EXHIBIT 10.3


 




 





Construction Loan Agreement


 


among


 


THE PRIVATE RESIDENCES, 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

  	
  2

  
	
  1.1

  	
  General Information and Exhibits

  	
  2

  
	
  1.2

  	
  Purpose

  	
  3

  
	
  1.3

  	
  Commitment to Lend

  	
  3

  
	
  1.4

  	
  Budget

  	
  4

  
	
  1.5

  	
  Borrower’s Deposit

  	
  6

  
	
  1.6

  	
  Evidence of Debt

  	
  6

  
	
  1.7

  	
  Interest Rates

  	
  7

  
	
  1.8

  	
  Prepayment

  	
  10

  
	
  1.9

  	
  Consequential Loss

  	
  11

  
	
  1.10

  	
  Late Charge

  	
  11

  
	
  1.11

  	
  Taxes

  	
  12

  
	
  1.12

  	
  Payments and Maturity Date

  	
  13

  
	
  1.13

  	
  Advances and Payments

  	
  13

  
	
  1.14

  	
  Administrative Agent Advances

  	
  15

  
	
  1.15

  	
  Defaulting Lender

  	
  15

  
	
  1.16

  	
  Several Obligations; No Liability, No
  Release

  	
  18

  
	
  1.17

  	
  Replacement of Lenders

  	
  18

  
	
  1.18

  	
  Borrower’s Rights

  	
  18

  
	
  1.19

  	
  Swap Transactions.

  	
  19

  
	
   

  	
   

  	
   

  
	
  Article 2 – ADDITIONAL COVENANTS AND
  AGREEMENTS 

  	
  20

  
	
  2.1

  	
  Construction of the New Improvements

  	
  20

  
	
  2.2

  	
  Plans and Changes

  	
  20

  
	
  2.3

  	
  Contracts

  	
  21

  
	
  2.4

  	
  Assignment of Contracts and Plans

  	
  21

  
	
  2.5

  	
  Storage of Materials

  	
  22

  
	
  2.6

  	
  Construction Consultant

  	
  22

  
	
  2.7

  	
  Inspection

  	
  23

  
	
  2.8

  	
  Notice to Administrative Agent

  	
  23

  
	
  2.9

  	
  Financial Statements

  	
  23

  
	
  2.10

  	
  Other Information

  	
  23

  
	
  2.11

  	
  Reports and Testing

  	
  24

  
	
  2.12

  	
  Advertising by Lenders

  	
  24

  
	
  2.13

  	
  Appraisal

  	
  24

  
	
  2.14

  	
  Payment of Withholding Taxes

  	
  24

  
	
  2.15

  	
  ERISA and Prohibited Transaction Taxes

  	
  25

  
	
  2.16

  	
  Contest of Claims

  	
  25

  
	
  2.17

  	
  Project Documents

  	
  26

  
	
  2.18

  	
  Single Purpose Entity/Separateness

  	
  26

  
	
  2.19

  	
  Reserve Fund

  	
  27

  
	
  2.20

  	
  Historic Tax Credits

  	
  28

  



 


i

















 


	
  2.21

  	
  Representations and Covenants Regarding
  Master Condominium

  	
  28

  
	
  2.22

  	
  Representations and Covenants Regarding
  Residential Condominium

  	
  29

  
	
  2.23

  	
  Unit Sales Contracts

  	
  30

  
	
  2.24

  	
  Partial Releases of Units

  	
  32

  
	
  2.25

  	
  Interstate Land Sales Act

  	
  32

  
	
  2.26

  	
  Earnest Money Deposits

  	
  33

  
	
   

  	
   

  	
   

  
	
  Article 3 – REPRESENTATIONS AND WARRANTIES

  	
   33

  
	
   

  	
   

  
	
  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

  	
  42

  
	
  5.3

  	
  Liability of Administrative Agent

  	
  42

  
	
  5.4

  	
  Reliance by Administrative Agent

  	
  42

  
	
  5.5

  	
  Notice of Default

  	
  43

  
	
  5.6

  	
  Credit Decision; Disclosure of Information
  by Administrative Agent

  	
  43

  
	
  5.7

  	
  Indemnification of Administrative Agent

  	
  44

  
	
  5.8

  	
  Administrative Agent in Individual Capacity

  	
  44

  
	
  5.9

  	
  Successor Administrative Agent

  	
  45

  
	
  5.10

  	
  Releases; Acquisition and Transfers of
  Collateral

  	
  45

  
	
  5.11

  	
  Application of Payments

  	
  47

  
	
  5.12

  	
  Benefit

  	
  47

  
	
  5.13

  	
  Co-Agents; Lead Managers

  	
  48

  
	
   

  	
   

  	
   

  
	
  Article 6 – GENERAL TERMS AND CONDITIONS 48

  	
   

  
	
  6.1

  	
  Consents; Borrower’s Indemnity

  	
  48

  
	
  6.2

  	
  Miscellaneous

  	
  50

  
	
  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

  	
  58

  
	
  6.11

  	
  Tax Forms

  	
  58

  
	
  6.12

  	
  Further Assurances

  	
  60

  
	
  6.13

  	
  Inducement to Lenders

  	
  61

  
	
  6.14

  	
  Forum

  	
  61

  
	
  6.15

  	
  Interpretation

  	
  61

  
	
  6.16

  	
  No Partnership, etc

  	
  61

  
	
  6.17

  	
  Records

  	
  62

  
	
  6.18

  	
  Commercial Purpose

  	
  62

  



 


ii

















 


	
  6.19

  	
  Service of Process

  	
  62

  
	
  6.20

  	
  USA Patriot Act Notice

  	
  62

  
	
  6.21

  	
  Entire Agreement

  	
  62

  
	
  6.22

  	
  Dispute Resolution

  	
  63

  
	
  6.23

  	
  Waiver of Jury Trial

  	
  65

  
	
  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

  
	
  EXHIBIT “E”

  	
   

  	
  –

  	
   

  	
  List of Plans

  
	
  EXHIBIT “F”

  	
   

  	
  –

  	
   

  	
  Advances

  
	
  EXHIBIT “F-1”

  	
   

  	
  –

  	
   

  	
  Form of Draw Request

  
	
  EXHIBIT “G”

  	
   

  	
  –

  	
   

  	
  Survey Requirements

  
	
  EXHIBIT “H”

  	
   

  	
  –

  	
   

  	
  List of Units and Minimum
  Release Prices

  
	
  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 THE PRIVATE RESIDENCES, LLC, a
Delaware limited liability company (“Borrower”), who agree as follows:


 


RECITALS


 


A.            Borrower’s affiliate, Chase Park Plaza Hotel, LLC, a
Delaware limited liability company (“Hotel 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.            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 Hotel Borrower intend to re-develop and
renovate the Main Hotel Building, Condominium Tower and Parking Garages as
follows: (i) Hotel 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) Hotel Borrower intends to renovate the Hotel/Corporate
Units and the Parking Garages, it being the intent of Hotel 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) Borrower intends to construct approximately eighty-six (86)
residential for-sale condominium units within the Master Residential
Condominium Units in the Condominium Tower (the “New Improvements”).


