Exhibit 10.4

 

 

 

INTERCREDITOR AND SUBORDINATION AGREEMENT

 

by and among

 

BANK OF AMERICA, N.A., a national banking association,

 

as Senior Lender

 

 

BEHRINGER HARVARD PAL I, LLC,
a Delaware limited liability company,

 

as Junior Lender

 

 

and

 

 

LEND LEASE (US) CAPITAL INC.,

 

as

 

 

Subordinate Lender

 

Dated as of August 14, 2009

 

 

 

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INTERCREDITOR AND SUBORDINATION AGREEMENT

 

This INTERCREDITOR AND SUBORDINATION AGREEMENT (this “Agreement”) dated as of
August 14, 2009, is by and among BANK OF AMERICA, N.A., a national banking
association (the “Senior Lender”), BEHRINGER HARVARD PAL I, LLC, a Delaware
limited liability company (“Junior Lender”), and LEND LEASE (US) CAPITAL INC., a
Delaware corporation (the “Subordinate Lender”) (together, the Senior Lender,
Junior Lender and Subordinate Lender are referred to herein as the “Lenders”).

 

RECITALS:

 

A.             Senior Lender is the owner and holder of a promissory note in the
aggregate principal amount of THIRTY-FIVE MILLION AND NO/100 Dollars
($35,000,000.00) dated August 14, 2009 executed by Rest Easy LLC, a Delaware
limited liability company (“Borrower”), and payable to the order of the Senior
Lender (as renewed, extended, modified, amended or restated from time to time,
the “Senior Note”).

 

B.            The Senior Note and the total indebtedness evidenced thereby are
(i) governed by a certain Senior Loan Agreement of even date with the Senior
Note between Senior Lender and Borrower (as amended, supplemented, modified,
restated, renewed or extended from time to time, the “Senior Loan Agreement”)
and (ii) secured by each Mortgage, as defined in the Senior Loan Agreement,
executed by Borrower for the benefit of Senior Lender (collectively, as amended,
supplemented, modified, restated, renewed or extended from time to time, the
“Senior Mortgage”), granting a first priority lien on the Property and any
Improvements situated thereon, which Property is more particularly described in
Exhibit A attached hereto and incorporated herein.  The Senior Note, the Senior
Loan Agreement, the Senior Mortgage and any security agreement, pledge
agreement, assignment agreement, UCC financing statements, environmental
indemnity agreement, guaranty, completion guaranty, any reimbursement agreement
or reimbursement obligation of Borrower relating to Senior Lender’s loan to
Borrower to fund certain improvements that will be completed or maintained for
the benefit of the Property or surrounding properties, any interest rate swap,
collar or other interest rate protection agreement that Borrower enters into
with Senior Lender pertaining to the Senior Loan, or any assignment of
architect’s agreement, construction contract or other contracts or subcontracts
or any other document or modification now or hereafter executed in connection
therewith are herein referred to collectively as the “Senior Loan Documents.”

 

C.              Junior Lender is the owner and holder of a promissory note in
the aggregate principal amount of TWENTY-FIVE MILLION AND NO/100 Dollars
($25,000,000.00) dated August 14, 2009 executed by Borrower and payable to the
order of the Junior Lender (as renewed, extended, modified, amended or restated
from time to time, the “Junior Note”).

 

D.            The Junior Note and the total indebtedness evidenced thereby are
(i) governed by a certain Junior Loan Agreement of even date with the Junior
Note between Junior Lender and Borrower (as amended, supplemented, modified,
restated, renewed or extended from time to time, the “Junior Loan Agreement”)
and (ii) secured by each Junior Mortgage, as defined in the Junior Loan
Agreement, executed by Borrower for the benefit of Junior Lender (collectively,
as amended, supplemented, modified, restated, renewed or extended from time to
time, the “Junior Mortgage”), granting a second priority lien on the Property
and any Improvements situated

 

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thereon.  The Junior Note, the Junior Loan Agreement, the Junior Mortgage and
any security agreement, pledge agreement, assignment agreement, UCC financing
statements, environmental indemnity agreement, guaranty, completion guaranty,
any reimbursement agreement or reimbursement obligation of Borrower relating to
Junior Lender’s loan to Borrower to fund certain improvements that will be
completed or maintained for the benefit of the Property or surrounding
properties, any interest rate swap, collar or other interest rate protection
agreement that Borrower enters into with Junior Lender pertaining to the Junior
Loan, or any assignment of architect’s agreement, construction contract or other
contracts or subcontracts or any other document or modification now or hereafter
executed in connection therewith are herein referred to collectively as the
“Junior Loan Documents.”

 

E.              Subordinate Lender is the owner and holder of a promissory note
in the aggregate principal amount of TWENTY-ONE MILLION FIVE HUNDRED THOUSAND
AND NO/100 Dollars ($21,500,000.00) dated August 14, 2009 executed by Borrower
and payable to the order of the Subordinate Lender (as renewed, extended,
modified, amended or restated from time to time, the “Subordinate Note”).

 

F.             The Subordinate Note and the total indebtedness evidenced thereby
are (i) governed by a certain Subordinate Loan Agreement of even date with the
Subordinate Note between Subordinate Lender and Borrower (as amended,
supplemented, modified, restated, renewed or extended from time to time, the
“Subordinate Loan Agreement”) and (ii) secured by each Subordinate Mortgage, as
defined in the Subordinate Loan Agreement, executed by Borrower for the benefit
of Subordinate Lender (collectively, as amended, supplemented, modified,
restated, renewed or extended from time to time, the “Subordinate Mortgage”),
granting a third priority lien on the Property and any Improvements situated
thereon.  The Subordinate Note, the Subordinate Loan Agreement, the Subordinate
Mortgage and any security agreement, pledge agreement, assignment agreement, UCC
financing statements, environmental indemnity agreement, guaranty, completion
guaranty, any reimbursement agreement or reimbursement obligation of Borrower
relating to Subordinate Lender’s loan to Borrower to fund certain improvements
that will be completed or maintained for the benefit of the Property or
surrounding properties, any interest rate swap, collar or other interest rate
protection agreement that Borrower enters into with Subordinate Lender
pertaining to the Subordinate Loan, or any assignment of architect’s agreement,
construction contract or other contracts or subcontracts or any other document
or modification now or hereafter executed in connection therewith are herein
referred to collectively as the “Subordinate Loan Documents.”

 

G.            Senior Lender is unwilling to make the Senior Loan unless
(i) Junior Lender agrees to subordinate and make inferior: (A) the right, title,
security interest, lien and interest created by the Junior Loan Documents to the
right, title, security interest, lien and interest of the Senior Mortgage and
the other Senior Loan Documents; and (B) Junior Lender’s rights to receive any
payments under or on account of the Junior Loan Obligations to Senior Lender’s
rights to receive payments under or on account of the Senior Loan Obligations;
and (ii) Subordinate Lender agrees to subordinate and make inferior: (A) the
right, title, security interest, lien and interest created by the Subordinate
Loan Documents to the right, title, security interest, lien and interest of the
Senior Mortgage and the other Senior Loan Documents; and (B) Subordinate
Lender’s rights to receive any payments under or on account of the Subordinate
Loan

 

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Obligations to Senior Lender’s rights to receive payments under or on account of
the Senior Loan Obligations.

 

H.            Junior Lender is unwilling to make the Junior Loan unless
Subordinate Lender agrees to subordinate and make inferior: (i) the right,
title, security interest, lien and interest created by the Subordinate Loan
Documents to the right, title, security interest, lien and interest of the
Junior Mortgage and Junior Loan Documents; and (ii) Subordinate Lender’s rights
to receive any payments under or on account of the Subordinate Loan Obligations
to Junior Lender’s right to receive payments under or on account of the Junior
Loan Obligations.

 

I.              In lieu of recording this Agreement, Senior Lender, Junior
Lender and Subordinate Lender shall record in the appropriate real property
records a Memorandum of Intercreditor and Subordination Agreement (the
“Memorandum”) concurrently with the recordation of the Senior Mortgage, the
Junior Mortgage and the Subordinate Mortgage.

 

NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Senior Lender, Junior Lender and Subordinate
Lender hereby agree as follows:

 

1.             RECITALS INCORPORATED.  THE RECITALS SET FORTH HEREINABOVE ARE
INCORPORATED HEREIN BY REFERENCE TO THE SAME EXTENT AND WITH THE SAME FORCE AND
EFFECT AS IF FULLY SET FORTH HEREINBELOW; PROVIDED, HOWEVER, THAT SUCH RECITALS
SHALL NOT BE DEEMED TO MODIFY THE EXPRESS PROVISIONS HEREINAFTER SET FORTH.

 

2.             DEFINITIONS.  THE FOLLOWING TERMS SHALL HAVE THE MEANINGS
INDICATED BELOW:

 

“Affiliate” means, as to any particular Person, any Person directly or
indirectly, through one or more intermediaries, controlling, Controlled by or
under common Control with the Person or Persons in question.

 

“Affiliated Subordinate Lender” is defined in Section 13.

 

“Bankruptcy Event” means (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to Borrower or its managing member,
or (b) any liquidation, dissolution or other winding up of Borrower or its
managing member, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets or liabilities of Borrower or its managing
member.

 

“Business Day” means any day other than Saturday, Sunday or a day that is a
legal holiday under the laws of the State of New York or on which banking
institutions in the State of New York are required by law or other governmental
action to close.

 

“Collateral” means, collectively, the Property, any Improvements and any and all
other property (whether real, personal or otherwise) and interests in property
which now constitutes or hereafter will constitute collateral or other security
for payment of the Senior Loan pursuant to the Senior Loan Documents, the Junior
Loan pursuant to the

 

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Junior Loan Documents, or the Subordinate Loan pursuant to the Subordinate Loan
Documents.

 

“Control” means either (a) the ownership, directly or indirectly, in the
aggregate of more than fifty percent (50%) of the beneficial ownership interests
of an entity, or (b) the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of an entity,
whether through the ability to exercise voting power, by contract or otherwise. 
“Controlled by,” “controlling” and “under common control with” shall have the
respective correlative meaning thereto.

 

“Improvements” means, collectively, any and all improvements now or hereafter
located on any of the Property.

 

“Initial Advance” has the meaning set forth in the Senior Loan Agreement.

 

“JL Monetary Default Election Notice” is defined in Section 7(b)(i).

 

“JL Non-Monetary Default Election Notice” is defined in Section 7(c)(i).

 

“Junior Default” means a “Default” as such term is defined in the Junior Loan
Agreement.

 

“Junior Default Notice” is defined in Section 8(a).

 

“Junior Enforcement Notice” is defined in Section 8(a).

 

“Junior Lender’s Outside Date” means a date first occurring after the issuance
of a Senior Enforcement Notice that is the date Junior Lender’s cure period
applicable to such Senior Enforcement Notice, as more particularly set forth in
Section 7(b) with respect to Senior Monetary Defaults or Section 7(c) with
respect to Senior Non-Monetary Defaults, expires, unless Junior Lender has
elected in writing to purchase the Senior Loan pursuant to Section 7(g) below,
in which event “Junior Lender’s Outside Date” shall be the Purchase Closing
Date.

 

“Junior Loan” or “Junior Loan Obligations” means all present and future
indebtedness, obligations and liabilities of Borrower under the Junior Loan
Documents, including (a) all principal (including principal which is borrowed,
repaid and reborrowed), interest (including interest accruing subsequent to, and
interest that would have accrued but for, the filing of any petition under any
bankruptcy, insolvency or similar law or the commencement of any Proceeding),
default interest, late charges, prepayment fees, expenses, fees, reimbursement
obligations relating to Junior Lender’s issuance or execution of standby letters
of credit or developer’s agreements pertaining to the Property or surrounding
properties, other reimbursements, interest rate swaps, collars or other interest
rate protection agreements that Borrower may enter into with Junior Lender
pertaining to the Junior Loan, indemnities and other amounts payable thereunder,
in each case whether now or hereafter arising, direct or indirect, primary or
secondary, joint, several or joint and several, liquidated or unliquidated,
final or contingent, and whether incurred as maker, endorser or otherwise;
(b) all indebtedness arising from all

 

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present and future optional or obligatory advances (including advances to cover
overdrafts that pertain to the Property) under the Junior Note or any other
Junior Loan Document, (c) any and all amendments, modifications, extensions,
renewals, refinancing or refundings of any of such indebtedness, obligations or
liabilities, and (d) any and all sums advanced or expended by Junior Lender
(whether deemed optional or obligatory advances, or otherwise) which Junior
Lender deems necessary or appropriate (1) to advance or complete construction of
the Property and any Improvements and market the Property or any portion thereof
for sale, (2) to repair, maintain or otherwise protect the Property and any
Improvements or to prevent waste or destruction or to pay or prevent liens or to
defend Borrower’s title or Junior Lender’s lien priority, (3) to pay taxes,
assessments or insurance premiums in respect of the Property or any Improvements
or to otherwise protect Junior Lender’s security interest in the Property, any
Improvements and any other Collateral, or (4) in connection with Junior Lender’s
protection or exercise of its rights or remedies under the Junior Loan
Documents.  To the extent any payment on any of the Junior Loan Obligations,
whether by or on behalf of Borrower, as proceeds of security or enforcement of
any right of setoff or otherwise, is recovered by or required to be paid over to
Borrower or a receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person in a Proceeding, such Junior Loan Obligation or any part thereof
originally intended to be satisfied by such payment shall be deemed to be
reinstated and outstanding as if such payment had not occurred.  All outstanding
Junior Loan Obligations shall be and remain Junior Loan Obligations subordinate
to the Senior Loan Obligations and superior to the Subordinate Loan Obligations
for all purposes of this Agreement, regardless of whether they are allowed, not
allowed or subordinated in any Proceeding.

 

“Junior Loan Agreement” is defined in Recital D.

 

“Junior Loan Documents” is defined in Recital D.

 

“Junior Loan Enforcement Action” means any (a) judicial or non-judicial
foreclosure proceeding, the exercise of any power of sale, the taking of a deed
or assignment in lieu of foreclosure, the obtaining of a receiver or the taking
of any other enforcement action under the Junior Loan Documents by the Junior
Lender against the Property or Borrower, including, without limitation, the
taking of possession or control of the Property or instituting or participating
in the institution of any Proceeding, (b) demand or action taken by the Junior
Lender in order to collect all or any indebtedness under the Junior Loan
Documents secured by the Property (other than acceleration of the Junior Loan,
giving of notices of default and statements of overdue amounts and exercising
rights expressly provided in the Lock Box Agreement) or (c) exercise of any
default enforcement right or remedy available to Junior Lender under the Junior
Loan Documents, at law, in equity or otherwise against the Borrower or the
Property.

 

“Junior Loan Modification” is defined in Section 13.

 

“Junior Loan Purchase Price” means a purchase price equal to the aggregate
amount outstanding, including principal, accrued interest, prepayment premium,
exit fee, swap breakage costs, default interest, late charges, foreclosure or
other enforcement

 

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expenses, attorneys’ fees, Protective Advances, and any other outstanding Junior
Loan Obligations and reasonable costs of the Purchase incurred by the Junior
Lender.

 

“Junior Monetary Default” means a Junior Default that can be cured solely by the
payment of money.

 

“Junior Mortgage” is defined in Recital C.

 

“Junior Non-Monetary Default” means a Junior Default that cannot be cured solely
by the payment of money.

 

“Junior Note” is defined in Recital C.

 

“Junior Permitted Scheduled Payments” is defined in Section 6.

 

“Junior Purchase” is defined in Section 8(e).

 

“Junior Purchase Closing Date” is defined in Section 8(e).

 

“Lender” means any of the Senior Lender, Junior Lender or Subordinate Lender, as
applicable.

 

“Lender Purchase Notice” is defined in Section 7(g)(i).

 

“Loan Documents” means, collectively, the Senior Loan Documents, Junior Loan
Documents and Subordinate Loan Documents.

 

“Loans” means, collectively, the Senior Loan, the Junior Loan and the
Subordinate Loan.

 

“Lock Box Agreement” means the “Lock Box Agreement” as such term is defined in
the Senior Loan Agreement.

 

“Non-Affiliated Subordinate Lender” is defined in Section 13.

 

“PAL Lease” is defined in the Senior Loan Agreement.

 

“Person” means any person, individual, sole proprietorship, partnership, joint
venture, corporation, limited liability company, unincorporated organization,
association, institution, entity, party, including any government and any
political subdivision, agency, or instrumentality thereof.

 

“Purchase” is defined in Section 7(g)(ii).

 

“Purchase Closing Date” is defined in Section 7(g)(ii).

 

“Proceeding” means (a) any voluntary or involuntary case, action or proceeding
before any court or other governmental authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or

 

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(b) any general assignment for the benefit of creditors, composition, marshaling
of assets for creditors, or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors; undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.

 

“Property” means, collectively, the real property and all other property
(whether real, personal or otherwise) encumbered by the Senior Mortgage, the
Junior Mortgage and the Subordinate Mortgage.

 

“Protective Advances” means any and all sums advanced or expended by Senior
Lender, Junior Lender or Subordinate Lender (whether deemed optional or
obligatory advances, or otherwise) which Senior Lender, Junior Lender or
Subordinate Lender, as the case may be, deems necessary or appropriate (a) to
advance or complete construction of the Property and any Improvements and market
the Property or any portion thereof for sale, (b) to repair, maintain or
otherwise protect the Property and any Improvements or to prevent waste or
destruction or to pay or prevent liens or to defend Borrower’s title or Senior
Lender’s, Junior Lender’s or Subordinate Lender’s lien priority, (c) to pay
taxes, assessments or insurance premiums in respect of the Property or any
Improvements or to otherwise protect Senior Lender’s, Junior Lender’s or
Subordinate Lender’s security interest in the Property, any Improvements and any
other Collateral, or (d) in connection with Senior Lender’s, Junior Lender’s or
Subordinate Lender’s protection or exercise of its rights or remedies under the
Senior Loan Documents, Junior Loan Documents or the Subordinate Loan Documents,
as the case may be.

 

“Senior Default” means a “Default” as such term is defined in the Senior Loan
Agreement.

 

“Senior Default Notice” is defined in Section 7(a).

 

“Senior Enforcement Notice” is defined in Section 7(a).

 

“Senior Loan Agreement” is defined in Recital B.

 

“Senior Loan Documents” is defined in Recital B.

 

“Senior Loan Enforcement Action” means any (a) judicial or non-judicial
foreclosure proceeding, the exercise of any power of sale, the taking of a deed
or assignment in lieu of foreclosure, the obtaining of a receiver or the taking
of any other enforcement action by the Senior Lender under the Senior Loan
Documents against the Property or Borrower, including, without limitation, the
taking of possession or control of the Property or instituting or participating
in the institution of any Proceeding, (b) acceleration of the Senior Loan, or
demand or action taken by the Senior Lender in order to collect all or any
indebtedness under the Senior Loan Documents secured by the Property (other than
giving of notices of default and statements of overdue amounts and exercising
rights expressly provided in the Lock Box Agreement) or (c) exercise of any
default enforcement right or remedy available to Senior Lender under the Senior
Loan Documents, at law, in equity or otherwise against the Borrower or the
Property.

 

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“Senior Loan” or “Senior Loan Obligations” means all present and future
indebtedness, obligations and liabilities of Borrower under the Senior Loan
Documents, including (a) all principal (including principal which is borrowed,
repaid and reborrowed), interest (including interest accruing subsequent to, and
interest that would have accrued but for, the filing of any petition under any
bankruptcy, insolvency or similar law or the commencement of any Proceeding),
default interest, late charges, prepayment fees, expenses, fees, reimbursement
obligations relating to Senior Lender’s issuance or execution of standby letters
of credit or developer’s agreements pertaining to the Property or surrounding
properties, other reimbursements, interest rate swaps, collars or other interest
rate protection agreements that Borrower may enter into with Senior Lender
pertaining to the Senior Loan, indemnities and other amounts payable thereunder,
in each case whether now or hereafter arising, direct or indirect, primary or
secondary, joint, several or joint and several, liquidated or unliquidated,
final or contingent, and whether incurred as maker, endorser or otherwise;
(b) all indebtedness arising from all present and future optional or obligatory
advances (including advances to cover overdrafts that pertain to the Property)
under the Senior Note or any other Senior Loan Document, (c) any and all
amendments, modifications, extensions, renewals, refinancing or refundings of
any of such indebtedness, obligations or liabilities, and (d) any and all sums
advanced or expended by Senior Lender (whether deemed optional or obligatory
advances, or otherwise) which Senior Lender deems necessary or appropriate
(1) to advance or complete construction of the Property and any Improvements and
market the Property or any portion thereof for sale, (2) to repair, maintain or
otherwise protect the Property and any Improvements or to prevent waste or
destruction or to pay or prevent liens or to defend Borrower’s title or Senior
Lender’s lien priority, (3) to pay taxes, assessments or insurance premiums in
respect of the Property or any Improvements or to otherwise protect Senior
Lender’s security interest in the Property, any Improvements and any other
Collateral, or (4) in connection with Senior Lender’s protection or exercise of
its rights or remedies under the Senior Loan Documents.  To the extent any
payment on any of the Senior Loan Obligations, whether by or on behalf of
Borrower, as proceeds of security or enforcement of any right of setoff or
otherwise, is recovered by or required to be paid over to Borrower or a
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person in a
Proceeding, such Senior Loan Obligation or any part thereof originally intended
to be satisfied by such payment shall be deemed to be reinstated and outstanding
as if such payment had not occurred.  All outstanding Senior Loan Obligations
shall be and remain Senior Loan Obligations for all purposes of this Agreement,
regardless of whether they are allowed, not allowed or subordinated in any
Proceeding.

 

“Senior Loan Modification” is defined in Section 13.

 

“Senior Loan Purchase Price” means a purchase price equal to the aggregate
amount outstanding, including principal, accrued interest, prepayment premium,
exit fee, swap breakage costs, default interest, late charges, foreclosure or
other enforcement expenses, attorneys’ fees, Protective Advances, and any other
outstanding Senior Loan Obligations and reasonable costs of the Purchase
incurred by the Senior Lender.

 

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“Senior Monetary Default” means a Senior Default that can be cured solely by the
payment of money.

 

“Senior Mortgage” is defined in Recital B.

 

“Senior Non-Monetary Default” means a Senior Default that cannot be cured solely
by the payment of money.

 

“Senior Note” is defined in Recital A.

 

“SL Monetary Default Response Notice” is defined in Section 7(b)(ii).

 

“SL Non-Monetary Default Response Notice” is defined in Section 7(c)(ii).

 

“Special Modification Terms of Junior Loan Documents” means any amendment or
modification of the Junior Loan Documents entered into after the date of this
Agreement with respect to the following in order to: (a) increase the principal
amount secured by the Junior Mortgage (other than increases in respect of
Protective Advances) or amend the Junior Note or otherwise modify the amount or
timing of the payments on the Junior Note, (b) increase the interest rate (other
than a calculation of the increase to a default rate and imposition of late
charges), (c) amend or modify the provisions limiting transfers of interests in
the Borrower or the Property, (d) shorten the scheduled maturity date of the
Junior Loan (except that Junior Lender may permit Borrower to exercise any
extension options in accordance with the terms and provisions of the Junior Loan
Documents), (e) amend the default section under the Junior Loan Documents in a
manner that shortens grace or cure periods or adds any provisions to
cross-default or cross-collateralize the Junior Loan with any other
indebtedness, or (f) increase in any other material respect any monetary
obligations of Borrower under the Junior Loan Documents.

 

“Special Modification Terms of Senior Loan Documents” means any amendment or
modification of the Senior Loan Documents entered into after the date of this
Agreement with respect to the following in order to: (a) increase the principal
amount secured by the Senior Mortgage (other than increases in respect of
Protective Advances), (b) increase the interest rate (other than a calculation
of the increase to a default rate and imposition of late charges), (c) amend or
modify the provisions limiting transfers of interests in the Borrower or the
Property, (d) shorten the scheduled maturity date of the Senior Loan (except
that Senior Lender may permit Borrower to exercise any extension options in
accordance with the terms and provisions of the Senior Loan Documents),
(e) amend the default section under the Senior Loan Documents in a manner that
shortens grace or cure periods or adds any provisions to cross-default or
cross-collateralize the Senior Loan with any other indebtedness, or (f) increase
in any other material respect any monetary obligations of Borrower under the
Senior Loan Documents except by entering into an interest rate swap or other
similar interest rate hedging instrument.

 

“Special Modification Terms of Subordinate Loan Documents” means any amendment
or modification of the Subordinate Loan Documents entered into after the date of
this Agreement with respect to the following in order to: (a) increase the
principal

 

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amount secured by the Subordinate Mortgage (other than increases in respect of
Protective Advances), (b) increase the interest rate (other than a calculation
of the increase to a default rate and imposition of late charges), (c) amend or
modify the provisions limiting transfers of interests in the Borrower or the
Property, (d) shorten the scheduled maturity date of the Subordinate Loan
(except that Subordinate Lender may permit Borrower to exercise any extension
options in accordance with the terms and provisions of the Subordinate Loan
Documents), (e) amend the default section under the Subordinate Loan Documents
in a manner that shortens grace or cure periods or adds any provisions to
cross-default or cross-collateralize the Subordinate Loan with any other
indebtedness, or (f) increase in any other material respect any monetary
obligations of Borrower under the Subordinate Loan Documents.

