Exhibit 10.2
 
LOAN AGREEMENT
Dated as of January 5, 2007
Between
SOUTH 17TH STREET OWNERCO, LLC,
as Borrower
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Lender
Property: 120 South 17th Street
                                     Philadelphia, Pennsylvania 19103
 

 

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TABLE OF CONTENTS

              Page  
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
       
 
       
Section 1.1 Definitions
    1  
Section 1.2 Principles of Construction
    22  
 
       
II. GENERAL TERMS
       
 
       
Section 2.1 Loan Commitment; Disbursement to Borrower
    23  
2.1.1 The Loan
    23  
2.1.2 Disbursement to Borrower
    23  
2.1.3 The Note, Mortgage and Loan Documents
    23  
2.1.4 Use of Proceeds
    23  
Section 2.2 Interest; Loan Payments; Late Payment Charge
    23  
2.2.1 Interest Generally
    23  
2.2.2 Interest Calculation
    23  
2.2.3 Payments Generally
    23  
2.2.4 Payment on Maturity Date
    24  
2.2.5 Payments after Default
    24  
2.2.6 Late Payment Charge
    24  
2.2.7 Usury Savings
    24  
2.2.8 Determination of Interest Rate
    25  
Section 2.3 Prepayments
    29  
2.3.1 Voluntary Prepayments
    29  
2.3.2 Mandatory Prepayments
    30  
2.3.3 Prepayments After Default
    30  
Section 2.4 Release of Property
    30  
Section 2.5 Manner of Making Payments; Cash Management
    31  
2.5.1 Deposits into Lockbox Account
    31  
2.5.2 Making of Payments
    31  
2.5.3 No Deductions, etc.
    31  
Section 2.6 Extension of Maturity Date
    31  
Section 2.7 Interest Rate Cap Agreement
    32  
 
       
III. INTENTIONALLY DELETED
       
 
       
IV. REPRESENTATIONS AND WARRANTIES
       
 
       
Section 4.1 Borrower Representations
    34  
4.1.1 Organization
    34  
4.1.2 Proceedings
    34  
4.1.3 No Conflicts
    35  
4.1.4 Litigation
    35  
4.1.5 Agreements
    35  
4.1.6 Title
    35  

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              Page  
4.1.7 No Bankruptcy Filing
    36  
4.1.8 Full and Accurate Disclosure
    36  
4.1.9 No Plan Assets
    36  
4.1.10 Compliance
    36  
4.1.11 Financial Information
    36  
4.1.12 Condemnation
    37  
4.1.13 Federal Reserve Regulations
    37  
4.1.14 Utilities and Public Access
    37  
4.1.15 Not a Foreign Person
    37  
4.1.16 Separate Lots
    37  
4.1.17 Assessments
    37  
4.1.18 Enforceability
    37  
4.1.19 No Prior Assignment
    38  
4.1.20 Intentionally Deleted
    38  
4.1.21 Use of Property
    38  
4.1.22 Certificate of Occupancy; Licenses
    38  
4.1.23 Flood Zone
    38  
4.1.24 Intentionally Deleted
    38  
4.1.25 Boundaries
    38  
4.1.26 Leases
    38  
4.1.27 Intentionally Deleted
    38  
4.1.28 Intentionally Deleted
    39  
4.1.29 Filing and Recording Taxes
    39  
4.1.30 Single Purpose Entity/Separateness
    39  
4.1.31 Management Agreement
    42  
4.1.32 Illegal Activity
    42  
4.1.33 No Change in Facts or Circumstances; Disclosure
    42  
4.1.34 Anti-Terrorism
    43  
4.1.35 Permitted Encumbrance
    43  
Section 4.2 Survival of Representations
    43  
 
       
V. BORROWER COVENANTS
       
 
       
Section 5.1 Affirmative Covenants
    43  
5.1.1 Existence; Compliance with Legal Requirements; Insurance
    43  
5.1.2 Taxes and Other Charges
    44  
5.1.3 Litigation
    45  
5.1.4 Access to Property
    45  
5.1.5 Notice of Default
    45  
5.1.6 Cooperate in Legal Proceedings
    45  
5.1.7 Intentionally Deleted
    45  
5.1.8 Insurance Benefits
    45  
5.1.9 Further Assurances
    45  
5.1.10 Intentionally Deleted
    45  
5.1.11 Financial Reporting
    45  
5.1.12 Business and Operations
    47  
5.1.13 Title to the Property
    47  

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              Page  
5.1.14 Costs of Enforcement
    48  
5.1.15 Estoppel Statement
    48  
5.1.16 Loan Proceeds
    48  
5.1.17 Performance by Borrower
    48  
5.1.18 Confirmation of Good Standing
    48  
5.1.19 No Joint Assessment
    48  
5.1.20 Leasing Matters
    48  
5.1.21 Alterations
    49  
5.1.22 Management of Property
    49  
5.1.23 Hotel Operating Lease
    50  
5.1.24 Philadelphia Repair Work
    50  
Section 5.2 Negative Covenants
    51  
5.2.1 Operation of Property
    51  
5.2.2 Liens
    51  
5.2.3 Dissolution
    51  
5.2.4 Change in Business
    51  
5.2.5 Debt Cancellation
    52  
5.2.6 Affiliate Transactions
    52  
5.2.7 Zoning
    52  
5.2.8 Assets
    52  
5.2.9 Debt
    52  
5.2.10 No Joint Assessment
    52  
5.2.11 Principal Place of Business
    52  
5.2.12 ERISA
    52  
5.2.13 Transfers
    53  
 
       
VI. INSURANCE; CASUALTY; CONDEMNATION
       
 
       
Section 6.1 Insurance
    56  
Section 6.2 Casualty
    60  
Section 6.3 Condemnation
    60  
Section 6.4 Restoration
    61  
 
       
VII. RESERVE FUNDS
       
 
       
Section 7.1 Required Repairs
    65  
Section 7.2 Tax and Insurance Escrow Fund
    65  
Section 7.3 Intentionally Deleted
    66  
Section 7.4 FF&E Reserve Account
    66  
7.4.1 Deposits to the FF&E Reserve Account
    66  
7.4.2 Disbursements from the FF&E Reserve Account
    67  
7.4.3 Performance of FF&E Replacements
    68  
7.4.4 Failure to Perform FF&E Replacements
    70  
7.4.5 Balance in the FF&E Reserve Account
    70  
Section 7.5 Intentionally Deleted
    70  
Section 7.6 Reserve Funds, Generally
    70  
Section 7.7 Intentionally Deleted
    71  

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              Page  
 
       
VIII. DEFAULTS
       
 
       
Section 8.1 Event of Default
    71  
Section 8.2 Remedies
    73  
Section 8.3 Remedies Cumulative; Waivers
    74  
 
       
IX. SPECIAL PROVISIONS
       
 
       
Section 9.1 Sale of Notes and Securitization
    75  
9.1.1 Cooperation
    75  
9.1.2 Loan Components
    76  
9.1.3 Securitization Costs
    76  
9.1.4 Conversion of Loan and Creation of Subordinate Debt
    76  
Section 9.2 Securitization Indemnification
    77  
Section 9.3 Lender ERISA Representations and Covenants
    80  
Section 9.4 Exculpation
    81  
Section 9.5 Termination of Manager
    83  
Section 9.6 Servicer
    83  
 
       
X. MISCELLANEOUS
       
 
       
Section 10.1 Survival
    83  
Section 10.2 Lender’s Discretion
    84  
Section 10.3 Governing Law
    84  
Section 10.4 Modification, Waiver in Writing
    85  
Section 10.5 Delay Not a Waiver
    85  
Section 10.6 Notices
    85  
Section 10.7 Trial by Jury
    87  
Section 10.8 Headings
    87  
Section 10.9 Severability
    87  
Section 10.10 Preferences
    87  
Section 10.11 Intentionally Deleted
    87  
Section 10.12 Intentionally Deleted
    87  
Section 10.13 Expenses; Indemnity
    87  
Section 10.14 Schedules Incorporated
    89  
Section 10.15 Offsets, Counterclaims and Defenses
    89  
Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries
    89  
Section 10.17 Publicity
    90  
Section 10.18 Waiver of Marshalling of Assets
    90  
Section 10.19 Waiver of Counterclaim
    90  
Section 10.20 Conflict; Construction of Documents; Reliance
    90  
Section 10.21 Brokers and Financial Advisors
    90  
Section 10.22 Prior Agreements
    91  
Section 10.23 Counterparts
    91  

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Schedule 1 — Reserved
       
Schedule 2 — Intentionally Deleted
       
Schedule 3 — Organizational Structure Chart of Borrower
       
Schedule 4 — Intentionally Omitted
       
Schedule 5 — Requirements For Replacement Interest Rate Cap Agreements
       

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LOAN AGREEMENT
          THIS LOAN AGREEMENT, dated as of January 5, 2007 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
“Agreement”), is made by and between GREENWICH CAPITAL FINANCIAL PRODUCTS, INC,
a corporation organized and existing under the laws of the state of Delaware,
whose address is 600 Steamboat Road, Greenwich, Connecticut 06830, together with
its successors, assigns and transferees (“Lender”), and SOUTH 17TH STREET
OWNERCO, LLC, a Delaware limited liability company, having an address at 900
North Michigan Avenue, Chicago, Illinois 60611, (“Borrower”).
W I T N E S S E T H:
          WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined)
from Lender; and
          WHEREAS, Lender is willing to make the Loan to Borrower, subject to
and in accordance with the terms of this Agreement and the other Loan Documents
(as hereinafter defined).
          NOW, THEREFORE, in consideration of the making of the Loan by Lender
and the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
          I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
          Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly required or unless the context clearly indicates a contrary
intent:
          “Acceptable Bid Package” means a summary of the substantive terms and
provisions of the proposed Replacement Interest Rate Cap Agreement which
otherwise satisfies the requirements of this Agreement.
          “Acceptable Counterparty” means any Counterparty to the Interest Rate
Cap Agreement that has and shall maintain, until the expiration of the
applicable Interest Rate Cap Agreement, a long-term unsecured debt rating of not
less than “AA-” by S&P, “Aa3” from Moody’s, and “AA-” from Fitch.
          “Acceptable Manager” shall mean any of the following entities
(including any Affiliates thereof): Intercon (operating as Inter-Continental),
Marriott (operating as Ritz Carlton, JW or a full service Marriott), Hilton
(operating as Conrad or a full service Hilton), Starwood (operating as Luxury
Collection, St. Regis, Westin or W), Hyatt, Fairmont, Omni, Carlson, Pan
Pacific, Mandarin Oriental, Four Seasons, Interstate (operating as
Inter-Continental, Ritz Carlton, JW, a full service Marriott, Conrad, a full
service Hilton, Luxury Collection, St. Regis, Westin, W, Hyatt, Fairmont, Omni,
Pan Pacific, Mandarin Oriental or Four Seasons), Highgate (operating as
Inter-Continental, Ritz Carlton, JW, full service Marriott, Conrad, full service

 

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Hilton, Luxury Collection, St. Regis, Westin, W, Hyatt, Fairmont, Omni, Pan
Pacific, Mandarin Oriental or Four Seasons).
          “Accor” shall mean Accor Business and Leisure North America, Inc., a
Florida corporation.
          “Additional Insolvency Opinion” shall have the meaning set forth in
Section 5.2.13(b) hereof.
          “Affiliate” shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
          “Agent” shall mean Wachovia Bank, N.A., or any successor Eligible
Institution acting as Agent under the Cash Management Agreement.
          “Agreement” shall have the meaning set forth in the introductory
paragraph.
          “ALTA” shall mean American Land Title Association, or any successor
thereto.
          “Alteration” shall mean any demolition, alteration, installation,
improvement or expansion of or to the Property or any portion thereof.
Notwithstanding the foregoing, the term “Alteration” shall not include any FF&E
Replacements.
          “Alteration Threshold Amount” shall mean an amount equal to
$2,803,500.00.
          “Applicable State Law” shall have the meaning set forth in
Section 9.3(a) hereof.
          “Approved Bank” shall mean (i) with regard to a Letter of Credit
having a term in excess of three (3) months, a bank or other financial
institution which has a minimum long-term unsecured debt rating of at least “AA”
by S&P and its equivalent by the other Rating Agency or Rating Agencies, as
applicable and (ii) with regard to a Letter of Credit having a term not in
excess of three (3) months, a bank or other financial institution which has a
minimum long-term unsecured debt rating by S&P of at least A-1+ and its
equivalent by the other Rating Agency or Rating Agencies, as applicable.
Notwithstanding the foregoing, Bank of America shall be deemed an “Approved
Bank” provided it maintains a minimum long-term unsecured debt rating of at
least “AA-” by S&P.
          “Assignment of Interest Rate Cap Agreement” shall mean that certain
Collateral Assignment of Interest Rate Protection Agreement, dated as of the
date hereof, from Borrower to Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
          “Assignment of Leases” shall mean that certain first priority
Assignment of Leases and Rents, dated as of the date hereof, from Borrower, as
assignor, to Lender, as assignee, assigning to Lender all of Borrower’s interest
in and to the Leases and Rents of the Property as security for the Loan, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

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          “Assignment of Management Agreement” shall mean that certain Hotel
Assignment, Consent and Recognition Agreement dated as of the date hereof among
Lender, Borrower and Manager, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
          “Assumed Note Rate” shall have the meaning set forth in
Section 2.3.1(c).
          “Award” shall mean any compensation paid by any Governmental Authority
in connection with a Condemnation in respect of all or any part of the Property.
          “Bankruptcy Code” shall mean Title 11 of the United States Code, 11
U.S.C. §101, et seq., as the same may be amended from time to time, and any
successor statute or statutes and all rules and regulations from time to time
promulgated thereunder, and any comparable foreign laws relating to bankruptcy,
insolvency or creditors’ rights or any other Federal or state bankruptcy or
insolvency law.
          “Basic Carrying Costs” shall mean the sum of the following costs
associated with the Property for the relevant Fiscal Year or payment period:
(i) Taxes and (ii) Insurance Premiums.
          “Borrower” shall have the meaning set forth in the introductory
paragraph of this Agreement, together with its successors and permitted assigns.
          “Borrower’s Remainder” shall have the meaning set forth in the Cash
Management Agreement.
          “Breakage Costs” shall have the meaning set forth in Section 2.2.8.
          “Business Day” shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, New York are not open for
business.
          “Capital Expenditures” shall mean, for any period, the amount expended
for items capitalized under GAAP (including expenditures for building
improvements or major repairs, leasing commissions and tenant improvements).
          “Cash Management Account” shall have the meaning set forth in the Cash
Management Agreement.
          “Cash Management Agreement” shall mean that certain Cash Management
Agreement by and among Borrower, Agent and Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
          “Cash Management Period” means any period commencing on the first
Business Day after the occurrence of the Cash Management Trigger Event through
the first Payment Day after Lender’s determination, in its reasonable judgment,
that the Event of Default giving rise to such Cash Management Trigger Event no
longer exists.

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          “Cash Management Trigger Event” shall mean the occurrence and
continuance of an Event of Default.
          “Casualty” shall have the meaning set forth in Section 6.2 hereof.
          “Casualty Consultant” shall have the meaning set forth in
Section 6.4(b)(iii) hereof.
          “Casualty Retainage” shall have the meaning set forth in
Section 6.4(b)(iv) hereof.
          “Closing Date” shall mean the date of this Agreement.
          “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.
          “Condemnation” shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
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.
          “Condemnation Proceeds” shall have the meaning set forth in
Section 6.4(b) hereof.
          “Constituent Member” shall mean any direct member or partner in
Borrower and any Person that, directly or indirectly through one or more other
partnerships, limited liability companies, corporations or other entities is a
member or partner in Borrower.
          “control” (and the correlative terms “controlled by” and “controlling”
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of management and policies of the business and affairs of
the entity in question by reason of the ownership of beneficial interests, by
contract or otherwise.
          “Counterparty” means the Person which is the issuer of the Interest
Rate Cap Agreement.
          “Debt” shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums (including the Spread Maintenance Premium) due
to Lender in respect of the Loan under the Note, this Agreement, the Mortgage or
any other Loan Document.
          “Debt Service” shall mean, with respect to any particular period of
time, scheduled principal and/or interest payments due and payable during such
period under the Note.

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          “Debt Service Payment Amount” shall mean, as to a specific Payment
Date, the interest which accrued on the outstanding principal balance of the
Loan for the applicable Interest Period.
          “Default” shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
          “Default Rate” shall mean a rate per annum equal to the lesser of
(a) the Maximum Legal Rate or (b) four percent (4%) above the Regular Interest
Rate.
          “Determination Date” shall mean, with respect to any Interest Period,
the date which is two London Business Days prior to the fifth (5th) day of the
calendar month in which such Interest Period commences.
          “Disclosure Document” shall have the meaning set forth in
Section 9.2(a) hereof.
          “Eligible Account” shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or
(b) a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.
          “Eligible Institution” shall mean a depository institution or trust
company the deposits of which are insured by the Federal Deposit Insurance
Corporation and the short term unsecured debt obligations or commercial paper of
which (or its parent holding company) are rated at least A-1 by S&P, P-1 by
Moody’s and F-1+ by Fitch in the case of accounts in which funds are held for
30 days or less (or, in the case of accounts in which funds are held for more
than 30 days, the long term unsecured debt obligations of which are rated at
least “AA” by S&P and Fitch and “Aa2” by Moody’s).
          “Environmental Indemnity” shall mean that certain Environmental
Indemnity Agreement executed by Borrower in connection with the Loan for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
          “Equipment” shall have the meaning set forth in the granting clause of
the Mortgage.
          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.
          “Event of Default” shall have the meaning set forth in Section 8.1(a)
hereof.

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          “Exchange Act” shall have the meaning set forth in Section 9.2(a)
hereof.
          “Exculpated Parties” shall have the meaning set forth in Section 9.4
hereof.
          “Executive Order” shall have the meaning set forth in
Section 4.1.34(a) hereof.
          “Extension Option” shall have the meaning set forth in Section 2.6
hereof.
          “Extension Term” shall mean, collectively, the First Extension Term,
the Second Extension Term and the Third Extension Term.
          “FF&E” shall mean all fixtures, furniture, furnishings, equipment
(including operating equipment, operating supplies and fixtures attached to and
forming part of the Improvements), apparatus and other personal property used
in, or held in storage for use in (or if the context so dictates, required in
connection with), or required for the operation of that portion of Improvements
to be used as a hotel in accordance with this Agreement, including, without
limitation, (i) office furnishings and equipment, (ii) specialized hotel and spa
equipment necessary for the operation of any portion of the Improvements,
including equipment for kitchens, laundries, dry cleaning facilities, bars,
restaurants, public rooms, commercial and parking space, spa and recreational
facilities, and (iii) all other furnishings and equipment as Borrower deems
necessary or desirable for the operation of that portion of Improvements to be
used as a hotel in accordance with this Agreement.
          “FF&E Expenditures” shall mean hard and soft costs incurred in
connection with the FF&E Replacements.
          “FF&E Replacements” means the refurbishment, replacement or
installation of FF&E as may be necessary or desirable to maintain and operate a
reputable hotel in accordance with this Agreement.
          “FF&E Reserve Account” shall have the meaning set forth in
Section 7.4.1 hereof.
          “FF&E Reserve Fund” shall have the meaning set forth in Section 7.4.1
hereof.
          “First Extended Maturity Date” shall mean February 1, 2010, or if
February 1, 2010 is not a Business Day, the first Business Day succeeding
February 1, 2010.
          “First Extension Term” shall have the meaning set forth in Section 2.6
hereof.
          “Fiscal Year” shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan.
          “Fitch” shall mean Fitch, Inc.
          “Force Majeure” shall mean acts of god, governmental restrictions,
stays, judgments, orders, decrees, enemy actions, civil commotion, fire,
casualty, strikes or work stoppages which are industry-wide and not aimed at
Borrower nor its Affiliates, or other causes

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beyond the reasonable control of Borrower and/or its Affiliates, but Borrower’s
lack of funds in and of itself shall not be deemed a cause beyond the control of
Borrower.
          “Foreign Taxes” shall have the meaning set forth in Section 2.2.8
hereof.
          “GAAP” shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
          “GEM” shall mean GEM Realty Fund III, L.P., a Delaware limited
partnership.
          “GEM Guaranty” shall mean that certain Guaranty of Recourse
Obligations executed and delivered by GEM in connection with the Loan for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
          “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.
          “Greenwich” shall have the meaning set forth in Section 9.2(b) hereof.
          “Greenwich Entity” shall mean any one or more funds, investment
vehicles or similar Person(s) controlled, directly or indirectly, by Greenwich
Capital Financial Products, Inc.
          “Greenwich Group” shall have the meaning set forth in Section 9.2(b)
hereof.
          “Gross Income from Operations” shall mean all income, computed in
accordance with GAAP, derived from the ownership and operation of the Property
from whatever source, including, but not limited to, Rents, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits, and
other required pass-throughs and amounts paid under any Interest Rate Cap
Agreement but excluding sales, use and occupancy or other taxes on receipts
required to be accounted for by Borrower to any Governmental Authority, refunds
and uncollectible accounts, sales of furniture, fixtures and equipment,
Insurance Proceeds (other than business interruption or other loss of income
insurance), Awards, unforfeited security deposits, utility and other similar
deposits and any disbursements to Borrower from the Reserve Funds. Gross Income
from Operations shall not be diminished as a result of the Mortgage or the
creation of any intervening estate or interest in the Property or any part
thereof.
          “Guarantor” shall mean, individually or collectively, as the context
requires, Whitehall, and GEM.
          “Guaranty” shall mean, collectively, the Whitehall Guaranty and the
GEM Guaranty.
          “Hotel Operator” shall mean South 17th Street LeaseCo, LLC.

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          “Hotel Operator Sole Member” shall mean South 17th Street LeaseCo
Mezzanine, LLC, a Delaware limited liability company.
          “Hotel Operating Lease” shall mean the lease dated as of the date
hereof between Borrower and Hotel Operator.
          “Improvements” shall have the meaning set forth in the granting clause
of the Mortgage.
          “Indebtedness” of a Person, at a particular date, means the sum
(without duplication) at such date of (a) indebtedness or liability for borrowed
money; (b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations evidenced by a note or similar instrument for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under acceptance
facilities; (f) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other similar contingent
obligations to purchase, to provide funds for payment, to supply funds, to
invest in any Person or entity, or otherwise to assure a creditor against loss;
and (g) obligations secured by any Liens, whether or not the obligations have
been assumed.
          “Independent Member” shall have the meaning set forth in
Section 4.1.30(p).
          “Indemnified Claims” shall have the meaning set forth in
Section 10.13(b).
          “Indemnified Liabilities” shall have the meaning set forth in Section
10.13(b).
          “Initial Maturity Date” shall mean February 1, 2009.
          “Insolvency Opinion” shall mean that certain opinion letter dated the
date hereof delivered by Levenfeld Pearlstein LLP in connection with the Loan.
          “Institutional Lender” shall mean an affiliate of Whitehall (including
GSG) and/or any one of more of the following other entities, provided that for
any such other entity to qualify as an Institutional Lender hereunder, such
other entity, together with its affiliates, must have total assets of at least
$1,000,000,000.00 and stockholders’ equity or net worth of at least
$250,000,000.00 (or, in either case, the equivalent thereof in a foreign
currency) as of the date the loan is made: a savings bank, a savings and loan
association, a commercial bank or trust company, an insurance company subject to
regulation by any governmental authority or body, a real estate investment
trust, a union, a governmental or secular employees’ welfare, benefit, pension
or retirement fund, a pension fund property unit trust (whether authorized or
unauthorized), an investment company or trust, a merchant or investment bank or
any other entity generally viewed as an institutional lender. In each of the
foregoing cases, such affiliate or other entity shall constitute an
Institutional Lender whether (1) acting for itself or (2) as trustee, as a
general partner of a partnership, in a fiduciary, management or advisory
capacity or, in the case of a bank, as agent bank, for any number of lenders, so
long as in the case of clause (2) the day-to-day management decisions relating
to the loan are either exercised by or recommended by such Institutional Lender.
Notwithstanding the first sentence of this paragraph, a real estate investment
trust that invests primarily in mortgage loans and investment securities, is
taxed as a

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real estate investment trust and, if unaffiliated, has total assets of at least
$650,000,000.00 and a net worth of at least $100,000,000.00, shall qualify as an
Institutional Lender despite its failure to meet the total asset and net worth
tests set forth in such first sentence. As used herein, “GSG” shall mean The
Goldman Sachs Group, Inc. and/or its successors and assigns and shall include
any person or entity that succeeds (by contract, operation of law or otherwise)
to all or substantially all of the assets of and business conducted by GSG.
          “Insurance Premiums” shall have the meaning set forth in
Section 6.1(b) hereof.
          “Insurance Proceeds” shall have the meaning set forth in
Section 6.4(b) hereof.
          “Interest Period” shall mean (i) the period from the date hereof
through the first day thereafter that is the last day of a calendar month and
(ii) each period thereafter from the 1st day of each calendar month through the
last day of each such calendar month; provided, however, that no Interest Period
shall end later than the Maturity Date (other than for purposes of calculating
interest at the Default Rate), and the initial Interest Period shall begin on
and include the Closing Date and shall end on and include the last day of the
calendar month in which the Closing Date occurs.
          “Interest Rate Cap Agreement” shall mean the Interest Rate Cap
Agreement (together with the confirmation and schedules relating thereto),
between an Acceptable Counterparty and Borrower obtained by Borrower as and when
required pursuant to Section 2.7. After delivery of a Replacement Interest Rate
Cap Agreement to Lender, the term “Interest Rate Cap Agreement” shall be deemed
to mean such Replacement Interest Rate Cap Agreement.
          “Lease” shall mean any lease, sublease or subsublease, letting,
license, concession or other agreement (whether written or oral and whether now
or hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Property, and every modification, amendment or other agreement relating to such
lease, sublease, subsublease, or other agreement entered into in connection with
such lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.
          “Legal Requirements” shall mean all federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting the
Property or any part thereof, or the construction, use, Alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force, and
all permits, licenses and authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting the Property or any part thereof, including, without limitation, any
which may (a) require repairs, modifications or Alterations in or to the
Property or any part thereof, or (b) in any way limit the use and enjoyment
thereof.

