EXHIBIT 10.1


 




 





Construction Loan Agreement


 


among


 


CHASE PARK PLAZA HOTEL, LLC,


a Delaware limited liability company,


as Borrower


 


and


 


BANK OF AMERICA, N.A.,


as Administrative Agent and L/C Issuer


 


and


 


NATIONAL CITY BANK,


as Syndication Agent


 


and


 


The Other Financial Institutions


Party Hereto


 


 


Dated as of November 15, 2007


 


 


Banc of America Securities LLC and National
City Bank,


as Joint Lead Arrangers and Joint Book
Managers




 





 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 1 – THE LOAN

  	
   

  	
  3

  
	
  1.1

  	
   

  	
  General Information and Exhibits

  	
   

  	
  3

  
	
  1.2

  	
   

  	
  Purpose

  	
   

  	
  3

  
	
  1.3

  	
   

  	
  Commitment to Lend

  	
   

  	
  3

  
	
  1.4

  	
   

  	
  Budget

  	
   

  	
  4

  
	
  1.5

  	
   

  	
  Borrower’s Deposit

  	
   

  	
  7

  
	
  1.6

  	
   

  	
  Evidence of Debt

  	
   

  	
  7

  
	
  1.7

  	
   

  	
  Interest Rates

  	
   

  	
  7

  
	
  1.8

  	
   

  	
  Prepayment

  	
   

  	
  11

  
	
  1.9

  	
   

  	
  Consequential Loss

  	
   

  	
  12

  
	
  1.10

  	
   

  	
  Late Charge

  	
   

  	
  12

  
	
  1.11

  	
   

  	
  Taxes

  	
   

  	
  12

  
	
  1.12

  	
   

  	
  Payment Schedule and Maturity
  Date; Extension Options

  	
   

  	
  13

  
	
  1.13

  	
   

  	
  Advances and Payments

  	
   

  	
  15

  
	
  1.14

  	
   

  	
  Administrative Agent Advances

  	
   

  	
  17

  
	
  1.15

  	
   

  	
  Defaulting Lender

  	
   

  	
  18

  
	
  1.16

  	
   

  	
  Several Obligations; No
  Liability, No Release

  	
   

  	
  20

  
	
  1.17

  	
   

  	
  Replacement of Lenders

  	
   

  	
  21

  
	
  1.18

  	
   

  	
  Borrower’s Rights

  	
   

  	
  21

  
	
  1.19

  	
   

  	
  Swap Transactions.

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 2 – ADDITIONAL COVENANTS
  AND AGREEMENTS

  	
   

  	
  23

  
	
  2.1

  	
   

  	
  Construction of the New
  Improvements

  	
   

  	
  23

  
	
  2.2

  	
   

  	
  Plans and Changes

  	
   

  	
  23

  
	
  2.3

  	
   

  	
  Contracts

  	
   

  	
  23

  
	
  2.4

  	
   

  	
  Assignment of Contracts and
  Plans

  	
   

  	
  24

  
	
  2.5

  	
   

  	
  Storage of Materials

  	
   

  	
  25

  
	
  2.6

  	
   

  	
  Construction Consultant

  	
   

  	
  25

  
	
  2.7

  	
   

  	
  Inspection

  	
   

  	
  25

  
	
  2.8

  	
   

  	
  Notice to Administrative Agent

  	
   

  	
  25

  
	
  2.9

  	
   

  	
  Financial Statements

  	
   

  	
  26

  
	
  2.10

  	
   

  	
  Other Information

  	
   

  	
  26

  
	
  2.11

  	
   

  	
  Reports and Testing

  	
   

  	
  26

  
	
  2.12

  	
   

  	
  Advertising by Lenders

  	
   

  	
  27

  
	
  2.13

  	
   

  	
  Appraisal

  	
   

  	
  27

  
	
  2.14

  	
   

  	
  Payment of Withholding Taxes

  	
   

  	
  27

  
	
  2.15

  	
   

  	
  ERISA and Prohibited Transaction
  Taxes

  	
   

  	
  27

  
	
  2.16

  	
   

  	
  Contest of Claims

  	
   

  	
  28

  
	
  2.17

  	
   

  	
  Property Management and
  Franchises

  	
   

  	
  29

  
	
  2.18

  	
   

  	
  Single Purpose
  Entity/Separateness

  	
   

  	
  29

  
	
  2.19

  	
   

  	
  Reserve Fund

  	
   

  	
  29

  
	
  2.20

  	
   

  	
  Historic Tax Credits

  	
   

  	
  31

  



 


i

















 


	
  2.21

  	
   

  	
  Hotel Lease

  	
   

  	
  31

  
	
  2.22

  	
   

  	
  Representations and Covenants
  Regarding Master Condominium

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 3 – REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  Article 4 – DEFAULT AND REMEDIES

  	
   

  	
  34

  
	
  4.1

  	
   

  	
  Events of Default

  	
   

  	
  34

  
	
  4.2

  	
   

  	
  Remedies

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 5 – ADMINISTRATIVE AGENT

  	
   

  	
  40

  
	
  5.1

  	
   

  	
  Appointment and Authorization of
  Administrative Agent

  	
   

  	
  40

  
	
  5.2

  	
   

  	
  Delegation of Duties

  	
   

  	
  41

  
	
  5.3

  	
   

  	
  Liability of Administrative
  Agent

  	
   

  	
  41

  
	
  5.4

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  42

  
	
  5.5

  	
   

  	
  Notice of Default

  	
   

  	
  42

  
	
  5.6

  	
   

  	
  Credit Decision; Disclosure of
  Information by Administrative Agent

  	
   

  	
  42

  
	
  5.7

  	
   

  	
  Indemnification of
  Administrative Agent

  	
   

  	
  43

  
	
  5.8

  	
   

  	
  Administrative Agent in
  Individual Capacity

  	
   

  	
  44

  
	
  5.9

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  44

  
	
  5.10

  	
   

  	
  Releases; Acquisition and
  Transfers of Collateral

  	
   

  	
  45

  
	
  5.11

  	
   

  	
  Application of Payments

  	
   

  	
  46

  
	
  5.12

  	
   

  	
  Benefit

  	
   

  	
  47

  
	
  5.13

  	
   

  	
  Co-Agents; Lead Managers

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 6 – GENERAL TERMS AND
  CONDITIONS

  	
   

  	
  47

  
	
  6.1

  	
   

  	
  Consents; Borrower’s Indemnity

  	
   

  	
  47

  
	
  6.2

  	
   

  	
  Miscellaneous

  	
   

  	
  49

  
	
  6.3

  	
   

  	
  Notices

  	
   

  	
  50

  
	
  6.4

  	
   

  	
  Payments Set Aside

  	
   

  	
  51

  
	
  6.5

  	
   

  	
  Successors and Assigns

  	
   

  	
  51

  
	
  6.6

  	
   

  	
  Confidentiality

  	
   

  	
  54

  
	
  6.7

  	
   

  	
  Set-off

  	
   

  	
  55

  
	
  6.8

  	
   

  	
  Sharing of Payments

  	
   

  	
  55

  
	
  6.9

  	
   

  	
  Amendments; Survival

  	
   

  	
  56

  
	
  6.10

  	
   

  	
  Costs and Expenses

  	
   

  	
  57

  
	
  6.11

  	
   

  	
  Tax Forms

  	
   

  	
  58

  
	
  6.12

  	
   

  	
  Further Assurances

  	
   

  	
  60

  
	
  6.13

  	
   

  	
  Inducement to Lenders

  	
   

  	
  60

  
	
  6.14

  	
   

  	
  Forum

  	
   

  	
  60

  
	
  6.15

  	
   

  	
  Interpretation

  	
   

  	
  61

  
	
  6.16

  	
   

  	
  No Partnership, etc

  	
   

  	
  61

  
	
  6.17

  	
   

  	
  Records

  	
   

  	
  61

  
	
  6.18

  	
   

  	
  Commercial Purpose

  	
   

  	
  61

  
	
  6.19

  	
   

  	
  Service of Process

  	
   

  	
  62

  
	
  6.20

  	
   

  	
  USA Patriot Act Notice

  	
   

  	
  62

  
	
  6.21

  	
   

  	
  Entire Agreement

  	
   

  	
  62

  
	
  6.22

  	
   

  	
  Dispute Resolution

  	
   

  	
  62

  



 


ii

















 


	
  6.23

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  64

  
	
  6.24

  	
   

  	
  Oral Agreements

  	
   

  	
  65

  



 


EXHIBITS:


 


	
  EXHIBIT “A”

  	
  -

  	
  Legal
  Description of the Hotel Project

  
	
  EXHIBIT
  “A-1”

  	
  -

  	
  Legal
  Description of the Master Residential Condominium Units

  
	
  EXHIBIT “B”

  	
  -

  	
  Definitions
  and Financial Statements

  
	
  EXHIBIT “C”

  	
  -

  	
  Conditions
  Precedent to the Initial Advance

  
	
  EXHIBIT “D”

  	
  -

  	
  Budget
  (Consolidated)

  
	
  EXHIBIT
  “D-1”

  	
  -

  	
  Budget for Main
  Hotel Building Renovation Project

  
	
  EXHIBIT
  “D-2”

  	
  -

  	
  Budget for
  New Hotel Facilities and Corporate Apartments Project

  
	
  EXHIBIT “E”

  	
  -

  	
  List of
  Plans

  
	
  EXHIBIT “F”

  	
  -

  	
  Advances

  
	
  EXHIBIT
  “F-1”

  	
  -

  	
  Form of Draw
  Request

  
	
  EXHIBIT “G”

  	
  -

  	
  Survey
  Requirements

  
	
  EXHIBIT “H”

  	
  -

  	
  RESERVED

  
	
  EXHIBIT “I”

  	
  -

  	
  List of
  Required Bonds

  
	
  EXHIBIT “J”

  	
  -

  	
  Letters of
  Credit

  
	
  EXHIBIT “K”

  	
  -

  	
  Form of
  Assignment and Assumption

  
	
  EXHIBIT “L”

  	
  -

  	
  Form of
  Promissory Note

  
	
  EXHIBIT “M”

  	
  -

  	
  Schedule of
  Lenders

  
	
  EXHIBIT “N”

  	
  -

  	
  Reserved

  
	
  EXHIBIT “O”

  	
  -

  	
  Form of Letter
  of Credit Application

  



 


iii

















 


CONSTRUCTION LOAN AGREEMENT


 


THIS
CONSTRUCTION LOAN AGREEMENT (“Agreement”) is
made by and among each lender from time to time a party hereto (individually, a
“Lender” and collectively, the “Lenders”), and BANK OF AMERICA, N.A., a national banking association as
Administrative Agent and L/C Issuer, NATIONAL CITY BANK,
a national banking association, as Syndication Agent (“Syndication Agent”)(Administrative
Agent and Syndication Agent are sometimes referred to herein, together, as “Agents”),
and CHASE PARK PLAZA HOTEL, LLC, a Delaware
limited liability company (“Borrower”), who agree as follows:


 


RECITALS


 


A.            Borrower is the owner
of a portion of the improvements located on the certain real property (the “Land”)
in St. Louis, Missouri, more particularly described in Exhibit A
attached hereto and made a part hereof, generally comprised of the following:
(i) an eleven story hotel building with approximately two hundred fifty-one (251)
hotel rooms and related facilities and appurtenances (the “Main Hotel
Building”), (ii) certain condominium units (collectively, the “Hotel/Corporate
Units”) consisting of the sub-basement, basement, Floors 1-8, Floor 16, a
part of Floor 28, and Floors 29-30 of an adjacent thirty-story mixed use tower
(the “Condominium Tower”) that is subject to the terms and provisions of
the Master Condominium Declaration (as herein defined); and (iii) two parking
garages associated with the Main Hotel Building and the Condominium Tower (the
“Parking Garages”)(the Land, the Main Hotel Building, the
Hotel/Corporate Units and the Parking Garages, excluding, however, the Master
Residential Condominium Units and the common areas within the Condominium Tower
established by the Master Condominium Declaration is sometimes referred to
herein, collectively, as the “Hotel Project”).


 


B.            The Private
Residences, LLC, a Delaware limited liability company and an affiliate of
Borrower (“Condominium Borrower”), is the owner of Floors 9-12, Floors
14-15, Floors 17-27, and a part of Floor 28 of the Condominium Tower
(collectively, the “Master Residential Condominium Units”). The Master
Residential Condominium Units are more particularly identified on Exhibit
A-1 attached hereto.


 


C.            Borrower and
Condominium Borrower intend to re-develop and renovate the Main Hotel Building,
Condominium Tower and Parking Garages as follows: (i) Borrower intends to
renovate the existing hotel rooms in the Main Hotel Building and perform (or
cause to be performed) certain other renovations of the Main Hotel Building
(the “Main Hotel Building Renovation Project”); (ii) Borrower intends to
renovate the Hotel/Corporate Units and the Parking Garages, it being the intent
of Borrower to construct, among other improvements, approximately eighty-eight
(88) new hotel rooms on Floors 3-5 of the Condominium Tower and to construct
approximately fifty-one (51) corporate apartment units on Floors 6-8 of the
Condominium Tower (collectively, the “New Hotel Facilities and Corporate
Apartments Project”), and (iii) Condominium Borrower intends to construct
approximately eighty-six (86) residential for-sale condominium units within the
Master Residential Condominium Units in the Condominium Tower (the “Residential
Condominium Project”).


 


CONSTRUCTION LOAN AGREEMENT - Page 1


 

















 


D.            In order to accomplish
the sale of condominium units within the Condominium Tower, Condominium
Borrower will establish a new condominium regime with respect to the Master
Residential Condominium Units to create sub-condominium units pursuant to the
provisions of a Declaration of Condominium executed by Condominium Borrower, as
declarant, and recorded or to be recorded in the in the Office of the Recorder
of Deeds for the City of St. Louis (the “Residential Sub-Condominium
Declaration”). Each for-sale condominium unit created by the provisions of
the Residential Sub-Condominium Declaration is sometimes referred to herein,
collectively, as the “Units” and, individually, as a “Unit”.


 


E.             Condominium Borrower
has requested that the Lenders agree to make a construction loan to Condominium
Borrower in an amount not to exceed $58,800,000.00 (the “Condominium Loan”)
for the purpose of financing, in part, the construction of the Residential
Condominium Project. The Condominium Loan will be evidenced by that certain
Construction Loan Agreement dated of even date herewith, executed by
Condominium Borrower, Administrative Agent, Syndication Agent and the Lenders
(as the same may be amended, modified, restated, replaced and supplemented from
time to time, the “Condominium Loan Agreement”). The Condominium Loan
shall be secured, in part, by that certain Deed of Trust, Security Agreement,
Fixture Filing and Financing Statement dated of even date with this Agreement,
granted by Condominium Borrower  to PRLAP,
Inc., as Trustee, for Administrative Agent and Lenders’ benefit, encumbering
Condominium Borrower’s interest in the Master Residential Units (the “Condominium
Deed of Trust”).


 


F.             Borrower has
requested that the Lenders agree to make a construction loan (including any L/C
Credit Extension, as herein defined) to Borrower, in the maximum amount of
$86,200,000.00 (the “Loan”) for the purpose of financing, in part, the
construction of the Main Hotel Building Renovation Project and the New Hotel
Facilities and Corporate Apartments Project. The Loan shall be secured, in
part, by the Deed of Trust (as hereinafter defined) and the Condominium Deed of
Trust.


 


G.            Borrower and
Condominium Borrower have retained IFC, Inc., a Missouri corporation (“Developer”)
to assist Borrower and Condominium Borrower with the Main Hotel Building
Renovation Project, the New Hotel Facilities and Corporate Apartments Project
and the Residential Condominium Project, pursuant to (i) two separate
Development Agreements between Borrower and Developer, as to the Main Hotel
Building Renovation Project, the New Hotel Facilities and Corporate Apartments
Project (together, the “Hotel/Corporate Units Development Agreement”)
and (ii) a Development Agreement between Condominium Borrower and Developer, as
to the Residential Condominium Project (the “Residential Development
Agreement”).


 


H.            In connection with the
making of the Loan for the construction of the Main Hotel Building Renovation
Project and the New Hotel Facilities and Corporate Apartments Project,
Borrower, Administrative Agent and St. Louis Title, LLC (herein, the “Disbursement
Agent”) will execute that certain Disbursing Agreement (“Disbursing
Agreement”) establishing a construction escrow (the “Construction Escrow”)
with Disbursement Agent through which all advances of the Loan will be
disbursed.


 


CONSTRUCTION LOAN AGREEMENT - Page 2


 

















 


ARTICLE 1 – THE LOAN


 


1.1           General Information
and Exhibits. This Agreement includes the Exhibits listed below, all of
which Exhibits are attached hereto and made a part hereof for all purposes.
Borrower and Lenders agree that if any Exhibit to be attached to this Agreement
contains blanks, the same shall be completed correctly and in accordance with
this Agreement prior to or at the time of the execution and delivery thereof.


 


	
  Exhibit “A”

  	
  –

  	
  Legal Description of the Hotel Project

  
	
  Exhibit “A-1”

  	
  –

  	
  Legal Description of the Master Residential
  Condominium Units

  
	
  Exhibit “B”

  	
  –

  	
  Definitions and Financial Statements

  
	
  Exhibit “C”

  	
  –

  	
  Conditions Precedent to the Initial Advance

  
	
  Exhibit “D”

  	
  –

  	
  Budget (Consolidated)

  
	
  Exhibit “D-1”

  	
  –

  	
  Budget for Main Hotel Building Renovation
  Project

  
	
  Exhibit “D-2”

  	
  –

  	
  Budget for New Hotel Facilities and
  Corporate Apartments Project

  
	
  Exhibit “E”

  	
  –

  	
  List of Plans

  
	
  Exhibit “F”

  	
  –

  	
  Advances

  
	
  Exhibit “F-1”

  	
  –

  	
  Form of Draw Request

  
	
  Exhibit “G”

  	
  –

  	
  Survey Requirements

  
	
  Exhibit “H”

  	
  –

  	
  RESERVED

  
	
  Exhibit “I”

  	
  –

  	
  List of Required Bonds

  
	
  Exhibit “J”

  	
  –

  	
  Letters of Credit

  
	
  Exhibit “K”

  	
  –

  	
  Form of Assignment and Assumption

  
	
  Exhibit “L”

  	
  –

  	
  Form of Promissory Note

  
	
  Exhibit “M”

  	
  –

  	
  Schedule of Lenders

  
	
  Exhibit “N”

  	
  –

  	
  Reserved

  
	
  Exhibit “O”

  	
  –

  	
  Form of Letter of Credit Application

  



 


The Exhibits
contain other terms, provisions and conditions applicable to the Loan.
Capitalized terms used in this Agreement shall have the meanings assigned to
them in Exhibit “B”. This Agreement and the other Loan Documents, which
must be in form, detail and substance satisfactory to Agents, evidence the
agreements of Borrower and Lenders with respect to the Loan. Borrower shall
comply with all of the Loan Documents.


 


1.2           Purpose. The
proceeds of the Loan shall be used by Borrower to (i) refinance, in part, the
indebtedness that currently encumbers the Land and the existing Improvements
thereon, (ii) finance, in part, the Main Hotel Building Renovation Project and
the New Hotel Facilities and Corporate Apartments Project, and (ii) pay other
fees, costs and expenses relating to the Hotel Project if and to the extent
that such costs are specifically provided for in the Budget, as amended from
time to time.


 


1.3           Commitment to Lend.
Borrower agrees to borrow from each Lender, and each Lender severally agrees to
make advances of its Pro Rata Share of the Loan proceeds to Borrower in amounts
at any one time outstanding not to exceed such Lender’s Pro Rata Share of the
Loan and (except for Administrative Agent with respect to Administrative Agent
Advances), on the terms and subject to the conditions set forth in this
Agreement and Exhibit “C” and Exhibit “F” attached to this


 


CONSTRUCTION LOAN AGREEMENT - Page 3


 

















 


Agreement. The commitment of Lenders to lend
shall expire and terminate automatically if the Loan is prepaid in full. The
Loan is not revolving. Any amount repaid may not be reborrowed.


 


1.4           Budget.


 


(a)           The Budget for the
Project is attached to this Agreement as Exhibit “D”. The costs budget
for the Main Hotel Building Renovation Project (the “Main Hotel Budget”)
is attached to this Agreement as Exhibit “D-1”. The costs budget for the
New Hotel Facilities and Corporate Apartments Project (the “New Hotel Budget”)
is attached to this Agreement as Exhibit “D-2”. The amounts listed in the Budget as the (a) “Total Costs” is the
maximum cost anticipated by Borrower for each item specified; (b) “Total
Budget” is the maximum cost anticipated by Borrower for the Project; (c) “Loan
Proceeds” is the maximum amount to be advanced under the Loan; and  (d) “Up-Front Equity” is $28,042,653.36 which is to be paid by Borrower toward the Total
Costs, and advanced prior to the Initial Advance of the Loan. The Up-Front
Equity  and Loan Proceeds shall be advanced
subject to the terms, covenants, conditions and provisions of this Agreement. Borrower
shall not amend the Budget, or otherwise reallocate funds from one Budget line
item to another, without the prior written approval of Administrative Agent in
its sole discretion. The Budget has been prepared by Borrower, and Borrower
represents to Administrative Agent and the Lenders that, to the best knowledge
of Borrower, the Budget includes all estimated costs incident to the Loan and
the Project, assuming sufficient cash flow to pay interest on the Loan and
other operating expenses of the Property (including marketing expenses) not
included in such Budget, through the maturity date of the Loan (collectively,
the “Aggregate Cost”) after taking into account the requirements of this
Agreement, including “hard” and “soft” costs, fees and expenses.


 


(b)           Unless approved by
Administrative Agent in its sole discretion, no advance shall be made (i) for
any cost not set forth in the Budget, (ii) from any line item in the Budget
that, when added to all prior advances from that line item, would exceed the
lesser of (A) the actual cost incurred by Borrower for such line item, or (B)
the sum shown in the Budget for such line item, (iii) from any contingency line
item, or (iv) to pay interest on the Loan if and to the extent that the rental
payments due under the Hotel Lease are sufficient to pay interest on the Loan
(it being the intent of Borrower and Lenders that all rental payments made by
Hotel Lessee to Borrower shall be applied by Borrower to pay interest on the
Loan). Advances from any line item in the Budget for purposes other than those
for which amounts are initially allocated to such line item, or changes in the
relative amounts allocated to particular line items in the Budget may only be
made as Administrative Agent in its sole discretion deems necessary or
advisable.


 


(c)           Notwithstanding
the foregoing:


 


(1)           Borrower may
reallocate, without the consent of Administrative Agent, Cost Savings in
respect of Hard Costs, together with up to $100,000 of the Contingency Line
Item which has not previously been reallocated, to any other Hard Costs line
item of the Budget;


 


(2)           Borrower may
reallocate, without the consent of Administrative Agent, amounts from the
Contingency Line Item of the Budget to another Hard Costs line item of the
Budget provided that such reallocation from the Contingency Line Item does not
cause


 


CONSTRUCTION LOAN AGREEMENT - Page 4


 

















 


the Approved Contingency Limit to be exceeded (as more particularly
described in Exhibit “F” of this Agreement);


 


(3)           Borrower may reallocate
Cost Savings in respect of (A) Hard Costs, together with a portion of the
Contingency Line Item which has not previously been reallocated to any other
Line Item if such reallocation of the Contingency Line Item will exceed the
Approved Contingency Limit, to any other Hard Costs Line Item; and (B) Cost
Savings in respect of Soft Costs, together with a portion of the Contingency
Line Item which has not previously been reallocated to any other Line Item, to
any other Soft Costs Line Item, upon the condition that, in each case: (i)
Administrative Agent has approved such reallocation in writing (which approval
shall, except as provided in clause (iii) below, not be unreasonably withheld,
conditioned or delayed); (ii) such reallocation will not adversely affect the
priority of the lien of the Deed of Trust (and, in requesting any such
approval, Borrower shall so certify to Administrative Agent); and (iii) under
no circumstances shall Borrower be entitled to reallocate any portion of the
Restricted Line Items in violation of Section 1.4(h)  below,
in each case, without Administrative Agent’s approval, to be granted or
withheld in Administrative Agent’s good faith business judgment. In giving or
withholding such  approval,
Administrative Agent may take into account the then current state of completion
of the New Improvements, any existing cost overruns and any potential cost
overruns as may then be reasonably foreseen or reasonably anticipated by
Administrative Agent.


 


The “Contingency Line Item” shall mean the line item in the
Budget identified as “Contingency” which is intended to cover the eventuality
of unforeseen costs or cost overruns. Upon any such reallocation of all or any
portion of any such Cost Savings to any line item in the Budget, the amount of
such Cost Savings shall no longer be deemed “Cost Savings” hereunder, but shall
be deemed to be part of the line item in the Budget to which such amount was
reallocated.


 


(d)           Borrower shall (i) not,
without Administrative Agent’s consent, except as to reallocations of Cost
Savings permitted above, reallocate funds from one line item of the Budget to
another or otherwise amend the Budget without the prior written consent of
Administrative Agent;  and (ii) notify
Administrative Agent promptly whenever Borrower becomes aware that the Budget
is, or might be, inaccurate in any material respect, and submit to
Administrative Agent a new Budget setting forth the original Budget and all
amendments.


 


(e)           As used in this
Agreement, “Cost Savings” shall mean and be determined as follows:


 


(1)           If Administrative Agent
determines that the component of the construction of the New Improvements which
is the subject of a line item (a “Line Item Component”) has been finally
completed without the expenditure by Borrower of the entire amount allocated in
the Budget to such line item, and the General Contractor and all subcontractors
have been paid in full for work performed and materials provided with respect
to such Line Item Component, the difference between the amount of such line
item in the Budget and the amount expended for such line item shall be deemed
to be a “Cost Savings”; or


 


(2)           If prior to the
completion of the Line Item Component (other than the “Interest Reserve” line
item or the Contingency Line Item), Borrower shall demonstrate to
Administrative Agent’s reasonable satisfaction that upon completion of such
Line Item


 


CONSTRUCTION LOAN AGREEMENT - Page 5


 

















 


Component, a Cost Savings will be realized pursuant to clause (1) above
with respect to such Line Item Component, the amount of such Cost Savings which
is demonstrated to Administrative Agent’s reasonable satisfaction shall be
deemed to be a “Cost Savings”.


 


(f)            Administrative Agent
reserves the right, at its option, to disburse any amount allocated in the
Budget for “contingencies” or other non-specific purposes to pay approved cost
overruns, contingent costs and expenses of maintaining, marketing and promoting
the Project and such other costs or expenses as Administrative Agent shall
approve (such approval not to be unreasonably withheld, conditioned or
delayed). Administrative Agent may impose such requirements and conditions as
it deems reasonably prudent and necessary with respect to all or any portion of
the amounts so allocated, approved and disbursed.


 


(g)           New line items may not
be created without Administrative Agent’s prior written consent; and, if
created with Administrative Agent’s consent, the Contingency Line Item may not
be reallocated to any such new line item, except as provided in Section
1.4(c) above. To the extent not paid for by Cost Savings, by so allocating
Cost Savings among line items or by reallocating the Contingency Line Item, new
line items must be paid for by Borrower from sources other than proceeds of the
Loan or other indebtedness.


 


(h)           Notwithstanding the
foregoing, under no circumstances shall Borrower be entitled to reallocate (i)
any Cost Savings from any other line items to any fee payable to Borrower or
its Affiliates (including amounts allocable to the “Development Fee” line
item), or (ii) any portion of the line items attributable to: (A) deficits in
the operation of the Property, (B) except to the extent permitted under Section
1.4(b) above, the “Interest Reserve” line item for the Loan, and (C) fees
or commissions payable to any mortgage broker (the line items described in
clauses (i) and (ii) above are sometimes collectively referred to as the “Restricted
Line Items”).


 


(i)            Administrative Agent,
in its sole and absolute discretion, shall have the right to make the
reallocations of line items contemplated in this Section 1.4 during the
continuance of a Default.


 


(j)            The restrictions in
this Section 1.4 regarding the reallocation of the Contingency Line Item
relates only to “contingency” line item(s) in the Budget and not to any
contingency line items that may be contained in the construction contract
between Borrower and the General Contractor.


 


(k)           If, construction of the
New Improvements has been completed and all conditions to the final advance of
the Loan for the New Improvements referred to in Exhibit “F” hereto shall have been satisfied, then Agents
shall determine, in their sole and absolute discretion, whether actual Cost
Savings exist within the Budget (after giving effect to the balance of the
“Interest Reserve” line item of the Budget and the operating income of the
Project). If Agents determine that actual Cost Savings then exist, Agents may,
but shall not be obligated to, reallocate some or all of such Cost Savings to
the “Interest Reserve” line item of the Budget and/or, at the request of
Borrower, permit some or all of Cost Savings to be used by Borrower to pay
costs of construction of the Residential Condominium Project. If Agents agree
to permit Cost Savings to be used by Borrower to pay costs of construction of
the Residential Condominium Project, such Cost Savings may be advanced to
Borrower only upon satisfaction by Borrower of the other conditions precedent
to the making of advances set forth in this Agreement; provided, however,
that Agents may require


 


CONSTRUCTION LOAN AGREEMENT - Page 6


 

















 


that the
proceeds of the Condominium Loan be applied first to pay some or all of the
costs of construction of the Residential Condominium Project before Cost
Savings recognized by Agents under this paragraph (k) may be advanced to
Borrower for such purpose. All amounts advanced hereunder to pay for costs of
the Residential Condominium Project shall be deemed part of the Loan and shall
be due and payable by Borrower to Lenders in the same manner as other advances
of the Loan.


 


1.5           Borrower’s Deposit. If at any time
Administrative Agent determines in its good faith business judgment that the
sum of: (i) any unadvanced portion of the Loan to which Borrower is entitled,
plus (ii) the portions of the Aggregate Cost that are to be paid by Borrower
from other funds that, to Administrative Agent’s reasonable satisfaction, are
available, set aside and committed, is or will be insufficient to pay the
actual unpaid Aggregate Cost, Borrower shall, within ten (10) days after
written notice from Administrative Agent, deposit with Administrative Agent the
amount of the deficiency (“Borrower’s Deposit”) in an interest-bearing
account of Administrative Agent’s selection with interest earned thereon to be
part of Borrower’s Deposit. Such Borrower’s Deposit is hereby pledged to
Administrative Agent for the benefit of Lenders as additional security for the
Loan, and Borrower hereby grants and conveys to Administrative Agent for the
ratable benefit of Administrative Agent and Lenders a security interest in all
funds so deposited with Administrative Agent, as additional security for the
Loan. Administrative Agent may advance all or a portion of the Borrower’s
Deposit prior to the Loan proceeds. During the continuance of a Default
Administrative Agent may (but shall have no obligation to) apply all or any
part of Borrower’s Deposit against the unpaid Indebtedness in such order as
Administrative Agent determines.


 


1.6           Evidence
of Debt.


 


(a)           Amounts of the Loan made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by Administrative Agent in the ordinary course of business. The accounts or
records maintained by Administrative Agent and each Lender shall be prima facie
evidence of the amount of the Loan made by the Lenders to Borrower and the
interest and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of Borrower
hereunder to pay any amount owing with respect to the  Indebtedness. In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of Administrative Agent in respect of such matters, the
accounts and records of Administrative Agent shall control in the absence of
manifest error. Each Lender may attach schedules to its Note(s) and endorse
thereon the date, amount and maturity of the applicable Note and payments with
respect thereto.


 


(b)           In addition to the accounts and records
referred to in subsection (a), each Lender and Administrative Agent shall
maintain in accordance with its usual practice accounts or records evidencing
the purchases and sales by such Lender of participations in Letters of Credit.
In the event of any conflict between the accounts and records maintained by
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of Administrative Agent shall control in
the absence of manifest error.


 


1.7           Interest Rates. The Principal Debt
from day to day outstanding which is not past due shall bear interest at a rate
per annum equal to the lesser of (i) the maximum non-usurious rate of


 


CONSTRUCTION LOAN AGREEMENT - Page 7


 

















 


interest allowed by applicable
law or (ii) the following (computed as provided in Section 1.7.3 hereof)
as applicable:


 


(a)           On Base Rate Principal, on any day, the Base
Rate;


 


(b)           On LIBOR Rate
Principal, for the applicable Interest Period, the applicable LIBOR Rate; and


 


(c)           On LIBOR Daily Rate
Principal, on any day, the applicable LIBOR Daily Rate.


 


1.7.1        Interest
Rate Elections.


 


(a)           Subject
to the conditions and limitations in this Loan, Borrower may by written notice
to Administrative Agent (a “Rate Election Notice”):


 


(i)            Elect,
for a new advance of funds, that such Principal Debt will be Base Rate
Principal, LIBOR Rate Principal, LIBOR Daily Rate Principal or a combination
thereof;


 


(ii)           Elect
to convert, on a LIBOR Business Day, all or part of Base Rate Principal into
LIBOR Rate Principal or LIBOR Daily Rate Principal or a combination thereof;


 


(iii)          Elect to convert, on the last day of the
Interest Period applicable thereto, all or part of any LIBOR Rate Principal
into Base Rate Principal or LIBOR Daily Rate Principal or a combination
thereof;


 


(iv)          Elect to continue, commencing on the last day
of the Interest Period applicable thereto, any LIBOR Rate Principal; or


 


(v)           Elect to convert, on a LIBOR Business Day,
all or part of any LIBOR Daily Rate Principal into Base Rate Principal or LIBOR
Rate Principal or a combination thereof.


 


If, for any reason, an effective election is not made in accordance
with the terms and conditions hereof for any principal advance or for any LIBOR
Rate Principal for which the corresponding Interest Period is expiring, or to
convert Base Rate Principal to LIBOR Rate Principal or LIBOR Daily Rate
Principal, then the sums in question will be Base Rate Principal until an
effective LIBOR Rate Election or LIBOR Daily Rate Election is thereafter made
for such sums.


 


(b)           Each Rate Election Notice must be received by Administrative Agent not
later than 10:00 a.m., Administrative Agent’s Time on the applicable date as
follows:


 


(i)            With respect to an advance of or conversion
to Base Rate Principal, one (1) Business Day prior to the proposed date of
advance or conversion;


 


CONSTRUCTION LOAN AGREEMENT - Page 8


 

















 


(ii)           With respect to an advance of, conversion to
or continuation of LIBOR Rate Principal, three (3) LIBOR Business Days prior to
the proposed date of advance, conversion or continuation; and


 


(iii)          With respect to an advance of or conversion
to LIBOR Daily Rate Principal, one (1) LIBOR Business Day prior to the proposed
date of advance or conversion.


