to examine such books, records and
accounts at the office of Borrower, Mortgage 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 and during the continuance
of an Event of Default, Borrower shall pay any reasonable out-of-pocket costs
and expenses incurred by Lender to examine Borrower’s accounting records with
respect to the Collateral and Properties, as Lender shall determine to be
necessary or appropriate in the protection of Lender’s interest.

 

(b) Borrower will furnish, and cause to be furnished to Lender annually, within
one hundred twenty (120) days following the end of each Fiscal Year of Borrower,
a complete copy of Borrower’s annual financial statements audited by a “Big
Four” accounting firm or other independent certified public accountant
reasonably acceptable to Lender in

 

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accordance with the Uniform System of Accounts and reconciled in accordance with
GAAP (or such other accounting basis acceptable to Lender) covering the
Properties on a combined basis for such Fiscal Year and containing statements of
profit and loss for Borrower and the Properties and a balance sheet for
Borrower, Mortgage Borrower and Baltimore Owner. 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 Cash Flow, Net Operating Income, Gross Income from Operations and
Operating Expenses. Such statements shall also been accompanied by a
certification from each Individual Borrower setting forth the results of its
applicable Individual Property. Borrower’s annual financial statements shall be
accompanied by (i) an unaudited comparison of the budgeted income and expenses
and the actual income and expenses for the prior Fiscal Year certified by
Borrower, (ii) an unqualified opinion of a “Big Four” accounting firm or other
independent certified public accountant reasonably acceptable to Lender, (iii) a
list of tenants, if any, under Material Leases, (iv) a schedule audited by such
independent certified public accountant reconciling Net Operating Income to Net
Cash Flow (the “Net Cash Flow Schedule”), which shall itemize all adjustments
made to Net Operating Income to arrive at Net Cash Flow deemed material by such
independent certified public accountant, and (v) an Officer’s Certificate
certifying that each annual financial statement presents fairly the financial
condition and the results of operations of Borrower and the Properties being
reported upon in all material respects and that such financial statements have
been prepared in accordance with the Uniform System of Accounts and reconciled
in accordance with GAAP and as of the date thereof, to Borrower’s knowledge,
whether in any material respect there exists an event or circumstance which
constitutes a Default or Event of Default under the Loan Documents executed and
delivered by, or applicable to, Borrower, and if such Default or Event of
Default exists, the nature thereof, the period of time it has existed and the
action then being taken to remedy the same.

 

(c) Borrower will furnish, or cause to be furnished, to Lender on or before
thirty (30) days after the end of each calendar month the following items with
respect to the Collateral and the Properties on an Individual Property basis,
accompanied by an Officer’s Certificate stating that, to Borrower’s knowledge,
such items are true, correct, accurate, and complete in all material respects
and fairly present in all material respects the financial condition and results
of the operations of Mortgage Borrower and the Properties on an Individual
Property basis (subject to normal year-end adjustments) as applicable: (i) an
occupancy report for the subject month, including an average daily rate in a
separate schedule; (ii) monthly and year-to-date unaudited operating statements
(including Capital Expenditures) on a separate schedule prepared for each
calendar month, noting Net Operating Income, Gross Income from Operations, and
Operating Expenses (not including any contributions to the Replacement Reserve
Fund), and, upon Lender’s reasonable request, other information necessary and
sufficient to fairly represent the financial position and results of operation
of the Properties during such calendar month, and containing a comparison of
budgeted income and expenses and the actual income and expenses together with a
detailed explanation of any variances of five percent (5%) (and at least
$50,000) or more between budgeted and actual amounts for such periods, all in
form satisfactory to Lender; (iii) a calculation reflecting the annual Debt
Service Coverage Ratio for the immediately preceding twelve (12) month period as
of the last day of such month; and (iv) a Net Cash Flow Schedule. In addition,
such Officer’s Certificate shall also state, to Borrower’s knowledge, that the
representations and warranties of Borrower set forth in Section 4.1.30 are true
and correct in all material respects as of the date of such certificate and

 

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that there are no trade payables outstanding for more than sixty (60) days or
such longer period of time as permitted under clause (t) in the definition of
the term “Special Purpose Entity” or under any other provision of this
Agreement, or shall set forth any deviations from such statement that may exist.
On or before thirty (30) days after the end of each calendar month, Borrower
also will furnish, or cause to be furnished, to Lender the most current Smith
Travel Research Reports in the form of Schedule 5.1.11 hereto then available to
Borrower reflecting market penetration and relevant hotel properties competing
with each Individual Property.

 

(d) For the partial year period commencing on the date hereof Borrower has
submitted, and for each Fiscal Year thereafter, Borrower shall 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 Lender. The Annual
Budget shall be subject to Lender’s reasonable approval (each such Annual
Budget, an “Approved Annual Budget”). 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. If
Lender does not approve or object to Borrower’s proposed Annual Budget within
such fifteen (15) day period, Borrower shall re-submit such proposed Annual
Budget to Lender (with appropriate notification on such resubmission that
failure to respond will constitute approval) and if Lender again fails to
approve or object to such re-submitted proposed Annual Budget after an
additional fifteen (15) day period, such proposed Annual Budget shall be deemed
approved by 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. If Lender does not approve
or object to any revised Annual Budget within such ten (10) day period, Borrower
shall resubmit such proposed revised Annual Budget to Lender (with appropriate
notification on such resubmission), and if Lender again fails to approve or
object to such resubmitted revised Annual Budget after an additional ten (10)
day period, such revised proposed Annual Budget shall be deemed approved by
Lender. Until such time that Lender approves or is deemed to have approved a
proposed Annual Budget, the most recently Approved Annual Budget shall apply;
provided that such Approved Annual Budget shall be adjusted to reflect (x)
matters in the proposed Annual Budget approved by Lender and (y) as to matters
in the proposed Annual Budget not yet approved by Lender (“Disapproved Budget
Category”) (i) increases for expenses actually incurred which vary in relation
to gross revenues (“Variable Expenses”) in an amount equal to the percentage
increase of actual fiscal year-to-date gross revenues over estimated fiscal
year-to-date gross revenues for the period in question set forth in the most
recent Approved Annual Budget (“Gross Revenues Percentage Increase”) through the
date of the actual expenditure and (ii) expenses actually incurred which are
beyond the reasonable control of Borrower such as Taxes, Insurance Premiums and
costs of Utilities (“Uncontrollable Expenses”). Notwithstanding anything in any
of the Loan Documents to the contrary, expenditures shall be deemed in
compliance with and made pursuant to the Approved Annual Budget even though such
expenditures exceed the amount budgeted therefore in the Approved Annual Budget
if such expenditures are (i) Uncontrollable Expenses and (ii) Variable Expenses
which exceed the amounts budgeted therefore by not more than the Gross Revenues
Percentage Increase. Lender acknowledges that

 

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the Annual Budget for Fiscal Year 2005 is satisfactory to Lender for purposes of
this Section 5.1.11(d).

 

(e) In the event that Borrower must incur an extraordinary Operating Expense or
Capital Expenditure 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. Lender shall respond to Borrower’s request for approval of an
Extraordinary Expense not later than and in the manner provided for in
subparagraph (d) above; and if Lender fails to do so, the Extraordinary Expense
shall be deemed approved.

 

(f) If requested by Lender, Borrower shall provide Lender, promptly upon
request, with the following financial statements if, at the time a Disclosure
Document is being prepared for a Securitization, it is expected that the
principal amount of the Loan together with any Affiliated Loans at the time of
Securitization may, or if the principal amount of the Loan together with any
Affiliated Loans at any time during which the Loan and any Affiliated Loans are
included in a Securitization does, equal or exceed twenty percent (20%) of the
aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in such Securitization:

 

(g) Any reports, statements or other information required to be delivered under
this Agreement shall be delivered (i) in paper form, (ii) on a diskette, and
(iii) if requested by Lender and within the capabilities of Borrower’s data
systems without change or modification thereto, in electronic form and prepared
using a Microsoft Word for Windows, Microsoft Excel or WordPerfect for Windows
files (which files may be prepared using a spreadsheet program and saved as word
processing files). Provided Lender is complying with applicable laws, Borrower
agrees that Lender may disclose information regarding the Collateral, the
Properties, Borrower, Mortgage Borrower, Baltimore Owner and Mortgage Principal
that is provided to Lender pursuant to this Section 5.1.11(g) in connection with
the Securitization to such parties requesting such information in connection
with such Securitization.

 

5.1.12 Business and Operations. Borrower shall and shall cause Mortgage Borrower
and Baltimore Owner 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. Borrower shall and
shall cause Mortgage Borrower and Baltimore Owner to qualify to do business and
will remain in good standing under the laws of each jurisdiction as and to the
extent the same are required for the ownership of the Collateral or maintenance,
management and operation of the Properties. Borrower shall cause Mortgage
Borrower and Baltimore Owner to, at all times during the term of the Loan to
continue to own (or lease as permitted under the Mortgage Loan Agreement) all of
the Equipment, Fixtures and Personal Property (as such terms are defined in the
Mortgages) which are necessary to operate the Properties in the manner required
hereunder and in the manner in which it is currently operated, as modified by
any changes in operations permitted hereunder. At the request of Lender,
Borrower shall and shall cause Mortgage Borrower and Baltimore Owner to execute
a certificate in form reasonably satisfactory to Lender listing the trade names
under which Borrower intends to operate each Individual Property, and
representing and warranting that Borrower does business under no other trade
name with respect to such Individual Property.

 

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5.1.13 Title to the Properties. Borrower shall and shall cause Mortgage Borrower
and Baltimore Owner to warrant and defend (a) the title to each Individual
Property and every part thereof, subject only to Liens permitted hereunder and
under the Mortgage Loan Agreement (including Permitted Encumbrances) and (b) the
validity and priority of the Liens of the Mortgages and the Assignments of
Leases and the Liens of the Pledge Agreement, 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 court costs)
incurred by Lender if an interest in the Collateral, other than as permitted
hereunder, is claimed by another Person.

 

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 the bankruptcy, insolvency, rehabilitation or
other similar proceeding in respect of Borrower, Mortgage Borrower, Mortgage
Principal, Baltimore Owner or any constituent Persons of any of the foregoing or
an assignment by Borrower, Mortgage Borrower, Mortgage Principal, Baltimore
Owner or any constituent Persons of any of the foregoing for the benefit of its
creditors, Borrower, its successors or assigns, shall be chargeable with and
agrees to pay all reasonable costs of collection and defense, including
reasonable attorneys’ fees and costs, incurred by Lender or Borrower 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 written request by Lender, but not more
than twice in any calendar year (unless requested in connection with a
Securitization), Borrower shall within fifteen (15) days furnish Lender with a
statement, duly acknowledged and certified (1) with respect to the Loan, setting
forth (A) the original principal amount of the Note, (B) the unpaid principal
amount of the Note, (C) the Applicable Interest Rate of the Note, (D) the date
installments of interest and/or principal were last paid, (E) any then known
offsets or defenses to the payment of the Debt or the payment of the other
obligations under the Loan Documents, if any, and (F) 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 and (2) with respect to the Mortgage Loan,
setting forth (A) the original principal amount of the Mortgage Note, (B) the
unpaid principal amount of the Mortgage Note, (C) the interest rate of the
Mortgage Note, (D) the date installments of interest and/or principal were last
paid, (E) any offsets or defenses to the payment of the debt evidenced by the
Mortgage Note, if any, and (F) that the Mortgage Note, the Mortgage Loan
Agreement, the Mortgages and the other Mortgage Loan Documents are valid, legal
and binding obligations and have not been modified or if modified, giving
particulars of such modification.

 

(b) Borrower shall use commercially reasonable efforts to cause Mortgage
Borrower and Baltimore Owner to deliver to Lender upon request, tenant estoppel
certificates from each commercial tenant leasing space at the Properties under a
Material Lease in form and substance reasonably satisfactory to Lender provided
that Borrower shall not be required to deliver such certificates more frequently
than two (2) times in any calendar year.

 

(c) After written request by Borrower, but not more than twice in any calendar
year, Lender shall within fifteen (15) days furnish Borrower and its designees
with a

 

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statement setting forth (i) the original principal amount of the Loan, (ii) the
unpaid principal amount of the Loan, (iii) the Applicable Interest Rate of the
Loan, (iv) the date installments of interest and/or principal were last paid,
and (v) to the knowledge of Lender, no Default or Event of Default exists.

 

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 Borrower. (a) Borrower 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, Borrower, 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, Borrower without the prior consent of Lender.

 

(b) Borrower shall cause Mortgage Borrower and Baltimore Owner, in a timely
manner, to observe, perform and fulfill each and every covenant, term and
provision of each Mortgage Loan Document executed and delivered by, or
applicable to, Mortgage Borrower and Baltimore Owner, and shall not cause or
permit Mortgage Borrower, and Baltimore Owner 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,
Mortgage Borrower and Baltimore Owner without the prior written consent of
Lender which consent shall not be unreasonably withheld, conditioned or delayed.

 

5.1.18 Confirmation of Representations. Borrower shall deliver, in connection
with any Securitization, (a) one (1) or more Officer’s Certificates certifying
to the knowledge of Borrower, as to the accuracy of all representations made by
Borrower in the Loan Documents as of the date of the closing of such
Securitization in all relevant jurisdictions (or if any such representations are
no longer accurate, providing an explanation as to the reason for such
inaccuracy), 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 Securitization to the extent such
certificates are issued in such jurisdictions; provided that, with respect to
Guarantor, such certificates shall be provided for the state of organization and
each state or commonwealth in which an Individual Property is situated.

 

5.1.19 No Joint Assessment. Borrower shall not cause or permit Mortgage Borrower
or Baltimore Owner to 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 the Individual Property.

 

5.1.20 Leasing Matters. Borrower shall have the right, without the consent of
Lender, to cause Mortgage Borrower or Baltimore Owner enter into any Lease
(other than a Material Lease). Upon request, Borrower shall furnish Lender with
executed copies of all Leases. All proposed Material Leases shall be on
commercially reasonable terms and shall not

 

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contain any terms which would materially affect Lender’s rights under the Loan
Documents or Mortgage Lender’s rights under the Mortgage Loan Documents. All
Leases executed after the date hereof shall provide that they are subordinate to
the Mortgage encumbering the applicable Individual Property and that the lessee
agrees to attorn to Mortgage Lender or any purchaser at a sale by foreclosure or
power of sale. Borrower shall cause Mortgage Borrower and Baltimore Owner to (a)
observe and perform the obligations imposed upon the lessor under the Material
Leases in a commercially reasonable manner; (b) have the right, without the
consent of Lender, to amend, modify, or waive the provisions of any Lease (other
than a Material Lease except to the extent required pursuant to the terms of an
existing Material Lease) or terminate, reduce rents under, accept the surrender
of space under, or shorten the term of, any Lease (other than a Material Lease)
or of any guaranty, letter of credit or other credit support with respect
thereto, so long as such action does not have a material adverse affect on the
value of the applicable Individual Property taken as a whole, provided, however,
that a termination of a Lease (other than a Material Lease with a tenant who is
in default beyond applicable notice and cure periods shall not be considered an
action which has a material adverse affect on the value of the Individual
Property taken as a whole and Lender is provided with a copy thereof; (c)
enforce the terms, covenants and conditions contained in the Material Leases
upon the part of the lessee thereunder to be observed or performed in a
commercially reasonable manner and in a manner not to impair the value of the
Individual Property involved; (d) not collect any of the rents more than one (1)
month in advance (other than security deposits); (e) not execute any other
assignment of lessor’s interest in the Leases or the Rents (except as
contemplated by the Mortgage Loan Documents); (f) not alter, modify or change
the terms of the Leases in a manner inconsistent with the provisions of the
Mortgage Loan Documents; and (g) execute and deliver at the request of Lender
all such further assurances, confirmations and assignments in connection with
the Leases as Lender shall from time to time reasonably require. Lender shall
not unreasonably withhold, condition or delay its consent with respect to the
entering into, renewal, extension, amendment, modification, waiver of provisions
of, termination, reduction of rents under, acceptance of a surrender of space or
the shortening of the term of any Material Lease. Notwithstanding anything to
the contrary contained herein, neither Mortgage Borrower nor Baltimore Owner
shall enter into a lease of all or substantially all of any Individual Property
without Lender’s prior consent, which consent may be withheld or conditioned in
Lender’s sole discretion. To the extent Lender’s prior written approval is
required pursuant to this Section 5.1.20, Lender shall have fifteen (15) days
from receipt of written request and any and all reasonably required information
and documentation relating thereto in which to approve or disapprove such
request and such written request shall state thereon in bold letters of 14 point
font or larger that action is required by Lender and Lender’s consent will be
deemed given if there is no response by Lender. If Lender fails to approve or
disapprove the request within such fifteen (15) days, Lender’s approval shall be
deemed given. Should Lender fail to approve any such request, Lender shall give
Borrower written notice setting forth in reasonable detail the basis for such
disapproval. Lender shall not unreasonably withhold, condition or delay approval
of the execution of any subordination and non-disturbance or similar recognition
agreement requested by any tenant under a lease provided (i) Lender has approved
such lease, which approval shall not be unreasonably withheld, conditioned or
delayed, and (ii) such agreement is in form, scope and substance reasonably
acceptable to Lender.

 

5.1.21 Alterations. Borrower shall not, and shall not permit Mortgage Borrower
or Baltimore Owner to make any alteration of any Improvement without obtaining
Lender’s prior

 

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consent to such alterations, which consent shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the foregoing, Lender’s consent shall
not be required in connection with any alterations that will not have a material
adverse effect on any Borrower’s or Mortgage Borrower’s or Baltimore Owner’s
financial condition, the value of the applicable Individual Property or the Net
Operating Income, provided that such alterations with respect to the applicable
Individual Property (a) are made in connection with tenant improvement work
performed pursuant to the terms of any Lease executed on or before the date
hereof or any Lease executed after the date hereof in accordance with the terms
of this Agreement, (b) related solely to furniture, fixtures and equipment, (c)
have been provided for in the Approved Annual Budget, (d) do not adversely
affect any structural component of any Improvements on the applicable Individual
Property, any utility or HVAC system contained in any Improvements or the
exterior of any building constituting a part of any Improvements and the
aggregate cost thereof does not exceed the lesser of One Million and 00/100
Dollars ($1,000,000) or three percent (3%) of the Release Amount (as defined in
the Mortgage Loan Agreement) attributed to such Individual Property or (e) are
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 this Agreement. To the extent Lender’s prior written approval is
required pursuant to this Section 5.1.21, Lender shall have thirty (30) days
from receipt of written request and any and all reasonably required information
and documentation relating thereto in which to approve or disapprove such
request and such written request shall state thereon in bold letters of 14 point
font or larger that action is required by Lender and Lender’s consent will be
deemed given if there is no response by Lender. If Lender fails to approve or
disapprove the request within such thirty (30) days, Lender’s approval shall be
deemed given. Should Lender fail to approve any such request, Lender shall give
Borrower written notice setting forth in reasonable detail the basis for such
disapproval. If the total unpaid amounts due and payable with respect to
alterations to the Improvements at any Individual Property (other than such
amounts to be paid or reimbursed by tenants under the Leases or from the Reserve
Funds established and maintained pursuant to the Mortgage Loan Documents or the
Loan Documents) shall at any time exceed the lesser of One Million and 00/100
Dollars ($1,000,000) or three percent (3%) of the Release Amount (as defined in
the Mortgage Loan Agreement) attributed to such Individual Property (the
“Alteration Threshold Amount”), Borrower shall promptly deliver to Lender as
security for the payment of such amounts and as additional security for
Borrower’s obligations under the Loan Documents any of the following: (A) cash
or a Letter of Credit, (B) U.S. Obligations, (C) other securities having a
rating acceptable to Lender and that the Rating Agencies have confirmed in
writing will not, in and of itself, result in a downgrade, withdrawal or
qualification of the initial, or, if higher, then current ratings assigned to
any Securities or any class thereof in connection with any Securitization, or
(D) a completion and payment bond issued by a financial institution having a
rating by S&P of not less than “A-1+” if the term of such bond 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 reasonably acceptable to Lender
and that, if required by Lender, the Rating Agencies have confirmed in writing
will not, in and of itself, result in a downgrade, withdrawal or qualification
of the initial, or, if higher, then current ratings assigned to any Securities
or any class thereof in connection with any Securitization. Such security shall
be, and shall be adjusted from time to time to 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 or the Reserve Funds
established

 

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and maintained pursuant to the Mortgage Loan Documents or the Loan Documents)
over the Alteration Threshold Amount and Lender may apply such security from
time to time at the option of Lender to pay for such alterations.
Notwithstanding the foregoing to the contrary, Borrower shall be relieved of its
obligation to deposit such security, provided that (1) Mortgage Borrower is
required to and does deposit such security under the Mortgage Loan and (2)
Lender receives evidence reasonably acceptable to Lender of the deposit of such
security with Mortgage Lender.