 


CONSTRUCTION LOAN AGREEMENT
- Page 1


 

















 


D.            In order to accomplish the sale of condominium units
within the Condominium Tower, 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 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.             Hotel Borrower has requested that the Lenders agree to
make a construction loan to Hotel Borrower in an amount not to exceed
$86,200,000.00 (the “Hotel 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 Hotel Loan will be
evidenced by that certain Construction Loan Agreement dated of even date
herewith, executed by Hotel Borrower, Administrative Agent, Syndication Agent
and the Lenders (as the same may be amended, modified, restated, replaced and
supplemented from time to time, the “Hotel Loan Agreement”). The Hotel
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 Hotel Borrower  to
PRLAP, Inc., as Trustee, for Administrative Agent and Lenders’ benefit,
encumbering Hotel Borrower’s interest in the Hotel Project (the “Hotel 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 $58,800,000.00 (the “Loan”) for the
purpose of financing, in part, the construction of the New Improvements. The
Loan shall be secured, in part, by the Deed of Trust (as hereinafter defined)
and the Hotel Deed of Trust.


 


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


 


H.            In connection with the making of the Loan, 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.


 


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


 


CONSTRUCTION LOAN AGREEMENT
- Page 2


 

















 


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

  
	
  Exhibit “E”

  	
   

  	
  –

  	
   

  	
  List of Plans

  
	
  Exhibit “F”

  	
   

  	
  –

  	
   

  	
  Advances

  
	
  Exhibit “F-1”

  	
   

  	
  –

  	
   

  	
  Form of Draw Request

  
	
  Exhibit “G”

  	
   

  	
  –

  	
   

  	
  Survey Requirements

  
	
  Exhibit “H”

  	
   

  	
  –

  	
   

  	
  List of Units and Minimum
  Release Prices

  
	
  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 New
Improvements, and (ii) pay other fees, costs and expenses relating to the New
Improvements 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 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.


 


CONSTRUCTION LOAN AGREEMENT
- Page 3


 

















 


1.4           Budget.


 


(a)           The Budget for the Project is attached to this Agreement
as Exhibit “D”. 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 $40,340,451.00 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 Net Sales Proceeds are sufficient 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 $350,000 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 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


 


CONSTRUCTION LOAN AGREEMENT
- Page 4


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT
- Page 5


 

















 


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.


 


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


 


CONSTRUCTION LOAN AGREEMENT
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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 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


 


CONSTRUCTION LOAN AGREEMENT
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(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;


 


(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


 


CONSTRUCTION LOAN AGREEMENT
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(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.


 


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


 


CONSTRUCTION LOAN AGREEMENT
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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.


 


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


 


CONSTRUCTION LOAN AGREEMENT
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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.


 


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,


 


CONSTRUCTION LOAN AGREEMENT
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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 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.


 


CONSTRUCTION LOAN AGREEMENT
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(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         Payments and Maturity Date. 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. Simultaneously with the sale of each
Unit pursuant to a Qualified Unit Sales Contract, Borrower shall make principal
paydowns on the Loan in an amount equal to the Release Price applicable to such
Unit sold.


 


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 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.


 


CONSTRUCTION LOAN AGREEMENT
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(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:


 


(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


 


CONSTRUCTION LOAN AGREEMENT
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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 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).


 


CONSTRUCTION LOAN AGREEMENT
- Page 15


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT
- Page 16


 

















 


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.


 


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.


 


CONSTRUCTION LOAN AGREEMENT
- Page 17


 
















 


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.


 


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


 


CONSTRUCTION LOAN AGREEMENT - Page18


 

















 


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 a 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 Contract 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 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.


 


(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


 


CONSTRUCTION LOAN AGREEMENT - Page 19


 

















 


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.


 


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 (temporary or final) and all other
permits, licenses and approvals from all applicable governmental authorities
required for the occupancy, use and sale of the Units for residential housing
purposes, 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


 


CONSTRUCTION LOAN AGREEMENT - Page 20


 

















 


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 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. 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
and the Existing 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


 


CONSTRUCTION LOAN AGREEMENT - Page 21


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT - Page 22


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT - Page 23


 

















 


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 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.


 


CONSTRUCTION LOAN AGREEMENT - Page 24


 

















 


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.


 


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


 


CONSTRUCTION LOAN AGREEMENT - Page 25


 

















 


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.


 


2.17         Project Documents. There is no property management, consulting,
brokerage or marketing license agreement or other similar contract or agreement
(each a "Project Document") in effect that relates to the
Property, except the Existing Agreements. Borrower will not enter into
any other Project Document of any kind or character unless and until (i)
Administrative Agent approves the form and substance of such Project Document,
and (ii) the parties to such Project Document 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 Project Document 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
Project Document 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 the members of Borrower 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 members (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


 


CONSTRUCTION LOAN AGREEMENT - Page 26


 

















 


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 Hotel Loan are and will be cross-defaulted
and cross-collateralized. If the Loan is repaid in full at any time before the
Hotel Loan is repaid in full and the obligations of the Lenders under the Hotel
Loan Agreement are terminated and the NOI (as defined in the Hotel Loan
Agreement) for the Hotel Project is less than the 1.35xDSC Performance
Threshold (as defined in the Hotel Loan Agreement), then Borrower shall
establish the Reserve Fund Account (as defined in the Hotel Loan Agreement),
which Reserve Fund Account shall be assigned by Borrower to Administrative
Agent, for the ratable benefit of the Lenders, as additional collateral for the
Hotel Loan and the obligations of the Hotel Borrower arising under the Hotel
Loan Documents. Thereafter, all Net Sales Proceeds generated by the sale of the
Units shall be delivered by Borrower to Administrative Agent and deposited by
Administrative Agent in the Reserve Fund Account until such time as Borrower is
no longer required to deliver such Net Sales Proceeds to Administrative Agent
pursuant to paragraph (c) below.


 


(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 it shall include all interest and earnings on
any funds in the Reserve Fund Account as its income (and, if 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 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 Hotel Project. If, as of any
Test Date, the NOI for the Hotel Project, based on the most recent twelve (12)
full calendar months, is 


 


CONSTRUCTION LOAN AGREEMENT - Page 27


 

















 


(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 Borrower the
Excess Reserve Funds (as defined below) then on deposit in the Reserve Fund
Account, and (2) Borrower shall no longer be required to deposit Net Sales
Proceeds into the Reserve Fund Account; or


 


(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 shall continue to make deposits of
Net Sales Proceeds in the Reserve Fund Account.


 


If, as of any Test Date, the NOI for the
Hotel Project, 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 (as defined in the Hotel Loan
Agreement) 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 Borrower the Reserve Funds then on
deposit in the Reserve Fund Account, and (ii) 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 Borrower partial releases
with respect to each Unit thereafter sold by Borrower; provided that if a
Default occurs and is continuing under the Hotel 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 in
full of the Obligations (as defined in the Hotel Loan Agreement) and
termination of all Swap Transactions (as defined in the Hotel Loan Agreement),
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 Hotel Loan pursuant to a schedule to be approved by the
Agents. 


 


2.21         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


 


CONSTRUCTION LOAN AGREEMENT - Page 28


 

















 


with the requirements of the Master
Condominium Declaration, and all officers contemplated by the Master
Condominium Declaration and the Condominium Corporate Documents for the Master
Condominium Association shall have been appointed or elected, as the case may
be; (iii) Borrower and Hotel Borrower are 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 for the Master Condominium
Association. 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 for the Master
Condominium Association 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 Master
Residential Condominium 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.