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          “Lender” shall mean Greenwich Capital Financial Products, Inc, a
corporation organized and existing under the laws of the state of Delaware,
together with its successors, assigns and transferees.
          “Letter of Credit” shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit which is either (a) an
“evergreen” letter of credit (meaning, for the purposes of this definition, a
Letter of Credit which is automatically renewed unless the issuer thereof
provides not less than sixty (60) days notice to Lender that said Letter of
Credit will not be automatically renewed) or (b) one which does not expire until
at least ten (10) Business Days after (i) the Maturity Date or (ii) the date
that is one (1) year from the Closing Date (in which event such Letter of Credit
shall, within thirty (30) days of expiration of maturity, be either renewed
annually for 12-month periods until such Letter of Credit is no longer required
by this Agreement or replaced with another Letter of Credit with a term expiring
not earlier than ten (10) Business Days after the Maturity Date) and which
Letter of Credit is in form and substance reasonably satisfactory to Lender, and
entitles Lender as beneficiary thereunder to draw thereon based solely on a
statement purportedly executed by an officer of Lender stating that it has the
right to draw thereon, and issued by a domestic Approved Bank or the U.S. agency
or branch of a foreign Approved Bank, provided that if there are no domestic
Approved Banks or U.S. agencies or branches of a foreign Approved Bank then
issuing letters of credit, then such letter of credit may be issued by a
domestic bank, the long term unsecured debt rating of which is the highest such
rating then given by the Rating Agency or Rating Agencies, as applicable, to a
domestic commercial bank.
          “Liabilities” shall have the meaning set forth in Section 9.2(b)
hereof.
          “LIBOR Rate” shall mean for each Interest Period, the quoted offered
rate for one-month United States dollar deposits with leading banks in the
London interbank market that appears as of 11:00 a.m. (London time) on the
related Determination Date on Telerate Page 3750.
          If, as of such time on any Determination Date, no quotation is given
on Telerate Page 3750, then Lender shall establish the LIBOR Rate on such
Determination Date by requesting four Reference Banks meeting the criteria set
forth herein to provide the quotation offered by its principal London office for
making one-month United States dollar deposits with leading banks in the London
interbank market as of 11:00 a.m., London time, on such Determination Date.
     (i) If two or more Reference Banks provide such offered quotations, then
the LIBOR Rate for the next Interest Period shall be the arithmetic mean of such
offered quotations (rounded upward if necessary to the nearest whole multiple of
1/1,000%).
     (ii) If only one or none of the Reference Banks provides such offered
quotations, then the LIBOR Rate for the next Interest Period shall be the
Reserve Rate.
     (iii) If on any Determination Date, Lender is required but is unable to
determine the LIBOR Rate in the manner provided in paragraphs (i) and
(ii) above, the

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LIBOR Rate for the next Interest Period shall be the LIBOR Rate as determined on
the preceding Determination Date.
          The establishment of the LIBOR Rate on each Determination Date by
Lender shall be final and binding absent manifest error.
          “LIBOR Spread” shall mean One Hundred Thirty basis points (1.30%).
          “Licenses” shall have the meaning set forth in Section 4.1.22 hereof.
          “Lien” shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting Borrower, 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 mechanic’s, materialmen’s and other similar liens and
encumbrances.
          “Loan” shall mean the loan made by Lender to Borrower in the original
principal amount of Fifty-Six Million Seventy Thousand and No/100 Dollars
($56,070,000.00) which is evidenced by the Note and secured by the Mortgage and
the other Loan Documents.
          “Loan Documents” shall mean, collectively, this Agreement, the Note,
the Mortgage, the Assignment of Leases, the Environmental Indemnity, the
Assignment of Management Agreement, the Assignment of Interest Rate Cap
Agreement, the Cash Management Agreement, the Lockbox Agreement (if, as and when
established), the Guaranty and all other documents executed and/or delivered in
connection with the Loan.
          “Lockbox Account” shall have the meaning set forth in Section 2.5.1(a)
hereof.
          “Lockbox Agreement” shall have the meaning set forth in the Cash
Management Agreement.
          “Lockbox Bank” shall have the meaning set forth in the Cash Management
Agreement.
          “London Business Day” shall mean any day other than a Saturday, Sunday
or any other day on which commercial banks in London, England are not open for
business.
          “Management Agreement” shall mean the management agreement entered
into by and between Hotel Operator and Manager, pursuant to which Manager is to
provide management and other services with respect to the Property, as the same
may be amended or modified in accordance with the terms and provisions hereof.
          “Management Agreement Guaranty” shall mean that certain guaranty of
Hotel Operator’s obligations under the Management Agreement by Borrower, as same
may be modified, amended and/or restated.

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          “Management Termination Event” shall have the meaning set forth in the
Cash Management Agreement.
          “Manager” shall mean Accor Business and Leisure Management, LLC, a
Delaware limited liability company.
          “Material Adverse Effect” shall mean any event or condition that has a
material adverse effect on (i) the use, value or possession of the Property
taken as a whole (including the Net Operating Income), (ii) the business,
prospects, profits, operations or condition (financial or otherwise) of
Borrower, or (iii) the ability of Borrower to repay the principal and interest
of the Loan as it becomes due.
          “Material Lease” shall mean a Lease demising more than 2,500 square
feet at the Property.
          “Maturity Date” shall mean the Initial Maturity Date or, upon an
exercise of the first Extension Option set forth in Section 2.6 of this
Agreement, the First Extended Maturity Date, or upon an exercise of the second
Extension Option set forth in Section 2.6 of this Agreement, the Second Extended
Maturity Date, or upon an exercise of the third Extension Option set forth in
Section 2.6 of this Agreement, the Third Extended Maturity Date.
          “Maximum Legal Rate” shall mean the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
          “Moody’s” shall mean Moody’s Investors Service, Inc.
          “Mortgage” shall mean that certain first priority Open-End Mortgage,
Absolute Assignment of Leases and Rents, Security Agreement, and Fixture Filing
dated the date hereof, executed and delivered by Borrower as security for the
Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
          “Net Cash Flow” for any period shall mean the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.
          “Net Cash Flow After Debt Service” shall mean (i) for any period that
a Replacement Management Agreement is in effect, the amount obtained by
subtracting Debt Service for such period from Net Cash Flow for such period or
(ii) for any period that the Management Agreement is in effect, the “Borrower’s
Remainder”.
          “Net Cash Flow Schedule” has the meaning set forth in Section 5.1.11
hereof.
          “Net Operating Income” means the amount obtained by subtracting
Operating Expenses from Gross Income from Operations.

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          “Net Proceeds” shall have the meaning set forth in Section 6.4(b)
hereof.
          “Net Proceeds Deficiency” shall have the meaning set forth in Section
6.4(b)(vi) hereof.
          “Note” shall mean that certain Promissory Note of even date herewith
in the principal amount of Fifty-Six Million Seventy Thousand and No/100 Dollars
($56,070,000.00), made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
          “Officers’ Certificate” shall mean a certificate delivered to Lender
by Borrower which is signed by an authorized senior officer of Borrower.
          “Operating Expenses” shall mean the total of all expenditures,
computed in accordance with GAAP, of whatever kind relating to the operation,
maintenance and management of the Property that are incurred on a regular
monthly or other periodic basis, including, without limitation, utilities,
ordinary repairs and maintenance, insurance, license fees, property taxes and
assessments, advertising expenses, management fees, payroll and related taxes,
computer processing charges, operational equipment or other lease payments as
approved by Lender, and other similar costs, but excluding depreciation, Debt
Service, Capital Expenditures and contributions to the Reserve Funds.
          “Other Charges” shall mean all ground rents, maintenance charges,
impositions other than Taxes, 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.
          “Patriot Act” shall have the meaning set forth in Section 4.1.34(a)
hereof.
          “Payment Date” shall mean the first (lst) day of each calendar month
during the term of the Loan or, if such day is not a Business Day, the
immediately succeeding Business Day.
          “Permitted Debt” shall have the meaning set forth in Section 4.1.30(e)
hereof.
          “Permitted Encumbrances” shall mean, collectively, (a) the Liens and
security interests created by the Loan Documents, (b) those exceptions shown in
the Title Insurance Policy; (c) liens for Taxes or Other Charges or levies,
either not yet due and payable or to the extent that non-payment thereof is
permitted by the terms hereof; (d) workers, mechanics, or other similar liens on
the Property arising after the date hereof in the ordinary course of business,
and which are being contested in good faith as required by the terms hereof;
(e) deposits securing or in lieu of surety, appeal or customs bonds in
proceedings to which Borrower is a party; (f) any attachment or judgment lien,
provided that the judgment it secures shall, within sixty (60) days after the
entry thereof, have been bonded, discharged or execution thereof stayed pending
appeal, or shall have been discharged within sixty (60) days after the
expiration of any such stay; (g) liens or encumbrances, expressly allowed by the
Loan Documents, mechanics’ liens, which are subordinate to the lien of the
Mortgage, arising out of work performed by or materials furnished to or on
behalf of Borrower (and which are being contested in good faith as required by
the terms

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hereof); and (h) easements, rights-of-way, restrictions (including zoning
restrictions), defects or irregularities in title and other similar title
matters not, in any material respect, interfering with the operation, use or
value of the property encumbered or affected (provided that the foregoing clause
(h) shall in no way be deemed a waiver by Lender of, or otherwise operate to
impair, any rights or remedies Lender may have under the Title Insurance Policy
with respect to items described in such clause which are not excluded from
coverage under the Title Insurance Policy).
          “Permitted Investments” shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by Servicer, the trustee under any Securitization or any
of their respective Affiliates, payable on demand or having a maturity date not
later than the Business Day immediately prior to the first monthly Payment Date
following the date of acquiring such investment and meeting one of the
appropriate standards set forth below:
     (i) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or instrumentality
thereof provided such obligations are backed by the full faith and credit of the
United States of America including, without limitation, obligations of: the U.S.
Treasury (all direct or fully guaranteed obligations), the Farmers Home
Administration (certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime Administration
(guaranteed Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed transit bonds);
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;
     (ii) Federal Housing Administration debentures;
     (iii) obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

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     (iv) federal funds, unsecured certificates of deposit, time deposits,
bankers’ acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency in the highest
short term rating category and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an “r” highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;
     (v) fully Federal Deposit Insurance Corporation-insured demand and time
deposits in, or certificates of deposit of, or bankers’ acceptances issued by,
any bank or trust company, savings and loan association or savings bank, the
short term obligations of which at all times are rated in the highest short term
rating category by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency in the highest short term rating category
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;
     (vi) debt obligations with maturities of not more than 365 days and at all
times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities) in its highest
long-term unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;
     (vii) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than

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365 days and that at all times is rated by each Rating Agency (or, if not rated
by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities) in its highest short-term unsecured debt rating; provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;
     (viii) units of taxable money market funds or mutual funds, which funds are
regulated investment companies, seek to maintain a constant net asset value per
share and invest solely in obligations backed by the full faith and credit of
the United States, which funds have the highest rating available from each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) for money market funds or mutual
funds; and
     (ix) any other security, obligation or investment which has been approved
as a Permitted Investment in writing by (a) Lender and (b) each Rating Agency,
as evidenced by a written confirmation that the designation of such security,
obligation or investment as a Permitted Investment will not, in and of itself,
result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities by such Rating Agency;
provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.
          “Permitted Owner” shall mean a Person who satisfies the following:
(i) a Qualified Transferee or an Affiliate of a Qualified Transferee that is
directly or indirectly wholly owned by such Qualified Transferee; (ii) a Sponsor
or an Affiliate of a Sponsor that is directly or indirectly wholly owned by such
Sponsor; or (iii) any other Person (a) reasonably approved by Lender or, (b) if
a Securitization shall have occurred, regarding which Person Lender shall have
received written confirmation by the Rating Agencies that the transfer to such
Person will not, in and of itself, cause a downgrade, withdrawal or
qualification of the then current ratings of the Securities issued pursuant to
the Securitization.
          “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.

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          “Personal Property” shall have the meaning set forth in the granting
clause of the Mortgage.
          “Policies” shall have the meaning specified in Section 6.1(b) hereof.
          “Prepayment Release Date” shall mean February 1, 2008.
          “Prime Rate” shall mean the annual rate of interest publicly announced
by Citibank, N.A. in New York, New York, as its base rate, as such rate shall
change from time to time. If Citibank, N.A. ceases to announce a base rate,
Prime Rate shall mean the rate of interest published in The Wall Street Journal
from time to time as the “Prime Rate.” If The Wall Street Journal ceases to
publish the “Prime Rate,” the Lender shall select an equivalent publication that
publishes such “Prime Rate,” and if such “Prime Rates” are no longer generally
published or are limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a reasonably comparable
interest rate index.
          “Prime Rate Loan” shall mean the Loan at such time as interest thereon
accrues at a rate of interest based upon the Prime Rate plus the Prime Rate
Spread.
          “Prime Rate Spread” shall mean the difference (expressed as the number
of basis points) between (a) LIBOR Rate plus the LIBOR Spread on the date LIBOR
Rate was last applicable to the Loan and (b) the Prime Rate on the date that
LIBOR Rate was last applicable to the Loan; provided, however, in no event shall
such difference be a negative number.
          “Prohibited Person” shall mean any Person:
     (i) listed in the Annex to, or is otherwise subject to the provisions of,
the Executive Order;
     (ii) known to Borrower to be owned or controlled by, or acting for or on
behalf of, any Person that is listed in the Annex to, or is otherwise subject to
the provisions of the Executive Order;
     (iii) with whom Lender is prohibited from dealing or otherwise engaging in
any transaction by any terrorism or money laundering or other Legal
Requirements, including the Patriot Act and the Executive Order;
     (iv) that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order;
     (v) that is named as a “specifically designated national (SDN) and blocked
person” on the most current list published by the U.S. Treasury Department
Office of Foreign Assets Control at its official website,
http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or other
replacement official publication of such list; or
     (vi) that is known to Borrower to be an Affiliate of a Person described in
one or more of clauses (i) — (v) of this definition of Prohibited Person.

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          “Property” shall mean the parcel of real property, the Improvements
thereon, the Equipment and all personal property owned by Borrower and
encumbered by the Mortgage, together with all rights pertaining to each of the
foregoing and Improvements, all as more particularly described in the granting
clauses of the Mortgage and referred to therein as the “Property”.
          “Provided Information” shall have the meaning set forth in
Section 9.1.1(a) hereof.
          “Purchaser” shall have the meaning set forth in Section 9.3(b) hereof.
          “Qualifying Manager” shall mean (i) Manager, or (ii) such other
reputable management organization that has at least five (5) years experience
managing at least five (5) hotel properties that are reasonably comparable in
quality to the Property (such entity, a “Successor Manager”), or (iii) any
Acceptable Manager.
          “Qualified Transferee” shall mean any one of the following Persons:
     (i) a pension fund, pension trust, or pension account or other Person that
(a) has total real estate assets of at least One Billion Dollars and (b) is
managed or controlled by a Person who controls at least One Billion Dollars of
real estate equity assets; or
     (ii) a pension fund advisor who (a) immediately prior to such transfer,
controls at least One Billion Dollars of real estate equity assets and (b) is
acting on behalf of one or more pension funds that, in the aggregate, satisfy
the requirements of clause (i) of this definition; or
     (iii) an insurance company which is subject to supervision by the insurance
commissioner, or a similar official or agency, of a state or territory of the
United States (including the District of Columbia) (a) with a net worth, as of a
date no more than six (6) months prior to the date of the transfer of at least
Five Hundred Million Dollars and (b) who, immediately prior to such transfer,
controls real estate equity assets of at least One Billion Dollars; or
     (iv) 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)
(a) with a combined capital and surplus of at least Five Hundred Million Dollars
and (b) who, immediately prior to such transfer, controls real estate equity
assets of at least One Billion Dollars; or
     (v) any Person (a) with a long-term unsecured debt rating from the Rating
Agencies of at least investment grade or (b) who, together with its Affiliates,
(i) has at least five (5) years experience managing at least five (5) hotel
properties that are reasonably comparable in quality to the Property or has an
operating partner that has such experience, (ii) has a net worth, as of a date
no more than six (6) months prior to the date of such transfer, of at least Five
Hundred Million Dollars and (iii) immediately prior to such transfer, controls
real estate equity assets of at least One Billion Dollars.

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          “Rating Agencies” shall mean each of S&P, Moody’s and Fitch, or any
other nationally-recognized statistical rating agency which has been approved by
Lender.
          “Reference Bank” shall mean a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market that has an
established place of business in London. If any such Reference Bank should be
removed from the Telerate Page 3750 or in any other way fail to meet the
qualifications of a Reference Bank, Lender may designate alternative Reference
Banks meeting the criteria specified above.
          “Registration Statement” shall have the meaning set forth in
Section 9.2(b) hereof.
          “Regular Interest Rate” shall mean a fluctuating rate per annum equal
to the sum of (a) the LIBOR Rate plus (b) the LIBOR Spread, as such rate may
change on each Determination Date for the next succeeding Interest Period.
          “Related Parties” shall have the meaning set forth in
Section 4.1.30(d) hereof.
          “Rents” shall mean, without duplication, all rents, rent equivalents,
moneys payable as damages or in lieu of rent or rent equivalents, royalties
(including, without limitation, all oil and 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 or
its agents or employees from any and all sources arising from or attributable to
the Property, including, without limitation, all hotel receipts, revenues and
credit card receipts collected from guest rooms, restaurants, bars, meeting
rooms, banquet rooms and recreational facilities, all receivables, customer
obligations, installment payment obligations and other obligations now existing
or hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or
rendering of services by Borrower or any operator or manager of the hotel or the
commercial space located in the Improvements or acquired from others (including,
without limitation, from the rental of any office space, retail space, guest
rooms or other space, halls, stores, and offices, and deposits securing
reservations of such space), license, lease, sublease and concession fees and
rentals, health club membership fees, food and beverage wholesale and retail
sales, service charges, vending machine sales and proceeds, if any, from
business interruption or other loss of income insurance.
          “Replacement Interest Rate Cap Agreement” means an interest rate cap
agreement from an Acceptable Counterparty with terms identical to the Interest
Rate Cap Agreement except that the same shall be effective as of the date
required in Section 2.6 and shall comply with the requirements of Schedule 5
hereof, provided that to the extent any such interest rate cap agreement does
not meet the foregoing requirements, a “Replacement Interest Rate Cap Agreement”
shall be such interest rate cap agreement approved in writing by the Rating
Agencies with respect thereto.
          “Replacement Management Agreement” means a management agreement, in
form and content reasonably acceptable to Lender, entered into by and between
Borrower or

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Hotel Operator and Manager or a Qualified Manager, which replaces the Management
Agreement, pursuant to which Manager or such Qualified Manager is to provide
management and other services with respect to the Property, as the same may be
amended or modified in accordance with the terms and provisions hereof.
          “Replacements” shall mean replacements, repairs, furniture, fixtures,
hotel equipment and other capital expenditures required to be made to the
Property and the Improvements during the calendar year.
          “Required FF&E Amount” shall mean four percent (4%) of the projected
annual Gross Income from Operations.
          “Required Repair Account” shall have the meaning set forth in
Section 7.1.1 hereof.
          “Required Repair Fund” shall have the meaning set forth in
Section 7.1.1 hereof.
          “Required Repairs” shall have the meaning set forth in Section 7.1.1
hereof.]
          “Reserve Funds” shall mean the Tax and Insurance Escrow Fund, the FF&E
Reserve Fund, the Required Repair Fund and any other escrow fund established by
the Loan Documents.
          “Reserve Rate” means the rate per annum which Lender reasonably
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 1/1,000%) of the one-month United States dollar
lending rates that at least three major New York City banks selected by Lender
are quoting, at 11:00 a.m. (New York time) on the relevant Determination Date,
to the principal London offices of at least two of the Reference Banks, or (ii)
in the event that at least two such rates are not obtained, the lowest one-month
United States dollar lending rate which New York City banks selected by Lender
are quoting as of 11:00 a.m. (New York time) on such Determination Date to
leading European banks.
          “Restoration” shall have the meaning set forth in Section 6.2 hereof.
          “Restoration Threshold Amount” shall mean an amount equal to
$2,500,000.
          “S&P” shall mean Standard & Poor’s Ratings Group, a division of McGraw
Hill, Inc.
          “Second Extended Maturity Date” shall mean February 1, 2011, or if
February 1, 2011 is not a Business Day, the first Business Day succeeding
February 1, 2011.
          “Second Extension Term” shall have the meaning set forth in
Section 2.6 hereof.
          “Securities” shall have the meaning set forth in Section 9.1 hereof.
          “Securities Act” shall have the meaning set forth in Section 9.2(a)
hereof.

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          “Securitization” shall have the meaning set forth in Section 9.1
hereof.
          “Servicer” shall have the meaning set forth in Section 9.6 hereof.
          “Servicing Agreement” shall have the meaning set forth in Section 9.6
hereof.
          “Severed Loan Documents” shall have the meaning set forth in
Section 8.2(c) hereof.
          “Sole Member” shall mean South 17th Street OwnerCo Mezzanine, LLC, a
Delaware limited liability company, which is the sole member of Borrower.
          “Sponsor” shall mean, individually or collectively, as the context
requires, Whitehall and GEM.
          “Sponsor Affiliate” shall mean, as to any Sponsor, any other Person
that, directly or indirectly, is in control of, is controlled by or is under
common control with such Sponsor or is a senior officer or senior director of
such Sponsor or a Person that is in control of such Sponsor.
          “Spread Maintenance Premium” shall mean, with respect to any repayment
or acceleration of the outstanding principal amount of the Loan on or prior to
the Prepayment Release Date, a payment to Lender in an amount equal to the sum
of the present value of each future installment of interest that would be
payable under the Note on the prepaid principal amount of the Loan from the date
of such prepayment through, but excluding, the Prepayment Release Date assuming
an interest rate equal to the LIBOR Spread, discounted at an interest rate per
annum equal to the Treasury Constant Maturity Yield Index published during the
second full week preceding the date on which such premium is payable for
instruments having a maturity coterminous with the Prepayment Release Date.
          “State” shall mean the State in which the Property is located.
          “Strike Price” shall mean 7.0%.
          “Subordinate Loan” shall have the meaning set forth in Section 9.1.4
hereof.
          “Subordination Agreement” shall mean that certain Subordination
Agreement executed by Borrower, Hotel Operator and Lender in connection with the
Loan.
          “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 Insurance Policy, and containing a certification of such
surveyor satisfactory to Lender.
          “Tax and Insurance Escrow Fund” shall have the meaning set forth in
Section 7.2(a) hereof.
          “Taxes” shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or part thereof.

