Exhibit 10.30.10
LOAN AND SECURITY AGREEMENT
Dated as of October 29, 2010
Between
ASHFORD CRYSTAL GATEWAY LP,
as Borrower
AND
GERMAN AMERICAN CAPITAL CORPORATION,
as Lender
With respect to:
Marriott Crystal Gateway
1700 Jefferson David Highway
City of Arlington, Arlington County, Commonwealth of Virginia

 

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TABLE OF CONTENTS

                                      Page              
 
        I.   DEFINITIONS; PRINCIPLES OF CONSTRUCTION     1       1.1  
Definitions     1       1.2   Principles of Construction     26              
 
        II.   GENERAL TERMS     26       2.1   Loan; Disbursement to Borrower  
  26           2.1.1  
The Loan
    26           2.1.2  
Disbursement to Borrower
    26           2.1.3  
The Note, Security Instrument and Loan Documents
    26           2.1.4  
Use of Proceeds
    26       2.2   Interest; Loan Payments; Late Payment Charge     27          
2.2.1  
Payment of Principal and Interest
    27           2.2.2  
Method and Place of Payment
    27           2.2.3  
Late Payment Charge
    27           2.2.4  
Usury Savings
    28       2.3   Prepayments     28           2.3.1  
Prepayments
    28           2.3.2  
Prepayments After Event of Default
    28           2.3.3  
Release of Property
    28       2.4   Regulatory Change; Taxes     28           2.4.1  
Increased Costs
    28           2.4.2  
Special Taxes
    29           2.4.3  
Other Taxes
    29           2.4.4  
Indemnity
    29           2.4.5  
Change of Office
    29           2.4.6  
Survival
    30       2.5   Conditions Precedent to Closing     30           2.5.1  
Representations and Warranties; Compliance with Conditions
    30           2.5.2  
Delivery of Loan Documents; Title Policy; Reports; Leases
    30           2.5.3  
Delivery of Organizational Documents
    32           2.5.4  
Opinions of Borrower’s Counsel
    32           2.5.5  
Budgets
    32           2.5.6  
Completion of Proceedings
    33           2.5.7  
Payments
    33           2.5.8  
Transaction Costs
    33           2.5.9  
Material Adverse Effect
    33           2.5.10  
Tax Lot
    33           2.5.11  
Physical Conditions Report
    33           2.5.12  
Manager Consent
    33           2.5.13  
Appraisal
    33           2.5.14  
Financial Statements
    33           2.5.15  
Further Documents
    33  

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                                      Page              
 
        III.   CASH MANAGEMENT     34       3.1   Cash Management     34        
  3.1.1  
Establishment of Accounts
    34           3.1.2  
Pledge of Account Collateral
    35           3.1.3  
Maintenance of Collateral Accounts
    35           3.1.4  
Eligible Accounts
    36           3.1.5  
Deposits into Sub-Accounts
    36           3.1.6  
Monthly Funding of Sub-Accounts
    36           3.1.7  
Payments from Sub-Accounts
    38           3.1.8  
Cash Management Bank
    38           3.1.9  
Borrower’s Account Representations, Warranties and Covenants
    39           3.1.10  
Account Collateral and Remedies
    39           3.1.11  
Transfers and Other Liens
    40           3.1.12  
Reasonable Care
    40           3.1.13  
Lender’s Liability
    41           3.1.14  
Continuing Security Interest
    41              
 
        IV.   REPRESENTATIONS AND WARRANTIES     41       4.1   Borrower
Representations     41           4.1.1  
Organization
    41           4.1.2  
Proceedings
    42           4.1.3  
No Conflicts
    42           4.1.4  
Litigation
    43           4.1.5  
Agreements
    43           4.1.6  
Title
    43           4.1.7  
No Bankruptcy Filing
    43           4.1.8  
Full and Accurate Disclosure
    44           4.1.9  
All Property
    44           4.1.10  
No Plan Assets
    44           4.1.11  
Compliance
    44           4.1.12  
Financial Information
    45           4.1.13  
Condemnation
    45           4.1.14  
Federal Reserve Regulations
    45           4.1.15  
Utilities and Public Access
    45           4.1.16  
Not a Foreign Person
    45           4.1.17  
Separate Lots
    45           4.1.18  
Assessments
    46           4.1.19  
Enforceability
    46           4.1.20  
No Prior Assignment
    46           4.1.21  
Insurance
    46           4.1.22  
Use of Property
    46           4.1.23  
Certificate of Occupancy; Licenses
    46           4.1.24  
Flood Zone
    46           4.1.25  
Physical Condition
    46           4.1.26  
Boundaries
    47           4.1.27  
Leases
    47           4.1.28  
Filing and Recording Taxes
    47  

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                4.1.29  
Single Purpose Entity/Separateness
    47           4.1.30  
Management Agreement
    48           4.1.31  
Illegal Activity
    48           4.1.32  
No Change in Facts or Circumstances; Disclosure
    48           4.1.33  
Tax Filings
    48           4.1.34  
Solvency/Fraudulent Conveyance
    48           4.1.35  
Investment Company Act
    49           4.1.36  
Labor
    49           4.1.37  
Inventory
    49           4.1.38  
Brokers
    49           4.1.39  
No Other Debt
    49           4.1.40  
Taxpayer Identification Number; Jurisdiction of Formation
    49           4.1.41  
Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws
    49           4.1.42  
REAs and the Operating Lease
    50           4.1.43  
Intellectual Property
    50           4.1.44  
Backward Representations — Entity
    50           4.1.45  
Backward Representations — Separateness
    51       4.2   Survival of Representations     52              
 
                   
 
        V.   BORROWER COVENANTS     52       5.1   Affirmative Covenants     52
          5.1.1  
Performance by Borrower
    52           5.1.2  
Existence; Compliance with Legal Requirements; Insurance
    52           5.1.3  
Litigation; Notices
    53           5.1.4  
Single Purpose Entity
    53           5.1.5  
Consents
    55           5.1.6  
Access to Property
    55           5.1.7  
Notice of Default
    55           5.1.8  
Cooperate in Legal Proceedings
    55           5.1.9  
Perform Loan Documents
    55           5.1.10  
Insurance
    56           5.1.11  
Further Assurances; Separate Notes; Loan Resizing
    56           5.1.12  
Mortgage Taxes
    58           5.1.13  
Compliance with Management Agreement & Operating Lease
    58           5.1.14  
Business and Operations; Licenses
    59           5.1.15  
Title to the Property
    59           5.1.16  
Costs of Enforcement
    59           5.1.17  
Estoppel Statement
    60           5.1.18  
Loan Proceeds
    60           5.1.19  
No Joint Assessment
    60           5.1.20  
No Further Encumbrances
    60           5.1.21  
Article 8 “Opt In” Language
    60           5.1.22  
Leases, REAs, etc.
    60           5.1.23  
Independent Directors, Independent Managers, Independent Members
    61           5.1.24  
Extension or Renewal of Operating Lease, etc.
    61           5.1.25  
Broker Indemnity
    61  

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                                      Page              
 
                5.1.26  
Tunnel Agreement
    61       5.2   Negative Covenants     62           5.2.1  
Incur Debt; FF&E Leasing
    62           5.2.2  
Encumbrances
    62           5.2.3  
Engage in Different Business
    62           5.2.4  
Make Advances
    62           5.2.5  
Partition
    62           5.2.6  
Commingle
    62           5.2.7  
Guarantee Obligations
    62           5.2.8  
Transfer Assets
    62           5.2.9  
Amend Organizational Documents
    62           5.2.10  
Dissolve
    63           5.2.11  
Bankruptcy
    63           5.2.12  
ERISA
    63           5.2.13  
Distributions
    63           5.2.14  
Manager and Management Agreement
    63           5.2.15  
Modify or Termination of REAs or Operating Lease
    64           5.2.16  
Modify Account Agreement
    64           5.2.17  
Zoning Reclassification
    64           5.2.18  
Debt Cancellation
    64           5.2.19  
Intentionally Omitted
    65           5.2.20  
Single-Purpose Entity
    65           5.2.21  
Affiliate Transactions
    65           5.2.22  
Intellectual Property
    65              
 
        VI.   INSURANCE; CASUALTY; CONDEMNATION; RESTORATION     65       6.1  
Insurance Coverage Requirements     65           6.1.1  
Property Insurance
    65           6.1.2  
Liability Insurance
    65           6.1.3  
Workers’ Compensation Insurance
    66           6.1.4  
Commercial Rents Insurance
    66           6.1.5  
Builder’s All-Risk Insurance
    66           6.1.6  
Boiler and Machinery Insurance
    66           6.1.7  
Flood Insurance
    66           6.1.8  
Windstorm Insurance
    66           6.1.9  
Terrorism Insurance
    67           6.1.10  
Other Insurance
    67           6.1.11  
Ratings of Insurers
    67           6.1.12  
Form of Insurance Policies; Endorsements
    67           6.1.13  
Certificates
    68           6.1.14  
Separate Insurance
    68           6.1.15  
Blanket Policies
    69       6.2   Condemnation and Insurance Proceeds     69           6.2.1  
Notification
    69           6.2.2  
Proceeds
    69           6.2.3  
Lender to Take Proceeds
    70           6.2.4  
Borrower to Restore
    71  

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                6.2.5  
Disbursement of Proceeds
    72              
 
        VII.   IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS     73      
7.1   Borrower to Pay Impositions and Other Charges     73       7.2   No Liens
    74       7.3   Contest     74              
 
        VIII.   TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS     75       8.1  
Restrictions on Transfers     75           8.1.1  
General
    75           8.1.2  
Restriction
    75       8.2   Sale of Building Equipment     75       8.3   Immaterial
Transfers and Easements, etc.     75       8.4   Indebtedness     76          
8.4.1  
Prohibition
    76           8.4.2  
Preferred Equity
    76           8.4.3  
Additional Mezzanine Loan
    76       8.5   Permitted Equity Transfers     78           8.5.1  
Less than 49%
    78           8.5.2  
More than 49%
    78           8.5.3  
Exceptions
    79       8.6   Deliveries to Lender     79       8.7   Loan Assumption    
79       8.8   Leases     80           8.8.1  
New Leases and Lease Modifications
    80           8.8.2  
Security Deposits
    80              
 
        IX.   INTENTIONALLY OMITTED     80              
 
        X.   MAINTENANCE OF PROPERTY; ALTERATIONS     80       10.1  
Maintenance of Property     80       10.2   Conditions to Alteration     81    
  10.3   Costs of Alteration     81              
 
        XI.   BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER
INFORMATION     82       11.1   Books and Records     82       11.2   Financial
Statements     83           11.2.1  
Quarterly Reports
    83           11.2.2  
Annual Reports
    83           11.2.3  
Capital Expenditures Summaries
    83           11.2.4  
Management Agreement
    83           11.2.5  
Annual Budget
    83           11.2.6  
Other Information
    84              
 
        XII.   ENVIRONMENTAL MATTERS     84       12.1   Representations     84
 

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                                      Page              
 
            12.2   Compliance with Environmental Laws     85       12.3  
Environmental Reports     85       12.4   Environmental Indemnification     85  
    12.5   Recourse Nature of Certain Indemnifications     86              
 
        XIII.   DEFEASANCE     86       13.1   Generally     86           13.1.1
 
Defeasance Note
    86           13.1.2  
Defeasance Security Agreement
    87           13.1.3  
Defeasance Assumption Agreement
    87           13.1.4  
Substitute Borrower Organizational Documents
    87           13.1.5  
Release Documents
    87           13.1.6  
Other Conditions
    87           13.1.7  
No Event of Default
    87       13.2   Defeasance Collateral     87           13.2.1  
Establishment of Account
    87           13.2.2  
Delivery of Defeasance Collateral
    87           13.2.3  
Grant of Lien
    87           13.2.4  
Officer’s Certificate
    88       13.3   Sufficiency of Defeasance Collateral     88       13.4  
Lender Release     89       13.5   Defeasance Collateral Account     89      
13.6   Payments     89       13.7   Loan Document Amendments     89       13.8  
Lender’s Costs     89              
 
        XIV.   SECURITIZATION AND PARTICIPATION     90       14.1   Sale of Note
and Securitization     90       14.2   Securitization Financial Statements    
91       14.3   Securitization Indemnification     91           14.3.1  
Disclosure Documents
    91           14.3.2  
Indemnification Certificate
    92       14.4   Retention of Servicer     94              
 
        XV.   ASSIGNMENTS AND PARTICIPATIONS     94       15.1   Assignment and
Acceptance     94       15.2   Effect of Assignment and Acceptance     94      
15.3   Content     95       15.4   Register     95       15.5   Substitute Notes
    95       15.6   Participations     96       15.7   Disclosure of Information
    96       15.8   Security Interest in Favor of Federal Reserve Bank     97  
           
 
        XVI.   RESERVE ACCOUNTS     97       16.1   Tax Reserve Account     97  
        16.1.1  
General
    97  

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                                      Page              
 
                16.1.2  
Disbursement
    97       16.2   Insurance Reserve Account     98           16.2.1  
General
    98           16.2.2  
Disbursement
    98       16.3   FF&E Reserve Account     98           16.3.1  
General
    98           16.3.2  
Disbursement
    98              
 
        XVII.   DEFAULTS     99       17.1   Event of Default     99       17.2
  Remedies     102       17.3   Remedies Cumulative; Waivers     103       17.4
  Costs of Collection     104              
 
        XVIII.   SPECIAL PROVISIONS     104       18.1   Exculpation     104    
      18.1.1  
Exculpated Parties
    104           18.1.2  
Carveouts From Non-Recourse Limitations
    105   XIX.   MISCELLANEOUS     107       19.1   Survival     107       19.2
  Lender’s Discretion     107       19.3   Governing Law     107       19.4  
Modification, Waiver in Writing     108       19.5   Delay Not a Waiver     108
      19.6   Notices     109       19.7   TRIAL BY JURY     110       19.8  
Headings     110       19.9   Severability     110       19.10   Preferences    
110       19.11   Waiver of Notice     111       19.12   Expenses; Indemnity    
111       19.13   Exhibits and Schedules Incorporated     113       19.14  
Offsets, Counterclaims and Defenses     113       19.15   Liability of Assignees
of Lender     113       19.16   No Joint Venture or Partnership; No Third Party
Beneficiaries     113       19.17   Publicity     114       19.18   Waiver of
Marshalling of Assets     114       19.19   Waiver of Counterclaim and other
Actions     114       19.20   Conflict; Construction of Documents; Reliance    
114       19.21   Prior Agreements     115       19.22   Counterparts     115  

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  SCHEDULES
 
   
SCHEDULE I
  Qualified Institutional Holder Requirements
SCHEDULE II
  Restricted Party List
SCHEDULE III
  Litigation
SCHEDULE IV
  REAs
 
   
 
  EXHIBITS
 
   
EXHIBIT A
  Manager Direction Letter
EXHIBIT B
  Organizational Chart
EXHIBIT C
  INTENTIONALLY OMITTED
EXHIBIT D
  Form of Independent Director, Independent Manager, Independent Member
Certificate
EXHIBIT E
  Article 8 “Opt In” Language

viii 

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LOAN AND SECURITY AGREEMENT
     THIS LOAN AND SECURITY AGREEMENT, dated as of the 29th day of October,
2010, is between ASHFORD CRYSTAL GATEWAY LP, a Delaware limited partnership
(together with its successors and permitted assigns, “Borrower”) having an
office at 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254, and GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation, having an address at 60
Wall Street, 10th Floor, New York, New York 10005 (together with its successors
and assigns, “Lender”).
RECITALS:
     WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender;
     WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement (as hereinafter defined) and the
other Loan Documents (as hereinafter defined).
     NOW, THEREFORE, in consideration of the making of the Loan by Lender and
the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
     1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
          “Account Agreement” shall mean the Account and Control Agreement among
Lender, Borrower and Cash Management Bank, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
          “Account Collateral” shall have the meaning set forth in
Section 3.1.2.
          “Additional Non-Consolidation Opinion” shall have the meaning set
forth in Section 5.1.4(h).
          “Affiliate” shall mean, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with, or any general partner or managing member in,
such specified Person. An Affiliate of a Person includes, without limitation,
(a) any officer or director of such Person, and (b) any record or beneficial
owner of more than 10% of any class of ownership interests of such Person;
provided that for purposes of any provision of the Loan Documents addressing
transactions among Affiliates, Remington Lodging & Hospitality, LLC shall be
deemed to be an Affiliate of Borrower, General Partner, Tenant or Guarantor. For
the purposes of this definition, “control” when used with respect to any
specified Person means the power to direct the management or policies of such
Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interest, by contract or otherwise; and the terms
“controlling” and “controlled” have the meanings correlative to the foregoing.

 

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          “Agreement” shall mean this Agreement, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
          “ALTA” shall mean American Land Title Association, or any successor
thereto.
          “Alteration” shall have the meaning set forth in Section 10.2.
          “Annual Budget” shall mean the annual operating budget, if any, for
(a) the Borrower, (b) the General Partner, (c) Tenant or (d) the Property, in
each case, prepared by Borrower or, with respect to the Property, Manager, on
Borrower’s behalf, pursuant to the Management Agreement, in each case, for the
applicable Fiscal Year or other period setting forth, in reasonable detail,
Borrower’s and Manager’s, as applicable, good faith estimates of the anticipated
results of operations of Borrower, Tenant and the Property, including revenues
from all sources, all Operating Expenses, management fees and Capital
Expenditures.
          “Approved Bank” shall have the meaning set forth in the Account
Agreement.
          “Approved Operating Expenses” shall mean the monthly Operating
Expenses as set forth on the Annual Budget approved (or deemed approved) by
Lender pursuant to Section 11.2.5; provided, however, that if such Annual Budget
has not been approved (or deemed approved) by Lender, then the term “Approved
Operating Expenses” shall mean the amount of Operating Expenses set forth on the
immediately preceding Annual Budget approved (or deemed approved) by the Lender.
          “Assignment and Acceptance” shall mean an assignment and acceptance
entered into by Lender and an assignee, and accepted by Lender in accordance
with Article XV and in such form as is customarily used by Lender in connection
with the participation or syndication of mortgage loans at the time of such
assignment.
          “Assignment of Leases” shall mean that certain first priority
Assignment of Leases, Rents and Security Deposits from Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of Borrower’s right, title and
interest in and to the Operating Lease, Leases, Rents and Security Deposits as
security for the Loan, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
          “Assignment of Management Agreement” shall mean that certain
Collateral Assignment of Management Agreement and Intellectual Property among
Lender, Borrower and Tenant, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
          “Assumed Debt Service” shall mean the sum of (a) payments of Debt
Service with respect to the Loan made by Borrower to Lender on each Payment
Date, plus (b) payments made with respect to any New Mezzanine Loan, in each
case, during the immediately preceding 12-month period.
          “Assumed Debt Service Coverage Ratio” shall mean a ratio, as
reasonably determined by Lender for the applicable period, in which:

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               (a) the numerator is the Net Operating Income, as stated on
Borrower’s four most recent quarterly financial statements delivered to Lender
pursuant to Article XI hereof, for the trailing 12 month period immediately
prior to the applicable calculation date; and
               (b) the denominator is the Assumed Debt Service.
          “Bankruptcy Code” shall mean Title 11, U.S.C.A., as amended from time
to time and any successor statute or statutes and all rules and regulations from
time to time promulgated thereunder, or any other Federal or state bankruptcy or
insolvency law.
          “Borrower” has the meaning set forth in the first paragraph of this
Agreement.
          “Borrower’s Account” shall mean the account designated in writing from
time to time by Borrower as the “Borrower’s Account”.
          “Building Equipment” shall have the meaning set forth in the Security
Instrument.
          “Business Day” shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, or the place of business of the
trustee under a Securitization (or, if no Securitization has occurred, Lender),
or any Servicer or the financial institution that maintains any collection
account for or on behalf of any Servicer or the New York Stock Exchange or the
Federal Reserve Bank of New York is not, in each case, open for business.
          “Capital Expenditures” shall mean, for any period, the amount expended
for items capitalized under GAAP (including expenditures for building
improvements or major repairs).
          “Cash” shall mean the legal tender of the United States of America.
          “Cash and Cash Equivalents” shall mean any one or a combination of the
following: (a) Cash, and (b) U.S. Government Obligations.
          “Cash Flow Reserve Account” shall have the meaning set forth in
Section 3.1.1(v).
          “Cash Management Bank” shall mean (a) Deutsche Bank Trust Company
Americas, a New York banking corporation, (b) any Approved Bank acting as Cash
Management Bank under the Account Agreement or (c) other financial institution
approved by the Lender and, if a Securitization has occurred, the Rating
Agencies.
          “Casualty Amount” shall mean $7,500,000.
          “Closing Date” shall mean the date of this Agreement set forth in the
first paragraph hereof.
          “Code” shall mean the Internal Revenue Code of 1986, as amended, as it
may be further amended from time to time, and any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.

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          “Collateral Accounts” shall have the meaning set forth in
Section 3.1.1.
          “Control” shall mean (a) the power to direct the management or
policies of a Person, directly or indirectly and whether through ownership of
voting securities or other beneficial interest, by contract or otherwise and
(b) the ownership, direct or indirect, of no less than 51% of the voting
securities or other beneficial interest of such Person, and the terms
“Controlled”, “Controlling” and “Common Control” shall have correlative
meanings.
          “Control Agreement” shall mean one or more agreements, each in form
and substance satisfactory to Lender, that create and perfect in favor of Lender
but subject to the terms of the Manager’s Subordination Agreement, a first
priority security interest in and to the FF&E Holding Account, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
          “Cut-Off Date” shall have the meaning set forth in Section 6.2.3.
          “DBS” shall have the meaning set forth in Section 14.3.2(b).
          “DBS Group” shall have the meaning set forth in Section 14.3.2(b).
          “DSCR Event” shall mean with respect to the calculation date occurring
on the last day of the immediately preceding calendar quarter, that Borrower has
failed to maintain an Assumed Debt Service Coverage Ratio of 1.20 to 1.00.
          “Debt” shall mean, with respect to any Person at any time:
(a) indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services; (b) obligations of such Person as lessee
under leases which should have been or should be, in accordance with GAAP,
recorded as capital leases; (c) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA;
(d) obligations issued for, or liabilities incurred on the account of, such
Person; (e) obligations or liabilities of such Person arising under letters of
credit, credit facilities or other acceptance facilities; (f) obligations of
such Person under any guarantees or other agreement to become secondarily liable
for any obligation of any other Person, endorsements (other than for collection
or deposit in the ordinary course of business) and other contingent obligations
to purchase, to provide funds for payment, to supply funds to invest in any
Person or otherwise to assure a creditor against loss; (g) obligations of such
Person secured by any Lien on any property of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
          “Debt Service” shall mean, with respect to any particular period of
time, scheduled interest payments under the Note, any Mezzanine Loans and any
New Mezzanine Loans.
          “Debt Service Reserve Account” shall have the meaning set forth in
Section 3.1.1(iii).

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          “Default” shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
          “Default Rate” shall have the meaning set forth in the Note.
          “Defeasance” shall have the meaning set forth in Section 13.1.
          “Defeasance Collateral” shall mean Defeasance Eligible Investments
pledged to Lender as collateral pursuant to Article XIII (including, without
limitation, all amounts then on deposit in the Defeasance Collateral Account).
          “Defeasance Collateral Account” shall have the meaning set forth in
Section 13.5.
          “Defeasance Collateral Requirement” shall mean an amount sufficient to
provide payment of all (a) principal indebtedness outstanding as of the date of
Defeasance under the Note as it becomes due through the date that is six months
prior to the Maturity Date, (b) scheduled interest on the Loan as it becomes due
through the date that is six months prior to the Maturity Date and (c) all other
Indebtedness outstanding hereunder or under any of the other Loan Documents as
it becomes due through the date that is six months prior to the Maturity Date.
          “Defeasance Eligible Investments” shall mean (a) obligations or
securities not subject to prepayment, call or early redemption which are direct
obligations of, or obligations fully guaranteed as to timely payment by, the
full faith and credit of the United States of America or any agency or
instrumentality of the United States of America, the ownership of which will not
cause Lender to be an “investment company” under the Investment Company Act of
1940, as amended, as evidenced by an Opinion of Counsel reasonably acceptable to
Lender, and which qualify under §1.860G-2(a)(8) of the Treasury regulations, and
(ii) such other securities as are (A) acceptable to Lender in its reasonable
discretion or (B) if a Securitization has occurred, then being generally
accepted by the Rating Agencies without any reduction, downgrade or withdrawal
of the ratings for the certificates or any class thereof issued in connection
with the Securitization. All such obligations or securities shall mature or be
redeemable, or provide for payments of interest thereon, on or prior to the
Business Day preceding the date principal and interest payments are required to
be paid pursuant to Article XIII.
          “Defeasance Lockout Period” shall have the meaning set forth in the
Note.
          “Defeasance Note” shall have the meaning set forth in Section 13.1.1.
          “Defeasance Security Agreement” shall have the meaning set forth in
Section 13.1.2.
          “Deficiency” shall have the meaning set forth in Section 6.2.4(b)(ii).
          “Disclosure Documents” shall have the meaning set forth in
Section 14.3.1.
          “Eligible Account” has the meaning set forth in the Account Agreement.

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          “Environmental Certificate” shall have the meaning set forth in
Section 12.2.
          “Environmental Claim” shall mean any claim, action, cause of action,
investigation or written notice by any Person alleging potential liability
(including potential liability for investigatory costs, cleanup costs, natural
resource damages, property damages, personal injuries or penalties) arising out
of, based upon or resulting from (a) the presence, threatened presence, release
or threatened release into the environment of any Hazardous Materials from or at
the Property, or (b) the violation, or alleged violation, of any Environmental
Law relating to the Property.
          “Environmental Consultant” shall mean an Independent environmental
consulting firm having at least five years experience (a) conducting
environmental assessments for properties similar to the Property and
(b) preparing and supervising remediation plans for properties similar to the
Property, which firm is selected by Borrower and is reasonably acceptable to
Lender.
          “Environmental Event” shall have the meaning set forth in
Section 12.2.
          “Environmental Indemnity” shall mean the Environmental Indemnity made
by Guarantor in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
          “Environmental Law” shall have the meaning provided in the
Environmental Indemnity.
          “Environmental Reports” shall have the meaning set forth in
Section 12.1.
          “ERISA” shall mean the United States Employee Retirement Income
Security Act of 1974, as amended from time to time and any successor statute or
statutes thereto, the temporary and permanent regulations promulgated
thereunder, and the rulings issued thereunder.
          “Event of Default” shall have the meaning set forth in
Section 17.1(a).
          “Excess Cash Flow” shall have the meaning set forth in
Section 3.1.6(a)(v).
          “Exchange Act” shall have the meaning set forth in Section 14.3.1.
          “Exculpated Parties” shall have the meaning set forth in
Section 18.1.1.
          “Excusable Delay” shall mean a delay solely due to acts of god,
governmental restrictions, stays, judgments, orders, decrees, enemy actions,
civil commotion, fire, casualty, strikes, work stoppages, shortages of labor or
materials or other causes beyond the reasonable control of Borrower, but
Borrower’s lack of funds in and of itself shall not be deemed a cause beyond the
control of Borrower.
          “Facility Mortgagee Agreement” shall mean that certain Facility
Mortgagee Agreement among Lender, Borrower and Tenant, as the same may be
amended, restated,

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replaced, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
          “FF&E” shall mean furniture, fixtures, equipment and personal property
of the type customarily utilized in hotel properties such as the Property.
          “FF&E Holding Account” shall mean the account maintained by Manager in
accordance with Section 5.02 (FF&E Reserve) of the Management Agreement, into
which Manager deposits the Monthly FF&E Reserve Amount in accordance with the
terms of the Management Agreement.
          “FF&E Reserve Account” shall have the meaning set forth in
Section 3.1.1(iv).
          “FF&E Reserve Amount” shall have the meaning set forth in
Section 16.3.1.
          “Fiscal Year” shall mean each 12 month period commencing on January 1
and ending on December 31 during each year of the term of the Loan or the
portion of any such 12-month period falling within the term of the Loan in the
event that such a 12-month period occurs partially before or after, or partially
during, the term of the Loan.
          “Fitch” shall mean Fitch Ratings Ltd., together with its successors
and assigns.
          “GAAP” shall mean the generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession, to the extent such
principles are applicable to the facts and circumstances on the date of
determination.
          “General Partner” shall mean Ashford Crystal Gateway GP LLC, a
Delaware limited liability company, together with its successors and permitted
assigns.
          “Governmental Authority” shall mean any court, board, agency,
commission, office or other authority of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise) whether now or hereafter in existence.
          “Guarantor” shall mean Ashford Hospitality Limited Partnership, a
Delaware limited partnership, together with its successors and permitted
assigns.
          “Hazardous Materials” shall have the meaning provided in the
Environmental Indemnity.
          “Holding Account” shall have the meaning set forth in Section 3.1.1.
          “Impositions” shall mean all taxes (including all ad valorem, sales
(including those imposed on lease rentals), use, single business, gross
receipts, value added, intangible transaction, privilege or license or similar
taxes), governmental assessments (including all

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assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Agreement), water, sewer or other rents and charges,
excises, levies, fees (including license, permit, inspection, authorization and
similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property and/or any Rents (including all interest
and penalties thereon), which at any time prior to, during or in respect of the
term hereof may be assessed or imposed on or in respect of or be a Lien upon
(a) Borrower (including all income, franchise, single business or other taxes
imposed on Borrower for the privilege of doing business in the jurisdiction in
which the Property is located), (b) the Property, or any other collateral
delivered or pledged to Lender in connection with the Loan, or any part thereof,
or any Rents therefrom or any estate, right, title or interest therein, or
(c) any occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Property or the leasing or use of all or
any part thereof. Nothing contained in this Agreement shall be construed to
require Borrower to pay any tax, assessment, levy or charge imposed on (i) any
tenant occupying any portion of the Property, (ii) any third party manager of
the Property, including any Manager, or (iii) Lender in the nature of a capital
levy, estate, inheritance, succession, income or net revenue tax.
          “Improvements” shall have the meaning set forth in the Security
Instrument.
          “Increased Costs” shall have the meaning set forth in Section 2.4.1.
          “Indebtedness” shall mean, at any given time, the Principal Amount,
together with all accrued and unpaid interest thereon and all other obligations
and liabilities due or to become due to Lender pursuant hereto, under the Note
or in accordance with the other Loan Documents and all other amounts, sums and
expenses paid by or payable to Lender hereunder or pursuant to the Note or the
other Loan Documents.
          “Indemnified Parties” shall have the meaning set forth in
Section 19.12(b).
          “Independent” shall mean, when used with respect to any Person, a
Person who: (a) does not have any direct financial interest or any material
indirect financial interest in Borrower or in any Affiliate of Borrower; (b) is
not connected with Borrower or any Affiliate of Borrower as an officer,
employee, promoter, underwriter, trustee, partner, member, manager, creditor,
director, supplier, customer or person performing similar functions and; (c) is
not a member of the immediate family of a Person defined in (a) or (b) above.
          “Independent Accountant” shall mean a firm of nationally recognized,
certified public accountants which is Independent and which is selected by
Borrower and reasonably acceptable to Lender.
          “Independent Architect” shall mean an architect, engineer or
construction consultant selected by Borrower which is Independent, licensed to
practice in the State and has at least five years of architectural experience
and which is reasonably acceptable to Lender.
          “Independent Director”, “Independent Manager”, or “Independent Member”
shall mean an Independent individual who (a) has prior experience as an
independent manager,

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independent director or independent member with at least five years of
employment experience and who is provided by CT Corporation, Corporation Service
Company, National Registered Agents, Inc., Global Securitization Services, LLC,
Wilmington Trust Company, Stewart Management Company, Lord Securities
Corporation, or any other nationally-recognized company regularly engaged in the
business of providing professional independent managers, in each case, that is
not an Affiliate of Borrower and that provides professional independent managers
and other corporate services in the ordinary course of its business; (b) is duly
appointed as an “Independent Director”, “Independent Manager” or “Independent
Member”; and (c) is not, has not been in the last five years, and will not be
while serving as an Independent Director, Independent Manager or Independent
Member, as applicable, any of the following: (i) a member, partner, equity
holder, manager, director, trustee, officer, attorney, counsel or employee of
Borrower, the General Partner, Tenant, Guarantor or any of their respective
equity holders or Affiliates (other than serving as an Independent Director,
Independent Manager or Independent Member of (x) Borrower, General Partner,
Tenant or Guarantor or (y) an Affiliate of Borrower, the General Partner, Tenant
or Guarantor); (ii) a creditor, customer, supplier or service provider
(including provider of professional services) to Borrower, the General Partner,
Tenant, Guarantor or any of their respective equity holders or Affiliates (other
than an employee of a nationally-recognized company that routinely provides
professional independent managers and other corporate services to the General
Partner, Tenant, Guarantor or any of their respective Affiliates in the ordinary
course of its business); (iii) a family member of any such member, partner,
equity holder, manager, director, trustee, officer, employee, creditor,
customer, supplier or service provider; or (i) a Person that Controls (whether
directly, indirectly or otherwise) any of (i), (ii) or (iii) above.
          “Insurance Requirements” shall mean, collectively, (a) the terms of
any insurance policy required pursuant to this Agreement and (b) all regulations
and then-current standards applicable to or affecting the Property or any part
thereof or any use or condition thereof, which may, at any time, be recommended
by the Board of Fire Underwriters, if any, having jurisdiction over the
Property, or such other body exercising similar functions.
          “Insurance Reserve Account” shall have the meaning set forth in
Section 3.1.1(ii).
          “Insurance Reserve Amount” shall have the meaning set forth in
Section 16.2.1.
          “Intangible” shall have the meaning set forth in the Security
Instrument.
          “Interest Determination Date” shall have the meaning set forth in the
Note.
          “Interest Period” shall have the meaning set forth in the Note.
          “Intellectual Property” means shall mean (a) all trademarks, service
marks, trade names, licenses, trade dress, designs, logos, slogans, or other
indications of origin, and general intangibles of like nature, whether
registered or unregistered, together with all registrations and applications
therefor and all goodwill of any business connected with the use of and
symbolized thereby, (b) patents and industrial designs (including any
continuations, divisional, continuations in part, renewals, reissues, and
applications for any of the foregoing), (c) rights in computer programs,
documentation and databases, including copyrights therein; (d) copyrights and

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copyrights in unpublished and published works, (e) ways of doing business,
(f) Internet domain names, (g) any registration, applications for registration
or issuance, recordings, renewals and extensions relating to any of the
foregoing, and (h) trade secrets and other information (including know-how,
ideas, techniques, customer lists, customer information, business methods and
processes, marketing plans, specifications and other similar information) that
is confidential and proprietary to its owner, whether patentable or
unpatentable, as well as inventions, workings of authorship, technology, data
and databases, manuals, promotional materials, telephone numbers (toll free or
otherwise), reservation systems, in each case, used or otherwise necessary to
operate the Property as a first-class, full service hotel and conference center,
and other appurtenant and related uses and whether now owned or hereafter
acquired.
          “Land” shall have the meaning set forth in the Security Instrument.
          “Late Payment Charge” shall have the meaning set forth in
Section 2.2.3.
          “LC Expiration Date” shall have the meaning set forth in the
definition of “Letter of Credit”.
          “Lease” and “Leases” shall mean any lease (other than the Operating
Lease), sublease or sub-sublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect)
pursuant to which any Person is granted a possessory interest in, or right to
use or occupy all or any portion of any space in the Property, and every
modification, amendment or other agreement relating to such lease, sublease,
sub-sublease, or other agreement entered into in connection with such lease,
sublease, sub-sublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto; provided that a “Lease” shall
not include any license or concession granted to any individuals who are
transient guests occupying the hotel operated on the Property.
          “Lease Action” shall have the meaning set forth in Section 8.8.1.
          “Legal Requirements” shall mean all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations
and requirements, and irrespective of the nature of the work to be done, of
every Governmental Authority including, without limitation, Environmental Laws
and all covenants, restrictions and conditions now or hereafter of record which
may be applicable to Borrower or to the Property and the Improvements and the
Building Equipment thereon, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of the Property and
the Improvements and the Building Equipment thereon including, without
limitation, building and zoning codes and ordinances and laws relating to
handicapped accessibility.
          “Lender” shall have the meaning set forth in the first paragraph of
this Agreement.
          “Letter of Credit” shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit (either an evergreen letter of
credit or one which does not expire until at least 60 days after Lender’s
reasonable estimation of the completion date for the applicable Material
Alteration (the “LC Expiration Date”), in favor of Lender and entitling Lender
to draw thereon in New York, New York, based solely on a statement executed by
an officer or

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authorized signatory of Lender and issued by an Approved Bank. If at any time
(a) the institution issuing any such Letter of Credit shall cease to be an
Approved Bank or (b) the Letter of Credit is due to expire prior to the LC
Expiration Date, Lender shall have the right immediately to draw down the same
in full and hold the proceeds thereof in accordance with the provisions of this
Agreement, unless Borrower shall deliver a replacement Letter of Credit from an
Approved Bank within (i) as to (a) above, 20 days after Lender delivers written
notice to Borrower that the institution issuing the Letter of Credit has ceased
to be an Approved Bank or (ii) as to (b) above, at least 20 days prior to the
expiration date of said Letter of Credit.
          “Liabilities” shall have the meaning set forth in Section 14.3.2(b).
          “License” shall have the meaning set forth in Section 4.1.23.
          “Lien” shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance or charge
on or affecting Borrower, the Property, any portion thereof or any interest
therein, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, the filing of any financing statement, and the
filing of mechanic’s, materialmen’s and other similar liens and encumbrances.
          “Liquidated Damages Amount” shall have the meaning set forth in the
Note.
          “Loan” shall mean the loan in the amount of $105,000,000.00 made by
Lender to Borrower pursuant to this Agreement.
          “Loan Documents” shall mean, collectively, this Agreement, the Note,
the Security Instrument, the Assignment of Leases, the Environmental Indemnity,
the Assignment of Management Agreement, Subordination of Operating Lease, the
Account Agreement, the Recourse Guaranty, the Manager’s Subordination Agreement,
the Control Agreement, the Facility Mortgagee Agreement and all other documents
executed and/or delivered by Borrower in connection with the Loan including any
certifications or representations delivered by or on behalf of Borrower or any
Affiliate of Borrower.
          “Lockbox Event” shall mean the occurrence and continuation of an Event
of Default or a DSCR Event.
          “Lockout Release Date” shall have the meaning set forth in the Note.
          “Management Agreement” shall mean collectively, (a) the Management
Agreement dated as of July 13, 2006, between Manager and Tenant, as amended by
the First Amendment to Management Agreement dated as of July 17, 2007, the
Second Amendment to Management Agreement dated as of February 20, 2009 and the
Third Amendment to Management Agreement dated as of December __, 2009, and as
further modified by those certain letters dated July 13, 2006, September 26,
2008, and April 6, 2010, in each case between Manager, Tenant and Borrower,
(b) the Owner’s Agreement, and (c) the Real Estate and Personal Property Taxes
Agreement dated as of February 20, 2009, among Manager, Borrower and Tenant, as
amended by the First Amendment date the date hereof, in each case, as the same
may

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be amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
          “Management Fee” shall mean an amount equal to the property management
fee payable to the Manager pursuant to the terms of the Management Agreement for
management services.
          “Manager” shall mean Marriott Hotel Services, Inc., a Delaware
corporation, together with its successors and permitted assigns.
          “Manager’s Subordination Agreement” shall mean that certain
Subordination, Non-Disturbance and Attornment Agreement among Lender, Borrower,
Tenant and Manager, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time in accordance with the terms thereof.
          “Material Action” shall mean (a) to merge or consolidate such Person
(or in the case of General Partner, Borrower) with or into any other entity or
convey or Transfer all or substantially all of the properties and assets of such
Person (or in the case of General Partner, Borrower) other than as expressly
provided in Article VIII, (b) to institute proceedings to have such Person (or
in the case of General Partner, Borrower) be adjudicated bankrupt or insolvent,
(c) consent to the institution of bankruptcy or insolvency proceedings against
such Person (or in the case of General Partner, Borrower), (d) file a petition
seeking, or consent to, reorganization or relief with respect to such Person (or
in the case of General Partner, Borrower) under any applicable federal or state
law relating to bankruptcy, (e) consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of such Person (or in the case of General Partner, Borrower) or a
substantial part of its property and assets, (f) make any assignment for the
benefit of creditors of such Person (or in the case of General Partner,
Borrower), and (g) admit in writing the such Person’s (or in the case of General
Partner, Borrower) inability to pay its respective debts generally as they
become due, or take action in furtherance of any such action, or, to the fullest
extent permitted by law, dissolve or liquidate such Person (or in the case of
General Partner, Borrower).
          “Material Adverse Effect” shall mean any event or condition that has a
material adverse effect on (a) the Property, taken as a whole, (b) the use,
operation, or value of the Property, (c) the business, profits, operations or
financial condition of Borrower, or (d) the ability of Borrower to repay the
principal and interest of the Loan as it becomes due or to satisfy any of
Borrower’s obligations under the Loan Documents.
          “Material Alteration” shall mean any Alteration which, when aggregated
with all related Alterations (other than decorative work such as painting, wall
papering and carpeting and the replacement of fixtures, furnishings and
equipment to the extent being of a routine and recurring nature and performed in
the ordinary course of business) constituting a single project, involves an
estimated cost exceeding the Threshold Amount with respect to such Alteration or
related Alterations (including the Alteration in question) then being undertaken
at the Property.
          “Maturity Date” shall have the meaning set forth in the Note.
          “Maturity Date Payment” shall have the meaning set forth in the Note.