 


2.22         Representations
and Covenants Regarding Residential Condominium. Borrower hereby represents, warrants and
covenants with Administrative Agent that (i) 
Borrower will deliver to Agents for their prior review and approval,
true and correct copies of the Residential Sub-Condominium Declaration and
Condominium Corporate Documents for the Residential Condominium Association
before the same are executed and recorded; (ii) the Residential Sub-Condominium
Declaration and the Condominium created thereby will comply with all of the
requirements of the Condominium Act and will be sufficient under Missouri law
to permit each Unit to be sold to third parties; (iii) the Residential
Condominium Association has been (or will be) formed as a non-profit
corporation under the laws of the State of Missouri, the board of directors have
been (or will be) appointed in accordance with the requirements of the
Residential Sub-Condominium Declaration, and all officers contemplated by the
Residential Sub-Condominium Declaration and the Condominium Corporate Documents
applicable to the Residential Condominium Association have been (or will be)
appointed or elected, as the case may be; (iv) Borrower shall be the sole
declarant and holder of any development rights under the Residential
Sub-Condominium Declaration and no rights or interests of Borrower as declarant
or holder of such development rights shall have been assigned or encumbered
except pursuant to the Loan Documents and none will be without the prior
written consent of Administrative Agent; (v) there shall be no agreements to
which Borrower is a party relating to the Condominium created by the
Residential Sub-Condominium Declaration other than the Unit Sales Contracts,
the Residential Sub-Condominium Declaration, the Condominium Corporate
Documents for the Residential Condominium Association, rules and regulations of
the Residential Condominium Association, the


 


CONSTRUCTION LOAN AGREEMENT - Page 29


 

















 


Permitted Encumbrances, and other agreements
executed in the ordinary course of business of the ownership, operation and
maintenance of the Condominium established by the Residential Sub-Condominium
Declaration that have been approved by Administrative Agent. Borrower will not
amend or supplement in any material respect or consent to any material
amendment or material supplement of the Residential Sub-Condominium Declaration
or the Condominium Corporate Documents for the Residential Condominium
Association without the prior approval of Agents, which approval shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, Borrower may
amend the Residential Sub-Condominium Declaration without the consent of the
Agents if such amendment is required to combine two or more Units purchased by
the same Unit Purchaser so long as (i) the proposed amendment does not modify
the terms of the Residential Sub-Condominium except as may be required to
combine the applicable Units, (ii) the amendment is made effective only upon
the closing of the sale of the affected Units to the Unit Purchaser, and (iii)
Borrower delivers the amendment to Administrative Agent at or prior to the
closing of the sale of such Units. Borrower shall (i) at all times exercise its
rights and powers as declarant and as an owner of a Unit in accordance with the
Residential Sub-Condominium Declaration and the Condominium Act; and (ii) use
reasonable efforts to cause the officers and directors of the Residential
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 Units.
Within thirty (30) days after the Closing Date, Borrower shall have finalized
the Residential Sub-Condominium Declaration and the Original Sale Certificate
to be delivered to each Unit Purchaser under a Unit Sales Contract and
delivered the same to Agents for their final review and approval. Agents
acknowledge that each has received and approved preliminary drafts of the
Residential Sub-Condominium Declaration and that  Agents will not unreasonable withhold their
consent to the final Residential Sub-Condominium Declaration if the same
contains no material changes to the draft previously reviewed by Agents. Once
Agents have approved the Residential Sub-Condominium Declaration,
Administrative Agent shall be authorized, without the consent of the Lenders,
to execute a subordination of the lien of the Deed of Trust (and the Hotel Deed
of Trust) to the terms and provisions of the Residential Sub-Condominium
Declaration (but not assessments which may thereafter become due and payable
thereunder). Once Agents have approved the final form of the Residential
Sub-Condominium Declaration, Borrower shall deliver (or cause to be delivered)
to each Unit Purchaser under any existing Unit Sales Contract, a Original Sale
Certificate and shall obtain a dated, written acknowledgment from each Unit
Purchaser that such Unit Purchaser has received the Original Sale Certificate.
If, following delivery to any Unit Purchaser of the Original Sale Certificate,
any Unit Purchaser exercises its right of rescission under the Condominium Act
to rescind its Units Sales Contract, Borrower shall so notify Administrative
Agent. On or before March 31, 2008, Borrower shall deliver to Agents a
definitive list of all Unit Purchasers (i) who have received (and acknowledged
in writing receipt of) an Owners Sale Certificate, (ii) who have not elected to
exercise any right to rescind the Unit Sales Contract as provided in Section
448.4-108 of the Condominium Act, and (iii) for whom such right of rescission
under the Condominium Act has expired.


 


2.23         Unit Sales
Contracts.


 


(a)           Without
Administrative Agent's prior written consent, Borrower shall not enter into any
Unit Sales Contract (i) with any Affiliate of Borrower or any member of
Borrower, (ii) unless


 


CONSTRUCTION LOAN AGREEMENT - Page 30


 

















 


and until the form of Unit Sales Contract has been approved by
Administrative Agent, and (iii) unless the Unit Sales Contract constitutes a
Qualified Units Sales Contract. The Unit Sales Contract form must include the
following:  (i) the Unit Purchaser
thereunder may not assign the Unit Sales Contract, and may not advertise, list
or otherwise market the Unit for resale prior to acquisition of the Unit by
such Unit Purchaser, (ii) the Unit Purchaser shall deposit with Borrower or
Escrow Agent an Earnest Money Deposit, all Borrower's rights and interests in
the Earnest Money Deposit shall be assigned and pledged hereunder by Borrower
to Administrative Agent, on behalf of the Lenders, as additional collateral for
the Loan, (iii) Borrower shall have the right to enforce the remedy of specific
performance upon a default by Unit Purchaser; provided, however,
that if any Unit Purchaser objects to the granting of such rights to Borrower
in the Unit Sales Contract, Borrower may in its discretion, remove the remedy
of specific performance from the Units Sales Contract; and (iv) upon the
closing of the sale of the Unit, the Unit Purchaser thereunder shall become a
member of the Residential Condominium Association and shall become subject to
the terms and provisions of the Residential Sub-Condominium Declaration, the
Condominium Corporate Documents applicable to the Residential Condominium
Association and the rules and regulations adopted or to be adopted by the
Residential Condominium Association. No one Unit Purchaser (individually, or in
combination with any relative or affiliate of such Unit Purchaser) may acquire
more than one Unit without the prior written consent of Agents; provided,
however, that this restriction shall not preclude any Unit Purchaser
from acquiring two or more existing Units that are adjacent to one another for
the purpose of combining the Units. 


 


(b)           Borrower shall
comply in all material respects with the obligations of seller under each Unit
Sales Contract and shall comply with all laws and legal requirements applicable
to the sale of such Unit, including without limitation but only to the extent
applicable, the Condominium Act, the Interstate Land Sales Act (to the extent
an Unit Sales Contract is not exempt from the Interstate Land Sales Act) and
applicable state and federal securities laws. Borrower shall use commercially
reasonable efforts to enforce all of seller's rights and remedies under each
Unit Sales Contract but shall not terminate or cancel or amend or supplement in
any material respect any Unit Sales Contract or waive any material duty or
material obligation or otherwise release a Unit Purchaser from any of the
material obligations of such Unit Purchaser under the Unit Sales Contract,
unless (i) Unit Purchaser is legally entitled to a release under the express
terms of the Unit Sales Contract; (ii) Borrower concludes that the applicable Unit
can be resold for substantially the same price or more and Borrower is legally
entitled to terminate the Unit Sales Contract by the express terms of the Unit
Sales Contract; or (iii) Borrower shall have first obtained the prior written
consent of Administrative Agent, which consent shall not be unreasonably
withheld or delayed. Promptly after obtaining knowledge thereof, Borrower shall
notify Administrative Agent in writing of any material breach by any Unit
Purchaser under any Unit Sales Contract, any event or condition which would
permit a Unit Purchaser to terminate or cancel his or her Unit Sales Contract,
or any notice given by a Unit Purchaser with respect to the foregoing or the
occurrence of a default or breach by Borrower under such Unit Sales Contract,
specifying in each case the action Borrower has taken or will take to cure such
default or breach. Administrative Agent may contact any Unit Purchaser at any
time to determine the status of the applicable Unit Sales Contract and any
matters relating thereto.


