Document:

Exhibit
10.1

 

Loan Agreement

among

Behringer Harvard
Mockingbird Commons, LLC,

as Borrower

and

Bank of America, N.A.,

as Administrative Agent

and Letter of
Credit Issuing Lender

and

The Other Financial
Institutions

Party Hereto

Dated as of
September     , 2007

Banc of America
Securities LLC,

as

Sole Arranger and
Sole Book Manager

 

 

TABLE
OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  Article 1 – THE LOAN

  	
   

  	
  1

  
	
  1.1

  	
   

  	
  General Information and Exhibits

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Purpose

  	
   

  	
  1

  
	
  1.3

  	
   

  	
  Commitment to Lend

  	
   

  	
  1

  
	
  1.4

  	
   

  	
  Budget

  	
   

  	
  2

  
	
  1.5

  	
   

  	
  Reserved

  	
   

  	
  2

  
	
  1.6

  	
   

  	
  Evidence of Debt

  	
   

  	
  2

  
	
  1.7

  	
   

  	
  Interest Rates

  	
   

  	
  2

  
	
  1.8

  	
   

  	
  Prepayment

  	
   

  	
  5

  
	
  1.9

  	
   

  	
  Consequential Loss

  	
   

  	
  6

  
	
  1.10

  	
   

  	
  Late Charge

  	
   

  	
  6

  
	
  1.11

  	
   

  	
  Taxes

  	
   

  	
  6

  
	
  1.12

  	
   

  	
  Payment Schedule and Maturity Date; Extension Rights

  	
   

  	
  7

  
	
  1.13

  	
   

  	
  Advances

  	
   

  	
  9

  
	
  1.14

  	
   

  	
  Administrative Agent Advances

  	
   

  	
  11

  
	
  1.15

  	
   

  	
  Defaulting Lender

  	
   

  	
  12

  
	
  1.16

  	
   

  	
  Several Obligations; No Liability, No Release

  	
   

  	
  14

  
	
  1.17

  	
   

  	
  Replacement of Lenders

  	
   

  	
  14

  
	
  1.18

  	
   

  	
  Borrower’s Rights

  	
   

  	
  15

  
	
  1.19

  	
   

  	
  Swap Transaction

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 2 – ADDITIONAL COVENANTS AND AGREEMENTS

  	
   

  	
  16

  
	
  2.1

  	
   

  	
  Inspection

  	
   

  	
  16

  
	
  2.2

  	
   

  	
  Notice to Administrative Agent

  	
   

  	
  16

  
	
  2.3

  	
   

  	
  Financial Statements

  	
   

  	
  17

  
	
  2.4

  	
   

  	
  Other Information

  	
   

  	
  17

  
	
  2.5

  	
   

  	
  Reports and Testing

  	
   

  	
  17

  
	
  2.6

  	
   

  	
  Advertising by Lenders

  	
   

  	
  17

  
	
  2.7

  	
   

  	
  Appraisal

  	
   

  	
  17

  
	
  2.8

  	
   

  	
  Payment of Withholding Taxes

  	
   

  	
  18

  
	
  2.9

  	
   

  	
  ERISA and Prohibited Transaction Taxes

  	
   

  	
  18

  
	
  2.10

  	
   

  	
  Contest of Claims

  	
   

  	
  18

  
	
  2.11

  	
   

  	
  Property Management and Franchises

  	
   

  	
  19

  
	
  2.12

  	
   

  	
  Single Purpose Entity/Separateness

  	
   

  	
  20

  
	
  2.13

  	
   

  	
  1.0x DSC Performance Threshold

  	
   

  	
  20

  
	
  2.14

  	
   

  	
  Unit Sales Contract

  	
   

  	
  20

  
	
  2.15

  	
   

  	
  Representations and Covenants Regarding Condominium

  	
   

  	
  21

  
	
  2.16

  	
   

  	
  Unit Sales Contracts

  	
   

  	
  21

  
	
  2.17

  	
   

  	
  Partial Releases of Units

  	
   

  	
  22

  
	
  2.18

  	
   

  	
  Interstate Land Sales Act

  	
   

  	
  22

  
	
  2.19

  	
   

  	
  Earnest Money Deposits

  	
   

  	
  22

  
						

 

 i
 

 

	
  2.20

  	
   

  	
  Assignment of Contract Rights

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 3 – REPRESENTATIONS AND WARRANTIES

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Article 4 – DEFAULT AND REMEDIES

  	
   

  	
  25

  
	
  4.1

  	
   

  	
  Events of Default

  	
   

  	
  25

  
	
  4.2

  	
   

  	
  Remedies

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 5 – ADMINISTRATIVE AGENT

  	
   

  	
  30

  
	
  5.1

  	
   

  	
  Appointment and Authorization of Administrative
  Agent

  	
   

  	
  30

  
	
  5.2

  	
   

  	
  Delegation of Duties

  	
   

  	
  32

  
	
  5.3

  	
   

  	
  Liability of Administrative Agent

  	
   

  	
  32

  
	
  5.4

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  32

  
	
  5.5

  	
   

  	
  Notice of Default

  	
   

  	
  33

  
	
  5.6

  	
   

  	
  Credit Decision; Disclosure of Information by
  Administrative Agent

  	
   

  	
  33

  
	
  5.7

  	
   

  	
  Indemnification of Administrative Agent

  	
   

  	
  34

  
	
  5.8

  	
   

  	
  Administrative Agent in Individual Capacity

  	
   

  	
  34

  
	
  5.9

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  35

  
	
  5.10

  	
   

  	
  Releases; Acquisition and Transfers of Collateral

  	
   

  	
  36

  
	
  5.11

  	
   

  	
  Application of Payments

  	
   

  	
  37

  
	
  5.12

  	
   

  	
  Benefit

  	
   

  	
  38

  
	
  5.13

  	
   

  	
  Co-Agents; Lead Managers

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article 6 – GENERAL TERMS AND CONDITIONS

  	
   

  	
  38

  
	
  6.1

  	
   

  	
  Consents; Borrower’s Indemnity

  	
   

  	
  38

  
	
  6.2

  	
   

  	
  Miscellaneous

  	
   

  	
  40

  
	
  6.3

  	
   

  	
  Notices

  	
   

  	
  40

  
	
  6.4

  	
   

  	
  Payments Set Aside

  	
   

  	
  41

  
	
  6.5

  	
   

  	
  Successors and Assigns

  	
   

  	
  41

  
	
  6.6

  	
   

  	
  Confidentiality

  	
   

  	
  44

  
	
  6.7

  	
   

  	
  Set-off

  	
   

  	
  45

  
	
  6.8

  	
   

  	
  Sharing of Payments

  	
   

  	
  45

  
	
  6.9

  	
   

  	
  Amendments; Survival

  	
   

  	
  46

  
	
  6.10

  	
   

  	
  Costs and Expenses

  	
   

  	
  47

  
	
  6.11

  	
   

  	
  Tax Forms

  	
   

  	
  48

  
	
  6.12

  	
   

  	
  Further Assurances

  	
   

  	
  50

  
	
  6.13

  	
   

  	
  Inducement to Lenders

  	
   

  	
  50

  
	
  6.14

  	
   

  	
  Forum

  	
   

  	
  50

  
	
  6.15

  	
   

  	
  Interpretation

  	
   

  	
  51

  
	
  6.16

  	
   

  	
  No Partnership, etc

  	
   

  	
  51

  
	
  6.17

  	
   

  	
  Records

  	
   

  	
  51

  
	
  6.18

  	
   

  	
  Commercial Purpose

  	
   

  	
  51

  
	
  6.19

  	
   

  	
  Service of Process

  	
   

  	
  52

  
	
  6.20

  	
   

  	
  USA Patriot Act Notice

  	
   

  	
  52

  
	
  6.21

  	
   

  	
  Entire Agreement

  	
   

  	
  52

  
	
  6.22

  	
   

  	
  Dispute Resolution

  	
   

  	
  52

  
	
  6.23

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  54

  

 

 ii
 

EXHIBITS:

	
  EXHIBIT “A”

  	
   

  	
  -

  	
   

  	
  Legal Description of Land

  
	
  EXHIBIT “B”

  	
   

  	
  -

  	
   

  	
  Definitions and Financial Statements

  
	
  EXHIBIT “C”

  	
   

  	
  -

  	
   

  	
  Conditions Precedent to the First Advance

  
	
  EXHIBIT “D”

  	
   

  	
  -

  	
   

  	
  Budget

  
	
  EXHIBIT “E”

  	
   

  	
  -

  	
   

  	
  Reserved

  
	
  EXHIBIT “F”

  	
   

  	
  -

  	
   

  	
  Advances

  
	
  EXHIBIT “F-1”

  	
   

  	
  -

  	
   

  	
  Draw Request

  
	
  EXHIBIT “G”

  	
   

  	
  -

  	
   

  	
  Survey Requirements

  
	
  EXHIBIT “H”

  	
   

  	
  -

  	
   

  	
  Reserved

  
	
  EXHIBIT “I”

  	
   

  	
  -

  	
   

  	
  Leasing and Tenant Matters

  
	
  EXHIBIT “J”

  	
   

  	
  -

  	
   

  	
  Letters of Credit

  
	
  EXHIBIT “K”

  	
   

  	
  -

  	
   

  	
  Assignment and Assumption

  
	
  EXHIBIT “L”

  	
   

  	
  -

  	
   

  	
  Deed of Trust Note

  
	
  EXHIBIT “M”

  	
   

  	
  -

  	
   

  	
  Schedule of Lenders

  
	
  EXHIBIT “N”

  	
   

  	
  -

  	
   

  	
  Schedule of Costs Paid from Up-Front Equity

  

 

 iii

LOAN
AGREEMENT

THIS LOAN AGREEMENT
(“Agreement”) is made by and among each lender from time to time a party
hereto (individually, a “Lender” and collectively, the “Lenders”),
and BANK OF AMERICA, N.A., a national banking association as Administrative
Agent and L/C Issuer, and BEHRINGER HARVARD MOCKINGBIRD COMMONS, LLC, a
Delaware limited liability company (“Borrower”), who agree as follows:

ARTICLE
1 – THE LOAN

1.1           General
Information and Exhibits.  This
Agreement includes the Exhibits listed below, all of which Exhibits are
attached hereto and made a part hereof for all purposes.  Borrower and Lenders agree that if any
Exhibit to be attached to this Agreement contains blanks, the same shall be
completed correctly and in accordance with this Agreement prior to or at the
time of the execution and delivery thereof.

	
  Exhibit “A”

  	
  -

  	
  Legal
  Description of the Land

  
	
  Exhibit “B”

  	
  -

  	
  Definitions and
  Financial Statements

  
	
  Exhibit “C”

  	
  -

  	
  Conditions
  Precedent to the Initial Advance

  
	
  Exhibit “D”

  	
  -

  	
  Budget

  
	
  Exhibit “E”

  	
  -

  	
  Reserved

  
	
  Exhibit “F”

  	
  -

  	
  Advances

  
	
  Exhibit “F-1”

  	
  -

  	
  Draw Request

  
	
  Exhibit “G”

  	
  -

  	
  Survey
  Requirements

  
	
  Exhibit “H”

  	
  -

  	
  Reserved

  
	
  Exhibit “I”

  	
  -

  	
  Leasing and
  Tenant Matters

  
	
  Exhibit “J”

  	
  -

  	
  Letters of
  Credit

  
	
  Exhibit “K”

  	
  -

  	
  Assignment and
  Assumption

  
	
  Exhibit “L”

  	
  -

  	
  Deed of Trust
  Note

  
	
  Exhibit “M”

  	
  -

  	
  Schedule of
  Lenders

  
	
  Exhibit “N”

  	
  -

  	
  Schedule of
  Costs Paid from Up-Front Equity

  

 

The Exhibits contain
other terms, provisions and conditions applicable to the Loan.  Capitalized terms used in this Agreement
shall have the meanings assigned to them in Exhibit “B”.  This Agreement and the other Loan Documents,
which must be in form, detail and substance satisfactory to Lenders, evidence
the agreements of Borrower and Lenders with respect to the Loan.  Borrower shall comply with all of the Loan
Documents.

1.2           Purpose.  The proceeds of the Loan shall be used by
Borrower to (i) refinance a portion of the indebtedness that currently
encumbers the Land and the Improvements; and (ii) pay other fees, costs and
expenses relating to the Property if and to the extent that such costs are
specifically provided for in the Budget, as amended from time to time.

1.3           Commitment
to Lend.  Borrower agrees to borrow
from each Lender, and each Lender severally agrees to make advances of its Pro
Rata Share of the Loan proceeds to Borrower in amounts at any one time
outstanding not to exceed such Lender’s Pro Rata Share of the Loan and (except
for Administrative Agent with respect to Administrative Agent Advances), on the
terms and subject to the conditions set forth in this Agreement and Exhibit “C”
and Exhibit “F” attached to this

 1
 

Agreement.  Lender’s commitment to lend shall expire and
terminate automatically if the Loan is prepaid in full. The Loan is not revolving.  Any amount repaid may not be reborrowed.

1.4           Budget.  The Budget is attached to this Agreement as Exhibit
“D”.  Borrower agrees that the Loan
proceeds will be used as provided in the Budget.

1.5           Reserved.

1.6           Evidence
of Debt.

(a)           Amounts of the Loan
made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and by the Administrative Agent in the ordinary
course of business.  The accounts or
records maintained by the Administrative Agent and each Lender shall be prima
facie evidence of the amount of the Loan made by the Lenders to the Borrower
and the interest and payments thereon. 
Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the  Indebtedness.  In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records
of Administrative Agent shall control in the absence of manifest error.  Each Lender may attach schedules to its
Note(s) and endorse thereon the date, amount and maturity of the applicable
Note and payments with respect thereto.

(b)           In addition to the
accounts and records referred to in subsection (a), each Lender and the
Administrative Agent shall maintain in accordance with its usual practice
accounts or records evidencing the purchases and sales by such Lender of
participations in Letters of Credit.  In
the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall
control in the absence of manifest error.

1.7           Interest
Rates.  The Principal Debt from day
to day outstanding which is not past due shall bear interest at a rate per
annum equal to the lesser of (i) the maximum non-usurious rate of interest
allowed by applicable law or (ii) the following (computed as provided in Section
1.7.3 hereof) as applicable:

(a)           On Base Rate Principal,
on any day, the Base Rate; and

(b)           On LIBOR Rate
Principal, for the applicable Interest Period, the applicable LIBOR Rate.

1.7.1        Interest Rate Elections.

(a)           Subject to the
conditions and limitations in this Loan, Borrower may by written notice (a “Rate
Election Notice”):

(i)            Elect, for a new
advance of funds, that such Principal Debt will be Base Rate Principal, LIBOR
Rate Principal or a combination thereof;

(ii)           Elect to convert, on a
LIBOR Business Day, all or part of Base Rate Principal into LIBOR Rate
Principal or a combination thereof;

 2
 

(iii)          Elect to convert, on the
last day of the Interest Period applicable thereto, all or part of any LIBOR
Rate Principal into Base Rate Principal or a combination thereof;

(iv)          Elect to continue,
commencing on the last day of the Interest Period applicable thereto, any LIBOR
Rate Principal.

If, for any reason, an
effective election is not made in accordance with the terms and conditions
hereof for any principal advance or for any LIBOR Rate Principal for which the
corresponding Interest Period is expiring, or to convert Base Rate Principal to
LIBOR Rate Principal, then the sums in question will be Base Rate Principal until
an effective LIBOR Rate Election is thereafter made for such sums.

(b)           Each Rate Election
Notice must be received by Administrative Agent not later than 10:00 a.m.,
Administrative Agent’s Time on the applicable date as follows:

(i)            With respect to an
advance of or conversion to Base Rate Principal, one (1) Business Day prior to
the proposed date of advance or conversion; and

(ii)           With respect to an
advance of, conversion to or continuation of LIBOR Rate Principal, three (3)
LIBOR Business Days prior to the proposed date of advance, conversion or
continuation.

Unless otherwise
specified herein, no conversion from LIBOR Rate Principal may be made other
than at the end of the corresponding Interest Period.  Each Rate Election Notice shall stipulate:  (A) the amount of the advance or of the
Principal Debt to be converted or continued; (B) the nature of the proposed
advance, conversion or continuation, which shall be either Base Rate Principal,
LIBOR Rate Principal or a combination thereof, and in the case of a conversion
or continuation, the nature of the Principal Debt to be converted or continued;
and (C) in the case of LIBOR Rate Principal, the proposed commencement date and
duration of the Interest Period.  All such
notices shall be irrevocable once given, and shall be deemed to have been given
only when actually received by Administrative Agent in writing in form
specified by Administrative Agent.

(c)           Administrative Agent
shall promptly notify Borrower and Lenders of the interest rate applicable to
each portion of the Principal Debt other than a Base Rate Principal upon
determination of same.

1.7.2        General Conditions Precedent to Certain
LIBOR Rate Elections.  In addition to
any other conditions herein, a LIBOR Rate Election shall not be permitted if:

(a)           A Default or a
Potential Default has occurred and is continuing; or

(b)           After giving effect to
the requested LIBOR Rate Election the sum of all LIBOR Rate Principal plus all
Base Rate Principal plus all Letters of Credit would exceed the combined
Commitments; or

(c)           After giving effect to
the requested LIBOR Rate Election more than three (3) LIBOR Rate Elections in
the aggregate, would be in effect at any one time; or

 3
 

(d)           The amount of LIBOR
Rate Principal requested in the LIBOR Rate Election is other than $100,000.00
or more; or

(e)           The requested interest
period does not conform to the definition of Interest Period herein; or

(f)            Any of the
circumstances referred to in Section 1.7.4 hereof shall apply with
respect to the requested LIBOR Rate Election or the requested LIBOR Rate
Principal.

1.7.3        Computations and Determinations.  All computations of interest for Base Rate
Principal shall be made on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed (including the first day but excluding the last
day).  All computations of interest for
LIBOR Rate Principal and other fees and interest shall be made on the basis of
a 360-day year and actual days elapsed (including the first day but excluding
the last day).  Administrative Agent shall
determine each interest rate applicable to the Principal Debt in accordance
with this Agreement and its determination thereof shall be conclusive in the
absence of manifest error.  The books and
records of Administrative Agent shall be prima facie evidence of all sums owing
to Lenders from time to time under this Agreement, but the failure to record
any such information shall not limit or affect the obligations of Borrower
under the Loan Documents.

1.7.4        Unavailability of Rate.

(a)           If, with respect to any
LIBOR Rate Election or any LIBOR Rate Principal outstanding hereunder, Required
Lenders determine that no adequate basis exists for determining the LIBOR Rate
or that the LIBOR Rate will not adequately and fairly reflect the cost to
Lenders of funding or maintaining the applicable LIBOR Rate Principal for such
Interest Period and such Lender(s) so notify Administrative Agent and Borrower,
then until Required Lender(s) notify Administrative Agent and Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
obligation of Lender(s) to permit such LIBOR Rate Election shall be suspended
and (ii) all existing affected LIBOR Rate Principal as applicable, shall
automatically become Base Rate Principal on the last day of the corresponding
Interest Period.

(b)           Additionally, if, with
respect to any LIBOR Rate Election or any LIBOR Rate Principal outstanding
hereunder, any Lender determines that any applicable Law, or any request or
directive (whether or not having the force of Law) of any Tribunal, or
compliance therewith by such Lender, prohibits or restricts or makes impossible
the making or maintaining of such LIBOR Rate Election or LIBOR Rate Principal
or the charging of interest on such LIBOR Rate Principal and such Lender so notifies
Administrative Agent and Borrower, then until such Lender notifies
Administrative Agent and Borrower that the circumstances giving rise to such
suspension no longer exist, (i) the obligation of such Lender to permit such
LIBOR Rate Election as applicable, shall be suspended and (ii) all existing
affected LIBOR Rate Principal shall automatically become Base Rate Principal,
either (1) as to LIBOR Rate Principal, on the last day of the corresponding
Interest Period (if the Lender determines that it may lawfully continue to fund
and maintain the affected LIBOR Rate Principal to such day); or (2) as to LIBOR
Rate Principal, if the Lender determines that it may not lawfully continue to
fund and maintain the affected LIBOR Rate Principal to such day, and in such
case Borrower shall pay to such Lender(s) the Consequential Loss, if any,
pursuant to Sections 1.8 and 1.9 hereof.  Each Lender agrees to designate a different

 4
 

Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender.

1.7.5        Increased Cost and Reduced Return.  If at any time after the date hereof, any
Lender (which shall include, for purposes of this Section, any corporation
controlling any Lender) determines that the adoption or modification of any
applicable Law regarding taxation, such Lender’s required levels of reserves,
deposits, insurance or capital (including any allocation of capital
requirements or conditions), or similar requirements, or any interpretation or
administration thereof by any Tribunal or compliance of such Lender with any of
such requirements, has or would have the effect of (a) increasing such Lender’s
costs relating to the Indebtedness, or (b) reducing the yield or rate of return
of such Lender on the Indebtedness, to a level below that which such Lender
could have achieved but for the adoption or modification of any such
requirements, Borrower shall, within fifteen (15) days of any request by such
Lender, pay to Lender such additional amounts as (in such Lender’s sole
judgment, after good faith and reasonable computation) will compensate such
Lender for such increase in costs or reduction in yield or rate of return of
such Lender (and assuming that the interest rate on Loan has not been adjusted
to take into account such additional amount). 
No failure by such Lender to immediately demand payment of any
additional amounts payable hereunder shall constitute a waiver of such Lender’s
right to demand payment of such amounts at any subsequent time.  Nothing herein contained shall be construed
or so operate as to require Borrower to pay any interest, fees, costs or
charges greater than is permitted by applicable Law.

1.7.6        Past Due Rate.  If any amount payable by Borrower under any
Loan Document is not paid when due (without regard to any applicable grace
periods), such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Past Due Rate to the fullest extent
permitted by applicable Law.  Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable on demand, at a rate per annum (the “Past Due Rate”)
equal to the lesser of (i) the maximum non-usurious rate of interest allowed by
applicable law or (ii) two percent (2%) plus the higher of (a) the Prime Rate,
or (b) the Adjusted LIBOR Rate, or (c) the BBA LIBOR Daily Rate.

1.8           Prepayment.  Borrower may prepay the principal balance of
this Loan, in full at any time or in part from time to time, provided that: (i)
Administrative Agent shall have actually received from Borrower prior written
notice of Borrower’s intent to prepay, the amount of principal which will be
prepaid (the “Prepaid Principal”), and the date on which the prepayment
will be made; (ii) each prepayment shall be in the amount of $1,000 or more
(unless the prepayment retires the outstanding balance of this Loan in full);
and (iii) each prepayment shall be in the amount of 100% of the Prepaid
Principal, plus accrued unpaid interest thereon to the date of prepayment, plus
any other sums which have become due to Administrative Agent and Lenders under
the Loan Documents on or before the date of prepayment but have not been paid;
and (iv) no portion of LIBOR Rate Principal may be prepaid except on the last
day of the Interest Period applicable thereto, unless (x) the prior written
consent of Administrative Agent is obtained, which consent shall not be
required so long as no Default has occurred and, if given, shall provide,
without limitation, the manner and order in which the prepayment is to be
applied to the Indebtedness, and (y) Borrower pays any Consequential Loss as a
result thereof, in accordance with Section 1.9 below. If this Loan is
prepaid in full, any commitment of Lenders for further advances shall
automatically terminate.

 5
 

1.9           Consequential
Loss.  Within fifteen (15) days after
request by any Lender (or at the time of any prepayment), Borrower shall pay to
such Lender such amount or amounts as will compensate such Lender for any loss,
cost, expense, penalty, claim or liability, including any loss incurred in
obtaining, prepaying, liquidating or employing deposits or other funds from
third parties (but excluding any loss of revenue, profit or yield of any
Lender), as determined by such Lender in its judgment reasonably exercised
(together, “Consequential Loss”) incurred by such Lender with respect to
any LIBOR Rate, including any LIBOR Rate Election or LIBOR Rate Principal as a
result of: (a) the failure of Borrower to make payments on the date specified
under this Agreement or in any notice from Borrower to Administrative Agent;
(b) the failure of Borrower to borrow, continue or convert into LIBOR Rate
Principal on the date or in the amount specified in a notice given by Borrower
to Administrative Agent pursuant to this Agreement; (c) the early termination
of any Interest Period for any reason; or (d) the payment or prepayment of any
amount on a date other than the date such amount is required or permitted to be
paid or prepaid, whether voluntarily or by reason of acceleration, including,
but not limited to, acceleration upon any transfer or conveyance of any right,
title or interest in the Property giving Administrative Agent on behalf of
Lenders the right to accelerate the maturity of the Loan as provided
herein.  The foregoing notwithstanding,
the amounts of the Consequential Loss shall never be less than zero or greater
than is permitted by applicable Law.  If
any Consequential Loss will be due, the Lender shall deliver to Borrower a
notice, in reasonable detail, as to the amount of, reasons for and the
calculation of the Consequential Loss, which notice shall be conclusive in the
absence of manifest error.  Neither Administrative
Agent nor the Lenders shall have any obligation to purchase, sell and/or match
funds in connection with the funding or maintaining of the Loan or any portion
thereof.  The obligations of Borrower
under this Section shall survive any termination of the Loan Documents and
payment of the Loan and shall not be waived by any delay by Administrative
Agent or Lenders in seeking such compensation.

1.10         Late
Charge.  If Borrower shall fail to
make any payment due hereunder or under the terms of any Note (other than the
principal  balance due on the Maturity
Date or acceleration of the Loan) within fifteen (15) days after the date such
payment is due, Borrower shall pay to the applicable Lender or Lenders on
demand a late charge equal to four percent (4%) of such payment.  Such fifteen (15) day period shall not be
construed as in any way extending the due date of any payment.  The “late charge” is imposed for the purpose
of defraying the expenses of a Lender incident to handling such defaulting
payment.  This charge shall be in
addition to, and not in lieu of, any other remedy Lenders may have and is in
addition to any fees and charges of any agents or attorneys which
Administrative Agent or Lenders may employ upon the occurrence of a Default,
whether authorized herein or by Law.

1.11         Taxes.

(a)           Subject to Section
6.11, any and all payments by Borrower to or for the account of
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto levied by any jurisdiction
within the United States of America, excluding, in the case of
Administrative Agent and any Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which
Administrative Agent or such Lender, as the case may be, is subject (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,

 6
 

withholdings or similar
charges, and liabilities being hereinafter referred to as “Taxes”).  Subject to Section 6.11, if Borrower
shall be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to Administrative Agent or any Lender, (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), Administrative Agent and such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, (iii) Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable Laws, and (iv) within 30 days after the date of such payment,
Borrower shall furnish to Administrative Agent (which shall forward the same to
such Lender) the original or a certified copy of a receipt evidencing payment
thereof.

(b)           In addition, Borrower
agrees to pay any and all present or future stamp, court or documentary taxes
and any other excise or property taxes or charges or similar levies which arise
from any payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as “Other Taxes”).

(c)           Borrower agrees to
indemnify Administrative Agent and each Lender for the full amount of Taxes and
Other Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by Administrative
Agent and such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, in each case whether or
not such Taxes or Other Taxes were correctly or legally imposed or asserted by
the relevant Tribunal but, subject to Administrative Agent or such Lender
complying with the requirements of Section 6.11(a)(iii) hereof to the
extent the liability indemnified against relates to the subject matter
thereof.  Payment under this subsection
(d) shall be made within 30 days after the date the Lender or the
Administrative Agent makes a demand therefor. 
If subsequent to such payment, a final determination is made that any
Taxes or Other Taxes paid Borrower were not legally or correctly imposed or
assessed by the applicable Tribunal, Borrower shall be entitled to a return of
such taxes.

(d)           Without prejudice to
the survival of any other agreement of Borrower hereunder, the agreements and
obligations of Borrower contained in this Section 1.11 shall survive the
termination of the Commitments and the payment in full of all the other Indebtedness.

1.12         Payment
Schedule and Maturity Date; Extension Rights.

(a)           The entire principal
balance of the Loan then unpaid and all accrued interest then unpaid shall be
due and payable in full on the Maturity Date. 
Accrued unpaid interest shall be due and payable on the first (1st) day of the calendar month
after the date of this Agreement and on the same day of each succeeding
calendar month thereafter until all principal and accrued interest owing on
this Loan shall have been fully paid and satisfied.

(b)           Borrower shall have two
options to extend the Maturity Date of the Loan for a period of twelve (12)
months each (each twelve month period, an “Extension Period”), at which
time the term “Maturity Date” shall mean the Maturity Date, as extended
pursuant to this Section 1.12. The exercise of each extension option
shall be effective only if all of the following conditions have been satisfied
as to each extension on or before the applicable Maturity Date:

 7
 

(i)            There shall then exist
no Default or Potential Default.

(ii)           the NOI for the
Property, verified by Administrative Agent’s NOI Confirmation Letter after
receipt of Borrower’s NOI Affidavit, based on the most recent twelve calendar
months for which Borrower’s NOI Affidavits are due prior to the Maturity Date
is not less than the 1.40xDSC Performance Threshold based on the same twelve
calendar month period.    Borrower shall
have the right to prepay the Loan in an amount sufficient to satisfy the
condition in this paragraph (ii) in connection with the exercise of either or
both extension options.

(iii)          Either the most current
appraisal of the Property in the Administrative Agent’s possession (that
complies with Section 2.13 below and has been approved by Administrative
Agent) or, if required by Administrative Agent, an update of such appraisal
prepared within the 60 days preceding the existing Maturity Date, in form and
substance satisfactory to Administrative Agent and otherwise in accordance with
the appraisal requirements described in Section 2.13  below,
shows that the Deemed Principal Balance is not greater than 65%  of the fair market value of the Property based on a “stabilized
value”.

(iv)          Borrower shall cause to
be delivered to Administrative Agent at Borrower’s expense an endorsement to
the Title Insurance reflecting that the coverage afforded by the Title
Insurance has not been adversely affected as a result of the modification and
extension of the Loan and the documents referred to in paragraph (v) below.

(v)           Borrower and Guarantor
shall have executed and delivered to Administrative Agent a modification and
extension agreement, providing for, among other things (1) the extension of the
Maturity Date, (2) the reaffirmation by Borrower and Guarantor of their
respective obligations under the Loan Documents, (3) in addition to the payment
of interest each month as provided in this Agreement, the commencement by
Borrower of principal payments on the Loan beginning on the first day of the
first Extension Period and continuing to be due and payable on the first day of
each calendar month thereafter until the Maturity Date, in an amount equal to
the average monthly payments of principal which would be payable during the
first 24 months of a 30 year amortization period, if the Deemed Principal
Balance were to be amortized over an assumed thirty (30) year period, at an
interest rate per annum equal to the greater of (i) six and one-half percent
(6.5%) or (ii) 1.75%, plus the Treasury Rate (to be determined approximately
ten (10) days before the extension of the Maturity Date), and (4) the waiver
and release by Borrower and Guarantor of any defenses, claims, counterclaims,
and rights of offset, if any, which Borrower or Guarantor may then have in
respect of Administrative Agent and the Indebtedness and Obligations, together
with such other agreements, documents or amendments to the Loan Documents as
are reasonably requested by Administrative Agent to properly document the
extension, all in form and content satisfactory to Administrative Agent in its
good faith business judgment. During any Extension Period, unless noted above,
all terms and conditions of the Loan Documents (including but not limited to
interest rates and payments) pertaining to the Loan shall continue to apply.

 8
 

(vi)          The request for
extension must be made to Administrative Agent in writing not more than ninety
(90) days, and not less than forty five (45) days, prior to the applicable
Maturity Date.

(vii)         Borrower shall have paid
to Administrative Agent, for the ratable benefit of  Lenders, as a condition to such extension on
or before the first day of the applicable Extension Period, an extension fee of
0.25% of the then Deemed Principal Balance of the Loan as of the first day of
each Extension Period.

(viii)        Administrative Agent shall
have determined, in its commercially reasonable judgment, that no material
adverse change has occurred with respect to the Project or the financial
condition or creditworthiness of Borrower or Guarantor.

If all of the foregoing
conditions are not satisfied strictly in accordance with their terms, the
extension shall not be or become effective. 
Upon the execution and delivery by Borrower, Guarantor and
Administrative Agent of the modification and extension agreement referred to in
subparagraph (v) above, the extension shall be deemed to be effective. Each
extension option is exercisable separately only and not together and the second
extension option shall be void and not exercisable unless the first extension
option was properly exercised.  Whether
or not the extension becomes effective, Borrower shall pay all out-of-pocket
costs and expenses incurred by Administrative Agent in connection with the
proposed extension (pre- and post-closing), including, without limitation,
appraisal fees, environmental audit and legal fees; all such costs and expenses
incurred up to the time of Administrative Agent’s written agreement to the
extension shall be due and payable prior to Administrative Agent’s execution of
that agreement (or if the proposed extension does not become effective, then
upon demand by Administrative Agent).

