Exhibit 10.1

 

 

 

 

CONSTRUCTION LOAN AGREEMENT

By and among

GGT OXFORD VENTURE MD, LLC, as Borrower (“Borrower”)

and

SANTANDER BANK, N.A., as Agent (“Agent”),

and any other Lenders, if any, which may become parties to this Construction
Loan Agreement

(with Santander Bank, “Lenders”)

$35,916,862.00 CONSTRUCTION LOAN

FOR PROJECT LOCATED ON COCA COLA DRIVE, HOWARD COUNTY, MARYLAND

June 26, 2014

 

 

 

 

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TABLE OF CONTENTS

 

     Page  

1.         DEFINITIONS AND RULES OF INTERPRETATION

     1   

    1.1      Definitions

     1   

    1.2      Rules of Interpretation

     19   

2.         AGREEMENT TO MAKE ADVANCES; LIMITATIONS

     20   

    2.1      Agreement to Make Advances

     20   

    2.2      Project Budget

     20   

    2.3      Amount of Advances

     21   

    2.4      Quality of Work

     21   

    2.5      Cost Overruns and Savings

     21   

    2.6      Contingency Reserve

     22   

    2.7      Stored Materials

     22   

3.         MAKING THE ADVANCES

     23   

    3.1      Draw Request

     23   

    3.2      Notice and Frequency of Advances

     24   

    3.3      Deposit of Funds Advanced

     24   

    3.4      Advances to Contractor; to Others

     24   

    3.5      Advances Do Not Constitute a Waiver

     25   

    3.6      Right to Retain the Construction Inspector

     25   

    3.7      Development Fee

     25   

4.         THE NOTE, INTEREST RATE, REPAYMENT OF LOAN

     26   

    4.1      The Note

     26   

    4.2      The Record

     26   

    4.3      Interest on the Loan

     26   

    4.4      Notice Regarding Advances

     27   

    4.5      Alternative Interest Rates, Etc.

     27   

    4.6      Illegality

     28   

    4.7      Default Interest/Late Charge

     28   

    4.8      Payments of Principal of Loan

     29   

    4.9      Prepayment

     29   

    4.10    Maturity

     29   

    4.11    Make Whole Provision

     30   

    4.12    Status of Lenders; Tax Documentation

     30   

5.         EXTENSION OF INITIAL MATURITY DATE

     32   

6.         COMMITMENT FEE; PAYMENTS AND COMPUTATIONS

     35   

    6.2      Payments

     35   

    6.3      Capital Adequacy

     36   

    6.4      Additional Costs, Expenses and Reserve Requirements

     36   

 

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    6.5      Certificate

     37   

    6.6      Indemnification

     37   

    6.7      Charges Against Loan Checking Account

     38   

7.         COLLATERAL SECURITY AND GUARANTY

     38   

8.         REPRESENTATIONS, WARRANTIES AND COVENANTS

     38   

    8.1      Organization; Authority, Etc.

     38   

    8.2      Title Assets

     39   

    8.3      Financial Statements

     39   

    8.4      No Material Changes, Etc.

     39   

    8.5      Franchises, Patents, Copyrights, Etc.

     39   

    8.6      Litigation

     40   

    8.7      No Materially Adverse Contracts, Etc.

     40   

    8.8      Compliance With Other Instruments, Laws, Etc.

     40   

    8.9      Tax Status

     40   

    8.10    No Event of Default

     41   

    8.11    Setoff, Etc.

     41   

    8.12    Certain Transactions

     41   

    8.13    Subsidiaries

     41   

    8.14    Partners, Beneficiaries, Etc.

     41   

    8.15    ERISA Plan

     41   

    8.16    Intentionally Omitted

     41   

    8.17    Access

     41   

    8.18    Condition of Project

     42   

    8.19    Compliance with Requirements

     42   

    8.20    Project Approvals

     42   

    8.21    Construction-Related Contracts

     42   

    8.22    Other Contracts

     43   

    8.23    Violations

     43   

    8.24    Plans and Specifications

     43   

    8.25    Project Budget

     43   

    8.26    Effect of Draw Request

     43   

    8.27    Anti-Terrorism

     44   

    8.28    Tax Shelter Regulations

     44   

    8.29    Property Agreements

     44   

9.         AFFIRMATIVE COVENANTS OF BORROWER

     44   

    9.1      Punctual Payment

     45   

    9.2      Commencement, Pursuit and Completion of Construction

     45   

    9.3      Correction of Defects

     45   

    9.4      Records and Accounts

     45   

    9.5      Financial Statements, Certificates and Information

     45   

    9.6      Insurance; Bonds

     47   

    9.7      Liens and Other Charges

     47   

 

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TABLE OF CONTENTS

 

    9.8      Inspection of Project and Books, Appraisals

     47   

    9.9      Compliance with Laws, Contracts, Licenses, and Permits

     48   

    9.10    Use of Proceeds

     48   

    9.11    Project Costs

     48   

    9.12    Insufficiency of Loan Proceeds

     49   

    9.13    Leasing Matters

     49   

    9.14    Laborers, Subcontractors and Materialmen

     49   

    9.15    Further Assurance of Title

     50   

    9.16    Zoning

     50   

    9.17    Publicity

     50   

    9.18    Sign Regarding Construction Financing

     50   

    9.19    Further Assurances

     50   

    9.20    Interest Rate Protection

     51   

    9.21    Notices

     51   

    9.22    Restricted Cash Management

     52   

    9.23    Accounts

     52   

    9.24    Debt Yield

     52   

    9.25    Debt Service Coverage Ratio

     53   

10.         NEGATIVE COVENANTS OF BORROWER

     53   

    10.1      Restriction on Change Orders

     53   

    10.2      Restrictions on Easements, Covenants and Restrictions

     53   

    10.3      No Amendments, Terminations or Waivers

     54   

    10.4      Restrictions on Indebtedness

     55   

    10.5      Restrictions on Liens, Etc.

     56   

    10.6      Restrictions on Loans and Investments

     56   

    10.7      Merger, Consolidation, Conversion, Business Operations, and
Ownership and Disposition of Assets

     56   

    10.8      Sale and Leaseback

     57   

    10.9      Distributions

     57   

    10.10    Mezzanine Debt

     57   

    10.11    Other Negative Covenants

     57   

    10.12    Right to Contest

     57   

11.         Intentionally Omitted

     58   

12.         CONDITIONS TO CLOSING

     58   

    12.1      Loan Documents

     58   

    12.2      Construction-Related Contracts

     58   

    12.3      Subcontracts

     58   

    12.4      Other Contracts

     58   

    12.5      Intentionally Omitted

     58   

    12.6      Certified Copies of Organization Documents

     59   

    12.7      Resolutions

     59   

    12.8      Incumbency Certificate; Authorized Signers

     59   

 

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    12.9      Validity of Liens

     59   

    12.10    Intentionally Omitted

     59   

    12.11    Deliveries

     59   

    12.12    Intentionally Omitted

     60   

    12.13    Legal and Other Opinions

     60   

    12.14    Lien Search

     60   

    12.15    Notices

     60   

    12.16    Appraisal

     61   

    12.17    Commitment Fee

     61   

    12.18    Performance; No Default

     61   

    12.19    Representations and Warranties

     61   

    12.20    Proceedings and Documents

     61   

    12.21     Waiver

     61   

13.         CONDITIONS OF INITIAL AND SUBSEQUENT ADVANCES

     61   

    13.1      Prior Conditions Satisfied

     61   

    13.2      Performance; No Default

     62   

    13.3      Representations and Warranties

     62   

    13.4      No Damage

     62   

    13.5      Construction Inspector Report

     62   

    13.6      Receipt of Agent

     62   

    13.7      Mechanic’s lien laws

     63   

    13.8      Release of Retainage

     64   

    13.9      Waiver

     65   

14.         EVENTS OF DEFAULT AND REMEDIES

     65   

    14.1      Events of Default

     65   

    14.2      Termination of Advances and Acceleration

     68   

    14.3      Completion of Project

     69   

    14.4      Other Remedies

     70   

    14.5      Power of Attorney

     71   

    14.6       Waivers

     71   

15.         SETOFF

     71   

16.         EXPENSES

     71   

17.         INDEMNIFICATION

     72   

18.         LIABILITY OF AGENT AND LENDERS

     73   

19.         RIGHTS OF THIRD PARTIES

     73   

20.         SURVIVAL OF COVENANTS, ETC.

     73   

21.         USURY

     74   

 

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22.         RELATIONSHIP

     74   

23.         AGENT AND THE LENDERS

     74   

    23.1      Rights, Duties and Immunities of Agent

     74   

    23.2      Respecting Loans and Payments

     78   

    23.3      Assignment and Participation

     81   

    23.4      Administrative Matters

     85   

24.         NOTICES

     86   

25.         GOVERNING LAW

     87   

26.         CONSENT TO JURISDICTION; WAIVERS

     88   

27.         HEADINGS

     89   

28.         COUNTERPARTS

     89   

29.         ENTIRE AGREEMENT, ETC.

     89   

30.         CONSENTS, AMENDMENTS, WAIVERS, ETC.

     89   

31.         REPLACEMENT DOCUMENTS

     90   

32.         TAX SHELTER REGULATIONS

     90   

33.         TIME OF THE ESSENCE

     90   

34.         SEVERABILITY

     90   

35.         CONFLICTING PROVISIONS

     91   

36.         AUTHORIZED REPRESENTATIVES

     91   

37.         RELEASE OF CERTAIN COLLATERAL

     91   

 

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EXHIBITS

 

A -

    

Construction Schedule

B -

    

Disbursement Schedule

C -

    

Project Budget

D -

    

Borrower’s Requisition

E -

    

Contractor’s Requisition Certificate

F -

    

Lenders’ Commitment

G -

    

Form of Assignment and Acceptance

H -

    

Form of Note

I -

    

Compliance Certificate

J -

    

Authorized Representatives

K -

    

Property Agreements

L -

    

Major Construction Contracts

M -

    

Plans and Specifications

N -

    

Form of Assignment of Management Agreement

O -

    

Reconveyance Parcel

 

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SCHEDULES

 

8.12      -      Certain Transactions 8.14      -      Partners, Beneficiaries,
Etc. 8.20      -      Project Approvals

 

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CONSTRUCTION LOAN AGREEMENT

This CONSTRUCTION LOAN AGREEMENT is made as of the 26th day of June, 2014, by
and among GGT OXFORD VENTURE MD, LLC, a Delaware limited liability company
(“Borrower”), having its principal place of business at 450 South Orange Avenue,
Orlando, Florida 32801, and SANTANDER BANK, N.A., a national banking association
(“Santander”), having a place of business at 45 East 53rd Street, New York, New
York 10022, the other lending institutions which are and may hereafter become
parties to this Agreement pursuant to Section 23.3 (Santander and such other
lending institutions, collectively, “Lenders”), and SANTANDER BANK, N.A., as
agent for itself and such other Lenders (“Agent”).

Borrower desires that Lenders extend credit as provided herein, and Lenders are
prepared to extend such credit on the terms and conditions hereinafter set
forth.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein
contained, Borrower, Agent and Lenders hereby agree as follows:

1.     DEFINITIONS AND RULES OF INTERPRETATION.

1.1     Definitions.

The following terms as used in this Agreement, any Exhibit hereto, or in any
other Loan Document (unless otherwise defined therein) shall have the meanings
set forth in this Section 1:

Accounts. Shall mean the Loan Checking Account, Operating Account, and the
Restricted Cash Management Account.

Additional Interest. Shall mean any and all amounts which may become due and
payable by Borrower in accordance with the terms and provisions of any
Agent/Lender Hedging Agreement which is secured by the Deed of Trust.

Adjusted LIBOR. Shall mean for each Interest Period the rate per annum obtained
by dividing (i) the LIBOR for such Interest Period, by (ii) a percentage equal
to one hundred percent (100%) minus the maximum reserve percentage applicable
during such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining the maximum
reserve requirements (including, without limitation, any basic, supplemental,
marginal and emergency reserve requirements) for Agent (or of any subsequent
holder of a Note which is subject to such reserve requirements) in respect of
liabilities or assets consisting of or including Eurocurrency liabilities (as
such term is defined in Regulation D of the Board of Governors of the Federal
Reserve System) having a term equal to the Interest Period.

Advance. Any disbursement of the proceeds of the Loan made or to be made by
Lenders pursuant to the terms of this Agreement.

Agent. Has the meaning given that term in the preamble to this Agreement.

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Affiliate.   Shall mean with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified

Agent/Lender Hedging Agreement.   Shall mean, collectively, each Hedging
Agreement (if any) in which any of Agent or any Affiliate of Agent is the
counterparty, and as to Agent only for so long as such counterparty remains
Agent or a Lender or an Affiliate thereof.

Agreement.   This Construction Loan Agreement, including the Schedules and
Exhibits hereto.

Appraisal.   An appraisal which is compliant with the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, prepared by an
appraiser selected by Agent, who shall be: (i) an MAI member with not less than
ten (10) years’ experience appraising properties of a similar type to the
Project in the general geographical area of the Project, and (ii) otherwise
qualified pursuant to provisions of applicable laws and regulations under and
pursuant to which Agent operates.

Appraised Value.   The market value of the Project on an “As Is” basis
determined by the most recent Appraisal obtained pursuant hereto, as such may be
reviewed and adjusted reasonably by Agent.

Architect.   Shall mean Housing Studio, or any other Person engaged by Borrower
to provide architectural services for any portion of the Project.

Architect’s Contract.   Shall mean that certain Agreement dated July 19, 2013,
and any other contract between Borrower and the Architect, providing for the
design of the Improvements and the supervision of the construction thereof.

Assignment of Hedging Agreement.   The Collateral Assignment of Hedging
Agreement dated as of the Closing Date made by Borrower in favor of Agent for
the benefit of Lenders, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

Assignment of Development Agreement.   The Collateral Assignment of Development
Agreement dated as of the Closing Date made by and among Borrower, Agent for the
benefit of Lenders, and Developer, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

Assignment of Leases and Rents.   The Collateral Assignment of Leases and Rents
dated as of the Closing Date, made by Borrower in favor of Agent for the benefit
of Lenders, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

Assignment of Management Agreement.   The Collateral Assignment of Property
Management Agreement by and among Borrower, Agent for the benefit of Lenders and
the Management Company, as the same may be amended, restated, supplemented or
otherwise modified from time to time, to be entered into concurrently with the
execution of the Management Contract, which shall be substantially in the form
of Exhibit N attached hereto and made a part hereof.

 

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Assignment of Project Documents.   The Assignment of Project Documents dated as
of the Closing Date, made by Borrower in favor of Agent for the benefit of
Lenders, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

Authorized Representatives.   Has the meaning set forth in Section 36 herein.

Banking Day.   Shall mean with respect to LIBOR, a London Banking Day and with
respect to all advances, any day other than a day on which commercial banks in
New York are required or permitted by law to close.

Borrower.   Shall have the meaning given that term in the preamble to this
Agreement.

Borrower’s Requisition.   Has the meaning set forth in Section 3.1 herein.

Business Day.   Shall mean any day of the year on which offices of Santander
Bank are not required or authorized by law to be closed for business in New York
City, New York.

Cash Flow Sweep Period Release Event.   Shall have the meaning assigned to such
term in Section 9.24.

Cash Flow Sweep Trigger Event.   Shall have the meaning assigned to such term in
Section 9.24.

Cash Management Agreement.   Shall mean that certain Cash Management Agreement
dated the date hereof by and between Borrower, Property Manager and Lender.

Closing Date.   The date of this Agreement.

CNL.   Shall have the meaning assigned to such term in the definition of
“Permitted Transfers” herein.

Code.   The Internal Revenue Code of 1986 and the regulations thereunder, all as
amended and in effect from time to time.

Code Compliance Changes.   Has the meaning set forth in Section 10.3 herein.

Collateral.   All of the property, rights and interests of Borrower that are or
are intended to be subject to the security interests, assignments, and mortgage
liens created by the Security Documents, including, without limitation, the
Project.

Commitment.   Shall mean, with respect to each Lender, the amount set forth on
Exhibit F hereto as the amount of such Lender’s commitment to make advances to
Borrower, as may be amended from time to time by Agent as provided in
Section 23.3.

Commitment Percentage.   Shall mean, with respect to each Lender, the percentage
set forth on Exhibit F hereto as such Lender’s percentage of the aggregate
Commitments of all of Lenders, as may be amended from time to time by Agent as
provided in Section 23.3.

 

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Commitment Fee.   Shall have the meaning set forth in Section 6(a) herein.

Completion Date.   Means [30 months from closing date], as may be extended by
Force Majeure.

Construction Contract.   Any contract between Borrower and any Contractor,
providing for the construction of any portion of the Improvements.

Construction Schedule.   The schedule of the estimated dates of commencement and
completion of construction of the Improvements, approved by Agent and attached
hereto as Exhibit A.

Construction Inspector.   At Agent’s option, either an officer or employee of
Agent or consulting architects, engineers or inspectors appointed by Agent from
time to time.

Construction-Related Contracts.   Any Architect Contract, any Construction
Contract, and any other contract entered into hereafter by Borrower relating to
the construction, design or engineering of the Improvements.

Contingency Reserve.   The amount(s) allocated as contingency reserve(s) in the
Project Budget, to be advanced only in accordance with the provisions of
Section 2.6 hereof.

Contractor.   Any Person engaged by Borrower to provide contractor and/or
construction services for any portion of the Project. A party that only supplies
materials to be incorporated into the Project, but does not provide any labor or
construction services in connection therewith, shall not be considered a
“Contractor” for the purposes of this Agreement.

Controlling Interest.   Means, with respect to any Person, the possession,
directly or indirectly, of the at least 51% of the direct or indirect ownership
interests in such Person and the power to direct or cause the direction of the
management or policies of such Person, whether through the ability to exercise
voting power, by contract or otherwise; “Controls”, “Controlling”, and
“Controlled” have meanings correlative thereto.

Debt Service Coverage Ratio.   Shall mean the ratio for the applicable
calculation period of: (A) Net Operating Income to (B) actual payments of
principal and interest due and payable under the Loan.

Debt Yield.   Shall mean, as of each date of determination, the percentage
obtained by dividing (i) the Net Operating Income derived from the Project for
the period of calculation by (ii) the outstanding principal balance of the Loan
and any unfunded portion thereof, to the extent available for funding hereunder.

Deed of Trust.   The Deed of Trust, Security Agreement and Fixture Filing dated
as of the Closing Date, made by Borrower in favor of Agent for the benefit of
Lenders, and as the same may be amended, restated, supplemented or otherwise
modified from time to time.

Default.   A condition or event which would, with either the giving of notice or
lapse of time or both, constitute an Event of Default.

 

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Default Rate.   Has the meaning set forth in Section 4.7 herein.

Delinquent Lender.   Shall have the meaning set forth in Section 23.2(h) herein.

Developer.   Shall mean Woodfield Development Company, LLC, a Delaware limited
liability company.

Development Agreement.   Shall mean that certain Development Agreement between
Developer and Borrower dated March 7, 2014, as the same may be amended from time
to time.

Direct Costs.   The costs of the Land, the Personal Property, and all labor,
materials, fixtures, machinery and equipment required to construct, equip and
complete the Improvements in accordance with the Plans and Specifications.

Disbursement Schedule.   The schedule of the amounts of Advances anticipated to
be requisitioned by Borrower each month during the term of the construction of
the Improvements (including an itemization of Direct Costs and Indirect Costs to
be included in each such requisition), approved by Agent and attached hereto as
Exhibit B.

Distribution.   The (i) declaration or payment of any dividend,
(ii) distribution of cash or other property, (iii) purchase, redemption, or
other retirement (directly or indirectly), or (iv) other distribution, in each
case, of, on or in respect of any shares of any class of capital stock,
partnership interests, or other beneficial or ownership interests of Borrower.

Drawdown Date.   The date on which any Advance is made or is to be made.

Draw Request.   With respect to each Advance, Borrower’s Requisition for such
Advance and all other documents required by this Agreement to be furnished to
Agent as a condition to such Advance.

Effective LIBOR.   Shall mean the per annum rate equal to the Adjusted LIBOR
plus two hundred fifty (250) basis points. Upon Borrower’s satisfaction of the
First Reduction Conditions as determined by Agent, the Effective LIBOR shall be
reduced to the Adjusted LIBOR plus two hundred twenty-five (225) basis points.
Upon Borrower’s satisfaction of the Second Reduction Conditions as determined by
Agent, the Effective LIBOR shall be reduced to the Adjusted LIBOR plus two
hundred (200) basis points. In either case of reduction as provided above, the
Effective LIBOR shall be reset by Agent only for LIBOR Advances initiated, or
for the Interest Periods commencing, from and after Agent notifies Borrower in
writing, that the either the First Reduction Conditions or the Second Reduction
Conditions have been satisfied, and shall not apply to existing LIBOR Advances.
During the Extension Period, if applicable, Effective LIBOR shall mean the per
annum rate equal to the Adjusted LIBOR plus two hundred (200) basis points.

Eligible Assignee.   Shall mean any of (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the

 

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Organization for Economic Cooperation and Development (the “OECD”), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; and (d) the central bank of any country which is a member
of the OECD.

Eligible Institution.   As specifically defined in the Cash Management
Agreement.

Engineer.   Shall mean Fisher, Collins and Carter, Inc., or any other Person
engaged by Borrower to provide engineering services for any portion of the
Project.

Engineer’s Contract.   Shall mean that certain letter dated September 30, 2013
from Engineer to Woodfield Acquisitions, LLC, outlining scope of work, and that
certain Additional Work Agreement dated as of February 1, 2014, by and between
Woodfield Acquisitions, LLC and Engineer, and any other contract between
Borrower and the Engineer, providing for civil engineering work relating to the
Project.

Environmental Laws.   As specifically defined in the Deed of Trust.

Equity Deficiency.   Shall have the meaning set forth in Section 9.12 herein.

ERISA Plan.   Any employee benefit, employee pension, or multiemployer plan
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time.

Event of Default.   Shall have the meaning set forth in Section 14.1.

Extended Maturity Date.   Shall mean June 26, 2019.

Extension Fee.   Has the meaning set forth in Section 5(a)(i) herein.

Extension Period.   Shall mean the period of time commencing on the first day
after the Initial Maturity Date, if applicable, through and including the
Extended Maturity Date.

FATCA   means Sections 1471-1474 of the Code, any amended or successor
provisions that are substantially similar thereto, and any current or future
regulations or official interpretations thereof.

Fee Letter.   Shall mean that certain letter dated as of the Closing Date by and
between Borrower and Agent.

Financing Statements.   Uniform Commercial Code Financing Statement(s) from the
naming Borrower as debtor and Agent as secured party.

First Reduction Conditions.   Shall mean, as of the date of determination, the
following conditions:

(i)       no Event of Default shall have occurred and be continuing; and

 

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(ii)       the Improvements have been Substantially Completed.

First Reduction Conditions Certification.   Has the meaning set forth in
Section 4.3 herein.

Force Majeure.   Shall mean any labor dispute, fire, unusual delay in
transportation or delivery, unavoidable casualty, flood, storm, hurricane,
tornado, earthquake, epidemic, civil disturbance, war, terrorism, freight
embargo, riot, sabotage (by persons other than Borrower or any of its
Affiliates), unusual industry material shortage or any other similar act or
condition, in each case only to the extent the event in question is beyond the
control of and without the fault or negligence of Borrower or any of its
Affiliates, provided that any extension therefor shall not exceed one hundred
twenty (120) days in the aggregate.

Foreign Lender   means any Lender that is organized under the laws of a
jurisdiction other than the United States of America. For purposes of this
definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction

Full Completion and Fully Completed.   Shall mean Substantial Completion plus
the completion of all Punch List Items and minor items.

General Contract.   Shall mean that certain guaranteed maximum price(“GMP”)
Construction Agreement dated June 19, 2014 between Borrower and General
Contractor.

General Contractor.   Shall mean Clark Builders Group LLC.

Generally Accepted Accounting Principles.   Shall mean generally accepted
accounting principles in the United States of America, as in effect on the date
of the preparation and delivery of the financial statements described in
Section 9.5 herein and consistently followed, without giving effect to any
subsequent changes other than changes consented to in writing by Agent.

Governmental Authority.   The United States of America, the Commonwealth or
State in which the Land is located, the city or town in which the Land is
located, and any political subdivision, agency, authority, department,
commission, board, bureau, or instrumentality of any of them, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body of any of them.

Guarantor.   Singly and collectively, jointly and severally Michael Underwood,
Gregory Bonifield, Todd Jacobus and Michael Schwarz.

Guaranty.   Means that certain Unconditional Guaranty dated as of the Closing
Date, made by Guarantor in favor of Agent for the benefit of Lenders, as the
same may be amended, restated, supplemented or otherwise modified.

Hedging Agreement.   Means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including any option with respect to any
of the foregoing and any combination of the foregoing agreements or
arrangements), and any confirmation executed in connection with any such
agreement or arrangement which is reasonably approved by Agent.

 

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Improvements.   Certain improvements located on the Land consisting of 248
residential rental units of which 210 are market rate units and 38 are “moderate
rate units” (as defined in the Howard County, Maryland “Moderate Income Housing
Unit Program,” administered by the Howard County, Maryland Department of Housing
and Community Development), collectively comprising 247,330 square feet within
four, 4-story buildings, including, without limitation, structures and other
improvements, and any and all accessions, additions, replacements, substitutions
or alterations thereof or appurtenances thereto, in all instances, such
Improvements to be constructed in accordance with the Plans and Specifications
and this Agreement.

Indebtedness.   All obligations, contingent and otherwise, that in accordance
with Generally Accepted Accounting Principles should be classified upon the
obligor’s balance sheet as liabilities, or to which reference should be made by
footnotes thereto, including in any event and whether or not so classified:
(a) all debt and similar monetary obligations, whether direct or indirect;
(b) all liabilities secured by any mortgage, pledge, security interest, lien,
charge, or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(c) all liabilities under capitalized leases; and (d) all guaranties,
endorsements and other contingent obligations whether direct or indirect in
respect of indebtedness of others, including the obligations to reimburse the
issuer in respect of any letters of credit.

Indemnity Agreement.   The Environmental Indemnity, dated or to be dated on or
prior to the Closing Date, made by Borrower and Guarantor in favor of Agent and
Lenders, as the same may be amended, restated, supplemented or otherwise
modified.

Indirect Costs.   All title insurance premiums, survey charges, engineering
fees, architectural fees, real estate taxes, appraisal costs, commitment fees
and interest payable to Lender under the Loan, premiums for insurance,
marketing, advertising and leasing costs, brokerage commissions, legal fees,
accounting fees, overhead and administrative costs, and all other expenses as
shown on the Project Budget which are expenditures relating to the Project and
are not Direct Costs.

Initial Advance.   Means the initial Advance of the Loan, to be made upon
Borrower’s compliance with the conditions of Section 13 hereof.

Initial Maturity Date.   Means June 26, 2018.

Initial Testing Period.   Has the meaning set forth in Section 9.24 herein.