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          “Maximum Legal Rate” shall mean the maximum non-usurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the Note
and as provided for herein or the other Loan Documents, under the laws of such
state or states whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.
          “Mezzanine Borrower” shall have the meaning set forth in
Section 8.4.3(c).
          “Mezzanine Loan” shall have the meaning set forth in Section 8.4.3.
          “Monetary Default” shall mean a Default (a) subject to the terms of
Section 7.3 hereof, in the payment of money to Lender or as otherwise required
to be paid by Borrower pursuant to the Loan Documents or (b) arising pursuant to
Section 17.1(a)(vi) or (vii).
          “Monthly FF&E Reserve Amount” shall have the meaning set forth in
Section 16.3.1.
          “Monthly Insurance Reserve Amount” shall have the meaning set forth in
Section 16.2.1.
          “Monthly Tax Reserve Amount” shall have the meaning set forth in
Section 16.1.1.
          “Moody’s” shall mean Moody’s Investors Service, Inc., together with
its successors and assigns.
          “Net Operating Income” shall mean the amount obtained by subtracting
Operating Expenses from Operating Income.
          “New Mezzanine Borrower” shall have the meaning provided in
Section 5.1.11(b).
          “New Mezzanine Loan” shall have the meaning provided in
Section 5.1.11(b).
          “Non-Consolidation Opinion” shall have the meaning provided in Section
2.5.4(b).
          “Note” shall mean that certain Note in the principal amount of
$105,000,000 made by Borrower in favor of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
          “Obligations” shall have meaning set forth in the recitals of the
Security Instrument.
          “OFAC List” shall means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and accessible through the
internet website www.treas.gov/ofac/t11sdn.pdf.

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          “Officer’s Certificate” shall mean a certificate executed by an
authorized signatory of Borrower that is familiar with the financial condition
of Borrower and the operation of the Property.
          “Operating Asset” shall have the meaning set forth in the Security
Instrument.
          “Operating Expenses” shall mean, for any period, without duplication,
all expenses actually paid or payable by Borrower, Tenant or Manager during such
period in connection with the operation, management, maintenance, repair and use
of the Property, determined on an accrual basis, and, except to the extent
otherwise provided in this definition, in accordance with GAAP. Operating
Expenses specifically shall include (a) all expenses incurred for the applicable
period based on quarterly financial statements delivered to Lender in accordance
with Article XI, (b) all payments required to be made pursuant to any REAs,
(c) property management fees in an amount equal to the greater of three percent
of Operating Income and the management fees actually paid under the Management
Agreement, (d) administrative, payroll, security and general expenses for the
Property, (e) the cost of utilities, inventories and fixed asset supplies
consumed in the operation of the Property, (f) a reasonable reserve for
uncollectible accounts, (g) costs and fees of independent professionals
(including, without limitation, legal, accounting, consultants and other
professional expenses), technical consultants, operational experts (including
quality assurance inspectors) or other third parties retained to perform
services required or permitted hereunder, (h) cost of attendance by employees at
training and manpower development programs, (i) association dues, (j) computer
processing charges, (k) operational equipment and other lease payments as
reasonably approved by Lender, (l) taxes and other Impositions, other than
income taxes or other Impositions in the nature of income taxes and insurance
premiums and (m) all underwritten reserves required by Lender hereunder (without
duplication). Notwithstanding the foregoing, Operating Expenses shall not
include (i) depreciation or amortization, (ii) income taxes or other Impositions
in the nature of income taxes, (iii) any expenses (including legal, accounting
and other professional fees, expenses and disbursements) incurred in connection
with the making of the Loan or the Transfer, financing or refinancing of all or
any portion of the Property or in connection with the recovery of Proceeds which
are applied to prepay the Note, (iv) any expenses which in accordance with GAAP
should be capitalized, (v) Debt Service, and (vi) any item of expense which
would otherwise be considered within Operating Expenses pursuant to the
provisions above but is paid directly by any tenant under a Lease.
          “Operating Income” shall mean, for any period, all income of Borrower
or Tenant during such period from the use, ownership or operation of the
Property including:
               (a) business interruption insurance proceeds with respect to the
Property allocable to the applicable reporting period; and
               (b) all other amounts which in accordance with GAAP are included
in Borrower’s quarterly or annual financial statements delivered to Lender in
accordance with Article XI as operating income attributable to the Property.
Notwithstanding the foregoing, Operating Income shall not include (i) any
Proceeds (other than business interruption insurance proceeds and only to the
extent allocable to the applicable

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reporting period), (ii) any proceeds resulting from the Transfer of all or any
portion of the Property, (iii) security deposits received from Tenants until
forfeited or applied, and (iv) any rent (whether base rent or percentage rent)
payable to Borrower under the Operating Lease. Operating Income shall be
calculated on the accrual basis of accounting and, except to the extent
otherwise provided in this definition, in accordance with GAAP.
          “Operating Lease” shall mean the Lease Agreement dated as of July 13,
2006, between Borrower and Tenant, as amended by the Amendment to Lease
Agreement dated January 1, 2008, and the Second Amendment to Lease Agreement
dated April 1, 2009, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
          “Opinion of Counsel” shall mean an opinion of counsel of a law firm
selected by Borrower and reasonably acceptable to Lender.
          “Other Charges” shall mean maintenance charges, impositions other than
Impositions, and any other charges, including, without limitation, vault charges
and license fees for the use of vaults, chutes and similar areas adjoining the
Property, now or hereafter levied or assessed or imposed against the Property or
any part thereof by any Governmental Authority, other than those required to be
paid by a tenant pursuant to its respective Lease.
          “Other Taxes” shall have the meaning set forth in Section 2.4.3.
          “Owner’s Agreement” shall mean that certain Owner Agreement dated
July 13, 2006, among Manager, Borrower and Tenant, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
          “Parent” means Ashford Hospitality Trust, Inc., a Maryland
corporation, together with its successors and permitted assigns.
          “Payment Date” shall have the meaning set forth in the Note.
          “Permitted Debt” shall mean collectively, (a) the Note and the other
obligations, indebtedness and liabilities specifically provided for in any Loan
Document and secured by this Agreement, the Security Instrument and the other
Loan Documents; (b) trade payables and leases related to FF&E that are required
by GAAP to be capitalized by Borrower, in each case, incurred in the ordinary
course of Borrower’s business, not secured by Liens on the Property (other than
liens being properly contested in accordance with the provisions of this
Agreement or the Security Instrument), not to exceed three percent of the
Principal Amount at any one time outstanding, payable by or on behalf of
Borrower for or in respect of the operation of the Property in the ordinary
course of operating Borrower’s business; provided that (but subject to the
remaining terms of this definition) each such amount constituting trade payables
shall be paid within 60 days following the date on which each such amount is
incurred; (c) the obligations, indebtedness and liabilities associated with any
Preferred Equity issued in accordance with the terms of Section 8.4.2; (d) the
obligations, indebtedness and liabilities associated with any Mezzanine Loan
incurred in accordance with Section 8.4.3, (e) the obligations, indebtedness and
liabilities associated with any New Mezzanine Loan incurred in accordance with
the terms of Section 5.1.11(b), and (f) the obligations and liabilities of
Borrower under the Owner’s

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Agreement. Nothing contained in this definition shall be deemed to require
Borrower to pay any amount, so long as Borrower is in good faith, and by proper
legal proceedings, diligently contesting the validity, amount or application
thereof in accordance with Section 7.3 hereof. Notwithstanding anything set
forth herein, (i) in no event shall Borrower be permitted under this provision
to enter into a note (other than the Note and the other Loan Documents) or other
instrument for borrowed money and (ii) nothing herein shall prohibit the
delivery of a note by a New Mezzanine Borrower or Mezzanine Borrower in
connection with any New Mezzanine Loan or Mezzanine Loan incurred in accordance
with the terms of this Agreement.
          “Permitted Encumbrances” shall mean collectively, (a) the Liens and
security interests created or permitted by the Loan Documents (including with
respect to any Mezzanine Loans and New Mezzanine Loans), (b) all Liens,
encumbrances and other matters disclosed in the Title Policy, (c) Liens, if any,
for Impositions imposed by any Governmental Authority not yet due or delinquent,
and (d) rights of future tenants, licensees and concessionaires pursuant to
Leases hereinafter entered into in accordance with the terms of Section 8.8.
          “Permitted Investments” shall have the meaning set forth in the
Account Agreement.
          “Person” shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
          “Personal Property” shall have the meaning set forth in the granting
clause of the Security Instrument.
          “Physical Conditions Report” shall mean the structural engineering
report with respect to the Property (a) prepared by a Person designated by or
otherwise acceptable to Lender, (b) addressed to Lender, (c) prepared based on a
scope of work determined by Lender in Lender’s reasonable discretion, and (d) in
form and content acceptable to Lender in Lender’s reasonable discretion,
together with any amendments or supplements thereto.
          “Plan” shall have the meaning set forth in Section 4.1.10(a).
          “Preferred Equity” shall have the meaning set forth in Section 8.4.2.
          “Principal Amount” shall have the meaning set forth in the Note.
          “Prohibited Person” means any Person identified on the OFAC List or
any other Person with whom a U.S. Person may not conduct business or
transactions by prohibition of Federal law or Executive Order of the President
of the United States or America.
          “Proceeds” shall have the meaning set forth in Section 6.2.2.
          “Property” shall have the meaning set forth in the Security
Instrument.
          “Provided Information” shall have the meaning set forth in
Section 14.1(a).

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          “Qualified Institutional Holder” means a Person, other than an
individual, Borrower, General Partner, Guarantor or an Affiliate of Borrower,
General Partner or Guarantor, that satisfies the requirements of Schedule I.
          “Qualified Manager” shall mean (a) Manager, Remington Lodging &
Hospitality, LLC or their respective Affiliates, (b) a reputable and experienced
hotel management organization of national standing similar that (i) has at least
three years experience in the management and operation of a business hotel
substantially similar to the Property in the Washington-Baltimore-Northern
Virginia, DC-MD-VA-WV CSA, (ii) manages and operates, at the time of the
proposed engagement or transfer, at least three business hotels having an
aggregate (exclusive of the Property) of at least 2,000 guest rooms, (iii) is
not, at the time of the proposed engagement or transfer, subject to any action
or proceeding under the Bankruptcy Code, (iv) (A) prior to a Securitization,
Borrower shall have obtained the prior written consent of Lender for such
Person, which consent shall not be unreasonably withheld or delayed and
(B) after a Securitization, in addition to Lender’s consent, which consent shall
not be unreasonably withheld or delayed, Borrower shall have obtained a Rating
Agency Confirmation or (c) any other Person as Lender shall approve in its sole
and absolute discretion.
          “Qualified Transferee” shall mean any one of the following Persons:
(a) a pension fund, pension trust or pension account that has total real estate
assets of at least $500,000,000 (exclusive of the Property); (b) a pension fund
advisor which (i) controls or manages accounts of at least $500,000,000 of real
estate assets (exclusive of the Property), and (ii) is acting on behalf of one
or more pension funds that own substantial interests in and/or operate four
Class “A” business hotel projects with at least 1,000 rooms (exclusive of the
Property); (c) an insurance company which is subject to supervision by an
insurance commissioner, or similar official or agency, or a state or territory
of the United States (including the District of Columbia) (i) with a net worth
as of a date no more than six months prior to the date of the Transfer of at
least $250,000,000 and (ii) who controls real estate assets of at least
$1,000,000,000 (exclusive of the Property); (d) a corporation organized under
the banking laws of the United States or any state or territory of the United
States (including the District of Columbia) (i) with a combined capital and
surplus of at least $250,000,000 and (ii) which controls, directly or
indirectly, gross real estate assets of at least $500,000,000 (exclusive of the
Property); (e) any Person (other than an individual) (i) with a long term
unsecured debt rating from each of the Rating Agencies of at least “BBB-” (or
its equivalent) and is regularly engaged (itself or through a wholly-owned
subsidiary) in making commercial real estate loans or owning commercial real
estate or (ii) who together with Affiliates (including, without limitation, real
estate or other investment funds managed by such Person or its Affiliates and
joint ventures) (A) has a net worth, market capitalization, capital commitments
or assets under management, as of a date no more than six months prior to the
date of such Transfer, of at least $250,000,000 and (B)(I) owns substantial
interests in and/or operates four Class “A” business hotel projects totaling at
least 1,000 rooms (exclusive of the Property), or (II) controls real estate
assets of at least $250,000,000 (exclusive of the Property); (f) any Person in
which more than 50% of the ownership interests are owned directly or indirectly
by any of the entitles listed in subsections (a) through (e), or any combination
of more than one such entity, and which is controlled directly or indirectly by
such entity or entities.

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          “Rating Agencies” shall mean (a) prior to a Securitization, S&P,
Moody’s, Fitch or any other nationally-recognized statistical rating agency
which has been approved by Lender and (b) after a Securitization has occurred,
each such Rating Agency which has rated the Securities in the Securitization.
          “Rating Agency Confirmation” shall mean, collectively, a written
affirmation from each of the Rating Agencies that the credit rating of the
Securities given by such Rating Agency immediately prior to the occurrence of
the event with respect to which such Rating Agency Confirmation is sought will
not be qualified, downgraded or withdrawn as a result of the occurrence of such
event, which affirmation may be granted or withheld in such Rating Agency’s sole
and absolute discretion. In the event that, at any given time, no such
Securities shall have been issued and are then outstanding, then the term Rating
Agency Confirmation shall be deemed instead to require the written approval of
Lender based on its good faith determination of whether the Rating Agencies
would issue a Rating Agency Confirmation if any such Securities were
outstanding.
          “REAs” shall mean, collectively, as the same may be amended, restated,
supplemented or otherwise modified from time to time, those certain agreements
more specifically described on Schedule IV.
          “Real Estate Taxes” means all real and personal ad valorem taxes,
assessments, or impositions at any time imposed or to be imposed by a
Governmental Authority upon the Borrower, Property, Account Collateral or any
other collateral delivered from time to time to secure the repayment of the
Indebtedness.
          “Real Property” shall mean, collectively, the Land, the Improvements
and the Appurtenances (as defined in the Security Instrument).
          “Recourse Guaranty” shall mean that certain Guaranty of Recourse
Obligations of Borrower by Guarantor in favor of Lender, as the same may be
amended, supplemented, restated or otherwise modified from time to time.
          “Register” shall have the meaning set forth in Section 15.4.
          “Registrar” shall have the meaning set forth in Section 15.1(a).
          “Regulatory Change” shall mean any change after the date of this
Agreement in federal, state or foreign laws or regulations or the adoption or
the making, after such date, of any interpretations, directives or requests
applying to Lender, or any Person Controlling Lender or to a class of banks or
companies Controlling banks of or under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
          “Related Party” and “Related Parties” shall have the meaning set forth
in Section 4.1.45.
          “Rent” and “Rents” shall mean all rents, rent equivalents, moneys
payable as damages or in lieu of rent or rent equivalents, royalties (including,
without limitation, all oil and

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gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower from any and all sources arising from or
attributable to the Property and Proceeds, if any, from business interruption or
other loss of income insurance.
          “S&P” shall mean Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., together with its successors and assigns.
          “Securities” shall have the meaning set forth in Section 14.1.
          “Securities Act” shall have the meaning set forth in Section 14.3.1.
          “Securitization” shall have the meaning set forth in Section 14.1.
          “Security Deposits” shall have the meaning set forth in Section 8.8.2.
          “Security Instrument” shall mean that certain first priority Deed of
Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of
Leases, Rents and Security Deposits executed and delivered by Borrower to
Lawyers Title Realty Services, Inc for the benefit of Lender and encumbering the
Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
          “Servicer” shall mean such Person designated in writing to Borrower by
Lender, in its sole discretion, to act as Lender’s agent hereunder with such
powers as are specifically delegated to the Servicer by Lender, whether pursuant
to the terms of this Agreement, the Account Agreement or otherwise, together
with such other powers as are reasonably incidental thereto.
          “Single Purpose Entity” shall mean a Person (other than an individual)
that, at all times on and after the date hereof, complies with the following
requirements unless it has received either prior consent to do otherwise from
Lender, and, following a Securitization, a Rating Agency Confirmation has been
delivered to Lender:
               (a) is and shall be organized solely for the purpose of (i) in
the case of Borrower: (A) the acquisition, holding, ownership, management,
operation, leasing, improvement, development, disposal and financing of the
Property; (B) conducting all business activity of Borrower on, in or in
connection with the Property and all business incidental thereto or operated in
conjunction therewith; (C) the execution, delivery and performance of the Loan
Documents to which Borrower is a party; and (D) any actions or activities
permitted under the laws of the State of Delaware which are necessary or
incidental to the activities described in clauses (A) through (C), (ii) in the
case of General Partner: (A) to act as the sole general partner of Borrower;
(B) to execute, deliver and perform the Loan Documents and the Management
Agreement to which General Partner or Borrower is a party, in its individual
capacity and in its capacity as the sole general partner of Borrower; (C) to
cause Borrower to invest, or direct the investment of, proceeds from the
Property and its other assets and any capital and income of General Partner in
compliance with the Loan Documents and the Management Agreement or as

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otherwise determined by the member of General Partner and not inconsistent with
the Loan Documents and the Management Agreement or Section 7 and 9(f) of General
Partner’s limited liability company agreement; and (D) to engage in any lawful
act or activity and to exercise any powers permitted to limited liability
companies organized under the laws of the State of Delaware that are related or
incidental to and necessary, convenient or advisable for the accomplishment of
the above mentioned purposes; and (iii) in the case of Tenant: (A) to enter into
and perform the obligations of Tenant under the Operating Lease, Management
Agreement, franchise agreements, Licenses and maintenance, service, lease and
other agreements necessary for the operation of the Property; (B) to execute,
deliver and perform the Loan Documents to which it is a party; and (C) engage in
any lawful act or activity and to exercise any powers permitted to corporations
organized under the laws of the State of Delaware that are related or incidental
to and necessary, convenient or advisable for the accomplishment of the above
mentioned purposes;
               (b) is organized solely for the purposes specified in clause
(a) above, as applicable;
               (c) shall not engage in any business unrelated to the applicable
purposes set forth in clause (a) above;
               (d) does not have and shall not have any assets other than
(i) personal property necessary or incidental to its ownership and operation of
the Property, and (ii) cash, cash equivalents and accounts receivable, and
(iii) in the case of (A) Borrower, the Property (B) General Partner, its general
partnership interests in Borrower and personal property necessary or incidental
to its ownership and operation of the foregoing, and (C) Tenant, its interest in
the Operating Lease and personal property necessary or incidental to its
ownership and operation of the foregoing;
               (e) shall not engage in, seek, consent to or permit (i) any
dissolution, winding up, liquidation, consolidation or merger, (ii) any sale or
other transfer of all or substantially all of its assets or any sale of assets
outside the ordinary course of its business, except as permitted by the Loan
Documents, or (iii) any Transfer of any direct or indirect interest in Borrower
or General Partner, except as permitted by the Loan Documents;
               (f) shall not cause, consent to or permit any amendment of its
limited partnership agreement, articles of incorporation, articles of
organization, certificate of formation, operating agreement, bylaws or other
organizational document, as applicable, with respect to the matters set forth in
this definition without the prior written consent of Lender;
               (g) if such entity is a limited partnership, has and shall have
at least one general partner and has and shall have, as its only general
partners, SPE Entities, each of which (i) is a corporation or single-member
Delaware limited liability company, (ii) has two Independent Managers or
Independent Members, as applicable, and (iii) holds a direct interest as general
partner in the limited partnership of not less than one tenth of one percent
(0.1%);
               (h) if such entity is a corporation, has and shall have at least
two (2) Independent Directors;

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               (i) if such entity is a limited liability company (other than a
limited liability company meeting all of the requirements applicable to a
single-member limited liability company set forth in this definition of “Special
Purpose Entity”), has and shall have at least one member or manager that is a
Special Purpose Entity, that is a corporation or a limited liability company
meeting all of the requirements applicable to a single-member limited liability
company set forth in this definition of “Special Purpose Entity”, that has at
least two Independent Managers or Independent Members, as applicable, and that
directly owns at least one tenth of one percent (0.1%) of the equity of the
limited liability company;
               (j) if such entity is a single-member limited liability company,
(i) is and shall be a Delaware limited liability company, (ii) has and shall
have at least two Independent Mangers serving as managers of such company,
(iii) shall not take any Material Action, with respect to any SPE Entity unless
two Independent Managers then serving as managers of the company shall have
consented in writing to such action, and (iv) has and shall have either (A) a
member which owns no economic interest in the company, has signed the company’s
limited liability company agreement and has no obligation to make capital
contributions to the company, or (B) two natural persons or one entity that is
not a member of the company, that has signed its limited liability company
agreement and that, under the terms of such limited liability company agreement
becomes a member of the company immediately prior to the withdrawal or
dissolution of the last remaining member of the company;
               (k) shall not (and, if such entity is (i) a limited liability
company, has and shall have a limited liability agreement or an operating
agreement, as applicable, (ii) a limited partnership, has a limited partnership
agreement, or (iii) a corporation, has a certificate of incorporation or
articles that, in each case, provide that such entity shall not) without the
affirmative vote of two Independent Directors, Independent Managers or
Independent Members, as applicable, of itself or the consent of any other SPE
Entity that is a member or general partner in it take any Material Action;
               (l) shall not take any action requiring the unanimous affirmative
vote of its members, partners, stockholders, managers, directors or similar
Persons unless all of the members, partners, stockholders, managers, directors
or similar Persons, including, without limitation, all Independent Directors,
Independent Managers and Independent Members, as applicable, shall have
participated in such vote;
               (m) shall at all times remain solvent and shall pay its debts and
liabilities (including, a fairly-allocated portion of any personnel and overhead
expenses that it shares with any Affiliate) from its assets as the same shall
become due, and shall maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations; provided, however, that the provisions of
this clause (m) shall not require, and shall not be construed to require, any
direct or indirect partner, member or shareholder in such Person to make any
capital contributions to such Person and failure to comply with the provisions
of this clause (m) shall, in no event give rise, or be construed to give rise,
to any liability or obligation on the part of any such direct or indirect
partner, member or shareholder under the Loan Documents (including, without
limitation, the Guarantor), except with respect to distributions of capital
received in violation of any applicable Legal Requirements;

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               (n) in making any determination of whether to consent or
authorize a Material Action, to the fullest extent permitted by applicable Legal
Requirements, notwithstanding any duty otherwise existing at law or in equity,
the Independent Directors, Independent Managers or Independent Members, as
applicable, shall consider only the interests of such Person (including its
creditors) in acting or otherwise voting on matters applicable to such Person;
and except for such duties (including duties to the beneficial owner of such
Person and such Person’s creditors solely to the extent of their respective
economic interests in the Person but excluding (i) all other interests of such
beneficial owners, (ii) the interests of Affiliates of such Person and (iii) the
interests of any group of Affiliates of which such Person is a part) the
Independent Directors, Independent Managers or Independent Members, as
applicable, shall not have any fiduciary duties to, and shall not consider the
interests of, any direct or indirect beneficial owner of such Person, any
Affiliates of such Person, or the interests of any group of Affiliates of which
such Person is a part, provided, however, the foregoing shall not eliminate the
implied contractual covenant of good faith and fair dealing;
               (o) shall not fail to correct any known misunderstanding
regarding the separate identity of such entity and has not identified and shall
not identify itself as a division of any other Person;
               (p) to the extent that it is required to file tax returns under
applicable law, shall file its own tax returns, except to the extent that it is
required by law to file consolidated federal or unitary state tax returns (or
any analogous combined state tax returns);
               (q) shall maintain its own records, books, resolutions and
agreements;
               (r) shall not commingle its funds or assets with those of any
other Person, except as permitted by the Loan Documents;
               (s) shall hold its assets in its own name;
               (t) will conduct its business in its own name and not permit its
name, identity or type of entity to be changed;
               (u) will maintain its books, records, financial statements, bank
accounts, accounting records and other entity documents separate from any other
Person and not have its assets listed on the financial statements of any other
Person except as required by GAAP; provided, however, that its assets may be
included in a consolidated financial statement of any of its Affiliates so long
as (i) an appropriate notation shall be made on such consolidated financial
statements indicating that such Person’s separate assets and credit are not
available to satisfy the debts and other obligations of such Affiliate and that
its liabilities do not constitute obligations of the consolidated entity and
(ii) such Person shall be shown as a separate member of such group;
               (v) will pay its own liabilities out of its own funds and assets
except as provided in the Environmental Indemnity and Recourse Guaranty;
               (w) shall observe all partnership, corporate or limited liability
company formalities, as applicable, as they relate to separateness;

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               (x) 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 other than pursuant to the Loan Documents or
the Management Agreement;
               (y) will incur, create or assume no indebtedness other than
Permitted Debt;
               (z) shall not acquire obligations or securities of its partners,
members or shareholders or any other owner or Affiliate;
               (aa) shall allocate fairly and reasonably any overhead expenses
that are shared with any of its Affiliates, constituents, or owners, or any
guarantors of any of their respective obligations, or any Affiliate of any of
the foregoing, including, but not limited to, paying for shared office space and
for services performed by any employee of an Affiliate;
               (bb) shall maintain and use separate stationery, invoices and
checks bearing its name and not bearing the name of any other entity unless such
entity is clearly designated as being its agent;
               (cc) other than in connection with the Loan, shall not pledge its
assets to secure the obligations of any Person;
               (dd) shall not make loans to any Person;
               (ee) shall not identify its partners, members or shareholders, or
any Affiliate of any of them, as a division or part of it, and shall not
identify itself as a division of any other Person;
               (ff) other than capital contributions and distributions permitted
under the terms of its organizational documents and the execution and delivery
of the Loan Documents, shall not enter into or be a party to, any transaction
with any of its partners, members, shareholders or Affiliates except in the
ordinary course of its business and on terms which are commercially reasonable
terms comparable to those of an arm’s-length transaction with an unrelated third
party;
               (gg) shall not have any obligation to, and shall not indemnify
its partners, officers, directors or members, as the case may be, in each case
unless such an obligation or indemnification is fully subordinated to the
Indebtedness and shall not constitute a claim against it in the event that its
cash flow is insufficient to pay the Indebtedness;
               (hh) maintain a sufficient number of employees in light of its
contemplated business purpose and pay the salaries of its own employees from its
own funds; and
               (ii) shall not form, acquire or hold any subsidiary, except in
the case of General Partner, its general partnership interest in Borrower;

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               (jj) shall comply with all of the terms and provisions contained
in its organizational documents that relate to its separateness; and
               (kk) shall cause its subsidiaries, if any, to comply all of the
terms and provisions contained in such subsidiary’s organizational documents
that relate to its separateness.
          “Special Taxes” shall mean any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, or any liabilities with
respect thereto, including those arising after the date hereof as result of the
adoption of or any change in law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority but excluding, in the case of
Lender, such taxes (including income taxes, franchise taxes and branch profit
taxes) as are imposed on or measured by Lender’s net income by the United States
of America or any Governmental Authority of the jurisdiction under the laws
under which Lender is organized or maintains a lending office.
          “SPE Entity” shall mean each of Borrower, General Partner and Tenant,
and if, as and when created in accordance with the terms of this Agreement, any
Mezzanine Borrower and any New Mezzanine Borrower.
          “State” shall mean the State in which the Property or any part thereof
is located.
          “Sub-Account(s)” shall have the meaning set forth in Section 3.1.1.
          “Subordination of Operating Lease” shall mean that certain
Subordination and Attornment Agreement between Lender and Tenant, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.
          “Survey” shall mean a survey of the Property prepared by a surveyor
licensed in the State and satisfactory to Lender and the company or companies
issuing the Title Policy, and containing a certification of such surveyor
satisfactory to Lender.
          “Taking” shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
          “Tax Reserve Account” shall have the meaning set forth in
Section 3.1.1(i).
          “Tax Reserve Amount” shall have the meaning set forth in
Section 16.1.1.
          “Tenant” shall mean Ashford Gateway TRS Corporation, a Delaware
corporation, together with its successors and permitted assigns.
          “Threshold Amount” shall mean $7,500,000.

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          “Title Company” shall mean, collectively, Commonwealth Land Title
Insurance Company and Chicago Title Insurance Company.
          “Title Policy” shall mean an ALTA mortgagee title insurance policy in
a form and substance acceptable to Lender (or, if the Property is in a State
which does not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and acceptable to Lender) issued by the Title Company
with respect to the Property and insuring the lien of the Security Instrument.
          “Total Loss” shall mean (a) a casualty, damage or destruction of the
Property which, in the reasonable judgment of Lender, (i) involves an actual or
constructive loss of more than 25% of the lesser of (A) the fair market value of
the Property or (B) the Principal Amount, and in either case with respect to
which Borrower is not required under the Operating Lease to apply Proceeds to
the restoration of the Property, or (ii) results in the cancellation of
Operating Lease or (b) a permanent Taking which, in the reasonable judgment of
Lender, (i) involves an actual or constructive loss of more than 15% of the
lesser of (A) the fair market value of the Property or (B) the Principal Amount,
or (ii) renders untenantable either more than 15% of the guest rooms at the
Property, or (c) a casualty, damage, destruction or Taking that affects so much
of the Property such that it would be impracticable, in Lender’s reasonable
discretion, even after restoration, to operate the Property as an economically
viable whole.
          “Transfer” shall mean to, directly or indirectly, sell, assign,
convey, mortgage, transfer, pledge, hypothecate, lease, sublease, license,
sublicense, encumber, grant a security interest in, exchange or otherwise
dispose of any beneficial interest or grant any option or warrant with respect
to, or where used as a noun, a direct or indirect sale, assignment, conveyance,
transfer, pledge or other disposition of any beneficial interest by any means
whatsoever whether voluntary, involuntary, by operation of law or otherwise.
          “Tunnel Agreement” means that certain Agreement dated May 4, 1981,
between EADS Associates (the predecessor in interest to Borrower) and The
Commonwealth of Virginia, acting by and through the State Highway and
Transportation Commissioner, relating to a certain underground pedestrian tunnel
running, in part, underneath the Property, as such agreement may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
          “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial
Code as in effect in the State.
          “Underwriter Group” shall have the meaning set forth in
Section 14.3.2(b).
          “U.S. Government Obligations” shall mean any direct obligations of, or
obligations guaranteed as to principal and interest by, the United States
Government or any agency or instrumentality thereof; provided that such
obligations are backed by the full faith and credit of the United States. Any
such obligation must be limited to instruments that have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change. If any
such obligation is rated by S&P, it shall not have an “r” highlighter affixed to
its rating. Interest must be fixed or tied to a single interest rate index plus
a single fixed spread (if any), and move proportionately with said index. U.S.
Government Obligations include, but are not limited

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to: U.S. Treasury direct or fully guaranteed obligations, Farmers Home
Administration certificates of beneficial ownership, General Services
Administration participation certificates, U.S. Maritime Administration
guaranteed Title XI financing, Small Business Administration guaranteed
participation certificates or guaranteed pool certificates, U.S. Department of
Housing and Urban Development local authority bonds, and Washington Metropolitan
Area Transit Authority guaranteed transit bonds. In no event shall any such
obligation have a maturity in excess of 365 days.
          “Work” shall have the meaning provided in Section 6.2.4(a).
     1.2 Principles of Construction. All references to sections and schedules
are to sections and schedules in or to this Agreement unless otherwise
specified. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Unless otherwise
specified herein or therein, all terms defined in this Agreement shall have the
definitions given to them in this Agreement when used in any other Loan Document
or in any certificate or other document made or delivered pursuant thereto. All
uses of the word “including” shall mean including, without limitation unless the
context shall indicate otherwise. Unless otherwise specified, the words hereof,
herein and hereunder and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined.
II. GENERAL TERMS
     2.1 Loan; Disbursement to Borrower.
          2.1.1 The Loan. Subject to and upon the terms and conditions set forth
herein, Lender hereby agrees to make and Borrower hereby agrees to accept the
Loan on the Closing Date.
          2.1.2 Disbursement to Borrower. Borrower may request and receive only
one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed. Borrower
acknowledges and agrees that the full proceeds of the Loan have been disbursed
by Lender to Borrower on the Closing Date.
          2.1.3 The Note, Security Instrument and Loan Documents. The Loan shall
be evidenced by the Note and secured by the Security Instrument, the Assignment
of Leases, this Agreement and the other Loan Documents.
          2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to
(a) repay and discharge any existing mortgage and mezzanine loans secured
directly or indirectly by the Property, (b) make initial deposits into the
Sub-Accounts as required hereunder, (c) pay costs and expenses incurred in
connection with the closing of the Loan, and (d) to the extent any proceeds
remain after satisfying clauses (a) through (c) above, for such other general
corporate purposes of Borrower as Borrower shall designate, including, for
distributions to the Guarantor and the General Partner.

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     2.2 Interest; Loan Payments; Late Payment Charge.
          2.2.1 Payment of Principal and Interest.
               (a) Except as set forth in Section 2.2.1(b), interest shall
accrue on the Principal Amount as set forth in the Note.
               (b) Upon the occurrence and during the continuance of an Event of
Default if the Loan is not repaid on the Maturity Date, interest on the
outstanding principal balance of the Loan and, to the extent permitted by law,
overdue interest and other amounts due in respect of the Loan shall accrue at
the Default Rate calculated from the date such payment was due without regard to
any grace or cure periods contained herein. Interest at the Default Rate shall
be computed from the occurrence of the Event of Default until the actual receipt
and collection of the Indebtedness (or that portion thereof that is then due).
To the extent permitted by applicable law, interest at the Default Rate shall be
added to the Indebtedness, shall itself accrue interest at the same rate as the
Loan and shall be secured by the Security Instrument. This paragraph shall not
be construed as an agreement or privilege to extend the date of the payment of
the Indebtedness, nor as a waiver of any other right or remedy accruing to
Lender by reason of the occurrence of any Event of Default, and Lender retains
its rights under the Note to accelerate and to continue to demand payment of the
Indebtedness upon the occurrence and during the continuation of an Event of
Default.
          2.2.2 Method and Place of Payment.
               (a) On each Payment Date, Borrower shall pay to Lender
$647,186.12.
               (b) The Maturity Date Payment shall be due and payable in full on
the Maturity Date.
               (c) All amounts advanced by Lender pursuant to the applicable
provisions of the Loan Documents, together with any interest at the Default Rate
or other charges as provided therein, shall be due and payable hereunder as
provided in the Loan Documents. In the event any such advance or charge is not
so repaid by Borrower, Lender may, at its option, first apply any payments
received under the Note to repay such advances, together with any interest
thereon, or other charges as provided in the Loan Documents, and the balance, if
any, shall be applied in payment of any installment of interest or principal
then due and payable.
          2.2.3 Late Payment Charge. If any principal, interest or any other
sums due under the Loan Documents (other than the outstanding Principal Amount
due and payable on the Maturity Date) is not paid by Borrower on or prior to the
date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of three percent of such unpaid sum or the Maximum Legal
Rate (the “Late Payment Charge”) in order to defray the expense incurred by
Lender in handling and processing such delinquent payment and to compensate
Lender for the loss of the use of such delinquent payment. Any such amount shall
be secured by this Agreement, the Security Instrument and the other Loan
Documents to the extent permitted by applicable law.

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          2.2.4 Usury Savings. This Agreement and the Note are subject to the
express condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due under the Note at a rate in excess of the Maximum Legal
Rate, then the Default Rate, as the case may be, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in
excess of the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due under the Note.
All sums paid or agreed to be paid to Lender for the use, forbearance, or
detention of the sums due under the Loan, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Loan until payment in full so that the rate or amount of
interest on account of the Loan does not exceed the Maximum Legal Rate of
interest from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
     2.3 Prepayments.
          2.3.1 Prepayments. No prepayments of the Loan shall be permitted
except as set forth in Section 4 of the Note.
          2.3.2 Prepayments After Event of Default. If, following an Event of
Default, Lender shall accelerate the Loan and Borrower thereafter tenders
payment of all or any part of the Loan, or if all or any portion of the Loan is
recovered by Lender after such Event of Default, (a) such payment may be made
only on the next occurring Payment Date together with all unpaid interest
thereon as calculated through such Payment Date, and all other fees and sums
payable hereunder or under the Loan Documents, including without limitation, any
interest that has accrued at the Default Rate and any Late Payment Charges,
(b) such payment shall be deemed a voluntary prepayment by Borrower, and
(c) Borrower shall pay, in addition to the Indebtedness, an amount equal to the
Liquidated Damages Amount in the event the prepayment occurs during the
Defeasance Lockout Period.
          2.3.3 Release of Property. Lender shall, at the expense of Borrower,
upon payment in full of the Indebtedness in accordance with the terms and
provisions of the Loan Documents, release the Lien of (a) this Agreement upon
the Account Collateral and (b) the Security Instrument on the Property. In such
event, Borrower shall submit to Lender, not less than ten (10) Business Days
prior to the date of such release, a release of lien for such property for
execution by Lender. Such release shall be in a form appropriate in each
jurisdiction in which the Property is located and satisfactory to Lender in its
discretion. In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such release.
     2.4 Regulatory Change; Taxes.
          2.4.1 Increased Costs. If as a result of any Regulatory Change or
compliance of Lender therewith, the basis of taxation of payments to Lender or
any company Controlling Lender of the principal of or interest on the Loan is
changed or Lender or the company

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Controlling Lender shall be subject to (a) any tax, duty, charge or withholding
of any kind with respect to this Agreement (excluding federal taxation of the
overall net income of Lender or the company Controlling Lender); or (b) any
reserve, special deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities, of Lender
or any company Controlling Lender is imposed, modified or deemed applicable; or
(c) any other condition affecting loans originated by Lender is imposed on
Lender or any company Controlling Lender and Lender determines that, by reason
thereof, the cost to Lender or any company Controlling Lender of making,
maintaining or extending the Loan to Borrower is increased, or any amount
receivable by Lender or any company Controlling Lender hereunder in respect of
any portion of the Loan to Borrower is reduced, in each case by an amount deemed
by Lender in good faith to be material (such increases in cost and reductions in
amounts receivable being herein called “Increased Costs”), then Lender shall
provide notice thereof to Borrower and Borrower agrees that it will pay to
Lender upon Lender’s written request such additional amount or amounts as will
compensate Lender or any company Controlling Lender for such Increased Costs to
the extent Lender determines that such Increased Costs are allocable to the
Loan. If Lender requests compensation under this Section 2.4.1, Borrower may, by
notice to Lender, require that Lender furnish to Borrower a statement setting
forth the basis for requesting such compensation and the method for determining
the amount thereof.
          2.4.2 Special Taxes. Borrower shall make all payments hereunder free
and clear of and without deduction for Special Taxes. If Borrower shall be
required by law to deduct any Special Taxes from or in respect of any sum
payable hereunder or under any other Loan Document to Lender, (a) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.4.2) Lender receives an amount equal to the sum it would have
received had no such deductions been made, (b) Borrower shall make such
deductions, and (c) Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
          2.4.3 Other Taxes. In addition, Borrower agrees to pay any present or
future stamp or documentary taxes or other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder, or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents, or the Loan (hereinafter referred to as
“Other Taxes”).
          2.4.4 Indemnity. Borrower shall indemnify Lender for the full amount
of Special Taxes and Other Taxes (including any Special Taxes or Other Taxes
imposed by any Governmental Authority on amounts payable under this
Section 2.4.4) paid by Lender and any liability (including penalties, interest,
and expenses) arising therefrom or with respect thereto, whether or not such
Special Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days after the date Lender makes written
demand therefor. Nothing in this Section 2.4.4 shall be deemed to limit
Borrower’s right to contest the amount of any Special Taxes and Other Taxes in
accordance with Section 7.3 hereof.
          2.4.5 Change of Office. To the extent that changing the jurisdiction
of Lender’s applicable office would have the effect of minimizing Special Taxes,
Other Taxes or Increased

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Costs, Lender shall use reasonable efforts to make such a change, provided that
same would not otherwise be disadvantageous to Lender.
          2.4.6 Survival. Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations of Borrower
contained in this Section 2.4 shall survive the payment in full of principal and
interest hereunder, and the termination of this Agreement.
     2.5 Conditions Precedent to Closing. The obligation of Lender to make the
Loan hereunder is subject to the fulfillment by, or on behalf of, Borrower or
waiver by Lender of the following conditions precedent no later than the Closing
Date; provided, however, that unless a condition precedent shall expressly
survive the Closing Date pursuant to a separate agreement, by funding the Loan,
Lender shall be deemed to have waived any such conditions not theretofore
fulfilled or satisfied:
          2.5.1 Representations and Warranties; Compliance with Conditions. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and no Default or Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.
          2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases.
               (a) Loan Documents. Lender shall have received an original copy
of this Agreement, the Note and all of the other Loan Documents, in each case,
duly executed (and to the extent required, acknowledged) and delivered on behalf
of Borrower, General Partner, Guarantor and any other parties thereto.
               (b) Security Instrument, Assignment of Leases. Lender shall have
received evidence that original counterparts of the Security Instrument and
Assignment of Leases, in proper form for recordation, have been delivered to the
Title Company for recording, so as effectively to create, in the reasonable
judgment of Lender, upon such recording valid and enforceable first priority
Liens upon the Property, in favor of Lender (or such other trustee as may be
required or desired under local law), subject only to the Permitted Encumbrances
and such other Liens as are permitted pursuant to the Loan Documents.
               (c) UCC Financing Statements. The UCC financing statements
relating to the Security Instrument, the Control Agreement, the Facility
Mortgagee Agreement and this Agreement have been delivered to Lender for
recording in the appropriate Governmental Authority.
               (d) Title Insurance. Lender shall have received a Title Policy
issued by the Title Company and dated as of the Closing Date, with reinsurance
and direct access agreements or endorsements acceptable to Lender. Such Title
Policy shall (i) provide coverage in the amount of the Loan, (ii) insure Lender
that the Security Instrument creates a valid, first priority Lien on the
Property, free and clear of all exceptions from coverage other than Permitted

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Encumbrances and standard exceptions and exclusions from coverage (as modified
by the terms of any endorsements), (iii) contain the endorsements and
affirmative coverage (including a mezzanine endorsement to the Title Policy) as
Lender may reasonably request, and (iv) name Lender as the insured. The Title
Policy shall be assignable. Lender also shall have received evidence that all
premiums in respect of such Title Policy have been paid.
               (e) Survey. Lender shall have received a Survey for the Property
that is in form and substance reasonably acceptable to Lender. Such Survey shall
reflect the same legal description contained in the Title Policy referred to in
clause (d) above and shall include, among other things, a metes and bounds (or
lot and block) description of the real property comprising part of the Property
reasonably satisfactory to Lender. The surveyor’s seal shall be affixed to the
Survey and the surveyor shall provide a survey certification in form and
substance reasonably acceptable to Lender.
               (f) Insurance. Lender shall have received valid certificates of
insurance for the policies of insurance required under the Loan Documents,
satisfactory to Lender in its sole discretion, and evidence of the payment of
all insurance premiums currently due and payable for the existing policy period.
               (g) Environmental Reports. Lender shall have received an
Environmental Report in respect of the Property satisfactory to Lender.
               (h) Zoning. Lender shall have received (i) letters or other
evidence with respect to the Property from the appropriate municipal authorities
or other Persons concerning applicable zoning and building laws acceptable to
Lender or (ii) an ALTA 3.1 zoning endorsement for the Title Policy.
               (i) Certificate of Occupancy. Lender shall have received a copy
of the valid permanent certificate of occupancy for the Property acceptable to
Lender.
               (j) Encumbrances. Borrower shall have taken or caused to be taken
such actions in such a manner so that Lender has a valid and perfected first
Lien as of the Closing Date on the Property, subject only to Permitted
Encumbrances and such other Liens as are permitted pursuant to the Loan
Documents, and Lender shall have received satisfactory evidence thereof.
               (k) Account Agreement. Lender shall have received the original of
the Account Agreement executed by each of Cash Management Bank and Borrower.
               (l) Manager’s Subordination Agreement. Lender shall have received
the original of the Manager’s Subordination Agreement executed and acknowledged
by each of Borrower, Tenant and Manager, together with a true and complete copy
of the Management Agreement certified by an Officer’s Certificate.
               (m) Subordination of Operating Lease. Lender shall have received
the original of the Subordination of Operating Lease executed and acknowledged
by each of Borrower and Tenant, together with a true and complete copy of the
Operating Lease certified by an Officer’s Certificate.

