**Exhibit10.4**

 

 

 

**INTERCREDITOR AND SUBORDINATION AGREEMENT**

 

byand among

 

BANKOF AMERICA, N.A., a national banking association,

 

asSenior Lender

 

 

BEHRINGERHARVARD PAL I, LLC,a Delaware limited liability company,

 

asJunior Lender

 

 

and

 

 

LEND LEASE (US)CAPITAL INC.,

 

as

 

 

SubordinateLender

 

Dated as of August 14, 2009

 

 

 

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**INTERCREDITOR AND SUBORDINATION AGREEMENT**

 

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

 

**RECITALS:**

 

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

 

B.            The Senior Noteand the total indebtedness evidenced thereby are (i) governed by a certainSenior Loan Agreement of even date with the Senior Note between Senior Lenderand Borrower (as amended, supplemented, modified, restated, renewed or extendedfrom time to time, the “Senior Loan Agreement”) and (ii) secured byeach Mortgage, as defined in the Senior Loan Agreement, executed by Borrowerfor the benefit of Senior Lender (collectively, as amended, supplemented,modified, restated, renewed or extended from time to time, the “Senior Mortgage”),granting a first priority lien on the Property and any Improvements situatedthereon, which Property is more particularly described in Exhibit Aattached hereto and incorporated herein. The Senior Note, the Senior Loan Agreement, the Senior Mortgage and anysecurity agreement, pledge agreement, assignment agreement, UCC financingstatements, environmental indemnity agreement, guaranty, completion guaranty,any reimbursement agreement or reimbursement obligation of Borrower relating toSenior Lender’s loan to Borrower to fund certain improvements that will becompleted or maintained for the benefit of the Property or surroundingproperties, any interest rate swap, collar or other interest rate protectionagreement that Borrower enters into with Senior Lender pertaining to the SeniorLoan, or any assignment of architect’s agreement, construction contract orother contracts or subcontracts or any other document or modification now orhereafter executed in connection therewith are herein referred to collectivelyas the “Senior Loan Documents.”

 

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

 

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

 

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

 

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

 

F.             The SubordinateNote and the total indebtedness evidenced thereby are (i) governed by acertain Subordinate Loan Agreement of even date with the Subordinate Notebetween Subordinate Lender and Borrower (as amended, supplemented, modified,restated, renewed or extended from time to time, the “Subordinate LoanAgreement”) and (ii) secured by each Subordinate Mortgage, as definedin the Subordinate Loan Agreement, executed by Borrower for the benefit ofSubordinate Lender (collectively, as amended, supplemented, modified, restated,renewed or extended from time to time, the “Subordinate Mortgage”),granting a third priority lien on the Property and any Improvements situatedthereon.  The Subordinate Note, theSubordinate Loan Agreement, the Subordinate Mortgage and any security agreement,pledge agreement, assignment agreement, UCC financing statements, environmentalindemnity agreement, guaranty, completion guaranty, any reimbursement agreementor reimbursement obligation of Borrower relating to Subordinate Lender’s loanto Borrower to fund certain improvements that will be completed or maintainedfor the benefit of the Property or surrounding properties, any interest rateswap, collar or other interest rate protection agreement that Borrower entersinto with Subordinate Lender pertaining to the Subordinate Loan, or anyassignment of architect’s agreement, construction contract or other contractsor subcontracts or any other document or modification now or hereafter executedin connection therewith are herein referred to collectively as the “SubordinateLoan Documents.”

 

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

 

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Obligations to SeniorLender’s rights to receive payments under or on account of the Senior LoanObligations.

 

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

 

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

 

NOW,THEREFORE, for and in consideration of the mutual covenants hereinafter setforth and other good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, Senior Lender, Junior Lender and SubordinateLender hereby agree as follows:

 

# 1.             Recitals Incorporated.  The recitals set forth hereinabove areincorporated herein by reference to the same extent and with the same force andeffect as if fully set forth hereinbelow; provided, however, that such recitalsshall not be deemed to modify the express provisions hereinafter set forth.

#  

# 2.             Definitions.  The following terms shall have the meaningsindicated below:

#  

“Affiliate” means, asto any particular Person, any Person directly or indirectly, through one ormore intermediaries, controlling, Controlled by or under common Control withthe Person or Persons in question.

 

“Affiliated SubordinateLender” is defined in Section 13.

 

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

 

“Business Day” meansany day other than Saturday, Sunday or a day that is a legal holiday under thelaws of the State of New York or on which banking institutions in theState of New York are required by law or other governmental action toclose.

 

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

 

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JuniorLoan Documents, or the Subordinate Loan pursuant to the Subordinate LoanDocuments.

 

“Control” meanseither (a) the ownership, directly or indirectly, in the aggregate of morethan fifty percent (50%) of the beneficial ownership interests of an entity, or(b) the possession, directly or indirectly, of the power to direct orcause the direction of the management or policies of an entity, whether throughthe ability to exercise voting power, by contract or otherwise.  “Controlled by,” “controlling” and “undercommon control with” shall have the respective correlative meaning thereto.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Junior Loan” or “JuniorLoan Obligations” means all present and future indebtedness, obligationsand liabilities of Borrower under the Junior Loan Documents, including (a) allprincipal (including principal which is borrowed, repaid and reborrowed),interest (including interest accruing subsequent to, and interest that wouldhave accrued but for, the filing of any petition under any bankruptcy,insolvency or similar law or the commencement of any Proceeding), defaultinterest, late charges, prepayment fees, expenses, fees, reimbursementobligations relating to Junior Lender’s issuance or execution of standbyletters of credit or developer’s agreements pertaining to the Property orsurrounding properties, other reimbursements, interest rate swaps, collars orother interest rate protection agreements that Borrower may enter into withJunior Lender pertaining to the Junior Loan, indemnities and other amountspayable thereunder, in each case whether now or hereafter arising, direct orindirect, primary or secondary, joint, several or joint and several, liquidatedor unliquidated, final or contingent, and whether incurred as maker, endorseror otherwise; (b) all indebtedness arising from all 

 

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presentand future optional or obligatory advances (including advances to coveroverdrafts that pertain to the Property) under the Junior Note or any otherJunior Loan Document, (c) any and all amendments, modifications,extensions, renewals, refinancing or refundings of any of such indebtedness,obligations or liabilities, and (d) any and all sums advanced or expendedby Junior Lender (whether deemed optional or obligatory advances, or otherwise)which Junior Lender deems necessary or appropriate (1) to advance orcomplete construction of the Property and any Improvements and market theProperty or any portion thereof for sale, (2) to repair, maintain orotherwise protect the Property and any Improvements or to prevent waste ordestruction or to pay or prevent liens or to defend Borrower’s title or JuniorLender’s lien priority, (3) to pay taxes, assessments or insurancepremiums in respect of the Property or any Improvements or to otherwise protectJunior Lender’s security interest in the Property, any Improvements and anyother Collateral, or (4) in connection with Junior Lender’s protection orexercise of its rights or remedies under the Junior Loan Documents.  To the extent any payment on any of theJunior Loan Obligations, whether by or on behalf of Borrower, as proceeds ofsecurity or enforcement of any right of setoff or otherwise, is recovered by orrequired to be paid over to Borrower or a receiver, trustee in bankruptcy,liquidating trustee, agent or other Person in a Proceeding, such Junior LoanObligation or any part thereof originally intended to be satisfied by suchpayment shall be deemed to be reinstated and outstanding as if such payment hadnot occurred.  All outstanding JuniorLoan Obligations shall be and remain Junior Loan Obligations subordinate to theSenior Loan Obligations and superior to the Subordinate Loan Obligations forall purposes of this Agreement, regardless of whether they are allowed, notallowed or subordinated in any Proceeding.

 

“Junior Loan Agreement”is defined in Recital D.

 

“Junior Loan Documents”is defined in Recital D.

 

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

 

“Junior Loan Modification”is defined in Section 13.

 

“Junior Loan PurchasePrice” means a purchase price equal to the aggregate amount outstanding,including principal, accrued interest, prepayment premium, exit fee, swapbreakage costs, default interest, late charges, foreclosure or otherenforcement 

 

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

 

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

 

“Junior Mortgage” isdefined in Recital C.

 

“Junior Non-MonetaryDefault” means a Junior Default that cannot be cured solely by the paymentof money.

 

“Junior Note” isdefined in Recital C.

 

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

 

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

 

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

 

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

 

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

 

“Loan Documents”means, collectively, the Senior Loan Documents, Junior Loan Documents andSubordinate Loan Documents.

 

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

 

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

 

“Non-AffiliatedSubordinate Lender” is defined in Section 13.

 

“PAL Lease” isdefined in the Senior Loan Agreement.

 

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

 

“Purchase” is definedin Section 7(g)(ii).

 

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

 

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

 

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

 

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

 

“Protective Advances”means any and all sums advanced or expended by Senior Lender, Junior Lender or SubordinateLender (whether deemed optional or obligatory advances, or otherwise) whichSenior Lender, Junior Lender or Subordinate Lender, as the case may be, deemsnecessary or appropriate (a) to advance or complete construction of theProperty and any Improvements and market the Property or any portion thereoffor sale, (b) to repair, maintain or otherwise protect the Property andany Improvements or to prevent waste or destruction or to pay or prevent liensor to defend Borrower’s title or Senior Lender’s, Junior Lender’s orSubordinate Lender’s lien priority, (c) to pay taxes, assessments orinsurance premiums in respect of the Property or any Improvements or tootherwise protect Senior Lender’s, Junior Lender’s or Subordinate Lender’ssecurity interest in the Property, any Improvements and any other Collateral,or (d) in connection with Senior Lender’s, Junior Lender’s or SubordinateLender’s protection or exercise of its rights or remedies under the Senior LoanDocuments, Junior Loan Documents or the Subordinate Loan Documents, as the casemay be.

 

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

 

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

 

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

 

“Senior Loan Agreement”is defined in Recital B.

 

“Senior Loan Documents”is defined in Recital B.

 

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

 

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“Senior Loan” or “SeniorLoan Obligations” means all present and future indebtedness, obligationsand liabilities of Borrower under the Senior Loan Documents, including (a) allprincipal (including principal which is borrowed, repaid and reborrowed),interest (including interest accruing subsequent to, and interest that wouldhave accrued but for, the filing of any petition under any bankruptcy,insolvency or similar law or the commencement of any Proceeding), defaultinterest, late charges, prepayment fees, expenses, fees, reimbursementobligations relating to Senior Lender’s issuance or execution of standbyletters of credit or developer’s agreements pertaining to the Property orsurrounding properties, other reimbursements, interest rate swaps, collars orother interest rate protection agreements that Borrower may enter into withSenior Lender pertaining to the Senior Loan, indemnities and other amountspayable thereunder, in each case whether now or hereafter arising, direct orindirect, primary or secondary, joint, several or joint and several, liquidatedor unliquidated, final or contingent, and whether incurred as maker, endorseror otherwise; (b) all indebtedness arising from all present and futureoptional or obligatory advances (including advances to cover overdrafts thatpertain to the Property) under the Senior Note or any other Senior LoanDocument, (c) any and all amendments, modifications, extensions, renewals,refinancing or refundings of any of such indebtedness, obligations orliabilities, and (d) any and all sums advanced or expended by SeniorLender (whether deemed optional or obligatory advances, or otherwise) whichSenior Lender deems necessary or appropriate (1) to advance or completeconstruction of the Property and any Improvements and market the Property orany portion thereof for sale, (2) to repair, maintain or otherwise protectthe Property and any Improvements or to prevent waste or destruction or to payor prevent liens or to defend Borrower’s title or Senior Lender’s lienpriority, (3) to pay taxes, assessments or insurance premiums in respectof the Property or any Improvements or to otherwise protect Senior Lender’ssecurity interest in the Property, any Improvements and any other Collateral,or (4) in connection with Senior Lender’s protection or exercise of itsrights or remedies under the Senior Loan Documents.  To the extent any payment on any of theSenior Loan Obligations, whether by or on behalf of Borrower, as proceeds ofsecurity or enforcement of any right of setoff or otherwise, is recovered by orrequired to be paid over to Borrower or a receiver, trustee in bankruptcy,liquidating trustee, agent or other Person in a Proceeding, such Senior LoanObligation or any part thereof originally intended to be satisfied by suchpayment shall be deemed to be reinstated and outstanding as if such payment hadnot occurred.  All outstanding Senior LoanObligations shall be and remain Senior Loan Obligations for all purposes ofthis Agreement, regardless of whether they are allowed, not allowed orsubordinated in any Proceeding.

 

“SeniorLoan Modification” is defined in Section 13.

 

“Senior Loan PurchasePrice” means a purchase price equal to the aggregate amount outstanding,including principal, accrued interest, prepayment premium, exit fee, swapbreakage costs, default interest, late charges, foreclosure or otherenforcement expenses, attorneys’ fees, Protective Advances, and any otheroutstanding Senior Loan Obligations and reasonable costs of the Purchaseincurred by the Senior Lender.

 

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

 

“Senior Mortgage” isdefined in Recital B.

 

“Senior Non-MonetaryDefault” means a Senior Default that cannot be cured solely by the paymentof money.

 

“Senior Note” isdefined in Recital A.

 

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

 

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

 

“Special ModificationTerms of Junior Loan Documents” means any amendment or modification of theJunior Loan Documents entered into after the date of this Agreement withrespect to the following in order to: (a) increase the principal amountsecured by the Junior Mortgage (other than increases in respect of ProtectiveAdvances) or amend the Junior Note or otherwise modify the amount or timing ofthe payments on the Junior Note, (b) increase the interest rate (otherthan a calculation of the increase to a default rate and imposition of latecharges), (c) amend or modify the provisions limiting transfers ofinterests in the Borrower or the Property, (d) shorten the scheduledmaturity date of the Junior Loan (except that Junior Lender may permit Borrowerto exercise any extension options in accordance with the terms and provisionsof the Junior Loan Documents), (e) amend the default section under theJunior Loan Documents in a manner that shortens grace or cure periods or addsany provisions to cross-default or cross-collateralize the Junior Loan with anyother indebtedness, or (f) increase in any other material respect anymonetary obligations of Borrower under the Junior Loan Documents.