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          “Telerate Page 3750” means the display designated as page 3750 on the
Dow Jones Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be nominated by the British
Bankers-Association as the information vendor for the purposes of displaying
British Bankers-Association Interest Settlement Rates for U.S. dollar deposits).
          “Third Extended Maturity Date” shall mean February 1, 2012, or if
February 1, 2012 is not a Business Day, the first Business Day succeeding
February 1, 2012.
          “Third Extension Term” shall have the meaning set forth in Section 2.6
hereof.
          “Title Insurance Policy” shall mean an ALTA mortgagee title insurance
policy in the form (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 with respect to the
Property and insuring the lien of the Mortgage.
          “Transfer” shall have the meaning set forth in Section 5.2.13 hereof.
          “Transfer Agreement” shall mean that certain Transfer Agreement dated
as of December 15, 2006 by and between Accor and W2005 Six Hotels Realty,
L.L.C., a Delaware limited liability company.
          “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 9.2(b)
hereof.
          “Uniform System of Accounts” shall mean the Uniform System of Accounts
for hotel and motel properties as approved by the American Hotel and Motel
Association.
          “U.S. Obligations” shall mean direct non-callable obligations of the
United States of America.
          “Whitehall” shall mean Whitehall Street Global Real Estate Limited
Partnership 2005, a Delaware limited partnership.
          “Whitehall Guaranty” shall mean that certain Guaranty of Recourse
Obligations executed and delivered by Whitehall in connection with the Loan for
the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
          Section 1.2 Principles of Construction. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. All uses of the phrase
“shall not be unreasonably withheld” shall mean “shall not be unreasonably
withheld, conditioned or delayed” 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

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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
          Section 2.1 Loan Commitment; 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.
          2.1.3 The Note, Mortgage and Loan Documents. The Loan shall be
evidenced by the Note and secured by the Mortgage, the Assignment of Leases and
the other Loan Documents.
          2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to
(a) acquire the Property and/or repay and discharge any existing loans relating
to the Property, (b) pay all past-due Basic Carrying Costs, if any, in respect
of the Property, (c) make deposits into the Reserve Funds on the Closing Date in
the amounts provided herein, (d) pay costs and expenses incurred in connection
with the closing of the Loan, (e) fund any working capital requirements of the
Property, and (f) distribute the balance, if any, to Borrower.
          Section 2.2 Interest; Loan Payments; Late Payment Charge.
          2.2.1 Interest Generally. Interest on the outstanding principal
balance of the Loan shall accrue from the Closing Date to but excluding the
Maturity Date at the Regular Interest Rate.
          2.2.2 Interest Calculation. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for which the calculation is being made by (b) a
daily rate based on a three hundred sixty (360) day year by (c) the outstanding
principal balance.
          2.2.3 Payments Generally. On the Closing Date, Borrower will pay to
Lender an amount equal to the interest which will accrue on the Loan from the
Closing Date through and including the last day of the calendar month in which
the Closing Date occurs. The interest rate for such initial period is equal to
Six and Sixty-Two hundredths of a percent (6.62%). Monthly installments of the
Debt Service Payment Amount shall be paid on each monthly Payment Date
commencing on March 1, 2007 and on each succeeding Payment Date up to and
including the Maturity Date. The then-outstanding principal balance of the Loan
together with all accrued and unpaid interest thereon shall be due and payable
on the Maturity Date (including, without limitation, all interest that would
accrue on the then outstanding principal

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balance of the Loan through the end of the Interest Period during which the
Maturity Date occurs (even if such period extends beyond the Maturity Date)).
All amounts due under the Note shall be payable without setoff, counterclaim or
any other deduction whatsoever. Each installment of the Debt Service Payment
Amount shall be applied to interest at the Regular Interest Rate for the
applicable Interest Period.
          2.2.4 Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance, all accrued and unpaid interest
through and including the last day of the Interest Period in which the Maturity
Date occurs (even if such Interest Period extends beyond the Maturity Date) and
all other amounts due hereunder and under the Note, the Mortgage, this Agreement
and the other Loan Documents.
          2.2.5 Payments after Default. Upon the occurrence and during the
continuance of an Event of Default, (a) 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 and (b) Lender shall be entitled to receive and
Borrower shall pay to Lender on each Payment Date an amount equal to the Net
Cash Flow After Debt Service for the prior month, such amount to be applied by
Lender to the payment of the Debt in such order as Lender shall determine in its
sole discretion, including, without limitation, alternating applications thereof
between interest and principal. Interest at the Default Rate and Net Cash Flow
After Debt Service shall both be computed from the occurrence of the Event of
Default the earlier to occur of (a) until the actual receipt and collection of
the Debt (or that portion thereof that is then due) or (b) the cure of the Event
of Default. To the extent permitted by applicable law, interest at the Default
Rate shall be added to the Debt, shall itself accrue interest at the same rate
as the Loan and shall be secured by the Mortgage. This paragraph shall not be
construed as an agreement or privilege to extend the date of the payment of the
Debt, nor as a waiver of any other right or remedy accruing to Lender by reason
of the occurrence and continuance of any Event of Default; the acceptance of any
payment of Net Cash Flow After Debt Service shall not be deemed to cure or
constitute a waiver of any Event of Default; and Lender retains its rights under
this Note to accelerate and to continue to demand payment of the Debt upon the
occurrence and during the continuance of any Event of Default, despite any
payment of Net Cash Flow After Debt Service.
          2.2.6 Late Payment Charge. If any principal, interest or any other
sums due (other than the payment of the principal balance of the Note at
maturity, whether by acceleration or otherwise) under the Loan Documents 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 four percent (4%) of such
unpaid sum or the Maximum Legal Rate in order to defray the expense incurred by
Lender in handling and processing such delinquent payment and to compensate
Lender for the loss of the use of such delinquent payment. Any such amount shall
be secured by the Mortgage and the other Loan Documents to the extent permitted
by applicable law.
          2.2.7 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

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other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Regular Interest Rate or the Default Rate, as the case
may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and
all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal and not on account of the interest
due hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
          2.2.8 Determination of Interest Rate. (a) Subject to the terms and
conditions of this Section 2.2.8 the Loan shall bear interest at the Regular
Interest Rate.
          (b) In the event that Lender shall have reasonably determined that by
reason of circumstances affecting the interbank eurodollar market LIBOR Rate
cannot be determined as provided in the definition of LIBOR Rate as set forth
herein, then Lender shall forthwith give notice by telephone of such fact,
confirmed in writing, to Borrower at least one (1) Business Day prior to the
last day of the Interest Period in which such fact shall be determined. If such
notice is given, the Loan shall be converted, from and after the first day of
the next succeeding Interest Period, to a Prime Rate Loan.
          (c) If, pursuant to the terms of Section 2.2.8(b) above, the Loan has
been converted to a Prime Rate Loan but thereafter LIBOR Rate can again be
determined as provided in the definition of LIBOR Rate as set forth herein,
Lender shall give notice thereof to Borrower and convert the Prime Rate Loan
back to a loan bearing interest at the Regular Interest Rate by delivering to
Borrower notice of such conversion no later than 11:00 a.m. (New York City
Time), one (1) Business Days prior to the next succeeding Determination Date, in
which event the Prime Rate Loan shall be converted to a loan bearing interest at
the Regular Interest Rate from, after and including the first day of the next
succeeding Interest Period. Notwithstanding any provision of this Agreement to
the contrary, in no event shall Borrower have the right to elect to convert the
Loan bearing interest at the Regular Interest Rate to a Prime Rate Loan.
          (d) (i) With respect to the Regular Interest Rate, all payments made
by Borrower hereunder shall be made free and clear of, and without reduction for
or on account of, income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions, reserves or withholdings imposed, levied, collected,
withheld or assessed by any Governmental Authority, which are imposed, enacted
or become effective after the date hereof (such non-excluded taxes being
referred to collectively as “Foreign Taxes”), excluding income and franchise
taxes of the United States of America or any political subdivision or taxing
authority thereof or therein (including Puerto Rico) or any other jurisdiction.
If any Foreign Taxes are required to be withheld from any amounts payable to
Lender hereunder, the amounts so payable to Lender shall be increased to the
extent necessary to yield to Lender (after payment of all Foreign Taxes)
interest or any such other amounts payable hereunder at the rate or in the
amounts specified hereunder. Whenever any Foreign Tax is payable with respect to
the Loan pursuant to applicable law by Borrower provided Lender or the
applicable Governmental Authority has notified

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Borrower of such payment obligation, as promptly as possible thereafter,
Borrower shall send to Lender an original official receipt, if available, or
certified copy thereof showing payment of such Foreign Tax. Borrower shall
indemnify Lender for any incremental taxes, interest or penalties that may
become payable by Lender which may result from any failure by Borrower to pay
any such Foreign Tax when due to the appropriate taxing authority or any failure
by Borrower to remit to Lender the required receipts or other required
documentary evidence in accordance with this Section 2.2.8(d). The obligations
of Borrower shall survive the payment of the Debt and termination of this
Agreement.
     (ii) If Lender receives a refund of, or a credit relating to, any Foreign
Tax which has been paid by Borrower or the cost of which Borrower has borne,
pursuant to any provision of this Section 2.2.8, it shall pay over such refund
or credit to Borrower; provided, that Borrower, upon the request of Lender,
agrees to promptly repay the amount paid over to Lender in the event Lender is
required to repay such refund or credit to a relevant Governmental Authority.
The obligations of Lender shall survive the payment of the Debt and termination
of this Agreement.
     (iii) If Lender is not created or organized under the laws of the United
States of America or a state thereof it shall, not more than ten (10) Business
Days after the date of this Agreement (or ten (10) Business Days after the date
it becomes a Lender, if later), deliver to Borrower two duly completed and
signed copies of United States Internal Revenue Service Form W-8BEN, W-8IMY or
W-8ECI or any successor form thereto, as applicable. If Lender is created or
organized under the laws of the United States of America or any state thereof,
it shall not more than ten (10) Business Days after written request of Borrower,
deliver to Borrower two duly completed copies of United States Internal Revenue
Service Form W-9. Lender further undertakes to deliver to Borrower promptly
after written request of Borrower renewals or additional copies of such form (or
any successor form) (i) on or before the date that such form expires or becomes
obsolete upon request, and (ii) after the occurrence of any event requiring a
change in the most recent forms so delivered by it. All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement (including on behalf of participants,
if applicable) without deduction or withholding of any United States federal
income taxes.
     (iv) For any period during which Lender has failed to provide Borrower with
the forms required above (unless such failure is due to a change in treaty, law
or regulation, or any change in the interpretation or administration thereof by
any Governmental Authority, occurring subsequent to the date on which a form
initially was required to be provided) Borrower may, if and to the extent
required by applicable Law, withhold taxes imposed by the United States in
respect of payments due to Lender and Lender shall not be entitled to
indemnification with respect to taxes imposed by the United States; provided
that, if Lender is otherwise exempt from or subject to a reduced rate of
withholding tax and then becomes subject to taxes because of its failure to
deliver a form required above, Borrower shall take such steps, at the sole
reasonable expense of Lender, as Lender shall reasonably request to assist
Lender to recover such taxes. If the U.S. Internal Revenue Service or any other
Governmental Authority asserts a claim that Borrower did not properly withhold
tax from amounts paid to or for the account of

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Lender solely as a result of the fact that the appropriate form was not
delivered or because Lender failed to notify Borrower of a change in
circumstances which rendered its exemption or reduction from withholding
ineffective, Lender shall defend and indemnify Borrower fully for all amounts
paid by Borrower as tax, withholding therefor, or otherwise, including penalties
and interest, and including taxes imposed by any jurisdiction on amounts payable
to Borrower under this subsection, together with all out-of-pocket costs and
expenses related thereto (including reasonable attorneys fees and expenses). The
obligations of Lender under this Section 2.2.8 shall survive the payment of the
Debt and termination of this Agreement.
          (e) If any requirement of law enacted after the date hereof, or any
change in law or in the interpretation or application thereof after the date
hereof, shall hereafter make it unlawful for Lender to make or maintain the
Regular Interest Rate as contemplated hereunder and the events giving rise
thereto affects similarly situated banks or financial institutions generally,
(i) the obligation of Lender hereunder to maintain the Regular Interest Rate or
to convert a Prime Rate Loan to the Regular Interest Rate shall be canceled
forthwith and (ii) any portion of the Loan bearing interest at the Regular
Interest Rate shall be converted automatically to a Prime Rate Loan on the first
day of the next succeeding Interest Period or within such earlier period as
required by law. Borrower hereby agrees promptly to pay Lender, upon demand, any
additional amounts necessary to compensate Lender for any costs incurred by
Lender in making any conversion in accordance with this Agreement, including,
without limitation, any interest or fees payable by Lender to lenders of funds
obtained by it in order to make or maintain the Loan at the Regular Interest
Rate hereunder. Lender’s notice of such costs, as certified to Borrower, shall
be conclusive absent manifest error.
          (f) In the event that any change after the date hereof in any
requirement of law or in the interpretation or application thereof, or
compliance by Lender with any request or directive (whether or not having the
force of law) hereafter issued from any central bank or other Governmental
Authority and the events giving rise thereto affects similarly situated banks or
financial institutions generally:
     (i) shall hereafter impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
Lender which is not otherwise included in the determination of LIBOR Rate
hereunder;
     (ii) shall hereafter have the effect of reducing the rate of return on
Lender’s capital as a consequence of its obligations hereunder to a level below
that which Lender could have achieved but for such adoption, change or
compliance (taking into consideration Lender’s policies with respect to capital
adequacy) by any amount deemed by Lender to be material; or
     (iii) shall hereafter impose on Lender any other condition and the result
of any of the foregoing is to increase the cost to Lender of making, renewing or
maintaining loans or extensions of credit or to reduce any amount receivable
hereunder;

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then, in any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender deems to be material as determined by
Lender in its reasonable discretion. If Lender becomes entitled to claim any
additional amounts pursuant to this Section 2.2.8(f), Lender shall provide
Borrower with not less than thirty (30) days written notice specifying in
reasonable detail the event by reason of which it has become so entitled and the
additional amount required to fully compensate Lender for such additional cost
or reduced amount. A certificate as to any additional costs or amounts payable
pursuant to the foregoing sentence submitted by Lender to Borrower shall be
conclusive in the absence of manifest error. Subject to Section 2.2.8(h) hereof,
this provision shall survive payment of the Note and the satisfaction of all
other obligations of Borrower under this Agreement and the Loan Documents.
          (g) Subject to the provisions of Section 9.4 hereof, Borrower agrees
to indemnify Lender and to hold Lender harmless from any loss or expense which
Lender sustains or incurs as a consequence of (i) any default by Borrower in
payment of the principal of or interest on at the Regular Interest Rate,
including, without limitation, any such loss or expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the Regular Interest Rate hereunder, (ii) any prepayment (whether voluntary or
mandatory) of the Loan at the Regular Interest Rate on a day that (A) is not a
Payment Date or (B) is a Payment Date if Borrower did not give the prior written
notice of such prepayment required pursuant to the terms of this Agreement,
including, without limitation, such loss or expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the Regular Interest Rate hereunder and (iii) the conversion pursuant to the
terms hereof of the Regular Interest Rate to the Prime Rate Loan on a date other
than the Payment Date, including, without limitation, such loss or expenses
arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain the Regular Interest Rate hereunder (the amounts
referred to in clauses (i), (ii) and (iii) are herein referred to collectively
as the “Breakage Costs”); provided, however, Borrower shall not indemnify Lender
from any loss or expense arising from Lender’s willful misconduct, gross
negligence, fraud or illegal acts. This provision shall survive payment of the
Note in full and the satisfaction of all other obligations of Borrower under
this Agreement and the other Loan Documents.
          (h) Subject to the other provisions of this Section 2.2.8, Lender
shall not be entitled to claim compensation pursuant to this Section 2.2.8 for
any Foreign Taxes, increased cost or reduction in amounts received or receivable
hereunder, or any reduced rate of return, which was incurred or which accrued
more than the earlier of (i) ninety (90) days before the date Lender notified
Borrower in writing of the change in law or other circumstance on which such
claim of compensation is based and delivered to Borrower a written statement
setting forth in reasonable detail the basis for calculating the additional
amounts owed to Lender under this Section 2.2.8, which statement shall be
conclusive and binding upon all parties hereto absent manifest error, or
(ii) any earlier date (but not earlier than the effective date of such change in
law or circumstance) provided that Lender notified Borrower of such change in
law or circumstance and delivered the written statement referenced in clause (i)
within ninety (90) days after Lender received written notice of such change in
law or circumstance. Lender shall use reasonable efforts to avoid or mitigate
any increased cost, reduced receivable or suspension of the availability of
LIBOR to the greatest extent practicable (including transferring the Loan to
another lending office or affiliate of a Lender) unless, in the opinion of
Lender, such efforts

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would be likely to have any adverse effect upon it. In the event Lender (other
than a trustee holding the Loan on behalf of holders of securities after the
occurrence of a Securitization) makes a request to Borrower for additional
payments in accordance with Section 2.2.8 then, provided that no Event of
Default has occurred and is continuing at such time, Borrower may, at its own
expense (such expense to include Breakage Costs if such assignment occurs on a
date other than a Payment Date), and in its sole discretion require such Lender
to transfer and assign in whole (but not in part), without recourse all of its
interests, rights and obligations under this Agreement to an assignee identified
by Borrower, which assignee shall assume such assigned obligations; provided
that (i) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority, and (ii) Borrower or such
assignee shall have paid to the assigning Lender, in immediately available
funds, the principal of and interest accrued to the date of such payment on, the
portion of the Loan hereunder held by such assigning Lender and all other
amounts owed to such assigning Lender hereunder.
          Section 2.3 Prepayments.
          2.3.1 Voluntary Prepayments. (a) Borrower may prepay the Debt in whole
(but not in part) on any Payment Date prior to the Prepayment Release Date,
provided that, subject to the provisions of clause (b) of this Section 2.3.1,
Borrower shall pay to Lender simultaneously with such prepayment, (i) the
interest that would have accrued at the Regular Interest Rate on the amount then
prepaid through the end of the Interest Period in which such prepayment occurs,
notwithstanding that such Interest Period extends beyond the date of prepayment,
(ii) the Spread Maintenance Premium, and (iii) all other sums then due and
payable under this Agreement, the Note, and the other Loan Documents. Commencing
on the Prepayment Release Date, Borrower may prepay the Debt in whole (but not
in part) without any Spread Maintenance Premium provided that, subject to the
provisions of clause (b) of this Section 2.3.1, Borrower shall pay to Lender,
simultaneously with such prepayment, the interest that would have accrued at the
Regular Interest Rate on the amount then prepaid through the end of the Interest
Period in which such prepayment occurs, notwithstanding that such Interest
Period extends beyond the date of prepayment and all other sums then due and
payable under this Agreement, the Note, and the other Loan Documents. Any
prepayments made in accordance with this Section 2.3.1 shall be applied, first,
to accrued and unpaid interest on the outstanding principal balance of the Loan
that would have accrued at the Regular Interest Rate on the amount prepaid
through the end of the Interest Period in which such prepayment occurs,
notwithstanding that such Interest Period extends beyond the date of prepayment,
and then to all other amounts then due to Lender under this Agreement or any of
the other Loan Documents and then to the outstanding principal balance of the
Loan.
          (b) In addition to the provisions of clause (a) of this Section 2.3.1,
it is agreed that in the event that the Debt is prepaid during the period
commencing on the first day after a Payment Date and ending on (but including)
the last day of the Interest Period in which such prepayment occurs, Borrower
will pay to Lender, simultaneously with such prepayment, interest on the
principal amount of the Loan prepaid through the last day of that Interest
Period immediately following the Interest Period in which such prepayment
occurs, calculated at the Regular Interest Rate. In the event that such
prepayment occurs prior to the applicable Determination Date it may be
impossible for Borrower and Lender to calculate with certainty the interest that
would have accrued at the Regular Interest Rate on the amount then prepaid
through

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the end of the Interest Period following the Interest Period in which such
prepayment occurs. Accordingly, in the event that the Debt is prepaid prior to
the Determination Date applicable to the Interest Period following the Interest
Period in which such prepayment occurs, the interest that would have accrued at
the Regular Interest Rate on the amount then prepaid through the end of the
Interest Period following the Interest Period in which such prepayment occurs
shall be calculated based on an interest rate (the “Assumed Note Rate”) equal to
the sum of (i) the LIBOR Rate applicable to the Interest Period in which such
prepayment occurs, plus (ii) the LIBOR Spread, plus (iii) 1.00%. Thereafter, on
the Determination Date applicable to the Interest Period following the Interest
Period in which such prepayment occurs, Lender shall determine the Regular
Interest Rate as if such prepayment had not occurred. If it is determined by
Lender that the Regular Interest Rate for the Interest Period following the
Interest Period in which such prepayment occurs is less than the Assumed Note
Rate, Lender shall promptly refund to Borrower, without interest, an amount
equal to the difference between the interest paid by Borrower for the Interest
Period following the Interest Period in which such prepayment occurs calculated
at the Assumed Note Rate and the amount of interest for said Interest Period
calculated at the actual Regular Interest Rate. Alternatively, in the event that
it is determined that the actual Regular Interest Rate applicable to the
Interest Period following the Interest Period in which such prepayment occurs is
greater than the Assumed Note Rate, Borrower shall promptly pay to Lender,
without additional interest or other late charges or penalties (and in no event
later than the 9th day of the following month) an amount equal to the difference
between the interest paid by Borrower for the Interest Period following the
Interest Period in which such prepayment occurs on the prepaid amount calculated
at the Assumed Note Rate and the amount of interest for said Interest Period
calculated at the actual Regular Interest Rate.
          2.3.2 Mandatory Prepayments. On each date on which Borrower actually
receives any Net Proceeds, if Lender is not obligated to make such Net Proceeds
available to Borrower for the restoration of the Property, Borrower shall prepay
the outstanding principal balance of the Note in an amount equal to one hundred
percent (100%) of such Net Proceeds. No Spread Maintenance Premium shall be due
in connection with any prepayment made pursuant to this Section 2.3.2. The
amount of such prepayment in excess of that required to pay the Debt in full
shall be promptly remitted to Borrower. Any partial prepayment under this
Section shall be applied to the last payments of principal due under the Loan.
          2.3.3 Prepayments After Default. If, prior to the Prepayment Release
Date and following an Event of Default, payment of all or any part of the Debt
is tendered by Borrower or otherwise recovered by Lender, Borrower shall pay to
Lender, in addition to the Debt, an amount equal to the Spread Maintenance
Premium.
          Section 2.4 Release of Property. Except as set forth in this
Section 2.4, no repayment or prepayment of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
any Lien of the Mortgage on the Property. Lender shall, upon the written request
and at the expense of Borrower, upon payment in full of all principal and
interest on the Loan and all other amounts due and payable under the Loan
Documents in accordance with the terms and provisions of the Note and this
Agreement, release or assign (without recourse, representation or warranty) the
Liens of the Mortgage on the Property.

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          Section 2.5 Manner of Making Payments; Cash Management.
          2.5.1 Deposits into Lockbox Account. (a) Borrower acknowledges and
confirms that if the Management Agreement with Manager is terminated, Borrower
shall establish and maintain with Lockbox Bank, pursuant to a Lockbox Agreement
acceptable to Lender in its reasonable discretion, a non-interest bearing
Eligible Account into which Borrower shall, and shall cause such Qualifying
Manager which replaces Manager, if any, to, deposit or cause to be deposited,
all Rents and other revenue from the Property (such account, all funds at any
time on deposit therein and any proceeds, replacements or substitutions of such
account or funds therein, are referred to herein as the “Lockbox Account”).
          (b) The Lockbox Account, if any, shall be in the name of Borrower for
the benefit of Lender, provided that Borrower shall be the owner of all funds on
deposit in such accounts for federal and applicable state and local tax
purposes.
          (c) The Lockbox Account, if any, shall be subject to the exclusive
dominion and control of Lender and, except as otherwise expressly provided
herein, neither Borrower, Manager nor any other party claiming on behalf of, or
through, Borrower or Manager, shall have any right of withdrawal therefrom or
any other right or power with respect thereto.
          (d) Borrower agrees to pay the customary fees and expenses of Lockbox
Bank (incurred in connection with maintaining the Lockbox Account, if any) and
any successors thereto in connection therewith, as separately agreed by them
from time to time.
          2.5.2 Making of Payments. Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Note shall be
made to Lender not later than 3:00 P.M., New York City time, on the date when
due and shall be made in lawful money of the United States of America in
immediately available funds as directed by Lender, and any funds received by
Lender after such time shall, for all purposes hereof, be deemed to have been
paid on the next succeeding Business Day.
          2.5.3 No Deductions, etc. All payments made by Borrower hereunder or
under the Note or the other Loan Documents shall be made irrespective of, and
without any deduction for, any setoff, defense or counterclaims.
          Section 2.6 Extension of Maturity Date. Borrower shall have three
(3) options (each such option is hereafter referred to as an “Extension Option”)
to extend the Maturity Date as set forth in this Section 2.6. The first
Extension Option, if exercised by Borrower pursuant to this Section 2.6, shall
automatically extend the Maturity Date from the Initial Maturity Date to the
First Extended Maturity Date (the “First Extension Term”). If Borrower has
exercised the first Extension Option described in the preceding sentence to
extend the Maturity Date to the First Extended Maturity Date, Borrower shall
have a second Extension Option to extend the Maturity Date from the First
Extended Maturity Date to the Second Extended Maturity Date (the “Second
Extension Term”). If Borrower has exercised the second Extension Option
described in the preceding sentence to extend the Maturity Date to the Second
Extended Maturity Date Borrower shall have a third Extension Option to extend
the Maturity Date from the Second Extended Maturity Date to the Third Extended
Maturity Date (the “Third

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Extension Term”). Each exercise of the Extension Options set forth in this
Section 2.6 shall be subject to the satisfaction of the following terms and
conditions:
          (a) on the date that the applicable Extension Option is exercised by
Borrower and on the date that such Extension Option is effective, no Event of
Default shall have occurred and be continuing;
          (b) Borrower shall deliver to Lender (i) not later than five
(5) Business Days prior to the then scheduled Maturity Date, an Acceptable Bid
Package for Lender’s approval and (ii) not later than the first day of the
extension term of the Loan as extended pursuant to the Extension Option then
being exercised, one or more Replacement Interest Rate Cap Agreements from an
Acceptable Counterparty, which Replacement Interest Rate Cap Agreement shall
(w) satisfy the requirements set forth on Schedule 5, (x) be substantially in
the form of the then applicable Interest Rate Cap Agreement or otherwise
reasonably acceptable to Lender, (y) be effective not later than the effective
date of such Extension Option then being exercised, and (z) have a maturity date
not earlier than the Maturity Date as extended pursuant to the Extension Option
then being exercised by Borrower;
          (c) Borrower shall deliver to Lender on or prior to the date the date
that such Extension Option is effective, a collateral assignment of all
Borrower’s right, title and interest to receive any and all payments under the
Replacement Interest Rate Protection Agreement substantially in the form of the
Assignment of Interest Rate Cap Agreement and such UCC financing statements as
Lender may reasonably require;
          (d) Borrower shall notify Lender of its election to exercise the
applicable Extension Option not later than ten (10) Business Days prior to the
date the Loan is then scheduled to mature; and
          (e) Borrower pays any and all reasonable costs and expenses of Lender
(including, without limitation, reasonable attorneys’ fees) incurred by Lender
(and by and Servicer) in connection with any election by or on behalf of
Borrower to exercise any Extension Option.
          Section 2.7 Interest Rate Cap Agreement. (a) On the Closing Date,
Borrower shall have obtained from an Acceptable Counterparty, and shall
thereafter maintain in effect, an Interest Rate Cap Agreement, which shall be
coterminous with a date not earlier than the last day of the Interest Period in
which the Initial Maturity Date of the Loan occurs (even if such Interest Period
extends beyond the Initial Maturity Date) and have a notional amount which shall
not at any time be less than the outstanding principal balance of the Loan and
which shall at all times have a strike rate equal to the Strike Price. The
notional amount of the Interest Rate Cap Agreement may be reduced from time to
time in amounts equal to any prepayment of the principal (if any) of the Loan in
accordance with the terms hereof.
          (b) Borrower shall collaterally assign to Lender pursuant to the
Assignment of Interest Rate Cap Agreement, all of its right, title and interest
to receive any and all payments under the Interest Rate Cap Agreement (and any
related guarantee, if any) and shall deliver to Lender an executed counterpart
of such Interest Rate Cap Agreement and notify the