 


Unless otherwise specified herein, no conversion from LIBOR Rate
Principal may be made other than at the end of the corresponding Interest
Period. Each Rate Election Notice shall stipulate:  (A) the amount of the advance or of the
Principal Debt to be converted or continued; (B) the nature of the proposed
advance, conversion or continuation, which shall be either Base Rate Principal,
LIBOR Rate Principal, LIBOR Daily Rate Principal or a combination thereof, and
in the case of a conversion or continuation, the nature of the Principal Debt
to be converted or continued; and (C) in the case of LIBOR Rate Principal, the
proposed commencement date and duration of the Interest Period. All such
notices shall be irrevocable once given, and shall be deemed to have been given
only when actually received by Administrative Agent in writing in form
specified by Administrative Agent.


 


(c)           Administrative
Agent shall promptly notify Borrower and Lenders of the interest rate
applicable to each portion of the Principal Debt other than a Base Rate
Principal upon determination of same.


 


1.7.2        General Conditions
Precedent to Certain LIBOR Rate Elections. In addition to any other
conditions herein, a LIBOR Rate Election or LIBOR Daily Rate Election shall not
be permitted if:


 


(a)           A
Default or a Potential Default has occurred and is continuing; or


 


(b)           After
giving effect to the requested LIBOR Rate Election and LIBOR Daily Rate
Election, the sum of all LIBOR Rate Principal plus all LIBOR Daily Rate
Principal plus all Base Rate Principal plus all Letters of Credit would exceed
the combined Commitments; or


 


(c)           After
giving effect to the requested LIBOR Rate Election or LIBOR Daily Rate
Election, more than five (5) LIBOR Rate Elections and LIBOR Daily Rate
Elections, in the aggregate, would be in effect at any one time; or


 


(d)           The
amount of LIBOR Rate Principal requested in the LIBOR Rate Election is other
than $1,000,000.00 or more; or


 


(e)           The
requested interest period does not conform to the definition of Interest Period
herein; or


 


(f)            Any
of the circumstances referred to in Section 1.7.4 hereof shall apply
with respect to the requested LIBOR Rate Election, the LIBOR Daily Rate
Election or the requested LIBOR Rate Principal or the LIBOR Daily Rate
Principal.


 


CONSTRUCTION LOAN AGREEMENT - Page 9


 

















 


1.7.3        Computations and Determinations. All
computations of interest for Base Rate Principal shall be made on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed
(including the first day but excluding the last day). All computations of
interest for LIBOR Rate Principal and LIBOR Daily Rate Principal and other fees
and interest shall be made on the basis of a 360-day year and actual days
elapsed (including the first day but excluding the last day). Administrative
Agent shall determine each interest rate applicable to the Principal Debt in
accordance with this Agreement and its determination thereof shall be
conclusive in the absence of manifest error. The books and records of
Administrative Agent shall be prima facie evidence of all sums owing to Lenders
from time to time under this Agreement, but the failure to record any such
information shall not limit or affect the obligations of Borrower under the
Loan Documents.


 


1.7.4        Unavailability
of Rate.


 


(a)           If, with respect to any LIBOR Rate Election,
LIBOR Daily Rate Election, or any LIBOR Rate Principal or LIBOR Daily Rate
Principal outstanding hereunder, Required Lenders determine that no adequate
basis exists for determining the LIBOR Rate or LIBOR Daily Rate or that the
LIBOR Rate or LIBOR Daily Rate will not adequately and fairly reflect the cost to
Lenders of funding or maintaining the applicable LIBOR Rate Principal for such
Interest Period or LIBOR Daily Rate Principal, and such Lender(s) so notify
Administrative Agent and Borrower, then until Required Lender(s) notify
Administrative Agent and Borrower that the circumstances giving rise to such
suspension no longer exist, (i) the obligation of Lender(s) to permit such
LIBOR Rate Election and/or LIBOR Daily Rate Election shall be suspended and
(ii) all existing affected LIBOR Rate Principal and/or LIBOR Daily Rate
Principal, as applicable, shall automatically become Base Rate Principal on the
last day of the corresponding Interest Period.


 


(b)           Additionally, if, with
respect to any LIBOR Rate Election, LIBOR Daily Rate Election, or any LIBOR
Rate Principal or LIBOR Daily Rate Principal outstanding hereunder, any Lender
determines that any applicable Law, or any request or directive (whether or not
having the force of Law) of any Tribunal, or compliance therewith by such
Lender, prohibits or restricts or makes impossible the making or maintaining of
such LIBOR Rate Election or LIBOR Daily Rate Election or LIBOR Rate Principal
or LIBOR Daily Rate Principal or the charging of interest on such LIBOR Rate
Principal or LIBOR Daily Rate Principal, and such Lender so notifies
Administrative Agent and Borrower, then until such Lender notifies
Administrative Agent and Borrower that the circumstances giving rise to such
suspension no longer exist, (i) the obligation of such Lender to permit such
LIBOR Rate Election and/or LIBOR Daily Rate Principal, as applicable, shall be
suspended and (ii) all existing affected LIBOR Rate Principal and/or LIBOR
Daily Rate Principal shall automatically become Base Rate Principal, either (1)
as to LIBOR Rate Principal, on the last day of the corresponding Interest
Period (if the Lender determines that it may lawfully continue to fund and
maintain the affected LIBOR Rate Principal to such day); or (2) immediately, in
the case of LIBOR Daily Rate Principal and, as to LIBOR Rate Principal, if the
Lender determines that it may not lawfully continue to fund and maintain the
affected LIBOR Rate Principal to such day, and in such case Borrower shall pay
to such Lender(s) the Consequential Loss, if any, pursuant to Sections 1.8
and 1.9 hereof. Each Lender agrees to designate a different Lending
Office if such designation will avoid the need for such notice and will not, in
the good faith judgment of such Lender, otherwise be materially disadvantageous
to such Lender.


 


CONSTRUCTION LOAN AGREEMENT - Page 10


 

















 


1.7.5        Increased Cost and Reduced Return. If at
any time after the date hereof, any Lender (which shall include, for purposes
of this Section, any corporation controlling any Lender) determines that the
adoption or modification of any applicable Law regarding taxation, such
Lender’s required levels of reserves, deposits, insurance or capital (including
any allocation of capital requirements or conditions), or similar requirements,
or any interpretation or administration thereof by any Tribunal or compliance
of such Lender with any of such requirements, has or would have the effect of
(a) increasing such Lender’s costs relating to the Indebtedness, or (b)
reducing the yield or rate of return of such Lender on the Indebtedness, to a
level below that which such Lender could have achieved but for the adoption or
modification of any such requirements, Borrower shall, within fifteen (15) days
of any request by such Lender, pay to Lender such additional amounts as (in
such Lender’s sole judgment, after good faith and reasonable computation) will
compensate such Lender for such increase in costs or reduction in yield or rate
of return of such Lender (and assuming that the interest rate on Loan has not
been adjusted to take into account such additional amount). No failure by such
Lender to immediately demand payment of any additional amounts payable
hereunder shall constitute a waiver of such Lender’s right to demand payment of
such amounts at any subsequent time. Nothing herein contained shall be
construed or so operate as to require Borrower to pay any interest, fees, costs
or charges greater than is permitted by applicable Law.


 


1.7.6        Past Due Rate. If any amount payable by
Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Past Due Rate to
the fullest extent permitted by applicable Law.  Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable on demand, at a rate per annum (the “Past
Due Rate”) equal to the lesser of (i) the maximum non-usurious rate of
interest allowed by applicable law or (ii) two percent (2%) plus the higher of
(a) the Prime Rate, or (b) the Adjusted LIBOR Rate, or (c) the BBA LIBOR Daily
Rate.


 


1.8           Prepayment. Borrower may prepay the
principal balance of this Loan, in full at any time or in part from time to
time, provided that: (i) Administrative Agent shall have actually received from
Borrower prior written notice of Borrower’s intent to prepay, the amount of
principal which will be prepaid (the “Prepaid Principal”), and the date
on which the prepayment will be made; (ii) each prepayment shall be in the
amount of $1,000 or more (unless the prepayment retires the outstanding balance
of this Loan in full); and (iii) each prepayment shall be in the amount of 100%
of the Prepaid Principal, plus accrued unpaid interest thereon to the date of
prepayment, plus any other sums which have become due to Administrative Agent
and Lenders under the Loan Documents on or before the date of prepayment but
have not been paid; and (iv) no portion of LIBOR Rate Principal may be prepaid
except on the last day of the Interest Period applicable thereto, unless (x)
the prior written consent of Administrative Agent is obtained, which consent
shall not be required so long as no Default has occurred and, if given, shall
provide, without limitation, the manner and order in which the prepayment is to
be applied to the Indebtedness, and (y) Borrower pays any Consequential Loss as
a result thereof, in accordance with Section 1.9 below. If this Loan is
prepaid in full, any commitment of Lenders for further advances shall
automatically terminate.


 


CONSTRUCTION LOAN AGREEMENT - Page 11


 

















 


1.9           Consequential Loss. Within fifteen
(15) days after request by any Lender (or at the time of any prepayment),
Borrower shall pay to such Lender such amount or amounts as will compensate
such Lender for any loss, cost, expense, penalty, claim or liability, including
any loss incurred in obtaining, prepaying, liquidating or employing deposits or
other funds from third parties (but excluding any loss of revenue, profit or
yield of any Lender), as determined by such Lender in its judgment reasonably
exercised (together, “Consequential Loss”) incurred by such Lender with
respect to any LIBOR Rate, including any LIBOR Rate Election or LIBOR Rate
Principal as a result of: (a) the failure of Borrower to make payments on the
date specified under this Agreement or in any notice from Borrower to
Administrative Agent; (b) the failure of Borrower to borrow, continue or
convert into LIBOR Rate Principal on the date or in the amount specified in a
notice given by Borrower to Administrative Agent pursuant to this Agreement;
(c) the early termination of any Interest Period for any reason; or (d) the
payment or prepayment of any amount on a date other than the date such amount
is required or permitted to be paid or prepaid, whether voluntarily or by
reason of acceleration, including, but not limited to, acceleration upon any
transfer or conveyance of any right, title or interest in the Property giving
Administrative Agent on behalf of Lenders the right to accelerate the maturity
of the Loan as provided herein. The foregoing notwithstanding, the amounts of
the Consequential Loss shall never be less than zero or greater than is
permitted by applicable Law. If any Consequential Loss will be due, the Lender
shall deliver to Borrower a notice, in reasonable detail, as to the amount of,
reasons for and the calculation of the Consequential Loss, which notice shall
be conclusive in the absence of manifest error. Neither Administrative Agent
nor the Lenders shall have any obligation to purchase, sell and/or match funds
in connection with the funding or maintaining of the Loan or any portion
thereof. The obligations of Borrower under this Section shall survive any
termination of the Loan Documents and payment of the Loan and shall not be
waived by any delay by Administrative Agent or Lenders in seeking such
compensation.


 


1.10         Late Charge. If Borrower shall fail to
make any payment due hereunder or under the terms of any Note (other than the
principal balance due on the Maturity Date or acceleration of the Loan) within
fifteen (15) days after the date such payment is due, Borrower shall pay to the
applicable Lender or Lenders on demand a late charge equal to four percent (4%)
of such payment. Such fifteen (15) day period shall not be construed as in any
way extending the due date of any payment. The “late charge” is imposed for the
purpose of defraying the expenses of a Lender incident to handling such
defaulting payment. This charge shall be in addition to, and not in lieu of,
any other remedy Lenders may have and is in addition to any fees and charges of
any agents or attorneys which Administrative Agent or Lenders may employ upon
the occurrence of a Default, whether authorized herein or by Law.


 


1.11         Taxes.


 


(a)           Subject to Section
6.11, any and all payments by Borrower to or for the account of
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto levied by any jurisdiction
within the United States of America, excluding, in the case of Administrative
Agent and any Lender, taxes imposed on or measured by its net income, and
franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the


 


CONSTRUCTION LOAN AGREEMENT - Page 12


 

















 


Laws of which
Administrative Agent or such Lender, as the case may be, is subject (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as “Taxes”). Subject to Section 6.11, if Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to Administrative Agent or any Lender, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section), Administrative Agent and such Lender receives an amount equal to the
sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, (iii) Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable Laws, and (iv) within 30 days after the date of such payment,
Borrower shall furnish to Administrative Agent (which shall forward the same to
such Lender) the original or a certified copy of a receipt evidencing payment
thereof.


 


(b)           In addition, Borrower
agrees to pay any and all present or future stamp, court or documentary taxes
and any other excise or property taxes or charges or similar levies which arise
from any payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as “Other Taxes”).


 


(c)           Borrower agrees to
indemnify Administrative Agent and each Lender for the full amount of Taxes and
Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction
on amounts payable under this Section) paid by Administrative Agent and such
Lender and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, in each case whether or not such Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Tribunal but, subject to Administrative Agent or such Lender complying with the
requirements of Section 6.11(a)(iii) hereof to the extent the liability
indemnified against relates to the subject matter thereof. Payment under this subsection
(d) shall be made within 30 days after the date the Lender or
Administrative Agent makes a demand therefor. If subsequent to such payment, a
final determination is made that any Taxes or Other Taxes paid Borrower were
not legally or correctly imposed or assessed by the applicable Tribunal,
Borrower shall be entitled to a return of such taxes.


 


(e)           Without prejudice to
the survival of any other agreement of Borrower hereunder, the agreements and
obligations of Borrower contained in this Section 1.11 shall survive the
termination of the Commitments and the payment in full of all the other
Indebtedness.


 


1.12         Payment
Schedule and Maturity Date; Extension Options.


 


(a)           The entire principal
balance of the Loan then unpaid and all accrued interest then unpaid shall be
due and payable in full on the Maturity Date. Accrued unpaid interest shall be
due and payable on the first (1st) day of the first full calendar
month after the Closing Date and on the same day of each succeeding calendar
month thereafter until all principal and accrued interest owing on this Loan
shall have been fully paid and satisfied.


 


(b)           If the Maturity Date of
the Loan is extended pursuant to paragraph (c) below, Borrower shall make
principal payments on the Loan, commencing on the first (1st) day of
the first full calendar month of the Extension Period and continuing on the
first (1st) day of each calendar


 


CONSTRUCTION LOAN AGREEMENT - Page 13


 

















 


month thereafter
until the Maturity Date, in an amount equal to the average monthly payments of
principal which would be payable during the first 24 months of a 30 year
amortization period, if the Deemed Principal Balance were to be amortized over
an assumed thirty (30) year period, at an interest rate per annum equal to the
greater of (i) seven percent (7.00%) or (ii) 1.75%, plus the Treasury Rate most
recently published approximately ten (10) days before the first day of the
Extension Period.


 


(c)           Borrower shall have two
options to extend the Maturity Date of the Loan for a period of twelve (12)
months each (each twelve month period, an “Extension Period”), at which
time the term “Maturity Date” shall mean the Maturity Date, as extended
pursuant to this Section 1.12. The exercise of each extension option
shall be effective only if all of the following conditions have been satisfied
as to each extension on or before the applicable Maturity Date:


 


(i)            The Completion Date shall have occurred and
the New Improvements shall be subject to no lien or claim of lien except the
liens of the Loan Documents and Permitted Encumbrances (or liens which have
been bonded around or are being contested in accordance with the provisions of
the Loan Documents).


 


(ii)           All conditions to the final advance of the Loan for the New
Improvements referred to in Exhibit
“F” hereto shall have been satisfied.


 


(iii)          There shall then exist no Default or
Potential Default.


 


(iv)          The NOI for the Property, verified by Administrative Agent’s NOI Confirmation
Letter after receipt of Borrower’s NOI Certificate, based on the most recent
twelve (12) calendar months is not less than the 1.35xDSC Performance Threshold
based on same twelve (12) calendar month period. Borrower shall have the right
to prepay the Loan in an amount sufficient to satisfy the condition in this
paragraph (iv) in connection with the exercise of either or both extension
options.


 


(v)           Either the most current appraisal of the Property in Administrative
Agent’s possession (that complies with Section 2.13 below and has been
approved by Agents) or, if required by Agents, an update of such appraisal
prepared within the 60 days preceding the existing Maturity Date, in form and
substance satisfactory to Agents and otherwise in accordance with the appraisal
requirements described in Section
2.13  below, shows that
the Deemed Principal Balance is not greater than 75%  of
the fair market value of the Property based on a “stabilized value”.


 


(vi)          Borrower shall cause to be delivered to Administrative Agent at
Borrower’s expense an endorsement to the Title Insurance reflecting that the
coverage afforded by the Title Insurance has not been adversely affected as a
result of the modification and extension of the Loan and the documents referred
to in paragraph (vii) below.


 


(vii)         Borrower and Payment Guarantor shall have executed and delivered to
Administrative Agent a modification and extension agreement, providing for,
among other things (1) the extension of the Maturity Date, (2) the
reaffirmation by Borrower and Payment Guarantor of their respective obligations
under the Loan Documents, and (3) the


 


CONSTRUCTION LOAN AGREEMENT - Page 14


 

















 


waiver and release by Borrower and Payment
Guarantor of any defenses, claims, counterclaims, and rights of offset, if any,
which Borrower or Payment Guarantor may then have in respect of Agents and the
Lenders and the Indebtedness and Obligations, together with such other
agreements, documents or amendments to the Loan Documents as are reasonably
requested by Administrative Agent to properly document the extension, all in
form and content satisfactory to Administrative Agent in its good faith
business judgment. During any Extension Period, unless noted above, all terms
and conditions of the Loan Documents (including but not limited to interest
rates and payments) pertaining to the Loan shall continue to apply.


 


(viii)        The request for extension must be made to Administrative Agent in
writing not more than ninety (90) days, and not less than thirty (30) days,
prior to the applicable Maturity Date.


 


(ix)           Borrower shall have paid to Administrative Agent, for the ratable
benefit of Lenders, as a condition to such extension on or before the first day
of the applicable Extension Period, an extension fee equal to 0.35% of the then
Deemed Principal Balance of the Loan (determined as of as of the first day of
each Extension Period).


 


(x)            Agents shall have determined, in their
commercially reasonable judgment, that no material adverse change has occurred
with respect to the Property or the financial condition or creditworthiness of
Borrower or Payment Guarantor.


 


If all of the
foregoing conditions are not satisfied strictly in accordance with their terms,
the extension shall not be or become effective. Upon the execution and delivery
by Borrower, Payment Guarantor and Administrative Agent of the modification and
extension agreement referred to in subparagraph (vii) above, the extension
shall be deemed to be effective. Each extension option is exercisable
separately only and not together and the second extension option shall be void
and not exercisable unless the first extension option was properly exercised.
Whether or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent in connection
with the proposed extension (pre- and post-closing), including, without
limitation, appraisal fees, environmental audit and legal fees; all such costs
and expenses incurred up to the time of Administrative Agent’s written
agreement to the extension shall be due and payable prior to Administrative
Agent’s execution of that agreement (or if the proposed extension does not
become effective, then upon demand by Administrative Agent).


 


1.13         Advances
and Payments.


 


(a)           Following receipt of a
Draw Request, Administrative Agent shall promptly provide each Lender with a
copy of the Draw Request Form in the form of Exhibit “F-1”, the related
AIA Document G-702 and G-703, if requested by Administrative Agent, the related
written certification by Borrower’s Architect and if available the related
written certification of the Construction Consultant. Administrative Agent
shall notify each Lender telephonically (with confirmation by facsimile) or by
facsimile (with confirmation by telephone) not later than 1:00 p.m.
Administrative Agent’s Time two (2) Business Days prior to the advance Funding
Date for LIBOR Rate Principal advances, and one (1) Business Day prior to the
advance Funding Date for all other advances, of its Pro Rata Share of the
amount Administrative Agent has determined shall be advanced in connection


 


CONSTRUCTION LOAN AGREEMENT - Page 15


 

















 


therewith (“Advance
Amount”). In the case of an advance of the Loan, each Lender shall make the
funds for its Pro Rata Share of the Advance Amount available to Administrative
Agent not later than 11:00 a.m. Administrative Agent’s Time on the Funding Date
thereof. After Administrative Agent’s receipt of the Advance Amount from
Lenders, Administrative Agent shall make proceeds of the Loan in an amount
equal to the Advance Amount (or, if less, such portion of the Advance Amount
that shall have been paid to Administrative Agent by Lenders in accordance with
the terms hereof) available to Borrower on the applicable Funding Date by
advancing such funds to Borrower in accordance with the provisions of Exhibit
“F”.


 


(b)           All payments by
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff. Except as otherwise expressly provided herein,
all payments by Borrower hereunder shall be made to Administrative Agent not
later than 12:00 p.m. Administrative Agent’s Time on the date specified herein.
Administrative Agent shall distribute to each Lender such funds as such Lender
may be entitled to receive hereunder,
(i) on or before 3:00 p.m. (Administrative Agent’s Time) on the day
Administrative Agent receives such funds, if Administrative Agent has received
such funds on or before 12:00 p.m. (Administrative Agent’s Time), or
(ii) on or before 12:00 p.m. (Administrative Agent’s Time) on the Business
Day following the day Administrative Agent receives such funds, if
Administrative Agent receives such funds after 12:00 p.m. (Administrative
Agent’s Time). If Administrative Agent fails to timely pay any amount to any
Lender in accordance with this subsection, Administrative Agent shall pay to
such Lender interest at the Federal Funds Rate on such amount, for each day
from the day such amount was to be paid until it is paid to such Lender.


 


(c)           Except as otherwise
provided herein, all payments by Borrower or any Lender shall be made to
Administrative Agent at Administrative Agent’s Office not later than the time
for such type of payment specified in this Agreement. All payments received
after such time shall be deemed received on the next succeeding Business Day.
All payments shall be made in immediately available funds in lawful money of
the United States of America. Whenever any payment falls due on a day which is
not a Business Day, such payment may be made on the next succeeding Business
Day.


 


(d)           Upon satisfaction of
any applicable terms and conditions set forth herein, Administrative Agent
shall promptly make any amounts received in accordance with the prior
subsection available in like funds received as follows:  (i) if payable to Borrower, in accordance
with Exhibit “F”, except as otherwise specified herein, and (ii) if
payable to any Lender, by wire transfer to such Lender at the address specified
in the Schedule of Lenders.


 


(e)           Except as otherwise
provided in Exhibit “J” with respect to Borrower reimbursing drawings
under Letters of Credit, unless Borrower or any Lender has notified
Administrative Agent, prior to the date any payment is required to be made by
it to Administrative Agent, that Borrower or such Lender, as the case may be,
will not make such payment, Administrative Agent may assume that Borrower or
such Lender, as the case may be, has timely made such payment and may (but shall
not be required to do so) in reliance thereon, make available a corresponding
amount to the person or entity entitled thereto. If and to the extent that such
payment was not in fact made to Administrative Agent in immediately available
funds, then:


 


CONSTRUCTION LOAN AGREEMENT - Page 16


 

















 


(i)            if Borrower failed to
make such payment, each Lender shall forthwith on demand repay to
Administrative Agent the portion of such assumed payment that was made available
to such Lender in immediately available funds, together with interest thereon
in respect of each day from and including the date such amount was made
available by Administrative Agent to such Lender to the date such amount is
repaid to Administrative Agent in immediately available funds at the Federal
Funds Rate from time to time in effect; and


 


(ii)           if any Lender failed to
make such payment, such Lender or, if applicable, Electing Lender or Lenders
shall forthwith on demand pay to Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period from
the date such amount was made available by Administrative Agent to Borrower to
the date such amount is recovered by Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the interest rate applicable to such
amount under the Loan. If such Lender pays such amount to Administrative Agent,
then such amount shall constitute such Lender’s Pro Rata Share, included in the
applicable Loan advance. If such Lender does not pay such amount forthwith upon
Administrative Agent’s demand therefor, Administrative Agent may make a demand
therefor upon Borrower (after taking into account the provisions of Section
1.15, to the extent applicable), and Borrower shall pay such amount to
Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to such
amount under the Loan. Nothing herein or in any other Loan Document shall be
deemed to relieve any Lender from its obligation to fulfill its Commitment or
to prejudice any rights which Administrative Agent or Borrower may have against
any Lender as a result of any default by such Lender hereunder.


 


A notice of Administrative Agent to any Lender or to Borrower with
respect to any amount owing under this subsection shall be conclusive, absent
manifest error.


 


(f)            If any Lender makes
available to Administrative Agent funds for any Loan advance to be made by such
Lender as provided in the foregoing provisions of this Section, and the funds
are not advanced to Borrower or otherwise used to satisfy any Obligations of
such Lender hereunder, Administrative Agent shall return such funds (in like
funds as received from such Lender) to such Lender, without interest.


 


(g)           Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan advance in any particular
place or manner.


 


1.14         Administrative
Agent Advances.


 


(a)           Administrative Agent is
authorized, from time to time, in Administrative Agent’s sole discretion to
make, authorize or determine advances of the Loan, or otherwise expend funds,
on behalf of Lenders (“Administrative Agent Advances”), (i) to pay any
costs, fees and expenses as described in Section 6.10 herein, (ii) when
the applicable conditions precedent set forth in Exhibit “C” and Exhibit
“F” have been satisfied to the extent required by Administrative Agent, and
(iii) when Administrative Agent deems necessary or desirable to preserve or
protect the Loan collateral


 


CONSTRUCTION LOAN AGREEMENT - Page 17


 

















 


or any portion
thereof (including those with respect to property taxes, insurance premiums,
completion of construction, operation, management, improvements, maintenance,
repair, sale and disposition) (A) subject to Section 5.5, after the
occurrence of a Default, and (B) subject to Section 5.10, after
acquisition of all or a portion of the Loan collateral by foreclosure or
otherwise.


 


(b)           Administrative Agent
Advances shall constitute obligatory advances of Lenders under this Agreement,
shall be repayable on demand and secured by the Loan collateral, and if unpaid
by Lenders as set forth below shall bear interest at the rate applicable to
such amount under the Loan or if no longer applicable, at the Base Rate.
Administrative Agent shall notify each Lender in writing of each Administrative
Agent Advance. Upon receipt of notice from Administrative Agent of its making
of an Administrative Agent Advance, each Lender shall make the amount of such
Lender’s Pro Rata Share of the outstanding principal amount of Administrative Agent
Advance available to Administrative Agent, in same day funds, to such account
of Administrative Agent as Administrative Agent may designate, (i) on or before
3:00 p.m. (Administrative Agent’s Time) on the day Administrative Agent
provides Lenders with notice of the making of such Administrative Agent Advance
if Administrative Agent provides such notice on or before 12:00 p.m.
(Administrative Agent’s Time), or (ii) on or before 12:00 p.m. on the Business
Day immediately following the day Administrative Agent provides Lenders with
notice of the making of such advance if Administrative Agent provides notice
after 12:00 p.m. (Administrative Agent’s Time).


 


1.15         Defaulting
Lender.


 


1.15.1      Notice and Cure of Lender
Default; Election Period; Electing Lenders. Administrative Agent shall
notify (such notice being referred to as the “Default Notice”) Borrower
(for Loan advances) and each non-Defaulting Lender if any Lender is a
Defaulting Lender. Each non-Defaulting Lender shall have the right, but in no
event or under any circumstance the obligation, to fund such Defaulting Lender
Amount, provided that, within twenty (20) days after the date of the Default
Notice (the “Election Period”), such non-Defaulting Lender or Lenders
(each such Lender, an “Electing Lender”) irrevocably commit(s) by notice
in writing (an “Election Notice”) to Administrative Agent, the other
Lenders and Borrower to fund the Defaulting Lender Amount and to assume the
Defaulting Lender’s obligations with respect to the advancing of the entire undisbursed
portion of the Defaulting Lender’s principal obligations under this Agreement
(such entire undisbursed portion of the Defaulting Lender’s principal
obligations under this Agreement, including its portion of the Payment Amount
that is the subject of the default, is hereinafter referred to as the “Defaulting
Lender Obligation”). If Administrative
Agent receives more than one Election Notice within the Election Period, then
the commitment to fund the Defaulting Lender Amount and the Defaulting Lender
Obligation shall be apportioned pro rata among the Electing Lenders in the
proportion that the amount of each such Electing Lender’s Commitment bears to
the total Commitments of all Electing Lenders. If the Defaulting Lender
fails to pay the Defaulting Lender Payment Amount within the Election Period,
the Electing Lender or Lenders, as applicable, shall be automatically obligated
to fund the Defaulting Lender Amount and Defaulting Lender Obligation (and
Defaulting Lender shall no longer be entitled to fund such Defaulting Lender
Amount and Defaulting Lender Obligation) within three (3) Business Days
following the expiration of the Election Period to reimburse Administrative
Agent or make payment to Borrower, as applicable. Notwithstanding anything to
the contrary contained herein, if


 


CONSTRUCTION LOAN AGREEMENT - Page 18


 

















 


Administrative Agent has funded
the Defaulting Lender Amount, Administrative Agent shall be entitled to
reimbursement for its portion of the Defaulting Lender Payment Amount pursuant
to Section 5.11.


 


1.15.2      Removal
of Rights; Indemnity. Administrative Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by or on behalf of Borrower
to Administrative Agent for the Defaulting Lender’s benefit; nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder or under
any Note until all Defaulting Lender Payment Amounts are paid in full. Amounts
payable to a Defaulting Lender shall be paid by Administrative Agent to
reimburse Administrative Agent and any Electing Lender pro rata for all
Defaulting Lender Payment Amounts. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents, a Defaulting Lender
shall be deemed not to be a “Lender” and such Defaulting Lender’s Commitment
shall be deemed to be zero. A Defaulting Lender shall have no right to
participate in any discussions among and/or decisions by Lenders hereunder
and/or under the other Loan Documents. Further, any Defaulting Lender shall be
bound by any amendment to, or waiver of, any provision of, or any action taken
or omitted to be taken by Administrative Agent and/or the non-Defaulting
Lenders under, any Loan Document which is made subsequent to the Defaulting
Lender’s becoming a Defaulting Lender. This Section shall remain effective with
respect to a Defaulting Lender until such time as the Defaulting Lender shall
no longer be in default of any of its obligations under this Agreement by
curing such default by payment of all Defaulting Lender Payment Amounts (i)
within the Election Period, or (ii) after the Election Period with the consent
of the non-Defaulting Lenders. Such Defaulting Lender nonetheless shall be
bound by any amendment to or waiver of any provision of, or any action taken or
omitted to be taken by Administrative Agent and/or the non-Defaulting Lenders
under any Loan Document which is made subsequent to that Lender’s becoming a
Defaulting Lender and prior to such cure or waiver. The operation of this
subsection or the subsection above alone shall not be construed to increase or
otherwise affect the Commitment of any non-Defaulting Lender, or relieve or
excuse the performance by Borrower of their duties and obligations hereunder or
under any of the other Loan Documents. Furthermore, nothing contained in this
Section shall release or in any way limit a Defaulting Lender’s obligations as
a Lender hereunder and/or under any other of the Loan Documents. Further, a
Defaulting Lender shall indemnify and hold harmless Administrative Agent and
each of the non-Defaulting Lenders from any claim, loss, or costs incurred by
Administrative Agent and/or the non-Defaulting Lenders as a result of a
Defaulting Lender’s failure to comply with the requirements of this Agreement,  INCLUDING SUCH FAILURE
CONSTITUTING IN WHOLE OR PART ADMINISTRATIVE AGENT’S OR NONDEFAULTING LENDERS’
STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE
except to the extent such failure constitutes willful misconduct or gross negligence
on Administrative Agent’s or Defaulting Lenders’ part; including, without
limitation, any and all additional losses, damages, costs and expenses
(including, without limitation, attorneys’ fees) incurred by Administrative
Agent and any non-Defaulting Lender as a result of and/or in connection with
(i) a non-Defaulting Lender’s acting as an Electing Lender, (ii) any
enforcement action brought by Administrative Agent against a Defaulting Lender,
and (iii) any action brought against Administrative Agent and/or Lenders. The
indemnification provided above shall survive any termination of this Agreement.


 


CONSTRUCTION LOAN AGREEMENT - Page 19


 

















 


1.15.3      Commitment Adjustments. In connection with
the adjustment of the amounts of the Loan Commitments of the Defaulting Lender
and Electing Lender(s) upon the expiration of the Election Period as aforesaid,
Borrower, Administrative Agent and Lenders shall execute such modifications to
the Loan Documents as shall, in the reasonable judgment of Administrative
Agent, be necessary or desirable in connection with the adjustment of the
amounts of Commitments in accordance with the foregoing provisions of this
Section. For the purpose of voting or consenting to matters with respect to the
Loan Documents such modifications shall also reflect the removal of voting
rights of the Defaulting Lender and increase in voting rights of Electing
Lenders to the extent an Electing Lender has funded the Defaulting Lender
Amount and assumed the Defaulting Lender Obligation. In connection with such
adjustments, Defaulting Lenders shall execute and deliver a Assignment and
Assumption covering that Lender’s Commitment and otherwise comply with Section
6.5. If a Lender refuses to execute and deliver such Assignment and
Assumption or otherwise comply with Section 6.5, such Lender hereby
appoints Administrative Agent to do so on such Lender’s behalf. Administrative
Agent shall distribute an amended Schedule of Lenders, which shall thereafter
be incorporated into this Agreement, to reflect such adjustments. However, all
such Defaulting Lender Amounts and Defaulting Lender Obligation funded by
Administrative Agent or Electing Lenders shall continue to be Defaulting Lender
Amounts of the Defaulting Lender pursuant to its obligations under this
Agreement.


 


1.15.4      No Election. In the event that no Lender
elects to commit to fund the Defaulting Lender Amount and Defaulting Lender
Obligations within the Election Period, Administrative Agent shall, upon the expiration
of the Election Period, so notify Borrower and each Lender.


 


1.16         Several Obligations; No Liability, No
Release. Notwithstanding that certain of the Loan Documents now or
hereafter may have been or will be executed only by or in favor of Administrative
Agent in its capacity as such, and not by or in favor of Lenders, any and all
obligations on the part of Administrative Agent (if any) to make any advances
of the Loan or reimbursements for other Payment Amounts shall constitute the
several (and not joint) obligations of the respective Lenders on a ratable
basis, according to their respective Pro Rata Shares. Except as may be
specifically provided in this Agreement, no Lender shall have any liability for
the acts of any other Lender. No Lender shall be responsible to Borrower or any
other person for any failure by any other Lender to fulfill its obligations to
make advances of the Loan or reimbursements for other Payment Amounts, nor to
take any other action on its behalf hereunder or in connection with the
financing contemplated herein. The failure of any Lender to pay to
Administrative Agent its Pro Rata Share of a Payment Amount shall not relieve
any other Lender of any obligation hereunder to pay to Administrative Agent its
Pro Rata Share of such Payment Amounts as and when required herein, but no
Lender shall be responsible for the failure of any other Lender to so fund its
Pro Rata Share of the Payment Amount. In furtherance of the foregoing, Lenders
shall comply with their obligation to pay Administrative Agent their Pro Rata
Share of such Payment Amounts regardless of (i) the occurrence of any Default
hereunder or under any Loan Document; (ii) any failure of consideration,
absence of consideration, misrepresentation, fraud, or any other event, failure,
deficiency, breach or irregularity of any nature whatsoever in the Loan
Documents; or (iii) any bankruptcy, insolvency or other like event with regard
to any Borrower or Guarantor. The obligation of Lenders to pay to such Payment
Amounts are in all regards independent of any claims between Administrative
Agent and any Lender.


