indemnification & hold harmless … education broadcast network indemnification & hold...

INDEMNIFICATION & HOLD HARMLESS AGREEMENTS IN BUSINESS & REAL

ESTATE

First Run Broadcast: November 3, 2015

LIVE REPLAY: June 20, 2016

1:00 p.m. E.T./12:00 p.m. C.T./11:00 a.m. M.T./10:00 a.m. P.T. (60 minutes)

Transactional agreements in business and real estate – buy-sell agreements, leases, and more –

are extended exercises in identifying and allocating risks. Indemnification and hold harmless

agreements are among the most important tools for allocating that risk. The indemnitor agrees to

“make whole” the indemnitee on the occurrence of certain claims or liabilities, or the imposition

of damages. The seller agrees to indemnify the buyer from certain risks that may arise after the

sale closes. Or a commercial real estate lessee may agree to hold the lessor harmless from

damages arising from its use or even the use of third parties. Defining the scope of the

indemnity, understanding the limits of what the law will allow, and ensuring cost-effective

claims by the indemnitee against the indemnitor are essential to the success of these agreements.

This program will provide you with a practical guide to drafting indemnification and hold

harmless agreements, enhancing enforceability and avoiding traps.

Drafting indemnification and hold harmless agreements in real estate and business

transactions

Framework of law governing the enforceability of indemnity

Uses of indemnification and hold harmless provisions in business and commercial real

estate buy-sell

transactions – and in commercial leasing

Defining the scope of indemnity – claims, liabilities, damages, and the role of fault v. no

fault

Drafting a process for indemnitee to make a claim on indemnitors

Right to have indemnitor defend and pay for litigation

Enhancing the enforceability of indemnity and hold harmless agreements

Speakers:

Manuel A. Fernandez is partner in the Miami office of Akerman, LLP, where he has an extensive

real estate practice representing commercial mortgage lenders, developers, and institutional and

non-institutional investors in connection with the acquisition, development, financing, leasing

and management of commercial and residential real estate assets and distressed real estate

transactions. He also represents hedge funds, pension funds, and other real estate opportunity

funds in connection with joint ventures. Mr. Fernandez received his B.A., cum laude, from the

University of Miami and his J.D., magna cum laude, from the University of Miami School of

Law.

Richard R. Goldberg is a retired partner, resident in the Philadelphia office of Ballard Spahr,

LLP, where he established an extensive real estate practice, including development, financing,

leasing, and acquisition. Earlier in his career, he served as vice president and associate general

counsel of The Rouse Company for 23 years. He is past president of the American College of

Real Estate Lawyers, past chair of the Anglo-American Real Property Institute, and past chair of

the International Council of Shopping Centers Law Conference. Mr. Goldberg is currently a

Fellow of the American College of Mortgage Attorneys and is a member of the American Law

Institute. Mr. Goldberg received his B.A. from Pennsylvania State University and his LL.B. from

the University of Maryland School of Law.

VT Bar Association Continuing Legal Education Registration Form

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Indemnification & Hold Harmless Agreements in Business & Real Estate

Teleseminar June 20, 2016 1:00PM – 2:00PM

1.0 MCLE GENERAL CREDITS

PAYMENT METHOD:

Check enclosed (made payable to Vermont Bar Association) Amount: _________ Credit Card (American Express, Discover, Visa or Mastercard) Credit Card # _______________________________________ Exp. Date _______________ Cardholder: __________________________________________________________________

VBA Members $75 Non-VBA Members $115

NO REFUNDS AFTER June 13, 2016

Vermont Bar Association

CERTIFICATE OF ATTENDANCE

Please note: This form is for your records in the event you are audited Sponsor: Vermont Bar Association Date: June 20, 2016 Seminar Title: Indemnification & Hold Harmless Agreements in Business & Real Estate Location: Teleseminar - LIVE Credits: 1.0 MCLE General Credit Program Minutes: 60 General Luncheon addresses, business meetings, receptions are not to be included in the computation of credit. This form denotes full attendance. If you arrive late or leave prior to the program ending time, it is your responsibility to adjust CLE hours accordingly.

PROFESSIONAL EDUCATION BROADCAST NETWORK

INDEMNIFICATION & HOLD HARMLESS AGREEMENTS IN BUSINESS &REAL ESTATE

Collected Forms:

INDEMNITY AGREEMENT

TYPICAL CLAUSE REGARDING PAYMENT OF EXPENSESAND INDEMNIFICATION OF LENDER IN MORTGAGE LOAN AGREEMENT

INDEMNIFICATION CLAUSE FOR BENEFIT OF LENDERIN CONNECTION WITH MORTGAGE LOAN ORIGINATED

FOR SALE AS PART OF A SECURITIZATION

TYPICAL RECOURSE CARVE-OUT PROVISIONIN CONNECTION WITH COMMERCIAL MORTGAGE LOAN

TYPICAL REPRESENTATIONS AND WARRANTIES ANDRELATED INDEMNIFICATION PROVISIONS IN CONNECTION WITH

REAL ESTATE PURCHASE AND SALE TRANSACTION


Material submitted by:

Manuel A. FernandezAkerman, LLP – Miami

(o) (305) [email protected]

Presentation by:

Manuel A. FernandezAkerman, LLP – Miami

(o) (305) [email protected]

Richard GoldbergBallard Spahr, LLP - Philadelphia

(o) (215) 864-8730(m) (215) 837-8401

[email protected]

{36521728;1}Mats 1

INDEMNITY AGREEMENT

THIS INDEMNITY AGREEMENT (this "Agreement") is made as of the ___ dayof ____________, 2015 (the "Effective Date"), by ____________________________,a Delaware limited liability company having an address at____________________________ (the "Indemnitor"), in favor of____________________________, a Delaware limited liability company having anaddress at ____________________________ (the "Beneficiary").

BACKGROUND

A. On the Effective Date hereof, ____________________________, aDelaware limited liability (as the non-member Manager) (the "Manager"), theBeneficiary (as the Class A Member), and ____________________________, aDelaware limited liability company (as the Class B Member) (the "Class B Member"),entered into a certain Limited Liability Company Agreement (the "LLC Agreement") of____________________________, a Delaware limited liability (the "Company").

B. The Company is the sole member of (1)____________________________, a Delaware limited liability (the "Office PropertyOperating Company"), and (2) ____________________________, a Delaware limitedliability (the "Adjacent Property Operating Company"). The Office PropertyOperating Company and the Adjacent Property Operating Company are sometimesreferred to herein individually as an "Operating Company", and together as the"Operating Companies".

C. The Office Property Operating Company intends to acquire, own, finance,lease, manage, improve and operate, and, if and when appropriate, sell or otherwisedispose of, certain improved real property commonly called "___________________ ",comprised of an office property and structured parking garage, consisting of a ___-storybuilding totaling approximately _______ square feet of rentable space, together with______ parking spaces within the Parking Garage, all located at____________________________ (all of the foregoing, the "Office Property").

D. The Adjacent Property Operating Company intends to acquire, own,finance, lease, manage, improve and operate, and, if and when appropriate, sell,ground lease or otherwise dispose of, a separate _____ acre parcel of land, togetherwith the existing improvements thereon, located immediately across__________________ from the Office Property (the "Adjacent Property"). The OfficeProperty and the Adjacent Property are sometimes referred to herein individually as a"Property", and together as the "Properties".

E. Section 4.04 of the LLC Agreement contains certain representations andwarranties of the Manager and the Class B Member upon which the Beneficiary hasrelied in determining whether to become a member in the Company (hereinafter, the"Class B Member’s Representations and Warranties").

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F. In order to induce the Beneficiary to enter into the LLC Agreement, theIndemnitor has agreed to indemnify the Beneficiary against any liability, losses ordamage suffered or incurred by the Beneficiary as a result of certain events or actionsherein described.

G. Indemnitor is an Affiliate of each of the Manager, the Class B Member andthe Property Manager. As a consequence thereof, Indemnitor will receive a directeconomic benefit from the Manager and the Class B Member entering into the LLCAgreement and from the Property Manager entering into the Service Agreement.

TERMS

NOW, THEREFORE, in consideration of the premises set forth herein and forother good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, intending to be legally bound hereby, Indemnitor agrees as follows:

1. Defined Terms. All capitalized terms, when used herein without separatedefinition, will have the same respective meanings as in the LLC Agreement.

