Exhibit 10.45
AMENDED AND RESTATED
MEZZANINE LOAN AGREEMENT
Between

1100 West Holdings, LLC,

a Delaware limited liability company
as Borrower
The Lenders Party Hereto
as Lenders
and

Eurohypo AG, New York Branch
as Administrative Agent
Dated as of November 25, 2008

 

 

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TABLE OF CONTENTS

              Page  
 
       
ARTICLE 1 CERTAIN DEFINITIONS
    2  
 
       
Section 1.1 Certain Definitions
    2  
Section 1.2 Types of Loans
    30  
 
       
ARTICLE 2 LOAN TERMS
    30  
 
       
Section 2.1 The Commitments, Loans and Notes
    30  
Section 2.2 Conversions or Continuations of Loans
    32  
Section 2.3 Interest Rate; Late Charge
    32  
Section 2.4 Terms of Payment
    33  
Section 2.5 Extension of Maturity Date
    35  
Section 2.6 Exit Fee
    41  
Section 2.7 Application of Operating Revenues; Cash Management
    41  
Section 2.8 Payments; Pro Rata Treatment; Etc.
    41  
Section 2.9 Yield Protection; Etc.
    46  
 
       
ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS
    51  
 
       
Section 3.1 Insurance
    51  
Section 3.2 Use and Application of Insurance Proceeds
    52  
Section 3.3 Casualty and Condemnation
    52  
 
       
ARTICLE 4 RESERVES
    53  
 
       
Section 4.1 Interest Reserve Fund
    53  
Section 4.2 Mortgage Loan Reserves
    55  
 
       
ARTICLE 5 ENVIRONMENTAL MATTERS
    55  
 
       
Section 5.1 Certain Definitions
    55  
Section 5.2 Representations and Warranties on Environmental Matters
    56  
Section 5.3 Covenants on Environmental Matters
    57  
Section 5.4 Allocation of Risks and Indemnity
    58  
Section 5.5 No Waiver
    59  
 
       
ARTICLE 6 LEASING MATTERS
    59  
 
       
Section 6.1 Representations and Warranties on Leases
    59  
Section 6.2 Restaurant Lease and Future Lease
    59  
Section 6.3 Covenants
    60  
 
       
ARTICLE 7 REPRESENTATIONS AND WARRANTIES
    60  
 
       
Section 7.1 Organization and Power
    60  
Section 7.2 Validity of Loan Documents
    60  
Section 7.3 Liabilities; Litigation
    61  
Section 7.4 Taxes and Assessments
    61  
Section 7.5 Other Agreements; Defaults
    61  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 7.6 Compliance with Law
    61  
Section 7.7 Location of Borrower
    62  
Section 7.8 ERISA
    62  
Section 7.9 Margin Stock
    62  
Section 7.10 Tax Filings
    62  
Section 7.11 Solvency
    62  
Section 7.12 Full and Accurate Disclosure
    62  
Section 7.13 Single Purpose Entity
    63  
Section 7.14 Management of the Project
    63  
Section 7.15 No Conflicts
    63  
Section 7.16 Title
    63  
Section 7.17 Flood Zone
    64  
Section 7.18 Insurance
    64  
Section 7.19 Certificate of Occupancy; Licenses
    64  
Section 7.20 Physical Condition
    64  
Section 7.21 Boundaries
    64  
Section 7.22 Material Agreements
    65  
Section 7.23 Plans and Specifications; Project Budget
    66  
Section 7.24 Filing and Recording Taxes
    66  
Section 7.25 Investment Company Act
    66  
Section 7.26 Patriot Act; Foreign Assets Control Regulations
    66  
Section 7.27 Organizational Structure
    67  
Section 7.28 Property Specific Representations
    67  
Section 7.29 Affiliates
    68  
Section 7.30 List of Mortgage Loan Documents
    68  
Section 7.31 Mortgage Loan Event of Default
    68  
 
       
ARTICLE 8 FINANCIAL REPORTING
    68  
 
       
Section 8.1 Financial Statements
    68  
Section 8.2 Accounting Principles
    70  
Section 8.3 Other Information
    70  
Section 8.4 Annual Operating Budget
    70  
Section 8.5 Audits
    70  
Section 8.6 Mortgage Borrower Financial Statements
    70  
Section 8.7 Notice of Default
    71  
Section 8.8 Access
    71  
 
       
ARTICLE 9 COVENANTS
    72  
 
       
Section 9.1 Due on Sale and Encumbrance; Transfers of Interests
    72  
Section 9.2 Taxes; Charges
    73  
Section 9.3 Control; Management
    73  
Section 9.4 Operation; Maintenance; Inspection
    74  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 9.5 Taxes on Security
    74  
Section 9.6 Legal Existence; Name, Etc.
    74  
Section 9.7 Affiliate Transactions
    75  
Section 9.8 Limitation on Other Debt
    75  
Section 9.9 Further Assurances
    76  
Section 9.10 Estoppel Certificates
    76  
Section 9.11 Notice of Certain Events
    76  
Section 9.12 Indemnification
    76  
Section 9.13 Size of Units
    77  
Section 9.14 Minimum Sales Prices
    77  
Section 9.15 Hedge Agreements
    77  
Section 9.16 No Distributions
    79  
Section 9.17 Condominium Covenants
    79  
Section 9.18 Patriot Act Compliance; Foreign Assets Control Regulations
    80  
Section 9.19 Payment for Labor and Materials
    81  
Section 9.20 Hotel Management Agreement
    82  
Section 9.21 Americans with Disabilities
    83  
Section 9.22 Zoning
    83  
Section 9.23 ERISA
    83  
Section 9.24 Property Specific Covenants
    84  
Section 9.25 Forward Purchase Contract
    84  
Section 9.26 Mortgage Borrower Covenants
    84  
Section 9.27 Refinancing or Prepayment of the Mortgage Loan
    84  
Section 9.28 Acquisition of the Mortgage Loan
    85  
Section 9.29 UCC Insurance Policy
    85  
Section 9.30 Construction Management Contract
    86  
 
       
ARTICLE 10 EVENTS OF DEFAULT
    86  
 
       
Section 10.1 Payments
    86  
Section 10.2 Insurance
    86  
Section 10.3 Single Purpose Entity
    86  
Section 10.4 Taxes
    86  
Section 10.5 Sale, Encumbrance, Etc.; Change of Control
    86  
Section 10.6 Representations and Warranties
    86  
Section 10.7 Other Encumbrances
    86  
Section 10.8 Various Covenants
    86  
Section 10.9 Involuntary Bankruptcy or Other Proceeding
    87  
Section 10.10 Voluntary Petitions, Etc.
    87  
Section 10.11 Indebtedness
    87  
Section 10.12 Dissolution
    87  
Section 10.13 Judgments
    87  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 10.14 Security
    88  
Section 10.15 Guarantees
    88  
Section 10.16 Interest Reserve Fund
    88  
Section 10.17 Mortgage Loan Event of Default
    88  
Section 10.18 Hedge Agreement
    88  
Section 10.19 Junior Loan Intercreditor Agreement
    88  
Section 10.20 Covenants
    88  
 
       
ARTICLE 11 REMEDIES
    89  
 
       
Section 11.1 Remedies — Insolvency Events
    89  
Section 11.2 Remedies — Other Events
    89  
Section 11.3 Administrative Agent’s Right to Perform the Obligations
    89  
 
       
ARTICLE 12 MISCELLANEOUS
    90  
 
       
Section 12.1 Notices
    90  
Section 12.2 Amendments, Waivers, Etc.
    90  
Section 12.3 Limitation on Interest
    91  
Section 12.4 Invalid Provisions
    92  
Section 12.5 Reimbursement of Expenses
    92  
Section 12.6 Approvals; Third Parties; Conditions
    93  
Section 12.7 Lenders and Administrative Agent Not in Control; No Partnership
    93  
Section 12.8 Time of the Essence
    93  
Section 12.9 Successors and Assigns
    93  
Section 12.10 Renewal, Extension or Rearrangement
    94  
Section 12.11 Waivers
    94  
Section 12.12 Cumulative Rights
    94  
Section 12.13 Singular and Plural
    94  
Section 12.14 Phrases
    94  
Section 12.15 Exhibits and Schedules
    94  
Section 12.16 Titles of Articles, Sections and Subsections
    94  
Section 12.17 Promotional Material
    95  
Section 12.18 Survival
    95  
Section 12.19 WAIVER OF JURY TRIAL
    95  
Section 12.20 Remedies of Borrower
    95  
Section 12.21 GOVERNING LAW
    96  
Section 12.22 Entire Agreement
    97  
Section 12.23 Counterparts
    97  
Section 12.24 Assignments and Participations
    97  
Section 12.25 Brokers
    99  
Section 12.26 Right of Setoff
    100  
Section 12.27 Reserved
    100  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 12.28 Mortgage Loan Defaults
    100  
Section 12.29 Intercreditor Agreement
    102  
Section 12.30 Discussions with Mortgage Lender
    103  
Section 12.31 Independent Approval Rights
    103  
 
       
ARTICLE 13 LIMITATIONS ON LIABILITY
    103  
 
       
Section 13.1 Limitation on Liability
    103  
Section 13.2 Limitation on Liability of the Administrative Agent’s and the
Lenders’ Officers, Employees, etc.
    104  
 
       
ARTICLE 14 BUILDING CONVERSION; PAYMENT OF RELEASE PRICES; SALE OF UNITS
    105  
 
       
Section 14.1 Completion of Building Conversion
    105  
Section 14.2 Marketing and Sales Program; Sales of Units; Deposits
    105  
Section 14.3 Sale of Units and Payment of Release Price
    106  
Section 14.4 Application of Excess Cash Flow
    106  
Section 14.5 Sale of Parking Spaces
    106  
 
       
ARTICLE 15 THE ADMINISTRATIVE AGENT
    107  
 
       
Section 15.1 Appointment, Powers and Immunities
    107  
Section 15.2 Reliance by Administrative Agent
    108  
Section 15.3 Defaults
    108  
Section 15.4 Rights as a Lender
    111  
Section 15.5 Standard of Care; Indemnification
    111  
Section 15.6 Non Reliance on Administrative Agent and Other Lenders
    111  
Section 15.7 Failure to Act
    112  
Section 15.8 Resignation of Administrative Agent
    112  
Section 15.9 Consents under Loan Documents
    112  
Section 15.10 Authorization
    113  
Section 15.11 Reserved
    113  
Section 15.12 Defaulting Lenders
    113  
Section 15.13 Liability of the Administrative Agent
    114  
Section 15.14 Transfer of Agency Function
    115  
 
       
ARTICLE 16 AMENDMENT AND RESTATEMENT
    115  
 
       
ARTICLE 17 RELEASE
    115  

 

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LIST OF EXHIBITS AND SCHEDULES

         
EXHIBIT A
  -   LEGAL DESCRIPTION OF PROJECT
EXHIBIT B
  -   RESERVED
EXHIBIT C
  -   RESERVED
EXHIBIT D
  -   FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E
  -   FORM OF NOTICE OF CONVERSION/CONTINUATION
 
       
SCHEDULE 1(a)
  -   COMMITMENTS
SCHEDULE 1(b)
  -   MINIMUM SALES PRICE SCHEDULE
SCHEDULE 1(c)
  -   UNIT RELEASE SCHEDULE
SCHEDULE 2.1
  -   ADVANCE AND CONSTRUCTION COMPLETION CONDITIONS
SCHEDULE 2.4(1)
  -   WIRE INSTRUCTIONS
SCHEDULE 7.3
  -   LITIGATION
SCHEDULE 7.23
  -   PROJECT BUDGET
SCHEDULE 7.27
  -   ORGANIZATIONAL CHART
SCHEDULE 7.30
  -   LIST OF MORTGAGE LOAN DOCUMENTS

 

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AMENDED AND RESTATED MEZZANINE LOAN AGREEMENT
This Amended and Restated Mezzanine Loan Agreement (this “Agreement”) is entered
into as of November 25, 2008 among 1100 WEST HOLDINGS, LLC, a limited liability
company duly organized and validly existing under the laws of the State of
Delaware (“Borrower”); each of the lenders that is a signatory hereto identified
under the caption “LENDERS” on the signature pages hereof and each lender that
becomes a “Lender” after the date hereof pursuant to Section 12.24(2)
(individually, a “Lender” and, collectively, the “Lenders”); and EUROHYPO AG,
NEW YORK BRANCH (“Eurohypo”), as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the “Administrative
Agent”).
RECITALS
A. Borrower, the Administrative Agent and Eurohypo, as Lender, are parties to a
Mezzanine Loan Agreement dated as of April 25, 2008 (as the same may be amended,
modified and supplemented and in effect from time to time, the “Existing Loan
Agreement”), which provides for, among other things, loans by the Lenders to
Borrower in an aggregate principal or face amount not exceeding $28,000,000 (the
“Loans or Existing Loans”).
B. Mortgage Borrower (as defined below), Mortgage Lenders (as defined below) and
Eurohypo, as administrative agent are parties to that certain Loan Agreement
dated as of August 8, 2006, as amended by that certain First Amendment to Loan
Agreement dated as of September 6, 2007, and that certain Second Amendment to
Loan Agreement dated as of April 25, 2008 (said Loan Agreement, as so amended,
the “Original Mortgage Loan Agreement”), which provides for, among other things,
loans by Mortgage Lenders to Mortgage Borrower in an aggregate principal or face
amount not exceeding $124,000,000 (the “Mortgage Loan”).
C. On the date hereof, Mortgage Borrower, Mortgage Lenders and Eurohypo, as
administrative agent, are entering into that certain Amended and Restated Loan
Agreement dated as of the date hereof (as the same may be further amended,
modified and supplemented and in effect from time to time, the “Mortgage Loan
Agreement”).
D. Additional funds are required to complete the Building Conversion (as defined
below) and cause Construction Completion (as defined below) to occur and certain
affiliates of Borrower and Mortgage Borrower are ready to provide such funds
through a combination of additional equity investments in Mortgage Borrower and
the making of the Junior Mezzanine Loan (as defined below).
E. Borrower, the Lenders and the Administrative Agent desire to amend, restate
and supersede the Existing Loan Agreement with this Agreement. As of the date
hereof, the principal balance of the Loans is $26,046,370.42 and the unfunded
amount of the Commitments is $1,953,629.58.

 

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AGREEMENT
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. As used herein, the following terms have the
meanings indicated:
(1) “Acceptable Counterparty” shall mean (1) Eurohypo and/or its Affiliates, or
(2) any other counterparty to the Hedge Agreement that has and shall maintain,
until the expiration of the applicable Hedge Agreement, a credit rating of not
less than ‘A’ from S&P.
(2) “Access Laws” has the meaning assigned to such term in Section 9.21(1).
(3) “Additional Costs” has the meaning assigned to such term in
Section 2.9(1)(a).
(4) “Adjusted LIBOR Rate” means, for any Interest Period for any Eurodollar
Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/1000 of
1%) determined by the Administrative Agent to be equal to the LIBOR Rate for
such Interest Period divided by one (1) minus the Reserve Requirement (if any)
for such Interest Period.
(5) “Adjusted Operating Expenses” means Operating Expenses as determined and
adjusted by the Administrative Agent in accordance with its then current audit
policies and procedures.
(6) “Adjusted Operating Revenues” means Operating Revenues as determined and
adjusted by the Administrative Agent in accordance with its then current audit
policies and procedures.
(7) “Advance Conditions” means those conditions listed in Schedule 2.1 attached
hereto and made a part hereof.
(8) “Advance Date” has the meaning assigned to such term in Section 2.8(6).
(9) “Advanced Amount” has the meaning assigned to such term in Section 15.12(2).
(10) “Affiliate” means with respect to any Person, another Person that directly
or indirectly Controls, or is under common Control with, or is Controlled by,
such Person and, if such Person is an individual, any member of the immediate
family (including parents, spouse, children and siblings) of such individual and
any trust whose principal beneficiary is such individual or one or more members
of such immediate family and any Person who is Controlled by any such member or
trust. For purposes of this definition, any Person that owns directly or
indirectly securities having ten percent (10%) or more of the voting power for
the election of directors or other governing body of a corporation or
thirty-five percent (35%) or more of the partnership, membership or other
ownership interests of any other Person (other than as a limited partner of such
other Person) will be deemed to Control such corporation or other Person.
Notwithstanding the foregoing, no individual shall be an Affiliate solely by
reason of his or her being a director, officer, trustee or employee of Borrower.

 

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(11) “Agency Fee” means the agency fee agreed to by Borrower and Administrative
Agent pursuant to the Fee Letter.
(12) “Agreement” means this Amended and Restated Mezzanine Loan Agreement, as
amended from time to time.
(13) “Amendment Closing Date” means the date hereof.
(14) “Annual Operating Budget” has the meaning assigned to such term in
Section 8.4.
(15) “Anti-Terrorism Order” means Executive Order No. 13,224, 66 Fed. Reg.
49,079 (2001), issued by the President of the United States of America
(Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism).
(16) “Applicable Law” means collectively, all international, foreign, Federal,
state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any governmental authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case whether or not having the force of law.
(17) “Applicable Lending Office” means, for each Lender and for each Type of
Loan, the “Lending Office” of such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on the respective signature pages hereof or
such other office of such Lender (or of an affiliate of such Lender) as such
Lender may from time to time specify to the Administrative Agent and Borrower as
the office by which its Loans of such Type are to be made and maintained.
(18) “Applicable Margin” with respect to the Loans shall mean (a) for Base Rate
Loans, ten percent (10.0%) per annum; and (b) for Eurodollar Loans, six percent
(6.0%) per annum.
(19) “Appraisal” means an appraisal of the Project prepared by an appraiser
reasonably satisfactory to the Administrative Agent, which appraisal must also
(a) satisfy the requirements of Title XI of the Federal Institution Reform,
Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder
(including the appraiser with respect thereto) and (b) be otherwise in form and
substance reasonably satisfactory to the Administrative Agent.
(20) “Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

 

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(21) “Approved Sales Program” has the meaning assigned to such term in
Section 14.2.
(22) “Assignment and Acceptance” means an Assignment and Acceptance, duly
executed by the parties thereto, in substantially the form of Exhibit D hereto
and consented to by the Administrative Agent in accordance with
Section 12.24(2).
(23) “Assignment of Forward Purchase Contract” means that certain Assignment of
Forward Purchase Contract dated as of the Original Closing Date by and among
Mortgage Borrower, Administrative Agent and the buyers named in the Forward
Purchase Contract.
(24) “Assignment of Rents and Leases” means the Assignment of Rents and Leases,
executed by Mortgage Borrower for the benefit of the Mortgage Loan
Administrative Agent (on behalf of the Mortgage Lenders), and pertaining to
leases of space in the Project, as the same may be modified, amended and/or
supplemented from time to time.
(25) “Association” means the association to be formed pursuant to the
Declaration.
(26) “Authorized Officer” means, with respect to Borrower or Mortgage Borrower,
an officer of Sanctuary Management who has knowledge of the financial affairs of
Borrower or Mortgage Borrower, and with respect to Morgans LLC, an officer who
holds the title of controller or chief financial officer or an equivalent title.
(27) “Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. § 101
et seq., as amended from time to time.
(28) “Bankruptcy Party” has the meaning assigned in Section 10.9.
(29) “Base Rate” means, for any day, a rate per annum equal to the Prime Rate
for such day. Each change in any interest rate provided for herein based upon
the Base Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
(30) “Base Rate Loans” means Loans that bear interest at rates based upon the
Base Rate.
(31) “Basel II” means that certain revised at-risk capital framework published
by the Basel Committee on Banking Supervision in its paper entitled
“International Convergence of Capital Measurement and Capital Standards: a
Revised Framework” in June, 2004, as amended, modified and in effect from time
to time.

 

4

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(32) “Boat Slip” or “Boat Slips” means any one or more of the boat slips located
adjacent to, and comprising a part of, the Project.
(33) “Borrower Party” means Mortgage Borrower, Borrower, MMI, Sanctuary Avenue,
any Joinder Party or any Guarantor.
(34) “Broker” has the meaning assigned to such term in Section 12.25.
(35) “Building Conversion” means the conversion of the Project from a rental
building to a hotel condominium building in accordance with, and as contemplated
by, the Project Budget, the Plans and Specifications and the terms of this
Agreement.
(36) “Business Day” means (a) any day other than a Saturday, a Sunday, or other
day on which commercial banks located in New York City are authorized or
required by Applicable Law to remain closed and (b) in connection with a
borrowing of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice
by Borrower with respect to any such borrowing, payment, prepayment or
Conversion, the term “Business Day” shall also exclude a day on which banks are
not open for dealings in Dollar deposits in the London interbank market.
(37) “Cash Management Account” has the meaning assigned to such term in the Cash
Management Agreement.
(38) “Cash Management Agreement” means that certain Second Amended and Restated
Cash Management and Security Agreement dated and delivered on or about the date
hereof, by and among Mortgage Borrower, the Mortgage Loan Administrative Agent
(on behalf of the Lenders) and the Depository Bank, as the same may be modified,
amended and/or supplemented from time to time.
(39) “Casualty” has the meaning assigned to such term in Section 3.3(1).
(40) “Casualty/Taking Account” has the meaning assigned to such term in the Cash
Management Agreement.
(41) “Change of Control” shall mean: (a) any event, including, without
limitation, the sale, transfer, issuance, assignment, pledge or encumbrance in
one or more transactions, of any direct or indirect beneficial ownership
interests in the Borrower, which results in (i) any Person, other than MMI and
Sanctuary Avenue, owning or encumbering any of the membership interests in, or
rights to distributions from, Borrower; (ii) any Person other than the MMI and
Sanctuary Avenue having the responsibility for managing and administering the
day-to-day business and affairs of, or otherwise Controlling, the Borrower,
(iii) any Person other than Morgans LLC and Sanctuary Holdings owning or
encumbering any of the membership interests in, or rights to distributions from,
MMI or Sanctuary Avenue, respectively, or (iv) any Person other than Morgans LLC
or Sanctuary Holdings having the responsibility for managing and administering
the day-to-day business and affairs of, or otherwise Controlling, MMI and
Sanctuary West, respectively; or (b) Morgans Public no longer directly or
indirectly (i) owning (free of any encumbrance) at least 51% of the ownership
interests in and rights to distributions from MMI and owning at least 51% of the
ownership interests in and rights to distributions from Morgans LLC, (ii) having
responsibility for managing and

 

5

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administering the day-to-day business and affairs of MMI or Morgans LLC, or
(iii) in any other respects, any Person other than Morgans Public directly or
indirectly Controlling MMI or Morgans LLC; or (c) Galbut or members of his
immediate family (including parents, spouse, children and siblings) no longer
directly or indirectly (i) owning at least 51% of the ownership interests in and
rights to distributions from Sanctuary Avenue, Sanctuary Holdings or Sanctuary
Management, (ii) having responsibility for managing and administering the
day-to-day business and affairs of Sanctuary Avenue, Sanctuary Holdings or
Sanctuary Management, or (iii) in any other respects, any Person other than
Galbut or Sonny Kahn directly or indirectly Controlling Sanctuary Avenue,
Sanctuary Holdings or Sanctuary Management. A “Change of Control” shall not be
deemed to have occurred solely as a result of (w) the transfer of membership
interests in Borrower between MMI and Sanctuary Avenue, so long as MMI and/or
Sanctuary Avenue continue to own 100% of the membership interests in Borrower
and to Control Borrower; (x) transfers of ownership interests Morgans Public; or
(y) transfers by Galbut of ownership interests in Sanctuary Avenue, Sanctuary
Holdings or Sanctuary Management for estate planning purposes to family members
of Galbut or one or more trusts of the benefit of such immediate family members,
provided that after giving effect to such transfer Galbut shall continue to have
responsibility for managing and administering the day-to-day business and
affairs of, and otherwise continue to Control, Sanctuary Avenue, Sanctuary
Holdings or Sanctuary Management; or (z) as a result of Galbut’s passing away,
he no longer Controls Sanctuary Avenue, Sanctuary Holdings or Sanctuary
Management, so long as Menin, Daniel Galbut, Frohlich or the personal
representative of the estate of Galbut Controls Sanctuary Avenue, Sanctuary
Holdings and Sanctuary Management.
(42) “Clearing Account” has the meaning assigned to such term in the Clearing
Account Agreement.
(43) “Clearing Account Agreement” means the Clearing Account Agreement among
Mortgage Borrower, the Administrative Agent and the Clearing Bank pertaining to
the Clearing Account, as the same may be modified, amended and/or supplemented
and in effect from time to time.
(44) “Clearing Bank” has the meaning assigned to such term in the Clearing
Account Agreement.
(45) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder.
(46) “Collateral” means the pledge of ownership interests provided as collateral
for the Loan pursuant to the Pledge Agreement and all other collateral described
herein and in the other Loan Documents.
(47) “Commitment” means, as to each Lender, the obligation of such Lender to
make a Loan in a principal amount up to but not exceeding the amount set
opposite the name of such Lender on Schedule 1(a) under the caption “Commitment”
or, in the case of a Person that becomes a Lender pursuant to an assignment
permitted under Section 12.24(2), as specified in the respective instrument of
assignment pursuant to which such assignment is effected. The original aggregate
principal amount of the Commitments is Twenty Eight Million and No/100 Dollars
($28,000,000).

 

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(48) “Completion Guaranty” means that certain Completion Guaranty, dated as of
the date hereof, executed by Galbut, Frohlich, Menin and Morgans LLC in favor of
the Administrative Agent (on behalf of the Lenders), as the same may be
modified, amended, and/or supplemented and in effect from time to time.
(49) “Condominium Act” means Chapter 718 of the Florida Statutes, as amended.
(50) “Condominium Escrow” means that certain condominium escrow held pursuant to
the Condominium Escrow Agreement.
(51) “Condominium Escrow Agreement” means the condominium escrow agreement
between Mortgage Borrower and Escrow Agent, approved by the Mortgage Loan
Administrative Agent in writing.
(52) “Constituent Documents” has the meaning assigned to such term in
Section 9.17(1).
(53) “Construction Completion” means the satisfaction of all of the conditions
set forth on Part B of Schedule 2.1 as required pursuant to the terms of this
Agreement.
(54) “Construction Completion Deadline” means April 1, 2009.
(55) “Construction Consultant” has the meaning assigned to such term in
Section 8.8.
(56) “Construction Management Contract” means the contract for the management of
construction of the Improvements dated as of July 9, 2007, entered into between
Mortgage Borrower and the Construction Manager, as the same may be modified,
supplemented and/or amended from time to time in accordance with the terms of
the Mortgage Loan Agreement.
(57) “Construction Manager” means G.T. Construction and Development, Inc.
(58) “Continue” “Continuation” and “Continued” refer to the continuation
pursuant to Section 2.2 of (a) a Eurodollar Loan from one Interest Period to the
next Interest Period or (b) a Base Rate Loan at the Base Rate.
(59) “Contract Price” means the Purchase Price of a Unit as set forth in a
Qualified Purchase Contract (net of any credits to the purchaser), not including
any amounts for any build-out or improvements in excess of Standard Unit Finish.

 

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(60) “Control” of one Person (the “controlled Person”) by another Person (the
“controlling Person”) means the possession, directly or indirectly, by the
controlling Person of the power or ability to direct or cause the direction of
the management or policies of the controlled Person, whether through the ability
to exercise voting power, by contract or otherwise (“Controlled” and
“Controlling” each have the meanings correlative thereto).
(61) “Convert” “Conversion” and “Converted” means, with respect to any Type of
Loan, a conversion pursuant to the terms of this Agreement of one Type of Loans
into another Type of Loans, which may be accompanied by the transfer by a Lender
(at its sole discretion) of a Loan from one Applicable Lending Office to
another.
(62) “Debt” means, for any Person, without duplication: (a) all indebtedness of
such Person for borrowed money, for amounts drawn under a letter of credit, or
for the deferred purchase price of property for which such Person or its assets
is liable, (b) all unfunded amounts under a loan agreement, letter of credit, or
other credit facility for which such Person would be liable, if such amounts
were advanced under the credit facility, (c) all amounts required to be paid by
such Person as a guaranteed payment to partners, members (or other equity
holders) or a preferred or special dividend, including any mandatory redemption
of shares or interests, (d) all indebtedness guaranteed by such Person, directly
or indirectly, (e) all obligations under leases that constitute capital leases
for which such Person is liable, and (f) all obligations of such Person under
interest rate swaps, caps, floors, collars and other interest hedge agreements,
in each case whether such Person is liable contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which obligations such Person
otherwise assures a creditor against loss.
(63) “Debt Service” means, for any period of determination, the aggregate
interest due with respect to the Loans and the Mortgage Loan during such period.
(64) “Debt Service Coverage Ratio” means, as of any date of determination, the
ratio of Net Operating Income to Debt Service for the twelve (12) calendar
months ending immediately prior to the date of such determination. The Debt
Service Coverage Ratio shall be as determined by the Administrative Agent based
upon the most recent reports required to have been submitted by Borrower under
Section 8.1 (or, if no such reports have been so submitted, such other
information as Administrative Agent shall determine in its discretion), which
determination shall be conclusive in the absence of manifest error.
(65) “Declarant” has the meaning assigned to such term in Section 9.17(1).
(66) “Declaration” means that certain Declaration of Condominium for Mirador
1000, dated December 30, 2004 and recorded in the Clerk of the Court, Miami-Dade
County, Florida, on December 30, 2004 in OR Book 22959 at Page 1727.
(67) “Default Rate” means a rate per annum equal to five percent (5%) plus the
Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans, provided that, with respect to principal of a Eurodollar Loan, the
“Default Rate” shall be the greater of (a) five percent (5%) plus the interest
rate for such Loan as provided in Section 2.3 and (b) the rate provided for
above in this definition; provided, however, that in no event shall the Default
Rate exceed the maximum rate allowed by Applicable Law.

 

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(68) “Defaulting Lender” has the meaning assigned to such term in
Section 15.12(1).
(69) “Depository Bank” has the meaning assigned to such term in the Cash
Management Agreement.
(70) “Distribution” means, other than payments which are expressly permitted to
be made pursuant to this Agreement, any of the following: (a) the payment by any
Person of any Distributions or other payments to its shareholders, members or
partners; (b) the declaration or payment of any dividend on or in respect of
shares of any class of capital stock of, membership interest in, or partnership
interest in, any Person; (c) the purchase or other retirement of any shares of
any class of capital stock of, membership interest in, or partnership interest
in, any Person, directly or indirectly through a subsidiary or otherwise;
(d) the return of capital by any Person to its shareholders, members, or
partners; or (e) any other payment on or in respect of any shares of any class
of capital stock of, membership interest in, or partnership interest in, any
Person.
(71) “Dollars” and “$” means lawful money of the United States of America.
(72) “Eligible Assignee” means any of (a) a commercial bank organized under the
laws of the United States, or any State thereof, and having (i) total assets in
excess of $1,000,000,000 and (ii) a combined capital and surplus of at least
$250,000,000; (b) a commercial bank organized under the laws of any other
country which is a member of the Organization of Economic Cooperation and
Development (“OECD”), or a political subdivision of any such country, and having
(i) total assets in excess of $1,000,000,000 and (ii) a combined capital and
surplus of at least $250,000,000, 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 OECD; (c) a life insurance company organized
under the laws of any State of the United States, or organized under the laws of
any country and licensed as a life insurer by any State within the United States
and having admitted assets of at least $1,000,000,000; (d) a nationally
recognized investment banking company or other financial institution in the
business of making loans, or an Affiliate thereof (other than any Person which
is directly or indirectly a Borrower Party or directly or indirectly an
Affiliate of any Borrower Party) organized under the laws of any State of the
United States, and licensed or qualified to conduct such business under the laws
of any such State and having (i) total assets of at least $1,000,000,000 and
(ii) a net worth of at least $250,000,000; (e) an Approved Fund; or (f) or a
Related Entity of Eurohypo.
(73) “Environmental Claim” has the meaning assigned to such term in
Section 5.1(1).
(74) “Environmental Laws” has the meaning assigned to such term in
Section 5.1(2).
(75) “Environmental Liens” has the meaning assigned to such term in
Section 5.3(4).

 

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(76) “Environmental Losses” has the meaning assigned to such term in
Section 5.1(4).
(77) “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any regulations promulgated thereunder.
(78) “Escrow Agent” means an escrow agent as may be reasonably approved by
Administrative Agent.
(79) “Eurodollar Loan” means Loans that bear interest at rates based on rates
referred to in the definition of “LIBOR Rate”.
(80) “Eurohypo” means Eurohypo AG, New York Branch.
(81) “Event of Default” has the meaning assigned to such term in Article 10.
(82) “Excess Cash Flow” means, with respect to the applicable Unit, the Net
Sales Proceeds less the Scheduled Release Price.
(83) “Existing Loan Agreement” has the meaning assigned to such term in the
Recitals.
(84) “Existing Loans” has the meaning assigned to such term in the Recitals.
(85) “Exit Fee” means a fee payable by Borrower to Administrative Agent (for the
benefit of the Lenders) in an amount equal to one and one-quarter percent
(1.25%) of the full amount of the Commitments.
(86) “Fee Letter” means the letter agreement, dated as of the Original Closing
Date, between Borrower and Administrative Agent with respect to certain fees
payable by Borrower in connection with the Loans, as the same may be modified or
amended from time to time.
(87) “FNMA” means the Federal National Mortgage Association.
(88) “Fifth Extension Notice” has the meaning assigned to such term in Section
2.5(5)(a).
(89) “Fifth Extension Period” has the meaning assigned to such term in Section
2.5(5).
(90) “First Extension Notice” has the meaning assigned to such term in Section
2.5(1)(a).
(91) “First Extension Period” has the meaning assigned to such term in Section
2.5(1).

 

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(92) “Forward Purchase Contract” means that Agreement for Purchase of
Condominium Units and related Rider, each dated as of the Original Closing Date,
by and among Mortgage Borrower, as seller and/or developer and Galbut, Frohlich,
Menin and Morgans Group LLC, a Delaware limited liability company, individually
and collectively, as buyers and/or purchasers.
(93) “Fourth Extension Notice” has the meaning assigned to such term in Section
2.5(4)(a).
(94) “Fourth Extension Period” has the meaning assigned to such term in Section
2.5(4).
(95) “Franchise Fee” means the franchise fee payable to Hotel Manager as hotel
operator upon the sale of a Unit, which shall be in the amount of one percent
(1%) of the Purchase Price of such Unit up to that portion of the gross sales
price attributable to a gross sales price of $800 per square foot, and ten
percent (10%) of the Units’ gross sales price attributable to a sales price
greater than $800 per square foot.
(96) “Frohlich” means Seth Frohlich, an individual.
(97) “Galbut” means Abraham Galbut, an individual.
(98) “Government Lists” means (a) the Specially Designated Nationals and Blocked
Persons List maintained by OFAC, (b) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the Rules
and Regulations of OFAC that is included in “Governmental Lists”, or (c) any
similar list maintained by the United States Department of State, the United
States Department of Commerce or any other Governmental Authority or pursuant to
any Executive Order of the President of the United States of America.
(99) “Guarantee or “Guaranty” means any instruments of guaranty (including the
Joinder, Completion Guarantee and the Minimum Equity Guarantee) delivered to the
Administrative Agent (for the benefit of the Lenders) in connection with the
Loans.
(100) “Guarantor” or Guarantors” means the Persons, including the Joinder
Parties, executing a Guarantee.
(101) “Hazardous Materials” has the meaning assigned to such term in
Section 5.1(5).
(102) “Hazardous Substances Indemnity Agreement” means that certain Hazardous
Substances Indemnity Agreement by Borrower and Joinder Parties in favor of the
Administrative Agent and each of the Lenders, to be executed, dated and
delivered to the Administrative Agent (on behalf of the Lenders) on the Original
Closing Date, as the same may be modified, amended and/or supplemented and in
effect from time to time.
(103) “Hedge Agreement” shall mean an interest rate cap with a maturity date of
the initial Maturity Date entered into with an Acceptable Counterparty with a
notional amount equal to the outstanding principal balance of the Loans for the
term of the Loan and a LIBOR strike price not greater than five percent (5%).
Furthermore, each Hedge Agreement shall provide for (i) the calculation of
interest, (ii) the determination of the interest rate, (iii) the modification of
the Interest Period, and (iv) the distribution of payments thereunder to be
identical to the definition of Interest Period set forth herein.

 

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(104) “Hedge Agreement Pledge” means that certain Assignment, Pledge and
Security Agreement, to be executed, dated and delivered by Borrower and
Acceptable Counterparty to the Administrative Agent (on behalf of the Lenders)
in accordance with Section 9.15 and at any other time Borrower elects or is
required to enter into a Hedge Agreement, covering Borrower’s right, title and
interest in and to any such Hedge Agreement, as the same may be modified,
amended and/or supplemented and in effect from time to time.
(105) “Hotel Improvements” means that portion of the Improvements consisting of
a 335-room luxury hotel to be known as “Mondrian South Beach Hotel Residences,”
consisting of a restaurant, a sunset bar, a swimming pool, a gym, a spa, the
Boat Slips, on-site parking areas, and related amenities and improvements.
(106) “Hotel Management Agreement” means that certain Hotel Management Agreement
dated as of August 7, 2006, between the Hotel Manager and Mortgage Borrower with
respect to the management of the Project as a hotel, as the same may from time
to time hereafter be modified, amended or replaced in accordance with the terms
of this Agreement.
(107) “Hotel Manager” means Morgans Hotel Group Management LLC, a Delaware
limited liability company, or another hotel manager acceptable to the
Administrative Agent.
(108) “Hotel Manager’s Consent” means the Hotel Manager’s Consent and
Subordination Agreement executed, dated and delivered by (i) the Hotel Manager
and Borrower to the Administrative Agent (on behalf of the Lenders) on the
Original Closing Date and (ii) any successor Hotel Manager to Administrative
Agent (on behalf of Lenders) prior to its appointment as Hotel Manager, as the
same may be modified, amended and/or supplemented and in effect from time to
time.
(109) “Hotel Opening” means that the Hotel Improvements are open for business
with the public in compliance with the all Applicable Law and the majority of
Units have been completed and are ready for occupancy.
(110) “Hotel Opening Deadline” means January 1, 2009.
(111) “Improvements” has the meaning assigned to such term in the Mortgage.
(112) “Indemnified Party” has the meaning assigned to such term in Section 9.12.

 

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(113) “Independent Manager” means, in the case of a limited liability company or
a limited partnership, a member or manager that is a natural person who, for the
five (5) year period prior to his or her appointment as an Independent Manager
and at all times while serving as an Independent Manager was not and will not
be, directly or indirectly, (i) an employee, manager, stockholder, director,
member, partner, officer, attorney or counsel of such limited liability company,
limited partnership or any of its Affiliates (other than his or her service as
an Independent Manager or special member of the limited liability company or
limited partnership), (ii) a creditor, customer of, or supplier or other Person
who derives any of its purchases or revenues from its activities with such
limited liability company, limited partnership or any of its members, managers
or their Affiliates (other than his or her service as an Independent Manager if
such Person has been provided by a nationally-recognized company that provides
professional independent directors and/or as a corporate service provider if
such nationally recognized company also provides corporate services), (iii) a
Person Controlling or under common Control with or Controlled by any such
employee, manager, stockholder, director, member, partner, officer, attorney,
counsel, customer, supplier or other Person, or (iv) any member of the immediate
family (including grandchildren or siblings) of a person described in clauses
(i), (ii) or (iii) immediately above.
(114) “Intercreditor Agreement” has the meaning assigned to such term in
Section 12.28.
(115) “Interest Allocation” has the meaning assigned to such term in
Section 2.1(2)(a).
(116) “Interest Period” means, with respect to any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or Converted from a Base
Rate Loan or (in the event of a Continuation) the last day of the immediately
preceding Interest Period for such Loan and ending on the numerically
corresponding day fourteen (14) days thereafter or in the first, second, third
or sixth calendar month thereafter, as Borrower may select as provided in
Section 2.8(5); provided that (a) each Interest Period that commences on the
last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month;
(b) each Interest Period that would otherwise end on a day that is not a
Business Day shall end on the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar month, on the
immediately preceding Business Day); (c) except for an Interest Period having a
duration of fourteen (14) days, no Interest Period shall have a duration of less
than one month and, if the Interest Period for any Eurodollar Loan would
otherwise be a shorter period, such Loan shall bear interest at the Base Rate
plus the Applicable Margin for Base Rate Loans; (d) in no event shall any
Interest Period extend beyond the Maturity Date; and (e) there may be no more
than five (5) separate Interest Periods in respect of Eurodollar Loans
outstanding from each Lender at any one time.
(117) “Interest Reserve Fund” has the meaning assigned to such term in
Section 4.4(1).
(118) “Involuntary Proceeding” has the meaning assigned to such term in Section
10.9.
(119) “Joinder” means the Joinder attached hereto.