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Counterparty of such collateral assignment (either in such Interest Rate Cap
Agreement or by separate instrument). At such time as the Loan is repaid in full
in accordance with the terms and provisions of the Loan Documents, all of
Lender’s right, title and interest in the Interest Rate Cap Agreement shall
terminate and Lender shall execute and deliver at Borrower’s sole cost and
expense, such documents as may be required to evidence Lender’s release of the
Assignment of Interest Rate Cap Agreement and to notify the Counterparty of such
release.
          (c) Borrower shall comply with all of its obligations under the terms
and provisions of the Interest Rate Cap Agreement. All amounts paid by the
Counterparty under the Interest Rate Cap Agreement shall be deposited
immediately into the Cash Management Account, or, if the Cash Management Account
has not been established, into an account designated by Lender or its designee.
Borrower shall take all actions reasonably requested by Lender to enforce
Lender’s rights in respect of the Interest Rate Cap Agreement in the event of a
default by the Counterparty and shall not waive, amend or otherwise modify in
any material respect any of Borrower’s rights thereunder.
          (d) In the event the Counterparty to any Interest Rate Cap Agreement
obtained by Borrower in accordance with the terms of this Agreement is
downgraded below “AA-” by S&P or Fitch (if rated by Fitch) or “Aa3” by Moody’s
after its delivery of such Interest Rate Cap Agreement, Borrower shall replace
such Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement
(or, alternatively, shall replace such Counterparty with an Acceptable
Counterparty), not later than ten (10) Business Days following receipt of notice
from Lender or Servicer of such downgrade, withdrawal or qualification.
          (e) In the event that Borrower fails to purchase and deliver to Lender
the Interest Rate Cap Agreement as and when required hereunder, Lender may
purchase the Interest Rate Cap Agreement and the cost incurred by Lender in
purchasing the Interest Rate Cap Agreement shall be paid by Borrower to Lender
with interest thereon at the Default Rate from the date such cost was incurred
by Lender until such cost is paid by Borrower to Lender.
          (f) In connection with the initial delivery of an Interest Rate Cap
Agreement, Borrower shall obtain and deliver to Lender within ten (10) Business
Days after the Closing an opinion from counsel for the Counterparty (upon which
Lender and its successors and assigns may rely) which shall provide, in relevant
part:
     (1) that the Counterparty is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has the
organizational power and authority to execute and deliver, and to perform its
obligations under, the Interest Rate Cap Agreement;
     (2) that the execution and delivery of the Interest Rate Cap Agreement by
the Counterparty, and any other agreement which the Counterparty has executed
and delivered pursuant thereto, and the performance of its obligations
thereunder have been and remain duly authorized by all necessary action and do
not contravene any provision of its certificate of incorporation or by-laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;

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     (3) that all consents, authorizations and approvals required for the
execution and delivery by the Counterparty of the Interest Rate Cap Agreement,
and any other agreement which the Counterparty has executed and delivered
pursuant thereto, and the performance of its obligations thereunder have been
obtained and remain in full force and effect, all conditions thereof have been
duly complied with, and no other action by, and no notice to or filing with any
governmental authority or regulatory body is required for such execution,
delivery or performance;
     (4) that the Interest Rate Cap Agreement, and any other agreement which the
Counterparty has executed and delivered pursuant thereto, has been duly executed
and delivered by the Counterparty and constitutes the legal, valid and binding
obligation of the Counterparty, enforceable against the Counterparty in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity of at law); and
     (5) to the extent that any of the requirements on Schedule 5 apply to such
opinion, that such opinion complies with the relevant provisions of Schedule 5.
III. INTENTIONALLY DELETED
IV. REPRESENTATIONS AND WARRANTIES
          Section 4.1 Borrower Representations. Borrower represents and warrants
as of the date hereof and as of the Closing Date that:
          4.1.1 Organization. Borrower has been duly organized and is validly
existing and in good standing with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged. Borrower
is duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with its properties,
businesses and operations. Except to the extent where a failure would not be
reasonably expected to have a Material Adverse Effect, and except as disclosed
to Lender in writing, Borrower possesses all rights, licenses, permits and
authorizations, governmental or otherwise, necessary to entitle it to own its
properties and to transact the businesses in which it is now engaged, and the
sole business of Borrower is the ownership, management and operation of the
Property. The organizational chart attached hereto as Schedule 3 accurately
depicts the organizational structure of Borrower.
          4.1.2 Proceedings. Borrower has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and
subject, as to

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enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
          4.1.3 No Conflicts. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, operating or partnership agreement or other agreement or
instrument to which Borrower is a party or by which any of Borrower’s property
or assets is subject, nor will such action result in any violation of the
provisions of any statute or any order, rule or regulation of any Governmental
Authority having jurisdiction over Borrower or any of Borrower’s properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority required for the execution,
delivery and performance by Borrower of this Agreement or any other Loan
Documents has been obtained and is in full force and effect.
          4.1.4 Litigation. There are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending
or, to Borrower’s knowledge, threatened against or affecting Borrower or the
Property, which actions, suits or proceedings, if determined against Borrower or
the Property, would reasonably be likely to have a Material Adverse Effect.
          4.1.5 Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which is reasonably likely to have a
Material Adverse Effect. Borrower is not in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument, to which it is a party
or by which Borrower or the Property are bound, which is reasonably likely to
have a Material Adverse Effect. Borrower has no material financial obligation
under any indenture, mortgage, deed of trust or loan 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, (b) obligations under the Loan Documents,
(c) Permitted Encumbrances, (d) obligations to Manager under the Management
Agreement and (e) the Hotel Operating Lease.
          4.1.6 Title. Borrower has good and marketable and fee simple title to
the real property comprising part of the Property and good title to the balance
of the Property, free and clear of all Liens whatsoever except the Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. The Mortgage, when properly
recorded in the appropriate records, together with any Uniform Commercial Code
financing statements required to be filed in connection therewith, will create
(a) a valid, perfected lien on the Property, subject only to Permitted
Encumbrances and the Liens created by the Loan Documents and (b) perfected
security interests in and to, and perfected collateral assignments of, all
personalty (including the Leases), all in accordance with the terms thereof, in
each case subject only to any applicable Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by
the Loan Documents.

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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. Neither Borrower nor any Sponsor 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
Borrower’s assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it or such constituent
Persons.
          4.1.8 Full and Accurate Disclosure. To Borrower’s knowledge, no
statement of fact made by Borrower in this Agreement or in any of the other Loan
Documents contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no material fact presently known to Borrower which has not
been disclosed to Lender which adversely affects, nor as far as Borrower can
foresee would reasonably be expected to have a Material Adverse Effect.
          4.1.9 No Plan Assets. Borrower is not an “employee benefit plan,” as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the
assets of Borrower constitutes or will constitute “plan assets” of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition,
(a) Borrower is not a “governmental plan” within the meaning of Section 3(32) of
ERISA and (b) transactions by or with Borrower are not subject to 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.
          4.1.10 Compliance. To Borrower’s knowledge and except as disclosed to
Lender in writing, Borrower and the Property and the use thereof comply in all
material respects with all applicable Legal Requirements, including, without
limitation, building and zoning ordinances and codes, except to the extent such
failure would not reasonably be expected to have a Material Adverse Effect. To
Borrower’s knowledge and except as disclosed to Lender in writing, Borrower is
not in default or violation of any order, writ, injunction, decree or demand of
any Governmental Authority. There has not been committed by Borrower or, to
Borrower’s knowledge, any other Person in occupancy of or involved with the
operation or use of the Property any act or omission affording the federal
government or any other 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.
          4.1.11 Financial Information. To Borrower’s knowledge, all financial
data, including, without limitation, the statements of cash flow and income and
operating expense, that have been delivered to Lender in respect of the Property
(i) are true, complete and correct in all material respects as of the date
hereof, (ii) accurately represent the financial condition of the Property as of
the date of such reports, and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP throughout the periods covered, except as disclosed therein. Except
for Permitted Encumbrances, Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a Material Adverse

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Effect on the Property or the operation thereof as hotels, except as referred to
or reflected in said financial statements. Since the date of such financial
statements, there has been no materially adverse change in the financial
condition, operations or business of Borrower from that set forth in said
financial statements.
          4.1.12 Condemnation. No Condemnation or other proceeding 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.
          4.1.13 Federal Reserve Regulations. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.
          4.1.14 Utilities and Public Access. Except as disclosed to Lender in
writing, 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. Except as disclosed to Lender in writing, all
public utilities necessary or convenient to the full use and enjoyment 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 Insurance Policy. Except as disclosed to
Lender in writing, all roads necessary for the use of the Property for their
current purposes have been completed and dedicated to public use and accepted by
all Governmental Authorities or are the subject of access easements for the
benefit of the Property.
          4.1.15 Not a Foreign Person. Borrower is not a “foreign person” within
the meaning of §1445(f)(3) of the Code.
          4.1.16 Separate Lots. Except as disclosed to Lender in writing, the
Property is comprised of one (1) or more parcels which constitute a separate tax
lot or lots and does not constitute a portion of any other tax lot not a part of
the Property.
          4.1.17 Assessments. Except as disclosed to Lender in writing, there
are no pending or, to Borrower’s knowledge, proposed special or other
assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such
special or other assessments.
          4.1.18 Enforceability. The Loan Documents are not subject to any 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, and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto (subject to bankruptcy and
equitable principles).

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          4.1.19 No Prior Assignment. There are no prior assignments of the
Leases or any portion of the Rents due and payable or to become due and payable
which are presently outstanding.
          4.1.20 Intentionally Deleted.
          4.1.21 Use of Property. The Property is used exclusively for hotel
purposes and other appurtenant and related uses.
          4.1.22 Certificate of Occupancy; Licenses. Except to the extent the
failure to do so would not have a Material Adverse Effect and except as
disclosed to Lender in writing, all certifications, permits, licenses and
approvals, including without limitation, certificates of completion and
occupancy permits required for the legal use, occupancy and operation of the
Property as a hotel (collectively, the “Licenses”), have been obtained and are
in full force and effect or with respect to the liquor licenses, will be
obtained within thirty (30) days after the Closing Date. Borrower shall keep and
maintain or cause to be kept and maintained all licenses necessary for the
operation of the Property as a hotel. The use being made of the Property is in
conformity with the certificate of occupancy issued for the Property.
          4.1.23 Flood Zone. Except as disclosed in the Survey delivered to
Lender on or prior to the Closing Date, 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.
          4.1.24 Intentionally Deleted.
          4.1.25 Boundaries. Except as disclosed to Lender in the Survey
delivered to Lender on or prior to the Closing Date, to Borrower’s knowledge,
all of the Improvements which were included in determining the appraised value
of the Property lie wholly within the boundaries and building restriction lines
of the Property, and no Improvements on adjoining properties encroach upon the
Property, and no easements or other encumbrances upon the Property encroach upon
any of the Improvements, so as to affect the value or marketability of the
Property except those which are insured against by title insurance or which
would not result in a Material Adverse Effect.
          4.1.26 Leases. Except as disclosed to Lender in writing, the Property
is not subject to any Leases other than the Hotel Operating Lease. There has
been no prior sale, transfer or assignment, hypothecation or pledge of any Lease
or of the Rents received therein. No tenant under any Lease has a right or
option pursuant to such Lease or otherwise to purchase all or any part of the
leased premises or the building of which the leased premises are a part. No
tenant under any Lease has any right or option for additional space in the
Improvements. Borrower has no knowledge of any tenant’s intention to use its
leased premises for any activity which, directly or indirectly, involves the
use, generation, treatment, storage, disposal or transportation of any petroleum
product or any toxic or hazardous chemical, material, substance or waste.
          4.1.27 Intentionally Deleted.

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          4.1.28 Intentionally Deleted.
          4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements currently in effect in
connection with the transfer of the Property to Borrower have been paid or are
being paid simultaneously herewith. All mortgage, 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 Mortgage, have been paid or shall
be paid on the date hereof simultaneously with the closing of the Loan, and,
under current Legal Requirements, the Mortgage is enforceable in accordance with
its terms by Lender (or any subsequent holder thereof subject to principles of
equity and bankruptcy, insolvency and other laws generally applicable to
creditors’ rights and the enforcement of debtors’ obligations).
          4.1.30 Single Purpose Entity/Separateness. Borrower represents,
warrants and covenants as follows:
          (a) The purpose for which Borrower is organized is and shall be
limited solely to (i) acquiring, renovating, owning, holding, selling, leasing,
transferring, exchanging, operating and managing the Property, (ii) entering
into this Agreement and the other Loan Documents with Lender, (iii) refinancing
the Property in connection with a repayment of the Loan and (iv) transacting any
and all lawful business for which Borrower is organized under its constitutive
law that is incident, necessary and appropriate to accomplish the foregoing.
          (b) Borrower has not owned, does not own and will not own any asset or
property other than (i) the Property, and (ii) incidental personal property
necessary for and used or to be used in connection with the ownership or
operation of the Property.
          (c) Borrower has not engaged and will not engage in any business other
than set forth in subsection (a) above.
          (d) Except for capital contributions and distributions, Borrower will
not enter into any contract or agreement with any Affiliate of Borrower, any
constituent party of Borrower, any guarantors of the obligations of Borrower or
any Affiliate of any constituent party, owner or guarantor (collectively, the
“Related Parties”), except (A) upon terms and conditions that are intrinsically
fair, commercially reasonable and substantially similar to those that would be
available on an arms-length basis with third parties not so affiliated with
Borrower or such Related Parties; or (B) as permitted by Lender.
          (e) Borrower has not incurred and will not incur any Indebtedness
other than (i) the Loan, (ii) trade and operational debt incurred in the
ordinary course of business with trade creditors, provided such debt is not
evidenced by a note and is not in excess of sixty (60) days past due, (iii) the
financing of equipment and other personal property used on the Property which
may be secured only by the equipment or other personal property financed
thereby, (iv) Capital Expenditures having a cost in the aggregate (taking into
account all Capital Expenditures which are ongoing or which have not been paid
for in full) and (v) Borrower’s guarantee of the

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Management Agreement, provided that the aggregate of the items described in
clauses (ii)-(iv) above, together with the permitted indebtedness incurred by
Hotel Operator pursuant to Section 19 of the Subordination Agreement, is not at
any time in excess of $1,682,100.00 (collectively, the “Permitted Debt”). Except
as described in clause (iii) above, no Indebtedness other than the Debt may be
secured (senior, subordinate or pari passu) by the Property.
          (f) Borrower has not made and will not make any loans or advances to
any Person and shall not acquire obligations or securities of any Related Party.
          (g) Borrower is and will remain solvent and Borrower will pay its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) from its assets as the same shall become due provided, however, this
provision shall not require any member of Borrower to make an additional capital
contribution.
          (h) Borrower has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve its existence, and
Borrower will not amend, modify or otherwise change the partnership certificate,
partnership agreement, articles of incorporation and bylaws, operating
agreement, trust or other organizational documents of Borrower without the prior
written consent of Lender (such consent shall not be unreasonably withheld),
provided, however, that Borrower may amend or modify such organizational
documents if (A) such action is taken in accordance with the terms and
provisions of such organizational documents, (B) such action would not
reasonably be expected to have a Material Adverse Effect, (C) such action is
expressly permitted by the terms of the Loan Documents, or (D) such action is
taken in connection with the contemporaneous repayment in full of the Debt,
provided, further, in no event shall any amendment or modification to such
organizational documents amend or modify the Special Purpose Provisions (as
defined in Borrower’s limited liability company agreement) or effect Borrower’s
status as a single purpose, bankruptcy remote entity.
          (i) Borrower will maintain all of its books, records, financial
statements and bank accounts separate from those of any other Person and except
as required by GAAP, Borrower’s assets will not be listed as assets on the
financial statement of any other Person. Borrower will file its own tax returns
(unless Borrower is not required by law to file its own returns) and except as
required by GAAP, will not file a consolidated federal income tax return with
any other Person.
          (j) Borrower will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other Person (including
any Affiliate or other Related Party), shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its own
name, shall not identify itself as a division or part of any other Person and
shall maintain and utilize separate stationery, invoices and checks.
          (k) Borrower will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations provided, however, this provision shall not
require any member of Borrower to make an additional capital contribution.

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          (l) Borrower will not seek the dissolution, winding up, liquidation,
consolidation or merger in whole or in part, or the sale of material assets of
Borrower.
          (m) Borrower will not commingle its assets with those of any other
Person and will hold all of its assets in its own name.
          (n) Borrower will not guarantee or become obligated for the debts of
any other Person and does not and will not hold itself out as being responsible
for the debts or obligations of any other Person except for the Management
Agreement Guaranty.
          (o) if such entity is a limited liability company with only one
economic member, is a limited liability company organized in the State of
Delaware that has (i) one economic member, and (ii) at least two Independent
Members and has not caused or allowed and will not cause or allow the board of
managers, if any, of such entity to take any action requiring the unanimous
affirmative vote of one hundred percent (100%) of the members unless two
Independent Members shall have participated in such vote.
          (p) if such entity is a limited liability company, has articles of
organization, a certificate of formation and/or an operating agreement, provide
that such entity will not: (A) dissolve, merge, liquidate, consolidate; (B) so
long as the Loan is outstanding, sell all or substantially all of its assets or
the assets of the Borrower (as applicable) unless the Loan is repaid
simultaneously with such sale, in each case in accordance with the terms and
conditions of the Loan Documents; (C) engage in any other business activity, or
amend its organizational documents with respect to the matters set forth in this
definition without the consent of the Lender, so long as the Loan is
outstanding; or (D) without the affirmative vote of two Independent Members and
of all other managers of the Borrower (if any), file a bankruptcy or insolvency
petition or otherwise institute insolvency proceedings with respect to itself or
to any other entity in which it has a direct or indirect legal or beneficial
ownership interest. As used herein, “Independent Member” means a natural person
who is not at the time of initial appointment as a non-economic member or at any
time while serving as a member of the Borrower and has not been at any time
during the five (5) years preceding such initial appointment:
     (i) a stockholder, director, manager (with the exception of serving as an
Independent Member of the Borrower), officer, trustee, employee, partner,
member, attorney or counsel of Borrower, the Sole Member or any Affiliate of
either of them;
     (ii) a creditor, customer, supplier, or other person who derives any of its
purchases or revenues from its activities with the Sole Member, the Borrower or
any Affiliate of either of them;
     (iii) a Person Controlling or under common Control with any Person excluded
from serving as Independent Member under (i) or (ii); or
     (iv) a member of the immediate family by blood or marriage of any Person
excluded from serving as Independent Member under (i) or (ii).

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A natural person who satisfies the foregoing definition other than subparagraph
(ii) shall not be disqualified from serving as an Independent Member of the
Borrower if such individual is an Independent Member provided by a
nationally-recognized company that provides professional independent members or
managers (a “Professional Independent Manager”) and other corporate services in
the ordinary course of its business. A natural person who otherwise satisfies
the foregoing definition other than subparagraph (i) by reason of being the
independent director, member or manager of a “special purpose entity” affiliated
with the Borrower shall not be disqualified from serving as an Independent
Member of the Borrower if such individual is either (x) a Professional
Independent Manager or (y) the fees that such individual earns from serving as
independent manager or independent member of affiliates of the Borrower in any
given year constitute in the aggregate less than five percent (5%) of such
individual’s annual income for that year. Notwithstanding the immediately
preceding sentence, an Independent Member may not simultaneously serve as
Independent Member of the Borrower and independent manager, member or director
of a special purpose entity that owns a direct or indirect equity interest in
the Borrower or a direct or indirect interest in any co-borrower with the
Borrower. For purposes of this paragraph, a “special purpose entity” is an
entity, whose organizational documents contain restrictions on its activities
and impose requirements intended to preserve such entity’s separateness that are
substantially similar to the provisions of this Section 4.1.30.
          (q) Borrower shall allocate fairly and reasonably any overhead
expenses that are shared with an Affiliate, including paying for office space
and services performed by any employee of an Affiliate or Related Party.
          (r) Borrower shall not pledge its assets to secure the obligations of
any other Person other than with respect to the Loan.
          (s) Borrower shall maintain a sufficient number of employees in light
of its contemplated business operations and pay the salaries of its own
employees from its own funds provided, however, this provision shall not require
any member of Borrower to make an additional capital contribution.
          (t) Borrower shall conduct its business so that the assumptions made
with respect to Borrower in the Insolvency Opinion shall be true and correct in
all material respects.
          4.1.31 Management Agreement. The Management Agreement is in full force
and effect and, to Borrower’s knowledge, 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.
          4.1.32 Illegal Activity. No portion of the Property has been or will
be purchased with proceeds of any illegal activity.
          4.1.33 No Change in Facts or Circumstances; Disclosure. All statements
of fact in information submitted by Borrower to Lender and in all financial
statements, rent rolls, reports, certificates and other documents submitted in
connection with the Loan or in satisfaction of the terms thereof and all
statements of fact made by Borrower in this Agreement or in any other Loan
Document, are accurate, complete and correct in all material respects. There has

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been no material adverse change in any condition, fact, circumstance or event
that would make any such information inaccurate, incomplete or otherwise
misleading and result in a Material Adverse Effect. Borrower has disclosed to
Lender all material facts and has not failed to disclose any material fact that
could cause any representation or warranty made herein to be materially
misleading.
          4.1.34 Anti-Terrorism. (a) Neither Borrower nor Sponsor is in
violation of any Legal Requirements, including Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001 and relating to Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism, (the “Executive Order”) and the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Public Law 107-56, the “Patriot Act”).
          (b) Neither Borrower nor Sponsor is a Prohibited Person with the
result that the Loan is in violation of Legal Requirements.
          4.1.35 Permitted Encumbrance. To Borrower’s knowledge, none of the
Permitted Encumbrances, in the aggregate materially and adversely affect the
value or use of the Property or Borrower’s ability to repay the Loan.
          Section 4.2 Survival of Representations. Borrower agrees that all of
the representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any amount remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents by Borrower
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.
V. BORROWER COVENANTS
          Section 5.1 Affirmative Covenants. From the date hereof and until
payment and performance in full of all obligations of Borrower under the Loan
Documents or the earlier release of the Lien of the Mortgage (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
          5.1.1 Existence; Compliance with Legal Requirements; Insurance. To the
extent necessary to avoid a Material Adverse Effect, Borrower shall do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its existence, rights, licenses, permits and franchises and comply with
all Legal Requirements applicable to it and the Property. Borrower shall never
commit, and shall use commercially reasonable efforts not to, permit any other
Person involved with the operation of the Property to commit any act 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 knowingly commit, and covenants and agrees to use commercially
reasonable efforts not to knowingly permit, to exist any act or omission
affording such right of forfeiture. To the extent necessary to avoid a

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Material Adverse Effect, 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 provided in the Mortgage. Borrower shall
keep the Property insured in accordance with this Agreement. Notwithstanding
anything to the contrary herein Borrower may, at its own expense, contest the
validity of a Lien or Legal Requirements by appropriate legal proceeding so long
as such legal proceeding is promptly initiated and conducted in good faith with
due diligence and provided that (i) no Event of Default exists; (ii) such
proceeding is conducted in accordance with any instrument to which Borrower or
the Property is subject and does not constitute a default thereunder; and
(iii) Borrower furnishes to Lender all information or security as may be
reasonably requested by Lender in connection with such legal proceeding.
          5.1.2 Taxes and Other Charges. Borrower shall pay all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Property or
any part thereof prior to the date such amounts become subject to interest and
penalties; provided, however, Borrower’s obligation to directly pay Taxes shall
be suspended for so long as Borrower complies with the terms and provisions of
Section 7.2 hereof (including, without limitation, in connection with the
exercise of Borrower’s right to contest the validity or the amount of Taxes in
accordance with the terms and provisions hereof). Promptly upon request,
Borrower will deliver or cause to be delivered to Lender receipts for payment or
other evidence satisfactory to Lender that the Taxes and Other Charges have been
so paid or are not then delinquent (provided, however, that Borrower is not
required to furnish such receipts for payment of Taxes in the event that such
Taxes have been paid by Lender pursuant to Section 7.2 hereof). Subject to
Borrower’s right to contest hereunder, Borrower shall not suffer and shall
promptly cause to be paid, discharged or bonded any Lien or charge whatsoever
which may be or become a Lien or charge against the Property, and shall promptly
pay for all utility services provided to the Property (unless the obligation is
to be paid by Lender pursuant to Section 7.2 hereof). After prior written notice
to Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
Taxes or Other Charges, provided that (i) no Event of Default has occurred and
remains uncured; (ii) such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) neither the Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (iv) Borrower shall promptly upon final
determination thereof (not subject to further appeal) pay the amount of any such
Taxes or Other Charges, together with all costs, interest and penalties which
may be payable in connection therewith; (v) such proceeding shall suspend the
collection of such contested Taxes or Other Charges from the Property; and
(vi) Borrower shall furnish such security as may be required in the proceeding,
or as may be reasonably requested by Lender, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon. Lender
may pay over any such cash deposit or part thereof held by Lender to the
claimant entitled thereto at any time when, in the reasonable judgment of
Lender, the entitlement of such claimant is established and the Property is in
imminent danger of being sold, forfeited or lost.