2. Indemnification.

(a) Subject to the terms and conditions of this Agreement, includingwithout limitation, the limitations set forth in Sections 2(b), 2(c) and 2(d), 4 and 6 hereof,Indemnitor hereby absolutely and unconditionally agrees to indemnify the Beneficiary,its successors and assigns, and agrees to be personally liable for the prompt paymentof any and all Losses actually suffered or incurred by Beneficiary as the result of thefollowing:

(i) the unauthorized diversion or misappropriation by theIndemnitor, the Property Manager (if an Affiliate of the Indemnitor), or any of theirAffiliates of any rents, revenues, issues or profits of either Property or any insurance,condemnation or similar proceeds or awards;

(ii) rents, revenues, issues and profits of the Properties receivedby the Indemnitor, the Property Manager (if an Affiliate of the Indemnitor), or any of theirAffiliates which are not (i) applied to the principal or interest then due under the terms ofthe First Mortgage Loan or any Refinancing (or to any other indebtedness secured bythe Properties which were approved by the Beneficiary), or to the actual operatingexpenses of, or capital improvements for, either Property, or (ii) distributed inaccordance with the LLC Agreement;

(iii) for tenant security deposits paid to the Indemnitor, theProperty Manager (if an Affiliate of the Indemnitor), or any of their Affiliates to the extentthe same are not applied in accordance with the leases for space within the Propertiespursuant to which such deposits were paid;

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(iv) a willful breach of the Class B Member’s Representationsand Warranties in any material respect but only to the extent that such breach shallresult the failure to disclose any matter that may have a Material Adverse Effect;

(v) any Environmental Activity of the Property Manager (if theProperty Manager is then an Affiliate of the Indemnitor) or any of its Affiliates in violationof any Environmental Laws in connection with any Hazardous Substances or Wasteswhich did not exist on or under the Properties prior to the Effective Date hereof;

(vi) any Environmental Activity of any Person other than theProperty Manager or its Affiliates (i.e., an unaffiliated third-party) occurring after theEffective Date hereof in connection with any Hazardous Substance or Wastes which isnot in compliance with the applicable Environmental Laws, where the Property Manager(if the Property Manager is then an Affiliate of the Indemnitor) fails to exercisecommercially reasonable efforts to cause the removal or remediation of such HazardousSubstance or Wastes in accordance with applicable Environmental Laws, provided (A)the Property Manager shall have actual knowledge of such Environmental Activity andfail to promptly notify the Company or the applicable Operating Company of suchcondition promptly after the Property Manager shall acquire actual knowledge of suchEnvironmental Activity (it being presumed that the Property Manager shall not haveactual notice of any such Environmental Activity unless it shall receive written noticethereof); and (B) the Company shall make available sufficient funds to remove orrespond to the Hazardous Substance or Wastes after receipt of notice of suchEnvironmental Activity.

(b) Any liability of Indemnitor under Section 2(a)(v) or 2(a)(vi)(hereinafter, "Environmental Liability") shall include, but shall not be limited to, thefollowing (to the extent not otherwise covered under any environmental insurancepolicies of the Company or of an applicable Operating Company):

(i) Liability for reasonable costs of removal or remedial actionincurred by the United States Government or the State in which the Properties arelocated, or response costs incurred by any other person, or damages from injury to,destruction of, or loss of natural resources, including, but not limited to, the reasonablecosts of assessing such injury, destruction or loss, incurred pursuant to Section 107 ofCERCLA;

(ii) Liability for reasonable costs and expenses of abatement,correction or clean-up, fines, damages, response costs or penalties which arise from theprovisions of any other Environmental Laws; and

(iii) Liability for personal injury or property damage caused byany Environmental Activity, or violation of Environmental Law and arising under anystatutory or common-law tort theory, including damages or response costs assessed forthe maintenance of a public or private nuisance, trespass, negligence or for the carryingon of an abnormally dangerous activity.

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(c) In the event that Indemnitor shall fail to comply with its obligationsunder Section 4, such Environmental Liability shall extend to and include all reasonableout-of-pocket costs, expenses, including consultants, experts and attorneys’ feesincurred or sustained by the Beneficiary in making any investigation or undertaking anyresponse action on account of any claim, demand, loss, liability, cost, charge, suit,order, judgment or adjudication, in prosecuting or defending any action brought inconnection therewith, in obtaining or seeking to obtain a release therefrom and inenforcing any of the agreements herein contained. Notwithstanding anything to thecontrary contained herein, the Beneficiary agrees that the Company and eachOperating Company shall first exhaust their respective rights and remedies under orpursuant to any insurance policy or policies issued for the benefit of the Company or anOperating Company before the Beneficiary will seek recovery or indemnification fromthe Indemnitor under this Agreement with respect to any Environmental Liability.

(d) Notwithstanding anything to the contrary contained herein, in noevent shall Indemnitor have any liability to Beneficiary for Losses unless such Lossesare incurred or suffered by the Beneficiary as a result of the gross negligence, willfulmisconduct or fraud of the Indemnitor, the Class B Member, the Property Manager ortheir Affiliates and, in the case of any default by the Property Manager or the Class BMember, the Property Manager or the Class B Member, as applicable, shall fail to curesuch default within the applicable notice and cure period provided for in the ServiceAgreement or the LLC Agreement, as applicable. Without limiting the generality of theforegoing, in no event shall the Indemnitor have any liability for Losses to the extentLosses are incurred or suffered by the Beneficiary as a result of:

(i) the diversion, misappropriation or misapplication of anyrents, revenues, issues or profits of either Property, or any insurance, condemnation orsimilar proceeds or awards by the Property Manager or its Affiliates, if the PropertyManager is not an Affiliate of the Indemnitor at the time of such diversion,misappropriation or misapplication of such funds;

(ii) any act or omission of the Property Manager or its Affiliatesif the Property Manager is not an Affiliate of the Indemnitor at the time of the occurrenceof such act or omission;

(iii) any act or omission of the Beneficiary;

(iv) any other matter described above to the extent that suchBeneficiary has consented to or directed the Company, any Operating Company, theClass B Member or Indemnitor to take such action or inaction, as the case may be.

(e) In no event shall the aggregate liability of Indemnitor under thisAgreement exceed an amount equal to the Unreturned Capital Contributions of theClass A Member.

3. No Violation of Other Agreements Indemnitor represents and warrantsto the Beneficiary that neither the execution and delivery of this Agreement nor theperformance by Indemnitor of its obligations hereunder will violate the terms and

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conditions of any agreement to which Indemnitor is a party or by which Indemnitor isbound.

4. Right to Settle Claims, etc. In the event the Beneficiary shall receiveany written claim or demand (a “Claim”) which may cause the Beneficiary to suffer orincur Losses for which the Beneficiary is entitled to indemnification hereunder, theBeneficiary shall give the Indemnitor written notice of the Claim, together with a copy ofthe Claim. Such notice shall be given within a reasonable time thereafter, but in anyevent prior to forfeiture of or material prejudice to the rights and defenses otherwiseavailable, and shall specify the facts giving rise to the alleged Claim, to afford theIndemnitor the reasonable opportunity to protest or defend (in either case, “Defend”)the Claim. The Beneficiary, upon giving the Indemnitor sixty (60) days prior writtennotice, shall have the right in good faith to pay, settle or compromise any such Claimunder the reasonably-held good faith belief that it is liable therefor, whether liable or not,without the consent or approval of the Indemnitor, unless the Indemnitor (or the issuerof any insurance policy issued for the benefit of the Company or an Operating Company(“Insurer”)) gives the Beneficiary notice within such sixty (60) day period of theIndemnitor’s (or the Environmental Insurer’s) intent to defend the Claim. In the eventthe Indemnitor (or the Insurer) elects to defend a Claim, the Indemnitor (or the Insurer)shall retain counsel who shall defend the Claim at the sole expense of the Indemnitor(or the Insurer). The Beneficiary shall cooperate with the Indemnitor (or theEnvironmental Insurer) in the defense of any Claim. The Beneficiary shall not pay,settle or compromise any such Claim so long as the Indemnitor (or the Insurer) shalldiligently and expeditiously and in good faith proceed to defend the Claim. Indemnitor(or the Insurer) shall keep the Beneficiary reasonably informed of the progress of suchdefense and shall not settle or compromise any such Claim without the consent of theBeneficiary, which consent shall not be unreasonably withheld or delayed.Notwithstanding the foregoing, the Beneficiary’s consent to settle or compromise anysuch Claim shall not be required if the Indemnitor (or the Insurer) obtains a generalrelease for the Beneficiary as to any and all obligations and liabilities of the Beneficiaryin connection with such Claim. In the event that such counsel is not diligently orexpeditiously or in good faith proceeding to defend a Claim, the Beneficiary shall havethe right to replace counsel with other counsel reasonably satisfactory to the Indemnitor(or the Environmental Insurer).