 

5.1.22 Operation of Property. (a) Borrower shall cause Mortgage Borrower and
Baltimore Owner to operate the Properties, in all material respects, in
accordance with the Management Agreements (or Replacement Management Agreements,
as applicable). In the event that any Management Agreement expires or is
terminated (without limiting any obligation of Borrower to obtain Lender’s
consent to any termination or modification of any Management Agreement in
accordance with the terms and provisions of this Agreement), the applicable
Individual Borrower shall promptly cause Mortgage Borrower and Baltimore Owner
to enter into a Replacement Management Agreement with Manager or Qualified
Manager, as applicable. In the event that any Franchise Agreement expires or is
terminated (without limiting any obligation of Borrower to obtain Lender’s
consent to any termination or modification of any Franchise Agreement in
accordance with the terms and provisions of this Agreement), Borrower shall
cause Mortgage Borrower and Baltimore Owner to promptly enter into a Replacement
Franchise Agreement with Franchisor or Qualified Franchisor, as applicable.

 

(b) Borrower shall cause Mortgage Borrower and Baltimore Owner 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
Agreements and the Franchise Agreements and do all things necessary to preserve
and to keep unimpaired its material rights thereunder; (ii) promptly notify
Lender of any material default under any Management Agreement or Franchise
Agreement of which it is aware; (iii) promptly deliver to Lender a copy of each
financial statement, business plan, capital expenditures plan, notice, report
and estimate received by it under any Management Agreement; and (iv) cause
Mortgage Borrower and Baltimore Owner to enforce the performance and observance
in all material respects of the covenants and agreements required to be
performed and/or observed by Manager under each Management Agreement, in a
commercially reasonable manner.

 

(c) Borrower shall cause Mortgage Borrower and Baltimore Owner to expend for
Capital Expenditures (including the Capital Expenditures identified in Section
5.1.22(d) below, but exclusive of any Capital Expenditures financed with the
proceeds of any (1) Net Proceeds (2) Required Repair Fund or (3) Replacement
Reserve Fund except as provided in the next sentence) not less than, with
respect to all Properties in the aggregate, the Minimum Aggregate Cap Ex Amount
on or prior to the Initial Maturity Date, subject to receipt of any required
lender approvals and Unavoidable Delays. Any amounts financed with the proceeds
of Replacement Reserve Fund shall be credited against the Minimum Aggregate Cap
Ex Amount to be expended in accordance with this Section 5.1.22(c), provided
that such credit shall be limited to an amount not to exceed two percent (2%) of
the Gross Income from Operations for the period from the Closing Date through
and including the Initial Maturity Date Borrower shall cause Mortgage Borrower
and Baltimore Owner to exercise reasonable diligence to obtain such required
lender approvals in a timely manner. In the event that Mortgage Borrower and

 

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Baltimore Owner have not expended such amount by the Initial Maturity Date, then
Borrower shall cause Mortgage Borrower and Baltimore Owner to deposit with
Mortgage Lender, prior to or contemporaneously with the extension of the term of
the Mortgage Loan pursuant to Section 2.7 of the Mortgage Loan Agreement, cash
or cash equivalents (including a Letter of Credit) in an amount equal to the
amount of such deficiency. Provided that Borrower causes Mortgage Borrower and
Baltimore Owner to make such deposit (but subject to Section 5.1.22(d)),
Borrower shall be deemed not to be in default of this Section 5.1.22(c). The
amount so deposited (or the proceeds of such Letter of Credit) shall constitute
a Reserve Fund under the Mortgage Loan Agreement and, in connection with a
Capital Expenditure (other than a Capital Expenditure financed with the proceeds
of any Net Proceeds or Required Repair Funds) during the applicable Extension
Option, Borrower and Lender understand that such amount shall be released to
Mortgage Borrower and Baltimore Owner in accordance with and subject to the same
terms and conditions applicable to disbursements from the Replacement Reserve
Account set forth in Section 7.3.2 of the Mortgage Loan Agreement.
Notwithstanding anything to the contrary contained in the foregoing provisions
of this Section 5.1.22(c), in the event of a release of an Individual Property
in accordance with Section 2.5.1 of the Mortgage Loan Agreement, (i) the Minimum
Aggregate Cap Ex Amount shall be reduced by an amount equal to the product of
(A) the Minimum Aggregate Cap Ex Amount immediately prior to such release and
(B) a ratio determined by dividing the Release Amount (as defined in the
Mortgage Loan Agreement) of such Individual Property by the aggregate Release
Amount of all Properties (including such Individual Property) and (ii) the
aggregate amount expended by Mortgage Borrower and Baltimore Owner on Capital
Expenditures relating to the Properties shall be calculated for purposes of this
Section 5.1.22(c) without regard to any amounts expended by Mortgage Borrower
and Baltimore Owner on Capital Expenditures relating to such released Individual
Property.

 

(d) Borrower shall cause Mortgage Borrower to expend, subject to Unavoidable
Delays, (i) $650,000 for elevator repairs at the Baltimore Individual Property
within twelve (12) months of the date hereof, (ii) $2,500,000 to replace back-up
generators at the El Con Individual Property within eighteen (18) months of the
date hereof and (iii) $1,200,000 to replace back-up generators at the El San
Juan Individual Property within eighteen (18) months of the date hereof.

 

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

 

(b) If El Con Mortgage Borrower shall be in default in any material respect
under the Ground Lease, then, subject to the terms of the Ground Lease, El Con
Borrower shall cause El Con Mortgage Borrower to grant Lender the right (but not
the obligation), to cause such default or defaults under the Ground Lease to be
remedied and otherwise exercise any and all rights of El Con Mortgage Borrower
under the Ground Lease, as may be necessary to prevent or cure any such default
provided such actions are necessary to protect Lender’s interest under the Loan
Documents, and Lender shall have the right to enter all or any portion of the
applicable

 

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Individual 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 El Con Mortgage
Borrower under the Ground Lease shall not remove or waive, as between El Con
Borrower and Lender, the default that occurred under this Agreement by virtue of
the default by El Con Mortgage Borrower under the Ground Lease. However, it will
not be a default by El Con Borrower if there are sufficient funds in the Ground
Lease Reserve to pay rent under the Ground Lease and such funds are not promptly
paid to the lessor under the Ground Lease. All sums expended by Lender to cure
any such default shall be paid by El Con 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 related
Mortgage.

 

(d) El Con Borrower shall cause El Con Mortgage Borrower to notify Lender
promptly in writing after obtaining knowledge thereof of the occurrence of any
material default by the lessor under the Ground Lease or the occurrence of any
event that, with the passage of time or service of notice, or both, would
constitute a material default by the lessor under the Ground Lease, and the
receipt by El Con Mortgage Borrower of any notice (written or otherwise) from
the lessor under the Ground Lease noting or claiming the occurrence of any
default by El Con Mortgage Borrower under the 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 El Con Mortgage Borrower under the Ground Lease. El Con
Borrower shall promptly deliver to Lender a copy of any such written notice of
default.

 

(e) Within ten (10) days after receipt of written demand by Lender, but not more
than once in any calendar year, El Con Borrower shall cause El Con Mortgage
Borrower to use reasonable efforts to obtain from the lessor under the Ground
Lease and furnish to Lender the estoppel certificate of such lessor stating the
date through which rent has been paid and whether or not to the knowledge of
such lessor there are any defaults thereunder and specifying the nature of such
claimed defaults, if any.

 

(f) El Con Borrower shall cause El Con Mortgage Borrower to promptly execute,
acknowledge and deliver to Lender such instruments as may reasonably be required
to permit Lender, subject to the terms of the Ground Lease, to cure any default
under the 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 Mortgage Lender under the Mortgage Loan Documents with respect to
the leasehold estate under the Ground Lease. Upon the occurrence and during the
continuance of an Event of Default, El Con Borrower irrevocably appoints Lender
as its true and lawful attorney-in-fact to do, in its name or otherwise, any and
all acts and to execute any and all documents that are necessary to preserve any
rights of El Con Mortgage Borrower under or with respect to the Ground Lease,
including, without limitation, the right to effectuate any extension or renewal
of the Ground Lease, or to preserve any rights of El Con El Con Mortgage
Borrower whatsoever in respect of any part of the Ground Lease (and the above
powers granted to Lender are coupled with an interest and shall be irrevocable
until the Loan is paid in full).

 

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

 

(i) The lien of the related Mortgage attaches to all of El Con Mortgage
Borrower’s rights and remedies at any time arising under or pursuant to
Subsection 365(h) of the Bankruptcy Code, including, without limitation, all of
El Con Mortgage Borrower’s rights, as debtor, to remain in possession of the
applicable Individual Property.

 

(ii) El Con Borrower shall not permit El Con Mortgage Borrower, 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) As security for the Debt, El Con Borrower shall cause El Con Mortgage
Borrower to unconditionally assign, transfer and set over to Mortgage Lender all
of El Con Mortgage Borrower’s claims and rights to the payment of damages
arising from any rejection by the lessor under the Ground Lease under the
Bankruptcy Code. Lender and El Con Borrower shall cause El Con Mortgage Borrower
to proceed jointly or in the name of El Con 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. Any amounts received by
Mortgage Lender or El Con Mortgage Borrower shall be applied as set forth in the
Mortgage Loan Agreement.

 

(iv) If, pursuant to subsection 365(h) of the Bankruptcy Code, El Con Borrower
or El Con Mortgage Borrower seek to offset, against the rent reserved in the
Ground Lease, the amount of any damages caused by the nonperformance by the
lessor of any of its obligations thereunder after the rejection by lessor of the
Ground Lease under the Bankruptcy Code, then El Con Borrower or El Con Mortgage
Borrower shall not 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
El Con Borrower or El Con Mortgage Borrower in accordance with the first
sentence of this subsection, El Con Borrower or El Con Mortgage Borrower may
proceed to offset the amounts set forth in El Con Borrower’s or El Con Mortgage
Borrower’s notice.

 

(v) If any action, proceeding, motion or notice shall be commenced or filed in
respect of any lessor of all or any part of the applicable Individual Property
subject to the Ground Lease in connection with any case under the Bankruptcy
Code, Lender, El Con Borrower and/or El Con Mortgage Borrower shall
cooperatively conduct and control any such litigation with counsel agreed upon
between El Con Borrower, or El Con Mortgage Borrower and Lender in connection
with such litigation. El Con Borrower shall cause El Con Mortgage Borrower, upon
demand, to pay to Lender all out-of-pocket costs and expenses (including
reasonable attorneys’ fees and costs) actually paid or actually incurred by
Lender in connection with the cooperative prosecution or conduct of any

 

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such proceedings. All such costs and expenses shall be secured by the lien of
the related Mortgage.

 

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

 

5.1.24 WKA 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 the WKA Ground Lease (including, but not
limited to, the payment of all rent, additional rent, percentage rent and other
charges required to be paid under the WKA Ground Lease).

 

(b) Subject to the rights of Mortgage Lender under the Mortgage Loan Documents,
if Mortgage Borrower shall be in default in any material respect under the WKA
Ground Lease, then, subject to the terms of the WKA Ground Lease, Borrower shall
cause Mortgage Borrower (subject to the terms of the Mortgage Loan Documents) to
grant to Lender the right (but not the obligation), to cause the default or
defaults under the WKA Ground Lease to be remedied and otherwise exercise any
and all rights of Mortgage Borrower under the WKA Ground Lease, as may be
necessary to prevent or cure any default provided such actions are necessary to
protect Lender’s interest under the Loan Documents, and Lender shall have the
right to enter all or any portion of the WKA Ground Lease Property at such times
and in such manner as Lender deems necessary, to prevent or to cure any such
default. 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 Default Rate
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.

 

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

 

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(d) Borrower shall cause Mortgage Borrower (subject to the terms of the Mortgage
Loan Documents) to promptly execute, acknowledge and deliver to Lender such
instruments as may reasonably be required to permit Lender to cure any default
under the WKA 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 the WKA
Ground Lease Property. Upon the occurrence and during the continuation of an
Event of Default, Borrower shall cause Mortgage Borrower (subject to the terms
of the Mortgage Loan Documents) to irrevocably appoint Lender as its true and
lawful attorney-in-fact to do, in its name or otherwise, 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 the WKA Ground Lease, including,
without limitation, the right to effectuate any extension or renewal of the WKA
Ground Lease, or to preserve any rights of Mortgage Borrower whatsoever in
respect of any part of the WKA Ground Lease (and the above powers granted to
Lender are coupled with an interest and shall be irrevocable).

 

(e) In the event that the WKA Ground Lease is terminated, Borrower shall cause
Mortgage Borrower to promptly provide for replacement employee parking and a
water cistern, to the extent necessary, for the operation of the hotel and the
related facilities on the El Con Individual Property, the location and
construction of which shall be subject to Lender’s reasonable approval and
consent.

 

5.1.25 Principal Place of Business, State of Organization. Borrower will not
cause or permit any change to be made in its or Mortgage Borrower’s or Baltimore
Owner’s name, identity (including trade name or names), place of organization or
formation (as set forth in Section 4.1.1 hereof) or Borrower’s or Mortgage
Borrower’s or Baltimore Owner’s corporate, partnership or other structure unless
Borrower 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,
the Pledge Agreement and the other Loan Documents and, in the case of a change
in Borrower’s structure, without first obtaining the prior consent of Lender.
Upon Lender’s request, Borrower shall execute and deliver additional financing
statements, 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.
Borrower’s principal place of business and chief executive office, and the place
where Borrower keeps its books and records, including recorded data of any kind
or nature, regardless of the medium 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 Borrower) and will continue
to be the address of Borrower set forth at the introductory paragraph of this
Agreement (unless Borrower notifies Lender in writing at least thirty (30) days
prior to the date of such change). Borrower shall promptly notify Lender of any
change in its organizational identification number. If Borrower does not now
have an organizational identification number and later obtains one, Borrower
promptly shall notify Lender of such organizational identification number. At
the request of Lender, Borrower shall execute a certificate in form reasonably
satisfactory to Lender listing the trade names under which Mortgage Borrower
intends to operate each Individual Property, and representing and warranting
that Mortgage Borrower does business under no other trade name with respect to
such Property, provided, that Mortgage Borrower may cause an Individual

 

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Property to be operated under a different trade name, at any time, so long as
such trade name is permitted under the Franchise Agreement.

 

5.1.26 Notices. Borrower shall give notice, or cause notice to be given to
Lender, promptly upon the occurrence of (or, with respect to applicable matters
pertaining to Guarantor, upon obtaining knowledge of):

 

(a) any Default or Mortgage Loan Default;

 

(b) any default or event of default under any Contractual Obligation of
Borrower, Mortgage Borrower, Baltimore Owner, Mortgage Principal or Guarantor
that would reasonably be expected to have a material adverse effect on Borrower,
the ability of Borrower to perform under the Loan Documents or the rights and
remedies of Lender under the Loan Documents; and

 

(c) a change in the business, operations or financial condition of Borrower,
Mortgage Borrower, Baltimore Owner or Mortgage Principal which could reasonably
be expected to have a material adverse effect on Borrower, the ability of
Borrower to perform under the Loan Documents or the rights and remedies of
Lender under the Loan Documents.

 

5.1.27 Special Distributions. On each date on which amounts are required to be
disbursed to Lender pursuant to the terms of the Cash Management Agreement or
are required to be paid to Lender under any of the Loan Documents, if permitted
by Legal Requirements Borrower shall exercise its rights under the Mortgage
Borrower’s and/or Baltimore Owner’s organizational documents to cause Mortgage
Borrower and/or Baltimore Owner to make to Borrower a distribution from funds
available to them for such purpose in an aggregate amount such that Lender shall
receive the amount required to be disbursed or otherwise paid to Lender on such
date.

 

5.1.28 Curing. Lender shall have the right, but shall not have the obligation,
to exercise Borrower’s rights under the Mortgage Borrower’s and/or Baltimore
Owner’s organizational documents (a) to cure a Mortgage Loan Default and (b) to
satisfy any Liens, claims or judgments against the Properties (except for Liens
permitted by the Mortgage Loan Documents), in the case of either (a) or (b),
unless Borrower, Mortgage Borrower or Baltimore Owner shall be diligently
pursuing remedies to cure such Mortgage Loan Default or to contest or satisfy
such Liens, claims or judgments in accordance with the Mortgage Loan Agreement.
Borrower shall reimburse Lender on demand for any and all out-of-pocket costs
actually incurred by Lender in connection with curing any such Mortgage Loan
Default or satisfying any Liens, claims or judgments against any Individual
Property.

 

5.1.29 Mortgage Borrower Covenants. Borrower shall cause Mortgage Borrower and
Baltimore Owner to comply with all obligations with which Mortgage Borrower and
Baltimore Owner 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) regardless of whether the related Mortgage Loan Document has been
repaid or otherwise terminated, unless otherwise consented to in writing by
Lender.

 

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5.1.30 Submerged Land Leases. Borrower covenants and agrees with Lender with
respect to the Submerged Land Leases as follows:

 

(a) Borrower shall not, without Lender’s prior written consent, cause or permit
Mortgage Borrower to materially amend, modify or supplement, or consent to or
suffer the material amendment, modification or supplementation of the Submerged
Land Leases;

 

(b) Borrower shall pay or cause Mortgage Borrower to pay all charges and other
sums to be paid by Mortgage Borrower pursuant to the terms of the Submerged Land
Leases, if any, as the same shall become due and payable and prior to the
expiration of any applicable grace period therein provided;

 

(c) Borrower shall comply, or cause Mortgage Borrower to comply in all material
respects, with all of the terms, covenants and conditions on Mortgage Borrower’s
part to be complied with pursuant to terms of the Submerged Land Leases;

 

(d) Borrower shall not, without the prior written consent of Lender, which
consent shall not be unreasonably withheld, conditioned or delayed, cause or
permit Mortgage Borrower to terminate or surrender, the Submerged Land Leases;

 

(e) Borrower shall promptly furnish to Lender any notice of default or other
communication delivered in connection with the Submerged Land Leases by any
party to the Submerged Land Leases other than routine correspondence and
invoices;

 

(f) Borrower shall not permit Mortgage Borrower to assign (other than to
Mortgage Lender) or encumber its rights under the Submerged Land Leases;

 

5.1.31 Concession Agreements. Borrower shall cause Mortgage Borrower to (a)
cause the parking areas to be operated pursuant to the related Concession
Agreements; (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 Concession Agreements and do all things necessary
to preserve and to keep unimpaired its material rights thereunder; (c) promptly
notify Lender of any default under any Concession Agreements upon becoming aware
of the same; (d) to the extent reasonably requested by Lender, promptly deliver
to Lender a copy of each financial statement, business plan, capital
expenditures plan, notice, report and estimate received by Mortgage Borrower
under the Concession Agreements; and (e) promptly enforce to the extent
commercially reasonable the performance and observance of all of the covenants
and agreements required to be performed and/or observed by the Operator under
the Concession Agreements.

 

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

 

(b) If Mortgage Borrower shall be in default in any material respect under the
Parking Lease, then, subject to the terms of the Parking Lease and the rights of
Mortgage Lender

 

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under the Mortgage Loan Documents, Borrower shall cause Mortgage Borrower to
grant Lender the right (but not the obligation), to cause the default or
defaults under the Parking Lease to be remedied and otherwise exercise any and
all rights of Borrower under the Parking Lease, as may be necessary to prevent
or cure any default provided such actions are necessary to protect Mortgage
Lender’s interest under the Mortgage Loan Documents, and Lender shall have the
right to enter all or any portion of the Parking Lease Property at such times
and in such manner as Lender deems necessary, to prevent or to cure any such
default. All sums expended by Lender to cure any such default shall be paid by
Mortgage 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 Mortgage.

