Document:

Exhibit 10.1

 

SENIOR MEZZANINE LOAN AGREEMENT

This
SENIOR MEZZANINE LOAN AGREEMENT (this “Agreement”) is
made and entered into as of this 22nd day
of September, 2006, by and between GC 128 Voss SM LLC, a Delaware limited
liability company, whose address is 2001 Bryan Street, Suite 3700, Dallas,
Texas, 75201 (“Borrower”), and Behringer Harvard Alexan
Voss, LLC, a Delaware limited liability company, whose address is 15601 Dallas
Parkway, Suite 600, Addison, Texas, 75001 (“Lender”).

R E C I T A L S:

This Agreement is
made with reference to the following facts:

A.            Concurrently herewith, Bank of America, N.A., a national
banking association (“Senior Lender”)
is making a mortgage loan in the amount of Thirty Nine Million Six Hundred
Eleven Thousand Sixty Six Dollars ($39,611,066.00) (the “Senior Loan”)
to GC 127 Voss Holdings LLC, a Delaware limited liability company (“Mortgagor”) evidenced by a Promissory Note of even date
herewith (the “Senior Note”).

B.            Mortgagor, concurrently herewith, will be the owner of that
certain land located in Houston, Texas and more particularly described on Exhibit “A-1” (the “La Scala Parcel”) attached hereto and
at a later date, Mortgagor will purchase that certain land located in Houston,
Texas and more particularly described on Exhibit “A-2”  (the “Hart Parcel”) (the La Scala Parcel initially,
and the Hart Parcel when acquired, together with all improvements, fixtures and
other appurtenances, shall be known as the “Property”).  Mortgagor will construct on the Property a 376
unit apartment project (the “Project”).  The Senior Note is secured by a deed of
trust, mortgage, or deed to secure debt, of even date herewith (together with
any and all extensions, renewals, substitutions, replacements, amendment,
modifications and/or restatements thereof (the “Security
Instrument”) in favor of Senior Lender encumbering the Project.

C.            Borrower is the legal and beneficial owner of 100% of the
Equity Interests in Mortgagor.

D.            Borrower has requested that Lender, as senior mezzanine
lender, make a loan to Borrower (the “Loan”) in the
amount of Six Million Eight Hundred Fifty Thousand Dollars ($6,850,000.00) (the
“Loan Amount”) subject to the term and
provisions of this Agreement, which Loan is to be advanced as hereinafter
provided and is to be evidenced by the Note. 
The Note is to be secured by the Pledge and Security Agreement and the
other collateral referred to in Section 5 below.

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E.             Borrower desires to borrow the Loan Amount from Lender,
the proceeds of which are to be used by Borrower to, among other things, pay
the costs and expenses, if any, referred to in Section 3(b) below.

NOW, THEREFORE, in
consideration of the foregoing and the mutual promises and agreements
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1.           RECITALS.  The recitals set forth above are true and
correct and are incorporated herein by reference.

2.           DEFINITIONS.  The following terms, when used in this
Agreement (including when used in the above recitals), shall have the following
meanings:

(a)                                  “Accounting Records”:  shall
mean such records used to prepare financial statements including but not
limited to:  (i) supporting documentation
for cash disbursements (including check copies and invoices); (ii) supporting
documentation for cash receipts (including deposit slips); (iii) contracts;
(iv) check registers; (v) monthly bank account reconciliations and (vi) such
other documentation in the possession of Borrower or its Affiliates or which
Borrower will use its best efforts to acquire, as Lender shall reasonably require
for the preparation of financial statements for the Project, Mortgagor or
Borrower.

(b)                                 “Affiliate”:  of any
specified person or entity shall mean any other person or entity, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified person or entity. 
For purposes of this definition, “control” shall mean the ability,
whether by the ownership of shares or other equity interests, by contract or
otherwise, to elect a majority of the directors of a corporation, to make
management decisions on behalf of, or independently to select the managing
partner of, a partnership, or otherwise to have the power independently to
remove and then select a majority of those individuals exercising managerial
authority over an entity.  Control of an
entity shall be conclusively presumed in the case of the ownership of more than
50% of the equity interests in the entity.

(c)                                  “Annual Budget”:  shall
mean, for any period, the budget submitted to Lender and in effect for such
period as provided in Section 12 hereof.

(d)                                 “Bankruptcy Proceedings”: 
is defined in Section 17(j).

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(e)                                  “Borrower”:  means the entity
identified as “Borrower” in the first paragraph of this Agreement, together
with its successors and assigns.

(f)                                    “Budget”:  shall mean
that construction budget attached hereto for the La Scala Parcel as Exhibit “B-1”
and for the Hart Parcel as Exhibit “B-2”.

(g)                                 “Business Day”:  shall mean all days other than Saturday,
Sunday or any other day on which national banks doing business in
Dallas, Texas are not open for business.

(h)                                 “Code”:  the Internal
Revenue Code of 1986, as amended from time to time, or the corresponding
provisions of any successor federal income tax law.  Any reference to a particular provision of
the Code shall include any amendment of such provision or the corresponding
provision of any successor federal income tax law.

(i)                                     “Collateral”:  is
defined in the Pledge Agreement.

(j)                                     “Completion Guaranty”: means that certain Senior Mezzanine Completion
Guaranty of even date herewith, executed by the Guarantors, jointly and
severally, in favor of Lender.

(k)                                  “Default Interest Rate”: 
is defined in the Note.

(l)                                     “Encumbrance”:  shall
mean any pledge, encumbrance, hypothecation or other grant of security
interest, whether direct or indirect, voluntary or involuntary or by operation
of law, and whether or not consented to by Lender, of or in (i) all or any
portion of, or interest in, the Project (other than any encumbrance by the
Senior Loan Documents and the Permitted Exceptions), or (ii) any Equity
Interests in Mortgagor, or (iii) any part of the Principal’s Equity Interests
in Borrower.

(m)                               “Environmental Indemnity”: 
shall mean the Senior Mezzanine Environmental Indemnity Agreement of
even date herewith, executed by Borrower and containing representations,
warranties, covenants and indemnities in favor of Lender with respect to
Hazardous Materials.

(n)                                 “Equity Interests”: 
means, with respect to any Person, shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in such Person, and
any warrants, options or other rights entitling the holder thereof to purchase
or acquire from such Person any such equity interest issued by such Person.

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(o)                                 “Event of Default”: 
shall have the meaning given in Section 17 hereof.

(p)                                 “Guarantors”:  shall
mean CFP Residential, L.P., Kenneth Valach, J. Ronald Terwilliger and Brian
Austin.

(q)                                 “Hazardous Materials”: 
shall have the meaning given in the Environmental Indemnity.

(r)                                    “Indebtedness”:  shall
mean the principal of, interest on, and any other amounts due at any time under,
this Agreement, the Note, the Pledge Agreement or any other Loan Document,
including prepayment premiums, late charges, default interest, and advances to
protect the security of the Collateral.

(s)                                  “Junior Mezzanine Loan”: shall mean that certain Junior
Mezzanine Loan dated of even date herewith made to Principal, as borrower, by Lender,
as junior mezzanine lender.

(t)                                    “Leases”:  shall mean
all present and future leases, subleases, licenses, concessions or other
possessory interests now or hereafter in force, whether oral or written,
covering or affecting the Project, or any portion of the Project, and all
modifications, extensions or renewals.

(u)                                 “Lender”:  means the
entity identified as “Lender” in the first paragraph of this Agreement and its
successors and assigns.

(v)                                 “Loan Documents”: 
shall mean the Note, this Loan Agreement, the Pledge Agreement, the Completion
Guaranty, the Environmental Indemnity, the Subordination of Management
Agreement and all other documents executed by Borrower or Guarantors to
evidence, secure or set out the terms of the Loan, each as the same may
hereafter be amended, modified and restated from time to time.

(w)                               “Loan Commitment Fee”: 
means the amount of Two Hundred Five Thousand Five Hundred Dollars ($205,500.00), being 3% of the Loan Amount, of which
$115,500 is payable as of the date of this Agreement and the remainder of which
is payable on the date the Mortgagor purchases the Hart Parcel.

(x)                                   “Management Agreement”: 
shall mean that certain Management Agreement dated September 22, 2006,
entered into by and between Mortgagor and Manager, pursuant to which Manager
has agreed to manage the operations of the Project, as the same may be amended
from time to time, that certain Management Agreement dated September 22, 2006,
entered into by and between Mortgagor and Manager, pursuant to which Manager
has agreed to manage the

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demolition of the existing improvements on the La
Scala parcel as the same may be amended from time to time, or any other
management agreement approved by Lender pursuant to Section 13(h) hereof.

(y)                                 “Manager”:  shall mean Riverstone
Residential SC, LP or any other property management company approved by Lender
pursuant to Section 13(h) hereof.

(z)                                   “Maturity Date” shall have the meaning given in the Note.

(aa)                            “Note”:  shall mean
that certain Senior Mezzanine Promissory Note, dated of even date herewith, in
the Loan Amount, made payable by Borrower to the order of Lender, evidencing
all amounts outstanding under the Loan from time to time, as the same may be
amended from time to time.

(bb)                          “Option Agreement”: 
shall mean that certain Option Agreement dated of even date herewith, among
Lender and Principal, giving Lender the option to purchase the Equity Interests
in Mortgagor and Borrower on the terms and conditions set forth therein.

(cc)                            “Option Guaranty”: 
shall mean that certain Limited Guaranty dated of even date herewith,
executed by Guarantors for the benefit of Principal guaranteeing certain
obligations in connection with the Option Agreement.

(dd)                          “Permitted Exceptions”: 
shall mean (1) the title exceptions included in the Policy required to
be delivered to Lender pursuant to Section 7(a) hereof, as the same may
be endorsed from time to time with the consent of the Lender, (2) liens and
security interests securing the Loan or the Senior Loan, (3) liens for taxes,
assessments or other governmental charges or levies that are not then due or
that are being contested in good faith and in accordance with applicable
statutory procedures, (4) mechanic’s liens against the Project which are bonded
off, released of record or otherwise remedied to Lender’s reasonable
satisfaction within 30 days of the date of creation, (5) Leases entered into on
terms allowed by this Agreement and (6) other matters approved in writing by
Lender.

(ee)                            “Person”:  shall mean
any individual, corporation, partnership, limited liability company, joint
venture, estate, trust, or unincorporated association, any other entity, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of the
foregoing.

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(ff)                                “Pledge Agreement”: 
shall mean that certain Senior Mezzanine Pledge and Security Agreement,
dated of even date herewith, from the Borrower to Lender, as the same may be
amended, modified and restated from time to time, pursuant to which the
Borrower has pledged all of the Equity Interests in the Mortgagor.

(gg)                          “Principal”:  shall
mean GC 129 Voss JM LLC, a Delaware limited liability company, the sole member
of Borrower and the holder of all Equity Interests in Borrower, and any person
or entity who becomes the owner of any Equity Interest in Borrower after the
date of this Agreement and is identified as such in an amendment or supplement
to this Agreement.

(hh)                          “Sale”:  shall mean any
sale, assignment, transfer, conveyance or other disposition, whether voluntary
or involuntary, and whether or not consented to by Lender of (i) all or any
portion of, or interest in, the Property or the Project, (ii) all or any
portion of the Equity Interests in Mortgagor, or (iii) all or any portion of
the Principal’s Equity Interests in Borrower.

(ii)                                  “Senior Loan Agreement: 
shall mean that certain Loan Agreement dated of even date herewith
between Senior Lender and Mortgagor.

(jj)                                  “Senior Loan Documents”: 
shall mean the Senior Note, the Security Instrument, the Senior Loan
Agreement, the Environmental Agreement (as defined in the Senior Loan
Agreement), any guaranty provided by the guarantors to the Senior Loan, financing
statements filed in connection with the Senior Loan, the Budget (as defined in
the Senior Loan Agreement), each Draw Request (as defined in the Senior Loan
Agreement, Assignment of Rents (as defined in the Senior Loan Agreement) and
all other documents and instruments to which Mortgagor or Guarantors are a
party evidencing, securing or pertaining to the loan evidenced by the Senior
Note, as they each may be amended, modified or restated with the consent of
Senior Lender.

(kk)                            “Senior Note”:  shall
mean the Promissory Note described in the Recitals to this Agreement, and all
schedules, riders, allonges and addenda, as such Promissory Note may be amended
from time to time with the consent of Senior Lender.

(ll)                                  “Title Insurer”:  shall
mean Lawyer’s Title Insurance Corporation.

(mm)                      “Third Party Agreement”: 
shall mean any agreement other than Leases and the Permitted Exceptions
that will be binding on the Project, Mortgagor or Borrower after the closing of
the Loan.

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3.           THE LOAN; DISBURSEMENT OF LOAN.

(a)                                  Loan.  On the
basis of the covenants, agreements and representations of Borrower contained
herein and subject to the terms and conditions hereinafter set forth, Lender
shall lend to Borrower and Borrower shall borrow from Lender a sum not to
exceed the Loan Amount, as it may be reduced in accordance with Section 23
herein, the proceeds of which are to be disbursed by Lender in accordance with
the provisions of Section 3(b) hereof.

(b)                                 Loan
Disbursements.  Upon satisfaction of
all the conditions set forth in Section 6 hereof (with respect to
the La Scala Parcel, as applicable), Borrower hereby directs and authorizes
Lender to disburse an initial draw in the amount of $2,360,053.98 to Borrower
to be used, as applicable, to acquire the La Scala Parcel and/or to pay for or
reimburse Borrower for payment of costs as described in Exhibit “B-1”.  Upon the purchase by Mortgagor of the Hart
Parcel, Lender shall, upon the satisfaction of all the conditions set forth in
Section 6 hereof (with respect to the Hart Parcel, as applicable), disburse a
second draw to Borrower in the amount of 30% of the acquisition costs of the
Hart Parcel to be used, as applicable, to acquire the Hart Parcel and /or to
pay for or reimburse Borrower for payment of costs as described in the Budget.  At anytime thereafter but no more than twice
monthly, Borrower may submit a Draw Request in the form of Exhibit “C”
and provided Borrower meets the conditions set forth in Section 6 and Borrower
is in compliance with the covenants set forth herein and there are no Events of
Default, then Lender shall disburse the requested amount to be used for the
payment of costs as described in the Budget, not to exceed the Loan Amount as
it may be reduced in accordance with Section 23 herein.  The Loan is not revolving.  In no event shall the aggregate amount
disbursed hereunder exceed the original principal amount of the Loan.

4.           INTEREST PAYMENTS; NO
USURY, LOAN COMMITMENT FEE; PREPAYMENT; MATURITY; REPAYMENT.

(a)                                  Interest.  Interest on the principal balance of the Loan
shall accrue and shall be payable in the amounts and at the times set forth in
the Note.  Borrower agrees to pay, on the
Maturity Date, the unpaid principal balance of the Loan, together with all
accrued but unpaid interest thereon.

(b)                                 No
Usury.  The provisions of this
Agreement, the Note, the Option Agreement and of all other agreements between
Borrower and Lender, whether now existing or hereafter arising and whether
written or oral, including, but not limited to, the Loan Documents, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
demand or acceleration of the

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maturity of this Note or otherwise, shall the amount
contracted for, charged, taken, reserved, paid, or agreed to be paid to Lender
for the use, forbearance, retention or detention of the money loaned under this
Note and related indebtedness exceed the maximum amount permissible under
applicable law.  If, from any
circumstance whatsoever, performance or fulfillment of any provision hereof or of
any agreement between Borrower and Lender shall, at the time performance or
fulfillment of such provision shall be due, exceed the limit for interest
prescribed by law or otherwise transcend the limit of validity prescribed by
applicable law, then ipso facto the obligation to be performed or fulfilled
shall be reduced to such limit; and if, from any circumstance whatsoever,
Lender shall ever receive anything of value deemed interest by applicable law
in excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the principal balance owing under
this Note in the inverse order of its maturity (whether or not then due) or at
the option of Lender be paid over to Borrower, and not to the payment of interest.  All interest (including any amounts or
payments judicially or otherwise under the law deemed to be interest)
contracted for, charged, taken, reserved, paid or agreed to be paid to Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of the Note, including any
extensions or renewals thereof, until payment in full of the Indebtedness so
that the interest thereof for such full period will not exceed at any time the
maximum amount permitted by applicable law. 
In this regard, Borrower acknowledges with Lender, as a material
inducement to Lender to enter into this Agreement and advance the Loan, that
the Option Agreement is “an option or right to purchase capital stock or other
equity securities of an obligor or of an affiliate of an obligor” as such
phrase is used in Section 306.101(b)(3) of the Texas Finance Code, and,
accordingly, that the neither execution of the Option Agreement nor exercise by
Lender of such option shall constitute or result in a charge of interest under
Texas law.  To the extent that Lender is
relying on Chapter 303, as amended, of the Texas Finance Code to determine
the maximum amount of interest permitted by applicable law on the principal of
the Loan, Lender will utilize the weekly rate ceiling from time to time in
effect as provided in such Chapter 303, as amended.  To the extent United States federal law
permits a greater amount of interest than is permitted under Texas law, Lender
will rely on United States federal law instead of such Chapter 303, as
amended, for the purpose of determining the maximum amount permitted by
applicable law.  Additionally, to the
extent permitted by applicable law now or hereafter in effect, Lender may, at
its option and from time to time, implement any other method of computing the
maximum lawful rate under such Chapter 303, as amended, or

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under other applicable law by giving notice, if
required, to Borrower as provided by applicable law now or hereafter in
effect.  This paragraph 4(b) will control
all agreements (including the Option Agreement) between Borrower and Lender.

(c)                                  Loan
Commitment Fee.  Concurrently with
the closing of the Loan, and as a condition precedent thereto, Lender shall
receive $115,500 of the Loan Commitment Fee, which shall be deemed to have been
earned in full by Lender, and is non-refundable, upon the disbursement of all
or any portion of the Loan.  Upon the
acquisition of the Hart Parcel by Mortgagor, Lender shall receive the remainder
of the Loan Commitment Fee which shall be deemed to have been earned in full by
Lender, and is non-refundable, upon the disbursement of all or any portion of
the Loan.

(d)                                 Prepayment.  All amounts due and owing under the Note from
time to time may only be prepaid in accordance with the terms of the Note.

(e)                                  Maturity
Date .  The outstanding principal
balance of the Note and all accrued and unpaid interest thereon shall become
due and payable on the Maturity Date unless the same is otherwise accelerated
in accordance with the provisions hereof or the other Loan Documents.  Subject to the provisions of Section 13(d)
hereof, in the event that the Senior Note is paid in full at any time prior to
the Maturity Date of the Loan, the Indebtedness shall then be immediately due
and payable regardless of the then stated maturity date of the Loan.

5.           SECURITY FOR LOAN;
GUARANTY.

(a)                                  Pledge
Agreement.  The Loan shall be secured
by, among other things, the Pledge Agreement.

(b)                                 Other
Loan Documents.  The Loan shall be
further secured and supported by the Environmental Indemnity and the other Loan
Documents.

(c)                                  Completion
Guaranty.  As additional security for
the Loan, the Guarantors shall execute and deliver to Lender the Completion
Guaranty.

6.           CONDITIONS PRECEDENT TO
CLOSING OF THE LOAN.  Prior to
the funding of the Loan (unless otherwise provided), all of the following
conditions shall have been satisfied and/or Borrower, Guarantors or Mortgagor,
as applicable, shall have furnished to Lender the following, all in form and
substance satisfactory to Lender in its sole and absolute discretion:

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(a)                                  Loan
Documents.  Borrower, Guarantors or Mortgagor,
as applicable, shall have provided to Lender duly executed and, where
appropriate, notarized originals of the Loan Documents, each satisfactory to
Lender in its sole and absolute discretion, including the following:

(i)                                     this
Agreement

(ii)                                  the
Note;

(iii)                               the Pledge Agreement;

(iv)                              the
Completion Guaranty;

(v)                                 the
Environmental Indemnity;

(vi)                              the
Subordination of Management Agreement;

(vii)                           UCC Financing Statements,
both state and local, as appropriate, with respect to items which are, or may
be, personal property or other collateral including the Collateral as described
in the Pledge Agreement;

(viii)                        Certification of Organizational
Documents;

(ix)                                the
Option Agreement;

(x)                                   the
Option Guaranty; and

(xi)                                such
other agreements by Borrower or Mortgagor as may be required by other
provisions of this Agreement or as Lender may reasonably require in order to
evidence or secure the Loan.

(b)                                 Third Party Agreements.

(i)                                     Copies.  Borrower shall have provided to Lender
executed copies, certified by the Borrower and Mortgagor as being true, correct
and complete, of the Senior Loan Documents, the Management Agreement and the
other Third Party Agreements then in effect, if any.

(ii)                                  Termination
of Hart Lease.  Borrower shall have
provided to Lender, with respect to the Hart Parcel, the termination of the
Hart Lease (as defined in the Senior Loan Documents).

(iii)                               Purchase Agreement.  Borrower shall have provided to Lender a copy
of the fully-executed purchase agreements for the La Scala Parcel and the Hart
Parcel, together will all documents relating

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thereto, as the same may be assigned, amended or
modified, which agreement and documents shall be satisfactory to Lender in form
and substance.

(iv)                              Intercreditor
Agreement.  Senior Lender shall have
provided to Lender an executed copy of that certain Intercreditor Agreement by
and between Senior Lender and Lender dated of even date herewith, which shall
be satisfactory to Lender in form and substance.

(v)                                 Manager’s
Subordination Agreement.  The
Borrower shall cause the Manager to enter into an agreement with the Lender
whereby the Manager:

1)     consents to the termination of the
Management Agreement without fee or penalty upon foreclosure against the
Collateral,

2)     consents to the removal and replacement of
Manager upon foreclosure against the Collateral, and

3)     if Manager is an Affiliate of Borrower or
Mortgagor, subordinates its right to receive its management fee to the payment
of amounts due Lender under the Loan Documents, subject to the prior rights of
Senior Lender.

(c)                                  Certification  Borrower shall have provided to Lender a
certification by Borrower as of the date of this Agreement (which is the date
that the commitment of Lender to make the Loan to Borrower becomes binding on
Lender) of the Budget attached hereto as Exhibit “B-1” and Exhibit “B-2”,
including certification of the purchase price of the Property, and the
reasonably estimated costs of the improvements that would be capitalized by
Mortgagor as real property for federal income tax purposes consistent with past
practices of the affiliates of Mortgagor.

(d)                                 Financial
Statements.  Borrower shall have
provided to Lender (i) with respect to the Borrower, the Project and the
Mortgagor, financial statements and other financial information, certified by
the Borrower and Mortgagor as being true, correct and complete in all material
respects, and in the form and containing the detail and supporting information
as required by Lender for the underwriting for the Loan and (ii) with respect
to Guarantors, the Estimated Collateral Value Statement, dated as of June 20,
2005 of each Guarantor.

(e)                                  Insurance
Policies.  The Borrower shall have
provided to Lender the original insurance policies, certified copies thereof or
certificates thereof, together with evidence of premium payments, for the
insurance as more fully provided in Section 8 hereof, which should

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include Builder’s Risk, Hazard and Public Liability
and Worker’s Compensation Insurance in the event such insurance is not required
by Senior Lender.

(f)                                    Contracts.  Borrower shall have provided to Lender copies
of any contracts regarding the Project entered into by Mortgagor with any
contractors or engineers and, if requested by Lender, copies of contracts with
any subcontractors for the construction or installation of the improvements
made in connection with the Project.

(g)                                 Plans.  Borrower shall have provided to Lender copies
of all available plans prepared by any engineers or architects in connection
with the Project.

(h)                                 Budget
and Cost Review.  Lender shall have
received a report of its inspecting engineer with respect to Mortgagor’s
construction budget and the available plans for the Project, which shall be
satisfactory to Lender.

(i)                                     Leases.  Borrower shall have provided to Lender (i) the
form lease for residential units within the Project and (ii) copies of any
non-residential Leases affecting the Project.

(j)                                     Title
Insurance Policy.  Lender shall have
received, reviewed and approved the commitment for title insurance with respect
to the Property and copies of all exceptions to such title insurance that have
been delivered to Senior Lender in connection with its review and approval of
the mortgage loan.

(k)                                  UCC
Policy.  Lender shall have received
the UCC Policy referred to in Section 7(b) hereof.

(l)                                     ALTA
Survey.  Lender shall have received a
current ALTA survey of the Property (the “Survey”)
completed in accordance with Senior Lender’s requirements, satisfactory to
Lender and to the Title Insurer and certified to Senior Lender, Lender (and its
successors and assigns) and the Title Insurer.

(m)                               Conditional
Use Permits and Government Approvals. 
Lender shall have received any conditional use permit(s) affecting the
Property and such evidence as Lender may require (including the written
certification of Borrower’s engineer or any other person satisfactory to
Lender) that the Project will be developed in accordance with all applicable
governmental requirements and upon completion will satisfy all applicable
governmental requirements.  Any such
certifications shall also be certified to Lender and its successors and
assigns.

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(n)                                 Flood
Plain Certification.  To the extent
not provided on the Survey, Lender shall have received evidence that the
Property is not located within any flood plain or, if the Property is located
within a flood plain, Borrower has obtained and is maintaining in full force
and effect a policy or policies of flood insurance pursuant to Section 8
hereof.  Any such certifications shall
also be certified to Lender and its successors and assigns.

(o)                                 Appraisal.  Lender shall have received an appraisal of
the Property prepared by a licensed appraiser acceptable to Lender, in form and
substance required by Senior Lender, but also addressed to Lender and its
successors and assigns, in the amount of $69,000,000.

(p)                                 Environmental
Report.  Lender shall have received an
environmental report covering the Property, prepared by a professional
acceptable to Lender, in form and substance as required by Senior Lender, and
also certified to Lender and its successors and assigns.

(q)                                 Certification
of Organizational Documents.  Lender
shall have received a written certification attaching the required documents
with respect to both Mortgagor and Borrower, confirming (i) that true,
complete and correct copies of the organizational documents have been attached
to the certification, (ii) that no modifications of such documents exist
which have not been provided to Lender, and (iii) that the provisions of
Section 22 hereof have been incorporated into the organizational documents.

(r)                                    Legal
Opinion.  Lender shall have received
a written legal opinion or legal opinions from Borrower’s counsel (which
counsel must be acceptable to Lender) in form acceptable to Lender and its
counsel, opining as to such matters as Lender may reasonably require, including
an opinion regarding:  (1) due organization
and valid existence, (2) authority; (3) enforceability of the Loan Documents,
(4) perfection of the security interests described in the Pledge Agreement and (5)
no usury.

(s)                                  UCC
Searches.  Lender shall have received
full Uniform Commercial Code searches, performed by a search company and in
jurisdictions satisfactory to Lender, with respect to the Borrower and the
Mortgagor and disclosing no matters objectionable to Lender.

(t)                                    Access
and Utility Easements.  Borrower
shall have established such easements as may be necessary to adequately assure
access and the availability of utilities to the Project.

(u)                                 Utilities.  Lender shall have received evidence that all
sewer, water, electrical, telephone and any other utility services necessary to

 13
 

obtain a certificate of occupancy for the Project are
available at the Property in adequate supply for the use and operation of the
Project and each provider of utility services has a binding obligation to
deliver the necessary services to the completed residences.  This evidence may include letters from the
applicable utility providers.

(v)                                 Environmental
Disclosure.  In accordance with all
applicable laws, including the laws of the jurisdiction of the Property,
Borrower shall provide a true, correct and complete copy of any disclosure
document or other instrument required by any such law relating to environmental
matters.

(w)                               Senior
Lender Funding.  Senior Lender shall
have disbursed to or for the account of Mortgagor the disbursement of the initial
draw under the Senior Loan for the purchase of the La Scala Parcel and, if
Borrower is requesting the second draw on the Loan, the disbursement of the
portion of the Senior Loan for the acquisition of the Hart Parcel.

(x)                                   No
Default.  The representations and
warranties of Borrower contained in this Agreement shall be true, correct and
complete in all material respects except the representation in 16(c) which need
be accurate only as of the date of this Agreement, and no Event of Default, as
defined below, or circumstance or event which upon the lapse of time, the
giving of notice or both, could become an Event of Default shall have occurred;
and

(y)                                 Additional
Matters.  Borrower shall have
delivered to Lender such other or additional documents, instruments,
information or items as the Lender may request prior to the initial
disbursement of the Loan.

7.           TITLE INSURANCE.  Concurrently with the closing of the Loan:

(a)                                  Owner’s
Policy of Title Insurance.  Borrower
shall deliver or cause to be delivered to Lender a duplicate original of
Mortgagor’s Owner’s Policy of Title Insurance (the “Policy”)
issued by the Title Insurer, meeting the following requirements:

(i)                                     with
coverage amount not less than the purchase price of the Property, if the
Property is being acquired by the Mortgagor concurrently with the closing of
the Loan;

(ii)                                  dated
as of a date not earlier than the disbursement of the Loan;

(iii)                               the Policy shall not be
subject to any exceptions other than the Senior Loan Documents and the
Permitted Exceptions;

 14
 

(iv)                              the
legal description insured under the Policy shall include any easements
benefiting the Property; and

(v)                                 if
available under local regulations, the Policy shall also contain a mezzanine
financing endorsement, acknowledging that the coverage afforded by the Policy runs
to the Lender.

(b)                                 UCC
Policy.  Borrower shall deliver or
cause to be delivered to Lender an Eagle 9 UCC Insurance Policy issued by First
American Title Insurance Company (or a similar policy), which policy shall
(i) insure Lender’s first priority security interest in all of the Equity
Interests covered by the Pledge Agreement, (ii) be dated not earlier than
the date of the disbursement of the Loan, (iii) be subject only to matters
which would customarily appear on such a policy, and (iv) be in form and
substance reasonably satisfactory to Lender (such policy, the “UCC Policy”).

8.           INSURANCE.

(a)                                  Insurance
Requirements.  Borrower, at its sole
cost (or at Mortgagor’s sole cost), for the mutual benefit of Borrower,
Mortgagor and Lender, shall cause Mortgagor or Manager to obtain and maintain
policies of insurance with respect to the Project as required by the Senior
Loan Documents, as those requirements may from time to time be amended;
provided that Lender shall be named as an additional insured under such liability
coverage.  Borrower agrees that it will cause
Mortgagor to maintain coverage under its products/completed liability insurance
for the period of the statute of repose in the state where the Project is
located, but no less than ten years after Completion.  If commercial general liability insurance as
required in the Senior Loan Documents is unavailable for residential
construction in the state where the Project is located, Owner shall or shall
cause Manager or the contractor to purchase wrap-up construction insurance
covering Mortgagor, contractor and all subcontractors for general liability and
products/completed operations for the period of the statute of repose but no
less than 10 years with limits no less than $5,000,000, naming Lender as additional
insured.

(b)                                 Insurance
Premiums; Evidence of Renewal.  All
premiums on insurance policies required under this Section 8 shall
be paid in the manner required by the Senior Loan Documents, provided, however,
that if Senior Lender waives the requirement for impound of insurance premiums,
Borrower agrees to provide evidence of payment of all insurance premiums.
Borrower shall use its best efforts to deliver originals of all policies and
renewals (or certificates evidencing the same), marked “paid” (or other
evidence satisfactory

 15
 

to Lender of the continuing coverage) to Lender at
least fifteen (15) days before the expiration of existing policies.  If Lender has not received satisfactory
evidence of such renewal or substitute insurance in the time frame herein
specified, Lender shall have the right, but not the obligation, to purchase
such insurance for Lender’s interest only.