5. Liability Absolute. Subject to the limitations set forth in Section 2, theliability of the Indemnitor under this Agreement is absolute and unconditional and shallnot be affected in any way by reason of any action or omission by the Beneficiary or anyother Person including, without limitation: (a) any failure to retain or preserve, or the lackof prior enforcement of, any rights against any Person or Persons or in any property; (b)any delay in enforcing or any failure to enforce any such rights even if such rights arethereby lost; or (c) any delay in making demand on the Indemnitor for the payment ofany amount due hereunder, unless in such case, any such failure or delay results in theforfeiture of or material prejudice to the rights and defenses otherwise available toIndemnitor relating to any Claim.

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6. No Irregularity, etc. No irregularity or unenforceability of any part of theIndemnitor’s obligations hereunder shall affect, impair or be a defense to thisAgreement, and this Agreement is and shall be a primary and continuing obligation ofthe Indemnitor.

7. No Waiver. No delay on the part of the Beneficiary in exercising any of itsrights hereunder, or the partial or single exercise thereof, shall constitute a waiverthereof. No waiver of any of its rights hereunder, and no modification or amendment ofthis Agreement, shall be deemed to be made by the Beneficiary unless the same shallbe in writing, duly signed on behalf of the Beneficiary, and each such waiver, if any,shall apply only with respect to the specific instance involved, and shall in no way impairthe rights of the Beneficiary or the obligations of the Indemnitor to the Beneficiary in anyother respect at any other time.

8. Default.

(a) In the event of a default hereunder, the Beneficiary may in additionto all other rights and remedies granted to it under this Agreement and in any otheragreement securing, evidencing or relating to the obligations hereunder, exercise allother rights available to the Beneficiary at law or equity.

(b) Notwithstanding anything to the contrary contained herein, theBeneficiary shall not exercise any of its rights or remedies under this Agreement for aperiod of thirty (30) days after notice of a default has been given to the Indemnitor,provided, however, if such default cannot reasonably be cured within such thirty (30)day period, and the Indemnitor has commenced to cure such default within such thirty(30) day period and, thereafter, diligently and expeditiously proceed to cure the same,such thirty (30) day period shall be extended for so long as it shall require theIndemnitor, in the exercise of due diligence, to cure such default. For purposes hereof,notice shall be deemed to have been sufficiently given to the Indemnitor if delivered atthe addresses and otherwise as provided in Section 14. Any such notice shall bedeemed to be given as provided in Section 14.

9. Waivers. Indemnitor agrees that, except as provided in this Agreement,the Beneficiary shall not be required to give the Indemnitor any notice of default oropportunity to cure or any other notice whatsoever and the Indemnitor hereby waives, tothe extent permitted by law: (a) all notices, including but not limited to: (i) notice ofacceptance of this Agreement; and (ii) notice of protest and/or notice of dishonor ornonpayment of any of the Indemnitor’s obligations hereunder and (b) all rights ofsubrogation, reimbursement, indemnity, and all rights to enforce any remedy that theBeneficiary may have against the Company or the Property Manager, until suchobligations have been performed in full, and any defense based upon the impairment ofany subrogation rights that the Indemnitor might have.

10. Strict Compliance. The failure of the Beneficiary to insist upon strictcompliance with any of the terms hereof shall not be considered to be a waiver of anysuch terms nor shall it bar the Beneficiary from insisting upon strict compliance herewithat any time thereafter.

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11. Severability. If any provision of this Agreement shall be contrary to thelaws of the jurisdiction in which the same shall be sought to be enforced, the illegality orunenforceability of any such provision shall not affect the other terms, covenants andconditions hereof, and the same shall be binding upon the Indemnitor with the sameforce and effect as though such illegal or unenforceable provision were not containedherein. In the event it would be materially unfair to any party to construe this Agreementwithout application of the illegal or unenforceable terms, this Agreement shall beautomatically amended by replacing the illegal or unenforceable provisions withprovisions which are legal and enforceable and which, to the greatest extent possible,reflect the original intent of the parties.

12. Governing Law; Jurisdiction and Venue; Waiver of Jury Trial. It isagreed and understood that this Agreement, and all matters arising out of, under or inconnection with this Agreement, shall be governed by and construed in accordance withthe laws of the State of Delaware, without regard to the conflict of law rules. The partiesto this Agreement hereby submit solely to the jurisdiction and venue of any court ofcompetent jurisdiction in the State of Delaware and/or the appropriate United StatesDistrict Court in the State of Delaware, as well as to the jurisdiction of all courts to whichan appeal may be taken from such courts, for the purpose of any suit, action or otherproceeding arising out of, under or in connection with this Agreement, and expresslywaive any and all objections they may have as to venue in any such courts. THEPARTIES HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY PROCEEDINGOF ANY KIND, WHETHER ARISING OUT OF, UNDER OR IN CONNECTION WITHTHIS AGREEMENT, OR ANY OTHER AGREEMENT OR TRANSACTION BETWEENOR AMONG THE PARTIES HERETO OR ANY OTHER PARTY.

13. Binding Agreement. This Agreement shall inure to the benefit of, and beenforceable by, the Beneficiary and its successors and assigns and no other Person,and shall be binding upon, and enforceable against, the Indemnitor and its legalrepresentatives, successors and assigns.

14. Notices. Unless otherwise provided herein, all notices, demands,requests, consents or other communications required or permitted to be given or madeunder this Agreement (a "Notice"), to be effective, must be in writing and shall bedeemed to have been given when received by the addressee. All such Notices shall bedelivered: (1) by courier or hand delivery, or (2) by United States Mail, sent byregistered or certified mail, return receipt requested, postage prepaid, (3) by FederalExpress or another nationally recognized express delivery service, or (4) by electroniccommunication, whether by email or facsimile (and, if the Notice seeks to a declare adefault under or terminate this Agreement, confirmed in writing sent by certified UnitedStates mail, postage prepaid, return receipt requested). All such deliveries shall bemade or sent to the following addresses (or to such other address as a party mayhereafter designate for itself by Notice to the other party). A Notice may be given bycounsel for a party on behalf of the party. As of the Effective Date hereof, the

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respective addresses for Notices are the following:

If to the Beneficiary:

With a required copy to:

If to the Indemnitor:

With a required copy to:

15. Survival of Agreement. This Agreement and the Indemnitor’s liabilityhereunder shall survive the termination and dissolution of the Company for a period ofone (1) year.

16. Counterparts. This Agreement may be executed in multiple counterparts,each of which shall be deemed an original and all of which shall constitute oneagreement, and the signature of any party to any counterpart shall be deemed to be asignature to, and may be appended to, any other counterpart.

17. "Fax" Copies. Fax machine copies and electronic copies of originalsignatures of any of the parties hereto shall be binding as if they were originalsignatures.

18. Knowledge of Waivers. INDEMNITOR WARRANTS AND AGREESTHAT EACH OF THE WAIVERS SET FORTH HEREIN ARE MADE WITH

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INDEMNITOR’S FULL KNOWLEDGE OF THEIR SIGNIFICANCE ANDCONSEQUENCES, AND THAT UNDER THE CIRCUMSTANCES, THE WAIVERSARE REASONABLE AND NOT CONTRARY TO PUBLIC POLICY OR LAW. If any ofsuch waivers are determined to be contrary to any applicable law or public policy, suchwaivers shall be effective only to the extent permitted by law.

