Document:

Document

Exhibit 10.1

AMENDMENT NO. 3 TO
CREDIT AGREEMENT

This Amendment No. 3 to Credit Agreement (this “Agreement”) dated as of May 28, 2021 (the “Amendment Effective Date”), is among Extraction Oil & Gas, Inc., a Delaware corporation (the “Borrower”), 7N, LLC, a Delaware limited liability company (“7N”), 8 North, LLC, a Delaware limited liability company (“8 North”), Axis Exploration, LLC, a Delaware limited liability company (“Axis”), Extraction Finance Corp., a Delaware corporation (“Finance Corp.”), Mountaintop Minerals, LLC, a Delaware limited liability company (“MTM”), Table Mountain Resources, LLC, a Delaware limited liability company (“TMR”), XOG Services, LLC, a Delaware limited liability company (“XOG LLC”), XTR Midstream, LLC, a Delaware limited liability company (“XTR”), and Northwest Corridor Holdings, LLC, a Delaware limited liability company (together with 7N, 8 North, Axis, Finance Corp., MTM, TMR, XOG LLC, and XTR, collectively, the “Guarantors”), the undersigned Lenders (as defined below), and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”) and as Issuing Lender (the “Issuing Lender”).

INTRODUCTION

A.The Borrower, the financial institutions party thereto as Lenders (the “Lenders”), the Issuing Lender, and the Administrative Agent have entered into the Credit Agreement dated as of January 20, 2021 (as amended by that certain Amendment No. 1 to Credit Agreement dated as of March 24, 2021, that certain Amendment No. 2 to Credit Agreement dated as of May 6, 2021, and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

B.The Guarantors have entered into the Guaranty Agreement dated as of January 20, 2021 (the “Guaranty”) in favor of the Administrative Agent for the benefit of the Secured Parties (as defined in the Credit Agreement). 

C.On May 9, 2021, the Borrower entered into that certain Agreement and Plan of Merger among the Borrower, Bonanza Creek Energy, Inc. (“Bonanza”) and Raptor Eagle Merger Sub, Inc. (“Raptor”), pursuant to which the Borrower has agreed to pay-off the Obligations and terminate the Commitments under the Credit Agreement before merging with Raptor and continuing thereafter as a wholly-owned subsidiary of Bonanza (such transaction, the “Merger Transaction”). In connection with the Merger Transaction, the Borrower has requested that the Lenders and the Administrative Agent modify the hedging requirements in the Credit Agreement.  

D.In connection with the foregoing and subject to the terms and conditions hereof, the Administrative Agent and the Majority Lenders have agreed to amend the Credit Agreement as set forth herein.

THEREFORE, in fulfillment of the foregoing, the Borrower, the Guarantors, the Administrative Agent, the Issuing Lender, and the undersigned Lenders hereby agree as follows:

Section 1. Definitions; References.  Unless otherwise defined in this Agreement, each term used in this Agreement which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. 

Section 2. Amendments to Credit Agreement.  Upon the satisfaction of the conditions specified in Section 6 of this Agreement, and effective as of the Amendment Effective Date, the Credit Agreement is amended as follows:

(a) Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby amended to add the following as new defined terms in alphabetical order therein:

“Amendment No. 3 Effective Date” means May 28, 2021.

“Hedge Trigger Event” shall be deemed to have occurred if the sum of the aggregate amount of Loans outstanding plus the Letter of Credit Exposure is greater than $200,000,000 at any time.

“Merger Agreement” means that certain Agreement and Plan of Merger dated as of May 9, 2021 among the Borrower, Bonanza Creek Energy, Inc. and Raptor Eagle Merger Sub, Inc.

“Merger Termination Date” means the date that is fifteen days after the earlier of (a) the date on which the Merger Agreement is terminated or (b) September 15, 2021.

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(b) Section 1.1 of the Credit Agreement (Certain Defined Terms) is hereby further amended to amend and restate the definition of Reserve Report Date in its entirety as follows:

“Reserve Report Date” has the meaning set forth in Section 5.15(a).

(c) Section 5.15 of the Credit Agreement (Minimum Hedging Arrangements) is hereby amended and restated in its entirety to read as follows:

Section 5.15    Minimum Hedging Arrangements. 
 
(a)        Subject to clause (b) below, the Borrower and its Restricted Subsidiaries shall maintain Hedging Arrangements, measured as of each date an Independent Reserve Report or Internal Reserve Report is due pursuant to Section 2.2(b)(i) and Section 2.2(b)(ii) (each such date, the “Reserve Report Date”), beginning on the date the first Independent Reserve Report is due under Section 2.2(b)(i) (but subject to the proviso at the end of this Section 5.15), which cover (calculated separately for each type of Hydrocarbon), (i) for each calendar month during the first 12 months following any Reserve Report Date, beginning with the calendar month commencing on such Reserve Report Date, (A) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 65% of the anticipated production of gas volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2, and (B) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 65% of the anticipated production of oil volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2, and (ii) for each calendar month during months 13 through 24 following any Reserve Report Date, beginning with the calendar month commencing on such Reserve Report Date, (A) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 50% of the anticipated production of gas volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2, and (B) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 50% of the anticipated production of oil volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2.

(b)        Notwithstanding the terms and conditions of clause (a) above but subject to the proviso below, solely with respect to the period beginning on the Reserve Report Date which falls on April 1, 2021 and continuing until the Merger Termination Date (or such later date as may be approved by the Administrative Agent in its sole discretion), the Borrower and its Restricted Subsidiaries shall only be required to maintain Hedging Arrangements which cover (calculated separately for each type of Hydrocarbon), (i) for each calendar month during the first 10 months following the Reserve Report Date which falls on April 1, 2021, beginning with the calendar month commencing on such Reserve Report Date, (A) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 65% of the anticipated production of gas volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2, and (B) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 65% of the anticipated production of oil volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2, and (ii) for each calendar month during months 11 through 22 following the Reserve Report Date which falls on April 1, 2021, beginning with the calendar month commencing on such Reserve Report Date, (A) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 25% of the anticipated production of gas volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2, and (B) notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) of at least 25% of the anticipated production of oil volumes attributable to the PDP Reserves of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Reserve Report under Section 2.2; provided that, if at any time on or after the Amendment No. 3 Effective Date but prior to the Merger Termination Date a Hedge Trigger Event shall have occurred, then the Borrower and its Restricted Subsidiaries shall, within fifteen days (or such later date as the Administrative Agent may agree in its sole discretion) of such Hedge Trigger Event and continuing thereafter until the next Reserve Report Date, maintain Hedging Arrangements pursuant to clause (a) above.

(d) Section 5.16 of the Credit Agreement (Post-Closing Obligations) is hereby amended and restated  in its entirety to read as follows:

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[Reserved].

Section 3. Reaffirmation of Liens.  

(a) Each of the Borrower and each Guarantor (i) is party to certain Security Documents securing and supporting the Borrower's and Guarantors’ obligations under the Loan Documents, (ii) represents and warrants that it has no defenses to the enforcement of the Security Documents and that, notwithstanding the effectiveness of this Agreement or the amendments set forth herein, according to their terms the Security Documents are and shall continue in full force and effect to secure the Borrower’s and Guarantors’ obligations under the Loan Documents, as such obligations may have been amended by this Agreement and as the same may be further amended, supplemented, or otherwise modified, and (iii) acknowledges, represents, and warrants that the liens and security interests created by the Security Documents are valid and subsisting and create a first and prior Lien (subject only to Permitted Liens) in the Collateral to secure the Secured Obligations. 

(b) The delivery of this Agreement does not indicate or establish a requirement that any Loan Document requires any Guarantor's approval of amendments to the Credit Agreement.

Section 4. Reaffirmation of Guaranty.  Each Guarantor hereby ratifies, confirms, and acknowledges that, notwithstanding the effectiveness of this Agreement or the amendments set forth herein, its obligations under the Guaranty and the other Loan Documents are and shall continue in full force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all of the Guaranteed Obligations (as defined in the Guaranty), as such Guaranteed Obligations may have been amended by this Agreement as the same may be further amended, supplemented, or otherwise modified.  Each Guarantor hereby acknowledges that its execution and delivery of this Agreement do not indicate or establish an approval or consent requirement by such Guarantor under the Credit Agreement in connection with the execution and delivery of amendments, modifications or waivers to the Credit Agreement, the Notes or any of the other Loan Documents.

Section 5. Representations and Warranties.  Each of the Borrower and each Guarantor represents and warrants to the Administrative Agent and the Lenders that:

(a) the representations and warranties set forth in the Credit Agreement and in the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of this Agreement, except that any representation and warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) only as of such specified date.

(b) (i) the execution, delivery, and performance of this Agreement are within the corporate, limited partnership or limited liability company power, as appropriate, and authority of the Borrower and Guarantors and have been duly authorized by appropriate proceedings and (ii) this Agreement constitutes a legal, valid, and binding obligation of the Borrower and Guarantors, enforceable against the Borrower and Guarantors in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity whether applied by a court of law or equity; and

(c) as of the effectiveness of this Agreement and after giving effect thereto, no Default or Event of Default has occurred and is continuing.

Section 6. Effectiveness.  This Agreement shall become effective as of the Amendment Effective Date upon the occurrence of all of the following: 

(a) Documentation. The Administrative Agent shall have received this Agreement, duly and validly executed by the Borrower, the Guarantors, the Administrative Agent, the Issuing Bank, and the Majority Lenders, in form and substance reasonably satisfactory to the Administrative Agent and each of the undersigned Lenders; and
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(b) Representations and Warranties.  The representations and warranties in this Agreement being true and correct in all material respects before and after giving effect to this Agreement (except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); provided that such materiality qualifier shall not apply if such representation or warranty is already subject to a materiality qualifier in the Credit Agreement or such other Loan Document.

(c) No Default or Event of Default. There being no Default or Event of Default which has occurred and is continuing.

(d) Expenses.  The Borrower shall have paid all costs, expenses, and fees which have been invoiced and are payable pursuant to Section 9.1 of the Credit Agreement or any other agreement.

Section 7. Effect on Loan Documents.  Except as amended herein, the Credit Agreement and the other Loan Documents remain in full force and effect and are hereby ratified and confirmed, and nothing herein shall act as a waiver of any of the Administrative Agent's or Lenders' rights under the Loan Documents.  This Agreement is a Loan Document for the purposes of the provisions of the other Loan Documents.  Without limiting the foregoing, any breach of representations, warranties, and covenants under this Agreement is a Default or Event of Default under other Loan Documents.

Section 8. Choice of Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York).

Section 9. Counterparts.  This Agreement may be signed in any number of counterparts, each of which shall be an original.

THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 

[Remainder of page intentionally left blank; Signature pages follow.]
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EXECUTED as of the date first set forth above.

BORROWER:

EXTRACTION OIL & GAS, INC.

By: /s/ Marianella Foschi
Name:     Marianella Foschi
Title:     Chief Financial officer

GUARANTORS:

7N, LLC
8 NORTH, LLC
AXIS EXPLORATION, LLC
EXTRACTION FINANCE CORP.
MOUNTAINTOP MINERALS, LLC
NORTHWEST CORRIDOR HOLDINGS, LLC
XOG SERVICES, LLC
XTR MIDSTREAM, LLC
TABLE MOUNTAIN RESOURCES, LLC

Each By: /s/ Marianella Foschi
Name:     Marianella Foschi
Title:     Chief Financial officer
 

ADMINISTRATIVE AGENT/ISSUING LENDER/LENDER:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Issuing Lender, and a Lender

By: /s/ Jonathan Herrick
Name: Jonathan Herrick
Title: Director

LENDERS:

BARCLAYS BANK PLC,
as a Lender 

By: /s/ Sydney G. Dennis
Name: Sydney G. Dennis
Title: Director

[SIGNATURE PAGE TO AMENDMENT NO. 3 TO 
CREDIT AGREEMENT – EXTRACTION]

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CREDIT SUISSE AG, 
CAYMAN ISLANDS BRANCH,
as a Lender 

By: /s/ Nupur Kumar
Name: Nupur Kumar
Title:   Authorized Signatory

By: /s/ Daniel Kogan                                                  
Name: Daniel Kogan
Title:   Authorized Signatory

TRUIST BANK,
as a Lender 

By: /s/ Samantha Sanford
Name: Samantha Sanford
Title:   Vice President

BANC of AMERICA CREDIT PRODUCTS, INC., as a Lender 

By: 
Name: 
Title:   

KEYBANK NATIONAL ASSOCIATION,
as a Lender

By: /s/ George E. McKean                                          
Name: George E. McKean
Title:   Senior Vice President

CITIBANK, N.A.,
as a Lender 

By: /s/ Cliff Vaz
Name: Cliff Vaz
Title:   Vice President

[SIGNATURE PAGE TO AMENDMENT NO. 3 TO 
CREDIT AGREEMENT – EXTRACTION]
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GOLDMAN SACHS BANK USA,
as a Lender 

By: /s/ Dan Martis
Name: Dan Martis
Title:   Authorized Signatory

ROYAL BANK OF CANADA,
as a Lender 

By: /s/ Katy Berkemeyer                                            
Name: Katy Berkemeyer
Title:   Authorized Signatory

BANK OF AMERICA, N.A.,
as a Lender 

By: /s/ Ronald E. McKaig
Name: Ronald E. McKaig
Title:   Managing Director

MERCURIA EASTERN US HOLDINGS LLC,
as a Lender 

By: /s/ Marty Bredehoft
Name: Marty Bredehoft
Title:   Treasurer

AG ENERGY FUNDING, LLC,
as a Lender 

By: 
Name:
Title:  

PNC BANK, NATIONAL ASSOCIATION,
as a Lender 

By: /s/ John Engel                                                       
Name: John Engel
Title:   Senior Vice President

[SIGNATURE PAGE TO AMENDMENT NO. 3 TO 
CREDIT AGREEMENT – EXTRACTION]
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BMO HARRIS BANK N.A.,
as a Lender 

By: /s/ Matthew Davis
Name: Matthew Davis
Title:   Director

NATIXIS, NEW YORK BRANCH,
as a Lender 

By: /s/ Peter Bayard
Name: Peter Bayard
Title:   Managing Director

By: /s/ Ajay Prakash
Name: Ajay Prakash
Title:   Director

OCM ENERGY HOLDINGS, LLC,
as a Lender

By: Oaktree Fund GP, LLC, its Manager

By: Oaktree Fund GP I, L.P., its Managing Member

By: 
Name: 
Title:   

By: 
Name: 
Title:   

[SIGNATURE PAGE TO AMENDMENT NO. 3 TO 
CREDIT AGREEMENT – EXTRACTION]
8cortona-loanagreementexe

Execution Version  LOAN AGREEMENT  Dated as of May 25, 2021  By and Between  CORTONA RESIDENCES OWNER, LLC,  as Borrower,  and  METLIFE REAL ESTATE LENDING LLC,  as Lender  Property:  Cortona at Forest Park Apartments  5800 Highlands Plaza Drive  St. Louis, Missouri 63110  Loan Amount:  $45,000,000  148546038_255690-00601  Exhibit 10.1 

 

i   TABLE OF CONTENTS    Page    I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION ................................................................ 1  SECTION 1.1 DEFINITIONS......................................................................................................................................................... 1  SECTION 1.2 PRINCIPLES OF CONSTRUCTION ................................................................................................................ 13  II. THE LOAN ...................................................................................................................................... 13  SECTION 2.1 THE LOAN .......................................................................................................................................................... 13  2.1.1 Agreement to Lend and Borrow .................................................................................................. 13  2.1.2 Single Disbursement to Borrower ............................................................................................... 14  2.1.3 The Note ...................................................................................................................................... 14  2.1.4 Register and Participant Register ............................................................................................... 14  SECTION 2.2 INTEREST RATE ............................................................................................................................................... 15  2.2.1 Payment of Principal and Interest .............................................................................................. 15  SECTION 2.3 APPLICATION OF PAYMENTS ...................................................................................................................... 16  SECTION 2.4 SECURITY ........................................................................................................................................................... 16  SECTION 2.5 LATE CHARGE .................................................................................................................................................. 16  SECTION 2.6 ACCELERATION UPON EVENT OF DEFAULT ......................................................................................... 16  SECTION 2.7 INTEREST UPON EVENT OF DEFAULT ..................................................................................................... 16  SECTION 2.8 LIMITATION ON INTEREST ........................................................................................................................... 16  SECTION 2.9 PREPAYMENT .................................................................................................................................................... 16  2.9.1 Prepayment Fee .......................................................................................................................... 17  2.9.2 Waiver of Right to Prepay Note Without Prepayment Fee or Default Prepayment Fee ............. 17  SECTION 2.10 INTEREST RATE CAP AGREEMENT .......................................................................................................... 18  SECTION 2.11 EXCESS CASH FLOW RESERVE .................................................................................................................. 19  SECTION 2.12 CASH MANAGEMENT ..................................................................................................................................... 20  III. TAXES, LIENS AND ENCUMBRANCES AND OTHER CHARGES ...................................... 20  SECTION 3.1 PAYMENT OF IMPOSITIONS ......................................................................................................................... 20  IV. REPRESENTATIONS AND WARRANTIES .............................................................................. 20  SECTION 4.1 BORROWER REPRESENTATIONS................................................................................................................ 20  4.1.1 Organization ............................................................................................................................... 20  4.1.2 Litigation .................................................................................................................................... 21  4.1.3 Agreements ................................................................................................................................. 21  4.1.4 Consents...................................................................................................................................... 21  4.1.5 No Plan Assets ............................................................................................................................ 21  4.1.6 Compliance ................................................................................................................................. 21  4.1.7 Zoning ......................................................................................................................................... 21  4.1.8 Financial Information ................................................................................................................. 21  4.1.9 Casualty and Condemnation ....................................................................................................... 22  4.1.10 Enforceability ............................................................................................................................. 22  4.1.11 Assignment of Leases .................................................................................................................. 22  4.1.12 Insurance .................................................................................................................................... 22  4.1.13 Licenses ...................................................................................................................................... 22  4.1.14 Flood Zone .................................................................................................................................. 23  4.1.15 Physical Condition ...................................................................................................................... 23  4.1.16 Leases ......................................................................................................................................... 23  

 

ii   4.1.17 Filing and Recording Taxes ........................................................................................................ 24  4.1.18 Special Purpose Entity/Separateness .......................................................................................... 24  4.1.19 Solvency ...................................................................................................................................... 24  4.1.20 Organizational Chart .................................................................................................................. 24  4.1.21 Material Agreements................................................................................................................... 25  4.1.22 No Other Debt............................................................................................................................. 25  4.1.23 No Bankruptcy Filing ................................................................................................................. 25  4.1.24 Full and Accurate Disclosure ..................................................................................................... 25  4.1.25 Foreign Person ........................................................................................................................... 25  4.1.26 No Change in Facts or Circumstances; Disclosure .................................................................... 25  4.1.27 Management Agreement ............................................................................................................. 25  4.1.28 Non-Relationship ........................................................................................................................ 25  4.1.29 US Patriot Act ............................................................................................................................. 26  4.1.30 Criminal Acts .............................................................................................................................. 26  4.1.31 No Defaults ................................................................................................................................. 26  4.1.32 Intentionally Omitted .................................................................................................................. 26  4.1.33 Personal Property ....................................................................................................................... 26  4.1.34 Intentionally Omitted .................................................................................................................. 26  4.1.35 O&M Agreement ......................................................................................................................... 26  4.1.36 REA ............................................................................................................................................. 26  V. BORROWER COVENANTS ......................................................................................................... 26  SECTION 5.1 BORROWER AFFIRMATIVE COVENANTS ................................................................................................ 26  5.1.1 Existence; Compliance with Requirements ................................................................................. 26  5.1.2 Litigation .................................................................................................................................... 27  5.1.3 Access to Property ...................................................................................................................... 27  5.1.4 Books and Records; Financial Reporting ................................................................................... 27  5.1.5 Property Reports ......................................................................................................................... 28  5.1.6 Additional Financial or Management Information; Right to Audit ............................................ 28  5.1.7 Title to the Property .................................................................................................................... 29  5.1.8 Estoppel Statements .................................................................................................................... 29  5.1.9 Leases ......................................................................................................................................... 29  5.1.10 Material Agreements................................................................................................................... 30  5.1.11 Performance by Borrower .......................................................................................................... 30  5.1.12 Maintenance of the Property ...................................................................................................... 30  5.1.13 Use .............................................................................................................................................. 30  5.1.14 Escrow Deposits ......................................................................................................................... 31  5.1.15 Personal Property ....................................................................................................................... 31  5.1.16 Special Purpose Entity/Separateness .......................................................................................... 31  5.1.17 Intentionally Omitted .................................................................................................................. 31  SECTION 5.2 BORROWER NEGATIVE COVENANTS ....................................................................................................... 31  5.2.1 Liens and Encumbrances ............................................................................................................ 31  5.2.2 Change in Business ..................................................................................................................... 32  5.2.3 Affiliate Transactions .................................................................................................................. 32  5.2.4 Zoning ......................................................................................................................................... 32  5.2.5 Assets .......................................................................................................................................... 32  5.2.6 No Joint Assessment ................................................................................................................... 32  5.2.7 Principal Place of Business; Chief Executive Office; Books and Records ................................. 32  5.2.8 ERISA.......................................................................................................................................... 32  5.2.9 Material Agreements................................................................................................................... 33  5.2.10 Improvements .............................................................................................................................. 33  5.2.11 Personal Property ....................................................................................................................... 33  5.2.12 Intentionally Omitted .................................................................................................................. 33  VI. INSURANCE, CASUALTY AND CONDEMNATION ............................................................... 33  