1.13         Advances.

(a)           Following receipt of a
Draw Request, Administrative Agent shall promptly provide each Lender with a
copy of the Draw Request Form in the form of Exhibit “F-1”, the related
AIA Document G-702 and G-703, if requested by Administrative Agent and the
related written certification by Borrower’s Architect.  Administrative Agent shall notify each Lender
telephonically (with confirmation by facsimile) or by facsimile (with
confirmation by telephone) not later than 1:00 p.m. Administrative Agent’s Time
two (2) Business Days prior to the advance Funding Date for LIBOR Rate
Principal advances, and one (1) Business Day prior to the advance Funding Date
for all other advances, of its Pro Rata Share of the amount Administrative
Agent has determined shall be advanced in connection therewith (“Advance
Amount”).  In the case of an advance
of the Loan, each Lender shall make the funds for its Pro Rata Share of the
Advance Amount available to Administrative Agent not later than 11:00 a.m.
Administrative Agent’s Time on the Funding Date thereof.  After Administrative Agent’s receipt of the
Advance Amount from Lenders, Administrative Agent shall make proceeds of the
Loan in an amount equal to the Advance Amount (or, if less, such portion of the
Advance Amount that shall have been paid to Administrative Agent by Lenders in
accordance with the terms hereof) available to Borrower on the applicable
Funding Date by advancing such funds to Borrower in accordance with the provisions
of Exhibit “F”.

 9
 

(b)           All payments by
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by Borrower hereunder shall
be made to Administrative Agent not later than 12:00 p.m. Administrative Agent’s
Time on the date specified herein. 
Administrative Agent shall distribute to each Lender such funds as such
Lender may be entitled to receive hereunder, (i) on or before 3:00 p.m. (Administrative Agent’s Time) on the
day Administrative Agent receives such funds, if Administrative Agent has
received such funds on or before 12:00 p.m. (Administrative Agent’s Time), or
(ii) on or before 12:00 p.m. (Administrative Agent’s Time) on the Business
Day following the day Administrative Agent receives such funds, if
Administrative Agent receives such funds after 12:00 p.m. (Administrative Agent’s
Time).  If Administrative Agent fails to
timely pay any amount to any Lender in accordance with this subsection, Administrative
Agent shall pay to such Lender interest at the Federal Funds Rate on such
amount, for each day from the day such amount was to be paid until it is paid
to such Lender.

(c)           Except as otherwise
provided herein, all payments by Borrower or any Lender shall be made to
Administrative Agent at Administrative Agent’s Office not later than the time
for such type of payment specified in this Agreement.  All payments received after such time shall
be deemed received on the next succeeding Business Day.  All payments shall be made in immediately
available funds in lawful money of the United States of America.   Whenever any payment falls due on a day
which is not a Business Day, such payment may be made on the next succeeding
Business Day.

(d)           Upon satisfaction of
any applicable terms and conditions set forth herein, Administrative Agent
shall promptly make any amounts received in accordance with the prior
subsection available in like funds received as follows:  (i) if payable to Borrower, in accordance with
Exhibit “F”, except as otherwise specified herein, and (ii) if payable
to any Lender, by wire transfer to such Lender at the address specified in the
Schedule of Lenders.

(e)           Except as otherwise
provided in Exhibit “J” with respect to Borrower reimbursing drawings
under Letters of Credit, unless Borrower or any Lender has notified
Administrative Agent, prior to the date any payment is required to be made by
it to Administrative Agent, that Borrower or such Lender, as the case may be,
will not make such payment, Administrative Agent may assume that Borrower or
such Lender, as the case may be, has timely made such payment and may (but
shall not be required to do so) in reliance thereon, make available a
corresponding amount to the person or entity entitled thereto.  If and to the extent that such payment was
not in fact made to Administrative Agent in immediately available funds, then:

(i)            if Borrower failed to
make such payment, each Lender shall forthwith on demand repay to
Administrative Agent the portion of such assumed payment that was made
available to such Lender in immediately available funds, together with interest
thereon in respect of each day from and including the date such amount was made
available by Administrative Agent to such Lender to the date such amount is
repaid to Administrative Agent in immediately available funds at the Federal
Funds Rate from time to time in effect; and

(ii)           if any Lender failed to
make such payment, such Lender or, if applicable, Electing Lender or Lenders
shall forthwith on demand pay to Administrative Agent the amount thereof in
immediately available funds, together

 10
 

with interest
thereon for the period from the date such amount was made available by
Administrative Agent to Borrower to the date such amount is recovered by
Administrative Agent (the “Compensation Period”) at a rate per annum
equal to the interest rate applicable to such amount under the Loan.  If such Lender pays such amount to
Administrative Agent, then such amount shall constitute such Lender’s Pro Rata
Share, included in the applicable Loan advance. 
If such Lender does not pay such amount forthwith upon Administrative
Agent’s demand therefor, Administrative Agent may make a demand therefor upon
Borrower (after taking into account the provisions of Section 1.15, to
the extent applicable), and the Borrower shall pay such amount to
Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to such
amount under the Loan.  Nothing herein or
in any other Loan Document shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which
Administrative Agent or Borrower may have against any Lender as a result of any
default by such Lender hereunder.

A notice of the Administrative Agent to any Lender or
to Borrower with respect to any amount owing under this subsection shall be
conclusive, absent manifest error.

(f)            If any Lender makes
available to the Administrative Agent funds for any Loan advance to be made by
such Lender as provided in the foregoing provisions of this Section, and the
funds are not advanced to Borrower or otherwise used to satisfy any Obligations
of such Lender hereunder, the Administrative Agent shall return such funds (in
like funds as received from such Lender) to such Lender, without interest.

(g)           Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan advance in any particular
place or manner.

1.14         Administrative
Agent Advances.

(a)           Administrative Agent is
authorized, from time to time, in Administrative Agent’s sole discretion to make,
authorize or determine advances of the Loan, or otherwise expend funds, on
behalf of Lenders (“Administrative Agent Advances”), (i) to pay any
costs, fees and expenses as described in Section 6.10 herein, (ii) when
the applicable conditions precedent set forth in Exhibit “C” and Exhibit
“F” have been satisfied to the extent required by Administrative Agent, and
(iii) when Administrative Agent deems necessary or desirable to preserve or
protect the Loan collateral or any portion thereof (including those with
respect to property taxes, insurance premiums, completion of construction,
operation, management, improvements, maintenance, repair, sale and disposition)
(A) subject to Section 5.5, after the occurrence of a Default, and (B)
subject to Section 5.10, after acquisition of all or a portion of the
Loan collateral by foreclosure or otherwise.

(b)           Administrative Agent
Advances shall constitute obligatory advances of Lenders under this Agreement,
shall be repayable on demand and secured by the Loan collateral, and if unpaid
by Lenders as set forth below shall bear interest at the rate applicable to
such amount under the Loan or if no longer applicable, at the Base Rate.  Administrative Agent shall notify each

 11
 

Lender in writing of each
Administrative Agent Advance.  Upon
receipt of notice from Administrative Agent of its making of an Administrative
Agent Advance, each Lender shall make the amount of such Lender’s Pro Rata
Share of the outstanding principal amount of the Administrative Agent Advance
available to Administrative Agent, in same day funds, to such account of
Administrative Agent as Administrative Agent may designate, (i) on or before
3:00 p.m. (Administrative Agent’s Time) on the day Administrative Agent
provides Lenders with notice of the making of such Administrative Agent Advance
if Administrative Agent provides such notice on or before 12:00 p.m.
(Administrative Agent’s Time), or (ii) on or before 12:00 p.m. on the Business
Day immediately following the day Administrative Agent provides Lenders with
notice of the making of such advance if Administrative Agent provides notice
after 2:00 p.m. (Administrative Agent’s Time).

1.15         Defaulting
Lender.

1.15.1      Notice and Cure of Lender Default; Election
Period; Electing Lenders. 
Administrative Agent shall notify (such notice being referred to as the “Default
Notice”) Borrower (for Loan advances) and each non-Defaulting Lender if any
Lender is a Defaulting Lender.  Each
non-Defaulting Lender shall have the right, but in no event or under any
circumstance the obligation, to fund such Defaulting Lender Amount, provided
that, within twenty (20) days after the date of the Default Notice (the “Election
Period”), such non-Defaulting Lender or Lenders (each such Lender, an “Electing
Lender”) irrevocably commit(s) by notice in writing (an “Election Notice”)
to Administrative Agent, the other Lenders and Borrower to fund the Defaulting
Lender Amount and to assume the Defaulting Lender’s obligations with respect to
the advancing of the entire undisbursed portion of the Defaulting Lender’s
principal obligations under this Agreement (such entire undisbursed portion of
the Defaulting Lender’s principal obligations under this Agreement, including
its portion of the Payment Amount that is the subject of the default, is hereinafter
referred to as the “Defaulting Lender Obligation”).  If
Administrative Agent receives more than one Election Notice within the Election
Period, then the commitment to fund the Defaulting Lender Amount and the
Defaulting Lender Obligation shall be apportioned pro rata among the Electing
Lenders in the proportion that the amount of each such Electing Lender’s
Commitment bears to the total Commitments of all Electing Lenders.  If the Defaulting Lender fails to pay the
Defaulting Lender Payment Amount within the Election Period, the Electing
Lender or Lenders, as applicable, shall be automatically obligated to fund the
Defaulting Lender Amount and Defaulting Lender Obligation (and Defaulting
Lender shall no longer be entitled to fund such Defaulting Lender Amount and
Defaulting Lender Obligation) within three (3) Business Days following the
expiration of the Election Period to reimburse Administrative Agent or make
payment to Borrower, as applicable. 
Notwithstanding anything to the contrary contained herein, if
Administrative Agent has funded the Defaulting Lender Amount, Administrative
Agent shall be entitled to reimbursement for its portion of the Defaulting
Lender Payment Amount pursuant to Section 5.11.

1.15.2      Removal of Rights; Indemnity.  Administrative Agent shall not be obligated
to transfer to a Defaulting Lender any payments made by or on behalf of
Borrower to Administrative Agent for the Defaulting Lender’s benefit; nor shall
a Defaulting Lender be entitled to the sharing of any payments hereunder or
under any Note until all Defaulting Lender Payment Amounts are paid in
full.  Amounts payable to a Defaulting
Lender shall be paid by Administrative Agent to reimburse Administrative Agent
and any Electing Lender pro rata for all Defaulting Lender Payment
Amounts.  Solely for the purposes of
voting or consenting to matters with respect

 12
 

to the Loan Documents, a
Defaulting Lender shall be deemed not to be a “Lender” and such Defaulting
Lender’s Commitment shall be deemed to be zero. 
A Defaulting Lender shall have no right to participate in any
discussions among and/or decisions by Lenders hereunder and/or under the other
Loan Documents.  Further, any Defaulting
Lender shall be bound by any amendment to, or waiver of, any provision of, or
any action taken or omitted to be taken by Administrative Agent and/or the
non-Defaulting Lenders under, any Loan Document which is made subsequent to the
Defaulting Lender’s becoming a Defaulting Lender.  This Section shall remain effective with
respect to a Defaulting Lender until such time as the Defaulting Lender shall
no longer be in default of any of its obligations under this Agreement by
curing such default by payment of all Defaulting Lender Payment Amounts (i)
within the Election Period, or (ii) after the Election Period with the consent
of the non-Defaulting Lenders.  Such
Defaulting Lender nonetheless shall be bound by any amendment to or waiver of
any provision of, or any action taken or omitted to be taken by Administrative
Agent and/or the non-Defaulting Lenders under any Loan Document which is made
subsequent to that Lender’s becoming a Defaulting Lender and prior to such cure
or waiver.  The operation of this
subsection or the subsection above alone shall not be construed to increase or
otherwise affect the Commitment of any non-Defaulting Lender, or relieve or
excuse the performance by Borrower of their duties and obligations hereunder or
under any of the other Loan Documents. 
Furthermore, nothing contained in this Section shall release or in any
way limit a Defaulting Lender’s obligations as a Lender hereunder and/or under
any other of the Loan Documents. 
Further, a Defaulting Lender shall indemnify and hold harmless
Administrative Agent and each of the non-Defaulting Lenders from any claim,
loss, or costs incurred by Administrative Agent and/or the non-Defaulting
Lenders as a result of a Defaulting Lender’s failure to comply with the
requirements of this Agreement,  INCLUDING SUCH FAILURE CONSTITUTING IN WHOLE OR PART ADMINISTRATIVE
AGENT’S OR NONDEFAULTING LENDERS’ STRICT LIABILITY, OR COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE except to the extent such failure
constitutes willful misconduct or gross negligence on Administrative Agent’s or
Defaulting Lenders’ part; including, without limitation, any and all additional
losses, damages, costs and expenses (including, without limitation, attorneys’
fees) incurred by Administrative Agent and any non-Defaulting Lender as a
result of and/or in connection with (i) a non-Defaulting Lender’s acting as an
Electing Lender, (ii) any enforcement action brought by Administrative Agent
against a Defaulting Lender, and (iii) any action brought against
Administrative Agent and/or Lenders.  The
indemnification provided above shall survive any termination of this Agreement.

1.15.3      Commitment Adjustments.  In connection with the adjustment of the
amounts of the Loan Commitments of the Defaulting Lender and Electing Lender(s)
upon the expiration of the Election Period as aforesaid, Borrower,
Administrative Agent and Lenders shall execute such modifications to the Loan
Documents as shall, in the reasonable judgment of Administrative Agent, be
necessary or desirable in connection with the adjustment of the amounts of
Commitments in accordance with the foregoing provisions of this Section.  For the purpose of voting or consenting to
matters with respect to the Loan Documents such modifications shall also
reflect the removal of voting rights of the Defaulting Lender and increase in
voting rights of Electing Lenders to the extent an Electing Lender has funded
the Defaulting Lender Amount and assumed the Defaulting Lender Obligation. In
connection with such adjustments, Defaulting Lenders shall execute and deliver
a Assignment and Assumption covering that Lender’s Commitment and otherwise
comply with Section 6.5.  If a
Lender refuses to execute and deliver such Assignment and Assumption or
otherwise comply with Section 6.5, such Lender hereby appoints
Administrative Agent to do so on such Lender’s behalf.  Administrative Agent shall distribute an
amended Schedule of Lenders,

 13
 

which shall thereafter be
incorporated into this Agreement, to reflect such adjustments.  However, all such Defaulting Lender Amounts
and Defaulting Lender Obligation funded by Administrative Agent or Electing
Lenders shall continue to be Defaulting Lender Amounts of the Defaulting Lender
pursuant to its obligations under this Agreement.

1.15.4      No Election.  In the event that no Lender elects to commit
to fund the Defaulting Lender Amount and Defaulting Lender Obligations within
the Election Period, Administrative Agent shall, upon the expiration of the
Election Period, so notify Borrower and each Lender.

1.16         Several
Obligations; No Liability, No Release. 
Notwithstanding that certain of the Loan Documents now or hereafter may
have been or will be executed only by or in favor of Administrative Agent in
its capacity as such, and not by or in favor of Lenders, any and all
obligations on the part of Administrative Agent (if any) to make any advances
of the Loan or reimbursements for other Payment Amounts shall constitute the
several (and not joint) obligations of the respective Lenders on a ratable
basis, according to their respective Pro Rata Shares.  Except as may be specifically provided in
this Agreement, no Lender shall have any liability for the acts of any other
Lender.  No Lender shall be responsible
to Borrower or any other person for any failure by any other Lender to fulfill
its obligations to make advances of the Loan or reimbursements for other
Payment Amounts, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.  The failure of any Lender to pay to
Administrative Agent its Pro Rata Share of a Payment Amount shall not relieve
any other Lender of any obligation hereunder to pay to Administrative Agent its
Pro Rata Share of such Payment Amounts as and when required herein, but no
Lender shall be responsible for the failure of any other Lender to so fund its
Pro Rata Share of the Payment Amount.  In
furtherance of the foregoing, Lenders shall comply with their obligation to pay
Administrative Agent their Pro Rata Share of such Payment Amounts regardless of
(i) the occurrence of any Default hereunder or under any Loan Document; (ii) a
default by Borrower under the Permanent Loan Commitment, if applicable, (iii)
any failure of consideration, absence of consideration, misrepresentation,
fraud, or any other event, failure, deficiency, breach or irregularity of any
nature whatsoever in the Loan Documents; or (iv) any bankruptcy, insolvency or
other like event with regard to any Borrower or Guarantor.  The obligation of Lenders to pay to such
Payment Amounts are in all regards independent of any claims between
Administrative Agent and any Lender.

1.17         Replacement
of Lenders.  If any Lender is a
Defaulting Lender, Borrower may, upon notice to such Lender and the
Administrative Agent, replace such Lender by causing such Lender to assign its
Commitment with the payment of any assignment fee by the replaced Lender to one
or more other lenders or Eligible Assignees acceptable to Borrower, the
Administrative Agent and the L/C Issuer. 
Borrower shall or shall cause the replacement lender to (subject to the
provisions of Section 1.14 through 1.15 providing for payment of
all Defaulting Lender Payment Amounts to Administrative Agent and/or Electing
Lenders, as applicable, prior to payment of amounts due to a Defaulting
Lender), (x) pay in full of all principal, interest, fees and other amounts
owing to such Lender through the date of replacement, (y) provide appropriate
assurances and indemnities (which may include letters of credit) as such Lender
may reasonably require with respect to such replaced Lender’s obligation to
fund its participation interest in any Letters of Credit then outstanding and
(z) provide a release of such Lender from its obligations under the Loan
Documents.  Any Lender being replaced
shall execute and deliver an Assignment and Assumption covering that Lender’s
Commitment and otherwise comply with Section 6.5.  If a Lender being replaced refuses to execute

 14
 

and deliver such
Assignment and Assumption or otherwise comply with Section 6.5, such
Lender hereby appoints Administrative Agent to do so on such Lender’s
behalf.  Administrative Agent shall
distribute an amended Schedule of Lenders, which shall thereafter be
incorporated into this Agreement, to reflect adjustments to Lenders and their
Commitments.

1.18         Borrower’s Rights.  Nothing
in Sections 1.15 through 1.17, nor any action taken pursuant to Sections
1.15 through 1.17  (including
the replacement of the Defaulting Lender), shall relieve a Defaulting Lender
from liability to Borrower for the Defaulting Lender’s failure to make Loan
advances or to otherwise perform as required by this Agreement, or limit any rights
or remedies of Borrower against the Defaulting Lender.

1.19         Swap
Transaction.

(a)           Borrower may, but shall
not be required to, enter into an Swap Transaction with a Lender acceptable to
the Required Lenders (such financial institution is referred to herein as “Swap
Bank”).  The Lenders agree that the
Swap Bank may be Bank of America, N. A. or an Affiliate of Bank of America,
N.A.  Borrower agrees that if Borrower
executes an Swap Transaction, the provisions of this Section 1.19
shall govern and apply to such Swap Transaction.  Borrower acknowledges and agrees that the
failure of Borrower to comply with its obligations under the Swap Transaction
and to make payments when due thereunder, will be a default under this Loan and
Lenders may advance funds, on Borrower’s behalf to cure Borrower’s default
under the Swap Transaction.  All amounts
advanced by Lenders to Swap Bank, Borrower or others in respect of Borrower’s
obligations under the Swap Transaction shall be added to the Loan and shall be
deemed a part of the Obligations secured by the Deed of Trust and the other
Loan Documents.  All amounts payable to
Borrower pursuant to the Swap Transaction shall be paid to Administrative Agent
for the ratable benefit of Lenders and applied by Lenders to the payment of
interest on the Loan or other costs of the Project.  Borrower acknowledges and agrees that,
notwithstanding the terms of the Swap Transaction, Borrower shall not modify or
terminate the Swap Transaction without the prior written consent of
Administrative Agent.

(b)           As additional security
for the obligations of Borrower under the Loan Documents, Borrower hereby
transfers, assigns, and conveys to Administrative Agent for the ratable benefit
of Lenders, subject to the terms and conditions contained herein, all of
Borrower’s rights, titles and interests, but not its obligations, duties or
liabilities for any breach, in, under and to the Swap Transaction, any and all
amounts received by Borrower in connection therewith or to which Borrower is
entitled thereunder, and all proceeds of the foregoing.  Administrative Agent shall have the right at
any time (but shall have no obligation) to take in its name or in the name of
Borrower such action as Administrative Agent may at any time determine to be
necessary or advisable to cure any default under or with respect to the Swap
Transaction or to protect the rights of Borrower or Swap Bank thereunder; provided,
however, that prior to the occurrence of a Default, Administrative Agent
shall give prior written notice to Borrower before taking any such action.  Neither Administrative Agent or Lenders shall
incur any liability if any action so taken by Administrative Agent or on its
behalf shall prove to be inadequate or invalid, and Borrower agrees to hold
Administrative Agent and Lenders free and harmless against and from any loss,
cost, liability or expense (including, but not limited to, attorneys’ fees and
expenses) incurred in connection with any such action, as provided in this
Agreement.  It is agreed and understood
that, in addition to any and all other remedies to which Administrative Agent
and Lenders are entitled at law or in equity, Administrative Agent and Lenders
shall have all rights and benefits to which a

 15
 

secured party is entitled
at law or in equity, including, without limitation under the Uniform Commercial
Code as adopted and in effect in the State of Texas and upon any foreclosure by
Lenders of the lien under the Deed of Trust, all right, title and interest of
Borrower in and to the Swap Transaction and any and all amounts received by
Borrower in connection therewith or to which Borrower is entitled thereunder,
and all proceeds of the foregoing, shall automatically be conveyed in
connection therewith, unless prior to such foreclosure, Administrative Agent elects
to exclude Borrower’s right, title and interest in the Swap Transaction from
such foreclosure.

(c)           Borrower hereby
constitutes and appoints Administrative Agent as Borrower’s true and lawful
attorney, with the full power of substitution, for it and in its name, place
and stead, or otherwise, on behalf and for the benefit of Administrative Agent,
to exercise, at the election of Administrative Agent, any and all rights and
remedies of Borrower under the Swap Transaction, including, without limitation,
making any payments thereunder and consummating any transactions contemplated
thereby, from time to time to institute and prosecute in the name and at the
expense of Borrower, or otherwise, but for the benefit of Administrative Agent
and Lenders, any and all proceedings at law, in equity, or otherwise, that
Administrative Agent may deem proper in order to collect, assert or enforce any
claim, right or title, of any kind, in and to the Swap Transaction hereby
assigned and conveyed, or intended so to be, and to defend and compromise, at
the election of Administrative Agent, any and all actions, suits or proceedings
with respect to the Swap Transaction, and generally to do all and any such
action in relation thereto as Administrative Agent shall deem advisable; and
Borrower hereby declares that the appointment hereby made and powers hereby
granted are coupled with an interest and are and shall be irrevocable by
Borrower in any manner, or for any reason. 
Administrative Agent may exercise its rights under this Section only
after the occurrence and during the continuation of a Default under any of the
Loan Documents.

ARTICLE
2– ADDITIONAL COVENANTS AND AGREEMENTS

2.1           Inspection.  Administrative Agent and its agents may enter
upon the Property to inspect the Property, the Project and any materials at any
reasonable time, unless Administrative Agent deems such inspection is of an
emergency nature, in which event Borrower shall provide Administrative Agent
with immediate access to the Property. 
Borrower will furnish to Administrative Agent and its agents, for
inspection and copying, all plans, shop drawings, specifications, books and
records, and other documents and information that Administrative Agent may
reasonably request from time to time.

2.2           Notice
to Administrative Agent.  Borrower
shall promptly within five (5) days after first learning of the occurrence of
any of the following events, notify Administrative Agent in writing thereof,
specifying in each case the action Borrower has taken or will take with respect
thereto:  (a) any violation of any Law or
governmental requirement; (b) any litigation, arbitration or governmental
investigation or proceeding instituted or threatened in writing against
Borrower or any Guarantor or the Property asserting criminal conduct or
damages, penalties or claims in excess of $100,000 and any material development
therein; (c) any actual or threatened in writing condemnation of any portion of
the Property, any negotiations with respect to any such taking, or any loss of
or substantial damage to the Property; (d) any labor controversy pending or
threatened against Borrower or any contractor, and any material development in
any labor controversy; (e) any notice received by Borrower with respect to the
cancellation, alteration or non-renewal of any insurance coverage
maintained with respect to the Property; (f) any failure by Borrower or any
contractor, subcontractor or supplier to perform any material obligation under
any construction

 16
 

contract, any event or
condition which would permit termination of a construction contract or
suspension of work thereunder, or any notice given by Borrower or any
contractor with respect to any of the foregoing; (g) any lien filed against the
Property or (h) any required permit, license, certificate or approval with
respect to the Property lapses or ceases to be in full force and effect.

2.3           Financial
Statements.  Borrower shall deliver
to Administrative Agent with sufficient copies for each Lender the Financial
Statements and other statements and information at the times and for the
periods described in Exhibit “B” and any other Loan Document. Borrower
will make all of its books, records and accounts available to Administrative
Agent and its representatives at the Property or at  Borrower’s office in Addison, Texas, upon
request and will permit them to review and copy the same.  Borrower shall promptly notify Administrative
Agent of any event or condition that could reasonably be expected to have a
Material Adverse Effect in the financial condition of Borrower and, if known by
Borrower, Guarantor.  Administrative
Agent shall provide a copy of such Financial Statements to each Lender upon
receipt.

2.4           Other
Information.  Borrower shall furnish
to Administrative Agent from time to time upon Administrative Agent’s
reasonable request (i) copies of any or all subcontracts entered into by
contractors or subcontractors relating to the Tenant Improvements and the names
and addresses of all persons or entities with whom Borrower or any contractor
has contracted or intends to contract for Tenant Improvements or the furnishing
of labor or materials in connection therewith; (ii) copies of any or all
contracts, bills of sale, statements, receipts or other documents under which
Borrower claims title to any materials, fixtures or articles of personal
property incorporated or to be incorporated into the Improvements or subject to
the lien of the Deed of Trust; (iii) a list of all unpaid bills for labor and
materials with respect to the Tenant Improvements and copies of all invoices
therefor; (iv) budgets of Borrower and revisions thereof showing the estimated
costs and expenses to be incurred in connection with the completion of the
Work; (v) current or updated detailed Project schedules or construction
schedules; and (vi) such other information relating to Borrower, Guarantor, the
Improvements, the Property, the Loan, or any security for the Loan that
Administrative Agent may request in its good faith business judgment.

2.5           Reports
and Testing.  Borrower shall (a) upon
the request of Administrative Agent, promptly deliver to Administrative Agent
copies of all reports, studies, inspections and tests made on the Land, the
Improvements or any materials to be incorporated into the Improvements that are
in the control or possession of Borrower, Guarantor or their Affiliates or
agents; and (b) make such additional tests on the Land, the Improvements or any
materials to be incorporated into the Improvements as Administrative Agent
reasonably requires. Borrower shall immediately notify Administrative Agent of
any report, study, inspection or test that indicates any adverse condition
relating to the Land, the Improvements or any such materials.

2.6           Advertising
by Lenders.  At Administrative Agent’s
request and at Borrower’s expense, Borrower shall erect and maintain on the
Property one or more advertising signs approved by Administrative Agent
indicating that the construction financing for the Property has been provided
by Lenders subject to compliance with Laws that are applicable to such signage.

2.7           Appraisal.  Administrative Agent may obtain from time to
time, an appraisal of all or any part of the Property prepared in accordance
with written instructions from Administrative Agent by a third-party
appraiser engaged directly by Administrative Agent.  Each such appraiser and appraisal shall be
satisfactory to Administrative Agent (including satisfaction of applicable

 17
 

regulatory
requirements).  The cost of any such
appraisal shall be borne by Borrower if such appraisal is the first appraisal
in any calendar year and in all events if Administrative Agent obtains such
appraisal after the occurrence and during the continuation of a Default, and
such cost is due and payable by Borrower on demand and shall be secured by the
Loan Documents.  Administrative
Agent shall provide a copy of such Appraisal to each Lender and Borrower upon
receipt.

2.8           Payment
of Withholding Taxes.  Borrower shall
not use, or knowingly permit any contractor or subcontractor to use, any
portion of the proceeds of any Loan advance to pay the wages of employees
unless a portion of the proceeds or other funds are also used to make timely
payment to or deposit with (a) the United States of all amounts of tax required
to be deducted and withheld with respect to such wages under the Internal
Revenue Code, and (b) any state and/or local Tribunal or agency having
jurisdiction of all amounts of tax required to be deducted and withheld with
respect to such wages under any applicable state and/or local Laws.

2.9           ERISA
and Prohibited Transaction Taxes.  As
of the date hereof and throughout the term of this Loan Agreement, (a) Borrower
is not and will not be (i) an “employee benefit plan”, as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);
or (ii) a “plan” within the meaning of Section 4975(e) of the Internal Revenue
Code, as amended (the “Code”); (b) the assets of Borrower do not and
will not constitute “plan assets” within the meaning of the United States
Department of Labor Regulations set forth in 29 C.F.R. §2510.3-101; (c)
Borrower is not and will not be a “governmental plan” within the meaning of
Section 3(32) of ERISA; (d) transactions by or with Borrower are not and will
not be subject to state statutes applicable to Borrower regulating investments
of fiduciaries with respect to governmental plans; and (e) Borrower shall not
engage in any transaction which would cause any obligation, or action taken or
to be taken, hereunder (or the exercise by Administrative Agent of any of Lender’s
rights under this Agreement, any Note or the other Loan Documents) to be a
non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA or Section 4975 of the Code.  Borrower further agrees to deliver to
Administrative Agent such certifications or other evidence of compliance with
the provisions of this Section 2.9 as Administrative Agent may from time
to time request.

2.10         Contest of Claims.  Notwithstanding anything other provision
herein or in the Deed of Trust to the contrary, Borrower may, to the extent and
in the manner permitted by applicable Laws, contest the payment of any claim
for payment for work or any tax, assessment or other governmental charge
against the Property, and the failure of Borrower to pay the contested claim
pending such contest shall not be or become a Default, if (a) Borrower has
notified Administrative Agent of Borrower’s intent to contest such payment at
least seven (7) days prior to commencing the contest (unless such notice would
cause a delay that might detrimentally affect the right of Borrower to so
contest, in which case Borrower must furnish Administrative Agent with such
advance notice of intent to contest as is possible under the circumstances);
(b) Borrower has made any deposit or payment under protest, or posted security,
with any applicable Tribunal if, as and to the extent required by applicable
Laws; (c)  unless Borrower has complied
with clause (b) preceding or if Borrower has complied with clause (b) preceding
and Administrative Agent has determined that compliance with clause (b) does
not, in Administrative Agent’s good faith business judgment, protect Lenders’
interests, Borrower has furnished to Administrative Agent a cash deposit
satisfactory to Administrative Agent, or an indemnity bond satisfactory to
Administrative Agent with a surety satisfactory to Administrative Agent, in an
amount satisfactory to Administrative Agent (or in the statutory amount, in the
case of bond authorized by statute), to assure payment of

 18

the matters under contest
and to prevent any sale or forfeiture of any part of the Property, and in the
case of a claim for work which does or could result in a lien against the
Property, Borrower has provided (i) to the extent required by Administrative Agent
and available under applicable Laws, a bond which under applicable Laws
releases the lien from the Property encumbered by such lien, and (ii) such
security, assurances and other items, if any, as the Title Company may require
to insure around the lien; (d) Borrower diligently and in good faith contests
the same by appropriate legal proceedings which shall operate to prevent the
enforcement or collection of the same and the sale of any part of the Property
to satisfy the same; (e) Borrower promptly upon final determination thereof
pays the amount of any such claim so determined, together with all costs,
interest and penalties payable in connection therewith (and to the extent
Borrower has made a cash deposit with Administrative Agent pursuant to clause (c)
preceding, such deposit shall be made available to Borrower to pay the amount
of such claim and shall release the excess, if any, to Borrower upon settlement
and release of the claim); (f) the failure to pay the claim does not constitute
a default under any other deed of trust, mortgage or security interest covering
or affecting any part of the Property, and does not subject Administrative
Agent or any Lender to any civil or criminal liability or to any damages or
expense; and (g) the aggregate amount of all claims being contested shall not
exceed five percent (5%) of the Aggregate Commitments.  Notwithstanding the foregoing, Borrower shall
immediately upon request of Administrative Agent pay (and if Borrower shall fail
so to do, Administrative Agent may, but shall not be required to, pay or cause
to be discharged or bonded against) any such claim notwithstanding such contest
if, in the reasonable opinion of Administrative Agent, the Property is in
jeopardy or in danger of being forfeited or foreclosed.  Administrative Agent may pay over any such
cash deposit or part thereof to the claimant entitled thereto at any time when,
in the judgment of Administrative Agent, the entitlement of such claimant is
established.  Borrower shall not be
required to comply with the requirements set forth above in this Section
2.10 for any claim made that is covered by Borrower’s liability insurance
if the total amount of such claim is less than the amount of coverage under
such policy that is available to satisfy such claim, the insurer has not denied
liability under its policy for such claim and the insurer has undertaken to
defend such claim without any reservation of rights.

