Exhibit 10.1

 

 

 

LOAN AGREEMENT

 

By and among

 

EACH OF THE ENTITIES LISTED ON SCHEDULE I ATTACHED HERETO,

collectively, as Borrower,

 

THE LENDERS FROM TIME TO TIME PARTY HERETO,

collectively, as Lender

 

COLUMN FINANCIAL, INC.,

as Initial Lender

 

and

 

COLUMN FINANCIAL, INC.,

as Agent

 

and

 

Acknowledged and Agreed to by

 

ARC NY120W5701 TRS, LLC,

as Operating Lessee,

solely with respect to Sections 2.6, 7.12, 9.1.1, 9.2(a), 9.4(b) and 9.5 and
Articles IV, V, VI, VIII and X

 

Dated as of December 20, 2016 

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page       ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1       Section
1.1 Definitions. 1       Section 1.2 Principles of Construction. 45      
ARTICLE II GENERAL TERMS 45       Section 2.1 Loan Commitment; Disbursement to
Borrower. 45       Section 2.2 Interest Rate. 46       Section 2.3 Loan Payment.
52       Section 2.4 Prepayments. 53       Section 2.5 Release of Property. 54  
    Section 2.6 Cash Management. 58       Section 2.7 Withholding Taxes. 62    
  Section 2.8 Extension of the Initial Maturity Date. 65       Section 2.9
Notes. For the purposes of computing interest payable from time to time on the
principal amount of the Loan and certain other computations set forth herein,
the principal balance of the Loan shall be divided into seventy-two (72)
Notes.  The principal amount of the Notes on the Closing Date is set forth on
Schedule XV attached hereto. 66       ARTICLE III INTENTIONALLY OMITTED 67      
ARTICLE IV REPRESENTATIONS AND WARRANTIES 67       Section 4.1 Borrower and
Operating Lessee Representations. 67       Section 4.2 Survival of
Representations. 80       ARTICLE V BORROWER AND OPERATING LESSEE COVENANTS 80  
    Section 5.1 Affirmative Covenants. 80       Section 5.2 Negative Covenants.
107       ARTICLE VI INSURANCE; CASUALTY; CONDEMNATION 113       Section 6.1
Insurance. 113       Section 6.2 Casualty. 118       Section 6.3 Condemnation.
118       Section 6.4 Restoration. 119       Section 6.5 References to Borrower
in this Article VI. 123

 

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ARTICLE VII RESERVE FUNDS 124       Section 7.1 Intentionally Omitted. 124      
Section 7.2 Tax and Insurance Reserve Fund. 124       Section 7.3 Replacements
and Replacement Reserve Fund. 125       Section 7.4 Rollover Reserve. 129      
Section 7.5 Ground Lease Reserve Fund. 130       Section 7.6 Excess Cash Flow
Reserve Fund. 130       Section 7.7 Intentionally Omitted. 131       Section 7.8
Intentionally Omitted. 131       Section 7.9 WWP Fund. 131       Section 7.10
FF&E Reserve Fund. 132       Section 7.11 Common Charge Reserve Fund. 133      
Section 7.12 Reserve Funds, Generally. 134       Section 7.13 Letters of Credit.
135       ARTICLE VIII DEFAULTS 135       Section 8.1 Event of Default. 135    
  Section 8.2 Remedies. 140       Section 8.3 Remedies Cumulative; Waivers. 142
      ARTICLE IX SPECIAL PROVISIONS 143       Section 9.1 Securitization. 143  
    Section 9.2 Securitization Indemnification. (a) Each of Borrower and
Operating Lessee understands that certain of the Provided Information may be
included in Disclosure Documents in connection with the Securitization and may
also be included in filings with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the “Securities Act”), or the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization.  In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower and Operating Lessee will
cooperate with the holder of any Note in updating the Disclosure Document by
providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects. 146       Section 9.3 Agent. 150

 

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Section 9.4 No Exculpation. 153       Section 9.5 Matters Concerning Manager.
154       Section 9.6 Servicer. 154       Section 9.7 Intercreditor Agreement.
154       ARTICLE X MISCELLANEOUS 155       Section 10.1 Survival. 155      
Section 10.2 Lender’s Discretion. 155       Section 10.3 Governing Law. 155    
  Section 10.4 Modification, Waiver in Writing. 157       Section 10.5 Delay Not
a Waiver. 157       Section 10.6 Notices. 157       Section 10.7 Trial by Jury.
158       Section 10.8 Headings. 158       Section 10.9 Severability. 158      
Section 10.10 Preferences. 159       Section 10.11 Waiver of Notice. 159      
Section 10.12 Remedies of Borrower and Operating Lessee. 159       Section 10.13
Expenses; Indemnity. 160       Section 10.14 Schedules Incorporated. 161      
Section 10.15 Offsets, Counterclaims and Defenses. 161       Section 10.16 No
Joint Venture or Partnership; No Third Party Beneficiaries. 161       Section
10.17 Publicity. 162       Section 10.18 Cross Default; Cross Collateralization;
Waiver of Marshalling of Assets. 162       Section 10.19 Waiver of Counterclaim.
163       Section 10.20 Conflict; Construction of Documents; Reliance. 163      
Section 10.21 Brokers and Financial Advisors. 163       Section 10.22 Prior
Agreements. 163       Section 10.23 Joint and Several Liability. 163      
Section 10.24 Counterparts. 164       Section 10.25 Cumulative Rights. 164      
Section 10.26 Reliance on Third Parties. 164       Section 10.27 Consent of
Holder. 164

 

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Section 10.28 Intentionally Omitted. 164       Section 10.29 EU Bail-in
Requirements. 164       Section 10.30 Contributions and Waivers. 165

 

SCHEDULES

 

Schedule I – Borrower

Schedule II – Mezzanine Borrower

Schedule III – Properties

Schedule IV – Rent Rolls

Schedule V – Organizational Structure

Schedule VI – Litigation

Schedule VII – Allocated Loan Amounts

Schedule VIII – Managers and Management Agreements

Schedule IX – Condominium Documents, Board Members, Common Charges and Units of
Borrower

Schedule X – Collective Bargaining Agreements

Schedule XI – Property Condition Reports and Environmental Reports

Schedule XII – Required Repairs Deadlines for Completion

Schedule XIII – O&M Programs

Schedule XIV – Pre-Approved Managers

Schedule XV – Notes

 

EXHIBITS

 

Exhibit A – Form of Tenant Direction Letter

Exhibit B – Form of Credit Card Direction Letter

 

-iv-

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, dated as of December 20, 2016 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), by and among EACH OF THE ENTITIES LISTED ON SCHEDULE I ATTACHED
HERETO, having its principal place of business at c/o New York REIT, Inc., 405
Park Avenue, New York, New York 10022 (each, an “Individual Borrower” and
collectively, “Borrower”), COLUMN FINANCIAL, INC., a Delaware corporation,
having an address at 11 Madison Avenue, New York, New York 10010 (together with
its successors and permitted assigns, “Initial Lender”), THE LENDERS FROM TIME
TO TIME PARTY HERETO (collectively, with Initial Lender, and together with their
respective successors and permitted assigns, “Lender”) and COLUMN FINANCIAL,
INC., a Delaware corporation, having an address at 11 Madison Avenue, New York,
New York 10010, as agent for Lender (together with its successors and permitted
assigns, in such capacity, “Agent”), and acknowledged and agreed to by ARC
NY120W5701 TRS, LLC, a Delaware limited liability company, having its principal
place of business at c/o New York REIT, Inc., 405 Park Avenue, New York, New
York 10022 (“Operating Lessee”) (solely with respect to Sections 2.6, 7.12,
9.1.1, 9.2(a), 9.4(b) and 9.5 and Articles IV, V, VI, VIII and X hereof).

 

WITNESSETH:

 

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and

 

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents (as
hereinafter defined).

 

NOW THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:

 

ARTICLE I

 

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1           Definitions.  For all purposes of this Agreement, except
as otherwise expressly required or unless the context clearly indicates a
contrary intent:

 

“350 Bleecker Street Property” shall mean the Individual Property located at 350
Bleecker Street, New York, New York.

 

“Acceptable Condominium Policy” shall have the meaning set forth in
Section 6.1(g) hereof.

 

 

 

 

“Acceptable Counterparty” shall mean a counterparty to the Interest Rate Cap
Agreement (or the guarantor of such counterparty’s obligations) that (a) has and
shall maintain, until the expiration of the applicable Interest Rate Cap
Agreement, (i) a long-term unsecured debt rating of not less than “A-” by S&P
and a short-term senior unsecured debt rating of at least “A-1” from S&P, and
(ii)(x) a long-term unsecured debt rating of not less than “A3” from Moody’s and
a short-term senior unsecured debt rating of at least “P1” from Moody’s or
(y) if no short-term debt rating exists, a long-term senior unsecured debt
rating of at least “A1” from Moody’s, or (b) is otherwise acceptable to the
Approved Rating Agencies, as evidenced by a Rating Agency Confirmation to the
effect that such counterparty shall not cause a downgrade, withdrawal or
qualification of the ratings assigned, or to be assigned, to the Securities or
any class thereof in any Securitization.

 

“Affiliate” shall mean, as to any Person, any other Person that, directly or
indirectly, is in Control of, is Controlled by or is under common Control with
such Person or is a director or officer of such Person or of an Affiliate of
such Person.

 

“Affiliated Manager” shall mean any Manager in which Borrower, Operating Lessee,
or any Guarantor has, directly or indirectly, any legal, beneficial or economic
interest.

 

“Agent” shall have the meaning set forth in the introductory paragraph hereto.

 

“Allocated Loan Amount” shall mean, for an Individual Property, the amount set
forth of Schedule VII attached hereto.

 

“ALTA” shall mean American Land Title Association, or any successor thereto.

 

“Annual Budget” shall mean the operating budget, including all anticipated
Operating Expenses and planned Capital Expenditures, for the Properties prepared
by Borrower and/or Operating Lessee in accordance with Section 5.1.11(d) hereof
for the applicable Fiscal Year or other period.

 

“Applicable Contribution” shall have the meaning set forth in Section 10.30(f)
hereof.

 

“Appraisal” means, with respect to each Individual Property, an as-is appraisal
of such Property that is prepared by a member of the Appraisal Institute
selected by Lender in its reasonable discretion, meets the minimum appraisal
standards for national banks promulgated by the Comptroller of the Currency
pursuant to Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended (FIRREA) and complies with the Uniform
Standards of Professional Appraisal Practice (USPAP).

 

“Approved Annual Budget” shall have the meaning set forth in Section 5.1.11(e)
hereof.

 

“Approved Rating Agencies” shall mean each of S&P, Moody’s, Fitch, DBRS and
Morningstar or any other nationally-recognized statistical rating agency which,
in each case, has been reasonably approved by Lender and designated by Lender to
assign a rating to the Securities.

 

 -2- 

 

 

“Assignment of Interest Rate Cap Agreement” shall have the meaning set forth in
Section 2.2.8(a) hereof.

 

“Assignment of Leases” shall mean, individually and/or collectively as the
context may require, with respect to each Individual Property, that certain
first priority Assignment of Leases and Rents, dated as of the date hereof, from
Borrower and Operating Lessee, as assignor, to Agent, as assignee, assigning to
Agent all of Borrower’s and Operating Lessee’s right, title and interest in and
to the Leases and Rents as security for the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

“Assignment of Management Agreement” shall mean, individually and/or
collectively as the context may require, with respect to each Individual
Property, that certain Assignment of Management Agreement and Subordination of
Management Fees, dated as of the date hereof, among Agent, Borrower, Operating
Lessee (as applicable) and Manager, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

“Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation.

 

“Bail-In Action” means the exercise of any Write-down and Conversion Powers.

 

“Bail-In Legislation” means in relation to an EEA Member Country which has
implemented, or which at any time implements, Article 55 of Directive 2014/59/EU
(as amended or re-enacted or successor thereto) establishing a framework for the
recovery and resolution of credit institutions and investment firms, the
relevant implementing law or Regulation as described in the EU Bail-In
Legislation Schedule from time to time.

 

“Bankruptcy Action” shall mean with respect to any Person (a) such Person filing
a voluntary petition under the Bankruptcy Code or any other Federal, state or
local bankruptcy or insolvency law; (b) the filing of an involuntary petition
against such Person under the Bankruptcy Code or any other Federal, state or
local bankruptcy or insolvency law or soliciting or causing to be solicited
petitioning creditors for any involuntary petition against such Person; (c) such
Person filing an answer consenting to or otherwise acquiescing in or joining in
any involuntary petition filed against it, by any other Person under the
Bankruptcy Code or any other Federal, state, local or foreign bankruptcy or
insolvency law; (d) such Person consenting to or acquiescing in or joining in an
application for the appointment of a custodian, receiver, trustee, or examiner
for such Person or any portion of any Individual Property; or (e) such Person
making an assignment for the benefit of creditors, or admitting, in writing or
in any legal proceeding, its insolvency or inability to pay its debts as they
become due or (f) to take action in furtherance of any of the foregoing.

 

“Bankruptcy Code” shall mean Title 1 of the United States Code, 11 U.S.C. §101,
et seq., as the same may be amended from time to time, and any successor statute
or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors’ rights or any other Federal, state, local or foreign bankruptcy or
insolvency law.

 

 -3- 

 

 

“Basic Carrying Costs” shall mean, for any period, the sum of the following
costs: (a) Taxes, (b) Other Charges, (c) Insurance Premiums, (d) Common Charges
and (e) Ground Rent.

 

“Benefit Amount” shall have the meaning set forth in Section 10.30(d) hereof.

 

“Board” shall mean any managing board or board of directors for the applicable
Condominium as set forth in the Condominium Documents.

 

“Borrower” shall have the meaning set forth in the introductory paragraph
hereto, together with their respective successors and permitted assigns.

 

“Breakage Costs” shall have the meaning set forth in Section 2.2.4(h) hereof.

 

“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which national banks in New York, New York, or the place of business of the
trustee under a Securitization (or, if no Securitization has occurred, any
Lender or Agent), or any Servicer or the financial institution that maintains
any collection account for or on behalf of any Servicer or any Reserve Funds or
the New York Stock Exchange or the Federal Reserve Bank of New York is not open
for business.

 

“Capital Expenditures” shall mean, for any period, the amount expended for items
capitalized under GAAP and, with respect to the Viceroy Property, the Uniform
System of Accounts (including expenditures in the nature of capital expenditures
for building improvements or major repairs, leasing commissions and tenant
improvements).

 

“Cash Expenses” shall mean, for any period, the Operating Expenses for the
operation of the Property and any Capital Expenditures as set forth in an
Approved Annual Budget to the extent that such expenses are actually incurred by
Borrower, less any payments into the Tax and Insurance Reserve Fund.

 

“Cash Management Account” shall have the meaning set forth in Section 2.6.2(a)
hereof.

 

“Cash Management Agreement” shall mean that certain Account Control Agreement
(Cash Management Account), dated as of the date hereof, by and among Borrower,
Operating Lessee, Manager, Cash Management Bank and Agent, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Cash Management Bank” shall mean (a) as of the Closing Date, KeyBank, National
Association, provided that it remains an Eligible Institution, or (b) any
successor Eligible Institution reasonably selected by Lender (it being
understood that, with respect to any such successor, Lender agrees to first
select and use commercially reasonable efforts to engage Wells Fargo Bank,
National Association as such successor Cash Management Bank).

 

“Cash Sweep Event” shall mean the occurrence of: (a) an Event of Default;
(b) any Bankruptcy Action of Borrower, Operating Lessee, Operating Pledgor,
Guarantor or Manager; (c) a Debt Yield Trigger Event; (d) any Mezzanine Loan
Event of Default; or (e) Viceroy Litigation Trigger.

 

 -4- 

 

 

“Cash Sweep Event Cure” shall mean (a) if the Cash Sweep Event is caused solely
by the occurrence of a Debt Yield Trigger Event, the achievement of a Debt Yield
Cure, (b) if the Cash Sweep Event is caused by an Event of Default, the
acceptance by Lender of a cure of such Event of Default (which cure Lender is
not obligated to accept and may reject or accept in its sole and absolute
discretion), (c) if the Cash Sweep Event is caused by a Bankruptcy Action of
Manager, if Manager causes the dismissal or discharge of the same within ninety
(90) days after the filing of such Bankruptcy Action or Borrower replaces the
Manager with a Qualified Manager under a Replacement Management Agreement,
(d) if the Cash Sweep Event is caused solely by a Mezzanine Loan Event of
Default, Lender has received written notice from Mezzanine Lender that such
Mezzanine Loan Event of Default has been cured in accordance with the terms of
the related Mezzanine Loan Documents, or (e) if the Cash Sweep Event is caused
solely by the Viceroy Litigation Trigger, then either (i) Lender has received
reasonably satisfactory evidence of payment in full by Borrower of the Viceroy
Litigation Amount or (ii) the Excess Cash Flow is sufficient to pay the Viceroy
Litigation Amount in full and either (x) Borrower shall have paid such Viceroy
Litigation Amount in full and provided reasonably satisfactory evidence of the
same to Lender (and in such case, Lender shall release the Excess Cash Flow in
the amount of the Viceroy Litigation Amount to Borrower as reimbursement for
such payment to the extent no other Cash Sweep Event has occurred and is
continuing), or (y) at Lender’s option, Lender shall pay such Viceroy Litigation
Amount directly from Excess Cash Flow in accordance with the final order,
judgment or settlement agreement; provided, however, that, with respect to any
Cash Sweep Event Cure, such Cash Sweep Event Cure set forth in this definition
shall be subject to the following conditions, (i) no Event of Default shall have
occurred and be continuing under this Agreement or any of the other Loan
Documents, and (ii) Borrower shall have paid all of Lender’s reasonable expenses
incurred in connection with such Cash Sweep Event Cure including, reasonable
attorney’s fees and expenses.

 

“Cash Sweep Period” shall mean each period commencing on the occurrence of a
Cash Sweep Event and continuing until the earlier of (a) the Payment Date next
occurring following the related Cash Sweep Event Cure, or (b) payment in full of
all principal and interest on the Loan and all other amounts payable under the
Loan Documents in accordance with the terms and provisions of the Loan
Documents.

 

“Casualty” shall have the meaning set forth in Section 6.2 hereof.

 

“Casualty/Condemnation Prepayment” shall have the meaning set forth in
Section 6.4(f) hereof.

 

“Casualty Consultant” shall have the meaning set forth in Section 6.4(b)(iii)
hereof.

 

“Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv)
hereof.

 

 -5- 

 

 

“Cause” shall mean, with respect to an Independent Director, (a) acts or
omissions by such Independent Director that constitute systematic and persistent
or willful disregard of such Independent Director’s duties, (b) such Independent
Director has been indicted or convicted for any crime or crimes of moral
turpitude or dishonesty or for any violation of any Legal Requirements, (c) such
Independent Director no longer satisfies the requirements set forth in the
definition of “Independent Director”, (d) the fees charged for the services of
such Independent Director are materially in excess of the fees charged by the
other providers of Independent Directors listed in the definition of
“Independent Director” or (e) any other reason for which the prior written
consent of Lender shall have been obtained.

 

“CBA Multiemployer Plans” shall mean multi-employer pension and welfare plans to
which an employer is obligated to contribute pursuant to the terms of the
collective bargaining agreement set forth on Schedule X attached hereto.

 

“Closing Date” shall mean the date of the funding of the Loan.

 

“Co-Lender” shall mean Lender and each successor or assign of Lender that holds
a Note, in each case, together with their respective successors and assigns.

 

“Co-Lender Agreement” shall mean that certain Agency and Co-Lender Agreement,
dated as of the Closing Date, by and between Agent and Initial Lender, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be
further amended from time to time, and any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

 

“Collateral” shall mean the “Collateral” as such term is defined in the Pledge
Agreement.

 

“Column” shall have the meaning set forth in Section 9.3(a) hereof.

 

“Common Charge Reserve Account” shall have the meaning set forth in Section
7.11.1 hereof.

 

“Common Charge Reserve Fund” shall have the meaning set forth in Section 7.11.1
hereof.

 

“Common Charges” shall have the meaning set forth in Section 4.1.44(d) hereof.

 

“Condemnation” shall mean a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of any Individual
Property, or any interest therein or right accruing thereto, including any right
of access thereto or any change of grade affecting such Individual Property or
any part thereof.

 

 -6- 

 

 

“Condemnation Proceeds” shall have the meaning set forth in Section 6.4(b)
hereof.

 

“Condominium” shall have the meaning set forth in the Condominium Documents.

 

“Condominium Documents” shall mean those certain documents set forth on Schedule
IX attached hereto, as each of the same may be amended, restated, replaced or
otherwise modified from time to time in accordance with the terms and conditions
of this Agreement.

 

“Contribution” shall have the meaning set forth in Section 10.30(a) hereof.

 

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of management, policies or activities of a Person,
whether through ownership of voting securities, by contract or otherwise.
“Controlled” and “Controlling” shall have correlative meanings.

 

“Controlling Equityholder” shall have the meaning set forth in Section 4.1.35
hereof.

 

“Covered Disclosure Information” shall have the meaning set forth in
Section 9.2(b) hereof.

 

“Covered Rating Agency Information” shall have the meaning set forth in
Section 9.2(d) hereof.

 

“Credit Card Direction Letter” shall have the meaning set forth in Section
6.2.1(b) hereof.

 

“Credit Suisse” shall mean Credit Suisse Securities (USA) LLC and its successors
in interest.

 

“DBRS” means DBRS, Inc., and its successors-in-interest.

 

“Debt” shall mean the outstanding principal amount set forth in, and evidenced
by, this Agreement and the Notes together with all interest accrued and unpaid
thereon and all other sums (including, but not limited to, any Breakage Costs)
due to Lender in respect of the Loan under the Notes, this Agreement, the
Security Instruments or any other Loan Document.

 

“Debt Service” shall mean, with respect to any particular period of time,
scheduled interest payments due under this Agreement and the Notes.

 

“Debt Service Coverage Ratio” shall mean a ratio for the applicable Test Period
in which:

 

(a)          The numerator is the Net Operating Income (excluding interest on
credit accounts and using annualized operating expenses for any recurring
expenses not paid monthly (e.g., Taxes and Insurance Premiums)) for such period
as set forth in the statements required hereunder, without deduction for
(i) actual management fees incurred in connection with the operation of the
Properties, or (ii) amounts paid to the Reserve Funds, less (A) management fees
for the Properties other than the Viceroy Property equal to the greater of
(1) assumed management fees of $1,000,000 and (2) the actual management fees
incurred and (B) management fees for the Viceroy Property equal to the actual
management fees incurred; and

 

 -7- 

 

 

(b)          the denominator is the aggregate amount of principal (if any) and
interest due and payable on the Loan and the Mezzanine Loan in the aggregate.

 

“Debt Yield” shall mean a ratio for the applicable Test Period in which:

 

(a)          The numerator is the Net Operating Income (excluding interest on
credit accounts and using annualized operating expenses for any recurring
expenses not paid monthly (e.g., Taxes and Insurance Premiums)) for such period
as set forth in the statements required hereunder, with Net Operating Income
being calculated using annualized monthly base rents as determined pursuant to
clause (i) of the definition of “Gross Income from Operations” and as set forth
in the rent rolls last delivered to Lender in accordance with the terms of this
Agreement for the calendar month immediately following the date of determination
for the applicable Test Period multiplied by twelve (12), without deduction for
(i) actual management fees incurred in connection with the operation of the
Properties, or (ii) amounts paid to the Reserve Funds, less (A) management fees
for the Properties other than the Viceroy Property equal to the greater of
(1) assumed management fees of $1,000,000 and (2) the actual management fees
incurred, and (B) management fees for the Viceroy Property equal to the actual
management fees incurred; and

 

(b)          The denominator is the outstanding principal balance of the Loan
and the outstanding principal balance of the Mezzanine Loan in the aggregate.

 

“Debt Yield Cure” shall mean (i) the achievement of a Debt Yield equal to or
greater than 6.5% for the applicable Test Period, as reasonably determined by
Lender, or (ii) Borrower prepays the Loan and Mezzanine Borrower prepays the
Mezzanine Loan in connection with releases of Individual Properties in
accordance with the terms and conditions of Section 2.5.2 hereof (and, with
respect to Mezzanine Borrower, Section 2.5.2 of the Mezzanine Loan Agreement) or
otherwise prepays the Loan in accordance with Section 2.4.1 hereof (and, with
respect to Mezzanine Borrower, Section 2.4.1 of the Mezzanine Loan Agreement),
the effect of which is that had the reduced aggregate principal balance of the
Loan and the Mezzanine Loan been in effect for the applicable Test Period, the
Debt Yield based solely on the remaining Properties (and disregarding any
Individual Property or Properties released in accordance with the terms and
conditions of Section 2.5.2 hereof) during such applicable Test Period would
have been in excess of 6.5%; or (iii) Borrower delivers to Lender a Letter of
Credit having a face amount equal to the amount necessary to cause the Debt
Yield for the applicable Test Period to equal at least 6.5%, as if such amount
of such Letter of Credit had been applied pro-rata to the reduction of the
principal balance of the Loan and the Mezzanine Loan, it being understood that
any Letter of Credit deposited with Lender pursuant to this clause (iii) shall
be held as additional collateral for the Loan and shall only be returned to
Borrower upon the earlier of (A) the date Lender determines that the Debt Yield
is at least 6.5% for the applicable Test Period without giving effect to such
Letter of Credit and (B) payment in full of the Debt.

 

 -8- 

 

 

“Debt Yield Trigger Event” shall mean (i) prior to the Initial Maturity Date, a
Debt Yield of less than 6.5% for the applicable Test Period, as reasonably
determined by Lender and (ii) for the period beginning on the date immediately
following the Initial Maturity Date and ending on the Extended Maturity Date, a
Debt Yield of less than 6.5% on any date of determination for the applicable
Test Period, as reasonably determined by Lender.

 

“Debt Yield Trigger Period” shall mean the period commencing on the occurrence
of a Debt Yield Trigger Event and continuing until the occurrence of a Debt
Yield Cure.

 

“Default” shall mean the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would be an Event of Default.

 

“Default Rate” shall mean a rate per annum equal to the lesser of (a) the
Maximum Legal Rate and (b) four percent (4%) above the Interest Rate.

 

“Determination Date” shall mean, with respect to each Interest Period, the date
that is two (2) London Business Days prior to the oftwenty-second (22nd) day of
the calendar month in which such Interest Period commences.

 

“Disclosure Document” shall mean, collectively, any written materials used or
provided to Lender, any prospective investors and/or the Rating Agencies in
connection with any public offering or private placement in connection with a
Securitization (including, without limitation, a prospectus, prospectus
supplement, private placement memorandum, offering memorandum, offering
circular, term sheet, road show presentation materials or other similar offering
documents, marketing materials or written information provided to prospective
investors), in each case in preliminary or final form and including any
amendments, supplements, exhibits, annexes and other attachments thereto.

 

"EEA Financial Institution" means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any member states of the European Union, Iceland,
Liechtenstein and Norway.

 

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (a) an account or accounts
(or subaccounts thereof) maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (b) a segregated trust account or accounts (or subaccounts
thereof) maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity which complies with the
definition of Eligible Institution and which, in the case of a state chartered
depository institution or trust company, is subject to regulations substantially
similar to 12 C.F.R. § 9.10(b), having in either case a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authority, as applicable. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.

 

 -9- 

 

 

“Eligible Institution” shall mean either (i) a depository institution or trust
company insured by the Federal Deposit Insurance Corporation, the short-term
unsecured debt obligations or commercial paper of which are rated at least
“A-1+” by S&P and “P-1” by Moody’s in the case of accounts in which funds are
held for thirty (30) days or less (or, in the case of letters of credit and
accounts in which funds are held for more than thirty (30) days, the long-term
unsecured debt obligations of which are rated at least “A+” by S&P and “Aa3” by
Moody’s) or (ii) KeyBank, National Association in its capacity as a party to the
Cash Management Agreement for so long as KeyBank, National Association is not
downgraded from the long term unsecured debt obligations and short term
unsecured debt obligations ratings assigned to KeyBank, National Association by
the Approved Rating Agencies as of the Closing Date.

 

“Embargoed Person” shall mean any person, entity or government subject to trade
restrictions under U.S. law, including, but not limited to, The USA PATRIOT Act
(including the anti-terrorism provisions thereof), the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701, et seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated
thereunder including those related to Specially Designated Nationals and
Specially Designated Global Terrorists, with the result that the investment in
Borrower, Operating Lessee, Operating Pledgor or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan made by the
Lender is in violation of law.

 

“Employment Related Laws and Obligations” shall mean all federal, state and
local laws, regulations, ordinances, common law, orders, judgments, decrees,
awards, collective bargaining agreements, CBA Multiemployer Plans, or the
findings of any arbitrator, court or governmental entity, relating to, touching
upon or concerning the employment of the employees who perform work in
connection with the operation of the Property, including relating to the hiring,
firing and treatment of employees, or any legal obligation or duty regarding
employment practices, terms and conditions of employment, equal opportunity,
non-discrimination, discharge, immigration, anti-harassment, anti-retaliation,
whistle blowing, compensation, wages, overtime payments, hours, benefits,
collective bargaining, income tax withholding, the payment of social security
and other similar payroll taxes, pension plans, the modification or termination
of benefit plans and retiree health insurance plans, policies, programs and
agreements, occupational safety and health, workers compensation or other
similar benefits and payments on account of occupational illness and injuries,
employment contracts, collective bargaining agreements, grievances originating
under the collective bargaining agreements, wrongful discharge, torts related to
the workplace such as invasion of privacy, infliction of emotional distress,
defamation, and slander.

 

“Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement, dated as of the date hereof, executed by Borrower and Guarantor in
connection with the Loan for the benefit of Agent, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

 -10- 

 

 

“Environmental Law” shall have the meaning set forth in the Environmental
Indemnity.

 

“Environmental Reports” shall mean each environmental site assessment report
delivered to Lender in connection with the closing of the Loan, satisfactory in
form and substance to Lender.

 

“Equipment” shall mean, with respect to each Individual Property, any equipment
now owned or hereafter acquired by Borrower, and which (i) is used at or in
connection with the Improvements or such Individual Property or (ii) is located
thereon or therein, including (without limitation) all machinery, equipment,
furnishings, and electronic data-processing and other office equipment now owned
or hereafter acquired by Borrower and any and all additions, substitutions and
replacements of any of the foregoing), together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.

 

“Equity Purchase” shall have the meaning set forth in Section 7.9.1 hereof.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.

 

“ERISA Affiliate” shall mean any Person that for purposes of Title IV of ERISA
is a member of the Borrower’s, Operating Lessee’s or Guarantor’s controlled
group, under common control with the Borrower, Operating Lessee or Guarantor,
within the meaning of Section 414 of the Code.

 

“ERISA Event” shall mean, with respect to Borrower, Guarantor, Operating Lessee,
any ERISA Affiliate thereof or the Property, (a) the occurrence with respect to
a Plan of a reportable event, within the meaning of Section 4043 of ERISA,
unless the 30-day notice requirement with respect thereto has been waived by the
Pension Benefit Guaranty Corporation (or any successor) (“PBGC”); (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA);
(d) the cessation of operations at a facility of the Borrower, the Guarantor, or
any ERISA Affiliates in the circumstances described in Section 4062(e) of ERISA,
which could reasonably be expected to result in liability under Section 4063 or
4064 of ERISA; (e) the withdrawal by the Borrower, the Guarantor, or any ERISA
Affiliates from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions set forth in Section 430(k) of the Code or Section 303(k)(1)(A) and
(B) of ERISA to the creation of a lien upon property or assets or rights to
property or assets of the Borrower, the Guarantor, or any ERISA Affiliates for
failure to make a required payment to a Plan are satisfied; (g) the termination
of a Plan by the PBGC pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition described in Section 4042 of ERISA that constitutes
grounds for the termination of, or the appointment of a trustee to administer, a
Plan; (h) any failure by any Plan to satisfy the minimum funding standards,
within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA,
whether or not waived; (i) the determination that any Plan is or is expected to
be in “at-risk” status, within the meaning of Section 430 of the Code or
Section 303 of ERISA or (j) the receipt by the Borrower, the Guarantor, or any
ERISA Affiliate of any notice concerning the imposition of liability with
respect to the withdrawal or partial withdrawal from a Multiemployer Plan or a
determination that a Multiemployer Plan is, or is expected to be “insolvent”
(within the meaning of Section 4245 of ERISA) or in “endangered” or “critical
status” (within the meaning of Section 432 of the Code or Section 305 of ERISA).

 

 -11- 

 

 

“EU Bail-In Legislation Schedule” means the document described as such and
published by the Loan Market Association (or any successor person) from time to
time.

 

“Event of Default” shall have the meaning set forth in Section 8.1(a) hereof.

 

“Excess Cash Flow” shall have the meaning set forth in Section 2.6.2(b) hereof.

 

“Excess Cash Flow Reserve Account” shall have the meaning set forth in
Section 7.6.1 hereof.

 

“Excess Cash Flow Reserve Fund” shall have the meaning set forth in
Section 7.6.1 hereof.

 

“Exchange Act” shall have the meaning set forth in Section 9.2(a) hereof.

 

“Exchange Act Filing” shall mean a filing pursuant to the Exchange Act in
connection with or relating to a Securitization.

 

“Excluded Taxes” shall mean any of the following Impositions imposed on or with
respect to Lender or required to be withheld or deducted from a payment to
Lender: (a) Impositions imposed on or measured by net income (however
denominated), franchise Impositions, and branch profits Impositions, in each
case, (i) imposed as a result of Lender being organized under the laws of, or
having its principal office or its applicable lending office located in, the
jurisdiction imposing such Imposition (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) U.S. federal withholding Impositions
imposed on amounts payable to or for the account of such Lender with respect to
an applicable interest in the Loan pursuant to a law in effect on the date on
which (i) such Lender acquires such interest in the Loan or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 2.7 hereof, amounts with respect to such Impositions were payable either
to such Lender’s assignor immediately before such Lender became a party hereto
or to such Lender immediately before it changed its lending office, (c)
Impositions attributable to such Lender’s failure to comply with Section 2.7(e)
and (d) any U.S. federal withholding Impositions imposed under FATCA.

 

“Extended Maturity Date” shall mean December 20, 2018.

 

“Extension Option” shall have the meaning set forth in Section 2.8 hereof.

 

“Extension Term” shall have the meaning set forth in Section 2.8 hereof.

 

“Extraordinary Expense” shall have the meaning set forth in Section 5.1.11(f)
hereof.

 

 -12- 

 

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future Treasury regulations thereunder, published guidance with respect thereto,
any agreement entered into pursuant to Section 1471(b)(1) of the Code and any
intergovernmental agreements or official interpretations thereof (including any
Revenue Ruling, Revenue Procedure, Notice or similar guidance issued by the
Internal Revenue Service thereunder).

 

“FF&E” shall mean, with respect to the Viceroy Property, collectively,
furnishings, Fixtures and Equipment located in the guest rooms, hallways,
lobbies, restaurants, lounges, meeting and banquet rooms, parking facilities,
public areas or otherwise in any portion of the Viceroy Property, including
(without limitation) all beds, chairs, bookcases, tables, carpeting, drapes,
couches, luggage carts, luggage racks, bars, bar fixtures, radios, television
sets, intercom and paging equipment, electric and electronic equipment, heating,
lighting and plumbing fixtures, fire prevention and extinguishing apparatus,
cooling and air-conditioning systems, elevators, escalators, stoves, ranges,
refrigerators, laundry machines, tools, machinery, boilers, incinerators,
switchboards, conduits, compressors, vacuum cleaning systems, floor cleaning,
waxing and polishing equipment, cabinets, lockers, shelving, dishwashers,
garbage disposals, washer and dryers, and all other customary hotel equipment
and other tangible property in each of the foregoing cases owned by Borrower, or
in which Borrower or has or shall have an interest, now or hereafter located at
the Viceroy Property and useable in connection with the present or future
operation and occupancy of the Viceroy Property; provided, however, that FF&E
shall not include (a) fixed asset supplies, including, but not limited to,
linen, china, glassware, tableware, uniforms, other hotel inventory and similar
items, whether used in connection with public space or guest rooms, or (b) items
owned by tenants or by third party operators.

 

“FF&E Expenditures” shall mean, with respect to the Viceroy Property, all
renovations, refurbishing, replacements of, or additions to, FF&E, and any
special projects designed to maintain the Improvements in a condition consistent
with the condition thereof as of the Closing Date, including without limitation,
renovation of the guest room areas, public space, food and beverage facilities,
spa or recreational facilities, which projects will generally comprise
replacements of, or additions to, FF&E, but may include revisions and
alterations in the Improvements. The term “FF&E Expenditures” shall not include
any program of capital improvements involving an addition to the Improvements,
or designed to substantially upgrade or change the nature or image of the
Improvements (as opposed to a renovation or refurbishing which might take place
as part of the normal or cyclical upkeep of the Improvements) unless consented
to by Lender (such consent not to be unreasonably withheld, conditioned or
delayed).

 

“FF&E Reserve Account” shall have the meaning set forth in Section 7.10.1
hereof.

 

“FF&E Reserve Funds” shall have the meaning set forth in Section 7.10.1 hereof.

 

 -13- 

 

 

“FF&E Reserve Monthly Deposit” shall have the meaning set forth in Section
7.10.1 hereof.

 

“Fiscal Quarter” shall mean the three-month period ending on March 31, June 30,
September 30 and December 31 of each calendar year.

 

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the term of the Loan.

 

“Fitch” shall mean Fitch, Inc.

 

“Fixtures” shall mean, with respect to each Individual Property, all Equipment
now owned, or the ownership of which is hereafter acquired, by Borrower which is
so related to the Land and the Improvements forming part of the Individual
Property in question that it is deemed fixtures or real property under
applicable Legal Requirements, including, without limitation, all building or
construction materials intended for construction, reconstruction, alteration,
decoration or repair of or installation on the applicable Individual Property,
construction equipment, appliances, machinery, plant equipment, fittings,
apparatuses, fixtures and other items now or hereafter attached to, installed in
or used in connection with (temporarily or permanently) any of the Improvements
or the Land, including, but not limited to, engines, devices for the operation
of pumps, pipes, plumbing, call and sprinkler systems, fire extinguishing
apparatuses and equipment, heating, ventilating, incinerating, electrical, air
conditioning and air cooling equipment and systems, gas and electric machinery,
appurtenances and equipment, pollution control equipment, security systems,
disposals, dishwashers, refrigerators and ranges, recreational equipment and
facilities of all kinds, and water, electrical, storm and sanitary sewer
facilities, utility lines and equipment (whether owned individually or jointly
with others, and, if owned jointly, to the extent of Borrower’s interest
therein) and all other utilities whether or not situated in easements, all water
tanks, water supply, water power sites, fuel stations, fuel tanks, fuel supply,
and all other structures, together with all accessions, appurtenances,
additions, replacements, betterments and substitutions or any of the foregoing
and the proceeds thereof.

 

“Floating Interest Rate” shall mean a fluctuating rate per annum equal to LIBOR
plus the Spread.

 

“Floating Interest Rate Loan” shall mean the Loan at such time as the interest
thereon accrues at a rate of interest based on the Floating Interest Rate.

 

“Foreign Benefit Arrangement” shall mean any agreement, contract, program,
undertaking, understanding or other arrangement that, if in the form of a plan
or a fund, would be a Foreign Plan.

 

“Foreign Lender” shall mean a Lender that is not a U.S. Person.

 

“Foreign Plan” shall mean any plan or fund (including, without limitation, any
superannuation fund) established, contributed to (regardless of whether through
direct contributions or through employee withholding) or maintained outside the
United States by the Borrower, Guarantor or one or more of their respective
subsidiaries primarily for the benefit of employees of the Borrower, Guarantor
or such subsidiaries residing outside the United States, which plan or fund
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

 

 -14- 

 

 

“Funding Borrower” shall have the meaning set forth in Section 10.30(c) hereof.

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America as of the date of the applicable financial report.

 

“Governmental Authority” shall mean any court, board, agency, commission, office
or other authority of any nature whatsoever for any governmental unit (federal,
state, county, district, municipal, city or otherwise) whether now or hereafter
in existence.

 

“Gross Income from Operations” shall mean, during any period, all income as
reported on the financial statements delivered by Borrower in accordance with
this Agreement, computed in accordance with GAAP (but without straight-lining of
rents), derived from the ownership and operation of the Properties, in the
aggregate, from whatever source during such period, including, but not limited
to, (i) Rents from Tenants that are in occupancy, open for business and paying
full contractual rent without right of offset or credit (including, with respect
to Leases with a term of five (5) years or less, up to a maximum period of six
(6) months of free rent and, with respect to Leases with a term greater than
five (5) years, up to a maximum period of twelve (12) months of free rent),
(ii) utility charges, (iii) escalations, (iv) forfeited security deposits,
(v) interest on credit accounts, (vi) service fees or charges, (vii) license
fees, (viii) parking fees, (ix) rent concessions or credits, (x) income from
vending machines, (xi) business interruption or other loss of income or rental
insurance proceeds, (xii) other required pass-throughs and (xii) interest on
Reserve Accounts, if any, but excluding (i) Rents from month-to-month Tenants
(other than income received pursuant to that certain Management Agreement, dated
as of November 26, 2013, by and between ARC NYWSHST001, LLC and Laight Street
Parking LLC), Tenants during a free-rent period (except, with respect to Leases
with a term of five (5) years or less, up to a maximum period of six (6) months
of free rent and, with respect to Leases with a term greater than five (5)
years, up to a maximum period of twelve (12) months of free rent), or Tenants
that are included in any Bankruptcy Action, (ii) sales, use and occupancy or
other taxes on receipts required to be accounted for by Borrower to any
Governmental Authority, (iii) refunds and uncollectible accounts, (iv) sales of
furniture, fixtures and equipment, (v) Insurance Proceeds (other than business
interruption or other loss of income or rental insurance), (vi) Condemnation
Proceeds, (vii) unforfeited security deposits, (viii) utility and other similar
deposits, (ix) any disbursements to Borrower from the Reserve Funds, if any, and
(x) payments made to Borrower pursuant to the Interest Rate Cap Agreement. Gross
income shall not be diminished as a result of the Security Instruments or the
creation of any intervening estate or interest in the Properties or any part
thereof. With respect to the Viceroy Property, “Gross Income from Operations”
shall mean all income and proceeds (whether in cash or on credit, and computed
on an accrual basis) received by Borrower, Operating Lessee or Manager, or the
Tenant with respect to the restaurant and/or rooftop space to the extent such
income is payable to Borrower, Operating Lessee or Manager under the applicable
Lease for any such space, for the use, occupancy or enjoyment of the Viceroy
Property, or any part thereof, or received by Borrower or Manager for the sale
of any goods, services or other items sold on or provided from the Viceroy
Property in the ordinary course of the Viceroy Property operation, including
without limitation: (a) all income and proceeds received from rental of rooms,
Leases and commercial space, meeting, conference and/or banquet space within the
Viceroy Property including net parking revenue; (b) all income and proceeds
received from food and beverage operations and from catering services conducted
from the Viceroy Property even though rendered outside of the Viceroy Property;
(c) all income and proceeds from business interruption, rental interruption and
use and occupancy insurance with respect to the operation of the Viceroy
Property (after deducting therefrom all necessary costs and expenses incurred in
the adjustment or collection thereof); (d) all Awards for temporary use (after
deducting therefrom all costs incurred in the adjustment or collection thereof
and in Restoration of the Viceroy Property); (e) all income and proceeds from
judgments, settlements and other resolutions of disputes with respect to matters
which would be includable in this definition if received in the ordinary course
of the Viceroy Property operation (after deducting therefrom all necessary costs
and expenses incurred in the adjustment or collection thereof); and (f) interest
on credit accounts, rent concessions or credits, and other required
pass-throughs and interest on Reserve Funds; but excluding, (1) gross receipts
received by lessees, licensees or concessionaires of the Viceroy Property (other
than net receipts from the Tenant with respect to the restaurant and/or rooftop
space); (2) consideration received at the Viceroy Property for hotel
accommodations, goods and services to be provided at other hotels, although
arranged by, for or on behalf of Borrower or Manager; (3) income and proceeds
from the sale or other disposition of goods, capital assets and other items not
in the ordinary course of the Viceroy Property operation; (4) federal, state and
municipal excise, sales and use taxes collected directly from patrons or guests
of the Viceroy Property as a part of or based on the sales price of any goods,
services or other items, such as gross receipts, room, admission, cabaret or
equivalent taxes; (5) Awards (except to the extent provided in clause (d)
above); (6) refunds of amounts not included in Operating Expenses at any time
and uncollectible accounts; (7) gratuities collected by the Viceroy Property
employees; (8) the proceeds of any financing; (9) other income or proceeds
resulting other than from the use or occupancy of the Viceroy Property, or any
part thereof, or other than from the sale of goods, services or other items sold
on or provided from the Viceroy Property in the ordinary course of business; and
(10) any credits or refunds made to customers, guests or patrons in the form of
allowances or adjustments to previously recorded revenues.

 

 -15- 

 

 

“Ground Lease” shall mean, with respect to the Viceroy Property, that certain
Ground Lease, dated as of January 25, 2008, between AREP FIFTY-SEVENTH LLC, as
ground lessee, and Ricland, L.L.C., as ground lessor, as amended by that certain
First Amendment to Ground Lease, dated as of June 15, 2010, by and between
Ricland, L.L.C. and AREP FIFTY-SEVENTH LLC, that certain Possession Date
Agreement, dated as of July 1, 2010, by and between Ricland, L.L.C. and AREP
FIFTY-SEVENTH LLC and that certain Second Amendment to Ground Lease, dated as of
September 16, 2013, by and between Ricland, L.L.C. and AREP FIFTY-SEVENTH LLC,
as assigned and assumed by that certain Assignment and Assumption of Ground
Lease made by AREP FIFTY-SEVENTH LLC, as assignor, to ARC NY120W5701, LLC, as
assignee, dated as of November 18, 2013 and recorded on November 22, 2013 in the
Office of the City Register of the City of New York (the “City Register”) as
CRFN 2013000483478, as evidenced by that certain Memorandum dated as of July 1,
2010 and recorded on July 29, 2010 in the City Register as CRFN 2010000254160
and that certain Amended and Restated Memorandum dated as of September 16, 2013,
not yet recorded in the City Register, and including any estoppel certificate
issued by Ground Lessor for the benefit of Lender with respect thereto, as the
same may be further amended, restated, replaced or otherwise modified from time
to time, in accordance with the terms hereof.

 

 -16- 

 

 

“Ground Lessor” shall mean the lessor under the Ground Lease.

 

“Ground Lease Reserve Account” shall have the meaning set forth in Section 7.5.1
hereof.

 

“Ground Lease Reserve Fund” shall have the meaning set forth in Section 7.5.1
hereof.

 

“Ground Rent” shall have the meaning set forth in Section 7.5.1 hereof.

 

“Guarantor” shall mean New York REIT, Inc., a Maryland corporation.

 

“Guarantor Financial Covenants” shall have the meaning set forth in the
Guaranty.

 

“Guaranty” shall mean that certain Guaranty Agreement, dated as of the date
hereof, from Guarantor to Agent, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“Hazardous Substances” shall have the meaning set forth in the Environmental
Indemnity.

 

“Impositions” shall have the meaning set forth in Section 2.7(a) hereof.

 

“Improvements” shall have the meaning set forth in the granting clause of the
related Security Instruments with respect to each Individual Property.

 

“Indebtedness” of a Person, at a particular date, shall mean the sum (without
duplication) at such date of (a) all indebtedness or liability of such Person
(including, without limitation, amounts for borrowed money and indebtedness in
the form of mezzanine debt or preferred equity); (b) obligations evidenced by
bonds, debentures, notes, or other similar instruments; (c) obligations for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under acceptance
facilities; (f) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds, to invest in any Person
or entity, or otherwise to assure a creditor against loss; and (g) obligations
secured by any Liens, whether or not the obligations have been assumed.

 

“Indemnified Liabilities” shall have the meaning set forth in Section 10.13(b)
hereof.

 

 -17- 

 

 

“Indemnified Parties” shall mean Agent, Lender, any Affiliate of Lender that has
filed any registration statement relating to the Securitization or has acted as
the sponsor or depositor in connection with the Securitization, any Affiliate of
Lender that acts as an underwriter, placement agent or initial purchaser of
Securities issued in the Securitization, any other co-underwriters, co placement
agents or co initial purchasers of Securities issued in the Securitization, and
each of their respective officers, directors, partners, employees,
representatives, agents and Affiliates and each Person or entity who Controls
any such Person within the meaning of Section 15 of the Securities Act or
Section 20 of the Security Exchange Act, any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been
involved in the servicing of the Loan secured hereby, any Person in whose name
the encumbrance created by the Security Instruments is or will have been
recorded, any Person who may hold or acquire or will have held a full or partial
direct interest in the Loan secured hereby (including, but not limited to,
investors in the Securities, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial direct interest in the Loan
secured hereby for the benefit of third parties) as well as the respective
directors, officers, shareholders, partners, employees, agents, representatives
involved in the origination of the Loan, contractors involved in the origination
of the Loan, affiliates, subsidiaries, successors and assigns of any and all of
the foregoing (including, but not limited to, any other Person who holds or
acquires a full or partial direct interest in the Loan, whether during the term
of the Loan or as a part of a foreclosure of the Loan and including, but not
limited to any successors by merger, consolidation or acquisition of all or a
substantial portion of Lender’s assets and business).

 

“Indemnified Taxes” shall mean (a) Impositions, other than Excluded Taxes,
imposed on or with respect to any payment made by or on account of any
obligation of the Borrower under any Loan Document and (b) to the extent not
otherwise described in (a), Other Taxes.

 

“Indemnifying Person” shall mean each of Borrower and Guarantor.

 

“Independent Director” or “Independent Manager” shall mean an individual who has
prior experience as an independent director, independent manager or independent
member with at least three years of employment experience and who is provided by
CT Corporation, Corporation Service Company, National Registered Agents, Inc.,
Wilmington Trust Company, Stewart Management Company, Lord Securities
Corporation or, if none of those companies is then providing professional
Independent Directors, another nationally-recognized company reasonably approved
by Lender, in each case that is not an Affiliate of Borrower or Operating Lessee
and that provides professional Independent Directors and other corporate
services in the ordinary course of its business, and which individual is duly
appointed as an Independent Director and is not, and has never been, and will
not while serving as Independent Director be, any of the following:

 

(a)          a member, partner, equityholder, manager, director, officer or
employee of Borrower or any of its equityholders or Affiliates (other than
serving as an Independent Director of Borrower or an Affiliate of Borrower that
is not in the direct chain of ownership of Borrower and that is required by a
creditor to be a single purpose bankruptcy remote entity, provided that such
Independent Director is employed by a company that routinely provides
professional Independent Directors or managers in the ordinary course of its
business);

 

(b)          a creditor, supplier or service provider (including provider of
professional services) to Borrower or any of its equityholders or Affiliates
(other than a nationally-recognized company that routinely provides professional
Independent Directors and other corporate services to Borrower or any of its
Affiliates in the ordinary course of its business);

 

 -18- 

 

 

(c)          a family member of any such member, partner, equityholder, manager,
director, officer, employee, creditor, supplier or service provider; or

 

(d)          a Person that controls (whether directly, indirectly or otherwise)
any of (a), (b) or (c) above.

 

A natural person who otherwise satisfies the foregoing definition and satisfies
subparagraph (a) by reason of being the Independent Director of a “special
purpose entity” affiliated with Borrower shall be qualified to serve as an
Independent Director of the Borrower, provided that the fees that such
individual earns from serving as an Independent Director of affiliates of
Borrower in any given year constitute in the aggregate less than five
percent (5%) of such individual’s annual income for that year. For purposes of
this paragraph, a “special purpose entity” is an entity, whose organizational
documents contain restrictions on its activities and impose requirements
intended to preserve such entity’s separateness that are substantially similar
to those contained in the definition of Special Purpose Entity of this
Agreement.

 

“Individual Borrower” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and permitted assigns.

 

“Individual Property” shall mean each parcel of real property set forth on
Schedule III attached hereto, the Improvements thereon and all personal property
owned by an Individual Borrower (or leased pursuant to the Ground Lease or the
Master Lease) and encumbered by the applicable Security Instruments, together
with all rights pertaining to such property and Improvements, as more
particularly described in the Granting Clauses of each Security Instrument and
referred to therein as the “Property”.

 

“Initial Lender” shall have the meaning set forth in the introductory paragraph
hereto.

 

“Initial Maturity Date” shall mean December 20, 2017 or such earlier date on
which the final payment of the Notes becomes due and payable as therein or
herein provided whether at such stated maturity date, by declaration of
acceleration, or otherwise.

 

“Insurance Premiums” shall have the meaning set forth in Section 6.1(b) hereof.

 

“Insurance Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

 

“Intellectual Property” shall have the meaning set forth in Section 4.1.45(b)
hereof.

 

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement, dated
as of the Closing Date, by and between Agent and Mezzanine Agent, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.

 

 -19- 

 

 

“Interest Period” shall mean, in connection with the calculation of interest
accrued with respect to any specified Payment Date, including the Maturity Date,
the period commencing on and including the twentieth (20th) day of the prior
calendar month and ending on and including the nineteenth (19th) day of the
calendar month in which such Payment Date occurs. The Interest Period for the
Payment Date on January 20, 2017 shall be the period commencing on the Closing
Date, and ending on and including January 19, 2017.

 

“Interest Rate” shall mean the rate at which the outstanding principal amount of
the Loan bears interest from time to time in accordance with Section 2.2.4
hereof.

 

“Interest Rate Cap Agreement” shall mean, collectively, one or more interest
rate protection agreements (together with the confirmation and schedules
relating thereto) reasonably acceptable to Lender, between an Acceptable
Counterparty and Borrower obtained by Borrower as and when required pursuant to
Section 2.2.8 and Section 2.8 hereof. After delivery of a Replacement Interest
Rate Cap Agreement to Lender, the term “Interest Rate Cap Agreement” shall be
deemed to mean such Replacement Interest Rate Cap Agreement and such Replacement
Interest Rate Cap Agreement shall be subject to all requirements applicable to
the Interest Rate Cap Agreement.

 

“Issuing Bank” shall mean a bank or other financial institution which has a
minimum long-term unsecured debt rating of at least “A-” by S&P, “A3” by Moody’s
or equivalent ratings from other Approved Rating Agencies.

 

“Lease” shall mean any lease, sublease or subsublease, letting, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in any
Individual Property by or on behalf of an Individual Borrower or Operating
Lessee (other than the Ground Lease, Master Lease and Operating Lease), and
(a) every modification, amendment or other agreement relating to such lease,
sublease, subsublease, or other agreement entered into in connection with such
lease, sublease, subsublease, or other agreement and (b) every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

 

“Legal Requirements” shall mean, with respect to each Individual Property, all
federal, state, county, municipal and other governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting such Individual Property or any part thereof,
or the construction, use, alteration or operation thereof, or any part thereof,
whether now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Borrower or Operating Lessee, at any time in force affecting Borrower,
such Individual Property or any part thereof, including, without limitation, any
which may (a) require repairs, modifications or alterations in or to such
Individual Property or any part thereof, or (b) in any way limit the use and
enjoyment thereof.

 

 -20- 

 

 

“Lender” shall have the meaning set forth in the introductory paragraph hereto,
together with its successors and assigns.

 

“Lender Indemnitees” shall have the meaning set forth in Section 10.13(b)
hereof.

 

“Letter of Credit” shall mean an irrevocable, unconditional, transferable, clean
sight draft letter of credit in favor of Agent and entitling Agent to draw
thereon based solely on a statement executed by an officer of Agent stating that
it has the right to draw thereon under this Agreement, and issued by a domestic
Issuing Bank or the U.S. agency or branch of a foreign Issuing Bank, or if there
are no domestic Issuing Banks or U.S. agencies or branches of a foreign Issuing
Bank then issuing letters of credit, then such letter of credit may be issued by
an Eligible Institution, and upon which letter of credit Agent shall have the
right to draw in full: (a) if Agent has not received at least thirty (30) days
prior to the date on which the then outstanding letter of credit is scheduled to
expire, a notice from the issuing financial institution that it has renewed the
applicable letter of credit; (b) thirty (30) days prior to the date of
termination following receipt of notice from the issuing financial institution
that the applicable letter of credit will be terminated; and (c) thirty (30)
days after Agent has given notice to Borrower that the financial institution
issuing the applicable letter of credit ceases to either be an Issuing Bank or
meet the rating requirement set forth above unless Borrower replaces the Letter
of Credit with a replacement Letter of Credit from an Issuing Bank satisfying
the requirements of this Agreement within such thirty (30)-day period.

 

“Liabilities” shall have the meaning set forth in Section 9.2(b) hereof.

