Exhibit 10.44





Exhibit 10.44




AMENDED AND RESTATED

LOAN AGREEMENT




between




1100 West Properties, LLC,




a Delaware limited liability company




as Borrower




The Lenders Party Hereto




as Lenders




and




Eurohypo AG, New York Branch




as Administrative Agent




Date: As of November 25, 2008



 


 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 CERTAIN DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	Section 1.1 Certain Definitions
	 	 	2	 
	Section 1.2 Types of Loans
	 	 	30	 
	 
	 	 	 	 
	ARTICLE 2 LOAN TERMS
	 	 	31	 
	 
	 	 	 	 
	Section 2.1 The Commitments, Loans and Notes
	 	 	31	 
	Section 2.2 Conversions or Continuations of Loans
	 	 	32	 
	Section 2.3 Interest Rate; Late Charge
	 	 	32	 
	Section 2.4 Terms of Payment
	 	 	33	 
	Section 2.5 Extension of Maturity Date
	 	 	36	 
	Section 2.6 Exit Fee
	 	 	41	 
	Section 2.7 Cash Management
	 	 	42	 
	Section 2.8 Payments; Pro Rata Treatment; Etc.
	 	 	42	 
	Section 2.9 Yield Protection; Etc.
	 	 	46	 
	Section 2.10 Administration Fee
	 	 	51	 
	Section 2.11 Take-Out Obligations
	 	 	52	 
	 
	 	 	 	 
	ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS
	 	 	53	 
	 
	 	 	 	 
	Section 3.1 Insurance
	 	 	53	 
	Section 3.2 Condemnation Awards
	 	 	56	 
	Section 3.3 Use and Application of Insurance Proceeds
	 	 	56	 
	Section 3.4 Disbursement of Proceeds
	 	 	57	 
	 
	 	 	 	 
	ARTICLE 4 RESERVES
	 	 	60	 
	 
	 	 	 	 
	Section 4.1 Real Estate Tax and Insurance Reserve Fund
	 	 	60	 
	Section 4.2 Seasonality Reserve Fund
	 	 	61	 
	Section 4.3 Construction Completion Fund
	 	 	62	 
	Section 4.4 Reserve Funds and Security Accounts Generally
	 	 	62	 
	 
	 	 	 	 
	ARTICLE 5 ENVIRONMENTAL MATTERS
	 	 	64	 
	 
	 	 	 	 
	Section 5.1 Certain Definitions
	 	 	64	 
	Section 5.2 Representations and Warranties on Environmental Matters
	 	 	65	 
	Section 5.3 Covenants on Environmental Matters
	 	 	65	 
	Section 5.4 Allocation of Risks and Indemnity
	 	 	66	 
	Section 5.5 No Waiver
	 	 	67	 
	 
	 	 	 	 
	ARTICLE 6 LEASING MATTERS
	 	 	68	 
	 
	 	 	 	 
	Section 6.1 Representations and Warranties on Leases
	 	 	68	 
	Section 6.2 Restaurant Lease and Future Lease
	 	 	68	 
	Section 6.3 Covenants
	 	 	68	 






 


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TABLE OF CONTENTS

(continued)





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 7 REPRESENTATIONS AND WARRANTIES
	 	 	68	 
	 
	 	 	 	 
	Section 7.1 Organization and Power
	 	 	68	 
	Section 7.2 Validity of Loan Documents
	 	 	68	 
	Section 7.3 Liabilities; Litigation
	 	 	69	 
	Section 7.4 Taxes and Assessments
	 	 	69	 
	Section 7.5 Other Agreements; Defaults
	 	 	69	 
	Section 7.6 Compliance with Law
	 	 	69	 
	Section 7.7 Location of Borrower
	 	 	70	 
	Section 7.8 ERISA
	 	 	70	 
	Section 7.9 Margin Stock
	 	 	70	 
	Section 7.10 Tax Filings
	 	 	70	 
	Section 7.11 Solvency
	 	 	70	 
	Section 7.12 Full and Accurate Disclosure
	 	 	70	 
	Section 7.13 Single Purpose Entity
	 	 	70	 
	Section 7.14 Management of the Project
	 	 	71	 
	Section 7.15 No Conflicts
	 	 	71	 
	Section 7.16 Title
	 	 	71	 
	Section 7.17 Flood Zone
	 	 	71	 
	Section 7.18 Insurance
	 	 	71	 
	Section 7.19 Certificate of Occupancy; Licenses
	 	 	72	 
	Section 7.20 Physical Condition
	 	 	72	 
	Section 7.21 Boundaries
	 	 	72	 
	Section 7.22 Material Agreements
	 	 	72	 
	Section 7.23 Construction Budget
	 	 	73	 
	Section 7.24 Filing and Recording Taxes
	 	 	73	 
	Section 7.25 Investment Company Act
	 	 	73	 
	Section 7.26 Patriot Act; Foreign Assets Control Regulations
	 	 	74	 
	Section 7.27 Organizational Structure
	 	 	74	 
	Section 7.28 Property Specific Representations
	 	 	74	 
	 
	 	 	 	 
	ARTICLE 8 FINANCIAL REPORTING
	 	 	75	 
	 
	 	 	 	 
	Section 8.1 Financial Statements
	 	 	75	 
	Section 8.2 Accounting Principles
	 	 	77	 
	Section 8.3 Other Information
	 	 	77	 
	Section 8.4 Annual Operating Budget
	 	 	77	 
	Section 8.5 Audits
	 	 	77	 
	Section 8.6 Access
	 	 	78	 






 


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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 9 COVENANTS
	 	 	78	 
	 
	 	 	 	 
	Section 9.1 Due on Sale and Encumbrance; Transfers of Interests
	 	 	78	 
	Section 9.2 Taxes; Charges
	 	 	80	 
	Section 9.3 Control; Management
	 	 	80	 
	Section 9.4 Operation; Maintenance; Inspection
	 	 	80	 
	Section 9.5 Taxes on Security
	 	 	81	 
	Section 9.6
Legal Existence; Name, Etc.
	 	 	81	 
	Section 9.7 Affiliate Transactions
	 	 	81	 
	Section 9.8 Limitation on Other Debt
	 	 	82	 
	Section 9.9 Further Assurances
	 	 	82	 
	Section 9.10 Estoppel Certificates
	 	 	82	 
	Section 9.11 Notice of Certain Events
	 	 	82	 
	Section 9.12 Indemnification
	 	 	83	 
	Section 9.13 Size of Units
	 	 	83	 
	Section 9.14 Minimum Sales Prices
	 	 	83	 
	Section 9.15 Hedge Agreements
	 	 	83	 
	Section 9.16 No Distributions
	 	 	85	 
	Section 9.17 Condominium Covenants
	 	 	85	 
	Section 9.18 Patriot Act Compliance; Foreign Assets Control Regulations
	 	 	86	 
	Section 9.19 Payment for Labor and Materials
	 	 	87	 
	Section 9.20 Hotel Management Agreement
	 	 	88	 
	Section 9.21 Americans with Disabilities
	 	 	88	 
	Section 9.22 Zoning
	 	 	89	 
	Section 9.23 ERISA
	 	 	89	 
	Section 9.24 Property Specific Covenants
	 	 	89	 
	Section 9.25 Construction Management Contract
	 	 	90	 
	 
	 	 	 	 
	ARTICLE 10 EVENTS OF DEFAULT
	 	 	90	 
	 
	 	 	 	 
	Section 10.1 Payments
	 	 	90	 
	Section 10.2 Insurance
	 	 	90	 
	Section 10.3 Single Purpose Entity
	 	 	90	 
	Section 10.4 Taxes
	 	 	90	 
	Section 10.5 Sale, Encumbrance, Etc.; Change of Control
	 	 	90	 
	Section 10.6 Representations and Warranties
	 	 	90	 
	Section 10.7 Other Encumbrances
	 	 	91	 
	Section 10.8 Various Covenants
	 	 	91	 
	Section 10.9 Involuntary Bankruptcy or Other Proceeding
	 	 	91	 
	Section 10.10 Voluntary Petitions, Etc.
	 	 	91	 
	Section 10.11 Indebtedness
	 	 	91	 
	Section 10.12 Dissolution
	 	 	91	 
	Section 10.13 Judgments
	 	 	92	 
	Section 10.14 Security
	 	 	92	 
	Section 10.15 Guarantees
	 	 	92	 
	Section 10.16 Security Accounts
	 	 	92	 
	Section 10.17 Hedge Agreement
	 	 	92	 
	Section 10.18 Junior Loan Intercreditor Agreement
	 	 	92	 
	Section 10.19 Covenants
	 	 	92	 






 


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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 11 REMEDIES
	 	 	93	 
	 
	 	 	 	 
	Section 11.1 Remedies — Insolvency Events
	 	 	93	 
	Section 11.2 Remedies — Other Events
	 	 	93	 
	Section 11.3 Administrative Agent’s Right to Perform the Obligations
	 	 	93	 
	 
	 	 	 	 
	ARTICLE 12 MISCELLANEOUS
	 	 	94	 
	 
	 	 	 	 
	Section 12.1 Notices
	 	 	94	 
	Section 12.2 Amendments, Waivers, Etc
	 	 	94	 
	Section 12.3 Limitation on Interest
	 	 	95	 
	Section 12.4 Invalid Provisions
	 	 	96	 
	Section 12.5 Reimbursement of Expenses
	 	 	96	 
	Section 12.6 Approvals; Third Parties; Conditions
	 	 	97	 
	Section 12.7 Lenders and Administrative Agent Not in Control; No Partnership

	 	 	97	 
	Section 12.8 Time of the Essence
	 	 	97	 
	Section 12.9 Successors and Assigns
	 	 	97	 
	Section 12.10 Renewal, Extension or Rearrangement
	 	 	98	 
	Section 12.11 Waivers
	 	 	98	 
	Section 12.12 Cumulative Rights
	 	 	98	 
	Section 12.13 Singular and Plural
	 	 	98	 
	Section 12.14 Phrases
	 	 	98	 
	Section 12.15 Exhibits and Schedules
	 	 	98	 
	Section 12.16 Titles of Articles, Sections and Subsections
	 	 	98	 
	Section 12.17 Promotional Material
	 	 	99	 
	Section 12.18 Survival
	 	 	99	 
	Section 12.19 WAIVER OF JURY TRIAL
	 	 	99	 
	Section 12.20 Remedies of Borrower
	 	 	100	 
	Section 12.21 GOVERNING LAW
	 	 	100	 
	Section 12.22 Entire Agreement
	 	 	101	 
	Section 12.23 Counterparts
	 	 	101	 
	Section 12.24 Assignments and Participations
	 	 	101	 
	Section 12.25 Brokers
	 	 	103	 
	Section 12.26 Right of Setoff
	 	 	104	 
	Section 12.27 Cooperation with Syndication; Componentization
	 	 	104	 






 


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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 13 LIMITATIONS ON LIABILITY
	 	 	106	 
	 
	 	 	 	 
	Section 13.1 Limitation on Liability
	 	 	106	 
	Section 13.2 Limitation on Liability of the Administrative Agent’s and the Lenders’
Officers, Employees, etc 
	 	 	107	 
	 
	 	 	 	 
	ARTICLE 14 BUILDING CONVERSION; SALE OF UNITS
	 	 	107	 
	 
	 	 	 	 
	Section 14.1 Completion of Building Conversion
	 	 	107	 
	Section 14.2 Marketing and Sales Program; Sales of Units; Deposits
	 	 	109	 
	Section 14.3 Partial Release of Units
	 	 	109	 
	Section 14.4 Application of Excess Cash Flow
	 	 	110	 
	Section 14.5 Sale of Parking Spaces
	 	 	111	 
	Section 14.6 Seller Financing Collateral
	 	 	112	 
	 
	 	 	 	 
	ARTICLE 15 THE ADMINISTRATIVE AGENT
	 	 	113	 
	 
	 	 	 	 
	Section 15.1 Appointment, Powers and Immunities
	 	 	113	 
	Section 15.2 Reliance by Administrative Agent
	 	 	114	 
	Section 15.3 Defaults
	 	 	114	 
	Section 15.4 Rights as a Lender
	 	 	116	 
	Section 15.5 Standard of Care; Indemnification
	 	 	117	 
	Section 15.6 Non Reliance on Administrative Agent and Other Lenders
	 	 	117	 
	Section 15.7 Failure to Act
	 	 	117	 
	Section 15.8 Resignation of Administrative Agent
	 	 	118	 
	Section 15.9 Consents under Loan Documents
	 	 	118	 
	Section 15.10 Authorization
	 	 	118	 
	Section 15.11
Reserved
	 	 	119	 
	Section 15.12 Defaulting Lenders
	 	 	119	 
	Section 15.13 Liability of the Administrative Agent
	 	 	120	 
	Section 15.14 Transfer of Agency Function
	 	 	120	 
	 
	 	 	 	 
	ARTICLE 16 AMENDMENT AND RESTATEMENT
	 	 	120	 
	 
	 	 	 	 
	ARTICLE 17 RELEASE
	 	 	120	 





 


-v-









 





LIST OF EXHIBITS AND SCHEDULES




	 	 	 	 	 
	 
	 	 	 	 
	EXHIBIT A  —  LEGAL DESCRIPTION OF PROJECT
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT B  —  RESERVED
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT C  —  FORM OF NOTE
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT D  —  FORM OF ASSIGNMENT AND ACCEPTANCE
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT E  —  FORM OF NOTICE OF CONVERSION/CONTINUATION
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 1(a)  —  COMMITMENTS
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 1(b)  —  MINIMUM SALES PRICE SCHEDULE
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 1(c)  —  UNIT RELEASE SCHEDULE
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 2.1  —  DISBURSEMENT AND COMPLETION CONDITIONS
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 2.4(1)  —  WIRE INSTRUCTIONS
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 7.19  —  LICENSES
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 7.23  —  PROJECT BUDGET
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 7.27  —  ORGANIZATIONAL CHART
	 	 	 	 





 


-vi-









 





AMENDED AND RESTATED LOAN AGREEMENT




This Amended and Restated Loan Agreement (this “Agreement”) is entered into as of
November 25, 2008, among 1100 WEST PROPERTIES, LLC, a limited liability company duly organized and
validly existing under the laws of the State of Delaware (“Borrower”); each of the lenders
that is a signatory hereto identified under the caption “LENDERS” on the signature pages hereof and
each lender that becomes a “Lender” after the date hereof pursuant to Section 12.24(2)
(individually, a “Lender” and, collectively, the “Lenders”); and EUROHYPO AG, NEW
YORK BRANCH (“Eurohypo”), as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Administrative Agent”).



RECITALS




A. Borrower, Eurohypo (as the Administrative Agent and Lender), CIT Lending Services
Corporation, a Delaware corporation (“CIT”), as a Lender, and KBC Bank NV (“KBC
Bank”), as Lender, are parties (or successors parties) to a Loan Agreement dated as of August
8, 2006, as amended by that certain First Amendment to Loan Agreement dated as of September 6,
2007, and that certain Second Amendment to Loan Agreement dated as of April 25, 2008 (the
“Existing Loan Agreement”), which provides for, among other things, loans by the Lenders to
Borrower in an aggregate principal or face amount not exceeding $124,000,000 (the “Loans”
or “Existing Loans”).



B. Sole Member (as defined below) and Eurohypo, as a lender and as administrative agent (in
such capacities, together with Eurohypo’s successors and assigns in each such capacity,
“Existing Mezzanine Lender”), are parties to that certain Mezzanine Loan Agreement dated as
of April 25, 2008 (the “Original Existing Mezzanine Loan Agreement”), which provides for,
among other things, a mezzanine loan to Sole Member in an aggregate principal or face amount not
exceeding $28,000,000 (the “Existing Mezzanine Loan”).



C. On the date hereof, Sole Member and Existing Mezzanine Lender are entering into that
certain Amended and Restated Mezzanine Loan Agreement dated as of the date hereof, which amends,
restates, supersedes and replaces the Original Existing Mezzanine Loan Agreement (as the same may
be amended, modified and supplemented and in effect from time to time, the “Existing Mezzanine
Loan Agreement”).



D. Additional funds are required to complete the Building Conversion (as defined below) and
cause Construction Completion (as defined below) to occur and certain affiliates of Borrower and
Sole Member are ready to provide such funds through a combination of additional equity investments
in Borrower and the making of the Junior Mezzanine Loan (as defined below).



E. Borrower, the Lenders and the Administrative Agent desire to amend, restate and supersede
the Existing Loan Agreement with this Agreement. As of the date hereof, the principal balance of
the Loans is $84,080,399.11 and the amount of the Commitments have been fully funded.


 


1









 





AGREEMENT




ARTICLE 1




CERTAIN DEFINITIONS




Section 1.1 Certain Definitions. As used herein, the following terms have the meanings
indicated:



(1) “Acceptable Counterparty” shall mean (1) Eurohypo and/or its Affiliates, or (2)
any other counterparty to the Hedge Agreement that has and shall maintain, until the expiration of
the applicable Hedge Agreement, a credit rating of not less than ‘A’ from S&P.




(2) “Access Laws” has the meaning assigned in Section 9.21(1).




(3) “Additional Costs” has the meaning assigned in Section 2.9(1)(a).



(4) “Adjusted LIBOR Rate” means, for any Interest Period for any Eurodollar Loan, a
rate per annum (rounded upwards, if necessary, to the nearest 1/1000 of 1%) determined by the
Administrative Agent to be equal to the LIBOR Rate for such Interest Period divided by one (1)
minus the Reserve Requirement (if any) for such Interest Period.



(5) “Adjusted Operating Expenses” means Operating Expenses as determined and adjusted
by the Administrative Agent in accordance with its then current audit policies and procedures.



(6) “Adjusted Operating Revenues” means Operating Revenues as determined and adjusted
by the Administrative Agent in accordance with its then current audit policies and procedures.




(7) “Administration Fee” has the meaning assigned in Section 2.10.



(8) “Advance Conditions” means those conditions listed in Schedule 2.1
attached hereto and made a part hereof.




(9) “Advance Date” has the meaning assigned in Section 2.8(6).




(10) “Advanced Amount” has the meaning assigned in Section 15.12(2).



(11) “Affiliate” means with respect to any Person, another Person that directly or
indirectly Controls, or is under common Control with, or is Controlled by, such Person and, if such
Person is an individual, any member of the immediate family (including parents, spouse, children
and siblings) of such individual and any trust whose principal beneficiary is such individual or
one or more members of such immediate family and any Person who is Controlled by any such member or
trust. For purposes of this definition, any Person that owns directly or indirectly securities
having ten percent (10%) or more of the voting power for the election of directors or other
governing body of a corporation or thirty-five percent (35%) or more of the
partnership, membership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to Control such corporation or other Person.
Notwithstanding the foregoing, no individual shall be an Affiliate solely by reason of his or her
being a director, officer, trustee or employee of Borrower.


 


2









 





(12) “Agreement” means this Amended and Restated Loan Agreement, as amended from time
to time.




(13) “Amendment Closing Date” means the date hereof.




(14) “Annual Operating Budget” has the meaning assigned in Section 8.4.



(15) “Anti-Terrorism Order” means Executive Order No. 13,224, 66 Fed. Reg. 49,079
(2001), issued by the President of the United States of America (Executive Order Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism).



(16) “Applicable Law” means collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or administration thereof by
any governmental authority charged with the enforcement, interpretation or administration thereof,
and all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authority, in each case whether or not having the
force of law.



(17) “Applicable Lending Office” means, for each Lender and for each Type of Loan, the
“Lending Office” of such Lender (or of an affiliate of such Lender) designated for such Type of
Loan on the respective signature pages hereof or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent
and Borrower as the office by which its Loans of such Type are to be made and maintained.




(18) “Applicable Margin” has the meanings set forth in the Notes.



(19) “Appraisal” means an appraisal of the Project prepared by an appraiser reasonably
satisfactory to the Administrative Agent, which appraisal must also (a) satisfy the requirements of
Title XI of the Federal Institution Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder (including the appraiser with respect thereto) and (b) be
otherwise in form and substance reasonably satisfactory to the Administrative Agent.



(20) “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and 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.



(21) “Approved Mezzanine Loans” means, collectively, the Existing Mezzanine Loan and
the Junior Mezzanine Loan.


 


3









 






(22) “Approved Sales Program” has the meaning assigned in Section 14.2.




(23) “Arranger” means Eurohypo AG, New York branch.



(24) “Assignment and Acceptance” means an Assignment and Acceptance, duly executed by
the parties thereto, in substantially the form of Exhibit D hereto and consented to by the
Administrative Agent in accordance with Section 12.24(2).



(25) “Assignment of Construction Management Contract and Consent to Assignment” means
that certain Assignment of Construction Management Contract dated as of the date hereof made by
Borrower for the benefit of the Administrative Agent (on behalf of the Lenders) and that certain
Consent and Agreement of Construction Manager dated as of the date hereof made by Construction
Manager in favor of the Administrative Agent (on behalf of the Lenders).



(26) “Assignment of Contracts” means that certain Collateral Assignment of Contracts,
Development Rights, Licenses, Permits, Warranties and Guaranties executed by Borrower for the
benefit of the Administrative Agent (on behalf of the Lenders) of even date, as the same may be
modified, amended and/or supplemented from time to time.



(27) “Assignment of Rents and Leases” means the Assignment of Rents and Leases,
executed by Borrower for the benefit of the Administrative Agent (on behalf of the Lenders), and
pertaining to leases of space in the Project, as the same may be modified, amended and/or
supplemented from time to time.




(28) “Association” means the association to be formed pursuant to the Declaration.



(29) “Authorized Officer” means with respect to Borrower or Sole Member, an officer of
Sanctuary Management who has knowledge of the financial affairs of Borrower or Sole Member and with
respect to Morgans LLC an officer who holds the title of controller or chief financial officer or
an equivalent title.



(30) “Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. § 101 et
seq., as amended from time to time.




(31) “Bankruptcy Party” has the meaning assigned in Section 10.9.



(32) “Base Rate” means, for any day, a rate per annum equal to the Prime Rate for such
day. Each change in any interest rate provided for herein based upon the Base Rate resulting from
a change in the Base Rate shall take effect at the time of such change in the Base Rate.



(33) “Base Rate Loans” means Loans that bear interest at rates based upon the Base
Rate.



(34) “Basel II” means that certain revised at-risk capital framework published by the
Basel Committee on Banking Supervision in its paper entitled “International Convergence
of Capital Measurement and Capital Standards: a Revised Framework” in June, 2004, as amended,
modified and in effect from time to time.


 


4









 





(35) “Boat Slip” or “Boat Slips” means any one or more of the boat slips
located adjacent to, and comprising a part of, the Project.




(36) “Borrower Party” means any Joinder Party, any Guarantor and the Sole Member.




(37) “Broker” has the meaning assigned in Section 12.25.



(38) “Building Conversion” means the conversion of the Project from a rental building
to a hotel condominium building in accordance with, and as contemplated by, the Project Budget, the
Plans and Specifications and the terms of this Agreement.



(39) “Business Day” means (a) any day other than a Saturday, a Sunday, or other day on
which commercial banks located in New York City are authorized or required by Applicable Law to
remain closed and (b) in connection with a borrowing of, a payment or prepayment of principal of or
interest on, a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice by
Borrower with respect to any such borrowing, payment, prepayment or Conversion, the term “Business
Day” shall also exclude a day on which banks are not open for dealings in Dollar deposits in the
London interbank market.



(40) “Cash Management Account” has the meaning assigned in the Cash Management
Agreement.



(41) “Cash Management Agreement” means that certain Second Amended and Restated Cash
Management and Security Agreement executed, dated and delivered by Borrower, the Administrative
Agent (on behalf of the Lenders) and the Depository Bank on or about the Amendment Closing Date, as
the same may be modified, amended and/or supplemented from time to time.



(42) “Casualty/Taking Account” has the meaning assigned to such term in the Cash
Management Agreement.


 


5









 





(43) “Change of Control” means: (a) any event, including, without limitation, the
sale, transfer, issuance, assignment, pledge or encumbrance in one or more transactions, of any
direct or indirect beneficial ownership interests in the Borrower, which results in (i) any Person,
other than Sole Member, owning or encumbering any of the membership interests in, or rights to
distributions from, Borrower; (ii) any Person other than the Sole Member having the responsibility
for managing and administering the day-to-day business and affairs of, or otherwise Controlling,
the Borrower, (iii) any Person other than MMI or Sanctuary West, owning or encumbering any of the
membership interests in, or rights to distributions from, Sole Member, or (iv) any Person other
than MMI or Sanctuary West Avenue, LLC having the responsibility for managing and administering the
day-to-day business and affairs of, or otherwise Controlling, the Sole Member; or (b) Morgans
Public no longer directly or indirectly (i) owning (free of any encumbrance) at least 51% of the
ownership interests in and rights to distributions from the MMI and owning at least 51% of the
ownership interests in and rights to distributions from the
Morgans LLC, (ii) having responsibility for managing and administering the day-to-day business
and affairs of MMI or Morgans LLC, or (iii) in any other respects, any Person other than Morgans
Public directly or indirectly Controlling MMI or Morgans LLC; or (c) Galbut or members of his
immediate family (including parents, spouse, children and siblings) no longer directly or
indirectly (i) owning at least 51% of the ownership interests in and rights to distributions from
Sanctuary Avenue, Sanctuary Holdings or Sanctuary Management, (ii) having responsibility for
managing and administering the day-to-day business and affairs of Sanctuary Avenue, Sanctuary
Holdings or Sanctuary Management, or (iii) in any other respects, any Person other than Galbut
directly or indirectly Controlling Sanctuary Avenue, Sanctuary Holdings or Sanctuary Management. A
“Change of Control” shall not be deemed to have occurred solely as a result of (w) the
transfer of membership interests in Sole Member between MMI and Sanctuary West, so long as MMI
and/or Sanctuary West continue to own 100% of the membership interests in Sole Member and to
Control Sole Member; (x) transfers of ownership interests Morgans Public; or (y) transfers by
Galbut of ownership interests in Sanctuary Avenue, Sanctuary Holdings or Sanctuary Management for
estate planning purposes to family members of Galbut or one or more trusts of the benefit of such
immediate family members, provided that after giving effect to such transfer Galbut shall
continue to have responsibility for managing and administering the day-to-day business and affairs
of, and otherwise continue to Control, Sanctuary Avenue, Sanctuary Holdings or Sanctuary
Management; or (z) as a result of Galbut’s passing away, he no longer Controls Sanctuary Avenue,
Sanctuary Holdings or Sanctuary Management, so long as Menin, Daniel Galbut, Frohlich or the
personal representative of the estate of Galbut Controls Sanctuary Avenue, Sanctuary Holdings and
Sanctuary Management.




(44) “CIT” has the meaning assigned in the Recitals.




(45) “Clearing Account” has the meaning assigned in the Clearing Account Agreement.



(46) “Clearing Account Agreement” means the Clearing Account Agreement among Borrower,
the Administrative Agent and the Clearing Bank pertaining to the Clearing Account, as the same may
be modified, amended and/or supplemented and in effect from time to time.



(47) “Clearing Bank” has the meaning assigned to such term in the Clearing Account
Agreement.



(48) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and
any regulations promulgated thereunder.


 


6









 





(49) “Commitment” means, as to each Lender, the obligation of such Lender to make a
Loan in a principal amount up to but not exceeding the amount set opposite the name of such Lender
on Schedule 1(a) under the caption “Commitment” or, in the case of a Person that becomes a
Lender pursuant to an assignment permitted under Section 12.24(2), as specified in the
respective instrument of assignment pursuant to which such assignment is effected. As of the date
hereof, the amount of the Commitments have been fully funded.



(50) “Completion Guaranty” means that certain Second Amended and Restated Completion
Guaranty executed by Galbut, Frohlich, Menin and Morgans LLC in favor of the Administrative Agent
(on behalf of the Lenders) as the same may be modified, amended, and/or supplemented and in effect
from time to time.




(51) “Condominium Act” means Chapter 718 of the Florida Statutes, as amended.



(52) “Condominium Escrow” means that certain condominium escrow held pursuant to the
Condominium Escrow Agreement.



(53) “Condominium Escrow Agreement” means the condominium escrow agreement between
Borrower and Escrow Agent, approved by the Administrative Agent in writing.



(54) “Constituent Documents” means (a) the Public Offering Statement submitted and
approved pursuant to the Condominium Act; (b) the Declaration; and (c) the articles of
incorporation and by-laws of the Association.



(55) “Construction Completion” means the satisfaction of all of the conditions set
forth on Part B of Schedule 2.1 as required pursuant to the terms of this Agreement.



(56) “Construction Completion Account” has the meaning assigned in the Cash Management
Agreement.




(57) “Construction Completion Deadline” means April 1, 2009.



(58) “Construction Completion Fund” has the meaning assigned in
Section 4.3(1).




(59) “Construction Consultant” has the meaning assigned in Section 8.3.



(60) “Construction Management Contract” means the contract for the management of
construction of the Improvements dated as of July 9, 2007, entered into between Borrower and the
Construction Manager, as the same may be modified, supplemented and/or amended from time to time in
accordance with the terms of this Agreement.




(61) “Construction Manager” means G.T. Construction and Development, Inc.



(62) “Continue” “Continuation” and “Continued” refer to the
continuation pursuant to Section 2.2 of (a) a Eurodollar Loan from one Interest Period to
the next Interest Period or (b) a Base Rate Loan at the Base Rate.



(63) “Contract Price” means the Purchase Price of a Unit as set forth in a Qualified
Purchase Contract (net of any credits to the purchaser), not including any amounts for any
build-out or improvements in excess of Standard Unit Finish.


 


7









 





(64) “Control” of one Person (the “controlled Person”) by another Person (the
“controlling Person”) means the possession, directly or indirectly, by the controlling Person of
the power or ability to direct or cause the direction of the management or policies of the
controlled Person, whether through the ability to exercise voting power, by contract or otherwise
(“Controlled” and “Controlling” each have the meanings correlative thereto).



(65) “Convert” “Conversion” and “Converted” means, with respect to any
Type of Loan, a conversion pursuant to the terms of this Agreement of one Type of Loans into
another Type of Loans, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.



(66) “Debt” means, for any Person, without duplication: (a) all indebtedness of such
Person for borrowed money, for amounts drawn under a letter of credit, or for the deferred purchase
price of property for which such Person or its assets is liable, (b) all unfunded amounts under a
loan agreement, letter of credit, or other credit facility for which such Person would be liable,
if such amounts were advanced under the credit facility, (c) all amounts required to be paid by
such Person as a guaranteed payment to partners, members (or other equity holders) or a preferred
or special dividend, including any mandatory redemption of shares or interests, (d) all
indebtedness guaranteed by such Person, directly or indirectly, (e) all obligations under leases
that constitute capital leases for which such Person is liable, and (f) all obligations of such
Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in
each case whether such Person is liable contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person otherwise assures a creditor against
loss.



(1) “Debt Service” means, for any period of determination, the aggregate interest due
with respect to the Loans and/or the Existing Mezzanine Loan, as the context so requires, during
such period.



(2) “Debt Service Subaccount” has the meaning assigned in the Cash Management
Agreement.



(67) “Debt Service Coverage Ratio” means, as of any date of determination, the ratio
of Net Operating Income to Debt Service for the twelve (12) calendar months ending immediately
prior to the date of such determination. The Debt Service Coverage Ratio shall be as determined by
the Administrative Agent based upon the most recent reports required to have been submitted by
Borrower under Section 8.1 (or, if no such reports have been so submitted, such other
information as Administrative Agent shall determine in its discretion), which determination shall
be conclusive in the absence of manifest error.




(68) “Declarant” has the meaning assigned in Section 9.17(5).



(69) “Declaration” means that certain Declaration of Condominium for Mirador 1000,
dated December 30, 2004 and recorded in the Clerk of the Court, Miami-Dade County, Florida, on
December 30, 2004 in OR Book 22959 at Page 1727.


 


8









 





(70) “Default Rate” means a rate per annum equal to five percent (5%) plus the Base
Rate as in effect from time to time plus the Applicable Margin for Base Rate Loans,
provided that, with respect to principal of a Eurodollar Loan, the “Default
Rate” shall be the greater of (a) five percent (5%) plus the interest rate for such Loan as
provided in Section 2.3 and (b) the rate provided for above in this definition;
provided, however, that in no event shall the Default Rate exceed the maximum rate
allowed by Applicable Law.




(71) “Defaulting Lender” has the meaning assigned in Section 15.12(1).




(72) “Deficiency Deposit” has the meaning assigned in Section 14.1(3).



(73) “Depository Bank” has the meaning assigned to such term in the Cash Management
Agreement.



(74) “Distribution” means, other than payments which are expressly permitted to be
made pursuant to this Agreement, any of the following: (a) the payment by any Person of any
Distributions or other payments to its shareholders, members or partners; (b) the declaration or
payment of any dividend on or in respect of shares of any class of capital stock of, membership
interest in, or partnership interest in, any Person; (c) the purchase or other retirement of any
shares of any class of capital stock of, membership interest in, or partnership interest in, any
Person, directly or indirectly through a subsidiary or otherwise; (d) the return of capital by any
Person to its shareholders, members, or partners; or (e) any other payment on or in respect of any
shares of any class of capital stock of, membership interest in, or partnership interest in, any
Person.




(75) “Dollars” and “$” means lawful money of the United States of America.



(76) “Eligibility Requirements” means, with respect to any Person, that such Person
(a) (i) has total assets (in name or under management) in excess of $400,000,000 and (except with
respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholders’
equity of $250,000,000, or (ii) is otherwise approved in writing by Eurohypo (which approval shall
not be unreasonably withheld); and (b) is regularly engaged in the business of making or owning
commercial real estate loans (including mezzanine loans and participation interests in commercial
real estate loans) or operating commercial properties.



(77) “Eligible Assignee” means any of (a) a commercial bank organized under the laws
of the United States, or any State thereof, and having (i) total assets in excess of $1,000,000,000
and (ii) a combined capital and surplus of at least $250,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization of Economic Cooperation
and Development (“OECD”), or a political subdivision of any such country, and having (i)
total assets in excess of $1,000,000,000 and (ii) a combined capital and surplus of at least
$250,000,000, provided that such bank is acting through a branch or agency located in the
country in which it is organized or another country which is also a member of OECD; (c) a life
insurance company organized under the laws of any State of the United States, or organized under
the laws of any country and licensed as a life insurer by any State within the United States and
having admitted assets of at least $1,000,000,000; (d) a nationally recognized investment banking
company or other financial institution in the business of making loans, or an Affiliate thereof
(other than any Person which is directly or indirectly a Borrower Party or directly or indirectly
an Affiliate of any Borrower Party) organized under the
laws of any State of the United States, and licensed or qualified to conduct such business
under the laws of any such State and having (i) total assets of at least $1,000,000,000 and (ii) a
net worth of at least $250,000,000; (e) an Approved Fund; or (f) or a Related Entity of Eurohypo.


 


9









 






(78) “Environmental Claim” has the meaning assigned in Section 5.1(1).




(79) “Environmental Laws” has the meaning assigned in Section 5.1(2).




(80) “Environmental Liens” has the meaning assigned in Section 5.3(4).




(81) “Environmental Losses” has the meaning assigned in Section 5.1(4).



(82) “Equity Balancing Contribution” has the meaning assigned in
Section 14.1(3).



(83) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time and any regulations promulgated thereunder.



(84) “Escrow Agent” means an escrow agent as may be reasonably approved by
Administrative Agent.



(85) “Eurodollar Loan” means Loans that bear interest at rates based on rates referred
to in the definition of “LIBOR Rate”.




(86) “Eurohypo” means Eurohypo AG, New York Branch.




(87) “Event of Default” has the meaning assigned in Article 10.



(88) “Excess Cash Flow” means, with respect to the applicable Unit, the Net Sales
Proceeds less the Scheduled Release Price.




(89) “Existing Loans” has the meaning assigned in the Recitals.




(90) “Existing Loan Agreement” has the meaning assigned in the Recitals.




(91) “Existing Mezzanine Lender” has the meaning assigned in the Recitals.




(92) “Existing Mezzanine Loan” has the meaning assigned in the Recitals.




(93) “Existing Mezzanine Loan Agreement” has the meaning assigned in the Recitals.



(94) “Exit Fee” means a fee payable by Borrower to Administrative Agent (for the
benefit of the Lenders) in an amount equal to one and one-quarter percent (1.25%) of the full
amount of the Commitments evidenced by Note B, including any portion of the Commitments acquired by
Eurohypo pursuant to Section 2.11.



(95) “FNMA” means the Federal National Mortgage Association.


 


10









 





(96) “Fifth Extension Notice” has the meaning assigned to such term in Section
2.5(5)(a).



(97) “Fifth Extension Period” has the meaning assigned to such term in Section
2.5(5).



(98) “First Extension Notice” has the meaning assigned to such term in Section
2.5(1)(a).



(99) “First Extension Period” has the meaning assigned to such term in Section
2.5(1).



(100) “Forward Purchase Contract” means that certain Agreement for Purchase of
Condominium Units and related Amended and Restated Rider, each dated as of April 25, 2008, by and
among Borrower, as seller and/or developer, and Abraham Galbut, Frohlich, Menin and Morgans,
individually and collectively, as buyers and/or purchasers.



(101) “Fourth Extension Notice” has the meaning assigned to such term in Section
2.5(4)(a).



(102) “Fourth Extension Period” has the meaning assigned to such term in Section
2.5(4).



(103) “Franchise Fee” means the franchise fee payable to Hotel Manager as hotel
operator upon the sale of a Unit, which shall be in the amount of one percent (1%) of the Purchase
Price of such Unit up to that portion of the gross sales price attributable to a gross sales price
of $800 per square foot, and ten percent (10%) of the Units’ gross sales price attributable to a
sales price greater than $800 per square foot.




(104) “Frohlich” means Seth Frohlich, an individual.




(105) “Galbut” means Abraham Galbut, an individual.



(106) “Government Lists” means (a) the Specially Designated Nationals and Blocked
Persons List maintained by OFAC, (b) any other list of terrorists, terrorist organizations or
narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC that is
included in “Governmental Lists”, or (c) any similar list maintained by the United States
Department of State, the United States Department of Commerce or any other Governmental Authority
or pursuant to any Executive Order of the President of the United States of America.



(107) “Guarantee” or “Guaranty” means any instruments of guaranty (including
the Joinder and the Completion Guarantee) delivered to the Administrative Agent (for the benefit of
the Lenders) in connection with the Loans.



(108) “Guarantor” or “Guarantors” mean the Persons, including the Joinder
Parties, executing a Guarantee.



(109) “Hazardous Materials” has the meaning assigned in Section 5.1(5).


 


11









 





(110) “Hazardous Substances Indemnity Agreement” means that certain Hazardous
Substances Indemnity Agreement by Borrower and Joinder Parties in favor of the Administrative Agent
and each of the Lenders, to be executed, dated and delivered to the Administrative Agent (on behalf
of the Lenders) on the Original Closing Date, as the same may be modified, amended and/or
supplemented and in effect from time to time.



(111) “Hedge Agreement” shall mean an interest rate cap with a maturity date of the
initial Maturity Date entered into with an Acceptable Counterparty with a notional amount equal to
the outstanding principal balance of the Loans for the term of the Loan and a LIBOR strike price
not greater than five percent (5%). Furthermore, each Hedge Agreement shall provide for (i) the
calculation of interest, (ii) the determination of the interest rate, (iii) the modification of the
Interest Period, and (iv) the distribution of payments thereunder to be identical to the definition
of Interest Period set forth herein.



(112) “Hedge Agreement Pledge” means that certain Assignment, Pledge and Security
Agreement, to be executed, dated and delivered by Borrower and Acceptable Counterparty to the
Administrative Agent (on behalf of the Lenders) in accordance with Section 9.15 and at any
other time Borrower elects or is required to enter into a Hedge Agreement, covering Borrower’s
right, title and interest in and to any such Hedge Agreement, as the same may be modified, amended
and/or supplemented and in effect from time to time.



(113) “Hotel Improvements” means that portion of the Improvements consisting of a
335-room luxury hotel to be known as “Mondrian South Beach Hotel Residences,” consisting of a
restaurant, a sunset bar, a swimming pool, a gym, a spa, the Boat Slips, on-site parking areas, and
related amenities and improvements.



(114) “Hotel Management Agreement” means that certain Hotel Management Agreement dated
as of August 7, 2006, between the Hotel Manager and Borrower with respect to the management of the
Project as a hotel, as the same may from time to time hereafter be modified, amended or replaced in
accordance with the terms of this Agreement.



(115) “Hotel Manager” means Morgans Hotel Group Management LLC, a Delaware limited
liability company, or another hotel manager acceptable to the Administrative Agent.



(116) “Hotel Manager’s Consent” means the Hotel Manager’s Consent and Subordination
Agreement executed, dated and delivered by (i) the Hotel Manager and Borrower to the Administrative
Agent (on behalf of the Lenders) on the Original Closing Date and (ii) any successor Hotel Manager
to Administrative Agent (on behalf of Lenders) prior to its appointment as Hotel Manager, as the
same may be modified, amended and/or supplemented and in effect from time to time.



(117) “Hotel Opening” means that the Hotel Improvements are open for business with the
public in compliance with the all Applicable Law and the majority of Units have been completed and
are ready for occupancy.



(118) “Hotel Opening Deadline” means January 1, 2009.


 


12









 





(119) “Improvements” has the meaning assigned in the Mortgage.



(120) “Indemnified Party” has the meaning assigned in Section 9.12.



(121) “Initial Take-Out Amount” means the lesser of (a) $35,000,000.00; and (b) the
aggregate outstanding principal balance of Note A at the time the Initial Take-Out Amount is
required to be paid to the Note A Holders by Eurohypo pursuant to the Take-Out Agreement.



(122) “Initial Take-Out Interest” means the interest in Note A acquired by Eurohypo
upon payment of the Initial Take-Out Amount to the Note A Holders pursuant to the Take-Out
Agreement.




(123) “Initial Take-Out Right” has the meaning assigned in Section 2.11(1).



(124) “Insurance Proceeds Deficiency” has the meaning assigned in
Section 3.4(5).



(125) “Interest Holdback” means that undisbursed portion of the Existing Mezzanine
Loan as of the Amendment Closing Date, equal to $1,953,629.58, which has been allocated under the
Existing Mezzanine Loan Agreement, for the sole purpose of paying Debt Service on the Loans and the
Existing Mezzanine Loan due and accruing on, and subsequent to, the Amendment Closing Date.



(126) “Interest Period” means, with respect to any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or Converted from a Base Rate Loan or (in the
event of a Continuation) the last day of the immediately preceding Interest Period for such Loan
and ending on the numerically corresponding day fourteen (14) days thereafter or in the first,
second, third or sixth calendar month thereafter, as Borrower may select as provided in
Section 2.8(5); provided that (a) each Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no numerically corresponding day
in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month; (b) each Interest Period that would otherwise end on a day that is not a
Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business
Day falls in the next succeeding calendar month, on the immediately preceding Business Day);
(c) except for an Interest Period having a duration of fourteen (14) days, no Interest Period shall
have a duration of less than one month and, if the Interest Period for any Eurodollar Loan would
otherwise be a shorter period, such Loan shall bear interest at the Base Rate plus the Applicable
Margin for Base Rate Loans; (d) in no event shall any Interest Period extend beyond the Maturity
Date; and (e) there may be no more than five (5) separate Interest Periods in respect of Eurodollar
Loans outstanding from each Lender at any one time.



(127) “Involuntary Proceeding” has the meaning assigned in Section 10.9.



(128) “Joinder” means the Joinder attached hereto.



(129) “Joinder Party” means the Persons executing the Joinder.


 


13









 





(130) “Junior Loan Intercreditor Agreement” means that certain Subordination and
Standstill Agreement dated as of the date hereof, by and among Borrower, Sole Member, Junior
Mezzanine Borrower, Existing Mezzanine Lender, Junior Mezzanine Lender and the Administrative
Agent, on behalf of the Lenders.



(131) “Junior Mezzanine Borrower” means 1100 West Holdings II, LLC, a Delaware limited
liability company.



(132) “Junior Mezzanine Lender” means RMF Capital LLC, a Delaware limited liability
company, and any assignee of RMF Capital LLC permitted under the Junior Loan Intercreditor
Agreement, each in its capacity as the lender under the Junior Mezzanine Loan.