 

“Subordinate Default” means a “Default” as such term is defined in the
Subordinate Loan Documents.

 

“Subordinate Lender Response Notice” is defined in Section 7(b).

 

“Subordinate Lender’s Outside Junior Loan Date” means a date first occurring
after the issuance of a Junior Enforcement Notice that is the date Subordinate
Lender’s cure period applicable to such Junior Default Notice, as more
particularly set forth in Section 8(b) with respect to Junior Monetary Defaults
or Section 8(c) with respect to Junior Non-Monetary Defaults, as applicable
below, expires unless Subordinate Lender has elected in writing to purchase the
Junior Loan pursuant to Section 8(e) below, in which event, “Subordinate
Lender’s Outside Junior Loan Date” shall be the Junior Purchase Closing Date
with respect to the purchase of the Junior Loan.

 

“Subordinate Lender’s Outside Senior Loan Date” means a date first occurring
after the issuance of a Senior Enforcement Notice that is the date Subordinate
Lender’s cure period applicable to such Senior Default Notice, as more
particularly set forth in Section 7(b) with respect to Senior Monetary Defaults
or Section 7(c) with respect to Senior Non-Monetary Defaults, expires unless
Subordinate Lender has elected in writing to purchase the Senior Loan and the
Junior Loan pursuant to Section 7(g) below, in which event, “Subordinate
Lender’s Outside Date” shall be the Senior Purchase Closing Date with respect to
the purchase of the Senior Loan and Junior Loan.

 

“Subordinate Loan” or “Subordinate Loan Obligations” means all present and
future indebtedness, obligations and liabilities of Borrower under the
Subordinate Loan Documents, including (a) all principal (including principal
which is borrowed, repaid and reborrowed), interest (including interest accruing
subsequent to, and interest that would have accrued but for, the filing of any
petition under any bankruptcy, insolvency or similar law or the commencement of
any Proceeding), default interest, late charges, prepayment fees, expenses,
fees, reimbursement obligations relating to Subordinate Lender’s issuance or
execution of standby letters of credit or developer’s agreements pertaining to
the Property or surrounding properties, other reimbursements, interest rate
swaps, collars or other interest rate protection agreements that Borrower may
enter into with Subordinate Lender pertaining to the Subordinate Loan,
indemnities and other amounts payable thereunder, in each case whether now or
hereafter arising, direct or

 

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indirect, primary or secondary, joint, several or joint and several, liquidated
or unliquidated, final or contingent, and whether incurred as maker, endorser or
otherwise; (b) all indebtedness arising from all present and future optional or
obligatory advances (including advances to cover overdrafts that pertain to the
Property) under the Subordinate Note or any other Subordinate Loan Document,
(c) any and all amendments, modifications, extensions, renewals, refinancing or
refundings of any of such indebtedness, obligations or liabilities, and (d) any
and all sums advanced or expended by Subordinate Lender (whether deemed optional
or obligatory advances, or otherwise) which Subordinate Lender deems necessary
or appropriate (1) to advance or complete construction of the Property and any
Improvements and market the Property or any portion thereof for sale, (2) to
repair, maintain or otherwise protect the Property and any Improvements or to
prevent waste or destruction or to pay or prevent liens or to defend Borrower’s
title or Subordinate Lender’s lien priority, (3) to pay taxes, assessments or
insurance premiums in respect of the Property or any Improvements or to
otherwise protect Subordinate Lender’s security interest in the Property, any
Improvements and any other Collateral, or (4) in connection with Subordinate
Lender’s protection or exercise of its rights or remedies under the Subordinate
Loan Documents.  To the extent any payment on any of the Subordinate Loan
Obligations, whether by or on behalf of Borrower, as proceeds of security or
enforcement of any right of setoff or otherwise, is recovered by or required to
be paid over to Borrower or a receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person in a Proceeding, such Subordinate Loan Obligation
or any part thereof originally intended to be satisfied by such payment shall be
deemed to be reinstated and outstanding as if such payment had not occurred. 
All outstanding Subordinate Loan Obligations shall be and remain Subordinate
Loan Obligations subordinate to both the Senior Loan Obligations and the Junior
Loan Obligations for all purposes of this Agreement, regardless of whether they
are allowed, not allowed or subordinated in any Proceeding.

 

“Subordinate Loan Agreement” is defined in Recital D.

 

“Subordinate Loan Documents” is defined in Recital D.

 

“Subordinate Loan Enforcement Action” means any (a) judicial or non-judicial
foreclosure proceeding, the exercise of any power of sale, the taking of a deed
or assignment in lieu of foreclosure, the obtaining of a receiver or the taking
of any other enforcement action under the Subordinate Loan Documents by the
Subordinate Lender against the Property or Borrower, including, without
limitation, the taking of possession or control of the Property or instituting
or participating in the institution of any Proceeding, (b) demand or action
taken by the Subordinate Lender in order to collect all or any indebtedness
under the Subordinate Loan Documents secured by the Property (other than
acceleration of the Subordinate Loan, giving of notices of default and
statements of overdue amounts and exercising rights expressly provided in the
Lock Box Agreement) or (c) exercise of any default enforcement right or remedy
available to Subordinate Lender under the Subordinate Loan Documents, at law, in
equity or otherwise against the Borrower or the Property.

 

“Subordinate Loan Modification” is defined in Section 13.

 

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“Subordinate Loan Purchase Price” means a purchase price equal to the aggregate
amount outstanding, including principal, accrued interest, prepayment premium,
exit fee, swap breakage costs, default interest, late charges, foreclosure or
other enforcement expenses, attorneys’ fees, Protective Advances, and any other
outstanding Subordinate Loan Obligations and reasonable costs of the Subordinate
Purchase incurred by the Subordinate Lender.

 

“Subordinate Mortgage” is defined in Recital D.

 

“Subordinate Note” is defined in Recital D.

 

“Subordinate Permitted Scheduled Payments” is defined in Section 6.

 

“Subordinate Purchase” is defined in Section 13(b).

 

“Subordinate Purchase Closing Date” is defined in Section 13.

 

“Subordinate Purchase Notice” is defined in Section 8(e).

 

“Swap Contract” is defined in the Senior Loan Documents.

 

“Transfer” is defined in Section 13.

 

3.             APPROVAL OF LOANS AND LOAN DOCUMENTS; FUNDING.

 

(A)           SUBORDINATE LENDER HEREBY ACKNOWLEDGES THAT (I) SUBJECT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT, IT HEREBY CONSENTS TO AND APPROVES OF
THE MAKING OF THE SENIOR LOAN AND JUNIOR LOAN AND, SUBJECT TO THE TERMS AND
PROVISIONS OF THIS AGREEMENT, ALL OF THE TERMS AND PROVISIONS OF THE SENIOR LOAN
DOCUMENTS AND JUNIOR LOAN DOCUMENTS, (II) THE EXECUTION, DELIVERY AND
PERFORMANCE OF THE SENIOR LOAN DOCUMENTS AND JUNIOR LOAN DOCUMENTS WILL NOT
CONSTITUTE A DEFAULT OR AN EVENT WHICH, WITH THE GIVING OF NOTICE OR THE LAPSE
OF TIME, OR BOTH, WOULD CONSTITUTE A DEFAULT UNDER THE SUBORDINATE LOAN
DOCUMENTS, (III) SENIOR LENDER IS UNDER NO OBLIGATION OR DUTY TO, NOR HAS SENIOR
LENDER REPRESENTED THAT IT WILL, SEE TO THE APPLICATION OF THE PROCEEDS OF THE
SENIOR LOAN BY BORROWER OR ANY OTHER PERSON TO WHOM SENIOR LENDER DISBURSES SUCH
PROCEEDS, (IV) ANY APPLICATION OR USE OF THE PROCEEDS OF THE SENIOR LOAN FOR
PURPOSES OTHER THAN THOSE PROVIDED IN THE SENIOR LOAN DOCUMENTS SHALL NOT
AFFECT, IMPAIR OR DEFEAT THE TERMS AND PROVISIONS OF THIS AGREEMENT OR THE
SENIOR LOAN DOCUMENTS, (V) JUNIOR LENDER IS UNDER NO OBLIGATION OR DUTY TO, NOR
HAS JUNIOR LENDER REPRESENTED THAT IT WILL, SEE TO THE APPLICATION OF THE
PROCEEDS OF THE JUNIOR LOAN BY BORROWER OR ANY OTHER PERSON TO WHOM JUNIOR
LENDER DISBURSES SUCH PROCEEDS, AND (VI) ANY APPLICATION OR USE OF THE PROCEEDS
OF THE JUNIOR LOAN FOR PURPOSES OTHER THAN THOSE PROVIDED IN THE JUNIOR LOAN
DOCUMENTS SHALL NOT AFFECT, IMPAIR OR DEFEAT THE TERMS AND PROVISIONS OF THIS
AGREEMENT OR THE JUNIOR LOAN DOCUMENTS.  THE FOREGOING CONSENT AND
ACKNOWLEDGEMENT BY SUBORDINATE LENDER IS NOT INTENDED AND SHALL NOT BE CONSTRUED
TO (I) IMPOSE ANY DUTY OR OBLIGATION ON SUBORDINATE LENDER WITH RESPECT TO
SENIOR LENDER OR JUNIOR LENDER OR WITH RESPECT TO THE SENIOR LOAN DOCUMENTS AND
JUNIOR LOAN DOCUMENTS OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT (AND
NO SUCH DUTY OR OBLIGATION SHALL BE IMPLIED), OR

 

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(II) AMEND OR MODIFY THE RESPECTIVE OBLIGATIONS OF THE PARTIES TO THE
SUBORDINATE LOAN DOCUMENTS OTHER THAN AS EXPRESSLY SET FORTH HEREIN.

 

(B)           JUNIOR LENDER HEREBY ACKNOWLEDGES THAT (I) SUBJECT TO THE TERMS
AND CONDITIONS OF THIS AGREEMENT, IT HEREBY CONSENTS TO AND APPROVES OF THE
MAKING OF THE SENIOR LOAN AND SUBORDINATE LOAN AND, SUBJECT TO THE TERMS AND
PROVISIONS OF THIS AGREEMENT, THE TERMS OF THE SENIOR LOAN DOCUMENTS AND
SUBORDINATE LOAN DOCUMENTS, (II) THE EXECUTION AND DELIVERY OF THE SENIOR LOAN
DOCUMENTS AND SUBORDINATE LOAN DOCUMENTS WILL NOT CONSTITUTE A DEFAULT OR AN
EVENT WHICH, WITH THE GIVING OF NOTICE OR THE LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A DEFAULT UNDER THE JUNIOR LOAN DOCUMENTS, (III) EACH OF THE SENIOR
LENDER AND SUBORDINATE LENDER IS UNDER NO OBLIGATION OR DUTY TO, NOR HAS EITHER
OF THE SENIOR LENDER OR SUBORDINATE LENDER REPRESENTED THAT IT WILL, SEE TO THE
APPLICATION OF THE PROCEEDS OF THE SENIOR LOAN OR SUBORDINATE LOAN BY BORROWER
OR ANY OTHER PERSON TO WHOM EACH OF THE SENIOR LENDER AND SUBORDINATE LENDER
DISBURSES SUCH PROCEEDS AND (IV) ANY APPLICATION OR USE OF THE PROCEEDS OF THE
SENIOR LOAN AND SUBORDINATE LOAN FOR PURPOSES OTHER THAN THOSE PROVIDED IN THE
SENIOR LOAN DOCUMENTS AND SUBORDINATE LOAN DOCUMENTS SHALL NOT AFFECT, IMPAIR OR
DEFEAT THE TERMS AND PROVISIONS OF THIS AGREEMENT OR THE SENIOR LOAN DOCUMENTS
OR SUBORDINATE LOAN DOCUMENTS, RESPECTIVELY.  THE FOREGOING CONSENT AND
ACKNOWLEDGEMENT BY JUNIOR LENDER IS NOT INTENDED AND SHALL NOT BE CONSTRUED TO
(I) IMPOSE ANY DUTY OR OBLIGATION ON JUNIOR LENDER WITH RESPECT TO SENIOR LENDER
OR SUBORDINATE LENDER OR WITH RESPECT TO THE SENIOR LOAN DOCUMENTS AND
SUBORDINATE LOAN DOCUMENTS OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT
(AND NO SUCH DUTY OR OBLIGATION SHALL BE IMPLIED), OR (II) AMEND OR MODIFY THE
RESPECTIVE OBLIGATIONS OF THE PARTIES TO THE JUNIOR LOAN DOCUMENTS OTHER THAN AS
EXPRESSLY SET FORTH HEREIN.

 

(C)           SENIOR LENDER HEREBY ACKNOWLEDGES THAT (I) SUBJECT TO THE TERMS
AND CONDITIONS OF THIS AGREEMENT, IT HEREBY CONSENTS TO AND APPROVES OF THE
MAKING OF THE JUNIOR LOAN AND SUBORDINATE LOAN AND, SUBJECT TO THE TERMS AND
PROVISIONS OF THIS AGREEMENT, THE TERMS OF THE JUNIOR LOAN DOCUMENTS AND
SUBORDINATE LOAN DOCUMENTS, (II) THE EXECUTION AND DELIVERY OF THE JUNIOR LOAN
DOCUMENTS AND SUBORDINATE LOAN DOCUMENTS WILL NOT CONSTITUTE A DEFAULT OR AN
EVENT WHICH, WITH THE GIVING OF NOTICE OR THE LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A DEFAULT UNDER THE SENIOR LOAN DOCUMENTS, (III) EACH OF THE JUNIOR
LENDER AND SUBORDINATE LENDER IS UNDER NO OBLIGATION OR DUTY TO, NOR HAS EITHER
OF THE JUNIOR LENDER OR SUBORDINATE LENDER REPRESENTED THAT IT WILL, SEE TO THE
APPLICATION OF THE PROCEEDS OF THE JUNIOR LOAN OR SUBORDINATE LOAN,
RESPECTIVELY, BY BORROWER OR ANY OTHER PERSON TO WHOM JUNIOR LENDER OR
SUBORDINATE LENDER, RESPECTIVELY, DISBURSES SUCH PROCEEDS AND (IV) ANY
APPLICATION OR USE OF THE PROCEEDS OF THE JUNIOR LOAN AND SUBORDINATE LOAN FOR
PURPOSES OTHER THAN THOSE PROVIDED IN THE JUNIOR LOAN DOCUMENTS AND SUBORDINATE
LOAN DOCUMENTS, RESPECTIVELY, SHALL NOT AFFECT, IMPAIR OR DEFEAT THE TERMS AND
PROVISIONS OF THIS AGREEMENT OR THE JUNIOR LOAN DOCUMENTS OR SUBORDINATE LOAN
DOCUMENTS.  THE FOREGOING CONSENT AND ACKNOWLEDGEMENT BY SENIOR LENDER IS NOT
INTENDED AND SHALL NOT BE CONSTRUED TO (I) IMPOSE ANY DUTY OR OBLIGATION ON
SENIOR LENDER WITH RESPECT TO JUNIOR LENDER AND SUBORDINATE LENDER OR WITH
RESPECT TO THE JUNIOR LOAN DOCUMENTS OR SUBORDINATE LOAN DOCUMENTS OTHER THAN AS
EXPRESSLY SET FORTH IN THIS AGREEMENT (AND NO SUCH DUTY OR

 

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OBLIGATION SHALL BE IMPLIED), OR (II) AMEND OR MODIFY THE RESPECTIVE OBLIGATIONS
OF THE PARTIES TO THE SENIOR LOAN DOCUMENTS OTHER THAN AS EXPRESSLY SET FORTH
HEREIN.

 

(D)           NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, SENIOR LENDER,
JUNIOR LENDER AND SUBORDINATE LENDER AGREE THAT, EXCEPT FOR THE INITIAL ADVANCE
OF THE SENIOR LOAN, THE SUBORDINATE LOAN SHALL BE FUNDED IN FULL PRIOR TO THE
TIME THAT THE JUNIOR LOAN AND SENIOR LOAN ARE FUNDED, AND, EXCEPT FOR THE
INITIAL ADVANCE OF THE SENIOR LOAN, THE JUNIOR LOAN SHALL BE FUNDED IN FULL
PRIOR TO THE TIME THAT THE SENIOR LOAN IS FUNDED.

 

4.             REPRESENTATIONS, WARRANTIES AND COVENANTS.

 

(A)           SUBORDINATE LENDER HEREBY REPRESENTS, WARRANTS AND COVENANTS AS
FOLLOWS:

 

(I)            SUBORDINATE LENDER HAS DELIVERED TO SENIOR LENDER AND JUNIOR
LENDER TRUE, CORRECT AND COMPLETE COPIES OF THE SUBORDINATE LOAN DOCUMENTS AS
SAME EXIST AS OF THE DATE HEREOF.  EXHIBIT B ATTACHED HERETO AND MADE A PART
HEREOF IS A TRUE, CORRECT AND COMPLETE LISTING OF ALL OF THE SUBORDINATE LOAN
DOCUMENTS AS OF THE DATE HEREOF.  TO SUBORDINATE LENDER’S KNOWLEDGE, THERE
CURRENTLY EXISTS NO DEFAULT OR EVENT WHICH, WITH THE GIVING OF NOTICE OR THE
LAPSE OF TIME, OR BOTH, WOULD CONSTITUTE A DEFAULT UNDER ANY OF THE SUBORDINATE
LOAN DOCUMENTS.  SUBORDINATE LENDER HAS NO KNOWLEDGE OF ANY PREVIOUS DEFAULT OR
EVENT OF DEFAULT UNDER ANY OF THE SUBORDINATE LOAN DOCUMENTS WHICH HAS NOT BEEN
CURED OR WAIVED.

 

(II)           SUBORDINATE LENDER IS THE SOLE LEGAL AND BENEFICIAL OWNER OF THE
ENTIRE SUBORDINATE LOAN.

 

(III)          SUBORDINATE LENDER SHALL DELIVER TO SENIOR LENDER AND JUNIOR
LENDER COPIES OF ANY AMENDMENTS TO ANY ONE OR MORE OF THE SUBORDINATE LOAN
DOCUMENTS WITHIN A REASONABLE TIME AFTER ANY OF SUCH APPLICABLE INSTRUMENTS HAVE
BEEN EXECUTED BY SUBORDINATE LENDER.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, SUBORDINATE LENDER SHALL PROVIDE SENIOR LENDER WITH PROMPT NOTICE OF A
SUBORDINATE DEFAULT.

 

(IV)          THIS AGREEMENT HAS BEEN DULY AUTHORIZED BY SUBORDINATE LENDER, THE
PERSONS EXECUTING, ACKNOWLEDGING, AND DELIVERING THIS AGREEMENT ON BEHALF OF
SUBORDINATE LENDER ARE FULLY AUTHORIZED TO DO SO, AND ALL OF THE TERMS AND
PROVISIONS OF THIS AGREEMENT ARE ENFORCEABLE AGAINST SUBORDINATE LENDER AND ITS
SUCCESSORS AND ASSIGNS, EXCEPT TO THE EXTENT THAT SUCH ENFORCEABILITY MAY BE
LIMITED BY LAWS GENERALLY AFFECTING THE ENFORCEMENT OF CREDITORS’ RIGHTS OR BY
PRINCIPLES OF EQUITY.  ANY CONSENTS REQUIRED IN ORDER FOR SUBORDINATE LENDER TO
EXECUTE THIS AGREEMENT AND PERFORM ITS OBLIGATIONS HEREUNDER HAVE BEEN OBTAINED.

 

(V)           SUBORDINATE LENDER ACKNOWLEDGES AND UNDERSTANDS THAT SENIOR LENDER
AND JUNIOR LENDER WILL RELY UPON THE CERTIFICATION, WARRANTIES, REPRESENTATIONS,
COVENANTS, AND AGREEMENTS CONTAINED IN THIS AGREEMENT AS A MATERIAL
CONSIDERATION AND INDUCEMENT IN MAKING, EXTENDING OR MODIFYING THE LOAN
EVIDENCED BY THE SENIOR NOTE OR JUNIOR NOTE.

 

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(VI)          SUBORDINATE LENDER ACKNOWLEDGES AND UNDERSTANDS THAT SENIOR LENDER
AND JUNIOR LENDER ARE LENDING MONEY AND EXTENDING CREDIT TO BORROWER ON THE
BASIS OF BORROWER’S FINANCIAL STATUS AS AN INDEPENDENT ENTITY, SEPARATE AND
APART FROM ANY OTHER ENTITY, INCLUDING WITHOUT LIMITATION SUBORDINATE LENDER OR
ANY OTHER AFFILIATE OF BORROWER, AND THAT SENIOR LENDER AND JUNIOR LENDER EXPECT
TO BE ABLE TO LOOK TO THE ASSETS OF BORROWER FOR THE SATISFACTION OF THEIR
RESPECTIVE LOANS.

 

(B)           JUNIOR LENDER HEREBY REPRESENTS, WARRANTS AND COVENANTS AS
FOLLOWS:

 

(I)            JUNIOR LENDER HAS DELIVERED TO SENIOR LENDER AND SUBORDINATE
LENDER TRUE, CORRECT AND COMPLETE COPIES OF THE JUNIOR LOAN DOCUMENTS AS SAME
EXIST AS OF THE DATE HEREOF.  EXHIBIT C ATTACHED HERETO AND MADE A PART HEREOF
IS A TRUE, CORRECT AND COMPLETE LISTING OF THE JUNIOR LOAN DOCUMENTS AS OF THE
DATE HEREOF.  TO JUNIOR LENDER’S KNOWLEDGE, THERE CURRENTLY EXISTS NO DEFAULT OR
EVENT WHICH, WITH THE GIVING OF NOTICE OR THE LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A DEFAULT UNDER ANY OF THE JUNIOR LOAN DOCUMENTS.  JUNIOR LENDER HAS
NO KNOWLEDGE OF ANY PREVIOUS DEFAULT OR EVENT OF DEFAULT UNDER ANY OF THE JUNIOR
LOAN DOCUMENTS WHICH HAS NOT BEEN CURED OR WAIVED.

 

(II)           JUNIOR LENDER IS THE SOLE LEGAL AND BENEFICIAL OWNER OF THE
JUNIOR LOAN.

 

(III)          JUNIOR LENDER SHALL DELIVER TO SENIOR LENDER AND SUBORDINATE
LENDER COPIES OF ANY AMENDMENTS TO ANY ONE OR MORE OF THE JUNIOR LOAN DOCUMENTS
WITHIN A REASONABLE TIME AFTER ANY OF SUCH APPLICABLE INSTRUMENTS HAVE BEEN
EXECUTED BY SENIOR LENDER.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY,
JUNIOR LENDER SHALL PROVIDE SENIOR LENDER WITH PROMPT NOTICE OF A JUNIOR
DEFAULT.

 

(IV)          THIS AGREEMENT HAS BEEN DULY AUTHORIZED BY JUNIOR LENDER, THE
PERSONS EXECUTING, ACKNOWLEDGING, AND DELIVERING THIS AGREEMENT ON BEHALF OF
JUNIOR LENDER ARE FULLY AUTHORIZED TO DO SO, AND ALL OF THE TERMS AND PROVISIONS
OF THIS AGREEMENT ARE ENFORCEABLE AGAINST JUNIOR LENDER AND ITS SUCCESSORS AND
ASSIGNS, EXCEPT TO THE EXTENT THAT SUCH ENFORCEABILITY MAY BE LIMITED BY LAWS
GENERALLY AFFECTING THE ENFORCEMENT OF CREDITORS’ RIGHTS OR BY PRINCIPLES OF
EQUITY.  ANY CONSENTS REQUIRED IN ORDER FOR JUNIOR LENDER TO EXECUTE THIS
AGREEMENT AND PERFORM ITS OBLIGATIONS HEREUNDER HAVE BEEN OBTAINED.

 

(V)           JUNIOR LENDER ACKNOWLEDGES AND UNDERSTANDS THAT SENIOR LENDER AND
SUBORDINATE LENDER WILL RELY UPON THE CERTIFICATION, WARRANTIES,
REPRESENTATIONS, COVENANTS, AND AGREEMENTS CONTAINED IN THIS AGREEMENT AS A
MATERIAL CONSIDERATION AND INDUCEMENT IN MAKING, EXTENDING OR MODIFYING THE
LOANS EVIDENCED BY THE SENIOR NOTE AND THE SUBORDINATE NOTE.

 

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(C)           SENIOR LENDER HEREBY REPRESENTS, WARRANTS AND COVENANTS AS
FOLLOWS:

 

(I)            SENIOR LENDER HAS DELIVERED TO JUNIOR LENDER AND SUBORDINATE
LENDER TRUE, CORRECT AND COMPLETE COPIES OF THE SENIOR LOAN DOCUMENTS AS SAME
EXIST AS OF THE DATE HEREOF.  EXHIBIT D ATTACHED HERETO AND MADE A PART HEREOF
IS A TRUE, CORRECT AND COMPLETE LISTING OF THE SENIOR LOAN DOCUMENTS AS OF THE
DATE HEREOF.  TO SENIOR LENDER’S KNOWLEDGE, THERE CURRENTLY EXISTS NO DEFAULT OR
EVENT WHICH, WITH THE GIVING OF NOTICE OR THE LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A DEFAULT UNDER ANY OF THE SENIOR LOAN DOCUMENTS.  SENIOR LENDER HAS
NO KNOWLEDGE OF ANY PREVIOUS DEFAULT OR EVENT OF DEFAULT UNDER ANY OF THE SENIOR
LOAN DOCUMENTS WHICH HAS NOT BEEN CURED OR WAIVED.