19. Entire Agreement; Amendments; Conflicts. This Agreement, includingany Exhibits attached hereto, constitutes the entire Agreement between the Indemnitorand the Beneficiary with respect to the subject matter hereof and supersedes all prior orcontemporaneous discussions, negotiations and agreements, whether oral or written.No extension, alteration, modification or other amendment of or to this Agreement shallbe valid or binding unless made in writing and signed by the Indemnitor and theBeneficiary. Where any conflict exists between any Exhibit, schedule or otherattachment and this Agreement, the terms and conditions of this Agreement shallprevail.

20. Limitation on Liability. Notwithstanding anything to the contrarycontained in this Agreement, the liability of Indemnitor for any default by Indemnitorunder the terms and conditions of this Agreement shall be recoverable only from theassets of the Indemnitor and shall not extend to the assets of the individual partners,shareholders or members of Indemnitor. No present, past or future partner, shareholderor member of Indemnitor shall have any individual or personal liability to the Beneficiaryfor the satisfaction of the obligations or liabilities of the Indemnitor under thisAgreement, all such individual liability, if any, being expressly waived and released bythe Beneficiary.

[SIGNATURES APPEAR ON THE NEXT SUCCEEDING PAGE]

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(a) Borrower shall pay or, if Borrower fails to pay, reimburse Lender uponreceipt of notice from Lender, for all reasonable costs and expenses (includingreasonable attorneys’ fees and disbursements) incurred by Lender in connection with(i) Borrower’s ongoing performance of and compliance with Borrower’s agreements andcovenants contained in the Loan Documents on its part to be performed or compliedwith after the Closing Date, including, without limitation, confirming compliance withenvironmental and insurance requirements; (ii) Lender’s ongoing performance of andcompliance with all agreements and covenants contained in the Loan Documents on itspart to be performed or complied with after the Closing Date; (iii) the negotiation,preparation, execution, delivery and administration of any consents, amendments,waivers or other modifications to the Loan Documents and any other documents ormatters requested by Borrower or any Guarantor; (iv) the filing and recording fees andexpenses, title insurance and reasonable fees and expenses of counsel for providing toLender all required legal opinions, and other similar expenses incurred, in creating andperfecting the Liens in favor of Lender pursuant to the Loan Documents; (v) enforcing orpreserving any rights, in response to third party claims or the prosecuting or defendingof any action or proceeding or other litigation, in each case against, under or affectingBorrower, the Loan Documents, the Property or any other security given for the Loan;and (vi) enforcing any Obligations of or collecting any payments due from Borrower orGuarantor under the Loan Documents or with respect to the Property or in connectionwith any refinancing or restructuring of the credit arrangements provided under thisAgreement in the nature of a “work-out” or of any Bankruptcy Action; provided, however,that Borrower shall not be liable for the payment of any such costs and expenses to theextent the same arise by reason of the gross negligence, illegal acts, fraud or willfulmisconduct of Lender, as determined by a final non-appealable judgment of a court ofcompetent jurisdiction. Any costs due and payable to Lender may be paid, at Lender’selection in its sole discretion, from any amounts in the Cash Management Account.

(b) Borrower shall indemnify, defend and hold harmless the shallLender and any person or entity who is or will have been involved in the origination ofthe Loan, any person or entity who is or will have been involved in the servicing of theLoan, any person or entity in whose name the encumbrance created by the SecurityInstrument is or will have been recorded and persons and entities who may hold oracquire or will have held a full or partial interest in the Loan, including, but not limited to,custodians, trustees and other fiduciaries who hold or have held a full or partial interestin the Loan (collectively, the "Indemnified Parties") from and against any and allclaims, suits, liabilities (including, without limitation, strict liabilities), actions,proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties,charges, fees, expenses, judgments, awards, amounts paid in settlement of whateverkind or nature (including but not limited to reasonable attorneys’ fees and other costs ofdefense) (collectively, "Losses")that may be imposed on, incurred by, or assertedagainst any Indemnified Party in any manner relating to or arising out of (i) any defaultor breach by Borrower of its Obligations under, or any material misrepresentation by

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Borrower contained in, the Loan Documents, (ii) the use or intended use of theproceeds of the Loan, (iii) any materials or information provided by or on behalf ofBorrower, or contained in any documentation approved by Borrower; (iv) ownership ofthe Security Instrument, the Property or any interest therein, or receipt of any Rents; (v)any accident, injury to or death of persons or loss of or damage to property occurring in,on or about the Property or on the adjoining sidewalks, curbs, adjacent property oradjacent parking areas, streets or ways; (vi) any use, nonuse or condition in, on orabout the Property or on adjoining sidewalks, curbs, adjacent property or adjacentparking areas, streets or ways; (vii) performance of any labor or services or thefurnishing of any materials or other property in respect of the Property; (viii) any failureof the Property to comply with any Legal Requirement; (ix) any claim by brokers, findersor similar persons claiming to be entitled to a commission in connection with any Leaseor other transaction involving the Property or any part thereof, or any liability assertedagainst such Indemnified Party with respect thereto; (x) the claims of any lessee of anyportion of the Property or any Person acting through or under any lessee or otherwisearising under or as a consequence of any Lease; and (xi) any indemnification to theRating Agencies in connection with issuing, monitoring or maintaining the Securitiesinsofar as such Losses arise out of any untrue statement of any material fact in anymaterials or information provided by or on behalf of Borrower or arise out of theomission to state a material fact in such materials or information required to be statedtherein or necessary in order to make the statements in such materials or information, inlight of the circumstances under which they were made, not misleading (collectively, the“Indemnified Liabilities”); provided, however, that Borrower shall not have anyobligation to the Indemnified Parties hereunder to the extent that such IndemnifiedLiabilities arise from the gross negligence, illegal acts, fraud or willful misconduct of theIndemnified Parties, as determined by a final non-appealable judgment of a court ofcompetent jurisdiction. The provisions of Section xxx (a), this Section xxx(b), Sectionxxx(c) and Section xxx (d) shall survive any payment or prepayment of the Loan andany foreclosure or satisfaction of the Security Instrument.

(c) Borrower shall, at its sole cost and expense, indemnify,defend and hold harmless Indemnified Parties from and against any and all Lossesimposed on, incurred by, or asserted against any Indemnified Parties and directly orindirectly arising out of or in any way relating to any tax on the making and/or recordingof the Security Instrument, the Note or any of the other Loan Documents, but excludingany income, franchise or other similar taxes.

(d) Borrower shall, at its sole cost and expense, indemnify,defend and hold harmless the Indemnified Parties from and against any and all Losses(including, without limitation, reasonable attorneys' fees and costs incurred in theinvestigation, defense, and settlement of Losses incurred in correcting any prohibitedtransaction or in the sale of a prohibited loan, and in obtaining any individual prohibitedtransaction exemption under ERISA that may be required, in Lender's sole discretion)that Lender may incur, directly or indirectly, as a result of a default under Section xxx.

(e) Upon written request by any Indemnified Party, Borrowershall defend such Indemnified Party (if requested by any Indemnified Party, in the name

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of the Indemnified Party) by attorneys and other professionals approved by theIndemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, intheir sole and absolute discretion, engage their own attorneys and other professionalsto defend or assist them, and, at the option of Indemnified Parties, their attorneys shallcontrol the resolution of claim or proceeding. In the event Borrower fails to defend theIndemnified Parties in accordance with the terms of this Agreement or any of theIndemnified Parties shall determine that the attorneys and professionals hired byBorrower have a conflict of interest, upon demand, Borrower shall pay or, in the soleand absolute discretion of the Indemnified Parties, reimburse, the Indemnified Partiesfor the payment of reasonable fees and disbursements of attorneys, engineers,environmental consultants, laboratories and other professionals in connection therewith.

(f) Borrower hereby agrees to pay for or, if Borrower’s fails topay, to reimburse Lender for, any fees and expenses incurred by any Rating Agency inconnection with any Rating Agency review of the Loan or any consent, approval, waiveror confirmation obtained from such Rating Agency pursuant to the terms and conditionsof the Loan Documents, and Lender shall be entitled to require payment of such feesand expenses as a condition precedent to obtaining any such consent, approval, waiveror confirmation.