(c)                                  Policy
Requirements.  All Policies provided
for or contemplated by Section 8.1(b) shall name Mortgagor as the
insured and, in the case of liability coverage, Borrower as the insured or
additional insured and Lender as the additional insured, in each case as their
interests may appear.  All insurance
policies and renewals of insurance policies required by this Section 8
shall (i) be in such amounts and for such periods as Senior Loan Documents
may from time to time require, (ii) be issued by insurance companies as
required by the Senior Loan Documents, (iii) provide thirty (30) days’
advance written notice to Lender before any cancellation or adverse material
modification and (iv) to the extent limits are not otherwise specified
herein, contain deductibles which are in amounts acceptable to Lender.  (Lender acknowledges that deductibles not in
excess of $250,000 per occurrence will be acceptable to it.)  All certificates of insurance and “blanket”
insurance policies shall reference the specific project being covered by name
and address.

(d)                                 Notice
of Casualty.  Borrower shall give to
Lender immediate notice of any material loss occurring on or with respect to
the Project.

(e)                                  Settlement
of Claim.  In case of loss covered by
any of such policies, Lender is authorized to adjust, collect and compromise,
in its discretion, all claims thereunder if an Event of Default has occurred
and is continuing at the time, subject to the rights of the Senior Lender.  In the event of any adjustment, collection
and compromise by Lender, Borrower covenants to sign upon demand, or Lender may
sign or endorse on Borrower’s behalf, all necessary proofs of loss, receipts,
releases and other papers required by the insurance companies to be signed by
Borrower.  Borrower hereby irrevocably
appoints Lender as its attorney-in-fact for the purposes set forth in the
preceding sentence, subject to the rights of the Senior Lender.  Subject to the rights of the Senior Lender,
Lender may deduct from such insurance proceeds any reasonable expenses incurred
by Lender in the collection and settlement thereof, including attorneys’ and
adjustors’ fees and charges.  Nothing
contained in this Agreement shall create any responsibility or obligation of
the Lender to collect any amounts owing on any insurance policy, to rebuild or
replace the damaged or destroyed portions of the Project or to perform any
other related act.  The Lender shall not,
by the fact of approving, disapproving, accepting, preventing, obtaining or
failing to obtain

 16
 

any insurance, incur any liability for or with respect
to the amount of insurance carried, the form or legal sufficiency of insurance
contracts, solvency of insurance companies, or payment or defense of lawsuits,
and the Borrower hereby expressly assumes full responsibility therefor and all
liability, if any, with respect thereto.

(f)                                    Application
of Insurance Proceeds.  Any insurance
proceeds received by Mortgagor or Borrower under any of such casualty policies
shall, subject to the rights of the Senior Lender, be applied, at the option of
the Lender, toward pre-payment or reimbursement of the Loan and any other
amounts evidenced or secured by the Loan Documents, or to the rebuilding or
repairing of the Project so damaged or destroyed, as the Lender in its sole and
unreviewable discretion may elect; provided, however, that Lender will allow
insurance proceeds to be used for restoration of the Project if the conditions
for Borrower’s use of insurance contained in the Senior Loan Documents are
satisfied (substituting Lender for Senior Lender thereunder in making related
decisions).  Lender’s election to apply
such insurance proceeds to the Loan and other amounts evidenced or secured by
the Loan Documents shall not relieve the Borrower of the duty to rebuild or
repair.

9.           EMINENT DOMAIN.

(a)                                  Notice
of Condemnation.  Borrower shall give
to Lender immediate notice of any taking by condemnation of any portion of the Project
or the institution of any proceedings the effect of which is to achieve a
taking of any portion of the Project by condemnation.

(b)                                 Settlement
of Claim.  In case the Project, or
any part or interest in any thereof, is taken by condemnation, then subject to
the rights of the Senior Lender, the Lender is hereby empowered to collect and
receive all compensation and awards of any kind whatsoever (referred to
collectively herein as “Condemnation Awards”)
which may be paid for any property taken or for damages to any property not
taken (all of which the Borrower hereby assigns to the Lender, subject to the
rights of the Senior Lender in the same). 
Borrower covenants to sign upon demand, or Lender may sign or endorse on
Borrower’s behalf, all necessary proofs of loss, receipts, releases and other
papers required by the condemning authority to be signed by Borrower for such
purpose.  Borrower hereby irrevocably
appoints Lender as its attorney-in-fact for the purposes set forth in this Section
9.  Lender may deduct from any
Condemnation Awards, any expenses reasonably incurred by Lender in the
collection and settlement thereof, including reasonable attorneys’ and
adjusters’ fees and charges.

 17
 

(c)                                  Application
of Condemnation Awards.  All
Condemnation Awards so received shall, subject to the rights of the Senior
Lender, be forthwith applied by the Lender, as it may elect in its sole and
unreviewable discretion, to the payment or reimbursement of the Loan or the
other amounts evidenced or secured by the Loan Documents, or to the repair and
restoration of any property not so taken or damaged; provided, however, that
Lender will allow Condemnation Awards to be used for restoration of the Project
if the conditions for Borrower’s use of Condemnation Awards contained in the
Senior Loan Documents are satisfied (substituting Lender for Senior Lender
thereunder in making related decisions).

(d)                                 Continuing
Obligation to Repair.  No election
made by the Lender under this Section 9 shall relieve the Borrower of
the duty to repair and restore.

(e)                                  Lender
Not Required to Act.  Nothing
contained in this Agreement shall create a responsibility or obligation of
Lender to collect any amounts owing on account of any such condemnation or
proceedings relating to the Project, to rebuild or replace any damaged or
destroyed property or to perform any other related act.

10.         RIGHTS OF ACCESS AND
INSPECTION.  Borrower shall
cause Mortgagor to permit agents, representatives and employees of Lender to
inspect the Project and the installation of the Project or any part thereof
during reasonable business hours upon reasonable advance notice.  Without limiting the foregoing, Lender shall
also be permitted access to the Project in order to examine, copy and audit
Mortgagor’s books and records (including as part of any audit performed
pursuant to Section 12(e) hereof) and any plans, drawings contracts,
books or records relating to the Project. 
Borrower shall, to the extent within its control, cause any contractors
or subcontractors to cooperate with Lender or its agents in connection with any
inspection.  Lender is under no duty to
visit or observe the Project or to examine any books or records.  Any site visit, observation or examination by
Lender shall be solely for the purpose of protecting Lender’s security and
preserving Lender’s rights under the Loan Documents.  Neither Borrower, Mortgagor nor any other
party is entitled to rely on any site visit, observation or testing by Lender
or its agents or representatives.  Lender
owes no duty of care to protect Borrower, Mortgagor or any other party against,
or to inform Borrower or any other party of, any adverse condition affecting
the Project, including any defects in the design or construction of any
improvements on the Property or the presence of any Hazardous Materials on the
Property.  So long as no Event of Default
has occurred and is continuing, Lender shall give Borrower and Mortgagor
reasonable prior notice of its intent to enter the Project.

11.         EXPENSES.  Borrower shall pay, as and when due, all reasonable
costs and expenses incurred in the procuring and making of the Loan by Lender,
including without limitation, to the extent reasonable, Title Insurer’s fees
and premiums, charges for examination of title to the Premises, expenses of
surveys, transfer taxes and recording expenses, appraisal and appraisal review
fees, fees of an inspector and fees and expenses of any attorneys, accountants,
engineers, architects, surveyors, contractors, inspectors or other consultants,

 18
 

professionals or independent contractors employed, retained or utilized
by Lender in connection with the Loan. 
Borrower shall cause Mortgagor to pay when due any and all insurance
premiums, taxes, assessments, water, sewer and other utility charges, impact
fees, liens and encumbrances on the Project and any other amounts payable for
the cost of improvements to the Property, provided that Borrower and/or
Mortgagor may in good faith contest any such liens, claims or amounts so long
as it provides, for any filed lien, a bond in accordance with statutory
requirements or other security reasonably satisfactory to Lender.  Borrower shall pay upon demand or reimburse
Lender for any and all reasonable fees, costs and expenses incurred by Lender in
collecting the Indebtedness after an Event of Default including reasonable
attorneys’ fees.  All such amounts shall
be paid to Lender or at Lender’s direction to such other person to whom
payments are due or Lender may, at its option, pay such amounts and all sums
paid shall be deemed a portion of the Indebtedness and shall bear interest at
the Default Interest Rate.

12.         FINANCIAL REPORTS,
PROPERTY REPORTS AND ANNUAL BUDGET.

The parent company
of Lender is a real estate fund that issues securities, maintains U.S. GAAP
audited financial statements and/or is publicly registered with the United
States Securities and Exchange Commission (“SEC”).  As a result, such parent company is subject
to GAAP financial statement requirements and other reporting requirements. These
requirements include but are not limited to quarterly and annual financial reporting
(including for public companies on Form 10-Q and Form 10-K and reporting under
Rule 3-14 of Regulation S-X, which requires the filing of pro forma financial
statements of acquired properties).  In
addition, certain accounting requirements may dictate that Lender report
Borrower, Mortgagor and/or the Project as a subsidiary of Lender.  Therefore, Borrower agrees to provide Lender
with all information that Borrower or its Affiliates has in their possession
and Borrower will use its best efforts to obtain such information not in its
possession as Lender reasonably requires in order to prepare, audit and/or
review financial statements of the Project, Mortgagor and Borrower for the
applicable reporting periods.

(a)                                  Borrower
agrees that all accounting for the Project will be conducted by the Borrower
and/or the Mortgagor and also by the Lender. 
Borrower agrees to provide Lender with copies of all Accounting Records (other
than leases, which Borrower and/or the Mortgagor may make available at the
Project rather than copying) on a monthly basis in order to enable Lender to
prepare and maintain financial statements on the Borrower, Mortgagor and/or the
Project in accordance with accounting principles generally accepted in the
United States of America.

(b)                                 Borrower
agrees to provide Accounting Records by the 15th of the month for the preceding
month.

(c)                                  Borrower
agrees to allow Lender and Lender’s external accountants access to original Accounting
Records if needed in the process of their quarterly reviews and various audit
processes.

 19
 

(d)                                 Borrower
agrees to cooperate with any inquiries or interviews by Lender or its external
independent accountants as may be necessary in relation to Lender’s or its Affiliates’
compliance with the Sarbanes-Oxley Act of 2002.

(e)                                  In
addition, Borrower shall furnish to Lender:

(i)                                     within
30 days after the end of each fiscal year of Mortgagor, and at any other time
upon Lender’s request, a statement that identifies all owners of any interest
in Mortgagor and the interest held by each, if Mortgagor is a corporation, all
officers and directors of Mortgagor, and if Mortgagor is a limited liability
company, all members and managers (whether members or not);

(ii)                                  within
15 days after the end of each month, a monthly property management report for
the Project, showing the number of inquiries made and rental applications
received from tenants or prospective tenants, deposits received from tenants
and any other information reasonably requested by Lender;

(iii)                               within
15 days following the end of each month, a monthly statement of income and
expense for the Project; and

(iv)                              beginning
sixty (60) days prior to the first occupancy of the Property and for each
succeeding calendar year, not later than ninety (90) days prior to the
commencement of such calendar year, an annual budget which sets forth, in
sufficient detail, Borrower’s projection of gross receipts and expenses for
such period (the “Annual Budget”).  Each Annual Budget shall be for a calendar year
except that the Annual Budgets for the year of first occupancy of the Property
shall only cover the remainder of the then-current year.

(f)                                    If
Borrower fails to provide in a timely manner the Accounting Records,
statements, schedules and reports required by this Section 12, Lender
shall have the right to have Mortgagor’s and Borrower’s books and records
audited or to perform any other procedure reasonably requested by Lender, at
Borrower’s expense, by independent certified public accountants selected by Lender
in order to obtain such statements, schedules and reports, and all related
costs and expenses of Lender shall become immediately due and payable and shall
become an additional part of the Indebtedness as provided in Section 20.

(g)                                 If
Lender acquires the Project or acquires the Collateral through foreclosure,
Borrower shall deliver, or cause to be delivered, to Lender upon written demand
all books and records relating to the

 20
 

Project or its operation. Otherwise, during the term
of the Loan, to the extent that copies of such books and records have not been
provided pursuant to the provisions of this Section 12 set forth above,
Borrower will provide Lender with all cost records necessary for Lender to
perform its accounting procedures including, but not limited to, balance
sheets, income statements, trial balance activity reports, general ledger
detail reports, cash receipts journal, check register or cash disbursements
journal and copies of checks and vendor invoices for all invoices
paid.   Borrower agrees to make available to Lender for examination
and copying any other books and records upon Lender’s written demand.

(h)                                 Borrower
authorizes Lender to obtain a credit report on Borrower, Mortgagor and
Guarantors at any time.

13.         GENERAL COVENANTS OF BORROWER.  Until the full and final payment of the Loan,
unless Lender waives compliance in writing, Borrower hereby covenants and
agrees as follows:

(a)                                  Commencement
and Completion of Project.  Borrower
shall cause Mortgagor to begin demolition of the existing improvements on the
Property and/or construction and installation of the improvements in connection
with the Project on or before the commencement date set forth in the Senior
Loan Documents and shall cause Mortgagor to prosecute such construction and installation
with diligence so that the construction and Completion (as defined in the
Completion Guaranty) of the Project (other than payment of claims that are
being contested in accordance with the Loan Documents) shall have occurred by
the completion deadline set forth in the Senior Loan Documents.

(b)                                 Lender
Approval.  No changes to the
construction budget included in the Senior Loan Documents or the Budget
attached hereto or the completion date required by the Senior Loan Documents shall
be permitted without Lender’s written consent, with the exception of (i)
completion date extensions due to force majeure and (ii) reallocation of
amounts among the line items of the budgets; provided that Borrower shall
provide Lender with notice of any changes in connection with (i) and (ii)
above.  Lender shall have the right to
approve all contractors (except GC 124 Voss Construction Limited Partnership)
and all construction contracts between Mortgagor and such contractors.  Lender shall approve the plans and specifications
for the improvements to be constructed on the Property prior to Borrower
implementing the same, and no changes to such approved plans and specifications
shall be permitted without Lender’s written consent, with the exception of (i)
changes required by governmental

 21
 

authorities or Senior Lender and (ii) other changes
that, individually, do not increase or decrease Project costs by more than
$100,000 and, in the aggregate, do not increase or decrease Project costs by
more than $300,000.  Lender shall have
ten (10) business days to provide any approval required under this Section
13(b) but if Lender does not provide written notice that it does not
approve within the ten (10) business days, then the action shall be deemed
approved.

(c)                                  Operation
and Maintenance of Project.  In
addition to the terms, conditions and provisions set forth in the other Loan
Documents:

(i)                                     Payment
of Lawful Claims.  Borrower shall pay
or discharge all lawful claims, including taxes, assessments and governmental
charges or levies imposed upon Borrower or its income or profits or upon any
property belonging to Borrower prior to the date upon which penalties attach
thereto; provided that Borrower may in good faith contest any such taxes,
assessments, charges or levies so long as it provides, for any filed lien, a
bond in accordance with statutory requirements or other security reasonably
satisfactory to Lender.  Without limiting
the generality of the foregoing, Borrower shall pay (a) all taxes and recording
expenses, including stamp taxes, if any, relating to all documents and
instruments securing the Loan, (b) the fees and commissions (if any) lawfully
due to brokers engaged by Borrower or its Affiliates in connection with this
transaction (and Borrower shall hold Lender harmless from all such claims,
whether or not lawfully due), and (c) the fees and expenses of Lender’s counsel
relating to Lender’s consultation with such counsel in connection with the
negotiation, documentation and closing of the Loan and any subsequent
modifications of the Loan.

(ii)                                  No
Amendments.  Borrower shall not, nor
shall it permit Mortgagor to, without Lender’s prior written consent, enter
into any amendments or modifications of (a) if Borrower or Mortgagor is a
corporation, the Borrower’s and Mortgagor’s by-laws and articles of
incorporation, (b) if Borrower or Mortgagor is a limited liability company,
such entity’s operating agreement or articles of organization, (c) if Borrower
or Mortgagor is a limited partnership, such entity’s partnership agreement or
partnership certificate, (d) the construction contract between Mortgagor and GC
124 Voss Construction Limited Partnership (except for change orders that,
individually, do not increase or decrease Project costs by more than $100,000
and, in the aggregate, do not increase or decrease Project costs by more than
$300,000), (e) the Management Agreement, or (f) the Senior Loan Documents.

(iii)                               Hazardous Substances.  So long as Mortgagor owns the Project,
Borrower shall cause Mortgagor to (a) keep the Project free from

 22
 

Hazardous Substances, except those in de minimis
amounts ancillary to the Project activities that are used in compliance with
all environmental laws, (b) promptly notify Lender if Borrower or Mortgagor
becomes aware that any Hazardous Substance is on or near the Project in
violation of any environmental laws or if the Project otherwise is in violation
of any environmental laws, and (c) remove such Hazardous Substances contamination
that violates any environmental laws and/or cure such violations as required by
law.

(iv)                              Maintenance
and Repair of Project.  After
completion of the Project, Borrower shall cause Mortgagor to (a) maintain
the Project, including the parking and landscaping portions thereof, in good
condition and repair, (b) promptly make all necessary structural and
non-structural repairs to the Project, (c) not demolish, alter, remove or
add to any improvements on the Property, excepting (i) the repair and
restoration of improvements following damage thereto as required by this
Agreement, and (ii) as otherwise required by any applicable law, rule or
regulations, and (d) not erect any new buildings, structures or building
additions on the Project other than in accordance with the plans for the
Project, without the prior written consent of Lender.  Borrower shall pay when due all claims for
labor performed and materials furnished therefor in connection with any
improvements or construction activities on the Property; provided that Borrower
may in good faith contest any liens, claims or amounts so long as it provides,
for any filed lien, a bond in accordance with statutory requirements or other
security reasonably satisfactory to Lender.

(d)                                 Restricted
Sale and Encumbrance of Project and of Borrower Interests; Other Indebtedness.  Neither Borrower nor Principal shall engage
in any Sale or Encumbrance without the prior written consent of Lender (which
may be withheld by Lender in Lender’s sole and absolute discretion).  Borrower will not issue any additional Equity
Interests in Borrower.  In addition,
Borrower shall not permit Mortgagor to issue any additional Equity Interests in
Mortgagor.  In addition, Borrower shall
not, nor shall it permit Mortgagor to, incur any indebtedness, whether secured
or unsecured, other than (i) the Senior Loan and this Loan, (ii) obligations
under interest rate hedging arrangements related to the Senior Loan and (iii)
trade and operational indebtedness incurred in the ordinary course of business
(including construction and operation of the Project) or for its administrative
functions.  Notwithstanding the
foregoing, Lender’s consent shall not be required for:

(i)                                     the
grant of a leasehold interest in an individual dwelling unit for a term of two
years or less not containing an option to purchase and otherwise in compliance with
Section 13(f) hereof;

 23

(ii)                                  a
Sale of obsolete, worn out or damaged property or fixtures that is contemporaneously
replaced by items of equal or better function and quality, which are free of
liens, encumbrances and security interests other than Permitted Exceptions, those
created by the Loan Documents or the Senior Loan Documents or those otherwise
consented to by Lender;

(iii)                               a Sale that results from
theft, condemnation or other involuntary conversion;

(iv)                              the
Sale (including through consumption) of personal property in the ordinary
course of business that is contemporaneously replaced by items of equal or
better function and quality;

(v)                                 the
grant of an easement if, before the grant, Lender determines (which
determination must be made reasonably) that the easement will not materially
affect the operation or value of the Project and Borrower pays to Lender, upon
demand, all reasonable costs and expenses incurred by Lender in connection with
reviewing Borrower’s request; and

(vi)                              the
creation of (1) a lien for taxes, assessments or other governmental charges or
levies that are not then due or that are being contested in good faith and in
accordance with applicable statutory procedures or (2) a mechanic’s lien
against the Project which is bonded off, released of record or otherwise
remedied to Lender’s reasonable satisfaction within 30 days of the date of
creation.

(e)                                  General
Indemnity.  Borrower shall, at
Borrower’s expense, protect, defend, indemnify, save and hold Lender and each
of its members and its respective members, stockholders, directors, officers,
employees and agents (collectively the “Indemnified Parties”)
harmless against any and all claims, demands, losses, expenses (including court
costs and reasonable attorney’s fees and expenses), damages and causes of
action (whether legal or equitable in nature) asserted by any person or entity
arising out of, caused by or relating to the Project and the Lender’s exercise
of its rights under the Loan Documents upon an Event of Default, except to the
extent the same arises out of, is caused by or results from the gross
negligence or willful misconduct of an Indemnified Party.  Borrower shall pay to Lender upon demand all
claims, judgments, damages, losses and expenses (including court costs and
reasonable attorneys’ fees and expenses) incurred by Lender as a result of any
legal or other action arising out of the aforesaid matters.  Borrower acknowledges that the Indemnified
Parties may defend any matter covered by the above indemnification by counsel
of the relevant Indemnified Party’s choice, and the costs of such defense
(including reasonable

 24
 

attorney’s fees) are part of the costs covered by the
indemnity.  The foregoing indemnification
shall survive repayment of the Loan.

(f)                                    Leases.

(i)                                     Residential
Lease Requirements.  Mortgagor shall
have the right, and Borrower may permit Mortgagor, to enter into residential
Leases without Lender’s prior written consent, so long as:  (A) all Leases for residential dwelling
units are on forms approved by Lender, and shall not include options to
purchase and (B) all Leases shall be for initial terms of at least six
months and not more than two years (with the exception of Leases for up to 3%
of the units in the Project, which may have terms of less than six months).

(ii)                                  Commercial
Lease Requirements.  Mortgagor shall
not, nor shall Borrower permit Mortgagor to, enter into any non-residential
Leases without Lender’s prior written consent in each instance.  Mortgagor shall not, nor shall Borrower permit
Mortgagor to, modify the terms of, or extend or terminate, any Lease for
non-residential use (including any Lease in existence on the date of this
Agreement) without the prior written consent of Lender.  Borrower shall, without request by Lender,
deliver a copy of each executed non-residential Lease to Lender promptly after
such Lease is signed.

(iii)                               Advance Rent.  Mortgagor shall not, nor shall Borrower permit
Mortgagor to, receive or accept rent under any Lease (whether residential or
non-residential) for more than two months in advance.

(iv)                              Performance
of Obligations.  Borrower shall cause
Mortgagor to pay, perform and discharge, as and when payment, performance and
discharge are due, all obligations of Mortgagor as landlord under all Leases.

(v)                                 Security
Interest.  Except for the assignment
to Senior Lender, Borrower shall not permit Mortgagor to further assign,
pledge, transfer or otherwise encumber the Leases or the rents under the
Leases.

(vi)                              Defense;
Pursuit of Remedies.  Borrower shall,
or shall cause Mortgagor to, at its sole cost and expense, appear in and defend
any action or proceeding arising from or connected with any of the Leases or
any obligation or liability of Mortgagor as landlord thereunder.  Borrower shall, or shall cause Mortgagor to,
use commercially reasonable efforts to pursue all remedies, including claims
for damages available at law or in equity, against any tenant under a Lease who
defaults in the performance of its obligations under the Lease.

 25
 

(g)                                 Notices.  Borrower shall promptly notify Lender in
writing of any litigation affecting (a) Borrower, Mortgagor or any Principal
and, any general partner, managing member or controlling shareholder of
Borrower, Mortgagor or Principal (excluding a Principal, general partner,
managing member or controlling shareholder which is a natural person or trust),
or (b) the Project, to the extent the same may result in a material adverse
change in (i) the financial condition of any of the foregoing parties,
(ii) Borrower’s ability to timely perform any of its obligations under any
of the Loan Documents or Mortgagor’s ability to timely perform any of its
obligations under any of the Senior Loan Documents, or (iii) the physical
condition or operation of the Project.

(h)                                 Development.  If after the date of this Agreement, Borrower
or Mortgagor intends to engage a developer of the Project, Lender shall have
the right to approve such new developer and the written development agreement
for the Project.

(i)                                     Management.  The Project shall be managed at all times by Manager
or a professional residential rental property manager satisfactory to Lender
under a contract approved by Lender. 
Lender hereby accepts the Manager as the initial property manager and
the Management Agreement as the initial management agreement. If after the date
of this Agreement, Borrower or Mortgagor intends to change the management of
the Project, Lender shall have the right to approve such new property manager
and the written contract for the management of the Project and, if the manager
is an Affiliate or Borrower, require that Borrower and such new property
manager enter into a Subordination of Management Agreement on a form reasonably
acceptable to Lender.

(j)                                     Senior
Loan.  The Borrower shall, or shall
cause Mortgagor to, fully and timely pay all amounts owing under the Senior
Loan Documents and timely and fully perform all of the Mortgagor’s covenants
and agreements contained therein. 
Borrower shall provide Lender with copies of all notices (except routine
notices which would not include any notice related to any failure to comply
with any terms of the Senior Loan Documents or regarding any event of default
under the Senior Loan Documents) given or received by Mortgagor under or
pursuant to the Senior Loan Documents, promptly upon delivery or receipt as the
case may be.  Without limiting the Lender’s
right to declare an Event of Default on account of a failure to comply with the
terms and provisions of the Senior Loan Documents, if Borrower or Mortgagor
fail to so pay or perform such obligations, and if such failure either (i) becomes
an Event of Default hereunder or (ii) prior to becoming an Event of Default
continues for twenty (20) days after Lender gives written notice to Borrower to
cure, the Lender may pay

 26
 

or perform the same pursuant to Section 18(b)
hereof.  Notwithstanding the foregoing,
(i) Lender shall have no obligation whatsoever to pay any of the amounts
evidenced or secured by, or to perform any of the covenants or obligations
imposed by, any Senior Loan Documents, and (ii) any such payment by Lender
shall not cure Mortgagor’s default hereunder or under the Senior Loan Documents
but shall only protect Lender’s interest in the Project.  Borrower shall not, nor shall it permit
Mortgagor to, amend or modify any of the Senior Loan Documents without the
prior written consent of Lender.

(k)                                  Principal
Place of Business; Choice of Law 
Borrower shall not change its principal place of business or, if
Borrower has more than one place of business, its chief executive office, from
its address set forth in the first paragraph of this Agreement.  In addition, Borrower shall not make an
election under the Uniform Commercial Code to treat, as the governing law for
perfection of uncertificated securities, the law of any jurisdiction other than
the jurisdiction of its formation.  Lender
agrees not to unreasonably withhold its consent to any change in the Borrower’s
principal place of business or the governing law with respect to uncertificated
securities so long as (1) Borrower and any other party reasonably requested by
Lender executes all documents and instruments reasonably deemed necessary by
Lender to perfect the security interests granted pursuant to the Loan
Documents, (2) the Borrower pays all of the Lender’s reasonable costs and
expenses of perfecting such security interests and (3) if requested by Lender,
Borrower delivers to Lender an opinion from counsel reasonably satisfactory to Lender
opining as to the continued perfection of such security interest.

(l)                                     Compliance
with Governmental Prohibitions.  No
portion of the Loan proceeds will be used, disbursed or distributed by Borrower
or any Principal for any purpose, or to any person, in violation of any Law (as
defined in Section 16 (h)) including, without limitation, any of the
Terrorism Laws (as defined in Section 16 (h)).  Borrower shall provide Lender with immediate
written notice (a) of any failure of any of the representations and warranties
set forth in Section 16(h) of this Agreement to be true, correct and
complete in all material respects at any time, or (b) if Borrower obtains
knowledge that Borrower, Principal, or any holder at any time of any direct or
indirect equitable, legal or beneficial interest in Borrower or Principal is
the subject of any of the Terrorism Laws. 
Borrower shall immediately and diligently take, or cause to be
immediately and diligently taken, all necessary action to comply with all
Terrorism Laws and to cause the representations and warranties set forth in Section
16(h) to be true, correct and complete in all material respects.

 27
 

14.         FURTHER ASSURANCES. 
Borrower shall, from time to time, upon Lender’s request, at Borrower’s
sole cost and expense, execute, deliver, record and furnish such documents and
do such other acts as Lender may reasonably deem necessary or desirable to (i) perfect
and maintain valid liens upon the security contemplated by the Loan Documents,
(ii) correct any errors of a typographical or other manifest nature which may
be contained in any of the Loan Documents, (iii) evidence Borrower’s compliance
with the Loan Documents, and (iv) consummate fully and carry out the intent of
the transactions contemplated under this Agreement or the Loan Documents.

15.         APPRAISALS.  Lender has the right to obtain a new
appraisal or update an existing appraisal of the Project at any time while the
Loan or any portion thereof remains outstanding (a) when, in Lender’s
reasonable judgment, such an appraisal is warranted as a result of Lender’s
internal evaluation of the Loan, and/or (b) to comply with statutes, rules,
regulations or directives of governmental agencies having jurisdiction over
Lender.  Borrower shall pay, upon demand,
all reasonable appraisers’ fees and related expenses incurred by Lender from
time to time in obtaining such appraisal reports; provided, however, that
Borrower shall not be required to pay for a re-appraisal more than once every
three years unless an Event of Default has occurred and is continuing.

16.         GENERAL REPRESENTATIONS
AND WARRANTIES OF BORROWER. 
Borrower represents and warrants to Lender, which representations and warranties
shall survive the termination of this Agreement, the repayment of the Loan, any
investigations, inspections or inquiries made by Lender or any of Lender’s
representatives, and any disbursements made by Lender hereunder, as follows:

(a)                                  Organization;
Corporate Powers; Authorization of Borrowing.

(i)                                     Organization.  Borrower’s ownership structure set forth on Exhibit ”D”
attached hereto is a true and correct depiction of the Equity Interests in
Borrower and Mortgagor, and each entity set forth on Exhibit ”D” is
duly organized and is validly existing and in good standing under the laws of
the state of its organization, and Mortgagor is qualified to do business in the
jurisdiction where the Property is located.

(ii)                                  Power
and Authority.  Borrower has the full
limited liability company power and authority to execute the Loan Documents and
to undertake and consummate the transactions contemplated hereby and thereby,
and to pay, perform and observe the conditions, covenants, agreements and
obligations herein and therein contained; and the Loan Documents have been duly
and validly executed by Borrower and constitute the legal, valid and binding
obligations of Borrower and are enforceable against Borrower in accordance with
their respective terms, except as such enforcement may be qualified or limited
by bankruptcy, insolvency or other similar laws affecting creditors’ rights
generally and general principles of equity.

 28
 

(iii)                               Not a Foreign Person.  Neither Borrower, nor any entity that is a
holder of an Equity Interest in Borrower, is organized under the laws of any
jurisdiction other than the United States or one of the states thereof.

(iv)                              No
Defaults Under Existing Agreements. 
The consummation of the transactions contemplated hereby and the performance
by Borrower of its obligations under the Loan Documents will not result in any
breach of, or constitute a default under, the Senior Loan Documents, any other
material Third Party Agreements or any mortgage, deed of trust, bank loan or
security agreement, or other material instrument to which Borrower, Mortgagor
or Principal are a party or by which the Property, the Borrower or the
Principal are bound.

(v)                                 True
and Correct Copies of Documents.  All
due diligence documents required to be delivered by Borrower to Lender
hereunder (including those due diligence documents referred to in Section 6
hereof) are true, correct and complete copies thereof and the same have not
been amended or modified except as expressly disclosed therein.

(vi)                              Ownership.  GC 123 Voss Limited Partnership, a Delaware
limited partnership (“Parent”), owns
and will own at all times during the term of the Loan one hundred percent
(100%) of the ownership interests in Principal and Parent has not transferred,
conveyed, pledged or encumbered (and will not transfer, convey, pledge or
encumber) such interests except with the prior written consent of Lender.  Parent is (and at all times during the term
of the Loan will be) treated as a partnership for federal income tax
purposes.  During the term of the Loan,
neither Parent nor Principal nor Borrower nor Mortgagor will borrow funds from
Lender or an Affiliate of Lender other than the Loan or the Junior Mezzanine
Loan.

(b)                                 Title
to Property; Matters Affecting Property.