 


CONSTRUCTION LOAN AGREEMENT - Page 20


 

















 


1.17         Replacement of Lenders. If any Lender
is a Defaulting Lender, Borrower may, upon notice to such Lender and
Administrative Agent, replace such Lender by causing such Lender to assign its
Commitment with the payment of any assignment fee by the replaced Lender to one
or more other lenders or Eligible Assignees acceptable to Borrower, Administrative
Agent and the L/C Issuer. Borrower shall or shall cause the replacement lender
to (subject to the provisions of Section 1.14 through 1.15
providing for payment of all Defaulting Lender Payment Amounts to
Administrative Agent and/or Electing Lenders, as applicable, prior to payment
of amounts due to a Defaulting Lender), (x) pay in full of all principal,
interest, fees and other amounts owing to such Lender through the date of
replacement, (y) provide appropriate assurances and indemnities (which may
include letters of credit) as such Lender may reasonably require with respect
to such replaced Lender’s obligation to fund its participation interest in any
Letters of Credit then outstanding and (z) provide a release of such Lender
from its obligations under the Loan Documents. Any Lender being replaced shall
execute and deliver an Assignment and Assumption covering that Lender’s
Commitment and otherwise comply with Section 6.5. If a Lender being
replaced refuses to execute and deliver such Assignment and Assumption or
otherwise comply with Section 6.5, such Lender hereby appoints
Administrative Agent to do so on such Lender’s behalf. Administrative Agent
shall distribute an amended Schedule of Lenders, which shall thereafter be
incorporated into this Agreement, to reflect adjustments to Lenders and their
Commitments.


 


1.18         Borrower’s Rights. Nothing in Sections 1.15
through 1.17, nor any action taken pursuant to Sections 1.15
through 1.17  (including the
replacement of the Defaulting Lender), shall relieve a Defaulting Lender from
liability to Borrower for the Defaulting Lender’s failure to make Loan advances
or to otherwise perform as required by this Agreement, or limit any rights or
remedies of Borrower against the Defaulting Lender.


 


1.19         Swap
Transactions.  


 


(a)           Borrower may, but shall not be required to,
enter into an Swap Transaction with a Lender acceptable to the Required Lenders
(such financial institution is referred to herein as “Swap Bank”). The
Lenders agree that the Swap Bank may be one of the Agents or an Affiliate of
the Agents. Borrower agrees that if Borrower executes an Swap Transaction, the
provisions of this Section 1.19 shall govern and apply to such Swap
Transaction. Borrower acknowledges and agrees that the failure of Borrower to
comply with its obligations under the Swap Transaction and to make payments
when due thereunder, will be a default under this Loan and Lenders may advance
funds, on Borrower’s behalf to cure Borrower’s default under the Swap
Transaction. On the terms and subject to the provisions of this Agreement,
Lenders will make advances from interest reserve for periodic payments under
the Swap Transaction as and when they become due. All amounts advanced by
Lenders to Swap Bank, Borrower or others in respect of Borrower’s obligations
under the Swap Transaction shall be added to the Loan and shall be deemed a
part of the Obligations secured by the Deed of Trust and the other Loan
Documents. All amounts payable to Borrower pursuant to the Swap Transaction
shall be paid to Administrative Agent for the ratable benefit of Lenders and
applied by Lenders to the payment of interest on the Loan or other costs of the
Property. Borrower acknowledges and agrees that, notwithstanding the terms of
the Swap Transaction, Borrower shall not modify or terminate the Swap
Transaction without the prior written consent of Administrative Agent.


 


CONSTRUCTION LOAN AGREEMENT - Page 21


 
















 


(b)           As additional security
for the obligations of Borrower under the Loan Documents, Borrower hereby
transfers, assigns, and conveys to Administrative Agent for the ratable benefit
of Lenders, subject to the terms and conditions contained herein, all of Borrower’s
rights, titles and interests, but not its obligations, duties or liabilities
for any breach, in, under and to the Swap Transaction, any and all amounts
received by Borrower in connection therewith or to which Borrower is entitled
thereunder, and all proceeds of the foregoing. Administrative Agent shall have
the right at any time (but shall have no obligation) to take in its name or in
the name of Borrower such action as Administrative Agent may at any time
determine to be necessary or advisable to cure any default under or with
respect to the Swap Transaction or to protect the rights of Borrower or Swap
Bank thereunder; provided, however, that prior to the occurrence
of a Default, Administrative Agent shall give prior written notice to Borrower
before taking any such action. Neither Administrative Agent or Lenders shall
incur any liability if any action so taken by Administrative Agent or on its
behalf shall prove to be inadequate or invalid, and Borrower agrees to hold
Administrative Agent and Lenders free and harmless against and from any loss,
cost, liability or expense (including, but not limited to, attorneys’ fees and
expenses) incurred in connection with any such action, as provided in this
Agreement. It is agreed and understood that, in addition to any and all other
remedies to which Administrative Agent and Lenders are entitled at law or in
equity, Administrative Agent and Lenders shall have all rights and benefits to
which a secured party is entitled at law or in equity, including, without limitation
under the Uniform Commercial Code as adopted and in effect in the State of
Texas and upon any foreclosure by Lenders of the lien under the Deed of Trust,
all right, title and interest of Borrower in and to the Swap Transaction and
any and all amounts received by Borrower in connection therewith or to which
Borrower is entitled thereunder, and all proceeds of the foregoing, shall
automatically be conveyed in connection therewith, unless prior to such
foreclosure, Administrative Agent elects to exclude Borrower’s right, title and
interest in the Swap Transaction from such foreclosure.


 


(c)           Borrower hereby
constitutes and appoints Administrative Agent as Borrower’s true and lawful
attorney, with the full power of substitution, for it and in its name, place
and stead, or otherwise, on behalf and for the benefit of Administrative Agent,
to exercise, at the election of Administrative Agent, any and all rights and
remedies of Borrower under the Swap Transaction, including, without limitation,
making any payments thereunder and consummating any transactions contemplated
thereby, from time to time to institute and prosecute in the name and at the
expense of Borrower, or otherwise, but for the benefit of Administrative Agent
and Lenders, any and all proceedings at law, in equity, or otherwise, that
Administrative Agent may deem proper in order to collect, assert or enforce any
claim, right or title, of any kind, in and to the Swap Transaction hereby
assigned and conveyed, or intended so to be, and to defend and compromise, at
the election of Administrative Agent, any and all actions, suits or proceedings
with respect to the Swap Transaction, and generally to do all and any such
action in relation thereto as Administrative Agent shall deem advisable; and
Borrower hereby declares that the appointment hereby made and powers hereby
granted are coupled with an interest and are and shall be irrevocable by
Borrower in any manner, or for any reason. Administrative Agent may exercise
its rights under this Section only after the occurrence and during the
continuation of a Default under any of the Loan Documents.


 


CONSTRUCTION LOAN AGREEMENT - Page 22


 

















 


ARTICLE 2– ADDITIONAL COVENANTS AND AGREEMENTS


 


2.1           Construction of the New Improvements.
Borrower has commenced construction of the New Improvements and Borrower shall
prosecute the construction of the New Improvements with diligence and
continuity, in a good and workmanlike manner, in accordance with sound building
and engineering practices, all applicable Laws and governmental requirements
and the Loan Documents and in substantial accordance with the Plans. Borrower
shall not permit cessation of work for a period in excess of twenty one (21)
days (whether or not consecutive), except for Excusable Delays. Borrower shall
complete construction of the New Improvements free and clear of all liens
(except liens created by the Loan Documents and liens being contested in
accordance with the requirements of Section 2.16 of this Agreement), and
shall obtain a certificate of occupancy and all other permits, licenses and
approvals from all applicable governmental authorities required for the
occupancy, use and operation of the New Improvements for hotel and extended
stay apartment purposes, office and retail uses and related ancillary uses, in
each case satisfactory to Administrative Agent in its good faith business
judgment, on or before the Completion Date. Borrower shall promptly correct (a)
any material defect in the New Improvements, (b) any material departure from
the Plans, Law or governmental requirements, or (c) any encroachment by any New
Improvements or structure on any building setback line, easement, property line
or restricted area (unless such encroachment has been approved in writing by
Administrative Agent), except for existing encroachments shown on the Survey.


 


2.2           Plans and Changes. No construction
shall be undertaken on the Land except as shown in the Plans. Borrower assumes
full responsibility for the compliance of the Plans and the Property with all
Laws and sound building and engineering practices. No plans or specifications,
or any changes thereto, shall be included as part of the Plans until approved
by Administrative Agent, Construction Consultant, all applicable governmental
authorities, and all other parties required under the Loan Documents. Without
Administrative Agent’s prior written consent, Borrower shall not change or
modify the Plans, agree to any change order, or allow any extras to the General
Contractor or any other contractor or any subcontractor, except  that
Borrower may make Permitted Changes, if: (a) Borrower notifies Administrative
Agent in writing of the change or extra with appropriate supporting
documentation and information; (b) Borrower obtains the approval of the
applicable General Contractor, subcontractor, Borrower’s architect and all
sureties; (c) the structural integrity, quality and standard of workmanship of
the New Improvements is not impaired by such change or extra; (d) no
substantial change in architectural appearance is effected by such change or
extra; (e) no default in any obligation to any person or violation of any Law
or governmental requirement would result from such change or extra; (f)
Borrower complies with Section 1.5 of this Agreement to cover any excess
cost resulting from the change or extra; (g) completion of the New Improvements
by the Completion Date will not be affected; and (h) reallocations from the
Contingency Line Item of the Budget required to pay for such Permitted Changes
shall not exceed the Approved Contingency Limit. Administrative Agent shall not
be obligated to review a proposed change unless it has received all documents
necessary to review such change, including the change order, cost estimates,
plans and specifications. In addition, Administrative Agent may also require
evidence that all required approvals other than that of Administrative Agent
have been obtained.


 


2.3           Contracts. Without Administrative
Agent’s prior written approval (which approval shall be given or withheld in
Administrative Agent’s good faith business judgment within ten days


 


CONSTRUCTION LOAN AGREEMENT - Page 23


 

















 


after written request from Borrower) as to parties, terms, and all
other matters, Borrower shall not (a) enter into any Material Contract, (b)
enter into any management, leasing, maintenance or other contract pertaining to
the Property not described in clause (a) that is not unconditionally terminable
by Borrower or any successor owner without penalty or payment on not more than
thirty (30) days notice to the other party thereunder, or (c) modify, amend, or
terminate any such contracts. The foregoing provisions shall not prohibit Hotel
Lessee from executing contracts and agreements in compliance with the terms of
the Hotel Lease. All Material Contracts relating to the construction of the New
Improvements shall provide that all rights and liens of the General Contractor,
architect, engineer, supplier, surveyor or other party are subordinate to
Lender’s rights and liens, shall require all subcontracts and purchase orders
to contain a provision subordinating the subcontractors’ and mechanics’ and
materialmen’s liens and any right to remove removable New Improvements to
Lender’s rights and liens, and shall provide that no change order shall be
effective without the prior written consent of Administrative Agent, except for
change orders which implement Permitted Changes. Borrower shall not default
under any contract, Borrower shall not permit any contract to terminate by
reason of any failure of Borrower to perform thereunder, and Borrower shall
promptly notify Administrative Agent of any default thereunder. Borrower will
deliver to Administrative Agent, upon request of Administrative Agent, the
names and addresses of all persons or entities with whom General Contractor has
contracted or intends to contract for the construction of the New Improvements
or for the furnishing of labor or materials therefor. Administrative Agent
confirms it has approved the Construction Contract, the Architectural Contract,
the Hotel Lease and the Existing Property Listing/Management Agreements,
irrespective of whether such contracts strictly comply with the requirements of
this Section 2.3.


 


2.4           Assignment of Contracts and Plans. As
additional security for the Obligations, Borrower hereby transfers and assigns
to Administrative Agent for the ratable benefit of Administrative Agent and
Lenders and grants a security interest in all of Borrower’s right, title and interest,
but not its liability, in, under, and to all construction, architectural and
design contracts, and the Plans, and agrees that all of the same are covered by
the security agreement provisions of the Deed of Trust. Borrower agrees to use
its best efforts to deliver to Administrative Agent from time to time upon
Administrative Agent’s request such consents to the foregoing assignment from
parties contracting with Borrower as Administrative Agent may require in its
good faith business judgment. Neither this assignment nor any action by
Administrative Agent or Lenders shall constitute an assumption by
Administrative Agent or Lenders of any obligation under any contract or with
respect to the Plans, Borrower hereby agrees to perform all of its obligations under
any contract, and Borrower shall continue to be liable for all obligations of
Borrower with respect thereto. Administrative Agent shall have the right at any
time (but shall have no obligation) to take in its name or in the name of
Borrower such action as Administrative Agent may determine, in its good faith
business judgment, to be necessary to cure any default under any contract or
with respect to the Plans or to protect the rights of Borrower, Administrative
Agent or Lenders with respect thereto. Borrower irrevocably constitutes and
appoints Administrative Agent as Borrower’s attorney-in-fact, which power of
attorney is coupled with an interest and irrevocable, to enforce in Borrower’s
name or in Administrative Agent’s and Lender’s name all rights of Borrower
under any contract or with respect to the Plans. Administrative Agent shall
incur no liability if any action so taken by it or on its behalf shall prove to
be inadequate or invalid. Borrower indemnifies and holds Administrative Agent
and Lenders harmless against and from any loss, cost, liability or expense
(including, but not limited to, consultants’ fees and expenses and attorneys’
fees and expenses) incurred in connection


 


CONSTRUCTION LOAN AGREEMENT - Page 24


 

















 


with Borrower’s failure to perform such contracts or any action taken
by Administrative Agent or Lenders, INCLUDING SUCH FAILURE
CONSTITUTING IN WHOLE OR PART ADMINISTRATIVE AGENT’S OR NONDEFAULTING LENDERS’
STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE
except to the extent such failure constitutes willful misconduct or gross
negligence on Administrative Agent’s or Defaulting Lenders’ part.
Administrative Agent agrees it shall not have the right to exercise its
appointment as Borrower’s attorney-in-fact except during a period in which a
Default has occurred and is continuing. Administrative Agent may use the Plans
for any purpose relating to the New Improvements. Borrower represents and
warrants to Administrative Agent and Lenders that the copy of any contract
furnished or to be furnished to Administrative Agent is or shall be, as the
case may be, a true and complete copy thereof, that the copies of the Plans
delivered to Administrative Agent are and shall be true and complete copies of
the Plans, that there have been no modifications thereof which are not fully
set forth in the copies delivered, and that Borrower’s interest therein is not
subject to any claim, setoff, or encumbrance.


 


2.5           Storage of Materials. Borrower shall cause all materials supplied for
or intended to be utilized in the construction of the New Improvements, but not
yet affixed to or incorporated into the New Improvements or the Land, to be
stored on the Land or at such other site as Administrative Agent may approve in
its good faith business judgment, in each case with adequate safeguards to
prevent loss, theft, damage or commingling with materials for other projects.


 


2.6           Construction Consultant. Administrative
Agent may retain the services of a Construction Consultant, whose duties may
include, among others, reviewing the Plans and any proposed changes to the
Plans, performing construction cost analyses, observing work in place and
reviewing Draw Requests. The duties of Construction Consultant run solely to
Administrative Agent for the benefit of the Lenders, and Construction
Consultant shall have no obligations or responsibilities whatsoever to
Borrower, Borrower’s architect, engineer, General Contractor or any of their
agents or employees. Unless prohibited by applicable Law, all fees, costs, and
expenses of Construction Consultant shall be paid by Borrower. Borrower shall
cooperate with Construction Consultant and will furnish to Construction
Consultant such information and other material as Construction Consultant
considers necessary or useful in performing its duties. Administrative Agent
will instruct Construction Consultant to deliver to Borrower copies of each
written report issued by Construction Consultant at the same time such report
is delivered to Administrative Agent.


 


2.7           Inspection. Administrative Agent and
its agents, including Construction Consultant, may enter upon the Property to
inspect the Property and any materials at any reasonable time, unless
Administrative Agent deems such inspection is of an emergency nature, in which
event Borrower shall provide Administrative Agent with immediate access to the
Property. Borrower will furnish to Administrative Agent and its agents,
including Construction Consultant, for inspection and copying, all Plans, shop
drawings, specifications, books and records, and other documents and
information that Administrative Agent may reasonably request from time to time.


 


2.8           Notice to Administrative Agent. Borrower
shall promptly within five (5) days after first learning of the occurrence of
any of the following events, notify Administrative Agent in writing thereof,
specifying in each case the action Borrower has taken or will take with respect
thereto:  (a) any violation of any Law or
governmental requirement; (b) any litigation, arbitration or


 


CONSTRUCTION LOAN AGREEMENT - Page 25


 

















 


governmental investigation or proceeding instituted or threatened in
writing against Borrower or any Guarantor or the Property asserting criminal
conduct or damages, penalties or claims in excess of $100,000 and any material
development therein; (c) any actual or threatened in writing condemnation of
any portion of the Property, any negotiations with respect to any such taking,
or any loss of or substantial damage to the Property; (d) any labor controversy
pending or threatened against Borrower, General Contractor, any other
contractor, and any material development in any labor controversy; (e) any
notice received by Borrower with respect to the cancellation, alteration or non-renewal
of any insurance coverage maintained with respect to the Property; (f) any
failure by Borrower or General Contractor or any other contractor,
subcontractor or supplier to perform any material obligation under any
construction contract, any event or condition which would permit termination of
a construction contract or suspension of work thereunder, or any notice given
by Borrower or General Contractor or any other contractor with respect to any
of the foregoing; (g) any lien filed against the Property or any stop notice
served on Borrower in connection with construction of the New Improvements; or
(h) any required permit, license, certificate or approval with respect to the
Property lapses or ceases to be in full force and effect.


 


2.9           Financial Statements. Borrower shall
deliver to Administrative Agent with sufficient copies for each Lender the
Financial Statements and other statements and information at the times and for
the periods described in Exhibit “B” and any other Loan Document.
Borrower will make all of its books, records and accounts available to
Administrative Agent and its representatives at the Property or at Borrower’s
office in Addison, Texas, upon request and will permit them to review and copy
the same. Borrower shall promptly notify Administrative Agent of any event or
condition that could reasonably be expected to have a Material Adverse Effect
in the financial condition of Borrower and, if known by Borrower, Guarantor, or
in the construction progress of the New Improvements. Administrative Agent
shall provide a copy of such Financial Statements to each Lender upon receipt.


 


2.10         Other Information. Borrower shall
furnish to Administrative Agent from time to time upon Administrative Agent’s
reasonable request (i) copies of any or all subcontracts entered into by
contractors or subcontractors relating to the construction of the New
Improvements and the names and addresses of all persons or entities with whom
Borrower or any contractor has contracted or intends to contract for the
construction of the New Improvements or the furnishing of labor or materials in
connection therewith; (ii) copies of any or all contracts, bills of sale,
statements, receipts or other documents under which Borrower claims title to
any materials, fixtures or articles of personal property incorporated or to be
incorporated into the New Improvements or subject to the lien of the Deed of
Trust; (iii) a list of all unpaid bills for labor and materials with respect to
construction of the New Improvements and copies of all invoices therefor; (iv)
budgets of Borrower and revisions thereof showing the estimated costs and
expenses to be incurred in connection with the completion of construction of
the New Improvements; (v) current or updated detailed project schedules or
construction schedules; and (vi) such other information relating to Borrower,
Guarantor, the New Improvements, the Property, the Loan, the construction of
the New Improvements or any security for the Loan that Administrative Agent may
request in its good faith business judgment.


 


2.11         Reports and Testing. Borrower shall (a)
upon the request of Administrative Agent, promptly deliver to Administrative
Agent copies of all reports, studies, inspections and tests made


 


CONSTRUCTION LOAN AGREEMENT - Page 26


 

















 


on the Land, the New Improvements or any materials to be incorporated
into the New Improvements that are in the control or possession of Borrower,
Guarantor or their Affiliates or agents; and (b) make such additional tests on
the Land, the New Improvements or any materials to be incorporated into the New
Improvements as Administrative Agent reasonably requires. Borrower shall
immediately notify Administrative Agent of any report, study, inspection or
test that indicates any adverse condition relating to the Land, the New
Improvements or any such materials.


 


2.12         Advertising by Lenders. Borrower has
caused to be erected (and will maintain through the date of completion of construction
of the New Improvements) on the Property an advertising sign approved by
Administrative Agent indicating that the construction financing for the
Property has been provided by Lenders.


 


2.13         Appraisal. Administrative Agent may
obtain from time to time, an appraisal of all or any part of the Property
prepared in accordance with written instructions from Administrative Agent by a
third-party appraiser engaged directly by Administrative Agent. Each such
appraiser and appraisal shall be satisfactory to Administrative Agent
(including satisfaction of applicable regulatory requirements). The cost of any
such appraisal shall be borne by Borrower if such appraisal is the first
appraisal in any calendar year and in all events if Administrative Agent
obtains such appraisal after the occurrence and during the continuation of a
Default, and such cost is due and payable by Borrower on demand and shall be
secured by the Loan Documents. Administrative Agent shall provide a copy of
such Appraisal to each Lender and Borrower upon receipt.


 


2.14         Payment of Withholding Taxes. Borrower
shall not use, or knowingly permit any contractor or subcontractor to use, any
portion of the proceeds of any Loan advance to pay the wages of employees
unless a portion of the proceeds or other funds are also used to make timely
payment to or deposit with (a) the United States of all amounts of tax required
to be deducted and withheld with respect to such wages under the Internal
Revenue Code, and (b) any state and/or local Tribunal or agency having
jurisdiction of all amounts of tax required to be deducted and withheld with
respect to such wages under any applicable state and/or local Laws.


 


2.15         ERISA and Prohibited Transaction Taxes.
As of the date hereof and throughout the term of this Loan Agreement, (a)
Borrower is not and will not be (i) an “employee benefit plan”, as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”); or (ii) a “plan” within the meaning of Section 4975(e) of the
Internal Revenue Code, as amended (the “Code”); (b) the assets of
Borrower do not and will not constitute “plan assets” within the meaning of the
United States Department of Labor Regulations set forth in 29 C.F.R.
§2510.3-101; (c) Borrower is not and will not be a “governmental plan” within
the meaning of Section 3(32) of ERISA; (d) transactions by or with Borrower are
not and will not be subject to state statutes applicable to Borrower regulating
investments of fiduciaries with respect to governmental plans; and (e) Borrower
shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Administrative Agent of any
of Lender’s rights under this Agreement, any Note or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA or Section 4975 of the Code. Borrower
further agrees to deliver to Administrative Agent such certifications or other
evidence of compliance with the provisions of this Section 2.15 as
Administrative Agent may from time to time request.


 


CONSTRUCTION LOAN AGREEMENT - Page 27


 

















 


2.16         Contest of Claims. Notwithstanding
anything other provision herein or in the Deed of Trust to the contrary,
Borrower may, to the extent and in the manner permitted by applicable Laws,
contest the payment of any claim for payment for work or any tax, assessment or
other governmental charge against the Property, and the failure of Borrower to
pay the contested claim pending such contest shall not be or become a Default,
if (a) Borrower has notified Administrative Agent of Borrower’s intent to
contest such payment at least seven (7) days prior to commencing the contest
(unless such notice would cause a delay that might detrimentally affect the
right of Borrower to so contest, in which case Borrower must furnish
Administrative Agent with such advance notice of intent to contest as is
possible under the circumstances); (b) Borrower has made any deposit or payment
under protest, or posted security, with any applicable Tribunal if, as and to
the extent required by applicable Laws; (c) 
unless Borrower has complied with clause (b) preceding or if Borrower
has complied with clause (b) preceding and Administrative Agent has determined
that compliance with clause (b) does not, in Administrative Agent’s good faith
business judgment, protect Lenders’ interests, Borrower has furnished to
Administrative Agent a cash deposit satisfactory to Administrative Agent, or an
indemnity bond satisfactory to Administrative Agent with a surety satisfactory
to Administrative Agent, in an amount satisfactory to Administrative Agent (or
in the statutory amount, in the case of bond authorized by statute), to assure payment
of the matters under contest and to prevent any sale or forfeiture of any part
of the Property, and in the case of a claim for work which does or could result
in a lien against the Property, Borrower has provided (i) to the extent
required by Administrative Agent and available under applicable Laws, a bond
which under applicable Laws releases the lien from the Property encumbered by
such lien, and (ii) such security, assurances and other items, if any, as the
Title Company may require to insure around the lien; (d) Borrower diligently
and in good faith contests the same by appropriate legal proceedings which
shall operate to prevent the enforcement or collection of the same and the sale
of any part of the Property to satisfy the same; (e) Borrower promptly upon
final determination thereof pays the amount of any such claim so determined,
together with all costs, interest and penalties payable in connection therewith
(and to the extent Borrower has made a cash deposit with Administrative Agent
pursuant to clause (c) preceding, such deposit shall be made available to
Borrower to pay the amount of such claim and shall release the excess, if any,
to Borrower upon settlement and release of the claim); (f) the failure to pay
the claim does not constitute a default under any other deed of trust, mortgage
or security interest covering or affecting any part of the Property, and does
not subject Administrative Agent or any Lender to any civil or criminal
liability or to any damages or expense; and (g) the aggregate amount of all
claims being contested shall not exceed five percent (5%) of the Aggregate
Commitments. Notwithstanding the foregoing, Borrower shall immediately upon
request of Administrative Agent pay (and if Borrower shall fail so to do,
Administrative Agent may, but shall not be required to, pay or cause to be
discharged or bonded against) any such claim notwithstanding such contest if,
in the reasonable opinion of Administrative Agent, the Property is in jeopardy
or in danger of being forfeited or foreclosed. Administrative Agent may pay
over any such cash deposit or part thereof to the claimant entitled thereto at
any time when, in the judgment of Administrative Agent, the entitlement of such
claimant is established. Borrower shall not be required to comply with the
requirements set forth above in this Section 2.16 for any claim made
that is covered by Borrower’s liability insurance if the total amount of such
claim is less than the amount of coverage under such policy that is available
to satisfy such claim, the insurer has not denied liability under its policy
for such claim and the insurer has undertaken to defend such claim without any
reservation of rights.


 


CONSTRUCTION LOAN AGREEMENT - Page 28


 

















 


2.17         Property Management and Franchises.
There is no property management, consulting, franchise or license agreement or
other similar contract or agreement (each a “Hotel Agreement”) in effect
that relates to the Property, except the Existing Property Listing/Management
Agreements. Borrower will not enter into any other Hotel Agreement of any kind
or character unless and until (i) Administrative Agent approves the form and
substance of such Hotel Agreement, and (ii) the parties to such Hotel Agreement
enter into a collateral assignment and agreement with Administrative Agent that
provides, among other things, that such parties consent to the collateral
assignment of such Hotel Agreement to Administrative Agent as collateral for
the Loan, agree to subordinate their respective rights (including rights to any
fees or other payments) to the Loan Documents, and grant to Administrative
Agent the right to terminate such Hotel Agreement upon notice given at any time
after a Default has occurred. The form and substance of such collateral
assignment and agreement shall be satisfactory to Administrative Agent in its
good faith business judgment.


 


2.18         Single Purpose Entity/Separateness.
Borrower does not own and will not own any asset or property other than (a) the
Property, and (b) incidental personal property necessary for the financing,
development, ownership, management and operation of the Property. Borrower will
not engage in any business other than the development, ownership, management
and operation of the Property. Borrower has done or caused to be done and will
do all things necessary to observe organizational formalities and preserve its
existence, and Borrower will not, nor will Borrower permit, any of its members
to, amend, modify or otherwise change the operating agreement, articles of
organization or other organizational documents of Borrower (other than in a
ministerial fashion) without the prior written consent of Administrative Agent,
except to reflect transfers of interests in Borrower and its members that are
permitted by the Loan Documents. Borrower will maintain all of its books,
records, financial statements and bank accounts separate from those of its
Affiliates and any member(to the maximum extent permissible under GAAP) and, to
the extent required by applicable Laws, Borrower will file its own tax returns.
Borrower shall maintain its books, records, resolutions and agreements as
official records. Borrower will be, and at all times will hold itself out to
the public as a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower or any member), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its Affiliates as
a division or part of the other and shall maintain and utilize separate
stationery, invoices and checks. Borrower will not commingle the funds and
other assets of Borrower with those of any Affiliate or member, or any
Affiliate of any member, or any other person.


 


2.19         Reserve Fund.


 


(a)           Borrower acknowledges
that the Loan and the Condominium Loan are and will be cross-defaulted and
cross-collateralized. If the Condominium Loan is repaid in full at any time
before the Loan is repaid in full and the obligations of the Lenders under this
Agreement are terminated, then Borrower shall deliver to Administrative Agent
Borrower’s NOI Certificate, setting forth the NOI for the Property for the
twelve (12) full calendar months immediately preceding the date of repayment of
the Condominium Loan. If the NOI for the Property, verified by Administrative
Agent’s NOI Confirmation Letter after receipt of Borrower’s NOI Certificate,
based on the twelve (12) full calendar months immediately preceding the date of
repayment of the Condominium Loan, is less than the 1.35xDSC Performance
Threshold based on same twelve (12) calendar month period, then Borrower shall
establish (or shall cause Condominium Borrower to


 


CONSTRUCTION LOAN AGREEMENT - Page 29


 

















 


establish)
with Administrative Agent a deposit account in the name of Condominium
Borrower, which deposit account and all instruments, documents and other
writings evidencing the same, and all sums now or at any time hereafter on
deposit therein and all sums due or to become due thereon, and all extensions
or renewals thereof (such account and any extensions or renewals thereof and
sums deposited therein being hereinafter called the “Reserve Fund Account”)
shall be assigned by Condominium Borrower to Administrative Agent, for the
ratable benefit of the Lenders, as additional collateral for the Obligations.
Thereafter, all Net Sales Proceeds (as defined in the Condominium Loan
Agreement) generated by the sale of the Units shall be delivered by Condominium
Borrower to Administrative Agent and deposited by Administrative Agent in the
Reserve Fund Account until such time as Borrower and Condominium Borrower are
no longer required to deliver such Net Sales Proceeds to Administrative Agent
pursuant to paragraph (c) below. Borrower shall have the right to prepay the
Loan in accordance with Section 1.8 hereof in order to satisfy the
1.35xDSC Performance Threshold.


 


(b)           Borrower grants to
Administrative Agent, on behalf of the Lenders, a security interest in the
Reserve Fund Account and all such deposited funds hereafter deposited to such
deposit account, and any proceeds thereof, as security for the Obligations.
Such security interest shall be governed by the Uniform Commercial Code of the
State of Texas and Administrative Agent shall have available to it all of the
rights and remedies available to a secured party thereunder. Borrower hereby
constitutes and appoints Administrative Agent and any officer or agent of
Administrative Agent its true and lawful attorneys-in-fact with full power of
substitution to do any and every act that Borrower might do on its own behalf
to fulfill the terms of this Section 2.19. To the extent permitted by
applicable law, Borrower hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. It is understood and agreed that this
power of attorney, which shall be deemed to be a power coupled with an
interest, cannot be revoked. Borrower agrees that Condominium Borrower shall
include all interest and earnings on any funds in the Reserve Fund Account as
income of Condominium Borrower (and, if Condominium Borrower is a pass-through
entity, the income of its members), and shall be the owner of all funds on
deposit in the Reserve Fund Account for federal and applicable state and local
tax purposes. Administrative Agent shall have the exclusive right to manage and
control all funds in the Reserve Fund Account, but Administrative Agent shall
have no fiduciary duty with respect to such funds.


 


(c)           All funds on deposit
from time to time in the Reserve Fund Account (collectively, referred to
herein, as the “Reserve Funds”) shall be held and disbursed by
Administrative Agent in accordance with this Agreement. Commencing on the first
day of the first calendar quarter following the repayment of the Condominium
Loan and the establishment of the Reserve Funds and continuing on the first day
of each calendar quarter thereafter (i.e., each January, April, July and
October 1st during each calendar year is referred to herein, as a “Test
Date”), Administrative Agent shall verify the NOI for the Property, after
receipt of Borrower’s NOI Certificate. If, as of any Test Date, the NOI for the
Property, based on the most recent twelve (12) full calendar months, is


 


(i)            equal to or greater
than the 1.35xDSC Performance Threshold based on same twelve (12) calendar
month period, then (1) Administrative Agent shall disburse to Condominium
Borrower the Excess Reserve Funds (as defined below) then on deposit in the
Reserve Fund Account, and (2) Borrower and Condominium Borrower shall no longer
be required to deposit Net Sales Proceeds into the Reserve Fund Account; or


 


CONSTRUCTION LOAN AGREEMENT - Page 30


 

















 


(ii)           less than the 1.35xDSC
Performance Threshold based on same twelve (12) calendar month period, then (i)
Administrative Agent shall continue to hold all funds on deposit in the Reserve
Fund Account, and (ii) Borrower and Condominium Borrower shall continue to make
deposits of Net Sales Proceeds in the Reserve Fund Account.


 


If, as of any Test Date, the NOI for the Property, based upon the most
recent twelve (12) calendar months, equals or exceeds the 1.35xDSC Performance
Threshold (assuming, for this purpose no adjustment to the Deemed Principal
Balance based upon the balance of funds on deposit in the Reserve Fund Account)
based upon the same twelve (12) calendar month period, then (1) Administrative
Agent shall disburse to Condominium Borrower the Reserve Funds then on deposit
in the Reserve Fund Account, and (ii) Borrower and Condominium Borrower shall
no longer be required to make deposits of Net Sales Proceeds in the Reserve
Fund Account and Administrative Agent shall execute and deliver to Condominium
Borrower partial releases with respect to each Unit thereafter sold by
Condominium Borrower; provided that if a Default occurs and is continuing under
the Loan Documents, Administrative Agent may condition the delivery of such
partial release with respect to any Unit sold upon receipt by Administrative
Agent of 100% of the Net Sales Proceeds generated by the sale of such Unit. In
any event, upon repayment of the Obligations in full and termination of all
Swap Transactions, the Reserve Fund Account and the lien and security interest
of Administrative Agent in and to the Reserve Fund Account shall be released by
Administrative Agent. For purposes of this Agreement, the term “Excess
Reserve Funds” means an amount, as reasonably determined by Administrative
Agent, to be the difference between (A) the balance of Reserve Funds, if any,
in the Reserve Fund Account, and (B) the minimum amount of Reserve Funds, if
any, in the Reserve Fund Account which, if applied to adjust the Deemed
Principal Balance, will cause the NOI to equal the 1.35xDSC Performance
Threshold.