(133) “Junior Mezzanine Loan” means a loan to Junior Mezzanine Borrower in the
original principal amount of at least $22,500,000 (inclusive of the sum of $16,500,000, which has
been funded as of the date hereof), made pursuant to that certain Mezzanine Loan Agreement dated as
of the date hereof by and between Junior Mezzanine Borrower, as borrower, and Junior Mezzanine
Lender, as lender; it being agreed that, at the election of the Junior Mezzanine Borrower and the
Junior Mezzanine Lender, the amount of the Junior Mezzanine Loan may be increased from time to time
as necessary to pay the costs of the Building Conversion and to fund Debt Service and other
payments due under the Loan Documents and the Existing Mezzanine Loan Documents (as defined in the
Existing Mezzanine Loan Agreement).



(134) “KBC Bank” has the meaning assigned in the Recitals.



(135) “Lender
” or “Lenders”have the meaning assigned in the Recitals.



(136) “Lender Parties” has the meaning assigned in Section 17.



(137) “LIBOR Rate” or “Libor Rate” means, for any Interest Period for any
Eurodollar Loan, the rate per annum appearing on Reuters Screen LIBOR01 (formerly operated as
Page 3750 of the Dow Jones Market Service (Telerate)) (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as determined by
Administrative Agent from time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m. London
time on the date two (2) Business Days prior to the first day of such Interest Period as the rate
for the offering of Dollar deposits having a term comparable to such Interest Period,
provided that if such rate does not appear on such page, or if such page shall cease to be
publicly available, or if the information contained on such page, in the reasonable judgment of
Administrative Agent shall cease accurately to reflect the rate offered by leading banks in the
London interbank market as reported by any publicly available source of similar market data
selected by Administrative Agent, the LIBOR Rate for such Interest Period shall be determined from
such substitute financial reporting service as Administrative Agent in its discretion shall
determine.



(138) “Licenses” means any and all certifications, permits, licenses and approvals,
including without limitation, certificates of completion and occupancy permits,
required under Applicable Laws for the use, occupancy and operation of the Project as hotel
condominium in the manner contemplated following Construction Completion.


 


14









 





(139) “Lien” means any interest, or claim thereof, in the Project securing an
obligation owed to, or a claim by, any Person other than the owner of the Project, whether such
interest is based on common law, statute or contract, including the lien or security interest
arising from a deed of trust, mortgage, assignment, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for security purposes. The
term “Lien” shall include reservations, exceptions, encroachments, easements, rights of
way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances
affecting the Project.



(140) “Limiting Regulation” means any law or regulation of any governmental authority,
or any interpretation, directive or request under any such law or regulation (whether or not having
the force of law and whether or not failure to comply therewith would be unlawful) by any court or
governmental authority or monetary authority charged with the interpretation or administration
thereof, or any internal bank policy resulting therefrom (applicable to loans made in the United
States of America) which would or could in any way require a Lender to have the approval right
contained in Section 9.1.



(141) “Loan Documents” means, individually or collectively: (a) this Agreement
(including the Joinder hereto); (b) the Notes; (c) the Mortgage; (d) the Assignment of Rents and
Leases; (e) the Assignment of Contracts; (f) the Hedge Agreement Pledge; (g) the Hazardous
Substance Indemnity Agreement; (h) the Completion Guarantee; (i) the Cash Management Agreement; (j)
the Clearing Account Agreement; (k) the Hotel Manager’s Consent; (l) Assignment of Construction
Management Contract and Consent to Assignment; (m) the Project Manager’s Consent; (n) all Uniform
Commercial Code financing statements; (o) such assignments of management agreements, contracts and
other rights as may be required or requested by the Administrative Agent; (p) all other documents
evidencing, securing, governing or otherwise pertaining to the Loans; and (q) all amendments,
modifications, renewals, substitutions and replacements of any of the foregoing.




(142) “Loan Transactions” has the meaning assigned in Section 2.8(4).



(143) “Loan Year” means the period between the date hereof and August 31, 2009, for
the first Loan Year and the period between each succeeding September 1 and August 31, until the
Maturity Date.



(144) “Loans” means the loans to be made by the Lenders to Borrower under this
Agreement and all other amounts evidenced or secured by the Loan Documents.



(145) “Majority Lenders” means Lenders holding at least 66.67% of the aggregate
outstanding principal amount of the Loans.


 


15









 





(146) “Major Modification” means any modification to a Purchase Contract which (a)
modifies in any manner the purchase price set forth therein; (b) reopens, reinstates or in any
manner lengthens any applicable rescission period; (c) modifies the amount and/or timing of any
deposit required thereunder; (d) extends or otherwise changes in any material respect the
closing date set forth therein; (e) releases or otherwise consents to an assignment or
transfer of the obligations of the named purchaser thereunder; (f) increases or modifies the
Standard Unit Finish (unless the purchaser agrees in writing to pay the costs of such increases or
modifications); or (g) otherwise materially modifies the terms of such Purchase Contract.



(147) “Mandatory Principal Payments” means each and all of the payments required to be
made by the Borrower pursuant to Section 2.4(5).



(148) “Material Adverse Effect” means a material adverse effect, as unilaterally
determined by the Administrative Agent, in its reasonable judgment and discretion, on (a) the
Project or the business, operations, financial condition, prospects, liabilities or capitalization
of Borrower; (b) the ability of Borrower, to perform its obligations under any of the Loan
Documents to which it is a party, including the timely payment of the principal of or interest on
the Loans or other amounts payable in connection therewith; (c) the ability of any other Borrower
Party to perform its obligations under any of the Loan Documents to which it is a party; (d) the
validity or enforceability of any of the Loan Documents; or (e) the rights and remedies of the
Administrative Agent and the Lenders under any of the Loan Documents.



(149) “Maturity Date” means the earlier of (a) the Original Maturity Date, as such
date may extended in accordance herewith by the First Extension Period, the Second Extension
Period, the Third Extension Period, the Fourth Extension Period and the Fifth Extension Period, as
applicable; and (b) any earlier date on which all of the Loans are required to be paid in full, by
acceleration or otherwise, under this Agreement or any of the other Loan Documents.




(150) “Menin” means Keith Menin.



(151) “Minimum Seasonality Reserve Balance” means an amount proposed by Borrower and
Hotel Manager and approved by the Administrative Agent (which consent may be granted or withheld in
the Administrative Agent’s sole and absolute discretion) sufficient to provide a source of funds to
pay Operating Expenses during periods when Operating Revenues are insufficient for such purpose due
to seasonal variations in occupancy at the Hotel Improvements, as such amount may be increased or
decreased from time to time with the consent of the Administrative Agent (which consent may be
granted or withheld in the Administrative Agent’s sole and absolute discretion, subject to the
terms of any co-lender agreement among the Lenders).



(152) “Minimum Sales Price” means the minimum sales price for the sale of a Unit, as
set forth on the Minimum Sales Price Schedule.



(153) “Minimum Sales Price Schedule” means the schedule attached hereto as
Schedule 1(b).



(154) “Model Purchase Contract” means the form of purchase contract for the sale of
Units which shall be received and approved by the Administrative Agent, which approval shall not be
unreasonably withheld.



(155) “Mold” has the meaning assigned in Section 5.1(6).


 


16









 






(156) “MMI” means Mondrian Miami Investment LLC, a Delaware limited liability company.




(157) “Morgans LLC” means Morgans Group LLC, a Delaware limited liability company.




(158) “Morgans Public” means the Morgans Hotel Group Co., a Delaware corporation.



(159) “Mortgage” means that certain that certain Mortgage, Security Agreement, Fixture
Filing and Assignment of Leases and Rents dated as of August 8, 2006, recorded August 8, 2006, in
Official Records Book 24801, at Page 3306, of the Public Records of Miami-Dade County, Florida, as
modified by that certain First Amendment to Mortgage, Security Agreement, Fixture Filing and
Assignment of Leases and Rents, dated as of December 19, 2006, recorded December 20, 2006, in
Official Records Book 25210, at Page 3790, of the Public Records of Miami-Dade County, Florida, as
further modified by that certain Second Amendment to Mortgage, Security Agreement, Fixture Filing
and Assignment of Leases and Rents dated as of September 6, 2007, recorded September 21, 2007, in
Official Records Book 25944, at Pages 2682-2691, of the Public Records of Miami-Dade County,
Florida, as further modified by that certain Third Amendment to Mortgage, Security Agreement,
Fixture Filing and Assignment of Leases and Rents dated as of April 25, 2008, recorded April 28,
2008, in Official Records Book 26347, at Pages 3527-3536, of the Public Records of Miami-Dade
County, Florida, and as further modified by that certain Fourth Amendment to Mortgage, Security
Agreement, Fixture Filing and Assignment of Leases and Rents dated as of the Amendment Closing
Date, to be recorded in the Public Records of Miami-Dade County, Florida on or about the Amendment
Closing Date.



(160) “Net Operating Cash Flow” has the meaning assigned in the Cash Management
Agreement.



(161) “Net Operating Income” means the amount by which Adjusted Operating Revenues
exceed Adjusted Operating Expenses.



(162) “Net Sales Proceeds” means the Purchase Price of each Unit (and any Parking
Space sold separately from a Unit, which Parking Space may only be so sold with the prior written
consent of Administrative Agent) less:



(a) any sales or any brokerage commissions or fees (including fees to Borrower or any Borrower
Party) actually incurred in connection with the sale of such Unit and documented to the reasonable
satisfaction of the Administrative Agent;



(b) closing costs and prorations actually incurred in connection with the sale of such Unit
and documented to the reasonable satisfaction of the Administrative Agent (which closing costs and
prorations shall include such items as title insurance costs, real estate transfer taxes,
documentary stamp taxes, intangible taxes, attorneys’ fees, property taxes and homeowner’s
association fees);


 


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(c) with respect to any Unit, the cost of any “above standard” improvements or upgrades to
such Unit which are actually incurred and paid by Borrower, other than the costs of “above
standard” improvements or upgrades to such Unit for which Borrower receives reimbursement separate
from the Purchase Price, including reimbursement from the purchaser of such Unit or from sources
other than the Loan or the Construction Completion Fund (but only to the extent that the foregoing
costs were paid for with disbursements of the proceeds of the Loans prior to the Amendment Closing
Date);



(d) with respect to any Unit which is sold at a Purchase Price equal to or greater than the
Minimum Sales Price for such Unit, an allowance by Unit type for the Standard Unit Finish, which
allowance shall be previously approved by Administrative Agent, not to exceed, on average, $38,000
(but only to the extent that the foregoing allowances were paid for with disbursements of the
proceeds of the Loans prior to the Amendment Closing Date); and



(e) the amount of the Franchise Fee payable with respect to the sale of such Unit and any
accrued and unpaid Franchise Fee payable in connection with the sale of any previously sold Unit.



In no event shall the amounts in clauses (a), (b) and (c) above be deducted from the Purchase
Price unless Borrower provides evidence satisfactory to the Administrative Agent of Borrower’s
payment of such amounts at the time of each closing of the Unit together with any Parking Space
sold in connection with such Unit. In no event, unless approved by the Administrative Agent as
provided in Section 9.7(2), shall (i) any fees or commissions be paid to Borrower or any
Affiliate of Borrower from the gross sales proceeds be in excess of fees and commissions in the
amount customarily charged in connection with hotel condominium unit sales in the City of Miami
Beach, Miami-Dade County, Florida area, or (ii) any commissions, brokerage fees and/or closing
costs exceed what is reasonable and customary in the industry.



Notwithstanding any provision of this Agreement to the contrary, for all Units in the Project,
the maximum total per Unit, together with any Parking Space sold in connection with such Unit, of
the amounts in (a), (b) and (e) above (collectively, the “Controlled Closing Costs”) shall
be nine and one-quarter percent (9.25%) of the Purchase Price of such Unit and any Parking Space
sold in connection with such Unit (the “Related Parking Space”); provided,
however, that the Controlled Closing Costs for any such Unit and Related Parking Space may
exceed nine and one-quarter percent (9.25%) of the Purchase Price of such Unit and Related Parking
Space, so long as (i) the average of Controlled Closing Costs for such Unit and Related Parking
Space and all other such Units and Related Parking Spaces previously sold and closed does not
exceed nine and one-quarter percent (9.25%) of the Purchase Prices of such Units and Related
Parking Spaces, and (ii) upon the sale of all remaining Units having a Purchase Price equal to or
greater than the respective Minimum Sales Prices, the average of Controlled Closing Costs for all
such Units and Related Parking Spaces will not exceed nine and one-quarter percent (9.25%) of the
Purchase Prices of all such Units and Related Parking Spaces. Controlled Closing Costs shall not
include Special Credits or other “special” or “promotional” credits or concessions granted to the
purchaser of such Unit, so long as the sum of all Special Credits and such other “special” or
“promotional” credits and concessions do not, in the aggregate, exceed the amount by which the
Purchase Price for such Unit exceeds the Minimum Sales Price therefor.


 


18









 





No corporate overhead or developer’s fees may be paid or advanced from sales proceeds of
Units.



(163) “Note A” means (collectively or individually, as the context may require) (a)
that certain Amended and Restated Substitute Promissory Note A-1 in the amount of $26,078,765.93,
of even date herewith made by Borrower in favor of CIT; (b) that certain Amended and Restated
Substitute Promissory Note A-2 in the amount of $26,722,686.13, of even date herewith, made by
Borrower in favor of KBC Bank; and (c) any promissory notes delivered in substitution or exchange
for either of such Amended and Restated Substitute Promissory Note A-1 and/or Amended and Restated
Substitute Promissory Note A-2, in each case as each of the same may be consolidated, replaced,
severed, modified, amended or extended from time to time.




(164) “Note A Holders” means, collectively, CIT and KBC.



(165) “Note B” means that certain Amended and Restated Substitute Promissory Note B in
the amount of $31,278,947.05 of even date herewith, made by Borrower in favor of Eurohypo, and all
promissory notes delivered in substitution or exchange therefor, in each case as the same may be
consolidated, replaced, severed, modified, amended or extended from time to time.




(166) “Notes” means, collectively, Note A and Note B.



(167) “OFAC” means the Office of Foreign Assets Control, United States Department of
the Treasury, or any other office, agency or department that succeeds to the duties of OFAC.



(168) “Operating Expense Subaccount” has the meaning assigned in the Cash Management
Agreement.



(169) “Operating Expenses” means, with respect to any period, all reasonable and
necessary expenses of operating the Project in the ordinary course of business which are paid in
cash by Borrower and which are directly associated with and fairly allocable to the Project for the
such period, including ad valorem real estate taxes and assessments (to the extent not paid from
the Tax and Insurance Reserve Fund), insurance premiums, maintenance costs (including common area
maintenance costs), accounting, legal and other professional fees, fees relating to environmental
audits, expenses incurred by the Administrative Agent and reimbursed by Borrower under this
Agreement and the other Loan Documents, deposits to any capital replacement reserves required by
the Administrative Agent, wages, salaries and personnel expenses, fees and expenses incurred or
paid by Borrower under the Technical Services Agreement, fees and expenses incurred or paid by
Borrower under the Hotel Management Agreement and deposits to any reserves required under the Hotel
Management Agreement, but excluding Debt Service, capital expenditures, any of the foregoing
expenses which are paid from deposits to cash reserves previously included as Operating Expenses,
any payment or expense for which Borrower was or is to be reimbursed from proceeds of the Loans or
insurance or by any third party, and any non-cash charges such as depreciation and amortization.
Any other expense
payable to Borrower or to an Affiliate of Borrower shall be included as an Operating Expense
only with the Administrative Agent’s prior approval. Operating Expenses shall not include federal,
state or local income taxes or legal and other professional fees unrelated to the operation of the
Project and shall exclude Building Conversion, sales and marketing expenses and other costs
attributable or incurred for the purpose of the Building Conversion and the sale and marketing of
Units for sale to third parties.


 


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(170) “Operating Revenues” means, with respect to any period after the date hereof,
all cash receipts of Borrower from operation of the Project or otherwise arising in respect of the
Project which are properly allocable to the Project for the such period, including receipts from
leases, parking agreements and boat slip agreements, concession fees and charges and other
miscellaneous operating revenues, proceeds from rental or business interruption insurance, proceeds
of any loans (other than the Loans and any refinancing of the Loans) obtained by Borrower after the
date hereof which are secured by any interest in the Project (less only reasonable and customary
expenses incurred in procuring and closing such loan and actually paid in cash to individuals or
entities other than Borrower or any Affiliate of Borrower and without implying any consent of the
Administrative Agent or any Lender to the granting of any security for any such loans), withdrawals
or disbursements from any cash reserves (except to the extent any operating expenses paid therewith
are excluded from Operating Expenses), but excluding security deposits and earnest money deposits,
advance rentals until they are earned, proceeds from a sale or other disposition of all or any
portion of the Project (including any proceeds from the sale of Units), insurance proceeds (other
than from business interruption insurance), condemnation awards and Net Sales Proceeds.



(171) “Organizational Documents” means, with respect to any Person who is not a
natural person, the certificate or articles of incorporation, memorandum of association, articles
of association, trust agreement, by-laws, partnership agreement, limited partnership agreement,
certificate of partnership or limited partnership, limited liability company articles of
organization, limited liability company operating agreement or any other organizational document,
and all shareholder agreements, voting trusts and similar arrangements with respect to its stock,
partnership interests, membership interests or other equity interests.



(172) “Original Closing Date” means August 8, 2006.



(173) “Original Maturity Date” means August 1, 2009.



(174) “Out
of Balance” has the meaning assigned in
Section 14.1(3).



(175) “Parking Space” or “Parking Spaces” means any one or more of the parking
spaces located on the Project.




(176) “Partial Release Conditions” has the meaning assigned in Section 14.5.




(177) “Participant” has the meaning assigned in Section 12.24(3).



(178) “Parking Space Release Price” means with respect to Parking Spaces which are
sold separately from a Unit, the greater of (a) ninety-five percent (95%) of the gross proceeds
from the sale of such Parking Space, and (b) one hundred percent (100%) of the Net
Sales Proceeds from the sale of such Parking Space (provided, however, that
Net Sales Proceeds from the sale of such Parking Space shall be determined without any deduction
for items described in clauses (c) and (d) of the definition of Net Sales Proceeds.


 


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(179) “Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as
the same may be amended from time to time, and corresponding provisions of future laws.



(180) “Patriot Act Offense” means any violation of the criminal laws of the United
States of America or of any of the several states, or that would be a criminal violation if
committed within the jurisdiction of the United States of America or any of the several states,
relating to terrorism or the laundering of monetary instruments, including any offense under
(a) the criminal laws against terrorism; (b) the criminal laws against money laundering; (c) the
Bank Secrecy Act, as amended; (d) the Money Laundering Control Act of 1986, as amended; or
(e) Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit,
or aiding and abetting another to comment, a Patriot Act Offense.




(181) “Payment Date” means the first Business Day of each calendar month.




(182) “Permitted Encumbrances” has the meaning set forth in the Mortgage.



(183) “Person” means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability company, unincorporated
organization, real estate investment trust, government or any agency or political subdivision
thereof, or any other form of entity.



(184) “Plans and Specifications” means the plans and specifications for the Building
Conversion approved by the Administrative Agent as part of the overall review and approval of the
Project by the Administrative Agent on or about the Original Closing Date.



(185) “Potential Default” means the occurrence of any event or condition which, with
the giving of notice, or the passage of time, or both, would constitute an Event of Default.



(186) “Prime Rate” means the rate of interest from time to time announced by Eurohypo
at its principal office as its prime commercial lending rate, it being understood that such prime
commercial rate is a reference rate and does not necessarily represent the lowest or best rate
being charged by Eurohypo to any customer.



(187) “Project” means “Mondrian South Beach,” a luxury hotel condominium development
containing 335 hotel condominium units and 177 parking spaces, located in Miami Beach, Florida,
including related amenities, a restaurant, parking facilities, fixtures, and personal property
owned by Borrower, the Borrower’s interest in the Boat Slips, and any Improvements now or hereafter
located on the real property described in Exhibit “A”.


 


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(188) “Project Budget” means the budget for the Building Conversion and all other
costs and expenses of the Project, including, furniture, fixtures and equipment, interest expense,
and also including the sources and uses of funds, attached hereto as Schedule 7.23.




(189) “Project Manager” means Sanctuary Management.



(190) “Project Manager’s Consent” means the Project Manager’s Consent and
Subordination Agreement delivered by the Project Manager and Borrower to the Administrative Agent
(on behalf of the Lenders) on the Original Closing Date, as the same may be modified, amended
and/or supplemented and in effect from time to time.



(191) “Project Management Agreement” means that certain Project Management Agreement
dated as of August 7, 2006 between Borrower and Project Manager.




(192) “Projected Costs” has the meaning assigned in Section 14.1(3).




(193) “Proposed Lender” has the meaning assigned in Section 2.9(7).



(194) “Public Offering Statement” means that certain “Prospectus for 1100 West, a
Condominium,” as amended, having Florida Department of Business and Professional Regulation,
Division of Land Sales, Condominiums and Mobile Homes Identification No. PR74541, as the same has
been approved pursuant to the Condominium Act.



(195) “Purchase Contract” means a purchase and sale contract, including any addenda
thereto, between a third party purchaser and Borrower with respect to the sale of a Unit (which
contract may also provide for the sale of one or more Parking Spaces or Boat Slips).




(196) “Purchase Price” means the gross sales price received from a Purchase Contract.



(197) “Qualified Hotel Manager” means, in the event that the Hotel Management
Agreement has been terminated, a replacement hotel manager acceptable to the Administrative Agent
and the Lenders.



(198) “Qualified Purchase Contract” means a Purchase Contract which (a) is in the form
of the Model Purchase Contract with all Major Modifications approved by Administrative Agent; (b)
is between Borrower and a purchaser that is not an Affiliate of Borrower; (c) is a legally
enforceable, unconditional contract which contains no contingencies (other than a financing
contingency) or other unexpired rescission or termination provision or period; (d) is in compliance
with the Condominium Act and all applicable rules and regulations; (e) is not subject to rescission
or avoidance by the purchaser thereunder as a result of Borrower’s failure to comply with the
disclosure requirements of the Condominium Act; (e) is not the subject of a default by Borrower or
the purchaser; (f) except for such amounts which may be refundable pursuant to a contingency or
failure of condition, is the subject of a paid non-refundable deposit of at least three percent
(3%) of the Purchase Price (provided, however, with respect to all cash deals, such
deposit must be at least 5% and for deals which will be 100% financed, such deposit must be at
least $2,500) and such sum is held in the Condominium Escrow; (g) without limiting the provisions
of Section 9.15, specifies a Purchase Price equal to
or greater than the applicable Minimum Sales Price set forth on Schedule 1(b); and (h)
if it is to be financed by a third party lending institution, then the purchaser thereunder has
received “pre-approval” for a mortgage by an FNMA-approved lender. Such “pre-approval” means that
such lender has reviewed and approved purchaser’s credit, income, and funds to close and final
approval is contingent only upon (i) lender obtaining an appraisal, (ii) the purchaser providing
documentation to evidence representations made to lender, and (iii) other typical and customary
closing requirements of such FNMA approved lender.


 


22









 






(199) “Qualified Substitute Lender” means one or more of the following:



(a) a real estate investment trust, bank, saving and loan association, investment bank,
insurance company, trust company, commercial credit corporation, pension plan, pension fund or
pension advisory firm, mutual fund, government entity or plan, provided that any such Person
referred to in this clause (a) satisfies the Eligibility Requirements;



(b) an investment company, money management firm or “qualified institutional buyer” within the
meaning of Rule 144A under the Securities Act of 1933, as amended, or an “accredited investor”
within the meaning of Regulation D under the Securities Act of 1933, as amended, provided that any
such Person referred to in this clause (b) satisfies the Eligibility Requirements;



(c) an institution substantially similar to any of the foregoing entities described in
clauses (a) and (b) of this definition that satisfies the Eligibility Requirements;



(d) any entity Controlling, Controlled by or under common Control with one or more of any of
the entities described in clauses (a), (b) and (c) of this definition;



(f) an investment fund, limited liability company, limited partnership or general partnership
where an entity that is otherwise a Qualified Lender under clauses (a), (b) or
(c) of this definition investing through a fund with committed capital of at least
$250,000,000 acts as the general partner, managing member or fund manager and at least 50% of the
equity interests in such investment vehicle are owned, directly or indirectly, by one or more
entities that are otherwise Qualified Lenders under clauses (a), (b) or (c)
of this definition; or



(g) any Person which is a Qualified Lender (pursuant to the foregoing clauses) but is acting
in any agency capacity in connection with a lending syndicate, so long as at least fifty-one
percent (51%) or more of the lenders in the lending syndicate (by then current loan balance) are
Qualified Lenders (pursuant to the foregoing clauses).



(200) “Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System of the United States of America (or any successor), as the same may be modified and
supplemented and in effect from time to time.



(201) “Regulatory Change” means, with respect to any Lender, any change after the date
hereof in Federal, state or foreign law or regulations (including, without limitation, Regulation
D) or the adoption or making after such date of any interpretation, directive or request applying
to a class of banks including such Lender of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.


 


23









 






(202) “Rejecting Lender” has the meaning assigned in Section 9.1.



(203) “Related Entity” means, as to any Person, (a) any Affiliate of such Person;
(b) any other Person into which, or with which, such Person is merged, consolidated or reorganized,
or which is otherwise a successor to such Person by operation of law, or which acquires all or
substantially all of the assets of such Person; (c) any other Person which is a successor to the
business operations of such Person and engages in substantially the same activities; or (d) any
Affiliate of the Persons described in clauses (b) and (c) of this definition.




(204) “Requesting Lender” has the meaning assigned in Section 2.9(7).




(205) “Required Payment” has the meaning assigned in Section 2.8(6).



(206) “Reserve Account Collateral” has the meaning assigned to such term in
Section 4.4(1).



(207) “Reserve Funds” means, collectively, the Tax and Insurance Reserve Fund, the
Seasonality Reserve Fund and the Construction Completion Fund.



(208) “Reserve Requirement” means, for any Interest Period for any Eurodollar Loan,
the average maximum rate at which reserves (including, without limitation, any marginal,
supplemental or emergency reserves) are required to be maintained during such Interest Period under
Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding
$1,000,000,000 against “Eurocurrency liabilities” (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall include any other reserves
required to be maintained by such member banks by reason of any Regulatory Change with respect to
(a) any category of liabilities that includes deposits by reference to which the LIBOR Rate for any
Interest Period for any Eurodollar Loans is to be determined as provided in the definition of
“LIBOR Rate” or (b) any category of extensions of credit or other assets that includes Eurodollar
Loans. The calculation of the Reserve Requirement by Lenders shall be substantially similar to the
calculation of the Reserve Requirement performed by Lenders with respect to similar classes of
commercial loans or commitments made by such Lenders.



(209) “Restaurant Lease” means that certain Lease dated as of August 12, 2008 between
Borrower, as landlord, and MC South Beach LLC, as tenant.



(210) “Restoration Consultant” has the meaning assigned to such term in
Section 3.4(2).



(211) “Restoration Retainage” has the meaning assigned to such term in
Section 3.4(3).



(212) “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.


 


24









 





(213) “Sanctuary Avenue” means Sanctuary West Avenue, LLC, a Delaware limited
liability company.



(214) “Sanctuary Holdings” means Sanctuary West Holdings, LLC, a Delaware limited
liability company.



(215) “Sanctuary Management” mean Sanctuary West Management LLC, a Delaware limited
liability company.



(216) “Scheduled Release Price” means, with respect to the applicable Unit, the
release price with respect thereto as set forth on the Unit Release Schedule.



(217) “Seasonality Reserve Account” has the meaning assigned in the Cash Management
Agreement.




(218) “Seasonality Reserve Fund” has the meaning assigned in Section 4.2(1).



(219) “Second Extension Notice” has the meaning assigned to such term in Section
2.5(2)(a).



(220) “Second Extension Period” has the meaning assigned to such term in Section
2.5(2).



(221) “Second Take-Out Amount” means the aggregate outstanding principal balance of
Note A at the time the Second Take-Out Amount is required to be paid to the Note A Holders by
Eurohypo pursuant to the Take-Out Agreement.




(222) “Secured Indebtedness” has the meaning assigned in the Mortgage.



(223) “Security Accounts” means, collectively, the Tax and Insurance Reserve
Subaccount, the Operating Expense Subaccount, the Casualty/Taking Account, the Seasonality Reserve
Account, the Clearing Account, the Cash Management Account, the Construction Completion Account,
the Debt Service Subaccount and the Reserve Funds.



(224) “Security Documents” means collectively, the Mortgage, the Assignment of Rents
and Leases, the Assignment of Contracts, the Assignment of Construction Management Contract and
Consent to Assignment, the Hedge Agreement Pledge, the Clearing Account Agreement, the Cash
Management Agreement and all Uniform Commercial Code financing statements required by this
Agreement, the Mortgage, the Clearing Account Agreement or the Cash Management Agreement to be
filed with respect to the applicable security interests.



(225) “Seller Financing” means the use of a portion of Excess Cash Flow by Borrower as
permitted pursuant to Section 14.4 for purposes of providing additional financing to
purchasers of Units, which seller financing may be in the form of (i) a note made by the purchaser
of a Unit in favor of Borrower evidencing a portion of the purchase price for such Unit; (ii) a
participation interest in favor of Borrower in a note made by the purchaser of a Unit in favor of a
third-party lender and evidencing all or a portion of the purchase price for such Unit; (iii) a
guarantee by an Affiliate of Borrower (other than Sole Member) in favor of a third-
party lender of the obligations of a the purchaser of Unit under a loan made by such
third-party lender to such purchaser, which guaranty may be collateralized only by that portion of
the Excess Cash Flow that Borrower may utilize for such purpose pursuant to Section
14.4(1); and (iv) any other form of seller financing approved by the Administrative Agent (such
approval not to be unreasonably withheld or delayed).


 


25









 





(226) “Seller Financing Collateral” has the meaning assigned in Section
14.6(1).



(227) “Single Purpose Entity” means a corporation, limited partnership or limited
liability company which at all times on and after the date hereof while the obligations hereunder
and under the other Loan Documents remain outstanding, unless otherwise approved in writing by the
Administrative Agent:



(a) is organized solely for the purpose of one of the following (i) acquiring, developing,
owning, holding, selling, leasing, transferring, exchanging, managing and operating the Project,
entering into this Agreement, refinancing the Project in connection with a permitted repayment of
the Loans, and transacting any and all lawful business that is incident, necessary and appropriate
to accomplish the foregoing or (ii) acting as the sole managing member of Borrower;



(b) is not engaged and will not engage in any business unrelated to (i) the acquisition,
development, ownership, management or operation of the Project or (ii) acting as the sole managing
member of Borrower;



(c) does not have and will not have any assets other than those related to (i) the Project, or
(ii) its membership interest in Borrower;



(d) has not engaged, sought or consented to and will not engage in, seek or consent to any
dissolution, winding up, liquidation, consolidation, merger, sale of all or substantially all of
its assets, transfer of partnership or membership interests (if such entity is a general partner in
a limited partnership or a member in a limited liability company), or any amendment of its articles
of incorporation, by-laws, limited partnership certificate, limited partnership agreement, articles
of organization, certificate of formation or operating agreement (as applicable) with respect to
the matters set forth in this definition;



(e) shall not, without the consent of all of its managers and members: (i) dissolve, merge,
liquidate or consolidate; (ii) sell all or substantially all of its assets or the assets of any
other entity in which it has a direct or indirect legal or beneficial ownership interest, (iii)
engage in any other business activity, other than as permitted pursuant to the Loan Documents, or
amend its organizational documents with respect to the matters set forth in this definition without
the consent of the Administrative Agent, or (iv) file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings with respect to itself or to any other entity in which
it has a direct or indirect legal or beneficial ownership interest or is the direct or indirect
general partner, manager or managing member;



(f) in the case of Borrower, has only one member which is a Single Purpose Entity;


 


26









 





(g) is and will remain solvent and pay its debts and liability (including, as applicable,
shared personnel and overhead expenses) from its assets as the same shall become due, and is
maintaining and will maintain adequate capital for the normal obligations reasonably foreseeable in
a business of its size and character and in light of its contemplated business operations;



(h) has not failed and will not fail to correct any known misunderstanding regarding the
separate identity of such entity;



(i) has maintained and will maintain its accounts, books and records separate from any other
Person and will file its own tax returns, except to the extent that it is required to file
consolidated tax returns by law;



(j) has not commingled and will not commingle its funds or assets with those of any other
Person;




(k) has held and will hold its assets in its own name;



(l) has maintained and will maintain financial statements that properly and accurately show
its separate assets and liabilities and do not show the assets or liabilities of any other Person,
and has not permitted and will not permit its assets to be listed as assets on the financial
statement of any other entity;



(m) has paid and will pay its own liabilities and expenses, including, but not limited to, the
salaries of its own employees (if any), out of its own funds and assets, and has maintained and
will maintain a sufficient number of employees in light of its contemplated business operations;



(n) has observed and will observe all corporate, partnership or limited liability company
formalities, as applicable;



(o) has not incurred and will not incur any Debt other than: (i) with respect to Borrower, (A)
the Loans, (B) without limiting the provisions of Section 9.2, indebtedness incurred in
accordance with the Project Budget which is (1) not more than sixty (60) days past the date of
invoice, (2) not evidenced by a note, and (3) paid when due, and (C) trade and operational debt
which is (1) incurred in the ordinary course of business, (2) not more than ninety (90) days past
the date of invoice, (3) with trade creditors, (4) in the aggregate amount of less than
$500,000.00, (5) not evidenced by a note, and (6) paid when due; and (ii) with respect to Sole
Member, subject to the terms of the Junior Loan Intercreditor Agreement, the Junior Mezzanine Loan
(it being agreed that no Debt other than the Loans may be secured by any part of the Project);



(p) has not and will not assume or guarantee or become obligated for the debts of any other
Person or hold out its credit as being available to satisfy the obligations of any other Person
except as permitted pursuant to this Agreement;


 


27









 





(q) has not and will not acquire obligations or securities of its members or shareholders or
any other affiliate (other than interests in the Borrower held by Sole Member);



(r) has allocated and will allocate fairly and reasonably any overhead expenses that are
shared with an affiliate, including, but not limited to, paying for shared office space and
services performed by any officer or employee of an affiliate;



(s) maintains and uses and will maintain and use separate invoices and checks bearing its
name. The stationary, invoices, and checks utilized by the Single Purpose Entity or utilized to
collect its funds or pay its expenses shall bear its own name and shall not bear the name of any
other entity unless such entity is clearly designated as being the Single Purpose Entity’s agent;



(t) except in connection with the Loans, has not pledged and will not pledge its assets for
the benefit of any other Person;



(u) has conducted business, held itself out and identified itself and will conduct business,
hold itself out and identify itself as a separate and distinct entity under its own name or in a
name franchised or licensed to it by a Person other than an affiliate of Borrower and not as a
division or part of any other Person;



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



(w) has not made and will not make loans to any Person or hold evidence of indebtedness issued
by any other Person (other than cash and securities issued by an entity that is not an affiliate
or subject to common ownership with such entity);



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



(y) except as expressly permitted in the Loan Documents, has not entered into or been a party
to, and will not enter into or be a party to, any transaction with its partners, members,
shareholders or affiliates except in the ordinary course of its business and on terms which are
intrinsically fair, commercially reasonable and are no less favorable to it than would be obtained
in a comparable arm’s-length transaction with an unrelated third party;



(z) has not and will not have any obligation to indemnify its partners, officers, directors or
members, as the case may be, unless such obligation is fully subordinated to the Secured
Indebtedness and will not constitute a claim against it in the event that, prior to the payment of
the Secured Indebtedness, cash flow is insufficient to pay such obligation;



(aa) if such entity is a corporation, it is required to consider the interests of its
creditors in connection with all corporate actions; and


 


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(bb) except as expressly permitted in the Loan Documents, does not and will not have any of
its obligations guaranteed by any Affiliate.



(228) “Site Assessment” means an environmental engineering report for the Project
prepared by an engineer engaged by the Administrative Agent at Borrower’s expense, and in a manner
satisfactory to the Administrative Agent, based upon an investigation relating to and making
appropriate inquiries concerning the existence of Hazardous Materials on or about the Project, and
the past or present discharge, disposal, release or escape of any such substances, all consistent
with good customary and commercial practice.



(229) “Sole Member” means 1100 West Holdings, LLC, a Delaware limited liability
company.




(230) “Special Advance Lender” has the meaning assigned in Section 15.12(1).



(231) “Special Credits” means special credits for loan origination and closing costs
extended to the purchaser of a Unit in an amount which does not, in the aggregate, exceed the
amount by which the Purchase Price exceeds the Minimum Sales Price for such Unit.



(232) “Standard Unit Finish” means those standard improvements established by Borrower
(with the approval of Administrative Agent), which shall be completed in any Unit prior to or after
closing of the sale of such Unit.




(233) “State” means the State of Florida.



(234) “Survey” means that certain ALTA/ASCM Land Title Survey dated as of June 19,
2006, revised July 28, 2006, prepared by J. Bonfill & Associates, Inc., under Project 04-0468, Job
06-0411.




(235) “Syndication” has the meaning assigned to in Section 12.27(1).



(236) “Take-Out Agreement” means that certain Take-Out Agreement executed, dated and
delivered by CIT, KBC Bank and Eurohypo, as Lenders, on the Amendment Closing Date, as the same may
be modified, amended and/or supplemented from time to time.



(237) “Tax and Insurance Reserve Subaccount” has the meaning assigned in the Cash
Management Agreement.



(238) “Tax and Insurance Reserve Fund” has the meaning assigned in
Section 4.1(1).




(239) “Taxes” has the meaning assigned in Section 9.2.



(240) “Technical Services Agreement” means that certain Technical Services Agreement
between Borrower and Hotel Manager dated as of the date hereof with respect to the delivery of
certain consultation and other technical services relating to the Project.


 


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(241) “Third Extension Notice” has the meaning assigned to such term in Section
2.5(3)(a).



(242) “Third Extension Period” has the meaning assigned to such term in Section
2.5(3).




(243) “Threshold Amount” means $1,000,000.00.




(244) “Type” has the meaning assigned in Section 1.2.



(245) “Unavoidable Delay” means any delay due to strikes, acts of God, fire,
earthquake, floods, explosion, actions of the elements, other accidents or casualty, declared or
undeclared war, riots, mob violence, acts of terrorism, inability to procure or a general shortage
of labor, equipment, facilities, energy, materials or supplies in the open market, failure of
transportation, lockouts, tenant delays, actions of labor unions, condemnation, court orders, laws,
rules, regulations or orders of Governmental Authorities, or other cause beyond the reasonable
control of Borrower; provided that, in each of the foregoing cases, (a) Borrower gives
notice of such delay to the Administrative Agent within two (2) days of occurrence of the event
resulting in such delay and, after the initial notification, promptly after request of the
Administrative Agent, notifies the Administrative Agent of the status of such delay, (b) after
giving effect to the consequences of each such delay, the Loans shall not be Out of Balance at any
time despite such delay, (c) Borrower uses all commercially reasonable efforts to mitigate the
delay caused by such event of Unavoidable Delay; and (d) the Administrative Agent acknowledges that
such delay is due to one of the foregoing causes, which acknowledgment shall not be unreasonably
withheld or delayed. For the purposes hereof, Unavoidable Delays shall not include delays caused
by Borrower’s lack of or inability to procure monies to fulfill Borrower’s commitments and
obligations under this Agreement or the other Loan Documents.



(246) “Unit or Units” means one or more of the 335 hotel condominium units created at
the Project in connection with the Building Conversion.



(247) “Unit Release Schedule” means the schedule attached hereto as Schedule
1(c), containing the Scheduled Release Price for each Unit.




(248) “Unpaid Amount” has the meaning assigned in Section 15.12(2).



(249) “Unsold Units” means the Units which have not been conveyed to third parties by
Borrower with corresponding release from the Lien of the Mortgage.




(250) “Voluntary Proceeding” has the meaning assigned in Section 10.10.



Section 1.2 Types of Loans. Loans hereunder are distinguished by “Type”. The
“Type” of a Loan refers to whether such Loan is a Base Rate Loan or a Eurodollar Loan, each
of which constitutes a Type.


 


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ARTICLE 2




LOAN TERMS





Section 2.1 The Commitments, Loans and Notes.



(1) Outstanding Loans. As of the date hereof, the outstanding principal balance of the Loans
is $84,080,399.11.



(2) Additional Loans. As of the date hereof, the Commitments have been fully funded and no
additional advances shall be made thereunder.




(3) Term Loan. Amounts borrowed hereunder and repaid may not be reborrowed.



(4) Lending Offices. The Loans of each Lender have been made and shall be maintained at such
Lender’s Applicable Lending Office for Loans of such Type.




(5) Intentionally Deleted.




(6) Notes.



(a) Loan Notes. The Loans made by the Lenders are and shall be evidenced by Note A and Note
B, as applicable, made payable to each Lender, as applicable, in a principal amount equal to the
aggregate amount of its advanced Commitment as originally in effect and otherwise duly completed.



(b) Endorsements on Notes. The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan made by each Lender to Borrower, and each payment made on
account of the principal thereof, shall be recorded by such Lender on its books and, prior to any
transfer of the Note held by it, endorsed by such Lender on the schedule attached to such Note or
any continuation thereof; provided that the failure of such Lender to make any such
recordation or endorsement shall not affect the obligations of Borrower to make a payment when due
of any amount owing hereunder or under such Note in respect of such Loans.



(c) Substitution, Exchange and Subdivision of Notes. No Lender shall be entitled to have its
Notes substituted or exchanged for any reason, or subdivided for promissory notes of lesser
denominations, except in connection with a permitted assignment of all or any portion of such
Lender’s Commitment, Loans and Note pursuant to Sections 12.10 and 12.24 (and, if
requested by any Lender, Borrower agrees in accordance with and subject to Sections 12.10
and 12.24, to so substitute or exchange any Notes and enter into note splitter agreements
in connection therewith).



(d) Loss, Theft, Destruction or Mutilation of Notes. In the event of the loss, theft or
destruction of any Note, upon Borrower’s receipt of a reasonably satisfactory indemnification
agreement executed in favor of Borrower by the holder of such Note, or in the event of the
mutilation of any Note, upon the surrender of such mutilated Note by the holder
thereof to Borrower, together with such other reasonable assurances as Borrower may require,
Borrower shall execute and deliver to such holder a new replacement Note, in the form of the
original Note, in lieu of the lost, stolen, destroyed or mutilated Note.



(e) Funding of Loans. Borrower acknowledges and agrees that, as of the Amendment Closing
Date, the Loans have been fully funded by the Lenders.


 


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Section 2.2 Conversions or Continuations of Loans.



(1) Subject to Sections 2.8(4), 2.9(2) and 2.9(3), Borrower shall have
the right to Convert Loans of one Type into Loans of another Type or Continue Loans of one Type as
Loans of the same Type, at any time or from time to time; provided that: (a) Borrower
shall give the Administrative Agent notice of each such Conversion or Continuation as provided in
Section 2.8(5); (b) Eurodollar Loans may be Converted only on the last day of an Interest
Period for such Loans unless Borrower complies with the terms of Section 2.9(5); and
(c) subject to Sections 2.9(1) and 2.9(3), any Conversion or Continuation of Loans
shall be pro rata among the Lenders. Notwithstanding the foregoing, and without limiting the
rights and remedies of the Administrative Agent and the Lenders under Article 11, in the
event that any Event of Default exists, the Administrative Agent may (and at the request of the
Majority Lenders shall) suspend the right of Borrower to Convert any Loan into a Eurodollar Loan,
or to Continue any Loan as a Eurodollar Loan, for so long as such Event of Default exists, in which
event all Loans shall be Converted (on the last day(s) of the respective Interest Periods therefor)
or Continued, as the case may be, as Base Rate Loans. In connection with any such Conversion, a
Lender may (at its sole discretion) transfer a Loan from one Applicable Lending Office to another.



(2) Notwithstanding anything to the contrary contained in this Agreement, at any time that a
Hedge Agreement is in effect, Borrower shall not modify the Interest Period with respect to the
principal amount equal to the notional amount under such Hedge Agreement.




