CONSTRUCTION Loan AGREEMENT

 

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                                                                 EXHIBIT 10.34.1

 

                THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT

           TO THE FEDERAL ARBITRATION ACT AND/OR Section 15-48-10 OF

               THE SOUTH CAROLINA CODE OF LAWS (1976), AS AMENDED

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                           Construction Loan Agreement

 

                                      among

 

Grande Palms, L.L.C., a single purpose, single asset limited liability company,

 

                                       and

 

                             Bank of America, N.A.,

                            as Administrative Agent,

 

                                       and

 

                         The Other Financial Institutions

                                  Party Hereto,

 

                                      and

 

                Banc of America Securities LLC, as Lead Arranger

 

                           Dated as of April 27, 2005

 

                              [BANK OF AMERICA LOGO]

 

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                           CONSTRUCTION LOAN AGREEMENT

 

                                  (Syndication)

 

      THIS CONSTRUCTION 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 (the "Administrative Agent"); and Grande

Palms, L.L.C., a Delaware single purpose, single asset 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" - Basic Information

 

      Exhibit "C" - Certain Conditions Precedent to the Loan Closing

 

      Exhibit "C-1" - Certain Conditions Precedent to the Funding

 

      Exhibit "D" - Budget

 

      Exhibit "E" - Minimum Unit Release Prices

 

      Exhibit "F" - Advances

 

      Exhibit "F-I" - Draw Request

 

      Exhibit "G" - Survey Requirements

 

      Exhibit "H" - [Reserved]

 

      Exhibit "I" - List of Required Bonds

 

      Exhibit "J" - Assignment and Assumption

 

      Exhibit "K" - Form of Promissory Note

 

      Exhibit "L" - Schedule of Lenders

 

      Exhibit "M" - Form of Guaranty

 

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 the Basic Information set forth in Exhibit "B" (the "Basic

Information"). 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 pay (i)

the cost of the construction of the Improvements on the Land and (ii) other

fees, costs and expenses relating to the Property if and to the extent that such

costs are specifically provided for in the Loan Allocation column in the Budget.

The maximum principal Loan amount shall be $69,800,000.00 (the "Loan Amount"),

the proceeds of which shall be used to develop the Project, which amount shall

be evidenced by the Note. The Loan Amount shall be reduced, if the actual

 

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  costs of construction are below the Loan allocations set forth in the Budget

  (as hereinafter defined), by an amount equal to the difference between the cost

  of construction set forth in the Budget and the actual cost of construction.

  The Note shall be in the maximum principal amount of $69,800,000.00.

 

      1.3 Commitment to Lend. Borrower agrees to borrow the Loan from Lenders,

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", Exhibit "C-1" and

Exhibit "F" attached to this Agreement. Lender's commitment to lend shall expire

and terminate (a) automatically if the Loan is prepaid in full; and (b)

automatically upon the occurrence of a Default. The Loan is not revolving. Any

amount repaid may not be reborrowed.

 

      1.4 Budget. Loan funds are allocated to payment of the costs of the

Project shown in the "Loan Allocation" column of the Budget attached to this

Agreement as Exhibit "D". Borrower shall not amend the Budget, or otherwise

reallocate Loan funds from one Budget line item to another, in an amount in

excess of $500,000.00 per occurrence subject to an aggregate total of

$5,000,000.00 without the prior written approval of Administrative Agent, which

approval shall not be unreasonably withheld or delayed. The Budget has been

prepared by Borrower, and Borrower represents to Administrative Agent and

Lenders that the Budget constitutes Borrower's good faith estimate of all costs

incident to the Loan and the Project through the stated maturity date of the

Loan (collectively, the "Aggregate Cost") after taking into account the

requirements of this Agreement, including "hard" and "soft" costs, fees and

expenses. Unless approved by Administrative Agent, which approval shall not be

unreasonably withheld or delayed, no advance shall be made (a) for any cost not

set forth in the Budget, (b) from any line item in the Budget that, when added

to all prior advances from that line item, would exceed the lesser of (i) the

actual cost incurred by Borrower for such line item, or (ii) the sum shown in

the "Loan Allocation" column in the Budget for such line item (subject to

Borrower's ability to reallocate such items as set forth in Section 1.4 herein),

(c) from any contingency line item in excess of the amount of such line item, or

(d) [Reserved]. Except for Borrower's ability to reallocate items as set forth

in Section 1.4 herein, advances from any line item in the Budget for purposes

other than those for which amounts are initially allocated to such line item, or

changes in the relative amounts allocated to particular line items in the Budget

may only be made with Administrative Agent's approval, which shall not be

unreasonably withheld or delayed.

 

      1.5 Borrower's Equity and Borrower's Deposit. Prior to the Closing Date

and at all times during the term of the Loan, Administrative Agent must be

satisfied that the actual Aggregate Cost does not exceed the total amount of the

Loan plus the amounts of all equity investments in the Project made by Borrower

for which funds are readily available. Administrative Agent reserves the right

to require, at Borrower's expense, a construction cost takeoff by a consultant

designated by Administrative Agent to assist in making such determination. If at

any time Administrative Agent determines that the sum of: (1) any unadvanced

portion of the Loan to which Borrower is entitled, plus (ii) the portions of the

Aggregate Cost that are to be paid by Borrower from other funds that, to

Administrative Agent's satisfaction, are available, set aside and committed, is

or will be insufficient to pay the actual

 

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unpaid Aggregate Cost, Borrower shall, within seven (7) days after written

notice from Administrative Agent, (i) cause Guarantor to sign an acknowledgment,

in form satisfactory to Administrative Agent, that the Guaranty shall cover such

shortages, or (ii) deposit with Agent equity funds in cash with Administrative

Agent the amount of the deficiency ("Borrower's Deposit") in an interest-bearing

account of Administrative Agent's selection with interest earned thereon to be

part of Borrower's Deposit, or shall submit evidence to Administrative Agent of

equity investments previously made, in amounts sufficient, in Administrative

Agent's opinion, to equal any such shortage and Administrative Agent may refuse

to make any additional advances under the Loan Documents until such Guarantor's

acknowledgment or additional equity funds have been received. Any such

Borrower's Deposit is hereby pledged to Administrative Agent and Lenders as

additional security for the Loan, and Borrower hereby grants and conveys to

Administrative Agent for the ratable benefit of Administrative Agent and Lenders

a security interest in all funds so deposited with Administrative Agent, as

additional security for the Loan. Administrative Agent may advance all or a

portion of the Borrower's Deposit prior to the Loan proceeds. Administrative

Agent may (but shall have no obligation to) apply all or any part of Borrower's

Deposit against the unpaid Indebtedness in such order as Administrative Agent

determines.

