**Exhibit 10.82**

**LOAN AND SECURITY AGREEMENT**

Dated as ofOctober 6, 2006 

Between 

**SHC MICHIGAN AVENUE, LLC**

as Borrower 

and 

**CITIGROUPGLOBAL MARKETS REALTY CORP.,**

as Lender 

TABLE OF CONTENTS 

 
   **Page**
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
  1
Section 1.1
  Definitions  1
Section 1.2
  Principles of Construction  24
II. GENERAL TERMS
  25
Section 2.1
  Loan; Disbursement to Borrower  25
Section 2.2
  Interest; Loan Payments; Late Payment Charge  25
Section 2.3
  Prepayments  27
Section 2.4
  Regulatory Change; Taxes  28
Section 2.5
  Conditions Precedent to Closing  29
III. CASH MANAGEMENT
  33
Section 3.1
  Cash Management  33
IV. REPRESENTATIONS AND WARRANTIES
  41
Section 4.1
  Borrower Representations  41
V. BORROWER COVENANTS
  50
Section 5.1
  Affirmative Covenants  50
Section 5.2
  Negative Covenants  57
VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
  60
Section 6.1
  Insurance Coverage Requirements  60
Section 6.2
  Condemnation and Insurance Proceeds  65
VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS
  68
Section 7.1
  Impositions and Other Charges  68
Section 7.2
  No Liens  69
Section 7.3
  Contest  69
VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS
  70
Section 8.1
  Restrictions on Transfers and Indebtedness  70
 

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Section 8.2
  Sale of Building Equipment  70
Section 8.3
  Immaterial Transfers and Easements, etc  71
Section 8.4
  Transfers of Interests in Borrower  71
Section 8.5
  Loan Assumption  72
Section 8.6
  Notice Required; Legal Opinions  74
Section 8.7
  Leases  74
IX. INTEREST RATE CAP AGREEMENT
  77
Section 9.1
  Interest Rate Cap Agreement  77
Section 9.2
  Pledge and Collateral Assignment  77
Section 9.3
  Covenants  78
Section 9.4
  Representations and Warranties  79
Section 9.5
  Payments  80
Section 9.6
  Remedies  80
Section 9.7
  Sales of Rate Cap Collateral  82
Section 9.8
  Public Sales Not Possible  83
Section 9.9
  Receipt of Sale Proceeds  83
Section 9.10
  Extension Interest Rate Cap Agreement  83
Section 9.11
  Filing of Financing Statements Authorized  83
X. MAINTENANCE OF PROPERTY; ALTERATIONS
  83
Section 10.1
  Maintenance of Property  83
Section 10.2
  Alterations and Expansions  84
XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION
  86
Section 11.1
  Books and Records  86
Section 11.2
  Financial Statements  87
XII. ENVIRONMENTAL MATTERS
  89
Section 12.1
  Representations  89
Section 12.2
  Covenants. Compliance with Environmental Laws  89
Section 12.3
  Environmental Reports  90
Section 12.4
  Environmental Indemnification  90
Section 12.5
  Recourse Nature of Certain Indemnifications  91
XIII. RESERVED
  91
XIV. SECURITIZATION AND PARTICIPATION
  91
Section 14.1
  Sale of Note and Securitization  91
 

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Section 14.2
  Cooperation with Rating Agencies  92
Section 14.3
  Securitization Financial Statements  93
Section 14.4
  Securitization Indemnification  93
Section 14.5
  Retention of Servicer  95
XV. ASSIGNMENTS AND PARTICIPATIONS
  95
Section 15.1
  Assignment and Acceptance  95
Section 15.2
  Effect of Assignment and Acceptance  95
Section 15.3
  Content  96
Section 15.4
  Register  96
Section 15.5
  Substitute Notes  97
Section 15.6
  Participations  97
Section 15.7
  Disclosure of Information  97
Section 15.8
  Security Interest in Favor of Federal Reserve Bank  98
XVI. RESERVE ACCOUNTS
  98
Section 16.1
  Tax Reserve Account  98
Section 16.2
  Insurance Reserve Account  99
Section 16.3
  Intentionally Deleted  99
Section 16.4
  FF&E Reserve Account  99
Section 16.5
  Letter of Credit Provisions  100
XVII. DEFAULTS
  101
Section 17.1
  Event of Default  101
Section 17.2
  Remedies  104
Section 17.3
  Remedies Cumulative; Waivers  105
Section 17.4
  Costs of Collection  106
XVIII. SPECIAL PROVISIONS
  106
Section 18.1
  Exculpation  106
XIX. MISCELLANEOUS
  107
Section 19.1
  Survival  107
Section 19.2
  Lender’s Discretion  107
Section 19.3
  Governing Law  107
Section 19.4
  Modification, Waiver in Writing  109
Section 19.5
  Delay Not a Waiver  109
Section 19.6
  Notices  109
Section 19.7
  TRIAL BY JURY  110
Section 19.8
  Headings  111
Section 19.9
  Severability  111
 

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Section 19.10
  Preferences  111
Section 19.11
  Waiver of Notice  111
Section 19.12
  Expenses; Indemnity  111
Section 19.13
  Exhibits and Schedules Incorporated  113
Section 19.14
  Offsets, Counterclaims and Defenses  113
Section 19.15
  Liability of Assignees of Lender  113
Section 19.16
  No Joint Venture or Partnership; No Third Party Beneficiaries  114
Section 19.17
  Publicity  114
Section 19.18
  Waiver of Marshalling of Assets  114
Section 19.19
  Waiver of Counterclaim and Other Actions  114
Section 19.20
  Conflict; Construction of Documents; Reliance  115
Section 19.21
  Prior Agreements  115
Section 19.22
  Counterparts  115
Section 19.23
  Joint and Several Liability  115
 

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EXHIBITS AND SCHEDULES 

 

EXHIBIT A
  TITLE INSURANCE REQUIREMENTS
EXHIBIT B
  SURVEY REQUIREMENTS
EXHIBIT C
  SINGLE PURPOSE ENTITY PROVISIONS
EXHIBIT D
  ENFORCEABILITY OPINION REQUIREMENTS
EXHIBIT E
  NON-CONSOLIDATION OPINION REQUIREMENTS
EXHIBIT F
  COUNTERPARTY OPINION REQUIREMENTS
EXHIBIT G
  FORM OF TENANT ESTOPPEL LETTER
EXHIBIT H-1
  BORROWER ORGANIZATIONAL STRUCTURE AT CLOSING
EXHIBIT H-2
  INTENTIONALLY DELETED
EXHIBIT I
  INTEREST RATE CAP AGREEMENT REQUIREMENTS
EXHIBIT J
  FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT K
  FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT L
  INTENTIONALLY DELETED
EXHIBIT M
  COUNTERPARTY ACKNOWLEDGMENT
EXHIBIT N
  INTENTIONALLY DELETED
EXHIBIT O
  INTENTIONALLY DELETED
EXHIBIT P
  INTENTIONALLY DELETED
EXHIBIT Q
  INTENTIONALLY DELETED
EXHIBIT R
  ARTICLE 8 OPT IN LANGUAGE
SCHEDULE I
  LITIGATION SCHEDULE
SCHEDULE II
  INTENTIONALLY DELETED
SCHEDULE III
  PRE-APPROVED TRANSFEREES
SCHEDULE IV
  PRE-APPROVED MANAGERS
SCHEDULE V
  INTENTIONALLY DELETED
SCHEDULE VI
  INTENTIONALLY DELETED
SCHEDULE VII
  INTENTIONALLY DELETED
 

-v- 

**LOAN AND SECURITY AGREEMENT**

THIS LOAN AND SECURITY AGREEMENT dated as of October 6, 2006 (as amended, restated, replaced, supplemented or otherwise modified fromtime to time, this “**Agreement**”), between SHC MICHIGAN AVENUE, LLC, a Delaware limited liability company, (the “**Borrower**”) having an office at c/o Strategic Hotel Funding, L.L.C., 77 West WackerDrive, Suite 4600, Chicago, Illinois 60601, and CITIGROUP GLOBAL MARKETS REALTY CORP., a New York corporation, having an address at 388 Greenwich Street, New York, New York 10013 (together with its successors and assigns,“**Lender**”). 

**WITNESSETH:**

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

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

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

**I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION**

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

“**Acceptable Counterparty**” shall mean a bank or other financial institution which has a long-term unsecured debt or counterparty rating of “AA-” (long term) and“A-1+” (short term) or higher by S&P and its equivalent by Moody’s and, if the counterparty is rated by Fitch, by Fitch. 

“**Acceptable Management Agreement**” shall mean, with respect to the Property, a new or amended management agreement with the Manager which agreement (as applicable) shall be uponterms and conditions entered into by Borrower, Operating Lessee, and/or Manager with respect to the Property in accordance with the terms of Section 5.2.14 hereof. 

“**Acceptable Manager**” shall mean (i) the current Manager as of the Closing Date or any wholly-owned Affiliate(whether direct or indirect) of said current Manager, (ii) at any time after the Closing Date, any Pre-approved Manager listed on **Schedule IV** hereto, provided each such property manager continues to be Controlled bysubstantially the same Persons Controlling such property manager as of the Closing Date (or if such Manager is a publicly traded company, such Manager continues to be publicly traded on an established securities market), (iii) any other hotelmanagement company that manages a system of at least six (6) hotels or resorts of a class and quality of at least as comparable to the Property (as reasonably 

determined by Manager and Operating Lessee; provided, however, Operating Lessee shall obtainLender’s prior approval of such determination, not to be unreasonably withheld) and containing not fewer than 1,500 hotel rooms in the aggregate (including hotel/condominium units under management) in the aggregate, (iv) any CloseAffiliate of any of the foregoing Persons or (v) any other reputable and experienced professional hotel management company with respect to which a Rating Agency Confirmation has been obtained. 

“**Accommodation Security Documents**” shall mean the Security Instrument, the Assignment of Leases and UCC-1 FinancingStatements which have been executed by Borrower and Operating Lessee in favor of Lender to secure Borrower’s obligations under the Loan Documents. 

“**Account Agreement**” shall mean the Account and Control Agreement, dated the date hereof, among Lender, Borrower and Cash Management Bank. 

“**Account Collateral**” shall have the meaning set forth in Section 3.1.2. 

“**Acknowledgment**” shall mean the Acknowledgment, dated on or about the date hereof made by Counterparty, or asapplicable, Acceptable Counterparty in the form of **Exhibit M**. 

“**Additional Non-ConsolidationOpinion**” shall have the meaning set forth in Section 4.1.29(b). 

“**Affiliate**”shall mean, with respect to any specified Person, any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with, or any general partner or managing member in, such specified Person. 

“**Agreement**” shall mean this Agreement, as the same may be amended, restated, replaced, supplemented or otherwisemodified from time to time. 

“**ALTA**” shall mean American Land Title Association, orany successor thereto. 

“**Alteration**” shall mean any demolition, alteration, installation, improvementor decoration of or to the Property or any part thereof or the Improvements (including FF&E) thereon (other than any of the foregoing that (i) is permitted to be done and actually is done by or on behalf of the Manager without the consentof the Borrower (it being the intent of the parties that for this purpose amounts expended by Manager in respect of FF&E in the ordinary course of business from amounts reserved for FF&E under the Management Agreement shall be deemed not tobe an Alteration), or (ii) is paid for out of any reserve account described in Article XVI. 

“**ApprovedBank**” shall have the meaning set forth in the Account Agreement. 

“**Assignment andAcceptance**” shall mean an assignment and acceptance entered into by Lender and an assignee, and accepted by Lender in accordance with Article XV and in substantially the form of **Exhibit J** or such otherform customarily used by Lender in connection with the participation or syndication of mortgage loans at the time of such assignment. 

 

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“**Assignment of Leases**” shall mean that certain first priorityAssignment of Leases, Rents, Hotel Revenue and Security Deposits, dated as of the date hereof, from Borrower and Operating Lessee, as assignor, to Lender, as assignee, assigning to Lender all of Borrower’s and Operating Lessee’s interestin and to the Leases, Rents, Hotel Revenue and Security Deposits as security for the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 

“**Bankruptcy Code**” shall mean Title 11, U.S.C.A., as amended from time to time and any successor statutethereto. 

“**Beneficial**” when used in the context of beneficial ownership has the analogous meaning tothat specified in Rule 13d-3 under the Securities Exchange Act of 1934, as amended. 

“**Best of Borrower’sKnowledge**”, shall mean the actual (as opposed to imputed or constructive) present knowledge of: Cory Warning and Ryan Bowie after due inquiry, and without creating any personal liability on the part of any said individuals. In the casewhere the term “Best of Borrower’s Knowledge” is used in the context of representations or warranties of Borrower to be made after the date hereof, the term shall include the Person or Persons, as applicable, that occupy thecapacities of said individuals on the date such representation or warranty to the extent that one or more of such individuals no longer occupy their current capacities. 

“**Borrower**” has the meaning set forth in the first paragraph of this Agreement. 

“**Borrower’s Account**” shall mean an account with any Person subsequently identified in a written notice from Borrower to Lender, which Borrower’s Account shall be underthe sole dominion and control of Borrower. 

“**Budget**” shall mean the operating budget for the Propertyprepared by Manager on Borrower’s behalf, pursuant to the Management Agreement, for the applicable Fiscal Year or other period setting forth, in reasonable detail, Manager’s estimates, consistent with the Management Agreement, of theanticipated results of operations of the Property, including revenues from all sources, all Operating Expenses, Management Fees and Capital Expenditures. 

“**Building Equipment**” shall have the meaning set forth in the Security Instrument. 

“**Business Day**” shall mean any day other than a Saturday, Sunday or any other day on which national banks in New York, Illinois or in the state in which Servicer is located are notopen for business. When used with respect to an Interest Determination Date, Business Day shall mean any day on which dealings in deposits in U.S. Dollars are transacted in the London interbank market. 

“**Capital Expenditures**” shall mean any amount incurred in respect of capital items which in accordance with GAAPwould not be included in Borrower’s annual financial statements for an applicable period as an operating expense of the Property. 

“**Cash**” shall mean the legal tender of the United States of America. 

 

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“**Cash and Cash Equivalents**” shall mean any one or a combination ofthe following: (i) Cash, and (ii) U.S. Government Obligations. 

“**Cash Management Bank**” shallmean LaSalle Bank National Association or any successor Approved Bank acting as Cash Management Bank under the Account Agreement or other financial institution approved by the Lender and, if a Securitization has occurred, the Rating Agencies.

“**Casualty**” shall mean a fire, explosion, flood, collapse, earthquake or other casualty affecting theProperty. 

“**CGM**” shall have the meaning set forth in Section 14.4.2(b). 

“**CGM Group**” shall have the meaning set forth in Section 14.4.2(b). 

“**Close Affiliate**” shall mean with respect to any Person (the “First Person”) any other Person (each, a“Second Person”) which is an Affiliate of the First Person and in respect of which any of the following are true: (a) the Second Person owns, directly or indirectly, at least 75% of all of the legal, Beneficial and/or equitableinterest in such First Person, (b) the First Person owns, directly or indirectly, at least 75% of all of the legal, Beneficial and/or equitable interest in such Second Person, or (c) a third Person owns, directly or indirectly, at least75% of all of the legal, Beneficial and/or equitable interest in both the First Person and the Second Person. 

“**Closing Date**” shall mean the date of this Agreement set forth in the first paragraph hereof. 

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

“**Collateral Accounts**” shall have the meaning setforth in Section 3.1.1. 

“**Collection Account**” shall have the meaning set forth inSection 3.1.1. 

“**Condemnation**” shall mean a taking or voluntary conveyance during the termhereof of all or any part of the Property or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority, whether or not thesame shall have actually been commenced. 

“**Consumer Price Index**” or “**CPI**”shall mean the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the United States Department of Labor, New York – Northern New Jersey – Long Island, NY – NJ – CT – PA; All Items;1982-84 = 100. If the Bureau of Labor Statistics substantially revises the manner in which the CPI is determined, an adjustment shall be made by Lender in the revised index which would produce results equivalent, as nearly as possible, to thosewhich would be obtained if the CPI had not been so revised. If the CPI becomes unavailable to the public because publication is 

 

4 

discontinued, or otherwise, Lender shall substitute therefor a comparable index based upon changes in thecost of living or purchasing power of the consumer dollar published by any other governmental agency reasonably acceptable to Borrower or, if no such index is available, then, subject to reasonable approval of Borrower, a comparable index publishedby a major bank, other financial institution, university or recognized financial publication shall be substituted. 

“**CPI Increase**” shall mean the relevant figure multiplied by a fraction, the numerator of which shall be the CPI on each anniversary of the Closing Date and the denominator of which shall be the CPI on the ClosingDate, which CPI Increase is calculated on each anniversary of the Closing Date. 

“**Control**” shall mean(i) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise and (ii) the ownership, director indirect, of no less than 51% of the voting securities of such Person, and the terms Controlled, Controlling and Common Control shall have correlative meanings. 

“**Counterparty**” shall mean the counterparty to the Interest Rate Cap Agreement and any counterparty under a Replacement Interest Rate Cap Agreement or Extension Interest Rate CapAgreement and, if applicable, any credit support provider identified in the Interest Rate Cap Agreement, Replacement Interest Rate Cap Agreement or Extension Interest Rate Cap Agreement. 

“**Counterparty Opinion**” shall have the meaning set forth in Section 9.3(f). 

“**Current Debt Service Reserve Account**” shall have the meaning set forth in Section 3.1.1. 

“**Debt**” shall mean, with respect to any Person at any time, (a) indebtedness or liability of such Person forborrowed money whether or not evidenced by bonds, debentures, notes or other instruments, or for the deferred purchase price of property or services; (b) obligations of such Person as lessee under leases which should have been or should be, inaccordance with GAAP, recorded as capital leases; (c) current liabilities of such Person in respect of unfunded vested benefits under plans covered by Title IV of ERISA; (d) obligations issued for, or liabilities incurred on theaccount of, such Person; (e) obligations or liabilities of such Person arising under letters of credit, credit facilities or other acceptance facilities; (f) obligations of such Person under any guarantees or other agreement to becomesecondarily liable for any obligation of any other Person, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds to investin any Person or otherwise to assure a creditor against loss; (g) obligations of such Person secured by any Lien on any property of such Person, whether or not the obligations have been assumed by such Person; or (h) obligations of suchPerson under any interest rate or currency exchange agreement. 

“**Debt Service**” shall mean, withrespect to any particular period of time, scheduled interest payments under the Note. 

 

5 

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

“**Default Rate**” shall have the meaning set forth in the Note. 

“**DisclosureDocuments**” shall have the meaning set forth in Section 14.4.1. 

“**DisqualifiedTransferee**” shall mean any Person or its Close Affiliate that, (i) has (within the past five (5) years) defaulted, or is now in default, beyond any applicable cure period, of its material obligations, under any materialwritten agreement with Lender, any Affiliate of Lender, or, unless approved by the Rating Agencies, any other financial institution or other person providing or arranging financing; (ii) has been convicted in a criminal proceeding for a felonyor a crime involving moral turpitude or that is an organized crime figure or is reputed (as determined by Lender in its sole discretion) to have substantial business or other affiliations with an organized crime figure; (iii) has at any timefiled a voluntary petition under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (iv) as to which an involuntary petition (which was not subsequently dismissed within one hundred twenty (120) days) has atany time been filed under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (v) has at any time filed an answer consenting to or acquiescing in any involuntary petition filed against it by any other person underthe Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (vi) has at any time consented to or acquiesced in or joined in an application for the appointment of a custodian, receiver, trustee or examiner for itself or anyof its property; (vii) has at any time made an assignment for the benefit of creditors, or has at any time admitted its insolvency or inability to pay its debts as they become due; or (viii) has been found by a court of competentjurisdiction or other governmental authority in a comparable proceeding to have violated any federal or state securities laws or regulations promulgated thereunder. 

“**Downgrade**” shall have the meaning as set forth in Section 9.3(c) hereof. 

“**DSCR**” shall mean, with respect to a particular period, the ratio of Net Operating Income to the aggregate amount of Debt Service that is payable in respect of such period, ascomputed by Lender from time to time pursuant to the terms hereof, using in all cases, an assumed loan constant (instead of actual debt service payable under such loan) per annum equal to the strike price of the Interest Rate Cap Agreement in effecton the date of such determination (which constant shall be calculated at all times using an actual/360 accrual convention). If no such period is specified, then the period shall be deemed to be the immediately preceding four (4) FiscalQuarters. 

“**Eligible Account**” has the meaning set forth in the Account Agreement. 

“**Eligible Collateral**” shall mean U.S. Government Obligations, Letters of Credit or Cash and Cash Equivalents, or anycombination thereof. 

“**Environmental Certificate**” shall have the meaning set forth inSection 12.2.1. 

 

6 

“**Environmental Claim**” shall mean any claim, action, cause of action,investigation or written notice by any Person alleging potential liability (including potential liability for investigatory costs, cleanup costs, natural resource damages, property damages, personal injuries or penalties) arising out of, based uponor resulting from (a) the presence, threatened presence, release or threatened release into the environment of any Hazardous Materials from or at the Property, or (b) the violation, or alleged violation, of any Environmental Law relatingto the Property. 

“**Environmental Event**” shall have the meaning set forth inSection 12.2.1. 

“**Environmental Indemnity**” shall mean the Environmental Indemnity, datedthe date hereof, made by Sponsor in favor of Lender. 

“**Environmental Law**” shall have the meaningprovided in the Environmental Indemnity. 

“**Environmental Reports**” shall have the meaning set forth inSection 12.1. 

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

“**Event of Default**” shall have the meaning set forth in Section 17.1(a). 

“**Excess Cash Flow**” shall have the meaning set forth in Section 3.1.5. 

“**Exchange Act**” shall have the meaning set forth in Section 14.4.1. 

“**Exculpated Parties**” shall have the meaning set forth in Section 18.1.1. 

“**Excusable Delay**” shall mean a delay due to acts of god, governmental restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion, fire, casualty, strikes, work stoppages, shortages of labor ormaterials or other causes beyond the reasonable control of Borrower, but Borrower’s lack of funds in and of itself shall not be deemed a cause beyond the control of Borrower. 

“**Expansion**” shall mean any expansion or reduction of the Property or any portion thereof or the Improvementsthereon. 

“**Extension Interest Rate Cap Agreement**” shall mean, following the Borrower’s exerciseof its option to extend the Maturity Date pursuant to Section 5 of the Note, an Interest Rate Cap Agreement or Agreements (together with the confirmations and schedules relating thereto), each from an Acceptable Counterparty and satisfying therequirements set forth on **Exhibit I** hereto; provided that, to the extent any such interest rate cap agreement does not meet the foregoing requirements, an “Extension Interest Rate Cap Agreement” shall be suchinterest rate cap agreement as may be approved by each of the Rating Agencies (such approval to be evidenced by the receipt of a Rating Agency Confirmation). 

 

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“**FF&E**” shall mean furniture, fixtures and equipment of the typecustomarily utilized in hotel properties in Illinois similar to the Property. 

“**FF&E ReserveAccount**” shall have the meaning set forth in Section 3.1.1. 

“**FinalCompletion**” shall mean, with respect to any specified work, the final completion of all such work, including the performance of all “punch list” items, as confirmed by an Officer’s Certificate and, with respect to anyMaterial Alteration or Material Expansion, a certificate of the Independent Architect, if applicable. 

“**FiscalQuarter**” shall mean each quarter within a Fiscal Year in accordance with GAAP. 

“**FiscalYear**” shall mean the period commencing on the Closing Date and ending on and including December 31 of the calendar year in which the Closing Date occurs and thereafter each twelve month period commencing on January 1 andending on December 31 until the Debt is repaid in full, or such other common fiscal year of Borrower as Borrower may select from time to time with the prior consent of Lender, such consent not to be unreasonably withheld. 

“**Fitch**” shall mean Fitch Ratings Inc. 

“**GAAP**” shall mean the generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute ofCertified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by suchentity as may be in general use by significant segments of the U.S. accounting profession, to the extent such principles are applicable to the facts and circumstances on the date of determination, as appropriately modified by the Uniform System.

“**Gift Shop Lease**” shall mean the Lease Agreement, dated August 1999, by and between CIMS LimitedPartnership d/b/a Hotel InterContinental Chicago and WH Smith Hotels Stores, as assigned to TravelTraders, LLC as of November 17, 2003. 

“**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. 

“**Group Services Fee**”shall mean the expenses payable to Manager or any Affiliate as permitted under Article 7 of the Management Agreement or any similar provision in a replacement Management Agreement. 

“**Hazardous Materials**” shall have the meaning provided in the Environmental Indemnity. 

“**Holding Account**” shall have the meaning set forth in Section 3.1.1. 

 

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“**Hotel Revenue**” shall mean all revenues, income, Rents, issues,profits, termination or surrender fees, penalties and other amounts arising from the use or enjoyment of all or any portion of the Property, including, without limitation, the rental or surrender of any office space, retail space, parking space,halls, stores, and offices of every kind, the rental or licensing of signs, sign space or advertising space and all membership fees and dues, rentals, revenues, receipts, income, accounts, accounts receivable, cancellation fees, penalties, creditcard receipts and other receivables relating to or arising from rentals, rent equivalent income, income and profits from guest rooms, meeting rooms, conference and banquet rooms, food and beverage facilities, health clubs, spas, vending machines,parking facilities, telecommunication and television systems, guest laundry, the provision or sale of other goods and services, and any other items of revenue, receipts or other income as identified in the Uniform System. 

“**Impositions**” shall mean all taxes (including all ad valorem, sales (including those imposed on lease rentals), use,single business, gross receipts, value added, intangible transaction, privilege or license or similar taxes), governmental assessments (including all assessments for public improvements or benefits, whether or not commenced or completed prior to thedate hereof and whether or not commenced or completed within the term of this Agreement), water, sewer or other rents and charges, excises, levies, fees (including license, permit, inspection, authorization and similar fees), and all othergovernmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Property and/or any Rents and Hotel Revenue (including all interest and penalties thereon),which at any time prior to, during or in respect of the term hereof may be assessed or imposed on or in respect of or be a Lien upon (a) Borrower (including all income, franchise, single business or other taxes imposed on Borrower for theprivilege of doing business in the jurisdiction in which the Property is located), (b) the Property, or any other collateral delivered or pledged to Lender in connection with the Loan, or any part thereof, or any Rents or Hotel Revenuetherefrom or any estate, right, title or interest therein, or (c) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with the Property or the leasing or use of all or any part thereof.Nothing contained in this Agreement shall be construed to require Borrower to pay any tax, assessment, levy or charge imposed on (i) any tenant occupying any portion of the Property, (ii) any manager of the Property, including any Manager,or (iii) Servicer, Lender or any other third party in the nature of a capital levy, estate, inheritance, succession, income or net revenue tax. 

“**Improvements**” shall have the meaning set forth in the Security Instrument. 

“**Increased Costs**” shall have the meaning set forth in Section 2.4.1. 

“**Indebtedness**” shall mean, at any given time, the Principal Amount, together with all accrued and unpaid interest thereon and all other obligations and liabilities due or to becomedue to Lender pursuant hereto, under the Note or in accordance with the other Loan Documents and all other amounts, sums and expenses paid by or payable to Lender hereunder or pursuant to the Note or the other Loan Documents. 

“**Indemnified Parties**” shall have the meaning set forth in Section 19.12(b). 

 

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“**Independent**” shall mean, when used with respect to any Person, aPerson who: (i) does not have any direct financial interest or any material indirect financial interest in Borrower or in any Affiliate of Borrower, (ii) is not connected with Borrower or any Affiliate of Borrower as an officer, employee,promoter, underwriter, trustee, partner, member, manager, creditor, director, supplier, customer or person performing similar functions and (iii) is not a member of the immediate family of a Person defined in (i) or (ii) above.

“**Independent Architect**” shall mean an architect, engineer or construction consultant selected byBorrower which is Independent, licensed to practice in the State and has at least five (5) years of architectural experience and which is reasonably acceptable to Lender. 

“**Independent Director**”, “**Independent Manager**”, or “**IndependentMember**” shall mean a Person who is not and will not be while serving and has never been (i) a member (other than an Independent Member), manager (other than an Independent Manager), director, (other than an Independent Director),employee, attorney, or counsel of Borrower or its Affiliates, (ii) in the seven (7) years prior to the Closing Date, a customer, supplier or other Person who derives more than 1% of its purchases or revenues from its activities withBorrower or its Affiliates, (iii) a direct or indirect legal or beneficial owner in such entity or any of its Affiliates, (iv) a member of the immediate family of any member, manager, employee, attorney, customer, supplier or other Personreferred to above, or (v) a person Controlling or under the common Control of anyone listed in (i) through (iv) above. A Person that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Directoror Independent Manager or Independent Member if such individual is at the time of initial appointment, or at any time while serving as such, is an Independent Director or Independent Manager or Independent Member, as applicable, of a Single PurposeEntity affiliated with Borrower. 

“**Insurance Requirements**” shall mean, collectively, (i) allmaterial terms of any insurance policy required pursuant to this Agreement and (ii) all material regulations and then-current standards applicable to or affecting the Property or any part thereof or any use or condition thereof, which may, atany time, be recommended by the Board of Fire Underwriters, if any, having jurisdiction over the Property, or such other body exercising similar functions. 

“**Insurance Reserve Account**” shall have the meaning set forth in Section 3.1.1(b). 

“**Insurance Reserve Amount**” shall have the meaning set forth in Section 16.2. 

“**Insurance Reserve Trigger**” shall mean Borrower’s failure to deliver to Lender not less than five Business Days prior to each Payment Date (unless the prior notice to Lenderprovided evidence reasonably satisfactory to Lender that Borrower had prepaid such insurance premiums through a future Payment Date), evidence that all insurance premiums for the insurance required to be maintained pursuant to the terms of thisAgreement have been paid in full. 

“**Intangible**” shall have the meaning set forth in the SecurityInstrument. 

“**Interest Determination Date**” shall have the meaning set forth in the Note. 

 

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“**Interest Period**” shall have the meaning set forth in the Note.

“**Interest Rate Cap Agreement**” shall mean an Interest Rate Agreement or Agreements (together with theconfirmation and schedules relating thereto), or, with Lender’s prior written consent (which shall not be unreasonably withheld, delayed or conditioned), a swap or other interest rate hedging instrument, each between a Counterparty and Borrowerobtained by Borrower and collaterally assigned to Lender pursuant to this Agreement, and each satisfying the requirements set forth in **Exhibit I** and, in the case of a swap or other interest rate hedging agreement consented to byLender, any additional requirements of the Rating Agencies). 

“**Land**” shall have the meaning set forthin the Security Instrument. 

“**Late Payment Charge**” shall have the meaning set forth inSection 2.2.3. 

“**Lease**” shall mean any lease (other than the Operating Lease), sublease orsubsublease, letting, license, concession, or other agreement (whether written or oral and whether now or hereafter in effect) (excluding club membership programs now or hereafter in effect entitling Persons to preferential access to the Property)pursuant to which any Person is granted by the Borrower or Operating Lessee a possessory interest in, or right to use or occupy all or any portion of any space in the Property or any facilities at the Property (other than typical short-termoccupancy rights of hotel guests which are not the subject of a written agreement), and every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease,sublease, subsublease, or other agreement and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto. 

“**Lease Modification**” shall have the meaning set forth in Section 8.8.1. 

“**Legal Requirements**” shall mean all present and future laws, statutes, codes, ordinances, orders, judgments,decrees, injunctions, rules, regulations and requirements, and irrespective of the nature of the work to be done, of every Governmental Authority including, without limitation, Environmental Laws and all covenants, restrictions and conditions now orhereafter of record which may be applicable to Borrower or to the Property and the Improvements and the Building Equipment thereon, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or reconstruction ofthe Property and the Improvements and the Building Equipment thereon including, without limitation, building and zoning codes and ordinances and laws relating to handicapped accessibility. 

“**Lender**” shall have the meaning set forth in the first paragraph of this Agreement. 

“**Letter of Credit**” shall mean an irrevocable, unconditional, transferable (without the imposition of any fee exceptany fees which are expressly payable by the Borrower), clean sight draft letter of credit (either an evergreen letter of credit or one which does not expire until at least sixty (60) days after the Maturity Date (the “**LC ExpirationDate**”), in favor of Lender and entitling Lender to draw thereon in New York, New York, based solely on a statement executed by an officer or authorized signatory of Lender and issued by an Approved Bank. If at any time (a) theinstitution issuing any such Letter of Credit shall cease to be an 

 

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Approved Bank or (b) the Letter of Credit is due to expire prior to the LC Expiration Date, Lendershall have the right immediately to draw down the same in full and hold the proceeds thereof in accordance with the provisions of this Agreement, unless Borrower shall deliver a replacement Letter of Credit from an Approved Bank within (i) asto (a) above, twenty (20) days after Lender delivers written notice to Borrower that the institution issuing the Letter of Credit has ceased to be an Approved Bank or (ii) as to (b) above, at least twenty (20) days prior tothe expiration date of said Letter of Credit. 

“**Liabilities**” shall have the meaning set forth inSection 14.4.2(b). 

“**LIBOR**” shall have the meaning set forth in the Note. 

“**LIBOR Cap Strike Rate**” shall mean 7.50%. 

“**LIBOR Margin**” shall mean “LIBOR Margin” as defined in the Note. 

“**LIBOR Rate**” shall have the meaning set forth in the Note. 

“**License**” shall have the meaning set forth in Section 4.1.23. 

“**Lien**” shall mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or anyother encumbrance or charge on or affecting Borrower, the Property, any portion thereof or any interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially thesame economic effect as any of the foregoing, the filing of any financing statement, and the filing of mechanic’s, materialmen’s and other similar liens and encumbrances. 

“**Loan**” shall mean the loan in the amount of $120,000,000 made by Lender to Borrower pursuant to this Agreement.

“**Loan Documents**” shall mean, collectively, this Agreement, the Note, the Security Instrument, theAssignment of Leases, the Environmental Indemnity, the Subordination of Operating Lease, the Account Agreement, the Sponsor Indemnity, the Manager Subordination Agreements and all other documents executed and/or delivered by Borrower in connectionwith the Loan including any certifications or representations delivered by or on behalf of Borrower, any Affiliate of Borrower, the Manager, or any Affiliate of the Manager (including, without limitation, any certificates in connection with anylegal opinions delivered on the date hereof), together with all of the Accommodation Security Documents executed by the Operating Lessee. 

“**Loan to Value Ratio**” shall mean the ratio, as of a particular date, in which the numerator is equal to the outstanding principal balance of the Loan and the denominator is equalto the appraised value of the Property as determined by Lender in its reasonable discretion. 

“**ManagementAgreement**” shall mean that certain Hotel Management Agreement dated April 1, 2005 between IHG Management (Maryland), LLC and DTRS Michigan Avenue/Chopin Plaza Sub, LLC and recorded as Document No. 0509727142 in the Cook CountyRecords, as further assigned to the Operating Lessee pursuant to that Assignment and Assumption of Management Agreement and Manager Consent dated the date hereof, as the same may be amended, restated, replaced, supplemented or otherwise modifiedfrom time to time in accordance with the terms hereof. 

 

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“**Management Control**” shall mean, with respect to any direct orindirect interest in the Borrower or the Property (not including Manager under an Approved Management Agreement), the power and authority to make and implement or cause to be made and implemented all material decisions with respect to the operation,management, financing and disposition of the specified interest. 

“**Management Fee**” shall mean anamount equal to the management fees payable to the Manager pursuant to the terms of the Management Agreement for management services, the Group Services Fee, incentive management fees and any other fees described in the Management Agreement, and anyallocated franchise fees. 

“**Manager**” shall mean, as of the Closing Date, IHG Management (Maryland),LLC, a Maryland corporation, or any replacement “Manager” appointed in accordance with Section 5.2.14 hereof. 

“**Manager Accounts**” shall mean the “Bank Accounts” (as defined in the Management Agreement) maintained by Manager in the name of Borrower or Operating Lessee with respect to the Property and in accordancewith the terms of the Management Agreement. 

“**Manager FF&E Reserve Account**” shall mean the“Reserve Account” as defined in the Management Agreement. 

“**Manager Reimbursable Expenses**”shall mean the “Reimbursable Expenses” as defined in Section 5.09 of the Management Agreement. 

“**Manager Subordination Agreements**” shall mean that certain Consent to Assignment, Agreement and Estoppel and Subordination, Non-Disturbance and Attornment Agreement dated the date hereof, among Lender, Borrower,Operating Lessee, and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 

“**Material Adverse Effect**” shall mean any event or condition that has a material adverse effect on (i) the Property taken as a whole, (ii) the use, operation, or value of the Property, (iii) thebusiness, profits, operations or financial condition of the Borrower or (iv) the ability of Borrower to repay the principal and interest of the Loan as it becomes due or to satisfy any of Borrower’s obligations under the Loan Documents.

“**Material Alteration**” shall mean any Alteration (other than with respect to replacements of FF&Ethat are funded from reserves for FF&E reserved for hereunder or under the Management Agreement by the Manager) to be performed by or on behalf of Borrower at the Property, the total cost of which (including, without limitation, constructioncosts and costs of architects, engineers and other professionals), as reasonably estimated by an Independent Architect, exceeds the Threshold Amount. 

 

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“**Material Casualty**” shall mean a Casualty where the loss (i) isin an aggregate amount equal to or in excess of thirty percent (30%) of the outstanding Principal Amount of the Loan or (ii) has caused thirty percent (30%) or more of the hotel rooms or common areas (including banquet and conferencefacilities) in the Property to be unavailable for its applicable use. 

“**Material Condemnation**” shallmean a Condemnation where the loss (i) is in an aggregate amount equal to or in excess of thirty percent (30%) of the outstanding Principal Amount of the Loan or (ii) has caused thirty percent (30%) or more of the hotel rooms orcommon areas (including banquet and conference facilities) in the Property to be unavailable for its applicable use. 

“**Material Expansion**” shall mean any Expansion to be performed by or on behalf of the Borrower at the Property, the total cost of which, as reasonably estimated by an Independent Architect, exceeds the ThresholdAmount. 

“**Material Lease**” shall mean any Lease (a) demising a premises within the Property thatis more than 10,000 net rentable square feet or (b) that is for a term equal to or greater than sixty (60) months. 

“**Maturity Date**” shall have the meaning set forth in the Note. 

“**Maturity DatePayment**” shall have the meaning set forth in the Note. 

“**Maximum Legal Rate**” shall meanthe maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, underthe 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. 

“**Monetary Default**” shall mean a Default (i) that can be cured with the payment of money or (ii) arising pursuant to Section 17.1(a)(vi) or (vii).

“**Monthly FF&E Reserve Amount**” shall mean an amount determined by Lender (based upon the mostrecent monthly operating statements delivered pursuant hereto) equal to 4% of Hotel Revenue. 

“**Monthly InsuranceReserve Amount**” shall have the meaning set forth in Section 16.2. 

“**Monthly Tax ReserveAmount**” shall have the meaning set forth in Section 16.1. 

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

“**Net Operating Income**” shall mean, for any specifiedperiod, the excess of Operating Income over Operating Expenses for the trailing twelve (12) month period. 

 

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“**New Lease**” shall have the meaning set forth inSection 8.8.1. 

“**Non-Consolidation Opinion**” shall have the meaning provided inSection 2.5.5. 

“**Non-Disturbance Agreement**” shall have the meaning set forth inSection 8.8.9. 

“**Note**” shall mean that certain Note in the principal amount of One Hundredand Twenty Million Dollars ($120,000,000), made by Borrower in favor of Lender as of the date hereof, as the same may be amended, restated, replaced, substituted (including any components or subcomponents) or supplemented or otherwise modified fromtime to time. 

“**Obligations**” shall have meaning set forth in the recitals of the Security Instrument.

“**OFAC List**” means the list of specially designated nationals and blocked persons subject to financialsanctions that is maintained by the U.S. Treasury Department, Office Foreign Assets Control and accessible through the internet website www.treas.gov/ofac/t11sdn.pdf. 

“**Officer’s Certificate**” shall mean a certificate executed by an authorized signatory of Borrower that is familiar with the financial condition of Borrower and the operation ofthe Property or the particular matter which is the subject of such Officer’s Certificate. 

“**OperatingAsset**” shall have the meaning set forth in the Security Instrument. 

“**Operating Expenses**”shall mean, for any specified period, without duplication, all expenses of Borrower or Operating Lessee (or by Manager for the account of Borrower or Operating Lessee) during such period in connection with the ownership or operation of the Property,including costs (including labor) of providing services including rooms, food and beverage, telecommunications, garage and parking and other operating departments, as well as real estate and other business taxes, other rental expenses, insurancepremiums, utilities costs, administrative and general costs, repairs and maintenance costs, Management Fees under the Management Agreement, other costs and expenses relating to the Property, required FF&E reserves, and legal expenses incurred inconnection with the operation of the Property, determined, in each case on an accrual basis, in accordance with GAAP. “Operating Expenses” shall not include (i) depreciation or amortization or other noncash items, (ii) theprincipal of and interest on the Note, (iii) income taxes or other taxes in the nature of income taxes, (iv) any expenses (including legal, accounting and other professional fees, expenses and disbursements) incurred in connection with andallocable to the issuance of the Note, (v) the cost of any FF&E expenditures (other than amounts deposited into the applicable hotel operating account for FF&E expenditures, which shall be considered an “Operating Expense” asused herein) or any other capital expenditures, or (vi) the excess of insurance premiums over the Maximum Premium Amount (per annum) incurred by Borrower solely in connection with the purchase of terrorism insurance pursuant toSection 6.1(xi) distributions to the shareholders of the Borrower. Expenses that are accrued as Operating Expenses during any period shall not be included in Operating Expenses when paid during any subsequent period. 

 

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“**Operating Lease**” means that certain lease agreement dated the datehereof between the Borrower, as lessor and the Operating Lessee, as lessee. 

“**Operating Lessee**” meansDTRS InterContinental Chicago, LLC, a Delaware limited liability company, as lessee under the Operating Lease. 

“**Operating Income**” shall mean for any specified period, all income received by Borrower or Operating Lessee (or by Manager for the account of Borrower or Operating Lessee) from any Person during such period inconnection with the ownership or operation of the Property, determined on an accrual basis of accounting determined in accordance with GAAP, including the following: 

(i) all amounts payable to Borrower, Operating Lessee or to Manager for the account of Borrower or Operating Lessee by any Person as Rent and/or Hotel Revenue; 

(ii) all amounts payable to Borrower or Operating Lessee (or to Manager for the account of Borrower or Operating Lessee) pursuant to anyreciprocal easement and/or operating agreements, covenants, conditions and restrictions, condominium documents and similar agreements affecting the Property and binding upon and/or benefiting Borrower and other third parties, but specificallyexcluding the Management Agreement; 

(iii) condemnation awards to the extent that such awards are compensation for lost rentallocable to such specified period; 

(iv) business interruption and loss of “rental value” insurance proceeds to theextent such proceeds are allocable to such specified period; and 

(v) all investment income with respect to the CollateralAccounts. 

Notwithstanding the foregoing clauses (i) through (v), Operating Income shall not include (A) any Proceeds (other than ofthe types described in clauses (iii) and (iv) above), (B) any proceeds resulting from the sale, exchange, transfer, financing or refinancing of all or any part of the Property (other than of the types described in clause (i) and(iii) above), (C) any repayments received from Tenants of principal loaned or advanced to Tenants by Borrower, (D) any type of income that would otherwise be considered Operating Income pursuant to the provisions above but is paiddirectly by any Tenant to a Person other than Borrower or Manager or its agent and (E) any fees or other amounts payable by a Tenant or another Person to Borrower that are reimbursable to Tenant or such other Person. 

“**Opinion of Counsel**” shall mean opinions of counsel of law firm(s) licensed to practice in Illinois and New Yorkselected by Borrower and reasonably acceptable to Lender. 

“**Other Charges**” shall mean maintenancecharges, impositions other than Impositions, and any other charges, including, without limitation, vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposedagainst the Property or any part thereof by any Governmental Authority, other than those required to be paid by a Tenant pursuant to its respective Lease. 

 

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“**Other Taxes**” shall have the meaning set forth inSection 2.4.3. 

“**Payment Date**” shall have the meaning set forth in the Note. 

“**Permitted Borrower Transferee**” shall mean any entity (i) that is experienced in owning and operating(including acting as asset manager) properties similar to the Property, (ii) (a) with a net worth together with its Close Affiliates, as of a date no more than six (6) months prior to the date of the transfer of at least $1 Billion(exclusive of the Property) and (b) who, immediately prior to such transfer, controls, together with its Close Affiliates real estate equity assets of at least $1 Billion, (iii) which, together with its Close Affiliates owns or has undermanagement or acts as the exclusive fund manager or investment advisor, at the time of the transfer, not fewer than 20 first class full service resort hotels or business hotel properties (excluding the Property) containing not fewer than 5,000 hotelrooms in the aggregate and (iv) that is not a Disqualified Transferee.. 

“**Permitted Borrower TransfereeAlternative**” shall mean any entity (i) that is experienced in owning and operating (including acting as asset manager of) properties similar to the Property, (ii) that either (a) has a net worth together with its CloseAffiliates, as of a date no more than six (6) months prior to the date of the transfer of at least $300 Million (exclusive of the Property) and, immediately prior to such transfer, controls, together with its Close Affiliates real estate equityassets of at least $1 Billion or (b) together with its Close Affiliates owns or has under management or acts as the exclusive fund manager or investment advisor, at the time of the transfer, not fewer than 6 luxury resort hotels (excluding theProperty) containing not fewer than 3,000 hotel rooms in the aggregate and (iii) that is not a Disqualified Transferee. 

“**Permitted Debt**” shall mean collectively, (a) the Note and the other obligations, indebtedness and liabilities specifically provided for in any Loan Document and secured by this Agreement, the SecurityInstrument and the other Loan Documents, (b) trade payables and other liabilities incurred in the ordinary course of Borrower’s business and payable by or on behalf of Borrower in respect of the operation of the Property, not secured byLiens on the Property (other than liens being properly contested in accordance with the provisions of this Agreement or the Security Instrument), such payables and liabilities (which shall not include taxes, accrued payroll and benefits, customer,membership and security deposits and deferred income), not to exceed at any one time outstanding two percent (2%) of the Principal Amount of the Loan, provided that (but subject to the remaining terms of this definition) each such amount shallbe paid within sixty (60) days following the date on which each such amount is incurred, provided, that such two percent (2.0%) limitation shall not include normal and customary retainages related to Alterations that are reserved for byBorrower, (c) purchase money indebtedness and capital lease obligations incurred in the ordinary course of Borrower’s business, having scheduled annual debt service not to exceed $600,000, (d) contingent obligations to repay customer,membership and security deposits held in the ordinary course of Borrower’s business, (e) obligations incurred in the ordinary course of Borrower’s business for the financing of any applicable portfolio insurance premiums, (f) anyManagement Fees not yet due and payable under the Management Agreement, (g) taxes or other charges not yet due and payable or delinquent or which are being diligently contested in good faith in accordance with Section 5.1(b)(ii) hereof,(h) indebtedness relating to Liens in respect of property or assets imposed by law which were incurred in the ordinary course of business, such as carriers’, warehousemen’s, landlord’s, mechanic’s, 

 

17 

materialmen’s, repairmen’s and other similar Liens arising in the ordinary course of business, andLiens for workers’ compensation, unemployment insurance and similar programs, in each case arising in the ordinary course of business which are either not yet due and payable or being diligently contested in good faith in accordance with therequirements of the Loan Documents, (i) the Revolver Loan and (j) such other unsecured indebtedness approved by Lender in its sole discretion and with respect to which Borrower has received a Rating Confirmation. Nothing contained hereinshall be deemed to require Borrower to pay any amount, so long as Borrower is in good faith, and by proper legal proceedings, diligently contesting the validity, amount or application thereof, provided that in each case, at the time of thecommencement of any such action or proceeding, and during the pendency of such action or proceeding (i) no Event of Default shall exist and be continuing hereunder, (ii) adequate reserves with respect thereto are maintained on the books ofBorrower in accordance with GAAP, and (iii) such contest operates to suspend collection or enforcement, as the case may be, of the contested amount and such contest is maintained and prosecuted continuously and with diligence. Notwithstandinganything set forth herein, in no event shall Borrower be permitted under this provision to enter into a note (other than the Note and the other Loan Documents) or other instrument for borrowed money other than permitted purchase money indebtednessas described in this definition. 

“**Permitted Encumbrances**” shall mean collectively, (a) the Liensand security interests created or permitted by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Policy, (c) Liens, if any, for Impositions imposed by any Governmental Authority not yet due ordelinquent (other than any such Lien imposed pursuant to Section 401(a)(29) of the Code or by ERISA), and (d) Liens on personal property items that are the subject of clause (c) of the definition of Permitted Debt. 

“**Permitted Investments**” shall have the meaning set forth in the Account Agreement. 

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

“**Physical Conditions Report**” shall mean, with respect to the Property, collectively, the (i) seismic report and(ii) structural engineering report (prepared by an Independent Architect), both of which have been (a) addressed to Lender (b) prepared based on a scope of work determined by Lender in Lender’s reasonable discretion, and(c) in form and content acceptable to Lender in Lender’s reasonable discretion, together with any amendments or supplements thereto. 

“**Plan**” shall have the meaning set forth in Section 4.1.10. 

“**Pre-approved Manager**” shall mean any entity set forth on **Schedule IV**. 

“**Pre-approved Transferee**” shall mean any of the entities set forth on **Schedule III** hereof, or any Close Affiliates thereof, provided any of the foregoingentities or their Close Affiliates shall only be a “Pre-approved Transferee” if (i) such entity continues to be 

 

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Controlled by substantially the same Persons Controlling such entity as of the Closing Date or if suchPre-approved Transferee is a publicly traded company, such Pre-approved Transferee continues to be publicly traded on an established securities market, (ii) there has been no material adverse change in the financial condition or results ofoperations of such entity since the Closing Date, (iii) such entity is not a Disqualified Transferee and (iv) if such entity as of the Closing Date is rated (a) ”Investment Grade”, there has been no deterioration in suchentity’s long-term or short-term credit rating (if any) since the Closing Date below “BBB-“ or (b) below “Investment Grade”, there has been no deterioration in such entity’s long-term or short-term credit rating(if any) since the Closing Date. 

“**Prepayment Fee**” shall have the meaning set forth in the Note.

“**Principal Amount**” shall have the meaning set forth in the Note. 