 

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(120) “Joinder Party” means the Persons executing the Joinder, including Galbut,
Menin, Frohlich and Morgans LLC.
(121) “Junior Loan Intercreditor Agreement” means that certain Subordination and
Standstill Agreement dated as of the date hereof, by and among Mortgage
Borrower, Borrower, Junior Mezzanine Borrower, Junior Mezzanine Lender, Mortgage
Lender and the Administrative Agent.
(122) “Junior Mezzanine Borrower” means 1100 West Holdings II, LLC, a Delaware
limited liability company.
(123) “Junior Mezzanine Lender” means RMF Capital LLC, a Delaware limited
liability company, and any assignee of RMF Capital LLC permitted under the
Junior Loan Intercreditor Agreement, each in its capacity as the lender under
the Junior Mezzanine Loan.
(124) “Junior Mezzanine Loan” means a loan to Junior Mezzanine Borrower in the
original principal amount of at least $22,500,000 (inclusive of the sum of
$16,500,000.00, which has been funded as of the date hereof), made pursuant to
that certain Mezzanine Loan Agreement dated as of the date hereof by and between
Junior Mezzanine Borrower, as borrower, and Junior Mezzanine Lender, as lender;
it being agreed that, at the election of the Junior Mezzanine Borrower and the
Junior Mezzanine Lender, the amount of the Junior Mezzanine Loan may be
increased from time to time as necessary to pay the costs of the Building
Conversion and to fund Debt Service and other payments due under the Loan
Documents and the Mortgage Loan Documents).
(125) “Lender” or “Lenders” have the meaning assigned in the Recitals.
(126) “Lender Parties” has the meaning assigned in Section 17.
(127) “LIBOR Rate” or “Libor Rate” means, for any Interest Period for any
Eurodollar Loan, the rate per annum appearing on Reuters Screen LIBOR01
(formerly operated as Page 3750 of the Dow Jones Market Service (Telerate)) (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by Administrative
Agent from time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at approximately
11:00 a.m. London time on the date two (2) Business Days prior to the first day
of such Interest Period as the rate for the offering of Dollar deposits having a
term comparable to such Interest Period, provided that if such rate does not
appear on such page, or if such page shall cease to be publicly available, or if
the information contained on such page, in the reasonable judgment of
Administrative Agent shall cease accurately to reflect the rate offered by
leading banks in the London interbank market as reported by any publicly
available source of similar market data selected by Administrative Agent, the
LIBOR Rate for such Interest Period shall be determined from such substitute
financial reporting service as Administrative Agent in its discretion shall
determine.

 

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(128) “Licenses” means any and all certifications, permits, licenses and
approvals, including without limitation, certificates of completion and
occupancy permits, required under Applicable Laws for the use, occupancy and
operation of the Project as hotel condominium in the manner contemplated
following Construction Completion.
(129) “Lien” means any interest, or claim thereof, in the Project or Collateral
securing an obligation owed to, or a claim by, any Person other than the owner
of the Project or Collateral, whether such interest is based on common law,
statute or contract, including the lien or security interest arising from a deed
of trust, mortgage, assignment, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting the Project.
(130) “Liquidation Event” has the meaning assigned to such term in
Section 2.4(8).
(131) “Loan Documents” means, individually or collectively: (a) this Agreement
(including the Joinder hereto), (b) the Notes, (c) the Assignment of Forward
Purchase Contract, (d) the Hazardous Substance Indemnity Agreement, (e) the
Minimum Equity Guarantee, (f) the Hotel Manager’s Consent, (g) the Project
Manager’s Consent, (h) the Completion Guarantee, (i) the Hedge Agreement Pledge,
(j) such assignments of management agreements, contracts and other rights as may
be required or requested by the Administrative Agent, (k) all other documents
evidencing, securing, governing or otherwise pertaining to the Loans, and
(l) all amendments, modifications, renewals, substitutions and replacements of
any of the foregoing.
(132) “Loan Transactions” has the meaning assigned to such term in
Section 2.8(4).
(133) “Loan Year” means the period between the date hereof and August 31, 2009,
for the first Loan Year and the period between each succeeding September 1 and
August 31, until the Maturity Date.
(134) “Loans” means the loans to be made by the Lenders to Borrower under this
Agreement and all other amounts evidenced or secured by the Loan Documents.
(135) “Majority Lenders” means Lenders holding at least 66.67% of the aggregate
outstanding principal amount of the Loans or, if the Loans shall not have been
made, at least 66.67% of the Commitments.
(136) “Major Modification” means any modification to a Purchase Contract which
(1) modifies in any manner the purchase price set forth therein; (2) reopens,
reinstates or in any manner lengthens any applicable rescission period;
(3) modifies the amount and/or timing of any deposit required thereunder;
(4) extends or otherwise changes in any material respect the closing date set
forth therein; (5) releases or otherwise consents to an assignment or transfer
of the obligations of the named purchaser thereunder; (6) increases or modifies
the Standard Unit Finish (unless the purchaser agrees in writing to pay the
costs of such increases or modifications); or (7) otherwise materially modifies
the terms of such Purchase Contract.

 

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(137) “Mandatory Net Operating Cash Flow Installments” has the meaning assigned
to such term in Section 2.4(4).
(138) “Material Adverse Effect” means a material adverse effect, as unilaterally
determined by the Administrative Agent, in its reasonable judgment and
discretion, on (a) the Project or the business, operations, financial condition,
prospects, liabilities or capitalization of Borrower, (b) the ability of
Borrower, to perform its obligations under any of the Loan Documents to which it
is a party, including the timely payment of the principal of or interest on the
Loans or other amounts payable in connection therewith, (c) the ability of any
other Borrower Party to perform its obligations under any of the Loan Documents
to which it is a party, (d) the validity or enforceability of any of the Loan
Documents, or (e) the rights and remedies of the Administrative Agent and the
Lenders under any of the Loan Documents.
(139) “Maturity Date” means the earlier of (a) the Original Maturity Date, as
such date may extended by the First Extension Period, the Second Extension
Period, the Third Extension Period, the Fourth Extension Period, and the Fifth
Extension Period, as applicable, and (b) any earlier date on which all of the
Loans are required to be paid in full, by acceleration or otherwise, under this
Agreement or any of the other Loan Documents.
(140) “Menin” means Keith Menin, an individual.
(141) “Minimum Equity Guarantee” means that certain Minimum Equity Guarantee
executed by Galbut, Menin, Frohlich and Morgans LLC in favor of the
Administrative Agent (on behalf of the Lenders) as the same may be modified,
amended, and/or supplemented and in effect from time to time.
(142) “Minimum Sales Price” means the minimum sales price for the sale of a
Unit, as set forth on the Minimum Sales Price Schedule.
(143) “Minimum Sales Price Schedule” means Schedule 1(b) attached hereto and
made a party hereof.
(144) “Model Purchase Contract” means the form of purchase contract for the sale
of Units which shall be received and approved by the Administrative Agent, which
approval shall not be unreasonably withheld.
(145) “Mold” has the meaning assigned to such term in Section 5.1(6).
(146) “MMI” means Mondrian Miami Investment LLC, a Delaware limited liability
company.
(147) “Morgans LLC” means Morgans Group LLC, a Delaware limited liability
company.

 

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(148) “Morgans Public” means the Morgans Hotel Group Co., a Delaware
corporation.
(149) “Mortgage” means that certain that certain Mortgage, Security Agreement,
Fixture Filing and Assignment of Leases and Rents dated as of August 8, 2006,
recorded August 8, 2006, in Official Records Book 24801, at Page 3306, of the
Public Records of Miami-Dade County, Florida, as modified by that certain First
Amendment to Mortgage, Security Agreement, Fixture Filing and Assignment of
Leases and Rents, dated as of December 19, 2006, recorded December 20, 2006, in
Official Records Book 25210, at Page 3790, of the Public Records of Miami-Dade
County, Florida, as further modified by that certain Second Amendment to
Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents
dated as of September 6, 2007, recorded September 21, 2007, in Official Records
Book 25944, at Pages 2682-2691, of the Public Records of Miami-Dade County,
Florida, as further modified by that certain Third Amendment to Mortgage,
Security Agreement, Fixture Filing and Assignment of Leases and Rents dated as
of April 25, 2008, recorded April 28, 2008, in Official Records Book 26347, at
Pages 3527-3536, of the Public Records of Miami-Dade County, Florida, and as
further modified by that certain Fourth Amendment to Mortgage, Security
Agreement, Fixture Filing and Assignment of Leases and Rents dated as of the
Amendment Closing Date, to be recorded in the Public Records of Miami-Dade
County, Florida on or about the date hereof.
(150) “Mortgage Borrower” shall mean 1100 West Properties, LLC, a Delaware
limited liability company.
(151) “Mortgage Debt Service” shall mean, with respect to any particular period
of time, aggregate interest, fixed principal and other payments due under the
Mortgage Note for such period.
(152) “Mortgage Lender” shall mean Eurohypo AG, New York Branch and each lender
that is a “Lender” pursuant to the terms of the Mortgage Loan Agreement.
(153) “Mortgage Loan” has the meaning assigned to such term in the Recitals.
(154) “Mortgage Loan Administrative Agent” shall have the meaning assigned to
“Administrative Agent” in the Mortgage Loan Agreement.
(155) “Mortgage Loan Agreement” has the meaning assigned to such term in the
Recitals.
(156) “Mortgage Loan Documents” shall mean all documents or instruments
evidencing, securing or guaranteeing the Mortgage Loan, including without
limitation, the Mortgage Loan Agreement.
(157) “Mortgage Loan Event of Default” shall have the meaning ascribed to the
term “Event of Default” in the Mortgage Loan Agreement.
(158) “Mortgage Note” shall mean, collectively, Amended and Restated Substitute
Promissory Note A-1, Amended and Restated Substitute Promissory Note A-2 and
Amended and Restated Substitute Promissory Note B, each dated as of the date
hereof, as the same may be consolidated, replaced, severed, modified, amended or
extended from time to time.

 

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(159) “Net Liquidation Proceeds After Debt Service” shall mean, with respect to
any Liquidation Event, all amounts paid to or received by or on behalf of
Mortgage Borrower in connection with such Liquidation Event, including, without
limitation, proceeds of any sale, refinancing or other disposition or
liquidation, less (i) in the event of a Liquidation Event consisting of a
Casualty or Condemnation, Administrative Agent’s, Lenders’ and/or Mortgage
Lender’s reasonable costs incurred in connection with the recovery thereof,
(ii) in the event of a Liquidation Event consisting of a Casualty or
Condemnation, the costs incurred by Mortgage Borrower in connection with a
restoration of all or any portion of the Project made in accordance with the
Mortgage Loan Documents, (iii) in the event of a Liquidation Event consisting of
a Casualty or Condemnation or a transfer, amounts required or permitted to be
deducted therefrom and amounts paid pursuant to the Mortgage Loan Documents to
Mortgage Lender, (iv) in the event of a Liquidation Event consisting of a
Casualty or Condemnation, those proceeds paid to Mortgage Borrower pursuant to
Section 7.3 of the Mortgage, (v) in the case of a foreclosure sale, disposition
or transfer of the Project in connection with realization thereon following a
Mortgage Loan Event of Default, such reasonable and customary costs and expenses
of sale or other disposition (including attorneys’ fees and brokerage
commissions), (vi) in the case of a foreclosure sale, such costs and expenses
incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender
shall be entitled to receive reimbursement for under the terms of the Mortgage
Loan Documents and (vii) in the case of a refinancing of the Mortgage Loan, such
costs and expenses (including attorneys’ fees) of such refinancing, and
(vii) the amount of any prepayments required pursuant to the Mortgage Loan
Documents in connection with any such Liquidation Event.
(160) “Net Operating Cash Flow” has the meaning assigned to such term in the
Cash Management Agreement.
(161) “Net Operating Income” means the amount by which Adjusted Operating
Revenues exceed Adjusted Operating Expenses.
(162) “Net Sales Proceeds” means the Purchase Price of each Unit (and any
Parking Space sold separately from a Unit, which Parking Space may only be sold
with the prior written consent of Administrative Agent) less:
(a) any sales or any brokerage commissions or fees (including fees to Borrower
or any Borrower Party) actually incurred in connection with the sale of such
Unit and documented to the reasonable satisfaction of the Administrative Agent;
(b) closing costs and prorations actually incurred in connection with the sale
of such Unit and documented to the reasonable satisfaction of the Administrative
Agent (which closing costs and prorations shall include such items as title
insurance costs, real estate transfer taxes, documentary stamp taxes, intangible
taxes, attorneys’ fees, property taxes and homeowner’s association fees);

 

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(c) with respect to any Unit, the cost of any “above standard” improvements or
upgrades to such Unit which are actually incurred and paid by Borrower, other
than the costs of “above standard” improvements or upgrades to such Unit for
which Borrower receives reimbursement separate from the Purchase Price,
including reimbursement from the purchaser of such Unit or from sources other
than the Loan or the Construction Completion Fund (as defined in the Mortgage
Loan Agreement) (but only to the extent that the foregoing costs were paid for
with disbursements of the proceeds of the Mortgage Loan or the Loans prior to
the Amendment Closing Date);
(d) with respect to any Unit which is sold at a Purchase Price equal to or
greater than the Minimum Sales Price for such Unit, an allowance by Unit type
for the Standard Unit Finish, which allowance shall be previously approved by
Administrative Agent, not to exceed, on average, $38,000 (but only to the extent
that the foregoing allowances were paid for with disbursements of the proceeds
of the Mortgage Loan or the Loans prior to the Amendment Closing Date); and
(e) the amount of the Franchise Fee payable with respect to the sale of such
Unit and any accrued and unpaid Franchise Fee payable in connection with the
sale of any previously sold Unit.
In no event shall the amounts in clauses (a), (b) and (c) above be deducted from
the Purchase Price unless Borrower or Mortgage Borrower provides evidence
satisfactory to the Administrative Agent of Borrower’s or Mortgage Borrower’s
payment of such amounts at the time of each closing of the Unit together with
any Parking Space sold in connection with such Unit. In no event, unless
approved by the Administrative Agent as provided in Section 9.7(2), shall
(1) any fees or commissions be paid to Borrower or Mortgage Borrower or any
Affiliate of Borrower or Mortgage Borrower from the gross sales proceeds be in
excess of fees and commissions in the amount customarily charged in connection
with hotel condominium unit sales in the City of Miami Beach, Miami-Dade County,
Florida area, or (2) any commissions, brokerage fees and/or closing costs exceed
what is reasonable and customary in the industry.
Notwithstanding any provision of this Agreement to the contrary, for all Units
in the Project, the maximum total per Unit, together with any Parking Space sold
in connection with such Unit, of the amounts in (a), (b) and (e) above
(collectively, the “Controlled Closing Costs”) shall be nine and one-quarter
percent (9.25%) of the Purchase Price of such Unit and any Parking Space sold in
connection with such Unit (the “Related Parking Space”); provided, however, that
the Controlled Closing Costs for any such Unit and Related Parking Space may
exceed nine and one-quarter percent (9.25%) of the Purchase Price of such Unit
and Related Parking Space, so long as (i) the average of Controlled Closing
Costs for such Unit and Related Parking Space and all other such Units and
Related Parking Spaces previously sold and closed does not exceed nine and
one-quarter percent (9.25%) of the Purchase Prices of such Units and Related
Parking Spaces, and (ii) upon the sale of all remaining Units having a Purchase
Price equal to or greater than the respective Minimum Sales Prices, the average
of Controlled Closing Costs for all such Units and Related Parking Spaces will
not exceed nine and one-quarter percent (9.25%) of the Purchase Prices of all
such Units and Related Parking Spaces. Controlled Closing Costs shall not
include Special Credits or other “special” or “promotional” credits or
concessions granted to the purchaser of such Unit, so long as the sum of all
Special Credits and such other “special” or “promotional” credits and
concessions do not, in the aggregate, exceed the amount by which the Purchase
Price for such Unit exceeds the Minimum Sales Price therefor.

 

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No corporate overhead or developer’s fees may be paid or advanced from sales
proceeds of Units.
(163) “Note” means that certain Promissory Note dated as of the Original Closing
Date as provided for in Section 2.1(6) and all promissory notes delivered in
substitution or exchange therefore, in each case as the same may be
consolidated, replaced, severed, modified, amended or extended from time to
time.
(164) “OFAC” means the Office of Foreign Assets Control, United States
Department of the Treasury, or any other office, agency or department that
succeeds to the duties of OFAC.
(165) “Operating Expenses” means, with respect to any period, all reasonable and
necessary expenses of operating the Project in the ordinary course of business
which are paid in cash by Mortgage Borrower or Borrower and which are directly
associated with and fairly allocable to the Project for the such period,
including ad valorem real estate taxes and assessments (to the extent not paid
from the Tax and Insurance Reserve Fund), insurance premiums, maintenance costs
(including common area maintenance costs), accounting, legal and other
professional fees, fees relating to environmental audits, expenses incurred by
the Administrative Agent and reimbursed by Borrower or Mortgage Borrower under
this Agreement, the other Loan Documents or the Mortgage Loan Documents,
deposits to any capital replacement reserves required by the Administrative
Agent, wages, salaries and personnel expenses, fees and expenses incurred or
paid by Mortgage Borrower under the Project Management Agreement, fees and
expenses incurred or paid by Mortgage Borrower under the Technical Services
Agreement, fees and expenses incurred or paid by Mortgage Borrower under the
Hotel Management Agreement and deposits to any reserves required under the Hotel
Management Agreement, but excluding Debt Service, capital expenditures, any of
the foregoing expenses which are paid from deposits to cash reserves previously
included as Operating Expenses, any payment or expense for which Borrower or
Mortgage Borrower was or is to be reimbursed from proceeds of the Loans or
Mortgage Loans or insurance or by any third party, and any non-cash charges such
as depreciation and amortization. Any other expense payable to any Borrower
Party or to any Affiliate of any Borrower Party shall be included as an
Operating Expense only with the Administrative Agent’s prior approval. Operating
Expenses shall not include federal, state or local income taxes or legal and
other professional fees unrelated to the operation of the Project and shall
exclude Building Conversion, sales and marketing expenses and other costs
attributable or incurred for the purpose of the Building Conversion and the sale
and marketing of Units for sale to third parties.
(166) “Operating Revenues” means, with respect to any period after the date
hereof, all cash receipts of Mortgage Borrower from operation of the Project or
otherwise arising in respect of the Project which are properly allocable to the
Project for the such period, including receipts from leases, parking agreements
and boat slip agreements, concession fees and charges and other miscellaneous
operating revenues, proceeds from rental or business interruption insurance,
proceeds of any loans (other than the Loans and any refinancing of the Loans)
obtained by Mortgage Borrower after the date hereof which are secured by any
interest in the Project or the Collateral (less only reasonable and customary
expenses incurred in procuring and closing such loan and actually paid in cash
to individuals or entities other than any Borrower Party or any Affiliate of any
Borrower Party and without implying any consent of the Administrative Agent or
any Lender to the granting of any security for any such loans), withdrawals or
disbursements from any cash reserves (except to the extent any operating
expenses paid therewith are excluded from Operating Expenses), but excluding
security deposits and earnest money deposits, advance rentals until they are
earned, proceeds from a sale or other disposition of all or any portion of the
Project (including any proceeds from the sale of Units), insurance proceeds
(other than from business interruption insurance), condemnation awards, and Net
Sales Proceeds.

 

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(167) “Organizational Documents” means, with respect to any Person who is not a
natural person, the certificate or articles of incorporation, memorandum of
association, articles of association, trust agreement, by-laws, partnership
agreement, limited partnership agreement, certificate of partnership or limited
partnership, limited liability company articles of organization, limited
liability company operating agreement or any other organizational document, and
all shareholder agreements, voting trusts and similar arrangements with respect
to its stock, partnership interests, membership interests or other equity
interests.
(168) “Original Closing Date” means April 25, 2008.
(169) “Original Maturity Date” means August 1, 2009.
(170) “Parking Space” or “Parking Spaces” means any one or more of the parking
spaces located on the Project.
(171) “Partial Release Conditions” has the meaning assigned to such term in the
Mortgage Loan Agreement.
(172) “Participant” has the meaning assigned to such term in Section 12.24(3).
(173) “Parking Space Release Price” means with respect to Parking Spaces which
are sold separately from a Unit, the greater of (a) ninety-five percent (95%) of
the gross proceeds from the sale of such Parking Space, and (b) one hundred
percent (100%) of the Net Sales Proceeds from the sale of such Parking Space
(provided, however, that Net Sales Proceeds from the sale of such Parking Space
shall be determined without any deduction for items described in clauses (c) and
(d) of the definition of Net Sales Proceeds.
(174) “Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
Act of 2001, as the same may be amended from time to time, and corresponding
provisions of future laws.
(175) “Patriot Act Offense” means any violation of the criminal laws of the
United States of America or of any of the several states, or that would be a
criminal violation if committed within the jurisdiction of the United States of
America or any of the several states, relating to terrorism or the laundering of
monetary instruments, including any offense under (a) the criminal laws against
terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy
Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or
(e) the Patriot Act. “Patriot Act Offense” also includes the crimes of
conspiracy to commit, or aiding and abetting another to comment, a Patriot Act
Offense.

 

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(176) “Payment Date” means the first Business Day of each calendar month.
(177) “Payor” has the meaning assigned to such term in Section 2.8(6).
(178) “Permitted Encumbrances” has the meaning set forth in the Mortgage Loan
Documents.
(179) “Person” means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability
company, unincorporated organization, real estate investment trust, government
or any agency or political subdivision thereof, or any other form of entity.
(180) “Plans and Specifications” means the plans and specifications for the
Building Conversion approved by the Administrative Agent as part of the overall
review and approval of the Project by the Administrative Agent on or about the
Original Closing Date.
(181) “Pledge Agreement” shall mean that certain Pledge and Security Agreement
dated as of the Original Closing Date, executed and delivered by Borrower to
Administrative Agent (for the benefit of Lenders) as security for the Loans,
which covers one hundred percent (100%) of the limited liability interests of
Borrower in Mortgage Borrower, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
(182) “Pledged Member Interests” shall mean all membership and manager interests
in Mortgage Borrower.
(183) “Post Occupancy Credit Escrow Fund” has the meaning assigned in the
Mortgage Loan Agreement.
(184) “Potential Default” means the occurrence of any event or condition which,
with the giving of notice, or the passage of time, or both, would constitute an
Event of Default.
(185) “Prime Rate” means the rate of interest from time to time announced by
Eurohypo at its principal office as its prime commercial lending rate, it being
understood that such prime commercial rate is a reference rate and does not
necessarily represent the lowest or best rate being charged by Eurohypo to any
customer.
(186) “Project” means “Mondrian South Beach,” a luxury hotel condominium
development containing 335 hotel condominium units and 177 parking spaces,
located in Miami Beach, Florida, including related amenities, a restaurant,
parking facilities, fixtures, and personal property owned by Mortgage Borrower
or Borrower, the Mortgage Borrower’s interest in the Boat Slips, and any
Improvements now or hereafter located on the real property described in
Exhibit A, excepting therefrom any and all Units validly released from the Lien
of the Mortgage pursuant to the terms of the Loan Documents and the Mortgage
Loan Documents.

 

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(187) “Project Budget” means the budget for the Building Conversion and all
other costs and expenses of the Project, including, furniture, fixtures and
equipment, interest expense, and also including the sources and uses of funds,
attached hereto as Schedule 8.4(2).
(188) “Project Manager” means Sanctuary Management or another project manager
acceptable to the Administrative Agent.
(189) “Project Manager’s Consent” means the Project Manager’s Consent and
Subordination Agreement delivered by the Project Manager and Borrower to the
Administrative Agent (on behalf of the Lenders) on the Original Closing Date, as
the same may be modified, amended and/or supplemented and in effect from time to
time.
(190) “Project Management Agreement” means that certain Project Management
Agreement dated as of August 7, 2006 between Mortgage Borrower and Project
Manager.
(191) “Public Offering Statement” means that certain “Prospectus for 1100 West,
a Condominium,” as amended, having Florida Department of Business and
Professional Regulation, Division of Land Sales, Condominiums and Mobile Homes
Identification No. PR74541, as the same has been approved pursuant to the
Condominium Act.
(192) “Purchase Contract” means a purchase and sale contract, including any
addenda thereto, between a third party purchaser and Mortgage Borrower or
Borrower with respect to the sale of a Unit (which contract may also provide for
the sale of one or more Parking Spaces or Boat Slips).
(193) “Purchase Price” means the gross sales price received from a Purchase
Contract.
(194) “Qualified Purchase Contract” means a Purchase Contract which (a) is in
the form of the Model Purchase Contract with all Major Modifications approved by
Administrative Agent; (b) is between Mortgage Borrower and a purchaser that is
not an Affiliate of Borrower or Mortgage Borrower; (c) has been fully executed
and delivered by all of the parties thereto and constitutes a legally
enforceable, unconditional contract which contains no contingencies (other than
a financing contingency) or other unexpired rescission or termination provision
or period; (d) is in compliance with the Condominium Act and all applicable
rules and regulations; (e) is not subject to rescission or avoidance by the
purchaser thereunder as a result of Mortgage Borrower’s failure to comply with
the disclosure requirements of the Condominium Act; (e) is not the subject of a
default by Mortgage Borrower or the purchaser; (f) except for such amounts which
may be refundable pursuant to a contingency or failure of condition, is the
subject of a paid non-refundable deposit of at least three percent (3%) of the
Purchase Price (provided, however, with respect to all cash deals, such deposit
must be at least 5% and for deals which will be 100% financed, such deposit must
be at least $2,500) and such sum is held in compliance with the requirements of
the Mortgage Loan Agreement; (g) without limiting the provisions of
Section 9.15, specifies a Purchase Price equal to or greater than the applicable
Minimum Sales Price; and (h) if it is to be financed by a third party lending
institution, then the purchaser thereunder has received “pre-approval” for a
mortgage by an FNMA-approved lender. Such “pre-approval” means that such lender
has reviewed and approved purchaser’s credit, income, and funds to close and
final approval is contingent only upon (i) lender obtaining an appraisal,
(ii) the purchaser providing documentation to evidence representations made to
lender, and (iii) other typical and customary closing requirements of such FNMA
approved lender.

 

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(195) “Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System of the United States of America (or any successor), as the same
may be modified and supplemented and in effect from time to time.
(196) “Regulatory Change” means, with respect to any Lender, any change after
the date hereof in Federal, state or foreign law or regulations (including,
without limitation, Regulation D) or the adoption or making after such date of
any interpretation, directive or request applying to a class of banks including
such Lender of or under any Federal, state or foreign law or regulations
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
(197) “Related Entity” means, as to any Person, (a) any Affiliate of such
Person; (b) any other Person into which, or with which, such Person is merged,
consolidated or reorganized, or which is otherwise a successor to such Person by
operation of law, or which acquires all or substantially all of the assets of
such Person; (c) any other Person which is a successor to the business
operations of such Person and engages in substantially the same activities; or
(d) any Affiliate of the Persons described in clauses (b) and (c) of this
definition.
(198) “Requesting Lender” has the meaning assigned to such term in
Section 2.9(7).
(199) “Required Payment” has the meaning assigned to such term in
Section 2.8(6).
(200) “Reserve Account Collateral” has the meaning assigned to such term in
Section 4.5(1).
(201) “Reserve Requirement” means, for any Interest Period for any Eurodollar
Loan, the average maximum rate at which reserves (including, without limitation,
any marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000 against
“Eurocurrency liabilities” (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall include any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change with respect to (a) any category of liabilities that includes
deposits by reference to which the LIBOR Rate for any Interest Period for any
Eurodollar Loans is to be determined as provided in the definition of “LIBOR
Rate” or (b) any category of extensions of credit or other assets that includes
Eurodollar Loans. The calculation of the Reserve Requirement by Lenders shall be
substantially similar to the calculation of the Reserve Requirement performed by
Lenders with respect to similar classes of commercial loans or commitments made
by such Lenders.

 

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(202) “Restaurant Lease” means that certain Lease dated as of August 12, 2008
between Mortgage Borrower, as landlord, and MC South Beach LLC, as tenant.
(203) “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc.
(204) “Sanctuary Avenue” means Sanctuary West Avenue, LLC, a Delaware limited
liability company.
(205) “Sanctuary Holdings” means Sanctuary West Holdings, LLC, a Delaware
limited liability company.
(206) “Sanctuary Management” mean Sanctuary West Management LLC, a Delaware
limited liability company.
(207) “Scheduled Release Price” means, with respect to the applicable Unit, the
release price with respect thereto as set forth on the Unit Release Schedule.
(208) “Second Extension Notice” has the meaning assigned to such term in Section
2.5(2)(a).
(209) “Second Extension Period” has the meaning assigned to such term in Section
2.5(2).
(210) “Secured Indebtedness” means:
(a) all Debt of Borrower under the Loan Documents;
(b) any and all future advances made pursuant to the Loan Documents by the
Lenders to or for the benefit of Borrower direct or indirect, together with
interest, fees, costs, and other amounts hereafter arising;
(c) the full and prompt payment and performance of any and all other Debt,
obligations and covenants of Borrower to Administrative Agent and the Lenders
including, but not limited to, the obligation to pay all amounts under the terms
of any other agreements, assignments or other instruments now or hereafter
evidencing, securing or otherwise relating to the indebtedness evidenced by the
Loan Documents, including, without limitation, any assignment of rents and
leases given by Borrower to Administrative Agent (on behalf of the Lenders); and
(d) any and all additional advances made by Administrative Agent or the Lenders
to protect or preserve the Collateral or the Project or the Liens created by the
Loan Documents on the Collateral, or to pay taxes, to pay premiums on insurance
on the Collateral or the Project or to repair or maintain the Collateral or the
Project (whether or not Borrower or Mortgage Borrower remains the owner of the
Collateral or the Secured Property at the time of such advances and whether or
not the original Administrative Agent or the Lenders remains the owner of the
Secured Indebtedness.

 

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(211) “Single Purpose Entity” means a corporation, limited partnership or
limited liability company which at all times on and after the date hereof while
the obligations hereunder and under the other Loan Documents remain outstanding,
unless otherwise approved in writing by the Administrative 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 Pledged Member Interests, entering into this
Agreement, refinancing the Pledged Member Interests in connection with a
permitted repayment of the Loans, and transacting any and all lawful business
that is incident, necessary and appropriate to accomplish the foregoing,
(ii) acquiring, developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the Project, entering into the Mortgage Loan
Agreement, refinancing the Project in connection with a permitted repayment of
the Loans, and transacting any and all lawful business that is incident,
necessary and appropriate to accomplish the foregoing or (ii) acting as a
managing member of Borrower or the sole managing member of Mortgage Borrower;
(b) is not engaged and will not engage in any business unrelated to (i) the
acquisition, development, ownership, management or operation of the Pledged
Member Interests or Project or (ii) acting as a managing member of Borrower or
the sole managing member of Mortgage Borrower
(c) does not have and will not have any assets other than those related to
(i) the Project, (ii) the Pledged Member Interests, or (iii) 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 (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;
(e) shall not, without the consent of all of its managers and members:
(a) dissolve, merge, liquidate or consolidate; (b) sell all or substantially all
of its assets or the assets of any other entity in which it has a direct or
indirect legal or beneficial ownership interest; (c) engage in any other
business activity, other than as permitted pursuant to the Loan Documents, or
amend its organizational documents with respect to the matters set forth in this
definition without the consent of the Administrative Agent; or (d) file a
bankruptcy or insolvency petition or otherwise institute insolvency proceedings
with respect to itself or to any other entity in which it has a direct or
indirect legal or beneficial ownership interest or is the direct or indirect
general partner, manager or managing member;

 

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(f) in the case of Borrower, has at least one (1) Independent Manager, and in
the case of Mortgage Borrower, has only one member which is Borrower;
(g) is and will remain solvent and pay its debts and liability (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;
(h) has not failed and will not fail to correct any known misunderstanding
regarding the separate identity of such entity;
(i) 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;
(j) has not commingled and will not commingle its funds or assets with those of
any other Person;
(k) has held and will hold its assets in its own name;
(l) 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;
(m) 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;
(n) has observed and will observe all corporate, partnership or limited
liability company formalities, as applicable;
(o) has not incurred and will not incur any Debt other than (i) in the case of
Mortgage Borrower, (A) the Mortgage Loan and (B) trade and operational debt
which is (1) incurred in the ordinary course of business, (2) not more than
ninety (90) days past the date of invoice, (3) with trade creditors, (4) in the
aggregate, in an amount less than $500,000.00, (5) not evidenced by a note, and
(6) paid when due, and (ii) in the case of Borrower, the Loans;
(p) 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;
(q) has not and will not acquire obligations or securities of its members or
shareholders or any other affiliate (other than interests in the Borrower held
by MMI and Sanctuary Avenue);

 

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(r) 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;
(s) 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;
(t) except in connection with the Loans, has not pledged and will not pledge its
assets for the benefit of any other Person;
(u) 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;
(v) 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;
(w) 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);
(x) has not identified and will not identify its partners, members or
shareholders, or any affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a division of any
other Person;
(y) except as expressly permitted in the Loan Documents, 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 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;
(z) 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 Secured Indebtedness and will not constitute a claim
against it in the event that, prior to the payment of the Secured Indebtedness,
cash flow is insufficient to pay such obligation;
(aa) if such entity is a corporation, it is required to consider the interests
of its creditors in connection with all corporate actions; and
(bb) except as expressly permitted in the Loan Documents, does not and will not
have any of its obligations guaranteed by any Affiliate.

 

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(212) “Site Assessment” means an environmental engineering report for the
Project prepared by an engineer engaged by the Administrative Agent at Mortgage
Borrower’s or Borrower’s expense, and in a manner satisfactory to the
Administrative Agent, based upon an investigation relating to and making
appropriate inquiries concerning the existence of Hazardous Materials on or
about the Project, and the past or present discharge, disposal, release or
escape of any such substances, all consistent with good customary and commercial
practice.
(213) “Special Advance Lender” has the meaning assigned to such term in
Section 15.12(1).
(214) “Special Credits” means special credits for loan origination and closing
costs extended to the purchaser of a Unit in an amount which does not, in the
aggregate, exceed the amount by which the Purchase Price exceeds the Minimum
Sales Price for such Unit.
(215) “Standard Unit Finish” means those standard improvements established by
Mortgage Borrower (with the approval of Administrative Agent), which shall be
completed in any Unit prior to or after closing of the sale of such Unit.
(216) “State” means the State of Florida.
(217) “Survey” means that certain ALTA/ASCM Land Title Survey dated as of
June 19, 2006, revised July 28, 2006, prepared by J. Bonfill & Associates, Inc.,
under Project 04-0468, Job 06-0411.
(218) “Taxes” has the meaning assigned to such term in Section 9.2.
(219) “Technical Services Agreement” means that certain Technical Services
Agreement between Mortgage Borrower and Hotel Manager dated as of the Original
Closing Date with respect to the delivery of certain consultation and other
technical services relating to the Project.
(220) “Third Extension Notice” has the meaning assigned to such term in Section
2.5(3)(a).
(221) “Third Extension Period” has the meaning assigned to such term in Section
2.5(3).
(222) “Threshold Amount” means $1,000,000.00.
(223) “Type” has the meaning assigned in Section 1.2.
(224) “UCC Insurance Policy” shall mean an insurance policy issued by a title
company acceptable to Lender in the form acceptable to Lender issued with
respect to the Pledged Member Interests.

 

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(225) “Unavoidable Delay” means any delay due to strikes, acts of God, fire,
earthquake, floods, explosion, actions of the elements, other accidents or
casualty, declared or undeclared war, riots, mob violence, acts of terrorism,
inability to procure or a general shortage of labor, equipment, facilities,
energy, materials or supplies in the open market, failure of transportation,
lockouts, tenant delays, actions of labor unions, condemnation, court orders,
laws, rules, regulations or orders of Governmental Authorities, or other cause
beyond the reasonable control of Borrower; provided that, in each of the
foregoing cases, (a) Borrower gives notice of such delay to the Administrative
Agent within two (2) days of occurrence of the event resulting in such delay
and, after the initial notification, promptly after request of the
Administrative Agent, notifies the Administrative Agent of the status of such
delay, (b) after giving effect to the consequences of each such delay, the Loans
shall not be Out of Balance (as defined in the Mortgage Loan Agreement) at any
time despite such delay, (c) Borrower uses all commercially reasonable efforts
to mitigate the delay caused by such event of Unavoidable Delay; and (d) the
Administrative Agent acknowledges that such delay is due to one of the foregoing
causes, which acknowledgment shall not be unreasonably withheld or delayed. For
the purposes hereof, Unavoidable Delays shall not include delays caused by
Borrower’s lack of or inability to procure monies to fulfill Borrower’s
commitments and obligations under this Agreement or the other Loan Documents.
(226) “Unit or Units” means one or more of the 335 hotel condominium units
created at the Project in connection with the Building Conversion.
(227) “Unit Release Schedule” means the schedule attached hereto as
Schedule 1(c), containing the Scheduled Release Price for each Unit.
(228) “Unpaid Amount” has the meaning assigned to such term in Section 15.12(2).
(229) “Unsold Units” means the Units which have not been conveyed to third
parties by Mortgage Borrower with corresponding release from the Lien of the
Mortgage.
(230) “Voluntary Proceeding” has the meaning assigned to such term in Section
10.10.
Section 1.2 Types of Loans. Loans hereunder are distinguished by “Type”. The
“Type” of a Loan refers to whether such Loan is a Base Rate Loan or a Eurodollar
Loan, each of which constitutes a Type.
ARTICLE 2
LOAN TERMS
Section 2.1 The Commitments, Loans and Notes.
(1) Loans. Each Lender severally agrees, on the terms and conditions of this
Agreement, to make a term loan to Borrower in Dollars in a principal amount up
to but not exceeding the amount of the Commitment of such Lender. As of the date
hereof, the outstanding principal balance of the Loans is $28,000,000.

 

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(2) Advances. The Loans shall be funded in one or more advances and repaid in
accordance with this Agreement. Amounts borrowed hereunder and repaid may not be
reborrowed.
(a) Provided an Event of Default shall not exist at such time and subject to
satisfaction of the conditions set forth on Part A of Schedule 2.1, Lenders
shall make Loans from time to time in an aggregate amount of up to $1,953,629.58
(the “Interest Allocation”) for the purposes of paying accrued interest on the
Loans and the Mortgage Loan. Provided no Potential Default or Event of Default
shall exist at such time and subject to satisfaction of the conditions set forth
on Part A of Schedule 2.1, Lenders shall automatically make Loans for the
payment of accrued interest, as aforesaid, and shall make the interest payments
relating thereto directly to the Mortgage Lenders and the Administrative Agent,
as the case may be, on the respective Payment Dates relating to the Mortgage
Loan and the Loans, as the case may be.
(b) All Loans shall be shall be deemed a capital contribution by Borrower to
Mortgage Borrower.
(3) Lending Offices. The Loans of each Lender shall be made and maintained at
such Lender’s Applicable Lending Office for Loans of such Type.
(4) Several Obligations. The failure of any Lender to make any Loan to be made
by it on the date specified therefor shall not relieve any other Lender of its
obligation to make its Loan, but neither any Lender nor the Administrative Agent
shall be responsible for the failure of any other Lender to make a Loan to be
made by such other Lender.
(5) Notes.
(a) Loan Notes. The Loans made by each Lender shall be evidenced by the Note,
made payable to such Lender in a principal amount equal to the aggregate amount
of its advanced Commitment as originally in effect and otherwise duly completed.
(b) Endorsements on Notes. The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan made by each Lender to Borrower,
and each payment made on account of the principal thereof, shall be recorded by
such Lender on its books and, prior to any transfer of the Note held by it,
endorsed by such Lender on the schedule attached to such Note or any
continuation thereof; provided that the failure of such Lender to make any such
recordation or endorsement shall not affect the obligations of Borrower to make
a payment when due of any amount owing hereunder or under such Note in respect
of such Loans.
(c) Substitution, Exchange and Subdivision of Notes. No Lender shall be entitled
to have its Notes substituted or exchanged for any reason, or subdivided for
promissory notes of lesser denominations, except in connection with a permitted
assignment of all or any portion of such Lender’s Commitment, Loans and Note
pursuant to Sections 12.10 and 12.24 (and, if requested by any Lender, Borrower
agrees in accordance with and subject to Sections 12.10 and 12.24, to so
substitute or exchange any Notes and enter into note splitter agreements in
connection therewith).

 

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(d) Loss, Theft, Destruction or Mutilation of Notes. In the event of the loss,
theft or destruction of any Note, upon Borrower’s receipt of a reasonably
satisfactory indemnification agreement executed in favor of Borrower by the
holder of such Note, or in the event of the mutilation of any Note, upon the
surrender of such mutilated Note by the holder thereof to Borrower, together
with such other reasonable assurances as Borrower may require, Borrower shall
execute and deliver to such holder a new replacement Note, in the form of the
original Note, in lieu of the lost, stolen, destroyed or mutilated Note.
(e) Funding of Loans. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will promptly make such Loans available to Borrower by
wire transfer of immediately available funds to an account in the United States
designated by Borrower.
Section 2.2 Conversions or Continuations of Loans.
(1) Subject to Sections 2.8(4), 2.9(2) and 2.9(3), Borrower shall have the right
to Convert Loans of one Type into Loans of another Type or Continue Loans of one
Type as Loans of the same Type, at any time or from time to time; provided that:
(a) Borrower shall give the Administrative Agent notice of each such Conversion
or Continuation as provided in Section 2.8(5); (b) Eurodollar Loans may be
Converted only on the last day of an Interest Period for such Loans unless
Borrower complies with the terms of Section 2.9(5); and (c) subject to
Sections 2.9(1) and 2.9(3), any Conversion or Continuation of Loans shall be pro
rata among the Lenders. Notwithstanding the foregoing, and without limiting the
rights and remedies of the Administrative Agent and the Lenders under
Article 11, in the event that any Event of Default exists, the Administrative
Agent may (and at the request of the Majority Lenders shall) suspend the right
of Borrower to Convert any Loan into a Eurodollar Loan, or to Continue any Loan
as a Eurodollar Loan, for so long as such Event of Default exists, in which
event all Loans shall be Converted (on the last day(s) of the respective
Interest Periods therefor) or Continued, as the case may be, as Base Rate Loans.
In connection with any such Conversion, a Lender may (at its sole discretion)
transfer a Loan from one Applicable Lending Office to another.
(2) Notwithstanding anything to the contrary contained in this Agreement, at any
time that a Hedge Agreement is in effect, Borrower shall not modify the Interest
Period with respect to the principal amount equal to the notional amount under
such Hedge Agreement.
Section 2.3 Interest Rate; Late Charge.
(1) Borrower promises to pay to the Administrative Agent for account of each
Lender interest on the unpaid principal amount of each Loan (which may be the
Base Rate Loans and/or Eurodollar Loans) made by such Lender for the period from
and including the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the Base Rate plus the
Applicable Margin; and
(b) during such periods as such Loan is a Eurodollar Loan, for each Interest
Period relating thereto, the Adjusted LIBOR Rate for such Loan for such Interest
Period plus the Applicable Margin.