 

(c) Promptly upon becoming aware thereof, Borrower shall notify Lender in
writing of the occurrence of any material default by the lessor under the
Parking Lease or the occurrence of any event that, with the passage of time or
service of notice, or both, would constitute a material default by the lessor
under the Parking Lease, and the receipt by Mortgage Borrower of any notice
(written or otherwise) from the lessor under the Parking Lease noting or
claiming the occurrence of any default by Mortgage Borrower under the Parking
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 the
Parking Lease. Borrower shall promptly deliver to Lender a copy of any such
written notice of default.

 

(d) Subject to Mortgage Lender’s rights under the Mortgage Loan Agreement,
Borrower shall promptly execute, acknowledge and deliver to Lender such
instruments as may reasonably be required to permit Lender to cure any default
under the Parking 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 Mortgage Lender under the Mortgage Loan Documents with respect to
the Parking Lease. Upon the occurrence and during the continuation of a Mortgage
Event of Default and an Event of Default hereunder, Borrower irrevocably
appoints Lender as its true and lawful attorney-in-fact to do, in its name or
otherwise, 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
the Parking Lease, including, without limitation, the right to effectuate any
extension or renewal of the Parking Lease, or to preserve any rights of Mortgage
Borrower whatsoever in respect of any part of the Parking Lease (and the above
powers granted to Lender are coupled with an interest and shall be irrevocable).

 

5.1.33 Tax Exemption Decrees. Borrower shall cause El Con Borrower, at its sole
cost and expense, to (a) timely submit all required documentation with the
applicable governmental and/or taxing authority having jurisdiction over the El
Con Individual Property, and perform all acts necessary in connection therewith,
in order to effectuate an extension of that certain Tax Exemption Decree
currently in effect and issued in connection with the El Con Individual Property
(the “El Con Tax Decree”); (b) timely submit an application for such extension
and submit reasonably satisfactory evidence thereof to Lender and promptly upon
receipt of said extension, deliver to Lender reasonably satisfactory evidence of
such extension and (c) subject to Unavoidable Delays, timely comply and perform
in all material respects with all terms and conditions or requirements under the
El Con Tax Decree currently in effect or as extended or renewed, as applicable
and provide and deliver to Lender reasonably satisfactory

 

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evidence of such compliance. Borrower shall cause El San Juan Borrower, at its
sole cost and expense, to (i) timely submit all required documentation with the
applicable governmental and/or taxing authority having jurisdiction over the El
San Juan Individual Property, and perform all acts necessary in connection
therewith, in order to effectuate the continuance of that certain Tax Exemption
Decree currently in effect and issued in connection with the El San Juan
Individual Property (the “El San Juan Tax Decree”) El San Juan Tax Decree; and
(ii) subject to Unavoidable Delays, timely comply with all terms and conditions
set forth in the El San Juan Tax Decree and provide and deliver to Lender
reasonably satisfactory evidence of such compliance.

 

5.1.34 Ferryboat Charters; Ferryboats. (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 the Ferryboat Charters (including,
but not limited to, the payment of all rent and other charges required to be
paid under the Ferryboat Charters).

 

(b) If Mortgage Borrower shall be in default in any material respect under any
of the Ferryboat Charters, then, subject to the terms of such Ferryboat Charter,
Borrower shall, subject to Mortgage Lender’s rights under the Mortgage Loan
Agreement, grant Lender the right (but not the obligation), to cause the default
or defaults under the Ferryboat Charter to be remedied and otherwise exercise
any and all rights of Mortgage Borrower under the Ferryboat Charter, as may be
necessary to prevent or cure any default provided such actions are necessary to
protect Mortgage Lender’s interest under the Mortgage Loan Documents, and Lender
shall have the right to board or otherwise take possession of the applicable
ferryboat at such times and in such manner as Lender deems necessary, to prevent
or to cure any such default. 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 Loan Documents.

 

(c) Promptly upon becoming aware thereof, Borrower shall notify Lender in
writing of the occurrence of any material default by the lessor under any of the
Ferryboat Charters or the occurrence of any event that, with the passage of time
or service of notice, or both, would constitute a material default by the lessor
under any of the Ferryboat Charters, and the receipt by Mortgage Borrower of any
notice (written or otherwise) from the lessor under any of the Ferryboat
Charters noting or claiming the occurrence of any default by Mortgage Borrower
under such Ferryboat Charter 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 of the Ferryboat Charters. Borrower shall promptly
deliver to Lender a copy of any such written notice of default.

 

(d) Subject to the Mortgage Lender’s rights under the Mortgage Loan Agreement,
Borrower shall promptly execute, acknowledge and deliver to Lender such
instruments as may reasonably be required to permit Lender to cure any default
under the Ferryboat Charters 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 Mortgage Lender under the Mortgage Loan Documents with
respect to the Ferryboat Charters. Upon the occurrence and

 

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during the continuation of an Event of Default, Borrower irrevocably appoints
Lender as its true and lawful attorney-in-fact to do, in its name or otherwise,
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 the Ferryboat
Charters, including, without limitation, the right to effectuate any extension
or renewal of the Ferryboat Charters, or to preserve any rights of Mortgage
Borrower whatsoever in respect of any of the Ferryboat Charters (and the above
powers granted to Lender are coupled with an interest and shall be irrevocable),
all subject to the rights of Mortgage Lender.

 

(e) Borrower shall cause Mortgage Borrower to use, or to cause Ferryboat
Affiliate to use, commercially reasonable efforts to discharge all Liens of
record relating to the ferryboats encumbered by the Ship Mortgages, with respect
to which Liens the underlying indebtedness or obligations secured by such Liens
have been paid or discharged.

 

(f) In the event any Ferryboat Charter is terminated, Borrower shall cause El
Con Mortgage Borrower to promptly provide for a replacement of the ferryboat
subject thereto to the extent necessary for the operation of the hotel and
related facilities on the El Con Individual Property, such replacement to be
reasonably acceptable to Mortgage Lender.

 

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

 

5.2.1 Operation of Property. (a) Borrower shall not, without Lender’s prior
consent (which consent shall not be unreasonably withheld, conditioned or
delayed) cause or permit Mortgage Borrower or Baltimore Owner to: (i) surrender,
terminate, cancel, or amend or modify in any material respect any Management
Agreement; provided, that Borrower may permit Mortgage Borrower and Baltimore
Owner, without Lender’s consent, to replace the Manager so long as the
replacement manager is a Qualified Manager pursuant to a Replacement Management
Agreement; (ii) surrender, terminate, cancel, amend or modify in any material
respect any Franchise Agreement; provided, that Borrower may permit Mortgage
Borrower and Baltimore Owner, without Lender’s consent, to replace the
Franchisor so long as the replacement franchisor is a Qualified Franchisor
pursuant to a Replacement Franchise Agreement; (iii) reduce or consent to the
reduction of the term of any Management Agreement or Franchise Agreement; (iv)
increase or consent to the increase of the amount of any charges under any
Management Agreement or Franchise Agreement; or (v) otherwise modify, change,
supplement, alter or amend, or waive or release any of its rights and remedies
under, any Management Agreement or Franchise Agreement in any material respect.

 

(b) Notwithstanding anything to the contrary contained in this Agreement,
Borrower shall have the right, without Lender’s consent, to change the brand of
any hotel or resort at any Individual Property to a brand of a Qualified
Franchisor.

 

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(c) Following the occurrence and during the continuance of an Event of Default,
Borrower shall not cause or permit Mortgage Borrower or Baltimore Owner to
exercise any rights, make any decisions, grant any approvals or otherwise take
any action under any Management Agreement or Franchise Agreement without the
prior consent of Lender, which consent may be withheld or conditioned in
Lender’s sole discretion.

 

5.2.2 Liens. (a) Borrower shall not create, incur, assume or suffer to exist any
Lien on any of the Collateral, except Liens created by or permitted pursuant to
the Loan Documents.

 

(b) Borrower shall not permit or cause Mortgage Borrower or Baltimore Owner to
create, incur, assume or suffer to exist any Lien on any portion of the
Properties or permit any such action to be taken, except: (i) Permitted
Encumbrances; (ii) Liens created by or permitted pursuant to the Mortgage Loan
Documents; (iii) Liens for Taxes or Other Charges not yet delinquent; and (iv)
easements and other similar encumbrances entered into by Mortgage Borrower or
Baltimore Owner in the ordinary course of business for use, access, water and
sewer lines, telephones and telegraph lines, electric lines or other utilities
or for other similar purposes, provided that no such easement or other similar
encumbrance shall materially impair the utility and operation of any Individual
Property or materially and adversely affect the value of any Individual Property
or Mortgage Borrower’s or Baltimore Owner’s condition (financial or otherwise)
or business. Borrower shall obtain Lender’s consent for any Lien for which
Mortgage Borrower or Baltimore Owner is required to obtain Mortgage Lender’s
consent under the Mortgage Loan Documents, such consent of Lender not to be
unreasonably withheld, conditioned or delayed.

 

5.2.3 Dissolution. No Individual Borrower shall (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership of the
Collateral, (c) transfer, lease or sell, in one transaction or any combination
of transactions, the assets or all or substantially all of its properties or
assets except to the extent permitted by the Loan Documents, (d) modify, amend
or waive any provision or term of its organizational documents not permitted to
be modified, amended or waived, (e) terminate its organizational documents or
its qualification and good standing in any jurisdiction where it is required
hereunder to be qualified and in good standing, or (f) cause Mortgage Principal,
Mortgage Borrower or Baltimore Owner to (i) dissolve, wind up or liquidate or
take any action, or omit to take an action, as a result of which the Mortgage
Principal, Mortgage Borrower or Baltimore Owner would be dissolved, wound up or
liquidated in whole or in part, or (ii) amend, modify, waive or terminate the
certificate of incorporation or bylaws (or other organizational documents) of
Mortgage Principal, Mortgage Borrower or Baltimore Owner, in each case, without
obtaining the prior consent of Lender, which shall not be unreasonably withheld,
conditioned or delayed.

 

5.2.4 Change in Business. Borrower shall not enter into any line of business
other than the ownership of the Collateral and business that is incident and
appropriate thereto.

 

5.2.5 Debt Cancellation. Borrower shall not cancel or otherwise forgive or
release any claim or debt (other than termination of Leases in accordance
herewith) owed to

 

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Borrower by any Person, except for adequate consideration or as is prudent and
commercially reasonable and in the ordinary course of Borrower’s business.

 

5.2.6 Zoning. Borrower shall not allow Mortgage Borrower or Baltimore Owner 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 consent of Lender, which consent shall not be unreasonably withheld,
conditioned or delayed.

 

5.2.7 Intentionally Omitted.

 

5.2.8 Intentionally Omitted.

 

5.2.9 ERISA. (a) Borrower shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or 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.

 

(b) Borrower 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 (i) no Individual
Borrower sponsors, is obligated to contribute to or is itself an “employee
benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA;
(ii) no Individual Borrower is subject to any state statute regulating
investments of, or fiduciary obligations with respect to, governmental plans;
and (iii) one or more of the following circumstances is true:

 

(A) Equity interests in Individual Borrower are publicly offered securities,
within the meaning of 29 C.F.R. §2510.3-101(b)(2);

 

(B) Less than twenty-five percent (25%) of each outstanding class of equity
interests in Individual Borrower is held by “benefit plan investors” within the
meaning of 29 C.F.R. §2510.3-101(f)(2); or

 

(C) Individual Borrower qualifies as an “operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

 

5.2.10 Transfers. (a) Borrower acknowledges that Lender has examined and relied
on the experience of Borrower and its general partners, members, principals and
(if Borrower is a trust) beneficial owners in owning 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 obligations contained in the
Loan Documents. Borrower acknowledges that Lender has a valid interest in
maintaining the value of the Collateral so as to ensure that, should Borrower
default in the repayment of the Debt or the performance of the obligations
contained in the Loan Documents, Lender can recover the Debt by a sale of the
Collateral.

 

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(b) Except in connection with a release of an Individual Property or an Out
Parcel pursuant to the terms and conditions set forth in Sections 2.5 and 2.9
hereof or the substitution of an Individual Property pursuant to the terms and
conditions set forth in Section 2.8 or the permissible easements provided for in
Section 2.10 of the Mortgage Loan Agreement, Borrower shall not, and shall not
permit Mortgage Borrower or Baltimore Owner, to 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 Collateral or Individual Property or any part thereof or any legal
or beneficial interest therein or permit a Sale or Pledge of an interest in any
Restricted Party (collectively, a “Transfer”), other than pursuant to Leases of
space in the Improvements to tenants in accordance with the provisions of
Section 5.1.20 hereof and encumbrances described in Section 5.2.10(d)(vi) below,
without (i) the prior written consent of Lender and (ii) if a Securitization has
occurred or is pending within thirty (30) days, delivery to Lender of written
confirmation from the Rating Agencies that the Transfer will not result in the
downgrade, withdrawal or qualification of the then current ratings assigned to
any Securities or the proposed rating of any Securities.

 

(c) A Transfer shall include, but not be limited to: (i) an installment sales
agreement wherein any Individual Borrower agrees to sell the Collateral or any
part thereof or Mortgage Borrower or Baltimore Owner agrees to sell the
Properties, or any part therefor, in each case for a price to be paid in
installments; (ii) an agreement by Borrower, Mortgage Borrower and/or Baltimore
Owner 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, its respective 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 interests or the creation or issuance of
new limited partnership interests; (v) if a Restricted Party is a limited
liability company, any merger or consolidation or the change, removal,
resignation or addition of a managing member or non-member manager (or if no
managing member, any member) or the Sale or Pledge of the membership interest of
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; or (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.

 

(d) Notwithstanding the provisions of Sections 5.2.10(a), (b) and (c) hereof,
the following transfers shall not be deemed a Transfer: (i) a transfer by devise
or descent or by operation of law upon the death of a member, partner or
shareholder of a Restricted Party; (ii) the Sale or Pledge, in one or a series
of transactions, of not more than forty-nine percent (49%) of the stock, general
partnership interest or managing membership interest (as the case may be) in a
Restricted Party; provided, however, no such transfers shall result in the
change of voting control in the Restricted Party, and as a condition to each
such transfer, Lender shall receive not less

 

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than thirty (30) days prior written notice of such proposed transfer, (iii) the
Sale or Pledge, in one or a series of transactions, of not more than forty-nine
percent (49%) of the limited partnership interests or non-managing membership
interests (as the case may be) in a Restricted Party; provided, however, as a
condition to each such transfer, Lender shall receive not less than thirty (30)
days prior written notice of such proposed transfer, (iv) transfers, issuances,
pledges and redemptions of stock in Wyndham, so long as (A) Wyndham (or its
successor) is (or is Controlled by) a Public Company and (B) the surviving
entity is primarily involved in, or has a significant business line involving,
the ownership and operation of real estate similar to the Properties, (v) the
merger or consolidation of Wyndham, provided that the surviving entity of such
merger or consolidation is (or is Controlled by) (A) a Public Company, and (B)
primarily involved in, or has a significant business line involving, the
ownership or operation of real estate similar to the Properties, (vi) the
granting of easements, cross-easements, agreements, restrictions, reservations
and rights in the ordinary course of business for use, access, water and sewer
lines, telephone and telegraph lines, electric lines or other utilities or for
other similar purposes, provided that no such easements, agreements,
restrictions or rights shall materially impair the utility and/or operation of
any Individual Property or any Individual Borrower’s ability to repay the Debt
as it becomes due, (vii) transfers of direct or indirect interests in any
Mortgage Borrower, Mortgage Principal, Baltimore Owner or Individual Borrower to
Affiliates of Wyndham (or its successor) provided that after such transfers (A)
Wyndham (or its permitted successor) owns, directly or indirectly, not less than
fifty-one percent (51%) of the legal and beneficial ownership interests in such
Individual Borrower, Mortgage Principal, Mortgage Borrower and Baltimore Owner
and (B) such Individual Borrower, Mortgage Principal, Mortgage Borrower and
Baltimore Owner are Controlled, directly or indirectly, by Wyndham (or its
permitted successor), (viii) pledges of direct and indirect interests in any
Borrower, Mortgage Principal, Mortgage Borrower, Baltimore Owner and any
Mezzanine Borrower to any Mezzanine Lender as collateral for a Mezzanine Loan
and the exercise by any Mezzanine Lender of its remedies under the Mezzanine
Loan Documents, (ix) a conversion of Wyndham’s preferred stock to common stock
and/or the conversion of Wyndham to a real estate investment trust and (x) the
recapitalization of Wyndham and the related transactions contemplated by the
Recapitalization and Merger Agreement dated as of April 14, 2005 by and among
Wyndham International, Inc., WI Merger Sub, Inc., Apollo Investment Fund IV
L.P., AIF/THL PAH LLC, BCP Voting Trust, as Trustee for the Beacon Partners
Voting Trust, Thomas H. Lee Equity Fund IV, L.P., Thomas H. Lee Foreign Fund IV,
L.P. and Thomas H. Lee Foreign Fund IV-B, L.P., as the same may be amended,
restated, supplemented or otherwise modified from time to time (the “Recap
Agreement”). In addition (but not including and in addition to the mergers and
consolidations pursuant to the Recap Agreement) on a one time basis, Wyndham may
merge or consolidate with a public or private entity or engage in a transaction
described in Section 5.2.10(d)(iv) above in which the surviving entity is not,
and is not Controlled by, a Public Company provided that (A) after such merger,
consolidation, or Sale or Pledge described in Section 5.2.10(d)(iv) each
Borrower, Mortgage Principal, Mortgage Borrower and Baltimore Owner shall
continue to comply with the terms of Section 4.1.30 hereof, (B) such merger or
consolidation or Sale or Pledge is to a Qualified Transferee or to a Person
Controlled by a Qualified Transferee which Qualified Transferee shall Control
and own directly or indirectly, not less than 50% of the direct or indirect
legal and beneficial ownership interests of each Individual Borrower and
Baltimore Owner, and (C) the surviving entity is primarily involved in, or has a
significant business line involving, the ownership and operation of real estate
similar to the

 

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Properties. Furthermore, notwithstanding the provisions of Sections 5.2.10(a),
(b) and (c) hereof, in the event that an entity, which is an indirect owner of a
Minority Interest Borrower and which is not a Principal (as such term is defined
in the Mortgage Loan Agreement, as the context requires) of an Individual
Borrower, Mortgage Borrower or Baltimore Owner, forms a subsidiary to acquire an
asset and thereafter redeems the interests of one or more minority interest
holders of such indirect owner (which redeemed minority interest holders shall
not be Affiliates of Guarantor) by transferring all or a portion of the direct
legal and beneficial interests in such newly formed subsidiary to such minority
interest holders (or their designees), such formation, redemption and transfer
shall not constitute a Transfer and, subject to compliance with the immediately
following sentence, shall not otherwise be a violation of the terms of this
Agreement or require Lender’s consent. Notwithstanding anything to the contrary
contained in this Agreement, no sale, pledge or other transfer shall be
permitted of any direct (as opposed to indirect) interests in any entity in
which any Individual Borrower, Mortgage Principal, Mortgage Borrower or
Baltimore Owner owns a direct or indirect interest except pursuant to Section
5.2.10(f). In connection with any transfer or merger permitted under this
Section 5.2.10, Borrower shall deliver an Additional Insolvency Opinion if,
after such transfer or merger, more than forty-nine percent (49%) of any direct
legal or beneficial interest in any Individual Borrower, Mortgage Principal,
Mortgage Borrower or Baltimore Owner, as the case may be (or in any constituent
entity of any Individual Borrower, Mortgage Principal, Mortgage Borrower or
Baltimore Owner that is required to comply with the terms of Section 4.1.30
hereof), is owned by a new or successor entity. Such Additional Insolvency
Opinion shall be reasonably acceptable to (I) Lender, prior to a Securitization
or (II) the Rating Agencies, if a Securitization has occurred. Notwithstanding
anything to the contrary contained herein, pledges and hypothecations of
indirect equity interests in any Individual Borrower, Mortgage Principal,
Mortgage Borrower or Baltimore Owner shall be permitted provided (A) Wyndham (or
its permitted successors) maintains Control of, and owns, directly or
indirectly, not less than fifty-one percent (51%) of the legal and beneficial
ownership interests in such Individual Borrower, Mortgage Principal, Mortgage
Borrower or Baltimore Owner, as the case may be, and (B) any such pledges or
hypothecations are in connection with the corporate credit facilities of Wyndham
(or its permitted successors) and JPMorgan Chase Bank, N.A., as administrative
agent, and Bear Stearns Corporate Lending Inc., as syndication agent, and the
lenders party to that certain First-Lien Credit Agreement dated as of the date
hereof, and JPMorgan Chase Bank, N.A., as administrative agent, and Bear Stearns
Corporate Lending Inc., as syndication agent, and the lenders party to that
certain Second-Lien Credit Agreement dated as of the date hereof, as amended, or
another credit agreement with an institutional lender or a public bond offering
to prepay or refinance in full or in part any such credit facility which an
institutional lender or bondholders (or the trustee on their behalf), as
applicable, shall be making or holding a loan to Wyndham (or its permitted
successors) or its Affiliates (other than any Individual Borrower or its general
partner or managing member). A foreclosure sale (or transfer in lieu thereof) of
any such pledge or hypothecation to JPMorgan Chase Bank, N.A., or another
institutional lender as collateral agent for syndicate lenders or another
institutional lender, or the bond trustee, shall be permitted provided (1)
Lender is given at least sixty (60) days prior written notice of the proposed
foreclosure sale or transfer in lieu thereof; (2) the transferee is a reputable
entity or person, creditworthy, with sufficient financial worth considering any
obligations assumed and undertaken with respect to the Loan, as evidenced by
financial statements and other information reasonably requested by Lender; (3)
the Properties at all times shall continue to be managed by a

 

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Qualified Manager, and (4) and any and all such entities will comply with all of
the requirements set forth in the Note, this Agreement, the Mortgages and the
other Loan Documents.