 

      1.6 Evidence of Debt.

 

      1.6.1 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 conclusive absent manifest

error 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 Loans. 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.

 

      1.7 Interest Rate.

 

      1.7.1 Initial Interest Rate. Initially, the Principal Debt from day to day

outstanding which is not past due, shall bear interest at a fluctuating rate of

interest equal to the Eurodollar Daily Rate plus two hundred twenty-five (225)

basis points per annum.

 

      1.7.2 Reduction of Interest Rate. Upon the achievement of all of the

following, the unpaid principal balance of the Loan shall bear interest at a

fluctuating rate of interest equal to the Eurodollar Daily Rate plus two hundred

(200) basis points per annum:

 

            (i) the Improvements shall be fifty-five percent (55%) complete, as

            evidenced by AIA certification from the Project architect; and

 

            (ii) no monetary Default has occurred and no Default has occurred

            and is continuing under the Loan.

 

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      1.7.3 General Interest Rate Provisions.

 

      (a) The "Eurodollar Daily Rate" shall mean a fluctuating rate of interest

equal to the one month rate of interest (rounded upwards, if necessary to the

nearest 1/100 of 1%).appearing on Telerate Page 3750 ("Telerate Page 3750" means

the British Bankers Association Libor Rates (determined at 11:00 a.m. London,

England time) that are published by Bridge Information Systems, Inc.) or any

successor page as the one month, two month or three month London interbank

offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London

time) on the second preceding Business Day, as adjusted from time to time in

Administrative Agent's sole discretion for then applicable reserve requirements,

deposit insurance assessment rates and other regulatory costs. If for any reason

such rate is not available, the term "Eurodollar Daily Rate" shall mean the

fluctuating rate of interest equal to the one month, two month or three month

rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%)

appearing on Reuters Screen LIBO Page as the one month, two month, or three

month London interbank offered rate for deposits in U.S. Dollars at

approximately 11:00 a.m. (London time) on the second preceding Business Day, as

adjusted from time to time in Administrative Agent's sole discretion for then

applicable reserve requirements, deposit insurance assessment rates and other

regulatory costs; provided, however, if more than one rate is specified on

Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of

all such rates.

 

      (b) If Administrative Agent determines that no adequate basis exists for

determining the Eurodollar Daily Rate or that any applicable law or regulation

or compliance therewith by Administrative Agent prohibits or restricts or makes

impossible the charging of interest based on the Eurodollar Daily Rate and

Administrative Agent so notifies Borrower, then until Administrative Agent

notifies Borrower that the circumstances giving rise to such suspension no

longer exist, interest shall accrue and be payable on the unpaid principal

balance of the Loan from the date Administrative Agent so notifies Borrower

until the Maturity Date of the Loan (whether by acceleration, declaration,

extension or otherwise) at a fluctuating rate of interest equal to the Prime

Rate of Administrative Agent plus or minus such amount as may be necessary to

approximate the rate per annum last assessed pursuant to this Section. The term

"Prime Rate" means, on any day, the rate of interest per annum then most

recently established by Administrative Agent as its "prime rate". Any such rate

is a general reference rate of interest, may not be related to any other rate,

and may not be the lowest or best rate actually charged by Administrative Agent

to any customer or a favored rate and 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. Each time the Prime

Rate changes, the per annum rate of interest on the Loan shall change

immediately and contemporaneously with such change in the Prime Rate.

 

      (c) Computations and Determinations. All interest shall be computed on the

basis of a year of 360 days and paid for the actual number of 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 Loan,

but the failure to record any such information shall not limit or affect the

obligations of Borrower under the Loan Documents.

 

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      (d) [Reserved].

 

      (e) Past Due Rate. 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 four percent (4%) per annum in

excess of the interest rate in effect at the time of payment default. Provided,

there is no Default and in accordance with the Budget, Lender shall pay itself

interest from the Loan Proceeds when due and payable.

 

      1.8 Prepayment. Borrower may prepay the principal balance of this Loan, in

full at any time or in part from time to time without premium or penalty.

Notwithstanding the foregoing, if Borrower at any time enters into an interest

rate protection agreement whereby Borrower has purchased an interest protection

product from Administrative Agent (an "Interest Rate Protection Agreement") and

the Interest Rate Protection Agreement is in effect, Borrower shall pay to the

Administrative Agent a prepayment fee calculated in accordance with the

prepayment fee described in the Interest Rate Protection Agreement.

 

      1.9 [Reserved].

 

      1.10 Late Charge. If Borrower shall fail to make any payment due hereunder

or under the terms of any Note (other than payments of interest to be funded by

Lender to itself in accordance with the Budget as an Advance under 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) 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, 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 organized or

maintains a lending office (all such non-excluded taxes, duties, levies,

imposts, deductions, assessments, fees, withholdings or similar charges, and

liabilities being hereinafter referred to as "Taxes"). 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)

 

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  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) evidence of 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) [Reserved].

 

      (d) 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. Payment under this subsection (d)

shall be made within 30 days after the date the Lender or the Administrative

Agent makes a demand therefor.

 

      (e) Without prejudice to the survival of any other agreement of Borrower

hereunder, the agreements and obligations of Borrower contained in this Section

shall survive the termination of the Commitments and the payment in full of all

the other Obligations.

 

      1.12 Payment Schedule and Maturity Date.

 

      (a) The principal of the Loan shall be due and payable in the form of

Release Fees as described more particularly in paragraph (b) below. 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 15th day of the calendar month for the previous

calendar month after the date of this Agreement, and Administrative Agent shall

pay Lenders interest each month as an advance on the Loan, until all principal

and accrued interest owing on this Loan shall have been fully paid and

satisfied.

 

      (b) Administrative Agent will release each condominium Unit from the lien

of its mortgage upon (i) satisfaction of all requirements set forth in the

Mortgage; (ii) payment, in each case, to Administrative Agent of a release fee

("Release Fee") equal to the greater of (a) 100% of the net sales proceeds of

the applicable Unit, or (b) 92% of the gross sales price of the applicable Unit,

subject to the minimum release price for each Unit set forth on Exhibit "E"

attached hereto and incorporated herein by reference; (iii) receipt by Lender of

fully executed copies of the sales contract and closing statement for each Unit

to be so released; and (iv) receipt by Lender of appropriate releases to be

executed. In all cases, such Release Fees shall be remitted to Administrative

Agent at the closing of the sale of the Unit.

 

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      1.13 Advances and Payments.