“**Proceeds**” shall mean amounts, awards or payments payable to Borrower (including, without limitation, amountspayable under any title insurance policies covering Borrower’s ownership interest in the Property) or Lender with respect to any Condemnation or Casualty and specifically including insurance required to be maintained hereunder (after thededuction therefrom and payment to Borrower and Lender, respectively, of any and all reasonable expenses incurred by Borrower and Lender in the recovery thereof, including all attorneys’ fees and disbursements, the fees of insurance experts andadjusters and the costs incurred in any litigation or arbitration with respect to any claim under such insurance policies or with respect to such Condemnation or Casualty). 

“**Prohibited Person**” means any Person identified on the OFAC List or any other Person with whom a U.S. Person may notconduct business or transactions by prohibition of Federal law or Executive Order of the President of the United States of America. 

“**Property**” shall have the meaning set forth in the Security Instrument. 

“**ProvidedInformation**” shall have the meaning set forth in Section 14.1.1. 

“**Rate CapCollateral**” shall have the meaning set forth in Section 9.2. 

“**RatingAgencies**” shall mean (a) prior to a Securitization, each of S&P, Moody’s and Fitch and any other nationally-recognized statistical rating agency which has been approved by Lender and (b) after a Securitization hasoccurred, each such Rating Agency which has rated the Securities in the Securitization. 

“**Rating AgencyConfirmation**” shall mean, collectively, a written affirmation from each of the Rating Agencies that the credit rating of the Securities given by such Rating Agency immediately prior to the occurrence of the event with respect to whichsuch Rating Agency Confirmation is sought will not be qualified, downgraded or withdrawn as a result of the occurrence of such event, which affirmation may be granted or withheld in such Rating Agency’s sole and absolute discretion. In theevent that, at any given time, no such Securities shall have been issued and are then outstanding, then the term Rating Agency Confirmation shall be deemed instead to require the written approval of Lender based on its good faith determination ofwhether the Rating Agencies would issue a Rating Agency Confirmation if any such Securities were outstanding. 

 

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“**Real Property**” shall mean, collectively, the Land, the Improvementsand the Appurtenances (as defined in the Security Instrument). 

“**Register**” shall have the meaning setforth in Section 15.4. 

“**Regulatory Change**” shall mean any change after the date of thisAgreement in federal, state or foreign laws or regulations or the adoption or the making, after such date, of any interpretations, directives or requests applying to Lender, or any Person Controlling Lender or to a class of banks or companiesControlling banks of or under any federal, state or foreign laws or regulations (whether or not having the force of law) by any court or Governmental Authority or monetary authority charged with the interpretation or administration thereof.

“**Relevant Portions**” shall have the meaning set forth in Section 14.4.2(a). 

“**Rents**” shall mean all rents, rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents,royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues,profits, charges for services rendered, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower and/or Operating Lessee from any and all sources arising from or attributable to theProperty and Proceeds, if any, from business interruption or other loss of income insurance. 

“**Restoration**” shall have the meaning provided in Section 6.2.2. 

“**Retail/Service Facilities**” shall have the meaning provided in Section 8.7.10. 

“**Replacement Interest Rate Cap Agreement**” shall mean, in connection with a replacement of an Interest Rate Cap Agreement following a Downgrade of the Counterparty thereto, an interest rate cap agreement (togetherwith the confirmation and schedules relating thereto) from an Acceptable Counterparty and satisfying the requirements set forth on **Exhibit I** hereto; provided that to the extent any such interest rate cap agreement does not meetthe foregoing requirements a “Replacement Interest Cap Agreement” shall be such interest rate cap agreement approved by each of the Rating Agencies, such approval to be evidenced by the receipt of a Rating Agency Confirmation. 

“**Revolver Loan**” shall mean that certain revolving credit facility from Deutsche Bank Trust Company Americas toStrategic Hotel Funding, L.L.C., evidenced by that certain Revolving Credit Agreement, dated as of November 5, 2006, hereof, between Deutsche Bank Trust Company Americas, Wachovia Bank National Association, as lender, various financialinstitutions, as lenders specified therein and Strategic Hotel Funding, L.L.C., as the same has heretofore and may hereafter be amended, restated, supplemented or otherwise modified or replaced, from time to time. 

 

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“**S&P**” shall mean Standard & Poor’s RatingsServices, a division of The McGraw-Hill Companies, Inc. 

“**Securities**” shall have the meaning set forthin Section 14.1. 

“**Securities Act**” shall have the meaning set forth inSection 14.4.1. 

“**Securitization**” shall have the meaning set forth inSection 14.1. 

“**Security Instrument**” shall mean that certain first priority Mortgage,Security Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents, Hotel Revenue and Security Deposits, dated the date hereof, executed and delivered by Borrower and certain of its affiliates to Lender and encumbering theProperty, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 

“**Servicer**” shall mean such Person designated in writing with an address for such Person by Lender, in its sole discretion, to act as Lender’s agent hereunder with such powers as are specifically delegated to theServicer by Lender, whether pursuant to the terms of this Agreement, the Account Agreement or otherwise, together with such other powers as are reasonably incidental thereto. 

“**Single Purpose Entity**” shall mean a Person, other than an individual, which (i) is formed or organized solely forthe purpose of owning, leasing, managing, holding, developing, using, operating and financing the Property, (ii) does not engage in any business unrelated to the Property and the ownership, development, use, operation and financing thereof,(iii) does not have any assets other than those related to its interest in the Property or the operation, management and financing thereof or any indebtedness other than the Permitted Debt, (iv) maintains its own separate books and recordsand its own accounts, in each case which are separate and apart from the books and records and accounts of any other Person (however the presentation of combined or consolidated financial condition or results of operation for purposes of financialstatements prepared for the ultimate equity owners of multiple Single Purpose Entities shall be allowed), (v) holds itself out as being a Person, separate and apart from any other Person, (vi) does not and will not commingle its funds orassets with those of any other Person, (vii) conducts its own business in its own name; (viii) maintains separate financial statements; provided, however, that any consolidated financial statements contain a note indicating that it and itsAffiliates are separate legal entities and maintain records, books of account, and accounts separate and apart from any other Person, (ix) pays its own liabilities out of its own funds, (x) observes all partnership, corporate or limitedliability company formalities, as applicable, (xi) pays the salaries of its own employees, if any, and maintains a sufficient number of employees, if any, in light of its contemplated business operations, (xii) does not pledge its assetsor guarantee or otherwise obligate itself with respect to the debts of any other Person or hold out itself or its credit as being available to satisfy the obligations of any other Person, (xiii) does not acquire obligations or securities of itspartners, members or shareholders, (xiv) allocates fairly and reasonably shared expenses, including, without limitation, any overhead for shared office space, if any, (xv) uses separate stationary, invoices, and checks bearing its ownname, (xvi) maintains an arms-length relationship with its Affiliates, (xvii) does not pledge its assets for the benefit of any other Person (other than as permitted under clauses (a) and (d) of the 

 

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definition of Permitted Encumbrances) or make any cash loans or advances to any other Person,(xviii) uses commercially reasonable efforts to correct any known misunderstanding regarding its separate identity and (xix) maintains adequate capital in light of its contemplated business operations. In addition, if such Person is apartnership, (1) all general partners of such Person shall be Single Purpose Entities; and (2) if such Person has more than one general partner, then the organizational documents shall provide that such Person shall continue (and notdissolve) for so long as a solvent general partner exists. In addition, if such Person is a corporation, then, at all times: (a) such Person shall have at least two (2) Independent Directors and (b) the board of directors of suchPerson may not take any action requiring the unanimous affirmative vote of 100% of the members of the board of directors unless all of the directors, including the Independent Directors, shall have participated in such vote. In addition, if suchPerson is a limited liability company, (a) such Person shall have at least two (2) Independent Managers or Independent Members, (b) if such Person is managed by a board of managers, the board of managers of such Person may not takeany action requiring the unanimous affirmative vote of 100% of the members of the board of managers unless all of the managers, including the Independent Managers, shall have participated in such vote, (c) if such Person is not managed by aboard of managers, the members of such Person may not take any action requiring the affirmative vote of 100% of the members of such Person unless all of the members, including the Independent Members, shall have participated in such vote,(d) each managing member shall be a Single Purpose Entity and (e) its articles of organization, certificate of formation and/or operating agreement, as applicable, shall provide that until all of the Indebtedness and Obligations are paidin full such entity will not dissolve. In addition, the organizational documents of such Person shall provide that such Person (1) without the unanimous consent of all of the partners, directors or members, as applicable, shall not with respectto itself or to any other Person in which it has a direct or indirect legal or beneficial interest (a) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or other similar official for thebenefit of the creditors of such Person or all or any portion of such Person’s properties, or (b) take any action that might cause such Person to become insolvent, petition or otherwise institute insolvency proceedings or otherwise seekany relief under any laws relating to the relief from debts or the protection of debtors generally, (2) will maintain its books, records, resolutions and agreements as official records, (3) will hold its assets in its own name,(4) will maintain its financial statements, accounting records and other organizational documents, books and records separate and apart from any other Person, (5) will not identify its partners, members or shareholders, or any Affiliatesof any of them as a division or part of it, (6) will maintain an arms-length relationship with its Affiliates, (7) except for capital contributions or capital distributions will not enter into or be a party to any transaction with itspartners, members, shareholders, or its Affiliates except in the ordinary course of business and on terms which are intrinsically fair and are no less favorable to it than would be obtained in a comparable arms-length transaction with a third party;(8) will not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities); and (9) except as permitted by the Loan Documents, will not form, acquire or hold any subsidiary (whethercorporation, partnership, limited liability company or other) or own any equity interest in any other entity other than the Property. 

“**Special Taxes**” shall mean any and all present or future taxes, levies, imposts, deductions, charges or withholdings, or any liabilities with respect thereto, including those arising after the date hereof as resultof the adoption of or any change in law, treaty, rule, 

 

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regulation, guideline or determination of a Governmental Authority or any change in the interpretation orapplication thereof by a Governmental Authority but excluding, in the case of Lender, such taxes (including income taxes, franchise taxes and branch profit taxes) as are imposed on or measured by Lender’s net income by the United States ofAmerica or any Governmental Authority of the jurisdiction under the laws under which Lender is organized or maintains a lending office. 

“**Sponsor**” shall mean, DTRS MICHIGAN AVENUE/CHOPIN PLAZA, LP, a Delaware limited partnership, INTERCONTINENTAL FLORIDA LIMITED PARTNERSHIP, a Delaware limited partnership, and CIMSLIMITED PARTNERSHIP, an Illinois limited partnership on a joint and several liability basis, all of which shall execute and deliver the Sponsor Indemnity on the Closing Date. 

“**Sponsor Indemnity**” shall mean that certain Sponsor Indemnity Agreement of Borrower, dated as of the date hereof, bySponsor in favor of Lender, as the same may be amended, supplemented, restated or otherwise modified from time to time. 

“**State**” shall mean the State in which the Property or any part thereof is located. 

“**Sub-Account(s)**” shall have the meaning set forth in Section 3.1.1. 

“**Subordination of Operating Lease**” shall mean that certain Operating Lease Subordination Agreement, dated the date hereof, among Lender, Borrower, Operating Lessee, and Manager, as the same may be amended, restated,replaced, supplemented or otherwise modified from time to time. 

“**Survey**” shall mean a survey of theProperty prepared by a surveyor licensed in the State and satisfactory to Lender and the company or companies issuing the Title Policy, and containing a certification of such surveyor satisfactory to Lender. 

“**Tax Reserve Account**” shall have the meaning set forth in Section 3.1.1. 

“**Tax Reserve Amount**” shall have the meaning set forth in Section 16.1. 

“**Tenant**” shall mean any Person leasing, subleasing or otherwise occupying any portion of the Property or permittedto use any portion of the facilities at the Property, other than the Manager and its employees, agents and assigns. 

“**Terrorism Coverage Required Amount**” shall mean an aggregate amount equal to the full replacement cost of the Property and the Improvements (without deduction for physical depreciation) from time to time, or suchlesser amounts approved by Lender in its sole discretion (or after a Securitization, upon receipt of a Rating Agency Confirmation). 

“**Threshold Amount**” shall mean an amount equal to 10% of the Principal Amount of the Loan, being $12,000,000 as of the date of this Agreement. 

“**Title Company**” shall mean, Lawyers Title Insurance Corporation and Land America Title Insurance Company.

 

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“**Title Policy**” shall mean an ALTA mortgagee title insurance policyin a form acceptable to Lender (or, if the Property is in a State which does not permit the issuance of such ALTA policy, such form as shall be permitted in such State and acceptable to Lender) issued by the Title Company with respect to theProperty and insuring the lien of the Security Instrument. 

“**Transfer**” shall mean to, directly orindirectly, sell, assign, convey, mortgage, transfer, pledge, hypothecate, encumber, grant a security interest in, exchange or otherwise dispose of any beneficial interest or grant any option or warrant with respect to, or where used as a noun, adirect or indirect sale, assignment, conveyance, transfer, pledge or other disposition of any beneficial interest by any means whatsoever whether voluntary, involuntary, by operation of law or otherwise. 

“**UCC**” or “**Uniform Commercial Code**” shall mean the Uniform Commercial Code as in effect inthe State. 

“**Ultimate Equity Owner**” shall mean Strategic Hotel Funding, L.L.C., a Delaware limitedliability company. 

“**Underwriter Group**” shall have the meaning set forth inSection 14.4.2(b). 

“**Uniform System**” shall mean the Uniform System ofAccounts for Hotels, 9th Edition, InternationalAssociation of Hospitality Accountants (1996), as from time to time amended. 

“**U.S. GovernmentObligations**” shall mean any direct obligations of, or obligations guaranteed as to principal and interest by, the United States Government or any agency or instrumentality thereof, provided that such obligations are backed by the fullfaith and credit of the United States. Any such obligation must be limited to instruments that have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change. If any such obligation is rated by S&P, it shall nothave an “r” highlighter affixed to its rating. Interest must be fixed or tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with said index. U.S. Government Obligations include, but are notlimited to: U.S. Treasury direct or fully guaranteed obligations, Farmers Home Administration certificates of beneficial ownership, General Services Administration participation certificates, U.S. Maritime Administration guaranteed Title XIfinancing, Small Business Administration guaranteed participation certificates or guaranteed pool certificates, U.S. Department of Housing and Urban Development local authority bonds, and Washington Metropolitan Area Transit Authority guaranteedtransit bonds. In no event shall any such obligation have a maturity in excess of 365 days. 

**Section 1.2 Principles ofConstruction.** All references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified. All accounting terms not specifically defined herein shall be construed in accordance with GAAP asmodified by the Uniform System. When used herein, the term “financial statements” shall include the notes and schedules thereto. Unless otherwise specified herein or therein, all terms defined in this Agreement shall have the definitionsgiven them in this Agreement when used in any other Loan Document or in any certificate or other document made or delivered pursuant 

 

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thereto. All uses of the word “including” shall mean including, without limitation unless thecontext 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 thisAgreement. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined. 

**II. GENERAL TERMS**

**Section 2.1 Loan; Disbursement to Borrower.**

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

**2.1.2 Disbursement to Borrower.** Borrower may request and receive only one borrowing hereunder in respect of the Loan and anyamount borrowed and repaid hereunder in respect of the Loan may not be reborrowed. Borrower acknowledges and agrees that the full proceeds of the Loan have been disbursed by Lender to Borrower on the Closing Date. 

**2.1.3 The Note, Security Instrument and Loan Documents.** The Loan shall be evidenced by the Note and secured by the SecurityInstrument, the Assignment of Leases, this Agreement and the other Loan Documents. 

**2.1.4 Use of Proceeds.**Borrower shall use the proceeds of the Loan to repay and discharge any existing mortgage loans secured by the Property, to provide any necessary or appropriate reserves, to make cash distributions to its members for, among other things, repayment ofany existing mezzanine loans secured by direct or indirect interests in Borrower, and as may be otherwise set forth on the Loan closing statement executed by Borrower at closing. 

**Section 2.2 Interest; Loan Payments; Late Payment Charge.**

**2.2.1 Payment of Principal and Interest.**

(i) Except as set forth in Section 2.2.1(ii), interest shall accrue on the Principal Amount as set forth in the Note. 

(ii) Upon the occurrence and during the continuance of an Event of Default and from and after the Maturity Date if the entire PrincipalAmount is not repaid on the Maturity Date, interest on the outstanding principal balance of the Loan and, to the extent permitted by law, overdue interest and other amounts due in respect of the Loan shall accrue at the Default Rate calculated fromthe date such payment was due without regard to any grace or cure periods contained herein. Interest at the Default Rate shall be computed from the occurrence of the Event of Default until the actual receipt and collection of the Indebtedness (orthat portion thereof that is then due). To the extent permitted by applicable law, interest at the Default Rate shall be added to the Indebtedness, shall itself accrue interest at the same rate as the 

 

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Loan and shall be secured by the Security Instrument. This paragraph shall not be construed as an agreementor privilege to extend the date of the payment of the Indebtedness, nor as a waiver of any other right or remedy accruing to Lender by reason of the occurrence of any Event of Default, and Lender retains its rights under the Note to accelerate andto continue to demand payment of the Indebtedness upon the happening of any Event of Default. 

**2.2.2 Method and Placeof Payment.**

(a) On each Payment Date, Borrower shall pay or cause to be paid to Lender interest accruing pursuant tothe Note for the entire Interest Period during which said Payment Date shall occur. 

(b) All amounts advanced by Lenderpursuant to the applicable provisions of the Loan Documents, other than the Principal Amount, together with any interest at the Default Rate or other charges as provided therein, shall be due and payable hereunder as provided in the Loan Documents.In the event any such advance or charge is not so repaid by Borrower, Lender may, at its option and upon notice to Borrower, first apply any payments received under the Note to repay such advances, together with any interest thereon, or othercharges as provided in the Loan Documents, and the balance, if any, shall be applied in payment of any installment of interest or principal then due and payable. 

(c) The Maturity Date Payment shall be due and payable in full on the Maturity Date. 

**2.2.3 Late Payment Charge.** If any interest payment due under the Loan Documents is not paid by Borrower within five (5) days after to the date on which it is due (or, if suchfifth (5th) day is not a Business Day, then theBusiness Day immediately preceding such day) on or prior to the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of three percent (3%) of such unpaid sum or the Maximum Legal Rate (the“**Late Payment Charge**”) in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall besecured by this Agreement, the Security Instrument and the other Loan Documents to the extent permitted by applicable law. Borrower acknowledges and agrees that the five day grace period with respect to the applicability of the Late Payment Charge(i) shall only apply to Borrower’s first failure to make a monthly interest payment in any calendar year and (ii) shall not constitute a payment grace period and shall in no way limit Lender’s rights underArticle XVII. 

**2.2.4 Usury Savings.** This Agreement and the Note are subject to the expresscondition that at no time shall Borrower be obligated or required to pay interest on the Principal Amount 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 LegalRate. 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 Amount due under the Note at a rate in excess of the Maximum Legal Rate, then the LIBOR Rate or theDefault Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not 

 

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on account of the interest due under the Note. All sums paid or agreed to be paid to Lender for the use,forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount ofinterest 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. 

**Section 2.3 Prepayments.**

**2.3.1 Prepayments.** No prepayments of the Indebtedness shall be permitted except as set forth in Section 4 of the Note. Borrower agrees and acknowledges after the closing of the Loanthat prior to a material Event of Default (as determined by Lender in its sole and absolute discretion) (x) in the case of prepayments of the Loan in connection with a Casualty or Condemnation, principal will be applied (to the extent not usedfor restoration pursuant to the terms hereof) to the Note, any substitute or component notes (as applicable) sequentially starting with the most senior securitized tranche and (y) in the case of all prepayments of the Loan other than inaccordance with the preceding clause (x), such prepayments will be applied to the Note, any substitute or component notes (as applicable) pro-rata (on the basis of their respective principal balances) among the securitized and anynon-securitized portions of the Loan (and pro-rata within the securitized portions of the Loan). Notwithstanding the foregoing, upon the occurrence and during the continuance of a material Event of Default (as determined by Lender in its sole andabsolute discretion), Borrower agrees and acknowledges that any principal prepayments of the Loan will be applied to the Note, any substitute or component notes (as applicable) sequentially, starting with the most senior securitized tranche (itbeing acknowledged that during the continuance of a material Event of Default all securitized portions of the Loan shall be paid in full prior to the payment of any non-securitized portions of the Loan). 

**2.3.2 Prepayments after Event of Default.** If, following an Event of Default, Lender shall accelerate the Indebtedness andBorrower thereafter tenders payment of all or any part of the Indebtedness, or if all or any portion of the Indebtedness is recovered by Lender after such Event of Default, (a) such payment may be made only on the next occurring Payment Datetogether with all unpaid interest thereon as calculated through the end of the Interest Period during which such Payment Date occurs (even if such period extends beyond such Payment Date and calculated as if such payment had not been made on suchPayment Date), and all other fees and sums payable hereunder or under the Loan Documents, including without limitation, interest that has accrued at the Default Rate and any Late Payment Charges), (b) such payment shall be deemed a voluntaryprepayment by Borrower, and (c) Borrower shall pay, in addition to the Indebtedness, an amount equal to the Prepayment Fee, if applicable. 

**2.3.3 Release of Property.** Lender shall, at the reasonable expense of Borrower, upon payment in full of the Principal Amount and interest on the Loan and all other amounts due and payableunder the Loan Documents in accordance with the terms and provisions of the Note and this Agreement, release the Lien of (i) this Agreement upon the Account Collateral and the Rate Cap Collateral and (ii) the Security Instrument on theProperty or assign it, in whole or in part, to a new lender. In such event, Borrower shall submit to Lender, on a date prior to the date of such release or assignment sufficient to provide a reasonable period 

 

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for review thereof, a release of lien or assignment of lien, as applicable, for such property for executionby Lender. Such release or assignment, as applicable, shall be in a form appropriate in each jurisdiction in which the Property is located and satisfactory to Lender in its reasonable discretion. In addition, Borrower shall provide all otherdocumentation Lender reasonably requires to be delivered by Borrower in connection with such release or assignment, as applicable. 

**Section 2.4 Regulatory Change; Taxes.**

**2.4.1 Increased Costs.** If, at any time prior tothe first Securitization of the Loan, as a result of any Regulatory Change or compliance of Lender therewith, the basis of taxation of payments to Lender of the principal of or interest on the Loan is changed or Lender or the company ControllingLender shall be subject to (i) any tax, duty, charge or withholding of any kind with respect to this Agreement (excluding federal taxation of the overall net income of Lender); or (ii) any reserve, special deposit or similar requirementsrelating to any extensions of credit or other assets of, or any deposits with or other liabilities, of Lender or any company Controlling Lender is imposed, modified or deemed applicable; or (iii) any other condition affecting loans to borrowerssubject to LIBOR-based interest rates is imposed on Lender or any company Controlling Lender and Lender determines that, by reason thereof, the cost to Lender or any company Controlling Lender of making, maintaining or extending the Loan to Borroweris increased, or any amount receivable by Lender or any company Controlling Lender hereunder in respect of any portion of the Loan to Borrower is reduced, in each case by an amount deemed by Lender in good faith to be material (such increases incost and reductions in amounts receivable being herein called “**Increased Costs**”), then Lender shall provide notice thereof to Borrower and Borrower agrees that it will pay to Lender upon Lender’s written request suchadditional amount or amounts as will compensate Lender or any company Controlling Lender for such Increased Costs to the extent Lender determines that such Increased Costs are allocable to the Loan and provided that Lender is generally exercisingrights similar to those set forth in this Section 2.4.1 against other borrowers similarly situated to Borrower. Lender will notify Borrower of any event occurring after the date hereof which will entitle Lender to compensation pursuantto this Section 2.4.1 as promptly as practicable after it obtains knowledge thereof and determines to request such compensation; provided, however, that, if Lender fails to deliver a notice within 90 days after the date onwhich an officer of Lender responsible for overseeing this Agreement knows or has reason to know of its right to additional compensation under this Section 2.4.1, Lender shall only be entitled to additional compensation for any suchIncreased Costs incurred from and after the date that is 90 days prior to the date Borrower received such notice. If Lender requests compensation under this Section 2.4.1, Borrower may, by notice to Lender, require that Lender furnish toBorrower a statement setting forth the basis for requesting such compensation and the method for determining the amount thereof, and a description as to why Section 2.4.5 is not applicable. 

**2.4.2 Special Taxes.** At all times prior to the first Securitization of the Loan, Borrower shall make all payments hereunderfree and clear of and without deduction for Special Taxes. If, at any time prior to the first Securitization of the Loan, Borrower shall be required by law to deduct any Special Taxes from or in respect of any sum payable hereunder or under anyother Loan Document to Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to 

 

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additional sums payable under this Section 2.4.2) Lender receives an amount equal to the sum itwould have received had no such deductions been made, (ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. 

**2.4.3 Other Taxes.** In addition, for all periods prior to the first Securitization of the Loan, Borrower agrees to pay anypresent or future stamp or documentary taxes or other excise or property taxes, charges, or similar levies which arise from any payment made hereunder, or from the execution, delivery or registration of, or otherwise with respect to, this Agreement,the other Loan Documents, or the Loan (hereinafter referred to as “**Other Taxes**”). 

**2.4.4Indemnity.** Borrower shall indemnify Lender for all periods prior to the first Securitization of the Loan, for the full amount of Special Taxes and Other Taxes (including any Special Taxes or Other Taxes imposed by any GovernmentalAuthority on amounts payable under this Section 2.4.4) paid by Lender and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto, whether or not such Special Taxes or Other Taxes werecorrectly or legally asserted. This indemnification shall be made within thirty (30) days after the date Lender makes written demand therefor. 

**2.4.5 Change of Office.** To the extent that changing the jurisdiction of Lender’s applicable office would have the effect of minimizing Special Taxes, Other Taxes or Increased Costs,Lender shall use reasonable efforts to make such a change, provided that same would not otherwise be disadvantageous to Lender. 

**2.4.6 Survival.** Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained in this Section 2.4 shall survive the payment in full ofprincipal and interest hereunder, and the termination of this Agreement. 

**Section 2.5 Conditions Precedent toClosing.** The obligation of Lender to make the Loan hereunder is subject to the fulfillment by, or on behalf of, Borrower or waiver by Lender of the following conditions precedent no later than the Closing Date; provided,however, that unless a condition precedent shall expressly survive the Closing Date pursuant to a separate agreement, by funding the Loan, Lender shall be deemed to have waived any such conditions not theretofore fulfilled or satisfied:

**2.5.1 Representations and Warranties; Compliance with Conditions.** The representations and warranties ofBorrower contained in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on and as of such date, and no Default or Event of Default shall haveoccurred and be continuing; and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each other Loan Document on its part to be observed or performed. 

 

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**2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases.**

(a) **Loan Documents**. Lender shall have received an original copy of this Agreement, the Note and all of the other LoanDocuments, in each case, duly executed (and to the extent required, acknowledged) and delivered on behalf of Borrower and any other parties thereto. 

(b) **Security Instrument, Assignment of Leases**. Lender shall have received evidence that original counterparts of the Security Instrument and Assignment of Leases, in proper form forrecordation, have been delivered to the Title Company for recording, so as effectively to create, in the reasonable judgment of Lender, upon such recording valid and enforceable first priority Liens upon the Property, in favor of Lender (orsuch other trustee as may be required or desired under local law), subject only to the Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents. 

(c) **UCC Financing Statements**. Lender shall have received evidence that the UCC financing statements relating to the SecurityInstrument and this Agreement have been delivered to the Title Company for filing in the applicable jurisdictions. 

(d)**Title Insurance**. Lender shall have received a pro forma Title Policy or a Title Policy issued by the Title Company and dated as of the Closing Date, with reinsurance and direct access agreements acceptable to Lender.Such Title Policy shall (i) provide coverage in the amount of the Loan, (ii) insure Lender that the Security Instrument creates a valid, first priority Lien on the Property, free and clear of all exceptions from coverage other thanPermitted Encumbrances and standard exceptions and exclusions from coverage (as modified by the terms of any endorsements), (iii) contain the endorsements and affirmative coverages set forth on **Exhibit A** (or such otherendorsements and affirmative coverages approved by Lender) and such additional endorsements and affirmative coverages as Lender may reasonably request, and (iv) name Lender as the insured. The Title Policy shall be assignable. Lender alsoshall have received evidence that all premiums in respect of such Title Policy have been paid. 

(e) **Survey**.Lender shall have received a current or rectified Survey for the Property, containing the survey certification substantially in the form attached hereto as **Exhibit B** or such other form as approved by Lender. Such Survey shallreflect the same legal description contained in the Title Policy referred to in clause (d) above. The surveyor’s seal shall be affixed to the Survey and the surveyor shall provide a certification for such Survey in form and substanceacceptable to Lender. 

(f) **Insurance**. Lender shall have received valid certificates of insurance for thepolicies of insurance required hereunder, satisfactory to Lender in its reasonable discretion, and evidence of the payment of all insurance premiums currently due and payable for the existing policy period. 

(g) **Environmental Reports**. Lender shall have received an Environmental Report in respect of the Property satisfactory toLender. 

(h) **Zoning**. Lender shall have received an ALTA 3.1 zoning endorsement for the Title Policy.

 

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(i) **Certificate of Occupancy**. Lender shall have received a copy of the validcertificates of occupancy for the Property or evidence acceptable to Lender that a certificate of occupancy is not required by applicable law. 

(j) **Encumbrances**. Borrower shall have taken or caused to be taken such actions in such a manner so that Lender has a valid and perfected first Lien as of the Closing Date on the Property(including extinguishing all existing mezzanine debt and Liens in connection with such debt), subject only to Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents, and Lender shall have received satisfactoryevidence thereof. 

**2.5.3 Related Documents.** Each additional document not specifically referenced herein, butrelating to the transactions contemplated herein, shall have been duly authorized, executed and delivered by all parties thereto and Lender shall have received and approved certified copies thereof. 

**2.5.4 Delivery of Organizational Documents.** On or before the Closing Date, Borrower shall deliver, or cause to be delivered,to Lender copies certified by an Officer’s Certificate, of all organizational documentation related to Borrower, Operating Lessee and Sponsor and certain Affiliates of the foregoing as have been requested by Lender and/or the formation,structure, existence, good standing and/or qualification to do business of Borrower, Operating Lessee and Sponsor and such Affiliates, as Lender may request in its sole discretion, including, without limitation, good standing certificates,qualifications to do business in the appropriate jurisdictions, resolutions authorizing the entering into of the Loan and incumbency certificates as may be requested by Lender. Each of the organizational documents of Borrower shall containprovisions having a substantive effect materially similar to that of the language set forth in **Exhibit C** or such other language as approved by Lender. Lender hereby approves the organizational documents of Borrower delivered toLender on the date hereof. 

**2.5.5 Opinions.** Lender shall have received: 

 
 (a)a Non-Consolidation Opinion substantially in compliance with the requirements set forth in **Exhibit E** or in such other form approved by the Lender(the “**Non-Consolidation Opinion**”); 
 
 (b)the Opinion of Counsel substantially in compliance with the requirements set forth in **Exhibit D** or in such other form approved by the Lender; and
 
 (c)from Counterparty the Counterparty Opinion substantially in compliance with the requirements set forth in **Exhibit F** or in such other form approved bythe Lender. 
**2.5.6 Budgets.** Borrower shall have delivered the Budget for the current Fiscal Year,which Budget shall be certified by an Officer’s Certificate. 

**2.5.7 Completion of Proceedings.** Allcorporate and other proceedings taken or to be taken in connection with the transactions contemplated by this Agreement and other Loan Documents and all documents incidental thereto shall be satisfactory in form and substance to Lender, and Lendershall have received all such counterpart originals or certified copies of such documents as Lender may reasonably request. 

 

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**2.5.8 Payments.**All payments, deposits or escrows, if any, required to bemade or established by Borrower under this Agreement, the Note and the other Loan Documents on or before the Closing Date shall have been paid. 

**2.5.9 Interest Rate Cap Agreement.** Lender shall have received the original Interest Rate Cap Agreement which shall be in form and substance satisfactory to Lender and an original counterpartof the Acknowledgment executed and delivered by the Counterparty. 

**2.5.10 Account Agreement.** Lender shall havereceived the original of the Account Agreement executed by each of Cash Management Bank, Operating Lessee, and Borrower. 

**2.5.11 Intentionally Deleted.**

**2.5.12 Leases and Rent Roll.** Lender shall have receivedcopies of all Leases, certified as requested by Lender. Lender shall have received a certified rent roll of the Property dated within thirty (30) days prior to the Closing Date. 

**2.5.13 Transaction Costs.** Borrower shall have paid or reimbursed Lender for all title insurance premiums, recording andfiling fees, costs of Environmental Reports, Physical Conditions Reports, appraisals and other reports, the reasonable fees and costs of Lender’s counsel and all other third party out-of-pocket expenses incurred in connection with theorigination of the Loan. 

**2.5.14 Material Adverse Effect.** No event or condition shall have occurred since thedate of Borrower’s most recent financial statements previously delivered to Lender which has or could reasonably be expected to have a Material Adverse Effect. The Operating Income and Operating Expenses of the Property and all other featuresof the transaction shall be as represented to Lender without material adverse change. Neither Borrower nor any of its constituent Persons shall be the subject of any bankruptcy, reorganization, or insolvency proceeding. 

**2.5.15 Tax Lot.** Lender shall have received evidence that the Property constitutes one (1) or more separate tax lots,which evidence shall be reasonably satisfactory in form and substance to Lender. 

**2.5.16 Physical ConditionsReport.** Lender shall have received a Physical Conditions Report (or re-certified Physical Conditions Report) with respect to the Property, which report shall be satisfactory in form and substance to Lender. 

**2.5.17 Appraisal.** Lender shall have received an appraisal of the Property, which shall be satisfactory in form and substanceto Lender. 

 

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**2.5.18 Operating Lease.** Lender shall have received the originals of theOperating Lease, executed by Operating Lessee and Borrower and the Subordination of Operating Lease, executed by Operating Lessee. 

**2.5.19 Management Agreement.** Lender shall have received a certified copy of the Management Agreement which shall be satisfactory in form and substance to Lender. 

**2.5.20 Financial Statements.** Lender shall have received certified copies of financial statements with respect to the Propertyfor the three most recent Fiscal Years, each in form and substance satisfactory to Lender. 

**2.5.21 FurtherDocuments.** Lender or its counsel shall have received such other and further approvals, opinions, documents and information as Lender or its counsel may have reasonably requested including the Loan Documents in form and substance satisfactoryto Lender and its counsel. 

**III. CASH MANAGEMENT**

**Section 3.1 Cash Management**. 

**3.1.1 Establishment of Accounts**. Borrower hereby confirms that, simultaneously with the execution of this Agreement, pursuant to the Account Agreement, Operating Lessee has established withCash Management Bank, in the name of Borrower for the benefit of Lender, as secured party, a collection amount (the “**Collection Account**”), which has been established as an interest-bearing deposit account, and a holdingaccount (the “**Holding Account**”), which has been established as a securities account. Both the Collection and the Holding Account and each sub-account of either such account and the funds deposited therein and the securitiesand other assets credited thereto shall serve as additional security for the Loan. Pursuant to the Account Agreement, Borrower shall irrevocably instruct and authorize Cash Management Bank to disregard any and all orders for withdrawal from theCollection Account or the Holding Account made by, or at the direction of, Borrower or Operating Lessee other than to transfer all amounts on deposit in the Collection Account on a daily basis to the Holding Account. Borrower agrees that, prior tothe payment in full of the Indebtedness, the terms and conditions of the Account Agreement shall not be amended or modified without the prior written consent of Lender (which consent Lender may grant or withhold in its sole discretion), and if aSecuritization has occurred, the delivery by Borrower of a Rating Agency Confirmation. In recognition of Lender’s security interest in the funds deposited into the Collection Account and the Holding Account, Borrower shall identify both theCollection Account and the Holding Account with the name of Lender, as secured party. The Collection Account shall be named as follows: “Intercontinental Chicago f/b/o Citigroup Global Markets Realty Corp., as secured party CollectionAccount,” account number 724140.1. The Holding Account shall be named as follows: “Intercontinental Chicago f/b/o Citigroup Global Markets Realty Corp., as secured party Holding Account,” account number 724140.2. Borrower confirmsthat it has established with Cash Management Bank the following sub-accounts of the Holding Account (each, a “**Sub-Account**” and, collectively, the “**Sub-Accounts**” and together with the Holding Accountand the Collection Account, the “**Collateral Accounts**”), which (i) may be ledger or book entry sub-accounts and need not be actual sub-accounts, (ii) shall each be linked to the Holding 

 

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Account, (iii) shall each be a “Securities Account” pursuant to Article 8 of the UCC and(iv) shall each be an Eligible Account to which certain funds shall be allocated and from which disbursements shall be made pursuant to the terms of this Agreement: 

(a) a sub-account for the retention of Account Collateral in respect of Impositions and Other Charges for the Property with the account number 724140.2 (the “**Tax Reserve Account**”);

(b) a sub-account for the retention of Account Collateral in respect of insurance premiums for the Property with the accountnumber 724140.2 (the “**Insurance Reserve Account**”); 

(c) a sub-account for the retention of AccountCollateral in respect of FF&E with the account number 724140.2 (the “**FF&E Reserve Account**”); and 

(d) a sub-account for the retention of Account Collateral in respect of current Debt Service on the Loan with the account number 724140.2 (the “**Current Debt Service Reserve Account**”). 

**3.1.2 Pledge of Account Collateral**. To secure the full and punctual payment and performance of the Obligations, Borrower andOperating Lessee hereby collaterally assigns, grants a security interest in and pledges to Lender, to the extent not prohibited by applicable law (and shall cause Operating Lessee to execute the Accommodation Security Documents with respectthereto), a first priority continuing security interest in and to the following property of Borrower and/or Operating Lessee, as applicable, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of thesame, collectively, the “**Account Collateral**”): 

(a) the Collateral Accounts and Manager Accounts andall cash, checks, drafts, securities entitlements, certificates, instruments and other property, including, without limitation, all deposits and/or wire transfers from time to time deposited or held in, credited to or made to Collateral Accounts;

(b) any and all amounts invested in Permitted Investments; 

(c) all interest, dividends, cash, instruments, securities entitlements and other property from time to time received, receivable orotherwise payable in respect of, or in exchange for, any or all of the foregoing or purchased with funds from the Collateral Accounts; and 

(d) to the extent not covered by clauses (a), (b) or (c) above, all proceeds (as defined under the UCC) of any or all of the foregoing. 

In addition to the rights and remedies herein set forth, Lender shall have all of the rights and remedies with respect to the AccountCollateral available to a secured party at law or in equity, including, without limitation, the rights of a secured party under the UCC, as if such rights and remedies were fully set forth herein. 

 

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This Agreement shall constitute a security agreement for purposes of the Uniform CommercialCode and other applicable law. 

**3.1.3 Maintenance of Collateral Accounts**. (a) Borrower agrees that theCollection Account is and shall be maintained (i) as a “deposit account” (as such term is defined in Section 9-102(a) of the UCC), (ii) in such a manner that Lender shall have control (within the meaning ofSection 9-104(a) of the UCC) over the Collection Account and (iii) such that neither the Borrower, Operating Lessee, nor Manager shall have any right of withdrawal from the Account and, except as provided herein, no Account Collateralshall be released to the Borrower, Operating Lessee, or Manager from the Collection Account. Without limiting the Borrower’s obligations under the immediately preceding sentence, Borrower shall only establish and maintain the Collection Accountwith a financial institution that has executed an agreement substantially in the form of the Account Agreement or in such other form acceptable to Lender in its sole discretion. 

(b) Borrower agrees that each of the Holding Account and the Sub-Accounts is and shall be maintained (i) as a “securitiesaccount” (as such term is defined in Section 8-501(a) of the UCC), (ii) in such a manner that Lender shall have control (within the meaning of Section 8-106(d)(2) of the UCC) over the Holding Account and any Sub-Account,(iii) such that neither Borrower, Operating Lessee, nor Manager shall have any right of withdrawal from the Holding Account or the Sub-Accounts and, except as provided herein, no Account Collateral shall be released to Borrower from the HoldingAccount or the Sub-Accounts, (iv) in such a manner that the Cash Management Bank shall agree to treat all property credited to the Holding Account or the Sub-Accounts as “financial assets” and (v) such that all securities orother property underlying any financial assets credited to the Accounts shall be registered in the name of Cash Management Bank, indorsed to Cash Management Bank or in blank or credited to another securities account maintained in the name of CashManagement Bank and in no case will any financial asset credited to any of the Collateral Accounts be registered in the name of Borrower, payable to the order of Borrower or specially indorsed to Borrower except to the extent the foregoing have beenspecially indorsed to Cash Management Bank or in blank. Without limiting Borrower’s obligations under the immediately preceding sentence, Borrower shall only establish and maintain the Holding Account with a financial institution that hasexecuted an agreement substantially in the form of the Account Agreement or in such other form acceptable to Lender in its sole discretion. 

(c) The Collateral Accounts shall be Eligible Accounts. The Collateral Accounts shall be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal ReserveSystem and of any other banking or governmental authority, as may now or hereafter be in effect. Income and interest accruing on the Collateral Accounts or any investments held in such accounts shall be periodically added to the principal amount ofsuch account and shall be held, disbursed and applied in accordance with the provisions of this Agreement and the Account Agreement. Borrower shall be the beneficial owner of the Collateral Accounts for federal income tax purposes and shall reportall income on the Collateral Accounts. 

**3.1.4 Deposits into Sub-Accounts**. On the date hereof, Borrower hasdeposited the following amounts into the Sub-Accounts: 

(i) $0.00 into the Tax Reserve Account; 

 

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(ii) $0.00 into the Insurance Reserve Account; 

(iii) $0.00 into the Current Debt Service Reserve Account; and 

(iv) $0.00 into the FF&E Reserve Account. 

**3.1.5 Monthly Funding of Sub-Accounts.** (a) Borrower hereby irrevocably authorizes Lender to transfer (and, pursuant to the Account Agreement shall irrevocably authorize Cash Management Bankto execute any corresponding instructions of Lender), and Lender shall transfer (or cause Cash Management Bank to transfer pursuant to disbursement instructions from Lender), from the Holding Account by 11:00 a.m. New York time on each Business Day,or as soon thereafter as sufficient funds are in the Holding Account to make the applicable transfers, funds in the following amounts and in the following order of priority: 

(i) during the continuance of an Event of Default and at any such time that Manager does not reserve for or otherwise set aside and payImpositions and Other Charges directly, funds in an amount equal to the Monthly Tax Reserve Amount and any other amounts required pursuant to Section 16.1 for the month in which the Payment Date immediately following the date of thetransfer from the Holding Account occurs and transfer the same to the Tax Reserve Account; 

(ii) during the continuance of anEvent of Default and at any time when the insurance required to be maintained pursuant to this Agreement is provided under a blanket policy in accordance with Article VI hereof and the premiums in respect of such blanket policy are notpaid or caused to be paid before such premiums become due and payable or at any time that Manager does not pay, reserve for or otherwise set aside and pay, premiums with respect to the Insurance Requirements, funds in an amount equal to the MonthlyInsurance Reserve Amount for the month in which the Payment Date immediately following the date of the transfer from the Holding Account occurs and transfer the same to the Insurance Reserve Account, or following an Event of Default or an InsuranceReserve Trigger, funds sufficient (calculated on a monthly basis from the Insurance Reserve Trigger until the month in which the premium is due) to permit Lender to pay insurance premiums for the insurance required to be maintained pursuant to theterms of this Agreement and the Security Instrument on the respective due dates therefor (up to a maximum amount equal to the aggregate annual insurance premium required hereunder), and Lender shall so pay such funds to the insurance company havingthe right to receive such funds; 

(iii) funds in an amount equal to the amount of Debt Service due on the Payment Date forthe month in which the Payment Date immediately following the date of the transfer from the Holding Account occurs and transfer the same to the Current Debt Service Reserve Account; 

(iv) at any such time that Manager does not reserve or otherwise set aside for FF&E in accordance with the terms of the ManagementAgreement, funds in an amount equal to the Monthly FF&E Reserve Amount for the month in which the Payment Date immediately following the date of the transfer from the Holding Account occurs and transfer the same to the FF&E Reserve Account;and 

 

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(v) provided no Event of Default shall have occurred and is then continuing and subject tothe provisions of Section 3.1.5(b), funds in an amount equal to the balance (if any) remaining or deposited in the Holding Account after the foregoing deposits (such remainder being hereinafter referred to as “**Excess CashFlow**”) and transfer the same to the Borrower’s Account (or a third party account as directed by Borrower), free of any Lien or continuing security interest. 

(b) Notwithstanding anything to the contrary contained herein or in the Security Instrument, but subject to Section 7.3, to theextent that Borrower shall fail to pay any mortgage recording tax, costs, expenses or other amounts pursuant to Section 19.12 of this Agreement within the time period set forth therein, Lender shall have the right, at any time, uponfive (5) Business Days’ notice to Borrower, to withdraw from the Holding Account, an amount equal to such unpaid taxes, costs, expenses and/or other amounts and pay such amounts to the Person(s) entitled thereto. 

**3.1.6 Payments from Sub-Accounts**. Borrower irrevocably authorizes Lender to make and, provided no Event of Default shall haveoccurred and be continuing, Lender hereby agrees to make, the following payments from the Sub-Accounts to the extent of the monies on deposit therefor: 

(i) if notified (timely) by Borrower or otherwise determined by Lender in its reasonable discretion that Manager will not pay Impositions or Other Charges, funds from the Tax Reserve Account to Lendersufficient to permit Lender to pay (or otherwise to Borrower to reimburse Borrower for) (A) Impositions and (B) Other Charges, on the respective due dates therefor, and Lender shall so pay such funds to the Governmental Authority havingthe right to receive such funds (or shall reimburse Borrower or Operating Lessee upon confirmation of payment); 

(ii) at anytime when the insurance required to be maintained pursuant to this Agreement is provided under a blanket policy in accordance with Article VI hereof and the premiums in respect of such blanket policy are not paid or caused to be paidbefore such premiums become due and payable or at any time that Manager does not pay, reserve for or otherwise set aside and pay, premiums with respect to the Insurance Requirements and otherwise following an Insurance Reserve Trigger, funds fromthe Insurance Reserve Account to Lender sufficient to permit Lender to pay insurance premiums for the insurance required to be maintained pursuant to the terms of this Agreement and the Security Instrument, on the respective due dates therefor, andLender shall so pay such funds to the insurance company having the right to receive such funds; 

(iii) funds from the CurrentDebt Service Reserve Account to Lender sufficient to pay Debt Service on each Payment Date, and Lender, on each Payment Date, shall apply such funds to the payment of the Debt Service payable on such Payment Date; and 

 

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(iv) if notified (timely) by Borrower or otherwise determined by Lender in its reasonablediscretion that Manager will not reserve for FF&E as required under the Management Agreement, and provided Borrower shall have complied with the procedures set forth in Section 16.6, funds from the FF&E Reserve Account to theBorrower’s Account to pay for FF&E. 

If and to the extent any Sponsor or any Close Affiliate (other than Borrower orOperating Lessee) makes a payment of any Imposition, any insurance premium under a blanket policy or capital expenditure or overhead charge which qualifies as an Operating Expense, with respect to the Property and such expense is provided for in theBudget, provided no Event of Default has occurred and is continuing, such Sponsor or Close Affiliate will be entitled to receive reimbursement from the Manager, Lender, or the applicable Sub-Account established under hereunder or under theManagement Agreement and such payment shall not be required to be re-deposited into the Collection Account. 

**3.1.7 CashManagement Bank**. (a) Lender shall have the right to replace the Cash Management Bank with a financial institution reasonably satisfactory to Borrower in the event that (i) the Cash Management Bank fails, in any material respect, tocomply with the Account Agreement, (ii) the Cash Management Bank named herein is no longer the Cash Management Bank or (iii) the Cash Management Bank is no longer an Approved Bank. Upon the occurrence and during the continuance of an Eventof Default, Lender shall have the right at Borrower’s sole cost and expense to replace Cash Management Bank at any time, without notice to Borrower. Borrower shall cooperate with Lender in connection with the appointment of any replacement CashManagement Bank and the execution by the Cash Management Bank and the Borrower of an Account Agreement and delivery of same to Lender. 

(b) So long as no Event of Default shall have occurred and be continuing, Borrower shall have the right at its sole cost and expense to replace the Cash Management Bank with a financial institution that is an Approved Bank, provided thatsuch financial institution and Borrower shall execute and deliver to Lender an Account Agreement substantially similar to the Account Agreement executed as of the Closing Date. 

**3.1.8 Borrower’s Account Representations, Warranties and Covenants**. Borrower represents, warrants and covenants that(i) as of the date hereof, Borrower has caused Operating Lessee to direct all Tenants under the Leases to mail all checks and wire all funds with respect to any payments due under such Leases directly to Manager, (ii) Borrower shall causeManager and Operating Lessee to deposit all amounts payable to Borrower or Operating Lessee pursuant to the Management Agreement directly into the Collection Account, (iii) Borrower and Operating Lessee shall pay or cause to be paid all Rents,Cash and Cash Equivalents or other items of Operating Income not otherwise collected by Manager within two Business Days after receipt thereof by Borrower, Operating Lessee or its Affiliates directly into the Collection Account and, until sodeposited, any such amounts held by Borrower or Operating Lessee, shall be deemed to be Account Collateral and shall be held in trust by it for the benefit, and as the property, of Lender and shall not be commingled with any other funds or propertyof Borrower or Operating Lessee, (iv) other than the Manager Accounts, there are no accounts other than the Collateral Accounts maintained by Borrower or Operating Lessee with respect to the Property or the collection of Rents and credit cardcompany receivables with respect to the 

 

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Property and (v) so long as the Loan shall be outstanding, neither Borrower, Operating Lessee, nor anyother Person shall open any other operating accounts with respect to the Property or the collection of Rents or credit card company receivables with respect to the Property, except for the Collateral Accounts and the Manager Accounts;provided that, Borrower and Manager shall not be prohibited from utilizing one or more separate accounts for the disbursement or retention of funds that have been transferred to the Borrower’s Account pursuant toSection 3.1.5. 