 

iii   SECTION 6.1 INSURANCE ........................................................................................................................................................ 33  6.1.1 Insurance Policies ...................................................................................................................... 33  6.1.2 Environmental Insurance Policy ................................................................................................. 37  6.1.3 Adjustment of Claims .................................................................................................................. 38  6.1.4 Assignment to Lender.................................................................................................................. 38  SECTION 6.2 CASUALTY AND CONDEMNATION ............................................................................................................. 38  6.2.1 Casualty ...................................................................................................................................... 38  6.2.2 Condemnation ............................................................................................................................. 39  6.2.3 Requirements For Restoration .................................................................................................... 40  VII. PROPERTY MANAGEMENT ...................................................................................................... 41  SECTION 7.1 THE MANAGEMENT AGREEMENT ............................................................................................................ 41  SECTION 7.2 PROHIBITION AGAINST TERMINATION OR MODIFICATION ........................................................... 42  SECTION 7.3 REPLACEMENT OF MANAGER .................................................................................................................... 42  VIII. CHANGE IN OWNERSHIP, PROHIBITION ON ADDITIONAL FINANCING AND  ADDITIONAL OBLIGATIONS ............................................................................................................. 42  SECTION 8.1 PERMITTED TRANSFERS OF INTEREST IN BORROWER ..................................................................... 42  8.1.1 Permitted Transfer ...................................................................................................................... 42  8.1.2 Property Transfer ....................................................................................................................... 43  SECTION 8.2 PROHIBITION ON ADDITIONAL FINANCING .......................................................................................... 44  SECTION 8.3 RESTRICTIONS ON ADDITIONAL OBLIGATIONS .................................................................................. 44  SECTION 8.4 STATEMENTS REGARDING OWNERSHIP ................................................................................................. 45  IX. ENVIRONMENTAL HAZARDS ................................................................................................... 45  SECTION 9.1 REPRESENTATIONS AND WARRANTIES ................................................................................................... 45  SECTION 9.2 REMEDIAL WORK ........................................................................................................................................... 46  SECTION 9.3 ENVIRONMENTAL SITE ASSESSMENT ...................................................................................................... 46  SECTION 9.4 UNSECURED OBLIGATIONS ......................................................................................................................... 46  X. PARTICIPATION AND SALE OF LOAN ................................................................................... 46  SECTION 10.1 SALE OF LOAN/PARTICIPATION ................................................................................................................ 46  SECTION 10.2 SPLITTING OF THE MORTGAGE ................................................................................................................. 47  SECTION 10.3 COOPERATION .................................................................................................................................................. 47  XI. DEFAULTS ...................................................................................................................................... 47  SECTION 11.1 EVENT OF DEFAULT ....................................................................................................................................... 48  SECTION 11.2 REMEDIES........................................................................................................................................................... 49  SECTION 11.3 DURATION OF EVENTS OF DEFAULT ........................................................................................................ 49  XII. MISCELLANEOUS ........................................................................................................................ 49  SECTION 12.1 SUCCESSORS AND ASSIGNS; TERMINOLOGY ........................................................................................ 49  SECTION 12.2 LENDER’S DISCRETION ................................................................................................................................. 49  SECTION 12.3 GOVERNING LAW ............................................................................................................................................ 49  SECTION 12.4 MODIFICATION................................................................................................................................................. 50  SECTION 12.5 NOTICES .............................................................................................................................................................. 50  SECTION 12.6 WAIVER OF JURY TRIAL .............................................................................................................................. 51  SECTION 12.7 HEADINGS .......................................................................................................................................................... 51  

 

iv   SECTION 12.8 SEVERABILITY .................................................................................................................................................. 51  SECTION 12.9 PREFERENCES ................................................................................................................................................... 51  SECTION 12.10 WAIVER OF NOTICE ...................................................................................................................................... 51  SECTION 12.11 REMEDIES OF BORROWER .......................................................................................................................... 51  SECTION 12.12 EXPENSES .......................................................................................................................................................... 52  SECTION 12.13 SCHEDULES AND EXHIBITS INCORPORATED ...................................................................................... 52  SECTION 12.14 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY BENEFICIARIES ........................... 52  SECTION 12.15 PUBLICITY ......................................................................................................................................................... 52  SECTION 12.16 WAIVER OF MARSHALLING OF ASSETS ................................................................................................. 52  SECTION 12.17 WAIVER OF OFFSETS/DEFENSES/COUNTERCLAIMS ........................................................................ 52  SECTION 12.18 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE ............................................................. 53  SECTION 12.19 BROKERS AND FINANCIAL ADVISORS .................................................................................................... 53  SECTION 12.20 EXCULPATION .................................................................................................................................................. 53  SECTION 12.21 PRIOR AGREEMENTS .................................................................................................................................... 54  SECTION 12.22 LIABILITY OF BORROWER .......................................................................................................................... 55  SECTION 12.23 JOINT AND SEVERAL LIABILITY ............................................................................................................... 55  SECTION 12.24 COUNTERPARTS .............................................................................................................................................. 55  SECTION 12.25 TIME OF THE ESSENCE ................................................................................................................................ 55  SECTION 12.26 NO MERGER ..................................................................................................................................................... 55  SECTION 12.27 NO ORAL AGREEMENTS .............................................................................................................................. 55    Schedules and Exhibits  Schedule 4.1.21 – Material Agreements    Exhibit A – Intentionally Omitted  Exhibit B – Leasing Guidelines  Exhibit C – Rent Roll  Exhibit D – Organizational Chart  

 

1  Cortona – Loan Agreement  [Certain information marked as [***] has been excluded from Exhibit D to this Exhibit 10.13 because it is both (i) not  material and (ii) the type that the registrant treats as private or confidential.]        LOAN AGREEMENT    THIS LOAN AGREEMENT (as amended, restated, replaced, supplemented or otherwise  modified from time to time, this “Agreement”), dated as of May 25, 2021 (the “Execution Date”),  by and between METLIFE REAL ESTATE LENDING LLC, a Delaware limited liability  company, having an address at One MetLife Way, Whippany, New Jersey 07981-1449 (together  with its successors and assigns, “Lender”), and CORTONA RESIDENCES OWNER, LLC, a  Delaware limited liability company, having an address at c/o Invesco Real Estate, 2001 Ross  Avenue, Suite 3400, Dallas, Texas 75201 (“Borrower”).    All capitalized terms used herein shall have the respective meanings set forth in Article I  hereof.   W I T N E S S E T H:    WHEREAS, Borrower desires to obtain the Loan from Lender; and    WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance  with the conditions and terms of this Agreement and the other Loan Documents.    NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and  other good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, the parties hereto hereby agree, represent and warrant as follows:    I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION    Section 1.1 Definitions.  For all purposes of this Agreement, except as otherwise expressly provided:  “Accelerated Loan Amount” shall mean, the Secured Indebtedness, and all other  sums evidenced and/or secured by the Loan Documents, including, without  limitation, any  applicable prepayment fees.    “Advance Date” shall mean the date funds are first disbursed to Borrower under  the Loan.    “Affiliate” shall mean, as to any Person, any other Person that, directly or  indirectly, is in Control of, is Controlled by or is under common ownership or Control with such  Person.    “Agreement” shall have the meaning set forth in the introductory paragraph hereto.  “ALTA” shall mean American Land Title Association or any successor thereto.  “Application” shall mean the application submitted for the Loan by Borrower.  “Approved Annual Budget” shall have the meaning set forth in Section 5.1.4.2.  

 

2  Cortona – Loan Agreement    “Approved Plans and Specifications” shall have the meaning set forth in  Section 6.2.3(a).    “Architect” shall have the meaning set forth in Section 6.2.3(a).    “Assignment of Leases” shall mean that certain first priority Assignment of  Leases, dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee, as the same  may be amended, restated, replaced, supplemented or otherwise modified from time to time.    “Assignment of Management Agreement” shall mean that certain Assignment  and Subordination of Management Agreement dated as of the date hereof among Lender, Borrower  and Manager, as the same may be amended, restated, replaced, supplemented or otherwise  modified from time to time.    “Bankruptcy Code” shall mean Title 11 of the United States Code entitled  “Bankruptcy”, as amended from time to time, and any successor statute or statutes and all rules  and regulations from time to time promulgated thereunder, and any comparable foreign laws  relating to bankruptcy, insolvency or creditors’ rights.  “Borrower” shall have the meaning set forth in the introductory paragraph hereto.  “Borrower’s Constituents” shall mean the Persons who hold any direct or indirect  interest in Borrower, irrespective of the number of tiers through which such interests are held,  including, without limitation, the partners, members, shareholders, trustees and beneficiaries of  Borrower, and each of their respective direct and indirect constituents (provided however, that  unless otherwise expressly stated herein, representations and covenants herein pertaining to  Borrower’s Constituents do not apply with respect to Persons who both (i) hold no managerial or  controlling position or interest in Borrower or in any entity that directly or indirectly Controls  Borrower, and (ii) whose only direct and indirect interests in Borrower are as holders of publicly  traded shares and/or limited partnership interests aggregating less than twenty percent (20%) of  the direct or indirect equity in Borrower).    “Broker” shall have the meaning set forth in Section 12.19.    “Business Day” shall mean any day, Monday through Friday, on which Lender is  conducting normal business operations.    “Business Income” shall mean the sum of (i) the total anticipated gross income  from occupancy of the Property, (ii) the amount of all charges (such as, but not limited to, operating  expenses, insurance premiums, and taxes) that are the obligation of Tenants or occupants to  Borrower, (iii) the fair market rental value of any portion of the Property occupied by Borrower,  and (iv) any other amounts payable to Borrower or to any affiliate of Borrower pursuant to the  Leases.    “Cap Date” shall have the meaning set forth in Section 2.10.  

 

3  Cortona – Loan Agreement    “Cash Management Agreement” shall mean that certain Cash Management  Agreement dated as of the Execution Date among Lender, Borrower, and Manager, as the same  may be amended, restated, replaced, supplemented or otherwise modified from time to time.    “Certification Parties” shall mean MetLife Real Estate Lending LLC, its affiliates  and participants, and their respective successors and/or assigns.    “Clearing Account Agreement” shall have the meaning set forth in the Cash  Management Agreement.    “Code” shall mean the Internal Revenue Code of 1986, as amended, and as it may  be further amended from time to time, any successor statutes thereto, and applicable U.S.  Department of Treasury regulations issued pursuant thereto in temporary or final form.    “Co-Lender” shall have the meaning set forth in Section 2.1.4    “Condemnation” shall mean a temporary or permanent taking by reason of any  condemnation or similar eminent domain proceeding or by grant or conveyance in lieu of  condemnation or eminent domain.    “Condemnation Proceeds” shall mean any and all compensation, awards,  damages, proceeds and payments or relief for the Condemnation paid in connection with a  Condemnation in respect of all or any part of the Property.    “Contractor” shall have the meaning set forth in Section 6.2.3(a).    “Control” shall mean the possession, directly or indirectly, of the power to direct  or cause the direction of the management, policies or activities of a Person (subject to the rights of  others to approve significant decisions), whether through ownership of voting securities, by  contract or otherwise. The definition is to be construed to apply equally to variations of the word  “Control” including “Controlled,” “Controlling” or “Controlled by.”    “Counterparty Rating Downgrade” shall have the meaning set forth in  Section 2.10.   “Country Lists” shall have the meaning set forth in Section 4.1.29.    “Default Prepayment Fee” shall be equal to the greater of (a) the present value of  all remaining Partial Monthly Payments of Interest, discounted at the rate which, when  compounded monthly, is equivalent to the Treasury Rate, compounded semi-annually, or (b) one  percent (1%) of the amount of the principal being prepaid.    “Default Rate” shall mean an annual rate equal to the Interest Rate plus four  percent (4%).    “Environmental Indemnity” shall mean that certain Unsecured Indemnity  Agreement, dated as of the date hereof, executed by Borrower and Liable Party, if any, in favor of  

 

4  Cortona – Loan Agreement    Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified  from time to time.    “Environmental Insurance Policy” shall mean a policy of environmental  insurance satisfying all requirements in Section 6.1.2(a).    “Environmental Report” shall mean that certain Report of Phase I Environmental  Site Assessment and Additional Environmental Services dated January 2021 and prepared by  Targus Environmental as Targus Project  T20-4290A.    “EPI” shall have the meaning set forth in Section 6.1.1(a)(iii).    “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as  amended.                hereof.    “Event of Default” shall have the meaning set forth in Section 11.1.    “Excess Cash Flow Account” shall have the meaning set forth in Section 2.11.  “Excess Cash Flow Funds” shall have the meaning set forth in Section 2.11.  “Execution Date” shall have the meaning set forth in the introductory paragraph    “Existing Leases” shall have the meaning set forth in Section 4.1.16(a).  “Existing Rate Cap” shall have the meaning set forth in Section 2.10.  “Full Replacement Cost” shall have the meaning set forth in Section 6.1.1(a)(i).    “GAAP” shall mean generally accepted accounting principles set forth in the  opinions and pronouncements of the Accounting Principles Board and the American Institute of  Certified Public Accountants and statements and pronouncements of the Financial Accounting  Standards Board (or agencies with similar functions of comparable stature and authority within the  accounting profession), or in such other statements by such entity as may be in general use by  significant segments of the U.S. accounting profession.    “General Transfer Requirements” shall have the meaning set forth in Section  8.1.1.    “Governmental Authority” shall mean any court, board, agency, commission,  office or authority of any nature whatsoever or any governmental unit (federal, state, county,  district, municipal, city, foreign or otherwise) whether now or hereafter in existence.    “Guaranty” shall mean any Guaranty of Recourse Obligations, whether dated as  of the date hereof or subsequently, executed by Liable Party in favor of Lender, as the same may  be amended, restated, replaced, supplemented or otherwise modified from time to time.  

 

5  Cortona – Loan Agreement    “Hazardous Materials” shall include without limitation:    (i) Those substances included within the definitions of “hazardous  substances,” “hazardous materials,” “toxic substances,” or “solid waste” in the Comprehensive  Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601  et seq.), as amended by Superfund Amendments and Reauthorization Act of l986 (Publ. L. 99-499  100 Stat. 1613), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Sections 6901  et seq.), and the Hazardous Materials Transportation Act, 49 U.S.C. Sections 5101 et seq., and in  the regulations promulgated pursuant to said laws, all as amended;    (ii) Intentionally omitted;    (iii) Intentionally omitted;    (iv) Those substances listed in the United States Department of Transportation  Table (49 CFR 172.101 and amendments thereto) or by the Environmental Protection Agency (or  any successor agency) as hazardous substances (40 CFR Part 302 and amendments thereto);    (v) Any material, waste or substance which is (A) petroleum; (B) asbestos;  (C) polychlorinated biphenyls; (D) designated as a “hazardous substance” pursuant to Section 311  of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant  to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (E) a chemical substance or  mixture regulated under the Toxic Substances Control Act of 1976, 15 U.S.C. Sections 2601 et  seq.; (F) flammable explosives; or (G) radioactive materials; and    (vi) Chemicals known to cause cancer or reproductive toxicity and such other  substances, materials and wastes, which are or become regulated, classified or identified as  hazardous, toxic or cancer causing under applicable local, state or federal laws or regulations, or  by the United States government or the government of the State in which the Property is located.    “Impairment of the Security” shall mean any or all of the following: (i) any of  the Leases for more than ten percent (10%) of the apartment units existing immediately prior to  the damage, destruction, condemnation or casualty shall have been cancelled, or shall contain any  exercisable right to cancel as a result of the damage, destruction or casualty; (ii) the casualty or  damage occurs during the last year of the term of the Loan; or (iii) restoration of the Property is  estimated to require more than one year to complete from the date of the occurrence.    “Impositions” shall mean real estate and other taxes and assessments which may  be payable, assessed, levied, imposed upon or become a lien on or against any portion of the  Property.    “Improvements” shall have the meaning set forth in the granting clause of the  Security Instrument.    “Insolvent Entity” shall have the meaning set forth in Section 11.1(c).  

 

6  Cortona – Loan Agreement    “Insurance Proceeds” shall mean all insurance proceeds payable to Borrower in  connection with the Property whether or not such insurance coverage is specifically required under  the terms of this Agreement.    “INREIT” shall have the meaning set forth in Section 8.1.1.    “Interest Rate” shall mean a rate per annum equal to the greater of (a) 2.65% or  (b) the sum of (i) 240 basis points (2.4%) plus (ii) the LIBOR Rate.    “Interest Rate Cap Agreement” shall mean, as applicable, any interest rate cap  agreement (together with the confirmation and schedules relating thereto), in form and substance  satisfactory to Lender, between Borrower and the counterparty thereunder or any Replacement  Interest Rate Cap Agreement, in each case which also satisfies the requirements set forth in  Section 2.10.    “Investor” shall have the meaning set forth in Section 10.1.    “Late Charge” shall mean an amount equal to four cents ($0.04) for each dollar  that is overdue.    “Lease” shall mean all leases and all other agreements for possession of all or any  portion of the Property, including all of the same now or hereafter existing, and all extensions,  modifications, amendments, expansions and renewals of any of the same and all Lease Guaranties.    “Lease Guaranty” shall mean every guarantee of any obligation under any Lease,  including all modifications and amendments to such guaranties.    “Leasing Guidelines” shall mean the Leasing Guidelines attached to this  Agreement as Exhibit B, as the same may be amended, modified or supplemented in accordance  with the provisions of this Agreement by Lender.  “Lender” shall have the meaning set forth in the introductory paragraph hereof.  “Lender’s Address for Insurance Notification” shall mean: MetLife Real Estate  Lending LLC, its affiliates and/or successors and assigns, One MetLife Way, Whippany, New  Jersey 07981-1449, Attention: Real Estate Investors Insurance Manager.    “Liable Party” shall mean as of the Effective Date no one, and unless and until a  Person becomes a “Liable Party”, all references in the Environmental Indemnity and/or any  guaranty of any of Borrower’s obligations under the Loan Documents to Liable Party shall be  deemed to read “Liable Party, if any”.    “LIBOR Business Day” shall mean a day both (i) commercial banks in London  are open for international business (including dealings in U.S. dollar deposits), and (ii) any day  Lender is open for business in New York City.    “LIBOR Rate” shall mean the one (1) month London interbank offered rate for  deposits in U.S. dollars rounded upwards to the nearest one one-hundredth (1/100th) of one percent  

 

7  Cortona – Loan Agreement    appearing on the display designated as Reuters Screen LIBOR01 Page, or such other page as may  replace LIBOR01 on that service (or such other service as may be nominated as the information  vendor by the ICE Benchmark Administration (the “IBA”), or successor administrator to the IBA,  for the purpose of displaying the IBA’s, or successor administrator’s, interest settlement rates for  U.S. dollar deposits as the composite offered rate for London interbank deposits). If the  aforementioned sources of the LIBOR Rate are no longer available, then the term “LIBOR Rate”  shall mean the one (1) month London interbank offered rate for deposits in U.S. dollars rounded  upwards to the nearest one one-hundredth (1/100th) of one percent as shown on the appropriate  Bloomberg Financial Markets Services Screen or any successor index on such service under the  heading “USD”. In the event that the LIBOR Rate is no longer available, or if Lender determines  that LIBOR is no longer the industry standard, then it shall be replaced by a benchmark rate (with  an appropriate one-time permanent spread adjustment to address the change in benchmark so as to  approximate the Interest Rate agreed to herein) that Lender then commonly utilizes as a LIBOR  replacement on floating rate loans secured by commercial real estate where it holds a similar right  to declare a replacement (and that Lender determines is also then commonly utilized by other  major commercial real estate lenders). Lender’s determinations under the preceding sentence shall  be conclusive absent manifest error. If the applicable rate as described above is below zero,  LIBOR Rate or such replacement benchmark rate, as applicable, will be deemed to be zero.    “Liens and Encumbrances” shall mean any lien or encumbrance on the Property,  including deeds of trust, mortgages, security interests, conditional sales, mechanic liens, tax liens  or assessment liens (including any tax liens or assessment liens to secure repayment of any loan  or other financing, including, without limitation, any Property-Assessed Clean   Energy  loan) regardless of whether or not they are subordinate to the lien created by the Security  Instrument.    “Loan” shall mean, collectively, the indebtedness evidenced by the Note with  interest at the rates set forth herein, all additional advances or fundings made by Lender, and any  other amounts required to be paid by Borrower under any of the Loan Documents.    “Loan Amount” shall equal Forty-Five Million and 00/100 Dollars  ($45,000,000.00).    “Loan Documents” shall mean, collectively, this Agreement, the Note, the  Security Instrument, the Assignment of Leases, the Cash Management Agreement, the Clearing  Account Agreement the Subordination of Management Agreement and any and all other  documents now or hereafter executed and/or delivered to and accepted by Lender for the purpose  of evidencing or securing the Loan (except the Environmental Indemnity and the Guaranty, if any),  as the same may be amended, restated, replaced, supplemented or otherwise modified from time  to time. The Environmental Indemnity and the Guaranty, if any, are not Loan Documents and  shall survive repayment of the Loan or other termination of the Loan Documents to the extent set  forth therein.    “Management Agreement” shall mean the Multifamily Project Management  Agreement, dated as of January 26, 2021, together with all amendments thereto prior to the date  hereof, entered into by and between Borrower and Manager, and all amendments thereto entered  

 

8  Cortona – Loan Agreement    into in accordance with the terms and conditions set forth in this Agreement, pursuant to which  the Manager is to provide management and other services with respect to the Property.    “Manager” shall mean Balke Brown Transwestern, Inc., a Missouri corporation,  or any other manager approved in accordance with the terms and conditions of the Loan  Documents.    “Material Adverse Change” shall mean a material adverse change in (i) the  physical condition of the Property and/or (ii) the financial condition of the Property, Borrower or  Liable Party that would reasonably be expected to impair Borrower’s or Liable Party’s ability to  perform its obligations under the Loan Documents to which it is a party.    “Material Agreements” shall mean each contract and agreement relating to the  ownership, management, development, use, operation, leasing, maintenance, repair or  improvement of the Property (other than the Management Agreement and the Leases), (i) under  which there is an obligation of Borrower to pay more than $50,000 per annum, (ii) the termination  of which would materially adversely affect the Property or the operation thereof, or (iii) which is  not terminable by the owner of the Property upon thirty (30) days’ or less notice without payment  of a termination fee.    “Maturity Date” shall have the meaning set forth in Section 2.2.1(b).    “Monthly Excess Cash Flow Deposits” shall have the meaning set forth in Section  2.11.    “Moody’s” shall mean Moody’s Investors Service, Inc.    “Net Condemnation Proceeds” shall mean all Condemnation Proceeds less the  cost, if any, to Lender of recovering the Condemnation Proceeds, including, without limitation,  reasonable attorneys’ fees and expenses, and adjusters’ fees.    “Net Insurance Proceeds” shall mean Insurance Proceeds less the cost, if any, to  Lender of recovering the Insurance Proceeds, including, without limitation, reasonable attorneys’  fees and expenses, and adjusters’ fees.    “Note” shall mean that certain Promissory Note, dated as of the date hereof, in the  original principal amount of Forty-Five Million Dollars and 00/100 ($45,000,000.00), made by  Borrower to Lender, as the same may be hereinafter amended, consolidated, split, severed,  restated, replaced (whether by one or more replacement notes), supplemented, renewed, extended  or otherwise modified from time to time.    “OFAC” shall have the meaning set forth in Section 4.1.29.  “OFAC Sanctions List” shall have the meaning set forth in Section 4.1.29.  “O&M Agreement” shall mean an Operations and Maintenance Agreement with  respect to the Property, if any, reviewed and approved by Lender in connection with underwriting  the Loan.  