 

(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 a Transfer without Lender’s consent to the
extent required hereunder. This provision shall apply to every Transfer
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer. Notwithstanding anything to the contrary contained in
this Section 5.2.10, (i) no transfer (whether or not such transfer shall
constitute a Transfer) shall be made to any Prohibited Person and (ii) in the
event any transfer (whether or not such transfer shall constitute a Transfer)
results in any Person owning in excess of forty-nine percent (49%) of the
ownership interest in a Restricted Party, Borrower shall, prior to such
transfer, deliver an updated Insolvency Opinion to Lender, which opinion shall
be in form, scope and substance reasonably acceptable in all respects to Lender
and the Rating Agencies.

 

(f) Notwithstanding anything to the contrary contained in this Section 5.2.10,
Lender shall not withhold its consent to a one-time sale, assignment, or other
transfer of all of the Properties and of the Collateral provided that (i) Lender
receives thirty (30) days prior written notice of such transfer, (ii) no Event
of Default has occurred and is continuing and (iii) upon the satisfaction (in
the reasonable determination of Lender) of the following matters:

 

(A) Mortgage Borrower (or Baltimore Owner, as the case may be) or Transferee
shall pay any and all reasonable out-of-pocket costs incurred in connection with
the transfer (including, without limitation, Lender’s reasonable counsel fees
and disbursements and all recording fees, title insurance premiums and mortgage
and intangible taxes);

 

(B) The proposed transferee (the “Transferee”) shall be one or more special
purpose bankruptcy remote entities, each of which (i) complies with all of the
requirements of Section 4.1.30 hereof and whose organizational documents are
substantially similar to Mortgage Borrower’s and Baltimore Owner’s
organizational documents, or if not substantially similar, acceptable to the
Rating Agencies and (ii) is Controlled by a Qualified Transferee, which
Qualified Transferee shall own, directly or indirectly, not less than fifty
percent (50%) of the legal and beneficial ownership interests in such
Transferee;

 

(C) Transferee shall assume all of the obligations of Mortgage Borrower under
the Note, this Agreement, the Mortgages and the other Mortgage Loan Documents in
a manner reasonably satisfactory to Lender in all respects, including, without
limitation, by entering into an assumption agreement in form and substance
reasonably satisfactory to Lender and delivering such legal opinions as Lender
may reasonably require;

 

(D) The Properties shall be managed by Manager or a Qualified Manager following
such transfer;

 

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(E) The proposed transfer is permitted pursuant to the Franchise Agreements or
Franchisor consents to such proposed transfer if Franchisor has the right to
consent to such proposed transfer;

 

(F) To the extent available in the applicable jurisdiction, Transferee shall
deliver an endorsement to the existing Title Insurance Policies insuring the
Mortgages as modified by the assumption agreement, as a valid first lien on each
Individual Property and naming the Transferee as owner of the fee or leasehold
estate, as applicable, of each Individual Property, which endorsement shall
insure that as of the recording of the assumption agreement, each Individual
Property shall not be subject to any additional exceptions or Liens other than
Permitted Encumbrances;

 

(G) Transferee shall deliver to Lender an Additional Insolvency Opinion from an
independent law firm with respect to the substantive non-consolidation of
Transferee and the Mezzanine Entity and their constituent entities, which law
firm and opinion shall be reasonably satisfactory in all respects to (i) Lender,
if prior to a Securitization, or (ii) Lender and the Rating Agencies, if a
Securitization has occurred;

 

(H) Qualified Transferee or an entity reasonably satisfactory to Lender shall
have assumed all of the liabilities and obligations of Guarantor under, or enter
into, a guaranty in form substantially similar to the Guaranty; and

 

(I) Lender shall have received such other documents, certificates and opinions
as shall be reasonably requested and each shall be in form and substance
reasonably satisfactory to Lender.

 

(J) (i) All conditions set forth in Section 5.2.10(f) of the Mortgage Loan
Agreement have been satisfied and Mortgage Lender has not withheld its consent
to such sale, assignment or other transfer; (ii) All conditions set forth in
Section 5.2.10(f) of the Mezzanine B Loan Agreement have been satisfied and
Mezzanine B Lender has not withheld its consent to such sale, assignment or
other transfer; and (iii) All conditions set forth in Section 5.2.10(f) of the
Mezzanine C Loan Agreement have been satisfied and Mezzanine C Lender has not
withheld its consent to such sale, assignment or other transfer

 

(K) the entity or entities to which the Property is Transferred (the “New
Mortgage Borrower”) (x) shall assume (A) the Mortgage Loan and the Mortgage Loan
Documents and (B) all the agreements of Mortgage Borrower under the Mortgage
Loan Documents, (y) shall each be a bankruptcy-remote Special Purpose Entity,
and (z) shall otherwise have a legal and ownership structure that is (A)
substantially the same as Mortgage Borrower or (B) at least as favorable to
Lender, as reasonably determined by Lender, as the legal and ownership structure
of Mortgage Borrower;

 

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(L) all of the entities which own interests in the New Mortgage Borrower similar
to the interests in Mortgage Borrower owned by Borrower (the “Mezzanine
Entities”) (x) shall assume the Loan and all the agreements of Borrower under
the Loan Documents (and without limiting the foregoing, all of the ownership
interests in the New Mortgage Borrower, all payments thereon and all proceeds
thereof shall be pledged to Lender on terms no less favorable than the pledge of
the Collateral under the Pledge Agreement), which shall be evidenced by an
assumption of the Loan Documents and/or by new loan documents substantially
similar (in form and substance) to the Loan Documents or otherwise reasonably
acceptable to Lender in order to properly reflect the new ownership structure
and the pledge of the interests thereunder, (y) shall each be a
bankruptcy-remote Special Purpose Entity, and (z) shall otherwise have a legal
and ownership structure that is (A) substantially the same as Borrower, or (B)
at least as favorable to Lender, as reasonably determined by Lender, as the
legal and ownership structure of Borrower;

 

(M) there shall be delivered to Lender opinions of counsel, in form, substance
and from counsel reasonably satisfactory to Lender as Lender reasonably requests
on the following matters, subject to exceptions and conditions customarily
contained in such opinions: (i) Insolvency Opinions with respect to the
Mezzanine Entities and such of their Affiliates as shall be reasonably requested
by Lender, (ii) such customary corporate opinions as shall be reasonably
requested by Lender, including without limitation any and all opinions as shall
have been delivered to Lender in connection with the making of the Loan, and
(iii) such other customary legal opinions as shall be reasonably requested by
Lender;

 

(N) Borrower shall deliver, at its sole cost and expense and to the extent
available in the applicable jurisdictions, endorsements to the existing or new
UCC Title Insurance Policy, insuring the new pledge referred to in clause (L)
above, as a valid first lien on the Collateral and naming the Mezzanine Entities
as owner(s) of the Collateral, which new UCC Title Insurance Policy shall insure
that, as of the date of the Transfer, the Collateral shall not be subject to any
additional exceptions or liens other than those contained in the relevant UCC
Title Policy issued on the date hereof; and

 

(O) Lender shall have approved the New Mortgage Borrower’s owners title
insurance policy with respect to the Property, subject only to the Permitted
Encumbrances (other than the Mortgage Loan Documents which shall be replaced in
accordance with clause (K) above).

 

(g) Notwithstanding anything to the contrary contained in this Section 5.2.10,
Lender’s consent shall not be required for the leasing or financing of personal
property, including, without limitation, furniture, fixtures and equipment, as
to any leases or financings not existing on the date hereof, that is used in
connection with the operation of the Properties (“Equipment”), provided Lender
has received prior written notification of such Mortgage Borrower’s intent to
lease or finance such Equipment, and provided, further, that (i) any such

 

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lease or financing is subject to commercially prudent terms and conditions and
at market rates, (ii) the Equipment leased or financed is readily replaceable
without material interference or interruption to the operation of the Properties
as required pursuant to the provisions of this Agreement and the Mortgage Loan
Documents and the other Loan Documents, (iii) the aggregate annual payment in
respect of such financing for Equipment located on or used in connection with
each Individual Property shall be (1) with respect to months 1 through 36 of the
Loan, no greater than the larger of the Current Annual Payment Amount identified
on Schedule 5.2.10 plus $25,000 and, with respect to the additional amounts
allowed for casinos, the Planned Annual Payment identified on Schedule 5.2.10
plus $25,000, or the applicable equipment lease annual threshold amount set
forth on Schedule 5.2.10 in the column entitled “Years 1-3”, (2) with respect to
months 37 through 60 of the Loan, no greater than the larger of the applicable
equipment lease annual threshold amount set forth on Schedule 5.2.10 in the
column entitled “Years 1-3” plus $25,000 or the applicable equipment lease
annual threshold amount set forth on Schedule 5.2.10 in the column entitled
“Years 4-5”, and (3) with respect to months 61 through 84 of the Loan, no
greater than the larger of the applicable equipment lease annual threshold
amount set forth on Schedule 5.2.10 in the column entitled “Years 4-5” plus
$25,000 or the applicable equipment lease annual threshold amount set forth on
Schedule 5.2.10 in the column entitled “Years 6-7” and (iv) the financing does
not create a lien on any Properties other than the Equipment financed.

 

(h) Notwithstanding anything to the contrary contained in this Section 5.2.10,
Lender shall not withhold its consent to a Transfer of Wyndham Management
Corporation (or any of its Affiliates which are managing the Properties in
accordance with this Agreement) to a Qualified Manager or to a Qualified
Transferee.

 

5.2.11 Ground Lease. (a) El Con Borrower shall not cause El Con Mortgage
Borrower, without Lender’s written consent, to fail to exercise any option or
right to renew or extend the term of the Ground Lease in accordance with the
terms of the Ground Lease, and shall give immediate written notice to Lender and
shall execute, acknowledge, deliver and record any document reasonably requested
by Lender to evidence the Lien of the related Mortgage on such extended or
renewed lease term; provided, however, El Con Borrower shall not be required to
cause El Con Mortgage Borrower to exercise any particular such option or right
to renew or extend to the extent El Con Borrower shall have received the prior
written consent of Lender (which consent shall not be unreasonably withheld,
conditioned, or delayed) allowing El Con Mortgage Borrower to forego exercising
such option or right to renew or extend. If El Con Borrower shall fail to
exercise any such option or right as aforesaid, subject to the rights of
Mortgage Lender under the Mortgage Loan Documents, Lender may exercise the
option or right as El Con 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) El Con Borrower shall not cause El Con Mortgage Borrower to waive, excuse,
condone or in any way release or discharge Ground Lessor of or from Ground
Lessor’s material obligations, covenants and/or conditions under the Ground
Lease without the prior written consent of Lender, which shall not be
unreasonably withheld, conditioned or delayed.

 

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(c) El Con Borrower shall not cause El Con Mortgage Borrower, without Lender’s
prior written consent, to surrender, terminate, forfeit, or suffer or permit the
surrender, termination or forfeiture of, or change, modify or amend in a
material and adverse manner, the Ground Lease. 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 lessor’s interest in the Ground Lease by El
Con Borrower, any Affiliate of El Con Borrower, El Con Mortgage Borrower or any
affiliate of El Con Borrower shall be accomplished by El Con Borrower in such a
manner so as to avoid a merger of the interests of lessor and lessee in the
Ground Lease, unless consent to such merger is granted by Lender.

 

5.2.12 WKA Ground Lease. (a) Borrower shall not cause or permit Mortgage
Borrower to waive, excuse, condone or in any way release or discharge the lessor
under any WKA Ground Lease of or from such lessor’s material obligations,
covenant and/or conditions under the related WKA Ground Lease without the prior
written consent of Lender, which consent shall not be unreasonably withheld,
conditioned or delayed.

 

(b) Borrower shall not cause or permit Mortgage Borrower, without Lender’s prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed, cause or permit Mortgage Borrower to surrender, terminate, forfeit,
or suffer or permit the surrender, termination or forfeiture of, or change,
modify or amend in a material or adverse manner, any WKA Ground Lease. 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 lessor’s
interest in any WKA Ground Lease by Mortgage Borrower or any Affiliate of
Mortgage Borrower shall be accomplished by Mortgage Borrower in such a manner so
as to avoid a merger of the interests of lessor and lessee in such WKA Ground
Lease, unless consent to such merger is granted by Lender, which consent shall
not be unreasonably withheld, conditioned or delayed.

 

5.2.13 Submerged Land Lease. Without Lender’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, Borrower
shall not cause or permit Mortgage Borrower to (a) surrender, terminate or
cancel the Submerged Land Lease; (b) reduce or consent to the reduction of the
term of the Submerged Land Lease; (c) increase or consent to the increase of the
amount of any charges under the Submerged Land Lease; (d) modify, change,
supplement, alter or amend in any material respect the Submerged Land Lease or
waive or release in any material respect any of Borrower’s rights and remedies
under the Submerged Land Lease; or (e) grant its consent or approval as may be
requested in connection with the terms and provisions of the Submerged Land
Lease except as may be required thereunder.

 

5.2.14 Concession Agreement. Without Lender’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, Borrower
shall not cause or permit Mortgage Borrower to (a) surrender, terminate or
cancel the Concession Agreement; (b) reduce or consent to the reduction of the
term of the Concession Agreement; (c) decrease or consent to the decrease of the
amount of any charges due by the Operator under the Concession Agreement; or (d)
modify, change, supplement, alter or amend, in any material

 

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respect the Concession Agreement or waive or release, in any material respect
any of Borrower’s rights and remedies under the Concession Agreement;

 

5.2.15 Parking Lease. (a) Borrower shall not waive, excuse, condone or in any
way release or discharge the lessor under any Parking Lease of or from such
lessor’s material obligations, covenant and/or conditions under the related
Parking Lease without the prior written consent of Lender, which consent shall
not be unreasonably withheld, conditioned or delayed.

 

(b) Borrower shall not cause or permit Mortgage Borrower, without Lender’s prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed, surrender, terminate, forfeit, or suffer or permit the surrender,
termination or forfeiture of, or change, modify or amend in any materially
adverse respect, any Parking Lease. 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 lessor’s interest in any Parking Lease by
Borrower or any Affiliate of Borrower shall be accomplished by Mortgage Borrower
in such a manner so as to avoid a merger of the interests of lessor and lessee
in such Parking Lease, unless consent to such merger is granted by Lender, which
consent shall not be unreasonably withheld, conditioned or delayed.

 

5.2.16 Material Agreements. Except as otherwise as set forth in this Agreement,
Borrower shall not and shall cause Mortgage Borrower and Baltimore Owner to not,
without Lender’s prior written consent: (a) enter into, surrender or terminate
any material agreement to which it is a party (unless the other party thereto is
in material default or the entering into, surrender or termination of such
agreement is commercially reasonable and on an arms-length basis), (b) increase
or consent to the increase of the amount of any charges to be paid by Mortgage
Borrower or Baltimore Owner under any material agreement to which it is a party,
except as provided therein or on an arms’-length basis and commercially
reasonable terms; or (c) otherwise modify, change, supplement, alter or amend,
or waive or release any of its rights and remedies under any material agreement
to which it is a party in any material respect, except on an arms’-length basis
and commercially reasonable terms.

 

5.2.17 Limitation on Securities Issuances. None of Borrower or any of its
Affiliates that directly owns, or is directly owned by, Borrower shall issue any
membership interests or other securities other than those that have been issued
as of the date hereof other than as permitted hereunder.

 

5.2.18 Limitations on Distributions. Following the occurrence and during the
continuance of an Event of Default, Borrower shall not make any distributions to
its members.

 

5.2.19 Other Limitations. Prior to the payment in full of the Debt, or the
earlier release of Collateral (or with respect to any Individual Borrower, the
earlier release of the Lien encumbering the Collateral owned by such Individual
Borrower), neither Borrower nor 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 or permit to occur to any of
the following actions or items:

 

(a) except as permitted herein (i) any prepayment in full of the Mortgage Loan
unless the Loan is also repaid, (ii) any Transfer of any or all of the
Properties or any portion thereof or (iii) any action in connection with or in
furtherance of the foregoing;

 

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

 

(c) any material modification, amendment, consolidation, spread, restatement,
waiver or termination of any of the Mortgage Loan Documents except as expressly
required thereunder; and

 

(d) except as permitted hereunder or required by the Mortgage Loan Documents,
any determination to use Net Proceeds to restore any Individual Property after a
Casualty or Condemnation.

 

5.2.20 Contractual Obligations. Other than the Loan Documents, neither Borrower
nor any of its assets shall be subject to any Contractual Obligations, and
Borrower shall not enter into any agreement, instrument or undertaking by which
it or its assets are bound, except for such liabilities, not material and
adverse in the aggregate, that are incidental to its activities as a regular
member, partner or equity owner of Mortgage Borrower and Baltimore Owner.

 

5.2.21 Refinancing. Borrower shall not consent to or permit a refinancing of the
Mortgage Loan unless it also repays the Loan and obtains the prior consent of
Lender, which consent may be given or withheld by Lender in its sole discretion.

 

  VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS

 

Section 6.1. Insurance. (a) Borrower shall cause Mortgage Borrower and Baltimore
Owner to maintain 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 Borrower to each to be named as an additional insured
under the insurance policies described in Section 6.1(a)(ii), (v), (vi), (vii)
and (viii) 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 but subject to the terms of the Intercreditor Agreement,
under the insurance policies required under Sections 6.1(a)(i), (ii), (iii),
(iv), (ix) and (x) of the Mortgage Loan Agreement. Borrower shall also cause all
insurance policies required under this Section 6.1 to provide for at least
thirty (30) days prior notice to Lender in the event of policy cancellation or
material changes. 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
Policies required hereunder are in full force and effect, Lender shall have the
right, without notice to Borrower, to take such reasonable action as Lender
deems necessary in good faith to protect its interest in the Properties,
including, without limitation, the obtaining of such insurance coverage (no more
than is required under the Mortgage Loan Agreement) as Lender in its sole but
good

 

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faith discretion deems appropriate after five (5) Business Days’ written notice
to Borrower if the date upon which any such coverage will lapse is five (5) or
more Business Days or any time Lender deems necessary (regardless of prior
written notice to Borrower) to avoid a lapse of 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 Collateral 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 notice of such damage to Lender and shall cause Mortgage Borrower
and Baltimore Owner with reasonable diligence to commence and prosecute the
completion of the Restoration of such Individual Property as nearly as possible
to the condition the 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 shall pay or cause to be paid all costs of such Restoration whether or
not such costs are covered by insurance. Lender may, but shall not be obligated
to make proof of loss if not made promptly by Borrower.