**3.1.9 Account Collateral and Remedies**. (a) Upon the occurrence and during thecontinuance of an Event of Default, without additional notice from Lender to Borrower, (i) Lender may, in addition to and not in limitation of Lender’s other rights, make any and all withdrawals from, and transfers between and among, theCollateral Accounts as Lender shall determine in its sole and absolute discretion to pay any Obligations; (ii) all Excess Cash Flow shall be retained in the Holding Account or applicable Sub-Accounts and (iii) Lender may liquidate andtransfer any amounts then invested in Permitted Investments to the Collateral Accounts to which they relate or reinvest such amounts in other Permitted Investments as Lender may reasonably determine is necessary to perfect or protect any securityinterest granted or purported to be granted hereby or to enable Lender to exercise and enforce Lender’s rights and remedies hereunder with respect to any Account Collateral or to preserve the value of the Account Collateral. 

(b) Upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably constitutes and appoints Lender asBorrower’s true and lawful attorney-in-fact, with full power of substitution, to execute, acknowledge and deliver any instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower with respect to theAccount Collateral, and do in the name, place and stead of Borrower, all such acts, things and deeds for and on behalf of and in the name of Borrower, which Borrower could or might do or which Lender may deem necessary or desirable to more fullyvest in Lender the rights and remedies provided for herein and to accomplish the purposes of this Agreement. The foregoing powers of attorney are irrevocable and coupled with an interest. Upon the occurrence and during the continuance of an Event ofDefault, Lender may perform or cause performance of any such agreement, and any reasonable expenses of Lender incurred in connection therewith shall be paid by Borrower as provided in Section 5.1.16. 

(c) Borrower hereby expressly waives, to the fullest extent permitted by law, presentment, demand, protest or any notice of any kind (exceptas expressly required under the Loan Documents) in connection with this Agreement or the Account Collateral. Borrower acknowledges and agrees that ten (10) Business Days’ prior written notice of the time and place of any public sale of theAccount Collateral or any other intended disposition thereof shall be reasonable and sufficient notice to Borrower within the meaning of the UCC. 

**3.1.10 Transfers and Other Liens**. Borrower agrees that it will not (i) sell or otherwise dispose of any of the Account Collateral except as may be expressly permitted under the LoanDocuments, or (ii) create or permit to exist any Lien upon or with respect to all or any of the Account Collateral, except for the Lien granted to Lender under this Agreement. 

 

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**3.1.11 Reasonable Care**. Beyond the exercise of reasonable care in the custodythereof, Lender shall have no duty as to any Account Collateral in its possession or control as agent therefor or bailee thereof or any income thereon or the preservation of rights against any person or otherwise with respect thereto. Lender shallbe deemed to have exercised reasonable care in the custody and preservation of the Account Collateral in its possession if the Account Collateral is accorded treatment substantially equal to that which Lender accords its own property, it beingunderstood that Lender shall not be liable or responsible for any loss or damage to any of the Account Collateral, or for any diminution in value thereof, by reason of the act or omission of Lender, its Affiliates, agents, employees or bailees,except to the extent that such loss or damage results from Lender’s gross negligence or willful misconduct. In no event shall Lender be liable either directly or indirectly for losses or delays resulting from any event which may be the basis ofan Excusable Delay, computer malfunctions, interruption of communication facilities, labor difficulties or other causes beyond Lender’s reasonable control or for indirect, special or consequential damages except to the extent of Lender’sgross negligence or willful misconduct. Notwithstanding the foregoing, Borrower acknowledges and agrees that (i) Lender does not have custody of the Account Collateral, (ii) Cash Management Bank has custody of the Account Collateral,(iii) the initial Cash Management Bank was chosen by Borrower and (iv) Lender has no obligation or duty to supervise Cash Management Bank or to see to the safe custody of the Account Collateral. 

**3.1.12 Lender’s Liability**. (a) Lender shall be responsible for the performance only of such duties with respect to theAccount Collateral as are specifically set forth in this Section 3.1 or elsewhere in the Loan Documents, and no other duty shall be implied from any provision hereof. Lender shall not be under any obligation or duty to perform any actwith respect to the Account Collateral which would cause it to incur any expense or liability or to institute or defend any suit in respect hereof, or to advance any of its own monies. Borrower shall indemnify and hold Lender, its employees andofficers harmless from and against any loss, cost or damage (including, without limitation, reasonable attorneys’ fees and disbursements) incurred by Lender in connection with the transactions contemplated hereby with respect to the AccountCollateral (excluding losses on Permitted Investments) except as such may be caused by the gross negligence or willful misconduct of Lender, its employees, officers or agents. 

(b) Lender shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or otherpaper, document or signature believed by it in good faith to be genuine, and, in so acting, it may be assumed that any person purporting to give any of the foregoing in connection with the provisions hereof has been duly authorized to do so. Lendermay consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder and in good faith in accordance therewith. 

**3.1.13 Continuing Security Interest**. This Agreement shall create a continuing security interest in the Account Collateral andshall remain in full force and effect until payment in full of the Indebtedness; provided, however, such security interest shall automatically terminate with respect to funds which were duly deposited into Borrower’s Account inaccordance with the terms hereof. Upon payment in full of the Indebtedness, this security interest shall automatically terminate without further notice from any party and Borrower shall be entitled to the return, upon its request, of such of theAccount Collateral as 

 

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shall not have been sold or otherwise applied pursuant to the terms hereof and Lender shall execute suchinstruments and documents as may be reasonably requested by Borrower to evidence such termination and the release of the Account Collateral. 

**IV. REPRESENTATIONS AND WARRANTIES**

**Section 4.1 BorrowerRepresentations**. Borrower represents and warrants as of the Closing Date that: 

**4.1.1 Organization**. Eachof Borrower and Operating Lessee is a limited liability company, and have been duly organized and is validly existing and in good standing pursuant to the laws of the State of Delaware with requisite power and authority to own its properties and totransact the businesses in which it is now engaged. Each Sponsor entity is a limited partnership, and each such entity has been duly organized and is validly existing and in good standing pursuant to the laws of the relevant State where formed withrequisite power and authority to own its properties and to transact the businesses in which it is now engaged. Each of Borrower and Operating Lessee has duly qualified to do business and is in good standing in each jurisdiction where it is requiredto be so qualified in connection with its properties, businesses and operations. Collectively, Borrower and Operating Lessee possesses all rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle it to own itsproperties and to transact the businesses in which each is now engaged, and the sole business of Borrower is the ownership of the Property. The organizational structure of Borrower upon the closing is accurately depicted by the schematic diagramattached hereto as **Exhibit H-1**. Borrower shall not itself, and shall not permit Operating Lessee to, change its name, identity, corporate structure or jurisdiction of organization unless it shall have given Lender seven(7) days prior written notice of any such change and shall have taken all steps reasonably requested by Lender to grant, perfect, protect and/or preserve the security interest granted hereunder to Lender. 

**4.1.2 Proceedings**. Each of Borrower, Operating Lessee, and Sponsor, has full power to and has taken all necessary action toauthorize the execution, delivery and performance of this Agreement and the other Loan Documents. This Agreement and the other Loan Documents have been duly executed and delivered by, or on behalf of, each of Borrower, Operating Lessee, and Sponsor,as applicable, and constitute legal, valid and binding obligations of Borrower, Operating Lessee, and Sponsor, as applicable, enforceable against Borrower, Operating Lessee, and Sponsor, 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 orat law). 

**4.1.3 No Conflicts**. The execution, delivery and performance of this Agreement and the other LoanDocuments by Borrower, Operating Lessee, and Sponsor, as applicable, will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge orencumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower, Operating Lessee, and Sponsor, pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, partnership agreement or otheragreement or instrument to which 

 

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Borrower, Operating Lessee, and Sponsor, is a party or by which any of Borrower’s, OperatingLessee’s, and Sponsor’s, property or assets is subject (unless consents from all applicable parties thereto have been obtained), nor will such action result in any violation of the provisions of any statute or any order, rule or regulationof any Governmental Authority, and any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Borrower, Operating Lessee, and Sponsor, ofthis Agreement or any other Loan Documents has been obtained and is in full force and effect. 

**4.1.4Litigation**. There are no lawsuits, administrative proceedings, arbitration proceedings, or other such legal proceedings that have been filed and served upon Borrower (or with respect to which Borrower has otherwise received proper notice)or, to the Best of Borrower’s Knowledge, otherwise pending or threatened against or affecting Borrower, Operating Lessee, or the Property whose outcome, if determined against Borrower, Operating Lessee, or the Property, would have a MaterialAdverse Effect. To the Best of Borrower’s Knowledge, **Schedule I** includes each pending action against Borrower, Operating Lessee, or otherwise affecting the Property that involves a claim or claims for either (a) monetarydamages exceeding $250,000, or (b) injunctive relief or other equitable remedy that could have a Material Adverse Effect, excluding: (i) actions for monetary damages only that have been tendered to, and accepted without reservation ofrights by, the liability insurance carrier for the Property, (ii) worker’s compensation claims, and (iii) any proceedings by employees working at the Property where the amount claimed in such proceeding is less than $250,000; to theBest of Borrower’s Knowledge, the aggregate amount of such claims described in subclause (iii) of this sentence is less than $1,000,000. 

**4.1.5 Agreements**. Neither Borrower nor Operating Lessee is a party to any agreement or instrument or subject to any restriction which is reasonably likely to have a Material Adverse Effect.Neither Borrower nor Operating Lessee is in default in any 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 the Property is bound, which default is reasonably likely to have a Material Adverse Effect. Neither Borrower nor Operating Lessee has any material financial obligation (contingent or otherwise) 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 Property is otherwise bound, other than (a) obligations incurred in the ordinarycourse of the operation of the Property, including membership programs disclosed in writing to Lender on or prior to the date hereof, and (b) obligations under the Loan Documents. 

**4.1.6 Title**. Borrower has good, marketable and insurable fee simple title to the Land and the Improvements, free and clear ofall Liens whatsoever except the Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. Borrower or Operating Lessee, as applicable, has good and marketable title to theremainder of the Property, free and clear of all Liens whatsoever except the Permitted Encumbrances. The Security Instrument, when properly recorded in the appropriate records, and Accommodation Security Documents, together with any UniformCommercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first mortgage lien on the Land and the Improvements, subject only to 

 

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Permitted Encumbrances and (b) perfected security interests in and to, and perfected collateralassignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances. Except as may be indicated in and insured over by the Title Policy, to the Bestof Borrower’s Knowledge, there are no claims for payment for work, labor or materials affecting the Property which are or may become a lien prior to, or of equal priority with, the Liens created by the Loan Documents. Borrower represents andwarrants that none of the Permitted Encumbrances will have a Material Adverse Effect. Borrower shall preserve its right, title and interest in and to the Property for so long as the Note remains outstanding and will warrant and defend same and thevalidity and priority of the Lien hereof from and against any and all claims whatsoever other than the Permitted Encumbrances. 

**4.1.7 No Bankruptcy Filing**. None of Borrower, Operating Lessee, or Sponsor, is contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of all or a majorportion of such entity’s assets or property, and Borrower has no knowledge of any Person contemplating the filing of any such petition against Borrower or against Operating Lessee or any Sponsor. 

**4.1.8 Full and Accurate Disclosure**. To the Best of Borrower’s Knowledge, no statement of fact made by Borrower in thisAgreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. There is no fact presently known toBorrower which has not been disclosed which has a Material Adverse Effect, or to the Best of Borrower’s Knowledge could reasonably be expected to have a Material Adverse Effect. 

**4.1.9 All Property**. The Property constitutes all of the real property, personal property, equipment and fixtures currently(i) owned or leased by Borrower or Operating Lessee or (ii) used in the operation of the business located on the Property, other than items owned by Manager or any Tenants (excluding items owned by Operating Lessee). 

**4.1.10 ERISA**. (A) Borrower does not maintain or contribute to and is not required to contribute to, an “employee benefitplan” as defined by Section 3(3) of ERISA, which is subject to Title IV of ERISA (other than a “multiemployer plan” as defined by Section 3(37) of ERISA), and Borrower (i) has no knowledge of any material liabilitywhich has been incurred or is expected to be incurred by Borrower which is reasonably likely to result in a Material Adverse Effect and is or remains unsatisfied for any taxes or penalties or unfunded contributions with respect to any “employeebenefit plan” or any “plan,” within the meaning of Section 4975(e)(1) of the Internal Revenue Code or any other benefit plan (other than a “multiemployer plan”) maintained, contributed to, or required to be contributedto by Borrower or by any entity that is under common control with Borrower within the meaning Section 4001(a)(14) of ERISA (each, an “**ERISA Affiliate**”) (each, a “**Plan**”) or any plan that would be aPlan but for the fact that it is a multiemployer plan within the meaning of ERISA Section 3(37); and (ii) has made and shall continue to make when due all required contributions to all such Plans (other than Plans relating to ERISAAffiliates), if any, where the failure to so contribute is reasonably likely to result in a Material Adverse Effect. Each such Plan (other than Plans relating to ERISA Affiliates), if any, has been and will be administered in material 

 

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compliance with its terms and the applicable provisions of ERISA, the Internal Revenue Code, and any otherapplicable federal or state law; and no action shall be taken or fail to be taken that would result in the disqualification or loss of tax-exempt status of any such Plan intended to be qualified and/or tax exempt; and 

(a) With respect to any “multiemployer plan,” (i) Borrower has not, since September 26, 1980, made or suffered a“complete withdrawal” or a “partial withdrawal,” as such terms are respectively defined in Sections 4203 and 4205 of ERISA, (ii) Borrower has made and shall continue to make when due all required contributions to allsuch “multiemployer plans” and (iii) no ERISA Affiliate has, since September 26, 1980, made or suffered a “complete withdrawal” or a “partial withdrawal,” as such terms are respectively defined inSections 4203 and 4205 of ERISA which withdrawal is reasonably expected to have a Material Adverse Effect. 

(b) Borroweris not an employee benefit plan, as defined in Section 3(3) of ERISA, whether or not subject to Title I of ERISA, none of the assets of Borrower constitutes or will constitute plan assets of one or more such plans within the meaning of 29C.F.R. Section 2510.3-101 and transactions by or with Borrower is not subject to similar laws regulating investment of, and fiduciary obligations with respect to, plans similar to the provisions of Section 406 of ERISA or Section 4975of the Code currently in effect (“**Similar Laws**”), which prohibit or otherwise restrict the transactions contemplated by this Agreement. 

**4.1.11 Compliance**. Borrower and the Property and the use thereof comply in all material respects with all applicable Legal Requirements, including, without limitation, building and zoningordinances and codes except where the failure to so comply is not reasonably expected to result in a Material Adverse Effect. To the Best of Borrower’s Knowledge, neither Borrower nor Operating Lessee is in default or in violation of any order,writ, injunction, decree or demand of any Governmental Authority. To the Best of Borrower’s Knowledge, there has not been committed by Borrower or Operating Lessee any act or omission affording the federal government or any other GovernmentalAuthority the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. 

**4.1.12 Financial Information**. To the Best of Borrower’s Knowledge, all financial data including, without limitation, thestatements of cash flow and income and operating expense, that have been delivered by or on behalf of Borrower to Lender in respect of the Property (i) are true, complete and correct in all material respects, (ii) fairly represent thefinancial condition of the Property as of the date of such reports, and (iii) to the extent prepared or audited by an independent certified public accounting firm, have been prepared in accordance with GAAP throughout the periods covered,except as disclosed therein. Neither Borrower nor Operating Lessee has any material contingent liabilities, liabilities for delinquent taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorablecommitments that are known to Borrower and could reasonably be expected to have a Material Adverse Effect, except as referred to or reflected in said financial statements and operating statements. Since the date of such financial statements, therehas been no material adverse change in the financial condition, operations or business of Borrower or Operating Lessee from that set forth in said financial statements. 

 

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**4.1.13 Condemnation**. No Condemnation has been commenced or, to the Best ofBorrower’s Knowledge, is contemplated with respect to all or any portion of the Property. 

**4.1.14 Federal ReserveRegulations**. None of the proceeds of the Loan will be used for the purpose of purchasing or carrying any “margin stock” as defined in Regulation U, Regulation X or Regulation T or for the purpose of reducing orretiring any Indebtedness which was originally incurred to purchase or carry “margin stock” or for any other purpose which might constitute this transaction a “purpose credit” within the meaning of Regulation U orRegulation X. As of the Closing Date, Borrower does not own any “margin stock.” 

**4.1.15 Utilities andPublic Access**. The Property has rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service the Property for its intended uses. To the Best of Borrower’s Knowledge, allutilities necessary to the existing use of the Property are located either in the public right-of-way abutting the Property (which are connected so as to serve the Property without passing over other property) or in recorded easements serving theProperty. All roads necessary for the use of the Property for its current purposes have been completed and, if necessary, dedicated to public use. 

**4.1.16 Not a Foreign Person**. Borrower is not a foreign person within the meaning of § 1445(f)(3) of the Code. 

**4.1.17 Separate Lots**. The Property is comprised of one (1) or more contiguous parcels which constitute a separate taxlot or lots and does not constitute or include a portion of any other tax lot not a part of the Property. 

**4.1.18Assessments**. To the Best of Borrower’s Knowledge, there are no pending or proposed special or other assessments for public improvements or otherwise affecting the Property, nor are there any contemplated improvements to the Propertythat may result in such special or other assessments. 

**4.1.19 Enforceability**. The Loan Documents are notsubject to any existing right of rescission, set-off, counterclaim or defense by Borrower, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the LoanDocuments unenforceable (subject to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject as to enforceability, to general principles of equity (regardless of whether enforcement is sought in aproceeding in equity or at law)), and Borrower has not asserted any right of rescission, set-off, counterclaim or defense with respect thereto. 

**4.1.20 No Prior Assignment**. There are no prior sales, transfers or assignments of the Leases or any portion of the Rents due and payable or to become due and payable which are presentlyoutstanding following the funding of the Loan, other than those being terminated or assigned to Lender concurrently herewith. 

**4.1.21 Insurance**. Borrower has obtained and has delivered to Lender certified copies or certificates of all insurance policies required under this Agreement, reflecting 

 

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the insurance coverages, amounts and other requirements set forth in this Agreement. Borrower has not, andto the Best of Borrower’s Knowledge no Person has, done by act or omission anything which would impair the coverage of any such policy. 

**4.1.22 Use of Property**. The Property is used exclusively for hotel purposes and other appurtenant and related uses. 

**4.1.23 Certificate of Occupancy; Licenses**. To the Best of Borrower’s Knowledge, all material certifications, permits,licenses (including, without limitation, a license to serve alcohol on the Property) and approvals, including without limitation, certificates of completion and occupancy permits required of Borrower for the legal use, occupancy and operation of theProperty for hotel purposes (collectively, the “Licenses”), have been obtained and are in full force and effect. Borrower shall keep and maintain all Licenses necessary for the operation of the Property for hotel purposes.The use being made of the Property is in conformity with the certificate of occupancy issued for the Property. 

**4.1.24Flood Zone**. Except as may be shown on the Survey with respect to portions of the Improvements other than buildings and enclosed structures, none of the Improvements on the Property are located in an area as identified by the FederalEmergency Management Agency as an area having special flood hazards. 

**4.1.25 Physical Condition**. To the Best ofBorrower’s Knowledge and except as expressly disclosed in the Physical Conditions Report, the Property, including, without limitation, all buildings, Improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in all material respects; to the Bestof Borrower’s Knowledge and except as disclosed in the Physical Conditions Report, there exists no structural or other material defects or damages in or to the Property, whether latent or otherwise, and Borrower has not received any writtennotice from any insurance company or bonding company of any defects or inadequacies in the Property, or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereonor of any termination or threatened termination of any policy of insurance or bond. 

**4.1.26 Boundaries**. To theBest of Borrower’s Knowledge and except as disclosed on the Survey, all of the Improvements lie wholly within the boundaries and building restriction lines of the Real Property, and no improvements on adjoining properties encroach upon the RealProperty, and no easements or other encumbrances upon the Real Property encroach upon any of the Improvements, so as to have a Material Adverse Effect on the value or marketability of the Real Property except those which are insured against by theTitle Policy. 

**4.1.27 Leases**. The Property is not subject to any Leases other than the Leases described inthe certified rent roll delivered in connection with the origination of the Loan. Such certified rent roll is true, complete and correct in all material respects as of the date set forth therein. No Person has any possessory interest in the Propertyor right to occupy the same (other than typical short-term occupancy rights of hotel guests which are not the subject of 

 

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a written agreement) except under and pursuant to the provisions of the Leases. The Gift Shop Lease willterminate on October 1, 2006. All other current Leases are in full force and effect and to the Best of Borrower’s Knowledge, there are no material defaults thereunder by either party (other than as expressly disclosed on the certified rentroll delivered to Lender or the Tenant estoppel certificates delivered to Lender in connection with the closing of the Loan) and there are no conditions that, with the passage of time or the giving of notice, or both, would constitute materialdefaults thereunder. No Rent has been paid more than one (1) month in advance of its due date, except as disclosed in the Tenant estoppel certificates delivered to Lender in connection with the closing of the Loan. There has been no prior sale,transfer or assignment, hypothecation or pledge by Borrower of any Lease or of the Rents received therein, which will be outstanding following the funding of the Loan, other than those being assigned to Lender concurrently herewith. No Tenant underany Lease has a right or option pursuant to such Lease or otherwise to purchase all or any part of the property of which the leased premises are a part. 

**4.1.28 Filing and Recording Taxes**. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable LegalRequirements currently in effect in connection with the transfer of the Property to Borrower have been paid and the granting and recording of the Security Instrument and the UCC financing statements required to be filed in connection with the Loan.All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration,perfection or enforcement of any of the Loan Documents, including, without limitation, the Security Instrument, have been paid, and, under current Legal Requirements, the Security Instrument is enforceable against Borrower in accordance with itsterms by Lender (or any subsequent holder thereof) subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject as to enforceability, to general principles of equity (regardless of whetherenforcement is sought in a proceeding in equity or at law. 

**4.1.29 Single Purpose Entity/Separateness**. (a)Borrower hereby represents, warrants and covenants that each of Operating Lessee and Borrower is and always has been, since the date of its respective formation, a Single Purpose Entity and has not, since the date of its respective formation,conducted any business and owned any property whatsoever, except as specifically described in the Non-Consolidation Opinion. 

All of the assumptions made in the Non-Consolidation Opinion, including, but not limited to, any exhibits attached thereto and any certificates delivered by Borrower in connection with the issuance of the Non-Consolidation Opinion, are trueand correct in all respects and any assumptions made in any subsequent non-consolidation opinion delivered in connection with the Loan Documents (an “**Additional Non-Consolidation Opinion**”), including, but not limited to, anyexhibits attached thereto, are true and correct in all material respects. Borrower has complied with all of the assumptions made with respect to it in the Non-Consolidation Opinion. To the Best of Borrower’s Knowledge, each entity other thanBorrower with respect to which an assumption shall be made in any Additional Non-Consolidation Opinion will have complied and will comply with all of the assumptions made with respect to it in any Additional Non-Consolidation Opinion. 

 

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**4.1.30 Management Agreement**. The Management Agreement is in full force andeffect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder. The Manager is not an Affiliate of Borrower. 

**4.1.31 Illegal Activity**. No portion of the Property has been or will be purchased with proceeds of any illegal activity.

**4.1.32 Intentionally Deleted**. 

**4.1.33 Tax Filings**. Borrower has filed (or has obtained effective extensions for filing) all federal, state and local tax returns required to be filed and has paid or made adequate provisionfor the payment of all federal, state and local taxes, charges and assessments payable by Borrower. 

**4.1.34Solvency/Fraudulent Conveyance**. Borrower (a) has not entered into the transaction contemplated by this Agreement or any Loan Document with the actual intent to hinder, delay, or defraud any creditor and (b) has receivedreasonably equivalent value in exchange for its obligations under the Loan Documents. After giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan, exceedBorrower’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, begreater than Borrower’s probable liabilities, including the maximum amount of its contingent liabilities on its Debts as such Debts become absolute and matured. Borrower’s assets do not and, immediately following the making of the Loanwill not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur Debt and liabilities (including contingent liabilities andother 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).

**4.1.35 Investment Company Act**. Borrower is not (a) an investment company or a company Controlled by aninvestment company, within the meaning of the Investment Company Act of 1940, as amended, (b) a holding company or a subsidiary company of a holding company or an affiliate of either a holding company or a subsidiary company within the mean ofthe Public Utility Holding Company Act of 1935, as amended or (c) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money. 

**4.1.36 Interest Rate Cap Agreement**. The Interest Rate Cap Agreement is in full force and effect and enforceable againstBorrower in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws generally affecting the enforcement of creditors’ rights and subject as to enforceability to general principles of equity (regardless of whetherenforcement is sought in a proceeding in equity or at law). 

 

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**4.1.37 Labor**. Except as described on **Schedule I**, no workstoppage, labor strike, slowdown or lockout is pending or threatened by employees and other laborers at the Property. Except as described on **Schedule I**, neither Borrower, Manager nor Operating Lessee (i) is involved in or, tothe Best of Borrower’s Knowledge, threatened with any material labor dispute, material grievance or litigation relating to labor matters involving any employees and other laborers at the Property, including, without limitation, violation of anyfederal, state or local labor, safety or employment laws (domestic or foreign) and/or charges of unfair labor practices or discrimination complaints, (ii) to the Best of Borrower’s Knowledge, has engaged with respect to the Property, inany unfair labor practices within the meaning of the National Labor Relations Act or the Railway Labor Act, or (iii) is a party to, or bound by, any existing collective bargaining agreement or union contract with respect to employees and otherlaborers at the Property. 

**4.1.38 Brokers**. Neither Borrower nor, to the Best of Borrower’s Knowledge,Lender has dealt with any broker or finder with respect to the loan transactions contemplated by the Loan Documents and neither party has done any acts, had any negotiations or conversations, or made any agreements or promises which will in any waycreate or give rise to any obligation or liability for the payment by either party of any brokerage fee, charge, commission or other compensation to any Person with respect to the transactions contemplated by the Loan Documents. Borrower covenantsand agrees that it shall pay as and when due any and all brokerage fees, charges, commissions or other compensation or reimbursement due to any broker of Borrower with respect to the transactions contemplated by the Loan Documents. Borrower andLender shall each indemnify and hold harmless the other from and against any loss, liability, cost or expense, including any judgments, attorneys’ fees, or costs of appeal, incurred by the other party and arising out of or relating to any claimfor brokerage commissions or finder’s fees alleged to be due as a result of the indemnifying party’s agreements or actions. The provisions of this Section 4.1.38 shall survive the expiration and termination of this Agreementand the payment of the Indebtedness. 

**4.1.39 No Other Debt**. Borrower has not borrowed or received debtfinancing that has not heretofore or contemporaneously herewith been repaid in full, other than the Permitted Debt. 

**4.1.40 Taxpayer Identification Number**. Borrower’s Federal taxpayer identification number is 20-2520272. 

**4.1.41 Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws**. (i) None of Borrower or any Person who owns any equity interest in or Controls Borrower or, to the Best of Borrower’s Knowledge, Sponsoror Ultimate Equity Owners, currently is identified on the OFAC List or otherwise qualifies as a Prohibited Person, and Borrower has implemented procedures to ensure that no Person who now or hereafter owns any equity interest in Borrower, UltimateEquity Owners or Sponsor is a Prohibited Person or Controlled by a Prohibited Person, and (ii) none of Borrower, Ultimate Equity Owners or Sponsor is in violation of any Legal Requirements relating to anti-money laundering or anti-terrorism,including, without limitation, Legal Requirements related to transacting business with Prohibited Persons or the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of2001, U.S. Public Law 107-56, and the related regulations issued thereunder, including temporary regulations, all as amended from time to time. 

 

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**4.1.42 Knowledge Qualifications**. Borrower represents that Ryan Bowie and CoryWarning are in a position to have meaningful knowledge with respect to the matters set forth in the Loan Documents which have been qualified to the knowledge of such Persons. 

**4.1.43 Leases**. Borrower represents that it has heretofore delivered to Lender true and complete copies of all Leases and anyand all amendments or modifications thereof. 

**4.1.44 FF&E**. Manager is reserving for FF&E on a monthlybasis not less than an amount equal to four percent (4%) of adjusted gross revenues with respect to the Property; such reserves are maintained in the Manager FF&E Reserve Account (subject to disbursements therefrom as permitted by theManagement Agreement). 

**4.1.45 Survival of Representations**. Borrower agrees that all of the representations andwarranties of Borrower set forth in Section 4.1 and elsewhere in this Agreement and in the other Loan Documents shall be deemed given and made as of the date of the funding of the Loan and survive for so long as any amount remains owingto Lender under this Agreement or any of the other Loan Documents by Borrower or Sponsor unless a longer survival period is expressly stated in a Loan Document with respect to a specific representation or warranty, in which case, for such longerperiod. All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made byLender or on its behalf. 

**V. BORROWER COVENANTS**

**Section 5.1 Affirmative Covenants**. From the Closing Date and until payment and performance in full of all obligations ofBorrower under the Loan Documents or the earlier release of the Lien of this Agreement and the Security Instrument in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender tocomply with and to cause Operating Lessee to comply with, the following covenants, and in such connection, references in this Article V to Borrower shall alternatively mean Operating Lessee, as the context may require: 

**5.1.1 Performance by Borrower**. Borrower shall observe, perform and fulfill each and every covenant, term and provision ofeach Loan Document executed and delivered by, or applicable to, Borrower, in accordance with the provisions of each Loan Document, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement, termination or othermodification of any Loan Document executed and delivered by, or applicable to, Borrower, as applicable, without the prior written consent of Lender. 

**5.1.2 Existence; Compliance with Legal Requirements; Insurance**. Subject to Borrower’s right of contest pursuant to Section 7.3, Borrower shall comply and cause the Propertyto be in compliance with all Legal Requirements applicable to the Borrower, Manager and the Property and the uses permitted upon the Property. Borrower shall do or cause 

 

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to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights,licenses, permits and franchises necessary to comply with all Legal Requirements applicable to it and the Property. There shall never be committed by Borrower, and Borrower shall not knowingly permit any other Person in occupancy of or involved withthe operation or use of the Property to commit, any act or omission affording the federal government or any state or local government the right of forfeiture as against the Property or any part thereof or any monies paid in performance ofBorrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not to commit, knowingly permit or suffer to exist any act or omission affording such right of forfeiture. Borrower shall at all times maintain,preserve and protect all material franchises and trade names and preserve all the remainder of its property used in the conduct of its business and shall keep the Property in good working order and repair, and from time to time make, or cause to bemade, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully set forth in the Security Instrument. Borrower shall keep the Property insured at all times to such extent and against suchrisks, and maintain liability and such other insurance, as set forth in this Agreement. 

**5.1.3 Litigation**.Borrower shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened in writing against Borrower which, if determined adversely to Borrower, would have a Material Adverse Effect. 

**5.1.4 Single Purpose Entity**. (a) Borrower shall remain a Single Purpose Entity. 

(b) Except as permitted by the Loan Documents, Borrower shall continue to maintain its own deposit account or accounts, separate from thoseof any Affiliate, with commercial banking institutions. None of the funds of Borrower will be commingled with the funds of any other Affiliate. 

(c) To the extent that Borrower shares the same officers or other employees as any of its Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employeesshall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees. 

(d) To the extent that Borrower jointly contracts with any of its Affiliates to do business with vendors or service providers or to shareoverhead expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs. To the extent that Borrower contracts or does business with vendors or service providerswhere the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entityshall bear its fair share of such costs. All material transactions between (or among) Borrower and any of its Affiliates shall be conducted on substantially the same terms (or on more favorable terms for Borrower) as would be conducted with thirdparties. 

 

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(e) To the extent that Borrower or any of its Affiliates have offices in the same location,there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses. 

(f) Borrower shall conduct its affairs strictly in accordance with its organizational documents, and observe all necessary, appropriate and customary corporate, limited liability company or partnershipformalities, as applicable, including, but not limited to, obtaining any and all consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, without limitation, payrolland intercompany transaction accounts. 

(g) In addition, Borrower shall: (i) maintain books and records separate fromthose of any other Person; (ii) maintain its assets in such a manner that it is not more costly or difficult to segregate, identify or ascertain such assets; (iii) hold regular meetings of its board of directors, shareholders, partners ormembers, as the case may be, and observe all other corporate, partnership or limited liability company, as the case may be, formalities; (iv) hold itself out to creditors and the public as a legal entity separate and distinct from any otherentity; (v) prepare separate tax returns and financial statements, or if part of a consolidated group, then it will be shown as a separate member of such group; (vi) transact all business with its Affiliates on an arm’s-length basisand pursuant to enforceable agreements; (vii) conduct business in its name and use separate stationery, invoices and checks; (viii) not commingle its assets or funds with those of any other Person; and (ix) not assume, guarantee orpay the debts or obligations of any other Person (however the presentation of combined or consolidated financial condition or results of operation for purposes of financial statements prepared for the ultimate equity owners of multiple SinglePurpose Entities shall be allowed). 

**5.1.5 Consents**. If Borrower is a corporation, the board of directors ofsuch Person may not take any action requiring the unanimous affirmative vote of 100% of the members of the board of directors unless all of the directors, including the Independent Directors, shall have participated in such vote if such vote relatesto a Material Action (as such term is defined in the Borrower’s organizational documents). If Borrower is a limited liability company, (a) if such Person is managed by a board of managers, the board of managers of such Person may not takeany action requiring the unanimous affirmative vote of 100% of the members of the board of managers unless all of the managers, including the Independent Managers, shall have participated in such vote if such vote relates to a Material Action (assuch term is defined in the Borrower’s organizational documents), (b) if such Person is not managed by a board of managers, the members of such Person may not take any action requiring the affirmative vote of 100% of the members of suchPerson unless all of the members, including the Independent Members, shall have participated in such vote if such vote relates to a Material Action (as such term is defined in the Borrower’s organizational documents). An affirmative vote of100% of the directors, board of managers or members, as applicable, including without limitation the Independent Directors, of Borrower shall be required to (i) file a bankruptcy or insolvency petition or otherwise institute insolvencyproceedings or to authorize Borrower to do so or (ii) file an involuntary bankruptcy petition against any Close Affiliate. Furthermore, Borrower’s formation documents shall expressly state that for so long as the Loan is outstanding,Borrower shall not be permitted to (i) dissolve, liquidate, consolidate, merge or sell all or substantially all of Borrower’s assets other than in connection with the repayment of the Loan or (ii) engage in any other business activityand such restrictions shall not be modified or violated for so long as the Loan is outstanding. 

 

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**5.1.6 Access to Property**. Borrower shall permit agents, representatives andemployees of Lender and the Rating Agencies to inspect the Property or any part thereof during normal business hours on Business Days upon reasonable advance notice. 

**5.1.7 Notice of Default**. Borrower shall promptly advise Lender (a) of any event or condition that has or is likely to have a Material Adverse Effect and (b) of the occurrence ofany Default or Event of Default of which Borrower has knowledge. 

**5.1.8 Cooperate in Legal Proceedings**.Borrower shall cooperate fully with Lender with respect to any proceedings before any court, board or other Governmental Authority which would reasonably be expected to affect in any material adverse way the rights of Lender hereunder or under anyof the other Loan Documents and, in connection therewith, permit Lender, at its election, to participate in any such proceedings which may have a Material Adverse Effect. 

**5.1.9 Perform Loan Documents**. Borrower shall observe, perform and satisfy all the terms, provisions, covenants and conditionsof, and shall pay when due all costs, fees and expenses to the extent required, under the Loan Documents executed and delivered by, or applicable to, Borrower. 

**5.1.10 Insurance**. (a) Borrower shall cooperate with Lender in obtaining for Lender the benefits of any Proceeds lawfully or equitably payable in connection with the Property, and Lendershall be reimbursed for any expenses incurred in connection therewith (including reasonable attorneys’ fees and disbursements) out of such Proceeds. 

(b) Borrower shall comply with all Insurance Requirements and shall not bring or keep or permit to be brought or kept any article upon any of the Property or cause or permit any condition to exist thereonwhich would be prohibited by any Insurance Requirement, or would invalidate insurance coverage required hereunder to be maintained by Borrower on or with respect to any part of the Property pursuant to Section 6.1. 

**5.1.11 Further Assurances; Separate Notes**. (a) Borrower shall execute and acknowledge (or cause to be executed andacknowledged) and deliver to Lender all documents, and take all actions, reasonably required by Lender from time to time to confirm the rights created or now or hereafter intended to be created under this Agreement and the other Loan Documents andany security interest created or purported to be created thereunder, to protect and further the validity, priority and enforceability of this Agreement and the other Loan Documents, to subject to the Loan Documents any property of Borrower intendedby the terms of any one or more of the Loan Documents to be encumbered by the Loan Documents, or otherwise carry out the purposes of the Loan Documents and the transactions contemplated thereunder. At any time after the Closing Date, Borrower agreesthat it shall, upon request, reasonably cooperate with Lender in connection with any request by Lender to reallocate the LIBOR Margin among the Notes or to sever the Note into two (2) or more separate substitute or component notes in anaggregate principal amount equal to the Principal Amount and to reapportion the Loan among 

 

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such separate substitute notes, including, without limitation, by executing and delivering to Lender newsubstitute or component notes to replace the Note, amendments to or replacements of existing Loan Documents to reflect such severance and/or Opinions of Counsel with respect to such substitute or component notes, amendments and/or replacements,provided that Borrower shall bear no costs or expenses in connection therewith (other than administrative costs and expenses of Borrower and legal fees of counsel to the Borrower and Sponsor), and the holders of such substitute or component notesshall designate a lead lender or agent for such holders to whom Borrower may direct all communications with respect to the Loan. Any such substitute or component notes may have varying principal amounts and economic terms, provided, however, that(i) the maturity date of any such substitute or component notes shall be the same as the scheduled Maturity Date of the Note immediately prior to the issuance of such substitute notes, (ii) the substitute notes shall provide foramortization of the Principal Amount on a weighted average basis over a period not less than the amortization period provided under the Note, if any, immediately prior to the issuance of the substitute notes, (iii) the weighted average LIBORMargin for the term of the substitute notes shall not exceed the LIBOR Margin under the Note immediately prior to the issuance of such substitute notes; and (iv) the economics of the Loan, taken as a whole, shall not change in a manner which isadverse to Borrower. Upon the occurrence and during the continuance of an Event of Default, Lender may apply payment of all sums due under such substitute notes in such order and priority as Lender shall elect in its sole and absolute discretion.

(b) No Securitization shall occur prior to April 9, 2007. Borrower further agrees that if, in connection with theSecuritization, it is determined by the Rating Agencies that a portion of the Securitization would not receive an “investment grade” rating unless the principal amount of the Loan were to be decreased and, as a result, the principal amountof the Loan is decreased, then the Borrower shall take all actions as are necessary to effect the “resizing”, including the reallocation of the LIBOR Margin of the Loan, and Borrower shall execute and deliver any and all necessaryamendments or modifications to the Loan Documents. In connection with the foregoing, Borrower agrees, at Lender’s sole cost and expense other than with respect to (1) Borrower’s, Operating Lessee’s, the Sponsor’s, eachUltimate Equity Owners’ and their Affiliate’s counsel fees and (2) if the principal amount of the Loan is increased, an endorsement to the Title Policy reflecting an increase in the insured amount thereunder which shall be atBorrower’s sole cost and expense, to execute and deliver such documents and other agreements reasonably required by Lender to “re-size” the Loan, including, without limitation, an amendment to this Agreement, the Note, the SecurityInstrument and the other Loan Documents. Borrower agrees to reimburse Lender for all costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by Lender in connection with any “resizing” ofthe Loan. Notwithstanding the foregoing, Lender agrees that any “resizing” of the Loan shall not change the economics of the Loan in a manner which is adverse to Borrower . 

(c) In addition, Borrower shall, at Borrower’s sole cost and expense: 

(i) furnish to Lender, to the extent not otherwise already furnished to Lender and reasonably acceptable to Lender, all instruments,documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications, appraisals, title and other insurance reports and agreements, and each and every other document, certificate, agreement and instrument required to befurnished by Borrower pursuant to the terms of the Loan Documents; 

 

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(ii) execute and deliver, from time to time, such further instruments (including, withoutlimitation, delivery of any financing statements under the UCC) as may be reasonably requested by Lender to confirm the Lien of the Security Instrument on any Building Equipment, Operating Asset or any Intangible; 

(iii) execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other actsnecessary to evidence, preserve and/or protect the collateral at any time securing or intended to secure the obligations of Borrower under the Loan Documents, as Lender may reasonably require; 

(iv) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the carrying out of the terms andconditions of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time; and 

(v)cause its New York counsel to re-issue the New York opinion delivered on the date hereof (in identical form and without updating) in favor of a trustee in a Securitization if such trustee is different that the trustee currently listed in suchopinion. 

**5.1.12 Mortgage Taxes**. Borrower shall pay all taxes, charges, filing, registration and recordingfees, excises and levies payable with respect to the Note or the Liens created or secured by the Loan Documents, other than income, franchise and doing business taxes imposed on Lender. 

**5.1.13 Operation**. Borrower shall, and shall cause Manager to, (i) promptly perform and/or observe all of the covenantsand agreements required to be performed and observed by it under the Management Agreement and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any “event ofdefault” under the Management Agreement of which it is aware; (iii) enforce in a commercially reasonable manner the performance and observance of all of the covenants and agreements required to be performed and/or observed by the Managerunder the Management Agreement. 

**5.1.14 Business and Operations**. Borrower shall continue to engage in thebusinesses presently conducted by it as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Property. Borrower shall qualify to do business and shall remain in good standing under the laws of theState in which the Property is located and as and to the extent required for the ownership, maintenance, management and operation of the Property. 

**5.1.15 Title to the Property**. Borrower shall warrant and defend (a) its title to the Property and every part thereof, subject only to Liens permitted hereunder (including PermittedEncumbrances) and (b) the validity and priority of the Liens of the Security Instrument, the Assignment of Leases and this Agreement on the Property, subject only to Liens permitted hereunder (including Permitted Encumbrances), in each caseagainst the claims of all Persons whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or expenses (including reasonable attorneys’ fees and court costs) incurred by Lender if an interest in the Property, other than aspermitted hereunder, is claimed by another Person. 

 

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**5.1.16 Costs of Enforcement**. In the event (a) that this Agreement or theSecurity Instrument is foreclosed upon in whole or in part or that this Agreement or the Security Instrument is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any security agreementprior to or subsequent to this Agreement in which proceeding Lender is made a party, or a mortgage prior to or subsequent to the Security Instrument in which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency,rehabilitation or other similar proceeding in respect of Borrower or any of its constituent Persons or an assignment by Borrower or any of its constituent Persons for the benefit of its creditors, Borrower, its successors or assigns, shall bechargeable with and agrees to pay all costs of collection and defense, including reasonable attorneys’ fees and costs, incurred by Lender or Borrower in connection therewith and in connection with any appellate proceeding or post-judgmentaction involved therein, together with all required service or use taxes. 

**5.1.17 Estoppel Statement**. (a)Borrower shall, from time to time, upon thirty (30) days’ prior written request from Lender, execute, acknowledge and deliver to the Lender, an Officer’s Certificate, stating that this Agreement and the other Loan Documents areunmodified and in full force and effect (or, if there have been modifications, that this Agreement and the other Loan Documents are in full force and effect as modified and setting forth such modifications), stating the amount of accrued and unpaidinterest and the outstanding principal amount of the Note and containing such other information, qualified to the Best of Borrower’s Knowledge, with respect to the Borrower, the Property and the Loan as Lender shall reasonably request. Theestoppel certificate shall also state either that no Default exists hereunder or, if any Default shall exist hereunder, specify such Default and the steps being taken to cure such Default. 

(b) Borrower shall use commercially reasonable efforts to deliver to Lender, within thirty (30) days of Lender’s request, tenantestoppel certificates from each Tenant under any Material Lease entered into after the Closing Date in substantially the form and substance of the estoppel certificate set forth in **Exhibit G**provided that Borrower shall notbe required to deliver such certificates more frequently than one time in any calendar year; provided, however, that there shall be no limit on the number of times Borrower may be required to obtain such certificates if a Defaulthereunder or under any of the Loan Documents has occurred and is continuing. 

**5.1.18 Loan Proceeds**. Borrowershall use the proceeds of the Loan received by it on the Closing Date only for the purposes set forth in Section 2.1.4. 

**5.1.19 No Joint Assessment**. Borrower shall not suffer, permit or initiate the joint assessment of the Property (a) with any other real property constituting a tax lot separate from the Property and (b) whichconstitutes real property with any portion of the Property which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied orcharged to such real property portion of the Property. 

**5.1.20 No Further Encumbrances**. Borrower shall do, orcause to be done, all things necessary to keep and protect the Property and all portions thereof unencumbered from any Liens, easements or agreements granting rights in or restricting the use 

 

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or development of the Property, except for (a) Permitted Encumbrances, (b) Liens permittedpursuant to the Loan Documents, (c) Liens for Impositions prior to the imposition of any interest, charges or expenses for the non-payment thereof and (d) any Liens permitted pursuant to Leases. 

**5.1.21 Leases**. Borrower shall promptly after receipt thereof deliver to Lender a copy of any notice received with respect toany Material Lease claiming that Borrower is in default in the performance or observance of any of the material terms, covenants or conditions of any of the Material Leases, if such default is reasonably likely to have a Material Adverse Effect.

**5.1.22 Article 8 “Opt In” Language**. Each organizational document of Borrower and each of the other entitiesidentified in Section 4.1.29 hereof shall be modified to include the language set forth on **Exhibit R**. 

**5.1.23 FF&E**. Borrower shall cause Manager to reserve for FF&E on a monthly basis in accordance with the Management Agreement not less than an amount equal to four percent (4%) of adjusted gross revenues withrespect to the Property, such reserves to be maintained in the Manager FF&E Reserve Account. 

**Section 5.2 NegativeCovenants**. From the Closing Date until payment and performance in full of all Obligations of Borrower under the Loan Documents or the earlier release of the Lien of this Agreement or the Security Instrument in accordance with the terms ofthis Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender that it will not do (and will not permit Operating Lessee to do), or permit to be done, directly or indirectly, any of the following (and in suchconnection, references in this Article V to Borrower shall alternatively mean Operating Lessee, as the context may require): 

**5.2.1 Incur Debt**. Incur, create or assume (or permit Operating Lessee to incur, create or assume) any Indebtedness other than Permitted Debt or Transfer all or any part of the Property orany interest therein, except as permitted in the Loan Documents; 

**5.2.2 Encumbrances**. Except as permittedpursuant to Article VIII, (a) incur, create or assume or permit the incurrence, creation or assumption of any Indebtedness other than Permitted Debt secured by an interest in Borrower or Operating Lessee and (b) Transfer orpermit the Transfer of any interest in such Persons; 

**5.2.3 Engage in Different Business**. Engage, or permitOperating Lessee to engage, directly or indirectly, in any business other than that of entering into this Agreement and the other Loan Documents to which Borrower is a party and the use, ownership, management, leasing, renovation, financing,development, operation and maintenance of the Property and activities related thereto; 

**5.2.4 Make Advances**.Make or permit Operating Lessee to make advances or make loans to any Person, or hold any investments, except as expressly permitted pursuant to the terms of this Agreement or any other Loan Document; 

**5.2.5 Partition**. Partition or permit the partition of the Property, except as permitted hereunder; 

 

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**5.2.6 Commingle**. Commingle its assets or permit Operating Lessee to commingleits assets with the assets of any of Borrower’s and/or Operating Lessee’s Affiliates except as permitted by the definition of “Single Purpose Entity”; 

**5.2.7 Guarantee Obligations**. Guarantee or permit Operating Lessee to guarantee any obligations of any Person; 

**5.2.8 Transfer Assets.** Transfer or permit Operating Lessee to transfer any asset other than in the ordinary course ofbusiness or Transfer any interest in the Property except as may be permitted hereby or in the other Loan Documents; 

**5.2.9Amend Organizational Documents**. Amend or modify any of its or Operating Lessee’s organizational documents without Lender’s consent, other than in connection with any Transfer permitted pursuant to Article VIII or toreflect any change in capital accounts, contributions, distributions, allocations or other provisions that do not and could not reasonably be expected to have a Material Adverse Effect and provided that each such Person remain a Single PurposeEntity; 

**5.2.10 Dissolve**. Dissolve, wind-up, terminate, liquidate, merge with or consolidate into anotherPerson, except following or simultaneously with a repayment of the Loan in full or as expressly permitted pursuant to this Agreement; 

**5.2.11 Bankruptcy**. (i) File (or permit Operating Lessee to file) a bankruptcy or insolvency petition or otherwise institute insolvency proceedings, (ii) dissolve, liquidate, consolidate, merge or sell all orsubstantially all of Borrower’s assets other than in connection with the repayment of the Loan, (iii) engage (or permit Operating Lessee to engage) in any other business activity or (iv) file or solicit the filing (or permit OperatingLessee to file or solicit the filing) of an involuntary bankruptcy petition against Borrower, or Operating Lessee, or any Close Affiliate of any such Person without obtaining the prior consent of all of the directors of Borrower, including, withoutlimitation, the Independent Directors; 

**5.2.12 ERISA**. Engage in any activity that would subject it toregulation under ERISA or qualify it as an “employee benefit plan” (within the meaning of Section 3(3) of ERISA) to which ERISA applies and Borrower’s assets do not and will not constitute plan assets within the meaning of 29C.F.R. Section 2510.3-101; 

**5.2.13 Distributions**. From and after the occurrence and during the continuanceof an Event of Default, make (or permit Operating Lessee to make) any distributions to or for the benefit of any of Borrower’s, or Operating Lessee’s shareholders, partners or members, as the case may be, or its or their Affiliates;

**5.2.14 Manager**. (a) Borrower represents, warrants and covenants on behalf of itself and Operating Lessee thatthe Property shall at all times be managed by an Acceptable Manager pursuant to an Acceptable Management Agreement. 

(b)Notwithstanding any provision to the contrary contained herein or in the other Loan Documents, except as provided in this Section 5.2.14 or in connection with a release made in accordance with Section 2.3.4, Borrower may notamend, modify, supplement, alter or 

 

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waive any right under the Management Agreement (or permit any such action) without the receipt of a RatingAgency Confirmation. Without the receipt of a Rating Agency Confirmation, Borrower shall be permitted to make any nonmaterial modification, change, supplement, alteration or amendment to the Management Agreement and to waive any nonmaterial rightsthereunder, provided that no such modification, change, supplement, alteration, amendment or waiver shall affect the cash management procedures set forth in the Management Agreement or the Loan Documents, decrease the cash flow of the Property,adversely affect the marketability of the Property, change the definitions of “default” or “event of default,” change the definitions of “operating expense” or words of similar meaning to add additional items to suchdefinitions, change any definitions or provisions so as to reduce the payments due the Borrower thereunder, change the timing of remittances to the Borrower thereunder, increase or decrease reserve requirements, change the term of the ManagementAgreement or increase any Management Fees payable under the Management Agreement. 