 

9  Cortona – Loan Agreement    “Other Charges” shall mean all ground rents, maintenance charges, impositions  other than Impositions, and any other charges, including, without limitation, vault charges and  license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter  levied or assessed or imposed against the Property or any part thereof.    “Partial Monthly Payments of Interest” shall be defined as the outstanding  principal balance of the Loan multiplied by 2.40%, divided by 360, multiplied by 365 and divided  by 12. The number of “remaining” Partial Monthly Payments of Interest shall be equal to the  number of remaining monthly installments of interest due on the Loan to and including the  Maturity Date.    “Participant Register” shall have the meaning set forth in Section 2.1.4.    “Permitted Exceptions” shall mean, collectively, (i) the lien and security interests  created by the Loan Documents, (ii) those property specific exceptions to title recorded in the real  estate records of the city where the Property is located and contained in Schedule B-1 of the title  insurance policy or policies which have been approved by Lender, (iii) Liens and Encumbrances,  if any, for taxes imposed by any Governmental Authority not yet due or delinquent, and (iv) such  other title and survey exceptions as Lender has approved or may approve in writing in Lender’s  sole discretion. Notwithstanding the foregoing, Permitted Exceptions shall not include any tax  liens or assessment liens to secure repayment of any loan or other financing including, without  limitation, any Property-Assessed Clean Energy loan.  “Permitted Indebtedness” shall have the meaning set forth in Section 8.3.  “Permitted Transfer” shall have the meaning set forth in Section 8.1.1.  “Person” shall mean any individual, corporation, partnership, limited liability  company, joint venture, estate, trust, 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 any of the foregoing.    “Personal Property” shall have the meaning set forth in the Security Instrument.  “Plan” shall have the meaning set forth in Section 4.1.5.  “Policies” and “Policy” shall mean all insurance provided for in  Section 6.1.1(a) and obtained under valid and enforceable policies.    “Premiums” shall mean all premiums for the insurance policies required under this  Agreement.   “Prepayment Commencement Date” shall mean December 1, 2022.  “Prepayment Fee” shall be equal to (x) one percent (1%) of the amount of the  principal being prepaid, if paid during the nineteenth (19th) through twenty-fourth (24th) full  calendar month following the Advance Date, and (y) one-half of one percent (0.50%) of the  amount of the principal being prepaid if paid during the twenty-fifth (25th) through thirty-sixth  

 

10  Cortona – Loan Agreement    (36th) full calendar month following the Advance Date, and (z) zero if paid during the thirty-  seventh (37th) full calendar month following the Advance Date and thereafter.  “Property” shall mean the fee estate of Borrower, the Improvements thereon and  all personal property owned by Borrower and encumbered by the Security Instrument, together  with all rights pertaining to such property and Improvements, all as more particularly described in  the granting clauses of the Security Instrument.    “Property Transfer” shall have the meaning set forth in Section 8.1.2.    “Rate Reset Date” or collectively, “Rate Reset Dates”, shall have the meaning set  forth in Section 2.2.1(a).    “Rating Agencies” shall mean any nationally recognized statistical rating agency  which has assigned a rating to any Securities.    “REA” shall mean that certain Indenture of Covenants and Restrictions for The  Highlands at Forest Park City of St. Louis, Missouri recorded March 21, 2000 in Book 1624, Page  1970 of the City of St. Louis, Missouri Recorder of Deeds, as affected by that certain Clarification  of Indenture of Covenants and Restrictions for The Highlands at Forest Park City of St. Louis,  Missouri recorded December 29, 2000 in Book 1671, Page 4535 of the City of St. Louis, Missouri  Recorder of Deeds, as amended by that certain First Amendment to Indenture of Covenants and  Restrictions for The Highlands at Forest Park, City of St. Louis, Missouri recorded October 6,  2004 in Book 10062004, Page 232 of the City of St. Louis, Missouri Recorder of Deeds, as  amended by that certain Assignment of Developer Rights recorded October 6, 2004 in Book  10062004, Page 231 of the City of St. Louis, Missouri Recorder of Deeds, as amended by that  certain Second Amendment to Indenture of Covenants and Restrictions for The Highlands at Forest  Park, City of St. Louis, Missouri recorded August 29, 2007 in Book 8292007, Page 206 of the City  of St. Louis, Missouri Recorder of Deeds, and as amended by that certain Partial Assignment of  Developer Rights recorded May 22, 2009 in Book 05222009, Page 141 of the City of St. Louis,  Missouri Recorder of Deeds.    “Register” shall have the meaning set forth in Section 2.1.4.  “Registrar” shall have the meaning set forth in Section 2.1.4.  “Remedial Work” shall mean any investigation or monitoring of site conditions or  any clean up, containment, restoration, removal or other remedial work.    “Rent Roll” shall have the meaning set forth in Section 4.1.16(a).    “Rents and Profits” shall mean collectively all present and future income, rents,  revenue, profits, proceeds, accounts receivables and other benefits from the Property and all  deposits made with respect to the Property, including, but not limited to, any security given to  utility companies by Borrower, any advance payment of real estate taxes or assessments, or  insurance premiums made by Borrower and all claims or demands relating to such deposits and  other security, including claims for refunds of tax payments or assessments, and all Insurance  Proceeds.  

 

11  Cortona – Loan Agreement    “Replacement Interest Rate Cap Agreement” shall mean any interest rate cap  agreement (together with the confirmation and schedules relating thereto), in form and substance  satisfactory to Lender, between Borrower and the counterparty thereunder which also satisfies the  requirements set forth in Section 2.10.  “Request for Payment” shall have the meaning set forth in Section 6.2.3(b)(ii).  “Requirements” shall mean all laws, ordinances, orders, covenants, conditions and  restrictions and other requirements relating to land and building design and construction, use and  maintenance, that may now or hereafter pertain to or affect the Property or any part of the Property  or the Use, including, without limitation, planning, zoning, subdivision, environmental, air quality,  flood hazard, fire safety, handicapped facilities, building, health, fire, traffic, safety, wetlands,  coastal and other governmental or regulatory rules, laws, ordinances, statutes, codes and  requirements applicable to the Property, including permits, licenses and/or certificates that may be  necessary from time to time to comply with any of the these requirements.    “Requirements for Restoration” shall have the meaning set forth in Section 6.2.3.    “Requirements of Environmental Laws” means all requirements of  environmental, ecological, health, or industrial hygiene laws or regulations or rules of common  law related to the Property, including, without limitation, all requirements imposed by any  environmental permit, law, rule, order, or regulation of any federal, state, or local executive,  legislative, judicial, regulatory, or administrative agency, which relate to (i) exposure to Hazardous  Materials; (ii) pollution or protection of the air, surface water, ground water, land; (iii) solid,  gaseous, or liquid waste generation, treatment, storage, disposal,   or transportation; or  (iv) regulation of the manufacture, processing, distribution and commerce, use, or storage of  Hazardous Materials.    “Restoration” shall have the meaning set forth in Section 6.2.1(b).  “Restoration Funds” shall have the meaning set forth in Section 6.2.3(a).  “Sanctions List” shall have the meaning set forth in Section 4.1.29.  “S&P” shall mean S&P Global Ratings, a division of S&P Global Inc.  “Secondary Financing” shall have the meaning set forth in Section 8.2.  “Secured Indebtedness” shall mean, collectively, the indebtedness evidenced by  the Note with interest at the rates set forth herein, all additional advances or fundings made by  Lender, and any other amounts required to be paid by Borrower under any of the Loan Documents.    “Securities” shall have the meaning set forth in Section 10.1.    “Security Instrument” shall mean that certain first priority Deed of Trust, Security  Agreement and Fixture Filing, dated as of the date hereof, executed and delivered by Borrower as  security for the Loan and encumbering the Property, as the same may be amended, consolidated,  

 

12  Cortona – Loan Agreement    split, spread, severed, restated, replaced, supplemented, renewed, extended or otherwise modified  from time to time.    “Servicer” shall mean a servicer, if any, selected by Lender to service the Loan.  “SNDA” shall have the meaning set forth in Section 5.1.9(b).  “Special Purpose Entity” means a Person, other than a natural person, which, since  the date of its formation and at all times prior to, on and after the date thereof, has not and shall  not:    (i) engage in business other than owning and operating the Property;    (ii) acquire or own a material asset other than the Property and incidental  personal property;    (iii) commingle its assets with the assets of any other person or entity, or  maintain assets in a way difficult to segregate and identify;    (iv) fail to hold itself out to the public as a legal entity separate from any other;    (v) fail to conduct business solely in its name;    (vi) fail to maintain records, accounts or bank accounts separate from any other  person or entity;    (vii) file or consent to a petition pursuant to applicable bankruptcy, insolvency,  liquidation or reorganization statutes, or make an assignment for the benefit of creditors without  the unanimous consent of its shareholders, partners or members, as applicable;    (viii) incur additional indebtedness except for Permitted Indebtedness;    (ix) dissolve, liquidate, consolidate, merge or sell all or substantially all of its  assets; or   (x) modify, amend or revise its organizational documents.  “Standard Lease Form” shall have the meaning set forth in Exhibit B.  “State” shall mean the state where the Property is located.  “Strike Rate” shall have the meaning set forth in Section 2.10.    “Tenant” shall mean any Person obligated by contract or otherwise to pay monies  (including a percentage of gross income, revenue or profits) under any Lease now or hereafter  affecting all or any part of the Property.    “Title Insurance Policy” shall mean an ALTA mortgagee title insurance policy or  policies in the form acceptable to Lender issued with respect to the Property and insuring the lien  

 

13  Cortona – Loan Agreement    of the Security Instrument, together with such endorsements and affirmative coverage as Lender  may require.    “Transfer” shall have the meaning set forth in Section 8.1.    “Treasury Rate” shall mean the annualized yield on securities issued by the United  States Treasury having a maturity equal to the remaining stated term of the Loan, as quoted in the  Federal Reserve Statistical Release H. 15 (519) under the heading “U.S. Government Securities -  Treasury Constant Maturities” for the date which is five (5) Business Days prior to the date on  which prepayment is being made. If this rate is not available as of the date of prepayment, the  Treasury Rate shall be determined by interpolating between the yield on securities of the next  longer and next shorter maturity. If the Treasury Rate is no longer published, Lender shall select  a comparable rate.    “Trigger Rate” shall have the meaning set forth in Section 2.10.    “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial  Code as in effect in the State.    “U.N. List” shall have the meaning set forth in Section 4.1.29.    “Unsecured Obligations” means any obligations evidenced by or arising under the  Environmental Indemnity.    “Use” shall have the meaning set forth in Section 5.1.13.  “Work” shall have the meaning set forth in Section 6.2.3(a).  Section 1.2 Principles of Construction. All references to sections and  schedules are to sections and schedules in or to this Agreement unless otherwise specified. Any  reference in this Agreement or in any other Loan Document, the Guaranty, if any, or the  Environmental Indemnity to any Loan Document shall be deemed to mean such Loan Document,  Guaranty, if any, or Environmental Indemnity (as applicable) as the same may hereafter be  amended, modified, supplemented, extended, replaced and/or restated from time to time (and, in  the case of any note or other instrument, to any instrument issued in substitution therefor). Unless  otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import  when used in this Agreement shall refer to this Agreement as a whole and not to any particular  provision of this Agreement. Unless otherwise specified, all meanings attributed to defined terms  herein shall be equally applicable to both the singular and plural forms of the terms so defined.    II. THE LOAN    Section 2.1 The Loan.    2.1.1 Agreement to Lend and Borrow. Subject to and upon the terms and  conditions set forth herein, Lender shall make the Loan to Borrower and Borrower shall accept the  Loan from Lender on the Advance Date.  

 

14  Cortona – Loan Agreement    2.1.2 Single Disbursement to Borrower. Borrower shall receive only one  disbursement hereunder in respect of the Loan and any amount borrowed and repaid hereunder in  respect of the Loan may not be reborrowed.    2.1.3 The Note. The Loan shall be evidenced by the Note and shall be repaid in  accordance with the terms of this Agreement and the Note.    2.1.4 Register and Participant Register. As a material inducement to Lender  making the Loan, Borrower hereby appoints Lender to serve as Borrower’s non-fiduciary agent,  which agency is coupled with an interest, solely for purposes of this Section 2.1.4, to maintain a  register of the names and addresses of all holders of direct interests in the Loan (each a “Co- Lender”), and the principal amount and stated interest thereon, pursuant to the terms hereof from  time to time while Lender is a holder of the Loan (the “Register”). If Lender or any Co- Lender  sells a participation in the Loan, Lender or Co-Lender (as applicable) shall maintain a register of  the name and address of each participant and the principal amounts and stated interest of each  participant’s interest in the Loan pursuant to the terms hereof from time to time while Lender or  Co-Lender (as applicable) is a holder of the Loan (the “Participant Register”). Each of the  Register and Participant Register may be a systems-generated printout from Lender’s or Co-  Lender’s (as applicable) mortgage information system. Lender may delegate its obligations with  respect to the Register and Participant Register to its agent, asset manager or designee. As used  herein, the term “Registrar” shall mean the Person or Persons appointed to maintain the Register  and Participant Register pursuant to this Section 2.1.4. Borrower acknowledges and agrees that  no Lender, Co-Lender or Registrar shall have any obligation to disclose all or any portion of the  Participant Register (including the identity of any participant or any information relating to a  participant’s interest in any obligations under any Loan Document) to any Person except to the  extent that such disclosure is necessary to establish that a participant’s interest is in registered form  under Section 5f.103-1(c) of the United States Treasury Regulations.    The entries in the Register shall be conclusive absent manifest error, and Borrower, Lender  and any Co-Lender shall treat each Person whose name is recorded in the Register pursuant to the  terms hereof as a Co-Lender hereunder for all purposes of this Agreement. The Register shall be  available for inspection by Borrower and any Co-Lender, at any reasonable time and from time to  time upon reasonable prior notice. The entries in the Participant Register shall be conclusive  absent manifest error, and Lender and any Co-Lender (as applicable) shall treat each Person whose  name is recorded in the Participant Register as the owner of such participation for all purposes of  this Agreement notwithstanding any notice to the contrary.    Registrar’s failure to maintain such Register and Participant Register, or any error therein,  shall not affect Borrower’s obligations in respect of the Loan, and Borrower hereby waives any  and all claims against Registrar, Lender and Co-Lender (as applicable) for losses, expenses, costs  and/or damages arising out of or relating to such failure.    Notwithstanding anything to the contrary contained in this Agreement, the Loan (including  any Note evidencing such Loan) is a registered obligation, and the right, title and interest of the  Co-Lenders in and to such Loan shall be transferable only upon notation of such transfer in the  Register and no assignment thereof shall be effective until recorded therein. This Section 2.1.4  and Section 10.1 shall be construed so that the Loan is at all times maintained in “registered form”  

 

15  Cortona – Loan Agreement    within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code. For the avoidance of  doubt, the provisions of this Section 2.1.4 shall not limit any right of any holder of the Loan to  assign its interest in the Loan or any portion thereof, provided that as long as Lender holds a note  evidencing the Loan, such assignment is recorded in the Register. Upon repayment of the Loan,  including, without limitation, upon an assignment of the Note and Mortgage to a new lender in  connection with the refinancing of the Loan or the obtaining of a new loan, Lender named herein  (and Co-Lender, if applicable) shall automatically cease to be Registrar and shall no longer  maintain such Register or any Participant Register, nor shall it be required to register such  assignment of the Note and Mortgage, and Borrower shall automatically become Registrar for the  Register unless and until it affirmatively appoints a replacement registrar to assume such duties.  Notwithstanding the foregoing, there is no Co-Lender in the Loan.    Section 2.2 Interest Rate.    2.2.1 Payment of Principal and Interest. Principal and interest under the Loan  shall be payable as follows:    (a) The initial Interest Rate is 2.65%. The Interest Rate will be reset by  Lender, effective as of the first day of the first month following the month during which the  Advance Date occurs, and effective the first day of the first month of each successive one month  period thereafter during the term of the Loan (individually a “Rate Reset Date” and collectively  “Rate Reset Dates”). The Interest Rate will be reset as aforesaid to the annual rate equal to the  greater of (a) 2.65% or (b) the sum of (i) 240 basis points (2.40%) plus (ii) the LIBOR Rate in  effect at the close of business in London on the second LIBOR Business Day prior to each of the  Rate Reset Dates.    (b) Borrower shall pay interest only for the period from the Advance Date  and ending on the last day of the month in which the Advance Date occurs. Borrower shall make  such payment of interest only in advance on the Advance Date and shall then pay interest only in  arrears, on the first day of the second month following the Advance Date and thereafter Borrower  shall make payments of interest only on the first day of each month through and including the  eighty-fourth (84th) full calendar month following the Advance Date. The entire outstanding  principal balance of the Loan together with all accrued interest and all other sums due under the  Loan Documents, shall be paid on the first day of the eighty-fifth (85th) month following the  Advance Date unless the Advance Date occurs on the first (1st) of the month, in which case the  maturity date shall be the eighty-fourth (84th) month following the month in which the Advance  Date occurs (the “Maturity Date”). Interest shall be calculated on a daily basis of the actual  number of days elapsed over a 360-day year.    (c) On the Maturity Date, a final payment in the aggregate amount of the  unpaid principal sum evidenced by the Note, all accrued and unpaid interest, and all other unpaid  amounts of the Secured Indebtedness shall become immediately payable in full.    (d) Borrower acknowledges and agrees that a substantial portion of the  original Loan Amount shall be outstanding and due on the Maturity Date.  

 

16  Cortona – Loan Agreement    Section 2.3 Application of Payments. At the election of Lender, and to the  extent permitted by law, all payments shall be applied in the order selected by Lender to any  expenses, prepayment fees, late charges, escrow deposits and other sums due and payable under  the Loan Documents, and to unpaid interest at the Interest Rate or at the Default Rate, as applicable.  The balance of any payments shall be applied to reduce the then unpaid Loan Amount.    Section 2.4 Security. The covenants of the Security Instrument are  incorporated by reference into this Agreement. The Note shall evidence, and the Security  Instrument shall secure, the Secured Indebtedness.    Section 2.5 Late Charge. If any payment of interest and/or principal (other than  the outstanding principal balance of the Loan on the Maturity Date), or any payment of a required  escrow deposit is not paid within seven (7) days after the due date, Lender shall have the option to  charge Borrower the Late Charge. The Late Charge is for the purpose of defraying the expenses  incurred in connection with handling and processing delinquent payments and is payable in  addition to any other remedy Lender may have. Unpaid Late Charges shall become part of the  Secured Indebtedness and shall be added to any subsequent payments due under the Loan  Documents.    Section 2.6 Acceleration Upon Event of Default. At the option of Lender, if  Borrower fails to pay any sum specified in this Agreement or the Note within seven (7) days after  the due date, or if any other Event of Default occurs, the Accelerated Loan Amount shall become  immediately due and payable.    Section 2.7 Interest Upon Event of Default. The Accelerated Loan Amount  shall bear interest at the Default Rate which shall never exceed the maximum rate of interest  permitted to be contracted for under the laws of the State. The Default Rate shall commence upon  the occurrence of an Event of Default and shall continue until all defaults are cured.    Section 2.8 Limitation on Interest. The agreements made by Borrower with  respect to this Agreement, the Note and the other Loan Documents are expressly limited so that in  no event shall the amount of interest received, charged or contracted for by Lender exceed the  highest lawful amount of interest permissible under the laws applicable to the Loan. If at any time  performance of any provision of this Agreement, the Note or the other Loan Documents results in  the highest lawful rate of interest permissible under applicable laws being exceeded, then the  amount of interest received, charged or contracted for by Lender shall automatically and without  further action by any party be deemed to have been reduced to the highest lawful amount of interest  then permissible under applicable laws. If Lender shall ever receive, charge or contract for, as  interest, an amount which is unlawful, at Lender’s election, the amount of unlawful interest shall  be refunded to Borrower (if actually paid) or applied to reduce the then unpaid Loan Amount. To  the fullest extent permitted by applicable laws, any amounts contracted for, charged or received  under the Loan Documents included for the purpose of determining whether the Interest Rate  would exceed the highest lawful rate shall be calculated by allocating and spreading such interest  to and over the full stated term of the Loan.    Section 2.9 Prepayment. Borrower shall not have the right to prepay all or any  portion of the Loan Amount at any time during the term of this Loan except as expressly set forth  

 

17  Cortona – Loan Agreement    in this Section 2.9. If Borrower provides notice of its intention to prepay, the Accelerated Loan  Amount shall become due and payable on the date specified in the prepayment notice.    2.9.1 Prepayment Fee. The Loan may not be prepaid in whole or in part  at any time prior to the Maturity Date except as follows: commencing on the Prepayment  Commencement Date, Borrower may prepay the Secured Indebtedness subject to the Prepayment  Fee on no less than ten (10) days’ prior written notice to Lender; provided, however, that (A) any  such prepayment notice shall be revocable by Borrower with written notice to Lender at least one  (1) Business Day prior to the proposed prepayment date, so long as in any event Borrower  indemnifies and holds Lender harmless from and against any out-of-pocket costs and expenses  incurred by Lender as a consequence of any such revocation of a prepayment notice, which  amounts shall be payable within ten (10) Business Days of Lender’s written demand therefor, and  (B) Borrower shall not be entitled to revoke more than one (1) prepayment notice during any  twelve (12) month period of the term of the Loan. Any tender of payment by Borrower or any  other person or entity of the Secured Indebtedness, other than as expressly provided in the  preceding sentence, shall constitute a prohibited prepayment. If a prepayment of all or any part of  the Secured Indebtedness is made following (i) an Event of Default and an acceleration of the  Maturity Date, (ii) the application of money to the principal of the Loan after a casualty or  condemnation, or (iii) in connection with a purchase of the Property or a repayment of the Secured  Indebtedness at any time before, during or after, a judicial or non-judicial foreclosure or sale of  the Property, then to compensate Lender for the loss of the investment, if such event occurs prior  to the Prepayment Commencement Date, Borrower shall pay to Lender an amount equal to the  Default Prepayment Fee. Notwithstanding the foregoing, so long as Borrower makes a good faith  effort to recover any Default Prepayment Fee which would be due as a result of a casualty or  condemnation, from the insurer in the case of a casualty or from the condemning authority, then  the Default Prepayment Fee due as a result of the casualty or condemnation shall be waived except  to the extent recovered by Borrower. Lender will, upon request, provide an estimate of the amount  of the Prepayment Fee two (2) weeks before the date of the scheduled prepayment.    2.9.2 Waiver of Right to Prepay Note Without Prepayment Fee or  Default Prepayment Fee. Borrower acknowledges that Lender has relied upon the anticipated  investment return under the Note and this Agreement in entering into transactions with, and in  making commitments to, third parties and that the tender of any prohibited prepayment or any  permitted prepayment which pursuant to the terms of the Note and/or this Agreement requires a  Prepayment Fee or Default Prepayment Fee shall include the Prepayment Fee or Default  Prepayment Fee, as applicable. Borrower agrees that the determination of the Interest Rate was  based on the intent, expectation and agreement (and the Interest Rate would have been higher  without such agreement) of Borrower and Lender that the amounts advanced under the Note and  this Agreement would not be prepaid during the term of this Loan, or if any such prepayment  would occur, the Prepayment Fee or Default Prepayment Fee would apply (except as expressly  permitted by the terms of this Agreement and the Note). Borrower also agrees that the Prepayment  Fee or Default Prepayment Fee represents the reasonable estimate of Lender and Borrower of a  fair average compensation for the loss that may be sustained by Lender as a result of a prepayment  of the Loan and it shall be paid without prejudice to the right of Lender to collect any other amounts  provided to be paid under the Loan Documents.  

