Exhibit 10.45





Exhibit 10.45




AMENDED AND RESTATED

MEZZANINE LOAN AGREEMENT




Between



1100 West Holdings, LLC,



a Delaware limited liability company




as Borrower




The Lenders Party Hereto




as Lenders




and



Eurohypo AG, New York Branch




as Administrative Agent




Dated 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
	 	 	30	 
	 
	 	 	 	 
	Section 2.1 The Commitments, Loans and Notes
	 	 	30	 
	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
	 	 	35	 
	Section 2.6 Exit Fee
	 	 	41	 
	Section 2.7 Application of Operating Revenues; Cash Management
	 	 	41	 
	Section 2.8 Payments; Pro Rata Treatment; Etc.
	 	 	41	 
	Section 2.9 Yield Protection; Etc.
	 	 	46	 
	 
	 	 	 	 
	ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS
	 	 	51	 
	 
	 	 	 	 
	Section 3.1 Insurance
	 	 	51	 
	Section 3.2 Use and Application of Insurance Proceeds
	 	 	52	 
	Section 3.3 Casualty and Condemnation
	 	 	52	 
	 
	 	 	 	 
	ARTICLE 4 RESERVES
	 	 	53	 
	 
	 	 	 	 
	Section 4.1 Interest Reserve Fund
	 	 	53	 
	Section 4.2 Mortgage Loan Reserves
	 	 	55	 
	 
	 	 	 	 
	ARTICLE 5 ENVIRONMENTAL MATTERS
	 	 	55	 
	 
	 	 	 	 
	Section 5.1 Certain Definitions
	 	 	55	 
	Section 5.2 Representations and Warranties on Environmental Matters
	 	 	56	 
	Section 5.3 Covenants on Environmental Matters
	 	 	57	 
	Section 5.4 Allocation of Risks and Indemnity
	 	 	58	 
	Section 5.5 No Waiver
	 	 	59	 
	 
	 	 	 	 
	ARTICLE 6 LEASING MATTERS
	 	 	59	 
	 
	 	 	 	 
	Section 6.1 Representations and Warranties on Leases
	 	 	59	 
	Section 6.2 Restaurant Lease and Future Lease
	 	 	59	 
	Section 6.3 Covenants
	 	 	60	 
	 
	 	 	 	 
	ARTICLE 7 REPRESENTATIONS AND WARRANTIES
	 	 	60	 
	 
	 	 	 	 
	Section 7.1 Organization and Power
	 	 	60	 
	Section 7.2 Validity of Loan Documents
	 	 	60	 
	Section 7.3 Liabilities; Litigation
	 	 	61	 
	Section 7.4 Taxes and Assessments
	 	 	61	 
	Section 7.5 Other Agreements; Defaults
	 	 	61	 






 


-i-









 





TABLE OF CONTENTS
(continued)





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 7.6 Compliance with Law
	 	 	61	 
	Section 7.7 Location of Borrower
	 	 	62	 
	Section 7.8 ERISA
	 	 	62	 
	Section 7.9 Margin Stock
	 	 	62	 
	Section 7.10 Tax Filings
	 	 	62	 
	Section 7.11 Solvency
	 	 	62	 
	Section 7.12 Full and Accurate Disclosure
	 	 	62	 
	Section 7.13 Single Purpose Entity
	 	 	63	 
	Section 7.14 Management of the Project
	 	 	63	 
	Section 7.15 No Conflicts
	 	 	63	 
	Section 7.16 Title
	 	 	63	 
	Section 7.17 Flood Zone
	 	 	64	 
	Section 7.18 Insurance
	 	 	64	 
	Section 7.19 Certificate of Occupancy; Licenses
	 	 	64	 
	Section 7.20 Physical Condition
	 	 	64	 
	Section 7.21 Boundaries
	 	 	64	 
	Section 7.22 Material Agreements
	 	 	65	 
	Section 7.23 Plans and Specifications; Project Budget
	 	 	66	 
	Section 7.24 Filing and Recording Taxes
	 	 	66	 
	Section 7.25 Investment Company Act
	 	 	66	 
	Section 7.26 Patriot Act; Foreign Assets Control Regulations
	 	 	66	 
	Section 7.27 Organizational Structure
	 	 	67	 
	Section 7.28 Property Specific Representations
	 	 	67	 
	Section 7.29 Affiliates
	 	 	68	 
	Section 7.30 List of Mortgage Loan Documents
	 	 	68	 
	Section 7.31 Mortgage Loan Event of Default
	 	 	68	 
	 
	 	 	 	 
	ARTICLE 8 FINANCIAL REPORTING
	 	 	68	 
	 
	 	 	 	 
	Section 8.1 Financial Statements
	 	 	68	 
	Section 8.2 Accounting Principles
	 	 	70	 
	Section 8.3 Other Information
	 	 	70	 
	Section 8.4 Annual Operating Budget
	 	 	70	 
	Section 8.5 Audits
	 	 	70	 
	Section 8.6 Mortgage Borrower Financial Statements
	 	 	70	 
	Section 8.7 Notice of Default
	 	 	71	 
	Section 8.8 Access
	 	 	71	 
	 
	 	 	 	 
	ARTICLE 9 COVENANTS
	 	 	72	 
	 
	 	 	 	 
	Section 9.1 Due on Sale and Encumbrance; Transfers of Interests
	 	 	72	 
	Section 9.2 Taxes; Charges
	 	 	73	 
	Section 9.3 Control; Management
	 	 	73	 
	Section 9.4 Operation; Maintenance; Inspection
	 	 	74	 






 


-ii-









 




TABLE OF CONTENTS
(continued)






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 9.5 Taxes on Security
	 	 	74	 
	Section 9.6 Legal Existence; Name, Etc.
	 	 	74	 
	Section 9.7 Affiliate Transactions
	 	 	75	 
	Section 9.8 Limitation on Other Debt
	 	 	75	 
	Section 9.9 Further Assurances
	 	 	76	 
	Section 9.10 Estoppel Certificates
	 	 	76	 
	Section 9.11 Notice of Certain Events
	 	 	76	 
	Section 9.12 Indemnification
	 	 	76	 
	Section 9.13 Size of Units
	 	 	77	 
	Section 9.14 Minimum Sales Prices
	 	 	77	 
	Section 9.15 Hedge Agreements
	 	 	77	 
	Section 9.16 No Distributions
	 	 	79	 
	Section 9.17 Condominium Covenants
	 	 	79	 
	Section 9.18 Patriot Act Compliance; Foreign Assets Control Regulations
	 	 	80	 
	Section 9.19 Payment for Labor and Materials
	 	 	81	 
	Section 9.20 Hotel Management Agreement
	 	 	82	 
	Section 9.21 Americans with Disabilities
	 	 	83	 
	Section 9.22 Zoning
	 	 	83	 
	Section 9.23 ERISA
	 	 	83	 
	Section 9.24 Property Specific Covenants
	 	 	84	 
	Section 9.25 Forward Purchase Contract
	 	 	84	 
	Section 9.26 Mortgage Borrower Covenants
	 	 	84	 
	Section 9.27 Refinancing or Prepayment of the Mortgage Loan
	 	 	84	 
	Section 9.28 Acquisition of the Mortgage Loan
	 	 	85	 
	Section 9.29 UCC Insurance Policy
	 	 	85	 
	Section 9.30 Construction Management Contract
	 	 	86	 
	 
	 	 	 	 
	ARTICLE 10 EVENTS OF DEFAULT
	 	 	86	 
	 
	 	 	 	 
	Section 10.1 Payments
	 	 	86	 
	Section 10.2 Insurance
	 	 	86	 
	Section 10.3 Single Purpose Entity
	 	 	86	 
	Section 10.4 Taxes
	 	 	86	 
	Section 10.5 Sale, Encumbrance, Etc.; Change of Control
	 	 	86	 
	Section 10.6 Representations and Warranties
	 	 	86	 
	Section 10.7 Other Encumbrances
	 	 	86	 
	Section 10.8 Various Covenants
	 	 	86	 
	Section 10.9 Involuntary Bankruptcy or Other Proceeding
	 	 	87	 
	Section 10.10 Voluntary Petitions, Etc.
	 	 	87	 
	Section 10.11 Indebtedness
	 	 	87	 
	Section 10.12 Dissolution
	 	 	87	 
	Section 10.13 Judgments
	 	 	87	 






 


-iii-









 




TABLE OF CONTENTS
(continued)






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 10.14 Security
	 	 	88	 
	Section 10.15 Guarantees
	 	 	88	 
	Section 10.16 Interest Reserve Fund
	 	 	88	 
	Section 10.17 Mortgage Loan Event of Default
	 	 	88	 
	Section 10.18 Hedge Agreement
	 	 	88	 
	Section 10.19 Junior Loan Intercreditor Agreement
	 	 	88	 
	Section 10.20 Covenants
	 	 	88	 
	 
	 	 	 	 
	ARTICLE 11 REMEDIES
	 	 	89	 
	 
	 	 	 	 
	Section 11.1 Remedies — Insolvency Events
	 	 	89	 
	Section 11.2 Remedies — Other Events
	 	 	89	 
	Section 11.3 Administrative Agent’s Right to Perform the Obligations
	 	 	89	 
	 
	 	 	 	 
	ARTICLE 12 MISCELLANEOUS
	 	 	90	 
	 
	 	 	 	 
	Section 12.1 Notices
	 	 	90	 
	Section 12.2 Amendments, Waivers, Etc.
	 	 	90	 
	Section 12.3 Limitation on Interest
	 	 	91	 
	Section 12.4 Invalid Provisions
	 	 	92	 
	Section 12.5 Reimbursement of Expenses
	 	 	92	 
	Section 12.6 Approvals; Third Parties; Conditions
	 	 	93	 
	Section 12.7 Lenders and Administrative Agent Not in Control; No Partnership
	 	 	93	 
	Section 12.8 Time of the Essence
	 	 	93	 
	Section 12.9 Successors and Assigns
	 	 	93	 
	Section 12.10 Renewal, Extension or Rearrangement
	 	 	94	 
	Section 12.11 Waivers
	 	 	94	 
	Section 12.12 Cumulative Rights
	 	 	94	 
	Section 12.13 Singular and Plural
	 	 	94	 
	Section 12.14 Phrases
	 	 	94	 
	Section 12.15 Exhibits and Schedules
	 	 	94	 
	Section 12.16 Titles of Articles, Sections and Subsections
	 	 	94	 
	Section 12.17 Promotional Material
	 	 	95	 
	Section 12.18 Survival
	 	 	95	 
	Section 12.19 WAIVER OF JURY TRIAL
	 	 	95	 
	Section 12.20 Remedies of Borrower
	 	 	95	 
	Section 12.21 GOVERNING LAW
	 	 	96	 
	Section 12.22 Entire Agreement
	 	 	97	 
	Section 12.23 Counterparts
	 	 	97	 
	Section 12.24 Assignments and Participations
	 	 	97	 
	Section 12.25 Brokers
	 	 	99	 
	Section 12.26 Right of Setoff
	 	 	100	 
	Section 12.27 Reserved
	 	 	100	 






 


-iv-









 





TABLE OF CONTENTS
(continued)






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 12.28 Mortgage Loan Defaults
	 	 	100	 
	Section 12.29 Intercreditor Agreement
	 	 	102	 
	Section 12.30 Discussions with Mortgage Lender
	 	 	103	 
	Section 12.31 Independent Approval Rights
	 	 	103	 
	 
	 	 	 	 
	ARTICLE 13 LIMITATIONS ON LIABILITY
	 	 	103	 
	 
	 	 	 	 
	Section 13.1 Limitation on Liability
	 	 	103	 
	Section 13.2 Limitation on Liability of the Administrative Agent’s and the Lenders’
Officers, Employees, etc.
	 	 	104	 
	 
	 	 	 	 
	ARTICLE 14 BUILDING CONVERSION; PAYMENT OF RELEASE PRICES; SALE OF UNITS
	 	 	105	 
	 
	 	 	 	 
	Section 14.1 Completion of Building Conversion
	 	 	105	 
	Section 14.2 Marketing and Sales Program; Sales of Units; Deposits
	 	 	105	 
	Section 14.3 Sale of Units and Payment of Release Price
	 	 	106	 
	Section 14.4 Application of Excess Cash Flow
	 	 	106	 
	Section 14.5 Sale of Parking Spaces
	 	 	106	 
	 
	 	 	 	 
	ARTICLE 15 THE ADMINISTRATIVE AGENT
	 	 	107	 
	 
	 	 	 	 
	Section 15.1 Appointment, Powers and Immunities
	 	 	107	 
	Section 15.2 Reliance by Administrative Agent
	 	 	108	 
	Section 15.3 Defaults
	 	 	108	 
	Section 15.4 Rights as a Lender
	 	 	111	 
	Section 15.5 Standard of Care; Indemnification
	 	 	111	 
	Section 15.6 Non Reliance on Administrative Agent and Other Lenders
	 	 	111	 
	Section 15.7 Failure to Act
	 	 	112	 
	Section 15.8 Resignation of Administrative Agent
	 	 	112	 
	Section 15.9 Consents under Loan Documents
	 	 	112	 
	Section 15.10 Authorization
	 	 	113	 
	Section 15.11 Reserved
	 	 	113	 
	Section 15.12 Defaulting Lenders
	 	 	113	 
	Section 15.13 Liability of the Administrative Agent
	 	 	114	 
	Section 15.14 Transfer of Agency Function
	 	 	115	 
	 
	 	 	 	 
	ARTICLE 16 AMENDMENT AND RESTATEMENT
	 	 	115	 
	 
	 	 	 	 
	ARTICLE 17 RELEASE
	 	 	115	 






 


-v-









 





LIST OF EXHIBITS AND SCHEDULES




	 	 	 	 	 
	EXHIBIT A

	 	-
	 	LEGAL DESCRIPTION OF PROJECT
	EXHIBIT B

	 	-
	 	RESERVED
	EXHIBIT C

	 	-
	 	RESERVED
	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

	 	-
	 	ADVANCE AND CONSTRUCTION COMPLETION CONDITIONS
	SCHEDULE 2.4(1)

	 	-
	 	WIRE INSTRUCTIONS
	SCHEDULE 7.3

	 	-
	 	LITIGATION
	SCHEDULE 7.23

	 	-
	 	PROJECT BUDGET
	SCHEDULE 7.27

	 	-
	 	ORGANIZATIONAL CHART
	SCHEDULE 7.30

	 	-
	 	LIST OF MORTGAGE LOAN DOCUMENTS







 


-vi-









 







AMENDED AND RESTATED MEZZANINE LOAN AGREEMENT




This Amended and Restated Mezzanine Loan Agreement (this “Agreement”) is entered into
as of November 25, 2008 among 1100 WEST HOLDINGS, 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, the Administrative Agent and Eurohypo, as Lender, are parties to a Mezzanine Loan
Agreement dated as of April 25, 2008 (as the same may be amended, modified and supplemented and in
effect from time to time, 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
$28,000,000 (the “Loans or Existing Loans”).