 

“Special ModificationTerms of Senior Loan Documents” means any amendment or modification of theSenior Loan Documents entered into after the date of this Agreement withrespect to the following in order to: (a) increase the principal amountsecured by the Senior Mortgage (other than increases in respect of ProtectiveAdvances), (b) increase the interest rate (other than a calculation of theincrease to a default rate and imposition of late charges), (c) amend ormodify the provisions limiting transfers of interests in the Borrower or theProperty, (d) shorten the scheduled maturity date of the Senior Loan(except that Senior Lender may permit Borrower to exercise any extensionoptions in accordance with the terms and provisions of the Senior LoanDocuments), (e) amend the default section under the Senior Loan Documentsin a manner that shortens grace or cure periods or adds any provisions tocross-default or cross-collateralize the Senior Loan with any otherindebtedness, or (f) increase in any other material respect any monetaryobligations of Borrower under the Senior Loan Documents except by entering intoan interest rate swap or other similar interest rate hedging instrument.

 

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

 

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amountsecured by the Subordinate Mortgage (other than increases in respect ofProtective Advances), (b) increase the interest rate (other than acalculation of the increase to a default rate and imposition of late charges), (c) amendor modify the provisions limiting transfers of interests in the Borrower or theProperty, (d) shorten the scheduled maturity date of the Subordinate Loan(except that Subordinate Lender may permit Borrower to exercise any extensionoptions in accordance with the terms and provisions of the Subordinate LoanDocuments), (e) amend the default section under the Subordinate LoanDocuments in a manner that shortens grace or cure periods or adds anyprovisions to cross-default or cross-collateralize the Subordinate Loan withany other indebtedness, or (f) increase in any other material respect anymonetary obligations of Borrower under the Subordinate Loan Documents.

 

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

 

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

 

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

 

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

 

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

 

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indirect,primary or secondary, joint, several or joint and several, liquidated orunliquidated, final or contingent, and whether incurred as maker, endorser orotherwise; (b) all indebtedness arising from all present and futureoptional or obligatory advances (including advances to cover overdrafts thatpertain to the Property) under the Subordinate Note or any other SubordinateLoan Document, (c) any and all amendments, modifications, extensions,renewals, refinancing or refundings of any of such indebtedness, obligations orliabilities, and (d) any and all sums advanced or expended by SubordinateLender (whether deemed optional or obligatory advances, or otherwise) whichSubordinate Lender deems necessary or appropriate (1) to advance orcomplete construction of the Property and any Improvements and market theProperty or any portion thereof for sale, (2) to repair, maintain orotherwise protect the Property and any Improvements or to prevent waste ordestruction or to pay or prevent liens or to defend Borrower’s title orSubordinate Lender’s lien priority, (3) to pay taxes, assessments orinsurance premiums in respect of the Property or any Improvements or tootherwise protect Subordinate Lender’s security interest in the Property, anyImprovements and any other Collateral, or (4) in connection withSubordinate Lender’s protection or exercise of its rights or remedies under theSubordinate Loan Documents.  To theextent any payment on any of the Subordinate Loan Obligations, whether by or onbehalf of Borrower, as proceeds of security or enforcement of any right ofsetoff or otherwise, is recovered by or required to be paid over to Borrower ora receiver, trustee in bankruptcy, liquidating trustee, agent or other Personin a Proceeding, such Subordinate Loan Obligation or any part thereoforiginally intended to be satisfied by such payment shall be deemed to bereinstated and outstanding as if such payment had not occurred.  All outstanding Subordinate Loan Obligationsshall be and remain Subordinate Loan Obligations subordinate to both the SeniorLoan Obligations and the Junior Loan Obligations for all purposes of thisAgreement, regardless of whether they are allowed, not allowed or subordinatedin any Proceeding.

 

“Subordinate LoanAgreement” is defined in Recital D.

 

“Subordinate LoanDocuments” is defined in Recital D.

 

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

 

“Subordinate LoanModification” is defined in Section 13.

 

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

 

“Subordinate Mortgage” is defined inRecital D.

 

“Subordinate Note” isdefined in Recital D.

 

“Subordinate PermittedScheduled Payments” is defined in Section 6.

 

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

 

“Subordinate PurchaseClosing Date” is defined in Section 13.

 

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

 

“Swap Contract” isdefined in the Senior Loan Documents.

 

“Transfer” is definedin Section 13.

 

# 3.             Approval of Loans and LoanDocuments; Funding.

#  

## (a)           SubordinateLender hereby acknowledges that (i) subject to the terms and conditions ofthis Agreement, it hereby consents to and approves of the making of the SeniorLoan and Junior Loan and, subject to the terms and provisions of thisAgreement, all of the terms and provisions of the Senior Loan Documents andJunior Loan Documents, (ii) the execution, delivery and performance of theSenior Loan Documents and Junior Loan Documents will not constitute a defaultor an event which, with the giving of notice or the lapse of time, or both,would constitute a default under the Subordinate Loan Documents, (iii) SeniorLender is under no obligation or duty to, nor has Senior Lender representedthat it will, see to the application of the proceeds of the Senior Loan byBorrower or any other Person to whom Senior Lender disburses such proceeds, (iv) anyapplication or use of the proceeds of the Senior Loan for purposes other than thoseprovided in the Senior Loan Documents shall not affect, impair or defeat theterms and provisions of this Agreement or the Senior Loan Documents, (v) JuniorLender is under no obligation or duty to, nor has Junior Lender representedthat it will, see to the application of the proceeds of the Junior Loan byBorrower or any other Person to whom Junior Lender disburses such proceeds, and(vi) any application or use of the proceeds of the Junior Loan forpurposes other than those provided in the Junior Loan Documents shall notaffect, impair or defeat the terms and provisions of this Agreement or theJunior Loan Documents.  The foregoingconsent and acknowledgement by Subordinate Lender is not intended and shall notbe construed to (i) impose any duty or obligation on Subordinate Lenderwith respect to Senior Lender or Junior Lender or with respect to the SeniorLoan Documents and Junior Loan Documents other than as expressly set forth inthis Agreement (and no such duty or obligation shall be implied), or 

 

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## (ii) amendor modify the respective obligations of the parties to the Subordinate LoanDocuments other than as expressly set forth herein.

##  

## (b)           Junior Lenderhereby acknowledges that (i) subject to the terms and conditions of thisAgreement, it hereby consents to and approves of the making of the Senior Loanand Subordinate Loan and, subject to the terms and provisions of thisAgreement, the terms of the Senior Loan Documents and Subordinate Loan Documents,(ii) the execution and delivery of the Senior Loan Documents andSubordinate Loan Documents will not constitute a default or an event which,with the giving of notice or the lapse of time, or both, would constitute adefault under the Junior Loan Documents, (iii) each of the Senior Lenderand Subordinate Lender is under no obligation or duty to, nor has either of theSenior Lender or Subordinate Lender represented that it will, see to theapplication of the proceeds of the Senior Loan or Subordinate Loan by Borroweror any other Person to whom each of the Senior Lender and Subordinate Lenderdisburses such proceeds and (iv) any application or use of the proceeds ofthe Senior Loan and Subordinate Loan for purposes other than those provided inthe Senior Loan Documents and Subordinate Loan Documents shall not affect,impair or defeat the terms and provisions of this Agreement or the Senior LoanDocuments or Subordinate Loan Documents, respectively.  The foregoing consent and acknowledgement byJunior Lender is not intended and shall not be construed to (i) impose anyduty or obligation on Junior Lender with respect to Senior Lender orSubordinate Lender or with respect to the Senior Loan Documents and SubordinateLoan Documents other than as expressly set forth in this Agreement (and no suchduty or obligation shall be implied), or (ii) amend or modify therespective obligations of the parties to the Junior Loan Documents other thanas expressly set forth herein.

##  

## (c)           Senior Lenderhereby acknowledges that (i) subject to the terms and conditions of thisAgreement, it hereby consents to and approves of the making of the Junior Loanand Subordinate Loan and, subject to the terms and provisions of thisAgreement, the terms of the Junior Loan Documents and Subordinate LoanDocuments, (ii) the execution and delivery of the Junior Loan Documentsand Subordinate Loan Documents will not constitute a default or an event which,with the giving of notice or the lapse of time, or both, would constitute adefault under the Senior Loan Documents, (iii) each of the Junior Lenderand Subordinate Lender is under no obligation or duty to, nor has either of theJunior Lender or Subordinate Lender represented that it will, see to theapplication of the proceeds of the Junior Loan or Subordinate Loan,respectively, by Borrower or any other Person to whom Junior Lender orSubordinate Lender, respectively, disburses such proceeds and (iv) anyapplication or use of the proceeds of the Junior Loan and Subordinate Loan forpurposes other than those provided in the Junior Loan Documents and SubordinateLoan Documents, respectively, shall not affect, impair or defeat the terms andprovisions of this Agreement or the Junior Loan Documents or Subordinate LoanDocuments.  The foregoing consent andacknowledgement by Senior Lender is not intended and shall not be construed to (i) imposeany duty or obligation on Senior Lender with respect to Junior Lender andSubordinate Lender or with respect to the Junior Loan Documents or SubordinateLoan Documents other than as expressly set forth in this Agreement (and no suchduty or 

 

13

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## obligationshall be implied), or (ii) amend or modify the respective obligations ofthe parties to the Senior Loan Documents other than as expressly set forthherein.

##  

## (d)           Notwithstandinganything herein to the contrary, Senior Lender, Junior Lender and SubordinateLender agree that, except for the Initial Advance of the Senior Loan, theSubordinate Loan shall be funded in full prior to the time that the Junior Loanand Senior Loan are funded, and, except for the Initial Advance of the SeniorLoan, the Junior Loan shall be funded in full prior to the time that the SeniorLoan is funded.

##  

# 4.             Representations, Warrantiesand Covenants.

#  

## (a)           SubordinateLender hereby represents, warrants and covenants as follows:

##  

### (i)            SubordinateLender has delivered to Senior Lender and Junior Lender true, correct andcomplete copies of the Subordinate Loan Documents as same exist as of the datehereof.  Exhibit B attachedhereto and made a part hereof is a true, correct and complete listing of all ofthe Subordinate Loan Documents as of the date hereof.  To Subordinate Lender’s knowledge, therecurrently exists no default or event which, with the giving of notice or thelapse of time, or both, would constitute a default under any of the SubordinateLoan Documents.  Subordinate Lender hasno knowledge of any previous default or event of default under any of theSubordinate Loan Documents which has not been cured or waived.

###  

### (ii)           SubordinateLender is the sole legal and beneficial owner of the entire Subordinate Loan.

###  

### (iii)          SubordinateLender shall deliver to Senior Lender and Junior Lender copies of anyamendments to any one or more of the Subordinate Loan Documents within areasonable time after any of such applicable instruments have been executed bySubordinate Lender.  Notwithstandinganything herein to the contrary, Subordinate Lender shall provide Senior Lenderwith prompt notice of a Subordinate Default.

###  

### (iv)          This Agreementhas been duly authorized by Subordinate Lender, the persons executing,acknowledging, and delivering this Agreement on behalf of Subordinate Lenderare fully authorized to do so, and all of the terms and provisions of this Agreementare enforceable against Subordinate Lender and its successors and assigns,except to the extent that such enforceability may be limited by laws generallyaffecting the enforcement of creditors’ rights or by principles of equity.  Any consents required in order forSubordinate Lender to execute this Agreement and perform its obligationshereunder have been obtained.

###  

### (v)           SubordinateLender acknowledges and understands that Senior Lender and Junior Lender willrely upon the certification, warranties, representations, covenants, andagreements contained in this Agreement as a material consideration andinducement in making, extending or modifying the loan evidenced by the SeniorNote or Junior Note.

 

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### (vi)          SubordinateLender acknowledges and understands that Senior Lender and Junior Lender arelending money and extending credit to Borrower on the basis of Borrower’sfinancial status as an independent entity, separate and apart from any otherentity, including without limitation Subordinate Lender or any other affiliateof Borrower, and that Senior Lender and Junior Lender expect to be able to lookto the assets of Borrower for the satisfaction of their respective loans.

###  

## (b)           Junior Lender hereby represents,warrants and covenants as follows:

##  

### (i)            Junior Lenderhas delivered to Senior Lender and Subordinate Lender true, correct andcomplete copies of the Junior Loan Documents as same exist as of the datehereof.  Exhibit C attachedhereto and made a part hereof is a true, correct and complete listing of theJunior Loan Documents as of the date hereof. To Junior Lender’s knowledge, there currently exists no default or eventwhich, with the giving of notice or the lapse of time, or both, wouldconstitute a default under any of the Junior Loan Documents.  Junior Lender has no knowledge of anyprevious default or event of default under any of the Junior Loan Documentswhich has not been cured or waived.

###  

### (ii)           Junior Lenderis the sole legal and beneficial owner of the Junior Loan.

###  

### (iii)          Junior Lendershall deliver to Senior Lender and Subordinate Lender copies of any amendmentsto any one or more of the Junior Loan Documents within a reasonable time afterany of such applicable instruments have been executed by Senior Lender.  Notwithstanding anything herein to thecontrary, Junior Lender shall provide Senior Lender with prompt notice of aJunior Default.

###  

### (iv)          This Agreementhas been duly authorized by Junior Lender, the persons executing,acknowledging, and delivering this Agreement on behalf of Junior Lender arefully authorized to do so, and all of the terms and provisions of thisAgreement are enforceable against Junior Lender and its successors and assigns,except to the extent that such enforceability may be limited by laws generallyaffecting the enforcement of creditors’ rights or by principles of equity.  Any consents required in order for JuniorLender to execute this Agreement and perform its obligations hereunder havebeen obtained.

###  

### (v)           Junior Lenderacknowledges and understands that Senior Lender and Subordinate Lender willrely upon the certification, warranties, representations, covenants, andagreements contained in this Agreement as a material consideration andinducement in making, extending or modifying the loans evidenced by the SeniorNote and the Subordinate Note.

 

15

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## (c)           Senior Lender herebyrepresents, warrants and covenants as follows:

##  

### (i)            Senior Lenderhas delivered to Junior Lender and Subordinate Lender true, correct andcomplete copies of the Senior Loan Documents as same exist as of the datehereof.  Exhibit D attachedhereto and made a part hereof is a true, correct and complete listing of theSenior Loan Documents as of the date hereof. To Senior Lender’s knowledge, there currently exists no default or eventwhich, with the giving of notice or the lapse of time, or both, wouldconstitute a default under any of the Senior Loan Documents.  Senior Lender has no knowledge of anyprevious default or event of default under any of the Senior Loan Documentswhich has not been cured or waived.