(c) Borrower may enter into a newManagement Agreement with an Acceptable Manager upon receipt of a Rating Agency Confirmation with respect to the Management Agreement and delivery of an acceptable Non-Consolidation Opinion covering such replacement manager if such Person(i) is not covered by the Non-Consolidation Opinion or an Additional Non-Consolidation Opinion, and (ii) is an Affiliate of Borrower. 

(d) Notwithstanding anything contained herein (i) approvals will not be required to enter into management agreements for Retail/Service Facilities that are not expected to have a Material AdverseEffect, and (ii) amendments to the Management Agreement relating to the Retail/Service Facilities will be deemed to be nonmaterial modifications permitted by Section 5.2.14(b) provided they are not expected to have a Material AdverseEffect. 

**5.2.15 Management Fee**. Borrower may not, without the prior written consent of Lender (which may bewithheld in its sole and absolute discretion) take or permit to be taken any action that would increase the percentage amount of the Management Fee, or add a new type of fee (other than a “Group Services Expense” as permitted bySection 5.2.14 above) payable to Manager relating to the Property, including, without limitation, the Management Fee. 

**5.2.16 Operating Lease**. Without the prior written consent of Lender surrender or terminate the Operating Lease unless the other party thereto is in material default and the termination of such agreement would be commerciallyreasonable. 

**5.2.17 Modify Account Agreement**. Without the prior consent of Lender, which shall not beunreasonably withheld, delayed or conditioned (and if a Securitization shall have occurred, a Rating Agency Confirmation obtained by Borrower), Borrower shall not execute any modification to the Account Agreement; 

**5.2.18 Zoning Reclassification**. Except as contemplated by Section 2.3.4, without the prior written consent ofLender, which consent shall not be unreasonably withheld, (a) initiate or consent to any zoning reclassification of any portion of the Property, (b) seek any variance under any existing zoning ordinance that would result in the use of theProperty becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, or (c) allow any portion of the Property to be used in any manner that could result in the use of the Property becominga non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation; 

 

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**5.2.19 Intentionally Deleted**. 

**5.2.20 Debt Cancellation**. Cancel or otherwise forgive or release any material claim or debt owed to it by any Person, exceptfor adequate consideration or in the ordinary course of its business and except for termination of a Lease as permitted by Section 8.8; 

**5.2.21 Misapplication of Funds**. Distribute any revenue from the Property or any Proceeds in violation of the provisions of this Agreement, fail to remit amounts to the Collection Accounts orHolding Account, as applicable, as required by Section 3.1, misappropriate any security deposit or portion thereof or apply the proceeds of the Loan in violation of Section 2.1.4; or 

**5.2.22 Single-Purpose Entity**. Fail to be (or permit Operating Lessee) to fail to be a Single-Purpose Entity or take or sufferany action or inaction the result of which would be to cause such Person to cease to be a Single-Purpose Entity. 

**VI.INSURANCE; CASUALTY; CONDEMNATION; RESTORATION**

**Section 6.1 Insurance Coverage Requirements**. Borrowershall, at its sole cost and expense, during the term of this Agreement, comply with the following insurance obligations: 

(a)Borrower, at its sole cost and expense, for the mutual benefit of Borrower and Lender, shall keep or cause to be kept the Property insured and obtain and maintain policies of insurance insuring against loss or damage by standard perils includedwithin the classification “All Risks of Physical Loss.” Such insurance (i) shall be in an aggregate amount equal to the then full replacement cost of the Property and the Improvements (without deduction for physical depreciation), orsuch lesser amounts approved by Lender in its sole discretion (or after a Securitization, upon receipt of a Rating Agency Confirmation), and (ii) shall have deductibles no greater than $500,000 (as escalated by the CPI Increase) (or, withrespect to windstorm insurance, deductibles no greater than 10% of the full replacement cost of the Property. The policies of insurance carried in accordance with this paragraph shall be paid annually in advance and shall contain a “ReplacementCost Endorsement” with a waiver of depreciation. 

(b) Borrower, at its sole cost and expense, for the mutual benefit ofBorrower and Lender, shall also obtain and maintain or cause to be obtained and maintained the following policies of insurance: 

(i) Flood insurance if any part of the Property is located in an area identified by the Federal Emergency Management Agency as an area federally designated a “100 year flood plain” (an “**Affected Property**”and collectively the “**Affected Properties**”) and (A) flood insurance is generally available at reasonable premiums and in such amount as generally required by institutional lenders for similar properties or (B) ifnot so available from a private carrier, from the federal government at commercially reasonable premiums to the extent available. In either case, the flood insurance shall be in an amount at least equal to the aggregate 

 

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principal amount of the Loan outstanding from time to time or the maximum limit of coverage available withrespect to the Property under said program, whichever is less; provided, however, notwithstanding the foregoing, Borrower hereby agrees to maintain at all times flood insurance in an amount equal to at least $50,000,000 in the aggregate and sharedwith all other properties covered by the blanket policy (if any) for the Affected Properties; 

(ii) Commercial generalliability insurance, including broad form property damage, blanket contractual and personal injuries (including death resulting therefrom) coverages and containing minimum limits per occurrence of $1,000,000 with a $2,000,000 general aggregate forany policy year. In addition, at least $50,000,000 excess and/or umbrella liability insurance shall be obtained and maintained for claims, including legal liability imposed upon Borrower and all related court costs and attorneys’ fees anddisbursements; 

(iii) Rental loss and/or business interruption insurance in an amount sufficient to avoid any co-insurancepenalty and equal to the greater of (A) the estimated gross revenues from the operation of the Property (including (x) the total payable under the Leases and all Rents and (y) the total of all other amounts to be received by Borroweror third parties that are the legal obligation of the Tenants), net of non-recurring expenses, for a period of up to the next succeeding eighteen (18) months, or (B) the projected Operating Expenses (including debt service) for themaintenance and operation of the Property for a period of up to the next succeeding eighteen (18) months as the same may be reduced or increased from time to time due to changes in such Operating Expenses and shall include an endorsementproviding 12 months extended period of indemnity. The amount of such insurance shall be increased from time to time as and when the Rents increase or the estimates of (or the actual) gross revenue, as may be applicable, increases or decreases to theextent Rents or the estimates of gross revenue decrease; 

(iv) Insurance against loss or damage from (A) leakage ofsprinkler systems and (B) explosion of steam boilers, air conditioning equipment, high pressure piping, machinery and equipment, pressure vessels or similar apparatus now or hereafter installed in any of the Improvements (without exclusion forexplosions) and insurance against loss of occupancy or use arising from any breakdown, in such amounts as are generally available at reasonable premiums and are generally required by institutional lenders for properties comparable to the Property;

(v) Worker’s compensation insurance with respect to all employees of Borrower as and to the extent required by anyGovernmental Authority or Legal Requirement and employer’s liability coverage of at least $2,000,000 which is scheduled to the excess and/or umbrella liability insurance as referenced in clause (ii) above; 

(vi) During any period of repair or restoration, completed value (non-reporting) builder’s “all risk” insurance in an amountequal to not less than the full insurable value of the Property against such risks (including fire and extended coverage and collapse of the Improvements to agreed limits) as Lender may request, in form and substance acceptable to Lender;

(vii) Coverage to compensate for the cost of demolition and the increased cost of construction for the Property; 

 

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(viii) Intentionally Deleted; 

(ix) Windstorm insurance in an amount equal to the probable maximum loss (as determined by Lender in its sole discretion) of the Propertyper occurrence and in the aggregate and shared with other properties covered by the blanket insurance (if any) provided, that any credit enhancement proposed to be provided by or on behalf of Borrower in connection with the deductible on suchwindstorm insurance shall be subject to the prior receipt of a Rating Agency Confirmation; 

(x) Law and ordinance insurancecoverage in an amount no less than that set forth in the insurance policies covering the Property as of the date hereof; 

(xi) Provided that insurance coverage relating to the acts of terrorist groups or individuals is either (a) available at commercially reasonable rates, (b) commonly obtained by owners of commercial properties in the samegeographic area and which are similar to the Property or (c) maintained for another hotel property in the same geographic area which is at least 51% owned directly or indirectly by Strategic Hotel Funding, LLC, Borrower shall be required tocarry terrorism insurance throughout the term of the Loan (including any extension terms) in an amount equal to, with respect to “certified” and “non-certified” acts of terrorism, an amount equal to the Terrorism CoverageRequired Amount (per occurrence) (collectively, the “**Initial Terrorism Coverage Amount**”). Lender agrees that terrorism insurance coverage may be provided under a blanket policy that is acceptable to Lender. Notwithstandingthe foregoing, Borrower agrees at all times to maintain terrorism insurance coverage throughout the term of the Loan (including extension terms) in an amount not less than that which can be purchased for a sum equal to $190,000 (the“**Maximum Premium Amount**”) in any single policy year, provided, that under no circumstance shall terrorism coverage in excess of the Initial Terrorism Coverage Amount (per occurrence) of coverage be required hereunder;

(xii) Such other insurance as may from time to time be reasonably required by Lender in order to protect its interests; and

(xiii) All insurance required under this Section 6.1 may be provided by or on behalf of Borrower in a blanketpolicy covering the Property and other properties. 

(c) All policies of insurance (the “**Policies**”)required pursuant to this Section 6.1 shall be issued by companies approved by Lender and licensed or authorized to do business in the state where the Property is located. Further, unless otherwise approved by Lender in its reasonablediscretion (prior to a Securitization) and the Rating Agencies in writing, the issuer(s) of the Policies required under this Section 6.1 shall have a claims paying ability rating of “A” or better by Standard &Poor’s and “Aa2” or better by Moody’s, except that the issuer(s) of the Policies required under Section 6.1(b)(viii) hereof shall have a claims paying ability rating of “A” or better by Standard &Poor’s and “A2” or better by Moody’s; provided, however, if the insurance provided hereunder is procured by a syndication of more then five (5) insurers then the foregoing requirements shall not be violated if at least(i) sixty percent (60%) of the coverage is with carriers having a claims paying ability rating of “A” or better by Standard & Poor’s and “Aa2” or better by Moody’s and (ii) each other carrierproviding coverage has a claims paying ability rating of “BBB-” or better by Standard & Poor’s and Fitch Ratings and 

 

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“Baa3” or better by Moody’s. The Policies (i) shall name Lender (or an agent onLender’s behalf) and its successors and/or assigns as their interest may appear as an additional insured or as a loss payee (except that in the case of general liability insurance, Lender (or an agent on Lender’s behalf) shall be named anadditional insured and not a loss payee); (ii) shall contain a Non-Contributory Standard Lender Clause and, except with respect to general liability insurance, a Lender’s Loss Payable Endorsement, or their equivalents, naming Lender as thePerson to which all payments made by such insurance company shall be paid; (iii) shall include effective waivers by the insurer of all claims for insurance premiums against all loss payees, additional insureds and named insureds (other thanBorrower) and all rights of subrogation against any loss payee, additional insured or named insured; (iv) shall be assigned to Lender; (v) except as otherwise provided above, shall be subject to a deductible, if any, not greater in anymaterial respect than the deductible for such coverage on the date hereof; (vi) shall contain such provisions as Lender deems reasonably necessary or desirable to protect its interest, including endorsements providing that neither Borrower,Lender nor any other party shall be a Contributor-insurer (except deductibles) under said Policies and that no material modification, reduction, cancellation or termination in amount of, or material change (other than an increase) in, coverage ofany of the Policies shall be effective until at least thirty (30) days after receipt by each named insured, additional insured and loss payee of written notice thereof or ten (10) days after receipt of such notice with respect tononpayment of premium; (vii) shall permit Lender to pay the premiums and continue any insurance upon failure of Borrower to pay premiums when due, upon the insolvency of Borrower or through foreclosure or other transfer of title to the Property(it being understood that Borrower’s rights to coverage under such policies may not be assignable without the consent of the insurer); and (viii) shall provide that any proceeds shall be payable to Lender and that the insurance shall notbe impaired or invalidated by virtue of (A) any act, failure to act, negligence of, or violation of declarations, warranties or conditions contained in such policy by Borrower, Lender or any other named insured, additional insured or losspayee, except for the willful misconduct of Lender knowingly in violation of the conditions of such policy, (B) the occupation, use, operation or maintenance of the Property for purposes more hazardous than permitted by the terms of the Policy,(C) any foreclosure or other proceeding or notice of sale relating to the Property, or (D) any change in the possession of the Property without a change in the identity of the holder of actual title to the Property (provided thatwith respect to items (C) and (D), any notice requirements of the applicable Policies are satisfied). Notwithstanding the foregoing, for purposes of this Section 6.1 hereof, Lender hereby approves the existing blanket insurancepolicies. 

(d) **Insurance Premiums; Certificates of Insurance.**

(i) Borrower shall pay the premiums for such Policies (the “**Insurance Premiums**” ) as the same become due and payableand shall furnish to Lender the receipts for the payment of the Insurance Premiums or other evidence of such payment reasonably satisfactory to Lender (provided, however, that Borrower is not required to furnish such evidence ofpayment to Lender if such Insurance Premiums are to be paid by Lender pursuant to the terms of this Agreement). Within thirty (30) days after request by Lender, Borrower shall obtain such increases in the amounts of coverage required hereunderas may be reasonably requested in writing by Lender or as may be requested in writing by the Rating Agencies, (except with respect to the Terrorism Insurance), taking into consideration changes in liability laws, changes in prudent customs andpractices, and the like. In the event Borrower 

 

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satisfy the requirements under this Section 6.1 through the use of a Policy covering propertiesin addition to the Property (a “**Blanket Policy**”), then (unless such policy is provided in substantially the same manner as it is as of the date hereof), Borrower shall provide evidence satisfactory to Lenderthat the Insurance Premiums for the Property is separately allocated under such Policy to the Property and that payment of such allocated amount (A) shall maintain the effectiveness of such Policy as to the Property and (B) shall otherwiseprovide the same protection as would a separate policy that complies with the terms of this Agreement as to the Property, notwithstanding the failure of payment of any other portion of the insurance premiums. If no such allocation is available,Lender shall have the right to increase the amount required to be deposited into the Insurance Reserve Account in an amount sufficient to purchase a non-blanket Policy covering the Property from insurance companies which qualify under thisAgreement. 

(ii) Borrower shall deliver to Lender on or prior to the Closing Date certificates setting forth in reasonabledetail the material terms (including any applicable notice requirements) of all Policies from the respective insurance companies (or their authorized agents) that issued the Policies, including that such Policies may not be canceled or modified inany material respect without thirty (30) days’ prior notice to Lender, or ten (10) days’ notice with respect to nonpayment of premium. Borrower shall deliver to Lender, concurrently with each change in any Policy, a certificatewith respect to such changed Policy certified by the insurance company issuing that Policy, in substantially the same form and containing substantially the same information as the certificates required to be delivered by Borrower pursuant to thefirst sentence of this clause (d)(ii) and stating that all premiums then due thereon have been paid to the applicable insurers and that the same are in full force and effect (or if such certificate and/or other information described inclause (d)(ii) shall not be obtainable by Borrower, Borrower may deliver an Officer’s Certificate to such effect in lieu thereof). 

(e) **Renewal and Replacement of Policies.**

(i) Not less than three(3) Business Days prior to the expiration, termination or cancellation of any Policy, Borrower shall renew such policy or obtain a replacement policy or policies (or a binding commitment for such replacement policy or policies), which shall beeffective no later than the date of the expiration, termination or cancellation of the previous policy, and shall deliver to Lender a certificate in respect of such policy or policies (A) containing the same information as the certificatesrequired to be delivered by Borrower pursuant to clause (d)(ii) above, or a copy of the binding commitment for such policy or policies and (B) confirming that such policy complies with all requirements hereof. 

(ii) If Borrower does not furnish to Lender the certificates as required under clause (e)(i) above, Lender may procure, but shallnot be obligated to procure, such replacement policy or policies and pay the Insurance Premiums therefor, and Borrower agrees to reimburse Lender for the cost of such Insurance Premiums promptly on demand. 

(iii) Concurrently with the delivery of each replacement policy or a binding commitment for the same pursuant to this clause (e),Borrower shall deliver to Lender a report or attestation from a duly licensed or authorized insurance broker or from the insurer, setting forth the particulars as to all insurance obtained by Borrower pursuant to this Section 6.1 

 

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and then in effect and stating that all Insurance Premiums then due thereon have been paid in full to theapplicable insurers, that such insurance policies are in full force and effect and that, in the opinion of such insurance broker or insurer, such insurance otherwise complies with the requirements of this Section 6.1 (or if such reportshall not be available after Borrower shall have used reasonable efforts to provide the same, Borrower will deliver to Lender an Officer’s Certificate containing the information to be provided in such report). 

(f) **Separate Insurance.** Borrower will not take out separate insurance concurrent in form or contributing in the event of losswith that required to be maintained pursuant to this Section 6.1 unless such insurance complies with clause (c) above. 

(g) **Securitization.** Following any Securitization, Borrower shall name any trustee, servicer or special servicer designated by Lender as a loss payee, and any trustee, servicer and specialservicer as additional insureds, with respect to any Policy for which Lender is to be so named hereunder. 

**Section 6.2Condemnation and Insurance Proceeds.**

**6.2.1 Right to Adjust.** (a) If the Property is damaged ordestroyed, in whole or in part in any material respect, by a Casualty, Borrower shall give prompt written notice thereof to Lender, generally describing the nature and extent of such Casualty. Following the occurrence of a Casualty, Borrower,regardless of whether proceeds are available, shall in a reasonably prompt manner proceed to restore, repair, replace or rebuild the Property to the extent practicable to be of at least equal value and of substantially the same character as prior tothe Casualty, all in accordance with the terms hereof applicable to Alterations. 

(b) Subject to clause (e) below, in theevent of a Casualty which is not a Material Casualty, Borrower may settle and adjust such claim; provided that such adjustment is carried out in a competent and timely manner. In such case, Borrower is hereby authorized to collect and receipt forLender any Proceeds. 

(c) Subject to clause (e) below, in the event of a Casualty where the loss exceeds the ThresholdAmount, Borrower may settle and adjust such claim only with the consent of Lender (which consent shall not be unreasonably withheld, delayed or conditioned) and Lender shall have the opportunity to participate, at Borrower’s cost, in any suchadjustments. 

(d) Except as provided in clause (b) above, the proceeds of any Policy shall be due and payable solely toLender and held and applied in accordance with the terms hereof (or, if mistakenly paid to the Borrower, shall be held in trust by the Borrower for the benefit of Lender and shall be paid over to Lender by the Borrower within two (2) BusinessDays of receipt). 

(e) Notwithstanding the terms of clauses (a) and (b) above, Lender shall have the sole authorityto adjust any claim with respect to a Casualty and to collect all Proceeds if an Event of Default shall have occurred and is continuing. 

**6.2.2 Right of the Borrower to Apply to Restoration.** In the event of (a) a Casualty that does not constitute a Material Casualty, or (b) a Condemnation that does not 

 

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constitute a Material Condemnation, Lender shall permit the application of the Proceeds (after reimbursementof any expenses incurred by Lender) to reimburse or pay Borrower for the cost of restoring, repairing, replacing or rebuilding or otherwise curing title defects at the Property (the “**Restoration**”), in the manner required hereby,provided and on the condition that (1) no Event of Default shall have occurred and be then continuing and (2) in the reasonable judgment of Lender: 

(i) the Property can be restored to an economic unit not materially less valuable (taking into account the effect of the termination of any Leases and the proceeds of any rental loss or businessinterruption insurance which the Borrower receives or is entitled to receive, in each case, due to such Casualty or Condemnation) and not materially less useful than the same was prior to the Casualty or Condemnation, 

(ii) the Property, after such Restoration and stabilization, will adequately secure the outstanding balance of the Loan, 

(iii) the Restoration can be completed by the earliest to occur of: 

(A) the date on which the business interruption insurance carried by Borrower with respect to the Property shall expire; 

(B) the 180th day prior to the Maturity Date (taking into account any extension thereof), and 

(C) with respect to a Casualty, the expiration of the payment period on the rental loss or business interruption insurance coverage inrespect of such Casualty; and 

(iv) after receiving reasonably satisfactory evidence to such effect, during the period of theRestoration, the sum of (A) income derived from the Property, plus (B) proceeds of rental loss insurance or business interruption insurance, if any, payable together with such other monies as Borrower may irrevocably make available for theRestoration, will equal or exceed the sum of (x) 105% of Operating Expenses and (y) the Debt Service. 

Notwithstanding theforegoing, if any of the conditions set forth in sub-clauses (1) and (2) of the proviso in this Section 6.2.2 is not satisfied, then, unless Lender shall otherwise elect, at its sole option, the Proceeds shall be applied in thefollowing order of priority: (A) first, to prepay the principal of the Loan; (B) second, to pay the amount of (1) all accrued and unpaid interest in respect of the Principal Amount of the Indebtedness so prepaid through the date whichis the final day of the Interest Period in which such prepayment is made (including, if an Event of Default has occurred and is then continuing, interest owed at the Default Rate), and (2) all other sums (excluding any Prepayment Fee) then dueand owing under the Loan Documents and (C) third, to reimburse Lender for any fees and expenses of Lender incurred in connection therewith (it being agreed that, upon satisfaction in full of the entitlements under clauses (A), (B) and(C) of this sentence, Borrower shall be entitled to receive a release of the Lien of the Security Instrument and the other Loan Documents with respect to the Property in accordance with and subject to the terms of Section 2.3.3hereof and any surplus Proceeds shall be paid over to the Borrower or as the Borrower directs. Notwithstanding the foregoing, or anything else to 

 

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the contrary contained herein, all Proceeds with respect to the insurance determined pursuant toSection 6.1.4 shall be deposited directly into the Collection Account and shall be disbursed in accordance with Article III as if such Proceeds are applied in the manner amounts received from the Manager are applied

**6.2.3 Material Casualty or Condemnation and Lender’s Right to Apply Proceeds**. In the event of a MaterialCasualty or a Material Condemnation, then Lender shall have the option to (i) apply the Proceeds hereof in the following order of priority: (A) first, to prepay the principal of the Loan; (B) second, to pay the amount of (1) allaccrued and unpaid interest in respect of the Principal Amount of the Indebtedness so prepaid through the date which is the final day of the Interest Period in which such prepayment is made (including, if an Event of Default has occurred and is thencontinuing, interest owed at the Default Rate), and (2) all other sums (excluding any Prepayment Fee) then due and owing under the Loan Documents; (C) third, to reimburse Lender for any fees and expenses of Lender incurred in connectiontherewith; and (D) fourth, it being agreed that, upon satisfaction in full of the entitlements under clauses (A), (B) and (C) of this sentence, Borrower shall be entitled to receive the balance of the Proceeds, if any and arelease of the Lien of the Security Instrument and the other Loan Documents with respect to the Property in accordance with and subject to the terms of Section 2.3.3 hereof), or (ii) make such Proceeds available to reimburseBorrower for the cost of any Restoration in the manner set forth below in Section 6.2.4 hereof provided, however, that if the Management Agreement provides that the Operating Lessee or Borrower is required to use theProceeds to restore the Property and Operating Lessee or Borrower does not have the right to terminate the Management Agreement pursuant to the terms of the Management Agreement as a result of such Casualty or Condemnation or otherwise, then theLender shall be obligated to make such Proceeds available to the Borrower for the Restoration of such Property pursuant to Section 6.2.4 below. Notwithstanding anything to the contrary contained herein, in the event of a MaterialCasualty or a Material Condemnation, where Borrower cannot restore, repair, replace or rebuild the Property to be of at least substantially equal value and of substantially the same character as prior to the Material Casualty or MaterialCondemnation or title defect because the Property is a legally non-conforming use or as a result of any other Legal Requirement, Borrower hereby agrees that Lender may apply the Proceeds payable in connection therewith in accordance withclauses (A), (B) (C) and (D). 

**6.2.4 Manner of Restoration and Reimbursement**. If Borrower isentitled pursuant to Sections 6.2.2 or 6.2.3 above to reimbursement out of Proceeds (and the conditions specified therein shall have been satisfied), such Proceeds shall be disbursed on a monthly basis upon Lender being furnishedwith (i) such architect’s certificates, waivers of lien, contractor’s sworn statements, title insurance endorsements, bonds, plats of survey and such other evidences of cost, payment and performance as Lender may reasonably requireand approve, and (ii) all plans and specifications for such Restoration, such plans and specifications to be approved by Lender prior to commencement of any work (such approval not to be unreasonably withheld, delayed or conditioned). Inaddition, no payment made prior to the Final Completion of the Restoration (excluding punch-list items) shall exceed ninety percent (90%) of the aggregate value of the work performed from time to time; funds other than Proceeds shall bedisbursed prior to disbursement of such Proceeds; and at all times, the undisbursed balance of such Proceeds remaining in the hands of Lender, together with funds deposited for that purpose or irrevocably committed to the satisfaction of Lender byor on behalf of Borrower for that 

 

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purpose, shall be at least sufficient in the reasonable judgment of Lender to pay for the cost of completionof the Restoration, free and clear of all Liens or claims for Lien. Prior to any disbursement, Lender shall have received evidence reasonably satisfactory to it of the estimated cost of completion of the Restoration (such estimate to be made byBorrower’s architect or contractor and approved by Lender in its reasonable discretion), and Borrower shall have deposited with Lender Eligible Collateral in an amount equal to the excess (if any) of such estimated cost of completion over thenet Proceeds. Any surplus which may remain out of Proceeds received pursuant to a Casualty after payment of such costs of Restoration shall be paid to the Borrower or as the Borrower directs . Any surplus which may remain out of Proceeds receivedpursuant to a Condemnation shall be paid to the Borrower or as the Borrower directs. 

**6.2.5 Condemnation**. (a)Borrower shall promptly give Lender written notice of the actual commencement or written threat of commencement of any Condemnation and shall deliver to Lender copies of any and all papers served in connection with such Condemnation. Following theoccurrence of a Condemnation, Borrower, regardless of whether Proceeds are available, shall promptly proceed to restore, repair, replace or rebuild the same to the extent practicable to be of at least equal value and of substantially the samecharacter as prior to such Condemnation, all to be effected in accordance with the terms hereof applicable to Alterations. 

(b) Lender is hereby irrevocably appointed as Borrower’s attorney-in-fact, coupled with an interest, with exclusive power to collect, receive and retain any Proceeds in respect of a Condemnation and to make any compromise or settlementin connection with such Condemnation, subject to the provisions of this Section. Provided no Event of Default has occurred and is continuing, (x) in the event of a Condemnation which is not a Material Condemnation, Borrower may settle andcompromise such Proceeds; provided that the same is effected in a competent and timely manner, and (y) in the event of a Condemnation, where the loss exceeds the Threshold Amount, Borrower may settle and compromise the Proceeds only with theconsent of Lender (which consent shall not be unreasonably withheld, delayed or conditioned) and Lender shall have the opportunity to participate, at Borrower’ cost, in any litigation and settlement discussions in respect thereof.Notwithstanding any Condemnation by any public or quasi-public authority (including any transfer made in lieu of or in anticipation of such a Condemnation), Borrower shall continue to pay the Indebtedness at the time and in the manner provided forin the Note, this Agreement and the other Loan Documents, and the Indebtedness shall not be reduced unless and until any Proceeds shall have been actually received and applied by Lender to discharge the Indebtedness, pay required interest and payany other required amounts, in each case, pursuant to the terms of Sections 6.2.2 or 6.2.3 above. Lender shall not be limited to the interest paid on the Proceeds by the condemning authority but shall be entitled to receive out ofthe Proceeds interest at the rate or rates provided in the Note. Borrower shall cause any Proceeds that are payable to Borrower to be paid directly to Lender to be held and applied in accordance with the terms hereof. 

**VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS**

**Section 7.1 Impositions and Other Charges**. Subject to the third sentence of this Section 7.1, Borrower shall pay,or shall cause Operating Lessee to pay all Impositions now or hereafter levied or assessed or imposed against the Property or any part thereof prior to the 

 

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imposition of any interest, charges or expenses for the non-payment thereof and shall pay all Other Chargeson or before the date they are due. Subject to Borrower’s right of contest set forth in Section 7.3, as set forth in the next two sentences and provided that there are sufficient funds available in the Tax Reserve Account, Lender,on behalf of Borrower, shall pay all Impositions and Other Charges which are attributable to or affect the Property or Borrower, prior to the date such Impositions or Other Charges shall become delinquent or late charges may be imposed thereon,directly to the applicable taxing authority with respect thereto. Lender shall, or Lender shall direct the Cash Management Bank to, pay to the taxing authority such amounts to the extent funds in the Tax Reserve Account are sufficient to pay suchImpositions. Nothing contained in this Agreement or the Security Instrument shall be construed to require Borrower to pay any tax, assessment, levy or charge imposed on Lender in the nature of a franchise, capital levy, estate, inheritance,succession, income or net revenue tax. 

**Section 7.2 No Liens**. Subject to its right of contest set forth inSection 7.3, Borrower shall at all times keep, or cause to be kept, the Property free from all Liens (other than Permitted Encumbrances) and shall pay when due and payable (or bond over) all claims and demands of mechanics, materialmen,laborers and others which, if unpaid, might result in or permit the creation of a Lien on the Property or any portion thereof and shall in any event cause the prompt, full and unconditional discharge of all Liens imposed on or against the Propertyor any portion thereof within forty-five (45) days after receiving written notice of the filing (whether from Lender, the lienor or any other Person) thereof. Borrower shall do or cause to be done, at the sole cost of Borrower, everythingreasonably necessary to fully preserve the first priority of the Lien of the Security Instrument against the Property, subject to the Permitted Encumbrances. Upon the occurrence and during the continuance of an Event of Default with respect to itsObligations as set forth in this Article VII, Lender may (but shall not be obligated to) make such payment or discharge such Lien, and Borrower shall reimburse Lender within three (3) Business Days following demand for all suchadvances pursuant to Section 19.12 (together with interest thereon at the Default Rate). 

**Section 7.3Contest**. Nothing contained herein shall be deemed to require Borrower to pay, or cause to be paid, any Imposition or to satisfy any Lien, or to comply with any Legal Requirement or Insurance Requirement, so long as Borrower is in goodfaith, and by proper legal proceedings, where appropriate, diligently contesting the validity, amount or application thereof, provided that in each case, at the time of the commencement of any such action or proceeding, and during the pendency ofsuch action or proceeding (i) no Event of Default shall exist and be continuing hereunder, (ii) Borrower shall keep Lender informed of the status of such contest at reasonable intervals, (iii) if neither Borrower nor Operating Lesseeis providing security as provided in clause (vi) below, adequate reserves with respect thereto are maintained on Borrower’s books in accordance with GAAP or in the Tax Reserve Account or Insurance Reserve Account, as applicable,(iv) either such contest operates to suspend collection or enforcement as the case may be, of the contested Imposition, Lien or Legal Requirement and such contest is maintained and prosecuted continuously and with diligence or the Imposition orLien is bonded, (v) in the case of any Insurance Requirement, the failure of Borrower to comply therewith shall not impair the validity of any insurance required to be maintained by Borrower under Section 6.1 or the right to fullpayment of any claims thereunder, and (vi) in the case of Impositions and Liens which are not bonded in excess of $1,000,000 individually, or in the aggregate, during such contest, Borrower, shall deposit with or deliver to Lender either Cashand 

 

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Cash Equivalents or a Letter or Letters of Credit in an amount equal to 125% of (A) the amount ofBorrower’s obligations being contested plus (B) any additional interest, charge, or penalty arising from such contest. Notwithstanding the foregoing, the creation of any such reserves or the furnishing of any bond or other security,Borrower promptly shall comply with any contested Legal Requirement or Insurance Requirement or shall pay any contested Imposition or Lien, and compliance therewith or payment thereof shall not be deferred, if, at any time the Property or anyportion thereof shall be, in Lender’s reasonable judgment, in imminent danger of being forfeited or lost or Lender is likely to be subject to civil or criminal damages as a result thereof. If such action or proceeding is terminated ordiscontinued adversely to Borrower, Borrower shall deliver to Lender reasonable evidence of Borrower’s compliance with such contested Imposition, Lien, Legal Requirements or Insurance Requirements, as the case may be. 

**VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS**

**Section 8.1 Restrictions on Transfers and Indebtedness**. (a) Except in connection with such action as is permitted by thesubsequent provisions of this Article VIII, Borrower will not, without Lender’s prior written consent and a Rating Agency Confirmation with respect to the transfer or other matter in question, (A), Transfer legal, Beneficial ordirect or indirect equitable interests in all or any part of the Property, the Borrower or Operating Lessee, (B) permit or suffer any owner, directly or indirectly, of a legal, Beneficial or equitable interest in the Property, the Borrower orOperating Lessee to Transfer such interest, whether by transfer of stock or other legal, Beneficial or equitable interest in any entity or otherwise, (C) mortgage, hypothecate or otherwise encumber or grant a security interest in all or anypart of the legal, Beneficial or equitable interests in all or any part of the Property, the Borrower or the Operating Lessee, or (D) file of record a declaration of condominium with respect to the Property. Notwithstanding any provision hereinto the contrary, nothing contained herein shall be deemed to restrict or otherwise interfere with the ability of the holders of direct or indirect legal, Beneficial or equitable interests in the Ultimate Equity Owner to Transfer such interests,whether in connection with an initial public offering of shares in Ultimate Equity Owner or otherwise or any pledge to secure the Revolver Loan or the enforcement or foreclosure thereof pursuant to such pledge. 

(b) Borrower shall not incur, create or assume any Indebtedness without the consent of Lender; provided, however, Borrowermay, without the consent of Lender, incur, create or assume Permitted Debt or allow or suffer such Permitted Debt to be incurred, created or assumed. 

(c) Notwithstanding the foregoing, nothing herein shall prevent Borrower or any direct or indirect owner of any legal or Beneficial or equitable interest therein, to enter into a purchase and saleagreement or other similar arrangements to Transfer any interest in connection with any sale of the Property or other interest so long as a condition precedent to such Transfer is the payment, in full, of the Indebtedness. 

**Section 8.2 Sale of Building Equipment**. Borrower may Transfer or dispose of Building Equipment which is being replaced orwhich is no longer necessary in connection with the operation of the Property free from the Lien of the Security Instrument provided that such Transfer or disposal will not have a Material Adverse Effect on the value of the Property 

 

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taken as a whole, will not materially impair the utility of the Property, and will not result in a reductionor abatement of, or right of offset against, the Rents payable under any Lease, in either case as a result thereof, and provided, further, that any new Building Equipment acquired by Borrower or Operating Lessee (and not so disposedof) shall be subject to the Lien of the Security Instrument. Lender shall, from time to time, upon receipt of an Officer’s Certificate requesting the same and confirming satisfaction of the conditions set forth above, execute a writteninstrument in form reasonably satisfactory to Lender to confirm that such Building Equipment which is to be, or has been, sold or disposed of is free from the Lien of the Security Instrument. 

**Section 8.3 Immaterial Transfers and Easements, etc.** Borrower and Operating Lessee may, without the consent of Lender,(i) make immaterial Transfers of portions of the Property to Governmental Authorities for dedication or public use (subject to the provisions of Section 6.2) or, portions of the Property to third parties for the purpose of erectingand operating additional structures whose use is integrated with the use of the Property, and (ii) grant easements, restrictions, covenants, reservations and rights of way in the ordinary course of business for access, water and sewer lines,telephone and telegraph lines, electric lines or other utilities or for other similar purposes, provided that no such Transfer, conveyance or encumbrance set forth in the foregoing clauses (i) and (ii) shall materially impair the utilityand operation of the Property or have a Material Adverse Effect on the value of the Property taken as a whole. In connection with any Transfer permitted pursuant to this Section 8.3, Lender shall execute and deliver any instrumentreasonably necessary or appropriate, in the case of the Transfers referred to in clause (i) above, to release the portion of the Property affected by such Condemnation or such Transfer from the Lien of the Security Instrument or, in the case ofclause (ii) above, to subordinate the Lien of the Security Instrument to such easements, restrictions, covenants, reservations and rights of way or other similar grants upon receipt by Lender of: 

(a) thirty (30) days prior written notice thereof; 

(b) a copy of the instrument or instruments of Transfer; 

(c) an Officer’sCertificate stating (x) with respect to any Transfer, the consideration, if any, being paid for the Transfer and (y) that such Transfer does not materially impair the utility and operation of the Property, materially reduce the value ofthe Property or have a Material Adverse Effect; and 

(d) reimbursement of all of Lender’s reasonable costs and expensesincurred in connection with such Transfer. 

**Section 8.4 Transfers of Interests in Borrower**. In addition to anytransfer permitted by any other provision of this Article VIII, each holder of any direct or indirect interest in the Borrower shall have the right to transfer (but not pledge, hypothecate or encumber) its equity interest in the Borrower toany Person who is not a Disqualified Transferee without Lender’s consent or a Rating Agency Confirmation if Section 8.6 is complied with and, after giving effect to such transfer: 

(a) (i) the Property will be directly owned by a Single Purpose Entity in compliance with the representations, warranties and covenantsin Section 4.1.29 hereof (as if the Borrower shall have remade all of such representations, warranties and covenants as of, and after giving effect to, the transfer), and which shall have executed and delivered to Lender an assumptionagreement in form and substance acceptable to Lender, evidencing the continuing agreement of the Borrower to abide and be bound by all the terms, covenants and conditions set forth in this Agreement, the Note, the Security Instrument and the otherLoan Documents and all other outstanding obligations under the Loan, together with such legal opinions and title insurance endorsements as may be reasonably requested by Lender; 

 

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(b) an Acceptable Manager shall continue to act as Manager for the Property pursuant to theexisting Management Agreement or an Acceptable Management Agreement; 

(c) Any Ultimate Equity Owners or a Close Affiliate ofany such entity owns directly or indirectly at least fifty-one percent (51%) of the equity interests in the Borrower and the Person that is the proposed transferee is not a Disqualified Transferee; provided that, after giving effect to any suchtransfer, in no event shall any Person other than Ultimate Equity Owner or a Close Affiliate of Ultimate Equity Owner exercise Management Control over the Borrower. In the event that Management Control shall be exercisable jointly by any UltimateEquity Owner or a Close Affiliate of any Ultimate Equity Owner with any other Person or Persons, then the applicable Ultimate Equity Owner or such Close Affiliate shall be deemed to have Management Control only if such Ultimate Equity Owner or suchClose Affiliate retains the ultimate right as between such Ultimate Equity Owner or such Close Affiliate and the transferee to unilaterally make all material decisions with respect to the operation, management, financing and disposition of theProperty; 

(d) if there has been a Transfer of forty-nine percent (49%) or more of the direct membership interests, stockor other direct equity ownership interests in Borrower, Borrower shall have first delivered to Lender (and, after a Securitization, the Rating Agencies) an Officer’s Certificate and legal opinion of the types described inSection 8.6 below; and 

(e) Borrower shall cause the transferee, if Lender so requests and if such transferee isrequired to be a Single Purpose Entity pursuant to this Agreement, to deliver to S&P and to any other Rating Agency Lender requests its organizational documents solely for the purpose of Standard & Poor’s and such other RatingAgency Lender requests confirming that such organizational documents comply with the single purpose bankruptcy remote entity requirements set forth herein. 

**Section 8.5 Loan Assumption**. Without limiting the foregoing, Borrower and Operating Lessee shall have the right to sell, assign, convey or transfer (but not mortgage, hypothecate orotherwise encumber or grant a security interest in) legal or equitable title to all (but not less than all) of the Property only if: 

(a) after giving effect to the proposed transaction: 

the Property will be owned by a Single Purpose Entity whollyowned (directly or indirectly) by a Permitted Borrower Transferee, Permitted Borrower Transferee Alternative, 

 

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Pre-approved Transferee or such other entity (specifically approved in writing by both Lender and eachRating Agency) which will be in compliance with the representations, warranties and covenants contained in Section 4.1.29 hereof (as if such transferee shall have remade all of such representations, warranties and covenants as of, andafter giving effect to, the proposed transaction); such Single Purpose Entity shall have executed and delivered to Lender an assumption agreement and such other agreements as Lender may reasonably request (collectively, the “**AssumptionAgreement**”) in form and substance acceptable to Lender, evidencing the proposed transferee’s agreement to abide and be bound by all the terms, covenants and conditions set forth in this Agreement, the Note, the Security Instrumentand the other Loan Documents and all other outstanding obligations under the Loan; the Permitted Borrower Transferee, Permitted Borrower Transferee Alternative, Pre-approved Transferee or such other approved entity shall assume the obligations ofSponsor under the Loan Documents (and such Single Purpose Entity and the applicable Permitted Borrower Transferee, Permitted Borrower Transferee Alternative, Pre-approved Transferee or other approved entity shall thereafter be subject to theprovisions of this Article VIII), and the transferee shall cause to be delivered to Lender, such legal opinions and title insurance endorsements as may be reasonably requested by Lender; 

(i) an Acceptable Manager shall continue to act as Manager for the Property pursuant to the existing Management Agreement or an AcceptableManagement Agreement; and 

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

(b) the Assumption Agreement shall state the applicable transferee’s agreement to abide by and be bound by the terms in the Note (orsuch other promissory notes to be executed by the transferee, such other promissory note or notes to be on the same terms as the Note), the Security Instrument, this Agreement (or such other loan agreement to be executed by such transferee, whichshall contain terms substantially identical to the terms hereof) and such other Loan Documents (or other loan documents to be delivered by such transferee, which shall contain terms substantially identical to the terms of the applicable LoanDocuments) whenever arising, and Borrower, and/or such transferee shall deliver such legal opinions and title insurance endorsements as may reasonably be requested by Lender; 

(c) following execution of a contract for the sale of the Property and not less than thirty (30) days prior to the expected date ofsuch proposed sale, Borrower shall submit notice of such sale to Lender. Borrower shall submit to Lender, not less than ten (10) days prior to the expected date of such sale, the Assumption Agreement for execution by Lender. Such documentsshall be in a form appropriate for the jurisdiction in which the Property is located and shall be reasonably satisfactory to Lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrowerin connection with such assumption, together with an Officer’s Certificate certifying that (i) the assumption to be effected will be effected in compliance with the terms of this Agreement and (ii) will not impair or otherwiseadversely affect the validity or priority of the Lien of the Security Instrument; 

(d) prior to any such transaction, theproposed transferee shall deliver to Lender an Officer’s Certificate stating that (x) such transferee is not an “employee benefit plan” 

 

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within the meaning of Section 3(3) of ERISA that is subject Title I of ERISA or any other SimilarLaw and (y) the underlying assets of the proposed transferee do not constitute assets of any such employee benefit plan for purposes of ERISA or any Similar Law; 

(e) if the transfer is to (i) an entity other than a Single Purpose Entity wholly owned directly or indirectly by one or more Pre-approved Transferees, Permitted Borrower Transferees or PermittedBorrower Transferee Alternatives, a Rating Agency Confirmation shall have been received in respect of such proposed transfer (or, if the proposed transfer shall occur prior to a Securitization, such transfer shall be subject to Lender’s consentin its sole discretion) and (ii) a Permitted Borrower Transferee Alternative, such transfer shall be subject to Lender’s prior written consent in its reasonable discretion; 

(f) the terms of Section 8.6 shall be complied with and Borrower shall cause the transferee to deliver to S&P and to anyother Rating Agency Lender requests its organizational documents solely for the purpose of S&P and any other Rating Agency Lender requests confirming that such organizational documents comply with the single purpose bankruptcy remote entityrequirements set forth herein; and 

(g) Lender shall have received the payment of, or reimbursement for, all reasonable costsand expenses incurred by Lender and the Rating Agencies (and any servicer in connection with a Securitization) in connection therewith (including, without limitation, reasonable attorneys’ fees and disbursements). 

**Section 8.6 Notice Required; Legal Opinions.** Not less than five (5) Business Days prior to the closing of any transactionpermitted under the provisions of Sections 8.2 through 8.5, Borrower shall deliver or cause to be delivered to Lender (A) an Officer’s Certificate describing the proposed transaction and stating that such transaction ispermitted hereunder and under the other Loan Documents, together with any documents upon which such Officer’s Certificate is based, and (B) a legal opinion of counsel to Borrower or the transferee selected by either of them (to the extentapproved by Lender and the Rating Agencies), in form and substance consistent with similar opinions then being required by the Rating Agencies and acceptable to the Rating Agencies, confirming, among other things, that the assets of the Borrower,and of its managing general partner or managing member, as applicable, will not be substantively consolidated with the assets of such owners or Controlling Persons of the Borrower as Lender or the Rating Agencies may specify, in the event of abankruptcy or similar proceeding involving such owners or Controlling Persons. 

**Section 8.7 Leases.**

**8.7.1 New Leases and Lease Modifications.** Except as otherwise provided in this Section 8.7, Borrower shall notand shall not permit Operating Lessee to (i) enter into any Lease on terms other than “market” and rental rates (in Borrower’s or Operating Lessee’s good faith judgment), or (ii) enter into any Material Lease (a“**New Lease**”), or (iii) consent to the assignment of any Material Lease (unless required to do so by the terms of such Material Lease) that releases the original Tenant from its obligations under the Material Lease, or(iv) modify any Material Lease (including, without limitation, accept a surrender of any portion of the Property subject to a Material Lease (unless otherwise permitted or required 

 

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by law), allow a reduction in the term of any Material Lease or a reduction in the Rent payable under anyMaterial Lease, change any renewal provisions of any Material Lease, materially increase the obligations of the landlord or materially decrease the obligations of any Tenant) or terminate any Material Lease (any such action referred to inclauses (iii) and (iv) being referred to herein as a **“****Lease Modification****”**) without the prior written consent of Lender which consent shall not be unreasonably withheld, delayed or conditioned. Any NewLease or Lease Modification that requires Lender’s consent shall be delivered to Lender for approval not less than ten (10) Business Days prior to the effective date of such New Lease or Lease Modification. Lender acknowledges and consentsto the termination of the Gift Shop Lease effective on or about October 1, 2006. 

**8.7.2 LeasingConditions**. Subject to terms of this Section 8.7, provided no Event of Default shall have occurred and be continuing, Borrower may enter into a New Lease or Lease Modification, without Lender’s prior written consent, thatsatisfies each of the following conditions (as evidenced by an Officer’s Certificate delivered to Lender prior to Borrower’s entry into such New Lease or Lease Modification): 

(a) with respect to a New Lease or Lease Modification, the premises demised thereunder is not more than 10,000 net rentable square feet ofthe Property; 

(b) the term of such New Lease or Lease Modification, as applicable, does not exceed 120 months, plus up totwo (2) 60-month option terms (or equivalent combination of renewals); 

(c) the New Lease or Lease Modification providesfor “market” rental rates other terms and does not contain any terms which would adversely affect Lender’s rights under the Loan Documents or that would have a Material Adverse Effect; 

(d) the New Lease or Lease Modification, as applicable, provides that the premises demised thereby cannot be used for any of the followinguses: any pornographic or obscene purposes, any commercial sex establishment, any pornographic, obscene, nude or semi-nude performances, modeling, materials, activities or sexual conduct or any other use that has or could reasonably be expected tohave a Material Adverse Effect; 

(e) the Tenant under such New Lease or Lease Modification, as applicable, is not an Affiliateof Borrower; 

(f) the New Lease or Lease Modification, as applicable, does not prevent Proceeds from being held and disbursedby Lender in accordance with the terms hereof and does not entitle any Tenant to receive and retain Proceeds except those that may be specifically awarded to it in condemnation proceedings because of the Condemnation of its trade fixtures and itsleasehold improvements which have not become part of the Property and such business loss as Tenant may specifically and separately establish; and 

(g) the New Lease or Lease Modification, as applicable satisfies the requirements of Section 8.7.7 and Section 8.7.8. 

 

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**8.7.3. Delivery of New Lease or Lease Modification**. Upon the execution of anyNew Lease or Lease Modification, as applicable, Borrower shall deliver to Lender an executed copy of the Lease. 

**8.7.4Lease Amendments.** Borrower agrees that it shall not have the right or power, as against Lender without its consent, to cancel, abridge, amend or otherwise modify any Lease unless such modification complies with thisSection 8.7. 

**8.7.5 Security Deposits.** All security or other deposits of Tenants of the Propertyshall be treated as trust funds and shall, if required by law or the applicable Lease not be commingled with any other funds of Borrower, and such deposits shall be deposited, upon receipt of the same by Borrower in a separate trust accountmaintained by Borrower expressly for such purpose. Within ten (10) Business Days after written request by Lender, Borrower shall furnish to Lender reasonably satisfactory evidence of compliance with this Section 8.7.5, together witha statement of all lease securities deposited with Borrower by the Tenants and the location and account number of the account in which such security deposits are held. 

**8.7.6 No Default Under Leases.** Borrower shall (i) promptly perform and observe all of the material terms, covenants and conditions required to be performed and observed by Borrowerunder the Leases, if the failure to perform or observe the same would have a Material Adverse Effect; (ii) exercise, within ten (10) Business Days after a written request by Lender, any right to request from the Tenant under any Lease acertificate with respect to the status thereof and (iii) not collect any of the Rents, more than one (1) month in advance (except that Borrower may collect such security deposits and last month’s Rents as are permitted by LegalRequirements and are commercially reasonable in the prevailing market and collect other charges in accordance with the terms of each Lease). 

**8.7.7 Subordination.** All Lease Modifications and New Leases entered into by Borrower after the date hereof shall by their express terms be subject and subordinate to this Agreement and theSecurity Instrument (through a subordination provision contained in such Lease or otherwise) and shall provide that, if Lender agrees to a non-disturbance provision pursuant to Section 8.7.9, the Person holding any rights thereundershall attorn to Lender or any other Person succeeding to the interests of Lender upon the exercise of its remedies hereunder or any transfer in lieu thereof on the terms set forth in this Section 8.7. 

