AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING

Exhibit 10.3

AMENDED AND RESTATED
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING

          THIS AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “ Security Instrument ”) is made as of October 10, 2006, by TARRAGON LUGANO LLC , a Delaware limited liability company, BALLANTRAE TARRAGON LLC , a Florida limited liability company, REFLECTION LAKES TARRAGON, LLC , a Florida limited liability company, OMNI MONTERRA LLC , a Florida limited liability company, YBOR CITY TARRAGON, LLC , a Delaware limited liability company, and MADISON AT PARK WEST TARRAGON, LLC , a South Carolina limited liability company (each a “ Mortgagor ” and collectively the “ Borrower ”), whose address is c/o 423 West 55th Street, 12th Fl., New York, New York 10019, in favor of BARCLAYS CAPITAL REAL ESTATE INC. , a Delaware corporation, its successors and assigns (“ Lender ”), whose address is 200 Park Avenue, New York, New York 10166.

RECITALS

          A. Lender is the mortgagee under a consolidated mortgage from Borrower as mortgagor (the “ Previous Mortgage ”), as more particularly set forth in a certain Mortgage Consolidation and Spreader Agreement of even date herewith made by Borrower as mortgagors and Lender as mortgagee (the “ Consolidation Agreement ”), a counterpart of which was recorded in the Public Records of the same Florida county and on the same date as this counterpart of the Security Instrument is being recorded, with the recording information for said counterpart of the Consolidation Agreement being set forth below:

          Official Records Book                      , Page                      , and/or

          Clerk’s File Number                                          

          B. The Consolidation Agreement amended and consolidated into one mortgage instrument five previously separate Florida mortgages respectively recorded in Palm Beach County, Hillsborough County, Lee County, Lee County and Seminole County, Florida and more particularly identified in Exhibit B of the Consolidation Agreement, encumbering the Florida real property identified in Exhibits A-1 through A-5 inclusive attached thereto and hereto (the “ Florida Property ”), and counterparts of the Consolidation Agreement and of this Security Instrument are being recorded in each of said Florida counties.

          C. In addition, the Consolidation Agreement spread and extended the lien of the consolidated mortgage to encumber the “South Carolina Property” as defined in the Consolidation Agreement and more particularly described in Exhibit A-6 attached thereto and hereto, and counterparts of the Consolidation Agreement and this Security Instrument (or other security instruments complying with South Carolina law) are being recorded in the South Carolina county where the South Carolina Property is located.

          D. This amended and restated Security Instrument is the “Mortgage” referred to in the Consolidation Agreement. By executing this Security Instrument, Lender and Borrower desire to amend, restate, supersede and replace the Previous Mortgage in its entirety as set forth herein as security for the following described loans from Lender to the respective Mortgagors (the “ Loans ”), each governed by a Loan Agreement as amended by an Amendment to Loan Agreement of even date herewith made by and between Lender and the respective Mortgagor (as so amended, each a “ Loan Agreement ” and collectively, the “ Loan Agreements ”) and each evidenced by one or more Amended and Restated Promissory Notes of even date herewith made in favor of Lender by the respective Mortgagors (each a “ Note ” and collectively, the “ Notes ”) in the respective principal amounts set forth below:

		Principal Amount of Notes and
Mortgagor		Loans
Tarragon Lugano LLC		$	53,303,000
Ballantrae Tarragon LLC		$	40,393,000
Reflection Lakes Tarragon, LLC		$	50,076,000
Omni Monterra LLC		$	41,200,000
Ybor City Tarragon, LLC		$	7,142,000
Madison at Park West Tarragon, LLC		$	22,886,000
Aggregate Principal Amount:		$	215,000,000

          NOW, THEREFORE, in consideration of the foregoing recitals and the sum of ten dollars and other good and valuable considerations, Mortgagors and Lender agree that the Previous Mortgage is hereby renewed, amended and restated in its entirety as set forth hereinbelow and shall be superseded and replaced by this Security Instrument, all as security for the Loans and the other “Obligations” (as defined hereinbelow), but without loss of priority or novation of the lien and security interests of the Previous Mortgage, which lien and security interests are hereby ratified and confirmed on the terms and conditions set forth in this Security Instrument.