 

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(2) Accrued interest on each Loan shall be payable (i) monthly in arrears on
each Payment Date and (ii) in the case of any Loan, upon the payment or
prepayment thereof or the Conversion of such Loan to a Loan of another Type (but
only on the principal amount so paid, prepaid or Converted), except that
interest payable at the Default Rate shall be payable from time to time on
demand.
(3) Notwithstanding anything to the contrary contained herein, after the
Maturity Date and during any period when an Event of Default exists, Borrower
shall pay to the Administrative Agent for the account of each Lender interest at
the applicable Default Rate on the outstanding principal amount of any Loan made
by such Lender, any interest payments thereon not paid when due and on any other
amount payable by Borrower hereunder, under the Notes and any other Loan
Documents.
(4) Promptly after the determination of any interest rate provided for herein or
any change therein, the Administrative Agent shall give notice thereof to the
Lenders to which such interest is payable and to Borrower, but the failure of
the Administrative Agent to provide such notice shall not affect Borrower’s
obligation for the payment of interest on the Loans.
(5) In addition to any sums due under this Section 2.3, Borrower shall pay to
the Administrative Agent for the account of the Lenders a late payment premium
in the amount of five percent (5%) of (i) any payments of principal under the
Loans made and payable after the due date thereof (other than the repayment of
the outstanding principal balance on the Maturity Date), and (ii) any payments
of interest or other sums under the Loans made more than ten (10) days after the
due date thereof, which late payment premium shall be due with any such late
payment or upon demand by the Administrative Agent. Such late payment charge
represents the reasonable estimate of Borrower and the Lenders of a fair average
compensation for the loss that may be sustained by the Lenders due to the
failure of Borrower to make timely payments. Such late charge shall be paid
without prejudice to the right of the Administrative Agent and the Lenders to
collect any other amounts provided herein or in the other Loan Documents to be
paid or to exercise any other rights or remedies under the Loan Documents.
Section 2.4 Terms of Payment. Commencing on the Amendment Closing Date, the
Loans shall be payable as follows:
(1) Interest. Beginning on December 1, 2008, and on the Payment Date of each
month thereafter, Borrower shall pay interest in arrears in accordance with the
wire transfer instructions set forth on Schedule 2.4(1) attached hereto (or such
other instructions as the Administrative Agent may from time to time provide)
until all amounts due under the Loan Documents are paid in full.
(2) Maturity. On the Maturity Date, Borrower shall pay to the Administrative
Agent (on behalf of the Lenders) all outstanding principal, accrued and unpaid
interest, and any other amounts due under the Loan Documents.

 

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(3) Optional Prepayments. Subject to the provisions of Sections 2.4(5) and
2.9(5), Borrower shall have the right to prepay Loans in whole or in part,
without premium or penalty; provided that: (a) Borrower shall give the
Administrative Agent notice of each such prepayment as provided in
Section 2.8(5) (and, upon the date specified in any such notice of prepayment,
the amount to be prepaid shall become due and payable hereunder) and (b) partial
prepayments shall be in the minimum aggregate principal amounts specified in
Section 2.8(4). Loans that are prepaid cannot be reborrowed. After giving notice
of prepayment as provided in Section 2.8(5), but prior to the date specified in
any such notice of prepayment, such notice may be revoked by Borrower as long as
Borrower pays within one (1) Business Day after notification from the
Administrative Agent any amounts payable to a Lender pursuant to Section 2.9(5)
as a result of any action taken by such Lender in reliance of such notice of
prepayment. In addition, in the event the specified Loans subject to the
prepayment revocation are Eurodollar Loans, such Eurodollar Loans may, at the
Administrative Agent’s option, be converted to Base Rate Loans for the balance
of the then current Interest Period.
(4) Mandatory Prepayments. In the event that the Mortgage Loan is repaid in full
prior to the Maturity Date, commencing upon the first Payment Date following
such repayment and on each Payment Date thereafter, Borrower shall pay to Lender
one hundred percent (100%) of the Net Operating Cash Flow (“Mandatory Net
Operating Cash Flow Installments”) for the immediately preceding month. In
addition, Borrower shall also make mandatory prepayments of principal as are
required pursuant to Sections 14.4 and Section 14.5.
(5) Interest and Other Charges on Prepayment. If the Loans are prepaid, in whole
or in part, pursuant to Section 2.4(3) or 2.4(4), each such prepayment shall be
made on the prepayment date specified in the notice to the Administrative Agent
pursuant to Section 2.8(5), and (in every case) together with (a) the accrued
and unpaid interest on the principal amount prepaid, (b) the Exit Fee, (c) any
amounts payable to a Lender pursuant to Section 2.9(5) as a result of such
prepayment while an Adjusted LIBOR Rate is in effect, and (d) any early
termination amounts due under any Hedge Agreement; provided, however, that any
such prepayment shall be applied first, to the prepayment of any portions of the
outstanding principal amount that are Base Rate Loans and, second, to the
prepayment of any portions of the outstanding principal amount that are
Eurodollar Loans applying such sums first to Eurodollar Loans of the shortest
maturity so as to minimize breakage costs; provided further, however, that if an
Event of Default exists, the Administrative Agent may distribute such payment to
the Lenders for application in such manner as it or the Majority Lenders,
subject to Section 2.8(2), may determine to be appropriate.
(6) Application of Payments. All payments received by the Administrative Agent
under the Loan Documents shall be applied: first, to any fees and expenses due
to the Administrative Agent and the Lenders under the Loan Documents; second, to
any Default Rate interest or late charges; third, to accrued and unpaid interest
on the Loans; and fourth, to the principal sum in accordance with Section 2.4(5)
above and other amounts due under the Loan Documents; provided, however, that,
if an Event of Default exists the Administrative Agent may apply such payments
in any order or manner as the Administrative Agent shall determine.

 

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(7) Liquidation Events. (a) In the event of (i) any Casualty to all or any
portion of the Project, (ii) any Condemnation of all or any portion of the
Project, (iii) a transfer of the Project in connection with realization thereon
by the Mortgage Loan Administrative Agent (on behalf of Mortgage Lender)
following an Event of Default under the Mortgage Loan, including without
limitation a foreclosure sale, or (iv) any refinancing of the Project or the
Mortgage Loan (each, a “Liquidation Event”), Borrower shall cause the related
Net Liquidation Proceeds After Debt Service to be deposited directly into an
account designated by Administrative Agent. On each date on which Administrative
Agent actually receives a distribution of Net Liquidation Proceeds After Debt
Service, such Net Liquidation Proceeds After Debt Service shall be applied to
the outstanding principal balance of the Notes in an amount equal to one hundred
percent (100%) of such Net Liquidation Proceeds After Debt Service, together
with interest that would have accrued on such amount through the next Payment
Date and all other sums then due; provided, however, that so in the event
Administrative Agent receives a distribution of Net Liquidation Proceeds After
Debt Service on a date other than a Payment Date and so long as no Default or
Event of Default shall have occurred and be continuing, if Borrower so requests
in writing, such amounts shall be held by Administrative Agent as collateral
security for the Loans in an interest bearing account, with such interest
accruing to the benefit of Borrower, and shall be applied by Administrative
Agent on the next Payment Date. Borrower shall immediately notify Administrative
Agent of any Liquidation Event once Borrower has knowledge of such event.
Borrower shall be deemed to have knowledge of (i) a sale (other than a
foreclosure sale) of the Project on the date on which a contract of sale for
such sale is entered into, and a foreclosure sale, on the date notice of such
foreclosure sale is given, and (ii) a refinancing of the Project, on the date on
which a commitment for such refinancing is entered into. The provisions of this
Section 2.4(8) shall not be construed to contravene in any manner the
restrictions and other provisions regarding refinancing of the Mortgage Loan or
transfer of the Project set forth in this Agreement and the other Loan
Documents.
(8) Agency Fee. Until payment in full of all obligations under this Agreement
and the other Loan Documents, Borrower shall pay to Administrative Agent, for
its sole account, the Agency Fee in accordance with the Fee Letter.
(9) Security. The Loans shall be secured by the Pledge Agreement creating a
first Lien on the Collateral and the other Loan Documents.
Section 2.5 Extension of Maturity Date.
(1) First Extension of Maturity Date. Borrower may, at its option, extend the
term of the then outstanding principal amount for a period commencing on the
Original Maturity Date and ending on August 1, 2010; provided, however, if such
day is not a Business Day, such period shall be deemed to end the immediately
preceding Business Day (the applicable period being, the “First Extension
Period”), subject to the satisfaction of the following conditions:
(a) Borrower shall notify (the “First Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days
prior to the Original Maturity Date;
(b) No Potential Default (of which Borrower has previously received notice) or
Event of Default exists as of the giving of the First Extension Notice and/or as
of the Original Maturity Date;

 

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(c) Without limiting the provisions of Section 14.1(1), Construction Completion
shall have occurred;
(d) If the Hedge Agreement in effect at the time of Borrower’s giving of the
First Extension Notice is scheduled to mature or expire prior to the end of the
First Extension Period, Borrower shall have obtained and delivered to
Administrative Agent not later than ten (10) Business Days prior to the first
day of the First Extension Period one or more replacement Hedge Agreements which
meet the requirements of Section 9.15 which shall be effective on or before the
date the then effective Hedge Agreement is scheduled to mature or expire and
shall have a maturity date not earlier than the end of the First Extension
Period;
(e) Whether or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent and the
Lenders in connection with the proposed extension (pre- and post-closing),
including reasonable legal fees; all such costs and expenses shall be due and
payable within ten (10) days of demand, and any failure to pay such amounts
shall constitute a default under this Agreement and the Loan Documents;
(f) Not later than the Original Maturity Date, (i) the extension shall have been
documented to the Lenders’ reasonable satisfaction and consented to by Borrower,
Administrative Agent and all the Lenders, including the execution and delivery
by the Guarantor of reaffirmations of its obligations under the Guaranty and
(ii) if requested by the Administrative Agent, the Administrative Agent shall
have been provided with an updated title report and judgment and lien searches,
together with any title endorsements reasonably required by Administrative
Agent; and
(g) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in
accordance with Section 2.5(1) of the Mortgage Loan Agreement.
Any such extension shall be otherwise subject to all of the other terms and
provisions of this Agreement and the other Loan Documents.
(2) Second Extension of Maturity Date. In the event Borrower has previously
extended the Maturity Date in accordance with Section 2.5(1), Borrower may, at
its option, extend the term of the then outstanding principal amount of the
Loans for a period commencing on the last day of the First Extension Period and
ending on July 31, 2011; provided, however, if such day is not a Business Day,
such period shall be deemed to end the immediately preceding Business Day (the
applicable period being, the “Second Extension Period”), subject to the
satisfaction of the following conditions:
(a) Borrower shall notify (the “Second Extension Notice”) Administrative Agent
of Borrower’s exercise of such option between thirty (30) and ninety (90) days
prior to end of the First Extension Period;
(b) No Potential Default (of which Borrower has previously received notice) or
Event of Default exists as of the giving of the Second Extension Notice and/or
as of last day of the First Extension Period;

 

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(c) If the Hedge Agreement in effect at the time of Borrower’s giving of the
Second Extension Notice is scheduled to mature or expire prior to the end of the
Second Extension Period, Borrower shall have obtained and delivered to
Administrative Agent not later than ten (10) Business Days prior to the first
day of the Second Extension Period one or more replacement Hedge Agreements
which meet the requirements of Section 9.15 which shall be effective on or
before the date the then effective Hedge Agreement is scheduled to mature or
expire and shall have a maturity date not earlier than the end of the Second
Extension Period;
(d) Whether or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent and the
Lenders in connection with the proposed extension (pre- and post-closing),
including reasonable legal fees; all such costs and expenses shall be due and
payable within ten (10) days of demand, and any failure to pay such amounts
shall constitute a default under this Agreement and the Loan Documents;
(e) Not later than the last day of the First Extension Period, (i) the extension
shall have been documented to the Lenders’ reasonable satisfaction and consented
to by Borrower, Administrative Agent and all the Lenders, including the
execution and delivery by the Guarantor of reaffirmations of its obligations
under the Guaranty and (ii) if requested by the Administrative Agent, the
Administrative Agent shall have been provided with an updated title report and
judgment and lien searches, together with any title endorsements reasonably
required by Administrative Agent; and
(f) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in
accordance with Section 2.5(2) of the Mortgage Loan Agreement.
Any such extension shall be otherwise subject to all of the other terms and
provisions of this Agreement and the other Loan Documents.
(3) Third Extension of Maturity Date. Borrower may, at its option, extend the
term of the then outstanding principal amount for a period commencing on the
last day of the Second Extension Period and ending on July 30, 2012; provided,
however, if such day is not a Business Day, such period shall be deemed to end
the immediately preceding Business Day (the applicable period being, the “Third
Extension Period”), subject to the satisfaction of the following conditions:
(a) Borrower shall notify (the “Third Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days
prior to the end of the Second Extension Period;
(b) No Potential Default (of which Borrower has previously received notice) or
Event of Default exists as of the giving of the Third Extension Notice and/or as
of the last day of the Second Extension Period;

 

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(c) Administrative Agent shall have obtained a new Appraisal dated not more than
sixty (60) days prior to the last day of the Second Extension Period (which the
Administrative Agent hereby agrees to timely obtain), such Appraisal to be at
Borrower’s expense;
(d) The Debt Service Coverage Ratio based on the outstanding balance of the
Loans for the most recently ended calendar quarter prior to the end of the
Second Extension Period, shall be equal to or greater than 1.10:1.00; provided,
however, in the event that the required Debt Service Coverage Ratio is not met,
then Borrower may, in order to satisfy the condition in this clause, pay down
the outstanding principal balance of the Loans in an amount such that the
required Debt Service Coverage Ratio is achieved (in accordance with
Section 2.4(4));
(e) If the Hedge Agreement in effect at the time of Borrower’s giving of the
Third Extension Notice is scheduled to mature or expire prior to the end of the
Second Extension Period, Borrower shall have obtained and delivered to
Administrative Agent not later than ten (10) Business Days prior to the first
day of the Third Extension Period one or more replacement Hedge Agreements which
meet the requirements of Section 9.15 which shall be effective on or before the
date the then effective Hedge Agreement is scheduled to mature or expire and
shall have a maturity date not earlier than the end of the Third Extension
Period;
(f) Whether or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent and the
Lenders in connection with the proposed extension (pre- and post-closing),
including reasonable legal fees; all such costs and expenses shall be due and
payable within ten (10) days of demand, and any failure to pay such amounts
shall constitute a default under this Agreement and the Loan Documents;
(g) Not later than the last day of the Second Extension Period, (i) the
extension shall have been documented to the Lenders’ reasonable satisfaction and
consented to by Borrower, Administrative Agent and all the Lenders, including
the execution and delivery by the Guarantor of reaffirmations of its obligations
under the Guaranty and (ii) if requested by the Administrative Agent, the
Administrative Agent shall have been provided with an updated title report and
judgment and lien searches, together with any title endorsements reasonably
required by Administrative Agent;
(h) Borrower shall pay to Administrative Agent (for the benefit of the Lenders
in accordance with their proportionate shares) on the last day of the Second
Extension Period, a non-refundable extension fee equal to 0.25% of the
outstanding principal balance of the Loans; and
(i) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in
accordance with Section 2.5(3) of the Mortgage Loan Agreement.
Any such extension shall be otherwise subject to all of the other terms and
provisions of this Agreement and the other Loan Documents.

 

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(4) Fourth Extension of Maturity Date. Borrower may, at its option, extend the
term of the then outstanding principal amount for a period commencing on the
last day of the Third Extension Period and ending on July 29, 2013; provided,
however, if such day is not a Business Day, such period shall be deemed to end
the immediately preceding Business Day (the applicable period being, the “Fourth
Extension Period”), subject to the satisfaction of the following conditions:
(a) Borrower shall notify (the “Fourth Extension Notice”) Administrative Agent
of Borrower’s exercise of such option between thirty (30) and ninety (90) days
prior to the end of the Third Extension Period;
(b) No Potential Default (of which Borrower has previously received notice) or
Event of Default exists as of the giving of the Fourth Extension Notice and/or
as of the last day of the Third Extension Period;
(c) The Debt Service Coverage Ratio based on the outstanding balance of the
Loans for the most recently ended calendar quarter prior to en d of the Third
Extension Period, shall be equal to or greater than 1.35:1.00; provided,
however, in the event that the required Debt Service Coverage Ratio is not met,
then Borrower may, in order to satisfy the condition in this clause, pay down
the outstanding principal balance of the Loans in an amount such that the
required Debt Service Coverage Ratio is achieved (in accordance with
Section 2.4(4));
(d) The ratio of (i) the total outstanding principal balance of the Loans to
(ii) the value of the Project does not exceed eighty percent (80%) based on the
“as is” value established by a new Appraisal obtained by Administrative Agent
not more than sixty (60) days prior to end of the Third Extension Period, such
Appraisal to be at Borrower’s expense and satisfactory to Administrative Agent
in all respects; provided, however, in the event that the required loan-to-value
ratio is not met, then Borrower may, in order to satisfy the condition in this
clause, pay down the outstanding principal balance of the Loans in an amount
such that the required loan-to-value ratio is achieved (in accordance with
Section 2.4(4));
(e) If the Hedge Agreement in effect at the time of Borrower’s giving of the
Fourth Extension Notice is scheduled to mature or expire prior to the end of the
Third Extension Period, Borrower shall have obtained and delivered to
Administrative Agent not later than ten (10) Business Days prior to the first
day of the Fourth Extension Period one or more replacement Hedge Agreements
which meet the requirements of Section 9.15 which shall be effective on or
before the date the then effective Hedge Agreement is scheduled to mature or
expire and shall have a maturity date not earlier than the end of the Fourth
Extension Period;
(f) Whether or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent and the
Lenders in connection with the proposed extension (pre- and post-closing),
including reasonable legal fees; all such costs and expenses shall be due and
payable within ten (10) days of demand, and any failure to pay such amounts
shall constitute a default under this Agreement and the Loan Documents;

 

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(g) Not later than the last day of the Third Extension Period, (i) the extension
shall have been documented to the Lenders’ reasonable satisfaction and consented
to by Borrower, Administrative Agent and all the Lenders, including the
execution and delivery by the Guarantor of reaffirmations of its obligations
under the Guaranty and (ii) if requested by the Administrative Agent, the
Administrative Agent shall have been provided with an updated title report and
judgment and lien searches, together with any title endorsements reasonably
required by Administrative Agent;
(h) Borrower shall pay to Administrative Agent (for the benefit of the Lenders
in accordance with their proportionate shares) on the last day of the Third
Extension Period, a non-refundable extension fee equal to 0.25% of the
outstanding principal balance of the Loans; and
(i) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in
accordance with Section 2.5(4) of the Mortgage Loan Agreement.
Any such extension shall be otherwise subject to all of the other terms and
provisions of this Agreement and the other Loan Documents.
(5) Fifth Extension of Maturity Date. Borrower may, at its option, extend the
term of the then outstanding principal amount for a period commencing on the
last day of the Fourth Extension Period and ending on October 31, 2013;
provided, however, if such day is not a Business Day, such period shall be
deemed to end the immediately preceding Business Day (the applicable period
being, the “Fifth Extension Period”), subject to the satisfaction of the
following conditions:
(a) Borrower shall notify (the “Fifth Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days
prior to the end of the Fourth Extension Period;
(b) No Potential Default (of which Borrower has previously received notice) or
Event of Default exists as of the giving of the Fifth Extension Notice and/or as
of last day of the Fourth Extension Period;
(c) If the Hedge Agreement in effect at the time of Borrower’s giving of the
Fifth Extension Notice is scheduled to mature or expire prior to the end of the
Fourth Extension Period, Borrower shall have obtained and delivered to
Administrative Agent not later than ten (10) Business Days prior to the first
day of the Fifth Extension Period one or more replacement Hedge Agreements which
meet the requirements of Section 9.15 which shall be effective on or before the
date the then effective Hedge Agreement is scheduled to mature or expire and
shall have a maturity date not earlier than the end of the Fifth Extension
Period;
(d) Whether or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent and the
Lenders in connection with the proposed extension (pre- and post-closing),
including reasonable legal fees; all such costs and expenses shall be due and
payable within ten (10) days of demand, and any failure to pay such amounts
shall constitute a default under this Agreement and the Loan Documents;

 

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(e) Not later than the last day of the Fourth Extension Period, (i) the
extension shall have been documented to the Lenders’ reasonable satisfaction and
consented to by Borrower, Administrative Agent and all the Lenders, including
the execution and delivery by the Guarantor of reaffirmations of its obligations
under the Guaranty and (ii) if requested by the Administrative Agent, the
Administrative Agent shall have been provided with an updated title report and
judgment and lien searches, together with any title endorsements reasonably
required by Administrative Agent; and
(f) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in
accordance with Section 2.5(5) of the Mortgage Loan Agreement.
Any such extension shall be otherwise subject to all of the other terms and
provisions of this Agreement and the other Loan Documents.
Section 2.6 Exit Fee. Upon the earlier to occur of (a) the date when full
prepayment of the Loan occurs, (b) the Maturity Date or (c) the date on which
the Loan has been accelerated following an Event of Default, Borrower shall pay
to the Administrative Agent for the benefit of Eurohypo the entire Exit Fee.
Section 2.7 Application of Operating Revenues; Cash Management.
(1) During the term of the Loans, Borrower shall cause Mortgage Borrower to
establish and maintain the Clearing Account and Cash Management Account for the
benefit of Mortgage Lender, which Clearing Account and Cash Management Account
shall be under the sole dominion and control of Mortgage Lender. Borrower will
not cause or permit Mortgage Borrower in any way to alter or modify the Clearing
Account or Cash Management Account and will notify Administrative Agent of the
account number thereof.
(2) Borrower shall direct or cause Mortgage Borrower to direct that all cash
distributions from the Cash Management Account be paid to Administrative Agent
(on behalf of the Lenders) in accordance with this Agreement and the Cash
Management Agreement (including the Net Liquidation Proceeds After Debt Service)
be deposited into an account specified by Administrative Agent.
(3) In the event Mortgage Lender waives the requirement of Mortgage Borrower to
maintain the Clearing Account and Cash Management Account or the Mortgage Loan
has been repaid in full, Administrative Agent (on behalf of the Lenders) shall
have the right to require Borrower to establish and maintain a cash management
account that would operate in the same way as the Clearing Account and Cash
Management Account.
Section 2.8 Payments; Pro Rata Treatment; Etc.
(1) Payments Generally.
(a) Payments by Borrower. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by Borrower under
this Agreement and the Notes, and, except to the extent otherwise provided
therein, all payments to be made by Borrower under any other Loan Document,
shall be made in Dollars, in immediately available funds, without deduction,
setoff or counterclaim, to the Administrative Agent at an account designated by
the Administrative Agent by notice to Borrower, not later than 12:00 noon, New
York City time, on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day).

 

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(b) Application of Payments. Subject to the provisions of Sections 2.4(6) and
2.8(2), Borrower shall, at the time of making each payment under this Agreement
or any Note for the account of any Lender, specify to the Administrative Agent
(which shall so notify the intended recipient(s) thereof) the Types of Loans or
other amounts payable by Borrower hereunder to which such payment is to be
applied (and in the event that Borrower fails to so specify, or if an Event of
Default exists, the Administrative Agent may distribute such payment to the
Lenders for application in such manner as it may determine to be appropriate,
subject to Section 2.8(2) and any other agreement among the Administrative Agent
and the Lenders with respect to such application).
(c) Forwarding of Payments by Administrative Agent. Except as otherwise agreed
by the Administrative Agent and the Lenders, each payment received by the
Administrative Agent under this Agreement or any Note for account of any Lender
shall be paid by the Administrative Agent promptly to such Lender, in
immediately available funds, for account of such Lender’s Applicable Lending
Office for the Loan or other obligation in respect of which such payment is
made.
(d) Extensions to Next Business Day. If the due date of any payment under this
Agreement or any Note would otherwise fall on a day that is not a Business Day,
such date shall be extended to the next succeeding Business Day, and interest
shall be payable for any principal so extended for the period of such extension.
(2) Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each
advance of a Loan from the Lenders under Section 2.1(2) shall be made from the
Lenders, and any termination of the obligation to make an advance of the Loans
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (b) except as
otherwise provided in Section 2.9(4), Loans shall be allocated pro rata among
the Lenders according to the amounts of their respective Commitments (in the
case of the making of Loans) or their respective Loans (in the case of
Conversions or Continuations of Loans); (c) each payment or prepayment of
principal of Loans by Borrower shall be made for account of the Lenders pro rata
in accordance with the respective unpaid principal amounts of the Loans held by
them; and (d) each payment of interest on Loans by Borrower shall be made for
account of the Lenders pro rata in accordance with the amounts of interest on
such Loans then due and payable to the respective Lenders.
(3) Computations. Interest on all Loans shall be computed on the basis of a year
of 360 days and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.

 

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(4) Minimum Amounts. Except for (a) mandatory and other prepayments made
pursuant to Sections 2.4(4) and 14.4, (b) Conversions or prepayments made
pursuant to Section 2.9(4), each Conversion and Continuation (collectively,
“Loan Transactions”) of Loans shall be in an aggregate amount at least equal to
$1,000,000 (Loan Transactions of or into Loans of different Types or Interest
Periods at the same time hereunder shall be deemed separate Loan Transactions
for purposes of the foregoing, one for each Type or Interest Period); provided
that if any Loans or borrowings would otherwise be in a lesser principal amount
for any period, such Loans shall be Base Rate Loans during such period.
Notwithstanding the foregoing, the minimum amount of $1,000,000 shall not apply
to Conversions of lesser amounts into a Type of Loan that has (or will have upon
such Conversion) an aggregate principal amount exceeding such minimum amount and
a duration of at least one Interest Period. The initial borrowing hereunder
shall be an aggregate amount at least equal to $500,000.
(5) Certain Notices. Notices by Borrower to the Administrative Agent regarding
Loan Transactions and the selection of Types of Loans and/or of the duration of
Interest Periods shall be irrevocable and shall be effective only if received by
the Administrative Agent not later than 12:00 noon, New York City time, on the
number of Business Days prior to the date of the proposed Loan Transaction or
the first day of such Interest Period specified below:

              Number of Business   Notice   Days Prior  
 
       
Optional Prepayment
    3  
Conversions into, Continuations as, or borrowings in Base Rate Loans
    3  
Conversions into, Continuations as, borrowings in or changes in duration of
Interest Period for, Eurodollar Loans (subject to Section 2.4(6))
    3  

Each such notice of a Loan Transaction shall specify the amount (subject to
Section 2.8(4)), Type, and Interest Period of such proposed Loan Transaction,
and the date (which shall be a Business Day) of such proposed Loan Transaction.
Notices for Conversions and Continuations shall be in the form of Exhibit E.
Each such notice specifying the duration of an Interest Period shall specify the
portion of the Loans to which such Interest Period is to relate. The
Administrative Agent shall promptly notify the Lenders of the contents of each
such notice. If Borrower fails to select (i) the Type of Loan or (ii) the
duration of any Interest Period for any Eurodollar Loan within the time period
(i.e., three (3) Business Days prior to the first day of the next applicable
Interest Period) and otherwise as provided in this Section 2.8(5), such Loan (if
outstanding as an Eurodollar Loan) will be automatically Continued as an
Eurodollar Loan with an Interest Period of one (1) month on the last day of the
current Interest Period for such Loan (based on a LIBOR Rate determined two
(2) Business Days prior to the first day of the next Interest Period) or, if
outstanding as a Base Rate Loan, will remain as a Base Rate Loan.

 

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(6) Non Receipt of Funds by the Administrative Agent. Unless the Administrative
Agent shall have been notified by a Lender or Borrower (in either case, the
“Payor”) prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by such Lender hereunder or (in the case of Borrower) a payment to the
Administrative Agent for account of any Lender hereunder (in either case, such
payment being herein called the “Required Payment”), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date (the “Advance Date”) such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (a) the Prime Rate for such day in the case
of payments returned to the Administrative Agent by any of the Lenders or
(b) the applicable interest rate due hereunder with respect to payments returned
by Borrower to the Administrative Agent and, if such recipient(s) shall fail
promptly to make such payment, the Administrative Agent shall be entitled to
recover such amount, on demand, from the Payor, together with interest as
aforesaid; provided that if neither the recipient(s) nor the Payor shall return
the Required Payment to the Administrative Agent within three (3) Business Days
of the Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:
(a) if the Required Payment shall represent a payment to be made by Borrower to
the Lenders, Borrower and the recipient(s) shall each be obligated retroactively
to the Advance Date to pay interest in respect of the Required Payment at the
Default Rate (without duplication of the obligation of Borrower under
Section 2.3 to pay interest on the Required Payment at the Default Rate), it
being understood that the return by the recipient(s) of the Required Payment to
the Administrative Agent shall not limit such obligation of Borrower under
Section 2.3 to pay interest at the Default Rate in respect of the Required
Payment, and
(b) if the Required Payment shall represent proceeds of a Loan to be made by the
Lenders to Borrower, the Payor and Borrower shall each be obligated
retroactively to the Advance Date to pay interest in respect of the Required
Payment pursuant to whichever of the rates specified in Section 2.3 is
applicable to the Type of such Loan, it being understood that the return by
Borrower of the Required Payment to the Administrative Agent shall not limit any
claim Borrower may have against the Payor in respect of such Required Payment.
(7) Sharing of Payments, Etc.
(a) Right of Set off. Borrower agrees that, in addition to (and without
limitation of) any right of set off, banker’s lien or counterclaim a Lender may
otherwise have, (subject, as among the Lenders, to Section 12.26), each Lender
shall be entitled, at its option (to the fullest extent permitted by law), to
set off and apply any deposit (general or special, time or demand, provisional
or final), or other indebtedness, held by it for the credit or account of
Borrower at any of its offices, in Dollars or in any other currency, against any
principal of or interest on any of such Lender’s Loans or any other amount
payable to such Lender hereunder, that is not paid when due (regardless of
whether such deposit or other indebtedness is then due to such Borrower), in
which case it shall promptly notify Borrower and the Administrative Agent
thereof, provided that such Lender’s failure to give such notice shall not
affect the validity thereof.

 

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(b) Sharing. If any Lender shall obtain from Borrower payment of any principal
of or interest on any Loan owing to it or payment of any other amount under this
Agreement or any other Loan Document through the exercise (subject, as among the
Lenders, to Section 12.26) of any right of set off, banker’s lien or
counterclaim or similar right or otherwise (other than from the Administrative
Agent as provided herein), and, as a result of such payment, such Lender shall
have received a greater percentage of the principal of or interest on the Loans
or such other amounts then due hereunder or thereunder by Borrower to such
Lender than the percentage received by any other Lender, it shall promptly
purchase from such other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans or such other amounts,
respectively, owing to such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to time
as shall be equitable, to the end that all the Lenders shall share the benefit
of such excess payment (net of any expenses that may be incurred by such Lender
in obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored.
(c) Consent by Borrower. Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise (subject, as among the Lenders,
to Section 12.26) all rights of set off, banker’s lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans or other amounts (as the case may be) owing to such
Lender in the amount of such participation.
(d) Rights of Lenders; Bankruptcy. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of Borrower. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a set off to which this Section 2.8(7) applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders entitled under this
Section 2.8(7) to share in the benefits of any recovery on such secured claim.

 

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Section 2.9 Yield Protection; Etc.
(1) Additional Costs.
(a) Costs of Making or Maintaining Eurodollar Loans. Borrower shall pay directly
to each Lender from time to time such amounts as such Lender may reasonably
determine to be necessary to compensate such Lender for any costs that such
Lender determines are attributable to its making or maintaining of any
Eurodollar Loans or its obligation to make any Eurodollar Loans hereunder, or
any reduction in any amount receivable by such Lender hereunder in respect of
any of such Eurodollar Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called “Additional Costs”),
resulting from any Regulatory Change that:
(i) shall subject any Lender (or its Applicable Lending Office for any of such
Loans) to any tax, duty or other charge in respect of such Loans or its Note or
changes the basis of taxation of any amounts payable to such Lender under this
Agreement or its Note in respect of any of such Loans (excluding changes in the
rate of tax on the overall net income of such Lender or of such Applicable
Lending Office by the jurisdiction in which such Lender has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar requirements
(other than the Reserve Requirement used in the determination of the Adjusted
LIBOR Rate for any Interest Period for such Loan) relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Lender (including, without limitation, any of such Loans or any deposits
referred to in the definition of “LIBOR Rate”), or any commitment of such Lender
(including, without limitation, the Commitment of such Lender hereunder); or
(iii) imposes any other condition affecting this Agreement or its Note (or any
of such extensions of credit or liabilities) or its Commitment.
If any Lender requests compensation from Borrower under this paragraph (a),
Borrower may, by notice to such Lender (with a copy to the Administrative
Agent), suspend the obligation of such Lender thereafter to make or Continue
Eurodollar Loans, or to Convert Loans into Eurodollar Loans, until the
Regulatory Change giving rise to such request ceases to be in effect (in which
case the provisions of Section 2.9(4) shall be applicable), provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(b) Costs Attributable to Regulatory Change or Risk-Based Capital Guidelines.
Without limiting the effect of the foregoing provisions of this Section 2.9(1)
(but without duplication), Borrower shall pay directly to each Lender from time
to time on request such amounts as such Lender may reasonably determine to be
necessary to compensate such Lender (or, without duplication, the bank holding
company of which such Lender is a subsidiary) for any costs that it reasonably
determines are attributable to the maintenance by such Lender (or any Applicable
Lending Office or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) of any
court or governmental or monetary authority (i) following any Regulatory Change
or (ii) implementing any risk based capital guideline or other requirement
(whether or not having the force of law and whether or not the failure to comply
therewith would be unlawful) hereafter issued by any government or governmental
or supervisory authority (excluding Basel II and any other law or regulation
which implements Basel II, in each case in the form existing on the date of this
Agreement), of capital in respect of its Commitment or Loans (such compensation
to include, without limitation, an amount equal to any reduction of the rate of
return on assets or equity of such Lender (or any Applicable Lending Office or
such bank holding company) to a level below that which such Lender (or any
Applicable Lending Office or such bank holding company) could have achieved but
for such law, regulation, interpretation, directive or request.

 

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(c) Notification and Certification. Each Lender shall notify Borrower of any
event occurring after the date hereof entitling such Lender to compensation
under paragraph (a) or (b) of this Section 2.9(1) as promptly as practicable,
but in any event within forty-five (45) days, after such Lender obtains actual
knowledge thereof; provided that (i) if any Lender fails to give such notice
within forty-five (45) days after it obtains actual knowledge of such an event,
such Lender shall, with respect to compensation payable pursuant to this
Section 2.9(1) in respect of any costs resulting from such event, only be
entitled to payment under this Section 2.9(1) for costs incurred from and after
the date thirty (30) days prior to the date that such Lender does give such
notice and (ii) each Lender will designate a different Applicable Lending Office
for the Loans of such Lender affected by such event if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the sole opinion of such Lender, be disadvantageous to such Lender, except that
such Lender shall have no obligation to designate an Applicable Lending Office
located in the United States of America. Each Lender will furnish to Borrower a
certificate setting forth the basis and amount of each request by such Lender
for compensation under paragraph (a) or (b) of this Section 2.9(1).
Determinations and allocations by any Lender for purposes of this Section 2.9(1)
of the effect of any Regulatory Change pursuant to paragraph (a) of this
Section 2.9(1), or of the effect of capital maintained pursuant to paragraph
(b) of this Section 2.9(1), on its costs or rate of return of maintaining Loans
or its obligation to make Loans, or on amounts receivable by it in respect of
Loans, and of the amounts required to compensate such Lender under this
Section 2.9(1), shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
Borrower shall be obligated to pay compensation to a Lender pursuant to
subsections (a) and (b) of this Section 2.9(1) only if such Lender is imposing
similar compensation requirements on borrowers under commercial loans of the
same type and quality as the Loan and which are similarly affected by the
Regulatory Change or other guidelines or requirements for which such Lender is
seeking compensation from Borrower pursuant to this Section 2.9(1).
(2) Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the LIBOR Rate for any
Interest Period for any Eurodollar Loan:
(a) the Administrative Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits referred
to in the definition of LIBOR Rate are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining rates of
interest for Eurodollar Loans as provided herein; or
(b) any Lender determines, which determination shall be conclusive, and notify
the Administrative Agent that the relevant rates of interest referred to in the
definition of LIBOR Rate upon the basis of which the rate of interest for
Eurodollar Loans for such Interest Period is to be determined are not likely
adequately to cover the cost to such Lenders of making or maintaining Eurodollar
Loans for such Interest Period;
then the Administrative Agent shall give Borrower and each Lender prompt notice
thereof and, so long as such condition remains in effect, the Lenders shall be
under no obligation to make additional Eurodollar Loans, to Continue Eurodollar
Loans or to Convert Loans of any other Type into Eurodollar Loans, and Borrower
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or such Loans shall be
automatically Converted into Base Rate Loans.

 

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(3) Illegality. Notwithstanding any other provision of this Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to honor its obligation to make or maintain Eurodollar Loans hereunder (and, in
the sole opinion of such Lender, the designation of a different Applicable
Lending Office would either not avoid such unlawfulness or would be
disadvantageous to such Lender), then such Lender shall promptly notify Borrower
thereof (with a copy to the Administrative Agent) and such Lender’s obligation
to make or Continue, or to Convert Loans of any other Type into, Eurodollar
Loans shall be suspended until such time as such Lender may again make and
maintain Eurodollar Loans (in which case the provisions of Section 2.9(4) shall
be applicable).
(4) Treatment of Affected Loans. If the obligation of any Lender to make
Eurodollar Loans or to Continue, or to Convert Base Rate Loans into, Eurodollar
Loans shall be suspended pursuant to Section 2.9(1) or 2.9(3), such Lender’s
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for Loans (or, in the case of a
Conversion resulting from a circumstance described in Section 2.9(3), on such
earlier date as such Lender may specify to Borrower with a copy to the
Administrative Agent) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 2.9(1) or 2.9(3) that gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender’s Loans have been so Converted, all payments
and prepayments of principal that would otherwise be applied to such Lender’s
Loans shall be applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender as
Eurodollar Loans shall be made or Continued instead as Base Rate Loans, and all
Loans of such Lender that would otherwise be Converted into Eurodollar Loans
shall remain as Base Rate Loans.
If such Lender gives notice to Borrower with a copy to the Administrative Agent
that the circumstances specified in Section 2.9(1) or 2.9(3) that gave rise to
the Conversion of such Lender’s Loans pursuant to this Section 2.9(4) no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when Eurodollar Loans made by other Lenders are outstanding,
such Lender’s Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect thereto, all Base
Rate Loans and Eurodollar Loans are allocated among the Lenders ratably (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.

 

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(5) Compensation. Borrower shall pay to the Administrative Agent for account of
each Lender, upon the request of such Lender through the Administrative Agent,
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost or expense that such Lender
determines is attributable to:
(a) any payment, prepayment or Conversion of a Eurodollar Loan made by such
Lender for any reason (including, without limitation, the acceleration of the
Loans pursuant to the Administrative Agent’s or the Lenders’ rights referred to
in Article 11) on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by Borrower for any reason to borrow a Eurodollar Loan from such
Lender on the date for such borrowing specified in the relevant notice of
borrowing given to the Administrative Agent in accordance with the terms of this
Agreement.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest that otherwise would have accrued on
such principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar
deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by such
Lender), or if such Lender shall cease to make such bids, the equivalent rate,
as reasonably determined by such Lender, derived from Page 3750 of the Dow Jones
Markets (Telerate) Service or other publicly available source as described in
the definition of LIBOR Rate.
(6) U.S. Taxes.
(a) Gross-up for Deduction or Withholding of U.S. Taxes. Borrower agrees to pay
to each Lender that is not a U.S. Person such additional amounts as are
necessary in order that the net payment of any amount due to such non U.S.
Person hereunder after deduction for or withholding in respect of any U.S. Taxes
imposed with respect to such payment (or in lieu thereof, payment of such U.S.
Taxes by such non U.S. Person), will not be less than the amount stated herein
to be then due and payable, provided that the foregoing obligation to pay such
additional amounts shall not apply:
(i) to any payment to any Lender hereunder unless such Lender is, on the date
hereof (or on the date it becomes a Lender hereunder as provided in
Section 12.24(2)) and on the date of any change in the Applicable Lending Office
of such Lender, either entitled to submit a Form W-8BEN (relating to such Lender
and entitling it to a complete exemption from withholding on all interest to be
received by it hereunder in respect of the Loans) or Form W-8ECI (relating to
all interest to be received by such Lender hereunder in respect of the Loans),
or
(ii) to any U.S. Taxes imposed solely by reason of the failure by such non U.S.
Person to comply with applicable certification, information, documentation or
other reporting requirements concerning the nationality, residence, identity or
connections with the United States of America of such non U.S. Person if such
compliance is required by statute or regulation of the United States of America
as a precondition to relief or exemption from such U.S. Taxes.