 

(II)           SENIOR LENDER IS THE SOLE LEGAL AND BENEFICIAL OWNER OF THE
SENIOR LOAN.

 

(III)          SENIOR LENDER SHALL DELIVER TO JUNIOR LENDER AND SUBORDINATE
LENDER COPIES OF ANY AMENDMENTS TO ANY ONE OR MORE OF THE SENIOR LOAN DOCUMENTS
WITHIN A REASONABLE TIME AFTER ANY OF SUCH APPLICABLE INSTRUMENTS HAVE BEEN
EXECUTED BY SENIOR LENDER.

 

(IV)          THIS AGREEMENT HAS BEEN DULY AUTHORIZED BY SENIOR LENDER, THE
PERSONS EXECUTING, ACKNOWLEDGING, AND DELIVERING THIS AGREEMENT ON BEHALF OF
SENIOR LENDER ARE FULLY AUTHORIZED TO DO SO, AND ALL OF THE TERMS AND PROVISIONS
OF THIS AGREEMENT ARE ENFORCEABLE AGAINST SENIOR LENDER AND ITS SUCCESSORS AND
ASSIGNS, EXCEPT TO THE EXTENT THAT SUCH ENFORCEABILITY MAY BE LIMITED BY LAWS
GENERALLY AFFECTING THE ENFORCEMENT OF CREDITORS’ RIGHTS OR BY PRINCIPLES OF
EQUITY.  ANY CONSENTS REQUIRED IN ORDER FOR SENIOR LENDER TO EXECUTE THIS
AGREEMENT AND PERFORM ITS OBLIGATIONS HEREUNDER HAVE BEEN OBTAINED.

 

(V)           SENIOR LENDER ACKNOWLEDGES AND UNDERSTANDS THAT JUNIOR LENDER AND
SUBORDINATE LENDER WILL RELY UPON THE CERTIFICATION, WARRANTIES,
REPRESENTATIONS, COVENANTS, AND AGREEMENTS CONTAINED IN THIS AGREEMENT AS A
MATERIAL CONSIDERATION AND INDUCEMENT IN MAKING, EXTENDING OR MODIFYING THE
LOANS EVIDENCED BY THE JUNIOR NOTE AND THE SUBORDINATE NOTE.

 

5.             SUBORDINATION.

 

(A)           SUBJECT TO THE TERMS OF THIS AGREEMENT, SUBORDINATE LENDER, FOR
ITSELF AND ITS SUCCESSORS AND ASSIGNS (INCLUDING, WITHOUT LIMITATION, ALL
SUBSEQUENT HOLDERS OF THE SUBORDINATE NOTE AND THE SUBORDINATE MORTGAGE) DOES
HEREBY SUBORDINATE (A) THE SUBORDINATE MORTGAGE AND ALL OTHER SUBORDINATE LOAN
DOCUMENTS, (B) ALL OF THE SUBORDINATE LOAN OBLIGATIONS, AND (C) ALL OF ITS
RIGHT, TITLE, SECURITY INTEREST, LIEN, AND INTEREST IN AND TO THE PROPERTY, ANY
IMPROVEMENTS THEREON AND ANY OTHER COLLATERAL AND ALL SALES PROCEEDS, OTHER
PROCEEDS, RENTS, ISSUES, AND PROFITS THEREFROM, TO FIRST, (A)(I) THE SENIOR
MORTGAGE AND ALL OTHER SENIOR LOAN DOCUMENTS, (II) ALL OF THE SENIOR LOAN
OBLIGATIONS, (III) ALL OF THE RIGHT, TITLE, SECURITY INTEREST, LIEN AND INTEREST
HELD BY SENIOR LENDER AND ITS SUCCESSORS AND ASSIGNS (INCLUDING, WITHOUT
LIMITATION, ALL SUBSEQUENT

 

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HOLDERS OF THE SENIOR NOTE AND THE SENIOR MORTGAGE), IN AND TO THE PROPERTY, ANY
IMPROVEMENTS THEREON AND ANY OTHER COLLATERAL AND ALL SALES PROCEEDS, PROCEEDS
FROM INSURANCE OR CONDEMNATION, OTHER PROCEEDS, RENTS, ISSUES, AND PROFITS
THEREFROM, UNDER AND PURSUANT TO (X) THE SENIOR NOTE, (Y) THE SENIOR MORTGAGE,
AND (Z) ALL OTHER SENIOR LOAN DOCUMENTS, AND ANY AND ALL EXTENSIONS, RENEWALS,
MODIFICATIONS, AND REPLACEMENTS THEREOF AND SECOND, (B)(I) THE JUNIOR MORTGAGE
AND ALL OTHER JUNIOR LOAN DOCUMENTS, (II) ALL OF THE JUNIOR LOAN OBLIGATIONS,
(III) ALL OF THE RIGHT, TITLE, SECURITY INTEREST, LIEN AND INTEREST HELD BY
JUNIOR LENDER AND ITS SUCCESSORS AND ASSIGNS (INCLUDING, WITHOUT LIMITATION, ALL
SUBSEQUENT HOLDERS OF THE JUNIOR NOTE AND THE JUNIOR MORTGAGE), IN AND TO THE
PROPERTY, ANY IMPROVEMENTS THEREON AND ANY OTHER COLLATERAL AND ALL SALES
PROCEEDS, PROCEEDS FROM INSURANCE OR CONDEMNATION, OTHER PROCEEDS, RENTS,
ISSUES, AND PROFITS THEREFROM, UNDER AND PURSUANT TO (X) THE JUNIOR NOTE,
(Y) THE JUNIOR MORTGAGE, AND (Z) ALL OTHER JUNIOR LOAN DOCUMENTS, AND ANY AND
ALL EXTENSIONS, RENEWALS, MODIFICATIONS, AND REPLACEMENTS THEREOF.  FROM AND
AFTER THE DATE HEREOF, ALL OF THE DOCUMENTS, INDEBTEDNESS, RIGHT, TITLE,
SECURITY INTEREST, LIEN, AND INTEREST DESCRIBED IN CLAUSES (A), (B) AND
(C) ABOVE IN THIS PARAGRAPH SHALL BE SUBJECT AND SUBORDINATE TO ALL OF THE
DOCUMENTS, INDEBTEDNESS, RIGHT, TITLE, SECURITY INTEREST, LIEN, AND INTEREST
DESCRIBED IN CLAUSES (A)(I), (II) AND (III) AND (B)(I), (II) AND (III) ABOVE IN
THIS PARAGRAPH.

 

(B)           SUBJECT TO THE TERMS OF THIS AGREEMENT, JUNIOR LENDER, FOR ITSELF
AND ITS SUCCESSORS AND ASSIGNS (INCLUDING, WITHOUT LIMITATION, ALL SUBSEQUENT
HOLDERS OF THE JUNIOR NOTE AND THE JUNIOR MORTGAGE) DOES HEREBY SUBORDINATE
(A) THE JUNIOR MORTGAGE AND ALL OTHER JUNIOR LOAN DOCUMENTS, (B) ALL OF THE
JUNIOR LOAN OBLIGATIONS, AND (C) ALL OF ITS RIGHT, TITLE, SECURITY INTEREST,
LIEN, AND INTEREST IN AND TO THE PROPERTY, ANY IMPROVEMENTS THEREON AND ANY
OTHER COLLATERAL AND ALL SALES PROCEEDS, OTHER PROCEEDS, RENTS, ISSUES, AND
PROFITS THEREFROM, TO (I) THE SENIOR MORTGAGE AND ALL OTHER SENIOR LOAN
DOCUMENTS, (II) ALL OF THE SENIOR LOAN OBLIGATIONS, (III) ALL OF THE RIGHT,
TITLE, SECURITY INTEREST, LIEN AND INTEREST HELD BY SENIOR LENDER AND ITS
SUCCESSORS AND ASSIGNS (INCLUDING, WITHOUT LIMITATION, ALL SUBSEQUENT HOLDERS OF
THE SENIOR NOTE AND THE SENIOR MORTGAGE), IN AND TO THE PROPERTY, ANY
IMPROVEMENTS THEREON AND ANY OTHER COLLATERAL AND ALL SALES PROCEEDS, PROCEEDS
FROM INSURANCE OR CONDEMNATION, OTHER PROCEEDS, RENTS, ISSUES, AND PROFITS
THEREFROM, UNDER AND PURSUANT TO (X) THE SENIOR NOTE, (Y) THE SENIOR MORTGAGE,
AND (Z) ALL OTHER SENIOR LOAN DOCUMENTS, AND ANY AND ALL EXTENSIONS, RENEWALS,
MODIFICATIONS, AND REPLACEMENTS THEREOF.  FROM AND AFTER THE DATE HEREOF, ALL OF
THE DOCUMENTS, INDEBTEDNESS, RIGHT, TITLE, SECURITY INTEREST, LIEN, AND INTEREST
DESCRIBED IN CLAUSES (A), (B) AND (C) ABOVE IN THIS PARAGRAPH SHALL BE SUBJECT
AND SUBORDINATE TO ALL OF THE DOCUMENTS, INDEBTEDNESS, RIGHT, TITLE, SECURITY
INTEREST, LIEN, AND INTEREST DESCRIBED IN CLAUSES (I), (II) AND (III) ABOVE IN
THIS PARAGRAPH.

 

6.             PERMITTED SCHEDULED PAYMENTS; PERMITTED SALES PROCEEDS PAYMENTS.

 

(A)           SUBORDINATE LENDER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS
(INCLUDING, WITHOUT LIMITATION, ALL SUBSEQUENT HOLDERS OF THE SUBORDINATE NOTE
AND THE SUBORDINATE MORTGAGE) DOES HEREBY AGREE THAT, NOTWITHSTANDING ANYTHING
PROVIDED IN THE SUBORDINATE LOAN DOCUMENTS TO THE CONTRARY, BUT SUBJECT TO THE
TERMS OF THE LOCK BOX AGREEMENT, SO LONG AS THE SENIOR LOAN OBLIGATIONS AND
JUNIOR LOAN OBLIGATIONS REMAIN OUTSTANDING, UNLESS BOTH SENIOR LENDER AND JUNIOR
LENDER SHALL CONSENT IN WRITING:

 

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(I)            DEFAULT; NO PAYMENTS.  EXCEPT AS OTHERWISE PROVIDED IN THE LOCK
BOX AGREEMENT, NO PAYMENT SHALL BE MADE ON ACCOUNT OF THE SUBORDINATE LOAN
OBLIGATIONS AT ANY TIME WHEN A SENIOR DEFAULT IS EXISTING UNDER THE SENIOR LOAN
DOCUMENTS OR A JUNIOR DEFAULT IS EXISTING UNDER THE JUNIOR LOAN DOCUMENTS.

 

(II)           SUBORDINATE PERMITTED SCHEDULED PAYMENTS.  SO LONG AS NO SENIOR
DEFAULT IS EXISTING UNDER THE SENIOR LOAN DOCUMENTS AND NO JUNIOR DEFAULT IS
EXISTING UNDER THE JUNIOR LOAN DOCUMENTS, SUBORDINATE LENDER MAY COLLECT AND
RECEIVE SUBORDINATE PERMITTED SCHEDULED PAYMENTS ON ACCOUNT OF THE SUBORDINATE
LOAN OBLIGATIONS.  AS USED HEREIN, “SUBORDINATE PERMITTED SCHEDULED PAYMENTS”
SHALL MEAN THE PAYMENTS PERMITTED TO BE MADE WITH RESPECT TO SUBORDINATE LOAN
OBLIGATIONS PURSUANT TO SECTION 4.1 OF THE LOCK BOX AGREEMENT.

 

(III)          SUBORDINATE LENDER PAYMENTS HELD IN TRUST FOR SENIOR LENDER AND
JUNIOR LENDER.  IN THE EVENT THAT ANY PAYMENT IS MADE TO SUBORDINATE LENDER
WHICH IS NOT PERMITTED UNDER THIS AGREEMENT, SUCH PAYMENTS SHALL BE HELD BY
SUBORDINATE LENDER IN TRUST FOR THE BENEFIT OF FIRST, SENIOR LENDER AND SECOND,
JUNIOR LENDER, AND SHALL BE PAID FORTHWITH OVER AND DELIVERED: FIRST, TO SENIOR
LENDER FOR APPLICATION TO THE PAYMENT OF ALL OF THE SENIOR LOAN OBLIGATIONS
REMAINING UNPAID; AND SECOND, TO JUNIOR LENDER FOR APPLICATION TO THE PAYMENT OF
ALL JUNIOR LOAN OBLIGATIONS REMAINING UNPAID, SUBJECT TO THE TERMS OF THE LOCK
BOX AGREEMENT.

 

(B)           JUNIOR LENDER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS
(INCLUDING, WITHOUT LIMITATION, ALL SUBSEQUENT HOLDERS OF THE JUNIOR NOTE AND
THE JUNIOR MORTGAGE) BUT SUBJECT TO THE TERMS OF THE LOCK BOX AGREEMENT, DOES
HEREBY AGREE THAT, NOTWITHSTANDING ANYTHING PROVIDED IN THE JUNIOR LOAN
DOCUMENTS TO THE CONTRARY, SO LONG AS THE SENIOR LOAN OBLIGATIONS REMAIN
OUTSTANDING, UNLESS SENIOR LENDER SHALL CONSENT IN WRITING:

 

(I)            DEFAULT; NO PAYMENTS.  EXCEPT AS OTHERWISE PROVIDED IN THE LOCK
BOX AGREEMENT, NO PAYMENT SHALL BE MADE ON ACCOUNT OF THE JUNIOR LOAN
OBLIGATIONS AT ANY TIME WHEN A SENIOR DEFAULT IS EXISTING UNDER THE SENIOR LOAN
DOCUMENTS.

 

(II)           JUNIOR PERMITTED SCHEDULED PAYMENTS.  SO LONG AS NO SENIOR
DEFAULT IS EXISTING UNDER THE SENIOR LOAN DOCUMENTS, JUNIOR LENDER MAY COLLECT
AND RECEIVE JUNIOR PERMITTED SCHEDULED PAYMENTS ON ACCOUNT OF THE JUNIOR LOAN
OBLIGATIONS.  AS USED HEREIN, “JUNIOR PERMITTED SCHEDULED PAYMENTS” SHALL MEAN
THE PAYMENTS PERMITTED TO BE MADE WITH RESPECT TO THE JUNIOR LOAN OBLIGATIONS
PURSUANT TO SECTION 4.1 OF THE LOCK BOX AGREEMENT.

 

(III)          JUNIOR LENDER PAYMENTS HELD IN TRUST FOR SENIOR LENDER.  IN THE
EVENT THAT ANY PAYMENT IS MADE TO JUNIOR LENDER WHICH IS NOT PERMITTED UNDER
THIS AGREEMENT, SUCH PAYMENTS SHALL BE HELD BY JUNIOR LENDER IN TRUST FOR THE
BENEFIT OF SENIOR LENDER AND SHALL BE PAID FORTHWITH OVER AND DELIVERED TO
SENIOR LENDER FOR APPLICATION TO THE PAYMENT OF ALL OF THE SENIOR LOAN
OBLIGATIONS REMAINING UNPAID, SUBJECT TO THE TERMS OF THE LOCK BOX AGREEMENT.

 

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7.             DEFAULT UNDER SENIOR LOAN DOCUMENTS.

 

(A)           SENIOR DEFAULT NOTICE AND SENIOR ENFORCEMENT NOTICE.  PRIOR TO
COMMENCING ANY SENIOR LOAN ENFORCEMENT ACTION, SENIOR LENDER SHALL DELIVER TO
SUBORDINATE LENDER AND JUNIOR LENDER TWO (2) WRITTEN NOTICES, AS FOLLOWS: (I) A
COPY OF ANY WRITTEN NOTICE (THE “SENIOR DEFAULT NOTICE”) SENT BY SENIOR LENDER
TO BORROWER REGARDING THE OCCURRENCE OF A SENIOR DEFAULT, WHICH SHALL BE
DELIVERED TO JUNIOR LENDER AND SUBORDINATE LENDER SUBSTANTIALLY CONCURRENTLY
WITH THE DELIVERY OF SUCH SENIOR DEFAULT NOTICE TO BORROWER, AND (II) WRITTEN
NOTICE (THE “SENIOR ENFORCEMENT NOTICE”) THAT SENIOR LENDER INTENDS TO COMMENCE
A SENIOR LOAN ENFORCEMENT ACTION BY REASON OF SUCH SENIOR DEFAULT, WHICH SHALL
BE DELIVERED TO JUNIOR LENDER AND SUBORDINATE LENDER AT A TIME DETERMINED BY
SENIOR LENDER, BUT ONLY AFTER THE PERIOD ALLOWED FOR BORROWER TO CURE SUCH
SENIOR DEFAULT, IF ANY, IN THE SENIOR LOAN DOCUMENTS HAS EXPIRED.  SENIOR LENDER
SHALL FORBEAR FROM ACTUALLY COMMENCING SUCH SENIOR LOAN ENFORCEMENT ACTION UNTIL
THE LATER OF JUNIOR LENDER’S OUTSIDE DATE OR SUBORDINATE LENDER’S OUTSIDE DATE.

 

(B)           SENIOR MONETARY DEFAULT.  THE FOLLOWING PROVISIONS SET FORTH IN
THIS SECTION 7(B) SHALL BE APPLICABLE IF SENIOR LENDER SENDS A SENIOR
ENFORCEMENT NOTICE WITH RESPECT TO A SENIOR MONETARY DEFAULT:

 

(I)            UPON DELIVERY OF A SENIOR ENFORCEMENT NOTICE WITH RESPECT TO A
SENIOR MONETARY DEFAULT, JUNIOR LENDER SHALL, WITHIN FIVE (5) BUSINESS DAYS
AFTER SUCH DELIVERY, SEND WRITTEN NOTICE (THE “JL MONETARY DEFAULT ELECTION
NOTICE”) TO SENIOR LENDER AND SUBORDINATE LENDER THAT EITHER (A) JUNIOR LENDER
INTENDS TO CURE SUCH SENIOR MONETARY DEFAULT, IN WHICH EVENT THE JL MONETARY
DEFAULT ELECTION NOTICE TO SENIOR LENDER SHALL BE ACCOMPANIED BY PAYMENT TO THE
SENIOR LENDER OF IMMEDIATELY AVAILABLE FUNDS SUFFICIENT TO CURE THE SENIOR
MONETARY DEFAULT, OR (B) JUNIOR LENDER HAS ELECTED TO FIRST GIVE SUBORDINATE
LENDER THE RIGHT TO CURE SUCH SENIOR MONETARY DEFAULT.  IF JUNIOR LENDER FAILS
TO SEND A JL MONETARY ELECTION NOTICE WITHIN FIVE (5) BUSINESS DAYS AFTER
DELIVERY OF THE SENIOR ENFORCEMENT NOTICE, THEN JUNIOR LENDER SHALL BE DEEMED TO
HAVE ELECTED THE OPTION DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE.  IF
JUNIOR LENDER ELECTS (OR IS DEEMED TO HAVE ELECTED) TO FIRST GIVE SUBORDINATE
LENDER THE RIGHT TO CURE SUCH SENIOR MONETARY DEFAULT AND THEREAFTER SUBORDINATE
LENDER ELECTS (OR IS DEEMED TO HAVE ELECTED) NOT TO CURE THE SENIOR MONETARY
DEFAULT PURSUANT TO SECTION 7(B)(II) BELOW, THEN JUNIOR LENDER SHALL HAVE UNTIL
THE FIFTEENTH (15TH) BUSINESS DAY AFTER DELIVERY OF THE SENIOR ENFORCEMENT
NOTICE WITHIN WHICH TO CURE SUCH SENIOR MONETARY DEFAULT.

 

(II)           IF JUNIOR LENDER ELECTS (OR IS DEEMED TO HAVE ELECTED) TO FIRST
GIVE SUBORDINATE LENDER THE RIGHT TO CURE A SENIOR MONETARY DEFAULT PURSUANT TO
SECTION 7(B)(I) ABOVE, THEN SUBORDINATE LENDER SHALL HAVE FIVE (5) BUSINESS DAYS
AFTER DELIVERY OF THE JL MONETARY DEFAULT ELECTION NOTICE (OR, IF NO JL MONETARY
DEFAULT ELECTION NOTICE IS SENT, TEN (10) BUSINESS DAYS AFTER DELIVERY OF THE
SENIOR ENFORCEMENT NOTICE) TO SEND WRITTEN NOTICE (THE “SL MONETARY DEFAULT
RESPONSE NOTICE”) TO JUNIOR LENDER AND SENIOR LENDER STATING EITHER (A) THAT
SUBORDINATE LENDER HAS ELECTED TO CURE SUCH SENIOR MONETARY DEFAULT, IN WHICH

 

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EVENT THE SL MONETARY DEFAULT RESPONSE NOTICE TO SENIOR LENDER SHALL BE
ACCOMPANIED BY PAYMENT TO THE SENIOR LENDER OF IMMEDIATELY AVAILABLE FUNDS IN AN
AMOUNT SUFFICIENT TO CURE THE SENIOR MONETARY DEFAULT, OR (B) THAT SUBORDINATE
LENDER HAS ELECTED NOT TO CURE SUCH SENIOR MONETARY DEFAULT.  IF SUBORDINATE
LENDER FAILS TO SEND A SL MONETARY DEFAULT RESPONSE NOTICE WITHIN FIVE
(5) BUSINESS DAYS AFTER DELIVERY OF THE JL MONETARY DEFAULT ELECTION NOTICE (OR,
IF NO JL MONETARY DEFAULT ELECTION NOTICE IS SENT, WITHIN TEN (10) BUSINESS DAYS
AFTER DELIVERY OF THE SENIOR ENFORCEMENT NOTICE), THEN SUBORDINATE LENDER SHALL
BE DEEMED TO HAVE ELECTED THE OPTION DESCRIBED IN CLAUSE (B) OF THE PRECEDING
SENTENCE.  IF SUBORDINATE LENDER ELECTS (OR IS DEEMED TO HAVE ELECTED) NOT TO
CURE THE SENIOR MONETARY DEFAULT, THEN JUNIOR LENDER MAY ELECT TO CURE SAME
PURSUANT TO THE LAST SENTENCE IN SECTION 7(B)(I) ABOVE.  NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF SUBORDINATE LENDER ELECTS (OR IS
DEEMED TO HAVE ELECTED) NOT TO CURE THE SENIOR MONETARY DEFAULT, THEN
SUBORDINATE LENDER SHALL BE DEEMED TO HAVE WAIVED ANY RIGHT IT MAY HAVE TO CURE
SUCH SENIOR MONETARY DEFAULT.  IN SUCH EVENT, JUNIOR LENDER SHALL HAVE THE SOLE
RIGHT (BUT NOT THE OBLIGATION) TO CURE THE SENIOR MONETARY DEFAULT IN ACCORDANCE
WITH SECTION 7(B)(I) ABOVE AND NOT LATER THAN FIFTEEN (15) BUSINESS DAYS AFTER
DELIVERY OF THE SENIOR ENFORCEMENT NOTICE.

 

(C)           SENIOR NON-MONETARY DEFAULT.  THE FOLLOWING PROVISIONS SET FORTH
IN THIS SECTION 7(C) SHALL BE APPLICABLE IF SENIOR LENDER SENDS A SENIOR
ENFORCEMENT NOTICE WITH RESPECT TO A SENIOR NON-MONETARY DEFAULT:

 

(I)            UPON DELIVERY OF A SENIOR ENFORCEMENT NOTICE FROM SENIOR LENDER
PURSUANT TO SECTION 7(A)(II) WITH RESPECT TO A SENIOR NON-MONETARY DEFAULT,
JUNIOR LENDER SHALL, WITHIN TEN (10) DAYS AFTER SUCH DELIVERY, SEND WRITTEN
NOTICE (THE “JL NON-MONETARY DEFAULT ELECTION NOTICE”) TO SENIOR LENDER AND
SUBORDINATE LENDER THAT EITHER (A) JUNIOR LENDER WILL ATTEMPT TO CURE SUCH
SENIOR NON-MONETARY DEFAULT, IN WHICH EVENT JUNIOR LENDER SHALL BE ALLOWED
THIRTY (30) DAYS AFTER THE DATE OF THE SENIOR ENFORCEMENT NOTICE TO EFFECT SUCH
CURE, OR (B) JUNIOR LENDER HAS ELECTED TO FIRST GIVE SUBORDINATE LENDER THE
RIGHT TO CURE SUCH SENIOR NON-MONETARY DEFAULT.  IF JUNIOR LENDER FAILS TO SEND
A JL NON-MONETARY DEFAULT ELECTION NOTICE WITHIN TEN (10) DAYS AFTER DELIVERY OF
THE SENIOR ENFORCEMENT NOTICE, THEN JUNIOR LENDER SHALL BE DEEMED TO HAVE
ELECTED THE OPTION DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE.  IF JUNIOR
LENDER ELECTS (OR IS DEEMED TO HAVE ELECTED) TO FIRST GIVE SUBORDINATE LENDER
THE RIGHT TO CURE SUCH SENIOR NON-MONETARY DEFAULT AND THEREAFTER SUBORDINATE
LENDER ELECTS (OR IS DEEMED TO HAVE ELECTED) NOT TO CURE THE SENIOR NON-MONETARY
DEFAULT PURSUANT TO SECTION 7(C)(II) BELOW, THEN JUNIOR LENDER SHALL HAVE FORTY
(40) DAYS AFTER DELIVERY OF THE SENIOR ENFORCEMENT NOTICE WITHIN WHICH TO CURE
SUCH SENIOR NON-MONETARY DEFAULT.