 


CONSTRUCTION LOAN AGREEMENT - Page 31


 

















 


2.24         Partial Releases
of Units.
Administrative Agent shall grant partial releases of the lien of the Deed of
Trust subject to and conditioned upon the satisfaction of each of the following
conditions precedent:


 


(a)           The partial releases
shall relate only to individual Units and parking space(s), if any, and the
undivided interest in the Common Elements applicable to the Units being sold
pursuant to Qualifying Unit Sales Contracts.


 


(b)           If more than one
Unit is sold to any Unit Purchaser and the Units are to be combined into a
single, lawful Unit, Borrower shall deliver to Administrative Agent the
amendment to the Residential Sub-Condominium Declaration required to combine
the affected Units into one single, lawful Unit.


 


(c)           With respect to each
Unit, subject to clause (d) below, Borrower shall pay to Administrative Agent
for the ratable benefit of all Lenders, the Release Price.


 


(d)           No Default shall
have occurred under the Loan Documents which remains uncured after the
expiration of applicable grace or notice periods (provided, however, that
Borrower shall be entitled to complete the sale of any Unit in accordance with
the terms of any Qualifying Unit Sales Contract entered into (1) prior to the
date of such Default or (2) after a Default with the consent of Agents, which
consent will not be unreasonably withheld if the Qualifying Unit Sales Contract
otherwise meets the requirements of this Agreement, so long as (i) no more than
five (5) Qualifying Unit Sales Contract with Unit Purchasers affiliated with
Borrower, Hotel Borrower, Guarantor or any of their members or owners, however
remotely may be consummated after a Default and (ii) Borrower pays to Administrative
Agent an amount equal to 100% of the net sales proceeds generated by the sale
of the applicable Unit (and such net sales proceeds is not less than the
Release Price for such Unit).


 


(e)           Administrative Agent
shall have received (i) a form of partial release, in recordable form, relating
to the Unit and parking space(s), if any, and the applicable undivided interest
in the Common Elements, reasonably satisfactory to Administrative Agent; and
(ii) a final copy of the settlement statements for each of the parties to the
applicable Qualifying Unit Sales Contract, signed by the applicable party and
certified as true and correct by the title company handling the closing.


 


(f)            Borrower shall have
certified, in writing, to Administrative Agent that neither Borrower nor any
Affiliate of Borrower has received any consideration in connection with the
sale of the Unit except as disclosed to Administrative Agent in writing.


 


(g)           Borrower shall have
reimbursed Administrative Agent for its out-of-pocket expenses incurred in
connection with the partial release.


 


2.25         Interstate
Land Sales Act. Borrower represents and warrants that all existing and
future Unit Sales Contracts either are or will be exempt from the registration
requirements of the Interstate Land Sales Act. Borrower covenants and agrees to
not enter into any Unit Sales Contract unless such contract is exempt from the
registration requirements of the Interstate Land Sales Act or has been entered
into in full compliance with the Interstate Land Sales Act. 


 


CONSTRUCTION LOAN AGREEMENT - Page 32


 

















 


2.26         Earnest
Money Deposits. Each Earnest Money Deposit will be held by Escrow Agent for
the account of the applicable Unit Purchaser, and Borrower shall instruct
Escrow Agent to pay to Administrative Agent all forfeited Earnest Money
Deposits which are or become payable to Borrower under any Unit Sales Contract.
Administrative Agent shall apply all forfeited Earnest Money Deposits in the
manner specified in the Collateral Assignment.


 


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 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 and the Residential
Sub-Condominium Declaration) separate tax lot(s) with a separate tax
assessment(s) for the Land and Improvements (including each Unit), 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


 


CONSTRUCTION LOAN AGREEMENT - Page 33


 

















 


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.


 


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.


 


CONSTRUCTION LOAN AGREEMENT - Page 34


 
















 


(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 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)           Reserved.


 


(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,


 


CONSTRUCTION LOAN AGREEMENT
- Page 35


 

















 


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,
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; and (2) Qualified Unit Sales Contracts.


 


(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 partnership 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"


 


CONSTRUCTION LOAN AGREEMENT
- Page 36


 

















 


and "controlled" shall have meanings correlative thereto) and
such transfer is not prohibited by the terms of the Hotel Lease (as such term
is defined in the Hotel Loan Agreement).


 


(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.


 


(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


 


CONSTRUCTION
LOAN AGREEMENT - Page 37


 

















 


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


 


(u)           Qualified
Unit Sales Contracts. On or before March 31, 2008, Borrower fails to provide
Administrative Agent with true and correct copies of Qualified Unit Sales
Contracts which provide for the sale of Units for an aggregate gross sales
price (for all Units under such Qualified Unit Sales Contracts) of at least
$31,752,000; provided, however, that for purposes of determining
whether this requirement has been satisfied, Agents will consider and accept
only Qualified Unit Sales Contracts that (1) have not been terminated but are
in full force and effect with no existing defaults by Borrower or the Unit
Purchaser thereunder, (2) have been executed by Unit Purchasers (i) who have
received (and acknowledged in writing receipt of) an Owners Sale Certificate,
(ii) who have not elected to exercise the right of rescission under the
Condominium Act, and (iii) for whom the right of rescission under the
Condominium Act has expired shall be accepted by Agents.


 


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


 


CONSTRUCTION
LOAN AGREEMENT - Page 38


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT
- Page 39


 

















 


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.


 


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


 


CONSTRUCTION
LOAN AGREEMENT - Page 40


 

















 


"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.


 


(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


 


CONSTRUCTION LOAN AGREEMENT - Page 41


 

















 


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 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


 


CONSTRUCTION
LOAN AGREEMENT - Page 42


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT
- Page 43


 

















 


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 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


 


CONSTRUCTION
LOAN AGREEMENT - Page 44


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT - Page 45


 

















 


(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 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.


 


CONSTRUCTION LOAN AGREEMENT
- Page 46


 

















 


(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 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


 


CONSTRUCTION
LOAN AGREEMENT - Page 47


 

















 


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 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,


 


CONSTRUCTION
LOAN AGREEMENT - Page 48


 

















 


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
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


 


CONSTRUCTION
LOAN AGREEMENT - Page 49


 

















 


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.


 


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,


 


CONSTRUCTION
LOAN AGREEMENT - Page 50


 

















 


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 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.


 


CONSTRUCTION LOAN AGREEMENT
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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 respect
of the Hotel Loan Agreement so that each lender holds a Pro Rata Share of both
the Loan and the Hotel 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 Hotel 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 Hotel 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 Hotel
Loan Agreement with respect to its Pro Rata Share of the Loan and the Hotel
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


 


CONSTRUCTION LOAN AGREEMENT
- Page 52


 

















 


$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.


 


(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. 


 


CONSTRUCTION
LOAN AGREEMENT - Page 53


 
















 


(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:


 


(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


 


CONSTRUCTION LOAN AGREEMENT - Page 54


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT - Page 55


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT - Page 56


 

















 


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;


 


(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


 


CONSTRUCTION LOAN AGREEMENT - Page 57


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT - Page 58


 

















 


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),
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


 


CONSTRUCTION LOAN AGREEMENT - Page 59


 

















 


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
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.


 


CONSTRUCTION LOAN AGREEMENT - Page 60


 

















 


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 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


 


CONSTRUCTION LOAN AGREEMENT - Page 61


 

















 


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.


 


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


 


CONSTRUCTION LOAN AGREEMENT - Page 62


 

















 


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.


 


(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


 


CONSTRUCTION LOAN AGREEMENT - Page 63


 

















 


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.


 


(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


 


CONSTRUCTION LOAN AGREEMENT - Page 64


 

















 


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 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.