 


2.20         Historic Tax Credits. Borrower has
advised Administrative Agent and the Lenders that Borrower has applied with the
Missouri Historic Preservation Tax Credit Program (the “Tax Credit Program”)
for historic tax credits in connection with Borrower’s proposed construction,
renovation and use of the Property pursuant to the Tax Credit Program. Borrower
will comply, or cause others to comply, with the requirements of the State of
Missouri to permit the issuance of the historic tax credits. Borrower will
assign its interest in the historic tax credits pursuant to the Deed of Trust. All
tax credits shall be sold by Borrower and the proceeds of such sale applied by
Borrower to the repayment of the Loan and the Condominium Loan pursuant to a
schedule to be approved by the Agents.


 


2.21         Hotel Lease. Borrower will comply with
all of its duties and obligations under the Hotel Lease and not permit a
default by Borrower to occur and continue (beyond applicable grace or cure
periods) under the Hotel Lease. Without the prior written consent of the
Agents, Borrower will not modify, extend or in any way alter the terms of the
Hotel Lease or any of the Hotel Agreements or cancel, release, terminate or
surrender the Hotel Lease, or waive, excuse, condone or in any way release or
discharge the Hotel Lessee of or from the obligations, covenants, conditions
and agreements by Hotel Lessee to be done and performed under the Hotel Lease. Borrower
shall not permit Hotel Lessee to materially change the use and operation of the
Project (as contemplated by Section 4.9 of the Hotel Lease) without the prior
written consent of the Agents. All rental payments payable by Hotel Lessee to
Borrower shall be applied by Borrower to the payment of interest on the Loan and
any excess amount remaining after payment of interest may, so long as no


 


CONSTRUCTION LOAN AGREEMENT - Page 31


 

















 


Default exists, be used and distributed by Borrower to its members. After
the occurrence of a Default hereunder (which is not cured within any applicable
notice, grace and/or cure period), Borrower shall make no distributions of any
rental or other revenue or income of the Project to any of its members or
owners until such Default has been cured or the Loan and all interest accrued
thereon and other amounts due to Agents and the Lenders hereunder have been
paid in full.


 


2.22         Representations and Covenants Regarding
Master Condominium. Borrower hereby represents, warrants and covenants with
Administrative Agent that (i) the Master Condominium Declaration and the
Condominium created thereby complies with all of the requirements of the
Condominium Act; (ii) the Master Condominium Association has been formed as a
non-profit corporation under the laws of the State of Missouri, the board of
directors appointed in accordance with the requirements of the Master
Condominium Declaration, and all officers contemplated by the Master
Condominium Declaration and the Condominium Corporate Documents shall have been
appointed or elected, as the case may be; (iii) Borrower and Condominium
Borrower shall be the sole declarants under the Master Condominium Declaration
and no rights or interests of the declarants shall have been assigned or
encumbered except pursuant to the Loan Documents and none will be without the
prior written consent of Administrative Agent; (iv) there shall be no
agreements to which Borrower is a party relating to the Condominium other than
the Master Condominium Declaration, the Condominium Corporate Documents for the
Master Condominium Association, rules and regulations of the Master Condominium
Association, the Permitted Encumbrances, and other agreements executed in the
ordinary course of business of the ownership, operation and maintenance of the
Condominium created by the Master Condominium Declaration that have been
approved by Administrative Agent; and (v) Borrower has delivered to
Administrative Agent true and correct copies of the Master Condominium
Declaration and Condominium Corporate Documents. Borrower will not amend or
supplement in any material respect or consent to any material amendment or
material supplement of the Master Condominium Declaration or the Condominium
Corporate Documents without the prior approval of Agents, which approval shall
not be unreasonably withheld or delayed. Borrower shall (i) at all times
exercise its rights and powers as declarant and as an owner of the
Hotel/Corporate Units in accordance with the Master Condominium Declaration and
the Condominium Act; and (ii) use reasonable efforts to cause the officers and
directors of the Master Condominium Association appointed by Borrower or any
principal or Affiliate of Borrower to exercise their rights and powers in
accordance with the Condominium Act and consistent with their fiduciary duties
to the owners of the Master Residential Condominium Units and the
Hotel/Corporate Units.


 


ARTICLE 3– REPRESENTATIONS AND WARRANTIES


 


To induce
Lenders to make the Loan, Borrower hereby represents and warrants to
Administrative Agent and Lenders that except as otherwise disclosed to
Administrative Agent in writing (a) to the best of Borrower’s knowledge after
reasonable inquiry and investigation, Borrower has complied with any and all
Laws and regulations concerning its organization, existence and the transaction
of its business, and has the right and power to own the Land, and to develop
the New Improvements as contemplated in this Agreement and the other Loan
Documents; (b) Borrower is authorized to execute, deliver and perform all of
its obligations under the Loan Documents; (c) the Loan Documents are valid and
binding obligations of Borrower; (d) Borrower is not in violation of any Law,
regulation or ordinance, or any order of any court or Tribunal, and no
provision of the


 


CONSTRUCTION LOAN AGREEMENT - Page 32


 

















 


Loan Documents
violates any Law applicable to Borrower, any covenants or restrictions
affecting the Property, any order of any court or Tribunal or any contract or
agreement binding on Borrower or the Property; (e) to the extent required by
applicable Law, Borrower and Guarantor have filed all necessary tax returns and
reports and have paid all taxes and governmental charges thereby shown to be
owing; (f) the Plans are complete in all material respects, contain all
necessary detail and are adequate for the construction of the New Improvements,
are satisfactory to Borrower, have been approved by all applicable governmental
authorities, have been accepted by General Contractor, and comply with the Loan
Documents and all applicable Laws and, except as “insured around” or endorsed
over in the Title Policy, restrictive covenants; (g) the Land is not part of a
larger tract of land owned by Borrower, is not otherwise included under any
unity of title or similar covenant with other lands not encumbered by the Deed
of Trust, and constitutes (or will, upon processing by the applicable taxing
authority of condominiums established by the Master Condominium Declaration)
separate tax lot(s) with a separate tax assessment(s) for the Land and
Improvements, independent of those for any other lands or improvements; (h) the
Land and Improvements comply with all Laws and governmental requirements,
including all subdivision and platting requirements, without reliance on any
adjoining or neighboring property; (i) the Plans do, and the New Improvements
when constructed will, comply with all legal requirements regarding access and
facilities for handicapped or disabled persons; (j) Borrower has not directly
or indirectly conveyed, assigned or otherwise disposed of or transferred (or
agreed to do so) any development rights, air rights or other similar rights,
privileges or attributes with respect to the Property, including those arising
under any zoning or land use ordinance or other Law or governmental
requirement; (k) to the best knowledge of Borrower, the construction schedule
for the Project is realistic and the Completion Date is a reasonable estimate
of the time required to complete the Project; (l) the Financial Statements
delivered to Administrative Agent are true, correct, and complete in all
material respects, and there has been no event or condition that could
reasonably be expected to have a Material Adverse Effect in Borrower’s or
Guarantor’s financial condition from the financial condition of Borrower or
Guarantor (as the case may be) indicated in such Financial Statements; (m) all
utility services necessary for the operation of the Improvements as a hotel are
available in adequate capacities to service the Improvements, including
electric and natural gas facilities, telephone service, water supply, storm and
sanitary sewer facilities; (n) except as otherwise provided for in the Loan
Documents, Borrower has made no contract or arrangement of any kind the
performance of which by the other party thereto would give rise to a lien on
the Property; (o) the current and anticipated use of the Property complies with
all applicable zoning ordinances, regulations and restrictive covenants
affecting the Land without the existence of any variance, non-complying use,
nonconforming use or other special exception, all use restrictions of any
Tribunal having jurisdiction have been satisfied, and no violation of any Law
or regulation exists with respect thereto; (p) attached hereto as Exhibit “I”
is a list of all bonds required in connection with completion of the New
Improvements, and to the best of Borrower’s knowledge, no other bonds or other
security are currently required or will be required prior to completion of the
New Improvements; and (q) there is no franchise or license agreement in effect
with a hotel franchisor or licensor and there is no agreement or commitment
relating to any such franchise or license that will become effective or binding
on Borrower or the Property after the date hereof.


 


CONSTRUCTION LOAN AGREEMENT - Page 33


 

















 


ARTICLE 4— DEFAULT AND REMEDIES


 


4.1           Events of Default. The occurrence of
any one of the following shall be a default under this Agreement (“Default”):


 


(a)           Failure to Pay
Indebtedness. (i) Any principal and/or interest on the Loan is not paid on
the Maturity Date, or in the case of any of payment of principal and/or
interest on the Loan is not paid when due on a date other than the Maturity
Date, such payment is not made within five (5) days after the same became due,
whether by acceleration or otherwise; or (ii) any other payment of the
Indebtedness is not paid on or before the date specified for payment in the
Loan Documents or, if no date is specified for payment in the Loan Documents or
such payment is due on demand, as the case may be, within ten (10) days after
written notice or demand from Administrative Agent.


 


(b)           Nonperformance of
Covenants. Any covenant, agreement or condition herein (other than
covenants to pay any of the Indebtedness) is not fully and timely performed,
observed or kept, and such failure is not cured within the applicable notice or
grace period (if any) provided for herein or in any other Loan Document or, if
this Agreement or such Loan Document does not provide for such a notice or
grace period, within thirty (30) days after written notice and demand by
Administrative Agent for the performance of such covenant, agreement or
condition (or if such failure cannot be cured within that original 30-day
period and Borrower delivers written notice to Administrative Agent promptly
within that original 30-day period of Borrower’s intention and proposed steps
to cure the failure with due diligence, promptly institutes curative action
within that original 30-day period and diligently pursues same, Borrower shall
have such additional period of time, not exceeding sixty (60) days next
following the end of the original 30-day period, as shall be necessary to
effect the cure); provided, however, that there shall be no
obligation of Administrative Agent to give any such notice and no right of
Borrower to cure under this paragraph if the event or condition is addressed in
any other paragraph of this Section 4.1 or is caused by the bad
faith or intentional act or omission of Borrower in contravention of any
material duty or obligation of Borrower under this Agreement and the other Loan
Documents, including but not limited to the failure of Borrower to keep the
Property free and clear of consensual liens, security interests and assignments
not approved in writing in advance by Administrative Agent.


 


(c)           Representations.
Any statement, representation or warranty in any of the Loan Documents, or in
any Financial Statement or any other writing heretofore or hereafter delivered
to Administrative Agent in connection with the Indebtedness or Obligations is
false, fraudulent, misleading or erroneous in any material respect on the date
or on the date as of which such statement, representation or warranty is made
or deemed made, if such notice or grace period is not provided for, within
fifteen (15) days after written notice and demand by Administrative Agent to
Borrower objecting to such statement, representation or warranty not being true
and correct (or if such failure cannot be cured within that original 15-day
period and Borrower delivers written notice to Administrative Agent promptly
within that original 15-day period of Borrower’s intention and proposed steps
to cure the failure with due diligence, promptly institutes curative action
within that original 15-day period and diligently pursues same, Borrower shall
have such additional period of time, not exceeding forty-five (45) days next
following the end of the original fifteen (15) day period, as shall be
necessary to effect the cure); provided, however, that there
shall


 


CONSTRUCTION LOAN AGREEMENT - Page 34


 

















 


be no
obligation of Administrative Agent to give such notice in the case of, and no
right of Borrower to cure, any fraudulent or knowingly false representation to
Administrative Agent.


 


(d)           Completion Date.
The failure of Borrower to complete the New Improvements on or before the
Completion Date, or the determination by Administrative Agent at any time, in
its good faith business judgment, that Borrower will be unable to complete the
New Improvements on or before the Completion Date (as extended for Excusable
Delays).


 


(e)           Injunction. Any
court of competent jurisdiction enjoins or prohibits Borrower or any of the
Lenders from performing this Agreement or any of the other Loan Documents, and
such injunction or order is not vacated within ninety (90) days after the
granting thereof (unless such injunction results in the cessation of work on
the Property for a period that would cause Borrower to exceed the time period
for cessation of the work under Section 2.1 above).


 


(f)            Construction
Contract. The failure of Borrower to deliver to Administrative Agent or
Administrative Agent to approve a stipulated sum or cost of work plus fee with
a guaranteed maximum price construction contract with General Contractor
providing for construction of the New Improvements for an amount that does not
exceed the amount allocated therefor in the Budget and completion of the New
Improvements on or before the Completion Date.


 


(g)           Hotel Lease. A
default occurs under the Hotel Lease (after giving effect to notice and cure
periods set forth in the Hotel Lease).


 


(h)           Bankruptcy or
Insolvency. Borrower, BH Member, or Guarantor:


 


(i)            (A) Executes an
assignment for the benefit of creditors, or takes any action in furtherance
thereof; or (B) admits in writing its inability to pay, or fails to pay,
its debts generally as they become due; or (C) as a debtor, files a petition,
case, proceeding or other action pursuant to, or voluntarily seeks the benefit
or benefits of any Debtor Relief Laws, or takes any action in furtherance
thereof; or (D) seeks the appointment of a receiver, trustee, custodian or
liquidator of the Property or any part thereof or of any significant portion of
its other property; or


 


(ii)           Suffers the filing of a
petition, case, proceeding or other action against it as a debtor under any
Debtor Relief Laws or seeking appointment of a receiver, trustee, custodian or
liquidator of the Property or any part thereof or of any significant portion of
its other property, and (A) admits, acquiesces in or fails to contest
diligently the material allegations thereof, or (B) the petition, case,
proceeding or other action results in entry of any order for relief or order
granting relief sought against it, or (C) in a proceeding under the
Title 11 of the United States Code, the case is converted from one chapter
to another, or (D) fails to have the petition, case, proceeding or other
action permanently dismissed or discharged on or before the earlier of trial
thereon or sixty (60) days next following the date of its filing; or


 


(iii)          Conceals, removes, or
permits to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them, or makes or suffers a
transfer of any of its property which may be fraudulent under any bankruptcy,


 


CONSTRUCTION LOAN AGREEMENT - Page 35


 

















 


fraudulent conveyance or similar Law; or suffers or permits, while
insolvent, any creditor to obtain a lien (other than as described in
subparagraph (iv) below) upon any of its property through legal proceedings
which are not vacated and such lien discharged prior to enforcement of such
lien and in any event within sixty (60) days from the date thereof; or


 


(iv)          Fails to have discharged
within a period of thirty (30) days any attachment, sequestration, or similar
writ levied upon any of its property unless such attachment, sequestration or
similar writ is being contested in accordance with Section 2.16 herein;
or


 


(v)           Fails to pay within
thirty (30) days any final money judgment against it.


 


(i)            Transfer of the
Property. Any sale, lease, conveyance, assignment or transfer of all or any
part of the Property or any interest therein, whether by operation of law or
otherwise, except: (1) sales or transfers of items of the personal
property in the ordinary course of business which have become obsolete or worn
beyond practical use and which have been replaced by adequate substitutes,
owned by Borrower, having comparable quality and utility to the replaced items
when new; (2) rental of hotel guest rooms at the Property to transient guests
in the ordinary course of business and the rental of meeting rooms,
banquet halls and similar facilities on a non-recurring basis in the ordinary
course of business at the Property; (3) 
Approved Leases entered into in accordance with the terms of this
Agreement; or (4) transfers permitted in accordance with the terms of this
Agreement or the Deed of Trust, including subleases permitted to be executed by
Hotel Lessee pursuant to the terms of the Hotel Lease.


 


(j)            Transfer of
Ownership of Borrower or Guarantor. The sale, pledge, encumbrance,
assignment or transfer, voluntarily or involuntarily, of any interest in
Borrower, Guarantor or any member of any of the foregoing without the prior
written consent of the Required Lenders except for the following transfers,
which shall not require consent of Administrative
Agent or Required Lenders:  (1) transfers
of any membership interests in Payment Guarantor so long as Payment Guarantor
is controlled by or under common control with Behringer Harvard Holdings, LLC,
a Delaware limited liability company (and “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management of the policies of a Person, whether through the ownership of stock,
by contract, or otherwise, and “controlling” and “controlled” shall have
meanings correlative thereto), and (2) transfers of any membership interests in
Completion Guarantor so long as Completion Guarantor is controlled by or under
common control with James L. Smith or Marcia Smith-Niedringhaus (and “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management of the policies of a Person, whether through
the ownership of stock, by contract, or otherwise, and “controlling” and “controlled”
shall have meanings correlative thereto) and such transfer is not prohibited by
the terms of the Hotel Lease.


 


(k)           Grant of Easement,
Etc. Without the prior written consent of Administrative Agent (which
consent shall be given or withheld in Administrative Agent’s good faith
business judgment), Borrower grants any easement or dedication, or any
restriction, or otherwise encumbers the Property, or seeks or permits any
zoning reclassification or variance, unless such action is expressly permitted
by the Loan Documents.


 


CONSTRUCTION LOAN AGREEMENT - Page 36


 

















 


(l)            Abandonment. Borrower
abandons any or all of the Property.


 


(m)          Default Under Other
Lien. A default or event of default (after taking into consideration
applicable notice, grace and cure periods, if any) occurs under any lien,
security interest or assignment covering the Property or any part thereof
(without hereby implying Administrative Agent’s consent to any such lien,
security interest or assignment not created under the Loan Documents), or the
holder of any such lien, security interest or assignment declares a default or
institutes foreclosure or other proceedings for the enforcement of its remedies
thereunder.


 


(n)           Destruction. Borrower
fails to comply with the requirements of the Loan Documents applicable to a
casualty affecting the Property and such failure is cured within the period
provided for in subparagraph (b) of this Section 4.1.


 


(o)           Condemnation.
Borrower fails to comply with the requirements of the Loan Documents applicable
to eminent domain or condemnation affecting the Property and such failure is
cured within the period provided for in subparagraph (b) of this Section 4.1.


 


(p)           Liquidation, Etc.
The liquidation, termination, dissolution, merger, consolidation or failure to
maintain good standing in the State of Missouri (or in the case of an
individual, the death or legal incapacity) of Borrower or any person obligated
to pay any part of the Indebtedness.


 


(q)           Material Adverse
Effect. The occurrence of an event that, in Administrative Agent’s
reasonable opinion, has or will have a Material Adverse Effect, excluding:  (A) claims for mechanic’s or materialmen’s
liens or taxes against the Property which are being contested by Borrower in
accordance with the specific provisions of the Loan Documents allowing such
contest, (B) any suit or suits which are covered by insurance if the
insurer has agreed to defend such claims without reservation of rights and in
Administrative Agent’s opinion the coverage afforded by such insurance is
sufficient to satisfy the recovery being sought, or in the alternative, such
suits do not involve the Property and which seek recovery of amounts not
exceeding $250,000.00 for any one such suit or in the aggregate for all such
suits, which are being contested diligently and in good faith and for which
adequate reserves have been established, if appropriate in accordance with
generally accepted accounting principles, and (C) a material adverse change in
the financial condition of Guarantors unless Payment Guarantor is in compliance
with each of its financial covenants as set forth in the Guaranty and Payment
Guarantor so certifies to Administrative Agent within twenty (20) days after
written request from Administrative Agent. At least ten (10) days before
declaring a default under this paragraph (q), Administrative Agent shall notify
Borrower of its determination that an event covered by this paragraph (q) has
occurred and a description in reasonable detail of the basis for its
determination.


 


(r)            Enforceability;
Priority. Any Loan Document shall for any reason without Administrative
Agent’s specific written consent cease to be in full force and effect in all
material respects, or shall be declared null and void or unenforceable in whole
or in any material part, or the validity or enforceability thereof, in whole or
in any material part, shall be challenged or denied by any party thereto other
than Administrative Agent or the Trustee under the Deed of Trust; or the liens,
mortgages or security interests of Administrative Agent in any of the Property
become unenforceable in whole or in part, or cease to be of the priority herein
required, or the validity or


 


CONSTRUCTION LOAN AGREEMENT - Page 37


 

















 


enforceability
thereof, in whole or in material part, shall be challenged or denied by
Borrower or any person obligated to pay any part of the Indebtedness.


 


(s)           Guaranty. Any
Guarantor shall fail to timely comply with any covenant or obligation under its
Guaranty, including without limitation, the financial covenants of Payment
Guarantor, and such failure shall not be cured within five (5) Business Days
after the earlier of (i) the date on which Guarantor receives notice of such
failure to comply, or (ii) the date on which Payment Guarantor is required to
deliver the applicable Compliance Certificate that discloses such failure to
comply with its financial covenants.


 


(t)            Default
under Condominium Loan Documents. The occurrence of a Default under (and as
defined in) the Condominium Loan Agreement or event of default (however defined
in) any other Condominium Loan Document (after giving effect to any notice or
cure periods, if any).


 


4.2           Remedies. Upon a Default,
Administrative Agent may with the consent of, and shall at the direction of the
Required Lenders, without notice, exercise any and all rights and remedies
afforded by this Agreement, the other Loan Documents, Law, equity or otherwise,
including (a) declaring any and all Indebtedness immediately due and payable;
(b) reducing any claim to judgment; or (c) obtaining appointment of a receiver
(to which Borrower hereby consents) and/or judicial or nonjudicial foreclosure
under the Deed of Trust, provided, however, upon a Default,
Administrative Agent at its election may (but shall not be obligated to)
without the consent of and shall at the direction of the Required Lenders,
without notice, do any one or more of the following: (a) terminate Lenders’
Commitment to lend and any obligation to disburse any Borrower’s Deposit
hereunder; (b) in its own name on behalf of the Lenders or in the name of
Borrower, enter into possession of the Property, perform all work necessary to
complete construction of the New Improvements substantially in accordance with
the Plans (as modified as deemed necessary by Administrative Agent to complete
the New Improvements without materially upgrading the materials used, interior
finishes, etc. in a manner not contemplated by the Plans), the Loan Documents,
and all applicable Laws and restrictive covenants, and continue to employ
Borrower’s architect, engineer and any contractor pursuant to the applicable
contracts or otherwise; or (c) set-off and apply, to the extent thereof and to
the maximum extent permitted by Law, any and all deposits, funds, or assets at
any time held and any and all other indebtedness at any time owing by
Administrative Agent or any Lender to or for the credit or account of Borrower
against any Indebtedness. Further, L/C Issuer may, with the approval of
Administrative Agent on behalf of the Required Lenders, demand immediate
payment by Borrower of an amount equal to the aggregate amount of all
outstanding Letters of Credit to be held in a deposit account with
Administrative Agent to secure amounts due from Borrower under Letters of
Credit and when no Letters of Credit exist, the Loan.


 


Borrower
hereby appoints Administrative Agent as Borrower’s attorney-in-fact, which
power of attorney is irrevocable and coupled with an interest, with full power
of substitution if Administrative Agent so elects, to do any of the following
in Borrower’s name upon the occurrence and during the continuation of a
Default:  (i) use such sums as are
necessary, including any proceeds of the Loan and any Borrower’s Deposit, make
such changes or corrections in the Plans, and employ such architects,
engineers, and contractors as may be required, or as Lenders may otherwise
consider desirable, for the purpose of completing construction of the New
Improvements


 


CONSTRUCTION LOAN AGREEMENT - Page 38


 

















 


substantially
in accordance with the Plans (as modified as deemed necessary by Administrative
Agent in its good faith business judgment), the Loan Documents, and all
applicable Laws, governmental requirements and restrictive covenants; (ii)
execute all applications and certificates in the name of Borrower which may be
required for completion of construction of the New Improvements; (iii) endorse
the name of Borrower on any checks or drafts representing proceeds of any
insurance policies, or other checks or instruments payable to Borrower with
respect to the Property; (iv) do every act with respect to the construction of
the New Improvements that Borrower may do; (v) prosecute or defend any action
or proceeding incident to the Property, (vi) pay, settle, or compromise all
bills and claims so as to clear title to the Property; and (vii) take over and
use all or any part of the labor, materials, supplies and equipment contracted
for, owned by, or under the control of Borrower, whether or not previously
incorporated into the New Improvements. Any amounts expended by Administrative
Agent itself or on behalf of Lenders to construct or complete the New
Improvements or in connection with the exercise of its remedies herein shall be
deemed to have been advanced to Borrower hereunder as a demand obligation owing
by Borrower to Administrative Agent or Lenders as applicable and shall
constitute a portion of the Indebtedness, regardless of whether such amounts
exceed any limits for Indebtedness otherwise set forth herein. Neither
Administrative Agent nor Lenders shall have any liability to Borrower for the
sufficiency or adequacy of any such actions taken by Administrative Agent.


 


No delay or
omission of Administrative Agent or Lenders to exercise any right, power or
remedy accruing upon the happening of a Default shall impair any such right,
power or remedy or shall be construed to be a waiver of any such Default or any
acquiescence therein. No delay or omission on the part of Administrative Agent
or Lenders to exercise any option for acceleration of the maturity of the
Indebtedness, or for foreclosure of the Deed of Trust following any Default as
aforesaid, or any other option granted to Administrative Agent and Lenders hereunder
in any one or more instances, or the acceptances by Administrative Agent or
Lenders of any partial payment on account of the Indebtedness, shall constitute
a waiver of any such Default, and each such option shall remain continuously in
full force and effect. No remedy herein conferred upon or reserved to
Administrative Agent and/or Lenders is intended to be exclusive of any other
remedies provided for in any Note or any of the other Loan Documents, and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder, or under any Note or any of the other Loan
Documents, or now or hereafter existing at Law or in equity or by statute. Every
right, power and remedy given to Administrative Agent and Lenders by this
Agreement, any Note or any of the other Loan Documents shall be concurrent, and
may be pursued separately, successively or together against Borrower, or the
Property or any part thereof, or any personal property granted as security
under the Loan Documents, and every right, power and remedy given by this
Agreement, any Note or any of the other Loan Documents may be exercised from
time to time as often as may be deemed expedient by the Required Lenders.


 


Regardless of
how a Lender may treat payments received from the exercise of remedies under
the Loan Documents for the purpose of its own accounting, for the purpose of
computing the Indebtedness, payments shall be applied as elected by Lenders. No
application of payments will cure any Default, or prevent acceleration, or
continued acceleration, of amounts payable under the Loan Documents, or prevent
the exercise, or continued exercise, of rights or remedies of Administrative
Agent and Lenders hereunder or thereunder or at Law or in equity.


 


CONSTRUCTION LOAN AGREEMENT - Page 39


 

















 


ARTICLE 5– ADMINISTRATIVE AGENT


 


5.1           Appointment and Authorization of
Administrative Agent.


 


(a)           Each Lender hereby
irrevocably (subject to Section 5.9) appoints, designates and authorizes
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement
or any other Loan Document or otherwise exist against Administrative Agent. Without
limiting the generality of the foregoing sentence, the use of the term “agent”
herein and in the other Loan Documents with reference to Administrative Agent
is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.


 


(b)           L/C Issuer shall act on
behalf of Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and that L/C Issuer shall have all of the
benefits and immunities (i) provided to Administrative Agent in this
Article with respect to any acts taken or omissions suffered by L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and the applications and agreements for letters of credit pertaining to such
Letters of Credit as fully as if the term “Administrative Agent” as used in
this Article and in the definition of “Agent-Related Person” included L/C
Issuer with respect to such acts or omissions, and (ii) as additionally
provided in this Agreement with respect to L/C Issuer.


 


(c)           No individual Lender or group of Lenders or L/C Issuer  shall have any right to amend or waive, or consent to the
departure of any party from any provision of any Loan Document, or secure or
enforce the obligations of Borrower or any other party pursuant to the Loan
Documents, or otherwise. All such rights, on behalf of Administrative Agent, L/C Issuer or any Lender or Lenders, shall be held and
exercised solely by and at the option of Administrative Agent for the pro rata
benefit of the Lenders. Such rights, however, are subject to the rights of L/C
Issuer, a Lender or Lenders, as expressly set forth in this Agreement, to
approve matters or direct Administrative Agent to take or refrain from taking
action as set forth in this Agreement. Except as expressly otherwise
provided in this Agreement or the other Loan Documents, Administrative Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights, or taking or refraining
from taking any actions which Administrative Agent is expressly entitled to
exercise or take under this Agreement and the other Loan Documents, including,
without limitation, (i) the determination if and to what extent matters or
items subject to Administrative Agent’s satisfaction are acceptable or
otherwise within its discretion, (ii) the making of Administrative Agent
Advances, and (iii) the exercise of remedies pursuant to, but subject to, Article
4 or pursuant to any other Loan Document and any action so taken or not
taken shall be deemed consented to by Lenders.


 


CONSTRUCTION LOAN AGREEMENT - Page 40


 

















 


(d)           In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
Borrower or Guarantor, no individual Lender or group of Lenders or L/C Issuer
shall have the right, and Administrative Agent (irrespective of whether the
principal of any Loan or L/C Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Borrower) shall be
exclusively entitled and empowered on behalf of itself, L/C Issuer and the
Lenders, by intervention in such proceeding or otherwise:


 


(i)            to file and prove a
claim for the whole amount of the principal and interest owing and unpaid in
respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of Lenders and Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Lenders and Administrative Agent and their respective agents and counsel and
all other amounts due Lenders and Administrative Agent under Section 6.10
and Exhibit “J” allowed in such judicial proceeding; and


 


(ii)           to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same;


 


and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and
its agents and counsel, and any other amounts due Administrative Agent under Section
6.10.


 


Nothing
contained herein shall be deemed to authorize Administrative Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of Lenders except as approved by Required Lenders or
to authorize Administrative Agent to vote in respect of the claims of Lenders
except as approved by Required Lenders in any such proceeding.


 


5.2           Delegation of Duties. Administrative
Agent may execute any of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys-in-fact and shall be entitled
to advice of counsel and other consultant experts concerning all matters
pertaining to such duties. Administrative Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it selects
with reasonable care.


 


5.3           Liability of Administrative Agent. No
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of Lenders for any recital, statement, representation or warranty made by
Borrower or any subsidiary or Affiliate of Borrower, or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by


 


CONSTRUCTION LOAN AGREEMENT - Page 41


 

















 


Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of Borrower or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of Borrower, Guarantor or any of their Affiliates.


 


5.4           Reliance by Administrative Agent. Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper person or persons, and upon advice and statements of
legal counsel (including counsel to any party to the Loan Documents),
independent accountants and other experts selected by Administrative Agent.
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders or all Lenders
if required hereunder as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Lenders or such greater number of Lenders as may be expressly required
hereby in any instance, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders. In the absence of
written instructions from the Required Lenders or such greater number of
Lenders, as expressly required hereunder, Administrative Agent may take or not
take any action, at its discretion, unless this Agreement specifically requires
the consent of the Required Lenders or such greater number of Lenders.


 


5.5           Notice of Default. Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default, unless Administrative Agent shall have received written notice from a
Lender, or Borrower referring to this Agreement, describing such Default that
Administrative Agent determines will have a Material Adverse Effect. Administrative
Agent will notify Lenders of its receipt of any such notice. Administrative
Agent shall take such action with respect to such Default as may be requested
by the Required Lenders in accordance with Article 4; provided,
however, that unless and until Administrative Agent has received any such
request, Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default as it
shall deem advisable or in the best interest of Lenders.


 


5.6           Credit Decision; Disclosure of
Information by Administrative Agent.


 


(a)           Each Lender
acknowledges that none of Agent-Related Persons has made any representation or
warranty to it, and that no act by Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of Borrower and Guarantor, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lenders as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to Administrative Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such


 


CONSTRUCTION LOAN AGREEMENT - Page 42


 

















 


documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrower and Guarantor, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrower and Guarantor hereunder. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrower and Guarantor.


 


(b)           Administrative Agent
upon its receipt shall provide each Lender such notices, reports and other
documents expressly required to be furnished to Lenders by Administrative Agent
herein. To the extent not already available to a Lender, Administrative Agent
shall also provide the Lender and/or make available for the Lender’s inspection
during reasonable business hours and at the Lender’s expense, upon the Lender’s
written request therefor: (i) copies of the Loan Documents; (ii) such
information as is then in Administrative Agent’s possession in respect of the
current status of principal and interest payments and accruals in respect of
the Loan; (iii) copies of all current financial statements in respect of
Borrower, or any Guarantor or other person liable for payment or performance by
Borrower of any obligations under the Loan Documents, then in Administrative
Agent’s possession with respect to the Loan; and (iv) other current factual
information then in Administrative Agent’s possession with respect to the Loan
and bearing on the continuing creditworthiness of Borrower or any Guarantor, or
any of their respective Affiliates; provided  that nothing
contained in this Section shall impose any liability upon Administrative Agent
for its failure to provide a Lender any of such Loan Documents, information, or
financial statements, unless such failure constitutes willful misconduct or
gross negligence on Administrative Agent’s part; and provided further
that Administrative Agent shall not be obligated to provide any Lender with any
information in violation of Law or any contractual restrictions on the
disclosure thereof (provided such contractual restrictions shall not apply to
distributing to a Lender factual and financial information expressly required
to be provided herein). Except as set forth above, Administrative Agent shall
not have any duty or responsibility to provide any Lenders with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of Borrower or Guarantor or
any of their respective Affiliates which may come into the possession of any of
Agent-Related Persons.


 


5.7           Indemnification of Administrative Agent.
Whether or not the transactions contemplated hereby are consummated, Lenders
shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation of
Borrower to do so), pro rata, and hold harmless each Agent-Related Person from
and against any and all Indemnified Liabilities incurred by it, INCLUDING THOSE IN WHOLE OR PART ARISING FROM
ADMINISTRATIVE AGENT’S STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE
NEGLIGENCE; provided, however, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person’s own gross negligence or


 


CONSTRUCTION LOAN AGREEMENT - Page 43


 

















 


willful misconduct; provided, however, that no action
taken in accordance with the directions of the Required Lenders shall be deemed
to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, to the extent that Administrative
Agent is not reimbursed by or on behalf of Borrower, each Lender shall
reimburse Administrative Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including attorney fees) incurred by Administrative
Agent as described in Section 6.10. The undertaking in this Section
shall survive the payment of all Indebtedness hereunder and the resignation or
replacement of Administrative Agent.