 

18  Cortona – Loan Agreement    BORROWER EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER THE LAWS  OF THE STATE OF MISSOURI TO PREPAY THE LOAN, IN WHOLE OR IN PART,  WITHOUT FEE OR PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF  THE LOAN, AND (B) AGREES THAT IF, FOR ANY REASON, A PREPAYMENT OF THE  LOAN IS MADE, UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY  DATE OF THE LOAN BY LENDER ON ACCOUNT OF ANY DEFAULT BY BORROWER  UNDER ANY LOAN DOCUMENT, INCLUDING, BUT NOT LIMITED TO, ANY  TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION WHICH IS PROHIBITED OR  RESTRICTED BY THIS AGREEMENT, THE SECURITY INSTRUMENT OR ANY OF THE  OTHER LOAN DOCUMENTS, THEN BORROWER SHALL BE OBLIGATED TO PAY  LENDER CONCURRENTLY THE DEFAULT PREPAYMENT FEE. BY EXECUTING THE  NOTE AND THIS AGREEMENT, BORROWER AGREES THAT LENDER’S AGREEMENT  TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN  THIS AGREEMENT CONSTITUTES ADEQUATE CONSIDERATION FOR THIS WAIVER  AND AGREEMENT.    Section 2.10 Interest Rate Cap Agreement.    If at any time the LIBOR Rate exceeds one and one-half percent (1.5%) (the  “Trigger Rate”), which Trigger Rate is subject to modification by Lender to account for a change  in the benchmark rate in accordance with Section 1.1 - definition of “LIBOR Rate”, for three (3)  consecutive Business Days, Borrower shall, within fifteen (15) days after written demand by  Lender, enter into an Interest Rate Cap Agreement which shall protect against the LIBOR Rate  exceeding two and one-half percent (2.5%) (the “Strike Rate”), which Strike Rate is subject to  modification by Lender to account for a change in the benchmark rate in accordance with  Section 1.1 - definition of “LIBOR Rate”.    The Interest Rate Cap Agreement (i) shall be in form reasonably acceptable to  Lender, (ii) shall be with a counterparty acceptable to Lender and which counterparty shall have a  credit rating of “A2” or better by Moody’s and “A” or better by S&P, (iii) shall direct such  acceptable counterparty to deposit any and all payments due under the Interest Rate Cap  Agreement directly into an account designated by Lender so long as any portion of the Loan  remains outstanding, provided however, for purposes of this requirement, the Loan shall be  deemed to be remaining outstanding if the Property is transferred to Lender (or its nominee or  designee) by judicial foreclosure or non-judicial foreclosure or by deed-in-lieu thereof, (iv) shall  be for a term equal to the term of the Loan, and (v) shall have an initial notional amount equal to  the principal balance of the Loan. No later than the date on which Borrower enters into an Interest  Rate Cap Agreement (or any replacement thereof) in accordance with this Section 2.10 (the “Cap  Date”), Borrower shall collaterally assign to Lender, pursuant to an assignment which is in form  and substance acceptable to Lender, all of its right, title and interest to receive any and all payments  under the Interest Rate Cap Agreement (or any replacement thereof), and no later than fifteen  (15) days following the Cap Date Borrower shall deliver to Lender an executed counterpart of such  Interest Rate Cap Agreement and an executed counterpart to such assignment from the  counterparty under the Interest Rate Cap Agreement (or any replacement thereof), which shall by  their terms authorize the assignment to Lender and require that payments be deposited directly into  the account as shall be designated by Lender. Borrower shall comply with all of its obligations  under the Interest Rate Cap Agreement. All amounts paid by the counterparty under the Interest  

 

19  Cortona – Loan Agreement    Rate Cap Agreement to Borrower or Lender shall be deposited immediately into such account as  shall be designated by Lender. The Interest Rate Cap Agreement and the aforesaid account  designated by Lender shall be deemed to be part of the Property for purposes of Section 12.20.  Borrower shall take all actions reasonably required by Lender to enforce Lender’s rights under the  Interest Rate Cap Agreement in the event of a default by the counterparty and shall not waive,  amend or otherwise modify any of its rights thereunder. In the event of a downgrade of the rating  of the counterparty below in “A3” by Moody’s or below “A” by S&P (“Counterparty Rating  Downgrade”) or if any such rating is withdrawn or qualified, at Lender’s option, Borrower shall  replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement with a  counterparty acceptable to Lender not later than ten (10) Business Days following receipt of notice  from Lender of such downgrade, withdrawal or qualification. In the event that Borrower fails to  purchase, deliver and/or maintain the Interest Rate Cap Agreement or any replacement thereof as  required hereby, Lender may (in addition to exercising any of its other rights and  remedies) purchase such Interest Rate Cap Agreement or any replacement thereof and the costs  incurred by Lender in purchasing and maintaining the same shall be paid by Borrower with interest  thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid  by Borrower to Lender. In connection with the Interest Rate Cap Agreement and each replacement  thereof, and no later than thirty (30) days following the Cap Date, Borrower shall obtain and  deliver to Lender an opinion of counsel for the counterparty (upon which Lender and its successors  and assigns may rely) in form, scope and substance acceptable to Lender regarding the  authorization of the counterparty, the legality, validity, and binding effect of the Interest Rate Cap  Agreement or replacement thereof, as applicable, and such other matters as Lender shall  reasonably require. Borrower shall pay all reasonable costs and expenses incurred by Lender in  connection with the Interest Rate Cap Agreement or any replacement or modification thereof as  required hereby, including documentation costs and reasonable attorneys’ fees.    In addition to the foregoing, if (x) Borrower has entered into an Interest Rate Cap  Agreement in accordance with this Section based upon the LIBOR Rate (the “Existing Rate  Cap”); and (y) the Interest Rate is no longer determined by reference to LIBOR as set forth in  Section 1.1 - definition of “LIBOR Rate”, then Borrower shall, at Borrower’s sole cost and  expense, not later than fifteen (15) days prior to the first payment date under the Loan based on  the benchmark rate which has replaced LIBOR in accordance with Section 1.1 - definition of  “LIBOR Rate”, (i) make such amendments, modifications or revisions to the Existing Rate Cap or  (ii) deliver a substitute Interest Rate Cap Agreement to replace the Existing Rate Cap, in each case,  acceptable to Lender, which substitutes the benchmark rate which has replaced LIBOR, is  otherwise in accordance with the requirements set forth in this Section 2.10 and which, in either  instance, provides Lender a hedge against rising interest rates that is no less beneficial to Lender  than that which was originally provided by the Existing Rate Cap.    Section 2.11 Excess Cash Flow Reserve. On each monthly payment date  occurring on and after the occurrence and continuance of a Cash Management Period (as defined  in the Cash Management Agreement), Borrower shall deposit (or cause to be deposited) into an  account with Lender or Servicer (the “Excess Cash Flow Account”) an amount equal to the  Excess Cash Flow generated by the Property for the immediately preceding interest accrual period  (each such monthly deposit being herein referred to as the “Monthly Excess Cash Flow Deposits”  and the amounts on deposit in the Excess Cash Flow Account being herein referred to as the  “Excess Cash Flow Funds”). The Excess Cash Flow Funds shall be held by Lender as additional  

 

20  Cortona – Loan Agreement    collateral for the Loan. Provided no Event of Default has occurred and is continuing, any Excess  Cash Flow Funds remaining in the Excess Cash Flow Account shall be disbursed to Borrower  upon fifteen (15) days written request after the expiration of any Cash Management Period in  accordance with the applicable terms and conditions hereof.    Section 2.12 Cash Management. A property revenue deposit account and cash  management system will be active from and after the Execution Date pursuant to and in accordance  with the terms of the Cash Management Agreement.    III. TAXES, LIENS AND ENCUMBRANCES AND OTHER CHARGES    Section 3.1 Payment of Impositions. Unless otherwise paid to Lender as  provided in Section 5.1.14, Borrower shall pay all Impositions. The Impositions shall be paid not  later than ten (10) days before the dates on which the particular Imposition would become  delinquent and Borrower shall produce to Lender receipts of the imposing authority, or other  evidence reasonably satisfactory to Lender, evidencing the payment of the Imposition in full. If  Borrower elects by appropriate legal action to contest any Imposition, Borrower shall first deposit  cash with Lender as a reserve in an amount which Lender determines is sufficient to pay the  Imposition plus all fines, interest, penalties and costs which may become due pending the  determination of the contest. If Borrower deposits this sum with Lender, Borrower shall not be  required to pay the Imposition provided that the contest operates to prevent enforcement or  collection of the Imposition, and the sale and forfeiture of, the Property, and is prosecuted with  due diligence and continuity. Upon termination of any proceeding or contest, Borrower shall pay  the amount of the Imposition as finally determined in the proceeding or contest. Provided that  there is not then an Event of Default, the monies which have been deposited with Lender pursuant  to this Section shall be applied toward such payment and the excess, if any, shall be returned to  Borrower.    IV. REPRESENTATIONS AND WARRANTIES    Section 4.1    Borrower Representations. Borrower represents and warrants as  of the date hereof that:    4.1.1 Organization.    (a) The execution of the Loan Documents and the Environmental  Indemnity have been duly authorized and there is no provision in the organizational documents of  Borrower requiring further consent for such action by any other entity or person.    (b) It is duly organized, validly existing and is in good standing under  the laws of the state of its formation and in the State, and it has all necessary licenses,  authorizations, registrations, permits and/or approvals to own its properties and to carry on its  business as presently conducted.    (c) The execution, delivery and performance of the Loan Documents  and the Environmental  Indemnity will not result in Borrower’s being in default under any  provision of its organizational documents or of any deed of trust, mortgage, lease, credit or other  agreement to which it is a party or which affects it or the Property.  

 

21  Cortona – Loan Agreement    (d) The Loan Documents and the Environmental Indemnity have been  duly authorized, executed and delivered by Borrower and constitute valid and binding obligations  of Borrower which are enforceable in accordance with their terms.    4.1.2 Litigation. Neither Borrower nor any of Borrower’s Constituents  is involved in any litigation, arbitration, or other proceeding or governmental investigation that is  currently pending and which if determined adversely would materially adversely affect Borrower’s  ability to perform in accordance with the Loan Documents or the Environmental Indemnity.    4.1.3 Agreements. Borrower is not in default with respect to any order  or decree of any court or any order, regulation or demand of any Governmental Authority, which  default would be reasonably likely to materially and adversely affect the condition (financial or  other) or operations of the Property or Borrower or Borrower’s ability to perform its obligations  hereunder or under the Loan Documents or the Environmental Indemnity. Borrower has complied  with all requirements of all instruments and agreements affecting the Property, whether or not of  record, including, without limitation, all covenants and agreements by and between Borrower and  any governmental or regulatory agency pertaining to the development, use or operation of the  Property.    4.1.4 Consents. No consent, approval, authorization or order of any court  or Governmental Authority is required for the execution, delivery and performance by Borrower  of, or compliance by Borrower with, this Agreement or any of the other Loan Documents or the  Environmental Indemnity or the consummation of the transactions contemplated hereby or  thereby, other than those which have been obtained by Borrower.    4.1.5 No Plan Assets. (i) Borrower is acting on its own behalf and that it  is not an employee benefit plan as defined in Section 3(3) of ERISA, which is subject to Title 1 of  ERISA, nor a plan as defined in Section 4975(e)(1) of the Code (each of the foregoing hereinafter  referred to collectively as a “Plan”); and (ii) Borrower’s assets do not constitute “plan assets” of  one or more such Plans within the meaning of Department of Labor Regulation Section 2510.3-  101, as modified by Section 3(42) of ERISA.    4.1.6 Compliance. The Improvements and their Use comply with (and,  except as disclosed in the Environmental Report, no notices of violation have been received by  Borrower, Liable Party or any of their agents in connection with) all Requirements and to the best  of Borrower’s knowledge, except as disclosed in the Environmental Report, no notices of violation  have been received by any prior owner of the Property.    4.1.7 Zoning. The zoning approval for the Property is not dependent  upon the ownership or use of any property which is not encumbered by the Security Instrument.    4.1.8 Financial Information. All financial statements, including,  without limitation, the statements of cash flow and income and operating expense, that have been  delivered to Lender in respect of the Property and/or in connection with the Loan (i) are true,  complete and correct in all material respects as of the date of such reports, (ii) accurately represent  the financial condition of the Property as of the date of such reports, and (iii) have been prepared  in accordance with GAAP throughout the periods covered. Borrower does not have any contingent  

 

22  Cortona – Loan Agreement    liabilities, liabilities for taxes, unusual forward or long term commitments or unrealized or  anticipated losses from any unfavorable commitments that are known to Borrower and which are,  individually or in the aggregate, reasonably likely to have a materially adverse effect on the  Property or the operation thereof, except as referred to or reflected in the most recent financial  statements of Borrower delivered to Lender. Since the date of such financial statements, there has  been no material adverse change in the financial condition, operations or business of Borrower,  Borrower’s Constituents, Liable Party (if any) or the Property from that set forth in the financial  statements.    4.1.9 Casualty and Condemnation. Except as expressly approved by  Lender in writing, no casualty or damage to any part of the Property that would cost more than  $50,000 to restore or replace has occurred which has not been fully restored or replaced. No part  of the Property has been taken in Condemnation or other similar proceeding or transferred in lieu  of Condemnation, nor has Borrower received notice of any proposed Condemnation or other  similar proceeding affecting the Property. As of the Execution Date, no Condemnation or other  proceeding has been commenced, is pending or, to Borrower’s best knowledge, is contemplated  with respect to all or any portion of the Property or for the relocation of roadways providing access  to the Property.    4.1.10 Enforceability. The Loan Documents and the Environmental  Indemnity are not subject to any right of rescission, set off, counterclaim or defense by Borrower,  including the defense of usury, nor would the operation of any of the terms of the Loan Documents  or the Environmental Indemnity, or the exercise of any right thereunder, render the Loan  Documents or the Environmental Indemnity unenforceable, and Borrower has not asserted any  right of rescission, set off, counterclaim or defense with respect thereto.    4.1.11 Assignment of Leases. Pursuant to the Assignment of Leases,  Borrower has assigned the Leases and the Rents and Profits to Lender. Borrower acknowledges  that it is permitted to collect certain of the Rents and Profits pursuant to a revocable license as set  forth in the Assignment of Leases. No Person other than Lender has any interest in or assignment  of the Leases or any portion of the Rents and Profits due and payable or to become due and payable  thereunder.    4.1.12 Insurance. Borrower has obtained and has delivered to Lender  evidence of all of the Policies, with all premiums prepaid thereunder, reflecting the insurance  coverages, amounts and other requirements set forth in this Agreement. No claims have been  made under any of the Policies, and no Person, including Borrower, has done, by act or omission,  anything which would impair the coverage of any of the Policies.    4.1.13 Licenses. All authorizations, permits, licenses, including, without  limitation, liquor licenses, if any, and operating permits, required by any Governmental Authority  for the use, occupancy and operation of the Property in the manner in which the Property is  currently being used, occupied and operated have been obtained, paid for and are in full force and  effect and, to the knowledge of Borrower, all Tenants have such permits and approvals as are  required by any Governmental Authority for the use, occupancy and operation of the premises  demised under their respective Leases.  

 

23  Cortona – Loan Agreement    4.1.14 Flood Zone. None of the Improvements on the Property is located  in an area identified by the Federal Emergency Management Agency as a special flood hazard  area.    4.1.15 Physical Condition. Except as otherwise disclosed to Lender in the  Property Condition Report, the Property, including, without limitation, all buildings,  improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,  HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings  and doors, landscaping, irrigation systems and all structural components, are in good condition,  order and repair; there exists no structural or other material defects or damages in the Property,  whether latent or otherwise, and Borrower has not received notice from any insurance company or  bonding company of any defects or inadequacies in the Property, or any part thereof, which would  adversely affect the insurability of the same or cause the imposition of extraordinary premiums or  charges thereon or of any termination or threatened termination of any policy of insurance or bond.  Construction of the Improvements on the Property is complete.    4.1.16 Leases.    (a) The rent roll attached hereto as Exhibit C (the “Rent Roll”) is true,  correct and complete and there are no Leases affecting the Property except those Leases identified  on the Rent Roll. Borrower has delivered to Lender true, correct and complete copies of all  existing Leases, including all existing modifications and amendments, and including all existing  Lease Guaranties (collectively, “Existing Leases”). All agreements between the landlord and  Tenant or between the landlord and any guarantor pertaining to any of such Leases are set forth in  writing and are included in such copies that have been so delivered.    (b) There are no defaults by Borrower under the Existing Leases. To  the best knowledge of Borrower, there are no defaults by any Tenants under the Existing Leases  nor by any guarantors under the existing Lease Guaranties. The Existing Leases, including the  existing Lease Guaranties, are in full force and effect.    (c) Except as expressly provided in any Existing Lease, no Existing  Lease may be amended, terminated or canceled unilaterally by a Tenant, and no Tenant may be  released from its obligations, except in the event of material casualty or Condemnation.    (d) Except only for rent and additional rent for the current month,  Borrower has not accepted any payment of rent more than one month in advance of its due date,  nor any security deposit in an amount exceeding one month’s rent.    (e) Except as may be expressly provided in any Existing Leases, no  rental concessions, including abated rent, is available to any Tenant under any Existing Lease and  under Existing Leases, Borrower, as landlord, has no responsibility to any Tenant to provide  utilities, services, furniture or amenities, except as expressly set forth in the Existing Leases.    (f) All Leases executed after the Execution Date shall be on a standard  form of lease which shall be subject to Lender’s approval. Leases entered into after the Execution  Date which are not on the standard form or which do not comply with the Leasing Guidelines (as  

 

24  Cortona – Loan Agreement    defined below) must be Approved by Lender, such approval not to be unreasonably withheld,  conditioned or delayed.    4.1.17 Filing and Recording Taxes. All transfer taxes, deed stamps,  intangible taxes or other amounts in the nature of transfer taxes required to be paid by Borrower  under applicable Requirements in connection with the transfer of the Property to Borrower have  been paid or are being paid simultaneously herewith. All mortgage, mortgage recording, stamp,  intangible or other similar tax required to be paid under applicable Requirements in connection  with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of  the Loan Documents, including, without limitation, the Security Instrument, have been paid or are  being paid simultaneously herewith. All taxes and governmental assessments due and owing in  respect of the Property have been paid, or an escrow of funds in an amount sufficient to cover such  payments has been established hereunder or are insured against by the Title Insurance Policy.    4.1.18 Special Purpose Entity/Separateness.    (a) Borrower is a Special Purpose Entity.    (b) The Property has “single asset real estate” status as defined by  Section 101(51)(B) of the Bankruptcy Code.    (c) The organizational documents of Borrower and its controlling  constituent entities, as in effect on the date hereof, have been approved by Lender.    (d) The representations and warranties set forth in this Section 4.1.18  shall survive for so long as any amount remains payable to Lender under this Agreement or any  other Loan Document.    4.1.19 Solvency. Borrower (a) has not entered into the transaction  contemplated by this Agreement or any Loan Document or the Environmental Indemnity with the  actual intent to hinder, delay, or defraud any creditor and (b) has received reasonably equivalent  value in exchange for its obligations under the Loan Documents and the Environmental Indemnity.  Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will,  immediately following the making of the Loan, exceed Borrower’s total liabilities, including,  without limitation, subordinated, unliquidated, disputed and contingent liabilities. Borrower’s  assets do not and, immediately following the making of the Loan will not, constitute unreasonably  small capital to carry out its business as conducted or as proposed to be conducted.    4.1.20 Organizational Chart. The organizational chart attached as  Exhibit D hereto, relating to Borrower and certain Affiliates and other parties, is true, complete  and correct on and as of the date hereof and shows all Persons holding direct or indirect ownership  interests in Borrower. Borrower has delivered to Lender true and correct copies of all Borrower’s  organizational documents and except as expressly approved by Lender in writing, there have been  no changes in Borrower’s Constituents since the date that the Application was executed by  Borrower.  