B. Mortgage Borrower (as defined below), Mortgage Lenders (as defined below) and Eurohypo, as
administrative agent are parties to that certain 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 (said Loan Agreement, as so
amended, the “Original Mortgage Loan Agreement”), which provides for, among other things,
loans by Mortgage Lenders to Mortgage Borrower in an aggregate principal or face amount not
exceeding $124,000,000 (the “Mortgage Loan”).



C. On the date hereof, Mortgage Borrower, Mortgage Lenders and Eurohypo, as administrative
agent, are entering into that certain Amended and Restated Loan Agreement dated as of the date
hereof (as the same may be further amended, modified and supplemented and in effect from time to
time, the “Mortgage 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
Mortgage Borrower are ready to provide such funds through a combination of additional equity
investments in Mortgage 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 $26,046,370.42 and the unfunded amount of the Commitments is $1,953,629.58.


 


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 to such term in Section 9.21(1).



(3) “Additional Costs” has the meaning assigned to such term 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) “Advance Conditions” means those conditions listed in Schedule 2.1
attached hereto and made a part hereof.



(8) “Advance Date” has the meaning assigned to such term in Section 2.8(6).



(9) “Advanced Amount” has the meaning assigned to such term in
Section 15.12(2).



(10) “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









 





(11) “Agency Fee” means the agency fee agreed to by Borrower and Administrative Agent
pursuant to the Fee Letter.



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



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



(14) “Annual Operating Budget” has the meaning assigned to such term 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” with respect to the Loans shall mean (a) for Base Rate Loans,
ten percent (10.0%) per annum; and (b) for Eurodollar Loans, six percent (6.0%) per annum.



(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.


 


3









 





(21) “Approved Sales Program” has the meaning assigned to such term in
Section 14.2.



(22) “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).



(23) “Assignment of Forward Purchase Contract” means that certain Assignment of
Forward Purchase Contract dated as of the Original Closing Date by and among Mortgage Borrower,
Administrative Agent and the buyers named in the Forward Purchase Contract.



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



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



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



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



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



(29) “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.



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



(31) “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









 





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



(33) “Borrower Party” means Mortgage Borrower, Borrower, MMI, Sanctuary Avenue, any
Joinder Party or any Guarantor.



(34) “Broker” has the meaning assigned to such term in Section 12.25.



(35) “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.



(36) “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.



(37) “Cash Management Account” has the meaning assigned to such term in the Cash
Management Agreement.



(38) “Cash Management Agreement” means that certain Second Amended and Restated Cash
Management and Security Agreement dated and delivered on or about the date hereof, by and among
Mortgage Borrower, the Mortgage Loan Administrative Agent (on behalf of the Lenders) and the
Depository Bank, as the same may be modified, amended and/or supplemented from time to time.



(39) “Casualty” has the meaning assigned to such term in Section 3.3(1).



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



(41) “Change of Control” shall mean: (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 MMI and Sanctuary Avenue, owning or encumbering any of the membership interests in, or
rights to distributions from, Borrower; (ii) any Person other than the MMI and Sanctuary Avenue
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 Morgans LLC and Sanctuary Holdings
owning or encumbering any of the membership interests in, or rights to distributions from, MMI or
Sanctuary Avenue, respectively, or (iv) any Person other than Morgans LLC or Sanctuary Holdings
having the responsibility for managing and administering the day-to-day business and affairs of, or
otherwise Controlling, MMI and Sanctuary West, respectively; 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 MMI and owning at least 51% of the ownership interests in and
rights to distributions from
Morgans LLC, (ii) having responsibility for managing and



 


5









 






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 or
Sonny Kahn 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 Borrower between MMI and Sanctuary Avenue, so long
as MMI and/or Sanctuary Avenue continue to own 100% of the membership interests in Borrower and to
Control Borrower; (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.



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



(43) “Clearing Account Agreement” means the Clearing Account Agreement among Mortgage
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.



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



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



(46) “Collateral” means the pledge of ownership interests provided as collateral for
the Loan pursuant to the Pledge Agreement and all other collateral described herein and in the
other Loan Documents.



(47) “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. The
original aggregate principal amount of the Commitments is Twenty Eight Million and No/100
Dollars ($28,000,000).


 


6









 





(48) “Completion Guaranty” means that certain Completion Guaranty, dated as of the
date hereof, 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.



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



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



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



(52) “Constituent Documents” has the meaning assigned to such term in
Section 9.17(1).



(53) “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.



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



(55) “Construction Consultant” has the meaning assigned to such term in
Section 8.8.



(56) “Construction Management Contract” means the contract for the management of
construction of the Improvements dated as of July 9, 2007, entered into between Mortgage 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 the Mortgage Loan Agreement.



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



(58) “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.



(59) “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









 





(60) “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).



(61) “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.



(62) “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.



(63) “Debt Service” means, for any period of determination, the aggregate interest due
with respect to the Loans and the Mortgage Loan during such period.



(64) “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.



(65) “Declarant” has the meaning assigned to such term in Section 9.17(1).



(66) “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.



(67) “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.


 


8









 





(68) “Defaulting Lender” has the meaning assigned to such term in
Section 15.12(1).



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



(70) “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.



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



(72) “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.



(73) “Environmental Claim” has the meaning assigned to such term in
Section 5.1(1).



(74) “Environmental Laws” has the meaning assigned to such term in
Section 5.1(2).



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


 


9









 





(76) “Environmental Losses” has the meaning assigned to such term in
Section 5.1(4).



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



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



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



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



(81) “Event of Default” has the meaning assigned to such term in Article 10.



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



(83) “Existing Loan Agreement” has the meaning assigned to such term in the Recitals.



(84) “Existing Loans” has the meaning assigned to such term in the Recitals.



(85) “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.



(86) “Fee Letter” means the letter agreement, dated as of the Original Closing Date,
between Borrower and Administrative Agent with respect to certain fees payable by Borrower in
connection with the Loans, as the same may be modified or amended from time to time.



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



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



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



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



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


 


10









 





(92) “Forward Purchase Contract” means that Agreement for Purchase of Condominium
Units and related Rider, each dated as of the Original Closing Date, by and among Mortgage
Borrower, as seller and/or developer and Galbut, Frohlich, Menin and Morgans Group LLC, a Delaware
limited liability company, individually and collectively, as buyers and/or purchasers.



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



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



(95) “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.



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



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



(98) “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.



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



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



(101) “Hazardous Materials” has the meaning assigned to such term in
Section 5.1(5).



(102) “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.



(103) “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.


 


11









 





(104) “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.



(105) “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.



(106) “Hotel Management Agreement” means that certain Hotel Management Agreement dated
as of August 7, 2006, between the Hotel Manager and Mortgage 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.



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



(108) “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.



(109) “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.



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



(111) “Improvements” has the meaning assigned to such term in the Mortgage.



(112) “Indemnified Party” has the meaning assigned to such term in
Section 9.12.


 


12









 





(113) “Independent Manager” means, in the case of a limited liability company or a
limited partnership, a member or manager that is a natural person who, for the five (5) year period
prior to his or her appointment as an Independent Manager and at all times while serving as an
Independent Manager was not and will not be, directly or indirectly, (i) an
employee, manager, stockholder, director, member, partner, officer, attorney or counsel of
such limited liability company, limited partnership or any of its Affiliates (other than his or her
service as an Independent Manager or special member of the limited liability company or limited
partnership), (ii) a creditor, customer of, or supplier or other Person who derives any of its
purchases or revenues from its activities with such limited liability company, limited partnership
or any of its members, managers or their Affiliates (other than his or her service as an
Independent Manager if such Person has been provided by a nationally-recognized company that
provides professional independent directors and/or as a corporate service provider if such
nationally recognized company also provides corporate services), (iii) a Person Controlling or
under common Control with or Controlled by any such employee, manager, stockholder, director,
member, partner, officer, attorney, counsel, customer, supplier or other Person, or (iv) any member
of the immediate family (including grandchildren or siblings) of a person described in clauses (i),
(ii) or (iii) immediately above.



(114) “Intercreditor Agreement” has the meaning assigned to such term in
Section 12.28.



(115) “Interest Allocation” has the meaning assigned to such term in
Section 2.1(2)(a).



(116) “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.



(117) “Interest Reserve Fund” has the meaning assigned to such term in
Section 4.4(1).



(118) “Involuntary Proceeding” has the meaning assigned to such term in Section
10.9.



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


 


13









 





(120) “Joinder Party” means the Persons executing the Joinder, including Galbut,
Menin, Frohlich and Morgans LLC.



(121) “Junior Loan Intercreditor Agreement” means that certain Subordination and
Standstill Agreement dated as of the date hereof, by and among Mortgage Borrower, Borrower, Junior
Mezzanine Borrower, Junior Mezzanine Lender, Mortgage Lender and the Administrative Agent.



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



(123) “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.



(124) “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 $16,500,000.00, 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 Mortgage Loan Documents).



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



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



(127) “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.


 


14









 





(128) “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.



(129) “Lien” means any interest, or claim thereof, in the Project or Collateral
securing an obligation owed to, or a claim by, any Person other than the owner of the Project or
Collateral, 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.



(130) “Liquidation Event” has the meaning assigned to such term in
Section 2.4(8).



(131) “Loan Documents” means, individually or collectively: (a) this Agreement
(including the Joinder hereto), (b) the Notes, (c) the Assignment of Forward Purchase Contract,
(d) the Hazardous Substance Indemnity Agreement, (e) the Minimum Equity Guarantee, (f) the Hotel
Manager’s Consent, (g) the Project Manager’s Consent, (h) the Completion Guarantee, (i) the Hedge
Agreement Pledge, (j) such assignments of management agreements, contracts and other rights as may
be required or requested by the Administrative Agent, (k) all other documents evidencing, securing,
governing or otherwise pertaining to the Loans, and (l) all amendments, modifications, renewals,
substitutions and replacements of any of the foregoing.



(132) “Loan Transactions” has the meaning assigned to such term in
Section 2.8(4).



(133) “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.



(134) “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.



(135) “Majority Lenders” means Lenders holding at least 66.67% of the aggregate
outstanding principal amount of the Loans or, if the Loans shall not have been made, at least
66.67% of the Commitments.



(136) “Major Modification” means any modification to a Purchase Contract which (1)
modifies in any manner the purchase price set forth therein; (2) reopens, reinstates or in any
manner lengthens any applicable rescission period; (3) modifies the amount and/or timing of any
deposit required thereunder; (4) extends or otherwise changes in any material respect the closing
date set forth therein; (5) releases or otherwise consents to an assignment or transfer of the
obligations of the named purchaser thereunder; (6) increases or modifies the Standard Unit
Finish (unless the purchaser agrees in writing to pay the costs of such increases or
modifications); or (7) otherwise materially modifies the terms of such Purchase Contract.


 


15









 





(137) “Mandatory Net Operating Cash Flow Installments” has the meaning assigned to
such term in Section 2.4(4).



(138) “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.



(139) “Maturity Date” means the earlier of (a) the Original Maturity Date, as such
date may extended 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.



(140) “Menin” means Keith Menin, an individual.



(141) “Minimum Equity Guarantee” means that certain Minimum Equity Guarantee executed
by Galbut, Menin, Frohlich 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.



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



(143) “Minimum Sales Price Schedule” means Schedule 1(b) attached hereto and
made a party hereof.



(144) “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.



(145) “Mold” has the meaning assigned to such term in Section 5.1(6).



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



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


 


16









 





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



(149) “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 date
hereof.



(150) “Mortgage Borrower” shall mean 1100 West Properties, LLC, a Delaware limited
liability company.



(151) “Mortgage Debt Service” shall mean, with respect to any particular period of
time, aggregate interest, fixed principal and other payments due under the Mortgage Note for such
period.



(152) “Mortgage Lender” shall mean Eurohypo AG, New York Branch and each lender that
is a “Lender” pursuant to the terms of the Mortgage Loan Agreement.



(153) “Mortgage Loan” has the meaning assigned to such term in the Recitals.



(154) “Mortgage Loan Administrative Agent” shall have the meaning assigned to
“Administrative Agent” in the Mortgage Loan Agreement.



(155) “Mortgage Loan Agreement” has the meaning assigned to such term in the Recitals.



(156) “Mortgage Loan Documents” shall mean all documents or instruments evidencing,
securing or guaranteeing the Mortgage Loan, including without limitation, the Mortgage Loan
Agreement.



(157) “Mortgage Loan Event of Default” shall have the meaning ascribed to the term
“Event of Default” in the Mortgage Loan Agreement.



(158) “Mortgage Note” shall mean, collectively, Amended and Restated Substitute
Promissory Note A-1, Amended and Restated Substitute Promissory Note A-2 and
Amended and Restated Substitute Promissory Note B, each dated as of the date hereof, as the
same may be consolidated, replaced, severed, modified, amended or extended from time to time.


 


17









 





(159) “Net Liquidation Proceeds After Debt Service” shall mean, with respect to any
Liquidation Event, all amounts paid to or received by or on behalf of Mortgage Borrower in
connection with such Liquidation Event, including, without limitation, proceeds of any sale,
refinancing or other disposition or liquidation, less (i) in the event of a Liquidation Event
consisting of a Casualty or Condemnation, Administrative Agent’s, Lenders’ and/or Mortgage Lender’s
reasonable costs incurred in connection with the recovery thereof, (ii) in the event of a
Liquidation Event consisting of a Casualty or Condemnation, the costs incurred by Mortgage Borrower
in connection with a restoration of all or any portion of the Project made in accordance with the
Mortgage Loan Documents, (iii) in the event of a Liquidation Event consisting of a Casualty or
Condemnation or a transfer, amounts required or permitted to be deducted therefrom and amounts paid
pursuant to the Mortgage Loan Documents to Mortgage Lender, (iv) in the event of a Liquidation
Event consisting of a Casualty or Condemnation, those proceeds paid to Mortgage Borrower pursuant
to Section 7.3 of the Mortgage, (v) in the case of a foreclosure sale, disposition or transfer of
the Project in connection with realization thereon following a Mortgage Loan Event of Default, such
reasonable and customary costs and expenses of sale or other disposition (including attorneys’ fees
and brokerage commissions), (vi) in the case of a foreclosure sale, such costs and expenses
incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender shall be entitled
to receive reimbursement for under the terms of the Mortgage Loan Documents and (vii) in the case
of a refinancing of the Mortgage Loan, such costs and expenses (including attorneys’ fees) of such
refinancing, and (vii) the amount of any prepayments required pursuant to the Mortgage Loan
Documents in connection with any such Liquidation Event.