Interest Period.   Shall mean, (A) with respect to each LIBOR Advance, the
period commencing on the date such LIBOR Advance is disbursed (or the last day
of the preceding Interest Period for such Advance) and ending on the date one
(1), month thereafter. The number of days in each Interest Period and the
particular day on which each Interest Period ends and the next begins shall be
fixed by Agent in accordance with Agent’s generally accepted practice in the
applicable Libor interbank market; provided that (i) any Interest Period which
would otherwise end on a day which is not a Business Day shall be extended to
the next Business Day, unless such extension would carry such Interest Period
into the next month, in which event such Interest Period shall end on the
preceding Business Day, (ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a date for which there is no numerically
corresponding day in the calendar month in which such Interest Period end) shall
end on the last Business Day of a calendar month,

 

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and (iii) any Interest Period for a LIBOR Advance that would otherwise extend
beyond the Maturity Date shall end on the Maturity Date; and (B) with respect to
each Variable Rate Advance consecutive periods of one (1) day each.

Investments.   All expenditures made and all liabilities incurred (contingently
or otherwise) for the acquisition of stock or Indebtedness of, or for loans,
advances, capital contributions or transfers of property to, or in respect to
any guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person.

Land.   The real property located at in Howard County, Maryland on the north
side of MD Route 100 with frontage along Coca Cola Drive, and described in
Exhibit A to the Deed of Trust.

Land Records.   Shall mean the Land Records of the Clerk of the Circuit Court of
Howard County, Maryland.

Leases.   Any and all leases, licenses and agreements, whether written or oral,
relating to the use or occupation of space in the Improvements or on the Land by
Persons other than Borrower.

Lender.   Shall have the meaning given that term in the preamble to this
Agreement.

Letter of Credit.   Shall mean an irrevocable, unconditional, transferable,
clean sight draft letter of credit acceptable to Agent (either an evergreen
letter of credit or one which does not expire until at least thirty
(30) Business Days after the Maturity Date) in favor of Agent for the ratable
benefit of the Lenders and entitling Agent to draw thereon in New York, New
York, issued by a domestic Eligible Institution or the U.S. agency or branch of
a foreign Eligible Institution. If at any time the bank issuing any such Letter
of Credit shall cease to be an Eligible Institution, Agent shall have the right
upon ten (10) days’ prior notice to Borrower to draw down the same in full and
hold the proceeds of such draw unless within such ten (10) day period Borrower
has delivered a replacement Letter of Credit meeting the requirements set forth
herein issued by an Eligible Institution.

LIBOR.   Shall mean, as applicable to any LIBOR Advance, a rate per annum
(rounded upward, if necessary, to the nearest 1/32 of one percent) equal to the
composite London Interbank Offered Rate for a period of time comparable to the
applicable LIBOR period for such LIBOR Advance which appears on the Reuters
Screen LIBOR01 Page (or any successor page) as of 11:00 a.m. London time on the
day that is two (2) London Banking Days preceding the first day of such LIBOR
period (or if not reported thereon, then as determined by Agent from another
recognized source or interbank quotation). In the event that the Board of
Governors of the Federal Reserve System shall impose a Reserve Percentage with
respect to LIBOR deposits of Agent, then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the amount determined
above divided by an amount equal to 1 minus the Reserve Percentage.

LIBOR Advance.   Shall mean, any advance hereunder (or any portion of the
outstanding principal balance hereof) that the parties have agreed shall bear
interest at a rate which refers to LIBOR.

Libor Lending Office.   Shall mean as to Santander Bank, its office in New York,
New York, or such other office as Santander Bank may from time to time specify
in writing to Borrower, and as

 

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to any other Lender, such office as such Lender may from time to time specify in
writing to Borrower as its Libor Lending Office.

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

LLC Agreement.   Shall have the meaning assigned to such term in the definition
of “Permitted Transfers” herein.

Loan.   The loan or any portion thereof which is the subject of this Agreement.

Loan Amount.   $35,916,862.

Loan Checking Account.   Has the meaning set forth in Section 3.3 herein.

Loan Documents.   This Agreement, the Note, the Indemnity Agreement, the
Guaranty, Cash Management Agreement, any Hedging Agreements, the Fee Letter, and
the Security Documents, and all other agreements, documents and instruments now
or hereafter evidencing, securing or otherwise relating to the Loan.

Loan To Value Ratio or LTV Ratio.   Shall mean the ratio obtained by dividing:
(i) the outstanding principal balance of the Loan, by (ii) the Appraised Value,
expressed as a percentage.

London Banking Day.   Shall mean, with respect to LIBOR Advances, any day on
which commercial banks are open for international business (including dealings
in U.S. ($) deposits) in London, England and New York.

Major Construction Contract.   Any contract, other than the General Contract,
between Borrower and any Contractor, providing for the construction of any
portion of the Improvements identified on Exhibit L attached hereto.

Management Company.   Buzzuto Management Company, or any Person(s) with whom
Borrower has, or will, enter into an agreement to manage the operations of the
Project or portion thereof.

Management Contract.   Any contract(s) entered into, or to be entered into,
between Borrower and any Management Company, providing for the management of the
operation of the Project or portion thereof by the Management Company, together
with any renewals or replacements thereof.

Maturity Date.   Shall mean the Initial Maturity Date, or if extended in
accordance with Article 5 herein, the Extended Maturity Date.

Minimum Debt Service Coverage Requirement.   Shall have the meaning set forth in
Section 9.25 herein.

 

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Minor Field Changes.   Shall have the meaning set forth in Section 10.3 herein.

Net Operating Income.   Shall mean, with respect to the period of calculation,
all revenues derived from the Project minus all Operating Expenses.
Notwithstanding anything to the contrary contained herein, Net Operating Income
shall be calculated assuming (1) actual recurring rental income from tenants in
occupancy of their respective portion of the Improvements pursuant to Leases;
provided such tenants are not subject to bankruptcy or insolvency proceeding,
plus the projected rents from executed Leases, less (2) the greater of actual
vacancy or five percent (5%).

Note.   Has the meaning given that term in Section 4.1 herein, together with any
extension, renewal, replacement, substitution, or modification thereof.

Obligations.   All indebtedness, obligations and liabilities of Borrower to
Agent (including any Obligations pursuant to an Agent/Lender Hedging Agreement)
and Lenders existing on the date of this Agreement or arising thereafter, direct
or indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, arising or incurred under this Agreement or any of the
other Loan Documents or in respect of any of the Advances or the Note.

Obligor(s).   Borrower and Guarantor.

Operating Account.   Shall mean, that certain account established by Borrower
with Agent on or prior to the Closing Date, which account shall be maintained by
Borrower for the Project and from which Borrower shall have access to make
withdrawals subject to the terms and provisions of this Agreement and the Cash
Management Agreement.

Operating Budget.   The operating budget for total estimated Operating Expenses
for the Project upon the commencement of the leasing of the Project, which shall
submitted by Borrower in accordance with the provisions of Section 9.5, and
reasonably approved by Agent.

Operating Expenses.   Shall mean expenditures of all kinds made with respect to
the operation of the Project in the normal course of business as shown on the
operating budget reasonably approved by Agent and delivered to Agent pursuant to
the provisions of Section 9.5 hereof (the “Operating Budget”), including, but
not limited to, and without duplication, expenditures for taxes, insurance,
repairs, replacements, maintenance, management fees equal to the greater of
actual management fees or three and one-half percent (3.50%) of the annual gross
revenues from the Project, salaries, advertising expenses, professional fees,
wages and utility costs, amounts payable with respect to the Project and
reasonable additions to, or creations of, reserves for repairs and replacements
in an amount equal to $250 per residential unit per annum and for capital
expenditures required to comply with Requirements thereto, but expressly
excluding: (a) any debt service on the Loan (including without limitation any
payments under any Hedging Agreement), and (b) expenditures made out of reserves
previously created. Any expenditures which in accordance with the accrual basis
income tax accounting are depreciated or amortized over a period which exceeds
one (1) year shall be treated as an expenditure, for the purposes of the
foregoing calculations, ratably over the period of depreciation or amortization.
Security deposits received and deposited in separate escrow accounts pursuant to
applicable Requirements shall not be included as

 

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revenue unless and until Borrower becomes entitled to retain the same as a
result of a tenant breach, and the repayment of such escrow deposits to tenants
shall not be treated as an expense.

Organizational Documents.   For any corporation, partnership, trust, limited
liability company, limited liability partnership, unincorporated association,
business or other legal entity, the documents pursuant to which such entity has
been established or organized, as such documents may be amended from time to
time.

Outstanding.   With respect to the Advances or the Loan, the aggregate unpaid
principal thereof as of any date of determination.

Party(ies).   Each Obligor and each manager of Borrower or each member
authorized to execute documents on behalf of Borrower.

Payment Date.   Has the meaning set forth in Section 6.2(b) herein.

Payment Period Date.   Has the meaning set forth in Section 3.1(d) herein.

Permitted Liens.   Liens, security interests and other encumbrances, permitted
by Section 10.5.

Permitted Transfers.   Any sale, transfer or conveyance of any direct or
indirect interest in Borrower so long as after giving effect to such sale,
transfer, conveyance or pledge, (a) GGT Oxford Holdings, LLC (“CNL”), owns at
least, individually or in the aggregate, 51% of the direct membership interests
in Borrower and has the power to direct or cause the direction of the management
and policies of Borrower, subject to customary “major decision” approval rights
of any third party investor in Borrower (it being agreed that CNL’s delegation
of such rights to WF Oxford Square, LLC (“WF Oxford”) as the “Operating Member”
of Borrower shall not be deemed to be the surrender of such power) and (b) at
all times prior to Project Completion, WF Oxford shall continue to be, and to
possess all the powers and authority of, the “Operating Member” of Borrower,
unless WF Oxford has been terminated as the “Operating Member” of Borrower
(pursuant to the Limited Liability Agreement of Borrower in effect as of the
date hereof (the “LLC Agreement”) (x) because of fraud, intentional misconduct
or gross negligence, or (y) with the prior reasonable consent of Agent, for
“cause,” as defined in Section 6.7(a) of the LLC Agreement. If any such sale,
transfer or conveyance is of greater than a twenty-five percent (25%) direct or
indirect interest in Borrower, such sale, transfer or conveyance shall be
subject to each Lender’s “know your customer” requirements. Borrower shall
provide Agent with at least ten (10) Business Days prior notice of such
Permitted Transfer.

Person.   Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

Personal Property.   All materials, furnishings, fixtures, furniture, machinery,
equipment and all items of tangible or intangible personal property now or
hereafter owned or acquired by Borrower, in which Agent, for the benefit of
Lenders has been, or will be granted an interest to secure the Obligations.

 

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Plans and Specifications.   The plans and specifications for the Improvements
described on Exhibit M hereto, and any subsequent plans and specifications,
required to be delivered in accordance with the terms and conditions of this
Agreement, as approved by Agent.

Prime Rate.   Shall mean, the rate per annum from time to time established by
Agent as the Prime Rate and made available by Agent at its main office or, in
the discretion of Agent, the base, reference or other rate then designated by
Agent for general commercial loan reference purposes, it being understood that
such rate is a reference rate, not necessarily the lowest, established from time
to time, which serves as the basis upon which effective interest rates are
calculated for loans making reference thereto.

Project.   Shall mean the Land and the construction of the Improvements thereon.

Project Approvals.   All approvals, consents, waivers, orders, agreements,
acknowledgements, authorizations, permits and licenses required under applicable
Requirements or under the terms of any restriction, covenant or easement
affecting the Project, or otherwise necessary or desirable, for the ownership,
acquisition, construction, equipping, use, occupancy and operation of the
Project and the Improvements, whether obtained from a Governmental Authority or
any other Person including, without limitation, any necessary grading permit,
recorded plats, so-called “MIHU Agreement,” site development plans, and building
permits.

Project Budget.   The budget for total estimated Project Costs, submitted by
Borrower, approved by Agent and the Construction Inspector, and attached hereto
as Exhibit C.

Project Completion.   With respect to the construction of the Improvements, the
reasonable determination by Agent that (i) Borrower has achieved Full Completion
of the Improvements in accordance with the Plans and Specifications and the
terms and conditions hereof, and (ii) Borrower has satisfied all of the
conditions of Section 13.8 hereof for the release of the Retainage.

Project Costs.   The sum of all Direct Costs and Indirect Costs that will be
incurred by Borrower in connection with reimbursing Borrower for the acquisition
costs of the Land, all accrued architectural and other construction expenses
prior to the date of this Agreement, the construction and completion of the
Improvements, all as set forth in the Project Budget.

Property Agreements.   Shall mean those certain agreements entered into by
Borrower with Kellogg-CCP, LLC, the Seller of the Land (and/or certain its
Affiliates), setting forth certain rights and obligations of the parties derived
from and surviving Borrower’s purchase of the Land, as set forth in Exhibit K
hereto.

Punch List Items.   Shall mean details of construction, decoration and
mechanical and electrical adjustment which in the aggregate are minor in
character and do not materially interfere with a tenant’s or occupant’s use or
enjoyment of the Improvements.

Record.   Any record, including computer records, maintained by Agent with
respect to the balance due under the Loan.

Regulatory Change.   Shall mean the occurrence, after the date of this
Agreement, of any of the following which, in each case, affects similarly
situated banks or financial institutions generally

 

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and is not applicable to a Lender primarily by reason of such Lender’s
particular conduct or condition: (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration interpretation, implementation or application
thereof by any governmental authority or (c) the making or issuance of any
request, rule guideline or directive (whether or not having the force of law) by
any governmental authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all request, rules guidelines or directives promulgated by the
Lender for International Settlements, the Basel Committee on Banking Supervision
or any successor or similar authority or the Unites States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Regulatory Change”, regardless of the date enacted, adopted or issued.

Requirements.   Any law, ordinance, code, order, rule or regulation of any
Governmental Authority (in each instance relating in any way to the acquisition,
ownership, construction, use, occupancy and operation of the Project).

Required Equity Funds.   The amount of $15,392,941, of which $15,392,541 shall
be contributed by Borrower as a condition precedent to the closing of the Loan
(and which shall include the purchase price of the Land), plus such additional
amount as Lender may require from time to time pursuant to Section 9.12 hereof.

Required Lenders.   As of any date, Lenders holding at least sixty-six and two
thirds percent (66 2/3%) of the outstanding principal amount of the Note on such
date; and if no such principal is outstanding, Lenders whose aggregate
Commitments constitute at least sixty-six and two thirds percent (66 2/3%) of
the Total Commitment.

Reserve Collateral.   Has the meaning set forth in Section 5(c) herein.

Restricted Cash Management Account.   Has the meaning set forth in Section 9.22
herein.

Retainage.   Has the meaning set forth in Section 2.3 herein.

Second Reduction Conditions.   Shall mean, as of the date of determination, the
following conditions:

(i)         each of the First Reduction Conditions have been satisfied and
remain satisfied;

(ii)        no Event of Default shall have occurred and be continuing;

(iii)       the Debt Yield is greater than or equal to 8.40% (for the purposes
of calculating Debt Yield in connection with the determination of the Second
Reduction Conditions, (a) “all revenues from the project” (as set forth in the
definition of Net Operating Income) shall mean the monthly gross revenue based
on the six month period prior to calculation, annualized and (b) Operating
Expenses shall mean those Operating Expenses for the three (3) month period
immediately preceding the date of calculation, annualized) with management fees
equal to the greater of actual management fees or three and one-quarter percent
(3.25%) of the annual gross revenues from the Project; and

 

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(iv)       at least eighty percent (80%) of the residential rental units shall
be occupied pursuant to Leases in full force and effect.

Second Reduction Condition Certification.   Has the meaning set forth in
Section 4.3 herein.

Security Documents.   The Deed of Trust, the Assignment of Project Documents,
the Assignment of Leases and Rents, the Financing Statements, Assignment of
Hedging Agreement, the Assignment of Management Agreement, the Assignment of
Development Agreement, and the Guaranty, and any other agreement, document or
instrument now or hereafter securing the Obligations.

Significant Holders.   Has the meaning set forth in Section 8.27 herein.

Single Purpose Entity   shall mean a corporation, limited partnership or limited
liability company which at all times on and after the date hereof, unless
otherwise approved in writing by the Agent:

(a)       is organized solely for the purpose of one of the following:
(i) acquiring, developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the Project, entering into this Agreement,
refinancing the Project in connection with a permitted repayment of the Loan,
and transacting any and all lawful business that is incident, necessary and
appropriate to accomplish the foregoing or (ii) acting as the sole member of
Borrower;

(b)       is not engaged and will not engage in any business unrelated to
(i) the acquisition, development, ownership, management or operation of the
Project or (ii) acting as the sole member of Borrower;

(c)       does not have and will not have any assets other than those related to
(i) the Project or (ii) its membership interest in Borrower;

(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 partnership or
membership interests in violation of this Agreement (if such entity is a general
partner in a limited partnership or a member in a limited liability company), or
any amendment of its articles of incorporation, by-laws, limited partnership
certificate, limited partnership agreement, articles of organization,
certificate of formation or operating agreement (as applicable) with respect to
the matters set forth in this definition without the prior written consent of
the Agent;

(e)       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 certificate of limited partnership
and limited partnership agreement, or (iii) a corporation, has a certificate of
incorporation or articles of incorporation, that in each case provide that such
entity shall not, without the consent without the unanimous written consent of
all of its partners or members: (A) dissolve, merge, liquidate or consolidate
itself or any Person in which it has a direct or indirect legal or beneficial
ownership interest; (B) engage in any other business activity or permit any
Person in which it has a direct or indirect legal or beneficial ownership
interest to engage in any other business activity, in each case except as
permitted pursuant to the Loan Documents, (C) file a

 

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bankruptcy or insolvency petition or otherwise institute insolvency proceedings
with respect to itself or to any other Person in which it has a direct or
indirect legal or beneficial ownership interest, or (D) amend its organizational
documents with respect to the matters set forth in this definition without the
consent of the Agent;

(f)       subject to the cash flow availability from the Project, 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, 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 contemplated business operations; provided, that the foregoing
shall be limited to the extent that the Project generates enough gross revenue
which is received by Borrower to pay all liabilities with respect to the
Project; provided, however, the foregoing shall not require any member of
Borrower to make any additional capital contributions to Borrower;

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

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

(i)        has not commingled and will not commingle its funds or assets with
those of any other Person;

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

(k)       has maintained and will maintain financial statements that properly
and accurately show its separate assets and liabilities and do not show the
assets or liabilities of 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;

(l)        has paid and will pay its own liabilities and expenses, including,
but not limited to, the salaries of its own employees (if any), 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;

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

(n)       has not incurred and will not incur any debt other than the Loan,
other than as permitted by Section 10.4 hereof. No debt other than the Loan may
be secured (subordinate or pari passu) by the Project;

(o)       has not and 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 except as permitted pursuant to this
Agreement;

(p)       has not and will not acquire obligations or securities of its members
or shareholders or any other affiliate;

 

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

(r)       maintains and uses and will maintain and use separate invoices and
checks bearing its name. The stationary, invoices, and checks utilized by the
Single 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 Single Purpose Entity’s agent;

(s)       except in connection with the Loan, has not pledged and will not
pledge its assets for the benefit of any other Person;

(t)       has conducted business, held itself out and identified itself and will
conduct business, hold itself out and identify itself as a separate and distinct
entity under its own name or in a name franchised or licensed to it by a Person
other than an affiliate of Borrower and not as a division or part of any other
Person;

(u)       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;

(v)       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 securities issued
by an entity that is not an affiliate or subject to common ownership with such
entity);

(w)       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 as disclosed to Agent in writing and otherwise except 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;

(x)       has not and will not have any obligation to indemnify its partners,
officers, directors or members, as the case may be, unless such obligation is
fully subordinated to the Obligations; and

(y)       does not and will not have any of its obligations guaranteed by any
affiliate (except for the Guaranty and the Indemnity Agreement).

SNDA.   An agreement among Lender, Borrower and a tenant under a commercial
Lease pursuant to which, among other things, such tenant agrees to subordinate
its rights under the Lease to the lien of the Deed of Trust and agrees to
recognize Lender or its successor in interest as landlord under the Lease in the
event of a foreclosure under the Deed of Trust .

Stored Materials.   Has the meaning set forth in Section 2.7 herein.

Subcontractor Default Surety Program.   A master insurance program maintained by
the General Contractor in lieu of subcontractor payment and performance bonds
with a per loss policy limit of $20,000,000 and an annual policy limit of
$40,000,000.

 

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Subsidiary.   Any corporation, partnership, association, trust, or other
business entity of which the designated parent shall at any time own directly,
or indirectly through a Subsidiary or Subsidiaries, at least a majority (by
number of votes) of the outstanding voting interests therein.

Substantial Completion and Substantially Completed.   The term “Substantial
Completion”, or “Substantially Completed”, as it applies to the Improvements
shall mean the date when all work required by the Plans and Specifications and
the other Construction-Related Contracts has been completed lien free and
materially in accordance with all Requirements (other than Punch List Items and
minor items which can be fully completed without material interference with the
use of the Improvements, or which because of the season, weather or nature of
the items are not practical to do at the time Substantial Completion would
otherwise be determined hereunder) and the final certificate of occupancy for
the Project (which may be conditioned only on the completion of out-of-season
landscaping) and such of the leasable space as is then occupied by any tenants
has been issued.

Survey.   An instrument survey of the Land and the Improvements prepared in
accordance with Lender’s survey requirements, such survey to be reasonably
satisfactory to Agent in form and substance.

Surveyor Certificate.   With respect to any Survey, a certificate executed by
the surveyor who prepares such Survey dated as of a recent date and containing
such information relating to the Project as Agent or the Title Insurance Company
may require, such certificate to be satisfactory to Agent in form and substance.

Taking.   Any condemnation for public use of, or damage by reason of, the action
of any Governmental Authority, or any transfer by private sale in lieu thereof,
either temporarily or permanently.

Taxes.   Any and all income, stamp, or other taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions, or
conditions of any nature now or hereafter imposed, levied, collected, withheld,
or assessed by any jurisdiction or any political subdivision thereof or taxing
or other authority therein, and any and all interest, penalties, or similar
liability with respect thereto.

Termination Date.   The Initial Maturity Date, or the date of the termination of
Lender’s obligations to make Advances pursuant to Section 14.2 hereof, whichever
date occurs first.

Third Party Consent.   Has the meaning set forth in Section 10.3(a) herein.

Title Insurance Company.   Chicago Title Insurance Company.

Title Policy.   An ALTA standard form title insurance policy issued by the Title
Insurance Company (with such reinsurance, if any as Agent may require, any such
reinsurance to be with direct access endorsements) in an amount not less than
the Loan Amount insuring the priority of the Deed of Trust and that Borrower
holds marketable fee simple title to the Project, subject only to such
exceptions as Agent reasonably may approve, and shall contain such endorsements
and affirmative insurance as Agent in its reasonable discretion may require.

 

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

Variable Rate.   Shall mean a per annum rate equal to the sum of the Prime Rate
plus one hundred (100) basis points, points. Upon Borrower’s satisfaction of the
First Reduction Conditions as determined by Agent, the Variable Rate shall be
reduced to the Prime Rate plus Seventy-Five (75) basis points. Upon Borrower’s
satisfaction of the Second Reduction Conditions as determined by Agent, the
Variable Rate shall be reduced to the Prime Rate plus Twenty-Five (25) basis
points. During the Extension Period, if applicable, the Variable Rate shall mean
a per annum rate equal to the sum of the Prime Rate plus twenty-five (25) basis
points.

Variable Rate Advance.   Shall mean that portion of the outstanding principal
balance of the Loan while a Variable Rate is in effect hereunder.

WF Oxford.   Shall have the meaning assigned to such term in the definition of
“Permitted Transfers” herein.

1.2     Rules of Interpretation.

(a)      A reference herein, and in any other Loan Document, to any Loan
Document, agreement, budget, document or schedule shall include such agreement,
budget, document or schedule as revised, amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Agreement.

(b)       A reference to any Exhibit hereto shall be deemed to specifically
incorporate the terms and provisions of such Exhibit herein.

(c)       The singular includes the plural and the plural includes the singular.

(d)       A reference to any law includes any amendment or modification to such
law.

(e)       A reference to any Person includes its permitted successors and
permitted assigns.

(f)       Accounting terms not otherwise defined herein have the meaning
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.

(g)       The words “approval” and “approved”, as the context so determines,
means an approval in writing given to the party seeking approval after full and
fair disclosure to the party giving approval of all material facts necessary in
order to determine whether approval should be granted.

(h)       Reference to a particular “Section ” or “Section” refers to that
section of this Agreement unless otherwise indicated.

 

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2.     AGREEMENT TO MAKE ADVANCES; LIMITATIONS.

2.1     Agreement to Make Advances.

Subject to the terms and conditions of this Agreement, each of the Lenders
agrees severally to make a loan to Borrower up to a maximum aggregate principal
amount equal to such Lender’s Commitment, and Borrower may borrow from time to
time between the Closing Date and the earliest of (x) sixty (60) days prior to
Initial Maturity Date or (y) the Termination Date, such amounts as are requested
by Borrower up to a maximum aggregate principal amount equal to the Loan Amount
to pay for Project Costs actually incurred by Borrower and reflected in the
Project Budget as being funded by the Loan. Any advances of proceeds of the Loan
shall be made by Lenders pro rata in accordance with each Lender’s Commitment
Percentage.

2.2     Project Budget.

The Project Budget reflects the purposes and the amounts for which funds to be
advanced by Lenders under this Agreement are to be used. Changes in the Project
Budget may be made only in accordance with the following:

(a)       Reductions in line items for Direct Costs may be made and the savings
may be reallocated by Borrower to the Contingency Reserve only at such time as
Agent and Construction Inspector reasonably concur that either/ or both of the
following have occurred: (x) all work covered by a particular Direct Cost line
item has been completed satisfactorily and paid for in full, or (y) the
guaranteed price for such Direct Cost line item pursuant to the Construction
Contract is in an amount which is less than the amount allocated to such Direct
Cost line item in the Project Budget and is covered by the Construction
Contract.

(b)       Reductions in line items for Indirect Costs may be made, and the
savings may be reallocated by Borrower to the Contingency Reserve only at such
time as Agent shall reasonably determine based upon a certification of Borrower
that either (x) all work covered by a particular Indirect Cost line item has
been completed satisfactorily or paid for in full, or (y) the guaranteed price
for such Indirect Cost line item pursuant to the applicable Construction
Contract is in an amount which is less than the amount allocated to such
Indirect Cost line item in the Project Budget.

(c)       No reallocations to the line items in the Project Budget for operating
deficits and reserves, in an amount greater than five percent (5%) in the
aggregate, of such line item may be made without Agent’s prior written approval
in each instance.

(d)       Subject to the provisions of Section 2.6, no reallocations or
expenditures shall be made from the Contingency Reserve unless the balance which
would remain in the Contingency Reserve after the proposed reallocation or
expenditure is made will be adequate for other contingencies given the then
existing status of the Project and the Loan, as determined to Agent’s reasonable
satisfaction.

(e)       In the event Agent determines, in its sole but reasonable judgment,
that an Equity Deficiency exists pursuant to Section 9.12, Agent may, in its
sole discretion, reallocate from the Project Budget line item “Developer’s Fee”
to any other line item in the

 

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Project Budget an amount that Agent determines is required to bring the Loan
back into balance.