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          5.1.3 Litigation. Borrower shall give prompt written notice to Lender
of any litigation or governmental proceedings pending or threatened in writing
against Borrower which, if adversely determined, would reasonably be expected to
have a Material Adverse Effect.
          5.1.4 Access to Property. Borrower shall permit agents,
representatives and employees of Lender to inspect the Property or any part
thereof at reasonable hours upon reasonable advance notice.
          5.1.5 Notice of Default. Borrower shall promptly advise Lender of any
Default or Event of Default of which Borrower has actual knowledge.
          5.1.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully
with Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in any way materially and adversely affect the
rights of Lender hereunder or any rights obtained by Lender under any of the
other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.
          5.1.7 Intentionally Deleted.
          5.1.8 Insurance Benefits. Subject to the terms hereof, Borrower shall
reasonably cooperate with Lender in obtaining for Lender the benefits of any
Insurance Proceeds lawfully or equitably payable in connection with the
Property, and Lender shall be reimbursed for any reasonable expenses incurred in
connection therewith (including reasonable attorneys’ fees and disbursements,
and the payment by Borrower of the expense of an appraisal on behalf of Lender
in case of a fire or other casualty affecting the Property or any part thereof)
out of such Insurance Proceeds.
          5.1.9 Further Assurances. Borrower shall, at Borrower’s sole cost and
expense:
          (a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and
          (b) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time.
          5.1.10 Intentionally Deleted.
          5.1.11 Financial Reporting. (a) Borrower will keep and maintain or
will cause to be kept and maintained on a Fiscal Year basis, in accordance with
the Uniform System of Accounts or GAAP (or such other accounting basis
reasonably acceptable to Lender), proper and accurate books, records and
accounts reflecting all of the financial affairs of Borrower and all items of
income and expense in connection with the operation of the Property. Lender
shall have the right from time to time at all times during normal business hours
upon reasonable notice to

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examine such books, records and accounts at the office of Borrower or other
Person maintaining such books, records and accounts and to make such copies or
extracts thereof as Lender shall desire. After the occurrence of an Event of
Default that is continuing, Borrower shall pay any reasonable costs and expenses
incurred by Lender to examine Borrower’s accounting records with respect to the
Property, as Lender shall determine to be necessary or appropriate in the
protection of Lender’s interest.
          (b) Borrower will furnish to Lender annually, within one hundred and
twenty (120) days following the end of each Fiscal Year a complete copy of
Borrower’s annual financial statements audited by a “Big Four” accounting firm
or other independent certified public accountant reasonably acceptable to Lender
in accordance with the Uniform System of Accounts or GAAP (or such other
accounting basis reasonably acceptable to Lender) covering the Property for such
Fiscal Year and containing statements of profit and loss for Borrower and the
Property and a balance sheet for Borrower. Borrower shall also deliver a report
of its financial condition and the results of operations for the Property for
such Fiscal Year, and shall include, but not be limited to, amounts representing
annual Net Cash Flow, Net Operating Income, Gross Income from Operations and
Operating Expenses. Borrower’s annual financial statements shall be accompanied
by (i) a comparison from Borrower of the budgeted income and expenses and the
actual income and expenses for the prior Fiscal Year, (ii) an Officer’s
Certificate, stating that each such annual financial statement presents fairly
the financial condition and the results of operations of Borrower and the
Property being reported upon and has been prepared in accordance with the
Uniform System of Accounts (or such other accounting basis reasonably acceptable
to Lender), and (iii) a schedule audited by such independent certified public
accountant reconciling Net Operating Income to Net Cash Flow (the “Net Cash Flow
Schedule”), which shall itemize all adjustments made to Net Operating Income to
arrive at Net Cash Flow deemed material by such independent certified public
accountant. Together with Borrower’s annual financial statements, Borrower shall
furnish to Lender an Officer’s Certificate certifying to the actual knowledge of
Borrower as of the date thereof whether there exists any Event of Default under
the Loan Documents executed and delivered by, or applicable to, Borrower, and if
such Event of Default exists, the nature thereof, the period of time it has
existed and the action then being taken to remedy the same.
          (c) Borrower will furnish, or cause to be furnished, to Lender on or
before sixty (60) days after the end of each calendar quarter the following
items, accompanied by a certificate of the chief financial officer of Borrower
or the general partner or managing member of Borrower, as applicable, stating
that such items are true, correct, accurate, and complete and fairly present the
financial condition and results of the operations of Borrower and the Property
(subject to normal year-end adjustments): (i) a report of occupancy for the
subject calendar month within the applicable quarter including an average daily
rate, and any and all franchise inspection reports received by Borrower during
the subject calendar month accompanied by an Officer’s Certificate with respect
thereto; (ii) monthly and year-to-date operating statements (including Capital
Expenditures) prepared for each calendar month within the applicable quarter,
noting Net Operating Income, Gross Income from Operations, and Operating
Expenses, and other information necessary and sufficient to fairly represent the
financial position and results of operation of the Property during such calendar
month, and containing a comparison of budgeted income and expenses and the
actual income and expenses together with a detailed explanation of any variances
of five percent (5%) or more between budgeted and actual amounts for such

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periods, all in form satisfactory to Lender; and (iii) a Net Cash Flow Schedule.
In addition, such certificate shall also be accompanied by a certificate of the
chief financial officer of Borrower or the managing member of Borrower stating
the amount and nature of trade payables outstanding for more than sixty
(60) days. On or before thirty (30) days after the end of each calendar month,
Borrower also will furnish, or cause to be furnished, to Lender the most current
Smith Travel Research Reports then available to Borrower reflecting market
penetration and relevant hotel properties competing with the Property.
          (d) For the partial year period commencing on the date hereof, and for
each Fiscal Year thereafter, Borrower shall submit or cause to be submitted to
Lender an Annual Budget not later than fifteen (15) days prior to the
commencement of such period or Fiscal Year (as applicable). Notwithstanding
anything to the contrary, the Annual Budget shall not be subject to Lender’s
approval.
          (e) Borrower shall furnish to Lender, within ten (10) Business Days
after request (or as soon thereafter as may be reasonably possible), such
further information with respect to the operation of the Property and the
financial affairs of Borrower as may be reasonably requested by Lender.
          (f) Any reports, statements or other information required to be
delivered under this Agreement shall be delivered (i) in paper form, (ii) on a
diskette, or (iii) if requested by Lender and within the capabilities of
Borrower’s data systems without change or modification thereto, in electronic
form and prepared using a Microsoft Word or Excel for Windows or WordPerfect for
Windows files (which files may be prepared using a spreadsheet program and saved
as word processing files).
          (g) Borrower agrees that Lender may forward to each purchaser,
transferee, assignee, servicer, participant or investor in all or any portion of
the Loan or any Securities or any Rating Agency rating such participations
and/or Securities, all documents and information which Lender now has or may
hereafter acquire relating to the Debt and to Borrower and the Property, whether
furnished by Borrower or otherwise, as Lender determines necessary or desirable.
Borrower irrevocably waives any and all rights it may have under any Applicable
Laws to prohibit such disclosure, including, but not limited, to any right of
privacy.
          5.1.12 Business and Operations. Borrower will 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 will qualify to do business and will remain in good standing
under the laws of the jurisdiction as and to the extent the same are required
for the ownership, maintenance, management and operation of the Property to the
extent necessary to avoid a Material Adverse Effect.
          5.1.13 Title to the Property. Borrower will warrant and defend (a) the
title to the Property and every part thereof, subject only to Liens permitted
hereunder (including Permitted Encumbrances) and (b) the validity and priority
of the Lien of the Mortgage and the Assignment of Leases on the Property,
subject only to Liens permitted hereunder (including Permitted Encumbrances), in
each case against the claims of all Persons whomsoever. Borrower shall reimburse
Lender for any losses, reasonable costs, damages or reasonable expenses

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(including reasonable attorneys’ fees and court costs but excluding lost
profits, diminution in the value and consequential damages) incurred by Lender
if an interest in the Property, other than as permitted hereunder, is claimed by
another Person.
          5.1.14 Costs of Enforcement. In the event (a) that any Mortgage is
foreclosed in whole or in part or that the Mortgage is put into the hands of an
attorney for collection, suit, action or foreclosure, (b) of the foreclosure of
any mortgage prior to or subsequent to the Mortgage 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 Guarantor or an assignment by
Borrower or any Guarantor 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 reasonable
costs, incurred by Lender in connection therewith and in connection with any
appellate proceeding or post-judgment action involved therein, together with all
required service or use taxes.
          5.1.15 Estoppel Statement. After request by Lender, Borrower shall
within ten (10) days furnish Lender with a statement, duly acknowledged and
certified, setting forth (i) the amount of the original principal amount of the
Note, (ii) the unpaid principal amount of the Note, (iii) the Regular Interest
Rate of the Note, (iv) the date installments of interest and/or principal were
last paid, (v) knowledge of any offsets or defenses to the payment of the Debt,
if any, and (vi) that the Note, this Agreement, the Mortgage and the other Loan
Documents are valid, legal and binding obligations and have not been modified or
if modified, giving particulars of such modification. At the request of
Borrower, Lender will deliver a similar statement with respect to items
(i) through (iv) above.
          5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan
received by it on the Closing Date only for the purposes set forth in
Section 2.1.4.
          5.1.17 Performance by Borrower. Borrower shall in a commercially
reasonable manner observe, perform and fulfill each and every covenant, term and
provision of each Loan Document executed and delivered by, or applicable to,
Borrower, subject to applicable notice and grace periods.
          5.1.18 Confirmation of Good Standing. At Lender’s expense, Borrower
shall deliver, in connection with any Securitization, certificates of the
relevant Governmental Authorities in all relevant jurisdictions indicating the
good standing and qualification of Borrower and its member as of the date of the
Securitization.
          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 Leasing Matters. Any Material Lease other than the Hotel
Operating Lease with respect to the Property executed after the date hereof
shall be approved by Lender,

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which approval shall not be unreasonably withheld. Upon request, Borrower shall
furnish Lender with executed copies of all Leases, if any. All renewals of
Leases, if any, and all proposed Leases shall provide for rental rates
comparable to existing local market rates. All proposed Leases, if any, shall be
on commercially reasonable terms and shall not contain any terms which would
materially and adversely affect Lender’s rights under the Loan Document.
          5.1.21 Alterations. (a) Borrower shall obtain Lender’s prior written
consent to any Alterations to any Improvements that would result in a Material
Adverse Effect. If the total unpaid amounts with respect to Alterations to the
Improvements at the Property (other than such amounts to be paid or reimbursed
by tenants under the Leases or from a Reserve Fund) shall at any time exceed the
Alteration Threshold Amount, Borrower shall promptly deliver to Lender as
security for the payment of such amounts and as additional security for
Borrower’s obligations under the Loan Documents any of the following: (A) cash,
(B) U.S. Obligations, (C) other securities having a rating acceptable to Lender
and that the applicable Rating Agencies have confirmed in writing will not, in
and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with any
Securitization, (D) a completion bond or letter of credit issued by a financial
institution having a rating by S&P of not less than A-1+ if the term of such
bond or letter of credit is no longer than three (3) months or, if such term is
in excess of three (3) months, issued by a financial institution having a rating
that is acceptable to Lender and that the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization or (E) a Letter of Credit. Such
security shall be in an amount equal to the excess of the total unpaid amounts
with respect to Alterations to the Improvements on the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases or from a Reserve
Fund) over the Alteration Threshold Amount and shall be returned to Borrower
upon substantial completion of such Improvements, as reasonably determined by
Lender.
          (b) With regard to any action described in this Section 5.1.21 for
which Lender’s consent is required, Lender shall not withhold its consent or
disapproval to any such action for more than ten (10) Business Days after
request for approval thereof has been made by Borrower, accompanied by a
detailed description of the request for which approval is sought, provided that
Borrower submits such request for Lender’s approval in an envelope labeled
“Priority” and delivered to Lender by overnight delivery and otherwise in
accordance with the provisions of Section 10.6 and which request shall state at
the top of the first page in bold lettering “LENDER’S RESPONSE IS REQUIRED
WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF
A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER.” In the event that Lender
fails to either approve such request or disapprove such request (such
disapproval stating the reasons for such disapproval) for more than ten
(10) Business Days after receipt thereof, the action that was the subject of
said request shall be deemed approved.
          5.1.22 Management of Property. Borrower shall cause the Property to be
operated, in all material respects, in accordance with the Management Agreement
(or Replacement Management Agreement, as applicable). In the event that the
Management Agreement expires or is terminated, Borrower shall promptly enter
into a Replacement Management Agreement with Manager or another Qualified
Manager, as applicable.

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          5.1.23 Hotel Operating Lease. (a) Borrower shall cause the Hotel
Operator to operate the Property in accordance with the Hotel Operating Lease.
Borrower shall diligently perform and observe in all material respects all of
the terms, covenants and conditions of the Hotel Operating Lease on the part of
Borrower to be performed and observed and shall promptly notify Lender of any
notice received by Borrower of any material default in the performance or
observance of any of the terms, covenants or conditions of the Hotel Operating
Lease on the part of Borrower to be performed and observed. If Borrower shall
default in the performance or observance of any material term, covenant or
condition of any Hotel Operating Lease on the part of Borrower to be performed
or observed beyond any applicable grace or cure period set forth in the Hotel
Operating Lease, then, without limiting Lender’s other rights or remedies under
this Agreement or the other Loan Documents, and without waiving or releasing
Borrower from any of its obligations hereunder or under the Hotel Operating
Lease, but subject to delivery of written notice, Lender shall have the right,
but shall be under no obligation, to pay any sums and to perform any act as may
be appropriate to cause all the material terms, covenants and conditions of the
Hotel Operating Lease on the part of Borrower to be performed or observed.
          (b) The Hotel Operator shall be a single purpose, bankruptcy remote
entity pursuant to applicable Rating Agency criteria (it being agreed that the
organizational documents of Hotel Operator approved by Lender in connection with
the Loan satisfy applicable Rating Agency criteria) and Borrower shall deliver
to Lender an acceptable nonconsolidation opinion with respect to the Hotel
Operator. The Hotel Operating Lease shall be subordinate to the Mortgage and
shall provide that it shall be terminated without penalty to Lender, upon
foreclosure of the Mortgage or delivery of a deed in lieu of foreclosure.
          (c) Except as expressly provided below, Borrower shall not consent to
or enter into any of the following transactions, or any combination thereof,
unless it has received written confirmation from the Rating Agencies that such
transaction or combination thereof will not result in a qualification, downgrade
or withdrawal of the then current ratings assigned to the Securities: (i) the
surrender of the Hotel Operating Lease to an unaffiliated third party, (ii) the
assignment by the Hotel Operator of its interest under the Hotel Operating
Lease, (iii) the termination or cancellation of the Hotel Operating Lease, or
(iv) the modification, change, supplement, alteration or amendment of the Hotel
Operating Lease. Notwithstanding anything herein contained to the contrary,
Borrower shall be permitted, without any such written confirmation from the
Rating Agencies or the approval of Lender, to make any non-material
modification, change, supplement, alteration or amendment to the Hotel Operating
Lease and to waive any non-material rights thereunder (provided that any
required consent of the Manager has been obtained and no such modification,
change, supplement, alteration or amendment shall affect the subordination of
the Hotel Operating Lease, the timing of payments under the Hotel Operating
Lease, the single purpose bankruptcy-remote covenants of the Hotel Operator, or
any material economic provision of the Hotel Operating Lease).
          5.1.24 Philadelphia Repair Work. Borrower shall cause Accor to perform
the Philadelphia Repair Work (as defined in the Transfer Agreement) in
accordance with the terms of the Transfer Agreement. Borrower will enforce the
obligations of Accor under the Transfer Agreement to the end that Borrower may
enjoy all the rights granted to Borrower under the Transfer Agreement with
respect to the Philadelphia Repair Work (including, without limitation, Accor’s
reimbursement obligations to Borrower). Borrower agrees that without the prior
written

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consent of Lender Borrower will not execute amendments, modifications or
restatements to the Transfer Agreement which have any material effect on the
scope, timing, or manner of completion of the Philadelphia Repair Work.
          Section 5.2 Negative Covenants. From the date hereof until payment and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Liens of the Mortgage 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 Operation of Property. Following the occurrence and during the
continuance of an Event of Default, Borrower shall not exercise any rights, make
any decisions, grant any approvals or otherwise take any action under the
Management Agreement (other than those reasonably required to prevent a breach
thereunder) without the prior consent of Lender, which consent may be withheld
in Lender’s sole discretion.
          5.2.2 Liens. Borrower shall not, without the prior written consent of
Lender, create, incur, assume or suffer to exist any Lien (other than the Liens
which are being contested in good faith and with due diligence as required by
the terms of Section 5.1.1 hereof or which have been fully bonded to the
satisfaction of Lender) on any portion of the Property or knowingly permit any
such action to be taken, except:
     (i) Permitted Encumbrances;
     (ii) Liens created by or permitted pursuant to the Loan Documents; and
     (iii) Liens for Taxes or Other Charges not yet due and payable.
          5.2.3 Dissolution. Borrower shall not (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation
of the Property, or (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
properties or assets of Borrower except to the extent permitted by the Loan
Documents, (d) modify, amend, waive or terminate its organizational documents or
its qualification and good standing in any jurisdiction, in each case that would
have a Material Adverse Effect, in each case, without obtaining the prior
written consent of Lender or Lender’s designee (such consent shall not be
unreasonably withheld), provided, however, that Borrower may amend or modify
such organizational documents if (A) such action is taken in accordance with the
terms and provisions of such organizational documents, (B) such action would not
reasonably be expected to have a Material Adverse Effect, (C) such action is
expressly permitted by the terms of the Loan Documents, or (D) such action is
taken in connection with the contemporaneous repayment in full of the Debt,
provided, further, in no event shall any amendment or modification to such
organizational documents amend or modify the Special Purpose Provisions (as
defined in Borrower’s limited liability company agreement) or effect Borrower’s
status as a single purpose, bankruptcy remote entity.
          5.2.4 Change in Business. Borrower shall not enter into any line of
business other than the ownership and operation of the Property and services
related to resort operations,

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or make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.
          5.2.5 Debt Cancellation. Borrower shall not cancel or otherwise
forgive or release any claim or debt (other than termination of Leases in
accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower’s business or as reasonably
approved by Lender.
          5.2.6 Affiliate Transactions. Except for the Management Agreement and
the Hotel Operating Lease, Borrower shall not enter into, or be a party to, any
transaction with an Affiliate of Borrower except in the ordinary course of
business and on terms which are no less favorable to Borrower or such Affiliate
than would be obtained in a comparable arm’s-length transaction with an
unrelated third party.
          5.2.7 Zoning. Borrower shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior consent of Lender not to be unreasonably withheld.
          5.2.8 Assets. Borrower shall not purchase or own any property other
than the Property.
          5.2.9 Debt. Borrower shall not create, incur or assume any
Indebtedness other than the Debt except to the extent expressly permitted
hereby, including Borrower’s guarantee of the Management Agreement Guaranty.
          5.2.10 No Joint Assessment. Borrower shall not suffer, permit or
initiate the joint assessment of the Property with (a) any other real property
constituting a tax lot separate from the Property, or (b) 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 the Property.
          5.2.11 Principal Place of Business. Borrower shall not change its
principal place of business set forth on the first page of this Agreement
without first giving Lender thirty (30) days prior written notice.
          5.2.12 ERISA. (a) Borrower shall not engage in any transaction which
would cause any obligation, or action taken or to be taken, hereunder (or the
exercise by Lender of any of its rights under the Note, this Agreement or the
other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA.
          (b) Borrower shall not maintain an “employee benefit plan” as defined
in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a
“governmental plan” within the meaning of Section 3(32) of ERISA and Borrower
further covenants and agrees that one or more of the following circumstances is
true:

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     (i) Equity interests in Borrower are publicly offered securities, within
the meaning of 29 C.F.R. §2510.3-101(b)(2);
     (ii) Less than twenty-five percent (25%) of each outstanding class of
equity interests in Borrower are held by “benefit plan investors” within the
meaning of 29 C.F.R. §2510.3-101(f)(2); or
     (iii) Borrower qualifies as an “operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).
          5.2.13 Transfers. (a) Except as otherwise permitted by the provisions
of this Agreement, Borrower will not, without the prior consent of Lender,
(i) permit or suffer (by operation of law or otherwise) any sale, assignment,
conveyance, transfer or other disposition of legal or equitable interest in all
or any part of the Property (other than Permitted Encumbrances), (ii) permit or
suffer (by operation of law or otherwise) any sale, assignment, conveyance,
transfer or other disposition of any direct or indirect interest in Borrower or
Hotel Operator, (iii) permit or suffer (by operation of law or otherwise) any
mortgage, lien or other encumbrance of all or any part of the Property (other
than Permitted Encumbrances), or (iv) permit or suffer (by operation of law or
otherwise) any pledge, hypothecation, creation of a security interest in or
other encumbrance of any direct or indirect interest in Borrower or Hotel
Operator (each action described in clauses (i), (ii), (iii) and (iv) of this
subsection is a “Transfer”). Notwithstanding anything to the contrary contained
in this Agreement or in the other Loan Documents, (i) Transfers of interests in
Sponsor or in any Person having any direct or indirect legal or beneficial
interest in Sponsor or (ii) a Transfer by Accor of its direct or indirect
twenty-five percent (25%) interest in Borrower and Hotel Operator shall not be
prohibited or restricted in any manner whatsoever, including by sale, merger,
consolidation or otherwise and shall not be subject to any notice, delivery,
approval or consent requirements, including any requirement for an Additional
Insolvency Opinion or any other requirement under Section 5.2.13(c) hereof.
          (b) A sale or conveyance by Borrower of all of the Property subject to
the lien of the Mortgage (but not a mortgage, lien or other encumbrance) is
permitted (and no transfer or assumption fee shall be payable in connection
therewith) provided that the following conditions are satisfied:
     (i) no Event of Default shall have occurred and be continuing and such sale
or conveyance shall not result in an Event of Default;
     (ii) the Person to whom the Property is sold or conveyed (the “Transferee”)
satisfies the requirements of a Special Purpose Entity and the organizational
documents of the Transferee are reasonably acceptable to Lender and, after a
Securitization, to the Rating Agencies;
     (iii) a Permitted Owner owns not less than 51% of the direct or indirect
equity interests in the Transferee and controls, directly or indirectly, the
Transferee;
     (iv) Lender has received an additional nonconsolidation opinion (the
“Additional Insolvency Opinion”) substantively similar to the Insolvency Opinion
which may be relied upon by Lender, the Rating Agencies and their respective
counsel,

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successors and assigns, with respect to the Transferee and its applicable
affiliates, which Additional Insolvency Opinion shall be reasonably acceptable
to Lender and, after a Securitization, the Rating Agencies;
     (v) the Transferee shall execute an assumption, effective as of the date of
transfer, of all of the obligations of the Borrower thereafter arising or to be
performed under this Agreement, the Mortgage and the other Loan Documents,
subject, however, to the provisions of Section 9.4 hereof and upon such
assumption, Borrower shall be released from the Loan Documents;
     (vi) unless otherwise approved in writing by Lender in its sole discretion,
the entity which owns interests in the Transferee similar to the interests in
Borrower owned by Sole Member shall have an ownership structure that is
substantially the same as Borrower and the Sole Member;
     (vii) there shall be delivered to Lender opinions of counsel, in form,
substance and from counsel reasonably satisfactory to Lender and substantially
similar to those heretofore delivered as Lender requests on the following
matters, subject to exceptions and conditions customarily contained in such
opinions: (1) such corporate and securities opinions as shall be reasonably
requested by Lender, including without limitation, any and all opinions as shall
have been delivered to Lender in connection with the making of the Loan, and
(2) such other legal opinions as shall be reasonably requested by Lender;
     (viii) if following such sale or conveyance, Manager will not be the
property manager of the Property, then the property manager of the Property must
be a Qualifying Manager;
     (ix) if such sale or conveyance occurs after a Securitization, the Rating
Agencies shall have confirmed in writing that such sale or conveyance will not
result in a requalification, reduction, downgrade or withdrawal of the ratings
in effect immediately prior to such sale or conveyance for the Securities or any
class thereof issued in connection with a Securitization which are then
outstanding; and
     (x) if such sale or conveyance occurs prior to a Securitization, Lender
shall have consented to such sale or conveyance.
          (c) A Transfer (but not a pledge, hypothecation, creation of a
security interest in or other encumbrance) of any direct or indirect interest in
Borrower is permitted provided that, immediately prior to such Transfer, no
Event of Default has occurred and is continuing, and provided further that
(i) following such Transfer (A) (1) one or more Sponsors and their respective
Sponsor Affiliates directly or indirectly own not less than 51% of the direct or
indirect interests in Borrower and (2) one or more of Sponsors and their
respective Sponsor Affiliates directly or indirectly control Borrower or (B) if
clause (A) does not apply, such Transfer is made by one or more Sponsors and/or
their respective Sponsor Affiliates to a Permitted Owner who, together with the
other Sponsors and their respective Sponsor Affiliates, owns 51% of the direct
or indirect interests in Borrower and controls Borrower; (ii) if, as a result of
any one or more Transfers or series of Transfers of direct or indirect interests
in Borrower (and after giving effect

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to any such proposed or pending Transfer), more than 49% of the direct or
indirect ownership interests in Borrower shall have been transferred to a Person
not owning at least 49% of the direct or indirect ownership interests in
Borrower on the Closing Date, an Additional Insolvency Opinion shall have been
delivered to Lender which may be relied upon by Lender, the Rating Agencies and
their respective counsel, with respect to the proposed Transfer, which
Additional Insolvency Opinion shall be reasonably acceptable to a prudent lender
acting reasonably and, after a Securitization, the Rating Agencies; (iii) unless
otherwise approved in writing by Lender in its sole discretion, following such
Transfer, Sole Member shall remain the sole member of Borrower owning no less
than 100% of the direct equity interests in Borrower; and (iv) Borrower shall
give or cause to be given written notice to Lender of the proposed Transfer not
later than fifteen (15) days prior thereto, which notice shall set forth the
name of the Person to which the interest in Borrower is to be Transferred and
set forth the date the Transfer is expected to be effective.
          (d) A Transfer (but not a pledge, hypothecation, creation of a
security interest in or other encumbrance) of any direct interest or indirect
interest in Hotel Operator is permitted provided that, immediately prior to such
Transfer, no Event of Default has occurred and is continuing, and provided
further that (i) following such Transfer (A) (1) one or more Sponsors and their
respective Sponsor Affiliates directly or indirectly own not less than 51% of
the direct or indirect interests in Hotel Operator and (2) one or more of
Sponsors and their respective Sponsor Affiliates directly or indirectly control
Hotel Operator or (B) if clause (A) does not apply, such Transfer is made by one
or more Sponsors and/or their respective Sponsor Affiliates to a Permitted Owner
who, together with the other Sponsors and their Sponsor Affiliates, owns 51% of
the direct or indirect interests in Hotel Operator and controls Hotel Operator;
(ii) if, as a result of any one or more Transfers or series of Transfers of
direct or indirect interests in Hotel Operator (and after giving effect to any
such proposed or pending Transfer), more than 49% of the direct or indirect
ownership interests in Hotel Operator shall have been transferred to a Person
not owning at least 49% of the direct or indirect ownership interests in Hotel
Operator on the Closing Date, an Additional Insolvency Opinion shall have been
delivered to Lender which may be relied upon by Lender, the Rating Agencies and
their respective counsel, with respect to the proposed Transfer, which
Additional Insolvency Opinion shall be reasonably acceptable to a prudent lender
acting reasonably and, after a Securitization, the Rating Agencies; (iii) unless
otherwise approved in writing by Lender, following such Transfer, Hotel Operator
Sole Member shall remain the sole member of Hotel Operator owning no less than
100% of the direct equity interests in Hotel Operator; (iv) such Transfer is
permitted under the terms of the Management Agreement (or the Manager has
consented in writing to such Transfer); (v) following such Transfer, the
Operating Lease remains unmodified and in full force and effect; and
(vi) Borrower shall give or cause to be given written notice to Lender of the
proposed Transfer not later than fifteen (15) days prior thereto, which notice
shall set forth the name of the Person to which the interest in Hotel Operator
is to be Transferred and set forth the date the Transfer is expected to be
effective.
          (e) Anything herein to the contrary notwithstanding, Whitehall and GEM
shall be entitled to pledge, hypothecate or assign Whitehall’s and GEM’s
respective indirect interest in Borrower or Hotel Operator to any Institutional
Lender, provided that:

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     (i) Lender shall have received written notice of such pledge, mortgage,
hypothecation or assignment not less than five (5) Business Days prior to the
date on which the same is scheduled to close;
     (ii) no Event of Default is then continuing;
     (iii) the financing secured by such pledge, mortgage, hypothecation or
assignment is (x) recourse to Whitehall or (y) secured by a substantial portion
of Whitehall’s assets;
     (iv) Lender receives a certificate executed by an authorized officer of
Borrower or Hotel Operator or the managing member of Borrower or Hotel Operator
(as applicable), certifying that the financing secured by such pledge, mortgage,
hypothecation or assignment is not entered into solely in connection with
refinancing of the Property; and
     (v) Neither Whitehall nor GEM shall pledge, hypothecate, or assign any
direct interest of (A) Sole Member in Borrower or (B) Hotel Operator Sole Member
in Hotel Operator (provided, that, this clause (v) shall not prohibit Whitehall
or GEM from pledging, hypothecating or assigning its direct interests in Sole
Member or Hotel Operator Sole Member (subject to the other provisions of this
Section 5.2.13(e)).
          (f) Notwithstanding anything herein contained to the contrary, except
as otherwise specifically permitted pursuant to clauses (b), (c) or (d) above,
at all times, Whitehall and/or GEM shall directly or indirectly own not less
than fifty-one percent (51%) of the direct or indirect interests in Borrower and
Hotel Operator and directly or indirectly control Borrower and Hotel Operator.
          (g) Borrower agrees to bear and shall reimburse Lender on demand all
reasonable out-of-pocket expenses incurred by Lender in connection with any
transaction described in subsections (b), (c) and (d) of this Section 5.2.13.
          (h) After a Securitization, the provisions of this Section 5.2.13
shall not be modified or amended by Borrower and Lender unless the Rating
Agencies have confirmed that such amendment or modification, in and of itself,
will not result in a downgrade, qualification or withdrawal of the then current
ratings assigned to the Securities.
          (i) To the extent that Accor must obtain Borrower’s prior consent to a
transfer by Accor of its direct or indirect interests in Borrower pursuant to
the terms and conditions of the Management Agreement, Borrower shall not
exercise such right without first obtaining the prior written consent of Lender
to such a transfer.
VI. INSURANCE; CASUALTY; CONDEMNATION
          Section 6.1 Insurance. (a) Borrower shall obtain and maintain, or
cause to be maintained, insurance for Borrower and the Property providing at
least the following coverages:

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     (i) comprehensive all risk insurance including the peril of wind on the
Improvements and the Personal Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent (100%)
of the “Full Replacement Cost,” which for purposes of this Agreement shall mean
actual replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation;
(B) containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of Twenty-Five Thousand and No/100 Dollars ($25,000.00) for
all such insurance coverage; (D) providing for up to five percent (5%)
deductible for wind, hail and named storms; and (E) containing an “Ordinance or
Law Coverage” or “Enforcement” endorsement if any of the Improvements or the use
of the Property shall at any time constitute legal non-conforming structures or
uses. In addition, Borrower shall obtain: (y) if any portion of the Improvements
is currently or at any time in the future located in a federally designated
“special flood hazard area”, flood hazard insurance (A) in an amount equal to
the lesser of (1) the outstanding principal balance of the Loan or (2) the
maximum amount of such insurance available under the National Flood Insurance
Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994, as each may be amended or such greater amount as
Lender shall require and (B) providing for no deductible in excess of Fifty
Thousand and No/100 Dollars ($50,000.00) for such coverage; and (z) earthquake
insurance in amounts and in form and substance satisfactory to Lender in the
event the Property is located in an area with a high degree of seismic activity,
provided that the insurance pursuant to clauses (y) and (z) hereof shall be on
terms consistent with the comprehensive all risk insurance policy required under
this subsection (i). Notwithstanding the foregoing, in the event that any
portion of the Improvements is located in a federally designated “special flood
hazard area”, Borrower shall obtain the flood hazard insurance described in this
subsection (i) no later than twenty (20) Business Days from the Closing Date.
     (ii) commercial general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (A) to be on the so-called “occurrence” form with a
combined limit, excluding umbrella coverage, of not less than Two Million and
No/100 Dollars ($2,000,000) in the aggregate and One Million and No/100 Dollars
($1,000,000) per occurrence; (B) to continue at not less than the aforesaid
limit until required to be changed by Lender in writing by reason of changed
economic conditions making such protection inadequate; and (C) to cover at least
the following hazards: (1) premises and operations; (2) products and completed
operations on an “if any” basis; (3) independent contractors; (4) blanket
contractual liability for all legal contracts; and (5) contractual liability
covering the indemnities contained in Article 9 of the Mortgage to the extent
the same is available;
     (iii) business interruption and/or rental loss insurance (A) with loss
payable to Lender; (B) covering all risks required to be covered by the
insurance provided for in subsection (i) above; (C) containing an extended
period of indemnity endorsement which provides that after the physical loss to
the Improvements and Personal Property has been repaired, the continued loss of
income will be insured until such income for the Property either returns to the
same level it was at prior to the loss, or the expiration of Twelve (12)

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months from the date that the Property is repaired or replaced and operations
are resumed, whichever first occurs, and notwithstanding that the policy may
expire prior to the end of such period; and (D) in an amount equal to one
hundred percent (100%) of the projected gross income from the Property for a
period of eighteen (18) months from the date that the Property is repaired or
replaced and operations are resumed. The amount of such business income
insurance shall be determined prior to the date hereof and at least once each
year thereafter based on Borrower’s reasonable estimate of the gross income from
the Property for the succeeding eighteen (18) month period. All proceeds payable
to Lender pursuant to this subsection shall be held by Lender and shall be
applied to the obligations secured by the Loan Documents from time to time due
and payable hereunder and under the Note; provided, however, that nothing herein
contained shall be deemed to relieve Borrower of its obligations to pay the
obligations secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such business income insurance;
     (iv) at all times during which structural construction, repairs or
Alterations are being made with respect to the Improvements, and only if the
Property coverage form does not otherwise apply, (A) owner’s contingent or
protective liability insurance covering claims not covered by or under the terms
or provisions of the above mentioned commercial general liability insurance
policy; and (B) the insurance provided for in subsection (i) above written in a
so-called builder’s risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to subsection (i) above,
(3) including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
     (v) workers’ compensation, subject to the statutory limits of the State in
which the Property is located, and employer’s liability insurance with a limit
of at least Five Hundred Thousand and No/100 Dollars ($500,000.00) per accident
and per disease per employee, and Five Hundred Thousand and No/100 Dollars
($500,000.00) for disease aggregate in respect of any work or operations on or
about the Property, or in connection with the Property or its operation (if
applicable);
     (vi) comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by Lender on terms consistent with the
commercial property insurance policy required under subsection (i) above;
     (vii) umbrella liability insurance in an amount not less than Twenty-Five
Million and No/100 Dollars ($25,000,000.00) per occurrence on terms consistent
with the commercial general liability insurance policy required under subsection
(ii) above;
     (viii) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence, including umbrella coverage, of One Million and No/100 Dollars
($1,000,000.00) if applicable;
     (ix) intentionally deleted;

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     (x) insurance for loss resulting from perils and acts of terrorism on terms
(including amounts) consistent with the insurance required under
Sections 6.1(a)(i), (ii), (iii), (iv), (vi), and (vii) above at all times during
the term of the Loan, provided that (A) such insurance is available at
commercially reasonable rates and (B) commercial mortgage lenders are
customarily requiring such coverage on properties similar to the Property; and
     (xi) upon sixty (60) days’ written notice, such other reasonable insurance
and in such reasonable amounts as Lender from time to time may reasonably
request against such other insurable hazards which at the time are commonly
insured against for property similar to the Property located in or around the
region in which the Property is located.
          (b) All insurance provided for in Section 6.1(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”), and shall be subject to the approval of Lender as to
insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State in which the Property is
located, and having a claims paying ability rating of “A-” or better by S&P and
“A2” or better by Moody’s. The Policies described in Section 6.1 (other than
those strictly limited to liability protection) shall designate Lender as loss
payee. Not less than ten (10) days prior to the expiration dates of the Policies
theretofore furnished to Lender, certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Lender of payment of the
premiums due thereunder (the “Insurance Premiums”), shall be delivered by
Borrower to Lender.
          (c) Any blanket insurance Policy shall specifically allocate to the
Property the amount of coverage from time to time required hereunder and shall
otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 6.1(a).
          (d) All Policies of insurance provided for or contemplated by
Section 6.1(a), except for the Policy referenced in Section 6.1(a)(v), shall
name Borrower, or Hotel Operator, as the insured and Lender as the additional
insured, as its interests may appear, and in the case of property damage, boiler
and machinery, flood and earthquake insurance, shall contain a so-called New
York standard non-contributing mortgagee clause in favor of Lender providing
that the loss thereunder shall be payable to Lender.
          (e) All Policies of insurance provided for in Section 6.1(a)(v) shall
contain clauses or endorsements to the effect that:
     (i) no act or negligence of Borrower, or anyone acting for Borrower, or of
Hotel Operator or other occupant, or failure to comply with the provisions of
any Policy, which might otherwise result in a forfeiture of the insurance or any
part thereof, shall in any way affect the validity or enforceability of the
insurance insofar as Lender is concerned;
     (ii) the Policy shall not be materially changed (other than to increase the
coverage provided thereby) or canceled without at least (x) thirty (30) days’
written

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notice to Lender and any other party named therein as an additional insured, if
the Policy is cancelled for reasons other than non-payment of premium, or
(y) ten (10) day’s prior written notice to Lender and any other party named
therein as an additional insured, if the Policy is cancelled as a result of
non-payment of premium;
     (iii) the issuers thereof shall give written notice to Lender if the Policy
has not been renewed five (5) days prior to its expiration; and
     (iv) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder.
          (f) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Property, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate. All premiums incurred by Lender in connection with
such action or in obtaining such insurance and keeping it in effect shall be
paid by Borrower to Lender upon demand and, until paid, shall be secured by the
Mortgage and shall bear interest at the Default Rate.
          Section 6.2 Casualty. If the Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall
give prompt notice of such Casualty to Lender and shall promptly commence and
diligently prosecute the completion of the repair and restoration of the
Property as nearly as possible to the condition the Property was in immediately
prior to such Casualty, with such Alterations as may be reasonably approved by
Lender (a “Restoration”) and otherwise in accordance with Section 6.4, provided,
that if (A) Lender is obligated to make Net Proceeds available to Borrower for
purposes of Restoration in accordance with the terms hereof, (B) Lender has
received such Net Proceeds and (C) Lender has not made such Net Proceeds
available to Borrower, then Borrower shall not be required to repair and restore
the Property. Borrower shall pay all costs of such Restoration whether or not
such costs are covered by insurance. Lender may, but shall not be obligated to
make proof of loss if not made promptly by Borrower after written notice from
Lender.
          Section 6.3 Condemnation. Borrower shall promptly give Lender notice
of the actual or threatened commencement of any proceeding for the Condemnation
of the Property and shall deliver to Lender copies of any and all papers served
in connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall, at its
expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on or
defense of any such proceedings. Notwithstanding any taking by any public or
quasi-public authority through Condemnation or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement and the Debt
shall not be reduced until any Award shall have been actually received and
applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Debt. Lender shall not be limited to the interest
paid on the Award by the condemning authority but shall be entitled

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to receive out of the Award interest at the rate or rates provided herein or in
the Note. If the Property or any portion thereof is taken by a condemning
authority, Borrower shall promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of
Section 6.4. If the Property is sold, through foreclosure or otherwise, prior to
the receipt by Lender of the Award, Lender shall have the right, whether or not
a deficiency judgment on the Note shall have been sought, recovered or denied,
to receive the Award, or a portion thereof sufficient to pay the Debt.
          Section 6.4 Restoration. The following provisions shall apply in
connection with the Restoration of the Property.
          (a) If the Net Proceeds shall be less than the Restoration Threshold
Amount and the costs of completing the Restoration shall be less than the
Restoration Threshold Amount, the Net Proceeds will be disbursed to Borrower.
          (b) If the Net Proceeds are equal to or greater than the Restoration
Threshold Amount or the costs of completing the Restoration is equal to or
greater than the Restoration Threshold Amount Lender shall make the Net Proceeds
available for the Restoration in accordance with the provisions of this
Section 6.4. The term “Net Proceeds” for purposes of this Section 6.4 shall
mean: (i) the net amount of all insurance proceeds received by Lender pursuant
to Section 6.1(a)(i), (iv) and (vi) as a result of such Casualty, after
deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting same (“Insurance Proceeds”), or
(ii) the net amount of the Award as a result of Condemnation, after deduction of
its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever
the case may be.
     (i) The Net Proceeds shall be made available to Borrower for Restoration
provided that each of the following conditions are met:
     (A) no Event of Default shall have occurred and be continuing;
     (B) (1) in the event the Net Proceeds are Insurance Proceeds, less than
thirty-five percent (35%) of the total floor area of the Improvements on the
Property has been damaged, destroyed or rendered unusable as a result of such
fire or other casualty or (2) in the event the Net Proceeds are Condemnation
Proceeds, less than ten percent (10%) of the land constituting the Property is
taken, and such land is located along the perimeter or periphery of the
Property, and no portion of the Improvements is located on such land;
     (C) Borrower shall commence the Restoration as soon as reasonably
practicable and shall diligently pursue the same to satisfactory completion;
     (D) Lender shall be reasonably satisfied that any operating deficits,
including all scheduled payments of principal and interest under the Note, which
will be incurred with respect to the Property as a result of the occurrence of
any such fire or other casualty or taking, whichever the case may be, will be
covered

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out of the aggregate amount of (1) the Net Proceeds, (2) the insurance coverage
referred to in Section 6.1(a)(iii), if applicable, or (3) by other funds of
Borrower;
     (E) Lender shall be reasonably satisfied that the Restoration will be
completed on or before the earliest to occur of (1) the Maturity Date, or
(2) such time as may be required under applicable zoning law, ordinance, rule or
regulation if such failure would be reasonably likely to result in a Material
Adverse Effect;
     (F) the Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable zoning laws, ordinances,
rules and regulations;
     (G) the Restoration shall be done and completed by Borrower in a diligent
fashion and in compliance with all applicable governmental laws, rules and
regulations (including, without limitation, all applicable environmental laws);
and
     (H) such fire or other casualty or taking, as applicable, does not result
in the permanent loss of access to the Property or the related Improvements.
     (ii) Provided the Net Proceeds shall equal or exceed the Restoration
Threshold Amount, the Net Proceeds shall be held by Lender in an
interest-bearing account and, until disbursed in accordance with the provisions
of this Section 6.4(b), shall constitute additional security for the Debt and
other obligations under the Loan Documents. The Net Proceeds shall be disbursed
by Lender to, or as directed by, Borrower from time to time during the course of
the Restoration, upon receipt of evidence reasonably satisfactory to Lender that
(A) all materials installed and work and labor performed (except to the extent
that they are to be paid for out of the requested disbursement) in connection
with the applicable phase of the Restoration have been paid for in full, and
(B) there exist no notices of pendency, stop orders, mechanic’s or materialman’s
liens or notices of intention to file same, or any other liens or encumbrances
of any nature whatsoever on the Property arising out of the Restoration which
have not either been fully bonded to the satisfaction of Lender and discharged
of record or in the alternative fully insured to the satisfaction of Lender by
the title company issuing the Title Insurance Policy.
     (iii) With respect to any Restoration that equals or exceeds the
Restoration Threshold Amount, all plans and specifications required in
connection with the Restoration, except for those plans and specifications
substantially similar to those with which the Improvements on the Property have
been built, shall be subject to prior review for approval (which approval shall
not be unreasonably withheld) in all respects by Lender and by an independent
consulting engineer selected by Lender (the “Casualty Consultant”). Lender shall
have the use of the plans and specifications and all permits, licenses and
approvals required or obtained in connection with the Restoration. The identity
of the contractors, subcontractors and materialmen engaged in the Restoration
the cost of which is greater than $50,000 as well as the contracts under which
they have been

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engaged, shall be subject to prior review and acceptance by Lender (not
unreasonably withheld) and the Casualty Consultant. All reasonable costs and
expenses incurred by Lender in connection with making the Net Proceeds available
for the Restoration including, without limitation, reasonable counsel fees and
disbursements and the Casualty Consultant’s fees, shall be paid by Borrower.
     (iv) With respect to any Restoration that equals or exceeds the Restoration
Threshold Amount, in no event shall Lender be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually incurred
from time to time for work in place as part of the Restoration, as certified by
the Casualty Consultant, minus the Casualty Retainage. The term “Casualty
Retainage” shall mean an amount equal to (x) if 50% or less of the Restoration
has been completed, ten percent (10%) of the costs actually incurred for work in
place as part of the Restoration, as certified by the Casualty Consultant, or
(y) if more than 50% of the Restoration has been completed, five percent (5%) of
the costs actually incurred for work in place as part of the Restoration, as
certified by the Casualty Consultant, until the Restoration has been completed.
The Casualty Retainage shall in no event, and notwithstanding anything to the
contrary set forth above in this Section 6.4(b), be less than the amount
actually held back by Borrower from contractors, subcontractors and materialmen
engaged in the Restoration. The Casualty Retainage shall not be released until
the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 6.4(b) and that all
approvals necessary for the re-occupancy and use of the Property have been
obtained from all appropriate governmental and quasi-governmental authorities,
and Lender receives evidence reasonably satisfactory to Lender that the costs of
the Restoration have been paid in full or will be paid in full out of the
Casualty Retainage; provided, however, that Lender will release the portion of
the Casualty Retainage being held with respect to any contractor, subcontractor
or materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor’s, subcontractor’s or
materialman’s contract, the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the Title Insurance Policy, and Lender
receives an endorsement to the Title Insurance Policy insuring the continued
priority of the lien of the Mortgage and evidence of payment of any premium
payable for such endorsement. If required by Lender, the release of any such
portion of the Casualty Retainage shall be approved by the surety company, if
any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
     (v) Lender shall not be obligated to make disbursements of the Net Proceeds
more frequently than twice every calendar month.
     (vi) With respect to any Restoration that equals or exceeds the Restoration
Threshold Amount, if at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the reasonable opinion of Lender in consultation with the
Casualty Consultant, be sufficient to pay in full the balance of the costs which
are estimated by the

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Casualty Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the “Net Proceeds
Deficiency”) with Lender before any further disbursement of the Net Proceeds
shall be made. The Net Proceeds Deficiency deposited with Lender shall be held
by Lender and shall be disbursed for costs actually incurred in connection with
the Restoration on the same conditions applicable to the disbursement of the Net
Proceeds, and until so disbursed pursuant to this Section 6.4(b) shall
constitute additional security for the Debt and other obligations under the Loan
Documents.
     (vii) The excess, if any, of the Net Proceeds and the remaining balance, if
any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 6.4(b), and the receipt by Lender
of evidence reasonably satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall
be continuing under the Note, this Agreement or any of the other Loan Documents.
          (c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 6.4(b)(vii) may be retained and applied by Lender toward the payment
of the Debt whether or not then due and payable in such order, priority and
proportions as Lender in its sole discretion shall deem proper, or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate, in its discretion.
          (d) In the event of foreclosure of the Mortgage with respect to the
Property, or other transfer of title to the Property in extinguishment in whole
or in part of the Debt all right, title and interest of Borrower in and to the
Policies that are not blanket Policies then in force concerning the Property and
all proceeds payable thereunder shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other transfer of
title.
          VII. RESERVE FUNDS
          Section 7.1 Required Repairs.
          7.1.1 Deposit of Required Repair Funds. Borrower shall perform the
repairs at the Property as set forth on Schedule 1 hereto (such repairs
hereinafter referred to as “Required Repairs”) and shall complete each of the
Required Repairs on or before the date which is one (1) year after the date of
this Agreement. On the Closing Date, Borrower shall deposit with Agent $297,000
to perform the Required Repairs. Amounts deposited pursuant to this
Section 7.1.1 are referred to herein as the “Required Repair Funds.”
          7.1.2 Release of Required Repair Funds. Lender shall direct Agent to
disburse to Borrower the Required Repair Funds upon satisfaction by Borrower of
each of the following conditions: (a) Borrower shall submit a request for
payment to Lender at least ten (10) days prior to the date on which Borrower
requests such payment be made and specifies the

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Required Repairs to be paid, (b) on the date such request is received by Lender
and on the date such payment is to be made, no Event of Default shall exist and
remain uncured, and (c) Lender shall have received a certificate from Borrower
(i) stating that all Required Repairs to be funded by the requested disbursement
have been completed in a good and workmanlike manner and in accordance with all
applicable Legal Requirements, such certificate to be accompanied by a copy of
any license, permit or other approval by any Governmental Authority required in
connection with the Required Repairs and/or such other documentation as Lender
may reasonably request of lawful and workmanlike progress or completion,
(ii) identifying each Person that supplied materials or labor in connection with
the Required Repairs to be funded by the requested disbursement, and (iii)
stating that each such Person has been paid in full or will be paid in full upon
such disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment satisfactory to Lender. Lender shall not be required to
disburse Required Repair Funds more frequently than once each calendar month,
unless such requested disbursement is in an amount greater than $25,000 (or a
lesser amount if the total Required Repair Funds is less than $25,000, in which
case only one disbursement of the amount remaining in the account shall be
made).
          Section 7.2 Tax and Insurance Escrow Fund. (a) (i) Borrower shall
deposit with Lender on each Payment Date one-twelfth (1/12) of the Taxes that
will be payable during the next ensuing twelve (12) months in order to
accumulate sufficient funds to pay all such Taxes at least thirty (30) days
prior to their respective due dates, and (ii) on the first Payment Date in a
Cash Management Period and on each subsequent Payment Date during the
continuance of the Cash Management Period, Borrower shall, subject to the terms
of the Management Agreement, deposit with Lender one-twelfth (1/12) of the
Insurance Premiums that Lender reasonably estimates will be payable for the
renewal of the coverage afforded by the Policies upon the expiration thereof in
order to accumulate with Lender sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to the expiration of the Policies (said
amounts in (i) and (ii) above hereinafter called the “Tax and Insurance Escrow
Fund”). The Tax and Insurance Escrow Fund and the payments of interest or
principal or both, payable pursuant to the Note, shall be added together and
shall be paid as an aggregate sum by Borrower to Lender. Lender will apply the
Tax and Insurance Escrow Fund to payments of Taxes and Insurance Premiums
required to be made by Borrower pursuant to Section 5.1.2 hereof and under the
Mortgage. In making any payment relating to the Tax and Insurance Escrow Fund,
Lender may do so according to any bill, statement or estimate procured from the
appropriate public office (with respect to Taxes) or insurer or agent (with
respect to Insurance Premiums), without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If the amount of the Tax and
Insurance Escrow Fund shall exceed the amounts due for Taxes and Insurance
Premiums pursuant to Section 5.1.2 hereof, Lender shall, in its sole discretion,
return any excess to Borrower or credit such excess against future payments to
be made to the Tax and Insurance Escrow Fund. Any amount remaining in the Tax
and Insurance Escrow Fund after the Debt has been paid in full shall be returned
to Borrower. If, at any time with respect to Taxes, or, during the continuance
of a Cash Management Period with respect to Insurance Premiums, Lender
reasonably determines that the Tax and Insurance Escrow Fund is not or will not
be sufficient to pay Taxes and Insurance Premiums by the dates set forth in
(i) and (ii) above, Lender shall notify Borrower of such determination and
Borrower shall increase its monthly payments to Lender by the amount is
sufficient to make up the deficiency at least thirty (30) days prior to
delinquency of the Taxes

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and/or thirty (30) days prior to expiration of the Policies, as the case may be.
Upon the termination of a Cash Management Period, any amounts remaining in the
Tax and Insurance Escrow Fund which are allocable to the payment of Insurance
Premiums (but not with respect to amounts in the Tax and Insurance Escrow Fund
which are allocable to the payment of Taxes), shall be returned to Borrower. The
amounts in the Tax and Insurance Escrow Fund which are allocable to the payment
of Insurance Premiums shall be, at the time of determination, the lesser of
(x) the aggregate amount of the amount of each payment into the Tax and
Insurance Escrow Fund which has been allocated to the payment of Insurance
Premiums, or (y) the positive difference between (1) the total amount of funds
on deposit in the Tax and Insurance Escrow Fund and (2) the amount Lender
estimates will be sufficient to pay the Taxes at least thirty (30) days prior to
their respective due dates, less the amount of any anticipated future monthly
payments into the Tax and Insurance Escrow prior to the payment of such Taxes
which would be allocated to the payment of Taxes (as opposed to being allocated
to the payment of Insurance Premiums).
          (b) Notwithstanding the foregoing Section 7.2(a), Borrower shall not
be required to make deposits described in Subsection 7.2(a)(ii) above, provided
Borrower delivers, throughout the term of the Loan, evidence reasonably
satisfactory to Lender that all Insurance Premiums required to be made by
Borrower pursuant to Section 5.1.2 hereof have been paid under Sponsor’s blanket
insurance policy covering the Property.
          Section 7.3 Intentionally Deleted.
          Section 7.4 FF&E Reserve Account.
          7.4.1 Deposits to the FF&E Reserve Account. Subject to the terms of
the Management Agreement, Borrower shall, on each Payment Date, deposit with
Lender an amount equal to one-twelfth (1/12) of the amount, if any, by which
Required FF&E Amount exceeds the amount retained by Manager in the Replacement
Reserve Account pursuant to Section 8.4 of the Management Agreement (the “FF&E
Reserve Monthly Deposit”) to fund the FF&E Expenditures. Amounts so deposited
shall hereinafter be referred to as Borrower’s “FF&E Reserve Fund” and the
account in which such amounts are held shall hereinafter be referred to as
Borrower’s “FF&E Reserve Account”. Notwithstanding the foregoing, Borrower shall
not be obligated to make the FF&E Reserve Monthly Deposit required to be made
hereunder unless and until the occurrence, and during the continuance of, a Cash
Management Period, provided (i) that Borrower submits to Lender, on a quarterly
basis, a certificate setting forth the type and cost of FF&E Replacements that
were made at the Property during the immediately preceding calendar quarter and
(ii) that Borrower, on a semi-annual basis delivers to Lender receipts for
payment or other documentary evidence reasonably satisfactory to Lender (x) that
Borrower has spent at least the Required FF&E Amount for the FF&E Replacements
at the Property during the immediately preceding calendar year or (y) that
Borrower has deposited into the FF&E Reserve Account the amount equal to the
difference between the Required FF&E Amount and the amount spent for the FF&E
Replacements at the Property during the immediately preceding calendar year.