 

25  Cortona – Loan Agreement    4.1.21 Material Agreements. Attached hereto as Schedule 4.1.21 is a list  of all Material Agreements, true and complete copies of each of which have been delivered to  Lender.    4.1.22 No Other Debt. Borrower has not borrowed or received debt  financing (other than permitted pursuant to this Agreement) that has not been heretofore repaid in  full.    4.1.23 No Bankruptcy Filing. Neither Borrower, nor any of Borrower’s  Constituents, is involved in any bankruptcy, reorganization, insolvency, dissolution or liquidation  proceeding, and to the best knowledge of Borrower, no such proceeding is contemplated or  threatened.    4.1.24 Full and Accurate Disclosure. No information contained in this  Agreement, the other Loan Documents or the Environmental Indemnity, or in any written  statement furnished by or on behalf of Borrower pursuant to the terms of this Agreement contains  any untrue statement of a material fact or omits to state a material fact necessary to make the  statements contained herein or therein not misleading in any material respect in light of the  circumstances under which they were made. There is no fact or circumstance presently known to  Borrower which has not been disclosed to Lender and which materially adversely affects, or is  reasonably likely to materially adversely affect, the Property, Borrower or its business, operations  or condition (financial or otherwise).    4.1.25 Foreign Person. Borrower is not and will not be (and, if Borrower  is a disregarded entity for U.S. federal income tax purposes, the nearest direct or indirect sole  owner of Borrower that is not disregarded is not and will not be) a “foreign person” within the  meaning of Sections 1445 and 7701 of the Code.    4.1.26 No Change in Facts or Circumstances; Disclosure. There has  been no material adverse change from the conditions shown in the Application or in the materials  submitted in connection with the Application or in the credit rating or financial condition of  Borrower, any of Borrower’s Constituents or Liable Party (if any).    4.1.27 Management Agreement. Borrower has provided to Lender a true,  correct and complete copy of the Management Agreement. The Management Agreement is in full  force and effect and no event of default has occurred thereunder nor has any event under the  Management Agreement occurred which, but for the giving of notice, or passage of time, or both  would be an event of default thereunder. All fees payable to Manager as of the Execution Date  have been paid in full.    4.1.28 Non-Relationship. No person with a ten percent (10%) or more  direct or indirect interest in Borrower is a director or officer of Metropolitan Life Insurance  Company or any of its U.S. affiliated insurance companies. In addition, to Borrower’s actual  knowledge (without investigation), no director or officer of Borrower, nor any person with any  direct or indirect interest in Borrower is a director or officer of Metropolitan Life Insurance  Company or any of its U.S. affiliated insurance companies.  

 

26  Cortona – Loan Agreement    4.1.29 US Patriot Act. Neither Borrower, nor any of Borrower’s  Constituents, nor Liable Party, nor any Person holding in the aggregate twenty percent (20%) or  more of the direct or indirect equity interests in Liable Party, is or will be (A) (i) subject to a U.S.  comprehensive sanctions program administered by the U.S. Treasury Office of Foreign Assets  Control (“OFAC”), or (ii) held by a person or entity (x) named on OFAC’s U.S. Specially  Designated Nationals list, or (y) named on OFAC’s Sectoral Sanctions Identifications list ((i) and  (ii) collectively the “OFAC Sanctions Lists”), (B) named on any other locally required sanctions  lists (“Country Lists”) or (C) named on the United Nations Security Council’s sanctions list (the  “U.N. List” and together with the OFAC Sanctions Lists and the Country Lists, the “Sanctions  Lists”); and Borrower shall provide evidence as reasonably requested by Lender from time to time,  to confirm compliance.    4.1.30 Criminal Acts. Neither Borrower nor any of Borrower’s  Constituents has been convicted of, or been indicted for, a felony criminal offense.    4.1.31 No Defaults. Neither Borrower nor any of Borrower’s Constituents  is in default under any mortgage, deed of trust, note, loan or credit agreement.    4.1.32 Intentionally Omitted.    4.1.33 Personal Property. Borrower owns the Personal Property free  from any lien, security interest, encumbrance or adverse claim, except as otherwise expressly  approved by Lender in writing. The Personal Property has not been used or bought for personal,  family, or household purposes, but has been bought and used solely for the purpose of carrying on  Borrower’s business.    4.1.34 Intentionally Omitted.    4.1.35 O&M Agreement. The O&M Agreement, if any, is in full force  and effect and there is no default thereunder by any party thereto and no event has occurred that,  with the passage of time and/or the giving of notice would constitute a default thereunder.    4.1.36 REA. The REA is in full force and effect and neither Borrower nor,  to Borrower’s knowledge, any other party to the REA, is in default thereunder, and to the best of  Borrower’s knowledge, there are no conditions which, with the passage of time or the giving of  notice, or both, would constitute a default thereunder. Except as set forth on Schedule 4.1.36, the  REA has not been modified, amended or supplemented.    V. BORROWER COVENANTS    Section 5.1 Borrower Affirmative Covenants. From the date hereof until  payment of the Secured Indebtedness in full, Borrower hereby covenants and agrees with Lender  that:    5.1.1 Existence; Compliance with Requirements. Borrower shall do or  cause to be done all things necessary to preserve, renew and keep in full force and effect its  existence, rights, licenses, permits and franchises and comply with all present and future  Requirements affecting or relating to Borrower, the Property and/or the Use. Borrower shall not  

 

27  Cortona – Loan Agreement    use the Property, or any part thereof, for any illegal purpose, and Borrower shall use all  commercially reasonable efforts to prevent Tenants from using the Property, or any part thereof,  for any illegal purpose. Borrower shall furnish to Lender, on request, proof of compliance with  the Requirements.    5.1.2 Litigation. Borrower shall give prompt notice to Lender of any  litigation or governmental proceedings pending or threatened in writing against Borrower, Liable  Party, if any, or the Property which could, if determined adversely to Borrower, Liable Party, if  any, or the Property, be reasonably expected to adversely affect the Property, Liable Party, if any,  or Borrower’s ability to perform its obligations hereunder or under the other Loan Documents, the  Guaranty, if any, or the Environmental Indemnity.    5.1.3 Access to Property. Lender shall have the right, at any time and  from time to time during normal business hours, upon forty-eight (48) hours’ prior email request  to Borrower or without prior request in an emergency, to enter the Property in order to ascertain  Borrower’s compliance with the Loan Documents, to examine the condition of the Property, to  perform an appraisal, to undertake surveying or engineering work (to the extent reasonably  warranted), and to inspect premises occupied by Tenants. Borrower shall cooperate with Lender  in performing these inspections.    5.1.4 Books and Records; Financial Reporting.    5.1.4.1 Borrower shall keep adequate books and records of account  in accordance with GAAP, or in accordance with other methods acceptable to Lender in its sole  discretion, consistently applied and furnish to Lender:    (a) quarterly certified rent rolls signed and dated by Borrower (and  including an electronic copy in Excel® format), detailing the names of all Tenants of the  Improvements, the portion of Improvements occupied by each Tenant, the base rent and any other  charges payable under each Lease and the term of each Lease, including the expiration date, and  any other information as is reasonably required by Lender, within thirty (30) days after the end of  each fiscal quarter;    (b) a quarterly operating statement of the Property and year to date  operating statements detailing the total revenues received, total expenses incurred, total cost of all  capital improvements, total debt service and total cash flow, to be prepared and certified by  Borrower as correct and complete in all material respects, in the form required by Lender, and if  available, any quarterly operating statement prepared by an independent certified public  accountant, within thirty (30) days after the close of each fiscal quarter of Borrower;    (c) an annual balance sheet and profit and loss statement of Borrower  in the form required by Lender, prepared and certified by Borrower, and if available from Borrower  or Liable Party, audited financial statements for Borrower and Liable Party, if any, prepared by an  independent certified public accountant within ninety (90) days after the close of each fiscal year  of Borrower and Liable Party, if any, as the case may be;  

 

28  Cortona – Loan Agreement    (d) an annual operating budget presented on a monthly basis consistent  with the annual operating statement described above for the Property including cash flow  projections for the upcoming one (1) year period and all proposed capital replacements and  improvements at least fifteen (15) days prior to the start of each calendar year;    (e) an annual ARGUS© valuation file in electronic form which  includes, without limitation, a then current rent roll, all income of the Property and all Property  expenses within ninety (90) days after the close of each fiscal year of Borrower; and    (f) any financial statements required pursuant to the Guaranty, if any.    5.1.4.2 Additionally, within fifteen (15) days following the  occurrence of a Cash Management Period (as defined in the Cash Management Agreement),  Borrower shall deliver to Lender a proposed updated annual budget (presented on a monthly basis)  for the Property for the remainder of the then-current calendar year, which shall be subject to  approval by Lender. At all times thereafter (unless and until a Cash Management Period no longer  exists), forty-five (45) days prior to the end of each calendar year, Borrower shall deliver to Lender  a proposed annual budget (presented on a monthly basis for the Property for the following calendar  year, which shall be subject to approval by Lender (any such annual budget that is Approved by  Lender shall be referred to herein as the “Approved Annual Budget”).    5.1.5 Property Reports. Upon prior email request from Lender or its  representatives and designees, Borrower shall furnish in a timely manner to Lender:    (a) a property management report for the Property, showing the number  of inquiries made and/or rental applications received from Tenants or prospective tenants and  deposits received from Tenants and any other information reasonably requested by Lender, in  reasonable detail and certified by Borrower (or an officer, general partner, member or principal of  Borrower if Borrower is not an individual) under penalty of perjury to be true and complete, but  no more frequently than quarterly; and    (b) an accounting of all security deposits held in connection with any  Lease of any part of the Property, including the name and identification number of the accounts in  which such security deposits are held, the name and address of the financial institutions in which  such security deposits are held and the name of the person to contact at such financial institution,  along with any authority or release necessary for Lender to obtain information regarding such  accounts directly from such financial institutions.    5.1.6 Additional Financial or Management Information; Right to  Audit.    (a) Borrower shall furnish Lender with such other additional financial  or management information (including state and federal tax returns) as may, from time to time, be  reasonably required by Lender or the Rating Agencies in form and substance satisfactory to Lender  or the Rating Agencies.    (b) Lender and its representatives shall have the right upon no less than  five (5) business days prior written notice to Borrower (and no notice shall be required if an Event  

 

29  Cortona – Loan Agreement    of Default exists), to examine and audit the records, books, management and other papers of  Borrower and its affiliates or of any guarantor or indemnitor which reflect upon their financial  condition and/or the income, expenses and operations of the Property, at the Property or at any  office regularly maintained by Borrower, its affiliates or any guarantor or indemnitor where the  books and records are located. Lender shall have the right upon notice to make copies and extracts  from the foregoing records and other papers.    (c) Borrower shall furnish Lender and its agents convenient facilities  for the examination and audit of any such books and records.    5.1.7 Title to the Property. Borrower will warrant and defend the  validity and priority of the lien of the Security Instrument and the Assignment of Leases on the  Property against the claims of all Persons whomsoever, subject only to Permitted Exceptions.    5.1.8 Estoppel Statements.    (a) Within ten (10) days after a written request by Lender (which may  be sent via email), Borrower shall furnish an acknowledged written statement in form satisfactory  to Lender, certified to the Certification Parties, (i) setting forth the amount of the Loan and the  interest rate, (ii) stating either that no offsets or defenses exist against the Loan, or if any offsets  or defenses are alleged to exist, their nature and extent, (iii) whether any default then exists under  the Loan Documents or the Environmental Indemnity or any event has occurred and is continuing  that with the lapse of time, the giving of notice, or both, would constitute such a default, and  (iv) any other matters as Lender may reasonably request. If Borrower does not furnish an estoppel  certificate within the 10-day period, Borrower appoints Lender as its attorney-in-fact to execute  and deliver the certificate on its behalf, which power of attorney shall be coupled with an interest  and shall be irrevocable.    (b) Borrower shall deliver to Lender, upon request, estoppel certificates  from each party under the REA; provided that such certificates may be in form required under the  REA; provided, further, that Borrower shall not be required to deliver such certificates more  frequently than two (2) times in any calendar year. Borrower shall endeavor that such certificates  shall be certified to the Certification Parties.    5.1.9 Leases and Other Agreements Affecting the Property.    (a) Borrower shall perform all obligations of landlord under any and all  Leases. Borrower agrees to furnish Lender true, correct and complete executed copies of all future  Leases, within a reasonably prompt time after Lender’s written request.    (b) Borrower shall not, without the prior written consent of Lender,  (i) enter into or extend any Lease unless the Lease complies with the Leasing Guidelines, or  (ii) cancel, terminate or accept surrender of any Lease, except in the case of a material default  thereunder, unless Borrower has entered into a new Lease complying with the provisions set forth  herein and covering all of the premises of the Lease being cancelled, terminated or surrendered, or  (iii) modify or amend any Lease in any material way or reduce any rent under any Lease, or  (iv) consent to a full or partial assignment of the tenant’s interest or to a subletting of all or any  

 

30  Cortona – Loan Agreement    portion of the premises under any Lease, unless the tenant (and any guarantor, if applicable) who  is liable immediately prior to such assignment or subletting covenants to remain fully liable  thereafter, or (v) accept any payment of rent more than one month in advance of its due date, or  accept any security deposit in an amount exceeding one month’s rent, or (vi) enter into any option  to purchase the Property. If any of the acts described in this paragraph are done without the prior  written consent of Lender, at the option of Lender, they shall be of no force or effect and shall  constitute a default under this Agreement. Borrower shall pay all out-of-pocket costs and expenses  incurred by Lender, including reasonable attorneys’ fees, in connection with any Lease, including  in connection with any subordination agreement or nondisturbance agreement (“SNDA”);  provided, however, any Lender’s fees relating to an SNDA, excluding Lender’s attorneys’ fees,  shall be limited to $1,000.    (c) Each Lease affecting the Property shall be absolutely subordinate to  the lien of the Security Instrument and shall also contain a provision, satisfactory to Lender, to the  effect that in the event of the judicial or non-judicial foreclosure of the Property, at the election of  Lender or the acquiring foreclosure purchaser, the Lease may be superior to the lien of the Security  Instrument and to require the tenant to attorn to Lender or such purchaser. Any non-residential  tenant, if any, to whom non-disturbance is granted shall execute Lender’s standard form of non-  disturbance agreement. Borrower shall pay costs and expenses incurred by Lender in connection  with granting a non-disturbance agreement.    (d) Borrower covenants and agrees that all contracts and agreements  relating to the Property requiring the payment of leasing commissions or management fees or other  similar compensation shall (i) provide that the obligation will not be enforceable against Lender  and (ii) be subordinate to the lien of the Security Instrument. Lender will be provided evidence of  Borrower’s compliance with this Section 5.1.9(d) upon request.    5.1.10 Material Agreements. Borrower shall (a) promptly perform and/or  observe all of the material covenants and agreements required to be performed and observed by it  under each Material Agreement to which it is a party, and do all things necessary to preserve and  to keep unimpaired its rights thereunder, (b) promptly notify Lender in writing of the giving of any  notice of any default by any party under any Material Agreement of which it is aware and  (c) promptly enforce the performance and observance of all of the material covenants and  agreements required to be performed and/or observed by the other party under each Material  Agreement to which it is a party in a commercially reasonable manner.    5.1.11 Performance by Borrower. Borrower shall in a timely manner  observe, perform and fulfill each and every covenant, term and provision of each Loan Document  and the Environmental Indemnity executed and delivered by Borrower.    5.1.12 Maintenance of the Property. Borrower, at its sole cost and  expense, shall keep the Property in good order, condition and repair, and make all necessary  structural and non-structural, ordinary and extraordinary repairs to the Property and the  Improvements.    5.1.13 Use. Borrower shall use, or cause to be used, the Property  continuously as a multifamily apartment community (the “Use”). Borrower shall not use, or permit  

 

31  Cortona – Loan Agreement    the use of, the Property for any other use without the prior written consent of Lender. Borrower  shall not file or record a declaration of condominium, master mortgage or deed of trust or any other  similar document evidencing the imposition of a so-called “condominium regime” whether  superior or subordinate to the Security Instrument and Borrower shall not permit any part of the  Property to be converted to, or operated as, a “cooperative apartment house” whereby the tenants  or occupants participate in the ownership, management or control of any part of the Property.    5.1.14 Escrow Deposits. Without limiting the effect of Section 3.1 and  Section 6.1, Borrower shall pay to Lender monthly on the same date that each monthly installment  is payable under the Note and this Agreement, an amount equal to one-twelfth (1/12th) of the  amounts Lender reasonably estimates are necessary to pay, on an annualized basis, (1) all  Impositions and (2) the Premiums and, on demand from time to time, shall pay to Lender any  additional amounts necessary to pay the Premiums and Impositions. Borrower will furnish to  Lender bills for Impositions and Premiums thirty (30) days before Impositions become delinquent  and such Premiums become due for payment. No amounts paid as Impositions or Premiums shall  be deemed to be trust funds and these funds may be commingled with the other funds of Lender  without any requirement to pay interest to Borrower on account of these funds. If an Event of  Default occurs, Lender shall have the right, at its election, to apply any amounts held under this  Section 5.1.14 in reduction of the Secured Indebtedness, or in payment of the Premiums or  Impositions for which the amounts were deposited.    5.1.15 Personal Property. Borrower will notify Lender of, and will  protect, defend and indemnify Lender against, all claims and demands of all persons at any time  claiming any rights or interest in the Personal Property. The Personal Property shall not be used  or bought for personal, family, or household purposes, but shall be bought and used solely for the  purpose of carrying on Borrower’s business.    5.1.16 Special Purpose Entity/Separateness.    (a) Borrower shall continue to be a Special Purpose Entity.    (b) The Property shall continue to have “single asset real estate” status  as defined by Section 101(51)(B) of the Bankruptcy Code.    (c) The organizational documents of Borrower as in effect on the date  hereof, shall not be modified, amended or revised without the prior written consent of Lender.    (d) The covenants set forth in this Section 5.1.16 shall survive for so  long as any amount remains payable to Lender under this Agreement or any other Loan Document.    5.1.17 Intentionally Omitted.    Section 5.2 Borrower Negative Covenants. From the date hereof until the  Secured Indebtedness is paid in full, Borrower hereby covenants and agrees with Lender that:    5.2.1 Liens and Encumbrances. Without the prior written consent of  Lender, to be exercised in Lender’s sole and absolute discretion, other than the Permitted  Exceptions, Borrower shall not create, place or allow to remain any Liens and Encumbrances on  

 

32  Cortona – Loan Agreement    the Property. If any Liens and Encumbrances are recorded against the Property or any part of the  Property, Borrower shall obtain a discharge and release of any Liens and Encumbrances (via  payment or indemnity or bonding if acceptable to Lender) within fifteen (15) days after receipt of  written notice of their existence.    5.2.2 Change in Business. Borrower shall not enter into any line of  business other than the ownership and operation of the Property.    5.2.3 Affiliate Transactions. Borrower shall not enter into, or be a party  to, any transaction with an Affiliate of Borrower or any of the partners of Borrower except in the  ordinary course of business and on terms which are fully disclosed to Lender in advance and are  no less favorable to Borrower or such Affiliate than would be obtained in a comparable arm’s  length transaction with an unrelated third party.    5.2.4 Zoning. Without the prior written consent of Lender, Borrower  shall not (i) initiate or acquiesce in a change in the zoning classification of and/or restrictive  covenants affecting the Property or seek any variance under existing zoning ordinances, (ii) use or  permit the use of the Property in a manner which may result in the Use becoming a non-conforming  use under applicable zoning ordinances, or (iii) subject the Property to restrictive covenants.    5.2.5 Assets. Borrower shall not purchase or own any property other than  the Property and any property necessary or incidental to the ownership and operation of the  Property.    5.2.6 No Joint Assessment. Borrower shall not suffer, permit or initiate  the joint assessment of the Property (i) with any other real property constituting a tax lot separate  from the Property, and (ii) with any portion of the Property which may be deemed to constitute  personal property, or any other procedure whereby the lien of any taxes which may be levied  against such personal property shall be assessed or levied or charged to the Property.    5.2.7 Principal Place of Business; Chief Executive Office; Books and  Records. Borrower shall not (i) change its principal place of business or name from the address  and name set forth in the introductory paragraph hereof without, in each instance, (A) giving  Lender at least thirty (30) days’ prior written notice thereof and (B) taking all action required by  Lender for the purpose of perfecting and/or protecting the Lien and security interest of Lender  created pursuant to this Agreement and the other Loan Documents or (ii) change its organizational  structure without (A) obtaining the prior written consent of Lender and (B) taking all action  reasonably required by Lender for the purpose of perfecting or protecting the Lien and security  interest of Lender created pursuant to this Agreement and the other Loan Documents. At the  written request of Lender, Borrower shall execute a certificate in form reasonably satisfactory to  Lender listing the trade names under which Borrower intends to operate the Property, and  representing and warranting that Borrower does business under no other trade name with respect  to the Property.    5.2.8 ERISA. Borrower will not be reconstituted as a Plan or as an entity  whose assets constitute “plan assets.”  