###  

### (ii)           Senior Lenderis the sole legal and beneficial owner of the Senior Loan.

###  

### (iii)          Senior Lendershall deliver to Junior Lender and Subordinate Lender copies of any amendmentsto any one or more of the Senior Loan Documents within a reasonable time afterany of such applicable instruments have been executed by Senior Lender.

###  

### (iv)          This Agreementhas been duly authorized by Senior Lender, the persons executing,acknowledging, and delivering this Agreement on behalf of Senior Lender arefully authorized to do so, and all of the terms and provisions of thisAgreement are enforceable against Senior Lender and its successors and assigns,except to the extent that such enforceability may be limited by laws generallyaffecting the enforcement of creditors’ rights or by principles of equity.  Any consents required in order for SeniorLender to execute this Agreement and perform its obligations hereunder have beenobtained.

###  

### (v)           Senior Lenderacknowledges and understands that Junior Lender and Subordinate Lender willrely upon the certification, warranties, representations, covenants, andagreements contained in this Agreement as a material consideration and inducementin making, extending or modifying the loans evidenced by the Junior Note andthe Subordinate Note.

###  

# 5.             Subordination.

#  

## (a)           Subject to theterms of this Agreement, Subordinate Lender, for itself and its successors andassigns (including, without limitation, all subsequent holders of theSubordinate Note and the Subordinate Mortgage) does hereby subordinate (a) theSubordinate Mortgage and all other Subordinate Loan Documents, (b) all ofthe Subordinate Loan Obligations, and (c) all of its right, title,security interest, lien, and interest in and to the Property, any Improvementsthereon and any other Collateral and all sales proceeds, other proceeds, rents,issues, and profits therefrom, to first, (A)(i) the Senior Mortgage andall other Senior Loan Documents, (ii) all of the Senior Loan Obligations, (iii) allof the right, title, security interest, lien and interest held by Senior Lenderand its successors and assigns (including, without limitation, all subsequent 

 

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## holdersof the Senior Note and the Senior Mortgage), in and to the Property, anyImprovements thereon and any other Collateral and all sales proceeds, proceedsfrom insurance or condemnation, other proceeds, rents, issues, and profitstherefrom, under and pursuant to (X) the Senior Note, (Y) the SeniorMortgage, and (Z) all other Senior Loan Documents, and any and allextensions, renewals, modifications, and replacements thereof and second, (B)(i) theJunior Mortgage and all other Junior Loan Documents, (ii) all of theJunior Loan Obligations, (iii) all of the right, title, security interest,lien and interest held by Junior Lender and its successors and assigns(including, without limitation, all subsequent holders of the Junior Note andthe Junior Mortgage), in and to the Property, any Improvements thereon and anyother Collateral and all sales proceeds, proceeds from insurance orcondemnation, other proceeds, rents, issues, and profits therefrom, under andpursuant to (X) the Junior Note, (Y) the Junior Mortgage, and (Z) allother Junior Loan Documents, and any and all extensions, renewals,modifications, and replacements thereof. From and after the date hereof, all of the documents, indebtedness,right, title, security interest, lien, and interest described inclauses (a), (b) and (c) above in this paragraph shall besubject and subordinate to all of the documents, indebtedness, right, title,security interest, lien, and interest described in clauses (A)(i), (ii) and(iii) and (B)(i), (ii) and (iii) above in this paragraph.

##  

## (b)           Subject to theterms of this Agreement, Junior Lender, for itself and its successors andassigns (including, without limitation, all subsequent holders of the JuniorNote and the Junior Mortgage) does hereby subordinate (a) the JuniorMortgage and all other Junior Loan Documents, (b) all of the Junior LoanObligations, and (c) all of its right, title, security interest, lien, andinterest in and to the Property, any Improvements thereon and any otherCollateral and all sales proceeds, other proceeds, rents, issues, and profitstherefrom, to (i) the Senior Mortgage and all other Senior Loan Documents,(ii) all of the Senior Loan Obligations, (iii) all of the right,title, security interest, lien and interest held by Senior Lender and itssuccessors and assigns (including, without limitation, all subsequent holdersof the Senior Note and the Senior Mortgage), in and to the Property, anyImprovements thereon and any other Collateral and all sales proceeds, proceedsfrom insurance or condemnation, other proceeds, rents, issues, and profitstherefrom, under and pursuant to (X) the Senior Note, (Y) the SeniorMortgage, and (Z) all other Senior Loan Documents, and any and allextensions, renewals, modifications, and replacements thereof.  From and after the date hereof, all of thedocuments, indebtedness, right, title, security interest, lien, and interestdescribed in clauses (a), (b) and (c) above in this paragraph shallbe subject and subordinate to all of the documents, indebtedness, right, title,security interest, lien, and interest described in clauses (i), (ii) and (iii) abovein this paragraph.

##  

# 6.             Permitted ScheduledPayments; Permitted Sales Proceeds Payments.

#  

## (a)           SubordinateLender, for itself and its successors and assigns (including, withoutlimitation, all subsequent holders of the Subordinate Note and the SubordinateMortgage) does hereby agree that, notwithstanding anything provided in theSubordinate Loan Documents to the contrary, but subject to the terms of theLock Box Agreement, so long as the Senior Loan Obligations and Junior LoanObligations remain outstanding, unless both Senior Lender and Junior Lendershall consent in writing:

 

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### (i)            Default; NoPayments.  Except asotherwise provided in the Lock Box Agreement, no payment shall be made onaccount of the Subordinate Loan Obligations at any time when a Senior Defaultis existing under the Senior Loan Documents or a Junior Default is existingunder the Junior Loan Documents.

###  

### (ii)           SubordinatePermitted Scheduled Payments.  So long as no Senior Default is existingunder the Senior Loan Documents and no Junior Default is existing under theJunior Loan Documents, Subordinate Lender may collect and receive SubordinatePermitted Scheduled Payments on account of the Subordinate LoanObligations.  As used herein, “SubordinatePermitted Scheduled Payments” shall mean the payments permitted to be madewith respect to Subordinate Loan Obligations pursuant to Section 4.1of the Lock Box Agreement.

###  

### (iii)          SubordinateLender Payments Held In Trust For Senior Lender and Junior Lender.  In the event that any payment is made toSubordinate Lender which is not permitted under this Agreement, such paymentsshall be held by Subordinate Lender in trust for the benefit of first, SeniorLender and second, Junior Lender, and shall be paid forthwith over anddelivered: first, to Senior Lender for application to the payment of all of theSenior Loan Obligations remaining unpaid; and second, to Junior Lender forapplication to the payment of all Junior Loan Obligations remaining unpaid,subject to the terms of the Lock Box Agreement.

###  

## (b)           Junior Lender,for itself and its successors and assigns (including, without limitation, allsubsequent holders of the Junior Note and the Junior Mortgage) but subject tothe terms of the Lock Box Agreement, does hereby agree that, notwithstandinganything provided in the Junior Loan Documents to the contrary, so long as theSenior Loan Obligations remain outstanding, unless Senior Lender shall consentin writing:

##  

### (i)            Default; NoPayments.  Except asotherwise provided in the Lock Box Agreement, no payment shall be made onaccount of the Junior Loan Obligations at any time when a Senior Default isexisting under the Senior Loan Documents.

###  

### (ii)           JuniorPermitted Scheduled Payments.  So long as no Senior Default is existingunder the Senior Loan Documents, Junior Lender may collect and receive JuniorPermitted Scheduled Payments on account of the Junior Loan Obligations.  As used herein, “Junior PermittedScheduled Payments” shall mean the payments permitted to be made withrespect to the Junior Loan Obligations pursuant to Section 4.1 ofthe Lock Box Agreement.

###  

### (iii)          Junior LenderPayments Held In Trust For Senior Lender.  In the event that any payment is made toJunior Lender which is not permitted under this Agreement, such payments shallbe held by Junior Lender in trust for the benefit of Senior Lender and shall bepaid forthwith over and delivered to Senior Lender for application to thepayment of all of the Senior Loan Obligations remaining unpaid, subject to theterms of the Lock Box Agreement.

 

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# 7.             Default Under Senior LoanDocuments.

#  

## (a)           Senior DefaultNotice and Senior Enforcement Notice.  Prior to commencing any Senior LoanEnforcement Action, Senior Lender shall deliver to Subordinate Lender andJunior Lender two (2) written notices, as follows: (i) a copy of anywritten notice (the “Senior Default Notice”) sent by Senior Lender toBorrower regarding the occurrence of a Senior Default, which shall be deliveredto Junior Lender and Subordinate Lender substantially concurrently with thedelivery of such Senior Default Notice to Borrower, and (ii) writtennotice (the “Senior Enforcement Notice”) that Senior Lender intends tocommence a Senior Loan Enforcement Action by reason of such Senior Default,which shall be delivered to Junior Lender and Subordinate Lender at a timedetermined by Senior Lender, but only after the period allowed for Borrower tocure such Senior Default, if any, in the Senior Loan Documents hasexpired.  Senior Lender shall forbearfrom actually commencing such Senior Loan Enforcement Action until the later ofJunior Lender’s Outside Date or Subordinate Lender’s Outside Date.

##  

## (b)           Senior MonetaryDefault.  The following provisions setforth in this Section 7(b) shall be applicable if SeniorLender sends a Senior Enforcement Notice with respect to a Senior MonetaryDefault:

##  

### (i)            Upon deliveryof a Senior Enforcement Notice with respect to a Senior Monetary Default,Junior Lender shall, within five (5) Business Days after such delivery,send written notice (the “JL Monetary Default Election Notice”) toSenior Lender and Subordinate Lender that either (A) Junior Lender intendsto cure such Senior Monetary Default, in which event the JL Monetary DefaultElection Notice to Senior Lender shall be accompanied by payment to the SeniorLender of immediately available funds sufficient to cure the Senior MonetaryDefault, or (B) Junior Lender has elected to first give Subordinate Lenderthe right to cure such Senior Monetary Default. If Junior Lender fails to send a JL Monetary Election Notice within five(5) Business Days after delivery of the Senior Enforcement Notice, thenJunior Lender shall be deemed to have elected the option described inclause (B) of the preceding sentence. If Junior Lender elects (or is deemed to have elected) to first giveSubordinate Lender the right to cure such Senior Monetary Default andthereafter Subordinate Lender elects (or is deemed to have elected) not to curethe Senior Monetary Default pursuant to Section 7(b)(ii) below,then Junior Lender shall have until the fifteenth (15th) Business Day afterdelivery of the Senior Enforcement Notice within which to cure such SeniorMonetary Default.

###  

### (ii)           If JuniorLender elects (or is deemed to have elected) to first give Subordinate Lenderthe right to cure a Senior Monetary Default pursuant to Section 7(b)(i) above,then Subordinate Lender shall have five (5) Business Days after deliveryof the JL Monetary Default Election Notice (or, if no JL Monetary DefaultElection Notice is sent, ten (10) Business Days after delivery of theSenior Enforcement Notice) to send written notice (the “SL Monetary DefaultResponse Notice”) to Junior Lender and Senior Lender stating either (A) thatSubordinate Lender has elected to cure such Senior Monetary Default, in which 

 

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### eventthe SL Monetary Default Response Notice to Senior Lender shall be accompaniedby payment to the Senior Lender of immediately available funds in an amountsufficient to cure the Senior Monetary Default, or (B) that SubordinateLender has elected not to cure such Senior Monetary Default.  If Subordinate Lender fails to send a SLMonetary Default Response Notice within five (5) Business Days afterdelivery of the JL Monetary Default Election Notice (or, if no JL MonetaryDefault Election Notice is sent, within ten (10) Business Days afterdelivery of the Senior Enforcement Notice), then Subordinate Lender shall bedeemed to have elected the option described in clause (B) of thepreceding sentence.  If SubordinateLender elects (or is deemed to have elected) not to cure the Senior MonetaryDefault, then Junior Lender may elect to cure same pursuant to the lastsentence in Section 7(b)(i) above.  Notwithstanding anything contained herein tothe contrary, if Subordinate Lender elects (or is deemed to have elected) notto cure the Senior Monetary Default, then Subordinate Lender shall be deemed tohave waived any right it may have to cure such Senior Monetary Default.  In such event, Junior Lender shall have the soleright (but not the obligation) to cure the Senior Monetary Default inaccordance with Section 7(b)(i) above and not later thanfifteen (15) Business Days after delivery of the Senior Enforcement Notice.

###  

## (c)           SeniorNon-Monetary Default.  Thefollowing provisions set forth in this Section 7(c) shall beapplicable if Senior Lender sends a Senior Enforcement Notice with respect to aSenior Non-Monetary Default:

##  

### (i)            Upon deliveryof a Senior Enforcement Notice from Senior Lender pursuant to Section 7(a)(ii) withrespect to a Senior Non-Monetary Default, Junior Lender shall, within ten (10) daysafter such delivery, send written notice (the “JL Non-Monetary DefaultElection Notice”) to Senior Lender and Subordinate Lender that either (A) JuniorLender will attempt to cure such Senior Non-Monetary Default, in which eventJunior Lender shall be allowed thirty (30) days after the date of the SeniorEnforcement Notice to effect such cure, or (B) Junior Lender has electedto first give Subordinate Lender the right to cure such Senior Non-MonetaryDefault.  If Junior Lender fails to senda JL Non-Monetary Default Election Notice within ten (10) days afterdelivery of the Senior Enforcement Notice, then Junior Lender shall be deemedto have elected the option described in clause (B) of the precedingsentence.  If Junior Lender elects (or isdeemed to have elected) to first give Subordinate Lender the right to cure suchSenior Non-Monetary Default and thereafter Subordinate Lender elects (or is deemedto have elected) not to cure the Senior Non-Monetary Default pursuant to Section 7(c)(ii) below,then Junior Lender shall have forty (40) days after delivery of the SeniorEnforcement Notice within which to cure such Senior Non-Monetary Default.