(160) “Net Operating Cash Flow” has the meaning assigned to such term 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 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);


 


18









 





(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 (as defined in the Mortgage Loan Agreement)
(but only to the extent that the foregoing costs were paid for with disbursements of the proceeds
of the Mortgage Loan or 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 Mortgage Loan or 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 or Mortgage Borrower provides evidence satisfactory to the Administrative
Agent of Borrower’s or Mortgage 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 (1) any fees or
commissions be paid to Borrower or Mortgage Borrower or any Affiliate of Borrower or Mortgage
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 (2) 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.


 


19









 





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



(163) “Note” means that certain Promissory Note dated as of the Original Closing Date
as provided for in Section 2.1(6) and all promissory notes delivered in substitution or
exchange therefore, in each case as the same may be consolidated, replaced, severed, modified,
amended or extended from time to time.



(164) “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.



(165) “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 Mortgage Borrower or 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 or Mortgage Borrower under this Agreement, the other Loan Documents or the Mortgage 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 Mortgage Borrower
under the Project Management Agreement, fees and expenses incurred or paid by Mortgage Borrower
under the Technical Services Agreement, fees and expenses incurred or paid by Mortgage 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 or Mortgage Borrower was or is to be reimbursed from
proceeds of the Loans or Mortgage Loans or insurance or by any third party, and any non-cash
charges such as depreciation and amortization. Any other expense payable to any Borrower Party or
to any Affiliate of any Borrower Party 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.



(166) “Operating Revenues” means, with respect to any period after the date hereof,
all cash receipts of Mortgage 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 Mortgage Borrower after the date hereof which are secured by any interest in the
Project or the Collateral (less only reasonable and customary expenses incurred in procuring and
closing such loan and actually paid in cash to individuals or entities other than any Borrower
Party or any Affiliate of any Borrower Party 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.


 


20









 





(167) “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.



(168) “Original Closing Date” means April 25, 2008.



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



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



(171) “Partial Release Conditions” has the meaning assigned to such term in the
Mortgage Loan Agreement.



(172) “Participant” has the meaning assigned to such term in Section 12.24(3).



(173) “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.



(174) “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.



(175) “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) the
Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or
aiding and abetting another to comment, a Patriot Act Offense.


 


21









 





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



(177) “Payor” has the meaning assigned to such term in Section 2.8(6).



(178) “Permitted Encumbrances” has the meaning set forth in the Mortgage Loan
Documents.



(179) “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.



(180) “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.



(181) “Pledge Agreement” shall mean that certain Pledge and Security Agreement dated
as of the Original Closing Date, executed and delivered by Borrower to Administrative Agent (for
the benefit of Lenders) as security for the Loans, which covers one hundred percent (100%) of the
limited liability interests of Borrower in Mortgage Borrower, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.



(182) “Pledged Member Interests” shall mean all membership and manager interests in
Mortgage Borrower.



(183) “Post Occupancy Credit Escrow Fund” has the meaning assigned in the Mortgage
Loan Agreement.



(184) “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.



(185) “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.



(186) “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 Mortgage Borrower or Borrower, the Mortgage Borrower’s interest in the
Boat Slips, and any Improvements now or hereafter located on the real property described in
Exhibit A, excepting therefrom any and all Units validly released from the Lien of the
Mortgage pursuant to the terms of the Loan Documents and the Mortgage Loan Documents.


 


22









 





(187) “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 8.4(2).



(188) “Project Manager” means Sanctuary Management or another project manager
acceptable to the Administrative Agent.



(189) “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.



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



(191) “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.



(192) “Purchase Contract” means a purchase and sale contract, including any addenda
thereto, between a third party purchaser and Mortgage Borrower or 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).



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



(194) “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 Mortgage Borrower and a purchaser that is not an Affiliate of Borrower or Mortgage
Borrower; (c) has been fully executed and delivered by all of the parties thereto and constitutes 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 Mortgage Borrower’s failure to comply with
the disclosure requirements of the Condominium Act; (e) is not the subject of a default by Mortgage
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 compliance with the requirements of the
Mortgage Loan Agreement; (g) without limiting the
provisions of Section 9.15, specifies a Purchase Price equal to or greater than the
applicable Minimum Sales Price; 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.


 


23









 





(195) “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.



(196) “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.



(197) “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.



(198) “Requesting Lender” has the meaning assigned to such term in
Section 2.9(7).



(199) “Required Payment” has the meaning assigned to such term in
Section 2.8(6).



(200) “Reserve Account Collateral” has the meaning assigned to such term in
Section 4.5(1).



(201) “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.


 


24









 





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



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



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



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



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



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



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



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



(210) “Secured Indebtedness” means:




(a) all Debt of Borrower under the Loan Documents;



(b) any and all future advances made pursuant to the Loan Documents by the Lenders to or for
the benefit of Borrower direct or indirect, together with interest, fees, costs, and other amounts
hereafter arising;



(c) the full and prompt payment and performance of any and all other Debt, obligations and
covenants of Borrower to Administrative Agent and the Lenders including, but not limited to, the
obligation to pay all amounts under the terms of any other agreements, assignments or other
instruments now or hereafter evidencing, securing or otherwise relating to the indebtedness
evidenced by the Loan Documents, including, without limitation, any assignment of rents and leases
given by Borrower to Administrative Agent (on behalf of the Lenders); and



(d) any and all additional advances made by Administrative Agent or the Lenders to protect or
preserve the Collateral or the Project or the Liens created by the Loan Documents on the
Collateral, or to pay taxes, to pay premiums on insurance on the Collateral or the Project or to
repair or maintain the Collateral or the Project (whether or not Borrower or
Mortgage Borrower remains the owner of the Collateral or the Secured Property at the time of
such advances and whether or not the original Administrative Agent or the Lenders remains the owner
of the Secured Indebtedness.


 


25









 





(211) “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 Pledged
Member Interests, entering into this Agreement, refinancing the Pledged Member Interests 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, (ii) acquiring,
developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the
Project, entering into the Mortgage Loan 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 a managing member of
Borrower or the sole managing member of Mortgage Borrower;



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



(c) does not have and will not have any assets other than those related to (i) the Project,
(ii) the Pledged Member Interests, or (iii) 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: (a) dissolve, merge,
liquidate or consolidate; (b) 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; (c)
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 (d) 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;


 


26









 





(f) in the case of Borrower, has at least one (1) Independent Manager, and in the case of
Mortgage Borrower, has only one member which is Borrower;



(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) in the case of Mortgage
Borrower, (A) the Mortgage Loan and (B) 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, in an amount less than $500,000.00, (5) not evidenced by a
note, and (6) paid when due, and (ii) in the case of Borrower, the Loans;



(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;



(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 MMI and Sanctuary Avenue);


 


27









 





(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



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


 


28









 





(212) “Site Assessment” means an environmental engineering report for the Project
prepared by an engineer engaged by the Administrative Agent at Mortgage Borrower’s or 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.



(213) “Special Advance Lender” has the meaning assigned to such term in
Section 15.12(1).



(214) “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.



(215) “Standard Unit Finish” means those standard improvements established by Mortgage
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.



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



(217) “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.



(218) “Taxes” has the meaning assigned to such term in Section 9.2.



(219) “Technical Services Agreement” means that certain Technical Services Agreement
between Mortgage Borrower and Hotel Manager dated as of the Original Closing Date with respect to
the delivery of certain consultation and other technical services relating to the Project.



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



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



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



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



(224) “UCC Insurance Policy” shall mean an insurance policy issued by a title company
acceptable to Lender in the form acceptable to Lender issued with respect to the Pledged Member
Interests.


 


29









 





(225) “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 (as
defined in the Mortgage Loan Agreement) 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.



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



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



(228) “Unpaid Amount” has the meaning assigned to such term in
Section 15.12(2).



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



(230) “Voluntary Proceeding” has the meaning assigned to such term 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.



ARTICLE 2




LOAN TERMS





Section 2.1 The Commitments, Loans and Notes.



(1) Loans. Each Lender severally agrees, on the terms and conditions of this Agreement, to
make a term loan to Borrower in Dollars in a principal amount up to but not exceeding the amount of
the Commitment of such Lender. As of the date hereof, the outstanding principal balance of the
Loans is $28,000,000.


 


30









 





(2) Advances. The Loans shall be funded in one or more advances and repaid in accordance with
this Agreement. Amounts borrowed hereunder and repaid may not be reborrowed.



(a) Provided an Event of Default shall not exist at such time and subject to satisfaction of
the conditions set forth on Part A of Schedule 2.1, Lenders shall make Loans from time to
time in an aggregate amount of up to $1,953,629.58 (the “Interest Allocation”) for the
purposes of paying accrued interest on the Loans and the Mortgage Loan. Provided no Potential
Default or Event of Default shall exist at such time and subject to satisfaction of the conditions
set forth on Part A of Schedule 2.1, Lenders shall automatically make Loans for the payment
of accrued interest, as aforesaid, and shall make the interest payments relating thereto directly
to the Mortgage Lenders and the Administrative Agent, as the case may be, on the respective Payment
Dates relating to the Mortgage Loan and the Loans, as the case may be.



(b) All Loans shall be shall be deemed a capital contribution by Borrower to Mortgage
Borrower.



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



(4) Several Obligations. The failure of any Lender to make any Loan to be made by it on the
date specified therefor shall not relieve any other Lender of its obligation to make its Loan, but
neither any Lender nor the Administrative Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender.



(5) Notes.



(a) Loan Notes. The Loans made by each Lender shall be evidenced by the Note, made payable to
such Lender 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).


 


31









 





(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. Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City
time, to the account of the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will promptly make such Loans available to
Borrower by wire transfer of immediately available funds to an account in the United States
designated by Borrower.




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.


 


32









 





(2) Accrued interest on each Loan shall be payable (i) monthly in arrears on each Payment Date
and (ii) 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.



(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 five
percent (5%) of (i) 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
(ii) 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) 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.


 


33









 





(3) Optional Prepayments. Subject to the provisions of Sections 2.4(5) 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.



(4) Mandatory Prepayments. In the event that the Mortgage Loan is repaid in full prior to the
Maturity Date, commencing upon the first Payment Date following such repayment and on each Payment
Date thereafter, Borrower shall pay to Lender one hundred percent (100%) of the Net Operating Cash
Flow (“Mandatory Net Operating Cash Flow Installments”) for the immediately preceding
month. In addition, Borrower shall also make mandatory prepayments of principal as are required
pursuant to Sections 14.4 and Section 14.5.



(5) Interest and Other Charges on Prepayment. If the Loans are prepaid, in whole or in part,
pursuant to Section 2.4(3) or 2.4(4), 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 as it or the
Majority Lenders, subject to Section 2.8(2), may determine to be appropriate.



(6) Application of Payments. 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; and fourth, to the principal sum in accordance with
Section 2.4(5) above and other amounts due under the Loan Documents; provided,
however, that, if an Event of Default exists the Administrative Agent may apply such
payments in any order or manner as the Administrative Agent shall determine.


 


34









 





(7) Liquidation Events. (a) In the event of (i) any Casualty to all or any portion of the
Project, (ii) any Condemnation of all or any portion of the Project, (iii) a transfer
of the Project in connection with realization thereon by the Mortgage Loan Administrative
Agent (on behalf of Mortgage Lender) following an Event of Default under the Mortgage Loan,
including without limitation a foreclosure sale, or (iv) any refinancing of the Project or the
Mortgage Loan (each, a “Liquidation Event”), Borrower shall cause the related Net
Liquidation Proceeds After Debt Service to be deposited directly into an account designated by
Administrative Agent. On each date on which Administrative Agent actually receives a distribution
of Net Liquidation Proceeds After Debt Service, such Net Liquidation Proceeds After Debt Service
shall be applied to the outstanding principal balance of the Notes in an amount equal to one
hundred percent (100%) of such Net Liquidation Proceeds After Debt Service, together with interest
that would have accrued on such amount through the next Payment Date and all other sums then due;
provided, however, that so in the event Administrative Agent receives a distribution of Net
Liquidation Proceeds After Debt Service on a date other than a Payment Date and so long as no
Default or Event of Default shall have occurred and be continuing, if Borrower so requests in
writing, such amounts shall be held by Administrative Agent as collateral security for the Loans in
an interest bearing account, with such interest accruing to the benefit of Borrower, and shall be
applied by Administrative Agent on the next Payment Date. Borrower shall immediately notify
Administrative Agent of any Liquidation Event once Borrower has knowledge of such event. Borrower
shall be deemed to have knowledge of (i) a sale (other than a foreclosure sale) of the Project on
the date on which a contract of sale for such sale is entered into, and a foreclosure sale, on the
date notice of such foreclosure sale is given, and (ii) a refinancing of the Project, on the date
on which a commitment for such refinancing is entered into. The provisions of this Section
2.4(8) shall not be construed to contravene in any manner the restrictions and other provisions
regarding refinancing of the Mortgage Loan or transfer of the Project set forth in this Agreement
and the other Loan Documents.



(8) Agency Fee. Until payment in full of all obligations under this Agreement and the other
Loan Documents, Borrower shall pay to Administrative Agent, for its sole account, the Agency Fee in
accordance with the Fee Letter.



(9) Security. The Loans shall be secured by the Pledge Agreement creating a first Lien on the
Collateral and the other Loan Documents.




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;



 


35









 






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



(d) 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;



(e) 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;



(f) 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; and



(g) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in accordance with
Section 2.5(1) of the Mortgage Loan Agreement.



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;


 


36









 






(c) 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;



(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;



(e) 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; and



(f) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in accordance with
Section 2.5(2) of the Mortgage Loan Agreement.



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;


 


37









 





(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));



(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;



(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; and



(i) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in accordance with
Section 2.5(3) of the Mortgage Loan Agreement.