(f)     Reallocations of the Project Budget resulting from any change orders
permitted under Section 10.3.

(g)     All other line item reductions and reallocations of the Project Budget
shall require Agent’s prior written approval.

Agent’s approvals and decisions regarding line item reallocations of the Project
Budget and reallocations or expenditures from the Contingency Reserve on the
Project Budget shall be made in good faith and not in an arbitrary or capricious
manner having due regard for the advice of its Construction Inspector.

2.3     Amount of Advances.

In no event shall Lenders be obligated to advance more than their respective
Commitments. In no event shall any Advance for Direct Costs of constructing the
Improvements exceed an amount equal to (a) the total cost of the labor,
materials, fixtures, machinery and equipment completed, approved and
incorporated into the Land or the Improvements prior to the date of the Draw
Request for such Advance, less (b) retainage in an amount equal to ten percent
(10%) of such total cost (“Retainage”), less (c) the total amount of any
Advances previously made by Lender for such Direct Costs. Retainage shall be
advanced by Lenders to Borrower upon satisfaction of the conditions set forth in
Section 13.8. With respect to any other Direct Costs and all Indirect Costs, in
no event shall any Advance exceed an amount equal to the amount of such Direct
Costs and Indirect Costs, incurred by Borrower prior to the date of the Draw
Request for such Advances, and theretofore paid or to be paid with the proceeds
of such Advance, less the total amount of any Advances previously made by
Lenders for such Direct Costs and Indirect Costs. Notwithstanding the foregoing,
upon the joint request of the Contractor and Borrower, which shall not in any
case be made with respect to any individual Contractor unless and until the work
of such Contractor under the applicable Construction Contract is fifty percent
(50%) completed in a good and workmanlike fashion, and in accordance with the
Plans and Specifications (as certified by the Construction Inspector), then the
Retainage with respect to such Construction Contract shall be reduced to zero
percent (0%).

2.4     Quality of Work.

No Advance shall be due unless all work done at the date the Draw Request for
such Advance is submitted is done in a good and workmanlike manner and without
defects, as confirmed by the report of the Construction Inspector.

2.5     Cost Overruns and Savings.

(a)        If Borrower becomes aware of any change in Project Costs which will
increase or decrease a category or line item of Project Costs reflected on the
Project Budget by more than ten percent (10%) in the aggregate of any such line
item, Borrower shall immediately notify Agent in writing and promptly submit to
Agent for its approval a revised Project Budget, which Agent shall review
promptly.

 

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(b)     If the revised Project Budget indicates an increase in a category or
line item of Project Costs and such increase (after taking into consideration
any reallocations by Borrower) results in an increase in the aggregate Project
Budget, no further Advances need be made by Agent unless and until (i) the
revised Project Budget so submitted by Borrower is approved by Agent, which
approval shall not be unreasonably withheld, and (ii) Borrower has complied with
the provisions of Section 9.12 hereof.

(c)     If the revised Project Budget indicates a decrease in a category or line
item of Project Costs, no reductions in Project Costs will be made or savings
reallocated by Borrower unless and until (i) the revised Project Budget so
submitted by Borrower is approved by Agent, and (ii) in the case of decreases in
a category or line item of Direct Costs, Borrower has furnished Agent and the
Construction Inspector with evidence satisfactory to them that the labor
performed and materials supplied in connection with such category or line item
of Direct Costs have been satisfactorily completed in accordance with the Plans
and Specifications and paid for in full.

2.6     Contingency Reserve.

The disbursement of the remaining Contingency Reserve shall be made with the
approval of Agent, which shall not be unreasonably withheld, provided, however,
that Borrower has supplied Agent with sufficient documentation as Agent may
reasonably require to justify the disbursement of any remaining Contingency
Reserve.

2.7     Stored Materials.

Agent and Lenders shall not be required to disburse any funds for any materials,
furnishings, fixtures, machinery or equipment not yet incorporated into the Land
or Improvements (“Stored Materials”), provided, however, upon Agent’s receipt of
reasonably satisfactory evidence that each of the items below in this
Section 2.7 have been satisfied, Lenders shall disburse funds for Stored
Materials, and any such disbursement shall be so made contingent upon Agent
receiving satisfactory evidence that:

(a)     the Stored Materials are components in a form ready for incorporation
into the Land or the Improvements and shall be so incorporated within a period
of thirty (30) days;

(b)     the Stored Materials are stored at the Land, or at such other site as
Agent shall reasonably approve, and are protected against theft and damage;

(c)     the Stored Materials have been paid for in full, or will be paid for
with the funds to be disbursed and all lien rights and claims of the supplier
have been released or will be released upon payment with disbursed funds;

(d)     Agent, for the benefit of Lenders, has or will have upon payment with
disbursed funds a perfected, first priority security interest in the Stored
Materials;

(e)     the Stored Materials are insured for an amount equal to their
replacement cost;

 

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(f)     Borrower shall deliver to Lender a schedule of any such Stored Materials
in connection with any Draw Request for Advances relating to Stored Materials;

(g)     the Construction Inspector shall have the right to view and inspect the
Stored Materials; and

(h)     the aggregate amount of advances for Stored Materials that have not yet
been incorporated into the Improvements shall not exceed $1,000,000.00.

3.     MAKING THE ADVANCES.

3.1     Draw Request.

At such time as Borrower shall desire to obtain an Advance, Borrower shall
complete, execute and deliver to Agent “Borrower’s Requisition” in the form of
Exhibit D attached hereto. Advances shall be in minimum increments of at least
$500,000.00, except for the initial Advance made on the date of this Agreement
and the final Advance made pursuant to the terms of this Agreement, each of
which may be in a lesser amount. Each Borrower’s Requisition shall be
accompanied by:

(a)     If Borrower’s Requisition includes payments for Direct Costs, a
completed and itemized Direct Cost Statement in the form of Schedule I of
Exhibit D attached hereto, executed by Borrower, together with invoices for all
items of Direct Cost covered thereby;

(b)     If Borrower’s Requisition includes amounts to be paid to the applicable
Person under the Construction-Related Contracts: (i) a completed and fully
itemized Application and Certificate for Payment (AIA Document G702 or similar
form approved by Lender) containing the certification of the Contractor and the
Architect as to the accuracy of same; (ii) a certificate of the Contractor in
the form of Exhibit E attached hereto; and (iii) copies of requisitions and
invoices from subcontractors and materialmen supporting all items of cost
covered by such application;

(c)     If Borrower’s Requisition includes payments for Indirect Costs, it shall
be accompanied by a completed and itemized Indirect Cost Statement in the form
of Schedule II of Exhibit D attached hereto, executed by Borrower, together with
invoices for all items of Indirect Costs covered thereby; provided that, with
respect to Advances for the payment of interest due under the Loan, Borrower
hereby requests that Agent and Lenders make an Advance for such amount on each
date such payment is due, and provided there is no Default or Event of Default,
each Lender shall make such Advance to Agent for the payment of interest due
under the Loan. The provisions of this Section 3.1(c) shall not limit Borrower’s
absolute and unconditional obligation to pay such interest regardless of whether
Loan proceeds are available or advanced therefor.

(d)     If requested by Agent, an accurately completed and valid partial waiver
and subordination of lien (hereinafter, the “Lien Form”) in the form required by
applicable law, executed by the applicable Contractor, subcontractors, laborers
and materialmen such Lien Form to provide that subject to the payment of the
amount set forth in Borrower’s Requisition, the Contractor waives any and all
lien rights for labor and materials, or rental

 

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equipment, appliances or tools, performed or furnished through the last day of
the period ending on the date designated in the Lien Form (hereinafter, the
“Payment Period Date”), except for Retainage, unpaid agreed or pending change
orders, and disputed claims as stated in the Lien Form;

(e)     Copies of all change orders and construction change directives,
accompanied by a change order summary prepared by and executed by Borrower,
copies of all subcontracts, and, to the extent requested by Agent, of all
inspection or test reports and other documents relating to the construction of
the Improvements, not previously delivered to Agent;

(f)     If Borrower’s Requisition includes payment for Stored Materials, it
shall be accompanied by evidence as to the satisfaction of the requirements set
forth in Section 2.7 hereof; and

(g)     Such other information, documentation and certification as Agent shall
reasonably request.

Each Draw Request shall constitute a representation and warranty by Borrower as
of the date of such Draw Request that all of the conditions set forth in this
Agreement to such Advance, including, without limitation, as applicable,
Section 13, have been in all material respects satisfied on the date of such
Draw Request.

3.2     Notice and Frequency of Advances.

Each Draw Request shall be submitted to Agent at least ten (10) Business Days
prior to the date of the requested Advance, and no more frequently than once
each month. Agent shall act upon such request within such ten (10) Business Day
period, which action may include, without limitation, funding the requested Draw
Request, or specifying the basis for not funding and, when applicable,
requesting additional information and supporting documentation.

3.3     Deposit of Funds Advanced.

Borrower shall open and maintain a non-interest bearing loan checking account
with Agent (the “Loan Checking Account”). Except as otherwise provided for in
Section 3.4, Agent shall deposit the proceeds of each Advance into the Loan
Checking Account.

3.4     Advances to Contractor; to Others.

After the occurrence and during the continuance of an Event of Default, at their
option, Lenders may make any or all Advances (a) for Direct Costs incurred under
the Construction Contract directly to Contractor for deposit in an appropriately
designated special bank account, (b) through the Title Insurance Company, or
(c) to any Person to whom Agent in good faith determines payment is due. Any
portion of the Loan so disbursed by Lenders shall be deemed disbursed as of the
date on which Lenders makes such disbursement and all such Advances shall
satisfy pro tanto the obligations of Lenders hereunder and shall be secured by
the Deed of Trust and the other Security Documents as fully as if made directly
to Borrower. The execution of this Agreement by Borrower

 

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shall, and hereby does, constitute an irrevocable authorization so to advance
the proceeds of the Loan. No further authorization from Borrower shall be
necessary to warrant such Advances.

3.5     Advances Do Not Constitute a Waiver.

No Advance made by Agent or Lenders shall constitute a waiver of any of the
conditions to Lenders’ obligation to make further Advances nor any of the terms
and conditions of this Agreement, nor, in the event Borrower fails to satisfy
any such condition, shall any such Advance have the effect of precluding Agent
from thereafter declaring such failure to satisfy a condition to be an Event of
Default.

3.6     Right to Retain the Construction Inspector.

(a)     Agent shall have the right to retain, at Borrower’s cost and expense,
the Construction Inspector to perform various services on behalf of Agent and
Lenders, including, without limitation, to review the Project Budget and the
Plans and Specifications, to make periodic inspections (approximately at the
date of each Draw Request) for the purpose of assuring that construction of the
Improvements to date is in materially accordance with the Plans and
Specifications, to advise Agent and Lenders of the anticipated cost of and time
for completion of construction of the Improvements and the adequacy of any
Contingency Reserve, and to review the Construction Contract and subcontracts.

(b)     The fees of the Construction Inspector shall be paid by Borrower
forthwith upon billing therefor and expenses incurred by Agent and Lenders on
account thereof shall be reimbursed to Agent and Lenders forthwith by Borrower
upon request therefor.

(c)     None of Agent, any Lender nor the Construction Inspector shall have any
liability to Borrower on account of (i) the services performed by the
Construction Inspector, (ii) any neglect or failure on the part of the
Construction Inspector to properly perform its services, or (iii) any approval
by the Construction Inspector of construction of the Improvements, except with
respect to any liability resulting from Construction Inspector’s gross
negligence or willful misconduct. Neither Lender nor the Construction Inspector
assumes any obligation to Borrower or any other Person concerning the quality of
construction of the Improvements or the absence therefrom of defects.

3.7     Development Fee.

Subject to the terms and conditions of this Agreement, Agent and Lenders agree
that Advances for the payment of a development fee to Developer, in a total
amount as set forth in the Project Budget, shall be made on a monthly basis in
equal installments, commencing on the date of the first Advance following the
Initial Advance and terminating on November 26, 2015; provided, however, that
if, at any time after June 26, 2015, the Construction Inspector shall determine,
in its reasonable discretion, that the Contingency Reserve then remaining in the
Project Budget is inadequate, Advances in respect of such development fee shall
be suspended until the Construction Inspector shall again be satisfied, in its
reasonable discretion, as to the adequacy of the Contingency Reserve, at which
time such monthly Advances shall resume, in an amount then determined by
dividing (x) the amount of such development fee then remaining unadvanced, by
(y) the number of

 

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months then remaining until November 26, 2015, and shall continue for so long as
Construction Inspector shall continue to be satisfied as to the adequacy of the
Contingency Reserve.

4.     THE NOTE, INTEREST RATE, REPAYMENT OF LOAN.

4.1     The Note.

The obligation of Borrower to pay the Loan Amount or, if less, the aggregate
unpaid principal amount of all Advances made by Lenders hereunder plus accrued
interest thereon, shall be evidenced by one or more separate promissory notes in
the form of Exhibit H, annexed hereto, with one Note being payable to each
Lender in the original principal amount equal to such Lender’s Commitment, such
promissory notes to be in the aggregate original principal amount of Thirty-Five
Million Nine Hundred Sixteen Thousand Eight Hundred Sixty-two and 00/100 Dollars
($35,916,862.00) (together with any additional Notes delivered as provided
herein, as the same may be amended, restated, supplemented or otherwise modified
from time to time “Note”). The Note shall not be necessary to establish the
indebtedness of Borrower to Lender on account of Advances made under this
Agreement.

4.2     The Record.

Borrower irrevocably authorizes Agent to make or cause to be made, at or about
the time of the Drawdown Date of any Advance or at the time of receipt of any
payment of the principal of the Note, an appropriate notation on Agent’s Record
reflecting the making of such Advance or (as the case may be) the receipt of
such payment. The outstanding amount of the Loan set forth on Agent’s Record
shall be prima facie evidence (absent manifest error) of the principal amount
thereof owing and unpaid to Agent and Lenders, but the failure to record, or any
error in so recording, any such amount on Agent’s Record shall not limit or
otherwise affect the obligations of Borrower hereunder or under the Note to make
payments of principal or interest on the Note when due. Further, the outstanding
amount of the Loan as reflected on the Record from time to time shall be
considered correct and binding on Borrower, absent manifest error, unless within
thirty (30) Business Days after receipt of any notice by Borrower of such
outstanding amount, Borrower shall notify Agent to the contrary.

4.3     Interest on the Loan.

Subject to the limitations and provisions of this Agreement, principal amounts
outstanding under the Loan shall bear interest, at Borrower’s selection, at
either the Effective LIBOR or the Variable Rate.

(a)    Upon Borrower’s determination that it has satisfied the First Reduction
Conditions, Borrower shall deliver to Agent a certification stating that the
First Reduction Conditions have been satisfied (the “First Reduction Conditions
Certification”). Within ten (10) Business Days from the date of receipt by Agent
of First Reduction Conditions Certification, Agent shall notify Borrower in
writing stating either that (a) Borrower has satisfied the First Reduction
Conditions, or (b) that the First Reduction Conditions have not been satisfied
and identifying such conditions which have not been satisfied. Upon Agent’s
notification to Borrower that the First Reduction Conditions have been
satisfied, subject to

 

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the limitations and provisions of this Agreement, the Effective LIBOR and the
Variable Rate shall be reduced as provided for in the definitions thereof.

(b)     Upon Borrower’s determination that it has satisfied the Second Reduction
Conditions, Borrower shall deliver to Agent a certification stating that the
Second Reduction Conditions have been satisfied (the “Second Reduction
Conditions Certification”). Within ten (10) Business Days from the date of
receipt by Agent of the Second Reduction Conditions Certification, Agent shall
notify Borrower in writing stating either that (a) Borrower has satisfied the
Second Reduction Conditions, or (b) that the Second Reduction Conditions have
not been satisfied and identifying such conditions which have not been
satisfied. Upon Agent’s notification to Borrower that the Second Reduction
Conditions have been satisfied, subject to the limitations and provisions of
this Agreement, the Effective LIBOR and the Variable Rate shall be reduced as
provided for in the definitions thereof.

4.4     Notice Regarding Advances.

(a)     Borrower shall select in connection with a request for a new Advance,
from the alternatives provided in this Agreement, by giving Agent written notice
(a “Borrower’s Notice”): (i) initially, prior to the date of this Agreement,
(ii) thereafter, not less than two (2) Business Days prior to the end of each
Interest Period applicable to a LIBOR Advance, (iii) on any Business Day on
which Borrower desires to select a Variable Rate Advance and/or convert an
outstanding LIBOR Advance to a Variable Rate Advance, and (iv) stating amount of
such Advance, if such Borrower’s Notice is delivered in connection with a
request for an Advance pursuant to Section 3.1 hereof. Notwithstanding anything
to the contrary herein, the obligations of Agent hereunder shall be subject to
Sections 4.5 and 4.6 of this Agreement.

A Borrower’s Notice with respect to a LIBOR Advance shall be irrevocable and
binding on Borrower.

4.5     Alternative Interest Rates, Etc.

(a)     Intentionally Omitted.

(b)     In the event Agent shall reasonably and in good faith determine (which
determination shall be conclusive) that: (i) by reason of circumstances
affecting the applicable London interbank market, adequate and reasonable
methods do not exist for ascertaining the LIBOR which would otherwise determine
the rate of interest to be applicable to any LIBOR Advance during any Interest
Period, (ii) deposits of the relevant amount and for the relevant Interest
Period for LIBOR Advances requested by Borrower are not available to Lenders in
the applicable London interbank market, or (iii) the relevant rates of interest
referred to in the definition of LIBOR upon the basis of which the rate of
interest for LIBOR based loans for such Interest Period are to be determined are
not likely adequately to cover the cost to such Lender of making or maintaining
LIBOR based Loans for such Interest Period, Agent shall forthwith give notice
(which may be by telephone, telecopy, telex or cable, in each case confirmed
immediately in writing in the manner specified in Section 24 of this Agreement)
of such determination (which shall be conclusive

 

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and binding on Borrower) to Borrower as soon as it makes such determination. In
such event: (i) any Borrower’s Notice with respect to a LIBOR Advance shall be
automatically converted into a request for a Variable Rate Advance; (ii) each
LIBOR Advance will automatically, on the last day of the then current Interest
Period thereof, convert into a Variable Rate Advance; and (iii) the obligations
of Lenders to make LIBOR Advances shall be suspended until Agent determines in
good faith that the circumstances giving rise to such suspension no longer
exist, whereupon Agent shall promptly notify Borrower.

All payments for the account of Lenders shall be applied to the respective
accounts of Lenders in accordance with each Lender’s Commitment Percentage of
the Loan. Agent will disburse such payments to Lenders on the date of receipt
thereof if received prior to 10:00 a.m. Eastern Time on such date and, if not,
on the next Business Day. Any and all interest rate selection and conversion
provisions in this Agreement are to be administered by Agent and to be allocated
on a pro rata basis to the Note held be each Lender based upon such Lender’s
Commitment Percentage.

4.6     Illegality.

Notwithstanding any other provision of this Agreement or the Note, (a) if the
introduction of or any change in any law or regulation (or change in the
interpretation thereof) applicable to any Lender or its Libor Lending Office
shall make it unlawful, or (b) if any central bank or other governmental
authority having jurisdiction over any Lender or its Libor Lending Office shall
assert in good faith that it is unlawful for such Lender or its Libor Lending
Office to make LIBOR Advances to Borrower or to continue to fund or maintain
LIBOR Advances to Borrower, then, on giving notice (which may be by telephone,
telecopy, telex or cable, in each case confirmed immediately in writing in the
manner specified in Section 24 of this Agreement) thereof by Agent to Borrower,
(i) the obligation of Lenders to Borrower to make LIBOR Advances shall
terminate, and (ii) the LIBOR Advance will automatically, on the last day of the
then current Interest Period thereof or within such earlier period as may be
required by law or regulation, convert into a Variable Rate Advance.

4.7     Default Interest/Late Charge.

(a)     Upon the occurrence and during the continuation of an Event of Default,
at Agent’s option, or upon the request of the Required Lenders, the Loan and all
other amounts payable hereunder or under any of the other Loan Documents shall
bear interest payable on demand at a rate per annum equal to six percent
(6%) above the then applicable highest rate of interest hereunder until such
amount shall be paid in full (after as well as before judgment) (the “Default
Rate”).

(b)     In addition to other charges described in the Loan Documents, and
without derogating from the right of Agent to accelerate the Obligations upon
the occurrence of an Event of Default, if a regularly scheduled payment (other
than the payment of principal due on the Maturity Date) is fifteen (15) days or
more late, Borrower will be charged five percent (5.0%) of the unpaid portion of
the regularly scheduled payment or $25.00, whichever is greater. If Agent
accelerates the Obligations upon the occurrence of an Event of Default, and
Borrower does not pay the Obligations within ninety (90) days after Agent’s
demand,

 

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Borrower will, at Required Lenders’ option, be charged either five percent
(5.0%) of the unpaid principal plus accrued unpaid interest or $25.00, whichever
is greater.

4.8     Payments of Principal of Loan.

Prior to July 1, 2017, there shall be no scheduled payments of principal under
the Loan. On July 1, 2017, and on each Payment Date thereafter, including each
Payment Date during the Extension Period, if applicable, Borrower shall make
consecutive, equal monthly installments of principal in reduction of the Loan,
calculated by dividing by twenty-four (24) months, the full amount of
amortization that would be due and payable assuming an interest rate of 5% and a
thirty (30) year amortization schedule of the then outstanding principal balance
of the Loan. In all events, the entire principal balance of the Loan shall, if
not sooner paid by Borrower, be due and payable in full on the applicable
Maturity Date.

4.9     Prepayment.

(a)     Borrower may, on any Business Day, prepay the outstanding aggregate
principal amount of the Loan, in whole at any time, or ratably in part from time
to time without any premium or penalty, provided, however, that: (i) Borrower
gives Agent at least fifteen (15) days’ prior written notice of any such
prepayment specifying the date of prepayment and the principal amount to be
prepaid; (ii) each prepayment shall be accompanied by payment of accrued
interest to the date of such prepayment on the principal amount prepaid and if
an Agent/Lender Hedging Agreement is terminated, the amount due and payable
thereunder on account thereof; (iii) each partial prepayment shall be in an
integral multiple of $50,000.00; and (iv) with respect to LIBOR Advances such
prepayment shall be subject to a Make Whole Provision as set forth in
Section 4.11 herein (there being no premium payable for prepayments made of
funds bearing interest at the Variable Rate).

(b)     No amount prepaid with respect to this Note may be reborrowed.

(c)     Any partial prepayment of principal shall first be applied to any
installment of principal then due and then be applied to the principal due in
the reverse order of maturity, and no such partial prepayment shall relieve
Borrower of the obligation to pay each subsequent installment of principal when
due.

(d)     In the event the Loan or any portion thereof is prepaid during the first
twelve (12) months following the Closing Date, Borrower shall pay a fee to
Agent, for the benefit of Lenders, in an amount equal to 1% of the amount so
prepaid.

(e)     In the event the Loan or any portion thereof is prepaid during the
thirteenth (13th) through the eighteenth (18th) month following the Closing
Date, Borrower shall pay a fee to Agent, for the benefit of Lenders, in an
amount equal to .5% of the amount so prepaid.

4.10     Maturity.

Borrower promises to pay on the Maturity Date, and there shall become absolutely
due and payable on the Maturity Date, all principal of the Loan outstanding on
such date, together with any and all accrued and unpaid interest thereon and any
and all unpaid costs and expenses.

 

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4.11     Make Whole Provision.

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

4.12     Status of Lenders; Tax Documentation.

(a)     Each Lender shall deliver to the Borrower and to Agent, at the time or
times prescribed by applicable Laws or when reasonably requested by the Borrower
or Agent, such properly completed and executed documentation prescribed by
applicable Laws or by the taxing authorities of any jurisdiction and such other
reasonably requested information as will permit the Borrower or Agent, as the
case may be, to determine: (A) whether or not payments made hereunder or under
any other Loan Document are subject to Taxes; (B) if applicable, the required
rate of withholding or deduction; and (C) such Lender’s entitlement to any
available exemption from, or reduction of, applicable Taxes in respect of all
payments to be made to such Lender by the Borrower pursuant to this Loan
Agreement or otherwise to establish such Lender’s status for withholding tax
purposes in the applicable jurisdiction.

(b)     Without limiting the generality of the foregoing, if the Borrower is
resident for tax purposes in the United States:

(1)     any Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Borrower and Agent executed
originals of Internal Revenue Service Form W-9 or such other documentation or
information prescribed by applicable Laws or reasonably requested by the
Borrower or Agent as will enable the Borrower or Agent, as the case may be, to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements; and

(2)     each Foreign Lender that is entitled under the Code or any applicable
treaty to an exemption from or reduction of withholding tax with respect to
payments hereunder or under any other Loan Document shall deliver to the
Borrower and Agent (in such number of copies as shall be

 

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requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
request of the Borrower or Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

(A)       executed originals of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party;

(B)       executed originals of Internal Revenue Service Form W-8ECI;

(C)       executed originals of Internal Revenue Service Form W-8IMY and all
required supporting documentation;

(D)       in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under section 881(c) of the Code: (i) a certificate to
the effect that such Foreign Lender is not: (1) a “bank” within the meaning of
section 881(c)(3)(A) of the Code; (2) a “10 percent shareholder” of the Borrower
within the meaning of section 881(c)(3)(B) of the Code; or (3) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code; and executed
originals of Internal Revenue Service Form W-8BEN; or

(E)       executed originals of any other form prescribed by applicable Law as a
basis for claiming exemption from or a reduction in United States Federal
withholding tax together with such supplementary documentation as may be
prescribed by applicable Law to permit the Borrower or Agent to determine the
withholding or deduction required to be made.

(3)           If a payment made to a Lender under any Loan Document would be
subject to U.S. Federal withholding tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower or Agent, at the time or times prescribed
by law and at such time or times reasonably requested by the Borrower or Agent,
such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or Agent as may be necessary for the
Borrower or Agent to comply with its obligations under FATCA, to determine that
such Lender has or has not complied with such Lender’s obligations under FATCA
or to determine

 

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the amount to deduct and withhold from such payment. Solely for purposes of this
4.12, “FATCA” shall include any amendments made to FATCA after the date of this
Loan Agreement.

(4)       Each Lender shall promptly: (A) notify the Borrower and Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction; and (B) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws of any jurisdiction that the Borrower
or Agent make any withholding or deduction for taxes from amounts payable to
such Lender.

(c)          Unless required by applicable Laws, at no time shall Agent have any
obligation to file for or otherwise pursue on behalf of a Lender, or have any
obligation to pay to any Lender, any refund of Taxes withheld or deducted from
funds paid for the account of such Lender, as the case may be. If Agent or any
Lender determines, in its sole discretion, that it has received a refund of any
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts hereunder, it shall pay to the
Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by such Borrower Party hereunder with
respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses incurred by Agent or such Lender, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that the Borrower, upon the request of
Agent or such Lender, agree to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to Agent or such Lender in the event Agent or such Lender is required
to repay such refund to such Governmental Authority. This subsection (c) shall
not be construed to require Agent or the Borrower to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to each other or to any other Person.