2.11         Property Management
and Franchises.  There is no property
management, consulting, franchise or license agreement or other similar
contract or agreement (“Management Agreements”) in effect that relates
to the Property by and between Borrower and third parties other than the
management agreement between Borrower and Kimpton  dated
as of March, 2007 (the “Hotel Operating Agreement”) and between Borrower
and HPT Management Services, LP, effective as of December 1, 2006 (“Retail
Agreement”) and Borrower will not enter into any Management Agreements of
any kind or character unless and until (i) Administrative Agent approves the
form and substance of such Management Agreement except the Retail Agreement may
be assigned to an affiliate of Borrower or a new management agreement may be
entered into with an affiliate of Borrower in substantially the same form as the
Retail Agreement, and (ii) the parties to such Management Agreement enter into
a collateral assignment and agreement with Administrative Agent that provides,
among other things, that such parties consent to the collateral assignment of
such Management Agreement to Administrative Agent as collateral for the Loan,
agree to subordinate their respective rights (including rights to any fees or
other payments) to the Loan Documents, and grant to Administrative Agent the
right to terminate such Management Agreement upon notice given at any time
after an Event of Default has occurred. 
The form and substance of such collateral assignment and agreement shall
be satisfactory to Administrative Agent in its good faith business judgment;
provided, that the form of the collateral assignment and subordination
agreement executed by Kimpton in connection with the closing of the Loan shall
be

 19
 

deemed to be satisfactory
to Administrative Agent and Lenders.  Borrower shall not enter into
an agreement with any other sales agent or broker, other than the agreements
with Personette & Associates currently existing, relating to the sale of
Residential Units without Administrative Agent’s prior written consent, which
consent will not be unreasonably withheld or delayed.

2.12         Single
Purpose Entity/Separateness.  Except
as disclosed to Lender in writing, Borrower (a) does not own and will not own
any asset or property other than (i) the Property, and (ii) incidental personal
property necessary for the financing, development, ownership, management and
operation of the Property, and (b) will not engage in any business other than
the development, ownership, management and operation of the Property.  Borrower has done or caused to be done and
will do all things necessary to observe organizational formalities and preserve
its existence, and Borrower will not, nor will Borrower permit, any Constituent
Party to, amend, modify or otherwise change the operating agreement, articles
of organization or other organizational documents of Borrower (other than in a
ministerial fashion) without the prior written consent of Administrative Agent,
except to reflect transfers of interests in Borrower and the Constituent
Parties that are permitted by the Loan Documents.  Borrower will maintain all of its books,
records, financial statements and bank accounts separate from those of its
Affiliates and any Constituent Party (to the maximum extent permissible under
GAAP) and, to the extent required by applicable Laws, Borrower will file its
own tax returns.  Borrower shall maintain
its books, records, resolutions and agreements as official records. Borrower
will be, and at all times will hold itself out to the public as a legal entity
separate and distinct from any other entity (including any Affiliate of
Borrower or any Constituent Party), shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its own
name, shall not identify itself or any of its Affiliates as a division or part
of the other and shall maintain and utilize separate stationery, invoices and
checks. Borrower will not commingle the funds and other assets of Borrower with
those of any Affiliate or Constituent Party, or any Affiliate of any
Constituent Party, or any other person.

2.13         1.0x DSC Performance
Threshold.  Borrower covenants and
agrees that on the date which is eighteen months after the date of this
Agreement, the NOI for the Property will not be less than the 1.0xDSC
Performance Threshold, to be verified by Administrative Agent’s NOI Confirmation
Letter after receipt of Borrower’s NOI Affidavit, annualized based on the
immediately preceding twelve calendar months.

2.14         Unit Sales Contract.  Borrower will not execute any Unit Sales
Contract unless and until the form of Unit Sales Contract has been approved by
Administrative Agent.  The Unit Sales
Contract form must include the following: 
(i) the Unit Purchaser thereunder may not assign the Unit Sales
Contract, and may not advertise, list or otherwise market the Residential Unit
for resale prior to acquisition of the Residential Unit by such Unit Purchaser,
(ii) the Unit Purchaser shall deposit with Borrower or Escrow Agent an Earnest
Money Deposit, all Borrower’s rights and interests in the Earnest Money Deposit
shall be assigned and pledged hereunder by Borrower to Administrative Agent as
additional collateral for the Loan, and (iii) upon the closing of the sale of
the Residential Unit, the Unit Purchaser thereunder shall become a member of
the Condominium Association and shall become subject to the terms and
provisions of the Condominium Declaration, the Condominium By-laws, the
articles of the Condominium Association and the rules and regulations adopted
or to be adopted by the Condominium Association.  No one Unit Purchaser (individually, or in
combination with any relative or affiliate of such Unit Purchaser) may acquire
more than one Residential Unit without the prior written consent of
Administrative Agent.

 20
 

2.15         Representations and
Covenants Regarding Condominium. 
Borrower hereby represents, warrants and covenants with Administrative
Agent that (i) the Condominium Declaration and the Condominium created thereby
complies with all of the requirements of the Condominium Act and is sufficient
under Texas law to permit each Unit to be sold to third parties; (ii) the
Condominium Association has been formed as a non-profit corporation under the
laws of the State of Texas, the board of directors appointed in accordance with
the requirements of the Condominium Declaration, and all officers contemplated
by the Condominium Declaration and the Condominium By-laws shall have been
appointed or elected, as the case may be; (iii) Borrower shall be the sole
Declarant under the Condominium Declaration and no rights or interests of the
Declarant shall have been assigned or encumbered except pursuant to the Loan
Documents and none will be without the prior written consent of Administrative
Agent; (iv) there shall be no agreements to which Borrower is a party relating
to the Condominium other than the Unit Sales Contracts, the Condominium
Declaration, the bylaws of the Condominium Association, rules and regulations
of the Condominium Association, the Permitted Encumbrances, and other
agreements executed in the ordinary course of business of the ownership, operation
and maintenance of the Condominium that have been approved by Administrative
Agent; and (v) Borrower shall have delivered to Administrative Agent true and
correct copies of the Condominium Declaration and Condominium By-laws.  Borrower will not amend or supplement in any
material respect or consent to any material amendment or material supplement of
the Condominium Declaration or the Condominium By-laws without the prior
approval of Administrative Agent, which approval shall not be unreasonably
withheld or delayed.  Borrower shall (i)
at all times exercise its rights and powers as Declarant and as an owner of a
Unit in accordance with the Condominium Declaration and the Condominium Act;
and (ii) use reasonable efforts to cause the officers and directors of the
Condominium Association appointed by Borrower or any principal or Affiliate of
Borrower to exercise their rights and powers in accordance with the Condominium
Act and consistent with their fiduciary duties to the Unit owners.

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

 21
 

under such Unit Sales
Contract, specifying in each case the action Borrower has taken or will take to
cure such default or breach. 
Administrative Agent may contact any Unit Purchaser at any time to
determine the status of the applicable Unit Sales Contract and any matters
relating thereto.

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

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

(b)           With respect to each
Residential Unit, Borrower shall pay to Administrative Agent for the ratable
benefit of all Lenders, the Release Price;

(c)           No Default shall have
occurred under the Loan Documents which remains uncured after the expiration of
applicable grace or notice periods (provided, however, that (i) Administrative
Agent may waive this condition without waiving any of its rights and remedies
under any of the Loan Documents; and (ii) Borrower shall be entitled to
complete the sale of any Residential Unit in accordance with the terms of any
Qualifying Unit Sales Contract entered into prior to the date of such Default
so long as Borrower pays to Administrative Agent the Release Price.

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

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

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

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

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

 22
 

2.20         Assignment of Contract
Rights.

(a)           Borrower hereby
conveys, transfers and assigns unto Administrative Agent, its successors and
assigns, all of the rights, titles, estates, interests and privileges which
Borrower has or may have (collectively, the “Contract Rights”) with respect to
any Unit Sales Contract regarding the sale by Borrower of a Residential Unit in
the Project including, without limitation, (A) all of Borrower’s rights in and
to (i) all Earnest Money Deposits; and (ii) any loan commitment, guaranty or
other financial obligation made by a third party with respect to the payment of
any sums owed to Borrower under such Unit Sales Contract, and (B) the right to
amend and supplement the Unit Sales Contract and to waive any material
obligation or duty thereunder, and the right to terminate and extend the Unit
Sales Contract, provided, however, that nothing herein contained shall be
construed as making Administrative Agent or its successors or assigns liable as
a party under the Unit Sales Contract for any acts, omissions, representations,
contracts or other obligations of Borrower which accrued prior to the date that
Administrative Agent may elect, at Administrative Agent’s option, to succeed to
the rights and privileges of Borrower under such Unit Sales Contract pursuant
to this Assignment.

(b)           Until the occurrence
and continuation of a Default hereunder, the foregoing assignment shall not
affect any rights of Borrower to exercise the rights or privileges of Borrower
under any Unit Sales Contract, except that Borrower shall remain subject to the
restrictions set forth in this Agreement.  If at any time Borrower receives any Earnest
Money Deposit in respect of any Unit Sales Contract, such Earnest Money Deposit
shall be paid to the Escrow Agent to be held in accordance with the terms of
the Unit Sales Contract.  All forfeited
Earnest Money Deposits shall be applied by Borrower to pay operating expenses
of the Project and interest as and when due under the Loan.

(c)           At any time after the
occurrence and during the continuation of a Default, Administrative Agent is
hereby irrevocably authorized, at Administrative Agent’s option, to exercise
any or all Contract Rights under any Unit Sales Contract, but Administrative
Agent shall have no obligation to elect to exercise its rights under the
foregoing assignment. The exercise by Administrative Agent of any authority
pursuant to the foregoing assignment, before or after the institution of any
proceedings under the Loan Documents shall not cure any Default under the Loan
Documents, or affect any such foreclosure or other proceedings or any sale pursuant
thereto.

(d)           Borrower covenants and
represents that it has, and shall at all times during which any of the
Indebtedness remains outstanding, have full right and title to assign the
Contract Rights and that no other assignment of any interest in Contract Rights
has been or will be made.  Borrower
agrees and acknowledges that Borrower’s interests in the Unit Sales Contracts
cannot be further assigned, transferred or conveyed without Administrative
Agent’s prior written consent. 
Administrative Agent’s exercise of any rights under this Assignment
shall not preclude Administrative Agent from exercising, or obligate
Administrative Agent to exercise, any other right hereunder or under any other
Loan Document; provided, however, the foreclosure of the Deed of Trust shall,
at the option of Administrative Agent, constitute the automatic and
simultaneous absolute assignment of all of the Contract Rights in respect of
those Unit Sales Contracts which Administrative Agent elects to have absolutely
assigned to it.  Administrative Agent may
elect to have the absolute assignment exclude one or more Unit Sales Contracts
(if such Unit Sales Contracts do not, in Administrative Agent’s opinion,
constitute Qualifying Unit Sales Contracts) and in such event such excluded
Unit Sales Contracts shall not be assigned to Administrative Agent and

 23
 

Administrative Agent
shall have no obligations relating thereto. 
Administrative Agent shall not be under any obligation to perform any of
the terms, provisions and conditions under any Unit Sales Contract on the part
of the Borrower to be performed prior to the time that Administrative Agent
accepts the assignment of such Unit Sales Contract.  Further, unless and until Administrative
Agent accepts the assignment of such Unit Sales Contract, Administrative Agent
shall not become personally liable to any Unit Purchaser, broker or any
subsequent owner of the Improvements as Administrative Agent of Borrower’s
interest in any Unit Sales Contract, and no assumption shall be inferred from
or result from any foreclosure or other proceedings in the nature thereof or
the enforcement of any remedies hereunder, under the Notes or under any other
Loan Document.

(e)           Borrower hereby
constitutes and appoints Administrative Agent as Borrower’s true and lawful attorney,
with the full power of substitution, for it and in its name, place and stead,
on behalf and for the benefit of Administrative Agent, to exercise, at the
election of Administrative Agent at any time after the occurrence and during
the continuation of a Default, any and all rights and remedies of Borrower
under any Unit Sales Contract and from time to time to institute and prosecute
in the name and at the expense of Borrower, but for the benefit of
Administrative Agent, any and all proceedings at law, in equity or otherwise,
that Administrative Agent reasonably deems proper in order to assert or enforce
any claim, right or title, of any kind, in and to the Contract Rights hereby
assigned and conveyed, or intended so to be, and to defend and compromise, at
the election of Administrative Agent, any and all actions, suits or proceedings
with respect to any of the Contract Rights, and generally to do all and any
such action in relation thereto as Administrative Agent reasonably deems
advisable; and Borrower hereby declares that the appointment hereby made and
powers hereby granted are coupled with an interest and are and shall be
irrevocable by Borrower in any manner or for any reason.

(f)            Borrower further
agrees that it will at any time and from to time do, execute, acknowledge and
deliver all and every such future acts, bills of sale, transfers, assignments,
confirmations and assurances Administrative Agent may reasonably request for
the better transferring, assigning, confirming and assuring unto Administrative
Agent all and singular the Contract Rights hereby assigned and conveyed, or
purported so to be.

ARTICLE
3– REPRESENTATIONS AND WARRANTIES

To induce Lenders to make
the Loan, Borrower hereby represents and warrants to Administrative Agent and
Lenders that except as otherwise disclosed to Administrative Agent in writing
(a) to the best of Borrower’s knowledge after reasonable inquiry and
investigation, Borrower has complied with any and all Laws and regulations
concerning its organization, existence and the transaction of its business, and
has the right and power to own the Land, and to develop the Improvements as
contemplated in this Agreement and the other Loan Documents; (b) Borrower is
authorized to execute, deliver and perform all of its obligations under the
Loan Documents; (c) the Loan Documents are valid and binding obligations of
Borrower; (d) Borrower is not in violation of any Law, regulation or ordinance,
or any order of any court or Tribunal, and no provision of the Loan Documents
violates any Law applicable to Borrower, any covenants or restrictions
affecting the Property, any order of any court or Tribunal or any contract or
agreement binding on Borrower or the Property; (e) to the extent required by
applicable Law, Borrower and Guarantor have filed all necessary tax returns and
reports and have paid all taxes and governmental charges thereby shown to be
owing; (f) the Land is not part of a larger tract of land owned by Borrower, is
not otherwise included under any unity of title or similar covenant with other
lands not encumbered by the Deed

 24
 

of Trust, and constitutes
a separate tax lot or lots with a separate tax assessment or assessments for
the Land and the Improvements, independent of those for any other lands or
improvements; (g) the Land and the Improvements comply with all Laws and
governmental requirements, including all subdivision and platting requirements,
without reliance on any adjoining or neighboring property; (h) the Improvements
comply with all legal requirements regarding access and facilities for
handicapped or disabled persons; (i) Borrower has not directly or indirectly
conveyed, assigned or otherwise disposed of or transferred (or agreed to do so)
any development rights, air rights or other similar rights, privileges or attributes
with respect to the Property, including those arising under any zoning or land
use ordinance or other Law or governmental requirement; (j) the Financial
Statements delivered to Administrative Agent are true, correct, and complete in
all material respects, and there has been no event or condition that could
reasonably be expected to have a Material Adverse Effect in Borrower’s or
Guarantor’s financial condition from the financial condition of Borrower or
Guarantor (as the case may be) indicated in such Financial Statements; (k) all
utility services necessary for the operation of the Improvements as a hotel are
available in adequate capacities to service the Improvements, including
electric and natural gas facilities, telephone service, water supply, storm and
sanitary sewer facilities; (l) except as otherwise provided for in the Loan
Documents, the Borrower has made no contract or arrangement of any kind the
performance of which by the other party thereto would give rise to a lien on
the Property; (m) the current and anticipated use of the Property complies with
all applicable zoning ordinances, regulations and restrictive covenants
affecting the Land without the existence of any variance, non-complying use,
nonconforming use or other special exception, all use restrictions of any
Tribunal having jurisdiction have been satisfied, and no violation of any Law
or regulation exists with respect thereto; (n) no action or event has occurred,
which could cause a mechanic’s or materialman’s lien to achieve priority over
the Deed of Trust or the rights of Administrative Agent and Lenders thereunder.
and (o) there is no franchise or license agreement in effect with a hotel
franchisor or licensor and there is no agreement or commitment relating to any
such franchise or license that will become effective or binding on Borrower or
the Property after the date hereof.

ARTICLE
4 – DEFAULT AND REMEDIES

4.1           Events
of Default.  The occurrence of any
one of the following shall be a default under this Agreement (“Default”):

(a)           Failure to Pay
Indebtedness.  (i) Any principal
and/or interest on the Loan is not paid on the Maturity Date, or in the case of
any of payment of principal and/or interest on the Loan is not paid when due on
a date other than the Maturity Date, such payment is not made within five (5)
days after the same became due, whether by acceleration or otherwise; or (ii)
any other payment of the Indebtedness is not paid on or before the date
specified for payment in the Loan Documents or, if no date is specified for
payment in the Loan Documents such payment is due on demand, as the case may
be, within ten (10) days after written notice or demand from Administrative
Agent.

(b)           Nonperformance of
Covenants.  Any covenant, agreement
or condition herein (other than covenants to pay any of the Indebtedness) is
not fully and timely performed, observed or kept, and such failure is not cured
within the applicable notice or grace period (if any) provided for herein or in
any other Loan Document or, if this Agreement or such Loan Document does not
provide for such a notice or grace period, within thirty (30) days after
written notice and demand by Administrative Agent for the performance of such
covenant,

 25
 

agreement or condition
(or if such failure cannot be cured within that original 30-day period and
Borrower delivers written notice to Administrative Agent promptly within that
original 30-day period of Borrower’s intention and proposed steps to cure the
failure with due diligence, promptly institutes curative action within that
original 30-day period and diligently pursues same, Borrower shall have such
additional period of time, not exceeding sixty (60) days next following the end
of the original 30-day period, as shall be necessary to effect the cure); provided,
however, that there shall be no obligation of Administrative Agent to
give any such notice and no right of Borrower to cure under this paragraph if
the event or condition is addressed in any other paragraph of this Section 4.1
or is intentionally caused by Borrower, including but not limited to the
failure of Borrower to keep the Property free and clear of consensual liens,
security interests and assignments not approved in writing in advance by
Administrative Agent.

(c)           Representations.  Any statement, representation or warranty in
any of the Loan Documents, or in any Financial Statement or any other writing
heretofore or hereafter delivered to Administrative Agent in connection with
the Indebtedness or Obligations is false, fraudulent, misleading or erroneous
in any material respect on the date or on the date as of which such statement,
representation or warranty is made or deemed made, if such notice or grace
period is not provided for, within fifteen (15) days after written notice and
demand by Administrative Agent to Borrower objecting to such statement,
representation or warranty not being true and correct (or if such failure
cannot be cured within that original 15-day period and Borrower delivers
written notice to Administrative Agent promptly within that original 15-day
period of Borrower’s intention and proposed steps to cure the failure with due
diligence, promptly institutes curative action within that original 15-day
period and diligently pursues same, Borrower shall have such additional period
of time, not exceeding forty-five (45) days next following the end of the
original fifteen (15) day period, as shall be necessary to effect the cure); provided,
however, that there shall be no obligation of Administrative Agent to
give such notice in the case of, and no right of Borrower to cure, any
fraudulent or knowingly false representation to Administrative Agent.

(d)           Injunction.  Any court of competent jurisdiction enjoins
or prohibits Borrower or any of the Lenders from performing this Agreement or
any of the other Loan Documents, and such injunction or order is not vacated
within ninety (90) days after the granting thereof.

(e)           Hotel Operating
Agreement.  A default occurs under
the Hotel Operating Agreement and such default is not cured within thirty (30)
days after the occurrence of such default.

(f)            Bankruptcy or
Insolvency.  Borrower, Borrower’s
general partner, or Guarantor:

(i)            (A) Executes an
assignment for the benefit of creditors, or takes any action in furtherance
thereof; or (B) admits in writing its inability to pay, or fails to pay,
its debts generally as they become due; or (C) as a debtor, files a
petition, case, proceeding or other action pursuant to, or voluntarily seeks
the benefit or benefits of any Debtor Relief Laws, or takes any action in
furtherance thereof; or (D) seeks the appointment of a receiver, trustee,
custodian or liquidator of the Property or any part thereof or of any
significant portion of its other property; or

 26
 

(ii)           Suffers the filing of a
petition, case, proceeding or other action against it as a debtor under any
Debtor Relief Laws or seeking appointment of a receiver, trustee, custodian or
liquidator of the Property or any part thereof or of any significant portion of
its other property, and (A) admits, acquiesces in or fails to contest
diligently the material allegations thereof, or (B) the petition, case,
proceeding or other action results in entry of any order for relief or order
granting relief sought against it, or (C) in a proceeding under the
Title 11 of the United States Code, the case is converted from one chapter
to another, or (D) fails to have the petition, case, proceeding or other
action permanently dismissed or discharged on or before the earlier of trial
thereon or sixty (60) days next following the date of its filing; or

(iii)          Conceals, removes, or
permits to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them, or makes or suffers a
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar Law; or suffers or permits, while insolvent,
any creditor to obtain a lien (other than as described in subparagraph (iv)
below) upon any of its property through legal proceedings which are not vacated
and such lien discharged prior to enforcement of such lien and in any event
within sixty (60) days from the date thereof; or

(iv)          Fails to have discharged
within a period of thirty (30) days any attachment, sequestration, or similar
writ levied upon any of its property unless such attachment, sequestration or
similar writ is being contested in accordance with Section 2.10 herein;
or

(v)           Fails to pay within
thirty (30) days any final money judgment against it.

(g)           Transfer of the
Property.  Any sale, lease,
conveyance, assignment or transfer of all or any part of the Property or any
interest therein, whether by operation of law or otherwise, except:
(1) sales or transfers of items of the personal property in the ordinary
course of business which have become obsolete or worn beyond practical use and
which have been replaced by adequate substitutes, owned by Borrower, having
comparable quality and utility to the replaced items when new; (2) rental of
hotel guest rooms at the Property to transient guests in the ordinary course of
business and the rental of meeting rooms, banquet halls and similar
facilities on a non-recurring basis in the ordinary course of business at the
Property; (3) Approved Leases entered into in accordance with the terms of this
Agreement; or (4) transfers permitted in accordance with the terms of this
Agreement or the Deed of Trust.

(h)           Transfer of
Ownership of Borrower or Guarantor. The sale, pledge, encumbrance,
assignment or transfer, voluntarily or involuntarily, of any interest in
Borrower, Member, Guarantor or any member of any of the foregoing without the
prior written consent of the Required Lenders except for the following
transfers, which shall not require
consent of Administrative Agent or Required Lender: (i) transfers of any of the
limited partner’s interest in Guarantor so long as Harvard Property Trust, LLC
continues to be the general partner of Guarantor and such general partner of
Guarantor is controlled by or under common control with Behringer Harvard
Holdings, LLC, a Delaware limited liability company (and “control” means the
possession,

 27
 

directly or indirectly,
of the power to direct or cause the direction of the management of the policies
of a Person, whether through the ownership of stock, by contract, or otherwise,
and “controlling” and “controlled” shall have meanings correlative thereto),
(ii) transfers of Class B limited partnership interest in Borrower owned by
Realty America Group (Westwood), LP, a Texas limited partnership, and (iii)
transfers of interests in Realty America Group (Westwood), LP.

(i)            Grant of Easement,
Etc.  Without the prior written
consent of Administrative Agent (which consent shall be given or withheld in
Administrative Agent’s good faith business judgment), Borrower grants any
easement or dedication, or any restriction, or otherwise encumbers the
Property, or seeks or permits any zoning reclassification or variance, unless
such action is expressly permitted by the Loan Documents.

(j)            Abandonment.  Borrower abandons any or all of the Property.

(k)           Default Under Other
Lien.  A default or event of default
(after taking into consideration applicable notice, grace and cure periods, if
any) occurs under any lien, security interest or assignment covering the
Property or any part thereof (without hereby implying Administrative Agent’s
consent to any such lien, security interest or assignment not created under the
Loan Documents), or the holder of any such lien, security interest or
assignment declares a default or institutes foreclosure or other proceedings
for the enforcement of its remedies thereunder.

(l)            Destruction.   Borrower fails to comply with the
requirements of the Loan Documents applicable to a casualty affecting the
Property and such failure is cured within the period provided for in
subparagraph (b) of this Section 4.1.

(m)          Condemnation.
Borrower fails to comply with the requirements of the Loan Documents applicable
to eminent domain or condemnation affecting the Property and such failure is
cured within the period provided for in subparagraph (b) of this Section 4.1.

(n)           Liquidation, Etc.  The liquidation, termination, dissolution,
merger, consolidation or failure to maintain good standing in the State of
California (or in the case of an individual, the death or legal incapacity) of
Borrower or any person obligated to pay any part of the Indebtedness.

(o)           Material Adverse
Effect.  The occurrence of an event
that, in Administrative Agent’s reasonable opinion, has or will have a Material
Adverse Effect, excluding: 
(A) claims for mechanic’s or materialmen’s liens or taxes against
the Property which are being contested by Borrower in accordance with the
specific provisions of the Loan Documents allowing such contest,  (B) any suit or suits which are covered
by insurance if the insurer has agreed to defend such claims without
reservation of rights and in Administrative Agent’s opinion the coverage
afforded by such insurance is sufficient to satisfy the recovery being sought,
provided Borrower may deposit additional security with Administrative Agent as
Administrative Agent may reasonably require to cover any deficiency in the
insurance coverage, or in the alternative, such suits do not involve the
Property and which seek recovery of amounts not exceeding $250,000.00 for any
one such suit or in the aggregate for all such suits, which are being contested
diligently and in good faith and for which adequate reserves have been
established, if appropriate in accordance with generally accepted accounting
principles, and (C) a material adverse change in the financial condition of
Guarantor unless Guarantor is in compliance with each of its financial
covenants as set forth in the

 28
 

Guaranty and Guarantor so
certifies to Administrative Agent within twenty (20) days after written request
from Administrative Agent.  At least ten (10)
days before declaring a default under this paragraph (q), Administrative Agent
shall notify Borrower of its determination that an event covered by this
paragraph (q) has occurred and a description in reasonable detail of the basis
for its determination.

(p)           Enforceability;
Priority.  Any Loan Document shall
for any reason without Administrative Agent’s specific written consent cease to
be in full force and effect in all material respects, or shall be declared null
and void or unenforceable in whole or in any material part, or the validity or
enforceability thereof, in whole or in any material part, shall be challenged
or denied by any party thereto other than Administrative Agent or the Trustee
under the Deed of Trust; or the liens, mortgages or security interests of
Administrative Agent in any of the Property become unenforceable in whole or in
part, or cease to be of the priority herein required, or the validity or
enforceability thereof, in whole or in material part, shall be challenged or
denied by Borrower or any person obligated to pay any part of the Indebtedness.

(q)           Guaranty.  Guarantor shall fail to timely comply with
any covenant or obligation under the Guaranty, including without limitation,
the financial covenants of Guarantor and such failure shall not be cured within
five (5) Business Days after the date Guarantor is required to deliver the
applicable Compliance Certificate that discloses such failure to comply.

(u)           1.0xDSC Performance
Threshold.  Borrower fails to comply
with and maintain the 1.0xDSC Performance Threshold as required under Section
2.13 of this Agreement.

4.2           Remedies.  Upon a Default, Administrative Agent may with
the consent of, and shall at the direction of the Required Lenders, without
notice, exercise any and all rights and remedies afforded by this Agreement,
the other Loan Documents, Law, equity or otherwise, including (a) declaring any
and all Indebtedness immediately due and payable; (b) reducing any claim to
judgment; or (c) obtaining appointment of a receiver (to which Borrower hereby
consents) and/or judicial or nonjudicial foreclosure under the Deed of Trust.
Provided however, upon a Default, Administrative Agent at its election may (but
shall not be obligated to) without the consent of and shall at the direction of
the Required Lenders, without notice, do any one or more of the following: (a)
terminate Lenders’ Commitment to lend; (b) in its own name on behalf of the
Lenders or in the name of Borrower, enter into possession of the Property; or
(c) set-off and apply, to the extent thereof and to the maximum extent
permitted by Law, any and all deposits, funds, or assets at any time held and
any and all other indebtedness at any time owing by Administrative Agent or any
Lender to or for the credit or account of Borrower against any Indebtedness.
Further, L/C Issuer may, with the approval of Administrative Agent on behalf of
the Required Lenders, demand immediate payment by Borrower of an amount equal
to the aggregate amount of all outstanding Letters of Credit to be held in a
deposit account with Administrative Agent to secure amounts due from Borrower
under Letters of Credit and when no Letters of Credit exist, the Loan.

Borrower hereby appoints
Administrative Agent as Borrower’s attorney-in-fact, which power of
attorney is irrevocable and coupled with an interest, with full power of
substitution if Administrative Agent so elects, to do any of the following in
Borrower’s name upon the occurrence and during the continuation of a Default:
(i) endorse the name of Borrower on any checks or drafts representing proceeds
of any insurance policies, or other checks or instruments payable to Borrower
with respect to the Property; (ii) prosecute or defend any action or proceeding
incident to the

 29
 

Property, (iii) pay,
settle, or compromise all bills and claims so as to clear title to the
Property; and (iv) take over and use all or any part of the labor, materials,
supplies and equipment contracted for, owned by, or under the control of
Borrower, whether or not previously incorporated into the Improvements.  Any amounts expended by Administrative Agent
itself or on behalf of Lenders to construct or complete the Improvements or in
connection with the exercise of its remedies herein shall be deemed to have
been advanced to Borrower hereunder as a demand obligation owing by Borrower to
Administrative Agent or Lenders as applicable and shall constitute a portion of
the Indebtedness, regardless of whether such amounts exceed any limits for
Indebtedness otherwise set forth herein. 
Neither Administrative Agent nor Lenders shall have any liability to
Borrower for the sufficiency or adequacy of any such actions taken by
Administrative Agent.

No delay or omission of
Administrative Agent or Lenders to exercise any right, power or remedy accruing
upon the happening of a Default shall impair any such right, power or remedy or
shall be construed to be a waiver of any such Default or any acquiescence
therein.  No delay or omission on the
part of Administrative Agent or Lenders to exercise any option for acceleration
of the maturity of the Indebtedness, or for foreclosure of the Deed of Trust
following any Default as aforesaid, or any other option granted to
Administrative Agent and Lenders hereunder in any one or more instances, or the
acceptances by Administrative Agent or Lenders of any partial payment on
account of the Indebtedness, shall constitute a waiver of any such Default, and
each such option shall remain continuously in full force and effect.  No remedy herein conferred upon or reserved
to Administrative Agent and/or Lenders is intended to be exclusive of any other
remedies provided for in any Note or any of the other Loan Documents, and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder, or under any Note or any of the other Loan
Documents, or now or hereafter existing at Law or in equity or by statute.  Every right, power and remedy given to
Administrative Agent and Lenders by this Agreement, any Note or any of the
other Loan Documents shall be concurrent, and may be pursued separately,
successively or together against Borrower, or the Property or any part thereof,
or any personal property granted as security under the Loan Documents, and
every right, power and remedy given by this Agreement, any Note or any of the
other Loan Documents may be exercised from time to time as often as may be
deemed expedient by the Required Lenders.

Regardless of how a
Lender may treat payments received from the exercise of remedies under the Loan
Documents for the purpose of its own accounting, for the purpose of computing
the Indebtedness, payments shall be applied as elected by Lenders.  No application of payments will cure any
Default, or prevent acceleration, or continued acceleration, of amounts payable
under the Loan Documents, or prevent the exercise, or continued exercise, of
rights or remedies of Administrative Agent and Lenders hereunder or thereunder
or at Law or in equity.

ARTICLE
5– ADMINISTRATIVE AGENT

5.1           Appointment
and Authorization of Administrative Agent.

(a)           Each Lender hereby
irrevocably (subject to Section 5.9) appoints, designates and authorizes
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere herein
or in any other Loan Document,

 30
 

Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Administrative
Agent.  Without limiting the generality
of the foregoing sentence, the use of the term “agent” herein and in the other
Loan Documents with reference to Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law.  Instead,
such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.

(b)           L/C Issuer shall act on
behalf of Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and that L/C Issuer shall have all of the
benefits and immunities (i) provided to Administrative Agent in this
Article with respect to any acts taken or omissions suffered by L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and the applications and agreements for letters of credit pertaining to such
Letters of Credit as fully as if the term “Administrative Agent” as used in
this Article and in the definition of “Agent-Related Person” included L/C
Issuer with respect to such acts or omissions, and (ii) as additionally
provided in this Agreement with respect to L/C Issuer.

(c)           No individual Lender or group of Lenders or L/C Issuer  shall have any right to amend or waive, or consent to the
departure of any party from any provision of any Loan Document, or secure or
enforce the obligations of Borrower or any other party pursuant to the Loan
Documents, or otherwise.  All such
rights, on behalf of Administrative Agent, L/C Issuer or
any Lender or Lenders, shall be held and exercised solely by and at the option
of Administrative Agent for the pro rata benefit of the Lenders. Such rights,
however, are subject to the rights of L/C Issuer, a Lender or Lenders, as
expressly set forth in this Agreement, to approve matters or direct
Administrative Agent to take or refrain from taking action as set forth in this
Agreement.  Except as expressly
otherwise provided in this Agreement or the other Loan Documents,
Administrative Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights, or taking or
refraining from taking any actions which Administrative Agent is expressly
entitled to exercise or take under this Agreement and the other Loan Documents,
including, without limitation, (i) the determination if and to what extent
matters or items subject to Administrative Agent’s satisfaction are acceptable
or otherwise within its discretion, (ii) the making of Administrative Agent Advances,
and (iii) the exercise of remedies pursuant to, but subject to, Article 4
or pursuant to any other Loan Document and any action so taken or not taken
shall be deemed consented to by Lenders.