 

(II)           IF JUNIOR LENDER ELECTS (OR IS DEEMED TO HAVE ELECTED) TO GIVE
SUBORDINATE LENDER THE RIGHT TO CURE A SENIOR NON-MONETARY DEFAULT PURSUANT TO
SECTION 7(C)(I) ABOVE, THEN SUBORDINATE LENDER SHALL HAVE TEN (10) DAYS AFTER
DELIVERY OF THE JL NON-MONETARY DEFAULT ELECTION NOTICE (OR, IF NO JL

 

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NON-MONETARY DEFAULT ELECTION NOTICE IS SENT, TWENTY (20) DAYS AFTER SUCH
DELIVERY OF THE SENIOR ENFORCEMENT NOTICE) TO SEND WRITTEN NOTICE (THE “SL
NON-MONETARY DEFAULT RESPONSE NOTICE”) TO JUNIOR LENDER AND SENIOR LENDER
STATING EITHER (A) THAT SUBORDINATE LENDER WILL ATTEMPT TO CURE SUCH SENIOR
NON-MONETARY DEFAULT, IN WHICH EVENT SUBORDINATE LENDER SHALL BE ALLOWED FORTY
(40) DAYS AFTER SUCH DELIVERY OF THE SENIOR ENFORCEMENT NOTICE TO EFFECT SUCH
CURE, OR (B) THAT SUBORDINATE LENDER HAS ELECTED NOT TO CURE SUCH SENIOR
NON-MONETARY DEFAULT.  IF SUBORDINATE LENDER FAILS TO SEND A SL NON-MONETARY
DEFAULT RESPONSE NOTICE WITHIN TEN (10) DAYS AFTER DELIVERY OF THE JL
NON-MONETARY DEFAULT ELECTION NOTICE (OR, IF NO JL NON-MONETARY DEFAULT ELECTION
NOTICE IS SENT, WITHIN TWENTY (20) DAYS AFTER DELIVERY OF THE SENIOR ENFORCEMENT
NOTICE), THEN SUBORDINATE LENDER SHALL BE DEEMED TO HAVE ELECTED THE OPTION
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE.  NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, IF SUBORDINATE LENDER ELECTS (OR IS DEEMED TO
HAVE ELECTED) NOT TO CURE THE SENIOR NON-MONETARY DEFAULT, THEN SUBORDINATE
LENDER SHALL BE DEEMED TO HAVE WAIVED ANY RIGHT IT MAY HAVE TO CURE SUCH SENIOR
NON-MONETARY DEFAULT.  IN SUCH EVENT, JUNIOR LENDER SHALL HAVE THE SOLE RIGHT
(BUT NOT THE OBLIGATION) TO CURE THE SENIOR NON-MONETARY DEFAULT IN ACCORDANCE
WITH SECTION 7(C)(I) ABOVE AND NOT LATER THAN FORTY (40) DAYS AFTER DELIVERY OF
THE SENIOR ENFORCEMENT NOTICE.

 

(III)          IF JUNIOR LENDER ELECTS IN ITS JL NON-MONETARY DEFAULT ELECTION
NOTICE TO ATTEMPT TO CURE THE SENIOR NON-MONETARY DEFAULT BUT FAILS TO CURE SAME
WITHIN THIRTY (30) DAYS AFTER DELIVERY OF THE SENIOR ENFORCEMENT NOTICE, THEN
SUBORDINATE LENDER SHALL HAVE UNTIL FORTY (40) DAYS AFTER THE DELIVERY OF THE
SENIOR ENFORCEMENT NOTICE WITHIN WHICH TO CURE SUCH SENIOR NON-MONETARY DEFAULT.

 

(IV)          IF SUBORDINATE LENDER ELECTS IN ITS SL NON-MONETARY DEFAULT
RESPONSE NOTICE TO ATTEMPT TO CURE THE SENIOR NON-MONETARY DEFAULT BUT FAILS TO
CURE SAME WITHIN FORTY (40) DAYS AFTER DELIVERY OF THE SENIOR ENFORCEMENT NOTICE
AS PROVIDED IN SECTION 7(C)(II) ABOVE, THEN JUNIOR LENDER SHALL HAVE UNTIL FIFTY
(50) DAYS AFTER DELIVERY OF THE SENIOR ENFORCEMENT NOTICE WITHIN WHICH TO CURE
SUCH SENIOR NON-MONETARY DEFAULT.

 

(D)           TERMINATION OF CURE PERIODS UPON BANKRUPTCY.  THE CURE PERIODS SET
FORTH IN THE FOREGOING PROVISIONS OF THIS SECTION 7 SHALL AUTOMATICALLY
TERMINATE UPON THE OCCURRENCE OF A BANKRUPTCY EVENT.

 

(E)           [RESERVED.]

 

(F)            [RESERVED.]

 

(G)           RIGHTS TO PURCHASE SENIOR AND JUNIOR LOANS.

 

(I)            AT ANY TIME FOLLOWING DELIVERY OF A SENIOR DEFAULT NOTICE AND
PRIOR TO THE DELIVERY BY SENIOR LENDER OF A SENIOR ENFORCEMENT NOTICE, EITHER
THE JUNIOR LENDER OR THE SUBORDINATE LENDER, AS APPLICABLE, MAY SEND WRITTEN
NOTICE

 

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(THE “LENDER PURCHASE NOTICE”) TO SENIOR LENDER AND JUNIOR LENDER AND/OR
SUBORDINATE LENDER, AS APPLICABLE, AS FOLLOWS: (A) IN THE CASE OF NOTICE BY
JUNIOR LENDER, NOTICE THAT JUNIOR LENDER INTENDS TO PURCHASE THE SENIOR LOAN AT
THE SENIOR LOAN PURCHASE PRICE, OR (B) IN THE CASE OF NOTICE BY SUBORDINATE
LENDER, NOTICE THAT SUBORDINATE LENDER INTENDS TO PURCHASE THE SENIOR LOAN AT
THE SENIOR LOAN PURCHASE PRICE AND THE JUNIOR LOAN AT THE JUNIOR LOAN PURCHASE
PRICE (IT BEING EXPRESSLY AGREED THAT SUBORDINATE LENDER MAY NOT PURCHASE THE
SENIOR LOAN UNLESS CONCURRENTLY THEREWITH SUBORDINATE LENDER ALSO PURCHASES THE
JUNIOR LOAN AT THE JUNIOR LOAN PURCHASE PRICE).  UPON DELIVERY OF A LENDER
PURCHASE NOTICE, THE LENDER DELIVERING SUCH NOTICE SHALL HAVE THE EXCLUSIVE
RIGHT TO PURCHASE THE SENIOR LOAN (OR THE SENIOR LOAN AND THE JUNIOR LOAN, IN
THE EVENT SUBORDINATE LENDER GIVES THE PURCHASE NOTICE) UNTIL THE PURCHASE
CLOSING DATE (AS HEREINAFTER DEFINED).

 

(II)           IF EITHER JUNIOR LENDER OR SUBORDINATE LENDER ELECTS IN WRITING
TO PURCHASE THE SENIOR LOAN (AND, IN THE CASE OF SUBORDINATE LENDER, THE JUNIOR
LOAN AS WELL) (THE “PURCHASE”), THE PURCHASE SHALL CLOSE ON A DATE SELECTED BY
JUNIOR LENDER OR SUBORDINATE LENDER, AS APPLICABLE, THAT IS NOT LATER THAN
THIRTY (30) DAYS AFTER THE DELIVERY OF THE LENDER PURCHASE NOTICE (THE “PURCHASE
CLOSING DATE”).  IF JUNIOR LENDER IS THE PURCHASER, CONCURRENTLY WITH PAYMENT TO
SENIOR LENDER OF THE SENIOR LOAN PURCHASE PRICE: (A) SENIOR LENDER SHALL DELIVER
OR CAUSE TO BE DELIVERED TO JUNIOR LENDER ALL SENIOR LOAN DOCUMENTS HELD BY OR
ON BEHALF OF SENIOR LENDER, AND (B) SENIOR LENDER SHALL EXECUTE IN FAVOR OF
JUNIOR LENDER (OR ITS DESIGNEE) ASSIGNMENT DOCUMENTATION, IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO JUNIOR LENDER, ASSIGNING THE SENIOR LOAN AND ITS RIGHTS
UNDER THE SENIOR LOAN DOCUMENTS (WITHOUT RECOURSE, REPRESENTATIONS OR
WARRANTIES, EXCEPT FOR REPRESENTATIONS AS TO THE OUTSTANDING BALANCE OF THE
SENIOR LOAN AND AS TO SENIOR LENDER’S NOT HAVING ASSIGNED OR ENCUMBERED ITS
RIGHTS IN THE SENIOR LOAN).  UPON CONSUMMATION OF THE PURCHASE BY JUNIOR LENDER,
JUNIOR LENDER SHALL BE SUBROGATED TO THE RIGHTS OF SENIOR LENDER UNDER THE
SENIOR LOAN DOCUMENTS.  IF SUBORDINATE LENDER IS THE PURCHASER, CONCURRENTLY
WITH PAYMENT TO THE SENIOR LENDER OF THE SENIOR LOAN PURCHASE PRICE AND TO THE
JUNIOR LENDER OF THE JUNIOR LOAN PURCHASE PRICE: (1) SENIOR LENDER SHALL DELIVER
OR CAUSE TO BE DELIVERED TO SUBORDINATE LENDER ALL SENIOR LOAN DOCUMENTS HELD BY
OR ON BEHALF OF SENIOR LENDER; (2) SENIOR LENDER SHALL EXECUTE IN FAVOR OF
SUBORDINATE LENDER (OR ITS DESIGNEE) ASSIGNMENT DOCUMENTATION, IN FORM AND
SUBSTANCE REASONABLY ACCEPTABLE TO SUBORDINATE LENDER, ASSIGNING THE SENIOR LOAN
AND ITS RIGHTS UNDER THE SENIOR LOAN DOCUMENTS (WITHOUT RECOURSE,
REPRESENTATIONS OR WARRANTIES, EXCEPT FOR REPRESENTATIONS AS TO THE OUTSTANDING
BALANCE OF THE SENIOR LOAN AND AS TO SENIOR LENDER’S NOT HAVING ASSIGNED OR
ENCUMBERED ITS RIGHTS IN THE SENIOR LOAN); (3) JUNIOR LENDER SHALL DELIVER OR
CAUSE TO BE DELIVERED TO SUBORDINATE LENDER ALL JUNIOR LOAN DOCUMENTS HELD BY OR
ON BEHALF OF JUNIOR LENDER; AND (4) JUNIOR LENDER WILL EXECUTE IN FAVOR OF
SUBORDINATE LENDER (OR ITS DESIGNEE) ASSIGNMENT DOCUMENTATION, IN FORM AND
SUBSTANCE REASONABLY ACCEPTABLE TO SUBORDINATE LENDER, ASSIGNING THE JUNIOR LOAN
AND ITS RIGHTS UNDER THE JUNIOR LOAN DOCUMENTS (WITHOUT RECOURSE,
REPRESENTATIONS OR WARRANTIES, EXCEPT FOR REPRESENTATIONS AS TO THE OUTSTANDING
BALANCE OF THE JUNIOR LOAN AND AS TO JUNIOR

 

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LENDER’S NOT HAVING ASSIGNED OR ENCUMBERED ITS RIGHTS IN THE JUNIOR LOAN).  UPON
CONSUMMATION OF THE PURCHASE BY SUBORDINATE LENDER, SUBORDINATE LENDER SHALL BE
SUBROGATED TO THE RIGHTS OF SENIOR LENDER UNDER THE SENIOR LOAN DOCUMENTS AND
THE JUNIOR LENDER UNDER THE JUNIOR LOAN DOCUMENTS.  IF A LENDER PURCHASE NOTICE
IS SENT PURSUANT TO SECTION 7.1(G)(I) AND THIS SECTION 7.1(G)(II), SENIOR LENDER
SHALL FORBEAR FROM SENDING A SENIOR ENFORCEMENT NOTICE UNTIL SUCH TIME AS THE
PURCHASE CLOSING DATE HAS PASSED WITHOUT THE CONTEMPLATED SALE AND PURCHASE OF
THE SENIOR LOAN (OR BOTH THE SENIOR LOAN AND THE JUNIOR LOAN IF THE LENDER
PURCHASE NOTICE WAS SENT BY SUBORDINATE LENDER) HAVING OCCURRED.

 

(III)          JUNIOR LENDER SHALL ALSO HAVE THE OPTION TO CONSUMMATE A PURCHASE
OF THE SENIOR LOAN FOR THE SENIOR LOAN PURCHASE PRICE, AND SUBORDINATE LENDER
SHALL ALSO HAVE THE OPTION TO CONSUMMATE A PURCHASE OF THE SENIOR LOAN FOR THE
SENIOR LOAN PURCHASE PRICE AND OF THE JUNIOR LOAN FOR THE JUNIOR LOAN PURCHASE
PRICE, AT ANY TIME DURING THE PERIOD BEGINNING ON THE DATE OF ACCELERATION OF
THE SENIOR LOAN AND ENDING ON THE DATE PRIOR TO THE DATE A FORECLOSURE OR
TRUSTEE’S SALE (OR DEED IN LIEU OF FORECLOSURE) IS CONDUCTED OR CONSUMMATED IN
RESPECT OF THE SENIOR LOAN.  JUNIOR LENDER MAY EXERCISE SUCH OPTION BY SENDING
WRITTEN NOTICE OF SUCH EXERCISE TO SENIOR LENDER TOGETHER WITH THE DEPOSIT OF
IMMEDIATELY AVAILABLE FUNDS IN THE AMOUNT OF THE SENIOR LOAN PURCHASE PRICE WITH
AN ESCROW AGENT REASONABLY SATISFACTORY TO THE SENIOR LENDER, AND IN SUCH EVENT
JUNIOR LENDER SHALL PURCHASE THE SENIOR LOAN FOR THE SENIOR LOAN PURCHASE PRICE
WITHIN TEN (10) BUSINESS DAYS AFTER SUCH NOTICE IS DELIVERED (BUT IN ANY EVENT
PRIOR TO THE SCHEDULED DATE OF SUCH FORECLOSURE OR TRUSTEE’S SALE (OR DEED IN
LIEU OF FORECLOSURE)).  CONCURRENTLY WITH PAYMENT TO SENIOR LENDER OF THE SENIOR
LOAN PURCHASE PRICE: (A) SENIOR LENDER SHALL DELIVER OR CAUSE TO BE DELIVERED TO
JUNIOR LENDER ALL SENIOR LOAN DOCUMENTS HELD BY OR ON BEHALF OF SENIOR LENDER,
AND (B) SENIOR LENDER SHALL EXECUTE IN FAVOR OF JUNIOR LENDER (OR ITS DESIGNEE)
ASSIGNMENT DOCUMENTATION, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO JUNIOR
LENDER, ASSIGNING THE SENIOR LOAN AND ITS RIGHTS UNDER THE SENIOR LOAN DOCUMENTS
(WITHOUT RECOURSE, REPRESENTATIONS OR WARRANTIES, EXCEPT FOR REPRESENTATIONS AS
TO THE OUTSTANDING BALANCE OF THE SENIOR LOAN AND AS TO SENIOR LENDER’S NOT
HAVING ASSIGNED OR ENCUMBERED ITS RIGHTS IN THE SENIOR LOAN).  UPON CONSUMMATION
OF THE PURCHASE, JUNIOR LENDER SHALL BE SUBROGATED TO THE RIGHTS OF SENIOR
LENDER UNDER THE SENIOR LOAN DOCUMENTS.

 

Subordinate Lender may exercise the option referred to in the preceding
paragraph of this clause (iii) by sending written notice of such exercise to
Senior Lender and Junior Lender, together with the deposit of immediately
available funds in the amount of the Senior Loan Purchase Price and Junior
Lender Purchase Price with an escrow agent reasonably satisfactory to the Senior
Lender and Junior Lender, and in such event Subordinate Lender shall purchase
the Senior Loan for the Senior Loan Purchase Price and the Junior Loan for the
Junior Loan Purchase Price within ten (10) Business Days after such notice is
delivered (but in any event prior to the scheduled date of such foreclosure or
trustee’s sale (or deed in lieu of foreclosure)).  Concurrently with payment to
Senior Lender of the Senior Loan Purchase Price and to Junior Lender of the
Junior Loan Purchase

 

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Price: (A) Senior Lender and Junior Lender shall deliver or cause to be
delivered to Subordinate Lender all Senior Loan Documents held by or on behalf
of Senior Lender and Junior Lender, and (B) Senior Lender and Junior Lender
shall execute in favor of Subordinate Lender (or its designee) assignment
documentation, in form and substance reasonably acceptable to Subordinate
Lender, assigning the Senior Loan and its rights under the Senior Loan Documents
and the Junior Loan and its rights under the Junior Loan Documents (without
recourse, representations or warranties, except for representations as to the
outstanding balance of the Senior Loan and the Junior Loan, respectively, and as
to Senior Lender’s or Junior Lender’s as appropriate not having assigned or
encumbered its rights in the relevant Loan).  Upon consummation of the Purchase,
Subordinate Lender shall be subrogated to the rights of Senior Lender under the
Senior Loan Documents and Junior Lender under the Junior Loan Documents.

 

(IV)          NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, UPON DELIVERY OF
A SENIOR ENFORCEMENT NOTICE BY SENIOR LENDER TO SUBORDINATE LENDER, SUBORDINATE
LENDER SHALL HAVE TEN (10) DAYS DURING WHICH IT SHALL HAVE THE EXCLUSIVE RIGHT
TO PROVIDE TO THE SENIOR LENDER AND THE JUNIOR LENDER A LENDER PURCHASE NOTICE. 
IF SUBORDINATE LENDER FAILS TO PROVIDE SUCH LENDER PURCHASE NOTICE WITHIN SUCH
TEN (10) DAY PERIOD, SUBORDINATE LENDER SHALL HAVE NO FURTHER RIGHT TO PROVIDE A
LENDER PURCHASE NOTICE WITH RESPECT TO SUCH SENIOR ENFORCEMENT NOTICE EXCEPT AS
PROVIDED IN SECTION 7(G)(III) ABOVE.  AT THE EXPIRATION OF SUCH TEN (10) DAY
PERIOD, SUBJECT TO CLAUSE (III), JUNIOR LENDER SHALL HAVE AN ADDITIONAL TEN
(10) DAY PERIOD WITHIN WHICH TO PROVIDE A LENDER PURCHASE NOTICE.  THEREAFTER,
NEITHER SUBORDINATE LENDER NOR JUNIOR LENDER SHALL HAVE ANY RIGHT TO PROVIDE A
LENDER PURCHASE NOTICE IN CONNECTION WITH THE APPLICABLE SENIOR ENFORCEMENT
NOTICE (EXCEPT AS PROVIDED IN SECTION 7(G)(III) ABOVE).

 

(V)           UPON DELIVERY OF A LENDER PURCHASE NOTICE, THE LENDER DELIVERING
SUCH NOTICE SHALL HAVE THE EXCLUSIVE RIGHT TO PURCHASE THE SENIOR LOAN (AND THE
JUNIOR LOAN, IF APPLICABLE) UNTIL THE PURCHASE CLOSING DATE.

 

(H)           FAILURE TO CURE SENIOR DEFAULT OR PURCHASE SENIOR LOAN.  IF
(I) JUNIOR LENDER FAILS TO EITHER CURE THE SENIOR DEFAULT THAT WAS THE SUBJECT
OF THE SENIOR ENFORCEMENT NOTICE OR TO PURCHASE THE SENIOR LOAN PRIOR TO THE
PURCHASE CLOSING DATE, IF ANY, AND (II) SUBORDINATE LENDER FAILS TO EITHER CURE
THE SENIOR DEFAULT THAT WAS THE SUBJECT OF THE SENIOR ENFORCEMENT NOTICE OR TO
PURCHASE THE SENIOR LOAN AND THE JUNIOR LOAN PRIOR TO THE PURCHASE CLOSING DATE,
IF ANY, THEN SENIOR LENDER SHALL, IN ADDITION TO THE RIGHT TO TAKE A SENIOR LOAN
ENFORCEMENT ACTION, HAVE THE RIGHT TO AMEND, MODIFY, RESTRUCTURE OR EXTEND THE
SENIOR MORTGAGE OR ANY OTHER SENIOR LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION
ANY AND ALL SPECIAL MODIFICATION TERMS OF SENIOR LOAN DOCUMENTS) WITHOUT NOTICE
TO OR THE CONSENT OF JUNIOR LENDER AND SUBORDINATE LENDER.  IN SUCH EVENT, THE
JUNIOR LOAN, THE JUNIOR MORTGAGE AND THE OTHER JUNIOR LOAN DOCUMENTS AND THE
SUBORDINATE LOAN, THE SUBORDINATE MORTGAGE AND THE OTHER SUBORDINATE LOAN
DOCUMENTS AND ALL INDEBTEDNESS, OBLIGATIONS, LIENS AND SECURITY INTERESTS
EVIDENCED OR SECURED THEREBY OR FROM TIME TO TIME OUTSTANDING THEREUNDER SHALL
CONTINUE TO BE JUNIOR, SUBJECT, AND SUBORDINATE IN ALL RESPECTS TO THE SENIOR
LOAN, THE

 

24

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SENIOR MORTGAGE AND THE SENIOR LOAN DOCUMENTS, AS SO AMENDED, MODIFIED,
EXTENDED, OR RESTRUCTURED (INCLUDING WITHOUT LIMITATION ANY AND ALL SPECIAL
MODIFICATION TERMS OF SENIOR LOAN DOCUMENTS); PROVIDED, HOWEVER, THAT IN NO
EVENT SHALL THE PRINCIPAL AMOUNT OF THE SENIOR LOAN BE INCREASED EXCEPT BY
REASON OF PROTECTIVE ADVANCES.  THIRD PARTIES INCLUDING TITLE INSURANCE
COMPANIES INSURING THE PRIORITY OF THE SENIOR MORTGAGE ARE HEREBY AUTHORIZED TO
RELY ON THIS PROVISION AS TO THE PRIORITY OF THE SENIOR LOAN DOCUMENTS, AS SO
AMENDED, MODIFIED, EXTENDED OR RESTRUCTURED, WITHOUT ANY REQUIREMENT TO CONFIRM
SUCH SENIOR POSITION FROM JUNIOR LENDER OR THE SUBORDINATE LENDER.

 

8.             DEFAULT UNDER JUNIOR LOAN DOCUMENTS.

 

(A)           JUNIOR DEFAULT NOTICE AND JUNIOR ENFORCEMENT NOTICE.  PRIOR TO
COMMENCING ANY JUNIOR LOAN ENFORCEMENT ACTION, SUBJECT TO SECTION 9(A) HEREOF,
JUNIOR LENDER SHALL PROVIDE SENIOR LENDER AND SUBORDINATE LENDER WITH TWO
(2) WRITTEN NOTICES, AS FOLLOWS: (I) A COPY OF ANY WRITTEN NOTICE (THE “JUNIOR
DEFAULT NOTICE”) SENT BY JUNIOR LENDER TO BORROWER REGARDING THE OCCURRENCE OF A
JUNIOR DEFAULT, WHICH SHALL BE DELIVERED TO SENIOR LENDER AND JUNIOR LENDER
SUBSTANTIALLY CONCURRENTLY WITH THE DELIVERY OF SUCH JUNIOR DEFAULT NOTICE TO
BORROWER, AND (II) WRITTEN NOTICE (THE “JUNIOR ENFORCEMENT NOTICE”) THAT,
SUBJECT TO SECTION 9(A) HEREOF, JUNIOR LENDER INTENDS TO COMMENCE A JUNIOR LOAN
ENFORCEMENT ACTION BY REASON OF SUCH JUNIOR DEFAULT, WHICH SHALL BE DELIVERED TO
SENIOR LENDER AND SUBORDINATE LENDER AT A TIME DETERMINED BY JUNIOR LENDER, BUT
ONLY AFTER THE PERIOD ALLOWED FOR BORROWER TO CURE SUCH JUNIOR DEFAULT IN THE
JUNIOR LOAN DOCUMENTS HAS EXPIRED.  JUNIOR LENDER SHALL FORBEAR FROM ACTUALLY
COMMENCING SUCH JUNIOR LOAN ENFORCEMENT ACTION UNTIL SUBORDINATE LENDER’S
OUTSIDE JUNIOR LOAN DATE, PROVIDED THAT ANY JUNIOR LOAN ENFORCEMENT ACTION IS
SUBJECT TO SECTION 9(A) HEREOF.