 

Section 6.3. Condemnation. Borrower shall promptly give Lender notice of the
actual or threatened commencement of any proceeding for the Condemnation of part
of any Individual Property and shall deliver to Lender copies of any and all
papers served in connection with such proceedings. Subject to the rights of
Mortgage Lender under the Mortgage Loan Documents, Lender may participate in any
such proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall cause
Mortgage Borrower and Baltimore Owner to, at their 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 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 Award by the condemning authority but shall be entitled to receive
out of the Net Liquidation Proceeds After Debt Service 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 or Baltimore Owner with reasonable diligence to commence and prosecute
the Restoration of the applicable Individual Property or any portion thereof and
otherwise comply with the provisions of Section 6.4. If any Individual Property
is sold, through foreclosure or otherwise, prior to the receipt by Lender of any
Net Liquidation Proceeds After Debt Service, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive any Net Liquidation Proceeds After Debt Service,
or a portion thereof sufficient to pay the Debt. Notwithstanding the foregoing,
or any other provision herein to the contrary, Borrower’s obligation to commence
and pursue Restoration of an Individual Property shall not be deemed to obligate
Borrower to acquire any additional land to substitute for any portion of any
Individual Property which may be taken by Condemnation.

 

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Section 6.4. Restoration. Borrower shall, or shall cause Mortgage Borrower and
Baltimore Owner 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.
Notwithstanding anything to the contrary herein, Borrower may cause or permit
Mortgage Borrower and Baltimore Owner to restore an Individual Property as and
when it is required or permitted under the Mortgage Loan Agreement and to
receive and apply insurance and condemnation proceeds in accordance with the
terms of the Mortgage Loan Agreement.

 

  VII. RESERVE FUNDS

 

Section 7.1. Required Repairs. Borrower shall, or shall cause Mortgage Borrower
and Baltimore Owner to, perform the Required Repairs (as defined in the Mortgage
Loan Agreement), in accordance with all of the terms and conditions set forth in
Section 7.1 of the Mortgage Loan Agreement.

 

Section 7.2. Tax and Insurance Escrow Fund. (a) Borrower shall deposit with
Lender on each Payment Date, in cash or cash equivalent (including a Letter of
Credit), (i) one-twelfth of the Taxes that Lender estimates will be payable
during the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such Taxes at least thirty (30) days prior to their
respective due dates, and (ii) at the option of Lender, if the liability or
casualty Policy maintained by Borrower covering the Properties shall not
constitute a blanket of Policy, one-twelfth of the Insurance Premiums that
Lender estimates will be payable for the renewal of the coverage afforded by the
Policies upon the expiration thereof in order to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies (such amounts, together with the
proceeds of any Letter of Credit delivered pursuant to this Section 7.2,
collectively, the “Tax and Insurance Escrow Fund”). The Tax and Insurance Escrow
Fund and the payment of the monthly Debt Service, shall be added together and
shall be paid as an aggregate sum by Borrower to Lender. Lender will apply the
Tax and Insurance Escrow Fund to payments of Taxes and Insurance Premiums
required to be made by Borrower pursuant to Section 5.1.2 hereof and under the
Pledge Agreement. In making any payment relating to the Tax and Insurance Escrow
Fund, Lender may do so according to any bill, statement or estimate procured
from the appropriate public office (with respect to Taxes) or insurer or agent
(with respect to Insurance Premiums), without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof provided, however, Borrower shall
have the right to contest the same in good faith and in accordance with the
provisions of the Loan Documents. If the amount of the Tax and Insurance Escrow
Fund shall exceed the amounts due for Taxes and Insurance Premiums pursuant to
Section 5.1.2 hereof, Lender shall, at Borrower’s option, return any excess to
Borrower or credit such excess against future payments to be made to the Tax and
Insurance Escrow Fund. Any amount remaining in the Tax and Insurance Escrow Fund
after the Debt has been paid in full shall be returned to Borrower. Any amount
remaining in the Tax Insurance Escrow Fund allocable to an Individual Property
being released in accordance with the provisions hereof shall be returned to the
Individual Borrower whose Individual Property is being released. In allocating
such excess, Lender may deal with the Person shown on the records of Lender to
be the owner of the Properties. If at any time Lender

 

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reasonably determines that the Tax and Insurance Escrow Fund is not, or will not
be, sufficient to pay Taxes and Insurance Premiums by the dates set forth in the
first sentence of this Section 7.2, Lender shall notify Borrower of such
determination and Borrower shall increase its monthly payments (or deliver a
Letter of Credit in the amount of such increase) by the amount that Lender
estimates is sufficient to make up the deficiency at least thirty (30) days
prior to the due date of the Taxes and/or thirty (30) days prior to expiration
of the Policies, as the case may be.

 

(b) In addition and as a modification of the provisions set forth above in this
Section 7.2, Lender acknowledges and agrees that the deposits to Tax and
Insurance Escrow Fund for each of the Minority Interest Properties shall be
segregated and separated from the deposits to Tax and Insurance Escrow Fund for
all other Properties and disbursements from the Tax and Insurance Escrow Fund
for each of the Minority Interest Properties shall only be made from the
segregated deposits for such Minority Interest Property and used only for such
Minority Interest Property.

 

7.2.2 Waiver of Tax Escrow. Borrower shall be relieved of its obligation to make
any deposits of Tax and Insurance Escrow Fund under Section 7.2 above, provided
that (a) Mortgage Borrower and Baltimore Owner are required to and do make
monthly deposits to the Tax and Insurance Escrow Fund (as defined under the
Mortgage Loan Agreement) under the Mortgage Loan and (b) Lender receives
evidence reasonably acceptable to it of the making of such deposits and of the
payment of all such Taxes and Insurance Premiums to extent not paid by Mortgage
Lender.

 

Section 7.3. Replacements and Replacement Reserve.

 

7.3.1 Replacement Reserve Fund. (a) Borrower shall be required, on each Payment
Date, to make a payment (or, in lieu of such payment, deliver a Letter of
Credit) into an escrow account to accumulate funds to be drawn upon for costs
incurred in connection with Replacements at the Properties. Amounts so deposited
(or the proceeds of such Letter of Credit) shall hereinafter be referred to as
Borrower’s “Replacement Reserve Fund” and the account in which such amounts (or
proceeds) are held shall hereinafter be referred to as Borrower’s “Replacement
Reserve Account.” The monthly deposit (the “Replacement Reserve Monthly
Deposit”) shall be equal to the positive amount, if any, obtained by subtracting
(a) the actual amount (the “Actual Amount”) incurred by Mortgage Borrower or
Baltimore Owner for Replacements at the Properties during the month which is two
(2) months prior to the month in which the applicable Replacement Reserve
Monthly Deposit is due (the “Applicable Month”) from (b) the Gross Income from
Operations from the Properties during the Applicable Month multiplied by four
percent (4.0%) (or, in the case of casino revenues, one percent (1.0%) of Net
Wins) (the amount determined pursuant to clause (b), the “Required Monthly
Expenditure”). Borrower shall have broad discretion to cause the use of the
Replacement Reserve Fund for legitimate Replacements at the Properties
(including furnishings, fixtures and equipment in the guest rooms, hallways,
lobbies, restaurants, lounges, meeting and banquet rooms, casinos, parking
facilities and other public areas), provided that Borrower shall cause Mortgage
Borrower and Baltimore Owner to spend not less than two percent (2%) of the
Gross Income from Operations attributable to its respective Individual Property
(or, in the case of casino revenues, one percent (1.0%) of Net Wins) for
Replacements at such Individual Property. Notwithstanding the foregoing
flexibility to allocate the Replacement Reserve Fund among the Properties, upon

 

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the sale of any Individual Property, Borrower and Baltimore Owner shall cause
the use of a portion of the applicable sale proceeds to make a payment into the
Replacement Reserve Account, in an amount equal to the excess, if any, of (i)
the aggregate Actual Amount such sold Individual Property from the date of this
Agreement until the time of such sale less (ii) the aggregate Required Monthly
Expenditures of such sold Individual Property during the same period, provided
that such payment into the Replacement Reserve Account shall only be required in
the event and to the extent that the aggregate Actual Amount for Replacements at
any Individual Property (other than such sold Individual Property or an
Individual Property theretofore released pursuant to the provisions of Section
2.5 or 2.8 of the Mortgage Loan Agreement) is less than the aggregate Required
Monthly Expenditures of such Individual property during the corresponding
period.

 

(b) In the event that any Individual Property is released from the Lien of its
related Mortgage, any amount held in the Replacement Reserve Account and
allocated to such Individual Property shall be released to the applicable
Individual Borrower. Borrower covenants and agrees to provide Lender evidence
reasonably acceptable to Lender, within thirty (30) days after the start of each
calendar month, of the Actual Amount for each Individual Property for the
immediately preceding calendar month period. (For example, with respect to the
Replacement Reserve Monthly Deposit payable on the Payment Date in June,
Borrower shall provide Lender evidence of the Actual Amount for the month of
April (the “Subject Month”) by May 30th.) In the event the Actual Amount spent
by Mortgage Borrower and Baltimore Owner in any given Subject Month exceeds the
Required Monthly Expenditure (such amount, the “Excess”), Borrower and Baltimore
Owner may request payment or reimbursement from the Replacement Reserve Account
(or may request a reduction in the amount of any Letter of Credit delivered to
Lender in lieu of a cash deposit to the Replacement Reserve Account) for the
Excess, up to the amount of funds on deposit in the Replacement Reserve Account
(or the undrawn balance of all Letters of Credit delivered pursuant to Section
7.3.1); provided, however, at no time shall Borrower be entitled to receive
funds (or reduce the amount of any Letter of Credit) in excess of the Actual
Amount for the applicable Subject Month. To the extent the Replacement Reserve
Account has no funds on deposit or there are no outstanding Letters of Credit or
the aggregate amount of such funds and the undrawn balance of outstanding
Letters of Credit is less than the amount of the Excess, Borrower will be
permitted to carry forward the amount of the Excess that was not paid or
reimbursed (such amount, the “Shortfall”) as a credit against future Replacement
Reserve Monthly Deposits until the Shortfall is exhausted. In other words,
Borrower shall be reimbursed for the cost of Replacements relating to any
Individual Property first by reduction of the current month’s Replacement
Reserve Monthly Deposit, second from any funds on deposit in the Replacement
Reserve Account (and by reductions in the amount of Letters of Credit delivered
to Lender in lieu of cash deposits) (using first the funds and then reductions
in the Letters of Credit), and third as an ongoing credit toward future months’
required Replacement Reserve Monthly Deposits until Borrower has been fully
reimbursed for the cost of all Replacements from the beginning of the first
Subject Month to date.

 

7.3.2 Disbursements from Replacement Reserve Account.

 

(a) Lender shall make disbursements from the Replacement Reserve Account to pay
Borrower only for the costs of the Replacements.

 

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(b) Lender shall, upon written request from Borrower and satisfaction of the
requirements set forth in this Section 7.3.2, disburse to Borrower amounts from
the Replacement Reserve Account necessary to pay for the actual approved costs
of Replacements or to reimburse Borrower therefor, upon completion of such
Replacements (or, upon requests for deposits or partial completion in the case
of Replacements made pursuant to Section 7.3.2(e) hereof) as determined by
Lender. In no event shall Lender be obligated to disburse funds from the
Replacement Reserve Account if a Default or an Event of Default exists.

 

(c) Each request for disbursement from the Replacement Reserve Account shall be
in a form reasonably specified or approved by Lender and shall specify (i) the
specific Replacements spent by Borrower for which the disbursement is requested,
(ii) the quantity and price of each item purchased, if the Replacement includes
the purchase or replacement of specific items, (iii) the price of all materials
(grouped by type or category) used in any Replacement other than the purchase or
replacement of specific items, and (iv) the cost of all contracted labor or
other services applicable to each Replacement for which such request for
disbursement is made. With each request Borrower shall certify that all
Replacements have been made in accordance with all applicable Legal Requirements
of any Governmental Authority having jurisdiction over the applicable Individual
Property to which Replacements are being provided. Each request for disbursement
shall include copies of invoices for all items or materials purchased and all
contracted labor or services provided and for all deposits for items or
materials or labor or services being purchased and, unless Lender has agreed to
issue joint checks as described below in connection with a particular
Replacement, each request shall include evidence reasonably satisfactory to
Lender of payment of all such amounts. Except as provided in Section 7.3.2(e)
hereof, each request for disbursement from the Replacement Reserve Account shall
be made only after completion of the Replacement for which disbursement is
requested. Borrower shall provide Lender evidence of completion of the subject
Replacement satisfactory to Lender in its reasonable judgment.

 

(d) Borrower shall pay all invoices in connection with the Replacements with
respect to which a disbursement is requested (i) prior to submitting such
request for disbursement from the Replacement Reserve Account or (ii) with funds
received from the applicable disbursement from the Replacement Reserve Account,
or, at the request of Borrower, Lender will issue joint checks, payable to
Borrower and the contractor, supplier, materialman, mechanic, subcontractor or
other party to whom payment is due in connection with a Replacement. In the case
of payments in an amount equal to or greater than $50,000 made by joint check,
Lender may require a waiver of lien from each Person receiving payment prior to
Lender’s disbursement from the Replacement Reserve Account. In addition, as a
condition to any disbursement, Lender may require Borrower to obtain lien
waivers from each contractor, supplier, materialman, mechanic or subcontractor
who receives payment in an amount equal to or greater than $50,000 for
completion of its work or delivery of its materials. Any lien waiver delivered
hereunder shall conform to the requirements of applicable law and shall cover
all work performed and materials supplied for the applicable Individual Property
by that contractor, supplier, subcontractor, mechanic or materialman through the
date covered by the current reimbursement request (or, in the event that payment
to such contractor, supplier, subcontractor, mechanic or materialmen is to be
made by a joint check or from funds received by Borrower from disbursements from
the Replacement Reserve Account, the release of lien shall be effective through
the date covered by the previous release of funds request).

 

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(e) If (i) the cost of a Replacement exceeds $50,000, and (ii) the contractor
performing such Replacement requires a deposit or periodic payments pursuant to
terms of a written contract, a request for reimbursement from the Replacement
Reserve Account may be made for such deposit or after completion of a portion of
the work under such contract; provided (A) such contract requires such deposit
or payment upon completion of such portion of the work, (B) the materials for
which the request (other than a request for a deposit) is made are on site at
the applicable Individual Property and are properly secured or are in bonded
warehouse or have been installed in such Individual Property, (C) all other
conditions in this Agreement applicable to disbursement have been satisfied, and
(D) if required by Lender, each contractor or subcontractor receiving payments
under such contract shall provide a waiver of lien with respect to amounts which
have been paid to that contractor or subcontractor.

 

(f) Borrower shall not make a request for disbursement from the Replacement
Reserve Account more frequently than once in any thirty (30) day period and
(except in connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than $25,000.

 

(g) Borrower shall make Replacements when required in order to keep each
Individual Property in condition and repair consistent with other first class
hotels in the same market segment in the metropolitan area in which the
respective Individual Property is located, and to keep each Individual Property
or any portion thereof from deteriorating. Borrower shall complete all
Replacements in a good and workmanlike manner as soon as commercially reasonable
following the commencement of making each such Replacement.

 

(h) Waiver of Replacement Reserve Account. Borrower shall be relieved of its
obligation to make any deposits of the Replacement Reserve Funds under Section
7.3.1 above, provided that (a)(i) Mortgage Borrower and Baltimore Owner if and
as required under Section 7.3.1 of the Mortgage Loan Agreement are required to
and does make monthly deposits to the Replacement Reserve Account (as defined in
the Mortgage Loan Agreement) under the Mortgage Loan and (ii) Lender receives
evidence reasonably acceptable to it of the making of such deposits and of the
replacements and repairs to the Properties or (b) Mortgage Borrower and
Baltimore Owner have delivered to the Mortgage Lender one or more Letters of
Credit in lieu of the required Replacement Reserve Funds (as defined in the
Mortgage Loan Agreement) and Lender receives evidence reasonably acceptable to
it of such deliveries.

 

7.3.3 Balance in the Replacement Reserve Account. The insufficiency of any
balance in the Replacement Reserve Account shall not relieve Borrower from its
obligation to fulfill all applicable preservation and maintenance covenants in
the Loan Documents.

 

7.3.4 Repair Funds for Minority Interest Properties. In addition and as a
modification of the provisions set forth above in this Section 7.3, Lender
acknowledges and agrees that the deposits to the Replacement Reserve Fund for
each of the Minority Interest Properties shall be segregated and separated from
the deposits to Replacement Reserve Fund for all other Properties and
disbursements from the Replacement Reserve Fund for each of the Minority
Interest Properties shall only be made from the segregated deposits for such
Minority Interest Property and used only for such Minority Interest Property.

 

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Section 7.4. Ground Lease Escrow Fund. (a) On the Closing Date, Borrower shall
deposit with Lender, in cash or cash equivalent (including a Letter of Credit),
the Ground Rent which may be due during the month immediately following the
month in which the Closing Date occurs (the “Initial Ground Lease Escrow
Deposit”). Thereafter, on each Payment Date occurring during a Cash Sweep
Period, Borrower shall deposit with Lender, in cash or cash equivalent
(including a Letter of Credit), the Ground Rent which may be due during the
following month in order to accumulate with Lender sufficient funds to pay such
Ground Rent at least ten (10) Business Days prior to the date due (said amount,
together with the Initial Ground Lease Escrow Deposit or the Subsequent Ground
Lease Escrow Deposit, as applicable, and the proceeds of any Letter of Credit
delivered pursuant to this Section 7.4, collectively, the “Ground Lease Escrow
Fund”). During any period in which Ground Rent is being escrowed on a monthly
basis pursuant to this Section 7.4, Lender will apply the Ground Lease Escrow
Fund to payments of the Ground Rent. Upon a Cash Sweep Cure, Borrower shall
deposit with Lender in cash or cash equivalent (including a Letter of Credit) to
the extent necessary to achieve a balance in the Ground Lease Escrow Fund equal
to the Ground Rent which may be due during the month immediately following the
month in which monthly escrows are discontinued (the amount then remaining in
the Ground Lease Escrow Fund after giving effect to such deposit, the
“Subsequent Ground Lease Escrow Deposit”). If the amount of the Ground Lease
Escrow Fund (excluding the Initial Ground Lease Escrow Deposit or the Subsequent
Ground Lease Escrow Deposit, as applicable) shall exceed the amounts due for
Ground Rent, Lender shall, at the option of Borrower, return any excess to
Borrower or credit such excess against future payments to be made to the Ground
Lease Escrow Fund. Any amount remaining in the Ground Lease Escrow Fund after
the Debt has been paid in full or the Individual Property subject to the Ground
Lease has been released shall be returned to Borrower. In allocating such
excess, Lender may deal with the Person shown on the records of Lender to be the
owner of the applicable Individual Property. If at any time during a Cash Sweep
Period, Lender reasonably determines that the Ground Lease Escrow Fund
(excluding the Initial Ground Lease Escrow Deposit or the Subsequent Ground
Lease Escrow Deposit, as applicable) is not, or will not be, sufficient to pay
the Ground Rent by the date set forth in the first sentence of this Section 7.4,
Lender shall notify Borrower of such determination and Borrower shall increase
its monthly payment (or deliver a Letter of Credit in the amount of such
increase) by the amount that Lender estimates is sufficient to make up the
deficiency at least ten (10) Business Days prior to the due date of the Ground
Rent.

 

7.4.2 Waiver of Ground Lease Escrow Deposits. Borrower shall be relieved of its
obligation to make any deposits of the Ground Lease Escrow Funds under Section
7.4.1 above, provided that (a) Mortgage Borrower and Baltimore Owner are
required to and do make monthly deposits of the Ground Lease Escrow Funds (as
defined in the Mortgage Loan Agreement) under the Mortgage Loan and (b) upon
Lender’s request, receipt of evidence reasonably acceptable to it of the making
of such deposits and the payment of the Ground Rent under the Ground Lease.

 

Section 7.5. Reserve Funds, Generally. (a) Borrower grants to Lender a
first-priority perfected security interest in each of the Reserve Funds and any
and all monies now or hereafter deposited in each Reserve Fund as additional
security for payment of the Debt. Until expended or applied in accordance
herewith, the Reserve Funds shall constitute additional security for the Debt.
Upon the occurrence and during a continuance of an Event of Default,

 

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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 Reserve Funds to the
payment of the Debt in any order in its sole discretion. The Reserve Funds shall
not constitute trust funds and may be commingled with other monies held by
Lender.