 


5.8           Administrative Agent in Individual
Capacity. Administrative Agent, in its individual capacity, and its
Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
any party to the Loan Documents and their respective Affiliates as though
Administrative Agent were not Administrative Agent hereunder and without notice
to or consent of Lenders. Lenders acknowledge that Bank of America, N.A. is the
L/C Issuer, and Borrower and either of the Agents or its Affiliate have entered
or may enter into Swap Transactions. A portion of the Loan may be funded to
honor Borrower’s payment obligations under the terms of such Swap Transactions,
and Lenders shall have no right to share in any portion of such payments. Lenders
acknowledge that, pursuant to such activities, Bank of America, N.A. or
National City Bank or their Affiliates may receive information regarding any
party to the Loan Documents, or their respective Affiliates (including
information that may be subject to confidentiality obligations in favor of such
parties or such parties’ Affiliates) and acknowledge that Administrative Agent shall
be under no obligation to provide such information to them. With respect to its
Pro Rata Share of the Loan, Bank of America, N.A. and National City Bank shall
have the same rights and powers under this Agreement as any other Lenders and
may exercise such rights and powers as though it were not Administrative Agent,
L/C Issuer or party to Swap Transactions, and the terms “Lender” and “Lenders”
include both Bank of America, N.A. and National City Bank, each in its
individual capacity.


 


5.9           Successor Administrative Agent. Administrative
Agent may, and at the request of the Required Lenders as a result of
Administrative Agent’s gross negligence or willful misconduct in performing its
duties under this Agreement shall, resign as Administrative Agent and L/C Issuer upon 30 days’ notice to
Lenders ; provided any such resignation
by Bank of America, N.A. shall also constitute its resignation as L/C Issuer.
If Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among Lenders a successor administrative agent for Lenders,
which successor administrative agent shall be consented to by Borrower at all
times other than during the existence of a Default (which consent of Borrower
shall not be unreasonably withheld or delayed). If no successor administrative
agent is appointed prior to the effective date of the resignation of
Administrative Agent, Administrative Agent may appoint, after consulting with
Lenders and Borrower, a successor administrative agent from among Lenders. Upon
the acceptance of its appointment as successor administrative agent hereunder,
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and L/C Issuer and the respective
terms “Administrative Agent” and “L/C
Issuer” shall mean such successor administrative agent and L/C Issuer, and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent
shall be terminated and the retiring
L/C Issuer’s rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such


 


CONSTRUCTION LOAN AGREEMENT - Page 44


 

















 


retiring L/C Issuer or any other Lender,
other than the obligation of the successor L/C Issuer to issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or to make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C
Issuer with respect to such Letter of Credit. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article and other applicable Sections of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent and
L/C Issuer under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent and L/C Issuer by the date which is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative Agent’s
resignation shall nevertheless thereupon become effective and Lenders shall
perform all of the duties of Administrative Agent and L/C Issuer hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above. Notwithstanding the foregoing, however, Bank
of America, N.A. may not be removed as Administrative Agent at the request of
the Required Lenders unless Bank of America shall also simultaneously be
replaced and fully released as “L/C Issuer” hereunder pursuant to documentation
in form and substance reasonably satisfactory to Bank of America, N.A.


 


5.10         Releases; Acquisition and Transfers of
Collateral.


 


(a)           Lenders hereby
irrevocably authorize Administrative Agent to transfer or release any lien on,
or after foreclosure or other acquisition of title by Administrative Agent on
behalf of Lenders to transfer or sell, any Loan collateral (i) upon the
termination of the Commitments and payment and satisfaction in full of all
Indebtedness; (ii) constituting a release, transfer or sale of a lien or
property that is permitted under this Agreement or the other Loan Documents
(and Administrative Agent may rely conclusively on any such certificate,
without further inquiry); or (iii) after foreclosure or other acquisition of
title (1) for a purchase price of 90% of the value indicated in the most
recent appraisal of the collateral obtained by Administrative Agent made in
accordance with regulations governing Administrative Agent, less any reduction
indicated in the appraisal estimated by experts in such areas; or (2) if
approved by the Required Lenders.


 


(b)           If all or any portion
of the Loan collateral is acquired by foreclosure or by deed in lieu of
foreclosure, Administrative Agent shall take title to the collateral in its
name or by an Affiliate of Administrative Agent, but for the benefit of all
Lenders in their Pro Rata Shares on the date of the foreclosure sale or
recordation of the deed in lieu of foreclosure (the “Acquisition Date”). 
Administrative Agent and all Lenders hereby expressly waive and relinquish any
right of partition with respect to any collateral so acquired. After any
collateral is acquired, Administrative Agent shall appoint and retain one or
more Persons (individually and collectively, “Property Manager”)
experienced in the management, leasing, sale and/or dispositions of similar
properties. After consulting with the Property Manager, Administrative Agent
shall prepare a written plan for completion of construction (if required),
operation, management, improvement, maintenance, repair, sale and disposition
of the Loan collateral and a budget for the aforesaid, which may include a
reasonable management fee payable to Administrative Agent (the “Business
Plan”). Administrative Agent will deliver the Business Plan not later than
the sixtieth (60th) day after the Acquisition Date to each Lender with a
written request for approval of the Business Plan. If the Business Plan is
approved by the Required Lenders, Administrative Agent and the Property Manager
shall adhere to the Business Plan until a different Business Plan is approved
by the


 


CONSTRUCTION LOAN AGREEMENT - Page 45


 

















 


Required
Lenders. Administrative Agent may propose an amendment to the Business Plan as
it deems appropriate, which shall also be subject to Required Lender approval. If
the Business Plan (as may be amended) proposed by Administrative Agent is not
approved by the Required Lenders, (or if sixty (60) days have elapsed following
the Acquisition Date without a Business Plan being proposed by Administrative
Agent), any Lender may propose an alternative Business Plan, which
Administrative Agent shall submit to all Lenders for their approval. If an
alternative Business Plan is approved by the Required Lenders, Administrative
Agent may appoint one of the approving Lenders to implement the alternative
Business Plan. Notwithstanding any other provision of this Agreement, unless in
violation of an approved Business Plan or otherwise in an emergency situation,
Administrative Agent shall, subject to subsection (a) of this Section, have the
right but not the obligation to take any action in connection with the collateral
(including those with respect to property taxes, insurance premiums, completion
of construction, operation, management, improvement, maintenance, repair, sale
and disposition), or any portion thereof.


 


(c)           Upon request by
Administrative Agent or Borrower at any time, Lenders will confirm in writing
Administrative Agent’s authority to sell, transfer or release any such liens of
particular types or items of Loan collateral pursuant to this Section; provided, however,
that (i) Administrative Agent shall not be required to execute any document
necessary to evidence such release, transfer or sale on terms that, in
Administrative Agent’s opinion, would expose Administrative Agent to liability
or create any obligation or entail any consequence other than the transfer,
release or sale without recourse, representation or warranty, and (ii) such
transfer, release or sale shall not in any manner discharge, affect or impair
the obligations of Borrower other than those expressly being released.


 


(d)           If only two (2) Lenders
(other than L/C Issuer) exist at the time Administrative Agent receives a
purchase offer for Loan collateral for which one of the Lenders does not
consent within ten (10) Business Days after notification from Administrative
Agent, the consenting Lender may offer (“Purchase Offer”) to purchase
all of non-consenting Lender’s right, title and interest in the collateral for
a purchase price equal to non-consenting Lender’s Pro Rata Share of the net
proceeds anticipated from such sale of such collateral (as reasonably
determined by Administrative Agent, including the undiscounted face principal
amount of any purchase money obligation not payable at closing) (“Net
Proceeds”). Within ten (10) Business Days thereafter the non-consenting
Lender shall be deemed to have accepted such Purchase Offer unless the
non-consenting Lender notifies Administrative Agent that it elects to purchase
all of the consenting Lender’s right, title and interest in the collateral for
a purchase price payable by the non-consenting Lender in an amount equal to the
consenting Lender’s Pro Rata Share of the Net Proceeds. Any amount payable
hereunder by a Lender shall be due on the earlier to occur of the closing of
the sale of the collateral or 90 days after the Purchase Offer, regardless of
whether the collateral has been sold.


 


5.11         Application of Payments. Except as
otherwise provided below with respect to Defaulting Lenders, aggregate
principal and interest payments, payments for Indemnified Liabilities, and/or
foreclosure or sale of the collateral, and net operating income from the
collateral during any period it is owned by Administrative Agent on behalf of
the Lenders (“Payments”) shall be apportioned pro rata among Lenders and
payments of any fees (other than fees designated for Administrative Agent’s
separate account) shall, as applicable, be apportioned pro rata among Lenders. Notwithstanding
anything to the contrary in this Agreement, all Payments due and


 


CONSTRUCTION LOAN AGREEMENT - Page 46


 

















 


payable to Defaulting Lenders shall be due and payable to and be
apportioned pro rata among Administrative Agent and Electing Lenders. Such
apportionment shall be in the proportion that the Defaulting Lender Payment
Amounts paid by them bears to the total Defaulting Lender Payment Amounts of
such Defaulting Lender. Such apportionment shall be made until Administrative
Agent and Lenders have been paid in full for the Defaulting Lender Payment
Amounts. All pro rata Payments shall be remitted to Administrative Agent and
all such payments not constituting payment of specific fees, and all proceeds
of the Loan collateral received by Administrative Agent, shall be applied first,
to pay any fees, indemnities, costs, expenses (including those in Section
5.7) and reimbursements then due to Administrative Agent from Borrower; second,
to pay any fees, costs, expenses and reimbursements then due to Lenders from
Borrower; third, to pay pro rata interest and late charges due in
respect of the Indebtedness and Administrative Agent Advances; fourth,
to pay or prepay pro rata principal of and to secure any outstanding Letters of
Credit for the Indebtedness and Administrative Agent Advances; fifth, to
pay any indebtedness of Borrower owed to the Swap Bank under Swap Transactions;
and last, to Borrower, if required by law, or Lenders in Pro Rata Share
percentages equal to their percentages at the termination of the Aggregate
Commitments. Notwithstanding the above, subject to Section 3 of Exhibit
“J”, amounts used to Cash Collateralize the aggregate undrawn amount of
Letters of Credit above shall be applied to satisfy drawings under such Letters
of Credit as they occur. If any amount remains on deposit as Cash Collateral
after all Letters of Credit have either been fully drawn or expired, such
remaining amount shall be applied to the other Indebtedness, if any, in the
order set forth above.


 


5.12         Benefit. The terms and conditions of
this Article are inserted for the sole benefit of Administrative Agent and
Lenders (except for the provision in Section 5.9 requiring Borrower’s
consent); the same (except for the provision in Section 5.9 requiring
Borrower’s consent) may be waived in whole or in part, with or without terms or
conditions, without prejudicing Administrative Agent’s or Lenders’ rights to
later assert them in whole or in part.


 


5.13         Co-Agents; Lead Managers. None of the
Lenders or other persons identified on the facing page or signature pages of
this Agreement as a “syndication agent”, “documentation agent”, “co-agent”, “book
manager”, or “lead manager”, “arranger”, “lead arranger” or “co-arranger” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of Lenders or other
persons so identified as a “syndication agent”, “documentation agent”, “co-agent”
or “lead manager” shall have or be deemed to have any fiduciary relationship
with any Lenders. Each Lender acknowledges that it has not relied, and will not
rely, on any of Lenders or other persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.


 


ARTICLE 6— GENERAL TERMS AND CONDITIONS


 


6.1           Consents; Borrower’s Indemnity. Except
where otherwise expressly provided in the Loan Documents, in any instance where
the approval, consent or the exercise of Administrative Agent’s or Lenders’
judgment is required, the granting or denial of such approval or consent and
the exercise of such judgment shall be (a) within the sole discretion of
Administrative Agent or Lenders, as applicable; (b) deemed to have been given
only by a specific writing intended for the purpose given and executed by
Administrative Agent or Lenders; and (c) free from any limitation or
requirement of reasonableness (unless such limitation or requirement is imposed
by applicable


 


CONSTRUCTION LOAN AGREEMENT - Page 47


 

















 


Law). Notwithstanding any approvals or consents by Administrative Agent
or Lenders, neither Administrative Agent nor any Lender has any obligation or
responsibility whatsoever for the adequacy, form or content of the Plans, the
Budget, any appraisal, any contract, any change order, any lease, or any other
matter incident to the Property or the construction of the New Improvements. Administrative
Agent’s or Lenders’ acceptance of an assignment of the Plans for the benefit of
Administrative Agent and Lenders shall not constitute approval of the Plans. Any
inspection, appraisal or audit of the Property or the books and records of
Borrower, or the procuring of documents and financial and other information, by
or on behalf of Administrative Agent shall be for Administrative Agent’s and
Lenders’ protection only, and shall not constitute an assumption of
responsibility to Borrower or anyone else with regard to the condition, value,
construction, maintenance or operation of the Property, or relieve Borrower of
any of Borrower’s obligations. Borrower has selected all surveyors, architects,
engineers, contractors, materialmen and all other persons or entities
furnishing services or materials to the Project. Neither Administrative Agent
nor any Lender has any duty to supervise or to inspect the Property or the
construction of the New Improvements nor any duty of care to Borrower or any
other person to protect against, or inform Borrower or any other person of the
existence of, negligent, faulty, inadequate or defective design or construction
of the New Improvements. Neither Administrative Agent nor any Indemnified Party
shall be liable or responsible for, and Borrower shall indemnify each
Agent-Related Person and each Indemnified Party and their respective
Affiliates, directors, officers, agents, attorneys and employees (collectively,
the “Indemnitees”) from and against: (a) any Claims, arising from or
with respect to (i) any defect in the Property or the Improvements, (ii) the
performance or default of Borrower, Borrower’s surveyors, architects,
engineers, contractors or any other person engaged by or acting for or under
the direction of Borrower or its Affiliates, (iii) any failure to construct,
complete, protect or insure the Improvements (both existing and to be
constructed) in accordance with the Loan Documents, (iv) the payment of costs
of labor, materials, or services supplied for the construction of the New
Improvements, (v) in connection with the protection and preservation of the
Loan collateral (including those with respect to property taxes, insurance
premiums, completion of construction, operation, management, improvements,
maintenance, repair, sale and disposition), or (vi) the performance of any
obligation of Borrower whatsoever; (b) any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses and disbursements (including attorney fees and costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Indemnitee in any way arising out of or with respect to (i)
the execution, delivery, enforcement, performance or administration of any Loan
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (ii) any Commitment or Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit), or (iii) any actual
or prospective claim, litigation, investigation or proceeding relating to any
of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and regardless of
whether any Indemnitee is a party thereto; (c) any and all claims, demands,
actions or causes of action arising out of or relating to the use of
Information (as defined in Section 6.6) or other materials made
available to Administrative Agent or a Lender by Borrower or Guarantor; and (d)
any and all liabilities, losses, costs or expenses (including attorney fees and
costs) that any Indemnified Party suffers or incurs as a result of the


 


CONSTRUCTION LOAN AGREEMENT - Page 48


 

















 


assertion of any foregoing claim, demand, action, cause of action or proceeding,
or as a result of the preparation of any defense in connection with any
foregoing claim, demand, action, cause of action or proceeding, in all cases,
whether or not an Indemnified Party is a party to such claim, demand, action,
cause of action or proceeding and whether it is defeated, successful or
withdrawn (all the foregoing, collectively, the “Indemnified Liabilities”), INCLUDING IN WHOLE OR PART ANY LOSS ARISING OUT OF AN INDEMNIFIED
PARTY’S STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE;
provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of any Indemnified Party. Upon demand by Administrative Agent,
Borrower shall diligently defend any Claim which affects the Property or is
made or commenced against Administrative Agent or any Lender, whether alone or
together with Borrower or any other person, all at Borrower’s own cost and
expense and by counsel to be approved by Administrative Agent in the exercise
of its reasonable judgment. In the alternative, at any time Administrative
Agent may elect to conduct its own defense on behalf of itself or any Lender
through counsel selected by Administrative Agent and at the cost and expense of
Borrower. Nothing, including any advance or acceptance of any document or
instrument, shall be construed as a representation or warranty, express or
implied, to any party by Administrative Agent or Lenders (except for
representations of Administrative Agent and Lenders expressly made in the Loan
Documents). Inspection shall not constitute an acknowledgment or representation
by Administrative Agent, any Lender or the Construction Consultant that there
has been or will be compliance with the Plans, the Loan Documents, or
applicable Laws, governmental requirements and restrictive covenants, or that
the construction is free from defective materials or workmanship. Inspection,
whether or not followed by notice of Default, shall not constitute a waiver of
any Default then existing, or a waiver of Administrative Agent’s and Lenders’
right thereafter to insist that the New Improvements be constructed in
accordance with the Plans, the Loan Documents, and all applicable Laws,
governmental requirements and restrictive covenants. Administrative Agent’s
failure to inspect shall not constitute a waiver of any of Administrative Agent’s
or Lenders’ rights under the Loan Documents or at Law or in equity.


 


6.2           Miscellaneous. This Agreement may be
executed in several counterparts, all of which are identical, and all of which
counterparts together shall constitute one and the same instrument. The Loan
Documents are for the sole benefit of Administrative Agent, Lenders and
Borrower and are not for the benefit of any third party. A determination that
any provision of this Agreement is unenforceable or invalid shall not affect
the enforceability or validity of any other provision and the determination
that the application of any provision of this Agreement to any person or
circumstance is illegal or unenforceable shall not affect the enforceability or
validity of such provision as it may apply to other persons, entities or
circumstances. Time shall be of the essence with respect to Borrower’s
obligations under the Loan Documents. This Agreement, and its validity,
enforcement and interpretation, shall be governed by Texas Law (without regard
to any conflict of Laws principles) and applicable United States federal Law.


 


CONSTRUCTION LOAN AGREEMENT - Page 49


 
















6.3           Notices.


 


6.3.1        Modes of Delivery;
Changes. Except as otherwise provided herein, all notices, and other
communications required or which any party desires to give under this Agreement
or any other Loan Document shall be in writing. Unless otherwise specifically
provided in such other Loan Document, all such notices and other communications
shall be deemed sufficiently given or furnished if delivered by personal
delivery, by courier, by registered or certified United States mail, postage
prepaid, or by facsimile (with, subject to Subsection 6.3.2 below, a
confirmatory duplicate copy sent by first class United States mail), addressed
to the party to whom directed or by (subject to Subsection 6.3.3 below)
electronic mail address to Borrower, at the addresses set forth at the end of
this Agreement or to Administrative Agent, L/C Issuer or Lenders at the
addresses specified for notices on the Schedule of Lenders (unless changed by
similar notice in writing given by the particular party whose address is to be
changed). Any such notice or communication shall be deemed to have been given
and received either at the time of personal delivery or, in the case of courier
or mail, as of the date of first attempted delivery at the address and in the
manner provided herein, or, in the case of facsimile, upon receipt; provided,
however, that service of a notice required by any applicable statute shall
be considered complete when the requirements of that statute are met. Notwithstanding
the foregoing, no notice of change of address shall be effective except upon
actual receipt. This Section shall not be construed in any way to affect or
impair any waiver of notice or demand provided in any Loan Document or to
require giving of notice or demand to or upon any person in any situation or
for any reason.


 


6.3.2        Effectiveness of
Facsimile Documents and Signatures. Loan Documents may be transmitted
and/or signed by facsimile. The effectiveness of any such documents and
signatures shall, subject to applicable Law, have the same force and effect as
manually-signed originals and shall be binding on all parties to the Loan
Documents. Administrative Agent may also require that any such documents and
signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit
the effectiveness of any facsimile document or signature.


 


6.3.3        Limited Use of
Electronic Mail. Electronic mail and internet and intranet websites may be
used only to distribute routine communications, such as financial statements
and other information, and to distribute Loan Documents for execution by the
parties thereto, and may not be used for any other purpose.


 


6.3.4        Reliance by
Administrative Agent and Lenders. Administrative Agent and Lenders shall be
entitled to rely and act upon any notices (including telephonic Loan advance
notices) purportedly given by or on behalf of Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient in good faith, varied from any
confirmation thereof. Borrower shall indemnify each Agent-Related Person and
each Lender from all losses, costs, expenses and liabilities resulting from the
reliance in good faith by such person on each notice purportedly given by or on
behalf of Borrower, INCLUDING IN WHOLE OR PART
FOR AN AGENT RELATED PERSON’S OR LENDER’S STRICT LIABILITY, OR COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE, except to the extent of their gross
negligence or willful misconduct. All telephonic notices to and other
communications with Administrative Agent may be recorded by Administrative
Agent, and each of the parties hereto hereby consents to such recording. If a
Lender does not notify or inform


 


CONSTRUCTION LOAN AGREEMENT - Page 50


 

















 


Administrative Agent of whether or not it consents to, or approves of
or agrees to any matter of any nature whatsoever with respect to which its
consent, approval or agreement is required under the express provisions of this
Agreement or with respect to which its consent, approval or agreement is
otherwise requested by Administrative Agent, in connection with the Loan or any
matter pertaining to the Loan, within ten (10) Business Days (or such longer
period as may be specified by Administrative Agent) after such consent,
approval or agreement is requested by Administrative Agent, the Lender shall be
deemed to have given its consent, approval or agreement, as the case may be,
with respect to the matter in question.


 


6.4           Payments Set Aside.
To the extent that any payment by or on behalf of Borrower is made to
Administrative Agent or any Lender, or Administrative Agent or any Lender
exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law, to a depository
(including Administrative Agent, any Lender or its or their affiliates) for
returned items or insufficient collected funds, or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.


 


6.5           Successors and
Assigns.


 


(a)           The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender, and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of subsection (b)
of this Section, (ii) by way of participation in accordance with the provisions
of subsection (d) of this Section, or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Indemnified Parties) any legal or equitable right,
remedy or claim under or by reason of this Agreement.


 


(b)           Any Lender may assign
to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and Pro Rata Share of the Loan (including for purposes of this subsection (b),
participations in L/C Obligations) at the time owing to it); provided
that:


 


(i)            No Lender may assign
all or any portion of its rights and obligations under this Agreement unless
such Lender simultaneously assigns its rights and obligations in


 


CONSTRUCTION LOAN AGREEMENT - Page 51


 

















 


respect of the
Condominium Loan Agreement so that each lender holds a Pro Rata Share of both
the Loan and the Condominium Loan;


 


(ii)           so long as no Default
has occurred and is continuing, the assigning Lender’s Commitment after the
assignment must be at least $7,000,000.00, and except in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and Pro Rata Share of the Loan and the Condominium Loan at
the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund as defined in subsection (h) of this
Section with respect to a Lender, the aggregate amount of the Commitment (which
for this purpose includes its Pro Rata Share of the Loan and Condominium Loan
outstanding) subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to
Administrative Agent, shall not be less than $7,000,000 unless each of
Administrative Agent and, so long as no Default has occurred and is continuing,
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed);


 


(iii)          each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement and the Condominium Loan
Agreement with respect to its Pro Rata Share of the Loan and the Condominium
Loan and the Commitment assigned;


 


(iv)          any assignment of a
Commitment must be approved by Administrative Agent, and the L/C Issuer unless
the person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and


 


(v)           the parties to each
assignment shall execute and deliver to Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500 plus the
cost of any applicable endorsement to the Title Insurance or new Title
Insurance.


 


Subject to
acceptance and recording thereof by Administrative Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement arising after the Assignment Assumption becomes effective (and, in
the case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of this
Agreement with respect to Borrower’s obligations surviving termination of this
Agreement). Upon request, Administrative Agent shall prepare and Borrower shall
execute and deliver a (a) Note in the amount so assigned (“Replacement Note”)
to the assignee Lender, and (b) a replacement Note representing the remaining
balance of the assigning Lender’s Commitment. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.


 


CONSTRUCTION LOAN AGREEMENT - Page 52


 

















 


(c)           Administrative Agent,
acting solely for this purpose as an agent of Borrower, shall forward the
Assignment and Assumption and the Replacement Note to the Title Company for
issuance of an applicable endorsement to the Title Insurance or new Title
Insurance, and  shall maintain at Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of Lenders, and the
Commitments of, and principal amount of each Lender’s Pro Rata Share of the
Loan owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive, absent manifest error, and
Borrower, Administrative Agent and Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.


 


(d)           Any Lender may, without
the consent of, but with prior notice to Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or its Pro Rata
Share of the Loan (including such Lender’s participations in L/C Obligations)
owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) Borrower, Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement, and (iv) except to
the extent consented to by Administrative Agent in its sole discretion with
respect to each participation, any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement.


 


(e)           A Participant shall not
be entitled to receive any greater payment under Sections 1.7, 1.8 or 1.9  than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant.


 


(f)            Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement (including under its Note, if any) to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall
release a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.


 


(g)           If the consent of
Borrower to an assignment or to an assignee is required hereunder (including a
consent to an assignment which does not meet the minimum assignment threshold
specified in clause (i) of the provision to the first sentence of subsection
(b) above), Borrower shall be deemed to have given its consent five Business
Days after the date notice thereof has been delivered by the assigning Lender
(through Administrative Agent) unless such consent is expressly refused by
Borrower on or before such fifth Business Day.


 


(h)           As used herein, the
following terms have the following meanings:


 


CONSTRUCTION LOAN AGREEMENT - Page 53


 

















 


(i)            “Eligible Assignee”
“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other person (other than a natural person)
approved by Administrative Agent and, unless a Default has occurred and is
continuing, Borrower (each such approval not to be unreasonably withheld or delayed).


 


(ii)           “Fund” means any
person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial real estate loans and
similar extensions of credit in the ordinary course of its business.


 


(iii)          “Approved Fund”
means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.


 


(i)            Notwithstanding
anything to the contrary contained herein, if at any time Bank of America, N.A.
assigns all of its Commitment and interest in the Loans pursuant to subsection
(b) above, Bank of America, N.A. may, upon 30 days’ notice to Borrower and
Lenders, resign as L/C Issuer. In the event of any such resignation as L/C
Issuer, Borrower shall be entitled to appoint from among Lenders a successor
L/C Issuer hereunder; provided, however, that no failure by Borrower to
appoint any such successor shall affect the resignation of Bank of America,
N.A. as L/C Issuer. If Bank of America, N.A. resigns as L/C Issuer it shall
retain all the rights and obligations of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require Lenders to make an advance of Base Rate
Principal or fund risk participations for L/C Borrowings pursuant to Exhibit
“J”).


 


6.6           Confidentiality.
Each of Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any
regulatory authority; (c) to the extent required by applicable Laws or by
any subpoena or similar legal process; (d) to any other party to this
Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
participant in, or any prospective assignee of or participant in, any of its
rights or obligations under this Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty’s or prospective counterparty’s professional advisor) to any Swap
Transaction or credit derivative transaction relating to obligations of
Borrower and Guarantor; (g) with the consent of Borrower; or (h) to the
extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to
Administrative Agent or any Lender on a nonconfidential basis from a source
other than Borrower or Guarantor or their Affiliates. For the purposes of this
Section, “Information” means all information received from Borrower or
Guarantor relating to Borrower or Guarantor or their business, other than any such
information that is available to Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by Borrower or Guarantor; provided
that, in the case of information received from Borrower or Guarantor after the
date hereof, such information is


 


CONSTRUCTION LOAN AGREEMENT - Page 54


 

















 


clearly identified in writing at the time of delivery as confidential. Any
person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such person has exercised the same degree of care to maintain the
confidentiality of such Information as such person would accord to its own
confidential information. Administrative
Agent and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to Administrative
Agent and the Lenders in connection with the administration and management of
this Agreement, the Loan and Loan Documents.


 


6.7           Set-off. In
addition to any rights and remedies of Administrative Agent and Lenders
provided by Law, upon the occurrence and during the continuance of any Default,
Administrative Agent and each Lender is authorized at any time and from time to
time, without prior notice to Borrower or any other party to the Loan
Documents, any such notice being waived by Borrower (on its own behalf and on
behalf of each party to the Loan Documents to the fullest extent permitted by
Law), to set-off and apply any and all deposits, general or special, time or
demand, provisional or final, any time owing by Administrative Agent or such
Lender hereunder or under any other Loan Document to or for the credit or the
account of Borrower against any and all Indebtedness then due and payable under
the Loan Documents, irrespective of whether or not Administrative Agent or such Lender shall have made demand under
this Agreement or any other Loan Document. Each Lender agrees promptly to
notify Borrower and Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.


 


6.8           Sharing of Payments.
If, other than as expressly provided elsewhere herein, any Lender shall obtain
on account of the portions of the Loan advanced by it, or the participations in L/C Obligations held by it, any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify Administrative Agent of such fact, and (b)
purchase from the other Lenders such participations in the portions of the Loan
made by them and/or such
subparticipations in the participations in L/C Obligations held by them, as the
case may be, as shall be necessary to cause such purchasing Lender to
share the excess payment in respect of such portions of the Loan or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under
any of the circumstances described in Section 6.4 (including pursuant to
any settlement entered into by the purchasing Lender in its discretion),
such purchase shall to that extent be rescinded and each other Lender shall
repay to the purchasing Lender the purchase price paid therefor, together with
an amount equal to such paying Lender’s ratable share (according to the
proportion of (i) the amount of such paying Lender’s required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered without further interest thereon. Borrower agrees that any
Lender so purchasing a participation from another Lender may, to the fullest
extent permitted by Law, exercise all its rights of payment (including the
right of set-off), but subject to Section 6.7 with respect to such
participation as fully as if such Lender were the direct creditor of Borrower
in the amount of such participation. Administrative Agent will keep records
(which shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Lenders following any such purchases or


 


CONSTRUCTION LOAN AGREEMENT - Page 55


 

















 


repayments. Each Lender that purchases a participation pursuant to this
Section shall from and after such purchase have the right to give all notices,
requests, demands, directions and other communications under this Agreement
with respect to the portion of the Obligations purchased to the same extent as
though the purchasing Lender were the original owner of the Obligations
purchased.


 


6.9           Amendments; Survival.
Administrative Agent and Lenders shall be entitled to amend (whether pursuant
to a separate intercreditor agreement or otherwise) any of the terms,
conditions or agreements set forth in Article 5 (except Borrower’s right
to consent to certain amendments referred to in Section 5.9) or as to
any other matter in the Loan Documents respecting payments to Administrative
Agent or Lenders or the required number of the Lenders to approve or disapprove
any matter or to take or refrain from taking any action, without the consent of
Borrower or any other Person or the execution by Borrower or any other Person
of any such amendment or intercreditor agreement. Subject to the foregoing,
Administrative Agent may amend or waive any provision of this Agreement or any
other Loan Document, or consent to any departure by any party to the Loan
Documents therefrom which amendment, waiver or consent is intended to be within
Administrative Agent’s discretion or determination, or otherwise in
Administrative Agent’s reasonable determination shall not have a Material
Adverse Effect; provided  however, otherwise no such amendment,
waiver or consent shall be effective unless in writing, signed by the Required
Lenders and Borrower or the applicable party to the Loan Documents, as the case
may be, and acknowledged by Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided  further  however, no such
amendment, waiver or consent shall:


 


(a)           extend or increase the
Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section
4.2), without the written consent of such Lender (it being understood that
a waiver of a Default shall not constitute an extension or increase in any
Lender’s Commitment);


 


(b)           postpone any date fixed
by this Agreement or any other Loan Document for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder
or under any other Loan Document, without the written consent of each Lender
directly affected thereby;


 


(c)           reduce the principal
of, or the rate of interest specified herein on, any portion of the Loan or L/C
Borrowing, or any fees or other amounts payable hereunder or under any other
Loan Document, without the written consent of each Lender directly affected
thereby; provided, however, that Administrative Agent may waive
any obligation of Borrower to pay interest at the Past Due Rate and/or late
charges for periods of up to thirty days, and only the consent of the Required
Lenders shall be necessary to waive any obligation of Borrower to pay interest
at the Past Due Rate or late charges thereafter, or to amend the definition of “Past
Due Rate” or “late charges”;


 


(d)           change the percentage
of the combined Commitments or of the aggregate unpaid principal amount of the
Loan and L/C Obligations which is required for the Lenders or any of them to
take any action hereunder, without the written consent of each Lender;


 


 


CONSTRUCTION LOAN AGREEMENT - Page 56


 

















 


(e)           change the definition
of “Pro Rata Share” or “Required Lender” or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender;


 


(f)            amend this Section, or
Section 6.8, without the written consent of each Lender;


 


(g)           release the liability
of Borrower or any existing Guarantor without the written consent of each
Lender;


 


(h)           permit the sale,
transfer, pledge, mortgage or assignment of any Loan collateral or any direct
or indirect interest in Borrower, except as expressly permitted under the Loan
Documents, without the written consent of each Lender; or


 


(i)            transfer or release
any lien on, or after foreclosure or other acquisition of title by
Administrative Agent on behalf of the Lenders transfer or sell, any Loan
collateral except as permitted in Section 5.10, without the written
consent of each Lender.


 


and, provided
further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any
Letter of Credit Application relating to any Letter of Credit issued or to be
issued by it; and (ii) no amendment, waiver or consent shall, unless in writing
and signed by Administrative Agent in addition to the Lenders required above,
affect the rights or duties of Administrative Agent under this Agreement or any
other Loan Document. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased without the consent of such Lender. This Agreement shall continue
in full force and effect until the Indebtedness is paid in full and all of
Administrative Agent’s and Lenders’ obligations under this Agreement are
terminated; and all representations and warranties and all provisions herein
for indemnity of the Indemnified Parties, Administrative Agent and Lenders (and
any other provisions herein specified to survive) shall survive payment in
full, satisfaction or discharge of the Indebtedness, the resignation or removal
of Administrative Agent or replacement of any Lender, and any release or
termination of this Agreement or of any other Loan Documents.


 


6.10         Costs and Expenses.
Without limiting any Loan Document and to the extent not prohibited by
applicable Laws, Borrower shall pay when due, shall reimburse to Administrative
Agent for the benefit of itself and Lenders on demand and shall indemnify (i)
Agents from, all out-of-pocket fees, costs, and expenses paid or incurred by
Agents in connection with the negotiation, preparation and execution of this
Agreement and the other Loan Documents (and any amendments, approvals,
consents, waivers and releases requested, required, proposed or done from time
to time), and (ii) Agents and Lenders in connection with the disbursement,
administration or collection of the Loan or the enforcement of the obligations
of Borrower or the exercise of any right or remedy of Administrative Agent,
including (a) all fees and expenses of Agents’ legal counsel; (b) fees and
charges of each Construction Consultant, inspector and engineer;
(c) appraisal, re-appraisal obtained in accordance with Section 2.13
hereof, and survey costs; (d) title insurance charges and premiums; (e) title
search or examination costs, including abstracts, abstractors’ certificates and
uniform commercial code searches; (f) judgment and tax lien searches for
Borrower and each


 


CONSTRUCTION LOAN AGREEMENT - Page 57


 

















 


Guarantor; (g) escrow fees; (h) fees and costs of environmental
investigations, site assessments and remediations; (i) recordation taxes,
documentary taxes, transfer taxes and mortgage taxes; (j) filing and recording
fees; and (k) loan brokerage fees for which Borrower has specifically agreed to
pay. Borrower shall pay all costs and expenses incurred by Administrative
Agent, including attorneys’ fees, if the obligations or any part thereof are
sought to be collected by or through an attorney at Law, whether or not
involving probate, appellate, administrative or bankruptcy proceedings. Borrower
shall pay all costs and expenses of complying with the Loan Documents, whether
or not such costs and expenses are included in the Budget. Borrower’s
obligations under this Section shall survive the delivery of the Loan Documents,
the making of advances, the payment in full of the Indebtedness, the release or
reconveyance of any of the Loan Documents, the foreclosure of the Deed of Trust
or conveyance in lieu of foreclosure, any bankruptcy or other debtor relief
proceeding, and any other event whatsoever (other than an enforceable waiver of
Borrower’s obligations under this Section by Administrative Agent).