 

      (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 7-l", the related AIA Document G-702 and G-703, with written

certification by Borrower's Architect thereon and, if available, the related

written certification of the Construction Consultant. Administrative Agent shall

notify one designated person at 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 one (1) Business Day prior to the advance

Funding Date for all 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 1:00 p.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 Borrowers on the applicable Funding Date by advancing

such funds to Borrowers in accordance with the provisions of Exhibit "F".

 

      (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 promptly distribute to

each Lender, such funds as it may be entitled to receive hereunder, (1) 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 Agent receives such funds after 12:00 p.m.

Administrative Agent's Time.

 

      (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.

 

      (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: (1) 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) 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

 

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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

with interest thereon for the period from the date 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. Nothing herein

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 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 Lender hereunder, the

Administrative Agent shall return such funds (in like funds as received from

such Lender) to such Lender, with 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.

 

      (h) All Loan disbursements shall be made only in accordance with the Loan

allocations in the Budget, the Cost Breakdown and the requirements for Loan

disbursements contained in the Loan Documents. Furthermore, disbursements under

the Note shall not commence until Borrower has met the pre-sales requirement

described herein in Section 1.13(i) and the Loan has been syndicated in the

manner described in Article 6 below. In addition, all construction-related

disbursements shall be subject to the approval, which may not be unreasonably

withheld or delayed, of Administrative Agent's construction consultant. The

Administrative Agent shall not be obligated to disburse any undrawn interest or

any cost savings realized on any line item in the Budget under a different line

item in the Budget; subject, however, to Borrower's ability to reallocate such

amounts as permitted under Section 1.4.

 

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      (i) The form of contract for the purchase and sale of a Unit (a "Sales

Contract") has been received by and is acceptable to Administrative Agent. If a

Sales Contract materially differs from the form approved by Administrative

Agent, then such Sales Contract shall be subject to Administrative Agent's

approval in its sole discretion. All Sales Contracts shall require a

non-refundable deposit (a "Deposit") to be held by Administrative Agent in the

amount of 10% of the gross sales price for the applicable Unit. No Sales

Contract shall contain any contingencies (other than as approved by

Administrative Agent) which would make the contract non-binding on the

purchaser. Funding shall be limited to no more than fifty percent (50%) of the

Appraised Value of the Land ("Initial Funding"; and such funding shall be

initially advanced only by Administrative Agent) until such time as Borrower has

submitted to Administrative Agent copies of executed, valid and binding Sales

Contracts in form and substance acceptable to Administrative Agent in the

aggregate gross amount of $76,000,000.00 at which time Borrower may borrow up to

one hundred percent (100%) of the Loan proceeds in accordance with the terms of

the Loan Documents (and the Initial Funding shall then be shared pro rata among

the Lenders). Multiple Unit purchasers shall be allowed only with the specific

permission of the Administrative Agent.

 

      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"), (1) 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," Exhibit "C-1" 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. Notwithstanding the

foregoing, Administrative Agent Advances after the Initial Funding which are

equal to or greater than $5,000,000.00 shall require the approval of the

Required Lenders, which shall not be unreasonably withheld.

 

      (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 shall bear interest at the rate applicable to such amount

under the Loan. Administrative Agent shall notify each Lender in writing of each

Administrative Agent Advance. Upon receipt of notice from Administrative Agent

of its making of an Administrative Agent Advance, other than the Initial

Funding, 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 12:00 p.m. (Administrative

Agent's Time).

 

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      1.15 Defaulting Lender.

 

      (a) Notice and Cure of Lender Default; Election Period; Electing Lenders.

Administrative Agent shall promptly 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 five (5) Business 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 after such notice to Administrative

Agent for reimbursement to Administrative Agent or 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. Further, if no Electing Lender

commits in writing to fund timely the Defaulting Lender Obligation hereunder,

Borrower may fund any such amounts and request a refund of such amounts upon the

replacement of a Defaulting Lender as set forth in Section 1.17 hereinbelow.

 

      (b) 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.

Administrative Agent shall hold all such payments received or retained by it for

the account of such Defaulting Lender; Amounts payable to a Defaulting Lender

shall be paid by Administrative Agent to reimburse Administrative Agent and any

Electing Lender pro rata for all Funds Defaulting Lender Payment Amounts. Solely

for the purposes of voting or consenting to matters with respect 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

 

                                       11

 

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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, 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.

 

      (c) 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 an Assignment and Assumption

covering that Lender's Commitment and otherwise comply with Section 6.5. If a

Defaulting Lender refuses to execute and deliver such Assignment and Assumption

or otherwise comply with Section 6.5, such Defaulting 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 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.

 

      (d) 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.

 

                                       12

 

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      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 Lenders

shall have any liability for the acts of any other Lenders. No Lenders shall be

responsible to Borrower or any other person for any failure by any other Lenders

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) [reserved]; (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; (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 Removal and/or Replacement of Lenders. If any Lender is a Defaulting

Lender or under any other circumstances set forth in the Loan Documents

providing that Borrower shall have the right to remove and/or replace a Lender

as a party to this Agreement, Borrower may, upon notice to such Lender and the

Administrative Agent, remove such Lender by causing such Lender to assign its

Commitment to one or more other lenders or Eligible Assignees acceptable to

Borrower and the Administrative Agent. Any removed or replaced Lender shall be

entitled to: (x) 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, payment in full of all principal, interest and fees owing

to such Lender through the date of termination or assignment, (y) appropriate

assurances and indemnities (which may include letters of credit) as such Lender

may reasonably require with respect to its participation interest in any Letters

of Credit then outstanding and (z) 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 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. Notwithstanding anything to the contrary in this

Agreement, Borrower shall retain all rights and remedies available at law or in

equity against any Defaulting Lender, whether or not such Defaulting Lender is

replaced with another Lender hereunder.

 

                                       13

 

<PAGE>

 

                 ARTICLE 2- ADDITIONAL COVENANTS AND AGREEMENTS

 

      2.1 Construction of the Improvements. Borrower shall begin site work for

the Improvements no later than April 29, 2005 and must begin construction of the

Improvements no later than June 30, 2005. Thereafter, Borrower shall prosecute

the construction of the Improvements with diligence and continuity, in a good

and workmanlike manner, and in accordance with sound building and engineering

practices, all applicable laws and governmental requirements, the Plans and the

Loan Documents. Borrower shall not permit cessation of work for a period in

excess of thirty (30) days, except for Excusable Delays. Borrower shall achieve

substantial completion of construction of the Improvements free and clear of all

liens (except Permitted Encumbrances and liens created by the Loan Documents),

and shall obtain a certificate of occupancy and all other permits, licenses and

approvals from all applicable governmental authorities required for the

occupancy, use and operation of the Improvements, in each case reasonably

satisfactory to Administrative Agent, on or before the Completion Date. Borrower

shall promptly correct (a) any material defect in the Improvements, (b) any

material departure from the Plans not approved by Administrative Agent, or any

material departure from governmental requirements, or (c) any material

encroachment by any Improvements or structure on any building setback line,

easement, property line or restricted area. The Improvements shall be

substantially completed, as determined by the issuance of a certificate of

occupancy, on or before the Completion Date.