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


 


38









 





(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));



(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;


 


39









 





(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;



(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; and



(i) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in accordance with
Section 2.5(4) of the Mortgage Loan Agreement.



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



(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;


 


40









 





(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; and



(f) Mortgage Borrower shall have extended the Mortgage Loan pursuant to and in accordance with
Section 2.5(5) of the Mortgage Loan Agreement.



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
entire Exit Fee.




Section 2.7
Application of Operating Revenues; Cash Management.



(1) During the term of the Loans, Borrower shall cause Mortgage Borrower to establish and
maintain the Clearing Account and Cash Management Account for the benefit of Mortgage Lender, which
Clearing Account and Cash Management Account shall be under the sole dominion and control of
Mortgage Lender. Borrower will not cause or permit Mortgage Borrower in any way to alter or modify
the Clearing Account or Cash Management Account and will notify Administrative Agent of the account
number thereof.



(2) Borrower shall direct or cause Mortgage Borrower to direct that all cash distributions
from the Cash Management Account be paid to Administrative Agent (on behalf of the Lenders) in
accordance with this Agreement and the Cash Management Agreement (including the Net Liquidation
Proceeds After Debt Service) be deposited into an account specified by Administrative Agent.



(3) In the event Mortgage Lender waives the requirement of Mortgage Borrower to maintain the
Clearing Account and Cash Management Account or the Mortgage Loan has been repaid in full,
Administrative Agent (on behalf of the Lenders) shall have the right to require Borrower to
establish and maintain a cash management account that would operate in the same way as the Clearing
Account and Cash Management Account.




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).


 


41









 





(b) Application of Payments. Subject to the provisions of Sections 2.4(6) 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.



(2) Pro
Rata Treatment. Except to the extent otherwise provided herein: (a) each advance of
a Loan from the Lenders under Section 2.1(2) shall be made from the Lenders, and any
termination of the obligation to make an advance of the Loans shall be applied to the respective
Commitments of 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.


 


42









 





(4) Minimum Amounts. Except for (a) mandatory and other prepayments made pursuant to
Sections 2.4(4) and 14.4, (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	 






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.


 


43









 





(6) Non Receipt of Funds by the Administrative Agent. Unless the Administrative Agent shall
have been notified by a Lender or Borrower (in either case, the “Payor”) prior to the date
on which the Payor is to make payment to the Administrative Agent of (in the case of a Lender) the
proceeds of a Loan to be made by such Lender hereunder or (in the
case of Borrower) a payment to the Administrative Agent for account of any Lender hereunder
(in either case, such payment being herein called the “Required Payment”), which notice
shall be effective upon receipt, that the Payor 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 the Payor 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 (a) the Prime Rate for such day in the case of
payments returned to the Administrative Agent by any of the Lenders or (b) 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 the Payor, together with interest as aforesaid;
provided that if neither the recipient(s) nor the Payor shall return the Required Payment to the
Administrative Agent within three (3) Business Days of the Advance Date, then, retroactively to the
Advance Date, the Payor and the recipient(s) shall each be obligated to pay interest on the
Required Payment as follows:



(a) if the Required Payment shall represent a payment to be made by Borrower to the Lenders,
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, and



(b) if the Required Payment shall represent proceeds of a Loan to be made by the Lenders to
Borrower, the Payor and Borrower shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment pursuant to whichever of the rates specified in
Section 2.3 is applicable to the Type of such Loan, it being understood that the return by
Borrower of the Required Payment to the Administrative Agent shall not limit any claim Borrower may
have against the Payor in respect of such Required Payment.



(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.


 


44









 





(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.



(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.




 


46











 




(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).



(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.


 


47









 





(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.



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.


 


48









 





(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.




(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.


 


49









 





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).



(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.


 


50









 





ARTICLE 3




INSURANCE, CONDEMNATION, AND IMPOUNDS





Section 3.1 Insurance.



(1) Borrower shall cause Mortgage Borrower to maintain at all times during the term of the
Loans the insurance required under Article 3 of the Mortgage Loan Agreement, including,
without limitation, meeting all insurer requirements thereunder. Borrower shall cause
Administrative Agent (on behalf of Lenders) to be named as named insureds together with Mortgage
Lender, as their interest may appear, under the insurance policies required under Article 3
of the Mortgage Loan Agreement. Borrower shall also cause all insurance policies required under
this Section 3.1 to provide for at least thirty (30) days’ prior notice to Administrative
Agent in the event of policy cancellation or material changes. Not less than thirty (30) days’
prior to the expiration dates of the policies theretofore furnished to Administrative Agent
pursuant to the terms hereof, certified copies of the policies marked “premium paid” or accompanied
by evidence satisfactory to Administrative Agent of payment of the premiums due thereunder shall be
delivered by Borrower to Administrative Agent; provided, however, that in the case
of renewal policies, Borrower may furnish Administrative Agent with binders therefor to be followed
by the original policies when issued.



(2) If at any time Administrative Agent is not in receipt of written evidence that all
insurance required hereunder is in full force and effect, Administrative Agent shall have the
right, without notice to Borrower to take such action as Administrative Agent deems necessary to
protect its interest in the Project and the Collateral, including, without limitation, the
obtaining of such insurance coverage as Administrative Agent in its sole discretion deems
appropriate, and all expenses incurred by Administrative Agent in connection with such action or in
obtaining such insurance and keeping it in effect shall be paid by Borrower to Administrative Agent
upon demand and until paid shall be secured by the Pledge Agreement and shall bear interest at the
Default Rate.



(3) For purposes of this Agreement, Administrative Agent shall have the same approval rights
over the insurance referred to above (including, without limitation, the insurers, deductibles and
coverages thereunder), as well as the right to require other insurance as are provided in favor of
Mortgage Lender in the Mortgage Loan Agreement. All liability insurance provided for in the
Mortgage Loan Documents shall provide insurance with respect to the liabilities of both Mortgage
Borrower and Borrower. The insurance policies delivered pursuant to the Mortgage Loan Documents
shall include endorsements required by Mortgage Lender, but pursuant to which Administrative Agent
shall have the same rights as the Mortgage Lender.



(4) In the event that the Mortgage Loan has been paid in full, except upon the occurrence and
continuance of an Event of Default, Borrower shall permit Mortgage Borrower to settle any insurance
or condemnation claims with respect to the insurance proceeds or condemnation awards which in the
aggregate are less than or equal to the Threshold Amount.
Administrative Agent shall have the right to participate in and approve any settlement for
insurance or condemnation claims with respect to the insurance proceeds or condemnation awards
which in the aggregate are equal to or greater than the Threshold Amount. If an Event of Default
shall have occurred and be continuing, Borrower hereby irrevocably empowers Administrative Agent,
in the name of Mortgage Borrower as its true and lawful attorney-in-fact, to file and prosecute
such claim and to collect and to make receipt for any such payment.


 


51









 





Section 3.2 Use and Application of Insurance Proceeds. Notwithstanding any provision in this
Agreement to the contrary, all insurance proceeds will be made available to Mortgage Borrower in
accordance with the Mortgage Loan Agreement. In the event the Mortgage Loan has been paid in full
and Administrative Agent receives any insurance proceeds, Administrative Agent (for the benefit of
Lenders) shall either apply such proceeds to the Debt or for the restoration of the Project in
accordance with the same terms and conditions contained in the Mortgage Loan Agreement, as if such
terms were set forth in full herein.




Section 3.3 Casualty and Condemnation.



(1) If the Project shall be damaged or destroyed, in whole or in part, by fire or other
casualty (a “Casualty”), Borrower shall cause Mortgage Borrower to give prompt notice of
such damage to Administrative Agent and shall or shall cause Mortgage Borrower to promptly commence
and diligently prosecute the completion of the restoration of the Project as nearly as possible to
the condition the Project was in immediately prior to such Casualty, with such alterations as may
be approved by Administrative Agent and otherwise in accordance with the Mortgage Loan Agreement.
Borrower shall or shall cause Mortgage Borrower to pay all costs of such restoration whether or not
such costs are covered by insurance. Administrative Agent may, but shall not be obligated to make
proof of loss if not made promptly by Borrower.



(2) Borrower shall cause Mortgage Borrower to promptly give Administrative Agent notice of the
actual or threatened commencement of any proceeding for the condemnation of all or any part of the
Project and shall or shall cause Mortgage Borrower to deliver to Administrative Agent copies of any
and all papers served in connection with such proceedings. Administrative Agent may participate in
any such proceedings, and Borrower shall from time to time cause Mortgage Borrower to deliver to
Administrative Agent all instruments requested by it to permit such participation. Borrower shall,
or shall cause Mortgage Borrower, at its own expense, to diligently prosecute any such proceedings,
and shall consult with Administrative Agent, its attorneys and experts, and cooperate with them in
the carrying on or defense of any such proceedings. Notwithstanding any taking by any public or
quasi public authority through condemnation or otherwise (including, but not limited to, any
transfer made in lieu of or in anticipation of the exercise of such taking), Borrower shall
continue to pay the Loans at the time and in the manner provided for its payment in the Notes and
in this Agreement.



(3) For purposes of Sections 3.1 and 3.2 hereof, Borrower shall obtain the
approval of Administrative Agent for each matter requiring the approval of Mortgage Lender under
the provisions of Article 3 of the Mortgage Loan Agreement.


 


52









 





ARTICLE 4




RESERVES





Section 4.1 Interest Reserve Fund.



(1) Deposits. In the event that the Administrative Agent determines from time to time
in its sole and absolute discretion that Loans available pursuant to Section 2.1(2)(a) and
future Operating Revenues may be insufficient to pay all interest charges due or to be due in
connection with the Loans, the Administrative Agent shall notify Borrower in writing of such
determination. Within ten (10) Business Days following any such notice, Borrower shall deposit
with the Administrative Agent (or, at the direction of the Administrative Agent, the Depository
Bank), for deposit with Administrative Agent into an account in Administrative Agent’s name an
amount reasonably determined by the Administrative Agent as being necessary to provide an adequate
reserve for the payment of such interest charges (the “Interest Reserve Fund”).



(2) Disbursements. Provided that no Event of Default exists (other than a Default or
an Event of Default which may be cured by the transfer of amounts credited to the Interest Reserve
Fund to Borrower’s account pursuant to this Section 4.1(2)), and provided that there are
insufficient Operating Revenues and insufficient Loans available pursuant to
Section 2.1(2)(a) from which to pay such interest payments, the Administrative Agent will
direct the Depository Bank to transfer (to the extent funds are available therein) amounts credited
to the Interest Reserve Fund to Borrower’s account to pay or reimburse Borrower for the payment of
any interest payments then due and payable under the Loans. Provided that no 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 and insufficient Loans
available pursuant to Section 2.1(2)(a) to pay the interest payments for which such
disbursement is being requested.



(3) 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
the Interest Reserve Fund 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;


 


53









 





(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 the Interest Reserve Fund 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;



(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.



(4) 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 funds on deposit in the
Interest Reserve Fund and apply such funds to the items for which the Interest Reserve Fund was
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.



(5) 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
Interest Reserve Fund or permit any Lien to attach.



(6) Release of Reserve Funds. Any amount remaining in the Interest Reserve Fund after
the Loans have been paid in full shall be promptly returned to Borrower.


 


54









 





(7) Interest. In the event that the Interest Reserve Fund is an interest-bearing
account, the balance of any interest therein shall be deemed a part of thereof. Nothing herein
shall be construed as requiring the Administrative Agent or the Lenders to pay interest on the
Interest Reserve Fund.




Section 4.2 Mortgage Loan Reserves.



(1) Borrower shall cause Mortgage Borrower to deposit and maintain each of the reserve
accounts as more particularly set forth in Article 4 of the Mortgage Loan Agreement and
shall cause Mortgage Borrower to deposit and maintain each of the “Reserve Funds” and “Security
Accounts” as set forth in Mortgage Loan Documents (collectively, “Mortgage Loan Reserve
Funds”), and to perform and comply with all the terms and provisions relating thereto.
Borrower grants to Administrative Agent (on behalf of Lenders) a first-priority perfected security
interest in Borrower’s interest in each of the Mortgage Loan Reserve Funds, subject to the prior
rights of Mortgage Lender, and any and all monies now or hereafter deposited in the Mortgage Loan
Reserve Funds as additional security for payment of the Indebtedness to the extent Borrower has an
interest in same.



(2) The Mortgage Loan Reserve Funds shall be under the sole dominion and control of the
Mortgage Lender. Subject to the terms of the Mortgage Loan Documents, the Mortgage Lender and its
servicer shall have the sole right to make withdrawals from the Mortgage Loan Reserve Funds and all
costs and expenses for establishing and maintaining the Mortgage Loan Reserve Funds shall be paid
by Mortgage Borrower. In the event the Mortgage Lender waives the requirement of Mortgage Borrower
to maintain the Mortgage Loan Reserve Funds or the Mortgage Loan has been repaid in full, the
Administrative Agent (on behalf of the Lenders) shall have the right to require Borrower to
establish and maintain reserve funds that would operate in the same manner as the Mortgage Loan
Reserve Funds.



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, Mortgage 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
(i) the presence, use or release into the environment of any Hazardous Materials originating at or
from, or otherwise affecting, the Project, (ii) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental Law by Borrower or
Mortgage 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 Mortgage
Borrower or otherwise affecting the Project.


 


55









 





(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, (g) Mold, or (h) 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.



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.


 


56









 






Section 5.3 Covenants on Environmental Matters.



(1) Borrower shall and shall cause Mortgage Borrower to (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 Mortgage Borrower and 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 or shall cause Mortgage Borrower to 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.


 


57









 





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



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



(b) the discovery by Borrower or Mortgage 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, Mortgage 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 or shall cause Mortgage Borrower to 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).


 


58









 





(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: (i) gross negligence or willful
misconduct of the Administrative Agent or the Lenders; (ii) the violation of any Environmental Law
by any party other than Borrower, Mortgage 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, Mortgage Borrower and its Affiliates) (a “Possession Transfer”); or (iii) 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 (i), (ii) or (iii) 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”.



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) Mortgage Borrower has not assigned or pledged the
Restaurant Lease, the rents therefrom or any interests therein except to the Mortgage Loan
Administrative Agent (on behalf of the lenders party to the Mortgage Loan Agreement); 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 permit Mortgage Borrower to
modify, supplement or terminate in any way the Restaurant Lease without the Administrative Agent’s
prior written consent, and Borrower shall not permit Mortgage Borrower to enter into any other
lease of all or any portion of the Project without the prior written consent of the Administrative
Agent.