 

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For the purposes hereof, (A) “U.S. Person” means a citizen, national or resident
of the United States of America, a corporation, limited liability company,
partnership or other entity created or organized in or under any laws of the
United States of America or any State thereof, or any estate or trust that is
subject to Federal income taxation regardless of the source of its income, (B)
“U.S. Taxes” means any present or future tax, assessment or other charge or levy
imposed by or on behalf of the United States of America or any taxing authority
thereof or therein, (C) “Form W-8BEN” means Form W-8BEN of the Department of the
Treasury of the United States of America and (D) “Form W-8ECI” means Form W-8ECI
of the Department of the Treasury of the United States of America. Each of the
Forms referred to in the foregoing clauses (C) and (D) shall include such
successor and related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a claim to which
such Form relates.
(b) Evidence of Deduction, Etc. Within thirty (30) days after paying any amount
to the Administrative Agent or any Lender from which it is required by law to
make any deduction or withholding, and within thirty (30) days after it is
required by law to remit such deduction or withholding to any relevant taxing or
other authority, Borrower shall deliver to the Administrative Agent for delivery
to such non U.S. Person evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
(7) Replacement of Lenders. If any Lender requests compensation pursuant to
Section 2.9(1) or 2.9(6), or any Lender’s obligation to Continue Loans of any
Type, or to Convert Loans of any Type into the other Type of Loan, shall be
suspended pursuant to Section 2.9(2) or 2.9(3) (any such Lender requesting such
compensation, or whose obligations are so suspended, being herein called a
“Requesting Lender”), Borrower, upon three (3) Business Days notice, may require
that such Requesting Lender transfer all of its right, title and interest under
this Agreement and such Requesting Lender’s Note to any bank or other financial
institution (a “Proposed Lender”) identified by Borrower that is satisfactory to
the Administrative Agent (i) if such Proposed Lender agrees to assume all of the
obligations of such Requesting Lender hereunder, and to purchase all of such
Requesting Lender’s Loans hereunder for consideration equal to the aggregate
outstanding principal amount of such Requesting Lender’s Loans, together with
interest thereon to the date of such purchase (to the extent not paid by
Borrower), and satisfactory arrangements are made for payment to such Requesting
Lender of all other amounts accrued and payable hereunder to such Requesting
Lender as of the date of such transfer (including any fees accrued hereunder and
any amounts that would be payable under Section 2.9(5) as if all of such
Requesting Lender’s Loans were being prepaid in full on such date) and (ii) if
such Requesting Lender has requested compensation pursuant to Section 2.9(1) or
2.9(6), such Proposed Lender’s aggregate requested compensation, if any,
pursuant to Section 2.9(1) or 2.9(6) with respect to such Requesting Lender’s
Loans is lower than that of the Requesting Lender. Subject to the provisions of
Section 12.24(2), such Proposed Lender shall be a “Lender” for all purposes
hereunder. Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements of Borrower contained in Sections 2.9(1), 2.9(6) and
12.5 (without duplication of any payments made to such Requesting Lender by
Borrower or the Proposed Lender) shall survive for the benefit of such
Requesting Lender under this Section 2.9(7) with respect to the time prior to
such replacement.

 

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ARTICLE 3
INSURANCE, CONDEMNATION, AND IMPOUNDS
Section 3.1 Insurance.
(1) Borrower shall cause Mortgage Borrower to maintain at all times during the
term of the Loans the insurance required under Article 3 of the Mortgage Loan
Agreement, including, without limitation, meeting all insurer requirements
thereunder. Borrower shall cause Administrative Agent (on behalf of Lenders) to
be named as named insureds together with Mortgage Lender, as their interest may
appear, under the insurance policies required under Article 3 of the Mortgage
Loan Agreement. Borrower shall also cause all insurance policies required under
this Section 3.1 to provide for at least thirty (30) days’ prior notice to
Administrative Agent in the event of policy cancellation or material changes.
Not less than thirty (30) days’ prior to the expiration dates of the policies
theretofore furnished to Administrative Agent pursuant to the terms hereof,
certified copies of the policies marked “premium paid” or accompanied by
evidence satisfactory to Administrative Agent of payment of the premiums due
thereunder shall be delivered by Borrower to Administrative Agent; provided,
however, that in the case of renewal policies, Borrower may furnish
Administrative Agent with binders therefor to be followed by the original
policies when issued.
(2) If at any time Administrative Agent is not in receipt of written evidence
that all insurance required hereunder is in full force and effect,
Administrative Agent shall have the right, without notice to Borrower to take
such action as Administrative Agent deems necessary to protect its interest in
the Project and the Collateral, including, without limitation, the obtaining of
such insurance coverage as Administrative Agent in its sole discretion deems
appropriate, and all expenses incurred by Administrative Agent in connection
with such action or in obtaining such insurance and keeping it in effect shall
be paid by Borrower to Administrative Agent upon demand and until paid shall be
secured by the Pledge Agreement and shall bear interest at the Default Rate.
(3) For purposes of this Agreement, Administrative Agent shall have the same
approval rights over the insurance referred to above (including, without
limitation, the insurers, deductibles and coverages thereunder), as well as the
right to require other insurance as are provided in favor of Mortgage Lender in
the Mortgage Loan Agreement. All liability insurance provided for in the
Mortgage Loan Documents shall provide insurance with respect to the liabilities
of both Mortgage Borrower and Borrower. The insurance policies delivered
pursuant to the Mortgage Loan Documents shall include endorsements required by
Mortgage Lender, but pursuant to which Administrative Agent shall have the same
rights as the Mortgage Lender.
(4) In the event that the Mortgage Loan has been paid in full, except upon the
occurrence and continuance of an Event of Default, Borrower shall permit
Mortgage Borrower to settle any insurance or condemnation claims with respect to
the insurance proceeds or condemnation awards which in the aggregate are less
than or equal to the Threshold Amount. Administrative Agent shall have the right
to participate in and approve any settlement for insurance or condemnation
claims with respect to the insurance proceeds or condemnation awards which in
the aggregate are equal to or greater than the Threshold Amount. If an Event of
Default shall have occurred and be continuing, Borrower hereby irrevocably
empowers Administrative Agent, in the name of Mortgage Borrower as its true and
lawful attorney-in-fact, to file and prosecute such claim and to collect and to
make receipt for any such payment.

 

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Section 3.2 Use and Application of Insurance Proceeds. Notwithstanding any
provision in this Agreement to the contrary, all insurance proceeds will be made
available to Mortgage Borrower in accordance with the Mortgage Loan Agreement.
In the event the Mortgage Loan has been paid in full and Administrative Agent
receives any insurance proceeds, Administrative Agent (for the benefit of
Lenders) shall either apply such proceeds to the Debt or for the restoration of
the Project in accordance with the same terms and conditions contained in the
Mortgage Loan Agreement, as if such terms were set forth in full herein.
Section 3.3 Casualty and Condemnation.
(1) If the Project shall be damaged or destroyed, in whole or in part, by fire
or other casualty (a “Casualty”), Borrower shall cause Mortgage Borrower to give
prompt notice of such damage to Administrative Agent and shall or shall cause
Mortgage Borrower to promptly commence and diligently prosecute the completion
of the restoration of the Project as nearly as possible to the condition the
Project was in immediately prior to such Casualty, with such alterations as may
be approved by Administrative Agent and otherwise in accordance with the
Mortgage Loan Agreement. Borrower shall or shall cause Mortgage Borrower to pay
all costs of such restoration whether or not such costs are covered by
insurance. Administrative Agent may, but shall not be obligated to make proof of
loss if not made promptly by Borrower.
(2) Borrower shall cause Mortgage Borrower to promptly give Administrative Agent
notice of the actual or threatened commencement of any proceeding for the
condemnation of all or any part of the Project and shall or shall cause Mortgage
Borrower to deliver to Administrative Agent copies of any and all papers served
in connection with such proceedings. Administrative Agent may participate in any
such proceedings, and Borrower shall from time to time cause Mortgage Borrower
to deliver to Administrative Agent all instruments requested by it to permit
such participation. Borrower shall, or shall cause Mortgage Borrower, at its own
expense, to diligently prosecute any such proceedings, and shall consult with
Administrative Agent, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. Notwithstanding any taking by
any public or quasi public authority through condemnation or otherwise
(including, but not limited to, any transfer made in lieu of or in anticipation
of the exercise of such taking), Borrower shall continue to pay the Loans at the
time and in the manner provided for its payment in the Notes and in this
Agreement.
(3) For purposes of Sections 3.1 and 3.2 hereof, Borrower shall obtain the
approval of Administrative Agent for each matter requiring the approval of
Mortgage Lender under the provisions of Article 3 of the Mortgage Loan
Agreement.

 

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ARTICLE 4
RESERVES
Section 4.1 Interest Reserve Fund.
(1) Deposits. In the event that the Administrative Agent determines from time to
time in its sole and absolute discretion that Loans available pursuant to
Section 2.1(2)(a) and future Operating Revenues may be insufficient to pay all
interest charges due or to be due in connection with the Loans, the
Administrative Agent shall notify Borrower in writing of such determination.
Within ten (10) Business Days following any such notice, Borrower shall deposit
with the Administrative Agent (or, at the direction of the Administrative Agent,
the Depository Bank), for deposit with Administrative Agent into an account in
Administrative Agent’s name an amount reasonably determined by the
Administrative Agent as being necessary to provide an adequate reserve for the
payment of such interest charges (the “Interest Reserve Fund”).
(2) Disbursements. Provided that no Event of Default exists (other than a
Default or an Event of Default which may be cured by the transfer of amounts
credited to the Interest Reserve Fund to Borrower’s account pursuant to this
Section 4.1(2)), and provided that there are insufficient Operating Revenues and
insufficient Loans available pursuant to Section 2.1(2)(a) from which to pay
such interest payments, the Administrative Agent will direct the Depository Bank
to transfer (to the extent funds are available therein) amounts credited to the
Interest Reserve Fund to Borrower’s account to pay or reimburse Borrower for the
payment of any interest payments then due and payable under the Loans. Provided
that no Event of Default exists, the Administrative Agent shall direct the
Depository Bank to make such disbursements as requested by Borrower on a monthly
basis within five (5) Business Days following receipt by the Administrative
Agent of a written request for disbursement (in a form reasonably approved by
the Administrative Agent) executed by an authorized officer of Borrower, which
certificate shall certify, among other things, that there are insufficient
Operating Revenues and insufficient Loans available pursuant to
Section 2.1(2)(a) to pay the interest payments for which such disbursement is
being requested.
(3) Grant of Security Interest. Borrower hereby grants a perfected first
priority security interest in favor of the Administrative Agent for the ratable
benefit of the Lenders in the Interest Reserve Fund established by or for it
hereunder and all financial assets and other property and sums at any time held,
deposited or invested therein, and all security entitlements and investment
property relating thereto, together with any interest or other earnings thereon,
and all proceeds thereof, whether accounts, general intangibles, chattel paper,
deposit accounts, instruments, documents or securities (collectively, “Reserve
Account Collateral”), together with all rights of a secured party with respect
thereto (even if no further documentation is requested by the Administrative
Agent or the Lenders or executed by Borrower). Borrower covenants and agrees:
(a) to do all acts that may be reasonably necessary to maintain, preserve and
protect Reserve Account Collateral;
(b) to pay promptly when due all material taxes, assessments, charges,
encumbrances and liens now or hereafter imposed upon or affecting any Reserve
Account Collateral;

 

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(c) to appear in and defend any action or proceeding which may materially and
adversely affect Borrower’s title to or the Administrative Agent’s interest in
the Reserve Account Collateral;
(d) following the creation of the Interest Reserve Fund and the initial funding
thereof, other than to the Administrative Agent pursuant to this Agreement or
the Cash Management Agreement, not to transfer, assign, sell, surrender,
encumber, mortgage, hypothecate, or otherwise dispose of any of the Reserve
Account Collateral or rights or interests therein, and to keep the Reserve
Account Collateral free of all levies and security interests or other liens or
charges except the security interest in favor of the Administrative Agent
granted hereunder;
(e) to account fully for and promptly deliver to the Administrative Agent, in
the form received, all documents, chattel paper, instruments and agreements
constituting the Reserve Account Collateral hereunder, endorsed to the
Administrative Agent or in blank, as requested by the Administrative Agent, and
accompanied by such powers as appropriate and until so delivered all such
documents, instruments, agreements and proceeds shall be held by Borrower in
trust for the Administrative Agent, separate from all other property of
Borrower; and
(f) from time to time upon request by the Administrative Agent, to furnish such
further assurances of Borrower’s title with respect to the Reserve Account
Collateral, execute such written agreements, or do such other acts, all as may
be reasonably necessary to effectuate the purposes of this agreement or as may
be required by law, or in order to perfect or continue the first-priority lien
and security interest of the Administrative Agent in the Reserve Account
Collateral.
(4) Rights on Event of Default. Upon the occurrence and during the continuance
of an Event of Default, the Administrative Agent, at its option, may withdraw
the funds on deposit in the Interest Reserve Fund and apply such funds to the
items for which the Interest Reserve Fund was established or to payment of the
Loans in such order, proportion and priority as the Administrative Agent may
determine in its sole discretion. The Administrative Agent’s right to withdraw
and apply such funds shall be in addition to all other rights and remedies
provided to the Administrative Agent on behalf of the Lenders under the Loan
Documents.
(5) Prohibition Against Further Encumbrance. Borrower shall not, without the
prior consent of the Administrative Agent, further pledge, assign or grant any
security interest in the Interest Reserve Fund or permit any Lien to attach.
(6) Release of Reserve Funds. Any amount remaining in the Interest Reserve Fund
after the Loans have been paid in full shall be promptly returned to Borrower.

 

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(7) Interest. In the event that the Interest Reserve Fund is an interest-bearing
account, the balance of any interest therein shall be deemed a part of thereof.
Nothing herein shall be construed as requiring the Administrative Agent or the
Lenders to pay interest on the Interest Reserve Fund.
Section 4.2 Mortgage Loan Reserves.
(1) Borrower shall cause Mortgage Borrower to deposit and maintain each of the
reserve accounts as more particularly set forth in Article 4 of the Mortgage
Loan Agreement and shall cause Mortgage Borrower to deposit and maintain each of
the “Reserve Funds” and “Security Accounts” as set forth in Mortgage Loan
Documents (collectively, “Mortgage Loan Reserve Funds”), and to perform and
comply with all the terms and provisions relating thereto. Borrower grants to
Administrative Agent (on behalf of Lenders) a first-priority perfected security
interest in Borrower’s interest in each of the Mortgage Loan Reserve Funds,
subject to the prior rights of Mortgage Lender, and any and all monies now or
hereafter deposited in the Mortgage Loan Reserve Funds as additional security
for payment of the Indebtedness to the extent Borrower has an interest in same.
(2) The Mortgage Loan Reserve Funds shall be under the sole dominion and control
of the Mortgage Lender. Subject to the terms of the Mortgage Loan Documents, the
Mortgage Lender and its servicer shall have the sole right to make withdrawals
from the Mortgage Loan Reserve Funds and all costs and expenses for establishing
and maintaining the Mortgage Loan Reserve Funds shall be paid by Mortgage
Borrower. In the event the Mortgage Lender waives the requirement of Mortgage
Borrower to maintain the Mortgage Loan Reserve Funds or the Mortgage Loan has
been repaid in full, the Administrative Agent (on behalf of the Lenders) shall
have the right to require Borrower to establish and maintain reserve funds that
would operate in the same manner as the Mortgage Loan Reserve Funds.
ARTICLE 5
ENVIRONMENTAL MATTERS
Section 5.1 Certain Definitions. As used herein, the following terms have the
meanings indicated:
(1) “Environmental Claim” means, with respect to any Person, any written notice,
notification, claim, administrative, regulatory or judicial action, suit,
judgment, demand or other written communication by any Person or governmental
authority alleging or asserting liability with respect to Borrower, Mortgage
Borrower or the Project, whether for damages, contribution, indemnification,
cost recovery, compensation, injunctive relief, response, remediation, damages
to natural resources, personal injuries, fines or penalties arising out of,
based on or resulting from (i) the presence, use or release into the environment
of any Hazardous Materials originating at or from, or otherwise affecting, the
Project, (ii) any fact, circumstance, condition or occurrence forming the basis
of any violation, or alleged violation, of any Environmental Law by Borrower or
Mortgage Borrower or otherwise affecting the health, safety or environmental
condition of the Project or (iii) any alleged injury or threat of injury to the
environment by Borrower or Mortgage Borrower or otherwise affecting the Project.

 

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(2) “Environmental Laws” means any federal, state or local law (whether imposed
by statute, or administrative or judicial order, or common law), now or
hereafter enacted, governing health, safety, industrial hygiene, the environment
or natural resources, or Hazardous Materials, including, such laws governing or
regulating the use, generation, storage, removal, recovery, treatment, handling,
transport, disposal, control, discharge of, or exposure to, Hazardous Materials.
(3) “Environmental Liens” has the meaning assigned to such term in
Section 5.3(4).
(4) “Environmental Losses” means any losses, damages, costs, fees, expenses,
claims, suits, judgments, awards, liabilities (including but not limited to
strict liabilities), obligations, debts, diminutions in value, fines, penalties,
charges, costs of remediation (whether or not performed voluntarily), amounts
paid in settlement, foreseeable and unforeseeable consequential damages,
litigation costs, reasonable attorneys’ fees and expenses, engineers’ fees,
environmental consultants’ fees, and investigation costs (including but not
limited to costs for sampling, testing and analysis of soil, water, air,
building materials, and other materials and substances whether solid, liquid or
gas), of whatever kind or nature, and whether or not incurred in connection with
any judicial or administrative proceedings, actions, claims, suits, judgments or
awards relating to Hazardous Materials, Environmental Claims, Environmental
Liens and violation of Environmental Laws.
(5) “Hazardous Materials” means (a) petroleum or chemical products, whether in
liquid, solid, or gaseous form, or any fraction or by product thereof,
(b) asbestos or asbestos containing materials, (c) polychlorinated biphenyls
(PCBs), (d) radon gas, (e) underground storage tanks, (f) any explosive or
radioactive substances, (g) lead or lead-based paint, (g) Mold, or (h) any other
substance, material, waste or mixture which is or shall be listed, defined, or
otherwise determined by any governmental authority to be hazardous, toxic,
dangerous or otherwise regulated, controlled or giving rise to liability under
any Environmental Laws.
(6) “Mold” means any microbial or fungus contamination or infestation in any
Project of a type which could reasonably be anticipated (after due inquiry and
investigation) to pose a risk to human health or the environment or could
reasonably be anticipated (after due inquiry and investigation) to negatively
and materially impact the value of such Project.
Section 5.2 Representations and Warranties on Environmental Matters. Borrower
represents and warrants to the Administrative Agent and the Lenders that, to
Borrower’s knowledge, except as set forth in the Site Assessment or otherwise in
conformance with all applicable laws, including Environmental Laws, (1) no
Hazardous Material is now or was formerly used, stored, generated, manufactured,
installed, treated, discharged, disposed of or otherwise present at or about the
Project or any property adjacent to the Project (except for cleaning and other
products currently used in connection with the routine maintenance or repair of
the Project in full compliance with Environmental Laws), (2) all permits,
licenses, approvals and filings required by Environmental Laws have been
obtained, and the use, operation and condition of the Project do not, and did
not previously, violate any Environmental Laws, (3) no civil, criminal or
administrative action, suit, claim, hearing, investigation or proceeding has
been brought or been threatened in writing, nor have any settlements been
reached by or with any parties or any Liens imposed in connection with the
Project concerning Hazardous Materials or Environmental Laws and (4) no
underground storage tanks exist at the Project.

 

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Section 5.3 Covenants on Environmental Matters.
(1) Borrower shall and shall cause Mortgage Borrower to (a) comply strictly and
in all respects with applicable Environmental Laws; (b) notify the
Administrative Agent immediately upon Borrower’s discovery of any spill,
discharge, release or presence of any Hazardous Material (unless otherwise
disclosed in the Site Assessment) at, upon, under, within, contiguous to or
otherwise affecting the Project; (c) promptly remove such Hazardous Materials
and remediate the Project in full compliance with Environmental Laws and in
accordance with the recommendations and specifications of an independent
environmental consultant selected by Borrower and approved by the Administrative
Agent; and (d) promptly forward to the Administrative Agent copies of all
orders, notices, permits, applications or other communications and reports in
connection with any spill, discharge, release or the presence of any Hazardous
Material or any other matters relating to the Environmental Laws or any similar
laws or regulations, as they may affect the Project or Borrower.
(2) Borrower shall not cause and shall prohibit Mortgage Borrower and any other
Person within the control of Borrower from causing, and shall use prudent,
commercially reasonable efforts to prohibit other Persons (including tenants)
from (a) causing any spill, discharge or release, or the use, storage,
generation, manufacture, installation, or disposal, of any Hazardous Materials
at, upon, under, within or about the Project or the transportation of any
Hazardous Materials to or from the Project (except for cleaning and other
products used in connection with the routine maintenance or repair of the
Project in full compliance with Environmental Laws and except as done in
connection with the remediation of the Project in full compliance with
Environmental Laws), (e) installing any underground storage tanks at the
Project, or (f) conducting any activity that requires a permit or other
authorization under Environmental Laws to be conducted at the Project, except in
connection with any remediation contemplated hereunder.
(3) Borrower shall provide or shall cause Mortgage Borrower to provide to the
Administrative Agent, at such Borrower’s expense promptly upon the written
request of the Administrative Agent from time to time (but no more than once
every two years), a Site Assessment or, if required by the Administrative Agent,
an update to any existing Site Assessment, to assess the presence or absence of
any Hazardous Materials and the potential costs in connection with abatement,
cleanup or removal of any Hazardous Materials found on, under, at or within the
Project. Borrower shall pay the cost of no more than one such Site Assessment or
update in any twelve (12) month period, unless the Administrative Agent’s
request for a Site Assessment is based on information provided under
Section 5.3(1), a reasonable suspicion of Hazardous Materials at or near the
Project, a breach of representations under Section 5.2, or an Event of Default,
in which case any such Site Assessment or update shall be at Borrower’s expense.

 

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(4) Environmental Notices. Borrower shall or shall cause Mortgage Borrower to
promptly provide notice to the Administrative Agent of:
(a) all Environmental Claims asserted or threatened against Borrower, Mortgage
Borrower or any other party occupying the Project or any portion thereof or
against the Project which become known to Borrower or Mortgage Borrower;
(b) the discovery by Borrower or Mortgage Borrower of any occurrence or
condition on the Project or on any real property adjoining or in the vicinity of
the Project which could reasonably be expected to lead to an Environmental Claim
against Borrower, Mortgage Borrower, the Administrative Agent or any of the
Lenders;
(c) the commencement or completion of any remediation at the Project; and
(d) any Lien or other encumbrance imposed pursuant to any Environmental Law
(“Environmental Liens”).
In connection therewith, Borrower shall or shall cause Mortgage Borrower to
transmit to the Administrative Agent copies of any citations, orders, notices or
other written communications received from any Person and any notices, reports
or other written communications submitted to any governmental authority with
respect to the matters described above.
Section 5.4 Allocation of Risks and Indemnity.
(1) Allocation and Indemnity. As between Borrower, the Administrative Agent and
the Lenders, all risk of loss associated with non-compliance with Environmental
Laws, or with the presence of any Hazardous Material at, upon, within,
contiguous to or otherwise affecting the Project, shall lie solely with
Borrower. Accordingly, Borrower shall bear all risks and costs associated with
any Environmental Loss, damage or liability therefrom, including all costs of
removal of Hazardous Materials or other remediation required by the
Administrative Agent or by law. Borrower shall indemnify, defend and hold the
Administrative Agent and the Lenders harmless from and against all loss,
liabilities, damages, claims, costs and expenses (including reasonable costs of
defense) arising out of or associated, in any way, with the non-compliance with
Environmental Laws, or the existence of Hazardous Materials in, on, or about the
Project, or a breach of any representation, warranty or covenant contained in
this Article 5, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute or common law, including those
arising from the joint, concurrent, or comparative negligence of the
Administrative Agent and the Lenders; provided, however, Borrower shall not be
liable under such indemnification to the extent such loss, liability, damage,
claim, cost or expense results solely from the Administrative Agent’s or any
Lender’s gross negligence or willful misconduct. Borrower’s obligations under
this Section 5.4 shall arise upon the discovery of the presence of any Hazardous
Material, whether or not any governmental authority has taken or threatened any
action in connection with the presence of any Hazardous Material, and whether or
not the existence of any such Hazardous Material or potential liability on
account thereof is disclosed in the Site Assessment and shall continue
notwithstanding the repayment of the Loans or any transfer or sale of any right,
title and interest in the Project (by foreclosure, deed in lieu of foreclosure
or otherwise).

 

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(2) Possession Transfer. Notwithstanding anything to the contrary in this
Agreement, Borrower’s obligations to indemnify and hold harmless the
Administrative Agent and the Lenders or to remove, abate or remediate Hazardous
Materials and/or cure violations of Environmental Laws shall not extend to any
of the foregoing arising directly from: (i) gross negligence or willful
misconduct of the Administrative Agent or the Lenders; (ii) the violation of any
Environmental Law by any party other than Borrower, Mortgage Borrower, any
Affiliate of Borrower or any of their respective employees, contractors or
agents, after the Administrative Agent or any purchaser from the Administrative
Agent at a foreclosure sale or after a deed in lieu thereof takes title to and
possession of the Project or otherwise takes actual possession and control (to
the exclusion of Borrower, Mortgage Borrower and its Affiliates) (a “Possession
Transfer”); or (iii) the failure of Administrative Agent or any such purchaser
in a Possession Transfer to comply with any lead based paint and asbestos
operating and maintenance programs for the Project as approved by the
Administrative Agent. The burden of proving items (i), (ii) or (iii) above shall
be the obligation of Borrower.
Section 5.5 No Waiver. Notwithstanding any provision in this Article 5 or
elsewhere in the Loan Documents, or any rights or remedies granted by the Loan
Documents, the Administrative Agent and the Lenders do not waive and expressly
reserves all rights and benefits now or hereafter accruing to the Administrative
Agent and/or any Lenders under the “security interest” or “secured creditor”
exception under applicable Environmental Laws, as the same may be amended. No
action taken by the Administrative Agent and/or any Lender pursuant to the Loan
Documents shall be deemed or construed to be a waiver or relinquishment of any
such rights or benefits under the “security interest exception”.
ARTICLE 6
LEASING MATTERS
Section 6.1 Representations and Warranties on Leases. Borrower represents and
warrants to the Administrative Agent and the Lenders that: (1) the only lease or
other occupancy agreement presently affecting the Project is the Restaurant
Lease; (2) the Restaurant Lease is in full force and effect, and has not been
modified, supplemented or terminated in any way, and there are no oral
agreements with respect thereto; (3) Borrower has delivered to the
Administrative Agent a true, correct and complete copy of the Restaurant Lease;
(4) neither the landlord nor the tenant is in default under the Restaurant
Lease; (5) Mortgage Borrower has not assigned or pledged the Restaurant Lease,
the rents therefrom or any interests therein except to the Mortgage Loan
Administrative Agent (on behalf of the lenders party to the Mortgage Loan
Agreement); and (6) the tenant under the Restaurant Lease has not prepaid more
than one (1) month’s rent in advance (except for bona fide security deposits not
in excess of an amount equal to two (2) months rent).
Section 6.2 Restaurant Lease and Future Lease. Borrower shall not permit
Mortgage Borrower to modify, supplement or terminate in any way the Restaurant
Lease without the Administrative Agent’s prior written consent, and Borrower
shall not permit Mortgage Borrower to enter into any other lease of all or any
portion of the Project without the prior written consent of the Administrative
Agent.

 

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Section 6.3 Covenants. Borrower (1) shall cause Mortgage Borrower to perform the
obligations which Mortgage Borrower is required to perform under the Restaurant
Lease and any other lease entered into by Mortgage Borrower with respect to the
Project; (2) shall cause Mortgage Borrower to enforce the obligations to be
performed by the tenants under such leases; (3) shall cause Mortgage Borrower to
promptly furnish to the Administrative Agent any notice of monetary default or
termination received by Mortgage Borrower from any such tenant, and any notice
of monetary default or termination given by Mortgage Borrower to any such
tenant; (4) shall not permit Mortgage Borrower to collect any rents under any
such leases for more than thirty (30) days in advance of the time when the same
shall become due, except for bona fide security deposits not in excess of an
amount equal to two (2) months rent; (5) shall not permit Mortgage Borrower to
enter into any ground lease or master lease of any part of the Project;
(6) shall not permit Mortgage Borrower to further assign or encumber any lease
of the Project; (7) shall not permit Mortgage Borrower to, except with the
Administrative Agent’s prior written consent, cancel or accept surrender or
termination of any lease of the Project, except in the normal course of
business; (8) shall not permit Mortgage Borrower to amend any easements
affecting the Project without the Administrative Agent’s prior approval; and
(9) shall not permit Mortgage Borrower, except with the Administrative Agent’s
prior written consent, modify or amend any lease of the Project, and any action
in violation of Sections 6.3(5), (6), (7), and (8) shall be void at the election
of the Administrative Agent.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Administrative Agent and the Lenders
that:
Section 7.1 Organization and Power.
(1) Each Borrower Party that is an entity is duly organized, validly existing
and in good standing under the laws of the state of its formation or existence,
and is in compliance with legal requirements applicable to doing business in the
State. Neither Borrower nor Mortgage Borrower is a “foreign person” within the
meaning of § 1445(f)(3) of the Code.
(2) Borrower owns all of the issued and outstanding membership interests in
Mortgage Borrower and Borrower Controls Mortgage Borrower. Upon the realization
of the Collateral under the Pledge Agreement, Lenders or any other party
succeeding to the Borrower’s interest in the Collateral described in the Pledge
Agreement would have such control. Without limiting the foregoing, Borrower has
sufficient control over Mortgage Borrower to cause Mortgage Borrower to (i) take
any action on Mortgage Borrower’s part required by the Loan Documents and
(ii) refrain from taking any action prohibited by the Loan Documents.
Section 7.2 Validity of Loan Documents. The execution, delivery and performance
by each Borrower Party of the Loan Documents to which it is a party: (1) if an
entity, is duly authorized; and (2) will not violate any law. The Loan Documents
constitute the legal, valid and binding obligations of each Borrower Party,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, or similar laws generally affecting the enforcement of
creditors’ rights.

 

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Section 7.3 Liabilities; Litigation.
(1) The financial statements delivered by each Borrower Party are true and
correct in all material respects with no significant change since the date of
preparation. Except as disclosed in such financial statements, there are no
liabilities (fixed or contingent) affecting the Project, the Collateral,
Borrower, Mortgage Borrower or any other Borrower Party that would reasonably be
expected to have an adverse effect on Borrower’s ability to fulfill its
obligations hereunder or Mortgage Borrower’s ability to fulfill its obligations
under the Mortgage Loan Documents. Except as disclosed in such financial
statements or as set forth on Schedule 7.3, there is no litigation,
administrative proceeding, investigation or other legal action (including any
proceeding under any state or federal bankruptcy or insolvency law) pending or,
to Borrower’s knowledge, threatened, against the Project, the Collateral,
Borrower, Mortgage Borrower or any other Borrower Party which if adversely
determined could have a material adverse effect on such party, the Project, the
Collateral or the Loans.
(2) No Borrower Party is contemplating either the filing of a petition by it
under state or federal bankruptcy or insolvency laws or the liquidation of all
or a major portion of its assets or property, and no Borrower Party has
knowledge of any Person contemplating the filing of any such petition against
it.
Section 7.4 Taxes and Assessments. The Project is comprised of three (3) parcels
which constitute separate tax lots and do not constitute a portion of any other
tax lot. There are no pending or, to Borrower’s best knowledge, proposed,
special or other assessments for public improvements or otherwise affecting the
Project, nor are there any contemplated improvements to the Project that may
result in such special or other assessments.
Section 7.5 Other Agreements; Defaults. No Borrower Party is a party to any
agreement or instrument or subject to any court order, injunction, permit, or
restriction which might adversely affect the Project or the business,
operations, or condition (financial or otherwise) of it or any other Borrower
Party. No Borrower Party is in violation of any agreement which violation would
have an adverse effect on it or on the Project or any other Borrower Party or on
its or any other Borrower Party’s business, properties, or assets, operations or
condition, financial or otherwise.
Section 7.6 Compliance with Law.
(1) Each Borrower Party has (or shall timely obtain) all requisite licenses,
permits, franchises, qualifications, certificates of occupancy or other
governmental authorizations to own, lease and operate the Project and carry on
its business, and will take all actions necessary to obtain such approvals to
establish and sell condominium units at the Project. The Project is in
compliance in all material respects with all applicable legal requirements, and,
to Borrower’s knowledge, except as set disclosed to Administrative Agent in
structural reports provided to Administrative Agent prior to closing, is free of
material defects, and all building systems contained therein are generally in
good working order, subject to ordinary wear and tear. The Project constitutes a
legally non-conforming use under applicable legal requirements;

 

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(2) No condemnation has been commenced or, to Borrower’s knowledge, is
contemplated with respect to all or any portion of the Project or for the
relocation of roadways providing access to the Project; and
(3) The Project has adequate rights of access to public ways and, except as
would not reasonably be expected to have any Material Adverse Effect, is served
by adequate water, sewer, sanitary sewer and storm drain facilities. All public
utilities necessary or convenient to the full use and enjoyment of the Project
are located in the public right-of-way abutting the Project, and all such
utilities are connected so as to serve the Project without passing over other
property, except to the extent such other property is subject to an easement for
such utility benefiting the Project. All roads necessary for the full
utilization of the Project for its current purpose have been completed and,
dedicated to public use and accepted by all governmental authorities.
Section 7.7 Location of Borrower. Borrower’s principal place of business and
chief executive offices are located at the address stated in Section 12.1.
Section 7.8 ERISA. Neither Borrower nor Mortgage Borrower has established any
pension plan for employees which would cause Borrower or Mortgage Borrower to be
subject to the ERISA.
Section 7.9 Margin Stock. No part of proceeds of the Loans will be used for
purchasing or acquiring any “margin stock” within the meaning of Regulations G,
T, U or X of the Board of Governors of the Federal Reserve System.
Section 7.10 Tax Filings. Each Borrower Party has filed (or have obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and have paid or made adequate provision for the payment of
all federal, state and local taxes, charges and assessments payable by such
Borrower Party.
Section 7.11 Solvency. Giving effect to the Loans, the fair saleable value of
Borrower’s assets exceeds and will, immediately following the making of the
Loans, exceed Borrower’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower’s assets is and will, immediately following the
making of the Loans, be greater than Borrower’s probable liabilities, including
the maximum amount of its contingent liabilities on its Debts as such Debts
become absolute and matured. Borrower’s assets do not and, immediately following
the making of the Loans will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur Debts and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Debts as they mature (taking into account the timing and amounts of
cash to be received by Borrower and the amounts to be payable on or in respect
of obligations of Borrower).
Section 7.12 Full and Accurate Disclosure. No statement of fact made by or on
behalf of Borrower or any other Borrower Party in this Agreement or in any of
the other Loan Documents or in any certificate, statement or questionnaire
prepared and delivered by Borrower or any other Borrower Party in connection
with the Loans contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained herein or therein
not misleading. There is no fact presently known to Borrower or any other
Borrower Party which has not been disclosed to the Administrative Agent which
adversely affects, nor as far as Borrower can foresee, might adversely affect,
the Project or the business, operations or condition (financial or otherwise) of
Borrower or any other Borrower Party.

 

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Section 7.13 Single Purpose Entity. Each of Borrower and Mortgage Borrower is
and has at all times since its formation been a Single Purpose Entity.
Section 7.14 Management of the Project. The Building Conversion is being managed
solely by Project Manager. From and after the Hotel Opening, the Hotel
Improvements shall be operated solely by the Hotel Manager pursuant to the Hotel
Management Agreement.
Section 7.15 No Conflicts. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower and each other Borrower Party
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition of
any Lien (other than pursuant to the Loan Documents) upon any of the property or
assets any such party pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, operating agreement or other agreement or instrument to
which Borrower or any other Borrower Party is a party or by which any of
property or assets of Borrower or any other Borrower Party is subject, nor will
such action result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over Borrower or any other Borrower Party or any properties or
assets of Borrower or any other Borrower Party, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by Borrower or any other Borrower Party of
this Agreement or any other Loan Documents has been obtained and is in full
force and effect.
Section 7.16 Title.
(1) Borrower is the record and beneficial owner of, and has good and marketable
title to, the Collateral, free and clear of all Liens whatsoever. The Pledge
Agreement, together with the UCC financing statements relating to the Collateral
when properly filed in the appropriate records, will create a valid, perfected
first priority security interests in and to the Collateral, all in accordance
with the terms thereof for which a Lien can be perfected by filing a UCC
financing statement. For so long as the Lien of the Pledge Agreement is
outstanding, Borrower shall forever warrant, defend and preserve such title and
the validity and priority of the Lien of the Pledge Agreement and shall forever
warrant and defend such title, validity and priority to Lender against the
claims of all persons whomsoever.
(2) Mortgage Borrower has good, marketable and insurable title to the Project,
free and clear of all Liens whatsoever, except for the Permitted Encumbrances
and such other Liens as are permitted pursuant to the Loan Documents. The
Mortgage and any UCC financing statements filed in connection therewith created
(1) a valid and perfected Lien on the Project, subject only to Permitted
Encumbrances and (2) valid and perfected security interests in and to, and
collateral assignments of, all personality (including the leases), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents. To Borrower’s knowledge, there are no claims for payment for
work, labor or materials affecting the Project which are or may become a Lien
prior to, or of equal priority with, the Liens created by the Loan Documents or
the Mortgage Loan Documents. None of the Permitted Encumbrances, individually or
in the aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage and the Mortgage Loan Agreement,
materially and adversely affect the value of the Project, impair the use or
operations of the Project or impair Borrower’s ability to pay its obligations in
a timely manner.

 

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Section 7.17 Flood Zone. Project is located in an area identified by the
Secretary of Housing and Urban Development or any successor thereto as an area
having special flood hazards pursuant to the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Act of 1994, as amended, or any successor law.
Section 7.18 Insurance. Borrower has obtained and has delivered to the
Administrative Agent certificates of insurance or certified copies of all of the
insurance policies for the Project reflecting the insurance coverages, amounts
and other insurance requirements set forth in this Agreement. No claims have
been made under any such policy, and no Person, including Borrower and Mortgage
Borrower, has done, by act or omission, anything which would impair the coverage
of any such policy.
Section 7.19 Certificate of Occupancy; Licenses. All Licenses required under
Applicable Law to have been obtained on or before the date hereof have been
obtained and are in full force and effect. Borrower shall also cause Mortgage
Borrower to timely obtain in accordance with Applicable Law all Licenses
required to be obtained subsequent to the date hereof, and to keep and maintain
all Licenses in full force and effect as required by Applicable Law.
Section 7.20 Physical Condition. As of the date hereof (except with respect to
the work necessary in order to achieve Construction Completion), and thereafter
upon Construction Completion, the Project, including, without limitation, all
buildings, improvements, parking facilities, sidewalks, storm drainage systems,
roofs, plumbing systems, HVAC systems, fire protection systems, electrical
systems, equipment, elevators, exterior sidings and doors, landscaping,
irrigation systems and all structural components, shall be in good condition,
order and repair in all material respects. To Borrower’s knowledge, there exists
no structural or other material defects or damages in the Project, whether
latent or otherwise, and neither Borrower nor Mortgage Borrower has received
written notice from any insurance company or bonding company of any defects or
inadequacies in the Project, or any part thereof, which would adversely affect
the insurability of the same or cause the imposition of extraordinary premiums
or charges thereon or of any termination or threatened termination of any policy
of insurance or bond.
Section 7.21 Boundaries. Except as disclosed on the Survey, all of the
Improvements lie wholly within the boundaries and building restriction lines of
the Project, and no improvements on adjoining properties encroach upon the
Project, and no Improvements encroach upon or violate any easements or other
encumbrances upon the Project, so as to materially adversely affect the value or
marketability of the Project, except those which are insured against by title
insurance.