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INDEMNIFICATION CLAUSE FOR BENEFIT OF LENDERIN CONNECTION WITH MORTGAGE LOAN ORIGINATED

FOR SALE AS PART OF A SECURITIZATION

Securitization Indemnification. Borrower understands that all informationprovided to Lender by Borrower, its Affiliates or their respective agents, counsel andrepresentatives, including information provided (y) in connection with a SecondaryMarket Transaction or the underwriting or closing of the Loan or (z) at any time after thedate hereof (including financial statements of Borrower, operating statements and rentrolls with respect to the Property) (“Provided Information”) may be included in writtenmaterials (including a prospectus, private placement memorandum or other marketingor offering documentation) (“Disclosure Documents”) used or provided to Investors orRating Agencies in connection with a Secondary Market Transaction and may also beincluded in filings with the Securities and Exchange Commission pursuant to theSecurities Act of 1933, as amended (the “Securities Act”), or the Securities andExchange Act of 1934, as amended (the “Exchange Act”), and may be made availableto Investors, Rating Agencies and other advisory and service providers relating toSecondary Market Transactions. Borrower hereby agrees to indemnify Lender, anyAffiliate of Lender that has filed any registration statement relating to a Securitization orhas acted as the issuer, sponsor, depositor or seller in connection with a Securitization,any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaserof Securities issued in connection with a Securitization, any other issuers, depositors,underwriters, placement agents or initial purchasers of Securities issued in connectionwith a Securitization, and each of their respective officers, directors, partners,employees, representatives, agents and Affiliates, and each Person that controls anysuch Person within the meaning of Section 15 of the Securities Act or Section 20 of theExchange Act (collectively, the “Securitization Indemnified Parties”) for any Losses(collectively, the “Securitization Indemnification Liabilities”) to which anySecuritization Indemnified Party may become subject insofar as the SecuritizationIndemnification Liabilities arise out of or are based upon (i) any untrue statement oralleged untrue statement of any material fact contained in any Provided Information orthe omission or alleged omission to state in any Provided Information a material factrequired to be stated in such information or necessary in order to make the statementsin such information, in light of the circumstances under which they were made, notmisleading, (ii) a breach of the representations and warranties made by Borrower inSections xxxx hereof, (iii) any untrue statement or alleged untrue statement of amaterial fact in any Disclosure Document, or any omission or alleged omission to statea material fact required to be stated in any Disclosure Document or necessary in orderto make the statements in any Disclosure Document, in light of the circumstances underwhich they were made, not misleading, (iv) any Exchange Act Filings and informationtherein or other reports containing comparable information that are required to be made“available” to holders of the Securities under applicable Legal Requirements, as itrelates to the Property, Borrower, Guarantor, Manager or any Affiliate of Borrower,Guarantor, Manager or any other aspect of the Loan or (v) any indemnification made byany Securitization Indemnified Party to the Rating Agencies in connection with issuing,monitoring or maintaining the securities issued in connection with any securitization ofthe Loan (in the case of clauses (iii)-(v), to the extent such Losses arise out of or are

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based upon an untrue statement or omission made therein in reliance upon and inconformity with Provided Information). To the extent that any undertaking to indemnify,defend and hold harmless set forth in this Section xx may be unenforceable because itviolates any law or public policy, Borrower shall pay or contribute the maximum portionthat it is permitted to pay or contribute and satisfy under applicable law to the paymentand satisfaction of all Securitization Indemnification Liabilities incurred by theSecuritization Indemnified Parties. Borrower agrees that the obligations set forth in thisSection xx shall apply whether or not any Securitization Indemnified Party is a formalparty to any claim, action, suit or proceeding. Borrower further agrees that theSecuritization Indemnified Parties are intended third party beneficiaries under thisSection xx. The liabilities and obligations of Borrower and the SecuritizationIndemnified Parties under this Section xx shall survive the satisfaction and discharge ofthe Debt.

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TYPICAL RECOURSE CARVE-OUT PROVISIONIN CONNECTION WITH COMMERCIAL MORTGAGE LOAN

Subject to the qualifications below, Lender shall not enforce the liability andobligation of Borrower to perform and observe the obligations contained in thisAgreement, the Note or the Security Instrument by any action or proceeding wherein amoney judgment shall be sought against Borrower, except that Lender may bring aforeclosure action, action for specific performance or other appropriate action orproceeding to enable Lender to enforce and realize upon this Note, the SecurityInstrument, the other Loan Documents, and the interest in the Property, the Rents andany other collateral given to Lender created by this Agreement, the Note, the SecurityInstrument and the other Loan Documents; provided, however, that any judgment in anysuch action or proceeding shall be enforceable against Borrower only to the extent ofBorrower’s interest in the Property, in the Rents and in any other collateral given toLender. Lender, by accepting this Agreement, the Note and the Security Instrument,agrees that it shall not, except as otherwise provided in the Security Instrument, sue for,seek or demand any deficiency judgment against Borrower in any such action orproceeding, under or by reason of or under or in connection with this Agreement, theNote, the other Loan Documents or the Security Instrument. The provisions of thisSection xxx shall not, however, (a) constitute a waiver, release or impairment of anyobligation evidenced or secured by this Agreement, the Note, the other LoanDocuments or the Security Instrument; (b) impair the right of Lender to name Borroweras a party defendant in any action or suit for judicial foreclosure and sale under theSecurity Instrument; (c) affect the validity or enforceability of any indemnity (including,without limitation, the Environmental Indemnity), guaranty (including without limitation,the Guaranty) master lease or similar instrument made in connection with thisAgreement, the Note, the Security Instrument, or the other Loan Documents; (d) impairthe right of Lender to obtain the appointment of a receiver; (e) impair the enforcement ofthe Assignment of Leases and Rents executed in connection herewith; (f) impair theright of Lender to obtain a deficiency judgment or other judgment on the Note againstBorrower if necessary to obtain any Insurance Proceeds or Awards to which Lenderwould otherwise be entitled under the Security Instrument; provided however, Lendershall only enforce such judgment to the extent of the Insurance Proceeds and/orAwards, or (g) constitute a waiver of the right of Lender to enforce the liability andobligation of Borrower, by money judgment or otherwise, to the extent of any Lossesarising out of or in connection with the following:

(i) fraud, intentional or material misrepresentation byBorrower, Guarantor or any of their respective Affiliates, or officers in connectionwith the Loan;

(ii) the gross negligence or willful misconduct by or onbehalf of Borrower, Guarantor or any of their respective Affiliates, agents orrepresentatives in connection with the Loan;

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(iii) the removal or disposal of any portion of the Propertyafter an Event of Default, unless any personal property that is removed ordisposed of is replaced with personal property of the same utility and the same orgreater value;

(iv) the misappropriation, misapplication or conversion byBorrower of (A) any Insurance Proceeds paid by reason of any Casualty, (B) anyAwards or other amounts received in connection with a Condemnation of all or aportion of the Property, or (C) any Rents collected and not applied in accordancewith the Loan Documents;

(v) the failure to deliver to Lender upon a foreclosure ofthe Security Instrument any security deposits, advance deposits or any otherdeposits collected with respect to the Property, except to the extent any suchsecurity deposits were applied in accordance with the terms and conditions of theapplicable Leases prior to such foreclosure or action in lieu thereof;

(vi) Borrower’s failure to obtain and maintain in full forceand effect fully paid for Policies as required by this Agreement or to pay anyTaxes or assessments affecting the Property, provided that Borrower will not beliable under this clause (vi) to the extent that (x) the Property does not generatesufficient cash flow to pay such sums during the applicable period or (y) sufficientfunds have been deposited in the applicable Reserve Fund, Lender’s access tosuch funds is not restricted by court order or any actions of Borrower orGuarantor, Lender is obligated to apply or make available such funds for suchpurposes and Lender does not apply or make available such funds for thepayment of Taxes or assessments or premiums for Policies, as applicable;

(vii) failure to pay charges for labor or materials or othercharges that can create Liens on any portion of the Property, provided thatBorrower will not be liable under this clause (vii) to the extent that the Propertydoes not generate sufficient cash flow to pay such sums unless such chargeswere incurred in violation of the Loan Documents;

(viii) the occurrence of any material physical waste at theProperty, provided that nothing contained in this clause (ix) shall be deemed torequire Borrower to make any capital repairs to the Property unless Borrower, itsagents or principals are in receipt of sufficient gross revenues from the Propertyto pay same;

(ix) Borrower’s or Guarantor's commission of a criminalact which results in seizure or forfeiture of the Property or any portion thereof;

(x) the breach of the SPE Covenants in any materialrespect;

(xi) Borrower’s failure to permit on-site inspections of theProperty or to provide financial information or to appoint a new property manager

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upon written request of Lender, in each case as required by, and in accordancewith the terms and provisions of, this Agreement and the other Loan Documents,but in each case, only to the extent that such failure remains uncured for thirty(30) days or more following Lender's delivery of written notice thereof toBorrower;

(xii) Borrower fails to pay for and complete any RequiredProperty Improvement Work under the Franchise Agreement or anyReplacement Franchise Agreement;

(xiii) if the Franchise Agreement is amended, modified orterminated without Lender’s prior written consent other than as expresslypermitted by this Agreement; or

(xiv) Borrower's failure to pay for and complete anyproperty improvement work required under the Franchise Agreement or anyreplacement thereof, throughout the term of the Loan.