###  

### (ii)           If JuniorLender elects (or is deemed to have elected) to give Subordinate Lender theright to cure a Senior Non-Monetary Default pursuant to Section 7(c)(i) above,then Subordinate Lender shall have ten (10) days after delivery of the JLNon-Monetary Default Election Notice (or, if no JL 

 

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### Non-MonetaryDefault Election Notice is sent, twenty (20) days after such delivery of theSenior Enforcement Notice) to send written notice (the “SL Non-MonetaryDefault Response Notice”) to Junior Lender and Senior Lender stating either(A) that Subordinate Lender will attempt to cure such Senior Non-MonetaryDefault, in which event Subordinate Lender shall be allowed forty (40) daysafter such delivery of the Senior Enforcement Notice to effect such cure, or (B) thatSubordinate Lender has elected not to cure such Senior Non-MonetaryDefault.  If Subordinate Lender fails tosend a SL Non-Monetary Default Response Notice within ten (10) days afterdelivery of the JL Non-Monetary Default Election Notice (or, if no JLNon-Monetary Default Election Notice is sent, within twenty (20) days afterdelivery of the Senior Enforcement Notice), then Subordinate Lender shall bedeemed to have elected the option described in clause (B) of thepreceding sentence.  Notwithstandinganything contained herein to the contrary, if Subordinate Lender elects (or isdeemed to have elected) not to cure the Senior Non-Monetary Default, thenSubordinate Lender shall be deemed to have waived any right it may have to curesuch Senior Non-Monetary Default.  Insuch event, Junior Lender shall have the sole right (but not the obligation) tocure the Senior Non-Monetary Default in accordance with Section 7(c)(i) aboveand not later than forty (40) days after delivery of the SeniorEnforcement Notice.

###  

### (iii)          If JuniorLender elects in its JL Non-Monetary Default Election Notice to attempt to curethe Senior Non-Monetary Default but fails to cure same within thirty (30) daysafter delivery of the Senior Enforcement Notice, then Subordinate Lender shallhave until forty (40) days after the delivery of the Senior Enforcement Noticewithin which to cure such Senior Non-Monetary Default.

###  

### (iv)          If SubordinateLender elects in its SL Non-Monetary Default Response Notice to attempt to curethe Senior Non-Monetary Default but fails to cure same within forty (40) daysafter delivery of the Senior Enforcement Notice as provided in Section 7(c)(ii) above,then Junior Lender shall have until fifty (50) days after delivery of theSenior Enforcement Notice within which to cure such Senior Non-MonetaryDefault.

###  

## (d)           Termination ofCure Periods Upon Bankruptcy.  The cure periods set forth in the foregoingprovisions of this Section 7 shall automatically terminate upon theoccurrence of a Bankruptcy Event.

##  

## (e)           [Reserved.]

##  

## (f)            [Reserved.]

##  

## (g)           Rights to Purchase Seniorand Junior Loans.

##  

### (i)            At any timefollowing delivery of a Senior Default Notice and prior to the delivery bySenior Lender of a Senior Enforcement Notice, either the Junior Lender or theSubordinate Lender, as applicable, may send written notice 

 

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### (the“Lender Purchase Notice”) to Senior Lender and Junior Lender and/orSubordinate Lender, as applicable, as follows: (A) in the case of noticeby Junior Lender, notice that Junior Lender intends to purchase the Senior Loanat the Senior Loan Purchase Price, or (B) in the case of notice bySubordinate Lender, notice that Subordinate Lender intends to purchase theSenior Loan at the Senior Loan Purchase Price and the Junior Loan at the JuniorLoan Purchase Price (it being expressly agreed that Subordinate Lender may notpurchase the Senior Loan unless concurrently therewith Subordinate Lender alsopurchases the Junior Loan at the Junior Loan Purchase Price).  Upon delivery of a Lender Purchase Notice,the Lender delivering such notice shall have the exclusive right to purchasethe Senior Loan (or the Senior Loan and the Junior Loan, in the event SubordinateLender gives the Purchase Notice) until the Purchase Closing Date (ashereinafter defined).

###  

### (ii)           If eitherJunior Lender or Subordinate Lender elects in writing to purchase the SeniorLoan (and, in the case of Subordinate Lender, the Junior Loan as well) (the “Purchase”),the Purchase shall close on a date selected by Junior Lender or SubordinateLender, as applicable, that is not later than thirty (30) days after thedelivery of the Lender Purchase Notice (the “Purchase Closing Date”).  If Junior Lender is the purchaser,concurrently with payment to Senior Lender of the Senior Loan Purchase Price: (A) SeniorLender shall deliver or cause to be delivered to Junior Lender all Senior LoanDocuments held by or on behalf of Senior Lender, and (B) Senior Lendershall execute in favor of Junior Lender (or its designee) assignmentdocumentation, in form and substance reasonably acceptable to Junior Lender,assigning the Senior Loan and its rights under the Senior Loan Documents(without recourse, representations or warranties, except for representations asto the outstanding balance of the Senior Loan and as to Senior Lender’s nothaving assigned or encumbered its rights in the Senior Loan).  Upon consummation of the Purchase by JuniorLender, Junior Lender shall be subrogated to the rights of Senior Lender underthe Senior Loan Documents.  IfSubordinate Lender is the purchaser, concurrently with payment to the SeniorLender of the Senior Loan Purchase Price and to the Junior Lender of the JuniorLoan Purchase Price: (1) Senior Lender shall deliver or cause to bedelivered to Subordinate Lender all Senior Loan Documents held by or on behalfof Senior Lender; (2) Senior Lender shall execute in favor of SubordinateLender (or its designee) assignment documentation, in form and substancereasonably acceptable to Subordinate Lender, assigning the Senior Loan and itsrights under the Senior Loan Documents (without recourse, representations orwarranties, except for representations as to the outstanding balance of theSenior Loan and as to Senior Lender’s not having assigned or encumbered itsrights in the Senior Loan); (3) Junior Lender shall deliver or cause to bedelivered to Subordinate Lender all Junior Loan Documents held by or on behalfof Junior Lender; and (4) Junior Lender will execute in favor ofSubordinate Lender (or its designee) assignment documentation, in form andsubstance reasonably acceptable to Subordinate Lender, assigning the JuniorLoan and its rights under the Junior Loan Documents (without recourse,representations or warranties, except for representations as to the outstandingbalance of the Junior Loan and as to Junior 

 

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### Lender’snot having assigned or encumbered its rights in the Junior Loan).  Upon consummation of the Purchase bySubordinate Lender, Subordinate Lender shall be subrogated to the rights ofSenior Lender under the Senior Loan Documents and the Junior Lender under theJunior Loan Documents.  If a LenderPurchase Notice is sent pursuant to Section 7.1(g)(i) and thisSection 7.1(g)(ii), Senior Lender shall forbear from sending aSenior Enforcement Notice until such time as the Purchase Closing Date haspassed without the contemplated sale and purchase of the Senior Loan (or boththe Senior Loan and the Junior Loan if the Lender Purchase Notice was sent bySubordinate Lender) having occurred.

###  

### (iii)          Junior Lendershall also have the option to consummate a Purchase of the Senior Loan for theSenior Loan Purchase Price, and Subordinate Lender shall also have the optionto consummate a Purchase of the Senior Loan for the Senior Loan Purchase Priceand of the Junior Loan for the Junior Loan Purchase Price, at any time duringthe period beginning on the date of acceleration of the Senior Loan and endingon the date prior to the date a foreclosure or trustee’s sale (or deed in lieuof foreclosure) is conducted or consummated in respect of the Senior Loan.  Junior Lender may exercise such option bysending written notice of such exercise to Senior Lender together with thedeposit of immediately available funds in the amount of the Senior LoanPurchase Price with an escrow agent reasonably satisfactory to the SeniorLender, and in such event Junior Lender shall purchase the Senior Loan for theSenior Loan Purchase Price within ten (10) Business Days after such noticeis delivered (but in any event prior to the scheduled date of such foreclosureor trustee’s sale (or deed in lieu of foreclosure)).  Concurrently with payment to Senior Lender ofthe Senior Loan Purchase Price: (A) Senior Lender shall deliver or causeto be delivered to Junior Lender all Senior Loan Documents held by or on behalfof Senior Lender, and (B) Senior Lender shall execute in favor of JuniorLender (or its designee) assignment documentation, in form and substancereasonably acceptable to Junior Lender, assigning the Senior Loan and itsrights under the Senior Loan Documents (without recourse, representations orwarranties, except for representations as to the outstanding balance of theSenior Loan and as to Senior Lender’s not having assigned or encumbered itsrights in the Senior Loan).  Uponconsummation of the Purchase, Junior Lender shall be subrogated to the rightsof Senior Lender under the Senior Loan Documents.

###  

Subordinate Lender may exercise the option referred to in the precedingparagraph of this clause (iii) by sending written notice of suchexercise to Senior Lender and Junior Lender, together with the deposit ofimmediately available funds in the amount of the Senior Loan Purchase Price andJunior Lender Purchase Price with an escrow agent reasonably satisfactory tothe Senior Lender and Junior Lender, and in such event Subordinate Lender shallpurchase the Senior Loan for the Senior Loan Purchase Price and the Junior Loanfor the Junior Loan Purchase Price within ten (10) Business Days aftersuch notice is delivered (but in any event prior to the scheduled date of suchforeclosure or trustee’s sale (or deed in lieu of foreclosure)).  Concurrently with payment to Senior Lender ofthe Senior Loan Purchase Price and to Junior Lender of the Junior Loan Purchase

 

23

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Price: (A) Senior Lender and Junior Lendershall deliver or cause to be delivered to Subordinate Lender all Senior LoanDocuments held by or on behalf of Senior Lender and Junior Lender, and (B) SeniorLender and Junior Lender shall execute in favor of Subordinate Lender (or itsdesignee) assignment documentation, in form and substance reasonably acceptableto Subordinate Lender, assigning the Senior Loan and its rights under theSenior Loan Documents and the Junior Loan and its rights under the Junior LoanDocuments (without recourse, representations or warranties, except forrepresentations as to the outstanding balance of the Senior Loan and the JuniorLoan, respectively, and as to Senior Lender’s or Junior Lender’s as appropriatenot having assigned or encumbered its rights in the relevant Loan).  Upon consummation of the Purchase,Subordinate Lender shall be subrogated to the rights of Senior Lender under theSenior Loan Documents and Junior Lender under the Junior Loan Documents.

 

### (iv)          Notwithstandinganything to the contrary herein, upon delivery of a Senior Enforcement Noticeby Senior Lender to Subordinate Lender, Subordinate Lender shall have ten (10) daysduring which it shall have the exclusive right to provide to the Senior Lenderand the Junior Lender a Lender Purchase Notice. If Subordinate Lender fails to provide such Lender Purchase Noticewithin such ten (10) day period, Subordinate Lender shall have no furtherright to provide a Lender Purchase Notice with respect to such SeniorEnforcement Notice except as provided in Section 7(g)(iii) above.  At the expiration of such ten (10) dayperiod, subject to clause (iii), Junior Lender shall have an additionalten (10) day period within which to provide a Lender Purchase Notice.  Thereafter, neither Subordinate Lender norJunior Lender shall have any right to provide a Lender Purchase Notice inconnection with the applicable Senior Enforcement Notice (except as provided inSection 7(g)(iii) above).

###  

### (v)           Upon deliveryof a Lender Purchase Notice, the Lender delivering such notice shall have theexclusive right to purchase the Senior Loan (and the Junior Loan, ifapplicable) until the Purchase Closing Date.

###  

## (h)           Failure to Cure SeniorDefault or Purchase Senior Loan.  If (i) Junior Lender fails to eithercure the Senior Default that was the subject of the Senior Enforcement Noticeor to purchase the Senior Loan prior to the Purchase Closing Date, if any, and (ii) SubordinateLender fails to either cure the Senior Default that was the subject of theSenior Enforcement Notice or to purchase the Senior Loan and the Junior Loanprior to the Purchase Closing Date, if any, then Senior Lender shall, inaddition to the right to take a Senior Loan Enforcement Action, have the rightto amend, modify, restructure or extend the Senior Mortgage or any other SeniorLoan Documents (including without limitation any and all Special ModificationTerms of Senior Loan Documents) without notice to or the consent of JuniorLender and Subordinate Lender.  In suchevent, the Junior Loan, the Junior Mortgage and the other Junior Loan Documentsand the Subordinate Loan, the Subordinate Mortgage and the other Subordinate LoanDocuments and all indebtedness, obligations, liens and security interestsevidenced or secured thereby or from time to time outstanding thereunder shallcontinue to be junior, subject, and subordinate in all respects to the SeniorLoan, the 

 

24

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## Senior Mortgage and the Senior Loan Documents, as so amended, modified,extended, or restructured (including without limitation any and all SpecialModification Terms of Senior Loan Documents); provided, however, that in noevent shall the principal amount of the Senior Loan be increased except byreason of Protective Advances.  Thirdparties including title insurance companies insuring the priority of the SeniorMortgage are hereby authorized to rely on this provision as to the priority ofthe Senior Loan Documents, as so amended, modified, extended or restructured,without any requirement to confirm such senior position from Junior Lender orthe Subordinate Lender.

##  

# 8.             Default Under Junior LoanDocuments.

#  

## (a)           Junior DefaultNotice and Junior Enforcement Notice.  Prior to commencing any Junior LoanEnforcement Action, subject to Section 9(a) hereof, JuniorLender shall provide Senior Lender and Subordinate Lender with two (2) writtennotices, as follows: (i) a copy of any written notice (the “Junior DefaultNotice”) sent by Junior Lender to Borrower regarding the occurrence of a JuniorDefault, which shall be delivered to Senior Lender and Junior Lendersubstantially concurrently with the delivery of such Junior Default Notice toBorrower, and (ii) written notice (the “Junior Enforcement Notice”) that,subject to Section 9(a) hereof, Junior Lender intends tocommence a Junior Loan Enforcement Action by reason of such Junior Default,which shall be delivered to Senior Lender and Subordinate Lender at a timedetermined by Junior Lender, but only after the period allowed for Borrower tocure such Junior Default in the Junior Loan Documents has expired.  Junior Lender shall forbear from actuallycommencing such Junior Loan Enforcement Action until Subordinate Lender’sOutside Junior Loan Date, provided that any Junior Loan Enforcement Action issubject to Section 9(a) hereof.

##  

## (b)           Junior MonetaryDefault.  Upon receipt of a JuniorEnforcement Notice with respect to a Junior Monetary Default, SubordinateLender shall have a period of five (5) Business Days after such receiptwithin which Subordinate Lender may (but shall not be obligated to) cure suchJunior Monetary Default by making payment to Junior Lender in immediately availablefunds sufficient to cure the Junior Monetary Default.