Section 2.3 Interest Rate; Late Charge.



(1) Borrower promises to pay to the Administrative Agent for account of each Lender interest
on the unpaid principal amount of each Loan (which may be the Base Rate Loans and/or Eurodollar
Loans) made by such Lender for the period from and including the date of such Loan to but excluding
the date such Loan shall be paid in full, at the following rates per annum:



(a) during such periods as such Loan is a Base Rate Loan, the Base Rate plus the Applicable
Margin; and



(b) during such periods as such Loan is a Eurodollar Loan, for each Interest Period relating
thereto, the Adjusted LIBOR Rate for such Loan for such Interest Period plus the Applicable Margin.



(2) Accrued interest on each Loan shall be payable (a) monthly in arrears on each Payment Date
and (b) in the case of any Loan, upon the payment or prepayment thereof or the Conversion of such
Loan to a Loan of another Type (but only on the principal amount so
paid, prepaid or Converted), except that interest payable at the Default Rate shall be payable
from time to time on demand.


 


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(3) Notwithstanding anything to the contrary contained herein, after the Maturity Date and
during any period when an Event of Default exists, Borrower shall pay to the Administrative Agent
for the account of each Lender interest at the applicable Default Rate on the outstanding principal
amount of any Loan made by such Lender, any interest payments thereon not paid when due and on any
other amount payable by Borrower hereunder, under the Notes and any other Loan Documents.



(4) Promptly after the determination of any interest rate provided for herein or any change
therein, the Administrative Agent shall give notice thereof to the Lenders to which such interest
is payable and to Borrower, but the failure of the Administrative Agent to provide such notice
shall not affect Borrower’s obligation for the payment of interest on the Loans.



(5) In addition to any sums due under this Section 2.3, Borrower shall pay to the
Administrative Agent for the account of the Lenders a late payment premium in the amount of four
percent (4%) of (a) any payments of principal under the Loans made and payable after the due date
thereof (other than the repayment of the outstanding principal balance on the Maturity Date), and
(b) any payments of interest or other sums under the Loans made more than ten (10) days after the
due date thereof, which late payment premium shall be due with any such late payment or upon demand
by the Administrative Agent. Such late payment charge represents the reasonable estimate of
Borrower and the Lenders of a fair average compensation for the loss that may be sustained by the
Lenders due to the failure of Borrower to make timely payments. Such late charge shall be paid
without prejudice to the right of the Administrative Agent and the Lenders to collect any other
amounts provided herein or in the other Loan Documents to be paid or to exercise any other rights
or remedies under the Loan Documents.



Section 2.4 Terms of Payment. Commencing on the Amendment Closing Date, the Loans shall be
payable as follows:



(1) Interest. Beginning on December 1, 2008, and on the Payment Date of each month
thereafter, Borrower shall pay interest in arrears in accordance with the wire transfer
instructions set forth on Schedule 2.4(1) attached hereto (or such other instructions as
the Administrative Agent may from time to time provide) until all amounts due under the Loan
Documents are paid in full.




(2) Principal Amortization. Borrower shall make each of the Mandatory Principal Payments.



(3) Maturity. On the Maturity Date, Borrower shall pay to the Administrative Agent (on behalf
of the Lenders) all outstanding principal, accrued and unpaid interest, and any other amounts due
under the Loan Documents, and shall pay to Administrative Agent (on behalf of Eurohypo) the Exit
Fee.


 


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(4) Optional Prepayments. Subject to the provisions of Sections 2.4(6) and
2.9(5), Borrower shall have the right to prepay Loans in whole or in part, without premium
or penalty; provided that: (a) Borrower shall give the Administrative Agent notice of each
such prepayment as provided in Section 2.8(5) (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become due and payable hereunder) and
(b) partial prepayments shall be in the minimum aggregate principal amounts specified in
Section 2.8(4). Loans that are prepaid cannot be reborrowed. After giving notice of
prepayment as provided in Section 2.8(5), but prior to the date specified in any such
notice of prepayment, such notice may be revoked by Borrower as long as Borrower pays within one
(1) Business Day after notification from the Administrative Agent any amounts payable to a Lender
pursuant to Section 2.9(5) as a result of any action taken by such Lender in reliance of
such notice of prepayment. In addition, in the event the specified Loans subject to the prepayment
revocation are Eurodollar Loans, such Eurodollar Loans may, at the Administrative Agent’s option,
be converted to Base Rate Loans for the balance of the then current Interest Period.




(5) Mandatory Prepayments.



(a) Promptly upon the sale of any Unit, Borrower shall cause the Scheduled Release Price to be
paid to the Administrative Agent for application to the principal balance of the Loans and the
Borrower’s other obligations under the Loan Documents pursuant to and in accordance with
Section 14.3.



(b) Promptly upon the sale of any Unit, Borrower shall also cause the portions of the Excess
Cash Flow required to be paid to the Administrative Agent pursuant to and in accordance with
Section 14.4 for application by the Administrative Agent to the principal balance of the
Loans and the Borrower’s other obligations under the Loan Documents pursuant to and in accordance
with Section 14.3.



(c) Promptly upon the sale of any Parking Space separate from a sale of a Unit, Borrower shall
cause the Parking Space Release Price to be paid to the Administrative Agent for application to the
principal balance of the Loans and the Borrower’s other obligations under the Loan Documents
pursuant to and in accordance with Section 14.3.



(d) Pursuant to Section 14.6, Borrower shall promptly upon receipt cause all
principal, interest and other amounts received by Borrower with respect to any Seller Financing
Collateral to be deposited into the Cash Management Account for application to Borrower’s
obligations under the Loan Documents.



(e) If a casualty or condemnation shall occur with respect to the Project, Borrower, upon
Borrower’s or the Administrative Agent’s receipt of the applicable insurance proceeds or
condemnation award, shall prepay the Loans, if required by the provisions of Article 3, on
the dates and in the amounts specified therein. Nothing in this Section 2.4(5) shall be
deemed to limit any obligation of Borrower under the Mortgage or any other Security Document,
including any obligation to remit to a collateral or similar account maintained by the
Administrative Agent pursuant to the Mortgage or any of the other Security Documents, the proceeds
of insurance, condemnation award or other compensation received in respect of any casualty or
condemnation.



(f) Payments made pursuant to this Section 2.4(5) shall be made without premium, but
in all cases subject to the provisions of Sections 2.4(6), 2.6 and 2.9(5);


 


34









 





provided, however, that so long as no Event of Default exists, the
Administrative Agent shall hold and not disburse to the Lenders any payment received pursuant to
clauses 5(a), 5(b), 5(c) and 5(d) above until the end of the
Interest Period in which such payment is received, at which time the Administrative Agent shall
disburse such payment to the Lenders in accordance with the provisions of this Agreement; and
provided, further, any payments so held by the Administrative Agent shall continue
to bear interest in accordance with the terms of this Agreement and the other Loan Documents, and
if an Event of Default exists, the Administrative Agent may apply such payments upon receipt in any
order or manner as the Administrative Agent shall determine (subject to the terms of any co-lender
agreement among the Lenders).



(6) Interest and Other Charges on Prepayment. If the Loans are prepaid, in whole or in part,
pursuant to Section 2.4(4) or 2.4(5), each such prepayment shall be made on the
prepayment date specified in the notice to the Administrative Agent pursuant to
Section 2.8(5), and (in every case) together with (a) the accrued and unpaid interest on
the principal amount prepaid, (b) the Exit Fee, (c) any amounts payable to a Lender pursuant to
Section 2.9(5) as a result of such prepayment while an Adjusted LIBOR Rate is in effect and
(d) any early termination amounts due under any Hedge Agreement; provided, however,
that any such prepayment shall be applied first, to the prepayment of any portions of the
outstanding principal amount that are Base Rate Loans and, second, to the prepayment of any
portions of the outstanding principal amount that are Eurodollar Loans applying such sums first to
Eurodollar Loans of the shortest maturity so as to minimize breakage costs; provided
further, however, that if an Event of Default exists, the Administrative Agent may
distribute such payment to the Lenders for application in such manner the Majority Lenders, subject
to Section 2.8(2), may determine to be appropriate.




(7) Application of Payments.



(a) Except as provided in Section 2.4(7)(b), all payments received by the
Administrative Agent under the Loan Documents shall be applied: first, to any fees and expenses due
to the Administrative Agent and the Lenders under the Loan Documents; second, to any Default Rate
interest or late charges; third, to accrued and unpaid interest on the Loans; fourth, to the
outstanding principal balance of Note A in accordance with Section 2.4(6), until Note A is
paid in full; and fifth, to the outstanding principal balance of Note B in accordance with
Section 2.4(6), until Note B is paid in full; and sixth, to any other amounts due under the
Loan Documents.



(b) Notwithstanding the provisions of Section 2.4(7)(a), all payments received by the
Administrative Agent with respect to Scheduled Release Prices, Excess Cash Flow and Parking Space
Release Prices shall be applied: first, to any actual, out-of-pocketf ees and expenses incurred by
and due to the Administrative Agent and the Lenders under the Loan Documents; second, to the
outstanding principal balance of Note A in accordance with Section 2.4(6), until Note A is
paid in full; third, to the outstanding principal balance of Note B in accordance with
Section 2.4(6), until Note B is paid in full; fourth, to accrued and unpaid interest on the
Loans; fifth, to any Default Rate interest or late charges; and sixth, to any other amounts due
under the Loan Documents.



(c) Notwithstanding the provisions of Sections 2.4(7)(a) and 2.4(7)(b), if an
Event of Default exists the Administrative Agent may apply any payments received by the
Administrative Agent under the Loan Documents in any order or manner as the Administrative Agent
shall determine (subject to the terms of any co-lender agreement among the Lenders).


 


35









 






Section 2.5 Extension of Maturity Date.



(1) First Extension of Maturity Date. Borrower may, at its option, extend the term of the
then outstanding principal amount for a period commencing on the Original Maturity Date and ending
on August 1, 2010; provided, however, if such day is not a Business Day, such
period shall be deemed to end the immediately preceding Business Day (the applicable period being,
the “First Extension Period”), subject to the satisfaction of the following conditions:



(a) Borrower shall notify (the “First Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days prior to the Original
Maturity Date;



(b) No Potential Default (of which Borrower has previously received notice) or Event of
Default exists as of the giving of the First Extension Notice and/or as of the Original Maturity
Date;



(c) Without limiting the provisions of Section 14.1(1), Construction Completion shall
have occurred;



(d) Eurohypo shall have paid the Initial Take-Out Amount to the Note A Holders pursuant to and
in accordance with the Take-Out Agreement;



(e) Borrower shall have either (i) paid to Eurohypo one-half of the Initial Take-Out Amount
paid by Eurohypo to the Note A Holders pursuant to the Take-Out Agreement, which sum shall be
applied to the amounts owing under Note A in accordance with Section 2.4(7)(a), or (ii)
caused a Qualified Substitute Lender to acquire from Eurohypo, in accordance with Section
12.24(2), one-half of the Initial Take-Out Interest acquired by Eurohypo from the Note A
Holders for an amount equal to one-half of the Initial Take-Out Amount paid by Eurohypo to the Note
A Holders pursuant to the Take-Out Agreement;



(f) If the Hedge Agreement in effect at the time of Borrower’s giving of the First Extension
Notice is scheduled to mature or expire prior to the end of the First Extension Period, Borrower
shall have obtained and delivered to Administrative Agent not later than ten (10) Business Days
prior to the first day of the First Extension Period one or more replacement Hedge Agreements which
meet the requirements of Section 9.15 which shall be effective on or before the date the
then effective Hedge Agreement is scheduled to mature or expire and shall have a maturity date not
earlier than the end of the First Extension Period;



(g) Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs
and expenses incurred by Administrative Agent and the Lenders in connection with the proposed
extension (pre- and post-closing), including reasonable legal fees; all such costs and expenses
shall be due and payable within ten (10) days of demand, and any
failure to pay such amounts shall constitute a default under this Agreement and the Loan
Documents; and


 


36









 





(h) Not later than the Original Maturity Date, (i) the extension shall have been documented to
the Lenders’ reasonable satisfaction and consented to by Borrower, Administrative Agent and all the
Lenders, including the execution and delivery by the Guarantor of reaffirmations of its obligations
under the Guaranty and (ii) if requested by the Administrative Agent, the Administrative Agent
shall have been provided with an updated title report and judgment and lien searches, together with
any title endorsements reasonably required by Administrative Agent.



Any such extension shall be otherwise subject to all of the other terms and provisions of this
Agreement and the other Loan Documents.



(2) Second Extension of Maturity Date. In the event Borrower has previously extended the
Maturity Date in accordance with Section 2.5(1), Borrower may, at its option, extend the
term of the then outstanding principal amount of the Loans for a period commencing on the last day
of the First Extension Period and ending on July 31, 2011; provided, however, if
such day is not a Business Day, such period shall be deemed to end the immediately preceding
Business Day (the applicable period being, the “Second Extension Period”), subject to the
satisfaction of the following conditions:



(a) Borrower shall notify (the “Second Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days prior to end of the
First Extension Period;



(b) No Potential Default (of which Borrower has previously received notice) or Event of
Default exists as of the giving of the Second Extension Notice and/or as of last day of the First
Extension Period;



(c) Not later than the last day of the First Extension Period, Eurohypo shall have paid the
Second Take-Out Amount to the Note A Holders pursuant to and in accordance with the Take-Out
Agreement;



(d) Not later than the last day of the First Extension Period, Borrower shall have either (i)
paid to Eurohypo one-half of the Second Take-Out Amount, which shall be applied to the amounts
owing under Note A in accordance with Section 2.4(7)(a), or (ii) caused a Qualified
Substitute Lender to acquire from Eurohypo, in accordance with Section 12.24(2), one-half
of the Loans evidenced by Note A which are acquired by Eurohypo pursuant to the Take-Out Agreement,
for an amount equal to one-half of the Second Take-Out Amount paid by Eurohypo to the Note A
Holders pursuant to the Take-Out Agreement;



(e) If the Hedge Agreement in effect at the time of Borrower’s giving of the Second Extension
Notice is scheduled to mature or expire prior to the end of the Second Extension Period, Borrower
shall have obtained and delivered to Administrative Agent not later than ten (10) Business Days
prior to the first day of the Second Extension Period one or more replacement Hedge Agreements
which meet the requirements of Section 9.15 which shall be
effective on or before the date the then effective Hedge Agreement is scheduled to mature or
expire and shall have a maturity date not earlier than the end of the Second Extension Period;


 


37









 





(f) Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs
and expenses incurred by Administrative Agent and the Lenders in connection with the proposed
extension (pre- and post-closing), including reasonable legal fees; all such costs and expenses
shall be due and payable within ten (10) days of demand, and any failure to pay such amounts shall
constitute a default under this Agreement and the Loan Documents; and



(g) Not later than the last day of the First Extension Period, (i) the extension shall have
been documented to the Lenders’ reasonable satisfaction and consented to by Borrower,
Administrative Agent and all the Lenders, including the execution and delivery by the Guarantor of
reaffirmations of its obligations under the Guaranty and (ii) if requested by the Administrative
Agent, the Administrative Agent shall have been provided with an updated title report and judgment
and lien searches, together with any title endorsements reasonably required by Administrative
Agent.



Any such extension shall be otherwise subject to all of the other terms and provisions of this
Agreement and the other Loan Documents.



(3) Third Extension of Maturity Date. Borrower may, at its option, extend the term of the
then outstanding principal amount for a period commencing on the last day of the Second Extension
Period and ending on July 30, 2012; provided, however, if such day is not a
Business Day, such period shall be deemed to end the immediately preceding Business Day (the
applicable period being, the “Third Extension Period”), subject to the satisfaction of the
following conditions:



(a) Borrower shall notify (the “Third Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days prior to the end of the
Second Extension Period;



(b) No Potential Default (of which Borrower has previously received notice) or Event of
Default exists as of the giving of the Third Extension Notice and/or as of the last day of the
Second Extension Period;



(c) Administrative Agent shall have obtained a new Appraisal dated not more than sixty (60)
days prior to the last day of the Second Extension Period (which the Administrative Agent hereby
agrees to timely obtain), such Appraisal to be at Borrower’s expense;



(d) The Debt Service Coverage Ratio based on the outstanding balance of the Loans for the most
recently ended calendar quarter prior to the end of the Second Extension Period, shall be equal to
or greater than 1.10:1.00; provided, however, in the event that the required Debt
Service Coverage Ratio is not met, then Borrower may, in order to satisfy the condition in this
clause, pay down the outstanding principal balance of the Loans in an amount such that the required
Debt Service Coverage Ratio is achieved (in accordance with Section 2.4(4));


 


38









 





(e) If the Hedge Agreement in effect at the time of Borrower’s giving of the Third Extension
Notice is scheduled to mature or expire prior to the end of the Second Extension Period, Borrower
shall have obtained and delivered to Administrative Agent not later than ten (10) Business Days
prior to the first day of the Third Extension Period one or more replacement Hedge Agreements which
meet the requirements of Section 9.15 which shall be effective on or before the date the
then effective Hedge Agreement is scheduled to mature or expire and shall have a maturity date not
earlier than the end of the Third Extension Period;



(f) Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs
and expenses incurred by Administrative Agent and the Lenders in connection with the proposed
extension (pre- and post-closing), including reasonable legal fees; all such costs and expenses
shall be due and payable within ten (10) days of demand, and any failure to pay such amounts shall
constitute a default under this Agreement and the Loan Documents;



(g) Not later than the last day of the Second Extension Period, (i) the extension shall have
been documented to the Lenders’ reasonable satisfaction and consented to by Borrower,
Administrative Agent and all the Lenders, including the execution and delivery by the Guarantor of
reaffirmations of its obligations under the Guaranty and (ii) if requested by the Administrative
Agent, the Administrative Agent shall have been provided with an updated title report and judgment
and lien searches, together with any title endorsements reasonably required by Administrative
Agent; and



(h) Borrower shall pay to Administrative Agent (for the benefit of the Lenders in accordance
with their proportionate shares) on the last day of the Second Extension Period, a non-refundable
extension fee equal to 0.25% of the outstanding principal balance of the Loans.



Any such extension shall be otherwise subject to all of the other terms and provisions of this
Agreement and the other Loan Documents.



(4) Fourth Extension of Maturity Date. Borrower may, at its option, extend the term of the
then outstanding principal amount for a period commencing on the last day of the Third Extension
Period and ending on July 29, 2013; provided, however, if such day is not a
Business Day, such period shall be deemed to end the immediately preceding Business Day (the
applicable period being, the “Fourth Extension Period”), subject to the satisfaction of the
following conditions:



(a) Borrower shall notify (the “Fourth Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days prior to the end of the
Third Extension Period;



(b) No Potential Default (of which Borrower has previously received notice) or Event of
Default exists as of the giving of the Fourth Extension Notice and/or as of the last day of the
Third Extension Period;



(c) The Debt Service Coverage Ratio based on the outstanding balance of the Loans for the most
recently ended calendar quarter prior to en d of the Third Extension
Period, shall be equal to or greater than 1.35:1.00; provided, however, in the
event that the required Debt Service Coverage Ratio is not met, then Borrower may, in order to
satisfy the condition in this clause, pay down the outstanding principal balance of the Loans in an
amount such that the required Debt Service Coverage Ratio is achieved (in accordance with Section
2.4(4));


 


39









 





(d) The ratio of (i) the total outstanding principal balance of the Loans to (ii) the value of
the Project does not exceed eighty percent (80%) based on the “as is” value established by a new
Appraisal obtained by Administrative Agent not more than sixty (60) days prior to end of the Third
Extension Period, such Appraisal to be at Borrower’s expense and satisfactory to Administrative
Agent in all respects; provided, however, in the event that the required
loan-to-value ratio is not met, then Borrower may, in order to satisfy the condition in this
clause, pay down the outstanding principal balance of the Loans in an amount such that the required
loan-to-value ratio is achieved (in accordance with Section 2.4(4));



(e) If the Hedge Agreement in effect at the time of Borrower’s giving of the Fourth Extension
Notice is scheduled to mature or expire prior to the end of the Third Extension Period, Borrower
shall have obtained and delivered to Administrative Agent not later than ten (10) Business Days
prior to the first day of the Fourth Extension Period one or more replacement Hedge Agreements
which meet the requirements of Section 9.15 which shall be effective on or before the date
the then effective Hedge Agreement is scheduled to mature or expire and shall have a maturity date
not earlier than the end of the Fourth Extension Period;



(f) Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs
and expenses incurred by Administrative Agent and the Lenders in connection with the proposed
extension (pre- and post-closing), including reasonable legal fees; all such costs and expenses
shall be due and payable within ten (10) days of demand, and any failure to pay such amounts shall
constitute a default under this Agreement and the Loan Documents;



(g) Not later than the last day of the Third Extension Period, (i) the extension shall have
been documented to the Lenders’ reasonable satisfaction and consented to by Borrower,
Administrative Agent and all the Lenders, including the execution and delivery by the Guarantor of
reaffirmations of its obligations under the Guaranty and (ii) if requested by the Administrative
Agent, the Administrative Agent shall have been provided with an updated title report and judgment
and lien searches, together with any title endorsements reasonably required by Administrative
Agent; and



(h) Borrower shall pay to Administrative Agent (for the benefit of the Lenders in accordance
with their proportionate shares) on the last day of the Third Extension Period, a non-refundable
extension fee equal to 0.25% of the outstanding principal balance of the Loans.



Any such extension shall be otherwise subject to all of the other terms and provisions of this
Agreement and the other Loan Documents.


 


40









 





(5) Fifth Extension of Maturity Date. Borrower may, at its option, extend the term of the
then outstanding principal amount for a period commencing on the last day of the Fourth Extension
Period and ending on October 31, 2013; provided, however, if such day is not a
Business Day, such period shall be deemed to end the immediately preceding Business Day (the
applicable period being, the “Fifth Extension Period”), subject to the satisfaction of the
following conditions:



(a) Borrower shall notify (the “Fifth Extension Notice”) Administrative Agent of
Borrower’s exercise of such option between thirty (30) and ninety (90) days prior to the end of the
Fourth Extension Period;



(b) No Potential Default (of which Borrower has previously received notice) or Event of
Default exists as of the giving of the Fifth Extension Notice and/or as of last day of the Fourth
Extension Period;



(c) If the Hedge Agreement in effect at the time of Borrower’s giving of the Fifth Extension
Notice is scheduled to mature or expire prior to the end of the Fourth Extension Period, Borrower
shall have obtained and delivered to Administrative Agent not later than ten (10) Business Days
prior to the first day of the Fifth Extension Period one or more replacement Hedge Agreements which
meet the requirements of Section 9.15 which shall be effective on or before the date the
then effective Hedge Agreement is scheduled to mature or expire and shall have a maturity date not
earlier than the end of the Fifth Extension Period;



(d) Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs
and expenses incurred by Administrative Agent and the Lenders in connection with the proposed
extension (pre- and post-closing), including reasonable legal fees; all such costs and expenses
shall be due and payable within ten (10) days of demand, and any failure to pay such amounts shall
constitute a default under this Agreement and the Loan Documents; and



(e) Not later than the last day of the Fourth Extension Period, (i) the extension shall have
been documented to the Lenders’ reasonable satisfaction and consented to by Borrower,
Administrative Agent and all the Lenders, including the execution and delivery by the Guarantor of
reaffirmations of its obligations under the Guaranty and (ii) if requested by the Administrative
Agent, the Administrative Agent shall have been provided with an updated title report and judgment
and lien searches, together with any title endorsements reasonably required by Administrative
Agent.



Any such extension shall be otherwise subject to all of the other terms and provisions of this
Agreement and the other Loan Documents.



Section 2.6 Exit Fee. Upon the earlier to occur of (a) the date when full prepayment of the
Loan occurs, (b) the Maturity Date or (c) the date on which the Loan has been accelerated following
an Event of Default, Borrower shall pay to the Administrative Agent for the benefit of Eurohypo the
Exit Fee.


 


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Section 2.7 Cash Management.



(1) Borrower shall and shall cause Hotel Manager to deposit all Operating Revenue into the
Clearing Account in accordance with the Clearing Account Agreement and the Cash Management
Agreement. Disbursements from the Clearing Account, the Cash Management Account and the other
“Accounts” created pursuant to the Cash Management Agreement will be made in accordance with the
terms and conditions of this Agreement and the Cash Management Agreement. The Administrative Agent
shall have sole dominion and control over the Clearing Account, the Cash Management Account and the
other “Accounts” referred to in the Cash Management Agreement, and, without limiting the provisions
of the Cash Management Agreement whereby the Administrative Agent agrees to make disbursements
therefrom, Borrower shall have no rights to make withdrawals therefrom.



(2) The insufficiency of funds on deposit in the Clearing Account or the Cash Management
Account shall not absolve Borrower of the obligation to make any payments as and when due pursuant
to this Agreement and the other Loan Documents, and such obligations shall be separate and
independent, and not conditioned on any event or circumstance whatsoever.




Section 2.8 Payments; Pro Rata Treatment; Etc.




(1) Payments Generally.



(a) Payments by Borrower. Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by Borrower under this Agreement and the Notes,
and, except to the extent otherwise provided therein, all payments to be made by Borrower under any
other Loan Document, shall be made in Dollars, in immediately available funds, without deduction,
setoff or counterclaim, to the Administrative Agent at an account designated by the Administrative
Agent by notice to Borrower, not later than 12:00 noon, New York City time, on the date on which
such payment shall become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).



(b) Application of Payments. Subject to the provisions of Sections 2.4(7) and
2.8(2), Borrower shall, at the time of making each payment under this Agreement or any Note
for the account of any Lender, specify to the Administrative Agent (which shall so notify the
intended recipient(s) thereof) the Types of Loans or other amounts payable by Borrower hereunder to
which such payment is to be applied (and in the event that Borrower fails to so specify, or if an
Event of Default exists, the Administrative Agent may distribute such payment to the Lenders for
application in such manner as it may determine to be appropriate, subject to Section 2.8(2)
and any other agreement among the Administrative Agent and the Lenders with respect to such
application).



(c) Forwarding of Payments by Administrative Agent. Except as otherwise agreed by the
Administrative Agent and the Lenders, each payment received by the Administrative Agent under this
Agreement or any Note for account of any Lender shall be paid by the Administrative Agent promptly
to such Lender, in immediately available funds, for account of such Lender’s Applicable Lending
Office for the Loan or other obligation in respect of which such payment is made.


(d) Extensions to Next Business Day. If the due date of any payment under this Agreement or
any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to
the next succeeding Business Day, and interest shall be payable for any principal so extended for
the period of such extension.



 


42









 






(2) Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each advance of
a Loan from the Lenders under Section 2.1(1) shall be made from the Lenders, pro rata
according to the amounts of their respective Commitments; (b) except as otherwise provided in
Section 2.9(4), Loans shall be allocated pro rata among the Lenders according to the
amounts of their respective Commitments (in the case of the making of Loans) or their respective
Loans (in the case of Conversions or Continuations of Loans); (c) each payment or prepayment of
principal of Loans by Borrower shall be made for account of the Lenders pro rata in accordance with
the respective unpaid principal amounts of the Loans held by them; and (d) each payment of interest
on Loans by Borrower shall be made for account of the Lenders pro rata in accordance with the
amounts of interest on such Loans then due and payable to the respective Lenders.



(3) Computations. Interest on all Loans shall be computed on the basis of a year of 360 days
and actual days elapsed (including the first day but excluding the last day) occurring in the
period for which payable.



(4) Minimum Amounts. Except for (a) mandatory and other prepayments made pursuant to
Sections 2.4(2), 2.4(5), and 14.5; (b) Conversions or prepayments made
pursuant to Section 2.9(4), each Conversion and Continuation (collectively, “Loan
Transactions”) of Loans shall be in an aggregate amount at least equal to $1,000,000 (Loan
Transactions of or into Loans of different Types or Interest Periods at the same time hereunder
shall be deemed separate Loan Transactions for purposes of the foregoing, one for each Type or
Interest Period); provided that if any Loans or borrowings would otherwise be in a lesser
principal amount for any period, such Loans shall be Base Rate Loans during such period.
Notwithstanding the foregoing, the minimum amount of $1,000,000 shall not apply to Conversions of
lesser amounts into a Type of Loan that has (or will have upon such Conversion) an aggregate
principal amount exceeding such minimum amount and a duration of at least one Interest Period. The
initial borrowing hereunder shall be an aggregate amount at least equal to $500,000.



(5) Certain Notices. Notices by Borrower to the Administrative Agent regarding Loan
Transactions and the selection of Types of Loans and/or of the duration of Interest Periods shall
be irrevocable and shall be effective only if received by the Administrative Agent not later than
12:00 noon, New York City time, on the number of Business Days prior to the date of the proposed
Loan Transaction or the first day of such Interest Period specified below:



	 	 	 	 	 
	 	 	Number of Business	 
	Notice	 	Days Prior	 
	Optional Prepayment
	 	 	3	 
	Conversions into, Continuations as, or borrowings in
Base Rate Loans
	 	 	3	 
	Conversions into, Continuations as, borrowings in or
changes in duration of Interest Period for, Eurodollar
Loans (subject to Section 2.4(6))
	 	 	3	 





 


43









 




Each such notice of a Loan Transaction shall specify the amount (subject to
Section 2.8(4)), Type, and Interest Period of such proposed Loan Transaction, and the date
(which shall be a Business Day) of such proposed Loan Transaction. Notices for Conversions and
Continuations shall be in the form of Exhibit E. Each such notice specifying the duration
of an Interest Period shall specify the portion of the Loans to which such Interest Period is to
relate. The Administrative Agent shall promptly notify the Lenders of the contents of each such
notice. If Borrower fails to select (i) the Type of Loan or (ii) the duration of any Interest
Period for any Eurodollar Loan within the time period (i.e., three (3) Business Days prior to the
first day of the next applicable Interest Period) and otherwise as provided in this
Section 2.8(5), such Loan (if outstanding as an Eurodollar Loan) will be automatically
Continued as an Eurodollar Loan with an Interest Period of one (1) month on the last day of the
current Interest Period for such Loan (based on a Libor Rate determined two (2) Business Days prior
to the first day of the next Interest Period) or, if outstanding as a Base Rate Loan, will remain
as a Base Rate Loan.




(6) Non Receipt of Funds by the Administrative Agent. Unless the Administrative Agent shall
have been notified by Borrower prior to the date on which Borrower is to make a payment to the
Administrative Agent for account of any Lender hereunder (such payment being herein called the
“Required Payment”), which notice shall be effective upon receipt, that Borrower does not
intend to make the Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such assumption (but shall
not be required to), make the amount thereof available to the intended recipient(s) on such date;
and, if Borrower has not in fact made the Required Payment to the Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the period commencing on the
date (the “Advance Date”) such amount was so made available by the Administrative Agent
until the date the Administrative Agent recovers such amount at a rate per annum equal to the
applicable interest rate due hereunder with respect to payments returned by Borrower to the
Administrative Agent and, if such recipient(s) shall fail promptly to make such payment, the
Administrative Agent shall be entitled to recover such amount, on demand, from Borrower, together
with interest as aforesaid; provided that if neither the recipient(s) nor Borrower shall
return the Required Payment to the Administrative Agent within three (3) Business Days of the
Advance Date, then, retroactively to the Advance Date, Borrower and the recipient(s) shall each be
obligated to pay interest on the Required Payment as follows: Borrower and the recipient(s) shall
each be obligated retroactively to the Advance Date to pay interest in respect of the Required
Payment at the Default Rate (without duplication of the obligation of Borrower under
Section 2.3 to pay interest on the Required Payment at the Default Rate), it being
understood that the return by the recipient(s) of the Required Payment to the Administrative Agent
shall not limit such obligation of Borrower under Section 2.3 to pay interest at the
Default Rate in respect of the Required Payment.


 


44









 






(7) Sharing of Payments, Etc.



(a) Right of Set off. Borrower agrees that, in addition to (and without limitation of) any
right of set off, banker’s lien or counterclaim a Lender may otherwise have, (subject, as among the
Lenders, to Section 12.26), each Lender shall be entitled, at its option (to the fullest
extent permitted by law), to set off and apply any deposit (general or special, time or demand,
provisional or final), or other indebtedness, held by it for the credit or account of Borrower at
any of its offices, in Dollars or in any other currency, against any principal of or interest on
any of such Lender’s Loans or any other amount payable to such Lender hereunder, that is not paid
when due (regardless of whether such deposit or other indebtedness is then due to such Borrower),
in which case it shall promptly notify Borrower and the Administrative Agent thereof,
provided that such Lender’s failure to give such notice shall not affect the validity
thereof.



(b) Sharing. If any Lender shall obtain from Borrower payment of any principal of or interest
on any Loan owing to it or payment of any other amount under this Agreement or any other Loan
Document through the exercise (subject, as among the Lenders, to Section 12.26) of any
right of set off, banker’s lien or counterclaim or similar right or otherwise (other than from the
Administrative Agent as provided herein), and, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on the Loans or such other amounts
then due hereunder or thereunder by Borrower to such Lender than the percentage received by any
other Lender, it shall promptly purchase from such other Lenders participations in (or, if and to
the extent specified by such Lender, direct interests in) the Loans or such other amounts,
respectively, owing to such other Lenders (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be equitable, to the end that
all the Lenders shall share the benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with
the unpaid principal of and/or interest on the Loans or such other amounts, respectively, owing to
each of the Lenders. To such end all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.



(c) Consent by Borrower. Borrower agrees that any Lender so purchasing such a participation
(or direct interest) may exercise (subject, as among the Lenders, to Section 12.26) all
rights of set off, banker’s lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.



(d) Rights of Lenders; Bankruptcy. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or obligation of
Borrower. If, under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a set off to which this Section 2.8(7) applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this Section 2.8(7) to
share in the benefits of any recovery on such secured claim.


 


45









 






Section 2.9 Yield Protection; Etc.




(1) Additional Costs.



(a) Costs of Making or Maintaining Eurodollar Loans. Borrower shall pay directly to each
Lender from time to time such amounts as such Lender may reasonably determine to be necessary to
compensate such Lender for any costs that such Lender determines are attributable to its making or
maintaining of any Eurodollar Loans or its obligation to make any Eurodollar Loans hereunder, or
any reduction in any amount receivable by such Lender hereunder in respect of any of such
Eurodollar Loans or such obligation (such increases in costs and reductions in amounts receivable
being herein called “Additional Costs”), resulting from any Regulatory Change that:



(i) shall subject any Lender (or its Applicable Lending Office for any of such Loans) to any
tax, duty or other charge in respect of such Loans or its Note or changes the basis of taxation of
any amounts payable to such Lender under this Agreement or its Note in respect of any of such Loans
(excluding changes in the rate of tax on the overall net income of such Lender or of such
Applicable Lending Office by the jurisdiction in which such Lender has its principal office or such
Applicable Lending Office); or



(ii) imposes or modifies any reserve, special deposit or similar requirements (other than the
Reserve Requirement used in the determination of the Adjusted Libor Rate for any Interest Period
for such Loan) relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender (including, without limitation, any of such Loans or any deposits
referred to in the definition of “Libor Rate”), or any commitment of such Lender (including,
without limitation, the Commitment of such Lender hereunder); or



(iii) imposes any other condition affecting this Agreement or its Note (or any of such
extensions of credit or liabilities) or its Commitment.



If any Lender requests compensation from Borrower under this paragraph (a), Borrower may, by notice
to such Lender (with a copy to the Administrative Agent), suspend the obligation of such Lender
thereafter to make or Continue Eurodollar Loans, or to Convert Loans into Eurodollar Loans, until
the Regulatory Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 2.9(4) shall be applicable), provided that such suspension
shall not affect the right of such Lender to receive the compensation so requested.


 


46









 





(b) Costs Attributable to Regulatory Change or Risk-Based Capital Guidelines. Without
limiting the effect of the foregoing provisions of this Section 2.9(1) (but without
duplication), Borrower shall pay directly to each Lender from time to time on request such amounts
as such Lender may reasonably determine to be necessary to compensate such Lender (or, without
duplication, the bank holding company of which such Lender is a subsidiary) for any costs that it
reasonably determines are attributable to the maintenance by such Lender (or any Applicable Lending
Office or such bank holding company), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) of
any court or governmental or monetary authority (i) following any Regulatory Change or
(ii) implementing any risk based capital guideline or other requirement (whether or not having the
force of law and whether or not the failure to comply therewith would be unlawful) hereafter issued
by any government or governmental or supervisory authority (excluding Basel II and any other law or
regulation which implements Basel II, in each case in the form existing on the date of this
Agreement), of capital in respect of its Commitment or Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or equity of such
Lender (or any Applicable Lending Office or such bank holding company) to a level below that which
such Lender (or any Applicable Lending Office or such bank holding company) could have achieved but
for such law, regulation, interpretation, directive or request.



(c) Notification and Certification. Each Lender shall notify Borrower of any event occurring
after the date hereof entitling such Lender to compensation under paragraph (a) or (b) of this
Section 2.9(1) as promptly as practicable, but in any event within forty-five (45) days,
after such Lender obtains actual knowledge thereof; provided that (i) if any Lender fails
to give such notice within forty-five (45) days after it obtains actual knowledge of such an event,
such Lender shall, with respect to compensation payable pursuant to this Section 2.9(1) in
respect of any costs resulting from such event, only be entitled to payment under this
Section 2.9(1) for costs incurred from and after the date thirty (30) days prior to the
date that such Lender does give such notice and (ii) each Lender will designate a different
Applicable Lending Office for the Loans of such Lender affected by such event if such designation
will avoid the need for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Lender, be disadvantageous to such Lender, except that such Lender shall have no
obligation to designate an Applicable Lending Office located in the United States of America. Each
Lender will furnish to Borrower a certificate setting forth the basis and amount of each request by
such Lender for compensation under paragraph (a) or (b) of this Section 2.9(1).
Determinations and allocations by any Lender for purposes of this Section 2.9(1) of the
effect of any Regulatory Change pursuant to paragraph (a) of this Section 2.9(1), or of the
effect of capital maintained pursuant to paragraph (b) of this Section 2.9(1), on its costs
or rate of return of maintaining Loans or its obligation to make Loans, or on amounts receivable by
it in respect of Loans, and of the amounts required to compensate such Lender under this
Section 2.9(1), shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.



Borrower shall be obligated to pay compensation to a Lender pursuant to subsections (a) and (b) of
this Section 2.9(1) only if such Lender is imposing similar compensation requirements on borrowers
under commercial loans of the same type and quality as the Loan and which are similarly affected by
the Regulatory Change or other guidelines or requirements for which such Lender is seeking
compensation from Borrower pursuant to this Section 2.9(1).



 


47









 




(2) Limitation on Types of Loans. Anything herein to the contrary notwithstanding, if, on or
prior to the determination of the LIBOR Rate for any Interest Period for any Eurodollar Loan:



(a) the Administrative Agent determines, which determination shall be conclusive, that
quotations of interest rates for the relevant deposits referred to in the definition
of LIBOR Rate are not being provided in the relevant amounts or for the relevant maturities
for purposes of determining rates of interest for Eurodollar Loans as provided herein; or



(b) any Lender determines, which determination shall be conclusive, and notify the
Administrative Agent that the relevant rates of interest referred to in the definition of LIBOR
Rate upon the basis of which the rate of interest for Eurodollar Loans for such Interest Period is
to be determined are not likely adequately to cover the cost to such Lenders of making or
maintaining Eurodollar Loans for such Interest Period;



then the Administrative Agent shall give Borrower and each Lender prompt notice thereof and, so
long as such condition remains in effect, the Lenders shall be under no obligation to make
additional Eurodollar Loans, to Continue Eurodollar Loans or to Convert Loans of any other Type
into Eurodollar Loans, and Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, either prepay such Loans or such Loans shall be
automatically Converted into Base Rate Loans.



(3) Illegality. Notwithstanding any other provision of this Agreement, in the event that it
becomes unlawful for any Lender or its Applicable Lending Office to honor its obligation to make or
maintain Eurodollar Loans hereunder (and, in the sole opinion of such Lender, the designation of a
different Applicable Lending Office would either not avoid such unlawfulness or would be
disadvantageous to such Lender), then such Lender shall promptly notify Borrower thereof (with a
copy to the Administrative Agent) and such Lender’s obligation to make or Continue, or to Convert
Loans of any other Type into, Eurodollar Loans shall be suspended until such time as such Lender
may again make and maintain Eurodollar Loans (in which case the provisions of
Section 2.9(4) shall be applicable).



(4) Treatment of Affected Loans. If the obligation of any Lender to make Eurodollar Loans or
to Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant to
Section 2.9(1) or 2.9(3), such Lender’s Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s) for Loans (or, in the
case of a Conversion resulting from a circumstance described in Section 2.9(3), on such
earlier date as such Lender may specify to Borrower with a copy to the Administrative Agent) and,
unless and until such Lender gives notice as provided below that the circumstances specified in
Section 2.9(1) or 2.9(3) that gave rise to such Conversion no longer exist:



(a) to the extent that such Lender’s Loans have been so Converted, all payments and
prepayments of principal that would otherwise be applied to such Lender’s Loans shall be applied
instead to its Base Rate Loans; and



(b) all Loans that would otherwise be made or Continued by such Lender as Eurodollar Loans
shall be made or Continued instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate Loans.


 


48









 





If such Lender gives notice to Borrower with a copy to the Administrative Agent that the
circumstances specified in Section 2.9(1) or 2.9(3) that gave rise to the
Conversion of such Lender’s Loans pursuant to this Section 2.9(4) no longer exist (which
such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender’s Base Rate Loans shall be automatically Converted, on the
first day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar Loans, to
the extent necessary so that, after giving effect thereto, all Base Rate Loans and Eurodollar Loans
are allocated among the Lenders ratably (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.



(5) Compensation. Borrower shall pay to the Administrative Agent for account of each Lender,
upon the request of such Lender through the Administrative Agent, such amount or amounts as shall
be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or
expense that such Lender determines is attributable to:



(a) any payment, prepayment or Conversion of a Eurodollar Loan made by such Lender for any
reason (including, without limitation, the acceleration of the Loans pursuant to the Administrative
Agent’s or the Lenders’ rights referred to in Article 11) on a date other than the last day
of the Interest Period for such Loan; or



(b) any failure by Borrower for any reason to borrow a Eurodollar Loan from such Lender on the
date for such borrowing specified in the relevant notice of borrowing given to the Administrative
Agent in accordance with the terms of this Agreement.



Without limiting the effect of the preceding sentence, such compensation shall include an amount
equal to the excess, if any, of (i) the amount of interest that otherwise would have accrued on the
principal amount so paid, prepaid, Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan
that would have commenced on the date specified for such borrowing) at the applicable rate of
interest for such Loan provided for herein over (ii) the amount of interest that otherwise would
have accrued on such principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar deposits of leading
banks in amounts comparable to such principal amount and with maturities comparable to such period
(as reasonably determined by such Lender), or if such Lender shall cease to make such bids, the
equivalent rate, as reasonably determined by such Lender, derived from Page 3750 of the Dow Jones
Markets (Telerate) Service or other publicly available source as described in the definition of
LIBOR Rate.




 


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(6) U.S. Taxes.



(a) Gross-up for Deduction or Withholding of U.S. Taxes. Borrower agrees to pay to each
Lender that is not a U.S. Person such additional amounts as are necessary in order that the net
payment of any amount due to such non U.S. Person hereunder after deduction for or withholding in
respect of any U.S. Taxes imposed with respect to such payment (or in lieu thereof, payment of such
U.S. Taxes by such non U.S. Person), will not be less than the amount stated herein to be then due
and payable, provided that the foregoing obligation to pay such additional amounts shall
not apply:



(i) to any payment to any Lender hereunder unless such Lender is, on the date hereof (or on
the date it becomes a Lender hereunder as provided in Section 12.24(2)) and on the date of
any change in the Applicable Lending Office of such Lender, either entitled to submit a Form W-8BEN
(relating to such Lender and entitling it to a complete exemption from withholding on all interest
to be received by it hereunder in respect of the Loans) or Form W-8ECI (relating to all interest to
be received by such Lender hereunder in respect of the Loans), or



(ii) to any U.S. Taxes imposed solely by reason of the failure by such non U.S. Person to
comply with applicable certification, information, documentation or other reporting requirements
concerning the nationality, residence, identity or connections with the United States of America of
such non U.S. Person if such compliance is required by statute or regulation of the United States
of America as a precondition to relief or exemption from such U.S. Taxes.