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               (n) Tenant Estoppels. Lender shall have received an executed
tenant estoppel letter from (i) Tenant, and (ii) from all other Persons as
requested by Lender occupying a material portion of the Property (as determined
by Lender) pursuant to a Lease, in each case, in form and substance reasonably
acceptable to Lender.
               (o) REA Estoppels. Lender shall have received an executed
reciprocal easement agreement estoppel letter from all parties under the REAs
requested by Lender in form and substance reasonably acceptable to Lender.
               (p) Manager Estoppel. Lender shall have received an executed
estoppel from Manager in form and substance reasonably acceptable to Lender.
               (q) Collateral Assignment. Lender shall have received an executed
Assignment of Management Agreement, in form and substance acceptable to Lender,
assigning to Lender all right, title and interest in the Management Agreement,
signed by Borrower and Tenant.
               (r) Independent Director/Independent Manager/Independent Member
Certificate. Lender shall have received an executed certificate substantially in
the form attached as Exhibit T from each Independent Director, Independent
Manager and Independent Member, as applicable, of each SPE Entity.
               (s) Facility Mortgagee Agreement. Lender shall have received an
executed Facility Mortgagee Agreement, in form and substance reasonably
acceptable to Lender.
               (t) Control Agreement. Lender shall have received an executed
Control Agreement, in form and substance reasonably acceptable to Lender.
          2.5.3 Delivery of Organizational Documents. On or before the Closing
Date, Borrower shall deliver, or cause to be delivered, to Lender copies
certified by an Officer’s Certificate, of all organizational documentation
related to Borrower, General Partner, Tenant and Guarantor, including, without
limitation, good standing certificates, qualifications to do business in the
appropriate jurisdictions, resolutions authorizing the entering into of the Loan
and incumbency certificates. Each of the organizational documents of Borrower,
General Partner, Guarantor and Tenant shall be in form and substance acceptable
to Lender in its sole discretion.
          2.5.4 Opinions of Borrower’s Counsel.
               (a) Lender shall have received the Opinion of Counsel in form and
substance acceptable to Lender in its sole discretion.
               (b) Lender shall have received a non-consolidation opinion
satisfying the requirements of each of the Rating Agencies and otherwise in form
and substance acceptable to Lender in its sole discretion (the
“Non-Consolidation Opinion”).
          2.5.5 Budgets. Borrower shall have delivered the Annual Budget for the
current Fiscal Year which Annual Budget shall be certified by an Officer’s
Certificate and reasonably acceptable to Lender.

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          2.5.6 Completion of Proceedings. All limited partnership and other
proceedings taken or to be taken by Borrower, General Partner, Tenant or
Guarantor in connection with the transactions contemplated by this Agreement and
other Loan Documents and all documents incidental thereto shall be satisfactory
in form and substance to Lender, and Lender shall have received all such
counterpart originals or certified copies of such documents as Lender may
reasonably request.
          2.5.7 Payments. All payments, deposits or escrows, if any, required to
be made or established by Borrower under this Agreement, the Note and the other
Loan Documents on or before the Closing Date shall have been paid.
          2.5.8 Transaction Costs. Borrower shall have paid or reimbursed Lender
for all title insurance premiums, recording and filing fees, costs of
Environmental Reports, Physical Conditions Reports, appraisals and other
reports, the reasonable fees and costs of Lender’s counsel and all other third
party out-of-pocket expenses incurred in connection with the origination of the
Loan.
          2.5.9 Material Adverse Effect. No event or condition shall have
occurred since the date of Borrower’s most recent financial statements
previously delivered to Lender which has or could reasonably be expected to have
a Material Adverse Effect. The Operating Income and Operating Expenses of the
Property, the Leases, and all other features of the transaction shall be as
represented to Lender without material adverse change. Neither Borrower nor any
of its constituent Persons shall be the subject of any bankruptcy,
reorganization, or insolvency proceeding.
          2.5.10 Tax Lot. Lender shall have received evidence that the Property
constitutes one or more separate tax lots, which evidence shall be reasonably
satisfactory in form and substance to Lender.
          2.5.11 Physical Conditions Report. Lender shall have received a
Physical Conditions Report with respect to the Property, which report shall be
satisfactory in form and substance to Lender.
          2.5.12 Manager Consent. Lender shall received evidence satisfactory to
Lender in its sole discretion that Manager has, in accordance with the terms of
the Management Agreement, consented to the transactions contemplated by the Loan
Documents.
          2.5.13 Appraisal. Lender shall have received an appraisal of the
Property, which shall (a) be satisfactory in form and substance to Lender, and
(b) shall demonstrate that the “Loan to Value Ratio” on the Closing Date is no
greater than 65%.
          2.5.14 Financial Statements. Lender shall have received certified
copies of financial statements with respect to the Property for the three most
recent Fiscal Years, each in form and substance satisfactory to Lender, and such
financial statements demonstrate that the Assumed Debt Service Coverage Ratio as
of Closing is no less than 1.55 to 1.00.
          2.5.15 Further Documents. Each additional document not specifically
referenced in this Agreement, but relating to the transactions contemplated
herein and required by Lender,

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shall have been duly authorized, executed and delivered by all parties thereto
and Lender shall have received and approved certified copies thereof. Lender or
its counsel shall also have received such other and further approvals, opinions,
documents and information as Lender or its counsel may have reasonably
requested, in each case, in form and substance satisfactory to Lender and its
counsel.
III. CASH MANAGEMENT
     3.1 Cash Management.
          3.1.1 Establishment of Accounts. Borrower hereby confirms that,
simultaneously with the execution of this Agreement, pursuant to the Account
Agreement, it has established with Cash Management Bank, in the name of Borrower
for the benefit of Lender, as secured party, the holding account (the “Holding
Account”), which has been established as a securities account. The Holding
Account and each sub-account of such account and the funds deposited therein and
securities and other assets credited thereto shall serve as additional security
for the Loan. Pursuant to the Account Agreement, Borrower shall irrevocably
instruct and authorize Cash Management Bank to disregard any and all orders for
withdrawal from the Holding Account made by, or at the direction of, Borrower.
Borrower agrees that, prior to the payment in full of the Indebtedness, the
terms and conditions of the Account Agreement shall not be amended or modified
without the prior written consent of Lender (which consent Lender may grant or
withhold in its sole discretion), and if a Securitization has occurred, the
delivery to Lender of a Rating Agency Confirmation. In recognition of Lender’s
security interest in the funds deposited into the Holding Account, Borrower
shall identify the Holding Account with the name of Lender, as secured party.
The Holding Account shall be named as follows: “Ashford Crystal Gateway LP f/b/o
German American Capital Corporation, as secured party — Holding Account”.
Borrower confirms that it has established with Cash Management Bank the
following sub-accounts of the Holding Account (each, a “Sub-Account” and,
collectively, the “Sub-Accounts” and together with the Holding Account, the
“Collateral Accounts”), which (a) may be ledger or book entry sub-accounts and
need not be actual sub-accounts, (b) shall each be linked to the Holding
Account, (c) shall each be a “Securities Account” pursuant to Article 8 of the
UCC and (d) shall each be an Eligible Account to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of
this Agreement:
                    (i) a sub-account for the retention of Account Collateral in
respect of Impositions and Other Charges for the Property (the “Tax Reserve
Account”);
                    (ii) a sub-account for the retention of Account Collateral
in respect of insurance premiums for the Property (the “Insurance Reserve
Account”);
                    (iii) a sub-account for the retention of Account Collateral
in respect of Debt Service on the Loan (the “Debt Service Reserve Account”);
                    (iv) a sub-account for the retention of Account Collateral
in respect of FF&E (the “FF&E Reserve Account”); and

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                    (v) a sub-account for the retention of Account Collateral in
respect of the occurrence and continuation of a Lockbox Event (the “Cash Flow
Reserve Account”).
          3.1.2 Pledge of Account Collateral. To secure the full and punctual
payment and performance of the Obligations, Borrower hereby collaterally
assigns, grants a security interest in and pledges to Lender, to the extent not
prohibited by applicable law, a first priority continuing security interest in
and to the following property of Borrower, whether now owned or existing or
hereafter acquired or arising and regardless of where located (all of the same,
collectively, the “Account Collateral”):
               (a) the Collateral Accounts and all cash, checks, drafts,
securities entitlements, certificates, instruments and other property,
including, without limitation, all deposits and/or wire transfers from time to
time deposited or held in, credited to or made to Collateral Accounts;
               (b) any and all amounts invested in Permitted Investments;
               (c) all interest, dividends, cash, instruments, securities
entitlements and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the foregoing
or purchased with funds from the Collateral Accounts; and
               (d) to the extent not covered by clauses (a), (b) or (c) above,
all proceeds (as defined under the UCC) of any or all of the foregoing.
In addition to the rights and remedies herein set forth, Lender shall have all
of the rights and remedies with respect to the Account Collateral available to a
secured party at law or in equity, including, without limitation, the rights of
a secured party under the UCC, as if such rights and remedies were fully set
forth herein. This Agreement shall constitute a security agreement for purposes
of the Uniform Commercial Code and other applicable law.
          3.1.3 Maintenance of Collateral Accounts. Borrower agrees that each of
the Holding Account and the Sub-Accounts is and shall be maintained (a) as a
“securities account” (as such term is defined in Section 8-501(a) of the UCC),
(b) in such a manner that Lender shall have control (within the meaning of
Section 8-106(d)(2) of the UCC) over the Holding Account and any Sub-Account,
(c) such that neither Borrower nor Manager shall have any right of withdrawal
from the Holding Account or the Sub-Accounts and, except as provided herein, no
Account Collateral shall be released to Borrower from the Holding Account or the
Sub-Accounts, (d) in such a manner that the Cash Management Bank shall agree to
treat all property credited to the Holding Account or the Sub-Accounts as
“financial assets” and (e) such that all securities or other property underlying
any financial assets credited to the Accounts shall be registered in the name of
Cash Management Bank, indorsed to Cash Management Bank or in blank or credited
to another securities account maintained in the name of Cash Management Bank and
in no case will any financial asset credited to any of the Collateral Accounts
be registered in the name of Borrower, payable to the order of Borrower or
specially indorsed to Borrower except to the extent the foregoing have been
specially indorsed to Cash Management

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Bank or in blank. Without limiting Borrower’s obligations under the immediately
preceding sentence, Borrower shall only establish and maintain the Holding
Account with an Approved Bank that has executed an agreement substantially in
the form of the Account Agreement or in such other form acceptable to Lender in
its sole discretion.
          3.1.4 Eligible Accounts. The Collateral Accounts shall be Eligible
Accounts. The Collateral Accounts shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other banking or governmental authority, as may now or
hereafter be in effect. Income and interest accruing on the Collateral Accounts
or any investments held in such accounts shall be periodically added to the
principal amount of such account and shall be held, disbursed and applied in
accordance with the provisions of this Agreement and the Account Agreement.
Borrower shall be the beneficial owner of the Collateral Accounts for federal
income tax purposes and shall report all income on the Collateral Accounts.
          3.1.5 Deposits into Sub-Accounts. On the date hereof, Borrower has
deposited the following amounts into the Sub-Accounts:
               (a) $166,552.75 into the Tax Reserve Account;
               (b) $0.00 into the Insurance Reserve Account;
               (c) $0.00 into the Debt Service Reserve Account; and
               (d) $0.00 into the FF&E Reserve Account.
          3.1.6 Monthly Funding of Sub-Accounts.
               (a) Borrower hereby irrevocably authorizes Lender to transfer
(and, pursuant to the Account Agreement shall irrevocably authorize Cash
Management Bank to execute any corresponding instructions of Lender), and Lender
shall transfer, from the Holding Account by 11:00 a.m. New York time on each
Payment Date, or as soon thereafter as sufficient funds are in the Holding
Account to make the applicable transfers, commencing on December 1, 2010, funds
in the following amounts and in the following order of priority:
                    (i) funds in an amount equal to the Monthly Tax Reserve
Amount and any other amounts required pursuant to Section 16.1 for the preceding
month in which the transfer from the Holding Account is made and transfer the
same to the Tax Reserve Account;
                    (ii) funds in an amount equal to the Monthly Insurance
Reserve Amount and any other amounts required pursuant to Section 16.2 for the
preceding month in which the transfer from the Holding Account is made and
transfer the same to the Insurance Reserve Account; provided that so long as the
coverage required by Article VI is maintained for the benefit of Borrower by
Manager or Guarantor (and evidence of such coverage and the payment in full of
the associated premiums is delivered to Lender prior to the expiration of any
existing coverage), then Lender shall not deposit the Monthly Insurance Reserve
Amount into the Insurance Reserve Account;

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                    (iii) funds in an amount equal to the amount of Debt Service
on the Loan due on the Payment Date for the preceding month in which the
transfer from the Holding Account is made and transfer the same to the Debt
Service Reserve Account;
                    (iv) funds in an amount equal to the Monthly FF&E Reserve
Amount for the preceding month in which the transfer from the Holding Account is
made and transfer the same to the FF&E Reserve Account; provided that so long as
Manager is depositing or otherwise remitting the entire Monthly FF&E Reserve
Amount into the FF&E Holding Account, then Lender shall not deposit the Monthly
FF&E Reserve Amount into the FF&E Reserve Account;
                    (v) provided a Lockbox Event has occurred and is continuing,
transfer any remaining funds on deposit in the Holding Account after the
foregoing deposits (such remainder being hereinafter referred to as “Excess Cash
Flow”) to the Cash Flow Reserve Account; and
                    (vi) provided no Lockbox Event shall have occurred and is
then continuing, transfer any Excess Cash Flow to the Borrower’s Account.
               (b) If Lender shall reasonably determine that there will be
insufficient amounts in the Holding Account to make any of the transfers
pursuant to this Section 3.1.6 inclusive on the date required hereunder, Lender
shall provide notice to Borrower of such insufficiency and, within five Business
Days after receipt of said notice and prior to the expiration of any grace
period applicable to such payment, Borrower shall deposit into the Holding
Account an amount equal to the shortfall of available funds in the Holding
Account taking into account any funds which accumulate in the Holding Account
during such five day Business Day period. Notwithstanding anything to the
contrary contained in this Agreement or in the other Loan Documents, Borrower
shall not be deemed to be in default hereunder or thereunder or otherwise liable
to Lender (and no Late Payment Charge shall be assessed) in the event that,
after giving effect to a transfer of all funds then on deposit in the Holding
Account pursuant to Section 3.1.6 above, funds sufficient for a required
transfer are held in an appropriate Sub-Account and Lender or Cash Management
Bank fails to timely make any transfer from such Sub-Account as contemplated by
this Agreement unless due to the negligence or willful misconduct of Borrower.
               (c) Following the occurrence of a Lockbox Event and provided no
Event of Default shall have occurred and is then continuing, at such time as the
Assumed Debt Service Coverage Ratio has been at least 1.20 to 1.00 for at least
two consecutive quarters, the Lockbox Event shall no longer be deemed continuing
and any amounts on deposit in the Cash Flow Reserve Account shall be released to
Borrower following Borrower’s delivery to Lender of an Officer’s Certificate and
reasonably detailed supporting calculations evidencing the satisfaction of the
foregoing Assumed Debt Service Coverage Ratio requirement.
               (d) Notwithstanding anything to the contrary contained herein or
in the Security Instrument, to the extent that Borrower shall fail to pay any
mortgage recording tax, costs, expenses or other amounts pursuant to
Section 19.12 of this Agreement within the time period set forth therein, Lender
shall have the right, at any time, upon notice to Borrower, to

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withdraw from the Holding Account, an amount equal to such unpaid taxes, costs,
expenses and/or other amounts and pay such amounts to the Person(s) entitled
thereto.
          3.1.7 Payments from Sub-Accounts. Borrower irrevocably authorizes
Lender to make and, provided no Event of Default shall have occurred and be
continuing, Lender hereby agrees to make, the following payments from the
Sub-Accounts to the extent of the monies on deposit therefor:
               (i) funds from the Tax Reserve Account to Lender sufficient to
permit Lender to pay (A) Real Estate Taxes and (B) Other Charges, on the
respective due dates therefor, and Lender shall so pay such funds to the
Governmental Authority having the right to receive such funds;
               (ii) subject to the conditions set forth in Section 3.1.6(a)(ii)
above, funds from the Insurance Reserve Account to Lender sufficient to permit
Lender to pay insurance premiums for the insurance required to be maintained
pursuant to the terms of this Agreement and the Security Instrument, on the
respective due dates therefor, and Lender shall so pay such funds to the
insurance company having the right to receive such funds;
               (iii) funds from the Debt Service Reserve Account to Lender
sufficient to pay Debt Service on the Loan on each Payment Date, and Lender, on
each Payment Date, shall apply such funds to the payment of the Debt Service on
the Loan payable on such Payment Date;
               (iv) subject to the conditions set forth in Section 3.1.6(a)(iv)
above, no more frequently than once in any calendar month, and provided Borrower
(or Manager, as agent for Borrower) shall have complied with the procedures set
forth in Section 16.3.2, funds from the FF&E Reserve Account to an account
designated in writing by Borrower or Manager to pay for FF&E; and
               (v) upon Lender’s direction in its sole and absolute discretion
and at any time during the continuation of a Lockbox Event, funds from the Cash
Flow Reserve Account to any applicable Sub-Account in order to make any of the
transfers pursuant to Section 3.1.6 inclusive.
          3.1.8 Cash Management Bank.
               (a) Lender shall have the right at Borrower’s sole cost and
expense to replace the Cash Management Bank with a financial institution
reasonably satisfactory to Borrower in the event that (i) the Cash Management
Bank fails, in any material respect, to comply with the Account Agreement, or
(ii) the Cash Management Bank is no longer an Approved Bank. In addition, upon
the occurrence and during the continuance of an Event of Default, Lender shall
have the right at Borrower’s sole cost and expense to replace Cash Management
Bank at any time, without notice to Borrower. Borrower shall cooperate with
Lender in connection with the appointment of any replacement Cash Management
Bank and the execution by the Cash Management Bank and the Borrower of an
Account Agreement and delivery of same to Lender.

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               (b) So long as no Event of Default shall have occurred and be
continuing, Borrower shall have the right at its sole cost and expense to
replace the Cash Management Bank with a financial institution that is an
Approved Bank provided that such financial institution and Borrower shall
execute and deliver to Lender an Account Agreement substantially similar to the
Account Agreement executed as of the Closing Date.
          3.1.9 Borrower’s Account Representations, Warranties and Covenants.
               (a) Borrower represents, warrants and covenants that as of the
date hereof, Borrower has irrevocably (until the repayment in full of the
Indebtedness) directed the Tenant under the Operating Lease to wire all funds
payable to Borrower under the Operating Lease directly to the Holding Account.
If requested by Lender, Borrower shall confirm such instructions to Tenant in
writing (a copy of which shall, in such case, be provided to Lender).
               (b) Borrower further represents, warrants and covenants that
(i) pursuant to the direction letter attached as Exhibit A, Borrower and Tenant
have each irrevocably directed Manager to deposit all amounts payable to
Borrower or Tenant pursuant to the Management Agreement directly into the
Holding Account, (ii) Borrower shall pay or cause to be paid all Rents, Cash and
Cash Equivalents or other items of Operating Income not covered by the preceding
subsection (a) within one Business Day after receipt thereof by Borrower or its
Affiliates directly into the Holding Account and, until so deposited, any such
amounts held by Borrower shall be deemed to be Account Collateral and shall be
held in trust by it for the benefit, and as the property, of Lender and shall
not be commingled with any other funds or property of Borrower, (iii) there are
no accounts other than the Collateral Accounts maintained by Borrower or any
other Person (other than Manager) with respect to Property or the collection of
Rents and (iv) so long as the Loan shall be outstanding, neither Borrower nor
any other Person (other than Manager) shall open any other operating accounts
with respect to the Property or the collection of Rents, except for the
Collateral Accounts; provided that, Borrower and Manager shall not be prohibited
from utilizing one or more separate accounts for the disbursement or retention
of funds that have been transferred to the Borrower’s Account.
          3.1.10 Account Collateral and Remedies.
               (a) Upon the occurrence and during the continuance of an Event of
Default, without additional notice from Lender to Borrower, (i) Lender may, in
addition to and not in limitation of Lender’s other rights, make any and all
withdrawals from, and transfers between and among, the Collateral Accounts as
Lender shall determine in its sole and absolute discretion to pay any
Obligations, Operating Expenses and/or Capital Expenditures for the Property;
(ii) all Excess Cash Flow shall be retained in the Holding Account or applicable
Sub-Accounts, and (iv) Lender may liquidate and transfer any amounts then
invested in Permitted Investments to the Collateral Accounts to which they
relate or reinvest such amounts in other Permitted Investments as Lender may
reasonably determine is necessary to perfect or protect any security interest
granted or purported to be granted hereby or to enable Lender to exercise and
enforce Lender’s rights and remedies hereunder with respect to any Account
Collateral or to preserve the value of the Account Collateral.

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               (b) Upon the occurrence and during the continuance of an Event of
Default, Borrower hereby irrevocably constitutes and appoints Lender as
Borrower’s true and lawful attorney-in-fact, with full power of substitution, to
execute, acknowledge and deliver any instruments and to exercise and enforce
every right, power, remedy, option and privilege of Borrower with respect to the
Account Collateral, and do in the name, place and stead of Borrower, all such
acts, things and deeds for and on behalf of and in the name of Borrower, which
Borrower could or might do or which Lender may deem necessary or desirable to
more fully vest in Lender the rights and remedies provided for herein and to
accomplish the purposes of this Agreement. The foregoing powers of attorney are
irrevocable and coupled with an interest. Upon the occurrence and during the
continuance of an Event of Default, Lender may perform or cause performance of
any such agreement, and any reasonable expenses of Lender incurred in connection
therewith shall be paid by Borrower as provided in Section 5.1.16.
               (c) Borrower hereby expressly waives, to the fullest extent
permitted by law, presentment, demand, protest or any notice of any kind in
connection with this Agreement or the Account Collateral. Borrower acknowledges
and agrees that 10 days’ prior written notice of the time and place of any
public sale of the Account Collateral or any other intended disposition thereof
shall be reasonable and sufficient notice to Borrower within the meaning of the
UCC.
          3.1.11 Transfers and Other Liens. Borrower agrees that it will not
(a) sell or otherwise dispose of any of the Account Collateral or (b) create or
permit to exist any Lien upon or with respect to all or any of the Account
Collateral, except for the Lien granted to Lender under the Loan Documents.
          3.1.12 Reasonable Care. Beyond the exercise of reasonable care in the
custody thereof, Lender shall have no duty as to any Account Collateral in its
possession or control as agent therefor or bailee thereof or any income thereon
or the preservation of rights against any person or otherwise with respect
thereto. Lender shall be deemed to have exercised reasonable care in the custody
and preservation of the Account Collateral in its possession if the Account
Collateral is accorded treatment substantially equal to that which Lender
accords its own property, it being understood that Lender shall not be liable or
responsible for any loss or damage to any of the Account Collateral, or for any
diminution in value thereof, by reason of the act or omission of Lender, its
Affiliates, agents, employees or bailees, except to the extent that such loss or
damage results from Lender’s gross negligence or willful misconduct. In no event
shall Lender be liable either directly or indirectly for losses or delays
resulting from any event which may be the basis of an Excusable Delay, computer
malfunctions, interruption of communication facilities, labor difficulties or
other causes beyond Lender’s reasonable control or for indirect, special or
consequential damages except to the extent of Lender’s gross negligence or
willful misconduct. Notwithstanding the foregoing, Borrower acknowledges and
agrees that (a) Lender does not have custody of the Account Collateral, (b) Cash
Management Bank has custody of the Account Collateral, (c) the initial Cash
Management Bank was chosen by Borrower and (d) Lender has no obligation or duty
to supervise Cash Management Bank or to see to the safe custody of the Account
Collateral.

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          3.1.13 Lender’s Liability.
               (a) Lender shall be responsible for the performance only of such
duties with respect to the Account Collateral as are specifically set forth in
this Section 3.1 or elsewhere in the Loan Documents, and no other duty shall be
implied from any provision hereof. Lender shall not be under any obligation or
duty to perform any act with respect to the Account Collateral which would cause
it to incur any expense or liability or to institute or defend any suit in
respect hereof, or to advance any of its own monies. Borrower shall indemnify
and hold Lender, its employees and officers harmless from and against any loss,
cost or damage (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Lender in connection with the transactions
contemplated hereby with respect to the Account Collateral except as such may be
caused by the gross negligence or willful misconduct of Lender, its employees,
officers or agents.
               (b) Lender shall be protected in acting upon any notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
paper, document or signature believed by it in good faith to be genuine, and, in
so acting, it may be assumed that any person purporting to give any of the
foregoing in connection with the provisions hereof has been duly authorized to
do so. Lender may consult with counsel, and the opinion of such counsel shall be
full and complete authorization and protection in respect of any action taken or
suffered by it hereunder and in good faith in accordance therewith.
          3.1.14 Continuing Security Interest. This Agreement shall create a
continuing security interest in the Account Collateral and shall remain in full
force and effect until payment in full of the Indebtedness. Upon payment in full
of the Indebtedness, this security interest shall automatically terminate
without further notice from any party and Borrower shall be entitled to the
return, upon its request, of such of the Account Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof and Lender shall
execute such instruments and documents as may be reasonably requested by
Borrower to evidence such termination and the release of the Account Collateral.
IV. REPRESENTATIONS AND WARRANTIES
     4.1 Borrower Representations. Borrower represents and warrants as of the
Closing Date that:
          4.1.1 Organization.
               (a) Borrower and Guarantor are each limited partnerships that
have been duly organized and are validly existing and in good standing pursuant
to the laws of the State of Delaware with requisite limited partnership power
and authority to own their respective properties and assets and to transact the
businesses in which ach of them are now engaged. Each of Borrower and Guarantor
is duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with its respective
properties, assets, businesses and operations. Each of Borrower and Guarantor
possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and assets, and to
transact the businesses in which it is now engaged, and the sole

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business of Borrower is the ownership and operation of the Property. The
organizational structure of Borrower is accurately depicted by the diagram
attached hereto as Exhibit B. Borrower shall not itself, and shall not permit
any other SPE Entity to, change its name, identity, corporate structure or
jurisdiction of organization unless it shall have given Lender 30 days prior
written notice of any such change and shall have taken all steps reasonably
requested by Lender to grant, perfect, protect and/or preserve the security
interest granted hereunder to Lender.
               (b) General Partner is a limited liability company that has been
duly organized and is validly existing and in good standing pursuant to the laws
of the State of Delaware with requisite limited liability company power and
authority to own its properties and assets and to transact the businesses in
which it is now engaged. General Partner has duly qualified to do business and
is in good standing in each jurisdiction where it is required to be so qualified
in connection with its properties, assets, businesses and operations. General
Partner possesses all rights, licenses, permits and authorizations, governmental
or otherwise, necessary to entitle it to own its properties and assets and to
transact the businesses in which it is now engaged, and the sole business of
General Partner is to act as the general partner of Borrower.
               (c) Tenant is a corporation that has been duly organized and is
validly existing and in good standing pursuant to the laws of the State of
Delaware with requisite corporate power and authority to own its properties and
assets and to transact the businesses in which it is now engaged. Tenant has
duly qualified to do business and is in good standing in each jurisdiction where
it is required to be so qualified in connection with its properties, assets,
businesses and operations. Tenant possesses all rights, licenses, permits and
authorizations, governmental or otherwise, necessary to entitle it to own its
properties and assets and to transact the businesses in which it is now engaged,
and the sole business of Tenant is to act as the tenant under the Operating
Lease.
          4.1.2 Proceedings. Each of Borrower, General Partner, Tenant and
Guarantor has full power to and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party. This Agreement and the other Loan Documents
have been duly executed and delivered by, or on behalf of, Borrower, General
Partner, Tenant and Guarantor, as applicable, and constitute legal, valid and
binding obligations of Borrower, General Partner, Tenant and Guarantor, as
applicable, enforceable against each of them, as applicable, in accordance with
their respective terms, subject only to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
          4.1.3 No Conflicts. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower, General Partner, Tenant and
Guarantor, as applicable, will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance (other than pursuant
to the Loan Documents) upon any of the property or assets of Borrower, General
Partner, Tenant or Guarantor pursuant to the terms of any indenture, mortgage,
deed of trust, loan agreement, partnership agreement or other agreement or
instrument to which Borrower, General Partner, Tenant or Guarantor is a party or
by which any of Borrower’s, General Partner’s, Tenant’s or Guarantor’s property
or assets is subject (unless

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consents from all applicable parties thereto have been obtained), nor will such
action result in any violation of the provisions of any statute or any order,
rule or regulation of any Governmental Authority, and any consent, approval,
authorization, order, registration or qualification of or with any Governmental
Authority required for the execution, delivery and performance by Borrower,
General Partner, Tenant or Guarantor of this Agreement or any other Loan
Documents has been obtained and is in full force and effect.
          4.1.4 Litigation. Except as set forth on Schedule III attached hereto,
there are no arbitration proceedings, governmental investigations, actions,
suits or proceedings at law or in equity by or before any Governmental Authority
now pending or, to the best of Borrower’s knowledge, threatened against or
affecting Borrower, General Partner, Tenant, Guarantor or the Property. The
actions, suits or proceedings identified on Schedule III, if determined against
Borrower, General Partner, Tenant, Guarantor or the Property, would not
materially and adversely affect the condition (financial or otherwise) or
business of Borrower, General Partner, Tenant, Guarantor or the condition or
operation of the Property.
          4.1.5 Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which is reasonably likely to
constitute a Material Adverse Effect other than the Management Agreement and
Operating Lease. Borrower has not received any written notice of any material
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party or by which Borrower or the Property is bound. Borrower has no material
financial obligation (contingent or otherwise) under any indenture, mortgage,
deed of trust, loan agreement, REA or other agreement or instrument to which
Borrower is a party or by which Borrower or the Property is otherwise bound,
other than (a) obligations incurred in the ordinary course of the operation of
the Property and (b) obligations under the Loan Documents.
          4.1.6 Title. Borrower has good, marketable and insurable fee simple
title to the Land and the Improvements, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. Borrower has
good and marketable title to the remainder of the Property owned by Borrower,
free and clear of all Liens whatsoever except the Permitted Encumbrances. The
Security Instrument, when properly recorded in the appropriate records, together
with any Uniform Commercial Code financing statements required to be filed in
connection therewith, will create (a) a valid, perfected first mortgage lien on
the Land and the Improvements, subject only to Permitted Encumbrances and (b)
perfected security interests in and to, and perfected collateral assignments of,
all personalty (including the Operating Lease and Management Agreement), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances. There are no claims for payment for work, labor or
materials affecting the Property which are or may become a lien prior to, or of
equal priority with, the Liens created by the Loan Documents.
          4.1.7 No Bankruptcy Filing. None of Borrower, General Partner, any
other SPE Entity, or Guarantor, or to the knowledge of Borrower, Manager, is
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
such entity’s assets or property, and Borrower has no

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knowledge of any Person contemplating the filing of any such petition against
Borrower, General Partner, any other SPE Entity, Guarantor or Manager.
          4.1.8 Full and Accurate Disclosure. No statement of fact made by
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. There
is no fact presently known to Borrower which has not been disclosed which could
reasonably be expected to have a Material Adverse Effect.
          4.1.9 All Property. The Property constitutes all of the real property,
personal property, equipment and fixtures currently (a) owned or leased by
Borrower or (b) used in the operation of the business located on the Property.
To the extent perfection may be effected pursuant to applicable Legal
Requirements, by recoding or filing, the UCC financing statements are in form
and substance acceptable for filing and/or recording in all appropriate public
filing and recording offices, and by such recording or filing, such UCC
financing statements will create a first priority perfected security interest in
and Lien on all FF&E that is necessary to operate the Property in the manner
operated on the date hereof.
          4.1.10 No Plan Assets
               (a) Borrower is not an employee benefit plan, as defined in
Section 3(3) of ERISA, subject to Title I of ERISA, none of the assets of
Borrower constitutes or will constitute plan assets of one or more such plans
within the meaning of 29 C.F.R. Section 2510.3-101 and Borrower is not a
governmental plan within the meaning of Section 3(32) of ERISA and transactions
by or with Borrower are not subject to state statutes regulating investment of,
and fiduciary obligations with respect to, governmental plans similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code currently in
effect, which prohibit or otherwise restrict the transactions contemplated by
this Agreement.
               (b) Borrower does not maintain an employee benefit plan as
defined by Section 3(3) of ERISA, which is subject to Title IV of ERISA, and
Borrower (i) has no knowledge of any material liability which has been incurred
or is expected to be incurred by Borrower which is or remains unsatisfied for
any taxes or penalties with respect to any “employee benefit plan,” within the
meaning of Section 3(3) of ERISA, or any “plan,” within the meaning of
Section 4975(e)(1) of the Internal Revenue Code or any other benefit plan (other
than a multiemployer plan) maintained, contributed to, or required to be
contributed to by Borrower or by any entity that is under common control with
Borrower within the meaning of ERISA Section 4001(a)(14) (a “Plan”) or any plan
that would be a Plan but for the fact that it is a multiemployer plan within the
meaning of ERISA Section 3(37); and (ii) has made and shall continue to make
when due all required contributions to all such Plans, if any. Each such Plan
has been and will be administered in compliance with its terms and the
applicable provisions of ERISA, the Internal Revenue Code, and any other
applicable federal or state law; and no action shall be taken or fail to be
taken that would result in the disqualification or loss of tax-exempt status of
any such Plan intended to be qualified and/or tax exempt; and
          4.1.11 Compliance. Borrower and the Property and the use thereof
comply in all material respects with all applicable Legal Requirements,
including, without limitation, building

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and zoning ordinances and codes. Borrower is not in material default or in
material violation of any order, writ, injunction, decree or demand of any
Governmental Authority. To the best of Borrower’s knowledge, there has not been
committed by Borrower any act or omission affording any Governmental Authority
the right of forfeiture as against the Property or any part thereof or any
monies paid in performance of Borrower’s obligations under any of the Loan
Documents.
          4.1.12 Financial Information. All financial data including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered by or on behalf of Borrower to Lender in respect of Borrower
or the Property (a) are true, complete and correct in all material respects,
(b) fairly represent the financial condition of Borrower or the Property, as
applicable, as of the date of such reports, and (c) to the extent prepared or
audited by an independent certified public accounting firm, have been prepared
in accordance with GAAP throughout the periods covered, except as disclosed
therein. Borrower does not have any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Borrower and could
reasonably be expected to have a Material Adverse Effect. Since the date of such
financial statements, there has been no material adverse change in the financial
condition, operations or business of Borrower from that set forth in said
financial statements.
          4.1.13 Condemnation. No Condemnation has been commenced or, to
Borrower’s knowledge, is contemplated with respect to all or any portion of the
Property or for the relocation of roadways providing access to the Property.
          4.1.14 Federal Reserve Regulations. None of the proceeds of the Loan
will be used for the purpose of purchasing or carrying any “margin stock” as
defined in Regulation U, Regulation X or Regulation T or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry “margin stock” or for any other purpose which might constitute this
transaction a “purpose credit” within the meaning of Regulation U or
Regulation X. As of the Closing Date, Borrower does not own any “margin stock.”
          4.1.15 Utilities and Public Access. The Property has rights of access
to public ways and is served by water, sewer, sanitary sewer and storm drain
facilities adequate to service the Property for its intended uses. All utilities
necessary to the existing use of the Property are located either in the public
right-of-way abutting the Property (which are connected so as to serve the
Property without passing over other property) or in recorded easements serving
the Property and such easements are set forth in and insured by the Title
Policy. All roads necessary for the use of the Property for its current purposes
have been completed and, if necessary, dedicated to public use.
          4.1.16 Not a Foreign Person. Borrower is not a foreign person within
the meaning of § 1445(f)(3) of the Code.
          4.1.17 Separate Lots. The Property is comprised of one or more
contiguous parcels which constitute a separate tax lot or lots and does not
constitute or include a portion of any other tax lot not a part of the Property.

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          4.1.18 Assessments. Except as disclosed on Schedule B-2 of the Title
Policy, there are no pending or proposed special or other assessments for public
improvements or otherwise affecting the Property, nor are there any improvements
to the Property contemplated by Borrower, Tenant or Manager that may result in
such special or other assessments.
          4.1.19 Enforceability. The Loan Documents are not subject to any
existing right of rescission, set-off, counterclaim or defense by Borrower,
including the defense of usury, nor would the operation of any of the terms of
the Loan Documents, or the exercise of any right thereunder, render the Loan
Documents unenforceable (subject to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law)), and Borrower has
not asserted any right of rescission, set-off, counterclaim or defense with
respect thereto.
          4.1.20 No Prior Assignment. There are no prior sales, transfers or
assignments of the Operating Lease, Management Agreement or any portion of the
Rents due and payable or to become due and payable which are presently
outstanding following the funding of the Loan, other than those being terminated
or assigned to Lender concurrently herewith.
          4.1.21 Insurance. Borrower has obtained and has delivered to Lender
certified copies or originals of or certificates of insurance evidencing all
insurance policies required under this Agreement, reflecting the insurance
coverage, amounts and other requirements set forth in this Agreement. Borrower
has not, and to the best of Borrower’s knowledge no Person has, done by act or
omission anything which would impair the coverage of any such policy.
          4.1.22 Use of Property. The Property is used exclusively as a
first-class, full service hotel and conference center, and other appurtenant and
related uses.
          4.1.23 Certificate of Occupancy; Licenses. All certifications, liquor
licenses, permits, licenses and approvals, including without limitation,
certificates of completion and occupancy permits required of Borrower or Manager
for the legal use, occupancy and operation of the Property as a as a
first-class, full service hotel and conference center, and other appurtenant and
related uses (collectively, the “Licenses”), have been obtained and are in full
force and effect. The use being made of the Property is in conformity with the
certificate of occupancy issued for the Property.
          4.1.24 Flood Zone. None of the Improvements on the Property are
located in an area as identified by the Federal Emergency Management Agency as
an area having special flood hazards.
          4.1.25 Physical Condition. To the best of Borrower’s knowledge and
except as expressly disclosed in the Physical Conditions Report, the Property,
including, without limitation, all buildings, Improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping, irrigation systems and all structural components, are in
good condition, order and repair in all material respects; to the best of
Borrower’s knowledge and except as disclosed in the Physical Conditions Report,
there exists no

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structural or other material defects or damages in or to the Property, whether
latent or otherwise, and Borrower has not received any written notice from any
insurance company or bonding company of any defects or inadequacies in the
Property, or any part thereof, which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon or
of any termination or threatened termination of any policy of insurance or bond.
          4.1.26 Boundaries. Except as shown on the Survey, all of the
Improvements lie wholly within the boundaries and building restriction lines of
the Real Property, and no improvements on adjoining properties encroach upon the
Real Property, and no easements or other encumbrances upon the Real Property
encroach upon any of the Improvements, so as constitute a Material Adverse
Effect (except those which are insured against by the Title Policy).
          4.1.27 Leases. The Property is not subject to any Lease other than the
Operating Lease. No Person has any possessory interest in the Property or right
to occupy the same except under and pursuant to the provisions of the Operating
Lease, the Management Agreement and the REAs and individuals who are transient
guests occupying the hotel operated on the Property. The Operating Lease is in
full force and effect and there are no defaults thereunder by either Borrower or
Tenant, and there are no conditions that, with the passage of time or the giving
of notice, or both, would constitute material defaults thereunder. No Rent has
been paid more than 30 days in advance of its due date. There has been no prior
sale, transfer or assignment, hypothecation or pledge by Borrower of the
Operating Lease or of the Rents received therein, which will be outstanding
following the funding of the Loan. Tenant does not have a right or option
pursuant to the Operating Lease or otherwise to purchase all or any part of the
Property.
          4.1.28 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 Property to Borrower have been paid and the
granting and recording of the Security Instrument and the UCC financing
statements required to be filed in connection with the Loan. 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 Security Instrument, have been paid, and, under current Legal
Requirements, the Security Instrument is enforceable against Borrower in
accordance with its terms by Lender (or any subsequent holder thereof) subject
only to applicable bankruptcy, insolvency and similar laws affecting rights of
creditors generally, and subject as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law.
          4.1.29 Single Purpose Entity/Separateness.
               (a) Until the Indebtedness has been paid in full, Borrower hereby
represents, warrants and covenants that Borrower and each SPE Entity is, and
shall continue to be, a Single Purpose Entity.