##  

## (c)           JuniorNon-Monetary Default.  Uponreceipt of a Junior Enforcement Notice with respect to a Junior Non-MonetaryDefault, Subordinate Lender shall, within 10 Business Days after suchreceipt, send written notice (the “Subordinate Non-Monetary Default ElectionNotice”) to Senior Lender and Junior Lender that either (i) SubordinateLender will attempt to cure such Junior Non-Monetary Default, in which eventSubordinate Lender shall be allowed thirty (30) days after such SubordinateNon-Monetary Default Election Notice to effect such cure, or (ii) SubordinateLender has elected not to cure such Junior Non-Monetary Default.  If Subordinate Lender fails to send aSubordinate Non-Monetary Default Election Notice within 10 Business Days afterdelivery of the Junior Enforcement Notice, then Subordinate Lender shall bedeemed to have elected the option described in clause (ii) of thepreceding sentence.

 

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## (d)           Termination ofCure Periods Upon Bankruptcy.  The cure periods set forth in the foregoingprovisions of this Section 8 shall automatically terminate upon theoccurrence of a Bankruptcy Event.

##  

## (e)           Subordinate Lender’s Rightto Purchase Junior Loan.

##  

### (i)            Upon receipt ofa Junior Enforcement Notice, Subordinate Lender may, within ten (10) BusinessDays after such receipt, send written notice (the “Subordinate PurchaseNotice”) to Junior Lender and Senior Lender that Subordinate Lender intendsto purchase the Junior Loan at the Junior Loan Purchase Price.  If Subordinate Lender fails to send theSubordinate Purchase Notice within such ten (10) Business Day period,Subordinate Lender shall be deemed to have waived its right to purchase theJunior Loan in connection with such Junior Enforcement Notice.

###  

### (ii)           If SubordinateLender elects in writing to purchase the Junior Loan (the “Junior Purchase”),the Junior Purchase shall close on a date selected by Subordinate Lender thatis not later than forty (40) days after the delivery of a copy of theJunior Enforcement Notice to Subordinate Lender (the “Junior PurchaseClosing Date”).  On the JuniorPurchase Closing Date, Subordinate Lender shall pay the Junior Loan PurchasePrice to Junior Lender and concurrently therewith: (A) Junior Lender shalldeliver or cause to be delivered to Subordinate Lender all Junior LoanDocuments held by or on behalf of Junior Lender, and (B) Junior Lendershall execute in favor of Subordinate Lender (or its designee) assignment documentation,in form and substance reasonably acceptable to Subordinate Lender, assigningthe Junior Loan and its rights under the Junior Loan Documents (withoutrecourse, representations or warranties, except for representations as to theoutstanding balance of the Junior Loan and as to Junior Lender’s not havingassigned or encumbered its rights in the Junior Loan).  Upon consummation of the Junior Purchase,Subordinate Lender shall be subrogated to the rights of Junior Lender under theJunior Loan Documents.

###  

## (f)            Failure to CureJunior Default.  IfSubordinate Lender fails to cure the Junior Default that was the subject of theJunior Enforcement Notice or to purchase the Junior Loan prior to SubordinateLender’s Junior Outside Date, then Junior Lender shall have the right, subjectto Section 9(a) hereof, to amend, modify, restructure orextend the Junior Mortgage or any other Junior Loan Documents (includingwithout limitation any and all Special Modification Terms of Junior LoanDocuments) without notice to or the consent of Subordinate Lender but with theconsent of the Senior Lender if required pursuant to Section 10(b) hereof.  In such event, the Subordinate Loan, theSubordinate Mortgage and the other Subordinate Loan Documents and allindebtedness, obligations, liens and security interests evidenced or securedthereby or from time to time outstanding thereunder shall continue to bejunior, subject, and subordinate in all respects to the Junior Loan, the JuniorMortgage and the Junior Loan Documents, as so amended, modified, extended, orrestructured (including without limitation any and all Special ModificationTerms of Junior Loan Documents).  Thirdparties including title insurance companies insuring the priority of the JuniorMortgage are hereby authorized to rely on 

 

26

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## thisprovision as to the priority of the Junior Loan Documents, as so amended,modified, extended or restructured, without any requirement to confirm suchsenior position from Subordinate Lender.

##  

## (g)           During suchtime as the Senior Loan Obligations have been satisfied in whole, the JuniorLender shall be considered the Senior Lender for purposes hereof, and theSubordinate Lender shall be considered the Junior Lender, and the provisions hereofshall continue to apply as though the Junior Loan were the Senior Loan and theSubordinate Loan the Junior Loan.

##  

# 9.             Restrictions on Enforcementby Junior Lender and Subordinate Lender.

#  

## (a)           Junior Lender.  Notwithstanding anything contained herein tothe contrary, so long as any of the Senior Loan Obligations remain outstanding, JuniorLender must obtain the prior written consent of the Senior Lender prior tocommencing any Junior Loan Enforcement Action.

##  

## (b)           SubordinateLender.  Notwithstanding anythingcontained herein to the contrary, so long as any of the Senior Loan Obligationsor Junior Loan Obligations remain outstanding, Subordinate Lender shall not,without the prior written consent of both Senior Lender and Junior Lender,commence any Subordinate Loan Enforcement Action.

##  

# 10.           Modification of LoanDocuments.

#  

## (a)           Except asotherwise provided in Section 7(h), Senior Lender shall not modifyany of the Special Modification Terms of the Senior Loan Documents without theprior written approval of Subordinate Lender and Junior Lender (which approvalshall not be unreasonably withheld, conditioned or delayed).  Subordinate Lender and Junior Lender shallapprove or disapprove any proposed Special Modification Terms of Senior LoanDocuments within ten (10) Business Days after delivery of written noticeof such terms, and such approval shall be deemed denied if Subordinate Lenderand Junior Lender shall fail to approve any proposed Special Modification Termsof Senior Loan Documents within ten (10) Business Days after delivery ofwritten notice of such terms.  SeniorLender shall have the right, without the consent of Junior Lender orSubordinate Lender in each instance, to enter into any amendment, deferral,extension, modification, renewal, replacement, consolidation, supplement orwaiver of the Senior Loan or the Senior Loan Documents which is not a SpecialModification Term of Senior Loan Documents.

##  

## (b)           Junior Lendershall not modify any of the Special Modification Terms of Junior Loan Documentswithout the prior written approval of Subordinate Lender (except as otherwiseprovided in Section 8(f)) and Senior Lender (which approval shallnot be unreasonably withheld, conditioned or delayed).  Subordinate Lender and Senior Lender shallapprove or disapprove any proposed Special Modification Terms of Junior LoanDocuments within ten (10) Business Days after delivery of written noticeof such terms, and such approval shall be deemed denied if Subordinate Lenderand Senior Lender shall 

 

27

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## failto approve any proposed Special Modification Terms of Junior Loan Documentswithin ten (10) Business Days after delivery of written notice of suchterms.  Subject to Section 9(a),Junior Lender shall have the right, without the consent of Senior Lender orSubordinate Lender in each instance, to enter into any amendment, deferral,extension, modification, renewal, replacement, consolidation, supplement orwaiver of the Junior Loan or the Junior Loan Documents which is not a SpecialModification Term of Junior Loan Documents.

##  

## (c)           SubordinateLender shall not modify any of the Special Modification Terms of SubordinateLoan Documents without the prior written approval of Junior Lender and SeniorLender (which approval shall not be unreasonably withheld, conditioned ordelayed).  Junior Lender and SeniorLender shall approve or disapprove any proposed Special Modification Terms ofSubordinate Loan Documents within ten (10) Business Days after delivery ofwritten notice of such terms, and such approval shall be deemed denied ifJunior Lender and Senior Lender shall fail to approve any proposed SpecialModification Terms of Subordinate Loan Documents within ten (10) BusinessDays after delivery of written notice of such terms.  Subject to Section 9(b),Subordinate Lender shall have the right, without the consent of Senior Lenderor Junior Lender in each instance, to enter into any amendment, deferral,extension, modification, renewal, replacement, consolidation, supplement or waiverof the Subordinate Loan or the Subordinate Loan Documents which is not aSpecial Modification Term of Subordinate Loan Documents.

##  

## (d)           Notwithstandingthe foregoing provisions, any amounts funded by the Senior Lender under theSenior Loan Documents, the Junior Lender under the Junior Loan Documents or theSubordinate Lender under the Subordinate Loan Documents as a result of (i) themaking of any Protective Advances or other advances by the Senior Lender,Junior Lender or the Subordinate Lender, or (ii) interest accruals oraccretions and any compounding thereof (including default interest), shall notbe deemed to contravene this Section 10, nor will the act ofentering into a Swap Contract.

##  

# 11.           Freedom of Action.

#  

## (a)           Each ofSubordinate Lender and Junior Lender agrees that Senior Lender may at any timeand from time to time, without the consent of Subordinate Lender or JuniorLender, and without affecting the subordination and other agreements hereinmade by Subordinate Lender or Junior Lender, enter into any amendment,deferral, extension, modification, increase, renewal, replacement,consolidation, supplement or waiver of the Senior Loan or the Senior LoanDocuments or enter into a Swap Contract (subject, however, to the restrictionon Special Modification Terms of Senior Loan Documents set forth herein), andmay also do any one or more of the following in Senior Lender’s sole andabsolute discretion (subject, however, to the restriction on SpecialModification Terms of Senior Loan Documents set forth herein):

##  

### (i)            Extend, renew,modify, amend, diminish or waive any of the terms of any of the Senior LoanDocuments, including, without limitation, those arising out of building costrevisions, change orders or changes to the plans and 

 

28

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### specifications,or any payment provisions under any of the Senior Loan Documents, relating tothe Property or any Improvements, or any payment provisions under any of theSenior Loan Documents, or grant any other indulgence to Borrower or any otherPerson in respect of any or all of the Senior Loan Obligations or any othermatter or enter into a Swap Contract;

###  

### (ii)           Make suchProtective Advances as Senior Lender may deem appropriate (it being understoodthat Senior Lender has not in any way committed to make any such advance);

###  

### (iii)          Add orsubstitute, or take any action or omit to take any action which results in therelease of any endorser, guarantor or any collateral or security;

###  

### (iv)          Apply any sumsreceived from Borrower, any guarantor, endorser, or cosigner, or from thedisposition of any Collateral or security, to any indebtedness whatsoever owingfrom such Person or secured by such Collateral or security, in such manner andorder as Senior Lender determines in its sole discretion, and regardless ofwhether such indebtedness is part of the Senior Loan Obligations, is secured,or is due and payable;

###  

### (v)           Make loans oradvances to Borrower secured in whole or in part by the Collateral or refrainfrom making any such loans or advances;

###  

### (vi)          Accept partialpayments of, compromise or settle, refuse to enforce, or release all or anyparties to, any or all of the Senior Loan Obligations;

###  

### (vii)         Settle, release(with or without receipt of consideration therefor, and whether by operation oflaw or otherwise), compound, compromise, collect or liquidate any of the SeniorLoan Obligations in any manner permitted by applicable law; provided, however,Senior Lender shall not release any of the Collateral or any guarantor of theSenior Loan Obligations prior to Subordinate Lender’s Outside Senior Loan Dateor Junior Lender’s Outside Date; and

###  

### (viii)        Accept, release(with or without receipt of consideration), waive, surrender, enforce,exchange, modify, impair or extend the time for the performance, discharge orpayment of, any and all property of any kind securing any or all of the SeniorLoan Obligations or any guaranty of any or all of the Senior Loan Obligations,or on which Senior Lender at any time may have a lien, or refuse to enforce itsrights or make any compromise or settlement or agreement therefor in respect ofany or all of such property; Senior Lender is not under and shall not hereafterbe under any obligation to marshal any assets in favor of Subordinate Lender,or against or in payment of any or all of the Senior Loan Obligations, and mayproceed against any of the Collateral in such order and manner as it elects;provided, however, Senior Lender shall not release any of the Collateral or anyguarantor of the Senior Loan Obligations prior to Subordinate Lender’s OutsideSenior Loan Date or Junior Lender’s Outside Date.

 

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## (b)           All such actions,rights and matters set forth in Sections 11(a)(i) through 11(a)(viii) aboveshall be senior in all respects to the Junior Loan Obligations and Junior LoanDocuments and Subordinate Loan Obligations and the Subordinate Loan Documents whichshall automatically be subordinate to such actions, rights and matters setforth in (a)(i) through (viii) above. Third parties, including title insurance companies insuring the priorityof the Senior Loan Documents, are hereby authorized to rely upon this provisionas to the priority of such matters without requirement to confirm such seniorposition from Junior Lender or Subordinate Lender.