 


59









 





Section 6.3 Covenants. Borrower (1) shall cause Mortgage Borrower to perform the obligations
which Mortgage Borrower is required to perform under the Restaurant Lease and any other lease
entered into by Mortgage Borrower with respect to the Project; (2) shall cause Mortgage Borrower to
enforce the obligations to be performed by the tenants under such leases; (3) shall cause Mortgage
Borrower to promptly furnish to the Administrative Agent any notice of monetary default or
termination received by Mortgage Borrower from any such tenant, and any notice of monetary default
or termination given by Mortgage Borrower to any such tenant; (4) shall not permit Mortgage
Borrower to 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 permit Mortgage Borrower to enter into any
ground lease or master lease of any part of the Project; (6) shall not permit Mortgage Borrower to
further assign or encumber any lease of the Project; (7) shall not permit Mortgage Borrower to,
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
permit Mortgage Borrower to amend any easements affecting the Project without the Administrative
Agent’s prior approval; and (9) shall not permit Mortgage Borrower, 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.



(1) Each Borrower Party that is an entity 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. Neither Borrower nor Mortgage Borrower is
a “foreign person” within the meaning of § 1445(f)(3) of the Code.



(2) Borrower owns all of the issued and outstanding membership interests in Mortgage Borrower
and Borrower Controls Mortgage Borrower. Upon the realization of the Collateral under the Pledge
Agreement, Lenders or any other party succeeding to the Borrower’s interest in the Collateral
described in the Pledge Agreement would have such control. Without limiting the foregoing,
Borrower has sufficient control over Mortgage Borrower to cause Mortgage Borrower to (i) take any
action on Mortgage Borrower’s part required by the Loan Documents and (ii) refrain from taking any
action prohibited by the Loan Documents.



Section 7.2 Validity of Loan Documents. The execution, delivery and performance by each
Borrower Party of the Loan Documents to which it is a party: (1) if an entity, is duly authorized;
and (2) will not violate any law. The Loan Documents constitute the legal, valid and binding
obligations of 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.


 


60









 






Section 7.3 Liabilities; Litigation.



(1) The financial statements delivered by 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,
the Collateral, Borrower, Mortgage Borrower or any other Borrower Party that would reasonably be
expected to have an adverse effect on Borrower’s ability to fulfill its obligations hereunder or
Mortgage Borrower’s ability to fulfill its obligations under the Mortgage Loan Documents. Except
as disclosed in such financial statements or as set forth on Schedule 7.3, 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 Borrower’s
knowledge, threatened, against the Project, the Collateral, Borrower, Mortgage Borrower or any
other Borrower Party which if adversely determined could have a material adverse effect on such
party, the Project, the Collateral or the Loans.



(2) No 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 no 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. No 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 it or any
other Borrower Party. No Borrower Party is in violation of any agreement which violation would
have an adverse effect on it or on the Project or any other Borrower Party or on its or any other
Borrower Party’s business, properties, or assets, operations or condition, financial or otherwise.




Section 7.6 Compliance with Law.



(1) Each Borrower Party has (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 Borrower’s
knowledge, except as set 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;


 


61









 





(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



(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. Neither Borrower nor Mortgage Borrower has established any pension plan
for employees which would cause Borrower or Mortgage 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. Each Borrower Party has 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 such Borrower Party.



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 other 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 other
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 other
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 other Borrower Party.


 


62









 





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



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 other 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 other
Borrower Party is a party or by which any of property or assets of Borrower or any other 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 other Borrower Party or any properties or assets of Borrower or any other 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 other Borrower Party of this Agreement or
any other Loan Documents has been obtained and is in full force and effect.




Section 7.16 Title.



(1) Borrower is the record and beneficial owner of, and has good and marketable title to, the
Collateral, free and clear of all Liens whatsoever. The Pledge Agreement, together with the UCC
financing statements relating to the Collateral when properly filed in the appropriate records,
will create a valid, perfected first priority security interests in and to the Collateral, all in
accordance with the terms thereof for which a Lien can be perfected by filing a UCC financing
statement. For so long as the Lien of the Pledge Agreement is outstanding, Borrower shall forever
warrant, defend and preserve such title and the validity and priority of the Lien of the Pledge
Agreement and shall forever warrant and defend such title, validity and priority to Lender against
the claims of all persons whomsoever.



(2) Mortgage 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 and any UCC financing statements filed in
connection therewith created (1) a valid and perfected Lien on the Project, subject only to
Permitted Encumbrances and (2) valid and perfected 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. To Borrower’s knowledge, 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 or the Mortgage
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 the
Mortgage Loan 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.


 


63









 





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 and
Mortgage Borrower, has done, by act or omission, anything which would impair the coverage of any
such policy.



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 cause Mortgage Borrower to timely obtain in accordance with Applicable
Law all Licenses required to be obtained subsequent to the date hereof, and to 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 neither Borrower nor
Mortgage Borrower has 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.


 


64









 






Section 7.22 Material Agreements.



(1) Borrower has delivered or has caused Mortgage Borrower to deliver 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 or has caused Mortgage Borrower to deliver 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 or has caused Mortgage Borrower to deliver 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.



(4) Borrower has delivered or has caused Mortgage Borrower to deliver 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 or has caused Mortgage Borrower to deliver 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.


 


65









 





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 Collateral 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 Pledge Agreement and the UCC financing Statements, have been
paid and, under current legal requirements, the Pledge Agreement 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. Neither Borrower nor Mortgage Borrower is (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.



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 other
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.


 






	 	 	 
	1	 	Eurohypo to confirm.



 


66









 






Section 7.27 Organizational Structure.



(1) Borrower has heretofore delivered to the Administrative Agent a true and complete copy of
the Organizational Documents of each Borrower Party. Borrower is the only member of Mortgage
Borrower and manages Mortgage Borrower. The only members of Borrower are MMI and Sanctuary Avenue.
The Borrower is managed by both of its members (subject to the rights of the Independent Manager).
There are no outstanding equity rights with respect to Borrower.



(2) The only member of MMI on the date hereof is Morgan LLC. The only member of Sanctuary
Avenue on the date hereof is Sanctuary Holdings. MMI and Sanctuary Avenue are managed by their
respective members. There are no outstanding equity rights with respect to MMI or Sanctuary
Avenue.



(3) Schedule 7.27 contains a true and accurate chart reflecting the ownership of all
of the direct and indirect equity interests in Borrower, Mortgage Borrower and 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.



(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 Mortgage Borrower under the Original Mortgage Loan Agreement has
been satisfactorily completed by Mortgage Borrower.



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


 


67









 





Section 7.29 Affiliates. Borrower does not own any equity interests in any other Person other
than Mortgage Borrower.



Section 7.30 List of Mortgage Loan Documents. There are no Mortgage Loan Documents other than
those set forth on Schedule 7.30 attached hereto. Borrower has or has caused to be
delivered to Administrative Agent true, complete and correct copies of all Mortgage Loan Documents,
and none of the Mortgage Loan Documents has been amended, modified or terminated as of the date
thereof.



Section 7.31 Mortgage Loan Event of Default. No Mortgage Loan Event of Default or an event or
circumstance has occurred which with the giving of notice or the passage of time, or both, would
constitute a Mortgage Loan Event of Default exists as of the date hereof.



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 Administrative Agent current (as of the calendar month just ended) balance
sheets and detailed operating statements for Borrower and Mortgage Borrower (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 Administrative Agent detailed operating statements for Borrower and
Mortgage Borrower (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 balance sheets for such quarter for Borrower and Mortgage
Borrower. Such quarterly statements, which shall be prepared on an accrual basis, shall be
accompanied by (i) a current rent roll for the Project and after the Building Conversion Date, a
list of all sales of Units, (ii) a statement of the balance in each of the Interest Reserve Fund,
and (iii) a certificate executed by an Authorized Officer of Borrower stating that each such
quarterly statement presents fairly the financial condition and the results of operations of
Borrower, Mortgage Borrower and the Project.


 


68









 





(3) Annual Reports. Within one hundred and twenty (120) days after the end of each fiscal
year of Borrower and Mortgage Borrower, Borrower will furnish to the
Administrative Agent complete copies of Borrower’s, Mortgage 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 and Mortgage 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 balance
sheets, and in the case of Borrower and Mortgage Borrower, a detailed operating statement stating
Operating Revenues, Operating Expenses, operating income and Net Operating Cash Flow. All annual
financial statements shall be accompanied by (i) a certificate executed by an Authorized Officer
Borrower, 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, Mortgage
Borrower and the Project, in the case Borrower and Mortgage Borrower, and the Guarantors, in the
case of Guarantors. The annual financial statements of Borrower and Mortgage 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, Mortgage Borrower and the Project.



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



(5) Building Conversion Reporting Requirements. Borrower shall, or shall cause Mortgage
Borrower to, furnish to the Administrative Agent:



(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 a third party escrow pursuant to each
such Qualified Purchase Contract, whether there are any defaults by either Mortgage 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 Administrative Agent may reasonably request), report of the escrow agent setting forth all
deposits in, withdrawals from, and the current balance of, the “Condominium Escrow” described in
the Mortgage Loan Agreement; and


 


69









 





(c) a copy of each material report, statement, certification, claim, data, notice or other
communication received, made or delivered by Mortgage Borrower or a purchaser under a Qualified
Purchase Contract which relates to events that may materially negatively affect Mortgage Borrower’s
or such purchaser’s obligations and/or performance under the terms of a Qualified Purchase
Contract, or any Borrower Party’s obligations and/or
performance under the Loan Documents or the Mortgage 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 Mortgage 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 Administrative Agent 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 in connection with the Project.



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



Section 8.3 Other Information. Borrower shall and shall cause Mortgage Borrower to deliver to
the Administrative Agent such additional information as Administrative Agent may reasonably request
regarding Borrower, Mortgage Borrower, their subsidiaries, their business, any Borrower Party, the
Collateral 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 shall
cause Mortgage Borrower to provide to the Administrative Agent its 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 and Mortgage Borrower which reflect upon its financial condition and the income and
expense relative to the Project.



Section 8.6 Mortgage Borrower Financial Statements. Borrower will furnish, or cause Mortgage
Borrower to furnish, to Administrative Agent a copy of the financial statements and all of the
materials Mortgage Borrower is required to provide Mortgage Lender under the Mortgage Loan
Agreement within the time periods required under the Mortgage Loan Agreement.


 


70









 





Section 8.7 Notice of Default. Promptly after Borrower, Mortgage Borrower or any other
Borrower Party obtains actual knowledge thereof, Borrower shall give Administrative Agent notice of
the occurrence of any “Potential Default” or “Event of Default” under the Mortgage Loan Documents.
Each notice delivered pursuant to this Section 8.7 shall be accompanied by a certificate of
an authorized officer of Borrower setting forth the details of the occurrence referred to therein
and describing the actions Borrower proposes to take with respect thereto.



Section 8.8 Access. The Administrative Agent, 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), 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 or Mortgage Borrower’s records, files and books of account.
Borrower shall or shall cause Mortgage Borrower to deliver any document or instrument reasonably
necessary for the Administrative Agent, as the Administrative Agent may request, to obtain records
from any service bureau maintaining records for Borrower or Mortgage Borrower, and shall maintain
duplicate records or support documentation on media, including, without limitation, computer tapes
and discs owned by Borrower or Mortgage Borrower relating to the use or operation of the Project.
At the Administrative Agent’s request, Borrower shall or shall cause Mortgage Borrower to instruct
its banking and other financial institutions to make available to the Administrative Agent such
information and records concerning the Project as the Administrative Agent 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 (as defined in the Mortgage Loan Agreement)
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 or cause Mortgage Borrower to make
available to Administrative Agent 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 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 or Mortgage Borrower, and shall be employed solely for the benefit of
Administrative Agent and the Lenders. No default of Borrower or Mortgage Borrower will be waived
by an inspection by Administrative Agent or the Construction Consultant. In no event will any
inspection by Administrative Agent 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 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.


 


71









 





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) Neither Borrower nor any other Person having an ownership or beneficial interest in
Borrower or Mortgage Borrower shall (a) directly or indirectly sell, transfer, convey, mortgage,
pledge, assign, encumber or permit any Lien on the Project, (b) encumber or permit any Lien on the
Collateral or any part thereof (including any partnership, membership or any other ownership
interest in Mortgage Borrower), whether voluntarily, involuntarily, by operation of law or
otherwise; or (c) enter into any easement or other agreement granting rights in or restricting the
use or development of the Project or the Collateral;



(2) No new member shall be admitted to or created in Borrower or Mortgage Borrower (nor shall
any existing member withdraw from Borrower or Mortgage Borrower), and no change in Borrower’s or
Mortgage Borrower’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 Mortgage Borrower 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, and (y) 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.


 


72









 





Section 9.2 Taxes; Charges. Borrower shall or shall cause Mortgage Borrower to 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, Mortgage Borrower’s compliance
with Section 4.1 of the Mortgage Loan 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 and shall not permit Mortgage Borrower to 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 or shall cause Mortgage Borrower
to 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 permit Mortgage Borrower to
contest the validity of such claims and demands so long as (1) Borrower notifies the Administrative
Agent that Mortgage Borrower intends to contest such claim or demand, (2) Borrower or Mortgage
Borrower provides the Administrative Agent with an indemnity, bond or other security satisfactory
to the Administrative Agent assuring the discharge of Borrower’s obligations for such claims and
demands, including interest and penalties, and (3) Mortgage 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.



(1) Without limiting the provisions of Section 9.1, there shall be no change in the
day-to-day management and control of Borrower, Mortgage Borrower or any other Borrower Party
without the prior written consent of the Administrative Agent.



(2) Borrower shall cause Mortgage Borrower to (i) perform and observe in all material respects
all of its covenants and agreements contained in the Project Management Agreement to which it is a
party; (ii) take all reasonable and necessary action to prevent the termination of the Project
Management Agreement in accordance with the terms thereof or otherwise; (iii) enforce each material
covenant or obligation of the Project Management Agreement in accordance with its terms; (iv)
promptly give the Administrative Agent copies of any default or other material notices given by or
on behalf of Mortgage Borrower or received by or on behalf of Mortgage Borrower from the Project
Manager; and (v) take all such action to achieve the purposes described in clauses (i),
(ii) and (iii) of this Section 9.3(2) as may from time to time be
reasonably requested by the Administrative Agent; provided, however, that Mortgage Borrower shall
be permitted, upon the Administrative Agent’s reasonable approval, to contest the validity or
applicability of any requirement under the Project Management Agreement.