 

(B)           JUNIOR MONETARY DEFAULT.  UPON RECEIPT OF A JUNIOR ENFORCEMENT
NOTICE WITH RESPECT TO A JUNIOR MONETARY DEFAULT, SUBORDINATE LENDER SHALL HAVE
A PERIOD OF FIVE (5) BUSINESS DAYS AFTER SUCH RECEIPT WITHIN WHICH SUBORDINATE
LENDER MAY (BUT SHALL NOT BE OBLIGATED TO) CURE SUCH JUNIOR MONETARY DEFAULT BY
MAKING PAYMENT TO JUNIOR LENDER IN IMMEDIATELY AVAILABLE FUNDS SUFFICIENT TO
CURE THE JUNIOR MONETARY DEFAULT.

 

(C)           JUNIOR NON-MONETARY DEFAULT.  UPON RECEIPT OF A JUNIOR ENFORCEMENT
NOTICE WITH RESPECT TO A JUNIOR NON-MONETARY DEFAULT, SUBORDINATE LENDER SHALL,
WITHIN 10 BUSINESS DAYS AFTER SUCH RECEIPT, SEND WRITTEN NOTICE (THE
“SUBORDINATE NON-MONETARY DEFAULT ELECTION NOTICE”) TO SENIOR LENDER AND JUNIOR
LENDER THAT EITHER (I) SUBORDINATE LENDER WILL ATTEMPT TO CURE SUCH JUNIOR
NON-MONETARY DEFAULT, IN WHICH EVENT SUBORDINATE LENDER SHALL BE ALLOWED THIRTY
(30) DAYS AFTER SUCH SUBORDINATE NON-MONETARY DEFAULT ELECTION NOTICE TO EFFECT
SUCH CURE, OR (II) SUBORDINATE LENDER HAS ELECTED NOT TO CURE SUCH JUNIOR
NON-MONETARY DEFAULT.  IF SUBORDINATE LENDER FAILS TO SEND A SUBORDINATE
NON-MONETARY DEFAULT ELECTION NOTICE WITHIN 10 BUSINESS DAYS AFTER DELIVERY OF
THE JUNIOR ENFORCEMENT NOTICE, THEN SUBORDINATE LENDER SHALL BE DEEMED TO HAVE
ELECTED THE OPTION DESCRIBED IN CLAUSE (II) OF THE PRECEDING SENTENCE.

 

25

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(D)           TERMINATION OF CURE PERIODS UPON BANKRUPTCY.  THE CURE PERIODS SET
FORTH IN THE FOREGOING PROVISIONS OF THIS SECTION 8 SHALL AUTOMATICALLY
TERMINATE UPON THE OCCURRENCE OF A BANKRUPTCY EVENT.

 

(E)           SUBORDINATE LENDER’S RIGHT TO PURCHASE JUNIOR LOAN.

 

(I)            UPON RECEIPT OF A JUNIOR ENFORCEMENT NOTICE, SUBORDINATE LENDER
MAY, WITHIN TEN (10) BUSINESS DAYS AFTER SUCH RECEIPT, SEND WRITTEN NOTICE (THE
“SUBORDINATE PURCHASE NOTICE”) TO JUNIOR LENDER AND SENIOR LENDER THAT
SUBORDINATE LENDER INTENDS TO PURCHASE THE JUNIOR LOAN AT THE JUNIOR LOAN
PURCHASE PRICE.  IF SUBORDINATE LENDER FAILS TO SEND THE SUBORDINATE PURCHASE
NOTICE WITHIN SUCH TEN (10) BUSINESS DAY PERIOD, SUBORDINATE LENDER SHALL BE
DEEMED TO HAVE WAIVED ITS RIGHT TO PURCHASE THE JUNIOR LOAN IN CONNECTION WITH
SUCH JUNIOR ENFORCEMENT NOTICE.

 

(II)           IF SUBORDINATE LENDER ELECTS IN WRITING TO PURCHASE THE JUNIOR
LOAN (THE “JUNIOR PURCHASE”), THE JUNIOR PURCHASE SHALL CLOSE ON A DATE SELECTED
BY SUBORDINATE LENDER THAT IS NOT LATER THAN FORTY (40) DAYS AFTER THE DELIVERY
OF A COPY OF THE JUNIOR ENFORCEMENT NOTICE TO SUBORDINATE LENDER (THE “JUNIOR
PURCHASE CLOSING DATE”).  ON THE JUNIOR PURCHASE CLOSING DATE, SUBORDINATE
LENDER SHALL PAY THE JUNIOR LOAN PURCHASE PRICE TO JUNIOR LENDER AND
CONCURRENTLY THEREWITH: (A) JUNIOR LENDER SHALL DELIVER OR CAUSE TO BE DELIVERED
TO SUBORDINATE LENDER ALL JUNIOR LOAN DOCUMENTS HELD BY OR ON BEHALF OF JUNIOR
LENDER, AND (B) JUNIOR LENDER SHALL EXECUTE IN FAVOR OF SUBORDINATE LENDER (OR
ITS DESIGNEE) ASSIGNMENT DOCUMENTATION, IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO SUBORDINATE LENDER, ASSIGNING THE JUNIOR LOAN AND ITS RIGHTS UNDER
THE JUNIOR LOAN DOCUMENTS (WITHOUT RECOURSE, REPRESENTATIONS OR WARRANTIES,
EXCEPT FOR REPRESENTATIONS AS TO THE OUTSTANDING BALANCE OF THE JUNIOR LOAN AND
AS TO JUNIOR LENDER’S NOT HAVING ASSIGNED OR ENCUMBERED ITS RIGHTS IN THE JUNIOR
LOAN).  UPON CONSUMMATION OF THE JUNIOR PURCHASE, SUBORDINATE LENDER SHALL BE
SUBROGATED TO THE RIGHTS OF JUNIOR LENDER UNDER THE JUNIOR LOAN DOCUMENTS.

 

(F)            FAILURE TO CURE JUNIOR DEFAULT.  IF SUBORDINATE LENDER FAILS TO
CURE THE JUNIOR DEFAULT THAT WAS THE SUBJECT OF THE JUNIOR ENFORCEMENT NOTICE OR
TO PURCHASE THE JUNIOR LOAN PRIOR TO SUBORDINATE LENDER’S JUNIOR OUTSIDE DATE,
THEN JUNIOR LENDER SHALL HAVE THE RIGHT, SUBJECT TO SECTION 9(A) HEREOF, TO
AMEND, MODIFY, RESTRUCTURE OR EXTEND THE JUNIOR MORTGAGE OR ANY OTHER JUNIOR
LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY AND ALL SPECIAL MODIFICATION
TERMS OF JUNIOR LOAN DOCUMENTS) WITHOUT NOTICE TO OR THE CONSENT OF SUBORDINATE
LENDER BUT WITH THE CONSENT OF THE SENIOR LENDER IF REQUIRED PURSUANT TO
SECTION 10(B) HEREOF.  IN SUCH EVENT, THE SUBORDINATE LOAN, THE SUBORDINATE
MORTGAGE AND THE OTHER SUBORDINATE LOAN DOCUMENTS AND ALL INDEBTEDNESS,
OBLIGATIONS, LIENS AND SECURITY INTERESTS EVIDENCED OR SECURED THEREBY OR FROM
TIME TO TIME OUTSTANDING THEREUNDER SHALL CONTINUE TO BE JUNIOR, SUBJECT, AND
SUBORDINATE IN ALL RESPECTS TO THE JUNIOR LOAN, THE JUNIOR MORTGAGE AND THE
JUNIOR LOAN DOCUMENTS, AS SO AMENDED, MODIFIED, EXTENDED, OR RESTRUCTURED
(INCLUDING WITHOUT LIMITATION ANY AND ALL SPECIAL MODIFICATION TERMS OF JUNIOR
LOAN DOCUMENTS).  THIRD PARTIES INCLUDING TITLE INSURANCE COMPANIES INSURING THE
PRIORITY OF THE JUNIOR MORTGAGE ARE HEREBY AUTHORIZED TO RELY ON

 

26

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THIS PROVISION AS TO THE PRIORITY OF THE JUNIOR LOAN DOCUMENTS, AS SO AMENDED,
MODIFIED, EXTENDED OR RESTRUCTURED, WITHOUT ANY REQUIREMENT TO CONFIRM SUCH
SENIOR POSITION FROM SUBORDINATE LENDER.

 

(G)           DURING SUCH TIME AS THE SENIOR LOAN OBLIGATIONS HAVE BEEN
SATISFIED IN WHOLE, THE JUNIOR LENDER SHALL BE CONSIDERED THE SENIOR LENDER FOR
PURPOSES HEREOF, AND THE SUBORDINATE LENDER SHALL BE CONSIDERED THE JUNIOR
LENDER, AND THE PROVISIONS HEREOF SHALL CONTINUE TO APPLY AS THOUGH THE JUNIOR
LOAN WERE THE SENIOR LOAN AND THE SUBORDINATE LOAN THE JUNIOR LOAN.

 

9.             RESTRICTIONS ON ENFORCEMENT BY JUNIOR LENDER AND SUBORDINATE
LENDER.

 

(A)           JUNIOR LENDER.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY, SO LONG AS ANY OF THE SENIOR LOAN OBLIGATIONS REMAIN OUTSTANDING,
JUNIOR LENDER MUST OBTAIN THE PRIOR WRITTEN CONSENT OF THE SENIOR LENDER PRIOR
TO COMMENCING ANY JUNIOR LOAN ENFORCEMENT ACTION.

 

(B)           SUBORDINATE LENDER.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO
THE CONTRARY, SO LONG AS ANY OF THE SENIOR LOAN OBLIGATIONS OR JUNIOR LOAN
OBLIGATIONS REMAIN OUTSTANDING, SUBORDINATE LENDER SHALL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF BOTH SENIOR LENDER AND JUNIOR LENDER, COMMENCE ANY
SUBORDINATE LOAN ENFORCEMENT ACTION.

 

10.           MODIFICATION OF LOAN DOCUMENTS.

 

(A)           EXCEPT AS OTHERWISE PROVIDED IN SECTION 7(H), SENIOR LENDER SHALL
NOT MODIFY ANY OF THE SPECIAL MODIFICATION TERMS OF THE SENIOR LOAN DOCUMENTS
WITHOUT THE PRIOR WRITTEN APPROVAL OF SUBORDINATE LENDER AND JUNIOR LENDER
(WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED). 
SUBORDINATE LENDER AND JUNIOR LENDER SHALL APPROVE OR DISAPPROVE ANY PROPOSED
SPECIAL MODIFICATION TERMS OF SENIOR LOAN DOCUMENTS WITHIN TEN (10) BUSINESS
DAYS AFTER DELIVERY OF WRITTEN NOTICE OF SUCH TERMS, AND SUCH APPROVAL SHALL BE
DEEMED DENIED IF SUBORDINATE LENDER AND JUNIOR LENDER SHALL FAIL TO APPROVE ANY
PROPOSED SPECIAL MODIFICATION TERMS OF SENIOR LOAN DOCUMENTS WITHIN TEN
(10) BUSINESS DAYS AFTER DELIVERY OF WRITTEN NOTICE OF SUCH TERMS.  SENIOR
LENDER SHALL HAVE THE RIGHT, WITHOUT THE CONSENT OF JUNIOR LENDER OR SUBORDINATE
LENDER IN EACH INSTANCE, TO ENTER INTO ANY AMENDMENT, DEFERRAL, EXTENSION,
MODIFICATION, RENEWAL, REPLACEMENT, CONSOLIDATION, SUPPLEMENT OR WAIVER OF THE
SENIOR LOAN OR THE SENIOR LOAN DOCUMENTS WHICH IS NOT A SPECIAL MODIFICATION
TERM OF SENIOR LOAN DOCUMENTS.

 

(B)           JUNIOR LENDER SHALL NOT MODIFY ANY OF THE SPECIAL MODIFICATION
TERMS OF JUNIOR LOAN DOCUMENTS WITHOUT THE PRIOR WRITTEN APPROVAL OF SUBORDINATE
LENDER (EXCEPT AS OTHERWISE PROVIDED IN SECTION 8(F)) AND SENIOR LENDER (WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED). 
SUBORDINATE LENDER AND SENIOR LENDER SHALL APPROVE OR DISAPPROVE ANY PROPOSED
SPECIAL MODIFICATION TERMS OF JUNIOR LOAN DOCUMENTS WITHIN TEN (10) BUSINESS
DAYS AFTER DELIVERY OF WRITTEN NOTICE OF SUCH TERMS, AND SUCH APPROVAL SHALL BE
DEEMED DENIED IF SUBORDINATE LENDER AND SENIOR LENDER SHALL

 

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FAIL TO APPROVE ANY PROPOSED SPECIAL MODIFICATION TERMS OF JUNIOR LOAN DOCUMENTS
WITHIN TEN (10) BUSINESS DAYS AFTER DELIVERY OF WRITTEN NOTICE OF SUCH TERMS. 
SUBJECT TO SECTION 9(A), JUNIOR LENDER SHALL HAVE THE RIGHT, WITHOUT THE CONSENT
OF SENIOR LENDER OR SUBORDINATE LENDER IN EACH INSTANCE, TO ENTER INTO ANY
AMENDMENT, DEFERRAL, EXTENSION, MODIFICATION, RENEWAL, REPLACEMENT,
CONSOLIDATION, SUPPLEMENT OR WAIVER OF THE JUNIOR LOAN OR THE JUNIOR LOAN
DOCUMENTS WHICH IS NOT A SPECIAL MODIFICATION TERM OF JUNIOR LOAN DOCUMENTS.

 

(C)           SUBORDINATE LENDER SHALL NOT MODIFY ANY OF THE SPECIAL
MODIFICATION TERMS OF SUBORDINATE LOAN DOCUMENTS WITHOUT THE PRIOR WRITTEN
APPROVAL OF JUNIOR LENDER AND SENIOR LENDER (WHICH APPROVAL SHALL NOT BE
UNREASONABLY WITHHELD, CONDITIONED OR DELAYED).  JUNIOR LENDER AND SENIOR LENDER
SHALL APPROVE OR DISAPPROVE ANY PROPOSED SPECIAL MODIFICATION TERMS OF
SUBORDINATE LOAN DOCUMENTS WITHIN TEN (10) BUSINESS DAYS AFTER DELIVERY OF
WRITTEN NOTICE OF SUCH TERMS, AND SUCH APPROVAL SHALL BE DEEMED DENIED IF JUNIOR
LENDER AND SENIOR LENDER SHALL FAIL TO APPROVE ANY PROPOSED SPECIAL MODIFICATION
TERMS OF SUBORDINATE LOAN DOCUMENTS WITHIN TEN (10) BUSINESS DAYS AFTER DELIVERY
OF WRITTEN NOTICE OF SUCH TERMS.  SUBJECT TO SECTION 9(B), SUBORDINATE LENDER
SHALL HAVE THE RIGHT, WITHOUT THE CONSENT OF SENIOR LENDER OR JUNIOR LENDER IN
EACH INSTANCE, TO ENTER INTO ANY AMENDMENT, DEFERRAL, EXTENSION, MODIFICATION,
RENEWAL, REPLACEMENT, CONSOLIDATION, SUPPLEMENT OR WAIVER OF THE SUBORDINATE
LOAN OR THE SUBORDINATE LOAN DOCUMENTS WHICH IS NOT A SPECIAL MODIFICATION TERM
OF SUBORDINATE LOAN DOCUMENTS.

 

(D)           NOTWITHSTANDING THE FOREGOING PROVISIONS, ANY AMOUNTS FUNDED BY
THE SENIOR LENDER UNDER THE SENIOR LOAN DOCUMENTS, THE JUNIOR LENDER UNDER THE
JUNIOR LOAN DOCUMENTS OR THE SUBORDINATE LENDER UNDER THE SUBORDINATE LOAN
DOCUMENTS AS A RESULT OF (I) THE MAKING OF ANY PROTECTIVE ADVANCES OR OTHER
ADVANCES BY THE SENIOR LENDER, JUNIOR LENDER OR THE SUBORDINATE LENDER, OR
(II) INTEREST ACCRUALS OR ACCRETIONS AND ANY COMPOUNDING THEREOF (INCLUDING
DEFAULT INTEREST), SHALL NOT BE DEEMED TO CONTRAVENE THIS SECTION 10, NOR WILL
THE ACT OF ENTERING INTO A SWAP CONTRACT.

 

11.           FREEDOM OF ACTION.

 

(A)           EACH OF SUBORDINATE LENDER AND JUNIOR LENDER AGREES THAT SENIOR
LENDER MAY AT ANY TIME AND FROM TIME TO TIME, WITHOUT THE CONSENT OF SUBORDINATE
LENDER OR JUNIOR LENDER, AND WITHOUT AFFECTING THE SUBORDINATION AND OTHER
AGREEMENTS HEREIN MADE BY SUBORDINATE LENDER OR JUNIOR LENDER, ENTER INTO ANY
AMENDMENT, DEFERRAL, EXTENSION, MODIFICATION, INCREASE, RENEWAL, REPLACEMENT,
CONSOLIDATION, SUPPLEMENT OR WAIVER OF THE SENIOR LOAN OR THE SENIOR LOAN
DOCUMENTS OR ENTER INTO A SWAP CONTRACT (SUBJECT, HOWEVER, TO THE RESTRICTION ON
SPECIAL MODIFICATION TERMS OF SENIOR LOAN DOCUMENTS SET FORTH HEREIN), AND MAY
ALSO DO ANY ONE OR MORE OF THE FOLLOWING IN SENIOR LENDER’S SOLE AND ABSOLUTE
DISCRETION (SUBJECT, HOWEVER, TO THE RESTRICTION ON SPECIAL MODIFICATION TERMS
OF SENIOR LOAN DOCUMENTS SET FORTH HEREIN):

 

(I)            EXTEND, RENEW, MODIFY, AMEND, DIMINISH OR WAIVE ANY OF THE TERMS
OF ANY OF THE SENIOR LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THOSE
ARISING OUT OF BUILDING COST REVISIONS, CHANGE ORDERS OR CHANGES TO THE PLANS
AND

 

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SPECIFICATIONS, OR ANY PAYMENT PROVISIONS UNDER ANY OF THE SENIOR LOAN
DOCUMENTS, RELATING TO THE PROPERTY OR ANY IMPROVEMENTS, OR ANY PAYMENT
PROVISIONS UNDER ANY OF THE SENIOR LOAN DOCUMENTS, OR GRANT ANY OTHER INDULGENCE
TO BORROWER OR ANY OTHER PERSON IN RESPECT OF ANY OR ALL OF THE SENIOR LOAN
OBLIGATIONS OR ANY OTHER MATTER OR ENTER INTO A SWAP CONTRACT;

 

(II)           MAKE SUCH PROTECTIVE ADVANCES AS SENIOR LENDER MAY DEEM
APPROPRIATE (IT BEING UNDERSTOOD THAT SENIOR LENDER HAS NOT IN ANY WAY COMMITTED
TO MAKE ANY SUCH ADVANCE);

 

(III)          ADD OR SUBSTITUTE, OR TAKE ANY ACTION OR OMIT TO TAKE ANY ACTION
WHICH RESULTS IN THE RELEASE OF ANY ENDORSER, GUARANTOR OR ANY COLLATERAL OR
SECURITY;

 

(IV)          APPLY ANY SUMS RECEIVED FROM BORROWER, ANY GUARANTOR, ENDORSER, OR
COSIGNER, OR FROM THE DISPOSITION OF ANY COLLATERAL OR SECURITY, TO ANY
INDEBTEDNESS WHATSOEVER OWING FROM SUCH PERSON OR SECURED BY SUCH COLLATERAL OR
SECURITY, IN SUCH MANNER AND ORDER AS SENIOR LENDER DETERMINES IN ITS SOLE
DISCRETION, AND REGARDLESS OF WHETHER SUCH INDEBTEDNESS IS PART OF THE SENIOR
LOAN OBLIGATIONS, IS SECURED, OR IS DUE AND PAYABLE;

 

(V)           MAKE LOANS OR ADVANCES TO BORROWER SECURED IN WHOLE OR IN PART BY
THE COLLATERAL OR REFRAIN FROM MAKING ANY SUCH LOANS OR ADVANCES;

 

(VI)          ACCEPT PARTIAL PAYMENTS OF, COMPROMISE OR SETTLE, REFUSE TO
ENFORCE, OR RELEASE ALL OR ANY PARTIES TO, ANY OR ALL OF THE SENIOR LOAN
OBLIGATIONS;

 

(VII)         SETTLE, RELEASE (WITH OR WITHOUT RECEIPT OF CONSIDERATION
THEREFOR, AND WHETHER BY OPERATION OF LAW OR OTHERWISE), COMPOUND, COMPROMISE,
COLLECT OR LIQUIDATE ANY OF THE SENIOR LOAN OBLIGATIONS IN ANY MANNER PERMITTED
BY APPLICABLE LAW; PROVIDED, HOWEVER, SENIOR LENDER SHALL NOT RELEASE ANY OF THE
COLLATERAL OR ANY GUARANTOR OF THE SENIOR LOAN OBLIGATIONS PRIOR TO SUBORDINATE
LENDER’S OUTSIDE SENIOR LOAN DATE OR JUNIOR LENDER’S OUTSIDE DATE; AND

 

(VIII)        ACCEPT, RELEASE (WITH OR WITHOUT RECEIPT OF CONSIDERATION), WAIVE,
SURRENDER, ENFORCE, EXCHANGE, MODIFY, IMPAIR OR EXTEND THE TIME FOR THE
PERFORMANCE, DISCHARGE OR PAYMENT OF, ANY AND ALL PROPERTY OF ANY KIND SECURING
ANY OR ALL OF THE SENIOR LOAN OBLIGATIONS OR ANY GUARANTY OF ANY OR ALL OF THE
SENIOR LOAN OBLIGATIONS, OR ON WHICH SENIOR LENDER AT ANY TIME MAY HAVE A LIEN,
OR REFUSE TO ENFORCE ITS RIGHTS OR MAKE ANY COMPROMISE OR SETTLEMENT OR
AGREEMENT THEREFOR IN RESPECT OF ANY OR ALL OF SUCH PROPERTY; SENIOR LENDER IS
NOT UNDER AND SHALL NOT HEREAFTER BE UNDER ANY OBLIGATION TO MARSHAL ANY ASSETS
IN FAVOR OF SUBORDINATE LENDER, OR AGAINST OR IN PAYMENT OF ANY OR ALL OF THE
SENIOR LOAN OBLIGATIONS, AND MAY PROCEED AGAINST ANY OF THE COLLATERAL IN SUCH
ORDER AND MANNER AS IT ELECTS; PROVIDED, HOWEVER, SENIOR LENDER SHALL NOT
RELEASE ANY OF THE COLLATERAL OR ANY GUARANTOR OF THE SENIOR LOAN OBLIGATIONS
PRIOR TO SUBORDINATE LENDER’S OUTSIDE SENIOR LOAN DATE OR JUNIOR LENDER’S
OUTSIDE DATE.

 

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(B)           ALL SUCH ACTIONS, RIGHTS AND MATTERS SET FORTH IN
SECTIONS 11(A)(I) THROUGH 11(A)(VIII) ABOVE SHALL BE SENIOR IN ALL RESPECTS TO
THE JUNIOR LOAN OBLIGATIONS AND JUNIOR LOAN DOCUMENTS AND SUBORDINATE LOAN
OBLIGATIONS AND THE SUBORDINATE LOAN DOCUMENTS WHICH SHALL AUTOMATICALLY BE
SUBORDINATE TO SUCH ACTIONS, RIGHTS AND MATTERS SET FORTH IN (A)(I) THROUGH
(VIII) ABOVE.  THIRD PARTIES, INCLUDING TITLE INSURANCE COMPANIES INSURING THE
PRIORITY OF THE SENIOR LOAN DOCUMENTS, ARE HEREBY AUTHORIZED TO RELY UPON THIS
PROVISION AS TO THE PRIORITY OF SUCH MATTERS WITHOUT REQUIREMENT TO CONFIRM SUCH
SENIOR POSITION FROM JUNIOR LENDER OR SUBORDINATE LENDER.