For the purposes hereof, (A) “U.S. Person” means a citizen, national or resident of the
United States of America, a corporation, limited liability company, partnership or other entity
created or organized in or under any laws of the United States of America or any State thereof, or
any estate or trust that is subject to Federal income taxation regardless of the source of its
income, (B) “U.S. Taxes” means any present or future tax, assessment or other charge or
levy imposed by or on behalf of the United States of America or any taxing authority thereof or
therein, (C) “Form W-8BEN” means Form W-8BEN of the Department of the Treasury of the
United States of America and (D) “Form W-8ECI” means Form W-8ECI of the Department of the
Treasury of the United States of America. Each of the Forms referred to in the foregoing clauses
(C) and (D) shall include such successor and related forms as may from time to time be adopted by
the relevant taxing authorities of the United States of America to document a claim to which such
Form relates.



(b) Evidence of Deduction, Etc. Within thirty (30) days after paying any amount to the
Administrative Agent or any Lender from which it is required by law to make any deduction or
withholding, and within thirty (30) days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, Borrower shall deliver to the Administrative
Agent for delivery to such non U.S. Person evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).


 


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(7) Replacement of Lenders. If any Lender requests compensation pursuant to
Section 2.9(1) or 2.9(6), or any Lender’s obligation to Continue Loans of any Type,
or to Convert Loans of any Type into the other Type of Loan, shall be suspended pursuant to
Section 2.9(2) or 2.9(3) (any such Lender requesting such compensation, or whose
obligations are so suspended, being herein called a “Requesting Lender”), Borrower, upon
three (3) Business Days notice, may require that such Requesting Lender transfer all of its right,
title and interest under this Agreement and such Requesting Lender’s Note to any bank or other
financial institution (a “Proposed Lender”) identified by Borrower that is satisfactory to
the Administrative Agent (i) if such Proposed Lender agrees to assume all of the obligations of
such Requesting Lender hereunder, and to purchase all of such Requesting Lender’s Loans hereunder
for consideration equal to the aggregate outstanding principal amount of such Requesting Lender’s
Loans, together with interest thereon to the date of such purchase (to the extent not paid
by Borrower), and satisfactory arrangements are made for payment to such Requesting Lender of
all other amounts accrued and payable hereunder to such Requesting Lender as of the date of such
transfer (including any fees accrued hereunder and any amounts that would be payable under
Section 2.9(5) as if all of such Requesting Lender’s Loans were being prepaid in full on
such date) and (ii) if such Requesting Lender has requested compensation pursuant to
Section 2.9(1) or 2.9(6), such Proposed Lender’s aggregate requested compensation,
if any, pursuant to Section 2.9(1) or 2.9(6) with respect to such Requesting
Lender’s Loans is lower than that of the Requesting Lender. Subject to the provisions of
Section 12.24(2), such Proposed Lender shall be a “Lender” for all purposes hereunder.
Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements of
Borrower contained in Sections 2.9(1), 2.9(6) and 12.5 (without duplication
of any payments made to such Requesting Lender by Borrower or the Proposed Lender) shall survive
for the benefit of such Requesting Lender under this Section 2.9(7) with respect to the
time prior to such replacement.



Section 2.10 Administration Fee. Until payment in full of all obligations under this
Agreement and the other Loan Documents, Borrower shall pay to Administrative Agent on each Payment
Date (commencing on December 1, 2008), for its sole account, an monthly administration fee (the
“Administration Fee”) equal to $4,000.


 


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Section 2.11 Take-Out Obligations.



(1) Take-Out Obligations. Borrower acknowledges and agrees that: (a) Eurohypo is obligated,
pursuant to and in accordance with the Take-Out Agreement, to acquire CIT’s and KBC’s interest in
Note A pursuant to and in accordance with the terms, provisions, covenants and conditions of the
Take-Out Agreement; and (b) Eurohypo for purposes of such acquisition is and shall be deemed to be
an Eligible Assignee, and no further consent of Borrower shall be required with respect to such
acquisition. The outstanding principal balance from time to time of any of the interests in Note A
purchased by Eurohypo pursuant to the Take-Out Agreement shall be added to and become a part of
Note B (and shall bear interest at the rates set forth therein); provided, however,
that upon payment by Eurohypo of the Second Take-Out Amount pursuant to the Take-Out Agreement,
Eurohypo may elect, in its sole and absolute discretion, and notwithstanding the provisions of any
co-lender agreement among the Lenders to the contrary, to cause the all or a portion of outstanding
principal balance of Note A purchased by Eurohypo pursuant to the Take-Out Agreement, together with
all or a portion of the outstanding principal balance of Note B held by Eurohypo, to (x) be of the
same priority as any portion of Note A previously acquired by Eurohypo from CIT and KBC (whether or
not the same is thereafter sold by Eurohypo to a Qualified Substitute Lender, and (y) bear interest
at the rates set forth in Note B. Without limiting the provisions of Sections 2.1(6)(c) or
9.9, Borrower shall take such actions, including delivery of one or more replacement notes,
as are reasonably requested by Eurohypo to effect the provisions of this Section 2.11(1).
Further, as a condition to the acquisition by any Qualified Substitute Lender of any portion of
Note A pursuant to Sections 2.5(1)(e) or 2.5(2)(d), such Qualified Substitute
Lender shall enter into a written agreement with Eurohypo, in form and substance satisfactory to
Eurohypo, whereby such Qualified Substitute Lender acknowledges and agrees to Eurohypo’s rights
under this Section 2.11(1) and agrees to enter into such modifications of any co-lender
agreement among the Lenders as are necessary to effect such rights (subject, however, to the
approval of the Lenders to any such modifications of any co-lender agreement).



(2) Amendments to Take-Out Agreement. Eurohypo, CIT and KBC shall not amend or modify the
Take-Out Agreement in a manner which would change the definitions of Take-Out Event, Initial
Take-Out Amount or Second Take-Out Amount, without the consent of Borrower.



(3) No Limit on Borrower’s Obligations. Nothing in this Section 2.11 shall be
construed as limiting Borrower’s obligations to repay the Loans, together with interest thereon and
all other amounts due hereunder or under the other Loan Documents, in accordance with the other
provisions of this Agreement and the other Loan Documents.


 


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ARTICLE 3




INSURANCE, CONDEMNATION, AND IMPOUNDS





Section 3.1 Insurance. Borrower shall maintain insurance as follows:



(1) Insurance against loss customarily included under standard “All Risk” policies including
flood, vandalism, and malicious mischief, boiler and machinery, and such
other insurable hazards as, under good insurance practices, from time to time are insured
against for other property and buildings similar to the Project in nature, use, location, height,
and type of construction. Such policy shall also insure costs of demolition and increased cost of
construction. The amount of such insurance shall be not less than one hundred (100%) percent of
the replacement cost value of the Improvements. Each such policy shall contain an agreed amount
replacement cost endorsement and shall cover, without limitation, all tenant improvements and
betterments that Borrower is required to insure on a replacement cost basis. The insurance policy
shall be endorsed to also provide guaranteed building replacement cost to the building and such
tenant improvements in an amount to be subject to the consent of the Administrative Agent, which
consent shall not be unreasonably withheld. The Administrative Agent shall be named mortgagee on a
non-contributing Standard Mortgagee Endorsement providing that any loss payable thereunder shall be
paid to the Administrative Agent.



(2) (A) General Public Liability insurance, including, without limitation, Commercial General
Liability insurance; Owned, Hired and Non Owned Auto Liability; and coverage for Personal Injury,
Bodily Injury, Death, Accident and Property Damage, providing in combination no less than
$1,000,000 per occurrence and $5,000,000 in the annual aggregate, per location. The policies
described in this paragraph shall cover, without limitation: elevators, escalators, independent
contractors, contractual liability covering, to the maximum extent permitted by law, Borrower’s
obligation to indemnify the Administrative Agent and the Lenders as required under this Agreement,
Products and Completed Operations Liability coverage. All such policies shall include the
Administrative Agent (for the benefit of the Lenders) as an “Additional Insured.”



(B) Umbrella liability or excess liability providing no less than $50,000,000 per occurrence
and in the annual aggregate.



(3) Rental and/or business income coverage in an amount not less than the amount of rent
payable annually and/or annual business income, endorsed to provide a 365-day extended period of
indemnity. The Administrative Agent shall be named as loss payee with respect to this coverage.



(4) Insurance which affirmatively insures against any act of terrorism or sabotage, including,
but not limited to, any series of named perils which are identical to the acts of terrorism (to the
extent that such act of terrorism or sabotage may be excluded as such from coverage under the
insurance required to be maintained by Borrower pursuant to subsections (1), (2), and (3) above) in
an amount equal to the full replacement value of the Project.



(5) Comprehensive boiler and machinery insurance covering all mechanical and electrical
equipment against physical damage, rent loss and improvements loss and covering, without
limitation, all tenant improvements and betterments that Borrower is required to insure pursuant to
any lease on a replacement cost basis and in the minimum amount of $50,000 and naming the
Administrative Agent as Mortgagee on a non-contributing Standard Mortgagee Endorsement providing
that any loss payable thereunder shall be paid to the Administrative Agent.


 


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(6) At all times during which construction work is being performed at the Project, Builder’s
Risk “All Risk” insurance in such amount as the Administrative Agent shall require but in no event
less than one hundred (100%) percent of the replacement cost value of the completed Improvements
and one hundred (100%) percent of the replacement cost value of all tenant improvements. Such
policy shall be written on a Builder’s Risk Completed Value Form (100% non-reporting) or its
equivalent and shall include coverage for loss by collapse, theft, flood, and earthquake. Such
insurance policy shall also include coverage for:



(a) loss suffered with respect to materials, equipment, machinery, and supplies whether
on-site, in transit, or stored off-site and with respect to temporary structures, hoists,
sidewalks, retaining walls, and underground property;



(b) soft costs, plans, specifications, blueprints and models in connection with any
restoration following a casualty;



(c) demolition and increased cost of construction, including, without limitation, increased
costs arising out of changes in applicable laws and codes;




(d) law and ordinance coverage; and




(e) rental and/or business income on an actual loss sustained basis.



Such policy shall name the Administrative Agent under a non-contributing New York type of standard
mortgagee clause or an equivalent endorsement satisfactory to the Administrative Agent and as “loss
payee” with respect to rental/business income insurance. If the insurance required under this
subsection 6 is obtained by blanket insurance policies, the insurance policy shall be
endorsed to also provide guaranteed building replacement cost to the building and such tenant
improvements in an amount to be subject to the consent of the Administrative Agent, which consent
shall not be unreasonably withheld.




(7) Workers Compensation and Disability insurance as required by Applicable Law.



(8) Windstorm insurance satisfactory to the Administrative Agent, including, from and after
the date that the hotel condominium portion of the Project has opened for business, business
interruption coverage sufficient to pay debt service on the Loans, taxes and insurance after a
windstorm casualty in such amount as the Administrative Agent shall require, but in no event less
than twenty percent (20%) of the replacement cost value of the completed Improvements issued by a
carrier that satisfies the requirements in subsection (10) below and in all other respects
satisfying the requirements set forth in subsection (10) below.



(9) Such other types and amounts of insurance with respect to Borrower, the Project, the
Improvements and the operation thereof that are commonly maintained by prudent owners of other
property and buildings similar to the Project in nature, use, location, height, and type of
construction, as may from time to time be reasonably required by the Administrative Agent.
Administrative Agent acknowledges that the insurance obtained by Borrower with respect to the
Project as of the date hereof, evidence of which has been provided to
Administrative Agent, satisfies, as of the date hereof, the requirements set forth in this
Section 3.1.


 


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(10) All insurance policies shall be endorsed in form and substance acceptable to the
Administrative Agent to name the Administrative Agent (on behalf of the Lenders) as an additional
insured, loss payee or mortgagee thereunder, as its interest may appear, with loss payable to the
Administrative Agent, without contribution, under a standard New York (or local equivalent)
mortgagee clause. All such insurance policies and endorsements shall be fully paid for and contain
such provisions and expiration dates and be in such form and issued by such insurance companies
licensed to do business in the State, with a rating of “A-IX” or better as established by Best’s
Rating Guide (or an equivalent rating approved in writing by the Administrative Agent). Each
policy shall provide that such policy may not be cancelled or materially changed except upon thirty
(30) days’ prior written notice of intention of non-renewal, cancellation or material change to the
Administrative Agent and that no act or thing done by Borrower shall invalidate any policy as
against the Administrative Agent or any Lender. If Borrower fails to maintain insurance in
compliance with this Section 3.1, the Administrative Agent may obtain such insurance and
pay the premium therefor and Borrower shall, on demand, reimburse the Administrative Agent for all
expenses incurred in connection therewith. Borrower shall assign the policies or proofs of
insurance to the Administrative Agent (on behalf of the Lenders), in such manner and form that the
Administrative Agent and its successors and assigns shall at all times require and hold the same as
security for the payment of the Loans. Borrower shall deliver copies of evidence of such coverage
on original policies certified to the Administrative Agent by the insurance company or authorized
agent as being true copies, together with the endorsements required hereunder. The proceeds of
insurance policies coming into the possession of the Administrative Agent shall not be deemed trust
funds, and the Administrative Agent shall be entitled to apply such proceeds as herein provided.



(11) Borrower shall give immediate written notice of any loss to the insurance carrier and to
the Administrative Agent. Except as otherwise provided in Section 9.17(2), Borrower hereby
irrevocably authorizes and empowers the Administrative Agent, as attorney in fact for Borrower
coupled with an interest, to make proof of loss, to adjust and compromise any claim under insurance
policies, to appear in and prosecute any action arising from such insurance policies, to collect
and receive insurance proceeds, and to deduct therefrom the Administrative Agent’s expenses
incurred in the collection of such proceeds. Notwithstanding the foregoing, so long as no
Potential Default or Event of Default exits, Borrower shall have the right to adjust and compromise
claims which, in the aggregate during any twelve-month period, do not exceed the Threshold Amount,
provided that Borrower provide the Administrative Agent with not less than five (5)
Business Days written notice of such adjustment and compromise. Nothing contained in this
Section 3.1(11) shall require the Administrative Agent or any Lender to incur any expense
or take any action hereunder.


 


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Section 3.2 Condemnation Awards. Borrower shall immediately notify the Administrative Agent
of the institution of any proceeding for the condemnation or other taking of the Project or any
portion thereof. The Administrative Agent may participate in any such proceeding and Borrower will
deliver to the Administrative Agent all instruments necessary or required by the Administrative
Agent to permit such participation. Without the Administrative Agent’s prior consent (subject to
the approval of the Majority Lenders), Borrower (1) shall not
agree to any compensation or award; and (2) shall not take any action or fail to take any
action which would cause the compensation to be determined. Except as otherwise provided in
Section 9.17(2), all awards and compensation for the taking or purchase in lieu of
condemnation of the Project or any part thereof are hereby assigned to and shall be paid to the
Administrative Agent. Borrower authorizes the Administrative Agent to collect and receive such
awards and compensation, to give proper receipts and acquittances therefor, and in the
Administrative Agent’s sole discretion (which the Administrative Agent shall exercise at the
direction of the Majority Lenders) to apply the same toward the payment of the Loans,
notwithstanding that the Loans may not then be due and payable, or to the restoration of the
Project; provided, however, if the award is less than or equal to the Threshold
Amount and Borrower requests that such proceeds be used for non structural site improvements (such
as landscape, driveway, walkway and parking area repairs) required to be made as a result of such
condemnation, the Administrative Agent will apply the award to such restoration in accordance with
disbursement procedures applicable to insurance proceeds set forth in Section 3.3 provided
there exists no Potential Default or Event of Default. Borrower, upon request by the
Administrative Agent, shall execute all instruments requested to confirm the assignment of the
awards and compensation to the Administrative Agent, free and clear of all liens, charges or
encumbrances.



Section 3.3 Use and Application of Insurance Proceeds. Except as otherwise provided in
Section 9.17(2), the Administrative Agent shall apply insurance proceeds to costs of
restoring the Project or the Loans as follows:



(1) If the loss is less than or equal to the Threshold Amount, the Administrative Agent shall
apply the insurance proceeds to restoration provided (a) no Event of Default or Potential Default
exists; (b) Borrower promptly commences and is diligently pursuing restoration of the Project; and
(c) the Hotel Management Agreement in effect as of the date of the occurrence of such casualty or
condemnation, whichever the case may be, shall (i) remain in full force and effect during such
restoration and shall not otherwise terminate as a result of the casualty or condemnation or the
restoration; or (ii) if terminated, shall have been replaced with a replacement Hotel Management
Agreement with a Qualified Hotel Manager, prior to the opening or reopening of the Project or any
portion thereof for business with the public.



(2) If the loss exceeds the Threshold Amount but is not more than ten percent (10%) of the
replacement value of the improvements, the Administrative Agent shall apply the insurance proceeds
to restoration provided that at all times during such restoration (a) no Event of Default or
Potential Default exists; (b) the Administrative Agent determines that there are sufficient funds
available to restore and repair the Project to a condition approved by the Administrative Agent;
(c) the Administrative Agent determines that the Net Operating Income of the Project during
restoration will be sufficient to pay Debt Service; (d) the Administrative Agent determines that
restoration and repair of the Project to a condition approved by the Administrative Agent will be
completed within six (6) months after the date of loss or casualty and in any event ninety (90)
days prior to the Maturity Date; (e) Borrower promptly commences and is diligently pursuing
restoration of the Project; and (f) the Hotel Management Agreement in effect as of the date of the
occurrence of such casualty or condemnation, whichever the case may be, shall (i) remain in full
force and effect during such restoration and shall not otherwise terminate as a result of the
casualty or condemnation or the restoration or (ii) if terminated, shall have been replaced with a
replacement Hotel Management Agreement with a Qualified Hotel
Manager, prior to the opening or reopening of the Project or any portion thereof for business
with the public.


 


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(3) If the conditions set forth above are not satisfied or the loss exceeds the maximum amount
specified in Section 3.3(2) above, in the Administrative Agent’s sole discretion, the
Administrative Agent may (subject to the approval of the Majority Lenders) apply any insurance
proceeds it may receive to the payment of the Loans, without any prepayment penalty or payment, or
allow all or a portion of such proceeds to be used for the restoration of the Project.




Section 3.4 Disbursement of Proceeds.



(1) All insurance proceeds required to be held by the Administrative Agent in the
Casualty/Taking Account in accordance with the Cash Management Agreement and, until disbursed in
accordance with the provisions of this Section 3.4, shall constitute additional security
for the Loans. Upon receipt of evidence reasonably satisfactory to the Administrative Agent that
all the conditions precedent to such advance, including, if applicable, those set forth in
Section 3.3(2) above, have been satisfied, the insurance proceeds shall be disbursed by the
Administrative Agent to, or as directed by, Borrower from time to time during the course of the
restoration in substantially the same manner and subject to similar conditions as if such advances
were being made in connection with a construction loan, such manner of disbursement and conditions
to be reasonably determined by the Administrative Agent, including the Administrative Agent’s
receipt of (a) advice from a Restoration Consultant (who shall be employed by the Administrative
Agent at Borrower’s sole expense) that the work completed or materials installed conform to said
budget and plans, as approved by the Administrative Agent, (b) evidence that all materials
installed and work and labor performed to the date of the applicable advance (except to the extent
that they are to be paid for out of the requested disbursement) in connection with the restoration
have been paid for in full, including the receipt of waivers of lien, contractor’s certificates,
surveys, receipted bills, releases, title policy endorsements and such other evidences of cost,
payment and performance satisfactory to the Administrative Agent, and (c) evidence that there exist
no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to
file same, or any other Liens of any nature whatsoever on the Project which are not being contested
or have not either been fully bonded to the reasonable satisfaction of the Administrative Agent and
discharged of record or in the alternative fully insured to the reasonable satisfaction of the
Administrative Agent under the title policy obtained in connection with the Loans made herein.
Notwithstanding the foregoing, but subject to the other provisions of this Section 3.4, in
the event of a loss which is less than or equal to the Threshold Amount, Administrative Agent shall
disburse the insurance proceeds to Borrower from time to time during the course of the renovation
upon written request therefor from Borrower to pay the costs of such renovation, provided that at
all times (i) Borrower is diligently pursuing the completion of such renovation in a good and
workmanlike manner, (ii) such advances are being used to reimburse Borrower for, or to pay directly
to the third parties entitled thereto, the costs of such renovation, and (iii) upon Administrative
Agent’s request from time to time, Administrative Agent shall have received evidence of the type
referred to in clause (C) above.


 


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(2) All plans and specifications required in connection with the restoration shall be subject
to prior review and approval (such approval not to be unreasonably withheld) in all respects by the
Administrative Agent and by an independent consulting engineer selected by the Administrative Agent
(the “Restoration Consultant”). The Administrative Agent shall have the use of the plans
and specifications and all permits, licenses and approvals required or obtained in connection with
the restoration. The identity of the contractors, subcontractors and materialmen engaged in the
restoration, as well as all contracts having a cost in excess of $50,000, shall be subject to prior
review and approval by the Administrative Agent and the Restoration Consultant. All costs and
expenses incurred by the Administrative Agent in connection with making the insurance proceeds
available for the restoration including reasonable counsel fees and disbursements and the
Restoration Consultant’s fees, shall be paid by Borrower. Borrower shall also obtain, at its sole
cost and expense, all necessary government approvals as and when required in connection with such
restoration and provide copies thereof to the Administrative Agent and Restoration Consultant.



(3) In no event shall the Administrative Agent be obligated to make disbursements of the
insurance proceeds in excess of an amount equal to the costs actually incurred from time to time
for work in place as part of the restoration, as certified by the Restoration Consultant,
minus the Restoration Retainage. The term “Restoration Retainage” means the
greater of (i) an amount equal to ten percent (10%) of the costs actually incurred for work in
place as part of the restoration, as certified by the Restoration Consultant and (ii) the amount
actually held back by Borrower from contractors, subcontractors and materialmen engaged in the
restoration. The Restoration Retainage shall not be released until the Restoration Consultant
certifies to the Administrative Agent that the restoration has been substantially completed in
accordance with the provisions of this Section 3.4, subject to punch-list items and other
non-material items of work and that all approvals necessary for the re-occupancy and use of the
Project have been obtained from all appropriate governmental authorities, and the Administrative
Agent receives evidence reasonably satisfactory to the Administrative Agent that the costs of the
restoration have been paid in full or will be paid in full out of the Restoration Retainage;
provided, however, that the Administrative Agent will release the portion of the
Restoration Retainage being held with respect to any contractor, subcontractor or materialman
engaged in the restoration as of the date upon which the Restoration Consultant certifies to the
Administrative Agent that such contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with its contract, and the
Administrative Agent receives lien waivers and evidence of payment in full of all sums due to such
contractor, subcontractor or materialman as may be reasonably requested by the Administrative Agent
or by the title company issuing the title policy, and the Administrative Agent receives an
endorsement to the title policy insuring the continued priority of the lien of the Mortgage and
evidence of payment of any premium payable for such endorsement. If required by the Administrative
Agent, the release of any such portion of the Restoration Retainage shall be approved by the surety
company, if any, which has issued a payment or performance bond with respect to such contractor,
subcontractor or materialman.



(4) The Administrative Agent shall not be obligated to make disbursements of the insurance
proceeds more frequently than once per month.


 


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(5) If at any time the insurance proceeds or the undisbursed balance thereof shall not, in the
reasonable opinion of the Administrative Agent in consultation with the Restoration Consultant, be
sufficient to pay in full the balance of the costs which are estimated by the Restoration
Consultant to be incurred in connection with the completion of the restoration, Borrower shall
deposit the deficiency (the “Insurance Proceeds Deficiency”) with the Administrative Agent
within fifteen (15) Business Days of the Administrative Agent’s request and before any further
disbursement of the insurance proceeds shall be made. The Insurance Proceeds Deficiency shall be
held in the Casualty/Taking Account in accordance with the Cash Management Agreement and shall be
disbursed for costs actually incurred in connection with the restoration on the same conditions
applicable to the disbursement of the insurance proceeds, and, until so disbursed, shall constitute
additional security for the Loans.



(6) After the Restoration Consultant certifies to the Administrative Agent that a restoration
has been substantially completed in accordance with the provisions of this Section 3.4, and
the receipt by the Administrative Agent of evidence satisfactory to the Administrative Agent that
all costs incurred in connection with the restoration have been paid in full, the excess, if any,
of the insurance proceeds and the remaining balance, if any, of the Insurance Proceeds Deficiency
deposited with the Administrative Agent shall be remitted to Borrower, provided that no
Potential Default or Event of Default shall exist.



(7) All insurance proceeds not required (a) to be made available for the restoration or (b) to
be returned to Borrower as excess insurance proceeds pursuant to subsection (6) above may
(i) be retained and applied by the Administrative Agent toward the payment of the Loans, whether or
not then due and payable, in the order set forth in Section 2.4(7)(a) so long as no Event
of Default exists, and, if an Event of Default exists, in such order, priority and proportions as
the Administrative Agent in its sole discretion shall deem proper, or, (B) at the sole discretion
of the Administrative Agent, the same may be paid, either in whole or in part, to Borrower for such
purposes and upon such conditions as the Administrative Agent shall designate.



(8) Notwithstanding any casualty, Borrower shall continue to make payments with respect to the
outstanding principal amount in the manner provided in the Notes, this Agreement and the other Loan
Documents and the outstanding principal amount shall not be reduced unless and until (a) any
insurance proceeds or condemnation award shall have been actually received by the Administrative
Agent; (b) the Administrative Agent shall have deducted its reasonable expenses of collecting such
proceeds; and (c) the Administrative Agent shall have applied any portion of the balance thereof to
the repayment of the outstanding principal amount in accordance with Section 3.4(7). The
Lenders shall not be limited to the interest paid on any condemnation award but shall continue to
be entitled to receive interest as provided in Article 2.


 


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ARTICLE 4




RESERVES




Section 4.1 Real Estate Tax and Insurance Reserve Fund.



(1) Deposits. As of the Amendment Closing Date, the balance of the Tax and Insurance
Reserve Subaccount is $1,221,932.14. On each Payment Date occurring after the Amendment Closing
Date, Borrower shall deposit with the Administrative Agent (or, at the direction of the
Administrative Agent, the Depository Bank), for deposit in the Tax and Insurance Reserve
Subaccount, one-twelfth of the real estate taxes on the Project and insurance premium with respect
to insurance required to be maintained by Borrower under Section 3.1 hereof that the
Administrative Agent estimates will be payable during the next ensuing twelve (12) months, in order
to accumulate in the Tax and Insurance Reserve Subaccount thirty (30) days prior to their
respective due dates sufficient funds to pay all such real estate taxes and insurance premiums
(said amounts, together with the amount set forth in the first sentence of this
Section 4.1(1), being, collectively, the “Tax and Insurance Reserve Fund”). If at
any time the Administrative Agent reasonably determines that the Tax and Insurance Reserve Fund is
not or will not be sufficient to pay real estate taxes or insurance premiums thirty (30) days prior
to their respective due dates, the Administrative Agent shall notify Borrower of such determination
and Borrower shall increase its monthly deposits into the Tax and Insurance Reserve Fund by the
amount that the Administrative Agent reasonably estimates is sufficient to make up the deficiency
thirty (30) days prior to delinquency of any such real estate taxes and/or thirty (30) days prior
to expiration of the insurance policies, as the case may be. Without limiting the foregoing or
Administrative Agent’s other rights and remedies hereunder, in the event that Administrative Agent
determines at any time that the Tax and Insurance Reserve Fund is not or will not be sufficient to
pay real estate taxes and insurance premiums thirty (30) days prior to their respective due dates,
Administrative Agent may utilize funds from time to time on deposit in the Construction Completion
Account to pay such real estate taxes and insurance premiums when due. Commencing with the
satisfaction of the Partial Release Conditions (as set forth in Section 14.3), the amounts
required to be deposited in the Tax and Insurance Reserve Fund may be adjusted on a quarterly basis
by the Administrative Agent in its sole and absolute judgment.



(2) Disbursements. Borrower shall furnish the Administrative Agent with (a) bills for
the charges for which such deposits are required and (b) a disbursement request (in a form
reasonably satisfactory to the Administrative Agent), executed by an authorized officer of
Borrower, at least fifteen (15) days prior to the date on which the charges first become payable.
Provided that no Event of Default exists, the Administrative Agent will direct the Depository Bank
apply the Tax and Insurance Reserve Fund to payments of insurance premiums and real estate taxes
required to be made by the Borrower pursuant to Sections 3.1 and 9.2, respectively, and
under the Mortgage but, in any event, not earlier than ten (10) days prior to the due dates
thereof. In making any payment relating to the Tax and Insurance Reserve Fund, the Depository Bank
may do so according to any bill, statement or estimate procured from the appropriate public office
(with respect to real estate taxes) or insurer or agent (with respect to insurance premiums),
without inquiry into the accuracy of such bill, statement or estimate or into the validity of any
tax, assessment, sale, forfeiture, tax lien or title or claim thereof unless said bill, statement
or estimate is obviously incorrect. If the amount of the Tax and Insurance Reserve Fund shall
exceed the amounts due for insurance premiums and real estate taxes pursuant to Sections 3.1
and 9.2, the Administrative Agent shall, in its sole discretion, return any excess to Borrower
or credit such excess against future payments to be made to the Tax and Insurance Reserve Fund.
Provided that on the date that said real estate taxes are due and payable, no Event of Default
exists and sufficient funds are on deposit in the Tax and Insurance Reserve Fund to pay real estate
taxes, Borrower shall not be liable to pay and shall not be charged with any late charges,
interest and/or penalties imposed by or payable to any governmental authority as a result of
the Depository Bank’s failure to pay real estate taxes prior to the date that same become
delinquent.


 


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Section 4.2 Seasonality Reserve Fund.



(1) Deposits. Commencing on the first Payment Date occurring after the Amendment
Closing Date and thereafter on each Payment Date occurring prior to the first anniversary of the
Amendment Closing Date, Borrower shall deposit with the Administrative Agent (or, at the direction
of the Administrative Agent, the Depository Bank), for deposit in the Seasonality Reserve Account,
all Net Operating Cash Flow. Thereafter, on each Payment Date occurring on or after the first
anniversary of the Amendment Closing Date, Borrower shall deposit with the Administrative Agent
(or, at the direction of the Administrative Agent, the Depository Bank), for deposit in the
Seasonality Reserve Account, all or such portion of the Net Operating Cash Flow as is necessary to
cause the balance of the Seasonality Reserve Account to at all times equal the Minimum Seasonality
Reserve Balance (the “Seasonality Reserve Fund”).



(2) Disbursements. Provided that no Potential Default and/or Event of Default exists
(other than a Potential Default or an Event of Default which may be cured by the transfer of
amounts credited to the Seasonality Reserve Fund to Borrower’s account pursuant to this Section
4.2(2)), and provided that there are insufficient Operating Revenues to pay Operating Expenses
and Debt Service, the Administrative Agent will direct the Depository Bank to transfer (to the
extent funds are available therein) amounts credited to the Seasonality Reserve Fund to Borrower’s
account to pay or reimburse Borrower for the payment of any interest payments then due and payable
with respect to the Loans and the Existing Mezzanine Loan and any Operating Expenses then due and
payable in accordance with the current Annual Operating Budget approved by the Administrative Agent
(or as may otherwise be approved by the Administrative Agent). Provided that no Potential Default
and/or Event of Default exists, the Administrative Agent shall direct the Depository Bank to make
such disbursements as requested by Borrower on a monthly basis within five (5) Business Days
following receipt by the Administrative Agent of a written request for disbursement (in a form
reasonably approved by the Administrative Agent) executed by an authorized officer of Borrower,
which certificate shall certify, among other things, that there are insufficient Operating Revenues
to pay Operating Expenses (for which such disbursement is being requested) and insufficient funds
remaining to be disbursed from the Interest Holdback to pay Debt Service on the Loans and the
Existing Mezzanine Loan, as well as such evidence as the Administrative Agent may reasonably
require to demonstrate that any such Operating Expenses were incurred pursuant to the current
Annual Operating Budget (to the extent the same are not otherwise approved by the Administrative
Agent). Additionally, provided that no Potential Default and/or Event of Default exists, the
Administrative Agent shall from time to time upon request of Borrower, apply all or a portion of
the balance of the Seasonality Reserve Fund to the payment of the outstanding principal balance of
the Loans.


 


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Section 4.3 Construction Completion Fund.



(1) Funding. On the Amendment Closing Date, Borrower shall cause the remaining
unfunded proceeds of the Junior Mezzanine Loan in the amount of $6,000,000 (the “Construction
Completion Fund”) to be deposited in the Construction Completion Account,
such that, as of the Amendment Closing Date, the balance of funds on deposit in the
Construction Completion Account shall be $6,000,000.



(2) Disbursements. So long as no Potential Default and/or Event of Default exists,
the Administrative Agent shall direct the Depository Bank to disburse the Construction Completion
Fund to Borrower upon the satisfaction of the applicable Advance Conditions set forth in
Schedule 2.1 for purposes of funding the costs of the Building Conversion pursuant to the
Project Budget; provided, that no portion of the Construction Completion Fund shall be used to pay
any development or other fees of Borrower or its Affiliates, nor shall the proceeds of the
Construction Completion Fund be disbursed to pay any Franchise Fee. All disbursements otherwise
made shall be subject to the Advance Conditions and shall be in the amounts and for purposes
established in the Project Budget. Any funds remaining in the Construction Completion Fund
following Construction Completion shall be applied by the Administrative Agent to the outstanding
principal balance of the Loans on the Payment Date following Construction Completion.




Section 4.4 Reserve Funds and Security Accounts Generally.



(1) Grant of Security Interest. Borrower hereby grants a perfected first priority
security interest in favor of the Administrative Agent for the ratable benefit of the Lenders in
each Reserve Fund and Security Account established by or for it hereunder and all financial assets
and other property and sums at any time held, deposited or invested therein, and all security
entitlements and investment property relating thereto, together with any interest or other earnings
thereon, and all proceeds thereof, whether accounts, general intangibles, chattel paper, deposit
accounts, instruments, documents or securities (collectively, “Reserve Account
Collateral”), together with all rights of a secured party with respect thereto (even if no
further documentation is requested by the Administrative Agent or the Lenders or executed by
Borrower). Borrower covenants and agrees:



(a) to do all acts that may be reasonably necessary to maintain, preserve and protect Reserve
Account Collateral;



(b) to pay promptly when due all material taxes, assessments, charges, encumbrances and liens
now or hereafter imposed upon or affecting any Reserve Account Collateral;



(c) to appear in and defend any action or proceeding which may materially and adversely affect
Borrower’s title to or the Administrative Agent’s interest in the Reserve Account Collateral;



(d) following the creation of each Reserve Fund and Security Account established by or for
Borrower and the initial funding thereof, other than to the Administrative Agent pursuant to this
Agreement or the Cash Management Agreement, not to transfer, assign, sell, surrender, encumber,
mortgage, hypothecate, or otherwise dispose of any of the Reserve Account Collateral or rights or
interests therein, and to keep the Reserve Account Collateral free of all levies and security
interests or other liens or charges except the security interest in favor of the Administrative
Agent granted hereunder;


 


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(e) to account fully for and promptly deliver to the Administrative Agent, in the form
received, all documents, chattel paper, instruments and agreements constituting the Reserve Account
Collateral hereunder, endorsed to the Administrative Agent or in blank, as requested by the
Administrative Agent, and accompanied by such powers as appropriate and until so delivered all such
documents, instruments, agreements and proceeds shall be held by Borrower in trust for the
Administrative Agent, separate from all other property of Borrower; and



(f) from time to time upon request by the Administrative Agent, to furnish such further
assurances of Borrower’s title with respect to the Reserve Account Collateral, execute such written
agreements, or do such other acts, all as may be reasonably necessary to effectuate the purposes of
this agreement or as may be required by law, or in order to perfect or continue the first-priority
lien and security interest of the Administrative Agent in the Reserve Account Collateral.



(2) Rights on Event of Default. Upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent, at its option, may withdraw the Reserve Funds and the
other funds in the Security Accounts and apply such funds to the items for which the Reserve Funds
were established or to payment of the Loans in such order, proportion and priority as the
Administrative Agent may determine in its sole discretion. The Administrative Agent’s right to
withdraw and apply such funds shall be in addition to all other rights and remedies provided to the
Administrative Agent on behalf of the Lenders under the Loan Documents.



(3) Prohibition Against Further Encumbrance. Borrower shall not, without the prior
consent of the Administrative Agent, further pledge, assign or grant any security interest in the
Reserve Funds or the Security Accounts or permit any Lien to attach.



(4) Release of Reserve Funds. Any amount remaining in the Reserve Funds and the
Security Accounts after the Loans have been paid in full shall be promptly returned to Borrower.



(5) Interest. In the event that any Security Account is an interest-bearing account,
the balance of any interest in such Security Account shall be deemed a part of such Security
Account. Nothing herein shall be construed as requiring the Administrative Agent or the Lenders to
pay interest on any Security Account.


 


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ARTICLE 5




ENVIRONMENTAL MATTERS




Section 5.1 Certain Definitions. As used herein, the following terms have the meanings
indicated:



(1) “Environmental Claim” means, with respect to any Person, any written notice,
notification, claim, administrative, regulatory or judicial action, suit, judgment, demand or other
written communication by any Person or governmental authority alleging or asserting liability with
respect to Borrower or the Project, whether for damages, contribution,
indemnification, cost recovery, compensation, injunctive relief, response, remediation,
damages to natural resources, personal injuries, fines or penalties arising out of, based on or
resulting from (a) the presence, use or release into the environment of any Hazardous Materials
originating at or from, or otherwise affecting, the Project; (b) any fact, circumstance, condition
or occurrence forming the basis of any violation, or alleged violation, of any Environmental Law by
Borrower or otherwise affecting the health, safety or environmental condition of the Project or
(iii) any alleged injury or threat of injury to the environment by Borrower or otherwise affecting
the Project.



(2) “Environmental Laws” means any federal, state or local law (whether imposed by
statute, or administrative or judicial order, or common law), now or hereafter enacted, governing
health, safety, industrial hygiene, the environment or natural resources, or Hazardous Materials,
including, such laws governing or regulating the use, generation, storage, removal, recovery,
treatment, handling, transport, disposal, control, discharge of, or exposure to, Hazardous
Materials.



(3) “Environmental Liens” has the meaning assigned to such term in
Section 5.3(4).



(4) “Environmental Losses” means any losses, damages, costs, fees, expenses, claims,
suits, judgments, awards, liabilities (including but not limited to strict liabilities),
obligations, debts, diminutions in value, fines, penalties, charges, costs of remediation (whether
or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable
consequential damages, litigation costs, reasonable attorneys’ fees and expenses, engineers’ fees,
environmental consultants’ fees, and investigation costs (including but not limited to costs for
sampling, testing and analysis of soil, water, air, building materials, and other materials and
substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred
in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or
awards relating to Hazardous Materials, Environmental Claims, Environmental Liens and violation of
Environmental Laws.



(5) “Hazardous Materials” means (a) petroleum or chemical products, whether in liquid,
solid, or gaseous form, or any fraction or by product thereof; (b) asbestos or asbestos containing
materials; (c) polychlorinated biphenyls (PCBs); (d) radon gas; (e) underground storage tanks;
(f) any explosive or radioactive substances; (g) lead or lead-based paint; (h) Mold; or (i) any
other substance, material, waste or mixture which is or shall be listed, defined, or otherwise
determined by any governmental authority to be hazardous, toxic, dangerous or otherwise regulated,
controlled or giving rise to liability under any Environmental Laws.



(6) “Mold” means any microbial or fungus contamination or infestation in any Project
of a type which could reasonably be anticipated (after due inquiry and investigation) to pose a
risk to human health or the environment or could reasonably be anticipated (after due inquiry and
investigation) to negatively and materially impact the value of such Project.


 


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Section 5.2 Representations and Warranties on Environmental Matters. Borrower represents and
warrants to the Administrative Agent and the Lenders that, to
Borrower’s knowledge, except as set forth in the Site Assessment or otherwise in conformance
with all applicable laws, including Environmental Laws, (1) no Hazardous Material is now or was
formerly used, stored, generated, manufactured, installed, treated, discharged, disposed of or
otherwise present at or about the Project or any property adjacent to the Project (except for
cleaning and other products currently used in connection with the routine maintenance or repair of
the Project in full compliance with Environmental Laws), (2) all permits, licenses, approvals and
filings required by Environmental Laws have been obtained, and the use, operation and condition of
the Project do not, and did not previously, violate any Environmental Laws, (3) no civil, criminal
or administrative action, suit, claim, hearing, investigation or proceeding has been brought or
been threatened in writing, nor have any settlements been reached by or with any parties or any
Liens imposed in connection with the Project concerning Hazardous Materials or Environmental Laws
and (4) no underground storage tanks exist at the Project.




Section 5.3 Covenants on Environmental Matters.



(1) Borrower shall (a) comply strictly and in all respects with applicable Environmental Laws;
(b) notify the Administrative Agent immediately upon Borrower’s discovery of any spill, discharge,
release or presence of any Hazardous Material (unless otherwise disclosed in the Site Assessment)
at, upon, under, within, contiguous to or otherwise affecting the Project; (c) promptly remove such
Hazardous Materials and remediate the Project in full compliance with Environmental Laws and in
accordance with the recommendations and specifications of an independent environmental consultant
selected by Borrower and approved by the Administrative Agent; and (d) promptly forward to the
Administrative Agent copies of all orders, notices, permits, applications or other communications
and reports in connection with any spill, discharge, release or the presence of any Hazardous
Material or any other matters relating to the Environmental Laws or any similar laws or
regulations, as they may affect the Project or Borrower.



(2) Borrower shall not cause, and shall prohibit any other Person within the control of
Borrower from causing, and shall use prudent, commercially reasonable efforts to prohibit other
Persons (including tenants) from (a) causing any spill, discharge or release, or the use, storage,
generation, manufacture, installation, or disposal, of any Hazardous Materials at, upon, under,
within or about the Project or the transportation of any Hazardous Materials to or from the Project
(except for cleaning and other products used in connection with the routine maintenance or repair
of the Project in full compliance with Environmental Laws and except as done in connection with the
remediation of the Project in full compliance with Environmental Laws), (e) installing any
underground storage tanks at the Project, or (f) conducting any activity that requires a permit or
other authorization under Environmental Laws to be conducted at the Project, except in connection
with any remediation contemplated hereunder.



(3) Borrower shall provide to the Administrative Agent, at such Borrower’s expense promptly
upon the written request of the Administrative Agent from time to time (but no more than once every
two years), a Site Assessment or, if required by the Administrative Agent, an update to any
existing Site Assessment, to assess the presence or absence of any Hazardous Materials and the
potential costs in connection with abatement, cleanup or removal of any Hazardous Materials found
on, under, at or within the Project. Borrower shall pay the cost of no more than one such Site
Assessment or update in any twelve (12) month period, unless the
Administrative Agent’s request for a Site Assessment is based on information provided under
Section 5.3(1), a reasonable suspicion of Hazardous Materials at or near the Project, a
breach of representations under Section 5.2, or an Event of Default, in which case any such
Site Assessment or update shall be at Borrower’s expense.


 


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(4) Environmental Notices. Borrower shall promptly provide notice to the Administrative Agent
of:



(a) all Environmental Claims asserted or threatened against Borrower or any other party
occupying the Project or any portion thereof or against the Project which become known to Borrower;



(b) the discovery by Borrower of any occurrence or condition on the Project or on any real
property adjoining or in the vicinity of the Project which could reasonably be expected to lead to
an Environmental Claim against Borrower, the Administrative Agent or any of the Lenders;




(c) the commencement or completion of any remediation at the Project; and



(d) any Lien or other encumbrance imposed pursuant to any Environmental Law
(“Environmental Liens”).



In connection therewith, Borrower shall transmit to the Administrative Agent copies of any
citations, orders, notices or other written communications received from any Person and any
notices, reports or other written communications submitted to any governmental authority with
respect to the matters described above.