 


CONSTRUCTION LOAN AGREEMENT - Page 65


 

















 


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 66


 

















 


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


 


	
  Borrower’s Address for Notices:

  	
  BORROWER:

  
	
   

  	
   

  
	
  The Private Residences, LLC

  15601 Dallas Parkway, Suite 600

  Addison, Texas 75001

  	
  THE PRIVATE RESIDENCES, LLC, a Delaware

  limited liability company 

  
	
  Telephone: (214) 655-1600

  Telecopier: (214) 655-1610

  	
  By:

  	
  Behringer Harvard Private Residences, Inc.,

  a Delaware corporation, its authorized member

  
	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
  Name:         Gerald J.
  Reihsen, III 

  
	
  Kingsdell L.P.

  212 N. Kingshighway Blvd.

  Suite 1023

  St. Louis, MO 63108

  Attention: James L. Smith

  Telephone: (314) 633-1054

  Telecopier: (314) 633-3034

  	
   

  	
  Title:           Executive
  Vice President - Corporate

                      Development
  & Legal and Secretary

  



 


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:


 


“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


 


“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 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.


 


EXHIBIT B - Page 1


 

















 


“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.


 


“Appraised
Value” means $73,500,000, pursuant to an appraisal that meets the
requirements of this Agreement.


 


“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 Hotel 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”.


 


“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.


 


“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


 


EXHIBIT B - Page 2


 

















 


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.


 


“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.


 


“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.


 


“Collateral
Assignment” means that certain Collateral Assignment of Contract Rights and
Escrowed Funds dated of even date herewith, executed by Borrower to and for the
benefit of Administrative Agent, on behalf of the Lenders.


 


“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.


 


“Completion
Date” means November 1, 2009, 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.


 


“Common
Elements” means all of the Condominium other than the Units which is
designated in the Condominium Declaration for the use and benefit of the owners
of one or more of Units in the Condominium.


 


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


 


EXHIBIT B - Page 3


 

















 


“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
Association” means, together, the Master Condominium Association and the
Residential Condominium Association.


 


“Condominium
Corporate Documents” means, as to each Condominium Association, the
articles of incorporation and by-laws which shall govern such Condominium
Association, created pursuant to the Condominium Act.


 


“Condominium
Declaration” means collectively, the Master Condominium Declaration and the
Residential Sub-Condominium Declaration.


 


“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 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 Hotel Borrower, together as owner, and General
Contractor, regarding the New Hotel Facilities and Corporate Apartments Project
and New Improvements, as amended by 
Amendment No. 1 to Agreement Between Owner and Construction Manager
executed by Borrower and Hotel 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.


 


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


 


“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.


 


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


 


EXHIBIT B - Page 4


 

















 


“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.


 


“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”.


 


“Earnest
Money Deposit” shall mean the earnest money deposit made by a Unit
Purchaser, to be held by Escrow Agent pursuant to a Unit Sales Contract.


 


“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.


 


“Escrow
Agent” shall mean, whether one or more, each escrow agent appointed under,
or acting pursuant to, a Unit Sales Contract as the closing or settlement agent
in connection with the escrow of Earnest Money Deposit and the closing of the
sale of any Unit.


 


“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


 


EXHIBIT B - Page 5


 

















 


suspend or abate any obligation
of Borrower or any Guarantor or any other person to pay any money.


 


“Existing
Agreements” means the following: the Residential Development Agreement and
that certain Listing Agreement (Limited Agency) dated April 3, 2006, executed
by Hospitality Managers, LLC and Remax Properties West, as assigned to
Borrower.


 


“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, equipment and recreational facilities, fixtures
and other items of personalty related to the Project constituting a part of the
Improvements having a useful life of more than three years.


 


“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)
there shall then exist no Default or Potential Default; and (ii) Borrower shall
have executed and delivered to Administrative Agent true and correct copies of
Qualified Unit Sales Contracts which provide for the sale of Units for an
aggregate gross sales price (for all Units under such Qualified Unit Sales
Contract) of at least $55,179,065; provided, however, that only
Qualified Unit Sales Contracts that have not been terminated but are in full
force and effect with no existing defaults by Borrower or the Unit Purchaser
thereunder shall be considered for purposes of determining whether the
aggregate gross sales price has been achieved.


 


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


 


EXHIBIT B - Page 6


 

















 


“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.


 


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


 


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


 


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


 


“Hotel Loan
Documents” means the Hotel Loan Agreement, any and all notes, deed of
trust, guaranty, financing statements, and other documents, instruments or
agreements evidencing, securing or pertaining to the Hotel Loan as shall, from
time to time, be executed and/or delivered by Hotel 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.


 


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


 


“Improvements”
means, collectively, the Master Residential Condominium Units and all Common
Elements appurtenant thereto, together with all necessary furniture, fixtures
and equipments, and appurtenances owned by Borrower and now or later to be
located in the Master Residential Condominium Units. The Improvements include
all existing improvements within the Master Residential Condominium Units and
the New Improvements.


 


“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.


 


EXHIBIT B - Page 7


 

















 


“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 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.


 


“Interstate
Land Sales Act” means the Interstate Land Sales Full Disclosure Act, 15
U.S.C. §1701 et seq., and the rules and regulations promulgated thereunder from
time to time.


 


“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.


 


EXHIBIT B - Page 8


 

















 


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


 


“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

  	
   

  	
  2.25

  	
  %

  
	
  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.


 


EXHIBIT B - Page 9


 

















 


“Loan
Documents” means this Agreement (including all exhibits), the Deed of
Trust, any Note, any guaranty, financing statements, the Collateral Assignment,
the 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 Hotel
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
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.


 


EXHIBIT B - Page 10


 

















 


“Net Sales
Proceeds” means, for each Unit, the stated, gross purchase price for such
Unit set forth in the applicable Qualifying Unit Sale Contract, less
closing costs payable by Borrower under the terms of such Qualifying Unit Sale
Contract, including all usual and customary brokerage or sales commissions for
such Unit, up to a maximum amount of not to exceed 6% of such stated, gross
purchase price for such Unit.


 


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


 


“New
Improvements” is defined in the Recitals to this Agreement.


 


“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”.


 


“Original
Sale Certificate” means an original sale certificate as defined and
described in Section 448.4-103 of the Condominium Act.


 


“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.


 


EXHIBIT B - Page 11


 

















 


“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 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 New Improvements and the marketing and sale of Units.


 


“Property”
means the Master Residential Condominium Units, the New 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.


 


“Qualifying
Unit Sales Contract” means each Unit Sales Contract entered into by
Borrower and a Unit Purchaser on the Approved Unit Sales Contract Form with no
material changes, which


 


EXHIBIT B - Page 12


 

















 


(i) provides for the payment at
closing in cash of a purchase price sufficient in amount so that the Net Sales
Proceeds will be equal to at least the Release Price, and (ii) requires the
Unit Purchaser to deposit into escrow, at the time of execution of such Unit
Sale Contract, an Earnest Money Deposit equal to at least ten percent (10%) of
the purchase price.


 


“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, 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.


 


“Release
Price” shall mean, with respect to each Unit, an amount, in cash, equal to
100% of the Net Sales Proceeds payable to Borrower pursuant to the Qualifying
Unit Sales Contract for such Unit; provided, however, that the
Net Sales Proceeds shall not be less than the greater  of (i) 94%
of the stated gross purchase price of such Unit as set forth in the applicable
Qualifying Unit Sales Contract, or (ii) the minimum release price for such Unit
set forth on Exhibit “H” attached hereto.


 


“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.


 


“Residential
Condominium Association” means Park Plaza Residential 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 Residential Sub-Condominium Declaration.