ARTICLE I

DEFINED TERMS

          Section 1.01 Defined Terms . Capitalized terms used in this Security Instrument and not specifically defined in this Security Instrument have the meaning provided in the respective Loan Agreements. Each of the Mortgagors is included in the term “ Borrower ” as defined in this Security Instrument and each of them makes the representations, warranties, covenants and agreements of the Borrower set forth herein; provided, however, that notwithstanding said definition of “Borrower” or any other provision of this Security Instrument:

(i) each Mortgagor is and shall be the sole maker and primary obligor with respect to the respective Note made by such Mortgagor, and the other Mortgagors are not liable with respect to such Note as makers thereof; and (ii) each Mortgagor is and shall be the sole grantor of the mortgage lien and security interest granted in this Security Instrument against the respective property of such Mortgagor, as respectively identified in attached Exhibit A-1 through Exhibit A-6 inclusive.

ARTICLE II

GRANT OF SECURITY

          Section 2.01 Property Mortgaged . Borrower does hereby irrevocably deed, mortgage, grant, bargain, sell, assign, pledge, warrant, transfer and convey to Lender, and to its successors and assigns as Lender, as security for the Obligations, with power of sale, the following property, rights, interests and estates, now owned or hereafter acquired by Borrower (collectively, “ Property ” ):

          (a) Land . The land described in Exhibit A-1 through Exhibit A-6 inclusive attached hereto and made a part hereof, together with all estates and development rights now existing or hereafter acquired for use in connection therewith ( “ Land ” );

          (b) Additional Land . All land that, from time to time, by supplemental deed or otherwise, may be expressly made subject to this Security Instrument, and all estates and development rights hereafter acquired by Borrower for use in connection with such land (also, the “ Land ” );

          (c) Improvements . All buildings, structures, improvements and fixtures now or hereafter erected or located on the Land ( “ Improvements ” );

          (d) Easements . All easements, rights-of-way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and/or the Improvements and the reversion and reversions, remainder and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof, and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Borrower of, in and to the Land and/or Improvements and every part and parcel thereof, with all appurtenances thereto, in each case to the extent of Borrower’s interest therein;

          (e) Fixtures and Personal Property . All machinery, equipment, fixtures (including, without limitation, all heating, air conditioning, plumbing, lighting, communications and elevator fixtures), furnishings, building supplies and materials, and all other personal property of every kind and nature whatsoever owned by Borrower (or in which Borrower has or hereafter acquires an interest) and now or hereafter located upon, or appurtenant to, the Property or used or useable in the present or future operation and occupancy of the Property, along with

all accessions, replacements or substitutions of all or any portion thereof (collectively, “ Personal Property ” );

          (f) Leases and Rents . Subject to the terms of Section 2.03(b) hereof, all leases, subleases, licenses and other agreements granting others the right to use or occupy all or any part of the Property together with all restatements, renewals, extensions, amendments and supplements thereto ( “ Leases ” ), now existing or hereafter entered into, and whether entered before or after the filing by or against Borrower of any petition for relief under the Bankruptcy Code, and all of Borrower’s right, title and interest in the Leases, including, without limitation (i) all guarantees, letters of credit and any other credit support given by any tenant or guarantor in connection therewith ( “ Lease Guaranties ” ), (ii) all cash, notes, or security deposited thereunder to secure the performance by the tenants of their obligations thereunder ( “ Tenant Security Deposits ” ), (iii) all claims and rights to the payment of damages and other claims arising from any rejection by a tenant of its Lease under the Bankruptcy Code ( “ Bankruptcy Claims ” ), (iv) all of the landlord’s rights in casualty or condemnation proceeds of a tenant in respect of the leased premises ( “ Tenant Claims ” ), (v) all rents, ground rents, additional rents, revenues, termination and similar payments, issues and profits (including all oil and gas or other mineral royalties and bonuses) from the Property (collectively with the Lease Guaranties, Tenant Security Deposits, Bankruptcy Claims and Tenant Claims, “ Rents ” ), whether paid or accruing before or after the filing by or against Borrower of any petition for relief under the Bankruptcy Code, (vi) all proceeds or streams of payment from the sale or other disposition of the Leases or disposition of any Rents, and (vii) the right to receive and apply the Rents to the payment of the Debt and to do all other things which Borrower or a lessor is or may become entitled to do under the Leases or with respect to the Rents;