5.         EXTENSION OF INITIAL MATURITY DATE.

(a)       At Borrower’s option, subject to satisfaction of the following terms
and conditions, Borrower shall have the option to extend the Maturity Date of
the Loan from the Initial Maturity Date to the Extended Maturity Date:

(i)        On or before the Initial Maturity Date, payment to Agent for the
benefit of Lenders of an extension fee equal to .20% of the aggregate amount of
the then Outstanding principal balance of the Loan (the “Extension Fee”);

(ii)       Borrower notifies Agent in writing no earlier than one hundred eighty
(120) days and no later sixty (60) days before the Initial Maturity Date of
Borrower’s election to request the extension, which notice shall be accompanied
by the above described Extension Fee;

 

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(iii)          The Improvements shall be Substantially Completed as of the date
of Borrower’s notice;

(iv)          On the date of the notification as provided above and on the
Initial Maturity Date, no Default or Event of Default is then occurring;

(v)           On the date of the notification as provided above and on the
Initial Maturity Date, the Loan to Value Ratio (based upon an “as-is” Appraised
Value) shall not exceed 65% based upon an updated Appraisal obtained not more
than sixty (60) days prior to the Initial Maturity Date.

(vi)          On the date of the notification as provided above and on the
Initial Maturity Date, the Debt Yield shall be greater than or equal to 9.5%.

(vii)         On the date of the notification as provided above and on the
Initial Maturity Date at least eighty percent (80%) of the residential rental
units shall be occupied pursuant to Leases in full force and effect.

(viii)        If a Hedging Agreement has been entered into in accordance with
Section 9.20 hereof, Borrower shall have (A) caused the terms of the Hedging
Agreement to be modified or caused a supplemental Hedging Agreement to be
entered into in accordance with the terms of Section 9.20 hereof on the same
terms and conditions as the original Hedging Agreement with the term thereof
expiring on the Extended Maturity Date and (B) delivered a copy of the
transaction confirmation, an ISDA Master Agreement or equivalent and any other
documents requested by Agent, all of which shall evidence Borrower’s compliance
with the preceding clause (A) of this clause.

(ix)         The representations and warranties made by Borrower and Guarantor
in the Loan Documents shall continue to be true and correct.

(x)          Guarantor shall have consented to the extension.

(xi)         Lenders’ unfunded Commitments shall be terminated as of the Initial
Maturity Date.

(xii)        No breach of any covenants imposed upon Borrower or Guarantor shall
exist.

(xiii)       Borrower and Guarantor shall have executed and delivered to Agent
such agreements and documents as Agent may reasonably require incident to the
extension.

(b)        For the purposes of calculating Debt Yield in connection with this
Article 5, (i) “all revenues from the project” (as set forth in the definition
of Net Operating Income) shall mean the monthly gross revenue based on the rent
roll for the six (6) month period immediately prior to the date of notification
of extension, annualized and (ii) Operating Expenses shall be those Operating
Expenses for the three (3) month period immediately

 

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preceding the date of notification of extension, annualized with management fees
equal to the greater of actual management fees or three and one-quarter percent
(3.25%) of the annual gross revenues from the Project.

(c)       No extension shall be effective unless and until Agent has confirmed,
in writing, Borrower’s compliance with all conditions precedent to the extension
of the Initial Maturity Date and the Extended Maturity Date, if applicable.
Agent shall promptly notify Borrower of its compliance or failure to have
complied with the foregoing provisions; and (1) if Borrower has failed to comply
with the provisions of subclauses (v) and (vi) of clause (a) above, then
Borrower may repay the Loan in an amount sufficient to satisfy the provisions of
said subclauses or post with Agent, for the benefit of the Lenders cash
collateral or a Letter of Credit, in an amount which if applied to the principal
balance of the Loan would cause Borrower to comply with the applicable
subclauses (such cash collateral or Letter of Credit, “Reserve Collateral”). The
Reserve Collateral shall be pledged to Agent, for the benefit of the Lenders in
a manner reasonably satisfactory to Agent. If Borrower posts Reserve Collateral,
it may thereafter, at its own expense, cause the Appraised Value to be
redetermined and if such Appraised Value would result in Borrower complying with
subclause (v) of clause (a) above, which shall be subject to confirmation by
Agent in the exercise of its reasonable judgment, and provided that subclauses
(vi) and (vii) of clause (a) are satisfied for the immediately preceding two
(2) calendar quarters, as reasonably determined by Agent, then Agent shall
promptly release the Reserve Collateral upon the written request of Borrower. If
the Reserve Collateral was posted solely in order to comply with subclause
(vi) of clause (a) above, upon subclause (vi) of clause (a) being satisfied
without giving effect to the Reserve Collateral for two (2) consecutive calendar
quarters, then Agent shall promptly release the Reserve Collateral upon the
written request of Borrower.

(d)       Any Reserve Collateral delivered under this Agreement shall be
additional security for the payment of the Debt. Upon the occurrence of an Event
of Default, Agent shall have the right, at its option, to draw on any Reserve
Collateral and to apply all or any part thereof to the payment of the items for
which such Reserve Collateral was established or to apply each such Reserve
Collateral to payment of the Obligations in such order, proportion or priority
as Agent may determine.

(e)       In addition to any other right Agent may have to draw upon a Letter of
Credit pursuant to the terms and conditions of this Agreement, Agent shall have
the additional rights to draw in full any Letter of Credit: (a) with respect to
any evergreen Letter of Credit, if Agent has received a notice from the issuing
bank that the Letter of Credit will not be renewed and a substitute Letter of
Credit is not provided at least thirty (30) days prior to the date on which the
outstanding Letter of Credit is scheduled to expire or (b) 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).

 

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6.         COMMITMENT FEE; PAYMENTS AND COMPUTATIONS.

(a)     Commitment Fee.

Borrower agrees to pay to Agent on the Closing Date a commitment fee in the
amount set forth in the Fee Letter (the “Commitment Fee”). The Commitment Fee
shall be fully earned as of the Closing Date and shall not be subject to refund
or rebate under any circumstances.

6.2         Payments.

(a)       All payments of principal, interest, fees and any other amounts due
hereunder, under the Note or under any of the other Loan Documents shall be paid
not later than 1:00 p.m. Eastern Time on the day when due and sent to Agent for
the benefit of Lenders at 45 East 53rd Street, New York, New York 10022, or at
such other location that Agent may from time to time designate in writing, in
the billing invoice or otherwise, in immediately available funds in lawful money
of the United States.

(b)       All interest shall be: (a) payable in arrears commencing on August 1,
2014 and on the first day of each month thereafter; provided, however, (x) if
any day on which a payment is due is not a Banking Day, then the payment shall
be due on the next day following which is a Banking Day, and (y) if there is no
corresponding day for a payment in the given calendar month (i.e., there is no
“February 30th”), the payment shall be due on the last Business Day of the
calendar month (each a “Payment Date”), until the principal together with all
interest and other charges payable with respect to the Loan shall be fully paid;
and (b) calculated on the basis of a 360 day year and the actual number of days
elapsed. Each change in the Prime Rate shall simultaneously change the Variable
Rate payable under this Agreement and shall become effective as of the opening
of business on the day on which such change in the Prime Rate become effective.
Interest at the Effective LIBOR shall be computed from and including the first
day of the applicable Interest Period to, but excluding, the last day thereof.

(c)       All payments by Borrower hereunder, under the Note and under any of
the other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any Taxes unless Borrower is compelled by
law to make such deduction or withholding.

(d)       All payments hereunder, under the Note shall be made without set-off
or counterclaim and free and clear of and without deduction for any Taxes of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or any taxing or other authority therein unless Borrower is
compelled by law to make such deduction or withholding. If any such obligation
to deduct or withhold is imposed upon Borrower with respect to any amount
payable by it hereunder, provided that Lenders deliver to Borrower and Agent
certifications as to their exemption from deduction or withholding, Borrower
will pay to the applicable Lender, on the date on which such amount becomes due
and payable hereunder, such additional amount as shall be necessary to enable
such Lender to receive the same amount which it would have received on such due
date had no such obligation been imposed upon Borrower. Borrower will deliver
promptly to any applicable

 

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Lender certificates and other valid vouchers for all Taxes or other charges
deducted or paid with respect to payments made by Borrower under this Agreement
or the Note.

(e)       So long as no Event of Default has occurred and is continuing, all
payments received will be applied first to interest, then to fees, expenses and
costs and then to principal.

(f)       Each determination of an interest rate by Agent pursuant to this
Agreement shall be conclusive and binding on Borrower in the absence of manifest
error.

(g)       Whenever any payment to be made hereunder shall be stated to be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day (except as provided in the definition of Interest
Period), and such extension of time shall in such case be included in the
computation of payment of interest.

6.3         Capital Adequacy.

If any Lender shall have determined that any Regulatory Change regarding capital
requirements, or compliance by such Lender with any Regulatory Change, imposes
or increases a requirement by such Lender to allocate capital resources to the
Advances made, or to be made, hereunder, which has or would have the effect of
reducing the return on such Lender’s capital to a level below that which such
Lender could have achieved (taking into consideration such Lender’s then
existing policies with respect to capital adequacy and assuming full utilization
of Lender’s capital) but for such Regulatory Change, by any amount reasonably
deemed by such Lender to be material: (i) such Lender shall promptly after its
reasonable determination of such occurrence give notice thereof to Agent which
shall forward such notice to Borrower; and (ii) Borrower shall pay to Lender as
an additional fee from time-to-time within fifteen (15) days of written demand,
but not more frequently than monthly, such reasonable amount as Lender certifies
to be the amount that equitably will compensate it for such reduction; provided,
however, that any Lender’s rights under this Section 6.3 shall only be effective
if such Lender is generally imposing such amounts on similarly situated
borrowers under similarly situated loans. In determining such amounts, Lender
may use any reasonable averaging and attribution methods.

6.4         Additional Costs, Expenses and Reserve Requirements.

(a)       Anything herein to the contrary notwithstanding, if any present or
future Regulatory Change hereafter made upon or otherwise issued to any Lender
shall, with respect to such Lender’s commitment to make LIBOR Advances hereunder
or the principal balance hereof bearing interest at the Effective LIBOR:

(i)        subject such Lender to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature (other than taxes based upon or measured
by the income or profits of such Lender); or

(ii)       materially change the basis of taxation (except for changes in taxes
on income or profits) of payments to such Lender of the principal of or the
interest on the Note or any other amounts payable to Lender hereunder or under
the Note; or

 

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(iii)       impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, or other similar requirements (whether or not
having the force of law and which are not already reflected in any amounts
payable by Borrower hereunder) against assets held by, or deposits in or for the
account of, or loans by, or commitments of an office of such Lender; or

(iv)       impose on such Lender any other condition or requirement;

and the result of any of the foregoing is:

(i)        to increase the cost to such Lender attributable to the making,
funding, issuing, renewing, extending or maintaining LIBOR Advances; or

(ii)       to reduce the amount of principal, interest or other amount payable
to such Lender hereunder on account of the Loan bearing interest at the
Effective LIBOR; or

(iii)       to require such Lender to make any payment or to forego any interest
or other sum payable hereunder, the amount of which payment or foregone interest
or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender from Borrower hereunder;

then, and in each such case, Borrower will, within fifteen (15) days following
written demand made by Agent on behalf of such Lender at any time and from time
to time as often as the occasion therefor may arise, pay to Agent for the
benefit of such Lender such additional reasonable amounts as will be sufficient,
in the good faith opinion of Lender, to equitably compensate Lender for such
additional costs, reduction, payment or foregone interest or other sum. Any
Lender’s method for determining any amount payable by Borrower under this
Section 6.4 shall be substantially similar to the method used by such Lender in
implementing similar provisions for similarly situated borrowers under similarly
situated loans.

6.5     Certificate.

A certificate setting forth in reasonable detail any additional amounts payable
pursuant to Section 4.11, Section 6.3 and/or Section 6.4 and a brief explanation
of such amounts which are due (including a statement of the amount and the basis
of calculation of such additional amounts payable), submitted by Agent to
Borrower, shall be prima facie evidence (absent manifest error) as to the amount
of such payments due and owing.

6.6     Indemnification.

If, due to payments or to acceleration of the Maturity Date or due to any other
reason, including, without limitation the events specified above, Agent receives
payments of principal of, or is subject to conversion of a LIBOR Advance into a
Variable Rate Advance hereunder other than on the last day of an Interest Period
relating thereto, Borrower shall, promptly upon demand by Agent, pay to Agent
for the benefit of Lenders any reasonable amounts equitably required to
compensate Lenders for any actual losses, costs or expenses which they may
reasonably incur as a result of such

 

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payment or conversion, including, without limitation, any actual loss, costs or
expenses incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by Lenders to fund or maintain LIBOR Advances, but Borrower
shall not be liable to Lenders or Agent for any loss or reduction in the
Effective LIBOR, except in the event of the acceleration of the time for payment
of the Loan.

6.7     Charges Against Loan Checking Account.

After the occurrence and during the continuance of an Event of Default, Agent
shall have the right, and Borrower hereby irrevocably authorizes Agent, to
charge any account of Borrower with Agent, including the Loan Checking Account,
without the further approval of Borrower, for (i) any installment of interest or
principal due hereunder, (ii) any costs or expenses incurred by Agent and
Lenders which are to be paid or reimbursed by Borrower under the terms of this
Agreement or any of the other Loan Documents, or (iii) any other sums due to
Agent hereunder or any of the other Loan Documents, and any other Obligations,
all to the extent that the same are not paid by the respective due dates
thereof. Borrower shall at all times maintain and keep collected balances in the
Loan Checking Account sufficient to satisfy the foregoing obligations on the
respective due dates thereof; provided, however, that Borrower shall not be
required to keep a balance in the Loan Checking Account sufficient to pay
principal until the Maturity Date.

7.     COLLATERAL SECURITY AND GUARANTY.

The Obligations shall be secured by a perfected first priority mortgage lien and
security in the Collateral, whether now owned or hereafter acquired, pursuant to
the terms of the Security Documents to which Borrower is a party. The
Obligations shall also be guaranteed pursuant to the terms of the Guaranty.

8.     REPRESENTATIONS, WARRANTIES AND COVENANTS.

Borrower represents, warrants, and covenants to Agent and Lenders as follows:

8.1         Organization; Authority, Etc.

(a)     Organization; Good Standing. Borrower is (i) and has been at all times
since its formation, and shall at all times remain, a Single Purpose Entity,
(ii) a limited liability company duly organized under the laws of the State of
Delaware pursuant to Borrower’s Organizational Documents, and is, and will at
all times be, validly existing and in good standing under the laws of such
State. Each of the Parties is, and will at all times be, duly organized and is,
and will at all times be, validly existing, in good standing, and qualified to
do business in each jurisdiction where required. Each Party has, and will at all
times have, all requisite power to own its property and conduct its business as
now conducted and as presently contemplated.

(b)     Authorization. The execution, delivery and performance of this Agreement
and the other Loan Documents to which any Party is or is to become a party and
the transactions contemplated hereby and thereby (i) are within the authority of
such Party, (ii) have been duly authorized by all necessary proceedings on the
part of such Party, (iii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule

 

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or regulation to which such Party is subject or any judgment, order, writ,
injunction, license or permit applicable to such Party, (iv) do not conflict
with any provision of the Organizational Documents of such Party, and (v) do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained and the filing of the Security
Documents and the Financing Statements in the appropriate public records with
respect thereto.

(c)       Enforceability. The execution and delivery of this Agreement and the
other Loan Documents to which Borrower is or is to become a party will result in
valid and legally binding obligations of Borrower enforceable against it in
accordance with the respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors’ rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.

(d)       Limitations. The Organizational Documents of Borrower limit the
business of Borrower to activities relating to the ownership, construction,
operation and maintenance of the Project and all matter incidental or accessory
thereto.

8.2     Title Assets.

Borrower owns all of the assets reflected in the financial information delivered
to Agent prior to the closing of the Loan or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date)

8.3     Financial Statements.

The financial information regarding the Project and Borrower delivered to Agent
prior to the closing of the Loan fairly present the financial condition of
Borrower and the Project as of the date thereof. As of the date of this
Agreement, there are no material liabilities or contingent liabilities of
Borrower known to the officers and members of Borrower which are not disclosed
in said financial information other than the Obligations.

8.4     No Material Changes, Etc.

Since the date of the most recent financial statements of Borrower delivered to
Agent, there has occurred no adverse change in the financial condition or
business of Borrower as shown on or reflected in such financial statements,
other than changes in the ordinary course of business that have not had any
material adverse effect either individually or in the aggregate on the business
or financial condition of Borrower.

8.5     Franchises, Patents, Copyrights, Etc.

Borrower possesses, and will at all times possess, all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in respect
of the foregoing, adequate for the conduct of its business substantially as now
conducted or as it is intended to be conducted with respect to the Project,
without known conflict with any rights of others.

 

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8.6     Litigation.

There are no actions, suits, proceedings or investigations of any kind pending
or, to Borrower’s knowledge, threatened against Borrower or the Project before
any court, tribunal or administrative agency or board or any mediator or
arbitrator that, if adversely determined, might, either in any case or in the
aggregate, materially adversely affect the business, assets or financial
condition of Borrower or the Project, or result in any liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
balance sheet of Borrower or the Project, or which question the validity of this
Agreement or any of the other Loan Documents, any action taken or to be taken
pursuant hereto or thereto, or any lien or security interest created or intended
to be created pursuant hereto or thereto, or which will adversely affect the
ability of Borrower to construct, use and occupy the Improvements or to pay and
perform the Obligations in the manner contemplated by this Agreement and the
other Loan Documents.

8.7     No Materially Adverse Contracts, Etc.

Borrower is not as of this date subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of Borrower. Borrower is not, and will not be, a
party to any contract or agreement that has or is expected, in the judgment of
Borrower’s officers, to have any materially adverse effect on the business of
Borrower.

8.8     Compliance With Other Instruments, Laws, Etc.

Each party is not, and will not at any time be, in violation of any provision of
its Organizational Documents or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of such Party.

8.9     Tax Status.

Each Party (a) has made or filed, and will make or file in a timely fashion, all
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (b) has paid, and will pay
when due, all Taxes shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings, (c) if a partnership, limited partnership, limited liability
partnership, or limited liability company, has, and will maintain, partnership
tax classification under the Code, and (d) has set aside, and will at all times
set aside, on its books provisions reasonably adequate for the payment of all
Taxes for periods subsequent to the period to which such returns, reports or
declarations apply. There are no unpaid Taxes in any material amount claimed to
be due by Borrower by the taxing authority of any jurisdiction, except those
that may be contested in good faith and by appropriate proceedings and as to
which adequate reserves have been established and funded by Borrower, and the
officers, partners or trustees of Borrower know of no basis for any such claim
or any such contest. Borrower has filed, and will continue to file, all of such
tax returns, reports, and declarations

 

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either (i) separately from any parent or affiliate or (ii) if part of a
consolidated filing, as a separate member of any such consolidated group.

8.10       No Event of Default.

No Event of Default has occurred and is continuing.

8.11       Setoff, Etc.

The Collateral and Agent’s and Lenders’ rights with respect to the Collateral
are not subject to any setoff, claims, withholdings or other defenses.

8.12       Certain Transactions.

Except as set forth on Schedule 8.12 hereto, (a) none of the officers, trustees,
directors, partners, managers, members, stockholders, beneficiaries, or
employees of Borrower or (b) to the knowledge of Borrower, any corporation,
partnership, trust or other entity in which any such officer, trustee, director,
partner, manager, member, stockholder, beneficiary, or employee has a
substantial interest or is an officer, director, trustee, manager or partner, is
presently a party to any transaction with Borrower (other than for services as
employees, officers, trustees, managers and directors).

8.13       Subsidiaries.

Borrower does not, and will not have any, Subsidiaries.

8.14       Partners, Beneficiaries, Etc.

Except as set forth in Schedule 8.14, Borrower has no general partners, limited
partners, partners, beneficiaries, stockholders or members.

8.15       ERISA Plan.

Borrower does not, and will not maintain or contribute to an ERISA Plan.

8.16       Intentionally Omitted.

8.17       Access.

The rights of way for all roads necessary for the full utilization of the
Improvements for their intended purposes have or will upon Project Completion
either been acquired by the appropriate Governmental Authority or have been
dedicated to public use and accepted by such Governmental Authority. All
necessary steps have been taken by Borrower and such Governmental Authority to
assure the complete construction and installation of such roads prior to the
date upon which access to the Project via such roads will be necessary, and the
right to use all such roads, or suitable substitute rights of way reasonably
approved by Agent, shall be maintained at all times for the Project. All curb
cuts, driveways and traffic signals shown on the Plans and Specifications are
existing or have been fully approved by the appropriate Governmental Authority
and after the completion thereof,

 

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shall be maintained at all times for the Project, except to the extent acquired
by any Governmental Authorities or dedicated to public use.

8.18       Condition of Project.

Neither the Project nor any part thereof is now damaged or injured in any
material respect as result of any fire, explosion, accident, flood or other
casualty or has been the subject of any Taking, and to the knowledge of
Borrower, no Taking is pending or contemplated.

8.19       Compliance with Requirements.

The construction of the Improvements and the use of the Project contemplated
thereby materially comply with, and will at times materially comply with, all
Requirements. Borrower will give or cause to be given all such notices to, and
take all such other actions with respect to, such Governmental Authority as may
be required under applicable Requirements to construct the Improvements and to
use and operate the Project following Project Completion.

8.20       Project Approvals.

(a)         All Project Approvals obtained by Borrower are listed and described
on Schedule 8.20 hereto, have been validly issued and are in full force and
effect. Borrower has no reason to believe that any of the Project Approvals not
heretofore obtained by Borrower will not be obtained by Borrower in the ordinary
course following Project Completion in accordance with the Plans and
Specifications. To Borrower’s knowledge, no Project Approvals will terminate, or
become void or voidable or terminable, upon any sale, transfer or other
disposition of the Project, including any transfer pursuant to foreclosure sale
under the Deed of Trust.

(b)         All Project Approvals not heretofore been obtained by Borrower but
which, to Borrower’s knowledge will be required, necessary or desirable for the
satisfactory construction of the Improvements in accordance with the Plans and
Specifications are also listed and described on Schedule 8.20 hereto. Borrower
will promptly obtain such Project Approvals, as well as any other Project
Approvals that may hereafter become required, necessary or desirable, as
determined by Borrower, and will furnish Agent with evidence that Borrower has
obtained such Project Approvals promptly upon its request.

(c)         Borrower will duly perform and comply in all material respects with
all of the terms and conditions of all Project Approvals obtained at any time
including, without limitation, all Project Approvals listed and described on
Schedule 8.20 hereto.

8.21       Construction-Related Contracts.

Borrower has provided Agent with true and complete copies of all
Construction-Related Contracts in effect as of the date of this Agreement. Such
Construction-Related Contracts are each in full force and effect, and all of the
parties thereto are materially in compliance with their respective obligations
thereunder. The work to be performed by Borrower (or the respective Contractors
as the case may be) under any of the Construction-Related Contracts is the work
called

 

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for by the Plans and Specifications, the Project Budget, and is permitted by all
documents of record and otherwise affecting the Land.

8.22       Other Contracts.

(a)         Except for the Construction-Related Contracts provided to Agent as
of the Closing Date, the Development Agreement, the Property Agreements and the
Management Contract, Borrower has not made any contract or arrangement of any
kind or type whatsoever (whether oral or written, formal or informal), the
performance of which by the other party thereto could give rise to a lien or
encumbrance on the Project.

(b)         Borrower has not made, and will not make, any contract or
arrangement of any kind or type whatsoever, with any affiliate of Borrower
unless such contract or arrangement is (1) either (y) approved in writing in
advance by Agent if the amount of such contract exceeds $50,000 or $100,000 in
the aggregate of all such contracts (no such consent being required for any
contract whose value do not exceed the single limit amount, provided that the
aggregate limit amount is not reached), but excluding the agreements referenced
in Schedule 8.12, which are deemed to be approved by Agent for the purposes of
this Section 8.22, or (z) on the same terms as would be generally available to
Borrower in an arm’s length contract or arrangement with a third party, and
(2) evidenced by a written agreement.

8.23       Violations.

Borrower has received no written notices of, or has any knowledge of, any
current violations as of this date of any applicable Requirements or Project
Approvals.

8.24       Plans and Specifications.

Borrower has furnished Agent with true and complete sets of the Plans and
Specifications in effect as of this date. The Plans and Specifications so
furnished to Agent comply, and any future Plans and Specifications required to
be delivered hereunder shall comply in all material respects with all
Requirements, all Project Approvals, and all restrictions, covenants and
easements affecting the Project, and have been approved by the Contractor, the
Architect, and such Governmental Authority to the extent required for
construction of the Improvements.

8.25       Project Budget.

The Project Budget accurately reflects all Project Costs as reasonably estimated
by Borrower.

8.26       Effect of Draw Request.

Each Draw Request submitted to Agent as provided in Section 3.1 hereof shall
constitute an affirmation that the representations and warranties contained in
this Agreement and in the other Loan Documents remain true and correct as of the
date thereof (unless such representation and/or warranty expressly references a
different date with respect thereto); and unless Agent is notified to the
contrary, in writing, prior to the Drawdown Date of the requested Advance or any
portion thereof,

 

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shall constitute an affirmation that the same remain true and correct on the
Drawdown Date (unless such representation and/or warranty expressly references a
different date with respect thereto).

8.27       Anti-Terrorism.

None of Borrower or any of its underlying beneficial owners that hold greater
than a five percent (5.0%) direct or indirect interest (such beneficial owners,
“Significant Holders”) have engaged in any dealings or transactions, directly or
indirectly, (i) in contravention of any U.S., international or other money
laundering regulations or conventions, including, without limitation, the United
States Bank Secrecy Act, the United States Money Laundering Control Act of 1986,
the United States International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001, Trading with the Enemy Act (50 U.S.C. Section 1 et seq.,
as amended), or any foreign asset control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto, or (ii) in contravention of
Executive Order No. 13,244,66 Fed. Reg. 49,079 (2001) issued by the President of
the United States (Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism),
as may be amended or supplemented from time to time (“Anti-Terrorism Order”) or
on behalf of terrorists or terrorist organizations, including those persons or
entities that are included on any relevant lists maintained by the U.S. Office
of Foreign Assets Control. None of Borrower nor any of its Significant Holders
is a person described in section 1 of the Anti-Terrorism Order and none of
Borrowers nor any of its Significant Holders have engaged in any dealings or
transactions, or otherwise been associated with any such Person.

8.28       Tax Shelter Regulations.

Neither Borrower, any Guarantor, any non-borrower trustor, nor any subsidiary of
any of the foregoing intends to treat the Loan or the transactions contemplated
by this Agreement and the other Loan Documents as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4). If
Borrower, or any other party to the Loan determines to take any action
inconsistent with such intention, Borrower will promptly notify Agent thereof.
If Borrower so notifies Agent, Borrower acknowledges that Agent may treat the
Loan as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and Agent will maintain the lists and other records,
including the identity of the applicable party to the Loan as required by such
Treasury Regulation.