 


“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.


 


“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; (ii) construction of
the New Improvements shall have been completed in


 


EXHIBIT B - Page 13


 

















 


accordance with the terms and
provisions of this Agreement and the conditions precedent to the making of the
final advance for Hard Costs related to the construction of the New
Improvements (excluding amounts which may be available for interior finish out
of individual Units) shall have been satisfied; (iii) no less than $29,400,000
of the principal balance of the Loan shall have been repaid; and (iv) Borrower
shall have executed and delivered to Administrative Agent true and correct
copies of Qualified Unit Sales Contracts which provide for the sale of Units
for an aggregate gross sales price (for all Units under such Qualified Unit
Sales Contract) equal to or greater than the sum of (1) the unpaid principal
balance of the Loan, and (2) the unfunded balance of the Loan available to be
advanced by Borrower under this Agreement; provided, however,
that only Qualified Unit Sales Contracts (A) that have not been terminated but
are in full force and effect with no existing defaults by Borrower or the Unit
Purchaser thereunder, and (B) executed by Unit Purchasers (i) who have received
(and acknowledged in writing receipt of) an Owners Sale Certificate, (ii) who
have not elected to exercise the right of rescission under the Condominium Act,
and (iii) for whom the right of rescission under the Condominium Act has
expired shall be considered for purposes of determining whether the required,
aggregate gross sales price has been achieved.


 


“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 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.


 


“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.


 


“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.


 


“Unit
Purchaser” means a purchaser of a Unit pursuant to a Unit Sales Contract.


 


EXHIBIT B - Page 14


 

















 


“Unit Sales
Contract” means a contract for purchase and sale of a Unit by and between
Borrower and a Unit Purchaser.


 


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 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.


 


(d)           Within thirty (30) days
after the end of each calendar month, a marketing status report reflecting the
current status of Borrower’s efforts to market the Units for sale including,
pending and executed Unit Sales Contracts, Units sold, amount of Earnest Money
Deposits escrowed, terminated or defaulted Unit Sales Contracts, and such other
information as may be reasonably requested by Agents.


 


(e)           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.


 


(f)            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.


 


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


 


EXHIBIT B - Page 15


 

















 


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 16


 
















 


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. § 3601 et seq.),


 


EXHIBIT C - Page 4


 

















 


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 performance bond for each subcontractor that
is a party to a Material Contract, in amount, form and content satisfactory to
Administrative Agent and 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.           Project Documents.
 True and correct copies of the Existing
Agreements and the Disbursing Agreement.


 


EXHIBIT C - Page 5


 

















 


23.           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.


 


24.           Pre-Sale Requirement.
 True and correct copies of Unit Sales
Contracts which provide for the sale of Units for an aggregate gross sales
price (for all Units under such Unit Sales Contracts) of at least $31,752,000; provided,
however, that only Unit Sales Contracts that have not been terminated
but are in full force and effect with no existing defaults by Borrower or the
Unit Purchaser thereunder shall be considered for purposes of determining
whether the foregoing requirement has been satisfied.


 


EXHIBIT C - Page 6


 

















 


EXHIBIT “F”


 


ADVANCES


 


1.             Draw Request.  A “Draw Request” means a properly
completed and executed written application by Borrower to Administrative Agent
in the form of Exhibit “F-1” (or in another form satisfactory to
Administrative Agent) setting forth the amount of Loan proceeds desired,
together with the related AIA Document G-702 and G-703 and such schedules,
affidavits, releases, waivers, statements, invoices, bills, and other
documents, certificates and information satisfactory to Administrative Agent in
its good faith business judgment (collectively, the “Back-Up Information”)  In addition, Borrower shall also provide to
Administrative Agent the Back-Up Information regarding all advances of the
Up-Front Equity. No advances of the Loan shall be made until Administrative
Agent has concluded, in its good faith business judgment, that the Up-Front
Equity has been fully funded and applied to pay costs set forth in the Budget. At
least eight (8) Business Days before the requested date of each advance made
under the Budget from the Loan, Borrower shall deliver a Draw Request to
Administrative Agent. Borrower shall be entitled to an advance only in an
amount approved by Administrative Agent in accordance with the terms of this
Agreement and the Loan Documents. Lenders shall not be required to make
advances more frequently than once each calendar month. Lenders shall, only
upon the satisfaction, as determined by Administrative Agent in its sole
discretion, of all applicable conditions of this Agreement and the Loan Documents,
be required to make the requested advance to Borrower on a Funding Date which
is a Business Day within five (5), or if any portion of such advance is LIBOR
Rate Principal, eight (8), Business Days after such satisfaction. Each Draw
Request, and Borrower’s acceptance of any advance, shall be deemed to ratify
and confirm, as of the date of the Draw Request and the advance, respectively,
that, except as specified in the Draw Request, (a) all representations and
warranties in the Loan Documents remain true and correct, and all covenants and agreements in the Loan
Documents remain satisfied, (b) there is no uncured Default or Potential
Default existing under the Loan Documents, (c) all conditions to the advance,
whether or not evidence thereof is required by Administrative Agent, are
satisfied, (d) the AIA Document G-702 and G-703 forms executed by each
contractor and approved by Borrower’s architect, together with all schedules,
affidavits, releases, waivers, statements, invoices, bills, and other documents,
certificates and information submitted for the Draw Request are complete and
correct in all material respects, and what they purport and appear to be for
the amount and period applicable to the Draw Request, (e) all advances previously made to Borrower were disbursed,
and the proceeds of the advance requested in the Draw Request will immediately
be disbursed, for payments of the costs and expenses specified in the Budget
for which the advances were made, and for no other purpose, (f) after the
advance, all obligations for work and other costs heretofore incurred by
Borrower in connection with the Project and which are due and payable will be
fully paid and satisfied and (g) any
unadvanced portion of the Loan to which Borrower is entitled, plus the portions
of the Aggregate Cost that are to be paid by Borrower from other funds that, to
Administrative Agent’s satisfaction, are available, set aside and committed, is
or will be sufficient to pay the actual unpaid Aggregate Cost.


 


2.             Advances.  Borrower shall disburse all advances made to
Borrower, for payments of the costs and expenses specified in the Budget for
which the advances were made, and for no other purpose. No advances shall be
made for the payment of “hard costs” for any construction work that


 


EXHIBIT F - Page 1


 

















 


is not covered by approved and
paid building permits. Following receipt and approval of a Draw Request, all
supporting documentation and information required by Administrative Agent in
its good faith business judgment, and receipt and approval of a written report
from Construction Consultant satisfactory to Administrative Agent,
Administrative Agent will determine the amount of the advance Lenders shall
make in accordance with this Agreement, the Loan Documents, the Budget, and if
and to the extent required by Administrative Agent, to Administrative Agent’s
satisfaction in its good faith business judgment, the following standards:


 


(a)           For construction work,
advances on the basis of ninety percent (90%) of the costs shown on the
application for payment from the contractor reviewed and approved by
Administrative Agent of the work or material in place on the New Improvements
that comply with the terms of the Loan Documents, minus all previous advances
and all amounts required to be paid by Borrower, as described in the Budget. For
“soft costs” line items in the Budget, advances on the basis of one hundred
percent (100%) of the costs shown in the Draw Request reviewed and approved by
Administrative Agent (including applicable Back-Up Information) minus all
previous advances and all amounts required to be paid by Borrower, as described
in the Budget.