 

(C)           EACH OF SUBORDINATE LENDER AND SENIOR LENDER AGREES THAT JUNIOR
LENDER MAY AT ANY TIME AND FROM TIME TO TIME, WITHOUT THE CONSENT OF SUBORDINATE
LENDER OR SENIOR LENDER, BUT SUBJECT TO SECTION 9(A) HEREOF, AND WITHOUT
AFFECTING THE SUBORDINATION AND OTHER AGREEMENTS HEREIN MADE BY SUBORDINATE
LENDER, AND WITHOUT AFFECTING THE SENIOR PRIORITY AND OTHER AGREEMENTS MADE BY
THE SENIOR LENDER, ENTER INTO ANY AMENDMENT, DEFERRAL, EXTENSION, MODIFICATION,
RENEWAL, REPLACEMENT, CONSOLIDATION, SUPPLEMENT OR WAIVER OF THE JUNIOR LOAN OR
THE JUNIOR LOAN DOCUMENTS (SUBJECT, HOWEVER, TO THE RESTRICTION ON SPECIAL
MODIFICATION TERMS OF JUNIOR LOAN DOCUMENTS) AND MAY ALSO DO ANY ONE OR MORE OF
THE FOLLOWING IN JUNIOR LENDER’S SOLE AND ABSOLUTE DISCRETION (SUBJECT, HOWEVER,
TO THE RESTRICTION ON SPECIAL MODIFICATION TERMS OF JUNIOR LOAN DOCUMENTS SET
FORTH HEREIN):

 

(I)            EXTEND, RENEW, MODIFY, AMEND, DIMINISH OR WAIVE ANY OF THE TERMS
OF ANY OF THE JUNIOR LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THOSE
ARISING OUT OF BUILDING COST REVISIONS, CHANGE ORDERS OR CHANGES TO THE PLANS
AND SPECIFICATIONS, OR ANY PAYMENT PROVISIONS UNDER ANY OF THE JUNIOR LOAN
DOCUMENTS, RELATING TO THE PROPERTY OR ANY IMPROVEMENTS, OR ANY PAYMENT
PROVISIONS UNDER ANY OF THE JUNIOR LOAN DOCUMENTS, OR GRANT ANY OTHER INDULGENCE
TO BORROWER OR ANY OTHER PERSON IN RESPECT OF ANY OR ALL OF THE JUNIOR LOAN
OBLIGATIONS OR ANY OTHER MATTER;

 

(II)           MAKE SUCH PROTECTIVE ADVANCES AS JUNIOR LENDER MAY DEEM
APPROPRIATE (IT BEING UNDERSTOOD THAT JUNIOR LENDER HAS NOT IN ANY WAY COMMITTED
TO MAKE ANY SUCH ADVANCE);

 

(III)          ADD OR SUBSTITUTE, OR TAKE ANY ACTION OR OMIT TO TAKE ANY ACTION
WHICH RESULTS IN THE RELEASE OF ANY ENDORSER, GUARANTOR OR ANY COLLATERAL OR
SECURITY;

 

(IV)          APPLY ANY SUMS RECEIVED FROM BORROWER, ANY GUARANTOR, ENDORSER, OR
COSIGNER, OR FROM THE DISPOSITION OF ANY COLLATERAL OR SECURITY, TO ANY
INDEBTEDNESS WHATSOEVER OWING FROM SUCH PERSON OR SECURED BY SUCH COLLATERAL OR
SECURITY, IN SUCH MANNER AND ORDER AS JUNIOR LENDER DETERMINES IN ITS SOLE
DISCRETION, AND REGARDLESS OF WHETHER SUCH INDEBTEDNESS IS PART OF THE JUNIOR
LOAN OBLIGATIONS, IS SECURED, OR IS DUE AND PAYABLE;

 

(V)           MAKE LOANS OR ADVANCES TO BORROWER SECURED IN WHOLE OR IN PART BY
THE COLLATERAL OR REFRAIN FROM MAKING ANY SUCH LOANS OR ADVANCES;

 

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(VI)          ACCEPT PARTIAL PAYMENTS OF, COMPROMISE OR SETTLE, REFUSE TO
ENFORCE, OR RELEASE ALL OR ANY PARTIES TO, ANY OR ALL OF THE JUNIOR LOAN
OBLIGATIONS;

 

(VII)         SETTLE, RELEASE (WITH OR WITHOUT RECEIPT OF CONSIDERATION
THEREFOR, AND WHETHER BY OPERATION OF LAW OR OTHERWISE), COMPOUND, COMPROMISE,
COLLECT OR LIQUIDATE ANY OF THE JUNIOR LOAN OBLIGATIONS IN ANY MANNER PERMITTED
BY APPLICABLE LAW; PROVIDED, HOWEVER, JUNIOR LENDER SHALL NOT RELEASE ANY OF THE
COLLATERAL OR ANY GUARANTOR OF THE JUNIOR LOAN OBLIGATIONS PRIOR TO SUBORDINATE
LENDER’S OUTSIDE JUNIOR LOAN DATE; AND

 

(VIII)        ACCEPT, RELEASE (WITH OR WITHOUT RECEIPT OF CONSIDERATION), WAIVE,
SURRENDER, ENFORCE, EXCHANGE, MODIFY, IMPAIR OR EXTEND THE TIME FOR THE
PERFORMANCE, DISCHARGE OR PAYMENT OF, ANY AND ALL PROPERTY OF ANY KIND SECURING
ANY OR ALL OF THE JUNIOR LOAN OBLIGATIONS OR ANY GUARANTY OF ANY OR ALL OF THE
JUNIOR LOAN OBLIGATIONS, OR ON WHICH JUNIOR LENDER AT ANY TIME MAY HAVE A LIEN,
OR REFUSE TO ENFORCE ITS RIGHTS OR MAKE ANY COMPROMISE OR SETTLEMENT OR
AGREEMENT THEREFOR IN RESPECT OF ANY OR ALL OF SUCH PROPERTY; JUNIOR LENDER IS
NOT UNDER AND SHALL NOT HEREAFTER BE UNDER ANY OBLIGATION TO MARSHAL ANY ASSETS
IN FAVOR OF SUBORDINATE LENDER, OR AGAINST OR IN PAYMENT OF ANY OR ALL OF THE
JUNIOR LOAN OBLIGATIONS, AND MAY PROCEED AGAINST ANY OF THE COLLATERAL IN SUCH
ORDER AND MANNER AS IT ELECTS; PROVIDED, HOWEVER, JUNIOR LENDER SHALL NOT
RELEASE ANY OF THE COLLATERAL OR ANY GUARANTOR OF THE JUNIOR LOAN OBLIGATIONS
PRIOR TO SUBORDINATE LENDER’S OUTSIDE JUNIOR LOAN DATE.

 

(D)           ALL SUCH ACTIONS, RIGHTS AND MATTERS SET FORTH IN
SECTIONS 11(C)(I) THROUGH 11(C)(VIII) ABOVE SHALL BE (X) SENIOR IN ALL RESPECTS
TO THE SUBORDINATE LOAN OBLIGATIONS AND THE SUBORDINATE LOAN DOCUMENTS WHICH
SHALL AUTOMATICALLY BE SUBORDINATE TO SUCH ACTIONS, RIGHTS AND MATTERS SET FORTH
IN (C)(I) THROUGH (C)(VIII) ABOVE AND (Y) SUBORDINATE IN ALL RESPECTS TO THE
SENIOR LOAN OBLIGATIONS AND SENIOR LOAN DOCUMENTS.  THIRD PARTIES, INCLUDING
TITLE INSURANCE COMPANIES INSURING THE PRIORITY OF THE JUNIOR LOAN DOCUMENTS,
ARE HEREBY AUTHORIZED TO RELY UPON THIS PROVISION AS TO THE PRIORITY OF SUCH
MATTERS WITHOUT REQUIREMENT TO CONFIRM SUCH SENIOR POSITION FROM SUBORDINATE
LENDER.

 

12.           DEALINGS WITH BORROWER.

 

(A)           IN MAKING DISBURSEMENTS UNDER ANY OF THE SENIOR LOAN DOCUMENTS,
SENIOR LENDER HAS NO DUTY TO, NOR HAS SENIOR LENDER REPRESENTED THAT IT WILL,
SEE TO THE APPLICATION OF ANY PROCEEDS BY THE PERSON OR PERSONS TO WHOM SENIOR
LENDER DISBURSES SUCH PROCEEDS.  ANY APPLICATION OR USE OF SUCH PROCEEDS FOR
PURPOSES OTHER THAN THOSE PROVIDED FOR IN THE SENIOR LOAN DOCUMENTS DOES NOT AND
SHALL NOT DEFEAT THE SUBORDINATION HEREIN MADE, IN WHOLE OR IN PART.

 

(B)           IN MAKING DISBURSEMENTS UNDER ANY OF THE SENIOR LOAN DOCUMENTS,
SENIOR LENDER MAY WAIVE ANY AND ALL CONDITIONS TO A DISBURSEMENT CONTAINED IN
THE SENIOR LOAN DOCUMENTS.  NO SUCH WAIVER SHALL DEFEAT THE SUBORDINATION HEREIN
MADE, IN WHOLE OR IN PART.

 

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(C)           THE RIGHTS GRANTED TO SENIOR LENDER HEREUNDER ARE SOLELY FOR ITS
PROTECTION AND NOTHING HEREIN CONTAINED SHALL IMPOSE ON SENIOR LENDER ANY DUTIES
WITH RESPECT TO BORROWER, JUNIOR LENDER OR SUBORDINATE LENDER.

 

(D)           IN MAKING DISBURSEMENTS UNDER ANY OF THE JUNIOR LOAN DOCUMENTS,
JUNIOR LENDER HAS NO DUTY TO, NOR HAS JUNIOR LENDER REPRESENTED THAT IT WILL,
SEE TO THE APPLICATION OF ANY PROCEEDS BY THE PERSON OR PERSONS TO WHOM JUNIOR
LENDER DISBURSES SUCH PROCEEDS.  ANY APPLICATION OR USE OF SUCH PROCEEDS FOR
PURPOSES OTHER THAN THOSE PROVIDED FOR IN THE JUNIOR LOAN DOCUMENTS DOES NOT AND
SHALL NOT DEFEAT THE SUBORDINATION HEREIN MADE, IN WHOLE OR IN PART.

 

(E)           IN MAKING DISBURSEMENTS UNDER ANY OF THE JUNIOR LOAN DOCUMENTS,
JUNIOR LENDER MAY WAIVE ANY AND ALL CONDITIONS TO A DISBURSEMENT CONTAINED IN
THE JUNIOR LOAN DOCUMENTS.  NO SUCH WAIVER SHALL DEFEAT THE SUBORDINATION HEREIN
MADE, IN WHOLE OR IN PART.

 

(F)            THE RIGHTS GRANTED TO JUNIOR LENDER HEREUNDER ARE SOLELY FOR ITS
PROTECTION, AND NOTHING HEREIN CONTAINED SHALL IMPOSE ON JUNIOR LENDER ANY
DUTIES WITH RESPECT TO BORROWER OR SUBORDINATE LENDER.

 

(G)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, ANY
CONSENT OR APPROVAL RIGHTS OF LENDERS UNDER THE DELEGATED CONSENT DOCUMENTS (AS
DEFINED IN EXHIBIT E) SHALL BE SUBJECT TO THE PROVISIONS OF EXHIBIT E ATTACHED
HERETO AND MADE A PART HEREOF.  EACH OF SENIOR LENDER, JUNIOR LENDER AND
SUBORDINATE LENDER HEREBY ACKNOWLEDGE AND AGREE THAT EACH OF THE BORROWER AND
THE OTHER PARTIES TO SUCH DELEGATED CONSENT DOCUMENTS IS EXPRESSLY MADE A THIRD
PARTY BENEFICIARY OF THE PROVISIONS OF EXHIBIT E SOLELY FOR THE PURPOSES OF
ENFORCING THE PROVISIONS OF EXHIBIT E AND THAT BORROWER AND THE OTHER PARTIES TO
SUCH DELEGATED CONSENT DOCUMENTS SHALL BE ENTITLED TO RELY ON THE PROVISIONS OF
EXHIBIT E IN CONNECTION WITH SATISFYING THEIR RESPECTIVE OBLIGATION(S) TO OBTAIN
ANY CONSENT AND/OR APPROVAL OF ANY LENDER UNDER ANY OF THE DELEGATED CONSENT
DOCUMENTS.  NO MODIFICATION, AMENDMENT, TERMINATION OR WAIVER OF THE PROVISIONS
OF EXHIBIT E SHALL BE BINDING UPON BORROWER OR SUCH OTHER PARTIES TO SUCH
DELEGATED CONSENT DOCUMENTS EXCEPT AS EXPRESSLY SET FORTH IN A WRITING SIGNED BY
EACH SUCH PERSON.

 

13.           RESTRICTIONS ON TRANSFER OF SUBORDINATE LOAN.

 

(A)           WITH RESPECT TO THE INITIAL SUBORDINATE LENDER OR ANY SUCCESSOR OR
ASSIGN OF THE INITIAL SUBORDINATE LENDER THAT IS AN AFFILIATE OF SUBORDINATE
LENDER (EACH, AN “AFFILIATED SUBORDINATE LENDER”), SUCH AFFILIATED SUBORDINATE
LENDER AGREES THAT IT SHALL NOT SELL, ASSIGN, PLEDGE, ENCUMBER OR OTHERWISE
TRANSFER (EACH, A “TRANSFER”) ANY PORTION OF ITS INTEREST IN THE SUBORDINATE
LOAN DOCUMENTS WITHOUT THE PRIOR WRITTEN CONSENT OF JUNIOR LENDER, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.  IF SUBORDINATE
LENDER DESIRES TO TRANSFER THE SUBORDINATE LOAN, SUBORDINATE LENDER SHALL SEND
NOTICE TO JUNIOR LENDER DESCRIBING THE IDENTITY OF THE PROPOSED TRANSFEREE AND
REQUESTING JUNIOR LENDER’S APPROVAL THEREOF (A COPY OF SUCH NOTICE SHALL BE
SIMULTANEOUSLY PROVIDED TO THE SENIOR LENDER).  WITHIN TEN (10) BUSINESS DAYS
AFTER

 

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DELIVERY OF SUCH NOTICE, JUNIOR LENDER SHALL RESPOND TO SUBORDINATE LENDER WITH
A NOTICE EITHER APPROVING OR DISAPPROVING THE CONTEMPLATED TRANSFER (A COPY OF
SUCH NOTICE SHALL BE SIMULTANEOUSLY PROVIDED TO THE SENIOR LENDER).  IF JUNIOR
LENDER FAILS TO RESPOND TO A NOTICE SENT BY SUBORDINATE LENDER REQUESTING JUNIOR
LENDER’S APPROVAL OF A TRANSFER WITHIN TEN (10) BUSINESS DAYS AFTER DELIVERY,
THE JUNIOR LENDER SHALL BE DEEMED TO HAVE APPROVED SUCH TRANSFER.  ANY TRANSFER
MADE IN VIOLATION OF THIS SECTION 13(A) SHALL BE DEEMED VOID.

 

(B)           AFTER THE CONSUMMATION OF A TRANSFER OF THE SUBORDINATE LOAN TO A
PARTY OTHER THAN AN AFFILIATED SUBORDINATE LENDER (A “NON-AFFILIATED SUBORDINATE
LENDER”), SUCH NON-AFFILIATED SUBORDINATE LENDER AGREES THAT IT SHALL NOT
TRANSFER ANY PORTION OF ITS INTEREST IN THE SUBORDINATE LOAN DOCUMENTS WITHOUT
THE PRIOR WRITTEN CONSENT OF JUNIOR LENDER, WHICH CONSENT MAY BE WITHHELD ONLY
IF THE PROPOSED TRANSFEREE OF THE NON-AFFILIATED SUBORDINATE LENDER’S INTEREST
IN THE SUBORDINATE LOAN DOCUMENTS IS A PERSON WITH WHICH THE JUNIOR LENDER HAS
PREVIOUSLY BEEN IN A DISPUTE THAT WAS THE SUBJECT OF A COURT OR ARBITRATION
PROCEEDING WITHIN THE THEN PRECEDING SIX YEARS.  IF A NON-AFFILIATED SUBORDINATE
LENDER DESIRES TO TRANSFER THE SUBORDINATE LOAN, SUCH NON-AFFILIATED SUBORDINATE
LENDER SHALL SEND NOTICE TO JUNIOR LENDER DESCRIBING THE IDENTITY OF THE
PROPOSED TRANSFEREE AND REQUESTING JUNIOR LENDER’S APPROVAL THEREOF (A COPY OF
SUCH NOTICE SHALL BE SIMULTANEOUSLY PROVIDED TO THE SENIOR LENDER).  WITHIN TEN
(10) BUSINESS DAYS AFTER DELIVERY OF SUCH NOTICE, JUNIOR LENDER SHALL RESPOND TO
SUBORDINATE LENDER WITH A NOTICE EITHER APPROVING OR DISAPPROVING THE
CONTEMPLATED TRANSFER (A COPY OF SUCH NOTICE SHALL BE SIMULTANEOUSLY PROVIDED TO
THE SENIOR LENDER).  IF JUNIOR LENDER DISAPPROVES THE PROPOSED TRANSFER, JUNIOR
LENDER SHALL INCLUDE IN ITS NOTICE THE REASONS FOR SUCH DISAPPROVAL.  IF JUNIOR
LENDER DISAPPROVES THE PROPOSED TRANSFER FOR ANY REASON OTHER THAN THAT THE
PROPOSED TRANSFEREE IS A PERSON WITH WHICH THE JUNIOR LENDER HAS PREVIOUSLY BEEN
IN A DISPUTE THAT WAS THE SUBJECT OF A COURT OR ARBITRATION PROCEEDING WITHIN
THE THEN PRECEDING SIX YEARS, THEN JUNIOR LENDER SHALL, WITHIN THIRTY (30) DAYS
AFTER PROVIDING SUCH NOTICE (THE “SUBORDINATE PURCHASE CLOSING DATE”), PURCHASE
THE SUBORDINATE LOAN (THE “SUBORDINATE PURCHASE”) AT THE SUBORDINATE LOAN
PURCHASE PRICE AS PROVIDED IN SECTION 13(C) BELOW.

 

(C)           IF THE JUNIOR LENDER PURCHASES THE SUBORDINATE LOAN PURSUANT TO
THE PRECEDING SECTION 13(B), THEN, CONCURRENTLY WITH PAYMENT TO NON-AFFILIATED
SUBORDINATE LENDER OF THE SUBORDINATE LOAN PURCHASE PRICE: (A) NON-AFFILIATED
SUBORDINATE LENDER SHALL DELIVER OR CAUSE TO BE DELIVERED TO JUNIOR LENDER ALL
SUBORDINATE LOAN DOCUMENTS HELD BY OR ON BEHALF OF NON-AFFILIATED SUBORDINATE
LENDER, AND (B) NON-AFFILIATED SUBORDINATE LENDER SHALL EXECUTE IN FAVOR OF
JUNIOR LENDER (OR ITS DESIGNEE) ASSIGNMENT DOCUMENTATION, IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO JUNIOR LENDER, ASSIGNING THE SUBORDINATE LOAN AND ITS
RIGHTS UNDER THE SUBORDINATE LOAN DOCUMENTS (WITHOUT RECOURSE, REPRESENTATIONS
OR WARRANTIES, EXCEPT FOR REPRESENTATIONS AS TO THE OUTSTANDING BALANCE OF THE
SUBORDINATE LOAN AND AS TO NON-AFFILIATED SUBORDINATE LENDER’S NOT HAVING
ASSIGNED OR ENCUMBERED ITS RIGHTS IN THE SUBORDINATE LOAN).  UPON CONSUMMATION
OF THE SUBORDINATE PURCHASE, JUNIOR LENDER SHALL BE SUBROGATED TO THE RIGHTS OF
NON-AFFILIATED SUBORDINATE LENDER UNDER THE SUBORDINATE LOAN DOCUMENTS.

 

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(d)           Notwithstanding anything to the contrary in this Section 13 or
otherwise in this Agreement, any Affiliated Subordinate Lender or Non-Affiliated
Subordinate Lender shall have the right to transfer its interest in the
Subordinate Loan (or any part thereof or interest therein) to an Affiliate upon
fifteen (15) days’ prior written notice to (but without the consent of) Senior
Lender and Junior Lender and delivery to Senior Lender and Junior Lender by such
Affiliate of an assumption agreement whereby it assumes all of such
Non-Affiliated Subordinate Lender’s obligations hereunder.

 

14.           ASSIGNMENT OF THE JUNIOR LOAN OBLIGATIONS.  JUNIOR LENDER MAY
ASSIGN OR TRANSFER ANY OR ALL OF THE JUNIOR LOAN OBLIGATIONS AND/OR ANY INTEREST
THEREIN OR HEREIN AND, NOTWITHSTANDING ANY SUCH ASSIGNMENT OR TRANSFER OR ANY
SUBSEQUENT ASSIGNMENT OR TRANSFER THEREOF, SUCH JUNIOR LOAN OBLIGATIONS SHALL BE
AND REMAIN SENIOR TO THE SUBORDINATE LOAN OBLIGATIONS, AND THE SUBORDINATE LOAN
OBLIGATIONS SHALL BE AND REMAIN SUBJECT AND SUBORDINATE TO THE JUNIOR LOAN FOR
THE PURPOSES OF THIS AGREEMENT, AND EVERY IMMEDIATE AND SUCCESSIVE ASSIGNEE OR
TRANSFEREE OF ANY OF THE JUNIOR LOAN OBLIGATIONS OR OF ANY INTEREST THEREIN OR
HEREIN SHALL, TO THE EXTENT OF THE INTEREST OF SUCH ASSIGNEE OR TRANSFEREE IN
THE JUNIOR LOAN OBLIGATIONS, BE ENTITLED TO THE BENEFITS OF THIS AGREEMENT TO
THE SAME EXTENT AS IF SUCH ASSIGNEE OR TRANSFEREE WERE JUNIOR LENDER; PROVIDED,
HOWEVER, THAT, UNLESS JUNIOR LENDER SHALL OTHERWISE CONSENT IN WRITING, JUNIOR
LENDER SHALL HAVE AN UNIMPAIRED RIGHT, PRIOR AND SUPERIOR TO THAT OF ANY SUCH
ASSIGNEE OR TRANSFEREE, TO ENFORCE THIS AGREEMENT, FOR THE BENEFIT OF JUNIOR
LENDER, AS TO THOSE PORTIONS OF THE JUNIOR LOAN OBLIGATIONS WHICH JUNIOR LENDER
HAS NOT ASSIGNED OR TRANSFERRED.

 

15.           ASSIGNMENT OF THE SENIOR LOAN OBLIGATIONS.  SENIOR LENDER MAY
ASSIGN OR TRANSFER ANY OR ALL OF THE SENIOR LOAN OBLIGATIONS AND/OR ANY INTEREST
THEREIN OR HEREIN AND, NOTWITHSTANDING ANY SUCH ASSIGNMENT OR TRANSFER OR ANY
SUBSEQUENT ASSIGNMENT OR TRANSFER THEREOF, SUCH SENIOR LOAN OBLIGATIONS SHALL BE
AND REMAIN SENIOR TO THE JUNIOR LOAN OBLIGATIONS AND SUBORDINATE LOAN
OBLIGATIONS, AND THE SUBORDINATE LOAN OBLIGATIONS SHALL BE AND REMAIN SUBJECT
AND SUBORDINATE TO THE JUNIOR LOAN OBLIGATIONS AND SENIOR LOAN OBLIGATIONS FOR
THE PURPOSES OF THIS AGREEMENT, AND EVERY IMMEDIATE AND SUCCESSIVE ASSIGNEE OR
TRANSFEREE OF ANY OF THE SENIOR LOAN OBLIGATIONS OR OF ANY INTEREST THEREIN OR
HEREIN SHALL, TO THE EXTENT OF THE INTEREST OF SUCH ASSIGNEE OR TRANSFEREE IN
THE SENIOR LOAN OBLIGATIONS, BE ENTITLED TO THE BENEFITS OF THIS AGREEMENT TO
THE SAME EXTENT AS IF SUCH ASSIGNEE OR TRANSFEREE WERE SENIOR LENDER; PROVIDED,
HOWEVER, THAT, UNLESS SENIOR LENDER SHALL OTHERWISE CONSENT IN WRITING, SENIOR
LENDER SHALL HAVE AN UNIMPAIRED RIGHT, PRIOR AND SUPERIOR TO THAT OF ANY SUCH
ASSIGNEE OR TRANSFEREE, TO ENFORCE THIS AGREEMENT, FOR THE BENEFIT OF SENIOR
LENDER, AS TO THOSE PORTIONS OF THE SENIOR LOAN OBLIGATIONS WHICH SENIOR LENDER
HAS NOT ASSIGNED OR TRANSFERRED.

 

16.           INTENT TO SELL.  IF SENIOR LENDER INTENDS TO SOLICIT PURCHASERS TO
PURCHASE ALL OF ITS INTEREST IN THE SENIOR LOAN IN WHOLE AND SUCH PURCHASERS ARE
A PERSON OTHER THAN THE JUNIOR LENDER, THE SUBORDINATE LENDER OR THE BORROWER OR
ANY AFFILIATE THEREOF, SENIOR LENDER SHALL GIVE JUNIOR LENDER PROMPT WRITTEN
NOTICE OF ITS INTENT TO SELL AND SHALL USE REASONABLE BEST EFFORTS, IF THERE IS
A BIDDING PROCESS FOR THE PURCHASE OF SUCH SENIOR LOAN, TO INCLUDE THE JUNIOR
LENDER IN SUCH BIDDING PROCESS.