 

“LIBOR” shall mean, with respect to each Interest Period, the rate (expressed as
a percentage per annum and rounded up to the next nearest 1/1000 of 1%) for
deposits in U.S. dollars, for a one-month period, that appears on Reuters Screen
LIBOR01 Page (or the successor thereto) as of 11:00 a.m., London time, on the
related Determination Date. If such rate does not appear on Reuters Screen
LIBOR01 Page as of 11:00 a.m., London time, on such Determination Date, LIBOR
shall be the arithmetic mean of the offered rates (expressed as a percentage per
annum) for deposits in U.S. dollars for a one-month period that appear on the
Reuters Screen Libor Page as of 11:00 a.m., London time, on such Determination
Date, if at least two such offered rates so appear. If fewer than two such
offered rates appear on the Reuters Screen Libor Page as of 11:00 a.m., London
time, on such Determination Date, Lender (or Servicer, on Lender’s behalf) shall
request the principal London office of any four major reference banks in the
London interbank market selected by Lender to provide such bank’s offered
quotation (expressed as a percentage per annum) to prime banks in the London
interbank market for deposits in U.S. dollars for a one-month period as of 11:00
a.m., London time, on such Determination Date for the amounts of not less than
U.S. $1,000,000. If at least two such offered quotations are so provided, LIBOR
shall be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, Lender (or Servicer, on Lender’s behalf) shall
request any three major banks in New York City selected by Lender to provide
such bank’s rate (expressed as a percentage per annum) for loans in U.S. dollars
to leading European banks for a one-month period as of approximately 11:00 a.m.,
New York City time on the applicable Determination Date for amounts of not less
than U.S. $1,000,000. If at least two such rates are so provided, LIBOR shall be
the arithmetic mean of such rates. LIBOR shall be determined conclusively by
Lender or its agent, subject to manifest error. Notwithstanding the foregoing,
in no event shall LIBOR be less than zero.

 

 -21- 

 

 

“Licenses” shall have the meaning set forth in Section 4.1.22 hereof.

 

“Lien” shall mean, with respect to each Individual Property, any mortgage, deed
of trust, deed to secure debt, indemnity deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting any Individual Borrower, Operating Lessee, any
Individual Property, any portion thereof or any interest therein, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s
and other similar liens and encumbrances on such Individual Property.

 

“Loan” shall mean the loan made by Lender to Borrower pursuant to this
Agreement.

 

“Loan Documents” shall mean, collectively, this Agreement, the Notes, the
Security Instruments, the Assignment of Leases, the Environmental Indemnity, the
Assignment of Management Agreement, the Guaranty, the Cash Management Agreement,
the Lockbox Agreement, the Interest Rate Cap Agreement, the Assignment of
Interest Rate Cap Agreement, the Pledge Agreement and all other documents
executed and/or delivered in connection with the Loan.

 

“Lockbox Account” shall have the meaning set forth in Section 2.6.1(a) hereof.

 

“Lockbox Agreement” shall mean that certain Lockbox - Deposit Account Control
Agreement, dated the date hereof, among Borrower, Operating Lessee (as
applicable), Agent and Lockbox Bank, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

“Lockbox Bank” shall mean KeyBank, National Association, or another Eligible
Institution selected by Borrower, subject to Lender’s prior reasonable written
consent.

 

“Major Lease” shall mean any Lease (a) which, either individually or when taken
together with any other Lease with the same Tenant or its Affiliates, and
assuming the exercise of all expansion rights and all preferential rights to
lease additional space contained in such Lease, demises or is expected to demise
in excess of 50,000 rentable square feet in the Improvements for office use, (b)
for a single tenant in a single-tenant building, (c) contains an option or
preferential right to purchase all or any Individual Property, (d) is with an
Affiliate of Borrower as Tenant, or is not the result of arm’s-length
negotiations, or (e) is entered into during the continuance of an Event of
Default.

 

“Management Agreement” shall mean each management agreement entered into by and
between Borrower or Operating Lessee (as applicable) and the Manager, pursuant
to which the Manager is to provide management and other services with respect to
such Individual Property as set forth on Schedule VIII attached hereto, or, if
the context requires, a Replacement Management Agreement pursuant to which a
Qualified Manager is managing such Individual Property in accordance with the
terms and provisions of this Agreement, in each case as the same may be amended,
restated, replaced or otherwise modified from time to time in accordance with
the terms hereof.

 

 -22- 

 

 

“Manager” shall mean each of the entities listed on Schedule VIII attached
hereto, or, if the context requires, a Qualified Manager who is managing the
Properties or any Individual Property in accordance with the terms and
provisions of this Agreement and the applicable Management Agreement.

 

“Master Lease” shall mean, with respect to the 350 Bleecker Street Property,
that certain Agreement of Lease, dated as of July 31, 1985, by and between
Bleecker Charles Company, as master lessee, and 350 Bleecker Street Apartment
Corp., as master lessor, as amended by that certain First Amendment to Lease,
dated as of January 31, 2012, by and between Bleecker Charles Company and 350
Bleecker Street Apartment Corp. and that certain Second Amendment to Lease,
dated as of December 11, 2012, by and between Bleecker Charles Company and 350
Bleecker Street Apartment Corp., and as assigned from Bleecker Charles Company
to ARC NY350BL001, LLC pursuant to that certain Assignment and Assumption of
Master Lease, dated as of December 28, 2012, and including any estoppel
certificate issued by Master Lessor for the benefit of Lender with respect
thereto, as the same may be further amended, restated, replaced or otherwise
modified from time to time, in accordance with the terms hereof.

 

“Master Lessee” shall mean shall mean shall mean ARC NY350BL001, LLC, a Delaware
limited liability company, together with its permitted successors and permitted
assigns pursuant to this Agreement.

 

“Master Lessor” shall mean the lessor under the Master Lease.

 

“Material Adverse Effect” shall mean any material adverse effect upon (i) the
business operations, assets, or condition (financial or otherwise) of Borrower,
Operating Lessee, Guarantor, or any Individual Property, (ii) the ability of
Borrower, Operating Lessee or Guarantor to perform its obligations under any
Loan Document to which it is a party, (iii) the enforceability or validity of
any Loan Document, the perfection or priority of any Lien created under any Loan
Document or the rights, interests and remedies of Lender under any Loan Document
against any Individual Property or (iv) the value, use or operation of any
Individual Property.

 

“Maturity Date” shall mean the Initial Maturity Date or, following an exercise
by Borrower of the Extension Option described in Section 2.8 hereof, the
Extended Maturity Date, or such other date on which the final payment of
principal of the Notes becomes due and payable as therein or herein provided,
whether at such stated maturity date, by declaration of acceleration or
otherwise, or such other date on which the final payment of principal of the
Notes becomes due and payable as therein or herein provided, whether at such
stated maturity date, by declaration of acceleration, or otherwise.

 

“Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Notes and as provided
for herein or the other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

 

 -23- 

 

 

“Mezzanine Agent” shall have the meaning given to the term “Agent” in the
Mezzanine Loan Agreement.

 

“Mezzanine Borrower” shall mean, individually and/or collectively, as the
context requires, each of the entities listed on Schedule II attached hereto,
each a Delaware limited liability company, together with their respective
successors and permitted assigns.

 

“Mezzanine Deposit Account” shall have the meaning given to the term “Mezzanine
Deposit Account” in the Mezzanine Loan Agreement.

 

“Mezzanine Extension Option” shall have the meaning given to the term “Extension
Option” in the Mezzanine Loan Agreement.

 

“Mezzanine Lender” shall have the meaning given to the term “Lender” in the
Mezzanine Loan Agreement.

 

“Mezzanine Loan” shall mean that certain loan in the original principal amount
of TWO HUNDRED SIXTY MILLION and 00/100 Dollars ($260,000,000.00) made of even
date herewith by Mezzanine Lender to Mezzanine Borrower.

 

“Mezzanine Loan Agreement” shall mean that certain Mezzanine Loan Agreement,
dated as of the date hereof, by and among Mezzanine Borrower, Mezzanine Agent,
Column Financial Inc., as initial lender, and Mezzanine Lender, as acknowledged
and agreed to by ARC NY120W5701 TRS Mezz, LLC, a Delaware limited liability
company (solely with respect to certain terms and conditions specified therein),
as the same may be amended, restated, replaced, supplemented or otherwise
modified, from time to time.

 

“Mezzanine Loan Documents” shall have the meaning given to the term “Loan
Documents” in the Mezzanine Loan Agreement.

 

“Mezzanine Loan Event of Default” shall have the meaning given to the term
“Event of Default” in the Mezzanine Loan Agreement.

 

“Mezzanine Monthly Debt Service Payment Amount” shall have the meaning given to
the term “Monthly Debt Service Payment Amount” in the Mezzanine Loan Agreement.

 

“Mezzanine Pledge Agreement shall have the meaning given to the term “Pledge
Agreement” in the Mezzanine Loan Agreement.

 

“Mezzanine Release Amount” shall have the meaning given to the term “Release
Amount” in the Mezzanine Loan Agreement.

 

“Mezzanine Release Collateral” shall have the meaning given to the term “Release
Collateral” in the Mezzanine Loan Agreement.

 

 -24- 

 

 

“Monthly Debt Service Payment Amount” shall mean, on each Payment Date, the
amount of interest which accrues on the Loan for the related Interest Period.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Morningstar” shall mean Morningstar Credit Ratings, LLC, or any of its
successors in interest, assigns, and/or changed entity name or designation
resulting from any acquisition by Morningstar, Inc. or other similar entity of
Morningstar Credit Ratings, LLC.

 

“Multiemployer Plan” shall mean a multiemployer plan, as defined in
Section 3(37) or Section 4001(a)(3) of ERISA, as applicable, in respect of which
the Borrower, Operating Lessee, Guarantor or any ERISA Affiliate could have any
obligation or liability, contingent or otherwise.

 

“Multiple Employer Plan” shall mean a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that has two or more contributing sponsors, as
defined in Section 4001(a)(13) of ERISA, at least two of which are not under
common control, as determined pursuant to Section 4001(a)(14)(B) of ERISA and
(a) is maintained for employees of the Borrower, Operating Lessee, Guarantor or
any ERISA Affiliate, or (b) was so maintained, and in respect of which the
Borrower, Operating Lessee, Guarantor or any ERISA Affiliate could have
liability under Sections 4062-4069 of ERISA in the event such plan has been or
were to be terminated.

 

“Net Cash Flow” shall mean, with respect to the Property for any period, the
amount obtained by subtracting Operating Expenses and Capital Expenditures for
such period from Gross Income from Operations for such period.

 

“Net Operating Income” shall mean, for any period, the amount obtained by
subtracting Operating Expenses for such period from Gross Income from Operations
for such period.

 

“Net Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

 

“Net Proceeds Deficiency” shall have the meaning set forth in Section 6.4(b)(vi)
hereof.

 

“New Mezzanine Borrower” shall have the meaning set forth in Section 9.1.3(b)
hereof.

 

“New Mezzanine Loan” shall have the meaning set forth in Section 9.1.3(b)
hereof.

 

“Note” or “Notes” shall mean, individually and/or collectively as the context
requires, each promissory note set forth on Schedule XV attached hereto, in the
principal amount set forth on Schedule XV attached hereto, made by Borrower in
favor of Initial Lender, as the same may have been or may be amended, restated,
replaced, severed, split, supplemented or otherwise modified from time to time.

 

 -25- 

 

 

“O&M Program” shall mean each operations and maintenance program set forth on
Schedule XIII attached hereto, as the same may be amended, replaced,
supplemented or otherwise modified from time to time.

 

“Obligations” shall mean Borrower’s obligation to pay the Debt, Borrower’s
obligation to perform its obligations under the Notes, this Agreement and the
other Loan Documents and Operating Lessee’s obligation to perform its
obligations under this Agreement and, as applicable, the other Loan Documents.

 

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
or Operating Lessee, as applicable, which is signed by an authorized senior
officer of Borrower or Operating Lessee, as applicable.

 

“Operating Expenses” shall mean, for any period, the total of all expenditures,
computed in accordance with GAAP, of whatever kind during such period relating
to the operation, maintenance and management of the Properties that are incurred
on a regular monthly or other periodic basis, including without limitation,
Ground Rent, bad debt, utilities, ordinary repairs and maintenance, insurance,
license fees, property taxes and assessments, advertising expenses, management
fees, payroll and related taxes, computer processing charges, operational
equipment or other lease payments as approved by Lender, and other similar
costs, but excluding depreciation, Debt Service, debt service under the
Mezzanine Loan, Capital Expenditures, and contributions to the Reserve Funds.
With respect to the Viceroy Property, “Operating Expenses” shall mean the sum of
all costs and expenses of operating, maintaining, directing, managing and
supervising the Viceroy Property (excluding, (i) depreciation and amortization,
(ii) any Debt Service in connection with the Loan and any debt service under the
Mezzanine Loan, (iii) any Capital Expenditures in connection with the Viceroy
Property, or (iv) the costs of any other things specified to be done or provided
at Borrower’s or Manager’s sole expense), incurred by Borrower or Manager
pursuant to the applicable Management Agreement, or as otherwise specifically
provided therein, which are properly attributable to the period under
consideration under Borrower’s system of accounting, including without
limitation: (a) the cost of all food and beverages sold or consumed and of all
necessary chinaware, glassware, linens, flatware, uniforms, utensils and other
items of a similar nature, including such items bearing the name or identifying
characteristics of the hotels as Borrower and/or Manager shall reasonably
consider appropriate (“Operating Equipment”) and paper supplies, cleaning
materials and similar consumable items (“Operating Supplies”) placed in use
(other than reserve stocks thereof in storerooms), Operating Equipment and
Operating Supplies shall be considered to have been placed in use when they are
transferred from the storerooms of the Viceroy Property to the appropriate
operating departments; (b) salaries and wages of personnel of the Viceroy
Property, including costs of payroll taxes and employee benefits; (c) the cost
of all other goods and services obtained by Borrower or Manager in connection
with its operation of the Viceroy Property including, without limitation, heat
and utilities, office supplies and all services performed by third parties,
including leasing expenses in connection with telephone and data processing
equipment, and all existing and any future installations necessary for the
operation of the Improvements for hotel purposes (including, without limitation,
heating, lighting, sanitary equipment, air conditioning, laundry, refrigerating,
built-in kitchen equipment, telephone equipment, communications systems,
computer equipment and elevators), Operating Equipment and existing and any
future furniture, furnishings, wall coverings, fixtures and hotel equipment
necessary for the operation of the building for hotel purposes which shall
include all equipment required for the operation of kitchens, bars, laundries,
(if any) and dry cleaning facilities (if any), office equipment, cleaning and
engineering equipment and vehicles; (d) the cost of repairs to and maintenance
of the Viceroy Property other than of a capital nature; (e) insurance premiums
for general liability insurance, workers’ compensation insurance or insurance
required by similar employee benefits acts and such business interruption or
other insurance as may be provided for protection against claims, liabilities
and losses arising from the operation of the Viceroy Property (as distinguished
from any property damage insurance on the Viceroy Property building or its
contents) and losses incurred on any self-insured risks of the foregoing types,
provided that Borrower and Manager have specifically approved in advance such
self-insurance or insurance is unavailable to cover such risks; (f) all Taxes
and Other Charges (other than federal, state or local income taxes or the
equivalent) payable by or assessed against Borrower, Operating Lessee or Manager
with respect to the operation of the Viceroy Property; (g) legal fees and fees
of any firm of independent certified public accounts designated from time to
time by Borrower (the “Independent CPA”) for services directly related to the
operation of the Viceroy Property; (h) the costs and expenses of technical
consultants and specialized operational experts for specialized services in
connection with non-recurring work on operational, legal, functional,
decorating, design or construction problems and activities; provided, however,
that if such costs and expenses have not been included in an approved budget,
then if such costs exceed $5,000 in any one instance the same shall be subject
to approval by Lender not to be unreasonably withheld; (i) all expenses for
advertising the Viceroy Property and all expenses of sales promotion and public
relations activities; (j) the cost of any reservations system, any accounting
services or other group benefits, programs or services from time to time made
available to properties in the Borrower’s system; (k) the cost associated with
any retail Leases; (l) any management fees, basic and incentive fees or other
fees and reimbursables paid or payable to Manager under the applicable
Management Agreement, but excluding any amounts paid or payable by Manager and
not reimbursable under the applicable Management Agreement; and (m) all costs
and expenses of owning, maintaining, conducting and supervising the operation of
the Viceroy Property to the extent such costs and expenses are not included
above.

 

 -26- 

 

 

“Operating Lease” shall mean, with respect to the Viceroy Property, that certain
Lease Agreement, dated as of November 18, 2013, by and between Operating Lessor
and Operating Lessee, as amended by that certain First Amendment of Lease, dated
as of December 20, 2016, by and between Operating Lessor and Operating Lessee,
as the same may be amended, restated, replaced, supplemented or modified from
time to time, in accordance with the terms hereof.

 

“Operating Lessee” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and permitted assigns.

 

“Operating Lessor” shall mean ARC NY120W5701, LLC, a Delaware limited liability
company, together with its permitted successors and permitted assigns, as
lessor, pursuant to the Operating Lease and this Agreement.

 

“Operating Pledgor” shall mean ARC NY120W5701 TRS Mezz II, LLC, a Delaware
limited liability company, together with its permitted successors and permitted
assigns pursuant to this Agreement.

 

 -27- 

 

 

“Operating Rent” shall mean all rent and other amounts due to Operating Lessor
under the Operating Lease with respect to the Viceroy Property.

 

“Other Charges” shall mean all Ground Rent (other than Operating Rent),
maintenance charges, impositions other than Taxes, and any other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining any Individual Property, now or
hereafter levied or assessed or imposed against such Individual Property or any
part thereof.

 

“Other Connection Taxes” shall mean Impositions imposed as a result of a present
or former connection between Lender and the jurisdiction imposing such
Imposition (other than connections arising from such Lender having executed,
delivered, become a party to, performed its obligations under, received payments
under, received or perfected a security interest under, engaged in any other
transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in the Loan or any Loan Document).

 

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Impositions that arise from any payment
made under, from the execution, delivery, performance, enforcement or
registration of, from the receipt or perfection of a security interest under, or
otherwise with respect to, any Loan Document, except any such Impositions that
are Other Connection Taxes imposed with respect to an assignment.

 

“PACE Loan” shall mean any Property-Assessed Clean Energy loan or any similar
financing.

 

“Participant Register” shall have the meaning set forth in Section 9.1.4(b)
hereof.

 

“Participation” shall have the meaning set forth in Section 9.1.4(a) hereof.

 

“Payment Date” shall mean the twentieth (20th) day of each calendar month during
the term of the Loan or, if such day is not a Business Day, the immediately
preceding Business Day.

 

“PBGC” shall have the meaning assigned to that term in the definition of ERISA
Event.

 

“Permitted Encumbrances” shall mean, with respect to each Individual Property,
(a) the Liens and security interests created by the Loan Documents, (b) all
Liens, encumbrances and other matters disclosed in the Title Insurance Policy
relating to such Individual Property or any part thereof, (c) Liens, if any, for
Taxes imposed by any Governmental Authority not yet due or delinquent (other
than Liens securing a PACE Loan), (d) such other title and survey exceptions as
Lender has approved or may approve in writing in Lender’s sole discretion, and
(e) the Lien of the Pledge Agreement, the Mezzanine Loan Documents, any
mezzanine loan entered into pursuant to Section 9.1.3(b) hereof and any
Mezzanine Pledge Agreement.

 

 -28- 

 

 

“Permitted Investments” shall mean any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, including
those issued by Servicer, the trustee under any Securitization or any of their
respective Affiliates, payable on demand or having a maturity date not later
than the Business Day immediately prior to the first Payment Date following the
date of acquiring such investment and meeting one of the appropriate standards
set forth below:

 

(i)          obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or instrumentality
thereof provided such obligations are backed by the full faith and credit of the
United States of America including, without limitation, obligations of: the U.S.
Treasury (all direct or fully guaranteed obligations), the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates) and the U.S. Department of Housing and Urban Development (local
authority bonds); provided, however, that the investments described in this
clause (A) must have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if rated by S&P, must not have any qualifier
affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, (D) must
not be subject to liquidation prior to their maturity and (E) must have
maturities of not more than 365 days;

 

(ii)         Federal Housing Administration debentures having maturities of not
more than 365 days;

 

(iii)        obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated system-wide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), and the Resolution Funding Corp. (debt obligations); provided,
however, that the investments described in this clause (A) must have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have any qualifier affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, (D) must not be subject to
liquidation prior to their maturity and (E) must have maturities of not more
than 365 days;

 

(iv)        federal funds, unsecured certificates of deposit, time deposits,
bankers’ acceptances and repurchase agreements or obligations with maturities of
not more than 365 days issued or held by any depository institution or trust
company incorporated or organized under the laws of the United States of America
or any state thereof and subject to supervision and examination by federal or
state banking authorities, so long as the commercial paper or other short term
obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency in the highest short term rating category and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) (and if the term is between one and three months
rated at least A1 by Moody’s) and, if it has a term in excess of three months,
the long-term debt obligations of which are rated AAA (or the equivalent) by
each of the Rating Agencies; provided, however, that the investments described
in this clause (A) must have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have any
qualifier affixed to their rating, (C) if such investments have a variable rate
of interest, such interest rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with that index, (D) 
must not be subject to liquidation prior to their maturity and (E) must have
maturities of not more than 365 days;

 

 -29- 

 

 

(v)         intentionally omitted;

 

(vi)        debt obligations with maturities of not more than 365 days and at
all times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities) in its highest
long-term unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
any qualifier affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

 

(vii)       commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than 365 days and that at all times is rated by each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) in its highest short-term unsecured debt rating (and
if the term is between one and three months rated at least A1 by Moody’s) and,
if it has a term in excess of three months, the long-term debt obligations of
which are rated AAA (or the equivalent) by each of the Rating Agencies;
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have any qualifier affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;

 

 -30- 

 

 

(viii)      units of taxable money market funds, which funds are regulated
investment companies, seek to maintain a constant net asset value per share and
invest solely in obligations backed by the full faith and credit of the United
States, which funds have the highest rating available from each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds; and

 

(ix)         any other security, obligation or investment which has been
approved as a Permitted Investment in writing by (a) Lender and (b) each Rating
Agency, as evidenced by a written confirmation that the designation of such
security, obligation or investment as a Permitted Investment will not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities by such Rating
Agency;

 

provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.

 

“Person” shall mean any individual, corporation, partnership, joint venture,
limited liability company, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

 

“Personal Property” shall have the meaning set forth in the granting clause of
each Security Instrument.

 

“Physical Condition Reports” shall mean each property condition report delivered
in connection with the closing of the Loan, satisfactory in form and substance
to Lender.

 

“Plan” shall mean a Single Employer Plan, a Multiple Employer Plan or a
Multiemployer Plan.

 

“Pledge Agreement” shall mean that certain Pledge and Security Agreement
(Operating Lease), dated as of the date hereof, from Operating Pledgor to Agent,
with respect to 100% of the direct equity interests in Operating Lessee, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

“Pledged Securities” shall mean the “Pledged Securities” as such term is defined
in the Pledge Agreement.

 

“Policies” or “Policy” shall have the meaning specified in Section 6.1(b)
hereof.

 

 -31- 

 

 

“Prescribed Laws” shall mean, collectively, (a) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), (b) Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001, and
relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism, (c) the International
Emergency Economic Power Act, 50 U.S.C. § 1701 et seq. and (d) all other Legal
Requirements relating to money laundering or terrorism.

 

“Prime Rate” shall mean, on a particular date, a rate per annum equal to the
rate of interest published in The Wall Street Journal as the “prime rate”, as in
effect on such day, with any change in the prime rate resulting from a change in
such published prime rate to be effective as of the date of the relevant change
in such published prime rate; provided, however, that if more than one prime
rate is published in The Wall Street Journal for a day, the average of the prime
rates shall be used; provided, further, however, that the Prime Rate (or the
average of the prime rates) will be rounded to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%. In the event that
The Wall Street Journal should cease or temporarily interrupt publication, then
the Prime Rate shall mean the daily average prime rate published in another
business newspaper, or business section of a newspaper, of national standing
chosen by Lender. If The Wall Street Journal resumes publication, the substitute
index will immediately be replaced by the prime rate published in The Wall
Street Journal. In the event that a prime rate is no longer generally published
or is limited, regulated or administered by a governmental or quasi-governmental
body, then Lender shall select a comparable interest rate index which is readily
available to Borrower and verifiable by Borrower but is beyond the control of
Lender. Lender shall give Borrower prompt written notice of its choice of a
substitute index and when the change became effective. Such substitute index
will also be rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16
of 1%, to the next higher 1/16 of 1%. The determination of the Prime Rate by
Lender shall be conclusive and binding absent manifest error. Notwithstanding
the foregoing, in no event shall Prime Rate be less than zero.

 

“Prime Rate Loan” shall mean the Loan at such time as interest thereon accrues
at a rate of interest based upon the Prime Rate plus the Prime Rate Spread.

 

“Prime Rate Spread” shall mean the difference (expressed as the number of basis
points) between (a) LIBOR plus the Spread on the date LIBOR was last applicable
to the Loan and (b) the Prime Rate on the date that LIBOR was last applicable to
the Loan; provided, however, in no event shall such difference be a negative
number.

 

“Property” or “Properties” shall mean, collectively, each and every Individual
Property which is subject to the terms of this Agreement, to the extent the same
is encumbered by one or more Security Instrument and has not been released
therefrom pursuant to the terms hereof.

 

“Provided Information” shall mean any and all financial and other written
information provided at any time by, or on behalf of, any Indemnifying Person
with respect to the Property, Borrower, Guarantor and/or Manager.

 

 -32- 

 

 

“Qualified Manager” shall mean either (a) Manager; or (b) any reputable and
experienced New York City-recognized or nationally-recognized property
management organization (which may be an Affiliate of Borrower) that satisfies
the following criteria: (i) possesses at least five (5) years’ experience
managing properties similar in size, class, use and operation as the Properties,
(ii) manages at least 5,000,000 square feet of rentable space for properties
similar in size, class, use and operation as the Properties and (iii) has not
been a party to a Bankruptcy Action or taken advantage of any law under the
Bankruptcy Code for the benefit of debtors within the seven (7) years prior to
the date of determination; or (c) in the reasonable judgment of Lender, a
reputable and experienced management organization (which may be an Affiliate of
Borrower) possessing experience in managing properties similar in size, scope,
use and value as the Properties, or otherwise reasonably approved by Lender; or
(d) any of those certain property management organizations set forth on Schedule
XIV attached hereto, provided that, with respect to clauses (b) and (c) only, if
required by Lender after a Securitization, Borrower shall have obtained a Rating
Agency Confirmation from the Approved Rating Agencies with respect to such
Manager and its management of the Property.

 

“Radius” shall have the meaning set forth in Section 6.1(c) hereof.

 

“Rating Agencies” shall mean each of S&P, Moody’s, Fitch, DBRS and Morningstar,
or any other nationally recognized statistical rating agency which has assigned
a rating to the Securities.

 

“Rating Agency Confirmation” means, collectively, a written affirmation from
each of the Approved Rating Agencies that the credit rating of the Securities
given by such Approved Rating Agency with respect to a Securitization
immediately prior to the occurrence of the event with respect to which such
Rating Agency Confirmation is sought will not be qualified, downgraded or
withdrawn as a result of the occurrence of such event, which affirmation may be
granted or withheld in such Approved Rating Agency’s sole and absolute
discretion. In the event that, at any given time, no Approved Rating Agency has
elected to consider whether to grant or withhold such an affirmation and Lender
does not otherwise have an approval right with respect to such event, then the
term Rating Agency Confirmation shall be deemed instead to require the written
reasonable approval of Lender based on its good faith determination of whether
the Approved Rating Agencies would issue a Rating Agency Confirmation, provided
that the foregoing shall be inapplicable in any case in which Lender has an
independent approval right in respect of the matter at issue pursuant to the
terms of this Agreement.

 

“Register” shall have the meaning set forth in Section 9.3(e) hereof.

 

“Regulation” includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency or department.

 

“Regulation AB” shall mean Regulation AB under the Securities Act and the
Exchange Act, as such Regulation may be amended from time to time.

 

“Reimbursement Contribution” shall have the meaning set forth in
Section 10.30(c) hereof.

 

 -33- 

 

 

“Release” shall have the meaning set forth in the Environmental Indemnity.

 

“Release Amount” shall mean, in connection with a release pursuant to Section
2.5.2 hereof of any Individual Property, the following amount: (i) if
$100,000,000.00 or less has been prepaid pursuant to Section 2.5.2 of this
Agreement, then one hundred percent (100%) of the Allocated Loan Amount of each
such Individual Property(ies) being released, or (ii) if more than
$100,000,000.00 has been prepaid pursuant to Section 2.5.2 of this Agreement,
then one hundred ten percent (110%) of the Allocated Loan Amount of each such
Individual Property being released thereafter.

 

“Release Date” shall have the meaning set forth in Section 2.5.2(a) hereof.

 

“Release Property” shall have the meaning set forth in Section 2.5.2 hereof.

 

“Rents” shall mean, with respect to each Individual Property, all rents
(including, without limitation, percentage rents), rent equivalents, moneys
payable as damages or in lieu of rent or rent equivalents, royalties (including,
without limitation, all oil and gas or other mineral royalties and bonuses),
income, receivables, receipts, revenues, deposits (including, without
limitation, security, utility and other deposits), accounts, cash, issues,
profits, charges for services rendered, all other amounts payable as rent under
any Lease or other agreement relating to such Individual Property, including,
without limitation, charges for electricity, oil, gas, water, steam, heat,
ventilation, air-conditioning and any other energy, telecommunication,
telephone, utility or similar items or time use charges, HVAC equipment charges,
sprinkler charges, escalation charges, license fees, maintenance fees, charges
for Taxes, operating expenses or other reimbursables payable to Borrower or
Operating Lessee (or to the Manager for the account of Borrower or Operating
Lessee) under any Lease, and other consideration of whatever form or nature
received by or paid to or for the account of or benefit of Borrower or Operating
Lessee or its agents or employees from any and all sources arising from or
attributable to the Property, and proceeds, if any, from business interruption
or other loss of income insurance, including, without limitation, with respect
to the Viceroy Property, all hotel receipts (including, without limitation,
percentage rents), revenues and credit card receipts collected from guest rooms,
restaurants, bars, meeting rooms, banquet rooms and recreational facilities, all
receivables, customer obligations, installment payment obligations and other
obligations now existing or hereafter arising or created out of the sale, lease,
sublease, license, concession or other grant of the right of the use and
occupancy of property or rendering of services by Borrower, Operating Lessee or
any operator or manager of the hotel or the commercial space located in the
Improvements or acquired from others (including, without limitation, from the
rental of any office space, retail space, guest rooms or other space, halls,
stores, and offices, and deposits securing reservations of such space), license,
lease, sublease and concession fees and rentals, health club membership fees,
food and beverage wholesale and retail sales, service charges, vending machine
sales and proceeds, if any, from business interruption or other loss of income
insurance.

 

“Replacement Interest Rate Cap Agreement” shall mean, collectively, one or more
interest rate protection agreements, reasonably acceptable to Lender, from an
Acceptable Counterparty with terms substantially similar to the Interest Rate
Cap Agreement except that the same shall be effective as of the date required in
Section 2.2.8(c); provided that, after a Securitization, to the extent any such
interest rate protection agreements do not meet the foregoing requirements, a
“Replacement Interest Rate Cap Agreement” shall be such interest rate protection
agreements approved in writing by the Approved Rating Agencies with respect
thereto.

 

 -34- 

 

 

“Replacement Management Agreement” shall mean, collectively, (a) a management
agreement with a Qualified Manager, which management agreement shall be subject
to Lender’s prior written consent (which consent shall not be unreasonably
withheld, conditioned or delayed) and, following a Securitization, a Rating
Agency Confirmation with respect to such Manager and its management of the
Properties from the applicable Approved Rating Agencies; and (b) an assignment
of management agreement and subordination of management fees substantially in
the form delivered to Lender on the Closing Date (or of such other form and
substance reasonably acceptable to Lender), executed and delivered to Lender by
Borrower or Operating Lessee (as applicable) and such Qualified Manager at
Borrower’s expense.

 

“Replacement Reserve Account” shall have the meaning set forth in Section 7.3.1
hereof.

 

“Replacement Reserve Fund” shall have the meaning set forth in Section 7.3.1
hereof.

 

“Replacement Reserve Monthly Deposit” shall have the meaning set forth in
Section 7.3.1 hereof.

 

“Replacements” shall have the meaning set forth in Section 7.3.1 hereof.

 

“Required Lender Threshold” shall have the meaning set forth in Section 9.3(a)
hereof.

 

“Required Repairs” shall have the meaning set forth in Section 5.1.39(a) hereof.

 

“Reserve Funds” shall mean, collectively, the Tax and Insurance Reserve Fund,
the Replacement Reserve Fund, the Rollover Reserve Fund, the Excess Cash Flow
Reserve Fund, the FF&E Reserve Fund, the Ground Lease Reserve Fund, the Common
Charge Reserve Fund and any other escrow fund established pursuant to the Loan
Documents; provided, however, in no event shall the WWP Fund be a Reserve Fund.

 

“Resolution Authority” means anybody which has authority to exercise any
Write-down and Conversion Powers.

 

“Restoration” shall mean the repair and restoration of an Individual Property
after a Casualty or Condemnation as nearly as possible to the condition the
Individual Property was in immediately prior to such Casualty or Condemnation,
with such alterations as may be reasonably approved by Lender.

 

“Restricted Party” shall mean, collectively (a) Borrower, Mezzanine Borrower,
Operating Lessee, Guarantor and any Affiliated Manager and (b) any shareholder,
partner, member, non-member manager, direct or indirect legal or beneficial
owner of, Borrower, Mezzanine Borrower, Operating Lessee, Guarantor, any
Affiliated Manager or any non-member manager.

 

 -35- 

 

 

“Rollover Reserve Account” shall have the meaning set forth in Section 7.4.1
hereof.

 

“Rollover Reserve Fund” shall have the meaning set forth in Section 7.4.1
hereof.

 

“S&P” shall mean Standard & Poor’s Ratings Services.

 

“Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance,
assignment, transfer, encumbrance, pledge, grant of option or other transfer or
disposal of a legal or beneficial interest, whether direct or indirect,
including, without limitation, any merger or consolidation of Guarantor.

 

“Second Priority Security Instrument” shall mean that certain Second Priority
Fee and Leasehold Mortgage and Security Agreement, dated as of the date hereof,
executed and delivered by the Borrower and Operating Lessee, as security for the
Loan and encumbering the Properties, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

“Securities” shall have the meaning set forth in Section 9.1.1(a) hereof.

 

“Securities Act” shall have the meaning set forth in Section 9.2(a) hereof.

 

“Securitization” shall have the meaning set forth in Section 9.1.1(a) hereof.

 

“Security Instrument” shall mean, individually and/or collectively as the
context may require, (i) with respect to each Individual Property, that certain
first priority mortgage, dated as of the date hereof, executed and delivered by
the applicable Borrower and, with respect to the Viceroy Property, Operating
Lessee, encumbering such Individual Property, and (ii) with respect to the
Properties, the Second Priority Security Instrument, as each may be amended,
restated, replaced, supplemented or otherwise modified from time to time. With
respect to any Note, the defined term “Security Instrument” or “Security
Instruments” when used therein shall mean and refer only to those certain
Security Instruments listed on Schedule XV attached hereto next to the
corresponding Note.

 

“Series A Notes” shall mean, collectively, each Note set forth on Schedule XV
attached hereto identified as a Series A Note.

 

“Series B Notes” shall mean, collectively, each Note set forth on Schedule XV
attached hereto identified as a Series B Note.

 

“Servicer” shall have the meaning set forth in Section 9.6 hereof.

 

“Servicing Agreement” shall have the meaning set forth in Section 9.6 hereof.

 

 -36- 

 

 

“Severed Loan Documents” shall have the meaning set forth in Section 8.2(c)
hereof.

 

“SFHA” shall have the meaning set forth in Section 6.1(a)(i) hereof.

 

“Significant Obligor” shall have the meaning set forth in Item 1101(k) of
Regulation AB under the Securities Act.

 

“Single Employer Plan” shall mean a single employer plan, as defined in
Section 3(41) or Section 4001(a)(15) of ERISA, as applicable, that is not a
Multiple Employer Plan and (a) is maintained for employees of the Borrower,
Guarantor or any ERISA Affiliate, or (b) was so maintained, and in respect of
which the Borrower, Guarantor or any ERISA Affiliate could have liability under
Sections 4062-4069 of ERISA in the event such plan has been or were to be
terminated.

 

“Special Purpose Entity” shall mean a corporation, limited partnership or
limited liability company that, at all times on and after the date hereof, has
complied with (and with respect to clauses (b), (c), (v), (ee), (pp) and (rr)
below, at all times since the date of its formation) and shall at all times
comply with the following requirements unless it has received prior consent (not
to be unreasonably withheld, delayed or conditioned) to do otherwise from Lender
or a permitted administrative agent thereof, and, while the Loan is securitized,
a Rating Agency Confirmation from each of the Approved Rating Agencies, in each
case:

 

(a)          is and shall be organized solely for the purpose of (i) in the case
of Borrower and Operating Lessee, acquiring, developing, owning, holding,
selling, leasing, transferring, exchanging, managing and operating the related
Individual Property, entering into and performing its obligations under the Loan
Documents with Lender, refinancing the related Individual Property in connection
with a permitted repayment of the Loan, and transacting lawful business that is
incident, necessary and appropriate to accomplish the foregoing; or (ii) in the
case of Operating Pledgor, owning, holding, selling, transferring, exchanging
and managing the Collateral, and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing;

 

(b)          has not engaged and shall not engage in any business unrelated to
(i) in the case of Borrower and Operating Lessee, the acquisition, development,
ownership, management or operation of the related Individual Property, or (ii)
in the case of Operating Pledgor, the applicable purposes set forth in
clause (a)(ii) above;

 

(c)          has not owned and shall not own any real property other than, in
the case of each Individual Borrower, the related Individual Property;

 

(d)          does not have, shall not have and at no time had any assets other
than (i) in the case of Borrower and Operating Lessee, the related Individual
Property and personal property necessary or incidental to its ownership and
operation of such Individual Property, (ii) in the case of Operating Pledgor,
the (A) Collateral and (B) cash, cash equivalents and accounts receivable and
(iii) any other assets expressly permitted to be owned pursuant to this
Agreement;

 

 -37- 

 

 

(e)          has not engaged in, sought, consented to or permitted and shall not
engage in, seek, consent to or permit (i) any dissolution, winding up,
liquidation, consolidation or merger, (ii) any sale or other transfer of all or
substantially all of its assets or any sale of assets outside the ordinary
course of its business, except as permitted by the Loan Documents, or (iii) in
the case of Operating Pledgor, any transfer of the Collateral;

 

(f)          shall not cause, consent to or permit any amendment of its limited
partnership agreement, articles of incorporation, articles of organization,
certificate of formation, operating agreement or other formation document or
organizational document (as applicable) with respect to the matters set forth in
this definition;

 

(g)          if such entity is a limited partnership, has and shall have at
least one general partner and has and shall have, as its only general partners,
Special Purpose Entities each of which (i) is a corporation or single-member
Delaware limited liability company, (ii) has two (2) Independent Directors, and
(iii) holds a direct interest as general partner in the limited partnership of
not less than one-half of one percent (0.5%);

 

(h)          if such entity is a corporation, has and shall have at least
two (2) Independent Directors, and shall not cause or permit the board of
directors of such entity to take any Bankruptcy Action either with respect to
itself;

 

(i)          if such entity is a limited liability company (other than a limited
liability company meeting all of the requirements applicable to a single-member
limited liability company set forth in this definition of “Special Purpose
Entity”), has and shall have at least one (1) member that is a Special Purpose
Entity, that is a corporation or a single-member limited liability company, that
has at least two (2) Independent Directors and that directly owns at least
one-half-of-one percent (0.5%) of the equity of the limited liability company;

 

(j)          if such entity is a single-member limited liability company, (i) is
and shall be a Delaware limited liability company (except with respect to 50
Varick LLC, which is and shall be a Delaware or New York limited liability
company), (ii) has and shall have at least two (2) Independent Managers serving
as managers of such company, (iii) shall not take any action requiring the
unanimous affirmative vote of the managing member and the Independent Directors
and shall not cause or permit the members or managers of such entity to take any
action requiring the unanimous affirmative vote of the managing member and the
Independent Directors unless two (2) Independent Directors then serving as
managers of the company shall have consented in writing to such action, and
(iv) has and shall have either (A) a member which owns no economic interest in
the company, has signed the company’s limited liability company agreement and
has no obligation to make capital contributions to the company, or (B) two (2)
natural persons or one entity that is not a member of the company, that has
signed its limited liability company agreement and that, under the terms of such
limited liability company agreement becomes a member of the company immediately
prior to the withdrawal or dissolution of the last remaining member of the
company;

 

 -38- 

 

 

(k)          has not and shall not (and, if such entity is (i) a limited
liability company, has and shall have a limited liability agreement or an
operating agreement, as applicable, (ii) a limited partnership, has a limited
partnership agreement, or (iii) a corporation, has a certificate of
incorporation or articles that, in each case, provides that such entity shall
not) (A) dissolve, merge, liquidate, consolidate; (B) sell all or substantially
all of its assets except as expressly permitted under the Loan Documents;
(C) amend its organizational documents with respect to the matters set forth in
this definition without the consent of Lender; or (D) without the affirmative
vote of two (2) Independent Directors take any Bankruptcy Action;

 

(l)          intends at all times to be solvent and has paid and intends to pay
its debts and liabilities (including, a fairly-allocated portion of any
personnel and overhead expenses that it shares with any Affiliate) from its
assets as the same shall become due, and has maintained and intends to maintain
adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated business operations;
provided, however, the foregoing shall not require any direct or indirect
member, partner or shareholder of Borrower to make any additional capital
contributions to Borrower;

 

(m)          has not failed and shall not fail to correct any known
misunderstanding regarding the separate identity of such entity and has not
identified and shall not identify itself as a division of any other Person;

 

(n)          (i) has maintained and shall maintain its bank accounts, books of
account, books and records separate from those of any other Person; provided,
however, each Individual Borrower’s assets may be included in a consolidated
financial statement of its Affiliates if (A) appropriate notation shall be made
on such consolidated financial statements to indicate the separateness of such
Individual Borrower and such Affiliates and, except with respect to its
co-borrowers hereunder, that such Individual Borrower’s assets and credit are
not available to satisfy the debts and other obligations of such Affiliates or
any other Person, and (B) such assets shall be listed on each Individual
Borrower’s own separate balance sheet, and (ii) to the extent that it is
required to file tax returns under applicable law, has filed and shall file its
own tax returns, except to the extent that such Individual Borrower (x) is
required by law to file consolidated tax returns or (y) is treated as a
“disregarded entity” for tax purposes and are not required to file tax returns
under applicable law;

 

(o)          has maintained and shall maintain its own records, books,
resolutions and agreements;

 

(p)          has not commingled and shall not commingle its funds or assets with
those of any other Person and has not participated and shall not participate in
any cash management system with any other Person other than as co-borrowers
under the Loan and the loan being repaid as of the date hereof;

 

(q)          has held and shall hold its assets in its own name;

 

 -39- 

 

 

(r)          has conducted and shall conduct its business in its name or in a
name franchised or licensed to it by an entity other than an Affiliate of itself
or of Borrower or Operating Lessee (as applicable), except for business
conducted on behalf of itself by another Person under a business management
services agreement that is on commercially-reasonable terms, so long as the
manager, or equivalent thereof, under such business management services
agreement holds itself out as an agent of Borrower or Operating Lessee (as
applicable);

 

(s)          (i) has maintained and shall maintain its financial statements,
accounting records and other entity documents separate from those of any other
Person; (ii) has shown and shall show, in its financial statements, its asset
and liabilities separate and apart from those of any other Person; and (iii) has
not permitted and shall not permit its assets to be listed as assets on the
financial statement of any of its Affiliates except as required by GAAP or, with
respect to the Viceroy Property, the Uniform System of Accounts; provided,
however, that any such consolidated financial statement contains a note
indicating that the Special Purpose Entity’s separate assets and credit are not
available to pay the debts of such Affiliate and that the Special Purpose
Entity’s liabilities do not constitute obligations of the consolidated entity;

 

(t)          has paid and shall pay its own liabilities and expenses, including
the salaries of its own employees (if any), out of its own funds and assets, and
has maintained and shall maintain a sufficient number of employees (if any) in
light of its contemplated business operations; provided, however, the foregoing
shall not require any direct or indirect member, partner or shareholder of
Borrower to make any additional capital contributions to Borrower;

 

(u)          has observed and shall do all things necessary to observe all
partnership, corporate or limited liability company formalities, as applicable;

 

(v)         has not incurred any Indebtedness other than (i) acquisition
financing with respect to the Property; construction financing with respect to
the Improvements and certain off-site improvements required by municipal and
other authorities as conditions to the construction of the Improvements; and
first mortgage financings secured by the Property (including the Loan) and
revolving and term credit facilities; and Indebtedness pursuant to letters of
credit, guaranties, interest rate protection agreements and other similar
instruments executed and delivered in connection with such financings, all of
which have been repaid in full, (ii) unsecured trade payables and operational
debt not evidenced by a note and not outstanding for more than sixty (60) days
incurred in the ordinary course of business in an amount not to exceed two
percent (2%) of the initial principal amount of the Loan and the Mezzanine Loan,
(iii) Indebtedness incurred in the financing of equipment and other personal
property used on the related Individual Property;

 

(w)          shall not incur any Indebtedness other than (i) the Loan,
(ii) liabilities incurred in the ordinary course of business relating to the
ownership and operation of the related Individual Property and the routine
administration of related Individual Borrower, in amounts not to exceed two
percent (2%) of the principal amount of the Loan and Mezzanine Loan which
liabilities are not more than sixty (60) days past the date incurred, are not
evidenced by a note and are paid when due, and which amounts are normal and
reasonable under the circumstances, and (iii) such other liabilities that are
expressly permitted pursuant to this Agreement;

 

 -40- 

 

 

(x)          except as required by this Agreement or the other Loan Documents,
has not assumed, guaranteed or become obligated and shall not assume or
guarantee or become obligated for the debts of any other Person, has not held
out and shall not hold out its credit as being available to satisfy the
obligations of any other Person or has not pledged and shall not pledge its
assets or any direct or indirect interest in or rights to distributions from
Borrower to secure the obligations of any other Person (other than the Pledge
Agreement by Operating Pledgor);

 

(y)          has not acquired and shall not acquire obligations or securities of
its partners, members or shareholders or any other owner or Affiliate (except,
in the case of Operating Pledgor, the Pledged Securities) ;

 

(z)          has allocated and shall allocate fairly and reasonably any overhead
expenses that are shared with any of its Affiliates, constituents, or owners, or
any guarantors of any of their respective obligations, or any Affiliate of any
of the foregoing, including, but not limited to, paying for shared office space
and for services performed by any employee of an Affiliate;

 

(aa)         has maintained and used and shall maintain and use, to the extent
reasonably necessary for the operation of its business, separate stationery,
invoices and checks bearing its name and not bearing the name of any other
entity unless such entity is clearly designated in writing as being the Special
Purpose Entity’s agent;

 

(bb)         has not pledged and shall not pledge its assets or any direct or
indirect interest in or rights to distributions from Borrower to secure the
obligations of any other Person other than with respect to loans secured by the
related Individual Property and the equity interests in Operating Lessee and no
such pledge remains outstanding except to Lender to secure the Loan;

 

(cc)         has held itself out and identified itself and shall hold itself out
and identify itself as a separate and distinct entity (recognizing that any
Borrower may be treated as a “disregarded entity” for tax purposes and is not
required to file tax returns for tax purposes under applicable law) under its
own name or in a name franchised or licensed to it by an entity other than an
Affiliate of Borrower or Operating Lessee (as applicable) and not as a division
or part of any other Person,

 

(dd)         has maintained and shall maintain its assets in such a manner that
it shall not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person;

 

(ee)         has not made and shall not make loans to any Person and has not
held and shall not hold evidence of indebtedness issued by any other Person or
entity (other than cash and investment-grade securities issued by an entity that
is not an Affiliate of or subject to common ownership with such entity);

 

 -41- 

 

 

(ff)         has not identified and shall not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a division of any
other Person;

 

(gg)         other than capital contributions and distributions permitted under
the terms of its organizational documents, has not entered into or been a party
to, and shall not enter into or be a party to, any transaction with any of its
partners, members, shareholders or Affiliates except for this Loan, the loan
being repaid as of the date hereof and in the ordinary course of its business
and on terms which are commercially reasonable terms comparable to those of an
arm’s-length transaction with an unrelated third party;

 

(hh)         except as expressly provided in this Agreement or in the other Loan
Documents, has not had and shall not have any obligation to, and has not
indemnified and shall not indemnify its partners, officers, directors or
members, as the case may be, in each case unless such an obligation or
indemnification is fully subordinated to the Debt and shall not constitute a
claim against it in the event that its cash flow is insufficient to pay the
Debt;

 

(ii)         has considered and shall consider the interests of its creditors in
connection with all corporate, limited liability company or limited partnership
actions;

 

(jj)         has not had and shall not have any of its obligations guaranteed by
any Affiliate except as provided by the Loan Documents;

 

(kk)         has not formed, acquired or held and shall not form, acquire or
hold any subsidiary, except that Operating Pledgor may acquire and hold its
interest in Operating Lessee;

 

(ll)         has complied and shall comply in all material respects with all of
the terms and provisions contained in its organizational documents.

 

(mm)         intentionally omitted;

 

(nn)         has not permitted and shall not permit any Affiliate or constituent
party independent access to its bank accounts;

 

(oo)         is, has always been and shall continue to be duly formed, validly
existing, and in good standing in the state of its incorporation or formation
and in all other jurisdictions where it is qualified to do business;

 

(pp)         has paid all taxes which it owes and is not currently involved in
any dispute with any taxing authority;

 

(qq)         is not now, nor has ever been, party to any lawsuit, arbitration,
summons, or legal proceeding that resulted in a judgment against it that has not
been paid in full;

 

 -42- 

 

 

(rr)         except as set forth in the Recycled Special Purpose Entity
Certificate delivered to Lender on the Closing Date, has no judgments or Liens
of any nature against it except for tax liens not yet due and the Permitted
Encumbrances;

 

(ss)         has provided Lender with complete financial statements that reflect
a fair and accurate view of the entity’s financial condition; and

 

(tt)         has no material contingent or actual obligations not related to the
Property.

 

“Spread” shall mean, with respect to each Note, the amounts set forth on
Schedule XV attached hereto, as the same may be increased pursuant to Section
2.8(g) hereof, or reallocated pursuant to Section 9.1.1(c) hereof.

 

“State” shall mean, with respect to an Individual Property, the State or
Commonwealth in which such Individual Property or any part thereof is located.

 

“Strike Price” shall mean (i) with respect to the initial term of the Loan,
three percent (3%) and (ii) with respect to the Extension Period, if any, such
strike price which will cause the Debt Service Coverage Ratio to be no less than
1.20:1.00 on the first day of the Extension Period (based upon the trailing
twelve (12) month period immediately preceding the first day of the Extension
Period).

 

“Survey” shall mean a survey of the Individual Property in question prepared by
a surveyor licensed in the State and reasonably satisfactory to Lender and the
company or companies issuing the related Title Insurance Policy, and containing
a certification of such surveyor reasonably satisfactory to Lender.

 

“Tax and Insurance Reserve Fund” shall have the meaning set forth in Section 7.2
hereof.

 

“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against any Individual Property or part thereof.

 

“Tenant” means the lessee of all or a portion of an Individual Property under a
Lease. For the avoidance of doubt, “Tenant” shall exclude the Operating Lessee
under the Operating Lease, the applicable Individual Borrower that is the tenant
under the Ground Lease and the applicable Individual Borrower that is the tenant
under the Master Lease.

 

“Tenant Direction Letter” shall mean a notice, substantially in the form of
Exhibit A attached hereto (or such other form as Borrower may proffer which is
reasonably acceptable to Lender), to all tenants now or hereafter occupying
space at each Individual Property directing them to pay all Rents and all other
sums due under the Lease to which they are a party directly into the applicable
Lockbox Account.

 

“Test Period” shall mean each twelve (12)-month period ending on the last day of
a Fiscal Quarter.

 

 -43- 

 

 

“Threshold Amount” shall have the meaning set forth in Section 5.1.22 hereof.

 

“Title Insurance Policy” shall mean, with respect to each Individual Property,
an ALTA mortgagee title insurance policy in a form reasonably acceptable to
Lender (or, if the Property is in a State which does not permit the issuance of
such ALTA policy, such form as shall be permitted in such State and reasonably
acceptable to Lender) issued with respect to such Individual Property and
insuring the lien of the Security Instruments encumbering such Individual
Property.

 

“Transfer” shall have the meaning set forth in Section 5.2.10(b) hereof.

 

“TRIPRA” shall have the meaning set forth in Section 6.1(a)(ix) hereof.

 

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State in which the Property is located.

 

“Uniform System of Accounts” shall mean the most recent edition of the Uniform
System of Accounts for Hotels, as adopted by the American Hotel and Motel
Association.

 

“Units” shall mean the “Units” as defined in the Condominium Documents.

 

“U.S. Obligations” shall mean non-redeemable securities evidencing an obligation
to timely pay principal and/or interest in a full and timely manner that are
(a) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged, or (b) to the extent acceptable to the
Approved Rating Agencies, other “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended.

 

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” shall have the meaning set forth in
Section 2.7(e) hereof.

 

“Viceroy Litigation Amount” shall have the meaning set forth in Section 5.1.3
hereof.

 

“Viceroy Manager” shall have the meaning set forth in Section 5.1.38(a) hereof.

 

“Viceroy Property” shall mean the Individual Property located at 120 W. 57th
Street, New York, New York.

 

“Viceroy Litigation Trigger” shall mean a breach of the covenants with respect
to the Viceroy Litigation Amount made by Borrower and Operating Lessee in
Section 5.1.3 hereof.

 

 -44- 

 

 

“World Wide Plaza Property” shall mean that certain real property and
improvements constructed thereon located at 350 West 50th Street, New York, New
York.

 

“Write-down and Conversion Powers” means in relation to any Bail-In Legislation
described in the EU Bail-In Legislation Schedule from time to time, the powers
described as such in relation to that Bail-In Legislation in the EU Bail-In
Legislation.

 

“WWP Account” shall have the meaning set forth in Section 7.9.1 hereof.

 

“WWP Fund” shall have the meaning set forth in Section 7.9.1 hereof.

 

“Zoning Reports” shall mean each zoning report for the Properties delivered by
Borrower to Lender in connection with the closing of the Loan, reasonably
satisfactory in form and substance to Lender.

 

Section 1.2           Principles of Construction. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. Unless otherwise
specified, the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.

 

ARTICLE II

 

GENERAL TERMS

 

Section 2.1           Loan Commitment; Disbursement to Borrower.

 

2.1.1           Agreement to Lend and Borrow. Subject to and upon the terms and
conditions set forth herein, Lender hereby agrees to make and Borrower hereby
agrees to accept the Loan on the Closing Date.

 

2.1.2           Single Disbursement to Borrower. Borrower may request and
receive only one borrowing hereunder in respect of the Loan and any amount
borrowed and repaid hereunder in respect of the Loan may not be reborrowed.
Borrower acknowledges and agrees that the Loan has been fully funded as of the
Closing Date.

 

2.1.3           The Notes, Security Instruments and Loan Documents. The Loan
shall be evidenced by the Notes and secured by the Security Instruments, the
Assignment of Lease and the other Loan Documents.

 

2.1.4           Use of Proceeds. Borrower shall use the proceeds of the Loan to
(a) repay and discharge any existing loans relating to the Properties, (b) pay
all past-due Basic Carrying Costs and other charges, if any, with respect to the
Properties, (c) make deposits into the Reserve Funds on the Closing Date in the
amounts provided herein, if any, (d) pay costs and expenses incurred in
connection with the closing of the Loan, as approved by Lender, (e) fund any
Capital Expenditures and working capital requirements of the Properties, (f) to
pay for the Equity Purchase, (g) to pay down the Loan in accordance with the
terms and conditions set forth herein and (h) distribute the balance, if any, to
Borrower to be used in Borrower’s sole discretion for any lawful purpose and in
accordance with the Loan Documents.

 

 -45- 

 

 

Section 2.2           Interest Rate.

 

2.2.1           Interest Rate. Subject to the provisions of this Section 2.2,
interest on the outstanding principal balance of the Loan shall accrue from (and
include) the Closing Date through the end of the last Interest Period at the
Floating Interest Rate. Borrower shall pay to Lender on each Payment Date the
interest accrued (or to be accrued) on the Loan for the related Interest Period.
Absent the existence of an Event of Default, payments pursuant to this Section
2.2.1 shall be applied to interest accrued, or to be accrued for the related
Interest Period in which the Payment Date occurs, to the payment of interest
then due and payable for each Note, pro rata. During the continuance of an Event
of Default, payments pursuant to this Section 2.2.1 shall be applied to interest
accrued, or to be accrued for the related Interest Period in which the Payment
Date occurs, as follows: (i) first, to the payment of interest then due and
payable under each Series A Note, pro rata; (ii) second, to the payment of
interest then due and payable under each Series B Note, pro rata; and (iii)
lastly, to any other amounts due and unpaid pursuant to the Loan Documents.

 

2.2.2           Intentionally Deleted.

 

2.2.3           Interest Calculation. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for which the calculation is being made by (b) a
daily rate based on the Interest Rate for each such Note and a three hundred
sixty (360) day year by (c) the outstanding principal balance of each such Note.

 

2.2.4           Determination of Interest Rate. (a) Subject to the terms and
conditions of this Section 2.2.4, the Loan shall bear interest at the Floating
Interest Rate. The Floating Interest Rate applicable to an Interest Period shall
be determined by Lender as set forth herein; provided, however, that LIBOR for
the Interest Period commencing on the Closing Date through and including January
19, 2017 shall be seven hundred thirty-seven thousandths percent (0.737%).