 

      2.2 Plans and Changes. No construction shall be undertaken on the Land

except as shown in the Plans. Borrower assumes full responsibility for the

compliance of the Plans and the Property with all laws, governmental

requirements and sound building and engineering practices. Except as otherwise

provided herein, no plans or specifications, or any changes thereto, shall be

included as part of the Plans until approved by Administrative Agent,

Construction Consultant, all applicable governmental authorities, and all other

parties required under the Loan Documents. Without Administrative Agent's prior

written consent, which shall not be unreasonably withheld or delayed, Borrower

shall not change or modify the Plans, agree to any change order, or allow any

extras to any contractor or any subcontractor, except that Borrower may make

Permitted Changes if: (a) Borrower notifies Administrative Agent in writing of

the change or extra with appropriate supporting documentation and information;

(b) Borrower obtains the approval of the applicable contractor, Borrower's

architect and all sureties, if required; (c) the structural integrity, quality

and standard of workmanship of the Improvements is not impaired by such change

or extra; (d) no substantial change in architectural appearance is effected by

such change or extra; (e) no default in any obligation to any person or

violation of any law or governmental requirement would result from such change

or extra; (f) if applicable, Borrower complies with Section 1.5 of this

Agreement to cover any excess cost resulting from the change or extra; (g)

completion of the Improvements by the Completion Date will not be affected; and

(h) [Reserved]. Administrative Agent shall not be obligated to review a proposed

change unless it has received all documents necessary to review such change,

including the change order, cost estimates, plans and specifications.

 

      2.3 Contracts. Without Administrative Agent's prior written approval

(which shall not be unreasonably withheld or delayed) as to parties, terms, and

all other matters, Borrower shall not (a) enter into any material contract

(hereinafter defined) for the performance of any work or the supplying of any

labor, materials or services for the design or construction of the

 

                                       14

 

<PAGE>

 

Improvements, (b) enter into any management, leasing, maintenance or other

similar contract pertaining to the Property not described in clause (a) that is

not unconditionally terminable by Borrower or any successor owner without

penalty or payment on not more than thirty (30) days notice to the other party

thereunder, or (c) materially modify or amend, or terminate (other than as a

result of default by the contractor) any material contracts. Borrower shall not

default in any material respect under any contract, Borrower shall not permit

any contract to terminate by reason of any failure of Borrower to perform

thereunder, and Borrower shall promptly notify Administrative Agent of any

default in any material respect thereunder. Borrower will deliver to

Administrative Agent, upon request of Administrative Agent, the names and

addresses of all persons or entities known to Borrower with whom each contractor

has contracted or intends to contract for the construction of the Improvements

or for the furnishing of labor or materials therefor. With respect to contracts

for the performance of any work or the supplying of any labor, materials or

services, a "material" contract is one which exceeds $500,000.00 in total price.

 

      2.4 Assignment of Contracts and Plans. As additional security for the

Obligations, Borrower hereby transfers and assigns to Administrative Agent for

the ratable benefit of Administrative Agent and Lenders all of Borrower's right,

title and interest, but not its liability, in, under, and to all construction,

architectural and design contracts, and the Plans, and agrees that all of the

same are covered by the security agreement provisions of the Mortgage. Borrower

agrees to deliver to Administrative Agent from time to time upon Administrative

Agent's request such consents to the foregoing assignment from parties

contracting with Borrower as Administrative Agent reasonably may require.

Neither this assignment nor any action by Administrative Agent or Lenders shall

constitute an assumption by Administrative Agent or Lenders of any obligation

under any contract or with respect to the Plans, Borrower hereby agrees to

perform all of its obligations under any contract, and Borrower shall continue

to be liable for all obligations of Borrower with respect thereto.

Administrative Agent shall have the right at any time following written notice

to Borrower (but shall have no obligation) to take in its name or in the name of

Borrower such action as Administrative Agent may determine to be necessary to

cure any default in any material respect of Borrower under any contract or with

respect to the Plans or to protect the rights of Borrower, Administrative Agent

or Lenders with respect thereto. Borrower irrevocably constitutes and appoints

Administrative Agent as Borrower's attorney-in-fact, which power of attorney is

coupled with an interest and irrevocable, to enforce in Borrower's name or in

Administrative Agent's and Lender's name, following written notice to Borrower

of the occurrence, and during the continuance, of a Default, all rights of

Borrower under any contract or with respect to the Plans. Administrative Agent

shall incur no liability if any action so taken by it or on its behalf shall

prove to be inadequate or invalid, absent gross negligence or reckless or

willful conduct on the part of Administrative Agent or any Lender. Borrower

indemnifies and holds Administrative Agent and Lenders harmless against and from

any loss, cost, liability or expense (including, but not limited to,

consultants' fees and expenses and attorneys' fees and expenses) incurred in

connection with Borrower's failure to perform such contracts or any action taken

by Administrative Agent or Lenders with respect to such contracts, absent gross

negligence or reckless or willful conduct on the part of Administrative Agent or

any Lender. Administrative Agent on behalf of the Lenders may use the Plans for

any purpose relating to the Improvements. Borrower represents and warrants to

Administrative Agent and Lenders that the copy of any contract furnished or to

be furnished to Administrative Agent is and shall be a true and complete copy

thereof, that the copies of the

 

                                       15

<PAGE>

 

Plans delivered to Administrative Agent are and shall be true and complete

copies of the Plans, that there have been no material modifications thereof

which are not fully set forth in the copies delivered, and that Borrower's

interest therein is not subject to any claim, setoff, or encumbrance.

 

      2.5 Storage of Materials. Borrower shall cause all materials supplied for

the construction of the Improvements, but not yet affixed to or incorporated

into the Improvements or the Land, to be stored on the Land with adequate

safeguards to prevent loss, theft, damage or commingling with materials for

other projects. Without Administrative Agent's approval, which shall not be

unreasonably withheld or delayed, Borrower shall not purchase or order materials

for delivery more than ninety (90) days prior to the scheduled incorporation of

such materials into the Improvements.