 

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Section 7.22 Material Agreements.
(1) Borrower has delivered or has caused Mortgage Borrower to deliver to the
Administrative Agent a true, correct and complete copy of the Project Management
Agreement, and such agreement has not been modified, supplemented or terminated
in any way and remains in full force and effect. The Project Management
Agreement is the only project management agreement in existence with respect to
the subject matter thereof. Neither party to such agreement is in default under
such agreement and the Project Manager has no defense, offset right or other
right to withhold performance under or terminate such agreement.
(2) Borrower has delivered or has caused Mortgage Borrower to deliver to the
Administrative Agent a true, correct and complete copy of the Hotel Management
Agreement, and such agreement has not been modified, supplemented or terminated
in any way and remains in full force and effect. The Hotel Management Agreement
is the only hotel management agreement in existence with respect to the
operation or management of the hotel to be opened at the Project. Neither party
to such agreement is in default under such agreement and the Hotel Manager has
no defense, offset right or other right to withhold performance under or
terminate such agreement.
(3) Borrower has delivered or has caused Mortgage Borrower to deliver to the
Administrative Agent a true, correct and complete copy of the Technical Services
Agreement, and such agreement has not been modified, supplemented or terminated
in any way and remains in full force and effect. The Technical Services
Agreement is the only technical services agreement in existence with respect to
the Project. Neither party to such agreement is in default under such agreement
and Hotel Manager has no defense, offset right or other right to withhold
performance under or terminate such agreement.
(4) Borrower has delivered or has caused Mortgage Borrower to deliver to the
Administrative Agent a true, correct and complete copy of the Construction
Management Contract, and such agreement has not been modified, supplemented or
terminated in any way and remains in full force and effect. The Construction
Management Contract is the only construction management or general contractor
contract in existence with respect to the Building Conversion. Neither party to
such agreement is in default under such agreement and the Construction Manager
has no defense, offset right or other right to withhold performance under or
terminate such agreement
(5) Borrower has delivered or has caused Mortgage Borrower to deliver to the
Administrative Agent a true, correct and complete copy of the Forward Purchase
Contract, and such agreement has not been modified, supplemented or terminated
in any way and remains in full force and effect. None of the parties to such
agreement are in default under such agreement and none of the parties to such
agreement has any defense, offset right or other right to withhold performance
under or terminate such agreement.

 

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Section 7.23 Project Budget. Schedule 7.23 hereto sets forth a true, correct and
complete copy of the Project Budget. The amounts and allocations set forth in
the Project Budget, as it may be amended in accordance with the terms of this
Agreement, present a full, complete and good faith representation of all costs,
expenses and fees required to achieve Construction Completion, to pay
pre-opening costs associated with the Hotel Opening, to pay interest on the
Loans and Operating Expenses through the Hotel Opening, and to pay costs in
connection with the marketing and sale of the Units.1 Borrower is unaware of any
other such costs, expenses or fees which are material and are not included
within the Project Budget.
Section 7.24 Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable legal requirements currently in effect in
connection with the transfer of the Collateral to Borrower or any transfer of a
controlling interest in Borrower have been paid. All mortgage, mortgage
recording, stamp, intangible or other similar tax required to be paid by any
Person under applicable legal requirements currently in effect in connection
with the execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
Pledge Agreement and the UCC financing Statements, have been paid and, under
current legal requirements, the Pledge Agreement is enforceable in accordance
with its terms by the Administrative Agent or any subsequent holder thereof (on
behalf of the Lenders), subject to applicable bankruptcy, insolvency, or similar
laws generally affecting the enforcement of creditors’ rights.
Section 7.25 Investment Company Act. Neither Borrower nor Mortgage Borrower is
(1) an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended;
(2) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or
(3) subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
Section 7.26 Patriot Act; Foreign Assets Control Regulations. Neither the
execution and delivery of this Agreement, the Notes and the other Loan Documents
by Borrower or any other Borrower Party nor the use of the proceeds of the
Loans, will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or the Anti-Terrorism Order or any
enabling legislation or executive order relating to any of the same. Without
limiting the generality of the foregoing, neither Borrower, any direct or
indirect owner of any interest in Borrower (a) is listed on any Government
Lists, (b) is a person who has been determined by competent authority to be
subject to the prohibitions contained in Anti-Terrorism Order or any other
similar prohibitions contained in the rules and regulations of OFAC or in any
enabling legislation or other Executive Order of the President of the United
States in respect thereof, (c) has been previously indicted for or convicted of
any felony involving a crime or crimes of moral turpitude or for any Patriot Act
Offenses, (d) is currently under investigation by any governmental authority for
alleged criminal activity, or (e) has a reputation in the community for criminal
or unethical behavior.
 

      1   Eurohypo to confirm.

 

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Section 7.27 Organizational Structure.
(1) Borrower has heretofore delivered to the Administrative Agent a true and
complete copy of the Organizational Documents of each Borrower Party. Borrower
is the only member of Mortgage Borrower and manages Mortgage Borrower. The only
members of Borrower are MMI and Sanctuary Avenue. The Borrower is managed by
both of its members (subject to the rights of the Independent Manager). There
are no outstanding equity rights with respect to Borrower.
(2) The only member of MMI on the date hereof is Morgan LLC. The only member of
Sanctuary Avenue on the date hereof is Sanctuary Holdings. MMI and Sanctuary
Avenue are managed by their respective members. There are no outstanding equity
rights with respect to MMI or Sanctuary Avenue.
(3) Schedule 7.27 contains a true and accurate chart reflecting the ownership of
all of the direct and indirect equity interests in Borrower, Mortgage Borrower
and Junior Mezzanine Borrower, including the percentage of ownership interest of
the Persons shown thereon.
Section 7.28 Property Specific Representations.
(1) Neither the Project nor any part thereof is now damaged or injured as a
result of any fire, explosion, accident, flood or other casualty.
(2) The Project is zoned RM-3, which permits the current operation of the
Project as a 335-unit apartment facility with 177 parking spaces as a legal
non-conforming use; and does not restrict conversion of the Project to a
335-unit hotel condominium project with adequate space at the Project for 177
parking spaces and 29 or more boat slips.
(3) There are currently 177 parking spaces located on the Project. Without
limiting the representations of Borrower set forth in Sections 7.6 and 7.19, the
Project complies with all applicable zoning and land use laws, rules,
regulations as a legal nonconforming use and complies with all material
Licenses.
(4) The repair and replacement of the exterior windows and sliding doors at the
Project as required to be accomplished by Mortgage Borrower under the Original
Mortgage Loan Agreement has been satisfactorily completed by Mortgage Borrower.
(5) The repairs to the Project as set forth on Schedule 9.24(a) of the Original
Mortgage Loan Agreement as required to be completed by Mortgage Borrower under
the Original Mortgage Loan Agreement have been satisfactorily completed by
Mortgage Borrower.
(6) The Building Conversion has been effectuated through the Amendment Closing
Date, in compliance with Applicable Law, including the Condominium Act.
(7) To Borrower’s knowledge, the City of Miami Beach maintains and will continue
to maintain all the roadways providing access to and from the Project,
including, but not limited to, access from West Avenue.

 

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Section 7.29 Affiliates. Borrower does not own any equity interests in any other
Person other than Mortgage Borrower.
Section 7.30 List of Mortgage Loan Documents. There are no Mortgage Loan
Documents other than those set forth on Schedule 7.30 attached hereto. Borrower
has or has caused to be delivered to Administrative Agent true, complete and
correct copies of all Mortgage Loan Documents, and none of the Mortgage Loan
Documents has been amended, modified or terminated as of the date thereof.
Section 7.31 Mortgage Loan Event of Default. No Mortgage Loan Event of Default
or an event or circumstance has occurred which with the giving of notice or the
passage of time, or both, would constitute a Mortgage Loan Event of Default
exists as of the date hereof.
ARTICLE 8
FINANCIAL REPORTING
Section 8.1 Financial Statements.
(1) Monthly Reports. Within twenty (20) days after the end of each calendar
month, Borrower shall furnish to the Administrative Agent current (as of the
calendar month just ended) balance sheets and detailed operating statements for
Borrower and Mortgage Borrower (showing monthly activity and year to date)
stating Operating Revenues, Operating Expenses, operating income, and Net
Operating Cash Flow for the calendar month just ended, a general ledger, an
updated rent roll and, as requested by the Administrative Agent, copies of bank
statements and bank reconciliations and other documentation supporting the
information disclosed in the most recent financial statements.
(2) Quarterly Reports. Within forty-five (45) days after the end of each
calendar quarter, Borrower shall furnish to Administrative Agent detailed
operating statements for Borrower and Mortgage Borrower (showing quarterly
activity and year to date) stating Operating Revenues, Operating Expenses, Net
Operating Cash Flow, operating income, and capital improvements for the calendar
quarter just ended, and balance sheets for such quarter for Borrower and
Mortgage Borrower. Such quarterly statements, which shall be prepared on an
accrual basis, shall be accompanied by (i) a current rent roll for the Project
and after the Building Conversion Date, a list of all sales of Units, (ii) a
statement of the balance in each of the Interest Reserve Fund, and (iii) a
certificate executed by an Authorized Officer of Borrower stating that each such
quarterly statement presents fairly the financial condition and the results of
operations of Borrower, Mortgage Borrower and the Project.

 

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(3) Annual Reports. Within one hundred and twenty (120) days after the end of
each fiscal year of Borrower and Mortgage Borrower, Borrower will furnish to the
Administrative Agent complete copies of Borrower’s, Mortgage Borrower’s and
Guarantors’ annual financial statements which shall be substantially in the form
provided the Administrative Agent in connection with the closing of the Loan
and, in the case of Borrower’s and Mortgage Borrower’s financial statements,
shall have been prepared in accordance with general accepted accounting
principles (consistently applied) and certified by an independent certified
public accountant reasonably acceptable to the Administrative Agent. Such
financial statements shall contain balance sheets, and in the case of Borrower
and Mortgage Borrower, a detailed operating statement stating Operating
Revenues, Operating Expenses, operating income and Net Operating Cash Flow. All
annual financial statements shall be accompanied by (i) a certificate executed
by an Authorized Officer Borrower, in the case of Borrower, by an Authorized
Officer of Morgans LLC, in the case of Morgans LLC, and by Galbut, in the case
of Galbut, stating that each such annual financial statement presents fairly the
financial condition and the results of operations of Borrower, Mortgage Borrower
and the Project, in the case Borrower and Mortgage Borrower, and the Guarantors,
in the case of Guarantors. The annual financial statements of Borrower and
Mortgage Borrower required to be delivered pursuant to this Section 8.1(3) may
be consolidated with those of other entities owned by Morgans LLC or Sanctuary
Management, provided that such financial statements contain notes clearly
identifying each item on such financial statements which is attributable to the
Borrower, Mortgage Borrower and the Project.
(4) Certification; Supporting Documentation. Each such financial statement shall
be in scope and detail satisfactory to the Administrative Agent and certified by
an Authorized Officer of Borrower.
(5) Building Conversion Reporting Requirements. Borrower shall, or shall cause
Mortgage Borrower to, furnish to the Administrative Agent:
(a) by the twentieth (20th) day of each month, monthly reports certifying the
Units sold to date, the number of Qualified Purchase Contracts outstanding as of
the last day of the preceding month, the names and addresses of the purchasers
thereunder, the Contract Prices for each Unit, the Units under contract, the
aggregate amount deposited into a third party escrow pursuant to each such
Qualified Purchase Contract, whether there are any defaults by either Mortgage
Borrower or any purchaser under any such Qualified Purchase Contract and whether
any event has occurred or is likely to occur which would cause a default to
occur or give the purchaser a right to terminate or rescind its obligations
thereunder; the number of sales closed in the number and designation of the
Units conveyed; the price paid for each such Unit; and the reports and matters
set forth at (c) below;
(b) within twenty (20) days of the last day of each calendar quarter (and at
such other times as the Administrative Agent may reasonably request), report of
the escrow agent setting forth all deposits in, withdrawals from, and the
current balance of, the “Condominium Escrow” described in the Mortgage Loan
Agreement; and

 

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(c) a copy of each material report, statement, certification, claim, data,
notice or other communication received, made or delivered by Mortgage Borrower
or a purchaser under a Qualified Purchase Contract which relates to events that
may materially negatively affect Mortgage Borrower’s or such purchaser’s
obligations and/or performance under the terms of a Qualified Purchase Contract,
or any Borrower Party’s obligations and/or performance under the Loan Documents
or the Mortgage Loan Documents, including, without limitation, the imposition of
any penalties or damages, the exercise of any termination or cancellation
rights, the filing of any dispute or litigation or the failure of Mortgage
Borrower or such purchaser to comply with any of the requirements of a Qualified
Purchase Contract. Any of the foregoing which affects the Qualified Purchase
Contracts or a material portion thereof shall be supplied by Borrower to the
Administrative Agent within five (5) days of occurrence or receipt.
(d) a copy of all budgets and accounting reports recorded and to be filed with
the Division of Florida Land Sales, Condominiums and Mobile Homes in connection
with the Project.
Section 8.2 Accounting Principles. All financial statements shall be prepared
substantially in the form of the financial statements provided to the
Administrative Agent and shall otherwise be reasonably acceptable to the
Administrative Agent.
Section 8.3 Other Information. Borrower shall and shall cause Mortgage Borrower
to deliver to the Administrative Agent such additional information as
Administrative Agent may reasonably request regarding Borrower, Mortgage
Borrower, their subsidiaries, their business, any Borrower Party, the Collateral
and the Project within thirty (30) days after the Administrative Agent’s request
therefor.
Section 8.4 Annual Operating Budget.
(1) At least thirty (30) days prior to the commencement of each calendar year,
Borrower shall cause Mortgage Borrower to provide to the Administrative Agent
its proposed annual operating and capital improvements budget for such fiscal
year for review and approval by the Administrative Agent, which approval shall
not be unreasonably withheld (as so approved for any fiscal year, the “Annual
Operating Budget”).
(2) Borrower shall promptly advise the Administrative Agent and the Lenders of
any proposed changes to the Project Budget to be made from and after the date
hereof. Except to the extent expressly provided in Section 14.1(2), any changes
to the Project Budget shall be subject to the review and approval of the
Administrative Agent and the Lenders.
Section 8.5 Audits. The Administrative Agent shall have the right to choose and
appoint a certified public accountant to perform financial audits as it deems
necessary. The costs of such audits shall be paid by Borrower; provided,
however, that so long no Event of Default exists, Borrower shall not be required
to pay the cost of more than one such audit in any Loan Year. Borrower shall
permit the Administrative Agent to examine such records, books and papers of
Borrower and Mortgage Borrower which reflect upon its financial condition and
the income and expense relative to the Project.
Section 8.6 Mortgage Borrower Financial Statements. Borrower will furnish, or
cause Mortgage Borrower to furnish, to Administrative Agent a copy of the
financial statements and all of the materials Mortgage Borrower is required to
provide Mortgage Lender under the Mortgage Loan Agreement within the time
periods required under the Mortgage Loan Agreement.

 

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Section 8.7 Notice of Default. Promptly after Borrower, Mortgage Borrower or any
other Borrower Party obtains actual knowledge thereof, Borrower shall give
Administrative Agent notice of the occurrence of any “Potential Default” or
“Event of Default” under the Mortgage Loan Documents. Each notice delivered
pursuant to this Section 8.7 shall be accompanied by a certificate of an
authorized officer of Borrower setting forth the details of the occurrence
referred to therein and describing the actions Borrower proposes to take with
respect thereto.
Section 8.8 Access. The Administrative Agent, the Lenders and any of their
respective officers, employees and/or agents shall have the right, exercisable
as frequently as the Administrative Agent reasonably determines to be
appropriate, during normal business hours (or at such other times as may
reasonably be requested by the Administrative Agent), to inspect the Project and
(on twenty-four (24) hours prior notice, which may be oral) to inspect, audit
and make extracts from all of Borrower’s or Mortgage Borrower’s records, files
and books of account. Borrower shall or shall cause Mortgage Borrower to deliver
any document or instrument reasonably necessary for the Administrative Agent, as
the Administrative Agent may request, to obtain records from any service bureau
maintaining records for Borrower or Mortgage Borrower, and shall maintain
duplicate records or support documentation on media, including, without
limitation, computer tapes and discs owned by Borrower or Mortgage Borrower
relating to the use or operation of the Project. At the Administrative Agent’s
request, Borrower shall or shall cause Mortgage Borrower to instruct its banking
and other financial institutions to make available to the Administrative Agent
such information and records concerning the Project as the Administrative Agent
may reasonably request. Without limiting the generality of the foregoing,
Administrative Agent (on behalf of the Lenders) reserves the right to employ a
construction consultant (the “Construction Consultant”) and any other
consultants necessary, in Administrative Agent’s reasonable judgment, to, review
requests for disbursements from the Construction Completion Fund (as defined in
the Mortgage Loan Agreement) and inspect all construction and the periodic
progress of the same, the reasonable cost therefor to be borne by Borrower as a
loan expense. Borrower shall make or cause Mortgage Borrower to make available
to Administrative Agent and the Construction Consultant on reasonable notice
during business hours, all documents and other information (including, without
limitation, receipts, invoices, lien waivers and other supporting documentation
to substantiate the costs to be paid with the proceeds of any request for loan
advance) which any contractor or other Person entitled to payment for
construction work is required to deliver to Borrower and shall use its best
efforts to obtain any further documents or information reasonably requested by
Administrative Agent or the Construction Consultant in connection with any Loan
or the administration of this Agreement. Borrower acknowledges and agrees that
the Construction Consultant shall have no responsibilities or duties to Borrower
or Mortgage Borrower, and shall be employed solely for the benefit of
Administrative Agent and the Lenders. No default of Borrower or Mortgage
Borrower will be waived by an inspection by Administrative Agent or the
Construction Consultant. In no event will any inspection by Administrative Agent
or the Construction Consultant be a representation that there has been or will
be compliance with the Plans and Specifications or that the construction work is
free from defective materials or workmanship. Any and all provisions of this
Agreement in respect of the Construction Consultant shall be enforceable solely
by, and at the option of, Administrative Agent, and Borrower shall not be a
third-party beneficiary thereof. Any and all reports, advice or other
information provided by the Construction Consultant to Administrative Agent
and/or the Lenders or otherwise produced by or in the possession of the
Construction Consultant shall be confidential and Borrower shall have no right
to obtain or review same.

 

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ARTICLE 9
COVENANTS
Borrower covenants and agrees with the Administrative Agent and the Lenders as
follows:
Section 9.1 Due on Sale and Encumbrance; Transfers of Interests. Without the
prior written consent of the Administrative Agent and the Lenders (to the extent
required under Section 12.2):
(1) Neither Borrower nor any other Person having an ownership or beneficial
interest in Borrower or Mortgage Borrower shall (a) directly or indirectly sell,
transfer, convey, mortgage, pledge, assign, encumber or permit any Lien on the
Project, (b) encumber or permit any Lien on the Collateral or any part thereof
(including any partnership, membership or any other ownership interest in
Mortgage Borrower), whether voluntarily, involuntarily, by operation of law or
otherwise; or (c) enter into any easement or other agreement granting rights in
or restricting the use or development of the Project or the Collateral;
(2) No new member shall be admitted to or created in Borrower or Mortgage
Borrower (nor shall any existing member withdraw from Borrower or Mortgage
Borrower), and no change in Borrower’s or Mortgage Borrower’s Organizational
Documents shall be effected; and
(3) Borrower shall not allow any Change of Control to occur, or permit any
transfer to occur (whether of equity interests or through any pledge or
encumbrance of equity interests, or of the economic or other benefits therefrom,
whether voluntary, involuntary, by operation of law or otherwise), if any such
transfer would result in a Change of Control.
As used in this Section 9.1, “transfer” shall include the sale, transfer,
conveyance, mortgage, pledge, assignment of any legal or beneficial ownership.
Without limiting the foregoing provisions of this Section 9.1, any transfer of a
direct or indirect ownership interest in Borrower or Mortgage Borrower shall be
further subject to (w) Borrower providing not less than ten (10) Business Days’
written notice to Administrative Agent of any such transfer, (x) no Potential
Default or Event of Default then existing, and (y) payment to the Administrative
Agent on behalf of the Lenders of all costs and expenses incurred by the
Administrative Agent or any Lenders in connection with such transfer.

 

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Section 9.2 Taxes; Charges. Borrower shall or shall cause Mortgage Borrower to
pay before any fine, penalty, interest or cost may be added thereto, and shall
not enter into any agreement to defer, any real estate taxes and assessments,
franchise taxes and charges, and other governmental charges that may become a
Lien upon the Project or become payable during the term of the Loans
(collectively, the “Taxes”), and will promptly furnish the Administrative Agent
with evidence of such payment; provided, however, Mortgage Borrower’s compliance
with Section 4.1 of the Mortgage Loan Agreement relating to impounds for taxes
and assessments shall, with respect to payment of such taxes and assessments, be
deemed compliance with this Section 9.2. Borrower shall not and shall not permit
Mortgage Borrower to suffer or permit the joint assessment of the Project with
any other real property constituting a separate tax lot or with any other real
or personal property. Borrower shall or shall cause Mortgage Borrower to pay
when due all claims and demands of mechanics, materialmen, laborers and others
which, if unpaid, might result in a Lien on the Project; however, Borrower may
permit Mortgage Borrower to contest the validity of such claims and demands so
long as (1) Borrower notifies the Administrative Agent that Mortgage Borrower
intends to contest such claim or demand, (2) Borrower or Mortgage Borrower
provides the Administrative Agent with an indemnity, bond or other security
satisfactory to the Administrative Agent assuring the discharge of Borrower’s
obligations for such claims and demands, including interest and penalties, and
(3) Mortgage Borrower is diligently contesting the same by appropriate legal
proceedings in good faith and at its own expense and concludes such contest
prior to the tenth (10th) day preceding the earlier to occur of the Maturity
Date or the date on which the Project is scheduled to be sold for non payment.
Section 9.3 Control; Management.
(1) Without limiting the provisions of Section 9.1, there shall be no change in
the day-to-day management and control of Borrower, Mortgage Borrower or any
other Borrower Party without the prior written consent of the Administrative
Agent.
(2) Borrower shall cause Mortgage Borrower to (i) perform and observe in all
material respects all of its covenants and agreements contained in the Project
Management Agreement to which it is a party; (ii) take all reasonable and
necessary action to prevent the termination of the Project Management Agreement
in accordance with the terms thereof or otherwise; (iii) enforce each material
covenant or obligation of the Project Management Agreement in accordance with
its terms; (iv) promptly give the Administrative Agent copies of any default or
other material notices given by or on behalf of Mortgage Borrower or received by
or on behalf of Mortgage Borrower from the Project Manager; and (v) take all
such action to achieve the purposes described in clauses (i), (ii) and (iii) of
this Section 9.3(2) as may from time to time be reasonably requested by the
Administrative Agent; provided, however, that Mortgage Borrower shall be
permitted, upon the Administrative Agent’s reasonable approval, to contest the
validity or applicability of any requirement under the Project Management
Agreement.
(3) Borrower shall cause Mortgage Borrower to not, without the Administrative
Agent’s prior consent, (i) take any action to (A) cancel or terminate the
Project Management Agreement, (B) replace the Project Manager or (C) appoint a
new hotel manager; (ii) sell, assign, pledge, transfer, mortgage, hypothecate or
otherwise dispose of (by operation of law or otherwise) or encumber any part of
its interest in the Project Management Agreement; (iii) waive any material
default under or breach of any material provisions of the Project Management
Agreement or waive, fail to enforce, forgive or release any material right,
interest or entitlement, howsoever arising, under or in respect of any material
provisions of the Project Management Agreement or vary or agree to the variation
in any material way of any material provisions of the Project Management
Agreement or of the performance of the Project Manager under the Project
Management Agreement; or (iv) petition, request or take any other legal or
administrative action that seeks, or may reasonably be expected, to rescind,
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(4) Any change in day-to-day management and control of the Project Manager shall
be cause for Administrative Agent to re-approve such Project Manager and Project
Management Agreement. If at any time the Administrative Agent consents to the
appointment of a new hotel manager, such new manager and Mortgage Borrower
shall, as a condition of Administrative Agent’s consent, execute a Project
Manager’s Consent and Subordination of Management Agreement in the form then
used by Administrative Agent. Each Project Manager shall hold and maintain all
necessary licenses, certifications and permits required by law to carry on its
duties under the Project Management Agreement. Borrower shall cause Mortgage
Borrower to fully perform all of its covenants, agreements and obligations under
the Management Agreement.
Section 9.4 Operation; Maintenance; Inspection. Borrower shall and shall cause
Mortgage Borrower to observe and comply with all Applicable Laws, including
those applicable to the ownership, use and operation of the Project and the
Collateral. Borrower shall cause Mortgage Borrower to maintain the Project in
good condition and promptly repair any damage or casualty. Borrower shall cause
Mortgage Borrower to permit the Administrative Agent and the Lenders and their
respective agents, representatives and employees, upon reasonable prior notice
to Borrower, to inspect the Project and conduct such environmental and
engineering studies as the Administrative Agent may reasonably require, provided
such inspections and studies do not materially interfere with the use and
operation of the Project.
Section 9.5 Taxes on Security. Borrower shall pay all taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the
Notes or the Liens created or secured by the Loan Documents, other than income,
franchise and doing business taxes imposed on the Administrative Agent or any
Lender. If there shall be enacted any law (1) deducting the Loans from the value
of the Collateral for the purpose of taxation, (2) affecting any Lien on the
Collateral, or (3) changing existing laws of taxation of pledges secured by
equity interests, or changing the manner of collecting any such taxes, Borrower
shall promptly pay to the Administrative Agent, on demand, all taxes, costs and
charges for which the Administrative Agent or any Lender is or may be liable as
a result thereof; however, if such payment would be prohibited by law or would
render the Loans usurious, then instead of collecting such payment, the
Administrative Agent may (and on the request of the Majority Lenders shall)
declare all amounts owing under the Loan Documents to be immediately due and
payable.
Section 9.6 Legal Existence; Name, Etc. Borrower shall, and shall cause Mortgage
Borrower to, preserve and keep in full force and effect its existence as a
Single Purpose Entity, and each of Borrower and Mortgage Borrower shall preserve
and keep in full force and effect its entity status, franchises, rights and
privileges under the laws of the state of its formation, and all qualifications,
licenses and permits applicable to the ownership, use and operation of the
Project. In the event there is a conflict between the Single Purpose Entity
requirements contained in this Agreement and the terms of the Organizational
Documents of Borrower or Mortgage Borrower, the Single Purpose Entity
requirements contained in this Agreement shall control. Neither Borrower nor
Mortgage Borrower shall wind up, liquidate, dissolve, reorganize, merge, or
consolidate with or into, or convey,

 

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sell, assign, transfer, lease, or otherwise dispose of all or substantially all
of its assets, or acquire all or substantially all of the assets of the business
of any Person, or permit any subsidiary of Borrower to do so. Each of Borrower
and Mortgage Borrower shall conduct business only in its own name and shall not
change its name, identity, or organizational structure, or the location of its
chief executive office or principal place of business unless Borrower (a) shall
have obtained the prior written consent of the Administrative Agent to such
change, and (b) shall have taken all actions necessary or requested by the
Administrative Agent to file or amend any financing statement or continuation
statement to assure perfection and continuation of perfection of security
interests under the Loan Documents. Borrower shall not enter into any new line
of business other than the ownership of the Collateral, or make any change in
the scope or nature of its business purposes, or undertake or participate in
activities other than the continuance of its present business.
Section 9.7 Affiliate Transactions.
(1) In General. Except as provided in this Section 9.7, Borrower shall not and
shall not permit Mortgage Borrower to engage in any other transaction affecting
the Project and/or the Collateral with an Affiliate of Borrower or Mortgage
Borrower without the Administrative Agent’s prior written consent except on
arm’s length, market terms. Without limiting the foregoing, all transactions
among Borrower and/or Mortgage Borrower and their Affiliates shall be at arms
length and shall be for a price and terms that are no greater than market terms
for similar services.
(2) Sales Commission and Franchise Fee. With respect to the sale of a Unit,
Borrower may permit a payment of up to a seven percent (7%) sale commission to
Mortgage Borrower or an Affiliate of Mortgage Borrower upon the sale of such
Unit. Borrower may permit Mortgage Borrower to pay the Franchise Fee to Morgans
Hotel Group Management LLC.
(3) Junior Mezzanine Loan. Junior Mezzanine Borrower is permitted to obtain the
Junior Mezzanine Loan, subject to the terms of the Junior Loan Intercreditor
Agreement.
(4) Other Arrangements. The Administrative Agent acknowledges that Borrower and
Mortgage Borrower have entered into the following arrangements with Affiliates
of Borrower and Mortgage Borrower and that are hereby approved by the
Administrative Agent under the following conditions:
(a) Mortgage Borrower may use a title insurance agency that is an Affiliate of
Project Manager and an agent for a national title insurance company; and
(b) An Affiliate of Mortgage Borrower or Project Manager may serve as a mortgage
broker or mortgage originator for the placement of loans to purchasers of Units,
provided that all fees and other amounts payable in connection with such
services shall be paid by the purchasers of such Units or credited by Mortgage
Borrower to the purchasers of such Units as Special Credits and paid by Mortgage
Borrower.
Section 9.8 Limitation on Other Debt. Neither Borrower nor Mortgage Borrower
shall, without the prior written consent of the Administrative Agent and the
Majority Lenders (which consent may be withheld in the Administrative Agent’s
sole and absolute discretion), incur any Debt other as permitted under
subsection (o) of the definition of Single Purpose Entity.

 

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Section 9.9 Further Assurances. Borrower shall promptly (1) cure any defects in
the execution and delivery of the Loan Documents, and (2) execute and deliver,
or cause to be executed and delivered, all such other documents, agreements and
instruments as the Administrative Agent may reasonably request to further
evidence and more fully describe the collateral for the Loans, to correct any
omissions in the Loan Documents, to perfect, protect or preserve any Liens
created under any of the Loan Documents, or to make any recordings, file any
notices, or obtain any consents, as may be necessary or appropriate in
connection therewith.
Section 9.10 Estoppel Certificates. Borrower, within ten (10) Business Days
after request, shall furnish to the Administrative Agent a written statement,
duly acknowledged, setting forth or confirming, as applicable, the amount due on
the Loans, the terms of payment of the Loans, the date to which interest has
been paid, whether any offsets or defenses exist against the Loans and, if any
are alleged to exist, the nature thereof in detail, and such other matters as
the Administrative Agent reasonably may request.
Section 9.11 Notice of Certain Events. Borrower shall and shall cause Mortgage
Borrower to promptly notify the Administrative Agent of (1) any Potential
Default or Event of Default, or Mortgage Loan Event of Default, together with a
detailed statement of the steps being taken to cure such Potential Default or
Event of Default; (2) any notice of default received by Borrower, Mortgage
Borrower or any Borrower Party under other obligations relating to the Project,
the Collateral or otherwise material to Borrower’s or Mortgage Borrower’s
business; and (3) any threatened or pending legal, judicial or regulatory
proceedings, including any dispute between Borrower or Mortgage Borrower and any
governmental authority, affecting Borrower, Mortgage Borrower, the Project, or
the Collateral.
Section 9.12 Indemnification. Borrower hereby agrees to indemnify, defend,
protect and hold harmless the Administrative Agent, each Lender and their
respective shareholders, officers, employees, attorneys, agents, representatives
and affiliates (each, an “Indemnified Party”) from and against any and all
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever,
including the reasonable fees and actual expenses of each Indemnified Party’s
counsel, which may be imposed upon, asserted against or incurred by any of them
relating to or arising out of third-party claims relating to (1) the Project or
the Collateral or (2) any of the Loan Documents or the transactions contemplated
thereby, including, without limitation, (a) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about any of the
Project or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways, (b) any inspection, review
or testing of or with respect to the Project, (c) any investigative,
administrative, mediation, arbitration, or judicial proceeding, whether or not
the Administrative Agent or any Lender is designated a party thereto, commenced
or threatened at any time (including after the repayment of the Loans) in any
way related to the execution, delivery or performance of any Loan Document or to
the Project, (d) any proceeding instituted by any Person claiming a Lien, and
(e) any brokerage commissions or finder’s fees claimed by any broker or other
party in connection with the Loans, the Project, or any of the transactions
contemplated in the Loan Documents, including those arising from the joint,
concurrent, or comparative negligence of the Administrative Agent or any Lender,
except to the extent any of the foregoing is caused by the Administrative
Agent’s or any Lender’s gross negligence or willful misconduct, in which case
the party to whom the gross negligence or willful misconduct is attributable
(but not any other party) shall not be entitled to the indemnification provided
for hereunder to the extent of such gross negligence or willful misconduct.

 

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Section 9.13 Size of Units. Borrower agrees that the net sellable area as set
forth in the Unit Release Schedule shall constitute and be deemed to be the
square footage for each Unit and shall be used for all purposes under the Loan
Documents.
Section 9.14 Minimum Sales Prices. Borrower shall not permit and shall not
permit Mortgage Borrower to permit the sale of any Unit at a Purchase Price less
than the applicable Minimum Sales Price for such Unit.
Section 9.15 Hedge Agreements.
(1) The Borrower shall at all times maintain in full force and effect a Hedge
Agreement satisfactory to the Administrative Agent in its sole and absolute
discretion with an Acceptable Counterparty, which shall be effective on or
before the Amendment Closing Date, and shall be coterminous with the Loan.
(2) Borrower shall collaterally assign to Administrative Agent pursuant to the
Hedge Agreement Pledge all of its right, title and interest to receive any and
all payments under the Hedge Agreement or any replacement Hedge Agreement, as
additional security for the Loan Agreement, and shall deliver to Administrative
Agent counterparts of such Hedge Agreement Pledge executed by the Borrower and
by the Acceptable Counterparty and notify the Acceptable Counterparty of such
collateral assignment (either in such Hedge Agreement or by separate
instrument).
(3) Acceptable Counterparty must enter into a written agreement with the
Administrative Agent (i) whereby such Acceptable Counterparty acknowledges the
collateral assignment of such Hedge Agreement to Administrative Agent as
additional security for the Loan pursuant to the Hedge Agreement Pledge,
(ii) whereby such Acceptable Counterparty agrees that Administrative Agent shall
have the ability to cure any defaults by the Acceptable Counterparty under the
Hedge Agreement and to maintain the Hedge Agreement in full force and effect
after the occurrence of any default by the Borrower thereunder, (iii) which
provides that in no event shall the Administrative Agent be obligated to perform
any of the Borrower’s obligations under the Hedge Agreement, and (iv) which is
otherwise in form and substance acceptable to the Administrative Agent in its
sole and absolute discretion.
(4) If the provider of the Hedge Agreement or any replacement Hedge Agreement
ceases to be an Acceptable Counterparty, for any reason (including in the event
of any downgrade, withdrawal or qualification of the rating of the Acceptable
Counterparty below “A” by S&P), Borrower shall obtain a replacement Hedge
Agreement at Borrower’s sole cost and expense within twenty (20) days of receipt
of notice from Administrative Agent or Borrower’s obtaining knowledge that the
provider is no longer an Acceptable Counterparty.

 

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(5) In the event that Borrower fails to purchase and deliver to Administrative
Agent the Hedge Agreement or any replacement Hedge Agreement as and when
required hereunder, or fails to maintain such agreement in accordance with the
terms and provisions of this Agreement, Administrative Agent may purchase the
Hedge Agreement or any replacement Hedge Agreement, as applicable, and the cost
incurred by Administrative Agent in purchasing the Hedge Agreement or any
replacement Hedge Agreement, as applicable, shall be paid by Borrower to
Administrative Agent with interest thereon at the Default Rate from the date
such cost was incurred by Administrative Agent until such cost is reimbursed by
Borrower to Administrative Agent.
(6) Borrower shall comply with all of its obligations under the terms and
provisions of the Hedge Agreement and any replacement Hedge Agreement. All
amounts paid by the Acceptable Counterparty under any Hedge Agreement to
Borrower or Administrative Agent shall be deposited immediately into the Cash
Management Account. Borrower shall take all actions reasonably requested by
Administrative Agent to enforce Administrative Agent’s rights under the Hedge
Agreement and any replacement Hedge Agreement in the event of a default by the
Acceptable Counterparty and shall not waive, amend or otherwise modify any of
its rights thereunder.
(7) At such time as the Loan is repaid in full, all of Administrative Agent’s
right, title and interest in the Hedge Agreement and any replacement Hedge
Agreement shall terminate and Administrative Agent shall execute and deliver at
Borrower’s sole cost and expense, such documents as may be required to evidence
Administrative Agent’s release of the Hedge Agreement and any replacement Hedge
Agreement and to notify the Acceptable Counterparty of such release.
(8) In connection with any Hedge Agreement, Borrower shall obtain and deliver to
the Administrative Agent an opinion from counsel (which counsel may be in-house
counsel for the Acceptable Counterparty) for the Acceptable Counterparty (in
form reasonably satisfactory to the Administrative Agent and upon which the
Administrative Agent, the Lenders and their respective successors and assigns
may rely) which shall provide, in relevant part, that:
(a) the Acceptable Counterparty is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation or organization and
has the organizational power and authority to execute and deliver, and to
perform its obligations under, the Hedge Agreement;
(b) the execution and delivery of the Hedge Agreement by the Acceptable
Counterparty, and any other agreement which the Acceptable Counterparty has
executed and delivered pursuant thereto, and the performance of its obligations
thereunder have been and remain duly authorized by all necessary action and do
not contravene any provision of its certificate of incorporation or by-laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;
(c) all consents, authorizations and approvals required for the execution and
delivery by the Acceptable Counterparty of the Hedge Agreement, and any other
agreement which the Acceptable Counterparty has executed and delivered pursuant
thereto, and the performance of its obligations thereunder have been obtained
and remain in full force and effect, all conditions thereof have been duly
complied with, and no other action by, and no notice to or filing with any
governmental authority or regulatory body is required for such execution,
delivery or performance; and

 

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(d) the Hedge Agreement, and any other agreement which the Acceptable
Counterparty has executed and delivered pursuant thereto, has been duly executed
and delivered by the Acceptable Counterparty and constitutes the legal, valid
and binding obligation of the Acceptable Counterparty, enforceable against the
Acceptable Counterparty in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
Section 9.16 No Distributions. Except as expressly provided in Section 14.4 of
the Mortgage Loan Agreement, Borrower shall not make any Distributions to any
members of Borrower without the Administrative Agent’s prior consent.
Section 9.17 Condominium Covenants. In addition to the covenants and agreements
made in this Agreement, Borrower and the Administrative Agent further covenant
and agree as follows:
(1) Condominium Obligations. Borrower shall cause Mortgage Borrower to perform
or cause to be performed all of Mortgage Borrower’s obligations and the
obligations of the Association under the Declaration all with respect to any of
the applicable Project’s Constituent Documents and under the Condominium Act.
The “Constituent Documents” are the: (a) the Public Offering Statement; (b) the
Declaration; (c) the articles of incorporation and by-laws of the Association;
and (c) all documents related to the creation, management and operation of the
Project by the Association. Borrower shall cause Mortgage Borrower to promptly
pay when due, all dues and assessments imposed pursuant to the Constituent
Documents.
(2) Hazard Insurance. So long as the Association maintains casualty insurance
through a “master” or “blanket” policy on the Project which satisfies the
requirements of Section 3.1 of the Mortgage Loan Agreement and is otherwise
satisfactory to the Administrative Agent, Borrower’s obligation under Article 3
to cause Mortgage Borrower to maintain such casualty insurance coverage on the
Project shall be satisfied to the extent that the required coverage is provided
by the Association. In the event of an insured casualty to all or a portion of
the Project, insurance proceeds shall be distributed and utilized in the manner
required by the Constituent Documents. In the event of a distribution of hazard
insurance proceeds in lieu of restoration or repair following a loss to the
Project, whether to the unit(s) or to common elements, any proceeds payable to
Borrower or Mortgage Borrower is hereby assigned and shall be paid to the
Administrative Agent for application to the Loans in accordance with Article 3
hereof.
(3) Public Liability Insurance. Borrower shall or shall cause Mortgage Borrower
to take such actions as may be reasonable to insure that the Association
maintains a public liability insurance policy acceptable in form, amount and
extent of coverage to the Administrative Agent.

 

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(4) Condemnation. The proceeds of any award or claim for damages, direct or
consequential, payable to Borrower or Mortgage Borrower in connection with any
condemnation or other taking of all or any part of the Project, whether of the
unit(s) or of common elements, or for any conveyance in lieu of condemnation,
shall be paid to the Mortgage Loan Administrative Agent and applied in
accordance herewith.
(5) Declaration. Borrower hereby represents, warrants, and covenants as follows
as to the Declaration:
(a) Borrower shall cause Mortgage Borrower to be the owner of all the interests
created under the Declaration other than with respect to interests conveyed to
the Association and Units sold hereunder or conveyed in accordance herewith;
(b) Borrower shall cause Mortgage Borrower to be the Declarant under the
Declaration and the owner without encumbrance (other than under the Loan
Documents) of all voting rights under the Declaration (other than those of the
owners of Units conveyed in accordance herewith);
(c) Borrower shall cause Mortgage Borrower to be the owner of all of the
interests in and to the Association other than interests of owners of Units
conveyed in accordance herewith;
(d) The interest of the Association is not encumbered by any other pledge,
hypothecation, mortgage, deed to secure debt or other security interest, lien or
judgment whatsoever;
(e) Borrower shall cause Mortgage Borrower at all times collaterally assign its
rights as “Declarant” under the Declaration to the Administrative Agent and upon
an Event of Default shall provide proxy rights to the Administrative Agent; and
(f) None of the Units will be omitted from coverage by the Declaration without
the prior written consent of the Administrative Agent.
Section 9.18 Patriot Act Compliance; Foreign Assets Control Regulations.
(1) Borrower shall comply with the Patriot Act and all applicable legal
requirements of governmental authorities having jurisdiction of Borrower,
including those relating to money laundering and terrorism. The Administrative
Agent shall have the right to audit Borrower’s compliance with the Patriot Act
and all applicable legal requirements of governmental authorities having
jurisdiction of Borrower, including those relating to money laundering and
terrorism. In the event that Borrower fails to comply with the Patriot Act or
any such legal requirements of governmental authorities, then the Administrative
Agent may, at its option, declare an Event of Default.