 

(b)          In the event that Lender shall have reasonably determined (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that by reason of circumstances affecting the interbank Eurodollar market
LIBOR cannot be determined as provided in the definition of LIBOR as set forth
herein, then Lender shall forthwith give notice thereof by telephone of such
fact, confirmed in writing, to Borrower at least one (1) Business Day prior to
the Determination Date. If such notice is given, the Loan shall be converted,
from and after the first day of the next succeeding Interest Period, to a Prime
Rate Loan bearing interest based on the Prime Rate in effect on the related
Determination Date.

 

 -46- 

 

 

(c)          If, pursuant to the terms of Section 2.2.4(b) above, the Loan has
been converted to a Prime Rate Loan but thereafter Lender shall reasonably
determine (which determination shall be conclusive and binding upon Borrower
absent manifest error) that LIBOR can again be determined as provided in the
definition of LIBOR as set forth herein, Lender may give notice thereof to
Borrower and convert the Prime Rate Loan back to a Floating Interest Rate Loan
by delivering to Borrower notice of such conversion no later than 11:00 a.m.
(New York City Time), one (1) Business Day prior to the next succeeding
Determination Date. If such notice is given, the Loan shall be automatically
converted, from and after the first day of the next succeeding Interest Period,
to a Floating Interest Rate Loan bearing interest based on LIBOR in effect on
the related Determination Date. Notwithstanding any provision of this Agreement
to the contrary, in no event shall Borrower have the right to elect to convert a
Floating Interest Rate Loan to a Prime Rate Loan.

 

(d)          Intentionally Omitted.

 

(e)          If any requirement of law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Lender to make or maintain a Floating Interest Rate Loan as contemplated
hereunder, (i) the obligation of Lender hereunder to make a Floating Interest
Rate Loan or to convert a Prime Rate Loan to a Floating Interest Rate Loan shall
be canceled forthwith and (ii) any outstanding Floating Interest Rate Loan shall
be converted automatically to a Prime Rate Loan on the first day of the next
succeeding Interest Period or within such earlier period as required by law.
Borrower hereby agrees promptly to pay Lender, upon demand, any additional
amounts necessary to compensate Lender for any costs incurred by Lender in
making any conversion in accordance with this Agreement, including, without
limitation, any interest or fees payable by Lender to lenders of funds obtained
by it in order to make or maintain the Floating Interest Rate Loan hereunder.
Lender’s notice of such costs, as certified to Borrower, shall be conclusive
absent manifest error.

 

(f)          In the event that any change in any requirement of law or in the
interpretation or application thereof, or compliance by Lender with any request
or directive (whether or not having the force of law) hereafter issued from any
central bank or other Governmental Authority:

 

(i)          shall hereafter impose, modify, increase or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other acquisition of funds by, any
office of Lender which is not otherwise included in the determination of LIBOR
hereunder;

 

(ii)         shall hereafter have the effect of reducing the rate of return on
Lender’s capital as a consequence of its obligations hereunder to a level below
that which Lender could have achieved but for such adoption, change or
compliance (taking into consideration Lender’s policies with respect to capital
adequacy) by any amount deemed by Lender to be material; or

 

(iii)        shall hereafter subject Lender to any Impositions (other than
(A) Indemnified Taxes, (B)  Impositions described in clauses (b) through (d) of
the definition of Excluded Taxes and (C) federal income taxes) on its loans,
loan principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto;

 

 -47- 

 

 

and the result of any of the foregoing is to materially increase the cost to
Lender of making, renewing or maintaining loans or extensions of credit or to
reduce any amount receivable hereunder, then, in any such case, Borrower shall
promptly pay Lender, upon demand, any additional amounts necessary to compensate
Lender for such additional cost or reduced amount receivable which Lender deems
to be material as determined by Lender in its reasonable discretion. If Lender
becomes entitled to claim any additional amounts pursuant to this
Section 2.2.4(f), Lender shall provide Borrower with not less than thirty (30)
days written notice specifying in reasonable detail the event by reason of which
it has become so entitled and the additional amount required to fully compensate
Lender for such additional cost or reduced amount. A certificate as to any
additional costs or amounts payable pursuant to the foregoing sentence submitted
by Lender to Borrower shall be conclusive in the absence of manifest error.
Subject to Section 2.7 hereof, this provision shall survive payment of the Notes
and the satisfaction of all other obligations of Borrower under this Agreement
and the Loan Documents. Notwithstanding the foregoing, Lender may not require
payment pursuant to this Section or otherwise unless Lender, at such time, has
the general policy and practice of requiring such payment from other borrowers
with loans similar to the Loan (not taking the amount or recourse nature of the
loan into account) with Lender.

 

(g)          If Lender shall have determined in good faith that any change in
any requirement of law with respect to any requirement of law regarding capital
adequacy or compliance by Lender or any Person controlling Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on Lender’s or such Person’s
capital as a consequence of its obligations hereunder to a level below that
which Lender or such Person could have achieved but for such change in any
requirement of law or compliance (taking into consideration Lender’s or such
Person’s policies with respect to capital adequacy) by an amount deemed by
Lender to be material, then from time to time, after submission by Lender to
Borrower of a written request therefor, Borrower shall pay to Lender such
additional amount or amounts as will compensate Lender or such Person for such
reduction. Notwithstanding the foregoing, Lender may not require payment
pursuant to this Section or otherwise unless Lender, at such time, has the
general policy and practice of requiring such payment from other borrowers with
loans similar to the Loan (not taking the amount or recourse nature of the loan
into account) with Lender.

 

(h)          Borrower agrees to indemnify Lender and to hold Lender harmless
from any loss or expense which Lender sustains or incurs as a consequence of
(i) any default by Borrower in payment of the principal of or interest on a
Floating Interest Rate Loan, including, without limitation, any such loss or
expense arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain a Floating Interest Rate Loan hereunder,
(ii) except in connection with a Casualty or Condemnation, any prepayment
(whether voluntary or mandatory) of the Floating Interest Rate Loan on a day
that (A) is not a Payment Date or (B) is a Payment Date if Borrower did not give
the prior written notice of such prepayment required pursuant to the terms of
this Agreement, including, without limitation, such loss or expense arising from
interest or fees payable by Lender to lenders of funds obtained by it in order
to maintain the Floating Interest Rate Loan hereunder and (iii) the conversion
pursuant to the terms hereof of the Floating Interest Rate Loan to the Prime
Rate Loan on a date other than the Payment Date, including, without limitation,
such loss or expenses arising from interest or fees payable by Lender to lenders
of funds obtained by it in order to maintain a Floating Interest Rate Loan
hereunder (the amounts referred to in clauses (i), (ii) and (iii) are herein
referred to collectively as the “Breakage Costs”); provided, however, Borrower
shall not indemnify Lender from any loss or expense arising from Lender’s
willful misconduct or gross negligence. The calculation of any sums which Lender
is entitled to receive pursuant to this Section 2.2.4(h) shall be binding and
conclusive on Borrower absent manifest error. This provision shall survive
payment of the Notes in full and the satisfaction of all other obligations of
Borrower under this Agreement and the other Loan Documents.

 

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2.2.5           Additional Costs. Lender will use commercially reasonable
efforts (consistent with legal and regulatory restrictions) to maintain the
availability of the Floating Interest Rate Loan and to avoid or reduce any
increased or additional costs payable by Borrower under Section 2.2.4,
including, if requested by Borrower, a transfer or assignment of the Loan to a
branch, office or Affiliate of Lender in another jurisdiction, or a
redesignation of its lending office with respect to the Loan, in order to
maintain the availability of the Floating Interest Rate Loan or to avoid or
reduce such increased or additional costs, provided that the transfer or
assignment or redesignation (a) would not result in any additional costs,
expenses or risk to Lender that are not reimbursed by Borrower and (b) would not
be materially disadvantageous in any other respect to Lender (including the
effect on any Securitization) as determined by Lender in its reasonable
discretion.

 

2.2.6           Default Rate. In the event that, and for so long as, any Event
of Default shall have occurred and be continuing, the outstanding principal
balance of the Loan and, to the extent permitted by law, all accrued and unpaid
interest in respect of the Loan and any other amounts due pursuant to the Loan
Documents, shall accrue interest at the Default Rate, calculated from the date
such payment was due after the expiration of any grace or cure periods contained
herein which elapsed prior to the occurrence of the Event of Default.

 

2.2.7           Usury Savings. This Agreement, the Notes and the other Loan
Documents are subject to the express condition that at no time shall Borrower be
obligated or required to pay interest on the principal balance of the Loan at a
rate which could subject Lender to either civil or criminal liability as a
result of being in excess of the Maximum Legal Rate. If, by the terms of this
Agreement or the other Loan Documents, Borrower is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate
and all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal on a pro rata basis among the
Notes, provided that no Event of Default has occurred and is continuing, and not
on account of the interest due hereunder. All sums paid or agreed to be paid to
Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.

 

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2.2.8           Interest Rate Cap Agreement. (a) Prior to or contemporaneously
with the Closing Date, Borrower shall enter into an Interest Rate Cap Agreement
with a LIBOR strike price equal to the Strike Price. The Interest Rate Cap
Agreement (i) shall at all times be in a form and substance reasonably
acceptable to Lender, (ii) shall at all times be with an Acceptable
Counterparty, (iii) shall direct such Acceptable Counterparty to deposit
directly into the Lockbox Account any amounts due Borrower under such Interest
Rate Cap Agreement so long as any portion of the Debt is outstanding, (iv) shall
be for a period equal to the term of the Loan and (v) shall at all times have a
notional amount equal to or greater than the principal balance of the Loan and
shall at all times provide for the applicable Strike Price. Borrower shall
collaterally assign to Lender, pursuant to the Collateral Assignment of Interest
Rate Cap Agreement and Security Agreement, dated as of the date hereof (the
“Assignment of Interest Rate Cap Agreement”), all of its right, title and
interest to receive any and all payments under the Interest Rate Cap Agreement,
and shall deliver to Lender an executed counterpart of such Interest Rate Cap
Agreement (which shall, by its terms, authorize the assignment to Lender and
require that payments be deposited directly into either (i) the Lockbox Account
if no Cash Sweep Period is then in effect, or (ii) to Lender for application to
any outstanding Monthly Debt Service Payment Amount if a Cash Sweep Period is
then continuing) and shall notify the Acceptable Counterparty thereunder of such
assignment and shall deliver an acknowledgement thereof executed by the
Acceptable Counterparty.

 

(b)          Borrower shall comply with all of its obligations under the terms
and provisions of the Interest Rate Cap Agreement. All amounts paid by the
Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or
Lender shall be deposited directly into either (i) the Lockbox Account if no
Cash Sweep Period is then in effect, or (ii) to Lender for application to any
outstanding Monthly Debt Service Payment Amount if a Cash Sweep Period is then
continuing. Borrower shall take all actions reasonably requested by Lender to
enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a
default by the Acceptable Counterparty and shall not waive, amend or otherwise
modify any of its rights thereunder.

 

(c)          In the event of any downgrade, withdrawal or qualification of the
rating of the Acceptable Counterparty by any Approved Rating Agency below the
minimum rating set forth in the definition of “Acceptable Counterparty,”
Borrower shall replace the Interest Rate Cap Agreement with a Replacement
Interest Rate Cap Agreement not later than ten (10) Business Days following
receipt of notice from Lender of such downgrade, withdrawal or qualification.
Borrower shall provide with respect to any Replacement Interest Rate Cap
Agreement an assignment of interest rate cap agreement with respect thereto in
the form of the Assignment of Interest Rate Cap Agreement, together with an
opinion of counsel meeting with requirements of Section 2.2.8(f) hereof.

 

 -50- 

 

 

(d)          Each Interest Rate Cap Agreement shall contain the following
language or its equivalent: “In the event of any downgrade, withdrawal or
qualification of the rating of the Counterparty below (i) a long-term unsecured
debt rating of not less than “A-” by S&P and a short-term senior unsecured debt
rating of at least “A-1” from S&P, and (ii)(x) a long-term unsecured debt rating
of not less than “A3” from Moody’s and a short-term senior unsecured debt rating
of at least “P1” from Moody’s or (y) if no short-term debt rating exists, a
long-term senior unsecured debt rating of at least “A1” from Moody’s, the
Counterparty must, within ten (10) Business Days, find a replacement
Counterparty, at the Counterparty’s sole cost and expense, acceptable to each
Rating Agency and Borrower; provided that, notwithstanding such a downgrade,
withdrawal or qualification, unless and until the Counterparty transfers the
Interest Rate Cap Agreement to a replacement Counterparty, the Counterparty will
continue to perform its obligations under the Interest Rate Cap Agreement.
Failure to satisfy the foregoing shall constitute an “Additional Termination
Event” as defined by Section 5(b)(vi) of the ISDA Master Agreement, with the
Counterparty as the “Affected Party.”” In the event that a counterparty is
required pursuant to the terms of an Interest Rate Cap Agreement to (i) deliver
collateral as specified in the applicable Interest Rate Cap Agreement, or (ii)
find a replacement counterparty, Borrower covenants and agrees that Borrower
shall seek Lender’s approval with respect thereto and shall not approve or
consent to the foregoing unless and until Borrower receives Lender’s prior
written approval not to be unreasonably withheld, conditioned or delayed and
shall approve or consent to the foregoing upon receipt of Lender’s prior written
approval.

 

(e)          In the event that Borrower fails to purchase and deliver to Lender
the Interest Rate Cap Agreement or fails to maintain the Interest Rate Cap
Agreement in accordance with the terms and provisions of this Agreement, Lender
may purchase the Interest Rate Cap Agreement and the cost incurred by Lender in
purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender
with interest thereon at the Default Rate from the date such cost was incurred
by Lender until such cost is reimbursed by Borrower to Lender.

 

(f)          In connection with the Interest Rate Cap Agreement, Borrower shall
obtain and deliver to Lender an opinion from counsel (which counsel may be
in-house counsel for the Acceptable Counterparty) for the Acceptable
Counterparty (upon which Lender and its successors and assigns may rely)
reasonably acceptable to Lender which shall provide, in relevant part, that:

 

(i)          the Acceptable Counterparty is duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation or
formation and has the organizational power and authority to execute and deliver,
and to perform its obligations under, the Interest Rate Cap Agreement;

 

(ii)         the execution and delivery of the Interest Rate Cap Agreement by
the Acceptable Counterparty, and any other agreement which the Acceptable
Counterparty has executed and delivered pursuant thereto, and the performance of
its obligations thereunder have been and remain duly authorized by all necessary
action and do not contravene any provision of its certificate of incorporation
or by-laws (or equivalent organizational documents) or any law, regulation or
contractual restriction binding on or affecting it or its property;

 

(iii)        all consents, authorizations and approvals required for the
execution and delivery by the Acceptable Counterparty of the Interest Rate Cap
Agreement, and any other agreement which the Acceptable Counterparty has
executed and delivered pursuant thereto, and the performance of its obligations
thereunder have been obtained and remain in full force and effect, all
conditions thereof have been duly complied with, and no other action by, and no
notice to or filing with any governmental authority or regulatory body is
required for such execution, delivery or performance; and

 

 -51- 

 

 

(iv)        the Interest Rate Cap Agreement, and any other agreement which the
Acceptable Counterparty has executed and delivered pursuant thereto, has been
duly executed and delivered by the Acceptable Counterparty and constitutes the
legal, valid and binding obligation of the Acceptable Counterparty, enforceable
against the Acceptable Counterparty in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

 

Section 2.3           Loan Payment.

 

2.3.1           Monthly Debt Service Payments. Borrower shall pay to Lender on
the Payment Date occurring on January 20, 2017 and on each Payment Date
thereafter up to and including the Maturity Date, Borrower shall make a payment
to Lender equal to the Monthly Debt Service Payment Amount, which payments shall
be applied first to interest due for each Note, pro rata, for the related
Interest Period, at the Floating Interest Rate or Prime Rate plus the Prime Rate
Spread, as applicable, for such related Interest Period, and then to the
principal amount of each Note due in accordance with this Agreement, pro rata,
and lastly, to any other amounts due and unpaid pursuant to the Loan Documents
hereto.

 

2.3.2           Intentionally Deleted.

 

2.3.3           Payments Generally. The first Interest Period hereunder shall
commence on and include the Closing Date and shall end on and include January
19, 2017. Thereafter during the term of the Loan, each Interest Period shall
commence on the twentieth (20th) day of the calendar month preceding the
calendar month in which the related Payment Date occurs and shall end on and
include the nineteenth (19th) day of the calendar month in which the related
Payment Date occurs. For purposes of making payments hereunder, but not for
purposes of calculating Interest Periods, if the day on which such payment is
due is not a Business Day, then amounts due on such date shall be due on the
immediately preceding Business Day and with respect to payments of principal due
on the Maturity Date, interest shall be payable at the Interest Rate or the
Default Rate, as the case may be, through and including the Maturity Date. All
amounts due pursuant to this Agreement and the other Loan Documents shall be
payable without setoff, counterclaim, defense or any other deduction whatsoever
unless otherwise expressly set forth herein.

 

2.3.4           Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Notes, the
Security Instruments and the other Loan Documents.

 

2.3.5           Late Payment Charge. If any principal, interest or any other
sums due under the Loan Documents (including the amounts due on the Maturity
Date) are not paid by Borrower on or prior to the date which is five (5) days
after such payment is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of such unpaid sum or the Maximum Legal
Rate in order to defray the expense incurred by Lender in handling and
processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Any such amount shall be secured by the Security
Instruments and the other Loan Documents to the extent permitted by Legal
Requirements.

 

 -52- 

 

 

2.3.6           Method and Place of Payment. Except as otherwise specifically
provided herein, all payments and prepayments under this Agreement and the Notes
shall be made to Lender not later than 1:00 P.M., New York City time, on the
date when due and shall be made in lawful money of the United States of America
in immediately available funds at Lender’s office or as otherwise directed by
Lender, and any funds received by Lender after such time shall, for all purposes
hereof, be deemed to have been paid on the next succeeding Business Day.

 

Section 2.4           Prepayments.

 

2.4.1           Voluntary Prepayments.

 

(a)          Except as otherwise provided in this Section 2.4.1, Section 2.4.2,
Section 2.5.2 and Section 7.9.3 hereof, Borrower shall not have the right to
prepay the Loan in whole or in part.

 

(b)          Borrower may prepay the Loan in whole or in part, without payment
of any prepayment premium or spread maintenance premium or any other fee or
penalty, provided that (a) no Event of Default exists; (b) Borrower gives Lender
not less than thirty (30) and not more than sixty (60) Business Days prior
written notice of the amount of the Loan that Borrower intends to prepay; and
(c) Borrower pays Lender, in addition to the outstanding principal amount of the
Loan to be prepaid, (i) all interest which would have accrued on the amount of
the Loan to be paid through and including the last day of the Interest Period in
which such prepayment occurs, or, if such prepayment occurs on a Payment Date,
through and including the last day of the Interest Period related to such
Payment Date; and (ii) all other sums due and payable under this Agreement, the
Notes, and the other Loan Documents, including, but not limited to the Breakage
Costs and all of Lender’s reasonable costs and expenses (including reasonable
attorney’s fees and disbursements) incurred by Lender in connection with such
prepayment. If a notice of prepayment is given by Borrower to Lender pursuant to
this Section 2.4.1(b), the amount designated for prepayment and all other sums
required under this Section 2.4.1(b) shall be due and payable on the proposed
prepayment date.

 

2.4.2           Mandatory Prepayments. On the next occurring Payment Date
following the date on which Lender actually receives any Net Proceeds with
respect to an Individual Property, if Lender is not obligated to make such Net
Proceeds available to Borrower for Restoration of any Individual Property or
otherwise deliver such Net Proceeds to Borrower, Borrower shall authorize Lender
to apply such Net Proceeds (in the absence of an Event of Default) pro rata
among the Loan and the Mezzanine Loan and pro rata among each Note and each note
evidencing the Mezzanine Loan as a prepayment to the reduction of the
outstanding principal balance of each such note until reduced to zero, in an
amount equal to one hundred percent (100%) of such Net Proceeds. No prepayment
premium or spread maintenance premium or any other fee or penalty shall be due
in connection with any prepayment made pursuant to this Section 2.4.2. Any Net
Proceeds remaining after the repayment of the Debt and the Mezzanine Loan in
full shall promptly be disbursed to Borrower. Subsequent to and during the
continuance of any Event of Default, prepayments made pursuant to this Section
2.4.2 shall be applied pro rata to the reduction of the outstanding principal
balance of each Note until reduced to zero, and any Net Proceeds remaining after
the repayment of the Debt in full shall promptly be disbursed (i) if the
Mezzanine Loan (or any portion thereof) remains outstanding, to the Mezzanine
Lender (pursuant to written instructions received by Lender from Mezzanine
Lender) to be disbursed in accordance with the Mezzanine Loan Documents, and
(ii) if the Mezzanine Loan has been paid in full, to Borrower.

 

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2.4.3           Prepayments After Event of Default. If following an Event of
Default payment of all or any part of the Debt is tendered by Borrower or
otherwise recovered by Lender (including through application of any Reserve
Funds), such tender or recovery shall (a) include interest at the Default Rate
on the outstanding principal amount of the Loan from the date the Event of
Default occurred through the last calendar day of the Interest Period within
which such tender or recovery occurs and (b) be deemed a voluntary prepayment by
Borrower, and shall in all instances include all interest which would have
accrued on the amount of the Loan to be paid through and including the Payment
Date next occurring following the date of such prepayment.

 

2.4.4           Application of Prepayments to Notes. Absent the existence of an
Event of Default, any voluntary prepayments of principal under the Loan (and if
the Mezzanine Loan remains outstanding, the Mezzanine Loan) (including, without
limitation, (x) in connection with a release pursuant to and in accordance with
Section 2.5.2 hereof and Section 2.5.2 of the Mezzanine Loan Agreement and (y)
pursuant to Section 2.4.2 hereof and Section 2.4.2 of the Mezzanine Loan
Agreement), in whole or in part, will be applied pro rata among the Loan and the
Mezzanine Loan and pro rata among each Note and each note evidencing the
Mezzanine Loan. Subsequent to and during the continuance of any Event of
Default, any payment of principal from whatever source may be applied by Lender
amongst the Loan (and if the Mezzanine Loan remains outstanding, the Mezzanine
Loan) in Lender’s sole discretion. Absent the existence of an Event of Default,
any prepayment of the principal of the Loan, in whole or in part, voluntary or
involuntary, shall be applied pro rata to each Note. Subsequent to and during
the continuance of any Event of Default, any prepayment of the principal of the
Loan, in whole or in part, voluntary or involuntary, shall be applied (a) first,
to the reduction of the outstanding principal balance of each Series A Note, pro
rata, until reduced to zero, and (b) second, to the reduction of the outstanding
principal balance of each Series B Note, pro rata, until reduced to zero.

 

Section 2.5           Release of Property. Except as set forth in this
Section 2.5, no repayment or prepayment of all or any portion of the Notes shall
cause, give rise to a right to require, or otherwise result in, the release of
any Lien of any Security Instrument on any Individual Property.

 

 -54- 

 

 

2.5.1           Release of all Properties Upon Payment in Full. (a) If Borrower
has elected to prepay the entire Loan and the requirements of Section 2.4 and
this Section 2.5.1 have been satisfied, all of the Properties shall be released
from the Liens of their respective Security Instruments. If Borrower advises
Lender that it desires to assign one or more Notes and the Security Instruments
to a new lender providing the funds for such prepayment, then Lender shall (i)
reasonably cooperate with Borrower to split and sever such Notes and Security
Instrument (if applicable) and/or assign the applicable Notes and Security
Instruments and all of the other Loan Documents to any Person designated by
Borrower, which assignment documents shall be in recordable form (but without
representation or warranty by, or recourse to, Lender, except as to the
outstanding principal balance of the Loan and that Lender owns the Notes and
Security Instruments free of any liens and encumbrances and has the authority to
effect the assignment) and otherwise in form and substance reasonably acceptable
to Lender, (ii) deliver to or as directed by Borrower the originally executed
applicable Note and all originally executed other notes which may have been
consolidated, amended and/or restated in connection with the execution of the
applicable Note and which originals were delivered to Lender or, with respect to
any such note where the original was delivered to Lender and has been lost,
cause the party who lost the note to deliver a lost note affidavit (without
indemnification with respect to any note other than such Note only) for the
benefit of the assignee lender and the title insurance company insuring the
Security Instruments, in form reasonably acceptable to Lender and sufficient to
permit such title insurance company to insure the lien of the Security
Instruments as assigned to and held by the assignee lender without exception for
any matter relating to the lost, destroyed or mutilated note, (iii) execute and
deliver an allonge with respect to the applicable Note and any other note(s) as
described in the preceding clause (ii) above without recourse, covenant or
warranty of any nature, express or implied (except as to the outstanding
principal balance of the Loan and that Lender owns the Notes and Security
Instruments free of any liens and encumbrances and has the authority to execute
and deliver the allonge) and otherwise in form and substance reasonably
acceptable to Lender, (iv) deliver the original executed Security Instruments or
a certified copy of record, and (v) execute and deliver such other instruments
of conveyance, assignment, termination, severance and release (including
appropriate UCC-3 termination statements and terminations of rent direction
notices to Tenants and other third parties) in recordable form as may reasonably
be requested by Borrower to evidence such assignment. All out-of-pocket costs
and expenses (including reasonable attorneys’ fees and disbursements) actually
incurred by Lender or Servicer in connection with the foregoing shall be paid by
Borrower.

 

(b)          In connection with the release or assignment of any Security
Instrument, Borrower shall submit to Lender, not less than ten (10) Business
Days prior to the Payment Date on which Borrower intends to prepay the Loan in
full, a release of Lien (and related Loan Documents) or assignment of such
Security Instrument (and related Loan Documents) for each Individual Property
for execution by Lender. Each such release (i) shall be in a form appropriate in
the jurisdiction in which the applicable Individual Property is located and (ii)
shall be reasonably satisfactory to Lender. In addition, Borrower shall provide
all other documentation Lender reasonably requires to be delivered by Borrower
in connection with such release, together with an Officer’s Certificate
certifying that such documentation (i) is in compliance with all Legal
Requirements, and (ii) will effect such releases in accordance with the terms of
this Agreement.

 

2.5.2           Release of Individual Property. At any time after the Closing
Date, provided that no Event of Default is then continuing, Borrower may obtain
the release of one or more Individual Properties (each Individual Property so
released, “Release Property”) from the Lien of the respective Security
Instruments to which such Borrower is a party (and related Loan Documents) and
the release of the Individual Borrower (which owns the applicable Release
Property) and Operating Lessee and Operating Pledgor (if applicable) from all
obligations under the Loan Documents (other than those expressly stated to
survive), upon the satisfaction of each of the following conditions precedent:

 

 -55- 

 

 

(a)          Borrower shall provide Lender with at least ten (10) Business Days’
but no more than ninety (90) days’ prior written notice of its request to obtain
a release of an Individual Property, which notice shall identify the Release
Property and the date upon which it desires to release such Release Property
(the “Release Date”);

 

(b)          Borrower shall prepay the Loan in an amount equal to the Release
Amount for such Release Property (together with all accrued and unpaid interest
on the principal amount being prepaid, if any, and interest that would have
accrued on such prepaid amount through and including the last day of the
Interest Period related to the Payment Date next occurring following the date of
prepayment);

 

(c)          Concurrently with the payment by Borrower of the Release Amount,
provided the Mezzanine Loan is outstanding, Mezzanine Borrower shall prepay the
Mezzanine Loan in an amount equal to the Mezzanine Release Amount for the
associated Mezzanine Release Collateral (together with any related interest,
fees, or other amounts payable under the Mezzanine Loan Documents in connection
with such prepayment, including, to the extent such prepayment is made on a date
other than a Payment Date, interest which would have accrued on the outstanding
principal balance of the applicable Mezzanine Loan through the end of the
related interest period pursuant to the applicable Mezzanine Loan Documents);

 

(d)          Subsequent to such release, each Individual Borrower (other than
the Individual Borrower that owns the Release Property) shall continue to be a
Special Purpose Entity pursuant to, and in accordance with, Section 4.1.30
hereof;

 

(e)          Intentionally omitted;

 

(f)          Borrower shall submit to Lender, not less than ten (10) Business
Days prior to the Release Date, a release of Lien (and related Loan Documents)
or, if elected by Borrower, assignment of the applicable Loan Documents as
provided below (and release of all other related Loan Documents) for each
Individual Property for execution by Lender. If Borrower elects to have Lender
assign any Security Instrument, Lender shall reasonably cooperate with Borrower
to split and sever the applicable Loan Documents (if required) and take other
reasonable steps and enter into documents reasonably requested by Borrower to
assign the applicable Loan Documents as set forth in Section 2.5.1(a)(i)-(v)
hereof, each in form and substance reasonably acceptable to Lender, such that
separate notes and mortgages with respect to only the Individual Borrower and
the Release Property in the amount of the applicable Allocated Loan Amount (or
then outstanding principal amount secured by such Security Instrument if less
than the Allocated Loan Amount) for such Release Property is assigned to the new
lender, with the remaining Borrowers and Properties released from the assigned
portion of the Loan. Each such release or assignment (as applicable) (i) shall
be in a form appropriate in the jurisdiction in which the Release Property is
located and (ii) shall be reasonably satisfactory to Lender. In addition,
Borrower shall provide all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such release, together with an
Officer’s Certificate certifying that such documentation (i) is in compliance
with all Legal Requirements, (ii) will not impair or otherwise adversely affect
the Liens and other rights of Lender under the Loan Documents not being released
(or as to the parties to the Loan Documents and Properties subject to the Loan
Documents not being released) and (iii) that the terms and conditions of this
Section 2.5.2 have been satisfied with respect to such release;

 

 -56- 

 

 

(g)          After giving effect to such release or assignment (as applicable)
(including the amount prepaid in clause (b) above), the Debt Yield for the
Properties then remaining subject to the Liens of the Security Instruments for
the twelve (12) full calendar months immediately preceding the month in which
the Release Date occurs shall be equal to or greater than 6.75%; provided that,
subject to the terms and conditions of Section 2.4 of this Agreement, Borrower
shall be permitted to partially prepay the Loan pro rata (and, with respect to
the Mezzanine Loan, Mezzanine Borrower shall concurrently partially prepay the
Mezzanine Loan pro rata) in an amount sufficient to cause the Loan and the
Mezzanine Loan to satisfy the Debt Yield requirements set forth herein;

 

(h)          Lender shall have received evidence that the Release Property shall
be conveyed in an arm’s length transfer to a Person other than an Individual
Borrower, Operating Lessee, Operating Pledgor, Guarantor or any of their
respective Affiliates, provided that, if Borrower shall have provided to Lender
evidence that (i) the board of directors of Guarantor approved the transfer of
the Release Property to an Affiliate of Individual Borrower, Operating Lessee,
Operating Pledgor or Guarantor and (ii) the applicable Individual Borrower or
Guarantor engaged a third-party reputable and experienced commercial real estate
broker to market and list the Release Property for sale in connection with a
release pursuant to this Section 2.5.2, the Release Property may be conveyed to
an Affiliate of Individual Borrower, Operating Lessee, Operating Pledgor or
Guarantor in connection with such release;

 

(i)          Borrower shall reimburse Lender and Servicer for any out-of-pocket
costs and expenses of Lender and Servicer arising from such release or
assignment (as applicable) (including reasonable attorneys’ fees and expenses
and disbursements incurred in connection with the release or assignment (as
applicable) of the Release Property from the Lien of the related Security
Instruments (including, without limitation, any splitting and severance of the
Notes and/or Security Instruments) and the review and approval of the documents
and information required to be delivered in connection therewith (if
applicable)) and Borrower shall have paid, in connection with such release or
assignment (as applicable), (i) all recording charges, filing fees, taxes or
other expenses payable in connection therewith, (ii) all out-of-pocket costs and
expenses of the Rating Agencies incurred with respect to such release or
assignment (as applicable), and (iii) to any Servicer, the current fee being
assessed by such Servicer to effect such release or assignment (as applicable)
(not to exceed $5,000 per Release Property), it being agreed that Borrower shall
be responsible for the payment of all such costs and expenses whether or not the
proposed release or assignment (as applicable) of such Release Property actually
occurs;

 

(j)          If Lender reasonably determines that such applicable release or
assignment (as applicable) pursuant to this Section 2.5.2 would be reasonably
likely to adversely affect Lender’s rights, benefits or protections under the
Title Insurance Policy with respect to the Properties not subject to such
release or assignment (as applicable), including, without limitation, the
priority of the Security Instruments and/or the incurrence of any Liens at the
Properties not subject to such release or assignment (as applicable), and
therefore if reasonably requested by Lender, Borrower shall deliver to Lender an
endorsement to the applicable Title Insurance Policy (to the extent available in
the State of New York at no material additional cost) (i) extending the
effective date of such policy to the Release Date; (ii) confirming no change in
the priority of the Security Instruments on the balance of the Properties
(exclusive of the Release Property) or in the amount of the insurance or the
coverage of the Properties (exclusive of the Release Property) under the policy;
(iii) showing no Liens or survey exceptions not previously approved by Lender
other than the Permitted Encumbrances or such other exceptions as may be entered
into in accordance with the terms hereof; and (iv) otherwise in form and
substance reasonably acceptable to Lender;

 

 -57- 

 

 

(k)          Not less than five (5) Business Days prior to the Release Date,
Borrower delivers to Lender copies of approvals to the release or assignment (as
applicable) executed by any Persons other than Lender holding Liens encumbering
the Release Property or holding any other interest in the Release Property that
would be affected by the release or assignment (as applicable), if any, if and
to the extent such approval is required pursuant to the terms of any loan
agreement, security instrument or other documents evidencing or securing such
Lien;

 

(l)          To the extent an Individual Borrower seeks to release its
applicable Individual Property pursuant to this Section 2.5.2 and is the
counterparty to the Interest Rate Cap Agreement, such Individual Borrower shall
assign the Interest Rate Cap Agreement to any remaining Individual Borrower
which has not released its applicable Individual Property pursuant to this
Section 2.5.2 in accordance with the terms and conditions of the Interest Rate
Cap Agreement; and

 

(m)          All conditions to the release of an Individual Property set forth
in the Mezzanine Loan Documents shall have been satisfied or waived in
accordance therewith.

 

Section 2.6           Cash Management.

 

2.6.1           Lockbox Account. (a) Borrower and Operating Lessee shall
establish and maintain a segregated Eligible Account (the “Lockbox Account”)
with Lockbox Bank in trust for the benefit of Agent, which Lockbox Account shall
be under the sole dominion and control of Agent. The Lockbox Account shall be
entitled “ARC NY21618001 LLC et al LB FBO Column Financial, Inc. its successors
and assigns as Lender”. Each of Borrower and Operating Lessee hereby grants to
Agent a first priority security interest in the Lockbox Account and all deposits
at any time contained therein and the proceeds thereof and will take all actions
necessary to maintain in favor of Agent a perfected first priority security
interest in the Lockbox Account, including, without limitation, executing and
filing UCC-1 Financing Statements and continuations thereof. Agent and Servicer
shall have the sole right to make withdrawals from the Lockbox Account and all
costs and expenses for establishing and maintaining the Lockbox Account shall be
paid by Borrower. All monies now or hereafter deposited into the Lockbox Account
shall be deemed additional security for the Debt. The Lockbox Agreement and
Lockbox Account shall remain in effect until the Loan has been repaid. The
Lockbox Account shall at all times be an Eligible Account. The Lockbox Account
when established shall be treated as a “deposit account” as such term is defined
in Section 9-102(a) of the Uniform Commercial Code, as amended from time to
time.

 

 -58- 

 

 

(b)          Borrower or Operating Lessee (as applicable) shall, or shall cause
Manager to, on or prior to the Closing Date, deliver Tenant Direction Letters to
all Tenants under Leases to deliver all Rents payable thereunder directly to the
Lockbox Account. Borrower or Operating Lessee (as applicable) shall, and shall
cause Manager to, deposit all amounts received by Borrower, Operating Lessee or
Manager constituting Rents into the Lockbox Account within two (2) Business Days
after receipt and deliver irrevocable written instructions, substantially in the
form of Exhibit B attached hereto (or such other form as Borrower or Operating
Lessee may proffer which is reasonably acceptable to Lender) (each, a “Credit
Card Direction Letter”), to each of the credit card companies or credit card
clearing banks with which Borrower, Operating Lessee or Manager has entered into
merchant’s agreements to deliver all receipts payable with respect to the
Viceroy Property directly to the Lockbox Account. Each Individual Borrower and
Operating Lessee warrants and covenants that it shall not, and shall not permit
Manager to, rescind, withdraw or change any notices or instructions required to
be sent by it pursuant to this Section 2.6.1(b) without Lender’s prior written
consent.

 

(c)          So long as no Cash Sweep Period has occurred and is then
continuing, on each Business Day, all funds on deposit in the Lockbox Account
shall be remitted to Borrower.

 

(d)          Upon the occurrence and during the continuance of any Cash Sweep
Period, on each Business Day, all funds on deposit in the Lockbox Account shall
be transferred to the Cash Management Account pursuant to the Cash Management
Agreement. Pursuant to the Lockbox Agreement, Lockbox Bank shall transfer to the
Cash Management Account in immediately available funds by federal wire transfer
all amounts on deposit in the Lockbox Account once every Business Day during the
continuance of any Cash Sweep Period.

 

(e)          Upon the occurrence and during the continuance of an Event of
Default, Agent may, in addition to any and all other rights and remedies
available to Agent, apply any sums then on deposit in the Lockbox Account to the
payment of the Debt in any order in its sole discretion.

 

(f)          Neither Borrower nor Operating Lessee shall commingle the monies in
the Lockbox Account with other monies held by Borrower, Operating Lessee or
Manager.

 

(g)          Neither Borrower nor Operating Lessee shall further pledge, assign
or grant any security interest in the Lockbox Account or the monies deposited
therein or permit any lien or encumbrance to attach thereto, or any levy to be
made thereon, or any UCC-1 Financing Statements, except those naming Agent as
the secured party, to be filed with respect thereto.

 

(h)          Borrower shall indemnify Agent and each Lender and hold Agent and
each Lender harmless from and against any and all actions, suits, claims,
demands, liabilities, losses, damages, obligations and costs and expenses
(including litigation costs and reasonable attorneys’ fees and expenses) arising
from or in any way connected with the Lockbox Account and/or the Lockbox
Agreement (unless arising from the gross negligence or willful misconduct of
Agent or any Lender) or the performance of the obligations for which the Lockbox
Account was established.

 

 -59- 

 

 

2.6.2           Cash Management Account. (a) Simultaneously herewith, Borrower
and Operating Lessee shall establish and maintain a segregated Eligible Account
(the “Cash Management Account”) to be held by Cash Management Bank in trust and
for the benefit of Agent, which Cash Management Account shall be under the sole
dominion and control of Agent. The Cash Management Account shall be entitled
“ARC NY21618001 LLC et al CMA FBO Column Financial, Inc. its successors and
assigns as Lender”. Each of Borrower and Operating Lessee hereby grants to Agent
a first priority security interest in the Cash Management Account and all
deposits at any time contained therein and the proceeds thereof and will take
all actions necessary to maintain in favor of Agent a perfected first priority
security interest in the Cash Management Account, including, without limitation,
filing UCC-1 Financing Statements and continuations thereof. Neither Borrower
nor Operating Lessee will in any way alter or modify the Cash Management Account
and will notify Agent of the account number thereof. Agent and Servicer shall
have the sole right to make withdrawals from the Cash Management Account.
Borrower acknowledges and agrees that it solely shall be, and shall at all times
remain, liable to Agent, Cash Management Bank or Servicer (in its capacity as
administrator of the Cash Management Account) for all fees, charges, costs and
expenses in connection with the Cash Management Account, including, without
limitation, any monthly or annual fees or charges as may be assessed by Agent,
Cash Management Bank or Servicer in connection with the administration of the
Cash Management Account and the actual out-of-pocket fees and expenses of legal
counsel to Agent, Cash Management Bank and Servicer as needed to enforce,
protect or preserve the rights and remedies of Agent or Servicer under this
Agreement with respect to the Cash Management Account.

 

(b)          Upon the occurrence and during the continuance of any Cash Sweep
Period, provided no Event of Default shall have occurred and be continuing, on
each Payment Date (or, if such Payment Date is not a Business Day, on the
immediately preceding Business Day) all funds on deposit in the Cash Management
Account shall be applied by Agent or Servicer (in its capacity as administrator
of the Cash Management Account) to the payment of the following items in the
order indicated:

 

(i)          First, payment to the Ground Lease Reserve Fund in accordance with
the terms and conditions of Section 7.5 hereof;

 

(ii)         Second, payments to the Tax and Insurance Reserve Fund in
accordance with the terms and conditions of Section 7.2 hereof;

 

(iii)        Third, payment to the Common Charge Reserve Fund in accordance with
the terms and conditions of Section 7.11 hereof;

 

(iv)        Fourth, payment of the Monthly Debt Service Payment Amount;

 

(v)         Fifth, payment to Borrower or Operating Lessee (as applicable) for
payments for the succeeding monthly Cash Expenses incurred or to be incurred in
accordance with the related Approved Annual Budget;

 

(vi)        Sixth, payment to Borrower or Operating Lessee (as applicable) for
payments for Extraordinary Expenses reasonably approved by Agent, if any;

 

 -60- 

 

 

(vii)       Seventh, payment to the Replacement Reserve of the Replacement
Reserve Monthly Deposit as required by and in accordance with the terms and
conditions of Section 7.3 hereof;

 

(viii)      Eighth, payment to the FF&E Reserve Fund in accordance with the
terms and conditions of Section 7.10 hereof;

 

(ix)         Ninth, payment to the Rollover Reserve of the Rollover Reserve
Monthly Deposit as required by and in accordance with the terms and conditions
of Section 7.4 hereof;

 

(x)          Tenth, payment to Agent or any Lender of any other amounts then due
and payable under the Loan Documents;

 

(xi)         Eleventh, until the Mezzanine Loan has been paid in full, payment
to the Mezzanine Deposit Account of funds sufficient to pay the Mezzanine
Monthly Debt Service Payment Amount, together with any interest accruing at the
Default Rate as applicable (as defined in the Mezzanine Loan Agreement); and

 

(xii)        Lastly, payment to the Excess Cash Flow Reserve of any excess
amounts after the payment of items (i) through (xi) above (“Excess Cash Flow”)
to be held in accordance with the terms and conditions hereof; provided,
however, if the Cash Sweep Event is caused solely by the occurrence of Viceroy
Litigation Trigger and no other Cash Sweep Event has occurred and is continuing,
Excess Cash Flow shall be held pursuant to this clause (xii) up to (but not
exceeding) the Viceroy Litigation Amount.

 

(c)          The insufficiency of funds on deposit in the Cash Management
Account shall not relieve Borrower from the obligation to make any payments
(unless due to Lender’s or Servicer’s gross negligence or willful misconduct),
as and when due pursuant to this Agreement and the other Loan Documents, and
such obligations shall be separate and independent, and not conditioned on any
event or circumstance whatsoever.

 

(d)          All funds on deposit in the Cash Management Account following the
occurrence and during the continuance of an Event of Default may be applied by
Agent or Cash Management Bank in such order and priority as Agent shall
determine.

 

(e)          Borrower hereby agrees that Lender or Cash Management Bank may
establish additional sub-accounts in connection with any payments otherwise
required under this Agreement and the other Loan Documents.

 

2.6.3           Payments Received Under the Cash Management Agreement.
Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, and provided no Event of Default has occurred and is
continuing, Borrower’s obligations with respect to the payment of the Monthly
Debt Service Payment Amount and amounts required to be deposited in or paid from
such Reserve Funds, if any, shall be deemed satisfied to the extent sufficient
amounts are deposited in the Cash Management Account to satisfy such obligations
pursuant to this Agreement on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Agent or Cash
Management Bank.

 

 -61- 

 

 

2.6.4           Distributions to Mezzanine Borrowers. All transfers of funds on
deposit in the Cash Management Account to the Mezzanine Deposit Account or
otherwise to or for the benefit of Mezzanine Lender, pursuant to the Loan
Agreement or any of the other Loan Documents or Mezzanine Loan Documents are
intended by Borrower, Mezzanine Borrower, and Mezzanine Lender to constitute,
and shall constitute, distributions from Borrower to Mezzanine Borrower. No
provision of the Loan Documents or the Mezzanine Loan Documents shall create a
debtor-creditor relationship between Borrower or Operating Lessee and Mezzanine
Lender.

 

Section 2.7           Withholding Taxes.

 

(a)          Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower under any Loan Document shall be made without
deduction or withholding for any present or future taxes, levies, imposts,
duties, charges, fees, deductions, reserves or withholdings imposed, levied,
collected, withheld or assessed by any Governmental Authority (“Impositions”),
except as required by applicable law. If any applicable law (as determined in
the good faith discretion of the Borrower) requires the deduction or withholding
of any Imposition from any such payment by the Borrower, then the Borrower shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Imposition is an Indemnified Tax, then the sum
payable by the Borrower shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 2.7)
Lender receives an amount equal to the sum it would have received had no such
deduction or withholding been made.

 

(b)          Payment of Other Taxes by the Borrower. The Borrower shall timely
pay to the relevant Governmental Authority in accordance with applicable law any
Other Taxes.

 

(c)          Indemnification by the Borrower. The Borrower shall indemnify
Lender, within ten (10) days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Lender or required to be withheld or deducted from a payment to such Lender
pursuant to applicable Legal Requirements and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender shall be conclusive absent manifest error.

 

(d)          Evidence of Payments. As soon as practicable after any payment of
Impositions by the Borrower to a Governmental Authority pursuant to this
Section 2.7, the Borrower shall deliver to Lender the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Lender.

 

 -62- 

 

 

(e)          Status of Lenders. (i) Any Lender that is entitled to an exemption
from or reduction of withholding Imposition with respect to payments made under
any Loan Document shall deliver to the Borrower, at the time or times reasonably
requested by the Borrower, such properly completed and executed documentation
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrower, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower as will enable the Borrower to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.7(e)(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

 

(ii)         Without limiting the generality of the foregoing, in the event that
the Borrower is a U.S. Borrower,

 

(A)         any Lender that is a U.S. Person shall deliver to the Borrower on or
prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower),
executed originals of IRS Form W-9 certifying that such Lender is exempt from
U.S. federal backup withholding tax;

 

(B)         any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower), whichever of the following is applicable:

 

(1)         in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or Form
W8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Imposition pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN or Form W8BEN-E establishing an exemption from, or reduction of,
U.S. federal withholding Imposition pursuant to the “business profits” or “other
income” article of such tax treaty;

 

(2)         executed originals of IRS Form W-8ECI;

 

(3)         in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
(a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form
W-8BEN or Form W8BEN-E; or

 

 -63- 

 

 

(4)         to the extent a Foreign Lender is a partnership or is not the
beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form
W-8ECI, IRS Form W-8BEN or Form W8BEN-E, a U.S. Tax Compliance Certificate, IRS
Form W-9, and/or other certification documents from each beneficial owner, as
applicable; provided that if the Foreign Lender is a partnership and one or more
direct or indirect partners of such Foreign Lender are claiming the portfolio
interest exemption, such Foreign Lender may provide a U.S. Tax Compliance
Certificate on behalf of each such direct and indirect partner;

 

(C)         any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower), executed originals of any other form
prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. federal withholding tax, duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the
Borrower to determine the withholding or deduction required to be made; and

 

(D)         if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower at the time or times prescribed by law and
at such time or times reasonably requested by the Borrower such documentation
prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower as may be necessary for the Borrower to
comply with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(D), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower in writing of its legal
inability to do so.

 

 -64- 

 

 

(f)          Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any
Impositions as to which it has been indemnified pursuant to this Section 2.7
(including by the payment of additional amounts pursuant to this Section 2.7),
it shall pay to the indemnifying party an amount equal to such refund (but only
to the extent of indemnity payments made under this Section with respect to the
Impositions giving rise to such refund), net of all out-of-pocket expenses
(including Impositions) of such indemnified party and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to
this paragraph (f) (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this paragraph (f), in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
paragraph (f) the payment of which would place the indemnified party in a less
favorable net after-tax position than the indemnified party would have been in
if the Imposition subject to indemnification and giving rise to such refund had
not been deducted, withheld or otherwise imposed and the indemnification
payments or additional amounts with respect to such Imposition had never been
paid. This paragraph shall not be construed to require any indemnified party to
make available its tax returns (or any other information relating to its
Impositions that it deems confidential) to the indemnifying party or any other
Person.

 

(g)          Survival. Each party’s obligations under this Section 2.7 shall
survive any assignment of rights by, or the replacement of, a Lender and the
repayment, satisfaction or discharge of all obligations under any Loan Document.

 

Section 2.8           Extension of the Initial Maturity Date. Borrower shall
have the option to extend the Initial Maturity Date of the Loan for one term
(the “Extension Option” and such term, the “Extension Term”) of one (1) year to
the Extended Maturity Date, upon satisfaction of the following terms and
conditions:

 

(a)          no Event of Default shall have occurred and be continuing at the
time the Extension Option is exercised and at the time that the applicable
extension occurs;

 

(b)          Borrower shall provide Lender with written revocable notice of its
election to extend the Maturity Date as aforesaid not later than thirty (30)
days and not earlier than ninety (90) days prior to the date the Loan is then
scheduled to mature, provided that if Borrower shall subsequently revoke such
notice, Borrower shall be responsible for Lender’s reasonable out-of-pocket
costs and expenses incurred in connection with same;

 

(c)          if the Interest Rate Cap Agreement is scheduled to mature prior to
the Extended Maturity Date, Borrower shall (i) modify the existing Interest Rate
Cap Agreement or obtain and deliver to Lender on or prior to the first day of
the Extension Term, one or more Replacement Interest Rate Cap Agreements from an
Acceptable Counterparty which modified Interest Rate Cap Agreement or
Replacement Interest Rate Cap Agreement (as applicable) shall have a LIBOR
strike price equal to the Strike Price, be effective commencing on the first
date of the Extension Option and shall have a maturity date not earlier than the
Extended Maturity Date after giving effect to the option then being exercised
and (ii) deliver an assignment of interest rate cap agreement with respect to
any Replacement Interest Rate Cap Agreement in form and substance substantially
similar to the Assignment of Interest Rate Cap Agreement delivered on the
Closing Date, together with legal opinions of counsel to the counterparty and
Borrower as reasonably required by Lender;

 

 -65- 

 

 

(d)          Borrower shall have delivered to Lender together with its notice
pursuant to subsection (b) of this Section 2.8 and at Lender’s reasonable
request, on the commencement date of the Extension Option, an Officer’s
Certificate in form acceptable to the Lender certifying that each of the
representations and warranties of Borrower contained in the Loan Documents is
true, complete and correct in all material respects as of the giving of the
notice to the extent such representations and warranties are not matters which
by their nature can no longer be true and correct as a result of the passage of
time or identify exceptions thereto as appropriate which are reasonably
acceptable to Lender;

 

(e)          the Debt Yield shall equal or exceed 7.25%;

 

(f)          prior to or simultaneously with the consummation of the Extension
Option, Borrower shall pay to Lender an extension fee equal to 0.25% of the then
outstanding principal balance of the Loan, which extension fee shall be deemed
earned by Lender and non-refundable upon receipt;

 

(g)          the Spread shall be increased by 0.25% for the Extension Term;

 

(h)          if Borrower has neither withdrawn the WWP Fund and consummated the
Equity Purchase, nor paid to Lender the WWP Fund to be applied to pay down the
Loan and the Mezzanine Loan (on a pro rata basis provided that no Event of
Default has occurred and is continuing), in either case, in accordance with
Section 7.9.2 hereof, then Borrower shall deliver to Lender the WWP Fund for
application to prepayment of the Loan and the Mezzanine Loan (on a pro rata
basis provided that no Event of Default has occurred and is continuing), without
payment of any prepayment premium or spread maintenance premium or any other fee
or penalty, in accordance with the terms and conditions set forth in Section 2.4
hereof and Section 2.4 of the Mezzanine Loan Agreement;

 

(i)          Borrower shall pay all of Lender’s reasonable out-of-pocket costs
and expenses actually incurred in connection with processing and documenting the
Extension Option (including, without limitation, Lender’s reasonable legal
fees), regardless of whether the Extension Option is successfully exercised or
not; and

 

(j)          provided the Mezzanine Loan is outstanding, the Mezzanine Extension
Option shall have been exercised in accordance with the terms of the Mezzanine
Loan Agreement, and Borrower shall have provided to Lender evidence of such
exercise of the Mezzanine Extension Option.

 

Section 2.9           Notes. For the purposes of computing interest payable from
time to time on the principal amount of the Loan and certain other computations
set forth herein, the principal balance of the Loan shall be divided into
seventy-two (72) Notes. The principal amount of the Notes on the Closing Date is
set forth on Schedule XV attached hereto.

 

 -66- 

 

 

ARTICLE III

 

INTENTIONALLY OMITTED

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.1           Borrower and Operating Lessee Representations. Each
Individual Borrower and, solely with respect to the Viceroy Property, Operating
Lessee represents and warrants as of the date hereof as to itself and the
applicable Individual Property (and each reference to Borrower below in this
Section 4.1 shall be to each Individual Borrower) that:

 

4.1.1           Organization. Each Borrower and Operating Lessee has been duly
organized and is validly existing and in good standing with requisite power and
authority to own its interest in and/or operate the related Individual Property
and to transact the businesses in which it is now engaged. Each Individual
Borrower and Operating Lessee is duly qualified to do business and is in good
standing in each jurisdiction where it is required to be so qualified in
connection with its properties, businesses and operations. Each Individual
Borrower and Operating Lessee possesses all rights, licenses, permits and
authorizations, governmental or otherwise, necessary to entitle it to own its
interest in the applicable Individual Property and to transact the businesses in
which it is now engaged, and the sole business of such Individual Borrower and
Operating Lessee is the ownership of its interest in, management and operation
of the related Individual Property. The direct and indirect ownership interests
in each Individual Borrower and Operating Lessee are as set forth on the
organizational chart attached hereto as Schedule V. Each Individual Borrower and
Operating Lessee (a) has complied in all respects with its certificate of
incorporation, bylaws, limited partnership agreement, articles of organization
and limited liability company operating agreement, as applicable; (b) has
maintained complete books and records and bank accounts separate from those of
its Affiliates; (c) has obeyed all formalities required to maintain its status
as, and at all times has held itself out to the public as, a legal entity
separate and distinct from any other entity (including, but not limited to, any
Affiliate thereof); and (d) has all requisite power and authority to conduct its
business and to own its interest in the applicable property, as now conducted or
owned, and as contemplated by this Agreement, including, without limitation, the
power and authority to do business in the State. Its signatory hereto has all
necessary power, authority and legal right to execute this Agreement, the Notes
and the other Loan Documents on behalf of such Individual Borrower or Operating
Lessee.

 

4.1.2           Proceedings. Each of Borrower and Operating Lessee has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party. This Agreement
and such other Loan Documents have been duly executed and delivered by or on
behalf of Borrower and Operating Lessee (as applicable) and constitute legal,
valid and binding obligations of Borrower and Operating Lessee (as applicable),
enforceable against Borrower and Operating Lessee (as applicable) in accordance
with their respective terms, subject only to applicable bankruptcy, insolvency
and similar laws affecting rights of creditors generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

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4.1.3           No Conflicts. The execution, delivery and performance by each
Borrower and Operating Lessee (as applicable) of this Agreement and the other
Loan Documents to which it is a party will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance (other
than pursuant to the Loan Documents) upon any of the property or assets of
Borrower or Operating Lessee, nor will such action result in any violation of
the provisions of any statute or any order, rule or regulation of any
Governmental Authority having jurisdiction over Borrower or Operating Lessee (as
applicable) or any of Borrower’s or Operating Lessee’s properties or assets (as
applicable), and any consent, approval, authorization, order, registration or
qualification of or with any court or any such Governmental Authority required
for the execution, delivery and performance by Borrower and Operating Lessee (as
applicable) of this Agreement or any other Loan Documents to which it is a party
has been obtained and is in full force and effect.

 

4.1.4           Litigation. Except as identified on Schedule VI attached hereto
(and with respect to item number 1 on Schedule VI attached hereto, solely
applicable to Guarantor), there are no actions, suits or proceedings at law or
in equity by or before any Governmental Authority or other agency now pending or
threatened against or affecting Borrower, Operating Lessee, Operating Pledgor,
Guarantor or any Individual Property, which actions, suits or proceedings, if
determined against Borrower, Operating Lessee, Operating Pledgor, Guarantor or
any Individual Property, might result in a Material Adverse Effect.

 

4.1.5           Agreements. Neither Borrower nor Operating Lessee is a party to
any agreement or instrument or subject to any restriction for which a default or
violation by Borrower or Operating Lessee (as applicable) is reasonably likely
to result in a Material Adverse Effect. Neither Borrower nor Operating Lessee is
in default in any material respect in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which Borrower, Operating Lessee or any
Individual Property is bound. Neither Borrower nor Operating Lessee has any
material financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Borrower or Operating Lessee
is a party or by which Borrower, Operating Lessee or the Properties are
otherwise bound, other than (a) obligations incurred in the ordinary course of
the operation of the Properties as permitted pursuant to clause (w) of the
definition of “Special Purpose Entity” set forth in Section 1.1 hereof,
(b) obligations under or identified in the Loan Documents or (c) obligations
being repaid as of the date hereof.