Notwithstanding anything to the contrary in this Agreement, the Note or any ofthe other Loan Documents, (A) Lender shall not be deemed to have waived any rightwhich Lender may have under Section 506(a), 506(b) or 1111(b) or any other provisionsof the U.S. Bankruptcy Code or any other Bankruptcy Law to file a claim for the fullamount of the Debt or to require that all collateral shall continue to secure all of theObligations in accordance with the Loan Documents, and (B) the Debt shall be fullyrecourse to Borrower in the event that any of the following occur:

(1) Borrower fails to maintain its status as a single purposeentity as required by, and in accordance with the terms and provisions of,this Agreement and the other Loan Documents, and such failure is a factorin the consolidation of the assets and liabilities of Borrower and any otherPerson;

(2) Borrower fails to obtain Lender’s prior consent to anyIndebtedness except to the extent expressly permitted by this Agreement;

(3) Borrower fails to obtain Lender’s prior consent to anyTransfer except to the extent expressly permitted by this Agreement;

(4) Borrower files a voluntary petition under the Bankruptcy Law;

(5) Guarantor or an Affiliate, officer, director, or representativewhich controls, directly or indirectly, Borrower files, or joins in the filing of,an involuntary petition against Borrower under the Bankruptcy Law, orsolicits or causes to be solicited petitioning creditors for any involuntarypetition against Borrower from any Person;

(6) Borrower files, without the prior written consent of Lender, ananswer consenting to or otherwise acquiescing in or joining in any

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involuntary petition filed against it by any other Person under theBankruptcy Law, or solicits or causes to be solicited petitioning creditorsfor any involuntary petition against Borrower from any Person butexpressly permitting Borrower to appear in any proceeding relating to theforegoing to assert defenses to, and to dismiss or stay, such action withinthe time periods provided under the Loan Documents;

(7) Guarantor or any Affiliate, officer, director, or representativewhich controls, directly or indirectly, Borrower consents to or acquiesces inor joins in an application for the appointment of a custodian, receiver,trustee, or examiner for Borrower or any portion of the Property; or

(8) Borrower makes an assignment for the benefit of creditors,or admits, in writing (except to Lender or its successors or assigns) or inany action or proceeding, its insolvency or inability to pay its debts as theybecome due.

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TYPICAL REPRESENTATIONS AND WARRANTIES ANDRELATED INDEMNIFICATION PROVISIONS IN CONNECTION WITH

REAL ESTATE PURCHASE AND SALE TRANSACTION

Representations, Warranties and Covenants of Seller. Subject to the provisionsof this Subsection XX, Seller hereby represents and warrants to Purchaser that, as ofthe date of this Agreement and, except as otherwise disclosed in the Update, as of theapplicable Closing Date:

(a) Due Authority. This Agreement and all agreements, instrumentsand documents herein provided to be executed or to be caused to be executed by eachPhase LLC is or, on the applicable Closing Date, shall be, duly authorized, executedand delivered by and is or, on the applicable Closing Date, shall be binding upon theapplicable Phase LLC. Each Phase LLC is a limited liability company, duly organizedand validly existing and in good standing under the laws of the State of Delaware, and isduly authorized and qualified to do all things required of it under this Agreement.

(b) To Seller’s knowledge, except as set forth in Schedule XX attachedhereto and made a part hereof, Seller has not received, any written notice from anyGovernmental Authority of any violation of applicable Laws with respect to the Propertywhich remains uncured in any material respect.

(c) Except as set forth in Schedule XX attached hereto and made apart hereof, there is no pending or, to Seller's knowledge, threatened (in writing)litigation or condemnation action against or with respect to the Seller or Property.

(d) There are no leases or other agreements for the occupancy of theOption Parcels other than those described in Schedule XX attached hereto and made apart hereof (collectively, together with any leases hereinafter entered by Seller inaccordance with the terms of this Agreement, the "Leases").

(e) Seller has not received written notice of any default under any ofthe Leases which remains uncured other than as described in Schedule XX.

(f) There are no service contracts or equipment leases with respect tothe Option Parcels, other than those described in Schedule XX attached hereto andmade a part hereof (collectively, together with any service contracts or equipmentleases hereinafter entered by Seller in accordance with the terms of this Agreement, the"Contracts").

(g) Seller has not received written notice of any default under any ofthe Contracts which remains uncured other than as described in Schedule XX.

(h) Schedule XX attached hereto and made a part hereof represents acomplete list of all of the third party building physical condition and environmentalstudies and reports obtained by Seller and its Affiliates with respect to the Option

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Parcels since (the "Reports"). To the knowledge of Seller, it has delivered to Purchaserfull, true and correct copies of all Reports (and all amendments and supplementsthereto).

(i) Except as provided in the Reports, to the knowledge of the Seller,(A) none of the Option Parcels has been used for the generation, manufacture, refining,transportation, treatment, storage, handling, release or disposal of hazardous materials(as defined below), hazardous substances (as defined below) or hazardous wastes, (asdefined below) in violation of any applicable Environmental Laws and (B) no hazardousmaterials, hazardous substances or hazardous wastes have been released on anyOption Parcel in violation of any applicable Environmental Law. For the purposes of thissubsection, "hazardous materials", "hazardous substances" and "hazardous wastes"shall mean any material which may be dangerous to health or to the environment,including without implied limitation all "hazardous materials", "hazardous substances","hazardous wastes" and "oil" as defined in or contemplated by any applicableEnvironmental Law, including all of the following statutes and their implementingregulations, as the same may have been amended through the date hereof:

(i) Comprehensive Environmental Response, Compensationand Liability Act of 1980, 42 U.S.C. §9601 et seq.;

(ii) Toxic Substances Control Act, 15 U.S.C. §2601 et seq.;

(iii) Federal Insecticide, Fungicide, and Rodenticide Act, 7U.S.C. §136;

(iv) Hazardous Materials Transportation Act, 49 U.S.C. §§1801-1812;

(v) Federal Water Pollution Control Act 33 U.S.C. §1251 et seq.;

(vi) Federal Solid Waste Disposal Act, 42 U.S.C. §6901 et seq.;

(vii) Clean Air Act, 42 U.S.C. §7401 et seq.; and

(viii) Applicable laws and regulations of the State of Floridarelating to hazardous matter, substances or wastes, waste oil, and air or waterquality.

(j) No Insolvency. Seller is not a debtor in any state or federalinsolvency, bankruptcy or receivership proceeding.

(k) Foreign Person. Seller is not a "foreign person" as defined inSection 1445 of the Code or any related regulations, as amended.

Notwithstanding and without limiting the foregoing, if any of the representationsor warranties of Seller contained in this Agreement or in any document or instrumentdelivered in connection herewith are false or inaccurate, or Seller is in breach or default

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of any of its obligations under this Agreement, and Purchaser nonetheless closes atransaction hereunder and purchases the Property or any Phase thereof, then Sellershall have no liability or obligation respecting such false or inaccurate representations orwarranties or other breach or default (and any cause of action resulting therefrom shallterminate upon the applicable Closing) in the event that on or prior to Closing,Purchaser shall have had actual knowledge of the false or inaccurate representations orwarranties or other breach or default. Purchaser acknowledges that the representationsand warranties are made as of the date hereof and that representations and warrantiesthat are true and correct as of the date hereof may not be true and correct as of anyparticular Closing Date, provided that in the event that Purchaser obtains actualknowledge that there shall have been a material adverse change in the accuracy of therepresentations and warranties contained in this Subsection XX which first arises afterthe delivery of such Option Exercise Notice or, in the event any such material adversechange is disclosed by the Update, Purchaser shall have the right to deliver aRescission Notice as to the applicable Phase(s). Except as otherwise expresslyprovided in the immediately preceding sentence, any change in the accuracy of any ofthe representations and warranties contained in this Subsection XX shall not constitutea default or entitle Purchaser to any relief hereunder. Additionally, notwithstandinganything herein to the contrary, to the extent an Update reveals the existence of aLease or Contract entered into by Seller pursuant to the terms of this Agreement, theapplicable representation or warranty, as amended by the Update, shall be deemed tobe true and correct and Purchaser shall not have the right to deliver a Rescission Noticeas a result thereof.