 

33  Cortona – Loan Agreement    5.2.9 Material Agreements. Borrower shall not, without Lender’s prior  written consent, such consent not to be unreasonably withheld: (a) enter into any Material  Agreement, (b) surrender or terminate any Material Agreement to which it is a party (unless the  other party thereto is in material default and the termination of such Material Agreement would be  commercially reasonable and then only if Borrower shall have provided to Lender not less than  five (5) Business Days’ notice of such termination and such termination would not be reasonably  expected to result in a Material Adverse Change), (c) increase or consent to the increase of the  amount of any fees or charges payable by Borrower under any Material Agreement, except for  such increases as are expressly provided for therein, or (d) modify, change, supplement, alter or  amend, or waive or release any of its rights and remedies under any Material Agreement.    5.2.10 Improvements. Borrower shall abstain from, and not permit the  commission of waste to the Property and shall not remove or alter in any substantial manner, the  structure or character of any Improvements without the prior written consent of Lender.    5.2.11 Personal Property Borrower will not remove the Personal  Property without the prior written consent of Lender, except items of Personal Property which are  consumed or worn out in ordinary usage which shall be promptly replaced by Borrower with other  Personal Property of value equal to or greater than the value of the replaced Personal Property.    5.2.12 Intentionally Omitted.    VI. INSURANCE, CASUALTY AND CONDEMNATION    Section 6.1 Insurance.    6.1.1 Insurance Policies.    (a) During the term of the Loan, Borrower at its sole cost and expense  must provide insurance policies and certificates of insurance for types of insurance described  below all of which must be satisfactory to Lender as to form of policy, amounts, deductibles,  sublimits, types of coverage, exclusions and the companies underwriting these coverages. In no  event shall such policies be terminated or otherwise allowed to lapse. Borrower shall be  responsible for its own deductibles. Borrower shall also pay for any insurance, or any increase of  policy limits, not described in this Agreement that Borrower requires for its own protection or for  compliance with government statutes. Borrower’s insurance shall be primary and without  contribution from any insurance procured by Lender including, without limitation, any insurance  obtained by Lender pursuant to Section 6.1.1(d).    Policies of insurance shall be delivered to Lender in accordance with the  following requirements:    (i) Property insurance on the Improvements and the Personal  Property insuring against any peril now or hereafter included within the classification “All Risk”  or “Special Perils,” in each case (1) in an amount equal to one hundred percent (100%) of the Full  Replacement Cost of the Improvements and Personal Property with a waiver of depreciation and  with a Replacement Cost Endorsement; (2) containing an agreed amount endorsement with respect  to the Improvements and Personal Property waiving all co-insurance provisions; (3) providing for  

 

34  Cortona – Loan Agreement    no deductible in excess of $250,000; (4) containing no margin clause unless approved by Lender;  and (5) containing Ordinance or Law Coverage, Operation of Building Laws, Demolition Costs  and Increased Cost of Construction in an amount reasonably required by Lender or if any of the  Improvements or the use of the Property constitute non-conforming structures then in the amount  of one hundred percent (100%) of the Full Replacement Cost. The Full Replacement Cost shall  be determined from time to time by an appraiser or contractor designated and paid by Borrower  and approved by Lender or by an engineer or appraiser in the regular employ of the insurer. The  “Full Replacement Cost” for purposes of this Article VI shall mean the estimated total cost of  construction required to replace the Improvements with a substitute of like utility, and using  modern materials and current standards, design and layout. For purposes of calculating Full  Replacement Cost direct (hard) costs shall include, without limitation, labor, materials,  supervision and contractor’s profit and overhead and indirect (soft) costs shall include, without  limitation, fees for architect’s plans and specifications, construction financing costs, permits, sales  taxes, insurance and other costs included in the Marshall Valuation Service published by Marshall  & Swifts.    (ii) Commercial General Liability insurance, including  Terrorism coverage, against claims for personal injury, bodily injury, death or property damage  occurring upon, in or about the Property, such insurance (1) to be on the so-called “occurrence”  form with a combined single limit of not less than Twenty-Five Million and No/100 Dollars  ($25,000,000.00); (2) to continue at not less than this limit until required to be changed by Lender  in writing by reason of changed economic conditions making such protection inadequate; and  (3) to cover at least the following hazards: (a) premises and operations; (b) products and completed  operations on an “if any” basis; (c) independent contractors; (d) blanket contractual liability for all  written and oral contracts; (e) contractual liability covering the indemnities contained in this  Agreement and the other Loan Documents to the extent available; and (f) if applicable, liquor  liability. The required limit may be satisfied through a combination of Primary and Excess  Liability policies.    (iii) Business Income insurance in an amount sufficient to  prevent Borrower from becoming a co-insurer within the terms of the applicable policies, and  sufficient to recover twenty-four (24) months Business Income and with an Extended Period of  Indemnity (“EPI”) of twelve (12) months. The amount of such insurance shall be increased from  time to time during the term of the Loan as and when new leases and renewal leases are entered  into and rents payable increase or the annual estimate of gross income from occupancy of the  Property increases to reflect such rental increases.    (iv) Insurance from and against all losses, damages, costs,  expenses, claims and liabilities related to or arising from acts of flood in such amounts, with such  deductibles as required by Lender. If at any time any part of the Property is located in an area  identified on a Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal  Emergency Management Agency as having special flood hazards and flood insurance has been  made available, Borrower will also maintain a flood insurance policy meeting the requirements of  the current guidelines of the Federal Insurance Administration with a generally acceptable  insurance carrier, in an amount not less than the maximum amount of insurance which is available  under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the  National Flood Insurance Reform Act of 1994, as amended.  

 

35  Cortona – Loan Agreement    (v) During the period of any construction or renovation or  alteration of the Improvements, and only if the Property insurance (as described   in  Section 6.1.1(a)(i)) form does not otherwise provide coverage, a so-called “Builder’s All Risk”  insurance policy in non-reporting form for any Improvements under construction, renovation or  alteration including, without limitation, for demolition and increased cost of construction or  renovation, in an amount approved by Lender including an Occupancy endorsement and Worker’s  Compensation Insurance covering all persons engaged in the construction, renovation or alteration  in an amount at least equal to the minimum required by statutory limits of the State.    (vi) Workers’ Compensation insurance, subject to the statutory  limits of the State, and employer’s liability insurance with a limit of at least $1,000,000 per  accident and per disease per employee, and $1,000,000 for disease in the aggregate in respect of  any work or operations on or about the Property, or in connection with the Property or its  operations (if applicable).    (vii) Boiler & Machinery, or Equipment Breakdown Coverage,  insurance covering the major components of the central heating, air conditioning and ventilating  systems, boilers, other pressure vessels, high pressure piping and machinery, elevators and  escalators, if any, and other similar equipment installed in the Improvements, in an amount equal  to one hundred percent (100%) of the full replacement cost of all equipment installed in, on or at  the Improvements. These policies shall insure against physical damage to and loss of occupancy  and use of the Improvements arising out of an accident or breakdown.    (viii) Insurance from and against all losses, damages, costs,  expenses, claims and liabilities related to or arising from acts of terrorism, of such types, in such  amounts, with such deductibles, issued by such companies, and on such forms of insurance policies  as required by Lender.    (ix) Business Automobile Insurance with a combined single limit  of not less than $1,000,000 per occurrence for bodily injury and property damage arising out of  the use of owned, non-owned, hired and/or leased automotive equipment when such equipment is  operated by Borrower, Borrower’s employees or Borrower’s agents in connection with the  Property.    (x) Windstorm coverage, including coverage for Named  Storms, in an amount equal to the Full Replacement Cost, plus an amount equal to the Business  Income insurance and EPI contemplated in Subsection (a)(iii) of this Section 6.1.1 and on terms  consistent with the commercial property insurance policy required under Subsection (a)(i) of this  Section 6.1.1, provided, however, that the deductible for windstorm coverage shall not exceed the  greater of (i) $250,000 or (ii) five percent (5%) of the Full Replacement Cost.    (xi) Insurance from or against all losses, damages, costs,  expenses, claims and liabilities related to or arising from earthquake on such form of insurance  policy and in such amount as required by Lender, and provided that the deductible for earthquake  coverage shall not exceed the greater of (i) $250,000 or (ii) five percent (5%) of the Full  Replacement Cost.  

 

36  Cortona – Loan Agreement    (xii) If the Property is governed in whole or in part by a  condominium association or operated as a “cooperative apartment house”, Fidelity/Crime  insurance against all losses as a result of fraudulent acts by anyone who either handles or is  responsible for funds that it holds or administers, in such amount as required by Lender, naming  the condominium association or co-op as the insured.    (xiii) Such other insurance (i) as may from time to time be  required by Lender to replace coverage against any hazard, which as of the date hereof is insured  against under any of the insurance policies described in Subsections (a)(i) through (a)(xii) of this  Section 6.1.1, and (ii) as may from time to time be reasonably required by Lender against other  insurable hazards, including, but not limited to, vandalism, earthquake, environmental, sinkhole  and mine subsidence.    (b) Lender’s interest must be clearly stated by endorsement in the  insurance policies described in this Section 6.1.1 as follows:    (i) The policies of insurance referenced in Subsections (a)(i),  (a)(iii), (a)(iv), (a)(v), (a)(vii), (a)(viii), (a)(x) and (a)(xi) of this Section 6.1.1 shall identify Lender  under the New York Standard Mortgagee Clause (non-contributory) endorsement.    (ii) The          insurance policies referenced in  Sections 6.1.1(a)(ii) and 6.1.1(a)(ix) shall name Lender as an additional insured.    (iii) All of the policies referred to in Section 6.1.1 shall provide  for at least thirty (30) days’ written notice to Lender in the event of policy cancellation and/or  material change.    (c) All the insurance companies must be authorized to do business in  New York State and the State and be approved by Lender. The insurance companies must have a  general policy rating of A.M. Best “Excellent” or better and a financial class of X or better by  A.M. Best. So called “Cut-through” endorsements shall not be permitted. If there are any  Securities issued with respect to this Loan which have been assigned a rating by a Rating Agency,  the insurance company shall have a claims paying ability rating by such Rating Agency equal to  or greater than the rating of the highest class of the Securities. Borrower shall deliver evidence  satisfactory to Lender of payment of premiums due under the insurance policies.    (d) Certified copies of the policies, and any endorsements, shall be  made available for inspection by Lender upon request. If Borrower fails to obtain or maintain  insurance policies and coverages as required by this Section 6.1.1, then Lender shall have the right  but shall not have the obligation immediately to procure any such insurance policies and coverages  at Borrower’s cost.    (e) Borrower shall be required during the term of the Loan to continue  to provide Lender with original renewal policies or replacements of the insurance policies  referenced in Section 6.1.1(a). Lender may accept Certificates of Insurance, if satisfactory to  Lender, evidencing insurance policies referenced in this Section 6.1.1 instead of requiring the  actual policies. Lender shall be provided with renewal Certificates of Insurance, or Binders, prior  

 

37  Cortona – Loan Agreement    to each expiration. The failure of Borrower to maintain the insurance required under this  Article VI shall not constitute a waiver of Borrower’s obligation to fulfill these requirements.    (f) All binders, policies, endorsements, certificates, and cancellation  notices are to be sent to the Lender’s Address for Insurance Notification until changed by notice  from Lender.    (g) If any policy referred to in this Section 6.1.1 is written on a blanket  basis, a list of locations and their insurable values shall be provided, as required by Lender. If the  Property is located in an area for potential catastrophic loss, Borrower shall provide Lender with  a Natural Hazard Loss Analysis Report on an annual basis. This report is to be completed by a  recognized risk modeling company (e.g. RMS, EQE, AIR) approved by Lender.    6.1.2 Environmental Insurance Policy.  (a)     Delivery of Policy; Criteria. Borrower shall obtain and deliver to Lender  an Environmental Insurance Policy, which Environmental Insurance Policy shall be in form and  substance acceptable to Lender in its sole and absolute discretion, including without limitation  with respect to coverages, amounts, issuer, deductibles and exclusions, and with respect to which  all premiums and costs shall have been fully paid. Without limitation, such Environmental  Insurance Policy shall satisfy the following criteria: (i) the policy amount shall be not less than  $5,000,000, (ii) the term at the time of issue for coverage of preexisting coverage shall extend at  least two (2) years beyond the Maturity Date and the term at the time of issue for new coverage  shall be five (5) years and provide options for renewal so that it shall remain effective for not  less than two (2) years after the Maturity Date, (iii) the policy shall cover the entire Property and  no other property, (iv) the deductible amounts shall be not more than $50,000 for cleanup costs  and bodily injury and property damage claims; (v) the policy shall include a named insured  endorsement for "MetLife Real Estate Lending LLC, a Delaware limited liability company, and  its affiliates, successors, successors in title, and assigns," which endorsement shall allow a  subsequent purchaser to become a named insured after foreclosure of the Security Instrument or  deed in lieu thereof; (vi) the Loan Agreement shall be scheduled as an insured contract; (vii)  Lender's rights under the policy shall not be conditioned on Lender's being sued as a co-  defendant, (viii) all environmental reports relating to the Property should be disclosed to the  carrier and scheduled on a disclosed document endorsement; (ix) the policy shall contain no  exclusions for pre-existing conditions; (x) the policy shall contain no exclusions or limitations  for mold or microbial matter; (xi) the coverage shall be primary over other available coverage  without conditions, (xii) the policy shall contain an endorsement stating that the coverage cannot  be cancelled or materially modified without advance written notice to and consent by Lender;  (xiii) the policy shall contain an endorsement stating that the carrier waives its right of  subrogation against Lender and its affiliates, successors, successors in title, and assigns; (xiv)  the policy shall specify that it is 100% minimum earned at policy inception; (xv) the carrier shall  be one of the following selected carriers (or such other carrier acceptable to Lender in Lender’s  sole discretion) and shall have an AM Best rating of A(XV) or better: (a) ACE/Chubb, (b) XL,  (c) Zurich, (d) Great American, (e) AWAC, or (f) Beazley; (xvi) the policy shall have the  following scope of coverage: (a) pre-existing and new pollution conditions (on-site and off-site);  (b) cleanup costs and claims for cleanup costs; (c) third party claims for bodily injury and  property damage; (d) transportation and non-owned disposal sites; (e) business interruption; (f)  known and unknown environmental conditions; and (g) no exclusions to coverage, including no  

 

38  Cortona – Loan Agreement    capital improvement exclusions and no Underground Storage Tank Exclusion, and (xvii) the  policy shall provide for automatic assignment (with no consent of the carrier required) of the  policy to a successor-in-title of Lender following an Event of Default and the automatic addition  of successors-in-title for all or a portion of the Property (i.e., no consent right by the carrier) as  a named insured upon written request by the named insured.    (b) Lapse of Coverage, Failure to Extend. Borrower shall maintain the  Environmental Insurance Policy in full force and effect. Upon the lapse or other termination of  the Environmental Insurance Policy, Borrower immediately shall obtain and deliver to Lender a  fully paid replacement Environmental Insurance Policy, and Lender shall have the right but not  the obligation immediately to procure a replacement Environmental Insurance Policy.    (c) Costs and Expenses. Within ten (10) days following written demand,  Borrower shall pay to Lender all costs and expenses incurred by Lender in connection with  review or replacement of any and all Environmental Insurance Policies, including without  limitation all premiums, consultants' and/or reasonable attorneys' fees and costs.    (d) Claims. Borrower shall give written notice to Lender not less than fifteen  (15) Business Days prior to making any claim under any Environmental Insurance Policy.    (e) Event of Default. Borrower's failure to maintain the insurance coverage  required by this Section 6.1.2, shall constitute an immediate Event of Default.    6.1.3 Adjustment of Claims. Borrower hereby authorizes and empowers  Lender to settle, adjust or compromise any claims for damage to, or loss or destruction of, all or a  portion of the Property, regardless of whether there are Insurance Proceeds available or whether  any such Insurance Proceeds are sufficient in amount to fully compensate for such damage, loss  or destruction.    6.1.4 Assignment to Lender. The provisions of Section 3.2 of the  Security Instrument are hereby incorporated by reference into this Agreement to the same extent  and with the same force as if fully set forth herein.    Section 6.2 Casualty and Condemnation.    6.2.1 Casualty.    (a) Borrower shall give prompt written notice of any casualty to the  Property to Lender whether or not required to be insured against. The notice shall describe the  nature and cause of the casualty and the extent of the damage to the Property. Borrower covenants  and agrees to commence and diligently pursue to completion the Restoration.    (b) Borrower assigns to Lender all Insurance Proceeds which Borrower  is entitled to receive in connection with a casualty whether or not such insurance is required under  this Agreement. In the event of any damage to or destruction of the Property, and provided (1) an  Event of Default does not currently exist, and (2) Lender has determined that (i) there has not been  an Impairment of the Security, and (ii) the repair, restoration and rebuilding of any portion of the  Property that has been partially damaged or destroyed (the “Restoration”) can be accomplished  

 

39  Cortona – Loan Agreement    in full compliance with all Requirements to the same condition, character and general utility as  nearly as possible to that existing prior to the casualty and at least equal in value as that existing  prior to the casualty, the Net Insurance Proceeds shall be applied to the Cost of Restoration in  accordance with the terms of this Article VI. Lender shall hold and disburse the Net Insurance  Proceeds to the Restoration.    (c) If the Net Insurance Proceeds are to be used for the Restoration in  accordance with this Article VI, Borrower shall comply with Lender’s Requirements For  Restoration as set forth in Section 6.2.3. Upon Borrower’s satisfaction and completion of the  Requirements For Restoration and upon confirmation that there is no Event of Default then  existing, Lender shall pay any remaining Restoration Funds then held by Lender to Borrower.    (d) In the event that the conditions for Restoration set forth in this  Section 6.2.1 have not been met, Lender may, at its option, apply the Net Insurance Proceeds to  the reduction of the Secured Indebtedness in such order as Lender may determine and Lender may  declare the entire Secured Indebtedness due and payable upon no less than sixty (60) days’ prior  written notice to Borrower. After payment in full of the Secured Indebtedness, any remaining  Restoration Funds shall be paid to Borrower.    6.2.2 Condemnation.    (a) If the Property or any part of the Property is taken by reason of any  Condemnation, Lender shall be entitled to all Condemnation Proceeds. At its option, Lender shall  be entitled to commence, appear in and prosecute in its own name any action or proceeding and to  make any compromise or settlement in connection with such Condemnation. Borrower hereby  irrevocably constitutes and appoints Lender as its attorney-in-fact, which appointment is coupled  with an interest, to commence, appear in and prosecute any action or proceeding and to make any  compromise or settlement in connection with any such Condemnation.    (b) Borrower assigns to Lender all Condemnation Proceeds which  Borrower is entitled to receive. In the event of any Condemnation, and provided (1) an Event of  Default does not currently exist, and (2) Lender has determined that (i) there has not been an  Impairment of the Security, and (ii) the Restoration of any portion of the Property that has not been  taken can be accomplished in full compliance with all Requirements to the same condition,  character and general utility as nearly as possible to that existing prior to the taking and at least  equal in value as that existing prior to the taking, then Borrower shall commence and diligently  pursue to completion the Restoration. Lender shall hold and disburse the Net Condemnation  Proceeds to the Restoration.    (c) In the event the Net Condemnation Proceeds are to be used for the  Restoration, Borrower shall comply with Lender’s Requirements For Restoration as set forth in  Section 6.2.3. Upon Borrower’s satisfaction and completion of the Requirements For Restoration  and upon confirmation that there is no Event of Default then existing, Lender shall pay any  remaining Restoration Funds then held by Lender to Borrower.    (d) In the event that the conditions for Restoration set forth in this  Section 6.2.2 have not been met, Lender may, at its option, apply the Net Condemnation Proceeds  

 

40  Cortona – Loan Agreement    to the reduction of the Secured Indebtedness in such order as Lender may determine and Lender  may declare the entire Secured Indebtedness due and payable upon no less than sixty (60) days’  prior written notice to Borrower. After payment in full of the Secured Indebtedness, any remaining  Restoration Funds shall be paid to Borrower.    6.2.3 Requirements For Restoration. Unless otherwise expressly  agreed in a writing signed by Lender, the following are the “Requirements For Restoration”:    (a) If the Net Insurance Proceeds or Net Condemnation Proceeds are to  be used for the Restoration, prior to the commencement of any Restoration work (the “Work”),  Borrower shall provide Lender for its review and reasonable written approval (i) complete plans  and specifications for the Work which (A) have been approved by all required Governmental  Authorities, (B) have been approved by an architect satisfactory to Lender (the “Architect”) and  (C) are accompanied by Architect’s signed statement of the total estimated cost of the Work (the  “Approved Plans and Specifications”); (ii) the amount of money which Lender reasonably  determines will be sufficient when added to the Net Insurance Proceeds or Net Condemnation  Proceeds to pay the entire cost of the Restoration (collectively referred to as the “Restoration  Funds”); (iii) evidence that the Approved Plans and Specifications and the Work are in  compliance with all Requirements; (iv) an executed contract for construction with a contractor  reasonably satisfactory to Lender (the “Contractor”) in a form reasonably approved by Lender in  writing; and (v) a surety bond and/or guarantee of payment with respect to the completion of the  Work. The bond or guarantee shall be satisfactory to Lender in form and amount and shall be  signed by a surety or other entities who are acceptable to Lender.    (b) Borrower shall not commence the Work, other than temporary work  to protect the Property or prevent interference with business, until Borrower shall have complied  with the requirements of Subsection (a) of this Section 6.2.3. So long as there does not currently  exist an Event of Default and the following conditions have been complied with or, in Lender’s  discretion, waived, Lender shall disburse the Restoration Funds in increments to Borrower, from  time to time as the Work progresses:    (i) Architect shall be in charge of the Work.    (ii) Lender shall disburse the Restoration Funds directly or  through escrow with a title company selected by Borrower and approved by Lender, upon not less  than ten (10) days’ prior written notice from Borrower to Lender and Borrower’s delivery to  Lender of (A) Borrower’s written request for payment (a “Request for Payment”) accompanied  by a certificate by Architect in a form satisfactory to Lender which states that (a) all of the Work  completed to that date has been completed in compliance with the Approved Plans and  Specifications and in accordance with all Requirements, (b) the amount requested has been paid  or is then due and payable and is properly a part of the cost of the Work, and (c) when added to all  sums previously paid by Lender, the requested amount does not exceed the value of the Work  completed to the date of such certificate; and (B) evidence satisfactory to Lender that the balance  of the Restoration Funds remaining after making the payments shall be sufficient to pay the balance  of the cost of the Work (or that Borrower has sufficient capital to fund any shortfall, provided such  shortfall is deposited in an escrow with Lender). Each Request for Payment shall be accompanied  by (x) waivers of liens covering that part of the Work previously paid for, if any (y) a title search  