 

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4.1.6           Title. Each Borrower, other than Operating Lessor and Master
Lessee, has fee simple title to the real property comprising its applicable
Individual Property, free and clear of all Liens whatsoever except the Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. Operating Lessor has leasehold
title to the Viceroy Property pursuant to the Ground Lease and Master Lessee has
leasehold title to the 350 Bleecker Street Property pursuant to the Master
Lease, in each case, free and clear of all Liens whatsoever except the Permitted
Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. Each Security Instrument, when
properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected first priority lien (or a valid,
perfected second priority lien with respect to the Second Priority Security
Instrument) on the applicable Individual Property, subject only to Permitted
Encumbrances and the Liens created by the Loan Documents and (b) perfected
security interests in and to, and perfected collateral assignments of, all
personalty (including the Leases), all in accordance with the terms thereof, in
each case subject only to any applicable Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by
the Loan Documents. There are no claims for payment for work, labor or materials
affecting the Properties which are or may become a Lien prior to, or of equal
priority with, the Liens created by the Loan Documents. All FF&E necessary for
the general operation, use and occupancy of the Viceroy Property have been
installed or incorporated into the Viceroy Property and Borrower or Operating
Lessee is the absolute owner of all of the same free and clear of all chattel
mortgages, conditional vendor’s liens and other liens and/or security interests,
other than the applicable Security Instruments and the security interests
created by the other Loan Documents or as permitted by this Agreement.

 

4.1.7           Solvency. Each Borrower has (a) not entered into this
transaction or executed the Notes, this Agreement or any other Loan Documents
with the actual intent to hinder, delay or defraud any creditor and (b) received
reasonably equivalent value in exchange for its obligations under such Loan
Documents. After giving effect to the Loan, the fair saleable value of each
Borrower’s assets exceeds and will, immediately following the making of the
Loan, exceed such Borrower’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower’s assets is and will, immediately following the
making of the Loan, be greater than such Borrower’s probable liabilities
immediately following the making of the Loan. Each of such Borrower’s assets do
not and, immediately following the making of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Borrower does not intend to incur debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower). No petition in bankruptcy has been filed
against Borrower, Operating Lessee or Guarantor in the last seven (7) years, and
none of Borrower, Operating Lessee or Guarantor in the last seven (7) years has
ever made an assignment for the benefit of creditors or taken advantage of any
insolvency act for the benefit of debtors. None of Borrower, Operating Lessee or
Guarantor are contemplating either the filing of a petition by it under any
state or federal bankruptcy or insolvency laws or the liquidation of all or a
major portion of Borrower’s or Operating Lessee’s assets or properties, and each
of Borrower and Operating Lessee has no knowledge of any Person contemplating
the filing of any such petition against it or Guarantor.

 

4.1.8           Full and Accurate Disclosure. No statement of fact made by or on
behalf of Borrower or Operating Lessee in this Agreement or in any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained herein or therein
not misleading. There is no material fact presently known to Borrower or
Operating Lessee which has not been disclosed to Lender which is reasonably
likely to result in a Material Adverse Effect with respect to such party.

 

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4.1.9           ERISA.

 

(a)          Generally. Each of the Borrower, Operating Lessee, Guarantor and
their ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable law relating to
any Plans and the regulations and published interpretations thereunder. None of
Borrower, Operating Lessee or Guarantor has incurred or reasonably expects to
incur any liability for a Prohibited Transaction (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code). No ERISA Event or termination
of any Plan has occurred in the past six (6) years or is reasonably expected to
occur and no notice of termination has been filed in the past six (6) years by
or with the PBGC with respect to any Plan established or maintained by Borrower,
Operating Lessee, Guarantor or any ERISA Affiliate. None of Borrower, Operating
Lessee, Guarantor or any ERISA Affiliate is or was a party to any Multiemployer
Plan other than a CBA Multiemployer Plan. With respect to each Foreign Benefit
Arrangement and with respect to each Foreign Plan, (i) any employer and employee
contributions required by law or by the terms of any Foreign Benefit Arrangement
or any Foreign Plan have been made, or, if applicable, accrued, in accordance
with normal accounting practices, (ii) the fair market value of the assets of
each funded Foreign Plan or the liability of each insurer for any Foreign Plan
funded through insurance or the book reserve established for any Foreign Plan,
together with any accrued contributions, is sufficient to procure or provide for
the accrued benefit obligations, as of the date hereof, with respect to all
current and former participants in such Foreign Plan according to the actuarial
assumptions and valuations most recently used to account for such obligations in
accordance with applicable generally accepted accounting principles, and
(iii) each Foreign Plan that is required to be registered has been registered
and has been maintained in good standing with applicable regulatory authorities.

 

(b)          Plan Assets; Prohibited Transactions. None of Borrower, Operating
Lessee or Guarantor is, and neither shall become an entity deemed to hold “plan
assets” within the meaning of 29 C.F.R. § 2510.3-101 (as modified by
Section 3(42) of ERISA) of an employee benefit plan (as defined in Section 3(3)
of ERISA) which is subject to Title I of ERISA or any plan (within the meaning
of and subject to Section 4975 of the Code). None of Borrower, Operating Lessee
or Guarantor is a “governmental plan” within the meaning of Section 3(32) of
ERISA and transactions by or with Borrower, Operating Lessee or Guarantor are
not subject to any state or other statute, regulation or other restriction
regulating investments of, or fiduciary obligations with respect to,
governmental plans within the meaning of Section 3(32) of ERISA which is similar
to Section 406 of ERISA or Section 4975 of the Code (“Similar Law”). Assuming
that no portion of the Loan is funded or held with “plan assets” within the
meaning of 29 C.F.R. § 2510.3-101 (as modified by Section 3(42) of ERISA), the
execution of this Agreement, the making of the Loan and the other transactions
contemplated by the Loan Documents, including but not limited to the exercise by
the Lender of its rights under the Loan Documents, are not and will not give
rise to an unexempt Prohibited Transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Code, and are not prohibited or otherwise
restricted by Similar Law.

 

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4.1.10         Compliance. Except as disclosed in the Zoning Reports, Borrower,
Operating Lessee and the Properties (including the Improvements) and the use
thereof comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes and
Prescribed Laws to the extent applicable. Neither Borrower nor Operating Lessee
is in default or violation of any order, writ, injunction, decree or demand of
any Governmental Authority. There has not been committed by Borrower or
Operating Lessee any act or omission affording any Governmental Authority the
right of forfeiture as against any Individual Property or any part thereof or
any monies paid in performance of Borrower’s or Operating Lessee’s obligations
under any of the Loan Documents to which it is a party. On the Closing Date, the
Improvements at each Individual Property were in material compliance with Legal
Requirements.

 

4.1.11         Financial Information. All financial data with respect to
Borrower, the Property and Guarantor, including, without limitation, the
statements of cash flow and income and operating expense, that have been
delivered to Lender in connection with the Loan (i) are true, complete and
correct in all material respects, (ii) accurately represent the financial
condition of Borrower, Guarantor and the Properties, as applicable, as of the
date of such reports, and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP or, with respect to the Viceroy Property, the Uniform System of
Accounts throughout the periods covered, except as disclosed therein. Except for
Permitted Encumbrances, neither Borrower nor Operating Lessee has any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that are known
to Borrower or Operating Lessee and reasonably likely to have a Material Adverse
Effect, except as referred to or reflected in said financial statements. Since
the date of such financial statements, there has been no material adverse change
in the financial condition, operations or business of Borrower or Guarantor from
that set forth in said financial statements.

 

4.1.12         Condemnation. No Condemnation or other similar proceeding has
been commenced or, to Borrower’s or Operating Lessee’s knowledge, is threatened
or contemplated with respect to all or any portion of any Individual Property or
for the relocation of roadways providing access to any Individual Property.

 

4.1.13         Federal Reserve Regulations. No part of the proceeds of the Loan
will be used for the purpose of purchasing or acquiring any “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.

 

4.1.14         Utilities and Public Access. Each Individual Property has rights
of access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service such Individual Property for its respective
intended uses. All public utilities necessary or convenient to the full use and
enjoyment of each Individual Property are located either in the public
right-of-way abutting such Individual Property (which are connected so as to
serve such Individual Property without passing over other property) or in
recorded easements serving such Individual Property and such easements are set
forth in and insured by the related Title Insurance Policy. All roads necessary
for the use of each Individual Property for its current respective purpose have
been completed and dedicated to public use and accepted by all Governmental
Authorities.

 

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4.1.15         Not a Foreign Person. Neither Borrower nor Operating Lessee is a
“foreign person” within the meaning of §1445(f)(3) of the Code.

 

4.1.16         Separate Lots. Each Individual Property is comprised of one (1)
or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Individual
Property.

 

4.1.17         Assessments. To Borrower’s knowledge, there are no pending or
proposed special or other assessments for public improvements or otherwise
affecting any Individual Property, nor are there any contemplated improvements
to any Individual Property that may result in such special or other assessments.

 

4.1.18         Enforceability. The Loan Documents are not subject to any right
of rescission, set-off, counterclaim or defense by Borrower, Operating Lessee or
Guarantor, including the defense of usury, nor would the operation of any of the
terms of the Loan Documents, or the exercise of any right thereunder, render the
Loan Documents unenforceable (subject to principles of equity and bankruptcy,
insolvency and other laws generally affecting creditors’ rights and the
enforcement of debtors’ obligations), and none of Borrower, Operating Lessee or
Guarantor have asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.

 

4.1.19         No Prior Assignment. There are no prior assignments of the Leases
or any portion of the Rents due and payable or to become due and payable which
are presently outstanding.

 

4.1.20         Insurance. Borrower has obtained and has delivered to Lender
copies of all Policies, with premiums fully paid thereunder, reflecting the
insurance coverages, amounts and other requirements set forth in this Agreement.
No claims have been made or are currently pending, outstanding or otherwise
remain unsatisfied under any such Policy, and neither Borrower nor, to
Borrower’s knowledge, any other Person, has done, by act or omission, anything
which would impair the coverage of any such Policies.

 

4.1.21         Use of Property. Each Individual Property is used exclusively in
accordance with Legal Requirements.

 

4.1.22         Certificate of Occupancy; Licenses. All certifications, permits,
licenses and approvals, including without limitation, certificates of completion
and occupancy permits and any applicable hospitality and liquor licenses
required for the legal use, occupancy and operation of each Individual Property
for its current use (collectively, the “Licenses”), have been obtained and are
in full force and effect. Borrower and Operating Lessee shall keep and maintain
all Licenses necessary for the operation of each Individual Property for its
current use. The use being made of each Individual Property is in conformity
with the certificate of occupancy issued for such Individual Property.

 

4.1.23         Flood Zone. None of the Improvements on any Individual Property
are located in an area as identified by the Federal Emergency Management Agency
as an area having special flood hazards or, if so located, the flood insurance
required pursuant to Section 6.1(a)(i) is in full force and effect with respect
to such Individual Property.

 

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4.1.24         Physical Condition. Except as disclosed in the Zoning Reports or
the Physical Condition Reports and to Borrower’s knowledge, each Individual
Property, including, without limitation, all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects;
there exists no structural or other material defects or damages in any
Individual Property, whether latent or otherwise, and neither Borrower nor
Operating Lessee has received notice from any insurance company or bonding
company of any defects or inadequacies in any Individual Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.

 

4.1.25         Boundaries. Except as otherwise shown on the Survey, all of the
improvements which were included in determining the appraised value of each
Individual Property lie wholly within the boundaries and building restriction
lines of such Individual Property, and no improvements on adjoining properties
encroach upon any Individual Property, and no easements or other encumbrances
upon any Individual Property encroach upon any of the Improvements, so as to
affect the value or marketability of the applicable Property except those which
are insured against by the applicable Title Insurance Policy.

 

4.1.26         Leases. The Properties are not subject to any Leases other than
the Leases described in the rent roll attached hereto as Schedule IV and made a
part hereof, which rent roll is true, complete and accurate in all material
respects as of the Closing Date. The copies of the Leases and any related
guaranty (including all amendments thereto) delivered to Lender are accurate,
true and complete, and there are no oral agreements with respect thereto.
Borrower or Operating Lessee (as applicable) is the owner and lessor of
landlord’s interest in the Leases. No Person has any possessory interest in any
Individual Property or right to occupy the same except under and pursuant to the
provisions of the Leases (and the Ground Lease, the Master Lease and the
Operating Lease). The current Leases are in full force and effect and Landlord
has not delivered notice of default to any Tenant that remains outstanding
beyond the expiration of all notice and cure periods thereunder by either party.
No Rent has been paid more than one (1) month in advance of its due date other
than first month’s Rent and any security deposit. All security deposits are held
by Borrower or Operating Lessee (as applicable) in accordance with applicable
law. Except for any tenant improvement, rent concessions, rebates, leasing
commissions or other payments, credits, allowances or abatements previously
disclosed to Lender in writing, all work to be performed by Borrower or
Operating Lessee under each Lease has been performed as required and has been
accepted by the applicable Tenant, and any payments, free rent, partial rent,
rebate of rent or other payments, credits, allowances or abatements required to
be given by Borrower or Operating Lessee to any tenant has already been received
by such Tenant. There has been no prior sale, transfer or assignment,
hypothecation or pledge by Borrower or Operating Lessee of Borrower’s or
Operating Lessee’s interest (as applicable) in any Lease or of the Rents
received therein which is still in effect. No Tenant under any Lease has a right
or option pursuant to such Lease or otherwise to purchase all or any part of the
leased premises or the building of which the leased premises are a part.

 

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4.1.27         Survey. To Borrower’s knowledge, the Survey for each Individual
Property delivered to Lender in connection with this Agreement does not fail to
reflect any material matter affecting such Individual Property or the title
thereto.

 

4.1.28         Principal Place of Business; Organizational Information. Each
Individual Borrower’s and Operating Lessee’s principal place of business as of
the date hereof is the address set forth in the introductory paragraph of this
Agreement. Each Individual Borrower and Operating Lessee is organized under the
laws of the State of Delaware (or, with respect to 50 Varick LLC, the State of
New York).

 

4.1.29         Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements in connection with the
recording of the Security Instruments have been paid or will be paid in
connection with the recording of the Security Instruments. All mortgage,
mortgage recording, stamp, intangible or other similar tax required to be paid
by any Person under applicable Legal Requirements currently in effect in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Security Instruments, have been paid or will be paid in
connection with the recording of the Security Instruments.

 

4.1.30         Special Purpose Entity/Separateness. (a) At all times on and
after the date hereof and until such time as the Debt shall be repaid in full or
any Individual Borrower is released from its obligations hereunder, each
Borrower, Operating Lessee and Operating Pledgor hereby represents, warrants and
covenants that each Individual Borrower, Operating Lessee and Operating Pledgor
is and shall continue to be a Special Purpose Entity, each Individual Borrower,
Operating Lessee has been since the date of its formation in compliance with
clauses (b), (c), (v), (ee), (pp) and (rr) of the definition of “Special Purpose
Entity,” and Operating Pledgor has been since the date of its formation a
Special Purpose Entity. In furtherance of and without limiting the foregoing, at
all times on and after the date hereof and until such time as the Debt shall be
repaid in full, each of Borrower, Operating Lessee and Operating Pledgor shall
be and shall continue to be a single-member limited liability company, and none
of Borrower, Operating Lessee or Operating Pledgor shall change its
organizational state of formation or its organizational entity type without
Lender’s prior written consent, which consent may be withheld in Lender’s sole
discretion.

 

(b)          Intentionally omitted.

 

(c)          Each of Borrower, Operating Lessee and Operating Pledgor covenants
and agrees that Borrower, Operating Lessee and Operating Pledgor shall provide
Lender with ten (10) Business Days’ prior written notice prior to the removal of
an Independent Director of any of Borrower, Operating Lessee and/or Operating
Pledgor.

 

4.1.31         Management Agreement. Each Management Agreement is in full force
and effect and there is no default thereunder by any party thereto beyond
expiration of all applicable notice and cure periods. Each Management Agreement
was entered into on commercially reasonable terms. Except as set forth on
Schedule VIII attached hereto, neither Borrower nor Operating Lessee is a party
to any property management agreement with respect to any Property and such
Property is self-managed by Borrower or its Affiliates as of the Closing Date.

 

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4.1.32         Illegal Activity. No portion of any Individual Property has been
or will be purchased with proceeds of any illegal activity.

 

4.1.33         No Change in Facts or Circumstances; Disclosure. All information
submitted by or on behalf of Borrower or Operating Lessee to Lender and in all
financial statements, rent rolls (including the rent roll attached hereto as
Schedule IV), reports, certificates and other documents submitted in connection
with the Loan or in satisfaction of the terms thereof and all statements of fact
made by Borrower or Operating Lessee in this Agreement or in any other Loan
Document, are true, complete and correct in all material respects. To Borrower’s
knowledge, there has been no material adverse change in any condition, fact,
circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading in any material respect or that is reasonably
expected to have a Material Adverse Effect. Borrower, Operating Lessee and
Guarantor have disclosed to Lender all material facts with respect to Borrower,
Operating Lessee, Guarantor or the Property and has not failed to disclose any
material fact that could cause any Provided Information or representation or
warranty made herein to be materially misleading.

 

4.1.34         Investment Company Act. Neither Borrower nor Operating Lessee is
(a) an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended;
(b) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 2005, as amended; or
(c) subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.

 

4.1.35         Embargoed Person. As of the date hereof and at all times
throughout the term of the Loan, including after giving effect to any Transfers
permitted pursuant to the Loan Documents, (a) none of the funds or other assets
of Borrower, Operating Lessee, Operating Pledgor and Guarantor constitute
property of, or are beneficially owned, directly or indirectly, by any Embargoed
Person; (b) no Embargoed Person has any interest of any nature whatsoever in
Borrower, Operating Lessee, Operating Pledgor or Guarantor, as applicable, with
the result that the investment in Borrower, Operating Lessee, Operating Pledgor
or Guarantor, as applicable (whether directly or indirectly), is prohibited by
law or the Loan is in violation of law; and (c) none of the funds of Borrower,
Operating Lessee, Operating Pledgor or Guarantor, as applicable, have been
derived from any unlawful activity with the result that the investment in
Borrower, Operating Lessee, Operating Pledgor or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law. Notwithstanding the foregoing, the representations in this
Section 4.1.35 with respect to the direct or indirect owners of Guarantor are
limited to apply only to each direct or indirect Controlling Equityholder of
Guarantor and are further limited to the extent of Borrower and Operating Lessee
being in compliance with the requirements of any applicable regulatory agency or
other Governmental Authority. For purposes of this Section, “Controlling
Equityholder” shall mean any direct or indirect owner of five percent (5%) or
more of the equity interest in Guarantor.

 

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4.1.36         Environmental Representations and Warranties. Except as otherwise
disclosed by the Environmental Reports, (a) there are no Hazardous Substances or
underground storage tanks in, on, or under any Individual Property, except those
that are in compliance with Environmental Laws and with permits issued pursuant
thereto (to the extent such permits are required under Environmental Law);
(b) to Borrower’s knowledge, there are no past, present or threatened Releases
of Hazardous Substances in, on, under or from any Individual Property which has
not been remediated in all material respects in accordance with Environmental
Law; (c) to Borrower’s knowledge, there is no threat of any Release of Hazardous
Substances migrating to any Individual Property; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto,
in connection with any Individual Property which has not been remediated in all
material respects in accordance with Environmental Law; (e) neither Borrower nor
Operating Lessee knows of, and has received, any written communication from any
Person (including but not limited to a Governmental Authority) relating to
Hazardous Substances or Remediation thereof, of possible liability pursuant to
any Environmental Law, other environmental conditions in connection with any
Individual Property, or any actual or potential administrative or judicial
proceedings in connection with any of the foregoing; and (f) each of Borrower
and Operating Lessee has truthfully and fully disclosed to Lender, in writing,
any and all information relating to environmental conditions in, on, under or
from the Properties that is known to Borrower or Operating Lessee (as
applicable) and has provided to Lender all information that is contained in
Borrower’s or Operating Lessee’s files and records (as applicable), including,
but not limited to, any reports relating to Hazardous Substances in, on, under
or from the Properties and/or to the environmental condition of the Properties.

 

4.1.37         Lockbox Account and Cash Management Account.

 

(a)          Other than in connection with the Loan Documents and except for
Permitted Encumbrances, neither Borrower nor Operating Lessee has sold, pledged,
transferred or otherwise conveyed the Lockbox Account and Cash Management
Account;

 

(b)          Each of the Lockbox Account and Cash Management Account constitutes
“deposit accounts” and/or “securities accounts” within the meaning of the
Uniform Commercial Code of the State of New York;

 

(c)          The Lockbox Account and Cash Management Account are not in the name
of any Person other than Borrower or Operating Lessee, as pledgor, or Agent, as
pledgee. Neither Borrower nor Operating Lessee has consented to the Lockbox Bank
and Cash Management Bank complying with instructions with respect to the Lockbox
Account and Cash Management Account from any Person other than Agent; and

 

(d)          The Property is not subject to any cash management system (other
than pursuant to the Loan Documents), and any and all existing tenant
instruction letters issued in connection with any previous financing have been
duly terminated prior to the date hereof.

 

4.1.38         Intentionally Omitted.

 

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4.1.39         Taxes. Each Borrower is a disregarded entity for U.S. federal
income tax purposes and does not pay U.S. federal income tax at the entity
level. Operating Lessee is subject to U.S. federal income tax. Each of Borrower
and Operating Lessee has timely filed or caused to be filed all U.S. federal and
other material tax returns and reports required to have been filed by it and has
timely paid or caused to be paid all U.S. federal and other material Impositions
required to have been paid by it, except for (a) any such Impositions that are
being contested in good faith by appropriate proceedings and for which the
Borrower or Operating Lessee (as applicable) has set aside on its books adequate
reserves in accordance with GAAP, and (b) Taxes and Other Charges, the payment
of which shall be governed by Section 5.1.2 and Section 7.2 hereof.

 

4.1.40         Inventory. Borrower or Operating Lessee is the owner of all of
the Equipment, Fixtures and Personal Property located on or at each Individual
Property and shall not lease any Equipment, Fixtures or Personal Property other
than as permitted hereunder. All of the Equipment, Fixtures and Personal
Property are sufficient to operate the Property in the manner required hereunder
and in the manner in which it is currently operated.

 

4.1.41         Intentionally Omitted.

 

4.1.42         Ground Lease. Borrower hereby represents and warrants to Lender
the following with respect to the Ground Lease:

 

(a)          Ground Rent. All Ground Rent and other charges due and payable
under the Ground Lease payable by Borrower, as lessee, under the Ground Lease
have been paid in full.

 

(b)          No Liens. Except for the Permitted Encumbrances and other
encumbrances of record, Borrower’s interest in the Ground Lease is not subject
to any Liens or encumbrances superior to, or of equal priority with, the
Security Instruments other than Ground Lessor’s related fee interest.

 

(c)          Default. As of the date hereof, the Ground Lease is in full force
and effect and no default has occurred on the part of the Borrower under the
Ground Lease, nor to Borrower’s knowledge has any default occurred by the Ground
Lessor under the Ground Lease (except in each case, any such default that has
been previously cured). There is no existing condition which, but for the
passage of time or the giving of notice, could result in a default by the
Borrower or Ground Lessor under the terms of the Ground Lease.

 

(d)          Copy of Ground Lease. A true, correct and complete copy of the
Ground Lease has been provided to Lender.

 

4.1.43         Master Lease. Borrower hereby represents and warrants to Lender
the following with respect to the Master Lease:

 

(a)          Rent. All rent and other charges due and payable under the Master
Lease payable by Borrower, as lessee, under the Master Lease have been paid in
full.

 

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(b)          No Liens. Except for the Permitted Encumbrances and other
encumbrances of record, Borrower’s interest in the Master Lease is not subject
to any Liens or encumbrances superior to, or of equal priority with, the
Security Instruments other than Master Lessor’s related fee interest.

 

(c)          Default. As of the date hereof, the Master Lease is in full force
and effect and no default has occurred on the part of the Borrower under the
Master Lease, nor to Borrower’s knowledge has any default occurred by the Master
Lessor under the Master Lease (except in each case, any such default that has
been previously cured). There is no existing condition which, but for the
passage of time or the giving of notice, could result in a default by the
Borrower or Master Lessor under the terms of the Master Lease.

 

(d)          Copy of Master Lease. A true, correct and complete copy of the
Master Lease has been provided to Lender.

 

4.1.44         Condominiums. Borrower hereby represents and warrants to Lender
the following with respect to the each Condominium:

 

(a)          The Condominium has been legally and validly created pursuant to
all Legal Requirements and the Condominium Documents.

 

(b)          Each of the Condominium Documents is in full force and effect. To
Borrower’s knowledge, neither Borrower nor any other party to any of the
Condominium Documents is in default under any of the material provisions of any
of the Condominium Documents, and there are no conditions which, with the
passage of time or the giving of notice, or both, would constitute a default
thereunder. None of the Condominium Documents has been modified, amended or
supplemented except as set forth on Schedule IX attached hereto. Borrower has
delivered to Lender a true, complete and correct copy of each of the Condominium
Documents.

 

(c)          All conditions of the Condominium Documents which were required to
be satisfied, and all approvals which were required to be given in connection
with the making of the Loan, as of the date hereof, have been satisfied, given
or waived. The Condominium Documents are valid and enforceable.

 

(d)          All fees, dues, charges and assessments, whether annual, monthly,
regular, special or otherwise, including, any “Common Charges” (as such term is
defined in the Condominium Documents) (collectively, the “Common Charges”)
payable by an Individual Borrower are set forth on Schedule IX attached hereto
and have been fully paid to date.

 

(e)          The applicable Individual Borrower is the owner of the Units as set
forth on Schedule IX attached hereto. No Affiliate of Borrower (other than the
applicable Individual Borrower) owns any Units in the Condominium.

 

(f)          There are currently no special or other extraordinary Common
Charges assessed against any Individual Borrower (other than regular, monthly
Common Charges). To Borrower’s knowledge, the Board has not established a
separate working capital or any other similar type of reserve. There are no
judgments, suits or claims pending, filed or threatened against the Board and
there are no set-offs, claims, counterclaims or defenses being asserted for the
enforcement of the obligations of any party under the Condominium Documents
which is reasonably likely to have a Material Adverse Effect. Neither the Board
nor any other Person has any right of first refusal or option to purchase the
Individual Property subject to the Condominium Documents.

 

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(g)          All of the members and officers of the Board are listed on Schedule
IX attached hereto. The members of the Board appointed by Borrower are
designated as such on Schedule IX. The Board has the sole power and authority to
act on behalf of, and bind, the Condominium. The Board and the Condominium with
respect to the Property located at 50 Varick Street, New York, New York and 333
W 34th Street, New York, New York are controlled by members thereof appointed by
Borrower. To Borrower’s knowledge, neither the Board nor the Condominium are
party to any loan, credit agreement or other arrangement for any extension of
credit, whether funded or to be funded.

 

4.1.45         Viceroy Hotel.

 

(a)          Neither the Operating Lessor nor Operating Lessee is a party to
equipment leases with respect to the Viceroy Property.

 

(b)          Each of Operating Lessor and Operating Lessee has the right to use
all patents, licenses, franchises, trademarks, trademark rights, trade names,
trade name rights, trade secrets and copyrights (collectively, the “Intellectual
Property”), if any, necessary to the conduct of its businesses, without known
conflict with any patent, license, franchise, trademark, trade secret, trade
name, copyright, or other proprietary right of any other Person. Any such
Intellectual Property is fully protected and/or duly and properly registered,
filed or issued in the appropriate office and jurisdictions for such
registrations, filing or issuances. No material claim has been asserted by any
Person with respect to the use of any such Intellectual Property, or challenging
or questioning the validity or effectiveness of any such Intellectual Property.

 

(c)          There are no: (i) collective bargaining agreements and/or other
labor agreements to which Borrower is a party or to which Borrower may be bound;
(ii) except as set forth on Schedule X attached hereto, collective bargaining
agreements and/or other labor agreements to which the Viceroy Property, or any
portion thereof, is bound, (iii) employment, profit sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, health, welfare, or incentive plans and/or contracts to
which Borrower or the Viceroy Property, or any portion thereof is a party, or by
which either is or may be bound; or (iv) plans and/or agreements under which
“fringe benefits” (including, but not limited to, vacation plans or programs,
and related or similar dental or medical plans or programs, and related or
similar benefits) are afforded to employees of the applicable Individual
Borrower or the Viceroy Property, or any portion thereof. The applicable
Individual Borrower’s knowledge, such Individual Borrower has not violated any
material Legal Requirements relating to the employment of labor, including those
relating to wages, hours, collective bargaining and the payment and withholding
of taxes and other sums as required by appropriate Governmental Authorities. To
the applicable Individual Borrower’s knowledge, the applicable Manager and its
Affiliates have complied with the Employment Related Laws and Obligations.  To
the applicable Individual Borrower’s knowledge, no employee employed at the
Viceroy Property has asserted any material claim of violation of the collective
bargaining agreement listed on Schedule X attached hereto or the Employment
Related Laws and Obligations against the applicable Manager or any or its
Affiliates that would reasonably be expected to have a Material Adverse Effect. 

 

 -79- 

 

 

4.1.46         Operating Lease. With respect to the Viceroy Property, the
applicable Individual Borrower is the owner and lessor of landlord’s interest in
the Operating Lease. Operating Lessee is the owner and lessee of tenant’s
interest in the Operating Lease. The Operating Lease is in full force and effect
and there are no material defaults thereunder by Borrower or Operating Lessee
beyond the expiration of all applicable notice and grace periods. No Operating
Rent has been paid more than once (1) month in advance of its due date. All
security deposits (if any) are held by Borrower in accordance with applicable
law. All work (if any) to be performed by Borrower under the Operating Lease has
been performed as required and has been accepted by the Operating Lessee, and
any payments, free rent, partial, rent, rebate of rent or other payments,
credits, allowances or abatements required to be given by Borrower to Operating
Lessee have already been received by Operating Lessee. There has been no prior
sale, transfer or assignment, hypothecation or pledge of Operating Lease or of
the rent thereunder which is outstanding. Operating Lessee has not assigned the
Operating Lease or sublet all or any portion of the premises demised thereby
other than pursuant to a Lease. Operating Lessee does not have a right or option
pursuant to the Operating Lease or otherwise to purchase all or any part of the
leased premises or the building of which the leased premises are a part. A true,
correct and complete copy of the Operating Lease, together with any amendments
thereto and any ancillary agreement related thereto, has been delivered to
Lender.

 

4.1.47         World Wide Plaza Property. With respect to the World Wide Plaza
Property, as of the Closing Date, Guarantor indirectly owns 48.9% of the equity
interest in the owner of the World Wide Plaza Property.

 

Section 4.2           Survival of Representations. Each of Borrower and
Operating Lessee agrees that all of the representations and warranties of
Borrower and Operating Lessee (as applicable) set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as the Debt remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower or Operating Lessee. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower or Operating Lessee (as applicable) shall be deemed to
have been relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf.

 

ARTICLE V

 

BORROWER AND OPERATING LESSEE COVENANTS

 

Section 5.1           Affirmative Covenants. From the date hereof and until
payment and performance in full of all obligations of Borrower and, solely with
respect to the Viceroy Property, Operating Lessee under the Loan Documents or
the earlier release of the Lien of the Security Instruments encumbering the
Properties (and all related obligations) in accordance with the terms of this
Agreement and the other Loan Documents, each Borrower and, solely with respect
to the Viceroy Property, Operating Lessee and Operating Pledgor hereby covenants
and agrees with Lender that:

 

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5.1.1           Existence; Compliance with Legal Requirements. Borrower and
Operating Lessee shall do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence, rights, licenses, permits
and franchises and comply with all Legal Requirements applicable to Borrower,
Operating Lessee and the Properties, including, without limitation, Prescribed
Laws, building and zoning codes and certificates of occupancy. With respect to
the Properties operating under a temporary certificate of occupancy, Borrower
and Operating Lessee shall preserve, renew and keep in full force and effect the
temporary certificate of occupancy in accordance with Legal Requirements
applicable to the Property subject to such temporary certificate of occupancy
and shall use reasonable efforts in the ordinary course of Borrower’s or
Operating Lessee’s (as applicable) business to obtain a permanent certificate of
occupancy for such Property. In the event Borrower or Operating Lessee (as
applicable) receives a permanent certificate of occupancy, Borrower or Operating
Lessee shall promptly deliver to Lender such permanent certificate of occupancy.
There shall never be committed by Borrower or Operating Lessee, and neither
Borrower nor Operating Lessee shall permit any other Person in occupancy of or
involved with the operation or use of the Properties to commit any act or
omission affording any Governmental Authority the right of forfeiture against
any Individual Property or any part thereof or any monies paid in performance of
Borrower’s or Operating Lessee’s obligations under any of the Loan Documents.
Borrower and Operating Lessee shall at all times maintain, preserve and protect
all franchises and trade names and preserve all the remainder of its property
used or useful in the conduct of its business and shall keep the Properties in
good working order and repair, and from time to time make, or cause to be made,
all reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided in the Loan Documents. Borrower
and Operating Lessee shall keep the Properties insured at all times by
financially sound and reputable insurers, to such extent and against such risks,
and maintain liability and such other insurance, as is more fully provided in
this Agreement. After prior written notice to Lender, Borrower or Operating
Lessee, at its own expense, may contest by appropriate legal proceeding promptly
initiated and conducted in good faith and with due diligence, the validity of
any Legal Requirement, the applicability of any Legal Requirement to Borrower,
Operating Lessee or any Individual Property or any alleged violation of any
Legal Requirement, provided that (a) no Event of Default has occurred and
remains uncured; (b) such proceeding shall be permitted under and be conducted
in accordance with the provisions of any instrument to which Borrower or
Operating Lessee is subject and shall not constitute a default thereunder and
such proceeding shall be conducted in accordance with all applicable statutes,
laws and ordinances; (c) no Individual Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, cancelled or
lost; (d) Borrower and Operating Lessee shall promptly upon final determination
thereof comply with any such Legal Requirement determined to be valid or
applicable or cure any violation of any Legal Requirement applicable to such
party; (e) such proceeding shall suspend the enforcement of the contested Legal
Requirement against Borrower, Operating Lessee and any Individual Property; and
(f) Borrower shall furnish such security as may be reasonably required in the
proceeding, or as may be reasonably requested by Lender, to insure compliance
with such Legal Requirement, together with all interest and penalties payable in
connection therewith. Lender may apply any such security, as necessary to cause
compliance with such Legal Requirement at any time when, in the reasonable
judgment of Lender, the validity, applicability or violation of such Legal
Requirement is finally established or any Individual Property (or any part
thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost. Borrower and Operating Lessee shall operate each
Individual Property in accordance with the terms and provisions of each O&M
Program, if any. Borrower and Operating Lessee shall keep and maintain all
Licenses necessary for the operation of the Property for its approved use in all
material respects.

 

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5.1.2           Taxes and Other Charges. Each Borrower and Operating Lessee
shall pay all Taxes and Other Charges now or hereafter levied or assessed or
imposed against its applicable Individual Property or any part thereof as the
same become due and payable; provided, however, each Borrower’s and Operating
Lessee’s obligation to directly pay Taxes shall be suspended for so long as
Borrower or Operating Lessee (as applicable) complies with the terms and
provisions of Section 7.2 hereof. Borrower and Operating Lessee will deliver to
Lender receipts for payment or other evidence satisfactory to Lender that the
Taxes and Other Charges have been so paid or are not then delinquent no later
than ten (10) days prior to the date on which the Taxes and/or Other Charges
would otherwise be delinquent if not paid. Borrower and Operating Lessee shall
furnish to Lender receipts for the payment of the Taxes and the Other Charges
prior to the date the same shall become delinquent; provided, however, neither
Borrower nor Operating Lessee is required to furnish such receipts for payment
of Taxes in the event that such Taxes have been paid by Lender pursuant to
Section 7.2 hereof. Borrower and Operating Lessee shall not suffer and shall
promptly cause to be paid and discharged any Lien or charge whatsoever which may
be or become a Lien or charge against the Properties, and shall promptly pay for
all utility services provided to the Properties. After prior written notice to
Lender, Borrower or Operating Lessee, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity or application in whole or in part of
any Taxes or Other Charges, provided that (a) no Event of Default has occurred
and remains uncured; (b) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
Borrower or Operating Lessee is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (c) no Individual Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (d) Borrower or Operating Lessee shall promptly
upon final determination thereof pay the amount of any such Taxes or Other
Charges, together with all costs, interest and penalties which may be payable in
connection therewith; (e) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the applicable Individual Property; and
(f) Borrower or Operating Lessee (as applicable) shall furnish such security as
may be required in the proceeding, or as may be reasonably requested by Lender,
to insure the payment of any such Taxes or Other Charges, together with all
interest and penalties thereon. Lender may pay over any such cash deposit or
part thereof held by Lender to the claimant entitled thereto at any time when,
in the judgment of Lender, the entitlement of such claimant is finally
established or any Individual Property (or part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost or
there shall be any danger of the Lien of any applicable Security Instrument
being primed by any related Lien.

 

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5.1.3           Litigation. Each Borrower and Operating Lessee shall give prompt
written notice to Lender of any litigation or governmental proceedings pending
or threatened against such party or Guarantor which would be reasonably likely
to result in a Material Adverse Effect. With respect to item number 3 on
Schedule VI attached hereto, if Borrower or Operating Lessee shall be liable for
any damages pursuant to a final non-appealable judgment of any court or any
settlement of such litigation (such amount, the “Viceroy Litigation Amount”),
then within ninety (90) days of the date of such final non-appealable judgment
or settlement, Borrower shall either (i) pay any such Viceroy Litigation Amount
or (ii) fully bond the Viceroy Litigation Amount to the reasonable satisfaction
of Lender and, in either case, provide evidence of same to Lender.

 

5.1.4           Access to Properties. Each Borrower and Operating Lessee shall
permit agents, representatives and employees of Lender to inspect its Individual
Property or any part thereof at reasonable hours upon reasonable advance notice.

 

5.1.5           Notice of Default. Each Borrower and Operating Lessee shall
promptly advise Lender of any material adverse change in its or Guarantor’s
financial condition or of the occurrence of any Default or Event of Default of
which Borrower or Operating Lessee has knowledge.

 

5.1.6           Cooperate in Legal Proceedings. Each Borrower and Operating
Lessee shall reasonably cooperate with Lender with respect to any proceedings
before any court, board or other Governmental Authority against such party which
may materially affect the rights of Lender hereunder or under any of the other
Loan Documents and, in connection therewith, permit Lender, at its election, to
participate in any such proceedings.

 

5.1.7           Perform Loan Documents. Each Borrower and Operating Lessee shall
observe, perform and satisfy all the terms, provisions, covenants and conditions
of, and shall pay when due all costs, fees and expenses applicable to it to the
extent required under the Loan Documents executed and delivered by such party.

 

5.1.8           Award and Insurance Benefits. Subject to the other provisions of
this Agreement, each Borrower and Operating Lessee shall reasonably cooperate
with Lender in obtaining for Lender the benefits of any Awards or Insurance
Proceeds lawfully or equitably payable in connection with its applicable
Individual Property, and Lender shall be reimbursed for any reasonable
out-of-pocket expenses incurred in connection therewith (including attorneys’
fees and disbursements, and the payment by Borrower of the expense of an
appraisal on behalf of Lender in case of Casualty or Condemnation affecting any
Individual Property or any part thereof) out of such Insurance Proceeds.

 

5.1.9           Further Assurances. Each Borrower and Operating Lessee shall, at
its sole cost and expense:

 

(a)          furnish to Lender all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by such party pursuant to the terms of the Loan Documents or which are
reasonably requested by Lender in connection therewith;

 

 -83- 

 

 

(b)          execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings as may be reasonably necessary or
desirable, to preserve and/or protect the collateral at any time securing or
intended to secure the obligations of Borrower and Operating Lessee under the
Loan Documents, as Lender may reasonably require, including, without limitation,
the execution and delivery of all such writings necessary to transfer any
hospitality or liquor licenses with respect to the Property into the name of
Lender or its designee after the occurrence of an Event of Default; and

 

(c)          do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of any Note
or any other Loan Document which is not of public record, and indemnity in form
and substance reasonably acceptable to Borrower and Lender, and, in the case of
any such mutilation, upon surrender and cancellation of such Note or other
applicable Loan Document, Borrower will issue, in lieu thereof, a replacement
Note or other applicable Loan Document, dated the date of such lost, stolen,
destroyed or mutilated Note or other Loan Document in the same principal amount
thereof and otherwise of like tenor.

 

5.1.10         Mortgage Taxes. Borrower or Operating Lessee (as applicable)
shall upon recordation of the Security Instruments pay all state, county and
municipal recording and all other taxes imposed upon the recordation of the
Security Instruments.

 

5.1.11         Financial Reporting. (a) Each of Borrower and Operating Lessee
will keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with the requirements for a Special Purpose Entity set
forth herein and, with respect to the Viceroy Property, Uniform System of
Accounts and reconciled in accordance with GAAP (or such other accounting basis
acceptable to Lender), proper and accurate books, records and accounts
reflecting the respective financial affairs of Borrower and Operating Lessee and
all items of income and expense in connection with the operation on an
individual basis of the Properties. Lender shall have the right from time to
time at all times during normal business hours upon reasonable notice to examine
such books, records and accounts at the office of Borrower or Operating Lessee
(as applicable) or any other Person maintaining such books, records and accounts
and to make such copies or extracts thereof as Lender shall desire. After the
occurrence of an Event of Default, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower’s or Operating Lessee’s respective
accounting records with respect to the Property, as Lender shall determine to be
necessary or appropriate in the protection of Lender’s interest.

 

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(b)          Each of Borrower and Operating Lessee will furnish to Lender
annually, within ninety (90) days following the end of each Fiscal Year of
Borrower and Operating Lessee, respectively, a complete copy of its unaudited
annual financial statements prepared by Borrower and Operating Lessee,
respectively, in accordance with the Uniform System of Accounts with respect to
the Viceroy Property, and reconciled in accordance with GAAP (or such other
accounting basis acceptable to Lender) covering the Properties on a combined
basis as well as each Individual Property for such Fiscal Year and containing
statements of profit and loss for each of Borrower, Operating Lessee and the
applicable Properties and a balance sheet for each of Borrower and Operating
Lessee. In addition to the foregoing, each of Borrower and Operating Lessee
shall provide on an Individual Property basis statements setting forth the
financial condition and the results of operations for the Properties for such
Fiscal Year, and shall include, but not be limited to, amounts representing
annual Net Cash Flow, Net Operating Income, Gross Income from Operations and
Operating Expenses for its Properties. Each of Borrower’s and Operating Lessee’s
annual financial statements shall be accompanied by an Officer’s Certificate
certifying that each annual financial statement presents fairly the financial
condition and the results of operations of Borrower and Operating Lessee,
respectively, and the Property being reported upon and that such financial
statements have been prepared in accordance with the Uniform System of Accounts
with respect to the Viceroy Property, and reconciled in accordance with GAAP and
as of the date thereof whether there exists an event or circumstance which
constitutes a Default or Event of Default under the Loan Documents executed and
delivered by, or applicable to, Borrower or Operating Lessee, and if such
Default or Event of Default exists, the nature thereof, the period of time it
has existed and the action then being taken to remedy the same.

 

(c)          Each Borrower and Operating Lessee will furnish, or cause to be
furnished, to Lender on or before forty-five (45) days after the end of each
calendar quarter the following items, accompanied by an Officer’s Certificate
stating that such items are true, correct, accurate, and complete and fairly
present the financial condition and results of the operations of Borrower and
Operating Lessee, respectively, and the applicable Properties on a combined
basis (except with respect to Operating Lessee) as well as each Individual
Property (subject to normal year-end adjustments), as applicable: (i) a rent
roll for the subject quarter; (ii) quarterly and year-to-date operating
statements (including a statement of Capital Expenditures) prepared by Borrower
or Operating Lessee (as applicable) for each calendar quarter, noting Net Cash
Flow, Net Operating Income, Gross Income from Operations, and Operating Expenses
(not including any contributions to the Replacement Reserve Fund, the FF&E
Reserve Fund and the Rollover Reserve Fund), and, upon Lender’s reasonable
request, other information necessary and sufficient to fairly represent the
financial position and results of operation of the Properties during such
calendar quarter to the extent such other information reasonably requested by
Lender is in Borrower’s or Operating Lessee’s (as applicable) possession or is
available to or obtainable by Borrower or Operating Lessee (as applicable) using
commercially reasonable efforts, and containing a comparison of budgeted income
and expenses and the actual income and expenses; and (iii) a calculation
reflecting the annual Debt Service Coverage Ratio for the immediately preceding
twelve (12)-month period as of the last day of such quarter and a calculation
reflecting the Debt Yield as of the last day of such calendar quarter, in each
case subject to verification by Lender. In addition, each Officer’s Certificate
shall also state that the representations and warranties of Borrower or
Operating Lessee (as applicable) set forth in Section 4.1.30 are true and
correct as of the date of such certificate. On or before thirty (30) days after
the end of each calendar quarter, each of Borrower and Operating Lessee also
will furnish, or cause to be furnished, to Lender the most current Smith Travel
Research Reports then available to Borrower or Operating Lessee (as applicable)
reflecting market penetration and relevant hotel properties competing with the
Viceroy Property.

 

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(d)          In addition, prior to a Securitization, or during the continuance
of a Cash Sweep Period or Event of Default, on or before thirty (30) days after
the end of each calendar month (other than with respect to January or the last
calendar month of any quarter), each of Borrower and Operating Lessee also will
furnish, or cause to be furnished, to Lender (i) a rent roll for the subject
month; (ii) monthly and year-to-date operating statements (including a statement
of Capital Expenditures) prepared for such calendar month, noting Net Cash Flow,
Net Operating Income, Gross Income from Operations, all Operating Expenses (not
including any contributions to the Replacement Reserve Fund, the FF&E Reserve
Fund and the Rollover Reserve Fund), and, upon Lender’s reasonable request,
other information necessary and sufficient to fairly represent the financial
position and results of operation of the Properties during such calendar month
to the extent such other information reasonably requested by Lender is in
Borrower’s or Operating Lessee’s (as applicable) possession or is available to
or obtainable by Borrower or Operating Lessee (as applicable) using commercially
reasonable efforts, and containing a comparison of budgeted income and expenses
and the actual income and expenses and specific detail on Rents for such
calendar month. On or before thirty (30) days after the end of each calendar
month, each of Borrower and Operating Lessee also will furnish, or cause to be
furnished, to Lender the most current Smith Travel Research Reports then
available to Borrower or Operating Lessee (as applicable) reflecting market
penetration and relevant hotel properties competing with the Viceroy Property.

 

(e)          For each Fiscal Year, each of Borrower and Operating Lessee (as
applicable) shall submit to Lender an Annual Budget not later than sixty (60)
days prior to the end of the prior Fiscal Year (and with respect to the Annual
Budget for the Fiscal Year commencing in 2017, within thirty (30) days of the
Closing Date using diligent efforts, but no later than January 30, 2017) in form
provided to Lender in connection with the underwriting for the Loan or otherwise
reasonably satisfactory to Lender. The Annual Budget shall be subject to
Lender’s prior written reasonable approval (each such Annual Budget, an
“Approved Annual Budget”). In the event that Lender objects to a proposed Annual
Budget submitted by Borrower or Operating Lessee (as applicable) which requires
the approval of Lender hereunder, Lender shall advise Borrower or Operating
Lessee (as applicable) of such objections within fifteen (15) days after receipt
thereof (and deliver to Borrower or Operating Lessee (as applicable) a
reasonably detailed description of such objections) and Borrower or Operating
Lessee (as applicable) shall promptly revise such Annual Budget and resubmit the
same to Lender. Lender shall advise Borrower or Operating Lessee (as applicable)
of any objections to such revised Annual Budget within ten (10) days after
receipt thereof (and deliver to Borrower or Operating Lessee (as applicable) a
reasonably detailed description of such objections) and Borrower or Operating
Lessee (as applicable) shall promptly revise the same in accordance with the
process described in this subsection until Lender approves the Annual Budget.
Until such time that Lender approves a proposed Annual Budget which requires the
approval of Lender hereunder, the most recently Approved Annual Budget shall
apply; provided, that such Approved Annual Budget shall be adjusted to reflect
actual increases in Taxes, Insurance Premiums and utilities expenses.

 

(f)          In the event that, Borrower or Operating Lessee (as applicable)
must incur an extraordinary Operating Expense or Capital Expenditure not set
forth in the Approved Annual Budget (each, an “Extraordinary Expense”), then
Borrower or Operating Lessee (as applicable) shall promptly deliver to Lender a
reasonably detailed explanation of such proposed Extraordinary Expense for
Lender’s approval, which may be given or denied in Lender’s reasonable
discretion.

 

 -86- 

 

 

(g)          If requested by Lender, each of Borrower and Operating Lessee shall
provide Lender, promptly upon request, with any financial statements, financial,
statistical or operating information or other information as Lender shall
determine necessary or appropriate items required if the Securitization is
offered publicly pursuant to Regulation AB under the Securities Act, or the
Exchange Act, or any amendment, modification or replacement thereto) or required
by any other legal requirements, in each case, in connection with any private
placement memorandum, prospectus or other disclosure documents or materials or
any filing pursuant to the Exchange Act in connection with the Securitization.

 

(h)          Each of Borrower and Operating Lessee shall furnish to Lender,
within ten (10) Business Days after request (or as soon thereafter as may be
reasonably possible), such further detailed information with respect to the
operation of the applicable Properties and its financial affairs as may be
reasonably requested by Lender.

 

(i)          Each of Borrower and Operating Lessee shall furnish to Lender,
within ten (10) Business Days after Lender’s request (or as soon thereafter as
may be reasonably possible), financial and sales information from any tenant
designated by Lender (to the extent such financial and sales information is
required to be provided under the applicable Lease and same is received by
Borrower or Operating Lessee (as applicable) after request therefor).

 

(j)          Borrower will cause Guarantor to furnish to Lender (a) annually,
within ninety (90) days following the end of each Fiscal Year of Guarantor,
financial statements audited by an independent certified public accountant,
which shall include an annual balance sheet and profit and loss statement of
Guarantor, in the form reasonably required by Lender, and (b) quarterly, within
forty-five (45) days following the end of each calendar quarter, unaudited
financial statements of Guarantor, in the form reasonably required by Lender.

 

(k)          Each of Borrower and Operating Lessee shall furnish to Lender
prompt notice (containing reasonable detail) of any material changes in the
financial or physical condition of the applicable Property including, but not
limited to, any termination of a Major Lease and any termination or cancellation
of terrorism or other insurance required by the Loan Documents.

 

(l)          Any reports, statements or other information required to be
delivered under this Agreement shall be delivered (i) via email with report
files in electronic form of Microsoft Word, Microsoft Excel or .pdf format, and
(ii) if requested by Lender and within the capabilities of Borrower’s or
Operating Lessee’s (as applicable) data systems without change or modification
thereto, in electronic form and prepared using a Microsoft Word for Windows or
WordPerfect for Windows files (which files may be prepared using a spreadsheet
program and saved as word processing files). Each of Borrower and Operating
Lessee agrees that Lender may disclose information regarding the Properties,
Operating Lessee and Borrower that is provided to Lender pursuant to this
Section in connection with the Securitization to such parties requesting such
information in connection with such Securitization.

 

(m)          For avoidance of doubt, Operating Lessee shall not be required to
provide any information to Agent or Lender hereunder or under any other
provision of this Agreement with respect to any Borrower or any Property other
than the Viceroy Property.

 

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5.1.12         Business and Operations. Borrower and Operating Lessee will
continue to engage in the businesses presently conducted by it as and to the
extent the same are necessary for the ownership, maintenance, management and
operation of the Properties. Borrower and Operating Lessee will qualify to do
business and will remain in good standing under the laws of each jurisdiction as
and to the extent the same are required for the ownership, maintenance,
management and operation of the Properties.

 

5.1.13         Title to the Properties. Borrower will warrant and defend (a) the
fee or leasehold title (as applicable) to each Individual Property and every
part thereof, subject only to Liens permitted hereunder (including Permitted
Encumbrances) and (b) the validity and priority of the Liens of the Security
Instruments and Assignment of Leases, subject only to Liens permitted hereunder
(including Permitted Encumbrances), in each case against the claims of all
Persons whomsoever. Borrower shall reimburse Lender for any losses, costs,
damages or expenses (including reasonable attorneys’ fees and expenses) incurred
by Lender if an interest in any Individual Property, other than as permitted
hereunder, is claimed by another Person.

 

5.1.14         Costs of Enforcement. In the event (a) that any Security
Instrument encumbering any Individual Property is foreclosed in whole or in part
or that any Security Instrument is put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage
encumbering any Individual Property prior to or subsequent to any Security
Instrument covering any Individual Property in which proceeding Lender is made a
party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower, Operating Lessee, Operating Pledgor or
Guarantor or an assignment by Borrower, Operating Lessee, Operating Pledgor or
Guarantor for the benefit of its creditors, Borrower, on behalf of itself and
its successors or assigns, agrees to be chargeable with and to pay all costs of
collection and defense, including attorneys’ fees and expenses, incurred by
Lender or Borrower in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, together with all required
service or use taxes.

 

5.1.15         Estoppel Statement. (a) After request by Lender, Borrower shall
within ten (10) Business Days furnish Lender with a statement, duly acknowledged
and certified, setting forth, to Borrower’s knowledge, (i) the original
principal amount of the Loan, (ii) the unpaid principal amount of the Loan,
(iii) the Interest Rate of the Loan, (iv) the date installments of interest
and/or principal were last paid, (v) any offsets or defenses to the payment of
the Debt, if any, claimed by Borrower, and (vi) that the Notes, this Agreement,
the Security Instruments and the other Loan Documents are valid, legal and
binding obligations and have not been modified or if modified, giving
particulars of such modification.

 

(b)          Borrower and Operating Lessee shall use commercially reasonable
efforts to deliver to Lender upon request, tenant estoppel certificates from
each commercial Tenant leasing space at the Properties pursuant to a Major Lease
if required pursuant to such Lease in form and substance provided in connection
with the closing of the Loan, or consistent with the terms of the applicable
Lease, or otherwise reasonably satisfactory to Lender; provided that Borrower
and Operating Lessee shall not be required to deliver such certificates more
frequently than one (1) time in any calendar year.

 

 -88- 

 

 

(c)          Borrower shall use commercially reasonable efforts to deliver to
Lender upon request, estoppel certificates from the Board of each Condominium in
form and substance provided in connection with the closing of the Loan, or
consistent with the terms of the applicable Condominium Documents, or otherwise
reasonably satisfactory to Lender.

 

(d)          Intentionally omitted.

 

5.1.16         Loan Proceeds. Borrower shall use the proceeds of the Loan
received by it on the Closing Date only for the purposes set forth in
Section 2.1.4.

 

5.1.17         Performance by Borrower and Operating Lessee. Borrower and
Operating Lessee shall in a timely manner observe, perform and fulfill each and
every covenant, term and provision of each Loan Document executed and delivered
by, or applicable to, Borrower or Operating Lessee, and shall not enter into or
otherwise suffer or permit any amendment, waiver, supplement, termination or
other modification of any Loan Document executed and delivered by, or applicable
to, Borrower or Operating Lessee without the prior consent of Lender.

 

5.1.18         Confirmation of Representations. Borrower and Operating Lessee
shall deliver, in connection with any Securitization, (a) one or more Officer’s
Certificates certifying as to the accuracy of all representations made by
Borrower and Operating Lessee in the Loan Documents as of the date of the
closing of such Securitization in all relevant jurisdictions modified if
required to reflect such matters as of the date of such certificate in form and
substance reasonably satisfactory to Lender, and (b) certificates of the
relevant Governmental Authorities in all relevant jurisdictions indicating the
good standing and qualification of Borrower, Operating Lessee and Guarantor as
of the date of the Securitization.

 

5.1.19         Environmental Covenants. (a) Each of Borrower and Operating
Lessee covenants and agrees that: (i) all uses and operations on or of the
Properties, whether by Borrower, Operating Lessee or any other Person, shall be
in material compliance with all Environmental Laws and permits issued pursuant
thereto; (ii) there shall be no Releases of Hazardous Substances in, on, under
or from the Properties; (iii) there shall be no Hazardous Substances in, on, or
under the Properties, except those that are in compliance with all Environmental
Laws and with permits issued pursuant thereto (to the extent such permits are
required by Environmental Law); (iv) Borrower and Operating Lessee shall keep
the Properties free and clear of all liens and other encumbrances imposed
pursuant to any Environmental Law, whether due to any act or omission of
Borrower, Operating Lessee or any other Person (the “Environmental Liens”);
(v) Borrower and Operating Lessee shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to subsection (b) below,
including but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (vi) Borrower and Operating
Lessee shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
an Individual Property, pursuant to any reasonable written request of Lender
made in the event that Lender reasonably believes that an environmental hazard
exists on such Individual Property (including but not limited to sampling,
testing and analysis of soil, water, air, building materials and other materials
and substances whether solid, liquid or gas), and share with Lender the reports
and other results thereof, and Lender shall be entitled to rely on such reports
and other results thereof; (vii) Borrower and Operating Lessee shall, at its
sole cost and expense, comply with all reasonable written requests of Lender
made in the event that Lender reasonably believes that an environmental hazard
exists on any Individual Property (A) reasonably effectuate Remediation of any
condition (including but not limited to a Release of a Hazardous Substance) in,
on, under or from such Individual Property to the extent required by applicable
Environmental Law; (B) comply with any Environmental Law; (C) comply with any
directive from any Governmental Authority to the extent required to comply with
applicable Environmental Law; and (D) take any other reasonable action necessary
or appropriate for protection of human health or the environment;
(viii) Borrower and Operating Lessee shall not do or knowingly allow any Tenant
or other user of any Individual Property to do any act that materially increases
the dangers to human health or the environment, poses an unreasonable risk of
harm to any Person (whether on or off such Individual Property), is reasonably
likely to result in a Material Adverse Effect, or would result in a violation of
applicable Environmental Laws; and (ix) Borrower and Operating Lessee shall
immediately notify Lender in writing when Borrower or Operating Lessee becomes
aware of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards any Individual Property;
(B) any non-compliance with any Environmental Laws related in any way to any
Individual Property; (C) any actual or threatened Environmental Lien on an
Individual Property; (D) any required or proposed Remediation of environmental
conditions relating to its applicable Individual Property; and (E) any written
notice or other communication of which Borrower or Operating Lessee becomes
aware from any source whatsoever (including but not limited to a governmental
entity) asserting or identifying Hazardous Substances in violation of applicable
Environmental Law or as had or would reasonably be expected to result in
liability pursuant to any Environmental Law in connection with any Individual
Property, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Section.