 

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(2) Without limiting the provisions of Section 9.18(1), Borrower, Mortgage
Borrower and any other Borrower Party shall not use the proceeds of the Loans in
any manner that will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or the Anti-Terrorism
Order or any enabling legislation or executive order relating to any of the
same. Without limiting the foregoing, Borrower, Mortgage Borrower, and any
Borrower Party will not permit itself or any of its subsidiaries to (a) become a
blocked person described in Section 1 of the Anti-Terrorism Order or
(b) knowingly engage in any dealings or transactions or be otherwise associated
with any person who is known by Borrower, Mortgage Borrower or such Borrower
Party or who (after such inquiry as may be required by Applicable Law) should be
known by Borrower, Mortgage Borrower or such Borrower Party to be a blocked
person.
(3) Borrower shall execute and deliver to the Administrative Agent from time to
time upon request a certificate stating that no Borrower, Mortgage Borrower,
Borrower Party, or any direct or indirect owner of any interest in Borrower or
any Borrower Party (a) is listed on any Government Lists, (b) is a person who
has been determined by competent authority to be subject to the prohibitions
contained in the Anti-Terrorism Order or any other similar prohibitions
contained in the rules and regulations of OFAC or in any enabling legislation or
other Presidential Executive Orders in respect thereof, (c) has been previously
indicted for or convicted of any felony involving a crime or crimes of moral
turpitude or for any Patriot Act Offenses, (d) is currently under investigation
by any governmental authority for alleged criminal activity, or (e) has a
reputation in the community for criminal or unethical behavior.
Section 9.19 Payment for Labor and Materials. Borrower will or will cause
Mortgage Borrower to promptly pay when due all bills and costs for labor,
materials, and specifically fabricated materials incurred in connection with the
Project and never permit to exist beyond the due date thereof in respect of the
Project or Collateral or any part thereof any Lien, even though inferior to the
Liens of the Loan Documents, and in any event never permit to be created or
exist in respect of the Project or Collateral or any part thereof any other or
additional Lien other than the Liens or security of the Loan Documents and
Mortgage Loan Documents, except for the Permitted Encumbrances. Notwithstanding
the foregoing provisions of this Section 9.19, Borrower may contest in the
validity of any bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Project. Any such contest
shall be in good faith, be at Borrower’s own expense and be made by appropriate
legal proceedings which shall operate to prevent the collection thereof or other
realization thereon and the sale or forfeiture of the Project or any part
thereof to satisfy the same. As a condition to pursuing any such contest,
Borrower shall or shall cause Mortgage Borrower to, at the Administrative
Agent’s option, provide security reasonably satisfactory to the Administrative
Agent, assuring the discharge of Borrower’s or Mortgage Borrower’s obligations
thereunder and of any additional charge, penalty or expense arising from or
incurred as a result of such contest.

 

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Section 9.20 Hotel Management Agreement.
(1) Borrower shall cause Mortgage Borrower to (i) perform and observe in all
material respects all of its covenants and agreements contained in the Hotel
Management Agreement and the Technical Services Agreement; (ii) take all
reasonable and necessary action to prevent the termination of the Hotel
Management Agreement or the Technical Services Agreement; (iii) enforce each
material covenant or obligation of each of the Hotel Management Agreement and
the Technical Services Agreement in accordance with its terms; (iv) promptly
give the Administrative Agent copies of any default or other material notices
given by or on behalf of Mortgage Borrower or received by or on behalf of
Mortgage Borrower from the Hotel Manager pursuant to the Hotel Management
Agreement or the Technical Services Agreement; and (v) take all such action to
achieve the purposes described in clauses (i), (ii) and (iii) of this
Section 9.20 as may from time to time be reasonably requested by the
Administrative Agent; provided, however, that Mortgage Borrower shall be
permitted, upon the Administrative Agent’s reasonable approval, to contest the
validity or applicability of any requirement under the Hotel Management
Agreement or the Technical Services Agreement.
(2) Borrower shall cause Mortgage Borrower to not, without the Administrative
Agent’s prior written consent (which may be withheld in the Administrative
Agent’s sole and absolute discretion), (i) take any action to (A) cancel or
terminate the Hotel Management Agreement or the Technical Services Agreement,
(B) replace the Hotel Manager or (C) appoint a new hotel manager; (ii) sell,
assign, pledge, transfer, mortgage, hypothecate or otherwise dispose of (by
operation of law or otherwise) or encumber any part of its interest in the Hotel
Management Agreement or the Technical Services Agreement; (iii) waive any
material default under or breach of any material provisions of the Hotel
Management Agreement or the Technical Services Agreement, or waive, fail to
enforce, forgive or release any material right, interest or entitlement,
howsoever arising, under or in respect of any material provisions of the Hotel
Management Agreement or the Technical Services Agreement, or vary or agree to
the variation in any material way of any material provisions of the Hotel
Management Agreement or the Technical Services Agreement or of the performance
of the Hotel Manager under the Hotel Management Agreement or the Technical
Services Agreement; (iv) petition, request or take any other legal or
administrative action that seeks, or may reasonably be expected, to rescind,
terminate or suspend the Hotel Management Agreement or the Technical Services
Agreement.
(3) Any change in day-to-day management and control of the Hotel Manager shall
be cause for Administrative Agent to re-approve such Hotel Manager and Hotel
Management Agreement (which approval may be withheld in the Administrative
Agent’s sole and absolute discretion). If at any time the Administrative Agent
consents to the appointment of a new hotel manager, such new manager and
Mortgage Borrower shall, as a condition of Administrative Agent’s consent,
execute a Hotel Manager’s Consent and Subordination of Management Agreement in
the form then used by Administrative Agent. Each Hotel Manager shall hold and
maintain all necessary licenses, certifications and permits required by law to
carry on its duties under the Hotel Management Agreement and the Technical
Services Agreement. Borrower shall cause Mortgage Borrower to fully perform all
of its covenants, agreements and obligations under the Management Agreement and
the Technical Services Agreement.

 

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Section 9.21 Americans with Disabilities.
(1) Borrower (a) agrees that it shall use and shall cause Mortgage Borrower to
use commercially reasonable efforts to ensure that the Project shall at all
times comply with the requirements of the Americans with Disabilities Act of
1990, the Fair Housing Amendments Act of 1988, all state and local laws and
ordinances related to handicapped access and all rules, regulations, and orders
issued pursuant thereto including, without limitation, the Americans with
Disabilities Act Accessibility Guidelines for Buildings and Facilities
(collectively, “Access Laws”) and (b) has no actual knowledge as to the
Project’s non-compliance with any Access Laws where, in the case of (a) or
(b) above, the failure to so comply could have a material adverse effect on the
Project or on Borrower’s ability to repay the Loans in accordance with the terms
hereof.
(2) Notwithstanding any provisions set forth herein or in any other document
regarding the Administrative Agent’s approval of alterations of the Project,
Borrower shall not and shall not permit Mortgage Borrower to alter the Project
in any manner which would materially increase Borrower’s or Mortgage Borrower’s
responsibilities for compliance with the applicable Access Laws without the
prior written approval of the Administrative Agent. The foregoing shall apply to
tenant improvements constructed by Mortgage Borrower or by any of its tenants.
The Administrative Agent may condition any such approval upon receipt of a
certificate of Access Law compliance from an architect, engineer, or other
person reasonably acceptable to the Administrative Agent.
(3) Borrower agrees to give prompt notice to the Administrative Agent of the
receipt by Borrower or Mortgage Borrower of any written complaints related to
violation of any Access Laws with respect to the Project and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
Section 9.22 Zoning. Borrower shall not and shall not permit Mortgage Borrower
to, without the Administrative Agent’s prior consent, seek, make, suffer or
acquiesce in any change or variance in any zoning or land use laws or other
conditions of use of the Project or any portion thereof. Borrower shall not and
shall not permit Mortgage Borrower to use or permit the use of any portion of
the Project in any manner that could result in such use becoming an illegal
non-conforming use under any zoning or land use law or any other Applicable Law
or modify any agreements relating to zoning or land use matters or with the
joinder or merger of lots for zoning, land use or other purposes, without the
prior written consent of the Administrative Agent. Without limiting the
foregoing, in no event shall Borrower or Mortgage Borrower take any action that
would reduce or impair below applicable requirements (a) the number of parking
spaces at the Improvements or (b) access to the Project from adjacent public
roads.
Section 9.23 ERISA. Borrower shall not and shall not permit Mortgage Borrower to
take any action, or omit to take any action, which would (a) cause Borrower’s or
Mortgage Borrower’s assets to constitute “plan assets” for purposes of ERISA or
the Code or (b) cause the Transactions to be a nonexempt prohibited transaction
(as such term is defined in Section 4975 of the Code or Section 406 of ERISA)
that could subject the Administrative Agent and/or the Lenders, on account of
any Loan or execution of the Loan Documents hereunder, to any tax or penalty on
prohibited transactions imposed under Section 4975 of the Code or Section 502(i)
of ERISA.

 

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Section 9.24 Property Specific Covenants.
(1) Borrower shall cause Mortgage Borrower to pay to the title company any fees
or charges imposed by the title company in connection with amending the
mortgagee title policy issued in favor of Mortgage Loan Administrative Agent as
a result of the Building Conversion, including, but not limited to the costs of
obtaining updated title searches, date-down endorsement, a “condominium”
endorsement and an endorsement modifying the insured legal description.
(2) Without the prior written consent of Administrative Agent, Borrower shall
not and shall not permit Mortgage Borrower to amend, modify or terminate its
Organizational Documents, the Project Management Agreement or the Technical
Services Agreement, replace the Project Manager or Hotel Manager or appoint a
new project manager or technical services advisor.
(3) Borrower shall not permit the Building Conversion or any other renovations
at the Project to constitute “Level 3” alterations as defined in the Florida
Building Code nor violate what is commonly known as the “50% Rule” under Florida
law.
Section 9.25 Forward Purchase Contract. Borrower shall cause each other Borrower
Party which is a party thereto (a) to perform and observe all of its covenants
and agreements contained in the Forward Purchase Contract; (b) to enforce each
covenant or obligation of the other Borrower Parties under the Forward Purchase
Contract; (c) not to sell, assign, pledge, transfer, mortgage, hypothecate or
otherwise dispose of (by operation of law or otherwise) or encumber any part of
its interest in the Forward Purchase Contract; and (d) not to waive any material
default under or breach of any material provisions of the Forward Purchase
Contract or waive, fail to enforce, forgive or release any material right,
interest or entitlement, howsoever arising, under or in respect of any
provisions of the Forward Purchase Contract.
Section 9.26 Mortgage Borrower Covenants. Borrower shall cause Mortgage Borrower
to comply with all obligations with which Mortgage Borrower has covenanted to
comply under the Mortgage Loan Agreement and all other Mortgage Loan Documents
(including, without limitation, those certain affirmative and negative covenants
set forth in the Mortgage Loan Agreement and the Mortgage Loan Documents)
whether the Mortgage Loan has been repaid or the related Mortgage Loan Document
has been otherwise terminated, unless otherwise consented to in writing by
Administrative Agent. Borrower shall cause Mortgage Borrower to promptly notify
Administrative Agent of all notices received by Mortgage Borrower under or in
connection with the Mortgage Loan, including, without limitation, any notice by
the Mortgage Lender to Mortgage Borrower of any default by Mortgage Borrower in
the performance or observance of any of the terms, covenants or conditions of
the Mortgage Loan Documents on the part of Mortgage Borrower to be performed or
observed, and deliver to Administrative Agent a true copy of each such notice,
together with any other consents, notices, requests or other written
correspondence between Mortgage Borrower and Mortgage Lender.
Section 9.27 Refinancing or Prepayment of the Mortgage Loan. Neither Borrower
nor Mortgage Borrower shall be required to obtain the consent of Administrative
Agent to refinance the Mortgage Loan, provided that the Loans shall have (or
shall simultaneously be) been paid in full in accordance with the terms of this
Agreement (including any prepayment premiums and other amounts due and payable
to Administrative Agent under the Loan Documents). Borrower shall cause Mortgage
Borrower to obtain the prior written consent of Administrative Agent to enter
into any other refinancing of the Mortgage Loan, which consent may be withheld
or conditioned in Administrative Agent’s sole and absolute discretion.

 

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Section 9.28 Acquisition of the Mortgage Loan.
(1) No Borrower Party or any Affiliate of any of them or any Person acting at
any such Person’s request or direction, shall acquire or agree to acquire any
Mortgage Lender’s interest in the Mortgage Loan, or any portion thereof or any
interest therein, or any direct or indirect ownership interest in the holder of
the Mortgage Loan, via purchase, transfer, exchange or otherwise, and any breach
or attempted breach of this provision shall constitute an Event of Default
hereunder. If, solely by operation of applicable subrogation law, Borrower shall
have failed to comply with the foregoing, then Borrower: (i) shall immediately
notify Administrative Agent of such failure; (ii) shall cause any and all such
prohibited parties acquiring any interest in the Mortgage Loan Documents:
(A) not to enforce the Mortgage Loan Documents; and (B) upon the request of
Administrative Agent, to the extent any of such prohibited parties has or have
the power or authority to do so, to promptly: (1) cancel the promissory note
evidencing the Mortgage Loan, (2) reconvey and release the Lien securing the
Mortgage Loan and any other collateral under the Mortgage Loan Documents, and
(3) discontinue and terminate any enforcement proceeding(s) under the Mortgage
Loan Documents.
(2) Administrative Agent (on behalf of the Lenders) shall have the right at any
time to acquire all or any portion of the Mortgage Loan or any interest in any
holder of, or participant in, the Mortgage Loan without notice or consent of
Borrower or any other Borrower Party, in which event Administrative Agent shall
have and may exercise all rights of Mortgage Lender thereunder (to the extent of
its interest), including the right (i) to declare that the Mortgage Loan is in
default and (ii) to accelerate the Mortgage Loan indebtedness, in accordance
with the terms thereof and (iii) to pursue all remedies against any obligor
under the Mortgage Loan Documents. In addition, Borrower hereby expressly agrees
that any claims, counterclaims, defenses, offsets, deductions or reductions of
any kind which Mortgage Borrower or any other Person may have against relating
to or arising out of the Mortgage Loan shall be the personal obligation of
Mortgage Lender, and in no event shall Mortgage Borrower be entitled to bring,
pursue or raise any such claims, counterclaims, defenses, offsets, deductions or
reductions against the Lenders or Administrative Agent or any Affiliate of the
Lenders or Administration Agent or any other Person as the successor holder of
the Mortgage Loan or any interest therein, provided that Mortgage Borrower may
seek specific performance of its contractual rights under the Mortgage Loan
Documents,
Section 9.29 Construction Management Contract. Borrower shall not and shall not
permit Mortgage Borrower, without Administrative Agent’s prior consent: (a) take
any action to cancel or terminate any material right under the Construction
Management Contract; (b) waive any material default under or breach of any
material provisions of the Construction Management Contract, or waive, forgive,
release or fail to enforce any material right thereunder; (c) amend or modify
any material provision of, or give any consent under, the Construction
Management Contract; or (d) enter into any other construction management or
general contractor contract with respect to the Building Conversion or the
Project.

 

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ARTICLE 10
EVENTS OF DEFAULT
Each of the following shall constitute an “Event of Default” under the Loans:
Section 10.1 Payments. Borrower’s failure to (1) pay any regularly scheduled
installment of principal, interest, the Agency Fee, or other amount within five
(5) days of (and including) the date when due as required under the Loan
Documents or (2) make a deposit of cash or pay any other amount due hereunder
within five (5) days of (and including) the date when due as required under the
Loan Documents, or (3) pay the Loans at the Maturity Date, whether by
acceleration or otherwise.
Section 10.2 Insurance. Borrower’s failure or failure to cause Mortgage Borrower
to maintain insurance as required under Section 3.1 of this Agreement.
Section 10.3 Single Purpose Entity. If Borrower (i) violates any of the
provisions set forth in clauses (a), (b), (c), (d), (e), (g), (j), (o), (p),
(q), (t), (w), (z) or (bb) of the definition of “Single Purpose Entity”, or
(ii) violates any of the provisions clauses (f), (h), (i), (k), (l), (m), (n),
(r), (s), (u), (v), (x), (y) or (aa) of the definition of “Single Purpose
Entity” and, in the case of this clause (ii) such violation is not cured with
thirty (30) days of the date that any officer of Borrower, Mortgage Borrower or
any Borrower Party obtains knowledge of such violation.
Section 10.4 Taxes. If any of the Taxes are not paid when the same are due and
payable.
Section 10.5 Sale, Encumbrance, Etc.; Change of Control. The sale, transfer,
conveyance, pledge, mortgage or assignment of any part or all of the Project,
the Collateral or any interest therein, or of any interest in Borrower, Mortgage
Borrower or any Borrower Party, in violation of Section 9.1 of this Agreement,
or the occurrence of any Change of Control in violation of Section 9.1.
Section 10.6 Representations and Warranties. Any representation or warranty made
in any Loan Document proves to be untrue in any material respect when made or
deemed made.
Section 10.7 Other Encumbrances. Any default (beyond applicable cure periods)
under any document or instrument, other than the Loan Documents, evidencing or
creating a Lien on the Project or any part thereof.
Section 10.8 Various Covenants. Any default under any of its obligations under
Sections 6.2 (pertaining to lease approvals), 9.3 (management of the Project),
9.8 (limitations on debt), 9.18 (Patriot Act compliance), 9.22 (zoning and use
changes), 9.23 (ERISA), 9.25 (Forward Purchase Contract), 9.27 (Refinancing or
Prepayment of the Mortgage Loan), 9.28(1) (Acquisition of Mortgage Loan) or
14(1) (Completion of Building Conversion) of this Agreement.

 

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Section 10.9 Involuntary Bankruptcy or Other Proceeding. Commencement of an
involuntary case or other proceeding against Borrower, Mortgage Borrower, any
Borrower Party or any other Person having an ownership or security interest in
the Project (each, a “Bankruptcy Party”) which seeks liquidation, reorganization
or other relief with respect to such Person or its Debts or other liabilities
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeks the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any of its property, and such involuntary case or
other proceeding shall remain undismissed or unstayed for a period of sixty
(60) days, or an order for relief against a Bankruptcy Party shall be entered in
any such case under the Bankruptcy Code (an “Involuntary Proceeding”).
Section 10.10 Voluntary Petitions, Etc. Commencement by a Bankruptcy Party of a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its Debts or other liabilities under any
bankruptcy, insolvency or other similar law or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official for it or any
of its property, or consent by a Bankruptcy Party to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or the making by a Bankruptcy Party of
a general assignment for the benefit of creditors, or the failure by a
Bankruptcy Party, or the admission by a Bankruptcy Party in writing of its
inability, to pay its Debts generally as they become due, or any action by a
Bankruptcy Party to authorize or effect any of the foregoing (a “Voluntary
Proceeding”).
Section 10.11 Indebtedness. Any of Borrower or Mortgage Borrower, or any
combination thereof, shall default in the payment when due of any principal of
or interest on any of its other Debt aggregating $500,000 or more and such
default shall not be cured within any applicable notice or cure period provided
with respect thereto; or any event specified in any note, agreement, indenture
or other document evidencing or relating to any such Debt shall occur if the
effect of such event is to cause, or (with the giving of any notice or the lapse
of time or both) to permit the holder or holders of such Debt to cause, such
Debt to become due or to be prepaid in full (whether by redemption, purchase,
offer to purchase or otherwise) prior to its stated maturity.
Section 10.12 Dissolution. Any Borrower Party shall be terminated, dissolved or
liquidated (as a matter of law or otherwise) or proceedings shall be commenced
by any Person (including any Borrower Party) seeking the termination,
dissolution or liquidation of any Borrower Party, which, in the case of actions
by Persons other than a Borrower Party or any of their Affiliates, shall
continue unstayed and in effect for a period of sixty (60) or more days.
Section 10.13 Judgments. One or more (a) final, non-appealable judgments for the
payment of money (exclusive of judgment amounts fully covered by insurance where
the insurer has admitted liability in respect of such judgment) shall be
rendered against Borrower or Mortgage Borrower in an amount aggregating in
excess of $1,000,000, or (b) non-monetary judgments, orders or decrees shall be
entered against Borrower or Mortgage Borrower which have or would reasonably be
expected to have a Material Adverse Effect, and, in either case, the same shall
remain undischarged for a period of sixty (60) consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of such Borrower or
Mortgage Borrower, as the case may be, to enforce any such judgment.

 

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Section 10.14 Security. The Liens created by the Pledge Agreement shall at any
time not constitute a valid and perfected first priority Lien on the collateral
intended to be covered thereby in favor of the Administrative Agent, free and
clear of all other Liens, or, except for expiration in accordance with its
terms, any of Pledge Agreement shall for whatever reason be terminated or cease
to be in full force and effect, or the enforceability thereof shall be contested
by Borrower, Mortgage Borrower or any Borrower Party or any of their Affiliates;
Section 10.15 Guarantees. Any Guarantor or Joinder Party shall (i) default under
any Guarantee or the Joinder, as applicable, beyond any applicable notice and
grace period; or (ii) revoke or attempt to revoke, contest or commence any
action against its obligations under any Guarantee or under the Joinder, as
applicable.
Section 10.16 Interest Reserve Fund. Borrower uses, or permits the use of, funds
from the Interest Reserve Fund for any purpose other than the purpose for which
such funds were disbursed in accordance herewith.
Section 10.17 Mortgage Loan Event of Default. If any Mortgage Loan Event of
Default shall occur, or if Mortgage Borrower enters into or otherwise suffers or
permits any amendment, waiver, supplement, termination, extension, renewal,
replacement or other modification of any Mortgage Loan Document without the
prior written consent of Administrative Agent.
Section 10.18 Hedge Agreement. The Acceptable Counterparty shall default under
any Hedge Agreement and such default is not cured within the applicable notice
and cure periods provided therein.
Section 10.19 Junior Loan Intercreditor Agreement. Any failure by any of
Mortgage Borrower, Borrower, Junior Mezzanine Borrower or Junior Mezzanine
Lender to perform or observe any the agreements and covenants contained in the
Junior Loan Intercreditor Agreement.
Section 10.20 Covenants. Borrower’s failure to perform or observe any of the
agreements and covenants contained in this Agreement or in any of the other Loan
Documents and not specified above, and the continuance of such failure for ten
(10) days after notice by the Administrative Agent to Borrower; provided,
however, subject to any shorter period for curing any failure by Borrower as
specified in any of the other Loan Documents, Borrower shall have an additional
thirty (30) days to cure such failure if (1) such failure does not involve the
failure to make payments on a monetary obligation; (2) such failure cannot
reasonably be cured within ten (10) days; (3) Borrower is diligently undertaking
to cure such default, and (4) Borrower has provided the Administrative Agent
with security reasonably satisfactory to the Administrative Agent against any
interruption of payment or impairment of collateral as a result of such
continuing failure.

 

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ARTICLE 11
REMEDIES
Section 11.1 Remedies — Insolvency Events. Upon the occurrence of any Event of
Default described in Section 10.9 or 10.10, the obligations of the Lenders to
advance amounts hereunder shall immediately terminate, and all amounts due under
the Loan Documents immediately shall become due and payable, all without written
notice and without presentment, demand, protest, notice of protest or dishonor,
notice of intent to accelerate the maturity thereof, notice of acceleration of
the maturity thereof, or any other notice of default of any kind, all of which
are hereby expressly waived by Borrower and each Borrower Party; provided,
however, if the Bankruptcy Party under Section 10.9 or 10.10 is other than
Borrower, then all amounts due under the Loan Documents shall become immediately
due and payable at the Administrative Agent’s election, in the Administrative
Agent’s sole discretion.
Section 11.2 Remedies — Other Events.
(1) Except as set forth in Section 11.1 above, while any Event of Default
exists, the Administrative Agent may (1) by written notice to Borrower, declare
the entire amount of the Loans to be immediately due and payable without
presentment, demand, protest, notice of protest or dishonor, notice of intent to
accelerate the maturity thereof, notice of acceleration of the maturity thereof,
or other notice of default of any kind, all of which are hereby expressly waived
by Borrower and each Borrower Party, (2) terminate the obligation, if any, of
the Lenders to advance amounts hereunder, and (3) exercise all rights and
remedies therefore under the Loan Documents and at law or in equity.
(2) Any amounts recovered from the Collateral after an Event of Default may be
applied by Administrative Agent toward the payment of any interest and/or
principal of the Loans and/or any other amounts due under the Loan Documents in
such order, priority and proportions as Administrative Agent in its sole
discretion shall determine.
Section 11.3 Administrative Agent’s Right to Perform the Obligations. If
Borrower shall fail, refuse or neglect to make any payment or perform any act
required by the Loan Documents, then while any Event of Default exists, and
without notice to or demand upon Borrower and without waiving or releasing any
other right, remedy or recourse the Administrative Agent or any Lender may have
because of such Event of Default, the Administrative Agent may (but shall not be
obligated to) make such payment or perform such act for the account of and at
the expense of Borrower, and shall have the right to enter upon the Project for
such purpose and to take all such action thereon and with respect to the Project
or the Collateral as it may deem necessary or appropriate. If the Administrative
Agent shall elect to pay any sum due with reference to the Project or the
Collateral, the Administrative Agent may do so in reliance on any bill,
statement or assessment procured from the appropriate governmental authority or
other issuer thereof without inquiring into the accuracy or validity thereof.
Similarly, in making any payments to protect the security intended to be created
by the Loan Documents, the Administrative Agent shall not be bound to inquire
into the validity of any apparent or threatened adverse title, Lien,
encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same. Additionally, if any Hazardous Materials affect
or threaten to affect the Project, the Administrative Agent may (but shall not
be obligated to) give such notices and take such actions as it deems necessary
or advisable in order to abate the discharge of any Hazardous Materials or
remove the Hazardous Materials. Borrower shall indemnify, defend and hold the
Administrative Agent and the Lenders harmless from and against any and all
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
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whatsoever, including reasonable attorneys’ fees and disbursements, incurred or
accruing by reason of any acts performed by the Administrative Agent or any
Lender pursuant to the provisions of this Section 11.3, including those arising
from the joint, concurrent, or comparative negligence of the Administrative
Agent and any Lender, except as a result of the Administrative Agent’s or any
Lender’s gross negligence or willful misconduct. All sums paid by the
Administrative Agent pursuant to this Section 11.3, and all other sums expended
by the Administrative Agent or any Lender to which it shall be entitled to be
indemnified, together with interest thereon at the Default Rate from the date of
such payment or expenditure until paid, shall constitute additions to the Loans,
shall be secured by the Loan Documents and shall be paid by Borrower to the
Administrative Agent upon demand.
ARTICLE 12
MISCELLANEOUS
Section 12.1 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and either shall be (1) mailed by certified mail,
postage prepaid, return receipt requested, (2) sent by overnight air courier
service, (3) personally delivered to a representative of the receiving party, or
(4) sent by telecopy (provided an identical notice is also sent simultaneously
by mail, overnight courier, or personal delivery as otherwise provided in this
Section 12.1) to the intended recipient at the “Address for Notices” specified
below its name on the signature pages hereof. Any communication so addressed and
mailed shall be deemed to be given on the earliest of (a) when actually
delivered, (b) on the first Business Day after deposit with an overnight air
courier service, or (c) on the third Business Day after deposit in the United
States mail, postage prepaid, in each case to the address of the intended
addressee, and any communication so delivered in person shall be deemed to be
given when receipted for by, or actually received by the Administrative Agent, a
Lender or Borrower, as the case may be. If given by telecopy, a notice shall be
deemed given and received when the telecopy is transmitted to the party’s
telecopy number specified above, and confirmation of complete receipt is
received by the transmitting party during normal business hours or on the next
Business Day if not confirmed during normal business hours, and an identical
notice is also sent simultaneously by mail, overnight courier, or personal
delivery as otherwise provided in this Section 12.1. Any party may designate a
change of address by written notice to each other party by giving at least ten
(10) days’ prior written notice of such change of address.
Section 12.2 Amendments, Waivers, Etc.
(1) Subject to any consents required pursuant to this Section 12.2 and any other
provisions of this Agreement and any other Loan Document which expressly require
the consent, approval or authorization of the Majority Lenders, this Agreement
and any other Loan Document may be modified or supplemented only by an
instrument in writing signed by Borrower and the Administrative Agent; provided
that, the Administrative Agent may (without any Lender’s consent) give or
withhold its agreement to any amendments of the Loan Documents or any waivers or
consents in respect thereof or exercise or refrain from exercising any other
rights or remedies which the Administrative Agent may have under the Loan
Documents or otherwise provided that such actions do not, in the Administrative
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value of any collateral, taken as a whole, or represent a departure from
Administrative Agent’s standard of care described in Section 15.5 (and the
assignment or granting of a participation by Eurohypo shall not limit or
otherwise affect its discretion in respect of any of the foregoing), except that
the Administrative Agent will not, without the consent of each Lender, agree to
the following (provided that no Lender’s consent shall be required for any of
the following which are otherwise required or contemplated under the Loan
Documents): (a) reduce the principal amount of the Loans or reduce the interest
rate thereon; (b) extend any stated payment date for principal of or interest on
the Loans payable to such Lender; (c) release Borrower, any Joinder Party, any
Guarantor or any other party from liability under the Loan Documents (except for
any assigning Lender pursuant to Section 12.24 and any resigning Administrative
Agent pursuant to Section 15.8); (d) release or subordinate in whole or in part
any material portion of the collateral given as security for the Loans;
(e) modify any of the provisions of this Section 12.2, the definition of
“Majority Lenders” or any other provision in the Loan Documents specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder; (f) modify
the terms of any Event of Default; or (g) consent to (i) the sale, transfer or
encumbrance of any portion of the Project (or any interest therein) or any
direct or indirect ownership interest therein and (ii) the incurrence by
Borrower of any additional indebtedness secured by the Project, in each case to
the extent (and subject to any standard of reasonability) such consent is
required under the Loan Documents. Notwithstanding the foregoing provisions of
this Section 12.2, as between Borrower and Lenders, notification by
Administrative Agent to Borrower of Administrative Agent’s consent to any of the
matters set forth in clauses (a) through and including (g) of the preceding
sentence shall be deemed to be the consent of each Lender to such matter.
(2) Notwithstanding anything to contrary contained in this Agreement, any
modification or supplement of Article 15, or of any of the rights or duties of
the Administrative Agent hereunder, shall require the consent of the
Administrative Agent.
Section 12.3 Limitation on Interest. It is the intention of the parties hereto
to conform strictly to applicable usury laws. Accordingly, all agreements
between Borrower, the Administrative Agent and the Lenders with respect to the
Loans are hereby expressly limited so that in no event, whether by reason of
acceleration of maturity or otherwise, shall the amount paid or agreed to be
paid to the Administrative Agent or any Lender or charged by any Lender for the
use, forbearance or detention of the money to be lent hereunder or otherwise,
exceed the maximum amount allowed by law. If the Loans would be usurious under
Applicable Law (including the laws of the State, the laws of the State of New
York and the laws of the United States of America), then, notwithstanding
anything to the contrary in the Loan Documents: (1) the aggregate of all
consideration which constitutes interest under Applicable Law that is contracted
for, taken, reserved, charged or received under the Loan Documents shall under
no circumstances exceed the maximum amount of interest allowed by Applicable
Law, and any excess shall be credited on the Notes by the holders thereof (or,
if the Notes have been paid in full, refunded to Borrower); and (2) if maturity
is accelerated by reason of an election by the Administrative Agent in
accordance with the terms hereof, or in the event of any prepayment, then any
consideration which constitutes interest may never include more than the maximum
amount allowed by Applicable Law. In such case, excess interest, if any,
provided for in the Loan Documents or otherwise, to the extent permitted by
Applicable Law, shall be amortized, prorated, allocated and spread from the date
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actual rate of interest is uniform through the term hereof. If such
amortization, proration, allocation and spreading is not permitted under
Applicable Law, then such excess interest shall be cancelled automatically as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited on the Notes (or, if the Notes have been paid in full, refunded to
Borrower). The terms and provisions of this Section 12.3 shall control and
supersede every other provision of the Loan Documents. The Loan Documents are
contracts made under and shall be construed in accordance with and governed by
the laws of the State of New York, except that if at any time the laws of the
United States of America permit the Lenders to contract for, take, reserve,
charge or receive a higher rate of interest than is allowed by the laws of the
State of New York (whether such federal laws directly so provide or refer to the
law of any state), then such federal laws shall to such extent govern as to the
rate of interest which the Lenders may contract for, take, reserve, charge or
receive under the Loan Documents.
Section 12.4 Invalid Provisions. If any provision of any Loan Document is held
to be illegal, invalid or unenforceable, such provision shall be fully
severable; the Loan Documents shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof;
the remaining provisions thereof shall remain in full effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
therefrom; and in lieu of such illegal, invalid or unenforceable provision there
shall be added automatically as a part of such Loan Document a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible to be legal, valid and enforceable.
Section 12.5 Reimbursement of Expenses. Borrower shall pay or reimburse the
Administrative Agent and/or the Lenders on demand of the applicable party for:
(1) all expenses incurred by the Administrative Agent in connection with the
Loans, including fees and expenses of the Administrative Agent’s attorneys,
environmental, engineering and other consultants, and fees, charges or taxes for
the negotiation, recording or filing of Loan Documents, (2) all expenses of the
Administrative Agent in connection with the administration of the Loans,
including audit costs, inspection fees, attorneys’ fees and disbursement,
settlement of condemnation and casualty awards, and premiums for title insurance
and endorsements thereto, (3) all of the Administrative Agent’s reasonable costs
and expenses (including reasonable fees and disbursements of the Administrative
Agent’s external counsel) incurred in connection with the syndication of the
Loans to the Lenders and the actions taken pursuant to Section 12.10, and
(4) the Administrative Agent and the Lenders for all amounts expended, advanced
or incurred by the Administrative Agent and the Lenders to collect the Notes, or
to enforce the rights of the Administrative Agent and the Lenders under this
Agreement or any other Loan Document, or to defend or assert the rights and
claims of the Administrative Agent and the Lenders under the Loan Documents or
with respect to the Project or the Collateral (by litigation or other
proceedings), which amounts will include all court costs, attorneys’ fees and
expenses, fees of auditors and accountants, and investigation expenses as may be
incurred by the Administrative Agent and the Lenders in connection with any such
matters (whether or not litigation is instituted), together with interest at the
Default Rate on each such amount from the date of disbursement until the date of
reimbursement to the Administrative Agent and the Lenders, all of which shall
constitute part of the Loans and shall be secured by the Loan Documents.

 

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Section 12.6 Approvals; Third Parties; Conditions. All approval rights retained
or exercised by the Administrative Agent and the Lenders with respect to leases,
contracts, plans, studies and other matters are solely to facilitate the
Lenders’ credit underwriting, and shall not be deemed or construed as a
determination that the Lenders have passed on the adequacy thereof for any other
purpose and may not be relied upon by Borrower or any other Person. This
Agreement is for the sole and exclusive use of the Administrative Agent, the
Lenders and Borrower and may not be enforced, nor relied upon, by any Person
other than the Administrative Agent, the Lenders and Borrower. All conditions of
the obligations of the Administrative Agent and the Lenders hereunder, including
the obligation to make advances, are imposed solely and exclusively for the
benefit of the Administrative Agent and the Lenders, their successors and
assigns, and no other Person shall have standing to require satisfaction of such
conditions or be entitled to assume that the Lenders will refuse to make
advances in the absence of strict compliance with any or all of such conditions,
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 the Administrative Agent and the Lenders at any time in
their sole discretion.
Section 12.7 Lenders and Administrative Agent Not in Control; No Partnership.
None of the covenants or other provisions contained in this Agreement shall, or
shall be deemed to, give the Administrative Agent or any Lender the right or
power to exercise control over the affairs or management of Borrower, the power
of the Administrative Agent and the Lenders being limited to the rights to
exercise the remedies referred to in the Loan Documents. The relationship
between Borrower and the Lenders is, and at all times shall remain, solely that
of debtor and creditor. No covenant or provision of the Loan Documents is
intended, nor shall it be deemed or construed, to create a partnership, joint
venture, agency or common interest in profits or income between the
Administrative Agent, the Lenders and Borrower or to create an equity in the
Project in the Administrative Agent or any Lender. The Administrative Agent and
the Lenders neither undertake nor assume any responsibility or duty to Borrower
or to any other person with respect to the Project, the Collateral or the Loans,
except as expressly provided in the Loan Documents; and notwithstanding any
other provision of the Loan Documents: (1) neither the Administrative Agent nor
any Lender is, nor shall be construed as, a partner, joint venturer, alter ego,
manager, controlling person or other business associate or participant of any
kind of Borrower or its stockholders, members, or partners and neither the
Administrative Agent nor any Lender intends to ever assume such status; (2) no
Lender or the Administrative Agent shall in any event be liable for any Debts,
expenses or losses incurred or sustained by Borrower; and (3) no Lender or the
Administrative Agent shall be deemed responsible for or a participant in any
acts, omissions or decisions of Borrower or its stockholders, members, or
partners. The Administrative Agent, the Lenders and Borrower disclaim any
intention to create any partnership, joint venture, agency or common interest in
profits or income between the Administrative Agent, the Lenders and Borrower, or
to create an equity interest in the Project or the Collateral in the
Administrative Agent or any Lender, or any sharing of liabilities, losses, costs
or expenses.
Section 12.8 Time of the Essence. Time is of the essence with respect to this
Agreement.
Section 12.9 Successors and Assigns. Subject to the provisions of Section 12.24,
this Agreement shall be binding upon and inure to the benefit of the
Administrative Agent, the Lenders and Borrower and the respective successors and
permitted assigns.

 

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Section 12.10 Renewal, Extension or Rearrangement. All provisions of the Loan
Documents shall apply with equal effect to each and all promissory notes and
amendments thereof hereinafter executed which in whole or in part represent a
renewal, extension, increase or rearrangement of the Loans. For portfolio
management purposes, the Lenders may elect to divide the Loans into two or more
separate loans evidenced by separate promissory notes with the same or different
interest rates, so long as the aggregate payment and other obligations of
Borrower are not effectively increased or otherwise modified. Borrower agrees to
cooperate with the Administrative Agent and the Lenders and to execute such
documents as the Administrative Agent reasonably may request to effect such
division of the Loans.
Section 12.11 Waivers. No course of dealing on the part of the Administrative
Agent or any Lender, their respective officers, employees, consultants or
agents, nor any failure or delay by the Administrative Agent or any Lender with
respect to exercising any right, power or privilege of the Administrative Agent
or any Lender under any of the Loan Documents, shall operate as a waiver
thereof.
Section 12.12 Cumulative Rights. Rights and remedies of the Administrative Agent
and the Lenders under the Loan Documents shall be cumulative, and the exercise
or partial exercise of any such right or remedy shall not preclude the exercise
of any other right or remedy.
Section 12.13 Singular and Plural. Words used in this Agreement and the other
Loan Documents in the singular, where the context so permits, shall be deemed to
include the plural and vice versa. The definitions of words in the singular in
this Agreement and the other Loan Documents shall apply to such words when used
in the plural where the context so permits and vice versa.
Section 12.14 Phrases. When used in this Agreement and the other Loan Documents,
the phrase “including” means “including, but not limited to,” the phrases
“satisfactory to any Lender” or “satisfactory to the Administrative Agent” means
in form and substance satisfactory to such Lender or the Administrative Agent,
as the case may be, in all respects, the phrases “with Lender’s consent”, “with
Lender’s approval”, “with the Administrative Agent’s consent” or “with the
Administrative Agent’s approval” means such consent or approval at Lender’s or
the Administrative Agent’s, as the case may be, discretion, and the phrases
“acceptable to Lender” or “acceptable to the Administrative Agent” means
acceptable to Lender or the Administrative Agent, as the case may be, at such
party’s reasonable discretion acting in good faith.
Section 12.15 Exhibits and Schedules. The exhibits and schedules attached to
this Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein.
Section 12.16 Titles of Articles, Sections and Subsections. All titles or
headings to articles, sections, subsections or other divisions of this Agreement
and the other Loan Documents or the exhibits hereto and thereto are only for the
convenience of the parties and shall not be construed to have any effect or
meaning with respect to the other content of such articles, sections,
subsections or other divisions, such other content being controlling as to the
agreement between the parties hereto.