 

17.           ACQUISITION OF SENIOR LOAN BY BORROWER OR SUBORDINATE LENDER
PROHIBITED.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, OTHER
THAN A SALE PURSUANT TO SECTION 7, SENIOR LENDER SHALL NOT SELL THE SENIOR LOAN
TO BORROWER, SUBORDINATE LENDER, OR ANY

 

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AFFILIATE OF BORROWER OR SUBORDINATE LENDER, UNLESS EITHER (A) CONCURRENTLY
THEREWITH, THE JUNIOR LOAN IS SOLD TO THE SAME PARTY ON TERMS ACCEPTABLE TO THE
JUNIOR LENDER IN ITS SOLE DISCRETION, OR (B) THE PRIOR WRITTEN CONSENT OF JUNIOR
LENDER HAS BEEN OBTAINED (WHICH CONSENT MAY BE GIVEN OR WITHHELD IN THE SOLE
DISCRETION OF JUNIOR LENDER).  SUBORDINATE LENDER SHALL NOT PURCHASE, OR ALLOW
ANY AFFILIATE OF SUBORDINATE LENDER TO PURCHASE, OTHER THAN A SALE PURSUANT TO
SECTION 7, THE SENIOR LOAN, UNLESS (I) CONCURRENTLY THEREWITH, THE JUNIOR LOAN
IS SOLD TO THE SAME PARTY ON TERMS ACCEPTABLE TO THE JUNIOR LENDER IN ITS SOLE
DISCRETION, OR (II) THE PRIOR WRITTEN CONSENT OF JUNIOR LENDER IS OBTAINED
(WHICH CONSENT MAY BE GIVEN OR WITHHELD IN THE SOLE DISCRETION OF JUNIOR
LENDER).

 

18.           CASUALTY.  SUBJECT TO THE TERMS OF THE LOCK BOX AGREEMENT, IN THE
EVENT OF A CASUALTY TO THE BUILDINGS OR IMPROVEMENTS CONSTRUCTED ON ANY PORTION
OF THE PROPERTY OR A CONDEMNATION OR TAKING UNDER A POWER OF EMINENT DOMAIN OF
ALL OR ANY PORTION OF THE PROPERTY, SENIOR LENDER SHALL HAVE A FIRST AND PRIOR
INTEREST IN AND TO ANY PAYMENTS, AWARDS, PROCEEDS, DISTRIBUTIONS, OR
CONSIDERATION ARISING FROM ANY SUCH EVENT (THE “AWARD”).  IF THE AMOUNT OF THE
AWARD IS IN EXCESS OF ALL AMOUNTS OWED TO SENIOR LENDER UNDER THE SENIOR LOAN
DOCUMENTS (THE AMOUNT OF SUCH EXCESS IS REFERRED TO HEREIN AS THE “EXCESS”),
HOWEVER, AND EITHER THE SENIOR LOAN HAS BEEN PAID IN FULL OR BORROWER IS
ENTITLED TO A REMITTANCE OF SAME UNDER THE SENIOR LOAN DOCUMENTS OTHER THAN TO
RESTORE THE PROPERTY, THE EXCESS OR PORTION TO BE SO REMITTED TO BORROWER SHALL,
TO THE EXTENT PERMITTED IN THE SENIOR LOAN DOCUMENTS, BE PAID TO OR AT THE
DIRECTION OF JUNIOR LENDER, AND IF THE JUNIOR LENDER HAS BEEN PAID ALL AMOUNTS
DUE, TO OR AT THE DIRECTION OF THE SUBORDINATE LENDER UNLESS OTHER PERSONS HAVE
CLAIMED THE RIGHT TO SUCH EXCESS, IN WHICH CASE SENIOR LENDER (OR JUNIOR LENDER
IF THERE IS NO SENIOR LENDER) SHALL ONLY BE REQUIRED TO PROVIDE NOTICE TO JUNIOR
LENDER AND SUBORDINATE LENDER OF THE EXCESS AND OF ANY OTHER CLAIMS THERETO.  IN
THE EVENT OF ANY COMPETING CLAIMS FOR ANY EXCESS, SENIOR LENDER (OR JUNIOR
LENDER IF THERE IS NO SENIOR LENDER) SHALL CONTINUE TO HOLD THE EXCESS UNTIL
SENIOR LENDER (OR JUNIOR LENDER IF THERE IS NO SENIOR LENDER) RECEIVES AN
AGREEMENT SIGNED BY ALL PERSONS MAKING A CLAIM TO THE EXCESS OR A FINAL ORDER OF
A COURT OF COMPETENT JURISDICTION DIRECTING SENIOR LENDER (OR JUNIOR LENDER IF
THERE IS NO SENIOR LENDER) AS TO HOW AND TO WHICH PERSON(S) THE EXCESS IS TO BE
DISTRIBUTED.  NOTWITHSTANDING THE FOREGOING, BUT SUBJECT TO THE TERMS OF THE
LOCK BOX AGREEMENT, IN THE EVENT OF A CASUALTY OR CONDEMNATION, SENIOR LENDER
(OR JUNIOR LENDER IF THERE IS NO SENIOR LENDER) SHALL RELEASE THE AWARD TO THE
BORROWER IF AND TO THE EXTENT REQUIRED BY THE TERMS AND CONDITIONS OF THE SENIOR
LOAN DOCUMENTS (OR JUNIOR LOAN DOCUMENTS IF THERE IS NO SENIOR LENDER) AND THE
LOCK BOX AGREEMENT TO REPAIR AND RESTORE THE PREMISES IN ACCORDANCE WITH THE
TERMS AND PROVISIONS OF THE SENIOR LOAN DOCUMENTS (OR JUNIOR LOAN DOCUMENTS IF
THERE IS NO SENIOR LENDER).  ANY PORTION OF THE AWARD MADE AVAILABLE TO THE
BORROWER FOR THE REPAIR OR RESTORATION OF THE PREMISES SHALL NOT BE SUBJECT TO
ATTACHMENT BY JUNIOR LENDER AND SUBORDINATE LENDER.

 

19.           BANKRUPTCY.

 

(A)           UPON ANY DISTRIBUTION OF THE ASSETS OR PROPERTIES OF BORROWER OR
UPON ANY DISSOLUTION, WINDING UP, LIQUIDATION, BANKRUPTCY OR REORGANIZATION
INVOLVING BORROWER (WHETHER IN BANKRUPTCY, INSOLVENCY OR RECEIVERSHIP
PROCEEDINGS OR ANY OTHER PROCEEDING, OR UPON AN ASSIGNMENT FOR THE BENEFIT OF
CREDITORS OR OTHERWISE):

 

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(I)            SENIOR LENDER SHALL FIRST BE ENTITLED TO RECEIVE PAYMENT IN FULL
OF THE PRINCIPAL OF AND INTEREST ON THE SENIOR LOAN OBLIGATIONS AND ALL FEES AND
ANY OTHER PAYMENTS (INCLUDING POST-PETITION INTEREST AND ALL COSTS AND EXPENSES)
DUE PURSUANT TO THE TERMS OF THE SENIOR LOAN DOCUMENTS, BEFORE JUNIOR LENDER IS
ENTITLED TO RECEIVE ANY PAYMENT ON ACCOUNT OF THE JUNIOR LOAN OBLIGATIONS; AND
JUNIOR LENDER SHALL THEN BE ENTITLED TO RECEIVE PAYMENT IN FULL OF THE PRINCIPAL
OF AND INTEREST ON THE JUNIOR LOAN OBLIGATIONS AND ALL FEES AND ANY OTHER
PAYMENTS (INCLUDING POST-PETITION INTEREST AND ALL COSTS AND EXPENSES) DUE
PURSUANT TO THE TERMS OF THE JUNIOR LOAN DOCUMENTS, BEFORE SUBORDINATE LENDER IS
ENTITLED TO RECEIVE ANY PAYMENT ON ACCOUNT OF THE SUBORDINATE LOAN OBLIGATIONS. 
THE JUNIOR LENDER ACKNOWLEDGES AND AGREES THAT ITS DISTRIBUTIONS IN BANKRUPTCY
MAY BE DIMINISHED IN ORDER TO PAY THE SENIOR LOAN OBLIGATIONS AND ALL FEES AND
ANY OTHER PAYMENTS (INCLUDING POST-PETITION INTEREST AND ALL COSTS AND EXPENSES)
TO THE EXTENT THE SENIOR LENDER RECEIVES PAYMENT ON ITS SECURED CLAIM IN
BANKRUPTCY EXCEEDING THE VALUE OF COLLATERAL ENCUMBERED BY THE SENIOR LENDER’S
LIEN; THE SUBORDINATE LENDER ACKNOWLEDGES AND AGREES THAT ITS DISTRIBUTIONS IN
BANKRUPTCY MAY BE DIMINISHED IN ORDER TO PAY THE SENIOR LOAN OBLIGATIONS AND/OR
THE JUNIOR LOAN OBLIGATIONS AND ALL FEES AND ANY OTHER PAYMENTS (INCLUDING
POST-PETITION INTEREST AND ALL COSTS AND EXPENSES) TO THE EXTENT THE SENIOR
LENDER AND/OR THE JUNIOR LENDER RECEIVE PAYMENT ON THEIR SECURED CLAIMS IN
BANKRUPTCY EXCEEDING THE VALUE OF COLLATERAL ENCUMBERED BY THEIR LIENS.

 

(II)           ANY PAYMENT OR DISTRIBUTION OF THE ASSETS OR PROPERTIES OF
BORROWER OF ANY KIND OR CHARACTER, WHETHER IN CASH, PROPERTY, OR SECURITIES, TO
WHICH SUBORDINATE LENDER WOULD BE ENTITLED EXCEPT FOR THE PROVISIONS OF THIS
AGREEMENT, SHALL BE PAID BY THE DEBTOR IN POSSESSION, LIQUIDATING TRUSTEE OR
AGENT OR OTHER PERSON MAKING SUCH PAYMENT OR DISTRIBUTION DIRECTLY TO FIRST,
SENIOR LENDER AND SECOND, JUNIOR LENDER; AND ANY PAYMENT OR DISTRIBUTION OF THE
ASSETS OR PROPERTIES OF BORROWER OF ANY KIND OR CHARACTER, WHETHER IN CASH,
PROPERTY, OR SECURITIES, TO WHICH JUNIOR LENDER WOULD BE ENTITLED EXCEPT FOR THE
PROVISIONS OF THIS AGREEMENT, SHALL BE PAID BY THE DEBTOR IN POSSESSION,
LIQUIDATING TRUSTEE OR AGENT OR OTHER PERSON MAKING SUCH PAYMENT OR DISTRIBUTION
DIRECTLY TO SENIOR LENDER; AND

 

(III)          IN THE EVENT THAT, NOTWITHSTANDING THE FOREGOING, ANY PAYMENT OR
DISTRIBUTION OF THE ASSETS OR PROPERTIES OF BORROWER OF ANY KIND OR CHARACTER,
WHETHER IN CASH, PROPERTY, OR SECURITIES, SHALL BE RECEIVED BY SUBORDINATE
LENDER ON ACCOUNT OF PRINCIPAL, INTEREST, FEES, OR OTHER AMOUNTS ON OR WITH
RESPECT TO THE SUBORDINATE LOAN OBLIGATIONS BEFORE ALL OF THE SENIOR LOAN
OBLIGATIONS AND JUNIOR LOAN OBLIGATIONS ARE PAID IN FULL, SUCH PAYMENTS OR
DISTRIBUTION SHALL BE RECEIVED AND HELD IN TRUST FOR AND SHALL BE PAID OVER
FIRST, TO SENIOR LENDER FORTHWITH, FOR APPLICATION TO THE PAYMENT OF THE SENIOR
LOAN OBLIGATIONS UNTIL ALL SUCH SENIOR LOAN OBLIGATIONS SHALL HAVE BEEN PAID IN
FULL IN ACCORDANCE WITH THE TERMS OF THE SENIOR LOAN DOCUMENTS AND SECOND TO
JUNIOR LENDER FORTHWITH, FOR APPLICATION TO THE PAYMENT OF THE JUNIOR LOAN
OBLIGATIONS UNTIL ALL SUCH JUNIOR LOAN OBLIGATIONS SHALL HAVE BEEN PAID IN FULL
IN ACCORDANCE WITH THE TERMS OF THE JUNIOR LOAN DOCUMENTS.

 

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(B)           TO EFFECTUATE THE FOREGOING, SUBORDINATE LENDER DOES HEREBY
IRREVOCABLY ASSIGN TO FIRST, SENIOR LENDER AND SECOND, JUNIOR LENDER ALL OF
SUBORDINATE LENDER’S RIGHTS AS A SECURED OR UNSECURED CREDITOR IN ANY PROCEEDING
AND FIRST (I) AUTHORIZES SENIOR LENDER TO TAKE, OR REFRAIN FROM TAKING, ANY
ACTION TO ASSERT, ENFORCE, MODIFY, WAIVE, RELEASE OR EXTEND SUBORDINATE LENDER’S
LIEN AND/OR CLAIM IN SUCH PROCEEDING, INCLUDING BUT NOT LIMITED TO (A) FILING A
PROOF OF CLAIM ARISING OUT OF THE SUBORDINATE LOAN OBLIGATIONS, (B) VOTING OR
REFRAINING FROM VOTING CLAIMS ARISING FROM THE SUBORDINATE LOAN OBLIGATIONS,
EITHER IN SENIOR LENDER’S NAME OR IN THE NAME OF SENIOR LENDER AS
ATTORNEY-IN-FACT OF SUBORDINATE LENDER, (C) ACCEPTING OR REJECTING ANY PAYMENT
OR DISTRIBUTION MADE WITH RESPECT TO ANY CLAIM ARISING FROM THE SUBORDINATE LOAN
OBLIGATIONS AND APPLYING SUCH PAYMENT AND DISTRIBUTION TO PAYMENT OF SENIOR
LENDER’S CLAIM UNTIL THE SENIOR LOAN OBLIGATIONS ARE PAID AND SATISFIED IN FULL
IN ACCORDANCE WITH THEIR TERMS, AND (D) TAKING ANY AND ALL ACTIONS AND EXECUTING
ANY AND ALL INSTRUMENTS NECESSARY TO EFFECTUATE THE FOREGOING AND, AMONG OTHER
THINGS, TO ESTABLISH SENIOR LENDER’S ENTITLEMENT TO ASSERT SUBORDINATE LENDER’S
CLAIM IN SUCH PROCEEDING, PROVIDED THAT NOTWITHSTANDING THE FOREGOING
PROVISIONS, WITH RESPECT TO ANY PLAN OF REORGANIZATION PROPOSED IN A PROCEEDING
IN RESPECT OF WHICH CREDITORS ARE VOTING, SENIOR LENDER MAY VOTE ON BEHALF OF
SUBORDINATE LENDER ONLY IF THE PROPOSED PLAN WOULD RESULT IN SENIOR LENDING
BEING “IMPAIRED” (AS SUCH TERM IS DEFINED IN THE BANKRUPTCY CODE); AND SECOND,
(II) IF SENIOR LENDER HAS BEEN PAID IN FULL ALL AMOUNTS PAYABLE UNDER THE SENIOR
LOAN DOCUMENTS, AUTHORIZES JUNIOR LENDER TO TAKE, OR REFRAIN FROM TAKING, ANY
ACTION TO ASSERT, ENFORCE, MODIFY, WAIVE, RELEASE OR EXTEND SUBORDINATE LENDER’S
LIEN AND/OR CLAIM IN SUCH PROCEEDING, INCLUDING BUT NOT LIMITED TO (A) FILING A
PROOF OF CLAIM ARISING OUT OF THE SUBORDINATE LOAN OBLIGATIONS, (B) VOTING OR
REFRAINING FROM VOTING CLAIMS ARISING FROM THE SUBORDINATE LOAN OBLIGATIONS,
EITHER IN JUNIOR LENDER’S NAME OR IN THE NAME OF JUNIOR LENDER AS
ATTORNEY-IN-FACT OF SUBORDINATE LENDER, (C) ACCEPTING OR REJECTING ANY PAYMENT
OR DISTRIBUTION MADE WITH RESPECT TO ANY CLAIM ARISING FROM THE SUBORDINATE LOAN
OBLIGATIONS AND APPLYING SUCH PAYMENT AND DISTRIBUTION TO PAYMENT OF JUNIOR
LENDER’S CLAIM UNTIL THE JUNIOR LOAN OBLIGATIONS ARE PAID AND SATISFIED IN FULL
IN ACCORDANCE WITH THEIR TERMS, AND (D) TAKING ANY AND ALL ACTIONS AND EXECUTING
ANY AND ALL INSTRUMENTS NECESSARY TO EFFECTUATE THE FOREGOING AND, AMONG OTHER
THINGS, TO ESTABLISH JUNIOR LENDER’S ENTITLEMENT TO ASSERT SUBORDINATE LENDER’S
CLAIM IN SUCH PROCEEDING, PROVIDED THAT NOTWITHSTANDING THE FOREGOING
PROVISIONS, WITH RESPECT TO ANY PLAN OF REORGANIZATION PROPOSED IN A PROCEEDING
IN RESPECT OF WHICH CREDITORS ARE VOTING, JUNIOR LENDER (IF THERE IS NO SENIOR
LENDER) MAY VOTE ON BEHALF OF SUBORDINATE LENDER ONLY IF THE PROPOSED PLAN WOULD
RESULT IN JUNIOR LENDER BEING “IMPAIRED” (AS SUCH TERM IS DEFINED IN THE
BANKRUPTCY CODE).

 

20.           ADDITIONAL WAIVERS AND AGREEMENTS.

 

(A)           SUBORDINATE LENDER WAIVES THE RIGHT TO REQUIRE SENIOR LENDER TO
PROCEED AGAINST BORROWER OR ANY OTHER PERSON LIABLE ON ANY SENIOR LOAN
OBLIGATION OR JUNIOR LENDER OR TO PROCEED AGAINST OR EXHAUST ANY SECURITY HELD
FROM BORROWER OR OTHER PERSON, OR TO PURSUE ANY OTHER REMEDY IN SENIOR LENDER’S
POWER WHATSOEVER, AND SUBORDINATE LENDER WAIVES THE RIGHT TO HAVE THE PROPERTY
OF BORROWER APPLIED TO THE DISCHARGE OF, FIRST, ANY SENIOR LOAN OBLIGATION AND,
SECOND, ANY JUNIOR LOAN OBLIGATION.  JUNIOR LENDER WAIVES THE RIGHT TO REQUIRE
SENIOR LENDER TO PROCEED AGAINST BORROWER OR ANY

 

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OTHER PERSON LIABLE ON ANY SENIOR LOAN OBLIGATION, TO PROCEED AGAINST OR EXHAUST
ANY SECURITY HELD FROM BORROWER OR OTHER PERSON, OR TO PURSUE ANY OTHER REMEDY
IN SENIOR LENDER’S POWER WHATSOEVER, AND JUNIOR LENDER WAIVES THE RIGHT TO HAVE
THE PROPERTY OF BORROWER FIRST APPLIED TO THE DISCHARGE OF ANY SENIOR LOAN
OBLIGATION.  SUBJECT TO THE TERMS OF THIS AGREEMENT, THE LOCK BOX AGREEMENT AND
THE SENIOR LOAN DOCUMENTS, SENIOR LENDER MAY, AT ITS ELECTION, EXERCISE ANY
RIGHT OR REMEDY SENIOR LENDER MAY HAVE AGAINST BORROWER OR ANY SECURITY HELD BY
SENIOR LENDER, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO FORECLOSE UPON ANY
SUCH SECURITY BY ONE OR MORE JUDICIAL OR NONJUDICIAL SALES, WHETHER OR NOT EVERY
ASPECT OF ANY SUCH SALE IS COMMERCIALLY REASONABLE, WITHOUT AFFECTING OR
IMPAIRING IN ANY WAY THE OBLIGATIONS OF SUBORDINATE LENDER HEREUNDER, EXCEPT TO
THE EXTENT, FIRST, THE SENIOR LOAN OBLIGATIONS AND, SECOND, JUNIOR LOAN
OBLIGATIONS HAVE BEEN PAID, AND SUBORDINATE LENDER WAIVES ANY DEFENSE ARISING
OUT OF THE ABSENCE, IMPAIRMENT OR LOSS OF ANY RIGHT OF REIMBURSEMENT,
CONTRIBUTION OR SUBROGATION OR ANY OTHER RIGHT OR REMEDY AGAINST BORROWER OR ANY
SUCH SECURITY, WHETHER RESULTING FROM SUCH ELECTION BY SENIOR LENDER OR
OTHERWISE EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT.

 

(B)           SUBORDINATE LENDER ASSUMES ALL RESPONSIBILITY FOR KEEPING ITSELF
INFORMED AS TO THE CONDITION (FINANCIAL OR OTHERWISE), BUSINESS, ASSETS AND
OPERATIONS OF BORROWER, THE CONDITION OF ANY COLLATERAL AND ALL OTHER
CIRCUMSTANCES THAT MIGHT IN ANY WAY AFFECT SUBORDINATE LENDER’S RISK UNDER THIS
AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE RISK OF NONPAYMENT OF THE SENIOR
LOAN OBLIGATIONS OR JUNIOR LOAN OBLIGATIONS), AND SENIOR LENDER AND JUNIOR
LENDER SHALL HAVE NO DUTY OR OBLIGATION WHATSOEVER TO OBTAIN OR DISCLOSE TO
SUBORDINATE LENDER ANY INFORMATION OR DOCUMENTS RELATIVE TO SUCH CONDITION,
BUSINESS, ASSETS, OR OPERATIONS OF BORROWER OR SUCH RISK, WHETHER ACQUIRED BY
SENIOR LENDER OR JUNIOR LENDER IN THE COURSE OF ITS RELATIONSHIP WITH BORROWER
OR OTHERWISE.

 

(C)           JUNIOR LENDER ASSUMES ALL RESPONSIBILITY FOR KEEPING ITSELF
INFORMED AS TO THE CONDITION (FINANCIAL OR OTHERWISE), BUSINESS, ASSETS AND
OPERATIONS OF BORROWER, THE CONDITION OF ANY COLLATERAL AND ALL OTHER
CIRCUMSTANCES THAT MIGHT IN ANY WAY AFFECT JUNIOR LENDER’S RISK UNDER THIS
AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE RISK OF NONPAYMENT OF THE SENIOR
LOAN OBLIGATIONS), AND SENIOR LENDER SHALL HAVE NO DUTY OR OBLIGATION WHATSOEVER
TO OBTAIN OR DISCLOSE TO JUNIOR LENDER ANY INFORMATION OR DOCUMENTS RELATIVE TO
SUCH CONDITION, BUSINESS, ASSETS, OR OPERATIONS OF BORROWER OR SUCH RISK,
WHETHER ACQUIRED BY SENIOR LENDER IN THE COURSE OF ITS RELATIONSHIP WITH
BORROWER OR OTHERWISE.

 

(D)           SUBORDINATE LENDER SHALL HAVE NO DUTY OR OBLIGATION WHATSOEVER TO
OBTAIN OR DISCLOSE TO JUNIOR LENDER OR SENIOR LENDER ANY INFORMATION OR
DOCUMENTS RELATIVE TO THE CONDITION, BUSINESS, ASSETS, OR OPERATIONS OF
BORROWER, WHETHER ACQUIRED BY SUBORDINATE LENDER IN THE COURSE OF ITS
RELATIONSHIP WITH BORROWER OR OTHERWISE.

 

(E)           THE SUBORDINATE NOTE SHALL BEAR A LEGEND INDICATING THAT PAYMENT
OF THE SUBORDINATE LOAN OBLIGATIONS IS SUBJECT TO THE TERMS OF THIS AGREEMENT.

 

(F)            THE JUNIOR NOTE SHALL BEAR A LEGEND INDICATING THAT PAYMENT OF
THE JUNIOR LOAN OBLIGATIONS IS SUBJECT TO THE TERMS OF THIS AGREEMENT.

 

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(G)           SUBORDINATE LENDER ACKNOWLEDGES THAT EACH OF THE SENIOR LENDER AND
JUNIOR LENDER HAS MADE NO WARRANTIES OR REPRESENTATIONS TO IT WITH RESPECT TO
THE DUE EXECUTION, LEGALITY, VALIDITY, COMPLETENESS OR ENFORCEABILITY OF THE
SENIOR LOAN DOCUMENTS OR JUNIOR LOAN DOCUMENTS OR THE COLLECTABILITY OF THE
SENIOR LOAN OBLIGATIONS OR JUNIOR LOAN OBLIGATIONS EVIDENCED THEREBY.

 

(H)           JUNIOR LENDER ACKNOWLEDGES THAT SENIOR LENDER HAS MADE NO
WARRANTIES OR REPRESENTATIONS TO IT WITH RESPECT TO THE DUE EXECUTION, LEGALITY,
VALIDITY, COMPLETENESS OR ENFORCEABILITY OF THE SENIOR LOAN DOCUMENTS OR THE
COLLECTABILITY OF THE SENIOR LOAN OBLIGATIONS EVIDENCED THEREBY.

 

(I)            IF ANY OF THE SENIOR LOAN OBLIGATIONS OR JUNIOR LOAN OBLIGATIONS
OR ANY LIEN SECURING SAME SHOULD BE INVALIDATED, AVOIDED OR SET ASIDE, THE
SUBORDINATION PROVIDED FOR HEREIN NEVERTHELESS SHALL CONTINUE IN FULL FORCE AND
EFFECT AND, WITH RESPECT TO THE SENIOR LOAN OBLIGATIONS, AS AMONG SENIOR LENDER,
JUNIOR LENDER AND SUBORDINATE LENDER, OR WITH RESPECT TO THE JUNIOR LOAN
OBLIGATIONS, AS BETWEEN THE JUNIOR LENDER AND THE SUBORDINATE LENDER, OR WITH
RESPECT TO THE JUNIOR LOAN OBLIGATIONS, AS BETWEEN THE JUNIOR LENDER AND THE
SUBORDINATE LENDER, SHALL BE AND BE DEEMED TO REMAIN IN FULL FORCE AND EFFECT.