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               (b) All of the assumptions made in the Non-Consolidation Opinion,
including, but not limited to, any exhibits attached thereto, are true and
correct in all material respects. Borrower and each SPE Entity have complied and
will comply with all of the assumptions made with respect to it in the
Non-Consolidation Opinion.
          4.1.30 Management Agreement. The Management Agreement is in full force
and effect and there is no default thereunder by any party thereto and no event
has occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder. The Manager is not an affiliate of Borrower.
The Management Agreement and Manager’s Subordination Agreement together embody
the entire agreement and understanding among Borrower, Tenant and Manager with
respect to the management of the Property.
          4.1.31 Illegal Activity. No portion of the Property has been or will
be purchased with proceeds of any illegal activity.
          4.1.32 No Change in Facts or Circumstances; Disclosure. All written
information, reports, certificates and other documents submitted by Borrower to
Lender in connection with the Loan are, to the best of Borrower’s knowledge,
accurate, complete and correct in all material respects. There has been no
material adverse change known to Borrower in any condition, fact, circumstance
or event that would make any such information inaccurate, incomplete or
otherwise misleading in any material respect or that otherwise materially and
adversely affects the Property or the business operations or the financial
condition of Borrower. Borrower has disclosed to Lender all material facts known
to Borrower and has not failed to disclose any material fact known to Borrower
that is likely to cause any representation or warranty made herein to be
materially misleading.
          4.1.33 Tax Filings. Borrower has filed (or has obtained effective
extensions for filing) all federal, state and local tax returns required to be
filed and has paid or made adequate provision for the payment of all federal,
state and local taxes, charges and assessments payable by Borrower.
          4.1.34 Solvency/Fraudulent Conveyance. Borrower (a) has not entered
into the transaction contemplated by this Agreement or any Loan Document with
the actual intent to hinder, delay, or defraud any creditor and (b) has received
reasonably equivalent value in exchange for its obligations under the Loan
Documents. After giving effect to the Loan, the fair saleable value of
Borrower’s assets exceeds and will, immediately following the making of the
Loan, 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 Loan, 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 Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur Debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower).

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          4.1.35 Investment Company Act. Borrower is not (a) an investment
company or a company Controlled by an investment company, within the meaning of
the Investment Company Act of 1940, as amended, (b) a holding company or a
subsidiary company of a holding company or an affiliate of either a holding
company or a subsidiary company within the mean of the Public Utility Holding
Company Act of 1935, as amended or (c) subject to any other federal or state law
or regulation which purports to restrict or regulate its ability to borrow
money.
          4.1.36 Labor. No organized work stoppage or labor strike is pending or
threatened by employees and other laborers at the Property. Neither Borrower
nor, to the best of Borrower’s knowledge, Manager (a) is involved in or
threatened with any labor dispute, grievance or litigation relating to labor
matters involving any employees and other laborers at the Property, including,
without limitation, violation of any federal, state or local labor, safety or
employment laws (domestic or foreign) and/or charges of unfair labor practices
or discrimination complaints, (b) has engaged in any unfair labor practices
within the meaning of the National Labor Relations Act or the Railway Labor Act
or (c) is a party to, or bound by, any collective bargaining agreement or union
contract with respect to employees and other laborers at the Property and no
such agreement or contract is currently being negotiated by the Borrower,
Manager or any of its Affiliates.
          4.1.37 Inventory. Borrower is the owner of all of the FF&E is located
on or at the Property. The FF&E owned by Borrower sufficient to operate the
Property in the manner required hereunder and in the manner in which the
Property is operated as of the Closing Date.
          4.1.38 Brokers. Neither Borrower nor Lender has dealt with any broker
or finder with respect to the transactions contemplated by the Loan Documents
and neither party has done any acts, had any negotiations or conversations, or
made any agreements or promises which will in any way create or give rise to any
obligation or liability for the payment by either party of any brokerage fee,
charge, commission or other compensation to any Person with respect to the
transactions contemplated by the Loan Documents.
          4.1.39 No Other Debt. Borrower has not incurred any Debt that has not
been heretofore repaid in full, other than the Permitted Debt.
          4.1.40 Taxpayer Identification Number; Jurisdiction of Formation. The
Federal taxpayer identification number of (a) Borrower is 20-4761853, and
(b) General Partner is 20-4761835. Borrower, General Partner and Guarantor are
each organized under the laws of the State of Delaware.
          4.1.41 Compliance with Anti-Terrorism, Embargo and Anti-Money
Laundering Laws. (a) None of Borrower, General Partner, Tenant, Guarantor or
Parent or any Person who owns any equity interest in or Controls Borrower,
General Partner, Tenant or Guarantor currently is identified on the OFAC List or
otherwise qualifies as a Prohibited Person, and Borrower has implemented
procedures to ensure that no Person who now or hereafter owns any equity
interest in Borrower, General Partner, Tenant or Guarantor is a Prohibited
Person or Controlled by a Prohibited Person, and (ii) none of Borrower, General
Partner, Tenant, Guarantor or Parent is in violation of any Legal Requirements
relating to anti-money laundering or anti-terrorism, including, without
limitation, Legal Requirements related to transacting business with Prohibited

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Persons or the requirements of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, U.S. Public Law 107-56, and the related regulations issued thereunder,
including temporary regulations, all as amended from time to time.
          4.1.42 REAs and the Operating Lease.
               (a) Borrower or the Title Company has heretofore delivered to
Lender true and complete copies of all Leases and REAs and any and all
amendments or modifications thereof. No events or circumstances exist which with
or without the giving of notice, the passage of time or both, may constitute a
material default on the part of Borrower under any Leases or REAs. Borrower has
complied with and performed all of its material construction, improvement and
alteration obligations with respect to the Property required as of the date
hereof and any other obligations under the other REAs or the Leases that are
required as of the date hereof have either been complied with or the failure to
comply with the same does not and could not reasonably be expected to have a
Material Adverse Effect. Each Lease is subordinate to the Lien of the Security
Instrument.
               (b) The Operating Lease is in full force and effect and there is
no material default, breach or violation existing thereunder by Borrower or
Tenant and no event has occurred that, with the passage of time or the giving of
notice, or both, would constitute a default, breach or violation by any party
thereunder. The Operating Lease is subordinate to the Lien of the Security
Instrument.
          4.1.43 Intellectual Property. Borrower or Tenant either owns or is
licensed to use all Intellectual Property necessary for the use, occupancy and
operation of the Property as a first-class, full service hotel and conference
center, and other appurtenant and related uses. Borrower’s and Tenant’s use of
the Intellectual Property is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge. To Borrower’s knowledge, (a) no
Person has given or received written notice purporting to avoid, repudiate,
rescind or terminate any agreement that authorizes the use of any Intellectual
Property that is licensed to Borrower or Tenant by a third party, and, to the
knowledge of Borrower, the terms of any agreement authorizing the use of any
Intellectual Property to which Borrower or Tenant is a party have been complied
with by all parties in all material respects, and (b) the use of the
Intellectual Property in the manner in which it is currently used does not
infringe, dilute, misappropriate or otherwise violate the rights of any Person
and no Intellectual Property is being infringed, diluted, misappropriated or
otherwise violated by any Person.
          4.1.44 Backward Representations — Entity. Borrower hereby represents
that, from and after the date of formation of each of Borrower and General
Partner and through the date of this Agreement: (a) neither Borrower nor General
Partner has any judgments or liens of any nature that remain unsatisfied as of
the Closing Date, except for tax liens not yet due; (b) each of Borrower and
General Partner is in compliance in all material respects with all applicable
Legal Requirements; (c) neither Borrower nor General Partner is involved in any
dispute with any taxing authority; (d) each of Borrower and General Partner has
paid all taxes which it owes (or has filed valid extensions therefor and paid
any amounts required thereunder); (e) neither Borrower nor General Partner has
owned any real property other than the Property and personal

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property necessary or incidental to its ownership or operation of the Property;
(f) neither Borrower nor General Partner is now, nor has ever been, party to any
lawsuit, arbitration, summons, or legal proceeding that, to Borrower’s
knowledge, is still pending, or that resulted in a judgment against Borrower or
General Partner that has not been paid or otherwise satisfied in full; and
(g) neither Borrower nor General Partner has any material obligations,
contingent or actual, that are not related to the Property or any business
activity involving the Property.
          4.1.45 Backward Representations — Separateness. Borrower hereby
represents that, from and after the date of formation of each of Borrower and
General Partner and through the date of this Agreement: (a) neither Borrower nor
General Partner has entered into any contract or agreement with any of its
Affiliates, constituents, or owners, or any guarantors of any of its obligations
or any Affiliate of any of the foregoing (individually, a “Related Party” and
collectively, the “Related Parties”), except upon terms and conditions that are
commercially reasonable and substantially similar to those available in an
arm’s-length transaction with an unrelated party; (b) each of Borrower and
General Partner has paid all of its debts and liabilities from its assets;
(c) each of Borrower and General Partner has done or caused to be done all
things necessary to observe all organizational formalities applicable to it and
to preserve its existence; (d) each of Borrower and General Partner has
maintained all of its books, records, financial statements and bank accounts
separate from those of any other Person; (e) neither Borrower nor General
Partner has had its assets listed as assets on the financial statement of any
other Person except as required by GAAP (or such other accounting basis
acceptable to Lender); (f) each of Borrower and General Partner has filed its
own tax returns (except to the extent that it has been a tax-disregarded entity
not required to file tax returns under applicable law); (g) each of Borrower and
General Partner has been, and at all times has held itself out to the public as,
a legal entity separate and distinct from any other Person (including any
Affiliate or other Related Party); (h) each of Borrower and General Partner has
corrected any known misunderstanding regarding its status as a separate entity;
(i) each of Borrower and General Partner has conducted all of its business and
held all of its assets in its own name; (j) each of Borrower and General Partner
has not identified itself or any of its Affiliates as a division or part of the
other; (k) each of Borrower and General Partner has maintained and utilized
separate stationery, invoices and checks bearing its own name; (l) each of
Borrower and General Partner has not commingled its assets with those of any
other Person and has held all of its assets in its own name; (m) each of
Borrower and General Partner has not guaranteed or become obligated for the
debts of any other Person other than as provided in the Owner’s Agreement;
(n) neither Borrower nor General Partner has held itself out as being
responsible for the debts or obligations of any other Person; (o) each of
Borrower and General Partner has allocated fairly and reasonably any overhead
expenses that have been shared with an Affiliate, including paying for office
space and services performed by any employee of an Affiliate or Related Party;
(p) neither Borrower nor General Partner has pledged its assets to secure the
obligations of any other Person and no such pledge remains outstanding except in
connection with the Loan; (q) each of Borrower and General Partner has
maintained adequate capital in light of its contemplated business operations;
(r) each of Borrower and General Partner has maintained a sufficient number of
employees in light of its contemplated business operations and has paid the
salaries of its own employees from its own funds; (s) neither Borrower nor
General Partner has owned any subsidiary or any equity interest in any other
entity other than the general partnership interest in Borrower owned by General
Partner; (t) neither Borrower nor General Partner has incurred any indebtedness
that is still outstanding other than indebtedness that is permitted under the
Loan Documents; and (u) neither

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Borrower nor General Partner has had any of its obligations guaranteed by an
Affiliate, except for guarantees that have been either released or discharged
(or that will be discharged as a result of the closing of the Loan) or
guarantees that are contemplated by the Loan Documents.
     4.2 Survival of Representations. Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall be deemed
given and made as of the date of the funding of the Loan and survive for so long
as any amount remains owing to Lender under this Agreement or any of the other
Loan Documents by Borrower or Guarantor unless a longer survival period is
expressly stated in a Loan Document with respect to a specific representation or
warranty, in which case, for such longer period. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.
V. BORROWER COVENANTS
     5.1 Affirmative Covenants. From the Closing Date and until payment and
performance in full of all obligations of Borrower under the Loan Documents or
the release of the Lien in favor of Lender pursuant to the Loan Documents,
Borrower hereby covenants and agrees with Lender that:
          5.1.1 Performance by Borrower. Borrower shall in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Loan Document executed and delivered by, or applicable to, Borrower, and shall
not enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower, as applicable, without the prior written consent
of Lender.
          5.1.2 Existence; Compliance with Legal Requirements; Insurance.
Subject to Borrower’s right of contest pursuant to Section 7.3, Borrower shall
at all times comply and cause the Property to be in compliance in all material
respects with all Legal Requirements applicable to the Borrower, any SPE Entity
and the Property and the uses permitted upon the Property. Borrower shall do or
cause to be done all things reasonably necessary to preserve, renew and keep in
full force and effect its existence, rights, licenses, permits and franchises
necessary to comply with all Legal Requirements applicable to it and the
Property. There shall never be committed by Borrower, and Borrower shall not
knowingly permit any other Person in occupancy of or involved with the operation
or use of the Property to commit, any act or omission affording the federal
government or any state or local government the right of forfeiture as against
the Property or any part thereof or any monies paid in performance of Borrower’s
obligations under any of the Loan Documents. Borrower hereby covenants and
agrees not to commit, knowingly permit or suffer to exist any act or omission
affording such right of forfeiture. Borrower shall at all times maintain,
preserve and protect all franchises and trade names and preserve all the
remainder of its property used in the conduct of its business and shall keep the
Property in good working order and repair, and from time to time make, or cause
to be made, all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereto, all as more fully set forth in the
Security Instrument. Borrower shall keep the Property

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insured at all times to such extent and against such risks, and maintain
liability and such other insurance, as is more fully set forth in this
Agreement.
          5.1.3 Litigation; Notices.
               (a) Borrower shall give prompt written notice to Lender of any
litigation or governmental proceedings pending or threatened in writing against
Borrower which, if determined adversely to Borrower would have a Material
Adverse Effect.
               (b)  In addition to all other notices required to be given by
Borrower hereunder, Borrower shall give notice to Lender promptly upon the
occurrence of: (i) any Default; and (ii) a material adverse change in the
business, operations, property or financial condition of Borrower or the
Property.
          5.1.4 Single Purpose Entity.
               (a) Each of Borrower and each SPE Entity shall remain a Single
Purpose Entity, and each SPE Entity shall at all times have at least two
Independent Directors, Independent Managers or Independent Members, as
applicable.
               (b) Each of Borrower and each SPE Entity shall continue to
maintain its own deposit account or accounts, separate from those of any
Affiliate, with commercial banking institutions. None of the funds of Borrower
or any SPE Entity will be diverted to any other Person or for other than
business uses (including distributions to the Guarantor and General Partner) of
Borrower or any SPE Entity, as applicable, nor will such funds be commingled
with the funds of any other Affiliate.
               (c) To the extent that Borrower or any SPE Entity shares the same
officers or other employees as any of Borrower, any SPE Entity or their
Affiliates, the salaries of and the expenses related to providing benefits to
such officers and other employees shall be fairly allocated among such entities,
and each such entity shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees.
               (d) To the extent that Borrower or any SPE Entity jointly
contracts with any of Borrower, any SPE Entity or either of their Affiliates, as
applicable, to do business with vendors or service providers or to share
overhead expenses, the costs incurred in so doing shall be allocated fairly
among such entities, and each such entity shall bear its fair share of such
costs. To the extent that either Borrower or any SPE Entity contracts or does
business with vendors or service providers where the goods and services provided
are partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall bear its fair share
of such costs. All material transactions between (or among) Borrower or each SPE
Entity and any of their respective Affiliates shall be conducted on
substantially the same terms (or on more favorable terms for Borrower or any SPE
Entity, as applicable) as would be conducted with third parties.

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               (e) To the extent that Borrower, any SPE Entity or any of their
Affiliates have offices in the same location, there shall be a fair and
appropriate allocation of overhead costs among them, and each such entity shall
bear its fair share of such expenses.
               (f) Borrower and each SPE Entity shall conduct its affairs
strictly in accordance with its organizational documents, and observe all
necessary, appropriate and customary corporate, limited liability company or
partnership formalities, as applicable, including, but not limited to, obtaining
any and all members’ consents necessary to authorize actions taken or to be
taken, and maintaining accurate and separate books, records and accounts,
including, without limitation, payroll and intercompany transaction accounts.
               (g) In addition, Borrower and each SPE Entity shall each:
(i) maintain its books and records separate from those of any other Person;
(ii) maintain its assets in such a manner that it is not more costly or
difficult to segregate, identify or ascertain such assets; (iii) hold regular
meetings of its board of directors, shareholders, partners or members, as the
case may be, and observe all other corporate, partnership or limited liability
company, as the case may be, formalities; (iv) hold itself out to creditors and
the public as a legal entity separate and distinct from any other entity; (v) to
the extent that it is required to file tax returns under applicable law, shall
file its own tax returns, except to the extent that it is required by law to
file consolidated federal or unitary state tax returns (or any analogous
combined state tax returns); (vi) will maintain its books, records, financial
statements, bank accounts, accounting records and other entity documents
separate from any other Person and not have its assets listed on the financial
statements of any other Person except as required by GAAP; provided, however,
that its assets may be included in a consolidated financial statement of any of
its Affiliates so long (A) as an appropriate notation shall be made on such
consolidated financial statements indicating that such Person’s separate assets
and credit are not available to satisfy the debts and other obligations of such
Affiliate and that its liabilities do not constitute obligations of the
consolidated entity and (B) such Person shall be shown as a separate member of
such group; (vii) transact all business with its Affiliates on an arm’s-length
basis and pursuant to enforceable agreements; (viii) conduct business in its
name and use separate stationery, invoices and checks; (ix) not commingle its
assets or funds with those of any other Person other than as contemplated by the
Loan Document; and (x) not assume, guarantee or pay the debts or obligations of
any Person other than as other than as contemplated by the Loan Documents or the
Owner’s Agreement.
               (h) All of the assumptions made in any subsequent
non-consolidation opinion delivered in connection with the Loan Documents (an
“Additional Non-Consolidation Opinion”), including, but not limited to, any
exhibits attached thereto, will have been and shall be true and correct in all
material respects. Borrower and each SPE Entity will have complied and will
comply in all material respects with all of the assumptions made with respect to
it in any Additional Non-Consolidation Opinion. Each entity other than Borrower
with respect to which an assumption shall be made in any Additional
Non-Consolidation Opinion will have complied and will comply in all material
respects with all of the assumptions made with respect to it in any Additional
Non-Consolidation Opinion.

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          5.1.5 Consents.
               (a) If Borrower or any SPE Entity is a corporation, the board of
directors of such Person may not take any action requiring the unanimous
affirmative vote of 100% of the members of the board of directors unless all of
the directors, including the Independent Directors shall have participated in
such vote. If Borrower or any SPE Entity is a limited liability company, (i) if
such Person is managed by a board of managers, the board of managers of such
Person may not take any action requiring the unanimous affirmative vote of 100%
of the members of the board of managers unless all of the managers, including
the Independent Managers, shall have participated in such vote, (ii) if such
Person is not managed by a board of managers, the members of such Person may not
take any action requiring the affirmative vote of 100% of the members of such
Person unless all of the members, including the Independent Members, shall have
participated in such vote.
               (b) An affirmative vote of 100% of the directors, board of
managers or members, as applicable, of Borrower and any SPE Entity shall be
required to (i) file a bankruptcy or insolvency petition or otherwise institute
insolvency proceedings or to authorize Borrower or any SPE Entity to do so or
(ii) file an involuntary bankruptcy petition against any Affiliate, Manager, or
any Affiliate of Manager. Furthermore, Borrower’s and each SPE Entity’s
formation documents shall expressly state that for so long as the Loan is
outstanding and unless at least two Independent Directors, Independent Managers
or Independent Members satisfying the requirements of this Agreement and the
applicable organizational documents shall then be appointed and serving, neither
Borrower nor any SPE Entity shall be permitted to (A) dissolve, liquidate,
consolidate, merge or sell all or substantially all of Borrower’s or any SPE
Entity’s assets other than in connection with the repayment of the Loan or as
expressly permitted in Article VIII hereof, (B) engage in any other business
activity and such restrictions shall not be modified or violated for so long as
the Loan is outstanding, or (C) consider, authorize or take any of the actions
described in Section 5.1.5(b)(i) or Section 5.1.5(b)(ii); any such action shall
be void ab intio.
          5.1.6 Access to Property. Borrower shall permit agents,
representatives and employees of Lender and the Rating Agencies to inspect the
Property or any part thereof during normal business hours on Business Days upon
reasonable advance notice.
          5.1.7 Notice of Default. Borrower shall promptly advise Lender (a) of
any event or condition that has or is likely to have a Material Adverse Effect
and (b) of the occurrence of any Default or Event of Default of which Borrower
has knowledge.
          5.1.8 Cooperate in Legal Proceedings. Borrower shall cooperate fully
with Lender with respect to any proceedings before any court, board or other
Governmental Authority which would reasonably be expected to affect in any
material adverse way the rights of Lender hereunder or under any of the other
Loan Documents and, in connection therewith, permit Lender, at its election, to
participate in any such proceedings which may have a Material Adverse Effect.
          5.1.9 Perform Loan Documents. Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions of, and shall pay
when due all costs, fees and

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expenses to the extent required, under the Loan Documents executed and delivered
by, or applicable to, Borrower.
          5.1.10 Insurance.
               (a) Borrower shall cooperate with Lender in obtaining for Lender
the benefits of any Proceeds lawfully or equitably payable in connection with
the Property, and Lender shall be reimbursed for any expenses incurred in
connection therewith (including reasonable attorneys’ fees and disbursements)
out of such Proceeds.
               (b) Borrower shall comply with all Insurance Requirements and
shall not bring or keep or permit to be brought or kept any article upon any of
the Property or cause or permit any condition to exist thereon which would be
prohibited by any Insurance Requirement, or would invalidate insurance coverage
required hereunder to be maintained by Borrower on or with respect to any part
of the Property pursuant to Article VI.
          5.1.11 Further Assurances; Separate Notes; Loan Resizing.
               (a) Borrower shall execute and acknowledge (or cause to be
executed and acknowledged) and deliver to Lender all documents, and take all
actions, reasonably required by Lender from time to time to confirm the rights
created or now or hereafter intended to be created under this Agreement and the
other Loan Documents and any security interest created or purported to be
created thereunder, to protect and further the validity, priority and
enforceability of this Agreement and the other Loan Documents, to subject to the
Loan Documents any property of Borrower intended by the terms of any one or more
of the Loan Documents to be encumbered by the Loan Documents, or otherwise carry
out the purposes of the Loan Documents and the transactions contemplated
thereunder. Borrower agrees that it shall, upon request, reasonably cooperate
with Lender in connection with any request by Lender to (i) sever the Note into
two or more separate substitute notes having an aggregate principal amount equal
to the Principal Amount, (ii) reapportion the Loan among separate subordinate
notes having an aggregate principal amount equal to the Principal Amount, or
(iii) effectuate any combination of (i) or (ii). In so cooperating, Borrower
shall take all actions reasonably requested by Lender, including, without
limitation, by executing and delivering to Lender new substitute or subordinate
notes to replace the Note, amendments to or replacements of existing Loan
Documents, and delivering such Opinions of Counsel with respect to such
substitute or subordinate notes, amendments and/or replacements as Lender shall
reasonably require, provided that Borrower shall bear no costs or expenses in
connection therewith (other than administrative costs and expenses of Borrower).
Any such substitute or subordinate notes may have varying principal amounts and
economic terms, provided, however, that (A) the maturity date of any such
substitute and subordinate notes shall be the same as the scheduled Maturity
Date of the Note immediately prior to the issuance of such substitute,
subordinate or mezzanine notes, (B) the substitute and subordinate notes shall
provide for amortization of the Principal Amount on a weighted average basis
over a period not less than the amortization period, if any, provided under the
Note immediately prior to the issuance of the substitute and subordinate notes,
(C) the initial economics of the Loan, taken as a whole, shall not change in a
manner which is adverse to Borrower, and (D) Borrower shall not have (except to
a de minimis extent) any lesser rights or greater obligations than currently set
forth in the Loan Documents. Upon the occurrence and

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during the continuance of an Event of Default, Lender may apply payment of all
sums due under such substitute notes in such order and priority as Lender shall
elect in its sole and absolute discretion.
               (b) After Closing Date and prior to a Securitization, Lender
shall have the right, at no cost and expense to Borrower (other than
administrative costs and expenses of Borrower), to create one or more mezzanine
loans (each, a “New Mezzanine Loan”), to establish different interest rates and
to reallocate principal balances of each of the Loan and any New Mezzanine
Loan(s) amongst each other and to reallocate the interest rate among the Loan
and any new Mezzanine Loan(s) and to require the payment of the Loan and any New
Mezzanine Loan(s) in such order of priority as may be designated by Lender;
provided, that (i) the maturity date of the Loan and any New Mezzanine Loan(s)
shall be the same as the scheduled Maturity Date of the Note, (ii) the initial
economics of the Loan and any New Mezzanine Loan(s), taken as a whole, shall not
change in a manner which is adverse to Borrower, and (iii) Borrower shall not
have (except to a de minimis extent) any lesser rights or greater obligations
than currently set forth in the Loan Documents. Borrower shall, at no cost and
expense to Borrower (other than administrative costs and expenses of Borrower),
execute and deliver such documents as shall reasonably be required by Lender as
promptly as possible under the circumstances in connection with this
Section 5.1.11(b), all in form and substance reasonably satisfactory to
Borrower, Lender and the Rating Agencies, including, without limitation, in
connection with the creation of any New Mezzanine Loan, a promissory note and
loan documents necessary to evidence such New Mezzanine Loan, and Borrower shall
execute such amendments to the Loan Documents as are necessary in connection
with the creation of such New Mezzanine Loan all of which shall be on
substantially the same terms and conditions as the Loan Documents. In addition,
Borrower shall, at no cost and expense to Borrower (other than administrative
costs and expenses of Borrower), cause the formation of one or more special
purpose, bankruptcy remote entities as required by Lender in order to serve as
the borrower under any New Mezzanine Loan(s) (each, a “New Mezzanine Borrower”)
and the applicable organizational documents of Borrower shall be amended and
modified as necessary or required in the formation of any New Mezzanine
Borrower. Further, in connection with any New Mezzanine Loan, Borrower shall, at
no cost and expense to Borrower (other than administrative costs and expenses of
Borrower), deliver to Lender opinions of legal counsel, in substantially the
same form as were delivered in connection with the Loan, with respect to due
execution, authority and enforceability of the New Mezzanine Loan and the Loan
Documents, as amended and an Additional Non-Consolidation Opinion for the Loan
and a substantive non-consolidation opinion with respect to any New Mezzanine
Loan, each as reasonably acceptable to Lender and/or the Rating Agencies.
               (c) In addition, Borrower shall, at Borrower’s sole cost and
expense (except if in connection with Section 5.1.11(a) or Section 5.1.11(b)
above, in which case, at no cost and expense to Borrower (other than
administrative costs and expenses of Borrower):
                    (i) furnish to Lender, at Lender’s request, to the extent
not otherwise already furnished to Lender and reasonably acceptable to Lender,
all instruments, documents, boundary surveys, footing or foundation surveys,
certificates, plans and specifications, appraisals, title and other insurance
reports and agreements, in each case, to the extent in Borrower’s possession or
control, and each and every other document, certificate,

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agreement and instrument required to be furnished by Borrower pursuant to the
terms of the Loan Documents;
                    (ii) execute and deliver, from time to time, such further
instruments (including, without limitation, delivery of any financing statements
under the UCC) as may be reasonably requested by Lender to confirm the Lien of
the Security Instrument on any Building Equipment, Operating Asset or any
Intangible;
                    (iii) execute and deliver to Lender such documents,
instruments, certificates, assignments and other writings, and do such other
acts necessary to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and
                    (iv) do and execute all and such further lawful and
reasonable acts, conveyances and assurances for the carrying out of the terms
and conditions of this Agreement and the other Loan Documents, as Lender shall
reasonably require from time to time.
               (d) Borrower hereby authorizes the filing of any financing
statements or continuation statements, and amendments to financing statements,
in any jurisdictions and with any filing offices as the Lender may determine, in
its sole discretion, are necessary or advisable to perfect the security interest
granted to the Lender in connection with the Loan Documents. Such financing
statements may describe the collateral in the same manner as described in the
Security Agreement or may contain an indication or description of collateral
that describes such property in any other manner as the Lender may determine, in
its sole discretion, is necessary, advisable or prudent to ensure the perfection
of the security interest in the Property and other collateral granted to Lender
under the Loan Documents, including, without limitation, describing such
property as “all assets” or “all personal property,” whether now owned or
hereafter acquired and wherever located.
          5.1.12 Mortgage Taxes. Borrower shall pay all taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the
Note or the Liens created or secured by the Loan Documents, other than income,
franchise and doing business taxes imposed on Lender.
          5.1.13 Compliance with Management Agreement & Operating Lease.
               (a) Borrower shall, and shall cause Tenant to use commercially
reasonable efforts to cause Manager to, (i) promptly perform and/or observe all
of the covenants and agreements required to be performed and observed by Manager
and Tenant under the Management Agreement and do all things necessary to
preserve and to keep unimpaired Borrower’s and Tenants material rights
thereunder, if any; (ii) promptly notify Lender of any “event of default” under
the Management Agreement of which it is aware; (iii) promptly deliver to Lender
a copy of each financial statement, capital expenditures plan, property
improvement plan and any other notice, report and estimate received by it under
the Management Agreement; and (iv) enforce in a commercially reasonable manner
the performance and observance of all of the material covenants and agreements
required to be performed and/or observed by the Manager under the Management
Agreement.

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               (b) Borrower shall, and shall cause Tenant to, (i) cause the
Property to be operated pursuant to the Operating Lease; (ii) promptly perform
and/or observe all of the material covenants, agreements and obligations
required to be performed and observed by Borrower under the Operating Lease and
do all things necessary to preserve and to keep unimpaired its material rights
thereunder; (iii) promptly notify Lender in writing of any material default
under the Operating Lease (or any immaterial default which could give Borrower
or Tenant the right to terminate the Operating Lease); (iv) promptly deliver to
Lender a copy of each financial statement, business plan, capital expenditures
plan, notice, report and estimate received by Borrower under the Operating
Lease; (v) promptly enforce in a commercially reasonable manner the performance
and observance of all of the material covenants and agreements required to be
performed and/or observed by Tenant under the Operating Lease; (v) cause Tenant
to deposit all Rents from the Property into the Holding Account; and (vi) cause
Tenant to operate the Properties and conduct its business and operations in
accordance with the terms of this Agreement as if it were a Borrower hereunder
and not allow or permit Tenant to take any of the actions that Borrower is
prohibited from taking pursuant to the terms of this Agreement.
          5.1.14 Business and Operations; Licenses. Borrower shall continue to
engage in the businesses presently conducted by it as and to the extent the same
are necessary for the ownership, maintenance, management and operation of the
Property. Borrower shall qualify to do business and shall remain in good
standing under the laws of the State in which the Property is located and as and
to the extent required for the ownership, maintenance, management and operation
of the Property. Borrower shall keep and maintain (or cause Tenant to use
commercially reasonable efforts to cause Manager to keep and maintain) all
Licenses necessary for the operation of the Property as a first-class, full
service hotel and conference center, and other appurtenant and related uses.
          5.1.15 Title to the Property. Borrower shall preserve, warrant and
defend (a) Borrower’s right, title and interest in and to the Property and every
part thereof, subject only to the Permitted Encumbrances and (b) the validity
and priority of the Liens of the Security Instrument, the Assignment of Leases
and this Agreement on the Property, subject only to the Permitted Encumbrances,
in each case against the claims of all Persons whomsoever. Borrower shall
reimburse Lender for any losses, costs, damages or expenses (including
reasonable attorneys’ fees and court costs) incurred by Lender if an interest in
the Property, other than as permitted hereunder, is claimed by another Person.
          5.1.16 Costs of Enforcement. In the event (a) that this Agreement or
the Security Instrument is foreclosed upon in whole or in part or that this
Agreement or the Security Instrument is put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any security
agreement prior to or subsequent to this Agreement in which proceeding Lender is
made a party, or a mortgage prior to or subsequent to the Security Instrument in
which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower or any of its
constituent Persons or an assignment by Borrower or any of its constituent
Persons for the benefit of its creditors, Borrower, its successors or assigns,
shall be chargeable with and agrees to pay all costs of collection and defense,
including reasonable attorneys’ fees and costs, incurred by Lender or

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Borrower in connection therewith and in connection with any appellate proceeding
or post-judgment action involved therein, together with all required service or
use taxes.
          5.1.17 Estoppel Statement.
               (a) Borrower shall, from time to time, upon 30 days’ prior
written request from Lender, execute, acknowledge and deliver to the Lender, an
Officer’s Certificate, stating that this Agreement and the other Loan Documents
are unmodified and in full force and effect (or, if there have been
modifications, that this Agreement and the other Loan Documents are in full
force and effect as modified and setting forth such modifications), stating the
amount of accrued and unpaid interest and the outstanding principal amount of
the Note and containing such other information with respect to the Borrower, the
Property and the Loan as Lender shall reasonably request. The estoppel
certificate shall also state either that no Default is known to exist hereunder
or, if any Default shall be known to exist hereunder, specify such Default and
the steps being taken to cure such Default.
               (b) Borrower shall use commercially reasonable efforts to deliver
to Lender, within 15 Business Days of Lender’s request, tenant estoppel
certificates from Tenant, Manager, any counterparty to the REAs or any other
Person having an interest in the Property from time to time, in each case, in
form and substance reasonably acceptable to Lender; provided that Borrower shall
not be required to deliver such certificates more frequently than three times in
any calendar year.
          5.1.18 Loan Proceeds. Borrower shall use the proceeds of the Loan
received by it on the Closing Date only for the purposes set forth in
Section 2.1.4.
          5.1.19 No Joint Assessment. Borrower shall not suffer, permit or
initiate the joint assessment of the Property (a) with any other real property
constituting a tax lot separate from the Property and (b) which constitutes real
property with any portion of the Property which may be deemed to constitute
personal property, or any other procedure whereby the lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to such real property portion of the Property.
          5.1.20 No Further Encumbrances. Borrower shall do, or cause to be
done, all things necessary to keep and protect the Property and all portions
thereof unencumbered from any Liens, easements or agreements granting rights in
or restricting the use or development of the Property, except for (a) Permitted
Encumbrances, (b) Liens permitted pursuant to the Loan Documents, and (c) Liens
for Impositions prior to the imposition of any interest, charges or expenses for
the non-payment thereof. Nothing in this Section 5.1.20 shall be deemed to limit
Borrower’s right to contest Liens for Impositions in accordance with Section 7.3
hereof.
          5.1.21 Article 8 “Opt In” Language. Each organizational document of
Borrower, General Partner, each SPE Entity, any Mezzanine Borrower and any New
Mezzanine Borrower shall, if requested by Lender, be modified to include the
language set forth on Exhibit U.
          5.1.22 Leases, REAs, etc. Borrower shall promptly after receipt
thereof deliver to Lender a copy of any notice received with respect to the
REAs, the Operating Lease, Management Agreement, or any Lease claiming any
default in the performance or observance of

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any of the material terms, covenants or conditions of any of the REAs, Operating
Lease, Management Agreement, or Lease.
          5.1.23 Independent Directors, Independent Managers, Independent
Members. Borrower shall provide Lender with 10 Business Days’ written notice
prior to the removal of an Independent Director, Independent Manager or
Independent Member of Borrower, General Partner or any other SPE Entity, and no
Independent Director, Independent Manager or Independent Member of Borrower,
General Partner or any other SPE Entity may be removed for a reason other than:
(a) acts of omissions by such Independent Director that constitute willful
disregard of (or gross negligence or willful misconduct with respect of) such
independent director’s duties under this Agreement or the organizational
documents of the applicable entity) or (b) such Independent Director,
Independent Manager or Independent Member has engaged in or has been charged
with, or has been convicted of, fraud or other acts constituting a crime under
any Legal Requirements.
          5.1.24 Extension or Renewal of Operating Lease, etc. At least 60 days
prior to the scheduled expiration of the Operating Lease (which is, as of the
date of this Agreement, scheduled to expire on December 31, 2012), Borrower
shall deliver to Lender (a) an amendment to the Operating Lease extending the
term of the Operating Lease for a period of at least five years with no other
changes in the terms thereof except to the extent required to comply with Legal
Requirements applicable to taxable subsidiaries of real estate investment
trusts, (b) a replacement lease agreement containing terms and conditions
(including rental rates, percentage rental payments, and other substantive terms
and conditions) no less favorable to Borrower than what is provided in the
Operating Lease in effect on the date of this Agreement except to the extent
required to comply with Legal Requirements applicable to taxable subsidiaries of
real estate investment trusts, or (c) an agreement with a Qualified Manager to
operate the Property for and on behalf of Borrower, which agreement shall be
subject to the terms and conditions of Section 5.2.14 below. Any agreement,
amendment or other instrument delivered by Borrower pursuant to this
Section 5.1.24 shall be in form and substance reasonably acceptable to Lender,
and following a Securitization, the Rating Agencies, and shall include (or
obligate the counterparty thereto to execute and deliver) such other instruments
or agreements as Lender or the Rating Agencies, as applicable, may reasonably
require.
          5.1.25 Broker Indemnity. Borrower shall pay as and when due any and
all brokerage fees, charges, commissions or other compensation or reimbursement
due to Broker with respect to the transactions contemplated by the Loan
Documents. Borrower and Guarantor, jointly and severally, on the one hand and
Lender on the other hand shall each indemnify and hold harmless the other from
and against any loss, liability, cost or expense, including any judgments,
attorneys’ fees, or costs of appeal, incurred by the other party and arising out
of or relating to any breach or default by the indemnifying party of its
representations, warranties and/or agreements set forth in this Section 5.1.25.
The provisions of this Section 5.1.25 shall survive the expiration and
termination of this Agreement and the payment of the Indebtedness.
          5.1.26 Tunnel Agreement. Borrower shall promptly post, at its sole
cost and expense, any bond or other security if and when required to do so by
the Virginia State Highway and Transportation Commissioner pursuant to the
Tunnel Agreement; Borrower acknowledges (for the benefit of Lender and no other
Person) that is the successor/assignee to EADS