8.29       Property Agreements.

The Property Agreements are in full force and effect and neither Borrower nor,
to Borrower’s knowledge, any other party thereto is in default thereunder, and
to Borrower’s knowledge, there are no conditions which, with the passage of time
or the giving of notice, or both, would constitute a default thereunder. The
Property Agreements have not been modified, amended or supplemented in any way.

9.          AFFIRMATIVE COVENANTS OF BORROWER.

Borrower covenants and agrees that, so long as the Loan is outstanding or
Lenders have any obligation to make any Advances:

 

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9.1      Punctual Payment.

Borrower will duly and punctually pay or cause to be paid the principal and
interest on the Loan and all other amounts provided for in the Note, this
Agreement and the other Loan Documents to which Borrower is a party, all in
accordance with the terms of the Note, this Agreement and such other Loan
Documents.

9.2       Commencement, Pursuit and Completion of Construction.

Borrower will diligently pursue construction of the Improvements in material
accordance with the Construction Schedule, subject to Force Majeure, provided,
however, that Borrower shall furnish Agent with written notice satisfactory to
Agent evidencing any such delay within ten (10) days from the occurrence of any
event constituting Force Majeure, and will pay all sums and perform all such
acts as may be necessary or appropriate to complete such construction (subject
to Borrower’s right to contest same under Section 10.12 below), on or before the
Completion Date, all in accordance with the Plans and Specifications, in
compliance with all restrictions, covenants and easements affecting the Project,
all Requirements, all Project Approvals, and with all terms and conditions of
the Loan Documents, without material deviation from the Plans and Specifications
unless Borrower obtains the prior approval of Agent not to be unreasonably
withheld, and, only if applicable and required, the insurance company or
companies underwriting the Subcontractor Default Surety Program. To the extent
not previously delivered to Agent for any particular phase of the Project,
Borrower shall deliver to Agent for its review and approval, Plans and
Specifications for such particular phase of the Project. All construction shall
be completed free from any liens, claims or assessments (actual or contingent)
asserted against the Project for any material, labor or other items furnished in
connection therewith, subject, however, to Borrower’s right to contest in good
faith any such claims or assessments pursuant to Section 10.12 below.

9.3       Correction of Defects.

Borrower will promptly correct or cause to be corrected all defects in the
Improvements so that the Improvements shall comply in all material respects with
the Plans and Specifications and all Requirements.

9.4      Records and Accounts.

Borrower will (a) keep true and accurate records and books of account in which
full, true and correct entries will be made in accordance with generally
accepted accounting principles (or such other recognized method of accounting
reasonably acceptable to Agent), which records and books will not be maintained
on a consolidated basis with those of any other Person, including, any Obligor,
Subsidiary of Borrower, or parent or affiliate of Borrower and (b) maintain
reasonably adequate accounts and reserves for all taxes (including income
taxes), depreciation and amortization of its properties, contingencies, and
other reserves, all of which accounts shall not be commingled with accounts of
any other Person, including any Obligor, Subsidiary of Borrower, or parent or
affiliate of Borrower.

9.5       Financial Statements, Certificates and Information.

Borrower will deliver, or cause to be delivered, to Agent:

 

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(a)      Annual Statements. As soon as practicable, but in any event not later
than (x) one hundred twenty (120) days following the end of each fiscal calendar
year, company prepared financial statements of Borrower prepared in accordance
with Generally Accepted Accounting Principles or other recognized method of
accounting acceptable to Agent, consistently applied, in form and manner of
presentation acceptable to Agent and (y) within one hundred twenty (120) days
following the end of each fiscal year, financial statements of Guarantor
compiled by a certified public accountant reasonably acceptable to Agent and
prepared in accordance with Generally Accepted Accounting Principles or other
recognized method of accounting acceptable to Agent, consistently applied by
said certified public accountant, in the case of each of (x) and (y), such
financial statements to include a balance sheet, income statement and a cash
flow statement and to be supplemented by such detail and supporting data and
schedules as Agent may from time to time reasonably determine;

(b)       Quarterly Statements. As soon as available and in any event within
forty-five (45) days after the end of each quarterly period, each of which ends
on March 31, June 30, September 30 and December 31 in each calendar year,
internally prepared financial statements of Borrower and Guarantor (and as to
Guarantor, in a format previously used and approved by Agent or its predecessors
in interest in previous loan transactions), as of the end of and for such
quarterly period;

(c)       Periodic Statements. As soon as available and in any event within
fifteen (15) days following the end of each calendar month the following,
internally prepared by Borrower and certified by Borrower to be true, accurate
and complete in all material respects: (i) an operating statement showing the
results of operation for the prior month and on a year-to-date basis for the
period just ended, (ii) a current rent roll of the Project, containing such
details as Agent may reasonably request and (iii) a current leasing activity
schedule;

(d)       Operating Budget. Beginning December 1, 2016, and thereafter no later
than December 1 of each succeeding year, the Operating Budget for the next
succeeding year.

(e)       Data Requested. Within a reasonable period of time and from time to
time such other financial data or information as Agent may reasonably request
with respect to the Project or Borrower, including, but not limited to, rent
rolls, aged receivables, aged payables, leases, budgets, forecasts, reserves,
cash flow projections, physical condition of the Project and pending lease
proposals;

(f)       Tax Returns. As soon as available and in any event within thirty
(30) days of the filing thereof, complete copies of all federal and state tax
returns and supporting schedules of Borrower and Guarantor;

(g)       Real Estate Taxes. Concurrently with the paying thereof and within
thirty (30) days following when such taxes are due, evidence that the real
estate taxes on the Project have been paid.

(h)       Compliance Certificate. Together with each of the financial statements
required pursuant to Sections 9.5(a) and 9.5(b) submitted by or on behalf of
Borrower and

 

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Guarantor, a statement, in the form of Exhibit I attached hereto, certified by
(a) in the case of Borrower, the operating member of Borrower and (b) in the
case of Guarantor, each Guarantor.

9.6         Insurance; Bonds.

(a)         Borrower will obtain and maintain insurance with respect to the
Project and the operations of Borrower as required by the Deed of Trust.

(b)         Borrower will require the Contractor, the Architect, and any other
architect, contractor, engineer or design professional providing design,
construction, or engineering services in connection with the construction of the
Improvements to obtain and maintain at all times during the construction of the
Improvements (and for the Architect, for a period of not less than five
(5) years after the date of Project Completion, or for such longer period as may
be required by applicable law) such insurance as may be reasonably required by
Agent, all such insurance to be in such amounts and form, to include such
coverage and endorsements, and to be issued by such insurers as reasonably shall
be approved by Agent, and to contain the written agreement of the insurer to
give Agent thirty (30) days’ prior written notice of cancellation, nonrenewal,
modification or expiration.

(c)         Borrower will obtain and provide to Agent or will cause the General
Contractor to provide a certificate of insurance with respect to the
Subcontractor Default Surety Program.

(d)         Borrower will provide or will cause any such Person to provide Agent
with certificates evidencing such insurance upon the written request of Agent.

9.7         Liens and Other Charges.

Subject to Borrower’s right to contest as set forth in Section 10.12 and to bond
as set forth in Section 14.1(d), Borrower will duly pay and discharge, or cause
to be paid and discharged, before the same shall become overdue all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property.

9.8         Inspection of Project and Books, Appraisals.

(a)         Borrower shall permit Agent and the Construction Inspector, at
Borrower’s reasonable expense, (and only so long as no Event of Default has
occurred and is continuing, upon prior reasonable notice to Borrower) to visit
and inspect the Project and all materials to be used in the construction thereof
and will cooperate with Agent and the Construction Inspector during such
inspections (including making available working drawings of the Plans and
Specifications); provided that this provision shall not be deemed to impose on
Agent or the Construction Inspector any obligation to undertake such
inspections.

(b)         Borrower shall permit, or cause to permit, Agent at Borrower’s
reasonable expense to visit and inspect the Project and to examine the books of
account of Borrower (and to make copies thereof and extracts therefrom) and to
discuss the affairs, finances and accounts of Borrower or any such other Person
with, and to be advised as to the same by, its

 

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officers, partners, or trustees, all at such reasonable times and intervals as
Agent may reasonably request.

(c)         Agent shall have the right to order new Appraisals of the Project
from time to time. Each Appraisal shall be subject to review and approval by
Agent. Borrower agrees upon demand to pay to Agent the cost and expense for such
Appraisals and a fee for Agent’s review of such Appraisals. Borrower’s
obligation to pay such cost and expense shall be limited to one Appraisal per
year, unless the Appraisal is ordered after the occurrence of an Event of
Default, and/or is reasonably required by Agent to confirm the provisions of
Article 5 herein and/or or is required by applicable law or regulation.

(d)         The costs and expenses incurred by Agent in obtaining such
Appraisals or performing such inspections shall be paid by Borrower promptly
upon billing or request by Agent for reimbursement therefor.

9.9         Compliance with Laws, Contracts, Licenses, and Permits.

(a)         Borrower will, or will cause each Obligor and each Subsidiary
thereof to, comply in all material respects with (a) the applicable laws and
regulations wherever its business is conducted, including all Environmental Laws
and, in the case of Borrower, all Requirements, (b) the provisions of its
Organizational Documents, (c) all agreements and instruments by which it or any
of its properties may be bound, including, in the case of Borrower, the
Architect’s Contract (if applicable), Engineer’s Contract (if applicable), the
Construction Contract (if applicable), the Development Agreement, the Property
Agreements (if applicable), any Management Contract (if applicable), and any
other Construction-Related Contract to which it is party, and all restrictions,
covenants and easements affecting the Project, (d) all applicable decrees,
orders and judgments of which Borrower has notice, and (e) all licenses and
permits required by applicable laws and regulations for the conduct of its
business or the ownership, use or operation of its properties, including, in the
case of Borrower, all Project Approvals. Borrower shall not agree to any
amendments to the Development Agreement or the Property Agreements without first
obtaining the prior consent of Agent, which consent shall not be unreasonably
withheld or conditioned. Borrower shall provide Agent with complete copies of
any amendments to the Development Agreement and the Property Agreements
reasonably contemporaneously with the execution and delivery thereof.

9.10         Use of Proceeds.

Borrower will use the proceeds of the Loan solely for the purpose of paying for
Project Costs in accordance with the Project Budget.

9.11         Project Costs.

Borrower will pay when due all Project Costs in excess of the Loan Amount,
regardless of the amount, subject to Borrower’s right to contest the same in
good faith in accordance with Section 10.12 below.

 

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9.12      Insufficiency of Loan Proceeds.

If at any time while the Loan is outstanding or Lenders have any obligation to
make Advances hereunder, Agent shall in its sole but reasonable judgment
determine that the remaining undisbursed portion of the Loan, together with the
undisbursed balance of Required Equity Funds, if any, and any other sums
previously deposited by Borrower with Agent in connection with the Loan, is or
will be insufficient to fully complete and equip the Improvements in accordance
with the Plans and Specifications, to operate and carry the Project after
Project Completion until payment in full of the Loan by Borrower, to pay all
other Project Costs, to pay all interest accrued or to accrue on the Loan during
the term of the Loan from and after the date hereof, and to pay all other sums
due or to become due under the Loan Documents (or as to any budget category or
line item), regardless of how such condition may be caused (collectively, an
“Equity Deficiency”), Agent shall advise Borrower in writing of such Equity
Deficiency, whereupon Lenders shall have no obligation to make any further
Advances hereunder, unless and until Borrower (x) within five (5) Business Days
after written notice of such determination from Agent, acknowledges such Equity
Deficiency, (y) thereafter contributes its own Required Equity Funds to fund all
future Project Costs to cure such Equity Deficiency, and (z) Agent in its
reasonable good faith discretion determines that an Equity Deficiency no longer
exists. Notwithstanding any provision set forth herein to the contrary, upon the
occurrence of (i) Project Completion and (ii) Agent’s determination that there
exists a Debt Yield of no less than 8.4 and, to the extent that (I) Borrower has
contributed Required Equity Funds to cure an Equity Deficiency, or (II) Agent
has reallocated proceeds from the “Development Fee” line item to cure an Equity
Deficiency pursuant to Section 2.2 (e) herein, and Agent subsequently determines
that a cost savings has been realized pursuant to the terms of Section 2.5
(c) hereof, the amount of such cost savings (up to, but not in excess of the
amounts set forth in subsections (I) and (II) of this Section 9.12) shall be
either (1) disbursed to Borrower in immediately available funds (in the case of
Required Equity Funds) or (2) reallocated to the “Development Fee” line item (in
the case of a prior reallocation from the “Development Fee” line item).

9.13      Leasing Matters.

Borrower shall not, and shall not permit anyone acting on its behalf to, enter
into a lease for any residential unit in the Project (each, a “Residential
Lease”) except to the extent such Residential Lease is written on a form of
residential lease that has been previously submitted to and approved by Agent,
providing for rents consistent with comparable rental properties in the local
market and written for a term not exceeding two (2) years, without the prior
written consent of the Agent, which approval shall not be unreasonably withheld
or delayed.

9.14     Laborers, Subcontractors and Materialmen.

Borrower will furnish to Agent, upon written request at any time, and from time
to time, but not more frequently than monthly, affidavits listing all laborers,
subcontractors, materialmen, and any other Persons who, to Borrower’s knowledge,
might or could claim statutory or common law liens and are furnishing or have
furnished labor or material to the Project or any part thereof, together with
affidavits, or other evidence satisfactory to Agent, showing that such parties
have been paid all amounts then due for labor and materials furnished to the
Project; subject to Borrower’s right to contest such amounts in good faith as
provided by Section 10.12 below.

 

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9.15      Further Assurance of Title.

If at any time Agent or Agent’s counsel, acting commercially reasonably, has
reason to believe that any Advance is not secured or will or may not be secured
by the Deed of Trust as a first lien or security interest on the Project, then
Borrower shall, within ten (10) days after written notice from Agent, do all
things and matters reasonably necessary, to assure to the reasonable
satisfaction of Agent and Agent’s counsel that any Advance previously made
hereunder or to be made hereunder is secured or will be secured by the Deed of
Trust as a first lien or security interest on the Project, and Agent, at its
option, may decline to make further Advances hereunder until Agent has received
such assurance, but nothing in this Section shall limit Agent’s right to require
endorsements extending the effective date of the Title Policy as herein set
forth.

9.16      Zoning.

The land use, zoning regulations and variances which are issued and are in
effect for the Project permit the construction, use and occupancy of the
Improvements thereon on an as-of-right basis and no additional variance,
conditional use permit, special use permit or other similar approval is required
for such use and occupancy of the Improvements. All easements, restrictions,
covenants or operating agreements which benefit or burden the Project are in
full force and effect, and to Borrower’s knowledge there are no defaults
thereunder by any party thereto.

9.17 Publicity.

Borrower will permit Agent, with the prior review and approval of Borrower, to
obtain publicity in connection with the construction of the Improvements through
press releases and participation in such events as ground breaking and opening
ceremonies.

9.18      Sign Regarding Construction Financing.

If Borrower elects in its own discretion to erect a sign on the Project
advertising the construction of the Improvements, Borrower will, at Agent’s
request, note on such sign, utilizing Agent’s standard logo, that the
construction financing for the Project is being provided by Agent and Lenders.

9.19      Further Assurances.

(a)         Regarding Construction. Borrower will furnish or cause to be
furnished to Lender all instruments, documents, boundary surveys, footing or
foundation surveys, certificates, plans and specifications, title and other
insurance, reports and agreements and each and every other document and
instrument required to be furnished by the terms of this Agreement or the other
Loan Documents, all at Borrower’s expense.

(b)         Regarding Preservation of Collateral. Borrower will execute and
deliver to Lender such further documents, instruments, assignments and other
writings, and will do such other acts reasonably necessary or desirable, to
preserve and protect the Collateral at any time securing or intended to secure
the Obligations, as Lender may reasonably require.

 

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(c)        Regarding this Agreement. Borrower will cooperate with, and will do
such further acts and execute such further instruments and documents as Agent
shall reasonably request to carry out to its satisfaction the transactions
contemplated by this Agreement and the other Loan Documents.

9.20     Interest Rate Protection.

(a)        Borrower may at its option, maintain in full force and effect a
Hedging Agreement satisfactory to Agent in its sole but reasonable discretion,
including any amendments, modifications or any termination thereof.

(b)        All of Borrower’s obligations under any Agent/Lender Hedging
Agreement shall be secured by the lien of the Deed of Trust on a pari passu
basis with the Loan and other sums evidenced or secured by the Loan Documents.

(c)        The economic and other benefits of the Hedging Agreement and all of
the other rights thereunder shall be collaterally assigned to Agent pursuant to
the Assignment of Hedging Agreement as additional security for the Loan.

(d)        If any Hedging Agreement required hereunder shall by its terms,
expire prior to the Maturity Date, and Borrower elects to replace such Hedging
Agreement, Borrower shall deliver to Agent a replacement Hedging Agreement at
least ten (10) Business Days prior to the expiration date of the then current
Hedging Agreement which replacement Hedging Agreement shall be acceptable to
Agent in its sole discretion and otherwise satisfy the requirements of this
Section 9.20.

(e)        All costs, expenses, and indemnity obligations that may be incurred
by Lenders or Agent as a result of Borrower’s default beyond applicable notice
and grace periods, if any, under, or termination of, any Hedging Agreement shall
be subject to immediate reimbursement by Borrower.

(f)        In the event Borrower elects to pre-pay the Loan, unless there is a
written agreement with Lenders or Agent to continue the Hedging Agreement to its
maturity, the Hedging Agreement shall be terminated (subject to the provisions
related to early termination that appear in the Hedging Agreement).

9.21     Notices.

Borrower will promptly notify Agent in writing of (i) the occurrence of any
known Default or Event of Default; (ii) the occurrence of any other known event
which may have a material adverse effect on the Project or the business or
financial condition of any Obligor; or (iii) the receipt by Borrower of any
notice of default or notice of termination with respect to any material
Construction-Related Contract, the Development Agreement, the Property
Agreements or any Management Contract.

 

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9.22     Restricted Cash Management.

Prior to the occurrence of a Cash Flow Sweep Trigger Event and/or an Event of
Default, Borrower shall cause all gross revenues generated or derived from the
operation of the Project to be deposited into the Operating Account. On or
before the date Substantial Completion is achieved, Borrower shall open and
maintain with Agent an account (the “Restricted Cash Management Account”),
subject to terms of the Cash Management Agreement, into which Borrower shall
cause (i) all gross revenues generated or derived from the operation of the
Project and (ii) all funds in the Operating Account and (iii) all funds in the
Loan Checking Account to be deposited after the occurrence of a Cash Flow Sweep
Trigger Event and/or an Event of Default. All funds in the Restricted Cash
Management Account shall be retained in such account and held as additional
collateral for the Loan. After the occurrence of a Cash Flow Sweep Trigger Event
and/or an Event of Default the Borrower may submit requisitions to Agent,
together with detailed budgets and schedules of costs and expenses, for the
payment of Operating Expenses in accordance with the terms of the Cash
Management Agreement. Upon the occurrence of a Cash Flow Sweep Period Release
Event, and provided no Event of Default exists, all funds then on deposit in the
Restricted Cash Management Account shall be disbursed to the Operating Account.
Borrower hereby grants to Lender a security interest in the Operating Account,
Loan Checking Account and the Restricted Cash Management Account.

9.23     Accounts.

Borrower shall maintain with Agent all deposit, escrow and reserve accounts
related to the Project, including, without limitation, the Accounts, and any
accounts from which Borrower may from time to time authorize Agent or any
counterparty to a Hedging Agreement to debit payments due on the Loan and any
Hedging Agreement. Without limiting the generality of the foregoing, Borrower
shall maintain Santander Bank as its principal depository bank, including for
the maintenance of business, cash management, operating and administrative
deposit accounts. Borrower hereby grants to Agent on behalf of Lenders a
security interest in the foregoing accounts and deposit accounts.

9.24     Debt Yield.

(a)        Commencing on July 1, 2017 and continuing through the Initial
Maturity Date and the Extended Maturity Date, if applicable, the Debt Yield
shall be tested at the end of each calendar quarter. A “Cash Flow Sweep Trigger
Event” shall exist if the Debt Yield falls below (x) 8.4% during the period of
time commencing on July 1, 2017 and ending on the Initial Maturity Date (the
“Initial Testing Period”) and (y) 9.0% during the Extension Period. A Cash Flow
Sweep Trigger Event shall be cured (such cure, a “Cash Flow Sweep Period Release
Event”) upon Agent’s determination that either (i) the Project has, subsequent
to a Cash Flow Sweep Trigger Event, generated Debt Yield of (x) during the
Initial Testing Period, greater than or equal to 8.4% for two (2) consecutive
calendar quarters or (y) during the Extension Period, greater than or equal to
9.0% for two (2) consecutive calendar quarters or (ii) Borrower has made a
payment to Agent, for the benefit of Lenders, in reduction of the Loan in an
amount sufficient to satisfy a Debt Yield of (x) 8.4% during the Initial Testing
Period or (y) 9.0% during the Extension Period.

 

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(b)        For the purposes of calculating Debt Yield in connection with this
Section 9.24, (i) “all revenues from the project” (as set forth in the
definition of Net Operating Income) shall mean the monthly gross revenue based
on the three (3) month period prior to calculation, annualized and
(ii) Operating Expenses shall mean those Operating Expenses for the three
(3) month period immediately preceding the date of calculation, annualized.

(c)        If after posting such Reserve Collateral, the Debt Yield requirements
set forth in clause (a) above shall be satisfied for two (2) consecutive
calendar quarters without giving effect to such Reserve Collateral, then upon
written request of Borrower, Agent shall promptly release such Reserve
Collateral.

9.25     Debt Service Coverage Ratio.

During the Initial Testing Period and the Extension Period, if any, the Debt
Service Coverage Ratio shall be not less than 1.0 to 1.0 (the “Minimum Debt
Service Coverage Requirement”), calculated on a quarterly basis, and evidenced
by a certificate from an Authorized Representative, with such back-up documents
as may be reasonably required by Agent. A breach of the Minimum Debt Service
Coverage Requirement shall constitute an Event of Default, provided that
Borrower may cure such Event of Default within thirty (30) days of such breach
by paying down the outstanding principal balance of the Loan to cause compliance
with the Minimum Debt Service Coverage Requirement or by positing Reserve
Collateral with Agent, for the benefit of Lenders, in such amount. If after
posting such Reserve Collateral, the Minimum Debt Service Coverage Requirement
shall be satisfied for two (2) consecutive calendar quarters without giving
effect to such Reserve Collateral, then upon written request of Borrower, Agent
shall promptly release such Reserve Collateral.

10.     NEGATIVE COVENANTS OF BORROWER.

Borrower covenants and agrees that, so long as the Loan is outstanding or
Lenders have any obligation to make any Advances:

10.1     Restriction on Change Orders.

Borrower will not cause, permit or suffer to exist any material deviations from
the Plans and Specifications, and will not approve or consent to any material
change order or construction change directive without the prior approval of
Agent and the insurance company or companies underwriting the Subcontractor
Default Surety Program, if required under the terms of such coverage.

10.2     Restrictions on Easements, Covenants and Restrictions.

Borrower will not create or suffer to be created or to exist any easement, right
of way, restriction, covenant, condition, license or other right in favor of any
Person which affects or might affect title to the Project or the use and
occupancy of the Project or any part thereof without obtaining the prior
approval of Agent, which shall not be unreasonably withheld or delayed;
provided, however, that the foregoing shall not prohibit the granting of utility
easements and like instruments in the ordinary course of business.

 

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10.3     No Amendments, Terminations or Waivers.

(a)     Borrower shall not enter into any Construction-Related Contract after
the date hereof in excess of $1,000,000.00 unless (x) Borrower shall have
obtained Agent’s prior approval, which approval shall not be unreasonably
withheld or conditioned, and (y) if required by Agent, the Person obligated
under such Construction-Related Contract shall have executed and delivered to
Agent its consent to Borrower’s assignment of such Construction-Related
Contract, in a form reasonably acceptable to Agent (a “Third Party Consent”).

(b)     Except as otherwise provided for in herein, Borrower will not materially
amend, supplement or otherwise modify, whether by change order or otherwise, any
of the terms and conditions of the Construction-Related Contracts, the
Development Agreement, any of the Property Agreements or any Management Contract
without in each case the prior approval of Agent (which consent shall not be
unreasonably withheld or conditioned), and in the case of any
Construction-Related Contract covered by the Subcontractor Default Surety
Program, without the prior approval of insurance companies providing the
underwriting therefor, but only to the extent so required by such coverage;
provided, however, that Agent’s consent shall not be required for Code
Compliance Changes or Minor Field Changes. As used herein, “Code Compliance
Changes” shall mean any change to the Plans and Specifications which are
required by any governmental agency in connection with its review and inspection
process and which (a) individually does not cause any line item in the Project
Budget to be increased or decreased by more than Fifty Thousand Dollars
($50,000.00) and, when added to all previous such change orders resulting from
Code Compliance Changes, does not cause an aggregate net increase or decrease to
the total Project Budget of more than Two Hundred Fifty Thousand Dollars
($250,000.00); and (b) does not diminish the value or utility of the
Improvements or the mechanical, structural, or architectural integrity thereof.
As used herein, “Minor Field Changes” shall mean any change to the Plans and
Specifications which (a) individually does not cause any line item in the
Project Budget to be increased or decreased by more than Fifty Thousand Dollars
($50,000.00) and, when added to all previous such change orders resulting from
Minor Field Changes, does not cause an aggregate net increase or decrease to the
total Project Budget of more than Two Hundred Fifty Thousand Dollars
($250,000.00); and (b) does not diminish the value or utility of the
Improvements or the mechanical, structural, or architectural integrity thereof;
and (c) shall not involve any substitution or elimination of materials; or if it
does involve material substitution, the substituted materials are of equal or
superior quality, durability and appearance to the materials originally
specified in the Plans and Specifications, and the substitution shall not
materially change the appearance or use of the Improvements.

(c)     Borrower will not, directly or indirectly, terminate or cancel, or cause
or permit to exist any condition which would result in the termination or
cancellation of, or which would relieve the performance of any obligations of
any other party under, any other Construction-Related Contract, any Management
Contract, the Development Agreement or the Property Agreements, in each case,
without the prior approval of Agent (which approval shall not be unreasonably
withheld or conditioned).

 

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(d)        Borrower will not, directly or indirectly, waive or agree or consent
to the waiver of, the performance of any obligations of any other party under
any Construction-Related Contract, any Management Contract, the Development
Agreement or the Property Agreements without, in each case, the prior approval
of Agent (which approval shall not be unreasonably withheld or conditioned).

(e)        Borrower will not, directly or indirectly, amend, or allow the
amendment of, any of the Organizational Documents of Borrower, including,
without limitation, any such amendment which would allow or authorize the
expansion of Borrower’s activities beyond the ownership, construction, operation
and maintenance of the Project and all matter incidental or accessory thereto
without, in each case, the prior approval of Agent (which approval shall not be
unreasonably withheld or conditioned).