 


6.11         Tax Forms.


 


(a) (i) Each
Lender, and each holder of a participation interest herein, that is not a “United
States person” (a “Foreign Lender”) within the meaning of Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended from time to time
(“Code”) shall deliver to Administrative Agent and Borrower, prior to
receipt of any payment subject to withholding (or upon accepting an assignment
or receiving a participation interest herein), two duly signed completed copies
of either Form W-8BEN or any successor thereto (relating to such Foreign Lender
and entitling it to a complete exemption from withholding on all payments to be
made to such Foreign Lender by Borrower pursuant to this Agreement) or Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence satisfactory to Borrower and
Administrative Agent that such Foreign Lender is entitled to an exemption from
or reduction of, United States withholding tax, including any exemption
pursuant to Section 881(c) of the Code. Thereafter and from time to time, each
such Foreign Lender shall (A) promptly submit to Administrative Agent and
Borrower such additional duly completed and signed copies of one of such forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States Laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and Administrative Agent of any available exemption
from or reduction of, United States withholding taxes in respect of all
payments to be made to such Foreign Lender by Borrower pursuant to the Loan
Documents, (B) promptly notify Administrative Agent and Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction, and (C) take such steps as shall not be materially disadvantageous
to it, in the reasonable judgment of such Foreign Lenders, and as may be
reasonably necessary (including the re-designation of its lending office, if
any) to avoid any requirement of applicable Laws that Borrower make any
deduction or withholding for taxes from amounts payable to such Foreign Lender.


 


(ii)           Each Foreign Lender, to
the extent it does not act or ceases to act for its own account with respect to
any portion of any sums paid or payable to such Lender under any of the Loan
Documents (for example, in the case of a typical participation by such Lender),


 


CONSTRUCTION LOAN AGREEMENT - Page 58


 

















 


shall deliver to Administrative Agent on the date when such Foreign
Lender ceases to act for its own account with respect to any portion of any
such sums paid or payable, and at such other times as may be necessary in the
determination of Administrative Agent and Borrower (in each case in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect
to which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of United States
Internal Revenue Service Form W-8IMY (or any successor thereto), together with
any information such Lender chooses to transmit with such form, and any other
certificate or statement of exemption required under the Code, to establish
that such Lender is not acting for its own account with respect to a portion of
any such sums payable to such Lender.


 


(iii)          Borrower shall not be
required to pay any additional amount to any Foreign Lender under Section
1.11(a) with respect to any Taxes required to be deducted or withheld on
the basis of the information, certificates or statements of exemption such Lender
transmits with an United States Internal Revenue Service Form W-8IMY pursuant
to this subsection (a) or (B) if such Lender shall have failed to
satisfy the foregoing provisions of this subsection (a); provided
that if such Lender shall have satisfied the requirement of this subsection
(a) on the date such Lender became a Lender or ceased to act for its own
account with respect to any payment under any of the Loan Documents, nothing in
this subsection (a) shall relieve Borrower of its obligation to pay any
amounts pursuant to Section 1.11 in the event that, as a result of any
change in any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms, certificates or
other evidence at a subsequent date establishing the fact that such Lender or
other Person for the account of which such Lender receives any sums payable
under any of the Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate.


 


(iv)          Administrative Agent
may, without reduction, withhold any Taxes required to be deducted and withheld
from any payment under any of the Loan Documents with respect to which Borrower
is not required to pay additional amounts under this subsection (a).


 


(b)           Upon the request of
Administrative Agent or Borrower, each Lender that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code shall deliver to
Administrative Agent and Borrower two duly signed completed copies of United
States Internal Revenue Service Form W-9. If such Lender fails to deliver such
forms, then Administrative Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable back-up withholding tax imposed
by the Code, without reduction.


 


(c)           If any Tribunal asserts
that Administrative Agent did not properly withhold or backup withhold, as the
case may be, any tax or other amount from payments made to or for the account
of any Lender, such Lender shall indemnify Administrative Agent therefor,
including all penalties and interest and costs and expenses (including attorney
fees) of Administrative Agent. If any Tribunal asserts that Borrower did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender as a result of


 


CONSTRUCTION LOAN AGREEMENT - Page 59


 

















 


such Lender’s
failure to timely deliver to Borrower the applicable documents contemplated in
this Section 6.11, such Lender shall indemnify Borrower therefor,
including all penalties and interest and costs and expenses (including attorney
fees) of Borrower. The obligation of Lenders under this subsection shall
survive the removal or replacement of a Lender, the payment of all Indebtedness
and the resignation or replacement of Administrative Agent.


 


6.12         Further Assurances.
Borrower will, upon Administrative Agent’s request, (a) promptly correct any
defect, error or omission in any Loan Document; (b) execute, acknowledge,
deliver, procure, record or file such further instruments and do such further
acts as Administrative Agent, in its good faith business judgment, deems
necessary, desirable or proper to carry out the purposes of the Loan Documents
and to identify and subject to the liens and security interest of the Loan
Documents any property intended to be covered thereby, including any renewals,
additions, substitutions, replacements, or appurtenances to the Property; (c)
execute, acknowledge, deliver, procure, file or record any document or
instrument Administrative Agent, in its good faith business judgment, deems
necessary, desirable, or proper to protect the liens or the security interest
under the Loan Documents against the rights or interests of third persons; and
(d) provide such certificates, documents, reports, information, affidavits and
other instruments and do such further acts deemed necessary, desirable or
proper by Administrative Agent, in its good faith business judgment, to comply
with the requirements of any agency having jurisdiction over Administrative
Agent. In addition, at any time, and
from time to time, upon request by Administrative Agent or any Lender, Borrower
will, at Borrower’s expense, provide any and all further instruments,
certificates and other documents as may, in the opinion of Administrative Agent
or such Lender, in its good faith business judgment, be necessary or desirable
in order to verify Borrower’s identity and background in a manner satisfactory
to Administrative Agent or such Lender.


 


6.13         Inducement to Lenders.
The representations, warranties, covenant and agreements contained in this
Agreement and the other Loan Documents (a) are made to induce Lenders to make
the Loan and extend any other credit to or for the account of Borrower pursuant
hereto, and Administrative Agent and Lenders are relying thereon, and will
continue to rely thereon, and (b) shall survive any bankruptcy proceedings
involving Borrower, Guarantor or the Property, foreclosure, or conveyance in
lieu of foreclosure; provided, however, clause (b) preceding shall not be
construed to require Borrower to perform such covenants and agreements after
bankruptcy, foreclosure or deed in lieu of foreclosure except for indemnity and
payment obligations that relate to liabilities arising prior to such
bankruptcy, foreclosure or deed in lieu of foreclosure and interest accruing
thereon thereafter.


 


6.14         Forum. Each Party
to this Agreement hereby irrevocably submits generally and unconditionally for
itself and in respect of its property to the jurisdiction of any state court,
or any United States federal court, sitting in the State specified in Section
6.2 of this Agreement and to the jurisdiction of any state court or any
United States federal court, sitting in the state in which any of the Property
is located, over any suit, action or proceeding arising out of or relating to
this Agreement or the Indebtedness. Each Party to this Agreement hereby irrevocably
waives, to the fullest extent permitted by Law, any objection that they may now
or hereafter have to the laying of venue in any such court and any claim that
any such court is an inconvenient forum. Each Party to this Agreement hereby
agrees and consents that, in addition to any methods of service of process
provided for under applicable Law, all service of process in any such suit,
action or proceeding in


 


CONSTRUCTION LOAN AGREEMENT - Page 60


 

















 


any state court, or any United States federal court, sitting in the
state specified in Section 6.2 may be made by certified or registered
mail, return receipt requested, directed to such party at its address for
notice stated in the Loan Documents, or at a subsequent address of which
Administrative Agent received actual notice from such party in accordance with
the Loan Documents, and service so made shall be complete five (5) days after
the same shall have been so mailed. Nothing herein shall affect the right of
Administrative Agent to serve process in any manner permitted by Law or limit
the right of Administrative Agent to bring proceedings against any party in any
other court or jurisdiction.


 


6.15         Interpretation. References
to “Dollars,” “$,” “money,” “payments” or other similar financial or monetary
terms are references to lawful money of the United States of America. References
to Articles, Sections, and Exhibits are, unless specified otherwise, references
to articles, sections and exhibits of this Agreement. Words of any gender shall
include each other gender. Words in the singular shall include the plural and
words in the plural shall include the singular. References to Borrower or
Guarantor shall mean, each person comprising same, jointly and severally. References
to “persons” shall include both natural persons and any legal entities,
including public or governmental bodies, agencies or instrumentalities. The
words “include” and “including” shall be interpreted as if followed by the
words “without limitation”. Captions and headings in the Loan Documents are for
convenience only and shall not affect the construction of the Loan Documents.


 


6.16         No Partnership, etc.
The relationship between Lenders (including Agents) and Borrower is solely that
of lender and borrower. Neither the Agents nor any Lender has any fiduciary or
other special relationship with or duty to Borrower and none is created by the
Loan Documents. Nothing contained in the Loan Documents, and no action taken or
omitted pursuant to the Loan Documents, is intended or shall be construed to
create any partnership, joint venture, association, or special relationship
between Borrower and the Agents or any Lender or in any way make the Agents or
any Lender a co-principal with Borrower with reference to the Project, the
Property or otherwise. In no event shall the Agent’s or Lenders’ rights and
interests under the Loan Documents be construed to give the Agents or any
Lender the right to control, or be deemed to indicate that the Agents or any
Lender is in control of, the business, properties, management or operations of
Borrower.


 


6.17         Records. The
unpaid amount of the Loan and the amount of any other credit extended by
Administrative Agent or Lenders to or for the account of Borrower set forth on
the books and records of Administrative Agent shall be prima facie evidence of
the amount thereof owing and unpaid, but failure to record any such amount on
Administrative Agent’s books and records shall not limit or affect the
obligations of Borrower under the Loan Documents to make payments on the Loan
when due.


 


6.18         Commercial Purpose.
Borrower warrants that the Loan is being made solely to acquire or carry on a
business or commercial enterprise, and/or Borrower is a business or commercial
organization. Borrower further warrants that all of the proceeds of this Loan
shall be used for commercial purposes and stipulates that the Loan shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family, household or agricultural purposes.


 


CONSTRUCTION LOAN AGREEMENT - Page 61


 

















 


6.19         Service of Process.
Borrower hereby consents to process being served in any suit, action, or
proceeding instituted in connection with the Loan by (a) the mailing of a copy
thereof by certified mail, postage prepaid, return receipt requested, to
Borrower and (b) serving a copy thereof to 15601 Dallas Parkway, Suite 600,
Addison, Texas  75001 Attention: Gerald
J. Reihsen III, the agent hereby designated and appointed by Borrower as
Borrower’s agent for service of process. Borrower irrevocably agrees that such
service shall be deemed to be service of process upon Borrower in any such
suit, action, or proceeding. Nothing in any other Loan Document shall affect the
right of Administrative Agent to serve process in any manner otherwise
permitted by Law and nothing in any other Loan Document will limit the right of
Administrative Agent on behalf of the Lenders otherwise to bring proceedings
against Borrower in the courts of any jurisdiction or jurisdictions.


 


6.20         USA Patriot Act Notice.
Each Lender and the Agents (for themselves and not on behalf of any Lender)
hereby notifies Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other
information that will allow such Lender or the Agents, as applicable, to
identify Borrower in accordance with the Act.


 


6.21         Entire Agreement. The
Loan Documents constitute the entire understanding and agreement between
Borrower, the Agents and Lenders with respect to the transactions arising in
connection with the Loan, and supersede all prior written or oral
understandings and agreements between Borrower, the Agents and Lenders with
respect to the matters addressed in the Loan Documents. In particular, and
without limitation, the terms of any commitment letter, letter of intent or
quote letter by the Agents or any Lender to make the Loan are merged into the
Loan Documents. Neither the Agents nor any Lender has made any commitments to
extend the term of the Loan past its stated maturity date or to provide Borrower
with financing except as set forth in the Loan Documents. Except as
incorporated in writing into the Loan Documents, there are not, and were not,
and no persons are or were authorized by the Agents or any Lender to make, any
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the matters addressed in the Loan Documents.


 


6.22         Dispute Resolution.


 


(a)           Arbitration. Except
to the extent expressly provided below, any Dispute shall, upon the request of
any party, be determined by binding arbitration in accordance with the Federal
Arbitration Act, Title 9, United States Code (or if not applicable, the
applicable state law), the then-current rules for arbitration of financial
services disputes of AAA and the “Special Rules” set forth below. In the event
of any inconsistency, the Special Rules shall control. The filing of a court
action is not intended to constitute a waiver of the right of Borrower, the
Agents or any Lender, including the suing party, thereafter to require
submittal of the Dispute to arbitration. Any party to this Agreement may bring
an action, including a summary or expedited proceeding, to compel arbitration
of any Dispute in any court having jurisdiction over such action. For the
purposes of this Dispute Resolution Section only, the terms “party” and “parties”
shall include  any parent corporation,
subsidiary or affiliate of Administrative Agent involved in the servicing,
management or administration of any obligation described in or evidenced by
this Agreement, together with the officers, employees, successors and assigns
of each of the foregoing.


 


CONSTRUCTION LOAN AGREEMENT - Page 62


 

















 


(b)           Special Rules.


 


(i)            The arbitration shall
be conducted in the City of Dallas, Texas.


 


(ii)           The arbitration shall
be administered by AAA, who will appoint an arbitrator. If AAA is unwilling or
unable to administer or legally precluded from administering the arbitration,
or if AAA is unwilling or unable to enforce or legally precluded from enforcing
any and all provisions of this Dispute Resolution Section, then any party to
this Agreement may substitute, without the necessity of the agreement or
consent of the other party or parties, another arbitration organization that
has similar procedures to AAA but that will observe and enforce any and all
provisions of this Dispute Resolution Section. All Disputes shall be determined
by one arbitrator; however, if the amount in controversy in a Dispute exceeds
Five Million Dollars ($5,000,000), upon the request of any party, the Dispute
shall be decided by three arbitrators (for purposes of this Agreement, referred
to collectively as the “arbitrator”).


 


(iii)          All arbitration hearings
will be commenced within ninety (90) days of the demand for arbitration and
completed within ninety (90) days from the date of commencement; provided,
however, that upon a showing of good cause, the arbitrator shall be permitted
to extend the commencement of such hearing for up to an additional sixty (60)
days.


 


(iv)          The judgment and the
award, if any, of the arbitrator shall be issued within thirty (30) days of the
close of the hearing. The arbitrator shall provide a concise written statement
setting forth the reasons for the judgment and for the award, if any. The
arbitration award, if any, may be submitted to any court having jurisdiction to
be confirmed and enforced, and such confirmation and enforcement shall not be
subject to arbitration.


 


(v)           The arbitrator will
give effect to statutes of limitation and any waivers thereof in determining
the disposition of any Dispute and may dismiss one or more claims in the
arbitration on the basis that such claim or claims is or are barred. For
purposes of the application of the statute of limitations, the service on AAA
under applicable AAA rules of a notice of Dispute is the equivalent of the
filing of a lawsuit.


 


(vi)          Any dispute concerning
this Dispute Resolution Section, including any such dispute as to the validity
or enforceability of this Dispute Resolution Section of or whether a Dispute is
arbitrable, shall be determined by the arbitrator; provided, however, that the
arbitrator shall not be permitted to vary the express provisions of these
Special Rules or the Reservations of Rights in subsection (c) below.


 


(vii)         The arbitrator shall have
the power to award legal fees and costs pursuant to the terms of this
Agreement.


 


(viii)        The arbitration will take
place on an individual basis without reference to, resort to, or consideration
of any form of class or class action.


 


CONSTRUCTION LOAN AGREEMENT - Page 63


 

















 


(c)           Reservations of
Rights. Nothing in this Agreement shall be deemed to (i) limit the
applicability of any otherwise applicable statutes of limitation and any
waivers contained in this Agreement or any other Loan Document, or (ii) apply
to or limit the right of Administrative Agent or any Lender (A) to
exercise self help remedies such as (but not limited to) setoff, or (B) to
foreclose judicially or nonjudicially against any real or personal property
collateral, or to exercise judicial or nonjudicial power of sale rights,
(C) to obtain from a court provisional or ancillary remedies such as (but
not limited to) injunctive relief, writ of possession, prejudgment attachment,
or the appointment of a receiver, or (D) to pursue rights against a party to
this Agreement in a third-party proceeding in any action brought against either
of the Agents or any Lender in a state, federal or international court, tribunal
or hearing body (including actions in specialty courts, such as bankruptcy and
patent courts). Subject to the terms of this Agreement, Administrative Agent
and any Lender may exercise the rights set forth in clauses (A) through (D),
inclusive, before, during or after the pendency of any arbitration proceeding
brought pursuant to this Agreement.
Neither the exercise of self help remedies nor the institution or maintenance
of an action for foreclosure or provisional or ancillary remedies shall constitute
a waiver of the right of any party, including the claimant in any such action,
to arbitrate the merits of the Dispute occasioning resort to such remedies. No
provision in the Loan Documents regarding submission to jurisdiction and/or
venue in any court is intended or shall be construed to be in derogation of the
provisions in any Loan Document for arbitration of any Dispute.


 


(d)           Conflicting
Provisions for Dispute Resolution. If there is any conflict between the
terms, conditions and provisions of this Section and those of any other
provision or agreement for arbitration or dispute resolution, the terms,
conditions and provisions of this Section shall prevail as to any Dispute
arising out of or relating to (i) this Agreement, (ii) any other Loan
Document, (iii) any related agreements or instruments, or (iv) the
transaction contemplated herein or therein (including any claim based on or
arising from an alleged personal injury or business tort). In any other
situation, if the resolution of a given Dispute is specifically governed by
another provision or agreement for arbitration or dispute resolution, the other
provision or agreement shall prevail with respect to said Dispute.


 


(e)           Jury Trial
Waiver in Arbitration. By agreeing to this Section, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
any Dispute.


 


6.23         Waiver of Jury Trial.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’
AGREEMENT TO ARBITRATE ANY “DISPUTE” (FOR PURPOSES OF THIS SECTION, AS DEFINED
ABOVE) AS SET FORTH IN THIS AGREEMENT, TO THE EXTENT ANY “DISPUTE” IS NOT
SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH
JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, THE PARTIES
HERETO WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE” AND ANY ACTION ON
SUCH “DISPUTE.”  THIS WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES HERETO, AND THE
PARTIES HERETO HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE
BEEN MADE BY ANY PERSON OR ENTITY ACTING BY OR ON BEHALF OF ADMINISTRATIVE
AGENT OR ANY LENDER TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT. THIS


 


CONSTRUCTION LOAN AGREEMENT - Page 64


 

















 


PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS
AGREEMENT. THE PARTIES HERETO ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS
SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. EACH
PARTY HERETO FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN
THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT
LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.


 


6.24         Oral Agreements. The
following notice is provided pursuant to Section 432.047 of the Missouri
Revised Statutes:


 


ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER) AND US
(LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE
IN WRITING TO MODIFY IT.


 


THIS CONTRACT
CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.


 


THE WRITTEN
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.


 


THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]


 


CONSTRUCTION LOAN AGREEMENT - Page 65


 

















 


EXECUTED and DELIVERED under seal as of the date first set forth above.


 


	
  Borrower’s Address for Notices:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
  Chase Park Plaza Hotel, LLC

  	
   

  	
  CHASE PARK PLAZA HOTEL, LLC, a Delaware

  
	
  15601 Dallas Parkway, Suite 600

  	
   

  	
  limited liability company

  
	
  Addison, Texas 75001

  	
   

  	
   

  
	
  Telephone: (214) 655-1600

  	
   

  	
  By:

  	
  Behringer Harvard Opportunity OP I, LP, a

  
	
  Telecopier: (214) 655-1610

  	
   

  	
   

  	
  Texas limited partnership, its authorized member

  
	
   

  	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
   

  	
  By:

  	
  BHO, Inc., a Delaware corporation, its

  
	
   

  	
   

  	
   

  	
   

  	
  general partner

  
	
  Kingsdell L.P.

  	
   

  	
   

  	
   

  	
   

  
	
  212 N. Kingshighway Blvd.

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  
	
  Suite 1023

  	
   

  	
   

  	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
  St. Louis, MO 63108

  	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President -

  
	
  Attention: James L. Smith

  	
   

  	
   

  	
   

  	
   

  	
  Corporate Development &

  
	
  Telephone: (314) 633-1054

  	
   

  	
   

  	
   

  	
   

  	
  Legal and Secretary

  
	
  Telecopier: (314) 633-3034

  	
   

  	
   

  	
   

  	
   

  
								



 


CONSTRUCTION LOAN AGREEMENT - Signature Page


 

















 


	
   

  	
  ADMINISTRATIVE
  AGENT, L/C ISSUER and

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  BANK OF
  AMERICA, N.A., individually as

  
	
   

  	
  Administrative
  Agent and L/C Issuer and Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jamison
  L. Fox

  	
   

  
	
   

  	
  Name:

  	
  Jamison L.
  Fox

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  SYNDICATION
  AGENT and LENDER:

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BANK, individually, as

  
	
   

  	
  Syndication
  Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nancy A.
  Pozo

  	
   

  
	
   

  	
  Name:

  	
  Nancy A.
  Pozo

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  	
   

  
									



 


CONSTRUCTION LOAN AGREEMENT - Signature Page


 
















 


EXHIBIT “A”


 


LEGAL DESCRIPTION
OF HOTEL PROJECT


 


Parcel 1 (Fee Simple):


 


Units 1, 2, 3, 3A, 4, 5, 6, 7, 9 and 16 of
Park Plaza Master Condominium, a Condominium in City Block 3882, according to
the plat thereof recorded in Book 12082006 page 0379, including an un-divided
interest in the common elements thereto belonging, all according to and more
particularly described in the Master Declaration of Condominium Park Plaza
Master Condominium dated December 1, 2006 and recorded December 8, 2006 in Book
12082006 page 0378 of the St. Louis City Records.


 


Parcel 2 (Easement):


 


Sub-surface easement more particularly
described as follows:  A portion of the
public street rights-of-way known as Kingshighway Boulevard, 100 feet wide, and
Maryland Plaza, 80 feet wide, adjacent to Block 3882 of the City of St. Louis,
Missouri, lying between horizontal planes at elevation 72.35 and 82.20 above
0.00 on the St. Louis City Datum and bounded by vertical planes described as
follows:  Commencing at the intersection
of the Northern line of Lindell Boulevard, 100 feet wide, with the Eastern line
of Kingshighway Boulevard, 100 feet wide; thence along said Eastern line of
Kingshighway Boulevard, North 6 degrees 21 minutes 40 seconds West, 233.89 feet
to the point of beginning of the herein described tract of land; thence leaving
said Eastern street line, and running South 85 degrees 17 minutes 58 seconds
West, 17.01 feet to a point; thence along a line parallel with the Eastern line
of Kingshighway Boulevard, North 6 degrees 21 minutes 40 seconds West, 202.48
feet to a point; thence North 36 degrees 10 minutes 13 seconds East, 34.20 feet
to a point; thence along a line parallel with the Southern line of Maryland
Plaza, South 88 degrees 57 minutes 40 seconds East, 107.00 feet to a point;
thence North 86 degrees 28 minutes 40 seconds East, 25.15 feet to a point;
thence along a line parallel with the Southern line of Maryland Plaza, South 88
degrees 57 minutes 40 seconds East, 61.50 feet to a point; thence South 6
degrees 21 minutes 40 seconds East, 14.12 feet to a point on the Southern line
of Maryland Plaza at the Northeast corner of property conveyed to Singleton by
Deed recorded in Book 4189 page 404 of the St. Louis City records; thence along
the Southern line of Maryland Plaza, North 88 degrees 57 minutes 40 seconds
West, 200.00 feet to its intersection with the Eastern line of Kingshighway
Boulevard, as aforementioned; thence along said Eastern street line, South 6
degrees 21 minutes 40 seconds East, 216.87 feet to the point of beginning.


 


Parcel 3 (Fee Simple):


 


A tract of land in Block 3882 of the City of
St. Louis, Missouri, beginning at the intersection of the Northern line of
Lindell Boulevard, 100 feet wide, with the Eastern line of Kingshighway, 100
feet wide; thence along said Eastern line of Kingshighway Boulevard, North 6
degrees 21 minutes 40 seconds West, 247.83 feet to a point; thence leaving said
street line and running the following; North 85 degrees 17 minutes 58 seconds
East, 137.39 feet; South 4 degrees 42 minutes 25 seconds East, 8.16 feet and
South 89 degrees 33 minutes 08 seconds East, 61.67 feet to a point; thence
North 6 degrees 21 minutes 40 seconds West 1.98 feet to a point; thence South
89 degrees 00 minutes 00


 


EXHIBIT A - Page 1


 

















 


seconds East 46.97 feet to a point; thence
North 1 degree 02 minutes 20 seconds East 98.99 feet to a point; thence leaving
said point and running along a line parallel with and 94.00 feet perpendicular
distant South of the Southern line of Maryland Plaza, South 88 degrees 57
minutes 40 seconds East 252.68 feet to a point, said point being distant North
88 degrees 57 minutes 40 seconds West, 68.24 feet from the Western line of York
Avenue, as measured along the last mentioned line and located on the direct
Northward prolongation of the Eastern wall of a concrete parking garage; thence
leaving said point and running along said prolongation, along the Eastern wall
of said parking garage and along its direct Southward prolongation South 1 degree
06 minutes 00 seconds West, 139.23 feet to a point on the Northern line of
property conveyed to “220 Television, Inc.”, by deed recorded in Book 154M page
1091 of the St. Louis City Records, said point being distant North 88 degrees
57 minutes 40 seconds West, 88.41 feet from the Western line of York Avenue, as
measured along said Northern line; thence leaving the aforementioned point and
running along the Northern line of “220 Television, Inc.”, North 88 degrees 57
minutes 40 seconds West, 18.06 feet to the Northwest corner thereof; thence
along the Western line of said property, South 1 degree 02 minutes 20 seconds
West, 25.63 feet to a point on the Northern wall of a one story, brick and
concrete building; thence leaving said Western property line and running along
said Northern wall line South 88 degrees 52 minutes 34 seconds East, 6.97 feet
to the Northeast corner of said one story building and located on the Western
wall of a two story brick and concrete block building; thence along the wall
line of said one story building and said two story building, South 1 degree 06
minutes 59 seconds West, 24.32 feet to a point; thence leaving the Eastern wall
of said one story building and running along the wall of said two story
building the following:  South 88 degrees
53 minutes 01 seconds East, 9.04 feet; South 0 degrees 55 minutes 46 seconds
West, 50.77 feet; North 88 degrees 53 minutes 07 seconds West, 1.20 feet; South
0 degrees 55 minutes 46 seconds West, 1.36 feet and South 88 degrees 53 minutes
07 seconds East, 1.20 feet to a point; thence leaving said wall line and
running South 1 degree 02 minutes 17 seconds West, 111.36 feet to a point on
the Northern line of Lindell Boulevard, as aforementioned, said point being
distant South 89 degrees 00 minutes 00 seconds East, 5.92 feet from the
Southwest corner of property conveyed to “220 Television Inc.”, as measured
along the Northern line of Lindell Boulevard; thence leaving said point and
running along the Northern line of said Lindell Boulevard North 89 degrees 00
minutes 00 seconds West, 464.53 feet to the point of beginning.


 


Parcel 4 (Fee Simple):


 


A tract of land being part of Block 3882 of
the City of St. Louis, Missouri, and described as follows:  Commencing at the intersection of the Eastern
line of Kingshighway Boulevard, 100 feet wide, with the Southern line of
Maryland Plaza, 80 feet wide; thence along said Southern line of Maryland
Plaza, South 88 degrees 57 minutes 40 seconds East, 200.00 feet to a point,
said point being the Northeast corner of property conveyed to Singleton by deed
recorded in Book 4189 page 404 of the St. Louis City records; thence leaving
said street line and running along a line parallel with the Eastern line of
Kingshighway Boulevard and being the Eastern line of said Singleton property
South 6 degrees 21 minutes 40 seconds East, 94.79 feet to a point of beginning
of the herein described tract of land; thence leaving said point and running
along a line parallel with and 94.00 feet perpendicular distance South of the
Southern line of Maryland Plaza, South 88 degrees 57 minutes 40 seconds East,
59.83 feet to a point; thence leaving said point and running South 1 degrees 02
minutes 20 seconds West, 98.99 feet to a point; thence leaving said point and
running along a line parallel with the Northern line of Lindell Boulevard, 100
feet wide, North 89 degrees


 


EXHIBIT A - Page 2


 

















 


00 minutes 00 seconds West, 46.97 feet to a
point on the Eastern line of Singleton as aforementioned; thence along said
Eastern line of North 6 degrees 21 minutes 40 seconds West, 99.85 feet to the
point of beginning.


 


Parcel 5 (Easement):


 


Easement for the benefit of Parcels No. 1, 3,
and 4 herein described for the purpose of vehicular and pedestrian access, ingress
and egress, according to Easement Agreement and Parking Space Lease dated July
31, 1998, by and between W.S. Stallings Corporation, and Kingsdell L.P.,
recorded October 22, 1998 in Book 1444M page 1253 over the area described
therein as follows:  



A tract of land in Block 3882 of the City of St. Louis, Missouri, and described
as follows:  Beginning at a point in the
South line of Maryland Avenue distant 200 feet 0 inches East of the
intersection of said South line with the East line of Kingshighway Boulevard;
thence Southwardly parallel with Kingshighway Boulevard and along the East line
of property conveyed to Marvin E. Singleton by deed recorded in Book 4189 page
404, 94 feet 9-1/2 inches to a point distant 94 feet 0 inches South of the
South line of Maryland Avenue; thence Eastwardly parallel with Maryland Avenue
and along the North line of property conveyed to Harvey Imbolden by deed
recorded in Book 6227 page 294, 62 feet 0-3/8 inches to a point; thence
Northwardly perpendicular with Maryland Avenue, 39 feet 0 inches to a point;
thence Westwardly parallel with Maryland Avenue, 25 feet 6 inches to a point;
thence Northwardly perpendicular with Maryland Avenue, 55 feet 0 inches to a
point in the South line of Maryland Avenue, 48 feet 9 inches to the point of
beginning.


 


Parcel 6 (Easement):


 


Easements for the benefits of Parcels No. 1,
3 and 4 herein described, for the purpose of construction, use, maintenance,
repair and reconstruction of driveways and ingress and egress created by
instrument designated “Driveway Easement Agreement”, dated May 18, 1981 and
recorded in Book 271M page 64 on May 21, 1981 over the following described
property:


 


Easement “A”:


 


A tract of land being part of Block 3882 of
the City of St. Louis, Missouri, and described as follows:  Beginning at a point on the Western line of
York Avenue, 40 feet wide, at the Northeast corner of property conveyed to “220
Television Inc.”, by deed recorded in Book 154M page 1091 of the St. Louis City
records, said point being distant North 7 degrees 08 minutes 40 seconds West,
215.57 feet from the Northern line of Lindell Boulevard, 100 feet wide, as
measured along the Western line of York Avenue; thence leaving said Western
street line and running along the Northern line of “220 Television Inc.”, North
88 degrees 57 minutes 40 seconds West, 88.41 feet to a point, said point being
on the direct Southward prolongation of the Eastern wall of a Concrete Parking
Garage; thence leaving said point and running along said prolongation, North 1
degree 06 minutes 00 seconds East, 20.00 feet to a point; thence leaving said
point and running South 88 degrees 57 minutes 40 seconds East, 85.51 feet to a
point on the Western line of York Avenue, as aforementioned; thence along said
Western street line South 7 degrees 08 minutes 40 seconds East, 20.21 feet to
the point of beginning.


 


EXHIBIT A - Page 3


 

















 


Easement “B”:


 


A tract of land being part of Block 3882 of
the City of St. Louis, Missouri, and described as follows:  Commencing at a point on the Western line of
York Avenue, 40 feet wide, at the Southeast corner of property conveyed to H
& M Koplar by deed recorded in Book 207M page 206 of the St. Louis City
records, said point being distant South 7 degrees 08 minutes 40 seconds East,
94.97 feet from the Southern line of Maryland Plaza, 80 feet wide, as measured
along the Western line of York Avenue; thence along said Western street line
South 7 degrees 08 minutes 40 seconds East, 19.00 feet to the point of beginning
of the herein described tract of land; thence continuing along said street line
South 7 degrees 08 minutes 40 seconds East, 34.00 feet to a point; thence
leaving said Western street line and running North 75 degrees 38 minutes 39
seconds West, 8.51 feet and North 84 degrees 43 minutes 40 seconds West 67.74
feet to a point on the Eastern wall of a concrete parking garage; thence along
said Eastern wall North 1 degree 06 minutes 00 seconds East, 20.50 feet to a
point; thence leaving said point and running North 89 degrees 06 minutes 58
seconds East, 59.61 feet and North 70 degrees 50 minutes 17 seconds East, 12.14
feet to the point of beginning.