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Associates under the Tunnel Agreement. Borrower shall promptly deliver to Lender
any notices its receives form the Virginia State Highway and Transportation
Commissioner. (or any other Governmental Authority) relating to the Tunnel
Agreement.
     5.2 Negative Covenants. From the Closing Date until payment and performance
in full of all obligations of Borrower under the Loan Documents or the earlier
release of the Lien of this Agreement or the Security Instrument in accordance
with the terms of this Agreement and the other Loan Documents, Borrower
covenants and agrees with Lender that it will not do, directly or indirectly,
any of the following:
          5.2.1 Incur Debt; FF&E Leasing. Incur, create or assume any Debt other
than Permitted Debt, or lease any FF&E other than as expressly permitted under
this Agreement;
          5.2.2 Encumbrances. Other than in connection with any Mezzanine Loan
or New Mezzanine Loan, incur, create or assume or permit the incurrence,
creation or assumption of any Debt secured by an interest in Borrower, Mezzanine
Borrower, any New Mezzanine Borrower or any SPE Entity and shall not Transfer or
permit the Transfer of any interest in Borrower, Mezzanine Borrower, any New
Mezzanine Borrower or any SPE Entity except as permitted pursuant to
Article VIII;
          5.2.3 Engage in Different Business. Engage, directly or indirectly, in
any business other than that of entering into this Agreement and the other Loan
Documents to which Borrower is a party and the use, ownership, management,
financing, operation and maintenance of the Property and activities related
thereto;
          5.2.4 Make Advances. Make advances or make loans to any Person, or
hold any investments, except as expressly permitted pursuant to the terms of
this Agreement or any other Loan Document;
          5.2.5 Partition. Partition the Property;
          5.2.6 Commingle. Commingle its assets with the assets of any of its
Affiliates;
          5.2.7 Guarantee Obligations. Guarantee any obligations of any Person
other than as provided in the Owner’s Agreement;
          5.2.8 Transfer Assets. Transfer any asset other than in the ordinary
course of business or Transfer any interest in the Property except as may be
expressly permitted in Article VIII;
          5.2.9 Amend Organizational Documents. Amend or modify any of its
organizational documents (or the organizational documents of the General Partner
or Tenant) without Lender’s consent, other than in connection with any Transfer
permitted pursuant to Article VIII or to reflect any change in capital accounts,
contributions, distributions, allocations or other provisions that do not and
could not reasonably be expected to have a Material Adverse Effect and provided
that Borrower and each SPE Entity each remain a Single Purpose Entity;

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          5.2.10 Dissolve. Dissolve, wind-up, terminate, liquidate, merge with
or consolidate into another Person, except as expressly permitted pursuant to
this Agreement;
          5.2.11 Bankruptcy. (a) File a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings; (b) dissolve, liquidate,
consolidate, merge or sell all or substantially all of Borrower’s assets other
than in connection with (i) the repayment of the Loan or (ii) any Transfer
expressly permitted by Article VIII; (c) engage in any other business activity;
(d) file or solicit the filing of an involuntary bankruptcy petition against
Borrower, General Partner, Tenant or Guarantor, without obtaining the prior
consent of all of the directors of such SPE Entity, including, without
limitation, the Independent Directors, Independent Managers or Independent
Members, as applicable; (e) seek, or permit Guarantor or any Affiliate of
Borrower or Guarantor to seek, substantive consolidation in connection with a
proceeding under the Bankruptcy Code or under federal, state or foreign
insolvency law involving Guarantor; (f) seek, or permit Guarantor or any
Affiliate of Borrower or Guarantor to seek, to contest, oppose or object to any
motion made by Lender to obtain relief from the automatic stay or seek to
reinstate the automatic stay in the event of a future proceeding under the
Bankruptcy Code or under any other federal, state or foreign insolvency law of
Guarantor; or (f) provide, originate, acquire an interest in or solicit or
accept, or permit Guarantor or any Affiliate of Borrower or Guarantor to
provide, originate, acquire an interest in or solicit or accept, any
debtor-in-possession financing on behalf of Guarantor in the event that
Guarantor is the subject of a proceeding under the Bankruptcy Code or under
federal, state or foreign insolvency law;
          5.2.12 ERISA. Engage in any activity that would subject it to
regulation under ERISA or qualify it as an “employee benefit plan” (within the
meaning of Section 3(3) of ERISA) to which ERISA applies and Borrower’s assets
do not and will not constitute plan assets within the meaning of 29 C.F.R.
Section 2510.3-101;
          5.2.13 Distributions. From and after the occurrence and during the
continuance of an Event of Default, make any distributions to or for the benefit
of any of its partners or members or its or their Affiliates;
          5.2.14 Manager and Management Agreement.
               (a) Without the prior written consent of Lender, which consent
shall not be unreasonably withheld or delayed (provided, if a Securitization
shall have occurred, Borrower obtains a Rating Agency Confirmation with respect
to such action): (i) materially modify, change, supplement, alter or amend (or
permit Tenant to materially modify, change, supplement, alter or amend) the
Management Agreement or waive or release any of its right and remedies under the
Management Agreement that would have a Material Adverse Effect or (ii) terminate
the Management Agreement and replace (or permit Tenant to replace) the Manager
with a Person other than a Qualified Manager; provided that if such replacement
is Remington Lodging & Hospitality, LLC or any of its Affiliates consent of
Lender shall not be required (provided (A) if a Securitization shall have
occurred, Borrower obtains a Rating Agency Confirmation with respect to such
action, and (B) in all cases, such replacement Manager executes and delivers to
Lender such agreements, documents or instruments as Lender shall than reasonably
require);

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               (b) Borrower shall notify Lender in writing (and shall deliver a
copy of the proposed management agreement) of any entity proposed to be
designated (whether by Tenant, Borrower or otherwise) as a Qualified Manager of
the Property not less than 30 days before such Qualified Manager, begins to
manage the Property, and, if a Securitization shall have occurred, shall obtain
prior to any appointment of a Qualified Manager a Rating Agency Confirmation,
with respect to any proposed Qualified Manager;
               (c) If the Manager shall become insolvent or is otherwise in
default (beyond any applicable notice and cure period) under the Management
Agreement, Borrower shall (or shall cause Tenant to), at the request of Lender,
terminate the Management Agreement and replace the Manager with a Qualified
Manager in accordance with this Section 5.2.14 and shall deliver an acceptable
Non-Consolidation Opinion covering such replacement Manager if such Person
(A) is not covered by the Non-Consolidation Opinion or an Additional
Non-Consolidation Opinion, and (B) is an Affiliate of Borrower; and
               (d) Upon the retention of a Qualified Manager, Lender, and if a
Securitization shall have occurred, the Rating Agencies, shall have the right to
approve any new management agreement with such Qualified Manager (which approval
by Lender shall not be unreasonably withheld or delayed). Borrower shall cause
Tenant to comply with this covenant.
               (e) Except with respect to any replacement Qualified Manager
which may be an Affiliate of Borrower, General Partner, Tenant or Guarantor,
Lender agrees to execute and deliver a subordination, non-disturbance and
attornment agreement with substantially the same terms as the Manager’s
Subordination Agreement (as modified for any then prevailing requirements of the
Rating Agencies).
          5.2.15 Modify or Termination of REAs or Operating Lease. Except as
provided in Section 5.1.24 (with respect to the Operating Lease) and Section 8.3
(with respect to REAs), Borrower shall not (and shall not permit Tenant or
Manager to), without the prior consent of Lender, terminate, amend, modify,
restate or otherwise enter into any supplement with respect to, the Operating
Lease or any REAs;
          5.2.16 Modify Account Agreement. Without the prior consent of Lender
(and if a Securitization shall have occurred, a Rating Agency Confirmation
obtained by Borrower), Borrower shall not execute any modification to the
Account Agreement;
          5.2.17 Zoning Reclassification. Without the prior written consent of
Lender, (a) initiate or consent to any zoning reclassification of any portion of
the Property, (b) seek any variance under any existing zoning ordinance that
could result in the use of the Property becoming a non-conforming use under any
zoning ordinance or any other applicable land use law, rule or regulation, or
(c) allow any portion of the Property to be used in any manner that could result
in the use of the Property becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation;
          5.2.18 Debt Cancellation. Cancel or otherwise forgive or release any
material claim or debt owed to it by any Person, except for adequate
consideration or in the ordinary course of its business;

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          5.2.19 Intentionally Omitted;
          5.2.20 Single-Purpose Entity. Take or suffer any action or inaction
the result of which would be to cause Borrower or any SPE Entity to cease to be
a Single-Purpose Entity;
          5.2.21 Affiliate Transactions. 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 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; or
          5.2.22 Intellectual Property. Without the prior written consent of
Lender, modify, terminate or otherwise relinquish any right, title interest in
or to use any Intellectual Property which could constitute a Material Adverse
Effect.
VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
     6.1 Insurance Coverage Requirements. Borrower shall, at its sole cost and
expense, keep in full force and effect insurance coverage of the types and
minimum limits as follows during the term of this Agreement:
          6.1.1 Property Insurance. Insurance against loss customarily included
under so called “All Risk” policies including flood, earthquake, vandalism, and
malicious mischief, boiler and machinery, and such other insurable hazards as,
under good insurance practices, from time to time are insured against for other
property and buildings similar to the Improvements and Building Equipment in
nature, use, location, height, and type of construction. Such insurance policy
shall also insure the additional expense of demolition and if any of the
Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses, provide coverage for contingent liability
from Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements and containing an “Ordinance or Law Coverage” or
“Enforcement” endorsement. The amount of such “All Risk” insurance shall be not
less than 100% of the replacement cost value of the Improvements and the
Building Equipment. Each such insurance policy shall contain an agreed amount or
coinsurance waiver and replacement cost value endorsement, and shall cover,
without limitation, all tenant improvements and betterments which Borrower is
required to insure in accordance with any Lease. Lender shall be named “Loss
Payee” on a “Standard Mortgagee Endorsement” and be provided not less than
30 days advance notice of change in coverage, cancellation or non-renewal.
          6.1.2 Liability Insurance. “General Public Liability” insurance,
including, without limitation, “Commercial General Liability” insurance; “Owned”
(if any), “Hired” and “Non Owned Auto Liability”; and “Umbrella Liability”
coverage for “Personal Injury”, “Bodily Injury”, “Death, Accident and Property
Damage”, providing in combination no less than $30,000,000 ($60,000,000 during
construction) per occurrence and in the annual aggregate, per location. In the
event that aggregate limits do not apply on a “per location” basis, then the
umbrella limit shall be increased from $30,000,000 to $40,000,000. The policies
described in this paragraph shall cover, without limitation: elevators,
escalators, independent contractors, “Contractual Liability” (covering, to the
maximum extent permitted by law, Borrower’s

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obligation to indemnify Lender as required under this Agreement and “Products
and Completed Operations Liability” coverage). All public liability insurance
shall name Lender as “Additional Insured” either on a specific endorsement or
under a blanket endorsement satisfactory to Lender.
          6.1.3 Workers’ Compensation Insurance. Workers compensation and
disability insurance as required by law.
          6.1.4 Commercial Rents Insurance. “Commercial rents” insurance in an
amount equal to 18 months actual rental loss plus a 12 month extended period of
indemnity endorsement and with a limit of liability sufficient to avoid any
co-insurance penalty and to provide Proceeds which will cover the actual loss of
profits and rents sustained during the period of at least 18 months following
the date of casualty. Such policies of insurance shall be subject only to
exclusions that are reasonably acceptable to Lender and, if the Loan is the
subject of a Securitization, the Rating Agencies; provided, however, that such
exclusions are reasonably consistent with those required for loans similar to
the Loan provided herein. Such insurance shall be deemed to include “loss of
rental value” insurance where applicable. The term “rental value” means the sum
of (a) the total then ascertainable Rents payable under the Leases and (b) the
total ascertainable amount of all other amounts to be received by Borrower from
third parties which are the legal obligation of Tenants, reduced to the extent
such amounts would not be received because of operating expenses not incurred
during a period of non-occupancy of that portion of such Property then not being
occupied.
          6.1.5 Builder’s All-Risk Insurance. During any period of repair or
restoration, builder’s “All-Risk” insurance in an amount equal to not less than
the full insurable value of the Property against such risks (including so called
“All Risk” perils coverage and collapse of the Improvements to agreed limits as
Lender may request, in form and substance acceptable to Lender).
          6.1.6 Boiler and Machinery Insurance. Comprehensive boiler and
machinery insurance (without exclusion for explosion) covering all mechanical
and electrical equipment against physical damage, rent loss and improvements
loss and covering, without limitation, all tenant improvements and betterments
that Borrower is required to insure pursuant to any Lease on a replacement cost
basis, in amounts of insurance that shall be reasonably required by Lender.
          6.1.7 Flood Insurance. If any portion of the Improvements is located
within an area designated as “flood prone” or a “special flood hazard area” (as
defined under the regulations adopted under the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973), flood insurance shall be
provided, in an amount not less than the maximum limit of coverage available
under the Federal Flood Insurance plan with respect to the Property. Excess
flood insurance coverage shall be required to compensate for any damage or loss
on a replacement basis and shall include business interruption coverage as
reasonably required by Lender. Borrower shall deliver to Lender a FEMA Elevation
Certification prepared by a surveyor if any portion of the Improvements is
located in flood zones A, AR, or V.
          6.1.8 Windstorm Insurance. If the Property is in an area prone to
hurricanes and windstorms, as reasonably determined by Lender, Borrower shall
provide windstorm insurance

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(including coverage for wind driven water), including business interruption
coverage as reasonably required by Lender.
          6.1.9 Terrorism Insurance. So long as the Terrorism Risk Insurance Act
of 2002 (“TRIA”) or a similar statute is in effect, Borrower shall be required
to carry Terrorism Insurance in an amount equal to the lesser of the Loan Amount
and the full replacement cost of the Property plus 12 months of business
interruption coverage. If TRIA or a similar statute is not in effect, then
provided that Terrorism Insurance is commercially available, Borrower shall be
required to carry Terrorism Insurance throughout the Loan term in the same
amount detailed in the preceding sentence; provided that Borrower shall not be
required to spend more than two times the estimated current cost of stand alone
terrorism insurance. Terrorism insurance coverage may be provided under a
blanket policy that is acceptable to Lender.
          6.1.10 Other Insurance. At Lender’s reasonable request, such other
insurance with respect to the Property against loss or damage of the kinds from
time to time customarily insured against and in such amounts as are generally
required by institutional lenders on loans of similar amounts and secured by
properties comparable to, and in the general vicinity of, the Property.
          6.1.11 Ratings of Insurers. Borrower shall maintain the insurance
coverage described in Section 6.1.1 through Section 6.1.8 above, in all cases,
with one or more domestic primary insurers reasonably acceptable to Lender,
having both (a) claims-paying-ability and financial strength ratings by S&P of
not less than “A-” and its equivalent by the other Rating Agencies, and (b) an
Alfred M. Best Company, Inc. rating of “A-” or better and a financial size
category of not less than “X”. All insurers providing insurance required by this
Agreement shall be authorized to issue insurance in the State.
          6.1.12 Form of Insurance Policies; Endorsements. All insurance
policies shall be in such form and with such endorsements as are satisfactory to
Lender (and Lender shall have the right to approve amounts, form, risk coverage,
deductibles, loss payees and insureds). A certificate of insurance with respect
to all of the above-mentioned insurance policies has been delivered to Lender
and originals or certified copies of all such policies shall be delivered to
Lender within five days following Lender’s written request for such certified
policies. All policies shall name Lender as an additional insured, shall provide
that all Proceeds (except with respect to Proceeds of general liability and
workers’ compensation insurance) be payable to Lender as and to the extent set
forth in Section 6.2, and shall contain: (a) a standard “non-contributory
mortgagee” endorsement or its equivalent relating, inter alia, to recovery by
Lender notwithstanding the negligent or willful acts or omissions of Borrower;
(b) a waiver of subrogation endorsement in favor of Lender; (c) an endorsement
providing that no policy shall be impaired or invalidated by virtue of any act,
failure to act, negligence of, or violation of declarations, warranties or
conditions contained in such policy by Borrower, Lender or any other named
insured, additional insured or loss payee, except for the gross negligence or
willful misconduct of Lender knowingly in violation of the conditions of such
policy; (d) an endorsement providing for a deductible per loss of an amount not
more than that which is customarily maintained by prudent owners of properties
with a standard of operation and maintenance comparable to and in the general
vicinity of the Property, but in no event in excess of an amount reasonably
acceptable to Lender; and (e) a provision that such policies shall not be

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canceled, terminated or expire without at least 30 days’ prior written notice to
Lender, in each instance. No insurance policy required hereunder shall include
any so called “terrorist exclusion” or similar exclusion or exception to
insurance coverage relating to the acts of terrorist groups or individuals. Each
insurance policy shall contain a provision whereby the insurer: (i) agrees that
such policy shall not be canceled or terminated, the coverage, deductible, and
limits of such policy shall not be modified, other provisions of such policy
shall not be modified if such policy, after giving effect to such modification,
would not satisfy the requirements of this Agreement, and such policy shall not
be canceled or fail to be renewed, without in each case, at least 30 days prior
written notice to Lender, (ii) waives any right to claim any premiums and
commissions against Lender, provided that the policy need not waive the
requirement that the premium be paid in order for a claim to be paid to the
insured, and (iii) provides that Lender at its option, shall be permitted to
make payments to effect the continuation of such policy upon notice of
cancellation due to non-payment of premiums. In the event any insurance policy
(except for general public and other liability and workers compensation
insurance) shall contain breach of warranty provisions, such policy shall
provide that with respect to the interest of Lender, such insurance policy shall
not be invalidated by and shall insure Lender regardless of (A) any act, failure
to act or negligence of or violation of warranties, declarations or conditions
contained in such policy by any named insured, (B) the occupancy or use of the
Property for purposes more hazardous than permitted by the terms thereof, or
(C) any foreclosure or other action or proceeding taken by Lender pursuant to
any provision of this Agreement.
          6.1.13 Certificates. Borrower shall deliver to Lender annually,
concurrently with the renewal of the insurance policies required hereunder, a
certificate from Borrower’s insurance agent stating that the insurance policies
required to be delivered to Lender pursuant to this Section 6.1 are maintained
with insurers who comply with the terms of Section 6.1.9, setting forth a
schedule describing all premiums required to be paid by Borrower to maintain the
policies of insurance required under this Section 6.1, and stating that Borrower
has paid such premiums. Certificates of insurance with respect to all
replacement policies shall be delivered to Lender not less than 15 Business Days
prior to the expiration date of any of the insurance policies required to be
maintained hereunder which certificates shall bear notations evidencing payment
of applicable premiums. Borrower shall deliver to Lender originals (or certified
copies) of such replacement insurance policies within five days after Lender’s
written request for such originals. If Borrower fails to maintain and deliver to
Lender the certificates of insurance and certified copies or originals required
by this Agreement, upon five Business Days’ prior notice to Borrower, Lender may
procure such insurance, and all costs thereof (and interest thereon at the
Default Rate) shall be added to the Indebtedness. Lender shall not, by the fact
of approving, disapproving, accepting, preventing, obtaining or failing to
obtain any insurance, incur any liability for or with respect to the amount of
insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and Borrower
hereby expressly assumes full responsibility therefor and all liability, if any,
with respect to such matters. Borrower agrees that any replacement insurance
policy required hereunder shall not include any so called “terrorist exclusion”
or similar exclusion or exception to insurance coverage relating to the acts of
terrorist groups or individuals.
          6.1.14 Separate Insurance. Borrower shall not take out separate
insurance contributing in the event of loss with that required to be maintained
pursuant to this Section 6.1 unless such insurance complies with this
Section 6.1.

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          6.1.15 Blanket Policies. The insurance coverage required under this
Section 6.1 may be effected under a blanket policy or policies covering the
Property and other properties and assets not constituting a part of the
Property; provided that any such blanket policy shall otherwise provide the same
protection as would a separate policy insuring only the Property. Borrower shall
deliver to Lender documentation reasonably acceptable to Lender setting forth
(a) the number of properties covered by such policy, (b) the location by city
(if available, otherwise, county) and state of the properties, (c) the average
square footage of the properties (or the aggregate square footage), (d) a brief
description of the typical construction type included in the blanket policy and
(e) such other information as Lender may reasonably request.
     6.2 Condemnation and Insurance Proceeds.
          6.2.1 Notification. Borrower shall promptly notify Lender in writing
upon obtaining knowledge of (a) the institution of any proceedings relating to
any Taking (whether material or immaterial) of, or (b) the occurrence of any
casualty, damage or injury to, the Property or any portion thereof, the
restoration of which is estimated by Borrower in good faith to cost more than
the Casualty Amount. In addition, each such notice shall set forth such good
faith estimate of the cost of repairing or restoring such casualty, damage,
injury or Taking in reasonable detail if the same is then available and, if not,
as soon thereafter as it can reasonably be provided.
          6.2.2 Proceeds. In the event of any Taking of or any casualty or other
damage or injury to the Property, Borrower’s right, title and interest in and to
all compensation, awards, proceeds, damages, claims, insurance recoveries,
causes and rights of action (whether accrued prior to or after the date hereof)
and payments which Borrower may receive or to which Borrower may become entitled
with respect to the Property or any part thereof other than payments received in
connection with any liability or loss of rental value or business interruption
insurance (collectively, “Proceeds”), in connection with any such Taking of, or
casualty or other damage or injury to, the Property or any part thereof are
hereby assigned by Borrower to Lender and, except as otherwise herein provided,
shall be paid to the Lender. Borrower shall, in good faith and in a commercially
reasonable manner, file and prosecute the adjustment, compromise or settlement
of any claim for Proceeds and, subject to Borrower’s right to receive the direct
payment of any Proceeds as herein provided, will cause the same to be paid
directly to Lender to be held and applied in accordance with the provisions of
this Agreement. Except upon the occurrence and during the continuance of a
Monetary Default or an Event of Default, Borrower may settle any insurance claim
with respect to Proceeds which does not exceed the Casualty Amount. Whether or
not a Monetary Default or an Event of Default shall have occurred and be
continuing, Lender shall have the right to approve, such approval not to be
unreasonably withheld, any settlement which might result in any Proceeds in
excess of the Casualty Amount and Borrower shall deliver or cause to be
delivered to Lender all instruments reasonably requested by Lender to permit
such approval. Borrower shall pay all reasonable out-of-pocket costs, fees and
expenses reasonably incurred by Lender (including all reasonable attorneys’ fees
and expenses, the reasonable fees of insurance experts and adjusters and
reasonable costs incurred in any litigation or arbitration), and interest
thereon at the Default Rate to the extent not paid within 10 Business Days after
delivery of a request for reimbursement by Lender, in connection with the
settlement of any claim for Proceeds and seeking and obtaining of any payment on
account thereof in accordance with the foregoing provisions. If any Proceeds are

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received by Borrower and may be retained by Borrower pursuant to this
Section 6.2, such Proceeds shall, until the completion of the related Work, be
held in trust for Lender and shall be segregated from other funds of Borrower to
be used to pay for the cost of the Work in accordance with the terms hereof, and
in the event such Proceeds exceed the Casualty Amount, such Proceeds shall be
forthwith paid directly to and held by Lender in the Proceeds Reserve Account in
trust for Borrower, in each case to be applied or disbursed in accordance with
this Section 6.2. If an Event of Default shall have occurred and be continuing,
or if Borrower fails to file and/or prosecute any insurance claim for a period
of 15 Business Days following Borrower’s receipt of written notice from Lender,
Borrower hereby irrevocably empowers Lender, in the name of Borrower as its true
and lawful attorney-in-fact, to file and prosecute such claim (including
settlement thereof) with counsel satisfactory to Lender and to collect and to
make receipt for any such payment, all at Borrower’s expense (including payment
of interest at the Default Rate for any amounts advanced by Lender pursuant to
this Section 6.2). Notwithstanding anything to the contrary set forth in this
Agreement, however, and excluding situations requiring prepayment of the Note,
to the extent any Proceeds (either singly or when aggregated with all other then
unapplied Proceeds with respect to the Property) do not exceed the Casualty
Amount, such Proceeds are to be paid directly to Borrower to be applied to
restoration of the Property in accordance with the terms hereof (except that
Proceeds paid in respect of the insurance described in Section 6.1.4 shall be
deposited directly to the Holding Account as revenue of the Property).
          6.2.3 Lender to Take Proceeds. If (a) the Proceeds shall equal or
exceed the Principal Amount, (b) a Monetary Default or an Event of Default shall
have occurred and be continuing, (c) a Total Loss with respect to the Property
shall have occurred, (d) the Work is not capable of being completed before the
earlier to occur of the date which is six months prior to the earlier of the
Maturity Date and the date on which the business interruption insurance carried
by Borrower with respect to the Property shall expire (the “Cut-Off Date”),
unless on or prior to the Cut-Off Date the Borrower (i) shall deliver to the
Lender and there shall remain in effect a binding written offer, subject only to
customary conditions, of an Approved Bank or such other financial institution or
investment bank reasonably satisfactory to Lender duly authorized to originate
loans secured by real property located in the State for a loan from such
Approved Bank or such other financial institution or investment bank to the
Borrower in a principal amount of not less than the then Principal Amount and
which shall, in the Lender’s reasonable judgment, enable the Borrower to
refinance the Loan prior to the Maturity Date and (ii) if a Securitization shall
have occurred, shall obtain a Rating Agency Confirmation, (e) the Property is
not capable of being restored substantially to its condition prior to such
Taking or casualty and such incapacity shall have a Material Adverse Effect,
(f) the Tenant under the Operating Lease shall have delivered written notice to
Borrower terminating the Operating Lease as a result of such Taking or casualty
to the Property or (g) Lender determines that upon the completion of the
restoration, the gross cash flow and the net cash flow of the Property will not
be restored to a level sufficient to cover all carrying costs and operating
expenses of the Property, including, without limitation, achieving an Assumed
Debt Service Coverage of at least 1.2 to 1.0, which coverage ratio shall be
determined by Lender in its sole and absolute discretion; then in any such case,
all Proceeds shall be paid over to Lender (if not paid directly to Lender) and
any Proceeds remaining after reimbursement of Lender’s or its agent’s reasonable
out-of-pocket costs and expenses actually incurred in connection with recovery
of any such Proceeds (including, without limitation, reasonable out-of-pocket
administrative costs and inspection fees) shall be applied by

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Lender to prepay the Note in accordance with the provisions of the Loan
Documents, and the balance, if any shall be paid (A) to any Mezzanine Lender to
be applied pursuant to the terms of the Mezzanine Loan Agreement, or (B) if
none, to the Borrower.
          6.2.4 Borrower to Restore.
               (a) Promptly after the occurrence of any damage or destruction to
all or any portion of the Property or a Taking of a portion of the Property,
Borrower shall commence and diligently prosecute, or cause to be commenced and
diligently prosecuted, to completion, subject to Excusable Delays, the repair,
restoration and rebuilding of the Property (in the case of a partial Taking, to
the extent it is capable of being restored) so damaged, destroyed or remaining
after such Taking in full compliance with all material Legal Requirements and
free and clear of any and all Liens except Permitted Encumbrances (such repair,
restoration and rebuilding are sometimes hereinafter collectively referred to as
the “Work”). The plans and specifications shall require that the Work be done in
a first-class workmanlike manner at least equivalent to the quality and
character prior to the damage or destruction (provided, however, that in the
case of a partial Taking, the Property restoration shall be done to the extent
reasonably practicable after taking into account the consequences of such
partial Taking), so that upon completion thereof, the Property shall be at least
equal in value and general utility to the Property prior to the damage or
destruction; it being understood, however, that Borrower shall not be obligated
to restore the Property to the precise condition of the Property prior to any
partial Taking of, or casualty or other damage or injury to, the Property, if
the Work actually performed, if any, or failed to be performed, shall have no
Material Adverse Effect on the value of the Property from the value that the
Property would have had if the same had been restored to its condition
immediately prior to such Taking or casualty. Subject to Borrower’s rights
pursuant to Section 2.3.3 to cause the Property to be released from the Lien of
the Security Instrument, Borrower shall be obligated to restore the Property
suffering a casualty or which has been subject to a partial Taking in accordance
with the provisions of this Section 6.2 at Borrower’s sole cost and expense
whether or not the Proceeds shall be sufficient, provided that, if applicable,
the Proceeds shall be made available to Borrower by Lender in accordance with
this Agreement.
               (b) If Proceeds are not required to be applied toward payment of
the Indebtedness pursuant to the terms hereof, then Lender shall make the
Proceeds which it is holding pursuant to the terms hereof (after payment of any
reasonable out-of-pocket expenses actually incurred by Lender in connection with
the collection thereof plus interest thereon at the Default Rate (from the date
advanced through the date of reimbursement) to the extent the same are not paid
within 10 Business Days after request for reimbursement by Lender) available to
Borrower for payment of or reimbursement of Borrower’s or the applicable
Tenant’s expenses incurred with respect to the Work, upon the terms and subject
to the conditions set forth in paragraphs (i), (ii) and (iii) below and in
Section 6.2.5:
                    (i) at the time of loss or damage or at any time thereafter
while Borrower is holding any portion of the Proceeds, there shall be no
continuing Monetary Default or Event of Default;
                    (ii) if, at any time, the estimated cost of the Work (as
estimated by the Independent Architect referred to in clause (iii) below) shall
exceed the Proceeds (a

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“Deficiency”) and for so long as a Deficiency shall exist, Lender shall not be
required to make any Proceeds disbursement to Borrower unless Borrower (within a
reasonable period of time after receipt of such estimate), at its election,
either deposits with or delivers to Lender (A) Cash and Cash Equivalents or a
Letter or Letters of Credit in an amount equal to the estimated cost of the Work
less the Proceeds available, or (B) such other evidence of Borrower’s ability to
meet such excess costs and which is satisfactory to Lender and, following a
Securitization, the Rating Agencies;
                    (iii) Each of Lender and the Independent Architect shall
have reasonably approved the plans and specifications for the Work and any
change orders in connection with such plans and specifications; and
                    (iv) Lender shall, within a reasonable period of time prior
to request for initial disbursement, be furnished with an estimate of the cost
of the Work accompanied by an Independent Architect’s certification as to such
costs and appropriate plans and specifications for the Work. Borrower shall
restore all Improvements such that when they are fully restored and/or repaired,
such Improvements and their contemplated use fully comply with all applicable
Legal Requirements including zoning, environmental and building laws, codes,
ordinances and regulations.
          6.2.5 Disbursement of Proceeds.
               (a) Disbursements of the Proceeds in Cash or Cash Equivalents to
Borrower hereunder shall be made from time to time (but not more frequently than
once in any month) by Lender but only for so long as no Monetary Default or
Event of Default shall have occurred and be continuing, as the Work progresses
upon receipt by Lender of (i) an Officer’s Certificate dated not more than 10
Business Days prior to the application for such payment, requesting such payment
or reimbursement and describing the Work performed that is the subject of such
request, the parties that performed such Work and the actual cost thereof, and
also certifying that such Work and materials are or, upon disbursement of the
payment requested to the parties entitled thereto, will be free and clear of
Liens other than Permitted Encumbrances, (ii) evidence reasonably satisfactory
to Lender that (A) all materials installed and work and labor performed in
connection with such Work have been paid for in full (or will be fully paid with
the proceeds so disbursed) and (B) there exists no notices of pendency, stop
orders, mechanic’s liens or notices of intention to file same (unless the same
is required by State law as a condition to the payment of a contractor) or any
liens or encumbrances of any nature whatsoever on the Property arising out of
the Work which have not been either fully bonded to the satisfaction of Lender
or discharged of record or in the alternative, fully insured to the satisfaction
of Lender by the Title Company that issued the Title Policy and (iii) an
Independent Architect’s certificate certifying performance of the Work together
with an estimate of the cost to complete the Work. No payment made prior to the
final completion of the Work, as certified by the Independent Architect, except
for payment made to contractors whose Work shall have been fully completed and
from which final lien waivers have been received, shall exceed 90% of the value
of the Work performed and materials furnished and incorporated into the
Improvements from time to time, and at all times the undisbursed balance of said
Proceeds together with all amounts deposited, bonded, guaranteed or otherwise
provided for pursuant to Section 6.2.4(b) above, shall be at least sufficient to
pay for the estimated cost of completion of the Work; final payment of all
Proceeds

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remaining with Lender shall be made upon receipt by Lender of a certification by
an Independent Architect, as to the completion of the Work substantially in
accordance with the submitted plans and specifications, final lien releases, and
the filing of a notice of completion and the expiration of the period provided
under the law of the State for the filing of mechanics’ and materialmens’ liens
which are entitled to priority as to other creditors, encumbrances and
purchasers, as certified pursuant to an Officer’s Certificate, and delivery of a
certificate of occupancy with respect to the Work, or, if not applicable, an
Officer’s Certificate to the effect that a certificate of occupancy is not
required.
               (b) If, after the Work is completed in accordance with the
provisions hereof and Lender receives evidence that all costs of completion have
been paid, there are excess Proceeds, Lender shall (i) if an Event of Default
shall have occurred and be continuing, apply such excess Proceeds with respect
to the Taking of or casualty to the Property to the payment or prepayment of all
or any portion of the Indebtedness secured hereby without penalty or premium and
any balance thereof, shall be paid over to paid (A) to the holders of any
Mezzanine Loan and holder of any New Mezzanine Loan (in such order of priority
as shall be set forth in any separate agreement between such holders and Lender,
and absent such agreement, in the order determined by Lender), and (B) if none,
to the Borrower, and (ii) so long as a Lockbox Event has not occurred and is
continuing, pay the excess Proceeds with respect to the Taking of or casualty to
the Property (A) to the holders of any Mezzanine Loan and holder of any New
Mezzanine Loan (in such order of priority as shall be set forth in any separate
agreement between such holders and Lender, and absent such agreement, in the
order determined by Lender), and (B) if none, to the Borrower.
VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS
     7.1 Borrower to Pay Impositions and Other Charges. Borrower shall pay all
Impositions now or hereafter levied or assessed or imposed against the Property
or any part thereof prior to the imposition of any interest, charges or expenses
for the non-payment thereof and shall pay all Other Charges on or before the
date they become delinquent or late charges may be imposed thereon. To the
extent not expressly identified in the Annual Budget, Borrower shall deliver to
Lender annually, no later than 15 Business Days after the first day of each
Fiscal Year, and shall update as new information is received, a schedule
describing all Impositions, payable or estimated to be payable during such
Fiscal Year attributable to or affecting the Property or Borrower. Subject to
Borrower’s right of contest set forth in Section 7.3, as set forth in the next
two sentences and provided that there are sufficient funds available in the Tax
Reserve Account, Lender, on behalf of Borrower, shall pay all Real Estate Taxes
and Other Charges which are attributable to or affect the Property or Borrower,
prior to the date such Real Estate Taxes or Other Charges shall become
delinquent or late charges may be imposed thereon, directly to the applicable
taxing authority with respect thereto. Lender shall, or Lender shall direct the
Cash Management Bank to, pay to the taxing authority such amounts to the extent
funds in the Tax Reserve Account are sufficient to pay such Real Estate Taxes
and Other Charges. Nothing contained in this Agreement or the Security
Instrument shall be construed to require Borrower to pay any tax, assessment,
levy or charge imposed on Lender in the nature of a franchise, capital levy,
estate, inheritance, succession, income or net revenue tax.

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     7.2 No Liens. Subject to its right of contest set forth in Section 7.3,
Borrower shall at all times keep, or cause to be kept, the Property free from
all Liens (other than Permitted Encumbrances) and shall pay when due and payable
(or bond over) all claims and demands of mechanics, materialmen, laborers and
others which, if unpaid, might result in or permit the creation of a Lien on the
Property or any portion thereof and shall in any event cause the prompt, full
and unconditional discharge of all Liens imposed on or against the Property or
any portion thereof within 45 days after receiving written notice of the filing
(whether from Lender, the lienor or any other Person) thereof. Borrower shall do
or cause to be done, at the sole cost of Borrower, everything reasonably
necessary to fully preserve the first priority of the Lien of the Security
Instrument against the Property, subject to the Permitted Encumbrances. Upon the
occurrence and during the continuance of an Event of Default with respect to its
Obligations as set forth in this Article VII, Lender may (but shall not be
obligated to) make such payment or discharge such Lien, and Borrower shall
reimburse Lender on demand for all such advances pursuant to Section 19.12
(together with interest thereon at the Default Rate).
     7.3 Contest. Nothing contained herein shall be deemed to require Borrower
to pay, or cause to be paid, any Imposition, Permitted Debt or to satisfy any
Lien, or to comply with any Legal Requirement or Insurance Requirement, so long
as Borrower is in good faith, and by proper legal proceedings, where
appropriate, diligently contesting the validity, amount or application thereof,
provided that in each case, at the time of the commencement of any such action
or proceeding, and during the pendency of such action or proceeding (a) no Event
of Default shall exist and be continuing hereunder, (b) Borrower shall keep
Lender informed of the status of such contest at reasonable intervals, (c) if
Borrower is not providing security as provided in clause (d) below, adequate
reserves with respect thereto are maintained on Borrower’s books in accordance
with GAAP or in the Tax Reserve Account or Insurance Reserve Account, as
applicable, (e) either such contest operates to suspend collection or
enforcement as the case may be, of the contested Imposition, Lien or Legal
Requirement and such contest is maintained and prosecuted continuously and with
diligence or the Imposition or Lien is bonded, (f) in the case of any Insurance
Requirement, the failure of Borrower to comply therewith shall not impair the
validity of any insurance required to be maintained by Borrower under Article VI
or the right to full payment of any claims thereunder, and (g) in the case of
Impositions, Permitted Debt and Liens which are not bonded in excess of
$2,000,000 individually, or in the aggregate, during such contest, Borrower,
shall deposit with or deliver to Lender either Cash and Cash Equivalents or a
Letter or Letters of Credit in an amount equal to 125% of (i) the amount of
Borrower’s obligations being contested plus (ii) any additional interest,
charge, or penalty arising from such contest. Notwithstanding the foregoing, the
creation of any such reserves or the furnishing of any bond or other security,
Borrower promptly shall comply with any contested Legal Requirement or Insurance
Requirement or shall pay any contested Imposition or Lien, and compliance
therewith or payment thereof shall not be deferred, if, at any time the Property
or any portion thereof shall be, in Lender’s reasonable judgment, in imminent
danger of being forfeited or lost or Lender is likely to be subject to civil or
criminal damages as a result thereof. If such action or proceeding is terminated
or discontinued adversely to Borrower, Borrower shall deliver to Lender
reasonable evidence of Borrower’s compliance with such contested Imposition,
Lien, Legal Requirements or Insurance Requirements, as the case may be.