 

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Section 12.17 Promotional Material. Borrower authorizes the Administrative Agent
and each of the Lenders to issue press releases, advertisements and other
promotional materials in connection with the Administrative Agent’s or such
Lender’s own promotional and marketing activities, and describing the Loans and
the Project in general terms and the Administrative Agent’s or such Lender’s
participation in the Loans subject, in each case, to Borrower’s approval, which
approval shall not be unreasonably withheld, conditioned or delayed. All
references to the Administrative Agent or any Lender contained in any press
release, advertisement or promotional material issued by Borrower or Borrower
shall be approved in writing by the Administrative Agent and such Lender in
advance of issuance.
Section 12.18 Survival. In the event that any Lender that may assign any
interest in its Commitment or Loans hereunder in accordance with the terms of
this Agreement, all of the representations, warranties, covenants, and
indemnities of Borrower hereunder and under the other Loan Documents shall
survive for the benefit of such assigning Lender the making of such assignment,
notwithstanding that such assigning Lender may cease to be a “Lender” hereunder.
Without limiting the foregoing, all indemnities of Borrower hereunder and under
the other Loan Documents shall survive indefinitely, notwithstanding (a) the
repayment in full of the Loans and the release of the Liens evidencing or
securing the Loans or (b) the transfer (by sale, foreclosure, conveyance in lieu
of foreclosure or otherwise) of any or all right, title and interest in and to
the Project to any party. The representations, warranties and covenants of
Borrower, other than those imposing indemnification obligations on Borrower
(which shall survive indefinitely), shall survive for a period of two (2) years
following the repayment in full of the Loans and the release of the Liens
evidencing or securing the Loans (notwithstanding that prior to the end of such
two-year period, Borrower may have transferred (by sale, foreclosure, conveyance
in lieu of foreclosure or otherwise) any or all its right, title and interest in
and to the Project to any other party).
Section 12.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR
ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR
IN ANY WAY RELATING TO THE LOANS OR THE PROJECT (INCLUDING, WITHOUT LIMITATION,
ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE
ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND
EACH LENDER TO ENTER THIS AGREEMENT.
Section 12.20 Remedies of Borrower. In the event that a claim or adjudication is
made that the Administrative Agent, any of the Lenders, or their agents, acted
unreasonably or unreasonably delayed acting in any case where by Applicable Law
or under this Agreement or the other Loan Documents, the Administrative Agent,
any Lender or any such agent, as the case may be, has an obligation to act
reasonably or promptly, or otherwise violated this Agreement or the Loan
Documents, Borrower agrees that none of the Administrative Agent, the Lenders or
their agents shall be liable for any incidental, indirect, special, punitive,
consequential or speculative damages or losses resulting from such failure to
act reasonably or promptly in accordance with this Agreement or the other Loan
Documents.

 

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Section 12.21 GOVERNING LAW.
(1) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND MADE BY THE
ADMINISTRATIVE AGENT AND LENDERS AND ACCEPTED BY BORROWER IN THE STATE OF NEW
YORK, AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO WERE DISBURSED
FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE OTHER LOAN DOCUMENTS, THE PARTIES
HEREBY AGREE THAT IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT
AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROJECT IS LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS AGREEMENT AND THE NOTES, AND THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(2) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST THE ADMINISTRATIVE AGENT, ANY
LENDER OR BORROWER ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS MAY AT THE
ADMINISTRATIVE AGENT’S OPTION (WHICH DECISION SHALL BE MADE BY THE MAJORITY
LENDERS) BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND

 

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BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT THE CHIEF LEGAL
OFFICER OF MORGANS GROUP LLC, 475 TENTH AVENUE, NEW YORK, NEW YORK 10018 AS ITS
AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL
PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS
UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR
DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (A) SHALL GIVE PROMPT NOTICE TO
THE ADMINISTRATIVE AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (B) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (C) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
Section 12.22 Entire Agreement. This Agreement and the other Loan Documents
embody the entire agreement and understanding between the Administrative Agent,
the Lenders and Borrower and supersede all prior agreements and understandings
between such parties relating to the subject matter hereof and thereof.
Accordingly, the Loan Documents may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
Section 12.23 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.
Section 12.24 Assignments and Participations.
(1) Assignments by Borrower. Borrower may not assign any of its rights or
obligations hereunder, or under the Notes or under the other Loan Documents
without the prior consent of all of the Lenders and the Administrative Agent.

 

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(2) Assignments by the Lenders. Each Lender may assign any of its Loans, its
Note and its Commitment (but only with the consent of the Administrative Agent
and, in the event of a proposed assignment to a Person which is not an Eligible
Assignee, the consent of Borrower, which consent shall not be unreasonably
withheld and shall be deemed granted if not received within five (5) Business
Days following written request therefore); provided that:
(a) no such consent by the Administrative Agent or Borrower shall be required in
the case of any assignment by any Lender to another Lender or an Affiliate of
such Lender or such other Lender (provided that in the case of an assignment to
any such Affiliate, the assigning Lender will not be released from its
obligations under the Loan Documents and the Administrative Agent may continue
to deal only with such assigning Lender, unless such Affiliate is also an
Eligible Assignee);
(b) except to the extent the Administrative Agent shall otherwise consent, any
such partial assignment (other than to another Lender or an affiliate of a
Lender) shall be in an amount at least equal to $10,000,000;
(c) each such assignment (including an assignment to another Lender or an
affiliate of a Lender) by a Lender of its Loans or Commitment shall be made in
such manner so that the same portion of its Loans and Commitment is assigned to
the respective assignee;
(d) subject to the applicable Lender’s compliance with the provisions of clauses
(b) and (c) above, the Administrative Agent’s consent to an assignment shall not
be unreasonably withheld, delayed or conditioned if (i) such assignment is made
to an Eligible Assignee, and (ii) the provisions of clause (e) have been
satisfied; and
(e) upon execution and delivery by the assignee (even if already a Lender) to
Borrower and the Administrative Agent of an Assignment and Acceptance pursuant
to which such assignee agrees to become a “Lender” hereunder (if not already a
Lender) having the Commitment and Loans specified in such instrument, and upon
consent thereto by the Administrative Agent to the extent required above, the
assignee shall have, to the extent of such assignment (unless otherwise
consented to by the Administrative Agent), the obligations, rights and benefits
of a Lender hereunder holding the Commitment and Loans (or portions thereof)
assigned to it (in addition to the Commitment and Loans, if any, theretofore
held by such assignee) and, except as provided in Section 12.24(2)(a), the
assigning Lender shall, to the extent of such assignment, be released from the
Commitment (or portion thereof) so assigned. Upon each such assignment the
assigning Lender shall pay the Administrative Agent a processing and recording
fee of $3,500 and the reasonable fees and disbursements of the Administrative
Agent’s counsel incurred in connection therewith.
(3) Participations.
(a) A Lender may sell or agree to sell to one or more other Persons (each a
“Participant”) a participation in all or any part of any Loans held by it, or in
its Commitment, provided (A) such Lender’s obligations under this Agreement and
the other Loan Documents shall remain unchanged, (B) such Lender shall remain
solely responsible to the other applicable parties hereto for the performance of
such obligations and (C) Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
the other Loan Documents. In no event shall a Lender that sells a participation
agree with the Participant to take or refrain from taking any action hereunder
or under any other Loan Document except that such Lender may agree with the
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will not, without the consent of the Participant, agree to (i) increase or
extend the term of such Lender’s Commitment, (ii) extend the date fixed for the
payment of principal of or interest on the related Loan or Loans or any portion
of any fee hereunder payable to the Participant, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a level below the
rate at which the Participant is entitled to receive such interest or fee or
(v) consent to any modification, supplement or waiver hereof or of any of the
other Loan Documents to the extent that the same, under Section 12.2, requires
the consent of each Lender. Subject to subsection (3)(b) of this Section 12.24,
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.9(1), 2.9(5), and 2.9(6) to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to subsection (2) of this
Section 12.24. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 12.24 as though it were a Lender; provided
that such Participant agrees to be subject to Section 12.24 as though it were a
Lender.
(b) A Participant shall not be entitled to receive any greater payment under
Section 2.9(1) or 2.9(6) than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with Borrower’s prior
written consent. A Participant that is a non-U.S. Person that would become a
Lender shall not be entitled to the benefits of Section 2.9(6) unless Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of Borrower, to comply with Section 2.9(6) as though it
were a Lender.
(4) Certain Pledges. In addition to the assignments and participations permitted
under the foregoing provisions of this Section 12.24 (but without being subject
thereto), any Lender may (without notice to Borrower, the Administrative Agent
or any other Lender and without payment of any fee) assign and pledge all or any
portion of its Loans and its Note to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any operating circular issued by such
Federal Reserve Bank, and such Loans and Note shall be fully transferable as
provided therein. No such assignment shall release the assigning Lender from its
obligations hereunder.
(5) Provision of Information to Assignees and Participants. A Lender may furnish
any information concerning Borrower, any Borrower Party or any of their
respective Affiliates or the Project in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants).
(6) No Assignments to Borrower or Affiliates. Anything in this Section 12.24 to
the contrary notwithstanding, no Lender may assign or participate any interest
in any Loan held by it hereunder to Borrower or any of its Affiliates without
the prior consent of each Lender.
Section 12.25 Brokers. Borrower hereby represents to the Administrative Agent
and each Lender Borrower has not dealt with any broker, underwriters, placement
agent, or finder in connection with the transactions contemplated by this
Agreement and the other Loan Documents, other than Ditmas Capital (the
“Broker”). Borrower hereby agrees to pay all fees and commissions due and
payable to Broker and to indemnify and hold the Administrative Agent and each
Lender harmless from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from a claim by any
Person (including Broker) that such Person acted on behalf of such Borrower in
connection with the transactions contemplated herein.

 

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Section 12.26 Right of Setoff.
(1) Upon the occurrence and during the continuance of any Event of Default, each
of the Lenders is, subject (as between the Lenders) to the provisions of
subsection (3) of this Section 12.26, hereby authorized at any time and from
time to time, without notice to Borrower (any such notice being expressly waived
by Borrower) and to the fullest extent permitted by law, to setoff and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held, and other indebtedness at any time owing, by such Lender in any
of its offices, in Dollars or in any other currency, to or for the credit or the
account of Borrower against any and all of the respective obligations of
Borrower now or hereafter existing under the Loan Documents, irrespective of
whether or not such Lender or any other Lender shall have made any demand
hereunder and although such obligations may be contingent or unmatured and such
deposits or indebtedness may be unmatured. Each Lender hereby acknowledges that
the exercise by any Lender of offset, setoff, banker’s lien, or similar rights
against any deposit or other indebtedness of Borrower whether or not located in
California or any other state with certain laws restricting lenders from
pursuing multiple collection methods, could result under such laws in
significant impairment of the ability of all the Lenders to recover any further
amounts in respect of the Loan. Therefore, each Lender agrees that no Lender
shall exercise any such right of setoff, banker’s lien, or otherwise, against
any assets of Borrower (including all general or special, time or demand,
provisional or other deposits and other indebtedness owing by such Lender to or
for the credit or the account of Borrower) without the prior written consent of
the Administrative Agent and the Majority Lenders.
(2) Each Lender shall promptly notify Borrower and the Administrative Agent
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
of the Lenders under this Section 12.26 are in addition to other rights and
remedies (including other rights of setoff) which the Lenders may have.
(3) If an Event of Default has resulted in the Loans becoming due and payable
prior to the stated maturity thereof, each Lender agrees that it shall turn over
to the Administrative Agent any payment (whether voluntary or involuntary,
through the exercise of any right of setoff or otherwise) on account of the
Loans held by it in excess of its ratable portion of payments on account of the
Loans obtained by all the Lenders.
Section 12.27 Reserved.
Section 12.28 Mortgage Loan Defaults.
(1) Without limiting the generality of the other provisions of this Agreement,
and without waiving or releasing Borrower from any of its obligations hereunder,
if there shall exist any Event of Default under the Mortgage Loan Documents or
if Mortgage Loan Administrative Agent asserts that an Event of Default has
occurred and is continuing under the Mortgage Loan Documents (whether or not
Mortgage Loan Administrative Agent shall have delivered proper notice to
Mortgage Borrower, and without regard to any other defenses or offset rights
Mortgage Borrower may have against Mortgage Loan Administrative Agent (on behalf
of Mortgage Lender), Borrower hereby expressly agrees that Administrative Agent
(on behalf of Lenders) shall have the immediate right, without notice to or
demand on Borrower or Mortgage Borrower, but shall be under no obligation:
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all or any part of the Mortgage Loan, and any other sums, that are then due and
payable and to perform any act or take any action on behalf of Mortgage
Borrower, as may be appropriate, to cause all of the terms, covenants and
conditions of the Mortgage Loan Documents on the part of Mortgage Borrower to be
performed or observed thereunder to be promptly performed or observed; and
(ii) to pay any other amounts and take any other action as Administrative Agent,
in its sole and absolute discretion, shall deem advisable to protect or preserve
the rights and interests of Lenders in the Loans and/or the Collateral.
Administrative Agent shall have no obligation to complete any cure or attempted
cure undertaken or commenced by Administrative Agent. All sums so paid and the
costs and expenses incurred by Administrative Agent in exercising rights under
this Section 12.28(1) (including, without limitation, reasonable attorneys’ and
other professional fees), with interest at the Default Rate, for the period from
the date of demand by Administrative Agent to Borrower for such payments to the
date of payment to Administrative Agent, shall constitute a portion of the Debt,
shall be secured by the Pledge Agreement and shall be due and payable to
Administrative Agent within two Business Days following demand therefor.
(2) Subject to the rights of tenants and the owners of Units, Borrower hereby
grants, and shall cause Mortgage Borrower to grant, Administrative Agent and any
Person designated by Administrative Agent the right to enter upon the Project at
any time for the purpose of carrying out the rights granted to Administrative
Agent under this Section 12.28. Borrower shall not, and shall not cause or
permit Mortgage Borrower or any other Person to impede, interfere with, hinder
or delay, any effort or action on the part of Administrative Agent to cure any
default or asserted default under the Mortgage Loan, or to otherwise protect or
preserve Administrative Agent’s interests in the Loans and the Collateral,
including the Project in accordance with the provisions of this Agreement and
the other Loan Documents.
(3) Borrower hereby indemnifies Lenders and Administrative Agent from and
against all out-of-pocket liabilities, obligations, losses, damages, penalties,
assessments, actions, or causes of action, judgments, suits, claims, demands,
costs, expenses (including, without limitation, reasonable attorneys’ and other
professional fees, whether or not suit is brought, and settlement costs), and
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Administrative Agent as a result of the foregoing actions
described in Section 12.28(1). Administrative Agent shall have no obligation to
Borrower, Mortgage Borrower or any other party to make any such payment or
performance. Borrower shall not impede, interfere with, hinder or delay, and
shall cause Mortgage Borrower to not impede, interfere with, hinder or delay,
any effort or action on the part of Administrative Agent to cure any default or
asserted default under the Mortgage Loan, or to otherwise protect or preserve
Administrative Agent’s interests in the Loans and the Collateral following a
default or asserted default under the Mortgage Loan.

 

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(4) If Administrative Agent shall receive a copy of any notice of default under
the Mortgage Loan Documents sent by Mortgage Loan Administrative Agent to
Mortgage Borrower, such notice shall constitute full protection to Lender for
any action taken or omitted to be taken by Administrative Agent, in good faith,
in reliance thereon. As a material inducement to Administrative Agent making the
Loans, Borrower hereby absolutely and unconditionally release and waive all
claims against Administrative Agent arising out of Administrative Agent’s
exercise of its rights and remedies provided in this Section 12.28(4) other than
claims arising out of the fraud, illegal acts, gross negligence or willful
misconduct of Administrative Agent. In the event that Administrative Agent (on
behalf of Lenders) makes any payment in respect of the Mortgage Loan,
Administrative Agent (on behalf of Lenders) shall be subrogated to all of the
rights of Mortgage Loan Administrative Agent (on behalf of Mortgage Lender)
under the Mortgage Loan Documents against the Project, in addition to all other
rights it may have under the Loan Documents.
(5) Any default under the Mortgage Loan which is cured by Administrative Agent
(on behalf of Lenders), whether or not such cure is prior to the expiration of
any applicable grace, notice or cure period under the Mortgage Loan Documents,
shall constitute an immediate Event of Default under this Agreement without any
notice, grace or cure period otherwise applicable under this Agreement.
(6) In the event that Administrative Agent (on behalf of Lenders) makes any
payment in respect of the Mortgage Loan, Administrative Agent (on behalf of
Lenders) shall be subrogated to all of the rights of Mortgage Loan
Administrative Agent (on behalf of Mortgage Lender) under the Mortgage Loan
Documents against the Project and Mortgage Borrower in addition to all other
rights Lender may have under the Loan Documents or applicable law.
Section 12.29 Intercreditor Agreement.
(1) Lenders and Mortgage Lender are parties to a certain intercreditor agreement
dated as of the Original Closing Date (the “Intercreditor Agreement”)
memorializing their relative rights and obligations with respect to the Mortgage
Loan, the Loans, Mortgage Borrower, Borrower, the Collateral and the Project.
Borrower and Mortgage Borrower hereby acknowledge and agree that (i) such
Intercreditor Agreement is intended solely for the benefit of Lenders and
Mortgage Lender and (ii) Borrower and Mortgage Borrower are not intended
third-party beneficiaries of any of the provisions therein and shall not be
entitled to rely on any of the provisions contained therein. Lenders and
Mortgage Lender shall have no obligation to disclose to Borrower the contents of
the Intercreditor Agreement. Borrower’s obligations hereunder are independent of
such Intercreditor Agreement and remain unmodified by the terms and provisions
thereof.
(2) In the event the Administrative Agent (on behalf of the Lenders) is required
pursuant to the terms of the Intercreditor Agreement to pay over any payment or
distribution of assets, whether in cash, property or securities which is applied
to the Debt, including, without limitation, any proceeds of the Project
previously received by Administrative Agent (on behalf of the Lenders) on
account of the Loans to the Mortgage Loan Administrative Agent (on behalf of the
Mortgage Lender), then Borrower agrees to indemnify Administrative Agent (on
behalf of the Lenders) and Lenders for any amounts so paid, and any amount so
paid shall continue to be owing pursuant to the Loan Documents as part of the
Debt notwithstanding the prior receipt of such payment by Administrative Agent
(on behalf of the Lenders).

 

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Section 12.30 Discussions with Mortgage Lender. In connection with the exercise
of its rights set forth in the Loan Documents, Administrative Agent shall have
the right at any time to discuss the Project, the Mortgage Loan, the Loans or
any other matter directly with Mortgage Lender, Mortgage Loan Administrative
Agent or Mortgage Lender’s consultants, agents or representatives without notice
to or permission from Borrower or any other Borrower Party, nor shall
Administrative Agent have any obligation to disclose such discussions or the
contents thereof with Borrower or any other Borrower Party.
Section 12.31 Independent Approval Rights. If any action, proposed action or
other decision is consented to or approved by Mortgage Loan Administrative
Agent, such consent or approval shall not be binding or controlling on
Administrative Agent. Borrower hereby acknowledges and agrees that (i) the risks
of Mortgage Lender in making the Mortgage Loan are different from the risks of
Lenders in making the Loans, (ii) in determining whether to grant, deny,
withhold or condition any requested consent or approval Mortgage Loan
Administrative Agent and the Administrative Agent may reasonably reach different
conclusions, and (iii) Administrative Agent has an absolute independent right to
grant, deny, withhold or condition any requested consent or approval based on
its own point of view. Further, the denial by the Administrative Agent of a
requested consent or approval shall not create any liability or other obligation
of Lenders or Administrative Agent if the denial of such consent or approval
results directly or indirectly in a default under the Mortgage Loan, and
Borrower hereby waives any claim of liability against Lenders or Administrative
Agent arising from any such denial.
ARTICLE 13
LIMITATIONS ON LIABILITY
Section 13.1 Limitation on Liability. Except as provided below, Borrower shall
not be personally liable for amounts due under the Loan Documents. Borrower
shall be personally liable to the Administrative Agent and the Lenders for any
deficiency, loss or damage suffered by the Administrative Agent or any Lender
because of: (1) Borrower’s or Mortgage Borrower’s commission of a criminal act,
(2) the willful misapplication by Borrower or any other Borrower Party of any
funds derived from the Project, including security deposits, Net Sales Proceeds,
escrow account funds, insurance proceeds and condemnation awards; (3) the fraud
or material misrepresentation by Borrower or any other Borrower Party made in or
in connection with the Loan Documents or the Loan; (4) Mortgage Borrower’s
collection of rents more than one month in advance or entering into or modifying
leases, or receipt of monies by Borrower or any other Borrower Party in
connection with the modification of any leases, in violation of this Agreement
or any of the other Loan Documents; (5) Borrower’s or Mortgage Borrower’s
failure to apply proceeds of rents or any other payments in respect of the
leases and other income of the Project or any other collateral to the costs of
maintenance and operation of the Project and to the payment of taxes, lien
claims, insurance premiums, Debt Service and other amounts due under the Loan
Documents; (6) any Borrower Party’s failure to comply with provisions of the
Loan Documents prohibiting the sale, transfer or encumbrance of the Project, the
collateral, or any direct or indirect ownership interest in Borrower or Mortgage
Borrower; (7) to the extent of sufficient Operating Revenues, Mortgage
Borrower’s failure to maintain insurance as required by this Agreement or to pay
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similar taxes required to be paid by any Person in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents; (8) intentional or grossly negligent
damage or destruction to the Project caused by the acts or omissions of
Borrower, Mortgage Borrower or their respective agents, employees, or
contractors; (9) a breach of Borrower’s obligations with respect to
environmental matters under Article 5; (10) Borrower’s failure to pay for any
loss, liability or expense (including attorneys’ fees) incurred by the
Administrative Agent or any Lender arising out of any claim or allegation made
by Borrower, its successors or assigns, or any creditor of Borrower, that this
Agreement or the transactions contemplated by the Loan Documents establish a
joint venture, partnership or other similar arrangement between Borrower, the
Administrative Agent and any Lender; (11) any brokerage commission or finder’s
fees claimed in connection with the transactions contemplated by the Loan
Documents; or (12) Borrower’s or Mortgage Borrower’s intentional interference
with the Administrative Agent’s exercise of rights and remedies under the Loan
Documents. None of the foregoing limitations on the personal liability of
Borrower shall modify, diminish or discharge the personal liability of any
Joinder Party. Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents: (a) neither the Administrative Agent nor
the Lenders shall be deemed to have waived any right which the Administrative
Agent or any Lender may have under Sections 506(a), 506(b), 1111(b) or any other
provision of the Bankruptcy Code, or corresponding or superseding sections of
the Bankruptcy Amendments and Federal Judgeship Act of 1984, as such sections
may be amended, to file a claim for the full amount due to the Administrative
Agent or such Lender under the Loan Documents or to require that all collateral
shall continue to secure the amounts due under the Loan Documents; and (b) the
Secured Indebtedness shall be fully recourse to Borrower and Joinder Parties in
the event that: (i) there is a default under Section 10.9 and the involuntary
case or other proceeding against a Bankruptcy Party referred to therein has been
commenced by or with the collusion of another Bankruptcy Party; (ii) there is a
default under Section 10.10; (iii) Borrower fails to obtain the Administrative
Agent’s prior written consent to any subordinate financing or other voluntary
Lien encumbering the Collateral or the Project; (iv) Borrower fails to obtain
the Administrative Agent’s prior written consent to any assignment, transfer, or
conveyance of the Project or any interest therein or of any direct or indirect
interest in Borrower, Mortgage Borrower, or any other Borrower Party, as
required by the Loan Documents; or (v) Mortgage Borrower or any other Borrower
Party which is a party to the Forward Purchase Contract shall be default in the
performance of its obligations thereunder or shall bring any action alleging
that the Forward Purchase Contract is invalid or unenforceable in any respect.
Section 13.2 Limitation on Liability of the Administrative Agent’s and the
Lenders’ Officers, Employees, etc. Any obligation or liability whatsoever of the
Administrative Agent or any Lender which may arise at any time under this
Agreement or any other Loan Document shall be satisfied, if at all, out of the
Administrative Agent’s or such Lender’s respective assets only. No such
obligation or liability shall be personally binding upon, nor shall resort for
the enforcement thereof be had to, the property of any of the Administrative
Agent’s or any Lender’s shareholders, directors, officers, employees or agents,
regardless of whether such obligation or liability is in the nature of contract,
tort or otherwise.

 

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ARTICLE 14
BUILDING CONVERSION; PAYMENT OF
RELEASE PRICES; SALE OF UNITS
Section 14.1 Completion of Building Conversion.
(1) Borrower shall cause Mortgage Borrower to diligently pursue to completion
the Building Conversion in accordance with the Plans and Specifications, the
Project Budget, Applicable Law, the Mortgage Loan Documents and this Agreement,
free and clear of Liens or claims for Liens for materials supplied and for labor
or services performed in connection therewith. Without limiting the generality
of the forgoing, Borrower shall cause Mortgage Borrower to cause (a) the Hotel
Opening to occur by not later than the Hotel Opening Deadline, and (b) Building
Conversion to occur by not later than the Construction Completion Deadline,
provided that the Construction Completion Deadline may be extended for a period
of time, not to exceed sixty (60) days, as a result of Unavoidable Delay.
Borrower shall or shall cause Mortgage Borrower to pay all the expenses and
costs of the Administrative Agent in connection with the Building Conversion,
including without limitation, the Administrative Agent’s reasonable attorneys’
fees, intangible taxes, additional title insurance premiums, recording fees and
all other costs connected with the funding of advances.
(2) Borrower shall not permit Mortgage Borrower to modify the Plans and
Specifications in any material respect, nor shall Borrower permit Mortgage
Borrower to modify the Project Budget, in each case without the Administrative
Agent’s prior written consent; provided, however, no such consent shall be
required with respect to increases in that portion of the Project Budget setting
forth the cost to complete the Building Conversion which, when combined with any
other increases in such portion of the Project Budget occurring after the
Amendment Closing Date, do not exceed $1,700,000. Administrative Agent shall
provide its approval (or disapproval with specific reasons therefor) within ten
(10) Business Days of its receipt of Borrower’s submissions hereunder and such
consent shall not be unreasonably withheld.
Section 14.2 Marketing and Sales Program; Sales of Units; Deposits. Borrower
shall cause Mortgage Borrower to diligently pursue the sale of all Units in good
faith and in accordance with the sales and marketing program in effect at the
Project as of the Amendment Closing Date, as well as, to the extent requested by
Administrative Agent, in accordance with a formal written sales program
delivered to and approved in writing by the Administrative Agent subsequent to
the Original Closing Date (the “Approved Sales Program”). Borrower shall cause
Mortgage Borrower to obtain the Administrative Agent’s prior written approval
for any material deviation from the sales and marketing program currently being
employed at the Project by Mortgage Borrower, as well as to any material
deviation from the Approved Sales Program. All reservations, marketing, and
sales, including the Approved Sales Program, shall be in compliance with all
Applicable Laws, including the Condominium Act. Borrower shall cause Mortgage
Borrower to timely and fully comply with all of its obligation under the
Purchase Contracts. Without limiting the generality of the foregoing, each
deposit under a Purchase Contract shall be held in escrow in the Condominium
Escrow in accordance with Applicable Law and a Condominium Escrow Agreement
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Administrative Agent until the earlier of (a) the closing of the sale of the
respective Unit, at which time it shall be applied to the purchase price for
such Unit in accordance with such Purchase Contract, or (b) such deposit becomes
payable to Mortgage Borrower other than as a result of the closing of such Unit
(e.g., as a result of a default by the purchaser under such Purchase Contract),
at which time Borrower shall cause Mortgage Borrower to cause such deposit to be
released from the Condominium Escrow to the Mortgage Loan Administrative Agent
to be applied in accordance with Section 14.2 of the Mortgage Loan Agreement
until such time as the Mortgage Loan has been repaid in full (thereafter,
Borrower shall pay such deposit to the Administrative Agent to be applied to the
outstanding principal under the Loans).
Section 14.3 Sale of Units and Payment of Release Price. Borrower shall not
allow Mortgage Borrower to permit the release of any Units from the Liens of the
Mortgage Loan Documents except upon satisfaction of the “Partial Release
Conditions” set forth in the Mortgage Loan Agreement. In the event that the
Mortgage Loan is fully repaid prior to the Maturity Date, Borrower shall not
permit the Mortgage Loan Borrower to consummate the sale of any Unit unless the
Administrative Agent has determined that each of the following conditions shall
have been satisfied:
(1) No Event of Default or Potential Default shall exist;
(2) Borrower shall pay to the Administrative Agent the Release Price for such
Unit, which payment shall be applied in accordance with the provisions of this
Agreement;
(3) The Administrative Agent shall be given not less than fifteen (15) Business
Day’s prior written notice of such sale, which notice shall describe the Unit
and the name of the purchaser and which notice shall be accompanied by a copy of
the fully executed Purchase Contract and a copy of the certificate of occupancy
or its equivalent for any Unit that has been the subject of construction work
for which a building permit was required or issued; and
(4) Borrower shall pay all costs and expenses incurred by the Administrative
Agent in connection with any partial release, including without limitation, the
Administrative Agent’s attorneys’ fees and costs, recording fees and escrow
fees.
Section 14.4 Application of Excess Cash Flow. Borrower shall cause all Excess
Cash Flow to be applied in accordance with Section 14.4 of the Mortgage Loan
Agreement. In the event that the Mortgage Lender waives the requirements of
Sections 14.4 or 14.6 of the Mortgage Loan Agreement or the Mortgage Loan has
been repaid in full, Borrower shall comply with Sections 14.4 and 14.6 of the
Mortgage Loan Agreement as though they are a part of this Agreement.
Section 14.5 Sale of Parking Spaces. During the term of this Agreement, Borrower
shall not permit Mortgage Borrower to sell or convey any Parking Space to any
Person who is not also a purchaser or owner of a Unit. The foregoing prohibition
shall not prohibit Borrower or Mortgage Borrower from entering into parking
agreements with tenants of the Project, provided that the term of any such
agreement shall extend no longer than the term of the respective lease. The
Parking Space Release Price from any sale or conveyance of a Parking Space other
than pursuant to a Qualified Purchase Contract shall be paid to the Mortgage
Loan Administrative Agent and applied to reduce the principal outstanding
balance under the Mortgage Loan until such time as the Mortgage Loan has been
repaid in full. Thereafter, in the event Borrower is permitted to sell a Parking
Space separate from a sale of a Unit, as a condition to such sale, Borrower
shall pay to the Administrative Agent an amount equal to the Parking Space
Release Price for such Parking Space.

 

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ARTICLE 15
THE ADMINISTRATIVE AGENT
Section 15.1 Appointment, Powers and Immunities. Each Lender hereby appoints and
authorizes the Administrative Agent to act as its agent hereunder and under the
other Loan Documents with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement and of the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent (which term as used in this sentence and in
Section 15.5 and the first sentence of Section 15.6 shall include reference to
its affiliates and its own and its affiliates’ officers, directors, employees
and agents):
(1) shall have no duties or responsibilities except those expressly set forth in
this Agreement and in the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Lender except to the
extent that the Administrative Agent acts as an agent with respect to the
receipt or payment of funds, nor shall the Administrative Agent have any
fiduciary duty to Borrower nor shall any Lender have any fiduciary duty to
Borrower or any other Lender;
(2) shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Loan Document or any other
document referred to or provided for herein or therein or for any failure by
Borrower or any other Person to perform any of its obligations hereunder or
thereunder; and
(3) as among Lenders (and not as it relates to Borrower) shall not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other Loan Document or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except to
the extent any such action taken or omitted violates the Administrative Agent’s
standard of care set forth in the first sentence of Section 15.5.
(4) shall not, except to the extent expressly instructed by the Majority Lenders
with respect to collateral security under the Pledge Agreement, be required to
initiate or conduct any litigation or collection proceedings hereunder or under
any other Loan Document; and
(5) shall not be required to take any action which is contrary to this Agreement
or any other Loan Document or Applicable Law.

 

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The relationship between the Administrative Agent and each Lender is a
contractual relationship only, and nothing herein shall be deemed to impose on
the Administrative Agent any obligations other than those for which express
provision is made herein or in the other Loan Documents. The Administrative
Agent may employ agents and attorneys in fact, and may delegate all or any part
of its obligations hereunder, to third parties and shall not be responsible for
the negligence or misconduct of any such agents, attorneys in fact or third
parties selected by it in good faith. The Administrative Agent may deem and
treat the payee of a Note as the holder thereof for all purposes hereof unless
and until a notice of the assignment or transfer thereof shall have been filed
with the Administrative Agent, any such assignment or transfer to be subject to
the provisions of Section 12.24. Except to the extent expressly provided in
Section 15.8, the provisions of this Article 15 are solely for the benefit of
the Administrative Agent and the Lenders, and Borrower shall not have any rights
as a third-party beneficiary of any of the provisions hereof and the Lenders may
modify or waive such provisions of this Article 15 in their sole and absolute
discretion.
Section 15.2 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telegram or
cable) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Loan Document, the Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Majority
Lenders, and such instructions of the Majority Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders.
Section 15.3 Defaults.
(1) The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of a Potential Default or Event of Default unless the
Administrative Agent has received notice from a Lender or Borrower specifying
such Potential Default or Event of Default and stating that such notice is a
“Notice of Default”. In the event that the Administrative Agent receives such a
notice of the occurrence of a Potential Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. Within ten
(10) days of delivery of such notice of Potential Default or Event of Default
from the Administrative Agent to the Lenders (or such shorter period of time as
the Administrative Agent determines is necessary), the Administrative Agent and
the Lenders shall consult with each other to determine a proposed course of
action. The Administrative Agent shall (subject to Section 15.7) take such
action with respect to such Potential Default or Event of Default as shall be
directed by the Majority Lenders, provided that, (A) unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, including decisions (1) to make protective advances that the
Administrative Agent determines are necessary to protect or maintain the Project
and (2) to foreclose on any of the Project or exercise any other remedy, with
respect to such Potential Default or Event of Default as it shall deem advisable
in the interest of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with the
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and (B) no actions approved by the Majority Lenders shall violate the Loan
Documents or Applicable Law. Each of the Lenders acknowledges and agrees that no
individual Lender may separately enforce or exercise any of the provisions of
any of the Loan Documents (including the Notes) other than through the
Administrative Agent. The Administrative Agent shall advise the Lenders of all
material actions which the Administrative Agent takes in accordance with the
provisions of this Section 15.3(1) and shall continue to consult with the
Lenders with respect to all of such actions. Notwithstanding the foregoing, if
the Majority Lenders shall at any time direct that a different or additional
remedial action be taken from that already undertaken by the Administrative
Agent, including the commencement of foreclosure proceedings, such different or
additional remedial action shall be taken in lieu of or in addition to, the
prosecution of such action taken by the Administrative Agent; provided that all
actions already taken by the Administrative Agent pursuant to this
Section 15.3(1) shall be valid and binding on each Lender. All money (other than
money subject to the provisions of Section 15.7) received from any enforcement
actions, including the proceeds of a foreclosure sale of the Project or
Collateral, shall be applied, first, to the payment or reimbursement of the
Administrative Agent for expenses incurred in accordance with the provisions of
Sections 15.3(2), (3) and (4) and 15.5, second, to the payment or reimbursement
of the Lenders for expenses incurred in accordance with the provisions of
Sections 15.3(2), (3) and (4) and 15.5; third, to the payment or reimbursement
of the Lenders for any advances made pursuant to Section 15.3(2); and fourth,
pari passu to the Lenders in accordance with their respective Proportionate
Shares, unless an Unpaid Amount is owed pursuant to Section 15.12, in which
event such Unpaid Amount shall be deducted from the portion of such proceeds of
the Defaulting Lender and be applied to payment of such Unpaid Amount to the
Special Advance Lender.
(2) All losses with respect to interest (including interest at the Default Rate)
and other sums payable pursuant to the Notes or incurred in connection with the
Loans shall be borne by the Lenders in accordance with their respective
proportionate shares of the Loans. All losses incurred in connection with the
Loans, the enforcement thereof or the realization of the security therefor,
shall be borne by the Lenders in accordance with their respective proportionate
shares of the Loan, and the Lenders shall promptly, upon request, remit to the
Administrative Agent their respective proportionate shares of (i) any expenses
incurred by the Administrative Agent in connection with any Default to the
extent any expenses have not been paid by Borrower, (ii) any advances made to
pay taxes or insurance or otherwise to preserve the Lien of the Pledge Agreement
or to preserve and protect the Collateral, (iii) any other expenses incurred in
connection with the enforcement of the Pledge Agreement or other Loan Documents,
and (iv) any expenses incurred in connection with the consummation of the Loans
not paid or provided for by Borrower. To the extent any such advances are
recovered in connection with the enforcement of the Pledge Agreement or the
other Loan Documents, each Lender shall be paid its proportionate share of such
recovery after deduction of the expenses of the Administrative Agent and the
Lenders.
(3) If, at the direction of the Majority Lenders or otherwise as provided in
Section 15.3(1), any action(s) is brought to collect on the Notes or enforce the
Pledge Agreement or any other Loan Document, such action shall (to the extent
permitted under Applicable Law and the decisions of the court in which such
action is brought) be an action brought by the Administrative Agent and the
Lenders, collectively, to collect on all or a portion of the Notes or enforce
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Loan Document and counsel selected by the Administrative Agent shall prosecute
any such action on behalf of the Administrative Agent and the Lenders, and the
Administrative Agent and the Lenders shall consult and cooperate with each other
in the prosecution thereof. All decisions concerning the appointment of a
receiver while such action is pending, the conduct of such receivership, the
conduct of such action, the collection of any judgment entered in such action
and the settlement of such action shall be made by the Administrative Agent. The
costs and expenses of any such action shall be borne by the Lenders in
accordance with each of their respective proportionate shares.
(4) If, at the direction of the Majority Lenders or otherwise as provided in
Section 15.3(1), any action(s) is brought to foreclose the Pledge Agreement such
action shall (to the extent permitted under Applicable Law and the decisions of
the court in which such action is brought) be an action brought by the
Administrative Agent and the Lenders, collectively, to foreclose all or a
portion of the Pledge Agreement and collect on the Notes. Counsel selected by
the Administrative Agent shall prosecute any such foreclosure on behalf of the
Administrative Agent and the Lenders and the Administrative Agent and the
Lenders shall consult and cooperate with each other in the prosecution thereof.
All decisions concerning the conduct of such foreclosure and the manner of
taking and holding title to the Collateral (other than as set forth in
subsection (5) below), the sale of the Collateral after realization of the
Collateral under the Pledge Agreement, and the commencement and conduct of any
deficiency judgment proceeding shall be made by the Administrative Agent. The
costs and expenses of foreclosure will be borne by the Lenders in accordance
with their respective proportionate shares.
(5) If title to the Collateral is acquired after a realization of the Collateral
under the Pledge Agreement, title shall be held by the Administrative Agent in
its own name in trust for the Lenders or, at the Administrative Agent’s
election, in the name of a wholly owned subsidiary of the Administrative Agent
on behalf of the Lenders.
(6) If the Administrative Agent (or its subsidiary) acquires title to the
Collateral, all material decisions with respect to the possession, ownership,
development, construction, control, operation, leasing, management and sale of
the Project shall be made by the Administrative Agent. All income or other money
received after so acquiring title to or taking possession of the Collateral,
including income from the operation and management of the Project and the
proceeds of a sale of the Project, shall be applied, first, to the payment or
reimbursement of the Administrative Agent and the expenses incurred in
accordance with the provisions of this Article 15, second, to the payment of
operating expenses with respect to the Project; third, to the establishment of
reasonable reserves for the operation of the Project; fourth, to the payment or
reimbursement of the Lenders for any advances made pursuant to Section 15.3(2);
fifth to fund any capital improvement, leasing and other reserves; and sixth, to
the Lenders in accordance with their respective proportionate shares, unless an
Unpaid Amount is owed pursuant to Section 15.12, in which event such Unpaid
Amount shall be deducted from the portion of such proceeds of the Defaulting
Lender and be applied to payment of such Unpaid Amount to the Special Advance
Lender.

 

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Section 15.4 Rights as a Lender. With respect to its Commitment and the Loans
made by it Eurohypo (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. Eurohypo (and any successor acting as Administrative Agent) and its
affiliates may (without having to account therefor to any Lender) lend money to,
make investments in and generally engage in any kind of lending, trust or other
business with Borrower (and any of its Affiliates) as if it were not acting as
the Administrative Agent, and Eurohypo and its affiliates may accept fees and
other consideration from Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.
Section 15.5 Standard of Care; Indemnification. In performing its duties under
the Loan Documents, the Administrative Agent will exercise the same degree of
care as it normally exercises in connection with real estate loans in which no
syndication or participations are involved, but the Administrative Agent shall
have no further responsibility to any Lender except as expressly provided herein
and except for its own gross negligence or willful misconduct which resulted in
actual loss to such Lender, and, except to such extent, the Administrative Agent
shall have no responsibility to any Lender for the failure by the Administrative
Agent to comply with any of the Administrative Agent’s obligations to Borrower
under the Loan Documents or otherwise. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 12.5, but
without limiting the obligations of Borrower under Section 12.5) ratably in
accordance with the aggregate principal amount of the Loans held by the Lenders
(or, if no Loans are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Administrative Agent (including by any Lender) arising out
of or by reason of any investigation in or in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses that Borrower is
obligated to pay under Section 12.5, but excluding, unless a Event of Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the Administrative Agent’s breach of its standard of care set forth in the
first sentence of this Section 15.5.
Section 15.6 Non Reliance on Administrative Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of Borrower and its Affiliates
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Administrative 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 analysis and decisions in taking or not taking action
under this Agreement or under any other Loan Document. Subject to the provisions
of the first sentence of Section 15.5, the Administrative Agent shall not be
required to keep itself informed as to the performance or observance by Borrower
of this Agreement or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the Project or the
books of Borrower or any of its Affiliates. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or as otherwise agreed by the
Administrative Agent and the Lenders, the Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of Borrower
or any of its Affiliates that may come into the possession of the Administrative
Agent or any of its affiliates.