(d)           In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
Borrower or Guarantor, no individual Lender or group of Lenders or L/C Issuer
shall have the right, and the Administrative Agent (irrespective of whether the
principal of any Loan or L/C Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be exclusively
entitled and empowered on behalf of itself, L/C Issuer and the Lenders, by
intervention in such proceeding or otherwise:

 31
 

(i)            to file and prove a
claim for the whole amount of the principal and interest owing and unpaid in
respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of Lenders and Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Lenders and Administrative Agent and their respective agents and counsel and
all other amounts due Lenders and Administrative Agent under Section 6.10
and Exhibit “J” allowed in such judicial proceeding; and

(ii)           to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same;

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make
such payments to Administrative Agent and, in the event that Administrative
Agent shall consent to the making of such payments directly to Lenders, to pay
to Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of Administrative Agent and its agents and
counsel, and any other amounts due Administrative Agent under Section 6.10.

Nothing contained herein
shall be deemed to authorize Administrative Agent to authorize or consent to or
accept or adopt on behalf of any Lender any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of Lenders except as approved by Required Lenders or to authorize
Administrative Agent to vote in respect of the claims of Lenders except as
approved by Required Lenders in any such proceeding.

5.2           Delegation
of Duties.  Administrative Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel and other consultant experts concerning all
matters pertaining to such duties. 
Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects with
reasonable care.

5.3           Liability
of Administrative Agent.  No
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of Lenders for any recital, statement, representation or warranty made by
Borrower or any subsidiary or Affiliate of Borrower, or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder.  No
Agent-Related Person shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of Borrower, Guarantor or any of
their Affiliates.

5.4           Reliance
by Administrative Agent. 
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate,

 32
 

affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper person or persons, and upon advice and statements of
legal counsel (including counsel to any party to the Loan Documents),
independent accountants and other experts selected by Administrative Agent.
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders or all Lenders
if required hereunder as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. 
Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders or such greater
number of Lenders as may be expressly required hereby in any instance, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.  In the
absence of written instructions from the Required Lenders or such greater
number of Lenders, as expressly required hereunder, Administrative Agent may
take or not take any action, at its discretion, unless this Agreement
specifically requires the consent of the Required Lenders or such greater
number of Lenders.

5.5           Notice
of Default.  Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Default, unless Administrative Agent shall have received written notice from a
Lender, or Borrower referring to this Agreement, describing such Default that
Administrative Agent determines will have a Material Adverse Effect.  Administrative Agent will notify Lenders of
its receipt of any such notice. 
Administrative Agent shall take such action with respect to such Default
as may be requested by the Required Lenders in accordance with Article 4;
provided, however, that unless and until Administrative Agent has
received any such request, Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of Lenders.

5.6           Credit
Decision; Disclosure of Information by Administrative Agent.

(a)           Each Lender
acknowledges that none of Agent-Related Persons has made any representation or
warranty to it, and that no act by Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of Borrower and Guarantor, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lenders as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession.  Each
Lender represents to Administrative Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrower and Guarantor, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrower and Guarantor hereunder.  Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to
make such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower and Guarantor.

 33
 

(b)           Administrative Agent
upon its receipt shall provide each Lender such notices, reports and other
documents expressly required to be furnished to Lenders by Administrative Agent
herein.  To the extent not already
available to a Lender, Administrative Agent shall also provide the Lender
and/or make available for the Lender’s inspection during reasonable business
hours and at the Lender’s expense, upon the Lender’s written request therefor:
(i) copies of the Loan Documents; (ii) such information as is then in
Administrative Agent’s possession in respect of the current status of principal
and interest payments and accruals in respect of the Loan; (iii) copies of all
current financial statements in respect of Borrower, or any Guarantor or other
person liable for payment or performance by Borrower of any obligations under
the Loan Documents, then in Administrative Agent’s possession with respect to
the Loan; and (iv) other current factual information then in Administrative
Agent’s possession with respect to the Loan and bearing on the continuing
creditworthiness of Borrower or any Guarantor, or any of their respective
Affiliates; provided  that nothing contained in this Section shall
impose any liability upon Administrative Agent for its failure to provide a
Lender any of such Loan Documents, information, or financial statements, unless
such failure constitutes willful misconduct or gross negligence on
Administrative Agent’s part; and provided further that Administrative
Agent shall not be obligated to provide any Lender with any information in
violation of Law or any contractual restrictions on the disclosure thereof
(provided such contractual restrictions shall not apply to distributing to a
Lender factual and financial information expressly required to be provided
herein).  Except as set forth above,
Administrative Agent shall not have any duty or responsibility to provide any
Lenders with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of Borrower or Guarantor or any of their respective Affiliates
which may come into the possession of any of Agent-Related Persons.

5.7           Indemnification
of Administrative Agent.  Whether or
not the transactions contemplated hereby are consummated, Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed
by or on behalf of Borrower and without limiting the obligation of Borrower to
do so), pro rata, and hold harmless each Agent-Related Person from and against
any and all Indemnified Liabilities incurred by it, INCLUDING THOSE IN WHOLE OR PART ARISING FROM ADMINISTRATIVE AGENT’S
STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE; provided,
however, that no Lender shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities to the
extent determined in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Agent-Related Person’s own gross
negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section.  Without limitation of the
foregoing, to the extent that Administrative Agent is not reimbursed by or on
behalf of Borrower, each Lender shall reimburse Administrative Agent upon
demand for its ratable share of any costs or out-of-pocket expenses
(including attorney fees) incurred by Administrative Agent as described in Section
6.10.  The undertaking in this
Section shall survive the payment of all Indebtedness hereunder and the
resignation or replacement of Administrative Agent.

5.8           Administrative
Agent in Individual Capacity. 
Administrative Agent, in its individual capacity, and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with any party to the
Loan Documents and their respective Affiliates as though Administrative Agent
were not Administrative Agent hereunder and

 34
 

without notice to or
consent of Lenders.  Lenders acknowledge
that Bank of America, N.A. is the L/C Issuer, and Borrower and Bank of America,
N.A. or its Affiliate have entered or may enter into Swap Transactions.  A portion of the Loan may be funded to honor
Borrower’s payment obligations under the terms of such Swap Transactions, and
Lenders shall have no right to share in any portion of such payments.  Lenders acknowledge that, pursuant to such
activities, Bank of America, N.A. or its Affiliates may receive information
regarding any party to the Loan Documents, or their respective Affiliates
(including information that may be subject to confidentiality obligations in
favor of such parties or such parties’ Affiliates) and acknowledge that
Administrative Agent shall be under no obligation to provide such information
to them.  With respect to its Pro Rata
Share of the Loan, Bank of America, N.A. shall have the same rights and powers
under this Agreement as any other Lenders and may exercise such rights and
powers as though it were not Administrative Agent, L/C Issuer or party to Swap
Transactions, and the terms “Lender” and “Lenders” include Bank of America,
N.A. in its individual capacity.

5.9           Successor
Administrative Agent.  Administrative
Agent may, and at the request of the Required Lenders as a result of
Administrative Agent’s gross negligence or willful misconduct in performing its
duties under this Agreement shall, resign as Administrative Agent and L/C Issuer upon 30 days’ notice to
Lenders ; provided any such resignation
by Bank of America, N.A. shall also constitute its resignation as L/C Issuer.  If Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among Lenders a successor
administrative agent for Lenders, which successor administrative agent shall be
consented to by the Borrower at all times other than during the existence of a
Default (which consent of the Borrower shall not be unreasonably withheld or
delayed).  If no successor administrative
agent is appointed prior to the effective date of the resignation of
Administrative Agent, Administrative Agent may appoint, after consulting with
Lenders and Borrower, a successor administrative agent from among Lenders.  Upon the acceptance of its appointment as
successor administrative agent hereunder, such successor administrative agent
shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and L/C Issuer
and the respective terms “Administrative
Agent” and “L/C Issuer” shall
mean such successor administrative agent and L/C Issuer, and the retiring Administrative Agent’s
appointment, powers and duties as Administrative Agent shall be terminated and the retiring L/C Issuer’s rights, powers
and duties as such shall be terminated, without any other or further act or
deed on the part of such retiring L/C Issuer or any other Lender, other than
the obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letter of Credit. 
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article and other applicable
Sections of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent and L/C Issuer under this Agreement.  If no successor administrative agent has
accepted appointment as Administrative Agent and L/C Issuer by the date which is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative Agent’s
resignation shall nevertheless thereupon become effective and Lenders shall
perform all of the duties of Administrative Agent and L/C Issuer hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.  Notwithstanding
the foregoing, however, Bank of America, N.A. may not be removed as
Administrative Agent at the request of the Required Lenders unless Bank of
America shall also simultaneously be replaced and fully released as “L/C Issuer”
hereunder pursuant to documentation in form and substance reasonably
satisfactory to Bank of America, N.A.

 35
 

5.10         Releases;
Acquisition and Transfers of Collateral.

(a)           Lenders hereby
irrevocably authorize Administrative Agent to transfer or release any lien on,
or after foreclosure or other acquisition of title by Administrative Agent on
behalf of Lenders to transfer or sell, any Loan collateral (i) upon the
termination of the Commitments and payment and satisfaction in full of all
Indebtedness; (ii) constituting a release, transfer or sale of any Residential
Unit pursuant to Section 2.17 hereof or, alternatively, any other lien
or property if Borrower will certify to Administrative Agent that the release,
transfer or sale is permitted under this Agreement or the other Loan Documents
(and Administrative Agent may rely conclusively on any such certificate,
without further inquiry); or (iii) after foreclosure or other acquisition of
title (1) for a purchase price of 90% of the value indicated in the most
recent appraisal of the collateral obtained by Administrative Agent made in
accordance with regulations governing Administrative Agent, less any reduction
indicated in the appraisal estimated by experts in such areas; or (2) if
approved by the Required Lenders.

(b)           If all or any portion
of the Loan collateral is acquired by foreclosure or by deed in lieu of
foreclosure, Administrative Agent shall take title to the collateral in its
name or by an Affiliate of Administrative Agent, but for the benefit of all
Lenders in their Pro Rata Shares on the date of the foreclosure sale or
recordation of the deed in lieu of foreclosure (the “Acquisition Date”). 
Administrative Agent and all Lenders hereby expressly waive and relinquish any
right of partition with respect to any collateral so acquired.  After any collateral is acquired,
Administrative Agent shall appoint and retain one or more Persons (individually
and collectively, “Property Manager”) experienced in the management,
leasing, sale and/or dispositions of similar properties.

After consulting with the
Property Manager, Administrative Agent shall prepare a written plan for
operation, management, improvement, maintenance, repair, sale and disposition
of the Loan collateral and a budget for the aforesaid, which may include a
reasonable management fee payable to Administrative Agent (the “Business
Plan”).  Administrative Agent will
deliver the Business Plan not later than the sixtieth (60th) day after the
Acquisition Date to each Lender with a written request for approval of the
Business Plan. If the Business Plan is approved by the Required Lenders,
Administrative Agent and the Property Manager shall adhere to the Business Plan
until a different Business Plan is approved by the Required Lenders.  Administrative Agent may propose an amendment
to the Business Plan as it deems appropriate, which shall also be subject to
Required Lender approval.  If the
Business Plan (as may be amended) proposed by Administrative Agent is not
approved by the Required Lenders, (or if sixty (60) days have elapsed following
the Acquisition Date without a Business Plan being proposed by Administrative
Agent), any Lender may propose an alternative Business Plan, which
Administrative Agent shall submit to all Lenders for their approval. If an
alternative Business Plan is approved by the Required Lenders, Administrative
Agent may appoint one of the approving Lenders to implement the alternative
Business Plan.  Notwithstanding
any other provision of this Agreement, unless in violation of an approved
Business Plan or otherwise in an emergency situation, Administrative Agent
shall, subject to subsection (a) of this Section, have the right but not the
obligation to take any action in connection with the collateral (including
those with respect to property taxes, insurance premiums, completion of construction,
operation, management, improvement, maintenance, repair, sale and disposition),
or any portion thereof.

(c)           Upon request by
Administrative Agent or Borrower at any time, Lenders will confirm in writing
Administrative Agent’s authority to sell, transfer or release any such

 36
 

liens of particular types
or items of Loan collateral pursuant to this Section; provided, however, that (i) Administrative Agent
shall not be required to execute any document necessary to evidence such
release, transfer or sale on terms that, in Administrative Agent’s opinion,
would expose Administrative Agent to liability or create any obligation or
entail any consequence other than the transfer, release or sale without
recourse, representation or warranty, and (ii) such transfer, release or sale
shall not in any manner discharge, affect or impair the obligations of Borrower
other than those expressly being released.

(d)           If only two (2) Lenders
(other than L/C Issuer) exist at the time Administrative Agent receives a
purchase offer for Loan collateral for which one of the Lenders does not
consent within ten (10) Business Days after notification from Administrative
Agent, the consenting Lender may offer (“Purchase Offer”) to purchase
all of non-consenting Lender’s right, title and interest in the collateral for
a purchase price equal to non-consenting Lender’s Pro Rata Share of the net
proceeds anticipated from such sale of such collateral (as reasonably
determined by Administrative Agent, including the undiscounted face principal
amount of any purchase money obligation not payable at closing) (“Net
Proceeds”).  Within ten (10) Business
Days thereafter the non-consenting Lender shall be deemed to have accepted such
Purchase Offer unless the non-consenting Lender notifies Administrative Agent
that it elects to purchase all of the consenting Lender’s right, title and
interest in the collateral for a purchase price payable by the non-consenting
Lender in an amount equal to the consenting Lender’s Pro Rata Share of the Net
Proceeds.  Any amount payable hereunder
by a Lender shall be due on the earlier to occur of the closing of the sale of
the collateral or 90 days after the Purchase Offer, regardless of whether the
collateral has been sold.

5.11         Application
of Payments.  Except as otherwise
provided below with respect to Defaulting Lenders, aggregate principal and
interest payments, payments for Indemnified Liabilities, and/or foreclosure or
sale of the collateral, and net operating income from the collateral during any
period it is owned by Administrative Agent on behalf of the Lenders (“Payments”)
shall be apportioned pro rata among Lenders and payments of any fees (other
than fees designated for Administrative Agent’s separate account) shall, as
applicable, be apportioned pro rata among Lenders.  Notwithstanding anything to the contrary in
this Agreement, all Payments due and payable to Defaulting Lenders shall be due
and payable to and be apportioned pro rata among Administrative Agent and
Electing Lenders.  Such apportionment
shall be in the proportion that the Defaulting Lender Payment Amounts paid by
them bears to the total Defaulting Lender Payment Amounts of such Defaulting
Lender.  Such apportionment shall be made
until the Administrative Agent and Lenders have been paid in full for the
Defaulting Lender Payment Amounts.  All
pro rata Payments shall be remitted to Administrative Agent and all such
payments not constituting payment of specific fees, and all proceeds of the
Loan collateral received by Administrative Agent, shall be applied first,
to pay any fees, indemnities, costs, expenses (including those in Section
5.7) and reimbursements then due to Administrative Agent from Borrower; second,
to pay any fees, costs, expenses and reimbursements then due to Lenders from
Borrower; third, to pay pro rata interest and late charges due in
respect of the Indebtedness and Administrative Agent Advances; fourth,
to pay or prepay pro rata principal of and to secure any outstanding Letters of
Credit for the Indebtedness and Administrative Agent Advances; fifth, to
pay any indebtedness of Borrower under Swap Transactions; and last, to
Borrower, if required by law, or Lenders in Pro Rata Share percentages equal to
their percentages at the termination of the Aggregate Commitments.

 37
 

Notwithstanding the above, subject to Section 3
of Exhibit “J”, amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit above shall be applied to satisfy drawings under
such Letters of Credit as they occur.  If
any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Indebtedness, if any, in the order set forth above.

5.12         Benefit.  The terms and conditions of this Article are
inserted for the sole benefit of Administrative Agent and Lenders (except for
the provision in Section 5.9 requiring Borrower’s consent); the same
(except for the provision in Section 5.9 requiring Borrower’s consent)
may be waived in whole or in part, with or without terms or conditions, without
prejudicing Administrative Agent’s or Lenders’ rights to later assert them in
whole or in part.

5.13         Co-Agents;
Lead Managers.  None of the Lenders
or other persons identified on the facing page or signature pages of this
Agreement as a “syndication agent”, “documentation agent”, “co-agent”, “book
manager”, or “lead manager”, “arranger”, “lead arranger” or “co-arranger” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such lenders, those applicable to all
Lenders as such.  Without limiting the
foregoing, none of Lenders or other persons so identified as a “syndication
agent”, “documentation agent”, “co-agent” or “lead manager” shall have or be
deemed to have any fiduciary relationship with any Lenders.  Each Lender acknowledges that it has not
relied, and will not rely, on any of Lenders or other persons so identified in
deciding to enter into this Agreement or in taking or not taking action hereunder.

ARTICLE
6– GENERAL TERMS AND CONDITIONS

6.1           Consents;
Borrower’s Indemnity.  Except where
otherwise expressly provided in the Loan Documents, in any instance where the
approval, consent or the exercise of Administrative Agent’s or Lenders’
judgment is required, the granting or denial of such approval or consent and
the exercise of such judgment shall be (a) within the sole discretion of
Administrative Agent or Lenders, as applicable; (b) deemed to have been given
only by a specific writing intended for the purpose given and executed by
Administrative Agent or Lenders; and (c) free from any limitation or
requirement of reasonableness (unless such limitation or requirement is imposed
by applicable Law).  Notwithstanding any
approvals or consents by Administrative Agent or Lenders, neither
Administrative Agent nor any Lender has any obligation or responsibility
whatsoever for the adequacy, form or content of the Budget, any appraisal, any
contract, any change order, any lease, or any other matter incident to the
Property.  Any inspection, appraisal or
audit of the Property or the books and records of Borrower, or the procuring of
documents and financial and other information, by or on behalf of
Administrative Agent shall be for Administrative Agent’s and Lenders’
protection only, and shall not constitute an assumption of responsibility to
Borrower or anyone else with regard to the condition, value, construction,
maintenance or operation of the Property, or relieve Borrower of any of
Borrower’s obligations.  Borrower has
selected all surveyors, architects, engineers, contractors, materialmen and all
other persons or entities furnishing services or materials to the Project.  Neither Administrative Agent nor any Lender
has any duty to supervise or to inspect the Property nor any duty of care to
Borrower or any other person to protect against, or inform Borrower or any
other person of the existence of, negligent, faulty, inadequate or defective
design.  Neither Administrative Agent nor
any Indemnified Party shall be liable or responsible for, and Borrower shall
indemnify each Agent-Related Person and each Indemnified Party and their
respective Affiliates, directors, officers, agents, attorneys and employees

 38
 

(collectively, the “Indemnitees”)
from and against: (a) any Claims, arising from or with respect to (i) any
defect in the Property or the Improvements, (ii) the performance or default of
Borrower, Borrower’s surveyors, architects, engineers, contractors or any other
person engaged by or acting for or under the direction of Borrower or its
Affiliates, (iii) any failure to protect or insure the Improvements in
accordance with the Loan Documents, (iv) in connection with the protection and
preservation of the Loan collateral (including those with respect to property taxes,
insurance premiums, completion of construction, operation, management,
improvements, maintenance, repair, sale and disposition), or (v) the
performance of any obligation of Borrower whatsoever; (b) any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including attorney fees
and costs) of any kind or nature whatsoever which may at any time be imposed
on, incurred by or asserted against any such Indemnitee in any way arising out
of or with respect to (i) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby
or the consummation of the transactions contemplated thereby, (ii) any
Commitment or Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), or (iii) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense
of any pending or threatened claim, investigation, litigation or proceeding)
and regardless of whether any Indemnitee is a party thereto; (c) any and all
claims, demands, actions or causes of action arising out of or relating to the
use of Information (as defined in Section 6.6) or other materials made
available to Administrative Agent or a Lender by Borrower or Guarantor; and (d)
any and all liabilities, losses, costs or expenses (including attorney fees and
costs) that any Indemnified Party suffers or incurs as a result of the
assertion of any foregoing claim, demand, action, cause of action or
proceeding, or as a result of the preparation of any defense in connection with
any foregoing claim, demand, action, cause of action or proceeding, in all
cases, whether or not an Indemnified Party is a party to such claim, demand,
action, cause of action or proceeding and whether it is defeated, successful or
withdrawn (all the foregoing, collectively, the “Indemnified Liabilities”), INCLUDING IN WHOLE OR PART ANY LOSS ARISING OUT OF AN INDEMNIFIED
PARTY’S STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE;
provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of any Indemnified Party. 
Upon demand by Administrative Agent, Borrower shall diligently defend
any Claim which affects the Property or is made or commenced against
Administrative Agent or any Lender, whether alone or together with Borrower or
any other person, all at Borrower’s own cost and expense and by counsel to be
approved by Administrative Agent in the exercise of its reasonable
judgment.  In the alternative, at any
time Administrative Agent may elect to conduct its own defense on behalf of
itself or any Lender through counsel selected by Administrative Agent and at
the cost and expense of Borrower. 
Nothing, including any advance or acceptance of any document or
instrument, shall be construed as a representation or warranty, express or
implied, to any party by Administrative Agent or Lenders (except for
representations of Administrative Agent and Lenders expressly made in the Loan
Documents).

 39

6.2           Miscellaneous.  This Agreement may be executed in several
counterparts, all of which are identical, and all of which counterparts
together shall constitute one and the same instrument.  The Loan Documents are for the sole benefit
of Administrative Agent, Lenders and Borrower and are not for the benefit of
any third party.  A determination that
any provision of this Agreement is unenforceable or invalid shall not affect
the enforceability or validity of any other provision and the determination
that the application of any provision of this Agreement to any person or
circumstance is illegal or unenforceable shall not affect the enforceability or
validity of such provision as it may apply to other persons, entities or
circumstances.  Time shall be of the essence
with respect to Borrower’s obligations under the Loan Documents.  This Agreement, and its validity, enforcement
and interpretation, shall be governed by Texas Law (without regard to any
conflict of Laws principles) and applicable United States federal Law.

6.3           Notices.

6.3.1        Modes of Delivery; Changes.  Except as otherwise provided herein, all
notices, and other communications required or which any party desires to give
under this Agreement or any other Loan Document shall be in writing.  Unless otherwise specifically provided in
such other Loan Document, all such notices and other communications shall be
deemed sufficiently given or furnished if delivered by personal delivery, by
courier, by registered or certified United States mail, postage prepaid, or by
facsimile (with, subject to Subsection 6.3.2 below, a confirmatory
duplicate copy sent by first class United States mail), addressed to the party
to whom directed or by (subject to Subsection 6.3.3 below) electronic
mail address to Borrower, at the addresses set forth at the end of this
Agreement or to Administrative Agent, L/C Issuer or Lenders at the addresses
specified for notices on the Schedule of Lenders (unless changed by similar
notice in writing given by the particular party whose address is to be
changed). Any such notice or communication shall be deemed to have been given
and received either at the time of personal delivery or, in the case of courier
or mail, as of the date of first attempted delivery at the address and in the
manner provided herein, or, in the case of facsimile, upon receipt; provided,
however, that service of a notice required by any applicable statute shall
be considered complete when the requirements of that statute are met.  Notwithstanding the foregoing, no notice of change
of address shall be effective except upon actual receipt.  This Section shall not be construed in any
way to affect or impair any waiver of notice or demand provided in any Loan
Document or to require giving of notice or demand to or upon any person in any
situation or for any reason.

6.3.2        Effectiveness of Facsimile Documents and
Signatures.  Loan Documents may be
transmitted and/or signed by facsimile. 
The effectiveness of any such documents and signatures shall, subject to
applicable Law, have the same force and effect as manually-signed originals and
shall be binding on all parties to the Loan Documents.  The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile document or
signature.

6.3.3        Limited Use of Electronic Mail.  Electronic mail and internet and intranet
websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents
for execution by the parties thereto, and may not be used for any other
purpose.

 40
 

6.3.4        Reliance by Administrative Agent and Lenders.  Administrative Agent
and Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan advance notices) purportedly given by or on behalf of Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient in
good faith, varied from any confirmation thereof.  Borrower shall indemnify each Agent-Related
Person and each Lender from all losses, costs, expenses and liabilities
resulting from the reliance in good faith by such person on each notice
purportedly given by or on behalf of Borrower, INCLUDING IN
WHOLE OR PART FOR AN AGENT RELATED PERSON’S OR LENDER’S STRICT LIABILITY, OR
COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE, except to the extent
of their gross negligence or willful misconduct.  All telephonic notices to and other
communications with Administrative Agent may be recorded by the Administrative
Agent, and each of the parties hereto hereby consents to such recording.  If a Lender does not notify or inform
Administrative Agent of whether or not it consents to, or approves of or agrees
to any matter of any nature whatsoever with respect to which its consent,
approval or agreement is required under the express provisions of this
Agreement or with respect to which its consent, approval or agreement is
otherwise requested by Administrative Agent, in connection with the Loan or any
matter pertaining to the Loan, within ten (10) Business Days (or such longer
period as may be specified by Administrative Agent) after such consent,
approval or agreement is requested by Administrative Agent, the Lender shall be
deemed to have given its consent, approval or agreement, as the case may be,
with respect to the matter in question.

6.4           Payments
Set Aside.  To the extent that any
payment by or on behalf of the Borrower is made to the Administrative Agent or
any Lender, or the Administrative Agent or any Lender exercises its right of
set-off, and such payment or the proceeds of such set-off or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law, to a depository (including Administrative Agent, any
Lender or its or their affiliates) for returned items or insufficient collected
funds, or otherwise, then (a) to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such set-off
had not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its applicable share of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per
annum equal to the Federal Funds Rate from time to time in effect.

6.5           Successors
and Assigns.

(a)           The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender, and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of subsection (b)
of this Section, (ii) by way of participation in accordance with the provisions
of subsection (d) of this Section, or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void).  Nothing in this
Agreement, expressed or implied, shall

 41
 

be construed to confer
upon any person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Indemnified Parties) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

(b)           Any Lender may assign
to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and Pro Rata Share of the Loan (including for purposes of this subsection (b),
participations in L/C Obligations) at the time owing to it); provided
that:

(i)            so long as no Default
has occurred and is continuing, the assigning Lender’s Commitment after the
assignment must be at least $10,000,000.00, and except in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and Pro Rata Share of the Loan at the time owing to it or
in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund as defined in subsection (h) of this Section with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
its Pro Rata Share of the Loan outstanding) subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to Administrative Agent, shall not be less than
$10,000,000 unless each of Administrative Agent and, so long as no Default has
occurred and is continuing, Borrower otherwise consents (each such consent not
to be unreasonably withheld or delayed);

(ii)           each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement with respect to its Pro
Rata Share of the Loan and the Commitment assigned;

(iii)          any assignment of a
Commitment must be approved by Administrative Agent, and the L/C Issuer unless
the person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and

(iv)          the parties to each
assignment shall execute and deliver to Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500 plus the
cost of any applicable endorsement to the Title Insurance or new Title
Insurance.

Subject to acceptance and
recording thereof by Administrative Agent pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment and
Assumption, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement arising after
the Assignment Assumption becomes effective (and, in the case of an Assignment
and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of this Agreement with respect to
Borrower’s obligations surviving termination of this Agreement).  Upon request, Administrative

 42
 

Agent shall prepare and
Borrower shall execute and deliver a (a) Note in the amount so assigned (“Replacement
Note”) to the assignee Lender, and (b) a replacement Note representing the
remaining balance of the assigning Lender’s Commitment.   Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

(c)           Administrative Agent,
acting solely for this purpose as an agent of Borrower, shall forward the
Assignment and Assumption and the Replacement Note to the Title Company for
issuance of an applicable endorsement to the Title Insurance or new Title
Insurance, and  shall maintain at Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of Lenders, and the
Commitments of, and principal amount of each Lender’s Pro Rata Share of the
Loan owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, absent manifest error, and Borrower, Administrative Agent and
Lenders may treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

(d)           Any Lender may, without
the consent of, but with prior notice to Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or its Pro Rata
Share of the Loan (including such Lender’s participations in L/C Obligations)
owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) Borrower, Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement, and (iv) except to
the extent consented to by Administrative Agent in its sole discretion with
respect to each participation, any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement.

(e)           A Participant shall not
be entitled to receive any greater payment under Sections 1.7, 1.8
or 1.9  than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant.

(f)            Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement (including under its Note, if any) to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall
release a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.

(g)           If the consent of
Borrower to an assignment or to an assignee is required hereunder (including a
consent to an assignment which does not meet the minimum assignment threshold
specified in clause (i) of the provision to the first sentence of subsection
(b) above), Borrower shall be deemed to have given its consent five Business
Days after the date notice

 43
 

thereof has been
delivered by the assigning Lender (through Administrative Agent) unless such
consent is expressly refused by Borrower on or before such fifth Business Day.

(h)           As used herein, the
following terms have the following meanings:

(i)            “Eligible Assignee”
“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other person (other than a natural person)
approved by Administrative Agent and, unless a Default has occurred and is
continuing,  Borrower (each such approval
not to be unreasonably withheld or delayed).

(ii)           “Fund” means any
person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial real estate loans and
similar extensions of credit in the ordinary course of its business.

(iii)          “Approved Fund”
means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

(i)            Notwithstanding
anything to the contrary contained herein, if at any time Bank of America, N.A.
assigns all of its Commitment and interest in the Loans pursuant to subsection
(b) above, Bank of America, N.A. may, upon 30 days’ notice to Borrower and
Lenders, resign as L/C Issuer.  In the
event of any such resignation as L/C Issuer, Borrower shall be entitled to
appoint from among Lenders a successor L/C Issuer hereunder; provided,
however, that no failure by Borrower to appoint any such successor shall
affect the resignation of Bank of America, N.A. as L/C Issuer.  If Bank of America, N.A. resigns as L/C
Issuer it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require Lenders to make an advance of Base Rate
Principal or fund risk participations for L/C Borrowings pursuant to Exhibit
“J”).

6.6           Confidentiality.  Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to
the extent requested by any regulatory authority; (c) to the extent
required by applicable Laws or by any subpoena or similar legal process; (d) to
any other party to this Agreement; (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder; (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations under this Agreement or (ii)
any direct or indirect contractual counterparty or prospective counterparty (or
such contractual counterparty’s or prospective counterparty’s professional
advisor) to any Swap Transaction or credit derivative transaction relating to
obligations of the Borrower and Guarantor; (g) with the consent of the
Borrower; or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or

 44
 

(ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower or Guarantor or their Affiliates.  For the purposes of this Section, “Information”
means all information received from the Borrower or Guarantor relating to the
Borrower or Guarantor or their business, other than any such information that
is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by the Borrower or Guarantor; provided that,
in the case of information received from the Borrower or Guarantor after the
date hereof, such information is clearly identified in writing at the time of
delivery as confidential.  Any person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such person has exercised the same degree of care to maintain the
confidentiality of such Information as such person would accord to its own
confidential information. The Administrative
Agent and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Administrative
Agent and the Lenders in connection with the administration and management of
this Agreement, the Loan and Loan Documents.

6.7           Set-off.  In addition to any rights and remedies of
Administrative Agent and Lenders provided by Law, upon the occurrence and
during the continuance of any Event of Default, Administrative Agent and each
Lender is authorized at any time and from time to time, without prior notice to
Borrower or any other party to the Loan Documents, any such notice being waived
by Borrower (on its own behalf and on behalf of each party to the Loan
Documents to the fullest extent permitted by Law), to set-off and apply any and
all deposits, general or special, time or demand, provisional or final, any
time owing by Administrative Agent or such Lender hereunder or under any other
Loan Document to or for the credit or the account of Borrower against any and
all Indebtedness then due and payable under the Loan Documents, irrespective of
whether or not the Administrative Agent or such Lender shall have made demand
under this Agreement or any other Loan Document.  Each Lender agrees promptly to notify
Borrower and Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.

6.8           Sharing
of Payments.  If, other than as
expressly provided elsewhere herein, any Lender shall obtain on account of the
portions of the Loan advanced by it, or
the participations in L/C Obligations held by it, any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the portions of the Loan made by them and/or such subparticipations in the participations in L/C Obligations
held by them, as the case may be, as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such portions of
the Loan or such participations, as the case may be, pro rata with each of
them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section
6.4 (including pursuant to any settlement entered into by the purchasing
Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered without further
interest thereon.  The Borrower agrees
that any Lender so purchasing a participation from another

 45
 

Lender may, to the
fullest extent permitted by Law, exercise all its rights of payment (including
the right of set-off), but subject to Section 6.7 with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. 
The Administrative Agent will keep records (which shall be conclusive
and binding in the absence of manifest error) of participations purchased under
this Section and will in each case notify the Lenders following any such
purchases or repayments.  Each Lender
that purchases a participation pursuant to this Section shall from and after
such purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of
the Obligations purchased to the same extent as though the purchasing Lender
were the original owner of the Obligations purchased.