 

      2.6 Construction Consultant. Borrower shall engage a licensed supervising

architect, reasonably acceptable to Administrative Agent, who shall make and

certify to Administrative Agent the results of regular periodic inspections of

the construction through completion of the Improvements, including, but not

limited to compliance with the Plans and the percentage of Loan funds requested

to be drawn in relation to the percentage of work completed as conditions to

Loan advances. In addition, Administrative Agent may retain the services of a

Construction Consultant, whose duties may include, among others, reviewing the

Plans and any proposed changes to the Plans, performing construction cost

analyses, observing work in place and reviewing Draw Requests. The duties of

Construction Consultant run solely to Administrative Agent for the ratable

benefit of Lenders, and Construction Consultant shall have no obligations or

responsibilities whatsoever to Borrower, Borrower's architect, engineer,

contractor or any of their agents or employees. Unless prohibited by applicable

law, all fees, costs, and expenses of Construction Consultant shall be paid by

Borrower. Borrower shall cooperate with Construction Consultant and will furnish

to Construction Consultant such information and other material as Construction

Consultant reasonably considers necessary or useful in performing its duties.

 

      2.7 Inspection. Administrative Agent and its agents, including

Construction Consultant, 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, including

Construction Consultant, for inspection and copying, all Plans, shop drawings,

specifications, books and records, and other documents and information that

Administrative Agent reasonably may request from time to time.

 

      2.8 Notice to Lenders. Borrower shall promptly within five (5) days after

it obtains knowledge of the occurrence of any of the following events, notify

each Lender in writing thereof, specifying in each case the action Borrower has

taken or will take with respect thereto: (a) any violation in any material

respect of any law or governmental requirement; (b) any litigation, arbitration

or governmental investigation or proceeding instituted or threatened against

Borrower or the Property, and any material development therein; (c) any actual

or threatened 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 in writing 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

 

                                       16

<PAGE>

 

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 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 material lien filed against the

Property or any stop notice served on Borrower in connection with construction

of the Improvements; or (h) any material required permit, license, certificate

or approval with respect to the Project lapses or ceases to be in full force and

effect.

 

      2.9 Financial Statements. Borrower shall deliver to Administrative Agent

the Financial Statements and other statements and information at the times and

for the periods described in (a) the Basic Information and (b) any other Loan

Document, and Borrower shall deliver to Administrative Agent from time to time

such additional financial statements and information as Administrative Agent

reasonably may at any time request. Borrower will make all of its books, records

and accounts available to Administrative Agent and its representatives at all

reasonable times at the Property 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 or in the construction progress of the

Improvements. Administrative Agent shall provide a copy of such Financial

Statements to each Lender upon receipt.

 

      2.10 Other Information. Borrower shall furnish to Administrative Agent

from time to time upon Administrative Agent's request (i) copies of all

subcontracts entered into by contractors or subcontractors and the names and

addresses of all persons or entities with whom Borrower or any contractor has

contracted or intends to contract for the construction of the Improvements or

the furnishing of labor or materials in connection therewith; (ii) copies of 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 Mortgage; (iii) a list of all unpaid bills for labor and

materials with respect to construction of the 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

construction of the Improvements; (v) current or updated detailed Project

schedules or construction schedules; and (vi) such other information relating to

Borrower, Guarantor, the Improvements, the Property, or any indemnitor or other

person or party connected with Borrower, the Loan, the construction of the

Improvements or any security for the Loan as is reasonably requested by

Administrative Agent.

 

      2.11 Reports and Testing. Borrower shall (a) 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; (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

likely to have a Material Adverse Effect relating to the Land, the Improvements

or any such materials.

 

      2.12 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

 

                                       17

<PAGE>

 

approved by Administrative Agent indicating that the construction financing for

the Property has been provided by Lenders.

 

      2.13 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 shall be appointed by

Administrative Agent and shall be reasonably satisfactory to Borrower and

Administrative Agent (including satisfaction of applicable regulatory

requirements). The cost of any such appraisal shall be borne by Borrower

provided that Borrower shall be obligated to pay for appraisals not more than

once every three (3) years unless the Loan is being renewed, extended, modified,

or accelerated or Lender is otherwise required by law, regulation, order or

other directive from any regulatory agency having jurisdiction over Lender to

obtain such appraisal and such cost shall be 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 upon receipt.

 

      2.14 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.

 

      2.15 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. Section 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 2.15 as Administrative Agent may from time to

time reasonably request.

 

      2.16 Agreement to Subordinate Mortgage to Master Deed. Provided that a

certificate of occupancy is issued for the Improvements substantially in

accordance with the approved Plans and no Default has occurred and is continuing

under the Loan, Administrative Agent, on behalf of the Lenders, agrees to

subordinate the Mortgage to the terms of the master deed creating the horizontal

property regime for the Improvements. The master deed and all related regime

 

                                       18

<PAGE>

 

documents must be in form and substance reasonably acceptable to Administrative

Agent and Borrower agrees to (i) amend its Mortgage as may be reasonably

acceptable to Administrative Agent including, without limitation, to include a

condominium rider reasonably acceptable to Administrative Agent and (ii) execute

an assignment of declarant's rights with respect to such regime documents in

form and content reasonably acceptable to Administrative Agent.

 

      2.17 Reserved.

 

      2.18 Agreement to Subordinate Mortgage to Master Declaration/Reciprocal

Easement Agreement. Upon request of Borrower, Administrative Agent, on behalf of

the Lenders, agrees to subordinate the Mortgage to (i) a Master Declaration of

Covenants, Conditions and Restrictions covering approximately 10.498 acres of

land constituted as the Land and the Hilton and land associated with the Hilton;

and (ii) a cooperative use and reciprocal easement agreement between the owner

of the Hilton and the Borrower relative to the Parking Deck (including the

mandatory reconveyance of the Parking Deck to the owner of the Hilton upon

completion of the Project), on terms and conditions acceptable to the

Administrative Agent.