(i)                                     Title
to Property.  Mortgagor, upon the
closing of the acquisition of the Property, will have good and marketable fee
simple title to the Property, subject only to the Senior Loan Documents and the
Permitted Exceptions, and good, marketable and freely alienable title to all
personal property located on the Property, subject only to the Senior Loan
Documents and the Permitted Exceptions; Borrower will cause Mortgagor to
protect or cause to be protected the title to the Project, and Borrower will
forever warrant and defend the same against any other claims of any persons or
parties whomsoever, subject to the Senior Loan Documents and the Permitted
Exceptions.

 29
 

(ii)                                  Mortgagor’s
Equity Interests.  Borrower owns and
will own one hundred percent (100%) of the Equity Interests in Mortgagor, and Borrower
has not transferred, conveyed, pledged or encumbered (and will not transfer,
convey, pledge or encumber) such interests except to Lender pursuant to the
Loan Documents.  Borrower has and will
have authority to encumber its Equity Interests in Mortgagor pursuant to the
terms of the Pledge Agreement.

(iii)                               Borrower’s Equity
Interests.  Principal owns and will
own one hundred percent (100%) of the ownership interests in Borrower, and
Principal has not transferred, conveyed, pledged or encumbered (and will not
transfer, convey, pledge or encumber) such interests except as expressly
permitted pursuant to the Junior Mezzanine Loan or otherwise with the prior
written consent of Lender.

(iv)                              No
Actions.  There are no actions, suits
or proceedings at law or in equity (including condemnation or eminent domain
proceedings) currently pending, or to the knowledge of Borrower threatened,
against Mortgagor, Borrower, Principal or the Project or, to the knowledge of
Borrower, involving the validity or enforceability of the Senior Loan Documents
or the Loan Documents or the priority of the liens granted thereunder, by or
before any governmental authority having or exercising jurisdiction over the
Project.  Borrower will promptly notify
Lender of any such future actions, suits or proceedings.  Except as provided in Exhibit “E”,
to Borrower’s knowledge, neither Borrower, nor Mortgagor, nor the Property is
in default with respect to, or in violation of, any order, writ, injunction,
decree or demand of any court or any governmental authority having or
exercising jurisdiction over the Property.

(v)                                 No
Contracts Giving Rise to Liens.  Neither
Borrower nor Mortgagor has made any contract or arrangement of any kind, that
does or could give rise to a lien on the Project, except for (i) the Senior
Loan Documents and the Permitted Exceptions and (ii) contracts related to
design and construction of the Project which have been provided to Lender.  Neither Borrower nor the Principal has made
any contract or arrangement of any kind that does or could give rise to a lien
or encumbrance on any of the Equity Interests in Mortgagor.

(vi)                              No
Construction.  Prior to the
disbursement of this Loan and the recordation of the Security Instrument, no
construction whatsoever has been performed on the Property by Borrower or its
Affiliates.

(vii)                           Compliance with Property
Agreements.  Except as provided in Exhibit “F”,
the Property in all respects conforms to and complies with all covenants,
conditions, restrictions, reservations, regulatory

 30
 

agreements, conditional use permits and zoning
ordinances affecting the Property whether or not recorded against the Property.

(viii)                        Leases.  Except as provided in Exhibit ”G”,
there are no Leases of the Property in effect as of the closing of the Loan.

(ix)                                Tax
Treatment.  Principal, Borrower and
Mortgagor are (and at all times during the term of the Loan will be)
disregarded as entities separate from Parent within the meaning of Treasury
Regulation §301.7701-3(b)(i)(2). 
Principal, Borrower and Mortgagor have not (and at all times during the
term of the Loan will not) elect to be classified as an association taxable as
a corporation within the meaning of Treasury Regulation §301.7701-3(c).

(x)                                   Permits.  All permits required for the operation and
construction of the Project are in effect or Borrower expects them to be
available as required for construction of the Project in accordance with the
schedule required by the Senior Loan Documents. 
Once issued, all such permits will remain in effect and the Project and
its contemplated use and operation will comply therewith.  All discretionary approvals for the
construction of the Project in accordance with the Plans and Specifications
have been obtained.

(c)                                  Financial
Statements.  The financial statements
heretofore delivered to Lender by Borrower, Mortgagor, and Principal are true
and correct in all material respects, have been prepared in accordance with
sound accounting practices, and fairly present the financial condition(s) of
the person(s) referred to therein as of the date(s) indicated; no materially
adverse change has occurred in the financial condition(s) reflected in such
financial statements since the date(s) shown thereon and no additional
borrowings or liabilities have been made or incurred by such person(s) since
the date(s) thereof other than the borrowing contemplated hereby, the Senior
Loan, the Junior Mezzanine Loan or other borrowings disclosed in writing to and
approved by Lender.  The Estimated
Collateral Value Statement, dated as of June 30, 2005, for each Guarantor
accurately lists the Available Assets of the Guarantor (as defined in the
Completion Guaranty) as of such date and the value of such Available Assets
calculated on the basis provided in the notes thereto.

(d)                                 Budget
Projections.  Borrower’s and/or
Mortgagor’s budget projections indicate that monthly income from Project
operations will be sufficient to pay the combined monthly accrual of interest
on the Senior Loan and the Loan by the Maturity Date and the projections are
reasonable in Borrower’s opinion and have been prepared in a manner consistent
with the past practices of affiliates of the Borrower.

 31
 

(e)                                  No
Loan Broker.  Borrower has not dealt
with any person, firm or corporation who is or may be entitled to any finder’s
fee, brokerage commission, loan commission or other sum in connection with the
execution of this Agreement or the making of the Loan by Lender to
Borrower.  Borrower does hereby indemnify
and agree to defend and hold Lender harmless from and against any and all loss,
liability or expense, including court costs and reasonable attorneys’ fees and
expenses, which Lender may suffer or sustain should such warranty or
representation prove inaccurate in whole or in part.

(f)                                    No
Default.  There are no defaults under
any of the Senior Loan Documents or the Loan Documents on the part of Borrower,
Mortgagor or the other parties signatory thereto, and no event has occurred and
is continuing which, with the giving of notice or the passage of time, or both,
would constitute a default under any thereof.

(g)                                 Solvency.  As of the date hereof, Borrower and Mortgagor
are each solvent and able to pay their debts as the same shall become due and
payable.

(h)                                 Violations
of Governmental Prohibitions. 
Neither the making of the Loan, nor the receipt of Loan proceeds by
Borrower, violates any federal, state, county, municipal and other governmental
and quasi-governmental statutes, laws, rules, orders, regulations, ordinances,
judgments or decrees (collectively, “Law”)
applicable to Borrower, including, without limitation, any of the Terrorism
Laws.  Neither the making of the Loan,
nor the receipt of Loan proceeds by Borrower or Mortgagor or Principal,
violates any of the Terrorism Laws applicable thereto.  To Borrower’s best knowledge, no holder of
any direct or indirect equitable, legal or beneficial interest in Borrower or
Principal is the subject of any of the Terrorism Laws.  No portion of the Loan proceeds will be used,
disbursed or distributed by Borrower for any purpose, or to any person,
directly or indirectly, in violation of any Law including, without limitation,
any of the Terrorism Laws.  “Terrorism Laws” means Executive Order 13224 issued by the
President of the United States of America, the Terrorism Sanctions Regulations
(Title 31 Part 595 of the U.S. Code of Federal Regulations), the Terrorism List
Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of
Federal Regulations), and the Foreign Terrorist Organizations Sanctions
Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), and
all other present and future federal, state and local laws, ordinances,
regulations, policies and any other requirements of any governmental agency
(including, without limitation, the United States Department of the Treasury
Office of Foreign Assets Control) addressing, relating to, or attempting to
eliminate, terrorist acts and

 32
 

acts of war, each as hereafter supplemented, amended
or modified from time to time, and the present and future rules, regulations
and guidance documents promulgated under any of the foregoing.

17.         EVENT OF DEFAULT.

Borrower shall be
in default under this Agreement upon the occurrence of any of the following
events (hereinafter referred to as an “Event of Default”):

(a)                                  Non-Payment.  The failure of Borrower to pay when due any
amount required by the Note, this Agreement or any other Loan Documents which
continues, in the case of monthly interest payments required under the Note,
for five (5) days or, in the case of other sums payable under the Note, this
Agreement or the Loan Documents, for 20 days following written demand for
payment on Borrower by Lender.

(b)                                 Insurance.  The failure of Borrower to keep in force any
insurance policy required hereunder or to deliver evidence of its renewal to
Lender and the continuation of such failure for 10 days following written
demand on Borrower by Lender.

(c)                                  Special
Purpose Entity Covenants.  The
failure of Borrower to comply with the provisions of Section 22.

(d)                                 Fraud
or Material Misrepresentation  Fraud
or material misrepresentation by Borrower, Mortgagor, or Principal or any of
their officers, directors or managers, or by any Guarantor in connection with
(i) the application for or creation of the Indebtedness, (ii) any
financial statement, rent roll, or other report or information provided to
Lender during the term of the Indebtedness, or (iii) any request for
Lender’s consent to any proposed action;

(e)                                  Sale,
Encumbrance or Other Indebtedness. 
The taking of any action by Borrower, Mortgagor, Principal or any other
person contrary to the provisions of Section 13(d) of this Agreement;

(f)                                    Reports
and Documents.  The failure of
Borrower to deliver any notice, report, assignment, certificate, instrument or
other document which Borrower is required to deliver to Lender under any of the
Loan Documents within the twenty (20) days following written demand by Lender
therefor;

(g)                                 Option
Agreement.  The failure of Borrower or
Principal to comply with the terms of the Option Agreement with respect to transfer
of the Voss Membership Interests (as defined in the Option Agreement) upon the
exercise of the Purchase Option including but not limited to

 33
 

Borrower’s or Principal’s satisfaction of all of the
Conditions to Closing and Closing Deliveries set forth therein.

(h)                                 Other
Breaches under this Agreement. The failure by Borrower to perform any of
its obligations under this Agreement, as and when required, except as
specifically set forth otherwise herein, which continues for a period of 30
days after notice of such failure by Lender to Borrower, if such failure is not
reasonably susceptible of cure within such 30 day period and if Borrower
promptly commences such cure within such 30 day period and diligently
prosecutes the same to completion, then the cure period shall be extended for such
period of time as may be reasonably necessary to effect a cure but in no event
shall such period exceed 90 days;

(i)                                     Other
Breaches Under Other Loan Documents. 
The failure of Borrower, Principal or any Guarantor, indemnitor or
obligor to perform and observe any covenant, obligation, agreement or
undertaking under any Loan Document other than this Agreement following such
notice and/or grace period, if any, as may be provided therein for curing such
failure;

(j)                                     Senior
Loan Documents.  The failure of Borrower
or Mortgagor or any Guarantor to perform and observe any covenant, obligation,
agreement or undertaking under any Senior Loan Documents following any notice
or cure period, if any, as may be provided therein for curing such failure; or

(k)                                  Bankruptcy
Proceedings.

(1)                                  If
the Borrower or Mortgagor shall become insolvent, make a transfer in fraud of,
or a general assignment for the benefit of, creditors, or admit in writing its
inability, generally to pay its debts as they become due; or

(2)                                  If
the Borrower or Mortgagor shall have a receiver, custodian, liquidator or
trustee appointed for all or substantially all of its assets or for the Project
in any proceeding brought by the Borrower, Mortgagor or the Project, or any
such receiver or trustee is appointed in any proceeding brought against the
Borrower, Mortgagor or the Project and such appointment is not promptly
contested and is not dismissed or discharged within ninety (90) days after such
appointment; or

(3)                                  If
the Borrower or Mortgagor shall file a petition under Title 11 of the United
States Code as amended or under any similar Federal or state law or statute; or

 34
 

(4)                                  If
the Borrower or Mortgagor shall have a petition filed against it commencing an
involuntary case under any present or future Federal or state bankruptcy or
similar law and such petition is not dismissed or discharged within ninety (90)
days after the filing thereof; or

(5)                                  If
the Borrower or Mortgagor shall request any composition, rearrangement,
liquidation, extension, reorganization or other relief as a debtor under any
present or future Federal or state bankruptcy or similar law now or hereafter
existing.

The proceedings or events set forth in this paragraph (j) are
collectively referred to as “Bankruptcy Proceedings”.

18.         REMEDIES.

(a)                                  Actions
upon Event of Default.  Upon the
occurrence and during the continuance of an Event of Default beyond any
applicable grace and cure period, Lender may, in addition to any other rights
or remedies available to it pursuant to this Agreement and the other Loan
Documents or at law or in equity, take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in the Collateral, including, without limitation, at its option and without
prior notice or demand, declare the unpaid principal balance of the Note and
all accrued but unpaid interest thereon, as well as all other sums owing under
the Loan Documents, immediately due and payable, Lender may make any advances on
the Loan after the happening of any one or more of said Events of Default
without thereby waiving the right to demand payment in full of the Note and
such other amounts and without liability to make any other or further advances.

(b)                                 Lender’s
Right to Perform.  If Borrower fails
to perform any covenant or obligation contained herein or in the other Loan
Documents and such failure continues for a period of 30 days after written
notice of such failure by Lender to Borrower, or if such failure is not
reasonably susceptible of cure within such 30 day period and if Borrower
promptly commences such cure within such 30 day period and diligently
prosecutes the same to completion, then the cure period shall be extended for
such period of time as may be reasonably necessary to effect a cure but in no
event shall such period exceed 90 days, without in any way limiting Lender’s
right to exercise any of its rights, powers or remedies as provided hereunder,
or under any of the other Loan Documents, Lender may, but shall have no
obligation to, perform, or cause performance of, such covenant or obligation,
and all costs, expenses, liabilities, penalties and fines of Lender reasonably
incurred or paid in connection

 35

therewith shall be payable by Borrower to Lender upon
demand and if not paid shall be added to the Indebtedness (and to the extent
permitted under applicable laws, secured by the Pledge Agreement and other Loan
Documents) and shall bear interest from the date expended at the Default
Interest Rate.  Notwithstanding the
foregoing, Lender shall have no obligation to send notice to any Borrower of
any such failure.

(c)                                  Appointment
of Lender as Attorney-in-Fact. 
Borrower hereby irrevocably, unconditionally and presently constitutes
Lender as Borrower’s attorney-in-fact, with full power of substitution, to be
exercised by Lender only upon the occurrence and during the continuation of an
Event of Default, to exercise its rights under the Pledge Agreement (in its own
name or the name of a designee) for purposes of preserving and protecting the
Project or the collateral pledged under the Pledge Agreement; and, as Lender in
its sole discretion deems necessary or proper, to execute, acknowledge (when
appropriate) and deliver all instruments and documents in the name of Borrower
which may be necessary or desirable in order to do any and every act which
Borrower might do on its own behalf in the performance of its obligations
hereunder.  This power of attorney is a
power coupled with an interest and is irrevocable.

(d)                                 Cross-Default
to Note, Pledge Agreement and Other Loan Documents.  At the option of Lender, any Event of Default
by Borrower under this Agreement shall constitute a default under the Note, the
Pledge Agreement or any of the other Loan Documents to the same extent as
though the Note had by its own terms become due and payable at maturity and
payment thereof had been refused, and in such event Lender may, without
liability to Borrower, assert and exercise any and all rights and remedies
provided for herein or in the Note, the Pledge Agreement or any of the other
Loan Documents or otherwise as may be provided by law.  Such rights and remedies may be asserted
concurrently or successively from time to time (either before or after
commencement of foreclosure proceedings or before or after the exercise of any
other remedy of Lender) until the Note, including interest thereon, and all of
the Indebtedness of Borrower to Lender under this Agreement and the other Loan
Documents, have been paid in full.

(e)                                  Recourse
Limitations.  Borrower’s liability in
connection with this Agreement, the Note and the other Loan Documents
(including Borrower’s liability for all amounts due hereunder or thereunder) is
collectible only from the Collateral against which a security interest is
created by the Pledge Agreement.  In no
case will any person who holds a direct or indirect ownership interest in
Borrower, or any officer, director, manager, trustee, employee, agent or
affiliate of

 36
 

Borrower or any such direct or indirect owner, have
any responsibility for Borrower’s obligations in connection with this
Agreement, the Note and the other Loan Documents (including Borrower’s
liability for any amounts due hereunder or thereunder); provided, however, that
nothing in this Section 18(e) limits the liability of any person under a
guaranty or other agreement executed by such person.

19.         TRANSFER OF LOAN; LOAN
SERVICER.

(a)                                  Lender’s
Right to Transfer  Borrower hereby
acknowledges that Lender shall have the right to transfer, assign or sell the
Loan Documents, or grant participation interests in all or any portion of the
Loan, in such manner and to such entities as Lender in its sole and absolute
discretion shall select.

(b)                                 Loan
Servicer.  At the option of Lender,
the Loan may be serviced by a servicer selected by Lender and Lender may
delegate all or any portion of its responsibilities under this Agreement and
the other Loan Documents to such servicer pursuant to a servicing agreement
between Lender and such servicer.  A sale
may result in a change of the Loan servicer. 
There also may be one or more changes of Loan servicer unrelated to a
sale of the Note.  If there is a change
of Loan servicer, Borrower will be given notice of the change.

(c)                                  Dissemination
of Information.  Lender may forward
to each purchaser, transferee, assignee, or servicer of, and each participant
or investor in, the Loan (collectively, the “Investor”),
any governmental regulators or others as may be required by securities law, all
documents and information which Lender now has or may hereafter acquire
relating to the Indebtedness and to Borrower, Mortgagor and Principal,
including financial statements, whether furnished by Borrower or otherwise, as
Lender determines necessary or desirable. 
Borrower irrevocably waives any and all rights it may have under
applicable Laws to prohibit such disclosure.

20.         LENDER’S EXPENSES; RIGHTS
OF LENDER.  Borrower shall
promptly pay to Lender, upon demand, with interest thereon from the date of demand
at the Default Interest Rate, reasonable attorneys’ fees and all other
reasonable costs and expenses paid or incurred by Lender in enforcing or
exercising its rights or remedies created by, connected with or provided for in
this Agreement or any of the other Loan Documents following an Event of Default,
and payment thereof shall be secured by the Pledge Agreement.

 37
 

21.         MISCELLANEOUS.

(a)                      Notices.
All notices, demands and other communications (“Notice”)
under or concerning this Agreement shall be in writing.  Each Notice shall be addressed to the
intended recipient at its address set forth below, and a Notice shall be deemed
given on the earliest to occur of (1) the date when the Notice is received by
the addressee; (2) the first Business Day after the Notice is delivered to a
recognized overnight courier service, with arrangements made for payment of
charges for next Business Day delivery; or (3) the third Business Day after the
Notice is deposited in the United States mail with postage prepaid, certified
mail, return receipt requested.

	
  If to Lender:

  	
   

  	
  Behringer Harvard Alexan Voss, LLC

  
	
   

  	
   

  	
  15601 Dallas
  Parkway, Suite 600

  
	
   

  	
   

  	
  Addison, Texas
  75001

  
	
   

  	
   

  	
  Attention: Chief
  Legal Officer

  
	
   

  	
   

  	
  Facsimile: (214)
  655-1610

  
	
   

  	
   

  	
   

  
	
  with copy to:

  	
   

  	
  Powell & Coleman, L.L.P.

  
	
   

  	
   

  	
  8080 North
  Central Expressway, Suite 1380

  
	
   

  	
   

  	
  Dallas, Texas
  75206

  
	
   

  	
   

  	
  Attention: Carol
  D. Satterfield

  
	
   

  	
   

  	
  Facsimile: (214)
  373-8768

  
	
   

  	
   

  	
   

  
	
  If to Borrower:

  	
   

  	
  GC 128 VOSS SM LLC

  
	
   

  	
   

  	
  Attention:
  Timothy J. Hogan

  
	
   

  	
   

  	
  2001 Bryan
  Street, Suite 3700

  
	
   

  	
   

  	
  Dallas, Texas
  75201

  
	
   

  	
   

  	
  Facsimile: (214)
  922-8553

  
	
   

  	
   

  	
   

  
	
  with copy to:

  	
   

  	
  Michael K. Ording

  
	
   

  	
   

  	
  Jones Day

  
	
   

  	
   

  	
  325 John H.
  McConnell Blvd., Suite 600

  
	
   

  	
   

  	
  Columbus, Ohio
  43215

  
	
   

  	
   

  	
  Facsimile: (614)
  461-4198

  

Any party to this
Agreement may change the address to which notices intended for it are to be
directed by means of notice given to the other party in accordance with this
Section 21(a).  Each party agrees that it
will not refuse or reject delivery of any notice given in accordance with this
Section 21(a), that it will acknowledge, in writing, the receipt of any notice
upon request by the other party and that any notice rejected or refused by it
shall be deemed for purposes of this Section 21(a) to have been received by the
rejecting party on the date so refused or rejected, as conclusively established
by the

 38
 

records of the U.S. Postal Service or the courier
service. Any notice under the Note and any other Loan Document which does not
specify how notices are to be given shall be given in accordance with this
Section 21(a).

(b)                                 Waivers.  No delay or omission in exercising any right
or power arising from any default shall be construed as a waiver of such
default or as acquiescence therein, nor shall any single or partial exercise
thereof preclude any further exercise thereof or the exercise of any other
right or power arising from any default. 
No waiver of any breach of any of the covenants or conditions of this
Agreement shall be construed to be a waiver of or acquiescence in or consent to
any previous or subsequent breach of the same or of any other condition or
covenant.

(c)                                  Lender
Not Partner of Borrower; Borrower in Control.  Neither the execution nor the performance of
any of the Loan Documents by Lender, nor the exercise by the Lender of any of
its rights, privileges or remedies conferred under the Loan Documents or under
applicable law, shall be deemed to render the Lender a partner or a joint
venturer with the Borrower, any guarantor of the Loan or any other person, or
to render Borrower an agent of Lender for any purposes.  Nothing contained herein shall characterize
or be deemed to characterize, or be used as a basis for characterizing, Lender
as a “mortgagee-in-possession”.  Lender
and Borrower agree that Mortgagor remains in control of the Project, and that
it determines the business plan for the Project and employment, management,
leasing and operating directions and decisions for the Project.  All of Lender’s rights, and actions taken by
Lender as provided or permitted, in or under this Agreement or the other Loan
Documents are for and in its capacity as a secured lender attempting to protect
the collateral security for the Loan and to collect the Indebtedness and any
other amounts owing or outstanding under the Note or the Loan Documents.

(d)                                 No
Third Party.  This Agreement is made
for the sole benefit of Borrower and Lender and Lender’s successors and
assigns, and no other person or persons shall have any rights or remedies under
or by reason of this Agreement or any right to the exercise of any right or
power hereunder or arising from any default, nor shall Lender owe any duty
whatsoever to any claimant for labor performed or materials furnished in
connection with the construction of the improvements to apply any undisbursed
portion of the Loan to the payment of any such claims.

(e)                                  Time
of Essence; Context.  Time is hereby
declared to be of the essence of this Agreement and of every part hereof.  When the

 39
 

context and construction so require, all words used in
the singular herein shall be deemed to have been used in the plural and the
masculine shall include the feminine and the neuter and vice versa.

(f)                                    Successors
and Assigns.  This Agreement shall
bind, and the rights granted by this Agreement shall inure to, the respective
successors and assigns of Lender and Borrower. 
However, a Sale or Encumbrance prohibited by Section 13(d) shall be an
Event of Default.

(g)                                 Governing
Jurisdiction.  This Agreement and all
of the other Loan Documents (except as otherwise expressly provided therein
with respect to the enforcement of specific remedies) shall be governed by and
construed in accordance with the substantive law of the State of Texas without
regard to the application of choice of law principles.

(h)                                 SUBMISSION
TO JURISDICTION/SERVICE OF PROCESS. 
BORROWER AND LENDER EACH HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE STATE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY, TEXAS FOR
THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED
UPON THIS AGREEMENT, THE SUBJECT MATTER HEREOF, ANY OTHER LOAN DOCUMENT AND THE
SUBJECT MATTER THEREOF, OR THE LOAN. 
EACH OF BORROWER AND LENDER TO THE EXTENT PERMITTED BY APPLICABLE LAW
(A) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN THE
ABOVE-NAMED COURTS ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE
JURISDICTION OF SUCH COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM
ATTACHMENT OR EXECUTION BY ANY SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS  AGREEMENT,
THE SUBJECT MATTER HEREOF, THE OTHER LOAN DOCUMENTS, THE SUBJECT MATTER THEREOF,
OR THE LOAN (AS APPLICABLE) MAY NOT BE ENFORCED IN OR BY SUCH COURT, (B) HEREBY
WAIVES THE RIGHT TO REMOVE ANY SUCH ACTION, SUIT OR PROCEEDING INSTITUTED IN
STATE COURT TO FEDERAL COURT, OR TO REMAND AN ACTION INSTITUTED IN FEDERAL
COURT TO STATE COURT AND (C) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH
ACTION, SUIT OR PROCEEDING

 40
 

ANY OFFSETS OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT
ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME SUBJECT MATTER.  BORROWER AND LENDER EACH HEREBY CONSENTS TO
SERVICE OF PROCESS BY MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN TO
IT PURSUANT TO SECTION 21(a) HEREOF, BUT ANY SUCH SERVICE WILL BE EFFECTIVE
ONLY WHEN RECEIVED AT SUCH ADDRESS. 
BORROWER AND LENDER EACH AGREES THAT ITS SUBMISSION TO JURISDICTION AND
CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE
OTHER PARTY.  FINAL JUDGMENT AGAINST A
PARTY IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION (X) BY SUIT, ACTION OR PROCEEDING ON THE
JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE
FACT AND OF THE AMOUNT OF INDEBTEDNESS OR LIABILITY OF THE PARTY THEREIN
DESCRIBED, OR (Y) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF
SUCH OTHER JURISDICTION.

(i)                                     WAIVER
WITH RESPECT TO DAMAGES.  BORROWER
ACKNOWLEDGES THAT LENDER DOES NOT HAVE ANY FIDUCIARY RELATIONSHIP WITH, OR
FIDUCIARY DUTY TO, BORROWER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, AND THE RELATIONSHIP BETWEEN LENDER AND BORROWER,
IN CONNECTION HEREWITH AND THEREWITH, IS SOLELY THAT OF DEBTOR AND
CREDITOR.  TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER SHALL NOT ASSERT, AND BORROWER HEREBY WAIVES, ANY
CLAIMS AGAINST LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES)
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT, ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

(j)                                     Entire
Agreement.  This Agreement and all of
the other Loan Documents constitute the entire understanding between the
parties hereto with respect to the subject matter hereof, superseding all prior
written or oral understandings, and may not be modified, amended or

 41
 

terminated except by a written agreement signed by
each of the parties hereto or thereto that is to be bound by the modification,
amendment or termination. 
Notwithstanding the foregoing, the provisions of this Agreement are not
intended to supersede the provisions of the Pledge Agreement, but shall be
construed as supplemental thereto. 
Borrower and Lender each hereby acknowledges that this Agreement and the
other Loan Documents accurately reflect the agreements and understandings of
the parties hereto with respect to the subject matter hereof and hereby waives
any claims against the other which it may now have or may hereafter acquire to
the effect that the actual agreements and understandings of the parties hereto
with respect to the subject matter hereof may not be accurately set forth in
this Agreement or such other Loan Documents.

(k)                                  Headings.  The various headings of this Agreement are
included for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provision hereof.

(l)                                     Severability.  Each provision of this Agreement shall be
interpreted so as to be effective and valid under applicable law, but if any
such provision shall in any respect be ineffective or invalid under such law,
such ineffectiveness or invalidity shall not affect the remainder of such
provision or the remaining provisions of this Agreement.

(m)                               Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute but one and the same document.

(n)                                 WAIVER
OF JURY TRIAL.  BORROWER AND LENDER
EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION
WITH THIS LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER
STATEMENTS OR ACTIONS OF THE LENDER OR BORROWER RELATED THERETO.  BORROWER AND LENDER EACH ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE OTHER TO ENTER INTO THIS AGREEMENT
AND EACH OTHER LOAN DOCUMENT, AND THAT THIS WAIVER SHALL BE EFFECTIVE AS TO
EACH OF THE OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

(o)                                 Sole
and Absolute Discretion.  Any option,
consent, approval, or discretion or similar right of Lender set forth in this
Agreement or any of the other Loan Documents may be exercised by Lender in its

 42
 

sole, absolute and unreviewable discretion, unless the
provisions of this Agreement or the other Loan Documents specifically requires
a different standard.

(p)                                 Straight
Debt Harbor.  It is the intent of
Borrower and Lender that the Loan shall be treated as a security that satisfies
the requirements of Section 856(m)(1)(A) and Section 856(m)(2) of the Code (the
“Straight Debt Safe Harbor”).  Accordingly, notwithstanding any indication
herein to the contrary, the parties hereto agree that the terms of the Loan
shall be interpreted in such a manner that the Loan satisfies the Straight Debt
Safe Harbor for so long as it is owned by Lender; and the terms of the Note
shall be applied such that the Note has a constant effective yield to maturity,
as determined under Section 1272 of the Code, at a fixed rate over the entire
term of the Note equal to the Interest Rat (as defined in the Note); provided,
however, that such contraction shall not alter the dates of the principal or interest
payments (described in Section 1.1 of the Note) or the amounts of the principal
or interest payments required to be paid on an interest payment date (described
in Section 1.1. of the Note) prior to the Maturity Date or earlier prepayment
date.

22.         SPECIAL REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BORROWER. Borrower shall do all things
necessary to preserve the existence of Borrower and Mortgagor each as a
separate Special Purpose Bankruptcy Remote Entity unless Lender otherwise
consents, in its sole discretion, in writing. 
Borrower covenants and agrees that with respect to Borrower and
Mortgagor, until payment in full of the Indebtedness, it will not do or permit
Mortgagor to do, directly or indirectly, any of the following unless Lender
consents thereto, in its sole discretion, in writing.  A “Special Purpose Bankruptcy
Remote Entity” means a corporation, limited partnership or limited
liability company which shall not:

(a)                                  engage
in any business or activity other than the ownership, construction, operation
and maintenance, in each case directly or indirectly, of the Property and the
Project (in case of Mortgagor) or the Equity Interests in Mortgagor (in case of
Borrower), and activities incidental thereto;

(b)                                 acquire
or own any material assets other than (i) the Equity Interests, (ii) the
Property and the Project, and (iii) such incidental personal property as may be
necessary for the operation of the Project or as may arise out of the other
activities of the Borrower or the Mortgagor;

(c)                                  merge
into or consolidate with any person, or dissolve, terminate or liquidate, or
transfer or otherwise dispose of all or substantially all of its assets or
change its legal structure;

 43
 

(d)                                 fail
to preserve its existence as a person duly organized, validly existing and in
good standing (if applicable) under the laws of the jurisdiction of its
organization or formation, or amend, modify, or terminate the provisions of its
organizational documents if such amendment, modification, or termination would
adversely affect the ability of such Person to perform its obligations
hereunder or under the other Loan Documents or would affect any other clause of
this Section 22;

(e)                                  own
any subsidiary (except, in the case of Borrower, the Mortgagor) or make any
investment in any person (except, in the case of Borrower, the Mortgagor);

(f)                                    commingle
its assets with the assets of any of its general partners, members,
shareholders, affiliates, principals or of any other Person in such a manner
that it will be costly or difficult segregate, ascertain or identify its
individual assets from those of any general partner, member, shareholder,
principal or Affiliate of Borrower or Mortgagor or any other Person;

(g)                                 incur
any debt, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than (i) the Senior Loan and this Loan, (ii) obligations
under interest rate hedging arrangements related to the Senior Loan and (iii)
trade and operational indebtedness incurred in the ordinary course of business
(including construction and operation of the Project) or for its administrative
functions;

(h)                                 fail
to maintain its records, books of account and bank accounts separate and apart
from those of its general partners, members, shareholders, principals and
Affiliates and any other Person;

(i)                                     enter
into any contract or agreement with any general partner, member, shareholder,
principal or Affiliate of Borrower or Mortgagor except upon terms and
conditions that are intrinsically fair and substantially similar to those that
would be available on an arms-length basis with third parties other than any
general partner, member, shareholder, principal or Affiliate of Borrower or
Mortgagor;

(j)                                     seek
the dissolution or winding up of Borrower or Mortgagor;

(k)                                  maintain
its assets in such a manner that it will be costly or difficult to segregate,
ascertain or identify its individual assets from those of any general partner,
member, shareholder, principal or Affiliate of Borrower or Mortgagor or any
other Person.