 

41  Cortona – Loan Agreement    or by other evidence satisfactory to Lender that no mechanic’s or materialmen’s liens or other  similar liens for labor or materials supplied in connection with the Work have been filed against  the Property and not discharged of record, and (z) an endorsement to the Title Insurance Policy  insuring that no encumbrance exists on or affects the Property other than the Permitted Exceptions.    (iii) The final Request for Payment shall be accompanied by (i) a  final certificate of occupancy or other evidence of approval of appropriate Governmental  Authorities for the use and occupancy of the Improvements, (ii) evidence that the Restoration has  been completed in accordance with the Approved Plans and Specifications and all Requirements  with any variances from the Approved Plans and Specifications to be approved by Lender,  (iii) evidence that the costs of the Restoration have been paid in full, and (iv) evidence that no  mechanic’s or similar liens for labor or material supplied in connection with the Restoration are  outstanding against the Property, including final waivers of liens covering all of the Work and an  endorsement to the Title Insurance Policy insuring that no encumbrance exists on or affects the  Property other than the Permitted Exceptions.    (c) If (i) within ninety (90) days after the occurrence of any damage,  destruction or condemnation requiring Restoration, Borrower fails to submit to Lender and receive  Lender’s approval of plans and specifications or fails to deposit with Lender the additional amount  necessary to accomplish the Restoration as provided in subparagraph (a) above, or (ii) after such  plans and specifications are approved by all such Governmental Authorities and Lender, Borrower  fails to commence promptly or diligently continue to completion the Restoration, or (iii) Borrower  becomes delinquent in payment to mechanics, materialmen or others for the costs incurred in  connection with the Restoration, or (iv) there exists an Event of Default, then, in addition to all of  the rights herein set forth and after ten (10) days’ written notice of the non-fulfillment of one or  more of these conditions, Lender may apply the Restoration Funds to reduce the Secured  Indebtedness in such order as Lender may determine, and at Lender’s option and in its sole  discretion, Lender may declare the Secured Indebtedness immediately due and payable together  with the Prepayment Fee.    VII. PROPERTY MANAGEMENT    Section 7.1 The Management Agreement. Borrower shall cause Manager to  manage the Property in accordance with the Management Agreement. Borrower shall (i) diligently  perform and observe all of the terms, covenants and conditions of the Management Agreement on  the part of Borrower to be performed and observed, (ii) promptly notify Lender of any notice to  Borrower of any default by Borrower in the performance or observance of any of the terms,  covenants or conditions of the Management Agreement on the part of Borrower to be performed  and observed, and (iii) promptly deliver to Lender a copy of each financial statement, business  plan, capital expenditures plan, report and estimate received by it under the Management  Agreement. If Borrower defaults in the performance or observance of any material term, covenant  or condition of the Management Agreement on the part of Borrower to be performed or observed,  then, without limiting Lender’s other rights or remedies under this Agreement or the other Loan  Documents, the Environmental Indemnity or the Guaranty, if any, and without waiving or  releasing Borrower from any of its obligations hereunder or under the Management Agreement,  Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any  

 

42  Cortona – Loan Agreement    act as may be appropriate to cause all the material terms, covenants and conditions of the  Management Agreement on the part of Borrower to be performed or observed.    Section 7.2 Prohibition Against Termination or Modification.   Borrower  shall not surrender, terminate, cancel, modify, renew or extend the Management Agreement, or  enter into any other agreement relating to the management or operation of the Property with  Manager or any other Person, or consent to the assignment by the Manager of its interest under the  Management Agreement, in each case without the express consent of Lender (such consent not to  be unreasonably withheld). If at any time Lender consents to the appointment of a new manager,  such manager and Borrower shall, as a condition of Lender’s consent, execute an assignment and  subordination of management agreement in the form then used by Lender.    Section 7.3 Replacement of Manager. Lender shall have the right, in its sole  discretion, to require Borrower to replace the Manager upon prior notice with a Person reasonably  approved by Lender upon the occurrence of any one or more of the following events: (i) at any  time following the occurrence and continuance of an Event of Default and/or (ii) if Manager is in  default of any material provision under the Management Agreement beyond any applicable notice  and cure period or if at any time the Manager has engaged in gross negligence, fraud or willful  misconduct.    VIII. CHANGE IN OWNERSHIP, PROHIBITION ON ADDITIONAL  FINANCING AND ADDITIONAL OBLIGATIONS    Section 8.1 Permitted Transfers of Interest in Borrower. Borrower shall not  cause or permit: (i) the Property or any direct or indirect interest in the Property, to be conveyed,  transferred, assigned, encumbered, sold or otherwise disposed of (excluding leases of space in the  Improvements and replacement of items of Personal Property and Intangible Property in the  ordinary course of business); or (ii) any transfer, assignment or conveyance of any direct or indirect  interest in Borrower or in any of Borrower’s Constituents; or (iii) any merger, reorganization,  dissolution or other change in the ownership structure of Borrower or any of Borrower’s  Constituents, including, without limitation, any conversion of Borrower or any of Borrower’s  Constituents from one form of entity to another (collectively, a “Transfer” or “Transfers”).    The prohibitions on transfer shall not be applicable to nor shall there be any  transfer/review/assumption/processing fee paid in accordance with (i) Transfers as a result of the  death of a natural person; or (ii) Transfers in connection with estate planning by a natural person  to a spouse, son or daughter or descendant of either, a stepson or stepdaughter or descendant of  either.    Borrower shall pay all out-of-pocket costs and expenses, including reasonable  attorneys’ fees and disbursements incurred by Lender in connection with any Transfer.    8.1.1 Permitted Transfer. Notwithstanding the prohibitions in Section 8.1  above, subject to the conditions set forth below and the General Transfer Requirements, the  following Transfers shall be permitted (each a “Permitted Transfer”) without Lender’s consent:  

 

43  Cortona – Loan Agreement    (1) direct or indirect transfers of interests in Borrower or any of its constituent entities  between entities wholly owned by Invesco REIT Operating Partnership LP  (“INREIT”) so long as (1) INREIT continues to own, directly or indirectly, more  than fifty-one percent (51%) of Borrower; (2) INREIT controls, directly or  indirectly, Borrower; and (3) Invesco Real Estate continues to manage and control  INREIT; and    (2) direct or indirect transfers of interests in INREIT so long as (1) INREIT continues  to own directly or indirectly, more than fifty-one percent (51%) of Borrower; (2)  INREIT controls, directly or indirectly, Borrower; and (3) Invesco Real Estate  continues to manage and control INREIT.    Each of the Transfers permitted in this Section 8.1.1 shall further be subject to the following  conditions: (i) there shall be no default under the Loan Documents, the Guaranty or the  Environmental Indemnity Agreement that remains uncured beyond any applicable notice and cure  period, (ii) after giving effect to the Transfer, the entity that comprises the Borrower shall continue  to be able to make the representations and warranties set forth in Article IV and Sections 4.1.5 and  5.2.8 hereof, and Borrower shall furnish to Lender such information as Lender requests in order  for Lender to conduct due diligence, satisfactory to Lender, with respect to OFAC, (iii) Borrower  shall pay all costs and expenses incurred by Lender in connection with the Transfer, including title  insurance premiums (as applicable), documentation costs and reasonable attorneys’ fees and costs,  and (iv) Lender receives written notice thereof not later than ten (10) business days prior to such  contemplated transfer (the foregoing conditions in clauses (i) through (iv), inclusive, shall  constitute and be referred to collectively as the “General Transfer Requirements”). Any  Transfer pursuant to and in accordance with this Section 8.1.1 will not relieve Borrower of its  obligations under the Note or any other Loan Documents or the Environmental Indemnity  Agreement, or Liable Party, if any, of its obligations under the Environmental Indemnity  Agreement, the Guaranty, or under the Loan Documents to the extent applicable.    8.1.2 Property Transfer. Borrower shall have a one-time right to transfer  the Property (a “Property Transfer”), subject to the following conditions:    (i) there being no Event of Default under the Loan Documents, the  Environmental Indemnity Agreement or the Guaranty at the time of the transfer;    (ii) Lender’s approval of the transferee;    (iii) the transferee shall be able to make the ERISA representations set forth  in Section 4.1.5 and the covenant set forth in Section 5.2.8 of this Agreement as well  as the representation set forth in Section 4.1.29 of this Agreement;    (iv) the debt yield based on the net operating income, in the opinion of  Lender, derived from the Property shall be no less than eight percent (8%) (net  operating income divided by outstanding Loan amount);    (v) the loan to value ratio of the Property at the time of the transfer shall not  be greater than sixty percent (60%);  

 

44  Cortona – Loan Agreement      (vi) Borrower or the transferee shall pay a fee equal to one-half of one  percent (0.50%) of the outstanding principal balance of the Note at the time of the  assumption, together with a non-refundable processing fee in the amount of $5,000;    (vii) the transferee shall expressly assume the Loan Documents and the  Environmental Indemnity Agreement in a manner satisfactory to Lender and an  additional Liable Party acceptable to Lender shall execute the Guaranty with respect to  events arising or occurring from and after the date of the transfer and the Environmental  Indemnity Agreement with respect to events or circumstances arising or occurring  before and after the date of the transfer, which additional Liable Party is subject to  Lender’s approval;    (viii) the transferee or its sponsor must have a net worth not less than  $250,000,000, excluding its interest in the Property;    (ix) the transferee or its sponsor must be experienced in the ownership,  management and leasing of properties similar to the Property;    (x) Borrower or transferee shall pay all costs and expenses incurred by  Lender in connection with the transfer, including title insurance premiums,  documentation costs and reasonable attorneys’ fees; and    (xi) if the Loan has been securitized, Lender shall have received  confirmation that the assumption of the Loan by the transferee will not result in an  adverse change in the rating of the Securities by the Rating Agency. No transfer shall  release Borrower or Liable Party from their obligations under the Loan Documents, the  Environmental Indemnity Agreement or the Guaranty with respect to events arising or  occurring prior to the date of transfer.    Borrower shall be permitted to pay down the Loan with the applicable Prepayment Fee at the  effective date of the Property Transfer in order to satisfy the tests contained in (iv) and (v) above.    Section 8.2 Prohibition on Additional Financing. Borrower shall not incur or  permit the incurring of: (i) any financing in addition to the Loan that is secured by a lien, security  interest or other encumbrance of any part of the Property (including any loan or financing which  is repaid by assessments or other taxes related to the Property, including, without limitation, any  Property-Assessed Clean Energy loan) or (ii) any pledge or encumbrance of any direct or indirect  interest in Borrower or any of Borrower’s Constituents (collectively “Secondary Financing”)  other than a fund-level line of credit facility so long as (i) such line of credit is not secured by any  interest in the Property or any ownership interests, owned directly or indirectly, in Borrower and  (ii) any exercise of remedies thereunder would not result in a prohibited transfer under the Loan  Documents.    Section 8.3 Restrictions on Additional Obligations. During the term of the  Loan, Borrower shall not, without the prior written consent of Lender, become liable with respect  to any indebtedness or other obligation except for (i) the Loan, (ii) Leases entered into in the  

 

45  Cortona – Loan Agreement    ordinary course of owning and operating the Property for the Use, (iii) trade payables incurred in  the ordinary course of owning and operating the Property for the Use but excluding any loans or  borrowings, provided that such trade payables are paid within ninety (90) days of when incurred,  (iv) liabilities or indebtedness disclosed in writing to and approved by Lender on or before the  Execution Date, and (v) any other single item of indebtedness or liability which does not exceed  $25,000 or, when aggregated with other items of indebtedness or liability, does not exceed  $100,000 (collectively, the “Permitted Indebtedness”).    Section 8.4 Statements Regarding Ownership. Borrower agrees to submit or  cause to be submitted to Lender within thirty (30) days after December 31st of each calendar year  during the term of the Loan and ten (10) days after any written request by Lender, a sworn,  notarized certificate, signed and certified to the Certification Parties by an authorized (i) individual  who is Borrower or one of the individuals comprising Borrower, (ii) member of Borrower,  (iii) partner of Borrower or (iv) officer of Borrower, as the case may be, stating whether (x) any  part of the Property, or any direct or indirect interest in the Property, has been conveyed,  transferred, assigned, encumbered, sold or otherwise disposed of, and if so, to whom; (y) any  conveyance, transfer, pledge or encumbrance of any direct or indirect interest in Borrower or in  any of Borrower’s Constituents has been made and if so, to whom; or (z) there has been any  merger, reorganization, dissolution or other change in the ownership structure of Borrower or any  of Borrower’s Constituents, and if so, a description of such change.    IX. ENVIRONMENTAL HAZARDS    Section 9.1 Representations and Warranties. Borrower hereby represents,  warrants, covenants and agrees to and with Lender that, except as disclosed in the Environmental  Report (i) neither Borrower nor, to the best of Borrower’s knowledge, after due inquiry, any  Tenant, subtenant or occupant of the Property, has at any time placed, suffered or permitted the  presence of any Hazardous Materials at, on, under, within or about the Property except as expressly  approved by Lender in writing, (ii) all operations or activities upon the Property, and any use or  occupancy of the Property by Borrower are presently and shall in the future be in compliance with  all Requirements of Environmental Laws, (iii) Borrower will use best efforts to assure that any  Tenant, subtenant or occupant of the Property shall in the future be in compliance with all  Requirements of Environmental Laws, (iv) all operations or activities upon the Property are  presently and shall in the future be in compliance with all Requirements of Environmental Laws,  (v) Borrower does not know of, and has not received, any written or oral notice of other  communication from any person or entity (including, without limitation, a governmental  entity) relating to Hazardous Materials or Remedial Work pertaining thereto, of possible liability  of any person or entity pursuant to any Requirements of Environmental Laws, other environmental  conditions in connection with the Property, or any actual administrative or judicial proceedings in  connection with any of the foregoing, (vi) Borrower shall not do or allow any Tenant or other user  of the Property to do any act that materially increases the dangers to human health or the  environment, poses an unreasonable risk of harm to any person or entity (whether on or off the  Property), impairs or may impair the value of the Property, is contrary to any requirement of any  insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant,  condition, agreement or easement applicable to the Property, and (vii) Borrower has truthfully and  fully provided to Lender, in writing, any and all information relating to environmental conditions  in, on, under or from the Property that is known to Borrower and that is contained in Borrower’s  

 

46  Cortona – Loan Agreement    files and records, including, without limitation, any reports relating to Hazardous Materials in, on,  under or from the Property and/or to the environmental condition of the Property.    Section 9.2 Remedial Work. In the event any Remedial Work is required under  any Requirements of Environmental Laws, Borrower shall perform or cause to be performed the  Remedial Work in compliance with the applicable law, regulation, order or agreement. All  Remedial Work shall be performed by one or more contractors, selected by Borrower and approved  in advance in writing by Lender, and under the supervision of a consulting engineer, selected by  Borrower and approved in advance in writing by Lender. All costs and expenses of Remedial  Work shall be paid by Borrower, including, without limitation, the charges of the  contractor(s) and/or the consulting engineer, and Lender’s reasonable attorneys’, architects’ and/or  consultants’ fees and costs incurred in connection with monitoring or review of the Remedial  Work. In the event Borrower shall fail to timely commence, or cause to be commenced, or fail to  diligently prosecute to completion, the Remedial Work, Lender may, but shall not be required to,  cause such Remedial Work to be performed, subject to the provisions of Section 7.5, Section 7.6  and Section 7.7 of the Security Instrument.    Section 9.3    Environmental Site Assessment. Lender shall have the right, at  any time and from time to time, to undertake an environmental site assessment on the Property,  including any testing that Lender may determine, in its sole discretion, is necessary or desirable to  ascertain the environmental condition of the Property and the compliance of the Property with  Requirements of Environmental Laws. Borrower shall cooperate fully with Lender and its  consultants performing such assessments and tests. Such environmental site assessments shall be  at Lender’s expense unless Lender has a reasonable belief that Hazardous Materials may be at or  near the Property in problematic amounts or if any Event of Default has occurred, in which case,  such environmental site assessments shall be at Borrower’s sole cost and expense.    Section 9.4 Unsecured Obligations. No amounts which may become owing by  Borrower to Lender under this Article IX or under any other provision of this Agreement as a result  of a breach of or violation of this Article IX shall be secured by the Security Instrument. The  obligations shall continue in full force and effect and any breach of this Article IX shall constitute  an Event of Default. The lien of the Security Instrument shall not secure (i) any Unsecured  Obligations, or (ii) any other obligations to the extent that they are the same or have the same effect  as any of the Unsecured Obligations. The Unsecured Obligations shall continue in full force, and  any breach or default of any such obligations shall constitute a breach or default under this  Agreement but the proceeds of any foreclosure sale shall not be applied against Unsecured  Obligations. Nothing in this Section shall in any way limit or otherwise affect the right of Lender  to obtain a judgment in accordance with applicable law for any deficiency in recovery of all  obligations that are secured by the Security Instrument following foreclosure, notwithstanding that  the deficiency judgment may result from diminution in the value of the Property by reason of any  event or occurrence pertaining to Hazardous Materials or any Requirements of Environmental  Laws.    X. PARTICIPATION AND SALE OF LOAN    Section 10.1 Sale of Loan/Participation. Lender may sell, transfer or assign all  or any portion of its interest or one or more participation interests in the Loan, the Loan  

 

47  Cortona – Loan Agreement    Documents, the Guaranty, if any, and the Environmental Indemnity at any time and from time to  time at Lender’s sole cost and expense, including, without limitation, its rights and obligations as  servicer of the Loan. Lender may issue mortgage pass-through certificates or other securities  evidencing a beneficial interest in a rated or unrated public offering or private placement, including  depositing the Loan Documents, the Guaranty, if any, and the Environmental Indemnity with a  trust that may issue securities (the “Securities”). However, Lender shall have no right to require  any amendment to any aspect of the Loan or any Loan Documents that is adverse to Borrower.  Lender may forward to each purchaser, transferee, assignee, servicer, participant, or investor in  the Loan or in the Securities (collectively, the “Investor”) or any prospective Investor or any  Rating Agency rating the Securities, all documents and information which Lender now has or may  hereafter acquire relating to the Loan, Borrower, any Liable Party and the Property, whether  furnished by Borrower, any Liable Party or otherwise, as Lender determines necessary or  desirable. Notwithstanding anything in this Section 10.1 to the contrary, Lender may grant  participations in the Loan so long as Lender remains as servicer or may securitize the Loan  provided (i) the securitization of the Loan will not result in a requirement for Borrower to elect an  independent director or to otherwise change the ownership structure of Borrower and (ii) such  securitization does not require any material modification of the Loan Documents and does not  otherwise adversely impact Borrower. Additionally, the initial Lender hereunder agrees not to  securitize the Loan for itself; provided, however, that any subsequent purchaser of the Loan may  issue mortgage pass-through certificates or other securities evidencing a beneficial interest in the  Loan in a rated or unrated public offering or private placement, including depositing the Loan  Documents with a trust that may issue securities. Borrower and each Liable Party, at no third-  party cost to such party, shall provide an estoppel certificate or any other documents to the Investor  or the Rating Agency as may be reasonably requested by Lender.    Section 10.2 Splitting of the Mortgage. The provisions of Section 5.2 of the  Security Instrument are hereby incorporated by reference into this Agreement to the same extent  and with the same force as if fully set forth herein.    Section 10.3 Cooperation. Borrower will cooperate with Lender, prospective  Investors, and the Rating Agencies in furnishing such information and providing such other  assistance, reports and legal opinions as Lender may reasonably request in connection with any  such transaction. In addition, Borrower acknowledges that Lender may release or disclose to  prospective Investors and the Rating Agencies originals or copies of the Loan Documents, the  Guaranty, if any, the Environmental Indemnity, title information, engineering reports, financial  statements, operating statements, appraisals, Leases, rent rolls, and all other materials, documents  and information in Lender’s possession or which Lender is entitled to receive under the Loan  Documents, the Guaranty, if any, and the Environmental Indemnity with respect to the Loan,  Borrower, any Liable Party or the Property. Borrower shall also furnish to such investors or such  prospective Investors or such Rating Agency any and all information concerning (i) the Property,  (ii) the Leases, and/or (iii) the financial condition of Borrower or any Liable Party (but only to the  extent of what Borrower or Liable Party is required to provide under the Loan Documents with  respect to financial condition) as requested by Lender, any Investor or any prospective Investor or  any Rating Agency in connection with any sale, transfer or participation interest.    XI. DEFAULTS  

 