 

 -89- 

 

 

(b)          In the event that Lender reasonably believes that an environmental
hazard exists on any Individual Property that may, in Lender’s sole discretion,
endanger any Tenants or other occupants of such Individual Property or its
guests or the general public or is reasonably likely to materially and adversely
affect the value of such Individual Property, upon reasonable notice from
Lender, Borrower and Operating Lessee shall, at its expense, promptly cause an
engineer or consultant reasonably satisfactory to Lender to conduct an
environmental assessment or audit (the scope of which shall be determined in
Lender’s sole and absolute discretion) and take any samples of soil, groundwater
or other water, air, or building materials or any other invasive testing
requested by Lender and promptly deliver the results of any such assessment,
audit, sampling or other testing; provided, however, if such results are not
delivered to Lender within a reasonable period, if an Event of Default has
occurred and is continuing, or if Lender reasonably believes that an
environmental hazard exists on such Individual Property that, in Lender’s sole
judgment, endangers any Tenant or other occupant of such Individual Property or
its guests or the general public or is reasonably likely to materially and
adversely affect the value of such Individual Property, upon reasonable notice
to Borrower and Operating Lessee, Lender and any other Person designated by
Lender, including but not limited to any receiver, any representative of a
governmental entity, and any environmental consultant, shall have the right, but
not the obligation, to enter upon such Individual Property at all reasonable
times to assess any and all aspects of the environmental condition of such
Individual Property and its use, including but not limited to conducting any
environmental assessment or audit (the scope of which shall be determined in
Lender’s sole and absolute discretion) and taking samples of soil, groundwater
or other water, air, or building materials, and reasonably conducting other
invasive testing. Borrower and Operating Lessee shall cooperate with and provide
Lender and any such Person designated by Lender with access to such Individual
Property.

 

 -90- 

 

 

(c)          Intentionally Omitted.

 

5.1.20         O&M Program. Each of Borrower and Operating Lessee hereby
represents and warrants that Borrower and Operating Lessee has delivered to
Lender on or prior to the Closing Date a true and complete copy of each O&M
Program for any Individual Property for which the applicable Environmental
Report recommended having an O&M Program, and (b) each of Borrower and Operating
Lessee has as of the date hereof complied in all respects with each O&M Program.
Each of Borrower and Operating Lessee hereby covenants and agrees that, during
the term of the Loan, including any extension or renewal thereof, Borrower and
Operating Lessee shall comply in all respects with the terms and conditions of
each O&M Program.

 

5.1.21         Leasing Matters. Any Major Leases with respect to any Individual
Property executed after the date hereof shall be subject to the prior written
approval by Lender, which approval shall not be unreasonably withheld. Upon
request, Borrower shall furnish Lender with executed copies of all Leases.
Security deposits of Tenants under all Leases shall be held in compliance in all
material respects with Legal Requirements and any provisions in Leases relating
thereto. Such security deposits may be commingled with other accounts of
Borrower if and to the extent permitted by applicable law, provided that
Borrower shall maintain books and records of sufficient detail to identify all
security deposits of Tenants separate and apart from any other payments received
from Tenants and shall provide such information to Lender upon written request
thereof. Upon the occurrence of a monetary Event of Default and acceleration of
the Loan, Borrower shall, upon Lender’s request and subject to applicable Legal
Requirements, deposit with Lender the security deposits of the Tenants (and any
interest theretofore earned on such security deposits and actually received by
Borrower), and any bonds or other instruments held by Borrower in lieu of cash
security, that Borrower had not returned to the applicable Tenants or applied in
accordance with the express terms of the applicable Lease (and failure to do so
shall constitute a misappropriation of funds). Except as otherwise expressly
provided in the Lease, all renewals of Leases and all proposed Leases shall
provide for rental rates comparable to existing local market rates and be
entered into as a result of arm’s-length negotiations upon commercially
reasonable terms and shall not contain any terms which would materially affect
Lender’s rights under the Loan Documents. All Leases executed after the date
hereof shall provide that they are subordinate to the Security Instruments
encumbering the applicable Individual Property and that the lessee agrees to
attorn to Lender or any purchaser at a sale by foreclosure or power of sale.
Borrower or Operating Lessee (as applicable) shall (a) observe and perform the
obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (b) enforce and may amend or terminate the terms, covenants
and conditions contained in the Leases upon the part of the lessee thereunder to
be observed or performed in a commercially reasonable manner and in a manner not
to impair the value of the Individual Property involved except that no
termination by Borrower or Operating Lessee (as applicable) or acceptance of
surrender by a tenant of any Leases shall be permitted unless by reason of a
tenant default and then only in a commercially reasonable manner to preserve and
protect the Individual Property; provided, however, that no such termination or
surrender of any Major Lease will be permitted without the prior written consent
of Lender; (c) not collect any of the rents more than one (1) month in advance
(other than first month’s Rent or security deposits); (d) not execute any other
assignment of lessor’s interest in the Leases or the Rents (except as
contemplated by the Loan Documents); and (e) not alter, modify or change the
terms of the Leases in a manner inconsistent with the provisions of the Loan
Documents. Lender shall have the right to require, at Borrower’s sole cost and
expense, each new Tenant under any Major Lease to execute and deliver to Lender
a subordination, non-disturbance of possession and attornment agreement in form,
content and manner of execution reasonably acceptable to Lender and such Tenant
and the applicable Individual Borrower shall use commercially reasonable efforts
to obtain the same from the applicable Tenant. Notwithstanding anything to the
contrary contained herein, neither Borrower nor Operating Lessee shall enter
into a lease of all or substantially all of any Individual Property without
Lender’s prior written consent. Notwithstanding anything to the contrary
contained herein, all new Leases and all amendments, modifications, extensions,
and renewals of existing Leases with tenants that are Affiliates of Borrower or
Operating Lessee shall be subject to the prior written consent of Lender. In the
event that (A) Borrower has delivered to Lender a written request for Lender’s
approval of a Lease or other leasing matter requiring Lender consent under this
Section 5.1.21 together with a summary of the business terms of such Lease or
other leasing matter and any documents or information required to be provided by
Borrower under the Loan Documents in connection with Lender’s review of the
proposed matter, by a method which provides evidence of delivery, (B) Lender has
failed to respond to such request within ten (10) Business Days after Lender’s
receipt of such request and supporting documents, and (C) Borrower has delivered
to Lender by such method a second copy of such request with such supporting
documents and information required above, then, if Lender has failed to respond
to such second request within five (5) Business Days after Lender’s receipt of
such second request and such supporting documents and information, such request
shall be deemed approved; provided that each such request included a legend
prominently displayed at the top of the first page thereof in solid capital
letters in bold face type of a font size not less than fourteen (14) as follows:
“WARNING: IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL
IN WRITING WITHIN [TEN (10)/FIVE (5)] BUSINESS DAYS AFTER YOUR RECEIPT, YOU WILL
BE DEEMED TO HAVE APPROVED THIS REQUEST.” Borrower shall reimburse Lender for
Lender’s reasonable out-of-pocket costs and expenses incurred by Lender in
connection with such leasing matter.

 

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5.1.22         Alterations. Subject to this Section 5.1.22, Borrower and
Operating Lessee shall obtain Lender’s prior consent to any alterations by
Borrower or Operating Lessee (as applicable) to any Improvements, which consent
shall not be unreasonably withheld, except with respect to alterations that may
have a Material Adverse Effect, in which case Lender’s consent shall be in
Lender’s sole discretion. Lender’s consent shall not be required in connection
with any alterations (i) to be undertaken by a Tenant and for which Borrower or
Operating Lessee does not have approval rights under the applicable Lease, (ii)
that will not have a Material Adverse Effect, or (iii) are performed in
connection with the Restoration of the an Individual Property after the
occurrence of a Casualty or Condemnation in accordance with the terms and
provisions of this Agreement. If the total unpaid amounts due and payable with
respect to alterations to the Improvements at an Individual Property or at the
Properties in the aggregate (other than such amounts to be paid or reimbursed by
Tenants under the Leases or otherwise undertaken pursuant to the express terms
of a Lease) shall at any time exceed five percent (5%) of the total principal
balance of the Loan and Mezzanine Loan (the “Threshold Amount”), then, in either
case, Borrower and Operating Lessee shall promptly deliver to Lender as security
for the payment of such amounts and as additional security for Borrower’s and
Operating Lessee’s obligations under the Loan Documents any of the following:
(A) cash, (B) U.S. Obligations, (C) other securities having a rating acceptable
to Lender and that, at Lender’s option, the applicable Approved Rating Agencies
have provided a Rating Agency Confirmation with respect to, or (D) an
irrevocable letter of credit (payable on sight draft only) issued by a financial
institution having a rating by S&P of not less than “A-1+” if the term of such
letter of credit is no longer than three (3) months or, if such term is in
excess of three (3) months, issued by a financial institution having a rating
that is acceptable to Lender and that, at Lender’s option, the applicable
Approved Rating Agencies have provided a Rating Agency Confirmation with respect
to. Such security shall be in an amount equal to the excess of the total unpaid
amounts with respect to alterations to the Improvements on the applicable
Individual Property (other than such amounts to be paid or reimbursed by Tenants
under the Leases or otherwise undertaken pursuant to the express terms of a
Lease) over the Threshold Amount and Lender may apply such security from time to
time at the option of Lender to pay for such alterations.

 

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5.1.23         Operation of Property. (a) Borrower and Operating Lessee shall
cause the Properties to be operated, in all material respects, in accordance
with the Management Agreement (or Replacement Management Agreement) as
applicable. In the event that the Management Agreement expires or is terminated,
Borrower or Operating Lessee shall promptly enter into a Replacement Management
Agreement with Manager or another Qualified Manager, as applicable.

 

(b)          Borrower and Operating Lessee shall: (i)  perform and/or observe,
in all material respects, all of the covenants and agreements required to be
performed and observed by it under the Management Agreement and do all things
reasonably necessary to preserve and to keep unimpaired its material rights
thereunder; (ii) promptly notify Lender of any material default under the
Management Agreement of which it is aware; (iii) promptly deliver to Lender a
copy of each financial statement, business plan, capital expenditures plan,
notice, report and estimate received by it under the Management Agreement; and
(iv) enforce the performance and observance in all material respects of all of
the covenants and agreements required to be performed and/or observed by Manager
under the Management Agreement, in a commercially reasonable manner.

 

(c)          With respect to the Properties self-managed by Borrower or its
Affiliates as of the Closing Date, the applicable Borrower shall not engage any
property manager with respect to any such Property or enter into any property
management agreement with respect to any such Property without Lender’s prior
written consent, which consent may not be unreasonably withheld or delayed but
may be conditioned upon, among other things, the execution and delivery of a
Replacement Management Agreement and amendments to the Loan Documents reasonably
requested by Lender to evidence the same. Notwithstanding the foregoing,
Borrower may engage a Qualified Manager with respect to such Properties without
the prior written consent of Lender, provided that Borrower shall provide to
Lender reasonable prior written notice of the identity of such Qualified Manager
and, with respect to clause (b) of the defined term “Qualified Manager,”
evidence reasonably required by Lender that such property manager is a Qualified
Manager.

 

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5.1.24         Embargoed Person. Each of Borrower and Operating Lessee has
performed and shall perform reasonable due diligence to insure that at all times
throughout the term of the Loan, including after giving effect to any Transfers
permitted pursuant to the Loan Documents, (a) none of the funds or other assets
of Borrower, Operating Lessee, Operating Pledgor and Guarantor constitute
property of, or are beneficially owned, directly or indirectly, by any Embargoed
Person; (b) no Embargoed Person has any interest of any nature whatsoever in
Borrower, Operating Lessee, Operating Pledgor or Guarantor, as applicable, with
the result that the investment in Borrower, Operating Lessee, Operating Pledgor
or Guarantor, as applicable (whether directly or indirectly), is prohibited by
law or the Loan is in violation of law; and (c) none of the funds of Borrower,
Operating Lessee, Operating Pledgor or Guarantor, as applicable, have been
derived from, or are the proceeds of, any unlawful activity, including money
laundering, terrorism or terrorism activities, with the result that the
investment in Borrower, Operating Lessee, Operating Pledgor or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the Loan is
in violation of law, or may cause any Individual Property to be subject to
forfeiture or seizure. Upon Lender’s request, Borrower, Operating Lessee,
Operating Pledgor and Guarantor shall deliver to Lender any certification or
other evidence as may be reasonably requested by Lender in its sole and absolute
discretion confirming the foregoing. Notwithstanding the foregoing, Borrower and
Operating Lessee in lieu of the foregoing shall comply with the requirements of
any applicable regulatory agency or other Governmental Authority with respect to
the representations, covenants and warranties in this Section 5.1.24 relating to
direct or indirect owners of Guarantor only (i.e. such limitation shall not be
applicable to the other parties covered by this Section 5.1.24).

 

5.1.25         Payment of Obligations. Borrower and Operating Lessee will pay
its obligations, including tax liabilities, that, if not paid, could result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) each of Borrower and Operating Lessee has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP, or (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

 

5.1.26         Taxes. Borrower will be treated as a partnership or a disregarded
entity for U.S. federal income tax purposes. Operating Lessee will be treated as
a corporation for U.S. federal income tax purposes. Borrower and Operating
Lessee will timely file or cause to be filed all federal income and other
material tax returns and reports required to be filed by it and will pay or
cause to be paid all federal income and other material taxes and related
liabilities required to be paid by it, except taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower or Operating
Lessee sets aside on its books adequate reserves in accordance with GAAP.
Borrower and Operating Lessee will not permit any Liens for Impositions to be
imposed on or with respect to any of its income or assets, other than Liens for
Impositions not yet due and payable and for which Borrower or Operating Lessee
sets aside on its books adequate reserves in accordance with GAAP.

 

5.1.27         Intentionally Omitted.

 

 -94- 

 

 

5.1.28         Changes in the Legal Requirements Regarding Taxation. If any
Legal Requirement or other law, order, requirement or regulation of any
Governmental Authority is enacted or adopted or amended after the date the Loan
is funded which imposes a tax, either directly or indirectly, on Borrower’s
obligations hereunder or under the Loan Documents, or Lender’s interest in the
Property, Borrower must pay such tax, with interest and penalties thereon, if
any. If Lender is advised by counsel chosen by it that the payment of such tax
or interest and penalties by Borrower or Operating Lessee would be unlawful or
taxable to Lender or unenforceable or provide the basis for a defense of usury,
then in any such event, Lender may, by written notice to Borrower and Operating
Lessee of not less than one hundred eighty (180) days, declare the Obligations
immediately due and payable without penalty or fee.

 

5.1.29         No Credits on Account of the Obligations. Neither Borrower nor
Operating Lessee will claim or demand or be entitled to any credit or credits on
account of the Obligations for any payment of Taxes assessed against the
Property and no deduction shall otherwise be made or claimed from the assessed
value of the Property for real estate tax purposes because of the Loan Documents
or the Obligations. If Legal Requirements or other laws, orders, requirements or
regulations require such claim, credit or deduction, Lender may, by written
notice to Borrower and Operating Lessee of not less than one hundred eighty
(180) days, declare the Obligations immediately due and payable without penalty
or fee.

 

5.1.30         Personal Property. Borrower and Operating Lessee shall cause all
of its personal property, fixtures, attachments and equipment delivered upon,
attached to or used in connection with the operation of the Property to always
be located at the Property and shall be kept free and clear of all Liens,
encumbrances and security interests, except Permitted Encumbrances.

 

5.1.31         Appraisals. Lender shall have the right to obtain a new or
updated appraisal of the Properties or any Individual Property from time to
time, provided, however, that, so long as no Event of Default has occurred and
is continuing, Lender shall do so not more often than once in every twelve (12)
month period. Borrower and Operating Lessee shall cooperate with Lender in this
regard and shall be provided a copy of any appraisals ordered by Lender,
provided that Borrower and Operating Lessee execute a release and any other
documentation reasonably required by Lender as a condition precedent to
obtaining a copy of the appraisal at Borrower’s sole cost and expense. If the
appraisal is obtained in connection with an Event of Default being outstanding,
Borrower shall pay for any such appraisal upon Lender’s request.

 

5.1.32         Intellectual Property. Borrower and Operating Lessee shall keep
and maintain all Intellectual Property currently registered in the name of
Borrower or Operating Lessee (as applicable) relating to the use or operation of
the Viceroy Property and all Intellectual Property (other than any Intellectual
Property used by Borrower or Operating Lessee pursuant to the applicable
Management Agreement) registered in the name of Borrower or Operating Lessee (as
applicable). Neither Borrower nor Operating Lessee shall transfer or let lapse
any such Intellectual Property without Lender’s prior consent unless such
transfer or lapse is in the ordinary course of business and would not reasonably
be expected to result in a Material Adverse Effect. Lender acknowledges that it
has no security interest in any Intellectual Property or right to use any of
Borrower’s or Operating Lessee’s (or any of their Affiliates) trade names or
trademarks in connection with the Loan (other than as set forth in the
applicable Assignment of Management Agreement).

 

 -95- 

 

 

5.1.33         Liquor Licenses. Borrower and Operating Lessee each covenants and
agrees that, in the event the Management Agreement for the Viceroy Property is
terminated, Borrower and Operating Lessee shall use good-faith efforts to cause
any liquor licenses held by Manager under such terminated Management Agreement
to be transitioned to a Person reasonably acceptable to Lender or continue to be
used in the operation of the Viceroy Property to the extent permitted by
applicable law. Borrower or Operating Lessee shall renew, or cause Manager to
renew, all liquor licenses for the Viceroy Property prior to their respective
expiration and shall provide evidence of same to Lender within ten (10) Business
Days after such renewal.

 

5.1.34         Ground Lease. (a) Borrower shall, at its sole cost and expense,
promptly and timely perform and observe all the material terms, covenants and
conditions required to be performed and observed by Borrower as lessee under the
Ground Lease (including, but not limited to, the payment of all rent, additional
rent, percentage rent and other charges required to be paid under the Ground
Lease).

 

(b)          If Borrower shall be in default beyond all applicable notice and
cure periods under the Ground Lease, then, subject to the terms of the Ground
Lease, Borrower shall grant Lender the right (but not the obligation), to cause
such default under the Ground Lease to be remedied and otherwise exercise any
and all rights of Borrower under the Ground Lease, as may be necessary to
prevent or cure any default provided such actions are necessary to protect
Lender’s interest under the Loan Documents, and Lender shall have the right to
enter all or any portion of the Property at such times and in such manner as
Lender deems reasonably necessary, to prevent or to cure any such default,
subject to the terms of the Ground Lease.

 

(c)          The actions or payments of Lender to cure any default by Borrower
under the Ground Lease shall not remove or waive, as between Borrower and
Lender, the default that occurred under this Agreement by virtue of the default
by Borrower under the Ground Lease. All sums expended by Lender to cure any such
default shall be paid by Borrower to Lender, upon demand, with interest on such
sum at the then applicable Interest Rate from the date such sum is expended to
and including the date the reimbursement payment is made to Lender. All such
indebtedness shall be deemed to be secured by the Security Instruments.

 

(d)          Borrower or Operating Lessee shall notify Lender in writing of the
occurrence of any material default by Ground Lessor of which Borrower or
Operating Lessee has knowledge promptly after Borrower becomes aware of the
same, and the receipt by Borrower of any notice from Ground Lessor under the
Ground Lease claiming the occurrence of any default by Borrower under the Ground
Lease. Borrower shall promptly deliver to Lender a copy of any such written
notice of default.

 

(e)          Within ten (10) days after receipt of written demand by Lender,
Borrower shall use reasonable efforts to obtain from Ground Lessor and furnish
to Lender the estoppel certificate of Ground Lessor stating (i) that the Ground
Lease is unmodified and in full force and effect, (ii) the date through which
rent has been paid, (iii) whether or not there are any defaults thereunder and
specifying the nature of such claimed defaults, if any, (iv) whether any fee
mortgages are in effect, (v) whether a right of first offer is in effect, (vi)
the current adjusted amounts for dollar amounts in the Ground Lease and (vii)
the amount of any security deposits.

 

 -96- 

 

 

(f)          Borrower shall promptly execute, acknowledge and deliver to Lender
such instruments as may be reasonably required to permit Lender to cure any
default under the Ground Lease or permit Lender to take such other action
required to enable Lender to cure or remedy the matter in default and preserve
the security interest of Lender under the Loan Documents with respect to the
Property. Borrower irrevocably appoints Lender as its true and lawful
attorney-in-fact to do, in its name or otherwise, after the occurrence of an
Event of Default for which Lender has accelerated the Loan, any and all acts and
to execute any and all documents that are necessary to preserve any rights of
Borrower under or with respect to the Ground Lease, including, without
limitation, the right to effectuate any extension or renewal of the Ground
Lease, or to preserve any rights of Borrower whatsoever in respect of any part
of the Ground Lease (and the above powers granted to Lender are coupled with an
interest and shall be irrevocable).

 

(g)          Notwithstanding anything to the contrary contained in this
Agreement with respect to the Ground Lease:

 

(i)          The Lien of the Security Instruments attaches to all of Borrower’s
rights and remedies at any time arising under or pursuant to Subsection 365(h)
of the Bankruptcy Code, including, without limitation, all of Borrower’s rights,
as debtor, to remain in possession of the Property.

 

(ii)         Borrower shall not, without Lender’s written consent, elect to
treat the Ground Lease as terminated under subsection 365(h)(l) of the
Bankruptcy Code. Any such election made without Lender’s prior written consent
shall be void.

 

(iii)        As security for the Debt, Borrower unconditionally assigns,
transfers and sets over to Lender all of Borrower’s claims and rights, if any,
to the payment of damages arising from any rejection by Ground Lessor under the
Ground Lease under the Bankruptcy Code. Lender and Borrower shall proceed
jointly or in the name of Borrower in respect of any claim, suit, action or
proceeding relating to the rejection of the Ground Lease, including, without
limitation, the right to file and prosecute any proofs of claim, complaints,
motions, applications, notices and other documents in any case in respect of
Ground Lessor under the Bankruptcy Code. This assignment constitutes a present,
irrevocable and unconditional assignment of the foregoing claims, rights and
remedies, and shall continue in effect until all of the Debt shall have been
satisfied and discharged in full. Any amounts received by Lender or Borrower as
damages arising out of the rejection of the Ground Lease as aforesaid shall be
applied to all out-of-pocket costs and expenses of Lender (including, without
limitation, reasonable attorney’s fees and costs) incurred in connection with
the exercise of any of its rights or remedies in accordance with the applicable
provisions of this Agreement.

 

(iv)        If, pursuant to subsection 365(h) of the Bankruptcy Code, Borrower
seeks to offset, against the rent reserved in the Ground Lease, the amount of
any damages caused by the nonperformance by Ground Lessor of any of its
obligations thereunder after the rejection by Ground Lessor of the Ground Lease
under the Bankruptcy Code, then Borrower shall not effect any offset of the
amounts so objected to by Lender. If Lender has failed to object as aforesaid
within ten (10) days after notice from Borrower in accordance with the first
sentence of this subsection, Borrower may proceed to offset the amounts set
forth in Borrower’s notice.

 

 -97- 

 

 

(v)         If any action, proceeding, motion or notice shall be commenced or
filed in respect of Ground Lessor of all or any part of the Property in
connection with any case under the Bankruptcy Code, Lender and Borrower shall
cooperatively conduct and control any such litigation with counsel agreed upon
between Borrower and Lender in connection with such litigation. Borrower shall,
upon demand, pay to Lender all costs and expenses (including reasonable
attorneys’ fees and costs) actually paid or actually incurred by Lender in
connection with the cooperative prosecution or conduct of any such proceedings.
All such costs and expenses shall be secured by the Lien of the Security
Instruments.

 

(vi)        Borrower shall promptly, after obtaining knowledge of such filing
notify Lender orally of any filing by or against Ground Lessor of a petition
under the Bankruptcy Code. Borrower shall thereafter promptly give written
notice of such filing to Lender, setting forth any material information
available to Borrower as to the date of such filing, the court in which such
petition was filed, and the relief sought in such filing. Borrower shall
promptly deliver to Lender any and all notices, summonses, pleadings,
applications and other documents received by Borrower in connection with any
such petition and any proceedings relating to such petition.

 

(vii)       if Lender, its nominee, designee, successor, or assignee acquires
title and/or rights of Borrower under the Ground Lease by reason of foreclosure
of the applicable Security Instruments, deed in lieu of foreclosure or
otherwise, such party shall (x) succeed to all of the rights of and benefits
accruing to Borrower under the Ground Lease, and (y) be entitled to exercise all
of the rights and benefits accruing to Borrower under the Ground Lease.

 

5.1.35         Master Lease. (a) Borrower shall, at its sole cost and expense,
promptly and timely perform and observe all the material terms, covenants and
conditions required to be performed and observed by Borrower as lessee under the
Master Lease (including, but not limited to, the payment of all rent, additional
rent and other charges required to be paid under the Master Lease).

 

(b)          If Borrower shall be in default beyond all applicable notice and
cure periods under the Master Lease, then, subject to the terms of the Master
Lease, Borrower shall grant Lender the right (but not the obligation), to cause
such default under the Master Lease to be remedied and otherwise exercise any
and all rights of Borrower under the Master Lease, as may be necessary to
prevent or cure any default provided such actions are necessary to protect
Lender’s interest under the Loan Documents, and Lender shall have the right to
enter all or any portion of the Property at such times and in such manner as
Lender deems reasonably necessary, to prevent or to cure any such default,
subject to the terms of the Master Lease.

 

(c)          The actions or payments of Lender to cure any default by Borrower
under the Master Lease shall not remove or waive, as between Borrower and
Lender, the default that occurred under this Agreement by virtue of the default
by Borrower under the Master Lease. All sums expended by Lender to cure any such
default shall be paid by Borrower to Lender, upon demand, with interest on such
sum at the then applicable Interest Rate from the date such sum is expended to
and including the date the reimbursement payment is made to Lender. All such
indebtedness shall be deemed to be secured by the Security Instruments.

 

 -98- 

 

 

(d)          Borrower shall notify Lender in writing of the occurrence of any
material default by Master Lessor of which Borrower has knowledge promptly after
Borrower becomes aware of the same, and the receipt by Borrower of any notice
from Master Lessor under the Master Lease claiming the occurrence of any default
by Borrower under the Master Lease. Borrower shall promptly deliver to Lender a
copy of any such written notice of default.

 

(e)          Within ten (10) days after receipt of written demand by Lender,
Borrower shall use reasonable efforts to obtain from Master Lessor and furnish
to Lender the estoppel certificate of Master Lessor stating (i) that the Master
Lease is in full force and effect, (ii) the date through which rent has been
paid, (iii) whether or not there are any defaults thereunder and specifying the
nature of such claimed defaults, if any and (iv) any other information that
Lender may reasonably request.

 

(f)          Borrower shall promptly execute, acknowledge and deliver to Lender
such instruments as may be reasonably required to permit Lender to cure any
default under the Master Lease or permit Lender to take such other action
required to enable Lender to cure or remedy the matter in default and preserve
the security interest of Lender under the Loan Documents with respect to the
Property. Borrower irrevocably appoints Lender as its true and lawful
attorney-in-fact to do, in its name or otherwise, after the occurrence of an
Event of Default for which Lender has accelerated the Loan, any and all acts and
to execute any and all documents that are necessary to preserve any rights of
Borrower under or with respect to the Master Lease, including, without
limitation, the right to effectuate any extension or renewal of the Master
Lease, or to preserve any rights of Borrower whatsoever in respect of any part
of the Master Lease (and the above powers granted to Lender are coupled with an
interest and shall be irrevocable).

 

(g)          Notwithstanding anything to the contrary contained in this
Agreement with respect to the Master Lease:

 

(i)          The Lien of the Security Instruments attaches to all of Borrower’s
rights and remedies at any time arising under or pursuant to Subsection 365(h)
of the Bankruptcy Code, including, without limitation, all of Borrower’s rights,
as debtor, to remain in possession of the Property.

 

(ii)         Borrower shall not, without Lender’s written consent, elect to
treat the Master Lease as terminated under subsection 365(h)(l) of the
Bankruptcy Code. Any such election made without Lender’s prior written consent
shall be void.

 

 -99- 

 

 

(iii)        As security for the Debt, Borrower unconditionally assigns,
transfers and sets over to Lender all of Borrower’s claims and rights, if any,
to the payment of damages arising from any rejection by Master Lessor under the
Master Lease under the Bankruptcy Code. Lender and Borrower shall proceed
jointly or in the name of Borrower in respect of any claim, suit, action or
proceeding relating to the rejection of the Master Lease, including, without
limitation, the right to file and prosecute any proofs of claim, complaints,
motions, applications, notices and other documents in any case in respect of
Master Lessor under the Bankruptcy Code. This assignment constitutes a present,
irrevocable and unconditional assignment of the foregoing claims, rights and
remedies, and shall continue in effect until all of the Debt shall have been
satisfied and discharged in full. Any amounts received by Lender or Borrower as
damages arising out of the rejection of the Master Lease as aforesaid shall be
applied to all out-of-pocket costs and expenses of Lender (including, without
limitation, attorney’s fees and costs) incurred in connection with the exercise
of any of its rights or remedies in accordance with the applicable provisions of
this Agreement.

 

(iv)        If, pursuant to subsection 365(h) of the Bankruptcy Code, Borrower
seeks to offset, against the rent reserved in the Master Lease, the amount of
any damages caused by the nonperformance by Master Lessor of any of its
obligations thereunder after the rejection by Master Lessor of the Master Lease
under the Bankruptcy Code, then Borrower shall not effect any offset of the
amounts so objected to by Lender. If Lender has failed to object as aforesaid
within ten (10) days after notice from Borrower in accordance with the first
sentence of this subsection, Borrower may proceed to offset the amounts set
forth in Borrower’s notice.

 

(v)         If any action, proceeding, motion or notice shall be commenced or
filed in respect of Master Lessor of all or any part of the Property in
connection with any case under the Bankruptcy Code, Lender and Borrower shall
cooperatively conduct and control any such litigation with counsel agreed upon
between Borrower and Lender in connection with such litigation. Borrower shall,
upon demand, pay to Lender all costs and expenses (including reasonable
attorneys’ fees and costs) actually paid or actually incurred by Lender in
connection with the cooperative prosecution or conduct of any such proceedings.
All such costs and expenses shall be secured by the Lien of the Security
Instruments.

 

(vi)        Borrower shall promptly, after obtaining knowledge of such filing
notify Lender orally of any filing by or against Master Lessor of a petition
under the Bankruptcy Code. Borrower shall thereafter promptly give written
notice of such filing to Lender, setting forth any information available to
Borrower as to the date of such filing, the court in which such petition was
filed, and the relief sought in such filing. Borrower shall promptly deliver to
Lender any and all notices, summonses, pleadings, applications and other
documents received by Borrower in connection with any such petition and any
proceedings relating to such petition.

 

(vii)       if Lender, its nominee, designee, successor, or assignee acquires
title and/or rights of Borrower under the Master Lease by reason of foreclosure
of the applicable Security Instruments, deed in lieu of foreclosure or
otherwise, such party shall (x) succeed to all of the rights of and benefits
accruing to Borrower under the Master Lease, and (y) be entitled to exercise all
of the rights and benefits accruing to Borrower under the Master Lease.

 

 -100- 

 

 

5.1.36         Operating Lease.

 

(a)          Borrower and Operating Lessee each represents, covenants and
warrants that it is the express intent of Borrower and Operating Lessee that the
Operating Lease constitute a lease under applicable real property laws and laws
governing bankruptcy, insolvency and creditors’ rights generally, and that the
sole interest of Operating Lessee in the Viceroy Property is as tenant under the
Operating Lease and the owner of certain tangible and intangible assets. In the
event that it shall be determined that the Operating Lease is not a lease under
applicable real property laws and laws governing bankruptcy, insolvency and
creditors’ rights generally, and that the interest of Operating Lessee in the
Viceroy Property is other than that of tenant under the Operating Lease,
Borrower and Operating Lessee each hereby covenants and agrees that it shall
cause Operating Lessee’s interest in the Viceroy Property, however
characterized, to continue to be subject and subordinate to the lien of the
Security Instruments on all the same terms and conditions as contained in the
Operating Lease and the Security Instruments.

 

(b)          Each of Borrower and Operating Lessee shall (i) promptly deliver to
Lender a copy of any written notice of default under the Operating Lease
received by such party; and (ii) promptly give notice to Lender of any notice
that Borrower receives which indicates that Operating Lessee is terminating the
Operating Lease or that Operating Lessee is otherwise discontinuing its
operation of the Viceroy Property.

 

(c)          Without Lender’s prior written consent until the Debt is paid in
full, neither Borrower nor Operating Lessee shall (a) surrender, terminate or
cancel the Operating Lease, (b) reduce or consent to the reduction of the term
of the Operating Lease to less than two (2) years beyond the Extended Maturity
Date of the Loan, or (c) modify, change, supplement, alter or amend any material
provision in the Operating Lease or any of Borrower’s or Operating Lessee’s
rights and remedies under the Operating Lease. Consent by Lender to one
amendment, change, agreement or modification shall not be deemed to be a waiver
of the right to require consent to other, future or successive amendments,
changes, agreements or modifications.

 

(d)          Neither Borrower nor Operating Lessee shall waive, excuse, condone
or in any way release or discharge the other party under the Operating Lease of
or from such party’s obligations, covenant and/or conditions under the Operating
Lease without the prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

(e)          Borrower and Operating Lessee hereby assigns to Lender, as further
security for the payment and performance of the Debt and observance of the
terms, covenants and conditions of this Agreement and the other Loan Documents,
all of the rights, privileges and prerogatives of Borrower, as landlord, and
Operating Lessee, as tenant, as applicable, under the Operating Lease to
surrender the leasehold estates created by the Operating Lease or to terminate,
cancel, modify, change, supplement, alter or amend the Operating Lease.
Notwithstanding the foregoing provisions, the foregoing rights of Lender shall
be exercisable by Lender only following, and during the continuance of, an Event
of Default. Any surrender of the leasehold estate created by the Operating Lease
or termination, cancellation, modification, change, supplement, alteration or
amendment of the Operating Lease other than in accordance with the terms of this
Section 5.1.36 shall be void and of no force or effect.

 

 -101- 

 

 

(f)          In the event of the bankruptcy, reorganization or insolvency of
Borrower or Operating Lessee, any attempt by Borrower or Operating Lessee to
surrender its leasehold estate, or any portion thereof, under the Operating
Lease, or any attempt under such circumstances by Borrower or Operating Lessee
to terminate, cancel or acquiesce in the rejection of the Operating Lease
without the consent of Lender shall be null and void. Borrower and Operating
Lessee each hereby expressly releases, assigns, relinquishes and surrenders unto
Lender all of its right, power and authority to terminate, cancel, acquiesce in
the rejection of, modify, change, supplement, alter or amend the Operating Lease
in any respect, either orally or in writing, in the event of the bankruptcy,
reorganization or insolvency of Borrower or Operating Lessee, and any attempt on
the part of Borrower or Operating Lessee to exercise any such right without the
consent of Lender shall be null and void. Each of Borrower and Operating Lessee
hereby irrevocably appoints Lender as its true and lawful attorney-in-fact which
power of attorney shall be coupled with an interest, for the purpose of
exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any
successor to such Section (i) to obtain for the benefit of Borrower or Operating
Lessee or Lender a right to possession or statutory term of years derived from
or incident to the Operating Lease, or (ii) to treat the Operating Lease as
terminated.

 

(g)          Notwithstanding the rejection of the Operating Lease by Borrower,
as debtor in possession, or by a trustee for Borrower, pursuant to Section 365
of the Bankruptcy Code, neither the lien of the Security Instruments nor
Lender’s rights with respect to the Operating Lease shall be affected or
impaired by reason thereof. In the event that Operating Lessee shall remain in
possession of the Property following a rejection of the Operating Lease by
Borrower, as debtor in possession, or by a trustee for Borrower, Operating
Lessee agrees that it shall not exercise any right of offset against the rent
payable under the Operating Lease, pursuant to Section 365(h)(2) of the
Bankruptcy Code, without the prior consent of Lender thereto.

 

(h)          During the existence of an Event of Default, Lender shall have the
right, but shall be under no obligation, to exercise on behalf of Borrower or
Operating Lessee any renewal or extension options under the Operating Lease if
Borrower and/or Operating Lessee shall fail to exercise any such options. During
the existence of an Event of Default, Operating Lessee hereby absolutely and
unconditionally assigns and grants to Lender Operating Lessee’s irrevocable
power of attorney, coupled with an interest, to exercise any renewal or
extension options under the Operating Lease on behalf of and in the name of
Operating Lessee following Operating Lessee’s failure to do so, and to take at
any time any or all other actions on behalf of Operating Lessee required for the
preservation of the Operating Lease. Borrower hereby absolutely and
unconditionally assigns and grants to Lender Borrower’s irrevocable power of
attorney, coupled with an interest, to exercise any renewal or extension options
under the Operating Lease on behalf of and in the name of Borrower following
Borrower’s failure to do so, and to take at any time following the occurrence
and during the existence of an Event of Default any or all other actions on
behalf of Borrower required for the preservation of the Operating Lease.

 

(i)          In connection with any Securitization or other sale, assignment,
transfer or participation of all or any portion of the Loan and otherwise no
more often than one time per calendar year, Operating Lessee and Borrower shall
within fifteen (15) days after request by Lender, execute, acknowledge and
deliver a statement certifying the items listed in subsections (a) through (g)
of this Section 5.1.36, with such exceptions as shall be necessary to cause such
statement to be factually correct in all material respects.

 

 -102- 

 

 

(j)          Borrower and Operating Lessee shall, from time to time, deliver to
Lender such certificates of estoppel with respect to compliance by Borrower and
Operating Lessee with the terms of the Operating Lease as may be reasonably
requested by Lender.

 

5.1.37         Condominiums. With respect to each Condominium, Borrower hereby
covenants as follows:

 

(a)          Borrower shall promptly pay (or cause to be paid) all Common
Charges imposed on Borrower pursuant to the Condominium Documents when the same
become due and payable with respect to the Units owned by Borrower. Borrower
shall deliver to Lender, promptly upon Lender’s request, evidence satisfactory
to Lender that the Common Charges have been so paid or are not then delinquent
with respect to the Units owned by Borrower. Borrower shall promptly notify
Lender of (I) any adjustments made to the amount of Common Charges due under the
Condominium Documents and (II) the imposition of any additional Common Charges
under the Condominium Documents.

 

(b)          Borrower acknowledges and agrees that the Units owned by Borrower
are within the definition of “Property” under this Agreement and, as such,
Borrower shall cause the same to be insured in accordance with Article 6 of this
Agreement. Any Net Proceeds of such insurance or any Net Proceeds otherwise
obtained with respect to any Condemnation of the Individual Property subject to
the Condominium Documents shall be held and applied by Lender in accordance with
the applicable terms and conditions of this Agreement.

 

(c)          Borrower hereby covenants and agrees to provide to the Board on the
Closing Date a copy of the applicable Security Instruments with respect to the
Individual Property subject to the Condominium Documents, the name and address
of Lender and Servicer, and a general description of the Loan.

 

(d)          Borrower shall observe and perform (and where legally possible,
cause the Board to observe and perform) each and every term to be observed or
performed by Borrower and/or the Board in all material respects pursuant to the
Condominium Documents. Borrower shall not waive, excuse, condone or in any way
release or discharge any party to the Condominium Documents of or from such
party’s obligations, covenant and/or conditions under the Condominium Documents
without the prior written consent of Lender, which consent shall not be
unreasonably withheld, delayed or conditioned.

 

(e)          Borrower shall obtain resignation letters from each voting member
of the Board and any officers of the Condominium appointed by Borrower to be
held by Lender in escrow and submitted upon the occurrence and continuance of an
Event of Default and Borrower shall obtain the agreement of the Board and the
officers of the Condominium to have Lender appoint each voting member of the
Board upon the occurrence and during the continuance of an Event of Default.

 

 -103- 

 

 

(f)          Borrower shall, and shall use commercially reasonable efforts to
cause the Board to, (i) maintain the Condominium and the Units in good condition
and repair, (ii) promptly comply with all Legal Requirements applicable to the
Condominium and the Units, (iii) subject to the Condominium Documents, promptly
repair, replace or rebuild any part of the Condominium and the Units which may
be damaged or destroyed by any Casualty or which may be affected by any
Condemnation and Borrower shall not in such event vote to not repair, restore or
rebuild the Condominium without the prior written consent of Lender (not to be
unreasonably withheld, conditioned or delayed), and (iv) subject to the
Condominium Documents, complete and pay for, within a reasonable time, any
structure at any time in the process of construction or repair on the
Condominium and the Units.

 

(g)          Without the prior written consent of Lender, which consent shall
not be unreasonably withheld, delayed or conditioned, Borrower shall not permit
(to the extent Borrower has the ability to control the same) any of the terms or
provisions of the Condominium Documents to be modified or amended in any manner
or permit the Condominium to be terminated, withdrawn from a condominium regime,
partitioned, subdivided, expanded or otherwise modified. Consent by Lender to
one amendment, change, agreement or modification shall not be deemed to be a
waiver of the right to require consent to other, future or successive
amendments, changes, agreements or modifications.

 

(h)          Borrower shall use commercially reasonable efforts to cause the
Board to allow Lender to examine the books, records and receipts of the
Condominium upon ten (10) days’ prior written notice to the Borrower.

 

(i)          Borrower shall promptly deliver to Lender a true and correct copy
of all notices of default received by Borrower with respect to any obligations
or duty of Borrower under the Condominium Documents. Borrower shall deliver to
Lender each budget of the Condominium promptly after receipt thereof. Lender
shall have the right, but not the obligation, to cure any default by Borrower
under the Condominium Documents and Borrower shall use commercially reasonable
efforts to cause the Board to provide Lender (i) forty-five (45) days to cure
any monetary default and ninety (90) days to cure any non-monetary default, (ii)
in the event that any such default cannot be cured by the payment of money or
within such ninety (90) day period, such reasonable time as may be necessary to
cure the default so long as Lender diligently pursues such cure to completion
and continues to perform any monetary obligations of Borrower to the Board, and
(iii) in the event that such default is incapable of cure by Lender, such time
as may be required for Lender to institute foreclosure of the applicable
Security Instruments with respect to the Individual Property subject to the
Condominium and/or otherwise enforce Lender’s rights and remedies under this
Agreement, the Security Instruments and the other Loan Documents and prosecute
such foreclosure and/or enforcement to conclusion.

 

(j)          To the extent that any approval rights, consent rights or other
rights or privileges are granted to a mortgagee in the Condominium Documents,
then such approval rights, consent rights or other rights, protections or
privileges shall be deemed to be contained in this Agreement.

 

 -104- 

 

 

(k)          Lender shall have the rights and privileges which Borrower has as
though Lender were in fact the owner of the Units owned by Borrower and as if,
where applicable, it were a “Declarant” under the Condominium Documents, and as
if, where applicable, it were a member of the Board elected by Borrower, which
rights and privileges shall include, without limitation, all voting rights
accruing to Borrower (and the members of the Board elected by Borrower) under
the terms of the Condominium Documents. Upon the occurrence and continuance of
an Event of Default, Borrower hereby grants to Lender, subject to the terms of
the Condominium Documents, the right to vote in place of Borrower (if and to the
extent Borrower has a right to vote) and may exercise any and all of the rights
and privileges of Borrower. Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to vote as Borrower’s proxy and to
act with respect to all of said rights so long as such Event of Default
continues hereunder or under any other Loan Documents and Lender has accelerated
the Loan. Written notice from Lender to the Board shall be deemed conclusive as
to the existence of such Event of Default and as to Lender’s rights and
privileges under this Agreement. Notwithstanding anything contained herein to
the contrary, nothing contained herein or otherwise shall render Lender liable
for any Common Charges.

 

(l)          The Board and the Condominium are not a party to any loan, credit
agreement or other arrangement for any extension of credit, whether funded or to
be funded. Borrower shall not, without Lender’s prior written consent, permit
the Board and/or the Condominium to incur any indebtedness or to encumber the
Condominium in connection therewith (other than the Security Instruments granted
by Borrower to Lender).

 

(m)          In addition to Lender’s consent rights as specified in this Section
5.1.37, Borrower shall not exercise any other approval, consent or voting right
to which it is entitled under the Condominium Documents without obtaining
Lender’s prior written consent (which consent shall not be unreasonably withheld
or delayed).

 

(n)          Borrower shall (and shall cause the members of the Board elected by
Borrower to) attend each duly called meeting or special meeting of the Board.
Lender shall have the right to participate in any arbitration proceeding
instituted in accordance with the provisions of the Condominium Documents.

 

(o)          Borrower acknowledges and agrees that any management agreement with
respect to the Condominium and/or the Units shall be required to be a Management
Agreement (as defined herein) to the extent Borrower has the ability to control
the Board or the Condominium and shall be subject to the terms and conditions of
this Agreement and the other Loan Documents.

 

5.1.38         Collective Bargaining Agreement.

 

(a)          Borrower and Operating Lessee shall timely comply, and, to the
extent that it has authority to do so, shall require the Manager of the Viceroy
Property (the “Viceroy Manager”) to comply, in all material respects, with all
Employment Related Laws and Obligations as the same relate to the Viceroy
Property.

 

 -105- 

 

 

(b)          Borrower and Operating Lessee shall comply, and, to the extent that
it has authority to do so, shall require the Viceroy Manager to comply, in all
material respects with the collective bargaining agreement set forth on Schedule
X attached hereto with respect to the Viceroy Property; provided, however, that,
neither Borrower nor Operating Lessee may take such actions or give consent for
the Viceroy Manager to take such actions that would trigger multiemployer
pension plan withdrawal liability to the CBA Multiemployer Plans under Title IV
of ERISA without Lender’s consent.  To the extent that such liability applies,
Borrower and Operating Lessee shall pay or, to the extent that it has authority
to do so, require the Viceroy Manager to pay, its portion of any such liability
in full in accordance with the provisions of ERISA, the collective bargaining
agreement set forth on Schedule X attached hereto, the CBA Multiemployer Plans
and any rules, regulations and by-laws established by such plans.  Borrower and
Operating Lessee shall notify Lender of the occurrence of any material default
or the occurrence of any condition which, but for the passage of time or the
giving of notice, could result in a material default under the terms of the
collective bargaining agreement.

 

(c)          Borrower and Operating Lessee shall promptly notify Lender in the
event Borrower, Operating Lessee, the Viceroy Manager or any of their respective
Affiliates receives written notice from a CBA Multiemployer Plan that it will be
the subject of an audit by the CBA Multiemployer Plan. In the event Borrower,
Operating Lessee or the Viceroy Manager fails to timely pay its obligations
under the CBA Multiemployer Plans, Borrower and Operating Lessee shall
continually provide Lender with up to date written information regarding
Borrower’s, Operating Lessee’s or the Viceroy Manager’s actions to remedy any
such failure.

 

(d)          Promptly upon Borrower’s or Operating Lessee’s receipt of same,
Borrower or Operating Lessee (as applicable) shall provide Lender with copies of
the following: (i) all notices from the CBA Multiemployer Plan to Borrower,
Operating Lessee or the Viceroy Manager, (ii) notices from the applicable CBA
Multiemployer Plan to Borrower, Operating Lessee or the Viceroy Manager stating
that such CBA Multiemployer Plan is determined to be in critical or endangered
status, (iii) notices and demands from the CBA Multiemployer Plans to Borrower,
Operating Lessee or the Viceroy Manager regarding actual or potential withdrawal
liability under any such CBA Multiemployer Plan, and (iv) written requests to
the CBA Multiemployer Plans from Borrower, Operating Lessee or the Viceroy
Manager for estimates of potential or actual withdrawal liability under such CBA
Multiemployer Plans along with copies of the actual estimates when received by
Borrower, Operating Lessee or the Viceroy Manager.

 

5.1.39         Required Repairs and Environmental Remediation.

 

(a)          Borrower or Operating Lessee (as applicable) shall perform the
repairs and environmental remediation at the Properties, as more particularly
set forth in the Property Condition Reports and the Environmental Reports set
forth on Schedule XI attached hereto, as delivered to Lender on or prior to the
Closing Date (such repairs and environmental remediation hereinafter referred to
as “Required Repairs”). Borrower or Operating Lessee (as applicable) shall
complete the Required Repairs on or before the required deadline for each repair
as set forth on Schedule XII attached hereto, provided that, with respect to
item numbers 1 and 3-6 set forth on Schedule XII attached hereto, in the event
that any such repair cannot be completed on or before the applicable deadline,
Lender shall extend such deadline for such reasonable time as may be necessary
to complete the repair so long as Borrower or Operating Lessee (as applicable)
diligently pursues such repair to completion. With respect to item numbers 1 and
6 set forth on Schedule XII attached hereto, to the extent any Tenant is
responsible for such repairs under the applicable Lease with Borrower, Borrower
shall give notice of the repairs to be completed to the applicable Tenant and
shall use commercially reasonable efforts to cause such Tenant to complete the
repairs on or before the required deadline for such repair as set forth on
Schedule XII attached hereto; provided, however, that Borrower shall be required
to complete such repairs to the extent the applicable Tenant fails to do so.
With respect to item numbers 2 and 5 set forth on Schedule XII attached hereto,
to the extent any Board or other Unit owner is responsible for such repairs
under the applicable Condominium Documents, Borrower shall give notice to the
Board of the repairs to be completed and shall use commercially reasonable
efforts to cause the Board (or cause the Board to cause the applicable Unit
owners) to complete the repairs on or before the required deadline for such
repair as set forth on Schedule XII attached hereto. It shall be an Event of
Default under this Agreement if Borrower or Operating Lessee (as applicable)
does not complete the Required Repairs at the applicable Individual Property by
the required deadline for each repair as set forth on Schedule XII attached
hereto (as may be extended pursuant to this clause (a)), other than with respect
to item numbers 2 and 5 set forth on Schedule XII attached hereto to the extent
Borrower shall have given notice to the Board of the repairs to be completed and
shall have used commercially reasonable efforts to cause the Board (or cause the
Board to cause the applicable Unit owners) to complete the repairs on or before
the required deadline for such repair.

 

 -106- 

 

 

(b)          Upon completion of the Required Repairs on or prior to the required
deadline (as may be extended pursuant to clause (a) above), Lender shall have
received (i) an Officer’s Certificate stating that all Required Repairs at the
applicable Individual Property have been completed in good and workmanlike
manner and in accordance with all applicable federal, state and local laws,
rules and regulations, including, without limitation, Environmental Law, such
Officer’s Certificate to be accompanied by a copy of any license, permit or
other approval by any Governmental Authority required to commence and/or
complete the Required Repairs, (ii) at Lender’s option, a title search for such
Individual Property indicating that such Individual Property is free from all
liens, claims and other encumbrances not previously approved by Lender, and
(iii) such other evidence as Lender shall reasonably request that the Required
Repairs at such Individual Property have been completed and paid in full.

 

Section 5.2           Negative Covenants. From the date hereof until payment and
performance in full of the Debt or the earlier release of the Liens of the
Security Instruments encumbering the Properties in accordance with the terms of
this Agreement and the other Loan Documents, each of Borrower and, solely with
respect to the Viceroy Property, Operating Lessee covenants and agrees with
Lender that it will not do, directly or indirectly, any of the following with
respect to its applicable Individual Property:

 

5.2.1           Operation of Property. (a) No Individual Borrower nor Operating
Lessee shall, without Lender’s prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed), to the extent such Borrower’s or
Operating Lessee’s consent is required: (i) surrender, terminate, cancel, amend
or modify the applicable Management Agreement; provided, that each Individual
Borrower or Operating Lessee may, without Lender’s consent, replace the Manager
applicable to its Individual Property so long as the replacement manager is a
Qualified Manager pursuant to a Replacement Management Agreement and provided,
further, that any Qualified Manager with respect to the Viceroy Hotel shall have
all the appropriate hospitality and liquor licenses and be in compliance with
all applicable Legal Requirements at or prior to the time such Replacement
Management Agreement is entered into and Borrower and Operating Lessee shall
take any other actions required to ensure continuous operation of the Viceroy
Property as a hotel; (ii) reduce or consent to the reduction of the term of the
Management Agreement; (iii) increase or consent to the increase of the amount of
any charges under the Management Agreement; or (iv) otherwise modify, change,
supplement, alter or amend, or waive or release any of its rights and remedies
under, the Management Agreement in any material respect.

 

 -107- 

 

 

(b)          Following the occurrence and during the continuance of an Event of
Default, neither Borrower nor Operating Lessee shall exercise any rights, make
any decisions, grant any approvals or otherwise take any action under the
Management Agreement without the prior consent of Lender, which consent may be
withheld in Lender’s sole discretion.

 

5.2.2           Liens. No Individual Borrower nor Operating Lessee shall create,
incur, assume or suffer to exist any Lien on any portion of any Individual
Property or permit any such action to be taken, except for Permitted
Encumbrances and subject to the contest rights in Section 5.1.2 hereof.

 

5.2.3           Dissolution. No Individual Borrower nor Operating Lessee shall
(a) engage in any dissolution, liquidation or consolidation or merger with or
into any other business entity except as expressly permitted in the Loan
Documents, (b) engage in any business activity not related to the ownership and
operation of the applicable Individual Property, (c) transfer, lease or sell, in
one transaction or any combination of transactions, the assets or all or
substantially all of the properties or assets of such Borrower except to the
extent permitted by the Loan Documents, or (d) modify, amend, waive or terminate
its organizational documents or its qualification and good standing in any
jurisdiction, in each case, without obtaining the prior written consent of
Lender.

 

5.2.4           Change in Business. No Individual Borrower nor Operating Lessee
shall enter into any line of business other than the ownership and operation of
the applicable Individual Property, or make any material change in the scope or
nature of its business objectives, purposes or operations, or undertake or
participate in activities other than the continuance of its present business.
Nothing contained in this Section 5.2.4 is intended to expand the rights of
Borrower contained in Section 5.2.10(d).

 

5.2.5           Debt Cancellation. No Individual Borrower nor Operating Lessee
shall cancel or otherwise forgive or release any claim or debt (other than
termination of Leases in accordance herewith) owed to Borrower or Operating
Lessee by any Person, except for adequate consideration and in the ordinary
course of Borrower’s or Operating Lessee’s business.

 

5.2.6           Zoning. No Individual Borrower nor Operating Lessee shall
initiate or consent to any zoning reclassification of any portion of its
applicable Individual Property or seek any variance under any existing zoning
ordinance or use or permit the use of any portion of any Individual Property in
any manner that could result in such use becoming a non-conforming use under any
zoning ordinance or any other applicable land use law, rule or regulation,
without the prior consent of Lender.

 

5.2.7           No Joint Assessment. No Individual Borrower nor Operating Lessee
shall suffer, permit or initiate the joint assessment of its Individual Property
(a) with any other real property constituting a tax lot separate from such
Individual Property, and (b) which constitutes real property with any portion of
such Individual Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to such real
property portion of such Individual Property.

 

 -108- 

 

 

5.2.8           Principal Place of Business and Organization. No Individual
Borrower nor Operating Lessee will cause or permit any change to be made in its
name, identity (including its trade name or names), or its corporate or
partnership or other structure unless it shall have first notified Lender in
writing of such change at least thirty (30) days prior to the effective date of
such change, and shall have first taken all reasonable action required by Lender
for the purpose of perfecting or protecting the lien and security interests of
Lender pursuant to this Agreement, and the other Loan Documents and, in the case
of a change in its structure, without first obtaining the prior written consent
of Lender, which consent may be given or denied in Lender’s sole discretion.
Upon Lender’s request, each Borrower and Operating Lessee (as applicable) shall,
at its sole cost and expense, execute and deliver additional security agreements
and other instruments which may be necessary to effectively evidence or perfect
Lender’s security interest in the applicable Individual Property as a result of
such change. Each Borrower’s and Operating Lessee’s principal place of business
and chief executive office, and the place where Borrower and Operating Lessee
keeps its books and records, including recorded data of any kind or nature,
regardless of the medium or recording, including software, writings, plans,
specifications and schematics, has been for the preceding four months (or, if
less, the entire period of the existence of Borrower and Operating Lessee) and
will continue to be the address of Borrower or Operating Lessee set forth at the
introductory paragraph of this Agreement (unless Borrower or Operating Lessee
(as applicable) notifies Lender in writing at least thirty (30) days prior to
the date of such change). Each Borrower and Operating Lessee shall promptly
notify Lender of any change in its organizational identification number. If each
Borrower or Operating Lessee does not now have an organizational identification
number and later obtains one, it shall promptly notify Lender of such
organizational identification number.