 


Parcel 7 (Easement):


 


Easement for the benefit of Parcels No. 1, 3
and 4 herein described, for the purpose of construction use, storage,
maintenance, demolition, repair and reconstruction of a basement, including
access thereto, created by instrument designated “Basement Easement Agreement”,
dated May 18, 1981 and recorded in Book 271M page 84 on May 21, 1981 over the
following described property:



A tract of land being part of Block 3882 of the City of St. Louis, Missouri,
and described as follows:  Commencing at
a point on the Northern line of Lindell Boulevard, 100 feet wide, at the
Southwest corner of property conveyed to “220 Television Inc.”, by deed
recorded in Book 154M page 1091 of the St. Louis City records; thence along the
Northern line of Lindell Boulevard South 89 degrees 00 minutes 00 seconds East,
5.92 feet to a point; thence leaving said street line and running North 1
degrees 02 minutes 17 seconds East, 24.71 feet to the point of beginning of the
herein described tract of land; thence continuing along the last mentioned
line, North 1 degrees 02 minutes 17 seconds East, 86.65 feet to its
intersection with the Southern wall of a two story brick and concrete block
building; thence along the wall of said building the following bearing and
distances:  North 88 degrees 53 minutes
07 seconds West, 1.20 feet; North 0 degrees 55 minutes 46 seconds East, 1.36
feet; South 88 degrees 53 minutes 07 seconds East, 1.20 feet; North 0 degrees
55 minutes 46 seconds East, 50.77 feet and North 88 degrees 53 minutes 01
seconds West, 9.04 feet to its intersection with the Eastern wall of a one
story brick and concrete block building; thence along the wall line of said one
story and said two story buildings North 1 degree 06 minutes 59 seconds East,
24.32 feet to the Northeast corner of said one story building; thence leaving
said point and running the following bearings and distances; South 88 degrees
52 minutes 34 seconds East, 8.51 feet; South 1 degree 06 minutes 59 seconds
West, 12.67 feet; South 88 degrees 53 minutes 01 seconds East, 8.93 feet and
South 1 degree 12 minutes 50 seconds West, 57.77 feet to the Northwest corner of
an eight story brick building; thence along the Western wall of said building
and the following bearings and distances: 
South 1 degree 23 minutes 44 seconds East, 78.19 feet; South 88 degrees
36 minutes 16 seconds West, 0.27 feet and South 1 degree 23 minutes 44 seconds
East,


 


EXHIBIT A - Page 4


 

















 


14.46 feet to the Southwest corner thereof;
thence leaving said point and running North 89 degrees 17 minutes 57 seconds
West, 11.81 feet to the point of beginning.


 


Parcel 8 (Easement):


 


Easements for ingress, egress, and placement
of mechanical systems and storage units created by the Reciprocal Easement
Agreement executed by and between Chase Park Plaza Hotel, LLC and The Private
Residences, LLC dated December 1, 2006 and recorded December 8, 2006 in Book
12082006 page 0382 and rerecorded December 13, 2006 in Book 12132006 page 0266.


 


EXHIBIT A - Page 5


 

















 


EXHIBIT “A-1”


 


LEGAL DESCRIPTION OF MASTER RESIDENTIAL CONDOMINIUM
UNITS


 


Parcel 1 (Fee Simple):


 


Units 8, 10, 11, 12, 13, 14 and 15 of Park
Plaza Master Condominium, a Condominium in City Block 3882, according to the
plat thereof recorded in Book 12082006 page 0379, including an un-divided
interest in the common elements thereto belonging, all according to and more
particularly described in the Master Declaration of Condominium Park Plaza
Master Condominium dated December 1, 2006 and recorded December 8, 2006 in Book
12082006 page 0378 of the St. Louis County Records.


 


Parcel 2 (Easement):


 


Sub-surface easement more particularly
described as follows: A portion of the public street rights-of-way known as
Kingshighway Boulevard, 100 feet wide, and Maryland Plaza, 80 feet wide,
adjacent to Block 3882 of the City of St. Louis, Missouri, lying between
horizontal planes at elevation 72.35 and 82.20 above 0.00 on the St. Louis City
Datum and bounded by vertical planes described as follows: Commencing at the
intersection of the Northern line of Lindell Boulevard, 100 feet wide, with the
Eastern line of Kingshighway Boulevard, 100 feet wide; thence along said
Eastern line of Kingshighway Boulevard, North 6 degrees 21 minutes 40 seconds
West, 233.89 feet to the point of beginning of the herein described tract of
land; thence leaving said Eastern street line, and running South 85 degrees 17
minutes 58 seconds West, 17.01 feet to a point; thence along a line parallel
with the Eastern line of Kingshighway Boulevard, North 6 degrees 21 minutes 40
seconds West, 202.48 feet to a point; thence North 36 degrees 10 minutes 13
seconds East, 34.20 feet to a point; thence along a line parallel with the
Southern line of Maryland Plaza, South 88 degrees 57 minutes 40 seconds East,
107.00 feet to a point; thence North 86 degrees 28 minutes 40 seconds East,
25.15 feet to a point; thence along a line parallel with the Southern line of
Maryland Plaza, South 88 degrees 57 minutes 40 seconds East, 61.50 feet to a
point; thence south 6 degrees 21 minutes 40 seconds East, 14.12 feet to a point
on the Southern line of Maryland Plaza at the Northeast corner of property
conveyed to Singleton by Deed recorded in Book 4189 page 404 of the St. Louis
City records; thence along the Southern line of Maryland Plaza, North 88
degrees 57 minutes 40 seconds West, 200.00 feet to its intersection with the
Eastern line of Kingshighway Boulevard, as aforementioned; thence along said
Eastern street line, South 6 degrees 21 minutes 40 seconds East, 216.87 feet to
the point of beginning.


 


Parcel 3 (Easement):


 


Easement for the purpose of vehicular and
pedestrian access, ingress and egress, according to Easement Agreement and
Parking Space Lease dated July 31, 1998, by and between W.S. Stallings
Corporation, and Kingsdell L.P., recorded October 22, 1998 in Book 1444M page 1253
over the area described therein as follows:


 


A tract of land in Block 3882 of the City of
St. Louis, Missouri, and described as follows: 
Beginning at a point in the South line of Maryland Avenue distant 200
feet 0 inches East of the


 


EXHIBIT A-1 - Page 1


 

















 


intersection of said South line with the East
line of Kingshighway Boulevard; thence Southwardly parallel with Kingshighway
Boulevard along the East line of property conveyed to Marvin E. Singleton by deed
recorded in Book 4189 page 404, 94 feet 9-1/2 inches to a point distant 94 feet
0 inches South of the South line of Maryland Avenue; thence Eastwardly parallel
with Maryland Avenue and along the North line of property conveyed to Harvey
Imbolden by deed recorded in Book 6227 page 294, 62 feet 0-3/8 inches to a
point; thence Northwardly perpendicular with Maryland Avenue, 39 feet 0 inches
to a point; thence Westwardly parallel with Maryland Avenue, 25 feet 6 inches
to a point; thence Northwardly perpendicular with Maryland Avenue, 55 feet 0
inches to a point in the South line of Maryland Avenue, 48 feet 9 inches to the
point of beginning.


 


Parcel 4 (Easement):


 


Easements for the purpose of construction,
use, maintenance, repair and reconstruction of driveways and ingress and egress
created by instrument designated “Driveway Easement Agreement”, dated May 18,
1981 and recorded in Book 271M page 64 on May 31, 1981 over the following
described property:


 


Easement “A”:


 


A tract of land being part of Block 3882 of
the City of St. Louis, Missouri, and described as follows:  Beginning at a point on the West line of York
Avenue, 40 feet wide, at the Northeast corner of property conveyed to “220
Television Inc.”, by deed recorded in Book 154M page 1091 of the St. Louis City
records, said point being distant North 7 degrees 08 minutes 40 seconds West,
215.57 feet from the Northern line of Lindell Boulevard, 100 feet wide, as
measured along the Western line of York Avenue; thence leaving said Western
street line and running along the Northern line of “220 Television Inc.”, North
88 degrees 57 minutes 40 seconds West, 88.41 feet to a point, said point being
on the direct Southward prolongation of the Eastern wall of a Concrete Parking
Garage; thence leaving said point and running along said prolongation, North 1
degree 06 minutes 00 seconds East, 20.00 feet to a point; thence leaving said
point and running South 88 degrees 57 minutes 40 seconds East, 85.51 feet to a
point on the Western line of York Avenue, as aforementioned; thence along said
Western street line South 7 degrees 08 minutes 40 seconds East, 20.21 feet to
the point of beginning.


 


Easement “B”:


 


A tract of land being part of Block 3882 of
the City of St. Louis, Missouri, and described as follows:  Commencing at a point on the Western line of
York Avenue, 40 feet wide, at the Southeast corner of property conveyed to H
& M Koplar by deed recorded in Book 207M page 206 of the St. Louis City
records, said point being distant South 7 degrees 08 minutes 40 seconds East,
94.97 feet from the Southern line of Maryland Plaza, 80 feet wide, as measured
along the Western line of York Avenue; thence along said Western street line
South 7 degrees 08 minutes 40 seconds East, 19.00 feet to the point of
beginning of the herein described tract of land; thence continuing along said
street line South 7 degrees 08 minutes 40 seconds East, 34.00 feet to a point;
thence leaving said Western street line and running North 75 degrees 38 minutes
39 seconds West, 8.51 feet and North 84 degrees 43 minutes 40 seconds West
67.74 feet to a point on the Eastern wall of a concrete parking garage; thence
along said Eastern wall North 1 degree 06 minutes 00 seconds East,


 


EXHIBIT A-1 - Page 2


 

















 


20.50 feet to a point; thence leaving said
point and running North 89 degrees 06 minutes 58 seconds East, 59.61 feet and
North 70 degrees 50 minutes 17 seconds East, 12.14 feet to the point of
beginning.



Parcel 5 (Easement):


 


Easement for the purpose of construction use,
storage, maintenance, demolition, repair and reconstruction of a basement,
including access thereto, created by instrument designated “Basement Easement
Agreement”, dated May 18, 1981 and recorded in Book 271M page 84 on May 21,
1981 over the following described property:


 


A tract of land being part of Block 3882 of
the City of St. Louis, Missouri, and described as follows: Commencing at a
point on the Northern line of Lindell Boulevard, 100 feet wide, at the
Southwest corner of property conveyed to “220 Television Inc.”, by deed
recorded in Book 154M page 1091 of the St. Louis City records; thence along the
Northern line of Lindell Boulevard South 89 degrees 00 minutes 00 seconds East,
5.92 feet to a point; thence leaving said street line and running North 1
degrees 02 minutes 17 seconds East, 24.71 feet to the point of beginning of the
herein described tract of land; thence continuing along the last mentioned
line, North 1 degree 02 minutes 17 seconds East, 86.65 feet to its intersection
with the Southern wall of a two story brick and concrete block building; thence
along the wall of said building the following bearing and distances: North 88
degrees 53 minutes 07 seconds West, 1.20 feet; North 0 degrees 55 minutes 46
seconds East, 1.36 feet; South 88 degrees 53 minutes 07 seconds East, 1.20
feet; North 0 degrees 55 minutes 46 seconds East, 50.77 feet and North 88
degrees 53 minutes 01 seconds West, 9.04 feet to its intersection with the
Eastern wall of a one story brick and concrete block building; thence along the
wall line of said one story and said two story buildings North 1 degree 06
minutes 59 seconds East, 24.32 feet to the Northeast corner of said one story
building; thence leaving said point and running the following bearings and
distances; South 88 degrees 52 minutes 34 seconds East, 8.51 feet; South 1
degree 06 minutes 59 seconds West, 12.67 feet; South 88 degrees 53 minutes 01
seconds East, 8.93 feet and South 1 degree 12 minutes 50 seconds West, 57.77
feet to the Northwest corner of an eight story brick building; thence along the
Western wall of said building and the following bearings and distances: South 1
degree 23 minutes 44 seconds East, 78.19 feet; South 88 degrees 36 minutes 16
seconds West, 0.27 feet and South 1 degree 23 minutes 44 seconds East, 14.46
feet to the Southwest corner thereof; thence leaving said point and running
North 89 degrees 17 minutes 57 seconds West, 11.81 feet to the point of
beginning.


 


Parcel 6 (Easement):


 


Easements for ingress, egress, and placement
of mechanical systems and storage units, created by the Reciprocal Easement
Agreement executed by and between Chase Park Plaza Hotel, LLC and The Private
Residences, LLC, dated December 1, 2006 and recorded December 8, 2006 in Book
12082006 page 0382 and re-recorded December 13, 2006 in Book 12132006 page
0266.


 


EXHIBIT A-1 - Page 3


 

















 


EXHIBIT “B”


 


DEFINITIONS AND FINANCIAL
STATEMENTS


 


1.             DEFINITIONS:


 


As used in
this Agreement and the attached exhibits, the following terms shall have the
following meanings:


 


“1.10xDSC
Performance Threshold” means, for any required period, 110% of the Target
Monthly Amortization for the Loan for such period.


 


“1.35xDSC
Performance Threshold” means, for any required period, 135% of the Target
Monthly Amortization for the Loan for such period.


 


“Adjusted
Expenses” means, for any period, the greater of (1) the actual cash
operating expenses of the Property (excluding non-cash expenses such as
(without limitation) depreciation and expenses paid from reserves) calculated
for each calendar month during such period, but excluding payments of principal
or interest on the Loan; and adjusted to include appropriate monthly accruals
for (i) the actual management fees payable by Borrower (which must be no less
than two and one half percent (2.50%) per annum), (ii) periodic expenses such
as property taxes and insurance, and franchise fees, if any, and (iii) a
reserve equal to the greater of the actual reserves or the Applicable FF&E
Reserves for each calendar month during such period for repairs and
replacements, or (2) the underwritten, annualized operating expenses for the
Property for the applicable period, as determined by Administrative Agent
pursuant to a current MAI appraisal of the Property, prepared by an appraiser
acceptable to Administrative.


 


“Adjusted
Income” means, for any period, all Revenues received by Borrower during
such period, adjusted for each calendar month during such period as necessary
to reflect a vacancy factor/collection loss equal to the actual average vacancy
rate for the Property as a whole during the same period.


 


“Adjusted
LIBOR Rate” means the quotient obtained by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the LIBOR Reserve Percentage,
where,


 


“London
Interbank Offered Rate” means, with respect to any applicable Interest
Period, the rate per annum equal to the British Bankers Association LIBOR Rate
(“BBA LIBOR”), as published by Reuters (or other commercially available
source providing quotations of BBA LIBOR as selected by Administrative Agent in
its good faith business judgment from time to time) at approximately 11:00 a.m.
London time two (2) London Banking Days before the commencement of the Interest
Period, for deposits in U.S. Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period. If such rate
is not available at such time for any reason, then the rate for that Interest
Period will be determined by such alternate method as reasonably selected by
Administrative Agent; and


 


EXHIBIT B - Page 1


 

















 


“LIBOR
Reserve Percentage” means, with respect to any applicable Interest Period,
for any day that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including
basic, supplemental, emergency, special and marginal reserves) generally applicable
to financial institutions regulated by the Federal Reserve Board whether or not
applicable to any Lender, in respect of “Eurocurrency liabilities” (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on LIBOR Rate Principal is determined),
whether or not any Lender has any Eurocurrency liabilities. The LIBOR Rate
shall be adjusted automatically as of the effective date of each change in the
LIBOR Reserve Percentage.


 


“Administrative
Agent” means Bank of America, N.A., in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.


 


“Administrative
Agent Advances” has the meaning set forth in Section 1.14 of this
Agreement.


 


“Administrative
Agent’s NOI Confirmation Letter” means a letter from Administrative Agent
to Borrower confirming that the required NOI performance levels have been
obtained.


 


“Administrative
Agent’s Office” means Administrative Agent’s address and, as appropriate,
account as set forth on the Schedule of Lenders, or such other address or
account as Administrative Agent hereafter may from time to time notify Borrower
and Lenders.


 


“Administrative
Agent’s Time” means the time of day observed in the city where
Administrative Agent’s office is located.


 


“Affiliate”
means any person directly or indirectly through one or more intermediaries
controlling, controlled by, or under direct or indirect common control with,
such person. A person shall be deemed to be “controlled by” any other person if
such other person possesses, directly or indirectly, power (a) to vote 10% or
more of the securities (on a fully diluted basis) having ordinary voting power
for the election of directors or managing members or partners or the
equivalent; or (b) to direct or cause the direction of the management and
policies of such person whether by contract or otherwise.


 


“Agent-Related
Persons” means Administrative Agent, together with its Affiliates
(including Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such persons and Affiliates.


 


“Aggregate
Commitments” means the Commitments of all the Lenders.


 


“Aggregate
Cost” has the meaning set forth in Section 1.4 of this Agreement.


 


“Agreement”
has the meaning set forth in the introductory paragraph of this Agreement, and
includes all exhibits attached hereto and referenced in Section 1.1.


 


EXHIBIT B - Page 2

















 


“Applicable
FF&E Reserves” means an annual amount equal to the amount shown below
in the column entitled “Annual FF&E Reserves” for the applicable calendar
year:


 


	
  Annual FF&E Reserves

  	
   

  	
  Calendar
  Year

  
	
  1.00% of Revenue

  	
   

  	
  2008

  
	
  2.00% of Revenue

  	
   

  	
  2009

  
	
  3.00% of Revenue

  	
   

  	
  2010

  
	
  4.00% of Revenue

  	
   

  	
  2011 and each year thereafter

  



 


“Appraised
Value” means $142,900,000, pursuant to an appraisal that meets the
requirements of this Agreement.


 


“Approved
Lease” means (i) the Hotel Lease, (ii) any Lease (other than a ground
lease) covering any of the Corporate Units which is entered into by Borrower in
the ordinary course of business, on arms length terms and for a term not
exceeding twelve (12) months, and (iii) any Lease of any office, spa,
restaurant, or retail space or other incidental uses executed by Borrower in
the ordinary course of business which (a) is for a term of at least three years
(and any term of greater than three years shall provide for an adjustment in
base rent to a market rate of rent at least once in every additional three year
period), (b) provides for the payment of an annual fixed rent at current market
rates; and (c) covers no more than 7,500 square feet of net rentable space. Any
Lease that does not conform to the foregoing requirements must be submitted to
Agents for review and approval by the Agents prior to the execution of the same
by Borrower.


 


“Architectural
Contract” means that certain AIA - Document B141  — 1997 Part 1, Standard Form of Agreement
between Owner and Architect dated January 1, 2006, executed by and between
Borrower and Condominium Borrower, together as owner, and Ross &
Barruzzini, Inc., as architect.


 


“Arranger”
means, together, Banc of America Securities LLC and National City Bank, as
joint lead arrangers and joint book managers.


 


“Assignment
and Assumption” means an Assignment and Assumption substantially in the
form of Exhibit “K”.


 


“Assignment
of Rents, Leases and Receivables” means the Assignment of Rents, Leases and
Receivables dated of even date herewith encumbering the Property and
collaterally assigning to Administrative Agent for the benefit of Lenders a
first priority collateral assignment and security interest in all rents, room
revenues and other income and receivables from the Property.


 


“Base Rate”
means, on any day, a simple rate per annum equal to the Prime Rate for that day.
Without notice to Borrower or anyone else, the Base Rate shall automatically
fluctuate upward and downward as and in the amount by which the Prime Rate
fluctuates.


 


“Base Rate
Principal” means, at any time, the Principal Debt minus the portion, if
any, of such Principal Debt which is LIBOR Rate Principal and LIBOR Daily Rate
Principal and Letters of Credit which have not been drawn.


 


EXHIBIT B - Page 3


 

















 


“BBA LIBOR
Daily Rate” shall mean a fluctuating rate of interest per annum equal to
the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published
by Reuters (or other commercially available source providing quotations of BBA
LIBOR as selected by Administrative Agent from time to time) as determined for
each Business Day at approximately 11:00 a.m. London time two (2) LIBOR
Business Days prior to the date in question, for U.S. Dollar deposits (for
delivery on the first day of such interest period) with a one month term, as
adjusted from time to time in Administrative Agent’s sole discretion for
reserve requirements, deposit insurance assessment rates and other regulatory
costs. If such rate is not available at such time for any reason, then the rate
will be determined by such alternate method as reasonably selected by
Administrative Agent.


 


“BH Member”
means Behringer Harvard Opportunity OP I LP, a Texas limited partnership.


 


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


 


“Borrower’s
Deposit” has the meaning set forth in Section 1.5 of this Agreement.


 


“Borrower’s
NOI Certificate” means a certificate signed by a duly authorized officer of
Borrower stating that the NOI performance levels required under this Agreement
and/or the Guaranty have been obtained, along with such documents and
information as Administrative Agent may reasonably require to substantiate the
NOI performance levels reflected therein.


 


“Budget”
means the budget and cost itemization for the Project attached as Exhibit “D”,
as amended from time to time in accordance with this Agreement. The Budget the
costs for the Main Hotel Building Renovation Project attached to this Agreement
as Exhibit “D-1” and the costs for the New Hotel Facilities and
Corporate Apartments Project is attached to this Agreement as Exhibit “D-2”.


 


“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where Administrative Agent’s Office is located.


 


“Cash
Collateralize” has the meaning set forth in Section 7 of Exhibit “J”.


 


“Claims”
means any and all claims, demands, liabilities (including strict liability),
losses, damages (including consequential damages), causes of action, judgments,
penalties, fines, costs and expenses (including fees, costs and expenses of
attorneys, consultants, contractors, experts and laboratories incurred in good
faith), of any and every kind of character, contingent or otherwise, matured or
unmatured, known or unknown, foreseeable or unforeseeable.


 


“Closing
Date” means the date of this Agreement.


 


“Commitment”
means, as to each Lender, its obligation (a) to advance its Pro Rata Share of
the Loan and (b) purchase participations in L/C Obligations in an aggregate
principal amount not exceeding the amount set forth opposite such Lender’s name
on the Schedule of Lenders at any one time outstanding, as such amount may be
reduced or adjusted from time to time in accordance with this Agreement.


 


EXHIBIT B - Page 4


 

















 


“Completion
Date” means July 1, 2008, as extended by Excusable Delays (not to exceed 90
days in any event).


 


“Completion
Guarantor” means, together, Kingsdell L.P., a Delaware limited partnership,
and Payment Guarantor.


 


“Condominium”
shall have the meaning given such term in the Master Condominium Declaration.


 


“Condominium
Act” means the Uniform Condominium Act of the State of Missouri (Sections
448.1-101 to 448.4-120 of the Revised Statues of Missouri), as amended from
time to time.


 


“Condominium
Borrower” is defined in the Recitals to this Agreement.


 


“Condominium
Corporate Documents” means the articles of incorporation and by-laws which
shall govern the Master Condominium Association.


 


“Condominium
Deed of Trust” is defined in the Recitals to this Agreement.


 


“Condominium
Loan” is defined in the Recitals to this Agreement.


 


“Condominium
Loan Agreement” is defined in the Recitals to this Agreement.


 


“Condominium
Loan Documents” means the Condominium Loan Agreement, any and all notes,
deed of trust, guaranty, financing statements, and other documents, instruments
or agreements evidencing, securing or pertaining to the Condominium Loan as
shall, from time to time, be executed and/or delivered by Condominium Borrower
or any other party to Administrative Agent, for the benefit of the Lenders, as
they may be amended, modified, restated, replaced and supplemented from time to
time.


 


“Condominium
Tower” is defined in the Recitals to this Agreement.


 


“Construction
Commencement Date” means the date of this Agreement.


 


“Construction
Consultant” means the construction consultant, if any, engaged by
Administrative Agent with respect to the Project.


 


“Construction
Contract” means together, (i) that certain AIA Document A121CMc - 2003 and
AGC Document 565 Standard Form of Agreement between Owner and Construction
Manager (where the Construction Manager is also the Constructor) dated February
6, 2007, executed by Borrower and Condominium Borrower, together as owner, and
General Contractor, regarding the New Hotel Facilities and Corporate Apartments
Project and Residential Condominium Project, as amended by Amendment No. 1 to
Agreement Between Owner and Construction Manager executed by Borrower and
Condominium Borrower on July 10, 1007 and by General Contractor on May 11,
2007, and as further amended by Change Order Number 001 dated July 25, 2007,
and (ii) that certain AIA Document A121CMc - 2003 and AGC Document 565 Standard
Form of Agreement between Owner and Construction Manager (where the
Construction Manager is also the


 


EXHIBIT B - Page 5


 

















 


Constructor)
dated January 1, 2006, executed by Kingsdell L.P., as owner, and MCP of St.
Louis, Inc, regarding the Main Hotel Building Renovation Project, as amended by
Amendment No. 1 to Agreement Between Owner and Construction Manager executed by
Kingsdell L.P. and MCP of St. Louis, Inc. on December 1, 2006.


 


“Construction
Escrow” is defined in the Recitals to this Agreement.


 


“Corporate
Unit” means each apartment unit to be constructed by Borrower on the 6th
through 8th floors of the Condominium Tower and intended to be
operated and leased by Borrower for the purpose of providing temporary housing;
provided  that Borrower shall not operate more than 51 Corporate
Units at any one time without the consent of the Agents but the foregoing
restriction shall not be construed as to prohibit Borrower from using available
(vacant) Corporate Units, from time to time and on a temporary basis, for
guests of the Hotel Project.


 


“Debtor
Relief Laws” means the Bankruptcy Code of the United States of America, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights
of creditors generally.


 


“Deed of
Trust” means the Deed of Trust, Security Agreement, Fixture Filing and
Financing Statement dated of even date with this Agreement, granted by Borrower  to PRLAP, Inc., as Trustee, for Administrative Agent and
Lender’s benefit, encumbering Borrower’s interest in the Land and the
Improvements, securing repayment of the Indebtedness and Borrower’s performance
of its other obligations to Administrative Agent and Lenders under the Loan
Documents, as amended, modified, supplemented, restated and replaced from time
to time.


 


“Deemed
Principal Balance” means, on any date, the Aggregate Commitments less (a)
any principal payments made on the Loan prior to such date, (b) the amount of
any reduction in the 

Aggregate Commitments agreed to in writing by Borrower and Administrative
Agent, and (c) the balance of funds on deposit, if any, in the Reserve Fund
Account as of such date.


 


“Default”
has the meaning set forth in Section 4.1 of this Agreement.


 


“Defaulting
Lender” means a Lender that fails to pay its Pro Rata Share of a Payment
Amount within five (5) Business Days after notice from Administrative Agent,
until such Lender cures such failure as permitted in this Agreement.


 


“Defaulting
Lender Amount” means the Defaulting Lender’s Pro Rata Share of a Payment
Amount.


 


“Defaulting
Lender Payment Amounts” means a Defaulting Lender Amount plus interest from
the date such Defaulting Lender Amount was funded by Administrative Agent
and/or an Electing Lender, as applicable, to the date such amount is repaid to
Administrative Agent and/or such Electing Lender, as applicable, at the rate
per annum applicable to such Defaulting Lender Amount under the Loan or
otherwise at the Base Rate.


 


 


EXHIBIT B - Page 6


 

















 


“Developer”
is defined in the Recitals to this Agreement.


 


“Disbursement
Agent” is defined in the Recitals to this Agreement.


 


“Disbursing
Agreement” is defined in the Recitals to this Agreement.


 


“Dispute”
means any controversy, claim or dispute between or among the parties to this
Agreement, including any such controversy, claim or dispute arising out of or
relating to (a) this Agreement, (b) any other Loan Document,
(c) any related agreements or instruments, or (d) the transaction
contemplated herein or therein (including any claim based on or arising from an
alleged personal injury or business tort).


 


“Draw
Request” has the meaning set forth in Section 1 of Exhibit “F”.


 


“Eligible
Assignee” has the meaning set forth in Section 6.5.


 


“Environmental
Indemnity” means that certain Environmental Indemnity Agreement dated of
even date herewith and executed by and among Borrower, Payment Guarantor and
Administrative Agent.


 


“Excusable
Delay” means a delay, not to exceed a total of fifteen (15) days, caused by
unusually adverse weather conditions which have not been taken into account in
the construction schedule, fire or other casualty, earthquake or other acts of
God, strikes, lockouts, acts of public enemy (including, without limitation,
war), riots or insurrections or any other unforeseen circumstances or events
beyond the control of Borrower (except financial circumstances or events or matters
which may be resolved by the payment of money owed by Borrower), and as to
which Borrower notifies Administrative Agent in writing within ten (10) days
after such occurrence; provided, however, no Excusable Delay shall extend the
Completion Date by more than 90 days or suspend or abate any obligation of
Borrower or any Guarantor or any other person to pay any money.


 


“Existing
Property Listing/Management Agreements” means the following: the Hotel
Operating Agreement and the Hotel/Corporate Development Agreement.


 


“Federal
Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate (rounded upwards to
the next higher 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by Administrative Agent.


 


“FF&E”
means furniture, furnishings, hotel, restaurant and bar equipment and
recreational facilities, fixtures and other items of personalty related to the
hotel constituting a part of the Improvements having a useful life of more than
three years.


 


EXHIBIT B - Page 7


 

















 


“Financial
Statements” means (i) for each reporting party other than an individual, a
balance sheet, income statement, statements of cash flow and amounts and
sources of contingent liabilities, a reconciliation of changes in equity and
liquidity verification, and unless Administrative Agent otherwise consents,
consolidated and consolidating statements if the reporting party is a holding
company or a parent of a subsidiary entity, each prepared in accordance with
GAAP; and (ii) for each reporting party who is an individual, a balance sheet,
statements of amount and sources of contingent liabilities, sources and uses of
cash and liquidity verification and, unless Administrative Agent otherwise
consents, Financial Statements for each entity owned or jointly owned by the
reporting party, each prepared in accordance with GAAP. For purposes of this
definition and any covenant requiring the delivery of Financial Statements,
each party for whom Financial Statements are required is a “reporting party”
and a specified period to which the required Financial Statements relate is a “reporting
period”.


 


“First
Rate Reduction Date” means the date on which Administrative Agent confirms
that all of the following conditions have been satisfied or occurred:


 


(i)            The Completion Date shall have occurred and
the New Improvements shall be subject to no lien or claim of lien except the
liens of the Loan Documents and Permitted Encumbrances (or liens which have
been bonded around or are being contested in accordance with the provisions of
the Loan Documents).


 


(ii)           All conditions to the final advance of the Loan for the New
Improvements referred to in Exhibit “F”
hereto shall have been satisfied.


 


(iii)          There shall then exist
no Default or Potential Default.


 


(iv)          The NOI for the Property, verified by Administrative Agent’s NOI
Confirmation Letter after receipt of Borrower’s NOI Certificate, based on the
most recent twelve (12) calendar months is not less than the 1.10xDSC
Performance Threshold based on same twelve (12) calendar month period. Borrower
shall have the right to prepay the Loan in accordance with Section 1.8
hereof in an amount sufficient to satisfy the 1.10xDSC Performance Threshold.


 


“Funding
Date” means the date on which an advance of Loan proceeds or Borrower’s
Deposit shall occur.


 


“GAAP”
means generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, in each
case as the same are applicable to the circumstances as of the date of
determination.


 


“General
Contractor” means BSI Constructors, Inc., a Missouri corporation.


 


“Guarantor”
means, together, each Completion Guarantor and the Payment Guarantor.


 


 


EXHIBIT B - Page 8


 

















 


“Guaranty”
means each guaranty agreement executed by a Guarantor to Administrative Agent
on behalf of the Lenders with regard to certain of Borrower’s obligations under
the Loan Documents.


 


“Hotel
Agreement” is defined in Section 2.17 of this Agreement.


 


“Hotel/Corporate
Units Development Agreement” is defined in the Recitals to this Agreement.


 


“Hotel/Corporate
Units” is defined in the Recitals to this Agreement.


 


“Hotel
Lease” means that certain Lease Agreement dated as of December 1, 2006,
executed by Borrower, as lessor, and Hotel Lessee, as lessee, regarding the
lease of the Hotel Project.


 


“Hotel
Lessee” means Kingsdell L.P., a Delaware limited partnership.


 


“Hotel
Manager” means CWE Hospitality Services, LLC, a Missouri limited liability
company.


 


“Hotel
Operating Agreement” means that certain Hotel Operating Agreement dated as
of December 1, 2006, executed by Hotel Lessee and Hotel Manager.


 


“Hotel
Project” is defined in the Recitals to this Agreement.


 


“Hotel Room”
means each separate living unit within the Hotel Project which is intended to
be operated by Borrower for overnight lodging of guests. The Main Hotel
Building include 251 Hotel Rooms. Upon completion of construction of the Main
Hotel Building Renovation Project and the New Hotel Facilities and Corporate
Apartments Project, the Hotel Project will contain a total of 338 Hotel Rooms.


 


“Improvements”
means, collectively, the Main Hotel Building, the Hotel/Corporate Units, the
Parking Garages and all other on-site and off-site improvements on or
appurtenant to the Land, together with all necessary furniture, fixtures and
equipments, and appurtenances now or later to be located on the Land and/or in
such improvements. The Improvements include all existing improvements and the
New Improvements to be constructed on the Land.


 


“Indebtedness”
means (i) any and all indebtedness to Administrative Agent, L/C Issuer or
Lenders evidenced, governed or secured by, or arising under, any of the Loan
Documents, including the Loan, and all Letters of Credit, and (ii) any and all
indebtedness owed to Swap Bank pursuant to any Swap Transactions.


 


“Indemnified
Liabilities” has the meaning set forth in Section 6.1.


 


“Indemnified
Parties” means (i) Administrative Agent on behalf of itself and the
Lenders, and each Lender; (ii) the Trustee(s) under the Deed of Trust (the “Trustee”);
(ii) any persons or entities owned or controlled by, owning or controlling, or
under common control or affiliated with Lender and/or Trustee; (iii) any
participants in the Loan; (iv) the directors, officers, partners, employees and
agents of Administrative Agent or any Lender and/or Trustee, and/or such
persons


 


 


EXHIBIT B - Page 9


 

















 


or entities;
and (v) the heirs, personal representatives, successors and assigns of each of
the foregoing persons or entities.


 


“Interest
Period” means with respect to any LIBOR Rate Principal, the period
commencing on the date such LIBOR Rate Principal is disbursed or on the date on
which the Principal Debt or any portion thereof is converted into or continued
as such LIBOR Rate Principal, and ending on the date one (1), two (2), three
(3), six (6) or twelve (12) months thereafter, as elected by Borrower in the
applicable Rate Election Notice; provided  that:


 


(i)            Each
Interest Period must commence on a LIBOR Business Day;


 


(ii)           In the case of the
continuation of LIBOR Rate Principal, the Interest Period applicable after the
continuation of such LIBOR Rate Principal shall commence on the last day of the
preceding Interest Period;


 


(iii)          The last day for each
Interest Period and the actual number of days during the Interest Period shall
be determined by Administrative Agent using the practices of the London
interbank eurodollar market; and


 


(iv)          No Interest Period shall
extend beyond the Maturity Date, and any Interest Period which begins before
the Maturity Date and would otherwise end after the Maturity Date shall instead
end on the Maturity Date.


 


“L/C
Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Loan advance.


 


“L/C Credit
Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.


 


“L/C Issuer”
means Bank of America, N.A. in its capacity as issuer of Letters of Credit
hereunder or any successor issuer of Letter of Credit hereunder.


 


“L/C
Obligations” means, as at any date of determination, the aggregate undrawn
face amount of all outstanding Letters of Credit plus the aggregate of
all L/C Borrowings.


 


“Land”
means the real property described in Exhibit “A” attached hereto.