Section 5.4 Allocation of Risks and Indemnity.



(1) Allocation and Indemnity. As between Borrower, the Administrative Agent and the Lenders,
all risk of loss associated with non-compliance with Environmental Laws, or with the presence of
any Hazardous Material at, upon, within, contiguous to or otherwise affecting the Project, shall
lie solely with Borrower. Accordingly, Borrower shall bear all risks and costs associated with any
Environmental Loss, damage or liability therefrom, including all costs of removal of Hazardous
Materials or other remediation required by the Administrative Agent or by law. Borrower shall
indemnify, defend and hold the Administrative Agent and the Lenders harmless from and against all
loss, liabilities, damages, claims, costs and expenses (including reasonable costs of defense)
arising out of or associated, in any way, with the non-compliance with Environmental Laws, or the
existence of Hazardous Materials in, on, or about the Project, or a breach of any representation,
warranty or covenant contained in this Article 5, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute or common law, including those
arising from the joint, concurrent, or comparative negligence of the Administrative Agent and the
Lenders; provided, however, Borrower shall not be liable under such indemnification
to the extent such loss, liability, damage, claim, cost or expense results solely from the
Administrative Agent’s or any Lender’s gross negligence or willful misconduct. Borrower’s
obligations under this Section 5.4 shall arise upon the discovery of the presence of any
Hazardous Material, whether or not any governmental authority has taken
or threatened any action in connection with the presence of any Hazardous Material, and
whether or not the existence of any such Hazardous Material or potential liability on account
thereof is disclosed in the Site Assessment and shall continue notwithstanding the repayment of the
Loans or any transfer or sale of any right, title and interest in the Project (by foreclosure, deed
in lieu of foreclosure or otherwise).


 


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(2) Possession Transfer. Notwithstanding anything to the contrary in this Agreement,
Borrower’s obligations to indemnify and hold harmless the Administrative Agent and the Lenders or
to remove, abate or remediate Hazardous Materials and/or cure violations of Environmental Laws
shall not extend to any of the foregoing arising directly from: (a) gross negligence or willful
misconduct of the Administrative Agent or the Lenders; (b) the violation of any Environmental Law
by any party other than Borrower, any Affiliate of Borrower or any of their respective employees,
contractors or agents, after the Administrative Agent or any purchaser from the Administrative
Agent at a foreclosure sale or after a deed in lieu thereof takes title to and possession of the
Project or otherwise takes actual possession and control (to the exclusion of Borrower and its
Affiliates) (a “Possession Transfer”); or (c) the failure of Administrative Agent or any
such purchaser in a Possession Transfer to comply with any lead based paint and asbestos operating
and maintenance programs for the Project as approved by the Administrative Agent. The burden of
proving items (a), (b) or (c) above shall be the obligation of Borrower.



Section 5.5 No Waiver. Notwithstanding any provision in this Article 5 or elsewhere
in the Loan Documents, or any rights or remedies granted by the Loan Documents, the Administrative
Agent and the Lenders do not waive and expressly reserves all rights and benefits now or hereafter
accruing to the Administrative Agent and/or any Lenders under the “security interest” or “secured
creditor” exception under applicable Environmental Laws, as the same may be amended. No action
taken by the Administrative Agent and/or any Lender pursuant to the Loan Documents shall be deemed
or construed to be a waiver or relinquishment of any such rights or benefits under the “security
interest exception.”


 


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ARTICLE 6




LEASING MATTERS




Section 6.1 Representations and Warranties on Leases. Borrower represents and warrants to the
Administrative Agent and the Lenders that: (1) the only lease or other occupancy agreement
presently affecting the Project is the Restaurant Lease; (2) the Restaurant Lease is in full force
and effect, and has not been modified, supplemented or terminated in any way, and there are no oral
agreements with respect thereto; (3) Borrower has delivered to the Administrative Agent a true,
correct and complete copy of the Restaurant Lease; (4) neither the landlord nor the tenant is in
default under the Restaurant Lease; (5) Borrower has not assigned or pledged the Restaurant Lease,
the rents therefrom or any interests therein except to the Administrative Agent (on behalf of the
Lenders); and (6) the tenant under the Restaurant Lease has not prepaid more than one (1) month’s
rent in advance (except for bona fide security deposits not in excess of an amount equal to two (2)
months rent).



Section 6.2 Restaurant Lease and Future Lease. Borrower shall not modify, supplement or
terminate in any way the Restaurant Lease without the Administrative Agent’s prior written consent,
and Borrower shall not enter into any other lease of all or any portion of the Project without the
prior written consent of the Administrative Agent.



Section 6.3 Covenants. Borrower (1) shall perform the obligations which Borrower is required
to perform under the Restaurant Lease and any other lease entered into by Borrower with respect to
the Project; (2) shall enforce the obligations to be performed by the tenants such leases; (3)
shall promptly furnish to the Administrative Agent any notice of monetary default or termination
received by Borrower from any such tenant, and any notice of monetary default or termination given
by Borrower to any such tenant; (4) shall not collect any rents under any such leases for more than
thirty (30) days in advance of the time when the same shall become due, except for bona fide
security deposits not in excess of an amount equal to two (2) months rent; (5) shall not enter into
any ground lease or master lease of any part of the Project; (6) shall not further assign or
encumber any lease of the Project; (7) shall not, except with the Administrative Agent’s prior
written consent, cancel or accept surrender or termination of any lease of the project, except in
the normal course of business; (8) shall not amend any easements affecting the Project without the
Administrative Agent’s prior approval; and (9) shall not, except with the Administrative Agent’s
prior written consent, modify or amend any lease of the Project, and any action in violation of
Sections 6.3(5), (6), (7), and (8) shall be void at the election of
the Administrative Agent.



ARTICLE 7




REPRESENTATIONS AND WARRANTIES





Borrower represents and warrants to the Administrative Agent and the Lenders that:



Section 7.1 Organization and Power. Borrower and each Borrower Party is duly organized,
validly existing and in good standing under the laws of the state of its formation or existence,
and is in compliance with legal requirements applicable to doing business in the State. Borrower
is not a “foreign person” within the meaning of § 1445(f)(3) of the Internal Revenue Code.



Section 7.2 Validity of Loan Documents. The execution, delivery and performance by Borrower
and each Borrower Party of the Loan Documents to which they are a party: (1) are duly authorized;
and (2) will not violate any law. The Loan Documents constitute the legal, valid and binding
obligations of Borrower and each Borrower Party, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, or similar laws generally affecting the
enforcement of creditors’ rights.


 


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Section 7.3 Liabilities; Litigation.



(1) The financial statements delivered by Borrower and each Borrower Party are true and
correct in all material respects with no significant change since the date of preparation. Except
as disclosed in such financial statements, there are no liabilities (fixed or contingent) affecting
the Project, Borrower or any Borrower Party that would reasonably be
expected to have an adverse effect on Borrower’s ability to fulfill its obligations hereunder.
Except as disclosed in such financial statements or otherwise to Administrative Agent, there is no
litigation, administrative proceeding, investigation or other legal action (including any
proceeding under any state or federal bankruptcy or insolvency law) pending or, to the knowledge of
Borrower, threatened, against the Project, Borrower or any Borrower Party which if adversely
determined could have a material adverse effect on such party, the Project or the Loans.



(2) Neither Borrower nor any Borrower Party is contemplating either the filing of a petition
by it under state or federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of its assets or property, and neither Borrower nor any Borrower Party has knowledge of any
Person contemplating the filing of any such petition against it.



Section 7.4 Taxes and Assessments. The Project is comprised of three (3) parcels which
constitute separate tax lots and do not constitute a portion of any other tax lot. There are no
pending or, to Borrower’s best knowledge, proposed, special or other assessments for public
improvements or otherwise affecting the Project, nor are there any contemplated improvements to the
Project that may result in such special or other assessments.



Section 7.5 Other Agreements; Defaults. Neither Borrower nor any Borrower Party is a party to
any agreement or instrument or subject to any court order, injunction, permit, or restriction which
might adversely affect the Project or the business, operations, or condition (financial or
otherwise) of Borrower or any Borrower Party. Neither Borrower nor any Borrower Party is in
violation of any agreement which violation would have an adverse effect on the Project, Borrower,
or any Borrower Party or Borrower’s or any Borrower Party’s business, properties, or assets,
operations or condition, financial or otherwise.




Section 7.6 Compliance with Law.



(1) Borrower and each Borrower Party have (or shall timely obtain) all requisite licenses,
permits, franchises, qualifications, certificates of occupancy or other governmental authorizations
to own, lease and operate the Project and carry on its business, and will take all actions
necessary to obtain such approvals to establish and sell condominium units at the Project. The
Project is in compliance in all material respects with all applicable legal requirements, and to
the best knowledge and belief of Borrower and subject to information disclosed to Administrative
Agent in structural reports provided to Administrative Agent prior to closing, is free of material
defects, and all building systems contained therein are generally in good working order, subject to
ordinary wear and tear. The Project constitutes a legally non-conforming use under applicable
legal requirements;



(2) No condemnation has been commenced or, to Borrower’s knowledge, is contemplated with
respect to all or any portion of the Project or for the relocation of roadways providing access to
the Project; and


 


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(3) The Project has adequate rights of access to public ways and, except as would not
reasonably be expected to have any Material Adverse Effect, is served by adequate water, sewer,
sanitary sewer and storm drain facilities. All public utilities necessary or
convenient to the full use and enjoyment of the Project are located in the public right-of-way
abutting the Project, and all such utilities are connected so as to serve the Project without
passing over other property, except to the extent such other property is subject to an easement for
such utility benefiting the Project. All roads necessary for the full utilization of the Project
for its current purpose have been completed and, dedicated to public use and accepted by all
governmental authorities.



Section 7.7 Location of Borrower. Borrower’s principal place of business and chief executive
offices are located at the address stated in Section 12.1.



Section 7.8 ERISA. Borrower has not established any pension plan for employees which would
cause Borrower to be subject to the ERISA.



Section 7.9 Margin Stock. No part of proceeds of the Loans will be used for purchasing or
acquiring any “margin stock” within the meaning of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.



Section 7.10 Tax Filings. Borrower and each Borrower Party have filed (or have obtained
effective extensions for filing) all federal, state and local tax returns required to be filed and
have paid or made adequate provision for the payment of all federal, state and local taxes, charges
and assessments payable by Borrower and each Borrower Party, respectively.



Section 7.11 Solvency. Giving effect to the Loans, the fair saleable value of Borrower’s
assets exceeds and will, immediately following the making of the Loans, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent
liabilities. The fair saleable value of Borrower’s assets is and will, immediately following the
making of the Loans, be greater than Borrower’s probable liabilities, including the maximum amount
of its contingent liabilities on its Debts as such Debts become absolute and matured. Borrower’s
assets do not and, immediately following the making of the Loans will not, constitute unreasonably
small capital to carry out its business as conducted or as proposed to be conducted. Borrower does
not intend to, and does not believe that it will, incur Debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such Debts as they mature (taking into
account the timing and amounts of cash to be received by Borrower and the amounts to be payable on
or in respect of obligations of Borrower).



Section 7.12 Full and Accurate Disclosure. No statement of fact made by or on behalf of
Borrower or any Borrower Party in this Agreement or in any of the other Loan Documents or in any
certificate, statement or questionnaire prepared and delivered by Borrower or any Borrower Party in
connection with the Loans contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not misleading. There is no
fact presently known to Borrower or any Borrower Party which has not been disclosed to the
Administrative Agent which adversely affects, nor as far as Borrower can foresee, might adversely
affect, the Project or the business, operations or condition (financial or otherwise) of Borrower
or any Borrower Party.



Section 7.13 Single Purpose Entity. Borrower is and has at all times since its formation been
a Single Purpose Entity.


 


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Section 7.14 Management of the Project. The Building Conversion is being managed solely by
Project Manager. From and after the Hotel Opening, the Hotel Improvements shall be operated solely
by the Hotel Manager pursuant to the Hotel Management Agreement.



Section 7.15 No Conflicts. The execution, delivery and performance of this Agreement and the
other Loan Documents by Borrower and each Borrower Party will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any Lien (other than pursuant to the Loan Documents) upon any of the
property or assets any such party pursuant to the terms of any indenture, mortgage, deed of trust,
loan agreement, operating agreement or other agreement or instrument to which Borrower or any
Borrower Party is a party or by which any of property or assets of Borrower or any Borrower Party
is subject, nor will such action result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body having jurisdiction over
Borrower or any Borrower Party or any properties or assets of Borrower or any Borrower Party, and
any consent, approval, authorization, order, registration or qualification of or with any court or
any such regulatory authority or other governmental agency or body required for the execution,
delivery and performance by Borrower or any Borrower Party of this Agreement or any other Loan
Documents has been obtained and is in full force and effect.



Section 7.16 Title. Borrower has good, marketable and insurable title to the Project, free
and clear of all Liens whatsoever, except for the Permitted Encumbrances and such other Liens as
are permitted pursuant to the Loan Documents. The Mortgage creates (and upon the recordation
thereof and of any related financing statements there will be perfected) (1) a valid Lien on the
Project, subject only to Permitted Encumbrances; and (2) security interests in and to, and
collateral assignments of, all personality (including the leases), all in accordance with the terms
thereof, in each case subject only to any applicable Permitted Encumbrances and such other Liens as
are permitted pursuant to the Loan Documents. There are no claims for payment for work, labor or
materials affecting the Project which are or may become a Lien prior to, or of equal priority with,
the Liens created by the Loan Documents. None of the Permitted Encumbrances, individually or in
the aggregate, materially interfere with the benefits of the security intended to be provided by
the Mortgage and this Agreement, materially and adversely affect the value of the Project, impair
the use or operations of the Project or impair Borrower’s ability to pay its obligations in a
timely manner.



Section 7.17 Flood Zone. Project is located in an area identified by the Secretary of Housing
and Urban Development or any successor thereto as an area having special flood hazards pursuant to
the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National
Flood Insurance Act of 1994, as amended, or any successor law.



Section 7.18 Insurance. Borrower has obtained and has delivered to the Administrative Agent
certificates of insurance or certified copies of all of the insurance policies for the Project
reflecting the insurance coverages, amounts and other insurance requirements set forth in this
Agreement. No claims have been made under any such policy, and no Person, including Borrower, has
done, by act or omission, anything which would impair the coverage of any such policy.


 


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Section 7.19 Certificate of Occupancy; Licenses. All Licenses required under Applicable Law
to have been obtained on or before the date hereof have been obtained and are in full force and
effect. Borrower shall also timely obtain in accordance with Applicable Law all Licenses required
to be obtained subsequent to the date hereof, and shall keep and maintain all Licenses in full
force and effect as required by Applicable Law.



Section 7.20 Physical Condition. As of the date hereof (except with respect to the work
necessary in order to achieve Construction Completion), and thereafter upon Construction
Completion, the Project, including, without limitation, all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, shall be in good condition, order
and repair in all material respects. To Borrower’s knowledge, there exists no structural or other
material defects or damages in the Project, whether latent or otherwise, and Borrower has not
received written notice from any insurance company or bonding company of any defects or
inadequacies in the Project, or any part thereof, which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon or of any termination
or threatened termination of any policy of insurance or bond.



Section 7.21 Boundaries. Except as disclosed on the Survey, all of the Improvements lie
wholly within the boundaries and building restriction lines of the Project, and no improvements on
adjoining properties encroach upon the Project, and no Improvements encroach upon or violate any
easements or other encumbrances upon the Project, so as to materially adversely affect the value or
marketability of the Project, except those which are insured against by title insurance.




Section 7.22 Material Agreements.



(1) Borrower has delivered to the Administrative Agent a true, correct and complete copy of
the Project Management Agreement, and such agreement has not been modified, supplemented or
terminated in any way and remains in full force and effect. The Project Management Agreement is
the only project management agreement in existence with respect to the subject matter thereof.
Neither party to such agreement is in default under such agreement and the Project Manager has no
defense, offset right or other right to withhold performance under or terminate such agreement.



(2) Borrower has delivered to the Administrative Agent a true, correct and complete copy of
the Hotel Management Agreement, and such agreement has not been modified, supplemented or
terminated in any way and remains in full force and effect. The Hotel Management Agreement is the
only hotel management agreement in existence with respect to the operation or management of the
hotel to be opened at the Project. Neither party to such agreement is in default under such
agreement and the Hotel Manager has no defense, offset right or other right to withhold performance
under or terminate such agreement.



(3) Borrower has delivered to the Administrative Agent a true, correct and complete copy of
the Technical Services Agreement, and such agreement has not been modified, supplemented or
terminated in any way and remains in full force and effect. The Technical
Services Agreement is the only technical services agreement in existence with respect to the
Project. Neither party to such agreement is in default under such agreement and Hotel Manager has
no defense, offset right or other right to withhold performance under or terminate such agreement.


 


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(4) Borrower has delivered to the Administrative Agent a true, correct and complete copy of
the Construction Management Contract, and such agreement has not been modified, supplemented or
terminated in any way and remains in full force and effect. The Construction Management Contract
is the only construction management or general contractor contract in existence with respect to the
Building Conversion. Neither party to such agreement is in default under such agreement and the
Construction Manager has no defense, offset right or other right to withhold performance under or
terminate such agreement



(5) Borrower has delivered to the Administrative Agent a true, correct and complete copy of
the Forward Purchase Contract, and such agreement has not been modified, supplemented or terminated
in any way and remains in full force and effect. None of the parties to such agreement are in
default under such agreement and none of the parties to such agreement has any defense, offset
right or other right to withhold performance under or terminate such agreement.



Section 7.23 Project Budget. Schedule 7.23 hereto sets forth a true, correct and
complete copy of the Project Budget. The amounts and allocations set forth in the Project Budget,
as it may be amended in accordance with the terms of this Agreement, present a full, complete and
good faith representation of all costs, expenses and fees required to achieve Construction
Completion, to pay pre-opening costs associated with the Hotel Opening, to pay interest on the
Loans and Operating Expenses through the Hotel Opening, and to pay costs in connection with the
marketing and sale of the Units.1 Borrower is unaware of any other such costs, expenses
or fees which are material and are not included within the Project Budget.



Section 7.24 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or
other amounts in the nature of transfer taxes required to be paid by any Person under applicable
legal requirements currently in effect in connection with the transfer of the Project to Borrower
or any transfer of a controlling interest in Borrower have been paid. All mortgage, mortgage
recording, stamp, intangible or other similar tax required to be paid by any Person under
applicable legal requirements currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgage, have been paid and, under current legal requirements,
the Mortgage is enforceable in accordance with its terms by the Administrative Agent or any
subsequent holder thereof (on behalf of the Lenders), subject to applicable bankruptcy, insolvency,
or similar laws generally affecting the enforcement of creditors’ rights.



Section 7.25 Investment Company Act. Borrower is not (1) an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940,
as amended; (2) a “holding company” or a “subsidiary
company” of a “holding company” or an “affiliate” of either a “holding company” or a
“subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as
amended; or (3) subject to any other federal or state law or regulation which purports to restrict
or regulate its ability to borrow money.





 





	 	 	 
	1	 	Eurohypo to confirm.



 


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Section 7.26 Patriot Act; Foreign Assets Control Regulations. Neither the execution and
delivery of this Agreement, the Notes and the other Loan Documents by Borrower or any Borrower
Party nor the use of the proceeds of the Loans, will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or the Anti-Terrorism Order or any enabling legislation
or executive order relating to any of the same. Without limiting the generality of the foregoing,
neither Borrower, any direct or indirect owner of any interest in Borrower; (a) is listed on any
Government Lists; (b) is a person who has been determined by competent authority to be subject to
the prohibitions contained in Anti-Terrorism Order or any other similar prohibitions contained in
the rules and regulations of OFAC or in any enabling legislation or other Executive Order of the
President of the United States in respect thereof; (c) has been previously indicted for or
convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act
Offenses; (d) is currently under investigation by any governmental authority for alleged criminal
activity; or (e) has a reputation in the community for criminal or unethical behavior.




Section 7.27 Organizational Structure.



(1) Borrower has heretofore delivered to the Administrative Agent a true and complete copy of
the Organizational Documents of Borrower and each Borrower Party. The only member of Borrower is
the Sole Member, and there is no manager of Borrower other than the Sole Member. There are no
outstanding equity rights with respect to Borrower.



(2) The only members of Sole Member on the date hereof are Mondrian Miami Investment LLC, a
Delaware limited liability company, and Sanctuary West Avenue, LLC, a Delaware limited liability
company. The Sole Member is managed by both of its members. There are no outstanding equity
rights with respect to Sole Member.



(3) Schedule 7.27 contains a true and accurate chart reflecting the ownership of all
of the direct and indirect equity interests in Borrower, the Sole Member and the Junior Mezzanine
Borrower, including the percentage of ownership interest of the Persons shown thereon.




Section 7.28 Property Specific Representations.



(1) Neither the Project nor any part thereof is now damaged or injured as a result of any
fire, explosion, accident, flood or other casualty.



(2) The Project is zoned RM-3, which permits the current operation of the Project as a
335-unit apartment facility with 177 parking spaces as a legal non-conforming use; and does not
restrict conversion of the Project to a 335-unit hotel condominium project with adequate space at
the Project for 177 parking spaces and 29 or more boat slips.


 


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(3) There are currently 177 parking spaces located on the Project. Without limiting the
representations of Borrower set forth in Sections 7.6 and 7.19, the Project
complies with all applicable zoning and land use laws, rules, regulations as a legal nonconforming
use and complies with all material Licenses.



(4) The repair and replacement of the exterior windows and sliding doors at the Project as
required to be accomplished by Borrower under the Existing Loan Agreement has been satisfactorily
completed by Borrower.



(5) The repairs to the Project as set forth on Schedule 9.24(a) of the Existing Loan Agreement
as required to be completed by Borrower under the Existing Loan Agreement have been satisfactorily
completed by Borrower.



(6) The Building Conversion has been effectuated through the Amendment Closing Date, in
compliance with Applicable Law, including the Condominium Act.



(7) To Borrower’s knowledge, the City of Miami Beach maintains and will continue to maintain
all the roadways providing access to and from the Project, including, but not limited to, access
from West Avenue.



ARTICLE 8




FINANCIAL REPORTING





Section 8.1 Financial Statements.



(1) Monthly Reports. Within twenty (20) days after the end of each calendar month, Borrower
shall furnish to the Lenders a current (as of the calendar month just ended) balance sheet, a
detailed operating statement (showing monthly activity and year to date) stating Operating
Revenues, Operating Expenses, operating income, and Net Operating Cash Flow for the calendar month
just ended, a general ledger, an updated rent roll and, as requested by the Administrative Agent,
copies of bank statements and bank reconciliations and other documentation supporting the
information disclosed in the most recent financial statements.



(2) Quarterly Reports. Within forty-five (45) days after the end of each calendar quarter,
Borrower shall furnish to the Lenders, a detailed operating statement (showing quarterly activity
and year to date) stating Operating Revenues, Operating Expenses, Net Operating Cash Flow,
operating income, and capital improvements for the calendar quarter just ended, and a balance sheet
for such quarter for Borrower. Borrower’s quarterly statements, which shall be prepared on an
accrual basis, shall be accompanied by (a) a current rent roll for the Project and a list of all
sales of Units; (b) a statement of the balance in each of the Reserve Funds and Security Accounts;
and (c) a certificate executed by an Authorized Officer of Borrower or the Sole Member stating that
each such quarterly statement presents fairly the financial condition and the results of operations
of Borrower and the Project.


 


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(3) Annual Reports. Within one hundred and twenty (120) days after the end of each fiscal
year of Borrower’s operation of the Project, Borrower will furnish to the Lenders a complete copy
of Borrower’s and Guarantors’ annual financial statements which shall be
substantially in the form provided the Administrative Agent in connection with the closing of
the Loan and, in the case of Borrower’s financial statements, shall have been prepared in
accordance with general accepted accounting principles (consistently applied) and certified by an
independent certified public accountant reasonably acceptable to the Administrative Agent. Such
financial statements shall contain a balance sheet, and in the case of Borrower, a detailed
operating statement stating Operating Revenues, Operating Expenses, operating income and Net
Operating Cash Flow for each of Borrower and the Project. Borrower’s and Guarantors’ annual
financial statements shall be accompanied by a certificate executed by an Authorized Officer
Borrower or the Sole Member, in the case of Borrower, by an Authorized Officer of Morgans LLC, in
the case of Morgans LLC, and by Galbut, in the case of Galbut, stating that each such annual
financial statement presents fairly the financial condition and the results of operations of
Borrower and the Project, in the case Borrower, and the Guarantors, in the case of Guarantors. The
annual financial statements of Borrower required to be delivered pursuant to this Section
8.1(3) may be consolidated with those of other entities owned by Morgans LLC or Sanctuary
Management, provided that such financial statements contain notes clearly identifying each item on
such financial statements which is attributable to the Borrower and the Project.



(4) Certification; Supporting Documentation. Each such financial statement shall be in scope
and detail satisfactory to the Lenders and certified by an Authorized Officer of Borrower.




(5) Unit Sales Reporting Requirements. Borrower shall also furnish to the Lenders:



(a) by the twentieth (20th) day of each month, monthly reports certifying the Units sold to
date, the number of Qualified Purchase Contracts outstanding as of the last day of the preceding
month, the names and addresses of the purchasers thereunder, the Contract Prices for each Unit, the
Units under contract, the aggregate amount deposited into the Condominium Escrow pursuant to each
such Qualified Purchase Contract, whether there are any defaults by either Borrower or any
purchaser under any such Qualified Purchase Contract and whether any event has occurred or is
likely to occur which would cause a default to occur or give the purchaser a right to terminate or
rescind its obligations thereunder; the number of sales closed in the number and designation of the
Units conveyed; the price paid for each such Unit; and the reports and matters set forth at
(c) below;



(b) within twenty (20) days of the last day of each calendar quarter (and at such other times
as the Lenders may reasonably request), report of the escrow agent setting forth all deposits in,
withdrawals from, and the current balance of, the Condominium Escrow; and



 


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(c) a copy of each material report, statement, certification, claim, data, notice or other
communication received, made or delivered by Borrower or a purchaser under a Qualified Purchase
Contract which relates to events that may materially negatively affect Borrower’s or such
purchaser’s obligations and/or performance under the terms of a Qualified Purchase Contract, or
Borrower’s or any Borrower Party’s obligations and/or performance under the Loan Documents,
including, without limitation, the imposition of any penalties or damages, the exercise of any
termination or cancellation rights, the filing of any dispute or litigation or the
failure of Borrower or such purchaser to comply with any of the requirements of a Qualified
Purchase Contract. Any of the foregoing which affects the Qualified Purchase Contracts or a
material portion thereof shall be supplied by Borrower to the Lenders within five (5) days of
occurrence or receipt.




(d) a copy of all budgets and accounting reports recorded and to be filed with the Division of
Florida Land Sales, Condominiums and Mobile Homes.



Section 8.2 Accounting Principles. All financial statements shall be prepared substantially
in the form of the financial statements provided to the Lenders and shall otherwise be reasonably
acceptable to the Lenders.



Section 8.3 Other Information. Borrower shall deliver to the Administrative Agent such
additional information as Administrative Agent may reasonably request regarding Borrower, its
subsidiaries, its business, any Borrower Party, the Sole Member, and the Project within thirty (30)
days after the Administrative Agent’s request therefor.




Section 8.4 Annual Operating Budget.



(1) At least thirty (30) days prior to the commencement of each calendar year, Borrower will
provide to the Administrative Agent their proposed annual operating and capital improvements budget
for such fiscal year for review and approval by the Administrative Agent, which approval shall not
be unreasonably withheld (as so approved for any fiscal year, the “Annual Operating
Budget”).



(2) Borrower shall promptly advise the Administrative Agent and the Lenders of any proposed
changes to the Project Budget to be made from and after the date hereof. Except to the extent
expressly provided in Section 14.1(2), any changes to the Project Budget shall be subject to the
review and approval of the Administrative Agent and the Lenders.



Section 8.5 Audits. The Administrative Agent shall have the right to choose and appoint a
certified public accountant to perform financial audits as it deems necessary. The costs of such
audits shall be paid by Borrower; provided, however, that so long no Event of
Default exists, Borrower shall not be required to pay the cost of more than one such audit in any
Loan Year. Borrower shall permit the Administrative Agent to examine such records, books and
papers of Borrower which reflect upon its financial condition and the income and expense relative
to the Project.


 


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Section 8.6 Access. The Administrative Agent, any of the Lenders and any of their respective
officers, employees and/or agents shall have the right, exercisable as frequently as the
Administrative Agent reasonably determines to be appropriate, during normal business hours (or at
such other times as may reasonably be requested by the Administrative Agent and/or any of the
Lenders), to inspect the Project and (on twenty-four (24) hours prior notice, which may be oral) to
inspect, audit and make extracts from all of Borrower’s records, files and books of account.
Borrower shall deliver any document or instrument reasonably necessary for the Administrative Agent
and/or any of the Lenders, as the Administrative Agent or any of the Lender’s may request, to
obtain records from any service bureau maintaining records for Borrower, and shall maintain
duplicate records or support documentation on media, including,
without limitation, computer tapes and discs owned by Borrower relating to the use or
operation of the Project. At the Administrative Agent’s request, Borrower shall instruct its
banking and other financial institutions to make available to the Administrative Agent and/or any
of the Lenders such information and records concerning the Project as the Administrative Agent
and/or any of the Lenders may reasonably request. Without limiting the generality of the
foregoing, Administrative Agent (on behalf of the Lenders) reserves the right to employ a
construction consultant (the “Construction Consultant”) and any other consultants necessary, in
Administrative Agent’s reasonable judgment, to, review requests for disbursements from the
Construction Completion Fund and inspect all construction and the periodic progress of the same,
the reasonable cost therefor to be borne by Borrower as a loan expense. Borrower shall make
available to Administrative Agent (and/or any of the Lenders) and the Construction Consultant on
reasonable notice during business hours, all documents and other information (including, without
limitation, receipts, invoices, lien waivers and other supporting documentation to substantiate the
costs to be paid with the proceeds of any request for loan advance) which any contractor or other
Person entitled to payment for construction work is required to deliver to Borrower and shall use
its best efforts to obtain any further documents or information reasonably requested by
Administrative Agent (and/or any of the Lenders) or the Construction Consultant in connection with
any Loan or the administration of this Agreement. Borrower acknowledges and agrees that the
Construction Consultant shall have no responsibilities or duties to Borrower, and shall be employed
solely for the benefit of Administrative Agent and the Lenders. No default of Borrower will be
waived by an inspection by Administrative Agent (and/or any of the Lenders) or the Construction
Consultant. In no event will any inspection by Administrative Agent (and/or any of the Lenders) or
the Construction Consultant be a representation that there has been or will be compliance with the
Plans and Specifications or that the construction work is free from defective materials or
workmanship. Any and all provisions of this Agreement in respect of the Construction Consultant
shall be enforceable solely by, and at the option of, Administrative Agent, and Borrower shall not
be a third-party beneficiary thereof. Any and all reports, advice or other information provided by
the Construction Consultant to Administrative Agent and/or any of the Lenders or otherwise produced
by or in the possession of the Construction Consultant shall be confidential and Borrower shall
have no right to obtain or review same.



ARTICLE 9




COVENANTS





Borrower covenants and agrees with the Administrative Agent and the Lenders as follows:



Section 9.1 Due on Sale and Encumbrance; Transfers of Interests. Without the prior written
consent of the Administrative Agent and the Lenders (to the extent required under
Section 12.2):



(1) Borrower nor any other Person having an ownership or beneficial interest in Borrower shall
not (a) directly or indirectly lease (except as expressly provided herein), sell, transfer, convey,
mortgage, pledge, assign, encumber or permit any Lien on the Project, whether
voluntarily, involuntarily, by operation of law or otherwise; or (b) enter into any easement
or other agreement granting rights in or restricting the use or development of the Project;


 


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(2) No new member shall be admitted to or created in Borrower or Sole Member (nor shall any
existing member withdraw from Borrower or Sole Member), and no change in Borrower’s or the Sole
Member’s Organizational Documents shall be effected; and



(3) Borrower shall not allow any Change of Control to occur, or permit any transfer to occur
(whether of equity interests or through any pledge or encumbrance of equity interests, or of the
economic or other benefits therefrom, whether voluntary, involuntary, by operation of law or
otherwise), if any such transfer would result in a Change of Control.



As used in this Section 9.1, “transfer” shall include the sale, transfer,
conveyance, mortgage, pledge, assignment of any legal or beneficial ownership.



Without limiting the foregoing provisions of this Section 9.1, any transfer of a direct or
indirect ownership interest in Borrower or Sole Member shall be further subject to (w) Borrower
providing not less than ten (10) Business Days’ written notice to Administrative Agent of any such
transfer; (x) no Potential Default or Event of Default then existing; (y) the proposed transferee
being a limited liability company, corporation, partnership, joint venture, joint-stock company,
trust or individual approved in writing by each Lender subject to a Limiting Regulation in its
discretion; and (z) payment to the Administrative Agent on behalf of the Lenders of all costs and
expenses incurred by the Administrative Agent or any Lenders in connection with such transfer.
Each Lender at the time subject to a Limiting Regulation shall, within ten (10) Business Days after
receiving such Borrower’s notice of a proposed transfer subject to this Section 9.1,
furnish to Borrower a certificate (which shall be conclusive absent manifest error) stating that it
is subject to a Limiting Regulation, whereupon such Lender shall have the approval right contained
in clause (y) above. Each Lender which fails to furnish such a certificate to Borrower during such
ten (10) Business Day period shall be automatically and conclusively deemed not to be subject to a
Limiting Regulation with respect to such transfer. If any Lender subject to a Limiting Regulation
fails to approve a proposed transferee under clause (y) above (any such Lender being herein called
a “Rejecting Lender”), Borrower, upon three (3) Business Days notice (which may be
delivered at any time within ninety (90) days following delivery to Borrower of a such a
certificate from a Rejecting Lender), may (A) notwithstanding the terms of Section 2.4(4),
prepay such Rejecting Lender’s outstanding Loans, or (B) require that such Rejecting Lender
transfer all of its right, title and interest under this Agreement and such Rejecting Lender’s Note
to any Eligible Assignee or Proposed Lender selected by Borrower that is reasonably satisfactory to
the Administrative Agent if such Eligible Lender or Proposed Lender (x) agrees to assume all of the
obligations of such Rejecting Lender hereunder, and to purchase all of such Rejecting Lender’s
Loans hereunder for consideration equal to the aggregate outstanding principal amount of such
Rejecting Lender’s Loans, together with interest thereon to the date of such purchase (to the
extent not paid by Borrower), and satisfactory arrangements are made for payment to such Rejecting
Lender of all other amounts accrued and payable hereunder to such Rejecting Lender as of the date
of such transfer (including any fees accrued hereunder and any amounts that would be payable under
Section 2.4(4) as if all such Rejecting Lender’s Loans were prepaid in full on such date);
and (y) approves the proposed transferee. Subject to the provisions of Section 12.24, such
Eligible Assignee or Proposed Lender shall be a “Lender”
for all purposes hereunder. Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements of Borrower contained in Section 2.9(5) shall survive for the
benefit of such Rejecting Lender with respect to the time period prior to such replacement.


 


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Section 9.2 Taxes; Charges. Borrower shall pay before any fine, penalty, interest or cost may
be added thereto, and shall not enter into any agreement to defer, any real estate taxes and
assessments, franchise taxes and charges, and other governmental charges that may become a Lien
upon the Project or become payable during the term of the Loans (collectively, the
“Taxes”), and will promptly furnish the Administrative Agent with evidence of such payment;
provided, however, such Borrower’s compliance with Section 4.1 of this
Agreement relating to impounds for taxes and assessments shall, with respect to payment of such
taxes and assessments, be deemed compliance with this Section 9.2. Borrower shall not
suffer or permit the joint assessment of the Project with any other real property constituting a
separate tax lot or with any other real or personal property. Borrower shall pay when due all
claims and demands of mechanics, materialmen, laborers and others which, if unpaid, might result in
a Lien on the Project; however, Borrower may contest the validity of such claims and demands so
long as (1) Borrower notifies the Administrative Agent that it intends to contest such claim or
demand, (2) Borrower provides the Administrative Agent with an indemnity, bond or other security
satisfactory to the Administrative Agent (including an endorsement to the Administrative Agent’s
title insurance policy insuring against such claim or demand) assuring the discharge of Borrower’s
obligations for such claims and demands, including interest and penalties, and (3) Borrower is
diligently contesting the same by appropriate legal proceedings in good faith and at its own
expense and concludes such contest prior to the tenth (10th) day preceding the earlier to occur of
the Maturity Date or the date on which the Project is scheduled to be sold for non payment.



Section 9.3 Control; Management. Except as provided in Section 9.14 and without
limiting the provisions of Section 9.1, there shall be no change in the day-to-day
management and control of Borrower or any Borrower Party without the prior written consent of the
Administrative Agent. Borrower shall manage the sale of Units at the Project and, from and after
Construction Completion, the Hotel Improvements shall be managed solely by Hotel Manager pursuant
to and subject to the terms of the Hotel Management Agreement. Borrower shall not enter into any
other property management or hotel management agreement with respect to the Project, or engage any
property management or hotel manager with respect to the Project, in each case without the
Administrative Agent’s prior written consent, which consent may be withheld in the Administrative
Agent’s sole and absolute discretion. If at any time the Administrative Agent consents to the
appointment or replacement of a property or hotel manager, such Person and Borrower shall, as a
condition of the Administrative Agent’s consent, execute a Manager’s Consent and Subordination of
Management Agreement in the form then used by the Administrative Agent.



Section 9.4 Operation; Maintenance; Inspection. Borrower shall observe and comply with all
Applicable Laws relating to the ownership, use and operation of the Project. Borrower shall
maintain the Project in good condition and promptly repair any damage or casualty. Borrower shall
permit the Administrative Agent and the Lenders and their respective agents, representatives and
employees, upon reasonable prior notice to Borrower, to inspect the Project and conduct such
environmental and engineering studies as the Administrative Agent
may reasonably require, provided such inspections and studies do not materially interfere with
the use and operation of the Project.


 


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Section 9.5 Taxes on Security. Borrower shall pay all taxes, charges, filing, registration
and recording fees, excises and levies payable with respect to the Notes or the Liens created or
secured by the Loan Documents, other than income, franchise and doing business taxes imposed on the
Administrative Agent or any Lender. If there shall be enacted any law (1) deducting the Loans from
the value of the Project for the purpose of taxation, (2) affecting any Lien on the Project, or (3)
changing existing laws of taxation of mortgages, deeds of trust, security deeds, or debts secured
by real property, or changing the manner of collecting any such taxes, Borrower shall promptly pay
to the Administrative Agent, on demand, all taxes, costs and charges for which the Administrative
Agent or any Lender is or may be liable as a result thereof; however, if such payment would be
prohibited by law or would render the Loans usurious, then instead of collecting such payment, the
Administrative Agent may (and on the request of the Majority Lenders shall) declare all amounts
owing under the Loan Documents to be immediately due and payable.



Section 9.6 Legal Existence; Name, Etc. Borrower shall preserve and keep in full force and
effect its existence as a Single Purpose Entity, and each of Borrower and Sole Member shall
preserve and keep in full force and effect its entity status, franchises, rights and privileges
under the laws of the state of its formation, and all qualifications, licenses and permits
applicable to the ownership, use and operation of the Project. In the event there is a conflict
between the Single Purpose Entity requirements contained in this Agreement and the terms of the
Organizational Documents of Borrower and the Sole Member, the Single Purpose Entity requirements
contained in this Agreement shall control. Neither Borrower nor Sole Member shall wind up,
liquidate, dissolve, reorganize, merge, or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of all or substantially all of its assets, or acquire all or
substantially all of the assets of the business of any Person, or permit any subsidiary of Borrower
to do so. Each of Borrower and Sole Member shall conduct business only in its own name and shall
not change its name, identity, or organizational structure, or the location of its chief executive
office or principal place of business unless Borrower (a) shall have obtained the prior written
consent of the Administrative Agent to such change, and (b) shall have taken all actions necessary
or requested by the Administrative Agent to file or amend any financing statement or continuation
statement to assure perfection and continuation of perfection of security interests under the Loan
Documents.




Section 9.7 Affiliate Transactions.



(1) In General. Except as provided in this Section 9.7, Borrowers shall not engage in
any other transaction affecting the Project with an Affiliate of Borrower without the
Administrative Agent’s prior written consent except on arm’s length, market terms. Without
limiting the foregoing, all transactions with Affiliates shall be at arms length and shall be for a
price and terms that are no greater than market terms for similar services.



(2) Sales Commission and Franchise Fee. With respect to the sale of a Unit, Borrower may pay
up to a seven percent (7%) sale commission to Borrower or an Affiliate of
Borrower upon the sale of such Unit. Borrower may pay the Franchise Fee to Morgans Hotel
Group Management LLC.


 


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(3) Approved Mezzanine Loans. Sole Member is permitted to obtain the Existing Mezzanine Loan
and, subject to the terms of the Junior Loan Intercreditor Agreement, the Junior Mezzanine Borrower
is permitted to obtain the Junior Mezzanine Loan.



(4) Other Arrangements. The Administrative Agent acknowledges that Borrower has entered into
the following arrangements with Affiliates of Borrower and that are hereby approved by the
Administrative Agent under the following conditions:



(a) Borrower may use a title insurance agency that is an Affiliate of Sanctuary and an agent
for a national title insurance company; and



(b) An Affiliate of Borrower or Sanctuary Management may serve as a mortgage broker or
mortgage originator for the placement of loans to purchasers of Units, provided that all fees and
other amounts payable in connection with such services shall be paid by the purchasers of such
Units or credited by Borrower to the purchasers of such Units as Special Credits and paid by
Borrower.



Section 9.8 Limitation on Other Debt. Borrower shall not, without the prior written consent
of the Administrative Agent (which consent may be withheld in the Administrative Agent’s sole and
absolute discretion), incur any Debt other than the Loans and the trade and operational debt
described in subsection (o) of the definition of Single Purpose Entity (in the case of
Borrower). Sole Member Borrower shall not, without the prior written consent of the Administrative
Agent (which consent may be withheld in the Administrative Agent’s sole and absolute discretion),
incur any Debt other than the Approved Mezzanine Loans.



Section 9.9 Further Assurances. Borrower shall promptly (1) cure any defects in the execution
and delivery of the Loan Documents, and (2) execute and deliver, or cause to be executed and
delivered, all such other documents, agreements and instruments as the Administrative Agent may
reasonably request to further evidence and more fully describe the collateral for the Loans, to
correct any omissions in the Loan Documents, to perfect, protect or preserve any Liens created
under any of the Loan Documents, or to make any recordings, file any notices, or obtain any
consents, as may be necessary or appropriate in connection therewith.



Section 9.10 Estoppel Certificates. Borrower, within ten (10) Business Days after request,
shall furnish to the Administrative Agent a written statement, duly acknowledged, setting forth or
confirming, as applicable, the amount due on the Loans, the terms of payment of the Loans, the date
to which interest has been paid, whether any offsets or defenses exist against the Loans and, if
any are alleged to exist, the nature thereof in detail, and such other matters as the
Administrative Agent reasonably may request.



Section 9.11 Notice of Certain Events. Borrower shall promptly notify the Administrative
Agent of (1) any Potential Default or Event of Default, together with a detailed statement of the
steps being taken to cure such Potential Default or Event of Default; (2) any notice of default
received by Borrower or any Borrower Party under other obligations relating to the Project or
otherwise material to Borrower’s business; and (3) any threatened or pending
legal, judicial or regulatory proceedings, including any dispute between Borrower and any
governmental authority, affecting Borrower or the Project.