**8.7.8 Attornment.** Each Lease Modification and New Lease entered into from and after the date hereof shall provide that in theevent of the enforcement by Lender of any remedy under this Agreement or the Security Instrument, if Lender agrees to a non-disturbance provision pursuant to Section 8.7.9, the Tenant under such Lease shall, at the option of Lender or ofany other Person succeeding to the interest of Lender as a result of such enforcement, attorn to Lender or to such Person and shall recognize Lender or such successor in the interest as lessor under such Lease without change in the provisionsthereof; provided, however, Lender or such successor in interest shall not be liable for or bound by (i) any payment of an installment of rent or additional rent made more than thirty (30) days before the due date of suchinstallment, (ii) any act or omission of or default by Borrower under any such Lease (but the Lender, or such successor, shall be subject to the continuing obligations of the landlord to the extent arising from and after such succession to theextent of Lender’s, or such successor’s, 

 

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interest in the Property), (iii) any credits, claims, setoffs or defenses which any Tenant may haveagainst Borrower, (iv) any obligation on Borrower’s part, pursuant to such Lease, to perform any tenant improvement work or (v) any obligation on Borrower’s part, pursuant to such Lease, to pay any sum of money to any Tenant.Each such New Lease shall also provide that, upon the reasonable request by Lender or such successor in interest, the Tenant shall execute and deliver an instrument or instruments confirming such attornment. 

**8.7.9 Non-Disturbance Agreements.** Lender shall enter into, and, if required by applicable law to provide constructive noticeor requested by a Tenant, record in the county where the subject Property is located, a subordination, attornment and non-disturbance agreement, substantially in form and substance substantially similar to the form attached hereto as**Exhibit K** (a “**Non-Disturbance Agreement**”), with any Tenant (other than an Affiliate of Borrower) entering into a New Lease permitted hereunder or otherwise consented to by Lender within ten (10)Business Days after written request therefor by Borrower, provided that, such request is accompanied by an Officer’s Certificate stating that such Lease complies in all material respects with this Section 8.7. All reasonable thirdparty costs and expenses incurred by Lender in connection with the negotiation, preparation, execution and delivery of any Non-Disturbance Agreement, including, without limitation, reasonable attorneys’ fees and disbursements, shall be paid byBorrower (in advance, if requested by Lender). 

**8.7.10 Approvals for Retail/service Facilities.** Notwithstandinganything contained herein (i) approvals will not be required for termination of the Gift Shop Lease and any similar gift shop or other miscellaneous space in lobby or similar locations, and (ii) provided the other requirements ofSection 8.7.2 on New Leases and Lease Modifications are otherwise satisfied, the restriction therein on New Leases or Lease Modifications with Affiliates will not apply to New Leases or Lease Modifications relating to portions of theProperty used for retail or service facilities (“**Retail/Service Facilities**”). 

**IX. INTEREST RATECAP AGREEMENT**

**Section 9.1 Interest Rate Cap Agreement.** Borrower shall maintain the Interest Rate CapAgreement with an Acceptable Counterparty in effect and having a term extending through the last day of the accrual period in which the applicable Maturity Date occurs, and an initial notional amount equal to the Loan Amount. The Interest Rate CapAgreement shall have a strike rate equal to the LIBOR Cap Strike Rate. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan made in accordance withthe Loan Documents, provided that the strike rate shall be equal to the LIBOR Cap Strike Rate. 

**Section 9.2 Pledge andCollateral Assignment.** Borrower hereby pledges, assigns, transfers, delivers and grants a continuing first priority lien to Lender, as security for payment of all sums due in respect of the Loan and the performance of all other terms,conditions and covenants of this Agreement and any other Loan Document on Borrower’s part to be paid and performed, in, to and under all of Borrower’s right, title and interest whether now owned or hereafter acquired and whether nowexisting or hereafter arising (collectively, the “**Rate Cap Collateral**”): (i) in the Interest Rate Cap Agreement (as soon as such agreement is effective or when and if any replacement agreement becomes effective, anyReplacement Interest Rate Cap 

 

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Agreement or Extension Interest Rate Cap Agreement); (ii) to receive any and all payments under theInterest Rate Cap Agreement (or, when and if any such agreement becomes effective, any Replacement Interest Rate Cap Agreement or Extension Interest Rate Cap Agreement), whether as contractual obligations, damages or otherwise; and (iii) to allclaims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under or arising out of the Interest Rate Cap Agreement (as soon as such agreement is effective or when and if any such agreement becomeseffective, any Replacement Interest Rate Cap Agreement or Extension Interest Rate Cap Agreement), in each case including all accessions and additions to, substitutions for and replacements, products and proceeds of any of the foregoing. Borrowershall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement, Replacement Interest Rate Cap Agreement or Extension Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require thatpayments be made directly to Lender) and notify the Counterparty of such assignment (either in such Interest Rate Cap Agreement, Replacement Interest Rate Cap Agreement or Extension Interest Rate Cap Agreement or by separate instrument). Borrowershall not, without obtaining the prior written consent of Lender, further pledge, transfer, deliver, assign or grant any security interest in the Interest Rate Cap Agreement (or, when and if any such agreement becomes effective, any ReplacementInterest Rate Cap Agreement or Extension Interest Rate Cap Agreement), or permit any Lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements or any other notice or instrument as may be required underthe UCC, as appropriate, except those naming Lender as the secured party, to be filed with respect thereto. 

**Section 9.3Covenants.** (a) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall bedeposited immediately into the Holding Account pursuant to Section 3.1. Borrower shall take all actions reasonably requested by Lender to enforce Borrower’s rights under the Interest Rate Cap Agreement in the event of a default bythe Counterparty thereunder and shall not waive, amend or otherwise modify any of its rights thereunder. 

(b) Borrower shalldefend Lender’s right, title and interest in and to the Rate Cap Collateral pledged by Borrower pursuant hereto or in which it has granted a security interest pursuant hereto against the claims and demands of all other Persons. 

In the event of (x) any downgrade, withdrawal or qualification (each, a “**Downgrade**”) of the rating of theCounterparty such that, thereafter, the Counterparty shall cease to be an Acceptable Counterparty and (y) the Counterparty shall fail to comply with the requirements contained in the Interest Rate Cap Agreement which are described in“**Exhibit I**” upon such occurrence, the Borrower shall either (i) obtain a Rating Agency Confirmation with respect to the Counterparty or (ii) replace the Interest Rate Cap Agreement with a Replacement InterestCap Agreement, (x) having a term extending through the end of the Interest Period in which the Maturity Date occurs, (y) in a notional amount at least equal to the Principal Amount of the Loan then outstanding, and (z) having a strikerate equal to the LIBOR Cap Strike Rate. 

(c) In the event that Borrower fails to purchase and deliver to Lender the InterestRate Cap Agreement as and when required hereunder, Lender may purchase the Interest Rate Cap Agreement and the cost incurred by Lender in purchasing the Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at theDefault Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender. 

 

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(d) Borrower shall not (i) without the prior written consent of Lender, modify, amendor supplement the terms of the Interest Rate Cap Agreement, (ii) without the prior written consent of Lender, except in accordance with the terms of the Interest Rate Cap Agreement, cause the termination of the Interest Rate Cap Agreement priorto its stated maturity date, (iii) without the prior written consent of Lender, except as aforesaid, waive or release any obligation of the Counterparty (or any successor or substitute party to the Interest Rate Cap Agreement) under theInterest Rate Cap Agreement, (iv) without the prior written consent of Lender, consent or agree to any act or omission to act on the part of the Counterparty (or any successor or substitute party to the Interest Rate Cap Agreement) which,without such consent or agreement, would constitute a default under the Interest Rate Cap Agreement, (v) fail to exercise promptly and diligently each and every material right which it may have under the Interest Rate Cap Agreement,(vi) take or intentionally omit to take any action or intentionally suffer or permit any action to be omitted or taken, the taking or omission of which would result in any right of offset against sums payable under the Interest Rate CapAgreement or any defense by the Counterparty (or any successor or substitute party to the Interest Rate Cap Agreement) to payment or (vii) fail to give prompt notice to Lender of any notice of default given by or to Borrower under or withrespect to the Interest Rate Cap Agreement, together with a complete copy of such notice. If Borrower shall have received written notice that the Securitization shall have occurred, no consent by Lender provided for in thisSection 9.3(e) shall be given by Lender unless Lender shall have received a Rating Agency Confirmation. 

Inconnection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an Opinion of Counsel from counsel (which counsel may be in-house counsel for the Counterparty) for the Counterparty upon which Lender and its successors andassigns may rely (the **“****Counterparty Opinion****”**), under New York law and, if the Counterparty is a non-U.S. entity, the applicable foreign law, substantially in compliance with the requirements set forth in**Exhibit F** or in such other form approved by the Lender. 

**Section 9.4 Representations andWarranties**. Borrower hereby covenants with, and represents and warrants to, Lender as follows: 

(a) The Interest RateCap Agreement constitutes the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, andsubject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). 

(b) The Rate Cap Collateral is free and clear of all claims or security interests of every nature whatsoever, except such as are created pursuant to this Agreement and the other Loan Documents, andBorrower has the right to pledge and grant a security interest in the same as herein provided without the consent of any other Person other than any such consent that has been obtained and is in full force and effect. 

 

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(c) The Rate Cap Collateral has been duly and validly pledged hereunder. All consents andapprovals required to be obtained by Borrower for the consummation of the transactions contemplated by this Agreement have been obtained. 

(d) Giving effect to the aforesaid grant and assignment to Lender, Lender has, as of the date of this Agreement, and as to Rate Cap Collateral acquired from time to time after such date, shall have, avalid, and upon proper filing, perfected and continuing first priority lien upon and security interest in the Rate Cap Collateral; provided that no representation or warranty is made with respect to the perfected status of the security interest ofLender in the proceeds of Rate Cap Collateral consisting of “cash proceeds” or “non-cash proceeds” as defined in the UCC except if, and to the extent, the provisions of Section 9-306 of the UCC shall be complied with.

(e) Except for financing statements filed or to be filed in favor of Lender as secured party, there are no financingstatements under the UCC covering any or all of the Rate Cap Collateral and Borrower shall not, without the prior written consent of Lender, until payment in full of all of the Obligations, execute and file in any public office, any enforceablefinancing statement or statements covering any or all of the Rate Cap Collateral, except financing statements filed or to be filed in favor of Lender as secured party. 

**Section 9.5 Payments.** If Borrower at any time shall be entitled to receive any payments with respect to the Interest Rate Cap Agreement, such amounts shall, immediately upon becoming payableto Borrower, be deposited by Counterparty into the Holding Account. 

**Section 9.6 Remedies**. Subject to theprovisions of the Interest Rate Cap Agreement, if an Event of Default shall occur and then be continuing: 

(a) Lender, withoutobligation to resort to any other security, right or remedy granted under any other agreement or instrument, shall have the right to, in addition to all rights, powers and remedies of a secured party pursuant to the UCC, at any time and from time totime, sell, resell, assign and deliver, in its sole discretion, any or all of the Rate Cap Collateral (in one or more parcels and at the same or different times) and all right, title and interest, claim and demand therein and right of redemptionthereof, at public or private sale, for cash, upon credit or for future delivery, and in connection therewith Lender may grant options and may impose reasonable conditions such as requiring any purchaser to represent that any “securities”constituting any part of the Rate Cap Collateral are being purchased for investment only, Borrower hereby waiving and releasing any and all equity or right of redemption to the fullest extent permitted by the UCC or applicable law. If all or any ofthe Rate Cap Collateral is sold by Lender upon credit or for future delivery, Lender shall not be liable for the failure of the purchaser to purchase or pay for the same and, in the event of any such failure, Lender may resell such Rate CapCollateral. It is expressly agreed that Lender may exercise its rights with respect to less than all of the Rate Cap Collateral, leaving unexercised its rights with respect to the remainder of the Rate Cap Collateral, provided,however, that such partial exercise shall in no way restrict or jeopardize Lender’s right to exercise its rights with respect to all or any other portion of the Rate Cap Collateral at a later time or times. 

 

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(b) Lender may exercise, either by itself or by its nominee or designee, in the name ofBorrower, all of Lender’s rights, powers and remedies in respect of the Rate Cap Collateral, hereunder and under law. 

(c) Borrower hereby irrevocably, in the name of Borrower or otherwise, authorizes and empowers Lender and assigns and transfers unto Lender, and constitutes and appoints Lender its true and lawful attorney-in-fact, and as its agent,irrevocably, with full power of substitution for Borrower and in the name of Borrower, upon the occurrence and during the continuance of an Event of Default, (i) to exercise and enforce every right, power, remedy, authority, option andprivilege of Borrower under the Interest Rate Cap Agreement, including any power to subordinate or modify the Interest Rate Cap Agreement (but not, unless an Event of Default exists and is continuing, the right to terminate or cancel the InterestRate Cap Agreement), or to give any notices, or to take any action resulting in such subordination, termination, cancellation or modification and (ii) in order to more fully vest in Lender the rights and remedies provided for herein, toexercise all of the rights, remedies and powers granted to Lender in this Agreement, and Borrower further authorizes and empowers Lender, as Borrower’s attorney-in-fact, and as its agent, irrevocably, with full power of substitution forBorrower and in the name of Borrower, upon the occurrence and during the continuance of an Event of Default, to give any authorization, to furnish any information, to make any demands, to execute any instruments and to take any and all other actionon behalf of and in the name of Borrower which in the opinion of Lender may be necessary or appropriate to be given, furnished, made, exercised or taken under the Interest Rate Cap Agreement, in order to comply therewith, to perform the conditionsthereof or to prevent or remedy any default by Borrower thereunder or to enforce any of the rights of Borrower thereunder. These powers-of-attorney are irrevocable and coupled with an interest, and any similar or dissimilar powers heretofore givenby Borrower in respect of the Rate Cap Collateral to any other Person are hereby revoked. 

(d) Upon the occurrence and duringthe continuance of an Event of Default, Lender may, without notice to, or assent by, Borrower or any other Person (to the extent permitted by law), but without affecting any of the Obligations, in the name of Borrower or in the name of Lender,notify the Counterparty, or if applicable, any other counterparty to the Interest Rate Cap Agreement, to make payment and performance directly to Lender; extend the time of payment and performance of, compromise or settle for cash, credit orotherwise, and upon any terms and conditions, any obligations owing to Borrower, or claims of Borrower, under the Interest Rate Cap Agreement; file any claims, commence, maintain or discontinue any actions, suits or other proceedings deemed byLender necessary or advisable for the purpose of collecting upon or enforcing the Interest Rate Cap Agreement; and execute any instrument and do all other things deemed necessary and proper by Lender to protect and preserve and realize upon the RateCap Collateral and the other rights contemplated hereby. 

(e) Pursuant to the powers-of-attorney provided for above, Lendermay take any action and exercise and execute any instrument which it may deem necessary or advisable to accomplish the purposes hereof; provided, however, that Lender shall not be permitted to take any action pursuant to saidpower-of-attorney that would conflict with any limitation on Lender’s rights with respect to the Rate Cap Collateral. Without limiting the generality of the foregoing, Lender, after the occurrence of an Event of Default, shall have the rightand power to receive, endorse and collect all checks and other orders for the payment of money made payable to 

 

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Borrower representing: (i) any payment of obligations owed pursuant to the Interest Rate Cap Agreement,(ii) interest accruing on any of the Rate Cap Collateral or (iii) any other payment or distribution payable in respect of the Rate Cap Collateral or any part thereof, and for and in the name, place and stead of Borrower, to executeendorsements, assignments or other instruments of conveyance or transfer in respect of any property which is or may become a part of the Rate Cap Collateral hereunder. 

(f) Lender may exercise all of the rights and remedies of a secured party under the UCC. 

(g) Without limiting any other provision of this Agreement or any of Borrower’s rights hereunder, and without waiving or releasing Borrower from any obligation or default hereunder, Lender shall have the right, but not the obligation,to perform any act or take any appropriate action, as it, in its reasonable judgment, may deem necessary to protect the security of this Agreement, to cure such Event of Default or to cause any term, covenant, condition or obligation required underthis Agreement or the Interest Rate Cap Agreement to be performed or observed by Borrower to be promptly performed or observed on behalf of Borrower. All amounts advanced by, or on behalf of, Lender in exercising its rights under thisSection 9.7(g) (including, but not limited to, reasonable legal expenses and disbursements incurred in connection therewith), together with interest thereon at the Default Rate from the date of each such advance, shall be payable byBorrower to Lender upon demand and shall be secured by this Agreement. 

**Section 9.7 Sales of Rate CapCollateral**. No demand, advertisement or notice, all of which are, to the fullest extent permitted by law, hereby expressly waived by Borrower, shall be required in connection with any sale or other disposition of all or any part of the RateCap Collateral, except that Lender shall give Borrower at least thirty (30) Business Days’ prior written notice of the time and place of any public sale or of the time when and the place where any private sale or other disposition is to bemade, which notice Borrower hereby agrees is reasonable, all other demands, advertisements and notices being hereby waived. To the extent permitted by law, Lender shall not be obligated to make any sale of the Rate Cap Collateral if it shalldetermine not to do so, regardless of the fact that notice of sale may have been given, and Lender may without notice or publication adjourn any public or private sale, and such sale may, without further notice, be made at the time and place towhich the same was so adjourned. Upon each private sale of the Rate Cap Collateral of a type customarily sold in a recognized market and upon each public sale, unless prohibited by any applicable statute which cannot be waived, Lender (or itsnominee or designee) may purchase any or all of the Rate Cap Collateral being sold, free and discharged from any trusts, claims, equity or right of redemption of Borrower, all of which are hereby waived and released to the extent permitted by law,and may make payment therefor by credit against any of the Obligations in lieu of cash or any other obligations. In the case of all sales of the Rate Cap Collateral, public or private, Borrower shall pay all reasonable costs and expenses of everykind for sale or delivery, including brokers’ and attorneys’ fees and disbursements and any tax imposed thereon. However, the proceeds of sale of Rate Cap Collateral shall be available to cover such costs and expenses, and, after deductingsuch costs and expenses from the proceeds of sale, Lender shall apply any residue to the payment of the Obligations in the order of priority as set forth in Section 11 of the Security Instrument. 

 

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**Section 9.8 Public Sales Not Possible**. Borrower acknowledges that the terms ofthe Interest Rate Cap Agreement may prohibit public sales, that the Rate Cap Collateral may not be of the type appropriately sold at public sales, and that such sales may be prohibited by law. In light of these considerations, Borrower agrees thatprivate sales of the Rate Cap Collateral shall not be deemed to have been made in a commercially unreasonably manner by mere virtue of having been made privately. 

**Section 9.9 Receipt of Sale Proceeds**. Upon any sale of the Rate Cap Collateral by Lender hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process orotherwise), the receipt by Lender or the officer making the sale or the proceeds of such sale shall be a sufficient discharge to the purchaser or purchasers of the Rate Cap Collateral so sold, and such purchaser or purchasers shall not be obligatedto see to the application of any part of the purchase money paid over to Lender or such officer or be answerable in any way for the misapplication or non-application thereof. 

**Section 9.10 Extension Interest Rate Cap Agreement**. If Borrower exercises any of its options to extend the Maturity Datepursuant to Section 5 of the Note, then, on or prior to the Maturity Date being extended, the Borrower shall obtain or have in place an Extension Interest Rate Cap Agreement (i) having a term through the end of the Interest Periodin which the extended Maturity Date occurs, (ii) in a notional amount at least equal to the Principal Amount of the Loan as of the Maturity Date being extended, and (iii) having a strike rate equal to an amount such that the maximuminterest rate paid by the Borrower after giving effect to payments made under such Extension Interest Rate Cap Agreement shall equal no more than the LIBOR Cap Strike Rate. 

**Section 9.11 Filing of Financing Statements Authorized**. Borrower and Operating Lessee hereby authorize the filing of a formUCC-1 financing statement naming the Borrower and the Operating Lessee as debtors and the Lender as secured party in any office (including the office of the Secretary of State of the State of Delaware) covering all property of the Borrower and theOperating Lessee (including, but not limited to, the Account Collateral and the Rate Cap Collateral, but excluding Excess Cash Flow). 

**X. MAINTENANCE OF PROPERTY; ALTERATIONS**

**Section 10.1 Maintenance of Property**. Borrowershall keep and maintain, or cause to be kept and maintained, the Property and every part thereof in good condition and repair, subject to ordinary wear and tear, and, subject to Excusable Delays and the provisions of this Agreement with respect todamage or destruction caused by a Casualty or Condemnation, shall not permit or commit any waste, impairment, or deterioration of any portion of the Property in any material respect. Borrower further covenants to do all other acts which from thecharacter or use of the Property may be reasonably necessary to protect the security hereof, the specific enumerations herein not excluding the general. Borrower shall not demolish any Improvement on the Property except as the same may be necessaryin connection with an Alteration or a restoration in connection with a Condemnation or Casualty, or as otherwise permitted herein, in each case in accordance with the terms and conditions hereof. 

 

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**Section 10.2 Alterations and Expansions**. Borrower shall not perform orundertake or consent to the performance or undertaking of any Alteration or Expansion, except in accordance with the following terms and conditions: 

(a) The Alteration or Expansion shall be undertaken in accordance with the applicable provisions of this Agreement, the other Loan Documents, the Leases and all Legal Requirements. 

(b) No Event of Default shall have occurred and be continuing or shall occur as a result of such action. 

(c) A Material Alteration or Material Expansion, to the extent architects are customarily used for alterations or expansions of those types,but including any structural change to any of the Property or the Improvements, shall be conducted under the supervision of an Independent Architect and shall not be undertaken until ten (10) Business Days after there shall have been filed withLender, for information purposes only and not for approval by Lender, detailed plans and specifications and cost estimates therefor, prepared and approved in writing by such Independent Architect. Such plans and specifications may be revised at anytime and from time to time, provided that revisions of such plans and specifications shall be filed with Lender, for information purposes only. 

(d) The Alteration or Expansion may not in and of itself, either during the Alteration or Expansion or upon completion, be reasonably expected to have a Material Adverse Effect with respect to theProperty. 

(e) All work done in connection with any Alteration or Expansion shall be performed with due diligence to FinalCompletion in a good and workmanlike manner, all materials used in connection with any Alteration or Expansion shall be not less than the standard of quality of the materials generally used at the Property as of the date hereof (or, if greater, thethen-current customary quality in the sub-market in which the Property is located) and all work shall be performed and all materials used in accordance with all applicable Legal Requirements and Insurance Requirements. 

(f) The cost of any Alteration or Expansion shall be promptly and fully paid for by Borrower, subject to the next succeeding sentence. Nopayment made prior to the Final Completion (excluding punch-list items) of an Alteration or Expansion or Restoration to any contractor, subcontractor, materialman, supplier, engineer, architect, project manager or other Person who renders servicesor furnishes materials in connection with such Alteration shall exceed ninety percent (90%) of the aggregate value of the work performed by such Person from time to time and materials furnished and incorporated into the Improvements.

(g) Intentionally Deleted. 

(h) With respect to any Material Alteration or Material Expansion: 

(i) Borrowershall have delivered to Lender Eligible Collateral in an amount equal to at least the total estimated remaining unpaid costs of such Material Alteration or Material Expansion which is in excess of the Threshold Amount, which Eligible Collateralshall 

 

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be held by Lender as security for the Indebtedness and released to Borrower as such work progresses inaccordance with Section 10.2(h)(iii); provided, however, in the event that any Material Alteration or Material Expansion shall be made in conjunction with any Restoration with respect to which Borrower shall be entitled touse or apply Proceeds pursuant to Section 6.2 hereof (including any Proceeds remaining after completion of such Restoration), the amount of the Eligible Collateral to be furnished pursuant hereto need not exceed the aggregate cost ofsuch Restoration and such Material Alteration or Material Expansion (in either case, as estimated by the Independent Architect) less the sum of the amount of any Proceeds which the Borrower is entitled to withdraw pursuant to Section 6.2hereof and the Threshold Amount; 

(ii) Prior to commencement of construction of such Material Alteration or MaterialExpansion, Borrower shall deliver to Lender a schedule (with the concurrence of the Independent Architect) setting forth the projected stages of completion of such Alteration or Expansion and the corresponding amounts expected to be due and payableby or on behalf of Borrower in connection with such completion, such schedule to be updated quarterly by Borrower (and with the concurrence of the Independent Architect) during the performance of such Alteration or Expansion. 

(iii) Any Eligible Collateral that a Borrower delivers to Lender pursuant hereto (and the proceeds of any such Eligible Collateral) shallbe invested (to the extent such Eligible Collateral can be invested) by Lender in Permitted Investments for a period of time consistent with the date on which the Borrower notifies Lender that the Borrower expects to request a release of suchEligible Collateral in accordance with the next succeeding sentence. From time to time as the Alteration or Expansion progresses, the amount of any Eligible Collateral so furnished may, upon the written request of Borrower to Lender, be withdrawn byBorrower and paid or otherwise applied by or returned to Borrower in an amount equal to the amount Borrower would be entitled to so withdraw if Section 6.2.4 were applicable, and any Eligible Collateral so furnished which is a Letter ofCredit may be reduced by Borrower in an amount equal to the amount Borrower would be entitled to so reduce if Section 6.2.4 hereof were applicable, subject, in each case, to the satisfaction of the conditions precedent to withdrawal offunds or reduction of the Letter of Credit set forth in Section 6.2.4 hereof. In connection with the above-described quarterly update of the projected stages of completion of the Material Alteration or Material Expansion (as concurredwith by an Independent Architect), Borrower shall increase (or be permitted to decrease, as applicable) the Eligible Collateral then deposited with Lender as necessary to comply with Section 10.2(h)(i) hereof. 

(iv) At any time after Final Completion of such Material Alterations or Material Expansions, the whole balance of any Cash deposited withLender pursuant to Section 10.2(h) hereof then remaining on deposit may be withdrawn by Borrower and shall be paid by Lender to Borrower, and any Eligible Collateral so deposited shall, to the extent it has not been called upon, reducedor theretofore released, be released by Lender to Borrower, within ten (10) days after receipt by Lender of an application for such withdrawal and/or release together with an Officer’s Certificate, and as to the following clauses (A)and (B) of this clause also a certificate of the Independent Architect, setting forth in substance as follows: 

(A) thatsuch Material Alteration(s) or Material Expansion(s) has been completed in all material respects in accordance with any plans and specifications therefor previously filed with Lender under Section 10.2(c) hereof; 

 

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(B) that to the knowledge of the certifying Person, (x) such Material Alteration(s) orMaterial Expansion(s) has been completed in compliance with all Legal Requirements, and (y) to the extent required for the legal use or occupancy of the portion of the Property affected by such Alteration(s) or Expansion(s), the applicableBorrower has obtained a temporary or permanent certificate of occupancy (or similar certificate) or, if no such certificate is required, a statement to that effect; 

(C) that to the knowledge of the certifying Person, all amounts that a Borrower is or may become liable to pay in respect of such Material Alteration(s) or Material Expansion(s) through the date of thecertification have been paid in full or adequately provided for and, to the extent that such are customary and reasonably obtainable by prudent property owners in the area where the applicable Property is located, that Lien waivers have beenobtained from the general contractor and subcontractors performing such Alteration(s) or Expansion(s) or at its sole cost and expense, Borrower shall cause a nationally recognized title insurance company to deliver to Lender an endorsement to theTitle Policy, updating such policy and insuring over such Liens without further exceptions to such policy other than Permitted Encumbrances, or shall, at its sole cost and expense, cause a reputable title insurance company to deliver alender’s title insurance policy, in such form, in such amounts and with such endorsements as the Title Policy, which policy shall be dated the date of completion of the Material Alteration and shall contain no exceptions other thanPermitted Encumbrances; provided, however, that if, for any reason, Borrower is unable to deliver the certification required by this clause (C) with respect to any costs or expenses relating to the Alteration(s) or Expansion(s),then, assuming Borrower is able to satisfy each of the other requirements set forth in clauses (A) and (B) above, Borrower shall be entitled to the release of the difference between the whole balance of such Eligible Collateral and thetotal of all costs and expenses to which Borrower is unable to certify; and 

(D) that to the knowledge of the certifyingPerson, no Event of Default has occurred and is continuing. 

**XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS ANDOTHER INFORMATION**

**Section 11.1 Books and Records**. Borrower shall keep and maintain on a fiscal yearbasis proper books and records separate from any other Person, in which accurate and complete entries shall be made of all dealings or transactions of or in relation to the Note, the Property and the business and affairs of Borrower and OperatingLessee relating to the Property which shall reflect all items of income and expense in connection with the operation on an individual basis of the Property and in connection with any services, equipment or furnishings provided in connection with theoperation of the Property, in accordance with GAAP. Lender and its authorized representatives shall have the right at reasonable times and upon reasonable notice to examine the books and records of Borrower and Operating Lessee relating to theoperation of the Property and to make such copies or extracts thereof as Lender may reasonably 

 

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require. Notwithstanding any other provision of this Agreement or any other Loan Document, so long as theBorrower and Operating Lessee otherwise comply with the foregoing provisions of this Section 11.1, any requirement for the presentation of audited financial statements or similar reports of the Borrower, the Property or the OperatingLessee shall be deemed satisfied if such audit financial statement or similar reports are contained in an audited financial statement or similar report which includes a separate combining schedule setting forth in reasonable detail the separatefinancial information which relates solely to the Borrower, the Operating Lessee and the Property. 

**Section 11.2Financial Statements.**

**11.2.1 Monthly Reports**. At the request of Lender, Borrower shall furnish toLender, within thirty (30) days after the end of each calendar month, unaudited operating statements, aged accounts receivable reports, rent rolls, STAR Reports and PACE Reports; occupancy and ADR reports for the Property, in each caseaccompanied by an Officer’s Certificate certifying (i) with respect to the operating statements, that to the Best of Borrower’s Knowledge and the best of such officer’s knowledge such statements are true, correct, accurate andcomplete and fairly present the results of the operations of Borrower and the Property, and (ii) with respect to the aged accounts receivable reports, rent rolls, occupancy and ADR reports, that such items are to the Best of Borrower’sKnowledge and the best of such officer’s knowledge true, correct and accurate and fairly present the results of the operations of Borrower and the Property. Borrower will also provide Lender copies of all flash reports within its possession asto monthly revenues of the Property upon request. 

**11.2.2 Quarterly Reports**. Borrower willfurnish, or cause to be furnished, to Lender on or before the forty-fifth (45th) day after the end of each Fiscal Quarter, the following items, accompanied by an Officer’s Certificate, certifying that to the Best of Borrower’s Knowledge and the best of suchofficer’s knowledge such items are true, correct, accurate and complete and fairly present the financial condition and results of the operations of Borrower and the Property in a manner consistent with GAAP (subject to normal periodicadjustments) to the extent applicable: 

(a) quarterly and year to date financial statements prepared for such fiscal quarterwith respect to the Borrower, including a balance sheet and operating statement for such quarter for the Borrower for such quarter; 

(b) occupancy levels at the Property for such period, including average daily room rates and the average revenue per available room; 

(c) concurrently with the provision of such reports, Borrower shall also furnish a report of Operating Income and Operating Expenses (as well as a calculation of Net Operating Income based thereon) withrespect to the Borrower and the Property for the most recently completed quarter; 

(d) a STAR Report and to the extentprovided by Manager a PACE Report for the most recently completed quarter; 

(e) a calculation of DSCR for the trailingfour (4) Fiscal Quarters; and 

 

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(f) to the extent provided by Manager a report of aged accounts receivable relating to theProperty as of the most recently completed quarter and a list of Security Deposits and the aggregate amount of all Security Deposits. 

**11.2.3 Annual Reports**. Borrower shall furnish to Lender within ninety (90) days following the end of each Fiscal Year a complete copy of the annual financial statements of the Borrower, audited by a “Big Four”accounting firm or another independent certified public accounting firm acceptable to Lender in accordance with GAAP for such Fiscal Year and containing a balance sheet, a statement of operations and a statement of cash flows. The annual financialstatements of the Borrower shall be accompanied by (i) an Officer’s Certificate certifying that each such annual financial statement presents fairly, in all material respects, the financial condition and results of operation of theProperty and has been prepared in accordance with GAAP and (ii) a management report, in form and substance reasonably satisfactory to Lender, discussing the reconciliation between the financial statements for such Fiscal Year and the mostrecent Budget. Together with the Borrower’s annual financial statements, the Borrower shall furnish to Lender (A) an Officer’s Certificate certifying as of the date thereof whether, to Borrower’s knowledge, there exists a Defaultor Event of Default, 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; and (B) an annual report, for the most recently completed fiscalyear, containing: 

 
 (1)Capital Expenditures (including for this purpose any and all additions to, and replacements of, FF&E,) made in respect of the Property, including separate lineitems with respect to any project costing in excess of $500,000; 
 
 (2)occupancy levels for the Property for such period; and 
 
 (3)average daily room rates at the Property for such period. 
**11.2.4 Leasing Reports**. Not later than forty-five (45) days after the end of each fiscal quarter of Borrower’s operations, Borrower shall deliver to Lender a true and complete rentroll for the Property, dated as of the last month of such fiscal quarter, showing the percentage of gross leasable area of the Property, if any, leased as of the last day of the preceding calendar quarter, the current annual rent for the Property,the expiration date of each Lease, whether to Borrower’s knowledge any portion of the Property has been sublet, and if it has, the name of the subtenant, and such rent roll shall be accompanied by an Officer’s Certificate certifying thatsuch rent roll is true, correct and complete in all material respects as of its date and stating whether Borrower, within the past three (3) months, has issued a notice of default with respect to any Lease which has not been cured and thenature of such default. 

**11.2.5 Management Agreement**. Borrower shall deliver to Lender, within ten (10)Business Days of the receipt thereof by Borrower, a copy of all reports prepared by Manager pursuant to the Management Agreement, including, without limitation, the Budget and any inspection reports. 

 

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**11.2.6 Budget**. Not later than March 1st of each Fiscal Year hereafter, Borrower shall prepare or cause to beprepared and deliver to Lender, for informational purposes only, a Budget in respect of the Property for the Fiscal Year in which such delivery date falls. If Borrower subsequently amends the Budget, Borrower shall promptly deliver the amendedBudget to Lender. 

**11.2.7 Other Information**. Borrower shall, promptly after written request by Lender or, if aSecuritization shall have occurred, the Rating Agencies, furnish or cause to be furnished to Lender, in such manner and in such detail as may be reasonably requested by Lender, such reasonable additional information as may be reasonably requestedwith respect to the Property. The information required to be furnished by Borrower to Lender under this Section 11.2 shall be provided in both hard copy format and electronic format; provided that Borrower shall only be requiredto provide the information required under this Section 11.2.7 in electronic format if such information is so available in the ordinary course of the operations of the Borrower and Manager and without significant expense. 

**XII. ENVIRONMENTAL MATTERS**

**Section 12.1 Representations**. Borrower hereby represents and warrants that except as set forth in the environmental reports and studies delivered to Lender (the “**EnvironmentalReports**”), (i) Borrower has not engaged in or knowingly permitted any operations or activities upon, or any use or occupancy of the Property, or any portion thereof, for the purpose of or in any way involving the handling,manufacture, treatment, storage, use, generation, release, discharge, refining, dumping or disposal of any Hazardous Materials on, under, in or about the Property, or transported any Hazardous Materials to, from or across the Property, except in allcases in material compliance with Environmental Laws and only in the course of legitimate business operations at the Property; (ii) to the Best of Borrower’s Knowledge, no tenant, occupant or user of the Property, or any other Person, hasengaged in or permitted any operations or activities upon, or any use or occupancy of the Property, or any portion thereof, for the purpose of or in any material way involving the handling, manufacture, treatment, storage, use, generation, release,discharge, refining, dumping or disposal of any Hazardous Materials on, in or about the Property, or transported any Hazardous Materials to, from or across the Property, except in all cases in material compliance with Environmental Laws and only inthe course of legitimate business operations at the Property; (iii) to the Best of Borrower’s Knowledge, no Hazardous Materials are presently constructed, deposited, stored, or otherwise located on, under, in or about the Property exceptin material compliance with Environmental Laws; (iv) to the Best of Borrower’s Knowledge, no Hazardous Materials have migrated from the Property upon or beneath other properties which would reasonably be expected to result in materialliability for Borrower; and (v) to the Best of Borrower’s Knowledge, no Hazardous Materials have migrated or threaten to migrate from other properties upon, about or beneath the Property which would reasonably be expected to result inmaterial liability for Borrower. 

**Section 12.2 Covenants. Compliance with Environmental Laws.**

Subject to Borrower’s right to contest under Section 7.3, Borrower covenants and agrees with Lender that it shall complywith all Environmental Laws. If at any time during the 

 

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continuance of the Lien of the Security Instrument, a Governmental Authority having jurisdiction over theProperty requires remedial action to correct the presence of Hazardous Materials in, around, or under the Property (an **“****Environmental Event****”**), Borrower shall deliver prompt notice of the occurrence of suchEnvironmental Event to Lender. Within thirty (30) days after Borrower has knowledge of the occurrence of an Environmental Event, Borrower shall deliver to Lender an Officer’s Certificate (an **“****EnvironmentalCertificate****”**) explaining the Environmental Event in reasonable detail and setting forth the proposed remedial action, if any. Borrower shall promptly provide Lender with copies of all notices from any Governmental Authority whichallege or identify any actual or potential violation or noncompliance received by or prepared by or for Borrower in connection with any Environmental Law. For purposes of this paragraph, the term “notice” shall mean any summons, citation,directive, order, claim, pleading, letter, application, filing, report, findings, declarations or other materials provided by any Governmental Entity pertinent to compliance of the Property and Borrower with such Environmental Laws. 

**Section 12.3 Environmental Reports**. Upon the occurrence and during the continuance of an Environmental Event with respect tothe Property or an Event of Default, Lender shall have the right to direct Borrower to obtain consultants reasonably approved by Lender to perform a comprehensive environmental audit of the Property. Such audit shall be conducted by an environmentalconsultant chosen by Lender and may include a visual survey, a record review, an area reconnaissance assessing the presence of hazardous or toxic waste or substances, PCBs or storage tanks at the Property, an asbestos survey of the Property, whichmay include random sampling of the Improvements and air quality testing, and such further site assessments as Lender may reasonably require due to the results obtained from the foregoing. Borrower grants Lender, its agents, consultants andcontractors the right to enter the Property as reasonable or appropriate for the circumstances for the purposes of performing such studies and the reasonable cost of such studies shall be due and payable by Borrower to Lender upon demand and shallbe secured by the Lien of the Security Instrument. Lender shall not unreasonably interfere with, and Lender shall direct the environmental consultant to use its commercially reasonable efforts not to hinder, Borrower’s or any Tenant’s,other occupant’s or Manager’s operations upon the Property when conducting such audit, sampling or inspections. By undertaking any of the measures identified in and pursuant to this Section 12.3, Lender shall not be deemed tobe exercising any control over the operations of Borrower or the handling of any environmental matter or hazardous wastes or substances of Borrower for purposes of incurring or being subject to liability therefor. 

**Section 12.4 Environmental Indemnification**. Borrower shall protect, indemnify, save, defend, and hold harmless the IndemnifiedParties from and against any and all liability, loss, damage, actions, causes of action, costs or expenses whatsoever (including reasonable attorneys’ fees and expenses) and any and all claims, suits and judgments which any Indemnified Partymay suffer, as a result of or with respect to: (a) any Environmental Claim relating to or arising from the Property; (b) the violation of any Environmental Law in connection with the Property; (c) any release, spill, or the presenceof any Hazardous Materials affecting the Property; and (d) the presence at, in, on or under, or the release, escape, seepage, leakage, discharge or migration at or from, the Property of any Hazardous Materials, whether or not such condition wasknown or unknown to Borrower; provided that, in each case, Borrower shall be relieved of its obligation under this subsection if any of the matters referred to in 

 

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clauses (a) through (d) above did not occur (but need not have been discovered) prior to(1) the foreclosure of the Security Instrument, (2) the delivery by Borrower to Lender or its designee of a deed-in-lieu of foreclosure with respect to the Property, or (3) Lender’s or its designee’s taking possession andcontrol of the Property after the occurrence of an Event of Default hereunder. If any such action or other proceeding shall be brought against Lender, upon written notice from Borrower to Lender (given reasonably promptly following Lender’snotice to Borrower of such action or proceeding), Borrower shall be entitled to assume the defense thereof, at Borrower’s expense, with counsel reasonably acceptable to Lender; provided, however, Lender may, at its own expense, retain separatecounsel to participate in such defense, but such participation shall not be deemed to give Lender a right to control such defense, which right Borrower expressly retains. Notwithstanding the foregoing, each Indemnified Party shall have the right toemploy separate counsel at Borrower’s expense if, in the reasonable opinion of legal counsel, a conflict or potential conflict exists between the Indemnified Party and Borrower that would make such separate representation advisable. Borrowershall have no obligation to indemnify an Indemnified Party for damage or loss resulting from such Indemnified Party’s gross negligence or willful misconduct. 

**Section 12.5 Recourse Nature of Certain Indemnifications**. Notwithstanding anything to the contrary provided in this Agreement or in any other Loan Document, the indemnification provided inSection 12.4 shall be fully recourse to Borrower (but not its constituent parties) and shall be independent of, and shall survive, the discharge of the Indebtedness, the release of the Lien created by the Security Instrument, and/or theconveyance of title to the Property to Lender or any purchaser or designee in connection with a foreclosure of the Security Instrument or conveyance in lieu of foreclosure. 

**XIII. RESERVED**

**XIV. SECURITIZATION AND PARTICIPATION**

**Section 14.1 Sale ofNote and Securitization**. At the request of Lender and, to the extent not already required to be provided by Borrower under this Agreement, Borrower shall use reasonable efforts to satisfy the market standards which may be reasonably requiredin the marketplace or by the Rating Agencies in connection with the sale of the Note or participation therein as part of the first successful securitization (such sale and/or securitization, the “**Securitization**”) of ratedsingle or multi-class securities (the “**Securities**”) secured by or evidencing ownership interests in the Note and this Agreement, including using reasonable efforts to do (or cause to be done) the following (but Borrower shallnot in any event be required to incur, suffer or accept (except to a de minimis extent)) (i) any lesser rights or greater obligations or liability than as currently set forth in the Loan Documents and (ii) except as set forth in thisArticle XIV and other than payment by Borrower of any legal fees of Borrower and Sponsor, any expense or any liability: 

**14.1.1 Provided Information**. (i) Provide, at the sole expense of the holder of the Note (other than legal fees of counsel to the Borrower and Sponsor), such non-confidential financial and other information (but notprojections) with respect to the Property and Borrower and Manager to the extent such information is reasonably available to Borrower or Manager, (ii) provide, at the sole expense of the holder of the Note (other than legal 

 

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fees of counsel to the Borrower and Sponsor), business plans (but not projections) and budgets relating tothe Property, to the extent prepared by the Borrower or Manager and (iii) cooperate with the holder of the Note (and its representatives) in obtaining, at the sole expense of the holder of the Note (other than legal fees of counsel to theBorrower and Sponsor), such site inspection, appraisals, market studies, environmental reviews and reports, engineering reports and other due diligence investigations of the Property, as may be reasonably requested by the holder of the Note orreasonably requested by the Rating Agencies (all information provided pursuant to this Section 14.1 together with all other information heretofore provided to Lender in connection with the Loan, as such may be updated, at Borrower’srequest, in connection with a Securitization, or hereafter provided to Lender in connection with the Loan or a Securitization, being herein collectively called the **“****Provided Information****”**); 

**14.1.2 Opinions of Counsel**. Use reasonable efforts to cause to be rendered such customary updates or customary modificationsto the Opinions of Counsel delivered at the closing of the Loan as may be reasonably requested by the holder of the Note or the Rating Agencies in connection with the Securitization. Borrower’s failure to use reasonable efforts to deliver orcause to be delivered the opinion updates or modifications required hereby within twenty (20) Business Days after written request therefor shall constitute an “**Event of Default**” hereunder. To the extent any of theforegoing Opinions of Counsel were required to be delivered in connection with the closing of the Loan, any update thereof shall be at the expense of Lender and without cost to Borrower. Any such Opinions of Counsel that Borrower is reasonablyrequired to cause to be delivered in connection with a Securitization (which the parties agree shall consist of a “Review Letter” and bring downs of the Opinions of Counsel delivered as of the date hereof which Borrower acknowledges willbe required to be delivered by Borrower’s counsel in connection with a Securitization taking into account the due diligence Borrower’s counsel deems reasonably necessary to deliver such “Review Letter”). Borrower shall not berequired to pay the cost of any reliance letters or new opinions to permit successor holders of the Loan or any interest therein to rely on the opinions delivered at Closing in connection with Securitization or assignments of the Loan. 

**14.1.3 Modifications to Loan Documents**. Without cost to the Borrower (other than legal fees of counsel to the Borrower andSponsor), execute such amendments to the organizational documents of Borrower, Security Instrument and Loan Documents as may be reasonably requested by Lender or the Rating Agencies in order to achieve the required rating or to effect theSecuritization (including, without limitation, modifying the Payment Date, as defined in the Note, to a date other than as originally set forth in the Note), provided, that nothing contained in this Section 14.1.3 shall result inany economic or other adverse change in the transaction contemplated by the Security Instrument or the Loan Documents (unless Borrower is made whole by the holder of Note) or result in any operational changes that are burdensome to the Property,Operating Lessee, Manager or Borrower. 

**Section 14.2 Cooperation with Rating Agencies**. Borrower shall, atLender’s expense (other than legal fees of counsel to the Borrower and Sponsor), (i) at Lender’s request, meet with representatives of the Rating Agencies at reasonable times to discuss the business and operations of the Property, and(ii) cooperate with the reasonable requests of the Rating Agencies in connection with the Property. Until the Obligations are paid in full, Borrower shall provide the Rating Agencies with all financial reports required hereunder and such otherinformation as 

 

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they shall reasonably request, including copies of any default notices or other material notices deliveredto and received from Lender hereunder, to enable them to continuously monitor the creditworthiness of Borrower and to permit an annual surveillance of the implied credit rating of the Securities. 

**Section 14.3 Securitization Financial Statements**. Borrower acknowledges that all such financial information delivered byBorrower to Lender pursuant to Article XI may, at Lender’s option, be delivered to the Rating Agencies. 

**Section 14.4 Securitization Indemnification**. 

**14.4.1 Disclosure Documents**. Borrowerunderstands that certain of the Provided Information may be included in disclosure documents in connection with the Securitization, including a prospectus or private placement memorandum or a public registration statement (each, a**“****Disclosure Document****”**) and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the **“****SecuritiesAct****”**) or the Securities and Exchange Act of 1934, as amended (the **“****Exchange Act****”**), or provided or made available to investors or prospective investors in the Securities, the Rating Agencies,and service providers relating to the Securitization. In the event that the Disclosure Document is required to be revised prior to the sale of all Securities, upon request, Borrower shall reasonably cooperate with the holder of the Note in updatingthe Provided Information for inclusion or summary in the Disclosure Document by providing all current information pertaining to Borrower and the Property reasonably requested by Lender. 

**14.4.2 Indemnification Certificate**. In connection with each of (x) a preliminary and a private placement memorandum, or(y) a preliminary and final prospectus, as applicable, Borrower agrees to provide, at Lender’s reasonable request, an indemnification certificate (at no cost to Borrower other than legal fees of counsel to the Borrower and Sponsor):

(a) certifying that Borrower has carefully examined those portions of such memorandum or prospectus, as applicable,reasonably designated in writing by Lender for Borrower’s review pertaining to Borrower, the Property, the Loan and/or the Provided Information and insofar as such sections or portions thereof specifically pertain to Borrower, the Property, theProvided Information or the Loan (such portions, the **“****Relevant Portions****”**), the Relevant Portions do not (except to the extent specified by Borrower if Borrower does not agree with the statements therein), as ofthe date of such certificate, to the Best of Borrower’s Knowledge, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under whichthey were made, not misleading. 

(b) indemnifying Lender and the Affiliates of Citigroup Global Markets Inc. (collectively,**“****CGM****”**) that have prepared the Disclosure Document relating to the Securitization, each of its directors, each of its officers who have signed the Disclosure Document and each person or entity who controls CGMwithin the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the **“****CGM Group****”**), and CGM, together with the CGM Group, each of their respective directors andeach person who controls CGM or the CGM Group, within the meaning of Section 15 of the Securities Act and Section 20 

 

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of the Exchange Act (collectively, the **“****Underwriter Group****”**) for anyactual, out-of-pocket losses, third party claims, damages (excluding lost profits, diminution in value and other consequential damages) or liabilities arising out of third party claims (the **“****Liabilities****”**) towhich any member of the Underwriter Group may become subject to the extent such Liabilities arise out of or are based upon any untrue statement of any material fact contained in the Relevant Portions and in the Provided Information or arise out ofor are based upon the omission by Borrower to state therein a material fact required to be stated in the Relevant Portions in order to make the statements in the Relevant Portions in light of the circumstances under which they were made, notmisleading (except that (x) Borrower’s obligation to indemnify in respect of any information contained in a preliminary or final registration statement, private placement memorandum or preliminary or final prospectus shall be limited toany untrue statement or omission of material fact therein known to Borrower to the extent in breach of Borrower’s certification made pursuant to clause (a) above and (y) Borrower shall have no responsibility for the failure of anymember of the Underwriting Group to accurately transcribe written information supplied by Borrower or to include such portions of the Provided Information). 

(c) Borrower’s liability under clauses (a) and (b) above shall be limited to Liabilities arising out of or based upon any such untrue statement or omission made in a Disclosure Document inreliance upon and in conformity with information furnished to Lender by, or furnished at the direction and on behalf of, Borrower in connection with the preparation of those portions of the registration statement, memorandum or prospectus pertainingto Borrower, the Property or the Loan, including financial statements of Borrower and operating statements with respect to the Property. This indemnity agreement will be in addition to any liability which Borrower may otherwise have. 

(d) Promptly after receipt by an indemnified party under this Article XIV of notice of the commencement of any action, suchindemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Article XIV, notify the indemnifying party in writing of the commencement thereof, but the omission to so notify theindemnifying party will not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to the indemnifying party. In theevent that any action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled, jointly with any other indemnifying party, to participate therein and, tothe extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to suchindemnified party. After notice from the indemnifying party to such indemnified party under this Article XIV of its assumption of such defense, the indemnifying party shall not be liable for any legal or other expenses subsequentlyincurred by such indemnified party in connection with the defense thereof; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall havereasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or in conflict with those available to the indemnifying party, the indemnified party or parties shall have the right toselect separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties at the expense of the indemnifying party. The indemnifying party shall not be liable forthe expenses 

 

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of separate counsel unless an indemnified party shall have reasonably concluded that there may be legaldefenses available to it that are different from or in conflict with those available to another indemnified party. 