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VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS
     8.1 Restrictions on Transfers.
          8.1.1 General. Borrower acknowledges that Lender has examined and
relied on the experience of Borrower, General Partner, their respective members,
principals and beneficial owners in owning and operating properties and other
assets such as the Property in agreeing to make the Loan, and will continue to
rely on Borrower’s ownership of the Property as a means of maintaining the value
of the Property as security for repayment of the Indebtedness. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Property so as to ensure that, should Borrower default in the repayment of the
Indebtedness, Lender can recover the Indebtedness by a sale of the Property.
          8.1.2 Restriction. Unless such action is expressly permitted by the
provisions of this Article VIII, Borrower shall not, and shall not permit any
other Person holding any direct or indirect ownership interest in Borrower or
the Property to, except with the prior written consent of Lender, (a) Transfer
all or any part of the Property (other than as provided in Section 5.1.24 above
or Section 8.8 below), (b) incur any Debt other than Permitted Debt or Permitted
Encumbrances, or (c) Transfer any equity interests in Borrower, General Partner
or both other than in connection with the exercise of remedies by the holder of
any Mezzanine Loan or New Mezzanine Loan.
     8.2 Sale of Building Equipment. Borrower may Transfer or dispose of
Building Equipment which is being replaced or which is no longer necessary in
connection with the operation of the Property free from the Lien of the Security
Instrument provided that such Transfer or disposal will not have a Material
Adverse Effect on the value of the Property taken as a whole, will not
materially impair the utility of the Property, and will not result in a
reduction or abatement of, or right of offset against, the Rents payable under
any Lease, in either case as a result thereof, and provided further that any new
Building Equipment acquired by Borrower (and not so disposed of) shall be
subject to the Lien of the Security Instrument. Lender shall, from time to time,
upon receipt of an Officer’s Certificate requesting the same and confirming
satisfaction of the conditions set forth above, execute a written instrument in
form reasonably satisfactory to Lender to confirm that such Building Equipment
which is to be, or has been, sold or disposed of is free from the Lien of the
Security Instrument.
     8.3 Immaterial Transfers and Easements, etc Borrower may, without the
consent of Lender, (a) make immaterial Transfers of portions of the Property to
Governmental Authorities for dedication or public use (subject to the provisions
of Section 6.2) or, portions of the Property to third parties for the purpose of
erecting and operating additional structures whose use is integrated with the
use of the Property, and (b) grant easements, restrictions, covenants,
reservations and rights of way (or modifications thereto) in the ordinary course
of business for access, water and sewer lines, telephone and telegraph lines,
electric lines or other utilities or for other similar purposes, provided that
no such Transfer, conveyance or encumbrance set forth in the foregoing clauses
(a) and (b) shall materially impair the utility and operation of the Property or
have a Material Adverse Effect on the value of the Property taken as a whole. In
connection with any Transfer permitted pursuant to this Section 8.3, Lender
shall execute and deliver any instrument reasonably necessary or appropriate, in
the case of the Transfers referred to in clause

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(a) above, to release the portion of the Property affected by such Taking or
such Transfer from the Lien of the Security Instrument or, in the case of clause
(b) above, to subordinate the Lien of the Security Instrument to such easements,
restrictions, covenants, reservations and rights of way or other similar grants
upon receipt by Lender of:
                    (i) 30 days prior written notice thereof;
                    (ii) a copy of the instrument or instruments of Transfer;
                    (iii) an Officer’s Certificate stating (A) with respect to
any Transfer, the consideration, if any, being paid for the Transfer and
(B) that such Transfer does not materially impair the utility and operation of
the Property, materially reduce the value of the Property or have a Material
Adverse Effect; and
                    (iv) reimbursement of all of Lender’s reasonable costs and
expenses incurred in connection with such Transfer (for the avoidance of any
doubt, no fees of any nature shall be assessed by Lender in connection with this
Section 8.3).
     8.4 Indebtedness.
          8.4.1 Prohibition. Borrower shall not incur, create or assume any Debt
or incur any liabilities without the consent of Lender; provided, however, that
if no Event of Default shall have occurred and be continuing, Borrower may,
without the consent of Lender, incur, create or assume Permitted Debt.
          8.4.2 Preferred Equity. Except for the period following Lender’s
delivery of written notice of its intent to Securitize all or any portion of the
Loan (and until the closing or Lender’s abandonment of such Securitization), at
any time following the Closing Date, Borrower and Tenant shall each have the
right to issue a single class of limited partnership interests or stock, as
applicable, having a preferred right of payment over other limited partnership
interests or stock, as applicable (such limited partnership interests or stock,
the “Preferred Equity”); provided that each of the following conditions is
satisfied: (a) such Preferred Equity is not evidenced by a note and has no
characteristics that would constitute indebtedness for borrowed money; (b) has a
maturity or redemption date that extends at least one year after the Maturity
Date; and (c) is otherwise on terms and in a structure satisfactory to Lender.
          8.4.3 Additional Mezzanine Loan. Except for the period following
Lender’s delivery of written notice of its intent to Securitize all or any
portion of the Loan (and until the closing or Lender’s abandonment of such
Securitization), at any time following the Closing Date Borrower may incur
additional Debt (each, a “Mezzanine Loan”) in the form of one more additional
mezzanine loans; provided that each of the following conditions is satisfied to
Lender’s reasonable satisfaction:
               (a) Borrower gives Lender at least 30 days prior written notice
of the closing of such Mezzanine Loan, which notice shall specify the
anticipated closing date, the terms for the Mezzanine Loan (including principal
amount, payment terms, maturity date, description of the collateral) and
reasonably identify the expected holders of the Mezzanine Loan;

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               (b) Borrower delivers an Officer’s Certificate to Lender
(accompanied by reasonable supporting calculations and documentation)
demonstrating that the Operating Income (after giving effect to the incremental
incentive fee payable to Manager under the Management Agreement following the
loss of the First Owner’s Priority (as defined in the Management Agreement)) on
a trailing 12-month basis is not less than $14,500,000;
               (c) Borrower delivers an Officer’s Certificate to Lender
(accompanied by reasonable supporting calculations and documentation)
demonstrating that the aggregate amount of the Mezzanine Loan plus the Principal
Amount of the Loan plus the amount of any New Mezzanine Loan plus the amount of
any Preferred Equity, does not, in the aggregate, result in a “Loan-to-Value”
ratio greater than 65.0%;
               (d) Borrower has delivered to Lender true and complete copies of
all loan documents (and any so called “Eagle 9” or “UCCPlus” insurance policy)
to be executed and delivered in connection with such Mezzanine Loan, and the
terms and conditions thereof are commercially reasonable in Lender’s opinion,
and following a Securitization, the opinion of the Rating Agencies, including
providing for a maturity date that is co-terminus with the Maturity Date;
               (e) Borrower has delivered to Lender true and complete copies of
the organizational documents for each special purpose, bankruptcy remote entity
created to be a borrower under such Mezzanine Loan (each, a “Mezzanine
Borrower”), each Mezzanine Borrower and its organizational documents shall
demonstrate that such entity is a Single Purpose Entity, and the organizational
documents of Borrower and General Partner (and if in existence, any Mezzanine
Borrower or New Mezzanine Borrower) shall be amended and modified as necessary
or required to reflect the formation of such Mezzanine Borrower;
               (f) prior to the closing of the Mezzanine Loan, Borrower shall
execute and deliver such amendments to the Loan Documents (and any documents
evidencing the New Mezzanine Loan, if any) as are necessary or advisable in
connection with the creation of such Mezzanine Loan or as may be reasonably be
required by Lender or, following a Securitization, any Rating Agency, in each
case, in form and substance reasonably satisfactory to Lender and the Rating
Agencies, as applicable;
               (g) prior to the closing of the Mezzanine Loan, Borrower shall
deliver to Lender opinions of legal counsel with respect to due execution,
authority and enforceability of documents evidencing the Mezzanine Loan, and any
amendments of the Loan Documents and documents evidencing the New Mezzanine
Loan, if any, and a substantive non-consolidation opinion with respect to the
Mezzanine Loan, each as reasonably acceptable to Lender and, following a
Securitization, the Rating Agencies.
               (h) Borrower delivers an Officer’s Certificate to Lender
(accompanied by reasonable supporting calculations and documentation)
demonstrating that the holders of the Mezzanine Loan are each (i) a Qualified
Institutional Holder or (ii) an Affiliate of Borrower if (A) the entire direct
and indirect interest (economic or otherwise) of Borrower, General Partner,
Tenant, Guarantor, Parent and each of their respective Affiliates in the
Property (other than, in each case, as holder of such Mezzanine Loan) was
subject to a Transfer effected in accordance

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with Section 8.5.2 or Section 8.7 hereof, and (B) such Mezzanine Loan was
originated in connection with the Transfer described in clause (A);
               (i) On or prior to the closing of the Mezzanine Loan, the holders
thereof have executed and delivered an intercreditor agreement with Lender in
form and substance acceptable to Lender and, following any Securitization, the
Rating Agencies;
               (j) on the closing date of the Mezzanine Loan, no event of
Default or Lockbox Event has occurred and is continuing;
               (k) following a Securitization, Borrower shall have delivered a
Rating Agency Confirmation; and
               (l) Borrower shall pay all of Lender’s fees, costs and expenses,
including, without limitation, reasonable attorneys’ fees and costs, actually
incurred by Lender in connection with the foregoing.
     8.5 Permitted Equity Transfers.
          8.5.1 Less than 49%. A Transfer (but not a pledge or encumbrance) of
no more than 49% (in the aggregate of all Transfers) of the direct or indirect
equity interests in Borrower, General Partner or both shall be permitted without
Lender’s consent, provided (a) Lender receives 30 days’ prior written notice
thereof, (b) such Transfer does not result in a change of Control of Borrower or
General Partner, (c) immediately prior to such Transfer, no Event of Default
shall have occurred and be continuing, (d) a Qualified Manager shall continue to
manage the Property after such Transfer, (e) such Transfer is either to one or
more Affiliates of Borrower and/or Qualified Transferees, (f) prior to such
Transfer, Lender receives all documentation and opinion letters reasonably
required by Lender, including, but not limited to, an Additional
Non-Consolidation Opinion in a form reasonably satisfactory to Lender, and
(g) Borrower shall pay all of Lender’s fees, costs and expenses, including,
without limitation, reasonable attorneys’ fees and costs, actually incurred by
Lender in connection with such Transfer.
          8.5.2 More than 49%. A Transfer (but not a pledge or encumbrance) of
more than 49% (in the aggregate of all Transfers) of the direct or indirect
equity interests in Borrower, General Partner or both shall be permitted without
Lender’s consent; provided Borrower satisfies the requirements of (a)
Section 8.5.1(a), (c), (d), (e), (f) and (g) above, and (b) if the Loan is the
subject of a Securitization, delivery to Lender of a Rating Agency Confirmation.
Transfers (but not a pledge or encumbrance) of more than 49% (in the aggregate
of all Transfers) of the equity interests in Borrower, General Partner or both
to Persons who are neither Affiliates of Borrower nor Qualified Transferees
shall require (A) Lender’s prior written consent, (B) if the Loan is the subject
of a Securitization, the delivery to Lender of a Rating Agency Confirmation,
(C) Borrower’s satisfaction with the requirements of Section 8.5.1(a), (c), (d),
(f) and (g) above. Transfers (including a pledge or encumbrance) of more than
49% (in the aggregate of all Transfers) of the equity interests in Borrower,
General Partner or both effected in connection with the origination of a
Mezzanine Loan or New Mezzanine Loan in accordance with the terms of this
Agreement shall not require the consent of Lender under this Section 8.5.2;
provided that

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the foregoing shall not eliminate or otherwise reduce Lender’s rights elsewhere
set forth in the Loan Documents with respect to such Mezzanine Loan or New
Mezzanine Loan.
          8.5.3 Exceptions. Anything in this Article VIII to the contrary
notwithstanding, there shall be no restriction on any Transfers, issuances,
repurchases, conversions or redemptions of (a) the capital stock of Parent,
(b) the limited partnership interests of Guarantor (or the general or limited
partners of Guarantor), (c) any pledge or encumbrance of any capital stock or
limited partnership interests of Parent, Guarantor, Tenant or Ashford TRS
Corporation, a Delaware corporation, as applicable, in connection with any
corporate level financing of Parent or Guarantor or (d) in connection with a
Transfer resulting from the enforcement of remedies by any holder of the New
Mezzanine Loan or Mezzanine Loan, as applicable.
     8.6 Deliveries to Lender. Not less than 30 days prior to the closing of any
transaction subject to the provisions of this Article VIII, Borrower shall
deliver to Lender an Officer’s Certificate describing the proposed transaction
and stating that such transaction is permitted by this Article VIII, together
with any appraisal or other documents upon which such Officer’s Certificate is
based. In addition, Borrower shall provide Lender with copies of executed deeds
or other similar closing documents within 10 Business Days after such closing.
     8.7 Loan Assumption. In connection with any Transfer of the Property for
which Lender’s consent has been obtained pursuant to the provisions of this
Article VIII, which consent shall be granted or denied in Lender’s sole and
absolute discretion, Borrower shall have the right to request Lender’s consent,
which consent shall not be unreasonably withheld, to the assumption of the Loan
by the purchaser of the Property; provided that in connection with a Transfer of
Borrower’s fee interest in the Property to a Qualified Transferee or any
Transfer effected in accordance with Section 8.5.2 hereof, Lender’s consent
shall not be required for either the assumption of the Loan or such Transfer of
Borrower’s fee interest in the Property. Any such assumption of the Loan shall
be conditioned upon, among other things, (a) if after a Securitization, the
delivery of a Rating Agency Confirmation, (b) the delivery of financial
information, including, without limitation, financial statements, for such
purchaser and the direct and indirect owners such purchaser, (c) the delivery of
evidence that the purchaser is a Single Purpose Entity, (d) the execution and
delivery of all documentation reasonably requested by Lender, (e) the delivery
of Opinions of Counsel requested by Lender, including, without limitation, a
Non-Consolidation Opinion with respect to the purchaser and other entities
identified by Lender or, if after a Securitization, requested by the Rating
Agencies and opinions with respect to the valid formation, due authority and
good standing of the purchaser and any additional pledgors and the continued
enforceability of the Loan Documents and any other matters requested by Lender,
(f) the delivery of an endorsement to the Title Policy in form and substance
acceptable to Lender, insuring the lien of the Security Instrument, as assumed,
subject only to the Permitted Encumbrances, (g) the payment of an assumption fee
equal to one half of one percent (0.5%) of the Principal Amount, and (h) the
payment of all of Lender’s fees, costs and expenses, including, without
limitation, reasonable attorneys’ fees and costs, actually incurred by Lender in
connection with such assumption.

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     8.8 Leases.
          8.8.1 New Leases and Lease Modifications. Except as provided in
Section 5.1.24 above, Borrower shall not (a) following the Closing Date, enter
into or consent to the execution and deliver of any Lease to the extent consent
of Borrower or Tenant is required under the Management Agreement or (b) consent
to the extent consent of Borrower or Tenant is required under the Management
Agreement to the assignment, amendment or modification of any Lease (unless
required to do so by the terms of such Lease) (any such action referred to in
clauses (a) and (b) being referred to herein as a “Lease Action”) without the
prior written consent of Lender, which consent shall not be unreasonably
withheld, delayed or conditioned. Any Lease Action for which Lender’s consent
was not obtained shall be void ab initio. Any Lease Action that requires
Lender’s consent shall be delivered to Lender for approval not less than 10
Business Days prior to the effective date of such proposed Lease Action. If
Lender fails to approve or object to the proposed Lease Action within such
10-Business Day period, then Borrower shall send a second notice for approval of
such Lease Action to Lender containing a legend clearly marked in bold face
type, underlined, in all capital letters “REQUEST DEEMED APPROVED IF NO RESPONSE
WITHIN 10 BUSINESS DAYS”. If Lender shall fail to respond to such second request
prior to the expiration of such second 10-Business Day period, then Lender shall
be deemed to have approved the proposed Lease Action. Upon the execution of the
proposed Lease or the assignment, amendment or modification thereof, as
applicable, Borrower shall deliver to Lender an executed copy of proposed Lease
or the assignment, amendment or modification thereof. In all cases, the proposed
Lease or the assignment, amendment or modification shall be subordinate in all
respects to the Lien of the Security Instrument. If requested by Lender,
Borrower shall (and shall cause the tenant under such Lease) to execute, deliver
and acknowledge a separate agreement evidencing the subordination of such Lease
to the Lien of the Security Instrument.
          8.8.2 Security Deposits. All security or other deposits of tenants
under any Lease, including the Tenant under the Operating Lease (such security
or other deposits, the “Security Deposits”), to the extent in the possession or
control of Borrower, and Operating Lease shall be treated as trust funds and
shall not be commingled with any other funds of Borrower, and such deposits
shall be deposited, upon receipt of the same by Borrower in a separate trust
account maintained by Borrower expressly for such purpose. Within five Business
Days after written request by Lender, Borrower shall furnish to Lender
reasonably satisfactory evidence of compliance with this Section 8.8.2, together
with a statement of all amounts deposited pursuant to any Lease or the Operating
Lease (identifying the amount and Person on whose behalf such amounts are held)
and the location and account number of the account in which such security
deposits are held.
IX. INTENTIONALLY OMITTED
X. MAINTENANCE OF PROPERTY; ALTERATIONS
     10.1 Maintenance of Property. Borrower shall keep and maintain, or cause to
be kept and maintained, the Property and every part thereof in good condition
and repair, subject to ordinary wear and tear, and, subject to Excusable Delays
and the provisions of this Agreement with respect to damage or destruction
caused by casualty events or Takings, shall not permit or

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commit any waste, impairment, or deterioration of any portion of the Property in
any material respect. Borrower further covenants to do all other acts which from
the character or use of the Property may be reasonably necessary to protect the
security hereof, the specific enumerations herein not excluding the general.
Borrower shall not remove or demolish, and shall not permit any Person to remove
or demolish, any Improvement on the Property except as the same may be necessary
in connection with an Alteration or a restoration in connection with a Taking or
casualty, or as otherwise expressly permitted herein, in each case in accordance
with the terms and conditions hereof.
     10.2 Conditions to Alteration. Provided that no Event of Default shall have
occurred and be continuing hereunder, Borrower shall have the right, without
Lender’s consent, to undertake any alteration, improvement, demolition or
removal of the Property or any portion thereof (any such alteration,
improvement, demolition or removal, an “Alteration”) so long as (a) Borrower
provides Lender with prior written notice of the Alteration if it constitutes a
Material Alteration, and (b) such Alteration is undertaken in accordance with
the applicable provisions of this Agreement and the other Loan Documents, is not
prohibited by any relevant REAs and the Operating Lease and shall not, upon
completion, have a Material Adverse Effect on the value, use or operation of the
Property taken as a whole or otherwise. Any Material Alteration shall be
conducted under the supervision of an Independent Architect and, in connection
with any Material Alteration, Borrower shall deliver to Lender, for information
purposes only and not for approval by Lender, the detailed plans and
specifications and cost estimates therefor, prepared by such Independent
Architect, as well as an Officer’s Certificate stating that such Alteration will
involve an estimated cost of not more than the Threshold Amount for Alterations
at the Property. Such plans and specifications may be revised at any time and
from time to time by such Independent Architect; provided that material
revisions of such plans and specifications are filed with Lender, for
information purposes only. All work done in connection with any Alteration shall
be performed with due diligence in a good and workmanlike manner, all materials
used in connection with any Alteration shall not be less than the standard of
quality of the materials currently used at the Property and all materials used
shall be in accordance with all applicable material Legal Requirements and
Insurance Requirements.
     10.3 Costs of Alteration. Notwithstanding anything to the contrary
contained in this Article X, no Material Alteration or Alteration which when
aggregated with all other Alterations (other than Material Alterations) then
being undertaken by Borrower exceeds the Threshold Amount, shall be performed by
or on behalf of Borrower unless Borrower shall have delivered to Lender (a) Cash
and Cash Equivalents and/or a Letter of Credit as security in an amount not less
than the estimated cost of the Material Alteration or the Alterations minus the
Threshold Amount (as set forth in the Independent Architect’s written estimate
referred to above), or (b) a completion guaranty, in form and substance
acceptable to Lender, from a credit-worthy Person reasonably acceptable to
Lender (it being agreed that Guarantor shall be an acceptable guarantor so long
as at such time Guarantor’s net worth equals or exceeds five times the
anticipated aggregate cost of such Material Alteration). Any Cash and Cash
Equivalents and/or a Letter of Credit delivered as such security shall be
reduced on any given date (but no more frequently than monthly) to the
Independent Architect’s written estimate of the cost to complete the Material
Alteration or the Alterations (including any retainage), free and clear of
Liens, other than Permitted Encumbrances. Costs which are subject to retainage
(which in no event shall be less than 5% in the aggregate) shall be treated as
due and payable and unpaid from the date they

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would be due and payable but for their characterization as subject to retainage.
In the event that any Material Alteration or Alteration shall be made in
conjunction with any restoration with respect to which Borrower shall be
entitled to withdraw Proceeds pursuant to Section 6.2, the amount of the Cash
and Cash Equivalents and/or Letter of Credit to be furnished pursuant hereto
need not exceed the aggregate cost of such restoration and such Material
Alteration or Alteration (as estimated by the Independent Architect), less the
sum of the amount of any Proceeds which Borrower may be entitled to withdraw
pursuant to Section 6.2 and which are held by Lender in accordance with
Section 6.2. Payment or reimbursement of Borrower’s expenses incurred with
respect to any Material Alteration or any such Alteration shall be accomplished
upon the terms and conditions specified in Section 6.2.
     At any time after substantial completion of any Material Alteration or any
such Alteration in respect of which Cash and Cash Equivalents and/or a Letter of
Credit is deposited pursuant hereto, the whole balance of any Cash and Cash
Equivalents so deposited by Borrower with Lender and then remaining on deposit
(together with earnings thereon), as well as all retainage, may be withdrawn by
Borrower and shall be paid by Lender to Borrower, and any other Cash and Cash
Equivalents and/or a Letter of Credit so deposited or delivered shall, to the
extent it has not been called upon, reduced or theretofore released, be released
to Borrower, within 10 days after receipt by Lender of an application for such
withdrawal and/or release together with an Officer’s Certificate, and signed
also (as to the following clause (a)) by the Independent Architect, setting
forth in substance as follows:
               (a) that the Material Alteration or Alteration in respect of
which such Cash and Cash Equivalents and/or a Letter of Credit was deposited has
been substantially completed in all material respects substantially in
accordance with any plans and specifications therefor previously filed with
Lender under Section 10.2 and that, if applicable, a certificate of occupancy
has been issued with respect to such Material Alteration or Alteration by the
relevant Governmental Authority or, if not applicable, that a certificate of
occupancy is not required; and
               (b) that to the knowledge of the certifying Person all amounts
which Borrower is or may become liable to pay in respect of such Material
Alteration or Alteration through the date of the certification have been paid in
full or adequately provided for or are being contested in accordance with
Section 7.3 and that lien waivers have been obtained from the general contractor
and major subcontractors performing such Material Alterations or Alterations (or
such waivers are not customary and reasonably obtainable by prudent managers in
the area where the Property is located).
XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION
     11.1 Books and Records. Borrower shall keep and maintain on a fiscal year
basis proper books and records separate from any other Person, in which accurate
and complete entries shall be made of all dealings or transactions of or in
relation to the Note, the Property and the business and affairs of Borrower
relating to the Property which shall reflect all items of income and expense in
connection with the operation on an individual basis of the Property and in
connection with any services, equipment or furnishings provided in connection
with the operation of the Property, in accordance with GAAP. Lender and its
authorized representatives

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shall have the right at reasonable times and upon reasonable notice to examine
the books and records of Borrower relating to the operation of the Property and
to make such copies or extracts thereof as Lender may reasonably require.
     11.2 Financial Statements.
          11.2.1 Quarterly Reports. Not later than 45 days following the end of
each fiscal quarter, Borrower shall deliver to Lender unaudited financial
statements for the Property, internally prepared on a GAAP basis including a
balance sheet and profit and loss statement as of the end of such quarter and
for the corresponding quarter of the previous year, a statement of Net Operating
Income for such quarter, and a comparison of the year to date results with
(a) the results for the same period of the previous year, and (b) the Annual
Budget for such period and the Fiscal Year. Such statements for each quarter
shall be accompanied by an Officer’s Certificate certifying to the best of the
signer’s knowledge, (i) that such statements fairly represent the financial
condition and results of operations of for the Property, (ii) that as of the
date of such Officer’s Certificate, no Default is known (after due inquiry) to
exist under this Agreement, the Note or any other Loan Document or, if so,
specifying the nature and status of each such Default and the action then being
taken by Borrower or proposed to be taken to remedy such Default, and (iii) that
as of the date of each Officer’s Certificate, no litigation exists involving the
Property in which the amount involved is $500,000 (in the aggregate) or more in
which all or substantially all of the potential liability is not covered by
insurance, or, if so, specifying such litigation and the actions being taking in
relation thereto. Such financial statements shall contain such other information
as shall be reasonably requested by Lender for purposes of calculations to be
made by Lender pursuant to the terms hereof.
          11.2.2 Annual Reports. Not later than 90 days after the end of each
Fiscal Year, Borrower shall deliver to Lender unaudited (or if a Securitization
has occurred, audited if requested by Lender) financial statements for the
Property certified by an Independent Accountant in accordance with GAAP,
including a balance sheet as of the end of such Fiscal Year, a statement of Net
Operating Income for such Fiscal Year, and stating in comparative form the
figures for the previous Fiscal Year and the Annual Budget for such Fiscal Year,
as well copies of all federal income tax returns to be filed (or evidence of
extension of such tax returns, and promptly upon filing such returns, copies
shall be provided to Lender). Such annual financial statements shall also be
accompanied by an Officer’s Certificate in the form required pursuant to Section
11.2.1.
          11.2.3 Capital Expenditures Summaries. Borrower shall, within 90 days
after the end of each Fiscal Year, deliver to Lender an annual summary of any
and all capital expenditures made at the Property during the prior 12 month
period.
          11.2.4 Management Agreement. Borrower shall deliver to Lender, within
10 Business Days of the receipt thereof by Borrower or Tenant, a copy of all
reports, notices or other documents prepared or provided by Manager pursuant to
the Management Agreement, including, without limitation, the Annual Budget and
any inspection reports.
          11.2.5 Annual Budget. Borrower shall deliver to Lender the Annual
Budget for Lender’s approval (a) with respect to the Property, within five
Business Day following receipt of

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the initial draft of such Annual Budget from Manager, and (b) with respect to
Borrower and Tenant, if different than the Annual Budget prepared by Manager, at
least 60 days prior to the end of each Fiscal Year. With respect to the Annual
Budget for the Property, Lender shall be deemed to have approved such portions
of the Annual Budget that neither Borrower nor Tenant nor any of their
respective Affiliates have any right to approve or disapprove under the terms of
the Management Agreement. Upon the occurrence and during the continuation of a
Lockbox Event, Lender shall have the right to require (and Borrower shall use
commercially reasonable efforts to cause Manager to prepare and provide)
quarterly updates to the Annual Budget, which quarterly updates shall (i) with
respect to the Property, shall be subject to Lender’s approval (which approval
shall be in Lender’s sole and absolute discretion) except as to those portions
of the update thereto that neither Borrower nor or Tenant nor any of their
respective Affiliates have a right to approve or disapprove under the terms of
the Management Agreement and (ii) with respect to the Borrower and Tenant (if
different than the Annual Budget prepared by Manager), be subject to Lender’s
approval (which approval shall be in Lender’s sole and absolute discretion).
Neither Borrower nor Tenant nor any of their respective Affiliates shall, to the
extent permitted or required by the Management Agreement, (A) consent to a
change or modification (or fail to object to a change or modification) in the
Annual Budget prepared by Manager that has been approved by Lender, or
(B) change or modify any Annual Budget otherwise prepared with respect to
Borrower or Tenant that has been approved by Lender, in each case, without the
prior written consent of Lender.
          11.2.6 Other Information. Borrower shall, promptly after written
request by Lender or, if a Securitization shall have occurred, the Rating
Agencies, furnish or cause to be furnished to Lender, in such manner and in such
detail as may be reasonably requested by Lender, such reasonable additional
information as may be reasonably requested with respect to the Property,
Borrower, General Partner, Tenant or Guarantor.
XII. ENVIRONMENTAL MATTERS
     12.1 Representations. Borrower hereby represents and warrants that except
as set forth in the environmental reports and studies obtained by, or delivered
by or on behalf of Borrower to, Lender (the “Environmental Reports”),
(a) Borrower has not engaged in or permitted any operations or activities upon,
or any use or occupancy of the Property, or any portion thereof, for the purpose
of or in any way involving the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of any Hazardous
Materials on, under, in or about the Property, or transported any Hazardous
Materials to, from or across the Property, except in all cases in material
compliance with Environmental Laws and only in the course of legitimate business
operations at the Property; (b) no tenant (including Tenant), occupant
(including Tenant and Manager) or user of the Property, or any other Person has
engaged in or permitted any operations or activities upon, or any use or
occupancy of the Property, or any portion thereof, for the purpose of or in any
material way involving the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of any Hazardous
Materials on, in or about the Property, or transported any Hazardous Materials
to, from or across the Property, except in all cases in material compliance with
Environmental Laws and only in the course of legitimate business operations at
the Property; (c) no Hazardous Materials are presently constructed, deposited,
stored, or otherwise located on, under, in or about the Property except in
material compliance with Environmental

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Laws; (d) no Hazardous Materials have migrated from the Property upon or beneath
other properties which would reasonably be expected to result in material
liability for Borrower; and (e) no Hazardous Materials have migrated or threaten
to migrate from other properties upon, about or beneath the Property which would
reasonably be expected to result in material liability for Borrower.
     12.2 Compliance with Environmental Laws. Subject to Borrower’s right to
contest under Section 7.3, Borrower covenants and agrees with Lender that it
shall comply with all Environmental Laws. If at any time during the continuance
of the Lien of the Security Instrument, a Governmental Authority having
jurisdiction over the Property requires remedial action to correct the presence
of Hazardous Materials in, around, or under the Property (an “Environmental
Event”), Borrower shall deliver prompt notice of the occurrence of such
Environmental Event to Lender. Within 30 days after Borrower has knowledge of
the occurrence of an Environmental Event, Borrower shall deliver to Lender an
Officer’s Certificate (an “Environmental Certificate”) explaining the
Environmental Event in reasonable detail and setting forth the proposed remedial
action, if any. Borrower shall promptly provide Lender with copies of all
notices which allege or identify any actual or potential violation or
noncompliance received by or prepared by or for Borrower in connection with any
Environmental Law. For purposes of this paragraph, the term “notice” shall mean
any summons, citation, directive, order, claim, pleading, letter, application,
filing, report, findings, declarations or other materials pertinent to
compliance of the Property and Borrower with such Environmental Laws. If the
Security Instrument is foreclosed, Borrower shall deliver the Property in
compliance with all applicable Environmental Laws.
     12.3 Environmental Reports. Upon the occurrence and during the continuance
of an Environmental Event with respect to the Property or an Event of Default,
Lender shall have the right to have its consultants perform a comprehensive
environmental audit of the Property. Such audit shall be conducted by an
environmental consultant chosen by Lender and may include a visual survey, a
record review, an area reconnaissance assessing the presence of hazardous or
toxic waste or substances, PCBs or storage tanks at the Property, an asbestos
survey of the Property, which may include random sampling of the Improvements
and air quality testing, and such further site assessments as Lender may
reasonably require due to the results obtained from the foregoing. Borrower
grants Lender, its agents, consultants and contractors the right to enter the
Property as reasonable or appropriate (and upon reasonable prior notice) for the
circumstances for the purposes of performing such studies and the reasonable
cost of such studies shall be due and payable by Borrower to Lender upon demand
and shall be secured by the Lien of the Security Instrument. Lender shall not
unreasonably interfere with, and Lender shall direct the environmental
consultant to use its commercially reasonable efforts not to hinder, Borrower’s
or any Tenant’s, other occupant’s or Manager’s operations upon the Property when
conducting such audit, sampling or inspections. By undertaking any of the
measures identified in and pursuant to this Section 12.3, Lender shall not be
deemed to be exercising any control over the operations of Borrower or the
handling of any environmental matter or hazardous wastes or substances of
Borrower for purposes of incurring or being subject to liability therefor.
     12.4 Environmental Indemnification. Borrower shall protect, indemnify,
save, defend, and hold harmless the Indemnified Parties from and against any and
all liability, loss, damage, actions, causes of action, costs or expenses
whatsoever (including reasonable attorneys’ fees and

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expenses) and any and all claims, suits and judgments which any Indemnified
Party may suffer, as a result of or with respect to: (a) any Environmental Claim
relating to or arising from the Property; (b) the violation of any Environmental
Law in connection with the Property; (c) any release, spill, or the presence of
any Hazardous Materials affecting the Property; and (d) the presence at, in, on
or under, or the release, escape, seepage, leakage, discharge or migration at or
from, the Property of any Hazardous Materials, whether or not such condition was
known or unknown to Borrower; provided that, in each case, Borrower shall be
relieved of its obligation under this subsection if any of the matters referred
to in clauses (a) through (d) above are the result of the gross negligence or
willful misconduct of any of the Indemnified Parties or did not occur (but need
not have been discovered) prior to (i) the foreclosure of the Security
Instrument, or (ii) the delivery by Borrower to Lender or its designee of a
deed-in-lieu of foreclosure with respect to the Property. If any such action or
other proceeding shall be brought against Lender, upon written notice from
Borrower to Lender (given reasonably promptly following Lender’s notice to
Borrower of such action or proceeding), Borrower shall be entitled to assume the
defense thereof, at Borrower’s expense, with counsel reasonably acceptable to
Lender; provided, however, Lender may, at its own expense, retain separate
counsel to participate in such defense, but such participation shall not be
deemed to give Lender a right to control such defense, which right Borrower
expressly retains. Notwithstanding the foregoing, each Indemnified Party shall
have the right to employ separate counsel at Borrower’s expense if, in the
reasonable opinion of legal counsel, a conflict or potential conflict exists
between the Indemnified Party and Borrower that would make such separate
representation advisable.
     12.5 Recourse Nature of Certain Indemnifications. Notwithstanding anything
to the contrary provided in this Agreement or in any other Loan Document, the
indemnification provided in Section 12.4 shall be fully recourse to Borrower and
shall be independent of, and shall survive, the discharge of the Indebtedness,
the release of the Lien created by the Security Instrument, and/or the
conveyance of title to the Property to Lender or any purchaser or designee in
connection with a foreclosure of the Security Instrument or conveyance in lieu
of foreclosure for a period equal to the applicable statue of limitations
established by the applicable Legal Requirements. Each provision of this
Agreement, including any provision that purports to establish its own relative
priority over any or all other provisions of this Agreement, is deemed to be
expressly subject to this Section 12.5; it being intended, however, that the
relative priority, if any, of each such provision over any or all other
provisions of this Agreement, other than this Section 12.5 hereof, remain
unmodified.
XIII. DEFEASANCE
     13.1 Generally. From and after the expiration of the Defeasance Lockout
Period and provided that all of the conditions set forth in this Article XIII
are complied with, Lender hereby agrees that Borrower shall have the right to
obtain a release of the Lien of the Security Instrument and the other Loan
Documents (other than the Defeasance Note and the Lien of the Defeasance
Security Agreement on the collateral secured thereby) on the Property upon at
least 60 days’ prior written notice (such release, after satisfaction of the
other provisions of this Article XIII, a “Defeasance”):
          13.1.1 Defeasance Note. The execution and delivery of a defeasance
note (the “Defeasance Note”), in substitution for the Note and in form and
substance reasonably

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acceptable to Lender, dated as of the date of the Defeasance (which must be on a
Business Day), payable to Lender, in an amount equal to the Defeasance
Collateral Requirement;
          13.1.2 Defeasance Security Agreement. The execution and delivery of a
security agreement (the “Defeasance Security Agreement”), in form and substance
reasonably acceptable to Lender, dated as of the date of the Defeasance (which
must be on a Business Day), in favor of Lender, pursuant to which Lender is
granted a perfected first priority security interest in the Defeasance
Collateral to secure the Defeasance Note;
          13.1.3 Defeasance Assumption Agreement. The execution and delivery of
appropriate and reasonable agreements and/or instruments, each in form and
substance reasonably acceptable to Lender, pursuant to which the obligations and
liabilities of Borrower under the Defeasance Note and the Defeasance Security
Agreement are assumed by a new entity (the “Substitute Borrower”) which
satisfies all of the Single Purpose Entity requirements;
          13.1.4 Substitute Borrower Organizational Documents. The
organizational documents of the Substitute Borrower shall be satisfactory to
Lender and the Rating Agencies, shall satisfy all Rating Agency requirements and
shall demonstrate that such Substitute Borrower satisfies all of the Single
Purpose Entity requirements.
          13.1.5 Release Documents. The execution and delivery by Borrower of
the release documents referenced in Section 13.4 if Borrower is a party thereto;
          13.1.6 Other Conditions. Satisfaction of the conditions set forth in
Section 13.2; and
          13.1.7 No Event of Default. No Event of Default shall have occurred
and be continuing other than any Event of Default which shall be cured as a
result of such defeasance.
     13.2 Defeasance Collateral. Borrower shall deposit the Defeasance
Collateral in accordance with this Section 13.2.2 into the Defeasance Collateral
Account. Defeasance shall be permitted at such time as all of the following
events shall have occurred:
          13.2.1 Establishment of Account. The Defeasance Collateral Account
shall have been established pursuant to Section 13.5;
          13.2.2 Delivery of Defeasance Collateral. Borrower shall have
delivered, or caused to have been delivered to Lender, the Defeasance Collateral
for deposit into the Defeasance Collateral Account such that it will satisfy the
Defeasance Collateral Requirement at the time of delivery and all such
Defeasance Collateral, if in registered form, shall be registered in the name of
Lender or its nominee (and, if registered in nominee name endorsed to Lender or
in blank) and, if issued in book-entry form, the name of Lender or its nominee
shall appear as the owner of such securities on the books of the Federal Reserve
Bank or other party maintaining such book-entry system;
          13.2.3 Grant of Lien. Borrower shall have executed and delivered the
Defeasance Security Agreement and granted, or caused to have been granted, to
Lender a valid and perfected first priority security interest in the Defeasance
Collateral and all proceeds thereof;

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          13.2.4 Officer’s Certificate. Borrower shall have delivered or caused
to be delivered to Lender an Officer’s Certificate, dated as of the date of such
delivery, that (a) sets forth the aggregate face amount or unpaid principal
amount, interest rate and maturity of all such Defeasance Collateral, a copy of
the transaction journal, if any, or such other notification, if any, published
by or on behalf of the Federal Reserve Bank or other party maintaining a
book-entry system advising that Lender or its nominee is the owner of such
securities issued in book-entry form and (b) states that:
                    (i) Borrower (or the Substitute Borrower) owns the
Defeasance Collateral being delivered to Lender free and clear of any and all
Liens, security interests or other encumbrances (other than the Defeasance
Security Agreement), and has not assigned any interest or participation therein
(or, if any such interest or participation has been assigned, it has been
released), and Borrower has full power and authority to pledge such Defeasance
Collateral to Lender;
                    (ii) such Defeasance Collateral consists solely of
Defeasance Eligible Investments;
                    (iii) such Defeasance Collateral satisfies the Defeasance
Collateral Requirement, determined as of the date of delivery; and
                    (iv) the information required by Section 13.2.4(a) which is
set forth in the schedule attached to such Officer’s Certificate is correct and
complete in all material respects as of the date of delivery (such schedule,
which shall be attached to and form a part of such Officer’s Certificate, shall
demonstrate satisfaction of the requirement set forth in clause Section
13.2.4(ii), in a form reasonably acceptable to Lender);
                    (v) Borrower shall have delivered or caused to be delivered
to Lender a Rating Agency Confirmation and such other documents and certificates
as Lender may reasonably request, including Opinions of Counsel, in connection
with demonstrating that Borrower has satisfied the provisions of this
Section 13.2, including, but not limited to, an Opinion of Counsel stating,
among other things, that (A) Lender has a perfected first priority security
interest in the Defeasance Collateral and that the Defeasance Security Agreement
is enforceable in accordance with its terms and (B) if applicable, that any
trust formed as a REMIC pursuant to a Securitization will not fail to maintain
its status as a REMIC as a result of such Defeasance; and
                    (vi) Borrower shall have delivered to Lender a certificate
of an Independent Accountant certifying that the Defeasance Collateral will
generate monthly amounts which satisfy the Defeasance Collateral Requirement.
     13.3 Sufficiency of Defeasance Collateral. For purposes of determining
whether the Defeasance Collateral on deposit in the Defeasance Collateral
Account satisfies the Defeasance Collateral Requirements, there shall be
included only payments of principal and predetermined and certain income thereon
(as reasonably determined by Lender and agreed to by Borrower without regard to
any reinvestment of such amounts) that will occur on a stated date for a stated
payment on or before the dates when such amounts may be required to be applied
to pay the

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interest and/or outstanding principal balance of on the Defeasance Note (and/or
any substitute notes, as applicable) when due.
     13.4 Lender Release. Upon the delivery of Defeasance Collateral in
accordance with Section 13.2 and the satisfaction of all other conditions
provided for in this Article IX, Lender shall enter into appropriate release and
termination documents as if a payment in full of the Indebtedness hereunder
(except as to the Defeasance Note and Defeasance Security Agreement) had
occurred, together with such documentation as may be reasonably requested by
Borrower to notify third parties thereof and substitute note documentation, and
Lender will return to Borrower any Letters of Credit or other collateral or
security held by Lender in connection with the Loan (other than the Defeasance
Collateral), and in connection with the return of any Letters of Credit, shall
execute a written statement (without any representation, warranty or indemnity
by Lender) to the financial institution issuing such Letter of Credit that such
instrument is surrendered for cancellation.
     13.5 Defeasance Collateral Account. On or before the date on which Borrower
delivers Defeasance Collateral to Lender pursuant to Section 13.2, Borrower
shall open at any Approved Bank (or other bank subject to the next sentence
hereof) at the time and acting as custodian for Lender, a defeasance collateral
account (the “Defeasance Collateral Account”) which shall at all times be an
Eligible Account, in which Borrower shall grant to Lender or reconfirm the grant
to Lender of a security interest. The Defeasance Collateral Account shall
contain (a) all Defeasance Collateral delivered by Borrower pursuant to
Section 13.2, (b) all payments received on Defeasance Collateral held in the
Defeasance Collateral Account and (c) all income or other gains from investment
of moneys or other property deposited in the Defeasance Collateral Account. All
such amounts, including all income from the investment or reinvestment thereof,
shall be held by Lender, subject to withdrawal by Lender for the purposes set
forth in this Article IX. Borrower (or the Substitute Borrower) shall be the
owner of the Defeasance Collateral Account and shall report all income accrued
on Defeasance Collateral for federal, state and local income tax purposes in its
income tax return.
     13.6 Payments. Lender shall withdraw, draw on or collect and apply the
amounts that are on deposit in the Defeasance Collateral Account to pay when due
the principal and all installments of interest and principal on the Defeasance
Note. Funds and other property in the Defeasance Collateral Account shall not be
commingled with any other monies or property of Borrower (or the Substitute
Borrower) or any Affiliate of Borrower (or the Substitute Borrower). Lender
shall not in any way be held liable by reason of any insufficiency in the
Defeasance Collateral Account.
     13.7 Loan Document Amendments. If required, Borrower and Lender shall enter
into any appropriate amendments to the Loan Documents necessitated by a
Defeasance, such amendments to be in form and substance reasonably acceptable to
both Borrower and Lender.
     13.8 Lender’s Costs Borrower shall pay all of Lender’s reasonable costs
incurred in connection with any Defeasance, including reasonable attorneys’ fees
and costs.