 


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Section 9.12 Indemnification. Borrower hereby agrees to indemnify, defend, protect and hold
harmless the Administrative Agent, each Lender and their respective shareholders, officers,
employees, attorneys, agents, representatives and affiliates (each, an “Indemnified Party”)
from and against any and all losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever,
including the reasonable fees and actual expenses of each Indemnified Party’s counsel, which may be
imposed upon, asserted against or incurred by any of them relating to or arising out of third-party
claims relating to (1) the Project; or; (2) any of the Loan Documents or the transactions
contemplated thereby, including, without limitation, (a) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about any of the Project or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (b) any inspection, review or testing of or with respect to the Project; (c) any
investigative, administrative, mediation, arbitration, or judicial proceeding, whether or not the
Administrative Agent or any Lender is designated a party thereto, commenced or threatened at any
time (including after the repayment of the Loans) in any way related to the execution, delivery or
performance of any Loan Document or to the Project; (d) any proceeding instituted by any Person
claiming a Lien; and (e) any brokerage commissions or finder’s fees claimed by any broker or other
party in connection with the Loans, the Project, or any of the transactions contemplated in the
Loan Documents, including those arising from the joint, concurrent, or comparative negligence of
the Administrative Agent or any Lender, except to the extent any of the foregoing is caused by the
Administrative Agent’s or any Lender’s gross negligence or willful misconduct, in which case the
party to whom the gross negligence or willful misconduct is attributable (but not any other party)
shall not be entitled to the indemnification provided for hereunder to the extent of such gross
negligence or willful misconduct.



Section 9.13 Size of Units. Borrower agrees that the net sellable area as set forth in the
Unit Release Schedule shall constitute and be deemed to be the square footage for each Unit and
shall be used for all purposes under this Agreement.



Section 9.14 Minimum Sales Prices. Borrower shall not permit the sale of any Unit at a
Purchase Price less than the applicable Minimum Sales Price for such Unit.




Section 9.15 Hedge Agreements.



(1) The Borrower shall at all times maintain in full force and effect a Hedge Agreement
satisfactory to the Administrative Agent in its sole and absolute discretion with an Acceptable
Counterparty, which shall be effective on or before the Amendment Closing Date, and shall be
coterminous with the Loan.



(2) Borrower shall collaterally assign to Administrative Agent pursuant to the Hedge Agreement
Pledge all of its right, title and interest to receive any and all payments under the Hedge
Agreement or any replacement Hedge Agreement, as additional security for the Loan Agreement, and
shall deliver to Administrative Agent counterparts of such Hedge Agreement
Pledge executed by the Borrower and by the Acceptable Counterparty and notify the Acceptable
Counterparty of such collateral assignment (either in such Hedge Agreement or by separate
instrument).


 


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(3) Acceptable Counterparty must enter into a written agreement with the Administrative Agent
(i) whereby such Acceptable Counterparty acknowledges the collateral assignment of such Hedge
Agreement to Administrative Agent as additional security for the Loan pursuant to the Hedge
Agreement Pledge, (ii) whereby such Acceptable Counterparty agrees that Administrative Agent shall
have the ability to cure any defaults by the Acceptable Counterparty under the Hedge Agreement and
to maintain the Hedge Agreement in full force and effect after the occurrence of any default by the
Borrower thereunder, (iii) which provides that in no event shall the Administrative Agent be
obligated to perform any of the Borrower’s obligations under the Hedge Agreement, and (iv) which is
otherwise in form and substance acceptable to the Administrative Agent in its sole and absolute
discretion.



(4) If the provider of the Hedge Agreement or any replacement Hedge Agreement ceases to be an
Acceptable Counterparty, for any reason (including in the event of any downgrade, withdrawal or
qualification of the rating of the Acceptable Counterparty below “A” by S&P), Borrower shall obtain
a replacement Hedge Agreement at Borrower’s sole cost and expense within twenty (20) days of
receipt of notice from Administrative Agent or Borrower’s obtaining knowledge that the provider is
no longer an Acceptable Counterparty.



(5) In the event that Borrower fails to purchase and deliver to Administrative Agent the Hedge
Agreement or any replacement Hedge Agreement as and when required hereunder, or fails to maintain
such agreement in accordance with the terms and provisions of this Agreement, Administrative Agent
may purchase the Hedge Agreement or any replacement Hedge Agreement, as applicable, and the cost
incurred by Administrative Agent in purchasing the Hedge Agreement or any replacement Hedge
Agreement, as applicable, shall be paid by Borrower to Administrative Agent with interest thereon
at the Default Rate from the date such cost was incurred by Administrative Agent until such cost is
reimbursed by Borrower to Administrative Agent.



(6) Borrower shall comply with all of its obligations under the terms and provisions of the
Hedge Agreement and any replacement Hedge Agreement. All amounts paid by the Acceptable
Counterparty under any Hedge Agreement to Borrower or Administrative Agent shall be deposited
immediately into the Cash Management Account. Borrower shall take all actions reasonably requested
by Administrative Agent to enforce Administrative Agent’s rights under the Hedge Agreement and any
replacement Hedge Agreement in the event of a default by the Acceptable Counterparty and shall not
waive, amend or otherwise modify any of its rights thereunder.



(7) At such time as the Loan is repaid in full, all of Administrative Agent’s right, title and
interest in the Hedge Agreement and any replacement Hedge Agreement shall terminate and
Administrative Agent shall execute and deliver at Borrower’s sole cost and expense, such documents
as may be required to evidence Administrative Agent’s release of the Hedge Agreement and any
replacement Hedge Agreement and to notify the Acceptable Counterparty of such release.


 


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(8) In connection with any Hedge Agreement, Borrower shall obtain and deliver to the
Administrative Agent an opinion from counsel (which counsel may be in-house counsel for the
Acceptable Counterparty) for the Acceptable Counterparty (in form reasonably satisfactory to the
Administrative Agent and upon which the Administrative Agent, the Lenders and their respective
successors and assigns may rely) which shall provide, in relevant part, that:



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



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



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



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



Section 9.16 No Distributions. Except as expressly provided in Section 14.4, Borrower
shall not make any Distributions to any members of Borrower without the Administrative Agent’s
prior consent.



Section 9.17 Condominium Covenants. In addition to the covenants and agreements made in this
Agreement, Borrower and the Administrative Agent further covenant and agree as follows:



(1) Condominium Obligations. Borrower shall perform or cause to be performed all of
Borrower’s obligations and the obligations of the Association under the Constituent Documents and
the Condominium Act. Borrower shall promptly pay when due, all dues and assessments imposed
pursuant to the Constituent Documents.


 


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(2) Hazard Insurance. So long as the Association maintains casualty insurance through a
“master” or “blanket” policy on the Project which satisfies the requirements of Section 3.1
of this Agreement and is otherwise satisfactory to the Administrative Agent, Borrower’s obligation
under Article 3 to maintain such casualty insurance coverage on the Project shall be
satisfied to the extent that the required coverage is provided by the Association. In the event of
an insured casualty to all or a portion of the Project, insurance proceeds shall be distributed and
utilized in the manner required by the Constituent Documents. In the event of a distribution of
hazard insurance proceeds in lieu of restoration or repair following a loss to the Project, whether
to the unit(s) or to common elements, any proceeds payable to Borrower is hereby assigned and shall
be paid to the Administrative Agent for application to the Loans in accordance with
Article 3 hereof.



(3) Public Liability Insurance. Borrower shall take such actions as may be reasonable to
insure that the Association maintains a public liability insurance policy acceptable in form,
amount and extent of coverage to the Administrative Agent.



(4) Condemnation. The proceeds of any award or claim for damages, direct or consequential,
payable to Borrower in connection with any condemnation or other taking of all or any part of the
Project, whether of the unit(s) or of common elements, or for any conveyance in lieu of
condemnation, are hereby assigned and shall be paid to the Administrative Agent. Such proceeds
shall be applied by the Administrative Agent in accordance with Article 3 of this
Agreement.



(5) Declaration. Borrower hereby represents, warrants, and covenants as follows as to the
Declaration:



(a) Borrower is the Declarant under the Declaration and the owner without encumbrance (other
than under the Loan Documents) of all voting rights under the Declaration, other than the voting
rights associated with Units which have been conveyed prior to the date hereof;



(b) Borrower is the owner of all of the rights granted to the Unsold Units pursuant to the
Constituent Documents, and Borrower has not encumbered any such rights by pledge, hypothecation,
mortgage, deed to secure debt or other security interest, lien or judgment whatsoever except
pursuant to the Security Documents;



(c) Borrower shall at all times collaterally assign its rights as “Declarant” under the
Declaration to the Administrative Agent and upon an Event of Default shall provide proxy rights to
the Administrative Agent; and



(d) None of the Units will be omitted from coverage by the Declaration without the prior
written consent of the Administrative Agent.




Section 9.18 Patriot Act Compliance; Foreign Assets Control Regulations.



(1) Borrower shall comply with the Patriot Act and all applicable legal requirements of
governmental authorities having jurisdiction of Borrower, including those relating to money
laundering and terrorism. The Administrative Agent shall have the right to
audit Borrower’s compliance with the Patriot Act and all applicable legal requirements of
governmental authorities having jurisdiction of Borrower, including those relating to money
laundering and terrorism. In the event that Borrower fails to comply with the Patriot Act or any
such legal requirements of governmental authorities, then the Administrative Agent may, at its
option, declare an Event of Default.


 


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(2) Without limiting the provisions of Section 9.18(1), neither Borrower nor any
Borrower Party shall use the proceeds of the Loans in any manner that will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or the Anti-Terrorism Order or any
enabling legislation or executive order relating to any of the same. Without limiting the
foregoing, neither Borrower nor any Borrower Party will permit itself nor any of its subsidiaries
to (a) become a blocked person described in Section 1 of the Anti-Terrorism Order or (b) knowingly
engage in any dealings or transactions or be otherwise associated with any person who is known by
Borrower or such Borrower Party or who (after such inquiry as may be required by Applicable Law)
should be known by Borrower or such Borrower Party to be a blocked person.



(3) Borrower shall execute and deliver to the Administrative Agent from time to time upon
request a certificate stating that neither Borrower, any Borrower Party, any direct or indirect
owner of any interest in Borrower nor any Borrower Party (a) is listed on any Government Lists,
(b) is a person who has been determined by competent authority to be subject to the prohibitions
contained in the Anti-Terrorism Order or any other similar prohibitions contained in the rules and
regulations of OFAC or in any enabling legislation or other Presidential Executive Orders in
respect thereof, (c) has been previously indicted for or convicted of any felony involving a crime
or crimes of moral turpitude or for any Patriot Act Offenses, (d) is currently under investigation
by any governmental authority for alleged criminal activity, or (e) has a reputation in the
community for criminal or unethical behavior.



Section 9.19 Payment for Labor and Materials. Borrower will promptly pay when due all bills
and costs for labor, materials, and specifically fabricated materials incurred in connection with
the Project and never permit to exist beyond the due date thereof in respect of the Project or any
part thereof any Lien, even though inferior to the Liens of the Loan Documents, and in any event
never permit to be created or exist in respect of the Project or any part thereof any other or
additional Lien other than the Liens or security of the Loan Documents, except for the Permitted
Encumbrances. Notwithstanding the foregoing provisions of this Section 9.19, Borrower may
contest in the validity of any bills and costs for labor, materials, and specifically fabricated
materials incurred in connection with the Project. Any such contest shall be in good faith, be at
Borrower’s own expense and be made by appropriate legal proceedings which shall operate to prevent
the collection thereof or other realization thereon and the sale or forfeiture of the Project or
any part thereof to satisfy the same. As a condition to pursuing any such contest, Borrower shall,
at the Administrative Agent’s option, provide security reasonably satisfactory to the
Administrative Agent, assuring the discharge of Borrower’s obligations thereunder and of any
additional charge, penalty or expense arising from or incurred as a result of such contest.


 


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Section 9.20 Hotel Management Agreement.



(1) Borrower shall (a) perform and observe in all material respects all of its covenants and
agreements contained in the Hotel Management Agreement to which it is a party; (b) take all
reasonable and necessary action to prevent the termination of the Hotel Management Agreement in
accordance with the terms thereof or otherwise; (c) enforce each material covenant or obligation of
the Hotel Management Agreement in accordance with its terms; (d) promptly give the Administrative
Agent copies of any default or other material notices given by or on behalf of Borrower or received
by or on behalf of Borrower from the Hotel Manager; and (e) take all such action to achieve the
purposes described in clauses (a), (b) and (c) of this Section 9.20
as may from time to time be reasonably requested by the Administrative Agent.



(2) Borrower shall not, without the Administrative Agent’s prior written consent (which may be
withheld in the Administrative Agent’s sole and absolute discretion) (a) take any action to (i)
cancel or terminate the Hotel Management Agreement, (ii) replace the Hotel Manager or (iii) appoint
a new hotel manager; (b) sell, assign, pledge, transfer, mortgage, hypothecate or otherwise dispose
of (by operation of law or otherwise) or encumber any part of its interest in the Hotel Management
Agreement; (c) waive any material default under or breach of any material provisions of the Hotel
Management Agreement or waive, fail to enforce, forgive or release any material right, interest or
entitlement, howsoever arising, under or in respect of any material provisions of the Hotel
Management Agreement or vary or agree to the variation in any material way of any material
provisions of the Hotel Management Agreement or of the performance of the Hotel Manager under the
Hotel Management Agreement; (d) petition, request or take any other legal or administrative action
that seeks, or may reasonably be expected, to rescind, terminate or suspend the Hotel Management
Agreement.



(3) Any change in day-to-day management and control of the Hotel Manager shall be cause for
Administrative Agent to re-approve the Hotel Manager and the Hotel Management Agreement (which
approval may be withheld in the Administrative Agent’s sole and absolute discretion). If at any
time the Administrative Agent consents to the appointment of a new hotel manager, such new manager
and Borrower shall, as a condition of Administrative Agent’s consent, execute a Hotel Manager’s
Consent and Subordination of Management Agreement in the form then used by Administrative Agent.
Borrower shall cause the Hotel Manager shall hold and maintain all necessary licenses,
certifications and permits required by law to carry on its duties under the Hotel Management
Agreement. Borrower shall fully perform all of its covenants, agreements and obligations under the
Hotel Management Agreement.



(4) For purposes of this Section 9.20, all references to the Hotel Management Agreement shall
be deemed to include the Technical Services Agreement.




Section 9.21 Americans with Disabilities.



(1) Borrower (a) agrees that it shall use commercially reasonable efforts to ensure that the
Project shall at all times comply with the requirements of the Americans with Disabilities Act of
1990, the Fair Housing Amendments Act of 1988, all state and local laws and ordinances related to
handicapped access and all rules, regulations, and orders issued pursuant thereto including,
without limitation, the Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively, “Access Laws”); and (b) has no actual knowledge as to the
Project’s non-compliance with any Access Laws where, in the case of (a) or

(b) above, the failure to so comply could have a material adverse effect on the Project or on
Borrower’s ability to repay the Loans in accordance with the terms hereof.



 


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(2) Notwithstanding any provisions set forth herein or in any other document regarding the
Administrative Agent’s approval of alterations of the Project, Borrower shall not alter the Project
in any manner which would materially increase Borrower’s responsibilities for compliance with the
applicable Access Laws without the prior written approval of the Administrative Agent. The
foregoing shall apply to tenant improvements constructed by Borrower or by any of its tenants. The
Administrative Agent may condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer, or other person reasonably acceptable to the Administrative
Agent.



(3) Borrower agrees to give prompt notice to the Administrative Agent of the receipt by
Borrower of any written complaints related to violation of any Access Laws with respect to the
Project and of the commencement of any proceedings or investigations which relate to compliance
with applicable Access Laws.



Section 9.22 Zoning. Borrower shall not, without the Administrative Agent’s prior consent,
seek, make, suffer or acquiesce in any change or variance in any zoning or land use laws or other
conditions of use of the Project or any portion thereof. Borrower shall not use or permit the use
of any portion of the Project in any manner that could result in such use becoming an illegal
non-conforming use under any zoning or land use law or any other Applicable Law or modify any
agreements relating to zoning or land use matters or with the joinder or merger of lots for zoning,
land use or other purposes, without the prior written consent of the Administrative Agent. Without
limiting the foregoing, in no event shall Borrower take any action that would reduce or impair
below applicable requirements (a) the number of parking spaces at the Improvements or (b) access to
the Project from adjacent public roads.



Section 9.23 ERISA. Borrower shall not take any action, or omit to take any action, which
would (a) cause Borrower’s assets to constitute “plan assets” for purposes of ERISA or the Code or
(b) cause the Transactions to be a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject the Administrative Agent
and/or the Lenders, on account of any Loan or execution of the Loan Documents hereunder, to any tax
or penalty on prohibited transactions imposed under Section 4975 of the Code or Section 502(i) of
ERISA.




Section 9.24 Property Specific Covenants.



(1) Borrower shall pay to the title company any fees or charges imposed by the title company
in connection with amending the mortgagee title policy issued in favor of Administrative Agent as a
result of the Building Conversion, including, but not limited to the costs of obtaining updated
title searches, date-down endorsement, a “condominium” endorsement and an endorsement modifying the
insured legal description.


 


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(2) Without the prior written consent of Administrative Agent, Borrower shall not amend,
modify or terminate its Organizational Documents or the Project Management
Agreement or the Technical Services Agreement, replace the Project Manager or Hotel Manager or
appoint a new project manager or technical services advisor.



(3) The renovations at the Project shall not constitute a “Level 3” alteration as defined in
the Florida Building Code nor violate what is commonly known as the “50% Rule.”



Section 9.25 Construction Management Contract. Borrower shall not, without Administrative
Agent’s prior consent: (a) take any action to cancel or terminate any material right under the
Construction Management Contract; (b) waive any material default under or breach of any material
provisions of the Construction Management Contract, or waive, forgive, release or fail to enforce
any material right thereunder; (c) amend or modify any material provision of, or give any consent
under, the Construction Management Contract; or (d) enter into any other construction management or
general contractor contract with respect to the Building Conversion or the Project.



ARTICLE 10




EVENTS OF DEFAULT





Each of the following shall constitute an “Event of Default” under the Loans:



Section 10.1 Payments. Borrower’s failure to (1) pay any regularly scheduled installment of
principal or interest or other amount within five (5) days of (and including) the date when due as
required under the Loan Documents or (2) make a deposit of cash or pay any other amount due
hereunder within five (5) days of (and including) the date when due as required under the Loan
Documents; or (3) pay the Loans at the Maturity Date, whether by acceleration or otherwise.



Section 10.2 Insurance. Borrower’s failure to maintain insurance as required under
Section 3.1 of this Agreement.



Section 10.3 Single Purpose Entity. If Borrower (i) violates any of the provisions set forth
in clauses (a), (b), (c), (d), (e), (g),
(j), (o), (p), (q), (t), (w), (z) or (bb)
of the definition of “Single Purpose Entity”; or (2) violates any of the provisions clauses
(f), (h), (i), (k), (l), (m), (n), (r),
(s), (u), (v), (x), (y) or (aa) of the definition
of “Single Purpose Entity” and, in the case of this clause (ii) such violation is not cured with
thirty (30) days of the date that any officer of Borrower or any Borrower Party obtains knowledge
of such violation.




Section 10.4 Taxes. If any of the Taxes are not paid when the same are due and payable.



Section 10.5 Sale, Encumbrance, Etc.; Change of Control. The sale, transfer, conveyance,
pledge, mortgage or assignment of any part or all of the Project, or any interest therein, or of
any interest in Borrower, in violation of Section 9.1 of this Agreement, or the occurrence
of any Change of Control in violation of Section 9.1.



Section 10.6 Representations and Warranties. Any representation or warranty made in any Loan
Document proves to be untrue in any material respect when made or deemed made.


 


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Section 10.7 Other Encumbrances. Any default (beyond applicable cure periods) under any
document or instrument, other than the Loan Documents, evidencing or creating a Lien on the Project
or any part thereof.



Section 10.8 Various Covenants. Any default of Borrower under any of its obligations under
any of Sections 6.2 (pertaining to lease approvals), 9.3 (management of the
Project), 9.8 (limitations on debt), 9.18 (Patriot Act compliance), 9.22
(zoning and use changes), 9.23 (ERISA), 14.1(1) (Completion of Building
Conversion), 14.1(3) (Completion of Building Conversion) or 14.4 (Application of
Net Cash Sales Proceeds) of this Agreement.



Section 10.9 Involuntary Bankruptcy or Other Proceeding. Commencement of an involuntary case
or other proceeding against Borrower or any other Borrower Party or any other Person having an
ownership or security interest in the Project (each, a “Bankruptcy Party”) which seeks
liquidation, reorganization or other relief with respect to such Person or its Debts or other
liabilities under any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeks the appointment of a trustee, receiver, liquidator, custodian or other similar official of it
or any of its property, and such involuntary case or other proceeding shall remain undismissed or
unstayed for a period of sixty (60) days, or an order for relief against a Bankruptcy Party shall
be entered in any such case under the Bankruptcy Code (an “Involuntary Proceeding”).



Section 10.10 Voluntary Petitions, Etc. Commencement by a Bankruptcy Party of a voluntary
case or other proceeding seeking liquidation, reorganization or other relief with respect to itself
or its Debts or other liabilities under any bankruptcy, insolvency or other similar law or seeking
the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or
any of its property, or consent by a Bankruptcy Party to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other proceeding commenced
against it, or the making by a Bankruptcy Party of a general assignment for the benefit of
creditors, or the failure by a Bankruptcy Party, or the admission by a Bankruptcy Party in writing
of its inability, to pay its Debts generally as they become due, or any action by a Bankruptcy
Party to authorize or effect any of the foregoing (a “Voluntary Proceeding”).



Section 10.11 Indebtedness. Any of Borrower or Sole Member, or any combination thereof, shall
default in the payment when due of any principal of or interest on any of its other Debt
aggregating $500,000 or more and such default shall not be cured within any applicable notice or
cure period provided with respect thereto; or any event specified in any note, agreement, indenture
or other document evidencing or relating to any such Debt shall occur if the effect of such event
is to cause, or (with the giving of any notice or the lapse of time or both) to permit the holder
or holders of such Debt to cause, such Debt to become due or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise) prior to its stated maturity.



Section 10.12 Dissolution. Any Borrower Party shall be terminated, dissolved or liquidated
(as a matter of law or otherwise) or proceedings shall be commenced by any Person (including any
Borrower Party) seeking the termination, dissolution or liquidation of any Borrower Party, which,
in the case of actions by Persons other than a Borrower Party or any of their Affiliates, shall
continue unstayed and in effect for a period of sixty (60) or more days.


 


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Section 10.13 Judgments. One or more (a) final, non-appealable judgments for the payment of
money (exclusive of judgment amounts fully covered by insurance where the insurer has admitted
liability in respect of such judgment) shall be rendered against Borrower or Sole Member in an
amount aggregating in excess of $1,000,000; or (b) non-monetary judgments, orders or decrees shall
be entered against Borrower or Sole Member which have or would reasonably be expected to have a
Material Adverse Effect, and, in either case, the same shall remain undischarged for a period of
sixty (60) consecutive days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any assets of such Borrower or
Sole Member, as the case may be, to enforce any such judgment.



Section 10.14 Security. The Liens created by the Security Documents shall at any time not
constitute a valid and perfected first priority Lien (subject to the Permitted Encumbrances) on the
collateral intended to be covered thereby in favor of the Administrative Agent, free and clear of
all other Liens (other than the Permitted Encumbrances and Liens being contested in accordance with
the terms of Section 9.19), or, except for expiration in accordance with its terms, any of
the Security Documents shall for whatever reason be terminated or cease to be in full force and
effect, or the enforceability thereof shall be contested by Borrower or any Borrower Party or any
of their Affiliates;



Section 10.15 Guarantees. Any Guarantee shall (1) default under any Guarantee beyond any
applicable notice and grace period provided for therein, or (2) revoke or attempt to revoke,
contest or commence any action against its obligations under any Guarantee.



Section 10.16 Security Accounts. Borrower uses, or permits the use of, funds from the
Security Accounts for any purpose other than the purpose for which such funds were disbursed from
the Security Accounts.



Section 10.17 Hedge Agreement. The Acceptable Counterparty shall default under any Hedge
Agreement and such default is not cured within the applicable notice and cure periods provided
therein.



Section 10.18 Junior Loan Intercreditor Agreement. Any failure by any of Borrower, Sole
Member, Junior Mezzanine Borrower or Junior Mezzanine Lender to perform or observe any the
agreements and covenants contained in the Junior Loan Intercreditor Agreement.



Section 10.19 Covenants. Borrower’s failure to perform or observe any of the agreements and
covenants contained in this Agreement or in any of the other Loan Documents and not specified
above, and the continuance of such failure for ten (10) days after notice by the Administrative
Agent to Borrower; provided, however, subject to any shorter period for curing any
failure by Borrower as specified in any of the other Loan Documents, Borrower shall have an
additional thirty (30) days to cure such failure if (1) such failure does not involve the failure
to make payments on a monetary obligation; (2) such failure cannot reasonably be cured within ten
(10) days; (3) Borrower is diligently undertaking to cure such default, and (4) Borrower has
provided the Administrative Agent with security reasonably satisfactory to the Administrative Agent
against any interruption of payment or impairment of collateral as a result of such continuing
failure.




 


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ARTICLE 11




REMEDIES




Section 11.1 Remedies – Insolvency Events. Upon the occurrence of any Event of Default
described in Section 10.9 or 10.10, all amounts due under the Loan Documents
immediately shall become due and payable, all without written notice and without presentment,
demand, protest, notice of protest or dishonor, notice of intent to accelerate the maturity
thereof, notice of acceleration of the maturity thereof, or any other notice of default of any
kind, all of which are hereby expressly waived by Borrower and each Borrower Party;
provided, however, if the Bankruptcy Party under Section 10.9 or
10.10 is other than Borrower, then all amounts due under the Loan Documents shall become
immediately due and payable at the Administrative Agent’s election, in the sole discretion of the
Lenders.



Section 11.2 Remedies – Other Events. Except as set forth in Section 11.1 above,
while any Event of Default exists, the Administrative Agent may (1) by written notice to Borrower,
declare the entire amount of the Loans to be immediately due and payable without presentment,
demand, protest, notice of protest or dishonor, notice of intent to accelerate the maturity
thereof, notice of acceleration of the maturity thereof, or other notice of default of any kind,
all of which are hereby expressly waived by Borrower and each Borrower Party; (2) terminate the
obligation, if any, of the Lenders to advance amounts hereunder; and (3) exercise all rights and
remedies therefore under the Loan Documents and at law or in equity.



Section 11.3 Administrative Agent’s Right to Perform the Obligations. If Borrower shall fail,
refuse or neglect to make any payment or perform any act required by the Loan Documents, then while
any Event of Default exists, and without notice to or demand upon Borrower and without waiving or
releasing any other right, remedy or recourse the Administrative Agent or any Lender may have
because of such Event of Default, the Administrative Agent may (but shall not be obligated to) make
such payment or perform such act for the account of and at the expense of Borrower, and shall have
the right to enter upon the Project for such purpose and to take all such action thereon and with
respect to the Project as it may deem necessary or appropriate. If the Administrative Agent shall
elect to pay any sum due with reference to the Project, the Administrative Agent may do so in
reliance on any bill, statement or assessment procured from the appropriate governmental authority
or other issuer thereof without inquiring into the accuracy or validity thereof. Similarly, in
making any payments to protect the security intended to be created by the Loan Documents, the
Administrative Agent shall not be bound to inquire into the validity of any apparent or threatened
adverse title, Lien, encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same. Additionally, if any Hazardous Materials affect or threaten to
affect the Project, the Administrative Agent may (but shall not be obligated to) give such notices
and take such actions as it deems necessary or advisable in order to abate the discharge of any
Hazardous Materials or remove the Hazardous Materials. Borrower shall indemnify, defend and hold
the Administrative Agent and the Lenders harmless from and against any and all losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature whatsoever, including reasonable attorneys’ fees and
disbursements, incurred or accruing by reason of any acts performed by the Administrative Agent or
any Lender pursuant to the provisions of this Section 11.3, including those arising from
the joint, concurrent, or comparative negligence of the Administrative Agent and any Lender,
except as a result of the Administrative Agent’s or any Lender’s gross negligence or willful
misconduct. All sums paid by the Administrative Agent pursuant to this Section 11.3, and
all other sums expended by the Administrative Agent or any Lender to which it shall be entitled to
be indemnified, together with interest thereon at the Default Rate from the date of such payment or
expenditure until paid, shall constitute additions to the Loans, shall be secured by the Loan
Documents and shall be paid by Borrower to the Administrative Agent upon demand.


 


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ARTICLE 12




MISCELLANEOUS




Section 12.1 Notices. Any notice required or permitted to be given under this Agreement shall
be in writing and either shall be (1) mailed by certified mail, postage prepaid, return receipt
requested; (2) sent by overnight air courier service; (3) personally delivered to a representative
of the receiving party; or (4) sent by telecopy (provided an identical notice is also sent
simultaneously by mail, overnight courier, or personal delivery as otherwise provided in this
Section 12.1) to the intended recipient at the “Address for Notices” specified below its
name on the signature pages hereof. Any communication so addressed and mailed shall be deemed to
be given on the earliest of (a) when actually delivered; (b) on the first Business Day after
deposit with an overnight air courier service; or (c) on the third Business Day after deposit in
the United States mail, postage prepaid, in each case to the address of the intended addressee, and
any communication so delivered in person shall be deemed to be given when receipted for by, or
actually received by the Administrative Agent, a Lender or Borrower, as the case may be. If given
by telecopy, a notice shall be deemed given and received when the telecopy is transmitted to the
party’s telecopy number specified above, and confirmation of complete receipt is received by the
transmitting party during normal business hours or on the next Business Day if not confirmed during
normal business hours, and an identical notice is also sent simultaneously by mail, overnight
courier, or personal delivery as otherwise provided in this Section 12.1. Any party may
designate a change of address by written notice to each other party by giving at least ten (10)
days’ prior written notice of such change of address.




Section 12.2 Amendments, Waivers, Etc.



(1) Subject to any consents required pursuant to this Section 12.2 and any other
provisions of this Agreement and any other Loan Document which expressly require the consent,
approval or authorization of the Majority Lenders, this Agreement and any other Loan Document may
be modified or supplemented only by an instrument in writing signed by Borrower and the
Administrative Agent; provided that, the Administrative Agent may (without any Lender’s
consent) give or withhold its agreement to any amendments of the Loan Documents or any waivers or
consents in respect thereof or exercise or refrain from exercising any other rights or remedies
which the Administrative Agent may have under the Loan Documents or otherwise provided that such
actions do not, in the Administrative Agent’s judgment reasonably exercised, materially adversely
affect the value of any collateral, taken as a whole, or represent a departure from Administrative
Agent’s standard of care described in Section 15.5 (and the assignment or granting of a
participation by Eurohypo shall not limit or otherwise affect its discretion in



 


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respect of any of
the foregoing), except that the Administrative Agent will not, without the consent of each Lender, agree to the following (provided that no
Lender’s consent shall be required for any of the following which are otherwise required or
contemplated under the Loan Documents): (a) reduce the principal amount of the Loans or reduce the
interest rate thereon; (b) extend any stated payment date for principal of or interest on the Loans
payable to such Lender; (c) release Borrower, any Joinder Party, any Guarantor or any other party
from liability under the Loan Documents (except for any assigning Lender pursuant to
Section 12.24 and any resigning Administrative Agent pursuant to Section 15.8);
(d) release or subordinate in whole or in part any material portion of the collateral given as
security for the Loans; (e) modify any of the provisions of this Section 12.2, the
definition of “Majority Lenders” or any other provision in the Loan Documents specifying the number
or percentage of Lenders required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder; (f) modify the terms of any Event of Default; or
(g) consent to (i) the sale, transfer or encumbrance of any portion of the Project (or any interest
therein) or any direct or indirect ownership interest therein and (ii) the incurrence by Borrower
of any additional indebtedness secured by the Project, in each case to the extent (and subject to
any standard of reasonability) such consent is required under the Loan Documents. Notwithstanding
the foregoing provisions of this Section 12.2, as between Borrower and Lenders,
notification by Administrative Agent to Borrower of Administrative Agent’s consent to any of the
matters set forth in clauses (a) through and including (g) of the preceding sentence shall be
deemed to be the consent of each Lender to such matter.



(2) Notwithstanding anything to contrary contained in this Agreement, any modification or
supplement of Article 15, or of any of the rights or duties of the Administrative Agent
hereunder, shall require the consent of the Administrative Agent.



Section 12.3 Limitation on Interest. It is the intention of the parties hereto to conform
strictly to applicable usury laws. Accordingly, all agreements between Borrower, the
Administrative Agent and the Lenders with respect to the Loans are hereby expressly limited so that
in no event, whether by reason of acceleration of maturity or otherwise, shall the amount paid or
agreed to be paid to the Administrative Agent or any Lender or charged by any Lender for the use,
forbearance or detention of the money to be lent hereunder or otherwise, exceed the maximum amount
allowed by law. If the Loans would be usurious under Applicable Law (including the laws of the
State, the laws of the State of New York and the laws of the United States of America), then,
notwithstanding anything to the contrary in the Loan Documents: (1) the aggregate of all
consideration which constitutes interest under Applicable Law that is contracted for, taken,
reserved, charged or received under the Loan Documents shall under no circumstances exceed the
maximum amount of interest allowed by Applicable Law, and any excess shall be credited on the Notes
by the holders thereof (or, if the Notes have been paid in full, refunded to Borrower); and (2) if
maturity is accelerated by reason of an election by the Administrative Agent in accordance with the
terms hereof, or in the event of any prepayment, then any consideration which constitutes interest
may never include more than the maximum amount allowed by Applicable Law. In such case, excess
interest, if any, provided for in the Loan Documents or otherwise, to the extent permitted by
Applicable Law, shall be amortized, prorated, allocated and spread from the date of advance until
payment in full so that the actual rate of interest is uniform through the term hereof. If such
amortization, proration, allocation and spreading is not permitted under Applicable Law, then such
excess interest shall be cancelled automatically as of the date of such acceleration or prepayment
and, if theretofore paid, shall be
credited on the Notes (or, if the Notes have been paid in full, refunded to Borrower). The
terms and provisions of this Section 12.3 shall control and supersede every other provision
of the Loan Documents. The Loan Documents are contracts made under and shall be construed in
accordance with and governed by the laws of the State of New York, except that if at any time the
laws of the United States of America permit the Lenders to contract for, take, reserve, charge or
receive a higher rate of interest than is allowed by the laws of the State of New York (whether
such federal laws directly so provide or refer to the law of any state), then such federal laws
shall to such extent govern as to the rate of interest which the Lenders may contract for, take,
reserve, charge or receive under the Loan Documents.


 


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Section 12.4 Invalid Provisions. If any provision of any Loan Document is held to be illegal,
invalid or unenforceable, such provision shall be fully severable; the Loan Documents shall be
construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a
part thereof; the remaining provisions thereof shall remain in full effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance therefrom; and in
lieu of such illegal, invalid or unenforceable provision there shall be added automatically as a
part of such Loan Document a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible to be legal, valid and enforceable.



Section 12.5 Reimbursement of Expenses. Borrower shall pay or reimburse the Administrative
Agent and/or the Lenders on demand of the applicable party for: (1) all expenses incurred by the
Administrative Agent in connection with the Loans, including fees and expenses of the
Administrative Agent’s attorneys, environmental, engineering and other consultants, and fees,
charges or taxes for the negotiation, recording or filing of Loan Documents, (2) all expenses of
the Administrative Agent in connection with the administration of the Loans, including audit costs,
inspection fees, attorneys’ fees and disbursement, settlement of condemnation and casualty awards,
and premiums for title insurance and endorsements thereto, (3) all of the Administrative Agent’s
reasonable costs and expenses (including reasonable fees and disbursements of the Administrative
Agent’s external counsel) incurred in connection with the syndication of the Loans to the Lenders
and the actions taken pursuant to Section 12.10 (provided, however, that Borrower’s
obligation to reimburse the Administrative Agent’s costs and expenses incurred in the Syndication
of the Loans or the splitting, modification, componentization or other severance of the Loans
pursuant to Section 12.27(2) shall not exceed $15,000), and (4) the Administrative Agent
and the Lenders for all amounts expended, advanced or incurred by the Administrative Agent and the
Lenders to collect the Notes, or to enforce the rights of the Administrative Agent and the Lenders
under this Agreement or any other Loan Document, or to defend or assert the rights and claims of
the Administrative Agent and the Lenders under the Loan Documents or with respect to the Project
(by litigation or other proceedings), which amounts will include all court costs, attorneys’ fees
and expenses, fees of auditors and accountants, and investigation expenses as may be incurred by
the Administrative Agent and the Lenders in connection with any such matters (whether or not
litigation is instituted), together with interest at the Default Rate on each such amount from the
date of disbursement until the date of reimbursement to the Administrative Agent and the Lenders,
all of which shall constitute part of the Loans and shall be secured by the Loan Documents.


 


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Section 12.6 Approvals; Third Parties; Conditions. All approval rights retained or exercised
by the Administrative Agent and the Lenders with respect to leases, contracts, plans,
studies and other matters are solely to facilitate the Lenders’ credit underwriting, and shall
not be deemed or construed as a determination that the Lenders have passed on the adequacy thereof
for any other purpose and may not be relied upon by Borrower or any other Person. This Agreement
is for the sole and exclusive use of the Administrative Agent, the Lenders and Borrower and may not
be enforced, nor relied upon, by any Person other than the Administrative Agent, the Lenders and
Borrower. All conditions of the obligations of the Administrative Agent and the Lenders hereunder,
including the obligation to make advances, are imposed solely and exclusively for the benefit of
the Administrative Agent and the Lenders, their successors and assigns, and no other Person shall
have standing to require satisfaction of such conditions or be entitled to assume that the Lenders
will refuse to make advances in the absence of strict compliance with any or all of such
conditions, and no other Person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any and all of which may be freely waived in whole or in part by the
Administrative Agent and the Lenders at any time in their sole discretion.



Section 12.7 Lenders and Administrative Agent Not in Control; No Partnership. None of the
covenants or other provisions contained in this Agreement shall, or shall be deemed to, give the
Administrative Agent or any Lender the right or power to exercise control over the affairs or
management of Borrower, the power of the Administrative Agent and the Lenders being limited to the
rights to exercise the remedies referred to in the Loan Documents. The relationship between
Borrower and the Lenders is, and at all times shall remain, solely that of debtor and creditor. No
covenant or provision of the Loan Documents is intended, nor shall it be deemed or construed, to
create a partnership, joint venture, agency or common interest in profits or income between the
Administrative Agent, the Lenders and Borrower or to create an equity in the Project in the
Administrative Agent or any Lender. The Administrative Agent and the Lenders neither undertake nor
assume any responsibility or duty to Borrower or to any other person with respect to the Project or
the Loans, except as expressly provided in the Loan Documents; and notwithstanding any other
provision of the Loan Documents: (1) neither the Administrative Agent nor any Lender is, nor shall
be construed as, a partner, joint venturer, alter ego, manager, controlling person or other
business associate or participant of any kind of Borrower or its stockholders, members, or partners
and neither the Administrative Agent nor any Lender intends to ever assume such status; (2) no
Lender or the Administrative Agent shall in any event be liable for any Debts, expenses or losses
incurred or sustained by Borrower; and (3) no Lender or the Administrative Agent shall be deemed
responsible for or a participant in any acts, omissions or decisions of Borrower or its
stockholders, members, or partners. The Administrative Agent, the Lenders and Borrower disclaim
any intention to create any partnership, joint venture, agency or common interest in profits or
income between the Administrative Agent, the Lenders and Borrower, or to create an equity in the
Project in the Administrative Agent or any Lender, or any sharing of liabilities, losses, costs or
expenses.




Section 12.8 Time of the Essence. Time is of the essence with respect to this Agreement.



Section 12.9 Successors and Assigns. Subject to the provisions of Section 12.24, this
Agreement shall be binding upon and inure to the benefit of the Administrative Agent, the Lenders
and Borrower and the respective successors and permitted assigns.


 


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Section 12.10 Renewal, Extension or Rearrangement. All provisions of the Loan Documents shall
apply with equal effect to each and all promissory notes and amendments thereof hereinafter
executed which in whole or in part represent a renewal, extension, increase or rearrangement of the
Loans. For portfolio management purposes, the Lenders may elect to divide the Loans into two or
more separate loans evidenced by separate promissory notes with the same or different interest
rates, so long as the aggregate payment and other obligations of Borrower are not effectively
increased or otherwise modified. Borrower agrees to cooperate with the Administrative Agent and
the Lenders and to execute such documents as the Administrative Agent reasonably may request to
effect such division of the Loans.



Section 12.11 Waivers. No course of dealing on the part of the Administrative Agent or any
Lender, their respective officers, employees, consultants or agents, nor any failure or delay by
the Administrative Agent or any Lender with respect to exercising any right, power or privilege of
the Administrative Agent or any Lender under any of the Loan Documents, shall operate as a waiver
thereof.



Section 12.12 Cumulative Rights. Rights and remedies of the Administrative Agent and the
Lenders under the Loan Documents shall be cumulative, and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or remedy.



Section 12.13 Singular and Plural. Words used in this Agreement and the other Loan Documents
in the singular, where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular in this Agreement and the other Loan Documents
shall apply to such words when used in the plural where the context so permits and vice versa.



Section 12.14 Phrases. When used in this Agreement and the other Loan Documents, the phrase
“including” means “including, but not limited to,” the phrases “satisfactory to any Lender” or
“satisfactory to the Administrative Agent” means in form and substance satisfactory to such Lender
or the Administrative Agent, as the case may be, in all respects, the phrases “with Lender’s
consent”, “with Lender’s approval”, “with the Administrative Agent’s consent” or “with the
Administrative Agent’s approval” means such consent or approval at Lender’s or the Administrative
Agent’s, as the case may be, discretion, and the phrases “acceptable to Lender” or “acceptable to
the Administrative Agent” means acceptable to Lender or the Administrative Agent, as the case may
be, at such party’s reasonable discretion acting in good faith.



Section 12.15 Exhibits and Schedules. The exhibits and schedules attached to this Agreement
are incorporated herein and shall be considered a part of this Agreement for the purposes stated
herein.



Section 12.16 Titles of Articles, Sections and Subsections. All titles or headings to
articles, sections, subsections or other divisions of this Agreement and the other Loan Documents
or the exhibits hereto and thereto are only for the convenience of the parties and shall not be
construed to have any effect or meaning with respect to the other content of such articles,
sections, subsections or other divisions, such other content being controlling as to the agreement
between the parties hereto.


 


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Section 12.17 Promotional Material. Borrower authorizes the Administrative Agent and each of
the Lenders to issue press releases, advertisements and other promotional materials in connection
with the Administrative Agent’s or such Lender’s own promotional and marketing activities, and
describing the Loans and the Project in general terms and the Administrative Agent’s or such
Lender’s participation in the Loans subject, in each case, to Borrower’s approval, which approval
shall not be unreasonably withheld, conditioned or delayed. All references to the Administrative
Agent or any Lender contained in any press release, advertisement or promotional material issued by
Borrower or Borrower shall be approved in writing by the Administrative Agent and such Lender in
advance of issuance.



Section 12.18 Survival. In the event that any Lender that may assign any interest in its
Commitment or Loans hereunder in accordance with the terms of this Agreement, all of the
representations, warranties, covenants, and indemnities of Borrower hereunder and under the other
Loan Documents shall survive for the benefit of such assigning Lender the making of such
assignment, notwithstanding that such assigning Lender may cease to be a “Lender” hereunder.
Without limiting the foregoing, all indemnities of Borrower hereunder and under the other Loan
Documents shall survive indefinitely, notwithstanding (1) the repayment in full of the Loans and
the release of the Liens evidencing or securing the Loans; or (2) the transfer (by sale,
foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all right, title and
interest in and to the Project to any party. The representations, warranties and covenants of
Borrower, other than those imposing indemnification obligations on Borrower (which shall survive
indefinitely), shall survive for a period of two (2) years following the repayment in full of the
Loans and the release of the Liens evidencing or securing the Loans (notwithstanding that prior to
the end of such two-year period, Borrower may have transferred (by sale, foreclosure, conveyance in
lieu of foreclosure or otherwise) any or all its right, title and interest in and to the Project to
any other party).



Section 12.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY
PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE LOANS OR
THE PROJECT (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY
CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND EACH LENDER TO
ENTER THIS AGREEMENT.