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          7.4.2 Disbursements from the FF&E Reserve Account. (a) Lender shall
make disbursements from the FF&E Reserve Account to pay Borrower only for the
FF&E Expenditures.
          (b) Lender shall, upon written request from Borrower and satisfaction
of the requirements set forth in this Section 7.4.2, disburse to Borrower
amounts from the FF&E Reserve Account to pay for the costs of FF&E Replacements
or to reimburse Borrower therefor, upon completion of such FF&E Replacements
(or, upon partial completion in the case of FF&E Replacements performed pursuant
to Section 7.4.2(e) hereof) as reasonably determined by Lender. In no event
shall Lender be obligated to disburse funds from the FF&E Reserve Account if a
Default or an Event of Default exists.
          (c) Each request for disbursement from the FF&E Reserve Account shall
be in a form specified or reasonably approved by Lender and shall specify
(i) the specific FF&E Replacements for which the disbursement is requested,
(ii) the quantity and price of each item purchased, if the FF&E Replacements
includes the purchase or replacement of specific items, (iii) the price of all
materials (grouped by type or category) used in any FF&E Replacements other than
the purchase or replacement of specific items, and (iv) the cost of all
contracted labor or other services applicable to such FF&E Replacements for
which such request for disbursement is made. With each request Borrower shall
certify that all FF&E Replacements has been performed in accordance with all
applicable Legal Requirements of any applicable Governmental Authority having
jurisdiction over the Property. Each request for disbursement shall include
copies of invoices for all items or materials purchased and all contracted labor
or services provided. Except as provided in Section 7.4.2(e) hereof, each
request for disbursement from the FF&E Reserve Account shall be made only after
substantial completion of the FF&E Replacements for which disbursement is
requested. Borrower shall provide Lender evidence of substantial completion of
the subject FF&E Replacements satisfactory to Lender in its reasonable judgment.
          (d) As a condition to any disbursement, Lender may reasonably require
Borrower to obtain lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount equal to or greater
than $50,000 for completion of its work or delivery of its materials. Any lien
waiver delivered hereunder shall conform to the requirements of applicable law
and shall cover all work performed and materials supplied (including equipment
and fixtures) for the Property by that contractor, supplier, subcontractor,
mechanic or materialman through the date covered by the current reimbursement
request (the release of lien shall be effective through the date covered by the
previous release of funds request).
          (e) If (i) the cost of any FF&E Replacements exceeds $50,000, (ii) the
contractor performing such FF&E Replacements requires periodic payments pursuant
to terms of a written contract, and (iii) Lender has approved in writing in
advance such periodic payments in its reasonable judgment, a request for
reimbursement from the FF&E Reserve Account may be made after completion of a
portion of the work under such contract, provided (A) such contract requires
payment upon completion of such portion of the FF&E Replacements, (B) the
materials for which the request is made are on site at the Property and are
properly secured or have been installed in the Property, (C) all other
conditions in this Agreement for disbursement have been

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satisfied, (D) funds remaining in the FF&E Reserve Account are, in Lender’s
reasonable judgment, sufficient to complete such FF&E Replacements and other
FF&E Replacements when required, and (E) if required by Lender, each contractor
or subcontractor receiving payments under such contract shall provide a waiver
of lien with respect to amounts which have been previously paid to that
contractor or subcontractor.
          (f) Borrower shall not make a request for disbursement from the FF&E
Reserve Account more frequently than twice in any calendar month and (except in
connection with the final disbursement) the total cost of all FF&E Replacements
in any request shall not be less than $50,000.
          7.4.3 Performance of FF&E Replacements. (a) Borrower shall perform or
cause to be performed FF&E Replacements as necessary to keep the Property in
condition and repair consistent with other hotels with the same class of service
in the same market segment in the metropolitan area in which the Property is
located, and to keep the Property or any portion thereof from deteriorating.
Borrower shall complete or cause to be completed all FF&E Replacements in a good
and workmanlike manner as soon as practicable following the commencement of
performing such FF&E Replacements.
          (b) Following the occurrence of and during the continuation of an
Event of Default, Borrower grants Lender the right to enter onto the Property
and perform any and all work and labor necessary to complete or perform such
FF&E Replacements and/or employ watchmen to protect the Property from damage.
All sums so expended by Lender, to the extent not from the FF&E Reserve Fund,
shall be deemed to have been advanced under the Loan to Borrower and secured by
the Mortgage. For this purpose, Borrower constitutes and appoints Lender its
true and lawful attorney-in-fact with full power of substitution to complete or
undertake such FF&E Replacements in the name of Borrower. Such power of attorney
shall be deemed to be a power coupled with an interest and cannot be revoked.
Borrower empowers said attorney-in-fact as follows: (i) to use any funds in the
FF&E Reserve Account for the purpose of performing or completing such FF&E
Replacements; (ii) to make such additions, changes and corrections to such FF&E
Replacements as shall be necessary or desirable to complete such FF&E
Replacements; (iii) to employ such contractors, subcontractors, agents,
architects and inspectors as shall be required for such purposes; (iv) to pay,
settle or compromise all existing bills and claims which are or may become Liens
against the Property, or as may be necessary or desirable for the completion of
such FF&E Replacements, or for clearance of title; (v) to execute all
applications and certificates in the name of Borrower which may be required by
any of the contract documents; (vi) to prosecute and defend all actions or
proceedings in connection with the Property or the rehabilitation and repair of
the Property; and (vii) to do any and every act which Borrower might do in its
own behalf to fulfill the terms of this Agreement.
          (c) Nothing in this Section 7.4.3 shall: (i) make Lender responsible
for performing or completing any FF&E Replacements; (ii) require Lender to
expend funds in addition to the FF&E Reserve Fund to perform or complete any
FF&E Replacements; (iii) obligate Lender to proceed with any FF&E Replacements;
or (iv) obligate Lender to demand from Borrower additional sums to perform or
complete any FF&E Replacements.

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          (d) Borrower shall permit Lender and Lender’s agents and
representatives (including, without limitation, Lender’s engineer, architect, or
inspector) or authorized third parties performing FF&E Replacements pursuant to
this Section 7.4.3 to enter onto the Property during normal business hours
(subject to the rights of tenants under their Leases) and upon reasonable prior
notice to inspect the progress of any FF&E Replacements and all materials being
used in connection therewith, to examine all plans and shop drawings relating to
such FF&E Replacements which are or may be kept at the Property, and to complete
any FF&E Replacements made pursuant to this Section 7.4.3. Borrower shall cause
all contractors and subcontractors to cooperate with Lender or Lender’s
representatives or such other Persons described above in connection with
inspections described in this Section 7.4.3(d) or the completion of FF&E
Replacements pursuant to this Section 7.4.3.
          (e) If a disbursement will exceed $100,000, Lender may require an
inspection of the Property at Borrower’s expense prior to making a disbursement
from the FF&E Reserve Account in order to verify completion of the FF&E
Replacements for which reimbursement is sought. Lender may require that such
inspection be conducted by an appropriate independent qualified professional
selected by Lender and/or may require a copy of a certificate of completion by
an independent qualified professional acceptable to Lender prior to the
disbursement of any amounts from the FF&E Reserve Account. Borrower shall pay
the reasonable expense of the inspection as required hereunder, whether such
inspection is conducted by Lender or by an independent qualified professional.
          (f) The FF&E Replacements and all materials, equipment, fixtures, or
any other item comprising a part of any FF&E Replacements shall be constructed,
installed or completed, as applicable, free and clear of all mechanic’s,
materialmen’s or other liens (except for the Permitted Encumbrances, the Liens
which are being contested in good faith and with due diligence as required by
the terms hereof and those Liens existing on the date of this Agreement which
have been approved in writing by Lender).
          (g) Provided such disbursement will exceed $100,000, before each
disbursement from the FF&E Reserve Account, Lender may require Borrower to
provide Lender with a search of title to the applicable Individual Property
effective to the date of the disbursement, which search shows that no mechanic’s
or materialmen’s liens or other liens of any nature have been placed against the
Property since the date of recordation of the related Individual Mortgage and
that title to the Property is free and clear of all Liens (other than the lien
of the Mortgage, the Permitted Encumbrances, the Liens which are being contested
in good faith and with due diligence as required by the terms hereof and any
other Liens previously approved in writing by Lender, if any).
          (h) All FF&E Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
Property and applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations, and
requirements of insurance underwriters.
          (i) In addition to any insurance required under the Loan Documents,
Borrower shall provide or cause to be provided workers’ compensation insurance,
builder’s risk, and public liability insurance and other insurance to the extent
required under applicable law in

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connection with any FF&E Replacements. All such policies shall be in form and
amount reasonably satisfactory to Lender. All such policies which can be
endorsed with standard mortgagee clauses making loss payable to Lender or its
assigns shall be so endorsed.
          7.4.4 Failure to Perform FF&E Replacements. (a) It shall be an Event
of Default under this Agreement if Borrower fails to comply with any provision
of this Section 7.4 and such failure is not cured within ninety (90) days after
notice from Lender, provided Borrower shall be provided additional time as is
reasonably necessary to cure so long as (x) Borrower shall have commenced the
cure and have diligently pursued the cure to completion or (y) the delay is
caused by an event of force majeure. Upon the occurrence and during the
continuance of such an Event of Default, Lender may use the FF&E Reserve Fund
(or any portion thereof) for any purpose, including but not limited to
completion of the FF&E Replacements as provided in Section 7.4.3, or for any
other repair or replacement to Property or toward payment of the Debt in such
order, proportion and priority as Lender may determine in its sole discretion.
Lender’s right to withdraw and apply the FF&E Reserve Funds shall be in addition
to all other rights and remedies provided to Lender under this Agreement and the
other Loan Documents.
          (b) Nothing in this Agreement shall obligate Lender to apply all or
any portion of the FF&E Reserve Fund on account of an Event of Default to
payment of the Debt or in any specific order or priority.
          7.4.5 Balance in the FF&E Reserve Account. The insufficiency of any
balance in the FF&E Reserve Account shall not relieve Borrower from its
obligation to fulfill all preservation and maintenance covenants in the Loan
Documents. Upon the termination of a Cash Management Period, provided no Event
of Default shall have occurred and be continuing and the requirements set forth
in subsections 7.4.1(i) and (ii) are satisfied, any amounts remaining in the
FF&E Reserve Fund shall be returned to Borrower.
          Section 7.5 Intentionally Deleted.
          Section 7.6 Reserve Funds, Generally. (a) Borrower grants to Lender a
first-priority perfected security interest in each of the Reserve Funds and any
and all monies now or hereafter deposited in each Reserve Fund as additional
security for payment of the Debt. Until expended or applied in accordance
herewith, the Reserve Funds shall constitute additional security for the Debt.
          (b) Upon the occurrence of (i) an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender, apply any
sums then present in any or all of the Reserve Funds to the payment of the Debt
in any order in its sole discretion.
          (c) The Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Lender.
          (d) The Reserve Funds shall be held in interest bearing accounts and
all earnings or interest on a Reserve Fund shall be added to and become a part
of such Reserve Fund and shall be disbursed in the same manner as other monies
deposited in such Reserve Fund.

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          (e) Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in any Reserve
Fund or the monies deposited therein or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC Financing Statements, except
those naming Lender as the secured party, to be filed with respect thereto.
          (f) Notwithstanding anything to the contrary contained herein, any
amounts remaining in the Reserve Funds after the Debt has been paid in full
shall be paid to Borrower.
          Section 7.7 Intentionally Deleted.
          VIII. DEFAULTS
          Section 8.1 Event of Default. (a) Each of the following events shall
constitute an event of default hereunder (an “Event of Default”):
     (i) if (x) any payment of principal or interest due pursuant to the Note,
this Agreement or any of the other Loan Documents (other than the payment due on
the Maturity Date) is not paid on or within one (1) Business Day after the date
the same is due, (y) the Debt is not paid on the Maturity Date, or (z) any other
portion of the Debt is not paid on or within five (5) Business Days after the
same is due;
     (ii) if any of the Taxes or Other Charges are not paid within five
(5) Business Days after the date the same is due, subject to the Borrower’s
right to contest pursuant to Section 5.1.2 hereof;
     (iii) if the Policies are not kept in full force and effect, or if
certificates evidencing such Policies are not delivered to Lender within two
(2) Business Days following Lender’s written request therefor;
     (iv) if Borrower Transfers or encumbers any portion of the Property without
Lender’s prior written consent in violation of the provisions of Article 6 of
the Mortgage;
     (v) if any representation or warranty of Borrower, Hotel Operator or of any
Guarantor, made herein, in the Guaranty or in any other Loan Document, or in any
certificate, report, financial statement or other instrument or document
furnished to Lender shall have been false or misleading in any material respect
when made and such representation or warranty, if made by Borrower after the
date hereof, shall, if the condition that gave rise to the breach of
representation or warranty is capable of being cured, remain untrue or incorrect
for a period ending thirty (30) days after Borrower has received written notice
of the inaccuracy of such representation or warranty from Lender, provided,
however, if the breach of representation or warranty is of a nature which is
curable but which cannot be cured within such thirty (30) day period such
failure shall not be an Event of Default if Borrower, within such thirty
(30) day period, shall have commenced to cure the condition that give rise to
the breach of representation or warranty and thereafter diligently pursues such
cure, in which event Borrower shall have

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such additional time as is reasonably required to effect such cure, but in no
event more than one hundred twenty (120) days after the discovery of such
inaccuracy;
     (vi) if Borrower, Hotel Operator or Guarantor shall make an assignment for
the benefit of creditors;
     (vii) if a receiver, liquidator or trustee shall be appointed for Borrower,
Hotel Operator or Guarantor or if Borrower, Hotel Operator or Guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Borrower, Hotel Operator or Guarantor, or if any proceeding for the
dissolution or liquidation of Borrower, Hotel Operator or Guarantor shall be
instituted; provided, however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower, Hotel Operator or
Guarantor, upon the same not being discharged, stayed or dismissed within ninety
(90) days;
     (viii) a default by Guarantor under any of the Guaranties that remains
uncured for a period of ten (10) Business Days after notice to all Guarantors,
it being understood that any Guarantor may (but is not obligated to) cure the
defaulting Guarantor’s default;
     (ix) if Borrower attempts to assign its rights under this Agreement or any
of the other Loan Documents or any interest herein or therein in contravention
of the Loan Documents;
     (x) if Borrower breaches any of its respective negative covenants contained
in Section 5.2 (other than Section 5.2.11) or any covenant contained in
Section 4.1.30 hereof;
     (xi) with respect to any term, covenant or provision set forth herein which
specifically contains a notice requirement or grace period, if Borrower shall be
in default under such term, covenant or condition after the giving of such
notice or the expiration of such grace period;
     (xii) if any of the assumptions contained in the Insolvency Opinion or in
any other “non-consolidation” opinion delivered to Lender pursuant to this
Agreement is or shall become untrue in any material respect;
     (xiii) if Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement not specified in subsections
(i) to (xii) above, for ten (10) days after notice to Borrower from Lender, in
the case of any Default which can be cured by the payment of a sum of money, or
for thirty (30) days after notice from Lender in the case of any other Default;
provided however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such thirty (30) day period and provided
further that Borrower shall have commenced to cure such Default within such
thirty (30) day period and thereafter diligently and expeditiously proceeds to
cure the same, such thirty (30) day period shall be extended for such time as is
reasonably

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necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed one hundred and twenty (120) days; or
     (xiv) if there shall be a default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents, and if no cure
period is specified in the particular default, Section 8.1(a)(xiii) hereof shall
apply.
          (b) Upon the occurrence and during the continuance of an Event of
Default (other than an Event of Default described in clauses (vi) or
(vii) above) and at any time thereafter, in addition to any other rights or
remedies available to it pursuant to this Agreement and the other Loan Documents
or at law or in equity, Lender may take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in and to all of the Property, including, without limitation, declaring the
Debt to be immediately due and payable, and Lender may enforce or avail itself
of any or all rights or remedies provided in the Loan Documents against Borrower
and any and all of the Property, including, without limitation, all rights or
remedies available at law or in equity; and upon any Event of Default described
in clauses (vi) or (vii) above, the Debt and all other obligations of Borrower
hereunder and under the other Loan Documents shall immediately and automatically
become due and payable, without notice or demand, and Borrower hereby expressly
waives any such notice or demand, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
          Section 8.2 Remedies. (a) Upon the occurrence and during the
continuance of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Lender against Borrower under
this Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to all of 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 is not subject to any “one action” or “election of remedies” law or
rule, and (ii) all liens and other rights, remedies or privileges provided to
Lender shall remain in full force and effect until Lender has exhausted all of
its remedies against the Property and the Mortgage has been foreclosed, sold
and/or otherwise realized upon in satisfaction of the Debt or the Debt has been
paid in full.
          (b) With respect to Borrower and the Property, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to the Property for the satisfaction of any of the Debt in preference or
priority to the Property, and Lender may seek satisfaction out of all of the
Property or any part thereof, in its absolute discretion in respect of the Debt.
In addition, during the continuance of an Event of Default, Lender shall have
the right from time to time to partially foreclose the Mortgage in any manner
and for any amounts secured

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by the Mortgage then due and payable as determined by Lender in its sole
discretion including, without limitation, the following circumstances: (i) in
the event Borrower defaults beyond any applicable grace period in the payment of
one or more scheduled payments of principal and interest, Lender may foreclose
the Mortgage 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 the Mortgage to recover so much of the principal
balance of the Loan as Lender may accelerate and such other sums secured by the
Mortgage as Lender may elect. Notwithstanding one or more partial foreclosures,
the Property shall remain subject to the Mortgage to secure payment of sums
secured by the Mortgage and not previously recovered.
          (c) Upon the request of Lender (or its nominees and successors and
assigns) in connection with a foreclosure, deed in lieu of foreclosure of other
acquisition of the Property or any part thereof resulting from an Event of
Default, Borrower shall, and shall cause the Hotel Operator and Manager to,
cooperate with Lender (and its nominees and successors and assigns) in (i) the
transfer to Lender (or such nominee, successor or assign) of any licenses and
permits (including without limitation liquor licenses) necessary or appropriate
for the operation of the Property; (ii) the obtaining by Lender (or such
nominee, successor or assign) of any licenses and permits (including without
limitation liquor licenses) necessary or appropriate for the operation of the
Property; and (iii) the continuation by Borrower, Hotel Operator and Manager, as
applicable, of any existing licenses and permits (including without limitation
liquor licenses) and/or arrangements for liquor sales and service to be
conducted by third party venders, under catering licenses or otherwise, until
new licenses and permits are obtained.
          (d) Lender shall have the right from time to time to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the “Severed Loan Documents”) in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall reasonably request
in order to effect the severance described in the preceding sentence, all in
form and substance reasonably satisfactory to Lender. Borrower hereby absolutely
and irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any such documents under such power until five (5) Business Days
after notice has been given to Borrower by Lender of Lender’s intent to exercise
its rights under such power. Except as may be required in connection with a
securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents,
(ii) the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date, and (iii) the Severed Loan
Documents shall not increase Borrower’s obligations or decrease its rights
hereunder.
          Section 8.3 Remedies Cumulative; Waivers. The rights, powers and
remedies of Lender under this Agreement shall be cumulative and not exclusive of
any other right, power or remedy which Lender may have against Borrower pursuant
to this Agreement or

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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 may be deemed expedient. A waiver of
one Default or Event of Default with respect to Borrower shall not be construed
to be a waiver of any subsequent Default or Event of Default by Borrower or to
impair any remedy, right or power consequent thereon.
          IX. SPECIAL PROVISIONS
          Section 9.1 Sale of Notes and Securitization.
          9.1.1 Cooperation. At the request of the holder of the Note and, to
the extent not already required to be provided by Borrower under this Agreement,
Borrower shall use reasonable efforts (at the sole cost and expense of Lender,
including reimbursement of all out-of-pocket third party fees and reasonable
expenses of Borrower) to satisfy the market standards to which the holder of the
Note customarily adheres or which may be reasonably required in the marketplace
or by the Rating Agencies in connection with the sale of the Note or
participations therein or the first successful 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 and
the Mortgage, including, without limitation, to:
          (a) (i) provide such available or otherwise required under the Loan
Documents financial and other information with respect to the Property, Borrower
and the Manager, (ii) provide available or otherwise required under the Loan
Documents budgets relating to the Property and (iii) to perform or permit or
cause to be performed or permitted such site inspection, and furnish appraisals,
market studies, environmental reviews and reports, and engineering reports of
the Property, as may be reasonably requested by the holder of the Note or the
Rating Agencies or as may be necessary or appropriate in connection with the
Securitization (the “Provided Information”), it being understood and agreed by
Borrower and Lender, however, that any such information regarding Guarantor
shall remain confidential;
          (b) execute such amendments to the Loan Documents and organizational
documents as may be reasonably requested by the holder of the Note or the Rating
Agencies or otherwise to comply with Rating Agency Requirements to effect the
Securitization; provided, however, that Borrower shall not be required to modify
or amend any Loan Document if such modification or amendment would (i) change
the interest rate, the stated maturity or the amortization of principal set
forth in the Note, (ii) modify or amend any other material economic term of the
Loan, or (iii) increase Borrower’s obligations under this Agreement or the other
Loan Documents or decrease Borrower’s rights under this Agreement or the other
Loan Documents; and provided further that the aggregate amount of the substitute
notes shall (i) be no more than the then unpaid principal amount secured by the
Mortgage, and (ii) contain terms, provisions and clauses (x) no less favorable
to Borrower than those contained herein and in the Note, and (y) which do not
increase Borrower’s obligations hereunder or decrease Borrower’s rights under
the Loan Documents. If Lender redefines the interest rate, the amount of
interest payable under

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the severed notes, in the aggregate, shall at all times equal the amount of
interest which would have been payable under the Note at the Regular Interest
Rate.
          In cooperating with Lender’s requests for information and
documentation required by Lender to complete any Securitization as set forth in
this Agreement, neither Borrower nor any Guarantor shall: (1) incur any
additional liability, (2) suffer any increased obligation or (3) diminish any of
their respective rights under this Agreement of any other Loan Document.
          9.1.2 Loan Components. Borrower covenants and agrees that in
connection with any Securitization of the Loan, upon Lender’s request Borrower
shall deliver one or more new component notes to replace the original note or
modify the original note to reflect multiple components of the Loan and modify
the Cash Management Agreement in order to evidence the creation of the newly
created components (and for no other purpose) such that the pricing and
marketability of the Securities and the size of each class of Securities and the
rating assigned to each such class by the Rating Agencies shall provide the most
favorable rating levels and achieve the optimum bond execution for the Loan,
provided, however, the monthly Debt Service Payment Amount shall not change, and
substitute notes shall aggregate not more than the then unpaid principal amount
secured by the Mortgage, and contain terms, provisions and clauses (x) no less
favorable to Borrower than those contained herein and in the Note, and (y) which
do not increase Borrower’s obligations hereunder or decrease Borrower’s rights
under the Loan Documents. If Lender redefines the interest rate, the amount of
interest payable under the severed notes taken, in the aggregate, shall at all
times equal the amount of interest which would have been payable under the Note
at the Regular Interest Rate.
          9.1.3 Securitization Costs. All costs and expenses incurred by Lender
in connection with the Securitization and all reasonable out-of-pocket costs and
expenses incurred by Borrower in connection with Borrower’s complying with
requests made under this Section 9.1 (including reasonable legal fees of
Borrower’s counsel) shall be paid by Lender provided, however, that the
foregoing shall not require Lender to pay or reimburse Borrower for any costs
and expenses that Borrower would otherwise be required to pay or reimburse
Lender for under any other provision of this Agreement in the event that no
Securitization had occurred.
          9.1.4 Conversion of Loan and Creation of Subordinate Debt. Lender
shall have the right, at Lender’s sole cost and expense, at any time prior to
the final Securitization of the Loan to convert a portion thereof into
subordinate financing, including, but not limited to, mezzanine debt,
subordinate debt or participations in the Loan (collectively, the “Subordinate
Loan”), provided that (i) the aggregate principal amount of the Loan and the
Subordinate Loan on the date of such adjustment shall equal the aggregate
outstanding principal balance of the Loan immediately prior to such adjustment,
(ii) the Loan and the Subordinate Loan shall have a weighted average interest
rate equal to the Regular Interest Rate immediately prior to such adjustment,
and (iii) the other terms and provisions of the Loan and the Subordinate Loan
shall substantially remain unchanged, except for changes which are customary
with respect to Subordinate Loan financing. Borrower shall cooperate with all
reasonable requests of Lender in connection with any such adjustment of the Loan
and shall execute and deliver such documents as shall reasonably be required by
Lender in connection therewith. All costs and expenses incurred by Lender in
connection with this Section 9.1.4 and all reasonable out-of-pocket costs