 


(b)           No advances for
building materials or furnishings that are not yet incorporated into the New Improvements
(“stored materials”) unless (i) Borrower has good title to the stored
materials and the stored materials are components in a form ready for
incorporation into the New Improvements and (unless otherwise agreed to in
writing by Administrative Agent and except for deposits for bulk inventory or materials purchases and the purchase of
pre-fabricated materials or bulk purchases of materials pursuant to purchase
orders or invoices submitted to Administrative Agent) will be so
incorporated within a period of ninety (90) days (or such longer period as
Administrative Agent may agree to in writing), (ii) the stored materials are in
Borrower’s possession and satisfactorily stored on the Land or such materials
are satisfactorily stored at such other site as Administrative Agent may
approve, (iii) the stored materials are protected and insured against theft and
damage in a manner and amount required by the Loan Documents and otherwise
satisfactory to Administrative Agent in its good faith business judgment, (iv)
the stored materials have been paid for in full or will be paid for with the
funds to be advanced and all lien rights and claims of the supplier have been
released or will be released upon payment with the advanced funds, and (v)
Administrative Agent for the benefit of Lenders has or will have upon payment
with the advanced funds a perfected, first priority security interest in the
stored materials. Notwithstanding the foregoing, the aggregate amount of
advances for stored materials that have not yet been incorporated into the New
Improvements shall not exceed the Stored Materials Advance Limit unless
otherwise approved in writing by Administrative Agent.


 


(c)           Unless approved by
Administrative Agent, the Contingency Line Item shall be advanced during construction
of the New Improvements for proposed change orders that requires a reallocation
from the Contingency Line Item in the Budget so long as no reallocation shall
exceed the Approved Contingency Limit. The term “Approved Contingency Limit”
shall mean the positive difference between the amount of Three Hundred Fifty
Thousand Dollars ($350,000) and the amount allocated from the Contingency


 


EXHIBIT F - Page 2


 

















 


Line Item in
the Budget for work described in all proposed change orders that have not been
expressly approved by Administrative Agent. It is intended that the Approved
Contingency Limit will fluctuate from time to time. By way of non-binding
example, if Borrower approves a proposed change order (the “Hypothetical
Change Order”) that requires a reallocation from the Contingency Line Item
in the amount of $100,000 in order to allow for payment of the work described
therein, the Approved Contingency Limit at that time would be $250,000
($350,000 minus $100,000). Accordingly, until the Hypothetical Change Order is
submitted to and approved by Administrative Agent, the Approved Contingency
Limit would remain at $250,000 and, accordingly, any subsequent proposed change
order that, if approved, would require a reallocation from the Contingency Line
Item in excess of $250,000 would require the prior approval of Administrative
Agent. By way of further non-binding example, at such time as the Hypothetical
Change Order is submitted to and approved by Administrative Agent, the Approved
Contingency Limit would be increased by $100,000 as a result thereof, and thus
would be re-set at the amount of $350,000.


 


(d)           Advances of the Loan
for the payment to Developer of the Development Fee (as defined in the
Residential Development Agreement) shall be made no more frequently than
monthly, pursuant to the following formula: (i) the total Development Fee minus
twenty five percent (25%)(the “Withheld Amount”) / number of months as
set forth in the construction schedule for the Project, and (ii) the Withheld
Amount shall be disbursed if to the extent the same becomes due and payable to
Developer pursuant to the terms of the Residential Development Agreement.


 


3.             Conditions to the
First Advance.  As conditions
precedent to the first advance hereunder, if and to the extent required by
Administrative Agent, to Administrative Agent’s satisfaction in its good faith
business judgment, Borrower must have satisfied the conditions required under
this Agreement, including all of those conditions set forth in Exhibit “C”
and Section 4 below.


 


4.             Conditions to All
Advances.  As conditions precedent to
each advance made pursuant to a Draw Request, in addition to all other
requirements contained in this Agreement, if and to the extent required by
Administrative Agent, Administrative Agent shall have received and approved the
following:


 


(a)           Evidence satisfactory
to Administrative Agent in its good faith business judgment of the continued
satisfaction of all conditions to the first advance.


 


(b)           A
Draw Request.


 


(c)           Evidence satisfactory
to Administrative Agent in its good faith business judgment that no Default or
any event which, with the giving of notice or the lapse of time, or both, could
become a Default, exists.


 


(d)           Evidence satisfactory
to Administrative Agent in its good faith business judgment that the
representations and warranties made in the Loan Documents are true and correct
on and as of the date of each advance and no event shall have occurred or
condition


 


EXHIBIT F - Page 3


 

















 


or circumstance shall exist which, if known to Borrower, would render
any such representation or warranty incorrect in any material respect.


 


(e)           Each subcontract or
other contract for labor, materials, services and/or other work included in a
Draw Request shall have been executed and delivered by all parties thereto and
effective, and a true and complete copy of a fully executed copy of each such
subcontract or other contract as Administrative Agent may have requested, and,
with respect to subcontracts that constitute Material Contracts,  performance and payment bonds
securing such subcontracts as required by Exhibit “C” hereto.


 


(f)            Evidence satisfactory
to Administrative Agent in its good faith business judgment that no mechanic’s
or materialmen’s lien or other encumbrance has been filed and remains in effect
against the Property (except for liens or encumbrances that are being contested
in accordance with Section 2.16 of this Agreement), no stop notices
shall have been served on Lenders that have not been bonded by Borrower in a
manner and amount satisfactory to Administrative Agent, and releases or waivers
of mechanics’ liens and receipted bills showing payment of all amounts due to
all parties who have furnished materials or services or performed labor of any
kind in connection with the Property.


 


(g)           Evidence satisfactory
to Administrative Agent in its good faith business judgment that the Title
Insurance has been endorsed and brought to date in a manner  satisfactory to Administrative Agent in its
good faith business judgment to increase the coverage by the amount of each
advance through the date of each such advance with no additional title change
or exception not expressly permitted by the Loan Documents or approved in
writing by Administrative Agent.


 


(h)           Certification by
Construction Consultant, and if required by Administrative Agent by Borrower’s
architect, that to the best of such party’s knowledge, information, and belief,
construction is in accordance with the Plans, the quality of the work for which
the advance is requested is in accordance with the applicable contract, the
amount of the advance requested represents work in place based on on-site
observations and the data compromising the Draw Request, the work can be
completed by the Completion Date, and the applicable contractor is entitled to
payment of the amount certified.


 


(i)            Evidence satisfactory
to Administrative Agent in its good faith business judgment that as of the date
of making such advance, no event shall have occurred, nor shall any condition
exist, that could have a Material Adverse Effect.


 


(j)            Evidence satisfactory
to Administrative Agent in its good faith business judgment that the
Improvements shall not have been damaged and not repaired and shall not be the
subject of any pending or threatened condemnation or adverse zoning proceeding.


 


(k)           Evidence satisfactory
to Administrative Agent in its good faith business judgment that Borrower has
paid all amounts then required to be paid by Borrower under the Budget.


 


(l)            The
Borrower’s Deposit, if required by Section 1.5 of this Agreement.


 


EXHIBIT F - Page 4


 

















 


(m)          With respect to any
advance to pay a contractor, original applications for payments in form
approved by Administrative Agent in its good faith business judgment,
containing a breakdown by trade and/or other categories acceptable to
Administrative Agent, executed and certified by each contractor and Borrower’s
architect, accompanied by invoices, and approved by Construction Consultant.


 


(n)           Copies of notarized
partial lien waiver forms executed by each contractor and each appropriate
subcontractor, supplier and materialman, including, without limitation, from
all parties sending statutory notices to contractors, notices to owners, or
notices of nonpayment, specifying in such partial lien waivers the amount paid
in consideration of such partial releases.