6.9           Amendments;
Survival.  Administrative Agent and
Lenders shall be entitled to amend (whether pursuant to a separate
intercreditor agreement or otherwise) any of the terms, conditions or
agreements set forth in Article 5 (except Borrower’s right to consent to
certain amendments referred to in Section 5.9) or as to any other matter
in the Loan Documents respecting payments to Administrative Agent or Lenders or
the required number of the Lenders to approve or disapprove any matter or to
take or refrain from taking any action, without the consent of Borrower or any
other Person or the execution by Borrower or any other Person of any such
amendment or intercreditor agreement. 
Subject to the foregoing, Administrative Agent may amend or waive any
provision of this Agreement or any other Loan Document, or consent to any
departure by any party to the Loan Documents therefrom which amendment, waiver
or consent is intended to be within Administrative Agent’s discretion or
determination, or otherwise in Administrative Agent’s reasonable determination
shall not have a Material Adverse Effect; provided however, otherwise no
such amendment, waiver or consent shall be effective unless in writing, signed
by the Required Lenders and Borrower or the applicable party to the Loan
Documents, as the case may be, and acknowledged by Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided further however,
no such amendment, waiver or consent shall:

(a)           extend or increase the
Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section
4.2), without the written consent of such Lender (it being understood that
a waiver of a Default shall not constitute an extension or increase in any
Lender’s Commitment);

(b)           postpone any date fixed
by this Agreement or any other Loan Document for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder
or under any other Loan Document, without the written consent of each Lender
directly affected thereby;

(c)           reduce the principal
of, or the rate of interest specified herein on, any portion of the Loan or L/C
Borrowing, or any fees or other amounts payable hereunder or under any other
Loan Document, without the written consent of each Lender directly affected
thereby; provided, however, that the Administrative Agent may
waive any obligation of the Borrower to pay interest at the Past Due Rate
and/or late charges for periods of up to thirty days, and only the consent of
the Required Lenders shall be necessary to waive any obligation of the Borrower
to pay interest at the Past Due Rate or late charges thereafter, or to amend
the definition of “Past Due Rate” or “late charges”;

 46
 

(d)           change the percentage
of the combined Commitments or of the aggregate unpaid principal amount of the
Loan and L/C Obligations which is required for the Lenders or any of them to
take any action hereunder, without the written consent of each Lender;

(e)           change the definition
of “Pro Rata Share” or “Required Lender” or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender;

(f)            amend this Section, or
Section 6.8, without the written consent of each Lender;

(g)           release the liability
of Borrower or any existing Guarantor without the written consent of each
Lender;

(h)           permit the sale,
transfer, pledge, mortgage or assignment of any Loan collateral or any direct
or indirect interest in Borrower, except as expressly permitted under the Loan
Documents, without the written consent of each Lender; or

(i)            transfer or release
any lien on, or after foreclosure or other acquisition of title by
Administrative Agent on behalf of the Lenders transfer or sell, any Loan
collateral except as permitted in Section 5.10, without the written
consent of each Lender.

and, provided  further,
that (i) no amendment, waiver or
consent shall, unless in writing and signed by the L/C Issuer in addition to
the Lenders required above, affect the rights or duties of the L/C Issuer under
this Agreement or any Letter of Credit Application relating to any Letter of
Credit issued or to be issued by it; and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased without the consent of such Lender.

This Agreement shall
continue in full force and effect until the Indebtedness is paid in full and
all of Administrative Agent’s and Lenders’ obligations under this Agreement are
terminated; and all representations and warranties and all provisions herein
for indemnity of the Indemnified Parties, Administrative Agent and Lenders (and
any other provisions herein specified to survive) shall survive payment in
full, satisfaction or discharge of the Indebtedness, the resignation or removal
of Administrative Agent or replacement of any Lender, and any release or
termination of this Agreement or of any other Loan Documents.

6.10         Costs
and Expenses.  Without limiting any
Loan Document and to the extent not prohibited by applicable Laws, Borrower
shall pay when due, shall reimburse to Administrative Agent for the benefit of
itself and Lenders on demand and shall indemnify Administrative Agent and
Lenders from, all out-of-pocket fees, costs, and expenses paid or
incurred by Administrative Agent in connection with the negotiation,
preparation and execution of this Agreement and the other Loan Documents (and
any amendments, approvals, consents, waivers and releases requested, required,
proposed or done from time to time), or in connection with the disbursement,
administration or collection of the Loan or the enforcement of the obligations
of Borrower or the

 47
 

exercise of any right or
remedy of Administrative Agent, including (a) all fees and expenses of
Administrative Agent’s counsel; (b) fees and charges of each inspector and
engineer; (c) appraisal, re-appraisal obtained in accordance with Section
2.7 hereof, and survey costs; (d) title insurance charges and premiums; (e)
title search or examination costs, including abstracts, abstractors’
certificates and uniform commercial code searches; (f) judgment and tax lien
searches for Borrower and each Guarantor; (g) escrow fees; (h) fees and costs
of environmental investigations, site assessments and remediations; (i)
recordation taxes, documentary taxes, transfer taxes and mortgage taxes; (j)
filing and recording fees; and (k) loan brokerage fees for which Borrower has
specifically agreed to pay.  Borrower
shall pay all costs and expenses incurred by Administrative Agent, including
attorneys’ fees, if the obligations or any part thereof are sought to be
collected by or through an attorney at Law, whether or not involving probate,
appellate, administrative or bankruptcy proceedings.  Borrower shall pay all costs and expenses of
complying with the Loan Documents, whether or not such costs and expenses are
included in the Budget.  Borrower’s
obligations under this Section shall survive the delivery of the Loan
Documents, the making of advances, the payment in full of the Indebtedness, the
release or reconveyance of any of the Loan Documents, the foreclosure of the
Deed of Trust or conveyance in lieu of foreclosure, any bankruptcy or other
debtor relief proceeding, and any other event whatsoever (other than an
enforceable waiver of Borrower’s obligations under this Section by
Administrative Agent).

6.11         Tax
Forms.

(a) (i) Each Lender, and
each holder of a participation interest herein, that is not a “United States
person” (a “Foreign Lender”) within the meaning of Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended from time to time (“Code”)
shall deliver to Administrative Agent and Borrower, prior to receipt of any
payment subject to withholding (or upon accepting an assignment or receiving a
participation interest herein), two duly signed completed copies of either Form
W-8BEN or any successor thereto (relating to such Foreign Lender and entitling
it to a complete exemption from withholding on all payments to be made to such
Foreign Lender by Borrower pursuant to this Agreement) or Form W-8ECI or any
successor thereto (relating to all payments to be made to such Foreign Lender
by Borrower pursuant to this Agreement) of the United States Internal Revenue
Service or such other evidence satisfactory to Borrower and Administrative
Agent that such Foreign Lender is entitled to an exemption from or reduction
of, United States withholding tax, including any exemption pursuant to Section
881(c) of the Code.  Thereafter and from
time to time, each such Foreign Lender shall (A) promptly submit to
Administrative Agent and Borrower such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States Laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and Administrative Agent of any
available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by Borrower pursuant
to the Loan Documents, (B) promptly notify Administrative Agent and Borrower of
any change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Foreign Lenders, and
as may be reasonably necessary (including the re-designation of its lending
office, if any) to avoid any requirement of applicable Laws that Borrower make
any deduction or withholding for taxes from amounts payable to such Foreign
Lender.

 48
 

(ii)           Each Foreign Lender, to
the extent it does not act or ceases to act for its own account with respect to
any portion of any sums paid or payable to such Lender under any of the Loan
Documents (for example, in the case of a typical participation by such Lender),
shall deliver to the Administrative Agent on the date when such Foreign Lender
ceases to act for its own account with respect to any portion of any such sums
paid or payable, and at such other times as may be necessary in the
determination of the Administrative Agent and Borrower (in each case in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect
to which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of United States
Internal Revenue Service Form W-8IMY (or any successor thereto), together with
any information such Lender chooses to transmit with such form, and any other
certificate or statement of exemption required under the Code, to establish
that such Lender is not acting for its own account with respect to a portion of
any such sums payable to such Lender.

(iii)          Borrower shall not be required
to pay any additional amount to any Foreign Lender under Section 1.11(a)
with respect to any Taxes required to be deducted or withheld on the basis of
the information, certificates or statements of exemption such Lender transmits
with an United States Internal Revenue Service Form W-8IMY pursuant to this subsection
(a) or (B) if such Lender shall have failed to satisfy the foregoing
provisions of this subsection (a); provided that if such Lender
shall have satisfied the requirement of this subsection (a) on the date
such Lender became a Lender or ceased to act for its own account with respect
to any payment under any of the Loan Documents, nothing in this subsection
(a) shall relieve the Borrower of its obligation to pay any amounts
pursuant to Section 1.11 in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Lender or other
Person for the account of which such Lender receives any sums payable under any
of the Loan Documents is not subject to withholding or is subject to withholding
at a reduced rate.

(iv)          Administrative Agent
may, without reduction, withhold any Taxes required to be deducted and withheld
from any payment under any of the Loan Documents with respect to which Borrower
is not required to pay additional amounts under this subsection (a).

(b)           Upon the request of
Administrative Agent or Borrower, each Lender that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code shall deliver to
Administrative Agent and Borrower two duly signed completed copies of United
States Internal Revenue Service Form W-9. 
If such Lender fails to deliver such forms, then Administrative Agent
may withhold from any interest payment to such Lender an amount equivalent to the
applicable back-up withholding tax imposed by the Code, without reduction.

 49
 

(c)           If any Tribunal asserts
that Administrative Agent did not properly withhold or backup withhold, as the
case may be, any tax or other amount from payments made to or for the account
of any Lender, such Lender shall indemnify Administrative Agent therefor,
including all penalties and interest and costs and expenses (including attorney
fees) of Administrative Agent. If any Tribunal asserts that Borrower did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender as a result of
such Lender’s failure to timely deliver to Borrower the applicable documents
contemplated in this Section 6.11, such Lender shall indemnify Borrower
therefor, including all penalties and interest and costs and expenses
(including attorney fees) of Borrower.  
The obligation of Lenders under this subsection shall survive the
removal or replacement of a Lender, the payment of all Indebtedness and the
resignation or replacement of Administrative Agent.

6.12         Further
Assurances.  Borrower will, upon
Administrative Agent’s request, (a) promptly correct any defect, error or
omission in any Loan Document; (b) execute, acknowledge, deliver, procure,
record or file such further instruments and do such further acts as
Administrative Agent, in its good faith business judgment, deems necessary,
desirable or proper to carry out the purposes of the Loan Documents and to
identify and subject to the liens and security interest of the Loan Documents
any property intended to be covered thereby, including any renewals, additions,
substitutions, replacements, or appurtenances to the Property; (c) execute,
acknowledge, deliver, procure, file or record any document or instrument
Administrative Agent, in its good faith business judgment, deems necessary,
desirable, or proper to protect the liens or the security interest under the
Loan Documents against the rights or interests of third persons; and (d)
provide such certificates, documents, reports, information, affidavits and
other instruments and do such further acts deemed necessary, desirable or
proper by Administrative Agent, in its good faith business judgment, to comply
with the requirements of any agency having jurisdiction over Administrative
Agent.  In addition, at any time, and from time to time, upon request by
Administrative Agent or any Lender, Borrower will, at Borrower’s expense,
provide any and all further instruments, certificates and other documents as
may, in the opinion of Administrative Agent or such Lender, in its good faith
business judgment, be necessary or desirable in order to verify Borrower’s
identity and background in a manner satisfactory to Administrative Agent or
such Lender.

6.13         Inducement
to Lenders.  The representations,
warranties, covenant and agreements contained in this Agreement and the other
Loan Documents (a) are made to induce Lenders to make the Loan and extend any
other credit to or for the account of the Borrower pursuant hereto, and
Administrative Agent and Lenders are relying thereon, and will continue to rely
thereon, and (b) shall survive any bankruptcy proceedings involving Borrower,
Guarantor or the Property, foreclosure, or conveyance in lieu of foreclosure;
provided, however, clause (b) preceding shall not be construed to require
Borrower to perform such covenants and agreements after bankruptcy, foreclosure
or deed in lieu of foreclosure except for indemnity and payment obligations
that relate to liabilities arising prior to such bankruptcy, foreclosure or
deed in lieu of foreclosure and interest accruing thereon thereafter.

6.14         Forum.  Each Party to this Agreement hereby
irrevocably submits generally and unconditionally for itself and in respect of
its property to the jurisdiction of any state court, or any United States
federal court, sitting in the State specified in Section 6.2 of this
Agreement and to the jurisdiction of any state court or any United States
federal court, sitting in the state in which any of the Property is located,
over any suit, action or proceeding arising out of or relating to this

 50
 

Agreement or the
Indebtedness.  Each Party to this
Agreement hereby irrevocably waives, to the fullest extent permitted by Law,
any objection that they may now or hereafter have to the laying of venue in any
such court and any claim that any such court is an inconvenient forum.  Each Party to this Agreement hereby agrees
and consents that, in addition to any methods of service of process provided
for under applicable Law, all service of process in any such suit, action or
proceeding in any state court, or any United States federal court, sitting in
the state specified in Section 6.2 may be made by certified or
registered mail, return receipt requested, directed to such party at its
address for notice stated in the Loan Documents, or at a subsequent address of
which Administrative Agent received actual notice from such party in accordance
with the Loan Documents, and service so made shall be complete five (5) days
after the same shall have been so mailed. 
Nothing herein shall affect the right of Administrative Agent to serve
process in any manner permitted by Law or limit the right of Administrative
Agent to bring proceedings against any party in any other court or
jurisdiction.

6.15         Interpretation.  References to “Dollars,” “$,” “money,” “payments”
or other similar financial or monetary terms are references to lawful money of
the United States of America.  References
to Articles, Sections, and Exhibits are, unless specified otherwise, references
to articles, sections and exhibits of this Agreement.  Words of any gender shall include each other
gender.  Words in the singular shall
include the plural and words in the plural shall include the singular.  References to Borrower or Guarantor shall
mean, each person comprising same, jointly and severally.  References to “persons” shall include both
natural persons and any legal entities, including public or governmental
bodies, agencies or instrumentalities. 
The words “include” and “including” shall be interpreted as if followed
by the words “without limitation”. 
Captions and headings in the Loan Documents are for convenience only and
shall not affect the construction of the Loan Documents.

6.16         No
Partnership, etc. The relationship between Lenders (including
Administrative Agent) and Borrower is solely that of lender and borrower.  Neither Administrative Agent nor any Lender
has any fiduciary or other special relationship with or duty to Borrower and
none is created by the Loan Documents. 
Nothing contained in the Loan Documents, and no action taken or omitted
pursuant to the Loan Documents, is intended or shall be construed to create any
partnership, joint venture, association, or special relationship between
Borrower and Administrative Agent or any Lender or in any way make
Administrative Agent or any Lender a co-principal with Borrower with reference
to the Project, the Property or otherwise. 
In no event shall Administrative Agent’s or Lenders’ rights and
interests under the Loan Documents be construed to give Administrative Agent or
any Lender the right to control, or be deemed to indicate that Administrative
Agent or any Lender is in control of, the business, properties, management or
operations of Borrower.

6.17         Records.  The unpaid amount of the Loan and the amount
of any other credit extended by Administrative Agent or Lenders to or for the
account of Borrower set forth on the books and records of Administrative Agent
shall be prima facie evidence of the amount thereof owing and unpaid, but failure
to record any such amount on Administrative Agent’s books and records shall not
limit or affect the obligations of Borrower under the Loan Documents to make
payments on the Loan when due.

6.18         Commercial
Purpose.  Borrower warrants that the
Loan is being made solely to acquire or carry on a business or commercial
enterprise, and/or Borrower is a business or commercial organization.  Borrower further warrants that all of the
proceeds of this Loan shall be

 51
 

used for commercial
purposes and stipulates that the Loan shall be construed for all purposes as a
commercial loan, and is made for other than personal, family, household or
agricultural purposes.

6.19         Service
of Process.  Borrower hereby consents
to process being served in any suit, action, or proceeding instituted in
connection with the Loan by (a) the mailing of a copy thereof by certified
mail, postage prepaid, return receipt requested, to Borrower and (b) serving a
copy thereof to 15601 Dallas Parkway, Suite 600, Addison, Texas 75001
Attention: Gerald J. Reihsen III, the agent hereby designated and appointed by
Borrower as Borrower’s agent for service of process.  Borrower irrevocably agrees that such service
shall be deemed to be service of process upon Borrower in any such suit,
action, or proceeding.  Nothing in any
other Loan Document shall affect the right of Administrative Agent to serve
process in any manner otherwise permitted by Law and nothing in any other Loan
Document will limit the right of Administrative Agent on behalf of the Lenders
otherwise to bring proceedings against Borrower in the courts of any
jurisdiction or jurisdictions.

6.20         USA
Patriot Act Notice.  Each Lender and
the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.

6.21         Entire
Agreement.  The Loan Documents
constitute the entire understanding and agreement between Borrower,
Administrative Agent and Lenders with respect to the transactions arising in
connection with the Loan, and supersede all prior written or oral
understandings and agreements between Borrower, Administrative Agent and
Lenders with respect to the matters addressed in the Loan Documents, as
applicable.  In particular, and without
limitation, the terms of any commitment letter, letter of intent or quote
letter by Administrative Agent or any Lender to make the Loan are merged into
the Loan Documents.  Neither
Administrative Agent nor any Lender has made any commitments to extend the term
of the Loan past its stated maturity date or to provide Borrower with financing
except as set forth in the Loan Documents. 
Except as incorporated in writing into the Loan Documents, there are
not, and were not, and no persons are or were authorized by Administrative
Agent or any Lender to make, any representations, understandings, stipulations,
agreements or promises, oral or written, with respect to the matters addressed
in the Loan Documents.

6.22         Dispute
Resolution.

(a)           Arbitration.  Except to the extent expressly provided
below, any Dispute shall, upon the request of any party, be determined by
binding arbitration in accordance with the Federal Arbitration Act, Title 9,
United States Code (or if not applicable, the applicable state law), the
then-current rules for arbitration of financial services disputes of AAA and
the “Special Rules” set forth below.  In
the event of any inconsistency, the Special Rules shall control.  The filing of a court action is not intended
to constitute a waiver of the right of Borrower, Administrative Agent or any
Lender, including the suing party, thereafter to require submittal of the
Dispute to arbitration.  Any party to
this Agreement may bring an action, including a summary or expedited
proceeding, to compel arbitration of any Dispute in any court having
jurisdiction over such action.  For the
purposes of this Dispute Resolution Section only, the terms “party” and

 52
 

“parties” shall include  any parent corporation, subsidiary or affiliate of
Administrative Agent involved in the servicing, management or administration of
any obligation described in or evidenced by this Agreement, together with the
officers, employees, successors and assigns of each of the foregoing.

(b)           Special
Rules.

(i)            The
arbitration shall be conducted in the City of Dallas, Texas.

(ii)           The
arbitration shall be administered by AAA, who will appoint an arbitrator.  If AAA is unwilling or unable to administer
or legally precluded from administering the arbitration, or if AAA is unwilling
or unable to enforce or legally precluded from enforcing any and all provisions
of this Dispute Resolution Section, then any party to this Agreement may
substitute, without the necessity of the agreement or consent of the other
party or parties, another arbitration organization that has similar procedures
to AAA but that will observe and enforce any and all provisions of this Dispute
Resolution Section.  All Disputes shall
be determined by one arbitrator; however, if the amount in controversy in a
Dispute exceeds Five Million Dollars ($5,000,000), upon the request of any
party, the Dispute shall be decided by three arbitrators (for purposes of this
Agreement, referred to collectively as the “arbitrator”).

(iii)          All
arbitration hearings will be commenced within ninety (90) days of the demand
for arbitration and completed within ninety (90) days from the date of
commencement; provided, however, that upon a showing of good cause, the
arbitrator shall be permitted to extend the commencement of such hearing for up
to an additional sixty (60) days.

(iv)          The
judgment and the award, if any, of the arbitrator shall be issued within thirty
(30) days of the close of the hearing. 
The arbitrator shall provide a concise written statement setting forth
the reasons for the judgment and for the award, if any.  The arbitration award, if any, may be
submitted to any court having jurisdiction to be confirmed and enforced, and
such confirmation and enforcement shall not be subject to arbitration.

(v)           The
arbitrator will give effect to statutes of limitation and any waivers thereof
in determining the disposition of any Dispute and may dismiss one or more
claims in the arbitration on the basis that such claim or claims is or are
barred.  For purposes of the application
of the statute of limitations, the service on AAA under applicable AAA rules of
a notice of Dispute is the equivalent of the filing of a lawsuit.

(vi)          Any
dispute concerning this Dispute Resolution Section, including any such dispute
as to the validity or enforceability of this Dispute Resolution Section of or
whether a Dispute is arbitrable, shall be determined by the arbitrator;
provided, however, that the arbitrator shall not be permitted to vary the
express provisions of these Special Rules or the Reservations of Rights in
subsection (c) below.

(vii)         The
arbitrator shall have the power to award legal fees and costs pursuant to the
terms of this Agreement.

 53
 

(viii)        The arbitration will take
place on an individual basis without reference to, resort to, or consideration
of any form of class or class action.

(c)           Reservations of
Rights.  Nothing in this Agreement
shall be deemed to (i) limit the applicability of any otherwise applicable
statutes of limitation and any waivers contained in this Agreement or any other
Loan Document, or (ii) apply to or limit the right of Administrative Agent or
any Lender (A) to exercise self help remedies such as (but not limited to)
setoff, or (B) to foreclose judicially or nonjudicially against any real
or personal property collateral, or to exercise judicial or nonjudicial power
of sale rights, (C) to obtain from a court provisional or ancillary
remedies such as (but not limited to) injunctive relief, writ of possession,
prejudgment attachment, or the appointment of a receiver, or (D) to pursue
rights against a party to this Agreement in a third-party proceeding in any
action brought against Administrative Agent or any Lender in a state, federal
or international court, tribunal or hearing body (including actions in
specialty courts, such as bankruptcy and patent courts).  Subject to the terms of this Agreement,
Administrative Agent and any Lender may exercise the rights set forth in clauses
(A) through (D), inclusive, before, during or after the pendency of any
arbitration proceeding brought pursuant to this Agreement. Neither the exercise of self help
remedies nor the institution or maintenance of an action for foreclosure or
provisional or ancillary remedies shall constitute a waiver of the right of any
party, including the claimant in any such action, to arbitrate the merits of
the Dispute occasioning resort to such remedies.  No provision in the Loan Documents regarding
submission to jurisdiction and/or venue in any court is intended or shall be
construed to be in derogation of the provisions in any Loan Document for
arbitration of any Dispute.

(d)           Conflicting
Provisions for Dispute Resolution. 
If there is any conflict between the terms, conditions and provisions of
this Section and those of any other provision or agreement for arbitration or
dispute resolution, the terms, conditions and provisions of this Section shall
prevail as to any Dispute arising out of or relating to (i) this
Agreement, (ii) any other Loan Document, (iii) any related agreements
or instruments, or (iv) the transaction contemplated herein or therein
(including any claim based on or arising from an alleged personal injury or
business tort).  In any other situation,
if the resolution of a given Dispute is specifically governed by another
provision or agreement for arbitration or dispute resolution, the other
provision or agreement shall prevail with respect to said Dispute.

(e)           Jury Trial Waiver in
Arbitration.  By agreeing to this
Section, the parties irrevocably and voluntarily waive any right they may have
to a trial by jury in respect of any Dispute.

6.23         WAIVER OF JURY TRIAL.  WITHOUT INTENDING IN ANY
WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY “DISPUTE” (FOR PURPOSES OF
THIS SECTION, AS DEFINED ABOVE) AS SET FORTH IN THIS AGREEMENT, TO THE EXTENT
ANY “DISPUTE” IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR
BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE
ARBITRATED, THE PARTIES HERETO WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE”
AND ANY ACTION ON SUCH “DISPUTE.”  THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES HERETO, AND
THE PARTIES HERETO HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY PERSON OR ENTITY ACTING

 54
 

BY OR ON BEHALF OF ADMINISTRATIVE
AGENT OR ANY LENDER TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT.  THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.  THE PARTIES HERETO ARE EACH HEREBY AUTHORIZED
TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER OF JURY TRIAL.  EACH PARTY HERETO
FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.

THE WRITTEN LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

 55

EXECUTED and DELIVERED as
of September     , 2007.

	
  

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD MOCKINGBIRD COMMONS,

  LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BEHRINGER HARVARD MOCKINGBIRD

  COMMONS GP, LLC, a Texas limited liability

  company, its Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Gerald J.
  Reihsen, III

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice
  President – Corporate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Development
  & Legal and Secretary

  	
   

  
							

 

Borrower’s Address for Notices:

Behringer Harvard Mockingbird Commons, LLC

15601 Dallas Parkway, Suite 600

Addison, Texas 75001

Telephone:
(214) 655-1600

Telecopier:
(214)655-1610

Electronic
Mail:
                

SIGNATURE PAGE

 

	
  

  	
   

  	
  BANK OF AMERICA, N.A., individually as

  
	
   

  	
   

  	
  Administrative Agent and L/C Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:              Jamison
  L. Fox

  	
   

  
	
   

  	
   

  	
  Title:                Vice President

  	
   

  

 

EXHIBIT
“A”

LEGAL DESCRIPTION OF LAND

BEING:

(i) certain condominium units of M
CENTRAL MASTER CONDOMINIUM, as described in that certain MASTER CONDOMINIUM
DECLARATION FOR M CENTRAL MASTER CONDOMINIUM, filed September 16, 2005,
recorded in Volume 2005182, Page 00111, Condominium Records of Dallas County,
Texas (the “Master Condominium Declaration”), and being the following
Units: the Hotel Unit, the Retail Unit, the Hotel Room Units and certain
Sub-Units described in (ii) below, and which are more particularly described in
the Map (as defined in the Master Condominium Declaration), together with all
General Common Elements and Limited Common Elements (as defined in the Master
Condominium Declaration) appurtenant thereto and all other rights, title and
interest appurtenant thereto under the Master Condominium Declaration,

TOGETHER
WITH

(ii) certain
condominium units of M CENTRAL RESIDENCES, A CONDOMINIUM, as described in that
certain RESIDENTIAL CONDOMINIUM DECLARATION FOR M CENTRAL RESIDENCES, A
CONDOMINIUM (the “Residential Condominium Declaration”), filed September
16, 2005, recorded in Volume 2005182, Page 00204, Condominium Records of Dallas
County, Texas, which is a Sub-Unit Declaration and creates a Sub-Unit
Condominium, and being the following Residences designated in Exhibit C to the
Residential Condominium Declaration: Loft 201, Loft 205, Loft 304 and the
Penthouse in Hotel Tower, and which are more particularly described in the
Residential Map (as defined in the Residential Condominium Declaration), together
with all Residential Common Elements (as defined in the Residential Condominium
Declaration) appurtenant thereto and all other rights, title and interest
appurtenant thereto under the Residential Condominium Declaration.

 1

EXHIBIT
“B”

DEFINITIONS
AND FINANCIAL STATEMENTS

1.             DEFINITIONS:

As used in this Agreement
and the attached exhibits, the following terms shall have the following
meanings:

“1.0xDSC Performance
Threshold” means, for any required period, 100% of the Target Monthly
Amortization for the Loan for such period.

“1.40xDSC Performance
Threshold” means, for any required period, 140% of the Target Monthly
Amortization for the Loan for such period.

“Adjusted Expenses” means, for any period, the
actual cash operating expenses of the Property (excluding non-cash expenses
such as (without limitation) depreciation and expenses paid from reserves)
calculated for each calendar month during such period, but excluding payments
of principal or interest on the Loan; and adjusted to include appropriate
monthly accruals for (a) a management fee of at least three percent (3%) per
annum, (b) periodic expenses such as property taxes, insurance and franchise
fees, and (c) during the first Extension Period, a reserve equal to three percent
(3%) of Revenues and during the second Extension Period, a reserve equal to
four percent (4%) of Revenues, in each case, per annum) for repairs and
replacements.

“Adjusted LIBOR Rate”
means the quotient obtained by dividing (i) the applicable London Interbank
Offered Rate by (ii) 1.00 minus the LIBOR Reserve Percentage, where,

“London Interbank
Offered Rate” means, with respect to any applicable Interest Period, the
rate per annum equal to the British Bankers
Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as selected by Administrative Agent in its good faith
business judgment from time to time) at approximately 11:00 a.m. London time
two (2) London Banking Days before the commencement of the Interest Period, for
deposits in U.S. Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the rate for that
Interest Period will be determined by such alternate method as reasonably
selected by Administrative Agent; and

“LIBOR Reserve
Percentage” means, with respect to any applicable Interest Period, for any
day that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including basic,
supplemental, emergency, special and marginal reserves) generally applicable to
financial institutions regulated by the Federal Reserve Board whether or not
applicable to any Lender, in respect of “Eurocurrency liabilities” (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on LIBOR Rate Principal is determined),
whether or not any Lender has any Eurocurrency liabilities.  The LIBOR Rate shall be adjusted
automatically as of the effective date of each change in the LIBOR Reserve
Percentage.

 1
 

“Administrative Agent”
means Bank of America, N.A., in its capacity as administrative agent under any
of the Loan Documents, or any successor administrative agent.

“Administrative Agent
Advances” has the meaning set forth in Section 1.14 of this
Agreement.

“Administrative Agent’s NOI Confirmation Letter”
means a letter from Administrative Agent to Borrower confirming that the
required NOI performance levels have been obtained.

“Administrative Agent’s
Office” means Administrative Agent’s address and, as appropriate, account
as set forth on the Schedule of Lenders, or such other address or account as
Administrative Agent hereafter may from time to time notify Borrower and
Lenders.

“Administrative Agent’s
Time” means the time of day observed in the city where Administrative Agent’s
office is located.

“Affiliate” means
any person directly or indirectly through one or more intermediaries
controlling, controlled by, or under direct or indirect common control with,
such person.  A person shall be deemed to
be “controlled by” any other person if such other person possesses, directly or
indirectly, power (a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managing
general partners or the equivalent; or (b) to direct or cause the direction of
the management and policies of such person whether by contract or otherwise.

“Agent-Related Persons”
means Administrative Agent, together with its Affiliates (including Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of such
persons and Affiliates.

“Aggregate Commitments”
means the Commitments of all the Lenders.

“Agreement” has
the meaning set forth in the introductory paragraph of this Agreement, and
includes all exhibits attached hereto and referenced in Section 1.1.

“Approved Lease” means any Lease (other than a
ground lease) covering Retail Space which has either been approved in writing
by Administrative Agent, or satisfies each of the following conditions: (a)
such Lease is evidenced by a fully executed lease in the form of the Approved
Lease Form, and with no material changes which have not been approved in
writing by Lender; (b) such Lease is for a term of at least five years (and any
term of greater than five years shall provide for an adjustment in base rent to
a market rate of rent at least once in every additional five year period); (c)
the annual fixed rent payable under such Lease shall meet or exceed $40.00 per
square foot; (d) the net rentable area covered by such Lease does not exceed
2,500 square feet; (e) the total amount payable by Borrower for Tenant
Improvements shall not exceed $20.00 per square foot and the Leasing
Commissions shall not exceed 6% of the annual base rent during the initial term
of the Lease; and (f) such Lease does not require Borrower to obtain a
Subordination, Non-Disturbance and Attornment Agreement from Administrative
Agent as a condition to tenant’s obligations thereunder or otherwise.  A ground lease will not become an Approved
Lease unless such ground lease is approved in writing by Administrative
Agent.  The Existing Leases shall be
deemed to be Approved Leases.

 2
 

“Approved Lease Form” means the form of lease
approved in writing by Administrative Agent.

“Arranger” means
Banc of America Securities LLC, in its capacity as sole arranger and sole book
manager.

“Assignment and
Assumption” means an Assignment and Assumption substantially in the form of
Exhibit “K”.

“Assignment of Rents,
Leases and Receivables” means the Assignment of Rents, Leases and
Receivables dated of even date herewith encumbering the Property and
collaterally assigning to Administrative Agent for the benefit of Lenders a
first priority collateral assignment and security interest in all rents, room
revenues and other income and receivables from the Property.

“Base Rate” means,
on any day, a simple rate per annum equal to the Prime Rate for that day.  Without notice to Borrower or anyone else,
the Base Rate shall automatically fluctuate upward and downward as and in the
amount by which the Prime Rate fluctuates.

“Base Rate Principal”
means, at any time, the Principal Debt minus the portion, if any, of such
Principal Debt which is LIBOR Rate Principal and Letters of Credit which have
not been drawn.