 


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Section 12.20 Remedies of Borrower. In the event that a claim or adjudication is made that
the Administrative Agent, any of the Lenders, or their agents, acted unreasonably or unreasonably
delayed acting in any case where by Applicable Law or under this Agreement or the other Loan
Documents, the Administrative Agent, any Lender or any such agent, as the case
may be, has an obligation to act reasonably or promptly, or otherwise violated this Agreement
or the Loan Documents, Borrower agrees that none of the Administrative Agent, the Lenders or their
agents shall be liable for any incidental, indirect, special, punitive, consequential or
speculative damages or losses resulting from such failure to act reasonably or promptly in
accordance with this Agreement or the other Loan Documents.




Section 12.21 GOVERNING LAW.



(1) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND MADE BY THE ADMINISTRATIVE
AGENT AND LENDERS AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTES
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE
HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE OTHER LOAN DOCUMENTS, THE PARTIES HEREBY AGREE THAT
IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA,
EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS
AND SECURITY INTERESTS ON REAL PROPERTY CREATED PURSUANT HERETO AND PURSUANT TO THE MORTGAGE AND
ASSIGNMENT OF RENTS AND LEASES SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE
IN WHICH THE PROJECT IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE
LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.


 


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(2) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS MAY AT THE ADMINISTRATIVE AGENT’S OPTION
(WHICH DECISION SHALL BE MADE BY THE MAJORITY LENDERS) BE INSTITUTED IN ANY FEDERAL OR STATE COURT
IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING,
AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION
OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT MORGANS GROUP LLC, 475 TENTH AVENUE, NEW
YORK, NEW YORK 10018 AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE
COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL
BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (A) SHALL GIVE PROMPT NOTICE TO THE ADMINISTRATIVE
AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (B) MAY AT ANY TIME AND FROM TIME
TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS),
AND (C) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE
IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.



Section 12.22 Entire Agreement. This Agreement and the other Loan Documents embody the entire
agreement and understanding between the Administrative Agent, the Lenders and Borrower and
supersede all prior agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Loan Documents 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.



Section 12.23 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall constitute an original, but all of which shall constitute one document.




Section 12.24 Assignments and Participations.



(1) Assignments
by Borrower. Borrower may not assign any of its rights or obligations
hereunder, or under the Notes or under the other Loan Documents without the prior consent of all of
the Lenders and the Administrative Agent.


 


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(2) Assignments
by the Lenders. Each Lender may assign any of its Loans, its Note and its
Commitment (but only with the consent of the Administrative Agent); provided that:



(a) no such consent by the Administrative Agent shall be required in the case of any
assignment by any Lender to another Lender or an Affiliate of such Lender or such other Lender
(provided that in the case of an assignment to any such Affiliate, the assigning Lender will not be
released from its obligations under the Loan Documents and the Administrative Agent may continue to
deal only with such assigning Lender, unless such Affiliate is also an Eligible Assignee);



(b) except to the extent the Administrative Agent shall otherwise consent, any such partial
assignment (other than to another Lender or an affiliate of a Lender) shall be in an amount at
least equal to $10,000,000;



(c) each such assignment (including an assignment to another Lender or an affiliate of a
Lender) by a Lender of its Loans or Commitment shall be made in such manner so that the same
portion of its Loans and Commitment is assigned to the respective assignee;



(d) subject to the applicable Lender’s compliance with the provisions of clauses (b) and
(c) above, the Administrative Agent’s consent to an assignment shall not be unreasonably withheld,
delayed or conditioned if (i) such assignment is made to an Eligible Assignee, and (ii) the
provisions of clause (e) have been satisfied; and



(e) upon execution and delivery by the assignee (even if already a Lender) to Borrower and the
Administrative Agent of an Assignment and Acceptance pursuant to which such assignee agrees to
become a “Lender” hereunder (if not already a Lender) having the Commitment and Loans specified in
such instrument, and upon consent thereto by the Administrative Agent to the extent required above,
the assignee shall have, to the extent of such assignment (unless otherwise consented to by the
Administrative Agent), the obligations, rights and benefits of a Lender hereunder holding the
Commitment and Loans (or portions thereof) assigned to it (in addition to the Commitment and Loans,
if any, theretofore held by such assignee) and, except as provided in Section 12.24(2)(a),
the assigning Lender shall, to the extent of such assignment, be released from the Commitment (or
portion thereof) so assigned. Upon each such assignment the assigning Lender shall pay the
Administrative Agent a processing and recording fee of $3,500 and the reasonable fees and
disbursements of the Administrative Agent’s counsel incurred in connection therewith.




(3) Participations.



(a) A Lender may sell or agree to sell to one or more other Persons (each a
“Participant”) a participation in all or any part of any Loans held by it, or in its
Commitment, provided (i) such Lender’s obligations under this Agreement and the other Loan
Documents (and the Take-Out Agreement) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other applicable parties hereto for the performance of such obligations and
(iii) Borrower, the 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 the other Loan Documents. In no event shall a Lender that sells a participation
agree with the Participant to take or refrain from taking any action hereunder or under any other
Loan Document except that such Lender may agree with the Participant that it will not, without
the consent of the Participant, agree to (A) increase or extend the term of such Lender’s
Commitment, (B) extend the date fixed for the payment of principal of or interest on the related
Loan or Loans or any portion of any fee hereunder payable to the Participant, (C) reduce the amount
of any such payment of principal, (D) reduce the rate at which interest is payable thereon, or any
fee hereunder payable to the Participant, to a level below the rate at which the Participant is
entitled to receive such interest or fee or (E) consent to any modification, supplement or waiver
hereof or of any of the other Loan Documents to the extent that the same, under
Section 12.2, requires the consent of each Lender. Subject to subsection (3)(b) of
this Section 12.24, Borrower agrees that each Participant shall be entitled to the benefits
of Sections 2.9(1), 2.9(5), and 2.9(6) to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (2) of this
Section 12.24. To the extent permitted by law, each Participant also shall be entitled to
the benefits of Section 12.24 as though it were a Lender; provided that such
Participant agrees to be subject to Section 12.24 as though it were a Lender.


 


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(b) A Participant shall not be entitled to receive any greater payment under
Section 2.9(1) or 2.9(6) than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with Borrower’s prior written consent. A Participant
that is a non-U.S. Person that would become a Lender shall not be entitled to the benefits of
Section 2.9(6) unless Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of Borrower, to comply with Section 2.9(6) as
though it were a Lender.



(4) Certain Pledges. In addition to the assignments and participations permitted under the
foregoing provisions of this Section 12.24 (but without being subject thereto), any Lender
may (without notice to Borrower, the Administrative Agent or any other Lender and without payment
of any fee) assign and pledge all or any portion of its Loans and its Note to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any operating circular issued by such
Federal Reserve Bank, and such Loans and Note shall be fully transferable as provided therein. No
such assignment shall release the assigning Lender from its obligations hereunder.



(5) Provision of Information to Assignees and Participants. A Lender may furnish any
information concerning Borrower, any Borrower Party or any of their respective Affiliates or the
Project in the possession of such Lender from time to time to assignees and participants (including
prospective assignees and participants).



(6) No Assignments to Borrower or Affiliates. Anything in this Section 12.24 to the
contrary notwithstanding, no Lender may assign or participate any interest in any Loan held by it
hereunder to Borrower or any of its Affiliates without the prior consent of each Lender.



Section 12.25
Brokers. Borrower hereby represents to the Administrative Agent and each Lender
Borrower has not dealt with any broker, underwriters, placement agent, or finder in connection with
the transactions contemplated by this Agreement and the other Loan Documents. Borrower hereby
agrees to indemnify and hold the Administrative Agent and each Lender harmless from and against any
and all claims, liabilities, costs and expenses of any kind
in any way relating to or arising from a claim by any Person that such Person acted on behalf
of such Borrower in connection with the transactions contemplated herein.


 


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Section 12.26 Right of Setoff.



(1) Upon the occurrence and during the continuance of any Event of Default, each of the
Lenders is, subject (as between the Lenders) to the provisions of subsection (3) of this
Section 12.26, hereby authorized at any time and from time to time, without notice to
Borrower (any such notice being expressly waived by Borrower) and to the fullest extent permitted
by law, to setoff and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held, and other indebtedness at any time owing, by such Lender in any of its
offices, in Dollars or in any other currency, to or for the credit or the account of Borrower
against any and all of the respective obligations of Borrower now or hereafter existing under the
Loan Documents, irrespective of whether or not such Lender or any other Lender shall have made any
demand hereunder and although such obligations may be contingent or unmatured and such deposits or
indebtedness may be unmatured. Each Lender hereby acknowledges that the exercise by any Lender of
offset, setoff, banker’s lien, or similar rights against any deposit or other indebtedness of
Borrower whether or not located in California or any other state with certain laws restricting
lenders from pursuing multiple collection methods, could result under such laws in significant
impairment of the ability of all the Lenders to recover any further amounts in respect of the Loan.
Therefore, each Lender agrees that no Lender shall exercise any such right of setoff, banker’s
lien, or otherwise, against any assets of Borrower (including all general or special, time or
demand, provisional or other deposits and other indebtedness owing by such Lender to or for the
credit or the account of Borrower) without the prior written consent of the Administrative Agent
and the Majority Lenders.



(2) Each Lender shall promptly notify Borrower and the Administrative Agent after any such
setoff and application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Lenders under this
Section 12.26 are in addition to other rights and remedies (including other rights of
setoff) which the Lenders may have.



(3) If an Event of Default has resulted in the Loans becoming due and payable prior to the
stated maturity thereof, each Lender agrees that it shall turn over to the Administrative Agent any
payment (whether voluntary or involuntary, through the exercise of any right of setoff or
otherwise) on account of the Loans held by it in excess of its ratable portion of payments on
account of the Loans obtained by all the Lenders.




Section 12.27 Cooperation with Syndication; Componentization.



(1) Without limiting the provisions of Section 12.24, Borrower acknowledges that
Arranger intends to syndicate a portion of the Commitments to one or more Lenders (the
“Syndication”) and in connection therewith, Borrower will take all actions as Arranger may
reasonably request to assist Arranger in its Syndication effort. Without limiting the generality
of the foregoing, Borrower shall, at the request of Arranger (i) facilitate the review of the Loan
and the Project by any prospective Lender; (ii) assist Arranger and otherwise cooperate with
Arranger in the preparation of information offering materials (which assistance may include
reviewing and commenting on drafts of such information materials and drafting portions
thereof); (iii) deliver updated information on Borrower and the Project; (iv) make representatives
of Borrower available to meet with prospective Lenders at tours of the Project and bank meetings;
(v) facilitate direct contact between the senior management and advisors of Borrower and any
prospective Lender; and (vi) provide Arranger with all information reasonably deemed necessary by
it to complete the Syndication successfully. Borrower agrees to take such further action, in
connection with documents and amendments to the Loan Documents, as may reasonably be required to
effect such Syndication. Borrower shall not be responsible for any costs or expenses incurred by
the Administrative Agent, the Arranger, any Lender or any other Person in connection with such
Syndication, other than to the extent provided in Section 12.5(3).


 


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(2) Without limiting the provisions of Sections 12.24 or 12.27(1), Arranger
shall have the right, at any time, to direct the Administrative Agent, with respect to all or any
portion of the Loan, to (i) cause the Notes, the Mortgage and the other Security Documents to be
severed and/or split into two or more separate notes, mortgages and other security agreements, so
as to evidence and secure one or more senior and subordinate mortgage loans; (ii) create one more
senior and subordinate notes (i.e., an A/B or A/B/C structure) secured by the Mortgage and the
other Security Documents; (iii) create multiple components of the Notes (and allocate or reallocate
the outstanding principal amount of the Loan among such components); or (iv) otherwise sever the
Loan into two or more loans secured by the Mortgage and the other Security Documents; in each such
case, in such proportions and priorities as Arranger may so direct to the Administrative Agent;
provided, however, that in each such instance the outstanding principal amount of
all the Notes evidencing the Loan (or components of such Notes) immediately after the effective
date of such splitting, modification, componentization or other severance, equals the outstanding
principal amount of the Loans immediately prior to such splitting, modification, componentization
or other severance and the weighted average of the interest rates for all such Notes (or components
of such Notes) immediately after the effective date of such splitting, modification,
componentization or other severance equals the interest rate of the original Note immediately prior
to such splitting, modification, componentization or other severance. If requested by the
Administrative Agent, in connection with documents and amendments to the Loan Documents, as may
reasonably be required to effect such splitting, modification, componentization or other severance,
including entering into a severance agreement. Borrower shall not be responsible for any costs or
expenses incurred by the Administrative Agent, the Arranger, any Lender or any other Person in
connection with such splitting, modification, componentization or other severance, other than to
the extent provided in Section 12.5(3).



Section 12.28
Assignment of Note and Mortgage. Provided that no Event of Default exists, upon
the indefeasible payment and performance in full of Borrower’s obligations hereunder and under the
other Loan Documents in accordance with their terms, the Administrative Agent and each Lender shall
assign to Borrower or its designee, without representation, warranty or recourse of any kind, the
Administrative Agent’s and each Lender’s right, title and interest in and to the Notes and the
Mortgage; provided, however, that (a) the form of such assignment shall be acceptable to the
Administrative Agent and each Lender in its sole and absolute discretion; (b) such assignment shall
not include, and shall not result in any amendment, modification, termination, diminution or
impairment of, any of the indemnity obligations of Borrower or any Borrower Party under the Loan
Documents, all of which obligations and any rights and remedies with respect thereto shall continue
to inure solely to the
benefit of the Administrative Agent and the Lenders; (c) the Administrative Agent and the
Lenders shall not incur any expense or liability in connection with such assignment; and (d)
Borrower shall indemnify and hold the Administrative Agent and the Lenders harmless from and
against any and all claims and liabilities arising out of such assignment, such indemnification to
survive any such assignment.


 


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ARTICLE 13




LIMITATIONS ON LIABILITY




Section 13.1 Limitation on Liability. Except as provided below, Borrower shall not be
personally liable for amounts due under the Loan Documents. Borrower shall be personally liable to
the Administrative Agent and the Lenders for any deficiency, loss or damage suffered by the
Administrative Agent or any Lender because of: (1) Borrower’s commission of a criminal act, (2)
the willful misapplication by Borrower or any Borrower Party of any funds derived from the Project,
including security deposits, Net Sales Proceeds, escrow account funds, insurance proceeds and
condemnation awards; (3) the fraud or material misrepresentation by Borrower or any Borrower Party
made in or in connection with the Loan Documents or the Loan; (4) Borrower’s collection of rents
more than one month in advance or entering into or modifying leases, or receipt of monies by
Borrower or any Borrower Party in connection with the modification of any leases, in violation of
this Agreement or any of the other Loan Documents; (5) Borrower’s failure to apply proceeds of
rents or any other payments in respect of the leases and other income of the Project or any other
collateral to the costs of maintenance and operation of the Project and to the payment of taxes,
lien claims, insurance premiums, Debt Service and other amounts due under the Loan Documents; (6)
Borrower’s intentional interference with the Administrative Agent’s exercise of rights and remedies
under the Loan Documents; (7) any Borrower Party’s failure to comply with provisions of the Loan
Documents prohibiting the sale, transfer or encumbrance of the Project, the collateral, or any
direct or indirect ownership interest in Borrower or Mortgage Borrower; (8) to the extent of
sufficient Operating Revenues, Borrower’s failure to maintain insurance as required by this
Agreement or to pay any taxes or assessments affecting the Project or any mortgage recording or
similar taxes required to be paid by any Person in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan Documents; (9)
intentional or grossly negligent damage or destruction to the Project caused by the acts or
omissions of Borrower, its agents, employees, or contractors; (10) a breach of Borrower’s
obligations with respect to environmental matters under Article 5; (11) Borrower’s failure
to pay for any loss, liability or expense (including attorneys’ fees) incurred by the
Administrative Agent or any Lender arising out of any claim or allegation made by Borrower, its
successors or assigns, or any creditor of Borrower, that this Agreement or the transactions
contemplated by the Loan Documents establish a joint venture, partnership or other similar
arrangement between Borrower, the Administrative Agent and any Lender; (12) any brokerage
commission or finder’s fees claimed in connection with the transactions contemplated by the Loan
Documents; or (13) any breach of or default under the Junior Intercreditor Agreement by the Junior
Mezzanine Lender. None of the foregoing limitations on the personal liability of Borrower shall
modify, diminish or discharge the personal liability of any Joinder Party. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan Documents: (a) neither the
Administrative Agent nor the Lenders shall be deemed to have waived any right which the
Administrative Agent or any Lender may
have under Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code, or
corresponding or superseding sections of the Bankruptcy Amendments and Federal Judgeship Act of
1984, as such sections may be amended, to file a claim for the full amount due to the
Administrative Agent or such Lender under the Loan Documents or to require that all collateral
shall continue to secure the amounts due under the Loan Documents; and (b) the Secured Indebtedness
shall be fully recourse to Borrower and Joinder Parties in the event that: (i) there is a default
under Section 10.9 and the involuntary case or other proceeding against a Bankruptcy Party
referred to therein has been commenced by or with the collusion of another Bankruptcy Party; (ii)
there is a default under Section 10.10, (iii) Borrower fails to obtain the Administrative
Agent’s prior written consent to any subordinate financing or other voluntary Lien encumbering the
Project; or (iv) Borrower fails to obtain the Administrative Agent’s prior written consent to any
assignment, transfer, or conveyance of the Project or any interest therein as required by the Loan
Document.


 


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Section 13.2 Limitation on Liability of the Administrative Agent’s and the Lenders’ Officers,
Employees, etc. Any obligation or liability whatsoever of the Administrative Agent or any Lender
which may arise at any time under this Agreement or any other Loan Document shall be satisfied, if
at all, out of the Administrative Agent’s or such Lender’s respective assets only. No such
obligation or liability shall be personally binding upon, nor shall resort for the enforcement
thereof be had to, the property of any of the Administrative Agent’s or any Lender’s shareholders,
directors, officers, employees or agents, regardless of whether such obligation or liability is in
the nature of contract, tort or otherwise.



ARTICLE 14




BUILDING CONVERSION; SALE OF UNITS





Section 14.1 Completion of Building Conversion.



(1) Borrower shall diligently pursue to completion the Building Conversion in accordance with
the Plans and Specifications, the Project Budget, Applicable Law and this Agreement, free and clear
of Liens or claims for Liens for materials supplied and for labor or services performed in
connection therewith. Without limiting the generality of the forgoing, Borrower shall cause (a)
the Hotel Opening to occur by not later than the Hotel Opening Deadline, and (b) Building
Conversion to occur by not later than the Construction Completion Deadline, provided that the
Construction Completion Deadline may be extended for a period of time, not to exceed sixty (60)
days, as a result of Unavoidable Delay.



(2) Borrower shall not modify the Plans and Specifications in any material respect, nor shall
Borrower modify the Project Budget, in each case without the Administrative Agent’s and each
Lender’s prior written consent; provided, however, no such consent shall be
required with respect to increases in that portion of the Project Budget setting forth the cost to
complete the Building Conversion which, when combined with any other increases in such portion of
the Project Budget occurring after the Amendment Closing Date, do not exceed $1,700,000.
Administrative Agent and each Lender shall provide its approval (or disapproval with specific
reasons therefor) within ten (10) Business Days of its receipt of Borrower’s submissions hereunder
and such consent shall not be unreasonably withheld.


 


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(3) If at any time, the projected costs anticipated to be incurred to achieve any aspect of
Construction Completion (the “Projected Costs”) exceeds the amount set forth in the Project
Budget, as determined by the Administrative Agent in its sole and absolute discretion (which for
purposes of such determination shall include a determination that the undisbursed Interest Holdback
is insufficient to pay future interest expenses with respect to the Loans), then the Loans shall be
deemed “Out of Balance.” In determining if the Loans are Out of Balance, the
Administrative Agent shall take into account the funds in the Construction Completion Account, as
well as projected Excess Cash Flow which is available pursuant to Section 14.4 to pay the
costs of the Building Conversion (as determined by the Administrative Agent in its sole and
absolute discretion). If the Loans are deemed Out of Balance, then Borrower shall, at the
Administrative Agent’s option, within ten (10) Business Days after written notice from the
Administrative Agent either (a) deposit with the Administrative Agent an amount sufficient to cover
such deficiency (a “Deficiency Deposit”), which Deficiency Deposit shall be deposited in
the Construction Completion Account or (b) make one or more equity contributions to be used by
Borrower to pay costs that will cause the Loans not be Out of Balance (an “Equity Balancing
Contribution”), including contributions to pay future interest. The Administrative Agent shall
not be required to authorize any further disbursements of the Construction Completion Fund before
receiving (i) payment of any such Deficiency Deposit and the prior application of such Deficiency
Deposit to the payment of the Projected Costs so as to cause the Loans not to be Out of Balance or
(ii) verification that an Equity Balancing Contribution has been made and the proceeds thereof used
for the payment of Projected Costs so as to cause the Loans not to be Out of Balance. Failure of
Borrower to provide satisfactory verification of an Equity Balancing Contribution as required above
shall be deemed Borrower’s election to make a Deficiency Deposit. If an Event of Default shall
occur and be continuing, the Administrative Agent may, at its option, in addition to exercising any
other rights or remedies available under the Loan Documents, (A) apply any unexpended Deficiency
Deposit to the costs of completion of the Improvements and/or (B) apply any unexpended Deficiency
Deposit to the immediate reduction of any amounts due under the Notes and the other Loan Documents.
Notwithstanding the forgoing, the Borrower shall not be required to make a Deficiency Deposit so
long as (1) the amount by which the Loans are Out of Balance do not exceed $5,120,516.95 in the
aggregate and (2) the Administrative Agent has determined in its sole good faith discretion that
funds in such amount are available from one or more of additional Equity Balancing Contributions,
an increase in the amount of funds available from the Junior Mezzanine Loan or Excess Cash Flow.



(4) Borrower shall pay all the expenses and costs of the Administrative Agent (and the
Lenders) in connection with the Building Conversion, including without limitation, reasonable
attorneys’ fees, intangible taxes, additional title insurance premiums, recording fees and all
other costs connected with the funding of advances.


 


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Section 14.2 Marketing and Sales Program; Sales of Units; Deposits. Borrower shall diligently
pursue the sale of all Units in good faith and in accordance with the sales and marketing program
in effect at the Project as of the Amendment Closing Date, as well as, to the extent requested by
Administrative Agent, in accordance with a formal written sales program delivered to and approved
in writing by the Administrative Agent subsequent to the Original Closing Date (the “Approved
Sales Program”). Borrower shall obtain the Administrative Agent’s prior written approval for
any material deviation from the sales and marketing program currently being employed at the Project
by Borrower, as well as to any material deviation from
the Approved Sales Program. All reservations, marketing, and sales, including the Approved
Sales Program, shall be in compliance with all Applicable Laws, including the Condominium Act.
Borrower shall timely and fully comply with all of its obligation under the Purchase Contracts.
Without limiting the generality of the foregoing, each deposit under a Purchase Contracts shall be
held in escrow in the Condominium Escrow in accordance with Applicable Law and a Condominium Escrow
Agreement approved by the Administrative Agent until the earlier of (a) the closing of the sale of
the respective Unit, at which time it shall be applied to the purchase price for such Unit in
accordance with such Purchase Contract, or (b) such deposit becomes payable to the Borrower other
than as a result of the closing of such Unit (e.g., as a result of a default by the purchaser under
such Purchase Contract), at which time Borrower shall cause such deposit to be released from the
Condominium Escrow to the Administrative Agent. Any deposit so released to the Administrative
Agent shall be applied as follows: (x) at all times during which the Administrative Agent has
determined that Projected Costs exceed the funds, if any, available to be disbursed from the
Construction Completion Account and the Interest Holdback (which determination shall be made in the
Administrative Agent’s sole and absolute discretion) to be deposited into the Construction
Completion Account; (y) if the condition described in clause (x) above does not exist, the
Administrative Agent shall apply such deposit to Borrower’s obligations under the Loan Documents in
accordance with Section 2.4(7)(a); and (z) if an Event of Default exists, the
Administrative Agent shall apply such deposit in any order or manner as the Administrative Agent
shall determine (subject to the terms of any co-lender agreement among the Lenders).



Section 14.3 Partial Release of Units. The Administrative Agent shall in connection with the
bona fide arms-length sales to third parties of the Units and the Parking Spaces execute and
deliver from time to time partial releases of the Mortgage and other Loan Documents as they apply
to individual Units and Parking Spaces upon the submission to the Administrative Agent of the
release documents and upon fifteen (15) Business Days notice, subject, however, to the satisfaction
of all of the following terms and conditions (sometimes collectively referred to as the
“Partial Release Conditions”):




(1) No Event of Default or Potential Default shall exist;



(2) A partial release shall only be delivered at or in connection with the consummation of the
sale of the Unit and Parking Space as to which a release of the lien of the Mortgage has been
requested;



(3) With respect to the sale of a Unit, Borrower shall pay to the Administrative Agent (i) the
applicable Scheduled Release Price, which payment shall be applied by the Administrative Agent in
accordance with Section 2.4(7)(b); and (ii) those portions of the Excess Cash Flow required
to be paid to the Administrative Agent pursuant to, and in accordance with Section 14.4,
which payments shall be applied by the Administrative Agent either in accordance with
Section 2.4(7)(b) or into the Construction Completion Account, as applicable, and as set
forth further in Section 14.4;



(4) With respect to the sale of a Parking Space, Borrower shall pay to the Administrative
Agent the applicable Parking Space Release Price, which payment shall be applied by the
Administrative Agent in accordance with Section 2.4(7)(b);


 


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(5) The Administrative Agent shall be given not less than fifteen (15) Business Day’s prior
written notice of Borrower’s request for each partial release, which notice shall describe the Unit
and the name of the purchaser and which notice shall be accompanied by a copy of the fully executed
Purchase Contract and a copy of the certificate of occupancy or its equivalent for any Unit that
has been the subject of construction work for which a building permit was required or issued;



(6) Each partial release shall, if required by the Administrative Agent, be delivered through
an escrow agreement, the terms of which shall be satisfactory to the Administrative Agent;



(7) If requested by the Administrative Agent from time to time, the Administrative Agent shall
receive title insurance endorsements satisfactory to the Administrative Agent confirming the
continued validity of and priority of the Mortgage on the Unsold Units;



(8) Borrower shall pay all costs and expenses incurred by the Administrative Agent (and the
Lenders) in connection with any partial release, including without limitation, attorneys’ fees and
costs, recording fees and escrow fees; and



(9) The Administrative Agent shall receive evidence satisfactory to the Administrative Agent
that the remaining collateral subject to the Security Documents, after giving effect to the
proposed partial release, shall consist of one (1) or more separate legal lots and otherwise remain
in compliance with all applicable legal requirements.




Section 14.4
Application of Excess Cash Flow.


(1) At all times during which the Administrative Agent has determined that Projected Costs
exceed the funds, if any, available to be disbursed from the Construction Completion Account and
the Interest Holdback (which determination shall be made in the Administrative Agent’s sole and
absolute discretion), Borrower shall cause all Excess Cash Flow from the sale of each Unit to be
applied as follows:



(a) To facilitate the sale of such Unit, Borrower may utilize all or a portion of such Excess
Cash Flow to provide Seller Financing for the sale of such Unit; and



(b) To extent any such Excess Cash Flow remains after application of the same in accordance
with clause (a) above, all such remaining Excess Cash Flow shall be paid to the
Administrative Agent to be deposited in the Construction Completion Account to be applied in
accordance with the provisions of Section 4.3(2).



(2) Except as provided in Section 14.4(1), Borrower shall cause all Excess Cash Flow
from the sale of each Unit to be applied as follows:



(a) A portion of such Excess Cash Flow equal to ten percent (10%) of the Scheduled Release
Price for such Unit shall be paid to the Administrative Agent to be applied in accordance with
Section 2.4(7)(b) until the Loans are repaid in full and, thereafter, to be paid
to the Existing Mezzanine Lender for application to the Existing Mezzanine Loan until the
Existing Mezzanine Loan is paid in full;


 


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(b) To facilitate the sale of such Unit, Borrower may utilize a portion of such Net Sales Cash
Proceeds remaining after the payment required in clause (a) above to provide Seller
Financing for the sale of such Unit; and



(c) To extent any such Excess Cash Flow remains after application of the same in accordance
with clauses 2(a) and 2(b) above, the remainder of such Excess Cash Flow shall be
used to repay the Junior Mezzanine Loan until the Junior Mezzanine Loan is repaid in full; and



(d) To extent any such Excess Cash Flow remains after application of the same in accordance
with clauses 2(a), 2(b) and 2(c) above, the remainder of such Excess Cash
Flow shall be paid to the Administrative Agent to be applied in accordance with Section
2.4(7)(b) until the Loans are repaid in full and, thereafter, to be paid to the Existing
Mezzanine Lender for application to the Existing Mezzanine Loan until the Existing Mezzanine Loan
is paid in full.




(3) Notwithstanding the forgoing provisions of this Section 14.4:



(a) All of the proceeds from any sale of Units pursuant to the Forward Purchase Contract shall
be paid to the Administrative Agent to be applied (i) prior a foreclosure of the Mortgage or
transfer of the Project in lieu thereof, in accordance with the provisions Section
2.4(7)(b) until the Loans are repaid in full and, thereafter, to the Existing Mezzanine Lender
for application to the Existing Mezzanine Loan, and (ii) following a foreclosure of the Mortgage or
transfer of the Project in lieu thereof (and notwithstanding any provisions of any intercreditor
agreement among the Lenders and the Existing Mezzanine Lender to the contrary), towards any
deficiency with respect to Note A, and once such deficiency has been paid in full, to the holder of
Note B until all obligations with respect to Note B are paid in full and, thereafter, to the
Existing Mezzanine Lender for application to the Existing Mezzanine Loan. In no event shall any
portion of such proceeds be treated as Excess Cash Flow for any purposes under this Agreement; and



(b) During the existence of an Event of Default, all Excess Cash Flow shall be paid directly
to the Administrative Agent and applied to the Secured Indebtedness (and, after the Secured
Indebtedness is repaid in full, to the Existing Mezzanine Loan) in such manner as the
Administrative Agent shall determine in its sole and absolute discretion (subject to the terms of
any co-lender agreement among the Lenders).



Section 14.5 Sale of Parking Spaces. During the term of this Agreement, Borrower shall not
sell or convey any Parking Space to any Person who is not also a purchaser or owner of a Unit. The
foregoing prohibition shall not prohibit Borrower from entering into parking agreements with
tenants of the Project, provided that the term of any such agreement shall extend no longer
than the term of the respective lease. The Parking Space Release Price from any sale or conveyance
of a Parking Space other than pursuant to a Purchase Contract shall be paid to the Administrative
Agent and applied to reduce the principal balance of the Loans, and thereafter,
towards the Borrower’s other obligations under the Loan Documents in accordance with
Sections 2.4(5) and 2.4(7)(b).


 


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Section 14.6
Seller Financing Collateral.



(1) Borrower hereby grants to the Administrative Agent (for the benefit of the Lenders) a
first priority continuing security interest in and to all of Borrower’s right, title and interest
in any collateral provided by any Unit purchasers with respect to any Seller Financing now or
hereafter obtained by Borrower, together with all principal, interest and other amounts from time
to time received, receivable or otherwise payable in respect of or in exchange therefor, all
collateral therefor, and, to the extent not covered by the foregoing, all “proceeds” (as defined
under Article 9 of the Uniform Commercial Code of any or all of the foregoing (collectively, the
“Seller Financing Collateral”).



(2) In the event that Borrower receives any payment (whether of principal, interest or other
amounts) with respect to any Seller Financing Collateral, Borrower shall, within two (2) Business
Days of its receipt of the same, cause such payment to be paid to the Administrative Agent to be
applied in accordance with Section 2.4(7)(b) until the Loans are repaid in full and,
thereafter, to be paid to the Existing Mezzanine Lender for application to the Existing Mezzanine
Loan; provided, however, that during the existence of an Event of Default, the Administrative Agent
may apply such deposits to the Secured Indebtedness (and, after the Secured Indebtedness is repaid
in full, to the Existing Mezzanine Loans) in such manner as the Administrative Agent shall
determine in its sole and absolute discretion (subject to the terms of any co-lender agreement
among the Lenders).



(3) Borrower shall provide the Administrative Agent with such information regarding any Seller
Financing and the Seller Financing Collateral as the Administrative Agent and/or any Lender may
request from time to time. Without limiting the generality of the forgoing, not later than twenty
(20) days following the end of each calendar month, Borrower shall provide to the Administrative
Agent and the Lenders with a written report with respect to all Seller Financing provided in the
prior calendar month, which report shall identify the Units to which such Seller Financing relates,
the amounts of such Seller Financing, the types of such Seller Financing and the third party
lenders, if any, involved in such Seller Financing. Borrower shall not enter into any agreement,
whether with a Unit purchaser or a third party lender, to provide Seller Financing unless such
agreement permits the assignment of the Seller Financing Collateral to the Administrative Agent (on
behalf of the Lenders) as provided hereunder.


 


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ARTICLE 15




THE ADMINISTRATIVE AGENT




Section 15.1 Appointment, Powers and Immunities. Each Lender hereby appoints and authorizes
the Administrative Agent to act as its agent hereunder and under the other Loan Documents with such
powers as are specifically delegated to the Administrative Agent by the terms of this Agreement and
of the other Loan Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent (which term as used in this sentence
and in Section 15.5 and the first sentence of Section 15.6 shall include
reference to its affiliates and its own and its affiliates’ officers, directors, employees and
agents):



(1) shall have no duties or responsibilities except those expressly set forth in this
Agreement and in the other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee for any Lender except to the extent that the Administrative Agent acts
as an agent with respect to the receipt or payment of funds, nor shall the Administrative Agent
have any fiduciary duty to Borrower nor shall any Lender have any fiduciary duty to Borrower or any
other Lender;



(2) shall not be responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Loan Document, or in any certificate or
other document referred to or provided for in, or received by any of them under, this Agreement or
any other Loan Document, or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Loan Document or any other document referred
to or provided for herein or therein or for any failure by Borrower or any other Person to perform
any of its obligations hereunder or thereunder; and



(3) as among Lenders (and not as it relates to Borrower) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan Document or under any
other document or instrument referred to or provided for herein or therein or in connection
herewith or therewith, except to the extent any such action taken or omitted violates the
Administrative Agent’s standard of care set forth in the first sentence of Section 15.5.



(4) shall not, except to the extent expressly instructed by the Majority Lenders with respect
to collateral security under the Security Documents, be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan Document; and



(5) shall not be required to take any action which is contrary to this Agreement or any other
Loan Document or Applicable Law.



The relationship between the Administrative Agent and each Lender is a contractual relationship
only, and nothing herein shall be deemed to impose on the Administrative Agent any obligations
other than those for which express provision is made herein or in the other Loan Documents. The
Administrative Agent may employ agents and attorneys in fact, and may delegate all or any part of
its obligations hereunder, to third parties and shall not be responsible for the negligence or
misconduct of any such agents, attorneys in fact or third parties selected by it in good faith.
The Administrative Agent may deem and treat the payee of a Note as the holder thereof for all
purposes hereof unless and until a notice of the assignment or transfer thereof shall have been
filed with the Administrative Agent, any such assignment or transfer to be subject to the
provisions of Section 12.24. Except to the extent expressly provided in Sections
15.8, the provisions of this Article 15 are solely for the benefit of the
Administrative Agent and the Lenders, and Borrower shall not have any rights as a third-party
beneficiary of any of the provisions hereof and the Lenders may modify or waive such provisions of
this Article 15 in their sole and absolute discretion.


 


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Section 15.2 Reliance by Administrative Agent. The Administrative Agent shall be entitled to
rely upon any certification, notice or other communication (including, without limitation, any
thereof by telephone, telecopy, telegram or cable) reasonably believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by this Agreement or any other
Loan Document, the Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions given by the
Majority Lenders, and such instructions of the Majority Lenders and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders.




Section 15.3 Defaults.



(1) The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence
of a Potential Default or Event of Default unless the Administrative Agent has received notice from
a Lender or Borrower specifying such Potential Default or Event of Default and stating that such
notice is a “Notice of Default”. In the event that the Administrative Agent receives such a notice
of the occurrence of a Potential Default or Event of Default, the Administrative Agent shall give
prompt notice thereof to the Lenders. Within ten (10) days of delivery of such notice of Potential
Default or Event of Default from the Administrative Agent to the Lenders (or such shorter period of
time as the Administrative Agent determines is necessary), the Administrative Agent and the Lenders
shall consult with each other to determine a proposed course of action. The Administrative Agent
shall (subject to Section 15.7) take such action with respect to such Potential Default or
Event of Default as shall be directed by the Majority Lenders, provided that, (a) unless
and until the Administrative Agent shall have received such directions, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking such action, including
decisions (i) to make protective advances that the Administrative Agent determines are necessary to
protect or maintain the Project and (ii) to foreclose on any of the Project or exercise any other
remedy, with respect to such Potential Default or Event of Default as it shall deem advisable in
the interest of the Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the authorization of all of the
Lenders and (b) no actions approved by the Majority Lenders shall violate the Loan Documents or
Applicable Law. Each of the Lenders acknowledges and agrees that no individual Lender may
separately enforce or exercise any of the provisions of any of the Loan Documents (including the
Notes) other than through the Administrative Agent. The Administrative Agent shall advise the
Lenders of all material actions which the Administrative Agent takes in accordance with the
provisions of this Section 15.3(1) and shall continue to consult with the Lenders with
respect to all of such actions. Notwithstanding the foregoing, if the Majority Lenders shall at
any time direct that a different or additional remedial action be taken from that already
undertaken by the Administrative Agent, including the commencement of foreclosure proceedings, such
different or additional remedial action shall be taken in lieu of or in addition to, the
prosecution of such action taken by the Administrative Agent; provided that all actions
already taken by the Administrative Agent pursuant to this Section 15.3(1) shall be valid
and binding on each Lender. All money (other than money subject to the provisions of Section
15.7) received from any enforcement actions, including the proceeds of a foreclosure sale of
the Project, shall be applied, first, to the payment or reimbursement of the Administrative
Agent for expenses incurred in accordance with the
provisions of Sections 15.3(2), (3) and (4) and 15.5,
second, to the payment or reimbursement of the Lenders for expenses incurred in accordance
with the provisions of Sections 15.3(2), (3) and (4) and 15.5,
third, to the payment or reimbursement of the Lenders for any advances made pursuant to Section
15.3(2), and fourth, pari passu to the Lenders in accordance with their respective
Proportionate Shares , unless an Unpaid Amount is owed pursuant to Section 15.12, in which
event such Unpaid Amount shall be deducted from the portion of such proceeds of the Defaulting
Lender and be applied to payment of such Unpaid Amount to the Special Advance Lender.


 


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(2) All losses with respect to interest (including interest at the Default Rate) and other
sums payable pursuant to the Notes or incurred in connection with the Loans shall be borne by the
Lenders in accordance with their respective proportionate shares of the Loans. All losses incurred
in connection with the Loans, the enforcement thereof or the realization of the security therefor,
shall be borne by the Lenders in accordance with their respective proportionate shares of the Loan,
and the Lenders shall promptly, upon request, remit to the Administrative Agent their respective
proportionate shares of (a) any expenses incurred by the Administrative Agent in connection with
any Default to the extent any expenses have not been paid by Borrower, (b) any advances made to pay
taxes or insurance or otherwise to preserve the Lien of the Security Documents or to preserve and
protect the Project, whether or not the amount necessary to be advanced for such purposes exceeds
the amount of the Mortgage, (c) any other expenses incurred in connection with the enforcement of
the Mortgage or other Loan Documents, and (d) any expenses incurred in connection with the
consummation of the Loans not paid or provided for by Borrower. To the extent any such advances
are recovered in connection with the enforcement of the Mortgage or the other Loan Documents, each
Lender shall be paid its proportionate share of such recovery after deduction of the expenses of
the Administrative Agent and the Lenders.



(3) If, at the direction of the Majority Lenders or otherwise as provided in Section
15.3(1), any action(s) is brought to collect on the Notes or enforce the Security Documents or
any other Loan Document, such action shall (to the extent permitted under Applicable Law and the
decisions of the court in which such action is brought) be an action brought by the Administrative
Agent and the Lenders, collectively, to collect on all or a portion of the Notes or enforce the
Security Documents or any other Loan Document and counsel selected by the Administrative Agent
shall prosecute any such action on behalf of the Administrative Agent and the Lenders, and the
Administrative Agent and the Lenders shall consult and cooperate with each other in the prosecution
thereof. All decisions concerning the appointment of a receiver while such action is pending, the
conduct of such receivership, the conduct of such action, the collection of any judgment entered in
such action and the settlement of such action shall be made by the Administrative Agent. The costs
and expenses of any such action shall be borne by the Lenders in accordance with each of their
respective proportionate shares.



(4) If, at the direction of the Majority Lenders or otherwise as provided in Section
15.3(1), any action(s) is brought to foreclose the Mortgage, such action shall (to the extent
permitted under Applicable Law and the decisions of the court in which such action is brought) be
an action brought by the Administrative Agent and the Lenders, collectively, to foreclose all or a
portion of the Mortgage and collect on the Notes. Counsel selected by the
Administrative Agent shall prosecute any such foreclosure on behalf of the Administrative
Agent and the Lenders and the Administrative Agent and the Lenders shall consult and cooperate with
each other in the prosecution thereof. All decisions concerning the appointment of a receiver, the
conduct of such foreclosure, the acceptance of a deed in lieu of foreclosure, the bid on behalf of
the Administrative Agent and the Lenders at the foreclosure sale of the Project, the manner of
taking and holding title to the Project (other than as set forth in subsection (5) below),
the sale of the Project after foreclosure, and the commencement and conduct of any deficiency
judgment proceeding shall be made by the Administrative Agent. The costs and expenses of
foreclosure will be borne by the Lenders in accordance with their respective proportionate shares.


 


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(5) If title is acquired to the Project after a foreclosure sale or by a deed in lieu of
foreclosure, title shall be held by the Administrative Agent in its own name in trust for the
Lenders or, at the Administrative Agent’s election, in the name of a wholly owned subsidiary of the
Administrative Agent on behalf of the Lenders.



(6) If the Administrative Agent (or its subsidiary) acquires title to the Project or is
entitled to possession of the Project during or after the foreclosure, all material decisions with
respect to the possession, ownership, development, construction, control, operation, leasing,
management and sale of the Project shall be made by the Administrative Agent. All income or other
money received after so acquiring title to or taking possession of the Project with respect to the
Project, including income from the operation and management of the Project and the proceeds of a
sale of the Project, shall be applied, first, to the payment or reimbursement of the
Administrative Agent and the expenses incurred in accordance with the provisions of this
Article 15, second, to the payment of operating expenses with respect to the
Project; third, to the establishment of reasonable reserves for the operation of the Project;
fourth, to the payment or reimbursement of the Lenders for any advances made pursuant to
Section 15.3(2); fifth to fund any capital improvement, leasing and other reserves; and
sixth, to the Lenders in accordance with their respective proportionate shares, unless an Unpaid
Amount is owed pursuant to Section 15.12, in which event such Unpaid Amount shall be
deducted from the portion of such proceeds of the Defaulting Lender and be applied to payment of
such Unpaid Amount to the Special Advance Lender.



Section 15.4 Rights as a Lender. With respect to its Commitment and the Loans made by it
Eurohypo (and any successor acting as Administrative Agent) in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term “Lender” or “Lenders” shall,
unless the context otherwise indicates, include the Administrative Agent in its individual
capacity. Eurohypo (and any successor acting as Administrative Agent) and its affiliates may
(without having to account therefor to any Lender) lend money to, make investments in and generally
engage in any kind of lending, trust or other business with Borrower (and any of its Affiliates) as
if it were not acting as the Administrative Agent, and Eurohypo and its affiliates may accept fees
and other consideration from Borrower for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.