 44
 

(l)                                     hold
itself out to be responsible for the debts of another person, except through
endorsement of negotiable instruments in the ordinary course of collection;

(m)                               make
any loans or advances to any third party, including any general partner, member,
shareholder, principal or Affiliate of Borrower or Mortgagor (except, in the
case of Borrower, to the Mortgagor);

(n)                                 fail
to file its own tax returns, if any, as may be required under applicable law,
to the extent that the Borrower or Mortgagor are (1) not part of a consolidated
group filing a consolidated return or returns or (2) not treated as a “disregarded
entity” for tax purposes not required to file tax returns under applicable law;
or

(o)                                 fail
either to hold itself out to the public as a legal person separate and distinct
from any other person or to conduct its business solely in its own name if the
result is (a) to mislead others as to the identity of the person with which
such other party is transacting business; or (b) to suggest that it is
responsible for the debts of any third party (including any general partner,
principal or Affiliate of Borrower or Mortgagor, provided, however, Mortgagor
and Borrower may hold itself out at doing business under the “Trammell Crow
Residential” name.

In addition to the
foregoing, Borrower shall have at least one independent manager who is provided
by a nationally recognized company that provides professional independent
directors and who shall not be at the time of initial appointment, and may not
have been during the preceding five years (i) a stockholder, director, officer,
employee, partner, member, attorney or counsel of Mortgagor or an Affiliate of Mortgagor
or Borrower, (ii) a customer, supplier (other than a supplier of registered
agent or registered office service) or other Person who derives any of its
purchases or revenues from its activities with Mortgagor or Borrower, (iii) a Person
or other entity controlling or under common control with any such stockholder, director,
officer employee, partner, customer, supplier (other than a supplier of
registered agent or registered office service) or other Person or (iv) a member
of the immediate family of any such stockholder, director, officer, employee,
partner, customer, supplier or other Person (the “Independent
Director”).  At any time that
the Senior Loan, this Loan or the Junior Mezzanine Loan is outstanding, the
consent of the Independent Director should be required to : (i) file, consent to
the filing of, or join in any filing of, a bankruptcy or insolvency petition;
(ii) dissolve, liquidate, merge, or consolidate; (iii) engage in any other
business activity; and (iv) amend the articles of organization or limited
liability agreement.

23.           RESTRUCTURING TO ONE PHASE.  Lender and Borrower recognize that
contingencies remain to the acquisition of the Hart Parcel, including
termination of a lease of the existing building located on the Hart
Parcel.  Borrower shall cause Mortgagor
to use its best efforts to obtain the termination of the Hart Lease and to
complete the purchase of the Hart Parcel. 
If Mortgagor has not acquired the Hart Parcel by December 22, 2006,
Lender and Borrower shall restructure the Loan to provide for (i) development
of a 222-unit Project on the

 45
 

La Scala Parcel only, using the budget attached as Exhibit ”B-1”
to this Agreement, and (ii) a decrease in the Loan Amount to $3,850,000.  In the event that the Hart Parcel is not
acquired, the amount of the Senior Loan will not exceed $23,283,913.  In such case, Lender and Borrower, each
acting in good faith, shall negotiate modifications to this Agreement and the
other Loan Documents to redefine the Project, to adjust the Loan Amount and to
reflect related changes.

[Signatures Follow
on Next Page]

 46
 

IN WITNESS WHEREOF, the
parties hereto have duly executed and delivered this Agreement as of the day
and year first above written.

 

	
  

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GC 128 VOSS SM LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  GC 129 Voss JM, LLC, a Delaware limited liability

  company, its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  GC 123 Voss Limited Partnership, a Delaware

  limited partnership, its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GC 112 Development 2006 GP LLC, a

  Delaware limited liability company, its

  general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Timothy J. Hogan, Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD ALEXAN VOSS, LLC,

  
	
   

  	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Secretary

  
								

 

 47
 

JOINDER

The undersigned
have duly executed and delivered this Agreement as of the day and year first
above written for the purpose of agreeing and consenting to the provisions of Section
22 of the Agreement.

	
  

  	
  MORTGAGOR:

  
	
   

  	
   

  
	
   

  	
  GC 127 VOSS HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  GC 128 Voss SM LLC, a Delaware limited liability

  company, its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  GC 129 Voss JM LLC, a Delaware limited

  liability company, its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GC 123 Voss Limited Partnership, a

  Delaware limited partnership, its sole

  member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GC 112 Development 2006 GP

  LLC, a Delaware limited liability

  company, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Timothy J. Hogan

  Vice President

  

 

 48

EXHIBIT
A-1

THE LA SCALA PARCEL

FIELD NOTE DESCRIPTION OF 3.234 ACRES (140,890 SQUARE
FEET) OF LAND IN THE JOHN D. TAYLOR SURVEY, ABSTRACT No. 72, BEING ALL OF
UNRESTRICTED RESERVE “A”, IN THE PLAT OF “WESTHEIMER – VOSS APARTMENTS” AS
RECORDED IN VOLUME 109, PAGE 51, OF THE HARRIS COUNTY MAP RECORDS, ALL BEING
LOCATED IN THE CITY OF HOUSTON, HARRIS COUNTY, TEXAS AND BEING MORE
PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

BEGINNING at a 5/8-inch iron rod with cap set for the
intersection point of the west right-of-way line of South Voss Road (100-feet
wide) and the north right-of-way line of Burgoyne Road (60-feet wide) and being
the southeast corner of both Unrestricted Reserve “A” and the herein described
tract, from said point a found 5/8-inch iron rod bears N 03°27’
W, a distance of 0.39 feet;

THENCE, S 87°31’24”
W, along the north right-of-way line of Burgoyne Road, common with the south
line of both Unrestricted Reserve “A” and the herein described tract, a
distance of 205.00 feet to a PK nail with shiner set for a point for a curve to
the right;

THENCE, along the aforementioned curve to the right,
being the north right-of-way line of Burgoyne Road, common with the south line
of both Unrestricted Reserve “A” and the herein described tract, having a
radius of 300.00 feet, a delta of 33°33’26”,
an arc length of 175.71 feet, a chord bearing N 75°41’53”
W, and a chord distance of 173.20 feet to PK nail with shiner set for a point
for a reverse curve to the left;

THENCE, along the aforementioned reverse curve to the
left, being the north right-of-way line of Burgoyne Road, common with the south
line of both Unrestricted Reserve “A” and the herein described tract, having a
radius of 60.00 feet, a delta of 123°33’26”,
an arc length of 129.39 feet, a chord bearing S 59°18’07”
W, and a chord distance of 105.74 feet to PK nail with shiner set for the
Southwest corner of both Unrestricted Reserve “A” and the herein described
tract;

THENCE, departing the north right-of-way line of
Burgoyne Road, N 02°28’36” W, along the
west line of both Unrestricted Reserve “A” and the herein described tract, a
distance of 319.54 feet to a 5/8-inch iron rod found for the northwest corner
of both Unrestricted Reserve “A” and the herein described tract, said point

being on the south line of the plat of “Hammersmith,
Section Two” as recorded in Volume 122, Page 68, of the Harris County Map
Records;

THENCE, N 87°31’24”
E, along the south line of “Hammersmith Section Two”, common with the north
line of both Unrestricted Reserve ‘‘A” and the herein described tract, a
distance of 464.00 feet to a 5/8-inch iron rod with cap set for the northeast
corner of both Unrestricted Reserve “A” and the herein described tract, said
point also being on the west right-of-way line of South Voss Road;

THENCE, S 02°28’36”
E, along the west right-of-way line of South Voss Road, common with the east
line of both Unrestricted Reserve “A” and the herein described tract, a
distance of 319.54 feet to the POINT OF BEGINNING, and containing 3.234 acres
(140,890 square feet) of land.

EXHIBIT
A-2

THE HART
PARCEL

FIELD NOTE DESCRIPTION OF 2.609 ACRES (113,647 SQUARE
FEET) OF LAND IN THE JOHN D. TAYLOR SURVEY, ABSTRACT No. 72, AND BEING THAT
SAME TRACT OF LAND CONVEYED TO HART RESOURCE CENTER, L.P., AS RECORDED UNDER
CLERK’S FILE No. T868460 OF THE HARRIS COUNTY OFFICIAL PUBLIC RECORDS OF REAL
PROPERTY, AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

BEGINNING at a 1-inch iron pipe with cap found for the
southwest corner of the herein described tract, common with the northwest
corner of a called 1.4675 acre tract conveyed to Private Mini Storage Group 1,
Ltd., as recorded under Clerk’s File No. S323297, of the Harris County Official
Public Records of Real Property, and being on the east right-of-way line of S.
Voss Road (100-feet wide); from said corner, the northerly most point of a
cutback for the intersection of the east right-of-way of S. Voss Road and the
north right-of-way line of Westheimer Road (also known as Farm-to-Market
Highway 1093; 120-feet wide) bears S 02°28’39” E, a called distance of 1,715.91
feet;

THENCE, N 02°28’36” W, along the east right-of-way of
S. Voss Road, common with the west line of the herein described tract, a
distance of 258.00 feet to a PK Nail found in the sidewalk for the northwest
corner of the herein described tract, said point also being common with the
southwest corner of a called 0.1719 acre tract conveyed to Automated Carwash
Systems, Inc., as recorded under Clerk’s File No. K556204, of the Harris County
Official Public Records of Real Property;

THENCE, N 87°31’24” E, along the north line of the
herein described tract, common with the south line of the called 0.1719 acre
tract, a distance of 440.38 feet to a 5/8-inch iron rod found under a brick
wall slab for the northeast corner of the herein described tract, common with
the southeast corner of the aforementioned 0.1719 acre tract, and being on the
west line of Briarwest Townhouse Condominiums, as recorded in Volume 12, Page
93, of the Harris County Condominium Records;

THENCE, S 02°31’36” E, along the east line of the
herein described tract, common with the west line of the aforementioned
Briarwest Townhouse Condominiums, a distance of 258.00 feet to a 5/8-inch iron
rod with cap set for the southeast corner of the herein described tract, common
with northeast corner of the

aforementioned 1.4675 acre tract, from said point, a
found 5/8-inch iron rod bears N 87° 31’ E, a distance of 0.72 feet;

THENCE, S 87°31’24 W, along the south line of the
herein described tract, common with the north line of the aforementioned 1.4675
acre tract, a distance of 440.61 feet to the POINT OF BEGINNING, and containing
2.609 acres (113, 647 square feet) of land.

EXHIBIT
B-1

LA SCALA
DEVELOPMENT BUDGET

 

	
  CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land
  & Improvements

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  49,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land

  	
   

  	
  7,351,304

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Standard Site
  Development

  	
   

  	
  1,650,470

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  9,050,941

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real
  Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other Hard
  Costs & Contingency

  	
   

  	
  15,533,221

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Legal

  	
   

  	
  100,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Closing Costs

  	
   

  	
  185,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Fees

  	
   

  	
  200,600

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Arch &
  Engineering

  	
   

  	
  750,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  49,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  716,865

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing Fees

  	
   

  	
  352,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Costs &
  Contingency

  	
   

  	
  175,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  141,501

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  18,203,354

  	
   

  	
   

  	
   

  
	
  Total
  Capitalized to Real Property

  	
   

  	
   

  	
   

  	
  27,254,295

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Personal
  Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  49,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Appliances

  	
   

  	
  383,950

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing

  	
   

  	
  470,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  903,117

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  28,157,411

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  94,499

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dev Allowance

  	
   

  	
  1,779,286

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  524,021

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing
  Brochures

  	
   

  	
  30,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-Leasing

  	
   

  	
  200,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Op Deficits

  	
   

  	
  260,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
  2,877,806

  	
   

  	
  2,877,806

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  31,045,217

  	
   

  	
  31,045,217

  	
   

  

 

EXHIBIT
B-2

HART
DEVELOPMENT BUDGET

	
  CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land
  & Improvements

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  34,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land

  	
   

  	
  6,225,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Standard Site
  Development

  	
   

  	
  1,500,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  7,759,167

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other Hard
  Costs & Contingency

  	
   

  	
  9,940,351

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Legal

  	
   

  	
  50,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Closing Costs

  	
   

  	
  115,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Fees

  	
   

  	
  139,400

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Arch &
  Engineering

  	
   

  	
  350,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  34,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  543,002

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing Fees

  	
   

  	
  248,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Costs &
  Contingency

  	
   

  	
  50,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  101,680

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  11,571,600

  	
   

  	
   

  	
   

  
	
  Total
  Capitalized to Real Property

  	
   

  	
   

  	
   

  	
  19,330,767

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Personal
  Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  34,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Appliances

  	
   

  	
  272,550

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing

  	
   

  	
  188,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  494,717

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  19,825,483

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  62,320

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dev Allowance

  	
   

  	
  1,264,555

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  406,602

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing
  Brochures

  	
   

  	
  12,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-Leasing

  	
   

  	
  50,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Op Deficits

  	
   

  	
  148,578

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
  1,944,055

  	
   

  	
  1,944,055

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  21,769,538

  	
   

  	
  21,769,538

  	
   

  

 

EXHIBIT C

DRAW REQUEST

(BORROWER’S
LETTERHEAD)

DRAW REQUEST NO.

TO:  BEHRINGER HARVARD ALEXAN VOSS, LLC (the “Lender”)

	
  DATE

  	
   

  	
   

  
	
  PROJECT

  	
   

  	
  ALEXAN VOSS

  
	
  LOCATION

  	
   

  	
  HOUSTON, TEXAS

  
	
  BORROWER

  	
   

  	
  GC 128 VOSS SM, LLC, a Delaware limited liability
  company

  
	
   

  	
   

  	
   

  
	
  FOR

  PERIOD

  ENDING

  	
   

  	
   

  

 

In accordance with the Senior Mezzanine Loan Agreement in the amount of
$           dated           ,
among Borrower, and the Lender as defined therein, Borrower requests that $          
be advanced from Loan proceeds.  The
proceeds should be credited to the account of                     ,
Account No.           , at                     .

	
  1.

  	
   

  	
  CURRENT DRAW REQUEST FOR HARD COSTS

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  CURRENT DRAW REQUEST FOR SOFT COSTS

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  TOTAL DRAW REQUEST

  	
   

  	
  $

  

 

 

	
  

  	
  AUTHORIZED
  SIGNER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  

EXHIBIT D

VOSS
OWNERSHIP CHART

 

 

EXHIBIT E

PENDING ACTIONS AT
LAW

None.

EXHIBIT F

VIOLATIONS OF
PROPERTY AGREEMENTS

None.

EXHIBIT G

LEASES

La Scala Parcel

Please see attached Rent Roll.

Hart Parcel

Retail Center Lease, dated July 26, 1999

between Hart Resources Center LP and

Hart Galleries, Inc.

SENIOR MEZZANINE LOAN
AGREEMENT

BY

AND BETWEEN

GC 128 Voss SM LLC

(“Borrower”)

AND

BEHRINGER
HARVARD ALEXAN VOSS, LLC

(“Lender”)

TABLE
OF CONTENTS

	
  1.

  	
   

  	
  RECITALS

  	
   

  	
  2

  
	
  2.

  	
   

  	
  DEFINITIONS

  	
   

  	
  2

  
	
  3.

  	
   

  	
  THE LOAN; DISBURSEMENT OF LOAN

  	
   

  	
  7

  
	
   

  	
   

  	
  (a)

  	
  Loan

  	
   

  	
  7

  
	
   

  	
   

  	
  (b)

  	
  Loan Disbursements

  	
   

  	
  7

  
	
  4.

  	
   

  	
  INTEREST PAYMENTS; NO USURY, LOAN COMMITMENT FEE;
  PREPAYMENT; MATURITY; REPAYMENT

  	
   

  	
  7

  
	
   

  	
   

  	
  (a)

  	
  Interest

  	
   

  	
  7

  
	
   

  	
   

  	
  (b)

  	
  No Usury

  	
   

  	
  7

  
	
   

  	
   

  	
  (c)

  	
  Loan Commitment Fee

  	
   

  	
  9

  
	
   

  	
   

  	
  (d)

  	
  Prepayment

  	
   

  	
  9

  
	
   

  	
   

  	
  (e)

  	
  Maturity Date

  	
   

  	
  9

  
	
  5.

  	
   

  	
  SECURITY FOR LOAN; GUARANTY

  	
   

  	
  9

  
	
   

  	
   

  	
  (a)

  	
  Pledge Agreement

  	
   

  	
  9

  
	
   

  	
   

  	
  (b)

  	
  Other Loan Documents

  	
   

  	
  9

  
	
   

  	
   

  	
  (c)

  	
  Completion Guaranty

  	
   

  	
  9

  
	
  6.

  	
   

  	
  CONDITIONS PRECEDENT TO CLOSING OF THE LOAN

  	
   

  	
  9

  
	
   

  	
   

  	
  (a)

  	
  Loan Documents

  	
   

  	
  10

  
	
   

  	
   

  	
  (b)

  	
  Third Party Agreements

  	
   

  	
  10

  
	
   

  	
   

  	
  (c)

  	
  Certification

  	
   

  	
  11

  
	
   

  	
   

  	
  (d)

  	
  Financial Statements

  	
   

  	
  11

  
	
   

  	
   

  	
  (e)

  	
  Insurance Policies

  	
   

  	
  11

  
	
   

  	
   

  	
  (f)

  	
  Contracts

  	
   

  	
  12

  
	
   

  	
   

  	
  (g)

  	
  Plans

  	
   

  	
  12

  
	
   

  	
   

  	
  (h)

  	
  Budget and Cost Review

  	
   

  	
  12

  
	
   

  	
   

  	
  (i)

  	
  Leases

  	
   

  	
  12

  
	
   

  	
   

  	
  (j)

  	
  Title Insurance Policy

  	
   

  	
  12

  
	
   

  	
   

  	
  (k)

  	
  UCC Policy

  	
   

  	
  12

  
	
   

  	
   

  	
  (l)

  	
  ALTA Survey

  	
   

  	
  12

  
	
   

  	
   

  	
  (m)

  	
  Conditional Use Permits and Government Approvals

  	
   

  	
  12

  
	
   

  	
   

  	
  (n)

  	
  Flood Plain Certification

  	
   

  	
  13

  
	
   

  	
   

  	
  (o)

  	
  Appraisal

  	
   

  	
  13

  
	
   

  	
   

  	
  (p)

  	
  Environmental Report

  	
   

  	
  13

  
	
   

  	
   

  	
  (q)

  	
  Certification of Organizational Documents

  	
   

  	
  13

  
	
   

  	
   

  	
  (r)

  	
  Legal Opinion

  	
   

  	
  13

  
	
   

  	
   

  	
  (s)

  	
  UCC Searches

  	
   

  	
  13

  
	
   

  	
   

  	
  (t)

  	
  Access and Utility Easements

  	
   

  	
  13

  
	
   

  	
   

  	
  (u)

  	
  Utilities

  	
   

  	
  13

  
	
   

  	
   

  	
  (v)

  	
  Environmental Disclosure

  	
   

  	
  14

  
	
   

  	
   

  	
  (w)

  	
  Senior Lender Funding

  	
   

  	
  14

  
	
   

  	
   

  	
  (x)

  	
  No Default

  	
   

  	
  14

  
	
   

  	
   

  	
  (y)

  	
  Additional Matters

  	
   

  	
  14

  
	
  7.

  	
   

  	
  TITLE INSURANCE

  	
   

  	
  14

  

 

 i
 

 

	
   

  	
   

  	
  (a)

  	
  Owner’s Policy of Title Insurance

  	
   

  	
  14

  
	
   

  	
   

  	
  (b)

  	
  UCC Policy

  	
   

  	
  15

  
	
  8.

  	
   

  	
  INSURANCE

  	
   

  	
  15

  
	
   

  	
   

  	
  (a)

  	
  Insurance Requirements

  	
   

  	
  15

  
	
   

  	
   

  	
  (b)

  	
  Insurance Premiums; Evidence of Renewal

  	
   

  	
  15

  
	
   

  	
   

  	
  (c)

  	
  Policy Requirements

  	
   

  	
  16

  
	
   

  	
   

  	
  (d)

  	
  Notice of Casualty

  	
   

  	
  16

  
	
   

  	
   

  	
  (e)

  	
  Settlement of Claim

  	
   

  	
  16

  
	
   

  	
   

  	
  (f)

  	
  Application of Insurance Proceeds

  	
   

  	
  17

  
	
  9.

  	
   

  	
  EMINENT DOMAIN

  	
   

  	
  17

  
	
   

  	
   

  	
  (a)

  	
  Notice of Condemnation

  	
   

  	
  17

  
	
   

  	
   

  	
  (b)

  	
  Settlement of Claim

  	
   

  	
  17

  
	
   

  	
   

  	
  (c)

  	
  Application of Condemnation Awards

  	
   

  	
  18

  
	
   

  	
   

  	
  (d)

  	
  Continuing Obligation to Repair

  	
   

  	
  18

  
	
   

  	
   

  	
  (e)

  	
  Lender Not Required to Act

  	
   

  	
  18

  
	
  10.

  	
   

  	
  RIGHTS OF ACCESS AND INSPECTION

  	
   

  	
  18

  
	
  11.

  	
   

  	
  EXPENSES

  	
   

  	
  18

  
	
  12.

  	
   

  	
  FINANCIAL REPORTS, PROPERTY REPORTS AND ANNUAL
  BUDGET

  	
   

  	
  19

  
	
  13.

  	
   

  	
  GENERAL COVENANTS OF BORROWER

  	
   

  	
  21

  
	
   

  	
   

  	
  (a)

  	
  Commencement and Completion of Project

  	
   

  	
  21

  
	
   

  	
   

  	
  (b)

  	
  Lender Approval

  	
   

  	
  21

  
	
   

  	
   

  	
  (c)

  	
  Operation and Maintenance of Project

  	
   

  	
  22

  
	
   

  	
   

  	
  (d)

  	
  Restricted Sale and Encumbrance of Project and of
  Borrower Interests; Other Indebtedness

  	
   

  	
  23

  
	
   

  	
   

  	
  (e)

  	
  General Indemnity

  	
   

  	
  24

  
	
   

  	
   

  	
  (f)

  	
  Leases

  	
   

  	
  25

  
	
   

  	
   

  	
  (g)

  	
  Notices

  	
   

  	
  26

  
	
   

  	
   

  	
  (h)

  	
  Development

  	
   

  	
  26

  
	
   

  	
   

  	
  (i)

  	
  Management

  	
   

  	
  26

  
	
   

  	
   

  	
  (j)

  	
  Senior Loan

  	
   

  	
  26

  
	
   

  	
   

  	
  (k)

  	
  Principal Place of Business; Choice of Law

  	
   

  	
  27

  
	
   

  	
   

  	
  (l)

  	
  Compliance with Governmental Prohibitions

  	
   

  	
  27

  
	
  14.

  	
   

  	
  FURTHER ASSURANCES

  	
   

  	
  28

  
	
  15.

  	
   

  	
  APPRAISALS

  	
   

  	
  28

  
	
  16.

  	
   

  	
  GENERAL REPRESENTATIONS AND WARRANTIES OF BORROWER

  	
   

  	
  28

  
	
   

  	
   

  	
  (a)

  	
  Organization; Corporate Powers; Authorization of
  Borrowing

  	
   

  	
  28

  
	
   

  	
   

  	
  (b)

  	
  Title to Property; Matters Affecting Property

  	
   

  	
  28

  
	
   

  	
   

  	
  (c)

  	
  Financial Statements

  	
   

  	
  31

  
	
   

  	
   

  	
  (d)

  	
  Budget Projections

  	
   

  	
  31

  
	
   

  	
   

  	
  (e)

  	
  No Loan Broker

  	
   

  	
  32

  
	
   

  	
   

  	
  (f)

  	
  No Default

  	
   

  	
  32

  
	
   

  	
   

  	
  (g)

  	
  Solvency

  	
   

  	
  32

  
	
   

  	
   

  	
  (h)

  	
  Violations of Governmental Prohibitions

  	
   

  	
  32

  
	
  17.

  	
   

  	
  EVENT OF DEFAULT

  	
   

  	
  33

  
	
   

  	
   

  	
  (a)

  	
  Non-Payment

  	
   

  	
  33

  
	
   

  	
   

  	
  (b)

  	
  Insurance

  	
   

  	
  33

  

 

 ii
 

 

	
   

  	
   

  	
  (c)

  	
  Special Purpose Entity Covenants

  	
   

  	
  33

  
	
   

  	
   

  	
  (d)

  	
  Fraud or Material Misrepresentation

  	
   

  	
  33

  
	
   

  	
   

  	
  (e)

  	
  Sale, Encumbrance or Other Indebtedness

  	
   

  	
  33

  
	
   

  	
   

  	
  (f)

  	
  Reports and Documents

  	
   

  	
  33

  
	
   

  	
   

  	
  (g)

  	
  Option Agreement

  	
   

  	
  33

  
	
   

  	
   

  	
  (h)

  	
  Other Breaches under this Agreement

  	
   

  	
  34

  
	
   

  	
   

  	
  (i)

  	
  Other Breaches Under Other Loan Documents

  	
   

  	
  34

  
	
   

  	
   

  	
  (j)

  	
  Senior Loan Documents

  	
   

  	
  34

  
	
   

  	
   

  	
  (k)

  	
  Bankruptcy Proceedings

  	
   

  	
  34

  
	
  18.

  	
   

  	
  REMEDIES

  	
   

  	
  35

  
	
   

  	
   

  	
  (a)

  	
  Actions upon Event of Default

  	
   

  	
  35

  
	
   

  	
   

  	
  (b)

  	
  Lender’s Right to Perform

  	
   

  	
  35

  
	
   

  	
   

  	
  (c)

  	
  Appointment of Lender as Attorney-in-Fact

  	
   

  	
  36

  
	
   

  	
   

  	
  (d)

  	
  Cross-Default to Note, Pledge Agreement and Other
  Loan Documents

  	
   

  	
  36

  
	
   

  	
   

  	
  (e)

  	
  Recourse Limitations

  	
   

  	
  36

  
	
  19.

  	
   

  	
  TRANSFER OF LOAN; LOAN SERVICER

  	
   

  	
  37

  
	
   

  	
   

  	
  (a)

  	
  Lender’s Right to Transfer

  	
   

  	
  37

  
	
   

  	
   

  	
  (b)

  	
  Loan Servicer

  	
   

  	
  37

  
	
   

  	
   

  	
  (c)

  	
  Dissemination of Information

  	
   

  	
  37

  
	
  20.

  	
   

  	
  LENDER’S EXPENSES; RIGHTS OF LENDER

  	
   

  	
  37

  
	
  21.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  38

  
	
   

  	
   

  	
  (a)

  	
  Notices

  	
   

  	
  38

  
	
   

  	
   

  	
  (b)

  	
  Waivers

  	
   

  	
  39

  
	
   

  	
   

  	
  (c)

  	
  Lender Not Partner of Borrower; Borrower in Control

  	
   

  	
  39

  
	
   

  	
   

  	
  (d)

  	
  No Third Party

  	
   

  	
  39

  
	
   

  	
   

  	
  (e)

  	
  Time of Essence; Context

  	
   

  	
  39

  
	
   

  	
   

  	
  (f)

  	
  Successors and Assigns

  	
   

  	
  40

  
	
   

  	
   

  	
  (g)

  	
  Governing Jurisdiction

  	
   

  	
  40

  
	
   

  	
   

  	
  (h)

  	
  SUBMISSION TO JURISDICTION/SERVICE OF PROCESS

  	
   

  	
  40

  
	
   

  	
   

  	
  (i)

  	
  WAIVER WITH RESPECT TO DAMAGES

  	
   

  	
  41

  
	
   

  	
   

  	
  (j)

  	
  Entire Agreement

  	
   

  	
  41

  
	
   

  	
   

  	
  (k)

  	
  Headings

  	
   

  	
  42

  
	
   

  	
   

  	
  (l)

  	
  Severability

  	
   

  	
  42

  
	
   

  	
   

  	
  (m)

  	
  Counterparts

  	
   

  	
  42

  
	
   

  	
   

  	
  (n)

  	
  Waiver of Jury Trial

  	
   

  	
  42

  
	
   

  	
   

  	
  (o)

  	
  Sole and Absolute Discretion

  	
   

  	
  42

  
	
   

  	
   

  	
  (p)

  	
  Straight Debt Harbor

  	
   

  	
  43

  
	
  22.

  	
   

  	
  SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF
  BORROWER

  	
   

  	
  43

  
	
  23.

  	
   

  	
  RESTRUCTURING TO ONE PHASE

  	
   

  	
  45

  

 

 iiiExhibit
10.2

JUNIOR MEZZANINE LOAN AGREEMENT

This
JUNIOR MEZZANINE LOAN AGREEMENT (this “Agreement”) is
made and entered into as of this 22nd day
of September, 2006, by and between GC 129 Voss JM LLC, a Delaware limited
liability company, whose address is 2001 Bryan Street, Suite 3700, Dallas,
Texas, 75201 (“Borrower”), and Behringer Harvard Alexan
Voss, LLC, a Delaware limited liability company, whose address is 15601 Dallas
Parkway, Suite 600, Addison, Texas, 75001 (“Lender”).

R E C I T A L S:

This Agreement is
made with reference to the following facts:

A.                                   Concurrently
herewith, Bank of America, N.A., a national banking association (“Senior Lender”) is making a mortgage loan in the amount of Thirty
Nine Million Six Hundred Eleven Thousand Sixty Six Dollars ($39,611,066.00)
(the “Senior Loan”) to GC 127 Voss Holdings
LLC, a Delaware limited liability company (“Mortgagor”)
evidenced by a Promissory Note of even date herewith (the “Senior Note”).

B.                                     Mortgagor,
concurrently herewith, will be the owner of that certain land located in Houston,
Texas and more particularly described on Exhibit ”A-1”  (the “La Scala Parcel”) attached hereto and at
a later date, Mortgagor will purchase that certain land located in Houston,
Texas and more particularly described on Exhibit ”A-2”  (the “Hart Parcel”) (the La Scala Parcel initially,
and the Hart Parcel when acquired, together with all improvements, fixtures and
other appurtenances, shall be known as the “Property”)
Mortgagor will construct on the Property a 376 unit apartment project (the “Project”).  The Senior
Note is secured by a deed of trust, mortgage, or deed to secure debt, of even
date herewith (together with any and all extensions, renewals, substitutions,
replacements, amendment, modifications and/or restatements thereof (the “Security Instrument”) in favor of Senior Lender encumbering
the Project.

C.                                     Concurrently
herewith, Lender is making a senior mezzanine loan in the amount of Six Million
Eight Hundred Fifty Thousand Dollars ($6,850,000.00) (the “Senior Mezz
Loan”) to GC 128 Voss SM LLC, a Delaware limited liability company (“Senior Mezz Borrower”) evidenced by a Senior Mezzanine
Promissory Note of even date herewith (the “Senior Mezz
Note”).

D.                                    Borrower
is the legal and beneficial owner of 100% of the Equity Interests in Senior
Mezz Borrower.

 

E.                                      Borrower
has requested that Lender, as junior mezzanine lender, make a loan to Borrower (the
“Loan”) in the amount of Six Million One
Hundred Fifty Three Thousand Six Hundred Eighty Nine Dollars ($6,153,689.00)
(the “Loan Amount”), which Loan is to be
advanced as hereinafter provided and is to be evidenced by the Note.  The Note is to be secured by the Pledge and
Security Agreement and the other collateral referred to in Section 5
below.