“BBA LIBOR Daily Rate”
shall mean a fluctuating rate of interest per annum equal to the British
Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as
selected by Administrative Agent from time to time) as determined for each
Business Day at approximately 11:00 a.m. London time two (2) LIBOR Business
Days prior to the date in question, for U.S. Dollar deposits (for delivery on
the first day of such interest period) with a one month term, as adjusted from
time to time in Administrative Agent’s sole discretion for reserve
requirements, deposit insurance assessment rates and other regulatory
costs.  If such rate is not available at
such time for any reason, then the rate will be determined by such alternate
method as reasonably selected by Administrative Agent.

“Borrower” has the
meaning set forth in the introductory paragraph of this Agreement.

“Borrower’s NOI Affidavit” means an affidavit
signed by a duly authorized officer of Borrower stating that the NOI
performance levels required under this Agreement and/or the Guaranty have been
obtained, along with such documents and information as Administrative Agent may
reasonably require to substantiate the NOI performance levels reflected
therein.

“Budget” means the
budget and cost itemization for the Project attached as Exhibit “D”.

“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the
state where Administrative Agent’s Office is located.

“Cash
Collateralize” has the meaning set forth in Section 7 of Exhibit “J”.

 3
 

“Claims” means any
and all claims, demands, liabilities (including strict liability), losses,
damages (including consequential damages), causes of action, judgments,
penalties, fines, costs and expenses (including fees, costs and expenses of
attorneys, consultants, contractors, experts and laboratories incurred in good
faith), of any and every kind of character, contingent or otherwise, matured or
unmatured, known or unknown, foreseeable or unforeseeable.

“Closing Checklist”
means that certain Closing Requirements and Checklist setting forth the
conditions for closing the Loan and recording the Deed of Trust.

“Collateral Assignment”
means that certain Collateral Assignment and Subordination of Hotel Operating
Agreement dated of even date herewith executed by and among Administrative
Agent, Borrower and Kimpton.

“Commitment”
means, as to each Lender, its obligation (a) to advance its Pro Rata Share of
the Loan and (b) purchase participations in L/C Obligations in an aggregate
principal amount not exceeding the amount set forth opposite such Lender’s name
on the Schedule of Lenders at any one time outstanding, as such amount may be
reduced or adjusted from time to time in accordance with this Agreement.

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

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

“Condominium
Act” means the Texas
Uniform Condominium Act (Texas Property Code, Chapter 82 et seq.), as amended
from time to time.

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

“Condominium
Association Master” means M Central Master Condominium Association, Inc., a
Texas non-profit corporation,  created to
serve as the condominium owner’s association pursuant to the
requirements of the Condominium Act.

“Condominium
Association Residential” means M Central Residences Condominium
Association, Inc., a Texas non-profit corporation, created to serve as the
condominium owner’s association pursuant to the requirements of the Condominium
Act.

“Condominium By-laws”
means the By-laws which shall govern the Condominium Association, created
pursuant to the Condominium Act.

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

“Condominium Declaration
Master” means the Master Condominium Declaration for M Central Master
Condominium executed by Borrower as “Declarant” and recorded September 16,
2005, in Volume 2005182, Page 00111, Condominium Records of Dallas County,
Texas.

 4
 

“Condominium Declaration
Residential” means the Residential Condominium Declaration For M Central
Residences, A Condominium executed by Borrower as “Declarant” and recorded
September 16, 2005, in Volume 2005182, Page 00204, Condominium Records of
Dallas County, Texas

“Declarant” means
the Borrower in its capacity as Declarant under the Condominium Declaration.

“Debtor Relief Laws”
means the Bankruptcy Code of the United States of America, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Deed of Trust”
means the Deed of Trust, Security Agreement, Fixture Filing and Financing
Statement dated of even date with this Agreement, granted by the Borrower  to PRLAP, Inc. as Trustee, for Administrative Agent and
Lender’s benefit, encumbering Borrower’s fee estate in the Land and the
Improvements, securing repayment of the Indebtedness and Borrower’s performance
of its other obligations to Administrative Agent and Lenders under the Loan
Documents, as amended, modified, supplemented, restated and replaced from time
to time.

“Deemed Principal Balance” means, on any date,
the Aggregate Commitments less (a) any principal payments made on the Loan
prior to such date, and (b) the amount of any reduction in the Aggregate Commitments
agreed to in writing by Borrower and Administrative Agent.

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

“Defaulting Lender”
means a Lender that fails to pay its Pro Rata Share of a Payment Amount within
five (5) Business Days after notice from Administrative Agent, until such
Lender cures such failure as permitted in this Agreement.

“Defaulting Lender
Amount” means the Defaulting Lender’s Pro Rata Share of a Payment Amount.

“Defaulting Lender
Payment Amounts” means a Defaulting Lender Amount plus interest from the
date such Defaulting Lender Amount was funded by Administrative Agent and/or an
Electing Lender, as applicable, to the date such amount is repaid to
Administrative Agent and/or such Electing Lender, as applicable, at the rate
per annum applicable to such Defaulting Lender Amount under the Loan or
otherwise at the Base Rate.

“Dispute” means any controversy, claim or
dispute between or among the parties to this Agreement, including any such
controversy, claim or dispute arising out of or relating to (a) this
Agreement, (b) any other Loan Document, (c) any related agreements or
instruments, or (d) the transaction contemplated herein or therein
(including any claim based on or arising from an alleged personal injury or business
tort).

“Draw Request” has the meaning set forth in
Section 1 of Exhibit “F”.

 5
 

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

“Eligible Assignee” has the meaning set forth
in Section 6.5.

“Environmental Indemnity” means that certain
Environmental Indemnity Agreement dated of even date herewith and executed by
and among Borrower, Guarantor and Administrative Agent.

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

“Existing Leases” means, collectively, the
existing Leases between Borrower and the following Tenants: Chet N. Inc., a
Texas corporation d/b/a Lakeside Cleaners, Exhale Enterprises VIII, Inc., a
Delaware corporation d/b/a Exhale Mindbody Spa, Realty America Hospitality, LP,
a Texas limited partnership d/b/a Trader Vic’s, Brooke Berman Gallery, LLC, a
Texas limited liability company d/b/a Brooke Berman Gallery, and Brut, LLC, a
Texas limited liability company.

“Federal Funds Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upwards to the next higher 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by
Administrative Agent.

“FF&E” means
furniture, furnishings; hotel, restaurant and bar equipment and recreational
facilities, fixtures and other items of personalty related to the hotel
constituting a part of the Improvements having a useful life of more than three
years.

“Financial Statements”
means (i) for each reporting party other than an individual, a balance sheet,
income statement, statements of cash flow and amounts and sources of contingent
liabilities, a reconciliation of changes in equity and liquidity verification,
and unless Administrative Agent otherwise consents, consolidated and
consolidating statements if the reporting party is a holding company or a
parent of a subsidiary entity, each prepared in accordance with GAAP; and (ii)
for each reporting party who is an individual, a balance sheet, statements of
amount and sources of contingent liabilities, sources and uses of cash and
liquidity verification and, unless Administrative Agent otherwise consents,
Financial Statements for each entity owned or jointly owned by the reporting
party, each prepared in accordance with GAAP. 
For purposes of this definition and any covenant requiring the delivery
of Financial Statements, each party for whom Financial Statements are required
is a “reporting party” and a specified period to which the required Financial
Statements relate is a “reporting period”.

“Funding Date”
means the date on which an advance of Loan proceeds shall occur.

“GAAP” means generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public

 6
 

Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
in each case as the same are applicable to the circumstances as of the date of
determination.

“Guarantor” means
Behringer Harvard Short-Term Opportunity Fund I, LP.

“Guaranty” means
the Guaranty Agreement from Guarantor to Administrative Agent on behalf of
Lenders with regard to certain of Borrower’s obligations under the Loan
Documents.

“Improvements”
means (i) a 198 room hotel containing approximately 143,110 square feet of
space and all ancillary space and services and commonly referred to as the
Hotel Palomar, located in the Hotel Tower and being or being within the Hotel
Unit, (ii) seventeen (17) hotel rooms containing approximately 6,105 total
square feet of space, and being or being within the Hotel Room Units, (iii)
three (3) loft residence condominiums (“Lofts”) containing located above
portions of the Retail Unit, and being within the Residential Unit, (iv) one
(1) penthouse residence condominium (“Penthouse”) containing
approximately 5,400 total square feet of space located in the Hotel Tower, and
being within the Residential Unit, and (v) approximately 26,000 square feet of
rentable multi-tenant retail space leased or to be leased to tenants providing
retail goods and services to the public, and being in the Retail Unit; and all
on-site and off-site improvements on the Land, together with all
necessary furniture, fixtures and equipments, and appurtenances now or later to
be located on the Land and/or in such improvements.  Any initially capitalized term used herein
and not otherwise defined in the Loan Agreement shall have the meaning as
ascribed in the Condominium Declaration.

“Indebtedness”
means any and all indebtedness to Administrative Agent, L/C Issuer or Lenders
evidenced, governed or secured by, or arising under, any of the Loan Documents,
including the Loan, all Letters of Credit and any Swap Transaction.

“Indemnified
Liabilities” has the meaning set forth in Section 6.1.

“Indemnified Parties”
means (i) Administrative Agent on behalf of itself and the Lenders, and each
Lender; (ii) the Trustee(s) under the Deed of Trust (the “Trustee”);
(ii) any persons or entities owned or controlled by, owning or controlling, or
under common control or affiliated with Lender and/or Trustee; (iii) any
participants in the Loan; (iv) the directors, officers, partners, employees and
agents of Administrative Agent or any Lender and/or Trustee, and/or such
persons or entities; and (v) the heirs, personal representatives, successors
and assigns of each of the foregoing persons or entities.

“Interest Period” means
with respect to any LIBOR Rate Principal, the period commencing on the date
such LIBOR Rate Principal is disbursed or on the date on which the Principal
Debt or any portion thereof is converted into or continued as such LIBOR Rate
Principal, and ending on the date one (1), two (2), or three (3) months
thereafter, as elected by Borrower in the applicable Rate Election Notice;
provided that:

(i)            Each Interest Period
must commence on a LIBOR Business Day;

 7
 

(ii)           In the case of the
continuation of LIBOR Rate Principal, the Interest Period applicable after the
continuation of such LIBOR Rate Principal shall commence on the last day of the
preceding Interest Period;

(iii)          The last day for each Interest Period and the actual number of days during
the Interest Period shall be determined by Administrative Agent using the
practices of the London interbank eurodollar market; and

(iv)          No
Interest Period shall extend beyond the Maturity Date, and any Interest Period
which begins before the Maturity Date and would otherwise end after the
Maturity Date shall instead end on the Maturity Date.

“Kimpton” means
Kimpton Hotel & Restaurant Group, LLC, a Delaware limited liability
company.

“L/C Borrowing”
means an extension of credit resulting from a drawing under any Letter of
Credit which has not been reimbursed on the date when made or refinanced as a
Loan advance.

“L/C Credit Extension”
means, with respect to any Letter of Credit, the issuance thereof or extension
of the expiry date thereof, or the renewal or increase of the amount thereof.

“L/C Issuer” means
Bank of America, N.A. in its capacity as issuer of Letters of Credit hereunder
or any successor issuer of Letter of Credit hereunder.

“L/C Obligations”
means, as at any date of determination, the aggregate undrawn face amount of
all outstanding Letters of Credit plus the aggregate of all L/C
Borrowings.

“Land” means the
real property described in Exhibit “A”.

“Laws” means all
constitutions, treaties, statutes, laws, ordinances, regulations, rules,
orders, writs, injunctions, or decrees of the United States of America, any
state or commonwealth, any municipality, any foreign country, any territory or
possession, or any Tribunal.

“Leases” means all
present and future ground leases, space leases, subleases or other agreements
or arrangements, whether written or oral, and all agreements for the use or
occupancy of any portion of the Property, together with any and all extensions
or renewals of said leases and agreements and any and all future leases or
agreements upon or covering the use or occupancy of all or a part of the
Property.

“Leasing Commissions”
means leasing commissions, fees or similar compensation payable by
Borrower in connection with Approved Leases that either (i) have been
approved in writing by Administrative Agent, or (ii) are included in the
applicable line item of the Budget; provided, however, advances
of proceeds of the Loan for Leasing Commissions shall be subject to the
satisfaction of the requirements of Exhibit “F” hereof.

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

 8
 

“Lending Office”
means, as to any Lender, the office or offices of such Lender described as such
on the Schedule of Lenders, or such other office or offices as such
Lender may from time to time notify Borrower and Administrative Agent.

“Letter of Credit”
means any letter of credit issued hereunder.

“Letter of Credit
Application” means an application and agreement for the issuance or
amendment of a letter of credit in the form provided by and approved by
Administrative Agent.

“Letter of Credit
Expiration Date” means the day that is seven days prior to the Maturity
Date (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit
Sublimit” means an amount equal to $5,000,000.00.  The Letter of Credit Sublimit is part of, and
not in addition to, the combined Commitments.

“LIBOR
Business Day” means a Business Day which is also a London Banking Day.

“LIBOR Margin”
means one and seventy five one-hundreths percent (1.75%) per annum.

“LIBOR Rate” means
for any applicable Interest Period for any LIBOR Rate Principal, a simple rate
per annum equal to the sum of the LIBOR Margin plus the Adjusted LIBOR Rate.

“LIBOR Rate Election”
means an election by Borrower of an applicable LIBOR Rate in accordance with
this Agreement.

“LIBOR Rate Principal”  means any portion of the Principal Debt which
bears interest at an applicable LIBOR Rate at the time in question.

“Loan” means the
loan and Letters of Credit by Lenders to Borrower, in the maximum amount of
$42,000,000.00.

“Loan Documents”
means this Agreement (including all exhibits), the Deed of Trust, any Note, any
guaranty, financing statements, Assignment of Rents, Leases and Receivables,
the Environmental Indemnity, the Collateral Assignment, the Budget, each Draw
Request, any and all documents, instruments or agreements executed and
delivered to evidence, secure or in connection with all Letters of Credit, each
Master Agreement executed in connection with any Swap Transaction, and such other
documents evidencing, securing or pertaining to the Loan or any Swap
Transaction as shall, from time to time, be executed and/or delivered by
Borrower, Guarantor, or any other party to Administrative Agent or any Lender
pursuant to this Agreement or any Master Agreement, as they may be amended,
modified, restated, replaced and supplemented from time to time.

“London
Banking Day” means a day on which dealings in dollar deposits are conducted
by and between banks in the London interbank eurodollar market.

“Master
Agreement” is defined in the Deed of Trust.

“Material Adverse
Effect” means (a) a material adverse change in, or a material adverse
effect upon, the Project, or the operations, business, properties, liabilities
(actual or contingent),

 9
 

condition (financial or
otherwise) or prospects of the Borrower or the Borrower and its Subsidiaries
taken as a whole; or (b) the business or financial ability of Borrower or
Guarantor to fulfill any material obligation under the Loan Documents is
materially impaired; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any party to the Loan
Documents of any Loan Document to which it is a party.

“Maturity Date”
means September       2010, as it may be earlier
terminated or extended in accordance with the terms hereof.

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

“NOI” means, for any period, the amount, if
any, by which the Revenues for such period exceeds the Adjusted Expenses for
such period.

“Note[s]” means
the Deed of Trust Notes executed by Borrower and payable to the order of each
Lender in the amount of each Lender’s Commitment and collectively in the
maximum principal amount of the Loan, substantially in the form of Exhibit “L”,
as amended, modified, replaced, restated, extended or renewed from time to
time.

“Obligations”
means all liabilities, obligations, covenants and duties of, any party to a
Loan Document arising under or otherwise with respect to any Loan Document,
whether direct or indirect (including those acquired by assumption), absolute
or contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrues after the commencement by or against
any party to a Loan Document or any Affiliate thereof of any proceeding under
any Debtor Relief Laws naming such person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceedings.

“On” or “on”,
when used with respect to the Property or any property adjacent to the
Property, means “on, in, under, above or about”.

“Payment Amount”
means an advance of the Loan, an unreimbursed Administrative Agent Advance, an
unreimbursed Indemnified Liability, a reimbursement to L/C Issuer for an
unreimbursed drawing under a Letter of Credit, or any other amount that a
Lender is required to fund under this Agreement.

“Potential Default”
means any condition or event which with the giving of notice or lapse of time
or both would, unless cured or waived, become a Default.

“Pre-Qualification Letter” means a letter from
a reputable financial institution confirming that a Unit Purchaser has “pre-qualified”
for a mortgage loan in an amount sufficient to cover the purchase price for the
applicable Residential Unit (after taking into account any Earnest Money
Deposit received from such Unit Purchaser).

“Prime Rate”
means, on any day, the rate of interest per annum then most recently
established by Administrative Agent as its “prime rate,” it being understood
and agreed that such

 10
 

rate is set by
Administrative Agent as a general reference rate of interest, taking into
account such factors as Administrative Agent may deem appropriate, that it is
not necessarily the lowest or best rate actually charged to any customer or a
favored rate, that it may not correspond with future increases or decreases in
interest rates charged by other lenders or market rates in general, and that
Administrative Agent may make various business or other loans at rates of
interest having no relationship to such rate. 
If Administrative Agent (including any subsequent Administrative Agent)
ceases to exist or to establish or publish a prime rate from which the Prime
Rate is then determined, the applicable variable rate from which the Prime Rate
is determined thereafter shall be instead the prime rate reported in The
Wall Street Journal (or the average prime rate if a high and a low prime
rate are therein reported), and the Prime Rate shall change without notice with
each change in such prime rate as of the date such change is reported.

“Principal Debt”
means the aggregate unpaid principal balance of this Loan at the time in
question.

“Pro Rata Share”
means, with respect to each Lender at any time, a fraction expressed as a
percentage,  the numerator of which is
the amount of the Commitment of such Lender at such time and the denominator of
which is the amount of the Aggregate Commitments at such time or, if the
Aggregate Commitments have been terminated, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the total outstanding amount of all Indebtedness held by such Lender at such
time (taking into account funded participations in L/C Obligations) and the
denominator of which is the total outstanding amount of all Indebtedness at
such time.  The initial Pro Rata Share of
each Lender named on the signature pages hereto is set forth opposite the name
of that Lender on the Schedule of Lenders.

“Project” means
the Improvements, the leasing and operation of the Improvements and the sale
and operations of the Units in the Improvements.

“Property” means
the Land, the Improvements and all other property constituting the “Mortgaged
Property,” as described in the Deed of Trust, or subject to a right, lien or
security interest to secure the Loan pursuant to any other Loan Document,
provided however, the term Property shall not include those Residential Units
sold by Borrower to Unit Purchasers with respect to which Administrative Agent
has released the lien of the Deed of Trust.

“Qualified Unit Purchaser” means any Unit
Purchaser for whom (i) Administrative Agent has received such financial
information as Administrative Agent may require regarding such person or entity
to evidence that such person or entity has the financial capacity and
creditworthiness to purchase the Residential Unit covered by the applicable
Unit Sales Contract and to pay the purchase price thereunder; or (ii)
Administrative Agent has received a copy of a Pre-Qualification Letter.

“Qualifying Unit Sales Contract” means each
Unit Sales Contract entered into by Borrower and a Qualified Unit Purchaser on
the Approved Unit Sales Contract Form with no material changes, which provides
for the payment at closing in cash of a purchase price sufficient in amount so
that the Net Sales Proceeds will be equal to at least the Release Price, and
which requires the Qualified Unit Purchaser to deposit into escrow, at the time
of execution of such Unit Sale Contract, an Earnest Money Deposit equal to at
least three percent (3%) of the purchase price.

 11
 

“Release Date”
means the earlier of the following two dates: (i) the date on which the
indebtedness and obligations secured by the Deed of Trust have been paid and
performed in full and the Deed of Trust has been released; or (ii) the date on
which the lien of the Deed of Trust is fully and finally foreclosed or a
conveyance by deed in lieu of such foreclosure is fully and finally effective
and possession of the Property has been given to and accepted by the purchaser
or grantee free of occupancy and claims to occupancy by Borrower and their
heirs, devisees, representatives, successors and assigns; provided that, if
such payment, performance, release, foreclosure or conveyance is challenged, in
bankruptcy proceedings or otherwise, the Release Date shall be deemed not to
have occurred until such challenge is validly released, dismissed with prejudice
or otherwise barred by law from further assertion.

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

	
  Residential Unit

  	
   

  	
  Minimum Release Price

  	
   

  
	
  Unit/Loft 205

  	
   

  	
  $

  	
  305,500

  	
   

  
	
  Unit/Loft 201

  	
   

  	
  $

  	
  497,260

  	
   

  
	
  Unit/Loft 304

  	
   

  	
  $

  	
  446,500

  	
   

  
	
  Penthouse (Unit/Loft
  900)

  	
   

  	
  $

  	
  2,632,000

  	
   

  

 

“Residential Units” shall
mean those certain Units created by the Condominium Declaration
Residential and being the following Residences designated in Exhibit C to the
Condominium Declaration Residential: 
Loft 201, Loft 205, Loft 304 and the Penthouse in the Hotel Tower, which
are more particularly described in the Residential Map (as defined in the
Condominium Declaration Residential), referred to herein individually as a “Residential
Unit”.

“Required Lenders”
means as of any date of determination at least two Lenders having at least
66-2/3% of the Aggregate Commitments or, if the Aggregate Commitments have been
terminated, at least two Lenders holding in the aggregate at least 66-2/3%  of the total outstanding amount of all Indebtedness (taking
into account funded participations in L/C Obligations); provided that
the Commitment of, and the portion of the total outstanding amount of all
Indebtedness (taking into account
funded participations in L/C Obligations) held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

“Retail Space”
means the retail space within the Retail Unit.

“Revenues”
means all recurring income, rents, room rates, issues, profits and revenues
from the operation of the Property, including, without limitation, all revenues
and credit card receipts collected from guest rooms, restaurants, bars,
mini-bars, meeting rooms, banquet rooms and recreational facilities and
otherwise, concession fees and rentals arising from or relating to the
Property.

“Schedule of Lenders”
means the schedule of Lenders party to this Agreement as set forth on Exhibit
“M”, as it may be modified from time to time in accordance with this
Agreement.

 12
 

“Subsidiary” means
a corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries.

“Survey” means a
survey prepared in accordance with Exhibit “G” or as otherwise approved
by Administrative Agent in its good faith business judgment.

“Swap
Transaction” has the meaning set forth in the Deed of Trust.

“Target Monthly
Amortization” as used in this Agreement means, for any period, the
hypothetical monthly payment of principal and interest which would be required
for each month during such period if the Deemed Principal Balance was amortized
in level payments of principal and interest over a thirty (30) year period at
an interest rate per annum equal to the greater of (i) 6.5% per annum, or (ii)
1.75% plus the Treasury Rate.

“Tenant” means any tenant or lessee of the any
retail Space under an Approved Lease.

“Tenant Improvements” means tenant improvements
required to be constructed or paid for by Borrower by an Approved Lease.

“Title Company”
means LandAmerica Partners Title Company as agent for Lawyers Title Insurance
Company.

“Title Insurance”
means the loan policy or policies of title insurance issued to Administrative
Agent for the benefit of Lenders by the Title Company, in an amount equal to
the maximum principal amount of the Loan, insuring the validity and priority of
the Deed of Trust encumbering the Land and Improvements for the benefit of
Administrative Agent and Lenders.

“Treasury Rate” means the rate of interest per
annum on U.S. Treasury Notes having a maturity of ten years as shown in the
10-year listing in the “this week” column under the heading “Treasury Constant
Maturities,” of the FEDERAL RESERVE statistical release FORM H-15 which, as of
the date that is 10 days prior to the end of the applicable period, has been
most recently published (or, if for any reason that published rate is not
available, another rate determined by Administrative Agent to be comparable, in
its discretion reasonably exercised, shall be used for this purpose).

“Tribunal” means
any state, commonwealth, federal, foreign, territorial or other court or
governmental department, commission, board, bureau, district, authority,
agency, central bank, or instrumentality, or any arbitration authority.

“Unit” means the
following condominium units created by the Condominium Declaration and owned by
Borrower as of the date of this Agreement: Hotel Unit, Retail Unit, Hotel Room
Units and the Residential Units.

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

 13
 

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

2.             FINANCIAL
STATEMENTS:

Borrower shall provide or cause to be provided to
Administrative Agent with a copy for each Lender all of the following:

(a)           Audited Financial
Statements of Borrower, for each fiscal year of Borrower, as soon as reasonably
practicable and in any event within one hundred twenty (120) days after the
close of each fiscal year.

(b)           For each calendar month
(and for the fiscal year through the end of that month) a statement of all
income and expenses in connection with the Property, certified in writing as
true and correct by an authorized representative of Borrower satisfactory to
Administrative Agent, within forty-five (45) days after the end of such
calendar month.  Items provided under
this paragraph shall be in form and detail satisfactory to Administrative
Agent.

(c)           For the two calendar
months prior to the original Maturity Date, a Borrower’s NOI Affidavit setting
forth the NOI for the Property immediately preceding 6 calendar months, within
twenty-one days after the end of each of the two preceding calendar months.

(d)           If the original
Maturity Date is extended, then for the two calendar months prior to the first
extended Maturity Date, a Borrower’s NOI Affidavit setting forth the NOI for
the Property immediately preceding 12 calendar months, within twenty-one days
after the end of each the two preceding calendar months.

(e)           The Financial
Statements and Compliance Certificate (as defined in the Guaranty) in
accordance with the requirements of, and within the time periods required by,
Section 18 of the Guaranty.

(f)            On or before the first
calendar month following the execution of the first Unit Sales Contract and
thereafter as requested by Administrative Agent (i) a current status report
regarding Residential Unit sales (including the names of prospective
purchasers, Unit Sale Contracts currently under negotiation and out for
signature, and with respect to each such Unit Sale Contract, the proposed sales
price, Residential Unit type, estimated closing date, and financial information
regarding the proposed purchaser, to the extent available); (ii) copies of all
Unit Sale Contracts executed during the period since the last such report and
not previously delivered to Administrative Agent; and (iii) a statement of the
total of all Earnest Money Deposits received from each Unit Purchaser and
deposited with Escrow Agent.

(g)           From time to time promptly
after Administrative Agent’s request, such additional information, reports and
statements respecting the Property and the Improvements, or the business
operations and financial condition of each reporting party, as Administrative
Agent may reasonably request.

All
Financial Statements shall be in form and detail satisfactory to Administrative
Agent and shall contain or be attached to the signed and dated written
certification of the reporting party in form specified by Administrative Agent
to certify that the Financial Statements are furnished to

 14
 

Administrative
Agent in connection with the extension of credit by Lenders and constitute a
true and correct statement of the reporting party’s financial position;
provided, however, Administrative Agent agrees that the Financial Statements of
Borrower and Guarantor delivered to Administrative Agent in satisfaction of the
requirements of Exhibit “C” hereto are satisfactory as to form, detail
and accounting principles used therein and Financial Statements to be provided
in satisfaction of the requirements of this Agreement and the other loan
documents shall be satisfactory to Administrative Agent as to form, detail and
accounting principles if consistent with such Financial Statements.  All certifications and signatures on behalf
of corporations, partnerships or other entities shall be by a representative of
the reporting party satisfactory to Administrative Agent.  All fiscal year-end Financial
Statements of Guarantor shall be audited, without any qualification or
exception not acceptable to Administrative Agent, by independent certified
public accountants acceptable to Administrative Agent, and shall contain all
reports and disclosures required by generally accepted accounting principles
for a fair presentation and all quarterly Financial Statements of Guarantor
shall be certified, without any qualification or exception not acceptable to
Administrative Agent in its good faith business judgment, by a duly authorized
officer of Borrower or the general partner of Borrower.  All fiscal year-end Financial
Statements of  Borrower shall be
certified, without any qualification or exception not acceptable to
Administrative Agent in its good faith business judgment, by a duly authorized
officer of Borrower or the general partner of Borrower, and shall contain all
reports and disclosures required by generally accepted accounting principles
for a fair presentation.

 15

EXHIBIT
“C”

CONDITIONS PRECEDENT TO THE FIRST
ADVANCE

As conditions precedent to the first advance of Loan
proceeds, if and to the extent required by Administrative Agent, Administrative
Agent shall have received and approved the following:

1.             Fees and Expenses.  Any and all required commitment and other
fees and expenses (including the fees and costs of Administrative Agent’s
counsel) then required to be paid pursuant to the Fee Agreement, this Agreement
and all other Loan Documents, including, without limitation, all fees, costs
and expenses that Borrower is required to pay pursuant to any loan application
or commitment.

2.             Financial
Statements.  The Financial Statements
of Borrower and Guarantor or any other party required by Administrative Agent.

3.             Appraisal.  A market value appraisal of the Property made
within one hundred eighty (180) days prior to the date of this Agreement.  The appraiser and appraisal must be
satisfactory to Administrative Agent (including satisfaction of applicable
regulatory requirements) and the appraiser must be engaged directly by
Administrative Agent.

4.             Draw Schedule and
Budget.  Borrower’s proposed cash
flow and draw schedule.

5.             Authorization.  Evidence of the existence, good standing,
authority and capacity of Borrower, Guarantor, and their respective general
partners to execute, deliver and perform their respective obligations to
Administrative Agent and Lenders under the Loan Documents, including:

(a)           For each partnership
(including a joint venture or limited partnership):  (i) a true and complete copy of an executed
partnership agreement or limited partnership agreement, and all amendments
thereto; (ii) for each limited partnership, a copy of the certificate of
limited partnership and all amendments thereto accompanied by a certificate
issued by the appropriate governmental official of the jurisdiction of
formation that the copy is true and complete, and evidence of Borrower’s and
Borrower’s general partner of the registration or qualification to do business
in the state where Borrower’s and Borrower’s general partner’s principal place
of business is located and the state where the Project is located, and (iii) a
partnership certificate certifying who will be authorized to execute or attest
any of the Loan Documents, and a true and complete copy of  all necessary resolutions approving the Loan
Documents and authorizing the transactions contemplated in this Agreement and
the other Loan Documents.

(b)           For each
corporation:  (i) a true and complete
copy of its articles of incorporation and by-laws, and all amendments
thereto, a certificate of incumbency of all of its officers who are authorized
to execute or attest to any of the Loan Documents, and a true and complete copy
of resolutions approving the Loan Documents and authorizing the transactions
contemplated in this Agreement and the other Loan Documents and evidence of
Borrower’s and Borrower’s general partner of the registration or qualification
to do business in the state where Borrower’s and Borrower’s general partner’s
principal place of business is located and the state where the Project is
located; and (ii) certificates of existence, good standing and qualification to
do business issued by the appropriate governmental officials in the state of
its formation and the State of California.

 1
 

(c)           For each limited
liability company or limited liability partnership:  (i) a true and complete copy of the articles
of organization and operating agreement, and all amendments thereto, a
certificate of incumbency of all of its members, managers or officers, as
applicable, who are authorized to execute or attest to any of the Loan
Documents, and a true and complete copy of resolutions approving the Loan
Documents and authorizing the transactions contemplated in this Agreement and
the other Loan Documents and evidence of Borrower’s and Borrower’s general
partner of the registration or qualification to do business in the state where
Borrower’s and Borrower’s general partner’s principal place of business is
located and the state where the Project is located; and (ii) certificates of
existence, good standing and qualification to do business issued by appropriate
governmental officials in the state of its formation and, if different, the
state in which the Property is located.

(d)           For each entity or
organization that is not a corporation, partnership, limited partnership, joint
venture, limited liability company or limited liability partnership, a copy of
each document creating it or governing the existence, operation, power or
authority of it or its representatives.

(e)           All certificates,
resolutions, and consents required by Administrative Agent applicable to the
foregoing.

6.             Loan Documents.  From Borrower, Guarantor and each other party
to the Loan Documents duly executed, acknowledged and/or sworn to as required,
and delivered to Administrative Agent (with a copy for each Lender) Loan
Documents dated the date of this Agreement, each in form and content
satisfactory to Administrative Agent, and evidence that the Deed of Trust has
been recorded in the official records of the city or county in which the
Property is located and UCC-1 financing statements have been filed in all
filing offices that Administrative Agent may require.

7.             Opinions.  The written opinion of counsel satisfactory
to Administrative Agent for the Borrower and Guarantor addressed to
Administrative Agent for the benefit of Lenders, dated the date of this
Agreement.

8.             Survey; No Special
Flood Hazard.  (a) two (2)  prints of an original survey (with a copy for
each Lender) of the Land and improvements thereon dated not more than sixty
(60) days prior to the date of this Agreement (or dated such earlier date, if
any, as is satisfactory to the Title Company, but in any event not more than
one hundred eighty (180) days prior to the date of this Agreement) satisfactory
to Administrative Agent and the Title Company and otherwise, to the extent
required by Administrative Agent in its good faith business judgment, complying
with Exhibit “G”, and (b) a flood insurance policy (with a copy for each
Lender) in an amount equal to the lesser of the maximum Loan amount or the
maximum amount of flood insurance available under the Flood Disaster Protection
Act of 1973, as amended, and otherwise in compliance with the requirements of
the Loan Documents, or evidence satisfactory to Administrative Agent that none
of the Land is located in a flood hazard area.