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XIV. SECURITIZATION AND PARTICIPATION
     14.1 Sale of Note and Securitization. At the request of Lender and, to the
extent not already required to be provided by Borrower under this Agreement,
Borrower shall use reasonable efforts to satisfy the market standards which may
be reasonably required in the marketplace or by the Rating Agencies in
connection with the sale of the Note or participation therein as part of the
securitization (such sale and/or securitization, the “Securitization”) of rated
single or multi-class securities (the “Securities”) secured by or evidencing
ownership interests in the Note, this Agreement and the other Loan Documents,
including using reasonable efforts to do (or cause to be done) the following
(but Borrower shall not in any event be required to incur, suffer or accept
(except to a de minimis extent)) (I) any lesser rights or greater obligations
than as currently set forth in the Loan Documents and (II) except as set forth
in this Article XIV, any expense or any liability:
               (a) Provided Information. (i) Provide, at the sole expense of the
holder of the Note, such financial and other information (but not projections)
with respect to the Property, Borrower, General Partner, Tenant, Guarantor,
Parent and Manager to the extent such information is reasonably available to
Borrower, (ii) provide, at the sole expense of the holder of the Note, business
plans (but not projections) and budgets relating to the Property, to the extent
prepared by or on behalf of Borrower and (iii) cooperate with the holder of the
Note (and its representatives) in obtaining, at the sole expense of the holder
of the Note, such site inspection, appraisals, market studies, environmental
reviews and reports, engineering reports and other due diligence investigations
of the Property, as may be reasonably requested by the holder of the Note or
reasonably requested by the Rating Agencies (all information provided pursuant
to this Section 14.1 together with all other information heretofore provided to
Lender in connection with the Loan, as such may be updated, at Lender’s request,
in connection with a Securitization, or hereafter provided to Lender in
connection with the Loan or a Securitization, being herein collectively called
the “Provided Information”);
               (b) Opinions of Counsel. Use reasonable efforts to cause to be
rendered such customary updates or customary modifications to the Opinions of
Counsel delivered at the closing of the Loan as may be reasonably requested by
the holder of the Note or the Rating Agencies in connection with the
Securitization. Borrower’s failure to use reasonable efforts to deliver or cause
to be delivered the opinion updates or modifications required hereby within 20
Business Days after written request therefor shall constitute an “Event of
Default” hereunder. To the extent any of the foregoing Opinions of Counsel were
required to be delivered in connection with the closing of the Loan, any update
thereof shall be without cost to Borrower. Any such Opinions of Counsel that
Borrower is reasonably required to cause to be delivered in connection with a
Securitization other than those delivered at the original Loan closing, shall be
delivered at no cost and expense to Borrower (other than administrative costs
and expenses of Borrower) (it being agreed that Borrower shall be obligated to
deliver an Opinion of Counsel with respect to “10b-5” matters as such matters
relate to the Loan);
               (c) Modifications to Loan Documents. Without cost to the
Borrower, execute such amendments to the Security Instrument and Loan Documents
as may be reasonably requested by Lender or the Rating Agencies in order to
achieve the required rating or to effect the Securitization (including, without
limitation, modifying the Payment Date, as defined in the

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Note, to a date other than as originally set forth in the Note), provided, that
nothing contained in this Section 14.1.3 shall result in (i) any material
adverse change in the initial economics contemplated by the Security Instrument
or the Loan Documents (unless Borrower is made whole by the holder of Note),
(ii) any adverse operational changes to the Property or Borrower, or
(iii) Borrower having (except to a de minimis extent) any lesser rights or
greater obligations than currently set forth in the Loan Documents; and
               (d) Cooperation with Rating Agencies. Borrower shall, at Lender’s
expense, (i) at Lender’s request, meet with representatives of the Rating
Agencies at reasonable times to discuss the business and operations of the
Property, and (ii) cooperate with the reasonable requests of the Rating Agencies
in connection with the Property. Until the Obligations are paid in full,
Borrower shall, if requested by Lender, provide the Rating Agencies with all
financial reports required by this Agreement and such other information as they
shall reasonably request, including copies of any default notices or other
material notices delivered to and received from Lender hereunder, to enable them
to continuously monitor the creditworthiness of Borrower and to permit an annual
surveillance of the implied credit rating of the Securities.
     14.2 Securitization Financial Statements.
               (a) Borrower acknowledges that all financial information
delivered by Borrower to Lender pursuant to Article XI may, at Lender’s option,
be delivered to the Rating Agencies.
               (b) If requested by Lender, Borrower shall, at no cost and
expense to Borrower (other than administrative costs and expenses of Borrower),
provide Lender, promptly upon request, with any financial statements, or
financial, statistical or operating information, as Lender shall determine to be
required pursuant to Regulation AB under the Securities Act or the Exchange Act
or other applicable Legal Requirements in connection with any private placement
memorandum, prospectus or other disclosure documents or any filing pursuant to
the Exchange Act in connection with the Securitization or as shall otherwise be
reasonably requested by Lender.
     14.3 Securitization Indemnification.
          14.3.1 Disclosure Documents. Borrower understands that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including a prospectus, private placement memorandum,
collateral term sheet or a public registration statement (each, a “Disclosure
Document”) and may also be included in filings with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the “Securities
Act”) or the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”), or provided or made available to investors or prospective investors in
the Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, upon request, Borrower shall
reasonably cooperate with the holder of the Note in updating the Provided
Information for inclusion or summary in the Disclosure Document by providing all
current

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information pertaining to Borrower and the Property reasonably requested by
Lender and available to Borrower.
          14.3.2 Indemnification Certificate. In connection with each applicable
Disclosure Document, Borrower agrees to provide, at Lender’s reasonable request,
an indemnification certificate (at no material cost to Borrower):
               (a) certifying that Borrower has carefully examined those
portions of such memorandum or prospectus, as applicable, reasonably designated
in writing by Lender for Borrower’s review pertaining to the Property, Borrower,
General Partner, Guarantor, Tenant, Parent, the Loan and/or the Provided
Information and insofar as such sections or portions thereof specifically
pertain to the Property, Borrower, General Partner, Guarantor, Tenant, Parent,
the Loan and/or the Provided Information (such portions, the “Relevant
Portions”), the Relevant Portions do not (except to the extent specified by
Borrower, if Borrower does not agree with the statements therein), as of the
date of such certificate, to Borrower’s knowledge, contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were
made, not misleading.
               (b) indemnifying Lender and the Affiliates of Deutsche Bank
Securities, Inc. (collectively, “DBS”) that have prepared the Disclosure
Document relating to the Securitization, each of its directors, each of its
officers who have signed the Disclosure Document and each person or entity who
controls DBS within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively, the “DBS Group”), and DBS,
together with the DBS Group, each of their respective directors and each person
who controls DBS or the DBS Group, within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any actual, out-of-pocket losses, third party claims,
damages (excluding lost profits, diminution in value and other consequential
damages) or liabilities arising out of third party claims (the “Liabilities”) to
which any member of the Underwriter Group may become subject to the extent such
Liabilities are based (in whole or in part) upon any untrue statement of any
material fact contained in the Relevant Portions and in the Provided Information
or are based (in whole or in part) upon the omission by Borrower to state
therein a material fact required to be stated in the Relevant Portions in order
to make the statements in the Relevant Portions in light of the circumstances
under which they were made, not misleading (except that (i) Borrower’s
obligation to indemnify in respect of any information contained in a Disclosure
Document that is derived in part from information provided by Borrower or any
Affiliate of Borrower and in part from information provided by others unrelated
to or not employed by Borrower shall be limited to any untrue statement or
omission of material fact therein known to Borrower that results directly from
an error in any information provided (or which should have been provided) by
Borrower and (ii) Borrower shall have no responsibility for the failure of any
member of the Underwriting Group to accurately transcribe written information
supplied by Borrower or to include such portions of the Provided Information).
The indemnity contained in the indemnification certificate will be in addition
to any liability which Borrower may otherwise have.
               (c) The indemnification certificate shall provide that Borrower’s
liability under clauses (a) and (b) of the indemnification certificate shall be
limited to Liabilities based (in whole or in part) upon any such untrue
statement or omission made in a Disclosure

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Document in reliance upon and in conformity with information furnished to Lender
by, or furnished at the direction and on behalf of, Borrower in connection with
the preparation of those portions of the relevant Disclosure Document pertaining
to the Property, Borrower, General Partner, Guarantor, Tenant, Parent, or the
Loan, including financial statements of Borrower and operating statements with
respect to the Property.
               (d) The indemnification certificate shall also provide that
promptly after receipt by an indemnified party of notice of the commencement of
any action covered by the indemnification certificate, such indemnified party
will notify the indemnifying party in writing of the commencement thereof, but
the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may have to
any indemnified party thereunder except to the extent that failure to notify
causes prejudice to the indemnifying party. In the event that any action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent that it
(or they) may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. After such notice from the indemnifying party to such
indemnified party of its assumption of such defense, the indemnifying party
shall not be liable for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof; provided,
however, if an indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there are any legal defenses
available to it that are different from or in conflict with those available to
the indemnifying party, or indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties at the expense of the indemnifying party.
               (e) The indemnification certificate shall also provide that in
order to provide for just and equitable contribution in circumstances in which
the indemnity provided for therein is for any reason held to be unenforceable by
an indemnified party in respect of any actual, out-of-pocket losses, claims,
damages or liabilities relating to third party claims (or action in respect
thereof) referred to therein which would otherwise be indemnifiable thereunder,
the indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such actual, out of pocket losses, third party
claims, damages or liabilities (or action in respect thereof) (but excluding
damages for lost profits, diminution in value of the Property and consequential
damages); provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution for Liabilities arising therefrom from any
person who was not guilty of such fraudulent misrepresentation. In determining
the amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) the DBS Group’s and Borrower’s
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; (iii) the limited responsibilities and obligations of
Borrower as specified herein; and (iv) any other equitable considerations
appropriate in the circumstances.

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               14.4 Retention of Servicer. Lender reserves the right to retain,
and from time to time discharge and replace, the Servicer. Lender shall pay the
standard monthly servicing fee of the Servicer. Except for the monthly servicing
fee to be paid by Lender, Borrower shall pay any fees and expenses of the
Servicer and any reasonable third-party fees and expenses, including, without
limitation, special servicing fees, work-out fees and reasonable attorneys fees
and disbursements, in connection with a prepayment, release of the Property,
assumption or modification of the Loan, special servicing or work-out of the
Loan or enforcement of the Loan Documents.
XV. ASSIGNMENTS AND PARTICIPATIONS
     15.1 Assignment and Acceptance.
               (a) Subject to Section 15.1(b) below, Lender may assign to one or
more Persons all or a portion of Lender’s rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Note); provided that the parties to each such assignment shall
execute and deliver to Lender (or if designated by Lender, Servicer), on behalf
of Borrower (“Registrar”), for its acceptance and recording in the Register, an
Assignment and Acceptance. Borrower will not be required in connection with any
such assignment to incur, suffer or accept (i) any lesser rights or greater
obligations than as currently set forth in the Loan Documents or (ii) any
expense or any liability in connection with such Assignment and Acceptance. In
addition, subject to Section 15.1(b) below, Lender may participate to one or
more Persons all or any portion of its rights and obligations under this
Agreement and the other Loan Documents (including without limitation, all or a
portion of the Note) utilizing such documentation to evidence such participation
and the parties’ respective rights thereunder as Lender, in its sole discretion,
shall elect.
               (b) Section 15.1(a) above notwithstanding, Lender (as named on
the first page of this Agreement and not any successor or assign thereof) agrees
that except in connection with a Securitization by Lender (as named on the first
page of this Agreement and not any successor or assign thereof), Lender (as
named on the first page of this Agreement and not any successor or assign
thereof) shall use good faith efforts to exclude from any sale or syndication of
Lender’s rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of the Note) those
Persons identified on Schedule II.
     15.2 Effect of Assignment and Acceptance. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (a) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of Lender, as the case may be, hereunder and such assignee shall be deemed to
have assumed such rights and obligations, and (b) Lender shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of
Lender’s rights and obligations under this Agreement and the other Loan
Documents, Lender shall cease to be a party hereto) accruing from and after the
effective date of

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the Assignment and Acceptance, except with respect to (i) any payments made by
Borrower to Lender pursuant to the terms of the Loan Documents after the
effective date of the Assignment and Acceptance and (ii) any letter of credit,
cash deposit or other deposits or security (other than the Lien of the Security
Instrument and the other Loan Documents) delivered to or for the benefit of or
deposited with German American Capital Corporation, as Lender, for which German
American Capital Corporation shall remain responsible for the proper disposition
thereof until such items are delivered to a party who is qualified as an
Approved Bank and agrees to hold the same in accordance with the terms and
provisions of the agreement pursuant to which such items were deposited.
     15.3 Content. By executing and delivering an Assignment and Acceptance,
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (a) other than as provided in such Assignment
and Acceptance, Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (b) Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under any Loan
Documents or any other instrument or document furnished pursuant thereto;
(c) such assignee confirms that it has received a copy of this Agreement,
together with copies of such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (d) such assignee will, independently and without
reliance upon Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents;
(e) such assignee appoints and authorizes Lender to take such action as agent on
its behalf and to exercise such powers and discretion under the Loan Documents
as are delegated to Lender by the terms hereof together with such powers and
discretion as are reasonably incidental thereto; and (f) such assignee agrees
that it will perform, in accordance with their terms, all of the obligations
which by the terms of this Agreement and the other Loan Documents are required
to be performed by Lender.
     15.4 Register. Registrar shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of Lender and each assignee pursuant to this Article XV
and the Principal Amount of the Loan owing to each such assignee from time to
time (the “Register”). The entries in the Register shall, with respect to such
assignees, be conclusive and binding for all purposes, absent manifest error.
The Register shall be available for inspection by Lender, Borrower or any
assignee of Lender pursuant to this Article XV at any reasonable time and from
time to time upon reasonable prior written notice.
     15.5 Substitute Notes. Upon its receipt of an Assignment and Acceptance
executed by an assignee, together with any Note or Notes subject to such
assignment, Registrar shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit M hereto, (a) accept such
Assignment and Acceptance, (b) record the information contained therein

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in the Register, and (c) give prompt written notice thereof to Borrower. Within
five Business Days after its receipt of such notice, Borrower, at Lender’s
expense, shall execute and deliver to Lender in exchange and substitution for
the surrendered Note or Notes a new Note to the order of such assignee in an
amount equal to the portion of the Loan assigned to it and a new Note to the
order of Lender in an amount equal to the portion of the Loan retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate then outstanding principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the Note
(modified, however, to the extent necessary so as not to impose duplicative or
increased obligations on Borrower and to delete obligations previously satisfied
by Borrower). Notwithstanding the provisions of this Article XV, Borrower shall
not be responsible or liable for any additional taxes, reserves, adjustments or
other costs and expenses that are related to, or arise as a result of, any
transfer of the Loan or any interest or participation therein that arise solely
and exclusively from the transfer of the Loan or any interest or participation
therein or from the execution of the new Note contemplated by this Section 15.5,
including, without limitation, any mortgage tax. Lender and/or the assignees, as
the case may be, shall from time to time designate one agent through which
Borrower shall request all approvals and consents required or contemplated by
this Agreement and on whose statements Borrower may rely.
     15.6 Participations.
               (a) Lender and each assignee pursuant to this Article XV may sell
participations to one or more Persons (other than Borrower or any of its
Affiliates) in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Note held by it); provided, however, that (i) such assignee’s
obligations under this Agreement and the other Loan Documents shall remain
unchanged, (ii) such assignee shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such assignee
shall remain the holder of any such Note for all purposes of this Agreement and
the other Loan Documents, and (iv) Borrower, Lender and the assignees pursuant
to this Article XV shall continue to deal solely and directly with such assignee
in connection with such assignee’s rights and obligations under this Agreement
and the other Loan Documents. In the event that more than one party comprises
Lender, Lender shall designate one party to act on the behalf of all parties
comprising Lender in providing approvals and all other necessary consents under
the Loan Documents and on whose statements Borrower may rely.
               (b) Section 15.6(a) above notwithstanding, Lender (as named on
the first page of this Agreement and not any successor or assign thereof) agrees
to shall use good faith efforts to exclude from any sale or syndication of
participation rights by (as named on the first page of this Agreement and not
any successor or assign thereof) pursuant to Section 15.6(a) above to those
Persons identified on Schedule II.
     15.7 Disclosure of Information. Any assignee pursuant to this Article XV
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Article XV, disclose to the assignee or
participant or proposed assignee or participant, any information relating to
Borrower furnished to such assignee by or on behalf of Borrower; provided,
however, that, prior to any such disclosure, the assignee or participant or

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proposed assignee or participant shall agree in writing for the benefit of
Borrower to preserve the confidentiality of any confidential information
received by it.
     15.8 Security Interest in Favor of Federal Reserve Bank. Notwithstanding
any other provision set forth in this Agreement or any other Loan Document, any
assignee pursuant to this Article XV may at any time create a security interest
in all or any portion of its rights under this Agreement or the other Loan
Documents (including, without limitation, the amounts owing to it and the Note
or Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
XVI. RESERVE ACCOUNTS
     16.1 Tax Reserve Account.
          16.1.1 General. Borrower shall, or shall cause Manager to, deposit
into the Holding Account an amount equal to (a) one-twelfth of the annual Real
Estate Taxes that Lender reasonably estimates, based on the most recent tax bill
for the Property, will be payable during the next ensuing 12 months in order to
accumulate with Lender sufficient funds to pay all such Real Estate Taxes at
least 30 days prior to the imposition of any interest, charges or expenses for
the non-payment thereof and (b) one-twelfth of the annual Other Charges that
Lender reasonably estimates will be payable during the next ensuing 12 months
(said monthly amounts in (a) and (b) above hereinafter called the “Monthly Tax
Reserve Amount”, and the aggregate amount of funds held in the Tax Reserve
Account being the “Tax Reserve Amount”).
          16.1.2 Disbursement. Lender will, in accordance with Section 3.1.6
hereof, instruct the Cash Management Bank to transfer from the Holding Account
the Monthly Tax Reserve Amount to the Tax Reserve Account. Lender will apply the
Tax Reserve Amount to payments of Real Estate Taxes and Other Charges required
to be made by Borrower pursuant to Article V, Article VII and under the Security
Instrument, subject to Borrower’s right to contest Impositions in accordance
with Section 7.3 above. In making any payment relating to the Tax Reserve
Account, Lender may do so according to any bill, statement or estimate procured
from the appropriate public office, without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If the amount of funds in the
Tax Reserve Account shall exceed the amounts due for Real Estate Taxes and Other
Charges pursuant to Article V and Article VII, Lender shall credit such excess
against future payments to be made to the Tax Reserve Account. If at any time
Lender reasonably determines that the Tax Reserve Amount is not or will not be
sufficient to pay Real Estate Taxes and Other Charges by the dates set forth
above, Lender shall notify Borrower of such determination and Borrower shall
increase its monthly payments to Lender by the amount that Lender reasonably
estimates is sufficient to make up the deficiency at least 30 days prior to the
imposition of any interest, charges or expenses for the non-payment of such Real
Estate Taxes or Other Charges. Upon payment of such Real Estate Taxes and Other
Charges, Lender shall reassess the amount necessary to be deposited in the Tax
Reserve Account for the succeeding period, which calculation shall take into
account any excess amounts remaining in the Tax Reserve Account.

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     16.2 Insurance Reserve Account.
          16.2.1 General. Unless Borrower shall have delivered evidence
satisfactory to Lender that the coverage required by Article VI is maintained
for the benefit of Borrower by Manager or Guarantor (and evidence of the payment
in full of the associated premiums prior to the expiration of any existing
coverage), Borrower shall deposit (or cause Manager to deposit) into the Holding
Account an amount equal to one-twelfth of the insurance premiums that Lender
reasonably estimates, based on the most recent bill, will be payable for the
renewal of the coverage afforded by the insurance policies upon the expiration
thereof in order to accumulate with Lender sufficient funds to pay all such
insurance premiums at least 30 days prior to the expiration of the policies
required to be maintained by Borrower pursuant to the terms hereof (said monthly
amounts hereinafter called the “Monthly Insurance Reserve Amount,” and the
aggregate amount of funds held in the Insurance Reserve Account being the
“Insurance Reserve Amount”).
          16.2.2 Disbursement. Lender will, in accordance with Section 3.1.6
hereof, instruct the Cash Management Bank to transfer from the Holding Account
the Monthly Insurance Reserve Amount, if any, to the Insurance Reserve Account.
Lender will apply the Insurance Reserve Amount to payments of insurance premiums
required to be made by Borrower pursuant to Article VI and under the Security
Instrument. In making any payment relating to the Insurance Reserve Account,
Lender may do so according to any bill, statement or estimate procured from the
insurer or agent, without inquiry into the accuracy of such bill, statement or
estimate or into the validity thereof. If the amount of funds in the Insurance
Reserve Account shall exceed the amounts due for insurance premiums pursuant to
Article VI, Lender shall credit such excess against future payments to be made
to the Insurance Reserve Account. If at any time Lender reasonably determines
that the Insurance Reserve Amount is not or will not be sufficient to pay
insurance premiums by the dates set forth above, Lender shall notify Borrower of
such determination and Borrower shall increase its monthly payments to Lender by
the amount that Lender reasonably estimates is sufficient to make up the
deficiency at least 30 days prior to expiration of the applicable insurance
policies. Upon payment of such insurance premiums, Lender shall reassess the
amount necessary to be deposited in the Insurance Reserve Account for the
succeeding period, which calculation shall take into account any excess amounts
remaining in the Insurance Reserve Account.
     16.3 FF&E Reserve Account.
          16.3.1 General. Borrower shall, or shall cause Manager to, deposit
into the Holding Account an amount equal to five percent of prior calendar
months Operating Income (said monthly amounts hereinafter called the “Monthly
FF&E Reserve Amount”, and the aggregate amount of funds held in the Tax Reserve
Account being the “FF&E Reserve Amount”); provided so long as Manager is
depositing or otherwise remitting the Monthly FF&E Reserve Amount to the FF&E
Holding Account, Borrower shall not be required to, nor shall Borrower be
required to cause Manager to, deposit the Monthly FF&E Reserve Amount into the
Holding Account.
          16.3.2 Disbursement. Lender will, in accordance with Section 3.1.6
hereof, instruct the Cash Management Bank to transfer from the Holding Account
the Monthly FF&E

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Reserve Amount to the FF&E Reserve Account. Provided no Event of Default has
occurred and is continuing, Lender shall make disbursements (but no more
frequently than one each calendar month and, other than any final disbursement,
the total amount of any request shall not be less than $25,000) from the FF&E
Reserve Account (but not in an amount more than the FF&E Reserve Amount on
deposit from time to time) to reimburse Borrower or Manager or to provide funds
to Borrower or Manager for the acquisition or replacement of FF&E. Lender shall,
within 10 Business Days after a written request from Borrower or Manager (and
Borrower hereby authorizes Lender to disburse funds pursuant to this
Section 16.3 based on instructions from Manager) and satisfaction of the
requirements set forth in this Section 16.3 disburse to Borrower or Manager, as
applicable, amounts from the FF&E Reserve Account necessary to pay for the
actual costs associated with the acquisition or replacement of any FF&E. Each
request for disbursement from the FF&E Reserve Account shall be in a form
reasonably acceptable to Lender, and which shall, at a minimum, specify the
specific items (which may be general categories) for which the disbursement is
requested, and the estimated cost for each item of FF&E purchased. Each request
for disbursement shall be delivered at least 10 Business Days prior to the date
of the requested disbursement and shall include, if applicable, copies of
invoices and either (a) evidence satisfactory to Lender of payment of all such
amounts or (b) evidence satisfactory to Lender that such amounts will be paid by
such disbursement.
XVII. DEFAULTS
     17.1 Event of Default.
               (a) Each of the following events shall constitute an event of
default hereunder (an “Event of Default”):
                    (i) if (A) the Indebtedness is not paid in full on the
Maturity Date, (B) any regularly scheduled monthly payment of interest due under
the Note is not paid in full on the applicable Payment Date, (C) any prepayment
of principal due under this Agreement or the Note is not paid when due, (D) the
Liquidated Damages Amount is not paid on the date required by this Agreement or
any other Loan Document, (E) any deposit to the Holding Account is not made on
the required deposit date therefore and such payment is not made within three
Business Days following Notice by Lender; (F) Borrower or Tenant, or any Person
on behalf of Borrower or Tenant (other than Lender) (I) delivers instructions to
Manager contrary to or inconsistent with the instructions set forth on
Exhibit A, or (II) repudiates the payment subordination provided by Tenant for
the benefit of Lender in Exhibit A, or (G) except as to any amount included in
(A), (B), (C), (D) (E) and/or (F) of this clause (i), any other amount payable
pursuant to this Agreement, the Note or any other Loan Document is not paid in
full when due and payable in accordance with the provisions of the applicable
Loan Document, with such failure continuing for 10 Business Days after Lender
delivers written notice thereof to Borrower;
                    (ii) subject to Borrower’s right to contest as set forth in
Section 7.3, if any of the Impositions or Other Charges are not paid prior to
the imposition of any interest, penalty, charge or expense for the non-payment
thereof;

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                    (iii) if the insurance policies required by Article VI are
not kept in full force and effect, or if certificates of insurance are not
delivered to Lender in accordance with Article VI;
                    (iv) if, except as permitted pursuant to Article VIII or as
may otherwise be effected with the prior written consent of Lender, (A) any
Transfer of any direct or indirect legal, beneficial or equitable interest in
all or any portion of the Property, (B) any Transfer of any direct or indirect
interest in Borrower, General Partner, Guarantor or any other SPE Entity, (C)
any Lien or encumbrance on all or any portion of the Property other than
Permitted Encumbrances, (D) any pledge, hypothecation, creation of a security
interest in or other encumbrance of any direct or indirect interests in
Borrower, General Partner, Guarantor or any SPE Entity or (E) the filing of a
declaration of condominium with respect to the Property;
                    (v) if any, representation or warranty made by Borrower
herein or by Borrower, Guarantor or any Affiliate of Borrower in any other Loan
Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made, and, if such breach is reasonably susceptible to cure, such breach is
not cured within 30 days following written notice from Lender;
                    (vi) if Borrower, General Partner any SPE Entity or any
Guarantor shall make an assignment for the benefit of creditors;
                    (vii) if a receiver, liquidator or trustee shall be
appointed for Borrower, General Partner, any SPE Entity or any Guarantor or if
Borrower, General Partner, any SPE Entity or any Guarantor shall be adjudicated
a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Borrower,
General Partner, any SPE Entity or any Guarantor, or if any proceeding for the
dissolution or liquidation of Borrower, General Partner, any SPE Entity or any
Guarantor shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower, General Partner, any SPE Entity or any Guarantor upon the same not
being discharged, stayed or dismissed within 90 days;
                    (viii) if Borrower, General Partner, any SPE Entity or any
Guarantor, as applicable, attempts to assign its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;
                    (ix) with respect to any term, covenant or provision set
forth herein (other than the other subsections of this Section 17.l) which
specifically contains a notice requirement or grace period, if Borrower, any SPE
Entity or any Guarantor shall be in default under such term, covenant or
condition after the giving of such notice or the expiration of such grace
period;
                    (x) if any of the assumptions contained in the
Non-Consolidation Opinion, in any Additional Non-Consolidation Opinion or in any
other non-consolidation opinion delivered to Lender in connection with the Loan,
or in any other non-

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consolidation delivered subsequent to the closing of the Loan, is or shall
become untrue in any material respect and such untruth is reasonably expected to
result in a ruling in favor of substantial consolidation of Borrower;
                    (xi) if Borrower shall fail to comply with any covenants set
forth in Section 5.1.4, Section 5.2.9 or Section 5.2.20 and such failure is
reasonably expected to result in a ruling in favor of substantial consolidation
of Borrower;
                    (xii) except as provided clause (xi) above, if Borrower
shall fail to comply in any material respect (to the extent such covenant is not
qualified by materiality) or any respect (to the extent such covenant is
qualified by materiality) with any covenants set forth in Article V or
Section XI with such failure continuing for 15 Business Days after Lender
delivers written notice thereof to Borrower;
                    (xiii) if Borrower shall fail to comply in any material
respect (to the extent such covenant is not qualified by materiality) or any
respect (to the extent such covenant is qualified by materiality) with any
covenants set forth in Section 4 or Section 3(d) or Section 8 of the Security
Instrument with such failure continuing for 15 Business Days after Lender
delivers written notice thereof to Borrower;
                    (xiv) [intentionally omitted];
                    (xv) if this Agreement or any other Loan Document or any
Lien granted hereunder or thereunder, in whole or in part, shall terminate or
shall cease to be effective or shall cease to be a legally valid, binding and
enforceable obligation of Borrower or any Guarantor, or any Lien securing the
Indebtedness shall, in whole or in part, cease to be a perfected first priority
Lien, subject to the Permitted Encumbrances (except in any of the foregoing
cases in accordance with the terms hereof or under any other Loan Document or by
reason of any affirmative act of Lender);
                    (xvi) if the Management Agreement is terminated and a
Qualified Manager is not appointed as a replacement manager pursuant to the
provisions of Section 5.2.14 within 60 days after such termination;
                    (xvii) except as expressly permitted pursuant to Section 8.3
hereof, if Borrower or any other Person grants any easement, covenant or
restriction (other than the Permitted Encumbrances) over the Property;
                    (xviii) subject to the terms of Section 7.3 hereof, if
Borrower shall default beyond the expiration of any applicable cure period under
any existing easement, covenant or restriction which affects the Property, the
default of which shall have a Material Adverse Effect;
                    (xix) if Borrower shall continue to be in Default under any
of the other terms, covenants or conditions of this Agreement or of any Loan
Document not specified in subsections (i) to (xviii) above, for 30 days after
written notice from Lender; provided, however, that if such Default is
susceptible of cure but cannot reasonably be cured within such 30-day period and
provided further that Borrower shall have commenced to cure such Default within

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such 30-day period and thereafter diligently proceeds to cure the same, such
30-day period shall be extended for such time as is reasonably necessary for
Borrower in the exercise of due diligence to cure such Default, such additional
period not to exceed 90 days.
               (b) Subject to the terms of Article XVIII, unless waived in
writing by Lender, upon the occurrence and during the continuance of an Event of
Default Lender may, without notice or demand, in addition to any other rights or
remedies available to it pursuant to this Agreement and the other Loan Documents
or at law or in equity, take such action that Lender deems advisable to protect
and enforce its rights against Borrower and in the Property, including, without
limitation, (i) declaring immediately due and payable the entire Principal
Amount together with interest thereon and all other sums due by Borrower under
the Loan Documents, (ii) collecting interest on the Principal Amount at the
Default Rate whether or not Lender elects to accelerate the Note and
(iii) enforcing or availing itself of any or all rights or remedies set forth in
the Loan Documents against Borrower and the Property, including, without
limitation, all rights or remedies available at law or in equity; and upon any
Event of Default described above, the Indebtedness and all other obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding. The foregoing
provisions shall not be construed as a waiver by Lender of its right to pursue
any other remedies available to it under this Agreement, the Security Instrument
or any other Loan Document. Any payment hereunder may be enforced and recovered
in whole or in part at such time by one or more of the remedies provided to
Lender in the Loan Documents.
     17.2 Remedies.
               (a) Subject to the terms of Article XVIII, unless waived in
writing by Lender, upon the occurrence and during the continuance of an Event of
Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under this Agreement or any of the
other Loan Documents executed and delivered by, or applicable to, Borrower or at
law or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Indebtedness shall be declared due and payable,
and whether or not Lender shall have commenced any foreclosure proceeding or
other action for the enforcement of its rights and remedies under any of the
Loan Documents with respect to the Property. Any such actions taken by Lender
shall be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing (i) Lender shall not be subject to any
one action or election of remedies law or rule and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and
effect until Lender has exhausted all of its remedies against the Property and
the Security Instrument has been foreclosed, sold and/or otherwise realized upon
in satisfaction of the Indebtedness or the Indebtedness has been paid in full.

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               (b) Upon the occurrence and during the continuance of an Event of
Default, with respect to the Account Collateral, the Lender may:
                    (i) without notice to Borrower, except as required by law,
and at any time or from time to time, charge, set-off and otherwise apply all or
any part of the Account Collateral against the Obligations, Operating Expenses
and/or Capital Expenditures for the Property or any part thereof;
                    (ii) in Lender’s sole discretion, at any time and from time
to time, exercise any and all rights and remedies available to it under this
Agreement, and/or as a secured party under the UCC;
                    (iii) demand, collect, take possession of or receipt for,
settle, compromise, adjust, sue for, foreclose or realize upon the Account
Collateral (or any portion thereof) as Lender may determine in its sole
discretion; and
                    (iv) take all other actions provided in, or contemplated by,
this Agreement.
               (c) With respect to Borrower, the Account Collateral and the
Property, nothing contained herein or in any other Loan Document shall be
construed as requiring Lender to resort to the entire Property for the
satisfaction of any of the Indebtedness, and Lender may seek satisfaction out of
the Property or any part thereof, in its absolute discretion in respect of the
Indebtedness. In addition, Lender shall have the right from time to time to
partially foreclose this Agreement and the Security Instrument in any manner and
for any amounts secured by this Agreement or the Security Instrument then due
and payable as determined by Lender in its sole discretion including, without
limitation, the following circumstances: (i) in the event Borrower defaults
beyond any applicable grace period in the payment of one or more scheduled
payments of principal or interest, Lender may foreclose this Agreement and the
Security Instrument to recover such delinquent payments, or (ii) in the event
Lender elects to accelerate less than the entire outstanding principal balance
of the Loan, Lender may foreclose this Agreement and the Security Instrument to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by this Agreement or the Security Instrument as
Lender may elect. Notwithstanding one or more partial foreclosures, the Property
shall remain subject to this Agreement and the Security Instrument to secure
payment of sums secured by this Agreement and the Security Instrument and not
previously recovered.
     17.3 Remedies Cumulative; Waivers. Subject to the terms of Article XVIII,
the rights, powers and remedies of Lender under this Agreement and the Security
Instrument shall be cumulative and not exclusive of any other right, power or
remedy which Lender may have against Borrower pursuant to this Agreement or the
other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singly, concurrently or otherwise, at
such time and in such order as Lender may determine in Lender’s sole discretion.
No delay or omission to exercise any remedy, right or power accruing upon an
Event of Default shall impair any such remedy, right or power or shall be
construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as

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may be deemed expedient. A waiver of one Default or Event of Default with
respect to Borrower or any Guarantor shall not be construed to be a waiver of
any subsequent Default or Event of Default by Borrower or any Guarantor or to
impair any remedy, right or power consequent thereon.
     17.4 Costs of Collection. In the event that after an Event of Default:
(a) the Note or any of the Loan Documents is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal
proceeding; (b) an attorney is retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors’ rights
and involving a claim under the Note or any of the Loan Documents; or (c) an
attorney is retained to protect or enforce the lien or any of the terms of this
Agreement, the Security Instrument or any of the Loan Documents; then Borrower
shall pay to Lender all reasonable attorney’s fees, costs and expenses actually
incurred in connection therewith, including costs of appeal, together with
interest on any judgment obtained by Lender at the Default Rate.
XVIII. SPECIAL PROVISIONS
     18.1 Exculpation.
          18.1.1 Exculpated Parties. Except as set forth in this Section 18.1,
the Recourse Guaranty and the Environmental Indemnity, no personal liability
shall be asserted, sought or obtained by Lender or enforceable against
(a) Borrower, Parent or Guarantor, (b) any Affiliate of Borrower, (c) any Person
owning, directly or indirectly, any legal or beneficial interest in Borrower or
any Affiliate of Borrower or (d) any direct or indirect partner, member,
principal, officer, Controlling Person, beneficiary, trustee, advisor,
shareholder, employee, agent, Affiliate or director of any Persons described in
clauses (a) through (d) above (collectively, the “Exculpated Parties”) and none
of the Exculpated Parties shall have any personal liability (whether by suit
deficiency judgment or otherwise) in respect of the Obligations, this Agreement,
the Security Instrument, the Note, the Property or any other Loan Document, or
the making, issuance or transfer thereof, all such liability, if any, being
expressly waived by Lender. The foregoing limitation shall not in any way limit
or affect Lender’s right to any of the following and Lender shall not be deemed
to have waived any of the following:
                    (i) Foreclosure of the lien of this Agreement and the
Security Instrument in accordance with the terms and provisions set forth herein
and in the Security Instrument;
                    (ii) Action against any other security at any time given to
secure the payment of the Note and the other Obligations;
                    (iii) Exercise of any other remedy set forth in this
Agreement or in any other Loan Document which is not inconsistent with the terms
of this Section 18.1;
                    (iv) Any right which Lender may have under Sections 506(a),
506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim
for the full amount of the Indebtedness secured by this Agreement and the
Security Instrument or to require that all collateral shall continue to secure
all of the Indebtedness owing to Lender in accordance with the Loan Documents;
or

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                    (v) The liability of any given Exculpated Party with respect
to any separate written guaranty or agreement given by any such Exculpated Party
in connection with the Loan (including, without limitation, the Recourse
Guaranty and the Environmental Indemnity).
          18.1.2 Carveouts From Non-Recourse Limitations. Notwithstanding the
foregoing or anything in this Agreement or any of the Loan Documents to the
contrary, there shall at no time be any limitation on Borrower’s or any
Guarantor’s liability for the payment (without duplication), in accordance with
the terms of this Agreement, the Note, the Security Instrument and the other
Loan Documents, to Lender of:
               (a) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the fraudulent acts of or intentional misrepresentations by
Borrower, Guarantor or any Affiliate of Borrower or Guarantor;
               (b) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of misapplication or misappropriation by Borrower, General
Partner, Tenant or any of their respective Affiliates of Proceeds, Rents,
Security Deposits and any other funds due to Lender under the Loan Documents
(including issues, profits and/or income thereon), in each case, to the extent
the same have not been applied toward payment of the Indebtedness, or used for
the repair or replacement of the Property in accordance with the provisions of
this Agreement; provided that in such case the measure of damages shall not be
less than the amount of the funds so misapplied or misappropriated;
               (c) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of forfeiture of the Property or Account Collateral due to
criminal activity of Borrower or Guarantor;
               (d) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of (i) the physical waste to the Property, or (ii) the failure
of Borrower to comply with the Section 5.1.24 above;
               (e) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the wrongful removal or destruction of the Property or
Account Collateral, by Borrower, General Partner Tenant or any of their
respective Affiliates or damage to the Property caused by willful misconduct or
gross negligence of Borrower, General Partner, Tenant or any of their respective
Affiliates;
               (f) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the failure to pay Operating Expenses (including charges for
labor and materials) that results in Liens on the Property or Account Collateral
when there is sufficient Operating Income to cover such Operating Expenses;
               (g) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the failure to pay Impositions that results in Liens on the
Property or Account Collateral when there is sufficient Operating Income to
cover such Impositions;

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               (h) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of all or any part of the Property or the Account Collateral
being encumbered by a Lien (other than this Agreement and any other Loan
Document) in violation of the Loan Documents when there is sufficient Operating
Income to discharge such Lien;
               (i) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the failure of Borrower to comply with any of the provisions
of Article XII;
               (j) any loss, damage, cost or expense incurred by or on behalf of
Lender by reason of the misapplication or misappropriation by Manager of the
amounts or other property credited from time to time to the FF&E Holding Account
(including issues, profits and/or income thereon), to the extent the same have
not been used for the repair or replacement of the Property or FF&E in
accordance with the provisions of this Agreement or the Management Agreement;
provided that (i) in such case the measure of damages shall not be less than the
amount of the funds so misapplied or misappropriated, and (ii) the terms of this
Section 18.1.2(j) shall become void from and after the date Borrower and Tenant
deliver to Lender (A) a fully executed Control Agreement granting to and
perfecting in favor of Lender a first priority security interest in the FF&E
Holding Account, and (B) such Opinion of Counsel and other documents or
instruments as Lender shall then reasonable request, in each case, in form and
substance acceptable to Lender;
               (k) the entire amount of the Indebtedness and all liabilities,
obligations, losses, damages, costs and expenses (including, without limitation,
reasonable attorneys’ fees, causes of action, suits, claims, demands and
adjustments of any nature or description whatsoever) which may at any time be
imposed upon, incurred by or awarded against Lender, in the event (and arising
out of such circumstances) that (i) Borrower Transfers the Property, or there is
a Transfer of the equity interests in Borrower, General Partner or any other SPE
Entity in violation of Article VIII (other than as consented to by Lender in
writing); (ii) the Property directly or indirectly is used to secure Debt (other
than Permitted Debt) obtained by or for the benefit of Borrower in violation of
the Loan Documents or otherwise without the consent of Lender, (iii) an
involuntary case is commenced against Borrower under the Bankruptcy Code with
the collusion of Borrower, Guarantor, Tenant or any of their respective
Affiliates, (iv) Borrower commences a voluntary case under the Bankruptcy Code
or an order for relief is entered with respect to the Borrower under the
Bankruptcy Code through the actions of the Borrower, Guarantor or any of their
respective Affiliates at a time when the Borrower is able to pay its debts as
they become due unless Borrower and Guarantor shall have received an opinion of
independent counsel that the General Partner of Borrower has a fiduciary duty to
seek such an order for relief, (v) Borrower, Guarantor or any of their
respective Affiliates raise any defense, counterclaim and/or allegation (other
than good faith defenses, counterclaims or allegations, in each case, as
determined by the finder of facts in such matter) in the exercise of any
remedies by Lender under the Loan Documents, (vi) any breach of the Singe
Purpose Entity provisions of this Agreement and other Loan Documents, in each
case, that is reasonably expected to result in a ruling in favor of substantive
consolidation of Borrower, or (vii) Borrower or Tenant, or any Person on behalf
of Borrower or Tenant (other than Lender) (I) delivers instructions to Manager
contrary to or inconsistent with the instructions set forth on Exhibit A, or
(II) repudiates the payment subordination provided by Tenant for the benefit of
Lender in Exhibit A (other than with the prior written consent of Lender); and

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               (l) reasonable costs of enforcement and collection (including,
reasonable attorney’s fees and expenses) incurred by Lender in connection with
any of the foregoing clauses (a) through (k).
XIX. MISCELLANEOUS
     19.1 Survival. This Agreement and all covenants, indemnifications,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by Lender of the Loan and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect so long as all or any of the Indebtedness is outstanding and unpaid
unless a longer period is expressly set forth herein or in the other Loan
Documents. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on behalf
of Borrower, shall inure to the benefit of the successors and assigns of Lender.
If Borrower consists of more than one person, the obligations and liabilities of
each such person hereunder and under the other Loan Documents shall be joint and
several.
     19.2 Lender’s Discretion. Whenever pursuant to this Agreement, Lender
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Lender, the decision of Lender to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Lender and shall be final and conclusive.
     19.3 Governing Law.
          (A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN
WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
          (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE

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CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT:
CORPORATION SERVICE COMPANY
80 STATE STREET
ALBANY, NEW YORK 12207-2543
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND 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 (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE
SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III)
SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO
HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.
     19.4 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement,
or of the Note, or of any other Loan Document, or consent to any departure
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought (and, if a Securitization
shall have occurred, a Rating Agency Confirmation is obtained), and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on Borrower shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.
     19.5 Delay Not a Waiver. Neither any failure nor any delay on the part of
Lender in insisting upon strict performance of any term, condition, covenant or
agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Note or under any other Loan Document, or any other instrument given
as security therefor, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement, the Note or any other Loan Document, Lender shall
not be deemed to have waived any right

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

     
If to Lender:
  German American Capital Corporation
 
  60 Wall Street, 10th floor
 
  New York, New York 10005
 
  Attention: William Mott and General Counsel
 
  Telecopy No.: (212) 737-4489
 
  Confirmation No.: (212) 250-3606
 
   
With a copy to:
  Skadden, Arps, Slate, Meagher & Flom LLP
 
  Four Times Square
 
  New York, New York 10036
 
  Attention: Harvey R. Uris, Esq.
 