 


“Laws”
means all constitutions, treaties, statutes, laws, ordinances, regulations,
rules, orders, writs, injunctions, or decrees of the United States of America,
any state or commonwealth, any municipality, any foreign country, any territory
or possession, or any Tribunal.


 


“Leases”
means, the Hotel Lease, and any other present and future ground leases, space
leases, subleases or other agreements or arrangements, whether written or oral,
and all agreements for the use or occupancy of any portion of the Property,
together with any and all extensions or renewals of said leases and agreements
and any and all future leases or agreements upon or covering the use or
occupancy of all or a part of the Property.


 


“Lender”
means each lender from time to time party to this Agreement and L/C Issuer.


 


EXHIBIT B - Page 10


 

















 


“Lending
Office” means, as to any Lender, the office or offices of such Lender
described as such on the Schedule of Lenders, or such other office or
offices as such Lender may from time to time notify Borrower and Administrative
Agent.


 


“Letter of
Credit” means any letter of credit issued hereunder.


 


“Letter of
Credit Application” means an application and agreement for the issuance or
amendment of a letter of credit in the form attached hereto as Exhibit “P”.


 


“Letter of
Credit Expiration Date” means the day that is seven days prior to the
Maturity Date (or, if such day is not a Business Day, the next preceding
Business Day).


 


“Letter of
Credit Sublimit” means an amount equal to $5,000,000.00. The Letter of
Credit Sublimit is part of, and not in addition to, the combined Commitments.


 


“LIBOR
Business Day” means a Business Day which is also a London Banking Day.


 


“LIBOR
Daily Rate” means for any LIBOR Daily Rate Principal, a simple rate per
annum equal to the sum of the BBA LIBOR Daily Rate plus the LIBOR Margin.


 


“LIBOR
Daily Rate Election” means an election made by Borrower of an applicable
LIBOR Daily Rate in accordance with this Agreement.


 


“LIBOR
Daily Rate Principal” means any portion of the Principal Debt which bears
interest at an applicable LIBOR Daily Rate at the time in question.


 


“LIBOR
Margin” means, for the applicable period during the term of the Loan set
forth below, the percentage set forth below
opposite such period:


 


	
  Applicable Period

  	
   

  	
  Applicable Margin

  	
   

  
	
  After the Closing Date to and including First Rate Reduction Date

  	
   

  	
  2.15

  	
  %

  
	
  After the First Rate Reduction Date to and including the Second Rate
  Reduction Date

  	
   

  	
  2.00

  	
  %

  
	
  After the Second Rate Reduction Date

  	
   

  	
  1.75

  	
  %

  



 


“LIBOR Rate”
means for any applicable Interest Period for any LIBOR Rate Principal, a simple
rate per annum equal to the sum of the LIBOR Margin plus the Adjusted LIBOR
Rate.


 


“LIBOR Rate
Election” means an election by Borrower of an applicable LIBOR Rate in
accordance with this Agreement.


 


“LIBOR Rate
Principal”  means any portion of the
Principal Debt which bears interest at an applicable LIBOR Rate at the time in
question.


 


“Loan”
is defined in the Recitals to this Agreement.


 


“Loan
Documents” means this Agreement (including all exhibits), the Deed of
Trust, any Note, any guaranty, financing statements, Assignment of Rents,
Leases and Receivables, the


 


EXHIBIT B - Page 11


 

















 


Environmental
Indemnity, the Budget, each Draw Request, any and all documents, instruments or
agreements executed and delivered to evidence, secure or in connection with all
Letters of Credit, each Master Agreement executed in connection with any Swap
Transaction, and such other documents evidencing, securing or pertaining to the
Loan or any Swap Transaction as shall, from time to time, be executed and/or
delivered by Borrower, Guarantor, or any other party to Administrative Agent or
any Lender pursuant to this Agreement or any Master Agreement, as they may be
amended, modified, restated, replaced and supplemented from time to time. The
Loan Documents do not include the Condominium Loan Documents.


 


“London
Banking Day” means a day on which dealings in dollar deposits are conducted
by and between banks in the London interbank eurodollar market.


 


“Main Hotel
Budget” is defined in Section 1.4 of this Agreement.


 


“Main Hotel
Building” is defined in the Recitals to this Agreement.


 


“Main Hotel
Building Renovation Project” is defined in the Recitals to this Agreement.


 


“Master
Agreement” is defined in the Deed of Trust.


 


“Master
Condominium Association”  means Park
Plaza Master Condominium Association, a Missouri non-profit corporation,
created to serve as the condominium owner’s association pursuant to the
requirements of the Condominium Act and the Master Condominium Declaration.


 


“Master
Condominium Declaration” means that certain Master Declaration of
Condominium dated as of December 1, 2006, filed by Kingsdell L.P., a Missouri
limited partnership, as declarant, in the Office of the Recorder of Deeds for
the City of St. Louis, Missouri, on December 8, 2006, at Book 12082006, Page
0378, as the same may be hereafter amended, modified, supplemented and restated
from time to time.


 


“Master
Residential Condominium Units” is defined in the Recitals to this
Agreement.


 


“Material
Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the Project, or the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of
Borrower or Borrower and its Subsidiaries taken as a whole; or (b) the business
or financial ability of Borrower or Guarantor to fulfill any material
obligation under the Loan Documents is materially impaired; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against any party to the Loan Documents of any Loan Document to which it is a
party.


 


“Material
Contract” means a contract or agreement for the performance of any work or
the supplying of any labor, materials or service in excess of $1,000,000.00.


 


“Maturity
Date” means November 15, 2010, as it may be earlier terminated or extended
in accordance with the terms hereof.


 


“New Hotel
Budget” is defined in Section 1.4 of this Agreement.


 


EXHIBIT B - Page 12


 

















 


“New Hotel
Facilities and Corporate Apartments Project” is defined in the Recitals to
this Agreement.


 


“New
Improvements” means the portion of the existing Improvements on the Land to
be constructed by or on behalf of Borrower as part of the Main Hotel Building
Renovation Project and the New Hotel Facilities and Corporate Apartments
Project.


 


“NOI”
means, for any period, the amount, if any, by which the Adjusted Income for
such period exceeds the Adjusted Expenses for such period.


 


“Note[s]”
means the Promissory Notes executed by Borrower and payable to the order of
each Lender in the amount of each Lender’s Commitment and collectively in the
maximum principal amount of the Loan, substantially in the form of Exhibit “L”
as amended, modified, replaced, restated, extended or renewed from time to
time.


 


“Obligations”
means all liabilities, obligations, covenants and duties of, any party to a
Loan Document arising under or otherwise with respect to any Loan Document,
whether direct or indirect (including those acquired by assumption), absolute
or contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrues after the commencement by or against
any party to a Loan Document or any Affiliate thereof of any proceeding under
any Debtor Relief Laws naming such person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceedings.


 


“On” or
“on”, when used with respect to the Property or any property adjacent to
the Property, means “on, in, under, above or about”.


 


“Parking
Garages” is defined in the Recitals to this Agreement.


 


“Past Due
Rate” is defined in Section 1.7.6 of this Agreement.


 


“Payment
Amount” means an advance of the Loan, an unreimbursed Administrative Agent
Advance, an unreimbursed Indemnified Liability, a reimbursement to L/C Issuer
for an unreimbursed drawing under a Letter of Credit, or any other amount that
a Lender is required to fund under this Agreement.


 


“Payment
Guarantor” means Behringer Harvard Opportunity REIT I, Inc., a Maryland
corporation.


 


“Permitted
Changes” means changes to the Plans or Improvements, provided the cost of
any single change or extra does not exceed $100,000.00 and the aggregate amount
of all such changes and extras (whether positive or negative) does not exceed
$500,000.00.


 


“Permitted
Encumbrances” shall have the meaning assigned to such term in the Deed of
Trust.


 


“Plans”
means the plans and specifications listed in Exhibit “E” and all
modifications thereof and additions thereto that are included as part of the
Plans as the same shall be approved or deemed


 


EXHIBIT B - Page 13


 

















 


approved by
Administrative Agent in the exercise of its sole discretion in accordance with
the terms of this Agreement.


 


“Potential
Default” means any condition or event which with the giving of notice or
lapse of time or both would, unless cured or waived, become a Default.


 


“Prime Rate”
means, on any day, the rate of interest per annum then most recently
established by Administrative Agent as its “prime rate,” it being understood
and agreed that such rate is set by Administrative Agent as a general reference
rate of interest, taking into account such factors as Administrative Agent may
deem appropriate, that it is not necessarily the lowest or best rate actually
charged to any customer or a favored rate, that it may not correspond with
future increases or decreases in interest rates charged by other lenders or
market rates in general, and that Administrative Agent may make various
business or other loans at rates of interest having no relationship to such
rate. If Administrative Agent (including any subsequent Administrative Agent)
ceases to exist or to establish or publish a prime rate from which the Prime
Rate is then determined, the applicable variable rate from which the Prime Rate
is determined thereafter shall be instead the prime rate reported in The
Wall Street Journal (or the average prime rate if a high and a low prime
rate are therein reported), and the Prime Rate shall change without notice with
each change in such prime rate as of the date such change is reported.


 


“Principal
Debt” means the aggregate unpaid principal balance of this Loan at the time
in question.


 


“Pro Rata
Share” means, with respect to each Lender at any time, a fraction expressed
as a percentage, the numerator of which is the amount of the Commitment of such
Lender at such time and the denominator of which is the amount of the Aggregate
Commitments at such time or, if the Aggregate Commitments have been terminated,
a fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the total outstanding amount of all Indebtedness held
by such Lender at such time (taking into account funded participations in L/C
Obligations) and the denominator of which is the total outstanding amount of
all Indebtedness at such time. The initial Pro Rata Share of each Lender named
on the signature pages hereto is set forth opposite the name of that Lender on
the Schedule of Lenders.


 


“Project”
means the renovation and/or construction of all improvements constituting part
of the Main Hotel Building Renovation Project and the New Hotel Facilities and
Corporate Apartments Project, and if applicable, the leasing and operation of
the Hotel Project.


 


“Property”
means the Land, the Improvements and all other property constituting the “Mortgaged
Property,” as described in the Deed of Trust, or subject to a right, lien or
security interest to secure the Loan pursuant to any other Loan Document.


 


“Release
Date” means the earlier of the following two dates:  (i) the date on which the indebtedness and
obligations secured by the Deed of Trust have been paid and performed in full
and the Deed of Trust has been released; or (ii) the date on which the lien of
the Deed of Trust is fully and finally foreclosed or a conveyance by deed in
lieu of such foreclosure is fully and finally effective and possession of the
Property has been given to and accepted by the purchaser or grantee free of
occupancy and claims to occupancy by Borrower and their heirs, devisees,
representatives,


 


EXHIBIT B - Page 14


 

















 


successors and
assigns; provided that, if such payment, performance, release, foreclosure or
conveyance is challenged, in bankruptcy proceedings or otherwise, the Release
Date shall be deemed not to have occurred until such challenge is validly
released, dismissed with prejudice or otherwise barred by law from further
assertion.


 


“Required
Lenders” means as of any date of determination at least two Lenders having
at least 66-2/3% of the Aggregate Commitments or, if the Aggregate Commitments
have been terminated, at least two Lenders holding in the aggregate at least
66-2/3%  of the total outstanding amount of all
Indebtedness (taking into account funded participations in L/C Obligations); provided
that the Commitment of, and the portion of the total outstanding amount of all
Indebtedness (taking into account
funded participations in L/C Obligations) held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.


 


“Reserve
Fund Account” is defined in Section 2.19 of this Agreement.


 


“Residential
Condominium Project” is defined in the Recitals to this Agreement.


 


“Residential
Development Agreement” is defined in the Recitals to this Agreement.


 


“Residential
Sub-Condominium Declaration” is defined in the Recitals to this Agreement.


 


“Restricted
Line Items” is defined in Section 1.4(h) of this Agreement.


 


“Revenues”
means all income, rents, room rates, issues, profits and revenues from the
operation of the Property, including, without limitation, all revenues and
credit card receipts collected from guest rooms, restaurants, bars, mini-bars,
meeting rooms, banquet rooms and recreational facilities and otherwise,
concession fees and rentals arising from or relating to the Property.


 


“Schedule
of Lenders” means the schedule of Lenders party to this Agreement as set
forth on Exhibit “M”, as it may be modified from time to time in
accordance with this Agreement.


 


“Second
Rate Reduction Date” means the date on which Administrative Agent confirms
that all of the following conditions have been satisfied or occurred: (i)
there shall then exist no Default or Potential Default, and (ii) the NOI for
the Property, verified by Administrative Agent’s NOI Confirmation Letter after
receipt of Borrower’s NOI Certificate, based on the most recent twelve (12)
calendar months, is not less than the 1.35xDSC Performance Threshold based on
same twelve (12) calendar month period. Borrower shall have the right to prepay
the Loan in accordance with Section 1.8 hereof in an amount sufficient
to satisfy the 1.35x Performance Threshold.


 


“Stored
Materials Advance Limit” means $500,000.00.


 


“Subsidiary”
means a corporation, partnership, joint venture, limited liability company or
other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time


 


 


EXHIBIT B - Page 15


 

















 


beneficially
owned, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries.


 


“Survey”
means a survey prepared in accordance with Exhibit “G” or as otherwise
approved by Administrative Agent in its good faith business judgment.


 


“Swap
Transaction” has the meaning set forth in the Deed of Trust.


 


“Target
Monthly Amortization” as used in this Agreement means, for any period, the hypothetical
monthly payment of principal and interest which would be required for each
month during such period if the Deemed Principal Balance was amortized in level
payments of principal and interest over a thirty (30) year period at an
interest rate per annum equal to the greater of (i) 7.0% per annum, or (ii)
1.75% plus the Treasury Rate.


 


“Title
Company” means St. Louis Title, LLC, as agent for Fidelity National Title
Insurance Company.


 


“Title
Insurance” means the loan policy or policies of title insurance issued to
Administrative Agent for the benefit of Lenders by the Title Company, in an
amount equal to the maximum principal amount of the Loan, insuring the validity
and priority of the Deed of Trust encumbering Borrower’s interest in the Land
and Improvements for the benefit of Administrative Agent and Lenders.


 


“Treasury
Rate” means the rate of interest per annum on U.S. Treasury Notes having a
maturity of ten years as shown in the 10-year listing in the “this week” column
under the heading “Treasury Constant Maturities,” of the FEDERAL RESERVE
statistical release FORM H-15 which, as of the date that is 10 days prior to
the end of the applicable period, has been most recently published (or, if for
any reason that published rate is not available, another rate determined by
Administrative Agent to be comparable, in its discretion reasonably exercised,
shall be used for this purpose).


 


“Tribunal”
means any state, commonwealth, federal, foreign, territorial or other court or
governmental department, commission, board, bureau, district, authority,
agency, central bank, or instrumentality, or any arbitration authority.


 


“Unit”
and “Units” is defined in the Recitals to this Agreement.


 


2.             FINANCIAL
STATEMENTS:


 


Borrower shall
provide or cause to be provided to Administrative Agent with a copy for each
Lender all of the following:


 


(a)           Financial Statements of
Borrower, for each fiscal year of Borrower, as soon as reasonably practicable
and in any event within one hundred twenty (120) days after the close of each
fiscal year.


 


(b)           For each calendar month
(and for the fiscal year through the end of that month) a statement of all
income and expenses in connection with the Property, certified in writing as
true


 


EXHIBIT B - Page 16


 

















 


and correct by
an authorized representative of Borrower satisfactory to Administrative Agent,
delivered within thirty (30) days after the end of such calendar month. Items
provided under this paragraph shall be in form and detail satisfactory to
Administrative Agent.


 


(c)           On or before December
15th of each calendar year, a capital and operating budget for the
Property for the projected operation of the Property for the following calendar
year, including the budgets required to be delivered by Hotel Lessee to
Borrower pursuant to Section 4.7 of the Hotel Lease.


 


(d)           For the full calendar
month immediately prior to the original Maturity Date (and the first day of
each Extension Period, as applicable, if the Maturity Date is extended), a
Borrower’s NOI Certificate setting forth the NOI for the Property for the
immediately preceding twelve (12) calendar months prior to the date of such
Borrower’s NOI Certificate. Each Borrower’s NOI Certificate will be delivered
by Borrower to Administrative Agent within twenty-one (21) days after the end
of each of the full calendar month immediately preceding the original Maturity
Date (or the first day of each Extension Period, as applicable).


 


(e)           If Borrower desires to
request a reduction in the LIBOR Margin, then for the full calendar month
immediately prior to the date of Borrower’s request for a reduction in the
LIBOR Margin, a Borrower’s NOI Certificate setting forth the NOI for the
Property for the immediately preceding 12 calendar months prior to the date of
such Borrower’s NOI Certificate. Each Borrower’s NOI Certificate will be
delivered by Borrower to Administrative Agent within twenty-one (21) days after
the end of each of the full calendar month immediately preceding the date of
Borrower’s request for a reduction in the LIBOR Margin.


 


(f)            Within twenty-one (21)
days after the end of each calendar month after the Conditions to Liability
Reduction (as defined in the Guaranty) have been satisfied, a Borrower’s NOI
Certificate setting forth the NOI for the Property for the immediately
preceding twelve (12) full calendar months.


 


(g)           Within ten (10) days
after repayment in full of the Condominium Loan, a Borrower’s NOI Certificate,
setting forth the NOI for the Property for the twelve (12) full calendar months
immediately preceding the date of repayment of the Condominium Loan and, within
ten (10) days after every Test Date thereafter, a Borrower’s NOI Certificate
setting forth the NOI for the Property for the twelve (12) full calendar months
ending on the last day of the calendar month immediately preceding the
applicable Test Date.


 


(h)           The Financial
Statements and Compliance Certificate (as defined in the Guaranty) in
accordance with the requirements of, and within the time periods required by,
Section 19 of the Guaranty.


 


(i)            From time to time
promptly after Administrative Agent’s request, such additional information,
reports and statements respecting the Property and the Improvements, or the
business operations and financial condition of each reporting party, as
Administrative Agent may reasonably request.


 


EXHIBIT B - Page 17


 

















 


All Financial Statements shall
be in form and detail satisfactory to Administrative Agent and shall contain or
be attached to the signed and dated written certification of the reporting
party in form specified by Administrative Agent to certify that the Financial
Statements are furnished to Administrative Agent in connection with the
extension of credit by Lenders and constitute a true and correct statement of
the reporting party’s financial position; provided, however, Administrative
Agent agrees that the Financial Statements of Borrower and Guarantor delivered
to Administrative Agent in satisfaction of the requirements of Exhibit “C” hereto
are satisfactory as to form, detail and accounting principles used therein and
Financial Statements to be provided in satisfaction of the requirements of this
Agreement and the other loan documents shall be satisfactory to Administrative
Agent as to form, detail and accounting principles if consistent with such
Financial Statements. All certifications and signatures on behalf of
corporations, partnerships or other entities shall be by a representative of
the reporting party satisfactory to Administrative Agent. All fiscal year-end
Financial Statements of each Guarantor shall be audited, without any
qualification or exception not acceptable to Administrative Agent, by
independent certified public accountants acceptable to Administrative Agent,
and shall contain all reports and disclosures required by generally accepted
accounting principles for a fair presentation and all quarterly Financial
Statements of Guarantor shall be certified, without any qualification or
exception not acceptable to Administrative Agent in its good faith business
judgment, by a duly authorized officer of Borrower or BH Member. All fiscal
year-end Financial Statements of Borrower shall be certified, without any
qualification or exception not acceptable to Administrative Agent in its good
faith business judgment, by a duly authorized officer of Borrower or BH Member,
and shall contain all reports and disclosures required by generally accepted
accounting principles for a fair presentation.


 


EXHIBIT B - Page 18


 

















 


EXHIBIT “C”


 


CONDITIONS PRECEDENT TO THE FIRST ADVANCE


 


As conditions
precedent to the first advance of Loan proceeds, if and to the extent required
by Administrative Agent, Administrative Agent shall have received and approved
the following:


 


1.             Fees and Expenses.
Any and all required commitment and other fees and expenses (including the fees
and costs of Administrative Agent’s counsel) then required to be paid pursuant
to the Fee Agreement, this Agreement and all other Loan Documents, including,
without limitation, all fees, costs and expenses that Borrower is required to
pay pursuant to any loan application or commitment.


 


2.             Financial
Statements. The Financial Statements of Borrower and Guarantor or any other
party required by Administrative Agent.


 


3.             Appraisal. A
market value appraisal of the Property made within one hundred eighty (180)
days prior to the Closing Date, which appraises the Property on a “completed
value” basis at not less than the Appraised Value. The appraiser and appraisal
must be satisfactory to Administrative Agent (including satisfaction of
applicable regulatory requirements) and the appraiser must be engaged directly
by Administrative Agent.


 


4.             Draw Schedule and
Budget. Borrower’s proposed cash flow, draw schedule, and construction
schedule for the Project, and Administrative Agent shall be satisfied, in its
good faith business judgment, that the New Improvements may be completed in
accordance with the construction schedule and for costs not exceeding those set
forth in the Budget.


 


5.             Authorization.
Evidence of the existence, good standing, authority and capacity of Borrower,
Guarantor, and their respective officers or BH Member, to execute, deliver and
perform their respective obligations to Administrative Agent and Lenders under
the Loan Documents, including:


 


(a)           For each partnership
(including a joint venture or limited partnership):  (i) a true and complete copy of an executed
partnership agreement or limited partnership agreement, and all amendments thereto;
(ii) for each limited partnership, a copy of the certificate of limited
partnership and all amendments thereto accompanied by a certificate issued by
the appropriate governmental official of the jurisdiction of formation that the
copy is true and complete, and evidence of Borrower’s registration or
qualification to do business in the state where Borrower’s and BH Member’s
principal place of business is located, and (iii) a partnership certificate
certifying who will be authorized to execute or attest any of the Loan
Documents, and a true and complete copy of all necessary resolutions approving
the Loan Documents and authorizing the transactions contemplated in this
Agreement and the other Loan Documents.


 


(b)           For each
corporation:  (i) a true and complete
copy of its articles of incorporation and by-laws, and all amendments thereto,
a certificate of incumbency of all of its officers who are authorized to
execute or attest to any of the Loan Documents, and a true and complete copy of
resolutions approving the Loan Documents and authorizing the transactions
contemplated in this


 


EXHIBIT C - Page 1


 

















 


Agreement and
the other Loan Documents and evidence of Borrower’s and BH Member’s
registration or qualification to do business in the state where Borrower’s and
BH Member’s principal place of business is located and, as to Borrower, the
state where the Property is located; and (ii) certificates of existence, good
standing and qualification to do business issued by the appropriate
governmental officials in the state of its formation.


 


(c)           For each limited
liability company or limited liability partnership: (i) a true and complete
copy of the articles of organization and operating agreement, and all
amendments thereto, a certificate of incumbency of all of its members, managers
or officers, as applicable, who are authorized to execute or attest to any of
the Loan Documents, and a true and complete copy of resolutions approving the
Loan Documents and authorizing the transactions contemplated in this Agreement
and the other Loan Documents and evidence of Borrower’s and BH Member’s
registration or qualification to do business in the state where Borrower’s and
BH Member’s principal place of business is located and, as to Borrower, the
state where the Property is located; and (ii) certificates of existence, good
standing and qualification to do business issued by appropriate governmental
officials in the state of its formation and, as to Borrower, the state in which
the Property is located.


 


(d)           For each entity or
organization that is not a corporation, partnership, limited partnership, joint
venture, limited liability company or limited liability partnership, a copy of
each document creating it or governing the existence, operation, power or
authority of it or its representatives.


 


(e)           All certificates,
resolutions, and consents required by Administrative Agent applicable to the
foregoing.


 


6.             Loan Documents.
From Borrower, Guarantor and each other party to the Loan Documents, duly
executed, acknowledged and/or sworn to as required, and delivered to
Administrative Agent (with a copy for each Lender) Loan Documents, dated the
Closing Date, each in form and content satisfactory to Administrative Agent,
and evidence that the Deed of Trust has been recorded in the official records
of the city or county in which the Property is located and UCC-1 financing
statements have been filed in all filing offices that Administrative Agent may
require.


 


7.             Opinions. The
written opinion of counsel satisfactory to Administrative Agent for Borrower
and Guarantor addressed to Administrative Agent for the benefit of Lenders,
dated the Closing Date.


 


8.             Survey; No Special
Flood Hazard. (a) two (2)  prints of
an original survey (with a copy for each Lender) of the Land and improvements
thereon dated not more than sixty (60) days prior to the Closing Date (or dated
such earlier date, if any, as is satisfactory to the Title Company, but in any
event not more than one hundred eighty (180) days prior to the Closing Date)
satisfactory to Administrative Agent and the Title Company and otherwise, to
the extent required by Administrative Agent in its good faith business
judgment, complying with Exhibit “G”, and (b) a flood insurance policy
(with a copy for each Lender) in an amount equal to the lesser of the maximum
Loan amount or the maximum amount of flood insurance available under the Flood
Disaster Protection Act of 1973, as amended, and otherwise in compliance with
the requirements of


 


EXHIBIT C - Page 2


 

















 


the Loan
Documents, or evidence satisfactory to Administrative Agent that none of the
Land is located in a flood hazard area.


 


9.             Title Insurance.
An ALTA title insurance policy (or a title insurance policy promulgated by the
laws of the state in which the Property is located if an ALTA insurance policy
is not available), issued by the Title Company (which shall be approved by
Administrative Agent in its good faith business judgment) in the maximum amount
of the Loan, on a coinsurance and/or reinsurance basis if and as required by
Administrative Agent, insuring without exclusion or exception for creditors’
rights that the Deed of Trust constitutes a valid lien covering Borrower’s
interest in the Land and all Improvements thereon, having the priority required
by Administrative Agent and subject only to those exceptions and encumbrances
(regardless of rank or priority) Administrative Agent approves, in a form
acceptable to Administrative Agent, and with all “standard” exceptions which
can be deleted, including the exception for matters which a current survey
would show, deleted to the fullest extent authorized under applicable title
insurance rules, and Borrower shall satisfy all requirements for the issuance of
such policy; containing no exception for standby fees or real estate taxes or
assessments other than those for the year in which the closing occurs to the
extent the same are not then due and payable and endorsed “not yet due and
payable” and no exception for subsequent assessments for prior years; providing
full coverage against mechanics’ and materialmens’ liens to the extent
authorized under applicable title insurance rules, and Borrower shall satisfy
all requirements therefor; insuring that no restrictive covenants shown in the
Title Insurance have been violated (or that such restrictive covenants are
unenforceable as a matter of Law pursuant to an endorsement approved by
Administrative Agent), and that no violation of the restrictions will result in
a reversion or forfeiture of title; insuring all appurtenant easements;
insuring that Borrower’s fee estate in the Land and Improvements is marketable,
vested in Borrower; containing such affirmative coverage and endorsements as
Administrative Agent may require and are available under applicable title
insurance rules, and Borrower shall satisfy all requirements therefor; insuring
any easements, leasehold estates or other matters appurtenant to or benefiting
the Land and/or the Improvements as part of the insured estate; insuring the
right of access to the Land to the extent authorized under applicable title
insurance rules, and Borrower shall satisfy all requirements therefor; and
containing provisions acceptable to Administrative Agent in its good faith business
judgment regarding advances and/or readvances of Loan funds after closing. Borrower
and Borrower’s counsel shall not have any interest, direct or indirect, in the
Title Company (or its agent) or any portion of the premium paid for the Title
Insurance.


 


10.           Plans. Two (2)
true and correct copies of all existing Plans (including the site plan),
together with evidence satisfactory to Administrative Agent in its good faith
business judgment that all Tribunals, Borrower, Borrower’s architect, engineer,
and contractors and Construction Consultant have approved the same.


 


11.           Contracts. (a) a
list containing the names and addresses of all existing contracts, the parties
thereto, their respective contract amounts, and a copy of their contracts; and
(b) duly executed, acknowledged (if applicable) and delivered originals from
each contractor, architect, engineer, subcontractor, or supplier of services or
materials required by Administrative Agent, of (i) consents or other agreements
satisfactory to Administrative Agent and (ii) agreements with respect to each
of the Material Contracts satisfactory to Administrative Agent in its good
faith business


 


EXHIBIT C - Page 3


 

















 


judgment
subordinating all rights, liens, claims and charges they may have or acquire
against Borrower or the Property to the rights, liens and security interests of
Lenders.


 


12.           Insurance Policies.
The insurance policies initially required by Administrative Agent, pursuant to
the Loan Documents, together with evidence satisfactory to Administrative Agent
that all premiums therefor have been paid for a period of not less than one (1)
year from the Closing Date and that the policies are in full force and effect.


 


13.           Environmental
Compliance/Report. Evidence satisfactory to Administrative Agent that no
portion of the Land is “wetlands” under any applicable Law and that the Land
does not contain and is not within or near any area designated as a hazardous
waste site by any Tribunal, that neither the Property nor any adjoining
property contains or has ever contained any substance classified as hazardous
or toxic (or otherwise regulated, such as, without limitation, asbestos, radon
and/or petroleum products) under any Law or governmental requirement pertaining
to health or the environment, and that neither the Property nor any use or
activity thereon violates or is or could be subject to any response,
remediation, clean-up or other obligation under any Law or governmental
requirement pertaining to health or the environment including without
limitation, a written report of an environmental assessment of the Property,
made within twelve (12) months prior to the Closing Date, by an engineering
firm, and of a scope and in form and content satisfactory to Administrative
Agent, complying with Administrative Agent’s established guidelines, showing
that there is no evidence of any such substance which has been generated,
treated, stored, released or disposed of in the Property, and such additional
evidence as may be required by Administrative Agent. All reports, drafts of
reports, and recommendations, whether written or oral, from such engineering
firm shall be made available and communicated to Administrative Agent.


 


14.           Access, Utilities,
and Laws. (a) evidence satisfactory to Administrative Agent in its good
faith business judgment that the Property abuts and has fully adequate direct
and free access to one or more public streets, dedicated to public use, fully
installed and accepted by the appropriate Tribunal, that all fees, costs and
expenses of the installation and acceptance thereof have been paid in full, and
that there are no restrictions on the use and enjoyment of such streets which
would materially adversely affect the Property; (b) evidence satisfactory to Administrative
Agent that all applicable zoning ordinances, restrictive covenants and
governmental requirements affecting the Property permit the use for which the
Property is intended and have been or will be complied with without the
existence of any variance, non-complying use, nonconforming use or other
special exception; (c) evidence satisfactory to Administrative Agent that the
Land and Improvements comply and will comply with all Laws and governmental
requirements regarding subdivision and platting and would so comply if the Land
and the Improvements thereon were conveyed as a separate parcel; (d) a true and
correct copy of a valid building permit for the New Improvements, together with
all other consents, licenses, permits and approvals necessary for construction
of the New Improvements, all in assignable form (to the extent appropriate) and
in full force and effect; and (e) evidence satisfactory to Administrative Agent
of compliance by Borrower and the Property, and the proposed construction, use
and occupancy of the New Improvements, with such other applicable Laws and
governmental requirements as Administrative Agent may request, including all
Laws and governmental requirements regarding access and facilities for
handicapped or disabled persons including, without limitation and to the extent
applicable, The Federal Architectural Barriers Act (42 U.S.C. § 4151 et seq.),
The Fair Housing Amendments Act of 1988 (42 U.S.C. §


 


EXHIBIT C - Page 4


 

















 


3601 et seq.),
The Americans With Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.), The
Rehabilitation Act of 1973 (29 U.S.C. § 794), and any applicable state
requirements.


 


16.           Priority. (a)
evidence satisfactory to Administrative Agent in its good faith business judgment
that prior to and as of the time the Deed of Trust was filed for record no
mechanic’s or materialman’s lien claim or notice, lis pendens, judgment, or
other claim or encumbrance against the Property has been filed for record in
the county where the Property is located or in any other public record which by
Law provides notice of claims or encumbrances regarding the Property; (b) a
certificate or certificates of a reporting service acceptable to Administrative
Agent, reflecting the results of searches made not earlier than ten (10) days
prior to the Closing Date, (i) of the central and local Uniform Commercial Code
records, showing no filings against any of the collateral for the Loan or
against Borrower otherwise except as consented to by Administrative Agent or
that will be released contemporaneously with the execution and delivery of this
Agreement; and (ii) if required by Administrative Agent, of the appropriate
judgment and tax lien records, showing no outstanding judgment or tax lien
against Borrower or Guarantor.


 


17.           Bonds. (a) a
performance bond for each subcontractor that is a party to a Material Contract,
in amount, form and content satisfactory to Administrative Agent and (b) a
payment bond, in form and content satisfactory to Administrative Agent for each
of the following subcontractors:  AME
(carpentry labor), Niehaus Construction Services (drywall), Midwest Elevator
(elevators), St. Louis Automatic Sprinkler Company (fire sprinklers), Eagle
Plumbing (plumbing), and Briner Electric (electrical). Each bond shall be
issued by a corporate surety acceptable to Administrative Agent and authorized
and admitted to do business and to execute bonds in the state where the
Property is located.


 


18.           Tax and Standby Fee
Certificates. Evidence satisfactory to Administrative Agent in its good
faith business judgment (a) of the identity of all taxing authorities and
utility districts (or similar authorities) having jurisdiction over the
Property or any portion thereof; (b) that all taxes, standby fees and any other
similar charges currently due and payable have been paid, including, if
available, copies of receipts or statements marked “paid” by the appropriate
authority; and (c) that the Land is a separate tax lot or lots with separate
assessment or assessments of the Land and Improvements, independent of any
other land or improvements and that the Land is a separate legally subdivided
parcel.


 


19.           Other Documents.
Such other documents and certificates as Administrative Agent may reasonably
request from Borrower, any Guarantor, and any other person or entity, in form
and content satisfactory to Administrative Agent.


 


20.           Up-front Equity.
Evidence satisfactory to Administrative Agent that the Up-front Equity has been
fully paid and funded.


 


21.           Borrower Identification
Due Diligence. All due diligence materials deemed necessary by
Administrative Agent and each Lender with respect to verifying Borrower’s
identity and background information in a manner satisfactory to Administrative
Agent and each Lender.


 


22.           Liquor Licenses.
Copies of the liquor licenses applicable to operations at the Hotel Project.


 


EXHIBIT C - Page 5


 

















 


23.           Project Documents.
True and correct copies of the Hotel Lease, the Hotel Operating Agreement, the
Hotel/Corporate Development Agreement, the Residential Development Agreement,
and the Disbursing Agreement.


 


24.           Tax Credit
Documentation. Copies of all applications and other information regarding
the historic tax credits for which Borrower has applied, the criteria and
conditions precedent for issuance of such tax credits and the estimated time
period by which such tax credits may be issued.


 


EXHIBIT C - Page 6