(e) Inorder to provide for just and equitable contribution in circumstances in which the indemnity provided for in this Article XIV is for any reason held to be unenforceable by an indemnified party in respect of any actual, out-of-pocketlosses, claims, damages or liabilities relating to third party claims (or action in respect thereof) referred to therein which would otherwise be indemnifiable under this Article XIV, the indemnifying party shall contribute to the amountpaid or payable by the indemnified party as a result of such actual, out of pocket losses, third party claims, damages or liabilities (or action in respect thereof) (but excluding damages for lost profits, diminution in value of the Property andconsequential damages); provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution for Liabilities arising therefrom fromany person who was not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered: (i) the CGM Group’s and Borrower’srelative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; (iii) the limited responsibilities and obligations ofBorrower as specified herein; and (iv) any other equitable considerations appropriate in the circumstances. 

**Section14.5 Retention of Servicer**. Lender reserves the right to retain the Servicer. Lender has advised Borrower that the Servicer initially retained by Lender shall be Wachovia Securities and Borrower shall pay any reasonable servicing fees,special servicing fees, trustee fees and any administrative fees and expenses of the Servicer, including, without limitation, reasonable attorney and other third-party fees and disbursements in connection with a prepayment, release of the Property,assumption or modification of the Loan or enforcement of the Loan Documents. Borrower shall also pay the ongoing standard monthly servicing fee. 

**XV. ASSIGNMENTS AND PARTICIPATIONS**

**Section 15.1 Assignmentand Acceptance**. At no incremental cost or liability to Borrower, Lender may assign to one or more Persons all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all ora portion of the Note); provided that the parties to each such assignment shall execute and deliver to Lender, for its acceptance and recording in the Register (as hereinafter defined), an Assignment and Acceptance. In addition, at no incrementalcost to Borrower, Lender may participate to one or more Persons all or any portion of its rights and obligations under this Agreement and the other Loan Documents (including without limitation, all or a portion of the Note) utilizing suchdocumentation to evidence such participation and the parties’ respective rights thereunder as Lender, in its sole discretion, shall elect. 

**Section 15.2 Effect of Assignment and Acceptance**. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance,(i) the assignee thereunder shall be a party hereto and, to the extent 

 

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that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance,have the rights and obligations of Lender, as the case may be, hereunder and such assignee shall be deemed to have assumed such rights and obligations, and (ii) Lender shall, to the extent that rights and obligations hereunder have beenassigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement and the other Loan Documents (and, in the case of an Assignment and Acceptance covering all or the remainingportion of Lender’s rights and obligations under this Agreement and the other Loan Documents, Lender shall cease to be a party hereto) accruing from and after the effective date of the Assignment and Acceptance, except with respect to(A) any payments made by Borrower to Lender pursuant to the terms of the Loan Documents after the effective date of the Assignment and Acceptance and (B) any letter of credit, cash deposit or other deposits or security (other than the Lienof the Security Instrument and the other Loan Documents) delivered to or for the benefit of or deposited with Citigroup Global Markets Realty Corp., as Lender, for which Citigroup Global Markets Realty Corp. shall remain responsible for the properdisposition thereof until such items are delivered to a party who is qualified as an Approved Bank and agrees to hold the same in accordance with the terms and provisions of the agreement pursuant to which such items were deposited. 

**Section 15.3 Content**. By executing and delivering an Assignment and Acceptance, Lender and the assignee thereunder confirm toand agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warrantiesor representations made in or in connection with this Agreement or any other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interestcreated or purported to be created under or in connection with, this Agreement or any other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (ii) Lender makes no representation or warranty and assumes noresponsibility with respect to the financial condition of Borrower or the performance or observance by Borrower of any of its obligations under any Loan Documents or any other instrument or document furnished pursuant thereto; (iii) suchassignee confirms that it has received a copy of this Agreement, together with copies of such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance;(iv) such assignee will, independently and without reliance upon Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under thisAgreement and the other Loan Documents; (v) such assignee appoints and authorizes Lender to take such action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to Lender by the termshereof together with such powers and discretion as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform, in accordance with their terms, all of the obligations which by the terms of this Agreement and the otherLoan Documents are required to be performed by Lender. 

**Section 15.4 Register**. Borrower shall maintain a copy ofeach Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of Lender and each assignee pursuant to this Article XV and the Principal Amount of the Loan owing to each suchassignee from time to time (the **“****Register****”**). The entries in the Register shall, with respect to such assignees, be conclusive and binding for all purposes, absent 

 

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manifest error. The Register shall be available for inspection by Lender or any assignee pursuant to thisArticle XV at any reasonable time and from time to time upon reasonable prior written notice. 

**Section 15.5Substitute Notes**. Upon its receipt of an Assignment and Acceptance executed by an assignee, together with any Note or Notes subject to such assignment, Lender shall, if such Assignment and Acceptance has been completed and is insubstantially the form of **Exhibit J** hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt written notice thereof to Borrower. Withinfive (5) Business Days after its receipt of such notice, Borrower, at Lender’s own expense, shall execute and deliver to Lender in exchange and substitution for the surrendered Note or Notes a new Note to the order of such assignee in anamount equal to the portion of the Loan assigned to it and a new Note to the order of Lender in an amount equal to the portion of the Loan retained by it hereunder. Such new Note or Notes shall be in an aggregate Principal Amount equal to theaggregate then outstanding principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the Note (modified, however, to the extentnecessary so as not to impose duplicative or increased obligations on Borrower and to delete obligations previously satisfied by Borrower). Notwithstanding the provisions of this Article XV, Borrower and Operating Lessee shall not beresponsible or liable for any additional taxes, reserves, adjustments or other costs and expenses that are related to, or arise as a result of, any transfer of the Loan or any interest or participation therein that arise solely and exclusively fromthe transfer of the Loan or any interest or participation therein or from the execution of the new Note contemplated by this Section 15.5, including, without limitation, any mortgage tax. Lender and/or the assignees, as the case may be,shall from time to time designate one agent through which Borrower shall request all approvals and consents required or contemplated by this Agreement and on whose statements Borrower, Operating Lessee and Sponsor may rely. 

**Section 15.6 Participations**. Each assignee pursuant to this Article XV may sell participations to one or morePersons (other than Borrower or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of the Note held by it);provided, however, that (i) such assignee’s obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such assignee shall remain solely responsible to the other parties hereto for theperformance of such obligations, (iii) such assignee shall remain the holder of any such Note for all purposes of this Agreement and the other Loan Documents, and (iv) Borrower, Lender and the assignees pursuant to thisArticle XV shall continue to deal solely and directly with such assignee in connection with such assignee’s rights and obligations under this Agreement and the other Loan Documents. In the event that more than one (1) partycomprises Lender, Lender shall designate one party to act on the behalf of all parties comprising Lender in providing approvals and all other necessary consents under the Loan Documents and on whose statements Borrower, Operating Lessee and Sponsormay rely. 

**Section 15.7 Disclosure of Information**. Any assignee pursuant to this Article XV may, inconnection with any assignment or participation or proposed assignment or participation pursuant to this Article XV, disclose to the assignee or participant or proposed assignee or participant, any information relating to Borrowerfurnished to such assignee by or on 

 

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behalf of Borrower; provided, however, that, prior to any such disclosure, the assignee orparticipant or proposed assignee or participant shall agree in writing for the benefit of Borrower to preserve the confidentiality of any confidential information received by it. 

**Section 15.8 Security Interest in Favor of Federal Reserve Bank**. Notwithstanding any other provision set forth in thisAgreement or any other Loan Document, any assignee pursuant to this Article XV may at any time create a security interest in all or any portion of its rights under this Agreement or the other Loan Documents (including, withoutlimitation, the amounts owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System. 

**XVI. RESERVE ACCOUNTS**

**Section 16.1 Tax Reserve Account**. In accordance with the time periods set forth in Section 3.1, if an Event of Default shall have occurred and be continuing, if required underSection 3.1, Borrower shall deposit into the Tax Reserve Account an amount equal to (a) one-twelfth of the annual Impositions that Lender reasonably estimates, based on the most recent tax bill for the Property, will be payableduring the next ensuing twelve (12) months in order to accumulate with Lender sufficient funds to pay all such Impositions at least twenty (20) days prior to the imposition of any interest, charges or expenses for the non-payment thereofand (b) one-twelfth of the annual Other Charges that Lender reasonably estimates will be payable during the next ensuing twelve (12) months (said monthly amounts in (a) and (b) above hereinafter called the**“****Monthly Tax Reserve Amount****”**, and the aggregate amount of funds held in the Tax Reserve Account being the **“****Tax Reserve Amount****”**). As of the Closing Date, the Monthly TaxReserve Amount is $0.00, but such amount is subject to adjustment by Lender in accordance with the provisions of Section 3.1 and this Section 16.1. The Monthly Tax Reserve Amount shall be paid by Borrower to Lender on eachPayment Date during the continuance of an Event of Default to the extent required to be paid hereunder. Lender will apply the Monthly Tax Reserve Amount to payments of Impositions and Other Charges required to be made by Borrower pursuant toArticle V and Article VII and under the Security Instrument, subject to Borrower’s right to contest Impositions in accordance with Section 7.3. In making any payment relating to the Tax Reserve Account,Lender may do so according to any bill, statement or estimate procured from the appropriate public office, without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lienor title or claim thereof. If the amount of funds in the Tax Reserve Account shall exceed the amounts due for Impositions and Other Charges pursuant to Article V and Article VII, Lender shall credit such excess against futurepayments to be made to the Tax Reserve Account. If at any time Lender reasonably determines that the Tax Reserve Amount is not or will not be sufficient to pay Impositions and Other Charges by the dates set forth above, Lender shall notify Borrowerof such determination and Borrower shall increase its monthly payments to Lender by the amount that Lender reasonably estimates is sufficient to make up the deficiency at least thirty (30) days prior to the imposition of any interest, chargesor expenses for the non-payment of the Impositions and Other Charges. Upon payment of the Impositions and Other Charges, Lender shall reassess the amount necessary to be deposited in the Tax Reserve Account for the succeeding period, whichcalculation shall take into account any excess amounts remaining in the Tax Reserve Account. 

 

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**Section 16.2 Insurance Reserve Account**. If an Event of Default shall haveoccurred and be continuing and if required as provided in Section 3.1 hereof, Borrower will immediately pay to Lender for transfer by Lender to the Holding Account (or if Borrower fails to so pay Lender, Lender will transfer from theHolding Account) an amount (the **“****Insurance Reserve Amount****”**) equal to payments of insurance premiums required to be made by Borrower to pay (or to reimburse Borrower or Operating Lessee for) the insurancerequired pursuant to Article VI and under the Security Instrument in accordance with the time periods set forth in Section 3.1, an amount equal to one-twelfth of the insurance premiums that Lender reasonably estimates basedon the most recent bill, will be payable for the renewal of the coverage afforded by the insurance policies upon the expiration thereof in order to accumulate with Lender sufficient funds to pay all such insurance premiums at least twenty (20)days prior to the expiration of the policies required to be maintained by Borrower pursuant to the terms hereof (said monthly amounts hereinafter called the **“****Monthly Insurance Reserve Amount****”**); provided,however, that immediately following an Insurance Reserve Trigger, Borrower will pay to Lender for transfer by Lender to the Insurance Reserve Account (or if Borrower fails to so pay Lender, Lender will transfer from the Holding Account) an amountequal to payments of insurance premiums required to be made by Borrower to pay (or to reimburse Borrower or Operating Lessee) for the insurance required pursuant to Article VI and under the Security Instrument. As of the Closing Date,the Monthly Insurance Reserve Amount is $0.00. The Monthly Insurance Reserve Amount, if same is payable pursuant to Section 3.1 and this Section 16.2, shall be paid by Borrower to Lender on each Payment Date. Lender willapply the Monthly Insurance Reserve Amount to payments of insurance premiums required to be made by Borrower to pay for the insurance required pursuant to Article VI and under the Security Instrument. In making any payment relating tothe Insurance Reserve Account, Lender may do so according to any bill, statement or estimate procured from the insurer or agent, without inquiry into the accuracy of such bill, statement or estimate or into the validity thereof. If at any timeLender reasonably determines that the Insurance Reserve Amount is not or will not be sufficient to pay insurance premiums (up to a maximum amount equal to the aggregate annual insurance premium required hereunder), Lender shall notify Borrower ofsuch determination and Borrower shall increase the Insurance Reserve Amount by the amount that Lender reasonably estimates is sufficient to make up the deficiency at least thirty (30) days prior to expiration of the applicable insurancepolicies. Upon payment of such insurance premiums, Lender shall reassess the amount necessary to be deposited in the Insurance Reserve Account for the succeeding period, which calculation shall take into account any excess amounts remaining in theInsurance Reserve Account. 

**Section 16.3 Intentionally Deleted**. 

**Section 16.4 FF&E Reserve Account**. In accordance with Section 3.1, and during any period when Manager is notreserving for FF&E pursuant to the terms of the Management Agreement, upon the request of Borrower, Lender will, within fifteen (15) Business Days (or such shorter time as may be appropriate in Lender’s reasonable discretion duringemergency situations identified to Lender by Borrower in writing) after the receipt of such request and the satisfaction of the other conditions set forth in this Section, cause disbursements to Operating Lessee from the FF&E Reserve Account topay or to reimburse Operating Lessee or Manager for actual costs incurred in connection with capital expenditures relating to FF&E at the Property (to the extent such expenditures are permitted hereunder), provided that (A) Lenderhas 

 

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received invoices evidencing that the costs for which such disbursements are requested are due and payableand are in respect of capital expenditures relating to FF&E at the property, (B) Operating Lessee has applied any amounts previously received by it in accordance with this Section for the expenses to which specific draws made hereunderrelate and received any Lien waivers or other releases which would customarily be obtained with respect to the work in question and (C) Lender has received an Officer’s Certificate confirming that the conditions in the foregoingclauses (A) and (B) have been satisfied and that the copies of invoices and evidence of Lien waivers (to the extent required above) attached to such Officer’s Certificate are true, complete and correct. 

**Section 16.5 Letter of Credit Provisions**. 

**16.5.1 Delivery of Letter of Credit**. In lieu of maintaining on deposit all or any portion of the funds in the Low Debt Service Reserve Account with Lender pursuant toSection 16.4, Borrower shall have the right to deliver a Letter of Credit in the amount of all or any portion of the amounts on deposit with Lender from time to time under Sections 16.4. 

**16.5.2 Reduction of Letter of Credit**. In the event that Borrower elects to deliver the Letter of Credit to Lender under theterms of Section 16.4.1, Lender agrees to permit the reduction from time to time of the outstanding amount of the Letter of Credit by (i) the amount of cash funds delivered to Lender as reserve funds by Borrower in place of suchLetter of Credit, and (ii) the amount that Borrower would otherwise be entitled to receive as a disbursement from the applicable reserve account pursuant to Section 16.4. 

**16.5.3 Security for Debt**. Each Letter of Credit delivered under this Agreement shall be additional security for the paymentof the Indebtedness. Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right, at its option, to draw on any Letter of Credit and to apply all or any part thereof to the payment of the items for which suchLetter of Credit was established or to apply each such Letter of Credit to payment of the Indebtedness in such order, proportion or priority as Lender may determine. 

**16.5.4 Additional Rights of Lender**. In addition to any other right Lender may have to draw upon a Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall havethe additional rights to draw in full any Letter of Credit: (a) if Lender 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 thirty (30) daysprior to the date on which the outstanding Letter of Credit is scheduled to expire; (b) upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except if a substitute Letter of Credit is provided); or(c) if Lender has received notice that the bank issuing the Letter of Credit shall cease to be an Approved Bank (unless an alternative Approved Bank issues an equivalent Letter of Credit within fifteen (15) days of Borrower’s receiptof notice of same). Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw any Letter of Credit upon the happening of an event specified in (a), (b) or (c) above and shall not be liable for anylosses sustained by Borrower due to the insolvency of the bank issuing the Letter of Credit if Lender has not drawn the Letter of Credit. 

 

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**XVII. DEFAULTS**

**Section 17.1 Event of Default**. (a) Each of the following events shall constitute an event of default hereunder (an“**Event of Default**”): 

(i) if (A) the Indebtedness is not paid in full on the Maturity Date(subject to the last sentence of Section 3.1.5(b)), (B) any Debt Service is not paid in full on the applicable Payment Date (subject to the last sentence of Section 3.1.5(b)), (C) any prepayment of principal dueunder this Agreement or the Note is not paid when due, (D) the Prepayment Fee is not paid when due, (E) any deposit to the Collection Account or any of the other Collateral Accounts is not made on the required deposit date therefor; or(F) except as to any amount included in (A), (B), (C), (D), and/or (E) of this clause (i), any other amount payable pursuant to this Agreement, the Note or any other Loan Document is not paid in full when due and payable in accordancewith the provisions of the applicable Loan Document, with such failure as described in subclauses (A), (B), (C), (D), and (E) continuing for ten (10) Business Days after Lender delivers written notice thereof to Borrower; 

(ii) subject to Borrower’s right to contest as set forth in Section 7.3, if any of the Impositions or Other Charges arenot paid prior to the imposition of any interest, penalty, charge or expense for the non-payment thereof; 

(iii) if theinsurance policies required by Section 6.1 are not kept in full force and effect, or if certificates of any of such insurance policies are not delivered to Lender within ten (10) Business Days following Lender’s requesttherefor; 

(iv) if, except as permitted pursuant to Article VIII, (a) any Transfer of any direct or indirectlegal, beneficial or equitable interest in all or any portion of the Property, (b) any Transfer of any direct or indirect interest in Borrower or other Person restricted by the terms of Article VIII, (c) any Lien or encumbranceon all or any portion of the Property, (d) any pledge, hypothecation, creation of a security interest in or other encumbrance of any direct or indirect interests in Borrower or other Person restricted by the terms of Article VIII or(e) the filing of a declaration of condominium with respect to the Property other than as allowed hereunder; 

(v) if(i) any representation or warranty made by Borrower in Section 4.1.23 shall have been false or misleading in any material respect as of the date the representation or warranty was made which incorrect, false or misleading statementis not cured within thirty (30) days after receipt by Borrower of notice from Lender in writing of such breach or (ii) if any other representation or warranty made by Borrower herein by Borrower, any Sponsor, or any Affiliate of Borrowerin any other Loan Document, or in any report, certificate (including, but not limited to, any certificate by Borrower delivered in connection with the issuance of the Non-Consolidation Opinion), financial statement or other instrument, agreement ordocument furnished to Lender shall have been false or misleading in any material respect as of the date the representation or warranty was made; provided, however, that if such representation or warranty which was false or misleadingin any material respect is, by its nature, curable and is not reasonably likely to have a Material Adverse Effect, and such representation or warranty was not, to the Best of Borrower’s Knowledge, false or misleading in any material respectwhich 

 

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made, then same shall not constitute an Event of Default unless Borrower has not cured same withinfive (5) Business Days after receipt by Borrower of notice from Lender in writing of such breach; 

(vi) if Borrower orSponsor shall make an assignment for the benefit of creditors provided, however, if such assignment was with respect to any Sponsor such Event of Default may be cured by the delivery to Lender by any other Sponsor that is not subjectto such assignment, of an executed counterpart to the Sponsor Indemnity assuming the several liability of the Sponsor with respect to which such assignment within five (5) days after such assignment; 

(vii) if a receiver, liquidator or trustee shall be appointed for Borrower, Operating Lessee, or Sponsor or if Borrower, Operating Lesseeor Sponsor 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, oracquiesced in by, Borrower, Operating Lessee or Sponsor, or if any proceeding for the dissolution or liquidation of Borrower, Operating Lessee, or Sponsor shall be instituted; provided, however, if such appointment, adjudication,petition or proceeding was involuntary and not consented to by Borrower, Operating Lessee, or Sponsor upon the same not being discharged, stayed or dismissed within ninety (90) days; provided, further, if such appointment,adjudication, petition or proceeding was with respect to Sponsor such Event of Default may be cured by the delivery to Lender by Sponsor that, not subject to such appointment, adjudication, petition or proceeding, of an executed counterpart to theSponsor Indemnity assuming the several liability of the Sponsor with respect to which such appointment, adjudication, petition or proceeding occurred within five (5) days after such occurrence; 

(viii) if Borrower, Operating Lessee or Sponsor, as applicable, Transfers its rights under this Agreement or any of the other LoanDocuments or any interest herein or therein in contravention of the Loan Documents; 

(ix) with respect to any term, covenantor provision set forth herein (other than the other subsections of this Section 17.l) which specifically contains a notice requirement or grace period, if Borrower, Operating Lessee or Sponsor shall be in default under such term,covenant or condition after the giving of such notice or the expiration of such grace period; 

(x) if Borrower, havingnotified Lender of its election to extend the Maturity Date as set forth in Section 5 of the Note, fails to deliver the Replacement Interest Rate Cap Agreement to Lender prior to the first day of the extended term of the Loan andBorrower has not prepaid the Loan pursuant to the terms of the Note prior to such first day of the extended term; 

(xi) ifBorrower or Operating Lessee shall fail to comply with any covenants set forth in Article V or Section XI with such failure continuing for ten (10) Business Days after Lender delivers written notice thereof to Borrower;

 

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(xii) if Borrower shall fail to comply with any covenants set forth inSection 4 or Section 3(d) or Section 8 of the Security Instrument with such failure continuing for ten (10) Business Days after Lender delivers written notice thereof to Borrower; 

(xiii) Borrower, Operating Lessee or any Affiliate of any such Person shall fail to deposit any sums required to be deposited in theHolding Account or any Sub-Accounts thereof are not made pursuant to the requirements herein when due; 

(xiv) if thisAgreement or any other Loan Document or any Lien granted hereunder or thereunder, in whole or in part, shall terminate or shall cease to be effective or shall cease to be a legally valid, binding and enforceable obligation of Borrower or Sponsor, orany Lien securing the Loan shall, in whole or in part, cease to be a perfected first priority Lien, subject to the Permitted Encumbrances (except in any of the foregoing cases in accordance with the terms hereof or under any other Loan Document orby reason of any affirmative act of Lender); 

(xv) if the Management Agreement is terminated and an Acceptable Manager is notappointed as a replacement manager pursuant to the provisions of Section 5.2.14 within sixty (60) days after such termination; 

(xvi) if Borrower shall default beyond the expiration of any applicable cure period under any existing easement, covenant or restriction which affects the Property, the default of which shall have aMaterial Adverse Effect; 

(xvii) There exists any fact or circumstance that reasonably could be expected to result in the(a) imposition of a Lien or security interest under Section 412(n) of the Code or under ERISA or (b) the complete or partial withdrawal by Borrower or any ERISA Affiliate from any “multiemployer plan” that is reasonablyexpected to result in any material liability to Borrower; provided, however that the existence of such fact or circumstance under clause (xvii)(b) shall not constitute an Event of Default if such material withdrawal liability(x) in the case of a withdrawal by an ERISA Affiliate that is reasonably expected to cause a Material Adverse Effect or any withdrawal by Borrower, is paid within thirty (30) days after the date incurred or is contested in accordance withSection 7.3 hereof or (y) in the case of a withdrawal by an ERISA Affiliate that is not reasonably expected to cause a Material Adverse Effect, is paid within the period required under applicable ERISA statutes or is contested inaccordance with Section 7.3 hereof; or 

(xviii) if Borrower shall continue to be in Default under any of theother terms, covenants or conditions of this Agreement or of any Loan Document not specified in subsections (i) to (xvii) above, for thirty (30) days after notice from Lender; provided, however, that ifsuch Default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided, further, that Borrower shall have commenced to cure such Default within such thirty (30) day period andthereafter diligently proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceedninety (90) days. 

 

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(b) Unless waived in writing by Lender, upon the occurrence and during the continuance of anEvent of Default (other than an Event of Default described in clauses (a)(vi), (vii) or (viii) above) Lender may, without notice or demand, in addition to any other rights or remedies available to it pursuant to this Agreement and theother Loan Documents or at law or in equity, take such action that Lender deems advisable to protect and enforce its rights against Borrower and in the Property, including, without limitation, (i) declaring immediately due and payable theentire Principal Amount together with interest thereon and all other sums due by Borrower under the Loan Documents, (ii) collecting interest on the Principal Amount at the Default Rate whether or not Lender elects to accelerate the Note and(iii) enforcing or availing itself of any or all rights or remedies set forth in the Loan Documents against Borrower and the Property, including, without limitation, all rights or remedies available at law or in equity; and upon any Event ofDefault described in subsections (a)(vi) or (a)(vii) above, the Indebtedness and all other obligations of Borrower hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without noticeor demand, and Borrower hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding. The foregoing provisions shall not be construed as a waiver by Lender of its right topursue any other remedies available to it under this Agreement, the Security Instrument or any other Loan Document. Any payment hereunder may be enforced and recovered in whole or in part at such time by one or more of the remedies provided toLender in the Loan Documents. 

**Section 17.2 Remedies**. (a) Unless waived in writing by Lender, upon theoccurrence and during the continuance of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed anddelivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Indebtedness shall be declared due and payable, and whether or not Lender shall havecommenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to the Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursuedindependently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remediesof Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents. Without limiting the generality of the foregoing, Borrower agrees that if an Event of Default is continuing (i) Lender shall not be subject toany one action or election of remedies law or rule and (ii) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Property and theSecurity Instrument has been foreclosed, sold and/or otherwise realized upon in satisfaction of the Indebtedness or the Indebtedness has been paid in full. 

(b) Upon the occurrence and during the continuance of an Event of Default, with respect to the Account Collateral, the Lender may: 

(i) subject to the terms of the Subordination of Operating Lease and/or Manager Subordination Agreements, without notice to Borrower, exceptas required by law, and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Account Collateral against the Obligations, Operating Expenses and/or Capital Expenditures for the Property or any part thereof;

 

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(ii) in Lender’s sole discretion, at any time and from time to time, exercise any andall rights and remedies available to it under this Agreement, and/or as a secured party under the UCC; 

(iii) subject to theterms of the Subordination of Operating Lease and/or Manager Subordination Agreements, demand, collect, take possession of or receipt for, settle, compromise, adjust, sue for, foreclose or realize upon the Account Collateral (or any portion thereof)as Lender may determine in its sole discretion; and 

(iv) take all other actions provided in, or contemplated by, thisAgreement. 

(c) With respect to Borrower, the Account Collateral, the Rate Cap Collateral and the Property, nothing containedherein or in any other Loan Document shall be construed as requiring Lender to resort to the Property for the satisfaction of any of the Indebtedness, and Lender may seek satisfaction out of the Property or any part thereof, in its absolutediscretion in respect of the Indebtedness. In addition, Lender shall have the right from time to time to partially foreclose this Agreement and the Security Instrument in any manner and for any amounts secured by this Agreement or the SecurityInstrument then due and payable as determined by Lender in its sole discretion including, without limitation, the following circumstances: (i) in the event Borrower defaults beyond any applicable grace period in the payment of one or morescheduled payments of principal or interest, Lender may foreclose this Agreement and the Security Instrument to recover such delinquent payments, or (ii) in the event Lender elects to accelerate less than the entire outstanding principalbalance of the Loan, Lender may foreclose this Agreement and the Security Instrument to recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by this Agreement or the Security Instrument as Lendermay elect. Notwithstanding one or more partial foreclosures, the Property shall remain subject to this Agreement and the Security Instrument to secure payment of sums secured by this Agreement and the Security Instrument and not previouslyrecovered. 

**Section 17.3 Remedies Cumulative; Waivers**. The rights, powers and remedies of Lender under thisAgreement and the Security Instrument shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents, or existing at law or in equity orotherwise. Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any remedy, right orpower 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 waiverof one Default or Event of Default with respect to Borrower or any Sponsor shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or any Sponsor or to impair any remedy, right or power consequent thereon.

 

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**Section 17.4 Costs of Collection**. In the event that after an Event of Default:(i) the Note or any of the Loan Documents is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; (ii) an attorney is retained to represent Lender in any bankruptcy,reorganization, receivership, or other proceedings affecting creditors’ rights and involving a claim under the Note or any of the Loan Documents; or (iii) an attorney is retained to protect or enforce the lien or any of the terms of thisAgreement, the Security Instrument or any of the Loan Documents; then Borrower shall pay to Lender all reasonable attorney’s fees, costs and expenses actually incurred in connection therewith, including costs of appeal, together with intereston any judgment obtained by Lender at the Default Rate. 

**XVIII. SPECIAL PROVISIONS**

**Section 18.1 Exculpation**. 

Anything contained herein, in the Note or in any other Loan Document to the contrary notwithstanding (except as set forth in the balance of this Section 18.1 or in the EnvironmentalIndemnity), no recourse shall be had for the payment of the principal or interest on the Note or for any other portion of the Indebtedness hereunder or under the other Loan Documents against (i) any Affiliate, parent company, trustee or advisorof Borrower or owner of a direct or indirect Beneficial or equitable interest in Borrower or Sponsor, any member in Borrower, or any partner, shareholder or member therein (other than against Sponsor pursuant to the Sponsor Indemnity Agreement);(ii) any legal representative, heir, estate, successor or assign of any thereof; (iii) any corporation (or any officer, director, employee or shareholder thereof), individual or entity to which any ownership interest in Borrower shall havebeen transferred; (iv) any purchaser of any asset of Borrower; or (v) any other Person (except Borrower), for any deficiency or other sum owing with respect to the Note or the Indebtedness. It is understood that the Note and theIndebtedness (except as set forth in the balance of this Section 18.1 and in the Environmental Indemnity) may not be enforced against any Person described in clauses (i) through (v) above (other than againstSponsor pursuant to the Sponsor Indemnity Agreement as set forth in clause (i) above) and Lender agrees not to sue or bring any legal action or proceeding against any such Person in such respect. Notwithstanding the foregoing, theforegoing shall not: (a) prevent recourse to the Borrower or the assets of Borrower, or enforcement of the Security Instrument or other instrument or document by which Borrower is bound pursuant to the Loan Documents; (b) estop Lender frominstituting or prosecuting a legal action or proceeding or otherwise making a claim against Borrower as a result of any of the following or against the Person or Persons committing any of the following: (i) fraud or intentionalmisrepresentation by Borrower or Operating Lessee in connection with the Loan, (ii) the misappropriation by Borrower or Operating Lessee or any Affiliate of Borrower or Operating Lessee of any Proceeds (including, without limitation, any Rentsand any security deposits), (iii) the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity, (iv) any transfer in violation of Section 8 or otherwise violate the provisionsof such Section 8, (v) any loss, damage, cost or expense incurred by or on behalf of Lender by reason of all or any part of the Property, the Collection Account, the Holding Account, the Collateral Accounts or the Interest Rate CapAgreement being encumbered by a Lien (other than pursuant to the Loan Documents in favor of Lender) in violation of the Loan Documents, (vi) physical damage to any Property from intentional waste committed by Borrower or Operating Lessee or anyAffiliate of 

 

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Borrower or Operating Lessee, (vii) any loss, damage, cost or expense incurred by or on behalf ofLender by reason of the failure of Borrower and/or Operating Lessee to comply with any of the provisions of Section XIV hereof, (viii) any and all liabilities, obligations, losses, damages, costs and expenses (including, withoutlimitation, reasonable attorneys’ fees, causes of action, suits, claims, demands and adjustments of any nature or description whatsoever) which may at any time be imposed upon, incurred by or awarded against Lender, in the event (and arisingout of such circumstances) that (x) Borrower should raise any defense, counterclaim and/or allegation in any foreclosure action by Lender relative to the Property, the Collection Account, the Holding Account, the Collateral Accounts orassignment of Borrower’s rights to the Interest Rate Cap Agreement (including the right to receive any proceeds derived therefore) or any part thereof which is found by a court to have been raised by Borrower or Operating Lessee in bad faith orto be wholly without basis in fact or law, or (y) an involuntary case is commenced against Borrower or Operating Lessee under the Bankruptcy Code with the collusion of Borrower or Operating Lessee, Sponsor or any of their Affiliates or(z) an order for relief is entered with respect to Borrower or Operating Lessee under the Bankruptcy Code through the actions of Borrower or Operating Lessee, Sponsor or any of their Affiliates; or (ix) attorney’s fees, costs andexpenses incurred by Lender, its agent or any servicer of the Loan in connection with any successful suit by Lender to enforce the terms of the Loan Documents; or (c) estop Lender from enforcing its rights under the indemnity agreement beingexecuted concurrently herewith by the Sponsor in favor of the Lender, for losses caused by any of the foregoing items set forth in section (b) above. Borrower hereby agrees that notwithstanding any provision to the contrary herein or in anyother Loan Document, to the extent otherwise permitted by law, its obligations pursuant to clause (b)(ix) of this Section shall survive the full repayment of the Loan and/or the passage of title to all or any portion of the Property to Lender.

**XIX. MISCELLANEOUS**

**Section 19.1 Survival**. This Agreement and all covenants, indemnifications, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shallsurvive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long as all or any of the Indebtedness is outstanding and unpaid unless a longer period is expressly setforth herein or in the other Loan Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. All covenants, promises and agreements in thisAgreement, by or on behalf of Borrower, shall inure to the benefit of the successors and assigns of Lender. 

**Section 19.2Lender’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 orto decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided or as is otherwise required by law) be in the sole discretion of Lender and shall be final and conclusive.

**Section 19.3 Governing Law**. **(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BYLENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK,**

 

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**WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYINGTRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLYAND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.**

**(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWERARISING OUT OF OR RELATING TO THIS AGREEMENT MAY 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 LENDER WAIVES ANYOBJECTIONS 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 LENDER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION ORPROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:**

 
 
**CORPORATION SERVICE COMPANY**

**80 STATE STREET**

**ALBANY, NEW YORK 12207-2543**
 
**AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESSWHICH 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 INTHE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OFITS 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 SERVICEOF 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 19.4 Modification, Waiver in Writing**. No modification, amendment,extension, discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any other Loan Document, or consent to any departure therefrom, shall in any event be effective unless the same shall be in a writing signed by theparty 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 shallentitle Borrower to any other or future notice or demand in the same, similar or other circumstances. 

**Section 19.5Delay 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 theNote 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 anyother right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be deemed to have waivedany right either to require prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount. 

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

 

If to Lender:
    
Citigroup Global Markets Realty Corp.

388 Greenwich Street, 11th Floor

New York, New York 10013

Attention: Amir Kornblum

Telecopy No.: (212) 816-8307

With a copy to:
    
Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, New York 10281

Attention: Fredric L. Altschuler, Esq.

Telecopy:(212) 504-6666

 

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If to Borrower:
    
Strategic Hotel Funding, L.L.C.

77 West Wacker Drive

Suite 4600

Chicago, Illinois, 60601

Attention: Chief Financial Officer and General Counsel

Telefax No.: (312) 658-5799

With a copy to:
    
Perkins Coie LLP

131 SouthDearborn Street, Suite 1700

Chicago, IL 60603-5559

Attention: Bruce A. Bonjour, Esq.

Telefax No.: (312) 324-9400

All notices, elections, requests and demands under this Agreement shall be effective and deemedreceived upon the earliest of (i) the actual receipt of the same by personal delivery or otherwise, (ii) one (1) Business Day after being deposited with a nationally recognized overnight courier service as required above, or(iii) on the day sent if sent by facsimile with confirmation on or before 5:00 p.m. New York time on any Business Day or on the next Business Day if so delivered after 5:00 p.m. New York time or on any day other than a Business Day. Rejectionor other refusal to accept or the inability to deliver because of changed address of which no notice was given as herein required shall be deemed to be receipt of the notice, election, request, or demand sent. 

**Section 19.7 TRIAL BY JURY**. EACH OF BORROWER, LENDER AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY,KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUTLIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE OR ANYOTHER LOAN DOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSEOF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND BORROWER HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OFTHE CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THELOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN. 

 

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**Section 19.8 Headings**. The Article and/or Section headings and the Table ofContents 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 19.9 Severability**. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision ofthis 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 thisAgreement. 

**Section 19.10 Preferences**. To the extent Borrower makes a payment or payments to Lender, whichpayment 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 lawor equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not beenreceived by Lender. 

**Section 19.11 Waiver of Notice**. Borrower shall not be entitled to any notices of any naturewhatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower isnot, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents donot specifically and expressly provide for the giving of notice by Lender to Borrower. 

**Section 19.12 Expenses;Indemnity**. (a) Except as may be otherwise expressly set forth in the Loan Documents, Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of written notice from Lender for all reasonable costsand expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with (i) the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents and the consummation of thetransactions contemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including without limitation any opinions requested by Lender pursuant to this Agreement); (ii) Lender’s ongoing performanceof 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; (iii) the negotiation, preparation, execution, delivery andadministration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters as required herein or under the other Loan Documents; (iv) securing Borrower’scompliance with any requests made pursuant to the provisions of this Agreement; (v) the filing and recording fees and expenses, mortgage recording taxes, title insurance and reasonable fees and expenses of counsel for providing to Lender allrequired legal opinions, and other similar expenses incurred in creating and perfecting the Lien in favor of Lender pursuant to this Agreement and the other Loan Documents; (vi) enforcing or preserving any rights, in response to third partyclaims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement, 

 

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the other Loan Documents, the Property, or any other security given for the Loan; (vii) enforcing anyobligations of or collecting any payments due from Borrower under this Agreement, the other Loan Documents or with respect to the Property or in connection with any refinancing or restructuring of the credit arrangements provided under thisAgreement in the nature of a work-out or of any insolvency or bankruptcy proceedings and (viii) procuring insurance policies pursuant to Section 6.1.11; provided, however, that Borrower shall not be liable for the paymentof any such costs and expenses to the extent the same arise (A) by reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender or (B) in connection with any action taken under Article IV or aSecuritization, other than the Borrower’s internal administrative costs. Any cost and expenses due and payable to Lender may be paid from any amounts in the Collection or the Holding Account if same are not paid by Borrower within ten (10)Business Days after receipt of written notice from Lender. 

(b) Subject to the non-recourse provisions ofSection 18.1, Borrower shall protect, indemnify and save harmless Lender, and all officers, directors, stockholders, members, partners, employees, agents, successors and assigns thereof (collectively, the Indemnified Parties) from andagainst all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including all reasonable attorneys’ fees and expenses actually incurred) imposed upon or incurred by or asserted against the IndemnifiedParties or the Property or any part of its interest therein, by reason of the occurrence or existence of any of the following (to the extent Proceeds payable on account of the following shall be inadequate; it being understood that in no event willthe Indemnified Parties be required to actually pay or incur any costs or expenses as a condition to the effectiveness of the foregoing indemnity) prior to (i) the acceptance by Lender or its designee of a deed-in-lieu of foreclosure withrespect to the Property, or (ii) an Indemnified Party or its designee taking possession or control of the Property or (iii) the foreclosure of the Security Instrument, except to the extent caused by the willful misconduct or grossnegligence of the Indemnified Parties (other than such willful misconduct or gross negligence imputed to the Indemnified Parties because of their interest in the Property): (1) ownership of Borrower’s interest in the Property, or anyinterest therein, or receipt of any Rents or other sum therefrom, (2) any accident, injury to or death of any persons or loss of or damage to property occurring on or about the Property or any Appurtenances thereto, (3) any design,construction, operation, repair, maintenance, use, non-use or condition of the Property or Appurtenances thereto, including claims or penalties arising from violation of any Legal Requirement or Insurance Requirement, as well as any claim based onany patent or latent defect, whether or not discoverable by Lender, any claim the insurance as to which is inadequate, and any Environmental Claim, (4) any Default under this Agreement or any of the other Loan Documents or any failure on thepart of Borrower to perform or comply with any of the terms of any Lease within the applicable notice or grace periods, (5) any performance of any labor or services or the furnishing of any materials or other property in respect of the Propertyor any part thereof, (6) any negligence or tortious act or omission on the part of Borrower or any of its agents, contractors, servants, employees, sublessees, licensees or invitees, (7) any contest referred to in Section 7.3hereof, (8) any obligation or undertaking relating to the performance or discharge of any of the terms, covenants and conditions of the landlord contained in the Leases, or (9) except as may be expressly limited herein, the presence at, inor under the Property or the Improvements of any Hazardous Materials in violation of any Environmental Law. Any amounts the Indemnified Parties are legally entitled to receive under this Section which are not paid within fifteen (15) BusinessDays after written demand therefor by the Indemnified Parties 

 

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or Lender, setting forth in reasonable detail the amount of such demand and the basis therefor, shall bearinterest from the date of demand at the Default Rate, and shall, together with such interest, be part of the Indebtedness and secured by the Security Instrument. In case any action, suit or proceeding is brought against the Indemnified Parties byreason of any such occurrence, Borrower shall at Borrower’s expense resist and defend such action, suit or proceeding or will cause the same to be resisted and defended by counsel at Borrower’s reasonable expense for the insurer of theliability or by counsel designated by Borrower (unless reasonably disapproved by Lender promptly after Lender has been notified of such counsel); provided, however, that nothing herein shall compromise the right of Lender (or anyIndemnified Party) to appoint its own counsel at Borrower’s expense for its defense with respect to any action which in its reasonable opinion presents a conflict or potential conflict between Lender and Borrower that would make such separaterepresentation advisable; provided, further, that if Lender shall have appointed separate counsel pursuant to the foregoing, Borrower shall not be responsible for the expense of additional separate counsel of any Indemnified Partyunless in the reasonable opinion of Lender a conflict or potential conflict exists between such Indemnified Party and Lender. So long as Borrower is resisting and defending such action, suit or proceeding as provided above in a prudent andcommercially reasonable manner, Lender and the Indemnified Parties shall not be entitled to settle such action, suit or proceeding without Borrower’s consent which shall not be unreasonably withheld, delayed or conditioned, and claim thebenefit of this Section with respect to such action, suit or proceeding and Lender agrees that it will not settle any such action, suit or proceeding without the consent of Borrower; provided, however, that if Borrower is notdiligently defending such action, suit or proceeding in a prudent and commercially reasonable manner as provided above, and Lender has provided Borrower with thirty (30) days’ prior written notice, or shorter period if mandated by therequirements of applicable law, and opportunity to correct such determination, Lender may settle such action, suit or proceeding and claim the benefit of this Section 19.12 with respect to settlement of such action, suit or proceeding.Any Indemnified Party will give Borrower prompt notice after such Indemnified Party obtains actual knowledge of any potential claim by such Indemnified Party for indemnification hereunder. The Indemnified Parties shall not settle or compromise anyaction, proceeding or claim as to which it is indemnified hereunder without notice to Borrower. 

**Section 19.13 Exhibitsand Schedules Incorporated**. The Exhibits and Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof. 

**Section 19.14 Offsets, Counterclaims and Defenses**. Any assignee of Lender’s interest in and to this Agreement, the Noteand the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelatedcounterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any suchaction or proceeding is hereby expressly waived by Borrower. 

**Section 19.15 Liability of Assignees of Lender**. Noassignee of Lender shall have any personal liability, directly or indirectly, under or in connection with this Agreement or any other Loan Document or any amendment or amendments hereto made at any time or times, 

 

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heretofore or hereafter, any different than the liability of Lender hereunder. In addition, no assigneeshall have at any time or times hereafter any personal liability, directly or indirectly, under or in connection with or secured by any agreement, lease, instrument, encumbrance, claim or right affecting or relating to the Property or to which theProperty is now or hereafter subject any different than the liability of Lender hereunder. The limitation of liability provided in this Section 19.15 is (i) in addition to, and not in limitation of, any limitation of liabilityapplicable to the assignee provided by law or by any other contract, agreement or instrument, and (ii) shall not apply to any assignee’s gross negligence or willful misconduct. 

**Section 19.16 No Joint Venture or Partnership; No Third Party Beneficiaries**. (a) Borrower and Lender intend that therelationships 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 Borrowerand Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender. 

(b) ThisAgreement and the other Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower any right to insistupon 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 otherPerson 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 Personshall 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. 

**Section 19.17 Publicity**. All news releases, publicity or advertising by Borrower or its Affiliates through any mediaintended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender, or any of its Affiliates shall be subject to the prior written approval of Lender. 

**Section 19.18 Waiver of Marshalling of Assets**. To the fullest extent permitted by law, Borrower, for itself and its successorsand assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s shareholders and others with interests in Borrower and of the Property, and agrees not to assert any right under any laws pertaining to the marshalling ofassets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Property forthe collection of the Indebtedness without any prior or different resort for collection or of the right of Lender to the payment of the Indebtedness out of the net proceeds of the Property in preference to every other claimant whatsoever.

**Section 19.19 Waiver of Counterclaim and Other Actions**. Borrower hereby expressly and unconditionally waives,in connection with any suit, action or proceeding brought by Lender on this Agreement, the Note, the Security Instrument or any Loan Document, any and 

 

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every right it may have to (i) interpose any counterclaim therein (other than a counterclaim which canonly be asserted in the suit, action or proceeding brought by Lender on this Agreement, the Note, the Security Instrument or any Loan Document and cannot be maintained in a separate action) and (ii) have any such suit, action or proceedingconsolidated with any other or separate suit, action or proceeding. 

**Section 19.20 Conflict; Construction of Documents;Reliance**. In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they were represented by competentcounsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges that,with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate ofLender. 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 itor any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect toLender’s exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with thebusiness of Borrower or its Affiliates. 

**Section 19.21 Prior Agreements**. This Agreement and the other LoanDocuments contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, are superseded by the terms ofthis Agreement and the other Loan Documents and unless specifically set forth in a writing contemporaneous herewith the terms, conditions and provisions of any and all such prior agreements do not survive execution of this Agreement. 

**Section 19.22 Counterparts**. This Agreement may be executed in multiple counterparts, each of which shall constitute anoriginal, but all of which shall constitute one document. 

**Section 19.23 Joint and Several Liability**. IfBorrower or Sponsor consists of more than one person, the obligations and liabilities of each such person hereunder and under the other Loan Documents shall be joint and several. 

[REMAINDER OF PAGE INTENTIONALLY BLANK] 

 

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

 
**BORROWER:**
SHC MICHIGAN AVENUE, LLC, a Delaware limited liability company
By: 
/s/ Ryan M. Bowie
Name: Ryan M. BowieTitle: Assistant Treasurer

By signing below, Operating Lessee agrees that in consideration of the substantial benefitthat it will receive from Lender making the Loan to Borrower, to comply with all of the terms, conditions, obligations and restrictions affecting Operating Lessee set forth herein: 

 
**OPERATING LESSEE:**
DTRS InterContinental Chicago, LLC, a Delaware limited liability company

By:
 
/s/ Ryan M. Bowie

Name:
 Ryan M. Bowie
Title:
 Assistant Treasurer
[Lender’s signature appears on following page] 

**LENDER:**
CITIGROUP GLOBAL MARKETS REALTY

CORP., a New York corporation
By: 
/s/ Amir Kornblum
Name: Amir KornblumTitle: Authorized Signatory

**EXHIBIT A**

**TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS AND**

**AFFIRMATIVE COVERAGES**

1. General. Borrower and/or its counsel is responsible for ordering orupdating any title insurance work. Lender requires a lender’s title insurance policy insuring “Citigroup Global Markets Realty Corp., and its successors and assigns”. The approved title underwriters, type and amount of insurance andrequired endorsements are described below. The list of endorsements is subject to review by Lender’s counsel, local counsel and additional specific coverages may be required after review of the related title commitment. 

2. Title Insurer. The Title Company or Title Companies must be approved by Lender and licensed to do business in the jurisdiction inwhich the Property is located.                      has been pre-approved by Lender as a Title Company. 

3. Title Agent. Unless Lender otherwise agrees, all title work shall be ordered and coordinated, and the closing of the Loan shall beconducted through                              contact                     Tel:                    . 

4. Primary Title Insurance Requirements. 

(a) Amount of Coverage: Not less than the Principal Amount ofthe Loan on the Closing Date. 

(b) Effective Date: The later of the date of recording of the Security Instrument or thedate of funding of the Loan. Borrower shall be required to provide a customary “gap” indemnity in order to enable the Title Company to provide “gap” coverage. 

(c) Insured: “Citigroup Global Markets Realty Corp. and its successors and assigns”. 

(d) Legal Description: Metes and bounds description to be provided which must conform to that shown on the Survey, the SecurityInstrument and any other Loan Documents that require a legal description of the Property. A lot and block description shall be acceptable in place of a metes and bounds description in exceptional cases. 

(e) Policy Form: An ALTA (or equivalent) lender’s policy of title insurance in form and substance acceptable to Lender. Withoutlimiting Lender’s right to require specific coverages, endorsements or other title work, the Title Policy shall (i) be in the 1970 ALTA (as amended 84) form or, if not available, ALTA 1992 form (deleting arbitration and creditor rightsexclusions) or, if not available, the form commonly used in the state where the Property is located, (ii) to the extent available, include the “extended coverage” provisions described in paragraph 5 below, (iii) include allapplicable endorsements described in paragraph 6 below, and (iv) include Schedule B exceptions in a form and to the extent acceptable to Lender’s counsel. 

 

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5. Extended Coverage Requirements. The Title Policy shall: 

(a) not contain any exception for filed or unfilled mechanic, materialmen or similar liens; 

(b) limit any general exception for real estate taxes and other charges to real estate or other similar taxes or assessments that are notyet due and payable or delinquent and are not a current lien on the Property; 

(c) limit any general exception for the rightsof persons in possession to the rights of specified tenants, as tenants only with no right or option to purchase, set forth on the rent roll for the Property and attached to the Title Policy; and 

(d) not contain any general exception as to matters that an accurate Survey of the Property would disclose, but may contain specificexceptions to matters disclosed on the Survey to be delivered on the Closing Date, subject to review by Lender’s counsel. 

6. Required Endorsements. The following endorsements are required, to the extent available in the jurisdiction in which the Property is located: 

 
 • 
Restrictions, Encroachments, Minerals Endorsement ALTA Form 9 or equivalent. 

 
 • 
(If not available, the Title Policy must insure by way of affirmative coverage statements that there are no encroachments by any of the improvementsonto easements, rights of way or other exceptions to streets or adjacent property, or insure against loss or damage resulting therefrom.) 

 
 • 
Deletion of Creditors Rights Exclusion Endorsement. 

 
 • 
Environmental Protection Lien Endorsement. 

 
 • 
(The Title Policy may make an exception only for specific state statutes that provide for potential subsequent liens that could take priority over thelien securing the Loan.) 

 
 • 
Direct Access to Public Road Endorsement. 

 
 • 
Usury Endorsement. 

 
 • 
Land Same As Survey/Legal Description Endorsement. 

 
 • 
Zoning Endorsement - ALTA 3.1 with coverage for number/type of parking spaces. 

In lieu of an ALTA 3.1 zoning endorsement, Lender may accept an unambiguous, clean letter from the appropriate zoning authority whichsatisfies the following: 

Zoning District. Confirms the applicable zoning district for the Property under the lawsor ordinances of the applicable jurisdiction and that such zoning is the proper zoning for the improvements located on the Property. 