(f)        Borrower will not, directly or indirectly engage a successor
developer without the prior approval of Agent (which approval may be granted or
withheld in Agent’s sole and absolute discretion).

(g)        Concurrently with the execution and delivery of any Management
Contract Borrower shall, and shall cause the Management Company to, deliver the
Assignment of Management Agreement.

10.4     Restrictions on Indebtedness.

Borrower will not create, incur, assume, guaranty or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:

(a)        Indebtedness to Lenders arising under any of the Loan Documents;

(b)        Current liabilities of Borrower relating to the Project, incurred in
the ordinary course of business but not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;

(c)        Indebtedness relating to the Project, in respect of taxes,
assessments, governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be required
to be made in accordance with the provisions of Section 8.9 and Section 9.7; and

(d)        Indebtedness to any Obligor, Subsidiary of Borrower, or any member,
parent or affiliate of Borrower; provided, however, (i) the proceeds of such
Indebtedness shall only be used to enable Borrower to pay its ordinary and
customary operating expenses or other costs and expenses related to the Project;
(ii) no payments shall be made or required relative to the said Indebtedness on
or before payment in full of the Obligations; (iii) any payments received by the
holder of said Indebtedness shall be held for, and paid in kind to, Agent for
the benefit of Lenders; and (iv) the said Indebtedness of Borrower shall be
(1) evidenced by documents reasonably satisfactory in all respects to Agent,
(2) subordinate in lien and payment to the Obligations, (3) unsecured and
(4) non-defaultable and non-callable upon a default or otherwise until one year
and one day from the repayment in full of the Obligations,

 

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(although such Indebtedness may be converted to equity, so long as such
conversion would constitute a Permitted Transfer).

10.5     Restrictions on Liens, Etc.

Subject to Borrower’s right to contest as set forth in Section 10.12, Borrower
will not (a) create or incur or suffer to be created or incurred or to exist any
lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest of any kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits therefrom;
(b) transfer any of its property or assets or the income or profits therefrom
for the purpose of subjecting the same to the payment of Indebtedness or
performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (e) sell, assign, pledge or otherwise transfer any accounts,
contract rights, general intangibles, chattel paper or instruments, with or
without recourse; provided that Borrower may create or incur or suffer to be
created or incurred or to exist the following “Permitted Liens”:

(a)        statutory liens relating to the Project, to secure taxes, assessments
and other governmental charges or claims for labor, material or supplies in
respect of obligations not overdue;

(b)        liens in favor of Agent under the Loan Documents;

(c)        other liens on the Project consisting of easements, rights of way,
covenants and restrictions if and to the extent the same are disclosed on the
Title Policy and have been approved by Agent.

10.6     Restrictions on Loans and Investments.

Borrower will not make or permit to exist or to remain outstanding any loan by
Borrower to any Person or any Investment.

10.7     Merger, Consolidation, Conversion, Business Operations, and Ownership
and Disposition of Assets.

(a)        Borrower shall not own any assets other than the Project or other
assets incidental to the ownership or operation of the Project.

(b)        Borrower will not become a party to any merger or consolidation, or
agree to or effect any asset acquisition or stock acquisition.

(c)        Borrower will not become a party to or agree to or effect any
disposition of the Project or any part thereof except as otherwise provided
hereunder.

 

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(d)        Borrower will not convert into any other type of entity, including,
without limitation, a limited liability partnership.

(e)        Borrower will not engage in any business operations other than those
necessary for the ownership, construction, management, or operation of the
Project.

10.8     Sale and Leaseback.

Borrower will not enter into any arrangement, directly or indirectly, whereby
Borrower shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that Borrower intends
to use for substantially the same purpose as the property being sold or
transferred.

10.9     Distributions.

Borrower will not make any distributions to any of its members or shareholders
(i) until such time as the Project achieves and maintains a Debt Yield of at
least 9.0% for two consecutive calendar quarters and (ii) upon the occurrence
and during the continuance of a Default or Event of Default. For the purposes of
calculating Debt Yield in connection with this Section 10.9, (i) “all revenues
from the project” (as set forth in the definition of Net Operating Income) shall
mean the monthly gross revenue based on the three (3) month period prior to
calculation, annualized and (ii) Operating Expenses shall mean those Operating
Expenses for the three (3) month period immediately preceding the date of
calculation, annualized.

10.10     Mezzanine Debt.

Except for a “Failing Member Loan,” as defined in Section 4.5(d)(iv) of the
Limited Liability Agreement of Borrower, Borrower will not permit or allow its
members or shareholders to enter into any mezzanine or related subordinate debt
secured by a pledge or other collateral transfer or assignment of the ownership,
membership or stock interests of Borrower.

10.11     Other Negative Covenants.

Borrower will not:

(a)        Seek the dissolution or winding up, in whole or in part, of Borrower
or voluntarily file, or consent to the filing of, a petition for bankruptcy,
reorganization, assignment for the benefit of creditors or similar proceedings;
and

(b)        Commingle any of its accounts with accounts of any other Person,
including, any Obligor, Subsidiary of Borrower, or parent or affiliate of
Borrower.

10.12     Right to Contest.

Notwithstanding the provisions of Section 9.7 and Section 10.5, it is agreed
that any claims for labor, materials or supplies need not be paid if the
validity or amount thereof shall be contested currently, diligently and in good
faith by appropriate proceedings, and if Borrower shall have adequate
unencumbered (except in favor of Agent for the benefit of Lenders) cash reserves
with

 

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respect thereto, and further provided that such contest does not create a
default by landlord under any Lease assigned to Agent for the benefit of
Lenders, or a default by Borrower under the Construction Contract, or the
Architect’s Contract, or the Engineer’s Contract (if applicable), or any bonds;
and provided, further, that Borrower shall pay all obligations: (i) immediately
upon the commencement of proceedings to enforce any lien which may have attached
as security therefor, unless such proceeding is stayed by proper court order
pending the outcome of such contest or bonded as set forth in Section 14.1(d);
and (ii) as to claims for labor, materials or supplies, prior to the imposition
of any lien on the Project unless the lien is discharged or bonded as set forth
in Section 14.1(d); and provided, further, that Lenders shall have no obligation
to fund any further Advances unless the Title Insurance Company insures such
Advance as a valid first lien and security interest on the Project.

11.     Intentionally Omitted.

12.     CONDITIONS TO CLOSING.

The obligation of Lenders to close the Loan shall be subject to the satisfaction
of the following conditions precedent:

12.1     Loan Documents.

Each of the Loan Documents shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and shall be in
form and substance satisfactory to Agent.

12.2     Construction-Related Contracts.

Each of the Construction-Related Contracts in effect as of the date hereof
(which shall include the General Contract), shall have been duly executed and
delivered by the respective parties thereto, shall be in full force and effect,
and shall be in form and substance satisfactory to Agent. Architect and the
General Contractor shall have duly executed and delivered to Agent a consent to
the assignment of the Architect’s Contract, Engineer’s Contract and the General
Contract, in form and substance satisfactory to Agent. Agent shall have received
and approved the final Project Budget.

12.3     Subcontracts.

Borrower shall have delivered to Agent, and Agent shall have reasonably
approved, a list of all subcontractors and materialmen who have been or, to the
extent identified by Borrower, will be supplying labor or materials for the
Project.

12.4     Other Contracts.

Borrower shall have delivered to Agent correct and complete copies of all other
executed contracts with contractors, subcontractors, engineers or consultants
for the Project, and of all development, management, brokerage, sales or leasing
agreements for the Project.

12.5     Intentionally Omitted.

 

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12.6     Certified Copies of Organization Documents.

Agent shall have received from each of the Parties a certified copy of its
Organization Documents as in effect on such date of certification, such
Organizational Documents to be in form and substance satisfactory to Agent.

12.7     Resolutions.

All action necessary for the valid execution, delivery and performance by each
Party of this Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to Agent shall have been provided to Agent. Agent shall have
received from each such Person true copies of the resolutions authorizing the
transactions described herein, each certified as of a recent date to be true and
complete.

12.8     Incumbency Certificate; Authorized Signers.

Agent shall have received from each Party an incumbency certificate, dated as of
the Closing Date, giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
such Person each of the Loan Documents to which such Person is or is to become a
party; (b) in the case of Borrower, to make Draw Requests; and (c) to give
notices and to take other action on its behalf under the Loan Documents.

12.9     Validity of Liens.

The Security Documents shall be effective to create in favor of Agent a legal,
valid and enforceable first lien and security interest in the Collateral. All
filings, recordings, deliveries of instruments and other actions reasonably
necessary or desirable in the opinion of Agent to protect and preserve such lien
and security interest shall have been duly effected. Agent shall have received
evidence thereof in form and substance reasonably satisfactory to Agent.

12.10     Intentionally Omitted.

12.11     Deliveries.

The following items or documents shall have been delivered to Agent by Borrower
and shall be in form and substance satisfactory to Agent:

(a)        Title Policy. The Title Policy, together with proof of payment of all
fees and premiums for such policy and true and accurate copies of all documents
listed as exceptions under such policy.

(b)        Other Insurance. Duplicate originals or certified copies of all
policies of insurance required by the Deed of Trust or hereunder to be obtained
and maintained during the construction of the Improvements.

(c)        Evidence of Sufficiency of Funds. Evidence that Borrower’s Required
Equity Funds shall have been applied to the Project and which has been verified
by Agent and Agent’s Construction Inspector and evidence that the proceeds of
the Loan, together with

 

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Borrower’s Required Equity Funds will be sufficient to cover all Project Costs
reasonably anticipated to be incurred to complete the Improvements, to carry the
Project through the Maturity Date, and to satisfy the obligations of Borrower to
Lender under this Agreement.

(d)        Environmental Report. An environmental site assessment report or
reports of one or more qualified environmental engineering or similar inspection
firms reasonably approved by Agent, which report or reports shall indicate no
adverse change to the condition of the Land and any existing improvements
thereon from the condition set forth in reports previously reviewed and approved
by Agent that indicated compliance with all Requirements and were in all
respects reasonably satisfactory to Agent and upon which report or reports
Lenders are expressly entitled to rely.

(e)        Soils Report. A soils report for the Land prepared by a soils
engineer reasonably approved by Agent, which report shall indicate that, based
upon actual surface and subsurface examinations of the Land, the soils
conditions are fully satisfactory for the proposed construction and operation of
the Improvements in accordance with the Plans and Specifications.

(f)        Survey and Taxes. A Survey of the Land (and any existing improvements
thereon) and Surveyor’s Certificate, and evidence of payment of all real estate
taxes and municipal charges on the Land (and any existing improvements thereon)
which were due and payable prior to the Closing Date.

12.12     Intentionally Omitted.

12.13     Legal and Other Opinions.

Agent shall have received favorable opinions in form and substance satisfactory
to Agent and Agent’s counsel, addressed to Agent and Lenders and dated as of the
Closing Date, from counsel to Borrower and each Guarantor acceptable to Agent,
as to the matters as Lender shall reasonably request.

12.14     Lien Search.

Agent shall have received a certification from Title Insurance Company or
counsel satisfactory to Agent (which shall be updated from time to time at
Borrower’s expense upon request by Agent) that a search of the public records
disclosed no conditional sales contracts, security agreements, chattel
mortgages, leases of personalty, financing statements or title retention
agreements which affect the Collateral.

12.15     Notices.

All notices required by any Governmental Authority under applicable Requirements
to be filed prior to commencement of construction of the Improvements shall have
been filed.

 

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12.16     Appraisal.

Agent shall have received an Appraisal, in form and substance reasonably
satisfactory to Lenders.

12.17     Commitment Fee.

Borrower shall have paid to Agent the Commitment Fee pursuant to the Fee Letter.

12.18     Performance; No Default.

Borrower shall have performed and complied with all terms and conditions herein
required to be performed or complied with by it on or prior to the Drawdown Date
of the initial Advance, and on the Drawdown Date of the initial Advance, there
shall exist no Default or Event of Default.

12.19     Representations and Warranties.

The representations of warranties made by the Obligors in the Loan Documents or
otherwise made by or on behalf of the Obligors in connection therewith or after
the date thereof shall have been true and correct in all material respects when
made and shall be true and correct in all material respects on the Drawdown Date
of the initial Advance (except to the extent of changes resulting from
transactions contemplated or permitted by the Loan Documents).

12.20     Proceedings and Documents.

All proceedings in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall be satisfactory to Agent and
Agent’s counsel in form and substance, and Agent shall have received all
information and such counterpart originals or certified copies of such documents
and such other certificates, opinions or documents as Agent and Agent’s counsel
may reasonably require.

12.21     Waiver.

Any waiver by Agent of any of the conditions precedent contained herein for the
Closing and the initial Advance shall not be deemed to be a waiver by Agent of
such conditions precedent for any subsequent Advance or any other obligation of
Agent hereunder.

13.    CONDITIONS OF INITIAL AND SUBSEQUENT ADVANCES.

The obligation of Lender to make the Initial Advance and any Advance thereafter
shall be subject to the satisfaction of the following conditions precedent:

13.1     Prior Conditions Satisfied.

All conditions precedent to (a) the closing of the Loan and (b) if applicable,
the Initial Advance and any prior Advance, shall continue to be satisfied as of
the Drawdown Date of the Initial Advance or such subsequent Advance.

 

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13.2      Performance; No Default.

Borrower shall have materially performed and complied with all terms and
conditions herein required to be performed or complied with by it on or prior to
the Drawdown Date of such Advance, and on the Drawdown Date of such Advance
there shall exist no Event of Default.

13.3      Representations and Warranties.

Each of the representations and warranties made by the Obligors in the Loan
Documents or otherwise made by or on behalf of the Obligors in connection
therewith after the date thereof shall have been true and correct in all
material respects on the date on when made and shall also be true and correct in
all material respects on the Drawdown Date of such Advance (except to the extent
of changes resulting from transactions contemplated or permitted by the Loan
Documents).

13.4      No Damage.

The Improvements shall not have been injured or damaged in any material respect
by fire, explosion, accident, flood or other casualty.

13.5      Construction Inspector Report.

Agent shall have received a report or written confirmation from the Construction
Inspector that (a) the Construction Inspector has reviewed the Plans and
Specifications, (b) the Plans and Specifications have been received and approved
by each Governmental Authority to which the Plans and Specifications are
required under applicable Requirements to be submitted, (c) the Construction
Contract satisfactorily provides for the construction of the Improvements, and
(d) in the opinion of the Construction Inspector, construction of the
Improvements can be completed for an amount not greater than the amount
allocated for such purpose in the Project Budget.

13.6      Receipt of Agent.

The Agent shall have received:

(a)         Draw Request. A Draw Request complying with the requirements hereof,
including those set forth in Section 3.1 hereof.

(b)         Subcontractor Default Surety Program. Evidence that the insurance
provided under the Subcontractor Default Surety Program remains in full force
and effect.

(c)         Endorsement to Title Policy. A “date down” endorsement to the Title
Policy indicating no material change in the state of title and containing no
survey exceptions not reasonably approved by Lender;

(d)         Approval by Construction Inspector. Approval of the Draw Request for
such Advance by the Construction Inspector, accompanied by a certificate or
report from the Construction Inspector to the effect that in its opinion, based
on-site observations and submissions by the Contractor, the construction of the
Improvements to the date thereof was performed in a good and workmanlike manner
and materially in accordance with the Plans

 

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and Specifications, stating the estimated total cost of construction of the
Improvements, stating the percentage of in-place construction of the
Improvements, and stating that the remaining non-disbursed portion of the Loan
and Required Equity Funds allocated for such purpose in the Project Budget is
adequate to complete the construction of the Improvements; and

(e)         Construction-Related Contracts. If Borrower is requesting an Advance
for Project Costs pursuant to Construction-Related Contracts for which Agent’s
approval is required under Section 10.3(a) hereof, Lender shall have received a
true and complete copy of such Construction-Related Contract, and if requested
by Lender, a fully executed Third Party Consent relating thereto.

(f)         Plans and Specifications. With respect to the portion of the
Improvements for which Project Costs have been incurred and as to which Borrower
is requesting a Loan Advance, two (2) complete sets of the Plans and
Specifications and approval thereof by any necessary Governmental Authority,
with a certification from the Architect that the Improvements to be constructed
materially comply with all Requirements and Project Approvals and that the
Construction Contract satisfactorily provides for the construction of the
Improvements.

(g)         Required Equity Funds. Borrower’s Required Equity Funds shall have
been invested in the Project.

(h)         Evidence of Access, Availability of Utilities, Project Approvals.
Evidence as to:

(1)         the intended methods of access to and egress from the Project, and
nearby or adjoining public ways, meeting the reasonable requirements of the
Project and the status of completion of any required improvements to such
access; and

(2)         the obtaining of all Project Approvals, including, without
limitation, a building permit issued by the applicable Governmental Authority,
which are required, reasonably necessary or desirable for the construction of
the applicable portion of the Improvements and the access thereto, together with
copies of all such Project Approvals. Failure by Borrower to obtain all required
Project Approvals on or before September 30, 2014 shall constitute an Event of
Default hereunder.

(i)         Subcontracts. Borrower shall have delivered to Agent, and Agent
shall have reasonably approved, an updated list of all subcontractors and
materialmen who have been or, to the extent identified by Borrower, will be
supplying labor or materials for the Project. As a condition to the Initial
Advance, Borrower shall have at least seventy percent (70%) of all subcontracts
for Direct Costs bought out.

13.7     Mechanic’s lien laws.

(a)         The Lenders may withhold or refuse to fund any Advance hereunder if:

 

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(i)          a lien has been filed against the Project under any applicable
mechanics lien law, unless Borrower has provided evidence that Borrower has
obtained and recorded with the Land Records a satisfactory lien bond in an
amount equal to the unpaid construction costs, which lien bond shall be obtained
by Borrower and relate to, and therefore dissolve, any lien under such
mechanic’s lien law or in the event Borrower is contesting such lien claim in
good faith, or the Title Insurance Company has agreed to affirmatively insure
the priority of all Advances on terms and conditions satisfactory to Lender. The
lien bond shall name Lender as dual obligee.

(ii)         upon the substantial completion of the work provided for in any
Construction Contract between a Contractor and Borrower, Borrower has provided
evidence that Borrower has timely obtained from the Contractor and recorded with
the Land Records, any required notice or waiver as provided for in the
applicable mechanic’s lien law; and

(iii)        in the event of the termination of the Construction Contract,
Borrower has provided evidence that Borrower has timely recorded with the Land
Records, any required termination notice respecting any lien, as provided for in
the applicable mechanic’s lien law.

13.8        Release of Retainage.

In addition to the conditions hereinbefore set forth in this Article, Lenders’
obligation to make any Advance of Retainage shall be subject to receipt by Agent
of the following:

(a)         Project Approvals. Evidence reasonably satisfactory to Agent that
Borrower has obtained all Project Approvals from, given all notices to, and
taken all such other actions with respect to, such Governmental Authority as may
be required under applicable Requirements, together with copies of all such
Project Approvals.

(b)         Approval by Construction Inspector. Notification from the
Construction Inspector to the effect that the Improvements have been completed
in a good and workmanlike manner in material accordance with the Plans and
Specifications.

(c)         Final Survey. A final Survey reasonably acceptable to Agent showing
the as-built location of the completed Improvements.

(d)         Certificate of the Architect. A certificate of the Architect that
the Improvements have been Fully Completed in material accordance with the Plans
and Specifications and that the Improvements comply with all applicable
Requirements and Project Approvals and are in all respects (except for work to
be performed by tenants) ready for occupancy.

(e)         Payment of Costs. Evidence reasonably satisfactory to Agent that all
sums due in connection with the construction of the Improvements have been paid
in full (or will be paid out of the funds requested to be advanced) and that no
party claims or has a right to

 

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claim any statutory or common law lien arising out of the construction of the
Improvements or the supplying of labor, material, and/or services in connection
therewith.

(f)         Final Lien Waivers. Final lien waivers (on AIA Documents G706 or
other form satisfactory to Lender) from the Contractor and such laborers,
subcontractors and materialmen as reasonably may be required by Agent, duly
executed and notarized.

(g)         Warranties. Copies of any warranty issued by the Contractor to
Borrower pursuant to the Construction Contract and of all other warranties
issued to Borrower by subcontractors and manufacturers for labor performed and
materials supplied in connection with the construction of the Improvements.

(h)         Insurance. Duplicate original or certified copies of all policies of
insurance required by the Deed of Trust or hereunder to be obtained and
maintained by Borrower following Project Completion.

Notwithstanding the foregoing, the Retainage shall be advanced by Lenders upon
written request of Borrower on a contract-by-contract basis prior to the
Improvements being Fully Completed but after final completion of all
construction work provided for under such Construction Contract, upon Agent’s
receipt of the documentation required by clauses (a), (b), (e), (f), and (g) of
this Section 13.7 with respect to such Contractor and the portion of the
construction of the Improvements covered under such Construction Contract.

13.9        Waiver.

Any waiver by Agent of any of the conditions precedent contained herein for any
Advance shall not be deemed to be a waiver by Agent of such conditions precedent
for any subsequent Advance or any other obligation of Agent hereunder.

14.         EVENTS OF DEFAULT AND REMEDIES.

14.1        Events of Default.

The occurrence of any one or more of the following conditions or events shall
constitute an “Event of Default”:

(a)         any failure by Borrower to pay any interest on or principal of the
Note when due; or

(b)         any failure by Borrower to contribute its Required Equity Funds
required by Section 9.12 hereof, at the time required by and otherwise in
accordance with Section 9.12; or

(c)         any failure by Borrower to pay as and when due and payable any other
sums to be paid by Borrower to Agent under this Agreement or the Note within
five (5) days following written notice thereof to Borrower; or

 

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(d)       title to the Collateral is or becomes unsatisfactory to Agent by
reason of any lien, charge, encumbrance, title condition or exception and such
matter causing title to be or become unsatisfactory is not cured or removed
(including by bonding or acceptable affirmative coverage from the Title
Insurance Company) within twenty (20) days after written notice thereof from
Agent to Borrower; or

(e)       Borrower shall fail to achieve Substantial Completion by the
Completion Date; or

(f)        the Project or any material part thereof is injured in any material
respect by uninsured fire, explosion, accident, flood or other casualty; or

(g)       any cessation at any time in construction of the Improvements for more
than thirty (30) consecutive days, subject to Force Majeure; or

(h)       any failure by Borrower to duly observe or perform any term, covenant,
condition or agreement contained in Sections 9.6, 9.24, and 9.25 hereof, and any
failure by Borrower to duly observe or perform any term, covenant, condition or
agreement contained in Section 9.5 within ten (10) Business Days after written
notice thereof from Agent to Borrower; or

(i)        Guarantor denies that Guarantor has any liability or obligations
under the Guaranty or the Indemnity Agreement, or shall notify Agent in writing
of Guarantor’s intention to attempt to cancel or terminate the Guaranty or the
Indemnity Agreement, or shall fail to observe or comply with any term, covenant,
condition and agreement under the Guaranty or the Indemnity Agreement (which
failure continues after the expiration of any applicable cure period); or

(j)       any representation or warranty made or deemed to be made by or on
behalf of any Obligor in this Agreement or in any of the other Loan Documents,
or in any report, certificate, financial statement, Draw Request, document or
other instrument delivered pursuant to or in connection with this Agreement, any
Advance or any of the other Loan Documents, shall prove to have been false or
incorrect in any material respect upon the date when made or deemed to be made
or repeated; or

(k)       any dissolution, termination, partial or complete liquidation, merger
or consolidation of any Obligor, or any sale, transfer or other disposition of
all or substantially all of the assets of any Obligor, other than as permitted
under the terms of this Agreement or the Guaranty; or

(l)       any suit or proceeding shall be filed against any Obligor or the
Project which would reasonably be expected to have a materially adverse effect
on the ability of any Obligor to perform any of their respective material
obligations under and by virtue of the Loan Documents; or

(m)      any failure by Borrower timely to obtain any Project Approvals in
material accordance with Construction Schedule, subject to Force Majeure, or the
revocation or other

 

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invalidation of any Project Approvals previously obtained and the continuance of
such failure for an unreasonable period under the circumstance after notice
thereof from Agent; or

(n)       any change in the legal or beneficial ownership or control of
Borrower, other than in connection with a Permitted Transfer; or

(o)       any change in the control of the management of any Obligor (other than
termination of WF Oxford as the “Operating Member” of Borrower pursuant to the
LLC Agreement, prior to Project Completion (x) because of fraud, intentional
misconduct or gross negligence, or (y) with the prior reasonable consent of
Agent, for “cause,” as defined in Section 6.7(a) of the LLC Agreement), or the
giving up or relinquishment of such control by the Person(s) who is(are) charged
with the exercise of such responsibilities on the date hereof without
replacement by Person(s) of comparable business, development, management and/or
financial experience, as the case may be, which have been approved by Agent,
such approval not to be unreasonably withheld or conditioned; provided, however,
that CNL’s delegation of certain management rights to WF Oxford as the
“Operating Member” shall not be deemed a change of the management of any
Obligor, nor shall the removal of WF Oxford as the “Operating Member” for
“cause” (as defined in Section 6.7(a) of the LLC Agreement after Project
Completion; or

(p)       the occurrence of any default under any Hedging Agreement; or

(q)       any Obligor or Subsidiary thereof shall file a voluntary petition in
bankruptcy under Title 11 of the United States Code, or an order for relief
shall be issued against any such Person in any involuntary petition in
bankruptcy under Title 11 of the United States Code, or any such Person shall
file any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief for itself under any present or future federal, state or other law or
regulation relating to bankruptcy, insolvency or other relief of debtors, or
such Person shall seek or consent to or acquiesce in the appointment of any
custodian, trustee, receiver, conservator or liquidator of such Person, or of
all or any substantial part of its respective property, or such Person shall
make an assignment for the benefit of creditors, or such Person shall give
notice to any governmental authority or body of insolvency or pending insolvency
or suspension of operation; provided, however, that the occurrence of any of the
forgoing with respect to any Guarantor shall not be deemed a default if another
party (which may include CNL or an Affiliate of CNL), satisfactory to Agent in
its sole and absolute discretion, agrees to execute and be bound by the Guaranty
within ten (10) days following the occurrence of such event; or

(r)       an involuntary petition in bankruptcy under Title 11 of the United
States Code shall be filed against any Obligor or Subsidiary thereof and such
petition shall not be dismissed within sixty (60) days of the filing thereof;
provided, however, that such a filing against any Guarantor shall not be deemed
a default if another party (which may include CNL or an Affiliate of CNL),
satisfactory to Agent in its sole and absolute discretion, agrees to execute and
be bound by the Guaranty within ten (10) days following the occurrence of such
event; or

 

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(s)       a court of competent jurisdiction shall enter any order, judgment or
decree approving a petition filed against any Obligor or any Subsidiary thereof
seeking any reorganization, arrangement, composition, readjustment, liquidation
or similar relief under any present or future federal, state or other law or
regulation relating to bankruptcy, insolvency or other relief for debtors, or
appointing any custodian, trustee, receiver, conservator or liquidator of all or
any substantial part of its property; provided, however, that the occurrence of
any of the forgoing with respect to any Guarantor shall not be deemed a default
if another party (which may include CNL or an Affiliate of CNL), satisfactory to
Agent in its sole and absolute discretion, agrees to execute and be bound by the
Guaranty within ten (10) days following the occurrence of such event; or

(t)       any uninsured final and unappealable judgment in excess of $500,000.00
shall be rendered against any Obligor and shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty (30) days, whether or not
consecutive; provided, however, that the occurrence of any such judgment with
respect to any Guarantor shall not be deemed a default if another party (which
may include CNL or an Affiliate of CNL), satisfactory to Agent in its sole and
absolute discretion, agrees to execute and be bound by the Guaranty within ten
(10) days following the occurrence of such event; or

(u)       any of the Loan Documents shall be cancelled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior approval of Agent, or any action at law, suit in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of Borrower or any Obligor which is a party thereto or
any of their respective stockholders, partners or beneficiaries, or any court or
any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order, decree
or ruling to the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof; or

(v)       any Obligor shall be indicted for a federal crime, a punishment for
which could include the forfeiture of any of its assets; or

(w)      any failure by Borrower to duly observe or perform any other term,
covenant, condition or agreement under this Agreement as required by this
Agreement and continuance of such failure for a period of thirty (30) days after
written notice thereof from Lender, except that such thirty (30) day period
shall be extended for an additional period of time, not to exceed ninety
(90) days in the aggregate if such event of default is not reasonably capable of
cure during such thirty (30) day period, and so long as Borrower proceeds to
diligently cure such default; or

(x)       any other “Event of Default” not specifically referred to in this
Section 14.1, as defined or otherwise set forth in any of the other Loan
Documents, shall occur.