##  

## (c)           Each ofSubordinate Lender and Senior Lender agrees that Junior Lender may at any timeand from time to time, without the consent of Subordinate Lender or SeniorLender, but subject to Section 9(a) hereof, and withoutaffecting the subordination and other agreements herein made by SubordinateLender, and without affecting the senior priority and other agreements made bythe Senior Lender, enter into any amendment, deferral, extension, modification,renewal, replacement, consolidation, supplement or waiver of the Junior Loan orthe Junior Loan Documents (subject, however, to the restriction on SpecialModification Terms of Junior Loan Documents) and may also do any one or more ofthe following in Junior Lender’s sole and absolute discretion (subject,however, to the restriction on Special Modification Terms of Junior LoanDocuments set forth herein):

##  

### (i)            Extend, renew,modify, amend, diminish or waive any of the terms of any of the Junior LoanDocuments, including, without limitation, those arising out of building costrevisions, change orders or changes to the plans and specifications, or anypayment provisions under any of the Junior Loan Documents, relating to theProperty or any Improvements, or any payment provisions under any of the JuniorLoan Documents, or grant any other indulgence to Borrower or any other Personin respect of any or all of the Junior Loan Obligations or any other matter;

###  

### (ii)           Make suchProtective Advances as Junior Lender may deem appropriate (it being understoodthat Junior Lender has not in any way committed to make any such advance);

###  

### (iii)          Add orsubstitute, or take any action or omit to take any action which results in therelease of any endorser, guarantor or any collateral or security;

###  

### (iv)          Apply any sumsreceived from Borrower, any guarantor, endorser, or cosigner, or from thedisposition of any Collateral or security, to any indebtedness whatsoever owingfrom such Person or secured by such Collateral or security, in such manner andorder as Junior Lender determines in its sole discretion, and regardless ofwhether such indebtedness is part of the Junior Loan Obligations, is secured,or is due and payable;

###  

### (v)           Make loans oradvances to Borrower secured in whole or in part by the Collateral or refrainfrom making any such loans or advances;

 

30

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### (vi)          Accept partialpayments of, compromise or settle, refuse to enforce, or release all or anyparties to, any or all of the Junior Loan Obligations;

###  

### (vii)         Settle, release(with or without receipt of consideration therefor, and whether by operation oflaw or otherwise), compound, compromise, collect or liquidate any of the JuniorLoan Obligations in any manner permitted by applicable law; provided, however,Junior Lender shall not release any of the Collateral or any guarantor of theJunior Loan Obligations prior to Subordinate Lender’s Outside Junior Loan Date;and

###  

### (viii)        Accept, release(with or without receipt of consideration), waive, surrender, enforce,exchange, modify, impair or extend the time for the performance, discharge orpayment of, any and all property of any kind securing any or all of the JuniorLoan Obligations or any guaranty of any or all of the Junior Loan Obligations,or on which Junior Lender at any time may have a lien, or refuse to enforce itsrights or make any compromise or settlement or agreement therefor in respect ofany or all of such property; Junior Lender is not under and shall not hereafterbe under any obligation to marshal any assets in favor of Subordinate Lender,or against or in payment of any or all of the Junior Loan Obligations, and mayproceed against any of the Collateral in such order and manner as it elects;provided, however, Junior Lender shall not release any of the Collateral or anyguarantor of the Junior Loan Obligations prior to Subordinate Lender’s OutsideJunior Loan Date.

###  

## (d)           All such actions,rights and matters set forth in Sections 11(c)(i) through 11(c)(viii) aboveshall be (x) senior in all respects to the Subordinate Loan Obligationsand the Subordinate Loan Documents which shall automatically be subordinate tosuch actions, rights and matters set forth in (c)(i) through (c)(viii) aboveand (y) subordinate in all respects to the Senior Loan Obligations andSenior Loan Documents.  Third parties,including title insurance companies insuring the priority of the Junior LoanDocuments, are hereby authorized to rely upon this provision as to the priorityof such matters without requirement to confirm such senior position fromSubordinate Lender.

##  

# 12.           Dealings with Borrower.

#  

## (a)           In makingdisbursements under any of the Senior Loan Documents, Senior Lender has no dutyto, nor has Senior Lender represented that it will, see to the application ofany proceeds by the Person or Persons to whom Senior Lender disburses suchproceeds.  Any application or use of suchproceeds for purposes other than those provided for in the Senior LoanDocuments does not and shall not defeat the subordination herein made, in wholeor in part.

##  

## (b)           In makingdisbursements under any of the Senior Loan Documents, Senior Lender may waiveany and all conditions to a disbursement contained in the Senior LoanDocuments.  No such waiver shall defeatthe subordination herein made, in whole or in part.

 

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## (c)           The rightsgranted to Senior Lender hereunder are solely for its protection and nothingherein contained shall impose on Senior Lender any duties with respect toBorrower, Junior Lender or Subordinate Lender.

##  

## (d)           In makingdisbursements under any of the Junior Loan Documents, Junior Lender has no dutyto, nor has Junior Lender represented that it will, see to the application ofany proceeds by the Person or Persons to whom Junior Lender disburses suchproceeds.  Any application or use of suchproceeds for purposes other than those provided for in the Junior LoanDocuments does not and shall not defeat the subordination herein made, in wholeor in part.

##  

## (e)           In makingdisbursements under any of the Junior Loan Documents, Junior Lender may waiveany and all conditions to a disbursement contained in the Junior LoanDocuments.  No such waiver shall defeatthe subordination herein made, in whole or in part.

##  

## (f)            The rightsgranted to Junior Lender hereunder are solely for its protection, and nothingherein contained shall impose on Junior Lender any duties with respect toBorrower or Subordinate Lender.

##  

## (g)           Notwithstandinganything to the contrary contained herein, any consent or approval rights ofLenders under the Delegated Consent Documents (as defined in Exhibit E)shall be subject to the provisions of Exhibit E attached hereto andmade a part hereof.  Each of SeniorLender, Junior Lender and Subordinate Lender hereby acknowledge and agree thateach of the Borrower and the other parties to such Delegated Consent Documentsis expressly made a third party beneficiary of the provisions of Exhibit Esolely for the purposes of enforcing the provisions of Exhibit Eand that Borrower and the other parties to such Delegated Consent Documentsshall be entitled to rely on the provisions of Exhibit E inconnection with satisfying their respective obligation(s) to obtain anyconsent and/or approval of any Lender under any of the Delegated ConsentDocuments.  No modification, amendment,termination or waiver of the provisions of Exhibit E shall bebinding upon Borrower or such other parties to such Delegated Consent Documentsexcept as expressly set forth in a writing signed by each such Person.

##  

# 13.           Restrictions on Transfer ofSubordinate Loan.

#  

## (a)           With respect tothe initial Subordinate Lender or any successor or assign of the initial SubordinateLender that is an Affiliate of Subordinate Lender (each, an “AffiliatedSubordinate Lender”), such Affiliated Subordinate Lender agrees that it shallnot sell, assign, pledge, encumber or otherwise transfer (each, a “Transfer”)any portion of its interest in the Subordinate Loan Documents without the priorwritten consent of Junior Lender, which consent shall not be unreasonablywithheld, conditioned or delayed.  IfSubordinate Lender desires to Transfer the Subordinate Loan, Subordinate Lendershall send notice to Junior Lender describing the identity of the proposedtransferee and requesting Junior Lender’s approval thereof (a copy of suchnotice shall be simultaneously provided to the Senior Lender).  Within ten (10) Business Days after 

 

32

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## deliveryof such notice, Junior Lender shall respond to Subordinate Lender with a noticeeither approving or disapproving the contemplated Transfer (a copy of suchnotice shall be simultaneously provided to the Senior Lender).  If Junior Lender fails to respond to a noticesent by Subordinate Lender requesting Junior Lender’s approval of a Transferwithin ten (10) Business Days after delivery, the Junior Lender shall bedeemed to have approved such Transfer. Any Transfer made in violation of this Section 13(a) shallbe deemed void.

##  

## (b)           After theconsummation of a Transfer of the Subordinate Loan to a party other than anAffiliated Subordinate Lender (a “Non-Affiliated Subordinate Lender”), suchNon-Affiliated Subordinate Lender agrees that it shall not Transfer any portionof its interest in the Subordinate Loan Documents without the prior writtenconsent of Junior Lender, which consent may be withheld only if the proposedtransferee of the Non-Affiliated Subordinate Lender’s interest in theSubordinate Loan Documents is a Person with which the Junior Lender haspreviously been in a dispute that was the subject of a court or arbitrationproceeding within the then preceding six years. If a Non-Affiliated Subordinate Lender desires to Transfer theSubordinate Loan, such Non-Affiliated Subordinate Lender shall send notice toJunior Lender describing the identity of the proposed transferee and requestingJunior Lender’s approval thereof (a copy of such notice shall be simultaneouslyprovided to the Senior Lender).  Withinten (10) Business Days after delivery of such notice, Junior Lender shallrespond to Subordinate Lender with a notice either approving or disapprovingthe contemplated Transfer (a copy of such notice shall be simultaneouslyprovided to the Senior Lender).  IfJunior Lender disapproves the proposed Transfer, Junior Lender shall include inits notice the reasons for such disapproval. If Junior Lender disapproves the proposed Transfer for any reason otherthan that the proposed transferee is a Person with which the Junior Lender haspreviously been in a dispute that was the subject of a court or arbitrationproceeding within the then preceding six years, then Junior Lender shall,within thirty (30) days after providing such notice (the “SubordinatePurchase Closing Date”), purchase the Subordinate Loan (the “SubordinatePurchase”) at the Subordinate Loan Purchase Price as provided in Section 13(c) below.

##  

## (c)           If the JuniorLender purchases the Subordinate Loan pursuant to the preceding Section 13(b),then, concurrently with payment to Non-Affiliated Subordinate Lender of theSubordinate Loan Purchase Price: (A) Non-Affiliated Subordinate Lendershall deliver or cause to be delivered to Junior Lender all Subordinate LoanDocuments held by or on behalf of Non-Affiliated Subordinate Lender, and (B) Non-AffiliatedSubordinate Lender shall execute in favor of Junior Lender (or its designee)assignment documentation, in form and substance reasonably acceptable to JuniorLender, assigning the Subordinate Loan and its rights under the SubordinateLoan Documents (without recourse, representations or warranties, except forrepresentations as to the outstanding balance of the Subordinate Loan and as toNon-Affiliated Subordinate Lender’s not having assigned or encumbered itsrights in the Subordinate Loan).  Uponconsummation of the Subordinate Purchase, Junior Lender shall be subrogated tothe rights of Non-Affiliated Subordinate Lender under the Subordinate LoanDocuments.

 

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

 

# 14.           Assignment of the JuniorLoan Obligations.  JuniorLender may assign or transfer any or all of the Junior Loan Obligations and/orany interest therein or herein and, notwithstanding any such assignment ortransfer or any subsequent assignment or transfer thereof, such Junior LoanObligations shall be and remain senior to the Subordinate Loan Obligations, andthe Subordinate Loan Obligations shall be and remain subject and subordinate tothe Junior Loan for the purposes of this Agreement, and every immediate andsuccessive assignee or transferee of any of the Junior Loan Obligations or ofany interest therein or herein shall, to the extent of the interest of suchassignee or transferee in the Junior Loan Obligations, be entitled to thebenefits of this Agreement to the same extent as if such assignee or transfereewere Junior Lender; provided, however, that, unless Junior Lender shallotherwise consent in writing, Junior Lender shall have an unimpaired right,prior and superior to that of any such assignee or transferee, to enforce thisAgreement, for the benefit of Junior Lender, as to those portions of the JuniorLoan Obligations which Junior Lender has not assigned or transferred.

#  

# 15.           Assignment of the SeniorLoan Obligations.  SeniorLender may assign or transfer any or all of the Senior Loan Obligations and/orany interest therein or herein and, notwithstanding any such assignment ortransfer or any subsequent assignment or transfer thereof, such Senior LoanObligations shall be and remain senior to the Junior Loan Obligations andSubordinate Loan Obligations, and the Subordinate Loan Obligations shall be andremain subject and subordinate to the Junior Loan Obligations and Senior LoanObligations for the purposes of this Agreement, and every immediate andsuccessive assignee or transferee of any of the Senior Loan Obligations or ofany interest therein or herein shall, to the extent of the interest of suchassignee or transferee in the Senior Loan Obligations, be entitled to thebenefits of this Agreement to the same extent as if such assignee or transfereewere Senior Lender; provided, however, that, unless Senior Lender shallotherwise consent in writing, Senior Lender shall have an unimpaired right,prior and superior to that of any such assignee or transferee, to enforce thisAgreement, for the benefit of Senior Lender, as to those portions of the SeniorLoan Obligations which Senior Lender has not assigned or transferred.

#  

# 16.           Intent to Sell.  If Senior Lender intends to solicitpurchasers to purchase all of its interest in the Senior Loan in whole and suchpurchasers are a Person other than the Junior Lender, the Subordinate Lender orthe Borrower or any Affiliate thereof, Senior Lender shall give Junior Lenderprompt written notice of its intent to sell and shall use reasonable bestefforts, if there is a bidding process for the purchase of such Senior Loan, toinclude the Junior Lender in such bidding process.

#  

# 17.           Acquisition ofSenior Loan by Borrower or Subordinate Lender Prohibited.  Notwithstanding anything contained herein tothe contrary, other than a sale pursuant to Section 7, SeniorLender shall not sell the Senior Loan to Borrower, Subordinate Lender, or any 

 

34

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# Affiliate of Borrower or Subordinate Lender,unless either (a) concurrently therewith, the Junior Loan is sold to thesame party on terms acceptable to the Junior Lender in its sole discretion, or (b) theprior written consent of Junior Lender has been obtained (which consent may begiven or withheld in the sole discretion of Junior Lender).  Subordinate Lender shall not purchase, orallow any Affiliate of Subordinate Lender to purchase, other than a salepursuant to Section 7,the Senior Loan, unless (i) concurrentlytherewith, the Junior Loan is sold to the same party on terms acceptable to theJunior Lender in its sole discretion, or (ii) the prior written consent ofJunior Lender is obtained (which consent may be given or withheld in the solediscretion of Junior Lender).

#  

# 18.           Casualty.  Subject to the terms of the Lock BoxAgreement, in the event of a casualty to the buildings or improvements constructedon any portion of the Property or a condemnation or taking under a power ofeminent domain of all or any portion of the Property, Senior Lender shall havea first and prior interest in and to any payments, awards, proceeds,distributions, or consideration arising from any such event (the “Award”).  If the amount of the Award is in excess ofall amounts owed to Senior Lender under the Senior Loan Documents (the amountof such excess is referred to herein as the “Excess”), however, andeither the Senior Loan has been paid in full or Borrower is entitled to aremittance of same under the Senior Loan Documents other than to restore theProperty, the Excess or portion to be so remitted to Borrower shall, to theextent permitted in the Senior Loan Documents, be paid to or at the directionof Junior Lender, and if the Junior Lender has been paid all amounts due, to orat the direction of the Subordinate Lender unless other Persons have claimedthe right to such Excess, in which case Senior Lender (or Junior Lender ifthere is no Senior Lender) shall only be required to provide notice to JuniorLender and Subordinate Lender of the Excess and of any other claimsthereto.  In the event of any competingclaims for any Excess, Senior Lender (or Junior Lender if there is no SeniorLender) shall continue to hold the Excess until Senior Lender (or Junior Lenderif there is no Senior Lender) receives an agreement signed by all Personsmaking a claim to the Excess or a final order of a court of competentjurisdiction directing Senior Lender (or Junior Lender if there is no SeniorLender) as to how and to which Person(s) the Excess is to bedistributed.  Notwithstanding theforegoing, but subject to the terms of the Lock Box Agreement, in the event ofa casualty or condemnation, Senior Lender (or Junior Lender if there is noSenior Lender) shall release the Award to the Borrower if and to the extentrequired by the terms and conditions of the Senior Loan Documents (or JuniorLoan Documents if there is no Senior Lender) and the Lock Box Agreement torepair and restore the Premises in accordance with the terms and provisions ofthe Senior Loan Documents (or Junior Loan Documents if there is no SeniorLender).  Any portion of the Award made availableto the Borrower for the repair or restoration of the Premises shall not besubject to attachment by Junior Lender and Subordinate Lender.