          (g) Condemnation Awards . All awards or payments, including interest thereon, which may heretofore and hereafter be made with respect to the Property, whether from the exercise of the right of eminent domain (including, without limitation, any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the Property, subject, however, to the express terms of the Loan Agreement relating thereto;

          (h) Insurance Proceeds . All proceeds of, and any unearned premiums on, any insurance policies covering the Property, including, without limitation, the exclusive right to receive and apply the proceeds of any claim awards, judgments, or settlements made in lieu thereof, for damage to the Property, subject, however, to the express terms of the respective Loan Agreements relating thereto;

          (i) Tax Certiorari . All refunds, rebates or credits in connection with a reduction in Taxes, including, without limitation, rebates as a result of tax certiorari or any other applications or proceedings for reduction;

          (j) Agreements . Subject to the express terms of the respective Loan Agreements, all agreements (including, without limitation, interest rate cap agreements, swaps or other interest hedging agreements), contracts (including, without limitation, service, supply and maintenance contracts), registrations, permits, licenses (including, without limitation, liquor licenses, if any, to the fullest extent assignable by Borrower), franchise, plans, specifications and other documents, now or hereafter entered into, and all rights therein and thereto, respecting or

pertaining to the use, occupation, construction, management or operation of the Property, or respecting any business or activity conducted from the Property, and all right, title and interest of Borrower therein and thereunder, including, without limitation, the right, while an Event of Default remains uncured, to receive and collect any sums payable to Borrower thereunder (collectively, the “ Operating Agreements ” );

          (k) Intangibles . All accounts, escrows, chattel paper, claims, deposits, trade names, trademarks, service marks, logos, copyrights, goodwill, books and records and all other general intangibles relating to or used in connection with the operation of the Property;

          (l) Accounts . All reserves, escrows and deposit accounts maintained by Borrower with respect to the Property (including, without limitation, all reserves, escrows, deposit accounts and lockbox accounts established pursuant to the respective Loan Agreements), together with all cash, checks, drafts, certificates, securities, investment property, financial assets, instruments and other property from time to time held therein, and all proceeds, products, distributions, dividends or substitutions thereon or thereof;

          (m) Rights to Conduct Legal Actions . The right, in the name and on behalf of Borrower, to commence any action or proceeding to protect the interest of Lender in the Property and to appear in and defend any action or proceeding brought with respect to the Property;

          (n) Proceeds . All proceeds and profits arising from the conversion, voluntary or involuntary, of any of the foregoing into cash (whether made in one payment or a stream of payments) and any liquidation claims applicable thereto;

          (o) Condominium Documents . Subject to the terms of Section 2.03(b) hereof, all rights, remedies and powers of Borrower under the Condominium Documents, including, without limitation, any rights to appoint members of the Condominium Board and any rights to exercise voting rights or privileges; and

          (p) Rights . Any and all other rights of Borrower in and to the items set forth in the foregoing subsections (a) through (o), inclusive, and in and to the Property.

          TO HAVE AND TO HOLD the above granted and described Property unto Lender, and its successors and assigns, with power of sale in accordance with the terms and conditions hereof, forever; subject, however, to Section 2.05 below.

          Section 2.02 Grant of Security Interest; Security Agreement . Borrower hereby grants to Lender, as security for the Obligations, a security interest in the Property to the fullest extent that the Property now or hereafter may be subject to a security interest under the UCC. Borrower intends for this Security Instrument to be a “security agreement” within the meaning of the UCC. Borrower hereby irrevocably authorizes Lender to prepare, execute and file all initial financing statements, and any restatements, extensions, continuations, renewals or amendments thereof, in such form as Lender may require to perfect or continue the perfection of this security interest or other statutory liens held by Lender. Unless prohibited by applicable law, Borrower agrees to pay all reasonable expenses incident to the preparation, execution, filing and/or recording of any of the foregoing. With respect to any of the Property in which a security interest is not perfected by the filing of a financing statement, Borrower consents and agrees to undertake, and to cooperate fully with Lender, to perfect the security interest hereby granted to

Lender in the Property. Without limiting the foregoing, if and to the extent any of the Property is held by a bailee for the benefit of Borrower, Borrower shall promptly notify Lender thereof and, if required by Lender, promptly obtain an acknowledgment from such bailee that is satisfactory to Lender and confirms that such bailee holds the Property for the benefit of Lender as secured party and shall only act upon instructions from Lender with respect to the Property.