 

(b) Borrower shall not, without obtaining the prior consent of Lender, further
pledge, assign or grant any security interest in any 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.

 

(c) The Reserve Funds shall be held in an Eligible Account and shall bear
interest at a money market rate reasonably selected by Lender. All interest or
other earnings on a Reserve Fund shall be added to and become a part of such
Reserve Fund and shall be disbursed in the same manner as other monies deposited
in such Reserve Fund. Borrower has the right to direct Lender to invest sums on
deposit in the Eligible Account in Permitted Investments, provided (i) such
investments are then regularly offered by Lender for accounts of this size,
category and type, (ii) such investments are permitted by applicable Legal
Requirements, (iii) the maturity date of the Permitted Investment is not later
than the date on which the applicable Reserve Fund is required for payment of an
obligation for which such Reserve Fund was created, and (iv) no Event of Default
shall have occurred and be continuing. Borrower shall be responsible for payment
of any federal, state or local income or other tax applicable to the interest or
income earned on the Reserve Funds. No other investments of the sums on deposit
in the Reserve Funds shall be permitted except as set forth in this Section 7.5.
Borrower shall bear all reasonable costs associated with the investment of the
sums in the account in Permitted Investments. Such costs shall be deducted from
the income or earnings on such investment, if any, and to the extent such income
or earnings shall not be sufficient to pay such costs, such costs shall be paid
by Borrower promptly on demand by Lender. Lender shall have no liability for the
rate of return earned or losses incurred on the investment of the sums in
Permitted Investments (it being understood and agreed that all risks relating
thereto shall be borne solely by Borrower), except for Lender’s or its agents or
employees’ gross negligence, bad faith, fraud, illegal acts or willful
misconduct.

 

(d) 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
Reserve Funds or the performance of the obligations for which the Reserve Funds
were established except if they arise from Lender’s or its agents’ or employees’
gross negligence, bad faith fraud, illegal acts or willful misconduct. Borrower
shall assign to Lender all rights and claims Borrower may have against all
Persons supplying labor, materials or other services which are to be paid from
or secured by the Reserve Funds; provided, however, that Lender may not pursue
any such right or claim unless an Event of Default has occurred and remains
uncured.

 

(e) (i) Each Letter of Credit delivered under this Agreement shall be additional
security for the payment of the Debt. Upon the occurrence and during the
continuance of an Event of Default, Lender shall have the right, at its option,
to draw on any Letter of Credit

 

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and to apply all or any part thereof to the payment of the items for which such
Letter of Credit was established or to apply each such Letter of Credit to
payment of the Debt in such order, proportion or priority as Lender may
determine. Lender’s right to draw on any Letter of Credit and apply the proceeds
thereof in accordance with this Section 7.5(e) shall be in addition to all other
rights and remedies provided to Lender under the Loan Documents.

 

(ii) In addition to any other right Lender may have to draw upon a Letter of
Credit pursuant to the terms and conditions of this Agreement, Lender shall have
the additional right to draw in full any Letter of Credit: (A) with respect to
any evergreen Letter of Credit, if Lender has received a notice from the issuing
bank that the Letter of Credit will not be renewed and a substitute Letter of
Credit or cash or other cash equivalent is not provided at least thirty (30)
days prior to the date on which the outstanding Letter of Credit is scheduled to
expire; (B) with respect to any Letter of Credit with a stated expiration date,
if Lender has not received a notice from the issuing bank that it has renewed
the Letter of Credit at least thirty (30) days prior to the date on which such
Letter of Credit is scheduled to expire and an extension of such Letter of
Credit or a substitute Letter of Credit or cash or other cash equivalent is not
provided at least thirty (30) days prior to the date on which the outstanding
Letter of Credit is scheduled to expire; (C) upon receipt of notice from the
issuing bank that the Letter of Credit will be terminated (except if the
termination of such Letter of Credit is permitted pursuant to the terms and
conditions of this Agreement or a substitute Letter of Credit is provided); or
(D) if Lender has received notice that the bank issuing the Letter of Credit
shall cease to be an Eligible Institution and within ten (10) Business Days
after Lender notifies Borrower in writing of such circumstance, Borrower shall
fail to deliver to Lender a substitute Letter of Credit or cash or other cash
equivalent issued by an Eligible Institution. Notwithstanding anything to the
contrary contained in the above, Lender is not obligated to draw any Letter of
Credit upon the happening of an event specified in (A), (B), (C) or (D) above
and shall not be liable for any losses sustained by Borrower due to the
insolvency of the bank issuing the Letter of Credit if Lender has not drawn the
Letter of Credit.

 

Section 7.6. Transfer of Reserve Funds under Mortgage Loan. If Mortgage Lender
waives any 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 repayment of the Loan) and Reserve
Funds that 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 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
property account agreements and cash management arrangements for the benefit of
Lender substantially similar to the arrangements entered into at the time of the
closing of the Mortgage Loan), and, if any letters of credit have been
substituted by Mortgage Borrower for any such reserves or escrows as may be
specifically permitted by the Mortgage Loan Agreement, then Borrower shall also
cause such letters of credit to be transferred (or replaced and delivered) to
Lender to be held by Lender upon the same terms and provisions as set forth in
the Mortgage Loan Agreement.

 

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In the event that a Minority Interest Property becomes a Non-Minority Property,
any Reserve Fund (or portion thereof) attributable to such Individual Property
shall thereafter be deemed to constitute a Reserve Fund (or portion thereof)
attributable to a Non-Minority Property.

 

  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 (A) any monthly installment of principal and/or interest due under the
Loan Documents or monthly deposit to the Ground Lease Escrow Fund, the
Replacement Reserve Fund or the Tax and Insurance Escrow Fund is not paid in
full on or before the date on which it is due, or (B) the payment due on the
Maturity Date is not paid when due;

 

(ii) if any of the Taxes or Other Charges are not paid when the same are due and
payable, subject to the provisions of Section 5.1.2 hereof;

 

(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 if and as
required pursuant to the provisions hereof;

 

(iv) if any Transfer occurs in violation of the provisions of this Agreement or
the Pledge Agreement;

 

(v) if any representation or warranty made by Borrower herein or in any other
Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made; provided, however, that if such Individual Borrower did not have
actual knowledge at the time of representation or warranty that such
representation or warranty was false or misleading in any material respect and
the same is susceptible of being cured, the same shall be an Event of Default
hereunder only if the same is not cured within thirty (30) days after written
notice to Borrower from Lender;

 

(vi) if Borrower, any Mortgage Borrower, Baltimore Owner, any Mortgage Principal
or Guarantor shall make an assignment for the benefit of creditors;

 

(vii) if a receiver, liquidator or trustee shall be appointed for Borrower,
Baltimore Owner, any Mortgage Borrower, any Mortgage Principal or Guarantor, or
if Borrower, Baltimore Owner, Mortgage Borrower, any Mortgage Principal or
Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower, Baltimore Owner, any Mortgage Borrower, any Mortgage
Principal or any Guarantor, or if any proceeding for the dissolution or
liquidation of Borrower, Baltimore Owner, any Mortgage Borrower, any Mortgage
Principal or Guarantor shall be instituted, or if any

 

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petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by,
consented to, or acquiesced in by an Affiliate of Borrower with respect to any
such proceeding against Borrower, Baltimore Owner, any Senior Mezzanine
Borrower, any Mortgage Borrower, any Mortgage Principal or any Guarantor;
provided, however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by such Individual Borrower, Guarantor,
Baltimore Owner, Mortgage Borrower or Mortgage Principal or an Affiliate of any
of the foregoing, upon the same not being discharged, stayed or dismissed within
sixty (60) days;

 

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

 

(ix) if Borrower breaches any covenant contained in Section 4.1.30 hereof
provided, however, such violation or breach shall not constitute an Event of
Default in the event that (1) such violation or breach is not knowing and
intentional, (2) such violation or breach is immaterial, (3) such violation or
breach shall be remedied within a timely manner and (4) within fifteen (15)
Business Days of the request of Lender, Borrower delivers to Lender an
Additional Insolvency Opinion, or a modification of the Insolvency Opinion, to
the effect that such breach or violation shall not change the opinions rendered
in the Insolvency Opinion, which opinion or modification and any counsel
delivering such opinion or modification shall be acceptable to Lender in its
reasonable discretion;

 

(x) with respect to any term, covenant or provision set forth herein or in any
Loan Document which specifically contains a notice requirement or grace period,
if Borrower shall be in default under such term, covenant or condition after the
giving of such notice or the expiration of such grace period;

 

(xi) 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;

 

(xii) if a material default has occurred and continues beyond any applicable
notice and cure period under any Management Agreement (or any Replacement
Management Agreement) and if such default permits Manager (or Qualified
Franchisor) to terminate or cancel such Management Agreement (or such
Replacement Management Agreement);

 

(xiii) if a material default has occurred and continues beyond any applicable
notice and cure period under any Franchise Agreement (including any Replacement
Franchise Agreement, as applicable) and if such default permits Franchisor
(including any Qualified Franchisor, as applicable) to terminate or cancel such
Franchise Agreement (including any Replacement Franchise Agreement, as
applicable);

 

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(xiv) if any Mortgage Borrower or Baltimore Owner ceases to do business as a
hotel or resort at its Individual Property or terminates such business for any
reason whatsoever (other than temporary cessation in connection with a
Restoration of such Individual Property following a Casualty or Condemnation or
due to an event or cause described in the definition of the term “Unavoidable
Delay”);

 

(xv) If (A) a breach or default by El Con Mortgage Borrower in any material
respect under any condition or obligation contained in the Ground Lease is not
cured within any applicable cure period provided therein, (B) there occurs any
event or condition that gives Ground Lessor a right to terminate or cancel the
Ground Lease, (C) the leasehold estate of El Con Mortgage Borrower under the
Ground Lease 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 material 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 except as may be expressly permitted hereunder;

 

(xvi) if Borrower fails to comply with the covenants as to Prescribed Laws set
forth in Section 5.1.1 hereof;

 

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

 

(xviii) if any other event shall occur or condition shall exist, if the effect
of such event or condition is to accelerate the maturity of any portion of the
Debt or to permit Lender to accelerate the maturity of all or any portion of the
Debt under this Agreement or any other Loan Document.

 

(xix) if the Liens created pursuant to any Loan Document (other than the Lien
granted to Lender in the Cash Management Agreement or Accounts thereunder) shall
cease to be a fully perfected enforceable Lien of the priority required by the
Loan Documents in the Collateral or any portion of the Collateral is Transferred
without Lender’s prior written consent except as expressly permitted herein;

 

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

 

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(xxi) a Mortgage Loan Default shall occur.

 

(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 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 any or all of the Collateral and may
exercise all the rights and remedies of a secured party under the Uniform
Commercial Code against Borrower and any or all of the Collateral, 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 all other obligations of Borrower hereunder and under the other Loan
Documents shall immediately and automatically become due and payable, without
notice or demand, and Borrower hereby expressly waives any such notice or
demand, anything contained herein or in any other Loan Document to the contrary
notwithstanding.

 

(c) If an Event of Default occurs, an Individual Borrower owing an indirect
interest in a Minority Interest Property may obtain a release of the Collateral
pledged by such Individual Borrower Interest notwithstanding the existence or
continuance of such Event of Default by payment only of the Debt attributable to
such Individual Borrower due and payable at the time of such payment, subject to
compliance with the terms set forth in Section 2.4.3 and clauses (b), (d) and
(f) of Section 2.5.1. If Borrower exercises this right in accordance with the
terms and provisions contained herein, such Event of Default shall be cured as a
result of Borrower’s exercise of the release only with respect to such
Individual Borrower and the Collateral pledged by such Individual Borrower.

 

Section 8.2. Remedies. (a) Upon the occurrence and during the continuance of an
Event of Default, all or any one or more of the rights, powers, privileges and
other remedies available to Lender against Borrower under this Agreement or any
of the other Loan Documents executed and delivered by, or applicable to,
Borrower or at law or in equity may be exercised by Lender at any time and from
time to time, whether or not all or any of the Debt shall be declared due and
payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to any or all 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 to the extent Borrower may lawfully do so under Applicable Law,
Borrower 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 and the Collateral has been foreclosed upon, sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid in
full.

 

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(b) With respect to Borrower 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 upon 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 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 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 Collateral as Lender may elect. Notwithstanding one or
more partial foreclosures, the Collateral shall remain subject to the Pledge
Agreement to secure payment of sums secured by the Pledge Agreement and the
other Loan Documents and not previously recovered.

 

(c) Upon the occurrence and during the continuation of an Event of Default,
Lender shall have the right from time to time to sever the Note and the other
Loan Documents into one or more separate notes, 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 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 reasonably request in order
to effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall lawfully do by virtue thereof; provided, however, Lender
shall not make or execute any such documents under such power until three (3)
Business Days after written notice has been given to Borrower by Lender of
Lender’s intent to exercise its rights under such power. Borrower shall not be
obligated to pay any costs or expenses (other than its own attorneys fees)
incurred in connection with the preparation, execution, recording or filing of
the Severed Loan Documents, and (ii) the Severed Loan Documents shall not
contain any representations, warranties or covenants not contained in the Loan
Documents and any such representations and warranties contained in the Severed
Loan Documents will be given by Borrower only as of the Closing Date.

 

(d) Remedies Cumulative; Waivers. Upon the occurrence and during the
continuation of an Event of Default, the rights, powers and remedies of Lender
under this Agreement shall be cumulative and not exclusive of any other right,
power or remedy which Lender may have against Borrower pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or
otherwise. Lender’s rights, powers and remedies may be pursued 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

 

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waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.

 

(e) Upon the occurrence and during the continuation of an Event of Default,
Lender may, but without any obligation to do so and without notice to or demand
on Borrower and without releasing Borrower from any obligation hereunder or
being deemed to have cured any Event of Default hereunder, make, do or perform
any obligation of Borrower hereunder in such manner and to such extent as Lender
may deem necessary. All such costs and expenses incurred by Lender in remedying
such 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 until 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. Upon the occurrence
and during the continuance of a Mortgage Loan Default, Lender may, but without
any obligation to do so and without notice to or demand on Borrower or Mortgage
Borrower and without releasing Mortgage Borrower from any obligation under the
Mortgage Loan Documents or being deemed to have cured any Mortgage Loan Default,
make, do or perform any obligation of Mortgage Borrower under 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
Default or such failed payment or act shall bear interest at the Default Rate,
for the period after such cost or expense was incurred into the date of payment
to Lender. All such costs and expenses incurred by Lender together with interest
thereon calculated at the Default Rate shall be deemed to constitute a portion
of the Debt and be secured by the liens, claims and security interests provided
to Lender under the Loan Documents and shall be immediately due and payable upon
demand by Lender therefor. 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.

 

  IX. SPECIAL PROVISIONS

 

Section 9.1. Sale of Notes and Securitization.

 

9.1.1 General. Borrower acknowledges and agrees that the Lender may sell, pledge
or assign in one or more transactions, all or any portion of the Loan and the
Loan Documents, or issue one or more participations therein, or consummate one
or more private securitizations of rated single- or multi-class securities (the
“Securities”) secured by or evidencing ownership interests in all or any portion
of the Loan and the Loan Documents or a pool of assets that include the Loan and
the Loan Documents (such sales, pledges, assignments, participations and/or
securitizations, collectively, a “Securitization”). At the request of Lender,
and to the extent not already required to be provided by or on behalf of
Borrower under this Agreement, Borrower shall use reasonable efforts to assist
Lender in such Securitization and to provide information not in the possession
of Lender or which may be reasonably required by

 

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Lender in order to satisfy the market standards to which Lender customarily
adheres or which may be reasonably required by prospective investors, financing
sources and/or the Rating Agencies in connection with any such Securitization
including, without limitation, to:

 

(a) provide or cause Mortgage Borrower or Baltimore Owner to provide additional
and/or updated Provided Information to the extent available to Borrower or
within its commercially reasonable control to deliver;

 

(b) assist in preparing descriptive materials for presentations to any or all of
the Rating Agencies, prospective investors and/or financing sources and work
with, third-party service providers engaged to obtain, collect, and deliver
information reasonably requested or reasonably required by Lender, prospective
investors or the Rating Agencies;

 

(c) deliver (i) updated opinions of counsel as to non-consolidation, due
execution and enforceability with respect to the Properties, the Collateral,
Borrower, Baltimore Owner, Mortgage Borrower, Mortgage Principal, Guarantor and
their respective Affiliates and the Loan Documents, and (ii) revised
organizational documents for Borrower, which counsel opinions and organizational
documents shall be reasonably satisfactory to Lender, and the Rating Agencies;

 

(d) use commercially reasonable efforts to deliver, or cause to be delivered,
such additional tenant estoppel letters, subordination agreements or other
agreements from parties to agreements that affect the Properties, which estoppel
letters, subordination agreements or other agreements shall be reasonably
satisfactory to Lender, and the Rating Agencies;

 

(e) make such representations and warranties as of the Closing Date of the
Securitization with respect to the Properties, the Collateral, Borrower,
Mortgage Borrower, Mortgage Principal, Baltimore Owner and Guarantor including
the representations and warranties made in the Loan Documents, the other
Mezzanine Loan Documents and the Mortgage Loan Documents as may be reasonably
requested by Lender, or the Rating Agencies and consistent with the facts
covered by such representations and warranties as they exist on the date
thereof;

 

(f) if requested by Lender, review any information regarding the Properties, the
Collateral, Borrower, Mortgage Borrower, Baltimore Owner, Mortgage Principal,
Guarantor, Manager, Franchisor, the Loan, any other Mezzanine Loan and the
Mortgage Loan which is contained in a preliminary or final private placement
memorandum, (including any amendment or supplement to either thereof), or other
disclosure document to be used by Lender or any affiliate thereof; and

 

(g) supply to Lender such documentation, financial statements and reports in
form and substance required in order to comply with any securities laws
applicable to a private offering of securities to the extent available to
Borrower.

 

9.1.2 Loan Components. Borrower covenants and agrees that in connection with any
Securitization of the Loan or the Mortgage Loan, upon Lender’s request Borrower
shall deliver one or more new component notes to replace the original note or
modify the original note to reflect multiple components of the Loan or the
Mortgage Loan (and such new notes or

 

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modified note shall have the same weighted average spread as the original note,
but the weighted average spread may subsequently change due to involuntary
prepayments or if an Event of Default shall occur), and modify the Cash
Management Agreement and/or resize the Interest Rate Cap Agreement with respect
to the newly created components such that the pricing and marketability of the
Securities and the size of each class of Securities and the rating assigned to
each such class by the Rating Agencies shall provide the most favorable rating
levels and achieve the optimum bond execution for the Loan.

 

9.1.3 Mezzanine Loans. Notwithstanding the provisions of Section 9.1 to the
contrary, Borrower covenants and agrees that after the Closing Date and prior to
a Securitization, Lender (with the consent of Mortgage Lender, Mezzanine B
Lender and Mezzanine C Lender) shall have the right to create one or more
additional mezzanine loans (each, a “New Mezzanine Loan”), to establish
different interest rates and to reallocate the principal balances (including,
without limitation, the reallocation of the Release Amounts on a pro rata basis)
of each of the Loan, the Mortgage Loan, the Mezzanine B Loan, the Mezzanine C
Loan and any New Mezzanine Loan amongst each other and to require the payment of
the Loan, the Mortgage Loan, the Mezzanine B Loan, the Mezzanine C Loan and any
New Mezzanine Loan in such order of priority as may be designated by Lender;
provided, that in no event shall the weighted average spread of the Loan, the
Mortgage Loan, the Mezzanine B Loan, the Mezzanine C Loan and any New Mezzanine
Loan(s) following any such reallocation or modification change from the weighted
average spread for all in effect immediately preceding such reallocation,
modification or creation of any New Mezzanine Loan(s) (but the weighted average
spread may subsequently change due to involuntary prepayments or if an Event of
Default shall occur), Borrower shall execute and deliver such documents as shall
reasonably be required by Lender as promptly as possible under the circumstances
in connection with this Section 9.1.3, all in form and substance reasonably
satisfactory to Lender and the Rating Agencies, including, without limitation,
in connection with the creation of any New Mezzanine Loan, a promissory note and
loan documents necessary to evidence such New Mezzanine Loan, and Borrower shall
execute such amendments to the Loan Documents and the Mezzanine Loan Documents
as are necessary in connection with the creation of such New Mezzanine Loan. In
addition, Borrower shall cause the formation of one or more special purpose,
bankruptcy remote entities as required by Lender in order to serve as the
borrower under any New Mezzanine Loan (each, a “New Mezzanine Borrower”) and the
applicable organizational documents of Borrower, Mortgage Borrower, Mezzanine B
Borrower and Mezzanine C Borrower, shall be amended and modified as reasonably
necessary or required in the formation of any New Mezzanine Borrower. Further,
in connection with any New Mezzanine Loan, Borrower shall deliver to Lender
opinions of legal counsel with respect to due execution, authority and
enforceability of the New Mezzanine Loan and the Loan Documents and the Mortgage
Loan, the Mezzanine B Loan and the Mezzanine C Loan, as so amended and an
Additional Insolvency Opinion for the Loan, the Mortgage Loan, the Mezzanine B
Loan and the Mezzanine C Loan and a substantive non-consolidation opinion with
respect to any New Mezzanine Loan, each as reasonably acceptable to Lender,
prospective investors and/or the Rating Agencies, but subject to substantially
the same qualifications and exclusions as contained in the opinions delivered in
connection with the closing of the Loan.