 

5.2.9           ERISA. (a) None of Borrower, Operating Lessee or Guarantor shall
engage in any transaction which would cause any obligation, or action taken or
to be taken, hereunder (including but not limited to the exercise by Lender of
any of its rights under the Notes, this Agreement or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA or Section 4975 of the Code or Similar Law.

 

(b)          Each of Borrower, Guarantor and Operating Lessee further covenants
and agrees to deliver to Lender such certifications or other evidence from time
to time throughout the term of the Loan, as requested by Lender in its sole
discretion, that (A) none of Borrower, Operating Lessee or Guarantor is subject
to any state statute regulating investment of, or fiduciary obligations with
respect to governmental plans which is a Similar Law and (B) with respect to
each of Borrower, Operating Lessee and Guarantor, one or more of the following
circumstances is true:

 

(i)          Equity interests therein are publicly offered securities, within
the meaning of 29 C.F.R. §2510.3-101(b)(2) as modified by Section 3 (42) of
ERISA;

 

 -109- 

 

 

(ii)         Less than twenty-five percent (25%) of each outstanding class of
equity interests therein are held by “benefit plan investors” within the meaning
of 29 C.F.R. §2510.3-101(f)(2), as modified by Section 3(42) of ERISA; or

 

(iii)        Such Person qualifies as an “operating company” or a “real estate
operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

 

(c)          Each of Borrower, Operating Lessee and Guarantor will fund or cause
to be funded each Plan established or maintained thereby, or by any ERISA
Affiliate thereof, as the case may be, so that there is never a failure to
satisfy the minimum funding standards, within the meaning of Sections 412 or 430
of the Code or Section 302 of ERISA (whether or not such standards are waived)
with respect to such Plans. As soon as possible and in any event within ten (10)
days after the Borrower, Guarantor or Operating Lessee knows that any ERISA
Event has occurred with respect to any Plan, Lender will be provided with a
statement, signed by an Authorized Representative of Borrower, Operating Lessee
and/or the Guarantor, describing said ERISA Event and the action which the
Borrower, Operating Lessee and/or the Guarantor, or an ERISA Affiliate thereof,
proposes to take with respect thereto.

 

5.2.10         Transfers. (a) Each Borrower and Operating Lessee acknowledges
that Lender has examined and relied on the experience of Borrower, Operating
Lessee and its respective stockholders, general partners, members, principals
and (if Borrower or Operating Lessee is a trust) beneficial owners in owning and
operating properties such as the Properties in agreeing to make the Loan, and
will continue to rely on the same as a means of maintaining the value of the
Properties as security for repayment of the Debt and the performance of the
obligations contained in the Loan Documents. Each Borrower and Operating Lessee
acknowledges that Lender has a valid interest in maintaining the value of the
Properties so as to ensure that, should Borrower default in the repayment of the
Debt or should Borrower or Operating Lessee default in the performance of the
obligations contained in the Loan Documents, Lender can recover the Debt by a
sale of the Properties.

 

(b)          Without the prior written consent of Lender and except to the
extent otherwise expressly set forth in this Section 5.2.10, no Individual
Borrower or Operating Lessee shall, nor shall such party permit any Restricted
Party to, do any of the following (individually or collectively, a “Transfer”),
(i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant
options with respect to, or otherwise transfer or dispose of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) any Individual Property or any
part thereof or any legal or beneficial interest therein or (ii) permit a Sale
or Pledge of an interest in any Restricted Party, other than pursuant to Leases
of space in the Improvements to tenants in accordance with the provisions of
Section 5.1.21, the Mezzanine Loan or the Pledge Agreement.

 

 -110- 

 

 

(c)          A Transfer shall include, but not be limited to, (i) an installment
sales agreement wherein Borrower or Operating Lessee agrees to sell one or more
Individual Properties or any part thereof for a price to be paid in
installments; (ii) with the exception of the Operating Lease, an agreement by
Borrower or Operating Lessee leasing all or a substantial part of any Individual
Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower’s or Operating Lessee’s right, title and interest in and to any Leases
or any Rents; (iii) if a Restricted Party is a corporation, any merger,
consolidation or Sale or Pledge of such corporation’s stock or the creation or
issuance of new stock; (iv) if a Restricted Party is a limited or general
partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general partner or any profits or proceeds
relating to such partnership interest, or the Sale or Pledge of limited
partnership interests or any profits or proceeds relating to such limited
partnership interest or the creation or issuance of new limited partnership
interests; (v) if a Restricted Party is a limited liability company, any merger
or consolidation or the change, removal, resignation or addition of a managing
member or non-member manager (or if no managing member, any member) or the Sale
or Pledge of the membership interest of a managing member (or if no managing
member, any member) or any profits or proceeds relating to such membership
interest, or the Sale or Pledge of non-managing membership interests or the
creation or issuance of new non-managing membership interests; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; (vii) the removal or
the resignation of the Manager (including, without limitation, an Affiliated
Manager) other than in accordance with Section 5.1.23 hereof; (viii) the pledge
by Mezzanine Borrower of its interests in Borrower to secure the Mezzanine Loan
in accordance with the Mezzanine Loan Documents; and (ix) if Borrower enters
into, or the Property is subjected to, any PACE Loan.

 

(d)          Notwithstanding the provisions of this Section 5.2.10, provided
that no Event of Default shall have occurred and be continuing, Lender’s consent
shall not be required in connection with one or a series of Transfers, of not
more than forty-nine percent (49%) of the direct or indirect interests (as the
case may be) in a Restricted Party; provided, however, that, in the case of each
such Transfer, (i) no such Transfer shall result in the change of Control in a
Borrower, Operating Lessee, Operating Pledgor or Guarantor, (ii) the Properties
shall be managed by a Qualified Manager pursuant to a the Management Agreement
or a Replacement Management Agreement, (iii) if, as a result of the consummation
of such Transfer, the organizational chart of Borrower attached hereto as
Schedule V would no longer be accurate, Borrower shall deliver to Lender an
updated organizational chart, together with an Officer’s Certificate, certifying
that such updated organizational chart is true, correct and complete, (iv) in
the event of any Transfer resulting in any Person and its Affiliates that did
not own in the aggregate more than twenty percent (20%) of the direct or
indirect interests in Borrower and Operating Lessee prior to such transfer,
owning in excess of twenty percent (20%) of the ownership interest in Borrower
and Operating Lessee, Borrower and Operating Lessee shall provide to Lender, not
less than ten (10) Business Days prior to such transfer, the name and identity
of each proposed transferee, together with the names of its controlling
principals, the social security number or employee identification number of such
transferee and controlling principals, and such transferee’s and controlling
principal’s home address or principal place of business, and home or business
telephone number and (A) the proposed transferee must satisfy Lender’s then
current “know your customer” standards and (B) Borrower shall have provided to
Lender an Officer’s Certificate identifying the name and address of the proposed
transferee and affirming that such proposed transferee is not a Embargoed
Person. Notwithstanding the provisions of this Section 5.2.10, Lender’s consent
shall not be required in connection with the pledges (or foreclosure of any
thereof in accordance with the applicable pledge agreement, or the exercise of
any other remedies pursuant to the Loan Documents, Mezzanine Loan Documents or
additional mezzanine loan documents entered into pursuant to Section 9.1.3(b)
hereof, as applicable, or acceptance of a deed-in-lieu or an assignment-in-lieu
of any thereof) pursuant to the Mezzanine Loan Documents or the Pledge Agreement
and no such pledge, foreclosure, exercise of remedies or assignment or transfer
in lieu of foreclosure thereof shall in any way be deemed a violation of this
Agreement. In addition, at all times, Guarantor must continue to Control
Borrower, Operating Lessee, Operating Pledgor and any Affiliated Manager and
own, directly or indirectly, at least a fifty-one percent (51%) legal and
beneficial interest in Borrower, Operating Lessee, Operating Pledgor, Operating
Lessee and any Affiliated Manager. Notwithstanding anything to the contrary
herein, no withdrawal, removal or replacement of any advisor to Guarantor shall
be deemed a Transfer or a change in Control or a violation of any provisions of
this Agreement or the Loan Documents. Borrower and Guarantor shall provide to
Lender reasonable prior written notice of such withdrawal, removal or
replacement.

 

 -111- 

 

 

(e)          Notwithstanding the foregoing, neither Lender’s consent nor notice
to Lender shall be required in connection with the issuance of any share or
stock or any sale or transfer by a shareholder in any corporation or REIT of the
shares of which are publicly traded on the New York Stock Exchange or any other
nationally or internationally recognized securities exchange or quoted on a
nationally or internationally recognized automated quotation system, including,
without limitation, NASDAQ, nor shall any such sale, transfer or issuance of
stock constitute a prohibited Transfer hereunder.

 

(f)          Lender shall not be required to demonstrate any actual impairment
of its security or any increased risk of default hereunder in order to declare
the Debt immediately due and payable upon a Transfer without Lender’s consent.

 

5.2.11         Ground Lease. (a) Borrower shall not, without Lender’s written
consent (which consent may not be unreasonably withheld, delayed or
conditioned), fail to exercise any option or right to renew or extend the term
of any Ground Lease, and shall give prompt written notice to Lender and shall
execute, acknowledge, deliver and record any document reasonably requested by
Lender to evidence the Lien of the related Security Instruments on such extended
or renewed lease term; provided, however, Borrower shall not be required to
exercise any particular such option or right to renew or extend to the extent
Borrower shall have received the prior written consent of Lender (which consent
may not be unreasonably withheld, delayed or conditioned) allowing Borrower to
forego exercising such option or right to renew or extend. If Borrower shall
fail to exercise any such option or right as aforesaid, Lender may exercise the
option or right as Borrower’s agent and attorney-in-fact, as provided above in
Lender’s own name or in the name of and on behalf of a nominee of Lender, after
the occurrence of an Event of Default for which Lender has accelerated the Loan,
as Lender may determine in the exercise of its sole and absolute discretion.

 

(b)          Borrower shall not waive, excuse, condone or in any way release or
discharge any Ground Lessor under any Ground Lease of or from such Ground
Lessor’s obligations, covenant and/or conditions under the related Ground Lease
without the prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

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(c)          Borrower shall not, without Lender’s prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed), surrender,
terminate, forfeit, or suffer or permit the surrender, termination or forfeiture
of, or change, modify or amend the Ground Lease. Consent to one amendment,
change, agreement or modification shall not be deemed to be a waiver of the
right to require consent to other, future or successive amendments, changes,
agreements or modifications. Any acquisition of Ground Lessor’s interest in the
Ground Lease by Borrower or any Affiliate of Borrower shall be accomplished by
Borrower in such a manner so as to avoid a merger of the interests of lessor and
lessee in the Ground Lease, unless consent to such merger is granted by Lender.

 

5.2.12         Master Lease. (a) Borrower shall not waive, excuse, condone or in
any way release or discharge any Master Lessor under any Master Lease of or from
such Master Lessor’s obligations, covenant and/or conditions under the related
Master Lease without the prior written consent of Lender, which consent shall
not be unreasonably withheld, conditioned or delayed.

 

(b)          Borrower shall not, without Lender’s prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed), surrender,
terminate, forfeit, or suffer or permit the surrender, termination or forfeiture
of, or change, modify or amend the Master Lease. Consent to one amendment,
change, agreement or modification shall not be deemed to be a waiver of the
right to require consent to other, future or successive amendments, changes,
agreements or modifications. Any acquisition of Master Lessor’s interest in the
Master Lease by Borrower or any Affiliate of Borrower shall be accomplished by
Borrower in such a manner so as to avoid a merger of the interests of lessor and
lessee in the Master Lease, unless consent to such merger is granted by Lender.

 

5.2.13         WWP Fund. Borrower shall not withdraw and use the WWP Fund for
any purpose other than (a) for application to the purchase price of the Equity
Purchase as part of the consummation thereof and in accordance with the terms
and conditions of this Agreement or the other Loan Documents, or (b) either
prior to the Initial Maturity Date or in connection with exercising the
Extension Option pursuant to Section 2.8 hereof, to deliver the WWP Fund to
Lender for application to prepayment of the Loan, without payment of any
prepayment premium or spread maintenance premium or any other fee or penalty, in
accordance with the terms and conditions set forth in Section 2.4 hereof.

 

ARTICLE VI

 

INSURANCE; CASUALTY; CONDEMNATION

 

Section 6.1           Insurance. (a) Borrower shall obtain and maintain, or
cause to be obtained and maintained, insurance for Borrower and the Properties
providing at least the following coverages:

 

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(i)          comprehensive “special form” insurance, commonly referred to as
“all risk”, including, but not limited to, loss caused by any type of windstorm
or hail (including named storms) on the Improvements and the Personal Property,
in each case (A) in an amount equal to one hundred percent (100%) of the “Full
Replacement Cost,” which for purposes of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation; (B) containing an agreed
amount endorsement with respect to the Improvements and Personal Property
waiving all co-insurance provisions or to be written on a no co-insurance form;
(C) unless otherwise approved by Lender in writing, providing for no deductible
in excess of $50,000 for all such insurance coverage, provided, however, with
respect to windstorm and earthquake coverage, providing for a deductible not to
exceed 5% of the total insurable value of the affected Individual Property; and
(D) containing an “Ordinance or Law Coverage” or “Enforcement” endorsement if
any of the Improvements or the use of any Individual Property shall at any time
constitute legal non-conforming structures or uses, including coverage for loss
to the undamaged portion of the building, coverage for demolition costs and
coverage for increased costs of construction in amounts reasonably acceptable to
Lender. In addition, Borrower shall obtain: (x) if any portion of the
Improvements or Personal Property is currently or at any time in the future
located in a federally designated “special flood hazard area” (“SFHA”), flood
hazard insurance for all such Improvements and/or Personal Property in an amount
equal to (1) the maximum amount of building and/or contents insurance available
under the National Flood Insurance Act of 1968, the Flood Disaster Protection
Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be
amended (which may be substituted with a private policy acceptable to Lender)
plus (2) such greater amount as Lender shall require, with deductibles not to
exceed $500,000 per building, $500,000 for contents per building and $100,000
for business income/rental loss; and (y) earthquake insurance in amounts and in
form and substance reasonably satisfactory to Lender in the event any Individual
Property is located in an area with a high degree of seismic activity and with a
probable maximum loss (PML) or scenario expected loss (SEL) greater than 20%;
provided that the insurance pursuant to clauses (x) and (y) hereof shall be on
terms consistent with the comprehensive special form insurance policy required
under this subsection (i);

 

(ii)         commercial general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (A) to be on the so-called “occurrence” form with a
combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per
occurrence (and, if on a blanket insurance Policy, containing an “Aggregate Per
Location” endorsement); and (B) to cover at least the following hazards:
(1) premises and operations; (2) products and completed operations on an “if
any” basis; (3) independent contractors; (4)  contractual liability for all
insured contracts; and (5) contractual liability covering the indemnities
contained in Article 8 of the Security Instruments to the extent the same is
available;

 

(iii)        business income or rental loss insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance provided
for in Section 6.1(a)(i) above and clauses (iv)(B), (v), (ix), and (x) below;
(C) in an amount equal to one hundred percent (100%) of the projected gross
revenues from the operation of each Individual Property (as reduced to reflect
expenses not incurred during a period of Restoration) for a period of at least
eighteen (18) months after the date of the Casualty; and (D) containing an
extended period of indemnity endorsement which provides that after the physical
loss to the Improvements and Personal Property has been repaired, the continued
loss of income will be insured until such income either returns to the same
level it was at prior to the loss, or the expiration of twelve (12) months from
the date that the applicable Individual Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period. The amount of such business
income or rental loss insurance shall be determined prior to the date hereof and
at least once each year thereafter based on Borrower’s reasonable estimate of
the gross revenues from each Individual Property for the succeeding
twenty-four (24) month period. Notwithstanding the provisions of Section 2.7.1
hereof, all proceeds payable to Lender pursuant to this subsection shall be held
by Lender and shall be applied to (I) the obligations secured by the Loan
Documents from time to time due and payable hereunder and under the Notes or
(II) Operating Expenses set forth in the Approved Annual Budget or, if no such
Approved Annual Budget exists, as approved by Lender in its reasonable
discretion; provided, however, that nothing herein contained shall be deemed to
relieve Borrower of its obligations to pay the obligations secured by the Loan
Documents on the respective dates of payment provided for in this Agreement and
the other Loan Documents except to the extent such amounts are actually paid out
of the proceeds of such business income insurance;

 

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(iv)        at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
current property and liability coverage forms do not otherwise apply,
(A) commercial general liability and umbrella/excess liability insurance,
covering claims related to the structural construction, repairs or alterations
being made at the Property which are not covered by or under the terms or
provisions of the below mentioned commercial general liability and
umbrella/excess liability insurance policies and (B) the insurance provided for
in Section 6.1(a)(i) above written in a so-called builder’s risk completed value
form in amounts acceptable to Lender (1) on a non-reporting basis, (2) against
all risks insured against pursuant to Section 6.1(a)(i) above, (3) including
permission to occupy each Individual Property and (4) with an agreed amount
endorsement waiving co-insurance provisions;

 

(v)         comprehensive boiler and machinery insurance, if steam boilers or
other pressure-fixed vessels are in operation, in amounts as shall be reasonably
required by Lender on terms consistent with the commercial property insurance
policy required under subsection (i) above;

 

(vi)        if applicable, commercial automobile liability coverage for all
owned and non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence of $1,000,000;

 

(vii)       with respect to any employees of Borrower or Operating Lessee or to
the extent Borrower or Operating Lessee is liable for employees of Manager,
worker’s compensation and employer’s liability subject to the worker’s
compensation laws of the State in which the applicable Individual Property is
located;

 

(viii)      umbrella and excess liability insurance in an amount not less than
$100,000,000 per occurrence on terms consistent with the commercial general
liability insurance policy required under Section 6.1(a)(v) above, including,
but not limited to, supplemental coverage for employer liability and automobile
liability, if applicable, which umbrella liability coverage shall apply in
excess of such supplemental coverage;

 

 -115- 

 

 

(ix)         the insurance required under this Section 6.1(a)(i) - (iii) and
(viii) above shall cover perils of terrorism and acts of terrorism and Borrower
shall maintain insurance for loss resulting from perils and acts of terrorism on
terms (including amounts) consistent with those required under this
Section 6.1(a)(i) - (iii) and (viii) above at all times during the term of the
Loan. If “acts of terrorism” or other similar acts or events or “fire following”
such acts or events are hereafter excluded from Borrower’s comprehensive all
risk insurance policy or policies required under Sections 6.1(a)(i) and (iii)
above, Borrower shall obtain an endorsement to such policy or policies, or a
separate policy insuring against all such excluded acts or events and “fire
following” such acts or events in an amount not less than the sum of one hundred
percent (100%) of the “Full Replacement Cost” and the business income/rent loss
insurance required in Section 6.1(a)(iii) above); provided that such endorsement
or policy shall be in form and substance satisfactory to Lender. Notwithstanding
the foregoing, for so long as the Terrorism Risk Insurance Act of 2002, as
extended and modified by the Terrorism Risk Insurance Program Reauthorization
Act of 2015 (“TRIPRA”) is in effect (including any extensions thereof or if
another federal governmental program is in effect relating to “acts of
terrorism” which provides substantially similar protections as TRIPRA), Lender
shall accept terrorism insurance which insures against “covered acts” as defined
by TRIPRA (or such other program) as full compliance with this
Section 6.1(a)(ix) as it relates to the risks that are required to be covered
hereunder but only in the event that TRIPRA (or such other program) continues to
cover both domestic and foreign acts of terrorism; and

 

(x)          upon sixty (60) days written notice, such other reasonable
insurance, including, but not limited to, sinkhole or land subsidence insurance,
and in such reasonable amounts as Lender from time to time may reasonably
request against such other insurable hazards which at the time are commonly
insured against for property similar to any Individual Property located in or
around the region in which any Individual Property is located.

 

(b)          All insurance provided for in Section 6.1(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”), and shall be subject to the approval of Lender as to
insurance companies, amounts, deductibles, loss payees and insureds, such
approval not to be unreasonably withheld. The Policies shall be issued by
financially sound and responsible insurance companies approved to do business in
the State and having a rating of (1) “A:VIII” or better in the current Best’s
Insurance Reports and (2) “A” or better by S&P or by a syndicate of insurers
through which (A) at least 75% of the coverage (if there are 4 or fewer members
of the syndicate) or at least 60% of the coverage (if there are 5 or more
members of the syndicate and (B) the remaining forty percent (40%) of the
insurance coverage (or the remaining twenty-five percent (25%) if such syndicate
consists of four (4) or fewer members) shall be provided by insurance companies
having a claims paying ability rating of “BBB” or better by S&P. The Policies
described in Section 6.1 hereof (other than those strictly limited to liability
protection) shall designate Lender as loss payee. Prior to the expiration dates
of the Policies theretofore furnished to Lender, certificates of insurance
evidencing the Policies (to be followed by complete copies of the Policies
maintained by the Borrower upon issuance), accompanied by evidence satisfactory
to Lender of payment of the premiums due thereunder (the “Insurance Premiums”),
shall be delivered by Borrower to Lender. Borrower shall promptly forward to
Lender a copy of each written notice received by Borrower of any modification,
reduction or cancellation of any of the Policies or of any of the coverages
afforded under any of the Policies.

 

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(c)          Any blanket insurance Policy shall otherwise provide the same
protection as would a separate Policy insuring only the Properties in compliance
with the provisions of Section 6.1(a) as determined by Lender. Further, to the
extent the Policies are maintained pursuant to a blanket insurance Policy that
covers more than one location within a one thousand foot radius of the
Individual Property or Properties (the “Radius”), the limits of such blanket
insurance Policy must be sufficient to maintain property and terrorism coverage
as set forth in this Section 6.1 for the Individual Property or Properties as
well as each other location within the Radius that is covered by such blanket
insurance Policy calculated on a total insured value basis.

 

(d)          All Policies provided for or contemplated by Section 6.1(a) shall
name Borrower as the named insured (other than those issued to the respective
Condominium) and, in the case of liability coverages, shall name Lender as the
additional insured, as its interests may appear, and all property insurance
Policies described in Section 6.1(a) shall name Lender as a mortgagee and loss
payee and shall contain a standard non-contributing mortgagee clause (except
with respect to the Condominium policies) in favor of Lender providing that the
loss thereunder shall be payable to Lender (except, with respect to the
Condominium policies, to the extent required or permitted by the Condominium
Documents).

 

(e)          All Policies provided for in Section 6.1 shall:

 

(i)          with respect to the Policies of property insurance, contain clauses
or endorsements to the effect that, (1) no act or negligence of Borrower, or
anyone acting for Borrower, or of any tenant or other occupant, or failure to
comply with the provisions of any Policy, which might otherwise result in a
forfeiture of the insurance or any part thereof, or foreclosure or similar
action, shall in any way affect the validity or enforceability of the insurance
insofar as Lender is concerned and (2) the Policies shall not be cancelled
without at least thirty (30) days’ written notice to Lender, except ten (10)
days’ notice for non-payment of premium;

 

(ii)         with respect to the Policies of liability insurance, if obtainable
by Borrower using commercially reasonable efforts, contain clauses or
endorsements to the effect that, the Policy shall not be canceled without at
least thirty (30) days written notice to Lender. If issuer will not or cannot
provide the notices required herein this clause (ii), Borrower shall be
obligated to provide such notice; and

 

(iii)        not contain any clauses that would make Lender liable for any
Insurance Premiums thereon or subject to any assessments thereunder.

 

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(f)          If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Properties, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate after ten (10) Business Days’ notice to Borrower if
prior to the date upon which any such coverage will lapse or at any time Lender
deems necessary (regardless of prior notice to Borrower) to avoid the lapse of
any such coverage. All premiums incurred by Lender in connection with such
action or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and, until paid, shall be secured by the Security
Instruments and shall bear interest at the Default Rate.

 

(g)          Notwithstanding anything to the contrary, Borrower shall use
commercially reasonable efforts to cause the Condominium to maintain (1) the
coverage required under the Condominium Documents; and (2) any additional
coverage necessary to meet the requirements as set forth in this Section 6.1 or
as otherwise approved by Lender, such approval not to be unreasonably withheld
but, in any event, consistent with coverages required by prudent institutional
mortgage lenders originating similar mortgage loans (collectively referred to
herein as an “Acceptable Condominium Policy”). The ratings, as of the date
hereof, of the insurers under the existing Condominium policies are acceptable.
In all cases, Lender must receive evidence satisfactory to Lender of the terms
and conditions of such coverage.

 

Section 6.2           Casualty. If any Individual Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a “Casualty”),
Borrower shall give prompt written notice of such damage to Lender and, subject
to the Condominium Documents, shall promptly commence and diligently prosecute
the completion of the Restoration of the Individual Property as nearly as
possible to the condition such Individual Property was in immediately prior to
such Casualty, with such alterations as may be reasonably approved by Lender and
otherwise in accordance with Section 6.4. Borrower shall pay all costs of such
Restoration whether or not such costs are covered by insurance. Lender may, but
shall not be obligated to make proof of loss if not made promptly by Borrower.
In addition, Lender may participate in any settlement discussions with any
insurance companies (and shall approve the final settlement) with respect to any
Casualty with respect to any Individual Property in which the Net Proceeds or
the costs of completing the Restoration are equal to or greater than the larger
of (x) five percent (5%) of the Allocated Loan Amount of the applicable
Individual Property and (y) $1,000,000, and Borrower shall deliver to Lender all
instruments required by Lender to permit such participation.

 

Section 6.3           Condemnation. (a)Borrower shall promptly give Lender
notice of the actual or threatened commencement of any proceeding for the
Condemnation of any Individual Property and shall deliver to Lender copies of
any and all papers served in connection with such proceedings. Lender may
participate in any such proceedings (subject to the applicable Condominium
Documents) in which the Award or the costs of completing the Restoration are
equal to or greater than the larger of (x) five percent (5%) of the Allocated
Loan Amount of the applicable Individual Property and (y) $1,000,000, and
Borrower shall from time to time deliver to Lender all instruments requested by
it to permit such participation. Borrower shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Lender, its attorneys and
experts, and reasonably cooperate with them in the carrying on or defense of any
such proceedings. Notwithstanding any taking by any public or quasi-public
authority through Condemnation or otherwise (including, but not limited to, any
transfer made in lieu of or in anticipation of the exercise of such taking),
Borrower shall continue to pay the Debt at the time and in the manner provided
for its payment in the Notes and in this Agreement and the Debt shall not be
reduced until any Award shall have been actually received and applied by Lender,
after the deduction of expenses of collection, to the reduction or discharge of
the Debt. Lender shall not be limited to the interest paid on the Award by the
condemning authority but shall be entitled to receive out of the Award interest
at the rate or rates provided herein or in the Notes. If any Individual Property
or any portion thereof is taken by a condemning authority, Borrower shall
promptly commence and diligently prosecute the Restoration of the applicable
Individual Property and otherwise comply with the provisions of Section 6.4. If
any Individual Property is sold, through foreclosure or otherwise, prior to the
receipt by Lender of the Award, Lender shall have the right, whether or not a
deficiency judgment on the Notes shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.

 

 -118- 

 

 

(b)          Intentionally omitted.

 

Section 6.4           Restoration. The following provisions shall apply in
connection with the Restoration of any Individual Property:

 

(a)          If (i) the Net Proceeds are less than the greater of (x) five
percent (5%) of the Allocated Loan Amount of the applicable Individual Property
and (y) $1,000,000 and (ii) the costs of completing the Restoration are less
than the greater of (x) five percent (5%) of the Allocated Loan Amount of the
applicable Individual Property and (y) $1,000,000, the Net Proceeds will be
disbursed by Lender to Borrower upon receipt, provided that Borrower thereafter
shall expeditiously commence and satisfactorily complete with due diligence the
Restoration in accordance with the terms of this Agreement.

 

(b)          If (i) the Net Proceeds are equal to or more than greater of (x)
five percent (5%) of the Allocated Loan Amount of the applicable Individual
Property and (y) $1,000,000 or (ii) the costs of completing the Restoration are
equal to or more than greater of (x) five percent (5%) of the Allocated Loan
Amount of the applicable Individual Property and (y) $1,000,000, the Net
Proceeds will be held by Lender and Lender shall make the Net Proceeds available
for the Restoration in accordance with the provisions of this Section 6.4. The
term “Net Proceeds” for purposes of this Section 6.4 shall mean: (i) the net
amount of all insurance proceeds received by Lender pursuant to Section 6.1
(a)(i), (iv), (vi), (ix) and (x) as a result of such damage or destruction,
after deduction of its reasonable costs and expenses (including, but not limited
to, reasonable third party counsel fees), if any, in collecting same (“Insurance
Proceeds”), or (ii) the net amount of the Award, after deduction of its
reasonable costs and expenses (including, but not limited to, reasonable counsel
fees), if any, in collecting same (“Condemnation Proceeds”), whichever the case
may be.

 

(i)       The Net Proceeds shall be made available to Borrower for Restoration
provided that each of the following conditions are met:

 

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

 

(B)         (1) in the event the Net Proceeds are Insurance Proceeds, less than
thirty percent (30%) of the total floor area of the Improvements on the
Individual Property has been damaged, destroyed or rendered unusable as a result
of such Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds,
less than ten percent (10%) of the land constituting the Individual Property is
taken, and such land is located along the perimeter or periphery of the
Individual Property, and no portion of the Improvements is located on such land;

 

 -119- 

 

 

(C)         Leases demising in the aggregate a percentage amount equal to or
greater than eighty percent (80%) of the total rentable space in the Individual
Property which has been demised under executed and delivered Leases in effect as
of the date of the occurrence of such Casualty or Condemnation, whichever the
case may be, shall remain in full force and effect during and after the
completion of the Restoration, notwithstanding the occurrence of any such
Casualty or Condemnation, whichever the case may be, and Borrower and/or tenant,
as applicable under the respective Lease, will make all necessary repairs and
restorations thereto at their sole cost and expense;

 

(D)         Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than sixty (60) days after issuance of
building permits with respect thereto) and shall diligently pursue the same to
satisfactory completion;

 

(E)         Lender shall be reasonably satisfied that any operating deficits,
including all scheduled payments of principal and interest under the Notes,
which will be incurred with respect to the Individual Property as a result of
the occurrence of any such Casualty or Condemnation, whichever the case may be,
will be covered out of (1) the Net Proceeds, (2) the insurance coverage referred
to in Section 6.1(a)(iii), if applicable, or (3) by other funds of Borrower;

 

(F)         Lender shall be reasonably satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months prior to the
Maturity Date, (2) the earliest date required for such completion under the
terms of any Leases, (3) such time as may be required under all applicable Legal
Requirements in order to repair and restore the applicable Individual to as
nearly as possible the condition it was in immediately prior to such Casualty or
Condemnation, as applicable, or (4) the expiration of the insurance coverage
referred to in Section 6.1(a)(iii);

 

(G)         the Individual Property and the use thereof after the Restoration
will be in compliance with and permitted under all applicable Legal Requirements
and the Ground Lease, the Master Lease the Condominium Documents and/or the
Operating Lease, as applicable;

 

(H)         the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements and the Ground Lease, the Master Lease, the Condominium Documents
and/or the Operating Lease, as applicable;

 

(I)         intentionally omitted;

 

 -120- 

 

 

(J)         intentionally omitted;

 

(K)         Borrower shall deliver, or cause to be delivered, to Lender a signed
detailed budget approved in writing by Borrower’s architect or engineer stating
the entire cost of completing the Restoration, which budget shall be subject to
Lender’s prior written approval, which approval shall not be unreasonably
withheld, delayed or conditioned; and

 

(L)         the Net Proceeds together with any cash or cash equivalent deposited
by Borrower with Lender are sufficient in Lender’s reasonable discretion to
cover the cost of the Restoration.

 

(ii)     The Net Proceeds shall be held by Lender in an interest-bearing
Eligible Account and, until disbursed in accordance with the provisions of this
Section 6.4(b), shall constitute additional security for the Debt and Other
Obligations under the Loan Documents. The Net Proceeds shall be disbursed by
Lender to, or as directed by, Borrower from time to time during the course of
the Restoration, upon receipt of evidence reasonably satisfactory to Lender that
(A) all materials installed and work and labor performed (except to the extent
that they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid for in full, and (B) there exist no notices
of pendency, stop orders, mechanic’s or materialman’s liens or notices of
intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Individual Property which have not either been fully bonded to
the satisfaction of Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the Title
Insurance Policy.

 

(iii)     All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance in all respects by
Lender (and such review and acceptance not to be unreasonably withheld,
conditioned or delayed) and by an independent consulting engineer selected by
Lender (the “Casualty Consultant”). Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the general contractor engaged
in the Restoration, as well as the contracts under which it has been engaged,
shall be subject to prior review and approval by Lender (and such review and
acceptance not to be unreasonably withheld, conditioned or delayed) and the
Casualty Consultant. All costs and expenses incurred by Lender in connection
with making the Net Proceeds available for the Restoration including, without
limitation, reasonable counsel fees and disbursements and the Casualty
Consultant’s fees, shall be paid by Borrower.

 

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(iv)        In no event shall Lender be obligated to make disbursements of the
Net Proceeds in excess of an amount equal to the costs actually incurred from
time to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, minus the Casualty Retainage. The term “Casualty Retainage”
shall mean an amount equal to ten percent (10%) of the costs actually incurred
for work in place as part of the Restoration, as certified by the Casualty
Consultant, until the Restoration has been completed. The Casualty Retainage
shall be reduced to five percent (5%) of the costs actually incurred upon
receipt by Lender of satisfactory evidence that fifty percent (50%) of the
Restoration has been completed. The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section 6.4(b),
be less than the amount actually held back by Borrower from contractors,
subcontractors and materialmen engaged in the Restoration. The Casualty
Retainage shall not be released until the Casualty Consultant certifies to
Lender that the Restoration has been completed (subject only to non-material
punchlist items) in accordance with the provisions of this Section 6.4(b) and
that all approvals necessary for the re-occupancy and use of the Individual
Property have been obtained from all appropriate governmental and
quasi-governmental authorities, and Lender receives evidence satisfactory to
Lender that the costs of the Restoration have been paid in full or will be paid
in full out of the Casualty Retainage; provided, however, that Lender will
release the portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of the
date upon which the Casualty Consultant certifies to Lender that the contractor,
subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the contractor’s,
subcontractor’s or materialman’s contract, the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment in full of all
sums due to the contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company issuing the related Title Insurance
Policy, and Lender receives an endorsement to the related Title Insurance Policy
insuring the continued priority of the lien of the related Security Instruments
and evidence of payment of any premium payable for such endorsement. If required
by Lender, the release of any such portion of the Casualty Retainage shall be
approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.

 

(v)         Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.

 

(vi)        If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the reasonable opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 6.4(b) shall constitute additional security for the Debt and Other
Obligations under the Loan Documents.

 

(vii)       The excess, if any, of the Net Proceeds and the remaining balance,
if any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 6.4(b), and the receipt by Lender
of evidence satisfactory to Lender that all costs incurred in connection with
the Restoration have been paid in full, shall be deposited in Lockbox Account to
be disbursed in accordance with this Agreement, provided no Event of Default
shall have occurred and shall be continuing under the Notes, this Agreement or
any of the other Loan Documents.

 

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(c)          All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be deposited into the Lockbox Account as excess Net
Proceeds pursuant to Section 6.4(b)(vii) may be retained and applied by Lender
in accordance with Section 2.4.2 hereof toward the payment of the Debt whether
or not then due and payable.

 

(d)          In the event of foreclosure of the Security Instruments with
respect to an Individual Property, or other transfer of title of an Individual
Property in extinguishment in whole or in part of the Debt all right, title and
interest of Borrower in and to the Policies that are not blanket Policies then
in force concerning such Individual Property and all proceeds payable thereunder
shall thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.

 

(e)          Borrower shall not grant its consent, approval or waiver with
respect to any disbursement of Insurance Proceeds or Condemnation Proceeds in
respect of the Ground Lease or the Master Lease (if such disbursement would
violate the terms and provisions of this Section 6.4) as may be requested or
required in connection with the terms and provisions of such Ground Lease or the
Master Lease without first obtaining such written consent, approval, or waiver
of Lender, which shall not be unreasonably withheld, delayed or conditioned.

 

(f)          In addition to the foregoing, in connection with any partial
Condemnation or any Casualty, if (i) any Net Proceeds shall be equal to or
greater than sixty percent (60%) of the Allocated Loan Amount in respect of the
applicable Individual Property or (ii) provided no Event of Default shall have
occurred and be continuing, any Net Proceeds shall be equal to or greater than
the five percent (5%) of the Allocated Loan Amount and Lender does not disburse
the Net Proceeds to Borrower for Restoration due to Borrower’s failure to
satisfy the conditions set forth in Section 6.4(b)(i) hereof using commercially
reasonable efforts, then Borrower shall have the right, but not the obligation,
to elect not to proceed with a Restoration and to voluntarily prepay the Loan in
an amount equal to the Release Price of the applicable Individual Property (a
“Casualty/Condemnation Prepayment”) utilizing the Net Proceeds (together with
other funds of the Borrower if such Net Proceeds are less than the Release Price
and any interest shortfall in connection therewith) and obtain the release of
the applicable Individual Property from the lien of the Security Instruments
thereon and related Loan Documents, provided that (i) Borrower shall have
satisfied each of the requirements of Section 2.5 hereof, and (ii) Borrower
shall consummate the Casualty/Condemnation Prepayment on or before the Payment
Date occurring following the date the Net Proceeds shall be available to
Borrower for such Casualty/Condemnation Prepayment. For the avoidance of doubt,
unless such payment is made following the occurrence of and during the
continuance of an Event of Default, no premium or penalty or charge shall be due
with respect to a Casualty/Condemnation Prepayment.

 

Section 6.5           References to Borrower in this Article VI. It is
understood that, with respect to the Viceroy Property, Borrower may delegate to
Operating Lessee all of the obligations in this Article VI, so that all
references to the actions or agreements of Borrower in this Article VI shall
mean and be deemed to refer to “Borrower causing the Operating Lessee” to
perform such actions or agreement.

 

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ARTICLE VII

 

RESERVE FUNDS

 

Section 7.1           Intentionally Omitted.

 

Section 7.2           Tax and Insurance Reserve Fund.Upon the occurrence and
during the continuance of a Cash Sweep Period, Borrower shall deliver to Lender
to be held in escrow and disbursed pursuant to this Section 7.2, on each Payment
Date thereafter, (i) one-twelfth (1/12th) of the Taxes and Other Charges that
Lender estimates will be payable during the next ensuing twelve (12) months in
order to accumulate in the Tax and Insurance Reserve Fund sufficient funds to
pay all such Taxes and Other Charges at least thirty (30) days prior to their
respective due dates and (ii) one-twelfth (1/12th) of the Insurance Premiums
that Lender estimates will be payable for the renewal of the coverage afforded
by the Policies upon the expiration thereof (unless an Event of Default has
occurred and is continuing, solely to the extent the applicable insurance
Policies are not a blanket insurance Policy) in order to accumulate in the Tax
and Insurance Reserve Fund sufficient funds to pay all such Insurance Premiums
at least thirty (30) days prior to the expiration of the Policies (amounts so
deposited hereinafter called the “Tax and Insurance Reserve Fund”). Provided no
Event of Default exists, Lender will apply the Tax and Insurance Reserve Fund to
payments of Taxes and Insurance Premiums required to be made by Borrower
pursuant to the Approved Annual Budget, Section 5.1.2 hereof and under the
Security Instruments. In making any payment relating to the Tax and Insurance
Reserve Fund, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office (with respect to Taxes), or insurer
or agent (with respect to Insurance Premiums), without inquiry into the accuracy
of such bill, statement or estimate or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax
and Insurance Reserve Fund shall exceed the amounts due for Taxes, Other Charges
and Insurance Premiums pursuant to the Approved Annual Budget, Section 5.1.2
hereof, Lender shall, in its sole discretion, return any excess to Borrower or
credit such excess against future payments to be made to the Tax and Insurance
Reserve Fund. Any amount remaining in the Tax and Insurance Reserve Fund after
the Debt has been paid in full shall be disbursed in accordance with Section 7.9
below. In allocating such excess, Lender may deal with the Person shown on the
records of Lender to be the owner of the Property. If at any time Lender
reasonably determines that the Tax and Insurance Reserve Fund is not or will not
be sufficient to pay Taxes, Other Charges or Insurance Premiums by the dates set
forth above, Lender shall notify Borrower of such determination and Borrower
shall increase its monthly payments to Lender by the amount that Lender
estimates is sufficient to make up the deficiency at least thirty (30) days
prior to the due date of the Taxes and Other Charges and/or thirty (30) days
prior to expiration of the Policies, as the case may be. Notwithstanding
anything to the contrary herein, if insurance for the Property is provided
through a blanket insurance Policy acceptable to Lender, Borrower shall not be
required to fund the Tax and Insurance Reserve Fund with funds for Insurance
Premiums except during the continuation of an Event of Default.

 

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Section 7.3           Replacements and Replacement Reserve Fund.

 

7.3.1           Replacement Reserve Fund. Upon the occurrence and during the
continuance of a Cash Sweep Period, Borrower shall pay to Lender, on each
Payment Date thereafter, one-twelfth (1/12) of the product of $0.25 multiplied
by the total number of aggregate rentable square feet comprising all of the
Properties (other than the Viceroy Property) then subject to the lien of the
Security Instruments (the “Replacement Reserve Monthly Deposit”), which amounts
are reasonably estimated by Lender to be due for replacements, capital
expenditures in accordance with any Approved Annual Budget, and repairs required
to be made to the Properties during the calendar year (collectively, the
“Replacements”). Amounts so deposited shall hereinafter be referred to as
Borrower’s “Replacement Reserve Fund” and the account in which such amounts are
held shall hereinafter be referred to as Borrower’s “Replacement Reserve
Account”. Any amounts held in the Replacement Reserve Account and allocated for
an Individual Property shall be released to Borrower in the event such
Individual Property is released from the Lien of its related Security
Instruments in accordance with Section 2.5 hereof.

 

7.3.2           Disbursements from Replacement Reserve Account. (a) Lender shall
make disbursements from the Replacement Reserve Account to pay Borrower only for
the costs of the Replacements. Lender shall not be obligated to make
disbursements from the Replacement Reserve Account to reimburse Borrower for the
costs of routine maintenance to an Individual Property, replacements of
inventory or for any costs which are to be reimbursed from the Required Repair
and Environmental Conditions Reserve Fund, FF&E Reserve Fund or Rollover Reserve
Fund.

 

(b)          Lender shall, upon written request from Borrower and satisfaction
of the requirements set forth in this Section 7.3.2, disburse to Borrower
amounts from the Replacement Reserve Account necessary to pay for the actual
approved costs of Replacements or to reimburse Borrower therefor, upon
completion of such Replacements (or, upon partial completion in the case of
Replacements made pursuant to clause (e) hereof) as determined by Lender. In no
event shall Lender be obligated to disburse funds from the Replacement Reserve
Account if an Event of Default exists.

 

(c)          Each request for disbursement from the Replacement Reserve Account
shall be in a form reasonably specified or approved by Lender and shall specify
(i) the specific Replacements for which the disbursement is requested, (ii) the
quantity and price of each item purchased, if the Replacement includes the
purchase or replacement of specific items, (iii) the price of all materials
(grouped by type or category) used in any Replacement other than the purchase or
replacement of specific items, and (iv) the cost of all contracted labor or
other services applicable to each Replacement for which such request for
disbursement is made. With each request Borrower shall provide an Officer’s
Certificate stating that all such Replacements have been made in accordance with
all applicable Legal Requirements of any Governmental Authority having
jurisdiction over the applicable Individual Property to which Replacements are
being provided. Each request for disbursement shall include copies of invoices
for all items or materials purchased and all contracted labor or services
provided and, unless Lender has agreed to issue joint checks as described below
in connection with a particular Replacement, each request shall include evidence
satisfactory to Lender of payment of all such amounts. Except as provided in
clause (e) hereof, each request for disbursement from the Replacement Reserve
Account shall be made only after completion of the Replacement for which
disbursement is requested. Borrower shall provide Lender evidence of completion
of the subject Replacement satisfactory to Lender in its reasonable judgment.

 

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(d)          Borrower shall pay all invoices in connection with the Replacements
with respect to which a disbursement is requested prior to submitting such
request for disbursement from the Replacement Reserve Account or, at the request
of Borrower, Lender will issue joint checks, payable to Borrower and the
contractor, supplier, materialman, mechanic, subcontractor or other party to
whom payment is due in connection with a Replacement. In the case of payments
made by joint check, Lender may require a waiver of lien from each Person
receiving payment prior to Lender’s disbursement from the Replacement Reserve
Account. In addition, as a condition to any disbursement, Lender may require
Borrower to obtain lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount equal to or greater
than $50,000.00 for completion of its work or delivery of its materials (which
lien waivers may be conditioned upon receipt of such funds). Any lien waiver
delivered hereunder shall conform to the requirements of applicable law and
shall cover all work performed and materials supplied (including equipment and
fixtures) for the applicable Individual Property by that contractor, supplier,
subcontractor, mechanic or materialman through the date covered by the current
reimbursement request (or, in the event that payment to such contractor,
supplier, subcontractor, mechanic or materialmen is to be made by a joint check,
the release of lien shall be effective through the date covered by the previous
release of funds request).

 

(e)          If the cost of a Replacement exceeds $50,000.00, a request for
reimbursement from the Replacement Reserve Account may be made after completion
of a portion of the work under such contract, provided (A) such contract
requires payment upon completion of such portion of the work, (B) the materials
for which the request is made are on site at the applicable Individual Property
and are properly secured or have been installed in the such Individual Property,
(C) all other conditions in this Agreement for disbursement have been satisfied,
(D) funds remaining in the Replacement Reserve Account are, in Lender’s
reasonable judgment, sufficient to complete such Replacement and other
Replacements when required, and (E) if required by Lender, each contractor or
subcontractor receiving payments under such contract shall provide a waiver of
lien with respect to amounts which have been paid to that contractor or
subcontractor (which lien waivers may be conditioned upon receipt of such
amounts paid pursuant to the request for payment).

 

(f)          Borrower shall not make a request for disbursement from the
Replacement Reserve Account more frequently than once in any calendar month and
(except in connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than $25,000.00.

 

7.3.3           Performance of Replacements. (a) Borrower shall make
Replacements when required in order to keep each Individual Property in
condition and repair consistent with other comparable properties in the same
market segment in the metropolitan area in which the respective Individual
Property is located, and to keep each Individual Property or any portion thereof
from deteriorating. Borrower shall complete all Replacements in a good and
workmanlike manner as soon as practicable following the commencement of making
each such Replacement.

 

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(b)          Lender reserves the right, at its option, to approve all contracts
or work orders in excess of $25,000.00 with materialmen, mechanics, suppliers,
subcontractors, contractors or other parties providing labor or materials in
connection with the Replacements. Upon Lender’s request, Borrower shall assign
any contract or subcontract to Lender.

 

(c)          In the event Lender determines in its reasonable discretion that
any Replacement is not being performed in a workmanlike or timely manner or that
any Replacement has not been completed in a workmanlike or timely manner, Lender
shall have the option to withhold disbursement for such unsatisfactory
Replacement and to cause Borrower to proceed under existing contracts or to
contract with third parties to complete such Replacement and to apply the
Replacement Reserve Fund toward the labor and materials necessary to complete
such Replacement.

 

(d)          During the continuance of an Event of Default, in order to
facilitate Lender’s completion or making of such Replacements, Borrower grants
Lender the right to enter onto any Individual Property and perform any and all
work and labor necessary to complete or make such Replacements and/or employ
watchmen to protect such Individual Property from damage. All sums so expended
by Lender, to the extent not from the Replacement Reserve Fund, shall be deemed
to have been advanced under the Loan to Borrower and secured by the Security
Instruments. For this purpose Borrower constitutes and appoints Lender its true
and lawful attorney-in-fact with full power of substitution to complete or
undertake such Replacements in the name of Borrower if Lender has accelerated
the Loan following an Event of Default. Such power of attorney shall be deemed
to be a power coupled with an interest and cannot be revoked. Borrower empowers
said attorney in fact as follows: (i) to use any funds in the Replacement
Reserve Account for the purpose of making or completing such Replacements;
(ii) to make such additions, changes and corrections to such Replacements as
shall be necessary or desirable to complete such Replacements; (iii) to employ
such contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all existing bills
and claims which are or may become Liens against any Individual Property, or as
may be necessary or desirable for the completion of such Replacements, or for
clearance of title; (v) to execute all applications and certificates in the name
of Borrower which may be required by any of the contract documents; (vi) to
prosecute and defend all actions or proceedings in connection with any
Individual Property or the rehabilitation and repair of any Individual Property;
and (vii) to do any and every act which Borrower might do in its own behalf to
fulfill the terms of this Agreement.

 

(e)          Nothing in this Section 7.3.3 shall: (i) make Lender responsible
for making or completing any Replacements; (ii) require Lender to expend funds
in addition to the Replacement Reserve Fund to make or complete any Replacement;
(iii) obligate Lender to proceed with any Replacements; or (iv) obligate Lender
to demand from Borrower additional sums to make or complete any Replacement.

 

(f)          Borrower shall permit Lender and Lender’s agents and
representatives (including, without limitation, Lender’s engineer, architect, or
inspector) or third parties making Replacements pursuant to this Section 7.3.3
to enter onto each Individual Property during normal business hours (subject to
the rights of Tenants under their Leases) to inspect the progress of any
Replacements and all materials being used in connection therewith, and to
examine all plans and shop drawings relating to such Replacements which are or
may be kept at each Individual Property, during the continuance of an Event of
Default, to complete any Replacements made pursuant to this Section 7.3.3.
Borrower shall cause all contractors and subcontractors to cooperate with Lender
or Lender’s representatives or such other persons described above in connection
with inspections described in this Section (f) or the completion of Replacements
pursuant to this Section 7.3.3.

 

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(g)          Lender may require an inspection of the Individual Property at
Borrower’s expense prior to making a monthly disbursement from the Replacement
Reserve Account in order to verify completion of the Replacements for which
reimbursement is sought. Lender may require that such inspection be conducted by
an appropriate independent qualified professional selected by Lender and/or may
require a copy of a certificate of completion by an independent qualified
professional acceptable to Lender prior to the disbursement of any amounts from
the Replacement Reserve Account. Borrower shall pay the reasonable expense of
the inspection as required hereunder, whether such inspection is conducted by
Lender or by an independent qualified professional.

 

(h)          The Replacements and all materials, equipment, fixtures, or any
other item comprising a part of any Replacement shall be constructed, installed
or completed, as applicable, free and clear of all mechanic’s, materialmen’s or
other liens (except for those Liens existing on the date of this Agreement which
have been approved in writing by Lender).

 

(i)          Before each disbursement from the Replacement Reserve Account in
excess of $25,000.00, Lender may require Borrower to provide Lender with a
search of title to the applicable Individual Property effective to the date of
the disbursement, which search shows that no mechanic’s or materialmen’s liens
or other liens of any nature have been placed against the applicable Individual
Property since the date of recordation of the related Security Instruments and
that title to the applicable Individual Property is free and clear of all Liens
(other than the lien of the related Security Instruments and any other Liens
previously approved in writing by Lender, if any).

 

(j)          All Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
applicable Individual Property and applicable insurance requirements including,
without limitation, applicable building codes, special use permits,
environmental regulations, and requirements of insurance underwriters.

 

(k)          In addition to any insurance required under the Loan Documents,
Borrower shall provide or cause to be provided workmen’s compensation insurance,
builder’s risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement. All
such policies shall be in form and amount reasonably satisfactory to Lender. All
such policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed. Certified copies of such
policies shall be delivered to Lender.

 

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7.3.4           Failure to Make Replacements. (a) It shall be an Event of
Default under this Agreement if Borrower fails to comply with any provision of
this Section 7.3 and such failure is not cured within thirty (30) days after
notice from Lender. Upon the occurrence of such an Event of Default, Lender may
use the Replacement Reserve Fund (or any portion thereof) for any purpose,
including but not limited to completion of the Replacements as provided in
Section 7.3.3, or for any other repair or replacement to any Individual Property
or toward payment of the Debt in such order, proportion and priority as Lender
may determine in its sole discretion. Lender’s right to withdraw and apply the
Replacement Reserve Funds shall be in addition to all other rights and remedies
provided to Lender under this Agreement and the other Loan Documents.

 

(b)          Nothing in this Agreement shall obligate Lender to apply all or any
portion of the Replacement Reserve Fund on account of an Event of Default to
payment of the Debt or in any specific order or priority

 

7.3.5           Balance in the Replacement Reserve Account. The insufficiency of
any balance in the Replacement Reserve Account shall not relieve Borrower from
its obligation to fulfill all preservation and maintenance covenants in the Loan
Documents.

 

Section 7.4           Rollover Reserve.

 

7.4.1           Deposits to Rollover Reserve Fund. Upon the occurrence and
during the continuance of a Cash Sweep Period, Borrower shall pay to Lender, on
each Payment Date thereafter, one-twelfth (1/12) of the product of $1.50
multiplied by the total number of aggregate rentable square feet comprising all
of the Properties (other than the Viceroy Property) then subject to the lien of
the Security Instruments, which amounts shall be deposited with and held by
Lender for tenant improvement and leasing commission obligations incurred
following the date hereof. In addition, during a Cash Sweep Period, Borrower
shall deliver to Lender for deposit into the Rollover Reserve Fund all funds
received by Borrower in connection with any cancellation, termination or
surrender of any Lease, including, but not limited to, any surrender or
cancellation fees, buy-out fees, or reimbursements for tenant improvements and
leasing commissions; provided, however, that, so long as no Event of Default has
occurred and is continuing, such cancellation, termination or surrender or other
similar funds shall be remitted to Borrower in the event (i) the demised
premises under such cancelled, terminated or surrendered Lease has been re-let,
(ii) the replacement tenant is in occupancy of the demised premises and paying
full, unabated rent, (iii) all tenant improvements and leasing commissions have
been paid with respect to the applicable demised premises and (iv) Borrower
delivers to Lender a tenant estoppel certificate signed by the replacement
tenant in form and substance acceptable to Lender. All such amounts so deposited
shall hereinafter be referred to as the “Rollover Reserve Fund” and the account
to which such amounts are held shall hereinafter be referred to as the “Rollover
Reserve Account”.

 

7.4.2           Withdrawal of Rollover Reserve Funds. Provided no Event of
Default then exists, Lender shall make disbursements from the Rollover Escrow
Fund for tenant improvement and leasing commission obligations incurred by
Borrower. All such expenses shall be approved by Lender in its reasonable
discretion if not previously approved in the Approved Annual Budget. Lender
shall make disbursements as requested by Borrower on a monthly basis in
increments of no less than $5,000.00 upon delivery by Borrower of Lender’s
standard form of draw request, together with an Officer’s Certificate stating
that the amounts requested shall be used to pay for approved tenant improvements
and leasing commissions. Each such draw request shall be accompanied by copies
of paid invoices for the amounts requested and, if required by Lender for
requests in excess of $25,000.00 for a single item, lien waivers and releases
from all parties furnishing materials and/or services in connection with the
requested payment. Lender may require an inspection of the Properties at
Borrower’s expense prior to making a monthly disbursement in order to verify
completion of improvements in excess of $25,000.00 for which reimbursement is
sought.

 

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Section 7.5           Ground Lease Reserve Fund.

 

7.5.1           Deposits to Ground Lease Reserve Fund. Upon the occurrence and
during the continuance of a Cash Sweep Period, Borrower shall pay to Lender, on
each Payment Date thereafter, the amount equal to the rents (including both base
and additional rents) and other charges due under the Ground Lease that Lender
reasonably estimates will be payable by Borrower as lessee under the Ground
Lease and under the Master Lease that Lender reasonably estimates will be
payable by Borrower as lessee under the Master Lease (collectively, the “Ground
Rent”) for the following month in order to accumulate with Lender sufficient
funds to pay all such Ground Rent at least five (5) Business Days prior to the
respective due dates. Amounts so deposited shall hereinafter be referred to as
the “Ground Lease Reserve Fund” and the account in which such amounts are held
shall hereinafter be referred to as the “Ground Lease Reserve Account”.

 

7.5.2           Release of Ground Lease Reserve Fund. Lender shall apply amounts
in the Ground Lease Reserve Fund to the payment of the Ground Rent as and when
due under the Ground Lease or the Master Lease (as applicable) during a Cash
Sweep Period. In making any payment relating to the Ground Rent, Lender may do
so according to any bill, statement or estimate procured from the Ground Lessor
under the Ground Lease or the Master Lessor under the Master Lease, without
inquiry into the accuracy of such bill, statement or estimate, in accordance
with the payment terms set forth in the Ground Lease or the Master Lease, as
applicable. Any amounts remaining in the Ground Lease Reserve Fund after the
Debt has been paid in full shall be promptly returned to Borrower. If at any
time Lender reasonably determines that the Ground Lease Reserve Fund is not or
will not be sufficient to pay the Ground Rent by the dates set forth above,
Lender shall notify Borrower of such determination and Borrower shall increase
its monthly payments to Lender by the amount that Lender estimates is sufficient
to make up the deficiency at least five (5) Business Days prior to the due date
of the Ground Rent under the Ground Lease or the Master Lease, as applicable.

 

Section 7.6            Excess Cash Flow Reserve Fund.