#  

# 19.           Bankruptcy.

#  

## (a)           Upon anydistribution of the assets or properties of Borrower or upon any dissolution,winding up, liquidation, bankruptcy or reorganization involving Borrower(whether in bankruptcy, insolvency or receivership proceedings or any otherProceeding, or upon an assignment for the benefit of creditors or otherwise):

 

35

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### (i)            Senior Lendershall first be entitled to receive payment in full of the principal of andinterest on the Senior Loan Obligations and all fees and any other payments(including post-petition interest and all costs and expenses) due pursuant tothe terms of the Senior Loan Documents, before Junior Lender is entitled toreceive any payment on account of the Junior Loan Obligations; and JuniorLender shall then be entitled to receive payment in full of the principal ofand interest on the Junior Loan Obligations and all fees and any other payments(including post-petition interest and all costs and expenses) due pursuant tothe terms of the Junior Loan Documents, before Subordinate Lender is entitledto receive any payment on account of the Subordinate Loan Obligations.  The Junior Lender acknowledges and agreesthat its distributions in bankruptcy may be diminished in order to pay theSenior Loan Obligations and all fees and any other payments (includingpost-petition interest and all costs and expenses) to the extent the SeniorLender receives payment on its secured claim in bankruptcy exceeding the valueof collateral encumbered by the Senior Lender’s lien; the Subordinate Lenderacknowledges and agrees that its distributions in bankruptcy may be diminishedin order to pay the Senior Loan Obligations and/or the Junior Loan Obligationsand all fees and any other payments (including post-petition interest and allcosts and expenses) to the extent the Senior Lender and/or the Junior Lenderreceive payment on their secured claims in bankruptcy exceeding the value ofcollateral encumbered by their liens.

###  

### (ii)           Any payment ordistribution of the assets or properties of Borrower of any kind or character,whether in cash, property, or securities, to which Subordinate Lender would beentitled except for the provisions of this Agreement, shall be paid by thedebtor in possession, liquidating trustee or agent or other person making suchpayment or distribution directly to first, Senior Lender and second, JuniorLender; and any payment or distribution of the assets or properties of Borrowerof any kind or character, whether in cash, property, or securities, to whichJunior Lender would be entitled except for the provisions of this Agreement,shall be paid by the debtor in possession, liquidating trustee or agent orother person making such payment or distribution directly to Senior Lender; and

###  

### (iii)          In the eventthat, notwithstanding the foregoing, any payment or distribution of the assetsor properties of Borrower of any kind or character, whether in cash, property,or securities, shall be received by Subordinate Lender on account of principal,interest, fees, or other amounts on or with respect to the Subordinate LoanObligations before all of the Senior Loan Obligations and Junior LoanObligations are paid in full, such payments or distribution shall be receivedand held in trust for and shall be paid over first, to Senior Lender forthwith,for application to the payment of the Senior Loan Obligations until all suchSenior Loan Obligations shall have been paid in full in accordance with theterms of the Senior Loan Documents and second to Junior Lender forthwith, forapplication to the payment of the Junior Loan Obligations until all such JuniorLoan Obligations shall have been paid in full in accordance with the terms ofthe Junior Loan Documents.

 

36

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## (b)           To effectuatethe foregoing, Subordinate Lender does hereby irrevocably assign to first,Senior Lender and second, Junior Lender all of Subordinate Lender’s rights as asecured or unsecured creditor in any Proceeding and first (i) authorizesSenior Lender to take, or refrain from taking, any action to assert, enforce,modify, waive, release or extend Subordinate Lender’s lien and/or claim in suchProceeding, including but not limited to (A) filing a proof of claimarising out of the Subordinate Loan Obligations, (B) voting or refrainingfrom voting claims arising from the Subordinate Loan Obligations, either inSenior Lender’s name or in the name of Senior Lender as attorney-in-fact ofSubordinate Lender, (C) accepting or rejecting any payment or distributionmade with respect to any claim arising from the Subordinate Loan Obligationsand applying such payment and distribution to payment of Senior Lender’s claimuntil the Senior Loan Obligations are paid and satisfied in full in accordancewith their terms, and (D) taking any and all actions and executing any andall instruments necessary to effectuate the foregoing and, among other things,to establish Senior Lender’s entitlement to assert Subordinate Lender’s claimin such Proceeding, provided that notwithstanding the foregoing provisions,with respect to any plan of reorganization proposed in a Proceeding in respectof which creditors are voting, Senior Lender may vote on behalf of SubordinateLender only if the proposed plan would result in Senior Lending being“impaired” (as such term is defined in the Bankruptcy Code); and second, (ii) ifSenior Lender has been paid in full all amounts payable under the Senior LoanDocuments, authorizes Junior Lender to take, or refrain from taking, any actionto assert, enforce, modify, waive, release or extend Subordinate Lender’s lienand/or claim in such Proceeding, including but not limited to (A) filing aproof of claim arising out of the Subordinate Loan Obligations, (B) votingor refraining from voting claims arising from the Subordinate Loan Obligations,either in Junior Lender’s name or in the name of Junior Lender asattorney-in-fact of Subordinate Lender, (C) accepting or rejecting anypayment or distribution made with respect to any claim arising from theSubordinate Loan Obligations and applying such payment and distribution topayment of Junior Lender’s claim until the Junior Loan Obligations are paid andsatisfied in full in accordance with their terms, and (D) taking any andall actions and executing any and all instruments necessary to effectuate theforegoing and, among other things, to establish Junior Lender’s entitlement toassert Subordinate Lender’s claim in such Proceeding, provided thatnotwithstanding the foregoing provisions, with respect to any plan ofreorganization proposed in a Proceeding in respect of which creditors arevoting, Junior Lender (if there is no Senior Lender) may vote on behalf ofSubordinate Lender only if the proposed plan would result in Junior Lenderbeing “impaired” (as such term is defined in the Bankruptcy Code).

##  

# 20.           Additional Waivers andAgreements.

#  

## (a)           SubordinateLender waives the right to require Senior Lender to proceed against Borrower orany other Person liable on any Senior Loan Obligation or Junior Lender or toproceed against or exhaust any security held from Borrower or other Person, orto pursue any other remedy in Senior Lender’s power whatsoever, and SubordinateLender waives the right to have the property of Borrower applied to thedischarge of, first, any Senior Loan Obligation and, second, any Junior LoanObligation.  Junior Lender waives theright to require Senior Lender to proceed against Borrower or any 

 

37

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## otherPerson liable on any Senior Loan Obligation, to proceed against or exhaust anysecurity held from Borrower or other Person, or to pursue any other remedy inSenior Lender’s power whatsoever, and Junior Lender waives the right to havethe property of Borrower first applied to the discharge of any Senior LoanObligation.  Subject to the terms of thisAgreement, the Lock Box Agreement and the Senior Loan Documents, Senior Lendermay, at its election, exercise any right or remedy Senior Lender may haveagainst Borrower or any security held by Senior Lender, including, withoutlimitation, the right to foreclose upon any such security by one or morejudicial or nonjudicial sales, whether or not every aspect of any such sale iscommercially reasonable, without affecting or impairing in any way theobligations of Subordinate Lender hereunder, except to the extent, first, theSenior Loan Obligations and, second, Junior Loan Obligations have been paid,and Subordinate Lender waives any defense arising out of the absence,impairment or loss of any right of reimbursement, contribution or subrogationor any other right or remedy against Borrower or any such security, whetherresulting from such election by Senior Lender or otherwise except to the extentexpressly set forth in this Agreement.

##  

## (b)           SubordinateLender assumes all responsibility for keeping itself informed as to thecondition (financial or otherwise), business, assets and operations ofBorrower, the condition of any Collateral and all other circumstances thatmight in any way affect Subordinate Lender’s risk under this Agreement(including, without limitation, the risk of nonpayment of the Senior LoanObligations or Junior Loan Obligations), and Senior Lender and Junior Lendershall have no duty or obligation whatsoever to obtain or disclose toSubordinate Lender any information or documents relative to such condition,business, assets, or operations of Borrower or such risk, whether acquired bySenior Lender or Junior Lender in the course of its relationship with Borroweror otherwise.

##  

## (c)           Junior Lenderassumes all responsibility for keeping itself informed as to the condition(financial or otherwise), business, assets and operations of Borrower, thecondition of any Collateral and all other circumstances that might in any wayaffect Junior Lender’s risk under this Agreement (including, withoutlimitation, the risk of nonpayment of the Senior Loan Obligations), and SeniorLender shall have no duty or obligation whatsoever to obtain or disclose toJunior Lender any information or documents relative to such condition,business, assets, or operations of Borrower or such risk, whether acquired bySenior Lender in the course of its relationship with Borrower or otherwise.

##  

## (d)           SubordinateLender shall have no duty or obligation whatsoever to obtain or disclose toJunior Lender or Senior Lender any information or documents relative to thecondition, business, assets, or operations of Borrower, whether acquired bySubordinate Lender in the course of its relationship with Borrower orotherwise.

##  

## (e)           The SubordinateNote shall bear a legend indicating that payment of the Subordinate LoanObligations is subject to the terms of this Agreement.

##  

## (f)            The Junior Noteshall bear a legend indicating that payment of the Junior Loan Obligations issubject to the terms of this Agreement.

 

38

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## (g)           SubordinateLender acknowledges that each of the Senior Lender and Junior Lender has madeno warranties or representations to it with respect to the due execution,legality, validity, completeness or enforceability of the Senior Loan Documentsor Junior Loan Documents or the collectability of the Senior Loan Obligations orJunior Loan Obligations evidenced thereby.

##  

## (h)           Junior Lenderacknowledges that Senior Lender has made no warranties or representations to itwith respect to the due execution, legality, validity, completeness orenforceability of the Senior Loan Documents or the collectability of the SeniorLoan Obligations evidenced thereby.

##  

## (i)            If any of theSenior Loan Obligations or Junior Loan Obligations or any lien securing sameshould be invalidated, avoided or set aside, the subordination provided forherein nevertheless shall continue in full force and effect and, with respectto the Senior Loan Obligations, as among Senior Lender, Junior Lender andSubordinate Lender, or with respect to the Junior Loan Obligations, as betweenthe Junior Lender and the Subordinate Lender, or with respect to the JuniorLoan Obligations, as between the Junior Lender and the Subordinate Lender,shall be and be deemed to remain in full force and effect.

##  

## (j)            SubordinateLender hereby expressly, unconditionally and irrevocably waives all rights (i) underSections 361 through 365, 502(e) and 509 of the Bankruptcy Code (orany similar sections hereafter in effect under any other Federal or state lawsor legal or equitable principles relating to bankruptcy, insolvency,reorganizations, liquidations or otherwise for the relief of debtors orprotection of creditors), and (ii) to seek or obtain conversion to adifferent type of proceeding or to seek or obtain dismissal of a proceeding, ineach case in relation to a bankruptcy, reorganization, insolvency or otherproceeding under similar laws with respect to Borrower.  Without limiting the generality of theforegoing, Subordinate Lender hereby expressly, unconditionally and irrevocablywaives (A) the right to seek to provide credit (secured or otherwise) toBorrower in any way under Section 364 of the Bankruptcy Code unless thesame is subordinated in right and time of payment in all aspects to (i) theSenior Loan Obligations in a manner acceptable to Senior Lender in its sole andabsolute discretion and (ii) the Junior Loan Obligations in a manneracceptable to the Junior Lender in its sole discretion, if applicable; (B) theright to take a position inconsistent with or contrary to that of Senior Lender(including a position by Senior Lender to take no action) or Junior Lender(including a position by the Junior Lender to take no action) if Borrower seeksto use, sell or lease Collateral (or the proceeds or products thereof) under Section 363of the Bankruptcy Code; (C) the right to receive any Collateral security(including any “super priority” or equal or “priming” or replacement lien) forany Subordinate Loan Obligation unless Senior Lender and Junior Lender havereceived senior positions acceptable to Senior Lender and Junior Lender in theirabsolute discretion to secure, first, all Senior Loan Obligations (in the sameCollateral to the extent Collateral is involved) or, second, all Junior LoanObligations (in the same Collateral to the extent Collateral is involved); and (D) theright to seek adequate protection in respect of Collateral (or the proceeds orproducts thereof) under Section 363 or 361 of the Bankruptcy Code.

 

39

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## (k)           Junior Lenderhereby expressly, unconditionally and irrevocably waives all rights (i) underSections 361 through 365, 502(e) and 509 of the Bankruptcy Code (orany similar sections hereafter in effect under any other Federal or state lawsor legal or equitable principles relating to bankruptcy, insolvency,reorganizations, liquidations or otherwise for the relief of debtors orprotection of creditors), and (ii) to seek or obtain conversion to adifferent type of proceeding or to seek or obtain dismissal of a proceeding, ineach case in relation to a bankruptcy, reorganization, insolvency or otherproceeding under similar laws with respect to Borrower.  Without limiting the generality of theforegoing, Junior Lender hereby expressly, unconditionally and irrevocablywaives (A) the right to seek to provide credit (secured or otherwise) toBorrower in any way under Section 364 of the Bankruptcy Code unless thesame is subordinated in right and time of payment in all aspects to the SeniorLoan Obligations in a manner acceptable to Senior Lender in its sole andabsolute discretion; (B) the right to take a position inconsistent with orcontrary to that of Senior Lender (including a position by Senior Lender totake no action) if Borrower seeks to use, sell or lease Collateral (or theproceeds or products thereof) under Section 363 of the Bankruptcy Code; (C) theright to receive any Collateral security (including any “super priority” orequal or “priming” or replacement lien) for any Junior Loan Obligation unlessSenior Lender has received a senior position acceptable to Senior Lender in itssole and absolute discretion to secure all Senior Loan Obligations (in the sameCollateral to the extent Collateral is involved); and (D) the right toseek adequate protection in respect of Collateral (or the proceeds or productsthereof) under Section 363 or 361 of the Bankruptcy Code.