 


(o)           With respect to any
advance in excess of $12,000,000.00, Agents shall have received from Borrower
true and correct copies of Qualified Unit Sales Contracts which provide for the
sale of Units for an aggregate gross sales price (for all Units under such
Qualified Unit Sales Contracts) of at least $31,752,000; provided, however,
that for purposes of determining whether this requirement has been satisfied,
Agents will consider and accept only Qualified Unit Sales Contracts that (1)
have not been terminated but are in full force and effect with no existing
defaults by Borrower or the Unit Purchaser thereunder, (2) have been executed
by Unit Purchasers (i) who have received (and acknowledged in writing receipt
of) an Owners Sale Certificate, (ii) who have not elected to exercise the right
of rescission under the Condominium Act, and (iii) for whom the right of
rescission under the Condominium Act has expired shall be accepted by Agents.


 


(p)           Such other information,
documents and supplemental legal opinions as may be required by Administrative
Agent in its good faith business judgment.


 


5.             Final Advance for
Improvements.  The final advance for
the New Improvements (including retainage) shall not be made until after final
completion of all construction work, including punchlist work, as determined by
Construction Consultant and Administrative Agent  thirty
(30) days after the later of the date on which the New Improvements have been “completed,”
as defined by applicable state Law or, if required by Administrative Agent, the
date on which an affidavit of completion has been recorded, and in the case of
each such Draw Request, if and to the extent required by Administrative Agent,
Administrative Agent shall have received the following as additional conditions
precedent to the requested advance:


 


(a)           Certificates from
Borrower’s architect, engineer, contractor and, if required by Administrative
Agent, from the Construction Consultant, certifying that the New Improvements
have been completed in substantial accordance with, and as completed comply
with, the Plans and all Laws and governmental requirements; and Administrative
Agent shall have received two (2) sets of detailed “as built” Plans approved in
writing by Borrower, Borrower’s architect, and the General Contractor.


 


(b)           Final affidavits (in a
form approved by Administrative Agent in its good faith business judgment) from
each of Borrower’s architect, engineer, and contractors (including General
Contractor) certifying that each of them and their subcontractors, laborers,
and materialmen has been paid in full for all labor and materials for
construction of the New


 


EXHIBIT F - Page 5


 

















 


Improvements;
and final lien releases or waivers (in a form approved by Administrative Agent)
by Borrower’s architect, engineer, contractor, and all subcontractors, materialmen,
and other parties who have supplied labor, materials, or services for the
construction of the New Improvements, or who otherwise might be entitled to
claim a contractual, statutory or constitutional lien against the Property; provided,
however, to the extent Borrower is contesting a lien filed by any such
party in accordance with the requirements of Section 2.16 of this
Agreement, a final affidavit and lien release from such party shall not be
required under this paragraph (b).


 


(c)           The Title Insurance
shall be endorsed to remove any exception for mechanics’ or materialmen’s liens
or pending disbursements, with no additional title change or exception
objectionable to Administrative Agent, and with such other endorsements
required by Administrative Agent.


 


(d)           Evidence satisfactory
to Administrative Agent in its good faith business judgment that all Laws and
governmental requirements have been satisfied, including receipt by Borrower of
all necessary governmental licenses, certificates and permits (including
certificates of occupancy (final or temporary) or their legal equivalent) with
respect to the completion, use, occupancy and operation of the New Improvements
have been issued, together with evidence satisfactory to Administrative Agent
in its good faith business judgment that all such licenses, certificates, and
permits are in full force and effect and have not been revoked, canceled or
modified. Notwithstanding the foregoing, if Borrower obtains a temporary
certificate of occupancy, Borrower agrees to continue to use commercially
reasonable efforts to obtain from the applicable governmental authority a final
certificate of occupancy.


 


(e)           Three (3) copies of a
final as-built survey satisfactory to Administrative Agent and to the extent
required by Administrative Agent complying with Exhibit “G”.


 


6.             Direct Advances.
 Borrower hereby irrevocably authorizes
Administrative Agent on behalf of Lenders (but Administrative Agent shall have
no obligation) to (i) advance Loan funds directly to Lenders to pay interest
due on the Loan, and (ii) advance and directly apply the proceeds of any
advance to the satisfaction of any of Borrower’s obligations under any of the
Loan Documents, even though Borrower did not include that amount in a Draw
Request and/or no Default exists. Each such direct advance (except for
application of a Borrower’s Deposit) shall be added to the outstanding
principal balance of the Loan and shall be secured by the Loan Documents. Unless
Borrower pays such interest from other resources, Administrative Agent may
advance Loan funds pursuant to this Section for interest payments as and when
due. Nothing contained in this Agreement shall be construed to permit Borrower
to defer payment of interest on the Loan beyond the date(s) due. The allocation
of Loan funds in the Budget for interest shall not affect Borrower’s absolute
obligation to pay the same in accordance with the Loan Documents. Administrative
Agent may hold, use, disburse and apply the Loan and the Borrower’s Deposit for
payment of any obligation of Borrower under the Loan Documents. Borrower hereby
assigns and pledges the proceeds of the Loan and any Borrower’s Deposit to
Administrative Agent for itself and for the benefit of Lenders for such
purposes. During the continuance of a Default, Administrative Agent on behalf
of Lenders may advance and incur such expenses as Administrative Agent deems
necessary for the completion of the New Improvements and to preserve the
Property and any other


 


EXHIBIT F - Page 6


 

















 


security for the Loan, and such
expenses, even though in excess of the amount of the Loan, shall be secured by
the Loan Documents and shall be payable to Administrative Agent on behalf of
Lenders on demand. Administrative Agent on behalf of Lenders may disburse any
portion of any advance at any time, and from time to time, to persons other
than Borrower for the purposes specified in this Section and the amount of
advances to which Borrower shall thereafter be entitled shall be correspondingly
reduced.


 


7.             Conditions and
Waivers.  All conditions precedent to
the obligation of Lenders to make any advance are imposed hereby solely for the
benefit of Administrative Agent and Lenders, and no other party may require
satisfaction of any such condition precedent or be entitled to assume that
Lenders will refuse to make any advance in the absence of strict compliance
with such conditions precedent. Administrative Agent shall have the right to
approve and verify the periodic progress of, costs incurred by Borrower for,
and the estimated costs remaining to be incurred for the construction of the
New Improvements, after consultation with the Construction Consultant. No
advance shall constitute an approval or acceptance by Administrative Agent of
any construction work, or a waiver of any condition precedent to any further
advance, or preclude Administrative Agent from thereafter declaring the failure
of Borrower to satisfy such condition precedent to be a Default. No waiver by
Administrative Agent of any condition precedent or obligation shall preclude
Administrative Agent from requiring such condition or obligation to be met
prior to making any other advance or from thereafter declaring the failure to
satisfy such condition or obligation to be a Default.


 


8.             Funding;
Construction Escrow.  Each advance of proceeds of the Loan to be disbursed
directly to Borrower or the General Contractor will be deposited by
Administrative Agent to the Construction Escrow. Borrower hereby
irrevocably authorizes Administrative Agent to deposit each advance requested
by Borrower to the credit of Borrower in the Construction Escrow, by wire
transfer or other deposit. Advances may also be made, in addition to other
methods contemplated herein, at Administrative Agent’s option, by direct or
joint check payment to any or all persons entitled to payment for work or
services performed or material furnished in connection with the Project or the
Loan. Neither Administrative Agent nor any Lender shall be required to, and has
no responsibility to, supervise the proper application or distribution of funds
in the Construction Escrow to third parties. Borrower
will cause the General Contractor to comply with the requirements of the
Disbursing Agreement in order to enable the Disbursement Agent to issue to
Administrative Agent interim mechanics’ lien endorsements, make disbursements
and obtain necessary sworn statements and waivers of lien.


 


EXHIBIT F - Page 7