 

(J)            SUBORDINATE LENDER HEREBY EXPRESSLY, UNCONDITIONALLY AND
IRREVOCABLY WAIVES ALL RIGHTS (I) UNDER SECTIONS 361 THROUGH 365, 502(E) AND 509
OF THE BANKRUPTCY CODE (OR ANY SIMILAR SECTIONS HEREAFTER IN EFFECT UNDER ANY
OTHER FEDERAL OR STATE LAWS OR LEGAL OR EQUITABLE PRINCIPLES RELATING TO
BANKRUPTCY, INSOLVENCY, REORGANIZATIONS, LIQUIDATIONS OR OTHERWISE FOR THE
RELIEF OF DEBTORS OR PROTECTION OF CREDITORS), AND (II) TO SEEK OR OBTAIN
CONVERSION TO A DIFFERENT TYPE OF PROCEEDING OR TO SEEK OR OBTAIN DISMISSAL OF A
PROCEEDING, IN EACH CASE IN RELATION TO A BANKRUPTCY, REORGANIZATION, INSOLVENCY
OR OTHER PROCEEDING UNDER SIMILAR LAWS WITH RESPECT TO BORROWER.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, SUBORDINATE LENDER HEREBY EXPRESSLY,
UNCONDITIONALLY AND IRREVOCABLY WAIVES (A) THE RIGHT TO SEEK TO PROVIDE CREDIT
(SECURED OR OTHERWISE) TO BORROWER IN ANY WAY UNDER SECTION 364 OF THE
BANKRUPTCY CODE UNLESS THE SAME IS SUBORDINATED IN RIGHT AND TIME OF PAYMENT IN
ALL ASPECTS TO (I) THE SENIOR LOAN OBLIGATIONS IN A MANNER ACCEPTABLE TO SENIOR
LENDER IN ITS SOLE AND ABSOLUTE DISCRETION AND (II) THE JUNIOR LOAN OBLIGATIONS
IN A MANNER ACCEPTABLE TO THE JUNIOR LENDER IN ITS SOLE DISCRETION, IF
APPLICABLE; (B) THE RIGHT TO TAKE A POSITION INCONSISTENT WITH OR CONTRARY TO
THAT OF SENIOR LENDER (INCLUDING A POSITION BY SENIOR LENDER TO TAKE NO ACTION)
OR JUNIOR LENDER (INCLUDING A POSITION BY THE JUNIOR LENDER TO TAKE NO ACTION)
IF BORROWER SEEKS TO USE, SELL OR LEASE COLLATERAL (OR THE PROCEEDS OR PRODUCTS
THEREOF) UNDER SECTION 363 OF THE BANKRUPTCY CODE; (C) THE RIGHT TO RECEIVE ANY
COLLATERAL SECURITY (INCLUDING ANY “SUPER PRIORITY” OR EQUAL OR “PRIMING” OR
REPLACEMENT LIEN) FOR ANY SUBORDINATE LOAN OBLIGATION UNLESS SENIOR LENDER AND
JUNIOR LENDER HAVE RECEIVED SENIOR POSITIONS ACCEPTABLE TO SENIOR LENDER AND
JUNIOR LENDER IN THEIR ABSOLUTE DISCRETION TO SECURE, FIRST, ALL SENIOR LOAN
OBLIGATIONS (IN THE SAME COLLATERAL TO THE EXTENT COLLATERAL IS INVOLVED) OR,
SECOND, ALL JUNIOR LOAN OBLIGATIONS (IN THE SAME COLLATERAL TO THE EXTENT
COLLATERAL IS INVOLVED); AND (D) THE RIGHT TO SEEK ADEQUATE PROTECTION IN
RESPECT OF COLLATERAL (OR THE PROCEEDS OR PRODUCTS THEREOF) UNDER SECTION 363 OR
361 OF THE BANKRUPTCY CODE.

 

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(K)           JUNIOR LENDER HEREBY EXPRESSLY, UNCONDITIONALLY AND IRREVOCABLY
WAIVES ALL RIGHTS (I) UNDER SECTIONS 361 THROUGH 365, 502(E) AND 509 OF THE
BANKRUPTCY CODE (OR ANY SIMILAR SECTIONS HEREAFTER IN EFFECT UNDER ANY OTHER
FEDERAL OR STATE LAWS OR LEGAL OR EQUITABLE PRINCIPLES RELATING TO BANKRUPTCY,
INSOLVENCY, REORGANIZATIONS, LIQUIDATIONS OR OTHERWISE FOR THE RELIEF OF DEBTORS
OR PROTECTION OF CREDITORS), AND (II) TO SEEK OR OBTAIN CONVERSION TO A
DIFFERENT TYPE OF PROCEEDING OR TO SEEK OR OBTAIN DISMISSAL OF A PROCEEDING, IN
EACH CASE IN RELATION TO A BANKRUPTCY, REORGANIZATION, INSOLVENCY OR OTHER
PROCEEDING UNDER SIMILAR LAWS WITH RESPECT TO BORROWER.  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, JUNIOR LENDER HEREBY EXPRESSLY, UNCONDITIONALLY AND
IRREVOCABLY WAIVES (A) THE RIGHT TO SEEK TO PROVIDE CREDIT (SECURED OR
OTHERWISE) TO BORROWER IN ANY WAY UNDER SECTION 364 OF THE BANKRUPTCY CODE
UNLESS THE SAME IS SUBORDINATED IN RIGHT AND TIME OF PAYMENT IN ALL ASPECTS TO
THE SENIOR LOAN OBLIGATIONS IN A MANNER ACCEPTABLE TO SENIOR LENDER IN ITS SOLE
AND ABSOLUTE DISCRETION; (B) THE RIGHT TO TAKE A POSITION INCONSISTENT WITH OR
CONTRARY TO THAT OF SENIOR LENDER (INCLUDING A POSITION BY SENIOR LENDER TO TAKE
NO ACTION) IF BORROWER SEEKS TO USE, SELL OR LEASE COLLATERAL (OR THE PROCEEDS
OR PRODUCTS THEREOF) UNDER SECTION 363 OF THE BANKRUPTCY CODE; (C) THE RIGHT TO
RECEIVE ANY COLLATERAL SECURITY (INCLUDING ANY “SUPER PRIORITY” OR EQUAL OR
“PRIMING” OR REPLACEMENT LIEN) FOR ANY JUNIOR LOAN OBLIGATION UNLESS SENIOR
LENDER HAS RECEIVED A SENIOR POSITION ACCEPTABLE TO SENIOR LENDER IN ITS SOLE
AND ABSOLUTE DISCRETION TO SECURE ALL SENIOR LOAN OBLIGATIONS (IN THE SAME
COLLATERAL TO THE EXTENT COLLATERAL IS INVOLVED); AND (D) THE RIGHT TO SEEK
ADEQUATE PROTECTION IN RESPECT OF COLLATERAL (OR THE PROCEEDS OR PRODUCTS
THEREOF) UNDER SECTION 363 OR 361 OF THE BANKRUPTCY CODE.

 

21.           CONTINUING BENEFITS.  NO RIGHT OF SENIOR LENDER OR ANY PRESENT OR
FUTURE HOLDER OF THE SENIOR LOAN OBLIGATIONS, OR JUNIOR LENDER OR ANY PRESENT OR
FUTURE HOLDER OF THE JUNIOR LOAN OBLIGATIONS, TO ENFORCE THE SUBORDINATION AS
PROVIDED HEREIN SHALL AT ANY TIME IN ANY WAY BE PREJUDICED OR IMPAIRED BY ANY
ACT OR FAILURE TO ACT ON THE PART OF BORROWER OR ANY OTHER PARTY, WHETHER
BORROWER, GUARANTOR OR OTHERWISE, OR BY ANY NONCOMPLIANCE BY BORROWER OR ANY
BORROWER, GUARANTOR OR OTHERWISE WITH THE TERMS OF THE SENIOR NOTE OR JUNIOR
NOTE, AS APPLICABLE, OR ANY OTHER OF THE SENIOR LOAN DOCUMENTS OR ANY OTHER OF
THE JUNIOR LOAN DOCUMENTS, AS APPLICABLE, REGARDLESS OF ANY KNOWLEDGE THEREOF
WHICH SUCH HOLDER MAY HAVE OR BE OTHERWISE CHARGED WITH.

 

22.           NO WAIVER; MODIFICATION.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, NEITHER THIS AGREEMENT NOR THE TRANSACTIONS HEREIN
CONTEMPLATED SHALL OPERATE TO WAIVE THE ENFORCEMENT AFTER THE DATE HEREOF OF ANY
DUE ON SALE, DUE ON ENCUMBRANCE OR ACCELERATING TRANSFER PROVISION CONTAINED IN
THE SENIOR LOAN DOCUMENTS, JUNIOR LOAN DOCUMENTS OR THE SUBORDINATE LOAN
DOCUMENTS.  NO DELAY ON THE PART OF SENIOR LENDER, JUNIOR LENDER OR SUBORDINATE
LENDER IN THE EXERCISE OF ANY RIGHT OR REMEDY SHALL OPERATE AS A WAIVER THEREOF,
AND NO SINGLE OR PARTIAL EXERCISE BY SENIOR LENDER, JUNIOR LENDER OR SUBORDINATE
LENDER OF ANY RIGHT OR REMEDY SHALL PRECLUDE OTHER OR FURTHER EXERCISE THEREOF
OR THE EXERCISE OF ANY RIGHT OR REMEDY; NOR SHALL ANY MODIFICATION OR WAIVER OF
ANY OF THE PROVISIONS OF THIS AGREEMENT BE BINDING UPON SENIOR LENDER, JUNIOR
LENDER OR SUBORDINATE LENDER EXCEPT AS EXPRESSLY SET FORTH IN A WRITING DULY
SIGNED AND DELIVERED BY OR ON BEHALF OF SENIOR LENDER, JUNIOR LENDER OR
SUBORDINATE LENDER.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS.

 

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23.           REINSTATEMENT OF AGREEMENT.  THE PROVISIONS OF THIS AGREEMENT
SHALL CONTINUE TO BE EFFECTIVE OR BE REINSTATED, AS THE CASE MAY BE, IF AT ANY
TIME ANY PAYMENT OF ANY OF THE SENIOR LOAN OBLIGATIONS, JUNIOR LOAN OBLIGATIONS
OR THE SUBORDINATE LOAN OBLIGATIONS IS INVALIDATED, DECLARED TO BE FRAUDULENT OR
PREFERENTIAL, SET ASIDE, RESCINDED OR MUST OTHERWISE BE RETURNED BY SENIOR
LENDER, JUNIOR LENDER OR SUBORDINATE LENDER, AS THE CASE MAY BE, UNDER ANY
BANKRUPTCY LAW, STATE OR FEDERAL LAW, COMMON LAW OR EQUITABLE CAUSE, ALL AS
THOUGH SUCH PAYMENT HAD NOT BEEN MADE.

 

24.           BORROWER’S WAIVER.  THE BORROWER HEREBY WAIVES (A) NOTICE OF
ACCEPTANCE OF THIS AGREEMENT BY SENIOR LENDER, JUNIOR LENDER AND SUBORDINATE
LENDER, (B) NOTICE OF THE EXISTENCE OR CREATION OR NONPAYMENT OF ALL OR ANY OF
THE SENIOR LOAN OBLIGATIONS, JUNIOR LOAN OBLIGATIONS AND THE SUBORDINATE LOAN
OBLIGATIONS, AND (C) ALL DILIGENCE IN THE COLLECTION OR PROTECTION OF OR
REALIZATION UPON THE SENIOR LOAN OBLIGATIONS OR THE COLLATERAL THEREFOR, THE
JUNIOR LOAN OBLIGATIONS OR THE COLLATERAL THEREFOR OR THE SUBORDINATE LOAN
OBLIGATIONS OR THE COLLATERAL THEREFOR.

 

25.           LEGEND.

 

(A)           SUBORDINATE LENDER AGREES TO (I) EXECUTE A MEMORANDUM OF
INTERCREDITOR AGREEMENT IN RESPECT OF THIS AGREEMENT AND (II) CAUSE APPROPRIATE
ENTRIES IN THE BOOKS AND RECORDS OF SUBORDINATE LENDER TO INDICATE THAT THE
SUBORDINATE LOAN OBLIGATIONS ARE SUBJECT TO, FIRST, THE SENIOR LOAN OBLIGATIONS
AND, SECOND, JUNIOR LOAN OBLIGATIONS.

 

(B)           JUNIOR LENDER AGREES TO (I) EXECUTE A MEMORANDUM OF INTERCREDITOR
AGREEMENT IN RESPECT OF THIS AGREEMENT AND (II) CAUSE APPROPRIATE ENTRIES IN THE
BOOKS AND RECORDS OF JUNIOR LENDER TO INDICATE THAT THE JUNIOR LOAN OBLIGATIONS
ARE SUBJECT TO THE SENIOR LOAN OBLIGATIONS.

 

26.           NOTICES.  ANY NOTICE WHICH A PARTY IS REQUIRED OR MAY DESIRE TO
GIVE THE OTHER SHALL BE IN WRITING AND MAY BE SENT BY FACSIMILE, PERSONAL
DELIVERY OR BY MAIL (EITHER (I) BY UNITED STATES REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID, OR (II) BY FEDERAL EXPRESS OR SIMILAR
GENERALLY RECOGNIZED OVERNIGHT CARRIER REGULARLY PROVIDING PROOF OF DELIVERY),
ADDRESSED AS FOLLOWS (SUBJECT TO THE RIGHT OF A PARTY TO DESIGNATE A DIFFERENT
ADDRESS FOR ITSELF BY NOTICE SIMILARLY GIVEN AT LEAST FIFTEEN (15) DAYS IN
ADVANCE):

 

 

If to Subordinate Lender:

 

 

 

Lend Lease (US) Capital Inc.

 

700 Lanidex Plaza

 

Parsippany, NJ 07054

 

Attention: President

 

Telecopy: (973) 503-5730

 

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With copies to:

 

 

 

Lend Lease (US) Capital Inc.

 

Three Coliseum Centre

 

2550 West Tyvola Road

 

Suite 600

 

Charlotte, North Carolina 28217

 

Attention: Treasurer

 

Telecopy: (704) 357-2854

 

 

 

and to:

 

 

 

Lend Lease (US) Capital Inc.

 

700 Lanidex Plaza

 

Parsippany, New Jersey 07054

 

Attention: Secretary

 

Telecopy: (973) 503-5730

 

 

 

and to:

 

 

 

Perkins Coie LLP

 

1201 Third Avenue, Suite 4800

 

Seattle, WA 98101

 

Attention:

Arthur Kolios

 

 

and James Cowan

 

Telecopy:

(206) 359-9222 and

 

 

(503) 346-2065

 

 

 

If to Junior Lender:

 

 

 

Behringer Harvard PAL I, LLC

 

15601 Dallas Parkway, Suite 600

 

Dallas, TX 75001

 

Attention: Andrew Bruce

 

Telecopy: (214) 655-1610

 

 

 

With copies to:

 

 

 

Behringer Harvard PAL I, LLC

 

15601 Dallas Parkway, Suite 600

 

Dallas, TX 75001

 

Attention: Chief Legal Officer

 

Telecopy: (214) 655-1610

 

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and

 

 

 

Powell Coleman & Arnold, LLP

 

8080 North Central Expressway

 

Suite 1380

 

Dallas, TX 75206

 

Attention: Patrick M. Arnold

 

Telecopy: (214) 373-8768

 

 

If to Senior Lender:

 

 

 

Bank of America, N.A.

 

901 Main Street, 20th Floor

 

Dallas, TX 75202

 

Attention: Mr. Jamison L. Fox

 

Telecopy: (214) 209-2090

 

 

 

If to Borrower:

 

 

 

Rest Easy LLC

 

c/o Actus Lend Lease LLC

 

1801 West End Avenue

 

Suite 1700

 

Nashville, TN 37203

 

Attention: President

 

Telecopy: (615) 963-2686

 

 

 

With copies to:

 

 

 

Rest Easy LLC

 

c/o Actus Lend Lease LLC

 

700 Lanidex Plaza

 

Parsippany, NJ 07054

 

Attention: General Counsel

 

Telecopy: (973) 503-5730

 

 

 

Lowenstein Sandler PC

 

65 Livingston Avenue

 

Roseland, NJ 07068

 

Attention: Edward J. Hunter, Esq.

 

Telecopy: (973) 597-2590

 

27.           PRIORITY.  THE PRIORITIES HEREIN SPECIFIED ARE APPLICABLE
IRRESPECTIVE OF THE TIME OF CREATION OF THE SENIOR LOAN OBLIGATIONS, JUNIOR LOAN
OBLIGATIONS OR THE SUBORDINATE LOAN OBLIGATIONS.

 

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28.           FURTHER ASSURANCES.  SO LONG AS THE SENIOR LOAN OBLIGATIONS,
JUNIOR LOAN OBLIGATIONS AND THE SUBORDINATE LOAN OBLIGATIONS REMAIN OUTSTANDING,
EITHER PARTY SHALL EXECUTE, ACKNOWLEDGE, AND DELIVER UPON THE DEMAND OF THE
OTHER PARTY, AT ANY TIME OR TIMES, ANY AND ALL FURTHER DOCUMENTS OR INSTRUMENTS
IN RECORDABLE FORM FOR THE PURPOSE OF FURTHER CONFIRMING THE SUBORDINATION AND
THE AGREEMENTS HEREIN SET FORTH.

 

29.           ESTOPPEL CERTIFICATE.  EACH OF SENIOR LENDER, JUNIOR LENDER AND
SUBORDINATE LENDER HEREBY AGREES THAT WITHIN TEN (10) DAYS AFTER WRITTEN DEMAND
OF THE OTHER PARTY, IT SHALL EXECUTE, ACKNOWLEDGE AND DELIVER A CERTIFICATION
SETTING FORTH THE TOTAL AMOUNT OF INDEBTEDNESS OWED TO IT UNDER THE SENIOR LOAN
DOCUMENTS, JUNIOR LOAN DOCUMENTS OR THE SUBORDINATE LOAN DOCUMENTS, AS THE CASE
MAY BE, AND SUCH OTHER CERTIFICATIONS AS MAY BE REASONABLY REQUESTED BY THE
OTHER PARTY.  NOTWITHSTANDING THE FOREGOING, NONE OF SENIOR LENDER, JUNIOR
LENDER OR SUBORDINATE LENDER SHALL BE OBLIGATED TO GIVE SUCH CERTIFICATION MORE
FREQUENTLY THAN ONCE EVERY OTHER CALENDAR MONTH.

 

30.           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED,
INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO THE CONFLICT-OF-LAWS PRINCIPLES THEREOF).  IT IS THE INTENT
AND PURPOSE OF THE PARTIES HERETO THAT THE PROVISIONS OF SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS AGREEMENT. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY PROVIDED IN THE FOREGOING, IT IS
ACKNOWLEDGED AND AGREED THAT AS TO MATTERS WHICH RELATE TO THE CREATION,
PERFECTION AND ENFORCEMENT OF SECURITY INTERESTS CREATED UNDER THE SENIOR LOAN
DOCUMENTS, JUNIOR LOAN DOCUMENTS AND SUBORDINATE LOAN DOCUMENTS, THE SAME SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE APPLICABLE
COLLATERAL SHALL BE LOCATED OR, AS TO ACCOUNTS CONSTITUTING COLLATERAL, THE
JURISDICTION DESIGNATED IN THE APPLICABLE SECURITY DOCUMENTATION GOVERNING SUCH
ACCOUNTS AS COLLATERAL.

 

31.           FORUM.  ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED IN STATE OR FEDERAL COURTS LOCATED IN THE
STATE AND COUNTY OF NEW YORK AND EACH PARTY TO THIS AGREEMENT HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY CONSENTS TO THE
JURISDICTION OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING.  THE PARTIES HERETO EACH HEREBY IRREVOCABLY WAIVE ANY OBJECTION
WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM OR LACKS JURISDICTION OVER SUCH PARTY.  IT IS THE INTENT AND PURPOSE OF
THE PARTIES HERETO THAT THE PROVISIONS OF SECTION 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS AGREEMENT.

 

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32.           WAIVER OF JURY TRIAL.  SENIOR LENDER, JUNIOR LENDER AND
SUBORDINATE LENDER WAIVE TRIAL BY JURY IN RESPECT OF ANY CLAIM, COUNTERCLAIM,
ACTION OR CAUSE OF ACTION RELATING TO OR ARISING OUT OF THIS AGREEMENT.  THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY SENIOR LENDER, JUNIOR
LENDER AND SUBORDINATE LENDER AND SENIOR LENDER, JUNIOR LENDER AND SUBORDINATE
LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE PARTIES ENTERING INTO THIS AGREEMENT.  SENIOR LENDER, JUNIOR LENDER AND
SUBORDINATE LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION 32
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL.  EACH OF
SENIOR LENDER, JUNIOR LENDER AND SUBORDINATE LENDER FURTHER REPRESENTS AND
WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.

 

33.           SENIOR LENDER RIGHTS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, IF AT ANY TIME ALL OBLIGATIONS OWED TO THE SENIOR LENDER UNDER THE
SENIOR LOAN DOCUMENTS AND THE PROJECT DOCUMENTS, AS DEFINED IN THE SENIOR LOAN
AGREEMENT, HAVE BEEN PAID IN FULL, THE RIGHTS AND OBLIGATIONS OF THE SENIOR
LENDER HEREUNDER SHALL NO LONGER BE IN EFFECT.  HOWEVER, NOTWITHSTANDING THE
PRECEDING SENTENCE, TO THE EXTENT THAT SENIOR LENDER HAS ANY CONSENT, APPROVAL,
PARTICIPATION OR SIMILAR RIGHTS OR RIGHTS TO RECEIVE NOTICES, REPORTS OR OTHER
INFORMATION UNDER THE PROJECT DOCUMENTS, AT SUCH TIME AS ALL OBLIGATIONS OWED TO
THE SENIOR LENDER UNDER THE SENIOR LOAN DOCUMENTS AND THE PROJECT DOCUMENTS HAVE
BEEN PAID IN FULL, ALL SUCH RIGHTS SHALL BE DEEMED ASSIGNED TO JUNIOR LENDER,
UNLESS JUNIOR LENDER REJECTS SUCH ASSIGNMENT (WHICH IT HEREBY RESERVES THE RIGHT
TO DO) IN A WRITTEN INSTRUMENT EXECUTED BY JUNIOR LENDER.

 

34.           JUNIOR LENDER RIGHTS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, IF AT ANY TIME ALL OBLIGATIONS OWED TO THE JUNIOR LENDER UNDER THE
JUNIOR LOAN DOCUMENTS AND THE PROJECT DOCUMENTS, AS DEFINED IN THE JUNIOR LOAN
AGREEMENT, HAVE BEEN PAID IN FULL, THE RIGHTS AND OBLIGATIONS OF THE JUNIOR
LENDER HEREUNDER SHALL NO LONGER BE IN EFFECT.  HOWEVER, NOTWITHSTANDING THE
PRECEDING SENTENCE, TO THE EXTENT THAT JUNIOR LENDER HAS ANY CONSENT, APPROVAL,
PARTICIPATION OR SIMILAR RIGHTS OR RIGHTS TO RECEIVE NOTICES, REPORTS OR OTHER
INFORMATION UNDER THE PROJECT DOCUMENTS (INCLUDING, WITHOUT LIMITATION, RIGHTS
OF THE SENIOR LENDER TO WHICH THE JUNIOR LENDER HAS SUCCEEDED PURSUANT TO
SECTION 33), AT SUCH TIME AS ALL OBLIGATIONS OWED TO THE JUNIOR LENDER UNDER THE
JUNIOR LOAN DOCUMENTS AND THE PROJECT DOCUMENTS HAVE BEEN PAID IN FULL, ALL SUCH
RIGHTS (INCLUDING, WITHOUT LIMITATION, RIGHTS OF THE SENIOR LENDER TO WHICH THE
JUNIOR LENDER HAS SUCCEEDED PURSUANT TO SECTION 33) SHALL BE DEEMED ASSIGNED TO
SUBORDINATE LENDER, UNLESS SUBORDINATE LENDER REJECTS SUCH ASSIGNMENT (WHICH IT
HEREBY RESERVES THE RIGHT TO DO) IN A WRITTEN INSTRUMENT EXECUTED BY SUBORDINATE
LENDER.

 

45

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.

 

 

 

SENIOR LENDER:

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

By:

/s/ Jamison Fox

 

 

Jamison Fox

 

 

Senior Vice President

 

 

 

 

 

JUNIOR LENDER:

 

 

 

BEHRINGER HARVARD PAL I, LLC, a Delaware limited liability company

 

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

 

Gerald J. Reihsen, III

 

 

Executive Vice President

 

 

 

 

 

SUBORDINATE LENDER:

 

 

 

LEND LEASE (US) CAPITAL INC.

 

 

 

By:

/s/ Edward R. Cook

 

 

Edward R. Cook

 

 

Vice President

 

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