##  

# 21.           Continuing Benefits.  No right of Senior Lender or any present orfuture holder of the Senior Loan Obligations, or Junior Lender or any presentor future holder of the Junior Loan Obligations, to enforce the subordinationas provided herein shall at any time in any way be prejudiced or impaired byany act or failure to act on the part of Borrower or any other party, whetherborrower, guarantor or otherwise, or by any noncompliance by Borrower or anyborrower, guarantor or otherwise with the terms of the Senior Note or JuniorNote, as applicable, or any other of the Senior Loan Documents or any other ofthe Junior Loan Documents, as applicable, regardless of any knowledge thereofwhich such holder may have or be otherwise charged with.

#  

# 22.           No Waiver; Modification.  Except as otherwise expressly provided inthis Agreement, neither this Agreement nor the transactions herein contemplatedshall operate to waive the enforcement after the date hereof of any due onsale, due on encumbrance or accelerating transfer provision contained in theSenior Loan Documents, Junior Loan Documents or the Subordinate Loan Documents.  No delay on the part of Senior Lender, JuniorLender or Subordinate Lender in the exercise of any right or remedy shalloperate as a waiver thereof, and no single or partial exercise by SeniorLender, Junior Lender or Subordinate Lender of any right or remedy shallpreclude other or further exercise thereof or the exercise of any right orremedy; nor shall any modification or waiver of any of the provisions of thisAgreement be binding upon Senior Lender, Junior Lender or Subordinate Lenderexcept as expressly set forth in a writing duly signed and delivered by or onbehalf of Senior Lender, Junior Lender or Subordinate Lender.  This Agreement may be executed in any numberof counterparts.

 

40

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# 23.           Reinstatement of Agreement.  The provisions of this Agreement shallcontinue to be effective or be reinstated, as the case may be, if at any timeany payment of any of the Senior Loan Obligations, Junior Loan Obligations orthe Subordinate Loan Obligations is invalidated, declared to be fraudulent orpreferential, set aside, rescinded or must otherwise be returned by SeniorLender, Junior Lender or Subordinate Lender, as the case may be, under anybankruptcy law, state or federal law, common law or equitable cause, all asthough such payment had not been made.

#  

# 24.           Borrower’s Waiver.  The Borrower hereby waives (a) notice ofacceptance of this Agreement by Senior Lender, Junior Lender and SubordinateLender, (b) notice of the existence or creation or nonpayment of all orany of the Senior Loan Obligations, Junior Loan Obligations and the SubordinateLoan Obligations, and (c) all diligence in the collection or protection ofor realization upon the Senior Loan Obligations or the collateral therefor, theJunior Loan Obligations or the collateral therefor or the Subordinate LoanObligations or the collateral therefor.

#  

# 25.           Legend.

#  

## (a)           SubordinateLender agrees to (i) execute a Memorandum of Intercreditor Agreement inrespect of this Agreement and (ii) cause appropriate entries in the booksand records of Subordinate Lender to indicate that the Subordinate LoanObligations are subject to, first, the Senior Loan Obligations and, second,Junior Loan Obligations.

##  

## (b)           Junior Lenderagrees to (i) execute a Memorandum of Intercreditor Agreement in respectof this Agreement and (ii) cause appropriate entries in the books andrecords of Junior Lender to indicate that the Junior Loan Obligations aresubject to the Senior Loan Obligations.

##  

# 26.           Notices.  Any notice which a party is required or maydesire to give the other shall be in writing and may be sent by facsimile,personal delivery or by mail (either (i) by United States registered orcertified mail, return receipt requested, postage prepaid, or (ii) byFederal Express or similar generally recognized overnight carrier regularlyproviding proof of delivery), addressed as follows (subject to the right of aparty to designate a different address for itself by notice similarly given atleast fifteen (15) days in advance):

#  

|   | If to Subordinate Lender:     |
|--------|-------------------------------|
|   |                          |
|   | Lend Lease (US) Capital  Inc. |
|   | 700 Lanidex Plaza             |
|   | Parsippany, NJ 07054          |
|   | Attention: President          |
|   | Telecopy: (973) 503-5730      |

 

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|   | With copies to:                       |
|--------|---------------------------------------|
|   |                                  |
|   | Lend Lease (US) Capital  Inc.         |
|   | Three Coliseum Centre                 |
|   | 2550 West Tyvola Road                 |
|   | Suite 600                        |
|   | Charlotte, North Carolina  28217      |
|   | Attention: Treasurer                  |
|   | Telecopy:  (704) 357-2854        |
|   |                                  |
|   | and to:                               |
|   |                                  |
|   | Lend Lease (US) Capital  Inc.         |
|   | 700 Lanidex Plaza                     |
|   | Parsippany, New Jersey  07054         |
|   | Attention: Secretary                  |
|   | Telecopy: (973) 503-5730              |
|   |                                  |
|   | and to:                               |
|   |                                  |
|   | Perkins Coie LLP                      |
|   | 1201 Third Avenue,  Suite 4800   |
|   | Seattle, WA 98101                     |
|   | Attention:                            | Arthur Kolios |
|   |                                  | and James Cowan |
|   | Telecopy:                             | (206) 359-9222 and |
|   |                                  | (503) 346-2065 |
|   |                                  |
|   | If to Junior Lender:                  |
|   |                                  |
|   | Behringer Harvard  PAL I, LLC    |
|   | 15601 Dallas Parkway,  Suite 600 |
|   | Dallas, TX 75001                      |
|   | Attention: Andrew Bruce               |
|   | Telecopy: (214) 655-1610              |
|   |                                  |
|   | With copies to:                       |
|   |                                  |
|   | Behringer Harvard  PAL I, LLC    |
|   | 15601 Dallas Parkway,  Suite 600 |
|   | Dallas, TX 75001                      |
|   | Attention: Chief Legal  Officer       |
|   | Telecopy: (214) 655-1610              |

 

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|                 | and                                     |
|----------------------|-----------------------------------------|
|                 |                                    |
|                 | Powell Coleman &  Arnold, LLP  |
|                 | 8080 North Central  Expressway          |
|                 | Suite 1380                         |
|                 | Dallas, TX 75206                        |
|                 | Attention: Patrick M.  Arnold           |
|                 | Telecopy: (214) 373-8768                |
|                 |                                    |
| If to Senior Lender: |
|                 |                                    |
|                 | Bank of America, N.A.                   |
|                 | 901 Main Street, 20th Floor        |
|                 | Dallas, TX 75202                        |
|                 | Attention:  Mr. Jamison L. Fox     |
|                 | Telecopy:  (214) 209-2090               |
|                 |                                    |
|                 | If to Borrower:                         |
|                 |                                    |
|                 | Rest Easy LLC                           |
|                 | c/o Actus Lend Lease LLC                |
|                 | 1801 West End Avenue                    |
|                 | Suite 1700                         |
|                 | Nashville, TN 37203                     |
|                 | Attention: President                    |
|                 | Telecopy: (615) 963-2686                |
|                 |                                    |
|                 | With copies to:                         |
|                 |                                    |
|                 | Rest Easy LLC                           |
|                 | c/o Actus Lend Lease LLC                |
|                 | 700 Lanidex Plaza                       |
|                 | Parsippany, NJ 07054                    |
|                 | Attention: General Counsel              |
|                 | Telecopy: (973) 503-5730                |
|                 |                                    |
|                 | Lowenstein  Sandler PC                  |
|                 | 65  Livingston Avenue                   |
|                 | Roseland,  NJ 07068                     |
|                 | Attention:  Edward J. Hunter, Esq. |
|                 | Telecopy:  (973) 597-2590               |

 

# 27.           Priority.  The priorities herein specified areapplicable irrespective of the time of creation of the Senior Loan Obligations,Junior Loan Obligations or the Subordinate Loan Obligations.

 

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# 28.           Further Assurances.  So long as the Senior Loan Obligations,Junior Loan Obligations and the Subordinate Loan Obligations remainoutstanding, either party shall execute, acknowledge, and deliver upon thedemand of the other party, at any time or times, any and all further documentsor instruments in recordable form for the purpose of further confirming thesubordination and the agreements herein set forth.

#  

# 29.           Estoppel Certificate.  Each of Senior Lender, Junior Lender andSubordinate Lender hereby agrees that within ten (10) days after writtendemand of the other party, it shall execute, acknowledge and deliver acertification setting forth the total amount of indebtedness owed to it underthe Senior Loan Documents, Junior Loan Documents or the Subordinate LoanDocuments, as the case may be, and such other certifications as may bereasonably requested by the other party. Notwithstanding the foregoing, none of Senior Lender, Junior Lender orSubordinate Lender shall be obligated to give such certification morefrequently than once every other calendar month.

#  

# 30.           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY ANDCONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OFNEW YORK (WITHOUT REGARD TO THE CONFLICT-OF-LAWS PRINCIPLES THEREOF).  IT IS THE INTENT AND PURPOSE OF THE PARTIESHERETO THAT THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONSLAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS AGREEMENT.  Notwithstanding anything to the contraryprovided in the foregoing, it is acknowledged and agreed that as to matterswhich relate to the creation, perfection and enforcement of security interestscreated under the Senior Loan Documents, Junior Loan Documents and SubordinateLoan Documents, the same shall be construed in accordance with the laws of theState in which the applicable Collateral shall be located or, as to accountsconstituting Collateral, the jurisdiction designated in the applicable securitydocumentation governing such accounts as Collateral.

#  

# 31.           Forum.  ACTIONS OR PROCEEDINGS ARISING IN CONNECTIONWITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED IN STATE OR FEDERAL COURTSLOCATED IN THE STATE AND COUNTY OF NEW YORK AND EACH PARTY TO THIS AGREEMENTHEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY ANDUNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS ANDIRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY OF THE AFOREMENTIONED COURTS INANY SUCH ACTION OR PROCEEDING.  THEPARTIES HERETO EACH HEREBY IRREVOCABLY WAIVE ANY OBJECTION WHICH THEY MAY NOWOR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS ORPROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THECOURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOTTO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHTIN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM OR LACKSJURISDICTION OVER SUCH PARTY.  IT IS THEINTENT AND PURPOSE OF THE PARTIES HERETO THAT THE PROVISIONS OF SECTION 5-1402OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TOTHIS AGREEMENT.

 

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# 32.           Waiver Of Jury Trial.  SENIOR LENDER, JUNIOR LENDER AND SUBORDINATELENDER WAIVE TRIAL BY JURY IN RESPECT OF ANY CLAIM, COUNTERCLAIM, ACTION ORCAUSE OF ACTION RELATING TO OR ARISING OUT OF THIS AGREEMENT.  THIS WAIVER IS KNOWINGLY, WILLINGLY ANDVOLUNTARILY MADE BY SENIOR LENDER, JUNIOR LENDER AND SUBORDINATE LENDER ANDSENIOR LENDER, JUNIOR LENDER AND SUBORDINATE LENDER HEREBY REPRESENT THAT NOREPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TOINDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITSEFFECT.  THIS PROVISION IS A MATERIALINDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.  SENIOR LENDER, JUNIOR LENDER AND SUBORDINATELENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION 32IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL.  EACH OF SENIOR LENDER, JUNIOR LENDER ANDSUBORDINATE LENDER FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTEDIN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BYINDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BYINDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HADTHE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

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# 33.           Senior Lender Rights.  Notwithstanding anything to the contraryherein, if at any time all obligations owed to the Senior Lender under theSenior Loan Documents and the Project Documents, as defined in the Senior LoanAgreement, have been paid in full, the rights and obligations of the SeniorLender hereunder shall no longer be in effect. However, notwithstanding the preceding sentence, to the extent thatSenior Lender has any consent, approval, participation or similar rights orrights to receive notices, reports or other information under the ProjectDocuments, at such time as all obligations owed to the Senior Lender under theSenior Loan Documents and the Project Documents have been paid in full, allsuch rights shall be deemed assigned to Junior Lender, unless Junior Lenderrejects such assignment (which it hereby reserves the right to do) in a writteninstrument executed by Junior Lender.

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# 34.           Junior Lender Rights.  Notwithstanding anything to the contraryherein, if at any time all obligations owed to the Junior Lender under theJunior Loan Documents and the Project Documents, as defined in the Junior LoanAgreement, have been paid in full, the rights and obligations of the JuniorLender hereunder shall no longer be in effect. However, notwithstanding the preceding sentence, to the extent thatJunior Lender has any consent, approval, participation or similar rights orrights to receive notices, reports or other information under the ProjectDocuments (including, without limitation, rights of the Senior Lender to whichthe Junior Lender has succeeded pursuant to Section 33), at suchtime as all obligations owed to the Junior Lender under the Junior LoanDocuments and the Project Documents have been paid in full, all such rights(including, without limitation, rights of the Senior Lender to which the JuniorLender has succeeded pursuant to Section 33) shall be deemedassigned to Subordinate Lender, unless Subordinate Lender rejects suchassignment (which it hereby reserves the right to do) in a written instrumentexecuted by Subordinate Lender.

 

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**IN WITNESS WHEREOF,**theundersigned have executed this Agreement as of the day and year first abovewritten.

 

 
|   | **SENIOR LENDER****:**                                                   |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |
|   | BANK OF AMERICA,  N.A.                                                   |
|   |                                                                     |
|   |                                                                     |
|   | By:                                                                      | /s/ Jamison Fox |
|   |                                                                     | Jamison Fox |
|   |                                                                     | Senior Vice  President |
|   |                                                                     |
|   |                                                                     |
|   | **JUNIOR LENDER****:**                                                   |
|   |                                                                     |
|   | BEHRINGER HARVARD  PAL I, LLC, a Delaware limited liability company |
|   |                                                                     |
|   |                                                                     |
|   | By:                                                                      | /s/ Gerald J.  Reihsen, III |
|   |                                                                     | Gerald J.  Reihsen, III |
|   |                                                                     | Executive Vice  President |
|   |                                                                     |
|   |                                                                     |
|   | **SUBORDINATE LENDER****:**                                              |
|   |                                                                     |
|   | LEND LEASE (US)  CAPITAL INC.                                            |
|   |                                                                     |
|   | By:                                                                      | /s/ Edward R. Cook |
|   |                                                                     | Edward R. Cook |
|   |                                                                     | Vice President |

 

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