F.                                      Borrower
desires to borrow the Loan Amount from Lender, the proceeds of which are to be
used by Borrower to, among other things, pay the costs and expenses, if any,
referred to in Section 3(b) below.

NOW, THEREFORE, in
consideration of the foregoing and the mutual promises and agreements
hereinafter contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1.                                 RECITALS.  The
recitals set forth above are true and correct and are incorporated herein by
reference.

2.                                 DEFINITIONS.  The
following terms, when used in this Agreement (including when used in the above
recitals), shall have the following meanings:

(a)                                  “Accounting Records”:  shall
mean such records used to prepare financial statements including but not
limited to:  (i) supporting documentation
for cash disbursements (including check copies and invoices); (ii) supporting
documentation for cash receipts (including deposit slips); (iii) contracts;
(iv) check registers; (v) monthly bank account reconciliations and (vi) such
other documentation in the possession of Borrower or its Affiliates or which
Borrower will use its best efforts to acquire, as Lender shall reasonably require
for the preparation of financial statements for the Project, Mortgagor, Senior
Mezz Borrower or Borrower.

(b)                                 “Affiliate”:  of any
specified person or entity shall mean any other person or entity, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified person or entity. 
For purposes of this definition, “control” shall mean the ability,
whether by the ownership of shares or other equity interests, by contract or
otherwise, to elect a majority of the directors of a corporation, to make
management decisions on behalf of, or independently to select the managing
partner of, a partnership, or otherwise to have the power independently to
remove and then select a majority of those individuals exercising managerial
authority over an entity.  Control of an
entity shall be conclusively presumed in the case of the ownership of more than
50% of the equity interests in the entity.

 2
 

 

(c)                                  “Annual Budget”:  shall
mean, for any period, the budget submitted to Lender and in effect for such
period as provided in Section 12 hereof.

(d)                                 “Bankruptcy Proceedings”: 
is defined in Section 17(j).

(e)                                  “Borrower”:  means the entity
identified as “Borrower” in the first paragraph of this Agreement, together
with its successors and assigns.

(f)                                    “Budget”:  shall mean
that construction budget attached hereto for the La Scala Parcel as Exhibit ”B-1”
and for the Hart Parcel as Exhibit ”B-2”.

(g)                                 “Business Day”:  shall mean all days other than Saturday,
Sunday or any other day on which national banks doing business in
Dallas, Texas are not open for business.

(h)                                 “Code”:  the Internal
Revenue Code of 1986, as amended from time to time, or the corresponding
provisions of any successor federal income tax law.  Any reference to a particular provision of
the Code shall include any amendment of such provision or the corresponding
provision of any successor federal income tax law.

(i)                                     “Collateral”:  is
defined in the Pledge Agreement.

(j)                                     “Completion Guaranty”:  means that certain Junior Mezzanine Completion
Guaranty of even date herewith, executed by the Guarantors, jointly and
severally, in favor of Lender.

(k)                                  “Default Interest Rate”: 
is defined in the Note.

(l)                                     “Encumbrance”:  shall
mean any pledge, encumbrance, hypothecation or other grant of security
interest, whether direct or indirect, voluntary or involuntary or by operation
of law, and whether or not consented to by Lender, of or in (i) all or any
portion of, or interest in, the Project (other than any encumbrance by the
Senior Loan Documents, the Permitted Exceptions, and the Senior Mezz Loan
Documents), or (ii) any Equity Interests in Mortgagor or Senior Mezz
Borrower, or (iii) any part of the Principal’s Equity Interests in Borrower.

(m)                               “Environmental Indemnity”: 
shall mean the Junior Mezzanine Environmental Indemnity Agreement of
even date herewith, executed by Borrower and containing representations,
warranties, covenants and indemnities in favor of Lender with respect to
Hazardous Materials.

 3
 

 

(n)                                 “Equity Interests”: 
means, with respect to any Person, shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in such Person, and
any warrants, options or other rights entitling the holder thereof to purchase
or acquire from such Person any such equity interest issued by such Person.

(o)                                 “Event of Default”: 
shall have the meaning given in Section 17 hereof.

(p)                                 “Guarantors”:  shall
mean CFP Residential, L.P., Kenneth Valach, J. Ronald Terwilliger and Brian
Austin.

(q)                                 “Hazardous Materials”: 
shall have the meaning given in the Environmental Indemnity.

(r)                                    “Indebtedness”:  shall
mean the principal of, interest on, and any other amounts due at any time
under, this Agreement, the Note, the Pledge Agreement or any other Loan
Document, including prepayment premiums, late charges, default interest, and
advances to protect the security of the Collateral.

(s)                                  
“Leases”:  shall mean all present and future leases,
subleases, licenses, concessions or other possessory interests now or hereafter
in force, whether oral or written, covering or affecting the Project, or any
portion of the Project, and all modifications, extensions or renewals.

(t)                                    “Lender”:  means the
entity identified as “Lender” in the first paragraph of this Agreement and its
successors and assigns.

(u)                                 “Loan Documents”: 
shall mean the Note, this Loan Agreement, the Pledge Agreement, the Completion
Guaranty, the Environmental Indemnity, the Subordination of Management
Agreement and all other documents executed by Borrower or Guarantors to evidence,
secure or set out the terms of the Loan, each as the same may hereafter be
amended, modified and restated from time to time.

(v)                                 “Loan Commitment Fee”: 
means the amount of One Hundred Eighty Four Thousand Six Hundred Ten and
67/100 Dollars ($184,610.67), being 3% of the Loan
Amount, of which $113,859 is payable as of the date of this Agreement and the
remainder of which is payable on the date the Mortgagor purchases the Hart
Parcel.

(w)                               “Management Agreement”: 
shall mean that certain Management Agreement dated September 22, 2006,
entered into by and between Mortgagor and Manager, pursuant to which Manager
has agreed to manage the operations of the Project, as the same may be amended

 4
 

 

from time to time
and that certain Management Agreement dated September 22, 2006, entered into by
and between Mortgagor and Manager, pursuant to which Manager has agreed to
manage the demolition of the existing improvements on the La Scala Parcel as
the same may be amended from time to time, or any other management agreement
approved by Lender pursuant to Section 13(h) hereof.

(x)                                   “Manager”:  shall mean Riverstone
Residential SC, LP or any other property management company approved by Lender
pursuant to Section 13(h) hereof.

(y)                                 “Maturity Date” shall have the meaning given in the Note.

(z)                                   “Note”:  shall mean
that certain Junior Mezzanine Promissory Note, dated of even date herewith, in
the Loan Amount, made payable by Borrower to the order of Lender, evidencing
all amounts outstanding under the Loan from time to time, as the same may be
amended from time to time.

(aa)                            “Option Agreement”: 
shall mean that certain Option Agreement dated of even date herewith, among
Lender and Borrower, giving Lender the option to purchase the Equity Interests
in Mortgagor and Senior Mezz Borrower on the terms and conditions set forth
therein.

(bb)                          “Option Guaranty”: 
shall mean that certain Limited Guaranty dated of even date herewith,
executed by Guarantors for the benefit of Borrower guaranteeing certain
obligations in connection with the Option Agreement.

(cc)                            “Permitted Exceptions”: 
shall mean (1) the title exceptions included in the Policy required to
be delivered to Lender pursuant to Section 7(a) hereof, as the same may
be endorsed from time to time with the consent of the Lender, (2) liens and
security interests securing the Loan, the Senior Mezz Loan or the Senior Loan,
(3) liens for taxes, assessments or other governmental charges or levies that
are not then due or that are being contested in good faith and in accordance
with applicable statutory procedures, (4) mechanic’s liens against the Project
which are bonded off, released of record or otherwise remedied to Lender’s
reasonable satisfaction within 30 days of the date of creation, (5) Leases
entered into on terms allowed by this Agreement and (6) other matters approved in
writing by Lender.

(dd)                          “Person”:  shall mean
any individual, corporation, partnership, limited liability company, joint
venture, estate, trust, or unincorporated association, any other entity, any
federal, state,

 5
 

 

county or
municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of the foregoing.

(ee)                            “Pledge Agreement”: 
shall mean that certain Junior Mezzanine Pledge and Security Agreement,
dated of even date herewith, from Borrower to Lender, as the same may be
amended, modified and restated from time to time, pursuant to which Borrower
has pledged all of the Equity Interests in the Senior Mezz Borrower.

(ff)                                “Principal”:  shall
mean GC 123 Voss Limited Partnership, a Delaware limited partnership, the sole
member of Borrower and the holder of all Equity Interests in Borrower and any
person or entity who becomes the owner of any Equity Interest in Borrower after
the date of this Agreement and is identified as such in an amendment or
supplement to this Agreement.

(gg)                          “Sale”:  shall mean any
sale, assignment, transfer, conveyance or other disposition, whether voluntary
or involuntary, and whether or not consented to by Lender of (i) all or any
portion of, or interest in, the Property or the Project, (ii) all or any
portion of the Equity Interests in Mortgagor or Senior Mezz Borrower, or (iii)
all or any portion of the Principal’s Equity Interests in Borrower.

(hh)                          “Senior Loan Agreement: 
shall mean that certain Loan Agreement dated of even date herewith
between Senior Lender and Mortgagor.

(ii)                                  “Senior Loan Documents”: 
shall mean the Senior Note, the Security Instrument, the Senior Loan
Agreement, the Environmental Agreement (as defined in the Senior Loan
Agreement), any guaranty provided by the guarantors to the Senior Loan,
financing statements filed in connection with the Senior Loan, the Budget (as
defined in the Senior Loan Agreement), each Draw Request (as defined in the
Senior Loan Agreement, Assignment of Rents (as defined in the Senior Loan
Agreement) and all other documents and instruments to which Mortgagor or
Guarantors are a party evidencing, securing or pertaining to the loan evidenced
by the Senior Note, as they each may be amended, modified or restated with the
consent of Senior Lender.

(jj)                                  “Senior Mezz Borrower”: 
means the entity identified as “Senior Mezz Borrower” in the Recitals to
this Agreement, together with its successors and assigns.

(kk)                            “Senior Mezz Loan”: shall mean that certain Senior Mezzanine
Loan dated of even date herewith made to Senior Mezz Borrower, as borrower, by
Lender, as senior mezzanine lender.

 6
 

 

(ll)                                  “Senior Mezz Loan Agreement”: 
shall mean that certain Senior Mezzanine Loan Agreement between Lender
and Senior Mezz Borrower dated of even date herewith.

(mm)                      “Senior Mezz Loan Documents”:  shall mean the Senior Mezz Note, the Senior
Mezzanine Loan Agreement, the Senior Mezzanine Pledge and Security Agreement
(as defined in the Senior Mezz Loan Agreement), the Senior Mezzanine Completion
Guaranty (as defined in the Senior Mezz Loan Agreement), the Senior Mezzanine
Environmental Indemnity (as defined in the Senior Mezz Loan Agreement), the
Senior Mezzanine Manager’s Subordination Agreement(as defined in the Senior
Mezz Loan Agreement) and all other documents executed by Senior Mezz Borrower
or Guarantors to evidence, secure or set out the terms of the Senior Mezz Loan,
each as the same may hereafter be amended, modified and restated from time to
time.

(nn)                          “Senior Mezz Note”: 
shall mean the Senior Mezzanine Promissory Note described in the
Recitals to this Agreement, and all schedules, riders, allonges and addenda, as
such Senior Mezzanine Promissory Note may be amended from time to time with the
consent of Lender.

(oo)                          “Senior Note”:  shall
mean the Promissory Note described in the Recitals to this Agreement, and all
schedules, riders, allonges and addenda, as such Promissory Note may be amended
from time to time with the consent of Senior Lender.

(pp)                          “Title Insurer”:  shall
mean Lawyer’s Title Insurance Corporation.

(qq)                          “Third Party Agreement”: 
shall mean any agreement other than Leases and the Permitted Exceptions
that will be binding on the Project, Mortgagor, Senior Mezz Borrower or Borrower
after the closing of the Loan.

3.                                 THE LOAN; DISBURSEMENT OF LOAN.

(a)                                  Loan.  On the
basis of the covenants, agreements and representations of Borrower contained
herein and subject to the terms and conditions hereinafter set forth, Lender
shall lend to Borrower and Borrower shall borrow from Lender a sum not to
exceed the Loan Amount as it may be reduced in accordance with Section 23
herein, the proceeds of which are to be disbursed by Lender in accordance with
the provisions of Section 3(b) hereof.

(b)                                 Loan
Disbursements.  Upon satisfaction of
all the conditions set forth in Section 6 hereof  (with respect to the La Scala Parcel and the
Hart Parcel, as applicable) and after all of the funds under the Senior Mezz
Loan have been drawn subject to any reduction in the Senior

 7
 

 

Mezz Loan amount
pursuant to Section 23 of the Senior Mezzanine Loan Agreement, Borrower may
submit a Draw Request in the form of Exhibit “C” and provided
Borrower meets the conditions set forth in Section 6 and Borrower is in
compliance with the covenants set forth herein and there are no Events of
Default, then Lender shall disburse the requested amount to be used for the
payment of costs as described in Exhibit “B-1” and, only if the
Hart Parcel is acquired, in Exhibit “B-2”, not to exceed the Loan
Amount as it may be reduced subject to Section 23 herein.  The Loan is not revolving.  In no event shall the aggregate amount
disbursed hereunder exceed the original principal amount of the Loan.

4.                                 INTEREST PAYMENTS; NO USURY, LOAN COMMITMENT FEE; PREPAYMENT; MATURITY;
REPAYMENT.

(a)                                  Interest.  Interest on the principal balance of the Loan
shall accrue and shall be payable in the amounts and at the times set forth in
the Note.  Borrower agrees to pay, on the
Maturity Date, the unpaid principal balance of the Loan, together with all
accrued but unpaid interest thereon.

(b)                                 No
Usury.  The provisions of this
Agreement, the Note, the Option Agreement and of all other agreements between
Borrower and Lender, whether now existing or hereafter arising and whether
written or oral, including, but not limited to, the Loan Documents, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of demand or acceleration of the maturity of this Note or otherwise,
shall the amount contracted for, charged, taken, reserved, paid, or agreed to
be paid to Lender for the use, forbearance, retention or detention of the money
loaned under this Note and related indebtedness exceed the maximum amount
permissible under applicable law.  If,
from any circumstance whatsoever, performance or fulfillment of any provision
hereof or of any agreement between Borrower and Lender shall, at the time
performance or fulfillment of such provision shall be due, exceed the limit for
interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then ipso facto the obligation to be performed or
fulfilled shall be reduced to such limit; and if, from any circumstance
whatsoever, Lender shall ever receive anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the principal balance owing under
this Note in the inverse order of its maturity (whether or not then due) or at
the option of Lender be paid over to Borrower, and not to the payment of
interest.  All interest (including any
amounts or payments judicially or otherwise under the law deemed to be
interest) contracted for, charged, taken, reserved, paid or agreed to 

 8
 

 

be paid to Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of the Note, including any
extensions or renewals thereof, until payment in full of the Indebtedness so
that the interest thereof for such full period will not exceed at any time the
maximum amount permitted by applicable law. 
In this regard, Borrower acknowledges with Lender, as a material
inducement to Lender to enter into this Agreement and advance the Loan, that
the Option Agreement is “an option or right to purchase capital stock or other
equity securities of an obligor or of an affiliate of an obligor” as such
phrase is used in Section 306.101(b)(3) of the Texas Finance Code, and, accordingly,
that neither execution of the Option Agreement nor exercise by Lender of such
option shall constitute or result in a charge of interest under Texas law.  To the extent that Lender is relying on
Chapter 303, as amended, of the Texas Finance Code to determine the maximum
amount of interest permitted by applicable law on the principal of the Loan,
Lender will utilize the weekly rate ceiling from time to time in effect as
provided in such Chapter 303, as amended. 
To the extent United States federal law permits a greater amount of
interest than is permitted under Texas law, Lender will rely on United States
federal law instead of such Chapter 303, as amended, for the purpose of
determining the maximum amount permitted by applicable law.  Additionally, to the extent permitted by
applicable law now or hereafter in effect, Lender may, at its option and from
time to time, implement any other method of computing the maximum lawful rate
under such Chapter 303, as amended, or under other applicable law by
giving notice, if required, to Borrower as provided by applicable law now or
hereafter in effect.  This paragraph 4(b)
will control all agreements (including the Option Agreement) between Borrower
and Lender.

(c)                                  Loan
Commitment Fee.  Concurrently with
the closing of the Loan, and as a condition precedent thereto, Lender shall
receive $113,859, which shall be deemed to have been earned in full by Lender,
and is non-refundable, upon the disbursement of all or any portion of the Loan.  Upon the acquisition of the Hart Parcel by
Mortgagor, Lender shall receive the remainder of the Loan Commitment Fee.

(d)                                 Prepayment.  All amounts due and owing under the Note from
time to time may only be prepaid in accordance with the terms of the Note.

(e)                                  Maturity
Date .  The outstanding principal
balance of the Note and all accrued and unpaid interest thereon shall become
due and payable on the Maturity Date unless the same is otherwise accelerated
in accordance with the provisions hereof or the other Loan Documents.  Subject to the provisions of Section 13(d)
hereof, in the event that

 9
 

 

the Senior Note and
the Senior Mezz Note are paid in full at any time prior to the Maturity Date of
the Loan, the Indebtedness shall then be immediately due and payable regardless
of the then stated maturity date of the Loan.

5.                                 SECURITY FOR LOAN; GUARANTY.

(a)                                  Pledge
Agreement.  The Loan shall be secured
by, among other things, the Pledge Agreement.

(b)                                 Other
Loan Documents.  The Loan shall be
further secured and supported by the Environmental Indemnity and the other Loan
Documents.

(c)                                  Completion
Guaranty.  As additional security for
the Loan, the Guarantors shall execute and deliver to Lender the Completion
Guaranty.

6.                                 CONDITIONS PRECEDENT TO CLOSING OF THE LOAN.  Prior to the funding of the Loan (unless
otherwise provided), all of the following conditions shall have been satisfied
and/or Borrower, Guarantors, Senior Mezz Borrower or Mortgagor, as applicable,
shall have furnished to Lender the following, all in form and substance
satisfactory to Lender in its sole and absolute discretion:

(a)                                  Loan
Documents.  Borrower, Guarantors,
Senior Mezz Borrower or Mortgagor, as applicable, shall have provided to Lender
duly executed and, where appropriate, notarized originals of the Loan
Documents, each satisfactory to Lender in its sole and absolute discretion,
including the following:

(i)                                     this
Agreement

(ii)                                  the
Note;

(iii)                               the
Pledge Agreement;

(iv)                              the
Completion Guaranty;

(v)                                 the
Environmental Indemnity;

(vi)                              the
Junior Mezzanine Manager’s Subordination Agreement;

(vii)                           UCC
Financing Statements, both state and local, as appropriate, with respect to
items which are, or may be, personal property or other collateral including the
Collateral as described in the Pledge Agreement;

(viii)                        Certification
of Organizational Documents;

 10
 

 

(ix)                                the
Option Agreement;

(x)                                   the
Option Guaranty; and

(xi)                                such
other agreements by Borrower, Senior Mezz Borrower or Mortgagor as may be
required by other provisions of this Agreement or as Lender may reasonably
require in order to evidence or secure the Loan.

(b)                                 Third Party Agreements:

(i)                                     Copies.  Borrower shall have provided to Lender
executed copies, certified by Borrower, Senior Mezz Borrower and Mortgagor as
being true, correct and complete, of the Senior Loan Documents, the Senior Mezz
Loan Documents, the Management Agreement and the other Third Party Agreements
then in effect, if any;

(ii)                                  Termination
of the Hart Lease.  Borrower shall
have provided to Lender, with respect to the Hart Parcel, the termination of
the Hart Lease (as defined in the Senior Loan Documents).

(iii)                               Purchase
Agreement.  Borrower shall have
provided to Lender a copy of the fully-executed purchase agreements for the La
Scala Parcel and the Hart Parcel, together with all documents relating thereto,
as the same may be assigned, amended or modified, which agreement and documents
shall be satisfactory to Lender in form and substance.

(iv)                              Intercreditor
Agreement.  Senior Lender shall have
provided to Lender an executed copy of that certain Intercreditor Agreement by
and between Senior Lender and Lender dated of even date herewith, which shall
be satisfactory to Lender in form and substance.

(v)                                 Junior
Mezzanine Manager’s Subordination Agreement.  Borrower shall cause the Manager to enter
into an agreement with the Lender whereby the Manager:

1)              consents
to the termination of the Management Agreement without fee or penalty upon foreclosure
against the Collateral,

2)              consents
to the removal and replacement of Manager upon foreclosure against the
Collateral, and

3)              if
Manager is an Affiliate of Borrower, Senior Mezz Borrower or Mortgagor,
subordinates its right to receive its management fee to the payment of amounts
due Lender under the Loan Documents, subject to the prior rights of Senior
Lender and the holder of the Senior Mezz Loan.

 11
 

 

(c)                                  Certification  Borrower shall have provided to Lender a
certification by Borrower as of the date of this Agreement (which is the date
that the commitment of Lender to make the Loan to Borrower becomes binding on
Lender) of the Budget attached hereto as Exhibit “B-1” and Exhibit “B-2”,
including certification of the purchase price of the Property, and the
reasonably estimated costs of the improvements that would be capitalized by
Mortgagor as real property for federal income tax purposes consistent with past
practices of the affiliates of Mortgagor.

(d)                                 Financial
Statements.  Borrower shall have
provided to Lender (i) with respect to Borrower, Senior Mezz Borrower, the Project
and Mortgagor, financial statements and other financial information, certified
by Borrower, Senior Mezz Borrower and Mortgagor as being true, correct and
complete in all material respects, and in the form and containing the detail
and supporting information as required by Lender for the underwriting for the
Loan and (ii) with respect to the Guarantors, the Estimated Collateral Value
Statement dated as of June 20, 2005 of each Guarantor.

(e)                                  Insurance
Policies.  Borrower shall have
provided to Lender the original insurance policies, certified copies thereof or
certificates thereof, together with evidence of premium payments, for the
insurance as more fully provided in Section 8 hereof, which should
include Builder’s Risk, Hazard and Public Liability and Worker’s Compensation
Insurance in the event such insurance is not required by Senior Lender.

(f)                                    Contracts.
 Borrower shall have provided to Lender
copies of any contracts regarding the Project entered into by Mortgagor with
any contractors or engineers and, if requested by Lender, copies of contracts
with any subcontractors for the construction or installation of the
improvements made in connection with the Project.

(g)                                 Plans.  Borrower shall have provided to Lender copies
of all available plans prepared by any engineers or architects in connection
with the Project.

(h)                                 Budget
and Cost Review.  Lender shall have
received a report of its inspecting engineer with respect to Mortgagor’s
construction budget and the available plans for the Project, which shall be
satisfactory to Lender.

(i)                                     Leases.  Borrower shall have provided to Lender (i) the
form lease for residential units within the Project and (ii) copies of any
non-residential Leases affecting the Project.

 12

(j)                                     Title
Insurance Policy.  Lender shall have
received, reviewed and approved the commitment for title insurance with respect
to the Property and copies of all exceptions to such title insurance that have
been delivered to Senior Lender in connection with its review and approval of
the mortgage loan.

(k)                                  UCC
Policy.  Lender shall have received
the UCC Policy referred to in Section 7(b) hereof.

(l)                                     ALTA
Survey.  Lender shall have received a
current ALTA survey of the Property (the “Survey”)
completed in accordance with Senior Lender’s requirements, satisfactory to
Lender and to the Title Insurer and certified to Senior Lender, Lender (and its
successors and assigns) and the Title Insurer.

(m)                               Conditional
Use Permits and Government Approvals. 
Lender shall have received any conditional use permit(s) affecting the
Property and such evidence as Lender may require (including the written
certification of Borrower’s engineer or any other person satisfactory to
Lender) that the Project will be developed in accordance with all applicable
governmental requirements and upon completion will satisfy all applicable
governmental requirements.  Any such
certifications shall also be certified to Lender and its successors and
assigns.

(n)                                 Flood
Plain Certification.  To the extent
not provided on the Survey, Lender shall have received evidence that the
Property is not located within any flood plain or, if the Property is located
within a flood plain, Borrower has obtained and is maintaining in full force
and effect a policy or policies of flood insurance pursuant to Section 8
hereof.  Any such certifications shall
also be certified to Lender and its successors and assigns.

(o)                                 Appraisal.  Lender shall have received an appraisal of
the Property prepared by a licensed appraiser acceptable to Lender, in form and
substance required by Senior Lender, but also addressed to Lender and its
successors and assigns, in the amount of $69,000,000.

(p)                                 Environmental
Report.  Lender shall have received an
environmental report covering the Property, prepared by a professional
acceptable to Lender, in form and substance as required by Senior Lender, and
also certified to Lender and its successors and assigns.

(q)                                 Certification
of Organizational Documents.  Lender
shall have received a written certification attaching the required documents
with respect to Mortgagor, Senior Mezz Borrower and to Borrower, confirming
(i) that true, complete and correct copies of the

 13
 

organizational
documents have been attached to the certification, (ii) that no modifications
of such documents exist which have not been provided to Lender, and
(iii) that the provisions of Section 22 hereof have been incorporated into
the organizational documents.

(r)                                    Legal
Opinion.  Lender shall have received
a written legal opinion or legal opinions from Borrower’s counsel (which
counsel must be acceptable to Lender) in form acceptable to Lender and its
counsel, opining as to such matters as Lender may reasonably require, including
an opinion regarding:  (1) due organization
and valid existence, (2) authority; (3) enforceability of the Loan Documents,
(4) perfection of the security interests described in the Pledge Agreement and (5)
no usury.

(s)                                  UCC
Searches.  Lender shall have received
full Uniform Commercial Code searches, performed by a search company and in
jurisdictions satisfactory to Lender, with respect to Borrower, Senior Mezz
Borrower and Mortgagor and disclosing no matters objectionable to Lender.

(t)                                    Access
and Utility Easements.  Borrower
shall have established such easements as may be necessary to adequately assure
access and the availability of utilities to the Project.

(u)                                 Utilities.  Lender shall have received evidence that all
sewer, water, electrical, telephone and any other utility services necessary to
obtain a certificate of occupancy for the Project are available at the Property
in adequate supply for the use and operation of the Project and each provider
of utility services has a binding obligation to deliver the necessary services
to the completed residences.  This evidence
may include letters from the applicable utility providers.

(v)                                 Environmental
Disclosure.  In accordance with all
applicable laws, including the laws of the jurisdiction of the Property,
Borrower shall provide a true, correct and complete copy of any disclosure
document or other instrument required by any such law relating to environmental
matters.

(w)                               Senior
Lender Funding.  Senior Lender shall
have disbursed to or for the account of Mortgagor the disbursement of the initial
draw under the Senior Loan for the purchase of the La Scala Parcel and the disbursement
of the portion of the Senior Loan for the acquisition of the Hart Parcel if the
Hart Parcel is being acquired by Mortgagor.

(x)                                   No
Default.  The representations and
warranties of Borrower contained in this Agreement shall be true, correct and
complete in all material respects except the representation in 16(e) which need
be

 14
 

accurate only as
of the date of this Agreement and no Event of Default, as defined below, or
circumstance or event which upon the lapse of time, the giving of notice or
both, could become an Event of Default shall have occurred; and

(y)                                 Additional
Matters.  Borrower shall have
delivered to Lender such other or additional documents, instruments,
information or items as the Lender may request prior to the initial
disbursement of the Loan.

7.                                 TITLE INSURANCE. 
Concurrently with the closing of the Loan:

(a)                                  Owner’s
Policy of Title Insurance.  Borrower
shall deliver or cause to be delivered to Lender a duplicate original of
Mortgagor’s Owner’s Policy of Title Insurance (the “Policy”)
issued by the Title Insurer, meeting the following requirements:

(i)                                     with
coverage amount not less than the purchase price of the Property, if the
Property is being acquired by the Mortgagor concurrently with the closing of
the Loan;

(ii)                                  dated
as of a date not earlier than the disbursement of the Loan;

(iii)                               the
Policy shall not be subject to any exceptions other than the Senior Loan
Documents and the Permitted Exceptions;

(iv)                              the
legal description insured under the Policy shall include any easements
benefiting the Property; and

(v)                                 if
available under local regulations, the Policy shall also contain a mezzanine
financing endorsement, acknowledging that the coverage afforded by the Policy
runs to the Lender.

(b)                                 UCC
Policy.  Borrower shall deliver or
cause to be delivered to Lender an Eagle 9 UCC Insurance Policy issued by First
American Title Insurance Company (or a similar policy), which policy shall
(i) insure Lender’s first priority security interest in all of the Equity
Interests covered by the Pledge Agreement, (ii) be dated not earlier than
the date of the disbursement of the Loan, (iii) be subject only to matters
which would customarily appear on such a policy, and (iv) be in form and
substance reasonably satisfactory to Lender (such policy, the “UCC Policy”).

8.                                 INSURANCE.

(a)                                  Insurance
Requirements.  Borrower, at its sole
cost (or at Mortgagor’s sole cost), for the mutual benefit of Borrower,
Mortgagor, Senior Mezz Borrower and Lender, shall cause Mortgagor or Manager to
obtain and maintain policies of insurance

 15
 

with respect to
the Project as required by the Senior Loan Documents, as those requirements may
from time to time be amended; provided that Lender shall be named as an additional
insured under such liability coverage. 
Borrower agrees that it will cause Mortgagor to maintain coverage under its
products/completed liability insurance for the period of the statute of repose
in the state where the Project is located, but no less than ten years after
Completion.  If commercial general
liability insurance as required in the Senior Loan Documents is unavailable for
residential construction in the state where the Project is located, Owner shall
or shall cause Manager or the contractor to purchase wrap-up construction
insurance covering Mortgagor, contractor and all subcontractors for general
liability and products/completed operations for the period of the statute of
repose but no less than 10 years with limits no less than $5,000,000, naming
Lender as additional insured.

(b)                                 Insurance
Premiums; Evidence of Renewal.  All
premiums on insurance policies required under this Section 8 shall
be paid in the manner required by the Senior Loan Documents, provided, however,
that if Senior Lender waives the requirement for impound of insurance premiums,
Borrower agrees to provide evidence of payment of all insurance premiums.
Borrower shall use its best efforts to deliver originals of all policies and
renewals (or certificates evidencing the same), marked “paid” (or other
evidence satisfactory to Lender of the continuing coverage) to Lender at least
fifteen (15) days before the expiration of existing policies.  If Lender has not received satisfactory
evidence of such renewal or substitute insurance in the time frame herein
specified, Lender shall have the right, but not the obligation, to purchase
such insurance for Lender’s interest only.

(c)                                  Policy
Requirements.  All Policies provided
for or contemplated by Section 8.1(b) shall name Mortgagor as the
insured and, in the case of liability coverage, Borrower as the insured or
additional insured and Lender as the additional insured, in each case as their
interests may appear.  All insurance
policies and renewals of insurance policies required by this Section 8
shall (i) be in such amounts and for such periods as Senior Loan Documents
may from time to time require, (ii) be issued by insurance companies as
required by the Senior Loan Documents, (iii) provide thirty (30) days’
advance written notice to Lender before any cancellation or adverse material
modification and (iv) to the extent limits are not otherwise specified
herein, contain deductibles which are in amounts acceptable to Lender.  (Lender acknowledges that deductibles not in
excess of $250,000 per occurrence will be acceptable to it.)  All certificates of

 16
 

insurance and “blanket”
insurance policies shall reference the specific project being covered by name
and address.

(d)                                 Notice
of Casualty.  Borrower shall give to
Lender immediate notice of any material loss occurring on or with respect to
the Project.