 

                    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) 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 Grande Palms Tract, 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, subject to general principles of equity and

laws affecting creditors' rights generally; (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 in any material respect any applicable

law, 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 Plans are complete in

all material respects, contain all necessary detail and are adequate for

construction of the Improvements, are satisfactory to Borrower, have been

approved by all applicable governmental authorities, have been accepted by each

contractor, and comply with the Loan Documents and all applicable laws,

restrictive covenants, and governmental requirements, rules, and regulations;

(g) the Property is not part of a larger tract of land owned by Borrower or any

of its affiliates or Guarantor, is not otherwise included under any unity of

title or similar covenant with other lands not encumbered by the Mortgage, and

will, as of January 1, 2006, constitute a separate tax lot or lots with a

separate tax assessment or assessments for the Land and Improvements,

independent of those for any other lands or improvements; (h) the Land and

Improvements comply with all laws and governmental requirements, including all

subdivision and platting requirements, without reliance on any adjoining or

neighboring property; (i) the Plans do, and the Improvements when constructed

will, comply with all legal requirements regarding access and facilities for

handicapped or disabled persons; (j) Borrower has not directly or indirectly

conveyed, assigned or otherwise disposed of or transferred (or agreed to do so)

any

 

                                       19

<PAGE>

 

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; (k) the construction

schedule for the Project is realistic and the Completion Date is a reasonable

estimate of the time required to complete the Project; (1) 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 financial

condition from the financial condition of Borrower indicated in such Financial

Statements; (m) all utility services necessary for the development of the Land

and the construction of the Improvements and the operation thereof for their

intended purpose are available at the boundaries of the Land, including electric

and natural gas facilities, telephone service, water supply, storm and sanitary

sewer facilities; (n) 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; (o)

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; (p) attached hereto as Exhibit "I" is a list of all

bonds required in connection with completion of the Improvements, and to the

best of Borrower's knowledge, no other bonds or other security are currently

required or will be required prior to completion of the Improvements; (q) prior

to the recordation of the Mortgage, except as disclosed to Administrative Agent

in writing, no work of any kind (including destruction or removal of any

existing improvements, site work, clearing, grading, grubbing, draining or

fencing of the Land) has been or will be commenced or performed on the Land, no

equipment or material has been or will be delivered to or placed upon the Land

for any purpose whatsoever, and no contract (or memorandum or affidavit thereof)

for the supplying of labor, materials, or services for the design or

construction of the Improvements, or the surveying of the Land or Improvements,

nor any affidavit or notice of commencement of construction of the Improvements,

has been or will be *executed or recorded, which could cause a mechanic's or

materialman's lien or similar lien to achieve priority over the Mortgage or the

rights of Administrative Agent and Lenders thereunder.

 

                         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) any of the Indebtedness is not

paid when due, whether on the scheduled due date or upon acceleration, maturity

or otherwise; (b) any covenant, agreement, condition, representation or warranty

in this Agreement (other than covenants to pay the Indebtedness and other than

Defaults expressly listed in this Section) is not fully and timely performed,

observed or kept, and such failure continues for thirty (30) days following

written notice to Borrower (or, if more than 30 days is required to cure such

failure, for a reasonable period of time, not to exceed 90 days, so long as

Borrower promptly commences such cure and diligently pursues it to completion);

(c) the occurrence of a Default under any other Loan Document (taking into

account any applicable notice and cure period set forth in such Loan Document);

(d) construction of the Improvements ceases for more than thirty (30) days

except for delays which will not jeopardize the completion of the Project by the

Completion Date ("Excusable Delays"); (e) the construction of the Improvements,

or any materials for which an

 

                                       20

<PAGE>

 

advance has been requested, fails to comply in all material respects with the

Plans, the Loan Documents, any laws or governmental requirements, or any

applicable restrictive covenants and such defect has not been cured within

thirty (30) days of Borrower learning of such defect; (f) construction of the

Improvements is abandoned, Administrative Agent determines that construction of

the Improvements in accordance with this Agreement will not be completed on or

before the Completion Date, or Borrower fails to complete construction of the

Improvements (and obtain all applicable permits, licenses, certificates and

approvals) in accordance with this Agreement on or before the Completion Date;

(g) any material required permit, license, certificate or approval with respect

to the Property lapses or ceases to be in full force and effect; (h) [reserved];

(i) a Borrower's Deposit is not made with, or Guarantor's acknowledgment

delivered to, Administrative Agent within seven (7) days after Administrative

Agent's request therefor in accordance with Section 1.5; (j) construction is

enjoined or Borrower, Administrative Agent or a Lender is enjoined or prohibited

from performing any of its respective obligations under any of the Loan

Documents and such injunction is not dismissed within thirty (30) days; (k) the

owner of the Property enters into any lease of part or all of the Property which

does not comply with the Loan Documents; (1) a lien for the performance of work

or the supply of materials which is established against the Property, or any

stop notice served on Borrower, the general contractor, Administrative Agent or

a Lender, remains unsatisfied or unbonded for a period of twenty (20) days after

the date Borrower learns of such filing or service; (m) should Borrower fail to

submit to Administrative Agent copies of executed, valid and binding Sales

Contracts in the aggregate gross amount of $76,000,000.00 within ninety (90)

days of the date of this Agreement; (n) the entry of a judgment against Borrower

or the issuance of any attachment, sequestration, or similar writ levied upon

any of the Property which is not discharged within a period of thirty (30) days;

(o) Administrative Agent determines that an event or condition that could

reasonably be expected to have a Material Adverse Effect has occurred in the

financial condition of Borrower or in the condition of the Property; (p)

[reserved]; (q) the dissolution or insolvency of Borrower or Guarantor; (r)

[reserved]; (s) a default occurs under any other Loan Document which is not

cured within any applicable notice and cure period provided therein; (t) if the

Project is or becomes security for any subordinate financing, or is sold or

transferred, directly or indirectly, voluntarily, by operation of law or

otherwise, without Required Lenders' prior written consent; or (u) if there is

any change in the ownership or control of Borrower (other than indirectly, as a

result of a change in the ownership or control of Guarantor) without

Administrative Agent's prior written approval.

 

      4.2 Remedies. Upon a Default, Administrative Agent may with the approval

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;

(c) obtaining appointment of a receiver (to which Borrower hereby consents)

and/or judicial or nonjudicial foreclosure under the Mortgage; or (d) in its own

name on behalf of the Lenders or in the name of Borrower, enter into possession

of the Property, perform all work necessary to complete construction of the

Improvements substantially in accordance with the Plans (as modified as deemed

necessary by Administrative Agent), the Loan Documents, and all applicable Laws,

governmental requirements and restrictive covenants, and continue to employ

Borrower's architect, engineer and any contractor pursuant to the applicable

contracts or otherwise; 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,

 

                                       21

<PAGE>

 

without notice, do any one or more of the following: (a) terminate Lenders'

Commitment to lend and any obligation to disburse any Borrower's Deposit

hereunder; or (b) 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.