(3) Borrower shall cause Mortgage Borrower to not, without the Administrative Agent’s prior
consent, (i) take any action to (A) cancel or terminate the Project Management Agreement, (B)
replace the Project Manager or (C) appoint a new hotel manager; (ii) 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 Project Management Agreement; (iii) waive any material
default under or breach of any material provisions of the Project 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 Project Management Agreement or vary or agree
to the variation in any material way of any material provisions of the Project Management Agreement
or of the performance of the Project Manager under the Project Management Agreement; or (iv)
petition, request or take any other legal or
administrative action that seeks, or may reasonably be expected, to rescind, terminate or
suspend the Project Management Agreement.


 


73









 





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



Section 9.4 Operation; Maintenance; Inspection. Borrower shall and shall cause Mortgage
Borrower to observe and comply with all Applicable Laws, including those applicable to the
ownership, use and operation of the Project and the Collateral. Borrower shall cause Mortgage
Borrower to maintain the Project in good condition and promptly repair any damage or casualty.
Borrower shall cause Mortgage Borrower to 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.



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 Collateral for the purpose of taxation, (2) affecting any Lien on the Collateral,
or (3) changing existing laws of taxation of pledges secured by equity interests, 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, and shall cause Mortgage Borrower to,
preserve and keep in full force and effect its existence as a Single Purpose Entity, and each of
Borrower and Mortgage Borrower 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 or Mortgage Borrower, the
Single Purpose Entity requirements contained in this Agreement shall control. Neither Borrower nor
Mortgage Borrower shall wind up, liquidate, dissolve, reorganize, merge, or consolidate with or
into, or convey,



 


74









 






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
Mortgage Borrower 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.
Borrower shall not enter into any new line of business other than the ownership of the Collateral,
or make any change in the scope or nature of its business purposes, or undertake or participate in
activities other than the continuance of its present business.




Section 9.7 Affiliate Transactions.



(1) In General. Except as provided in this Section 9.7, Borrower shall not and shall
not permit Mortgage Borrower to engage in any other transaction affecting the Project and/or the
Collateral with an Affiliate of Borrower or Mortgage Borrower without the Administrative Agent’s
prior written consent except on arm’s length, market terms. Without limiting the foregoing, all
transactions among Borrower and/or Mortgage Borrower and their 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
permit a payment of up to a seven percent (7%) sale commission to Mortgage Borrower or an Affiliate
of Mortgage Borrower upon the sale of such Unit. Borrower may permit Mortgage Borrower to pay the
Franchise Fee to Morgans Hotel Group Management LLC.



(3) Junior Mezzanine Loan. Junior Mezzanine Borrower is permitted to obtain the Junior
Mezzanine Loan, subject to the terms of the Junior Loan Intercreditor Agreement.



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



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



(b) An Affiliate of Mortgage Borrower or Project Manager 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 Mortgage Borrower to the purchasers of such Units as Special Credits and paid
by Mortgage Borrower.



Section 9.8 Limitation on Other Debt. Neither Borrower nor Mortgage Borrower shall, without
the prior written consent of the Administrative Agent and the Majority Lenders
(which consent may be withheld in the Administrative Agent’s sole and absolute discretion),
incur any Debt other as permitted under subsection (o) of the definition of Single Purpose
Entity.


 


75









 





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 and shall cause Mortgage Borrower to
promptly notify the Administrative Agent of (1) any Potential Default or Event of Default, or
Mortgage Loan 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,
Mortgage Borrower or any Borrower Party under other obligations relating to the Project, the
Collateral or otherwise material to Borrower’s or Mortgage Borrower’s business; and (3) any
threatened or pending legal, judicial or regulatory proceedings, including any dispute between
Borrower or Mortgage Borrower and any governmental authority, affecting Borrower, Mortgage
Borrower, the Project, or the Collateral.



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 the Collateral 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.


 


76









 





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 the Loan Documents.



Section 9.14 Minimum Sales Prices. Borrower shall not permit and shall not permit Mortgage
Borrower to 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).



(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.


 


77









 





(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.



(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


 


78









 





(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 of the Mortgage
Loan Agreement, 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 cause Mortgage Borrower to perform or cause to be
performed all of Mortgage Borrower’s obligations and the obligations of the Association under the
Declaration all with respect to any of the applicable Project’s Constituent Documents and under the
Condominium Act. The “Constituent Documents” are the: (a) the Public Offering Statement;
(b) the Declaration; (c) the articles of incorporation and by-laws of the Association; and (c) all
documents related to the creation, management and operation of the Project by the Association.
Borrower shall cause Mortgage Borrower to promptly pay when due, all dues and assessments imposed
pursuant to the Constituent Documents.



(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 the Mortgage Loan Agreement and is otherwise satisfactory to the Administrative Agent,
Borrower’s obligation under Article 3 to cause Mortgage Borrower 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 or Mortgage 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 or shall cause Mortgage Borrower to 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.


 


79









 





(4) Condemnation. The proceeds of any award or claim for damages, direct or consequential,
payable to Borrower or Mortgage 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, shall be paid to the Mortgage Loan Administrative Agent and applied in
accordance herewith.



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



(a) Borrower shall cause Mortgage Borrower to be the owner of all the interests created under
the Declaration other than with respect to interests conveyed to the Association and Units sold
hereunder or conveyed in accordance herewith;



(b) Borrower shall cause Mortgage Borrower to be 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 those of the owners of Units conveyed in accordance herewith);



(c) Borrower shall cause Mortgage Borrower to be the owner of all of the interests in and to
the Association other than interests of owners of Units conveyed in accordance herewith;



(d) The interest of the Association is not encumbered by any other pledge, hypothecation,
mortgage, deed to secure debt or other security interest, lien or judgment whatsoever;



(e) Borrower shall cause Mortgage Borrower 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



(f) 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.


 


80









 





(2) Without limiting the provisions of Section 9.18(1), Borrower, Mortgage Borrower
and any other Borrower Party shall not 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, Borrower, Mortgage Borrower, and any Borrower Party will not
permit itself or 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, Mortgage Borrower or such Borrower Party or
who (after such inquiry as may be required by Applicable Law) should be known by Borrower, Mortgage
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 no Borrower, Mortgage Borrower, Borrower Party, or any direct or
indirect owner of any interest in Borrower or 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 or will cause Mortgage Borrower
to 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 Collateral 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 Collateral or any part thereof any other or additional Lien other than the Liens
or security of the Loan Documents and Mortgage 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
or shall cause Mortgage Borrower to, at the Administrative Agent’s option, provide security
reasonably satisfactory to the Administrative Agent, assuring the discharge of Borrower’s or
Mortgage Borrower’s obligations thereunder and of any additional charge, penalty or expense arising
from or incurred as a result of such contest.


 


81









 






Section 9.20 Hotel Management Agreement.



(1) Borrower shall cause Mortgage Borrower to (i) perform and observe in all material respects
all of its covenants and agreements contained in the Hotel Management Agreement and the Technical
Services Agreement; (ii) take all reasonable and necessary action
to prevent the termination of the Hotel Management Agreement or the Technical Services
Agreement; (iii) enforce each material covenant or obligation of each of the Hotel Management
Agreement and the Technical Services Agreement in accordance with its terms; (iv) promptly give the
Administrative Agent copies of any default or other material notices given by or on behalf of
Mortgage Borrower or received by or on behalf of Mortgage Borrower from the Hotel Manager pursuant
to the Hotel Management Agreement or the Technical Services Agreement; and (v) take all such action
to achieve the purposes described in clauses (i), (ii) and (iii) of this
Section 9.20 as may from time to time be reasonably requested by the Administrative Agent;
provided, however, that Mortgage Borrower shall be permitted, upon the Administrative Agent’s
reasonable approval, to contest the validity or applicability of any requirement under the Hotel
Management Agreement or the Technical Services Agreement.



(2) Borrower shall cause Mortgage Borrower to not, without the Administrative Agent’s prior
written consent (which may be withheld in the Administrative Agent’s sole and absolute discretion),
(i) take any action to (A) cancel or terminate the Hotel Management Agreement or the Technical
Services Agreement, (B) replace the Hotel Manager or (C) appoint a new hotel manager; (ii) 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 or the Technical
Services Agreement; (iii) waive any material default under or breach of any material provisions of
the Hotel Management Agreement or the Technical Services 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 the Technical Services
Agreement, or vary or agree to the variation in any material way of any material provisions of the
Hotel Management Agreement or the Technical Services Agreement or of the performance of the Hotel
Manager under the Hotel Management Agreement or the Technical Services Agreement; (iv) 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 or the Technical Services
Agreement.



(3) Any change in day-to-day management and control of the Hotel Manager shall be cause for
Administrative Agent to re-approve such Hotel Manager and 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 Mortgage 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. Each 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 and the
Technical Services Agreement. Borrower shall cause Mortgage Borrower to fully perform all of its
covenants, agreements and obligations under the Management Agreement and the Technical Services
Agreement.


 


82









 






Section 9.21 Americans with Disabilities.



(1) Borrower (a) agrees that it shall use and shall cause Mortgage Borrower to 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.



(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 and shall not
permit Mortgage Borrower to alter the Project in any manner which would materially increase
Borrower’s or Mortgage 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 Mortgage 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 or Mortgage 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 and shall not permit Mortgage Borrower to, 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 and shall not permit Mortgage Borrower to 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 or Mortgage 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 and shall not permit Mortgage Borrower to take any
action, or omit to take any action, which would (a) cause Borrower’s or Mortgage 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.


 


83









 






Section 9.24 Property Specific Covenants.



(1) Borrower shall cause Mortgage Borrower to 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 Mortgage Loan 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.



(2) Without the prior written consent of Administrative Agent, Borrower shall not and shall
not permit Mortgage Borrower to amend, modify or terminate its Organizational Documents, 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) Borrower shall not permit the Building Conversion or any other renovations at the Project
to constitute “Level 3” alterations as defined in the Florida Building Code nor violate what is
commonly known as the “50% Rule” under Florida law.



Section 9.25 Forward Purchase Contract. Borrower shall cause each other Borrower Party which
is a party thereto (a) to perform and observe all of its covenants and agreements contained in the
Forward Purchase Contract; (b) to enforce each covenant or obligation of the other Borrower Parties
under the Forward Purchase Contract; (c) not to 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 Forward Purchase Contract; and (d) not to waive any material default under or
breach of any material provisions of the Forward Purchase Contract or waive, fail to enforce,
forgive or release any material right, interest or entitlement, howsoever arising, under or in
respect of any provisions of the Forward Purchase Contract.



Section 9.26 Mortgage Borrower Covenants. Borrower shall cause Mortgage Borrower to comply
with all obligations with which Mortgage Borrower has covenanted to comply under the Mortgage Loan
Agreement and all other Mortgage Loan Documents (including, without limitation, those certain
affirmative and negative covenants set forth in the Mortgage Loan Agreement and the Mortgage Loan
Documents) whether the Mortgage Loan has been repaid or the related Mortgage Loan Document has been
otherwise terminated, unless otherwise consented to in writing by Administrative Agent. Borrower
shall cause Mortgage Borrower to promptly notify Administrative Agent of all notices received by
Mortgage Borrower under or in connection with the Mortgage Loan, including, without limitation, any
notice by the Mortgage Lender to Mortgage Borrower of any default by Mortgage Borrower in the
performance or observance of any of the terms, covenants or conditions of the Mortgage Loan
Documents on the part of Mortgage Borrower to be performed or observed, and deliver to
Administrative Agent a true copy of each such notice, together with any other consents, notices,
requests or other written correspondence between Mortgage Borrower and Mortgage Lender.



Section 9.27 Refinancing or Prepayment of the Mortgage Loan. Neither Borrower nor Mortgage
Borrower shall be required to obtain the consent of Administrative Agent to refinance the Mortgage
Loan, provided that the Loans shall have (or shall simultaneously be) been paid in full in
accordance with the terms of this Agreement (including any prepayment premiums and other amounts
due and payable to Administrative Agent under the Loan Documents). Borrower shall cause Mortgage
Borrower to obtain the prior written consent of
Administrative Agent to enter into any other refinancing of the Mortgage Loan, which consent
may be withheld or conditioned in Administrative Agent’s sole and absolute discretion.


 


84









 






Section 9.28 Acquisition of the Mortgage Loan.



(1) No Borrower Party or any Affiliate of any of them or any Person acting at any such
Person’s request or direction, shall acquire or agree to acquire any Mortgage Lender’s interest in
the Mortgage Loan, or any portion thereof or any interest therein, or any direct or indirect
ownership interest in the holder of the Mortgage Loan, via purchase, transfer, exchange or
otherwise, and any breach or attempted breach of this provision shall constitute an Event of
Default hereunder. If, solely by operation of applicable subrogation law, Borrower shall have
failed to comply with the foregoing, then Borrower: (i) shall immediately notify Administrative
Agent of such failure; (ii) shall cause any and all such prohibited parties acquiring any interest
in the Mortgage Loan Documents: (A) not to enforce the Mortgage Loan Documents; and (B) upon the
request of Administrative Agent, to the extent any of such prohibited parties has or have the power
or authority to do so, to promptly: (1) cancel the promissory note evidencing the Mortgage Loan,
(2) reconvey and release the Lien securing the Mortgage Loan and any other collateral under the
Mortgage Loan Documents, and (3) discontinue and terminate any enforcement proceeding(s) under the
Mortgage Loan Documents.



(2) Administrative Agent (on behalf of the Lenders) shall have the right at any time to
acquire all or any portion of the Mortgage Loan or any interest in any holder of, or participant
in, the Mortgage Loan without notice or consent of Borrower or any other Borrower Party, in which
event Administrative Agent shall have and may exercise all rights of Mortgage Lender thereunder (to
the extent of its interest), including the right (i) to declare that the Mortgage Loan is in
default and (ii) to accelerate the Mortgage Loan indebtedness, in accordance with the terms thereof
and (iii) to pursue all remedies against any obligor under the Mortgage Loan Documents. In
addition, Borrower hereby expressly agrees that any claims, counterclaims, defenses, offsets,
deductions or reductions of any kind which Mortgage Borrower or any other Person may have against
relating to or arising out of the Mortgage Loan shall be the personal obligation of Mortgage
Lender, and in no event shall Mortgage Borrower be entitled to bring, pursue or raise any such
claims, counterclaims, defenses, offsets, deductions or reductions against the Lenders or
Administrative Agent or any Affiliate of the Lenders or Administration Agent or any other Person as
the successor holder of the Mortgage Loan or any interest therein, provided that Mortgage Borrower
may seek specific performance of its contractual rights under the Mortgage Loan Documents,



Section 9.29 Construction Management Contract. Borrower shall not and shall not permit
Mortgage Borrower, 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.