9.             Title Insurance.  An ALTA title insurance policy (or a title
insurance policy promulgated by the laws of the state in which the Property is
located if an ALTA insurance policy is not available), issued by the Title
Company (which shall be approved by Administrative Agent in its good faith
business judgment) in the maximum amount of the Loan, on a coinsurance and/or

 2
 

reinsurance basis if and
as required by Administrative Agent, insuring without exclusion or exception
for creditors’ rights that the Deed of Trust constitutes a valid lien covering
the Land and all Improvements thereon, having the priority required by
Administrative Agent and subject only to those exceptions and encumbrances
(regardless of rank or priority) Administrative Agent approves, in a form
acceptable to Administrative Agent, and with all “standard” exceptions which
can be deleted, including the exception for matters which a current survey
would show, deleted to the fullest extent authorized under applicable title
insurance rules, and Borrower shall satisfy all requirements for the issuance
of such policy; containing no exception for standby fees or real estate taxes
or assessments other than those for the year in which the closing occurs to the
extent the same are not then due and payable and endorsed “not yet due and
payable” and no exception for subsequent assessments for prior years; providing
full coverage against mechanics’ and materialmens’ liens to the extent
authorized under applicable title insurance rules, and Borrower shall satisfy
all requirements therefor; insuring that no restrictive covenants shown in the
Title Insurance have been violated (or that such restrictive are unenforceable
as a matter of Law or, with respect to the restriction on sale of alcoholic
beverages, are endorsed over the Title Company pursuant to an endorsement
approved by Administrative Agent), and that no violation of the restrictions
will result in a reversion or forfeiture of title; insuring all appurtenant
easements; insuring that Borrower’s fee estate in the Land and the Improvements
is marketable, vested in Borrower; containing such affirmative coverage and
endorsements as Administrative Agent may require and are available under
applicable title insurance rules, and Borrower shall satisfy all requirements
therefor; insuring any easements, leasehold estates or other matters
appurtenant to or benefiting the Land and/or the Improvements as part of the
insured estate; insuring the right of access to the Land to the extent
authorized under applicable title insurance rules, and Borrower shall satisfy
all requirements therefor; and containing provisions acceptable to
Administrative Agent in its good faith business judgment regarding advances
and/or readvances of Loan funds after closing. 
Borrower and Borrower’s counsel shall not have any interest, direct or
indirect, in the Title Company (or its agent) or any portion of the premium
paid for the Title Insurance.

10.           Plans.  One (1) true and correct copies of all
existing “as-built” plans for the Improvements (including the site plan).

11.           Contracts.  (a) a list containing the names and addresses
of all existing contracts, the parties thereto, their respective contract
amounts, and a copy of their contracts; (b) the Hotel Operating Agreement and
all amendments thereto and (c) collateral assignments and subordinations of the
Hotel Agreements satisfactory to Administrative Agent in its good faith
business judgment subordinating all rights, liens, claims and charges operator
may have or acquire against Borrower or the Property to the rights, liens and
security interests of Lenders.

12.           Insurance Policies.  The insurance policies initially required by
Administrative Agent, pursuant to the Loan Documents, together with evidence
satisfactory to Administrative Agent that all premiums therefor have been paid
for a period of not less than one (1) year from the date of this Agreement and
that the policies are in full force and effect.

13.           Environmental
Compliance/Report.  Evidence
satisfactory to Administrative Agent that no portion of the Land is “wetlands”
under any applicable Law and that the Land does not contain and is not within
or near any area designated as a hazardous waste site by any Tribunal, that
neither the Property nor any adjoining property contains or has ever contained
any substance classified as hazardous or toxic (or otherwise regulated, such
as, without limitation, asbestos, radon

 3
 

and/or petroleum products)
under any Law or governmental requirement pertaining to health or the
environment, and that neither the Property nor any use or activity thereon
violates or is or could be subject to any response, remediation, clean-up
or other obligation under any Law or governmental requirement pertaining to
health or the environment including without limitation, a written report of an
environmental assessment of the Property, made within twelve (12) months prior
to the date of this Agreement, by an engineering firm, and of a scope and in
form and content satisfactory to Administrative Agent, complying with
Administrative Agent’s established guidelines, showing that there is no
evidence of any such substance which has been generated, treated, stored,
released or disposed of in the Property, and such additional evidence as may be
required by Administrative Agent.  All
reports, drafts of reports, and recommendations, whether written or oral, from
such engineering firm shall be made available and communicated to Administrative
Agent.

14.           Access, Utilities,
and Laws.  (a) evidence satisfactory
to Administrative Agent in its good faith business judgment that the Property
abuts and has fully adequate direct and free access to one or more public
streets, dedicated to public use, fully installed and accepted by the
appropriate Tribunal, that all fees, costs and expenses of the installation and
acceptance thereof have been paid in full, and that there are no restrictions
on the use and enjoyment of such streets which would materially adversely
affect the Project; (b) evidence satisfactory to Administrative Agent that all
applicable zoning ordinances, restrictive covenants and governmental
requirements affecting the Property permit the use for which the Property is
intended and have been complied with without the existence of any variance,
non-complying use, nonconforming use or other special exception; (c) evidence
satisfactory to Administrative Agent that the Land and Improvements comply with
all Laws and governmental requirements regarding subdivision and platting and
would so comply if the Land and the Improvements thereon were conveyed as a
separate parcel; and (d) evidence satisfactory to Administrative Agent of
compliance by Borrower and the Property, and the use and occupancy of the
Improvements, with such other applicable Laws and governmental requirements as
Administrative Agent may request, including all Laws and governmental
requirements regarding access and facilities for handicapped or disabled
persons including, without limitation and to the extent applicable, The Federal
Architectural Barriers Act (42 U.S.C. § 4151 et seq.), The Fair Housing
Amendments Act of 1988 (42 U.S.C. § 3601 et seq.), The Americans With
Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.), The Rehabilitation Act of
1973 (29 U.S.C. § 794), and any applicable state requirements.

16.           Priority.  (a) evidence satisfactory to Administrative
Agent in its good faith business judgment that prior to and as of the time the
Deed of Trust was filed for record (i) no activity or circumstance was visible
on or near the Land which would constitute inception of a mechanic’s or
materialman’s lien against the Property; (ii) no contract, or memorandum
thereof, for construction, design, surveying, or any other service relating to
the Project has been filed for record in the county where the Property is
located; and (iii) no mechanic’s or materialman’s lien claim or notice, lis
pendens, judgment, or other claim or encumbrance against the Property has been
filed for record in the county where the Property is located or in any other
public record which by Law provides notice of claims or encumbrances regarding
the Property; (b) a certificate or certificates of a reporting service
acceptable to Administrative Agent, reflecting the results of searches made not
earlier than ten (10) days prior to the date of this Agreement, (i) of the
central and local Uniform Commercial Code records, showing no filings against
any of the collateral for the Loan or against Borrower otherwise except as
consented to by Administrative Agent or that will be released contemporaneously
with the execution and delivery of this Agreement; and (ii) if required by

 4
 

Administrative Agent, of
the appropriate judgment and tax lien records, showing no outstanding judgment
or tax lien against Borrower or Guarantor.

17.           Tax and Standby Fee
Certificates.  Evidence satisfactory
to Administrative Agent in its good faith business judgment (a) of the identity
of all taxing authorities and utility districts (or similar authorities) having
jurisdiction over the Property or any portion thereof; (b) that all taxes,
standby fees and any other similar charges currently due and payable have been
paid, including, if available, copies of receipts or statements marked “paid” by
the appropriate authority; and (c) that the Land is a separate tax lot or lots
with separate assessment or assessments of the Land and Improvements,
independent of any other land or improvements and that the Land is a separate
legally subdivided parcel.

18.           Other Documents.  Such other documents and certificates as
Administrative Agent may reasonably request from Borrower, any Guarantor, and
any other person or entity, in form and content satisfactory to Administrative
Agent.

19.           Up-Front Equity.  Evidence satisfactory to Administrative Agent
that the Up-Front Equity has been fully paid and funded.

20.           Borrower
Identification Due Diligence.  All
due diligence materials deemed necessary by Administrative Agent and each
Lender with respect to verifying Borrower’s identity and background information
in a manner satisfactory to Administrative Agent and each Lender.

21.           Liquor Licenses.  Evidence satisfactory to Administrative Agent
that the applicable Law permits the liquor licenses relating to the Property
and the execution of an agreement by Borrower and the holder of the liquor
license agreeing, following a foreclosure, or the acceptance of a deed-in-lieu
of foreclosure, to cooperate with Administrative Agent or Administrative Agent’s
designee to continue operating all facilities requiring a liquor license until
such time as the liquor license is transferred to Administrative Agent or
Administrative Agent’s designee.

22.           Leases.  Administrative Agent shall have received (i)
copies all executed Leases, if any, and to the extent that such Leases require
the approval of Administrative Agent, Administrative Agent shall have given
such approval to such Leases, (ii) at Administrative Agent’s election,
satisfactory estoppel letters from the Tenants under the Leases, (iii) with
respect to those Leases for which Administrative Agent requires a
subordination, non-disturbance and attornment agreement, Administrative Agent
shall have received such agreement in form and substance satisfactory to
Administrative Agent, and (iv) to the extent required by Administrative Agent,
financial information regarding Tenants.

23.           Evidence of
Completion.  Certificates from
Borrower’s architect, contractor certifying that the Improvements (including
any off-site improvements) have been completed in substantial accordance
with, and as completed comply with, the plans for the Improvements and all Laws
and governmental requirements.

24.           Final
Affidavits/Lien Releases.  To the
extent requested by Lender, final Affidavits (in a form approved by Administrative
Agent in its good faith business judgment) from each of Borrower’s architect
and contractors certifying that each of them and their subcontractors,
laborers, and materialmen has been paid in full for all labor and materials for
construction of the Improvements; and final lien releases or waivers (in a form
approved by Administrative Agent) by

 5
 

Borrower’s architect,
contractor, and all subcontractors, materialmen, and other parties who have
supplied labor, materials, or services for the construction of the Improvements
or who otherwise might be entitled to claim a contractual, statutory or
constitutional lien against the Property; provided, however, to the extent
Borrower is contesting a lien filed by any such party in accordance with the
requirements of Section 2.10 of this Agreement, a final affidavit and
lien release from such party shall not be required under this paragraph (b).

25.           Compliance with Laws.  Evidence satisfactory to Administrative Agent
in its good faith business judgment that all Laws and governmental requirements
have been satisfied, including receipt by Borrower of all necessary
governmental licenses, certificates and permits (including certificates of
occupancy or their legal equivalent) with respect to the completion, use, occupancy
and operation of the Improvements have been issued, together with evidence
satisfactory to Administrative Agent in its good faith business judgment that
all such licenses, certificates, and permits are in full force and effect and
have not been revoked, canceled or modified.

 6

EXHIBIT
“D”

BUDGET

	
  LINE ITEMS

  	
   

  	
  Total Costs

  	
   

  	
  BAC Loan 

  Uses

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LAND

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land Acquisition w/
  building shell and garage

  	
   

  	
  12,141,530.00

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB-TOTAL LAND

  	
   

  	
  12,141,530.00

  	
   

  	
  —

  	
   

  
	
  HARD COSTS

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction hard cost
  vertical

  	
   

  	
  22,788,451.00

  	
   

  	
  4,148,665.00

  	
   

  
	
  Construction Retainage/
  balance to complete

  	
   

  	
  2,107,000.00

  	
   

  	
  2,107,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hard Costs Contingency

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB-TOTAL HARD COSTS

  	
   

  	
  24,895,451.00

  	
   

  	
  6,255,665.00

  	
   

  
	
  SOFT COSTS

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Architectural /
  Engineering

  	
   

  	
  1,733,625.00

  	
   

  	
   

  	
   

  
	
  Survey and consulting

  	
   

  	
  282,949.00

  	
   

  	
   

  	
   

  
	
  Legal

  	
   

  	
  105,463.00

  	
   

  	
   

  	
   

  
	
  Real Estate Taxes

  	
   

  	
  592,771.00

  	
   

  	
   

  	
   

  
	
  Permits - other

  	
   

  	
  323,764.00

  	
   

  	
   

  	
   

  
	
  Marketing and
  commissions

  	
   

  	
  371,889.00

  	
   

  	
   

  	
   

  
	
  Equipment

  	
   

  	
  8,132,274.00

  	
   

  	
   

  	
   

  
	
  Technical Svcs

  	
   

  	
  350,000.00

  	
   

  	
   

  	
   

  
	
  Asset Mgt Fee

  	
   

  	
  363,945.00

  	
   

  	
   

  	
   

  
	
  Other Soft Costs

  	
   

  	
  265,497.00

  	
   

  	
   

  	
   

  
	
  Closing / Title /
  Recording

  	
   

  	
  380,477.00

  	
   

  	
   

  	
   

  
	
  Lender’s Loan Fee

  	
   

  	
  1,012,410.00

  	
   

  	
   

  	
   

  
	
  Marketing loan 2

  	
   

  	
  400,000.00

  	
   

  	
  400,000.00

  	
   

  
	
  Closing Loan 2

  	
   

  	
  210,000.00

  	
   

  	
  210,000.00

  	
   

  
	
  TI Leasing

  	
   

  	
  265,000.00

  	
   

  	
  265,000.00

  	
   

  
	
  Refi ANB Loan Hotel

  	
   

  	
   

  	
   

  	
  34,015,625.00

  	
   

  
	
  Loan fee 2 BAC @ 50 bps

  	
   

  	
  210,000.00

  	
   

  	
  210,000.00

  	
   

  
	
  Fees

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Developer’s Fee

  	
   

  	
  914,779.00

  	
   

  	
   

  	
   

  
	
  Interest Reserve

  	
   

  	
  5,007,531.00

  	
   

  	
  643,710.00

  	
   

  
	
  Operating Deficit

  	
   

  	
   

  	
  x

  	
   

  	
   

  
	
  Soft Cost Contingency

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB-TOTAL SOFT COSTS

  	
   

  	
  20,922,374.00

  	
   

  	
  35,744,335.00

  	
   

  
	
  TOTAL
  BUDGET

  	
   

  	
  57,959,355.00

  	
   

  	
  42,000,000.00

  	
   

  
	
  EQUITY / OTHER SOURCES OF FUNDS

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Upfront Equity - land
  & shell bldg, garage

  	
   

  	
  12,141,530.00

  	
   

  	
   

  	
   

  
	
  Upfront Equity -
  contribution to costs

  	
   

  	
  3,817,825.00

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUB-TOTAL EQUITY/OTHER
  SOURCES OF FUNDS

  	
   

  	
  15,959,355.00

  	
   

  	
   

  	
   

  
	
  LOAN PROCEEDS

  	
   

  	
  42,000,000.00

  	
   

  	
   

  	
   

  

 

 1

EXHIBIT
“E”

RESERVED

[see
attached]

 1

EXHIBIT
“F”

ADVANCES

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

2.             Advances.  Borrower shall disburse all advances made to
Borrower, for payments of the costs and expenses specified in the Budget for
which the advances were made, and for no other

 1
 

purpose.  Following receipt and approval of a Draw
Request, all supporting documentation and information required by
Administrative Agent in its good faith business judgment, Administrative Agent
will determine the amount of the advance Lenders shall make in accordance with
this Agreement, the Loan Documents, the Budget, and if and to the extent
required by the Administrative Agent, to Administrative Agent’s satisfaction in
its good faith business judgment, the following standards:

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

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

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

ii.             A Draw Request.

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

iv.            Evidence satisfactory
to Administrative Agent in its good faith business judgment that the
representations and warranties made in the Loan Documents are true and correct
on and as of the date of each advance and no event shall have occurred or
condition or circumstance shall exist which, if known to Borrower, would render
any such representation or warranty incorrect in any material respect.

v.             Evidence satisfactory
to Administrative Agent in its good faith business judgment that no mechanic’s
or materialmen’s lien or other encumbrance has been filed and remains in effect
against the Property (except for liens or encumbrances that are being contested
in accordance with Section 2.10 of this Agreement), no stop notices
shall have been served on Lenders that have not been bonded by Borrower in a
manner and amount satisfactory to Administrative Agent, and releases or waivers
of mechanics’ liens and receipted bills showing payment of all amounts due to
all parties who have furnished materials or services or performed labor of any
kind in connection with the Property.

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

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

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

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

5.             Conditions
to Particular Advances of the Loan. 
Administrative Agent and Borrower hereby further agree as follows:

(a)           Leasing
Commissions. Advances for the payment of Leasing Commissions in respect of
Approved Leases shall be made upon the following terms and conditions: (i)
Borrower shall have submitted to Administrative Agent the agreement with the
broker, consultant or finder with respect to the Leasing Commission and
Administrative Agent shall have confirmed that the amount of the advance to be
used by Borrower to pay the Leasing Commission is in accordance with such
agreement and is not greater than 6% of the annual base rent payable during the
initial term of such Approved Lease; (ii) one-half (1⁄2) of the Leasing
Commission payable with respect to an Approved Lease shall be advanced when
Borrower shall have delivered to Administrative Agent an executed Approved
Lease with respect to which the advance is sought, and the remaining one-half
(1⁄2) shall be advanced when the tenant shall have occupied the space covered by
the Approved Lease and paid the rent then due, if any; and (iii) if requested
by Administrative Agent, Borrower shall have delivered to Administrative Agent
an estoppel certificate executed by such broker, consultant, or finder stating
that such Leasing Commission represents the total compensation due such broker,
consultant, or finder under the Approved Lease.

(b)           Tenant
Improvements.  Advances of Loan
proceeds to pay for Tenant Improvements (“Tenant Improvement Advances”),
shall be made to Borrower upon the following terms and conditions:

(1)           Borrower shall have
submitted to Administrative Agent (i) the Approved Lease for which the Tenant
Improvements are to be constructed, and (ii) a schedule of the Tenant
Improvements setting forth in detail satisfactory to Administrative Agent (A)
each item of Tenant Improvements which Borrower intends to undertake, (B) the
estimated cost of each such item, and (C) the time schedule for completing the
Tenant Improvements.  In no event shall
Borrower be entitled to Tenant Improvements Advances for amounts attributable
to ordinary and customary operating costs and expenses.

(2)           In addition to
satisfaction of the conditions set forth elsewhere in this Exhibit ”F”,
Administrative Agent’s obligation to make any Tenant Improvements Advance shall
be subject to the satisfaction of the following conditions precedent at the
time of each such Tenant Improvements Advance:

 3
 

(A)          Borrower may request a Tenant Improvement Advance for any portion of
the Tenant Improvements which has been performed to the satisfaction of
Administrative Agent prior to the date a Tenant Improvements Advance is
requested, and such Tenant Improvements shall be in accordance with (i) the
plans approved by Administrative Agent and the tenant under the applicable
Approved Lease, and (ii) all applicable Laws.

(B)           Administrative Agent shall have verified to its satisfaction the cost
of such Tenant Improvements.

(C)           Administrative Agent, at Administrative Agent’s election and at
Borrower’s sole cost and expense, shall have inspected and approved such Tenant
Improvements.

(D)          Borrower shall not use any Tenant Improvements Advance, or any portion
of any Tenant Improvements Advance, for payment of any other cost or expense
except as specifically set forth in a request for a Tenant Improvements Advance
approved by Administrative Agent in writing. 
Administrative Agent shall have no duty or obligation to fund Tenant
Improvements Advances except in accordance with this Agreement and only for
expenses incurred in arrears.

(E)           Requests for Tenant Improvements Advances shall specify the amount
requested and shall be accompanied by appropriate invoices, bills paid
affidavits, lien waivers, title endorsements and other documents reasonably
required by Administrative Agent. Tenant Improvements Advances may be made for
payment of costs and expenses incurred and invoiced but not yet paid by Borrower.

(F)           If require by Administrative Agent, the tenant under the Approved Lease
with respect to which the final Tenant Improvements Advance is sought shall
have executed and delivered to Administrative Agent a tenant estoppel
certificate in form satisfactory to and approved by Administrative Agent.

(G)           With respect to Approved Leases which provide for the payment by
landlord of an “Allowance” for Tenant Improvements upon completion of the
Tenant Improvements by tenant, upon delivery to Administrative Agent that all
of the requirements in the applicable Lease have been satisfied to entitle
tenant to the payment of the Allowance together with bills paid affidavits,
lien waivers, title endorsements and other documents reasonably required by
Administrative Agent.

6.             Direct Advances.  Borrower hereby irrevocably authorizes
Administrative Agent on behalf of Lenders (but Administrative Agent shall have
no obligation) to (i) advance Loan funds directly to Lenders to pay interest
due on the Loan, and (ii) advance and directly apply the proceeds of any
advance to the satisfaction of any of Borrower’s obligations under any of the
Loan Documents, even though Borrower did not include that amount in a Draw
Request and/or no Default exists. Each such direct advance shall be added to
the outstanding principal balance of the Loan and shall be secured by the Loan
Documents.  Unless Borrower pays such
interest from other resources, Administrative Agent may advance Loan funds
pursuant to this Section for interest payments as and when due.  Nothing contained in this Agreement shall be
construed to permit

 4
 

Borrower to defer payment
of interest on the Loan beyond the date(s) due. 
The allocation of Loan funds in the Budget for interest shall not affect
Borrower’s absolute obligation to pay the same in accordance with the Loan
Documents.  Administrative Agent may
hold, use, disburse and apply the Loan for payment of any obligation of
Borrower under the Loan Documents. 
Borrower hereby assigns and pledges the proceeds of the Loan to Administrative
Agent for itself and for the benefit of Lenders for such purposes.  During the continuance of a Default,
Administrative Agent on behalf of Lenders may advance and incur such expenses
as Administrative Agent deems necessary for the completion of the Improvements
and to preserve the Property and any other security for the Loan, and such
expenses, even though in excess of the amount of the Loan, shall be secured by
the Loan Documents and shall be payable to Administrative Agent on behalf of
Lenders on demand.  Administrative Agent
on behalf of Lenders may disburse any portion of any advance at any time, and
from time to time, to persons other than Borrower for the purposes specified in
this Section and the amount of advances to which Borrower shall thereafter be
entitled shall be correspondingly reduced.

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

8.             Funding.  Borrower shall establish and maintain a
special account with Administrative Agent into which advances funded directly
to Borrower (but no other funds), and excluding direct disbursements made to or
by Administrative Agent on behalf of Lenders pursuant to this Agreement, shall
be deposited by Borrower, and against which checks shall be drawn only for the
payment of costs specified in the Budget, but which special account shall not
be used for any other purpose.  Borrower
hereby irrevocably authorizes Administrative Agent to deposit each advance
requested by Borrower to the credit of Borrower in that account, by wire
transfer or other deposit.  Advances may
also be made, in addition to other methods contemplated herein, at
Administrative Agent’s option, by direct or joint check payment to any or all
persons entitled to payment for work or services performed or material
furnished in connection with the Project or the Loan, or by having the proceeds
thereof made available to the Title Company (or its agent) for
disbursement.  Neither Administrative
Agent nor any Lender shall be required to, and has no responsibility to,
supervise the proper application or distribution of funds to third parties.

 5

EXHIBIT
“F-1”

DRAW REQUEST

[BORROWER’S
LETTERHEAD]

DRAW REQUEST NO.               

TO:  BANK OF AMERICA, N.A. (“Administrative Agent”)

	
  LOAN NO.

  	
   

  	
   

  	
  DATE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PROJECT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LOCATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BORROWER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FOR PERIOD ENDING

  	
   

  	
   

  
								

 

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

	
  1.    CURRENT
  DRAW REQUEST FOR HARD COSTS

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.    CURRENT
  DRAW REQUEST FOR SOFT COSTS

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.     TOTAL DRAW REQUEST

  	
   

  	
  $

  	
   

  

 

	
  AUTHORIZED SIGNER:

  
	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  

 

 1

EXHIBIT
“G”

SURVEY REQUIREMENTS

1.             Requirements.  The Survey shall be made in accordance with,
and meet the requirements of, the certification below by a registered
professional engineer or registered professional land surveyor.  The description shall be a single metes and
bounds perimeter description of the entire Land, and a separate metes and
bounds description of the perimeter of each constituent tract or parcel out of
the Land.  The total acreage and square
footage of the Land and each constituent tract or parcel of the Land shall be
certified.  If the Land has been recorded
on a map or plat as part of an abstract or subdivision, all survey lines must
be shown, and all lot and block lines (with distances and bearings) and
numbers, must be shown.  The date of any
revisions subsequent to the initial survey prepared pursuant to these
requirements must also be shown.

2.             Certification.  The certification for the property
description and the map or plat shall be addressed to Administrative Agent for
the Lenders, Borrower and the Title Company, signed by the surveyor (a
registered professional land surveyor or registered professional engineer),
bearing current date, registration number, and seal, and shall be in the
following form or its substantial equivalent:

This is to certify to
Bank of America, N.A., as Administrative Agent for certain Lenders, Behringer
Harvard Mockingbird Commons, LLC, as Borrower and,                        ,
as the Title Company that this map or plat and the survey on which it is based
were made in accordance with the “Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys” jointly established and adopted by ALTA and NSPS
in 2005, and include optional items 1, 2, 4 (in square feet or acres), 6, 8,
10, 11(b), 16, 17, 18, and if buildings are located on the land, optional items
7(a), 7(b)(1), 7(b)(2) and 9 of Table A thereof.  Pursuant to the Accuracy Standards as adopted
by ALTA and NSPS and in effect on the date of this certification, the
undersigned further certifies that in my professional opinion, as a land
surveyor registered in the State of               ,
the maximum Relative Positional Accuracy resulting from the measurements made
on the survey does not exceed the Allowable Relative Positional Accuracy for
Measurements Controlling Land Boundaries on ALTA/ACSM Land Title Surveys (0.07
feet or 20 mm + 50 ppm).  The
undersigned additionally certifies that (a) this survey was made on the ground
under my supervision; (b) I have received and examined a copy of the Title
Insurance Commitment No.                   
issued by the Title Company as well as a copy of each instrument listed
therein, and the subject land and each tract or parcel thereof described in
this survey is the same land as described in the Title Commitment; (c) if the
subject land consists of two or more tracts or parcels having common
boundaries, those tracts and parcels are contiguous along the common
boundaries; (d) the subject land and each tract or parcel thereof has a tax map
designation separate and distinct from that of any other land and the subject
land and each tract or parcel thereof is a separate, legally subdivided
parcel;  (e) this survey correctly shows
all matters of record, (and to the extent they can be located, their location
and dimensions) of which I have been advised affecting the subject land
according to the legal description in such matters (with instrument, book, and
page number indicated); (f) except as shown on this survey, no part of the
subject land is located in a 100-year Flood Plain or in an identified “flood
prone area,” as defined pursuant to the Flood Disaster Protection Act of
1973, as amended, as reflected by Flood Insurance Rate Map Panel #
                
dated
                      ,

 1
 

which such map panel
covers the area in which the Property is situated and this survey correctly
indicates the zone designation of any area as being in the 100-year Flood Plain
or “flood prone area”; (g) to the best of my knowledge, this survey
shows the relation of and distance of all substantial, visible buildings,
sidewalks and other improvements to easements and setback lines; and (h) to the
best of my knowledge, except as shown on this survey, neither the subject land
nor any tract or parcel thereof serves any adjoining land for drainage,
utilities, or ingress or egress.

 2

EXHIBIT
“H”

RESERVED

 1

EXHIBIT
“I”

LEASING
AND TENANT MATTERS

Borrower and
Lenders agree as follows:

1.             Approved Leases.  Borrower shall not enter into any lease of
Retail Space, unless such lease is an Approved Lease.  Borrower shall provide to Administrative
Agent a correct and complete copy of each tenant lease, including any exhibits,
and each guarantee thereof (if any), prior to execution unless the Lease is an
Approved Lease.  Borrower shall,
throughout the term of this Agreement, pay all reasonable costs incurred by
Administrative Agent in connection with Administrative Agent’s review and
approval of tenant leases and each guarantee thereof (if any), including
reasonable attorneys’ fees and costs.

2.             Effect of Lease
Approval.  No approval of any lease
by Administrative Agent shall be for any purpose other than to protect Lenders’
security, and to preserve Lenders’ rights under the Loan Documents.  No approval by Administrative Agent shall
result in a waiver of any default of Borrower. 
In no event shall any approval by Administrative Agent of a lease be a
representation of any kind, with regard to the Lease or its adequacy or
enforceability, or the financial capacity of any tenant or guarantor.

3.             Representations
Concerning Leases.  Borrower
represents and warrants to Administrative Agent and Lenders that Borrower has
delivered to Administrative Agent a true and correct copy of all Tenant Leases
and each guarantee thereof (if any), affecting any part of the Improvements,
together with an accurate and complete rent roll for the Project, and no such
Lease or guarantee contains any option to purchase all or any portion of the
Property or any interest therein or contains any right of first refusal
relating to any sale of the Property or any portion thereof or interest
therein.

4.             Delivery of
Leasing Information and Documents. 
Borrower shall promptly (a) deliver to Administrative Agent such monthly
rent rolls, leasing schedules and reports, operating statements, financial
statements for tenants other than residential tenants with a lease term for
less than one year and other information regarding Tenants and prospective
tenants or other leasing information as Administrative Agent from time to time
may request, and (b) obtain and deliver to Administrative Agent such estoppel
certificates and subordination and attornment agreements executed by such
tenants (and guarantors, if any) in such forms as Administrative Agent from
time to time may require.

5.             Income from the
Property.  Borrower shall first apply
all income from Leases, and all other income derived from the Property, to pay
costs and expenses associated with the ownership, maintenance, development,
operating, and marketing of the Land and Improvements, including all amounts
then required to be paid under the Loan Documents, before using or applying
such income for any other purpose.

6.             Compliance and
Default.  As additional conditions to
Lenders’ obligations under this Agreement, all Tenants having the right to do
so must approve all plans and all changes thereto, the construction of the
Tenant Improvements, and all other aspects of the Project requiring Tenants’
approval.  A default by Borrower under or
any failure by Borrower to satisfy any of the conditions of a Lease shall
constitute a Default.  Borrower shall
promptly notify Administrative Agent in

 1
 

writing of any
failure by any party to perform any material obligation under any Lease, any
event or condition which would permit a Tenant to terminate or cancel a Lease,
or any notice given by a Tenant with respect to the foregoing, specifying in
each case the action Borrower has taken or will take with respect thereto.

 2

EXHIBIT
“J”

LETTERS OF CREDIT

1.             The
Letter of Credit Commitment.

(i)             Subject to the terms
and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon
the agreements of the other Lenders set forth in this Exhibit “J”, (1)
from time to time on any Business Day during the period from the date of this
Agreement until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrower and to amend or renew Letters of Credit
previously issued by it, in accordance with Section 2 below, and (2) to honor
drafts under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the Borrower; provided
that the L/C Issuer shall not be obligated to make any L/C Credit Extension
with respect to any Letter of Credit, and no Lender shall be obligated to
participate in, any Letter of Credit if as of the date of such L/C Credit
Extension, (x) the Outstanding Amount of all L/C Obligations and all Loan
advances would exceed the combined Commitments, or (y) the Outstanding Amount
of the L/C Obligations would exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

(ii)           The L/C Issuer shall be
under no obligation to issue any Letter of Credit if:

(A)  any order, judgment or decree of any Tribunal
or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or
any request or directive (whether or not having the force of Law) from any
Tribunal with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon the L/C Issuer with
respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the date of this Agreement, or shall impose upon the L/C Issuer
any unreimbursed loss, cost or expense which was not applicable on the date of
this Agreement and which the L/C Issuer in good faith deems material to it;

(B)  subject to Exhibit J, Section 2(iii)
below, the expiry date of such requested Letter of Credit would occur more than
twelve months after the date of issuance or last renewal, unless the Required
Lenders have approved such expiry date;

(C)  the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;

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(D)  the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer; or

(E)  such Letter of Credit is in an initial amount
less than $25,000.

(iii)          The L/C Issuer shall be
under no obligation to amend any Letter of Credit if (A) the L/C Issuer would
have no obligation at such time to issue such Letter of Credit in its amended
form under the terms hereof, or (B) the beneficiary of such Letter of Credit
does not accept the proposed amendment to such Letter of Credit.

2.             Procedures for
Issuance and Amendment of Letters of Credit.

(i)            Each Letter of Credit
shall be issued or amended, as the case may be, upon the request of the
Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent)
in the form of a Letter of Credit Application, appropriately completed and
signed by Borrower.  Such Letter of
Credit Application must be received by the L/C Issuer and the Administrative Agent
not later than 11:00 a.m., Administrative Agent’s Time, at least two Business
Days (or such later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be.  In the
case of a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof;
(D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may require in
its good faith business judgment.  In the
case of a request for an amendment of any outstanding Letter of Credit, such Letter
of Credit Application shall specify in form and detail satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may require in
its good faith business judgment.

(ii)           Promptly after receipt
of any Letter of Credit Application, the L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from the Borrower and,
if not, the L/C Issuer will provide the Administrative Agent with a copy
thereof.  Upon receipt by the L/C Issuer
of confirmation from the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to
the terms and conditions hereof, the L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the Borrower or enter into the
applicable amendment, as the case may be, in each case in accordance with the
L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a participation in such
Letter of Credit in an amount equal to the product of such Lender’s Pro Rata
Share times the amount of such Letter of Credit.