 

      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 of a Default, and

Guarantor's failure to pay in full the Indebtedness within ten (10) days

following written notice of such Default to Guarantor: (1) use such sums as are

necessary, including any proceeds of the Loan and any Borrower's Deposit, make

such changes or corrections in the Plans, and employ such architects, engineers,

and contractors as may be required, or as Lenders may otherwise consider

desirable, for the purpose of completing construction of the Improvements

substantially in accordance with the Plans (as modified as deemed necessary by

Administrative Agent or, in the event that such modification exceeds $5,000,000,

with the approval of Required Lenders), the Loan Documents, and all applicable

laws, governmental requirements and restrictive covenants; (ii) execute all

applications and certificates in the name of Borrower which may be required for

completion of construction of the Improvements; (iii) 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; (iv) do every act with respect to the construction of the Improvements

that Borrower may do; (v) prosecute or defend any action or proceeding incident

to the Property, (vi) pay, settle, or compromise all bills and claims so as to

clear title to the Property; and (vii) 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 Mortgage 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

 

                                       22

<PAGE>

 

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 Obligations, payments shall be applied provided

herein. No application of payments, unless sufficient to cure any payment

Default, shall 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,

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) 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.

 

                                        23

<PAGE>

 

      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, 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 all Lenders, if required hereunder, and such request and any action

taken or failure to act pursuant thereto shall be binding upon all the Lenders

and participants. Where this Agreement expressly permits or prohibits an action

unless the Required Lenders or all Lenders, if required hereunder, otherwise

determine, the Administrative Agent shall and in all other instances,

Administrative Agent may, but shall not be required to, initiate any

solicitation for the consent or a vote of Lenders. In the absence of written

instructions from the Required Lenders or all Lenders, if 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 all

Lenders.

 

                                       24

<PAGE>

 

      5.5 Notice of Default. Administrative Agent shall not be deemed to have

knowledge or notice of the occurrence of any Default except in the case of a

payment default, unless Administrative Agent shall have received written notice

from a Lender or Borrower referring to this Agreement and describing such

Default. 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 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.

 

      (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 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,

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

 

                                        25

<PAGE>

 

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, 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; provided, however, that no Lenders 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

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 Obligations hereunder and the resignation or

replacement of Administrative Agent. Notwithstanding the foregoing, a dispute

solely between the Administrative Agent and one or more Lenders shall not be

subject to the indemnification obligations of Lenders set forth herein.

 

      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 without notice to or consent of Lenders. Lenders acknowledge that

Borrower and Bank of America, N.A., as Lender, ("Swap Bank") or an Affiliate of

Swap Bank have entered or may enter into Swap Contract. A portion of the Loan

may be funded to honor Borrower's payment obligations to Swap Bank or such

Affiliate under the terms of such agreement, 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 ProRata 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,

Swap Bank, and the terms "Lender" and "Lenders" include Bank of America, N.A. in

its individual capacity.

 

                                        26

<PAGE>

 

      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 upon 30 days' notice to Lenders. 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 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 the term "Administrative Agent"

shall mean such successor administrative agent, and the retiring Administrative

Agent's appointment, powers and duties as Administrative Agent shall be

terminated. 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 under this

Agreement. If no successor administrative agent has accepted appointment as

Administrative Agent 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 hereunder until such

time, if any, as the Required Lenders appoint a successor agent as provided for

above.

 

      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 the 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 a 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) 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.

 

      (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 liens of

 

                                       27

<PAGE>

 

particular types or items of Loan collateral pursuant to this Section; provided,

however, that (1) 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) [Reserved].

 

      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 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, or costs and expenses

(including those in Section 5.7) and reimbursements then due to Administrative

Agent from Borrower; second, to pay any fees or costs and expenses then due to

Lenders from Borrower; third, to pay pro rata interest due in respect of the

Indebtedness and Administrative Agent Advances; fourth, .to pay or prepay

principal of the Indebtedness and Administrative Agent Advances; and fifth, pro

rata, to pay any remaining Indebtedness due to Defaulting Lenders.

 

      5.12 Benefit. The terms and conditions of this Article are inserted for

the sole benefit of Administrative Agent and Lenders; the same 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 identified on the

facing page or signature pages of this Agreement as a "syndication agent",

"documentation agent", "co-agent" or "lead manager" shall have any right, power,

obligation, liability, responsibility or duty under this Agreement other than

those applicable to all Lenders as such. Without limiting the foregoing, none of

Lenders 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 so identified in deciding to enter into

this Agreement or in taking or not taking action hereunder.

 

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      5.14 Required Position for Administrative Agent. The Administrative Agent

in its capacity as a "Lender" shall maintain a Commitment amount equal to or

greater than the next highest Lender's Commitment amount, up to $25,000,000.00.

 

                     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 or Lender's 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; (b)

deemed to have been given only by a specific writing intended for the purpose

given and executed by Administrative Agent or Lender's; and (c) free from any

limitation or requirement of reasonableness. 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 Plans, the Budget, any contract, any change order, any

lease, or any other matter incident to the Property or the construction of the

Improvements. Administrative Agent's or Lender's acceptance of an assignment of

the Plans for the benefit of Administrative Agent and Lenders shall not

constitute approval of the Plans. Any inspection 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 and Lender's protection only, and shall not constitute an

assumption of responsibility from Borrower or anyone else with regard to the

condition, 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 or the

construction of the Improvements 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 or construction

of the Improvements. Neither Administrative Agent nor any Lender shall be liable

or responsible for, and Borrower shall indemnify each Agent-Related Person and

each Lender and their respective Affiliates, directors, officers, agents,

attorneys and employees (collectively, the "Indemnities") from and against: (a)

any claim, action, loss or cost (including attorney's fees and costs) arising

from or relating to (1) any defect in the Property or the Improvements, (ii) the

performance or default of Borrower, Borrower's surveyors, architects, engineers,

contractors, the Construction Consultant, or any other person, (iii) any failure

to construct, complete, protect or insure the Improvements, (iv) the payment of

costs of labor, materials, or services supplied for the construction of the

Improvements, (v) 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 (vi) 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 relating to or arising out of or in connection

with (1) 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

 

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contemplated thereby, (ii) any Commitment or Loan, 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 obtained by third parties through

Borrower's use of internet, Intralinks or other similar information transmission

systems in connection with this Agreement; and (d) any and all liabilities,

losses, costs or expenses (including attorney fees and costs) that any

Indemnitee 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

Indemnitee 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"); provided that such

indemnity shall not, as to any Indemnitee, be available to the extent that such

liabilities, obligations, losses, damages, penalties, actions, judgments, suits,

costs, expenses or disbursements result from the gross negligence or reckless or

willful misconduct of such Indemnitee. 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. Inspection shall not constitute an acknowledgment or representation by

Administrative Agent, any Lender or the Construction Consultant that there has

been or will be compliance with the Plans, the Loan Documents, or applicable

laws, governmental requirements and restrictive covenants, or that the

construction is free from defective materials or workmanship. Inspection,

whether or not followed by notice of Default, shall not constitute a waiver of

any Default then existing, or a waiver of Administrative Agent and Lender's

right thereafter to insist that the Improvements be constructed in accordance

with the Plans, the Loan Documents, and all applicable laws, governmental

requirements and restrictive covenants. Administrative Agent's failure to

inspect shall not constitute a waiver of any of Administrative Agent or Lender's

rights under the Loan Documents or at law or in equity.