 

7.6.1           Deposits to Excess Cash Flow Reserve Fund. During a Cash Sweep
Period, Borrower shall deposit with Lender all Excess Cash Flow in the Cash
Management Account after payment of all amounts required to be paid from the
Reserve Funds pursuant to Section 2.6.2(b) hereof, which shall be held by Lender
as additional security for the Loan. Amounts so held shall be hereinafter
referred to as the “Excess Cash Flow Reserve Fund” and the account to which such
amounts are held shall hereinafter be referred to as the “Excess Cash Flow
Reserve Account”.

 

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7.6.2           Release of Excess Cash Flow Reserve Funds. Upon the occurrence
of a Cash Sweep Event Cure and provided no additional Cash Sweep Period and no
Event of Default exists, all Excess Cash Flow Reserve Funds shall be delivered
to Borrower. In addition, if and to the extent a Viceroy Litigation Trigger has
occurred, all Excess Cash Flow Reserve Funds allocable to such Viceroy
Litigation Trigger shall be released pursuant to the terms and conditions of
clause (e) of the defined term “Cash Sweep Event Cure” in Article I of this
Agreement. Any Excess Cash Flow Reserve Funds remaining after the Debt has been
paid in full shall be paid (a) first, if the Mezzanine Loan remains outstanding,
to Mezzanine Lender, and (b) second, if the Mezzanine Loan has been paid in
full, to Borrower.

 

Section 7.7           Intentionally Omitted.

 

Section 7.8           Intentionally Omitted.

 

Section 7.9           WWP Fund.

 

7.9.1           Deposit to WWP Fund. On the Closing Date, Borrower shall deposit
an amount equal to $260,000,000.00 into an operating account in Borrower’s name
and solely under Borrower’s control with KeyBank, National Association to be
used by Guarantor or its Affiliates to acquire the remaining direct equity
interest in the equity owner of the World Wide Plaza Property pursuant to that
certain joint venture agreement between Guarantor and its joint venture
partner(s) (“Equity Purchase”). Amounts so deposited shall hereinafter be
referred to as Borrower’s “WWP Fund” and the account in which such amounts are
held shall hereinafter be referred to as Borrower’s “WWP Account”.
Notwithstanding anything to the contrary herein, Agent shall not be entitled to
any security interest in the WWP Account, the WWP Fund and any and all monies
now or hereafter deposited in the WWP Account. In no event shall the WWP Fund be
included in or treated as a Reserve Fund pursuant to this Agreement or any other
Loan Documents.

 

7.9.2           Withdrawal of WWP Fund. Borrower may withdraw, in its sole
discretion prior to the Initial Maturity Date, the WWP Fund for application to
the purchase price of the Equity Purchase upon and as conditions precedent
thereto: (1) not less than three (3) Business Days’ prior written notice to
Lender and (2) delivery to Lender on or prior to the closing date of the Equity
Purchase unexecuted copies of the transfer documents evidencing the Equity
Purchase, including, without limitation, a settlement statement. Promptly
following the consummation of the Equity Purchase, Borrower shall deliver to
Lender true and correct executed copies of documents evidencing the Equity
Purchase, including, without limitation, an executed settlement statement. In
addition, Borrower may elect, in its sole discretion prior to the Initial
Maturity Date and upon not less than three (3) Business Days’ prior written
notice to Lender, to deliver to Lender the WWP Fund for application to
prepayment of the Loan and the Mezzanine Loan (on a pro rata basis provided that
no Event of Default has occurred and is continuing), without payment of any
prepayment premium or spread maintenance premium or any other fee or penalty, in
accordance with the terms and conditions set forth in Section 2.4 hereof and
Section 2.4 of the Mezzanine Loan Agreement. Borrower may not use the WWP Fund
for any other purpose.

 

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Section 7.10         FF&E Reserve Fund.

 

7.10.1         Deposits to FF&E Reserve Fund. Upon the occurrence and during the
continuance of a Cash Sweep Period, Borrower shall deposit with Lender, on each
Payment Date thereafter, an amount equal to three percent (3%) of Gross Income
from Operations with respect to the Viceroy Property (or such greater amount if
required by the Management Agreement applicable to the Viceroy Property) of the
calendar month occurring two (2) calendar months prior to the calendar month of
the Payment Date on which such deposit is required (the “FF&E Reserve Monthly
Deposit”); provided, however, in the event the Viceroy Manager is collecting the
FF&E Contributions and maintaining the Reserve Fund (each as defined in the
Management Agreement applicable to the Viceroy Property) in accordance with the
Management Agreement, Borrower shall not be required to deposit the FF&E Reserve
Monthly Deposit hereunder unless the Viceroy Manager no longer maintains such
Reserve Fund and provided that the Viceroy Manager grants to Lender a
first-priority perfected security interest in such Reserve Fund and any and all
monies now or hereafter deposited in such Reserve Fund as additional security
for payment of the Debt and subject to Section 7.12 hereof. All such amounts so
deposited shall hereinafter be referred to as the “FF&E Reserve Fund” and the
account to which such amounts are held shall hereinafter be referred to as the
“FF&E Reserve Account”.

 

7.10.2         Withdrawal of FF&E Reserve Fund. Provided no Event of Default
exists, Lender shall make disbursements from the FF&E Escrow Fund for FF&E
obligations for which Borrower is responsible.

 

(a)          Lender shall disburse to Borrower the FF&E Reserve Fund upon
satisfaction by Borrower of each of the following conditions: (i) Borrower shall
submit a written request for payment to Lender at least ten (10) days prior to
the date on which Borrower requests such payment be made and specifies the FF&E
Expenditures to be paid; (ii) on the date such request is received by Lender and
on the date such payment is to be made, no Event of Default shall exist and
remain uncured, (iii) Lender shall have received a certificate from Borrower (A)
stating that the items to be funded by the requested disbursement are FF&E
Expenditures, (B) stating that all FF&E Expenditures at the Property to be
funded by the requested disbursement have been completed in a good and
workmanlike manner and in accordance with all applicable Legal Requirements,
such certificate to be accompanied by a copy of any license, permit or other
approval required by any Governmental Authority in connection with the FF&E
Expenditures, (C) identifying each Person that supplied materials or labor in
connection with the FF&E Expenditures to be funded by the requested disbursement
and (D) stating that each such Person has been paid in full or will be paid in
full upon such disbursement, such certificate to be accompanied by lien waivers,
invoices and/or other evidence of payment satisfactory to Lender; (iv) at
Lender’s option, if the cost of any individual FF&E Expenditure exceeds
$100,000, a title search for the Property indicating that the Property is free
from all liens, claims and other encumbrances other than Permitted Encumbrances;
(v) at Lender’s option, if the cost of any individual FF&E Expenditure exceeds
$100,000, Lender shall have received a report satisfactory to Lender in its
reasonable discretion from an architect or engineer approved by Lender in
respect of such architect or engineer’s inspection of the required repairs; and
(vi) Lender shall have received such other evidence as Lender shall reasonably
request that the FF&E Expenditures at the Property to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such
disbursement to Borrower. Lender shall not be required to disburse FF&E Reserve
Funds more frequently than once each calendar month nor in an amount less than
$5,000 (or a lesser amount if the total amount of FF&E Reserve Funds is less
than $5,000, in which case only one disbursement of the amount remaining in the
account shall be made).

 

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(b)          Nothing in this Section 7.10.2 shall (i) make Lender responsible
for making or completing the FF&E Expenditures; (ii) require Lender to expend
funds in addition to the FF&E Reserve Funds to complete any FF&E Expenditures;
(iii) obligate Lender to proceed with the FF&E Expenditures; or (iv) obligate
Lender to demand from Borrower additional sums to complete any FF&E
Expenditures.

 

(c)          Borrower shall permit Lender and Lender’s agents and
representatives (including, without limitation, Lender’s engineer, architect, or
inspector) or third parties to enter onto the Viceroy Property during normal
business hours to inspect the progress of any FF&E Expenditures and all
materials being used in connection therewith and to examine all plans and shop
drawings relating to such FF&E Expenditures. Borrower shall use commercially
reasonable efforts to cause all contractors and subcontractors to cooperate with
Lender or Lender’s representatives or such other Persons described above in
connection with inspections described in this Section.

 

(d)          Any FF&E Reserve Funds remaining on deposit in the FF&E Reserve
Account after the Debt has been paid in full shall be promptly returned to
Borrower.

 

Section 7.11         Common Charge Reserve Fund.

 

7.11.1         Upon the occurrence and during the continuance of a Cash Sweep
Period, Borrower shall pay to Lender, on each Payment Date thereafter,
one-twelfth of the Common Charges that Lender estimates will be payable during
the following twelve (12) months in order to accumulate with Lender sufficient
funds to pay all such Common Charges at least thirty (30) days prior to their
respective due dates. All such amounts so deposited shall hereinafter be
referred to as the “Common Charge Reserve Fund” and the account to which such
amounts are held shall hereinafter be referred to as the “Common Charge Reserve
Account”.

 

7.11.2         Release of Common Charge Reserve Fund. Lender shall apply the
Common Charge Reserve Fund to payments of Common Charges required to be made by
Borrower pursuant to the Condominium Documents and Section 5.1.36 hereof during
a Cash Sweep Period. In making any payment relating to the Common Charges,
Lender may do so according to any bill, statement or estimate procured from the
Board under the Condominium Documents, without inquiry into the accuracy of such
bill, statement or estimate, in accordance with the payment terms set forth in
the Condominium Documents. Any amounts remaining in the Common Charge Reserve
Fund after the Debt has been paid in full shall be promptly returned to
Borrower. If at any time Lender reasonably determines that the Common Charge
Reserve Fund is not or will not be sufficient to pay the Common Charges by the
dates set forth above, Lender shall notify Borrower of such determination and
Borrower shall increase its monthly payments to Lender by the amount that Lender
estimates is sufficient to make up the deficiency at least fifteen (15) days
prior to the due date of the Common Charges.

 

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Section 7.12         Reserve Funds, Generally. (a) Each of Borrower and
Operating Lessee grants to Agent a first-priority perfected security interest in
each of the Reserve Funds and any and all monies now or hereafter deposited in
each Reserve Fund as additional security for payment of the Debt. Until expended
or applied in accordance herewith, the Reserve Funds shall constitute additional
security for the Debt. Upon the occurrence of an Event of Default, Agent may, in
addition to any and all other rights and remedies available to Agent, apply any
sums then present in any or all of the Reserve Funds to the payment of the Debt
in any order in its sole discretion. The Reserve Funds shall not constitute
trust funds and may be commingled with other monies held by Agent.

 

(b)          Neither Borrower nor Operating Lessee shall, without obtaining the
prior consent of Agent, further pledge, assign or grant any security interest in
any Reserve Fund or the monies deposited therein or permit any lien or
encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1
Financing Statements, except those naming Agent as the secured party, to be
filed with respect thereto.

 

(c)          The Reserve Funds shall be held in an Eligible Account in Permitted
Investments pursuant to the Cash Management Agreement. All interest or other
earnings on a Reserve Fund (with the exception of the Tax and Insurance Reserve
Fund) shall be added to and become a part of such Reserve Fund and shall be
disbursed in the same manner as other monies deposited in such Reserve Fund. All
interest or other earnings on the Tax and Insurance Reserve Fund shall be for
the account of Agent or Servicer in consideration of its administration of such
Tax and Insurance Reserve Fund. Borrower and Operating Lessee shall have the
right to direct Agent to invest sums on deposit in the Eligible Account in
Permitted Investments, provided (a) such investments are then regularly offered
by Agent for accounts of this size, category and type, (b) such investments are
permitted by applicable federal, state and local rules, regulations and laws,
(c) the maturity date of the Permitted Investment is not later than the date on
which the applicable Reserve Funds are required for payment of an obligation for
which such Reserve Fund was created, and (d) no Event of Default shall have
occurred and be continuing. Borrower and Operating Lessee shall be responsible
for payment of any federal, state or local income or other tax applicable to the
interest or income earned on the Reserve Funds (with the exception of the Tax
and Insurance Reserve Fund). No other investments of the sums on deposit in the
Reserve Funds shall be permitted except as set forth in this Section 7.12.
Borrower and Operating Lessee shall bear all reasonable costs associated with
the investment of the sums in the account in Permitted Investments. Such costs
shall be deducted from the income or earnings on such investment, if any, and to
the extent such income or earnings shall not be sufficient to pay such costs,
such costs shall be paid by Borrower or Operating Lessee promptly on demand by
Agent or any Lender. Agent, each Lender and Servicer shall have no liability for
the rate of return earned or losses incurred on the investment of the sums in
Permitted Investments.

 

(d)          Borrower shall indemnify Agent, each Lender and Servicer and hold
Agent, each Lender and Servicer harmless from and against any and all actions,
suits, claims, demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorney’s fees and
expenses) arising from or in any way connected with the Reserve Funds or the
performance of the obligations for which the Reserve Funds were established.
Borrower and Operating Lessee shall assign to Agent all rights and claims
Borrower or Operating Lessee (as applicable) may have against all Persons
supplying labor, materials or other services which are to be paid from or
secured by the Reserve Funds; provided, however, that Agent may not pursue any
such right or claim unless an Event of Default has occurred and remains uncured.

 

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(e)          Notwithstanding anything to the contrary contained herein, any
Reserve Funds remaining after the Debt has been paid in full shall be, in the
event that the Mezzanine Loan shall remain outstanding as of such date,
delivered to Mezzanine Agent to be held by Mezzanine Agent pursuant to the
Mezzanine Loan Documents, or in the event that the Mezzanine Loan shall no
longer remain outstanding as of such date, promptly delivered to Borrower.

 

Section 7.13         Letters of Credit.

 

(a)          Security for Debt. Each Letter of Credit delivered under this
Agreement shall be additional security for the payment of the Debt. Upon the
occurrence and during the continuance of an Event of Default, Agent shall have
the right, at its option, to either (a) draw upon any Letter of Credit and to
apply all or any part of such funds to the Debt in such order, proportion or
priority as Agent may determine or (b) hold amounts so drawn as additional
security for the payment of the Debt.

 

(b)          Additional Rights of Agent. In addition to any other right Agent
may have to draw upon a Letter of Credit pursuant to the terms and conditions of
this Agreement, Agent shall have the additional rights to draw in full any
Letter of Credit: (i) if Agent has received a notice from the Issuing Bank that
the Letter of Credit will not be renewed and a substitute Letter of Credit is
not provided at least fifteen (15) Business Days prior to the date on which the
outstanding Letter of Credit is scheduled to expire; (ii) upon receipt of notice
from the Issuing Bank that the Letter of Credit will be terminated (except if
the termination of such Letter of Credit is permitted pursuant to the terms and
conditions of this Agreement or a substitute Letter of Credit is provided); or
(iii) if the Issuing Bank shall cease to be an Eligible Institution and Borrower
or Operating Lessee fails to deliver a replacement Letter of Credit within
fifteen (15) Business Days after Borrower’s or Operating Lessee’s (as
applicable) receipt of notice from Agent that the Issuing Bank is no longer an
Eligible Institution. If Agent draws on the Letter of Credit pursuant to this
Section 7.13(b) and no Event of Default exists and is continuing, then Agent
shall apply the proceeds of the Letter of Credit to Borrower’s and Operating
Lessee’s reserve obligations under this Agreement. Notwithstanding anything to
the contrary contained herein, Agent shall not be obligated to draw upon any
Letter of Credit upon the happening of an event specified in clauses (i), (ii)
or (iii) above and shall not be liable for any losses sustained by Borrower or
Operating Lessee as a result of the insolvency of the bank issuing the Letter of
Credit if Agent has not drawn upon the Letter of Credit. Neither Borrower nor
Operating Lessee shall be entitled to draw from any Letter of Credit.

 

ARTICLE VIII

 

DEFAULTS

 

Section 8.1           Event of Default. (a) Each of the following events shall
constitute an event of default hereunder (an “Event of Default”):

 

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(i)          if (A) any Monthly Debt Service Payment Amount is not paid on or
before the date it is due, (B) the Debt is not paid in full on the Maturity
Date, or (C) any other portion of the Debt not specified in the foregoing clause
(A) or (B) or any other amount payable to Lender pursuant to the Loan Documents
is not paid on or prior to the date when the same is due; provided, that with
respect to clause (C) only, such failure is continuing for five (5) Business
Days after Lender delivers notice thereof to Borrower, subject to Section 2.6.3
hereof;

 

(ii)         if any of the Taxes or Other Charges are not paid prior to the date
on which any penalties or interest would be due; provided, however, that
Lender’s failure to timely pay the Taxes or Other Charges from the Tax and
Insurance Reserve Fund shall not constitute an Event of Default if sufficient
funds collected pursuant to Section 7.2 hereof are available in the Tax and
Insurance Reserve Fund to pay such Taxes or Other Charges when due and Lender
fails to apply same when required to do so in accordance with this Agreement;

 

(iii)        if the Policies are not kept in full force and effect, or if
certified copies of the Policies are not delivered to Lender upon request (other
than the Policies with respect to a Condominium held by and in favor of a
Condominium or its Board, and not Borrower, so long as Borrower or Operating
Lessee (as applicable) have diligently used commercially reasonable efforts to
obtain such Policies); provided, however, that Lender’s failure to timely pay
the Insurance Premiums from the Tax and Insurance Reserve Fund shall not
constitute an Event of Default if sufficient funds collected pursuant to Section
7.2 hereof are available in the Tax and Insurance Reserve Fund to pay such
Insurance Premiums when due and Lender fails to apply same when required to do
so in accordance with this Agreement;

 

(iv)        if Borrower or Operating Lessee Transfers or otherwise encumbers any
portion of any Individual Property or Collateral without Lender’s prior written
consent (to the extent required herein) in violation of the provisions of this
Agreement or Article 6 of the applicable Security Instruments;

 

(v)         if any representation or warranty made by Borrower, Operating
Lessee, Operating Pledgor or Guarantor herein or in any other Loan Document, or
made by Borrower, Operating Lessee, Operating Pledgor or Guarantor in any
report, certificate, financial statement or other instrument, agreement or
document furnished to Lender by Borrower, Operating Lessee, Operating Pledgor or
Guarantor shall have been false or misleading in any material respect as of the
date the representation or warranty was made, provided that, to the extent that
Lender reasonably determines that any such false or misleading representation or
warranty was inadvertent, is non-recurring, and is capable of being cured, then
the foregoing shall only constitute an Event of Default if Borrower does not
cure such false or misleading representation or warranty within thirty (30) days
following the date on which Borrower receives notice of such false or misleading
representation or warranty from Lender;

 

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(vi)        if Borrower, Operating Lessee, Operating Pledgor or Guarantor shall
(i) make an assignment for the benefit of creditors or (ii) generally not pay
its debts as they become due;

 

(vii)       if a receiver, liquidator or trustee shall be appointed for Borrower
or Operating Lessee, or if Borrower or Operating Lessee shall be adjudicated as
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Borrower
or Operating Lessee (as applicable), or if any proceeding for the dissolution or
liquidation of Borrower or Operating Lessee shall be instituted; provided,
however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower or Operating Lessee (as
applicable), upon the same not being discharged, stayed or dismissed within
ninety (90) days;

 

(viii)      if Borrower or Operating Lessee attempts to assign its rights under
this Agreement or any of the other Loan Documents or any interest herein or
therein in contravention of the Loan Documents;

 

(ix)         if Guarantor or Operating Pledgor shall make an assignment for the
benefit of creditors or if a receiver, liquidator or trustee shall be appointed
for Guarantor or Operating Pledgor or if Guarantor or Operating Pledgor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Guarantor or Operating Pledgor, or if any proceeding for the dissolution
or liquidation of Guarantor or Operating Pledgor shall be instituted; provided,
however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Guarantor or Operating Pledgor, upon the
same not being discharged, stayed or dismissed within ninety (90) days and
Lender declares the foregoing to be an Event of Default;

 

(x)          if Borrower, Operating Lessee or Operating Pledgor breaches any of
its respective negative covenants contained in Section 5.2 hereof in any
material respect unless Borrower, Operating Lessee or Operating Pledgor (as
applicable) promptly corrects such breach within ten (10) Business Days (or such
longer period as is expressly provided for in this Agreement) after the earlier
of (i) receipt of notice from Lender thereof and (ii) Borrower, Operating Lessee
or Operating Pledgor (as applicable) gaining knowledge of such breach, or
breaches any representation, warranty or covenant contained in Section 4.1.30
hereof, unless (A) such breach is immaterial, inadvertent and non-recurring and
(B) such violation or failure to comply does not materially increase the
likelihood of substantive consolidation between Borrower, Operating Lessee or
Operating Pledgor (as applicable) and any other entity and such violation or
failure is both susceptible of cure and is promptly corrected by Borrower,
Operating Lessee or Operating Pledgor (as applicable) within thirty (30) days
after such breach occurs;

 

(xi)         with respect to any term, covenant or provision set forth herein
which specifically contains a notice requirement or grace period, if Borrower or
Operating Lessee shall be in default under such term, covenant or condition
after the giving of such notice or the expiration of such grace period;

 

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(xii)        intentionally omitted;

 

(xiii)       if a material default has occurred and continues beyond any
applicable cure period under the Management Agreement (or any Replacement
Management Agreement) and if such default permits the Manager thereunder to
terminate or cancel the Management Agreement (or any Replacement Management
Agreement) to the extent Borrower or Operating Lessee (as applicable) receives
notice of such default and fails to promptly cure such default within ten (10)
Business Days thereafter, and Borrower or Operating Lessee (as applicable) fails
to enter into a Replacement Management Agreement in accordance with the
applicable terms and conditions of this Agreement prior to the effective
termination date of the Management Agreement by Manager;

 

(xiv)      if Borrower or Operating Lessee fails to comply with the covenants as
to Prescribed Laws set forth in Section 5.1.1 hereof;

 

(xv)       Borrower shall fail to obtain and/or maintain the Interest Rate Cap
Agreement or Replacement Interest Rate Cap Agreement, as applicable, as required
pursuant to Section 2.2.8 hereof;

 

(xvi)      if Borrower or Operating Lessee shall continue to be in Default under
any of the other terms, covenants or conditions of this Agreement or any other
Loan Document not specified in this Section 8.1(a), for ten (10) days after
notice to Borrower or Operating Lessee (as applicable) from Lender, in the case
of any Default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice from Lender in the case of any other Default;
provided, however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such thirty (30) day period and provided
further that Borrower or Operating Lessee shall have commenced to cure such
Default within such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure the same, such thirty (30) day period shall be
extended for such time as is reasonably necessary for Borrower or Operating
Lessee in the exercise of due diligence to cure such Default, such additional
period not to exceed ninety (90) days;

 

(xvii)     if there shall be default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents, whether as to
Borrower, Operating Lessee or any Individual Property, or if any other such
event shall occur or condition shall exist, if the effect of such event or
condition is to accelerate the maturity of any portion of the Debt or to permit
Lender to accelerate the maturity of all or any portion of the Debt;

 

(xviii)    if Borrower or Operating Lessee shall continue to be in Default under
any of the terms, covenants or conditions of Section 9.1 hereof, or fails to
cooperate with Lender in connection with a Securitization pursuant to the
provisions of Section 9.1 hereof, each for five (5) Business Days after notice
to Borrower or Operating Lessee (as applicable) from Lender;

 

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(xix)       if an ERISA Event shall have occurred that, when taken together with
all other such ERISA Events, is reasonably likely to result in a Material
Adverse Effect;

 

(xx)        if, without Lender’s consent, any liquor license, hotel license,
and/or other material Permit reasonably required for the operation of the
Viceroy Property as it is operated as of the Closing Date, and the lack of which
would result in a Material Adverse Effect for the Viceroy Property, ceases to be
in full force and effect and, in each instance, such failure shall continue for
thirty (30) days following notice to Borrower or Operating Lessee;

 

(xxi)       intentionally omitted;

 

(xxii)      if Borrower, Operating Lessee or the Viceroy Manager fails to make
any required contributions related to employees covered by the CBA Multiemployer
Plans after Borrower, Operating Lessee and/or the Viceroy Manager is notified in
writing of a failure to make any required contributions related to employees
covered by the CBA Multiemployer Plans and Borrower, Operating Lessee and/or the
Viceroy Manager fails to cure any deficiency or contest the same within sixty
(60) days of such notice and Lender reasonably determines that such failure to
make such required contribution would result in a Material Adverse Effect;

 

(xxiii)     if (A) a default has occurred and continues beyond any applicable
cure period under the Operating Lease, (B) the Operating Lease is amended,
modified or terminated in violation of the terms of this Agreement or (C)
Borrower fails to enforce any of the terms and provisions of the Operating
Lease;

 

(xxiv)    if (A) any Borrower shall fail to pay before the expiration of any
applicable notice and grace periods, any Common Charge or any other charges,
fees, assessments or other amounts imposed upon any Borrower under the
Condominium Documents, or (B) any Borrower shall amend or consent to the
amendment of any of the Condominium Documents to the extent Borrower has the
right to vote thereon without Lender’s consent in contravention of this
Agreement, or (C) any Borrower shall otherwise be in material default under any
material term, covenant or condition of the Condominium Documents which material
default remains uncured beyond the expiration of the applicable grace or cure
period, if any, and which would otherwise have a Material Adverse Effect on the
Property;

 

(xxv)     if (A) a breach or default by Borrower under any obligation contained
in the Ground Lease is not cured within any applicable cure period provided
therein, (B) there occurs any event or condition that gives the Ground Lessor a
right to terminate or cancel the Ground Lease, or (C) the Viceroy Property shall
be surrendered or the Ground Lease shall be terminated or cancelled for any
reason or under any circumstances whatsoever, or (D) any of the terms, covenants
or conditions of the Ground Lease shall in any manner be modified, changed,
supplemented, altered, or amended without the prior written consent of Lender;

 

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(xxvi)    if (A) a breach or default by Borrower under any obligation contained
in the Master Lease is not cured within any applicable cure period provided
therein, (B) there occurs any event or condition that gives the Master Lessor a
right to terminate or cancel the Master Lease, or (C) the 350 Bleecker Street
Property shall be surrendered or the Master Lease shall be terminated or
cancelled for any reason or under any circumstances whatsoever, or (D) any of
the terms, covenants or conditions of the Master Lease shall in any manner be
modified, changed, supplemented, altered, or amended without the prior written
consent of Lender; or

 

(xxvii)   if Borrower fails to comply with the covenants as to the withdrawal
and use of the WWP Fund set forth in Section 5.2.13 and Section 7.9.2 hereof.

 

(b)          Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vi), (vii) or (viii) above) and at any time
thereafter, in addition to any other rights or remedies available to it pursuant
to this Agreement and the other Loan Documents or at law or in equity, Lender
may take such action, without notice or demand, that Lender deems advisable to
protect and enforce its rights against Borrower and Operating Lessee and in and
to any or all of the Properties, including, without limitation, declaring the
Debt to be immediately due and payable, and Lender may enforce or avail itself
of any or all rights or remedies provided in the Loan Documents against
Borrower, Operating Lessee and any or all of the Properties, including, without
limitation, all rights or remedies available at law or in equity; and upon any
Event of Default described in clauses (vi), (vii) or (viii) above, the Debt and
all other obligations of Borrower and Operating Lessee hereunder and under the
other Loan Documents shall immediately and automatically become due and payable,
without notice or demand, and each of Borrower and Operating Lessee hereby
expressly waives any such notice or demand, anything contained herein or in any
other Loan Document to the contrary notwithstanding.

 

Section 8.2           Remedies. (a) Upon the occurrence of an Event of Default,
all or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower, Operating Lessee and/or Operating Pledgor
under this Agreement or any of the other Loan Documents executed and delivered
by, or applicable to, Borrower, Operating Lessee or Operating Pledgor or at law
or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Debt shall be declared due and payable, and
whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents with respect to all or any part of any Individual Property. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singularly, successively, together or otherwise, at such time and
in such order as Lender may determine in its sole discretion, to the fullest
extent permitted by law, without impairing or otherwise affecting the other
rights and remedies of Lender permitted by law, equity or contract or as set
forth herein or in the other Loan Documents. Without limiting the generality of
the foregoing, each of Borrower, Operating Lessee and Operating Pledgor agrees
that if an Event of Default is continuing (i) Lender is not subject to any “one
action” or “election of remedies” law or rule, and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and
effect until Lender has exhausted all of its remedies against the Properties and
each Security Instrument has been foreclosed, sold and/or otherwise realized
upon in satisfaction of the Debt or the Debt has been paid in full.

 

 -140- 

 

 

(b)          With respect to Borrower, Operating Lessee and the Properties,
nothing contained herein or in any other Loan Document shall be construed as
requiring Lender to resort to any Individual Property for the satisfaction of
any of the Debt in any preference or priority to any other Individual Property,
and Lender may seek satisfaction out of the Properties, or any part thereof, in
its absolute discretion in respect of the Debt. In addition, Lender shall have
the right from time to time to partially foreclose the Security Instruments in
any manner and for any amounts secured by the Security Instruments then due and
payable as determined by Lender in its sole discretion including, without
limitation, the following circumstances: (i) in the event Borrower or Operating
Lessee defaults beyond any applicable grace period in the payment of one or more
scheduled payments of principal and interest, Lender may foreclose one or more
of the Security Instruments to recover such delinquent payments or (ii) in the
event Lender elects to accelerate less than the entire outstanding principal
balance of the Loan following an Event of Default, Lender may foreclose one or
more of the Security Instruments to recover so much of the principal balance of
the Loan as Lender may accelerate and such other sums secured by the Security
Instruments as Lender may elect. Notwithstanding one or more partial
foreclosures, the remaining Properties shall remain subject to the Security
Instruments to secure payment of sums secured by the Security Instruments and
not previously recovered.

 

(c)          Following an Event of Default, Lender shall have the right from
time to time to sever the Notes and the other Loan Documents into one or more
separate notes, mortgages and other security documents (the “Severed Loan
Documents”) in such denominations as Lender shall determine in its sole
discretion for purposes of evidencing and enforcing its rights and remedies
provided hereunder. Borrower and Operating Lessee shall execute and deliver to
Lender from time to time, promptly after the request of Lender, a severance
agreement and such other documents as Lender shall request in order to effect
the severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Lender. Each of Borrower and Operating Lessee hereby
absolutely and irrevocably appoints Lender as its true and lawful attorney,
coupled with an interest, in its name and stead to make and execute all
documents necessary or desirable to effect the aforesaid severance, Borrower and
Operating Lessee ratifying all that its said attorney shall do by virtue
thereof; provided, however, Lender shall not make or execute any such documents
under such power until an Event of Default has occurred and Lender has
accelerated the Loan. Borrower and Operating Lessee shall be obligated to pay
any costs or expenses incurred in connection with the preparation, execution,
recording or filing of the Severed Loan Documents and the Severed Loan Documents
shall not contain any representations, warranties or covenants not contained in
the Loan Documents and any such representations and warranties contained in the
Severed Loan Documents will be given by Borrower and Operating Lessee only as of
the Closing Date.

 

(d)          Subject to applicable law, Lender shall have the right from time to
time to partially foreclose any Security Instrument and/or the Pledge Agreement
in any manner and for any amounts secured by any Security Instrument and/or the
Pledge Agreement then due and payable as determined by Lender in its sole
discretion, including the following circumstances: (i) in the event Borrower
defaults beyond any applicable grace period in the payment of one or more
scheduled payments of principal and/or interest, Lender may foreclose any
Security Instrument and/or the Pledge Agreement to recover such delinquent
payments, or (ii) in the event Lender elects to accelerate less than the entire
outstanding principal balance of the Loan following an Event of Default, Lender
may foreclose any Security Instrument and/or the Pledge Agreement to recover so
much of the Debt as Lender may accelerate and such other sums secured by any
Security Instrument and/or the Pledge Agreement as Lender may elect.
Notwithstanding one or more partial foreclosures, the Property shall remain
subject to the Security Instruments and the Pledge Agreement to secure payment
of sums secured by the Security Instruments and the Pledge Agreement,
respectively, and not previously recovered.

 

 -141- 

 

 

(e)          Any amounts recovered from the Property or any other collateral for
the Loan after an Event of Default may be applied by Lender toward the payment
of any interest and/or principal of the Loan and/or any other amounts due under
the Loan Documents in such order, priority and proportions as Lender in its sole
discretion shall determine.

 

(f)          If an Event of Default exists, Lender may (directly or by its
agents, employees, contractors, engineers, architects, nominees, attorneys or
other representatives), but without any obligation to do so and without notice
to Borrower or Operating Lessee and without releasing Borrower or Operating
Lessee from any obligation hereunder, cure the Event of Default in such manner
and to such extent as Lender may deem necessary to protect the security hereof.
Lender (and its agents, employees, contractors, engineers, architects, nominees,
attorneys or other representatives) are authorized to enter upon the Property to
cure such Event of Default, and Lender is authorized to appear in, defend, or
bring any action or proceeding reasonably necessary to maintain, secure or
otherwise protect the Property or the priority of the Lien granted by the
Security Instruments.

 

(g)          If an Event of Default has occurred and is continuing and Lender
has commenced the exercise of its remedies in connection therewith, Lender may
appear in and defend any action or proceeding brought with respect to the
Property and may bring any action or proceeding, in the name and on behalf of
Borrower and/or Operating Lessee, which Lender, in its sole discretion, decides
should be brought to protect its interest in the Property. Lender shall, at its
option, be subrogated to the Lien of any mortgage or other security instrument
discharged in whole or in part by the Debt, and any such subrogation rights
shall constitute additional security for the payment of the Debt.

 

(h)          As used in this Section 8.2, a “foreclosure” shall include, without
limitation, any sale by power of sale.

 

Section 8.3           Remedies Cumulative; Waivers. The rights, powers and
remedies of Lender under this Agreement shall be cumulative and not exclusive of
any other right, power or remedy which Lender may have against Borrower,
Operating Lessee, Operating Pledgor or Guarantor pursuant to this Agreement or
the other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singularly, concurrently or
otherwise, at such time and in such order as Lender may determine in Lender’s
sole discretion. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default shall impair any such remedy, right or power
or shall be construed as a waiver thereof, but any such remedy, right or power
may be exercised from time to time and as often as may be deemed expedient. A
waiver of one Default or Event of Default with respect to Borrower, Operating
Lessee, Operating Pledgor or Guarantor shall not be construed to be a waiver of
any subsequent Default or Event of Default by Borrower, Operating Lessee,
Operating Pledgor or Guarantor or to impair any remedy, right or power
consequent thereon.

 

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ARTICLE IX

 

SPECIAL PROVISIONS

 

Section 9.1           Securitization.

 

9.1.1           Sale of Notes and Securitization. (a) Each of Borrower and
Operating Lessee acknowledges and agrees that Lender may sell all or any portion
of the Loan and the Loan Documents, or consummate one or more private or public
securitizations of rated single- or multi-class securities (the “Securities”)
secured by or evidencing ownership interests in all or any portion of the Loan
and the Loan Documents or a pool of assets that include the Loan and the Loan
Documents (such sales and/or securitizations, collectively, a “Securitization”).

 

(b)          In connection with a Securitization or Participation, at the
request of Lender, and to the extent not already required to be provided by or
on behalf of Borrower or Operating Lessee under this Agreement, Borrower and
Operating Lessee shall use reasonable efforts to provide information not in the
possession of Lender or which may be reasonably required by Lender or take other
actions reasonably required by Lender, in each case in order to satisfy the
market standards to which Lender customarily adheres or which may be reasonably
required by prospective investors and/or the Rating Agencies in connection with
any such Securitization or Participation (but in no event shall such cooperation
result in any increase in any obligations of Borrower or rights of Lender or
decrease in any rights of Borrower or obligations of Lender under the Loan
Documents or change in any of the economic or monetary provisions of the Loan or
the Loan Documents and not result in any “rate creep” under the Loan Agreement
prior to any Event of Default). Lender shall have the right to provide to
prospective investors and the Rating Agencies any information in its possession,
including, without limitation, financial statements relating to Borrower,
Operating Lessee, Guarantor, if any, the Properties and any Tenant of the
Improvements. Each of Borrower and Operating Lessee acknowledges that certain
information regarding the Loan and the parties thereto and the Properties may be
included in a private placement memorandum, prospectus or other disclosure
documents. Each of Borrower and Operating Lessee agrees that each of Borrower,
Operating Lessee, Guarantor and their respective officers and representatives,
shall, at Lender’s request, at Lender’s sole cost and expense subject to Section
9.1.2 hereof, cooperate with Lender’s efforts to arrange for a Securitization or
Participation in accordance with the market standards to which Lender
customarily adheres and/or which may be required by prospective investors and/or
the Rating Agencies in connection with any such Securitization or Participation
(as applicable). Borrower, Operating Lessee and Guarantor agree to review, at
Lender’s request in connection with the Securitization, the Disclosure Documents
as such Disclosure Documents relate to Borrower, Operating Lessee, Operating
Pledgor, Guarantor, Manager, the Properties and the Loan, including without
limitation, the sections entitled “Risk Factors,” “Special Considerations,”
“Description of the Security Instruments,” “Description of the Mortgage Loan and
Mortgaged Property,” “The Ground Lease,” “The Master Lease,” “The Operating
Lease,” “The Condominiums,” “The Manager,” “The Borrower,” “The Ground Lessee”,”
“The Master Lessee,” “The Operating Lessee” and “Certain Legal Aspects of the
Mortgage Loan” (or sections similarly titled or covering similar subject
matters) and shall confirm that the factual statements and representations
contained in such sections and such other information in the Disclosure
Documents (to the extent such information relates to, or is based on, or
includes any information regarding the Properties, Borrower, Operating Lessee,
Operating Pledgor, Guarantor, Manager and/or the Loan) do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they
were made, not misleading.

 

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(c)          In connection with a Securitization or Participation, Borrower
agrees to make upon Lender’s written request, without limitation, all structural
or other changes to the Loan (including delivery of one or more new component
notes to replace the original notes or modify the original notes to reflect
multiple components of the Loan and such new notes or modified notes may have
different interest rates and amortization schedules), modifications to any
documents evidencing or securing the Loan, creation of one or more mezzanine
loans (including amending Borrower’s organizational structure to provide for one
or more mezzanine borrowers), delivery of opinions of counsel acceptable to the
Approved Rating Agencies or potential investors and addressing such matters as
the Approved Rating Agencies or potential investors may require; provided,
however, that in creating such new notes or modified notes or mezzanine notes
Borrower shall not be required to modify (i) the initial weighted average
interest rate payable under the Notes or take any other action which would
result in “rate creep” prior to any Event of Default, (ii) the stated maturity
of the Notes, (iii) the provisions related to pro rata payment between the Loan
and any mezzanine loans and among the notes for each such loan prior to an Event
of Default, (iv) the aggregate principal of the Notes, (v) any other material
economic term of the Loan, (vi) decrease the time periods during which Borrower
is permitted to perform its obligations under the Loan Documents, or (vii)
increase the obligations or decrease the rights of Borrower pursuant to the Loan
Documents or increase the rights or reduce the obligations of Lender, nor shall
Borrower (subject to Section 9.1.3 hereof) be required to modify its
organizational structure or make any other modification, if such modification
would cause it or any of its Affiliates or direct or indirect owners to incur
any additional tax liability. In connection with the foregoing, each of Borrower
and Operating Lessee covenants and agrees to modify the Cash Management
Agreement to reflect the newly created components and/or mezzanine loans.

 

(d)          If requested by Lender, Borrower and Operating Lessee shall provide
Lender, promptly upon request, with any financial statements, financial,
statistical or operating information or other information as Lender shall
reasonably determine necessary or appropriate (including items required (or
items that are required if the Securitization is offered publicly) pursuant to
Regulation AB under the Securities Act, or the Exchange Act, or any amendment,
modification or replacement thereto) or required by any other legal
requirements, in each case, in connection with any private placement memorandum,
prospectus or other disclosure documents or materials or any filing pursuant to
the Exchange Act in connection with the Securitization or as shall otherwise be
reasonably requested by Lender, provided that Borrower and Operating Lessee
shall provide such information solely to the extent such information is
reasonably obtainable using systems then in place by Borrower or Operating
Lessee, or otherwise Borrower and Operating Lessee shall provide such
information at Lender’s cost and expense.

 

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9.1.2           Securitization Costs. All reasonable third party costs and
expenses incurred by Borrower, Operating Lessee, Guarantor and Manager in
connection with Borrower’s complying with requests made under this Section 9.1
(including, without limitation, the fees and expenses of the Rating Agencies)
shall be paid by Lender, except Borrower, Operating Lessee, Guarantor and
Manager shall pay their own legal fees in excess of $5,000.00 except those fees
incurred for providing opinions that were not required to be provided on the
Closing Date (excluding any update or “bring down” of the opinions provided on
the Closing Date) but are required in connection with such Securitization, the
fees for which shall be paid or reimbursed by Lender.

 

9.1.3           Mezzanine Loans. (a) Notwithstanding the provisions of
Section 9.1 to the contrary, Borrower covenants and agrees that after the
Closing Date and prior to a Securitization, Lender shall have the right to
establish different interest rates and to reallocate the principal balances of
each of the Loan and the Mezzanine Loan between each other, provided that (i)
the payment of the Loan and the Mezzanine Loan continue to be paid pro rata
prior to an Event of Default, (ii) the weighted average spread of the Loan and
the Mezzanine Loan following any such reallocation or modification shall not be
changed from the weighted average interest rate in effect immediately preceding
such reallocation or modification prior to an Event of Default, (iii) the total
loan amounts for the mortgage and mezzanine loans shall equal the then
outstanding amount of the Mortgage Loan and the Mezzanine Loan immediately prior
to Lender’s restructuring pursuant to this Section 9.1.3, (iv) such
modifications will not increase Borrower’s obligations and liabilities under the
Loan Documents or Mezzanine Borrower’s obligations and liabilities under the
Mezzanine Loan Documents, or decrease Borrower’s rights under the Loan Documents
or Mezzanine Borrower’s rights under the Mezzanine Loan Documents, or decrease
Lender’s obligations under the Loan Documents or Mezzanine Lender’s obligations
under the Mezzanine Loan Documents, or increase Lender’s rights under the Loan
Documents or Mezzanine Lender’s rights under the Mezzanine Loan Documents and
(v) no additional mortgage tax shall be due with respect to the Security
Instruments, provided that, if additional mortgage tax shall be due and Lender
shall agree to pay such additional mortgage tax at its sole cost and expense,
such additional mortgage tax shall not prevent Lender from exercising its rights
under this Section 9.1.3(a).

 

(b)          Notwithstanding the provisions of Section 9.1 to the contrary, each
Borrower covenants and agrees that after the Closing Date and prior to a
Securitization, Lender shall have the right to create one or more additional
mezzanine loans (each, a “New Mezzanine Loan”), to establish different interest
rates and to reallocate principal balances of each of the Loan, the Mezzanine
Loan and any New Mezzanine Loan(s) amongst each other and to reallocate the
interest rate among the Loan, the Mezzanine Loan and any new Mezzanine Loan(s)
and to require the payment of the Loan, the Mezzanine Loan and any New Mezzanine
Loan(s) to be made pro rata prior to an Event of Default; provided, that (i) in
no event shall the weighted average interest rate of the Loan, the Mezzanine
Loan and any New Mezzanine Loan(s) following any such reallocation or
modification change from the weighted average interest rate for all in effect
immediately preceding such reallocation, modification or creation of any New
Mezzanine Loan(s), and (ii) such New Mezzanine Loan(s) will not increase
Borrower’s obligations and liabilities under the Loan Documents, or decrease the
rights of Borrower under the Loan Documents, or decrease Lender’s obligations
under the Loan Documents or Mezzanine Lender’s obligations under the Mezzanine
Loan Documents, or increase Lender’s rights under the Loan Documents or
Mezzanine Lender’s rights under the Mezzanine Loan Documents. Borrower shall
execute and deliver such documents as shall reasonably be required by Lender as
promptly as possible under the circumstances in connection with this
Section 9.1.3, all in form and substance reasonably satisfactory to Borrower,
Lender and the Rating Agencies, including, without limitation, in connection
with the creation of any New Mezzanine Loan, a promissory note and loan
documents necessary to evidence such New Mezzanine Loan, and Borrower and
Operating Lessee (as applicable) shall execute such amendments to the Loan
Documents and the Mezzanine Loan Documents as are necessary in connection with
the creation of such New Mezzanine Loan all of which shall be on substantially
the same terms and conditions as the Loan Documents. In addition, Borrower shall
cause the formation of one or more special purpose, bankruptcy remote entities
as required by Lender in order to serve as the borrower under any New Mezzanine
Loan (each, a “New Mezzanine Borrower”) and the applicable organizational
documents of Borrower and Mezzanine Borrower shall be amended and modified as
necessary or required in the formation of any New Mezzanine Borrower. Further,
in connection with any New Mezzanine Loan, Borrower shall deliver to Lender
opinions of legal counsel, in substantially the same form as were delivered in
connection with the Loan, with respect to due execution, authority and
enforceability of the New Mezzanine Loan and the Loan Documents and Mezzanine
Loan Documents, as amended, each as reasonably acceptable to Lender, prospective
investors and/or the Rating Agencies.

 

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9.1.4           Participations.

 

(a)          Each of Borrower and Operating Lessee acknowledges and agrees that
Lender may at any time issue one or participation interests in the Loan (each, a
“Participation”).

 

(b)          Each Lender that sells a participation pursuant to Section 9.1.4(a)
shall, acting solely for this purpose as an agent of the Borrower, maintain a
register on which it enters the name and address of each participant and the
principal amounts (and stated interest) of each participant’s interest in the
Loan or other Obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any participant or any
information relating to a participant’s interest in any Obligations under any
Loan Document) to any Person except to the extent that such disclosure is
necessary to establish that such Obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

 

Section 9.2           Securitization Indemnification. (a) Each of Borrower and
Operating Lessee understands that certain of the Provided Information may be
included in Disclosure Documents in connection with the Securitization and may
also be included in filings with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the “Securities Act”), or the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower and Operating Lessee will
cooperate with the holder of any Note in updating the Disclosure Document by
providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.

 

 -146- 

 

  

(b)          The Indemnifying Persons agree to provide, in connection with the
Securitization, an indemnification agreement in form reasonably satisfactory to
Lender and the Indemnifying Persons (i) certifying that (A) each Indemnifying
Person has examined those portions of the Disclosure Documents specified by
Lender and provided to such Indemnifying Person which may include, without
limitation, the sections entitled “Risk Factors”, “Special Considerations”,
“Description of the Security Instruments”, “Description of the Mortgage Loans
and Mortgaged Property”, “The Ground Lease,” “The Master Lease,” “The Operating
Lease,” “The Condominiums,” “The Manager”, “The Borrower,” “The Ground Lessee”,”
“The Master Lessee,” “The Operating Lessee” and “Certain Legal Aspects of the
Mortgage Loan”, and (B) such sections (to the extent such information relates to
or includes any Provided Information or any information regarding the Property,
Borrower, Operating Lessee, Operating Pledgor, Manager which is an Affiliate of
Borrower, Operating Lessee or Guarantor, and/or the Loan) (collectively with the
Provided Information, the “Covered Disclosure Information”), and such Covered
Disclosure Information does not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in the light of the circumstances under which they were made, not misleading,
(ii) jointly and severally indemnifying Lender, Credit Suisse (whether or not it
is the Lender), any Affiliate of Credit Suisse that has filed any registration
statement relating to the Securitization or has acted as the sponsor or
depositor in connection with the Securitization, any Affiliate of Credit Suisse
that acts as an underwriter, placement agent or initial purchaser of Securities
issued in the Securitization, any other co-underwriters, co-placement agents or
co-initial purchasers of Securities issued in the Securitization, and each of
their respective officers, directors, partners, employees, representatives,
agents and Affiliates and each Person or entity who Controls any such Person
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the “Indemnified Persons”), for any losses, claims,
damages, liabilities, costs or expenses (including, without limitation,
reasonable legal fees and expenses for enforcement of these obligations
(collectively, the “Liabilities”)) to which any such Indemnified Person may
become subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Covered Disclosure Information or arise out of or are based upon the
omission or alleged omission to state in the Covered Disclosure Information a
material fact required to be stated therein or necessary in order to make the
statements in the Covered Disclosure Information, in light of the circumstances
under which they were made, not misleading and (iii) agreeing to reimburse each
Indemnified Person for any legal or other expenses incurred by such Indemnified
Person, as they are incurred, in connection with investigating or defending the
Liabilities; provided, however, that (x) the Indemnifying Person will be liable
in any such case under Section 9.1.4(b) only to the extent that any such loss
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by or on behalf of the Indemnifying Person in
connection with the preparation of the Disclosure Document, (y) the Indemnifying
Person shall not be obligated to provide the certification set forth herein or
be liable hereunder if such Indemnifying Person has not been afforded reasonable
time under the circumstances to review and comment on the applicable sections of
the applicable Disclosure Document, and (z) no Indemnifying Person shall be
liable in connection with the above with respect to any statement or omission or
any failure of Lender to accurately transcribe any portion of the Covered
Disclosure Information provided by such Indemnifying Person. This indemnity
agreement will be in addition to any liability which Borrower may otherwise
have. Moreover, the indemnification and reimbursement obligations provided for
in clauses (ii) and (iii) above shall be effective, valid and binding
obligations of the Indemnifying Persons, whether or not an indemnification
agreement described in clause (i) above is provided.

 

 -147- 

 

  

(c)          In connection with any filing pursuant to the Exchange Act in
connection with or relating to the Securitization, the Indemnifying Persons
jointly and severally agree to indemnify (i) the Indemnified Persons for
Liabilities to which any such Indemnified Person may become subject insofar as
the Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact in the Covered Disclosure Information, or
the omission or alleged omission to state in the Covered Disclosure Information
a material fact required to be stated therein or necessary in order to make the
statements in the Covered Disclosure Information, in light of the circumstances
under which they were made, not misleading and (ii) reimburse each Indemnified
Person for any legal or other expenses incurred by such Indemnified Persons, as
they are incurred, in connection with defending or investigating the
Liabilities; provided, however, that (x) the Indemnifying Person will be liable
in any such case under Section 9.2(c) only to the extent that any such loss
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by or on behalf of the Indemnifying Person in
connection with the preparation of the Disclosure Document, (y) the Indemnifying
Person shall not be obligated to provide the certification set forth herein or
be liable hereunder if such Indemnifying Person has not been afforded reasonable
time under the circumstances to review and comment on the applicable sections of
the applicable Disclosure Document, and (z) no Indemnifying Person shall be
liable in connection with the above with respect to any statement or omission or
any failure of Lender to accurately transcribe any portion of the Covered
Disclosure Information provided by such Indemnifying Person.

 

(d)          Borrower shall indemnify Lender and each of its respective
officers, directors, partners, employees, representatives, agents and Affiliates
against any liabilities to which Lender, each of its respective officers,
directors, partners, employees, representatives involved in the origination of
the Loan or the Securitization, agents and Affiliates, may become subject in
connection with any indemnification to the Rating Agencies in connection with
issuing, monitoring or maintaining the Securities insofar as the liabilities
arise out of or are based upon any untrue statement of any material fact in any
information provided by or on behalf of the Borrowers and Operating Lessee to
the Rating Agencies (the “Covered Rating Agency Information”) or arise out of or
are based upon the omission to state a material fact in the Covered Rating
Agency Information required to be stated therein or necessary in order to make
the statements in the Covered Rating Agency Information, in light of the
circumstances under which they were made, not misleading.

 

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(e)          Promptly after receipt by an Indemnified Person of notice of any
claim or the commencement of any action, the Indemnified Person shall, if a
claim in respect thereof is to be made against any Indemnifying Person, notify
such Indemnifying Person in writing of the claim or the commencement of that
action; provided, however, that the failure to notify such Indemnifying Person
shall not relieve it from any liability which it may have under the
indemnification provisions of this Section 9.2 except to the extent that it has
been materially prejudiced by such failure and, provided further that the
failure to notify such Indemnifying Person shall not relieve it from any
liability which it may have to an Indemnified Person otherwise than under the
provisions of this Section 9.2. If any such claim or action shall be brought
against an Indemnified Person, and it shall notify any Indemnifying Person
thereof, such Indemnifying Person shall be entitled to participate therein and,
to the extent that it wishes, assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Person. After notice from any Indemnifying
Person to the Indemnified Person of its election to assume the defense of such
claim or action, such Indemnifying Person shall not be liable to the Indemnified
Person for any legal or other expenses subsequently incurred by the Indemnified
Person in connection with the defense thereof except as provided in the
following sentence; provided, however, if the defendants in any such action
include both an Indemnifying Person, on the one hand, and one or more
Indemnified Persons on the other hand, and an Indemnified Person shall have
reasonably concluded that there are any legal defenses available to it and/or
other Indemnified Persons that are different or in addition to those available
to the Indemnifying Person, the Indemnified Person or Persons shall have the
right to select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Person
or Persons. The Indemnified Person shall instruct its counsel to maintain
reasonably detailed billing records for fees and disbursements for which such
Indemnified Person is seeking reimbursement hereunder and shall submit copies of
such detailed billing records to substantiate that such counsel’s fees and
disbursements are solely related to the defense of a claim for which the
Indemnifying Person is required hereunder to indemnify such Indemnified Person.
No Indemnifying Person shall be liable for the expenses of more than one (1)
such separate counsel unless such Indemnified Person shall have reasonably
concluded that there is an actual conflict of interest between the Indemnified
Parties seeking separate representation.

 

(f)          Without the prior written consent of Credit Suisse (which consent
shall not be unreasonably withheld), no Indemnifying Person shall settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such claim, action, suit or proceeding) unless the
Indemnifying Person shall have given Credit Suisse reasonable prior notice
thereof and shall have obtained an unconditional release of each Indemnified
Person hereunder from all liability arising out of such claim, action, suit or
proceedings. As long as an Indemnifying Person has complied with its obligations
to defend and indemnify hereunder, such Indemnifying Person shall not be liable
for any settlement made by any Indemnified Person without the consent of such
Indemnifying Person (which consent shall not be unreasonably withheld).

 

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(g)          The Indemnifying Persons agree that if any indemnification or
reimbursement sought pursuant to this Section 9.2 is finally judicially
determined to be unavailable for any reason or is insufficient to hold any
Indemnified Person harmless (with respect only to the Liabilities that are the
subject of this Section 9.2), then the Indemnifying Persons, on the one hand,
and such Indemnified Person, on the other hand, shall contribute to the
Liabilities for which such indemnification or reimbursement is held unavailable
or is insufficient: (x) in such proportion as is appropriate to reflect the
relative benefits to the Indemnifying Persons, on the one hand, and such
Indemnified Person, on the other hand, from the transactions to which such
indemnification or reimbursement relates; or (y) if the allocation provided by
clause (x) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (x)
but also the relative faults of the Indemnifying Persons, on the one hand, and
all Indemnified Persons, on the other hand, as well as any other equitable
considerations. Notwithstanding the provisions of this Section 9.2, (A) no party
found liable for a fraudulent misrepresentation shall be entitled to
contribution from any other party who is not also found liable for such
fraudulent misrepresentation, and (B) the Indemnifying Persons agree that in no
event shall the amount to be contributed by the Indemnified Persons collectively
pursuant to this paragraph exceed the amount of the fees (by underwriting
discount or otherwise) actually received by the Indemnified Persons in
connection with the closing of the Loan or the Securitization.

 

(h)          The Indemnifying Persons agree that the indemnification,
contribution and reimbursement obligations set forth in this Section 9.2 shall
apply whether or not any Indemnified Person is a formal party to any lawsuits,
claims or other proceedings. The Indemnifying Persons further agree that the
Indemnified Persons are intended third party beneficiaries under this
Section 9.2.

 

(i)          The liabilities and obligations of the Indemnified Persons and the
Indemnifying Persons under this Section 9.2 shall survive the termination of
this Agreement and the satisfaction and discharge of the Debt.

 

(j)          Notwithstanding anything to the contrary contained herein, Borrower
shall have no obligation to act as depositor with respect to the Loan or an
issuer or registrant with respect to the Securities issued in any
Securitization.

 

Section 9.3           Agent.

 

(a)          Column Financial, Inc. (“Column”) shall act as Agent for itself and
the Co-Lenders pursuant to this Section 9.3. Column, by execution hereof, hereby
accepts such appointment as Agent. Borrower acknowledges that Agent shall have
the sole and exclusive authority to execute and perform this Agreement and each
Loan Document on behalf of itself, as a Lender and as agent for itself and the
Co-Lenders. Each Co-Lender acknowledges that Agent shall retain the exclusive
right to grant approvals and give consents and approvals with respect to all
matters requiring Lender’s consent or approval hereunder. Notwithstanding
anything to the contrary in this Agreement, all references herein or in any
other Loan Document to Lender shall mean “Lender” or “Agent on behalf of
Lender”, as the context may require. Each Co-Lender agrees that, with respect to
Required Lender Decisions (as defined in the Co-Lender Agreement), if there are
two (2) or more Co-Lenders that are not Defaulting Lenders (as defined in the
Co-Lender Agreement), then the approval of Co-Lenders that are not Defaulting
Lenders and which cumulatively own not less than sixty percent (60%) of the then
aggregate unpaid principal amount of the Loan (after subtracting the interest or
interests owned by any Defaulting Lenders, given that no Defaulting Lender has
voting rights under the Co-Lender Agreement) shall be required (the “Required
Lender Threshold”). So long as no Event of Default has occurred and is
continuing, such Required Lender Threshold may not be amended or modified
without the prior written consent of Borrower (not to be unreasonably withheld,
conditioned or delayed). Except as otherwise expressly provided herein, Borrower
shall have no obligation to recognize or deal directly with any Co-Lender, and
no Co-Lender shall have any right to deal directly with Borrower with respect to
the rights, benefits and obligations of Borrower under this Agreement, the Loan
Documents or any one or more documents or instruments in respect thereof.
Borrower may rely conclusively on the actions of Agent to bind Lender and the
Co-Lenders, notwithstanding that the particular action in question may, pursuant
to this Agreement be subject to the consent or direction of some or all of the
Co-Lenders. Any Agent may resign as Agent of the Co-Lenders subject to the
reasonable approval of Borrower (not to be unreasonably withheld, conditioned or
delayed); provided, however, that Agent may resign as Agent under this Agreement
and the other Loan Documents without Borrower’s approval or consent if (1)
required by a subpoena, or judicial or administrative process, or (2) if
required by any applicable regulatory authority (including, without limitation,
self-regulatory authorities (including, without limitation, FINRA)), or (3)
neither Agent nor any Affiliate successor or assign doing business in the United
States will be engaged going forward, or is no longer engaged in the United
States of America in the business of holding interests in commercial real estate
loans. Prior to the effectiveness of any such resignation, a successor Agent
shall be determined by the Lenders subject to the reasonable approval of
Borrower (not to be unreasonably withheld, conditioned or delayed) and such
successor Agent shall be appointed effective immediately upon the effective date
of such resignation. The term “Agent” shall mean Column and any successor Agent.