 2
 

(iii)          Promptly after its
delivery of any Letter of Credit or any amendment to a Letter of Credit to an
advising bank with respect thereto or to the beneficiary thereof, the L/C
Issuer will also deliver to the Borrower and the Administrative Agent a true
and complete copy of such Letter of Credit or amendment.

3.             Drawings and
Reimbursements; Funding of Participations.

(i)            Upon receipt from the
beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof.  On the
date of any payment by the L/C Issuer under a Letter of Credit (each such date,
an “Honor Date”), the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the drawing (the “Draw Amount”),
and the amount of such Lender’s Pro Rata Share thereof.  In such event, the Borrower shall be deemed
to have requested an advance of Base Rate Principal to be disbursed on the
Honor Date in an amount equal to the Draw Amount, subject to the amount of the
unutilized portion of the combined Commitments and the conditions set forth in Exhibit
“F” (other than the delivery of a Draw Request).  Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this subsection may be given by telephone if
immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

(ii)           Each Lender (including
the Lender acting as L/C Issuer) shall upon any notice pursuant to the
subsection above make funds available to the Administrative Agent for the
account of the L/C Issuer at the Administrative Agent’s Office in an amount
equal to its Pro Rata Share of the Draw Amount not later than 1:00 p.m.,
Administrative Agent’s Time, on the Business Day specified in such notice by
the Administrative Agent, whereupon, subject to the provisions of the
subsection below, each Lender that so makes funds available shall be deemed to
have made an advance of Base Rate Principal to the Borrower in such
amount.  The Administrative Agent shall
remit the funds so received to the L/C Issuer.

(iii)          Until each Lender funds
its Loan advance or participation in an L/C Borrowing pursuant to this Section
to reimburse the L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Pro Rata Share of such amount shall be
solely for the account of the L/C Issuer.

(iv)          Each Lender’s obligation
to make a Loan advance to reimburse the L/C Issuer for amounts drawn under
Letters of Credit, as contemplated by this Section, shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such Lender may
have against the L/C Issuer, the Borrower or any other person for any reason
whatsoever; (B) the occurrence or continuance of a Default or event of Default,
or (C) any other occurrence, event or condition, whether or not similar to any
of the foregoing; provided, however, that each Lender’s obligation to
make a Loan advance pursuant to this Section  is subject to the conditions set forth in Section
4 of Exhibit “F” being satisfactory to Administrative Agent.  No such reimbursement shall relieve or
otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for
the amount of any payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.

 3
 

(v)           If any Lender fails to
make available to the Administrative Agent for the account of the L/C Issuer
any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section by the time specified in subsection (ii), the L/C
Issuer shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
Federal Funds Rate from time to time in effect. 
A certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (vi)
shall be conclusive absent manifest error.

4.             Repayment
of Participations.

(i)            At any time after the
L/C Issuer has made a payment under any Letter of Credit and has received from
any Lender such Lender’s participation in a L/C Borrowing in respect of such
payment in accordance with Exhibit “J”, Section 3, if the Administrative
Agent receives for the account of the L/C Issuer any payment in respect of the
related Draw Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Pro Rata Share (appropriately adjusted, in the case of interest payments,
to reflect the period of time Lender’s participation payment was outstanding)
thereof in the same funds as those received by the Administrative Agent.

(ii)           If any payment received
by the Administrative Agent for the account of the L/C Issuer pursuant to Exhibit
“J”, Section 3(i) is required to be returned, under any of the
circumstances described in Section 6.4 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion) each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned by such Lender, at
a rate per annum equal to the Federal Funds Rate from time to time in effect.

5.             Obligations
Absolute.  The obligation of the
Borrower to reimburse the L/C Issuer for each drawing under each Letter of
Credit, and to repay each L/C Borrowing, shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

(i)            any lack of validity
or enforceability of such Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto;

(ii)           the existence of any
claim, counterclaim, set-off, defense or other right that the Borrower may have
at any time against any beneficiary or any transferee of such Letter of Credit
(or any Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

(iii)          any draft, demand,
certificate or other document presented under such Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any

 4
 

statement therein
being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;

(iv)          any payment by the L/C
Issuer under such Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to
any person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor Relief
Law; or

(v)           any other circumstance
or happening whatsoever, whether or not similar to any of the foregoing,
including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower.

The Borrower shall
promptly examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it and, in the event of any claim of noncompliance with
the Borrower’s instructions or other irregularity, the Borrower will promptly
notify the L/C Issuer.  The Borrower
shall be conclusively deemed to have waived any such claim against the L/C
Issuer and its correspondents unless such notice is given as aforesaid.

6.             Role of L/C Issuer.  Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C Issuer, any Agent-Related
Person nor any of the respective correspondents, participants or assignees of
the L/C Issuer shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit
Application.  The Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at Law or under any other agreement. 
None of the L/C Issuer, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the L/C Issuer, shall
be liable or responsible for any of the matters described in clauses (i)
through (v) of the above Section; provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer’s willful misconduct or gross negligence
or the L/C Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or

 5
 

sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.

7.             Cash Collateral.  Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
within three (3) days after written request from Administrative Agent
immediately Cash Collateralize the then outstanding amount of all L/C
Obligations (in an amount equal to such outstanding amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be).  For the purposes hereof “Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent
in its good faith business judgment and the L/C Issuer (which documents are
hereby consented to by the Lenders). 
Derivatives of such term shall have corresponding meaning.  The Borrower hereby grants the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, a security interest
in all such cash and deposit account balances and all proceeds of the
foregoing.  Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of
America.

8.             Applicability of
ISP98 and UCP.  Unless otherwise
expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is
issued, (i) the rules of the “International Standby Practices 1998” published by
the Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance) shall apply to
each standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the “ICC”) at the time of issuance
(including the ICC decision published by the Commission on Banking Technique
and Practice on April 6, 1998 regarding the European single currency (euro))
shall apply to each commercial Letter of Credit.

9.             Letter of Credit
Fees.  The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share a Letter of Credit fee for each Letter of Credit equal to 1% per
annum times the daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit) over such one year period.  Such fee for each Letter of Credit shall be
due and payable on the date the Letter of Credit Application is delivered to
the L/C Issuer and on the same date of each successive year thereafter until
the Letter of Credit Expiration Date.

10.           Fronting Fee and
Documentary and Processing Charges Payable to L/C Issuer.  The Borrower shall pay directly to the L/C
Issuer for its own account a fronting fee in an amount with respect to each
Letter of Credit, equal to 1/8 of 1% per annum on
the daily maximum amount available to be drawn thereunder, due and payable on
the date the Letter of Credit Application is delivered to the L/C Issuer and on
the same date of each successive year thereafter until the Letter of Credit
Expiration Date.  In addition, the
Borrower shall pay directly to the L/C Issuer for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as from time
to time in

 6
 

effect.  Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.

11.           Conflict with Letter
of Credit Application.  In the event
of any conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.

 7

EXHIBIT
“K”

ASSIGNMENT
AND ASSUMPTION

This Assignment and
Assumption (this “Assignment”) is dated as of the Effective Date set
forth below and is entered into by and between                        
(the “Assignor”) and                           
(the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Loan Agreement identified below (the “Loan Agreement”), receipt of a
copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment as if set forth herein in full.

For an agreed
consideration, the Assignor hereby irrevocably sells and assigns to the Assignee,
and the Assignee hereby irrevocably purchases and assumes from the Assignor,
subject to and in accordance with the Standard Terms and Conditions and the
Loan Agreement, as of the Effective Date inserted by the Administrative Agent
as contemplated below, (i) all of the Assignor’s rights and obligations as a
Lender under the Loan Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below (including,  without limitation [Letters of Credit and]
Guarantees), and (ii) to the extent permitted to be assigned under applicable
Law, all claims, suits, causes of action and any other right of the Assignor
(in its capacity as a Lender) against any person, whether known or unknown,
arising under or in connection with the Loan Agreement, any other documents or
instruments delivered pursuant thereto or in any way based on or related to any
of the foregoing, including, but not limited to contract claims, tort claims,
malpractice claims, statutory claims and all other claims at Law or in equity,
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment, without
representation or warranty by the Assignor.

	
  1.

  	
  Assignor:

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Assignee:

  	
                                        
  [is an Affiliate/Approved Fund of               ]

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Borrower(s):

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Administrative Agent:

  	
                              ,
  as the administrative agent under the Loan Agreement

  
	
   

  	
   

  	
   

  
	
  5. 

  	
  Loan Agreement:

  	
  The Loan Agreement, dated as of              ,
  among                                  ,
  the Lenders parties thereto, [and] Bank of America,
  N.A., as Administrative Agent[, and the other agents parties thereto]

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Assigned Interest:

  	
   

  
				

 

	
  Aggregate Amount of

  Commitment/Loans for all Lenders

  	
   

  	
  Amount of Commitment/Loans

  Assigned

  	
   

  	
  Percentage Assigned of

  Commitment/Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
							

 

 1
 

Effective Date:                           ,
20     [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in
this Assignment are hereby agreed to:

	
  

  	
  ASSIGNOR

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
        Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
        Title:

  

 

	
  [Consented to and] Accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
  , as

  	
   

  
	
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
        Title:

  	
   

  
	
   

  	
   

  
	
  [Consented to:]

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
        Title:

  	
   

  

 

 2
 

ANNEX 1 TO ASSIGNMENT AND
ASSUMPTION

STANDARD TERMS AND
CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.             Representations
and Warranties.

1.1.          Assignor.  The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with
respect to (i) any statements, warranties or representations made in or in
connection with the Loan Agreement or any other Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Documents, or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

1.2.          Assignee.  The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the Loan Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Loan Agreement
(subject to receipt of such consents as may be required under the Loan
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Loan Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Loan Agreement, together with copies of the most
recent financial statements delivered pursuant to Section     
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision independently
and without reliance on the Administrative Agent or any other Lender to enter
into this Assignment and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Loan Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance
on the Administrative Agent, the Assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, and (ii) it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

6.24         Assignee’s
Address for Notices, etc.  Attached
hereto as Schedule 1 is all contact information, address, account and other
administrative information relating to the Assignee.

2.             Payments.  From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignee whether such amounts have accrued prior to or on or after the
Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments

 3
 

by the Administrative
Agent for periods prior to the Effective Date or with respect to the making of
this Assignment directly between themselves.

3.             General Provisions.  This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.  This Assignment may be executed
in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment by telecopy shall be
effective as delivery of a manually executed counterpart of this
Assignment.  This Assignment shall be
governed by, and construed in accordance with, the Law of the State of Texas.

 4
 

SCHEDULE
1 TO ASSIGNMENT AND ASSUMPTION

ADMINISTRATIVE
DETAILS

(Assignee to list names of credit contacts, addresses, phone and
facsimile numbers, electronic mail addresses and account and payment
information)

	
  (a)

  	
  Libor Lending Office:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Assignee Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone: (   )

  	
   

  
	
   

  	
  Telecopier: (   )

  	
   

  
	
   

  	
  Electronic Mail:

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  Domestic Lending Office:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Assignee Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone: (   )

  	
   

  
	
   

  	
  Telecopier: (   )

  	
   

  
	
   

  	
  Electronic Mail:

  	
   

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  Notice Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Assignee Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone: (   )

  	
   

  
	
   

  	
  Telecopier: (   )

  	
   

  
	
   

  	
  Electronic Mail:

  	
   

  
	
   

  	
   

  	
   

  
	
  (d)

  	
  Payment Instructions: Account No.:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Account No.:

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Reference:

  	
   

  

 

 5

EXHIBIT
“L”

DEED OF TRUST NOTE

	
  $ 

  	
   

  	
                     ,      

  

 

FOR VALUE RECEIVED,                                                           
(“Borrower,” whether one or more) hereby promises to pay to the order of
[                     
(“Lender”) under that certain Loan Agreement (defined below) among
Borrower, Bank of America, a national banking association (together with any
and all of its successors and assigns, “Administrative Agent”) as agent for the
benefit of the Lenders from time to time a party to that certain Loan Agreement
(the “Loan Agreement”) dated                   
   , 2007 of even date herewith, without offset, in
immediately available funds in lawful money of the United States of America, at
the Administrative Agent’s Office as defined in the Loan Agreement, the
principal sum of                                        
DOLLARS ($                       )
(or the unpaid balance of all principal advanced against this Note, if that
amount is less), together with interest on the unpaid principal balance of this
Note from day to day outstanding as hereinafter provided.

1.             Note; Interest;
Payment Schedule and Maturity Date. 
This Note is [one of] the
Note[s] referred to in Loan Agreement and
is entitled to the benefits thereof [and subject to prepayment
in whole or part as provided therein].  The entire principal balance of this Note
then unpaid shall be due and payable at the times as set forth in the Loan
Agreement.  Accrued unpaid interest shall
be due and payable at the times and at the interest rate as set forth in the
Loan Agreement until all principal and accrued interest owing on this Note
shall have been fully paid and satisfied. 
Borrower also shall pay to Administrative Agent principal payments in
respect of the Loan, in an amount equal to the Release Price, which payments
shall be due and payable upon the closing of the sale of each Residential Unit.
Any amount not paid when due and payable hereunder shall, to the extent
permitted by applicable Law, bear interest and if applicable a late charge as
set forth in the Loan Agreement.

2.             Security; Loan
Documents.  The security for this
Note includes a                                                   
(which, as it may have been or may be amended, restated, modified or
supplemented from time to time, is herein called the “Deed of Trust”)
dated                        
from                                           
to                                           
and                                           ,
Trustee,  covering certain property in
Dallas, Texas described therein (the “Property”).  This Note, the Deed of Trust, the Loan
Agreement and all other documents now or hereafter securing, guaranteeing or
executed by Borrower or Guarantor (as defined in the Loan Agreement) in
connection with the loan evidenced by this Note (the “Loan”), are, as the same
have been or may be amended, restated, modified or supplemented from time to
time, herein sometimes called individually a “Loan Document” and together the “Loan
Documents.”

3.             Defaults.

(a)           It shall be a default (“Default”)
under this Note and each of the other Loan Documents if (after giving effect to
any applicable notice, grace or cure periods) (i) any principal, interest or
other amount of money due under this Note is not paid in full when due,
regardless of

 1
 

how such amount may have
become due; (ii) any covenant, agreement, condition, representation or warranty
herein or in any other Loan Documents is not fully and timely performed,
observed or kept; or (iii) there shall occur any default or event of default
under the Deed of Trust or any other Loan Document.  Upon the occurrence and during the
continuation of a Default, Administrative Agent on behalf of the Lenders shall
have the rights to declare the unpaid principal balance and accrued but unpaid
interest on this Note, and all other amounts due hereunder and under the other
Loan Documents, at once due and payable (and upon such declaration, the same
shall be at once due and payable), to foreclose any liens and security
interests securing payment hereof and to exercise any of its other rights,
powers and remedies under this Note, under any other Loan Document, or at Law
or in equity.

(b)           All of the rights,
remedies, powers and privileges (together, “Rights”) of Administrative
Agent on behalf of the Lenders provided for in this Note and in any other Loan
Document are cumulative of each other and of any and all other Rights at Law or
in equity.  The resort to any Right shall
not prevent the concurrent or subsequent employment of any other appropriate
Right.  No single or partial exercise of
any Right shall exhaust it, or preclude any other or further exercise thereof,
and every Right may be exercised at any time and from time to time.  No failure by Administrative Agent or Lenders
to exercise, nor delay in exercising any Right, including but not limited to
the right to accelerate the maturity of this Note, shall be construed as a
waiver of any Default or as a waiver of any Right.  Without limiting the generality of the foregoing
provisions, the acceptance by Lender from time to time of any payment under
this Note which is past due or which is less than the payment in full of all
amounts due and payable at the time of such payment, shall not (i) constitute a
waiver of or impair or extinguish the right of Administrative Agent or Lenders
to accelerate the maturity of this Note or to exercise any other Right at the
time or at any subsequent time, or nullify any prior exercise of any such
Right, or (ii) constitute a waiver of the requirement of punctual payment and
performance or a novation in any respect.

(c)           If any holder of this
Note retains an attorney in connection with any Default or at maturity or to
collect, enforce or defend this Note or any other Loan Document in any lawsuit
or in any probate, reorganization, bankruptcy, arbitration or other proceeding,
or if Borrower sues any holder in connection with this Note or any other Loan
Document and does not prevail, then Borrower agrees to pay to each such holder,
in addition to principal, interest and any other sums owing to Lenders
hereunder and under the other Loan Documents, all  costs
and expenses incurred by such holder in trying to collect this Note or in any
such suit or proceeding, including, without limitation, attorneys’ fees and
expenses, investigation costs and all court costs, whether or not suit is filed
hereon, whether before or after the Maturity Date, or whether in connection
with bankruptcy, insolvency or appeal, or whether collection is made against
Borrower or any guarantor or endorser or any other person primarily or
secondarily liable hereunder.

4.             Heirs, Successors
and Assigns.  The terms of this Note
and of the other Loan Documents shall bind and inure to the benefit of the
heirs, devisees, representatives, successors and assigns of the parties.  The foregoing sentence shall not be construed
to permit Borrower to assign the Loan except as otherwise permitted under the
Loan Documents.  As further provided in
the Loan Agreement, a Lender may, at any time, sell, transfer, or assign all on
a portion of its interest in this Note, the Deed of Trust and the other Loan
Documents, as set forth in the Loan Agreement.

5.             General Provisions.  Time is of the essence with respect to
Borrower’s obligations under this Note.  If more than one person or entity executes
this Note as Borrower, all of said parties

 2
 

shall be jointly and
severally liable for payment of the indebtedness evidenced hereby.  Borrower on behalf of itself and all
sureties, endorsers, guarantors and any other party now or hereafter liable for
the payment of this Note in whole or in part, hereby (a) waives, to the extent
permitted by applicable Laws demand, presentment for payment, notice of
dishonor and of nonpayment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices (except any notices
which are specifically required by this Note or any other Loan Document or are
required by applicable Law), filing of suit and diligence in collecting this
Note or enforcing any of the security herefor; (b) agrees to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; (c) agrees that neither
Administrative Agent nor any Lender shall be required first to institute suit
or exhaust its remedies hereon against Borrower or others liable or to become
liable hereon or to perfect or enforce its rights against them or any security
herefor; (d) consents to any extensions or postponements of time of payment of
this Note for any period or periods of time and to any partial payments, before
or after maturity, and to any other indulgences with respect hereto, without
notice thereof to any of them; and (e) submits (and waives all rights to
object) to non-exclusive personal jurisdiction of any state or federal
court sitting in the city and county, and venue in the city or county, in which
payment is to be made as specified in Section 1 of this Note, for the
enforcement of any and all obligations under this Note and the Loan Documents;
(f) waives the benefit of all homestead and similar exemptions as to this Note;
(g) agrees that their liability under this Note shall not be affected or
impaired by any determination that any security interest or lien taken by
Lender to secure this Note is invalid or unperfected; and (h) hereby
subordinates any and all rights against Borrower and any of the security for
the payment of this Note, whether by subrogation, agreement or otherwise, until
this Note is paid in full.  A
determination that any provision of this Note is unenforceable or invalid shall
not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or
circumstances.  This Note may not be
amended except in a writing specifically intended for such purpose and executed
by the party against whom enforcement of the amendment is sought.  Captions and headings in this Note are for
convenience only and shall be disregarded in construing it.  THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY TEXAS LAW (WITHOUT REGARD TO ANY CONFLICT
OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

6.             Notices.  Any notice, request, or demand to or upon
Borrower or Lender shall be deemed to have been properly given or made when
delivered in accordance with the Loan Agreement.

7.  No Usury.  It is expressly stipulated and agreed to be
the intent of Borrower, Administrative Agent and all Lenders at all times to
comply with applicable state law or applicable United States federal law (to
the extent that it permits a Lender to contract for, charge, take, reserve, or
receive a greater amount of interest than under state law) and that this
Section shall control every other covenant and agreement in this Note and the
other Loan Documents.  If applicable
state or federal law should at any time be judicially interpreted so as to
render usurious any amount called for under this Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved, or received with
respect to the Loan, or if Administrative Agent’s exercise of the option to
accelerate the Maturity Date, or if any prepayment by Borrower results in
Borrower having paid any interest in excess of that permitted by applicable
law, then it is Administrative Agent’s and

 3
 

each Lender’s express
intent that all excess amounts theretofore collected by Administrative Agent’s
and each Lender shall be credited on the principal balance of this Note and all
other indebtedness and the provisions of this Note and the other Loan Documents
shall immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or
thereunder.  All sums paid or agreed to
be paid to Lenders for the use, forbearance, or detention of the Loan shall, to
the extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so
that the rate or amount of interest on account of the Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to the Loan for
so long as the Loan is outstanding.

THE LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF,
Borrower has duly executed this Note as of the date first above written.

	
  

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 4

EXHIBIT
“M”

SCHEDULE OF LENDERS

BANK OF AMERICA, N.A., as
Administrative Agent and L/C Issuer:

	
  Domestic and Libor Lending Office:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mail Code:

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  
	
   

  	
   

  
	
  Telephone:

  	
   

  
	
  Facsimile:

  	
   

  
	
  Electronic Mail:

  	
   

  
	
   

  	
   

  
	
  Notices:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mail Code:

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  
	
   

  	
   

  
	
  Telephone:

  	
   

  
	
  Facsimile:

  	
   

  
	
  Electronic Mail:

  	
   

  
	
   

  	
   

  
	
  Payment Instructions: Account No.:

  	
   

  
	
   

  	
   

  
	
  Account No.:

  	
   

  
	
  Attention:

  	
   

  
	
  Reference:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A., as Lender

  	
   

  
	
   

  	
   

  
	
  Domestic and Libor Lending Office:

  	
  Commitment Amount: $

  
	
   

  	
   

  
	
   

  	
  Pro Rata Share:                      %

  
	
   

  	
   

  
	
  Mail Code:

  	
   

  	 

	
   

  	
   

  	 

	
  Attn:

  	
   

  	 

	
   

  	
   

  	 

	
  Telephone:

  	
   

  	 

	
  Facsimile:

  	
   

  	 

	
  Electronic Mail:

  	
   

  	 

				

 

 1
 

 

	
  Notices:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mail Code:

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  
	
   

  	
   

  
	
  Telephone:

  	
   

  
	
  Facsimile:

  	
   

  
	
  Electronic Mail:

  	
   

  
	
   

  	
   

  
	
  Payment Instructions: Account No.:

  	
   

  
	
   

  	
   

  
	
  Account No.:

  	
   

  
	
  Attention:

  	
   

  
	
  Reference:

  	
   

  
	
   

  	
   

  
	
  [LENDERS]

  	
   

  
	
   

  	
   

  
	
  Domestic and Libor Lending Office:

  	
  Commitment Amount: $

  
	
   

  	
   

  
	
   

  	
  Pro Rata Share:             %

  
	
   

  	
   

  
	
  Mail Code:

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  
	
   

  	
   

  
	
  Telephone:

  	
   

  
	
  Facsimile:

  	
   

  
	
  Electronic Mail:

  	
   

  
	
   

  	
   

  
	
  Notices:

  	
   

  
	
   

  	
   

  
	
  Mail Code:

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  
	
   

  	
   

  
	
  Telephone:

  	
   

  
	
  Facsimile:

  	
   

  
	
  Electronic Mail:

  	
   

  
	
   

  	
   

  
	
  Payment Instructions: Account No.:

  	
   

  
	
   

  	
   

  
	
  Account No.:

  	
   

  
	
  Attention:

  	
   

  
	
  Reference:

  	
   

  

 

 2

EXHIBIT
“N”

SCHEDULE OF COSTS PAID FROM
UP-FRONT EQUITY

 1Exhibit
10.2

DEED OF TRUST NOTE

	
  $42,000,000.00

  	
  September    ,
  2007 

  

 

FOR VALUE RECEIVED, BEHRINGER HARVARD MOCKINGBIRD COMMONS, LLC, a Delaware
limited liability company (“Borrower”), hereby promises to pay to the
order of BANK OF AMERICA, N.A., a national
banking associations  (“Lender”), under that certain Loan
Agreement (defined below) among Borrower, Bank of America, N.A.
(together with any and all of its successors and assigns, “Administrative
Agent”), as agent for the benefit of the lenders from time to time a party
to that certain Loan Agreement (the “Loan Agreement”) dated of even date
herewith, without offset, in immediately available funds in lawful money of the
United States of America, at the Administrative Agent’s Office as defined in
the Loan Agreement, the principal sum of FORTY-TWO MILLION AND NO/100 DOLLARS
($42,000,000.00) (or the unpaid balance of all principal advanced against this
Note, if that amount is less), together with interest on the unpaid principal
balance of this Note from day to day outstanding as hereinafter provided.

1.             Note; Interest; Payment Schedule and Maturity Date.  This Note is one of the Notes referred to in
Loan Agreement and is entitled to the benefits thereof.  The entire principal balance of this Note
then unpaid shall be due and payable at the times as set forth in the Loan
Agreement.  Accrued unpaid interest shall
be due and payable at the times and at the interest rate as set forth in the
Loan Agreement until all principal and accrued interest owing on this Note
shall have been fully paid and satisfied. 
Any amount not paid when due and payable hereunder shall, to the extent
permitted by applicable Law, bear interest and if applicable a late charge as
set forth in the Loan Agreement.

2.             Security; Loan Documents.  The security for this Note includes a Deed of
Trust, Security Agreement, Fixture Filing and Financing Statement (which, as it
may have been or may be amended, restated, modified or supplemented from time
to time, is herein called the “Deed of Trust”) dated of even date
herewith from Borrower to PRLAP, Inc., Trustee, for the benefit of
Administrative Agent and the other lenders covering certain property in Dallas
County, Texas as more particularly described therein (the “Property”).  This Note, the Deed of Trust, the Loan
Agreement and all other documents now or hereafter securing, guaranteeing or
executed by Borrower or Guarantor (as defined in the Loan Agreement) in
connection with the loan evidenced by this Note (the “Loan”), are, as
the same have been or may be amended, restated, modified or supplemented from
time to time, herein sometimes called individually a “Loan Document” and
together the “Loan Documents.”

3.             Defaults.

(a)           It shall be a default (“Default”)
under this Note and each of the other Loan Documents if (after giving effect to
any applicable notice, grace or cure periods) (i) any principal, interest or
other amount of money due under this Note is not paid in full when due,
regardless of how such amount may have become due; (ii) any covenant,
agreement, condition, representation or warranty herein or in any other Loan
Documents is not fully and timely performed, observed or kept; or (iii) there
shall occur any default or event of default under the Leasehold Deed of Trust or
any other Loan Document.  Upon the
occurrence and during the

 1
 

continuation of a
Default, Administrative Agent on behalf of the Lenders shall have the rights to
declare the unpaid principal balance and accrued but unpaid interest on this
Note, and all other amounts due hereunder and under the other Loan Documents,
at once due and payable (and upon such declaration, the same shall be at once
due and payable), to foreclose any liens and security interests securing
payment hereof and to exercise any of its other rights, powers and remedies
under this Note, under any other Loan Document, or at Law or in equity.

(b)           All of the rights, remedies, powers
and privileges (together, “Rights”) of Administrative Agent on behalf of
the Lenders provided for in this Note and in any other Loan Document are
cumulative of each other and of any and all other Rights at Law or in
equity.  The resort to any Right shall
not prevent the concurrent or subsequent employment of any other appropriate
Right.  No single or partial exercise of
any Right shall exhaust it, or preclude any other or further exercise thereof,
and every Right may be exercised at any time and from time to time.  No failure by Administrative Agent or Lenders
to exercise, nor delay in exercising any Right, including but not limited to
the right to accelerate the maturity of this Note, shall be construed as a
waiver of any Default or as a waiver of any Right.  Without limiting the generality of the
foregoing provisions, the acceptance by Lender from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Administrative
Agent or Lenders to accelerate the maturity of this Note or to exercise any
other Right at the time or at any subsequent time, or nullify any prior
exercise of any such Right, or (ii) constitute a waiver of the requirement of
punctual payment and performance or a novation in any respect.

(c)           If any holder of this Note retains an
attorney in connection with any Default or at maturity or to collect, enforce
or defend this Note or any other Loan Document in any lawsuit or in any
probate, reorganization, bankruptcy, arbitration or other proceeding, or if
Borrower sues any holder in connection with this Note or any other Loan
Document and does not prevail, then Borrower agrees to pay to each such holder,
in addition to principal, interest and any other sums owing to Lenders hereunder
and under the other Loan Documents, all  costs and
expenses incurred by such holder in trying to collect this Note or in any such
suit or proceeding, including, without limitation, attorneys’ fees and
expenses, investigation costs and all court costs, whether or not suit is filed
hereon, whether before or after the Maturity Date, or whether in connection
with bankruptcy, insolvency or appeal, or whether collection is made against
Borrower or any guarantor or endorser or any other person primarily or secondarily
liable hereunder.

4.             Heirs, Successors and Assigns.  The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties.  The foregoing sentence shall not be construed
to permit Borrower to assign the Loan except as otherwise permitted under the
Loan Documents.  As further provided in
the Loan Agreement, a Lender may, at any time, sell, transfer, or assign all on
a portion of its interest in this Note, the Deed of Trust and the other Loan
Documents, as set forth in the Loan Agreement.

5.             General Provisions.  Time is of the essence with respect to
Borrower’s obligations under this Note. 
If more than one person or entity executes this Note as Borrower, all of
said parties shall be jointly and severally liable for payment of the
indebtedness evidenced hereby.

 2
 

Borrower on behalf of
itself and all sureties, endorsers, guarantors and any other party now or
hereafter liable for the payment of this Note in whole or in part, hereby (a)
waives, to the extent permitted by applicable Laws demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notices (except
any notices which are specifically required by this Note or any other Loan
Document or are required by applicable Law), filing of suit and diligence in
collecting this Note or enforcing any of the security herefor; (b) agrees to
any substitution, subordination, exchange or release of any such security or
the release of any party primarily or secondarily liable hereon; (c) agrees
that neither Administrative Agent nor any Lender shall be required first to
institute suit or exhaust its remedies hereon against Borrower or others liable
or to become liable hereon or to perfect or enforce its rights against them or
any security herefor; (d) consents to any extensions or postponements of time
of payment of this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences with respect
hereto, without notice thereof to any of them; and (e) submits (and waives all
rights to object) to non-exclusive personal jurisdiction of any state or
federal court sitting in the city and county, and venue in the city or county,
in which payment is to be made as specified in Section 1 of this Note,
for the enforcement of any and all obligations under this Note and the Loan
Documents; (f) waives the benefit of all homestead and similar exemptions as to
this Note; (g) agrees that their liability under this Note shall not be
affected or impaired by any determination that any security interest or lien
taken by Lender to secure this Note is invalid or unperfected; and (h) hereby
subordinates any and all rights against Borrower and any of the security for
the payment of this Note, whether by subrogation, agreement or otherwise, until
this Note is paid in full.  A
determination that any provision of this Note is unenforceable or invalid shall
not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or
circumstances.  This Note may not be
amended except in a writing specifically intended for such purpose and executed
by the party against whom enforcement of the amendment is sought.  Captions and headings in this Note are for
convenience only and shall be disregarded in construing it.  THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY TEXAS LAW (WITHOUT REGARD TO ANY CONFLICT
OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

6.             Notices. 
Any notice, request, or demand to or upon Borrower or Lender shall be
deemed to have been properly given or made when delivered in accordance with
the Loan Agreement.

7.  No Usury.  It is expressly stipulated and agreed to be
the intent of Borrower, Administrative Agent and all Lenders at all times to
comply with applicable state law or applicable United States federal law (to
the extent that it permits a Lender to contract for, charge, take, reserve, or
receive a greater amount of interest than under state law) and that this
Section shall control every other covenant and agreement in this Note and the
other Loan Documents.  If applicable
state or federal law should at any time be judicially interpreted so as to
render usurious any amount called for under this Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved, or received with
respect to the Loan, or if Administrative Agent’s exercise of the option to
accelerate the Maturity Date, or if any

 3
 

prepayment by Borrower
results in Borrower having paid any interest in excess of that permitted by
applicable law, then it is Administrative Agent’s and each Lender’s express
intent that all excess amounts theretofore collected by Administrative Agent’s
and each Lender shall be credited on the principal balance of this Note and all
other indebtedness and the provisions of this Note and the other Loan Documents
shall immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or
thereunder.  All sums paid or agreed to
be paid to Lenders for the use, forbearance, or detention of the Loan shall, to
the extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so
that the rate or amount of interest on account of the Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to the Loan for
so long as the Loan is outstanding.

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]

 4

IN WITNESS WHEREOF,
Borrower has duly executed this Note as of the date first above written.

	
  

  	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD MOCKINGBIRD

  
	
   

  	
   

  	
  COMMONS, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BEHRINGER HARVARD MOCKINGBIRD

  
	
   

  	
   

  	
   

  	
  COMMONS GP, LLC, a Texas limited liability

  
	
   

  	
   

  	
   

  	
  company, its Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President –

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Corporate Development & Legal and

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Secretary

  	
   

  
								

 

 

Signature Page

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