 

9.1.4 Lender shall pay all reasonable and customary costs in connection with
complying with Sections 9.1.1, 9.1.2 and 9.1.3, except as set forth in Section
10.13(c) hereof with respect to the Rating Agency review of the initial
successful Securitization of the Loan and

 

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except that Borrower shall pay the fees of legal counsel employed by Borrower,
Mortgage Borrower, Baltimore Owner, Mortgage Principal, Guarantor and/or any of
their Affiliates, in connection with any modifications to the Loan, the Mortgage
Loan, the Mezzanine B Loan and the Mezzanine C Loan or the execution of new Loan
Documents, Mortgage Loan Documents, Mezzanine B Loan and Mezzanine C Loan
Documents or review of opinions, documents, agreements or similar items which
are delivered by Borrower, Mortgage Borrower, Baltimore Owner, Mortgage
Principal, Guarantor and/or any of their Affiliates in connection with complying
with Section 9.1.1, 9.1.2 or 9.1.3. The limitation on costs and expenses set
forth in the foregoing sentence shall in no way affect Borrower’s obligation to
comply with such sections.

 

9.1.5 Notwithstanding anything in Section 9.1 to the contrary, Borrower shall
not be required to modify or amend any organizational document or Loan Document
if such modification or amendment would (i) cause a change in the Maturity Date
or the monthly amortization payments, (ii) cause the aggregate scheduled
amortization payments to exceed the monthly scheduled amortization payments, or
(iii) modify or amend any other material economic or material non-economic term
of the organizational documents or Loan Documents in a manner adverse to
Borrower or any of its Affiliates.

 

Section 9.2. Securitization Indemnification. (a) Borrower understands that
certain of the Provided Information may be included in Disclosure Documents in
connection with the Securitization or the Securities and Exchange Act of 1934,
as amended (the “Exchange Act”), or provided or made available to investors or
prospective investors in the Securities, the Rating Agencies, and service
providers relating to the Securitization. In the event that the Disclosure
Document is required to be revised prior to the sale of all Securities, Borrower
will cooperate with the holder of the Note in updating the Disclosure Document
by providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.

 

(b) The Indemnifying Persons agree to provide, in connection with the
Securitization, an indemnification agreement (i) certifying that (A) the
Indemnifying Persons have carefully examined the Disclosure Documents,
including, without limitation, the sections entitled “Risk Factors,” “Special
Considerations,” “Description of the Collateral,” “Description of the Mezzanine
Loans,” “The Manager,” “The Borrower” and “Certain Legal Aspects of the
Mezzanine Loan,” and (B) such sections and such other information in the
Disclosure Documents (to the extent such information relates to or includes any
Provided Information or any information regarding the Collateral, the
Properties, Borrower, Baltimore Owner, Guarantor, Mortgage Principal, Mortgage
Borrower, Manager, the Loan, any other Mezzanine Loan and/or the Mortgage Loan)
(collectively with the Provided Information, the “Covered Disclosure
Information”) do not (and with respect to any portion of the Disclosure
Documents prepared in reliance on the reports of third parties, to the best of
their knowledge do not) contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading, (ii)
jointly and severally indemnifying Lender, any Affiliate of Lender that has
acted as the sponsor or depositor in connection with the Securitization, any
Affiliate of Lender that acts as a placement agent or initial purchaser of
Securities issued in the Securitization, any other co-placement agents or
co-initial purchasers of Securities issued in the Securitization, and

 

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each of their respective officers, directors, partners, employees,
representatives, agents and Affiliates and each Person or entity who Controls
any such Person within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively, the “Indemnified Persons”), for
any losses, claims, damages, liabilities, costs or expenses (including, without
limitation, legal fees and expenses for enforcement of these obligations
(collectively, the “Liabilities”) to which any such Indemnified Person may
become subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Covered Disclosure Information or arise out of or are based upon the
omission or alleged omission to state in the Covered Disclosure Information a
material fact required to be stated therein or necessary in order to make the
statements in the Covered Disclosure Information, in light of the circumstances
under which they were made, not misleading (other than a statement or omission
based upon the reports of third parties that do not to the Indemnified Persons
knowledge contain any untrue statement or omission of a material fact necessary
in order to make the statements made, in light of the circumstances under which
they were made, not misleading) provided, however, that Indemnified Persons will
be liable in any case above but only to the extent that such Liabilities arise
out of or are based upon any such untrue statement or omission made thereon in
reliance upon and in conformity with information furnished to Lender by or on
behalf of Borrower and its Affiliates in connection with the preparation of the
Disclosure Documents or in connection with the Securitization, including,
without limitation, financial statements of Borrower or its Affiliates,
operating statements, rent rolls, environmental site assessment reports and
property condition reports with respect to the Properties (other than third
party reports which to the Borrower’s knowledge do not contain any untrue
statement or omission of a material fact necessary in order to make the
statement made, in light of the circumstances under which they were made, not
misleading) but excluding any projections made in good faith by Borrower or its
Affiliates; and provided that this Section shall not apply to any Liabilities to
the extent arising out of any untrue statement, misstatement or omission or
alleged untrue statement, misstatement or omission made in reliance upon and in
connection with the written information furnished to Borrower or its Affiliates
by Lender or any Indemnified Person expressly for use in the Disclosure
Documents unless Borrower, or Guarantor fails to correct any such untrue
statement, misstatement or omission with respect to Borrower, Guarantor or their
Affiliates that is known to Borrower or Guarantor or that, with the exercise of
customary reasonable efforts, should be known to Borrower or Guarantor and (iii)
agreeing to reimburse each Indemnified Person for any legal or other
out-of-pocket expenses reasonably incurred by such Indemnified Person, as they
are incurred, in connection with investigating or defending the Liabilities. The
foregoing indemnity with respect to any untrue statement or misstatement
contained in, or omission from, Disclosure Documents shall not inure to the
benefit of any Indemnified Person if Borrower or its Affiliates shall sustain
the burden of proving that any such loss, liability, claim, damager or expense
resulted from the fact that a Person was not provided with a copy of the final
Disclosure Documents at or prior to the written confirmation of the sale of such
securities to such Person and the loss, liability, claim, damage or expense
resulted from an untrue statement or misstatement contained in, or omission
from, the preliminary Disclosure Documents that were corrected in the final
Disclosure Documents. This indemnity agreement will be in addition to any
liability which Borrower may otherwise have. Moreover, the indemnification
provided for in clauses (ii) and (iii) above shall be effective whether or not
an indemnification agreement described in clause (i) above is provided.

 

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(c) Intentionally Omitted.

 

(d) Promptly after receipt by an Indemnified Person of notice of any claim or
the commencement of any action, the Indemnified Person shall, if a claim in
respect thereof is to be made against any Indemnifying Person, notify such
Indemnifying Person in writing of the claim or the commencement of that action;
provided, however, that the failure to notify such Indemnifying Person shall not
relieve it from any liability which it may have under the indemnification
provisions of this Section 9.2 except to the extent that it has been materially
prejudiced by such failure and, provided, further that the failure to notify
such Indemnifying Person shall not relieve it from any liability which it may
have to an Indemnified Person otherwise than under the provisions of this
Section 9.2. If any such claim or action shall be brought against an Indemnified
Person, and it shall notify any Indemnifying Person thereof, such Indemnifying
Person shall be entitled to participate therein and, to the extent that it
wishes, assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Person. After notice from any Indemnifying Person to the Indemnified
Person of its election to assume the defense of such claim or action, such
Indemnifying Person shall not be liable to the Indemnified Person for any legal
or other expenses subsequently incurred by the Indemnified Person in connection
with the defense thereof except as provided in the following sentence; provided,
however, if the defendants in any such action include both an Indemnifying
Person, on the one hand, and one or more Indemnified Persons on the other hand,
and an Indemnified Person shall have reasonably concluded that there are any
legal defenses available to it and/or other Indemnified Persons that are
different or in addition to those available to the Indemnifying Person, the
Indemnified Person or Persons shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such Indemnified Person or Persons. The Indemnified Person
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such counsel
shall be the expense of such Indemnified Person unless: (i) the employment
thereof has been specifically authorized by Borrower in writing; or (ii) in such
claims or action there is, in the reasonable opinion of independent counsel, a
conflict concerning any material issue between the position of Borrower and such
Indemnified Person in which case if such Indemnified Person notifies Borrower in
writing that it elects to employ separate counsel at the expense of Indemnifying
Persons, then such counsel shall have the right to assume the defense of such
action on behalf of such Indemnified Person; provided, however, that unless, in
the reasonable opinion of independent counsel, an actual or potential conflict
exists between tow or more Indemnified Persons, Borrower shall not be required
to pay the fees and disbursements of more than one separate counsel for all
Indemnified Persons. Nothing set forth herein is intended to or shall impair the
right of any Indemnified Person to retain separate counsel at its own expense.
The Indemnified Person shall instruct its counsel to maintain reasonably
detailed billing records for fees and disbursements for which such Indemnified
Person is seeking reimbursement hereunder and shall submit copies of such
detailed billing records to substantiate that such counsel’s fees and
disbursements are reasonable and solely related to the defense of a claim for
which the Indemnifying Person is required hereunder to indemnify such
Indemnified Person. No Indemnifying Person shall be liable for the expenses of
more than one (1) such separate counsel unless such Indemnified Person shall
have reasonably concluded that there may be legal defenses available to it that
are different from or additional to those available to another Indemnified
Person.

 

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(e) Without the prior consent of Lender (which consent shall not be unreasonably
withheld, conditioned or delayed), no Indemnifying Person shall settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such claim, action, suit or proceeding) unless the
Indemnifying Person shall have given Lender reasonable prior notice thereof and
shall have obtained an unconditional release of each Indemnified Person
hereunder from all liability arising out of such claim, action, suit or
proceedings. As long as an Indemnifying Person has complied with its obligations
to defend and indemnify hereunder, such Indemnifying Person shall not be liable
for any settlement made by any Indemnified Person without the consent of such
Indemnifying Person (which consent shall not be unreasonably withheld,
conditioned or delayed).

 

(f) The Indemnifying Persons agree that if any indemnification or reimbursement
sought pursuant to this Section 9.2 is finally judicially determined to be
unenforceable by any Indemnified Person harmless (with respect only to the
Liabilities that are the subject of and which would otherwise be indemnifiable
under this Section 9.2), then the Indemnifying Persons, on the one hand, and
such Indemnified Person, on the other hand, shall contribute to the Liabilities
for which such indemnification or reimbursement is held unenforceable: (x) in
such proportion as is appropriate to reflect the relative benefits to the
Indemnifying Persons, on the one hand, and such Indemnified Person, on the other
hand, from the transactions to which such indemnification or reimbursement
relates; or (y) if the allocation provided by clause (x) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (x) but also the relative faults of the
Indemnifying Persons, on the one hand, and all Indemnified Persons, on the other
hand, as well as any other equitable considerations. Notwithstanding the
provisions of this Section 9.2, (A) no party found liable for a fraudulent
misrepresentation shall be entitled to contribution from any other party who is
not also found liable for such fraudulent misrepresentation, and (B) the
Indemnifying Persons agree that in no event shall the amount to be contributed
by the Indemnified Persons collectively pursuant to this paragraph exceed the
amount of the fees (by underwriting discount or otherwise) actually received by
the Indemnified Persons in connection with the closing of the Loan or the
Securitization.

 

(g) The Indemnifying Persons agree that the indemnification, contribution and
reimbursement obligations set forth in this Section 9.2 shall apply whether or
not any Indemnified Person is a formal party to any lawsuits, claims or other
proceedings. The Indemnifying Persons further agree that the Indemnified Persons
are intended third party beneficiaries under this Section 9.2.

 

(h) The liabilities and obligations of the Indemnified Persons and the
Indemnifying Persons under this Section 9.2 shall survive the termination of
this Agreement and the satisfaction and discharge of the Debt.

 

(i) Notwithstanding anything to the contrary contained herein, Borrower shall
have no obligation to act as depositor with respect to the Loan or an issuer or
registrant with respect to the Securities issued in any Securitization. Any
Securitization shall be effectuated only by private offerings which are exempt
from registration under the Securities Act of 1933.

 

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Section 9.3. Intentionally Omitted.

 

Section 9.4. Exculpation.

 

(a) Except as otherwise provided herein, Lender shall not enforce the liability
and obligation of Borrower to perform and observe the representations warranties
and 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 Borrower, except that Lender may bring a foreclosure
action, action for specific performance or other appropriate action or
proceeding to enable Lender to enforce and realize upon its interest in the
Note, this Agreement, the Pledge Agreement, the other Loan Documents, and the
interest in the Collateral and any other collateral given to Lender pursuant to
the Note, this Agreement, the Pledge Agreement or the other Loan Documents;
provided, however, that any judgment in any such action or proceeding shall be
enforceable against Borrower only to the extent of Borrower’s interest in the
Collateral, the Rent and any other collateral given to Lender. In no event shall
any Related Party have any personal liability for the payment of the
indebtedness or any other sums due hereunder, under the Note, the Pledge
Agreement or the other Loan Documents, or for the performance or observance of
any other obligation of Borrower other than pursuant to a written instrument
executed by such Related Party specifically providing for such liability.
Lender, by accepting the Note, this Agreement and the Pledge Agreement, agrees
that it shall not, except as otherwise provided herein sue for, seek or demand
any deficiency judgment against Borrower and/or any Related 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 9.4 shall not, however, (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by the Note, this
Agreement, the Pledge or the other Loan Documents; (ii) impair the right of
Lender to name Borrower as a party defendant in any action or suit for judicial
foreclosure and sale under the Pledge Agreement or any other Loan Document;
(iii) affect the validity or enforceability of any indemnity (including, without
limitation, the Environmental Indemnity), guaranty, master lease or similar
instrument made in connection with the Note, this Agreement, the Mortgages or
the other Loan Documents, (iv) impair the right of Lender to obtain the
appointment of a receiver; (v) impair the right of Lender to enforce the
provisions of Sections 4.1.9, 4.1.29, 5.1.10 and 5.2.9 of this Agreement; or
(vii) impair the right of Lender to obtain a deficiency judgment or other
judgment on the Note against Borrower if necessary to preserve or enforce its
rights and remedies against any collateral given to Lender pursuant to the Loan
Documents, including any Awards or Insurance Proceeds to which Lender would
otherwise be entitled under this Agreement or the other Loan Documents;
provided, however, Lender shall only enforce such judgment against such
collateral, including the Awards and/or Insurance Proceeds, as applicable.

 

(b) Notwithstanding the provisions of this Section 9.4 to the contrary, Borrower
shall be personally liable to Lender for the direct, actual losses, damages,
costs, expenses, liabilities, claims or other obligations incurred by Lender
(collectively, “Losses”) due to: (i) fraud or intentional misrepresentation by
Mortgage Borrower, Mortgage Principal, any Individual Borrower or Baltimore
Owner or any other person or entity in connection with the execution and the
delivery of the Note, this Agreement, the Pledge Agreement or the other Loan
Documents; (ii) any intentional misapplication or misappropriation of Rents
received by any Individual Borrower, Mortgage Borrower, Mortgage Principal or
Baltimore Owner after the

 

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occurrence of an Event of Default; (iii) any intentional misapplication or
misappropriation by any Individual Borrower, Baltimore Owner, Mortgage Borrower
or Mortgage Principal of tenant security deposits or Rents collected more than
one (1) month in advance; (iv) the intentional misapplication or the
misappropriation of any Awards or Insurance Proceeds or any Net Liquidation
Proceeds After Debt Service; (v) any failure to pay Taxes, Ground Rent, Other
Charges, charges for labor or materials or other charges that can create liens
on any of the Properties (except to the extent that sums sufficient to pay such
amounts have been deposited in the Cash Management Account and/or are otherwise
in escrow with Lender or Mortgage Lender pursuant to the terms of this Agreement
or the Mortgage Loan Agreement) but only to the extent that the Net Operating
Income from the Properties available to Individual Borrower, Mortgage Borrower
or Baltimore Owner was sufficient to permit Individual Borrower, Mortgage
Borrower or Baltimore Owner to pay the same when due; (vi) any failure by
Borrower, Mortgage Borrower, Mortgage Principal or Baltimore Owner to return or
to reimburse Lender for all Personal Property taken from any of the Properties
by or on behalf of Borrower, Mortgage Borrower, Mortgage Principal or Baltimore
Owner after the occurrence of an Event of Default and in violation of the terms
of this Agreement and the other Loan Documents and not replaced with Personal
Property of the same utility and of the same or greater value; (vii) any act of
actual intentional waste or arson by any Individual Borrower, Mortgage Borrower,
Mortgage Principal, Baltimore Owner or any affiliate, general partner, managing
member or principal thereof or by Guarantor that is not attributable to a lack
of sufficient Net Operating Income from the Properties available to Borrower,
Mortgage Borrower, Mortgage Principal or Baltimore Owner to perform all of
Borrower’s, Mortgage Borrower’s, Mortgage Principal’s, Baltimore Owner’s or such
affiliate’s, general partner’s, managing member’s, principal’s, or Guarantor’s
obligations under the Loan Documents or the Mortgage Loan Documents, as
applicable; (viii) any fees or commissions paid by any Individual Borrower,
Mortgage Borrower, Mortgage Principal or Baltimore Owner to affiliate, general
partner, managing member or principal thereof or Guarantor in violation of the
terms of the Loan Documents or the Mortgage Loan Documents, as applicable; (ix)
the breach by Borrower, Mortgage Borrower or Baltimore Owner or, if applicable,
Guarantor of any representation, warranty, covenant or indemnification provision
in the Environmental Indemnity or of any environmental representation, warranty,
covenant or indemnification provision in any Mortgage; or (x) if any Individual
Property, the Collateral or any part thereof shall become an asset in any
involuntary bankruptcy or insolvency proceeding commenced by any Person (other
than Lender) and Borrower, Mortgage Borrower, Mortgage Principal or Baltimore
Owner, as applicable, fails to use its commercially reasonable efforts to obtain
or cause to be obtained a dismissal of such proceedings.