 


85









 





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, interest, the Agency Fee, 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 or failure to cause Mortgage Borrower 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 (ii) 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, Mortgage 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, the Collateral or any interest
therein, or of any interest in Borrower, Mortgage Borrower or any Borrower Party, 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.



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 under any of its obligations under 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), 9.25 (Forward Purchase Contract), 9.27 (Refinancing
or Prepayment of the Mortgage Loan), 9.28(1) (Acquisition of Mortgage Loan) or
14(1) (Completion of Building Conversion) of this Agreement.


 


86









 





Section 10.9 Involuntary Bankruptcy or Other Proceeding. Commencement of an involuntary case
or other proceeding against Borrower, Mortgage Borrower, any 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 Mortgage Borrower, 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.



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 Mortgage Borrower in
an amount aggregating in excess of $1,000,000, or (b) non-monetary judgments, orders or decrees
shall be entered against Borrower or Mortgage Borrower 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 Mortgage Borrower, as the case may be, to enforce any such judgment.


 


87









 





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



Section 10.15 Guarantees. Any Guarantor or Joinder Party shall (i) default under any
Guarantee or the Joinder, as applicable, beyond any applicable notice and grace period; or (ii)
revoke or attempt to revoke, contest or commence any action against its obligations under any
Guarantee or under the Joinder, as applicable.



Section 10.16 Interest Reserve Fund. Borrower uses, or permits the use of, funds from the
Interest Reserve Fund for any purpose other than the purpose for which such funds were disbursed in
accordance herewith.



Section 10.17 Mortgage Loan Event of Default. If any Mortgage Loan Event of Default shall
occur, or if Mortgage Borrower enters into or otherwise suffers or permits any amendment, waiver,
supplement, termination, extension, renewal, replacement or other modification of any Mortgage Loan
Document without the prior written consent of Administrative Agent.



Section 10.18 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 10.19 Junior Loan Intercreditor Agreement. Any failure by any of Mortgage Borrower,
Borrower, Junior Mezzanine Borrower or Junior Mezzanine Lender to perform or observe any the
agreements and covenants contained in the Junior Loan Intercreditor Agreement.



Section 10.20 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.


 


88









 





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, the obligations of the Lenders to advance
amounts hereunder shall immediately terminate, and 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 Administrative Agent’s
sole discretion.




Section 11.2 Remedies — Other Events.



(1) 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.



(2) Any amounts recovered from the Collateral after an Event of Default may be applied by
Administrative Agent toward the payment of any interest and/or principal of the Loans and/or any
other amounts due under the Loan Documents in such order, priority and proportions as
Administrative Agent in its sole discretion shall determine.



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 or the Collateral as it may deem necessary or appropriate. If the
Administrative Agent shall elect to pay any sum due with reference to the Project or the
Collateral, 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



 


89









 






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.



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



 


90









 






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 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



 


91









 






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.



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, 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 or the
Collateral (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.


 


92









 





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,
the Collateral 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 interest in the Project or the Collateral 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.


 


93









 





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.


 


94









 





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 (a) the repayment in full of the Loans and
the release of the Liens evidencing or securing the Loans or (b) 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.



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.


 


95









 






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 CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS 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.



(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 



 


96









 






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 THE
CHIEF LEGAL OFFICER OF 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.



 


97











 




(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 and, in the event of a proposed
assignment to a Person which is not an Eligible Assignee, the consent of Borrower, which consent
shall not be unreasonably withheld and shall be deemed granted if not received within five (5)
Business Days following written request therefore); provided that:



(a) no such consent by the Administrative Agent or Borrower 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 (A) such Lender’s obligations under this Agreement and the other Loan
Documents shall remain unchanged, (B) such Lender shall remain solely responsible to the other
applicable parties hereto for the performance of such obligations and (C) 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



 


98









 






will not, without the consent of the Participant, agree to (i) increase or extend the term of such Lender’s
Commitment, (ii) 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, (iii) reduce the
amount of any such payment of principal, (iv) 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 (v) 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.



(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, other than Ditmas
Capital (the “Broker”). Borrower hereby agrees to pay all fees and commissions due and
payable to Broker and 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 (including Broker) that
such Person acted on behalf of such Borrower in connection with the transactions contemplated
herein.


 


99









 






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 Reserved.



Section 12.28 Mortgage Loan Defaults.



(1) Without limiting the generality of the other provisions of this Agreement, and without
waiving or releasing Borrower from any of its obligations hereunder, if there shall exist any Event
of Default under the Mortgage Loan Documents or if Mortgage Loan Administrative Agent asserts that
an Event of Default has occurred and is continuing under the
Mortgage Loan Documents (whether or not Mortgage Loan Administrative Agent shall have
delivered proper notice to Mortgage Borrower, and without regard to any other defenses or offset
rights Mortgage Borrower may have against Mortgage Loan Administrative Agent (on behalf of Mortgage
Lender), Borrower hereby expressly agrees that Administrative Agent (on behalf of Lenders) shall
have the immediate right, without notice to or demand on Borrower or Mortgage Borrower, but shall
be under no obligation: (i) to pay



 


100









 






all or any part of the Mortgage Loan, and any other sums, that
are then due and payable and to perform any act or take any action on behalf of Mortgage Borrower,
as may be appropriate, to cause all of the terms, covenants and conditions of the Mortgage Loan
Documents on the part of Mortgage Borrower to be performed or observed thereunder to be promptly
performed or observed; and (ii) to pay any other amounts and take any other action as
Administrative Agent, in its sole and absolute discretion, shall deem advisable to protect or
preserve the rights and interests of Lenders in the Loans and/or the Collateral. Administrative
Agent shall have no obligation to complete any cure or attempted cure undertaken or commenced by
Administrative Agent. All sums so paid and the costs and expenses incurred by Administrative Agent
in exercising rights under this Section 12.28(1) (including, without limitation, reasonable
attorneys’ and other professional fees), with interest at the Default Rate, for the period from the
date of demand by Administrative Agent to Borrower for such payments to the date of payment to
Administrative Agent, shall constitute a portion of the Debt, shall be secured by the Pledge
Agreement and shall be due and payable to Administrative Agent within two Business Days following
demand therefor.



(2) Subject to the rights of tenants and the owners of Units, Borrower hereby grants, and
shall cause Mortgage Borrower to grant, Administrative Agent and any Person designated by
Administrative Agent the right to enter upon the Project at any time for the purpose of carrying
out the rights granted to Administrative Agent under this Section 12.28. Borrower shall
not, and shall not cause or permit Mortgage Borrower or any other Person to impede, interfere with,
hinder or delay, any effort or action on the part of Administrative Agent to cure any default or
asserted default under the Mortgage Loan, or to otherwise protect or preserve Administrative
Agent’s interests in the Loans and the Collateral, including the Project in accordance with the
provisions of this Agreement and the other Loan Documents.



(3) Borrower hereby indemnifies Lenders and Administrative Agent from and against all
out-of-pocket liabilities, obligations, losses, damages, penalties, assessments, actions, or causes
of action, judgments, suits, claims, demands, costs, expenses (including, without limitation,
reasonable attorneys’ and other professional fees, whether or not suit is brought, and settlement
costs), and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Administrative Agent as a result of the foregoing actions described in Section
12.28(1). Administrative Agent shall have no obligation to Borrower, Mortgage Borrower or any
other party to make any such payment or performance. Borrower shall not impede, interfere with,
hinder or delay, and shall cause Mortgage Borrower to not impede, interfere with, hinder or delay,
any effort or action on the part of Administrative Agent to cure any default or asserted default
under the Mortgage Loan, or to otherwise protect or preserve Administrative Agent’s interests in
the Loans and the Collateral following a default or asserted default under the Mortgage Loan.


 


101









 





(4) If Administrative Agent shall receive a copy of any notice of default under the Mortgage
Loan Documents sent by Mortgage Loan Administrative Agent to Mortgage
Borrower, such notice shall constitute full protection to Lender for any action taken or
omitted to be taken by Administrative Agent, in good faith, in reliance thereon. As a material
inducement to Administrative Agent making the Loans, Borrower hereby absolutely and unconditionally
release and waive all claims against Administrative Agent arising out of Administrative Agent’s
exercise of its rights and remedies provided in this Section 12.28(4) other than claims
arising out of the fraud, illegal acts, gross negligence or willful misconduct of Administrative
Agent. In the event that Administrative Agent (on behalf of Lenders) makes any payment in respect
of the Mortgage Loan, Administrative Agent (on behalf of Lenders) shall be subrogated to all of the
rights of Mortgage Loan Administrative Agent (on behalf of Mortgage Lender) under the Mortgage Loan
Documents against the Project, in addition to all other rights it may have under the Loan
Documents.



(5) Any default under the Mortgage Loan which is cured by Administrative Agent (on behalf of
Lenders), whether or not such cure is prior to the expiration of any applicable grace, notice or
cure period under the Mortgage Loan Documents, shall constitute an immediate Event of Default under
this Agreement without any notice, grace or cure period otherwise applicable under this Agreement.



(6) In the event that Administrative Agent (on behalf of Lenders) makes any payment in respect
of the Mortgage Loan, Administrative Agent (on behalf of Lenders) shall be subrogated to all of the
rights of Mortgage Loan Administrative Agent (on behalf of Mortgage Lender) under the Mortgage Loan
Documents against the Project and Mortgage Borrower in addition to all other rights Lender may have
under the Loan Documents or applicable law.




Section 12.29 Intercreditor Agreement.



(1) Lenders and Mortgage Lender are parties to a certain intercreditor agreement dated as of
the Original Closing Date (the “Intercreditor Agreement”) memorializing their relative
rights and obligations with respect to the Mortgage Loan, the Loans, Mortgage Borrower, Borrower,
the Collateral and the Project. Borrower and Mortgage Borrower hereby acknowledge and agree that
(i) such Intercreditor Agreement is intended solely for the benefit of Lenders and Mortgage Lender
and (ii) Borrower and Mortgage Borrower are not intended third-party beneficiaries of any of the
provisions therein and shall not be entitled to rely on any of the provisions contained therein.
Lenders and Mortgage Lender shall have no obligation to disclose to Borrower the contents of the
Intercreditor Agreement. Borrower’s obligations hereunder are independent of such Intercreditor
Agreement and remain unmodified by the terms and provisions thereof.



(2) In the event the Administrative Agent (on behalf of the Lenders) is required pursuant to
the terms of the Intercreditor Agreement to pay over any payment or distribution of assets, whether
in cash, property or securities which is applied to the Debt, including, without limitation, any
proceeds of the Project previously received by Administrative Agent (on behalf of the Lenders) on
account of the Loans to the Mortgage Loan Administrative Agent (on behalf of the Mortgage Lender),
then Borrower agrees to indemnify Administrative Agent (on behalf of the Lenders) and Lenders for
any amounts so paid, and any amount so paid shall continue to be owing pursuant to the Loan
Documents as part of the Debt notwithstanding the prior receipt of such payment by Administrative
Agent (on behalf of the Lenders).


 


102









 





Section 12.30 Discussions with Mortgage Lender. In connection with the exercise of its rights
set forth in the Loan Documents, Administrative Agent shall have the right at any time to discuss
the Project, the Mortgage Loan, the Loans or any other matter directly with Mortgage Lender,
Mortgage Loan Administrative Agent or Mortgage Lender’s consultants, agents or representatives
without notice to or permission from Borrower or any other Borrower Party, nor shall Administrative
Agent have any obligation to disclose such discussions or the contents thereof with Borrower or any
other Borrower Party.



Section 12.31 Independent Approval Rights. If any action, proposed action or other decision
is consented to or approved by Mortgage Loan Administrative Agent, such consent or approval shall
not be binding or controlling on Administrative Agent. Borrower hereby acknowledges and agrees
that (i) the risks of Mortgage Lender in making the Mortgage Loan are different from the risks of
Lenders in making the Loans, (ii) in determining whether to grant, deny, withhold or condition any
requested consent or approval Mortgage Loan Administrative Agent and the Administrative Agent may
reasonably reach different conclusions, and (iii) Administrative Agent has an absolute independent
right to grant, deny, withhold or condition any requested consent or approval based on its own
point of view. Further, the denial by the Administrative Agent of a requested consent or approval
shall not create any liability or other obligation of Lenders or Administrative Agent if the denial
of such consent or approval results directly or indirectly in a default under the Mortgage Loan,
and Borrower hereby waives any claim of liability against Lenders or Administrative Agent arising
from any such denial.



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 or Mortgage Borrower’s commission of
a criminal act, (2) the willful misapplication by Borrower or any other 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 other Borrower Party made in or in connection with the Loan Documents or the Loan; (4)
Mortgage 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 other 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 or Mortgage 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) 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; (7) to the extent of sufficient Operating Revenues, Mortgage
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


 


103









 





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; (8) intentional or grossly negligent damage or destruction to the Project caused by the
acts or omissions of Borrower, Mortgage Borrower or their respective agents, employees, or
contractors; (9) a breach of Borrower’s obligations with respect to environmental matters under
Article 5; (10) 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;
(11) any brokerage commission or finder’s fees claimed in connection with the transactions
contemplated by the Loan Documents; or (12) Borrower’s or Mortgage Borrower’s intentional
interference with the Administrative Agent’s exercise of rights and remedies under the Loan
Documents. 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
Collateral or the Project; (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 or of any
direct or indirect interest in Borrower, Mortgage Borrower, or any other Borrower Party, as
required by the Loan Documents; or (v) Mortgage Borrower or any other Borrower Party which is a
party to the Forward Purchase Contract shall be default in the performance of its obligations
thereunder or shall bring any action alleging that the Forward Purchase Contract is invalid or
unenforceable in any respect.



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.


 


104









 





ARTICLE 14




BUILDING CONVERSION; PAYMENT OF

RELEASE PRICES; SALE OF UNITS





Section 14.1 Completion of Building Conversion.