References to the "knowledge", "best knowledge" and/or "actual knowledge" ofSeller or words of similar import shall refer only to the current actual (as opposed toimplied or constructive) knowledge of ______________ and ______________ (the"Seller Knowledge Parties") and shall not be construed, by imputation or otherwise, torefer to the knowledge of Seller or any parent, subsidiary or Affiliate of Seller or to anyother officer, agent, manager, representative or employee of Seller or to impose uponthe Knowledge Parties any duty to investigate the matter to which such actualknowledge, or the absence thereof, pertains. Notwithstanding anything to the contrarycontained in this Agreement, or any substitute for either shall have no personal liabilityhereunder.

Subject to the provisions of Subsections XX and XX hereof, Seller shallindemnify Purchaser and hold Purchaser harmless from and against any and all claims,suits, liabilities, damages, losses and expenses (including but not limited to reasonableattorneys’ fees and other costs of defense) arising by reason of any breach of therepresentations and warranties of Seller contained in this Subsection XX. Therepresentations and warranties of Seller set forth in this Subsection XX, as the samemay be modified by any Update, shall survive for a period of three hundred sixty-five(365) days. In furtherance thereof, Purchaser acknowledges and agrees that it shallhave no right to make any claim against any Seller on account of any breach of anyrepresentation or warranty set forth in Subsection XX unless (i) Purchaser shall delivernotice of such claim to Seller within three hundred sixty-five (365) days following theapplicable Closing Date and (ii) except to the extent that Purchaser and Seller shall

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reach a settlement regarding such claim, Purchaser shall institute an action to enforcesuch claim within one hundred eighty (180) days following the delivery of a writtennotice from Seller to Purchaser indicating that Seller disclaims any liability with respectto such claim and is not prepared to engage (or continue engaging) in any settlementdiscussions with respect thereto. To the fullest extent permitted by Law, the foregoingshall constitute an express waiver of any applicable statute of limitations on account ofSeller’s breach of its representations and warranties contained in this Subsection XX.

References to the "actual knowledge" of Purchaser or words of similar importshall refer only to the current actual (as opposed to implied or constructive) knowledgeof ______________ (the "Purchaser Knowledge Parties"), and shall not be construed,by imputation or otherwise, to refer to the knowledge of Purchaser or any parent,subsidiary or Affiliate of Purchaser or to any other officer, agent, manager,representative or employee of Seller or to impose upon the Purchaser KnowledgeParties any duty to investigate the matter to which such actual knowledge, or theabsence thereof, pertains. Notwithstanding anything to the contrary contained in thisAgreement, the Purchaser Knowledge Parties shall have no personal liability hereunder.

Indemnification and Release. Each indemnification under this Agreement shallbe subject to the following provisions: (a) the indemnitee shall notify indemnitor of anysuch claim against indemnitee within fifteen (15) days after it has notice of such claim,but failure to notify indemnitor shall in no case prejudice the rights of indemnitee underthis Agreement unless indemnitor shall be prejudiced by such failure and then only tothe extent of such prejudice; and (b) should indemnitor fail to discharge or undertake todefend indemnitee against such liability within fifteen (15) days after the indemniteegives the indemnitor written notice of the same, then indemnitee may settle suchliability, and indemnitor’s liability to indemnitee shall be conclusively established by suchsettlement, the amount of such liability to include both the settlement consideration andthe reasonable costs and expenses (including, without limitation, attorneys’ fees anddisbursements) incurred by indemnitee in effecting such settlement. The indemnificationobligations under this Agreement shall survive the final Closing or a termination of thisAgreement.

RELEASE. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN,EFFECTIVE AS OF THE CLOSING DATE WITH RESPECT TO EACH PHASE,PURCHASER SHALL BE DEEMED TO HAVE RELEASED SELLER AND ALL SELLERRELATED PARTIES FROM ALL CLAIMS WHICH PURCHASER OR ANYPURCHASER RELATED PARTIES HAS OR MAY HAVE FROM THE BEGINNING OFTIME, ARISING FROM, RELATED TO OR IN CONNECTION WITH SUCH PHASE,INCLUDING WITHOUT LIMITATION ANY SUCH CLAIM BASED ON THEDOCUMENTS AND INFORMATION REFERRED TO HEREIN, THE LEASES ANDTHE TENANTS OF THE PHASE, ANY CONSTRUCTION DEFECTS, ERRORS OROMISSIONS IN THE DESIGN OR CONSTRUCTION OF ALL OR ANY PORTION OFSUCH PHASE AND ANY ENVIRONMENTAL CONDITIONS, AND PURCHASERSHALL NOT LOOK TO SELLER OR ANY SELLER RELATED PARTIES INCONNECTION WITH THE FOREGOING FOR ANY REDRESS OR RELIEF. THISRELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF

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ITS EXPRESSED TERMS AND PROVISIONS, INCLUDING THOSE RELATING TOUNKNOWN AND UNSUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION.THIS RELEASE SHALL NOT APPLY TO ANY OF SELLER’S OBLIGATIONS UNDERTHIS AGREEMENT OR ANY REPRESENTATIONS OR WARRANTIES OF SELLERCONTAINED IN SUBSECTION XX HEREOF TO THE EXTENT THAT THISAGREEMENT EXPRESSLY PROVIDES THAT SUCH OBLIGATIONS ORREPRESENTATIONS AND WARRANTIES SHALL SURVIVE CLOSING WITHRESPECT TO A PHASE. NOTHING CONTAINED HEREIN SHALL BE DEEMED TORELEASE ANY THIRD PARTY AGENT OF SELLER FROM LIABILITY FOR ANYAUDITS OR REPORTS INDEPENDENTLY CERTIFIED TO PURCHASER BY SUCHTHIRD PARTY AGENT PROVIDED THAT IN NO EVENT SHALL PURCHASER’SRELIANCE THEREON INCREASE THE LIABILITY OF SELLER OR ANY OTHERSELLER RELATED PARTY.

Limitation of Liability. Notwithstanding anything to the contrary contained in thisAgreement or any documents executed in connection herewith, if the Closing of anytransaction contemplated hereunder shall have occurred, the aggregate liability of Sellerarising in connection with the representations and warranties, of Seller under thisAgreement or any document or certificate executed or delivered in connection herewithshall not exceed $1,000,000 with respect to any Phase or $5,000,000 in the aggregate,provided that the foregoing cap on liability shall not apply to damages resulting from anyaction by Seller which prevents Purchaser from exercising its specific performanceremedy or materially impairs the value of such remedy as more particularly described inSubsection XX. Notwithstanding anything to the contrary contained herein, Purchaseracknowledges and agrees that it shall have no right to make any claim against Seller forindemnification pursuant to this Subsection XX from and against any Losses sustainedby reason of (x) any breach of any representation or warranty contained in SubsectionXX, unless (i) Purchaser shall deliver notice of such claim to Seller within three hundredsixty-five (365) days following the applicable Closing Date and (ii) except to the extentthat Purchaser and Seller shall reach a settlement regarding such claim, Purchasershall institute an action to enforce such claim within one hundred eighty (180) daysfollowing the delivery of a written notice from Seller to Purchaser indicating that Sellerdisclaims any liability with respect to such claim and is not prepared to engage (orcontinue engaging) in any settlement discussions with respect thereto. To the fullestextent permitted by Law, the foregoing shall constitute an express waiver of anyapplicable statute of limitations on account of Purchaser’s rights under this SubsectionXX hereof by reason of any breach of Seller’s representations and warrantiescontained in Subsection XX hereof.