 

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(b)          Notwithstanding any provision to the contrary in this Agreement,
the Agent shall not have any duties or responsibilities to Borrower except those
expressly set forth herein and no covenants, functions, responsibilities,
duties, obligations or liabilities of Agent shall be implied by or inferred from
this Agreement or any other Loan Document, or otherwise exist against Agent.

 

(c)          Except to the extent its obligations hereunder and its interest in
the Loan have been assigned pursuant to one or more assignment and assumption
agreements, Column, in its capacity as a Co-Lender (and not as Agent), shall
have the same rights and powers under this Agreement as any other Co-Lender and
may exercise the same in its capacity as a Lender. Lender and the other
Co-Lenders and their respective Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any kind of
business with, Borrower, or any Affiliate of Borrower and any Person who may do
business with or own securities of Borrower or any Affiliate of Borrower, all as
if they were not serving in such capacities hereunder and without any duty to
account therefor to each other.

 

(d)          If required by any Co-Lender, Borrower agrees to make reasonable
changes to the Loan (including delivery of one or more new component notes to
replace the original notes or modify the original notes to reflect multiple
components of the Loan and such new notes or modified notes may have different
interest rates and amortization schedules), modifications to any documents
evidencing or securing the Loan, creation of one or more mezzanine loans
(including amending Borrower’s organizational structure to provide for one or
more mezzanine borrowers), delivery of opinions of counsel in substantially
similar form and substance to the opinions of counsel delivered as of the
Closing Date and reasonably acceptable to the Co-Lenders for which the
reasonable, out-of-pocket costs actually incurred shall be paid or reimbursed by
the requesting Lender; provided, however, that in creating such new notes or
modified notes or mezzanine notes or undertaking any of the foregoing, the
foregoing shall not (i) modify the weighted average interest rate payable under
the Notes or result in “rate creep” prior to any Event of Default, (ii) modify
the stated maturity of the Notes, (iii) modify the provisions related to pro
rata payment between the Loan and any mezzanine loans and among the notes for
each such loan prior to an Event of Default, (iv) modify the aggregate principal
of the Notes, (v) modify any other material economic term of the Loan,
(vi) decrease the time periods during which Borrower is permitted to perform its
obligations under the Loan Documents, or (vii) increase the obligations or
decrease the rights of Borrower pursuant to the Loan Documents or increase the
rights or reduce the obligations of Lender, nor shall Borrower (subject to
Section 9.1.3 hereof) be required to modify its organizational structure or make
any other modification, if such modification would cause it or any of its
Affiliates or direct or indirect owners to incur any additional tax liability
not already contemplated by the terms and conditions of this Agreement prior to
any such modification. In connection with the foregoing, each of Borrower and
Operating Lessee covenants and agrees to modify the Cash Management Agreement to
reflect the newly created components and/or mezzanine loans.

 

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(e)          Agent, shall maintain at its domestic lending office or at such
other location as Agent and shall designate in writing to each Co-Lender and
Borrower a copy of each assignment and assumption agreement delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Co-Lenders, the amount of each Co-Lender’s proportionate share of the Loan
and the name and address of each Co-Lender’s agent for service of process (the
“Register”). No assignment shall be effective unless recorded in the Register.
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrower, Agent, and the Co-Lenders shall treat each
person or entity whose name is recorded in the Register as a Co-Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection and copying by Borrower or any Co-Lender during normal business hours
upon reasonable prior notice to the Agent. For the avoidance of doubt, this
Section 9.3(e) shall be construed so that all Loans are at all times maintained
in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881
(c)(2) of the Code, and any related Treasury regulations (or any other relevant
or successor provisions of the Code or of such Treasury regulations). A
Co-Lender may change its address and its agent for service of process upon
written notice to Column, as Agent, and to Borrower, which notice shall only be
effective upon actual receipt by Agent and by Borrower, which receipt will be
acknowledged by Agent and by Borrower upon request.

 

(f)          Notwithstanding anything to the contrary set forth herein, no
Lender (together with any Affiliates) may own more than fifty percent (50%) of
the then aggregate unpaid principal amount of the Loan without the prior written
consent of Borrower (not to be unreasonably withheld, conditioned or delayed),
other than Column and its Affiliates, Western Asset Management Company and its
Affiliates, and any trust pursuant to a Securitization (so long as neither
Control of the trust is held, nor more than fifty percent (50%) of the
beneficial interests in such trust is owned, in either case, by any Person
(together with any Affiliates) other than Column and its Affiliates and/or
Western Asset Management Company and its Affiliates), for which such limitation
shall not be applicable.

 

(g)          Notwithstanding any other provision set forth in this Agreement,
Lender or any Co-Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation,
amounts owing to it in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System).

 

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Section 9.4           No Exculpation.  (a) Nothing contained herein shall in any
manner or way release, affect or impair the right of Agent on behalf of the
Lenders to recover, and Borrower shall be fully and personally liable and
subject to legal action, for any loss, cost, expense, damage, claim or other
obligation (including without limitation reasonable attorneys’ fees and court
costs) incurred or suffered by Lender arising out of or in connection with the
Notes, this Agreement, the Security Instruments or the other Loan Documents.
Agent may enforce the liability and obligation of Borrower and Operating Lessee
(as applicable) to perform and observe the obligations contained in the Notes,
this Agreement, the Security Instruments or the other Loan Documents by any
action or proceeding wherein a money judgment shall be sought against Borrower.
Agent may bring a foreclosure action, an action for specific performance or any
other appropriate action or proceeding to enable Lender to enforce and realize
upon its interest under the Notes, this Agreement, the Security Instruments and
the other Loan Documents, or in the Properties, the Rents, or any other
collateral given to Agent pursuant to the Loan Documents and in the event that
any judgment in any such action or proceeding shall be greater than the extent
of Borrower’s or Operating Lessee’s interest in the Properties, in the Rents, in
the Collateral and in any other collateral given to Agent, and Agent may sue
for, seek or demand any deficiency judgment against Borrower in any such action
or proceeding under or by reason of or under or in connection with the Notes,
this Agreement, the Security Instruments or the other Loan Documents.

 

(b)          Notwithstanding anything to the contrary in this Section 9.4 or any
other provision of this Agreement or any other Loan Document, Operating Lessee
shall not be liable to Lender under this Section 9.4 or any other provision of
this Agreement or any other Loan Document (including, without limitation, any
liability for all or any portion of the Debt), provided that, upon the
occurrence of an Event of Default hereunder, Agent shall have the right to
foreclose upon Operating Lessee’s interest in the Viceroy Property subject to
and in accordance with the terms hereof and of the applicable Security
Instruments and any other collateral securing the Loan in which Operating Lessee
now or hereafter has any right, title or interest, including, without
limitation, the Collateral under the Pledge Agreement.

 

(c)          Notwithstanding anything to the contrary in this Agreement, the
Notes or any of the Loan Documents, Agent may exercise its rights under
Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code
to file a claim for the full amount of the Debt secured by the Security
Instruments and the Pledge Agreement or to require that all Properties and
Collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Loan Documents.

 

(d)          In no event shall Borrower or Guarantor have any liability under
this Agreement or any other Loan Document for special, incidental, indirect or
consequential damages.

 

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Section 9.5           Matters Concerning Manager.  If (i) the Loan is
accelerated after the occurrence of an Event of Default or the Mezzanine Loan is
accelerated after the occurrence of a Mezzanine Loan Event of Default occurs and
is continuing, (ii) the Manager shall become subject to a Bankruptcy Action or
(iii) a material default occurs under the Management Agreement beyond any
applicable grace and cure periods, Borrower or Operating Lessee (as applicable)
shall, at the request of Lender, terminate the Management Agreement and replace
the Manager with a Qualified Manager pursuant to a Replacement Management
Agreement on terms and conditions reasonably satisfactory to Lender.

 

Section 9.6           Servicer.  At the option of Lender, the Loan may be
serviced by a master servicer, primary servicer, special servicer and/or trustee
(any such master servicer, primary servicer, special servicer, and trustee,
together with its agents, nominees or designees, are collectively referred to as
“Servicer”) selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to Servicer
pursuant to a pooling and servicing agreement, servicing agreement, special
servicing agreement or other agreement providing for the servicing of one or
more mortgage loans (collectively, the “Servicing Agreement”) between Lender and
Servicer; provided, however, except as expressly set forth in this Section 9.6,
Borrower shall not be responsible for the regular monthly master servicing fee
or trustee fee due to Servicer under the Servicing Agreement or any fees or
expenses required to be borne by, and not reimbursable to, Servicer.
Notwithstanding the foregoing, Borrower shall promptly reimburse Lender within
five (5) Business Days of a demand for (a) interest payable on advances made by
Servicer with respect to delinquent debt service payments (to the extent charges
are due pursuant to Sections 2.2.4 and 2.3.5 and interest at the Default Rate
actually paid by Borrower in respect of such payments are insufficient to pay
the same) or expenses paid by Servicer or trustee in respect of the protection
and preservation of the Property (including, without limitation, payments of
Taxes and Insurance Premiums) and (b) the following costs and expenses,
liquidation fees, workout fees, special servicing fees, operating advisor fees
or any other similar fees payable by Lender to Servicer (including any
reasonable attorneys’ fees and expenses): (i) as a result of an Event of Default
under the Loan or the Loan becoming specially serviced, an enforcement,
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” of the Loan Documents or of any
insolvency or bankruptcy proceeding; (ii) following an Event of Default, any
liquidation fees, workout fees, special servicing fees, operating advisor fees
or any other similar fees that are due and payable to Servicer under the
Servicing Agreement or the trustee, which fees may be due and payable under the
Servicing Agreement on a periodic or continuing basis; (iii) following an Event
of Default, the costs of all property inspections and/or appraisals of the
Property (or any updates to any existing inspection or appraisal) that Servicer
or the trustee may be required to obtain (other than the cost of regular annual
inspections required to be borne by Servicer under the Servicing Agreement or
required under the terms and conditions of this Agreement); or (iv) any special
requests made by Borrower, Operating Lessee or Guarantor during the term of the
Loan including, without limitation, in connection with a prepayment, assumption
or modification of the Loan not otherwise provided for in this Agreement.

 

Section 9.7           Intercreditor Agreement.  Agent and Mezzanine Agent are
parties to the Intercreditor Agreement memorializing their relative rights and
obligations with respect to the Loan and the Mezzanine Loan, Borrower, Mezzanine
Borrower and the Properties. Borrower hereby acknowledges and agrees that (i)
such Intercreditor Agreement is intended solely for the benefit of Agent and
Mezzanine Agent and (ii) Borrower and Mezzanine Borrower are not intended
third-party beneficiaries of any of the provisions therein and shall not be
entitled to rely on any of the provisions contained therein. Agent and Mezzanine
Agent shall have no obligation to disclose to Borrower the contents of the
Intercreditor Agreement. Borrower’s obligations hereunder are independent of
such Intercreditor Agreement and remain unmodified by the terms and provisions
thereof.

 

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ARTICLE X

 

MISCELLANEOUS

 

Section 10.1         Survival.  This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Notes, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth herein or in the other Loan Documents. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on behalf
of Borrower and Operating Lessee, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.

 

Section 10.2         Lender’s Discretion.  Whenever pursuant to this Agreement,
Lender exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Lender, the decision of Lender to
approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive. Whenever this Agreement expressly provides that Lender may not
withhold its consent or its approval of an arrangement or term, such provisions
shall also be deemed to prohibit Lender from delaying or conditioning such
consent or approval. Prior to a Securitization, whenever pursuant to this
Agreement the Rating Agencies are given any right to approve or disapprove, or
any arrangement or term is to be satisfactory to the Rating Agencies, the
decision of Lender to approve or disapprove or to decide whether arrangements or
terms are satisfactory or not satisfactory, based upon Lender’s determination of
Rating Agency criteria, shall be substituted therefore.

 

Section 10.3         Governing Law.  (a) THIS AGREEMENT WAS NEGOTIATED IN THE
STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER AND
OPERATING LESSEE IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE
THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL
TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS
AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE
IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD
THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF
ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND OPERATING LESSEE HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS, AND THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

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(b)          ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER, OPERATING
LESSEE OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND EACH OF BORROWER AND OPERATING LESSEE
WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR
FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH OF
BORROWER AND OPERATING LESSEE HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH OF BORROWER AND OPERATING
LESSEE DOES HEREBY DESIGNATE AND APPOINT:

 

CORPORATION SERVICES COMPANY

80 STATE STREET

ALBANY, NEW YORK 12207

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER OR OPERATING LESSEE IN THE MANNER PROVIDED
HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
BORROWER OR OPERATING LESSEE (AS APPLICABLE) IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER AND OPERATING LESSEE (I) SHALL
GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.

 

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Section 10.4         Modification, Waiver in Writing.  No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, or of the Notes, or of any other Loan Document, nor consent to any
departure by Borrower or Operating Lessee therefrom, shall in any event be
effective unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower or
Operating Lessee, shall entitle Borrower or Operating Lessee to any other or
future notice or demand in the same, similar or other circumstances.

 

Section 10.5         Delay Not a Waiver.  Neither any failure nor any delay on
the part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Notes or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Notes or any other Loan
Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Notes
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount.

 

Section 10.6         Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, addressed as follows
(or at such other address and Person as shall be designated from time to time by
any party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided for in this Section 10.6):

 

If to Agent or Initial Lender:

 

Column Financial, Inc.

11 Madison Avenue

New York, New York 10010

Attention: N. Dante LaRocca and Sarah Nelson

 

with a copy to:

 

Dechert LLP

Cira Centre

2929 Arch Street

Philadelphia, Pennsylvania 19104

Attention: David W. Forti, Esq.

 

 -157- 

 

  

If to Borrower or Operating Lessee:

 

c/o New York REIT, Inc.

405 Park Avenue

New York, New York 10022

Attention: Michael Ead

 

with a copy to:

 

Arnold & Porter LLP

399 Park Avenue

New York, NY 10022

Attention: John Busillo, Esq.

 

A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery, upon the first attempted delivery on a Business Day.

 

Section 10.7         Trial by Jury.  EACH OF LENDER (BY ITS ACCEPTANCE OF THIS
AGREEMENT), BORROWER AND OPERATING LESSEE HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER AND OPERATING LESSEE, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY
OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER AND OPERATING LESSEE.

 

Section 10.8         Headings.  The Article and/or Section headings and the
Table of Contents in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.

 

Section 10.9         Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

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Section 10.10         Preferences.  To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, Lender
shall have the continuing and exclusive right to apply or reverse and reapply
any and all payments by Borrower to any portion of the obligations of Borrower
hereunder to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by Lender.

 

Section 10.11         Waiver of Notice.  Each of Borrower and Operating Lessee
hereby expressly waives, and shall not be entitled to, any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower or Operating Lessee (as applicable) and except with
respect to matters for which Borrower or Operating Lessee is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice. Each of
Borrower and Operating Lessee hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower or Operating Lessee, respectively.

 

Section 10.12         Remedies of Borrower and Operating Lessee.  In the event
that a claim or adjudication is made that Lender or its agents have acted
unreasonably or unreasonably delayed acting in any case where by law or under
this Agreement or the other Loan Documents, Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, each of Borrower and
Operating Lessee agrees that neither Lender nor its agents shall be liable for
any monetary damages, and Borrower’s and Operating Lessee’s sole remedies shall
be limited to commencing an action seeking injunctive relief or declaratory
judgment. The parties hereto agree that any action or proceeding to determine
whether Lender has acted reasonably shall be determined by an action seeking
declaratory judgment.

 

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Section 10.13         Expenses; Indemnity.  (a) Except as expressly provided
otherwise in this Agreement or the other Loan Documents, Borrower covenants and
agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of
notice from Lender for all costs and expenses (including reasonable attorneys’
fees and expenses) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower and
Operating Lessee (including without limitation any opinions requested by Lender
as to any legal matters arising under this Agreement or the other Loan Documents
with respect to the Properties); (ii) Borrower’s and Operating Lessee’s ongoing
performance of and compliance with Borrower’s and Operating Lessee’s respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (iii) Lender’s ongoing performance and compliance with
all agreements and conditions contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date;
(iv) the negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Loan Documents and any other documents or matters requested by Borrower or
Operating Lessee; (v) securing Borrower’s or Operating Lessee’s compliance with
any requests made pursuant to the provisions of this Agreement; (vi) the filing
and recording fees and expenses, title insurance and fees and expenses of
counsel for providing to Lender all required legal opinions, and other similar
expenses incurred in creating and perfecting the Liens in favor of Lender
pursuant to this Agreement and the other Loan Documents; (vii) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, Operating Lessee, this Agreement, the other Loan
Documents, the Properties, or any other security given for the Loan, all as
provided herein; and (viii) enforcing any obligations of Borrower or Operating
Lessee or collecting any payments due from Borrower under this Agreement, the
other Loan Documents or with respect to the Properties (including any fees and
expenses reasonably incurred by or payable to Servicer or a trustee in
connection with the transfer of the Loan to a special servicer upon Servicer’s
anticipation of a Default or Event of Default, liquidation fees, workout fees,
special servicing fees, operating advisor fees or any other similar fees and
interest payable on advances made by the Servicer with respect to delinquent
debt service payments or expenses of curing Borrowers’ defaults under the Loan
Documents), or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or of
any insolvency or bankruptcy proceedings or any other amounts required under
Section 9.6; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason of
the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any
cost and expenses due and payable to Lender may be paid from any amounts in the
Lockbox Account or Cash Management Account, as applicable.

 

(b)          Borrower shall indemnify, defend and hold harmless Lender and its
officers, directors, agents, employees (and the successors and assigns of the
foregoing) and any Person who is or will have been involved in the origination
of the Loan, any Person who is or will have been involved in the servicing of
the Loan secured hereby, any Person in whose name the encumbrance created by the
Security Instruments is or will have been recorded, any Person who may hold or
acquire or will have held a full or partial direct interest in the Loan
(collectively, the “Lender Indemnitees”) from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for Lender Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not a Lender Indemnitee
shall be designated a party thereto), that may be imposed on, incurred by, or
asserted against any Lender Indemnitee in any manner relating to or arising out
of (i) any breach by Borrower or Operating Lessee of its obligations under, or
any material misrepresentation by Borrower or Operating Lessee contained in,
this Agreement or the other Loan Documents, or (ii) any breach by Borrower of
its obligations related to the use or intended use of the WWP Fund
(collectively, the “Indemnified Liabilities”); provided, however, that Borrower
shall not have any obligation to any Indemnified Party hereunder to the extent
that such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud or willful misconduct of such Lender Indemnitees. To the extent that the
undertaking to indemnify, defend and hold harmless set forth in the preceding
sentence may be unenforceable because it violates any law or public policy,
Borrower shall pay the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Lender Indemnitees.

 

 -160- 

 

  

(c)          Borrower covenants and agrees to pay for or, if Borrower fails to
pay, to reimburse Lender for, any fees and expenses incurred by any Rating
Agency in connection with any Rating Agency review of the Loan, the Loan
Documents or any transaction contemplated thereby or any consent, approval,
waiver or confirmation obtained from such Rating Agency following a
Securitization pursuant to the terms and conditions of this Agreement or any
other Loan Document and the Lender shall be entitled to require payment of such
fees and expenses as a condition precedent to the obtaining of any such consent,
approval, waiver or confirmation.

 

(d)          In no event shall Borrower have any liability hereunder or under
any other Loan Document for special, incidental, indirect or consequential
damages.

 

Section 10.14         Schedules Incorporated.  The Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.

 

Section 10.15         Offsets, Counterclaims and Defenses.  Any assignee of
Lender’s interest in and to this Agreement, any Note and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to such documents which Borrower or Operating
Lessee may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower or
Operating Lessee in any action or proceeding brought by any such assignee upon
such documents and any such right to interpose or assert any such unrelated
offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower and Operating Lessee.

 

Section 10.16         No Joint Venture or Partnership; No Third Party
Beneficiaries.  (a) Borrower and Operating Lessee and Lender intend that the
relationships created hereunder and under the other Loan Documents be solely
that of borrower and lender. Nothing herein or therein is intended to create a
joint venture, partnership, tenancy-in-common, or joint tenancy relationship
between Borrower, Operating Lessee and Lender nor to grant Lender any interest
in the Property other than that of mortgagee, beneficiary or lender.

 

(b)          This Agreement and the other Loan Documents are solely for the
benefit of Lender, Operating Lessee and Borrower and nothing contained in this
Agreement or the other Loan Documents shall be deemed to confer upon anyone
other than Lender, Operating Lessee and Borrower any right to insist upon or to
enforce the performance or observance of any of the obligations contained herein
or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof and no
other Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.

 

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Section 10.17         Publicity.  All news releases, publicity or advertising by
Borrower or their Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, Credit Suisse, or any of their Affiliates may be made
without Lender’s prior approval (but subject to Lender's prior review and
comment) so long as such news release or publicity (1) is consistent with past
practices of Borrower, Guarantor and their Affiliates for commercial real estate
loans and (2) does not refer in any manner to a potential Securitization of the
Loan. Any news release or publicity that does not satisfy both clauses (1) and
(2) of the preceding sentence shall be subject to the prior written approval of
Lender (not to be unreasonably withheld, delayed or conditioned).
Notwithstanding the foregoing, Borrower shall have the right to disclose in any
filing required by applicable regulatory agencies or any other Governmental
Authority any information required by such regulatory agency or other
Governmental Authority upon reasonable prompt written notice to Lender.

 

Section 10.18         Cross Default; Cross Collateralization; Waiver of
Marshalling of Assets.  (a) Each of Borrower and Operating Lessee acknowledges
that Lender has made the Loan to Borrower upon the security of its collective
interest in the Properties and in reliance upon the aggregate of the Properties
taken together being of greater value as collateral security than the sum of
each Individual Property taken separately. Each of Borrower and Operating Lessee
agrees that the Security Instruments are and will be cross-collateralized and
cross-defaulted with each other so that (i) an Event of Default under any
Security Instrument shall constitute an Event of Default under each of the other
Security Instruments which secure the Notes; (ii) an Event of Default under any
Note or this Agreement shall constitute an Event of Default under each Security
Instrument; (iii) each Security Instrument shall constitute security for the
Notes as if a single blanket lien were placed on all of the Properties as
security for the Notes; and (iv) such cross-collateralization shall in no event
be deemed to constitute a fraudulent conveyance.

 

(b)          To the fullest extent permitted by law, Borrower and Operating
Lessee, for itself and its successors and assigns, waives all rights to a
marshalling of the assets of Borrower, Operating Lessee, Borrower’s and
Operating Lessee’s partners and others with interests in Borrower and Operating
Lessee, and of the Properties, or to a sale in inverse order of alienation in
the event of foreclosure of all or any of the Security Instruments, and agrees
not to assert any right under any laws pertaining to the marshalling of assets,
the sale in inverse order of alienation, homestead exemption, the administration
of estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the Properties
for the collection of the Debt without any prior or different resort for
collection or of the right of Lender to the payment of the Debt out of the net
proceeds of the Properties in preference to every other claimant whatsoever. In
addition, Borrower and Operating Lessee, for itself and its successors and
assigns, waives in the event of foreclosure of all or any of the Security
Instruments, any equitable right otherwise available to Borrower or Operating
Lessee which would require the separate sale of the Properties or require Lender
to exhaust its remedies against any Individual Property or any combination of
the Properties before proceeding against any other Individual Property or
combination of Properties; and further in the event of such foreclosure Borrower
or Operating Lessee does hereby expressly consents to and authorizes, at the
option of Lender, the foreclosure and sale either separately or together of any
combination of the Properties.

 

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Section 10.19         Waiver of Counterclaim.  Each of Borrower and Operating
Lessee hereby waives the right to assert a counterclaim, other than a compulsory
counterclaim, in any action or proceeding brought against it by Lender or its
agents.

 

Section 10.20         Conflict; Construction of Documents; Reliance.  In the
event of any conflict between the provisions of this Loan Agreement and any of
the other Loan Documents, the provisions of this Loan Agreement shall control.
The parties hereto acknowledge that they were represented by competent counsel
in connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Each of Borrower and
Operating Lessee acknowledges that, with respect to the Loan, Borrower shall
rely solely on its own judgment and advisors in entering into the Loan without
relying in any manner on any statements, representations or recommendations of
Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be
subject to any limitation whatsoever in the exercise of any rights or remedies
available to it under any of the Loan Documents or any other agreements or
instruments which govern the Loan by virtue of the ownership by it or any
parent, subsidiary or Affiliate of Lender of any equity interest any of them may
acquire in Borrower or Operating Lessee, and each of Borrower and Operating
Lessee hereby irrevocably waives the right to raise any defense or take any
action on the basis of the foregoing with respect to Lender’s exercise of any
such rights or remedies. Each of Borrower and Operating Lessee acknowledges that
Lender engages in the business of real estate financings and other real estate
transactions and investments which may be viewed as adverse to or competitive
with the business of Borrower, Operating Lessee or its Affiliates.

 

Section 10.21         Brokers and Financial Advisors.  Borrower hereby
represents that it has dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Agreement. Each Borrower hereby agrees to indemnify, defend
and hold Lender harmless from and against any and all claims, liabilities, costs
and expenses of any kind (including Lender’s reasonable attorneys’ fees and
expenses) in any way relating to or arising from a claim by any Person that such
Person acted on behalf of Borrower, Operating Lessee or Lender in connection
with the transactions contemplated herein other than as a result of the gross
negligence or willful misconduct of Lender. The provisions of this Section 10.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.

 

Section 10.22         Prior Agreements.  This Agreement and the other Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, including,
without limitation, the Term Sheet dated September 21, 2016 between Guarantor
and Lender, are superseded by the terms of this Agreement and the other Loan
Documents.

 

Section 10.23         Joint and Several Liability.  If Borrower consists of more
than one (1) Person, the obligations and liabilities of each Person shall be
joint and several.

 

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Section 10.24         Counterparts.  This Agreement may be executed in several
counterparts, each of which when executed and delivered is an original, but all
of which together shall constitute one instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart that is executed by the party against whom enforcement of this
Agreement is sought. Handwritten signatures to this Agreement transmitted by
telecopy or electronic transmission (for example, through use of a Portable
Document Format or “PDF” file) shall be valid and effective to bind the party so
signing.

 

Section 10.25         Cumulative Rights.  All of the rights of Lender under this
Agreement hereunder and under each of the other Loan Documents and any other
agreement now or hereafter executed in connection herewith or therewith, shall
be cumulative and may be exercised singly, together, or in such combination as
Lender may determine in its sole judgment.

 

Section 10.26         Reliance on Third Parties.  Lender may perform any of its
responsibilities hereunder through one or more agents, attorneys or independent
contractors. In addition, Lender may conclusively rely upon the advice or
determinations of any such agents, attorneys or independent contractors in
performing any discretionary function under the terms of this Agreement.

 

Section 10.27         Consent of Holder.  Wherever this Agreement refers to
Lender’s consent or discretion or other rights, such references to Lender shall
be deemed to refer to any holder of the Loan. The holder of the Loan may from
time to time appoint a trustee or Servicer, and Borrower and Operating Lessee
shall be entitled to rely upon written instructions executed by a purported
officer of the holder of the Loan as to the extent of authority delegated to any
such trustee or Servicer from time to time and determinations made by such
trustee or Servicer to the extent identified a within the delegated authority of
such trustee or Servicer, unless and until such instructions are superseded by
further written instructions from the holder of the Loan.

 

Section 10.28         Intentionally Omitted.

 

Section 10.29         EU Bail-in Requirements.  Notwithstanding anything to the
contrary in any Loan Document or in any agreement, arrangement or understanding
between Borrower and Lender, Borrower, Operating Lessee, Operating Pledgor,
Guarantor, any Affiliated Manager, and Lender acknowledge and accept that any
liability of any party to any other party under or in connection with the Loan
Documents may be subject to Bail-In Action by the relevant Resolution Authority
and acknowledges and accepts to be bound by:

 

(a)           the effect of any Bail-In Action in relation to any such
liability, including (without limitation):

 

(i)          a reduction, in full or in part, in the principal amount, or
outstanding amount due (including any accrued but unpaid interest) in respect of
any such liability; and/or

 

(ii)         a conversion of all, or part of, any such liability into shares,
other securities or other instruments of ownership in such EEA Financial
Institution, its parent undertaking, or a bridge institution that may be issued
to it or otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any such
liability under this Agreement or any other Loan Document; or

 

 -164- 

 

  

(iii)          a cancellation of any such liability; and

 

(b)           a variation of any term of any Loan Document to the extent
necessary to give effect to any Bail-In Action in relation to such liability.

 

Section 10.30         Contributions and Waivers.

 

(a)          As a result of the transactions contemplated by this Agreement,
each Borrower will benefit, directly and indirectly, from each Borrower’s
obligation to pay the Debt and perform its Obligations and, in consideration
therefor, each Borrower desires to enter into an allocation and contribution
agreement among themselves as set forth in this Section 10.30 to allocate such
benefits among themselves and to provide a fair and equitable agreement to make
contributions among each of the Borrowers in the event any payment is made by
any Individual Borrower hereunder to Lender (such payment being referred to
herein as a “Contribution,” and for purposes of this Section 10.30, includes any
exercise of recourse by Lender against any

collateral of Borrower and application of proceeds of such collateral in
satisfaction of such Borrower’s obligations to Lender under the Loan Documents).

 

(b)          Each Borrower shall be liable hereunder with respect to the
Obligations only for such total maximum amount (if any) that would not render
its Obligations hereunder or under any of the Loan Documents subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any State law.

 

(c)          In order to provide for a fair and equitable contribution among
Borrowers in the event that any Contribution is made by an Individual Borrower
(a “Funding Borrower”), such Funding Borrower shall be entitled to a
reimbursement Contribution (“Reimbursement Contribution”) from all other
Borrowers for all payments, damages and expenses incurred by that Funding
Borrower in discharging any of the Obligations, in the manner and to the extent
set forth in this Section 10.30.

 

(d)          For purposes hereof, the “Benefit Amount” of any Individual
Borrower as of any date of determination shall be the net value of the benefits
to such Borrower and its Affiliates from extensions of credit made by Lender to
(a) such Borrower and (b) to the other Borrowers hereunder and the Loan
Documents to the extent such other Borrowers have guaranteed or mortgaged their
Property to secure the Obligations of such Borrower to Lender.

 

(e)          Each Borrower shall be liable to a Funding Borrower in an amount
equal to the greater of (A) the (i) ratio of the Benefit Amount of such Borrower
to the total amount of the Obligations, multiplied by (ii) the amount of
Obligations paid by such Funding Borrower, or (B) ninety-five percent (95%) of
the excess of the fair saleable value of the property of such Borrower over the
total liabilities of such Borrower (including the maximum amount reasonably
expected to become due in respect of contingent liabilities) determined as of
the date on which the payment made by a Funding Borrower is deemed made for
purposes hereof (giving effect to all payments made by other Funding Borrowers
as of such date in a manner to maximize the amount of such Contributions).

 

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(f)          In the event that at any time there exists more than one Funding
Borrower with respect to any Contribution (in any such case, the “Applicable
Contribution”), then Reimbursement Contributions from other Borrowers pursuant
hereto shall be allocated among such Funding Borrowers in proportion to the
total amount of the Contribution made for or on account of the other Borrowers
by each such Funding Borrower pursuant to the Applicable Contribution. In the
event that at any time any Borrower pays an amount hereunder in excess of the
amount calculated pursuant to this Section 10.30 above, that Borrower shall be
deemed to be a Funding Borrower to the extent of such excess and shall be
entitled to a Reimbursement Contribution from the other Borrowers in accordance
with the provisions of this Section.

 

(g)          Each Borrower acknowledges that the right to Reimbursement
Contribution hereunder shall constitute an asset in favor of Borrower to which
such Reimbursement Contribution is owing.

 

(h)          No Reimbursement Contribution payments payable by a Borrower
pursuant to the terms of this Section 10.30 shall be paid until all amounts then
due and payable by all Borrowers to Lender pursuant to the terms of the Loan
Documents are paid in full. Nothing contained in this Section 10.30 shall limit
or affect in any way the Obligations of any Borrower to Lender under the Notes
or any other Loan Documents.

 

(i)           Each Borrower waives (to the extent not prohibited by applicable
law):

 

(i)          any right to require Lender to proceed against any other Borrower
or any other person or to proceed against or exhaust any security held by Lender
at any time or to pursue any other remedy in Lender’s power before proceeding
against Borrower;

 

(ii)         any defense based upon the statute of limitations with respect to
any other Borrower;

 

(iii)        so long as the Loan is outstanding, any defense based upon any
legal disability or other defense of any other Borrower, any guarantor of any
other person or by reason of the cessation or limitation of the liability of any
other Borrower or any guarantor from any cause other than full payment of all
sums payable under the Notes, this Agreement and any of the other Loan
Documents;

 

(iv)        any defense based upon any lack of authority of the officers,
directors, partners or agents acting or purporting to act on behalf of any other
Borrower or any principal of any other Borrower or any defect in the formation
of any other Borrower or any principal of any other Borrower;

 

(v)         any defense based upon any failure of Lender to give notice of sale
or other disposition of any collateral to any other Borrower; and

 

(vi)        any defense or benefit based upon Borrower’s resignation of the
portion of any obligation secured by the applicable Security Instruments to be
satisfied by any payment from any other Borrower or any such party.

 

 -166- 

 

  

(j)           Each Borrower waives:

 

(i)          all rights and defenses arising out of an election of remedies by
Lender even though the election of remedies, such as nonjudicial foreclosure
with respect to security for the Loan or any other amounts owing under the Loan
Documents, has destroyed Borrower’s rights of subrogation and reimbursement
against any other Borrower;

 

(ii)         all rights and defenses that Borrower may have because any of the
Debt is secured by real property such that: (i) Lender may collect from Borrower
without first foreclosing on any real property or personal property pledged by
any other Borrower, (ii) if Lender forecloses on any real property pledged by
any other Borrower, (a) the amount of the Debt may be reduced only by the price
for which such real property collateral is sold at the foreclosure sale, even if
the real property collateral is worth more than the sale price, (b) Lender may
collect from Borrower even if any other Borrower, by foreclosing on the real
property collateral, has destroyed any right Borrower may have to collect from
any other Borrower. This is an unconditional and irrevocable waiver of any
rights and defenses Borrower may have because any of the Debt is secured by real
property; and

 

(iii)        any claim or other right which Borrower might now have or hereafter
acquire against any other Borrower that arises from the existence or performance
of any obligations under the Notes, this Agreement, the Security Instruments or
the other Loan Documents, including, without limitation, any of the following:
(i) any right of subrogation, reimbursement, exoneration, contribution, or
indemnification; or (ii) any right to participate in any claim or remedy of
Lender against any other Borrower or any collateral security therefor, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law.

 

[NO FURTHER TEXT ON THIS PAGE]

 

 -167- 

 

 

 

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

 

BORROWER:

  

ARC NY22936001, LLC, a Delaware limited liability company

 

By: ARC Mezz NY22936001, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

ARC NY21618001, LLC, a Delaware limited liability company

 

By: ARC Mezz NY21618001, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

 

[Signature Page to Loan Agreement]

 

 

ARC NY333W3401, LLC, a Delaware limited liability company

 

By: ARC NY333W3401 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead_______________
Name: Michael Ead
Title: Authorized Signatory

 

ARC NY350BL001, LLC, a Delaware limited liability company

 

By: ARC NY350BL001 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                    
Name: Michael Ead
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

ARC NYBLKST002, LLC, a Delaware limited liability company

 

By: ARC NYBLKST002 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

ARC NYCTGRG001, LLC, a Delaware limited liability company

 

By: ARC NYCTGRG001 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

ARC NYWSHST001, LLC, a Delaware limited liability company

 

By: ARC NYWSHST001 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

ARC NYGRNAV001, LLC, a Delaware limited liability company

 

By: ARC NYGRNAV001 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

ARC NYW42ST001, LLC, a Delaware limited liability company

 

By: ARC NYW42ST001 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

ARC NY120W5701, LLC, a Delaware limited liability company

 

By: ARC NY120W5701 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

ARC NY24549W17, LLC, a Delaware limited liability company

 

By: ARC NY24549W17 Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

50 VARICK LLC, a Delaware limited liability company

 

By: 50 Varick Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                  
Name: Michael Ead
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

INITIAL LENDER:

 

COLUMN FINANCIAL, INC., a Delaware corporation

 

By: /s/ N. Dante LaRocca                                          
Name: N. Dante LaRocca
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

AGENT:

 

COLUMN FINANCIAL, INC., a Delaware corporation

 

By: /s/ N. Dante LaRocca___________________
Name: N. Dante LaRocca
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

Acknowledged and Agreed (solely with respect to Sections 2.6, 7.12, 9.1.1,
9.2(a), 9.4(b) and 9.5 and Articles IV, V, VI, VIII and X hereof):

 

OPERATING LESSEE:

 

ARC NY120W5701 TRS, LLC, a Delaware limited liability company

 

By: ARC NY120W5701 TRS Mezz II, LLC, a Delaware limited liability company

 

By: ARC NY120W5701 TRS Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                         
Name: Michael Ead
Title: Authorized Signatory

 

[Signature Page to Loan Agreement]

 

 

SCHEDULE I

 

(Borrower)

 

ARC NY22936001, LLC, a Delaware limited liability company

ARC NY21618001, LLC, a Delaware limited liability company

ARC NY333W3401, LLC, a Delaware limited liability company

ARC NY350BL001, LLC, a Delaware limited liability company

ARC NYBLKST002, LLC, a Delaware limited liability company

ARC NYCTGRG001, LLC, a Delaware limited liability company

ARC NYWSHST001, LLC, a Delaware limited liability company

ARC NYGRNAV001, LLC, a Delaware limited liability company

ARC NYW42ST001, LLC, a Delaware limited liability company

ARC NY120W5701, LLC, a Delaware limited liability company

ARC NY24549W17, LLC, a Delaware limited liability company

50 Varick LLC, a New York limited liability company

 

 SCH. I-1 

 

 

Schedule II

 

(Mezzanine Borrower)

 

ARC Mezz NY22936001, LLC, a Delaware limited liability company

ARC Mezz NY21618001, LLC, a Delaware limited liability company

ARC NY333W3401 Mezz, LLC, a Delaware limited liability company

ARC NY350BL001 Mezz, LLC, a Delaware limited liability company

ARC NYBLKST002 Mezz, LLC, a Delaware limited liability company

ARC NYCTGRG001 Mezz, LLC, a Delaware limited liability company

ARC NYWSHST001 Mezz, LLC, a Delaware limited liability company

ARC NYGRNAV001 Mezz, LLC, a Delaware limited liability company

ARC NYW42ST001 Mezz, LLC, a Delaware limited liability company

ARC NY120W5701 Mezz, LLC, a Delaware limited liability company

ARC NY24549W17 Mezz, LLC, a Delaware limited liability company

50 Varick Mezz LLC, a Delaware limited liability company

 

 SCH. II-1 

 

 

SCHEDULE III

 

(Properties)

 

    Borrower   Property Name   Street Address   County   City   State   Zip
Code 1.   ARC NY24549W17, LLC   Twitter Building   245-249 West 17th Street  
New York   New York   NY   10017 2.   ARC NY333W3401, LLC   333 W 34th Street  
333 West 34th Street   New York   New York   NY   10001 3.   ARC NY21618001, LLC
  The Red Bull Building   216-218 West 18th Street   New York   New York   NY  
10011 4.   50 Varick LLC   50 Varick Street   50 Varick Street   New York   New
York   NY   10013 5.   ARC NY22936001, LLC   229 West 36th Street   229 West
36th Street   New York   New York   NY   10018 6.   ARC NYGRNAV001, LLC   One
Jackson Square Retail   122 Greenwich Street   New York   New York   NY   10011
7.    ARC NYW42ST001, LLC   42nd Street Retail   350 West 42nd Street   New York
  New York   NY   10036 8.   ARC NYBLKST002, LLC   Bleecker Street Retail  
382-384 Bleecker Street   New York   New York   NY   10014 9.   ARC NY350BL001,
LLC   350 Bleecker Street   350 Bleecker Street   New York   New York   NY  
10014 10.   ARC NYWSHST001, LLC   Washington Street Retail   416-425 Washington
Street   New York   New York   NY   10013 11.   ARC NYCCTGRG001, LLC   Centurion
Garage   33 West 56th Street   New York   New York   NY   10019 12.   ARC
NY120W5701, LLC   Viceroy Hotel   120 West 57th Street   New York   New York  
NY   10019

 

 SCH. III-1 

 

 

SCHEDULE IV

 

(Rent Roll)

 

See attached.

 

 SCH. IV-1 

 

 

SCHEDULE V

 

(Organizational Structure)

 

See attached.

 

 SCH. V-1 

 

 

SCHEDULE VI

 

(Litigation)

 

1.RXR WWP Owner LLC v. WWP Sponsor, LLC, WWP Holdings, LLC, American Realty
Capital Properties, Inc. d/b/a American Realty Capital, and American Realty
Capital New York Recovery REIT, Inc., Index No. 653553/2013 (Supreme Court of
the State of New York, New York County, October 14, 2013).

 

2.The Segal Company (Eastern States), Inc. v. 333W34 SLG Owner LLC, ARC
NY333W3401, LLC and Sam Ash Megastores LLC, Index No. 650244/2015 (Supreme Court
of the State of New York, New York County, January 28, 2015).

 

3.130 West 57 Company v. Ricland, L.L.C., AREP FIFTY-SEVENTH LLC and ARC
NY120W5701, LLC, Index No. 156224/2016 (Supreme Court of the State of New York,
New York County, July 27, 2016).

  

 SCH. VI-1 

 

 

SCHEDULE VII

 

(Allocated Loan Amounts)

 

   Borrower  Property Name  Street Address  City  State  Allocated
Loan Amount  1.  ARC NY24549W17, LLC  Twitter Building  245-249 West 17th
Street  New York  NY  $146,175,314.00  2.  ARC NY333W3401, LLC  333 W 34th
Street  333 West 34th Street  New York  NY  $110,619,157.00  3.  ARC NY21618001,
LLC  The Red Bull Building  216-218 West 18th Street  New York  NY 
$66,371,493.00  4.  50 Varick LLC  50 Varick Street  50 Varick Street  New York 
NY  $51,358,894.00  5.  ARC NY22936001, LLC  229 West 36th Street  229 West 36th
Street  New York  NY  $39,506,842.00  6.  ARC NYGRNAV001, LLC  One Jackson
Square Retail  122 Greenwich Street  New York  NY  $13,000,000.00  7.  ARC
NYW42ST001, LLC  42nd Street Retail  350 West 42nd Street  New York  NY 
$11,365,000.00  8.  ARC NYBLKST002, LLC  Bleecker Street Retail  382-384
Bleecker Street  New York  NY  $12,828,947.00  9.  ARC NY350BL001, LLC  350
Bleecker Street  350 Bleecker Street  New York  NY  $8,296,437.00  10.  ARC
NYWSHST001, LLC  Washington Street Retail  416-425 Washington Street  New York 
NY  $5,530,958.00  11.  ARC NYCCTGRG001, LLC  Centurion Garage  33 West 56th
Street  New York  NY  $2,646,958.00  12.  ARC NY120W5701, LLC  Viceroy Hotel 
120 West 57th Street  New York  NY  $32,300,000.00 

 SCH. VII-1 

 

 

SCHEDULE VIII

 

(Managers and Management Agreements)

 

    Manager   Management Agreement 1   KHM Viceroy New York, LLC, a Delaware
limited liability company   That certain Hotel Management Agreement, effective
as of February 20, 2013, by and between AREP Fifty-Seventh LLC and KHM Viceroy
New York, LLC, as assigned to ARC NY120W5701, LLC pursuant to that certain
Assignment and Assumption of Leases, Contracts, Bookings, Licenses and Permits,
Guarantees and Intangible Property, dated as of November 18, 2013, by and
between KHM Viceroy New York, LLC, as assignor, and ARC NY120W5701, LLC, as
assignee, and as further assigned to ARC NY120W5701 TRS, LLC pursuant to that
certain Assignment and Assumption of Management Agreement, Leases and Contracts,
dated as of November 18, 2013, by and between ARC NY120W5701, LLC, as assignor,
and ARC NY120W5701 TRS, LLC, as assignee 2   CBRE, Inc., a Delaware corporation
 

1.    That certain Management Agreement dated as of December 27, 2012, by and
between ARC NY22936001, LLC and CBRE, Inc., as amended by that certain Amendment
to Management Agreement dated as of July 15, 2014

2.    That certain Management Agreement dated as of March 26, 2013, by and
between ARC NY21618001, LLC and CBRE, Inc., as amended by that certain Amendment
to Management Agreement dated as of July 15, 2014

3.    That certain Management Agreement dated as of August 1, 2013 by and
between ARC NY333W3401, LLC and CBRE, Inc., as amended by that certain Amendment
to Management Agreement dated as of July 15, 2014

4.    That certain Management Agreement dated as of December 1, 2015, by and
between ARC NY24549W17, LLC and CBRE, Inc.

3   New York Recovery Properties, LLC, a Delaware limited liability company  
That certain Amended and Restated Management Agreement, dated as of September 2,
2010, by and among the New York REIT, Inc. (as successor in interest to American
Realty Capital New York Recovery REIT, Inc.), New York Recovery Operating
Partnership, L.P., a Delaware limited partnership and New York Recovery
Properties, LLC 4   Laight Street Parking LLC, a New York limited liability
company   That certain Management Agreement, dated as of November 26, 2013, by
and between ARC NYWSHST001, LLC and Laight Street Parking LLC

 

 SCH. VIII-1 

 

 

SCHEDULE IX

 

(Condominium Documents, Board Members, Common Charges and Units of Borrower)

 

See attached.

 

 SCH. IX-1 

 

 

SCHEDULE X

 

(Collective Bargaining Agreements)1

 

1.Agreement dated as of May ___, 2013, and effective as of July 1, 2013 by and
among Hotel Association of New York City, Inc., on its own behalf and on behalf
of its bargaining group hotels, the Associated Hotel and Motels of Greater New
York, on its own behalf and on behalf of its bargaining group hotels, and the
New York Hotel & Motel Trades Council, AFL-CIO.

 

2.Agreement dated September 13, 2013 by and among KHM Viceroy New York LLC d/b/a
Viceroy Hotel Group, AREP Fifty-Seventh LLC d/b/a Viceroy Hotel New York and the
New York Hotel & Motel Trades Council, AFL-CIO.

 

3.Notice letter dated November 5, 2013 from the New York Hotel & Motel Trades
Council, AFL-CIO to Viceroy Hotel New York regarding intent of the Union to
organize.

 

4.Memorandum of Agreement dated February ___, 2014 by and among NY120W5701, LLC
d/b/a Viceroy Hotel New York, KHM Viceroy New York, LLC d/b/a Viceroy Hotel
Group and the New York Hotel & Motel Trades Council, AFL-CIO.

 

5.Voluntary Settlement Agreement (Hotel) dated as of March 13, 2014 by and among
ARC NY120W5701, LLC, KHM Viceroy New York, LLC and the New York Hotel & Motel
Trades Council, AFL-CIO.

 

6.Voluntary Settlement Agreement (Concierge) dated as of March 13, 2014 by and
among ARC NY120W5701, LLC, KHM Viceroy New York, LLC and the New York Hotel &
Motel Trades Council, AFL-CIO.

 

7.Agreement dated February 24, 2015 by and between the New York Hotel & Motel
Trades Council, AFL-CIO and the Viceroy Hotel.

 

8.Agreement dated May ___, 2015, by and between the Viceroy Hotel and New York
Hotel & Motel Trades Council, AFL-CIO.

 

9.Memorandum of Understanding dated June ___, 2015 by and among Hotel
Association of New York City, Inc., the Associated Hotel and Motels of Greater
New York, on its own behalf and on behalf of its bargaining group hotels, and
the New York Hotel & Motel Trades Council, AFL-CIO.

 

 

1 Borrower to complete

 

 SCH. X-1 

 

 

SCHEDULE XI

 

(Property Condition Reports and Environmental Reports)

 

No.   Property   Report 1.   Centurion Garage   That certain Phase I
Environmental Site Assessment Report issued by Partner Assessment Corporation on
October 21, 2016 as Partner Project Number 16-172156.11 2.   50 Varick Street  
That certain Phase I Environmental Site Assessment Report issued by Partner
Assessment Corporation on October 21, 2016 as Partner Project Number 16-172156.4
3.   Twitter Building   That certain Phase I Environmental Site Assessment
Report issued by Partner Assessment Corporation on October 21, 2016 as Partner
Project Number 16-172156.1 4.   229 West 36th Street   That certain Phase I
Environmental Site Assessment Report issued by Partner Assessment Corporation on
October 21, 2016 as Partner Project Number 16-172156.5 5.   Bleecker Street
Retail   That certain Phase I Environmental Site Assessment Report issued by
Partner Assessment Corporation on October 21, 2016 as Partner Project Number
16-172156.8 6.   42nd Street Retail   That certain Property Condition Report
issued by Partner Assessment Corporation on October 21, 2016 as Partner Project
Number 16-172156.7 7.   Viceroy Hotel   That certain Property Condition Report
issued by Partner Assessment Corporation on October 21, 2016 as Partner Project
Number 16-172156.12

 SCH. XI-1 

 

 

SCHEDULE XII

 

(Required Repairs Deadlines for Completion)

 

No.   Property   Required Repair   Completion Deadline 1.   Centurion Garage  

(i) Leaking hydraulic equipment within parking garage to be repaired with
improved housekeeping strategies implemented

(ii) Existing stains to be properly cleaned

(iii) Leaking air-handling unit within parking garage to be repaired

  Within sixty (60) days of the Closing Date 2.   50 Varick Street   Damaged
friable asbestos to be abated   Within one hundred twenty (120) days of the
Closing Date 3.   Twitter Building   Storage tank to be registered with New York
Fire Department   Within sixty (60) days of the Closing Date 4.   229 West 36th
Street   Storage tank to be registered with New York State Department of
Environmental Conservation   Within sixty (60) days of the Closing Date 5.  
Bleecker Street Retail   Storage tank to be registered with New York State
Department of Environmental Conservation   Within sixty (60) days of the Closing
Date 6.   42nd Street Retail   Two existing automobile elevator violations to be
remedied   Within sixty (60) days of the Closing Date 7.   Viceroy Hotel   IRMA
roof spot (29th floor) to be repaired   Within one hundred twenty (120) days of
the Closing Date

 SCH. XII-1 

 

 

SCHEDULE XIII

 

(O&M Programs)

 

See attached.

 

 SCH. XIII-1 

 

 

SCHEDULE XIV

 

(Pre-Approved Managers)

 

1.Winthrop Management LP and its Affiliates

 

2.CBRE Group, Inc.

 

3.Jones Lang LaSalle, Inc.

 

4.Cushman & Wakefield, Inc.

 

5.Newmark, Grubb, Knight, Frank

 

 SCH. XIV-1 

 

 

SCHEDULE XV

 

(Notes)

 

See attached.

 

 SCH. XV-1 

 

 

Exhibit A

 

Form of Tenant Direction Letter

 

TENANT DIRECTION LETTER

 

_______________, 20__

 

[Addressee]

 

Re:Payment Direction Letter for [INSERT APPLICABLE PROPERTY] (the “Property”)

 

Dear ______:

 

[INSERT APPLICABLE BORROWER] (“Borrower”), the owner of the Property, has
mortgaged the Property to Column Financial, Inc., as agent (“Agent”) for certain
lender parties from time to time (“Lender”) to a Loan Agreement, dated as of
December 20, 2016, pursuant to which Lender made a loan to Borrower, and has
agreed that all rents due for the Property will be paid directly to a bank
selected by Borrower and approved by Lender. Therefore, from and after the date
hereof, all rent to be paid by you under the Lease between Borrower and you (the
“Lease”) should be sent directly to the following address:

 

[BANK’S ADDRESS]

 

_____________________________

_____________________________

 

or by wire transfer to:/

 

Bank:

ABA No.:

Account No.:

Account Name:            ___________

 

All checks should be made out to “_________________________________”.

 

These payment instructions cannot be withdrawn or modified without the prior
written consent of Agent, or pursuant to a joint written instruction from
Borrower and Agent. Until you receive written instructions from Agent, continue
to send all rent payments due under the Lease to _________________. All rent
payments must be delivered to _________________ no later than the day on which
such amounts are due under the Lease.

 

 EX. A-1 

 

  

If you have any questions concerning this letter, please contact Michael Ead of
Borrower at mead@ar-global.com or N. Dante LaRocca and Sarah Nelson of Agent at
dante.larocca@credit-suisse.com and sarah.nelson@credit-suisse.com. We
appreciate your cooperation in this matter.

 

  [INSERT APPLICABLE BORROWER]       By:     Name:     Title:

 EX. A-2 

 

 

EXHIBIT B

 

Form of Credit Card Direction Letter

 

[BORROWER LETTERHEAD]

 

____________ ___, 20__

 

[Insert name and address of Credit Card Company]

 

Re:Payment Direction Letter for [insert name of Credit Card Company] pertaining
to the [insert applicable property] (the “Property”)

 

Gentlemen:

 

Pursuant to that certain [Merchant Agreement] (the “Merchant Agreement”) between
[INSERT APPLICABLE BORROWER]1 (the “Borrower”) and [insert name of Credit Card
Company] (“Credit Card Company”), a copy of which is attached hereto as Exhibit
1, with respect to merchant account number [________] Credit Card Company has
agreed to accept [insert name of credit card] charges (collectively, “Charges”)
and to transfer certain funds to Borrower in consideration for such Charges, as
provided in the Merchant Agreement.

 

This letter shall constitute notice to you that the undersigned has granted a
security interest in its realty, inventory, accounts and its tangible and
intangible personal property, including, without limitation, all rights of
Borrower to receive payments in respect of Charges in favor of Column Financial,
Inc., as agent (“Agent”) for certain lender parties from time to time (“Lender”)
to a Loan Agreement, dated as of December 20, 2016, pursuant to which Lender
made a loan to Borrower, to secure certain of the undersigned’s obligations to
Agent.

 

Accordingly, Credit Card Company is hereby notified as follows:

 

(a)          With respect to the Property, Credit Card Company is instructed to,
and shall, make all payments due to Borrower under the Merchant Agreement on and
after the date hereof, in the manner and at the times set forth in the Merchant
Agreement, directly to the account listed on Exhibit 2, or such other account as
may be specified from time to time as provided herein (each such account, a
“Collection Account”). All payments under the Merchant Agreement shall be made
to the Collection Account and to no other account unless and until Credit Card
Company receives written notification from both an officer of Agent and an
officer of Borrower. Agent acknowledges and agrees that, notwithstanding the
preceding sentence, Credit Card Company is not required to alter its regular
course of business with respect to acceptance of payment instructions from
merchants and that Credit Card Company shall have no liability if it acts in
accordance with payment instructions received from an employee or agent of
Borrower acting with apparent authority. Without the prior written consent of
Agent, Borrower agrees that it shall not terminate, amend, revoke or modify this
Payment Direction Letter in any manner or direct or cause Credit Card Company to
pay any amount in any manner other than as provided specifically herein.
Notwithstanding anything to the contrary contained herein, Credit Card Company
shall not be responsible for enforcement of Borrower’s agreement not to
terminate, amend, revoke or modify this Payment Direction Letter or direct or
cause Credit Card Company to pay any amount other than as provided specifically
herein.

 

 

1 Note: for the Viceroy property, please revise to reflect Operating Lessee in
lieu of Borrower.

 

 EX. B-1 

 

  

(b)          This letter agreement confers on Agent no greater rights to payment
under the Merchant Agreement than Borrower has thereunder.

 

The instructions set forth herein are irrevocable and are not subject to
modification in any manner, except that Agent, Lender, or any successor lender
so identified by Agent or Lender, may by written notice to you rescind the
instructions contained herein.

 

  Sincerely,       [BORROWER]

 

ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned acknowledges notice of the security interest of Agent on behalf
of Lender and hereby confirms that the undersigned has received no notice of any
other pledge or assignment of the Charges and will honor the above instructions.

 

[Credit Card Company]         By:       Name:     Its:  

 

Dated as of: __________ ___, 20__

 

 EX. B-2