 

(c) Notwithstanding the foregoing, the agreement of Lender not to pursue
recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND
VOID and shall be of no further force and effect as to Borrower (but not to any
Person other than pursuant to a written instrument executed by such other Person
specifically providing for such liability) (i) in the event of any Borrower’s
willful default to provide any financial statement, report or information under
Section 5.1.11(b), (c), (d) and (f) hereof, but a failure to provide such
financial statements, reports and information shall not be deemed willful if
such failure is the result of good faith error and is cured within ten (10)
Business Days after written notice is delivered to Borrower; provided, however,
that if (A) Borrower is prevented by an unaffiliated third party from delivering
such information and (B) Borrower uses reasonable efforts (including the
reasonable expenditure of money) to obtain such financial statements, report and
information,

 

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then such failure shall not be deemed willful so long as Borrower continuously
endeavors in good faith to obtain the required financial statements, reports and
information and delivers same to Lender as soon as it becomes available to
Borrower, (ii) in the event of a default under Section 4.1.30 or 4.1.38 of this
Agreement such that either (A) such failure was considered by a court as a
factor in the court’s finding for a consolidation of the assets of any
Individual Borrower with the assets of another person or entity or (B) as a
result thereof, Lender suffers any material Losses (including reasonable
attorneys’ fees and disbursements, whether or not litigation has commenced);
provided, however, that in the absence of an actual consolidation, recourse may
be had against Borrower only to the extent of Losses for its failure to comply
with the provisions of Section 4.1.30 or 4.1.38 of this Agreement or (iii) in
the event of a default under Section 5.2.10 of this Agreement or Article 5 of
the Pledge; provided, however, if an agent or employee of any Individual
Borrower, Mortgage Borrower, Mortgage Principal or Baltimore Owner or the
manager of any Individual Property enters into an Equipment lease or Equipment
financing in violation of any Mortgage and without express authorization from an
executive officer of such Individual Borrower, Mortgage Borrower, Mortgage
Principal, Baltimore Owner or Guarantor, then such violation for purposes of
this clause (iii) shall not result in a nullification of Section 9.4(a) hereof
(but Borrower shall be liable for all Losses related to such violation) so long
as such Equipment lease or Equipment financing is terminated and released to
Lender’s reasonable satisfaction within ten (10) Business Days of the earlier of
(A) Lender’s written notice to Borrower of such violation or (B) the date that
any executive officer of any Individual Borrower, Mortgage Borrower, Mortgage
Principal, Baltimore Owner or Guarantor actually becomes aware of such
violation; (iv) if the first full payment of monthly Debt Service is not paid
when due or (v) in the event any Individual Property, the Collateral or any part
thereof shall become an asset in (A) the filing by any Individual Borrower,
Mortgage Borrower, Mortgage Principal, Baltimore Owner or Guarantor of a
voluntary petition under any creditors rights laws, (B) any Individual Borrower,
Mortgage Borrower, Mortgage Principal, Baltimore Owner, Guarantor or any
Affiliate of any Individual Borrower, Mortgage Borrower, Mortgage Principal,
Baltimore Owner or Guarantor joins in the filing of, or files an answer
consenting to or otherwise acquiesces in (unless in the opinion of Borrower,
upon advice of counsel, there are no valid grounds to contest) an involuntary
petition against any Individual Borrower, Mortgage Borrower, Mortgage Principal,
Baltimore Owner or Guarantor under any creditors rights laws commenced by any
Person other than Lender, Mezzanine Lender or Mortgage Lender, or (C) any
Individual Borrower, Mortgage Borrower, Mortgage Principal, Baltimore Owner or
any Affiliate of any Individual Borrower, Mortgage Borrower, Mortgage Principal
or Baltimore Owner, soliciting or causing to be solicited petitioning creditors
for any such involuntary petition against any Individual Borrower, Mortgage
Borrower, Mortgage Principal, Guarantor or Baltimore Owner.

 

(d) Nothing herein shall be deemed to be a waiver of any right which Lender may
have under Section 506(a), 506(6) or 1111(b) or any other provision of the
Bankruptcy Code to file a claim for the full amount of the indebtedness secured
by the Pledge Agreement or to require that all collateral shall continue to
secure all of the indebtedness owing to Lender in accordance with the Note, this
Agreement, the Pledge Agreement and the other Loan Documents.

 

Section 9.5. Matters Concerning Manager. (a) Lender acknowledges that (i) a
manager unaffiliated with Borrower may terminate or cause Mortgage Borrower or
Baltimore Owner to terminate any applicable management agreement if it is not
being paid the

 

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management fees due under such management agreement and (ii) an affiliated
manager (A) shall not be entitled to a management fee but shall be entitled to
reimbursement of reasonable out-of-pocket expenses spent by said manager for the
operation of the Properties during the continuance of an Event of Default and
(B) may terminate any applicable management agreement after Mortgage Lender
takes title to the related Individual Property or Lender takes title to the
Collateral in the event said manager is not being paid all fees due under such
management agreement.

 

(b) Subject to the rights of Mortgage Lender, Lender shall have the right to
cause Borrower to cause Mortgage Borrower or Baltimore Owner to terminate any
management agreement upon the occurrence of any one or more of the following:
(i) at any time following the occurrence of and during the continuation of an
Event of Default (unless the applicable management agreement to be terminated is
then between Mortgage Borrower (and/or Baltimore Owner) and a Qualified Manager
not an Affiliate of Mortgage Borrower), (ii) the Manager is subject to a
Bankruptcy Action, (iii) the Manager defaults under such management agreement
beyond all applicable notice and cure periods.

 

Section 9.6. Servicer. At the option of Lender, the Loan may be serviced by a
servicer/trustee meeting all applicable criteria by the Rating Agencies for a
servicer in a Securitization (the “Servicer”) selected by Lender. Lender may
delegate all or any portion of its responsibilities under this Agreement and the
other Loan Documents to the Servicer pursuant to a servicing agreement (the
“Servicing Agreement”) between Lender and the Servicer. Notwithstanding the
foregoing, (a) Lender shall endeavor not to use, or permit the use of, any
servicer identified by Borrower and listed on Schedule 9.6 attached hereto as
the initial Servicer and (b) Lender agrees that (i) ORIX Capital Markets, LLC
shall not be permitted to service all or any part of the Loan and (ii) Wachovia
Securities shall not be the initial primary or special servicer of the Loan.
Borrower shall not be responsible for any set-up fees to the Servicer or any
other initial costs of the Servicer or Lender relating to or arising under the
Servicing Agreement. Borrower shall not be responsible for payment of the
monthly servicing fee due to the Servicer under the Servicing Agreement.

 

Section 9.7. Matters Concerning Franchisor. Subject to the rights of Mortgage
Lender under the Mortgage Loan Documents, Lender shall have the right to cause
Borrower to cause Mortgage Borrower or Baltimore Owner to terminate any
Franchise Agreement upon the occurrence of any one or more of the following: (a)
at any time following the occurrence of and during the continuation of an Event
of Default (unless the applicable Franchise Agreement to be terminated is then
between Borrower and a Qualified Franchisor not an Affiliate of Mortgage
Borrower, Borrower or Baltimore Owner), (b) Franchisor shall become bankrupt or
insolvent, (c) Franchisor defaults under any Franchise Agreement beyond all
applicable notice and cure periods or (d) Mortgage Lender (or its designee)
takes title to the related Individual Property. Lender acknowledges that a
franchisor unaffiliated with Borrower, Mortgage Borrower or Baltimore Owner may
terminate any applicable franchise agreement if it is not being paid the
franchise fees due under such franchise agreement.

 

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  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, 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 but good faith discretion of Lender and if decided in good faith shall
be final and conclusive. Whenever this Agreement expressly provides that Lender
may not withhold its consent or its approval of an arrangement or term, such
provisions shall also be deemed to prohibit Lender from conditioning or delaying
such consent or approval. When it is expressly provided herein that Lender act
reasonably, Lender shall apply the standards of an ordinary prudent lender with
respect to real estate collateral of similar size, scope and value as the
Properties.

 

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 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, 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, BORROWER HEREBY 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

 

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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 BORROWER 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 BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER
HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT:

 

CORPORATION SERVICE COMPANY

80 STATE STREET

ALBANY, NEW YORK 12207-2543

 

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 NOTICE OF SAID SERVICE MAILED OR
DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS 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 therefrom, shall in any event be effective unless the same shall be in
a writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to, or demand on Borrower, shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.

 

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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 under any other instrument
given as security therefore, 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 notice to the other parties hereto in the manner provided for in
this Section 10.6):

 

If to Lender:

   JPMorgan Chase Bank, N.A.      c/o ARCap Servicing, Inc.      5605 N.
MacArthur Boulevard, Suite 950      Irving, Texas 75038      Attention: Clyde
Greenhouse – Director of Administration      Facsimile No.: (972) 580-3888     

and

     Bear Stearns Commercial Mortgage, Inc.      383 Madison Avenue      New
York, New York 10179      Attention: J. Christopher Hoeffel      Facsimile No.:
(212) 272-7047

with a copy to:

   Cadwalader, Wickersham & Taft LLP      One World Financial Center      New
York, New York 10281      Attention: William P. McInerney, Esq.      Facsimile
No. (212) 504-6666

If to Borrower:

   c/o Wyndham International, Inc.      1950 Stemmons Freeway, Suite 6001     
Dallas, Texas 75207      Attention: Chief Financial Officer      Facsimile No.:
(214) 863-1282

 

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with a copy to:

   Akin Gump Strauss Hauer & Feld LLP      1700 Pacific Avenue, Suite 4100     
Dallas, Texas 75201      Attention: Carl B. Lee, P.C.      Facsimile No.: (214)
969-4343

 

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. To the fullest
extent permitted by applicable law, and notwithstanding anything to the contrary
contained herein or in any other Loan Document, each Individual Borrower hereby
acknowledges and agrees that Lender shall be entitled to rely upon any notice
give by any Individual Borrower as constituting a notice by such Individual
Borrower or Borrower.

 

Section 10.7. Trial by Jury. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY BORROWER, AND 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.

 

Section 10.10. Preferences. Lender shall have the continuing and exclusive right
to apply or reverse and reapply any and all payments by Borrower to any portion
of the obligations of Borrower hereunder. To the extent Borrower makes a payment
or payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended

 

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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. Borrower hereby expressly waives, and shall not
be entitled to, any notices of any nature whatsoever from Lender except with
respect to matters for which this Agreement or the other Loan Documents
specifically and expressly provide for the giving of notice by Lender to
Borrower and except with respect to matters for which Borrower is not, pursuant
to applicable Legal Requirements, permitted to waive the giving of notice.

 

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, Borrower agrees that neither Lender nor its agents
shall be liable for any monetary damages, and Borrower’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 Deed of Trust. (a) Except as otherwise
expressly provided herein or in any of the other Loan Documents, Borrower
covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender
upon receipt of notice from Lender for all reasonable out-of-pocket costs and
expenses (including reasonable attorneys’ fees and disbursements) 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 Borrower (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 Collateral); (ii) Borrower’s ongoing
performance of and compliance with Borrower’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 Lender in accordance with the
terms hereof; (v) securing Borrower’s compliance with any requests made pursuant
to the provisions of this Agreement and the other Loan Documents; (vi) the
filing and recording fees and expenses, title insurance and reasonable fees and
expenses of counsel for providing to Lender all required legal opinions, and
other similar expenses incurred in creating and perfecting the Liens in favor of
Lender pursuant to this Agreement and the other Loan Documents; (vii) enforcing
or preserving any rights, either in response to third party claims or in
prosecuting or defending any action or proceeding or other litigation, in each
case against, under or affecting Borrower, 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 Borrower under
this Agreement, the other Loan Documents or with respect to the Collateral or in
connection with any

 

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refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason of
the 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
Property Account.

 

(b) Borrower shall indemnify, defend and hold harmless Lender from and against
any and all direct, actual 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 for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of (i)
any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower 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 Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud,
bad faith or willful misconduct of Lender, its employees or agents. To the
extent that the undertaking to indemnify, defend and hold harmless set forth in
the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Lender.

 

(c) Borrower covenants and agrees to pay for or, if Borrower fails to pay, to
reimburse Lender for, any fees and expenses incurred by any Rating Agency in
connection with (i) any Rating Agency review of the Loan, the Loan Documents or
any transaction contemplated thereby as a result of the initial successful
Securitization of the Loan, or (ii) any consent, approval, waiver or
confirmation obtained from such Rating Agency pursuant to the terms and
conditions of this Agreement or any other Loan Document and the Lender shall be
entitled to require payment of such fees and expenses as a condition precedent
to the obtaining of any such consent, approval, waiver or confirmation.

 

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 Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.

 

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Section 10.16. No Joint Venture or Partnership; No Third Party Beneficiaries.
(a) Borrower and Lender intend that the relationships created hereunder and
under the other Loan Documents be solely that of borrower and lender. Nothing
herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Properties other than that of mortgagee,
beneficiary or lender.

 

(b) This Agreement and the other Loan Documents are solely for the benefit of
Lender and Borrower and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lender and Borrower
any right to insist upon or to enforce the performance or observance of any of
the obligations contained 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
Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender or any of their Affiliates shall be subject to the prior
reasonable approval of Lender.

 

Section 10.18. Cross Default; Cross Collateralization; Waiver of Marshalling of
Assets. (a) Borrower acknowledges that (except with respect to and subject to
the terms and conditions set forth herein concerning the Minority Borrower
Interests) 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 Individual Borrower’s Collateral taken separately. Borrower agrees
that the Pledge Agreement cross-collateralizes (except with respect to and
subject to the terms and conditions set forth herein concerning the Minority
Borrower Interests) and cross-defaulted with each other so that (i) an Event of
Default constitutes an Event of Default with respect to each Individual
Borrower’s pledge of Collateral under the Pledge Agreement which secures the
Note; (ii) an Event of Default under the Note or this Loan Agreement shall
constitute an Event of Default under the Pledge Agreement; (iii) the Pledge
Agreement (except with respect to and subject to the terms and conditions set
forth herein concerning the Collateral of a Minority Interest Borrower) shall
constitute security for the Note as if a single blanket lien were placed on all
of the Collateral as security for the Note; and (iv) such
cross-collateralization shall in no event be deemed to constitute a fraudulent
conveyance. No Collateral of a Minority Interest Borrower shall constitute
security for the Debt or Obligations attributable to any other Individual
Borrower and no Minority Interest Borrower shall be liable for the Debt or other
Obligations of any other Individual Borrower.

 

(b) To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners, members or shareholders and others with interests
in Borrower, and of the Collateral,

 

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and shall not assert any right under any laws pertaining to the marshalling of
assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of the Collateral for the collection of the 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 in preference to every other claimant
whatsoever. In addition, Borrower, for itself and its successors and assigns,
waives in the event of foreclosure upon any or all of the Collateral, any
equitable right otherwise available to Borrower which would require the separate
sale of any part of the Collateral or require Lender to exhaust its remedies
against any part of the Collateral or any combination of the Collateral before
proceeding against any other part of the Collateral or combination of the
Collateral; and further in the event of such foreclosure Borrower does hereby
expressly consent to and authorize, 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. Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents, but Borrower does not
waive any right to assert any such claim in a separate action.

 

Section 10.20. Conflict; Construction of Documents; Reliance. In the event of
any conflict between the provisions of this Loan Agreement and any of the other
Loan Documents, the provisions of this Loan Agreement shall control. The parties
hereto acknowledge that they were represented by competent counsel in connection
with the negotiation, drafting and execution of the Loan Documents and that such
Loan Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or Affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender’s exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.

 

Section 10.21. Brokers and Financial Advisors. Borrower and Lender each hereby
represent that it has dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Agreement. Borrower 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 reasonable attorneys’ fees and
expenses) in any way relating to or arising from a claim by any Person that such
Person acted on behalf of Borrower 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, including, without limitation,
the Commitment Letter dated March 23, 2005 (as amended) between Borrower and
Lender are superseded by the terms of this Agreement and the other Loan
Documents.

 

Section 10.23. Joint and Several Liability. The parties hereto acknowledge that
the defined term “Borrower” has been defined to collectively include each
Individual Borrower. It is the intent of the parties hereto in determining
whether (a) a breach of a representation or a covenant has occurred, (b) there
has occurred a Default or Event of Default, or (c) an event has occurred which
would create recourse obligations under Section 9.4 of this Agreement, that any
such breach, occurrence or event with respect to any Individual Borrower shall
be deemed to be such a breach, occurrence or event with respect to each
Individual Borrower and that each Individual Borrower need not have been
involved with such breach, occurrence or event in order for the same to be
deemed such a breach, occurrence or event with respect to each and every
Individual Borrower. The obligations and liabilities of each Individual Borrower
shall be joint and several, subject to the terms and conditions set forth herein
concerning the Minority Interest Properties. In addition, with respect to any
indemnities set forth herein or in the other Loan Documents, an Individual
Borrower of a Minority Interest Property shall only indemnify Lender for the
acts and omissions of such Individual Borrower and the activities and
occurrences relating to its Minority Interest Property.

 

Section 10.24. Co-Lenders. (a) Borrower hereby acknowledges and agrees that
notwithstanding the fact that the Loan may be serviced by Servicer, prior to a
Securitization of the Loan, all requests for approval and consents hereunder and
in every instance in which Lender’s consent or approval is required, Borrower
shall be required to obtain the consent and approval of each Co-Lender and all
copies of documents, reports, requests and other delivery obligations of
Borrower required hereunder shall be delivered by Borrower to each Co-Lender.

 

(b) Following the Closing Date (i) the liabilities of Lender shall be several
and not joint, (ii) neither Co-Lender shall be responsible for the obligations
of the other Co-Lender, and (iii) each Co-Lender shall be liable to Borrower
only for their respective Ratable Share of the Loan. Notwithstanding anything to
the contrary herein, all indemnities by Borrower and obligations for costs,
expenses, damages or advances set forth herein shall run to and benefit each
Co-Lender in accordance with its Ratable Share.

 

(c) Each Co-Lender agrees that it has, independently and without reliance on the
other Co-Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and its Affiliates and
decision to enter into this Agreement and that it will, independently and
without reliance upon the other Co-Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under any other Loan Document.

 

Section 10.25. Maximum Principal Indebtedness on Minority Interest Borrower.
Notwithstanding any provision set forth herein or in the other Loan Documents to

 

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the contrary, the maximum amount of principal indebtedness secured by this
Agreement and the other Loan Documents with respect to the Collateral pledged by
each Minority Interest Borrower shall be equal to such Minority Interest
Borrower’s Release Amount.

 

In the event that a Minority Interest Property becomes a Non-Minority Property,
then the amount of indebtedness secured by such Collateral shall not be limited
in accordance with the foregoing provisions of this Section 10.25 and such
Collateral shall secure the full amount of the Debt.

 

Section 10.26. 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 make suggestions to 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. Consultations and suggestions may occur no more than
once each quarter for Mortgage Lender and all Mezzanine Lenders together at
times as are reasonably satisfactory to Borrower and if conducted or made in
meetings at Guarantor’s principal place of business or such other locations as
are reasonably satisfactory to Borrower;

 

(b) the right, at the Lender’s expense and in accordance with the terms of this
Agreement, to examine the books and records of Borrower at any reasonable times
upon reasonable advance notice;

 

(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 as and to the extent provided for by the terms of this
Agreement; and

 

(d) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to approve any acquisition by Mortgage
Borrower or Baltimore Owner outside the ordinary course of business of any other
significant property (excluding, without limitation, personal property required
for the day-to-day operations of any Individual Property), property to be
acquired pursuant to any Approved Budget, and property to be acquired pursuant
to any alteration or Restoration made pursuant to the terms of this Agreement,
which approval shall not be unreasonably withheld, conditioned or delayed.

 

The rights described above in this Section 10.26 may be exercised by any entity
which owns and controls, directly or indirectly, substantially all of the
interests in Lender.

 

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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.

 

BORROWER:

W-BALTIMORE MAJORITY MEZZ BORROWER, LLC,
a Delaware limited liability company

By:  

/s/ Gregory J. Moundas

   

Name: Gregory J. Moundas

   

Title: Vice President

W-BALTIMORE MINORITY MEZZ BORROWER, LLC,
a Delaware limited liability company

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

PAH BATTERYMARCH REALTY COMPANY MEZZ BORROWER, LLC,
a Delaware limited liability company

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

CASA MARINA MEZZ BORROWER, LLC,
a Delaware limited liability company

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

KEY WEST MEZZ BORROWER, LLC,
a Delaware limited liability company

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

CONQUISTADOR MEZZANINE (SPE), INC.,
a Delaware corporation

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

EL SAN JUAN MEZZ BORROWER, INC.,
a Delaware corporation

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

ATLANTA AMERICAN MEZZ BORROWER, LLC,
a Delaware limited liability company

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

WYNDHAM FORT LAUDERDALE AIRPORT MEZZ BORROWER, LLC,
a Delaware limited liability company

By:   /s/ Gregory J. Moundas    

Name: Gregory J. Moundas

   

Title: Vice President

LENDER:

JPMORGAN CHASE BANK, N.A.,
a national banking association

By:  

/s/ Thomas M. Cosenza

   

Name: Thomas M. Cosenza

   

Title: Vice President

BEAR STEARNS COMMERCIAL MORTGAGE, INC.,
a New York corporation

By:   /s/ Richard A. Ruffer Jr.    

Name: Richard A. Ruffer Jr.

   

Title: Managing Director