 

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Use Restrictions. Confirms that the current use of the Property is permitted underthe zoning ordinance and that the Property is not a non-conforming use. 

Dimensional Requirements. Confirms that theProperty is in compliance with all dimensional requirements of the zoning code, including minimum lot area, maximum building height, maximum floor area ratio and setback or buffer requirements. 

Parking Requirements. Confirms that the Property is in compliance with all parking and loading requirements, including the number ofspaces and dimensional requirements for the parking spaces. 

Rebuildability. If Property involves legal non-conforminguse, confirms that, in the event of casualty, the Property may be rebuilt substantially in its current form (i.e., no loss of square footage, same building footprint) upon satisfaction of stated conditions and/or limitations. 

 
 • 
Subdivision Endorsement. 

 
 • 
Doing Business Endorsement. 

 
 • 
Deletion of Arbitration Endorsement. 

 
 • 
Separate Tax Lot Endorsement. 

 
 • 
Street Address Endorsement 

 
 • 
Contiguity Endorsement. 

 
 • 
Variable Rate Endorsement. 

 
 • 
Mortgage Recording Tax Endorsement. 

 
 • 
Any of the following endorsements customary in the state in which the Property is located or as required by the nature of the transaction:

Tie-In Endorsement for Multiple Policies 

Mortgage Assignment Endorsement 

First Loss / Last Dollar Endorsement 

Non-Imputation Endorsement 

Blanket Un-located Easements Endorsement 

Closure Endorsement 

 

A-3 

**EXHIBITB**

**CITIGROUP GLOBAL MARKETS REALTY CORP.**

**SURVEYREQUIREMENTS**

The survey shall contain the following: 

 
 • 
The legal description of the Property; 

 
 • 
The courses and measured distances of the exterior boundary lines of the Property and the identification of owners of abutting parcels;

 
 • 
The total acreage of the Property to the nearest tenth of an acre; 

 
 • 
The location of any existing improvements, the dimensions thereof at the ground surface level and their relationship to the facing exterior propertylines, streets and set-back lines of the Property; 

 
 • 
The location, lines and widths of adjoining publicly dedicated and accepted streets showing the number and location of existing curb cuts, driveways,and fences; 

 
 • 
The location and dimensions of encroachments, if any, upon the Property; 

 
 • 
The location of all set-back lines, restrictions of record, other restrictions established by zoning or building code ordinance, utilities, easements,rights-of-way and other matters affecting title to the Property which are to be shown in Schedule B-2 of the Title Policy identifying each by reference to its recording data, where applicable; 

 
 • 
Evidence that adequate means of ingress and egress to and from the Property exist and that the Property does not serve any adjoining property foringress, egress or any other purpose; 

 
 • 
If the Property is described as being on a recorded map or plat, a legend relating the survey to such map or plat; 

 
 • 
The street address of the Property; 

 
 • 
Parking areas at the Property and, if striped, the striping and type (e.g., handicapped, motorcycle, regular, etc.) and number of parking spaces at theProperty; 

 
 • 
A statement as to whether the Property is located in a special flood or mudslide hazard area as determined by a review of a stated and identified FloodHazard Boundary Map published by the Federal Insurance

 

B-1 

 
Administration of the U.S. Department of Housing and Urban Development; 

 
 • 
A vicinity map showing the property in reference to nearby highways or major street intersections. 

 
 • 
The exterior dimensions of all buildings at ground level and the square footage of the exterior footprint of all buildings, or gross floor area of allbuildings, at ground level. 

 
 • 
The location of utilities serving or existing on the property as evidenced by on-site observation or as determined by records provided by client,utility companies and other appropriate sources (with reference as to the source of information) (for example) 

 
 • 
railroad tracks and sidings; 

 
 • 
manholes, catch basins, valve vaults or other surface indications of subterranean uses; 

 
 • 
wire and cables (including their function) crossing the surveyed premises, all poles on or within ten feet of the surveyed premises, and the dimensionsof all crosswires or overhangs affecting the surveyed premises; and 

 
 • 
utility company installations on the surveyed premises. 

 
 • 
A certificate in substantially the following form: 

The undersigned being a registered surveyor of the State of [State] hereby certifies to CITIGROUP GLOBAL MARKETS REALTY CORP., [NAME OF BORROWING ENTITY] and [INSERT NAME OF TITLE COMPANY], and each oftheir respective successors and assigns, as of the date below, as follows: 

This print of survey actually was made on theground on [INSERT DATE SURVEY WAS MADE] in accordance with the “Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys,” jointly established and adopted by American Land Title Association (“ALTA”) andAmerican Congress on Surveying & Mapping (“ACSM”) and National Society of Professional Surveyors (“NSPS”) in 1999, contains Items 1,2,3,4, 6,7(a), 7(b)(1), 8, 9, la, 11, 13, 14 and 16 of Table A thereto,and correctly shows: (i) a fixed and determinable position and location of the land described herein (together with the buildings and improvements thereon, the “Mortgaged Property”), including the position of the point ofbeginning; (ii) the location of all buildings, structures and other improvements situated on the land; (iii) all driveways or other curb cuts along any street or alley upon which the land abuts; (iv) the location and name of allpublic and private streets or alleys located thereon or adjacent thereto, all of which are public unless otherwise noted; (v) the location, 

 

B-2 

dimension and recording data of all easements, rights-of-way and other matters of record thereon or with respect to which the undersigned has knowledge; (vi) the location and dimension ofall unrecorded easements, paths, rights-of-way and party walls to the extent visible thereon or with respect to which the undersigned has knowledge; (vii) the location of applicable building restriction and setback lines required by localordinances and regulations; and (viii) the location of all encroachments or overhangs onto or from the Mortgaged Property. Except as shown on this survey, there are no visible discrepancies, conflicts, shortages in area or boundary lineconflicts. Except as shown on the survey, the Mortgaged Property does not serve any adjoining property for drainage, utilities or ingress or egress. The Mortgaged Property has access to and from a duly dedicated and accepted public roadway. Thissurvey reflects boundary lines of the land, which “close” by engineering calculations. All utility services to the Mortgaged Property either enter the Mortgaged Property through adjoining public streets, or this survey shows the point ofentry and location of any utilities which pass through or are located on adjoining private land to the extent visible or known to the undersigned. The Mortgaged Property does not lie within an area designated as a flood hazard area by any map orpublication of the U.S. Department of Housing and Urban Development or the Federal Emergency Management Agency. The Mortgaged Property and only the Mortgaged Property constitutes one tax lot. All zoning use and density classifications are properlyshown hereon. The undersigned has received and examined a copy of the Commitment for Title Insurance No.             , dated                    , issued by                                        ,with respect to the Mortgaged Property, as well as a copy of each instrument listed therein. The location of each exception set forth in such Commitment, to the extent it can be located, has (with recording reference and reference to the exceptionnumber of the Commitment) been shown hereon. The undersigned further certifies that this survey meets the Accuracy Standards (as adopted by ALTA, ACSM and NSPS and in effect on the date of this certification) and [SELECT ONE OF THE FOLLOWING TWOPHRASES]: 

[the Positional Uncertainties resulting from the survey measurements made on the survey do not exceed the allowablePositional Tolerance.] 

[the survey measurements were made in accordance with the “Minimum Angle, Distance and ClosureRequirements for Survey Measurements Which Control Land Boundaries for ALTA/ACSM Land Title Surveys.”] 

 
   
 
   , Licensed SurveyorDate:                                [seal]   
 

B-3 

**EXHIBIT C**

**SINGLE PURPOSE ENTITY PROVISIONS**

It is arequirement that the borrower be a bankruptcy remote, special purpose entity. A bankruptcy remote, special purpose entity is an entity which is unlikely to become insolvent as a result of its own activities and which is adequately insulated from theconsequences of any other party’s insolvency. Set forth below is language to be included in the organizational documents of corporations, limited partnerships and limited liability companies to evidence such entities’ existence asbankruptcy remote, special purpose entities. 

 
 I.CORPORATION 
If the SinglePurpose Entity is a corporation, its certificate of incorporation will have to have the following provisions to be considered a special purpose entity: 

 
 A.Purpose 
*Thecorporation’s purpose should be limited to owning and operating the mortgaged property (or interests in the Borrower).*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Corporation to the contrary, the following shall govern: The nature of thebusiness and of the purposes to be conducted and promoted by the Corporation, is to engage solely in the following activities: 

1. To acquire that certain parcel of real property, together with all improvements located thereon, in the City of                    , State of                    [                     interests in [insert Borrower or other applicable entity’s name]] (the “Property”). 

2. To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwise deal with the Property. 

3. To exercise all powers enumerated in the [General Corporation Law] of                     necessary or convenient to the conduct, promotion or attainment of the business or purposes otherwise set forth herein.

 
 B.Certain Prohibited Activities 
*The corporation shall be prohibited, except in certain circumstances, from engaging in certain activities, including various types of insolvency proceedings, dissolution, liquidation, consolidation,merger, sale of all or substantially all of the corporation’s assets, transfer of ownership assets, incurrence of additional debt and amendment of the corporation’s articles of incorporation.*

 

C-1 

“Notwithstanding any provision hereof or of any other documentgoverning the formation, management or operation of the Corporation to the contrary, the following shall govern: The Corporation shall only incur indebtedness in an amount necessary to acquire, operate and maintain the [Property] [use other term forthe real estate if necessary]. For so long as any mortgage lien exists on the [Property] [use other term for the real estate if necessary], the Corporation shall not incur, assume, or guaranty any other indebtedness. The Corporation shall notconsolidate or merge with or into any other entity or convey or transfer its properties and assets substantially as an entirety to any entity unless (i) the entity (if other than the Corporation) formed or surviving such consolidation or mergeror that acquired by conveyance or transfer the properties and assets of the Corporation substantially as an entirety (a) shall be organized and existing under the laws of the United States of America or any State or the District of Columbia,(b) shall include in its organizational documents the same limitations set forth in this Article          and in Article [insert section setting forth Separateness Covenants], and (c) shallexpressly assume the due and punctual performance of the Corporation’s obligations; and (ii) immediately after giving effect to such transaction, no default or event of default under any agreement to which it is a party shall have beencommitted by this corporation and be continuing. For so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary], the Corporation will not voluntarily commence a case with respect to itself, as debtor, underthe Federal Bankruptcy Code or any similar federal or state statute without the unanimous consent of the Board of Directors. For so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary], (ii) noamendment to this certificate of incorporation or to the Corporation’s By Laws may be made without first obtaining approval of the mortgagee holding a first mortgage lien on the [Property] [use other term for the real estate if necessary] and(ii) the Corporation shall not dissolve, terminate or liquidate.” 

“The Board of Directors maynot take any action requiring the unanimous affirmative vote of 100% of the members of the Board of Directors unless all directors including the Independent Directors shall have participated in such vote.” 

 
 C.Indemnification 
*Indemnification of a corporation’s directors and officers should be fully subordinated to obligations respecting the Property.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Corporation to

 

C-2 

the contrary, the following shall govern: Any indemnification shall be fully subordinated to any obligations respecting the [Property] [use other term for the real estate if necessary] and shallnot constitute a claim against the Corporation in the event that cash flow is insufficient to pay such obligations.” 

 
 D.Separateness Covenants 
*In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidated with those of another entity, the corporation must observe certain covenants designed to make evident the specialpurpose entity*’*s**separateness from its affiliates.*

“Notwithstanding any provisionhereof or of any other document governing the formation, management or operation of the Corporation to the contrary, the following shall govern: For so long as any mortgage lien exists on the [Property] [use other term for the real estate ifnecessary], in order to preserve and ensure its separate and distinct corporate identity, in addition to the other provisions set forth in this certificate of incorporation, the Corporation shall conduct its affairs in accordance with the followingprovisions: 

1. It shall establish and maintain an office through which its business shall be conductedseparate and apart from those of its parent and any affiliate and shall allocate fairly and reasonably any overhead for shared office space. 

2. It shall maintain separate corporate records and books of account from those of its parent and any affiliate. 

3. Its Board of Directors shall hold appropriate meetings (or act by unanimous consent) to authorize all appropriatecorporate actions, and in authorizing such actions, shall observe all corporate formalities. The Board of Directors shall include at least two (2) individuals who are Independent Directors. As used herein, an “IndependentDirector” shall mean an individual who shall not have been at the time of such individual’s appointment, and may not have been at any time (i) a partner, member, shareholder of, or an officer or employee of, the Corporation or anyof its respective partners, members, shareholders, subsidiaries or affiliates, (ii) a customer of, or supplier to, the Corporation or managing member of the Corporation or any of their respective partners, members, shareholders, subsidiaries oraffiliates, (iii) a person controlling any such partner, member, shareholder, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, employee, supplier or customer of any other director of theCorporation or of the managing member of the Corporation. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity,whether through ownership of voting securities, by contract or otherwise. 

 

C-3 

4. It shall not commingle assets with those of its parent and anyaffiliate. 

5. It shall conduct its own business in its own name. 

6. It shall maintain financial statements separate from its parent and any affiliate. 

7. It shall pay any liabilities out of its own funds, including salaries of any employees, not funds of its parent or anyaffiliate. 

8. It shall maintain an arm’s length relationship with its parent and any affiliate.

9. It shall maintain adequate capital in light of its contemplated business operations. 

10. It shall not guarantee or become obligated for the debts of any other entity, including its parent or any affiliate orhold out its credit as being available to satisfy the obligations of others. 

11. It shall not acquireobligations or securities of its partners, members or shareholders. 

12. It shall use stationery, invoices andchecks separate from its parent and any affiliate. 

13. It shall not pledge its assets for the benefit of anyother entity, including its parent and any affiliate or make any loans or advances to any other person. 

14.It shall hold itself out as an entity separate from its parent and any affiliate. 

15. It shall correct anyknown misunderstanding regarding its separate identity.” 

For purpose of this Article    , the following terms shall have the following meanings: 

“affiliate” means any person controlling or controlled by or under common control with the parent, including, without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise with anydirector, officer or employee of the Corporation, its parent, or any affiliate thereof and (ii) any person which receives compensation for

 

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administrative, legal or accounting services from this corporation, its parent or any affiliate. For purposes of this definition, “control” when used with respect to any specifiedperson, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” havemeanings correlative to the foregoing. 

“parent” means, with respect to a corporation, anyother corporation owning or controlling, directly or indirectly, fifty percent (50%) or more of the voting stock of the Corporation. 

“person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof),unincorporated organization, or government or any agency or political subdivision thereof. 

 
 II.LIMITED PARTNERSHIP 
If theSingle Purpose Entity is a limited partnership, to be a special purpose entity, all of its general partners shall be special purpose entities. If such limited partnership has more than one general partner, then such limited partnership shallcontinue (and not dissolve) for so long as a solvent general partner exists. Consequently, both the limited partnership’s partnership agreement and the certificate of incorporation of its general partner(s) will have to meet certainrequirements to be considered special purpose entities. Such requirements are as follows: 

 
 A.Limited Partnership Agreement 
 
 a.Purpose 
*Thelimited partnership’s purpose should be limited to owning and operating the mortgaged property.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Partnership to the contrary, the following shall govern: The nature of the business and of the purposes to beconducted and promoted by the Partnership, is to engage solely in the following activities: 

1. To acquirethat certain parcel of real property, together with all improvements located thereon, in the City of                     , State of                    [                     interests in [insert Borrower or other applicable entity’s name]] (the “Property”). 

2. To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwise deal with the Property. 

 

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3. To exercise all powers enumerated in the Uniform Limited Partnership Actof                      necessary or convenient to the conduct, promotion or attainment of the business or purposes otherwise set forthherein.” 

 
 b.Certain Prohibited Activities 
*The partnership shall be prohibited, except in certain circumstances, from engaging in certain activities, including various types of insolvency proceedings, dissolution, liquidation, consolidation,merger, sale of all or substantially all of the partnership’s assets, transfer of partnership interests, incurrence of additional debt and amendment of the partnership agreement.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of thePartnership to the contrary, the following shall govern: The Partnership shall only incur indebtedness in an amount necessary to acquire, operate and maintain the [Property] [use other term for the real estate if necessary]. For so long as anymortgage lien exists on the [Property] [use other term for the real estate if necessary], the Partnership shall not incur, assume, or guaranty any other indebtedness. The Partnership shall not consolidate or merge with or into any other entity orconvey or transfer its properties and assets substantially as an entirety to any entity unless (i) the entity (if other than the Partnership) formed or surviving such consolidation or merger or that acquired by conveyance or transfer theproperties and assets of the Partnership substantially as an entirety (a) shall be organized and existing under the laws of the United States of America or any State or the District of Columbia, (b) shall include in its organizationaldocuments the same limitations set forth in this Article          and in Article [insert section setting forth Separateness Covenants], and (c) shall expressly assume the due and punctualperformance of the Partnership’s obligations; and (ii) immediately after giving effect to such transaction, no default or event of default under any agreement to which it is a party shall have been committed by this partnership and becontinuing. For so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary], the Partnership will not voluntarily commence a case with respect to itself, as debtor, under the Federal Bankruptcy Code or anysimilar federal or state statute without the unanimous consent of all of the partners of the Partnership. For so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary], (i) no amendment to thispartnership agreement may be made and (ii) the partnership shall not dissolve, liquidate or terminate without first obtaining approval of the mortgagee holding a first mortgage lien on the [Property] [use other term for the real estate ifnecessary] .” 

 

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 c.Indemnification 
*Indemnification of a partnership’s partners should be fully subordinated to obligations respecting the Property.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Partnership to the contrary, the following shall govern: Any indemnificationshall be fully subordinated to any obligations respecting the [Property] [use other term for the real estate if necessary] and shall not constitute a claim against the Partnership in the event that cash flow is insufficient to pay suchobligations.” 

 
 d.Separateness Covenants 
*In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidated with those of another entity, the partnership must observe certain covenants designed to make evident the specialpurpose entity’s separateness from its affiliates.*

“Notwithstanding any provision hereof or ofany other document governing the formation, management or operation of the Partnership to the contrary, the following shall govern: For so long as any mortgage lien exists on the [Property] [use other term for the real estate if necessary], in orderto preserve and ensure its separate and distinct identity, in addition to the other provisions set forth in this partnership agreement, the Partnership shall conduct its affairs in accordance with the following provisions: 

1. It shall establish and maintain an office through which its business shall be conducted separate and apart from that ofany of its affiliate and shall allocate fairly and reasonably any overhead for shared office space. 

2. Itshall maintain separate partnership records and books of account from those of any affiliate. 

3. It shall notcommingle assets with those of any affiliate. 

4. It shall conduct its own business in its own name.

5. It shall observe all partnership formalities. 

6. It shall maintain financial statements separate from any affiliate. 

7. It shall pay any liabilities out of its own funds, including salaries of any employees, not funds of any affiliate.

 

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8. It shall maintain an arm’s length relationship with any affiliate.

9. It shall maintain adequate capital in light of its contemplated business operations. 

10. It shall not guarantee or become obligated for the debts of any other entity, including any affiliate, or hold out itscredit as being available to satisfy the obligations of others. 

11. It shall not acquire obligations orsecurities of its partners, members or shareholders. 

12. It shall use stationery, invoices and checksseparate from any affiliate. 

13. It shall not pledge its assets for the benefit of any other entity,including any affiliate or make any loans or advances to any other person. 

14. It shall hold itself out as anentity separate from any affiliate. 

15. It shall correct any known misunderstanding regarding its separateidentity. 

16. At all times have all of its general partners shall be special purpose corporate entities withat least two (2) Independent Directors.” 

For purposes of this Article        , the following terms shall have the following meanings: 

“affiliate” means any person controlling or controlled by or under common control with the Partnership including, without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise withany partner or employee of the Partnership, or any affiliate thereof and (ii) any person which receives compensation for administrative, legal or accounting services from this partnership, or any affiliate. For purposes of this definition,“control” when used with respect to any specified person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and theterms “controlling” and “controlled” have meanings correlative to the foregoing. 

“Independent Director” shall mean an individual who shall not have been at the time of such individual’s appointment, and may not have been at any time (i) a partner, member, shareholder of, or an officer oremployee of, the Partnership or any of its respective partners, members,

 

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shareholders, subsidiaries or affiliates, (ii) a customer of, or supplier to, the Partnership or managing member of the Partnership or any of their respective partners, members,shareholders, subsidiaries or affiliates, (iii) a person controlling any such partner, member, shareholder, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, employee, supplier or customer ofany other director of the Partnership or of the managing member of the Partnership. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management andpolicies of a person or entity, whether through ownership of voting securities, by contract or otherwise. 

“person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization, or government orany agency or political subdivision thereof. 

 
 e.Dissolution 
*The limited partnership agreement should provide that the partnership will continue (and not dissolve) so long as a solvent general partner exists.*

“Notwithstanding any provision or of any other document governing the formation, management or operation of thePartnership hereof to the contrary, the following shall govern: The Partnership shall not terminate solely as a consequence of the [Bankruptcy] of one or more of the general partners of the Partnership so long as there remains a solvent generalpartner of the Partnership.” 

*In addition, dissolution of the partnership must not occur so long asthe partnership remains mortgagor of the mortgaged property.*

“Notwithstanding any provision hereofor of any other document governing the formation, management or operation of the Partnership to the contrary, the following shall govern: Subject to applicable law, dissolution of the Partnership shall not occur so long as the Partnership remainsmortgagor of the [Property] [use other term for the real estate if necessary] .” 

 
 B.Corporate General Partner 
 
 a.Purpose 
*Thecorporation’s purpose should be limited to acting as general partner of the limited partnership whose purpose, as set forth above, generally should be limited to owning and operating the mortgaged property.*

 

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“Notwithstanding any provision hereof or of any other documentgoverning the formation, management or operation of the Corporation to the contrary, the following shall govern: The nature of the business and of the purposes to be conducted and promoted by the Corporation is to engage solely in the activity ofacting as a general partner of a limited partnership (the “Partnership”) whose purpose is to acquire that certain parcel of real property, together with all improvements located thereon, in the City of                    , State of                     (the “Property”) and own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwisedeal with the Property. The Corporation shall exercise all powers enumerated in the General Corporation Law of                      necessaryor convenient to the conduct, promotion or attainment of the business or purposes otherwise set forth herein.” 

 
 b.Certain Prohibited Activities 
*The corporation shall be prohibited, except in certain circumstances, from engaging in or causing the partnership to engage in certain activities, including various types of insolvency proceedings,dissolution, liquidation, consolidation, merger, sale of all or substantially all of the corporation’s or partnership’s assets, transfer of ownership assets, transfer of partnership interests, incurrence of additional debt, amendment ofthe corporation’s articles of incorporation and amendment of the partnership agreement.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Corporation to the contrary, the following shall govern: The Corporation shall only incur or cause the Partnershipto incur indebtedness in an amount necessary to acquire, operate and maintain the Property. For so long as any mortgage lien exists on the Property, the Corporation shall not and shall not cause the Partnership to incur, assume, or guaranty anyother indebtedness. For so long as the Partnership remains mortgagor of the Property, the Corporation shall not cause the Partnership to dissolve. The Corporation shall not and shall not cause the Partnership to consolidate or merge with or into anyother entity or convey or transfer its properties and assets substantially as an entirety to any entity unless (i) the entity (if other than the Corporation or Partnership) formed or surviving such consolidation or merger or that acquired byconveyance or transfer the properties and assets of the Corporation or Partnership substantially as an entirety (a) shall be organized and existing under the laws of the United States of America or any State or the District of Columbia,(b) shall include in its organizational documents the same limitations set forth in this Article                      and in Article[insert section setting forth Separateness Covenants], and (c) shall expressly assume the due and punctual performance of the Corporation’s obligations; and (ii) immediately after giving effect to such transaction, no default or eventof default under any agreement to which it is a party shall

 

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have been committed by this corporation or the Partnership and be continuing. For so long as a mortgage lien exists on the Property, the Corporation shall not voluntarily commence a case withrespect to itself or cause the Partnership to voluntarily commence a case with respect to itself, as debtor, under the Federal Bankruptcy Code or any similar federal or state statute without the unanimous consent of the Board of Directors. For solong as a mortgage lien exists on the Property, (i) no amendment to this certificate of incorporation or to the Corporation’s By Laws nor to the Partnership agreement of the Partnership may be made and (ii) neither the Corporation northe Partnership shall be dissolved, liquidated or terminated without first obtaining approval of the mortgagee holding a first mortgage lien on the Property.” 

“The Board of Directors may not take any action requiring the unanimous affirmative vote of 100% of the members of theBoard of Directors unless all directors including the Independent Directors shall have participated in such vote.” 

 
 c.Indemnification 
*Indemnification of a corporation’s directors and officers should be fully subordinated to obligations respecting the Property.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Corporation to the contrary, the following shall govern: Any indemnificationshall be fully subordinated to any obligations respecting the Partnership or the Property and shall not constitute a claim against the Corporation in the event that cash flow is insufficient to pay such obligations.” 

 
 d.Separateness Covenants 
*In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidated with those of another entity, the Corporation must observe certain covenants designed to make evident the specialpurpose entity’s separateness from its affiliates.*

“Notwithstanding any provision hereof or ofany other document governing the formation, management or operation of the Corporation to the contrary, the following shall govern: For so long as any mortgage lien exists on the Property, in order to preserve and ensure its separate and distinctcorporate identity, in addition to the other provisions set forth in this certificate of incorporation, the Corporation shall conduct its affairs in accordance with the following provisions: 

1. It shall establish and maintain an office through which its business shall be conducted separate and apart from those ofits parent and any affiliate and shall allocate fairly and reasonably any overhead for shared office space. 

 

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2. It shall maintain separate corporate records and books of account fromthose of its parent and any affiliate. 

3. Its Board of Directors shall hold appropriate meetings (or act byunanimous consent) to authorize all appropriate corporate actions, and in authorizing such actions, shall observe all corporate formalities. The Board of Directors shall include at least two (2) individuals who are Independent Directors. Asused herein, an “Independent Director” shall mean an individual who shall not have been at the time of such individual’s appointment, and may not have been at any time (i) a partner, member, shareholder of, or an officer oremployee of, the Corporation or any of its respective partners, members, shareholders, subsidiaries or affiliates, (ii) a customer of, or supplier to, the Corporation or managing member of the Corporation or any of their respective partners,members, shareholders, subsidiaries or affiliates, (iii) a person controlling any such partner, member, shareholder, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, employee, supplier orcustomer of any other director of the Corporation or of the managing member of the Corporation. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of themanagement and policies of a person or entity, whether through ownership of voting securities, by contract or otherwise. 

4. It shall not commingle assets with those of its parent and any affiliate. 

5. It shall conduct its own business in its own name. 

6. Itshall maintain financial statements separate from its parent and any affiliate. 

7. It shall pay anyliabilities out of its own funds, including salaries of any employees, not funds of its parent or any affiliate. 

8. It shall maintain an arm’s length relationship with its parent and any affiliate. 

9. Itshall maintain adequate capital in light of its contemplated business operations. 

10. It shall not guaranteeor, except to the extent of its liability for the debt secured by such mortgage lien, become obligated for the debts of any other entity, including its parent or any affiliate or hold out its credit as being available to satisfy the obligations ofothers. 

 

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11. It shall not acquire obligations or securities of its partners, membersor shareholders. 

12. It shall use stationery, invoices and checks separate from its parent and any affiliate.

13. It shall not pledge its assets for the benefit of any other entity, including its parent and anyaffiliate or make any loans or advances to any other person. 

14. It shall hold itself out as an entityseparate from its parent and any affiliate. 

15. It shall correct any known misunderstanding regarding itsseparate identity.” 

For purposes of this Article            , the following terms shall have the following meanings: 

“affiliate” means any person controlling or controlled by or under common control with the parent, including, without limitation (i) any person who has a familial relationship, byblood, marriage or otherwise with any director, officer or employee of the Corporation, its parent, or any affiliate thereof and (ii) any person which receives compensation for administrative, legal or accounting services from this corporation,its parent or any affiliate. For purposes of this definition, “control” when used with respect to any specified person, means the power to direct the management and policies of such person, directly or indirectly, whether through theownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. 

“parent” means, with respect to a corporation, any other corporation owning or controlling, directly orindirectly, fifty percent (50%) or more of the voting stock of the Corporation. 

“person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization, or government orany agency or political subdivision thereof. 

 
 III.LIMITED LIABILITY COMPANY 
Ifthe Single Purpose Entity is a limited liability company, to be a special purpose entity, each managing member shall be a special purpose corporation. If such limited liability company has more than one managing member, then such limited liabilitycompany shall continue (and not dissolve) for so long as a solvent managing member exists. Consequently, both the Limited Liability Company’s articles of organization and the certificate of incorporation of its outside member will have to meetcertain requirements to be considered special purpose entities. Such requirements are as follows: 

 

 
 A.Articles of Organization 
 
 a.Purpose 
*Thelimited liability company’s purpose should be limited to owning and operating the mortgaged property.*

 

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“Notwithstanding any provision hereof or of any other documentgoverning the formation, management or operation of the Limited Liability Company to the contrary, the following shall govern: The nature of the business and of the purposes to be conducted and promoted by the Limited Liability Company, is to engagesolely in the following activities: 

1. To acquire that certain parcel of real property, together with allimprovements located thereon, in the City of              State of             [             interests in [insert Borrower or other applicable entity’s name]] (the “Property”). 

2. To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwise deal with the Property. 

3. To exercise all powers enumerated in the Limited Liability Company Act of             necessary or convenient to the conduct, promotion or attainment of the business or purposes otherwise set forth herein.” 

 
 b.Certain Prohibited Activities 
*The limited liability company shall be prohibited, except in certain circumstances from engaging in certain activities, including various types of insolvency proceedings, dissolution, liquidation,consolidation, merger, sale of all or substantially all of the limited liability company’s assets, transfer of limited liability company interests, incurrence of additional debt and amendment of the articles of organization.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theLimited Liability Company to the contrary, the following shall govern: The Limited Liability Company shall only incur indebtedness in an amount necessary to acquire, operate and maintain the [Property] [use other term for the real estate ifnecessary]. For so long as any mortgage lien exists on the [Property] [use other term for the real estate if necessary], the Limited Liability Company shall not incur, assume, or guaranty any other indebtedness. The Limited Liability Company shallnot consolidate or merge with or into any other entity or convey or transfer its properties and

 

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assets substantially as an entirety to any entity unless (i) the entity (if other than the Limited Liability Company) formed or surviving such consolidation or merger or that acquired byconveyance or transfer the properties and assets of the Limited Liability Company substantially as an entirety (a) shall be organized and existing under the laws of the United States of America or any State or the District of Columbia,(b) shall include in its organizational documents the same limitations set forth in this Article              and in Article [insert section setting forth SeparatenessCovenants], and (c) shall expressly assume the due and punctual performance of the Limited Liability Company’s obligations; and (ii) immediately after giving effect to such transaction, no default or event of default under anyagreement to which it is a party shall have been committed by this limited liability company and be continuing. For so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary], the Limited Liability Companywill not voluntarily commence a case with respect to itself, as debtor, under the Federal Bankruptcy Code or any similar federal or state statute without the unanimous consent of all of the members of the Limited Liability Company. For so long as amortgage lien exists on the [Property] [use other term for the real estate if necessary], (i) no amendment to these articles of organization may be made and (ii) the Limited Liability Company shall not be dissolved, liquidated orterminated without first obtaining approval of the mortgagee holding a first mortgage lien on the [Property] [use other term for the real estate if necessary].” 

 
 c.Indemnification 
*Indemnification of a limited liability company’s partners should be fully subordinated to obligations respecting the Property.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Limited Liability Company to the contrary, the following shall govern: Anyindemnification shall be fully subordinated to any obligations respecting the [Property] [use other term for the real estate if necessary] and shall not constitute a claim against the Limited Liability Company in the event that cash flow isinsufficient to pay such obligations.” 

 
 d.Separateness Covenants 
*In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidated with those of another entity, the limited liability company must observe certain covenants designed to make evidentthe special purpose entity’s separateness from its affiliates.*

 

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“Notwithstanding any provision hereof or of any other documentgoverning the formation, management or operation of the Limited Liability Company to the contrary, the following shall govern: For so long as any mortgage lien exists on the [Property] [use other term for the real estate if necessary], in order topreserve and ensure its separate and distinct identity, in addition to the other provisions set forth in these articles of organization, the Limited Liability Company shall conduct its affairs in accordance with the following provisions: 

1. It shall establish and maintain an office through which its business shall be conducted separate and apart from thatof any of its affiliates and shall allocate fairly and reasonably any overhead for shared office space. 

2. Itshall maintain separate records and books of account from those of any affiliate. 

3. It shall not commingleassets with those of any affiliate. 

4. It shall conduct its own business in its own name. 

5. It shall maintain financial statements separate from any affiliate. 

6. It shall pay any liabilities out of its own funds, including salaries of any employees, not funds of any affiliate.

7. It shall maintain an arm’s length relationship with any affiliate. 

8. It shall maintain adequate capital in light of its contemplated business operations. 

9. It shall not guarantee or become obligated for the debts of any other entity, including any affiliate, or hold out itscredit as being available to satisfy the obligations of others. 

10. It shall not acquire obligations orsecurities of its partners, members or shareholders. 

11. It shall use stationery, invoices and checksseparate from any affiliate. 

12. It shall not pledge its assets for the benefit of any other entity,including any affiliate or make any loans or advances to any other person. 

 

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13. It shall hold itself out as an entity separate from any affiliate.

14. It shall correct any known misunderstanding regarding its separate identity. 

15. At all times all managing members shall be a special purpose corporate member with at least two (2) IndependentDirectors.” 

For purposes of this Article     , the following terms shall havethe following meanings: 

“affiliate” means any person controlling or controlled by or undercommon control with the Limited Liability Company including, without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise with any partner or employee of the Limited Liability Company, or any affiliatethereof and (ii) any person which receives compensation for administrative, legal or accounting services from this limited liability company, or any affiliate. For purposes of this definition, “control” when used with respect to anyspecified person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and“controlled” have meanings correlative to the foregoing. 

“Independent Director”shall mean an individual who shall not have been at the time of such individual’s appointment, and may not have been at any time (i) a partner, member, shareholder of, or an officer or employee of, the Limited Liability Company or any ofits respective partners, members, shareholders, subsidiaries or affiliates, (ii) a customer of, or supplier to, the Limited Liability Company or managing member of the Limited Liability Company or any of their respective partners, members,shareholders, subsidiaries or affiliates, (iii) a person controlling any such partner, member, shareholder, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, employee, supplier or customer ofany other director of the Limited Liability Company or of the managing member of the Limited Liability Company. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the directionof the management and policies of a person or entity, whether through ownership of voting securities, by contract or otherwise. 

“person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof),unincorporated organization, or government or any agency or political subdivision thereof. 

 

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 e.Dissolution 
*To the extent permitted by tax law the articles of organization should provide that the vote of a majority in interest of the remaining members is sufficient to continue the life of the limited liability company. If such vote is notobtained, for so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary] the limited liability company may not be permitted to liquidate the [Property] [use other term for the real estate if necessary]without first obtaining approval of the mortgagee holding a first mortgage lien on the [Property] [use other term for the real estate if necessary). Such holders may continue to exercise all of their rights under the existing security agreements ormortgages until the debt underlying the mortgage lien has been paid in full or otherwise completely discharged.”*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Limited Liability Company to the contrary, the following shall govern: To theextent permissible under applicable federal and state tax law, the vote of a majority in interest of the remaining members is sufficient to continue the life of the Limited Liability Company. If such vote is not obtained, for so long as a mortgagelien exists on the [Property] [use other term for the real estate if necessary] the Limited Liability Company shall not liquidate the [Property] [use other term for the real estate if necessary] without first obtaining approval of the mortgageeholding a first mortgage lien on the [Property] [use other term for the real estate if necessary]. Such holders may continue to exercise all of their rights under the existing security agreements or mortgages until the debt underlying the mortgageliens has been paid in full or otherwise completely discharged. 

 
 f.Voting 
*Whenacting on matters subject to the vote of the members, notwithstanding that the limited liability company is not then insolvent, the members and the outside member must take into account the interest of the Limited Liability Company’s creditors,as well as those of the members.*

“Notwithstanding any provision hereof or of any other documentgoverning the formation, management or operation of the Limited Liability Company to the contrary, the following shall govern: When acting on matters subject to the vote of the members, notwithstanding that the Limited Liability Company is not theninsolvent, all of the members shall take into account the interest of the Limited Liability Company’s creditors, as well as those of the members.” 

 

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 B.Outside Corporate Member 
 
 a.Purpose 
*Theoutside corporate member’s purpose should be limited to acting as corporate member of the limited liability company whose purpose, as set forth above, generally should be limited to owning and operating the mortgaged property.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation ofthe Corporation to the contrary, the following shall govern: The nature of the business and of the purposes to be conducted and promoted by the Corporation is to engage solely in the activity of acting as the outside member of a limited liabilitycompany (the “Limited Liability Company”) whose purpose is to acquire that certain parcel of real property, together with all improvements located thereon, in the City of                    , State of                     (the “Property”) and own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwisedeal with the Property. The Corporation shall exercise all powers enumerated in the General Corporation Law of                      necessaryor convenient to the conduct, promotion or attainment of the business or purposes otherwise set forth herein.” 

 
 b.Certain Prohibited Activities 
*The corporation shall be prohibited, except in certain circumstances, from engaging in or causing the limited liability company to engage in certain activities, including various types of insolvencyproceedings, dissolution, liquidation, consolidation, merger, sale of all or substantially all of the corporation’s or the limited liability company’s assets, transfer of ownership assets, transfer of limited liability company interests,incurrence of additional debt, amendment of the corporation’s articles of incorporation and amendment of the articles of organization.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Corporation to the contrary, the following shall govern: The Corporation shallonly incur or cause the Limited Liability Company to incur indebtedness in an amount necessary to acquire, operate and maintain the Property. For so long as any mortgage lien exists on the Property, the Corporation shall not and shall not cause theLimited Liability Company to incur, assume, or guaranty any other indebtedness. The Corporation shall not and shall not cause the Limited Liability Company to consolidate or merge with or into any other entity or convey or transfer its propertiesand assets substantially as an entirety to any entity unless (i) the entity (if other than the Corporation or Limited Liability Company) formed or surviving such consolidation or merger or that acquired by conveyance or transfer of the

 

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properties and assets of the Corporation or Limited Liability Company substantially as an entirety (a) shall be organized and existing under the laws of the United States of America or anyState or the District of Columbia, (b) shall include in its organizational documents the same limitations set forth in this Article          and in Article [insert section setting forthSeparateness Covenants], and (c) shall expressly assume the due and punctual performance of the Corporation’s obligations; and (ii) immediately after giving effect to such transaction, no default or event of default under anyagreement to which it is a party shall have been committed by this corporation or the Limited Liability Company and be continuing. For so long as a mortgage lien exists on the Property, the Corporation shall not voluntarily commence a case withrespect to itself or cause the Limited Liability Company to voluntarily commence a case with respect to itself, as debtor, under the Federal Bankruptcy Code or any similar federal or state statute without the unanimous consent of the Board ofDirectors. For so long as a mortgage lien exists on the Property, without first obtaining approval of the mortgagee holding a first mortgage lien on the Property (i) no material amendment to this certificate of incorporation or to theCorporation’s By Laws nor to the articles of organization of the Limited Liability Company may be made and (ii) neither the Corporation nor the Limited Liability Company shall dissolve, liquidate or terminate without first obtainingapproval of the mortgagee holding a first mortgage lien on the Property.” 

“The Board of Directorsmay not take any action requiring the unanimous affirmative vote of 100% of the members of the Board of Directors unless all directors including the Independent Directors shall have participated in such vote.” 

 
 c.Indemnification 
*Indemnification of a corporation’s directors and officers should be fully subordinated to obligations respecting the Property.*

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of the Corporation to the contrary, the following shall govern: Any indemnificationshall be fully subordinated to any obligations respecting the Limited Liability Company or the Property and shall not constitute a claim against the Corporation in the event that cash flow is insufficient to pay such obligations.” 

 
 d.Separateness Covenants 
*In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidated with those of another entity, the corporation must observe certain covenants designed to make evident the specialpurpose entity’s separateness from its affiliates.*

 

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“Notwithstanding any provision hereof or of any other documentgoverning the formation, management or operation of the Corporation to the contrary, the following shall govern: For so long as any mortgage lien exists on the Property, in order to preserve and ensure its separate and distinct corporate identity,in addition to the other provisions set forth in this certificate of incorporation, the Corporation shall conduct its affairs in accordance with the following provisions: 

1. It shall establish and maintain an office through which its business shall be conducted separate and apart from those ofits parent and any affiliate and shall allocate fairly and reasonably any overhead for shared office space. 

2. It shall maintain separate corporate records and books of account from those of its parent and any affiliate. 

3. Its Board of Directors shall hold appropriate meetings (or act by unanimous consent) to authorize all appropriate corporate actions, and in authorizing such actions, shall observe all corporateformalities. The Board of Directors shall include at least two (2) individuals who are Independent Directors. As used herein, an “Independent Director” shall mean an individual who shall not have been at the time of suchindividual’s appointment, and may not have been at any time (i) a partner, member, shareholder of, or an officer or employee of, the Corporation or any of its respective partners, members, shareholders, subsidiaries or affiliates,(ii) a customer of, or supplier to, the Corporation or managing member of the Corporation or any of their respective partners, members, shareholders, subsidiaries or affiliates, (iii) a person controlling any such partner, member,shareholder, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, employee, supplier or customer of any other director of the Corporation or of the managing member of the Corporation. As used herein,the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through ownership of voting securities, by contract or otherwise.

4. It shall not commingle assets with those of its parent and any affiliate. 

5. It shall conduct its own business in its own name. 

6. It shall maintain financial statements separate from its parent and any affiliate. 

 

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7. It shall pay any liabilities out of its own funds, including salaries ofany employees, not funds of its parent or any affiliate. 

8. It shall maintain an arm’s lengthrelationship with its parent and any affiliate. 

9. It shall maintain adequate capital in light of itscontemplated business operations. 

10. It shall not guarantee or become obligated for the debts of any otherentity, including its parent or any affiliate or hold out its credit as being available to satisfy the obligations of others. 

11. It shall not acquire obligations or securities of its partners, members or shareholders. 

12. It shall use stationery, invoices and checks separate from its parent and any affiliate. 

13. It shall not pledge its assets for the benefit of any other entity, including its parent and any affiliate or make any loans or advances to any other person. 

14. It shall hold itself out as an entity separate from its parent and any affiliate. 

15. It shall correct any known misunderstanding regarding its separate identity.” 

For purpose of this Article         , the following terms shall have thefollowing meanings: 

“affiliate” means any person controlling or controlled by or undercommon control with the parent, including, without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise with any director, officer or employee of the Corporation, its parent, or any affiliate thereof and(ii) any person which receives compensation for administrative, legal or accounting services from this corporation, its parent or any affiliate. For purposes of this definition, “control” when used with respect to any specifiedperson, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” havemeanings correlative to the foregoing. 

“parent” means, with respect to a corporation, anyother corporation owning or controlling, directly or indirectly, fifty percent (50%) or more of the voting stock of the Corporation. 

 

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“person” means any individual, corporation, partnership,limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization, or government or any agency or political subdivision thereof. 

 
 e.Voting 
*Whenvoting on matters concerning the limited liability company, notwithstanding that the limited liability company is not then insolvent, the Corporation must take into account the interest of the Limited Liability Company’s creditors, as well asthose of its members.*

“Notwithstanding any provision hereof or of any other document governing theformation, management or operation of the Corporation to the contrary, the following shall govern: When voting on matters concerning the Limited Liability Company, notwithstanding that the Limited Liability Company is not then insolvent, theCorporation shall take into account the interest of the Limited Liability Company’s creditors, as well as those of its members.” 

 
 IV.OTHER STRUCTURES 
The foregoingprovisions do not exhaustively contemplate all ownership structures for a mortgaged property. Situations involving ownership structures not specifically contemplated by the provisions set forth on this Exhibit C shall nevertheless require SinglePurpose Entities substantively to comply with the requirements to these provisions, modified as appropriate to accommodate the ownership structure in question. 

 

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**EXHIBIT D**

**ENFORCEABILITY OPINION REQUIREMENTS**

1. TheOpinion shall be delivered on the Closing Date and shall satisfy all applicable requirements of the Rating Agencies in relation thereto. 

2. The Opinion shall be given by a professional law firm selected by Borrower and reasonably acceptable to Lender. 

3. The Opinion shall be in form and substance acceptable to Lender and shall be given in relation to Borrower, Guarantor, Manager and any other relevant party to the Loan (each a “LoanParty”). Depending on the nature of the transaction, the Opinion shall address the applicable law of the State of New York, the State where the Property is located and each State where any Loan Party is organized (collectively, the“Relevant States”). To the extent that the Property is located in a jurisdiction outside of the State of New York and/or any Loan Party is organized under a jurisdiction outside the States of New York or Delaware, the appropriateopinions below should be given by local counsel. The Opinion shall be given on the basis of an examination of an executed original of each completed Loan Document in addition to such other documents or instruments counsel deems relevant. 

4. The Opinion shall contain the following opinions: 

**Opinions with respect to the law of the State of Formation or Organization of the Loan Parties**

(a) Each Loan Party is a [*Describe Legal Form*] duly organized, validly existing and in good standing under the laws of the State of [*State of Organization*] and is authorized to do businessand in good standing in the State of [*State of Organization*]. 

(b) Each Loan Party has the requisite power to own itsproperties and to carry on its business as now being conducted and to enter into the transactions covered by the Loan Documents. 

(c) The execution and delivery by each Loan Party of each Loan Document to which it is a party has been duly authorized by all necessary partnership, company and/or corporate action, as applicable. To the extent a party thereto, the LoanDocuments have been duly executed and delivered by each Loan Party. 

(d) The execution, delivery and performance by each LoanParty of the Loan Documents to which it is a party does not: 

(i) conflict with or result in a breach of any ofthe terms, conditions or provisions of, or constitute a default under, the partnership agreement, partnership certificate, articles of incorporation, by-laws, trust agreement or trust certificate, as applicable, of such Loan Party; 

 

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(ii) contravene any law, statute or regulation of the United States ofAmerica or the **[*State of Organization*]**or any agency or political subdivision of either thereof; 

(iii) violate any order, writ, injunction, or decree of which, after due inquiry, counsel has actual knowledge, issued by any court or governmental authority of the United States of America or the **[*State of Organization*]**or any agency or political subdivision of either thereof to which such Loan Party is subject; or 

(iv)conflict with or result in any breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien other than the lien of the Loan Documents upon anyof the assets or properties of such Loan Party pursuant to the terms of any material indenture, mortgage, deed of trust, agreement, contract or instrument to which such Loan Party is a party or by which it or any of its assets or properties isbound. 

(e) No order, consent, approval, license or authorization of, or filing, recording or registration with, anygovernmental or public body or authority of the United States of America or the State of **[*Relevant State*]**or any agency or political subdivision of either thereof is required in connection with the execution and delivery of anyof the Loan Documents, the validity, binding effect or enforceability of any of the Loan Documents or the consummation of the transactions contemplated thereby. 

(f) There are no actions, suits or proceedings by or before any court, governmental or regulatory authority or agency of which, after due inquiry, we have actual knowledge pending or threatened against oraffecting any Loan Party or Borrower’s rights with respect to the Property wherein an adverse ruling or decision, individually or collectively with other such actions, suits or proceedings, is reasonably likely (i) to affect materially andadversely the ability of any Loan Party to consummate the transactions contemplated by the Loan Documents or to perform its obligations under any of the Loan Documents, or (ii) to result in a challenge to the legality, validity, binding effector enforceability of any of the Loan Documents. 

(g) To the extent the State of **[*State of Organization*]**UCC is applicable to the authorization of the Financing Statement, pursuant to the provisions of the Loan Agreement and the Security Instrument, Borrower has authorized the filing of the Financing Statement for purposes of Section 9-509 ofthe State of **[*State of Organization*]**UCC. 

(h) To the extent the State of **[*State ofOrganization*]**UCC is applicable, the financing Statement includes not only all of the types of information required by Section 9-502(a) of the State of **[*State of Organization*]**UCC but also the types ofinformation without which the Filing Office may refuse to accept the Financing Statement pursuant to Section 9-516 of the State of **[***State of Organization*] UCC. 

(i) To the extent the State of **[*State of Organization*]**UCC is applicable, the security interest of the Secured Partywill be perfected in Borrower’s rights in all UCC Collateral upon the later of the attachment of the security interest and the filing of the Financing Statement in the Filing Office; provided, however, we express no opinion with respect to(i) money, (ii) deposit accounts, (iii) letter of credit rights, (iv) goods covered by a certificate of title statute,

 

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(v) as-extracted collateral, timber to be cut, or (vi) any property subject to a statute, regulation or treaty of the United States whose requirements for a security interest’sobtaining priority over the rights of a lien creditor with respect to the property preempt Section 9-3 10(a) of the State of **[*State of Organization*]*.*“UCC Collateral” means the portion of the Property (asdefined in the Security Instrument), the Rate Cap Collateral, the Account Collateral (as defined in the Loan Agreement) and the Collateral Accounts (as defined in the Account Agreement) to the extent the UCC governs a security interest in suchcollateral. 

(j) You have asked whether Borrower is a “registered organization” as such term is defined inSection 9-1 02(a)(70) of the State of **[*State of Organization*]**UCC. Pursuant to Section 9-102(a)(70) of the State of **[*State of Organization*]**UCC, a “registered organization” must be(i) organized solely under the laws of a single State (or the United States) and (ii) the State (or the United States) must maintain a public record showing the organization to have been organized. 

**Opinions with respect to New York Law**

(a) To the extent governed by New York law and to the extent a party thereto, the Loan Documents are the legal, valid and binding obligations of each Loan Party, enforceable against such Loan Party inaccordance with their terms. 

(b) The execution, delivery and performance by each Loan Party of the Loan Documents to which itis a party does not: 

(i) contravene any law, statute or regulation of the United States of America or theState of New York or any agency or political subdivision of either thereof; 

(ii) violate any order, writ,injunction, or decree of which, after due inquiry, counsel has actual knowledge, issued by any court or governmental authority of the United States of America or the State of New York or any agency or political subdivision of either thereof to whichsuch Loan Party is subject; or 

(iii) conflict with or result in any breach of any of the terms or provisionsof, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien other than the lien of the Loan Documents upon any of the assets or properties of such Loan Party pursuant to the terms ofany material indenture, mortgage, deed of trust, agreement, contract or instrument to which such Loan Party is a party or by which it or any of its assets or properties is bound. 