  Telecopy No.: (917) 777-2212
 
  Confirmation No.: (212) 735-3000
 
   
If to Borrower:
  Ashford Crystal Gateway, LP
 
  c/o Ashford Hospitality Trust, Inc.
 
  14185 Dallas Parkway, Suite 1100
 
  Dallas, Texas 75254
 
  Attn: General Counsel
 
  Telecopy No.: (972) 490-9207
 
  Confirmation No.: (972) 778-9207
 
   
With a copy to:
  Andrews & Kurth, LLP
 
  1717 Main Street, Suite 3700
 
  Dallas, Texas 75201
 
  Attn: Brigitte Kimichik, Esq.
 
  Telecopy No.: (214) 659-9605
 
  Confirmation No.: (214) 659-4441

All notices, elections, requests and demands under this Agreement shall be
effective and deemed received upon the earliest of (i) the actual receipt of the
same by personal delivery or otherwise, (ii) one (1) Business Day after being
deposited with a nationally recognized overnight courier service as required
above, (iii) three Business Days after being deposited in the United States mail
as required above or (iv) on the day sent if sent by facsimile with confirmation
on or before

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5:00 p.m. New York time on any Business Day or on the next Business Day if so
delivered after 5:00 p.m. New York time or on any day other than a Business Day.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given as herein required shall be deemed
to be receipt of the notice, election, request, or demand sent.
     19.7 TRIAL BY JURY. BORROWER AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER
IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING
UNDER THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER LOAN
DOCUMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION
THEREOF OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT,
THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT (AS NOW OR
HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND BORROWER HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER
ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF
THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE
MAKING OF THE LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.
     19.8 Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
     19.9 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
     19.10 Preferences. To the extent Borrower makes a payment or payments to
Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.

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     19.11 Waiver of Notice. Borrower shall not be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly provide for the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice. Borrower hereby expressly waives the right to
receive any notice from Lender with respect to any matter for which this
Agreement or the other Loan Documents do not specifically and expressly provide
for the giving of notice by Lender to Borrower.
     19.12 Expenses; Indemnity
               (a) Except as otherwise expressly provided in the Loan Documents,
Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse,
Lender upon receipt of written notice from Lender for all reasonable costs and
expenses (including reasonable attorneys’ fees and disbursements) incurred by
Lender in connection with (i) the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents and the consummation of
the transactions contemplated hereby and thereby and all the costs of furnishing
all opinions by counsel for Borrower (including without limitation any opinions
requested by Lender pursuant to this Agreement); (ii) [intentionally omitted];
(iii) the negotiation, preparation, execution, delivery and administration of
any consents, amendments, waivers or other modifications to this Agreement and
the other Loan Documents and any other documents or matters as required herein
or under the other Loan Documents; (iv) securing Borrower’s compliance with any
requests made pursuant to the provisions of this Agreement; (v) the filing and
recording fees and expenses, mortgage recording taxes, title insurance and
reasonable fees and expenses of counsel for providing to Lender all required
legal opinions, and other similar expenses incurred in creating and perfecting
the Lien in favor of Lender pursuant to this Agreement and the other Loan
Documents; (vi) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting Borrower, this Agreement,
the other Loan Documents, the Property, or any other security given for the
Loan; (vii) enforcing any obligations of or collecting any payments due from
Borrower under this Agreement, the other Loan Documents or with respect to the
Property or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a work-out or of any
insolvency or bankruptcy proceedings and (viii) procuring insurance policies
pursuant to Section 6.1.11; provided, however, that Borrower shall not be liable
for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of
Lender. Any cost and expenses due and payable to Lender may be paid from any
amounts in the Holding Account.
               (b) Borrower shall protect, indemnify and save harmless Lender,
and all officers, directors, stockholders, members, partners, employees, agents,
successors and assigns thereof (collectively, the “Indemnified Parties”) from
and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including all reasonable attorneys’ fees and
expenses actually incurred) imposed upon or incurred by or asserted against the
Indemnified Parties or the Property or any part of its interest therein, by
reason of the occurrence or existence of any of the following (to the extent
Proceeds payable on account of the following shall be inadequate; it being
understood that in no event will the

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Indemnified Parties be required to actually pay or incur any costs or expenses
as a condition to the effectiveness of the foregoing indemnity) prior to (i) the
acceptance by Lender or its designee of a deed-in-lieu of foreclosure with
respect to the Property, or (ii) an Indemnified Party or its designee taking
possession or control of the Property or (iii) the foreclosure of the Security
Instrument, except to the extent caused by the actual willful misconduct or
gross negligence of the Indemnified Parties (other than such willful misconduct
or gross negligence imputed to the Indemnified Parties because of their interest
in the Property): (1) ownership of Borrower’s interest in the Property, or any
interest therein, or receipt of any Rents or other sum therefrom, (2) any
accident, injury to or death of any persons or loss of or damage to property
occurring on or about the Property or any Appurtenances thereto, (3) any design,
construction, operation, repair, maintenance, use, non-use or condition of the
Property or Appurtenances thereto, including claims or penalties arising from
violation of any Legal Requirement or Insurance Requirement, as well as any
claim based on any patent or latent defect, whether or not discoverable by
Lender, any claim the insurance as to which is inadequate, and any Environmental
Claim, (4) any Default under this Agreement or any of the other Loan Documents
or any failure on the part of Borrower to perform or comply with any of the
terms of any Lease or REA within the applicable notice or grace periods, (5) any
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof, (6) any negligence or
tortious act or omission on the part of Borrower or any of its agents,
contractors, servants, employees, sublessees, licensees or invitees, (7) any
contest referred to in Section 7.3 hereof, (8) any obligation or undertaking
relating to the performance or discharge of any of the terms, covenants and
conditions of the landlord contained in the Leases, or (9) the presence at, in
or under the Property or the Improvements of any Hazardous Materials in
violation of any Environmental Law. Any amounts the Indemnified Parties are
legally entitled to receive under this Section which are not paid within 30 days
after written demand therefor by the Indemnified Parties or Lender, setting
forth in reasonable detail the amount of such demand and the basis therefor,
shall bear interest from the date of demand at the Default Rate, and shall,
together with such interest, be part of the Indebtedness and secured by the
Security Instrument. In case any action, suit or proceeding is brought against
the Indemnified Parties by reason of any such occurrence, Borrower shall at
Borrower’s expense resist and defend such action, suit or proceeding or will
cause the same to be resisted and defended by counsel at Borrower’s reasonable
expense for the insurer of the liability or by counsel designated by Borrower
(unless reasonably disapproved by Lender promptly after Lender has been notified
of such counsel); provided, however, that nothing herein shall compromise the
right of Lender (or any Indemnified Party) to appoint its own counsel at
Borrower’s expense for its defense with respect to any action which in its
reasonable opinion presents a conflict or potential conflict between Lender and
Borrower that would make such separate representation advisable; provided
further that if Lender shall have appointed separate counsel pursuant to the
foregoing, Borrower shall not be responsible for the expense of additional
separate counsel of any Indemnified Party unless in the reasonable opinion of
Lender a conflict or potential conflict exists between such Indemnified Party
and Lender. So long as Borrower is resisting and defending such action, suit or
proceeding as provided above in a prudent and commercially reasonable manner,
Lender and the Indemnified Parties shall not be entitled to settle such action,
suit or proceeding without Borrower’s consent which shall not be unreasonably
withheld or delayed, and claim the benefit of this Section 19.12 with respect to
such action, suit or proceeding and Lender agrees that it will not settle any
such action, suit or proceeding without the consent of Borrower; provided,

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however, that if Borrower is not diligently defending such action, suit or
proceeding in a prudent and commercially reasonable manner as provided above,
and Lender has provided Borrower with 30 days’ prior written notice, or shorter
period if mandated by the requirements of applicable law, and opportunity to
correct such determination, Lender may settle such action, suit or proceeding
and claim the benefit of this Section 19.12 with respect to settlement of such
action, suit or proceeding. Any Indemnified Party will give Borrower prompt
notice after such Indemnified Party obtains actual knowledge of any potential
claim by such Indemnified Party for indemnification hereunder. The Indemnified
Parties shall not settle or compromise any action, proceeding or claim as to
which it is indemnified hereunder without notice to Borrower.
     19.13 Exhibits and Schedules Incorporated. The Exhibits and Schedules
annexed hereto are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.
     19.14 Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to this Agreement, the Note and the other Loan Documents shall
take the same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower may otherwise have against any
assignor of such documents, and no such unrelated counterclaim or defense shall
be interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.
     19.15 Liability of Assignees of Lender. No assignee of Lender shall have
any personal liability, directly or indirectly, under or in connection with this
Agreement or any other Loan Document or any amendment or amendments hereto made
at any time or times, heretofore or hereafter, any different than the liability
of Lender hereunder. In addition, no assignee shall have at any time or times
hereafter any personal liability, directly or indirectly, under or in connection
with or secured by any agreement, lease, instrument, encumbrance, claim or right
affecting or relating to the Property or to which the Property is now or
hereafter subject any different than the liability of Lender hereunder. The
limitation of liability provided in this Section 19.15 is (a) in addition to,
and not in limitation of, any limitation of liability applicable to the assignee
provided by law or by any other contract, agreement or instrument, and (b) shall
not apply to any assignee’s gross negligence or willful misconduct.
     19.16 No Joint Venture or Partnership; No Third Party Beneficiaries.
               (a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.
               (b) This Agreement and the other Loan Documents are solely for
the benefit of Lender and Borrower and nothing contained in this Agreement or
the other Loan Documents shall be deemed to confer upon anyone other than Lender
and Borrower any right to insist upon or to enforce the performance or
observance of any of the obligations contained

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herein or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof and no
other Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.
     19.17 Publicity. All news releases, publicity or advertising by Borrower or
its Affiliates through any media intended to reach the general public which
refers to the Loan Documents or the financing evidenced by the Loan Documents,
to Lender, or any of its Affiliates shall be subject to the prior written
approval of Lender, which approval shall not be unreasonably withheld.
     19.18 Waiver of Marshalling of Assets. To the fullest extent permitted by
law, Borrower, for itself and its successors and assigns, waives all rights to a
marshalling of the assets of Borrower, Borrower’s partners and others with
interests in Borrower and of the Property, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the right
of Lender under the Loan Documents to a sale of the Property for the collection
of the Indebtedness without any prior or different resort for collection or of
the right of Lender to the payment of the Indebtedness out of the net proceeds
of the Property in preference to every other claimant whatsoever.
     19.19 Waiver of Counterclaim and other Actions. Borrower hereby expressly
and unconditionally waives, in connection with any suit, action or proceeding
brought by Lender on this Agreement, the Note, the Security Instrument or any
Loan Document, any and every right it may have to (a) interpose any counterclaim
therein (other than a counterclaim which can only be asserted in the suit,
action or proceeding brought by Lender on this Agreement, the Note, the Security
Instrument or any Loan Document and cannot be maintained in a separate action)
and (b) have any such suit, action or proceeding consolidated with any other or
separate suit, action or proceeding.
     19.20 Conflict; Construction of Documents; Reliance. In the event of any
conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or Affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender’s exercise of any such

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rights or remedies. Borrower acknowledges that Lender engages in the business of
real estate financings and other real estate transactions and investments which
may be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.
     19.21 Prior Agreements. This Agreement and the other Loan Documents contain
the entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents and unless specifically set forth in
a writing contemporaneous herewith the terms, conditions and provisions of any
and all such prior agreements do not survive execution of this Agreement.
     19.22 Counterparts. This Agreement may be executed in multiple counterparts
(whether facsimile, original, portable document format or otherwise), each of
which shall constitute an original, but all of which shall constitute one
document.
[NO FURTHER TEXT ON THIS PAGE]

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

            BORROWER:

ASHFORD CRYSTAL GATEWAY LP, a Delaware limited partnership

    By: Ashford Crystal Gateway GP LLC, a
Delaware limited liability company, its
general partner
      By:   /s/ David Brooks         Name:   David Brooks        Title:   Vice
President     

[Marriott Crystal Gateway Loan Agreement Signature Page — Borrower]

         

 

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            LENDER:

GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation
      By:   /s/ Kelly A. Carter        Name:   Kelly A. Carter        Title:  
Vice President              By:   /s/ William C. Mott Jr.        Name:   William
C. Mott Jr.        Title:   Managing Director     

[Marriott Crystal Gateway Loan Agreement Signature Page — Lender]

 

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            LENDER:

GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation
      By:   /s/ Kelly A. Carter         Name:   Kelly A. Carter       Title:  
Vice President              By:   /s/ William C. Mott Jr.         Name:  
William C. Mott Jr.        Title:   Managing Director     

[Loan and Security Agreement-Signature Page]

 

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Solely for purposes of the indemnity
set forth in Section 5.1.25 above
GUARANTOR:
ASHFORD HOSPITALITY LIMITED
PARTNERSHIP, a Delaware limited
partnership

                By:   Ashford GP General Partner LLC, a         Delaware limited
liability company,        its general partner              By:   /s/ David
Brooks         Name:   David Brooks        Title:   Vice President       

[Marriott Crystal Gateway Loan Agreement Signature Page — Guarantor]

 

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SCHEDULE I
Qualified Institutional Holder Requirements
          “Qualified Institutional Holder” means a Person, other than an
individual, Borrower, General Partner, Guarantor or an Affiliate of Borrower,
General Partner or Guarantor, that satisfies the following requirements:
               (a) an insurance company, bank, savings and loan association,
investment bank, trust company, commercial credit corporation, pension plan,
pension fund, pension fund advisory firm, mutual fund, real estate advisory
firm, real estate investment trust or governmental entity or plan,
               (b) an investment company, money management firm or a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act of
1933, as amended, which regularly engages in the business of making or owning
investments of types similar to the Loan,
               (c) an institution substantially similar to any of the foregoing
clauses (a) or (b),
               (d) any entity Controlled by any of the entities described in
clause (a), (b) or (c) above, provided that such entity described in clause (a),
(b) or (c) above satisfies the Minimum Equity Threshold and Minimum Total Assets
Threshold requirements specified below;
               (e) a Qualified Trustee, or single purpose bankruptcy remote
entity which contemporaneously pledges its interest in the Loan, in connection
with the creation of collateralized debt obligations (“CDO”) secured by, or a
financing through an “owner trust” of, such interest (any of the foregoing, a
“CDO Securitization Vehicle”), provided that (1) one or more classes of
securities issued by such CDO Securitization Vehicle is initially rated at least
investment grade by each of the S&P and Moody’s, or (2) the CDO Asset Manager
and, if applicable, each Intervening Trust Vehicle that is not administered and
managed by a CDO Asset Manager which is a Qualified Transferee, are each a
Qualified Transferee under clauses (a), (b), or (c) of this definition,
               (f) a Qualified Trustee in connection with a CMBS securitization
of an interest in the Loan (a “CMBS Securitization Vehicle”), so long as (A) the
special servicer of such Securitization Vehicle has the Required Special
Servicer Rating (and, if it fails to maintain such requirement, shall be
replaced within thirty days) and (B) the entire “controlling class” of such CMBS
Securitization Vehicle is held by one or more entities that are otherwise
Qualified Transferees under clauses (a), (b), (c) or (d) of this definition;
               (g) an investment fund, limited liability company, limited
partnership or general partnership where a Permitted Fund Manager or an entity
that is otherwise a Qualified Transferee under clauses (a), (b), (c) or (d) of
this definition acts as the general partner, managing member or fund manager and
at least 50% of the equity interests in such investment vehicle are owned,
directly or indirectly, by one or more entities that are otherwise Qualified
Transferees under clause (a), (b), (c) or (d) of this definition; or
Schedule I - 1

 

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               (h) any party Controlled, Controlling or under common Control
with the assigning Lender;
provided in each case of clauses (a), (b) or (c) of this definition that such
party has (except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholders’ equity not less than the Minimum
Equity Threshold and total assets not less than the Minimum Total Assets
Threshold (in name or under management), and is regularly engaged in the
business of making or owning commercial real estate loans or commercial loans
similar to the Loan; or any entity Controlling, Controlled by or under common
Control with (in each case, as defined below) any of the entities described in
clauses (a), (b) or (c) above.
          For purposes of this Schedule I only, the following terms shall have
the meanings ascribed to the below:
                    (i) “CDO Asset Manager” with respect to any CDO
Securitization Vehicle, shall mean the entity which is responsible for managing
or administering the applicable interest in the Loan as an underlying asset of
such CDO Securitization Vehicle or, if applicable, as an asset of any
Intervening Trust Vehicle (including, without limitation, the right to exercise
any consent and control rights available to the holder of such interest in the
Loan).
                    (ii) “CDO Securitization Vehicle” has the meaning provided
in the definition of Qualified Transferee.
                    (iii) “CDO” has the meaning provided in the definition of
Qualified Transferee.
                    (iv) “Control” means the ownership, directly or indirectly,
in the aggregate of more than 50% of the beneficial ownership interests of an
entity and the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of an entity, whether through
the ability to exercise voting power, by contract or otherwise (“Controlled” and
“Controlling” have meanings correlative thereto).
                    (v) “Intervening Trust Vehicle” means, with respect to any
CDO Securitization Vehicle, a trust vehicle or entity which holds the applicable
portion of the Loan as collateral securing (in whole or in part) any obligation
or security held by such CDO Securitization Vehicle as collateral for the CDO.
                    (vi) “Mezzanine Loan” shall have the meaning set forth in
the Agreement to which this Schedule I is attached.
                    (vii) “Minimum Equity Threshold” means $250,000,000.
                    (viii) “Minimum Total Assets Threshold” means $600,000,000.
                    (ix) “Permitted Fund Manager” means any Person that on the
date of determination is (A) a nationally recognized manager of investment funds
investing in debt or equity interests relating to commercial real estate,
(B) investing through a fund with

2

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committed capital of at least $250,000,000 and (C) not subject to a bankruptcy
or similar proceeding.
                    (x) “Preferred Equity” shall have the meaning set forth in
the Agreement to which this Schedule I is attached.
                    (xi) “Qualified Trustee” means (A) a corporation, national
bank, national banking association or a trust company, organized and doing
business under the laws of any state or the United States of America, authorized
under such laws to exercise corporate trust powers and to accept the trust
conferred, having a combined capital and surplus of at least $100,000,000 and
subject to supervision or examination by federal or state authority, (B) an
institution insured by the Federal Deposit Insurance Corporation or (C) an
institution whose long term senior unsecured debt is rated either of the then in
effect top two rating categories of each of the Rating Agencies.
                    (xii) “Required Special Servicer Rating” means (A) a rating
of “CSS1” in the case of Fitch, (B) on the S&P list of approved special
servicers in the case of S&P and (C) in the case of Moody’s, such special
servicer is acting as special servicer in a commercial mortgage loan
securitization that was rated by Moody’s within the 12 month period prior to the
date of determination, and Moody’s has not downgraded or withdrawn the then
current rating on any class of commercial mortgage securities or placed any
class of commercial mortgage securities on watch citing the continuation of such
special servicer as special servicer of such commercial mortgage securities.

3

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SCHEDULE II
Restricted Party List

1.   Real Estate Investment Trusts, brands and direct competitors of Parent, and
each of their respective Affiliates

Schedule II - 1

 

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SCHEDULE III
Litigation

1.   None

Schedule III - 1

 

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SCHEDULE IV
REAs

1.   Easement granted to the County Board of Arlington County, Virginia, dated
August 12, 1969, recorded September 23, 1969, in Deed Book 1711, page 306, for
public street and utilities. NOTE: Deed of Partial Vacation and Relocation of
Easement dated October 3, 1980, and recorded January 29, 1981, in Deed Book
2033, page 619.

2.   Certificate dated December 26, 1972, and recorded January 12, 1973, in Deed
Book 1808, page 44, and Order recorded in Deed Book 1878, page 524, evidences
that taking of the following:

  (a)   Easement to construct, reconstruct, alter, operate and maintain a public
street or highway, including any necessary appurtenances thereof, drainage
and/or utilities and cut and/or fill slopes, retaining wall footings and piles
as detailed therein.     (b)   Any and all easements of access, light or air
incident to the land abutting said Limited Access Highway Rt 595, any ramps,
loops or connection at or with intersection highways, pursuant to Article 4,
Chapter 1, Title 33.1 of the Code of Virginia, 1950, as amended.

3.   Certificate dated December 21, 1972, and recorded January 12, 1973, in Deed
Book 1808, page 48, and Order recorded in Deed Book 1877, page 716, evidences
the taking of the following:

  (a)   Easement to construct, reconstruct, alter, operate and maintain in
public street or highway, including any necessary appurtenances thereof,
drainage and/or utilities and cut and/or fill slopes as detailed herein.     (b)
  Any and all easements of access, light or air incident to the land abutting
said Limited Access Highway Rt 595, any ramps, loops or connection at or with
intersection highways, pursuant to Article 4, Chapter 1, Title 33.1 of the Code
of Virginia, 1950, as amended.

4.   Certificate dated December 27, 1972, and recorded January 12, 1973, in Deed
Book 1808, page 51, and Order recorded in Deed Book 1877, page 716, evidences
the taking of the following:

  (a)   Easement to construct, reconstruct, alter, operate and maintain a public
street or highway, including any necessary appurtenances thereof, drainage
and/or utilities, retaining wall footings and piles and cut necessary and cut
and/or fill slopes as detailed therein.     (b)   Any and all easements of
access, light or air incident to the land abutting said Limited Access Highway
Rt 595, any ramps, loops or connection at or with intersection highways,
pursuant to Article 4, chapter 1, Title 33.1 of the Code of Virginia, 1950, as
amended.

Schedule IV - 1

 

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5.   Certificate dated December 21, 1972, and recorded January 12, 1973, in Deed
Book 1808, page 58, and Order recorded in deed Book 1877, page 716, evidences
the taking of the following:

  (a)   Easement to construct, reconstruct, alter, operate and maintain a public
street or highway, including any necessary appurtenances thereof, drainage
and/or utilities retaining wall footings and piles and cut and/or fill slopes as
detailed therein.     (b)   Any and all easements of access, light or air
incident to the land abutting said Limited Access Highway Rt 595, any ramps,
loops or connection at or with intersection highways, pursuant to Article 4,
Chapter 1, Title 33.1 of the Code of Virginia, 1950 as amended.

6.   Certificate dated December 20, 1972, and recorded January 12, 1973, in Deed
Book 1808, page 62, and Order recorded in Deed Book 1877, page 716, evidences
the taking of the following:

  (a)   Easement to construct, reconstruct, alter, operate and maintain a public
street or highway, including any necessary appurtenances thereof, drainage and
/or utilities and cut and/or fill slopes, retaining wall footings and piles as
detailed therein.     (b)   Any and all easements of access, light or air
incident to the land abutting said Limited Access Highway Rt 595, any ramps,
loops or connection at or with intersection highways, pursuant to Article 4,
Chapter 1, Title 33.1 of the Code of Virginia, 1950, as amended.

7.   Certificate dated January 3, 1973, and recorded January 22, 1973, in Deed
Book 1808, page 512, and Order recorded in Deed Book 1877, page 716, evidences
the taking of the following:

  (a)   Easement to construct, reconstruct, alter, operate and maintain a public
street or highway, including any necessary appurtenances thereof, drainage
and/or utilities and cut and/or fill slopes, as detailed therein.     (b)   Any
and all easements of access, light or air incident to the land abutting said
Limited Access Highway Rt 595, any ramps, loops or connection at or with
intersection highways, pursuant to Article 4, Chapter 1, Title 33.1 of the Code
of Virginia, 1950, as amended.

8.   Easement granted to Washington Metropolitan Area Transit Authority recorded
August 21 1973, in Deed Book 1834, page 554, to construct, operate and maintain
an underground rapid rail transit structure and facilities and public utilities
together with appurtenances and rights as partly shown on the Survey.

9.   Easement granted to the County Board of Arlington County, Virginia, dated
September 19, 1980, recorded October 7, 1980, in Deed Book 2023, page 1730, to
provide an underground access easement for emergency vehicles to parking spaces
such as fire

Schedule IV - 2

 

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    fighting equipment, rescue and ambulance and police vehicles together with
appurtenances and rights as detailed therein.

10.   Deed of Easement between Washington Metropolitan Area Transit Authority
and EADS Associates, a Virginia limited partnership, dated December 8, 1980, and
recorded December 22, 1980, Deed Book 2030, page 1375, as partly shown on the
Survey.

11.   Easement granted to Virginia Electric and Power Company dated January 29,
1982, recorded June 14, 1982, in Deed Book 2063, page 1379, to construct,
operate and maintain underground conduits and cables together with appurtenances
and rights as shown on the Survey.

12.   Easement granted to the County Board of Arlington County, Virginia, dated
July 3, 1986, recorded August 27, 1986, in Deed Book 2231, page 1330, for public
street and utility purposes as shown on the Survey.

13.   Terms, duties, conditions, easements, obligations and/or provisions of
Easement Agreement by and between EADS Condominium Corporation, a Virginia
corporation, and EADS Associates, a Virginia limited partnership, dated
August 28, 1986, and recorded September 2 1986, in Deed Book 2232, page 1307,
for reciprocal access, utilities, and encroachments as detailed therein; see
instrument for particulars.

14.   Terms, duties, conditions, obligations and/or provisions contained in
Agreement by and between EADS Associates and the Commonwealth of Virginia,
acting by and through the State Highway and Transportation Commissioner, dated
May 14, 1981, unrecorded.

Schedule IV - 3

 

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EXHIBIT A
IRREVOCABLE DIRECTION LETTER
[see attached]
Exhibit A - 1

 

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IRREVOCABLE DIRECTION LETTER
October 29, 2010
VIA FACSIMILE AND FEDERAL EXPRESS
Marriott Hotel Services, Inc.
c/o Marriott International, Inc.
10400 Fernwood Road
Bethesda, Maryland 20817
Attn: Law Department 52/923 — Hotel Operations
Phone: (301)380-9555
Fax: (301)380-6727
Ladies and Gentlemen:
     Reference is made to that certain Management Agreement between Marriott
Hotel Services, Inc. (together with its successors and permitted assigns,
“Manager”) and Ashford Gateway TRS Corporation (together with its successors and
permitted assigns, “Tenant”) dated as of July 13, 2006, as amended by that
certain (a) side letter dated July 13, 2006, (b) First Amendment dated July 17,
2007, (c) side letter dated September 26, 2008, (d) Second Amendment dated
February 20, 2009, (e) Third Amendment dated December  , 2009, and (f) side
letter dated April 6, 2010 (collectively as amended, the “Management
Agreement”). Reference is also made to that certain (x) Owner Agreement, among
Ashford Crystal Gateway LP, as landlord (together with its successors and
permitted assigns, “Landlord”), Owner, as tenant, and Manager, as manager dated
July 13, 2006 (as modified and amended from time to time, the “Owner
Agreement”), and (y) the Real Estate and Personal Property Taxes Agreement dated
as of February 20, 2009, among Manager, Landlord and Tenant, as amended by the
First Amendment date the date hereof (the “Tax Escrow Agreement”).
     German American Capital Corporation, a Maryland corporation (together with
its successors and assigns, “Lender”) has entered into a financing transaction
with Landlord, pursuant to which Lender has made a $105,000,000 mortgage loan
(“Loan”) to and for the benefit of Landlord. The Loan is evidenced by, inter
alia, that certain Loan and Security Agreement dated the date hereof between
Lender and Landlord (as amended, restated, replaced, supplemented or otherwise
modified from time to time, the “Loan Agreement”). As security for the
obligations of Landlord under such financing transaction, (i) Landlord has
granted to Lender a first lien and security interest in its realty, inventory,
accounts and its tangible and intangible personal property, including, with
limitation all rights of Landlord under, in and to the Management Agreement and
Owner Agreement, and (ii) Tenant has collaterally assigned to Lender all of its
rights under the Management Agreement, Owner Agreement and Tax Escrow Agreement,
in each case, including the right to receive all amounts payable to Tenant or
Landlord under the Management Agreement, Owner Agreement or Tax Escrow
Agreement. As a material inducement to Lender providing such financing to the
Landlord, Lender has required that Landlord and Tenant obtain Manager’s
agreement to the provisions of this Payment Direction Letter.

1

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

 

     Accordingly, Manager hereby agrees with Landlord, Tenant and Lender as
follows:
          (i) With respect to all amounts due or otherwise payable to Tenant or
Landlord pursuant to or otherwise with respect to the Management Agreement or
Owner’s Agreement, Manager is instructed to, and shall, make all such payments
due on and after the date of this Payment Direction Letter directly to the
account listed on Exhibit A, or such other account as may be specified from time
to time by Lender (the “Collection Account"').
          (ii) With respect to all amounts due or otherwise payable to Tenant
pursuant to or otherwise with respect to the Tax Escrow Agreement, Manager is
instructed to, and shall, make all such payments due on and after the date of
this Payment Direction Letter directly to the Collection Account.
          (iii) Without limiting the terms of clauses (i) and (ii) above, Tenant
agrees that Tenant’s right to receive any and all payments or other sums due to
Tenant under the Management Agreement, Owner’s Agreement or Tax Escrow Agreement
is, and from and after the date hereof shall be, subordinated to the payment in
full of the Loan and other Indebtedness (as defined in the Loan Agreement) due
to the Lender. If following the occurrence and during the continuation of an
Event of Default (as defined in the Loan Agreement) Tenant receives any sums
under or on account of the Management Agreement, Owner’s Agreement or Tax Escrow
Agreement for whatever reason or from whatever source, then Tenant shall hold
such sums in trust for the benefit of Lender, and shall, within one Business Day
following receipt of the same, pay and deliver (or cause to be paid or
delivered) such sums directly to Lender.
          (iv) All payments under the Management Agreement or the Owner’s
Agreement shall be made by Manager to the Collection Account and to no other
account, in accordance with the terms of the Management Agreement and the
Subordination, Non- Disturbance and Attornment Agreement of even date herewith,
executed by Lender, Landlord, Tenant and Manager, unless and until Manager
receives written notification from an officer of Lender.
          (v) Without the prior written consent of Lender, each of Tenant and
Landlord agree that it shall not terminate, amend, revoke or modify this Payment
Direction Letter in any manner or direct or cause the Manager to pay any amount
in any manner other than as provided specifically in this Payment Direction
Letter. Lender, and not Manager, shall be responsible for enforcement of the
Landlord’s and Tenant’s agreement not to terminate, amend, revoke or modify this
Payment Direction Letter or direct or cause the Manager to pay any amount other
than as provided specifically herein.
          (vi) The provisions of this Payment Direction Letter cannot be
modified or rescinded without Lender’s prior written consent. The signatures of
Manager, Tenant and Landlord set forth below indicates their agreement with the
terms hereof.
     This Payment Direction Letter shall be governed by, construed in accordance
with and enforced under the laws of the State of New York without references to
its choice of law provisions, and without the aid of any custom, canon or rule
requiring construction against the draftsman. This Payment Direction Letter may
be signed in two or more counterparts (whether

2

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facsimile, original, portable document format or otherwise), each of which shall
constitute an original and together shall constitute one and the same
instrument. Lender is an express third party beneficiary the terms, conditions
and covenants set forth in this Payment Direction Letter.
[REMAINDER OF PAGE BLANK]

3

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If the foregoing is acceptable to Landlord, Tenant, Manager and Lender, please
acknowledge your agreement and acceptance of this Payment Direction Letter by
duly signing and promptly returning a copy of this Payment Direction Letter.

            LANDLORD:

ASHFORD CRYSTAL GATEWAY LP, a
Delaware limited partnership
            By:   Ashford Crystal Gateway GP LLC,
a Delaware limited liability company,
its general partner              By:   /s/ David Brooks         Name:   David
Brooks        Title:   Vice President        OWNER:

ASHFORD GATEWAY TRS CORPORATION, a Delaware corporation
      By:   /s/ David Kimichik         Name:   David Kimichik        Title:  
President     

[Irrevocable direction Letter-signature Page]

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            LENDER:

GERMAN AMERICAN CAPITAL CORPORATION,
a Maryland corporation
      By:   /s/ Kelly a. Carter         Name:   Kelly a. Carter        Title:  
Vice President              By:   /s/ William C. Mott Jr         Name:   William
C. Mott Jr.        Title:   Managing Director     

[Irrevocable direction Letter-signature Page]

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            LENDER:

GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation
      By:           Name:           Title:                 By:           Name:  
        Title:        

          Accepted this 29th day of October, 2010

MARRIOTT HOTEL SERVICES, INC. a
Delaware corporation
      By:   /s/ Horace E. Jordon         Name:   Horace E. Jordon       
Title:   Vice President       

Marriott Crystal Gateway Irrevocable Payment Direction Letter —
Borrower/Tenant/Manager/Lender

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

 

EXHIBIT A TO
PAYMENT DIRECTION LETTER

     
BANK:
  Deutsche Bank Trust Company Americas
ABA NUMBER:
  021001033
ACCOUNT NUMBER:
  01-419-647
REFERENCE:
  PORT S62698.1 HOLDING ACCOUNT
ATTENTION:
  Anabelle Roa

Exhibit A

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EXHIBIT B
BORROWER ORGANIZATIONAL STRUCTURE
[see attached]

Exhibit B-1

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(GRAPHIC) [d80115d8011509.gif]

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EXHIBIT C
INTENTIONALLY OMITTED

Exhibit C-1

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EXHIBIT D
CERTIFICATE OF INDEPENDENT MANAGER/MEMBER/DIRECTOR
     THE UNDERSIGNED,____________________, hereby certifies as follows:
     1. I have been elected to serve as an independent member/manager/director
and independent member/manager/director of _________, a ________ limited
liability company/corporation (the “Company”). [The Company’s sole purpose is to
serve as __________________ (the “Borrower”)].
     2. I am aware that under its Limited Liability Company Agreement/Articles
of Incorporation and By Laws, the Company is required to have at least two
so-called [“Independent Managers” and “Independent Members“][“Independent
Directors”].
     3. I hereby certify that I am aware of the definition of and requirement
for [Independent Managers and Independent Members][Independent Directors] as set
forth in the [Limited Liability Company Agreement][Articles of Incorporation and
By Laws] of the Company, including but not limited to, the requirement that when
voting on a matter put to the vote of[ the membership or board of
managers][board of directors], that notwithstanding that the Company [or the
Borrower] may be insolvent, an Independent Manager/Independent Director shall,
to the extent permitted by law, take into account the interest of the creditors
of the Company [and the Borrower] as well as the interest of the Company [and
the Borrower]. As an [Independent Manager and Independent Member][Independent
Director] of the Company, I will vote in accordance with my fiduciary duties
under applicable law.
     4. I hereby certify that I meet the requirements of [an Independent Manager
and Independent Member as set forth in the Operating Agreement] [an Independent
Director as set forth in the Articles of Incorporation and the By Laws].
     5. I certify that, subject to my fiduciary duties as an[ Independent
Manager and Independent Member][Independent Director], it is my intention as a
so-called [“Independent Manager” and “Independent Member"][“Independent
Director"] to take into account, to the extent permitted by law, the interest of
all creditors of the Company [and the Borrower] as well as the Company [and the
Borrower] in fulfilling my duties as an [Independent Manager and Independent
Member][Independent Director] of the Company.
     6. I understand that German American Capital Corporation and its
successors, participants, transferees and assigns, will rely on this Certificate
in conjunction with loans to be made to the Borrower.
     Executed as of this ___ day of _________, 200__.

                        Print Name:            

Exhibit D-1

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EXHIBIT E
ARTICLE 8 “OPT IN” LANGUAGE
     Section _. Shares and Share Certificates

a.   Shares. A [Member’s limited liability company interest in the Company]
[Partner’s limited partnership interest in the Partnership] shall be represented
by the Shares issued to such [Member by the Company][Partner of the Partnership]
. All of a [Member’s][Partner’s] Shares, in the aggregate, represent such
[Member’s][Partner’s] entire [Partner by the Partnership] [limited liability
company interest in the Company [limited partnership interest in the
Partnership]. The [Member][Partner] hereby agrees that its interest in the
[Company][Partnership] and in its Shares shall for all purposes be personal
property. A [Member] [Partner] has no interest in specific
[Company][Partnership] property. “Share” means a [limited liability company
interest][limited partnership interest] in the [Company][Partnership] held by a
[Member][Partner].   b.   Share Certificates.

  i.   Upon the issuance of Shares to any [Member][Partner] in accordance with
the provisions of this Agreement, the [Company][Partnership] shall issue one or
more Share Certificates in the name of such [Member][Partner]. Each such Share
Certificate shall be denominated in terms of the number of Shares evidenced by
such Share Certificate and shall be signed by the [Member][Partner] on behalf of
the [Company][Partnership]. “Share Certificate” means a non-negotiable
certificate issued by the [Company][Partnership] substantially in the form of
Schedule hereto, which evidences the ownership of one or more Shares. Each Share
Certificate shall bear the following legend: “This certificate evidences an
interest in _______________________ and shall be a security interest for
purposes of Article 8 of the Uniform Commercial Code of the State of Delaware
and the Uniform Commercial Code of any other Jurisdiction.” This provision shall
not be amended, and no such purported amendment to this provision shall be
effective until all outstanding certificates have been surrendered for
cancellation.     ii.   The [Company][Partnership] shall issue a new Share
Certificate in place of any Share Certificate previously issued if the holder of
the Shares represented by such Share Certificate, as reflected on the books and
records of the [Company][Partnership].

  (1)   makes proof by affidavit, in form and substance satisfactory to the
[Company][Partnership], that such previously issued Share Certificate has been
lost, stolen or destroyed.     (2)   requests the issuance of a new Share
Certificate before the [Company][Partnership] has notice that such previously
issued Share Certificate has been acquired by a purchaser for value in good
faith and without notice of an adverse claim;

Exhibit E-1

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  (3)   if requested by the [Company][Partnership], delivers to the
[Company][Partnership] a bond, in form and substance satisfactory to the
[Company][Partnership], with such surety or sureties as the
[Company][Partnership] may direct, to indemnify the [Company][Partnership]
against any claim that may be made on account of the alleged loss, destruction
or theft of the previously issued Share Certificate; and     (4)   satisfies any
other reasonable requirements imposed by the [Company][Partnership].

  iii.   Subject to the restrictions set forth in [describe Loan
Agreement/Mezzanine Loan Agreement restrictions] upon a [Member’s][Partner’s]’s
Transfer in accordance with the provisions of this Agreement of any or all
Shares represented by a Share Certificate, the Transferee of such Shares shall
deliver such Share Certificate to the [Company][Partnership] for cancellation,
and the [Company][Partnership] shall thereupon issue a new Share Certificate to
such Transferee for the number of Shares being Transferred and, if applicable,
cause to be issued to such [Member][Partner] a new Share Certificate for that
number of Shares that were represented by the canceled Share Certificate and
that are not being Transferred. “Transfer” means, with respect to any Shares,
and when used as a verb, to sell or assign such Shares, and, when used as a
noun, shall have a meaning that correlates to the foregoing. “Transferee” means
an assignee or transferee. “Transferor” means the Person making a Transfer.

c.   Free Transferability. Except as limited by the [describe Loan
Agreement/Mezzanine Loan Agreement restrictions], to the fullest extent
permitted by the Act, any [Member][Partner] may, at any time or from time to
time, without the consent of any other Person, Transfer, pledge or encumber any
or all of its Shares. Subject to the restrictions of the [describe Loan
Agreement/Mezzanine Loan Agreement restrictions], the Transferee of any Shares
shall be admitted to the [Company][Partnership] as a substitute member of the
[Company][Partnership] on the effective date of such Transfer upon (i) such
Transferee’s written acceptance of the terms and provisions of this Agreement
and its written assumption of the obligations hereunder of the Transferor of
such Shares, which shall be evidenced by such Transferee’s execution and
delivery to the [Company][Partnership] of an Application for Transfer of Shares
on the reverse side of the Share Certificate representing the Shares being
transferred, and (ii) the recording of such Transferee’s name as a Substitute
[Member][Partner] on the books and records of the [Company][Partnership]. Any
Transfer of any Shares pursuant to this Section __ shall be effective as of the
later of (i) the close of business on the day on which such Transfer occurs, or
(ii) the effective date and time of such Transfer that is designated in the
Application for Transfer of Shares delivered by the Transferee to the
[Company][Partnership].

Exhibit E-2