(e)                                  Settlement
of Claim.  In case of loss covered by
any of such policies, Lender is authorized to adjust, collect and compromise,
in its discretion, all claims thereunder if an Event of Default has occurred
and is continuing at the time, subject to the rights of the Senior Lender and
the holder of the Senior Mezz Loan.  In
the event of any adjustment, collection and compromise by Lender, Borrower
covenants to sign upon demand, or Lender may sign or endorse on Borrower’s
behalf, all necessary proofs of loss, receipts, releases and other papers
required by the insurance companies to be signed by Borrower.  Borrower hereby irrevocably appoints Lender
as its attorney-in-fact for the purposes set forth in the preceding sentence,
subject to the rights of the Senior Lender and the holder of the Senior Mezz
Loan.  Subject to the rights of the
Senior Lender and the holder of the Senior Mezz Loan, Lender may deduct from
such insurance proceeds any reasonable expenses incurred by Lender in the
collection and settlement thereof, including attorneys’ and adjustors’ fees and
charges.  Nothing contained in this
Agreement shall create any responsibility or obligation of the Lender to
collect any amounts owing on any insurance policy, to rebuild or replace the
damaged or destroyed portions of the Project or to perform any other related act.  The Lender shall not, by the fact of
approving, disapproving, accepting, preventing, obtaining or failing to obtain
any insurance, incur any liability for or with respect to the amount of
insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and
Borrower hereby expressly assumes full responsibility therefor and all
liability, if any, with respect thereto.

(f)                                    Application
of Insurance Proceeds.  Any insurance
proceeds received by Mortgagor or Borrower under any of such policies shall,
subject to the rights of the Senior Lender or the holder of the Senior Mezz Loan,
be applied, at the option of the Lender, toward pre-payment or reimbursement of
the Loan and any other amounts evidenced or secured by the Loan Documents, or
to the rebuilding or repairing of the Project so damaged or destroyed, as the
Lender in its sole and unreviewable discretion may elect; provided, however,
that Lender will allow insurance proceeds to be used for restoration of the
Project if the conditions for Borrower’s use of insurance contained in the
Senior Loan Documents are satisfied (substituting Lender for Senior Lender
thereunder in making related decisions). 
Lender’s election to apply such insurance proceeds to the Loan and

 17
 

other amounts
evidenced or secured by the Loan Documents shall not relieve Borrower of the
duty to rebuild or repair.

9.                                 EMINENT DOMAIN.

(a)                                  Notice
of Condemnation.  Borrower shall give
to Lender immediate notice of any taking by condemnation of any portion of the Project
or the institution of any proceedings the effect of which is to achieve a
taking of any portion of the Project by condemnation.

(b)                                 Settlement
of Claim.  In case the Project, or
any part or interest in any thereof, is taken by condemnation, then subject to
the rights of the Senior Lender or the holder of the Senior Mezz Loan, the
Lender is hereby empowered to collect and receive all compensation and awards
of any kind whatsoever (referred to collectively herein as “Condemnation Awards”) which may be paid for any property
taken or for damages to any property not taken (all of which Borrower hereby
assigns to the Lender, subject to the rights of the Senior Lender or the holder
of the Senior Mezz Loan in the same). 
Borrower covenants to sign upon demand, or Lender may sign or endorse on
Borrower’s behalf, all necessary proofs of loss, receipts, releases and other
papers required by the condemning authority to be signed by Borrower for such
purpose.  Borrower hereby irrevocably
appoints Lender as its attorney-in-fact for the purposes set forth in this Section
9.  Lender may deduct from any
Condemnation Awards, any expenses reasonably incurred by Lender in the
collection and settlement thereof, including reasonable attorneys’ and
adjusters’ fees and charges.

(c)                                  Application
of Condemnation Awards.  All
Condemnation Awards so received shall, subject to the rights of the Senior
Lender or the holder of the Senior Mezz Loan, be forthwith applied by the
Lender, as it may elect in its sole and unreviewable discretion, to the payment
or reimbursement of the Loan or the other amounts evidenced or secured by the
Loan Documents, or to the repair and restoration of any property not so taken
or damaged; provided, however, that Lender will allow Condemnation Awards to be
used for restoration of the Project if the conditions for Borrower’s use of
Condemnation Awards contained in the Senior Loan Documents are satisfied
(substituting Lender for Senior Lender thereunder in making related decisions).

(d)                                 Continuing
Obligation to Repair.  No election
made by the Lender under this Section 9 shall relieve Borrower of the
duty to repair and restore.

 18
 

(e)                                  Lender
Not Required to Act.  Nothing
contained in this Agreement shall create a responsibility or obligation of
Lender to collect any amounts owing on account of any such condemnation or
proceedings relating to the Project, to rebuild or replace any damaged or
destroyed property or to perform any other related act.

10.                           RIGHTS OF ACCESS AND INSPECTION.  Borrower shall cause Mortgagor to permit
agents, representatives and employees of Lender to inspect the Project and the
installation of the Project or any part thereof during reasonable business
hours upon reasonable advance notice. 
Without limiting the foregoing, Lender shall also be permitted access to
the Project in order to examine, copy and audit Mortgagor’s books and records (including
as part of any audit performed pursuant to Section 12(e) hereof) and any
plans, drawings contracts, books or records relating to the Project.  Borrower shall, to the extent within its
control, cause any contractors or subcontractors to cooperate with Lender or
its agents in connection with any inspection. 
Lender is under no duty to visit or observe the Project or to examine
any books or records.  Any site visit,
observation or examination by Lender shall be solely for the purpose of
protecting Lender’s security and preserving Lender’s rights under the Loan
Documents.  Neither Borrower, Senior Mezz
Borrower or Mortgagor nor any other party is entitled to rely on any site
visit, observation or testing by Lender or its agents or representatives.  Lender owes no duty of care to protect
Borrower, Mortgagor, Senior Mezz Borrower or any other party against, or to
inform Borrower or any other party of, any adverse condition affecting the Project,
including any defects in the design or construction of any improvements on the
Property or the presence of any Hazardous Materials on the Property.  So long as no Event of Default has occurred
and is continuing, Lender shall give Borrower, Senior Mezz Borrower and Mortgagor
reasonable prior notice of its intent to enter the Project.

11.                           EXPENSES.  Borrower
shall pay, as and when due, all reasonable costs and expenses incurred in the
procuring and making of the Loan by Lender, including without limitation, to
the extent reasonable, Title Insurer’s fees and premiums, charges for
examination of title to the Premises, expenses of surveys, transfer taxes and
recording expenses, appraisal and appraisal review fees, fees of an inspector
and fees and expenses of any attorneys, accountants, engineers, architects,
surveyors, contractors, inspectors or other consultants, professionals or
independent contractors employed, retained or utilized by Lender in connection
with the Loan.  Borrower shall cause
Mortgagor to pay when due any and all insurance premiums, taxes, assessments,
water, sewer and other utility charges, impact fees, liens and encumbrances on
the Project and any other amounts payable for the cost of improvements to the
Property, provided that Borrower and/or Mortgagors may in good faith contest
any such liens, claims or amounts so long as it provides, for any filed lien, a
bond in accordance with statutory requirements or other security reasonably
satisfactory to Lender.  Borrower shall
pay upon demand or reimburse Lender for any and all reasonable fees, costs and
expenses incurred by Lender in collecting the Indebtedness after an Event of
Default including reasonable attorneys’ fees. 
All such amounts shall be paid to Lender or at Lender’s direction to
such other person to whom payments are due or Lender may, at its option, pay
such amounts and all sums paid shall be deemed a portion of the Indebtedness
and shall bear interest at the Default Interest Rate.

 19
 

12.                           FINANCIAL REPORTS, PROPERTY REPORTS AND ANNUAL BUDGET.

The parent company
of Lender is a real estate fund that issues securities, maintains U.S. GAAP
audited financial statements and/or is publicly registered with the United
States Securities and Exchange Commission (“SEC”).  As a result, such parent company is subject
to GAAP financial statement requirements and other reporting requirements. These
requirements include but are not limited to quarterly and annual financial reporting
(including for public companies on Form 10-Q and Form 10-K and reporting under
Rule 3-14 of Regulation S-X, which requires the filing of pro forma financial
statements of acquired properties).  In
addition, certain accounting requirements may dictate that Lender report
Borrower, Senior Mezz Borrower, Mortgagor and/or the Project as a subsidiary of
Lender.  Therefore, Borrower agrees to
provide Lender with all information that Borrower or its Affiliates has in
their possession and Borrower will use its best efforts to obtain such
information not in its possession as Lender reasonably requires in order to
prepare, audit and/or review financial statements of the Project, Mortgagor,
Senior Mezz Borrower and Borrower for the applicable reporting periods.

(a)                                  Borrower
agrees that all accounting for the Project will be conducted by Borrower and/or
Mortgagor and/or Senior Mezz Borrower and also by Lender.  Borrower agrees to provide Lender with copies
of all Accounting Records (other than leases, which Borrower and/or the
Mortgagor and/or Senior Mezz Borrower may make available at the Project rather
than copying) on a monthly basis in order to enable Lender to prepare and
maintain financial statements on Borrower, Senior Mezz Borrower, Mortgagor
and/or the Project in accordance with accounting principles generally accepted
in the United States of America.

(b)                                 Borrower
agrees to provide Accounting Records by the 15th of the month for the preceding
month.

(c)                                  Borrower
agrees to allow Lender and Lender’s external independent accountants access to
original Accounting Records if needed in the process of their quarterly reviews
and various audit processes.

(d)                                 Borrower
agrees to cooperate with any inquiries or interviews by Lender or its external
independent accountants as may be necessary in relation to Lender’s or its Affiliates’
compliance with the Sarbanes-Oxley Act of 2002.

(e)                                  In
addition, Borrower shall furnish to Lender:

(f)                                    within
30 days after the end of each fiscal year of Mortgagor, and at any other time
upon Lender’s request, a statement that identifies all owners of any interest
in Mortgagor and Senior Mezz Borrower and

 20
 

the interest held
by each, if Mortgagor or Senior Mezz Borrower is a corporation, all officers
and directors of Mortgagor or Senior Mezz Borrower, and if Mortgagor or Senior
Mezz Borrower is a limited liability company, all members and managers (whether
members or not);

(g)                                 within
15 days after the end of each month, a monthly property management report for
the Project, showing the number of inquiries made and rental applications
received from tenants or prospective tenants, deposits received from tenants
and any other information reasonably requested by Lender;

(h)                                 within
15 days following the end of each month, a monthly statement of income and
expense for the Project; and

(i)                                     beginning
sixty (60) days prior to the first occupancy of the Property and for each
succeeding calendar year, not later than ninety (90) days prior to the
commencement of such calendar year, an annual budget which sets forth, in
sufficient detail, Borrower’s projection of gross receipts and expenses for
such period (the “Annual Budget”).  Each Annual Budget shall be for a calendar
year except that the Annual Budgets for the year of first occupancy of the
Property, shall only cover the remainder of the then-current year.

(j)                                     If
Borrower fails to provide in a timely manner the Accounting Records,
statements, schedules and reports required by this Section 12, Lender
shall have the right to have Mortgagor’s, Senior Mezz Borrower’s and Borrower’s
books and records audited or to perform any other procedure reasonably
requested by Lender, at Borrower’s expense, by independent certified public
accountants selected by Lender in order to obtain such statements, schedules
and reports, and all related costs and expenses of Lender shall become
immediately due and payable and shall become an additional part of the
Indebtedness as provided in Section 20.

(k)                                  If
Lender acquires the Project or acquires the Collateral through foreclosure,
Borrower shall deliver, or cause to be delivered, to Lender upon written demand
all books and records relating to the Project or its operation. Otherwise,
during the term of the Loan, to the extent that copies of such books and
records have not been provided pursuant to the provisions of this Section 12
set forth above, Borrower will provide Lender with all cost records necessary
for Lender to perform its accounting procedures including, but not limited to,
balance sheets, income statements, trial balance activity reports, general
ledger detail reports, cash receipts journal, check register or cash
disbursements journal and copies of checks and vendor invoices for all invoices
paid.   Borrower agrees to make

 21
 

available to
Lender for examination and copying any other books and records upon Lender’s
written demand.

(l)                                     Borrower
authorizes Lender to obtain a credit report on Borrower, Senior Mezz Borrower, Mortgagor
and Guarantors at any time.

13.                           GENERAL COVENANTS OF BORROWER.  Until the full and final payment of the Loan,
unless Lender waives compliance in writing, Borrower hereby covenants and
agrees as follows:

(a)                                  Commencement
and Completion of Project.  Borrower
shall cause Mortgagor to begin demolition of the existing improvements on the
Property and/or construction and installation of the improvements in connection
with the Project on or before the commencement date set forth in the Senior
Loan Documents and shall cause Mortgagor to prosecute such construction and
installation with diligence so that the construction and Completion (as defined
in the Completion Guaranty) of the Project (other than payment of claims that
are being contested in accordance with the Loan Documents) shall have occurred
by the completion deadline set forth in the Senior Loan Documents.

(b)                                 Lender
Approval.  No changes to the
construction budget included in the Senior Loan Documents or the Budget
attached hereto or the completion date required by the Senior Loan Documents shall
be permitted without Lender’s written consent, with the exception of (i)
completion date extensions due to force majeure and (ii) reallocation of
amounts among the line items of the budgets; provided that Borrower shall
provide Lender with notice of any changes in connection with (i) and (ii)
above.  Lender shall have the right to
approve all contractors (except GC 124 Voss Construction Limited Partnership)
and all construction contracts between Mortgagor and such contractors.  Lender shall approve the plans and
specifications for the improvements to be constructed on the Property prior to
Borrower and/or Mortgagor implementing the same, and no changes to such
approved plans and specifications shall be permitted without Lender’s written
consent, with the exception of (i) changes required by governmental authorities
or Senior Lender and (ii) other changes that, individually, do not increase or
decrease Project costs by more than $100,000 and, in the aggregate, do not
increase or decrease Project costs by more than $300,000.  Lender shall have ten (10) business days to
provide any approval required under this Section 13(b) but if Lender
does not provide written notice that it does not approve within the ten (10) business
days, then the action shall be deemed approved.

 22
 

(c)                                  Operation
and Maintenance of Project.  In
addition to the terms, conditions and provisions set forth in the other Loan
Documents:

(i)                                     Payment
of Lawful Claims.  Borrower shall pay
or discharge all lawful claims, including taxes, assessments and governmental
charges or levies imposed upon Borrower or its income or profits or upon any
property belonging to Borrower prior to the date upon which penalties attach
thereto; provided that Borrower may in good faith contest any such taxes,
assessments, charges or levies so long as it provides, for any filed lien, a
bond in accordance with statutory requirements or other security reasonably
satisfactory to Lender.  Without limiting
the generality of the foregoing, Borrower shall pay (a) all taxes and recording
expenses, including stamp taxes, if any, relating to all documents and
instruments securing the Loan, (b) the fees and commissions (if any) lawfully
due to brokers engaged by Borrower or its Affiliates in connection with this
transaction (and Borrower shall hold Lender harmless from all such claims,
whether or not lawfully due), and (c) the fees and expenses of Lender’s counsel
relating to Lender’s consultation with such counsel in connection with the
negotiation, documentation and closing of the Loan and any subsequent
modifications of the Loan.

(ii)                                  No
Amendments.  Borrower shall not, nor
shall it permit Mortgagor and/or Senior Mezz Borrower to, without Lender’s
prior written consent, enter into any amendments or modifications of (a) if
Borrower or Mortgagor or Senior Mezz Borrower is a corporation, Borrower’s,
Mortgagor’s and Senior Mezz Borrower’s by-laws and articles of incorporation, (b)
if Borrower, Senior Mezz Borrower or Mortgagor is a limited liability company,
such entity’s operating agreement or articles of organization, (c) if Borrower,
Senior Mezz Borrower or Mortgagor is a limited partnership, such entity’s
partnership agreement or partnership certificate, (d) the construction contract
between Mortgagor and GC 124 Voss Construction Limited Partnership (except for
change orders that, individually, do not increase or decrease Project costs by
more than $100,000 and, in the aggregate, do not increase or decrease Project
costs by more than $300,000), (e) the Management Agreement, (f) the Senior Loan
Documents, or (g) the Senior Mezz Loan Documents.

(iii)                               Hazardous
Substances.  So long as Mortgagor
owns the Project, Borrower shall cause Mortgagor to (a) keep the Project free
from Hazardous Substances, except those in de minimis amounts ancillary to the
Project activities that are used in compliance with all environmental laws, (b)
promptly notify Lender if Borrower or Mortgagor becomes aware that any
Hazardous Substance is on or near the Project in violation of any environmental
laws or if the Project otherwise is in violation of any environmental laws, and
(c)

 23
 

remove such
Hazardous Substances contamination that violates any environmental laws and/or
cure such violations as required by law.

(iv)                              Maintenance
and Repair of Project.  After
completion of the Project, Borrower shall cause Mortgagor to (a) maintain
the Project, including the parking and landscaping portions thereof, in good
condition and repair, (b) promptly make all necessary structural and
non-structural repairs to the Project, (c) not demolish, alter, remove or
add to any improvements on the Property, excepting (i) the repair and
restoration of improvements following damage thereto as required by this
Agreement, and (ii) as otherwise required by any applicable law, rule or
regulations, and (d) not erect any new buildings, structures or building
additions on the Project other than in accordance with the plans for the
Project, without the prior written consent of Lender.  Borrower shall pay when due all claims for
labor performed and materials furnished therefor in connection with any
improvements or construction activities on the Property; provided that Borrower
may in good faith contest any liens, claims or amounts so long as it provides,
for any filed lien, a bond in accordance with statutory requirements or other
security reasonably satisfactory to Lender.

(d)                                 Restricted
Sale and Encumbrance of Project and of Borrower Interests; Other Indebtedness.  Neither Borrower nor Principal nor Senior
Mezz Borrower shall engage in any Sale or Encumbrance without the prior written
consent of Lender (which may be withheld by Lender in Lender’s sole and
absolute discretion).  Borrower will not issue
any additional Equity Interests in Borrower. 
In addition, Borrower shall not permit Mortgagor or Senior Mezz Borrower
to issue any additional Equity Interests in Mortgagor or Senior Mezz Borrower.  In addition, Borrower shall not, nor shall it
permit Mortgagor or Senior Mezz Borrower to, incur any indebtedness, whether
secured or unsecured, other than (i) the Senior Loan, Senior Mezz Loan and this
Loan, (ii) obligations under interest rate hedging arrangements related to the
Senior Loan and (iii) trade and operational indebtedness incurred in the
ordinary course of business (including construction and operation of the
Project) or for its administrative functions. 
Notwithstanding the foregoing, Lender’s consent shall not be required
for:

(i)                                     the
grant of a leasehold interest in an individual dwelling unit for a term of two
years or less not containing an option to purchase and otherwise in compliance
with Section 13(f) hereof;

(ii)                                  a
Sale of obsolete, worn out or damaged property or fixtures that is contemporaneously
replaced by items of equal or better function and quality, which are free of
liens, encumbrances and security interests

 24
 

other than Permitted
Exceptions, those created by the Loan Documents, Senior Mezz Loan Documents or
the Senior Loan Documents or those otherwise consented to by Lender;

(iii)                               a
Sale that results from theft, condemnation or other involuntary conversion;

(iv)                              the
Sale (including through consumption) of personal property in the ordinary
course of business that is contemporaneously replaced by items of equal or
better function and quality;

(v)                                 the
grant of an easement if, before the grant, Lender determines (which
determination must be made reasonably) that the easement will not materially
affect the operation or value of the Project and Borrower pays to Lender, upon
demand, all reasonable costs and expenses incurred by Lender in connection with
reviewing Borrower’s request; and

(vi)                              the
creation of (1) a lien for taxes, assessments or other governmental charges or
levies that are not then due or that are being contested in good faith and in
accordance with applicable statutory procedures or (2) a mechanic’s lien
against the Project which is bonded off, released of record or otherwise
remedied to Lender’s reasonable satisfaction within 30 days of the date of
creation.

(e)                                  General
Indemnity.  Borrower shall, at
Borrower’s expense, protect, defend, indemnify, save and hold Lender and each
of its members and its respective members, stockholders, directors, officers,
employees and agents (collectively the “Indemnified Parties”)
harmless against any and all claims, demands, losses, expenses (including court
costs and reasonable attorney’s fees and expenses), damages and causes of
action (whether legal or equitable in nature) asserted by any person or entity
arising out of, caused by or relating to the Project and the Lender’s exercise
of its rights under the Loan Documents upon an Event of Default, except to the
extent the same arises out of, is caused by or results from the gross
negligence or willful misconduct of an Indemnified Party.  Borrower shall pay to Lender upon demand all
claims, judgments, damages, losses and expenses (including court costs and
reasonable attorneys’ fees and expenses) incurred by Lender as a result of any
legal or other action arising out of the aforesaid matters.  Borrower acknowledges that the Indemnified
Parties may defend any matter covered by the above indemnification by counsel
of the relevant Indemnified Party’s choice, and the costs of such defense
(including reasonable attorney’s fees) are part of the costs covered by the
indemnity.  The foregoing indemnification
shall survive repayment of the Loan.

 25

(f)                                    Leases.:

(i)                                     Residential
Lease Requirements.  Mortgagor shall
have the right, and Borrower may permit Mortgagor, to enter into residential
Leases without Lender’s prior written consent, so long as:  (A) all Leases for residential dwelling
units are on forms approved by Lender, and shall not include options to
purchase and (B) all Leases shall be for initial terms of at least six
months and not more than two years (with the exception of Leases for up to 3%
of the units in the Project, which may have terms of less than six months).

(ii)                                  Commercial
Lease Requirements.  Mortgagor shall
not, nor shall Borrower permit Mortgagor to, enter into any non-residential
Leases without Lender’s prior written consent in each instance.  Mortgagor shall not, nor shall Borrower permit
Mortgagor to, modify the terms of, or extend or terminate, any Lease for
non-residential use (including any Lease in existence on the date of this
Agreement) without the prior written consent of Lender.  Borrower shall, without request by Lender,
deliver a copy of each executed non-residential Lease to Lender promptly after
such Lease is signed.

(iii)                               Advance
Rent.  Mortgagor shall not, nor shall
Borrower permit Mortgagor to, receive or accept rent under any Lease (whether
residential or non-residential) for more than two months in advance.

(iv)                              Performance
of Obligations.  Borrower shall cause
Mortgagor to pay, perform and discharge, as and when payment, performance and
discharge are due, all obligations of Mortgagor as landlord under all Leases.

(v)                                 Security
Interest.  Except for the assignment
to Senior Lender, Borrower shall not permit Mortgagor to further assign,
pledge, transfer or otherwise encumber the Leases or the rents under the
Leases.

(vi)                              Defense;
Pursuit of Remedies.  Borrower shall,
or shall cause Mortgagor to, at its sole cost and expense, appear in and defend
any action or proceeding arising from or connected with any of the Leases or
any obligation or liability of Mortgagor as landlord thereunder.  Borrower shall, or shall cause Mortgagor to,
use commercially reasonable efforts to pursue all remedies, including claims
for damages available at law or in equity, against any tenant under a Lease who
defaults in the performance of its obligations under the Lease.

(g)                                 Notices.  Borrower shall promptly notify Lender in
writing of any litigation affecting (a) Borrower, Mortgagor or Senior Mezz

 26
 

Borrower, and any
general partner, managing member or controlling shareholder of Borrower,
Mortgagor, Senior Mezz Borrower or Principal (excluding a Principal, general
partner, managing member or controlling shareholder which is a natural person
or trust), or (b) the Project, to the extent the same may result in a material
adverse change in (i) the financial condition of any of the foregoing parties,
(ii) Borrower’s ability to timely perform any of its obligations under any
of the Loan Documents or Mortgagor’s ability to timely perform any of its
obligations under any of the Senior Loan Documents or Senior Mezz Borrower’s
ability to timely perform any of its obligations under the Senior Mezz Loan
Documents, or (iii) the physical condition or operation of the Project.

(h)                                 Development.  If after the date of this Agreement, Borrower,
Senior Mezz Borrower or Mortgagor intends to change the developer of the
Project, Lender shall have the right to approve such new developer and the
written development agreement for the Project.

(i)                                     Management.  The Project shall be managed at all times by Manager
or a professional residential rental property manager satisfactory to Lender
under a contract approved by Lender. 
Lender hereby accepts the Manager as the initial property manager and
the Management Agreement as the initial management agreement. If after the date
of this Agreement, Borrower, Senior Mezz Borrower or Mortgagor intends to
change the management of the Project, Lender shall have the right to approve
such new property manager and the written contract for the management of the
Project and, if the manager is an Affiliate or Borrower, require that Borrower
and such new property manager enter into a Subordination of Management
Agreement on a form reasonably acceptable to Lender.

(j)                                     Senior
Loan.  Borrower shall, or shall cause
Mortgagor, to fully and timely pay all amounts owing under the Senior Loan
Documents and timely and fully perform all of Mortgagor’s covenants and
agreements contained therein.  Borrower
shall provide Lender with copies of all notices (except routine notices which
would not include any notice related to any failure to comply with any terms of
the Senior Loan Documents or regarding any event of default under the Senior
Loan Documents) given or received by Mortgagor under or pursuant to the Senior
Loan Documents, promptly upon delivery or receipt as the case may be.  Without limiting the Lender’s right to
declare an Event of Default on account of a failure to comply with the terms
and provisions of the Senior Loan Documents, if Borrower or Mortgagor fail to
so pay or perform such obligations, and if such failure either (i) becomes an
Event of Default hereunder or (ii) prior to becoming an Event of Default
continues for twenty (20) days after Lender gives written notice to Borrower to
cure, the Lender may pay or perform the same pursuant to Section 18(b)
hereof.  Notwithstanding the

 27
 

foregoing,
(i) Lender shall have no obligation whatsoever to pay any of the amounts
evidenced or secured by, or to perform any of the covenants or obligations
imposed by, any Senior Loan Documents, and (ii) any such payment by Lender
shall not cure Mortgagor’s default hereunder or under the Senior Loan Documents
but shall only protect Lender’s interest in the Project.  Borrower shall not, nor shall it permit
Mortgagor to, amend or modify any of the Senior Loan Documents without the
prior written consent of Lender.

(k)                                  Senior
Mezz Loan.  Borrower shall, or shall
cause Senior Mezz Borrower, to fully and timely pay all amounts owing under the
Senior Mezz Loan Documents and timely and fully perform all of Senior Mezz Borrower’s
covenants and agreements contained therein.  Borrower shall provide Lender with copies of
all notices (except routine notices which would not include any notice related
to any failure to comply with any terms of the Senior Mezz Loan Documents or
regarding any event of default under the Senior Mezz Loan Documents) given or
received by Senior Mezz Borrower under or pursuant to the Senior Mezz Loan
Documents, promptly upon delivery or receipt as the case may be.  Without limiting the Lender’s right to
declare an Event of Default on account of a failure to comply with the terms
and provisions of the Senior Mezz Loan Documents, if Borrower or Senior Mezz
Borrower fail to so pay or perform such obligations, and if such failure either
(i) becomes an Event of Default hereunder or (ii) prior to becoming an Event of
Default continues for twenty (20) days after Lender gives written notice to
Borrower to cure,, the Lender may pay or perform the same pursuant to Section
18(b) hereof.  Notwithstanding the
foregoing, (i) Lender shall have no obligation whatsoever to pay any of
the amounts evidenced or secured by, or to perform any of the covenants or
obligations imposed by, any Senior Mezz Loan Documents, and (ii) any such
payment by Lender shall not cure Senior Mezz Borrower’s default hereunder or
under the Senior Mezz Loan Documents but shall only protect Lender’s interest
in the Project.  Borrower shall not, nor
shall it permit Senior Mezz Borrower to, amend or modify any of the Senior Mezz
Loan Documents without the prior written consent of Lender.

(l)                                     Principal
Place of Business; Choice of Law 
Borrower shall not change its principal place of business or, if
Borrower has more than one place of business, its chief executive office, from
its address set forth in the first paragraph of this Agreement.  In addition, Borrower shall not make an
election under the Uniform Commercial Code to treat, as the governing law for
perfection of uncertificated securities, the law of any jurisdiction other than
the jurisdiction of its formation. 
Lender agrees not to unreasonably withhold its consent to any change in
Borrower’s principal place of business or the

 28
 

governing law with
respect to uncertificated securities so long as (1) Borrower and any other
party reasonably requested by Lender executes all documents and instruments reasonably
deemed necessary by Lender to perfect the security interests granted pursuant
to the Loan Documents, (2) Borrower pays all of the Lender’s reasonable costs
and expenses of perfecting such security interests and (3) if requested by
Lender, Borrower delivers to Lender an opinion from counsel reasonably
satisfactory to Lender opining as to the continued perfection of such security
interest.

(m)                               Compliance
with Governmental Prohibitions.  No
portion of the Loan proceeds will be used, disbursed or distributed by Borrower
or any Principal for any purpose, or to any person, in violation of any Law (as
defined in Section 16 (h)) including, without limitation, any of the
Terrorism Laws (as defined in Section 16 (h)).  Borrower shall provide Lender with immediate
written notice (a) of any failure of any of the representations and warranties
set forth in Section 16(h) of this Agreement to be true, correct and
complete in all material respects at any time, or (b) if Borrower obtains
knowledge that Borrower, Principal, or any holder at any time of any direct or
indirect equitable, legal or beneficial interest in Borrower or Principal is
the subject of any of the Terrorism Laws. 
Borrower shall immediately and diligently take, or cause to be
immediately and diligently taken, all necessary action to comply with all
Terrorism Laws and to cause the representations and warranties set forth in Section
16(h) to be true, correct and complete in all material respects.

14.                           FURTHER ASSURANCES. 
Borrower shall, from time to time, upon Lender’s request, at Borrower’s
sole cost and expense, execute, deliver, record and furnish such documents and
do such other acts as Lender may reasonably deem necessary or desirable to (i) perfect
and maintain valid liens upon the security contemplated by the Loan Documents,
(ii) correct any errors of a typographical or other manifest nature which may
be contained in any of the Loan Documents, (iii) evidence Borrower’s compliance
with the Loan Documents, and (iv) consummate fully and carry out the intent of
the transactions contemplated under this Agreement or the Loan Documents.

15.                           APPRAISALS.  Lender
has the right to obtain a new appraisal or update an existing appraisal of the
Project at any time while the Loan or any portion thereof remains outstanding
(a) when, in Lender’s reasonable judgment, such an appraisal is warranted as a
result of Lender’s internal evaluation of the Loan, and/or (b) to comply with
statutes, rules, regulations or directives of governmental agencies having
jurisdiction over Lender.  Borrower shall
pay, upon demand, all reasonable appraisers’ fees and related expenses incurred
by Lender from time to time in obtaining such appraisal reports; provided,
however, that Borrower shall not be required to pay for a re-appraisal more
than once every three years unless an Event of Default has occurred and is
continuing.

 29
 

16.                           GENERAL REPRESENTATIONS AND WARRANTIES OF BORROWER.  Borrower represents and warrants to Lender,
which representations and warranties shall survive the termination of this
Agreement, the repayment of the Loan, any investigations, inspections or
inquiries made by Lender or any of Lender’s representatives, and any
disbursements made by Lender hereunder, as follows:

(a)                                  Organization;
Corporate Powers; Authorization of Borrowing.

(i)                                     Organization.  Borrower’s ownership structure set forth on Exhibit ”D”
attached hereto is a true and correct depiction of the Equity Interests in
Borrower, Senior Mezz Borrower and Mortgagor, and each entity set forth on Exhibit ”D”
is duly organized and is validly existing and in good standing under the laws
of the state of its organization, and Mortgagor is qualified to do business in
the jurisdiction where the Property is located.

(ii)                                  Power
and Authority.  Borrower has the full
limited liability company power and authority to execute the Loan Documents and
to undertake and consummate the transactions contemplated hereby and thereby,
and to pay, perform and observe the conditions, covenants, agreements and
obligations herein and therein contained; and the Loan Documents have been duly
and validly executed by Borrower and constitute the legal, valid and binding
obligations of Borrower and are enforceable against Borrower in accordance with
their respective terms, except as such enforcement may be qualified or limited
by bankruptcy, insolvency or other similar laws affecting creditors’ rights
generally and general principles of equity.