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and expenses incurred by Borrower in connection with Borrower’s complying with
requests made under this Section 9.1.4 (including Borrower’s out-of-pocket legal
expenses) shall be paid by Lender; provided, however, that the foregoing shall
not require Lender to pay or reimburse Borrower for any costs and expenses that
Borrower would otherwise be required to pay or reimburse Lender under any other
provision of this Agreement in the event that no Securitization or Subordinate
Loan had occurred, provided that such documents (including the documents
evidencing the Subordinate Loan) shall contain terms, provisions and clauses
(x) no less favorable to Borrower than those contained herein and in the Note,
and (y) which do not increase Borrower’s obligations hereunder or decrease
Borrower’s rights under the Loan Documents. If Lender redefines the interest
rate, the amount of interest payable under the severed notes, in the aggregate,
shall at all times equal the amount of interest which would have been payable
under the Note at the Regular Interest Rate.
          Section 9.2 Securitization Indemnification. (a) Borrower understands
that certain of the Provided Information may be included in disclosure documents
in connection with the Securitization, including, without limitation, a
prospectus, prospectus supplement or private placement memorandum (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, Borrower will reasonably
cooperate with the holder of the Note in updating the Disclosure Document by
providing all current available information or otherwise required under the Loan
Documents necessary to keep the Disclosure Document accurate and complete in all
material respects.
          (b) Upon Lender’s request, Borrower agrees to provide in connection
with each of (i) a preliminary and a final private placement memorandum or
(ii) a preliminary and final prospectus or prospectus supplement, as applicable,
an indemnification certificate (A) certifying that Borrower has carefully
examined such memorandum or prospectus, as applicable, specifically pertaining
to Borrower, the Property and/or the Loan, and that such portions do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, (B) indemnifying, with
respect to the final private placement memorandum or final prospectus (or the
final private placement memorandum or final prospectus as supplemented), as
applicable, Lender (and for purposes of this Section 9.2, Lender hereunder shall
include its officers and directors), the Affiliate of Greenwich Capital Markets,
Inc. (“Greenwich”) that has filed the registration statement relating to the
Securitization (the “Registration Statement”), each of its directors, each of
its officers who have signed the Registration Statement and each Person or
entity who controls the Affiliate within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the “Greenwich
Group”), and Greenwich, each of its directors and each Person who controls
Greenwich within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act (collectively, the “Underwriter Group”) for any losses,
claims, damages or liabilities but excluding any lost profits, diminution in
value and consequential damages (collectively, the “Liabilities”) to which
Lender, the Greenwich Group or the Underwriter Group

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may become subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the portions of the disclosure document specifically pertaining to Borrower, the
Property and/or the Loan (provided such portions have been reviewed and approved
by Borrower) or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated in such sections
(provided Borrower has examined and approved such portions) or necessary in
order to make the statements in such sections or in light of the circumstances
under which they were made, not misleading and (C) agreeing to reimburse Lender,
the Greenwich Group and the Underwriter Group for any reasonable legal or other
expenses reasonably incurred by Lender and Greenwich in connection with
investigating or defending the Liabilities; provided, however, that Borrower
will be liable only to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or omission made
therein in reliance upon and in conformity with information furnished to Lender
by or on behalf of Borrower in connection with the preparation of the memorandum
or prospectus or in connection with the underwriting of the debt, including,
without limitation, financial statements of Borrower, operating statements, rent
rolls, environmental site assessment reports and property condition reports with
respect to the Property (except that (x) Borrower’s obligations to indemnify in
respect of any information contained in a preliminary or final private placement
memorandum or a preliminary or final prospectus that is derived in part from
information provided by Borrower and in part from information provided by
others, Borrower’s indemnification shall be limited to any untrue statement or
alleged untrue statement therein or omission therefrom that results from
information provided by Borrower which Borrower has been given an opportunity to
examine and approve, and (y) Borrower shall have no responsibility for the
failure of Lender (or its agents) to accurately transcribe written information
supplied by Borrower). This indemnity agreement will be in addition to any
liability which Borrower may otherwise have. Moreover, the indemnification
provided for in clauses (B) and (C) above shall be effective whether or not an
indemnification certificate described in (A) above is provided and shall be
applicable based on information previously provided by Borrower or its
Affiliates if Borrower does not provide the indemnification certificate. It is
agreed that Lender shall specify the information in the aforementioned
memorandum or prospectus covered by such certificate. In addition, it is agreed
that such certificate may state that it expresses no conclusion, with respect to
a prospectus required to be filed with the U.S. Securities and Exchange
Commission (“SEC”), as to the necessity of including information in such
prospectus or the proper presentation of any information included therein to
comply with the technical requirements imposed by regulation or SEC staff
interpretations under the Securities Act relating to the information required to
be included by the form of the registration statement to be filed.
Notwithstanding anything to the contrary in this Section 9.2, the indemnity,
reimbursement and contribution obligations set forth in this Section 9.2 with
respect to any preliminary private placement memorandum or preliminary
prospectus shall not inure to the benefit of Lender, the Greenwich Group or the
Underwriter Group (the “Indemnified Member”) if the Person asserting any such
loss, claim, damage or liability purchased any of the Securities which are the
subject thereof and did not receive a copy of the final private placement
memorandum or final prospectus (or the final private placement memorandum or
final prospectus as supplemented) at or prior to the confirmation of the sale of
such Securities to such person in any case where such delivery is required and
the untrue statement or omission of a material fact contained in such
preliminary private placement memorandum or preliminary prospectus was corrected
in the final private

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placement memorandum or final prospectus (or the final private placement
memorandum or final prospectus as supplemented).
          (c) In connection with filings under the Exchange Act, Borrower agrees
to indemnify (i) Lender, the Greenwich Group and the Underwriter Group for
Liabilities to which Lender, the Greenwich Group or the Underwriter Group may
become subject insofar as the Liabilities arise out of or are based upon the
omission or alleged omission to state in the Provided Information (which is used
in such filing and which Borrower has had an opportunity to examine and approve)
a material fact required to be stated in order to make the statements in the
Provided Information, in light of the circumstances under which they were made
not misleading and (ii) reimburse Lender, the Greenwich Group or the Underwriter
Group for any legal or other expenses reasonably incurred by Lender, the
Greenwich Group or the Underwriter Group in connection with defending or
investigating the Liabilities only in the event that it shall be determined that
there was such an omission.
          (d) Promptly after receipt by an indemnified party under this
Section 9.2 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9.2, 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 hereunder 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 and shall have the right to negotiate and
enter into and/or consent to any settlement, subject to the prior approval of
Lender and, if different, the Indemnified Member, which approval shall not be
unreasonably withheld provided that such approval is not required in connection
with any settlement which includes any unconditional release of all Indemnified
Members involved in such action and all related actions for all liability for
which such parties are seeking indemnification and there is no admission of
wrongdoing on the part of any Indemnified Member. After notice from the
indemnifying party to such indemnified party under this Section 9.2 the
indemnifying party shall not be responsible for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the 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 to
parties. The indemnifying party shall not be liable for the expenses of more
than one such separate counsel unless an indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to another indemnified party. If Borrower
has assumed the defense of any action brought against any Indemnified Member,
then such Indemnified Member shall not settle such action without the

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consent of Borrower, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, the indemnifying party shall not be responsible
for defending any action in which a final determination is made concluding that
there was such an omission.
          (e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in Section 9.2(b)
or (c) is or are for any reason held to be unenforceable by an indemnified party
in respect of any losses, claims, damages or liabilities (or action in respect
thereof) referred to therein which would otherwise be indemnifiable under
Section 9.2(b) or (c) the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such losses, claims, damages
or liabilities (or action in respect thereof); provided, however, that no Person
guilty of fraudulent misrepresentation (within the meaning of Section 1l(f) of
the Securities Act) shall be entitled to contribution 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) Greenwich’s and Borrower’s relative knowledge and
access to information concerning the matter with respect to which claim was
asserted; (ii) the opportunity to correct and prevent any statement or omission;
and (iii) any other equitable considerations appropriate in the circumstances.
Lender and Borrower hereby agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation.
          (f) The liabilities and obligations of both Borrower and Lender under
this Section 9.2 shall survive the termination of this Agreement and the
satisfaction and discharge of the Debt.
          Section 9.3 Lender ERISA Representations and Covenants.
          (a) As of the date hereof and for so long as Lender is holder of all
or part of the Loan (i) Lender is not an “employee benefit plan,” as defined in
Section 3(3) of ERISA, subject to Title I of ERISA, or a plan described in
Section 4975(e)(l) of the Code, subject to Section 4975 of the Code, (ii) none
of the assets of Lender constitutes “plan assets” of one or more such plans
within the meaning of 29 C.F.R. Section 2510.3-101, (iii) Lender is not a
“governmental plan” within the meaning of Section 3(32) of ERISA, and
(iv) Lender is not in violation of any state statute 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 (“Applicable State Law”), which prohibit or otherwise restrict the
transactions contemplated by this Agreement.
          (b) With respect to transfers of an interest in the Loan by Lender to
a third party (a “Purchaser”), Lender shall:
     (i) obtain from such Purchaser a covenant essentially the same as this
covenant Section 9.3(b) and either (A) a representation essentially the same as
the covenant set forth in Section 9.3(a) above (but substituting the term
“Purchaser” for the term “Lender” therein) or (B) a representation providing
reasonable assurance that the transfer of the interest in the Loan and the
holding by Purchaser of such interest for so long as Purchaser holds such
interest are exempt from or otherwise not prohibited under Section 406 of ERISA,
Section 4975 of the Code and Applicable State Law; or

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     (ii) transfer such interest through the sale of the Loan to a trust or
other entity which would issue securities (A) structured in such manner as
Lender reasonably believes to be covered under an administrative or other
exemption from Section 406 of ERISA, Section 4975 of the Code and Applicable
State Law which, if the securities are “equity securities” for this purpose,
provides relief at least comparable to that provided by PTE 2002-41, or, if the
securities are “debt” for this purpose, provides relief at least comparable to
that provided by PTE 84-14, or (B) subject to appropriate transfer restrictions
(which shall apply to the initial purchase as well as any subsequent transfer)
comparable to clause (i) above applicable to any class of securities as to which
no such exemption is available; provided, however, that the trustee for any such
securitization shall not be required to make such covenants or representations
as to itself.
          Section 9.4 Exculpation. Subject to the qualifications below, Lender
shall not enforce the liability and obligation of Borrower to perform and
observe the obligations contained in the Note, this Agreement, the Mortgage or
the other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against Borrower, Guarantor or any direct or indirect principal,
director, officer, employee, beneficiary, shareholder, partner, member,
Constituent Member, trustee, agent or affiliate of Borrower, Guarantor or any
person owning, directly or indirectly, any legal or beneficial interest in
Borrower, or Guarantor or any successors or assigns of any of the foregoing
(collectively, the “Exculpated Parties”), except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Lender to enforce and realize upon its interest
under the Note, this Agreement, the Mortgage and the other Loan Documents, or in
the Property, the Rents, or any other collateral given to Lender pursuant to the
Loan Documents; provided, however, that, except as specifically provided herein,
any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower’s interest in the Property, in the Rents
and in any other collateral given to Lender, and Lender, by accepting the Note,
this Agreement, the Mortgage and the other Loan Documents, agrees that it shall
not sue for, seek or demand any deficiency judgment against Borrower or any of
the Exculpated Parties in any such action or proceeding under or by reason of or
under or in connection with the Note, this Agreement, the Mortgage or the other
Loan Documents. The provisions of this section shall not, however, (a)
constitute a waiver, release or impairment of any obligation evidenced or
secured by any of the Loan Documents; (b) impair the right of Lender to name
Borrower as a party defendant in any action or suit for foreclosure and sale
under the Mortgage; (c) affect the validity or enforceability of any guaranty
made in connection with the Loan or any of the rights and remedies of Lender
thereunder; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute
a prohibition against Lender to seek a deficiency judgment against Borrower in
order to fully realize the security granted the Mortgage or to commence any
other appropriate action or proceeding in order for Lender to exercise its
remedies against the Property; or (g) constitute a waiver of the right of Lender
to enforce the liability and obligation of Borrower, by money judgment or
otherwise, to the extent of any loss, damage, cost, expense, liability, claim or
other obligation incurred by Lender (including reasonable attorneys’ fees and
costs reasonably incurred but excluding any consequential damages) arising out
of or in connection with the following:
     (i) fraud or intentional misrepresentation by Borrower or Hotel Operator in
connection with the Loan;

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     (ii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the Mortgage
concerning environmental laws, hazardous substances and asbestos and any
indemnification of Lender with respect thereto in either document;
     (iii) to the extent proceeds received by Borrower or Hotel Operator, the
misappropriation by Borrower or Hotel Operator in violation of an express
provision in the Loan Documents of (A) any insurance proceeds paid by reason of
any loss, damage or destruction to the Property, (B) any awards or other amounts
received in connection with the Condemnation of all or a portion of the
Property, (C) any Rents received following an Event of Default, or collected
more than thirty (30) days in advance, or (D) any security deposits;
     (iv) failure to obtain Lender’s prior written consent required under this
Agreement to any subordinate financing or other voluntary lien encumbering the
Property; and
     (v) the material failure of Borrower to maintain its status as a single
purpose entity in compliance with Section 4.1.30 of this Agreement or the
material failure of Hotel Operator to maintain its status as a single purpose
entity in compliance with Section 19 of the Subordination Agreement.
          Notwithstanding anything to the contrary in this Agreement, the Note
or any of the Loan Documents, (A) Lender shall not be deemed to have waived any
right which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt secured by the Mortgage or to require that all collateral shall continue to
secure all of the Debt owing to Lender in accordance with the Loan Documents,
and (B) the Debt shall be fully recourse to Borrower in the event that:
(i) Borrower fails to obtain Lender’s prior written consent to any Transfer of
the Property as required by this Agreement; (ii) Borrower or Hotel Operator
files a voluntary petition under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law; (iii) an Affiliate, officer, director, or
representative which controls, directly or indirectly, Borrower or Hotel
Operator files, or joins in the filing of, an involuntary collusive petition
against Borrower or Hotel Operator under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or solicits or causes to be
solicited petitioning creditors for any involuntary petition against Borrower
from any Person; (iv) Borrower or Hotel Operator solicits or causes to be
solicited petitioning creditors for any involuntary collusive petition from any
Person; (v) any Affiliate, officer, director, or representative which controls
Borrower or Hotel Operator joins in voluntary or involuntary collusive
application for the appointment of a custodian, receiver, trustee, or examiner
for Borrower, Hotel Operator or any portion of the Property (vi) Borrower or
Hotel Operator makes a voluntary or involuntary collusive assignment for the
benefit of creditors, or admits, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due.
          Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, and except for each Guarantor’s obligations under the
Guaranty, no present or future Constituent Member in Borrower, nor any present
or future shareholder, officer, director, employee, trustee, beneficiary,
advisor, member, partner, principal, participant or agent of or in

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Borrower or of or in any person or entity that is or becomes a Constituent
Member in Borrower, shall have any personal liability, directly or indirectly,
under or in connection with this Agreement or any of the Loan Documents, or any
amendment or amendments to any of the foregoing made at any time or times,
heretofore or hereafter, and Lender on behalf of itself and its successors and
assigns, hereby waives any and all such personal liability. In addition, Lender,
for itself and its successors and assigns, acknowledges and agrees that neither
Borrower, nor any Constituent Member, nor any other party, is assuming any
personal liability, directly or indirectly, under or in connection with any
agreement, lease, instrument, claim or right constituting a part of the Property
or to which the Property is now or hereafter subject.
          For purposes of this Agreement and each of the other Loan Documents,
neither the negative capital account of any Constituent Member in Borrower nor
any obligation of any Constituent Member in Borrower to restore a negative
capital account or to contribute or loan capital to Borrower or to any other
Constituent Member in Borrower shall at any time be deemed to be the property or
an asset of Borrower (or any such other Constituent Member) and neither Lender
nor any of its successors or assigns shall have any right to collect, enforce or
proceed against with respect to any such negative capital account or obligation
to restore, contribute or loan.
          Section 9.5 Termination of Manager. In the event that (a) an Event of
Default shall have occurred or (b) Manager 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, Manager, Borrower
shall, at the request of Lender, terminate the Management Agreement and replace
the Manager with a Qualifying Manager (other than Manager), it being understood
and agreed that the management fee for such replacement manager shall not exceed
then prevailing market rates. Notwithstanding the foregoing, subsection
(a) above shall only be applicable provided that a Management Termination Event
shall have occurred.
          Section 9.6 Servicer. At the option of Lender, the Loan may be
serviced by a servicer/trustee (the “Servicer”) selected by Lender and Lender
may delegate all or my portion of its responsibilities under this Agreement and
the other Loan Documents to the Servicer pursuant to a servicing agreement (the
“Servicing Agreement”) between Lender and Servicer. Lender shall be responsible
for any reasonable set-up fees or any other initial costs relating to or arising
under the Servicing Agreement. Notwithstanding anything to the contrary, Lender
shall endeavor (without liability for failure to do so) to provide Borrower with
notification of any change in the entity servicing the Loan; provided that it
shall not constitute an Event of Default hereunder if due to such failure
Borrower sends any payments required to be made hereunder to the Lender or any
predecessor entity servicing the Loan, and Lender shall provide Borrower with
notification of any change in the interim servicing.
          X. MISCELLANEOUS
          Section 10.1 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and

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unpaid unless a longer period is expressly set forth herein or in the other Loan
Documents. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the legal representatives, successors
and assigns of such party. All covenants, promises and agreements in this
Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.
          Section 10.2 Lender’s Discretion. Whenever pursuant to this Agreement,
Lender exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Lender, the decision of Lender to
approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive.
          Section 10.3 Governing Law. (A) THE LOAN WAS ACCEPTED BY BORROWER IN
THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO
WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT 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 LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT
THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT
OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF
THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER AND LENDER 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 AND THE NOTE 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 CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS

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LAW AND BORROWER AND LENDER 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 AND LENDER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
          Section 10.4 Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, or of the Note, or of any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise expressly
provided herein, no notice to, or demand on Borrower, shall entitle Borrower to
any other or future notice or demand in the same, similar or other
circumstances.
          Section 10.5 Delay Not a Waiver. Neither any failure nor any delay on
the part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Note or any other Loan
Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Note
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.
          Section 10.6 Notices. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), followed by a hard copy via one of the other methods
described above 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   Greenwich Capital Financial Products, Inc.
 
      600 Steamboat Road
 
      Greenwich, Connecticut 06830
 
      Attn: Commercial Mortgage Loan Department
 
      Telephone No.: (203) 618 2373
 
      Facsimile No.: (203) 629 8363
 
       
 
  with a copy to:   Sidley Austin LLP
 
      One South Dearborn Street
 
      Chicago, Illinois 60603
 
      Attention: Charles E. Schrank
 
      Facsimile (312) 853-7036

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  If to Borrower:   c/o Whitehall Street Global Real Estate Limited Partnership
2005
 
      85 Broad Street, 10th Floor
 
      New York, New York 10004
 
      Attention: Whitehall Chief Financial Officer
 
      Facsimile No: (212) 357-5505
 
       
 
  With copies to:   c/o GEM Realty Capital, Inc.
 
      900 North Michigan Avenue, Suite 1450
 
      Chicago, Illinois 60611
 
      Attention: Craig Cafferelli
 
      Facsimile No: (312) 915-2901
 
       
 
  and    
 
       
 
      Kirkland & Ellis LLP
 
      Citigroup Center
 
      153 East 53rd Street
 
      New York, New York 10022
 
      Attention: Jennifer M. Morgan, Esq.
 
      Facsimile No: (212) 446-4900
 
       
 
  and    
 
      Pircher, Nichols & Meeks
 
      1925 Century Park East, Suite 1700
 
      Los Angeles, California 90067
 
      Attention: Real Estate Notices (SCS/WB)
 
      Facsimile No: (310) 201-8922
 
       
 
  and    
 
       
 
      Accor Business and Leisure North America, Inc.
 
      4001 International Parkway
 
      Carrollton, Texas 75507
 
      Attention: Olivier Poirot
 
      Facsimile No: (972) 716-6508
 
       
 
  and    
 
       
 
      Proskauer Rose LLP
 
      1585 Broadway
 
      New York, New York 10036
 
      Attention: Steven Lichtenfeld
 
      Facsimile No: (212) 969-2900

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A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery (or refusal); in the case of registered or certified mail,
when delivered or the first attempted delivery on a Business Day; or in the case
of expedited prepaid delivery and telecopy, upon the first attempted delivery on
a Business Day.
          Section 10.7 Trial by Jury. BORROWER AND LENDER EACH HEREBY AGREES NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY BORROWER AND LENDER.
          Section 10.8 Headings. The Article and/or Section headings and the
Table of Contents in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
          Section 10.9 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
          Section 10.10 Preferences. Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by Borrower
to any portion of the obligations of Borrower hereunder. To the extent Borrower
makes a payment or payments to Lender, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.
          Section 10.11 Intentionally Deleted.
          Section 10.12 Intentionally Deleted.
          Section 10.13 Expenses; Indemnity. (a) Except as otherwise set forth
herein, 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

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attorneys’ fees and disbursements) incurred by Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Loan Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any opinions requested by Lender as to any legal
matters arising under this Agreement or the other Loan Documents with respect to
the Property); (ii) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan Documents and any other documents or matters
requested by Lender; (iii) securing Borrower’s compliance with any requests made
pursuant to the provisions of this Agreement; (iv) the filing and recording fees
and expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to this
Agreement and the other Loan Documents; (v) 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; and (vi) 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; 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 Cash Management Account.
          (b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever but excluding lost profits, diminution in value and
consequential damages (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened (in writing),
whether or not Lender shall be designated a party thereto), that may be imposed
on, incurred by, or asserted against Lender in any manner relating to or arising
out of (i) any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the “Indemnified Liabilities”); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender. If Lender claims indemnification under this Section 10.13(b) Lender
shall promptly notify Borrower of the nature and basis of the claim or legal or
administrative proceeding giving rise to such claim or indemnification (each, an
“Indemnified Claim”). After notice by Lender, Borrower shall defend Lender by
attorneys and other professionals reasonably approved by Lender and shall have
the right to negotiate and enter into and/or consent to any settlement, subject
to the prior approval of Lender, such approval not be unreasonably withheld
provided that such approval shall not be required in connection with

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any settlement which includes any unconditional release of Lender and all
related actions for all liability for which Lender is seeking indemnification
and there is no admission of wrongdoing on the part of Lender. If Borrower has
assumed the defense of any action brought against Lender, then Lender shall not
settle such action without the consent of Borrower. Notwithstanding the
foregoing, Lender may, engage its own attorneys and other professionals to
defend or assist it in the event the defense as conducted by Borrower is not
proceeding or being conducted in a satisfactory manner or that a conflict of
interest exists between any of the parties represented by Borrower’s counsel in
such action or proceeding; provided, however, (x) that so long as no Event of
Default exists, Lender shall provide Borrower with fifteen (15) days prior
written notice of any determination pursuant to this Section 10.13 (unless
Lender determines, in its sole discretion, that its interest may be adversely
affected prior to the expiration of such notice period, in which case, Lender
may take immediate action and send written notice to Borrower thereafter); and
(y) shall not enter into any settlement of such a proceeding without the consent
of Borrower, which consent shall not be unreasonably withheld.
          Section 10.14 Schedules Incorporated. The Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.
          Section 10.15 Offsets, Counterclaims and Defenses. Any assignee of
Lender’s interest in and to this Agreement, the Note and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to such documents which Borrower may otherwise have
against any assignor of such documents, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
          Section 10.16 No Joint Venture or Partnership; No Third Party
Beneficiaries. (a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the 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 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.

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          Section 10.17 Publicity. All news releases, publicity or advertising
by Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, Greenwich, or any of their Affiliates shall be subject to
the prior written approval of Lender.
          Section 10.18 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 Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Property in preference to every other claimant whatsoever.
          Section 10.19 Waiver of Counterclaim. Borrower hereby waives the right
to assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.
          Section 10.20 Conflict; Construction of Documents; Reliance. In the
event of any conflict between the provisions of this Agreement and any of the
other Loan Documents, the provisions of this Agreement shall control. The
parties hereto acknowledge that they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Lender or any parent,
subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the Loan Documents or any other agreements or instruments which govern the
Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of
Lender of any equity interest any of them may acquire in Borrower, and Borrower
hereby irrevocably waives the right to raise any defense or take any action on
the basis of the foregoing with respect to Lender’s exercise of any such rights
or remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.
          Section 10.21 Brokers and Financial Advisors. Borrower hereby
represents that, other than Goldman Sachs & Co. and JMB Financial Advisors, it
has dealt with no financial advisors, brokers, underwriters, placement agents,
agents or finders in connection with the transactions contemplated by this
Agreement. Borrower hereby agrees to indemnify, defend and hold Lender harmless
from and against any and all claims, liabilities, costs and expenses of any kind
(including Lender’s attorneys’ fees and expenses) in any way relating to or
arising from a claim by any Person that such Person acted on behalf of Borrower
or Lender in connection with the transactions contemplated herein. The
provisions of this Section 10.21 shall survive the expiration and termination of
this Agreement and the payment of the Debt.

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          Section 10.22 Prior Agreements. This Agreement and the other Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, including,
without limitation, the term sheet dated as of November 1, 2006, are superseded
by the terms of this Agreement and the other Loan Documents.
          Section 10.23 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
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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:

SOUTH 17TH STREET OWNERCO, LLC,
a Delaware limited liability company
      By:   South 17th Street OwnerCo Mezzanine, LLC,         a Delaware limited
liability company,        its sole member     

  By:   Platinum OwnerCo, LLC,         a Delaware limited liability company,   
    its sole member     

  By:   /s/ Eric Siegel         Name:   Eric Siegel        Its: Authorized
Signatory   

 

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            LENDER:

GREENWICH CAPITAL FINANCIAL
      PRODUCTS, INC, a Delaware corporation
      By:   /s/ Christine H Moran         Name:   Christine H Moran       
Title:   VP