 


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Section 15.5 Standard of Care; Indemnification. In performing its duties under the Loan
Documents, the Administrative Agent will exercise the same degree of care as it normally
exercises in connection with real estate loans in which no syndication or participations are
involved, but the Administrative Agent shall have no further responsibility to any Lender except as
expressly provided herein and except for its own gross negligence or willful misconduct which
resulted in actual loss to such Lender, and, except to such extent, the Administrative Agent shall
have no responsibility to any Lender for the failure by the Administrative Agent to comply with any
of the Administrative Agent’s obligations to Borrower under the Loan Documents or otherwise. The
Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed under
Section 12.5, but without limiting the obligations of Borrower under Section 12.5)
ratably in accordance with the aggregate principal amount of the Loans held by the Lenders (or, if
no Loans are at the time outstanding, ratably in accordance with their respective Commitments), for
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Administrative Agent (including by any Lender) arising out of or by reason of
any investigation in or in any way relating to or arising out of this Agreement or any other Loan
Document or any other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including, without limitation, the costs and expenses
that Borrower is obligated to pay under Section 12.5, but excluding, unless a Event of
Default has occurred and is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the Administrative Agent’s breach of its standard of
care set forth in the first sentence of this Section.



Section 15.6 Non Reliance on Administrative Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Administrative Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its own credit analysis
of Borrower and its Affiliates and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or under any other Loan
Document. Subject to the provisions of the first sentence of Section 15.5, the
Administrative Agent shall not be required to keep itself informed as to the performance or
observance by Borrower of this Agreement or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the Project or the books of Borrower or
any of its Affiliates. Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder or as otherwise
agreed by the Administrative Agent and the Lenders, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other information concerning the
affairs, financial condition or business of Borrower or any of its Affiliates that may come into
the possession of the Administrative Agent or any of its affiliates.



Section 15.7 Failure to Act. Except for action expressly required of the Administrative Agent
hereunder, and under the other Loan Documents, the Administrative Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification obligations
under Section 15.5 against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action.


 


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Section 15.8 Resignation of Administrative Agent. The Administrative Agent may resign at any
time by giving notice thereof to the Lenders and Borrower. Upon any such resignation, the Majority
Lenders shall have the right to appoint a successor Administrative Agent that shall be a Person
that meets the qualifications of an Eligible Assignee. Such successor Administrative Agent shall
be approved by Borrower, which approval shall not be unreasonably withheld, delayed or conditioned.
If no successor Administrative Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within thirty (30) days after the retiring Administrative
Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, that shall be an institutional lender that
meets the requirements of the immediately preceding sentence. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations hereunder (if not already
discharged therefrom as provided above in this Section 15.8). The fees payable by Borrower
to a successor Administrative Agent shall be the same as those payable to its predecessor unless
otherwise agreed between Borrower and such successor. After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provision of this Article 15 and
Section 12.5 shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.



Section 15.9 Consents under Loan Documents. As between Borrower and Lenders, the
Administrative Agent may as expressly provided in the Loan Documents and, if not expressly
provided, with the consent of the Majority Lenders (a) grant any consent or approval required of it
or (b) consent to any modification, supplement or waiver under any of the Loan Documents. If the
Administrative Agent solicits any consents or approvals from the Lenders under any of the Loan
Documents, each Lender shall within ten (10) Business Days of receiving such request, give the
Administrative Agent written notice of its consent or approval or denial thereof; provided
that, if any Lender does not respond within such ten (10) Business Days, such Lender shall be
deemed to have authorized the Administrative Agent to vote such Lender’s interest with respect to
the matter which was the subject of the Administrative Agent’s solicitation as the Administrative
Agent elects. Any such solicitation by the Administrative Agent for a consent or approval shall be
in writing and shall include a description of the matter or thing as to which such consent or
approval is requested and shall include the Administrative Agent’s recommended course of action or
determination in respect thereof. After Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article 15 and Section 12.5 shall
continue in effect for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.



Section 15.10 Authorization. The Administrative Agent is hereby authorized by the Lenders to
execute, deliver and perform in accordance with the terms of each of the Loan Documents to which
the Administrative Agent is or is intended to be a party and each Lender agrees to be bound by all
of the agreements of the Administrative Agent contained in such Loan
Documents. Borrower shall be entitled to rely on all written agreements, approvals and
consents received from the Administrative Agent as being that also of the Lenders, without
obtaining separate acknowledgment or proof of authorization of same.


 


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Section 15.11 Reserved.



Section 15.12 Defaulting Lenders.



(1) If any Lender (a “Defaulting Lender”) shall for any reason fail to (a)
intentionally deleted, or (b)) pay its proportionate share of an advance to protect the Project or
the Lien of the Security Documents, any of the other Lenders may, but shall not be obligated to,
make all or a portion of the Defaulting Lender’s proportionate share of such advance,
provided that such Lender gives the Defaulting Lender and the Administrative Agent prior
notice of its intention to do so. The right to make such advances in respect of the Defaulting
Lender shall be exercisable first by the Lender holding the greatest proportionate share and
thereafter to each of the Lenders in descending order of their respective proportionate shares of
the Loans or in such other manner as the Majority Lenders (excluding the Defaulting Lender) may
agree on. Any Lender making all or any portion of the Defaulting Lender’s proportionate share of
the applicable Loan or advance in accordance with the foregoing terms and conditions shall be
referred to as a “Special Advance Lender”.



(2) In any case where a Lender becomes a Special Advance Lender (a) the Special Advance
Lender shall be deemed to have purchased, and the Defaulting Lender shall be deemed to have sold, a
senior participation in the Defaulting Lender’s respective Loan to the extent of the amount so
advanced (the “Advanced Amount”) bearing interest (including interest at the Default Rate,
if applicable) and (b) the Defaulting Lender shall have no voting rights under this Agreement or
any other Loan Documents so long as it is a Defaulting Lender. It is expressly understood and
agreed that each of the respective obligations under this Agreement and the other Loan Documents,
including losses incurred in connection with the Loan, including costs and expenses of enforcement,
advancing to preserve the Lien of the Mortgage or to preserve and protect the Project, shall be
without regard to any adjustment in the proportionate shares occasioned by the acts of a Defaulting
Lender. The Special Advance Lender shall be entitled to recover from the Defaulting Lender an
amount (the “Unpaid Amount”) equal to the applicable Advanced Amount, plus any unpaid
interest due and owing with respect thereto, less any repayments thereof made by the Defaulting
Lender immediately upon demand. The Defaulting Lender shall have the right to repurchase the
senior participation in its Loan from the Special Advance Lender at any time by the payment of the
Unpaid Amount.



(3) A Special Advance Lender shall (a) give notice to the Defaulting Lender, the
Administrative Agent and each of the other Lenders (provided that failure to deliver said notice to
any party other than the Defaulting Lender shall not constitute a default under this Agreement) of
the Advance Amount and the percentage of the Special Advance Lender’s senior participation in the
Defaulting Lender’s Loan and (b) in the event of the repayment of any of the Unpaid Amount by the
Defaulting Lender, give notice to the Defaulting Lender and the Administrative Agent of the fact
that the Unpaid Amount has been repaid (in whole or in part), the amount of such repayment and, if
applicable, the revised percentage of the Special Advance Lender’s senior participation. Provided
that the Administrative Agent has received notice of
such participation, the Administrative Agent shall have the same obligations to distribute
interest, principal and other sums received by the Administrative Agent with respect to a Special
Advance Lender’s senior participation as the Administrative Agent has with respect to the
distribution of interest, principal and other sums under this Agreement; and at the time of making
any distributions to the Lenders, shall make payments to the Special Advance Lender with respect to
a Special Advance Lender’s senior participation in the Defaulting Lender’s Loan out of the
Defaulting Lender’s share of any such distributions.


 


119









 





(4) A Defaulting Lender shall immediately pay to a Special Advance Lender all sums of any kind
paid to or received by the Defaulting Lender from Borrower, whether pursuant to the terms of this
Agreement or the other Loan Documents or in connection with the realization of the security
therefore until the Unpaid Amount is fully repaid. Notwithstanding the fact that the Defaulting
Lender may temporarily hold such sums, the Defaulting Lender shall be deemed to hold same as a
trustee for the benefit of the Special Advance Lender, it being the express intention of the
Lenders that the Special Advance Lender shall have an ownership interest in such sums to the extent
of the Unpaid Amount.



(5) Each Defaulting Lender shall indemnify, defend and hold the Administrative Agent and each
of the other Lenders harmless from and against any and all losses, damages, liabilities or expenses
(including reasonable attorneys’ fees and expenses and interest at the Default Rate) which they may
sustain or incur by reason of the Defaulting Lender’s failure or refusal to abide by its
obligations under this Agreement or the other Loan Documents, except to the extent a Defaulting
Lender became a Defaulting Lender due to the gross negligence or willful misconduct of the
Administrative Agent and/or any Lender. The Administrative Agent shall, after payment of any
amounts due to any Special Advance Lender pursuant to the terms of subsection (3) above,
setoff against any payments due to such Defaulting Lender for the claims of the Administrative
Agent and the other Lenders pursuant to this indemnity.



Section 15.13 Liability of the Administrative Agent. The Administrative Agent shall not have
any liabilities or responsibilities to Borrower on account of the failure of any Lender (other than
the Administrative Agent in its capacity as a Lender) to perform its obligations hereunder or to
any Lender on account of the failure of Borrower to perform its obligations hereunder or under any
other Loan Document.



Section 15.14 Transfer of Agency Function. Without the consent of Borrower or any Lender, the
Administrative Agent may at any time or from time to time transfer its functions as the
Administrative Agent hereunder to any of its offices wherever located in the United States;
provided that the Administrative Agent shall promptly notify Borrower and the Lenders
thereof



ARTICLE 16




AMENDMENT AND RESTATEMENT




This Agreement amends, restates, supersedes and replaces the Existing Loan Agreement in its
entirety, and all references in the Loan Documents to the “Loan Agreement” shall hereafter
refer to this Agreement. Except as expressly set forth in this Agreement and/or in any
amendments or modifications to the other Loan Documents entered into on or after the date
hereof, the other Loan Documents shall remain in full force and effect in accordance with their
respective terms.


 


120









 





ARTICLE 17




RELEASE




In consideration of Administrative Agent’s and each Lender’s execution and delivery of this
Agreement, Borrower and (by its execution of the Joinder attached hereto) each Joinder Party, on
behalf of itself and its heirs, successors and assigns (collectively, the “Releasing
Parties”), remises, releases, acquits, satisfies and forever discharges Administrative Agent
and each Lender, Administrative Agent’s and each Lender’s predecessors in interest, and all of the
respective past, present and future officers, directors, employees, agents, servicers, attorneys,
representatives, participants, heirs, successors and assigns of Administrative Agent and each
Lender and Administrative Agent’s and each Lender’s predecessors in interest (collectively,
“Lender Parties”), from any and all manner of debts, accountings, bonds, warranties,
representations, covenants, promises, contracts, controversies, agreements, liabilities,
obligations, expenses, damages, judgments, executions, actions, claims, demands and causes of
action of any nature whatsoever, at law or in equity, known or unknown, either now accrued or
subsequently maturing, which Borrower or any of the other Releasing Parties now has or hereafter
can, shall or may have by reason of any matter, cause or thing, from the beginning of the world to
and including the date of this Agreement arising out of or relating to (a) the Loans, including,
but not limited to, its administration or funding; (b) the Loan Documents; (c) the Project or its
development, financing and operation; and (d) any other agreement or transaction between Borrower
or any of the other Releasing Parties and any of Lender Parties relating to the matters described
in (a) through (c) above. Borrower and (by its execution of the Joinder attached hereto) each
Joinder Party, for itself and the other Releasing Parties, covenants and agrees never to institute
or cause to be instituted or continue prosecution of any suit or other form of action or proceeding
of any kind or nature whatsoever against any of Lender Parties by reason of or in connection with
any of the foregoing matters, claims or causes of action.



[Signature Pages Follow]



 


121









 






EXECUTED as of the date first written above.



	 	 	 	 	 
	LENDER:	EUROHYPO AG, NEW YORK BRANCH

 	 
	 	By:  	/s/
John Lippmann 	 
	 	 	Name:  	John
Lippmann 	 
	 	 	Title:  	Director 	 



	 	 	 	 	 
	 	By:  	
 /s/ Stephen Cox 	 
	 	 	Name:  	Stephen
Cox 	 
	 	 	Title:  	Director 	 





Address for Notices to Eurohypo AG,

New York Branch:




Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attention: Peter Tzelios

Telecopier No.: (866) 267-7680




With a copies to:




Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attention: Head of Portfolio Operations

Telecopier No.: (866) 267-7680




and:




Morrison & Foerster LLP

555 West Fifth Street, Suite 3500

Los Angeles, California 90013

Attention: Marc D. Young, Esq.

Telecopier No.: (213) 892-5454


 


S-1









 





	 	 	 	 	 
	BORROWER:	1100 WEST PROPERTIES, LLC,

a Delaware limited liability company

 	 
	 	By:  	/s/
Marc Gordon 	 
	 	 	Name:  	Marc
Gordon 	 
	 	 	Title:  	Vice
President 	 



	 	 	 	 	 
	 	By:  	
/s/ Abraham Galbut 	 
	 	 	Name:  	Abraham
Galbut 	 
	 	 	Title:  	President 	 





Address for Notices:




c/o Sanctuary Holdings

4770 Biscayne Boulevard

Miami, Florida 33137

Attention: Abraham Galbut

Telecopier: (786) 427-6203




With copies to:




Mondrian Miami Investment LLC

c/o Morgans Hotel Group

475 10th Avenue

New York, New York 10018

Attention: Marc Gordon

Telecopier: (212) 277-4270




- and -




Greenburg Traurig

1221 Brickell Avenue

Miami, Florida 33131

Attention: Steven Goldman, Esq.

Telecopier: (305) 961-5561




- and -




McDermott Will & Emery LLP

340 Madison Avenue

New York, New York 10017

Attention: Keith M. Pattiz, Esq.

Telecopier: (212) 547-5444


 


S-2









 





SOLE MEMBER FOR PURPOSES

OF SECTIONS 9.6 and 9.8



1100 WEST HOLDINGS, LLC,

a Delaware limited liability company




	By:	 	 1100 WEST HOLDINGS II, LLC,

a Delaware limited liability company






	 	By:	 	 MONDRIAN MIAMI INVESTMENT LLC,

a Delaware limited liability company






	 	By:	 	MORGANS GROUP LLC,

a Delaware limited liability company





	 	 	 	 	 

	 	By:  	
/s/ Marc Gordon 	 
	 	 	Name:  	Marc
Gordon 	 
	 	 	Title:  	Authorized
Signatory 	 




	 	By: 	 	SANCTUARY WEST AVENUE LLC,

a Delaware limited liability company





	 	 	 	 	 
	 	By:  	
/s/ Abraham Galbut 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




 


S-3









 








	 	 	 	 	 
	ADMINISTRATIVE AGENT:	
EUROHYPO AG, NEW YORK BRANCH, as

Administrative Agent

 	 
	 	By:  	/s/
John Lippmann 	 
	 	 	Name:  	John
Lippmann 	 
	 	 	Title:  	Director 	 



	 	 	 	 	 
	 	By:  	

/s/ Stephen Cox 	 
	 	 	Name:  	Stephen
Cox 	 
	 	 	Title:  	Director 	 





Address for Notices to Eurohypo AG,

New York Branch:




Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attention: Peter Tzelios

Telecopier No.: (866) 267-7680




With a copies to:




Eurohypo AG, New York Branch

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attention: Head of Portfolio Operations

Telecopier No.: (866) 267-7680




and:




Morrison & Foerster LLP

555 West Fifth Street, Suite 3500

Los Angeles, California 90013

Attention: Marc D. Young, Esq.

Telecopier No.: (213) 892-5454



 


S-4









 







	 	 	 	 	 
	LENDER:	CIT LENDING SERVICES CORPORATION,

a Delaware corporation

 	 
	 	By:  	/s/
Raymond  M. McGowan 	 
	 	 	Name:  	Raymond
M. McGowan 	 
	 	 	Title:  	Vice
President, Portfolio Management 	 





Address for notice purposes:




c/o CIT Group Inc.

11 West 42nd Street, 7th Floor

New York, New York 10036

Facsimile:     (212) 461-5632

Attention:    Vice President, Portfolio




Management, Real Estate Group




With a copy to:




c/o CIT Group Inc.

505 Fifth Avenue, 14th Floor

New York, New York 10017

Facsimile: (212) 771-9520

Attention:   Stephen Millas, Vice President &

                    
Chief Counsel, Commercial Real Estate




With a further copy to:




Brown Rudnick LP

7 Times Square, 47th Floor

New York, New York 10036

Facsimile: (212) 938-2906

Attention: Paul W. Cicchetti, Esq.




 


S-5









 







	 	 	 	 	 
	LENDER:	KBC BANK NV

 	 
	 	By:  	/s/
Nicholas
A. Philippides 	 
	 	 	Name:  	Nicholas A.
Philippides 	 
	 	 	Title:  	Assistant
Vice President 	 



	 	 	 	 	 
	 	By:  	
/s/ Sandra T. Johnson 	 
	 	 	Name:  	Sandra
T. Johnson 	 
	 	 	Title:  	Managing
Director 	 





Address for notice purposes:




KBC Bank NV

1177 Avenue of the Americas, 8th Floor

New York, New York 10036

Attention: Nicholas Phillipides

Telecopier No.: (212) 541-0793




With a copy to:




Brown Rudnick LP

7 Times Square, 47th Floor

New York, New York 10036

Attention: Paul W. Cicchetti, Esq.

Facsimile: (212) 938-2906


 


S-6









 





JOINDER




By executing this Joinder (the “Joinder”), each of the undersigned (collectively
referred to herein as the “Joinder Parties”; individually referred to herein as
“Joinder Party”) hereby (i) unconditionally, irrevocably and jointly and severally guaranty
the performance by Borrower of Borrower’s obligations with respect to Borrower’s indemnification
obligations under Sections 9.12(2)(a) through and including 9.12(2)(e) and
Section 12.5 of this Agreement and all obligations and liabilities for which Borrower is
personally liable under Section 13.1 of this Agreement, (ii) agrees to cause Borrower and
Sole Member to at all times be Single Purpose Entities and to otherwise comply with each of the
covenants contained in Section 9.6 of this Agreement and (iii) joins in and agrees to be
bound by the provisions of Article 17 hereof. This Joinder is a guaranty of full and
complete payment and performance and not of collectability. The Joinder Parties are (a) Abraham
Galbut, an individual, (b) Keith Menin, an individual, (c) Seth Frohlich, an individual, and (d)
Morgans Group LLC, a Delaware limited liability company.



(2) Waivers. To the fullest extent permitted by Applicable Law, Joinder Parties waive
all rights and defenses of sureties, guarantors, accommodation parties and/or co-makers and agree
that their obligations under this Joinder shall be primary, absolute and unconditional, and that
their obligations under this Joinder shall be unaffected by any of such rights or defenses,
including:



(a) the unenforceability of any Loan Document against Borrower and/or any guarantor or other
Joinder Party;



(b) any release or other action or inaction taken by the Administrative Agent or any Lender
with respect to the collateral under any Loan Document, the Loan, Borrower, any guarantor and/or
other Joinder Party, whether or not the same may impair or destroy any subrogation rights of any
Joinder Party, or constitute a legal or equitable discharge of any surety or indemnitor;



(c) the existence of any collateral or other security for the Loan, and any requirement that
the Administrative Agent or any Lender pursue any of such collateral or other security, or pursue
any remedies it may have against Borrower, any guarantor and/or any other Joinder Party;



(d) any requirement that the Administrative Agent or any Lender provide notice to or obtain a
Joinder Party’s consent to any modification, increase, extension or other amendment of the Loan,
including the guaranteed obligations;



(e) any right of subrogation (until payment in full of the Loan, including the guaranteed
obligations, and the expiration of any applicable preference period and statute of limitations for
fraudulent conveyance claims);




(f) any defense based on any statute of limitations;



(g) any payment by Borrower to the Administrative Agent or any Lender if such payment is held
to be a preference or fraudulent conveyance under bankruptcy laws or the Administrative Agent or
such Lender is otherwise required to refund such payment to Borrower
or any other party; and



(h) any voluntary or involuntary bankruptcy, receivership, insolvency, reorganization or
similar proceeding affecting Borrower or any of its assets.


 


1









 






(3) Agreements. Joinder Parties further represent, warrant and agree that:



(a) Neither the exercise of any remedies by the Administrative Agent or any Lender nor any
other action taken by the Administrative Agent or any Lender shall affect or in any manner
alleviate the obligations of the Joinder Parties hereunder.



(b) The obligations under this Joinder are enforceable against each such party and are not
subject to any defenses, offsets or counterclaims.



(c) The provisions of this Joinder are for the benefit of the Administrative Agent, Lenders
and their respective successors and assigns.



(d) The Administrative Agent and Lenders shall have the right to (i) renew, modify, extend or
accelerate the Loan, (ii) pursue some or all of its remedies against Borrower, any guarantor or any
Joinder Party, (iii) add, release or substitute any collateral for the Loan or party obligated
thereunder, and (iv) release Borrower, any guarantor or any Joinder Party from liability, all
without notice to or consent of any Joinder Party (or other Joinder Party) and without affecting
the obligations of any Joinder Party (or other Joinder Party) hereunder.



(e) Each Joinder Party shall deliver to the Administrative Agent (for delivery to the Lenders)
not later than one hundred and twenty (120) days after the close of each fiscal year of such
Joinder Party, annual financial statements of such Joinder Party for each such fiscal year, such
financial statements to be substantially in the form of the financial statements delivered by such
Joinder Party to the Administrative Agent in connection with the closing of the Loans or such other
form reasonably acceptable to the Administrative Agent, including (other than with respect to an
individual) a balance sheet and statement of profit and loss certified by such Joinder Party in
accordance with Section 8.1 of this Agreement.



(f) To the maximum extent permitted by law, each Joinder Party hereby knowingly, voluntarily
and intentionally waives the right to a trial by jury in respect of any litigation based hereon.
This waiver is a material inducement to the Administrative Agent and the Lenders to enter into this
Agreement.



(g) The obligations of the Joinder Parties are joint and several, and the Administrative Agent
and the Lenders shall not be required to pursue or exhaust any remedies against any Joinder Party
or Borrower as a condition to the pursuit and realization of remedies against either Joinder Party.



(h) In the event Borrower files or has filed against it any case in bankruptcy or similar
proceedings, the Administrative Agent and the Lenders shall not be required to enforce this Joinder
in connection with such proceedings and shall not be required to appear in such proceedings prior
to enforcing the provisions of this Joinder.


 


2









 





(4) Counterparts. This Joinder may be executed in multiple counterparts, each of
which shall constitute an original, but all of which shall constitute one document.



(5) Governing Law. This Joinder shall be governed by the laws of the State of New
York.



(6) Amendment and Restatement. This Joinder amends, supersedes and replaces in its
entirely the Joinder attached to the Existing Loan Agreement.



[Signature Pages Follow]



 


3









 






Executed and sealed as of November
 25, 2008.



	 	 	 	 	 	 	 
	 	 	JOINDER PARTIES:	 	 
	 
	 	/s/ 	 	Abraham Galbut 	 	 
	 	 	 	 	 
	 	 	ABRAHAM GALBUT	 	 
	 
	 	/s/ 	 	Keith Menin 	 	 
	 	 	 	 	 
	 	 	KEITH MENIN	 	 
	 
	 	/s/ 	 	Seth Frohlich 	 	 
	 	 	 	 	 
	 	 	SETH FROHLICH	 	 
	 
	 	 	 	 	 	 
	 	 	MORGANS GROUP LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Morgans Hotel Group Co.,	 	 
	 

	 	 	 	a Delaware corporation,	 	 
	 

	 	 	 	its managing member	 	 






	 	 	 	 	 
	 	By:  	
/s/ Marc Gordon 	 
	 	 	Name:  	Marc
Gordon 	 
	 	 	Title:  	CIO 	 



 


S-1









 







EXHIBIT A




LEGAL DESCRIPTION OF PROJECT





Parcel 1:



Lots 7 and 8 and the North 50 feet of Lot 9, Block 80, SUBDIVISION OF BLOCK EIGHTY OF THE ALTON
BEACH REALTY COMPANY, A PART OF ALTON BEACH BAY FRONT SUBDIVISION, according to the Plat thereof,
as recorded in Plat Book 6, at Page 12, of the Public Records of Miami-Dade County, Florida; also
described as:



Commence at the Northwest corner of West Avenue and 10th Street in Miami Beach, Florida,
said corner also being the intersection of Tangents at the Southeast corner of Block 80, and run
Northerly along the Easterly line of said Block 80, along the Westerly line of West Avenue, a
distance of 350.00 feet to the Southerly line of the North 50.00 feet of said Lot 9 and the Point
of Beginning (P.O.B.) of the tract of land hereinafter described: Thence continue along the
Easterly line of said Block 80, along the Westerly line of West Avenue, a distance of 299.85 feet
to the Northeast corner of the above referenced Lot 7; thence deflecting 90°00’00” to the left, run
Westerly along the Northerly line of said Lot 7, a distance of 337.96 feet to the face of a
concrete bulkhead cap and the face of deck; thence run Southerly along the face of deck and cap, a
distance of 301.70 feet to the Southerly line of the North 50.00 feet of Lot 9; thence run Easterly
along the Southerly line of the North 50.00 feet of said Lot 9, a distance of 304.67 feet to the
Point of Beginning.



Together with the easement rights as contained in Master Declaration of Covenants, Conditions and
Restrictions for Mirador South Beach, filed December 30, 2004, in Official Records Book 22959, at
Page 886, of the Public Records of Miami-Dade County, Florida.



Parcel 2:



Condominium Unit CU12, MIRADOR 1000, A CONDOMINIUM, together with an undivided interest in the
common elements, according to the Declaration of Condominium thereof, as recorded in Official
Records Book 22959, at Page 1727, as amended from time to time, of the Public Records of Miami-Dade
County, Florida.



Together with the Leasehold Estate, as created by Sovereignty Submerged Lands Lease Renewal and
Modification to Reflect Change in Ownership between the Board of Trustees of the Internal
Improvement Trust Fund of the State of Florida, as Lessor, and Mirador 1000, LLC, a Delaware
limited liability company, as Lessee, filed December 16, 2004, in Official Records Book 22913, at
Page 825, as assigned by Assignment of Submerged Land Lease, dated August 7, 2006, recorded August
8, 2006 in Official Records Book 24801, Page 3362, as modified by that certain Sovereignty
Submerged Lands Lease Modification to Reflect Change in Ownership and Change in Upland Use
(No.130004276) between the Board of Trustees of the Internal Improvement Trust Fund of the State of
Florida, as Lessor, and 1100 West Properties, LLC, a Delaware limited liability company, as Lessee,
filed December 1, 2006, in Official Records Book 25146, at Page 3269, all of the Public Records of
Miami-Dade County, Florida.


 


A-1









 





Parcel 3:



Condominium Unit CU10, MIRADOR 1200, A CONDOMINIUM, together with an undivided interest in the
common elements, according to the Declaration of Condominium thereof, as recorded in Official
Record Book 23543, at Page 3930, as amended from time to time, of the Public Records of Miami-Dade
County, Florida.



Together with the Leasehold Estate, as created by Sovereignty Submerged Lands Lease Renewal between
the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida, as Lessor,
and 1200 West Realty, LLC, a Delaware limited liability company, as Lessee, filed January 12, 2006,
in Official Records Book 24141, at Page 1866, as assigned by Assignment of Submerged Land Lease,
dated August 7, 2006, recorded August 8, 2006 in Official Records Book 24801, Page 3368, as
modified by that certain Sovereignty Submerged Lands Lease Modification to Reflect Change in
Ownership and Change in Upland Use (No.13000120T) between the Board of Trustees of the Internal
Improvement Trust Fund of the State of Florida, as Lessor, and 1100 West Properties, LLC, a
Delaware limited liability company, as Lessee, filed December 1, 2006, in Official Records Book
25146, at Page 3282, all of the Public Records of Miami-Dade County, Florida.




 


A-2









 







EXHIBIT B




RESERVED





 


B-1









 







EXHIBIT C




RESERVED





 


C-1









 







EXHIBIT D




FORM OF ASSIGNMENT AND ACCEPTANCE




Reference is made to the Amended and Restated Loan
Agreement dated as of November [_____], 2008
(as amended and in effect on the date hereof, the “Agreement”), between 1100 WEST
PROPERTIES, LLC, a Delaware limited liability company, the Lenders named therein, and EUROHYPO AG,
NEW YORK BRANCH, as Administrative Agent for the Lenders. Terms defined in the Agreement are used
herein with the same meanings. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Acceptance as if set forth herein in full.



The Assignor named below hereby sells and assigns, without recourse, to the Assignee named
below, and the Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Assignment Date set forth below, the interests set forth below (the
“Assigned Interest”) in the Assignor’s rights and obligations under the Agreement,
including, without limitation, the interests set forth below in the Commitment of the Assignor on
the Assignment Date and Loans owing to the Assignor which are outstanding on the Assignment Date,
together with (a) interest on the assigned Loans from and after the Assignment Date and (b) the
amount, if any, set forth below of the fees accrued to the Assignment Date for account of the
Assignor. The Assignee hereby acknowledges receipt of a copy of the Agreement. From and after the
Assignment Date (i) the Assignee shall be a party to and be bound by the provisions of the
Agreement and, to the extent of the interests assigned by this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the
interests assigned by this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Agreement and the Agency Agreement.



This Assignment and Acceptance is being delivered to the Administrative Agent together with,
if the Assignee is not already a Lender under the Agreement, an administrative questionnaire in the
form supplied by the Administrative Agent, duly completed by the Assignee. The
[Assignor][Assignee] shall pay the fee payable to the Administrative Agent pursuant to
Section 12.24(2)(e) of the Agreement.



This Assignment and Acceptance shall be governed by and construed in accordance with the laws
of the State of New York.



The Assignor represents and warrants to the Assignee that the Assignor is the legal and
beneficial owner of the Assigned Interest and has not created any adverse interest therein. The
Assignor and the Assignee represent and warrant to each other that they are, respectively,
authorized to execute and deliver this Assignment and Acceptance.


 


D-1









 





Date of Assignment:



Legal Name of Assignor:



Legal Name of Assignee:



Assignee’s Address for Notices:



Effective Date of Assignment (“Assignment Date”)1:




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Percentage Assigned of
Facility/Commitment
(set forth, to at
least 4 decimals, as a
percentage of the
Facility and the
aggregate Commitments
of all Lenders
thereunder)

	 

	 	Principal Amount Assigned
	 	 	 	 
	Current Outstanding

	 	 
	 	 	 	 
	Loans Assigned:

	 	 	$	 	 	% 2

	Future Funding 

Commitment: 
	 	 	 	 	 	 	 	 
	[Fees Assigned (if any):]

	 	 	$	 	 	 	%	 






The terms set forth above and below are hereby agreed to:



	 	 	 	 	 
	 	
[NAME OF ASSIGNOR], as Assignor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



	 	 	 	 	 
	 	
[NAME OF ASSIGNEE], as Assignee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



The undersigned hereby consent to the within assignment: 3



 








	 	 	 
	1	 	Must be at least five Business Days after execution
hereof by all required parties.
	 
	2	 	Delete if no future advances are involved.



 


D-2









 









	 	 	 	 	 
	 	EUROHYPO AG, NEW YORK BRANCH,

as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



	 	 	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









	 	 	 
	3	 	Consent to be included to the extent required by
Section 11.24(2) of the Agreement.



 


D-3









 









ANNEX 1




STANDARD TERMS AND CONDITIONS FOR




ASSIGNMENT AND ACCEPTANCE






1. Representations and Warranties.



1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the
Transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Loan Agreement or any
other Loan Document (as defined in the Agreement), (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries or Affiliates or any
other Person obligated in respect of any Loan Document or (iv) the performance or observance by
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.



1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Acceptance and to consummate the Transactions contemplated hereby and to become a Lender under the
Agreement, (ii) it satisfies the requirements, if any, specified in the Agreement that are required
to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and
after the Assignment Date, it shall be bound by the provisions of the Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 8.1 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, (v) it satisfies the requirements of an Eligible Assignee
as defined in the Agreement, and (vi) if it is a Non-U.S. Person, attached to the Assignment and
Acceptance is any documentation required to be delivered by it pursuant to the terms of the
Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it
will perform in accordance with their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Lender.


 


D-4









 





2. Payments. From and after the Assignment Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Assignment Date and to the Assignee for amounts which have accrued from and after the
Assignment Date.



3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Acceptance may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the law of the State of New York.




 


D-5









 







EXHIBIT E




FORM OF NOTICE OF CONVERSION/CONTINUATION




                    , 200_____ 






Eurohypo AG, New York Branch,

   as Administrative Agent

1114 Avenue of the Americas, 29th Floor

New York, New York 10036

Attn: Loan Servicing





	Re:	 	 Amended and Restated Loan Agreement dated as of November [_____], 2008 (as the same may be
amended, modified or supplemented from time to time, the “Agreement”) by and among
1100 WEST PROPERTIES, LLC, a Delaware limited liability company (the “Borrower”), the
lenders from time to time party to the Agreement (the “Lenders”), and EUROHYPO AG, NEW
YORK BRANCH, as Administrative Agent on behalf of the Lenders (the “Administrative
Agent”)





Ladies and Gentlemen:



Reference is made to the Agreement. Capitalized terms used in this Notice of
Conversion/Continuation without definition have the meanings specified in the Agreement.



Pursuant to Section 2.8(5) of the Agreement, the Borrower hereby elects to convert or continue
the loans described in attached Schedule 1 (the “Loans”). In connection therewith,
the Borrower and the undersigned authorized officer of the Borrower hereby certify that:



(1) Representations and Warranties. All representations and warranties of the
Borrower contained in the Loan Documents, including those contained in Article 7 of the Agreement,
are true and correct as of the date hereof and shall be true and correct on the date of the
continuation/conversion of the Loans, both before and after giving effect to such
continuation/conversion;



(2) No Potential Default/Event of Default. No Potential Default or Event of Default
exists as of the date hereof or will result from the continuation/conversion of the Loans; and


 


E-1









 





(3) No Material Adverse Effect. No act, omission, change or event which has a
Material Adverse Effect has occurred since the date of the Agreement.



	 	 	 	 	 
	 	
1100 WEST PROPERTIES, LLC,

a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



	 	 	 	 	 
	 	By:  	

 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


E-2









 





	 	 	 	 	 



Schedule 1

to Notice of Conversion/Continuation




LOAN TO BE CONVERTED OR CONTINUED





	A.	 	All conversions and continuations must be of a Loan, or portion thereof, in a principal
amount of $1,000,000 or a multiple of $100,000 in excess thereof.






	B.	 	Conversions/continuations to a Eurodollar Loan under paragraphs (2) and (3) below are not
permitted if, after giving effect to thereto, (a) there would be more than five (5) different
Eurodollar Loans in effect, or (b) the aggregate outstanding principal amount of all
Eurodollar Loans would be reduced to be less than $1,000,000.






	 	(1)	 	Conversion of a Eurodollar Loan into a Base Rate Loan.
	 
	 	 	 	The following Eurodollar Loan to a Base Rate Loan:






	 	 	 	 	 
	Amount:
	 	$	                    	 
	Requested Conversion Date:

(must be a Business Day at least three (3)
Business Days after date of notice)
	 	 	                    	 
	Last day of current Interest Period:
	 	 	                    	 







	 	(2)	 	Conversion of a Base Rate Loan into a Eurodollar Loan.
	 
	 	 	 	The following Base Rate Loan to a Eurodollar Loan:





	 	 	 	 	 
	Amount:
	 	$	                    	 
	Requested Conversion Date:
(must be a Business Day at least three
(3) Business Days after date of notice)
	 	 	                    	 
	Requested Interest Period:

(14 days or 1, 2, 3, or 6 months)
	 	 	                    	 







	 	(3)	 	Continuation of a Eurodollar Loan into a Subsequent Interest Period.
	 
	 	 	 	The following Eurodollar Loan into a subsequent Interest Period:





	 	 	 	 	 
	Amount:
	 	$	                    	 
	Last day of current Interest Period:

(must be a Business Day at least three
(3) Business Days after date of notice)
	 	 	                    	 
	Requested Interest Period:

(14 days or 1, 2, 3, or 6 months)
	 	 	                    	 







 


E-3









 







SCHEDULE 1(a)




COMMITMENTS




	 	 	 	 	 
	LENDER	 	COMMITMENT	 
	 
	 	 	 	 
	CIT LENDING SERVICES CORPORATION
	 	 	31.78	%
	 
	 	 	 	 
	KBC BANK NV
	 	 	31.02	%
	 
	 	 	 	 
	EUROHYPO AG, NEW YORK BRANCH
	 	 	37.20	%







 


Schedule 1(a) - 1









 







Schedule 1(b)




MINIMUM SALES PRICE SCHEDULE





 


Schedule 1(b) - 1









 







Schedule 1(C)




UNIT RELEASE SCHEDULE





 


Schedule 1(c) - 1









 







SCHEDULE 2.1




DISBURSEMENT AND COMPLETION CONDITIONS




Part A – Disbursement Conditions




Part B – Construction Completion Conditions




PART A. DISBURSEMENT CONDITIONS




Each disbursement from the Construction Completion Fund shall be subject to the
Administrative Agent’s receipt, review, approval and/or confirmation of the following, each in form
and content satisfactory to the Administrative Agent in its sole discretion:



1. There shall exist no Potential Default or Event of Default (currently and after giving
effect to the requested disbursement).



2. The representations and warranties contained in this Loan Agreement and in all other Loan
Documents are true and correct.




3. Intentionally deleted.



4. Borrower shall have paid the Administrative Agent’s (and the Lenders’) costs and expenses
in connection with such advance or disbursement (including title charges, and costs and expenses of
the Administrative Agent’s inspecting engineer and attorneys).



5. No change shall have occurred in the financial condition of Borrower or any Borrower Party,
which would have, in the Administrative Agent’s judgment, have a material adverse effect on the
Loans, the Project, or Borrower’s or any Borrower Party’s ability to perform its obligations under
the Loan Documents.



6. No condemnation or adverse possession, as determined by the Administrative Agent, zoning or
usage change proceeding shall have occurred or shall have been threatened against the Project; the
Project shall not have suffered any damage by fire or other casualty which has not been repaired or
is not being restored in accordance with this Agreement; no law, regulation, ordinance, moratorium,
injunctive proceeding, restriction, litigation, action, citation or similar proceeding or matter
shall have been enacted, adopted, or threatened by any governmental authority, which would have, in
the Administrative Agent’s judgment, a material adverse effect on the Project or Borrower’s or any
Borrower Party’s ability to perform its obligations under the Loan Documents.




7. Disbursements from the Construction Completion Fund shall only be made on a Payment Date.


 


Schedule 2.1 - 1









 





8. Each request for a disbursement shall specify the amount requested, shall be on forms
satisfactory to the Administrative Agent, and, shall be accompanied by appropriate invoices, bills
paid affidavits, lien waivers, title updates, endorsements to the title insurance, and other
documents as may be required by the Administrative Agent. Disbursements from the
Construction Completion Fund may be made, at the Administrative Agent’s election, either:
(a) in reimbursement for expenses paid by Borrower or (b) for payment of expenses incurred and
invoiced but not yet paid by Borrower. The Administrative Agent, at its option and without further
direction from Borrower, may make disbursements to the Person to whom payment is due or through an
escrow satisfactory to the Administrative Agent. The Administrative Agent may, at Borrower’s
expense, conduct an audit, inspection, or review of the Project to confirm the amount of any
disbursement from the Construction Completion Fund.



9. Prior to any disbursement from the Construction Completion Fund, Borrower shall have
submitted to the Administrative Agent and the Administrative Agent shall have approved (a) any
changes to the Plans and Specifications and the Project Budget, and (b) copies of all construction,
architectural and engineering contracts relating to the Building Conversion, in each case certified
by Borrower as being true, correct and complete, together with undertakings of such contractors,
architects and engineers to continue performance on behalf of the Administrative Agent (on behalf
of the Lenders), together with bonds with respect to any subcontracts, if bonds are required
pursuant to such subcontracts.



10. All improvements constructed by Borrower prior to the date a disbursement is requested
shall be completed to the satisfaction of the Administrative Agent and the Administrative Agent’s
engineer and in accordance with the plans and budget for such improvements, as approved by the
Administrative Agent, and all legal requirements.



11. Borrower shall not use any portion of any disbursement for payment of any other cost
except as specifically set forth in a request for disbursement approved by the Administrative Agent
in writing.



12. Each disbursement from the Construction Completion Fund, except for a final improvements
disbursement, shall be in the amount of actual costs incurred for each line item as shown on the
Project Budget less ten percent (10%) of such costs as retainage (other than for materials for
which no retainage shall be required) to be disbursed upon completion of such line item to the
satisfaction of Administrative Agent. Disbursements may include deposits for materials so long as
(a) such deposits do not exceed one hundred percent (100%) of the cost for materials which have
been delivered to the Property, (b) fifty percent (50%) of the cost of materials which have not
been delivered to the Property having a total cost of not more than $4,000,000; and (c) ten percent
(10%) of the total cost of all other materials.



13. No portion of the Construction Completion Fund will be disbursed for materials stored at
the Project unless Borrower furnishes the Administrative Agent satisfactory evidence that such
materials are properly stored and secured at the Project.


 


Schedule 2.1 - 2









 





PART B. CONSTRUCTION COMPLETION CONDITIONS




The following shall have been completed to the satisfaction of the Administrative Agent in its
discretion prior to the occurrence of Construction Completion:




1. The Hotel Opening shall have occurred by the Hotel Opening Deadline; and




2. The Building Conversion shall have occurred by the Construction Completion Deadline.



3. The Administrative Agent shall have received the following items in connection with the
Building Conversion:



(a) Evidence of the approval by the applicable Governmental Authorities of the Project for
operation in accordance with the Plans and Specifications to the extent any such approval is a
condition of the lawful use of Project;



(b) Endorsements to the Title Policy which are satisfactory to the Administrative Agent and
which describe the improvements located on the Project (CLTA 116 series) and insure the lien-free
completion of such improvements (CLTA 101 series, as required by the Administrative Agent);



(c) Unconditional waivers of lien and sworn statements from all contractors, subcontractors,
materialmen, suppliers and vendors with respect to the Building Conversion, in each case in
compliance with the Applicable Laws;



(d) Certificates from Borrower and its architect to Administrative Agent and the Lenders
stating that (i) the Building Conversion (A) has been substantially completed in accordance with
the Plans and Specifications and (B) is available for occupancy, and (ii) the Project complies with
all applicable building codes;



(e) Violation searches, if available and requested by the Administrative Agent, with
Governmental Authorities indicating no notices of violation have been issued with respect to the
Project;



(f) Current searches of all Uniform Commercial Code financing statements filed with the
Secretary of State of the state of formation/organization of Borrower and the office of Recorder of
Miami County in the State of Florida, and the Office of the Delaware Secretary of State, showing
that no Uniform Commercial Code financing statements are filed or recorded against Borrower in
which the collateral is personal property or fixtures located on the Project or used in connection
with the Project other than financing statements with respect to the Loans;


 


Schedule 2.1 - 3









 






(g) A certificate of an Authorized Officer of Borrower certifying that:




(i) no condemnation of any portion of the Project or any action which could result in a
relocation of any roadways abutting the Project or the denial of access, which, in the
Administrative Agent’s sole judgment, adversely affects the Lenders’
security or the operation of the Project, has commenced or, to the best of Borrower’s
knowledge, is contemplated by any Governmental Authority;




(ii) all fixtures, attachments and equipment necessary for the operation of the Hotel
Improvements have been installed or incorporated into the Project and are operational and in
good working order, free from defects; all guarantees and warranties have been
transferred/assigned to Borrower; and Borrower is the absolute owner of all of said property
free and clear of all Liens; and




(iii) all costs and expenses relating to such Building Conversion have been paid in
full.




(h) Evidence that all of the Licenses have been obtained and are in full force and effect.




 


Schedule 2.1 - 4









 







SCHEDULE 2.4(1)




WIRE INSTRUCTIONS




Bank of New York




ABA#        




A/C#        




F/B/O: Eurohypo




Re: Mondrian Miami




Attention: Valerie Rodriguez        




 


Schedule 2.4 - 1









 







SCHEDULE 7.23




PROJECT BUDGET




Schedule 7.23





 


 









 







SCHEDULE 7.27




ORGANIZATIONAL CHART




Schedule 7.27