(iii)                               Not
a Foreign Person.  Neither Borrower,
nor any entity that is a holder of an Equity Interest in Borrower, is organized
under the laws of any jurisdiction other than the United States or one of the
states thereof.

(iv)                              No
Defaults Under Existing Agreements. 
The consummation of the transactions contemplated hereby and the performance
by Borrower of its obligations under the Loan Documents will not result in any
breach of, or constitute a default under, the Senior Loan Documents, Senior
Mezz Loan Documents, any other material Third Party Agreements or any mortgage,
deed of trust, bank loan or security agreement, or other material instrument to
which Borrower, Senior Mezz Borrower, Mortgagor or Principal, are a party or by
which the Property, Borrower or the Principal are bound.

(v)                                 True
and Correct Copies of Documents.  All
due diligence documents required to be delivered by Borrower to Lender
hereunder (including those due diligence documents referred to in Section 6
hereof) are true, correct and complete copies thereof and

 30
 

the same have not
been amended or modified except as expressly disclosed therein.

(vi)                              Ownership.  GC 114 Development 2006 GP LLC, a Delaware
limited liability company (the “GP”), owns and
will own at all times during the term of the Loan one hundred percent (100%) of
the general partner interest in Principal, and GP has not transferred, conveyed,
pledged or encumbered (and will not transfer, convey, pledge or encumber) such general
partner interest except with the prior written consent of Lender.  GP is (and at all times during the term of
the Loan will be) treated as a disregarded entity for federal income tax
purposes that is not separate from its owner, Southwest 101 GP LLC, for federal
income tax purposes.  During the term of
the Loan, neither GP nor Principal nor Borrower nor Senior Mezz Borrower nor
Mortgagor will borrow funds from Lender or an Affiliate of Lender other than
the Loan or the Senior Mezzanine Loan.

(b)                                 Title
to Property; Matters Affecting Property.

(i)                                     Title
to Property.  Mortgagor, upon the
closing of the acquisition of the Property, will have good and marketable fee
simple title to the Property, subject only to the Senior Loan Documents and the
Permitted Exceptions, and good, marketable and freely alienable title to all
personal property located on the Property, subject only to the Senior Loan
Documents and the Permitted Exceptions; Borrower will cause Mortgagor to
protect or cause to be protected the title to the Project, and Borrower will
forever warrant and defend the same against any other claims of any persons or
parties whomsoever, subject to the Senior Loan Documents and the Permitted
Exceptions.

(ii)                                  Senior
Mezz Borrower’s Equity Interests. 
Borrower owns and will own one hundred percent (100%) of the Equity
Interests in Senior Mezz Borrower and Borrower has not transferred, conveyed,
pledged or encumbered (and will not transfer, convey, pledge or encumber) such
interests except to Lender pursuant to the Loan Documents.  Borrower has and will have authority to
encumber its Equity Interests in Senior Mezz Borrower pursuant to the terms of
the Pledge Agreement.

(iii)                               Borrower’s
Equity Interests.  Principal owns and
will own one hundred percent (100%) of the ownership interests in Borrower, and
Principal has not transferred, conveyed, pledged or encumbered (and will not
transfer, convey, pledge or encumber) such interests except as expressly
permitted pursuant to the Junior Mezzanine Loan or otherwise with the prior
written consent of Lender.

 31
 

(iv)                              No
Actions.  There are no actions, suits
or proceedings at law or in equity (including condemnation or eminent domain
proceedings) currently pending, or to the knowledge of Borrower threatened,
against Mortgagor, Borrower, Senior Mezz Borrower, Principal or the Project or,
to the knowledge of Borrower, involving the validity or enforceability of the
Senior Loan Documents, Senior Mezz Loan Documents or the Loan Documents or the
priority of the liens granted thereunder, by or before any governmental
authority having or exercising jurisdiction over the Project.  Borrower will promptly notify Lender of any
such future actions, suits or proceedings. 
Except as provided in Exhibit “E”, to Borrower’s knowledge,
neither Borrower, nor Senior Mezz Borrower, nor Mortgagor, nor the Property is
in default with respect to, or in violation of, any order, writ, injunction,
decree or demand of any court or any governmental authority having or
exercising jurisdiction over the Property.

(v)                                 No
Contracts Giving Rise to Liens.  Neither
Borrower, Senior Mezz Borrower nor Mortgagor have made any contract or
arrangement of any kind, that does or could give rise to a lien on the Project,
except for (i) the Senior Loan Documents and the Permitted Exceptions and (ii)
contracts related to design and construction of the Project which have been
provided to Lender.  Neither Borrower nor
the Principal have made any contract or arrangement of any kind that does or
could give rise to a lien or encumbrance on any of the Equity Interests in
Mortgagor or Senior Mezz Borrower.

(vi)                              No
Construction.  Prior to the
disbursement of this Loan and the recordation of the Security Instrument, no
construction whatsoever has been performed on the Property by Borrower or its
Affiliates.

(vii)                           Compliance
with Property Agreements.  Except as
provided in Exhibit “F”, the Property in all respects conforms to
and complies with all covenants, conditions, restrictions, reservations,
regulatory agreements, conditional use permits and zoning ordinances affecting
the Property whether or not recorded against the Property.

(viii)                        Leases.  Except as provided in Exhibit “G”,
there are no Leases of the Property in effect as of the closing of the Loan.

(ix)                                Tax
Treatment.  Borrower, Senior Mezz
Borrower and Mortgagor are (and at all times during the term of the Loan will
be) disregarded as entities separate from Principal within the meaning of Treasury
Regulation §301.7701-3(b)(i)(2). 
Borrower, Senior Mezz Borrower and Mortgagor have not (and at all times
during the term of the Loan will not) elect to be classified as an association
taxable as a corporation within the meaning of Treasury Regulation §301.7701-3(c).

 32
 

(x)                                   Permits.  All permits required for the operation and
construction of the Project are in effect or Borrower expects them to be
available as required for construction of the Project in accordance with the
schedule required by the Senior Loan Documents. 
Once issued, all such permits will remain in effect and the Project and
its contemplated use and operation will comply therewith.  All discretionary approvals for the
construction of the Project in accordance with the Plans and Specifications
have been obtained.

(c)                                  Financial
Statements.  The financial statements
heretofore delivered to Lender by Borrower, Senior Mezz Borrower, Mortgagor, and
Principal are true and correct in all material respects, have been prepared in
accordance with sound accounting practices, and fairly present the financial
condition(s) of the person(s) referred to therein as of the date(s) indicated;
no materially adverse change has occurred in the financial condition(s)
reflected in such financial statements since the date(s) shown thereon and no
additional borrowings or liabilities have been made or incurred by such
person(s) since the date(s) thereof other than the borrowing contemplated
hereby, the Senior Loan, the Loan or other borrowings disclosed in writing to
and approved by Lender.  The Estimated
Collateral Value Statement, dated as of June 30, 2005, for each Guarantor
accurately lists the Available Assets of the Guarantor (as defined in the
Completion Guaranty) as of such date and the value of such Available Assets
calculated on the basis provided in the notes thereto.

(d)                                 Budget
Projections.  Borrower’s and/or
Mortgagor’s and/or Senior Mezz Borrower’s budget projections indicate that
monthly income from Project operations will be sufficient to pay the combined monthly
accrual of interest on the Senior Loan, Senior Mezz Loan and the Loan by the
Maturity Date and the projections are reasonable in Borrower’s opinion and have
been prepared in a manner consistent with the past practices of affiliates of
Borrower.

(e)                                  No
Loan Broker.  Borrower has not dealt
with any person, firm or corporation who is or may be entitled to any finder’s
fee, brokerage commission, loan commission or other sum in connection with the
execution of this Agreement or the making of the Loan by Lender to
Borrower.  Borrower does hereby indemnify
and agree to defend and hold Lender harmless from and against any and all loss,
liability or expense, including court costs and reasonable attorneys’ fees and
expenses, which Lender may suffer or sustain should such warranty or
representation prove inaccurate in whole or in part.

(f)                                    No
Default.  There are no defaults under
any of the Senior Loan Documents, Senior Mezz Loan Documents

 33
 

or the Loan
Documents on the part of Borrower, Senior Mezz Borrower, Mortgagor or the other
parties signatory thereto, and no event has occurred and is continuing which,
with the giving of notice or the passage of time, or both, would constitute a
default under any thereof.

(g)                                 Solvency.  As of the date hereof, Borrower, Senior Mezz
Borrower and Mortgagor are each solvent and able to pay their debts as the same
shall become due and payable.

(h)                                 Violations
of Governmental Prohibitions. 
Neither the making of the Loan, nor the receipt of Loan proceeds by
Borrower, violates any federal, state, county, municipal and other governmental
and quasi-governmental statutes, laws, rules, orders, regulations, ordinances,
judgments or decrees (collectively, “Law”)
applicable to Borrower, including, without limitation, any of the Terrorism Laws.  Neither the making of the Loan, nor the
receipt of Loan proceeds by Borrower or Senior Mezz Borrower or Mortgagor or
Principal, violates any of the Terrorism Laws applicable thereto.  To Borrower’s best knowledge, no holder of
any direct or indirect equitable, legal or beneficial interest in Borrower or
Principal is the subject of any of the Terrorism Laws.  No portion of the Loan proceeds will be used,
disbursed or distributed by Borrower for any purpose, or to any person,
directly or indirectly, in violation of any Law including, without limitation,
any of the Terrorism Laws.  “Terrorism Laws” means Executive Order 13224 issued by the
President of the United States of America, the Terrorism Sanctions Regulations
(Title 31 Part 595 of the U.S. Code of Federal Regulations), the Terrorism List
Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of
Federal Regulations), and the Foreign Terrorist Organizations Sanctions
Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), and
all other present and future federal, state and local laws, ordinances,
regulations, policies and any other requirements of any governmental agency
(including, without limitation, the United States Department of the Treasury
Office of Foreign Assets Control) addressing, relating to, or attempting to
eliminate, terrorist acts and acts of war, each as hereafter supplemented,
amended or modified from time to time, and the present and future rules,
regulations and guidance documents promulgated under any of the foregoing.

17.                           EVENT OF DEFAULT.

Borrower shall be
in default under this Agreement upon the occurrence of any of the following
events (hereinafter referred to as an “Event of Default”):

(a)                                  Non-Payment.  The failure of Borrower to pay when due any amount
required by the Note, this Agreement or any other Loan Documents

 34
 

which continues,
in the case of monthly interest payments required under the Note, for 20 days
or, in the case of other sums payable under the Note, this Agreement or the
Loan Documents, for 10 days following written demand for payment on Borrower by
Lender.

(b)                                 Insurance.  The failure of Borrower to keep in force any
insurance policy required hereunder or to deliver evidence of its renewal to
Lender and the continuation of such failure for 10 days following written
demand on Borrower by Lender.

(c)                                  Special
Purpose Entity Covenants.  The
failure of Borrower to comply with the provisions of Section 22.

(d)                                 Fraud
or Material Misrepresentation  Fraud
or material misrepresentation by Borrower, Senior Mezz Borrower, Mortgagor, or
Principal or any of their officers, directors or managers, or by any Guarantor
in connection with (i) the application for or creation of the
Indebtedness, (ii) any financial statement, rent roll, or other report or
information provided to Lender during the term of the Indebtedness, or
(iii) any request for Lender’s consent to any proposed action;

(e)                                  Sale,
Encumbrance or Other Indebtedness. 
The taking of any action by Borrower, Senior Mezz Borrower, Mortgagor,
Principal or any other person contrary to the provisions of Section 13(d)
of this Agreement;

(f)                                    Reports
and Documents.  The failure of
Borrower to deliver any notice, report, assignment, certificate, instrument or
other document which Borrower is required to deliver to Lender under any of the
Loan Documents within the twenty (20) days following written demand by Lender
therefor;

(g)                                 Option
Agreement.  The failure of Borrower or
Senior Mezz Borrower to comply with the terms of the Option Agreement with
respect to transfer of the Voss Membership Interests (as defined in the Option
Agreement) upon the exercise of the Purchase Option including but not limited
to Borrower’s or Senior Mezz Borrower’s satisfaction of all of the Conditions
to Closing and Closing Deliveries set forth therein.

(h)                                 Other
Breaches under this Agreement. The failure by Borrower to perform any of
its obligations under this Agreement, as and when required, except as
specifically set forth otherwise herein, which continues for a period of 30
days after notice of such failure by Lender to Borrower, if such failure is not
reasonably susceptible of cure within such 30 day period and if Borrower
promptly commences such cure within such 30 day period and diligently

 35
 

prosecutes the
same to completion, then the cure period shall be extended for such period of
time as may be reasonably necessary to effect a cure but in no event shall such
period exceed 90 days;

(i)                                     Other
Breaches Under Other Loan Documents. 
The failure of Borrower, Principal or any Guarantor, indemnitor or
obligor to perform and observe any covenant, obligation, agreement or
undertaking under any Loan Document other than this Agreement following such
notice and/or grace period, if any, as may be provided therein for curing such
failure;

(j)                                     Senior
Loan Documents.  The failure of
Borrower or Senior Mezz Borrower or Mortgagor or any Guarantor to perform and
observe any covenant, obligation, agreement or undertaking under any Senior
Loan Documents following any notice or cure period, if any, as may be provided
therein for curing such failure; or

(k)                                  Bankruptcy
Proceedings.

(1)                                  If
Borrower, Senior Mezz Borrower or Mortgagor shall become insolvent, make a
transfer in fraud of, or a general assignment for the benefit of, creditors, or
admit in writing its inability, generally to pay its debts as they become due;
or

(2)                                  If
Borrower, Senior Mezz Borrower or Mortgagor shall have a receiver, custodian,
liquidator or trustee appointed for all or substantially all of its assets or
for the Project in any proceeding brought by Borrower, Senior Mezz Borrower, Mortgagor
or the Project, or any such receiver or trustee is appointed in any proceeding
brought against Borrower, Senior Mezz Borrower, Mortgagor or the Project and
such appointment is not promptly contested and is not dismissed or discharged
within ninety (90) days after such appointment; or

(3)                                  If
Borrower, Senior Mezz Borrower or Mortgagor shall file a petition under Title
11 of the United States Code as amended or under any similar Federal or state
law or statute; or

(4)                                  If
Borrower, Senior Mezz Borrower or Mortgagor shall have a petition filed against
it commencing an involuntary case under any present or future Federal or state
bankruptcy or similar law and such petition is not dismissed or discharged
within ninety (90) days after the filing thereof; or

(5)                                  If
Borrower, Senior Mezz Borrower or Mortgagor shall request any composition,
rearrangement, liquidation, extension, reorganization

 36
 

or other relief as a debtor under any present or
future Federal or state bankruptcy or similar law now or hereafter existing.

The proceedings or events set forth in this paragraph (j) are
collectively referred to as “Bankruptcy Proceedings”.

18.                           REMEDIES.

(a)                                  Actions
upon Event of Default.  Upon the
occurrence and during the continuance of an Event of Default beyond any
applicable grace and cure period, Lender may, in addition to any other rights
or remedies available to it pursuant to this Agreement and the other Loan
Documents or at law or in equity, take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in the Collateral, including, without limitation, at its option and without
prior notice or demand, declare the unpaid principal balance of the Note and
all accrued but unpaid interest thereon, as well as all other sums owing under
the Loan Documents, immediately due and payable, Lender may make any advances on
the Loan after the happening of any one or more of said Events of Default
without thereby waiving the right to demand payment in full of the Note and
such other amounts and without liability to make any other or further advances.

(b)                                 Lender’s
Right to Perform.  If any Borrower
fails to perform any covenant or obligation contained herein or in the other
Loan Documents and such failure continues for a period of 30 days after written
notice of such failure by Lender to Borrower, or if such failure is not
reasonably susceptible of cure within such 30 day period and if Borrower
promptly commences such cure within such 30 day period and diligently
prosecutes the same to completion, then the cure period shall be extended for
such period of time as may be reasonably necessary to effect a cure but in no
event shall such period exceed 90 days, without in any way limiting Lender’s
right to exercise any of its rights, powers or remedies as provided hereunder,
or under any of the other Loan Documents, Lender may, but shall have no
obligation to, perform, or cause performance of, such covenant or obligation, and
all costs, expenses, liabilities, penalties and fines of Lender reasonably
incurred or paid in connection therewith shall be payable by Borrower to Lender
upon demand and if not paid shall be added to the Indebtedness (and to the
extent permitted under applicable laws, secured by the Pledge Agreement and
other Loan Documents) and shall bear interest from the date expended at the
Default Interest Rate.  Notwithstanding
the foregoing, Lender shall have no obligation to send notice to any Borrower
of any such failure.

 37
 

(c)                                  Appointment
of Lender as Attorney-in-Fact. 
Borrower hereby irrevocably, unconditionally and presently constitutes
Lender as Borrower’s attorney-in-fact, with full power of substitution, to be
exercised by Lender only upon the occurrence and during the continuation of an
Event of Default, to exercise its rights under the Pledge Agreement (in its own
name or the name of a designee) for purposes of preserving and protecting the
Project or the collateral pledged under the Pledge Agreement and, as Lender in
its sole discretion deems necessary or proper, to execute, acknowledge (when
appropriate) and deliver all instruments and documents in the name of Borrower
which may be necessary or desirable in order to do any and every act which
Borrower might do on its own behalf in the performance of its obligations
hereunder.  This power of attorney is a
power coupled with an interest and is irrevocable.

(d)                                 Cross-Default
to Note, Pledge Agreement and Other Loan Documents.  At the option of Lender, any Event of Default
by Borrower under this Agreement shall constitute a default under the Note, the
Pledge Agreement or any of the other Loan Documents to the same extent as
though the Note had by its own terms become due and payable at maturity and
payment thereof had been refused, and in such event Lender may, without
liability to Borrower, assert and exercise any and all rights and remedies
provided for herein or in the Note, the Pledge Agreement or any of the other
Loan Documents or otherwise as may be provided by law.  Such rights and remedies may be asserted
concurrently or successively from time to time (either before or after
commencement of foreclosure proceedings or before or after the exercise of any
other remedy of Lender) until the Note, including interest thereon, and all of
the Indebtedness of Borrower to Lender under this Agreement and the other Loan
Documents, have been paid in full.

(e)                                  Recourse
Limitations.  Borrower’s liability in
connection with this Agreement, the Note and the other Loan Documents
(including Borrower’s liability for all amounts due hereunder or thereunder) is
collectible only from the Collateral against which a security interest is
created by the Pledge Agreement.  In no
case will any person who holds a direct or indirect ownership interest in
Borrower, or any officer, director, manager, trustee, employee, agent or
affiliate of Borrower or any such direct or indirect owner, have any
responsibility for Borrower’s obligations in connection with this Agreement,
the Note and the other Loan Documents (including Borrower’s liability for any
amounts due hereunder or thereunder); provided, however, that nothing in this
Section 18(e) limits the liability of any person under a guaranty or other
agreement executed by such person.

 38

 

19.         TRANSFER OF LOAN; LOAN
SERVICER.

(a)                                  Lender’s
Right to Transfer  Borrower hereby
acknowledges that Lender shall have the right to transfer, assign or sell the
Loan Documents, or grant participation interests in all or any portion of the
Loan, in such manner and to such entities as Lender in its sole and absolute
discretion shall select.

(b)                                 Loan
Servicer.  At the option of Lender,
the Loan may be serviced by a servicer selected by Lender and Lender may
delegate all or any portion of its responsibilities under this Agreement and
the other Loan Documents to such servicer pursuant to a servicing agreement
between Lender and such servicer.  A sale
may result in a change of the Loan servicer. 
There also may be one or more changes of Loan servicer unrelated to a
sale of the Note.  If there is a change
of Loan servicer, Borrower will be given notice of the change.

(c)                                  Dissemination
of Information.  Lender may forward
to each purchaser, transferee, assignee, or servicer of, and each participant
or investor in, the Loan (collectively, the “Investor”),
any governmental regulators or others as may be required by securities law, all
documents and information which Lender now has or may hereafter acquire
relating to the Indebtedness and to Borrower, Senior Mezz Borrower, Mortgagor
and Principal, including financial statements, whether furnished by Borrower or
otherwise, as Lender determines necessary or desirable.  Borrower irrevocably waives any and all
rights it may have under applicable Laws to prohibit such disclosure.

20.         LENDER’S EXPENSES; RIGHTS
OF LENDER.  Borrower shall
promptly pay to Lender, upon demand, with interest thereon from the date of
demand at the Default Interest Rate, reasonable attorneys’ fees and all other
reasonable costs and expenses paid or incurred by Lender in enforcing or
exercising its rights or remedies created by, connected with or provided for in
this Agreement or any of the other Loan Documents following an Event of Default,
and payment thereof shall be secured by the Pledge Agreement.

21.         MISCELLANEOUS.

(a)                      Notices.
All notices, demands and other communications (“Notice”)
under or concerning this Agreement shall be in writing.  Each Notice shall be addressed to the
intended recipient at its address set forth below, and a Notice shall be deemed
given on the earliest to occur of (1) the date when the Notice is received by
the addressee; (2) the first Business Day after the Notice is delivered to a
recognized overnight courier service, with arrangements made for payment of
charges for next Business Day delivery; or (3) the third Business

  
 39
 

 

Day after the Notice is
deposited in the United States mail with postage prepaid, certified mail,
return receipt requested.

	
  

  	
  If to Lender:

  	
  Behringer Harvard Alexan Voss, LLC

  
	
   

  	
   

  	
  15601 Dallas
  Parkway, Suite 600

  
	
   

  	
   

  	
  Addison, Texas
  75001

  
	
   

  	
   

  	
  Attention: Chief
  Legal Officer

  
	
   

  	
   

  	
  Facsimile: (214)
  655-1610

  
	
   

  	
   

  	
   

  
	
   

  	
  with copy to:

  	
  Powell & Coleman, L.L.P.

  
	
   

  	
   

  	
  8080 North
  Central Expressway, Suite 1380

  
	
   

  	
   

  	
  Dallas, Texas
  75206

  
	
   

  	
   

  	
  Attention: Carol
  D. Satterfield

  
	
   

  	
   

  	
  Facsimile: (214)
  373-8768

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Borrower:

  	
  GC 129 VOSS JM LLC

  
	
   

  	
   

  	
  Attention:
  Timothy J. Hogan

  
	
   

  	
   

  	
  2001 Bryan
  Street, Suite 3700

  
	
   

  	
   

  	
  Dallas, Texas
  75201

  
	
   

  	
   

  	
  Facsimile: (214)
  922-8553

  
	
   

  	
   

  	
   

  
	
   

  	
  with copy to:

  	
  Michael K. Ording

  
	
   

  	
   

  	
  Jones Day

  
	
   

  	
   

  	
  325 John H.
  McConnell Blvd., Suite 600

  
	
   

  	
   

  	
  Columbus, Ohio
  43215

  
	
   

  	
   

  	
  Facsimile: (614)
  461-4198

  

 

Any party to this
Agreement may change the address to which notices intended for it are to be
directed by means of notice given to the other party in accordance with this
Section 21(a).  Each party agrees that it
will not refuse or reject delivery of any notice given in accordance with this
Section 21(a), that it will acknowledge, in writing, the receipt of any notice
upon request by the other party and that any notice rejected or refused by it
shall be deemed for purposes of this Section 21(a) to have been received by the
rejecting party on the date so refused or rejected, as conclusively established
by the records of the U.S. Postal Service or the courier service. Any notice
under the Note and any other Loan Document which does not specify how notices
are to be given shall be given in accordance with this Section 21(a).

(b)                                 Waivers.  No delay or omission in exercising any right
or power arising from any default shall be construed as a waiver of such
default or as an acquiescence therein, nor shall any single or partial exercise
thereof preclude any further exercise thereof or the exercise of any other
right or power arising from any default. 
No waiver of

  
 40
 

 

any breach of any
of the covenants or conditions of this Agreement shall be construed to be a
waiver of or an acquiescence in or a consent to any previous or subsequent
breach of the same or of any other condition or covenant.

(c)                                  Lender
Not Partner of Borrower; Borrower in Control.  Neither the execution nor the performance of
any of the Loan Documents by Lender, nor the exercise by the Lender of any of
its rights, privileges or remedies conferred under the Loan Documents or under
applicable law, shall be deemed to render the Lender a partner or a joint
venturer with Borrower, any guarantor of the Loan or any other person, or to
render Borrower an agent of Lender for any purposes.  Nothing contained herein shall characterize or
be deemed to characterize, or be used as a basis for characterizing, Lender as
a “mortgagee-in-possession”.  Lender and
Borrower agree that Mortgagor remains in control of the Project, and that it
determines the business plan for the Project and employment, management,
leasing and operating directions and decisions for the Project.  All of Lender’s rights, and actions taken by
Lender as provided or permitted, in or under this Agreement or the other Loan
Documents are for and in its capacity as a secured lender attempting to protect
the collateral security for the Loan and to collect the Indebtedness and any
other amounts owing or outstanding under the Note or the Loan Documents.

(d)                                 No
Third Party.  This Agreement is made
for the sole benefit of Borrower and Lender and Lender’s successors and
assigns, and no other person or persons shall have any rights or remedies under
or by reason of this Agreement or any right to the exercise of any right or
power hereunder or arising from any default, nor shall Lender owe any duty
whatsoever to any claimant for labor performed or materials furnished in
connection with the construction of the improvements to apply any undisbursed
portion of the Loan to the payment of any such claims.

(e)                                  Time
of Essence; Context.  Time is hereby
declared to be of the essence of this Agreement and of every part hereof.  When the context and construction so require,
all words used in the singular herein shall be deemed to have been used in the
plural and the masculine shall include the feminine and the neuter and vice
versa.

(f)                                    Successors
and Assigns.  This Agreement shall
bind, and the rights granted by this Agreement shall inure to, the respective
successors and assigns of Lender and Borrower. 
However, a Sale or Encumbrance prohibited by Section 13(d) shall be an
Event of Default.

  
 41
 

 

(g)                                 Governing
Jurisdiction.  This Agreement and all
of the other Loan Documents (except as otherwise expressly provided therein
with respect to the enforcement of specific remedies) shall be governed by and
construed in accordance with the substantive law of the State of Texas without
regard to the application of choice of law principles.

(h)                                 SUBMISSION
TO JURISDICTION/SERVICE OF PROCESS. 
BORROWER AND LENDER EACH HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE STATE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY, TEXAS FOR
THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED
UPON THIS AGREEMENT, THE SUBJECT MATTER HEREOF, ANY OTHER LOAN DOCUMENT AND THE
SUBJECT MATTER THEREOF, OR THE LOAN. 
EACH OF BORROWER AND LENDER TO THE EXTENT PERMITTED BY APPLICABLE LAW
(A) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN THE
ABOVE-NAMED COURTS ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE
JURISDICTION OF SUCH COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM
ATTACHMENT OR EXECUTION BY ANY SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS  AGREEMENT,
THE SUBJECT MATTER HEREOF, THE OTHER LOAN DOCUMENTS, THE SUBJECT MATTER THEREOF,
OR THE LOAN (AS APPLICABLE) MAY NOT BE ENFORCED IN OR BY SUCH COURT, (B) HEREBY
WAIVES THE RIGHT TO REMOVE ANY SUCH ACTION, SUIT OR PROCEEDING INSTITUTED IN
STATE COURT TO FEDERAL COURT, OR TO REMAND AN ACTION INSTITUTED IN FEDERAL
COURT TO STATE COURT AND (C) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH
ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS
THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME SUBJECT MATTER.  BORROWER AND LENDER EACH HEREBY CONSENTS TO
SERVICE OF PROCESS BY MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN TO
IT PURSUANT TO SECTION 21(a) HEREOF, BUT ANY SUCH SERVICE WILL BE EFFECTIVE
ONLY WHEN RECEIVED AT SUCH ADDRESS. 
BORROWER AND LENDER EACH AGREES THAT ITS SUBMISSION TO JURISDICTION AND
CONSENT TO

  
 42
 

 

SERVICE OF PROCESS
BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE OTHER PARTY.  FINAL JUDGMENT AGAINST A PARTY IN ANY SUCH
ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION (X) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A
CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF
THE AMOUNT OF INDEBTEDNESS OR LIABILITY OF THE PARTY THEREIN DESCRIBED, OR (Y)
IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER
JURISDICTION.

(i)                                     WAIVER
WITH RESPECT TO DAMAGES.  BORROWER
ACKNOWLEDGES THAT LENDER DOES NOT HAVE ANY FIDUCIARY RELATIONSHIP WITH, OR
FIDUCIARY DUTY TO, BORROWER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, AND THE RELATIONSHIP BETWEEN LENDER AND BORROWER,
IN CONNECTION HEREWITH AND THEREWITH, IS SOLELY THAT OF DEBTOR AND CREDITOR.  TO THE EXTENT PERMITTED BY APPLICABLE LAW,
BORROWER SHALL NOT ASSERT, AND BORROWER HEREBY WAIVES, ANY CLAIMS AGAINST
LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT,
ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

(j)                                     Entire
Agreement.  This Agreement and all of
the other Loan Documents constitute the entire understanding between the
parties hereto with respect to the subject matter hereof, superseding all prior
written or oral understandings, and may not be modified, amended or terminated
except by a written agreement signed by each of the parties hereto or thereto
that is to be bound by the modification, amendment or termination.  Notwithstanding the foregoing, the provisions
of this Agreement are not intended to supersede the provisions of the Pledge
Agreement, but shall be construed as supplemental thereto.  Borrower and Lender each hereby acknowledges
that this Agreement and the other Loan Documents accurately reflect the
agreements and understandings of the parties hereto with respect to the subject
matter hereof and hereby waives any claims against the other which it may now
have or may hereafter

  
 43
 

 

acquire to the
effect that the actual agreements and understandings of the parties hereto with
respect to the subject matter hereof may not be accurately set forth in this
Agreement or such other Loan Documents.

(k)                                  Headings.  The various headings of this Agreement are
included for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.

(l)                                     Severability.  Each provision of this Agreement shall be
interpreted so as to be effective and valid under applicable law, but if any
such provision shall in any respect be ineffective or invalid under such law,
such ineffectiveness or invalidity shall not affect the remainder of such
provision or the remaining provisions of this Agreement.

(m)                               Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute but one and the same document.

(n)                                 WAIVER
OF JURY TRIAL.  BORROWER AND LENDER
EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION
WITH THIS LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER
STATEMENTS OR ACTIONS OF THE LENDER OR BORROWER RELATED THERETO.  BORROWER AND LENDER EACH ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE OTHER TO ENTER INTO THIS AGREEMENT
AND EACH OTHER LOAN DOCUMENT, AND THAT THIS WAIVER SHALL BE EFFECTIVE AS TO
EACH OF THE OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

(o)                                 Sole
and Absolute Discretion.  Any option,
consent, approval, or discretion or similar right of Lender set forth in this
Agreement or any of the other Loan Documents may be exercised by Lender in its
sole, absolute and unreviewable discretion, unless the provisions of this
Agreement or the other Loan Documents specifically requires a different
standard.

(p)                                 Straight
Debt Harbor.  It is the intent of
Borrower and Lender that the Loan shall be treated as a security that satisfies
the requirements of Section 856(m)(1)(A) and Section 856(m)(2) of the Code (the
“Straight Debt Safe Harbor”).  Accordingly, notwithstanding any indication
herein to the contrary, the parties hereto agree that the terms of the Loan
shall be interpreted in such a manner that the Loan

  
 44
 

 

satisfies the
Straight Debt Safe Harbor for so long as it is owned by Lender; and the terms
of the Note shall be applied such that the Note has a constant effective yield
to maturity, as determined under Section 1272 of the Code, at a fixed rate over
the entire term of the Note equal to the Interest Rate (as defined in the
Note); provided, however, that such contraction shall not alter the dates of
the principal or interest payments (described in Section 1.1 of the Note) or
the amounts of the principal or interest payments required to be paid on an
interest payment date (described in Section 1.1. of the Note) prior to the
Maturity Date or earlier prepayment date.