 

      (a) Participation or Sale of Loan. The Administrative Agent and Banc of

America Securities LLC (the "Lead Arranger") have heretofore entered into a

letter agreement with the Borrower dated as of March 25, 2005, regarding the

syndication of the Loan. Additionally, Borrower acknowledges that portions of

the Loan may be sold, syndicated or participated by the Lead Arranger and

Borrower hereby agrees to fully cooperate with the Lead Arranger and

Administrative Agent with respect to such syndication.

 

      6.2 Miscellaneous. This Agreement may be executed in multiple

counterparts, all of which are identical, and all of which counterparts together

shall constitute one and the same instrument. 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 South Carolina law (without regard to any conflict of laws

principles) and applicable United States federal law.

 

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      (a) Quality of Documents. Each document and item required to be submitted

to Administrative Agent pursuant to this Commitment shall be satisfactory in

form and substance to Administrative Agent and its legal counsel.

 

      6.3 Notices.

 

      (a) Modes of Delivery; Changes. Except as otherwise provided herein, all

notices, requests, consents, demands and other communications required or which

any party desires to give under this Agreement or any other Loan Document shall

be in writing and, unless otherwise specifically provided in such other Loan

Document, 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(b) below, a

confirmatory duplicate copy sent by first class United States mail), addressed

to the party to whom directed at the addresses set forth at the end of this

Agreement or by (subject to subsection 6.3(c) below) sent to the electronic mail

address 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, or e-mail, 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.

 

      (b) 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.

 

      (c) 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.

 

      (d) Reliance by Administrative Agent and Lenders. The Administrative Agent

and the Lenders shall be entitled to rely and act upon any notices (including

telephonic Construction Draw requests) purportedly given by or on behalf of the

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,

varied from any confirmation thereof. The Borrower shall indemnify each

Agent-Related Person and each Lender from all losses, costs, expenses and

liabilities resulting from the reliance by such person on each notice

purportedly given by or on behalf of the Borrower. All telephonic

 

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notices to and other communications with the Administrative Agent may be

recorded by the Administrative Agent, and each of the parties hereto hereby

consents to such recording. Except with respect to amendments to the Loan

Documents as provided in Section 6.9 below, 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 the Borrower makes a payment 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 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 the Borrower may not assign or otherwise transfer

any of its rights or obligations hereunder without the prior written consent of

Administrative Agent and each Lender (and any attempted assignment or transfer

by the Borrower without such consent shall be null and void). Nothing in this

Agreement, expressed or implied, shall be construed to confer upon any person

(other than the parties hereto, their respective successors and assigns

permitted hereby, Guarantor and, to the extent expressly contemplated hereby,

the Indemnitees) 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 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

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

 

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<PAGE>

 

Affiliate of a Lender or an Approved Fund 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 the Administrative Agent, shall not be less than $10,000,000 unless

each of the Administrative Agent and, so long as no Default has occurred and is

continuing, the 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, and

 

            (iii) the parties to each assignment shall execute and deliver to

the Administrative Agent an Assignment and Assumption, together with a

processing and recordation fee of $3,500.00 plus the cost of any applicable

endorsement of the Title Insurance or new Title Insurance, plus all reasonable

attorneys' fees incurred by Lender (for which amounts Borrower shall not be

liable if such assignment occurs prior to Default).

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant

to subsection (c) of this Section, from and after the effective date specified

in each Assignment and Assumption, the assignee hereunder 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 hereunder shall, to the extent of the interest assigned

by such Assignment and Assumption, be released from its obligations under this

Agreement (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 obligation surviving

termination of this Agreement. Upon request, Administrative Agent shall prepare

and the Borrower, subject to return to Borrower of the original note or notes

being replaced, shall execute and deliver new or replacement Notes ("Replacement

Notes") to the assigning Lender and the assignee Lender evidencing their

respective Pro Rata Shares of the Loan. 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) The Administrative Agent, acting solely for this purpose as an agent

of the Borrower, shall forward the Assignment and Assumption, and the

Replacement Notes (if any) to the Title Insurer for issuance of an applicable

endorsement to the Title Insurance or new Title Insurance, and shall maintain at

the 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

the 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,

and the Borrower, the Administrative Agent and the 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

 

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<PAGE>

 

contrary. The Register shall be available for inspection by the 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 the

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 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) the Borrower, the Administrative Agent and the other

Lenders shall continue to deal solely and directly with such Lender in

connection with such Lender's rights and obligations under this Agreement, and

(iv) except to the extent consented 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 Notes, 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 the 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 (1) of the provision to the

first sentence of subsection (b) above), the Borrower shall be deemed to have

given its consent five Business Days after the date notice thereof has been

delivered by the assigning Lender (through the Administrative Agent) unless such

consent is expressly refused by the Borrower prior to such fifth Business Day.

 

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

 

      "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 the Administrative Agent, and, unless a Default has occurred

      and is continuing, the Borrower (each such approval not to be unreasonably

      withheld or delayed); provided, however, in no event shall the term

      Eligible Assignee include a direct competitor in the hospitality industry

      to Fe1Cor Lodging Limited Partnership without the consent of Borrower

      which consent may be withheld in the sole and absolute discretion of

      Borrower.

 

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      "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.

 

      "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.

 

      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

regulations or by any subpoena or similar legal process; (d) to any other party

to this Agreement or Guarantor; (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; (0 subject to an agreement containing

provisions substantially the same as those of this Section, to (1) 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

Agreement or credit derivative transaction relating to obligations of the

Borrower; (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 (ii) becomes available to the Administrative Agent or any Lender

on a nonconfidential basis from a source other than the Borrower; or (i) to the

National Association of Insurance Commissioners or any other similar

organization or any nationally recognized rating agency that requires access to

information about a Lender's or its Affiliates' investment portfolio in

connection with ratings issued with respect to such Lender or its Affiliates.

For the purposes of this Section, "Information" means all information received

from the Borrower relating to the Borrower or its business or Guarantor, 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

after the date hereof, such info