 

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Section 15.7 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder, and under the other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 15.5 against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
Section 15.8 Resignation of Administrative Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and Borrower. Upon
any such resignation, the Majority Lenders shall have the right to appoint a
successor Administrative Agent that shall be a Person that meets the
qualifications of an Eligible Assignee. Such successor Administrative Agent
shall be approved by Borrower, which approval shall not be unreasonably
withheld, delayed or conditioned. If no successor Administrative Agent shall
have been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent’s
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, that shall be
an institutional lender that meets the requirements of the immediately preceding
sentence. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder (if not already discharged therefrom as provided above in
this Section 15.8). The fees payable by Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between Borrower and such successor. After any retiring Administrative
Agent’s resignation hereunder as Administrative Agent, the provision of this
Article 15 and Section 12.5 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 the
Administrative Agent.
Section 15.9 Consents under Loan Documents. As between Borrower and Lenders, the
Administrative Agent may as expressly provided in the Loan Documents and, if not
expressly provided, with the consent of the Majority Lenders (a) grant any
consent or approval required of it or (b) consent to any modification,
supplement or waiver under any of the Loan Documents. If the Administrative
Agent solicits any consents or approvals from the Lenders under any of the Loan
Documents, each Lender shall within ten (10) Business Days of receiving such
request, give the Administrative Agent written notice of its consent or approval
or denial thereof; provided that, if any Lender does not respond within such ten
(10) Business Days, such Lender shall be deemed to have authorized the
Administrative Agent to vote such Lender’s interest with respect to the matter
which was the subject of the Administrative Agent’s solicitation as the
Administrative Agent elects. Any such solicitation by the Administrative Agent
for a consent or approval shall be in writing and shall include a description of
the matter or thing as to which such consent or approval is requested and shall
include the Administrative Agent’s recommended course of action or determination
in respect thereof. After Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article 15 and Section 12.5 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 the Administrative Agent.

 

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Section 15.10 Authorization. The Administrative Agent is hereby authorized by
the Lenders to execute, deliver and perform in accordance with the terms of each
of the Loan Documents to which the Administrative Agent is or is intended to be
a party and each Lender agrees to be bound by all of the agreements of the
Administrative Agent contained in such Loan Documents. Borrower shall be
entitled to rely on all written agreements, approvals and consents received from
the Administrative Agent as being that also of the Lenders, without obtaining
separate acknowledgment or proof of authorization of same.
Section 15.11 Reserved.
Section 15.12 Defaulting Lenders.
(1) If any Lender (a “Defaulting Lender”) shall for any reason fail to (i) make
any respective Loan required pursuant to the terms of this Agreement or (ii) pay
its proportionate share of an advance or disbursement to protect the Collateral
or the Lien of the Pledge Agreement, any of the other Lenders may, but shall not
be obligated to, make all or a portion of the Defaulting Lender’s Loan or
proportionate share of such advance, provided that such Lender gives the
Defaulting Lender and the Administrative Agent prior notice of its intention to
do so. The right to make such advances in respect of the Defaulting Lender shall
be exercisable first by the Lender holding the greatest proportionate share and
thereafter to each of the Lenders in descending order of their respective
proportionate shares of the Loans or in such other manner as the Majority
Lenders (excluding the Defaulting Lender) may agree on. Any Lender making all or
any portion of the Defaulting Lender’s proportionate share of the applicable
Loan or advance in accordance with the foregoing terms and conditions shall be
referred to as a “Special Advance Lender”.
(2) In any case where a Lender becomes a Special Advance Lender (i) the Special
Advance Lender shall be deemed to have purchased, and the Defaulting Lender
shall be deemed to have sold, a senior participation in the Defaulting Lender’s
respective Loan to the extent of the amount so advanced or disbursed (the
“Advanced Amount”) bearing interest (including interest at the Default Rate, if
applicable) and (ii) the Defaulting Lender shall have no voting rights under
this Agreement or any other Loan Documents so long as it is a Defaulting Lender.
It is expressly understood and agreed that each of the respective obligations
under this Agreement and the other Loan Documents, including advancing Loans,
losses incurred in connection with the Loan, including costs and expenses of
enforcement, advancing to preserve the Lien of the Pledge Agreement or to
preserve and protect the Collateral, shall be without regard to any adjustment
in the proportionate shares occasioned by the acts of a Defaulting Lender. The
Special Advance Lender shall be entitled to recover from the Defaulting Lender
an amount (the “Unpaid Amount”) equal to the applicable Advanced Amount, plus
any unpaid interest due and owing with respect thereto, less any repayments
thereof made by the Defaulting Lender immediately upon demand. The Defaulting
Lender shall have the right to repurchase the senior participation in its Loan
from the Special Advance Lender at any time by the payment of the Unpaid Amount.

 

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(3) A Special Advance Lender shall (i) give notice to the Defaulting Lender, the
Administrative Agent and each of the other Lenders (provided that failure to
deliver said notice to any party other than the Defaulting Lender shall not
constitute a default under this Agreement) of the Advance Amount and the
percentage of the Special Advance Lender’s senior participation in the
Defaulting Lender’s Loan and (ii) in the event of the repayment of any of the
Unpaid Amount by the Defaulting Lender, give notice to the Defaulting Lender and
the Administrative Agent of the fact that the Unpaid Amount has been repaid (in
whole or in part), the amount of such repayment and, if applicable, the revised
percentage of the Special Advance Lender’s senior participation. Provided that
the Administrative Agent has received notice of such participation, the
Administrative Agent shall have the same obligations to distribute interest,
principal and other sums received by the Administrative Agent with respect to a
Special Advance Lender’s senior participation as the Administrative Agent has
with respect to the distribution of interest, principal and other sums under
this Agreement; and at the time of making any distributions to the Lenders,
shall make payments to the Special Advance Lender with respect to a Special
Advance Lender’s senior participation in the Defaulting Lender’s Loan out of the
Defaulting Lender’s share of any such distributions.
(4) A Defaulting Lender shall immediately pay to a Special Advance Lender all
sums of any kind paid to or received by the Defaulting Lender from Borrower,
whether pursuant to the terms of this Agreement or the other Loan Documents or
in connection with the realization of the security herefor until the Unpaid
Amount is fully repaid. Notwithstanding the fact that the Defaulting Lender may
temporarily hold such sums, the Defaulting Lender shall be deemed to hold same
as a trustee for the benefit of the Special Advance Lender, it being the express
intention of the Lenders that the Special Advance Lender shall have an ownership
interest in such sums to the extent of the Unpaid Amount.
(5) Each Defaulting Lender shall indemnify, defend and hold the Administrative
Agent and each of the other Lenders harmless from and against any and all
losses, damages, liabilities or expenses (including reasonable attorneys’ fees
and expenses and interest at the Default Rate) which they may sustain or incur
by reason of the Defaulting Lender’s failure or refusal to abide by its
obligations under this Agreement or the other Loan Documents, except to the
extent a Defaulting Lender became a Defaulting Lender due to the gross
negligence or willful misconduct of the Administrative Agent and/or any Lender.
The Administrative Agent shall, after payment of any amounts due to any Special
Advance Lender pursuant to the terms of subsection (3) above, setoff against any
payments due to such Defaulting Lender for the claims of the Administrative
Agent and the other Lenders pursuant to this indemnity.
Section 15.13 Liability of the Administrative Agent. The Administrative Agent
shall not have any liabilities or responsibilities to Borrower on account of the
failure of any Lender (other than the Administrative Agent in its capacity as a
Lender) to perform its obligations hereunder or to any Lender on account of the
failure of Borrower to perform its obligations hereunder or under any other Loan
Document.

 

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Section 15.14 Transfer of Agency Function. Without the consent of Borrower or
any Lender, the Administrative Agent may at any time or from time to time
transfer its functions as the Administrative Agent hereunder to any of its
offices wherever located in the United States; provided that the Administrative
Agent shall promptly notify Borrower and the Lenders thereof.
ARTICLE 16
AMENDMENT AND RESTATEMENT
This Agreement amends, restates, supersedes and replaces the Existing Loan
Agreement in its entirety, and all references in the Loan Documents to the “Loan
Agreement” shall hereafter refer to this Agreement. Except as expressly set
forth in this Agreement and/or in any amendments or modifications to the other
Loan Documents entered into on or after the date hereof, the other Loan
Documents shall remain in full force and effect in accordance with their
respective terms.
ARTICLE 17
RELEASE
In consideration of Administrative Agent’s and each Lender’s execution and
delivery of this Agreement, Borrower and (by its execution of the Joinder
attached hereto) each Joinder Party, on behalf of itself and its heirs,
successors and assigns (collectively, the “Releasing Parties”), remises,
releases, acquits, satisfies and forever discharges Administrative Agent and
each Lender, Administrative Agent’s and each Lender’s predecessors in interest,
and all of the respective past, present and future officers, directors,
employees, agents, servicers, attorneys, representatives, participants, heirs,
successors and assigns of Administrative Agent and each Lender and
Administrative Agent’s and each Lender’s predecessors in interest (collectively,
“Lender Parties”), from any and all manner of debts, accountings, bonds,
warranties, representations, covenants, promises, contracts, controversies,
agreements, liabilities, obligations, expenses, damages, judgments, executions,
actions, claims, demands and causes of action of any nature whatsoever, at law
or in equity, known or unknown, either now accrued or subsequently maturing,
which Borrower or any of the other Releasing Parties now has or hereafter can,
shall or may have by reason of any matter, cause or thing, from the beginning of
the world to and including the date of this Agreement arising out of or relating
to (a) the Loans, including, but not limited to, its administration or funding,
(b) the Loan Documents, (c) the Project or its development, financing and
operation, and (d) any other agreement or transaction between Borrower or any of
the other Releasing Parties and any of Lender Parties relating to the matters
described in (a) through (c) above. Borrower and (by its execution of the
Joinder attached hereto) each Joinder Party, for itself and the other Releasing
Parties, covenants and agrees never to institute or cause to be instituted or
continue prosecution of any suit or other form of action or proceeding of any
kind or nature whatsoever against any of Lender Parties by reason of or in
connection with any of the foregoing matters, claims or causes of action.
[Signature Pages Follow]

 

115

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EXECUTED as of the date first written above.

          LENDER: EUROHYPO AG, NEW YORK BRANCH
      By:   /s/ John Lippmann        Name:   John Lippmann        Title:  
Director              By:   /s/ Stephen Cox        Name:   Stephen Cox       
Title:   Director     

Address for Notices to Eurohypo AG,
New York Branch:
Eurohypo AG, New York Branch
1114 Avenue of the Americas, 29th Floor
New York, New York 10036
Attention: Peter Tzelios
Telecopier No.: (866) 267-7680
With copies to:
Eurohypo AG, New York Branch
1114 Avenue of the Americas, 29th Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Telecopier No.: (866) 267-7680
- and —
Morrison & Foerster LLP
555 West Fifth Street, Suite 3500
Los Angeles, California 90013
Attention: Marc D. Young, Esq.
Telecopier No.: (213) 892-5454

 

S-1

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                          BORROWER:   1100 WEST HOLDINGS, LLC,
a Delaware limited liability company    
 
                            By:   1100 West Holdings II, LLC,
a Delaware limited liability company    
 
                                By:   Mondrian Miami Investment LLC,
a Delaware limited liability company    
 
                                    By:   Morgans Group LLC,
a Delaware limited liability company    
 
                       
 
              By:   /s/ Marc Gordon     
 
                 
 
Name: Marc Gordon
 
   
 
                 
 
Title:   Authorized Signatory
 
   
 
                                By:   Sanctuary West Avenue LLC,
a Delaware limited liability company  
 
                       
 
          By:   /s/ Abraham Galbut                           
 
              Name:   Abraham Galbut     
 
              Title:        

         
 
  Address for Notices:   - and -
 
       
 
  c/o Sanctuary Holdings
4770 Biscayne Boulevard
Miami, Florida 33137
Attention: Abraham Galbut
Telecopier: (786) 427-6203
  Greenburg Traurig
1221 Brickell Avenue
Miami, Florida 33131
Attention: Steven Goldman, Esq.
Telecopier: (305) 961-5561
 
       
 
  With copies to:   - and -
 
       
 
  Mondrian Miami Investment LLC
c/o Morgans Hotel Group
475 10th Avenue
New York, New York 10018
Attention: Marc Gordon
Telecopier: (212) 277-4270   McDermott Will & Emery LLP
340 Madison Avenue
New York, New York 10017
Attention: Keith M. Pattiz, Esq.
Telecopier: (212) 547-5444

 

S-2

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FOR PURPOSES OF SECTIONS 9.6 and 9.8
MONDRIAN MIAMI INVESTMENT LLC,
a Delaware limited liability company

                              By:   MORGANS GROUP LLC,
a Delaware limited liability company    
 
                                By:   Morgans Hotel Group Co.,
a Delaware corporation    
 
                       
 
          By:   /s/ Marc Gordon                               
 
              Name:   Marc Gordon     
 
              Title:   Authorized Signatory     
 
                        SANCTUARY WEST AVENUE LLC,
a Delaware limited liability company    
 
                       
By:
  /s/ Abraham Galbut                               
 
  Name: Abraham Galbut
 
 
  Title:
 
   

 

S-3

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          ADMINISTRATIVE AGENT:   EUROHYPO AG, NEW YORK BRANCH, as
Administrative Agent
      By:   /s/ John Lippmann        Name:   John Lippmann        Title:  
Director              By:   /s/ Stephen Cox        Name:   Stephen Cox       
Title:   Director     

Address for Notices to Eurohypo AG,
New York Branch:
Eurohypo AG, New York Branch
1114 Avenue of the Americas, 29th Floor
New York, New York 10036
Attention: Peter Tzelios
Telecopier No.: (866) 267-7680

With copies to:
Eurohypo AG, New York Branch
1114 Avenue of the Americas, 29th Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Telecopier No.: (866) 267-7680
- and -
Morrison & Foerster LLP
555 West Fifth Street, Suite 3500
Los Angeles, California 90013
Attention: Marc D. Young, Esq.
Telecopier No.: (213) 892-5454

 

S-4

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JOINDER
By executing this Joinder (the “Joinder”), each of the undersigned (collectively
referred to herein as the “Joinder Parties”; individually referred to herein as
“Joinder Party”) hereby (i) unconditionally, irrevocably and jointly and
severally guaranty the performance by Borrower of Borrower’s obligations with
respect to Borrower’s indemnification obligations under Sections 9.12(2)(a)
through and including 9.12(2)(e) and Section 12.5 of this Agreement and all
obligations and liabilities for which Borrower is personally liable under
Section 13.1 of this Agreement, (ii) agrees to cause Borrower and Mortgage
Borrower to at all times be Single Purpose Entities and to otherwise comply with
each of the covenants contained in Section 9.6 of this Agreement and (iii) joins
in and agrees to be bound by the provisions of Article 17 hereof. This Joinder
is a guaranty of full and complete payment and performance and not of
collectability. The Joinder Parties are (a) Abraham Galbut, an individual
(b) Keith Menin, an individual, (c) Seth Frohlich, an individual, and (d)
Morgans Group LLC, a Delaware limited liability company.
(1) Waivers. To the fullest extent permitted by Applicable Law, Joinder Parties
waive all rights and defenses of sureties, guarantors, accommodation parties
and/or co-makers and agree that their obligations under this Joinder shall be
primary, absolute and unconditional, and that their obligations under this
Joinder shall be unaffected by any of such rights or defenses, including:
(a) the unenforceability of any Loan Document against Borrower and/or any
guarantor or other Joinder Party;
(b) any release or other action or inaction taken by the Administrative Agent or
any Lender with respect to the collateral under any Loan Document, the Loan,
Borrower, any guarantor and/or other Joinder Party, whether or not the same may
impair or destroy any subrogation rights of any Joinder Party, or constitute a
legal or equitable discharge of any surety or indemnitor;
(c) the existence of any collateral or other security for the Loan, and any
requirement that the Administrative Agent or any Lender pursue any of such
collateral or other security, or pursue any remedies it may have against
Borrower, any guarantor and/or any other Joinder Party;
(d) any requirement that the Administrative Agent or any Lender provide notice
to or obtain a Joinder Party’s consent to any modification, increase, extension
or other amendment of the Loan, including the guaranteed obligations;
(e) any right of subrogation (until payment in full of the Loan, including the
guaranteed obligations, and the expiration of any applicable preference period
and statute of limitations for fraudulent conveyance claims);
(f) any defense based on any statute of limitations;
(g) any payment by Borrower to the Administrative Agent or any Lender if such
payment is held to be a preference or fraudulent conveyance under bankruptcy
laws or the Administrative Agent or such Lender is otherwise required to refund
such payment to Borrower or any other party; and
(h) any voluntary or involuntary bankruptcy, receivership, insolvency,
reorganization or similar proceeding affecting Borrower or any of its assets.

 

1

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(2) Agreements. Joinder Parties further represent, warrant and agree that:
(a) Neither the exercise of any remedies by the Administrative Agent or any
Lender nor any other action taken by the Administrative Agent or any Lender
shall affect or in any manner alleviate the obligations of the Joinder Parties
hereunder.
(b) The obligations under this Joinder are enforceable against each such party
and are not subject to any defenses, offsets or counterclaims.
(c) The provisions of this Joinder are for the benefit of the Administrative
Agent, Lenders and their respective successors and assigns.
(d) The Administrative Agent and Lenders shall have the right to (i) renew,
modify, extend or accelerate the Loan, (ii) pursue some or all of its remedies
against Borrower, any guarantor or any Joinder Party, (iii) add, release or
substitute any collateral for the Loan or party obligated thereunder, and
(iv) release Borrower, any guarantor or any Joinder Party from liability, all
without notice to or consent of any Joinder Party (or other Joinder Party) and
without affecting the obligations of any Joinder Party (or other Joinder Party)
hereunder.
(e) Each Joinder Party shall deliver to the Administrative Agent (for delivery
to the Lenders) not later than one hundred and twenty (120) days after the close
of each fiscal year of such Joinder Party, annual financial statements of such
Joinder Party for each such fiscal year, such financial statements to be
substantially in the form of the financial statements delivered by such Joinder
Party to the Administrative Agent in connection with the closing of the Loans or
such other form reasonably acceptable to the Administrative Agent, including
(other than with respect to an individual) a balance sheet and statement of
profit and loss certified by such Joinder Party in accordance with Section 8.1
of this Agreement.
(f) To the maximum extent permitted by law, each Joinder Party hereby knowingly,
voluntarily and intentionally waives the right to a trial by jury in respect of
any litigation based hereon. This waiver is a material inducement to the
Administrative Agent and the Lenders to enter into this Agreement.
(g) The obligations of the Joinder Parties are joint and several, and the
Administrative Agent and the Lenders shall not be required to pursue or exhaust
any remedies against any Joinder Party or Borrower as a condition to the pursuit
and realization of remedies against either Joinder Party.
(h) In the event Borrower files or has filed against it any case in bankruptcy
or similar proceedings, the Administrative Agent and the Lenders shall not be
required to enforce this Joinder in connection with such proceedings and shall
not be required to appear in such proceedings prior to enforcing the provisions
of this Joinder.

 

2

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(3) Counterparts. This Joinder may be executed in multiple counterparts, each of
which shall constitute an original, but all of which shall constitute one
document.
(4) Governing Law. This Joinder shall be governed by the laws of the State of
New York.
(5) Amendment and Restatement. This Joinder amends, supersedes and replaces in
its entirely the Joinder attached to the Existing Loan Agreement.
[Signature Pages Follow]

 

3

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Executed and sealed as of November  25, 2008.

                  JOINDER PARTIES:    
 
  /s/    Abraham Galbut                    ABRAHAM GALBUT    
 
  /s/    Keith Menin                    KEITH MENIN    
 
  /s/    Seth Frohlich                    SETH FROHLICH    
 
                MORGANS GROUP LLC,         a Delaware limited liability company
   
 
           
 
  By:   Morgans Hotel Group Co.,    
 
      a Delaware corporation,    
 
      its managing member    

            By:   /s/ Marc Gordon        Name:   Marc Gordon        Title:  
CIO   

 

S-1

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EXHIBIT A
LEGAL DESCRIPTION OF PROJECT
Parcel 1:
Lots 7 and 8 and the North 50 feet of Lot 9, Block 80, SUBDIVISION OF BLOCK
EIGHTY OF THE ALTON BEACH REALTY COMPANY, A PART OF ALTON BEACH BAY FRONT
SUBDIVISION, according to the Plat thereof, as recorded in Plat Book 6, at Page
12, of the Public Records of Miami-Dade County, Florida; also described as:
Commence at the Northwest corner of West Avenue and 10th Street in Miami Beach,
Florida, said corner also being the intersection of Tangents at the Southeast
corner of Block 80, and run Northerly along the Easterly line of said Block 80,
along the Westerly line of West Avenue, a distance of 350.00 feet to the
Southerly line of the North 50.00 feet of said Lot 9 and the Point of Beginning
(P.O.B.) of the tract of land hereinafter described: Thence continue along the
Easterly line of said Block 80, along the Westerly line of West Avenue, a
distance of 299.85 feet to the Northeast corner of the above referenced Lot 7;
thence deflecting 90°00’00” to the left, run Westerly along the Northerly line
of said Lot 7, a distance of 337.96 feet to the face of a concrete bulkhead cap
and the face of deck; thence run Southerly along the face of deck and cap, a
distance of 301.70 feet to the Southerly line of the North 50.00 feet of Lot 9;
thence run Easterly along the Southerly line of the North 50.00 feet of said Lot
9, a distance of 304.67 feet to the Point of Beginning.
Together with the easement rights as contained in Master Declaration of
Covenants, Conditions and Restrictions for Mirador South Beach, filed
December 30, 2004, in Official Records Book 22959, at Page 886, of the Public
Records of Miami-Dade County, Florida.
Parcel 2:
Condominium Unit CU12, MIRADOR 1000, A CONDOMINIUM, together with an undivided
interest in the common elements, according to the Declaration of Condominium
thereof, as recorded in Official Records Book 22959, at Page 1727, as amended
from time to time, of the Public Records of Miami-Dade County, Florida.
Together with the Leasehold Estate, as created by Sovereignty Submerged Lands
Lease Renewal and Modification to Reflect Change in Ownership between the Board
of Trustees of the Internal Improvement Trust Fund of the State of Florida, as
Lessor, and Mirador 1000, LLC, a Delaware limited liability company, as Lessee,
filed December 16, 2004, in Official Records Book 22913, at Page 825, as
assigned by Assignment of Submerged Land Lease, dated August 7, 2006, recorded
August 8, 2006 in Official Records Book 24801, Page 3362, as modified by that
certain Sovereignty Submerged Lands Lease Modification to Reflect Change in
Ownership and Change in Upland Use (No.130004276) between the Board of Trustees
of the Internal Improvement Trust Fund of the State of Florida, as Lessor, and
1100 West Properties, LLC, a Delaware limited liability company, as Lessee,
filed December 1, 2006, in Official Records Book 25146, at Page 3269, all of the
Public Records of Miami-Dade County, Florida.

 

A-1

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Parcel 3:
Condominium Unit CU10, MIRADOR 1200, A CONDOMINIUM, together with an undivided
interest in the common elements, according to the Declaration of Condominium
thereof, as recorded in Official Record Book 23543, at Page 3930, as amended
from time to time, of the Public Records of Miami-Dade County, Florida.
Together with the Leasehold Estate, as created by Sovereignty Submerged Lands
Lease Renewal between the Board of Trustees of the Internal Improvement Trust
Fund of the State of Florida, as Lessor, and 1200 West Realty, LLC, a Delaware
limited liability company, as Lessee, filed January 12, 2006, in Official
Records Book 24141, at Page 1866, as assigned by Assignment of Submerged Land
Lease, dated August 7, 2006, recorded August 8, 2006 in Official Records Book
24801, Page 3368, as modified by that certain Sovereignty Submerged Lands Lease
Modification to Reflect Change in Ownership and Change in Upland Use
(No.13000120T) between the Board of Trustees of the Internal Improvement Trust
Fund of the State of Florida, as Lessor, and 1100 West Properties, LLC, a
Delaware limited liability company, as Lessee, filed December 1, 2006, in
Official Records Book 25146, at Page 3282, all of the Public Records of
Miami-Dade County, Florida.

 

A-2

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EXHIBIT B
RESERVED

 

B-1

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EXHIBIT C
RESERVED
Note

 

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EXHIBIT D
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Mezzanine Loan Agreement dated as
of [_____], 2008 (as amended and in effect on the date hereof, the “Agreement”),
between 1100 WEST HOLDINGS, LLC, a Delaware limited liability company, the
Lenders named therein, and EUROHYPO AG, NEW YORK BRANCH, as Administrative Agent
for the Lenders. Terms defined in the Agreement are used herein with the same
meanings. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Acceptance as if set forth herein in full.
The Assignor named below hereby sells and assigns, without recourse, to the
Assignee named below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date set forth
below, the interests set forth below (the “Assigned Interest”) in the Assignor’s
rights and obligations under the Agreement, including, without limitation, the
interests set forth below in the Commitment of the Assignor on the Assignment
Date and Loans owing to the Assignor which are outstanding on the Assignment
Date, together with (a) interest on the assigned Loans from and after the
Assignment Date and (b) the amount, if any, set forth below of the fees accrued
to the Assignment Date for account of the Assignor. The Assignee hereby
acknowledges receipt of a copy of the Agreement. From and after the Assignment
Date (i) the Assignee shall be a party to and be bound by the provisions of the
Agreement and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Agreement and the Agency Agreement.
This Assignment and Acceptance is being delivered to the Administrative Agent
together with, if the Assignee is not already a Lender under the Agreement, an
administrative questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignor][Assignee] shall pay the fee
payable to the Administrative Agent pursuant to Section 12.24(2)(e) of the
Agreement.
This Assignment and Acceptance shall be governed by and construed in accordance
with the laws of the State of New York.
The Assignor represents and warrants to the Assignee that the Assignor is the
legal and beneficial owner of the Assigned Interest and has not created any
adverse interest therein. The Assignor and the Assignee represent and warrant to
each other that they are, respectively, authorized to execute and deliver this
Assignment and Acceptance.

 

D-1

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Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee’s Address for Notices:
Effective Date of Assignment (“Assignment Date”)1:

                 
 
          Percentage Assigned of Facility/Commitment (set forth, to at least 4
decimals, as a percentage of the Facility and the aggregate Commitments of all
Lenders thereunder)
 
  Principal Amount Assigned        
Current Outstanding
           
Loans Assigned:
    $     % 2
Future Funding
Commitment:
    $          
[Fees Assigned (if any):]
            %  

The terms set forth above and below are hereby agreed to:

            [NAME OF ASSIGNOR], as Assignor
      By:           Name:           Title:           [NAME OF ASSIGNEE], as
Assignee
      By:           Name:           Title:        

The undersigned hereby consent to the within assignment: 3
 

      1   Must be at least five Business Days after execution hereof by all
required parties.   2   Delete if no future advances are involved.

 

D-2

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          EUROHYPO AG, NEW YORK BRANCH,
as Administrative Agent    
 
       
By:
       
 
 
 
Name:
 
   
 
  Title:
 
   
 
       
By:
       
 
       
 
  Name:
 
   
 
  Title:
 
   

 

      3   Consent to be included to the extent required by Section 11.24(2) of
the Agreement.

 

D-3

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ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the Transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Loan
Agreement or any other Loan Document (as defined in the Agreement), (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Documents or any collateral thereunder, (iii) the financial
condition of Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the Transactions contemplated
hereby and to become a Lender under the Agreement, (ii) it satisfies the
requirements, if any, specified in the Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Assignment Date, it shall be bound by the provisions of
the Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 8.1 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, (v) it satisfies the requirements of
an Eligible Assignee as defined in the Agreement, and (vi) if it is a Non-U.S.
Person, attached to the Assignment and Acceptance is any documentation required
to be delivered by it pursuant to the terms of the Agreement, duly completed and
executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor 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 the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

Annex 1-1

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2. Payments. From and after the Assignment Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Assignment Date and to the Assignee for
amounts which have accrued from and after the Assignment Date.
3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the law of the State of New York.

 

Annex 1-2

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EXHIBIT E
FORM OF NOTICE OF CONVERSION/CONTINUATION
                    , 200___
Eurohypo AG, New York Branch,
     as Administrative Agent
1114 Avenue of the Americas, 29th Floor
New York, New York 10036
Attn: Loan Servicing

Re:   Amended and Restated Mezzanine Loan Agreement dated as of [_________],
2008 (as the same may be amended, modified or supplemented from time to time,
the “Agreement”) by and among 1100 WEST HOLDINGS, LLC, a Delaware limited
liability company (the “Borrower”), the lenders from time to time party to the
Agreement (the “Lenders”), and EUROHYPO AG, NEW YORK BRANCH, as Administrative
Agent on behalf of the Lenders (the “Administrative Agent”)

Ladies and Gentlemen:
Reference is made to the Agreement. Capitalized terms used in this Notice of
Conversion/Continuation without definition have the meanings specified in the
Agreement.
Pursuant to Section 2.8(5) of the Agreement, the Borrower hereby elects to
convert or continue the loans described in attached Schedule 1 (the “Loans”). In
connection therewith, the Borrower and the undersigned authorized officer of the
Borrower hereby certify that:
(1) Representations and Warranties. All representations and warranties of the
Borrower contained in the Loan Documents, including those contained in Article 7
of the Agreement, are true and correct as of the date hereof and shall be true
and correct on the date of the continuation/conversion of the Loans, both before
and after giving effect to such continuation/conversion;
(2) No Potential Default/Event of Default. No Potential Default or Event of
Default exists as of the date hereof or will result from the
continuation/conversion of the Loans; and

 

E-1

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(3) No Material Adverse Effect. No act, omission, change or event which has a
Material Adverse Effect has occurred since the date of the Agreement.

            1100 WEST HOLDINGS, LLC,
a Delaware limited liability company
      By:           Name:          Title:              By:           Name:     
    Title:       

 

E-2

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Schedule 1
to Notice of Conversion/Continuation
LOAN TO BE CONVERTED OR CONTINUED

A.   All conversions and continuations must be of a Loan, or portion thereof, in
a principal amount of $1,000,000 or a multiple of $100,000 in excess thereof.

B.   Conversions/continuations to a Eurodollar Loan under paragraphs (2) and
(3) below are not permitted if, after giving effect to thereto, (a) there would
be more than five (5) different Eurodollar Loans in effect, or (b) the aggregate
outstanding principal amount of all Eurodollar Loans would be reduced to be less
than $1,000,000.

  (1)   Conversion of a Eurodollar Loan into a Base Rate Loan.         The
following Eurodollar Loan to a Base Rate Loan:

         
Amount:
  $                       
Requested Conversion Date:
(must be a Business Day at least three (3) Business Days after date of notice)
                          
Last day of current Interest Period:
                          

  (2)   Conversion of a Base Rate Loan into a Eurodollar Loan.         The
following Base Rate Loan to a Eurodollar Loan:

         
Amount:
  $                       
Requested Conversion Date:
(must be a Business Day at least three (3) Business Days after date of notice)
                          
Requested Interest Period:
(14 days or 1, 2, 3, or 6 months)
                          

  (3)   Continuation of a Eurodollar Loan into a Subsequent Interest Period.    
    The following Eurodollar Loan into a subsequent Interest Period:

         
Amount:
  $                       
Last day of current Interest Period:
(must be a Business Day at least three (3) Business Days after date of notice)
                          
Requested Interest Period:
(14 days or 1, 2, 3, or 6 months)
                          

 

1-1

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SCHEDULE 1(a)
COMMITMENTS

          LENDER   COMMITMENT    
Eurohypo AG, New York Branch
  $ 28,000,000  

 

Schedule 1(a) - 1

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SCHEDULE 1(b)
MINIMUM SALES PRICE SCHEDULE

 

Schedule 1(b) - 1

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SCHEDULE 1(c)
UNIT RELEASE SCHEDULE

 

Schedule 1(c) - 1

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SCHEDULE 2.1

ADVANCE AND CONSTRUCTION COMPLETION CONDITIONS
Part A – Advance Conditions
Part B – Construction Completion Conditions
PART A. ADVANCE CONDITIONS
Each Loan shall be subject to the Administrative Agent’s receipt, review,
approval and/or confirmation of the following, each in form and content
satisfactory to the Administrative Agent in its sole discretion:
1. There shall exist no Potential Default or Event of Default (currently or
after giving effect to the requested advance).
2. The representations and warranties contained in this Loan Agreement and in
all other Loan Documents are true and correct.
3. Such Loan shall be secured by the Loan Documents.
4. Borrower shall have paid the Administrative Agent’s (and the Lenders’) costs
and expenses in connection with such Loan (including title charges, and costs
and expenses of the Administrative Agent’s inspecting engineer and attorneys).
5. No change shall have occurred in the financial condition of Borrower or any
other Borrower Party, which would have, in the Administrative Agent’s judgment,
have a material adverse effect on the Loans, the Project, or Borrower’s or any
other Borrower Party’s ability to perform its obligations under the Loan
Documents.
6. No condemnation or adverse possession, as determined by the Administrative
Agent, zoning or usage change proceeding shall have occurred or shall have been
threatened against the Project; the Project shall not have suffered any damage
by fire or other casualty which has not been repaired or is not being restored
in accordance with this Agreement; no law, regulation, ordinance, moratorium,
injunctive proceeding, restriction, litigation, action, citation or similar
proceeding or matter shall have been enacted, adopted, or threatened by any
governmental authority, which would have, in the Administrative Agent’s
judgment, a material adverse effect on the Project or Borrower’s or any Borrower
Party’s ability to perform its obligations under the Loan Documents.
7. Borrower shall immediately deposit all proceeds of such Loan in a separate
and exclusive account to be used solely for the purposes specified in this
Agreement and in Borrower’s advance request and, upon the Administrative Agent’s
request, shall promptly furnish the Administrative Agent with evidence thereof.
8. Each Loan shall only be made on a Payment Date.

 

Schedule 2.1 - 1

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PART B – CONSTRUCTION COMPLETION CONDITIONS
The following shall have been completed to the satisfaction of the
Administrative Agent in its discretion prior to the occurrence of Construction
Completion:
1. The Hotel Opening shall have occurred by the Hotel Opening Deadline;
2. The Building Conversion shall have occurred by the Construction Completion
Deadline; and
3. The Administrative Agent shall have received the following items in
connection with the Building Conversion:
(a) Evidence of the approval by the applicable Governmental Authorities of the
Project for operation in accordance with the Plans and Specifications to the
extent any such approval is a condition of the lawful use of Project;
(b) Endorsements to the Title Policy which are satisfactory to the
Administrative Agent and which describe the improvements located on the Project
(CLTA 116 series) and insure the lien-free completion of such improvements (CLTA
101 series, as required by the Administrative Agent);
(c) Unconditional waivers of lien and sworn statements from all contractors,
subcontractors, materialmen, suppliers and vendors with respect to the Building
Conversion, in each case in compliance with the Applicable Laws;
(d) Certificates from Borrower and its architect to Administrative Agent and the
Lenders stating that (i) the Building Conversion (A) has been substantially
completed in accordance with the Plans and Specifications and (B) is available
for occupancy, and (ii) the Project complies with all applicable building codes;
(e) Violation searches, if available and requested by the Administrative Agent,
with Governmental Authorities indicating no notices of violation have been
issued with respect to the Project;
(f) Current searches of all Uniform Commercial Code financing statements filed
with the Secretary of State of the state of formation/organization of Borrower
and the office of Recorder of Miami County in the State of Florida, and the
Office of the Delaware Secretary of State, showing that no Uniform Commercial
Code financing statements are filed or recorded against Borrower in which the
collateral is personal property or fixtures located on the Project or used in
connection with the Project other than financing statements with respect to the
Loans;
(g) A certificate of an Authorized Officer of Borrower certifying that:
(i) no condemnation of any portion of the Project or any action which could
result in a relocation of any roadways abutting the Project or the denial of
access, which, in the Administrative Agent’s sole judgment, adversely affects
the Lenders’ security or the operation of the Project, has commenced or, to the
best of Borrower’s knowledge, is contemplated by any Governmental Authority;

 

Schedule 2.1 - 2

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(ii) all fixtures, attachments and equipment necessary for the operation of the
Hotel Improvements have been installed or incorporated into the Project and are
operational and in good working order, free from defects; all guarantees and
warranties have been transferred/assigned to Borrower; and Borrower is the
absolute owner of all of said property free and clear of all Liens; and
(iii) all costs and expenses relating to such Building Conversion have been paid
in full.
(h) Evidence that all of the Licenses have been obtained and are in full force
and effect.

 

Schedule 2.1 - 3

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SCHEDULE 2.4(1)
WIRE INSTRUCTIONS
Bank of New York
ABA#        
A/C#        
F/B/O: Eurohypo
Re: Mondrian Miami
Attention: Valerie Rodriguez        

 

Schedule 2.4 - 1

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SCHEDULE 7.3
LITIGATION
None

 

Schedule 7.3

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SCHEDULE 7.23
CONSTRUCTION BUDGET

 

Schedule 7.23 - 1

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SCHEDULE 7.27
ORGANIZATIONAL CHART

 

Schedule 7.27

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SCHEDULE 7.30
MORTGAGE LOAN DOCUMENTS

1.   Amended and Restated Loan Agreement dated as of the date hereof, between
Mortgage Borrower, Mortgage Loan Administrative Agent, Mortgage Lenders, and
Borrower, together with Joinder Agreement executed by Joinder Parties.

2.   Amended and Restated Substitute Promissory Note A-1 dated as of the date
hereof, in the principal amount of $27,024,385.82, executed by Mortgage Borrower
in favor of CIT Lending Services.

3.   Amended and Restated Substitute Promissory Note A-2 dated as of the date
hereof, in the principal amount of $26,373,195.74, executed by Mortgage Borrower
in favor of KBC Bank NV.

4.   Amended and Restated Substitute Promissory Note B dated as of the date
hereof, in the principal amount of $31,278,947.05, executed by Mortgage Borrower
in favor of Eurohypo AG, New York Branch.

5.   Mortgage, Security Agreement, Fixture Filing and Assignment of Rents and
Leases dated as of August 8, 2006, by Mortgage Borrower to Mortgage Loan
Administrative Agent.

6.   Assignment of Leases, Rents and Security Deposits dated as of August 8,
2006, by Mortgage Borrower in favor of Mortgage Loan Administrative Agent.

7.   Collateral Assignment of Contracts, Developer Rights, Licenses, Permits,
Warranties and Approvals dated as of August 8, 2006, by Mortgage Borrower to
Mortgage Loan Administrative Agent.

8.   Hazardous Substances Indemnity Agreement dated as of August 8, 2006, by
Mortgage Borrower, Galbut, and Morgans LLC to and for the benefit of Mortgage
Loan Administrative Agent.

9.   Limited Guarantee dated as of August 8, 2006, by Galbut in favor of
Mortgage Loan Administrative Agent.

10.   Second Amended and Restated Completion Guaranty dated as of the date
hereof, by Joinder Parties in favor of Mortgage Loan Administrative Agent.

11.   Hotel Manager’s Consent and Subordination of Management Agreement dated as
of August 8, 2006, by Mortgage Borrower and Hotel Manager in favor of Mortgage
Loan Administrative Agent.

12.   Project Manager’s Consent and Subordination of Management Agreement dated
as of August 8, 2006, by Mortgage Borrower and Hotel Manager in favor of
Mortgage Loan Administrative Agent.

Schedule 7.30

 

 

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13.   Agency and Arrangement Fee Letter dated as of August 8, 2006, by Mortgage
Loan Administrative Agent and agreed and accepted by Mortgage Borrower.

14.   Amendment to Fee Letter dated as of September 6, 2007, by Mortgage Loan
Administrative Agent and agreed and accepted by Mortgage Borrower.

15.   Second Amended and Restated Cash Management and Security Agreement dated
as of the date hereof, among Mortgage Borrower, Mortgage Loan Administrative
Agent, Hotel Manager, and Regions Bank.

16.   First Amendment to Mortgage, Security Agreement, Fixture Filing and
Assignment of Rents and Leases dated as of December 19, 2006, by Mortgage
Borrower to Mortgage Loan Administrative Agent.

17.   Second Amendment to Mortgage, Security Agreement, Fixture Filing and
Assignment of Rents and Leases dated as of September 6, 2007, by Mortgage
Borrower to Mortgage Loan Administrative Agent

18.   Third Amendment to Mortgage, Security Agreement, Fixture Filing and
Assignment of Rents and Leases dated as of April 25, 2008, by Mortgage Borrower
to Mortgage Loan Administrative Agent.

19.   Fourth Amendment to Mortgage, Security Agreement, Fixture Filing and
Assignment of Rents and Leases dated as of the date hereof, by Mortgage Borrower
to Mortgage Loan Administrative Agent.

20.   Subordination and Standstill Agreement dated as of the date hereof, by
Mortgage Loan Administrative Agent, Administrative Agent, Mortgage Borrower,
Borrower, 1100 West Holdings II, LLC and RMF Capital LLC.

21.   Omnibus Amendment to and Reaffirmation of Loan Documents dated as of the
date hereof, by Mortgage Borrower, Borrower, and Joinder Parties for the benefit
of Mortgage Loan Administrative Agent.

22.   Assignment of Construction Contract dated as of the date hereof, by
Mortgage Borrower to Mortgage Loan Administrative Agent.

23.   Consent and Agreement of Construction Manager dated as of the date hereof,
by G.T. Construction and Development, Inc. to Mortgage Loan Administrative
Agent.

24.   Reaffirmation of Hotel Manager’s Consent and Subordination of Manager’s
Agreement and Technical Services Agreement dated as of the date hereof, by Hotel
Manager for the benefit of Mortgage Loan Administrative Agent.

25.   Assignment, Pledge and Security Agreement (Hedge Agreement) dated as of
the date hereof, by Mortgage borrower for the benefit of Mortgage Loan
Administrative Agent.

26.   Intercreditor Agreement dated as of April 25, 2008 by and between Mortgage
Loan Administrative Agent and Administrative Agent agreed and acknowledged by
KBC Bank NV and CIT Lending Services.

Schedule 7.30