          Section 2.03 Assignment of Leases and Rents .

          (a) Rights Granted to Lender . Borrower hereby absolutely and unconditionally assigns to Lender all of Borrower’s right, title and interest in and to all current and future Leases and Rents and the Condominium Documents (including, without limitation, any rights to appoint members of the Condominium Board and any rights to exercise voting rights or privileges). Borrower hereby declares its intention to establish a present, absolute and irrevocable transfer and assignment to Lender of all Rents and Leases and the Condominium Documents and to authorize and empower Lender to collect and receive all Rents and exercise all of Borrower’s rights under the Leases (including, without limitation, the right to modify, extend or terminate any Lease) and the Condominium Documents (including, without limitation, any rights to appoint members of the Condominium Board and any rights to exercise voting rights or privileges) without any further action by Borrower; it being intended that this assignment is effective immediately and not an assignment made for security only, not withstanding any provision hereof to the contrary. For purposes of giving effect to this assignment of Rents and Leases and the Condominium Documents and for no other purpose, Rents and Leases and the Condominium Documents shall not be deemed to be part of the “Property” as that term is defined in Section 2.01 of this Security Instrument. If, however, this assignment of Rents and Leases and the Condominium Documents is not enforceable by its terms under the laws of the State where the Property is located, then Rents and Leases and the Condominium Documents shall be included as part of the Property and it is Borrower’s intention that, in this circumstance, this Security Instrument creates and perfects a lien of the Rents and Leases and the Condominium Documents in favor of Lender, which lien shall be effective as of the date of this Security Instrument.

          (b) License to Borrower; Revocation . Nevertheless, subject to the terms of this Security Instrument, the respective Loan Agreements and the Lockbox Agreement, Lender grants to Borrower a revocable license (i) to manage the leasing activities of the Property as contemplated by the respective Loan Agreements, (ii) to exercise all of Borrower’s rights under the Leases and the Condominium Documents (including, without limitation, any rights to appoint members of the Condominium Board and any rights to exercise voting rights or privileges) and (iii) to collect and receive the Rents in trust for Lender and to apply the Rents to discharge all current amounts due on the Debt and to pay the current costs of managing, operating and maintaining the Property. As long as no Event of Default has occurred and is continuing and subject to the provisions of the Lockbox Agreement, the Rents remaining after application pursuant to the preceding sentence may be retained by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Security Instrument. Upon and during the continuance of an Event of Default, and without the necessity of notice or prior demand or Lender’s entering upon and taking and maintaining control of the Property (whether directly or through a receiver), the license granted to Borrower by this Section shall terminate automatically, and Lender shall be entitled to receive and collect the Rents as they become due and payable and exercise all of Borrower’s rights or the rights of lessor under the Leases and

with respect to the Rents and under the Condominium Documents (including, without limitation, any rights to appoint members of the Condominium Board and any rights to exercise voting rights or privileges). Lender’s right to revoke the license granted to Borrower is in addition to all other rights and remedies available to Lender following an Event of Default.

          Section 2.04 Pledge of Monies Held . Borrower hereby pledges to Lender, as security for the Obligations, all money now or hereafter held by Lender in escrow or reserve or on deposit pursuant to the terms hereof or pursuant to the respective Loan Agreements or any other Loan Document, until expended or applied as provided in this Security Instrument or such other Loan Document.

          Section 2.05 Release of Security . The grants, mortgage, liens, security interests, assignments, pledges and transfers by this Security Instrument are subject to the express condition that, if Borrower pays to Lender the Debt at the time and in the manner provided in the respective Loan Agreements and performs all Obligations when and as required by the Loan Agreements and each other Loan Document, Lender shall release the Property from the grants, mortgage, liens, security interests, assignments, pledges and transfers created by this Security Instrument and reconvey the Property to Borrower. Lender shall prepare (at Borrower’s expense) and deliver to Borrower such documents as are necessary to effect such release and reconveyance.

ARTICLE III

DEBT AND OBLIGATIONS SECURED

          Section 3.01 Debt . This Security Instrument and the interests created in favor of Lender hereunder are given for the purpose of securing (a) payment of principal, interest and all other amounts due at anytime under the Loan Agreements, the Notes and each of the other Loan Documents, including, without limitation, interest at the Default Rate, any late fee for delinquent payments, Prohibited Prepayment Fee, the Prepayme