22.         SPECIAL REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BORROWER. Borrower shall do all things
necessary to preserve the existence of Borrower, Senior Mezz Borrower and
Mortgagor each as a separate Special Purpose Bankruptcy Remote Entity unless
Lender otherwise consents, in its sole discretion, in writing.  Borrower covenants and agrees that with
respect to Borrower, Senior Mezz Borrower and Mortgagor, until payment in full
of the Indebtedness, it will not do or permit Mortgagor or Senior Mezz Borrower
to do, directly or indirectly, any of the following unless Lender consents
thereto, in its sole discretion, in writing. 
A “Special Purpose Bankruptcy Remote Entity”
means a corporation, limited partnership or limited liability company which
shall not:

(a)                                  engage
in any business or activity other than the ownership, construction, operation
and maintenance, in each case directly or indirectly, of the Property and the
Project (in case of Mortgagor) or the Equity Interests in Mortgagor or Senior
Mezz Borrower (in case of Senior Mezz Borrower or Borrower), and activities
incidental thereto;

(b)                                 acquire
or own any material assets other than (i) the Equity Interests, (ii) the
Property and the Project, and (iii) such incidental personal property as may be
necessary for the operation of the Project or as may arise out of the other
activities of Borrower, Senior Mezz Borrower or the Mortgagor;

(c)                                  merge
into or consolidate with any person, or dissolve, terminate or liquidate, or
transfer or otherwise dispose of all or substantially all of its assets or
change its legal structure;

(d)                                 fail
to preserve its existence as a person duly organized, validly existing and in
good standing (if applicable) under the laws of the jurisdiction of its
organization or formation, or amend, modify, or terminate the provisions of its
organizational documents if such amendment, modification, or termination would
adversely affect the ability of such Person to perform its obligations
hereunder or under the other Loan Documents or would affect any other clause of
this Section 22;

  
 45
 

 

(e)                                  own
any subsidiary (except, in the case of Borrower, the Senior Mezz Borrower or in
the case of Senior Mezz Borrower, Mortgagor) or make any investment in any
person (except, in the case of Borrower, the Senior Mezz Borrower or in the
case of Senior Mezz Borrower, Mortgagor);

(f)                                    commingle
its assets with the assets of any of its general partners, members,
shareholders, affiliates, principals or of any other Person in such a manner
that it will be costly or difficult segregate, ascertain or identify its
individual assets from those of any general partner, member, shareholder,
principal or Affiliate of Borrower, Senior Mezz Borrower or Mortgagor or any
other Person;

(g)                                 incur
any debt, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than (i) the Senior Loan, the Senior Mezz Loan and this
Loan, (ii) obligations under interest rate hedging arrangements related to the
Senior Loan and (iii) trade and operational indebtedness incurred in the
ordinary course of business (including construction and operation of the
Project) or for its administrative functions;

(h)                                 fail
to maintain its records, books of account and bank accounts separate and apart
from those of its general partners, members, shareholders, principals and
Affiliates and any other Person;

(i)                                     enter
into any contract or agreement with any general partner, member, shareholder,
principal or Affiliate of Borrower, Senior Mezz Borrower or Mortgagor except
upon terms and conditions that are intrinsically fair and substantially similar
to those that would be available on an arms-length basis with third parties
other than any general partner, member, shareholder, principal or Affiliate of
Borrower, Senior Mezz Borrower or Mortgagor;

(j)                                     seek
the dissolution or winding up of Borrower, Senior Mezz Borrower or Mortgagor;

(k)                                  maintain
its assets in such a manner that it will be costly or difficult to segregate,
ascertain or identify its individual assets from those of any general partner,
member, shareholder, principal or Affiliate of Borrower, Mortgagor or Senior
Mezz Borrower or any other Person.

(l)                                     hold
itself out to be responsible for the debts of another person, except through
endorsement of negotiable instruments in the ordinary course of collection;

(m)                               make
any loans or advances to any third party, including any general partner, member,
shareholder, principal or Affiliate of Borrower, Senior Mezz Borrower or
Mortgagor (except, in the case of

  
 46
 

 

Borrower, to the Senior
Mezz Borrower or in the case of Senior Mezz Borrower to Mortgagor);

(n)                                 fail
to file its own tax returns, if any, as may be required under applicable law,
to the extent that Borrower, Senior Mezz Borrower or Mortgagor are (1) not part
of a consolidated group filing a consolidated return or returns or (2) not
treated as a “disregarded entity” for tax purposes not required to file tax
returns under applicable law; or

(o)                                 fail
either to hold itself out to the public as a legal person separate and distinct
from any other person or to conduct its business solely in its own name if the
result is (a) to mislead others as to the identity of the person with which
such other party is transacting business; or (b) to suggest that it is
responsible for the debts of any third party (including any general partner,
principal or Affiliate of Borrower, Senior Mezz Borrower or Mortgagor,
provided, however, Borrower, Senior Mezz Borrower or Mortgagor may hold itself
out as doing business under the “Trammell Crow Residential” name.

In addition to the
foregoing, Borrower shall have at least one independent manager who is provided
by a nationally recognized company that provides professional independent
directors and who shall not be at the time of initial appointment, and may not
have been during the preceding five years (i) a stockholder, director, officer,
employee, partner, member, attorney or counsel of Mortgagor or an Affiliate of
Mortgagor, Borrower or Senior Mezz Borrower, (ii) a customer, supplier (other
than a supplier of registered agent or registered office service) or other
Person who derives any of its purchases or revenues from its activities with
Mortgagor or Borrower or Senior Mezz Borrower, (iii) a Person or other entity
controlling or under common control with any such stockholder, director,
officer employee, partner, customer, supplier (other than a supplier of
registered agent or registered office service) or other Person or (iv) a member
of the immediate family of any such stockholder, director, officer, employee,
partner, customer, supplier or other Person (the “Independent
Director”).  At any time while
the Senior Loan, the Senior Mezz Loan or this Loan is outstanding, the consent
of the Independent Director should be required to: (i) file, consent to the
filing of, or join in any filing of, a bankruptcy or insolvency petition; (ii)
dissolve, liquidate, merge or consolidate; (iii) engage in any other business
activity; and (iv) amend the articles of organization or limited liability
agreement.

23.           RESTRUCTURING TO ONE PHASE.  Lender and Borrower recognize that
contingencies remain to the acquisition of the Hart Parcel, including
termination of a lease of the existing building located on the Hart
Parcel.  Borrower shall cause Mortgagor
to use its best efforts to obtain the termination of the Hart Lease (as defined
in the Senior Loan Documents) and to complete the purchase of the Hart
Parcel.  If Mortgagor has not acquired
the Hart Parcel by December 22, 2006, Lender and Borrower shall restructure the
Loan to provide for (i) development of a 222-unit Project on the La Scala
Parcel only, using the budget attached as Exhibit “B-1” to this
Agreement, and (ii) a decrease in the Loan Amount to $3,795,305.  In the event that the Hart Parcel is not
acquired, the amount of the Senior Loan will not exceed $23,283,913.  In such case, Lender and Borrower, each
acting in good faith, shall negotiate

  
 47
 

 

modifications to this Agreement and the other Loan
Documents to redefine the Project, to adjust the Loan Amount and to reflect
related changes.

 

[Signatures Follow
on Next Page]

 

  
 48

 

IN WITNESS
WHEREOF, the parties hereto have duly executed and delivered this Agreement as
of the day and year first above written.

	
  

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GC 129 VOSS JM LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  GC 123 Voss Limited Partnership,

  a Delaware limited partnership,

  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  GC 112 Development 2006 GP LLC,

  a Delaware limited liability company,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD ALEXAN VOSS, LLC,

  
	
   

  	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
													

 

 

JOINDER

 

The undersigned
have duly executed and delivered this Agreement as of the day and year first above
written for the purpose of agreeing and consenting to the provisions of Section
22 of the Agreement.

 

	
  

  	
  MORTGAGOR:

  
	
   

  	
   

  
	
   

  	
  GC 127 VOSS HOLDINGS LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  GC 128 Voss SM LLC,

  a Delaware limited liability company,

  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  GC 129 Voss JM LLC,

  a Delaware limited liability company,

  its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GC 123 Voss Limited Partnership,

  a Delaware limited partnership,

  its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GC 112 Development 2006 GP LLC,

  a Delaware limited liability company,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Timothy J. Hogan, Vice President

  

 

 

 

	
  

  	
  SENIOR MEZZ BORROWER

  
	
   

  	
   

  
	
   

  	
  GC 128 VOSS SM LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  GC 129 Voss JM LLC,

  a Delaware limited liability company,

  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  GC 123 Voss Limited Partnership,

  a Delaware limited partnership,

  its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  GC 112 Development 2006 GP LLC,

  a Delaware limited liability company,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Timothy J. Hogan, Vice President

  

 

EXHIBIT A-1

 

THE LA SCALA PARCEL

FIELD NOTE DESCRIPTION OF 3.234 ACRES (140,890 SQUARE
FEET) OF LAND IN THE JOHN D. TAYLOR SURVEY, ABSTRACT No. 72, BEING ALL OF
UNRESTRICTED RESERVE “A”, IN THE PLAT OF “WESTHEIMER — VOSS APARTMENTS” AS
RECORDED IN VOLUME 109, PAGE 51, OF THE HARRIS COUNTY MAP RECORDS, ALL BEING
LOCATED IN THE CITY OF HOUSTON, HARRIS COUNTY, TEXAS AND BEING MORE
PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

BEGINNING at a 5/8-inch iron rod with cap set for the
intersection point of the west right-of-way line of South Voss Road (100-feet
wide) and the north right-of-way line of Burgoyne Road (60-feet wide) and being
the southeast corner of both Unrestricted Reserve “A” and the herein described
tract, from said point a found 5/8-inch iron rod bears N 03°27’
W, a distance of 0.39 feet;

THENCE, S 87°31’24”
W, along the north right-of-way line of Burgoyne Road, common with the south
line of both Unrestricted Reserve “A” and the herein described tract, a
distance of 205.00 feet to a PK nail with shiner set for a point for a curve to
the right;

THENCE, along the aforementioned curve to the right,
being the north right-of-way line of Burgoyne Road, common with the south line
of both Unrestricted Reserve “A” and the herein described tract, having a
radius of 300.00 feet, a delta of 33°33’26”,
an arc length of 175.71 feet, a chord bearing N 75°41’53”
W, and a chord distance of 173.20 feet to PK nail with shiner set for a point
for a reverse curve to the left;

THENCE, along the aforementioned reverse curve to the
left, being the north right-of-way line of Burgoyne Road, common with the south
line of both Unrestricted Reserve “A” and the herein described tract, having a
radius of 60.00 feet, a delta of 123°33’26”,
an arc length of 129.39 feet, a chord bearing S 59°18’07”
W, and a chord distance of 105.74 feet to PK nail with shiner set for the
Southwest corner of both Unrestricted Reserve “A” and the herein described
tract;

THENCE, departing the north right-of-way line of
Burgoyne Road, N 02°28’36” W, along the
west line of both Unrestricted Reserve “A” and the herein described tract, a
distance of 319.54 feet to a 5/8-inch iron rod found for the northwest corner
of both

Unrestricted Reserve “A” and the herein described
tract, said point being on the south line of the plat of “Hammersmith, Section
Two” as recorded in Volume 122, Page 68, of the Harris County Map Records;

THENCE, N 87°31’24”
E, along the south line of “Hammersmith Section Two”, common with the north
line of both Unrestricted Reserve ‘‘A” and the herein described tract, a
distance of 464.00 feet to a 5/8-inch iron rod with cap set for the northeast
corner of both Unrestricted Reserve “A” and the herein described tract, said
point also being on the west right-of-way line of South Voss Road;

THENCE, S 02°28’36”
E, along the west right-of-way line of South Voss Road, common with the east
line of both Unrestricted Reserve “A” and the herein described tract, a
distance of 319.54 feet to the POINT OF BEGINNING, and containing 3.234 acres
(140,890 square feet) of land.

EXHIBIT
A-2

THE
HART PARCEL

FIELD NOTE DESCRIPTION OF 2.609 ACRES (113,647 SQUARE
FEET) OF LAND IN THE JOHN D. TAYLOR SURVEY, ABSTRACT No. 72, AND BEING THAT
SAME TRACT OF LAND CONVEYED TO HART RESOURCE CENTER, L.P., AS RECORDED UNDER
CLERK’S FILE No. T868460 OF THE HARRIS COUNTY OFFICIAL PUBLIC RECORDS OF REAL
PROPERTY, AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

BEGINNING at a 1-inch iron pipe with cap found for the
southwest corner of the herein described tract, common with the northwest
corner of a called 1.4675 acre tract conveyed to Private Mini Storage Group 1,
Ltd., as recorded under Clerk’s File No. S323297, of the Harris County Official
Public Records of Real Property, and being on the east right-of-way line of S.
Voss Road (100-feet wide); from said corner, the northerly most point of a
cutback for the intersection of the east right-of-way of S. Voss Road and the
north right-of-way line of Westheimer Road (also known as Farm-to-Market
Highway 1093; 120-feet wide) bears S 02°28’39” E, a called distance of 1,715.91
feet;

THENCE, N 02°28’36” W, along the east right-of-way of
S. Voss Road, common with the west line of the herein described tract, a
distance of 258.00 feet to a PK Nail found in the sidewalk for the northwest
corner of the herein described tract, said point also being common with the
southwest corner of a called 0.1719 acre tract conveyed to Automated Carwash
Systems, Inc., as recorded under Clerk’s File No. K556204, of the Harris County
Official Public Records of Real Property;

THENCE, N 87°31’24” E, along the north line of the
herein described tract, common with the south line of the called 0.1719 acre
tract, a distance of 440.38 feet to a 5/8-inch iron rod found under a brick
wall slab for the northeast corner of the herein described tract, common with
the southeast corner of the aforementioned 0.1719 acre tract, and being on the
west line of Briarwest Townhouse Condominiums, as recorded in Volume 12, Page
93, of the Harris County Condominium Records;

THENCE, S 02°31’36” E, along the east line of the
herein described tract, common with the west line of the aforementioned
Briarwest Townhouse Condominiums, a distance of 258.00 feet to a 5/8-inch iron
rod with cap set for the southeast corner of the herein described tract, common
with northeast corner of the

aforementioned 1.4675 acre tract, from said point, a
found 5/8-inch iron rod bears N 87° 31’ E, a distance of 0.72 feet;

THENCE, S 87°31’24 W, along the south line of the
herein described tract, common with the north line of the aforementioned 1.4675
acre tract, a distance of 440.61 feet to the POINT OF BEGINNING, and containing
2.609 acres (113, 647 square feet) of land.

EXHIBIT
B-1

LA SCALA
DEVELOPMENT BUDGET

	
  CAPITALIZED 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land
  & Improvements

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  49,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land

  	
   

  	
  7,351,304

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Standard Site
  Development

  	
   

  	
  1,650,470

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  9,050,941

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real
  Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other Hard
  Costs & Contingency

  	
   

  	
  15,533,221

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Legal

  	
   

  	
  100,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Closing Costs

  	
   

  	
  185,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Fees

  	
   

  	
  200,600

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Arch &
  Engineering

  	
   

  	
  750,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  49,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  716,865

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing Fees

  	
   

  	
  352,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Costs &
  Contingency

  	
   

  	
  175,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  141,501

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  18,203,354

  	
   

  	
   

  	
   

  
	
  Total
  Capitalized to Real Property

  	
   

  	
   

  	
   

  	
  27,254,295

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Personal
  Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  49,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Appliances

  	
   

  	
  383,950

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing

  	
   

  	
  470,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  903,117

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  28,157,411

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  94,499

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dev Allowance

  	
   

  	
  1,779,286

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  524,021

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing
  Brochures

  	
   

  	
  30,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-Leasing

  	
   

  	
  200,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Op Deficits

  	
   

  	
  260,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
  2,877,806

  	
   

  	
  2,877,806

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  31,045,217

  	
   

  	
  31,045,217

  	
   

  

 

EXHIBIT
B-2

HART
DEVELOPMENT BUDGET

	
  CAPITALIZED 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land & Improvements

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  34,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land

  	
   

  	
  6,225,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Standard Site
  Development

  	
   

  	
  1,500,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  7,759,167

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All other Hard Costs
  & Contingency

  	
   

  	
  9,940,351

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Legal

  	
   

  	
  50,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Closing Costs

  	
   

  	
  115,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Fees

  	
   

  	
  139,400

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Arch & Engineering

  	
   

  	
  350,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  34,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  543,002

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing Fees

  	
   

  	
  248,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Costs &
  Contingency

  	
   

  	
  50,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  101,680

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  11,571,600

  	
   

  	
   

  	
   

  
	
  Total Capitalized to
  Real Property

  	
   

  	
   

  	
   

  	
  19,330,767

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Personal Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GC Fee

  	
   

  	
  34,167

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Appliances

  	
   

  	
  272,550

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing

  	
   

  	
  188,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  494,717

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  19,825,483

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  62,320

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dev Allowance

  	
   

  	
  1,264,555

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  406,602

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing Brochures

  	
   

  	
  12,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pre-Leasing

  	
   

  	
  50,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Op Deficits

  	
   

  	
  148,578

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL NON-CAPITALIZED

  	
   

  	
   

  	
   

  	
  1,944,055

  	
   

  	
  1,944,055

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  21,769,538

  	
   

  	
  21,769,538

  	
   

  

 

EXHIBIT C

[DRAW REQUEST]

(BORROWER’S
LETTERHEAD)

DRAW REQUEST NO.                                      

TO:  BEHRINGER HARVARD ALEXAN VOSS, LLC ( the “Lender”)

	
  DATE

  	
   

  
	
  PROJECT

  	
  ALEXAN VOSS

  
	
  LOCATION

  	
  HOUSTON, TEXAS

  
	
  BORROWER

  	
  GC 129 VOSS JM, LLC, a Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  FOR

  PERIOD

  ENDING

  	
   

  

 

In accordance with the Junior Mezzanine Loan Agreement in the amount of
$               
dated                ,
among Borrower, and the Lender as defined therein, Borrower requests that $               
be advanced from Loan proceeds.  The
proceeds should be credited to the account of                                   ,
Account No.                ,
at                                          .

 

	
  1. 

  	
   

  	
  CURRENT DRAW REQUEST FOR HARD COSTS

  	
   

  	
  $

  	
   

  
	
  2.

  	
   

  	
  CURRENT DRAW REQUEST FOR SOFT COSTS

  	
   

  	
  $

  	
   

  
	
  3.

  	
   

  	
  TOTAL DRAW REQUEST

  	
   

  	
  $

  	
   

  

 

	
  

  	
   

  	
  AUTHORIZED SIGNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated:

  	
   

  	
   

  
					

 

EXHIBIT D

 

VOSS
OWNERSHIP CHART

 

EXHIBIT E

 

PENDING ACTIONS AT
LAW

None.

EXHIBIT F

 

VIOLATIONS OF
PROPERTY AGREEMENTS

None.

EXHIBIT G

 

LEASES

La Scala Parcel

Please see attached Rent Roll.

Hart Parcel

Retail Center Lease, dated July 26, 1999

between Hart Resources Center LP and

Hart Galleries, Inc.

JUNIOR MEZZANINE LOAN
AGREEMENT

 

BY

AND BETWEEN

 

GC 129 Voss JM LLC

(“Borrower”)

 

AND

 

BEHRINGER HARVARD ALEXAN
VOSS, LLC

(“Lender”)

TABLE OF CONTENTS

 

	
  1.

  	
  RECITALS

  	
   

  	
  2

  
	
  2.

  	
  DEFINITIONS

  	
   

  	
  2

  
	
  3.

  	
  THE LOAN; DISBURSEMENT OF LOAN

  	
   

  	
  7

  
	
   

  	
  (a)

  	
  Loan

  	
   

  	
  7

  
	
   

  	
  (b)

  	
  Loan Disbursements

  	
   

  	
  7

  
	
  4.

  	
  INTEREST PAYMENTS; NO USURY, LOAN COMMITMENT FEE;
  PREPAYMENT; MATURITY; REPAYMENT

  	
   

  	
  8

  
	
   

  	
  (a)

  	
  Interest

  	
   

  	
  8

  
	
   

  	
  (b)

  	
  No Usury

  	
   

  	
  8

  
	
   

  	
  (c)

  	
  Loan Commitment Fee

  	
   

  	
  9

  
	
   

  	
  (d)

  	
  Prepayment

  	
   

  	
  9

  
	
   

  	
  (e)

  	
  Maturity Date

  	
   

  	
  9

  
	
  5.

  	
  SECURITY FOR LOAN; GUARANTY

  	
   

  	
  10

  
	
   

  	
  (a)

  	
  Pledge Agreement

  	
   

  	
  10

  
	
   

  	
  (b)

  	
  Other Loan Documents

  	
   

  	
  10

  
	
   

  	
  (c)

  	
  Completion Guaranty

  	
   

  	
  10

  
	
  6.

  	
  CONDITIONS PRECEDENT TO CLOSING OF THE LOAN

  	
   

  	
  10

  
	
   

  	
  (a)

  	
  Loan Documents

  	
   

  	
  10

  
	
   

  	
  (b)

  	
  Third Party Agreements

  	
   

  	
  11

  
	
   

  	
  (c)

  	
  Certification

  	
   

  	
  12

  
	
   

  	
  (d)

  	
  Financial Statements

  	
   

  	
  12

  
	
   

  	
  (e)

  	
  Insurance Policies

  	
   

  	
  12

  
	
   

  	
  (f)

  	
  Contracts

  	
   

  	
  12

  
	
   

  	
  (g)

  	
  Plans

  	
   

  	
  12

  
	
   

  	
  (h)

  	
  Budget and Cost Review

  	
   

  	
  12

  
	
   

  	
  (i)

  	
  Leases

  	
   

  	
  12

  
	
   

  	
  (j)

  	
  Title Insurance Policy

  	
   

  	
  13

  
	
   

  	
  (k)

  	
  UCC Policy

  	
   

  	
  13

  
	
   

  	
  (l)

  	
  ALTA Survey

  	
   

  	
  13

  
	
   

  	
  (m)

  	
  Conditional Use Permits and Government Approvals

  	
   

  	
  13

  
	
   

  	
  (n)

  	
  Flood Plain Certification

  	
   

  	
  13

  
	
   

  	
  (o)

  	
  Appraisal

  	
   

  	
  13

  
	
   

  	
  (p)

  	
  Environmental Report

  	
   

  	
  13

  
	
   

  	
  (q)

  	
  Certification of Organizational Documents

  	
   

  	
  13

  
	
   

  	
  (r)

  	
  Legal Opinion

  	
   

  	
  14

  
	
   

  	
  (s)

  	
  UCC Searches

  	
   

  	
  14

  
	
   

  	
  (t)

  	
  Access and Utility Easements

  	
   

  	
  14

  
	
   

  	
  (u)

  	
  Utilities

  	
   

  	
  14

  
	
   

  	
  (v)

  	
  Environmental Disclosure

  	
   

  	
  14

  
	
   

  	
  (w)

  	
  Senior Lender Funding

  	
   

  	
  14

  
	
   

  	
  (y)

  	
  No Default

  	
   

  	
  14

  
	
   

  	
  (z)

  	
  Additional Matters

  	
   

  	
  15

  
	
  7.

  	
  TITLE INSURANCE

  	
   

  	
  15

  

 

  
 i
 

 

	
  

  	
  (a)

  	
  Owner’s Policy of Title Insurance

  	
   

  	
  15

  
	
   

  	
  (b)

  	
  UCC Policy

  	
   

  	
  15

  
	
  8.

  	
  INSURANCE

  	
   

  	
  15

  
	
   

  	
  (a)

  	
  Insurance Requirements

  	
   

  	
  15

  
	
   

  	
  (b)

  	
  Insurance Premiums; Evidence of Renewal

  	
   

  	
  16

  
	
   

  	
  (c)

  	
  Policy Requirements

  	
   

  	
  16

  
	
   

  	
  (d)

  	
  Notice of Casualty

  	
   

  	
  17

  
	
   

  	
  (e)

  	
  Settlement of Claim

  	
   

  	
  17

  
	
   

  	
  (f)

  	
  Application of Insurance Proceeds

  	
   

  	
  17

  
	
  9.

  	
  EMINENT DOMAIN

  	
   

  	
  18

  
	
   

  	
  (a)

  	
  Notice of Condemnation

  	
   

  	
  18

  
	
   

  	
  (b)

  	
  Settlement of Claim

  	
   

  	
  18

  
	
   

  	
  (c)

  	
  Application of Condemnation Awards

  	
   

  	
  18

  
	
   

  	
  (d)

  	
  Continuing Obligation to Repair

  	
   

  	
  18

  
	
   

  	
  (e)

  	
  Lender Not Required to Act

  	
   

  	
  19

  
	
  10.

  	
  RIGHTS OF ACCESS AND INSPECTION

  	
   

  	
  19

  
	
  11.

  	
  EXPENSES

  	
   

  	
  19

  
	
  12.

  	
  FINANCIAL REPORTS, PROPERTY REPORTS AND ANNUAL
  BUDGET

  	
   

  	
  20

  
	
  13.

  	
  GENERAL COVENANTS OF BORROWER

  	
   

  	
  22

  
	
   

  	
  (a)

  	
  Commencement and Completion of Project

  	
   

  	
  22

  
	
   

  	
  (b)

  	
  Lender Approval

  	
   

  	
  22

  
	
   

  	
  (c)

  	
  Operation and Maintenance of Project

  	
   

  	
  23

  
	
   

  	
  (d)

  	
  Restricted Sale and Encumbrance of Project and of
  Borrower Interests; Other Indebtedness

  	
   

  	
  24

  
	
   

  	
  (e)

  	
  General Indemnity

  	
   

  	
  25

  
	
   

  	
  (f)

  	
  Leases

  	
   

  	
  26

  
	
   

  	
  (g)

  	
  Notices

  	
   

  	
  26

  
	
   

  	
  (h)

  	
  Development

  	
   

  	
  27

  
	
   

  	
  (i)

  	
  Management

  	
   

  	
  27

  
	
   

  	
  (j)

  	
  Senior Loan

  	
   

  	
  27

  
	
   

  	
  (j)

  	
  Senior Loan

  	
   

  	
  28

  
	
   

  	
  (k)

  	
  Principal Place of Business; Choice of Law

  	
   

  	
  28

  
	
   

  	
  (l)

  	
  Compliance with Governmental Prohibitions

  	
   

  	
  29

  
	
  14.

  	
  FURTHER ASSURANCES

  	
   

  	
  29

  
	
  15.

  	
  APPRAISALS

  	
   

  	
  29

  
	
  16.

  	
  GENERAL REPRESENTATIONS AND WARRANTIESOF BORROWER

  	
   

  	
  30

  
	
   

  	
  (a)

  	
  Organization; Corporate Powers; Authorization of
  Borrowing

  	
   

  	
  30

  
	
   

  	
  (b)

  	
  Title to Property; Matters Affecting Property

  	
   

  	
  31

  
	
   

  	
  (c)

  	
  Financial Statements

  	
   

  	
  33

  
	
   

  	
  (d)

  	
  Budget Projections

  	
   

  	
  33

  
	
   

  	
  (e)

  	
  No Loan Broker

  	
   

  	
  33

  
	
   

  	
  (f)

  	
  No Default

  	
   

  	
  33

  
	
   

  	
  (g)

  	
  Solvency

  	
   

  	
  34

  
	
   

  	
  (h)

  	
  Violations of Governmental Prohibitions

  	
   

  	
  34

  
	
  17.

  	
  EVENT OF DEFAULT

  	
   

  	
  34

  
	
   

  	
  (a)

  	
  Non-Payment

  	
   

  	
  34

  

 

  
 ii
 

 

	
  

  	
  (b)

  	
  Insurance

  	
   

  	
  35

  
	
   

  	
  (c)

  	
  Special Purpose Entity Covenants

  	
   

  	
  35

  
	
   

  	
  (d)

  	
  Fraud or Material Misrepresentation

  	
   

  	
  35

  
	
   

  	
  (e)

  	
  Sale, Encumbrance or Other Indebtedness

  	
   

  	
  35

  
	
   

  	
  (f)

  	
  Reports and Documents

  	
   

  	
  35

  
	
   

  	
  (h)

  	
  Other Breaches under this Agreement

  	
   

  	
  35

  
	
   

  	
  (i)

  	
  Other Breaches Under Other Loan Documents

  	
   

  	
  36

  
	
   

  	
  (j)

  	
  Senior Loan Documents

  	
   

  	
  36

  
	
   

  	
  (k)

  	
  Bankruptcy Proceedings

  	
   

  	
  36

  
	
  18.

  	
  REMEDIES

  	
   

  	
  37

  
	
   

  	
  (a)

  	
  Actions upon Event of Default

  	
   

  	
  37

  
	
   

  	
  (b)

  	
  Lender’s Right to Perform

  	
   

  	
  37

  
	
   

  	
  (c)

  	
  Appointment of Lender as Attorney-in-Fact

  	
   

  	
  38

  
	
   

  	
  (d)

  	
  Cross-Default to Note, Pledge Agreement and Other
  Loan Documents

  	
   

  	
  38

  
	
   

  	
  (e)

  	
  Recourse Limitations

  	
   

  	
  38

  
	
  19.

  	
  TRANSFER OF LOAN; LOAN SERVICER

  	
   

  	
  39

  
	
   

  	
  (a)

  	
  Lender’s Right to Transfer

  	
   

  	
  39

  
	
   

  	
  (b)

  	
  Loan Servicer

  	
   

  	
  39

  
	
   

  	
  (c)

  	
  Dissemination of Information

  	
   

  	
  39

  
	
  20.

  	
  LENDER’S EXPENSES; RIGHTS OF LENDER

  	
   

  	
  39

  
	
  21.

  	
  MISCELLANEOUS

  	
   

  	
  39

  
	
   

  	
  (a)

  	
  Notices

  	
   

  	
  39

  
	
   

  	
  (b)

  	
  Waivers

  	
   

  	
  40

  
	
   

  	
  (c)

  	
  Lender Not Partner of Borrower; Borrower in Control

  	
   

  	
  41

  
	
   

  	
  (d)

  	
  No Third Party

  	
   

  	
  41

  
	
   

  	
  (e)

  	
  Time of Essence; Context

  	
   

  	
  41

  
	
   

  	
  (f)

  	
  Successors and Assigns

  	
   

  	
  41

  
	
   

  	
  (g)

  	
  Governing Jurisdiction

  	
   

  	
  42

  
	
   

  	
  (h)

  	
  SUBMISSION TO JURISDICTION/SERVICE OF PROCESS

  	
   

  	
  42

  
	
   

  	
  (i)

  	
  WAIVER WITH RESPECT TO DAMAGES

  	
   

  	
  43

  
	
   

  	
  (j)

  	
  Entire Agreement

  	
   

  	
  43

  
	
   

  	
  (k)

  	
  Headings

  	
   

  	
  44

  
	
   

  	
  (l)

  	
  Severability

  	
   

  	
  44

  
	
   

  	
  (m)

  	
  Counterparts

  	
   

  	
  44

  
	
   

  	
  (n)

  	
  Waiver of Jury Trial

  	
   

  	
  44

  
	
   

  	
  (o)

  	
  Sole and Absolute Discretion

  	
   

  	
  44

  
	
   

  	
  (p)

  	
  Straight Debt Harbor

  	
   

  	
  44

  
	
  22.

  	
  SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF
  BORROWER

  	
   

  	
  45

  
	
  23.

  	
  RESTRUCTURING TO ONE PHASE

  	
   

  	
  47

  

 

  
 iii

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]