14.2     Termination of Advances and Acceleration.

If any one or more of the Events of Default shall occur and continue, Agent may
by notice to Borrower declare Lenders’ obligations to make Advances hereunder to
be terminated, whereupon the

 

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same shall terminate and Lenders shall be relieved of all obligations to make
Advances to Borrower, and/or declare all unpaid principal of and accrued
interest on the Note, together with all other amounts owing under the Loan
Documents, to be immediately due and payable, whereupon same shall become and be
immediately due and payable, anything in the Loan Documents to the contrary
notwithstanding, and without presentment, protest, demand or other notice of any
kind, all of which are hereby expressly waived by Borrower; provided that if any
one or more of the Events of Default specified in Section 14.1(q),
Section 14.1(r), or Section 14.1(s), above, shall occur with respect to any
Obligor, Lenders’ obligations to make Advances hereunder automatically shall so
terminate and all unpaid principal of and accrued interest on the Note, together
with all other amounts owing under the Loan Documents, automatically shall
become and be immediately so due and payable, without any declaration or other
act on the part of Lenders.

14.3     Completion of Project.

If any one or more of the Events of Default shall have occurred and continue,
and whether or not Lenders shall have terminated their obligations to make
Advances and accelerated the maturity of the Loan pursuant to Section 14.2,
Agent, if the construction of the Improvements has not been fully completed by
Borrower, and Guarantor shall have failed to materially comply with the
provisions of the Guaranty, may cause the Project to be completed and may enter
upon the Land and construct, equip and complete the Project in accordance with
the Plans and Specifications, with such changes therein as Agent may, from time
to time, and in its sole discretion, deem appropriate. In connection with any
construction of the Project undertaken by Lenders pursuant to the provisions of
this Section, Agent may:

(a)       use any funds of Borrower, including any balance which may be held by
Agent as security or in escrow, and any funds remaining unadvanced under the
Loan;

(b)       employ existing contractors, subcontractors, agents, architects,
engineers, and the like, or terminate the same and employ others;

(c)       employ security watchmen to protect the Project;

(d)       make such additions, changes and corrections in the Plans and
Specifications as shall, in the judgment of Lender, be reasonably necessary or
desirable;

(e)       take over and use any and all Personal Property contracted for or
purchased by Borrower, if appropriate, or dispose of the same as Lender sees
fit;

(f)        execute all applications and certificates on behalf of Borrower which
may be required by any Governmental Authority or Requirements or contract
documents or agreements;

(g)       pay, settle or compromise all existing or future bills and claims
which are or may be liens against the Project, or may be necessary for the
completion of the Improvements or the clearance of title to the Project;

 

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(h)       complete the marketing and leasing of leasable space in the
Improvements, enter into new Leases, and modify or amend existing Leases, all as
Agent shall deem to be necessary or desirable;

(i)        prosecute and defend all actions and proceedings in connection with
the construction of the Improvements or in any other way affecting the Land or
the Improvements and take such action and require such performance as Agent
deems necessary under the Subcontractor Default Surety Program; and

(j)        take such action hereunder, or refrain from acting hereunder, as
Agent may, in its sole and absolute discretion, from time to time determine, and
without any limitation whatsoever, to carry out the intent of this Section.

Borrower shall be liable to Agent and Lenders for all costs actually paid or
incurred for the construction, equipping and completion of the Project in
substantial accordance with the Plans and Specifications, whether the same shall
be paid or incurred pursuant to the provisions of this Section or otherwise, and
all payments made or liabilities incurred by Agent and Lenders hereunder of any
kind whatsoever shall be deemed Advances made to Borrower under this Agreement
and shall be secured by the Deed of Trust and the other Security Documents. To
the extent that any costs so paid or incurred by Agent or any Lender, together
with all other Advances made by Lenders hereunder, exceed the Loan Amount, the
amount of such excess costs shall be added to the Loan Amount, and Borrower’s
obligation to repay the same, together with interest thereon at the Default
Rate, shall be deemed to be evidenced by this Agreement and secured by the Deed
of Trust and the other Security Documents. In the event Agent takes possession
of the Project and assumes control of such construction as aforesaid, it shall
not be obligated to continue such construction longer than it shall see fit and
may thereafter, at any time, change any course of action undertaken by it or
abandon such construction and decline to make further payments for the account
of Borrower whether or not the Project shall have been completed. For the
purpose of this Section, the construction, equipping and completion of the
Project shall be deemed to include any action necessary to cure any Event of
Default by Borrower under any of the terms and provisions of any of the Loan
Documents.

14.4     Other Remedies.

If any one or more of the Events of Default shall have occurred and continue,
and whether or not Lenders shall have terminated their obligations to make
Advances or accelerated the maturity of the Loan pursuant to Section 14.2, Agent
may proceed to protect and enforce its rights and remedies under this Agreement,
the Note or any of the other Loan Documents by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations are evidenced, and as
permitted by applicable law the obtaining of the ex parte appointment of a
receiver, and, if any amount owed to Agent and Lenders shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of Agent. No remedy conferred upon Agent or the holder
of the Note in this Agreement or in any of the other Loan Documents is intended
to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or
thereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.

 

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14.5     Power of Attorney.

For the purposes of carrying out the provisions and exercising the rights,
remedies, powers and privileges granted by or referred to in this Article,
Borrower hereby irrevocably constitutes and appoints Lender its true and lawful
attorney-in-fact, with full power of substitution, exercisable upon the
occurrence and during the continuation of an Event of Default, to execute,
acknowledge and deliver any instruments and do and perform any acts which are
referred to in this Article, in the name and on behalf of Borrower. The power
vested in such attorney-in-fact is, and shall be deemed to be, coupled with an
interest and irrevocable.

14.6     Waivers.

Borrower hereby waives to the extent not prohibited by applicable law (a) all
presentments, demands for performance, notices of nonperformance (except to the
extent required by the provisions hereof or of any of the other Loan Documents),
protests and notices of dishonor, (b) any requirement of diligence or promptness
on Lender’s part in the enforcement of its rights (but not fulfillment of its
obligations) under the provisions of this Agreement or any of the other Loan
Documents, and (c) any and all notices of every kind and description which may
be required to be given by any statute or rule of law and any defense of any
kind which Borrower may now or hereafter have with respect to its liability
under this Agreement or under any of the other Loan Documents.

15.         SETOFF.

Borrower hereby grants to each Lender a lien, security interest and a right of
setoff as security for all liabilities and obligations to such Lender, whether
now existing or hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody,
safekeeping or control of such Lender or any entity under the control of such
Lender or in transit to any of them which may be exercised only following the
occurrence of an Event of Default. At any time following the occurrence of an
Event of Default, without demand or notice, Agent or Lender may set off the same
or any part thereof and apply the same to any liability or obligation of
Borrower subject to the provisions of Section 23.2(f) even though unmatured and
regardless of the adequacy of any other collateral securing the Loan. ANY AND
ALL RIGHTS TO REQUIRE AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF
SET OFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER,
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Agent shall not be
required to marshal any present or future security for, or guarantees of, the
obligations or to resort to any, such security or guarantee in any particular
order and Borrower waives, to the fullest extent that it lawfully can, (a) any
right it might have to require Agent to pursue any particular remedy before
proceeding against it and (b) any right to the benefit of, or to direct the
application of the proceeds of any Collateral until the obligations are paid in
full.

16.         EXPENSES.

Borrower agrees to pay (a) the reasonable costs of producing and reproducing
this Agreement, the other Loan Documents and the other agreements and
instruments mentioned herein,

 

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(b) any taxes (including any interest and penalties in respect thereto) payable
by Lenders (other than taxes based upon a Lender’s net income or any franchise
taxes or any other income or similar taxes), including any recording, mortgage
or intangibles taxes in connection with the Deed of Trust or other taxes payable
on or with respect to the transactions contemplated by this Agreement, including
any taxes payable by a Lender after the Closing Date (Borrower hereby agreeing
to indemnify each Lender with respect thereto), (c) all title insurance premiums
for the Title Policy, and the reasonable and actual fees, expenses and
disbursements of Agent’s and each Lender’s counsel or any local counsel to Agent
incurred in connection with the preparation, administration or interpretation of
the Loan and the Loan Documents and other instruments mentioned herein, the
making of each Advance hereunder, and amendments, modifications, approvals,
consents or waivers hereto or hereunder, (d) the reasonable out-of-pocket fees,
expenses and disbursements of Agent and Lenders incurred in connection with the
preparation, administration or interpretation of the Loan and the Loan Documents
and other instruments mentioned herein, and the making of each Advance hereunder
(including all fees paid to the Construction Inspector, Appraisal fees, and
surveyor fees), subject to any limitation thereon as set forth in this Agreement
or any other Loan Document (e) all reasonable out-of-pocket expenses (including
reasonable attorneys’ fees and costs, but not attorneys which are employees of
Agent or any Lender) and the fees and costs of consultants, accountants,
auctioneers, receivers, brokers, property managers, appraisers, investment
bankers or other experts reasonably necessary and retained by Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against Borrower or any Obligor or the administration thereof
after the occurrence of an Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to Agent
and any Lender’s relationship with Borrower or any Party, and (f) all reasonable
out-of-pocket fees, expenses and disbursements of Agent incurred in connection
with UCC searches, UCC filings, title rundowns, title searches or mortgage
recordings. The covenants of this Section shall survive payment or satisfaction
of payment of all Obligations.

17.       INDEMNIFICATION.

Borrower agrees to indemnify and hold harmless Agent and each Lender from and
against any and all claims, actions and suits, whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Agreement or any of the other
Loan Documents or the transactions contemplated hereby and thereby including,
without limitations, (a) any brokerage, leasing, finders or similar fees,
(b) any disbursement of the proceeds of any of the Advances, (c) any condition
of the Project whether related to the quality of construction or otherwise,
(d) any actual or proposed use by Borrower of the proceeds of any of the
Advances, (e) any actual or alleged violation of any Requirements or Project
Approvals, or (f) Borrower or any Party entering into or performing this
Agreement or any of the other Loan Documents, in each case including, without
limitation, the reasonable fees and disbursements of counsel (but not the costs
of internal counsel) incurred in connection with any such investigation,
litigation or other proceeding. Notwithstanding the foregoing, Borrower shall
have no obligation to indemnify Agent or any Lender for any of the foregoing, if
any such claim, action or suit arises out of the gross negligence or willful
misconduct of Agent or such Lender. In litigation, or the preparation therefor,
Agent shall be entitled to select its own counsel if it reasonably determines
that its interests are not being adequately represented by the counsel selected
by Borrower and, in addition to the foregoing indemnity, Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. The obligations of
Borrower under this Section shall

 

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survive the repayment of the Loan and shall continue in full force and effect so
long as the possibility of such claim, action or suit exists. If, and to the
extent that the obligations of Borrower under this Section are unenforceable for
any reason, Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law.

18.        LIABILITY OF AGENT AND LENDERS.

The liability of Agent and Lenders to Borrower for any breach of the terms of
this Agreement by Agent and Lenders shall not exceed a sum equal to the amount
which Agent and Lender shall be determined to have failed to advance in
consequence of a breach by Agent and Lenders of their obligations under this
Agreement, together with interest thereon at the rate payable by Borrower under
the terms of the Note for Advances which Borrower is to receive hereunder,
computed from the date when the Advance should have been made by Agent and
Lenders to the date when the Advance is, in fact, made by Agent and Lenders,
and, upon the making of any such payment by Agent and Lenders to Borrower, the
same shall be treated as an Advance under this Agreement, in the same fashion as
any other Advance under the terms of this Agreement. In no event shall Agent or
any Lender be liable to Borrower, or anyone claiming by, under or through
Borrower, for any special, exemplary, punitive or consequential damages,
whatever the nature of the breach of the terms of this Agreement by Agent or any
Lender, such damages and claims therefor being expressly WAIVED by Borrower.

19.        RIGHTS OF THIRD PARTIES.

All conditions to the performance of the obligations of Agent and Lenders under
this Agreement, including the obligation to make Advances, are imposed solely
and exclusively for the benefit of Agent and Lenders and no other Person shall
have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that Agent and Lenders will refuse to make
Advances 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 and all of which may be freely waived in whole or in part
by Agent and Lenders at any time if in their sole discretion they deems it
desirable to do so. In particular, Agent and Lender make no representations and
assume no obligations as to third parties concerning the quality of the
construction by Borrower of the Improvements or the absence therefrom of
defects.

20.        SURVIVAL OF COVENANTS, ETC.

All covenants, agreements, representations and warranties made herein, in the
Note, in any of the other Loan Documents or in any documents or other papers
delivered by or on behalf of Borrower or any Party pursuant hereto and thereto
shall be deemed to have been relied upon by Agent and Lenders, notwithstanding
any investigation heretofore or hereafter made by it, and shall survive the
making by Lenders of the Advances, as herein contemplated, and shall continue in
full force and effect either (i) so long as any amount due under this Agreement
or the Note or any of the other Loan Documents remains outstanding or Lenders
have any obligation to make any Advances or (ii) for such longer period as may
be provided for herein or in any other Loan Document. All statements contained
in any certificate or other paper delivered to Agent at any time by or on behalf

 

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of any Party or any Subsidiary thereof pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by such Person.

21.         USURY.

Borrower shall not be obligated to pay and Lenders shall not collect interest at
a rate higher than the maximum permitted by law or the maximum that will not
subject Lenders to any civil or criminal penalties. If, because of the
acceleration of maturity, the payment of interest in advance or any other
reason, Borrower is required, under the provisions of any Loan Document or
otherwise, to pay interest rate at a rate in excess of such maximum rate, the
rate of interest under such provisions shall immediately and automatically be
reduced to such maximum rate and any payment made in excess of such maximum
rate, together with interest thereon at the rate provided herein from the date
of such payment, shall be immediately and automatically applied to the reduction
of the unpaid principal balance of the Loan as of the date on which excess
payment was made. If the amount to be so applied to reduction of the unpaid
principal balance exceeds the unpaid principal balance, the amount of such
excess shall be refunded by Lenders to Borrower.

22.         RELATIONSHIP.

The relationship among Agent, Lenders and Borrower is solely that of a lender
and borrower, and nothing contained herein or in any of the other Loan Documents
shall in any manner be construed as making the parties hereto partners, joint
venturers or any other relationship other than lender and borrower.

23.         AGENT AND THE LENDERS.

23.1     Rights, Duties and Immunities of Agent.

(a)         Appointment of Agent. Each Lender hereby irrevocably designates and
appoints Santander Bank as Agent of such Lender to act as specified herein and
in the other Loan Documents, and each such Lender hereby irrevocably authorizes
Agent to take such actions, exercise such powers and perform such duties as are
expressly delegated to or conferred upon Agent by the terms of this Loan
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Agent agrees to act as such upon the express
conditions contained in this Section 23. Agent shall not have any duties or
responsibilities except those expressly set forth herein or in the other Loan
Documents, nor shall it have any fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Loan Agreement or otherwise exist against Agent. The provisions
of this Section 23 are solely for the benefit of Agent and Lenders, and Borrower
shall not have any rights (nor any obligations) as a third party beneficiary of
any of the provisions hereof.

(b)         Administration of Loan by Agent. Agent shall be responsible for
administering the Loan on a day-to-day basis. In the exercise of such
administrative duties, Agent shall use the same diligence and standard of care
that is customarily used by Agent with respect to similar loans held by Agent
solely for its own account.

 

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Each Lender delegates to Agent the full right and authority on its behalf to
take the following specific actions in connection with its administration of the
Loan:

(i)         to fund the Loan in accordance with the provisions of the Loan
Documents, but only to the extent of immediately available funds provided to
Agent by the respective Lenders for such purpose;

(ii)         to receive all payments of principal, interest, fees and other
charges paid by, or on behalf of, Borrower and, except for fees to which Agent
is entitled pursuant to the Loan Documents or otherwise, to distribute all such
funds to the respective Lenders as provided for hereunder;

(iii)         to keep and maintain complete and accurate files and records of
all material matters pertaining to the Loan, and make such files and records
available for inspection and copying by each Lender and its respective employees
and agents during normal business hours upon reasonable prior notice to Agent;
and

(iv)         to do or omit doing all such other actions as may be reasonably
necessary or incident to the implementation, administration and servicing of the
Loan and the rights and duties delegated hereinabove.

(c)         Delegation of Duties. Agent may execute any of its duties under this
Loan Agreement or any other Loan Document by or through its agents or
attorneys-in-fact, and shall be entitled to the advice of counsel concerning all
matters pertaining to its rights and duties hereunder or under the Loan
Documents. Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.

(d)         Exculpatory Provisions. Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be liable
for any action lawfully taken or omitted to be taken by it or them under or in
connection with this Loan Agreement or the other Loan Documents, except for its
or their gross negligence or willful misconduct. Neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
recital, statement, representation or warranty made by Borrower or any of its
officers or agents contained in this Loan Agreement or the other Loan Documents
or in any certificate or other document delivered in connection therewith;
(ii) the performance or observance of any of the covenants or agreements
contained in, or the conditions of, this Loan Agreement or the other Loan
Documents; (iii) the state or condition of any properties of Borrower or any
other obligor hereunder constituting Collateral for the Obligations of Borrower
hereunder, or any information contained in the books or records of Borrower;
(iv) the validity, enforceability, collectability, effectiveness or genuineness
of this Loan Agreement or any other Loan Document or any other certificate,
document or instrument furnished in connection therewith; or (v) the validity,
priority or perfection of any lien securing or purporting to secure the
Obligations or the value or sufficiency of any of the Collateral.

 

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(e)         Reliance by Agent. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any notice, consent, certificate, affidavit, or
other document or writing believed by it to be genuine and correct and to have
been signed, sent or made by the proper person or persons, and upon the advice
and statements of legal counsel (including, without, limitation, counsel to
Borrower), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Loan Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by Lenders against any and all
liability and expense which may be incurred by it by reason of the taking or
failing to take any such action. Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Loan Agreement and the other
Loan Documents in accordance with any written request of the Required Lenders,
and each such request of the Required Lenders, and any action taken or failure
to act by Agent pursuant thereto, shall be binding upon all of Lenders;
provided, however, that Agent shall not be required in any event to act, or to
refrain from acting, in any manner which is contrary to the Loan Documents or to
applicable law.

(f)         Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless Agent has
actual knowledge of the same or has received notice from a Lender or Borrower
referring to this Loan Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default”. In the event that Agent
obtains such actual knowledge or receives such a notice, Agent shall give prompt
notice thereof to each of Lenders. Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders. Unless and until Agent shall have received such direction, Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to any such Default or Event of Default as it shall deem
advisable in the best interest of Lenders.

(g)         Lenders’ Credit Decisions. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender, and based on
the financial statements prepared by Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
investigation into the business, assets, operations, property, and financial and
other condition of Borrower and has made its own decision to enter into this
Loan Agreement and the other Loan Documents. Each Lender also acknowledges that
it will, independently and without reliance upon Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in determining whether or not
conditions precedent to closing any Loan hereunder have been satisfied and in
taking or not taking any action under this Loan Agreement and the other Loan
Documents.

(h)         Agent’s Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify Agent, ratably in proportion to their respective
Commitments, for (i) any amounts not reimbursed by Borrower for which Agent is
entitled to reimbursement by Borrower under this Loan Agreement or the other
Loan Documents, (ii) any other expenses incurred by Agent on behalf of Lenders
in connection with the preparation, execution, delivery, administration,
amendment, waiver and/or enforcement of this Loan Agreement and the other Loan
Documents, and (iii) any liabilities, obligations, losses, damages,

 

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penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may imposed on, incurred by or asserted against
Agent in any way relating to or arising out of this Loan Agreement or the other
Loan Documents or any other document delivered in connection therewith or any
transaction contemplated thereby, or the enforcement of any of the terms hereof
or thereof, provided that no Lender shall be liable for any of the foregoing to
the extent that they arise from the gross negligence or willful misconduct of
Agent. If any indemnity furnished to Agent for any purpose shall, in the opinion
of Agent, be insufficient or become impaired, Agent may call for additional
indemnity and cease, or not commence, to do the action indemnified against until
such additional indemnity is furnished.

(i)         Agent in its Individual Capacity. With respect to its Commitment as
a Lender, and the Loans made by it and the Note issued to it, Agent shall have
the same rights and powers hereunder and under any other Loan Document as any
Lender and may exercise the same as though it were not Agent, and the term
“Lender” or “Lenders” shall, unless the context otherwise indicates, include
Agent in its individual capacity. Agent and its subsidiaries and affiliates may
accept deposits from, lend money to, and generally engage in any kind of
commercial or investment banking, trust, advisory or other business with
Borrower or any subsidiary or affiliate of Borrower as if it were not Agent
hereunder.

(j)         Successor Agent. Agent may resign at any time by giving thirty
(30) days’ prior written notice to Lenders and Borrower. The Required Lenders,
for good cause, may remove Agent at any time by giving thirty (30) days’ prior
written notice to Agent, Borrower and the other Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and accepted such appointment within thirty (30) days after the
retiring Agent’s giving notice of resignation or the Required Lenders’ giving
notice of removal, as the case may be, then the retiring Agent may appoint, on
behalf of Lenders, a successor Agent. Each such successor Agent shall be a
financial institution which meets the requirements of an Eligible Assignee. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents. After any retiring Agent’s resignation hereunder, the
provisions of this Section 23 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent hereunder.

(k)         Duties in the Case of Enforcement. In case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, Agent shall, at the request, or may,
upon the consent, of the Required Lenders, and provided that Lenders have given
to Agent such additional indemnities and assurances against expenses and
liabilities as Agent may reasonably request, proceed to enforce the provisions
of this Loan Agreement and the other Loan Documents respecting the foreclosure
of mortgages, the sale or other disposition of all or any part of the Collateral
and the exercise of any other legal or equitable rights or remedies as it may
have hereunder or under any other Loan Document or otherwise by virtue of
applicable law, or to refrain from so acting if similarly requested by the
Required Lenders. Agent shall be fully protected in so

 

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acting or refraining from acting upon the instruction of the Required Lenders,
and such instruction shall be binding upon all Lenders. The Required Lenders may
direct Agent in writing as to the method and the extent of any such foreclosure,
sale or other disposition or the exercise of any other right or remedy, Lenders
hereby agreeing to indemnify and hold Agent harmless from all costs and
liabilities incurred in respect of all actions taken or omitted in accordance
with such direction, provided that Agent need not comply with any such direction
to the extent that Agent reasonably believes Agent’s compliance with such
direction to be unlawful or commercially unreasonable in any applicable
jurisdiction. Agent may, in its discretion but without obligation, in the
absence of direction from the Required Lenders, take such interim actions as it
believes necessary to preserve the rights of Lenders hereunder and in and to any
Collateral securing the Obligations, including but not limited to petitioning a
court for injunctive relief, appointment of a receiver or preservation of the
proceeds of any Collateral. Each of Lenders acknowledges and agrees that no
individual Lender may separately enforce or exercise any of the provisions of
any of the Loan Documents, including without limitation the Notes, other than
through Agent.

23.2        Respecting Loans and Payments.

(a)         Procedures for Loans. Agent shall give written notice to each Lender
of each request for an Advance, or conversion of an existing Advance from a
Variable Rate Advance to a LIBOR Advance, by facsimile transmission, hand
delivery or overnight courier, not later than 11:00 a.m. (Eastern Time) (i) two
(2) Business Days prior to any LIBOR Advance or conversion to a LIBOR Advance,
or (ii) one (1) Business Day prior to any Variable Rate Advance. Each such
notice shall be accompanied by a written summary of the request for a Loan and
shall specify (a) the date of the requested Loan, (b) the aggregate amount of
the requested Loan, (c) each Lender’s pro rata share of the requested Loan, and
(d) the applicable interest rate selected by Borrower with respect to such Loan,
or any portion thereof, together with the applicable Interest Period, if any,
selected, or deemed selected, by Borrower. Each Lender shall, before 11:00 a.m.
(Eastern Time) on the date set forth in any such request for a Loan, make
available to Agent, at an account to be designated by Agent at Santander Bank in
New York, New York, in same day funds, each Lender’s ratable portion of the
requested Loan. After Agent’s receipt of such funds and upon Agent’s
determination that the applicable conditions to making the requested Loan have
been fulfilled, Agent shall make such funds available to Borrower as provided
for in this Loan Agreement. Within a reasonable period of time following the
making of each Loan, but in no event later than ten (10) Business Days following
such Loan, Agent shall deliver to each Lender a copy of Borrower’s request for
Loan. Promptly after receipt by Agent of written request from any Lender, Agent
shall deliver to the requesting Lender the accompanying certifications and such
other instruments, documents, certifications and approvals delivered by or on
behalf of Borrower to Agent in support of the requested Loan.

(b)         Nature of Obligations of Lenders. The obligations of Lenders
hereunder are several and not joint. Failure of any Lender to fulfill that its
obligations hereunder shall not result in any other Lender becoming obligated to
advance more than its Commitment Percentage of the Loan, nor shall such failure
release or diminish the obligations of any other Lender to fund its Commitment
Percentage provided herein.