(1) Borrower shall cause Mortgage Borrower to diligently pursue to completion the Building
Conversion in accordance with the Plans and Specifications, the Project Budget, Applicable Law, the
Mortgage Loan Documents 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 Mortgage Borrower to 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. Borrower shall or shall cause Mortgage Borrower to pay all the expenses and
costs of the Administrative Agent in connection with the Building Conversion, including without
limitation, the Administrative Agent’s reasonable attorneys’ fees, intangible taxes, additional
title insurance premiums, recording fees and all other costs connected with the funding of
advances.



(2) Borrower shall not permit Mortgage Borrower to modify the Plans and Specifications in any
material respect, nor shall Borrower permit Mortgage Borrower to modify the Project Budget, in each
case without the Administrative Agent’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 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.



Section 14.2 Marketing and Sales Program; Sales of Units; Deposits. Borrower shall cause
Mortgage Borrower to 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 cause Mortgage Borrower to
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 Mortgage 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 cause Mortgage Borrower to 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 Contract shall be held in escrow in the Condominium Escrow in
accordance with Applicable Law and a Condominium Escrow Agreement approved by the



 


105









 






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 Mortgage 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 Mortgage Borrower to cause such deposit to be released from the Condominium
Escrow to the Mortgage Loan Administrative Agent to be applied in accordance with Section 14.2 of
the Mortgage Loan Agreement until such time as the Mortgage Loan has been repaid in full
(thereafter, Borrower shall pay such deposit to the Administrative Agent to be applied to the
outstanding principal under the Loans).



Section 14.3 Sale of Units and Payment of Release Price. Borrower shall not allow Mortgage
Borrower to permit the release of any Units from the Liens of the Mortgage Loan Documents except
upon satisfaction of the “Partial Release Conditions” set forth in the Mortgage Loan Agreement. In
the event that the Mortgage Loan is fully repaid prior to the Maturity Date, Borrower shall not
permit the Mortgage Loan Borrower to consummate the sale of any Unit unless the Administrative
Agent has determined that each of the following conditions shall have been satisfied:




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



(2) Borrower shall pay to the Administrative Agent the Release Price for such Unit, which
payment shall be applied in accordance with the provisions of this Agreement;



(3) The Administrative Agent shall be given not less than fifteen (15) Business Day’s prior
written notice of such sale, 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; and



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



Section 14.4 Application of Excess Cash Flow. Borrower shall cause all Excess Cash Flow to be
applied in accordance with Section 14.4 of the Mortgage Loan Agreement. In the event that the
Mortgage Lender waives the requirements of Sections 14.4 or 14.6 of the Mortgage Loan Agreement or
the Mortgage Loan has been repaid in full, Borrower shall comply with Sections 14.4 and 14.6 of the
Mortgage Loan Agreement as though they are a part of this Agreement.



Section 14.5 Sale of Parking Spaces. During the term of this Agreement, Borrower shall not
permit Mortgage Borrower to 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 or Mortgage
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 Qualified Purchase Contract shall be paid to the Mortgage Loan Administrative
Agent and applied to reduce the principal outstanding balance under the Mortgage Loan until such
time as the Mortgage Loan has been repaid in full. Thereafter, in the event Borrower is permitted
to sell a Parking Space separate from a sale of a Unit, as a condition to such sale, Borrower shall
pay to the Administrative Agent an amount equal to the Parking Space Release Price for such Parking
Space.


 


106









 





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 Pledge Agreement, 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.


 


107









 





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 Section
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.



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 (1) to make protective advances that the Administrative Agent determines are necessary to
protect or maintain the Project and (2) 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



 


108









 






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 or Collateral, 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.



(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 (i) any expenses incurred by the Administrative Agent in connection with
any Default to the extent any expenses have not been paid by Borrower, (ii) any advances made to
pay taxes or insurance or otherwise to preserve the Lien of the Pledge Agreement or to preserve and
protect the Collateral, (iii) any other expenses incurred in connection with the enforcement of the
Pledge Agreement or other Loan Documents, and (iv) 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 Pledge Agreement 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 Pledge Agreement 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
Pledge Agreement or any other



 


109









 






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 Pledge Agreement 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 Pledge Agreement 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 conduct of such foreclosure and the
manner of taking and holding title to the Collateral (other than as set forth in subsection
(5) below), the sale of the Collateral after realization of the Collateral under the Pledge
Agreement, 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.



(5) If title to the Collateral is acquired after a realization of the Collateral under the
Pledge Agreement, 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 Collateral, 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
Collateral, 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.


 


110









 





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.



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 15.5.



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.


 


111









 





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.



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.


 


112









 





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.



Section 15.11 Reserved.



Section 15.12 Defaulting Lenders.



(1) If any Lender (a “Defaulting Lender”) shall for any reason fail to (i) make any
respective Loan required pursuant to the terms of this Agreement or (ii) pay its proportionate
share of an advance or disbursement to protect the Collateral or the Lien of the Pledge Agreement,
any of the other Lenders may, but shall not be obligated to, make all or a portion of the
Defaulting Lender’s Loan or 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 (i) 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 or disbursed (the “Advanced Amount”) bearing interest (including interest at the
Default Rate, if applicable) and (ii) 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 advancing Loans, losses incurred in connection with the Loan, including
costs and expenses of enforcement, advancing to preserve the Lien of the Pledge Agreement or to
preserve and protect the Collateral, 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.


 


113









 





(3) A Special Advance Lender shall (i) 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 (ii) 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.



(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 herefor
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.


 


114









 





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.



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]






 


115









 








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 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 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:	 	Abraham
Galbut 	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 	 	 






	 	 	 	 	 
	 

	 	Address for Notices:
	 	- and -
	 
	 	 	 	 
	 

	 	c/o Sanctuary Holdings

4770 Biscayne Boulevard

Miami, Florida 33137

Attention: Abraham Galbut

Telecopier: (786) 427-6203

	 	Greenburg Traurig

1221 Brickell Avenue

Miami, Florida 33131

Attention: Steven Goldman, Esq.

Telecopier: (305) 961-5561
	 
	 	 	 	 
	 

	 	With copies to:
	 	- and -
	 
	 	 	 	 
	 

	 	Mondrian Miami Investment LLC

c/o Morgans Hotel Group 

475 10th Avenue 

New York, New York 10018 

Attention: Marc Gordon

Telecopier: (212) 277-4270
	 	McDermott Will & Emery LLP

340 Madison Avenue

New York, New York 10017

Attention: Keith M. Pattiz, Esq.

Telecopier: (212) 547-5444





 


S-2









 





FOR PURPOSES OF SECTIONS 9.6 and 9.8




MONDRIAN MIAMI INVESTMENT LLC,

a Delaware limited liability company



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MORGANS GROUP LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Morgans Hotel Group Co.,

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Marc Gordon 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	Marc
Gordon 	 	 
	 

	 	 	 	 	 	 	 	Title:	 	Authorized
Signatory 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SANCTUARY WEST AVENUE LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Abraham Galbut 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name: Abraham Galbut 





	 

	 	
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 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









 







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
Mortgage Borrower 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.



(1) 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









 







(2) 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









 





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



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



(5) 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


Note



 












 







EXHIBIT D




FORM OF ASSIGNMENT AND ACCEPTANCE




Reference is made to the Amended and Restated Mezzanine Loan Agreement dated as of
[_____], 2008 (as amended and in effect on the date hereof, the “Agreement”), between
1100 WEST HOLDINGS, 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.


 


Annex 1-1









 





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.




 


Annex 1-2









 







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 Mezzanine Loan Agreement dated as of [_________], 2008 (as the same may
be amended, modified or supplemented from time to time, the “Agreement”) by and among
1100 WEST HOLDINGS, 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 HOLDINGS, 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)
	 	 	                    	 





 


1-1









 





SCHEDULE 1(a)




COMMITMENTS




	 	 	 	 	 
	LENDER	 	COMMITMENT	 
	 
	Eurohypo AG, New York Branch
	 	$	28,000,000	 





 


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


ADVANCE AND CONSTRUCTION COMPLETION CONDITIONS




Part A – Advance Conditions




Part B – Construction Completion Conditions




PART A. ADVANCE CONDITIONS




Each Loan 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 or after giving
effect to the requested advance).



2. The representations and warranties contained in this Loan Agreement and in all other Loan
Documents are true and correct.




3. Such Loan shall be secured by the Loan Documents.



4. Borrower shall have paid the Administrative Agent’s (and the Lenders’) costs and expenses
in connection with such Loan (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 other 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 other 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. Borrower shall immediately deposit all proceeds of such Loan in a separate and exclusive
account to be used solely for the purposes specified in this Agreement and in Borrower’s advance
request and, upon the Administrative Agent’s request, shall promptly furnish the Administrative
Agent with evidence thereof.



8. Each Loan shall only be made on a Payment Date.


 


Schedule 2.1 - 1









 





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;




2. The Building Conversion shall have occurred by the Construction Completion Deadline; and



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;




(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;


 


Schedule 2.1 - 2









 






(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 - 3









 





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 7.3




LITIGATION




None





 


Schedule 7.3









 







SCHEDULE 7.23




CONSTRUCTION BUDGET





 


Schedule 7.23 - 1









 







SCHEDULE 7.27




ORGANIZATIONAL CHART





 


Schedule 7.27









 







SCHEDULE 7.30




MORTGAGE LOAN DOCUMENTS





	1.	 	Amended and Restated Loan Agreement dated as of the date hereof, between Mortgage
Borrower, Mortgage Loan Administrative Agent, Mortgage Lenders, and Borrower, together with
Joinder Agreement executed by Joinder Parties.






	2.	 	Amended and Restated Substitute Promissory Note A-1 dated as of the date hereof, in the
principal amount of $27,024,385.82, executed by Mortgage Borrower in favor of CIT Lending
Services.






	3.	 	Amended and Restated Substitute Promissory Note A-2 dated as of the date hereof, in the
principal amount of $26,373,195.74, executed by Mortgage Borrower in favor of KBC Bank NV.






	4.	 	Amended and Restated Substitute Promissory Note B dated as of the date hereof, in the
principal amount of $31,278,947.05, executed by Mortgage Borrower in favor of Eurohypo AG,
New York Branch.






	5.	 	Mortgage, Security Agreement, Fixture Filing and Assignment of Rents and Leases dated
as of August 8, 2006, by Mortgage Borrower to Mortgage Loan Administrative Agent.






	6.	 	Assignment of Leases, Rents and Security Deposits dated as of August 8, 2006, by
Mortgage Borrower in favor of Mortgage Loan Administrative Agent.






	7.	 	Collateral Assignment of Contracts, Developer Rights, Licenses, Permits, Warranties and
Approvals dated as of August 8, 2006, by Mortgage Borrower to Mortgage Loan Administrative
Agent.






	8.	 	Hazardous Substances Indemnity Agreement dated as of August 8, 2006, by Mortgage
Borrower, Galbut, and Morgans LLC to and for the benefit of Mortgage Loan Administrative
Agent.






	9.	 	Limited Guarantee dated as of August 8, 2006, by Galbut in favor of Mortgage Loan
Administrative Agent.






	10.	 	Second Amended and Restated Completion Guaranty dated as of the date hereof, by Joinder
Parties in favor of Mortgage Loan Administrative Agent.






	11.	 	Hotel Manager’s Consent and Subordination of Management Agreement dated as of August 8,
2006, by Mortgage Borrower and Hotel Manager in favor of Mortgage Loan Administrative
Agent.






	12.	 	Project Manager’s Consent and Subordination of Management Agreement dated as of August
8, 2006, by Mortgage Borrower and Hotel Manager in favor of Mortgage
Loan Administrative Agent.





Schedule 7.30




  


 









 









	13.	 	Agency and Arrangement Fee Letter dated as of August 8, 2006, by Mortgage Loan
Administrative Agent and agreed and accepted by Mortgage Borrower.






	14.	 	Amendment to Fee Letter dated as of September 6, 2007, by Mortgage Loan Administrative
Agent and agreed and accepted by Mortgage Borrower.






	15.	 	Second Amended and Restated Cash Management and Security Agreement dated as of the date
hereof, among Mortgage Borrower, Mortgage Loan Administrative Agent, Hotel Manager, and
Regions Bank.






	16.	 	First Amendment to Mortgage, Security Agreement, Fixture Filing and Assignment of Rents
and Leases dated as of December 19, 2006, by Mortgage Borrower to Mortgage Loan
Administrative Agent.






	17.	 	Second Amendment to Mortgage, Security Agreement, Fixture Filing and Assignment of
Rents and Leases dated as of September 6, 2007, by Mortgage Borrower to Mortgage Loan
Administrative Agent






	18.	 	Third Amendment to Mortgage, Security Agreement, Fixture Filing and Assignment of Rents
and Leases dated as of April 25, 2008, by Mortgage Borrower to Mortgage Loan Administrative
Agent.






	19.	 	Fourth Amendment to Mortgage, Security Agreement, Fixture Filing and Assignment of
Rents and Leases dated as of the date hereof, by Mortgage Borrower to Mortgage Loan
Administrative Agent.






	20.	 	Subordination and Standstill Agreement dated as of the date hereof, by Mortgage Loan
Administrative Agent, Administrative Agent, Mortgage Borrower, Borrower, 1100 West Holdings
II, LLC and RMF Capital LLC.






	21.	 	Omnibus Amendment to and Reaffirmation of Loan Documents dated as of the date hereof,
by Mortgage Borrower, Borrower, and Joinder Parties for the benefit of Mortgage Loan
Administrative Agent.






	22.	 	Assignment of Construction Contract dated as of the date hereof, by Mortgage Borrower
to Mortgage Loan Administrative Agent.






	23.	 	Consent and Agreement of Construction Manager dated as of the date hereof, by G.T.
Construction and Development, Inc. to Mortgage Loan Administrative Agent.






	24.	 	Reaffirmation of Hotel Manager’s Consent and Subordination of Manager’s Agreement and
Technical Services Agreement dated as of the date hereof, by Hotel Manager for the benefit
of Mortgage Loan Administrative Agent.






	25.	 	Assignment, Pledge and Security Agreement (Hedge Agreement) dated as of the date
hereof, by Mortgage borrower for the benefit of Mortgage Loan Administrative
Agent.






	26.	 	Intercreditor Agreement dated as of April 25, 2008 by and between Mortgage Loan
Administrative Agent and Administrative Agent agreed and acknowledged by KBC Bank NV and
CIT Lending Services.





Schedule 7.30