48  Cortona – Loan Agreement    Section 11.1 Event of Default.    Any of the following shall be deemed to be a material breach of Borrower’s  covenants in this Agreement and shall constitute a default (“Event of Default”):    (a) The failure of Borrower to pay any installment of principal, interest or  principal and interest, any required escrow deposit or any other sum required to be paid under any  Loan Document, whether to Lender or otherwise, within seven (7) days of the due date of such  payment;    (b) The failure of Borrower to perform or observe any other term, provision,  covenant, condition or agreement under any Loan Document for a period of more than thirty  (30) days after receipt of notice of such failure; provided, however, that if such failure is not  reasonably capable of being cured within such thirty (30) day period, such cure period shall be  extended for an additional thirty (30) days, provided that Borrower (1) promptly commences the  cure of such failure within the initial thirty (30) day period and (2) at all times diligently prosecutes  such cure to completion;    (c) The filing by Borrower or any Liable Party (an “Insolvent Entity”) of a  voluntary petition or application for relief in bankruptcy, the filing against an Insolvent Entity of  an involuntary petition or application for relief in bankruptcy that is not dismissed within sixty  (60) days, or an Insolvent Entity’s adjudication as a bankrupt or insolvent, or the filing by an  Insolvent Entity of any petition, application for relief or answer seeking or acquiescing in any  reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief  for itself under any present or future federal, state or other statute, law, code or regulation relating  to bankruptcy, insolvency or other relief for debtors, or an Insolvent Entity’s seeking or consenting  to or acquiescing in the appointment of any trustee, custodian, conservator, receiver or liquidator  of an Insolvent Entity or of all or any substantial part of the Property or of any or all of the Rents  and Profits, or the making by an Insolvent Entity of any general assignment for the benefit of  creditors, or the admission in writing by an Insolvent Entity of its inability to pay its debts generally  as they become due;    (d) If any warranty, representation, certification, financial statement or other  information made or furnished at any time pursuant to the terms of the Loan Documents, the  Guaranty, if any, or the Environmental Indemnity by Borrower, or by any person or entity  otherwise liable under any Loan Document, the Guaranty, if any, or the Environmental Indemnity  is materially false or misleading;    (e) If Borrower suffers or permits the Property, or any part of the Property, to  be used in a manner that might (1) impair Borrower’s title to the Property, (2) create rights of  adverse use or possession, or (3) constitute an implied dedication of any part of the Property;    (f) If Liable Party defaults under the Guaranty, if any, or Borrower or Liable  Party, if any, defaults under the Environmental Indemnity;    (g) If Borrower fails to purchase and deliver to Lender the Interest Rate Cap  Agreement or fails to maintain the Interest Rate Cap Agreement (or Replacement Interest Rate  

 

49  Cortona – Loan Agreement    Cap Agreement, as the case may be) in accordance with the terms and provisions of Section 2.10  and such failure continues for five (5) Business Days after written notice thereof; or    (h) If Borrower or any guarantor shall give to Lender any notice, under the  provisions of Section 443.055 of the Revised Statutes of Missouri, concerning future advances.    Section 11.2 Remedies. The provisions of Article VII of the Security Instrument  are hereby incorporated by reference into this Agreement to the same extent and with the same  force as if fully set forth herein.    Section 11.3 Duration of Events of Default. If any Event of Default occurs  (irrespective of whether or not the same consists of an ongoing condition, a one-time occurrence,  or otherwise), the same shall be deemed to continue at all times thereafter; provided, however, that  such Event of Default shall cease to continue only if Lender shall accept, in writing, performance  of the defaulted obligation or shall execute and deliver a written agreement in which Lender  expressly states that such Event of Default has ceased to continue. Borrower shall have no right  to cure any Event of Default, and Lender shall not be obligated under any circumstances  whatsoever to accept such cure or performance or to execute and deliver any such writing. Without  limitation, this Section shall govern in any case where reference is made in the Loan Documents,  the Guaranty, if any, and/or the Environmental Indemnity to (i) any “cure” (whether by use of such  word or otherwise) of any Event of Default, (ii) “during an Event of Default,” “the continuance of  an Event of Default” or “after an Event of Default has ceased” (in each case, whether by use of  such words or otherwise), or (iii) any condition or event which continues beyond the time when  the same becomes an Event of Default.    XII. MISCELLANEOUS    Section 12.1 Successors and Assigns; Terminology. This Agreement applies to  Lender, Liable Parties and Borrower, and their heirs, legatees, devisees, administrators, executors,  successors and assigns. All covenants, promises and agreements in this Agreement, by or on behalf  of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of  Lender. The term “Borrower” shall include both the original Borrower and any subsequent owner  or owners of any of the Property. The term “Liable Party[ies]” shall include both the original  Liable Party[ies], if any, and any subsequent or substituted Liable Party[ies]. In this Agreement,  whenever the context so requires, the masculine gender includes the feminine and/or neuter, and  the singular number includes the plural.    Section 12.2 Lender’s Discretion. Whenever pursuant to this Agreement  Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to  be satisfactory to Lender or any financial ratio is to be calculated or determined, the decision of  Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or  not satisfactory or Lender’s calculation or determination shall (except as is otherwise expressly  herein provided) be in the sole discretion of Lender and shall be final and conclusive.    Section 12.3 Governing Law. This Agreement, the Note, the other Loan  Documents, the Guaranty, if any, and the Environmental Indemnity, their construction,  interpretation, and enforcement, and the rights of Borrower and Lender, shall be determined under,  

 

50  Cortona – Loan Agreement    governed by, and construed in accordance with the internal laws of the State, without regard to  principles of conflicts of law.    Section 12.4 Modification. No modification, amendment, extension, discharge,  termination or waiver of any provision of this Agreement or of any other Loan Document, nor  consent to any departure by Borrower therefrom, shall in any event be effective unless the same  shall be in a writing signed by the party against whom enforcement is sought, and then such waiver  or consent shall be effective only in the specific instance, and for the purpose, for which given.  Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle  Borrower to any other or future notice or demand in the same, similar or other circumstances.    Section 12.5 Notices. All notices, demands and requests given or required to be  given by, pursuant to, or relating to, this Agreement shall be in writing. All notices shall be deemed  to have been properly given if mailed by United States registered or certified mail, with return  receipt requested, postage prepaid, or by United States Express Mail or other comparable overnight  courier service to the parties at its address hereinafter set forth, or to such other address as such  party may hereafter specify in accordance with the provisions of this Section 12.5. Any notice  shall be deemed to have been received upon receipt or refusal to accept delivery, in each case as  shown on the return receipt or the receipt of United States Express Mail or such overnight  commercial courier service.    If to Lender: MetLife Real Estate Lending LLC  c/o MetLife Investment Management, LLC  125 S. Wacker Drive, Suite 1100  Chicago, Illinois 60606  Attention: Managing Director  Re: Cortona at Forest Park, St. Louis, MO    with a copy to: MetLife Real Estate Lending LLC  c/o MetLife Investment Management, LLC  125 S. Wacker Drive, Suite 1100  Chicago, Illinois 60606  Attention: Regional Associate General Counsel  Re: Cortona at Forest Park, St. Louis, MO    If to Borrower: Cortona Residences Owner, LLC  c/o Invesco Real Estate  2001 Ross Avenue, Suite 3400  Dallas, Texas 75201  Attention: Asset Manager – Cortona at Forest Park    with a copy to: Greenberg Traurig, P.A.  333 Avenue of the Americas  Miami, Florida 33131-3238  Attention: Richard J. Giusto, Esq.  

 

51  Cortona – Loan Agreement    Section 12.6 Waiver of Jury Trial. To the fullest extent permitted by law,  Borrower and Lender HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY in  any action, proceeding and/or hearing on any matter whatsoever arising out of, or in any way  connected with, the Note, the Security Instrument or any of the other Loan Documents, or the  enforcement of any remedy under any law, statute, or regulation. Neither party will seek to  consolidate any such action in which a jury has been waived, with any other action in which a jury  trial cannot or has not been waived. Each party has received the advice of counsel with respect to  this waiver.    Section 12.7 Headings. The Article and/or Section headings and the Table of  Contents in this Agreement are inserted only as a matter of convenience and for reference, and in  no way define, limit, or describe the scope or intent of any provisions of this Agreement    Section 12.8 Severability. If any provision of this Agreement should be held  unenforceable or void, then that provision shall be separated from the remaining provisions and  shall not affect the validity of this Agreement except that if the unenforceable or void provision  relates to the payment of any monetary sum, then, Lender may, at its option, declare the Secured  Indebtedness immediately due and payable.    Section 12.9 Preferences. Lender shall have the continuing and exclusive right  to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations  of Borrower hereunder. To the extent Borrower makes a payment or payments to Lender, which  payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or  preferential, set aside or required to be repaid to a trustee, receiver or any other party under any  bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such  payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied  shall be revived and continue in full force and effect, as if such payment or proceeds had not been  received by Lender.    Section 12.10 Waiver of Notice. Borrower shall not be entitled to any notices of  any nature whatsoever from Lender except with respect to matters for which this Agreement or the  other Loan Documents specifically and expressly provide for the giving of notice by Lender to  Borrower and except with respect to matters for which Borrower is not, pursuant to applicable  Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the  right to receive any notice from Lender with respect to any matter for which this Agreement or the  other Loan Documents do not specifically and expressly provide for the giving of notice by Lender  to Borrower.    Section 12.11 Remedies of Borrower. In the event that a claim or adjudication is  made that Lender or its agents have acted unreasonably or unreasonably delayed acting in any case  where, by law or under this Agreement, the other Loan Documents or the Environmental  Indemnity, Lender or such agent, as the case may be, has an obligation to act reasonably or  promptly, neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s  sole remedy shall be limited to commencing an action seeking injunctive relief or declaratory  judgment. Any action or proceeding to determine whether Lender has acted reasonably shall be  determined by an action seeking declaratory judgment.  

 

52  Cortona – Loan Agreement    Section 12.12 Expenses. The provisions of Sections 7.6 and 7.7 of the Security  Instrument are hereby incorporated by reference into this Agreement to the same extent and with  the same force as if fully set forth herein.    Section 12.13 Schedules and Exhibits Incorporated. The Schedules and  Exhibits annexed hereto are hereby incorporated herein as a part of this Agreement with the same  effect as if set forth in the body hereof.    Section 12.14 No Joint Venture or Partnership; No Third Party Beneficiaries.    (a) Borrower and Lender intend that the relationships created hereunder and  under the other Loan Documents be solely that of borrower and lender. Nothing herein or therein  is intended to create a joint venture, partnership, tenancy in common, or joint tenancy relationship  between Borrower and Lender nor to grant Lender any interest in the Property other than that of  mortgagee, beneficiary or lender.    (b) This Agreement, the other Loan Documents and the Environmental  Indemnity are solely for the benefit of Lender and nothing contained in this Agreement, the other  Loan Documents or the Environmental Indemnity shall be deemed to confer upon anyone other  than Lender and Borrower any right to insist upon or to enforce the performance or observance of  any of the obligations contained herein or therein. All conditions to the obligations of Lender to  make the Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other  Person shall have standing to require satisfaction of such conditions in accordance with their terms  or be entitled to assume that Lender will refuse to make the Loan in the absence of strict  compliance with any or all thereof and no other Person shall under any circumstances be deemed  to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part  by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable to do so.    Section 12.15 Publicity. All news releases, publicity or advertising by Borrower  or its Affiliates through any media intended to reach the general public which refers to the Loan  Documents or the financing evidenced by the Loan Documents or to Lender or any of its Affiliates  shall be subject to the prior approval of Lender.    Section 12.16 Waiver of Marshalling of Assets. To the fullest extent permitted  by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the  assets of Borrower, Borrower’s partners and others with interests in Borrower, and of the Property,  and shall not assert any right under any laws pertaining to the marshalling of assets, the sale in  inverse order of alienation, homestead exemption, the administration of estates of decedents, or  any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan  Documents to a sale of the Property for the collection of the Secured Indebtedness without any  prior or different resort for collection or of the right of Lender to the payment of the Secured  Indebtedness out of the net proceeds of the Property in preference to every other claimant  whatsoever.    Section 12.17 Waiver of Offsets/Defenses/Counterclaims. Borrower hereby  waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in  any action or proceeding brought against it by Lender or its agents or otherwise to offset any  

 

53  Cortona – Loan Agreement    obligations to make the payments required by the Loan Documents or the Environmental  Indemnity. No failure by Lender to perform any of its obligations hereunder shall be a valid  defense to, or result in any offset against, any payments which Borrower is obligated to make under  any of the Loan Documents or the Environmental Indemnity.    Section 12.18 Conflict; Construction of Documents; Reliance. In the event of  any conflict between the provisions of this Agreement and any of the other Loan Documents or  the Environmental Indemnity, the provisions of this Agreement shall control. The parties hereto  acknowledge that they were represented by competent counsel in connection with the negotiation,  drafting and execution of the Loan Documents and the Environmental Indemnity and that such  Loan Documents and the Environmental Indemnity shall not be subject to the principle of  construing their meaning against the party which drafted same. Borrower acknowledges that, with  respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into  the Loan without relying in any manner on any statements, representations or recommendations of  Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any  limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan  Documents, the Environmental Indemnity or any other agreements or instruments that govern the  Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity  interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right  to raise any defense or take any action on the basis of the foregoing with respect to Lender’s  exercise of any such rights or remedies. Borrower acknowledges that Lender and its Affiliates  engage in the business of real estate financings and other real estate transactions and investments  which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.    Section 12.19 Brokers and Financial Advisors. Borrower hereby represents that  it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders  in connection with the transactions contemplated by this Agreement other than Jones Lang LaSalle  Incorporated (“Broker”), and Borrower shall be solely responsible for payment of all  commissions, finder’s fees or similar amounts due and payable to Broker pursuant to the terms of  their separate agreement, all of which commissions, finder’s fees or similar amounts shall be paid  to Broker by Borrower on the Execution Date. Borrower shall indemnify, defend and hold Lender  and Lender’s investment advisor, MetLife Investment Management, LLC, harmless from and  against any and all claims, liabilities, costs and expenses of any kind (including Lender’s  reasonable attorneys’ fees and disbursements) in any way relating to or arising from a claim by  any Person (including Broker) that such Person acted on behalf of Borrower or Lender in  connection with the transactions contemplated herein. The provisions of this Section 12.19 shall  survive the expiration and termination of this Agreement and the payment of the Secured  Indebtedness. Borrower acknowledges that Lender may have been involved in other transactions  with Broker, and Borrower agrees that it shall have no rights against Lender or defenses to  Borrower’s obligations under the Loan Documents or the Environmental Indemnity due to any  such relationship.    Section 12.20 Exculpation. Upon the occurrence of an Event of Default, except  as provided in this Section 12.20, Lender will look solely to the Property and the security under  the Loan Documents for the repayment of the Secured Indebtedness and will not enforce a  deficiency judgment against Borrower. However, nothing contained in this Section shall limit the  rights of Lender to proceed against Borrower and the general partners of Borrower and/or the  

 

54  Cortona – Loan Agreement    Liable Party, if any, (i) to enforce any Leases entered into by Borrower or its affiliates as Tenant;  (ii) to recover damages for fraud, material misrepresentation, material breach of warranty with  respect to the Loan or intentional physical waste to the Property by Borrower (provided there was  sufficient revenue generated by the Property to maintain the Property); (iii) to recover any  Condemnation Proceeds or Insurance Proceeds or other similar funds which were received by  Borrower and have been misapplied by Borrower or which, under the terms of the Loan  Documents, should have been paid to Lender; (iv) to recover any tenant security deposits, tenant  letters of credit or other deposits or fees paid to Borrower or prepaid rents for a period of more  than thirty (30) days; (v) to recover Rents and Profits received by Borrower after the first day of  the month in which an Event of Default occurs and prior to the date Lender acquires title to the  Property which have not been applied to the Secured Indebtedness or in accordance with the Loan  Documents to operating and maintenance expenses of the Property; (vi) to recover damages, costs  and expenses actually incurred by Lender and arising from, or in connection with Article IX of  this Agreement pertaining to hazardous materials or the Environmental Indemnity; (vii) to recover  all amounts due and payable pursuant to Section 7.6 and Section 7.7 of the Security Instrument,  including, without limitation, any amount expended by Lender in connection with foreclosure of  the Security Instrument; (viii) to recover costs and damages arising from Borrower’s failure to pay  Premiums or Impositions in the event Borrower is not required to deposit such amounts with  Lender pursuant to Article III of this Agreement; (ix) to recover damages arising from Borrower’s  failure to comply with Sections 4.1.5 or 5.2.8 pertaining to ERISA; (x) to recover damages  resulting from Borrower’s failure to comply with the requirements of the Cash Management  Agreement and the Clearing Account Agreement; (xi) to recover damages from Borrower’s failure  to obtain and/or maintain the Interest Rate Cap Agreement or any replacement thereof, as required  by Section 2.10; (xii) to recover damages, costs and expenses from Borrower’s failure to comply  with the terms and conditions as required by Sections 2.11 and 2.12; and/or (xiii) to recover  damages, costs and expenses from Borrower’s failure to obtain and/or maintain the Environmental  Insurance Policy, as required by Section 6.1.2 above.    The limitation of liability set forth in this Section 12.20 shall not apply and the Loan  shall be fully recourse to Borrower and the Liable Party in the event that (i) Borrower commences  a voluntary bankruptcy or insolvency proceeding or (ii) Borrower or its affiliates, members or  principals are involved in a collusive involuntary bankruptcy or insolvency proceeding or an  involuntary bankruptcy or insolvency proceeding and that is not dismissed within ninety (90) days  of filing. In addition, this agreement shall not waive any rights which Lender would have under  any provisions of the Bankruptcy Code to file a claim for the full amount of the Loan or to require  that the Property shall continue to secure all of the Loan.    Notwithstanding the foregoing, the Loan shall be fully recourse to Borrower, in the  event there is a Transfer or Secondary Financing except as permitted in the Loan Documents or  otherwise approved in writing by Lender.    Section 12.21 Prior Agreements. This Agreement, the other Loan Documents  and the Environmental Indemnity contain the entire agreement of the parties hereto and thereto in  respect of the transactions contemplated hereby and thereby, and all prior agreements among or  between such parties, whether oral or written, including, without limitation, the loan application,  are superseded by the terms of this Agreement, the other Loan Documents and the Environmental  Indemnity.  

 

55  Cortona – Loan Agreement    Section 12.22 Liability of Borrower. The obligations of Borrower under this  Agreement, the Security Instrument and the other Loan Documents are subject to the limitations  on recourse set forth in Section 12.20.    Section 12.23 Joint and Several Liability. If more than one Person has executed  this Agreement as “Borrower,” the representations, covenants, warranties and obligations of all  such Persons hereunder shall be joint and several.    Section 12.24 Counterparts. This Agreement may be executed in any number of  duplicate originals and each duplicate original shall be deemed to be an original and all of which  together shall constitute a single agreement.    Section 12.25 Time Of The Essence. Time shall be of the essence with respect to  all of Borrower’s obligations under this Agreement, the other Loan Documents and the  Environmental Indemnity.    Section 12.26 No Merger. In the event that Lender should become the owner of  the Property, there shall be no merger of the estate created by the Security Instrument with the fee  estate in the Property.    Section 12.27 No Oral Agreements. ORAL OR UNEXECUTED  AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO  FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO  EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE  LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THIS  CREDIT AGREEMENT. TO PROTECT YOU (BORROWER) AND US (LENDER) FROM  MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH  COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING AND THE OTHER  LOAN DOCUMENTS, WHICH ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF  THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING  TO MODIFY THEM.    [NO FURTHER TEXT ON THIS PAGE]  

 

Cortona at Forest Park-Loan Agreement     IN WITNESS WHEREOF, the parties hereto have caused this Agreement  to  be  duly executed by their duly authorized representatives, all as of the date of this Agreement.    LENDER:    METLIFE REAL ESTATE LENDING LLC, a  Delaware limited liability company    By:  MetLife Investment Management, LLC,  a Delaware limited liability company,      By:      /s/ Matthew W. Sharples  Name: Matthew W. Sharples  Its: Authorized Signatory  and Managing Director  

 

Cortona at Forest Park-Loan Agreement             BORROWER:    CORTONA RESIDENCES OWNER, LLC,  a Delaware limited liability company    By:       /s/ Jason Geer   Name: Jason.Geer  Title:    Vice President  

 

Schedule 4.1.21 - 1   SCHEDULE 4.1.21  MATERIAL AGREEMENTS  None.  

 

Exhibit A - 1   EXHIBIT A    Intentionally Omitted  

 

Exhibit B - 1   EXHIBIT B  LEASING GUIDELINES  The following are the initial Leasing Guidelines:    (a) All Leases executed after the Execution Date shall be on the standard form of lease  approved by Lender in writing;    (b) All Leases executed after the Execution Date shall have an initial term of at least  six (6) months but not more than eighteen (18) months; provided that up to ten percent (10%) of  the units may be leased for six (6) to eight (8) months and up to three percent (3%) of the units can  be leased for less than six (6) months;    (c) There shall not be more than five percent (5%) of the apartments used as corporate  apartments;    (d) All Leases shall have a monthly minimum rent payable at market rent for units with  comparable size, location and view premiums, together with concessions not greater than generally  available in units of comparable size and location in the market area;    (e) No Leases (except for Leases aggregating ten percent (10%) or less of the Property)  shall be entered into if there is an Event of Default under any of the Loan Documents which  continues beyond all applicable notice and cure periods;    (f) All payments of rent, additional rent or any other amounts due from a tenant to a  landlord under any Lease shall be made in money of the United States of America that at the time  of payment shall be legal tender for the payment of all obligations; and    (g) The standard form of lease shall provide that each lease shall be subordinate to the  lien of the Mortgage and shall provide that Lender or the acquiring foreclosure purchaser may elect  to make the lease superior to the Mortgage and to require the tenant to attorn to Lender or to such  purchaser. Lender may, at its election, provide a non-disturbance agreement to any tenant. Any  tenant, if any, to whom non-disturbance is granted shall execute Lender’s standard form of non-  disturbance agreement. Borrower shall pay costs and expenses incurred by Lender in connection  with granting a non-disturbance agreement.      * * *  

 

Exhibit C - 1   EXHIBIT C  RENT ROLL  [***]  

 

Exhibit D - 1   EXHIBIT D  ORGANIZATIONAL CHART  [***] 

 

  SCHEDULE 4.1.36    AMENDMENTS TO REA    None.

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