No shareholder, member or agent of Seller, nor any Seller Related Parties shallhave any personal liability, directly or indirectly, under or in connection with thisAgreement or any agreement made or entered into under or pursuant to the provisionsof this Agreement, or any amendment or amendments to any of the foregoing made atany time or times, heretofore or hereafter, and Purchaser and its successors andassigns and, without limitation, all other persons and entities, shall look solely to Seller’sassets for the payment of any claim or for any performance, and Purchaser, on behalf ofitself and its successors and assigns, hereby waives any and all such personal liability.

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Except with respect to any personal guaranty which may be provided byPurchaser as Adequate Assurances, no shareholder, member or agent of Purchaser,nor any Purchaser Related Parties shall have any personal liability, directly or indirectly,under or in connection with this Agreement or any agreement made or entered intounder or pursuant to the provisions of this Agreement, or any amendment oramendments to any of the foregoing made at any time or times, heretofore or hereafter,and Seller and its successors and assigns and, without limitation, all other persons andentities, shall look solely to Purchaser’s assets for the payment of any claim or for anyperformance, and Seller, on behalf of itself and its successors and assigns, herebywaives any and all such personal liability.

The provisions of this Subsection XX shall survive the final Closing or atermination of this Agreement.

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(a) Borrower shall pay or, if Borrower fails to pay, reimburse Lender uponreceipt of notice from Lender, for all reasonable costs and expenses (includingreasonable attorneys’ fees and disbursements) incurred by Lender in connection with(i) Borrower’s ongoing performance of and compliance with Borrower’s agreements andcovenants contained in the Loan Documents on its part to be performed or compliedwith after the Closing Date, including, without limitation, confirming compliance withenvironmental and insurance requirements; (ii) Lender’s ongoing performance of andcompliance with all agreements and covenants contained in the Loan Documents on itspart to be performed or complied with after the Closing Date; (iii) the negotiation,preparation, execution, delivery and administration of any consents, amendments,waivers or other modifications to the Loan Documents and any other documents ormatters requested by Borrower or any Guarantor; (iv) the filing and recording fees andexpenses, title insurance and reasonable fees and expenses of counsel for providing toLender all required legal opinions, and other similar expenses incurred, in creating andperfecting the Liens in favor of Lender pursuant to the Loan Documents; (v) enforcing orpreserving any rights, in response to third party claims or the prosecuting or defendingof any action or proceeding or other litigation, in each case against, under or affectingBorrower, the Loan Documents, the Property or any other security given for the Loan;and (vi) enforcing any Obligations of or collecting any payments due from Borrower orGuarantor under the Loan Documents or with respect to the Property or in connectionwith any refinancing or restructuring of the credit arrangements provided under thisAgreement in the nature of a “work-out” or of any Bankruptcy Action; provided, however,that Borrower shall not be liable for the payment of any such costs and expenses to theextent the same arise by reason of the gross negligence, illegal acts, fraud or willfulmisconduct of Lender, as determined by a final non-appealable judgment of a court ofcompetent jurisdiction. Any costs due and payable to Lender may be paid, at Lender’selection in its sole discretion, from any amounts in the Cash Management Account.

(b) Borrower shall indemnify, defend and hold harmless the shallLender and any person or entity who is or will have been involved in the origination ofthe Loan, any person or entity who is or will have been involved in the servicing of theLoan, any person or entity in whose name the encumbrance created by the SecurityInstrument is or will have been recorded and persons and entities who may hold oracquire or will have held a full or partial interest in the Loan, including, but not limited to,custodians, trustees and other fiduciaries who hold or have held a full or partial interestin the Loan (collectively, the "Indemnified Parties") from and against any and allclaims, suits, liabilities (including, without limitation, strict liabilities), actions,proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties,charges, fees, expenses, judgments, awards, amounts paid in settlement of whateverkind or nature (including but not limited to reasonable attorneys’ fees and other costs ofdefense) (collectively, "Losses")that may be imposed on, incurred by, or assertedagainst any Indemnified Party in any manner relating to or arising out of (i) any defaultor breach by Borrower of its Obligations under, or any material misrepresentation by

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Borrower contained in, the Loan Documents, (ii) the use or intended use of theproceeds of the Loan, (iii) any materials or information provided by or on behalf ofBorrower, or contained in any documentation approved by Borrower; (iv) ownership ofthe Security Instrument, the Property or any interest therein, or receipt of any Rents; (v)any accident, injury to or death of persons or loss of or damage to property occurring in,on or about the Property or on the adjoining sidewalks, curbs, adjacent property oradjacent parking areas, streets or ways; (vi) any use, nonuse or condition in, on orabout the Property or on adjoining sidewalks, curbs, adjacent property or adjacentparking areas, streets or ways; (vii) performance of any labor or services or thefurnishing of any materials or other property in respect of the Property; (viii) any failureof the Property to comply with any Legal Requirement; (ix) any claim by brokers, findersor similar persons claiming to be entitled to a commission in connection with any Leaseor other transaction involving the Property or any part thereof, or any liability assertedagainst such Indemnified Party with respect thereto; (x) the claims of any lessee of anyportion of the Property or any Person acting through or under any lessee or otherwisearising under or as a consequence of any Lease; and (xi) any indemnification to theRating Agencies in connection with issuing, monitoring or maintaining the Securitiesinsofar as such Losses arise out of any untrue statement of any material fact in anymaterials or information provided by or on behalf of Borrower or arise out of theomission to state a material fact in such materials or information required to be statedtherein or necessary in order to make the statements in such materials or information, inlight of the circumstances under which they were made, not misleading (collectively, the“Indemnified Liabilities”); provided, however, that Borrower shall not have anyobligation to the Indemnified Parties hereunder to the extent that such IndemnifiedLiabilities arise from the gross negligence, illegal acts, fraud or willful misconduct of theIndemnified Parties, as determined by a final non-appealable judgment of a court ofcompetent jurisdiction. The provisions of Section xxx (a), this Section xxx(b), Sectionxxx(c) and Section xxx (d) shall survive any payment or prepayment of the Loan andany foreclosure or satisfaction of the Security Instrument.

(c) Borrower shall, at its sole cost and expense, indemnify,defend and hold harmless Indemnified Parties from and against any and all Lossesimposed on, incurred by, or asserted against any Indemnified Parties and directly orindirectly arising out of or in any way relating to any tax on the making and/or recordingof the Security Instrument, the Note or any of the other Loan Documents, but excludingany income, franchise or other similar taxes.

(d) Borrower shall, at its sole cost and expense, indemnify,defend and hold harmless the Indemnified Parties from and against any and all Losses(including, without limitation, reasonable attorneys' fees and costs incurred in theinvestigation, defense, and settlement of Losses incurred in correcting any prohibitedtransaction or in the sale of a prohibited loan, and in obtaining any individual prohibitedtransaction exemption under ERISA that may be required, in Lender's sole discretion)that Lender may incur, directly or indirectly, as a result of a default under Section xxx.

(e) Upon written request by any Indemnified Party, Borrowershall defend such Indemnified Party (if requested by any Indemnified Party, in the name

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of the Indemnified Party) by attorneys and other professionals approved by theIndemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, intheir sole and absolute discretion, engage their own attorneys and other professionalsto defend or assist them, and, at the option of Indemnified Parties, their attorneys shallcontrol the resolution of claim or proceeding. In the event Borrower fails to defend theIndemnified Parties in accordance with the terms of this Agreement or any of theIndemnified Parties shall determine that the attorneys and professionals hired byBorrower have a conflict of interest, upon demand, Borrower shall pay or, in the soleand absolute discretion of the Indemnified Parties, reimburse, the Indemnified Partiesfor the payment of reasonable fees and disbursements of attorneys, engineers,environmental consultants, laboratories and other professionals in connection therewith.

(f) Borrower hereby agrees to pay for or, if Borrower’s fails topay, to reimburse Lender for, any fees and expenses incurred by any Rating Agency inconnection with any Rating Agency review of the Loan or any consent, approval, waiveror confirmation obtained from such Rating Agency pursuant to the terms and conditionsof the Loan Documents, and Lender shall be entitled to require payment of such feesand expenses as a condition precedent to obtaining any such consent, approval, waiveror confirmation.