(c) No order, consent, approval, license or authorization of, or filing, recording or registration with, any governmental or public body orauthority of the United States of America or the State of New York or any agency or political subdivision of either thereof is required in connection with the execution and delivery of any of the Loan Documents, the validity, binding effect orenforceability of any of the Loan Documents or the consummation of the transactions contemplated thereby. 

(d) There are noactions, suits or proceedings by or before any court, governmental or regulatory authority or agency of which, after due inquiry, we have actual

 

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knowledge pending or threatened against or affecting any Loan Party or Borrower’s rights with respect to the Property wherein an adverse ruling or decision, individually or collectively withother such actions, suits or proceedings, is reasonably likely (i) to affect materially and adversely the ability of any Loan Party to consummate the transactions contemplated by the Loan Documents or to perform its obligations under any of theLoan Documents, or (ii) to result in a challenge to the legality, validity, binding effect or enforceability of any of the Loan Documents. 

(e) The payment by Borrower and receipt by Lender of all principal and interest will not violate the usury laws of the State of New York or otherwise constitute unlawful interest. 

(f) The provisions of the Loan Agreement and the Security Instrument are effective to create, in favor of Lender to secure the obligationspurported to be secured thereby, a valid security interest in Borrower’s rights in the UCC Collateral. 

(g) Under NewYork UCC, the provisions of the Account Agreement are effective to perfect the security interest of Lender in Borrower’s rights in the Collateral Accounts (as defined in the Account Agreement). 

**Opinions with respect to the law of States in which the Property is located**

(a) Each Loan Party is authorized to do business and in good standing in the State of [*Relevant State*]. 

(b) To the extent governed by the laws of the State of **[*Relevant States*]*,*the Security Instrument and the Assignment ofLeases are the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their terms. 

(c) The Security Instrument is in proper form so as to comply with recording requirements of the State of **[*Relevant State*]*.*The Security Instrument creates in favor of Lender valid liens on the portion of the Propertythat are located in the State of **[*Relevant States*]*,*securing payment of the Obligations (as defined in the Security Instrument), and no further action will be required for the valid creation of such liens. Upon recordation inthe office of the **[*Recording Office*]**the Security Instrument will provide constructive notice of the terms thereof and the liens created thereby to third parties acquiring interests in the portion of the Property that arelocated in the State of **[*Relevant States*]**subsequent to such recordation. 

(d) The Assignment of Leasesis in proper form so as to comply with the recording requirements of the State of **[*Relevant States*]*.*At the time the Assignment of Leases is delivered to the Recording Office for recording, it will take effect as to allcreditors and subsequent purchasers for a valuable consideration without notice, and it shall be entitled to priority over any other similar instrument delivered to said Recording Office for recording after that time, in the absence of actualnotice. 

(e) Pursuant to the provisions of the Security Instrument Borrower has authorized the filing of the Fixture FinancingStatement identifying the Fixture Collateral for purposes of Section 9-509 of the **[*Relevant States*]**UCC. “Fixture Collateral” means that portion of the UCC Collateral which consists of “fixtures”(as defined in Article 9 of the UCC) to the extent the UCC governs a security interest in such collateral. 

 

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(f) The Fixture Financing Statement includes not only all the types of information requiredby Section 9-502(a) and 9-502(b) of the **[*Relevant States*]**UCC but also the types of information without which the Fixture Filing Office may refuse to accept the Fixture Financing Statement pursuant to Section 9-516 ofthe State of **[*Relevant States*]**UCC. 

(g) Under the **[*Relevant States*]**UCC, thesecurity interest of the Secured Party will be perfected in Borrower’s rights in any Fixture Collateral located on the real property described on Schedule 1 to the Fixture Financing Statement upon the later of the attachment of the securityinterest and the filing of the Fixture Financing Statement in the Fixture Filing Office. 

(h) Borrower has paid all recordingtax due in connection with the recording of the Security Instrument and the Assignment of Leases. No additional deed of trust recording, intangibles tax, documentary stamp tax or similar taxes or charges, other than nominal recordation or filingfees, are required to be paid as a condition of the legality of enforceability of the Security Instrument or the Assignment of Leases. 

(i) The State of [*Relevant States*] has no law pursuant to which a lien against any assets or properties of Borrower (whether real, personal, mixed, tangible or intangible) superior to the lien created by the Security Instrument couldarise as a result of a violation of environmental laws or regulations of such State. No environmental law or regulation of the State of [*Relevant States*] would require any remedial or removal action or certification of nonapplicability as acondition to the granting of the Security Instrument, the foreclosure or other enforcement of the Loan Documents or the sale of any assets or properties of Borrower (whether real, personal, mixed, tangible or intangible) located in the State of[*Relevant States*]. 

(j) No order, consent, approval, license or authorization of, or filing, recording or registrationwith, any governmental or public body or authority of the United States of America or the State of **[*Relevant States*]**or any agency or political subdivision of either thereof is required in connection with the execution anddelivery of any of the Loan Documents, the validity, binding effect or enforceability of any of the Loan Documents or the consummation of the transactions contemplated thereby. 

(k) There are no actions, suits or proceedings by or before any court, governmental or regulatory authority or agency of which, after dueinquiry, we have actual knowledge pending or threatened against or affecting any Loan Party or Borrower’s rights with respect to the Property wherein an adverse ruling or decision, individually or collectively with other such actions, suits orproceedings, is reasonably likely (i) to affect materially and adversely the ability of any Loan Party to consummate the transactions contemplated by the Loan Documents or to perform its obligations under any of the Loan Documents, or(ii) to result in a challenge to the legality, validity, binding effect or enforceability of any of the Loan Documents. 

(l) If the Obligations (as defined in the Security Instrument) were to be governed by the laws of the State of **[*Relevant States*]*,*the payment by Borrower and receipt by Lender of all principal and interest will notviolate the usury laws of the State of **[*Relevant States*]**or otherwise constitute unlawful interest. 

 

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(m) A federal court sitting in the State of **[*Relevant States*]**andapplying the conflict of law rules of the State of **[*Relevant States*],**and the state courts in the State of **[*Relevant States*],**would give effect to the choice of law provisions contained in the LoanDocuments. If counsel is not able to give this opinion as an unqualified opinion, an opinion that the Loan Agreement and Note would be enforceable under the law of the State of **[*Relevant States*]**if such law were held to applywill be required. 

(n) The operation of any term of the Loan Documents, including, without limitation, the terms regardinglate charges, default interest or prepayment premiums, or the lawful exercise of any right thereunder, shall not render the Loan Documents unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense.

5. The Opinion shall be addressed to Lender and its successors and assigns and shall state that it may be relied upon by(i) any assignee of Lender’s interest in the Loan, (ii) any servicer of the Loan, (iii) any purchaser of the Loan or any portion thereof in any Securitization, (iv) any Rating Agency involved in a Securitization of the Loan,(v) the issuer of securities in a Securitization of the Loan, and (vi) any trustee or servicer appointed in connection with a Securitization of the Loan. 

 

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**EXHIBIT E**

**NON-CONSOLIDATION OPINION REQUIREMENTS**

1. TheNonconsolidation Opinion shall be delivered on the Closing Date and shall satisfy all applicable requirements of the Rating Agencies in relation thereto. 

2. The Nonconsolidation Opinion shall be given by a professional law firm selected by Borrower and reasonably acceptable to Lender. 

3. The Nonconsolidation Opinion shall be in form and substance acceptable to Lender and shall be given in relation to both Borrower and anyother SPE Entity relevant to the Loan. The Nonconsolidation Opinion shall identify each entity (a “Relevant Entity”) which owns more than a 49% direct or indirect interest in either Borrower and/or such SPE Entity. Depending on thecircumstances and nature of the transaction structure, a non-affiliated entity, such as a third party property manager, shall be included as a Relevant Entity if required by the Rating Agencies. 

4. The Nonconsolidation Opinion shall state that, in the event that any Relevant Entity were to be a debtor in a case under the BankruptcyCode, it is counsel’s opinion that, under present reported decisional authority and statutes applicable to federal bankruptcy cases, in a properly presented and argued case, a court would not, in the proper exercise of its equitable discretion,disregard the separate existence of Borrower or any SPE Entity so as to order substantive consolidation under the Bankruptcy Code of the assets and liabilities of such Relevant Entity with the assets and liabilities of either Borrower or any SPEEntity and treat such assets and liabilities as though either Borrower and such Relevant Entity or any SPE Entity and such Relevant Entity were one entity. 

5. The Nonconsolidation Opinion shall be addressed to Lender and its successors and assigns and shall state that it may be relied upon by (i) any assignee of Lender’s interest in the Loan,(ii) any participant of Lender’s interest in the Loan, (iii) any servicer of the Loan, (iv) any purchaser of the Loan or any portion thereof in any Securitization, (v) any Rating Agency involved in a Securitization of theLoan, (vi) the issuer of securities in a Securitization of the Loan, and (vii) any trustee or servicer appointed in connection with a Securitization of the Loan. 

**DELAWARE BANKRUPTCY OPINIONS**

As a general rule, the followingopinions are required with respect to any single-member Delaware limited liability companies (having independent members/managers) in the organizational structure: 

1. An opinion of Delaware counsel that federal bankruptcy court would hold that Delaware law, and not federal law, governs the determination of what persons or entities have authority to file a voluntarybankruptcy petition on behalf of the limited liability company. 

 

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2. Opinions of Delaware counsel as follows: 

a. The limited liability company agreement constitutes a legal, valid and binding agreement of its member, and is enforceableagainst such member, in accordance with its terms. 

b. In order for a voluntary bankruptcy petition to be filedon behalf of the Company, the unanimous consent of all of the independent managers/members is required and the provision requiring such unanimous consent in the limited liability company agreement constitutes a legal, valid and binding agreement ofthe member, enforceable against the member, in accordance with its terms. 

c. The bankruptcy or dissolution ofthe limited liability company’s sole member will not, by itself, cause the limited liability company to be dissolved or its affairs to be wound up. 

d. A judgment creditor of the member may not satisfy its claims against the member by asserting a claim against the assets of the limited liability company. 

e. The limited liability company is a separate legal entity, and shall continue as such until the cancellation of the limitedliability company certificate. 

Contact information for a Delaware firm frequently retained by borrowers to obtain suchopinions is set forth below: 

**RICHARDS, LAYTON & FINGER**

One Rodney Square 

P.O. Box 551 

Wilmington, Delaware 19899 

Telephone: 302-658-6541 

Facsimile: 302-658-6548 

Fax Confirmation: 302-651-7796 

Bernard J. Kelley 

Telephone: 302-651-7674 

Facsimile: 302-658-6548 

E-mail: kelley@r1f.com 

 

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**EXHIBIT F**

**COUNTERPARTY OPINION REQUIREMENTS**

1. TheCounterparty Opinion shall be delivered on the Closing Date and shall satisfy all applicable requirements of the Rating Agencies in relation thereto. 

2. The Counterparty Opinion may be given by a professional law firm selected by Counterparty and reasonably acceptable to Lender or by in-house counsel for Counterparty. 

3. The Counterparty Opinion shall be in form and substance acceptable to Lender and shall contain the following opinions: 

(a) Counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and has theorganizational power and authority to execute and deliver, and to perform its obligations under the Interest Rate Cap Agreement and the Acknowledgment. 

(b) The execution and delivery of the Interest Rate Cap Agreement and the Acknowledgment by Counterparty, and any other agreement which Counterparty has executed and delivered pursuant thereto, and theperformance 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, regulationor contractual restriction binding on or affecting it or its Property. 

(c) All consents, authorizations and approvalsrequired for the execution and delivery by Counterparty of the Interest Rate Cap Agreement, the Acknowledgment and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligationsthereunder 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 suchexecution, delivery or performance. 

(d) The Interest Rate Cap Agreement, the Acknowledgment and any other agreement whichCounterparty has executed and delivered pursuant thereto, has been duly executed and delivered by Counterparty and constitutes the legal, valid and binding obligation of Counterparty, enforceable against 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 atlaw). 

4. If a Interest Rate Cap Guaranty is delivered in connection with the Interest Rate Cap Agreement, the CounterpartyOpinion shall contain the following additional opinions: 

(a) Interest Rate Cap Guarantor is duly organized, validly existing,and in good standing under the laws of its jurisdiction of incorporation and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Cap Guaranty. 

 

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(b) The execution and delivery of the Interest Rate Cap Guaranty by Interest Rate CapGuarantor, and any other agreement which Interest Rate Cap Guarantor 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 contraveneany provision of its certificate of incorporation or bylaws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property. 

(c) All consents, authorizations and approvals required for the execution and delivery by Interest Rate Cap Guarantor of the Interest RateCap Guaranty, and any other agreement which Interest Rate Cap Guarantor 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 thereofhave 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. 

(d) The Interest Rate Cap Guaranty, and any other agreement which Interest Rate Cap Guarantor has executed and delivered pursuant thereto,has been duly executed and delivered by Interest Rate Cap Guarantor and constitutes the legal, valid and binding obligation of Interest Rate Cap Guarantor, enforceable against Interest Rate Cap Guarantor in accordance with its terms, subject toapplicable 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).

5. Depending on the nature of the transaction, the Counterparty Opinion shall contain such additional opinions on such othermatters relating to the Interest Rate Cap Agreement, the Interest Rate Cap Guaranty and/or the Acknowledgment as Lender shall reasonably require, including, without limitation, the following additional opinions if the Counterparty or Interest RateCap Guarantor is a foreign entity: 

(a) Jurisdiction where Counterparty and/or Interest Rate Cap Guarantor, as applicable, islocated will respect and give effect to the choice of law provisions of the Interest Rate Cap Agreement and the Acknowledgment. 

(b) A judgment obtained in the courts of the State of New York is enforceable in the jurisdiction where Counterparty and/or Interest Rate Cap Guarantor, as applicable, is located. 

6. The Counterparty Opinion shall be addressed to Lender and its successors and assigns and shall state that it may be relied upon by(i) any assignee of Lender’s interest in the Loan, (ii) any participant of Lender’s interest in the Loan, (iii) any servicer of the Loan, (iv) any purchaser of the Loan or any portion thereof in any Securitization,(v) any Rating Agency involved in a Securitization of the Loan, (vi) the issuer of securities in a Securitization of the Loan, and (vii) any trustee or servicer appointed in connection with a Securitization of the Loan. 

 

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**EXHIBIT G**

**FORM OF TENANT ESTOPPEL LETTER**

            ,20    

Citigroup Global Markets Realty Corp., 

its successors andassigns 

388 Greenwich Street 

New York, New York 10013 

Re: 

Ladies and Gentlemen: 

It is our understanding that you are about to make a loan to[                    ], a[                    ], the landlord, or successor-in-interest to the landlord under our lease, as evidenced by a loan agreement and securedby a mortgage on the captioned premises and, as a condition precedent thereof, you have required this certification by the undersigned. 

The undersigned, as tenant under that certain lease made with                     , as landlord,dated                      [, which lease has been modified or amended as follows (list all modifications or amendments or, if none, soindicate)                     ] (the “Lease”), hereby ratifies the Lease and certifies that: 

1. the undersigned entered into occupancy of the premises described in the Lease on or about                                ; 

2. the lease commencement date was                                ; 

3. the square footage of the premises described in the Lease is                                ; 

4. the fixed rental in the monthly amount of$                                 was payable from                                ; 

5. the percentage rental payable monthly is$                                ; 

6. there are no rent abatements or free rent periods now or in the future [other than                                ]; 

7. the amount of the current monthly expense reimbursements due under the Lease is equal to$                                ; 

8. the Lease is in full force and effect and, except as indicated above, has not been assigned, modified, supplemented or amended in any wayand the undersigned has no notice of any assignment, pledge or hypothecation by the landlord of the Lease or of the rentals thereunder; 

 

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9. a true and complete copy of the Lease (including all amendments, modifications,supplements, side letters, surrender, space reduction or rent abatement agreements applicable to such Lease) is attached hereto as Exhibit A; 

10. the Lease represents the entire agreement between the parties with respect to the above space in the above-mentioned building; 

11. the term of the Lease [, as currently extended by means of the exercise of certain options contained therein,] expires on                    ; 

12. all construction and other obligations of a material nature to be performed by the landlord under the Lease have been satisfied, except as follows: (if none, so indicate); 

13. any Payments by the landlord to the undersigned for tenant improvements which are required under the Lease have been made; 

14. on this date there are no existing defenses or offsets which the undersigned has against the enforcement of the Lease by the Landlordand the undersigned has no knowledge of any event which with the giving of notice, the passage of time or both would constitute a default under said Lease; 

15. the undersigned is not entitled to any offsets, abatements, deductions or otherwise against the rent payable under the Lease from and after the date hereof, except as follows: (if none, so indicate);

16. no rental (including expense reimbursements), other than for the current month, has been paid in advance; 

17. the amount of the security deposit presently held under the Lease is$                     (if none, so indicate); 

18. the rentals (including expense reimbursements) under the Lease have been paid through the month of                    . 

 

G-2 

This estoppel certificate is binding upon the undersigned and its successors and assigns andmay be relied upon by you and your successors and assigns and, if the mortgage loan becomes the subject of a securitization, may also be relied upon by the credit rating agency, if any, rating the securities collateralized by the mortgage loan aswell as any issuer of such securities, and any servicer and/or trustee acting in respect of such securitization. 

 
Very truly yours,
 
[INSERT NAME OF TENANT]
By:
 
 
 Title:
 

G-3 

EXHIBIT A 

LEASE 

 

G-4 

**EXHIBIT H-1**

**BORROWER ORGANIZATIONAL STRUCTURE AT CLOSING**

(ATTACHED HERETO) 

 

H-1-1 

**EXHIBIT H-2**

**INTENTIONALLY DELETED**

 

H-2-1 

**EXHIBIT I**

**INTEREST RATE CAP AGREEMENT REQUIREMENTS**

 
• 
The form of cap agreement should be the 1992 ISDA Agreement (Multicurrency Cross Border or Local Currency Single Jurisdiction) subject to the 2000Definitions. 

 
• 
Once the cap premium is paid by Borrower, it cannot default. (Paragraph 4 of the May 1989 ISDA Addendum to Schedule to Interest Rate and CurrencyExchange Agreement or similar language must be incorporated by reference). 

 
• 
“Cross Default” provision of Section 5(a)(vi) of the ISDA Master Agreement will not apply. Grace and cure periods in Section 5 ofthe ISDA Master Agreement will either (i) not apply or (ii) if applicable, any grace or cure periods must expire in time to ensure the availability of cap payments by cap provider on a timely basis for distribution to the holders of therated securities. 

 
• 
“Credit Event Upon Merger” provisions of Section 5(b)(iv) of the ISDA Master Agreement will not apply. 

 
• 
“Automatic Early Termination” provision in Section 6(a) of the ISDA Master Agreement will not apply. 

 
• 
Termination Events under Sections 5(b)(ii) and 5(b)(iii) of the ISDA Master Agreement either (i) will only constitute termination eventsexercisable by Borrower against cap provider or (ii) if exercisable by both parties, at the time of any event triggering a termination event under Sections 5(b)(ii) and/or 5(b)(iii), cap provider must either (a) transfer the cap to areplacement cap provider acceptable to each Rating Agency at cap provider’s sole cost and expense, or (b) continue to perform its obligations under the cap agreement including, without limitation, the obligation to unconditionally“gross up” in the event that a withholding tax is imposed on payments being made by the cap provider. 

 
• 
Borrower shall be precluded from payment of any out of pocket expenses required under Section 11 of the ISDA Master Agreement and incurred by capprovider related to the enforcement and protection of cap provider’s rights under the cap agreement. 

 
• 
Market Quotation and Second Method will be used for the purpose of computing amounts payable on early termination with a provision for loss if MarketQuotation is not available. 

 
• 
The parties shall be deemed to have no Affiliates for purposes of the ISDA Master Agreement. 

 
• 
“Specified Entities” will not apply for purposes of Sections 5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(iv) of the ISDA Master Agreement.

 
• 
Transaction will be governed by New York law. 

 
• 
For the purposes of Section 6(e) of the ISDA Master Agreement, set off and counterclaim will not apply and all payments by cap provider shall bemade without set off or counterclaim. 

 

I-1 

• 
If this transaction will be guaranteed by a parent to provide a required rating, the guarantee must be unconditional, irrevocable, continuing and aguarantee of payment, not collection, and otherwise satisfy Rating Agency requirements. Any act or omission of such guarantor that would constitute an event of default by the cap provider (other than a cross default) under Section 5 of the ISDAMaster Agreement will constitute an event of default under the ISDA Master Agreement. 

 
• 
The definition of LIBOR will be USD LIBOR BBA and must match the definition of LIBOR in the loan agreement. 

 
• 
The definition of Business Day must match the definition of Business Day in the loan agreement. LIBOR must be determined on the LIBOR DeterminationDate. 

 
• 
Payments must be made by the cap provider on or prior to the applicable Payment Date in respect of a period corresponding to the applicable InterestPeriod. 

 
• 
The Termination Date of the cap must be no earlier than the last day of the Interest Period in which the Maturity Date under the loan agreement occurs.

 
• 
The Day Count Fraction in the cap must match that contained in the loan agreement. 

 
• 
The Notional Amount in the cap must match the principal amount of the loan as of the date of the loan agreement. 

 
• 
US Dollars are selected as the Termination Currency under the cap. 

 
• 
Section 2(c)(ii) of the ISDA Master Agreement will apply to the Transaction. 

 
• 
Cap provider and Borrower will represent that it is not a multi branch party. 

 
• 
Cap provider will covenant that it will not petition Borrower into bankruptcy (or join in any such petition) for 365 days after all outstanding ratedsecurities have been paid in full. 

 
• 
If the ISDA Master Agreement (Multicurrency Cross Border) (“Cross Border Agreement”) is utilized, additional scheduled items and provisionsto address “indemnifiable taxes” and other related issues present in cross border transactions must be incorporated: 

 
 • 
Section 2(d)(i)(4) of the Cross Border Agreement must be amended to require the cap provider to unconditionally “gross up” in the eventthat a withholding tax is imposed on payments being made by the cap provider. 

 
 • 
The definition of “indemnifiable tax” must cover any and all withholding tax. 

 
 • 
Section 2(d)(i)(4) of the Cross Border Agreement will be deleted such that cap provider is not excused from having to “gross up” due toBorrower’s breach of a tax representation or failure to notify cap provider of a breach of a tax representation and (ii) Borrower makes no tax representations in the cap agreement or schedule. 

 
 • 
Section 2(d)(ii) of the Cross Border Agreement must be amended to provide that there is no obligation by Borrower to make payments to the capprovider for any payments made by the cap provider without deduction for taxes (for which there is no obligation to gross up). 

 

I-2 

 • 
Section 4(e) of the Cross Border Agreement must be amended to provide that there are no payment obligations by Borrower to cap provider for anyindemnification resulting from stamp registration or other documentary tax levied by Borrower’s taxing authority on the cap provider. 

 
• 
Cap provider and any guarantor must provide a New York opinion of counsel satisfactory to the Rating Agencies regarding the cap. If cap provider or itsguarantor is a non U.S. entity, a foreign opinion must be provided as well. The opinion(s) must include customary legal opinions including, without limitation, an opinion delivered by outside counsel opining that the cap agreement (including theconfirmation, ISDA Master Agreement, schedule and collateral assignment agreement) is legal/valid/binding and enforceable against the cap provider and any guarantor.] 

 

I-3 

**EXHIBIT J**

**FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT**

Reference is made to that certain Loan and Security Agreement, dated as of                      200    (as amended, supplemented or otherwise modified from time to time, the **Loan Agreement**) between[                        ] (**Borrower**), and Citigroup Global Markets Realty Corp., a New York corporation(**Lender**), and that certain Note, dated as of                     , 200     (the **Note**), made byBorrower in favor of Lender. Terms defined in the Loan Agreement and not otherwise defined herein are used herein with the same meaning. 

The **Assignor** and the **Assignee** referred to on Schedule 1 attached hereto agree as follows: 

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under the Noteand the Loan Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 attached hereto. After giving effect to such sale and assignment, the amount of the Loan and the Note owing to the Assignee will be as setforth on Schedule 1 attached hereto. 

2. The Assignor (i) represents and warrants that it is the legal andbeneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties orrepresentations made in or in connection with the Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to becreated under or in connection with the Loan Documents or any other instrument or document furnished pursuant thereto; (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borroweror the performance or observance by Borrower of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; and (iv) attaches the Note or notes held by the Assignor and requests that the Lenderexchange such Note or notes for a new note or notes payable to the order of the Assignee in an amount equal to the principal amount of the Loan assumed by the Assignee pursuant hereto or new notes payable to the order of the Assignee in an amountequal to the principal amount of the Loan assumed by the Assignee pursuant hereto and the Assignor in an amount equal to the principal amount of the Loan retained by the Assignor under the Note and the Loan Agreement, respectively, as specified onSchedule 1 attached hereto. 

3. The Assignee (i) confirms that it has received a copy of the Note and the LoanAgreement, together with such financial statements and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will,independently and without reliance upon Lender or the Assignor based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Agreement or theNote; (iii) appoints and authorizes Lender to take such action as agent on its

 

J-1 

behalf and to exercise such powers and discretion under the Loan Documents as are delegated to Lender by the terms thereof, together with such powers and discretion as are reasonably incidentalthereto; and (iv) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Loan Agreement and the Note are required to be performed by it as an assignee of an interest therein. 

4. Following the execution of this Assignment and Acceptance, it will be delivered to Lender for acceptance and recording. The effectivedate for this Assignment and Acceptance (the **Effective Date**) shall be the date of acceptance hereof by the Lender, unless otherwise specified on Schedule 1 attached hereto. 

5. Upon such acceptance and recording by Lender, as of the Effective Date, (i) the Assignee shall be a party to the Loan Agreement andthe Note and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of an assignee thereof, and (ii) the Assignor shall, to the extent provided in the Loan Agreement and this Assignment and Acceptance,relinquish its rights and be released from its obligations under the Loan Agreement and the Note. 

6. Upon such acceptance andrecording by Lender, from and after the Effective Date, Lender shall make all payments under the Loan Agreement and the Note or notes in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest andcommitment fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Loan Agreement and the Note or notes for periods prior to the Effective Date directly between themselves.

7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.

8. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separatecounterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptance bytelecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. 

***

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment and Acceptance and Schedule 1 to thisAssignment and Acceptance to be executed by their officers thereunto duly authorized as of the date specified on Schedule 1. 

 

J-2 

Schedule 1 

As to the Loan in respect of which an interest is being assigned: 

 

Percentage interest assigned:
              %
Aggregate outstanding principal amount of the Loan assigned:
  $              
Principal amount of Note payable to Assignee:
  $              
Principal amount of Note payable to Assignor:
  $              
Effective Date (if other than date of acceptance by Lender):                    ,          
  
 
[NAME OF ASSIGNOR], as AssignorBy: 
 
 Name: Title: Dated:                     ,        [NAME OF ASSIGNOR], as AssignorBy: 
 
 Name: Title: Dated:                     ,        
 
Accepted this      day of                 ,        [NAME OF LENDER]By: 
 
Name: Title: 
 

J-3 

**EXHIBIT K**

**FORM OF**

**SUBORDINATION, NON-DISTURBANCEAND ATTORNMENT AGREEMENT**

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT 

                                                            , 

Tenant 

AND 

CITIGROUP GLOBAL MARKETS REALTY CORP., 

Lender 

 
 County:  [                            ]  Section:  [                            ]  Block:  [                            ]  Lot:  [                            ]  Premises:    Dated: as of                     ,        
Record and return by mail to: 

Cadwalader, Wickersham & Taft LLP 

One WorldFinancial Center 

New York, NY 10281 

Attention: Frederic L. Altschuler, Esq. 

 

K-1 

**SUBORDINATION,**

**NON-DISTURBANCE AND ATTORNMENT AGREEMENT**

THISAGREEMENT made as of this      day of                     , 200    , between CITIGROUPGLOBAL MARKETS REALTY CORP., a New York corporation, having an address at 388 Greenwich Street, New York, New York 10013 (hereinafter called “Lender”), and                    , a                    , having an address at                     (hereinafter called “Tenant”). 

WITNNESSETH: 

WHEREAS, by a lease (the “Original Lease”) dated                     ,200     between                      (hereinafter called “Landlord”), as landlord, and Tenant, astenant, as amended by lease amendment[s] dated                     , 200    ,[                    ,200     and                    , 200     (the Original Lease, as so amended, is hereinafter the “Lease”), amemorandum of which Lease was dated                      and was recorded in                     in Reel             , Page    , [add recording data for memoranda of amendments, if applicable], Landlord leased to Tenant certain premises located in                     (the “Premises”) on the property described in Schedule “A” annexed hereto and made a parthereof (the “Property”); and 

WHEREAS, Lender is about to make a loan to Landlord, which loan shall besecured by, among other things, a mortgage or deed of trust (which mortgage or deed of trust, and all amendments, renewals, increases, modifications, replacements, substitutions, extensions, spreaders and consolidations thereof and all re-advancesthereunder and addictions thereto, is referred to as the “Security Instrument”) encumbering the Property; and 

WHEREAS, Lender and Tenant desire to confirm their understanding and agreement with respect to the Lease and the Security Instrument. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, Lender and Tenant hereby agree and covenant as follows: 

1. The Lease, and all of the terms, covenants, provisions and conditions thereof (including, without limitation, any right of first refusal,right of first offer, option or any similar right with respect to the sale or purchase of the Property, or any portion thereof) is, shall be and shall at all times remain and continue to be subject and subordinate in all respects to the lien, terms,covenants, provisions and conditions of the Security Instrument and to all advances and re-advances made thereunder and all sums secured thereby. This provision shall be self-operative but Tenant shall execute and deliver any additional instrumentswhich Lender may reasonably require to effect such subordination. 

2. So long as (i) Tenant is not in default (beyond anyperiod given in the Lease to Tenant to cure such default) in the payment of rent, percentage rent or additional rent or in the performance or observance of any of the other terms, covenants, provisions or conditions

 

K-2 

of the Lease on Tenant’s part to be performed or observed, (ii) Tenant is not in default under this Agreement and (iii) the Lease is in full force and effect:(a) Tenant’s possession of the Premises and Tenant’s rights and privileges under the Lease, or any extensions or renewals thereof which may be effected in accordance with any option therefor which is contained in the Lease, shall notbe diminished or interfered with by Lender, and Tenant’s occupancy of the Premises shall not be disturbed by Lender for any reason whatsoever during the term of the Lease or any such extensions or renewals thereof and (b) Lender will notjoin Tenant as a party defendant in any action or proceeding to foreclose the Security Instrument or to enforce any rights or remedies of Lender under the Security Instrument which would cut-off, destroy, terminate or extinguish the Lease orTenant’s interest and estate under the Lease (except to the extent required so that Tenant’s right to receive or set-off any monies or obligations owed or to be performed by any of Lender’s predecessors-in-interest shall not beenforceable thereafter against Lender or any of Lender’s successors-in-interest). Notwithstanding the foregoing provisions of this paragraph, if it would be procedurally disadvantageous for Lender not to name or join Tenant as a party in aforeclosure proceeding with respect to the Security Instrument, Lender may so name or join Tenant without in any way diminishing or otherwise affecting the rights and privileges granted to, or inuring to the benefit of, Tenant under this Agreement.

3. (A) After notice is given by Lender that the Security Instrument is in default and that the rentals under the Leaseshould be paid to Lender, Tenant will attorn to Lender and pay to Lender, or pay in accordance with the directions of Lender, all rentals and other monies due and to become due to Landlord under the Lease or otherwise in respect of the Premises.Such payments shall be made regardless of any right of set-off, counterclaim or other defense which Tenant may have against Landlord, whether as the tenant under the Lease or otherwise. 

(B) In addition, if Lender (or its nominee or designee) shall succeed to the rights of Landlord under the Lease through possession orforeclosure action, delivery of a deed or otherwise, or another person purchases the Property or the portion thereof containing the Premises upon or following foreclosure of the Security Instrument or in connection with any bankruptcy case commencedby or against Landlord, then at the request of Lender (or its nominee or designee) or such purchaser (Lender, its nominees and designees, and such purchaser, and their respective successors and assigns, each being a“Successor-Landlord”), Tenant shall attorn to and recognize Successor-Landlord as Tenant’s landlord under the Lease and shall promptly execute and deliver any instrument that Successor-Landlord may reasonably request toevidence such attornment. Upon such attornment, the Lease shall continue in full force and effect as, or as if it were, a direct lease between Successor-Landlord and Tenant upon all terms, conditions and covenants as are set forth in the Lease. Ifthe Lease shall have terminated by operation of law or otherwise as a result of or in connection with a bankruptcy case commenced by or against Landlord or a foreclosure action or proceeding or delivery of a deed in lieu, upon request ofSuccessor-Landlord, Tenant shall promptly execute and deliver a direct lease with Successor-Landlord which direct lease shall be on substantially the same terms and conditions as the Lease (subject, however, to the provisions of clauses(i)-(v) of this paragraph 3(B)) and shall be effective as of the day the Lease shall have terminated as aforesaid. Notwithstanding the continuation of the Lease, the attornment of Tenant thereunder or the execution of a direct lease betweenSuccessor-Landlord and Tenant as aforesaid, Successor-Landlord shall not: 

(i) be liable for any previous actor omission of Landlord under the Lease; 

 

K-3 

(ii) be subject to any off-set, defense or counterclaim which shall havetheretofore accrued to Tenant against Landlord; 

(iii) be bound by any modification of the Lease or by anyprevious prepayment of rent or additional rent made more than one (1) month prior to the date same was due which Tenant might have paid to Landlord, unless such modification or prepayment shall have been expressly approved in writing by Lender;

(iv) be liable for any security deposited under the Lease unless such security has been physically deliveredto Lender or Successor-Landlord; and 

(v) be liable or obligated to comply with or fulfill any of theobligations of the Landlord under the Lease or any agreement relating thereto with respect to the construction of, or payment for, improvements on or above the Premises (or any portion thereof), leasehold improvements, tenant work letters and/orsimilar items. 

4. Tenant agrees that without the prior written consent of Lender, it shall not (a) amend, modify,terminate or cancel the Lease or any extensions or renewals thereof, (b) tender a surrender of the Lease, (c) make a prepayment of any rent or additional rent more than one (l) month in advance of the due date thereof, or(d) subordinate or permit the subordination of the Lease to any lien subordinate to the Security Instrument. Any such purported action without such consent shall be void as against the holder of the Security Instrument. 

5. (A) Tenant shall promptly notify Lender of any default by Landlord under the Lease and of any act or omission of Landlord whichwould give Tenant the right to cancel or terminate the Lease or to claim a partial or total eviction. 

(B) In the event of adefault by Landlord under the Lease which would give Tenant the right, immediately or after the lapse of a period of time, to cancel or terminate the Lease or to claim a partial or total eviction, or in the event of any other act or omission ofLandlord which would give Tenant the right to cancel or terminate the Lease, Tenant shall not exercise such right (i) until Tenant has given written notice of such default, act or omission to Lender and (ii) unless Lender has failed,within sixty (60) days after Lender receives such notice, to cure or remedy the default, act or omission or, if such default, act or omission shall be one which is not reasonably capable of being remedied by Lender within such sixty(60) day period, until a reasonable period for remedying such default, act or omission shall have elapsed following the giving of such notice and following the time when Lender shall have become entitled under the Security Instrument to remedythe same (which reasonable period shall in no event be less than the period to which Landlord would be entitled under the Lease or otherwise, after similar notice, to effect such remedy), provided that Lender shall with due diligence give Tenantwritten notice of its intention to and shall commence and continue to, remedy such default, act or omission. If Lender cannot reasonably remedy a default, act or omission of Landlord until after Lender obtains possession of the Premises, Tenant maynot terminate or cancel the Lease or claim a partial or total eviction by reason of such default, act or omission

 

K-4 

until the expiration of a reasonable period necessary for the remedy after Lender secures possession of the Premises. To the extent Lender incurs any expenses or other costs in curing orremedying such default, act or omission, including, without limitation, attorneys’ fees and disbursements, Lender shall be subrogated to Tenant’s rights against Landlord. 

(C) Notwithstanding the foregoing, Lender shall have no obligation hereunder to remedy such default, act or omission. 

6. To the extent that the Lease shall entitle Tenant to notice of the existence of any mortgage and the identity of any mortgagee or anyground lessor, this Agreement shall constitute such notice to Tenant with respect to the Security Instrument and Lender. 

7.Upon and after the occurrence of a default under the Security Instrument, which is not cured after any applicable notice and/or cure periods, Lender shall be entitled, but not obligated, to exercise the claims, rights, powers, privileges andremedies of Landlord under the Lease and shall be further entitled to the benefits of, and to receive and enforce performance of, all of the covenants to be performed by Tenant under the Lease as though Lender were named therein as Landlord.

8. Anything herein or in the Lease to the contrary notwithstanding, in the event that a Successor-Landlord shall acquiretitle to the Property or the portion thereof containing the Premises, Successor-Landlord shall have no obligation, nor incur any liability, beyond Successor-Landlord’s then interest, if any, in the Property, and Tenant shall look exclusively tosuch interest, if any, of Successor-Landlord in the Property for the payment and discharge of any obligations imposed upon Successor-Landlord hereunder or under the Lease, and Successor-Landlord is hereby released or relieved of any other liabilityhereunder and under the Lease. Tenant agrees that, with respect to any money judgement which may be obtained or secured by Tenant against Successor-Landlord, Tenant shall look solely to the estate or interest owned by Successor-Landlord in theProperty, and Tenant will not collect or attempt to collect any such judgement out of any other assets of Successor-Landlord. 

9. Notwithstanding anything to the contrary in the Lease, Tenant agrees for the benefit of Landlord and Lender that, except as permitted by, and fully in accordance with, applicable law, Tenant shall not generate, store, handle, dischargeor maintain in, on or about any portion of the Property, any asbestos, polychlorinated biphenyls, or any other hazardous or toxic materials, wastes and substances which are defined, determined or identified as such (including, but not limited to,pesticides and petroleum products if they are defined, determined or identified as such) in any federal, state or local laws, rules or regulations (whether now existing or hereafter enacted or promulgated) or any judicial or administrativeinterpretation of any thereof, including any judicial or administrative interpretation of any thereof, including any judicial or administrative orders or judgments. 

10. If the Lease provides that Tenant is entitled to expansion space, Successor-Landlord shall have no obligation nor any liability for failure to provide such expansion space if a prior landlord(including, without limitation, Landlord), by reason of a lease or leases entered into by such prior landlord with other tenants of the Property, has precluded the availability of such expansion space. 

 

K-5 

11. Except as specifically provided in this Agreement, Lender shall not, by virtue of thisAgreement, the Security Instrument or any other instrument to which Lender may be a party, be or become subject to any liability or obligation to Tenant under the Lease or otherwise. 

12. (A) Tenant acknowledges and agrees that this Agreement satisfies and complies in all respects with the provisions of Article     of the Lease and that this Agreement supersedes (but only to the extent inconsistent with) the provisions of such Article and any other provision of the Lease relating to the priority or subordination of the Lease andthe interests or estates created thereby to the Security Instrument. 

(B) Tenant agrees to enter into a subordination,non-disturbance and attornment agreement with any lender which shall succeed Lender as lender with respect to the Property, or any portion thereof, provided such agreement is substantially similar to this Agreement. Tenant does herewith irrevocablyappoint and constitute Lender as its true and lawful attorney-in-fact in its name, place and stead to execute such subordination, non-disturbance and attornment agreement, without any obligation on the part of Lender to do so. This power, beingcoupled with an interest, shall be irrevocable as long as the Indebtedness secured by the Security Instrument remains unpaid. Lender agrees not to exercise its rights under the preceding two sentences if Tenant promptly enters into thesubordination, non-disturbance and attornment agreement as required pursuant to the first sentence of this subparagraph (B). 

13. (A) Any notice required or permitted to be given by Tenant to Landlord shall be simultaneously given also to Lender, and any right to Tenant dependent upon notice shall take effect only after notice is so given. Performance byLender shall satisfy any conditions of the Lease requiring performance by Landlord, and Lender shall have a reasonable time to complete such performance as provided in Paragraph 5 hereof. 

(B) All notices or other communications required or permitted to be given to Tenant or to Lender pursuant to the provisions of thisAgreement shall be in writing and shall be deemed given only if mailed by United States registered mail, postage prepaid, or if sent by nationally recognized overnight delivery service (such as Federal Express or United States Postal Service ExpressMail), addressed as follows: to Tenant, at the address first set forth above, Attention:                     ; to Lender, at the address firstset forth above, Attention:                      and General Counsel, with a copy to Cadwalader, Wickersham & Taft LLP, One WorldFinancial Center, New York, New York 10281, Attention: Frederic L. Altschuler, Esq.; or to such other address or number as such party may hereafter designate by notice delivered in accordance herewith. All such notices shall be deemed given three(3) business days after delivery to the United States Post office registry clerk if given by registered mail, or on the next business day after delivery to an overnight delivery courier. 

14. This Agreement may be modified only by an agreement in writing signed by the parties hereto, or their respective successors-in-interest.This Agreement shall inure to the benefit of and be binding upon the parties hereto, and their respective successors and assigns. The term “Lender” shall mean the then holder of the Security Instrument. The term“Landlord” shall mean the then holder of the landlord’s interest in the Lease. The term “person” shall mean

 

K-6 

an individual, joint venture, corporation, partnership, trust, limited liability company, unincorporated association or other entity. All references herein to the Lease shall mean the Lease asmodified by this Agreement and to any amendments or modifications to the Lease which are consented to in writing by Lender. Any inconsistency between the Lease and the provisions of this Agreement shall be resolved, to the extent of suchinconsistency, in favor of this Agreement. 

15. Tenant hereby represents to Lender as follows: 

(a) The Lease is in full force and effect and has not been further amended. 

(b) There has been no assignment of the Lease or subletting of any portion of the premises demised under the Lease. 

(c) There are no oral or written agreements or understandings between Landlord and Tenant relating to the premises demised under the Leaseor the Lease transaction except as set forth in the Lease. 

(d) The execution of the Lease was duly authorized and the Leaseis in full force and effect and to the best of Tenant’s knowledge there exists no default (beyond any applicable grace period) on the part of either Tenant or Landlord under the Lease. 

(e) There has not been filed by or against nor to the best of the knowledge and belief of Tenant is there threatened against Tenant, anypetition under the bankruptcy laws of the United States. 

(f) To the best of Tenant’s knowledge, there is no presentassignment, hypothecation or pledge of the Lease or rents accruing under the Lease by Landlord, other than pursuant to the Security Instrument. 

16. Whenever, from time to time, reasonably requested by Lender (but not more than three (3) times during any calendar year), Tenant shall execute and deliver to or at the direction of Lender, andwithout charge to Lender, one or more written certifications, in a form acceptable to Tenant, of all of the matters set forth in Paragraph 15 above, and any other information the Lender may reasonably require to confirm the current status of theLease. 

17. BOTH TENANT AND LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING ORCOUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. 

18. This Agreement shall be governed by and construed inaccordance with the laws of the State in which the Property is located. 

 

K-7 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day andyear first above written. 

 

CITIGROUP GLOBAL MARKETS REALTY CORP., a New York corporation
By: 
 
 Name: Title:[TENANT]By: 
 
 Name: Title:
 
AGREED AND CONSENTED TO:LANDLORD:[                                        ] By: 
 
 Name: Title:
 

K-8 

STATE OF NEW YORK ) )    ss.COUNTY OF NEW YORK )
On the      day of                     in the year 200     before me, the undersigned, a notary public in and for said state,personally appeared                                                , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed thesame in his/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. 

 
  
 
  Notary Public[Notary Seal]  My commission expires:
 
STATE OF NEW YORK ) )    ss.COUNTY OF NEW YORK )
On the      day of                     in the year 200     before me, the undersigned, a notary public in and for said state,personally appeared                                                , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed thesame in his/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. 

 
  
 
  Notary Public[Notary Seal]  My commission expires:
 

K-9 

STATE OF NEW YORK ) )    ss.COUNTY OF NEW YORK )
On the      day of                     in the year 200     before me, the undersigned, a notary public in and for said state,personally appeared                                                , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed thesame in his/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. 

 
  
 
  Notary Public[Notary Seal]  My commission expires:
 
STATE OF NEW YORK ) )    ss.COUNTY OF NEW YORK )
On the      day of                     in the year 200     before me, the undersigned, a notary public in and for said state,personally appeared                                                , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed thesame in his/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. 

 
  
 
  Notary Public[Notary Seal]  My commission expires:
 

K-10 

SCHEDULE A 

Legal Description of Property 

 

K-11 

**EXHIBIT L**

**INTENTIONALLY DELETED**

 

L-1 

**EXHIBIT M**

**COUNTERPARTY ACKNOWLEDGMENT**

                     (**Counterparty**) has entered into a Confirmation and Agreement (together with the confirmation andschedules relating thereto, collectively, the **Interest Rate Cap Agreement**), dated as of                     200    , between the Counterparty Interest Rate Cap transaction with                      (**Borrower**).Attached hereto, is a true, correct and complete copy of the Interest Rate Cap Agreement. Counterparty acknowledges that it has been informed that Borrower, pursuant to a Loan and Security Agreement, dated                     (the **Loan Agreement**) has pledged and collaterally assigned its rights under the Interest Rate Cap Agreement toCitigroup Global Markets Realty Corp., a New York corporation (together with its successors and assigns, **Lender**). Counterparty hereby consents to such pledge and assignment and agrees that it will make any payments to become payable under orpursuant to the Interest Rate Cap Agreement directly to an account at                      entitled“                     f/b/o Citigroup Global Markets Realty Corp., as secured party, Collection Account” (Account Number                    ), ABA#                     or to such other account designated in writing by Lender. Counterparty further agrees that all such payments shall bemade without set-off, deduction, defense or counterclaim. Counterparty acknowledges that in the event it shall fail to make such payments directly to such account, it shall be deemed to have not made such payment pursuant to the Interest Rate CapAgreement. Counterparty also agrees that it will not modify, amend or terminate the Interest Rate Cap Agreement without Lender’s consent. 

 
[                                                                        ]By: 
 
 Name:  Title: 
 

M-1 

**EXHIBIT N**

**INTENTIONALLY DELETED**

 

N-1 

**EXHIBIT O**

**INTENTIONALLY DELETED**

 

O-1 

**EXHIBIT P**

**INTENTIONALLY DELETED**

 

P-1 

**EXHIBIT Q**

**INTENTIONALLY DELETED**

 

Q-1 

**EXHIBIT R**

**ARTICLE 8 “OPT IN” LANGUAGE**

Section        . Shares and Share Certificates

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

b. Share Certificates. 

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

ii. The [Company] [Partnership] shall issue a new Share Certificate in place of any Share Certificatepreviously issued if the holder of the Shares represented by such Share Certificate, as reflected on the books and records of the [Company] [Partnership]. 

(1) makes proof by affidavit, in form and substance satisfactory to the [Company] [Partnership], that such previously issued Share Certificate has been lost, stolen or destroyed. 

(2) requests the issuance of a new Share Certificate before the [Company] [Partnership] has notice that such previouslyissued Share Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim; 

 

R-1 

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

(4)satisfies any other reasonable requirements imposed by the [Company] [Partnership]. 

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

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

 

R-2 

**SCHEDULE I**

**LITIGATION SCHEDULE**

 

Plaintiff(s)
  
Defendant(s)
  
Date of Incident

Gladys Deitch
  
Strategic Hotel Capitol
  
November 13, 2004
  
Corporation d/b/a Hotel
    
InterContinental
  
Stephen Geis
  
DTRS Michigan Avenue/Chopin
    
Plaza Sub, LLC, et al
  
November 6, 2005

 

Schedule I-1 

**SCHEDULE II**

**INTENTIONALLY DELETED**

 

Schedule II-1 

**SCHEDULE III**

**PRE-APPROVED TRANSFEREES**

Strategic Hotel Funding,Inc. 

Bass PLC 

CNL Hotels & Resorts, Inc. 

KSL II Management Operations, LLC/KSL Recreation Corp. 

Kohlberg Kravis Roberts & Co. 

Hilton Hotels Corporation 

FelCor Lodging Trust, Inc. 

Rosewood Hotels & Resorts 

Whitehall Street Real Estate Limited Partnership Funds 

Host Marriott Corporation

Hilton Group, PLC 

Fairmont Hotels & Resorts 

Four Seasons Hotel Inc. 

The Blackstone Group, LP 

Millennium and Copthorne Hotels, PLC 

MeriStar Hotels 

LaSalle Hotel Properties 

Marriott International, Inc.

Starwood Hotels and Resorts Worldwide, Inc. 

Government of Singapore Investment Corporation 

Maritz Wolf LLC) 

HRH Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud) 

Six Continents 

Morgan Stanley Real Estate Fund (MSREF) 

Walton Street Real Estate Fund 

The Carlyle Group Real Estate Fund 

Lehman Brothers Real Estate Fund 

The Equitable Life Assurance and Annuity Association 

Orient Express 

Accor 

Benchmark Hospitality) 

NH Hotels 

Mandarin 

Peninsula

Raffles 

Shangrila 

Hyatt 

Strategic Hotel Capital 

Boca Resorts 

Vail Reports) 

Destination Resorts 

Westbrook Real Estate Fund 

 

Schedule III-1 

Lowe Hospitality 

State of Ohio Pension Fund 

Highland Hospitality 

 

Schedule III-2 

**SCHEDULE IV**

**PRE-APPROVED MANAGERS**

KSL or any Affiliate

One & Only / Kerzner 

Gaylord Entertainment 

Loews Hotels 

Hilton Hotels Corporation 

Hilton Group, PLC 

Fairmont Hotels & Resorts 

Millennium and Copthorne Hotels, PLC 

Marriott International,Inc. 

Four Seasons Hotels, Inc. 

Six Continents 

Orient Express 

Mandarin 

Peninsula

Raffles 

Shangri-La 

Hyatt 

Omni 

Boca Resorts 

Destination Resorts 

Lowe Hospitality 

Montage Hotels 

Intercontinental Hotel Group 

 

Schedule IV-1 

**SCHEDULE V**

**INTENTIONALLY DELETED**

 

Schedule V-1 

**SCHEDULE VI**

**INTENTIONALLY DELETED**

 

Schedule VI-1 

**SCHEDULE VII**

**INTENTIONALLY DELETED**

 

Schedule VII-1