 

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(c)         Payments to Agent. All payments of principal of and interest on the
Loans or the Notes shall be made to Agent by Borrower or any other obligor or
guarantor for the account of Lenders in immediately available funds as provided
in the Notes and this Loan Agreement. Except as otherwise expressly provided
herein, Agent agrees promptly to distribute to each Lender, on the same Business
Day upon which each such payment is made, such Lender’s proportionate share of
each such payment in immediately available funds excluding Liquidation Proceeds
which shall be distributed in accordance with Section 23.2(d) below. Agent shall
upon each distribution promptly notify Borrower of such distribution and each
Lender of the amounts distributed to it applicable to principal of, and interest
on, the proportionate share held by the applicable Lender. Each payment to Agent
under the first sentence of this Section shall constitute a payment by Borrower
to each Lender in the amount of such Lender’s proportionate share of such
payment, and any such payment to Agent shall not be considered outstanding for
any purpose after the date of such payment by Borrower to Agent without regard
to whether or when Agent makes distribution thereof as provided above. If any
payment received by Agent from Borrower is insufficient to pay both all accrued
interest and all principal then due and owing, Agent shall first apply such
payment to all outstanding interest until paid in full and shall then apply the
remainder of such payment to all principal then due and owing, and shall
distribute the payment to each Lender accordingly.

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

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

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

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

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

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

 

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(e)         Adjustments. If, after Agent has paid each Lender’s proportionate
share of any payment received or applied by Agent in respect of the Loan, that
payment is rescinded or must otherwise be returned or paid over by Agent,
whether pursuant to any bankruptcy or insolvency law, sharing of payments clause
of any loan agreement or otherwise, such Lender shall, at Agent’s request,
promptly return its proportionate share of such payment or application to Agent,
together with Lender’s proportionate share of any interest or other amount
required to be paid by Agent with respect to such payment or application.

(f)         Setoff. If any Lender (including Agent), acting in its individual
capacity, shall exercise any right of setoff against a deposit balance or other
account of Borrower held by such Lender on account of the obligations of
Borrower under this Loan Agreement, such Lender shall remit to Agent all such
sums received pursuant to the exercise of such right of setoff, and Agent shall
apply all such sums for the benefit of all of Lenders hereunder in accordance
with the terms of this Loan Agreement.

(g)         Distribution by Agent. If in the opinion of Agent distribution of
any amount received by it in such capacity hereunder or under the Notes or under
any of the other Loan Documents might involve any liability, it may refrain from
making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction or has been resolved by the
mutual consent of all Lenders. In addition, Agent may request full and complete
indemnity, in form and substance satisfactory to it, prior to making any such
distribution. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by Agent is to be repaid, each person to whom any such
distribution shall have been made shall either repay to Agent its proportionate
share of the amount so adjudged to be repaid or shall pay over to the same in
such manner and to such persons as shall be determined by such court.

(h)         Delinquent Lender. If for any reason any Lender shall fail or refuse
to abide by its obligations under this Loan Agreement, including without
limitation its obligation to make available to Agent its pro rata share of any
Loans, expenses or setoff (a “Delinquent Lender”) and such failure is not cured
within ten (10) days of receipt from Agent of written notice thereof, then, in
addition to the rights and remedies that may be available to Agent, other
Lenders, Borrower or any other party at law or in equity, and not at limitation
thereof, (i) such Delinquent Lender’s right to participate in the administration
of, or decision-making rights related to, the Loans, this Loan Agreement or the
other Loan Documents shall be suspended during the pendency of such failure or
refusal, and (ii) a Delinquent Lender shall be deemed to have assigned any and
all payments due to it from Borrower, whether on account of outstanding Loans,
interest, fees or otherwise, to the remaining non-delinquent Lenders for
application to, and reduction of, their proportionate shares of all outstanding
Loans until, as a result of application of such assigned payments Lenders’
respective pro rata shares of all outstanding Loans shall have returned to those
in effect immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency. The Delinquent Lender’s decision-making and
participation rights and rights to payments as set forth in clauses (i) and
(ii) hereinabove shall be restored only upon the payment by the Delinquent
Lender of its pro rata share of any Loans or expenses as to which it is
delinquent, together with interest thereon at the Default Rate from the date
when originally due until the date upon which any such amounts are actually
paid.

 

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The non-delinquent Lenders shall also have the right, but not the obligation, in
their respective, sole and absolute discretion, to acquire for no cash
consideration, (pro rata, based on the respective Commitments of those Lenders
electing to exercise such right) the Delinquent Lender’s Commitment to fund
future Loans (the “Future Commitment”). Upon any such purchase of the pro rata
share of any Delinquent Lender’s Future Commitment, the Delinquent Lender’s
share in future Loans and its rights under the Loan Documents with respect
thereto shall terminate on the date of purchase, and the Delinquent Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest, including, if so requested, an Assignment and Acceptance. Each
Delinquent Lender shall indemnify Agent and each non-delinquent Lender from and
against any and all loss, damage or expenses, including but not limited to
reasonable attorneys’ fees and funds advanced by Agent or by any non-delinquent
Lender, on account of a Delinquent Lender’s failure to timely fund its pro rata
share of a Loan or to otherwise perform its obligations under the Loan
Documents.

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

23.3    Assignment and Participation.

(a)        Conditions to Assignment by Lenders. Except as provided herein, each
Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Loan Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it and the Notes held by it), upon satisfaction of
the following conditions: (i) each of Agent and Borrower shall have given its
prior written consent to such assignment (provided that, in the case of
Borrower, such consent will not be unreasonably withheld and shall not be
required if an Event of Default shall have occurred and be continuing);
(ii) each such assignment shall be of a constant, and not a varying, percentage
of all the assigning Lender’s rights and obligations under this Loan Agreement,
(iii) each assignment shall be in an amount that is at least $10,000,000.00 and
is a whole multiple of $1,000,000.00, (iv) Agent, in its individual capacity as
a Lender, shall retain, so long as an Event of Default has not occurred and is
not continuing, free of any such assignment, an amount of its Commitment of not
less than $10,000,000.00, and (v) the parties to such assignment shall execute
and deliver to Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of Exhibit G hereto (an
“Assignment and Acceptance”), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder, and (y) the assigning Lender shall, to the extent provided in
such assignment and upon payment

 

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to Agent of the registration fee referred to in Section 23.3, be released from
its obligations under this Loan Agreement.

(b)        Certain Representations and Warranties, Limitations, Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

(i)        other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, the assigning Lender makes no representation or warranty, express
or implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Loan Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Loan Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or the attachment, perfection
or priority of any security interest or mortgage;

(ii)        the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of Borrower and its
affiliates, related entities or subsidiaries or any other person primarily or
secondarily liable in respect of any of the Obligations, or the performance or
observance by Borrower or any other person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under this Loan
Agreement or any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;

(iii)        such assignee confirms that it has received a copy of this Loan
Agreement, together with copies of the most recent financial statements provided
by Borrower as required by the terms of this Loan Agreement, together with such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;

(iv)        such assignee will, independently and without reliance upon the
assigning Lender, Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Loan Agreement;

(v)        such assignee represents and warrants that it is an Eligible
Assignee;

(vi)       such assignee appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under this Loan Agreement and
the other Loan Documents as are delegated to Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto;

(vii)      such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Loan Agreement are
required to be performed by it as a Lender; and

 

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(viii)    such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance.

(c)      Register. Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register or similar list (the “Register”) for the
recordation of the names and addresses of Lenders and the Commitment Percentage
of, and principal amount of the Loans owing to Lenders from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and Borrower, Agent and Lenders may treat each person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Loan Agreement. The
Register shall be available for inspection by Borrower and Lenders at any
reasonable time and from time to time upon reasonable prior notice. Upon each
such recordation, the assigning Lender agrees to pay to Agent a registration fee
in the sum of ($3,500.00).

(d)      New Notes. Upon its receipt of an Assignment and Acceptance executed by
the parties to such assignment, together with each Note subject to such
assignment, Agent shall (a) record the information contained therein in the
Register, and (b) give prompt written notice thereof to Borrower and Lenders
(other than the assigning Lender). Within five (5) Business Days after receipt
of such written notice, Borrower, at its own expense, shall execute and deliver
to Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Lender in an amount equal to the amount retained by it
hereunder. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be
substantially the form of the assigned Notes. Within fifteen (15) Business Days
of issuance of any new Notes pursuant to this Section 23.3, Borrower shall
deliver an opinion of counsel, addressed to Lenders and Agent, relating to the
due authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance satisfactory to
Lenders. The surrendered Notes shall be cancelled and returned to Borrower.

(e)      Participations. Each Lender may sell participations to one or more
banks or other financial institutions in all or a portion of such Lender’s
rights and obligations under this Loan Agreement and the other Loan Documents;
provided that (a) each such participation shall be in a minimum amount of
$10,000,000.00, (b) each participant shall meet the requirements of an Eligible
Assignee, (c) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to Borrower, (d) Borrower will not be
required to incur other than de minimis costs with respect to such sale, and
(e) the only rights granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of the Loan
Documents shall be the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on any Loans, extend the
term or increase the amount of the Commitment of such Lender as it relates to
such participant, reduce the amount of any commitment fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.

 

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(f)      Disclosure. Borrower agrees that in addition to disclosures made in
accordance with standard and customary banking practices any Lender may disclose
information obtained by such Lender pursuant to this Loan Agreement to assignees
or participants and potential assignees or participants hereunder; provided that
such assignees or participants or potential assignees or participants shall
agree (a) to treat in confidence such information unless such information
otherwise becomes public knowledge, (b) not to disclose such information to a
third party, except as required by law or legal process and (c) not to make use
of such information for purposes of transactions unrelated to such contemplated
assignment or participation.

(g)      Miscellaneous Assignment Provisions. Any assigning Lender shall retain
its rights to be indemnified pursuant to Section 17 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Lender
is not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
Borrower and Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this Section 23.3(g) to the contrary notwithstanding, any Lender may at any time
pledge all or any portion of its interest and rights under this Loan Agreement
(including all or any portion of its Notes) to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or the enforcement thereof shall release the pledgor
Lender from its obligations hereunder or under any of the other Loan Documents.

(h)      Assignment by Borrower. Borrower shall not assign or transfer any of
its rights or obligations under any of the Loan Documents without the prior
written consent of each of Lenders.

(i)      Replacement of Lenders. If any Lender shall be a Delinquent Lender,
then Borrower may, at its sole expense and effort, upon notice to such
Delinquent Lender and Agent, require such Delinquent Lender to assign and
delegate, without recourse, all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an Eligible Assignee reasonably
acceptable to Borrower, and such Eligible Assignee shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
provided that:

(i)      such Delinquent Lender shall have received payment of an amount equal
to the outstanding amount of its Commitment, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan
Documents from the assignee (to the extent of such outstanding amount of its
Commitment and accrued interest and fees) or Borrower (in the case of all other
amounts),

(ii)      Agent has provided its consent to such assignment, which shall not be
unreasonably withheld,

 

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(iii)    the parties to the assignment shall execute and deliver to Agent an
Assignment and Acceptance; and

(iv)    such assignment does not conflict with applicable law.

23.4    Administrative Matters.

(a)      Amendment, Waiver, Consent, Etc. Except as otherwise provided herein or
as to any term or provision hereof which provides for the consent or approval of
Agent, no term or provision of this Loan Agreement or any other Loan Document
may be changed, waived, discharged or terminated, nor may any consent required
or permitted by this Loan Agreement or any other Loan Document be given, unless
such change, waiver, discharge, termination or consent receives the written
approval of the Required Lenders.

Notwithstanding the foregoing, the unanimous written approval of all Lenders
(other than a Defaulting Lender) shall be required with respect to any proposed
amendment, waiver, discharge, termination, or consent which:

(i)      has the effect of (a) extending the final scheduled maturity or the
date of any amortization payment of any Loan or Note, (b) reducing the rate or
extending the time of payment of interest or fees thereon, (c) increasing or
reducing the principal amount thereof, or (d) otherwise postponing or forgiving
any indebtedness thereunder,

(ii)     releases or discharges any material portion of the Collateral other
than in accordance with the express provisions of the Loan Documents,

(iii)    amends, modifies or waives any provisions of this 23.4(a),

(iv)    reduces the percentage specified in the definition of Required Lenders,

(v)    except as otherwise provided in the Loan Agreement, changes the amount of
any Lender’s Commitment or Commitment Percentage, or

(vi)    releases or waives any guaranty of the Obligations or indemnifications
provided in the Loan Documents;

(vii)    and provided, further, that without the consent of Agent, no such
action shall amend, modify or waive any provision of this Article or any other
provision of any Loan Document which relates to the rights or obligations of
Agent.

(b)      Deemed Consent or Approval. With respect to any requested amendment,
waiver, consent or other action which requires the approval of the Required
Lenders or all of Lenders, as the case may be, in accordance with the terms of
this Loan Agreement, or if Agent is required hereunder to seek, or desires to
seek, the approval of the Required Lenders or all of Lenders, as the case may
be, prior to undertaking a particular action or course of conduct, Agent in each
such case shall provide each Lender with written notice of any such

 

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request for amendment, waiver or consent or any other requested or proposed
action or course of conduct, accompanied by such detailed background information
and explanations as may be reasonably necessary to determine whether to approve
or disapprove such amendment, waiver, consent or other action or course of
conduct. Agent may (but shall not be required to) include in any such notice,
printed in capital letters or boldface type, a legend substantially to the
following effect:

“THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE. FAILURE TO RESPOND WITHIN TEN
(10) CALENDAR DAYS FROM THE RECEIPT OF THIS COMMUNICATION SHALL CONSTITUTE A
DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION REQUESTED BY BORROWER OR THE
COURSE OF CONDUCT PROPOSED BY AGENT AND RECITED ABOVE,”

and if the foregoing legend is included by Agent in its communication, a Lender
shall be deemed to have approved or consented to such action or course of
conduct for all purposes hereunder if such Lender fails to object to such action
or course of conduct by written notice to Agent within ten (10) calendar days of
such Lender’s receipt of such notice.

24.    NOTICES.

Except as otherwise provided herein or in any other Loan Document, each notice,
demand, election or request provided for or permitted to be given pursuant to
this Agreement (hereinafter in this Section referred to as “Notice”) must be in
writing and (i) deposited in the United States Mail, postage prepaid, by
registered or certified mail, or (ii) hand delivered by any commercially
recognized courier service or overnight delivery service such as Federal Express
addressed as follows:

If to Agent:

Santander Bank, N.A.

45 East 53rd Street,

New York, New York 10022

Attn: Real Estate Division

With a copy to (which copy shall not constitute notice):

Riemer & Braunstein LLP

Seven Times Square, Suite 2506

New York, New York 10036

Attention: Jonathan B. Rosenbloom, Esq.

If to Borrower:

GGT Oxford Venture MD, LLC

c/o GGT Oxford Holdings, LLC

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

 

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Attention: Rosemary Q. Mills, Chief Financial Officer

With additional copies to (which copies shall not constitute notice):

Troutman Sanders LLP

301 S. College Street, Suite 3400

Charlotte, North Carolina 28202

Attention: David H. Jones, Esq.

GGT Oxford Venture MD, LLC

c/o Woodfield Investment Company, LLC

11425 Horseman’s Trail

Raleigh, North Carolina 27613

Attention: Michael A. Underwood

GGT Oxford Holdings, LLC

CNL Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attention: Holly J. Greer, General Counsel

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

Center at City Commons

450 South Orange Avenue

Orlando, Florida 32801

Attention: Joaquin E. Martinez, Esq.

and to each Lender, at the address set forth in the Assignment and Acceptance.

Any such addressee may change its address for such notices to such other address
in the United States as such addressee shall have specified by written notice
given as set forth above. All periods of notice shall be measured from the
deemed date of delivery. A Notice shall be deemed to have been given, delivered
and received for the purposes of all Loan Documents upon the earliest of: (i) if
sent by such certified or registered mail, on the third Business Day following
the date of postmark, or (ii) if hand delivered at the specified address by such
courier or overnight delivery service, when so delivered or tendered for
delivery during customary business hours on a Business Day, or (iii) if so
mailed, on the date of actual receipt as evidenced by the return receipt.

25.    GOVERNING LAW.

It is understood and agreed that all of the Loan Documents were negotiated,
executed and delivered in the State of New York, which State the parties agree
has a substantial relationship to the parties and to the underlying transactions
embodied by the Loan Documents.

(a)    Borrower agrees to furnish to Agent at Agent’s office in New York, New
York all further instruments, certifications and documents to be furnished
hereunder.

 

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(b)    This Agreement, except as otherwise provided in this Section 25 and each
of the other Loan Documents shall in all respects be governed, construed,
applied and enforced in accordance with the internal laws of the State of New
York without regard to principles of conflicts of law.

(c)    Notwithstanding the foregoing choice of law:

(i)    the laws of the State of Maryland shall apply to the creation and
perfection of any liens or security interests granted in any Loan Document with
respect to the “Real Estate”, “Fixtures” and all other “Property” (as such terms
are defined in the Deed of Trust) situated in the State of Maryland;

(ii)    the laws of the State of Maryland shall apply to the enforcement by
Agent of its foreclosure and other remedies against Grantor under the Deed of
Trust and under the other Loan Documents with respect to the Real Estate,
Fixtures, or other Property situated in the State of Maryland, including, by way
of illustration, but not in limitation, actions for foreclosure, for injunctive
relief or for the appointment of a receiver shall be governed by the laws of the
State of Maryland;

(iii)    the laws of the State of Maryland shall apply to the exercise of any
rights of Agent hereunder with respect to the Real Estate and Fixtures, and with
respect to the perfection of any liens or security interests granted under the
Deed of Trust in any other Property situated in the State of Maryland; and

(iv)    provisions of Federal law and the law of the State of Maryland shall
apply in defining the terms Hazardous Materials, Environmental Legal
Requirements and Legal Requirements applicable to the Property as such terms are
used in the Loan Agreement, the Indemnity Agreement and the other Loan
Documents.

(d)    Nothing contained herein or any other provisions of the Loan Documents
shall be construed to provide that the substantive laws of the State of Maryland
shall apply to any parties, rights and obligations under any of the Loan
Documents, which, except as expressly provided in clauses (c)(i), (ii),
(iii) and (iv) of this Section 25, are and shall continue to be governed by the
substantive law of State of New York, except as set forth in clauses (c)(i),
(ii), (iii) and (iv) of this Section 25. In addition, the fact that portions of
the Loan Documents may include provisions drafted to conform to the law of the
State of Maryland is not intended, nor shall it be deemed, in any way, to
derogate the parties’ choice of law as set forth or referred to in this Loan
Agreement or in the other Loan Documents. The parties further agree that Lender
may enforce its rights under the Loan Documents including, but not limited to,
its rights to sue Borrower or to collect any outstanding indebtedness in
accordance with applicable law.

26.    CONSENT TO JURISDICTION; WAIVERS.

BORROWER AND EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO
PERSONAL JURISDICTION IN THE STATE OF NEW YORK OVER ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR

 

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RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND (B) WAIVES
ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (i) TO THE RIGHT, IF
ANY, TO TRIAL BY JURY, AND (ii) TO OBJECT TO JURISDICTION WITHIN THE STATE OF
NEW YORK OR VENUE IN ANY PARTICULAR FORUM WITHIN THE STATE OF NEW YORK. IN
ADDITION, BORROWER WAIVES THE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL
DAMAGES. BORROWER AND EACH PARTY AGREES THAT, IN ADDITION TO ANY METHODS OF
SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN
ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED DIRECTED TO BORROWER AT THE ADDRESS SET FORTH IN
SECTION 24 ABOVE, AND SERVICE SO MADE SHALL BE COMPLETE SEVEN (7) DAYS AFTER THE
SAME SHALL BE SO MAILED. NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT AGENT
FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST
ANY COLLATERAL AND AGAINST BORROWER, AND AGAINST ANY PROPERTY OF BORROWER, IN
ANY OTHER STATE. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING SUCH
ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE AGREEMENT
CONTAINED HEREIN THAT THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE RIGHTS
AND OBLIGATIONS OF BORROWER, EACH PARTY, AGENT, AND THE LENDER HEREUNDER OR THE
SUBMISSION HEREIN BY BORROWER AND EACH PARTY TO PERSONAL JURISDICTION WITHIN THE
STATE OF NEW YORK.

27.    HEADINGS.

The captions in this Agreement are for convenience of reference only and shall
not define or limit the provisions hereof.

28.    COUNTERPARTS.

This Agreement and any amendment hereof may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.

29.    ENTIRE AGREEMENT, ETC.

The Loan Documents and any other documents executed in connection herewith or
therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in Section 30.

30.    CONSENTS, AMENDMENTS, WAIVERS, ETC.

 

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Except as otherwise expressly set forth in Section 23.4(a) of this Agreement,
any consent or approval required or permitted by this Agreement to be given by
Agent may be given, and any term of this Agreement or of any other instrument
related hereto or mentioned herein may be amended, and the performance or
observance by Borrower of any terms of this Agreement or such other instrument
or the continuance of any Event of Default may be waived (either generally or in
a particular instance and either retroactively or prospectively) with, but only
with, the written consent of Agent, Required Lenders or Lenders, as applicable.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of Agent or any Lender in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No Advance made by Lenders
hereunder during the continuance of any Default or Event of Default shall
constitute a waiver thereof. No notice to or demand upon Borrower shall entitle
Borrower to other or further notice or demand in similar or other circumstances.

31.    REPLACEMENT DOCUMENTS.

Upon receipt of an affidavit of an officer of a Lender as to the loss, theft,
destruction or mutilation of the Note or any other security document(s) which is
not of public record and, in the case of any such loss, theft, destruction or
mutilation, upon surrender and cancellation of such Note or other document(s),
Borrower will issue, in lieu thereof, a replacement Note or other document(s) in
the same principal amount thereof and otherwise of like tenor.

32.    TAX SHELTER REGULATIONS.

Notwithstanding anything to the contrary set forth herein or in any other
written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties hereto acknowledge and agree
that (i) any obligations of confidentiality contained herein and therein do not
apply and have not applied from the commencement of discussions between the
parties to the tax treatment and tax structure of the transactions contemplated
by the Loan Documents (and any related transactions or arrangements), and
(ii) each party (and each of its employees, representatives, or other agents)
may disclose to any and all Persons as required, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by the Loan
Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to such party relating to such tax treatment and tax
structure, all within the meaning of Treasury Regulations Section 1.6011-4;
provided, however, that each party recognizes that the privilege each has to
maintain, in its sole discretion, with regard to the confidentiality of a
communication relating to the transactions contemplated by the Loan Documents,
including a confidential communication with its attorney or a confidential
communication with a federally authorized tax practitioner under Section 7525 of
the Internal Revenue Code, is not intended to be affected by the foregoing.

33.    TIME OF THE ESSENCE.

Time is of the essence with respect to each and every covenant, agreement and
obligation of Borrower under this Agreement and the other Loan Documents.

34.    SEVERABILITY.

 

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The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.

35.    CONFLICTING PROVISIONS.

In the event of a conflict between the provisions of this Agreement and any
other Loan Document, unless such other Loan Document specifically states that
its provisions shall control, the provisions of this Agreement shall control.

36.    AUTHORIZED REPRESENTATIVES.

Agent and each of Lenders is authorized to rely upon the continuing authority of
the persons, officers, signatories or agents hereafter designated (“Authorized
Representatives”) to bind Borrower with respect to all matters pertaining to the
Loan and the Loan Documents including, but not limited to, the selection of
interest rates. Such authorization may be changed only upon written notice to
Agent accompanied by evidence, reasonably satisfactory to Agent, of the
authority of the person giving such notice and such notice shall be effective
not sooner than five (5) Business Days following receipt thereof by Agent. The
present Authorized Representatives are listed on Exhibit J. Agent shall have a
right of approval, not to be unreasonably withheld or delayed, over the identity
of the Authorized Representatives so as to assure Agent and each of Lenders that
each Authorized Representative is a responsible and senior official of Borrower.

37.    RELEASE OF CERTAIN COLLATERAL.

Provided that no Default or Event of Default then exists under this Agreement,
at the request of Borrower, Agent shall release from the lien of the Deed of
Trust a portion of the Land known as the “Reconveyance Parcel,” more
particularly described in Exhibit O hereto, upon the following conditions:

(a)    Agent shall have received not less than twenty (20) days prior written
notice of the proposed release;

(b)    Borrower shall promptly make such applications as may be necessary to the
appropriate Government Authorities for the Reconveyance Parcel to constitute or
become part of one or more tax lots separate and distinct from the tax lot or
tax lots applicable to the portion of the Land remaining encumbered by the lien
of the Deed of Trust;

(c)    Neither the release from the lien of the Deed of Trust nor the conveyance
to the transferee of the Reconveyance Parcel will violate any applicable zoning
or subdivision laws;

(d)    Agent shall have received such other documents, certificates, instruments
or assurances as Agent may reasonably request; and

 

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(e)    Within ten (10) days after such release Borrower shall deliver to Agent
an updated Survey indicating, inter alia, the property line boundaries of the
portion of the Land remaining encumbered by the lien of the Deed of Trust after
release of the Reconveyance Parcel.

[Remainder of page left intentionally blank]

 

-92-

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.

 

BORROWER:

GGT OXFORD VENTURE MD, LLC,

a Delaware limited liability company

By: /s/ Todd H. Jacobus                            

Name:

 

Todd H. Jacobus

Title:

 

Authorized Signatory

[Signature Page to Construction Agreement]

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AGENT:

SANTANDER BANK, N.A.

By:

 

/s/ Michael J. Corbett

 

Name: Michael J. Corbett

 

Title: Senior Vice President

LENDER:

SANTANDER BANK, N.A.

By:

 

/s/ Michael J. Corbett

 

Name: Michael J. Corbett

 

Title: Senior Vice President

[Signature Page to Construction Agreement]

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Exhibit A

Construction Schedule

[Omitted as not necessary to an understanding of the Agreement]

Exhibit B

Disbursement Schedule

[Omitted as not necessary to an understanding of the Agreement]

Exhibit C

Project Budget

[Omitted as not necessary to an understanding of the Agreement]

Exhibit D

BORROWER’S REQUISITION

[Omitted as not necessary to an understanding of the Agreement]

Schedule I

Direct Costs

On File with Agent

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Schedule II

Indirect Costs

On file with Agent

Exhibit E

CONTRACTOR’S REQUISITION CERTIFICATE

[Omitted as not necessary to an understanding of the Agreement]

Exhibit F

Lenders’ Commitments

[Omitted as not necessary to an understanding of the Agreement]

Exhibit G

Form of Assignment and Acceptance

[Omitted as not necessary to an understanding of the Agreement]

Exhibit H

Form of Note

[Omitted as not necessary to an understanding of the Agreement]

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Exhibit I

COMPLIANCE CERTIFICATE

[Omitted as not necessary to an understanding of the Agreement]

Exhibit J

Authorized Representatives

[Omitted as not necessary to an understanding of the Agreement]

Exhibit K

Property Agreements

[Omitted as not necessary to an understanding of the Agreement]

Exhibit L

Major Construction Contracts

[Omitted as not necessary to an understanding of the Agreement]

Exhibit M

Plans and Specifications

[Omitted as not necessary to an understanding of the Agreement]

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

Exhibit N

Form of Assignment of Management Agreement

[Omitted as not necessary to an understanding of the Agreement]

Exhibit O

Reconveyance Parcel

[Omitted as not necessary to an understanding of the Agreement]

Schedule 8.12

CertainTransactions

[Omitted as not necessary to an understanding of the Agreement]

Schedule 8.14

Partners, Beneficiaries, Etc.

[Omitted as not necessary to an understanding of the Agreement]

Schedule 8.20

Project Approvals

[Omitted as not necessary to an understanding of the Agreement]